REPORT ON CORPORATE GOVERNANCE
1. Company's Philosophy
Corporate governance is about commitment to values and ethical business conduct. It is about how an organization is managed. Timely and accurate disclosure of information regarding the financial situation, performance, ownership and governance of the Company is an important part of corporate governance. This improves the understanding of the structure, activities and policies of the organization and enhances the trust and confidence of the stakeholders.
The Company has always been committed to the principles of good corporate governance.
2. Board of Directors
• Composition of the Board
The Board of Directors consist of 1 Executive Promoter Director, 2 Non-Executive Promoter Directors (including one woman director), 1 Non-Executive Non-Independent Director and 4 Independent Directors. The Chairman of the Board is a Non-Executive Promoter Director. As on 31st March, 2015 and on the date of this report, the Board meets the requirement of having at least one woman director and not less than 50% of the Board strength comprising of Non-Executive Directors as 4 out of 8 Directors are Non-Executive Independent Directors.
• Meetings of Board of Directors and the dates of the Board Meetings
Four (4) Meetings of Board of Directors were held during the year ended 31st March, 2015 on 6th May, 2014, 13th August, 2014, 5th November, 2014 and 22nd January, 2015. The time gap between any two meetings was not exceeding 120 days.
As required by Section 165(1) of the Companies Act, 2013 and Clause 49 of the Listing Agreements, none of the Directors holds Directorships in more than 20 Companies (Public or Private), 10 Public Companies, membership of Board Committees (Audit & Stakeholders Relationship Committees) in excess of 10 and Chairmanship of Board Committee in excess of 5. None of the Directors serve as an Independent Director in more than 7 listed Companies. None of the Director who serves as Whole-Time Director in any listed Company serves as an Independent Director in more than three listed Companies.
3. Audit Committee
• Composition & Terms of Reference
The Audit Committee comprises of 3 Non-Executive Independent Directors viz. Mr. Milin Mehta, Mr. R. C. Saxena and Mr. C. P. Buch. Mr. Milin Mehta is Chairman of the Audit Committee. During the year under review, Mr. R. M. Kapadia has resigned w.e.f. 14th August, 2014 and Mr. R. C. Saxena was inducted as member of the Committee w.e.f. 5th November, 2014. The terms of reference of the Committee cover the matters specified for Audit Committee under the Listing Agreements and the provisions of Companies Act, 2013 and rules made thereunder.
The Statutory Auditors, Internal Auditors, Cost Auditors and other relevant Senior Management personnel of the Company are invited to attend the Meetings of Audit Committee. The Company Secretary acts as Secretary to the Committee. Mr. Milin Mehta, Chairman of the Audit Committee was present at the last Annual General Meeting held on 13th August, 2014.
• Meetings and the attendance during the year
There were Four (4) meetings of the Audit Committee during the year held on 6th May, 2014, 13th August, 2014, 5th November, 2014 and 22nd January, 2015.
4 Nomination and Remuneration Committee
Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreements, the Board of Directors of the Company reconstituted and renamed Remuneration Committee as "Nomination and Remuneration Committee". The Nomination and Remuneration Committee of Directors comprises of four Directors viz. Mr. Milin Mehta, Mr. Chirayu R. Amin, Mr. C. P Buch and Mr. R. C. Saxena. Mr. Milin Mehta is the Chairman of the Nomination and Remuneration Committee. The terms of reference of the Committee cover the matters specified for Nomination and Remuneration Committee under the provisions of Listing Agreement and Companies Act, 2013 and rules made thereunder.
Mr. Milin Mehta, Chairman of Nomination and Remuneration Committee was present at the last Annual General Meeting held on 13th August, 2014.
• Meetings and the attendance during the year
There were three (3) meetings of the Nomination and Remuneration Committee held during the year on 6th May, 2014, 13th August, 2014 and 5th November, 2014.
• Policy on Directors' Appointment and Remuneration
1.1 Appointment criteria and qualifications
(a) A person who is proposed to be appointed as Director of the Company should be eligible to be appointed as Director and must hold Director Identification Number issued by the Central Government and possess such qualification, expertise and experience as prescribed under the Act.
