REPORT ON CORPORATE GOVERNANCE
COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
Your Company believes that Corporate Governance is a prerequisite for attaining sustainable growth in this competitive world. Asian Paints' philosophy on Corporate Governance is based on transparency and accountability and has been a part of the organizational culture of your Company for the past seventy years. In recent times, governance has been further strengthened within the organization by introduction of incremental changes to various policies and processes. Your Company has achieved sustainable growth by being a responsible and well-governed corporate, while exceeding the expectations of all stakeholders. It is your Company's unending mission to regularly nurture and develop steadfast professionalism, astute accountability and increased disclosures by taking all steps necessary towards superior growth in its value for its stakeholders.
The Securities and Exchange Board of India ("SEBI") on 2nd September, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "Listing Regulations") with an aim to consolidate and streamline the provisions of the Listing Regulations for different segments of capital markets to ensure better enforceability. The Listing Regulations were effective from 1st December, 2015 . Accordingly, all listed entities were required to enter into the Listing Agreement within 6 (six) months from the effective date. Your Company has entered into Listing Agreement with BSE Limited and the National Stock Exchange of India Limited during the month of February, 2016.
A report on compliance with the principles of Corporate Governance as prescribed by SEBI in Chapter IV read with Schedule V of Listing Regulations is given below:
Asian Paints' governance structure comprises of Board of Directors, its Committees and the Management.
At Asian Paints, the Board is at the core of the Corporate Governance practice. Your Company has an optimum mix of eminent personalities on the Board of Directors with members from diverse experience and expertise. Out of 14 members on its Board, 7 (seven) are Independent Directors, 6 (six) are Non-Executive / Promoter Directors and 1 (one) is Managing Director & CEO. This appropriate composition of the Board of Directors enables in maintaining the independence of the Board and separates its functions of governance and management. Over a period of time, the Board has fostered a culture of leadership to sustain your Company's growth with a long-term vision and ingenious policy to improve the degree of Corporate Governance.
Committees of the Board:
The Board has constituted various Committees with an optimum representation of its members and has assigned them specific terms of reference in accordance with the Companies Act, 2013 and the Listing Regulations. These Committees hold meetings at such frequency as is deemed necessary by them to effectively undertake and deliver upon the responsibilities and tasks assigned to them. Your Company currently has 6 (six) Committees of the Board viz., Audit Committee, Stakeholders' Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee and Shareholders' Committee.
The management structure of your Company comprises of the Executive Council and Operating Council which have been constituted to drive strategic initiatives of your Company, strengthen effectiveness of interface areas, bring in agility, multi-dimensional perspective and responsiveness within the organisation and to strengthen the capabilities to enhance value creation.
Managing Director & CEO:
The overall management of the affairs of your Company is entrusted to the Managing Director & CEO who functions under the direct supervision of the Board of Directors and also leads the Executive Council. He spearheads the strategic directions, lays down policy guidelines and ensures implementation of the decisions of the Board and its various Committees.
Executive Council (EC):
The EC comprises of the heads of different functions of the organisation. The members of the EC report to the Managing Director & CEO. This Council is entrusted with the initiatives pertaining to the strategies and vision of your Company, Risk Management, Financial Accounting & Reporting, and Corporate Governance. The EC meets on a regular basis to discuss on various matters including effectiveness of the businesses / functions which report to them.
Operating Council (OC):
The OC consists of heads of functions / businesses within your Company who report to the EC members. The OC members lead the identified strategic initiatives, they deliberate on the efficiency and effectiveness of the day-to-day operations, capability building within your Company to service customers and other stakeholders.
The effective functioning of the EC and OC has led to increased holistic connection within the organisation.
BOARD OF DIRECTORS
The composition of the Board is in conformity with Regulation 17 of the Listing Regulations as well as the Companies Act, 2013. The Board of Directors is chaired by a Non-Executive / Promoter Chairman and has an optimum combination of Executive, NonExecutive and Independent Director
Number of Board Meetings:
During the financial year 2015-16, 8 (eight) meetings of the Board of Directors were held and the maximum time gap between two meetings did not exceed one hundred and twenty days. The Board meets at least once in each quarter to review the quarterly financial results and other items on the Agenda. Additional meetings are held whenever necessary. The dates of the Board meetings are as under
All the Directors have periodically and regularly informed the Company about their Directorship and Membership on the Board/Committees of the Board of other companies. As per the disclosure received, none of the Directors of your Company hold memberships/Chairmanships more than the prescribed limits across all companies in which he/she is a Director
The dates for meetings of the Board of Directors and its Committees are scheduled in advance and published as a part of the Annual Report. Your Company also provides video -conferencing facility to its Directors to enable their participation. The Agenda and the explanatory notes are circulated well in advance to the Directors in accrodance with the Secretarial Standards.
The Managing Director & CEO and the members of the EC / OC make presentations to the Board on matters including but not limited to the Company's performance, operations, plans, etc. The Board has complete access to any information within your Company which includes the information as specified in Regulation 17 of the Listing Regulations. Regular updates provided to the Board, inter alia, include:
• Annual operating plans and budgets and any updates;
• Capital budgets and any updates;
• Quarterly financial results for your Company and its operating divisions or business segments;
• Minutes of meetings of Committees of the Board of Directors;
• The information on recruitment and remuneration of Senior Management Personnel just below the level of Board of Directors, including appointment or removal of Chief Financial Officer and the Company Secretary;
• Show cause, demand, prosecution and penalty notices, which are materially important;
• Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems;
• Any material defaults in financial obligations to and by the Company;
• Any issue, which involves possible public or product liability claims of substantial nature;
• Details of any joint venture or collaboration agreement;
• Transactions that involve substantial payment towards goodwill, brand equity or intellectual property;
• Any significant labour problem involving human resource management;
• Sale of a material nature, or of investments, subsidiaries and assets which are not part of the normal course of business;
• Details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material;
• Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as nonpayment of dividend, delay in share transfer; and
• Any other information which is relevant for decision making by the Board.
The draft minutes of the Board and its Committees are sent to the members for their comments and then the minutes are entered in the minutes book within 30 days of the conclusion of the meeting.
Evaluation of the Board Effectiveness:
In terms of applicable provisions of the Companies Act, 2013 read with Rules framed thereunder and Part D of Schedule II of the Listing Regulations and on the recommendation of the Nomination and Remuneration Committee, the Board of Directors has put in place a process to formally evaluate the effectiveness of the Board, its Committees along with performance evaluation of each Director to be carried out on an annual basis.
Accordingly, the annual performance evaluation of the Board, its Committees and each Director was carried out for the financial year 2015-16.
Structured questionnaires were prepared to evaluate the performance of the Board as a whole, individual performance of each Director and self - assessment carried out by the Directors. These assessment sheets with respect to the evaluation of the performance of the Directors were based on various aspects which, inter alia,included assessment of the level of participation, understanding of the role and responsibilities, understanding of the business and competitive environment, effectiveness of the contributions made during the Board meetings, understanding of the strategic issues and challenges for your Company etc. In assessing the overall performance of the Board, the parameters included the assessment of time devoted by the Board on the Company's long term goals and strategies, Board effectiveness, quality of discussions at the meetings of the Board, time spent and quality of discussions on key subjects like risk assessment and minimization, succession planning, discharging fiduciary and governance duties and performance of specific duties.
The questionnaires for assessing the performance of the Committees of the Board included aspects like understanding of the terms of reference by the Committee members, adequacy of the composition of the Committees, effectiveness of the discussions at the Committee meetings, information provided to the Committee to discharge its duties, performance of the Committee vis-a-vis its responsibilities, etc.
The Chairman of the Nomination and Remuneration Committee plays a vital role in undertaking the evaluation of performance for the Board and the Directors. The Nomination and Remuneration Committee discussed on the evaluation mechanism, outcome and the feedback received from the Directors. The Independent Directors at their meeting also discussed the performance of the Non-Executive/Promoter Directors including the Chairman of the Board.
The Board of Directors at its meeting held on 11th May, 2016, has noted the overall feedback on the performance of the Directors and the Board as a whole and its Committees.
The overall outcome of this exercise to evaluate effectiveness of the Board and its Committees was positive and members expressed their satisfaction.
The Independent Directors of your Company have been appointed for a tenure of 5 (five) years upto 31st March, 2019. Their appointment was approved by the shareholders of your Company at their AGM held on 26th June, 2014. The Independent Directors have submitted declarations that they meet the criteria of Independence laid down under the Companies Act, 2013 and the Listing Regulations and have confirmed that they do not hold directorship more than the prescribed limit in the Listing Regulations. Your Company has also issued formal appointment letters to all the Independent Directors in the manner provided under the Companies Act, 2013. A sample letter of appointment is available on the website of your Company and can be accessed through the following link: <https://www.asianpaints.com/pdfs/company-info/aboutus/> independent-dir-appointmentletter.pdf
Independent Directors' Meeting:
During the year under review, the Independent Directors met on 3rd March, 2016, without the attendance of Non-Independent Directors and members of the management, inter alia, to discuss on the following:
• To review the performance of the Non-independent Directors and the Board as a whole;
• Review the performance of the Chairperson of your Company, taking into account views of Executive / NonExecutive Directors; and
• Assess the quality, quantity and timeliness of flow of information between your Company's management and the Board that was necessary for the Board to effectively and reasonably perform their duties.
