Our Policies


Policy For Determining Material Subsidiaries

Pursuant to Regulation 16 (1) (c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

1. Definitions

“Company”Modern Threads (India) Limited

“Control”

Shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholder agreements or voting agreements or in any other manner.

“SEBI Listing Regulations”

Means the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and amendments there to

“Material subsidiary”

Is a subsidiary who seincomeornet worth (i.e. paid up share capital and free reserves) exceeds twenty percent (20%) of the consolidated income or net worth, respectively, of the Company and its subsidiaries in the immediately preceding accounting year.

“Material Unlisted Indian Subsidiary”

Is an unlisted subsidiary, incorporated in India, whose income or net worth (i.e. paid up share capital and free reserves) exceeds twenty percent (20%) of the consolidated in camborne worth respectively, of the Company and its Subsidiaries in the immediately preceding accounting year.

“Significant Transaction or Arrangement”

Is any individual transaction or arrangement that exceeds or is likely to exceed ten percent (10%) of the total revenues or total expenses or total assets or total liabilities, as the case may be, of the material unlisted subsidiary for the immediately preceding accounting year.

“Subsidiary”

Shall have the same meaning as defined under the Companies Act, 2013 and the Rules made the reunder. Where a listed holding company has a listed subsidiary which is itself a holding company, the above provisions of the SEBI Listing Regulations shall apply to the listed subsidiary in so far as its subsidiaries are concerned.

Any other term not defined herein, shall have the same meaning ascribed to it, as defined under Companies Act, 2013 and the Rules framed thereunder, the SEBI Listing Regulations, Act, Rules and Regulations framed by the Securities Exchange Board of India or any other relevant legislation / regulation applicable to the Company.

2. Purpose

2.1 The purpose of this Policy is determination of Material Subsidiaries and disclosure thereof, as required under SEBI Listing Regulations (including any amendments thereof).

3. Objective

3.1 The objective of this Policy is to determine :-

  • meaning of ‘Material’ Subsidiary
  • Requirement of Independent Director in certain Material Non Listed Indian Subsidiaries
  • Restriction on disposal of Shares of a Material Subsidiary by the Company
  • Restriction on transfer of Assets of a Material Subsidiary and

4. Independent Director on the Board of a Material Non Listed Indian Subsidiary

4.1 At least one Independent Director on the Board of the Company shall be a director on the Board of a Material Non Listed Indian Subsidiary.

4.2 The Company may also appoint Independent Director(s) on the Board of an overseas subsidiary company, as they may deemnecessary.

5. Significant Transactions / Arrangements of an Unlisted Material Subsidiary

5.1 The management should periodically bring to the attention of the Board of the Company, a Statement of all Significant Transactions and Arrangements entered into by any Unlisted Material Subsidiary Company.

6. Restrictions on Disposal of Shares of a Material Subsidiary

6.1 The Company shall not dispose of shares in its Material Subsidiary, resulting in reduction of its shareholding (either on its own or together with other subsidiaries) to less than fifty percent (50%) or cease the exercise of control over the subsidiary without passing a Special Resolution in its General Meeting, except in such cases where divestment is under a scheme of arrangement, duly approved by a Court / Tribunal

7. Restriction on Transfer of Assets of a Material Subsidiary

7.1 Selling, disposing and leasing of assets, amounting to more than twenty percent (20%) of the assets of a Material Subsidiary on an aggregate basis during a financial year, shall require prior approval of shareholders of the Company by way of Special Resolution, unless the sale / disposal / lease is made under a scheme of arrangement, duly approved by a Court /Tribunal.

8. Disclosures

8.1 As prescribed under Regulation 46 (2) (h) of the SEBI Listing Regulations, this Policy shall be disclosedontheCompany’s website and a web link there to shall be provided in the Annual Report.

9. Review of the Policy

9.1 This Policy shall be subject to review as may be deemed necessary or in accordance with any regulatory amendments, which affects the said policy.

Policy For Determination Of Materiality Of Events

The Board of Directors of Modern Threads (India) Limited (here in after referred to “Company”) have adopted a Policy for determination of materiality of events (here in after referred to as “Policy”).The Policy aims for disclosure of important and material events of the Company to the Stock Exchange where the equity shares are listed, to stakeholders in compliance with the provisions of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (here in after referred to as the“Regulations”).

The Policy end eavours to promote transparency and to ensure that the stakeholders are informed regarding the major and material events of the Company. The Company, in addition to the disclosure of events specified under Para A of Part A of Schedule III of the Regulations, shall also make disclosure of events or information specified under Para B of Part A of Schedule III, which, in the opinion of the Board of Directors of the Company, is material in nature.

Criteria For Determining Materiality Of Events Or Information Relating To Thecompany

The KMP as authorized by the Board of Directors for the purpose of determining the materiality of events and information shall consider the following criteria for determining the materiality of events/information :-

  • The omission of an event or information , which is likely to result in discontinuity or alteration of event or information already available publicly or
  • The omission of an event or information is likely to result in significant market reaction if the said omission came to light at a later date
  • In case where the criteria specified in sub-clauses (a) and (b) are not applicable, an event / information may be treated as being material if in the opinion of the Board of Directors of the Company, the event/information is considered material.

Following Events May Be Considered Material By The Authorized Kmp On The Basiscriteria Specified Above

The Company shall intimate the following events /information upon occurrences in consideration with the criteria for determining materiality of events :-

  1. Commencement or any postponement in the date of commencement of commercial production or commercial operations of anyunit/divisions.
  2. Change in the general character or nature of business brought about by arrangements for strategic, technical, manufacturing, or marketing tie – up, adoption of new lines of business or closure of operations of a unit/division (entirely orpiecemeal).
  3. Capacity addition or product launch.
  4. Awarding, bagging / receiving, amendment or termination  awarded /bagged orders /contracts  not in the normal course of business.
  5. Agreements (viz; loan agreement(s) (as a borrower) or any other agreement(s) or any other agreement(s) which are binding and not in normal course of business) and revision(s) or amendment(s) or termination (s) thereof.
  6. Disruption of operations of any one or more units or division of the listed entity due to natural calamity (earthquake, flood, fire etc.), force majeure or events such as strikes, lockouts etc.
  7. Effect(s) arising out of change in the regulatory framework applicable to the listed entity.
  8. Litigation(s)/dispute(s)/regulatory action(s) withimpact.
  9. Fraud /defaults etc. by directors (other than key managerial personnel or employees of listed entity.
  10. Options to purchase securities including any ESOP/ESPS Scheme.
  11. Giving of guarantees or indemnity or becoming a surety for any third party.
  12. Granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals.

The Authorized KMP of the Company may consider any other event/information that is likely to affect the business of the Company and is a major development in the organization and provide brief details to the Exchange and further it may also disclose any other information which is exclusively known to the Company which may enable the stake holders to appraise its position and to avoid establishment of a false market.