(b) Without prejudice to generality of the above, a person who is proposed to be appointed as an Independent Director shall also be subject to compliance of provisions of section 149(6).
(c) KMP or Senior Management personnel shall have adequate qualification, expertise and experience in the relevant field for which the appointment is proposed to be made.
(d) The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.
1.2 Term / Tenure
(a) Managing Director/Whole-time Director/Manager (Managerial Personnel):
The Company shall appoint or re-appoint any person as its Managerial Personnel 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.
(b) 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, 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.
The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management Personnel at such interval as deemed fit.
The Committee may recommend the Board for removal of a Director, KMP or Senior Management Personnel for reasons recorded in writing. The Procedure for removal of any Director shall be as per the provisions of the Act in this regard.
The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Act and the prevailing policy of the Company. The Company will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.
2.1 Remuneration Policy
(a) The remuneration / compensation / commission etc. to the Managerial Personnel will be determined by the Committee and recommended to the Board for approval which shall be subject to the prior/post approval of the shareholders of the Company and the Central Government, wherever required.
(b) The remuneration and commission to be paid to the Managerial Personnel shall be in accordance with the percentage / slabs / conditions as per the provisions of the Act.
(c) Increments to the existing remuneration / compensation structure may be recommended by the Committee to the Board which should be within the limits approved by the Shareholders in the case of Managerial Personnel.
(d) Where any insurance is taken by the Company on behalf of its Managerial Personnel, Chief Executive Officer, Chief Financial Officer, the Company Secretary and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration.
2.2 Remuneration to Managerial Personnel, KMP, Senior Management Personnel and Other Employees
(a) Fixed pay
The Managerial Personnel shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee in accordance with the provisions of the Companies Act, 2013 and rules made thereunder for the time being in force. The break-up of the pay scale and employer's contribution to PF, pension scheme, medical expenses, club fees, other non-monetary benefits etc. shall be decided and approved by the Board on the recommendation of the Committee and approved by the shareholders and the Central Government, wherever required.
(b) Variable Pay
The Managerial Personnel shall be eligible to a performance linked incentives as may be determined by the Board from time to time.
The Managerial Personnel may be paid commission, if approved by the shareholders. The shareholders may authorise the Board to declare commission to be paid to any Managerial Personnel of the Board.
(d) Minimum Remuneration
If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Managerial Personnel in accordance with the provisions of Schedule V of the Companies Act, 2013 and if it is not able to comply with such provisions, with the previous approval of the Central Government.
(e) Provisions for excess remuneration
If any Managerial Personnel draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Act or without the prior sanction of the Central Government, where required, he / she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government.
(f) The remuneration to Company Secretary, Chief Financial Officer, Senior Management Personnel and other employees shall be governed by the HR Policy of the company.
2.3 Remuneration to Non- Executive / Independent Director
The remuneration shall be in accordance with the provisions of the Companies Act, 2013 and rules made thereunder for the time being in force.
(b) Sitting Fees
The Non-Executive / Independent Director may receive fees for attending meetings of the Company. Provided that the amount of such fees shall not exceed Rs. 1 Lac per meeting of the Board or Committee or such amount as may be prescribed under the Act. Additionally, the Non-Executive Directors shall be reimbursed traveling and incidental expenses incurred for attending the meeting.
Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the profits of the Company computed as per the applicable provisions of the Act.
(d) Stock Options
An Independent Director shall not be entitled to any stock option of the Company.
5. Stakeholders Relationship Committee
Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board of Directors of the Company reconstituted and renamed Shareholders'/Investors' Grievances Committee as "Stakeholders Relationship Committee". The Stakeholders Relationship Committee comprises of 3 Directors viz. Mr. C. P Buch, Mr. Milin Mehta and Mr. Udit C. Amin. Mr. C. P Buch, Non-Executive - Independent Director is Chairman of the Stakeholders' Relationship Committee.
Mr. Chirag K. Shukla, Company Secretary was the Compliance Officer of the Company.
