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GO retains the sole right to change, revise, modify, add or delete contents of this website, in whole or in part at any time without notice.1. Short Title & Applicability:
This policy, which is framed to encourage open and frank evaluations of performance of Directors of Gokul Agri International Limited (GAIL), lays down the guidelines and mechanism for undertaking programmes of evaluation, and it is titled as the “Directors’ Performance Evaluation Policy”.2. Background and Introduction:
• The directors, employees and committees of the GAIL should have the appropriate balance of skills, experience, independence and knowledge to enable them to discharge their respective duties and responsibilities effectively.
• The search for directors should be conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the board, including gender.
• The board of the GAIL should satisfy themselves that plans are in place for orderly succession for appointments to the board so as to maintain an appropriate balance of skills, experience and to ensure progressive refreshing of the board.3. Need for Performance Evaluation:
The recent failures of Corporate throughout the world have led the investors, regulators and general public at large to question the effective functioning of the Board of any Company. The investors have started questioning the collective decision making competency in terms of quality, skills and even the individual capabilities and capacities of individual directors who hold the position in any Company. The Challenge for Board is to prevent Crisis in the Company they govern. Performance evaluation is a key means by which boards can recognize and correct corporate governance problem and add real value to the Company.4. Benefits of Performance Evaluation:
The benefits of an evaluation to the Board are numerous. If conducted properly, evaluation can contribute significantly to performance improvements on three levels – the Company, Board and individual Director Level. Boards who commit to a regular evaluation process find benefits across these levels in terms of improved leadership, greater clarity of roles and responsibilities, improved teamwork, greater accountability, better decision making, improved communication and more efficient board operations.5. Regulatory Changes:
The regulators throughout the world vigorously brought stringent regulations in Corporate Governance and emphasized the need for the induction of new directors who could focus more attention and also advocated the training of directors and their professional development of directors for both who are already in the service of the boards and new entrants. It was felt necessary that the director’s needs to have their training towards their professional development and continuously improve upon their skills and knowledge needed to carry out their role more effectively in a sustainable basis in creating wealth to all the stakeholders of the company.
Worldwide there is also an ongoing increased recognition for the need of a well-organized, open and supportive board culture leading to the high quality of timely information to the stakeholders of the company in terms of transparent disclosures. To achieve this, the individual directors have to make an effective contribution by their effective functioning to the leadership of the company in which they serve.
There is also emphasis on the director’s responsibilities at the same time and the directors themselves should undertake a formal and regular objective based evaluation of their own performance in terms of strategies, monitoring control, statutory compliance and corporate governance and as well on the obligation of the whole board to re evaluate the mix of skill and experience.6. Performance evaluation of Directors:
Executive Directors of the Company are involved in day to day operations of the Company. Their performance can be accessed on the basis of their commitment to achieve Company’s goals, their decision making ability and how much they have safe guarded the interest of shareholders of the Company.
With reference to the evaluation mechanism of Non – Executive Directors, since the Non – Executive Directors are not involved in day to day operations of the Company; it is worthwhile to assess individual’s continuing commitment to the role, in terms of commitment of time for Board and other Committee meeting and other duties towards Company.7. Methodology of Carrying Performance Evaluation of Directors:
The board, through its Nomination and Remuneration Committee or similar other committee of members of Board, as may be formed from time to time, will regularly review and evaluate the performance of Individual Directors, considering their commitment and their involvement towards the Company’s goal, to ensure that the members of the Board are with required mix of skills, experience and other qualities such as its demographics and diversity.
The evaluations as mentioned above should be conducted at least annually or at the time of appointment of any new directors into the Board or at the time when it was requested by any one or more of the Directors.
In case of need, the Committee can also take feedback or ask questions to such directors or employees as they may deem fit.8. Reporting to the Board:
The report on the evaluation process undertaken by the Nomination and Remuneration Committee shall be placed before the Board of Directors and it shall be approved by the Board of Directors.9. Disclosure through Annual Report:
The Board should make sure to convey the information of evaluation of Directors to the shareholders by way of disclosure in the Annual Report and through its website. The provision of Section 134(3) and section 178(4) of the Companies Act 2013 enforced with effect from 1.04.2013 make it mandatory for Company to include in its Directors report.10. General:
• In case of any doubt with regard to any provision of the policy and also in respect of matters not covered herein, a reference to be made to Managing Director.
• Any or all provisions of this Directors’ Performance Evaluation Policy would be subject to revision/ amendment in accordance with the guidelines on the subject as may be issued from Government from time to time.
• The Board of Directors of the Company reserves the right to review the policy from time to time based on changing needs and aspirations of the target beneficiaries and make suitable modifications, as may be necessary.
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.
1. Criteria of selection of Non Executive Directors
a. The Non Executive Directors shall be of high integrity 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-à-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. Qualification, expertise and experience of the Directors in their respective fields;
ii. Personal, Professional or business standing;
iii. Diversity of the Board.
e. In case of re-appointment of Non Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.2. Remuneration
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 here under:
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. The N&R Committee may recommend to the Board, the payment of commission on uniform basis, to reinforce the principles of collective responsibility of the Board.
iv. The N&R Committee may recommend a higher commission for the Chairman of the Board of Directors, taking into consideration his overall responsibility;
v. 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.
vi. The N&R Committee may recommend to the Board, for the payment of additional commission to those Directors who are Members on the Audit Committee of the Board subject to a ceiling on the total commission payable as may be decided;
vii. In addition to the remuneration paid under Clause (ii) and (vi) above, the Chairman of the Audit Committee shall be paid an additional commission, as may be recommended to the Board by the N&R Committee;
viii. The total commission payable to the Directors shall not exceed 1% of the net profit of the Company;
ix. The commission shall be payable on prorata basis to those Directors who occupy office for part of the year.
x. The Independent Directors of the Company shall not be entitled to participate in the Stock Option Scheme of the Company, if any, introduced by the Company.
3. Managing Director – Criteria for selection /appointment For the purpose of appointment of the MD, 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
i. At the time of appointment or re-appointment, the Managing 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 within the overall limits prescribed under the Companies Act, 2013.
ii. The remuneration shall be subject to the approval of the Members of the Company in General Meeting.
iii. The remuneration of the Managing Director is broadly divided into fixed and variable components. The fixed component comprises salary, allowances, perquisites, amenities and retiral benefits. The variable component comprises performance bonus.
iv. 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, the industry benchmarks and the current trends;
d. the Company’s performance vis-à-vis the annual budget achievement and individual performance.
Remuneration Policy for the Senior Management Employees
I. In determining the remuneration of the Senior Management Employees (i.e. KMPs and Executive Committee Members) the N&R Committee shall ensure / consider the following:
i. the relationship of remuneration and performance benchmark is clear;
ii. the balance between fixed and incentive pay reflecting short and long term performance objectives, appropriate to the working of the Company and its goals; iii. the remuneration is divided into two components viz. fixed component comprising salaries, perquisites and retirement benefits and a variable component comprising performance bonus;
iv. the remuneration including annual increment and performance bonus is decided based on the criticality of the roles and responsibilities, the Company’s performance vis-à-vis the annual budget achievement, individuals performance vis-à-vis, industry benchmark and current compensation trends in the market.
II. 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, whilst recommending the annual increment and performance incentive to the N&R Committee for its review and approval.
1. TITLE This Policy shall be called ‘Policy on materiality of Related Party Transactions and dealing with Related Party Transactions’.
2. COMMENCEMENT The Policy shall come into effect from 1st October 2014.
3. OBJECTIVE Related Party Transactions have been one of the major areas of focus for the Corporate Governance reforms being initiated by Indian legislature.
The changes introduced in the Corporate Governance norms through the Companies Act, 2013 to have enhanced transparency and due process for approval of the Related Party Transactions.
One such requirement is that the companies are required to formulate a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions.
4. DEFINITIONS “Arm’s length transaction” means a transaction between two Related Parties that is conducted as if they were unrelated, so that there is no conflict of interest. “Audit Committee” means the audit committee constituted by the Board of Directors of the Company in accordance with applicable law, including the Companies Act, 2013. “Board” means the Board of Directors of Gokul Agri International Limited. “Company” means Gokul Agri International Limited. “Material Related Party Transaction” means a transaction with a Related Party where the transaction/transactions to be entered into individually or taken together with previous transactions with a Related Party during a financial year, exceeds ten percent of the consolidated annual turnover of the Company as per the last audited financial statements of the Company. “Policy” means this Policy, as amended from time to time. “Related Party” in relation to the Company means a party related with the Company in any of the ways as are laid down in section 2(76) of the Companies Act, 2013 and amended from time to time. “Related Party Transaction” in relation to the Company means a transaction with a Related Party under the relevant provisions of the Companies Act, 2013 or or any other related law, regulation, standard etc.
5. APPROVAL OF RELATED PARTY TRANSACTIONS Every Related Party Transaction entered into with effect from 1st October 2014 shall be subject to approval of the Audit Committee. The approval of the Audit Committee can be granted by way of a circular resolution. The Board shall approve such Related Party Transactions as are required to be approved under Companies Act, 2013 and/or transactions referred to it by the Audit Committee. Where any director is interested in any Related Party Transaction, such director will abstain from discussion and voting on the subject matter of the resolution relating to such Transaction. Further, all Material Related Party Transactions shall require approval of shareholders of the Company through special resolution and the Related Parties shall abstain from voting on such resolution(s). All Related Party Transactions (other than Material Related Party Transactions) pursuant to section 188 of the Companies Act, 2013 which are not in the ordinary course of business or not an Arms’ length transaction and cross the threshold limits prescribed under Companies Act, 2013 shall also require the approval of shareholders of the Company through special resolution and the Related Parties shall abstain from voting on such resolution(s). The approval mechanism for Related Party Transactions shall be as stipulated in the provisions of Companies Act, 2013 and as amended from time to time.
6. AMENDMENTS The Board shall have the power to amend any of the provisions of this Policy, substitute any of the provisions with a new provision or replace this Policy entirely with a new Policy.
7. INTERPRETATION Any words used in this policy but not defined herein shall have the same meaning ascribed to it in the Companies Act, 2013 or Rules made there under, applicable to the Company. In case of any dispute or difference upon the meaning/interpretation of any word or provision in this Policy, the same shall be referred to the Audit Committee and the decision of the Audit Committee in such a case shall be final. In interpreting such term / provision, the Audit Committee may seek the help of any of the officers of the Company or an outside expert as it deems fit.
Manufactures and exporters of Castor oil and Castor-based derivates,
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