The Board of Directors of the Company has authorized Mr. Rajesh Ranka, Chairman &Managing Director or Mr. P.K. Nahar, Sr. Vice President (Commercial) & Chief Financial Officer & Mr. Kapil Kumar Kumawat , Company Secretary for the purpose of determining materiality of an event or information in consultation with the Board wherever required, and for the purpose of making disclosures to stock exchange(s).
The details of the contact of the above – mentioned officials are given below :-

This Policy may be amended at any time by the Board of Directors of the Company.

Policy On Corporate Social Responsibility

Philosophy

Recognizing that business enterprises are economic organs of society and draw on societal resources, it is our belief that a company's performance must be measured by its contribution to building economic, social and environmental capital towards enhancing societal sustainability. In alignment with vision of the company, through its CSRinitiatives, company will continue to enhance value creation in the society andin the community in which it operates, through its services, conduct& initiatives, so as to promote sustained growth for the society andcommunity, in fulfillment of its role as a Socially ResponsibleCorporate.

Objectives of the Policy

The Company through its CSR initiatives will continue to enhance value creation in the society and in the community in which it operates, through its services, conduct and initiatives so as to promote sustained growth for the society and community, in fulfillment of its role as a Socially Responsible Corporate with environmental concern.The Objective of the Company’s CSR Policy is:-

  • To take initiatives directly or in association with other organizations and organizing programs that benefits the communities in and around its areas of operations over a period of time in terms of enhancing the quality of life and economic well being of the general public.
  • To generate through its CSR initiatives, a community goodwill for the Company and help reinforce a positive & socially responsible image of MIL as a corporate entity.
  • To ensure the commitment at all levels in the organization to operate its business in an economically, socially & environmentally sustainable manner while recognizing the interests of all its stakeholders.

CSR Activities

To attain its CSR objectives in a professional manner and integrated manner, the company shall undertake following activities:

  1. Enhancing environmental and natural capital supporting rural development promoting education; providing preventive healthcare, providing sanitation and drinking water preserving and promoting sports
  2. Promoting education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects;
  3. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
  4. Ensuring environmental sustainability, ecological balance, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water.
  5. protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries promotion and development of traditional arts and handicrafts.
  6. Contributions to technology incubators located with academic institutions which are approved by the Central Government;
  7. Rural development projects.

Implementation

The Company shall implement its CSR Programmes through Company personnel or through external agencies or trust or Foundations and Section 8 Companies that may be established by the Company from time to time. In such cases, the Company will specify the CSR Programmes which may be undertaken by those trusts in accordance with their Objects and administrative and accounting processes laid down in the respective Trust Deeds/ Memoranda and Articles of Association.

Monitoring

  • To ensure effective implementation of the CSR programs undertaken by the Company, a monitoring mechanism will be put in place by the Company. The progress of CSR programs will be reported to the Chairman & Managing Director of the Company on a periodical basis.
  • Chairman & Managing Director of the Company shall compile the information and may seek such clarification which may be required to explain the complete facts to the CSR Committee about the CSR project undertaken by the Company.
  • The Company will also try to obtain feedback from beneficiaries about the program and shall submit the report to the Chairman & Managing Director of the Company.
  • Appropriate documentation and amendments of the CSR Policy, annual CSR activities and expenditure details will be undertaken on a regular basis and the same shall be placed before the Board.
  • CSR initiatives of the Company will also be reported in the Annual Report of the Company in the format prescribed by the Central Government or Ministry of Corporate Affairs.

Internal Financial Control Policy

Legislation And Reference

Section 134(5) (e) of the Companies Act, 2013, requires a Company to haveInternal Financial Controls (IFC) Policy. In case of Listed Companies, theDirectors’ Responsibilities states that the Directors have laid down IFC to befollowed by the Company and that such control are adequate and operatingeffectively.

As per Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (LODR) Regulation, 2015the Audit Committee shallreview the Internal Financial Control before their submission to the Board and shall also discuss anyrelated issues with the Internal and Statutory Auditors and Management of theCompany. It shall also act in accordance with the terms of reference specifiedin writing by the Board.

As per Section 143(3) (f) of the Companies Act, 2013, the Statutory Auditorsreport shall state whether the Company has adequate Internal FinancialControls system in place and the operating effectiveness of such controls.

As per Schedule IV of the Companies Act, 2013, the Independent Directors shallsatisfy themselves on the integrity of financial information and that financialcontrol and the systems of risk management are robust and defensible.

Objectives Of The Policy

  • To mitigate risks and provide reasonable assurance that operations are efficient and effective, assets are safeguarded. 
  • Financial reporting is accurate and reliable.
  • To ensure Company’s resources are used prudently and in an efficient, effective and economical manner. 
  • Resources of the Company are adequately managed through effective internal controls.
  • A framework for an effective internal control system which conveys to managers that they are responsible for ensuring that internal controls are established, documented, maintained and adhered to across the Company’s and to all Employees that they are responsible for adhering to those internal controls.
  • To ensure the propriety of transactions, information integrity, compliance with regulations and achievement of Company’s objectives through operational efficiency.
  • Assessing and containing the risks faced by the Company to acceptable level.
  • Preventing and correcting irregularities.
  • The actions of all Company officers including Directors, Key Managerial Personnel, Senior Management and Staff are in compliance with the Company’s policies and procedures and also relevant laws and regulations.

Scope Of The Policy

Internal Financial Control is basically a process by which an organisation’s resources are directed, monitored and measured. It plays an important role in detecting and preventing fraud and error and protecting organisations resources. It also comprises the plan of the Company and all the methods and measures adopted by the Company in order to safeguard its assets, accuracy and reliability of its accounting data, promote operational efficiency, prevention, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The framework of a good Internal Control System includes:

1) Control Environment:

A sound control environment is created by management through communication, attitude and example. This includes a focus on integrity, a commitment to investigating discrepancies, diligence in designing systems and assigning responsibilities.

2) Risk Assessment:

This involves identifying the areas in which the greatest threat or risk of inaccuracies or loss exist. To be most efficient, the greatest risks should receive the greatest amount of effort and level of control.

3) Monitoring and Reviewing:

The system of internal control should be periodically reviewed by management. By performing a periodic assessment, management assures that internal control activities have not become obsolete or lost due to turnover or other factors. They should also be enhanced to remain sufficient for the current state of risks.

4) Information and Communication:

The availability of information and a clear and evident plan for communicating responsibilities and expectations is paramount to a good internal control system.

5) Control Activities:

These are the activities that occur within an internal control system.