No. of Shareholders' complaints received so far: 16
No. of complaints not solved to the satisfaction of shareholders: Nil
No. of pending complaints: Nil
6. Notes on Directors seeking appointment / re-appointment as © required under Clause 49 VIII (E) of the Listing Agreements entered into with Stock Exchanges
Mr. Chirayu R. Amin retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Mr. Abhijit Joshi and Mr. Sameer Khera, Additional Directors seek appointment at the ensuing Annual General Meeting.
Mr. Chirayu R. Amin (DIN: 00292579) is M.B.A. from U.S.A. Mr. Chirayu R. Amin is the Chairman of the Company, a century old group in India, pioneer in Healthcare/Pharmaceutical Industry. Mr. Chirayu R. Amin was former President of FICCI. He was Vice President of Board of Control of Cricket in India (BCCI) and President of Baroda Cricket Association (BCA). Besides, he is also trustee in hospital and schools of Alembic Group. His presence on the Board has been immensely beneficial to the Company. He was working with the Company as Managing Director since 1983. However, consequent upon demerger of Pharmaceutical Undertaking, he has ceased as Managing Director of the Company and therefore, he will be liable to retire by rotation. He holds Directorships in Alembic Pharmaceuticals Limited, Elecon Engineering Co. Ltd., Elecon EPC Projects Limited, Nirayu Private Limited, Paushak Limited, Quick Flight Limited, Gujarat Flying Club, Shreno Limited, Sierra Investments Limited and Whitefield Chemtech Private Limited. He is a member of Nomination and Remuneration Committee of the Company, Alembic Pharmaceuticals Limited, Paushak Limited and Shreno Limited, Chairman of Corporate Social Responsibility Committee of Alembic Pharmaceuticals Limited, Elecon EPC Projects Limited and Shreno Limited, member of Audit Committee of Elecon Engineering Company Limited and member of Stakeholders Relationship Committee of Elecon Engineering Company Limtied and Shreno Limited. Mr. Chirayu R. Amin is the spouse of Mrs. Malika C. Amin and father of Mr. Udit C. Amin, Directors of the Company.
Mr. Abhijit Joshi (DIN: 06568584) has done his Masters in Organic Chemistry and Production Management. He has vast experience of 34 years in the fields of Basic Research, Tech-transfer, Production and Manufacturing site administration, etc. He has worked with various well known Indian as well as Multinational Companies in pharmaceutical space. He is the Whole-time Director of Paushak Limited and is member of Stakeholders Relationship Committee of Paushak Limited. He does not hold any shares in the Company.
Mr. Sameer Khera (DIN: 00009317) graduated in Mechanical Engineering from M. S. University in Vadodara. Since completing his post-graduation in Manufacturing Management from SPJIMR Mumbai, he has been Managing Director at SEE Linkages Pvt. Ltd. He has experience of more than 20 years in Strategy and Business Development, International Business, Operations and Systems. He is also a founder trustee at SEE Foundation which supports projects in educare and healthcare space with a focus on the girl child. He holds Directorships in Eclipse Global Private Limited. He does not hold any shares in the Company.
(i) Related Party Transactions
There is no materially significant related party transaction that may have potential conflict with the interest of the Company at large.
The Board has approved a policy for related party transactions which has been uploaded on the Company’s website. The web-link as required under Listing Agreements is as under:
There was no non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchanges or
SEBI or any statutory authority on any matter related to capital markets, during the last three years.
(iii) Whistle Blower Policy
In terms of Clause 49 of the Listing Agreements, the Company has established vigil mechanism for directors, employees and other stakeholders to report concerns about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct or ethical policy.
The Whistle Blower Policy is placed on the website of the Company and weblink to the same is as under:
The Company has provided opportunities to encourage employees to become whistle blowers. It has also ensured a mechanism within the same framework to protect them from any kind of harm. It is hereby affirmed that no personnel has been denied access to the Audit Committee.
