INDIAN RAYON AND INDUSTRIES LIMITED - Aditya Birla Nuvo, Ltd

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CORPORATE GOVERNANCE DISCLOSURES As mentioned earlier, “Your Company” has endeavoured to benchmark itself with the guidelines issued by the Committee on Corporate Governance set up by the Securities and Exchange Board of India (SEBI). Indian Rayon adheres to most of the recommendations made by the SEBI Committee, but for a few areas for which the Company is taking steps to implement the same. Recommendations Complied Already 1. The Board should have an optimum combination of executive and non-executive directors and at least 50% of the Board should comprise of non-executive directors. Further, at least one-third of the Board should comprise of independent directors where the Chairman is nonexecutive and at least half of the Board should be independent in case of an Executive Chairman. The Board consists fully of non-executive and independent directors, with considerable experience in their respective fields. Independent directors account for 50% of the Board at present and they have no business and/or professional relationship with the Company. 2. The Board should set up a committee under the chairmanship of a non-executive / independent director to specifically look into shareholder issues, including share transfers and redressal of shareholder complaints. Indian Rayon has a Share Transfer Committee at the Board level. This comprises of Mr B L Shah, Mr H J Vaidya and Mr D S Dahanukar who are the Non-executive / Independent directors of the Company. The Committee meets at frequent intervals to look after the approval of share transfers and other related matters. 3. To expedite the process of share transfers, the Board should delegate the power of share transfer to an officer or a committee or to the registrar and share transfer agents. The delegated authority should attend to share transfer formalities at least once in a fortnight. The Company’s shares are traded in dematerialised form and have to be delivered in the dematerialised from in all Stock Exchanges. To expedite the transfer in physical segment, authority has been delegated to the Share Transfer Committee. Officers of the Company have also been authorised to approve transfer of upto 5,000 shares/debentures each in physical form under one transfer deed. The Board has also designated Mr Ashok Malu, Company Secretary, as the Compliance Officer. Details of complaints received, number of shares transferred as well as average time taken for effecting these transfers are highlighted in the “Shareholder Information” section of the Annual Report. 4. The Corporate Governance Section of the Annual Report should make disclosures on remuneration paid to Directors in all forms including salary, benefits, bonuses, stock options, pension and other fixed as well as performance linked incentives. Details of remuneration paid to the Directors are highlighted at the beginning of this section. Indian Rayon has a policy of not paying commission on profits to any Director of the Company. 5. The Board meetings should be held at least four times in a year, with a maximum time gap of four months between any two meetings and all information recommended by the SEBI Committee should be placed at the Board. The Board of Indian Rayon met 11 times during the past year. Agenda papers were circulated to the members well in advance of each meeting. The Company places before the Board the working of all the units and all statutory reports from time to time. As regards various items recommended by the SEBI Committee on Corporate Governance the following items are not presented in a structured manner at present. However, necessary steps are being taken to present all items recommended by the SEBI Committee in a structured manner from the current year. · Annual operating plans and budgets and any updates. · Capital budgets and any updates. · Quarterly details of foreign exchange exposures and steps taken by the Company to limit the risk of adverse movements in exchange rate, if material. 6. As a part of disclosures, in addition to the Director’s Report, Management’s Discussion and Analysis report should form part of the annual report to the shareholders. Management’s Discussion and Analysis forms part of the Annual Report. The Company introduced this new section in the Annual Report for the year 1998-99. 20
7. All company related information like quarterly results, presentation made to analysts may be put on the Company’s web-site or may be sent in such a form so as to enable the Stock Exchanges on which the Company is listed to put it on its own web-site. Indian Rayon makes presentation to investors as well as equity analysts following the announcement of quarterly results. A copy of the Press Release and quarterly results announcement are made available on the Company’s web site (www.indianrayon.com) as well as on the <strong>Aditya</strong> <strong>Birla</strong> Group’s website (www.adityabirla.com). 8. There should be a separate section on Corporate Governance in the Annual Report, with details on the level of compliance by the Company. Non-compliance of any mandatory recommendation with reasons thereof and the extent to which the non-mandatory recommendations have been adopted should be specifically highlighted. Indian Rayon has introduced a separate section on Corporate Governance in this year’s Annual Report. 