Procedures On Internal Financial Controls

The Company shall establish, review & manage control framework in the following operational areas:

1) sales & invoicing
  • Prices for invoicing shall be driven by masters or pre‐approved sale orders.
  • Invoice generation should be system driven and online.
  • System of obtaining acknowledgement for invoices should be in place.
  • Establish price approval policy, discounts approval policy with properauthorisation to vary rules.
  • Without valid invoices, despatching of goods shall not be made.
2) receivables management
  • Credit sales shall not be done without security back up.
  • New credit customers shall be pre‐approved by the designated authority afterproper credit check.
  • Establish regular reporting and follow‐up on aging accounts
  • Segregation of duties of employees in accounts receivable and receiptaccounting
  • Review credit balances in customer account regularly.
  • All cheques/DDs should be deposited without any delay.
  • Establish monitoring system for timely collection of concessional form.
  • Debit notes are to be raised for bank charges on dishonour of cheques.
  • Bank guarantee, LC expiry to be reviewed and monitored regularly.
  • Monthly statement of accounts to be sent to all customers promptly.
  • System of monitoring acknowledgements from customers.
3) purchase of goods & services
  • All procurements of goods & services shall be at competitive prices.
  • Procurement decisions shall be evaluated and monitored by cross functionalteam at all levels.
  • Vendors shall be pre‐approved by Corporate Office before first transaction.
  • Ordering for purchase of goods & services shall be backed by Purchase orders(PO) or work order (WO) duly signed by two authorised officers; one shall bemandatorily by a person with knowledge in accounting.
  • All POs, WOs shall be pre‐approved by the duly authorised official withappropriate delegated financial authority.
4) payables management
  • Authorization for payment of the invoice after adhering to the terms andconditions of the POs / WOs.
  • Payments of Invoices shall be based on original invoice as per the terms ofapproved PO / WO.
  • Vendor payments shall be made through e‐payments. Other mode of paymentis only second option.
  • Vendor ledger to be reconciled on a monthly basis and control account are tobe cleared up by following up for the pending items.
  • Confirmation of balance in writing from all vendors is must for at least once ina year.
  • Concessional forms like C‐form shall be issued for eligible purchases.
5) employee payments
  • All payments to employees are to be governed by pre‐approved policies.
  • Maintain accurate employee attendance, leave records.
  • Segregate duties for maintenance of personnel records and running of pay roll.
  • Employee payments shall be made through e‐payment to respective bankaccounts.
  • All payroll control accounts are to be reviewed and reconciled on a monthlybasis.
  • Maintain confidentiality about individual employee’s earnings unless it isrequired for statutory purposes.
6) treasury operations
  • No cash receipts from any customers without prior approval in writing.
  • Accounting of receipts and depositing of cheques, DDs in to banks shall be onsame day.
  • Reconciliation with bank statement for receipts side should be done daily.
  • Cash balance should be counter checked by supervisory officer on a daily basis.
  • Adequate insurance cover for all risks associated with cash is mandatory.
  • Segregation of duties to ensure cash handling is separated from the financemanager.
  • Un‐used cheque leafs shall be in safe custody.
  • Authorised cheque signatories shall not sign blank cheques under anycircumstances.
  • Rotation of cheque signatories for payments is encouraged.
  • Independent direct confirmation of bank balances from banks by internalaudit.
  • Transactions involving forex shall be governed by a policy.
7) taxes and duties
  • Remittance of statutory liability & filing of prescribed returns on or before duedate is the primary responsibility of the concerned accounts head.
  • Tax ledgers and control accounts are to be reconciled before remittance oftaxes, duties based on the applicable laws and regulations.
  • All signatories to any statutory remittances or return or appeal or applicationor correspondence in whatever manner shall have appropriate authorisation inwriting including for digital signatory.
  • Develop a monitoring & reporting system for ensuring compliance of allstatutory obligation mapped to its time schedule.
  • Develop a monitoring & reporting system for systematic review of all disputesin appeals before quasi‐judicial, judicial fora relating to all statutorycompliance or obligations.
8) fixed assets
  • Keep all smaller valuables in a safe.
  • Maintain an asset register with all relevant details of each asset.
  • Establish physical security protection measures such as locks on premises.
  • Establish security/surveillance cameras for enhancing protection measures forlarge area where movements of men and machines are there.
  • Take out appropriate insurance cover for all types of assets to cover relevantperils associated to it.
  • Review insurance coverage details regularly.
  • Perform periodical asset register audit with physical count.
  • Establish safeguarding measures to protect those assets from misuse orencroachment or theft where such assets are located away from the normalbusiness premises.
9) inventories
  • Storage areas for inventories shall be properly secured with proper securityarrangements. It shall be regularly reviewed for improvements.
  • Inventories shall be properly organised and stored for smooth access for bothverification & delivery.
  • Segregation of administrative duties for material procurement and warehousemanagement should be in place.
  • Establish paperless e‐authorisation for issuance of materials from warehouse.
  • ABC classification of inventory management system shall be followed.
  • Physical verification of inventory is to be carried out for all classes of items (i.e.ABC) for the pre‐set time schedule for each category.
  • Cross functional team should conduct the physical verification of inventories.
  • Adequate insurance cover should be in place for all types of risks forinventories.
  • Establish systematic review process for initiation of insurance claims fordamaged inventories during storage or transit.
  • Periodical review of obsolete, non‐moving inventories to design a plan forperiodical disposal.
10) general ledger
  • Segregation of duties with regard to creation & authorisation of entries.
  • Systematic work flow enabled authorisation of journal vouchers.
  • Statistical analysis for reasoning of cancelled / deleted entries periodically.
  • Reconciliation of control accounts and review system for monitoring.
  • Systematic monthly period closure of books.
  • Systematic review of GL for Revenue, Expenses, Assets and Liabilities should inplace.
  • Centrally controlled master data management of chart of Accounts.
  • Budget controls for expenditure.
  • Systematic review of each and every component of financial statements.
  • Third party assessment certifications of inventory to be used to corroborateclosing stocks on selective items.
  • Access control of GL to authorised users and surveillance system formonitoring unauthorised access.
  • Establish disaster recovery system in place and evaluate its fail‐safecapabilities

Amendment In Law

This Policy shall be suitably amended, modified and improved to meet the changing business needs and in respect to any subsequent amendment/modification in the applicable laws and/or Listing Agreement in this regard.

Policy On Related Party Transactions

Pursuant to Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

1. scope and purpose of thepolicy

Related party transactions can present a potential or actual conflict of interest which may be against the best interest of the company and its shareholders. Considering the requirements for approval of related party transactions as prescribed under the Companies Act, 2013 (“Act”) read with the Rules framed there under and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Regulation 23”), Modern Threads (India) Limited (Company) has formulated guidelines for identification of related parties and the proper conduct and documentation of all related party transactions.

Also, Regulation 23(1) of the SEBI Listing Regulations requires the company to formulate a policy on materiality of related party transactions and dealing with related party transactions.