(iv) Details of Compliance with Mandatory requirements and adoption of Non-mandatory requirements of this clause
The Companies complies with all the mandatory requirements of Clause 49 of the Listing Agreement on Code of Corporate Governance.
a) Office for non-executive Chairman at company's expense: Not Applicable
b) Half-yearly declaration of financial performance to each household of shareholders: Not complied
c) Audit Qualifications: Complied as there are no audit qualifications
d) Separate posts of Chairman & CEO: Complied
e) Reporting of Internal Auditors directly to Audit Committee: Complied
(v) Independent Directors' Meeting
During the year under review, the Independent Directors met on 22nd January, 2015, inter alia, to discuss:
• Evaluation of the performance of Non Independent Directors and the Board of Directors as a whole;
• Evaluation of the performance of the Chairman, taking into account the views of the Executive and Non-Executive Directors;
• Evaluation of quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All Independent Directors were present at the Meeting.
(vi) Familiarisation program for Independent Directors
The Company has conducted the Familiarisation program for Independent Directors during the year. The details for the same have been disclosed on the website of the Company at <http://www.alembiclimited.com/Familiarisation-Program.pdf>
(vii) Shareholding of Non-Executive Directors
Mr. Chirayu R. Amin holds 90,42,930 Equity Shares of the Company, Mrs. Malika C. Amin holds 60,11,460 Equity Shares and R. M. Kapadia holds 18,000 equity shares of the Company. No other Non-executive Director hold, any shares in the Company.
(viii) Disclosure of relationships between directors inter-se
Mr. Chirayu R. Amin, Chairman is the spouse of Mrs. Malika C. Amin and father of Mr. Udit C. Amin, Director & President - Operations. No other Director of the Company is related to any other Director.
(ix) Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place a Policy on prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year, the Company has not received any complaint.
Means of Communication
Quarterly Results_: Published in newspapers
¦ Which Newspapers wherein results normally published
The Indian Express (English),
The Financial Express(Gujarati) or any other leading newspaper
¦ Any web-site, where displayed
¦ Whether it also displays official news releases and
¦ The presentations made to institutional investors or to the analysts
1. Annual General Meeting
Date, Time and Venue
12th August, 2015 at 12.30 p.m.
"Sanskruti", Alembic Corporate Conference Centre, Opp. Pragati Sahakari Bank Ltd., Alembic Colony, Vadodara - 390 003.
2. Financial year
3. Date of Book Closure
5th August, 2015 (Wednesday) to 12th August, 2015 (Wednesday) both days inclusive.
4. Dividend Payment Date
On or before 19th August, 2015.
5. Listing on Stock Exchanges
BSE Ltd. (BSE), Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001. National Stock Exchange of India Limited (NSE), Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.
6. Stock Code
BSE (506235) NSE (ALEMBICLTD)
7. Registrar and Share Transfer Agents
Link Intime India Pvt. Limited
B-102 & 103, Shangrila Complex, First Floor, Opp. HDFC Bank, Near Radhakrishna Char Rasta, Akota, Vadodara - 390020
Tel: (0265) 2356573, 2356794 Fax: (0265) 2356791 Email: email@example.com
8. Share Transfer System
Share transfers are registered and returned within a period of fifteen days from the date of receipt, if documents are accurate in all respects.
Stakeholders' Relationship Committee has delegated powers to Registrar and Transfer Agent to effect transfer/transmission, name deletion, renewal of shares, duplicate, etc.
The total number of shares transferred in the physical form during the year were 2,02,805 (previous year 1,04,150).
9. Dematerialisation of Shares and Liquidity
At the end of the year 25,74,77,763 shares (96.42%) are held in dematerialised form by the shareholders (ISIN Code: INE426A0I027).
10. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity
11. Plant Locations
a) Alembic Road, Vadodara -390 003.
b) Wind Mills at village Ukharla/Trambak, Taluka-Ghoga, Dist. Bhavnagar, Gujarat.
c) Construction projects: Chhani, Vadodara
12. Investor Correspondence
1. Link Intime India Pvt. Limited
B-I02 & I03, Shangrila Complex, First Floor, Opp. HDFC Bank, Near Radhakrishna Char Rasta,
Akota, Vadodara-390020 Tel:(0265) 2356573, 2356794 Fax:(0265) 2356791
2. The Company Secretary & Compliance Officer
Alembic Road, Vadodara -390003.
Designated email id for shareholders' grievances:
Designated email id for shareholders’ grievances: