CORPORATE GOVERNANCE REPORT 2015-16
(as required under schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)
COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The Company believes that good Governance practices ensures fair and effective conduct of the affairs of the Company and will help the Company to achieve its goal of maximizing value to the shareholders and enable the company to fulfill its obligations to all stakeholders such as customers, vendors, employees and to the communities it operates in.
The company remains committed to a culture of integrity, fairness, transparency and accountability, its behavior and functioning.
BOARD OF DIRECTORS
The Board of Directors of the Company (the "Board") decides the policy and strategy for the Company and has the overall superintendence and control of the management of the Company.
1) The Board of Directors of your Company constituted one Non-Executive Chairman, one Managing Director, two Executive Directors and eight Non-Executive Directors, until 21.03.2016.
From 14.05.2016 onwards the Board of Directors of your Company comprises of a Chairman - cum - Managing Director, two Executive Directors and eight Non-Executive Directors.
2) All Directors other than Mr.S.Santhanam, Mr.R.Sampath, Mrs.Ramya Bharathram, Mr. R.Parthasarathy and Mr.P.Mohanachandra Nair are Independent Directors. Mrs. Ramya Bharathram is a daughter of Mr. R.Sampath. Mr.R.Parthasarathy is the brother of Mr. R.Sampath.
b) Board Meetings:
Six meetings of the Board of Directors were held on May 6, 2015, August 3, 2015, October 28, 2015, February 1, 2016, March 11, 2016 and March 21, 2016. All operational, compliance and statutorily required information were placed before the Board. All significant events were also reported to the Board.
The Company Secretary, in consultation with the Managing Director, drafted the agenda of the meetings. Agenda papers along with relevant details were circulated to all Directors, well in advance of the date of each of these Board meetings.
) Remuneration of Directors:
The remuneration paid to the Managing Director/ Whole-time Directors is within the ceiling as per the resolution approved by the shareholders/prescribed under the Schedule V to the Companies Act, 2013 and their terms of appointment are displayed at the company's website <http://www.thirumalaichemicals.com>
Currently, the Board has five Committees: the Audit Committee, the Stakeholders Relationship Committee, the Business Review Committee, the Nomination & Remuneration Committee and the Corporate Social Responsibility Committee.
Not less than three/fourth of the Members of the Audit Committee are Independent Directors.
Mr. R.Ravishankar is a Professional with extensive experience in Finance, Manufacturing and Business Management, M & A, and Strategic Consultancy. He is a Chartered Accountant and a Diplomate from IIM Ahmedabad. He was a senior partner heading the M&A Division in Ernst & Young for 10 years from 1997-2007, and earlier in senior positions in Ponds Ltd / Hindusthan Lever Ltd.
Mr. P.SHANKAR, joined the Indian Administrative Service in 1966 after a post-graduate degree in Economics, Madras University. In the course of a distinguished career he has served as the Chief Secretary of Tamil Nadu, and as Secretary to the Government of India in the Ministries of Heavy Industry, Sugar, Food and Public Distribution, and Petroleum. He was Central Vigilance Commissioner of India, a senior Constitutional position.
Mr. N. SUBRAMANIAN, is a Chemical Engineer from IIT, a Management Graduate from IIM Ahmedabad, and has 40 years of experience in the chemical industry in India and overseas. Mr. Subramanian is highly respected for his management expertise in leading companies in India and E Asia, viz, Chemplast Sanmar, Atochem- Arkema, etc. and for his experience in the Chemical Industry, especially in the Asia Pacific region.
Mr. RAJ KATARIA is an experienced Investment Banker with over 20 years in Mergers and Acquisitions and Capital Markets. He also has significant expertise as Company Law and Corporate Structuring matters, most recently as Managing Director, in DSP- Merrill Lynch
Mr. R. SAMPATH is a B.Sc / BS in Chemical Engineering educated in the USA. He is a Director of Ultramarine & Pigments Ltd, which is one of the promoters of the Company. He has 40 years of experience in the uSA and India, in business operations and management.
The Composition of the Audit Committee of the Company meets with the requirements of Section 177 of the Companies Act, 2013 and as required under Reg. 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Audit Committee's objectives is to assist the Board in its responsibility for overseeing the processes related to the financial accounting, auditing and reporting practices of the Company and its compliances with the legal and regulatory requirements, the audits of the Company's financial statements and shall, inter alia, include, the recommendation for appointment, remuneration and terms of appointment of auditors of the company; review and monitor the auditor's independence and performance, and effectiveness of audit process; examination of the financial statement and the auditors' report thereon; approval or any subsequent modification of transactions of the company with related parties; scrutiny of intercorporate loans and investments; valuation of undertakings or assets of the company, wherever it is necessary; evaluation of internal financial controls and risk management systems; monitoring the end use of funds raised through public offers and related matters
b) Stakeholders Relationship Committee
The Stakeholders Relationship Committee deals with the following matters:
• Monitors expeditious redressal of Investor Grievance matters received from Stock Exchanges, SEBI, ROCE, etc.
• Monitors redressal of queries/complaints received from shareholders relating to Transfers, non-receipt of Annual Report, dividend, etc
• Any other matters related to share transfers.
Mr. T.Rajagopalan has been appointed as Company Secretary and Compliance Officer from 15th May, 2012. During the year, the Company received 20 queries/complaints from Shareholders which were all resolved promptly and fully. The process of share transfer is delegated to a R&T and is carried out by it in compliance with the Listing Agreement which will be confirmed and ratified by the Board at each subsequent meeting. All complaints/service requests of investors are redressed promptly to their satisfaction.
It may be noted that that the shareholding in dematerialized mode as on 31st March, 2016 was 96.72
e) Corporate Social Responsibility Committee
The Committee meets at such intervals as may be necessary.
Familiarization programmes for Directors
Details of the programmes have been disclosed on the company's website <http://www.thirumalaichemicals.com> Policy on Material Subsidiary
The details of the policy have been disclosed on the company's website <http://www.thirumalaichemicals.com> Policy on Related Party Transactions
The details of the policy have been disclosed on the company's website <http://www.thirumalaichemicals.com> POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Nomination and Remuneration (N&R) Committee has adopted a Charter which, inter alia, deals with the manner of selection of Board of Directors and CEO & Managing Director and their remuneration. This Policy is accordingly derived from the said Charter.
Criteria of selection of Non-Executive Directors
a. Prospective Directors shall be of high integrity, and with relevant expertise and experience, so as to have a diverse Board, with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.
b. In case of appointment of Independent Directors, the N&R Committee shall satisfy itself with regard to the independent nature of the Directors vis-a-vis the Company so as to enable the Board to discharge its function and duties effectively.
c. The N&R Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 of the Companies Act, 2013.
d. The N&R Committee shall consider the following attributes / criteria, whilst recommending to the Board, the candidature for appointment as Director.
i. Qualifications, expertise and experience of the Directors in their respective fields;
ii. Personal, Professional or business standing;
iii. Diversity of the Board.
The Non-Executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in the Board / Committee meetings and commission as detailed hereunder:
i. A Non-Executive Director shall be entitled to receive sitting fees for each meeting of the Board or Committee of the Board attended by him, of such sum as may be approved by the Board of Directors within the overall limits prescribed under the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014;
ii. A Non-Executive Director will also be entitled to receive commission on an annual basis, of such sum as may be approved by the Board on the recommendation of the N&R Committee;
iii. In determining the quantum of commission payable to the Directors, the N&R Committee shall make its recommendation after taking into consideration the overall performance of the Company and the onerous responsibilities required to be shouldered by the Director. The total commission payable to the Directors shall not exceed 1% of the net profit of the Company;
Managing Director/Whole-time Director - Criteria for selection / appointment
For the purpose of selection of the Managing Director/Whole-time Directors, the N&R Committee shall identify persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board. The Committee will also ensure that the incumbent fulfills such other criteria with regard to age and other qualifications as laid down under the Companies Act, 2013 or other applicable laws.
Remuneration for the Managing Director/Whole-time Director
At the time of appointment or re-appointment, the Managing Director/Whole-time Director shall be paid such remuneration as may be mutually agreed between the Company (which includes the N&R Committee and the Board of Directors) and the Managing Director/Whole-time Director within the overall limits prescribed under the Companies Act, 2013.
In determining the remuneration (including the fixed increment and performance bonus) the N&R Committee shall ensure / consider the following:
a. the relationship of remuneration and performance benchmarks is clear;
b. balance between fixed and incentive pay reflecting short and long term performance objectives, appropriate to the working of the Company and its goals;
c. responsibility required to be shouldered by the Managing Director/Whole-time Director, the industry benchmarks and the current trends;
Remuneration Policy for the Senior Management Employees
In determining the remuneration of the Senior Management Employees (i.e. KMPs and Senior Management executives) the N&R Committee shall ensure / consider the following:
i. the relationship of remuneration and performance benchmark is clear;
ii. the remuneration including annual increment and performance bonus is decided based on the criticality of the roles and responsibilities, the Company's performance vis-a-vis the annual budget achievement, individuals performance vis-a-vis Key Performance Indicator (KPI) and Key Responsibility Areas (KRA), industry benchmark and current compensation trends in the market.
The Managing Director will carry out the individual performance review based on the standard appraisal matrix and shall take into account the appraisal score card and other factors mentioned herein-above.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
Employees are asked to report any practices or actions believed to be inappropriate and against the interests of the Company or its code of conduct adopted or any other illegal acts to their immediate Manager. Report of violation may also be made directly to the Chief Executive Officer. Where appropriate, complaints may be made on a confidential basis to the Chairman of the Audit Committee / Board. The contact details are made available at the Company's website / Notice Board. All complaints received will be properly investigated by the recipients and report the outcome to the Audit Committee in sealed cover for appropriate action. The Company prohibits retaliation against any employee for such complaints made in good faith, while it also protects the rights of the incriminated person. No complaint has been registered during 2015-16. No personnel have been denied access to the Committee/Mechanism.
The Company's internal Audit is done by a firm of Chartered Accountants. The reports submitted by the Internal Auditors on the operations and financial transactions and the Action Taken Report on the same are placed before the Audit Committee, apart from the Statutory Auditors and the Senior Management of the Company.
For every quarter, the Executive Director (Manufacturing) and Manager (Accounts) at Ranipet, make a report of all statutory compliances which are placed before the Audit Committee, which is a detailed report. At the Board meeting following the Audit Committee meeting, the Company Secretary makes a report confirming statutory compliances for the said quarter. Exceptions are listed & reviewed in detail for action & correction.
During the year, there were no material significant transactions with the Directors or their relatives or the Management that has any potential conflict with the interests of the Company. All details relating to financial and commercial transactions where Directors may have a potential interest are provided to the Board, and the interested Directors neither participate in the discussion, nor do they vote on such matters.
There were no cases of non-compliance by the Company, nor any cases of penalties, strictures imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to capital markets during the last 3 years.
CODE OF CONDUCT:
The Company has laid down the Code of Conduct for all Board members and senior management of the Company, which is available on the Company's Website.
All Board members and Senior Management of the Company have affirmed compliance with their Code of Conduct for the financial year ended March 31, 2016. The Managing Director has also confirmed and certified the same. The certification is annexed at the end of this Report.
The Company has well laid down procedures to inform Board members about the risk assessment and adopted suitable forex policy including hedging to contain foreign exchange risk.
CEO /CFO CERTIFICATION:
Appropriate certification as required under Reg. 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Mr. R.Parthasarathy, Managing Director and Mr. P. Krishnamoorthy, Chief Financial Officer have certified to the Board regarding Financial Statements for the year ended 31st March, 2016.
MEANS OF COMMUNICATION:
The Company has promptly reported all material information including quarterly results and press releases to the Stock Exchanges where the Company's securities are listed. The quarterly results were communicated to the shareholders by way of advertisement in an English National Newspaper, normally in The Economic Times, Mumbai edition and in a vernacular language newspaper, normally in the Maharashtra Times, Mumbai edition. The results and other updates are displayed on the company's website <http://www.thirumalaichemicals.com>
The provisions of Reg. 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Reg. 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, wherever applicable to the company, are fully complied with. All the mandatory requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are disclosed in this report.
Further the company adopted the following discretionary requirements under Reg. 27(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
A. The Board
No separate Office was maintained by the Chairman of the company.
No separate Office is maintained by the present Chairman - cum - Managing Director.
B. Shareholder Rights
The company has not circulated a half-yearly declaration of financial performance/summary of significant events in the last six-months.
C. modified opinion(s) in audit report
Not applicable since there is no qualification in the audit reports.
D. Separate Posts of Chairperson and Chief Executive Officer
Separate persons occupied the position of Chairperson and Managing Director during the financial year.
E. Reporting of internal auditor
The Internal Auditors directly reported to the Audit Committee.
GENERAL SHAREHOLDERS INFORMATION
1) Date, time and venue of the 43rd AGM : 29th July 2016, 3.00 pm at Mysore Association Auditorium, Mysore Association, 393, Bhaudaji Road, Matunga C-Rly.,Mumbai
2) Date of Book Closure : 23rd July, 2016 to 29th July, 2016 (both days inclusive)
3) Dividend payment date : Not Applicable
4) Listing on Stock Exchanges with : BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400001. their addresses National Stock Exchange of India Ltd., Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (E) Mumbai – 400 051.
5) Listing fees : Paid as per the listing agreement.
6) ISIN No : INE 338A01016.
7) BSE Stock code : 500412
NSE Stock code : TIRUMALCHM
8) Registered office : Thirumalai House, Road No.29, Sion (East), Mumbai-400 022. Tel: +91-22- 2401 7841 / 7861 / 7853 / 7869 / 7834 Fax: +91-22-2401 1699 / 4754 E-mail: email@example.com
9) Registrar & Share Transfer Agent : Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, LBS Road, Bhandup (W), Mumbai-400 078. Tel: +91-22-2594 6970 Fax: +91-22-2594 6969 E-mail: firstname.lastname@example.org
10) Compliance Officer : Mr. T. Rajagopalan, Company Secretary Thirumalai Chemicals Limited Thirumalai House, Road No.29, Sion (East), Mumbai- 400 022. Tel: +91-22-2401 7841 / 61 / 53. Fax: +91-22-240 11699. E-mail: email@example.com
11) Share Transfer System : The Company’s shares are traded in the Stock Exchanges which are compulsorily in demat mode. Shares sent for physical transfer are registered promptly within 15 days from the date of receipt of completed and validly executed documents.
12) Financial Calendar :
Annual Results - 14th May, 2016
Mailing of Annual Reports - By 30th June, 2016
Results for the Quarter ending:
June 30, 2016 - By 13th August, 2016
September 30, 2016 - By 15th Nov, 2016
December 31, 2016 - By 14th Feb, 2017
March 31, 2017 - May, 2017
13) Dematerializations of shares : As on 31/3/2016, 96.72 % of the Company’s Shares representing 99,03,006 shares were held in the dematerialized form.
14) Plant Location : 25A, SIPCOT Industrial Complex Ranipet, Vellore District, Tamil Nadu. Tel: +91-4172-244 441. Fax: +91-4172-244 308. E-Mail: firstname.lastname@example.org
For Thirumalai Chemicals Limited
Place : Chennai,
date : 14th May, 2016