9. No Director should be a member in more than 10 committees or act as Chairman of more than five committees across all companies in which he is a Director. Furthermore it should be a mandatory annual requirement for every Director to inform the Company about the committee positions he occupies in other companies and changes. None of the Director of the Company is a member in more than 10 committees or Chairman of more than 5 committees across all companies in which he is a Director. 10. The Non-Executive Chairman of the Company should be entitled to maintain an office at the Company’s expense and also allowed reimbursement of expenses incurred in performance of his duties. This will enable him to discharge the responsibilities effectively. (This is a non-mandatory recommendation). At present, the Chairman does not have a separate office in the Company. The Corporate Finance Division of the Company supports the Chairman for discharging the responsibilities. Recommendations Under Review 11. A qualified and an independent “Audit Committee” should be set up by the Board of the Company. This would go a long way in enhancing the credibility of the financial disclosures and promoting transparency. Indian Rayon does not have an active Audit Committee at present. The Company is in the process of re-activating the Audit Committee. 12. The Board should set up a “Remuneration Committee” to determine on their behalf and on behalf of the shareholders with agreed terms of reference, the Company’s policy on remuneration packages for Executive Directors, including pension rights and other compensation payments. Indian Rayon does not have any Executive/ Wholetime Director on its Board. Hence Remuneration Committee is not required. 13. Disclosures to be made to the Board by the management relating to all material, financial and commercial transactions, where they have personal interest, that may have a potential conflict with the interest of the company at large. These include dealing in company shares, commercial dealings with bodies, which have shareholding of management and their relatives, etc. No transaction of material nature has been entered into by the Company with the Promoters, Directors or the Management, their subsidiaries or relatives etc., that may have a potential conflict with interests of the Company. 14. While appointing a new director or re-appointing an existing director, the Company should provide a brief resume, expertise in specific functional areas and names of companies, in which the person also holds the directorship and the membership of Committees of the board. These should form part of notice to shareholders. Relevant details forms part of the explanatory statement of the Notice of the Annual General Meeting. 15. The half-yearly declaration of financial performance including summary of the significant events in last six-months, should be sent to each household of shareholders. The Company aims to send update on half-yearly performance to the individual shareholders from 2000-01 onwards. Recommendation not pertaining to the Company 16. The financial institutions should under normal circumstances have no direct role in the decision making of the board of the company. They should normally not have nominees on the board, merely by virtue of their financial exposure by way of investment in the securities of the Company. There is however a ground for the term lending institutions to have nominees on the Boards of the borrower companies, to protect their interests as creditors. In such cases, the nominee directors should take an active interest in the activities of the board and have to assume equal responsibility, as any other director on the board. Not a company level issue. 21
Page 1 and 2: INDIAN RAYON AND INDUSTRIES LIMITED
Page 3 and 4: INDIAN RAYON AND INDUSTRIES LIMITED
Page 5 and 6: Insulators The Insulator sector app
Page 7 and 8: Management’s Discussion and Analy
Page 9 and 10: failed/delayed monsoon in the Saura
Page 11 and 12: The domestic price of carbon black
Page 13 and 14: Leveraging on existing relationship
Page 15 and 16: FINANCIAL REVIEW AND ANALYSIS Highl
Page 17 and 18: Investments The net inflow from liq
Page 19: Director’s Interest in the Compan
Page 23 and 24: Social Report Beyond Business - Rea
Page 25 and 26: Directors’ Report to the Sharehol
Page 27 and 28: Appropriations are made as under: P
Page 29 and 30: PARTICULARS AS PER SECTION 217 OF T
Page 31 and 32: ANNEXURE Form-A Form for disclosure
Page 33 and 34: xv) xvi) xvii) xviii) xix) xx) xxi)
Page 35 and 36: Profit & Loss Account for the year
Page 37 and 38: Schedules SCHEDULE ‘3’ As at 31
Page 39 and 40: Schedules SCHEDULE ‘6’ (Contd.)
Page 41 and 42: Schedules SCHEDULE ‘7’ As at 31
Page 43 and 44: Schedules SCHEDULE ‘12’ 1999-00
Page 45 and 46: Schedules SCHEDULE ‘17’ 1999-00
Page 47 and 48: Schedules SCHEDULE ‘19’ NOTES O
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Page 51 and 52: Schedules ANNEXURE I (Contd.) (b) R
Page 53 and 54: Cash Flow Statement for the year en
Page 55 and 56: DIRECTORS’ REPORT LAXMINARAYAN IN
Page 57 and 58: SCHEDULE-1 As at 31st As at 31st SH
Page 59 and 60: DIRECTORS’ REPORT Dear Shareholde
Page 61 and 62: SCHEDULE-1 As at 31st As at 31st SH
Page 63 and 64: 8. Stock Market Data Bombay Stock E
Page 65 and 66: 15. Categories of Shareholding as o

INDIAN RAYON AND INDUSTRIES LIMITED - Aditya Birla Nuvo, Ltd

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