In the light of the above, the Company has framed this Policy on Related Party Transactions (“Policy”). This Policy has been adopted by the Board of Directors of the Company based on recommendations of the Audit Committee. Going forward, the Audit Committee will review and amend the Policy, as and when required, subject to adoption by the Board.

2. objective of the policy

The objective of this Policy is to set out (a) the materiality thresholds for related party transactions and; (b) the manner of dealing with the transactions between the Company and its related parties based on the Act, Regulation 23 of the SEBI Listing Regulations and any other laws and regulations as may be applicable to the Company.

3. definitions

  • 3.1 Act means the Companies Act,2013
  • 3.2 Regulation 23 means the Regulation no. 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,2015
  • 3.3 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 ofinterest
  • 3.4 Ordinary course of business means the usual transactions, customs and practices undertaken by the Company to conduct its business operations and activities and includes all such activities which the company can undertake as per Memorandum & Articles of Association.TheBoardandAuditCommitteemaylaydowntheprinciplesfordetermining ordinary course of business in accordance with the statutory requirements and other industry practices andguidelines.
  • 3.5 Company means Modern Threads( India) Limited
  • 3.6 Relative with reference to a Director or KMP means persons as defined in Section 2(77) of the Act and rules prescribedthereunder.
  • 3.7 Related Party have the meaning as defined under Section 2(76) of Companies Act, 2013 and Regulation 2(1)(zb) of the Securities and Exchange Board Of India (Listing Obligations and Disclosure Requirements) Regulations,2015 read with amendments issued from time to time.
  • 3.8 Related Party Transaction have the meaning as defined under Regulation 2(1)(zc) of the Securities and Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 as means transfer of resources, services or obligations between a listed entity and a related party, regardless of whether price is charged and a transaction with a related party shall be construed to include a single transaction or a group of transactions in  a contract,   including but not limited to the following–
    a. sale, purchase or supply of any goods ormaterials.
    b. selling or otherwise disposing of, or buying, property of anykind.
    c. leasing of property of anykind.
    d. availing or rendering of anyservices.
    e. appointment of any agent for purchase or sale of goods, materials, services or property.
    f. appointment to any office or place of profit in thecompany.
    g. underwriting the subscription of any securities or derivatives thereof, of thecompany.
  • 3.9 Material Related Party Transaction means a transaction with a Related Party if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds 10% (ten percent) of the annual consolidated turnover of the Company as per the last audited financial statements of the Company“
  • 3.10 Key Managerial Personnel or KMP shall have the meaning as defined in the Companies Act 2013

Any other term not defined herein shall have the same meaning as defined in the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 or any other applicable law or regulation.

4. materiality thresholds

Regulation 23 of the SEBI Listing Regulations requires a company to provide materiality thresholds for transactions beyond which approval of the shareholders through resolution will be required and the related parties shall abstain from voting on such resolutions whether the entity is a related party to the particular transaction or not. The Company has fixed its materiality threshold at 10% of the annual consolidated turnover of the company as per last audited financial statements of the company for the purpose of Regulation 23(4) of the SEBI Listing Regulations.

5 manner of dealing with related party transaction

5.1 Identification of Related Parties

The Company will identify and update the list of related parties as prescribed under Section 2(76) of the Act read with the Rules framed there under and Regulation 2(1) (zb) of the SEBI Listing Regulations.

5.2 Identification of Related PartyTransactions

Related Party Transactions will be identified in accordance with Regulation 2(1)(zc) of the SEBI Listing Regulations. The Company has also formulated guidelines for determining whether the transaction is in the ordinary course of business and at arm’s length basis.

5.3 procedure for approval of related party transaction
5.3.1 Approval of the Audit Committee

All related party transactions require prior approval of the Audit Committee. However, the Company may obtain omnibus approval from the Audit Committee for such transactions, subject to compliances with the following conditions:

  • The Audit Committee shall, after obtaining approval of the Board of Directors, specify the criteria for granting the omnibus approval in line with the Policy and such approval which shall include the followingnamely:
    i. Maximum value of the transaction, in aggregate, which can be allowed under the omnibus route in ayear.
    ii. The maximum value per transaction which can beallowed.
    iii. extent and manner of disclosures to be made to the audit committee at the time of seeking omnibusapproval.
    iv. review, at such intervals as the Audit Committee may deem fit, related party transaction entered into by the company pursuant to each omnibus approval made.
    v. transactions which cannot be subject to the omnibus approval by the Audit Committee.
  • The Audit Committee shall consider the following factors while specifying the criteria for making omnibus approval,namely:
    i. repetitiveness of the transactions (in past or infuture).
    ii. justification for the need of omnibusapproval
  • The Audit Committee shall satisfy itself regarding the need for such omnibus approval for transactions of repetitive nature and that such approval is in the interest of the company.
  • The omnibus approval shall provide details of (i) the name/s of the related party, nature of transaction, period of transaction, maximum aggregated value of the particular type of transaction that can be entered into, (ii) basis of arriving at the indicative base price / current contracted price and the formula for variation in the price if any and (iii) such other conditions as the Audit Committee may deemfit.
    Provided that where the need for related party transactions cannot be foreseen and aforesaid details are not available, Audit Committee may grant omnibus approval for such transactions subject to their value not exceeding rupees 1 crore per transaction.
  • The Audit Committee shall review, at least on a quarterly basis, the aggregated value and other details of related party transactions transacted into by the company pursuant to the omnibus approvalgiven.
  • Such omnibus approval shall be valid for a period not exceeding one financial year and shall require fresh approval after expiry of such financialyear.
  • Omnibus approval shall not be made for transactions in respect of selling or disposing of the undertaking of thecompany.
  • Any other conditions as the Audit Committee may deemfit.
5.3.2 approval of the board of directors of the company

As per the provisions of Section 188 of the Act, all kinds of transactions specified under the said Section and which are not in the ordinary course of business or not at arm’s length basis, are placed before the Board for its approval.

In addition to the above, the following kinds of transactions with related parties are also placed before the Board for its approval:

  • Transactions which may be in the ordinary course of business and at arm’s length basis, but which are as per the policy determined by the Board from time to time (i.e. value threshold and/or other parameters) require Board approval in addition to Audit Committeeapproval.
  • Transactions in respect of which the Audit Committee is unable to determine whether or not they are in the ordinary course of business and/or at arm’s length basis and decides to refer the same to the Board forapproval.
  • Transactions which are in the ordinary course of business and at arm’s length basis, but which as per Audit Committee requires Board approval.
  • Transactions meeting the materiality thresholds laid down in Clause 4 of the Policy, which are intended to be placed before the shareholders for approval.
5.3.3 Approval of the Shareholders of the Company

All the transactions with related parties exceeding the materiality thresholds, laid down in Clause 4 of the Policy, are placed before the shareholders for approval.

For this purpose, all entities falling under the definition of related parties shall abstain from voting irrespective of whether the entity is a party to the particular transaction ornot.

In addition to the above, all kinds of transactions specified under Section 188 of the Act which (a) are not at Arm’s Length or not in the ordinary course of business and (b) exceed the thresholds laid down in Companies (Meetings of Board and its Powers) Rules, 2014 are placed before the shareholders for its approval.

However, the requirement of shareholders’ approval shall not be applicable for transactions entered into between the company and its wholly owned subsidiary whose accounts are consolidated with the company and placed before the shareholders at the general meeting for approval.

6. disclosures

The Company shall disclose, in the Board’s report, transactions prescribed in Section 188(1) of the Act with related parties, which are not in ordinary course of business or not at arm’s length basis along with the justification for entering into such transaction.

7. review of the policy

The adequacy of this Policy shall be reviewed and reassessed by the Committee periodically and appropriate recommendations shall be made to the Board to update the Charter based on the changes that may be brought about due to any regulatory amendments or otherwise.

Policy On Succession-Planning

1. introduction

In accordance with the provisions of Regulation 17(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as “LODR Regulations, 2015) and upon the recommendation of the Nomination and Remuneration Committee as adopted and approved by the board of directors of the Company.

2. objective

The objective of this Policy is to ensure the orderly identification and selection of new Directors or Senior Management in the event of any vacancy, whether such vacancy exists by reason of an anticipated retirement, an unanticipated departure, the expansion of the size of the Company, orotherwise.

3. definitions

  • Nomination and Remuneration Committee or “Committee” means the Committee of the Board constituted/re-constituted under the provisions of Regulation 19 of the LODR Regulations, 2015 read with Section 178 of the Companies Act, 2013 as in force from time totime.
  • Board of Directors or Board means the Board of Directors of Modern Threads (India)Limited as constituted/re-constituted from time totime.
  • Company means Modern Threads (India) Limited
  • Policy or “this Policy” means SuccessionPolicy.
  • Senior Management mean personnel of the Company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management one level below the executive directors, including all functional heads.

4. procedure

  • Board Level Appointment: The Nomination and Remuneration Committee of the Company shall identify the suitable person from among the existing top management or from the outside to fill up the vacancy at the Board level. The appointment of the person at the Board level shall be in accordance with the applicable provisions of the Companies Act, 2013 read with terms of Corporate Governance as may be amended from time totime
  • Sr. Management Level Appointment: The vacancy at Senior Management i.e. all members of management one level below the executive directors, including all functional heads (CEO/CFO/CS/General Manager) shall be filled up by the Chairman & Managing Director in line with the internal policy adopted by the management, keeping in view the organization's objectives.

5. emergency succession

If a Director slot/Senior Management position suddenly becomes vacant by reason of death or other unanticipated occurrence, the Committee shall convene a special meeting as early as possible to implement the process describedherein.

6. Review Andmonitoring

The Nomination and Remuneration Committee shall review and monitor from time to time the implementation of this Policy to ensure its effectiveness and may also recommend changes, if any, to the Board for ensuing effective succession planning.

7. disclosures

The Company shall disclose this Policy on its website and a web link thereto shall be provided in the Annual Report.

Preservation Policy

policy on preservation of documents as per securities and exchange board of india (listing obligations and disclosure requirements) regulations, 2015 and the companies act, 2013

1. introduction

This policy is primarily framed based on Regulation 9 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as `Listing Regulations’) and Companies Act, 2013. Archival Policy as referred to in Regulation 30 (8) of the Listing Regulations forms part of this Policy. This policy is intended to ensure compliance particularly with the Listing Regulations and the applicable provisions of Companies Act, 2013.

2. purpose of the policy

Regulation 9 of the Listing Regulations mandates that a listed entity shall have a policy for preservation of documents, approved by its board of directors, classifying them in at least two categories as follows-

  • documents whose preservation shall be permanent in nature.
  • documents with preservation period of not less than eight years after completion of the relevant transactions.

Provided that the listed entity may keep documents specified in clauses (a) and (b) in electronic mode.

3. amendments to the policy

The Board of Directors can amend this Policy, as and when deemed fit. Any or all provisions of this Policy would be subject to revision/amendment in accordance with the Rules, Regulations, Notifications etc. on the subject as may be issued by relevant statutory authorities, from time to time. In case of any amendment(s), clarification(s), circular(s) etc. issued by the relevant authorities are not consistent with the provisions laid down under this Policy, then such amendment(s), clarification(s), circular(s) etc. shall prevail upon the provisions hereunder and this Policy shall stand amended accordingly from the effective date as laid down under such amendment(s), clarification(s), circular(s) etc.

4. definitions

  • Document(s) refers to papers, notes, agreements, notices, advertisements, requisitions, order, declarations, forms, correspondence, minutes, indices, registers and or any other record, required under or in order to comply with the requirements of any applicable law, whether issued, sent, the time being in or otherwise, maintained on paper or in Electronic form received or kept in pursuance of the Act or under any other law for and does not include multiple or identical copies.
  • Electronic Record(s) means the electronic record as defined under clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000.
  • Electronic Form means on any electronic device such as computer, laptop, compact disc, floppy disc, space on electronic cloud, or any other form of storage and retrieval device, considered feasible, whether the same is in possession or control of the Company or otherwise the Company has control over access to it.
  • legal Hold refers to a direction from Legal to preserve certain data held by employees or databases. All retention periods under this Policy shall be suspended with respect to documents subject to Legal Hold and all documents subject to Legal Hold are to be preserved in strict accordance with Legal Hold instructions and not altered, destroyed or deleted until Legal informs employees that the Legal Hold has ended.
  • Maintenance means keeping Documents, either physically or in Electronic Form.
  • Preservation means to keep in good order and to prevent from being altered, damaged or destroyed.

5. preservation of documents

The Company shall preserve all its documents as per the requirements and provisions of the Companies Act, 2013 and the rules made thereunder, the Secretarial Standards, the Listing Regulations and any other law, rules, regulations as may be applicable to the Company from time-to-time.

(a) Documents which are to be maintained permanently

The Company shall maintain the following documents on a permanent basis:

  • Copies of all documents and information as originally filed under section 7(1) (incorporation) till dissolution under the Companies Act, 2013
  • Share certificate forms and related books and documents – Disputed cases
  • The Original Signed and Stamped Memorandum of Association and the Articles of Association of the Company
  • Minutes of Annual General Meetings, General Meetings, Board Meetings and various Committee Meetings
  • Register of Members along with Index
  • Foreign Register of Members, if any
  • Register of loans, guarantee, security and acquisition made by the company
  • Register of investments not held in its own name by the company, if any
  • Register of contracts with related party and contracts and Bodies etc. in which directors are interested
  • Register of Charges
  • Registers of Renewed and duplicate share certificates
  • Register of Directors and Key Managerial Personnel
  • Intellectual Property Documents shall include, but shall not be limited to Copyrights, Trademarks, Patents, and Industrial Designs. Intellectual Property Rights Documents that are owned by the Company shall be retained by the Company permanently.
(b) Documents which are to be maintained for at least eight financial years.
  • Books of account together with the vouchers relevant to any entry in such books of account
  • Register of Debenture holders (including Foreign Register of Debentures) or Register for any other Securities issued by the Company
  • Copies of all Annual Returns and copies of all certificates and documents required to be annexed there to
  • Disclosure of Interest received from the Directors of the Company in the manner prescribed
  • Attendance Registers, Notices, Agenda, Notes on Agenda and other related papers of Annual General Meetings. General Meetings, Board Meetings and various Committee Meetings
  • Instrument creating a Charge or modifying a Charge, if any
  • Changes to the Memorandum of Association and the Articles of Association, if any
  • Register of deposits accepted or renewed, if any
  • Tax Records - Tax records including, but not limited to documents concerning tax assessment, tax filings, proof of deductions, tax returns, appeal preferred against any claim made by the relevant tax Authorities, shall be maintained for a period of 8 years or for a period of 8 years after a final Order has been received with respect to any matter which was preferred for Appeal, as the case may be
  • Employment /Personnel Record in case of employees of the Company
  • Relevant marketing and sales documents
  • The postal ballot and all other papers or registers relating to postal ballot including voting by electronic means
  • Attendance slips for Annual/ Extraordinary General Meeting
  • Dividend Payment Records
  • Any other register /documents required by any law, for the time being in force
  • Press Releases
  • Legal documents including but not limited to contracts, legal opinions, pleadings, Orders passed by any court or tribunal, Judgments, Interim Orders, Documents relating to cases pending in any Court or Tribunal or any other Authority empowered to give a decision on any matter, Awards, Documents relating to property matters
  • Compliance certificate (for compliance of Reg. 7(2) signed by Compliance officer & Share transfer agent.
  • Statement giving the number of investor complaints pending at the beginning of the quarter, those received during the quarter, disposed of during the quarter and those remaining unresolved at the end of the quarter.
  • Quarterly compliance report on corporate governance
  • Prior intimation to stock exchange about the meeting of the board of directors
  • Disclosures of any material events or information
  • Statement showing holding of securities and shareholding pattern separately for each class of securities
  • Statement of deviation(s) or variation(s) in the use of proceeds from the objects stated in the  offer document or explanatory statement to the notice for the general meeting, for public issue, rights issue, preferential issue etc.
  • Quarterly and year-to-date standalone/ consolidated financial results
  • As part of financial results for the half year by way of a note a statement of assets and liabilities as at the end of the half-year
  • Annual report
  • Annual Information Memorandum
  • A certificate from a practicing company secretary, certifying that all certificates have been issued within thirty days of the date of lodgement for transfer, sub-division, consolidation, renewal, exchange or endorsement of calls/ allotment monies.
  • Intimation of record date
  • Details regarding the voting results of general meetings
  • Any and all kinds of filing to Stock Exchanges, viz. Press Release, Investors Presentation, etc.

6. mode of maintenance

The Company shall maintain these records either in physical or electronic mode. The applicable provisions of law, rules and regulations with regard to electronic maintenance of records shall be adhered to.

All the records shall be maintained as per the prescribed formats, if any, as amended from time-to-time under the various rules and regulations.

7. disposal and destruction of records

After the expiry of the statutory retention period, the preserved documents may be destroyed. Destruction of documents as a normal administrative practice shall be followed for the records which are duplicate/ unimportant/irrelevant.

This applies to both Physical and Electronic Documents. The documents may be destroyed as follows:

  • Recycle non-confidential paper records.
  • Shred or otherwise render unreadable confidential paper records or
  • Delete or destroy electronically stored data.

Remuneration Policy

1. introduction

In pursuance of the Company’s policy to consider human resources as its invaluable assets, to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP) and other employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 read with rules made thereunder and the listing agreement as amended from time to time.This policy isrelated tonomination, remuneration and evaluation of the Directors, Key Managerial Personnel (KMP) and other employees.

2. objective

The Policy shall be in compliance with the provisions of Section 178 of the Companies Act, 2013 read with the rules made thereunderas amended from time to time and Clause 49 ofthe Listing Agreement. The objective of the policy is to lay down a frame work in relation to remuneration of Directors, Key Managerial Personnel, Senior Management Personnel & other employees.

To attain the objective of the policy, the Committee to deal following issues :- 

  • 2.1. To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel (KMP) and Other Employees.
  • 2.2. To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation.
  • 2.3. To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel (KMP) and Other Employees.
  • 2.4. To recommend and provide reward to Key Managerial Personnel (KMP) and Other Employeesfor their effort, performance, dedication and achievement relating to the Company’s operations.
  • 2.5. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
  • 2.6. To devise a policy on Board diversity.
  • 2.7. To develop a succession plan for the Board and to regularly review the plan.

3. definitions

  • 3.1. Company means the Modern Threads (India) Limited.
  • 3.2. Act means the Companies Act, 2013 and rules framed thereunder, as amended from time to time.
  • 3.3. Listing Agreement means agreement with Stock Exchanges.
  • 3.4. Committee means the Nomination & Remuneration Committee of the Board of Directors of the Company.
  • 3.5. Key Managerial Personnel means:-
    a. Chief Executive Officer or the Managing Director or the Manager.
    b. Whole-time Director.
    c. Chief Financial Officer
    d. Company Secretary
    e. Such other Officers as may be prescribed.
  • 3.6. Other Employees means personnel’s of the Company who are the core members of its management team excluding the Board of Directors.
  • 3.7. Policy means the Nomination, Remuneration & Evaluation Policy of the Company.

4. constitution of nomination and remuneration committee

The Board of Directors of the Company has constituted the Nomination and Remuneration Committee consisting of three Independent Directors. The Present Nomination and Remuneration Committee Consists of following member director:

  • Shri S.B. L. Jain (Chairman)
  • Shri Pradeep Kumar (Member)
  • Shri H.L. Sharma (Member)

The meeting of the Committee shall be held at such regular intervals as may be required.

5. policy for directors, kmp and other employees

5.1 Appointment Criteria and Qualifications
  • The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or other employees and recommend to the Board for his/her appointment.
  • A person should possess adequate qualification, expertise and experience for the position he/she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient/satisfactory for the concerned position.
5.2 Term/Tenure
  • Managing Director/Whole-time Director: The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of the term.
  • Independent Director: An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report.
    No Independent Director shall hold office for more than two consecutive terms of 5 years, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.
5.3 Remuneration
  • Remuneration to Managing Director/Whole Time Director/KMP and other Employees:
    Remuneration/Compensation/Commission etc. to be paid to Director/ Managing Director etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force.
  • Remuneration to Non-Executive/Independent Director:
    Non-Executive Independent Director may receive remuneration/compensation/commission as per the provisions of Companies Act, 2013. The amount of sitting fees shall be subject to ceiling/limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force.
5.4 Evaluation

The Committee shall carry out evaluation of performance of every Director, KMP and Other employees at regular interval.

5.5 Removal

Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations there under, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Other employees subject to the provisions and compliance of the said Act, rules and regulations.

5.6 Retirement

The Director, KMP and Other employees shall retire as per the applicable provisions of the Act and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP and other employees in the same position/remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

6 duties of the nomination and remuneration committee

Duties of the Nomination and Remuneration Committee relating to Nomination, Remuneration and Evaluation of Directors, KMP and Other Employees are as follows:

6.1 Duties in relation to nomination matters

The duties of the Committee in relation to nomination matters include:

  • Ensuring that there is an appropriate induction in place for new Directors, KMP and other employees and reviewing its effectiveness; 
  • Ensuring that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment in accordance with the Guidelines provided under the Act;
  • Identifying and recommending Directors who are to be put forward for retirement by rotation.
  • Determining the appropriate size, diversity and composition of the Board;
  • Developing a succession plan for the Board and other employees and regularly reviewing the plan;  Evaluating the performance of the Board members and other employees in the context of the Company’s performance from business and compliance perspective;
  • Considering any other matters, as may be requested by the Board.
6.2 Duties in relation to remuneration matters

The duties of the Committee in relation to remuneration matters include:

  • Considering and determining the Remuneration Policy, based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract, retain and motivate members of the Board and such other factors as the Committee shall deem appropriate all elements of the remuneration of the members of the Board;
  • Approving the remuneration of the KMP and other employees of the Company maintaining a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company;
  • Considering any other matters as may be requested by the Board.
6.3 Duties in relation to evaluation matter

The duties of the Committee in relation to evaluation matters include:

  • Leadership & stewardship abilities;
  • Contributing to clearly define corporate objectives & plans;
  • Obtain adequate, relevant & timely information from external sources;
  • Review& approval achievement of strategic and operational plans, objectives, budgets etc;
  • Regular monitoring of corporate results against projections;
  • Identify, monitor & mitigate significant corporate risks;
  • Review the management’s succession plan;
  • Assuring appropriate Board size, composition, independence, structure etc.; and
  • Clearly defining roles & monitoring activities of the Committees.

7 review and amendment

  • 7.1. The Nomination and Remuneration Committee or the Board may review the Policy as and when it deems necessary.
  • 7.2. The Nomination and Remuneration Committee may issue the guidelines, procedures, formats, reporting mechanism and manual in supplement and better implementation to this Policy, if it thinks necessary.
  • 7.3. This Policy may be amended or substituted by the Nomination and Remuneration Committee or by the Board as and when required and also by the Compliance Officer where there is any statutory changes necessitating the change in the policy.

Risk Management Policy

1. introduction

Risk management is to identify and manage threats that could severely impact the organization. Generally, this involves reviewing operations of the organization, identifying potential threats to the organization and the likelihood of their occurrence, and then taking appropriate actions to address the most likely threats. This document is intended to formalize a risk management policy for identification, evaluation, monitoring, and minimizing identifiable/ unidentifiable risks.

2. risk elements

Following are the major elements which may affect the business directly or indirectly –

  • Raw material supply
  • Raw material prices
  • Production including breakdown of machines
  • Technology changes
  • Labour availability / problem
  • Sales (Domestic and Overseas)
  • Market competition (Domestic and Overseas)
  • Statutory / regulatory issues

3. Objective & purpose of policy

The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

4. role of functional heads (hods)

Head of Departments shall be responsible for formulation of detail policy under each broad as indicated above and implementation of the risk management policy as may be applicable to their respective areas of functioning and report to the Audit Committee / Board.

The main areas where their involvement is required are as under-

  • To circulate objectives and purpose of the policy along with risk elements among all executives.
  • To fix responsibility of executives in each area with expected threats and guiding them for preventive actions.
  • Toensure minimization of risks by predetermined action initiatives against each area of operations.
  • To ensure that all the current and future risksof the company are identified, assessed, quantified and appropriately implemented.
  • To ensure necessary compliance of all statutory and regulatory threats on time to avoid unwanted actions / obligations.

5. role of theaudit committee –

The Audit committee will undertake the following actions to ensure that risk is managed appropriately:

  • To ensure that appropriate policy for risk management is in place.
  • Audit committee shall help in bringing an independent judgment on issues of risk management.
  • Continuous monitoring of implementation part of expected risk elements.
  • To ensure thatall actions of HODs are appropriate to mitigate the risks.
  • To report Board for any irregular or delayed process of action at the level of HODs, which is likely to affect the business adversely.

6. role of the board

The Board shall undertake to take appropriate action for minimizing identifiable / unidentifiable risks based on the recommendations of Audit Committee, which includes –

  • Need based deliberations on issues of risk management and ensure that the preventive actions are robust and defensible.
  • To monitor the risk management plans and ensurethat process and controls are in place for managing the risk elements.
  • To take decisions about risk elements affecting the organization.

7. disclosure in board’s report

Board of Directors shall include a statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

8. review

The Board of Directors of the Company and the Audit Committee shall periodically review and evaluate the risk management system of the Company so that the management controls the risks through properly defined network.

Vigil Mechanism

1. preface

1.1. Section 177 of the Companies Act, 2013 and pursuant to clause 49 of the listing agreement requires that every listed company shall establish a vigil mechanism for thedirectors and employees to report genuine concerns in such manner as may beprescribed. Such a vigil mechanism shall provide for adequatesafeguards against victimization of persons who use such mechanism and also makeprovision for direct access to the chairperson of the Audit Committee in appropriate orexceptional cases.

1.2. Under these circumstances, Modern Threads (India) Limited (“MTIL”), being a ListedCompany proposes to establish a Vigil Mechanism/Whistle Blower Policy and toformulate a policy for the same.

2. policy objectives

The Company is committed to adhere to the highest standards of ethical, moral andlegal conduct of business operations. To maintain these standards, the Companyencourages its employees who have concerns about suspected misconduct to comeforward and express these concerns without fear of punishment or unfair treatment. AVigil (Whistle Blower) Mechanism provides a channel to the employees and Directors toreport to the management concerns about unethical behavior, actual or suspected fraud etc. The mechanism provides for adequatesafeguards against victimization of employees and Directors to avail of themechanism and also provide for direct access to the Chairman of theAudit Committee in appropriate or exceptional cases.

3. definitions

  • 3.1. Employee means every employee of the Company, including the Directors in the employment of the Company.
  • 3.2. Protected Disclosure means a concern raised by a written communication made in good faith that discloses or demonstrates information that may evidence unethical or improper activity. Protected Disclosures should be factual and not speculative in nature
  • 3.3. Subject means a person against or in relation to whom a Protected Disclosure has been made or evidence gathered during the course of an investigation.
  • 3.4. Whistle Blower means an Employee making a Protected Disclosure under this Policy.

4. scope of the policy

This Policy intends to cover serious concerns that could have grave impact on the operations and performance of the business of the Company and malpractices and events which have/may taken place, misuse or abuse of authority, fraud or suspected fraud, violation of company rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies, and other matters or activity on account of which the interest of the Company is affected and formally reported by whistle blowers concerning its employees.

The policy neither release employees from their duty of confidentiality in the course of their work, nor is it a route for taking up a grievance about a personal situation.

5. eligibility

All Employees of the Company are eligible to make Protected Disclosures under the Policyin relation to matters concerning the Company.

6. receipt and disposal of protected disclosures

6.1. All Protected Disclosures should be reported in writing by the complainant as soon aspossible after the Whistle Blower becomes aware of the same so as to ensure a clearunderstanding of the issues raised and should either be typed or written in a legiblehandwriting in English/Hindi.

6.2. The Protected Disclosure should be submitted in a closed and secured envelope andshould be super scribed as “Protected disclosure under the Whistle Blower Policy”.Alternatively, the same can also be sent through email.If the complaint is not super scribed andclosed as mentioned above, it will not be possible for the Audit Committee to protect thecomplainant and the protected disclosure will be dealt with as if a normal disclosure.In order to protect identity of the complainant, the Vigilance and Ethics Officer will notissue any acknowledgement to the complainants and they are advised neither to writetheir name/address on the envelope nor enter into any further correspondence with theVigilance and Ethics Officer. The Vigilance and Ethics Officer shall assure that in case anyfurther clarification is required he will get in touch with the complainant.

6.3. Anonymous disclosure shall not be entertained by the Vigilance andEthics Officer.

6.4. The Protected Disclosure should be forwarded under a covering letter signed by thecomplainant. The Chairman of the Audit Committee shall detach the covering letter bearing the identity of theWhistle Blower and process only the Protected Disclosure.

6.5. All Protected Disclosures should be addressed to the Chairman of the Audit Committee.

6.6. On receipt of the protected disclosure, the Chairman of the Audit Committee, shall carry out initialinvestigation either himself or by involving any other Officer of the Company or an outsideagency before referring the matter to the Audit Committee of the Company for furtherappropriate investigation and needful action. The record will include:

  • Brief facts
  • Whether the same Protected Disclosure was raised previously by anyone, and if so,the outcome thereof;
  • Whether the same Protected Disclosure was raised previously on the samesubject;
  • Details of actions taken by Vigilance and Ethics Officer/Chairman of the Audit Committee forprocessing the complaint;
  • Findings of the Audit Committee.
  • The recommendations of the Audit Committee/other action(s).

7. investigation

7.1. All protected disclosures under this policy will be recorded and thoroughly investigated.The Audit Committee may investigate and may at its discretion consider involving anyother Officer of the Company and/or an outside agency for the purpose ofinvestigation.

7.2. Subject(s) shall have a duty to co-operate with the Audit Committee or any of theOfficers appointed by it in this regard.

7.3. Subject(s) have a right to consult with a person or persons of their choice, other than theVigilance and Ethics Officer/Investigators and/or members of the Audit Committee and/orthe Whistle Blower.

7.4. Subject(s) have a responsibility not to interfere with the investigation.

7.5. Unless there are compelling reasons not to do so, subject(s) will be given the opportunityto respond to material findings contained in the investigation report.

7.6. Subject(s) have a right to be informed of the outcome of the investigations.

7.7. The investigation shall be completed normally within 90 days of the receipt of the protecteddisclosure and may be extended by such period as the Audit Committee deems fit.

8. decision and reporting

8.1. If an investigation leads the Chairman of the AuditCommittee to conclude that an improper or unethical act has been committed, theChairman of the Audit Committee shall recommend to themanagement of the Company to take such disciplinary or corrective action as he maydeem fit. It is clarified that any disciplinary or corrective action initiated against the Subjectas a result of the findings of an investigation pursuant to this Policy shall adhere to theapplicable personnel or staff conduct and disciplinary procedures.

8.2. If the report of investigation is not to the satisfaction of the complainant, thecomplainant has the right to report the event to the appropriate legal or investigatingagency.

8.3. A complainant who makes false allegations of unethical & improper practices or aboutalleged wrongful conduct of the subject to the Vigilance and Ethics Officer or the AuditCommittee shall be subject to appropriate disciplinary action in accordance with therules, procedures and policies of the Company.

9. secrecy / confidentiality

9.1. The complainant, Members of Audit Committee, the Subjectand everybody who involved in the process shall maintain confidentiality of all matters under this policy and discuss only the extent or with those person as required under this policy for completing the process of investigations.

10. protection

10.1. No unfair treatment will be meted out to a Whistle Blower by virtue of his/her havingreported a Protected Disclosure under this policy. The company, as a policy,condemns any kind of discrimination, harassment, victimization or any other unfairemployment practice being adopted against Whistle Blowers. Complete protection willbe given to Whistle Blowers against any unfair practice like retaliation,threat or intimidation of termination/suspension of service, disciplinary action, transfer,demotion, refusal of promotion or the like including any direct or indirect use ofauthority to obstruct the Whistle Blower’s right to continue to perform his duties /functions including making further Protected Disclosure.

10.2. A Whistle Blower may report any violation of the above clause to the Chairman of theAudit Committee, who shall investigate into the same and recommend suitable actionto the management.

11. communication

11.1. A whistle Blower policy cannot be effective unless it is properly communicated toemployees. Employees shall be informed through by publishing in notice board andthe website of the company.

12. retention of documents

12.1. All Protected disclosures in writing or documented along with the results ofInvestigation relating thereto, shall be retained by the Company for a period of 7(seven) years or such other period as specified by any other law in force, whicheveris more.

13. administration and review of the policy

13.1. The Chief Financial Officer shall be responsible for the administration, interpretation,application and review of this policy. The Chief Financial Officer also shall beempowered to bring about necessary changes to this Policy, if required at any stagewith the concurrence of the Audit Committee.

14. amendment

14.1. The Company reserves its right to amend or modify this Policy in whole or in part, at anytime without assigning any reason whatsoever. However, no such amendment ormodification will be binding on the Employees and Directors unless the same is notifiedto them in writing.