To The Members of Betex India Limited
Your Directors have pleasure in presenting the 30th Annual Report and Audited Statementof Accounts for the year ended 31st March 2017.
Your Company has delivered a mixed performance despite considerable headwinds. TheCompany has registered consolidated revenue of Rs. 57.91 Crores with Net Profit of Rs.1.11 Crores. We remained resolute and relentless in our quest for strengthening ourcost-competiveness better management of working capital and operational excellence acrossall businesses.
| || ||( Rs. In Lacs ) |
|Particulars ||2016-17 ||2015-16 |
|Sales & Income form operation ||5790.66 ||5648.12 |
|Other Income ||08.23 ||35.86 |
|Profit before Financial cost || || |
|Depreciation ||369.01 ||391.15 |
|and Exceptional items & Tax (EBIDTA) || || |
|Interest ||110.12 ||127.99 |
|Depreciation ||144.13 ||141.11 |
|Profit before Tax ||114.76 ||122.06 |
|Provision for Taxation || || |
|Current tax ||21.87 ||24.42 |
|Mat Credit ||-9.58 ||4.39 |
|Deferred Tax ||-8.93 ||-10.93 |
|Profit after Tax ||111.40 ||104.18 |
|Taxation for previous year ||0.00 ||0.00 |
|profit available for appropriation ||111.40 ||104.18 |
|Dividend on Equity & Pref. Shares Transfer to General Reserve ||- ||- |
The company has posted a satisfactory performance for the year under review. Incomefrom operation of the company has increased from Rs. 5648.12 Lacs to Rs. 5790.66Lacs. EBIDTA has been decreased from Rs. 391.15 Lacs to Rs. 369.01 Lacs andNet profit after Tax has been increased from Rs. 104.18 Lacs to Rs. 111.40Lacs in comparison to Previous year. Our earning per shares stand at Rs. 7.43 and BookValue per Shares at Rs. 135.83 ( Based on equity shares ) as on 31st March 2017.
The Board of directors do not recommended declaring dividend during the year due toploughing back the profit to be utilized in the setting up new modification cum expansionprograms and general corporate purposes.
As members are aware the company's shares are compulsorily tradable in the electronicform. As on March 31 2017 almost 78.11% of the Company's total paid-up capitalrepresenting 1500000 shares were in dematerialized form. In view of the numerousadvantages offered by the Depository system members holding shares in physical mode areadvised to avail of the facility of dematerialization on either of the Depositories.
The Company has not invited deposits from public in accordance with the Section 73 and74 of the Companies Act 2013 (corresponding Section 58 A of the Companies Act 1956).
Mr. Manish Kumar Somani (DIN: 00356113) is being retired by rotation and beingeligible offers himself for re-appointment The company has received also declarationsfrom all the Independent Directors confirming that they meet the criteria of independenceas prescribed both under the Companies Act 2013 and Regulation 16 of SEBI (LODR)Regulation 2015 of the Listing Agreement with the Stock Exchanges
DETAILS OF COMMITTEE DIRECTORS
The Committee shall comprise of at least two non-executive directors. The Board mayappoint the Chairperson of the Committee whether executive or non-executive as member ofthis committee. The Audit Committee and Nomination & Remuneration Committee wasre-constituted on 01.10.2015.
Composition of Audit Committee of Directors Nomination and Remuneration Committee ofDirectors and Stakeholders Relationship/Grievance Committee of Directors number ofmeetings held of each Committee during the financial year 2016-17 and meetings attended byeach member of the Committee as required under the Companies Act 2013 are provided inCorporate Governance Report and forming part of the report.
AUDITORS a) Statutory Auditors
In compliance with the Companies (Audit and Auditors) Rules 2014 the Members at the29th Annual General Meeting of the Company held on September 30 2016 appointed M/s. B.Chordia & Co. Chartered Accountants (ICAI Registration No.: 0121083W) as StatutoryAuditors of the Company to hold the office until the conclusion of the next
Annual General Meeting of the Company. Members are requested to re-appoint them at theAnnual General Meeting.
b) Secretarial Auditors
M/s. Dhiren R. Dave Practising Company Secretaries (CP No. 2496 Membership No. 4889)were appointed as Secretarial Auditor to conduct secretarial audit of the company for thefinancial year 2016-17. The Secretarial Audit Report for the financial year ended 31 March2017 is annexed herewith and forms part of the Annual Report as Annexure-1
The Board has re-appointed Dhiren R. Dave Practising Company Secretaries asSecretarial Auditors of the Company for the financial year 2017-18.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with the Stock Exchanges the Management Discussion and Analysis Reportfor the FY 2016-17 duly reviewed by Audit Committee and approved by Board forms part ofthis Report.
PERSONNEL AND RELATD DISCLOSURES
The Board of Directors wishes to express their appreciation to all the employees fortheir outstanding contribution to the operations of the company. Pursuant to theprovisions of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 no employee is drawing remuneration in excess of the prescribed limits. Your companyalso appreciates that revenue and profit growth cannot take place without the rightequality of people. To that effect your company has undertaken a series of measures thatensures that the most appropriate people are recruited in to the organization.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in Annexure-2 forming part of theAnnual Report.
INTERNAL CONTROL SYSTEM
Your Company has a well established Internal Control system to ensure an effectiveinternal control environment that provides assurance on the efficiency of conductingbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures. TheInternal Auditor certifies on the assurance of adequacy of Internal Control System onquarterly basis which are regularly reviewed by the Audit Committee. Independence of theaudit is ensured by the direct reporting of internal audit function to the Audit Committeeof the Board.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is an integral part of the Company's ethos and policyand it has been pursuing on a sustained basis.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the companyand the initiatives undertaken by the company on CSR activities during the year are setout in Annexure of this Report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. (Annexure -3). The Policy is available on thewebsite of the Company.
The Company continued to maintain harmonious and cordial relations with its workers inall its businesses during the year under report. Your company firmly believes that adedicated work force constitute the primary source of sustainable competitive advantage.
Risk Management is the systematic process of understanding measuring controlling andcommunicating organization's risk exposures while achieving its objectives. The company'srisk management policy stems from a philosophy of pursuing sustainable growth and creatingeconomic value while calibrating and mitigating risks. The Board of Directors regularlyreview risks and threats and takes suitable steps to safeguard its interest and that thereis no element of risk identified that may threaten the existence of the Company. The focusshifts from one area to another area depending upon the prevailing situation. The RiskManagement Policy has been reviewed and found adequate to the requirements of the Companyby independent firms of Chartered Accountants and approved by the Board. A detailed reporton significant risks and mitigation is forming part of Management's Discussion andAnalysis.
All the properties of the Company including buildings plant and machineries and stockshave been adequately insured.
EMPLOYEE STOCK OPTION
The company has not issued any Employee Stock Option.
ENERGY TECHNOLOGY AND FOREIGN EXCHANGE
Information in accordance with the provisions of Section 134 (3) (m) of the CompaniesAct 2013 regarding conservation of energy technology absorption and foreign exchangeearnings and outgo is given in the Annexure-4 forming part of this report.
CONTRACTS AND ARRANGEMENT WITH RELATED PARTY
All contracts/ arrangements/ transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. Such transactions form part of the notes to the financial statements provided inthis Annual Report.
The Board has formulated a Related Party Transactions Policy for the purpose ofidentification and monitoring of such transactions.
Particulars of contracts or arrangements made with related parties referred to inSection 188(1) of the Companies Act 2013 in the prescribed form AOC-2 is appended as
Annexure-5 to the Board's report.
Your Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The Report on CorporateGovernance as stipulated under Regulation 27(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms integral part of this Annual Report.
i) The Company has complied with all the mandatory provisions of Regulation 27(2) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 relating to theCorporate Governance.
ii) Pursuant to Regulation 27(2) and 34(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with Stock-Exchanges Corporate Governance Report andAuditors Certificate regarding compliance of conditions of Corporate Governance and aManagement Discussion and Analysis Statement as stipulated under Regulation 34(3) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 forms integral part ofthis Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12of the Companies (Management and administration) Rules 2014 in prescribed Form MGT-9 (Annexure-6)is forming part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) The directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern basis; and
(e) The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CODE OF CONDUCT
As prescribed under the provisions of Section 149 of the Companies Act 2013 read withSchedule IV thereto and Regulation 26 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 for its Board of Directors and Senior management andemployees the Company has formulated a comprehensive Code of Conduct (the Code). The Codeis applicable to Directors and Senior management and employees to such extent as may beapplicable to them depending upon their roles and responsibilities. The Code givesguidance and support needed for ethical conduct of business and compliance of law. TheCode reflects the values of the Company viz. Customer Value Integrity one team andExcellence.
A copy of the Code has been uploaded on the Company's website www.betexindia.com. TheCode has been circulated to all the Directors and Management Personnel and its complianceis affirmed by them annually.
A declaration signed by the Company's Managing Director for the compliance of thisrequirement is published in this Report.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
Pursuant to Section 149(6) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in the aforesaid section.
WHISTLE BLOWER MECHANISM
In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behaviour the Company has adopted a Vigilmechanism/Whistle Blower Policy. This policy is explained in Corporate Governance Reportand also uploaded on the website of the company i.e. www.betexindia.com
DISCLOSURE RELATED TO BOARD COMMITTEES AND POLICIES
A) BOARD MEETINGS:
The Board of Directors met 11 times during the financial year ended 31stMarch 2017 in accordance with the provisions of the Companies Act 2013 and rules madethere under. The details thereof are given in the Corporate Governance Report forming partof the Annual report.
B) COMMITTEE MEETINGS:
The Audit Committee of the Board comprises of Mr. Mangilal Lahoti (Chairman) Mrs.Deepa Dinesh Agarwal Member and Mr. Mahesh Kumar Somani Member.
All recommendations made by the Audit Committee were accepted by the Board during theyear 2016-17. The brief details of the Audit Committee are given in Corporate GovernanceReport forming part of the Annual report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board comprises of Mr. Mangilal Lahoti(Chairman) Mr. Mahesh Kumar Somani Member and Mrs. Deepa Dinesh Agarwal Member.
The Nomination and Remuneration Committee and this Policy shall be in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andRegulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015(as may be amended from time to time). Emphasis is given to persons from diverse fields orprofessionals.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee review and ensures redressal of investor grievances. The StakeholdersRelationship Committee of the Board comprises of Mr. Mahesh Kumar Somani (Chairman
) Mr. Ritesh Somani Member Mr. Mangilal Lahoti Member and Mrs. Deepa DineshAgarwal Member.
The brief details of the Stakeholders Relationship Committee are given in CorporateGovernance Report forming part of the Annual report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has laid down the Company's policy on Corporate Social Responsibility (CSR)and the CSR activities of the company are carried out as per the instructions of theCommittee.
The CSR committee of the Board comprises of Mr. Mahesh Kumar Somani Chairman Mr.Ritesh Kumar Somani Member and Mr. Mangilal Lahoti Member.
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has in place Prevention of Sexual Harassment Policy in line with therequirements of The Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act; 2013. All employees (permanent contractual temporary trainees) arecovered under this policy
Your Directors state that during the year under review there were no cases filedpursuant to The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
Nomination & Remuneration Policy
The Nomination and Remuneration Committee and this Policy shall be in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andRegulation 19 SEBI (Listing Obligations and Disclosure Requirement (as may be amended fromtime to time). Emphasis is given to persons from diverse fields or professionals.
a) Ability to contribute and monitor our corporate governance practices.
b) Ability to contribute by introducing international practices to addresstop-management issues.
c) Active participation in long-term strategic planning.
d) Commitment to the fulfilment of a director's obligations and fiduciaryresponsibilities.
The Nomination and remuneration Committee has framed the "NOMINATION &REMUNERATION AND EVALUATION POLICY "Annexure 7(i) and "POLICY ON BOARD
DIVERSITY (Annexure - 7(ii)" forming part of the Annual Report.
KEY MANAGERIAL PERSON
Mr. Manish Kumar Somani the Executive Director and Chief Financial Officer Raj KumarSomani Managing Director and Miss Khushboo Vaishnav the Company Secretary and Complianceofficer of the Company are the Key Managerial Personnel of the company.
Your Directors would like to express their grateful appreciation for the assistance andcooperation received from the Financial Institutions Banks Government Authorities andShareholders during the year under review. Your Directors wish to place on record theirdeep sense of appreciation for devoted services of the Executives Staff and workers ofthe Company for its success.
| ||On behalf of the Board of Directors |
| ||Sd/- |
|Place : Surat ||Mahesh Kumar Somani |
|Dated : 03.08.2017 ||Chairman |
ANNEXURE TO DIRECTORS' REPORT
FORM AOC 1
The information required under Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014for the year ended 31st March2017 are given below:
1. The ratio of the remuneration of each director to the median remuneration ofthe employees of the Company for the financial year ended March 2017: -
|Name of the Director / KMP & Designation ||Remuneration (Rs in Lacs) ||% increase in Remuneration in F.Y. 2016- 17 ||Ratio to median remuneration ||Comparison of the Remuneration of the KMP against the performance of the company |
|Shri Raj Kumar Somani Director ||3.00 ||- ||1.60 ||The Profit before tax marginally decreased by 5.98% but Profit after tax (PAT) increased by of 6.93% as compared to last year. |
|Shri Ritesh Kumar Somani Executive Director ||3.00 ||- ||1.60 || |
|Miss Khushboo Vaishnav ||1.44 ||- ||0.80 || |
The Non-Executive Independent Directors of the Company are entitled for sitting feesand reimbursement of expenses as per the statutory provisions and are within theprescribed limits.
2. Percentage increase in the median remuneration of employees in the financial year: 8.5%
3. Number of permanent employees on the rolls of Company as on 31stMarch. 2017: 460
4) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstance for increase in managerial remuneration :
Average Percentile increase in Remuneration of employees other than ManagerialPersonnel was 9.5% and average increase in remuneration of Managerial Personnel was Nil.
Average increase in remuneration of both managerial and non-managerial personnel weredetermined based on the overall performance of the Company.
5) Key parameters for any variable component of remuneration availed by the Directors:
Key result areas of the managerial personnel are broadly to achieve Company's growthand performance target achieving the same against various adverse externalities globallydevising sustenance strategy to combat global forces like competition exchange rate etcwhich in turn enhance shareholders' value. Remuneration of the managerial personnel isbased on the Remuneration Policy as recommended by the Nomination & RemunerationCommittee and approved by the Board of Directors.
6) Affirmation that the remuneration is as per Remuneration policy:
The Company affirms that the remuneration paid is as per the Remuneration policy of theCompany
7) Pursuant to the provisions of the Companies (Appointment & Remuneration ofManagerial Personnel) rules 2014 no employee is drawing remuneration in excess of theprescribed limits.
PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OFBOARD OF DIRECTORS) RULES 1988
A. Conservation of Energy :
Energy conservation is a high priority area for the Company. Our continued effort toreduce and optimize the use of energy consumption has shown positive results. The companycontinuously pursues the process of energy conservation through improved operational andmaintenance practices.
a) Energy Conservation measures taken by the company
1) Automated Load management system to improve power factor with reduced cost effectdemand
2) Energy efficient motors installed in place of old motors
3) Increasing awareness of energy saving within the organisation to avoid wastage ofenergy.
b) Additional Investments and proposals if any being implemented for reduction ofconsumption of energy
1) Modification and improvement in process system of printing on fabrics.
2) Optimization in Load Factor.
c) Impact of measures at (a) & (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods
1) Reduction in wastage and energy / power consumption per unit of Yarn
2) Reduction in Cost.
d) Total energy consumption and energy consumption per unit of production as perprescribed Form - A given hereunder FORM A
A. Power and Fuel Consumption:
|Electricity ||2016-17 ||2015-16 |
|a) Purchased || || |
|-Units ||14048748 ||14319196 |
|-Total Amount ||95669242 ||106865308 |
|-Rate/Unit (Rs.) ||6.81 ||7.46 |
(Forms for disclosure of particulars with respect to Technology Absorption)
I. Research and Development (R&D)
1. Specific areas in which R & D carried out by the company a) Modification indyeing and printing machineries b) Printing machines of new product concept will beinstalled. c) Addition of New Chamber in Centre Machine proposed
2. Benefit derived as a result of the above R & D
a) Reduction in wastage and energy / power consumption per unit of yarn. b) Reductionin operating & maintenance cost thereby increase in margins.
3. Expenditure on R & D / product development
Capital and recurring expenditure is incurred by the company regularly.
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
This Form pertain to the Disclosure of particulars of contracts/arrangements enteredinto by the company with related parties referred to in sub-section (1) of section 188 ofthe
Companies Act 2013 including certain arm's length transactions under third provisothereto
1. Details of contracts or arrangements or transactions not at arm's length basis NIL
There were no contracts or arrangements or transactions entered in to during the yearended March 31 2016 which were not at arm's length basis.
2. Details of material contracts or arrangement or transactions at arm's length basis
|Name(s) of the Related party ||Nature of Relationship ||Nature of Contract ||Duration of Contract ||Date of Board Meeting Approval ||Amount (Rs.) |
|Aruna Somani ||Wife of Ritesh Somani ||Salary ||One Year ||30.05.2017 ||1020000 |
|Rasmi Somani ||Wife of Manish Somani ||Salary ||One Year ||30.05.2017 ||1550000 |
|Suman Devi Somani ||Wife of Raj Kumar Somani & Mother of Ritesh Somani ||Salary ||One Year ||30.05.2017 ||1020000 |
|Amrita Somani ||Wife of Rakesh Somani ||Salary ||One Year ||30.05.2017 ||1020000 |
|Sharda Devi Somani ||Wife of Mahesh Somani & Mother of Manish Somani ||Salary ||One Year ||30.05.2017 ||2350000 |
| ||On behalf of the Board of Directors |
| ||Sd/- |
|Place : Surat ||Mahesh Kumar Somani |
|Dated : 03.08.2017 ||Chairman |
NOMINATION & REMUNERATION AND EVALUATION POLICY (Framed under Section 178(3) ofCompanies Act 2013 & Regulation 19(4) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015
This Nomination Remuneration and Evaluation Policy (the "Policy") applies tothe Board of Directors (the "Board") Key Managerial Personnel (the"KMP") and the Senior Management Personnel of Betex India Limited (the"Company").
"Key Managerial Personnel (KMP) means:
(i) Chairman & Managing Director; (ii) Company Secretary (iii) Whole-timeDirector; (iv) Chief Financial Officer; and
(v) Such other Officer as may be prescribed.
The term "Senior Management Personnel" means to include all members otherthan the Directors and KMPs of the Company who are the functional heads of thedepartments/divisions/branches of the Company. This Policy is in compliance with Section178 of the Companies Act 2013 read along with the applicable rules thereto and Regulation19(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015
1.1 Sub-section (3) of Section 178 of the Companies Act 2013 states that theNomination and Remuneration Committee shall formulate the criteria for determiningqualifications positive attributes and independence of a director and recommend to theBoard a policy relating to the remuneration for the directors key managerial personneland other employees. 1.2 Section 178 of the Companies Act 2013 has been made effectivefrom April 1 2014 by the Central Government by notification no. S.O. 902(E) issued onMarch 26 2014. Therefore this Nomination and Remuneration Policy ("the Policy")has been framed in compliance with the provisions of the Act and Rules made under the Act.1.3 The Policy provides a framework for remuneration to the members of the Board ofDirectors ("Board") Key Managerial Personnel ("KMP") and the SeniorManagement Personnel ("SMP") of the Company (collectively referred to as "Executives").
The expression senior management'' means employees of Company who aremembers of its core management team excluding directors comprising all members ofmanagement one level below the executive directors including the functional heads. 1.4The existing Remuneration Committee of the Board of Directors has been re-named asNomination and Remuneration Committee ("the Committee or NRC") so as to complywith the provisions of Section 178(1) of the Act. The Members of the Committee shall beappointed by the Board and shall comprise three or more non-executive directors out ofwhich not less than one-half shall be independent directors. Any fraction in the one-halfshall be rounded off to one. 1.5 This Policy will be called "BIL Nomination &Remuneration Policy" and referred to as "the Policy".
1.6 The Policy will be reviewed at such intervals as the Nomination and RemunerationCommittee will deem fit.
2.1 The objectives of the Policy are as follows:
2.2 To set criteria for determining qualifications positive attributes andindependence of a director and remuneration of the Executives. 2.3 To enable the Companyto attract retain and motivate highly qualified members for the Board and other executivelevel to run the Company successfully. 2.4 To enable the Company to provide awell-balanced and performance-related compensation package taking into accountshareholder interests industry standards and relevant Indian corporate regulations. 2.5To ensure that the interests of Board members & senior executives are aligned with thebusiness strategy and risk tolerance objectives values and long-term interests of thecompany and will be consistent with the "pay-for performance" principle. 2.6 Toensure that remuneration to directors KMP and senior management employees of the Companyinvolves a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working of the Company and its goals.
3.1 The Board is ultimately responsible for the appointment of Directors and KeyManagerial Personnel. 3.2 The Board has delegated responsibility for assessing andselecting the candidates for the role of Directors Key Managerial Personnel and theSenior Management of the Company to the Nomination and Remuneration Committee which makesrecommendations & nominations to the Board.
4. PRINCIPLES OF REMUNERATION
4.1 Support for Strategic Objectives: Remuneration and reward frameworks and decisionsshall be developed in a manner that is consistent with and supports and reinforces theachievement of the Company's vision and strategy.
4.2 Transparency: The process of remuneration management shall be transparentconducted in good faith and in accordance with appropriate levels of confidentiality. 4.3Internal equity: The Company shall remunerate the Executives in terms of their roleswithin the organisation. Positions shall be formally evaluated to determine their relativeweight in relation to other positions within the Company. 4.4 External equity: The Companystrives to pay an equitable remuneration capable of attracting and retaining high qualitypersonnel. Therefore the Company will remain logically mindful of the ongoing need toattract and retain high quality people and the influence of external remunerationpressures. Reference to external market norms will be made using appropriate marketsources including relevant and comparative survey data as determined to have meaning tothe Company's remuneration practices at that time. 4.5 Flexibility: Remuneration andreward shall be sufficiently flexible to meet both the needs of individuals and those ofthe Company whilst complying with relevant tax and other laws. 4.6 Performance-DrivenRemuneration: The Company shall establish a culture of performance-driven remunerationthrough the implementation of the Performance Incentive System. 4.7 Affordability andSustainability: The Company shall ensure that remuneration is affordable on a sustainablebasis.
5. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee is responsible for:
5.1 reviewing the structure size and composition (including the skills knowledge andexperience) of the Board at least annually and making recommendations on any proposedchanges to the
Board to complement the Company's corporate strategy with the objective to diversifythe Board; 5.2 identifying individuals suitably qualified to be appointed as the KMPs orin the senior management of the Company; 5.3 recommending to the Board on the selection ofindividuals nominated for directorship; 5.4 making recommendations to the Board on theremuneration payable to the Directors/ KMPs/Senior Officials so appointed/reappointed; 5.5assessing the independence of independent directors; 5.6 such other key issues/matters asmay be referred by the Board or as may be necessary in view SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and provision of the Companies Act 2013 andRules there under. 5.7 To make recommendations to the Board concerning any mattersrelating to the continuation in office of any Director at any time including thesuspension or termination of service of an Executive Director as an employee of theCompany subject to the provision of the law and their service contract; 5.8 ensure thatlevel and composition of remuneration is reasonable and sufficient relationship ofremuneration to performance is clear and meets appropriate performance benchmarks; 5.9 Todevise a policy on Board diversity; 5.10 To develop a succession plan for the Board and toregularly review the plan;
The Nomination and Remuneration Committee comprises of the following: a) TheCommittee shall consist of minimum three members out of that there will be minimum twonon-executive directors and majority of them being independent. b) Minimum two (2) membersshall constitute a quorum for the Committee meeting. c) Membership of the Committee shallbe disclosed in the Annual Report. d) Term of the Committee shall be continued unlessterminated by the Board of Directors.
a) Chairman of the Committee shall be an Independent Director. b) In the absence of theChairman the members of the Committee present at the meeting shall choose one amongstthem to act as Chairman. c) Chairman of the Nomination and Remuneration Committee meetingcould be present at the
Annual General Meeting or may nominate some other member to answer the shareholders'queries.
COMMITTEE MEMBERS' INTERESTS a) A member of the Committee is not entitled to bepresent when his or her own remuneration is discussed at a meeting or when his or herperformance is being evaluated. b) The Committee may invite such executives as itconsiders appropriate to be present at the meetings of the Committee.
VOTING a) Matters arising for determination at Committee meetings shall be decidedby a majority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee. b) In the case of equality of votes theChairman of the meeting will have a casting vote.
The Committee shall: i) review the ongoing appropriateness and relevance of thePolicy; ii) Ensure that all provisions regarding disclosure of remuneration includingpensions leave encashment gratuity etc. are fulfilled; iii) Obtain reliable up-to-dateinformation about remuneration in other companies; v) Ensure that no director or executiveis involved in any decisions as to their own remuneration.
6. PROCEDURE FOR SELECTION AND APPOINTMENT OF THE BOARD MEMBERS Boardmembership criteria
6.1 The Committee along with the Board shall review on an annual basis appropriateskills characteristics and experience required of a Board Member. The objective is tohave a Board with diverse background and experience in business government academicstechnology and in areas that are relevant for the Company's global operations. 6.2 Inevaluating the suitability of individual Board members the Committee shall take intoaccount many factors including general understanding of the Company's business dynamicsglobal business and social perspective educational and professional background andpersonal achievements. Directors must possess experience at policy-making and operationallevels in large organizations with significant international activities that will indicatetheir ability to make meaningful contributions to the Board's discussion anddecision-making in the array of complex issues facing the Company. 6.3 Director shouldpossess the highest personal and professional ethics integrity and values.
They should be able to balance the legitimate interest and concerns of all theCompany's stakeholders in arriving at decisions rather than advancing the interests of aparticular constituency
7. PROCEDURE FOR SELECTION AND NOMINATION OF KMP AND SMPS
The Chairman of the Company and the Chairperson of the NRC shall along with CompanySecretary identify and appoint suitable candidates for appointing them as KMPs (excludingExecutive Directors) or SMPs of the Company on the basis of their academic professionalqualifications relevant work experience skill and other capabilities suitable to theposition of concerning KMP or SMP. Further in case of KMP (excluding Executive Director)appointment approval of the Board of Directors/concerned Committee shall be taken inaccordance with provisions of relevant Act statutes regulations etc. Existing as on thatdate. The appointment and/or removal of KMPs shall be placed before the NRC and / or Boardof Directors at regular intervals.
8. REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT Theguiding principle is that the level and composition of remuneration shall be reasonableand sufficient to attract retain and motivate Directors Key Management Personnel andother senior officials.
The Directors Key Management Personnel and other senior official's salary shall bebased "& determined on the individual person's responsibilities and performanceand in accordance with the limits as prescribed statutorily if any. The Nominations &Remuneration Committee determines individual remuneration packages for Directors KMPs andSenior Officials of the Company taking into account factors it deems relevant includingbut not limited to market business performance and practices in comparable companieshaving due regard to financial and commercial health of the Company as well as prevailinglaws and government/other guidelines. The Committee consults with the Chairman of theBoard as it deems appropriate. Remuneration of the Chairman is recommended by theCommittee to the Board of the Company.
a) Base Compensation (fixed salaries)
Must be competitive and reflective of the individual's role responsibility andexperience in relation to performance of day-to-day activities usually reviewed on anannual basis; (includes salary allowances and other statutory/non-statutory benefitswhich are normal part of remuneration package in line with market practices).
b) Variable salary:
The NRC may in its discretion structure any portion of remuneration to link rewards tocorporate and individual performance fulfilment of specified improvement targets or theattainment of certain financial or other objectives set by the Board. The amount payableis determined by the Committee based on performance against pre-determined financial andnon-financial metrics.
(ii) STATUTORY REQUIREMENTS:
Section 197(5) provides for remuneration by way of a fee to a director forattending meetings of the Board of Directors and Committee meetings or for any otherpurpose as may be decided by the Board.
Section 197(1) of the Companies Act 2013 provides for the total managerialremuneration payable by the Company to its directors including managing director andwhole time director and its manager in respect of any financial year shall not exceedeleven percent of the net profits of the Company computed in the manner laid down inSection 198 in the manner as prescribed under the Act.
The Company with the approval of the Shareholders and Central Government mayauthorise the payment of remuneration exceeding eleven percent of the net profits of thecompany subject to the provisions of Schedule V.
The Company may with the approval of the shareholders authorise the payment ofremuneration up to five percent of the net profits of the Company to its anyone ManagingDirector/Whole Time Director/Manager and ten percent in case of more than one suchofficial.
The Company may pay remuneration to its directors other than Managing Directorand Whole Time Director up to one percent of the net profits of the Company if there is amanaging director or whole time director or manager and three percent of the net profitsin any other case.
The net profits for the purpose of the above remuneration shall be computed inthe manner referred to in Section 198 of the Companies Act 2013. 8.1 The IndependentDirectors shall not be entitled to any stock option and may receive remuneration by way offee for attending meetings of the Board or Committee thereof or for any other purpose asmay be decided by the Board and profit related commission as may be approved by themembers. The sitting fee to the Independent Directors shall not be less than the sittingfee payable to other directors. 8.2 The remuneration payable to the Directors shall be asper the Company's policy and shall be valued as per the Income Tax Rules. 8.3 Theremuneration payable to the Key Managerial Personnel and the Senior Management shall be asmay be decided by the Board having regard to their experience leadership abilitiesinitiative taking abilities and knowledge base.
9. EVALUATION/ASSESSMENT OF DIRECTORS/KMPS/SENIOR OFFICIALS OF THE COMPANY
The evaluation/assessment of the Directors KMPs and the senior officials of theCompany is to be conducted on an annual basis and to satisfy the requirements of ListingObligations and Disclosure Requirements Regulations 2015. The following criteria mayassist in determining how effective the performances of the Directors/KMPs/Seniorofficials have been:
Leadership & stewardship abilities
Contributing to clearly define corporate objectives & plans
Communication of expectations & concerns clearly with subordinates
Obtain adequate relevant & timely information from external sources.
review & approval achievement of strategic and operational plansobjectives budgets
regular monitoring of corporate results against projections
identify monitor & mitigate significant corporate risks
assess policies structures & procedures
direct monitor & evaluate KMPs senior officials
review management's succession plan
assuring appropriate board size composition independence structure
clearly defining roles & monitoring activities of committees
review of corporation's ethical conduct
Evaluation on the aforesaid parameters will be conducted by the Independent Directorsfor each of the Executive/Non-Independent Directors in a separate meeting of theIndependent Directors. The Executive Director/Non-Independent Directors along with theIndependent Directors will evaluate/assess each of the Independent Directors on theaforesaid parameters. Only the Independent Director being evaluated will not participatein the said evaluation discussion.
10. APPROVAL AND PUBLICATION
10.1 This Policy as framed by the Committee shall be recommended to the Board ofDirectors for its approval. 10.2 The Policy shall form part of Director's Report asrequired under Section 178(4) of theCompanies Act 2013.
11. SUPPLEMENTARY PROVISIONS
11.1 This Policy shall formally be implemented from the date on which it is adopted bythe Board of Directors. 11.2 Any matters not provided for in this Policy shall be handledin accordance with relevant laws and regulations the Company's Articles of Association.
11.3 The right to interpret this Policy vests in the Board of Directors of the Company
BOARD DIVERSITY POLICY
(Pursuant to Regulation 19(4) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which have came into effect from 1st December 2015)
This policy was originally framed pursuant to Clause 49 of the Listing agreement and isamended pursuant to Regulation 19(4) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which have come into effect from 1st December 2015.
The Board Diversity Policy (the Policy') sets out the approach to have diversityon the Board of Directors (Board') of Betex India Limited (the "company").
SCOPE OF APPLICATION
The Policy applies to the Board.
The Company recognizes and embraces the benefits of having a diverse Board thatpossesses a balance of skills experience expertise and diversity of perspectiveappropriate to the requirements of the businesses of the Company. The Company seesincreasing diversity at Board level as an essential element in maintaining a competitiveadvantage. A truly diverse Board will include and make good use of differences in theskills regional and industry experience background race gender and other distinctionsbetween directors. The differences will be considered in determining the optimumcomposition of Board and when possible should be balanced appropriately.
The Company maintains that Board appointments should be based on merits thatcomplements and expands the skills experience and expertise of the Board as a wholetaking into account knowledge professional experience and qualifications gender agecultural and educational background and any other factors that the board might considerrelevant and applicable from time to time for it to function effectively.
These diversities will be considered in determining the optimum composition of theBoard and when and wherever possible should be balanced appropriately. All Boardappointments are made on merit in the context of the skills experience independence andknowledge which the Board as a whole requires to be effective.
in the process of attaining a diverse Board based on the aforementioned criteria thefollowing criteria needs to be assessed:
ANNUAL REPORT 2016-17
(a) The Board shall have an optimum combination of executives and non- executivedirectors and not less than fifty per cent of the Board of directors comprising non-executive directors.
(b) At least half of the Board should comprise of independent directors (where thechairman of the Board is executive or promoter) or at least one-third of the Boardconsisting of independent directors (where the chairman of the Board is non-executive).
In any case the Company should strive to ensure that the number of independentdirectors do not fall below 3(three) so as to enable the board to function smoothly andeffectively.
(c) The Company shall have at least one women director on the Board to ensure thatthere is no gender inequality on the Board.
ROLE OF NOMINATION AND REMUNERATION COMMITTEE
The Nomination & Remuneration Committee (Committee') reviews and assessesBoard composition on behalf of the Board and recommends the appointment of new Directorsalso considering the provisions of Companies Act 2013 and rules framed there under. TheCommittee also oversees the conduct of the annual review of Board effectiveness.
In reviewing Board composition the Committee will consider the benefits of all aspectsof diversity including but not limited to those described above in order to enable itto discharge its duties and responsibilities effectively.
In identifying suitable candidates for appointment to the Board the Committee willconsider candidates on merit against objective criteria and with due regard for thebenefits of diversity on the Board.
REVIEW OF THE POLICY
The Committee will review the policy from time to time keeping in view the statutoryrequirement and need of the organization and recommend the same to the Board for theirapproval.