Your Company has in place a structured induction and familiarization programme for all its Directors including the Independent Directors. Your Company through such programmes familiarizes not only the Independent Directors but any new appointee on the Board with a brief background of your Company, their roles, rights, responsibilities, nature of the industry in which it operates, business model operations, ongoing events, etc. They are updated on all business related issues and new initiatives. They are also informed of the important policies of your Company including the Code of Conduct for Directors and Senior Management Personnel and the Code of Conduct for Prevention of Insider Trading.
Brief details of the familiarization programme are uploaded on the website of your Company and can be accessed through the following link: <https://www.asianpaints.com/content/dam/asianpaints/> website/secondary-navigation/investors/policies-programs/ familiarisation-programme-for-independent-directors.pdf
COMMITTEES OF THE BOARD AUDIT COMMITTEE
The Audit Committee is, inter alia,entrusted with the responsibility to monitor the financial reporting, audit process, determine the adequacy of internal controls, evaluate and approve transactions with related parties, disclosure of financial information and recommendation of the appointment of Statutory Auditors.
The composition of the Audit Committee is in alignment with provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations. The members of the Audit Committee are financially literate and have experience in financial management. The Committee invites the Managing Director & CEO, CFO & Company Secretary and President -Industrial JVs, Vice President - Finance, Statutory Auditor and Chief Internal Auditor to attend the meetings of the Committee. The Audit Committee meets the Statutory Auditors and the Chief Internal Auditor independently without the management at least once in a year.
Shri Jayesh Merchant acts as Secretary to the Committee.
The Audit Committee, during the financial year 2015-16, has approved related party transactions along with granting omnibus approval in line with the Policy of dealing with Related Party Transactions and the applicable provisons of the Companies Act, 2013 and the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
The composition of the Audit Committee of the Board of Directors of the Company along with the details of the meetings
The Chairman of the Audit Committee was present at the last
AGM held on 3rd July, 2015.
The Audit Committee is empowered, pursuant to its terms of reference and its role, inter alia, includes the following:
1. Overseeing your Company's financial reporting process and the disclosure of its information to ensure that the financial statements are correct, sufficient and credible;
2. Reviewing with the management quarterly, half-yearly, nine-months and annual financial statements, standalone as well as consolidated before submission to the Board for approval;
3. Reviewing the Management Discussion and Analysis of the financial condition and results of operations;
4. Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the Board for approval, with particular reference to:
a. Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report as per Sec 134(3)(c) of the Companies Act, 2013;
b. Changes in the accounting policies and practices and the reasons for the same, major accounting entries involving estimates based on the exercise of judgment by management and significant adjustments made in the financial statements arising out of audit findings;
c. Compliance with the Listing Regulations and other legal requirements relating to financial statements;
d. Disclosure of any related party transactions; and
e. Qualifications in the draft audit report, if any
5. Reviewing the financial statements of unlisted subsidiary companies (including joint ventures) and investments made by the unlisted subsidiary companies (including joint ventures);
6. Reviewing and considering the following w.r.t. appointment of auditors before recommending to the Board:
(a) qualifications and experience of the individual/ firm proposed to be considered for appointment as auditor;
(b) whether such qualifications and experience are commensurate with the size and requirements of the company; and
(c) giving due regard to any order or pending proceeding relating to professional matters of conduct against the proposed auditor before the Institute of Chartered Accountants of India or any competent authority or any Court.
7. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor, fixing of audit fees and approving payments for any other service;
8. Discussion with the statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
9. Reviewing and approving quarterly and yearly management representation letters to the statutory auditors;
10. Reviewing management letters/letters of internal control weaknesses issued by the statutory auditors and ensuring suitable follow-up thereon;
11. Reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process;
12. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
13. Reviewing the appointment, removal and terms of remuneration of the Chief Internal Auditor of the Company;
14. Formulating in consultation with the Internal Auditor, the scope, functioning, periodicity and methodology for conducting the internal audit;
15. Evaluating the internal financial controls and risk management policies system of the Company;
16. Discussion with the internal auditors on internal audit reports relating to internal control weaknesses and any other significant findings and follow-up thereon;
17. Reviewing the internal investigations by the internal auditors into matters where there is a suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board;
18. Review and comment upon the report made by the statutory auditors (before submission to the Central Government) with regard to any offence involving fraud committed against the company by its officers/employees;
19. Approval or subsequent modification of transactions of the Company with related parties including appointment and revision in remuneration of related parties to an office or place of profit in the Company, its subsidiary company or associate company;
20. Reviewing the statements of significant related party transactions submitted by the management;
21. Reviewing and Scrutinizing the inter-corporate loans and investments;
22. Review of the Whistle Blower mechanism of the Company as per the Whistle Blower Policy. Overseeing the functioning of the same;
23. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
24. Approving the auditors (appointed under the Companies Act 2013) to render any service other than consulting and specialised services;
25. Recommending to the Board of Directors, the appointment, remuneration and terms of appointment of Cost Auditor for the Company;
26. Review the cost audit report submitted by the cost auditor on audit of cost records, before submission to the Board for approval;
27. Appointing registered valuers and defining the terms and conditions for conducting the valuation of assets/net-worth/ liabilities of the Company. Reviewing the valuation report and follow-up thereon;
28. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
29. Looking into reasons for substantial defaults in payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors, if any;
30. Review and approve, policy formulated for determination of material subsidiaries;
31. Review and approve, policy on materiality of related party transactions and also dealing with related party transactions; and
32. Any other matter referred to by the Board of Directors.
NOMINATION AND REMUNERATION COMMITTEE
The role of the Nomination and Remuneration Committee is governed by its Charter and its composition is in compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations.
The Committee met 5 (five) times during the financial year 2015-16 on 1st May, 2015, 16th May, 2015, 24th September, 2015, 20th October, 2015 and 18th January, 2016. The composition of the Nomination and Remuneration Committee of the Board of Directors of the Company along with the details of the meetings held and attended by the members of the Committee during the financial year 2015-16 is detailed below:
The Chairman of the Nomination and Remuneration Committee was present at the last AGM of your Company.
The Nomination and Remuneration Committee is empowered with the following terms of reference and responsibilities in accordance with the provisions of law and the Nomination and Remuneration Policy:
1. Formulate a criteria for determining qualifications, positive attributes and independence of a director;
2. Recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;
3. Devise a policy on Board Diversity;
4. Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal;
5. Carry out the evaluation of every director's performance and formulate criteria for evaluation of Independent Directors, Board/Committees of Board and review the term of appointment of Independent Directors on the basis of the report of performance evaluation of Independent Directors;
6. Reviewing and recommending to the Board, the remuneration, payable to Directors of your Company; and
7. Undertake any other matters as the Board may decide from time to time.
Policy on Director's appointment and remuneration:
The Nomination and Remuneration Policy provides for appropriate composition of Executive, Non-Executive and Independent Directors on the Board of Directors of your Company along with criteria for appointment and remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of your Company.
Remuneration to the Managing Director & CEO:
The shareholders of your Company at the 68th AGM held on 26th June, 2014 approved the re-appointment of Shri K.B.S. Anand as Managing Director & CEO of your Company for a period of three (3) years commencing from 1st April, 2015 to 31st March, 2018, not liable to retire by rotation. The terms and conditions of his appointment including remuneration payable to him was approved which was in accordance with the provisions of Section 197, 203, Schedule V and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactments thereof, for the time being in force). The details of the Remuneration paid the Managing Directors & CEO are stated in the Form MGT- 9 - Extract of the Annual Return which forms part of the Board's Report in this report.
Review of Performance and Compensation to Senior Management:
The Nomination and Remuneration Committee reviews the performance of the senior management of your Company. The Committee ensures that the remuneration to the Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of your Company and its goals.
Commission to Non - Executive Directors:
The shareholders of your Company at their 68th AGM held on 26th June, 2014 pursuant to Section 197 and other applicable provisions, if any, of the Companies Act, 2013 approved the payment of remuneration to the Non-Executive Directors of your Company by way of commission not exceeding one (1) percent of the net profits of your Company.
Details of remuneration paid to Directors during the year 2015-16:
During the financial year 2015-16, your Company paid 7 50,000 (Rupees fifty thousand only) as sittings fees for attending the Boards/ Audit Committee meetings and 7 30,000 (Rupees thirty thousand only) for attending other Committee meetings (except Shareholders' Committee where no sitting fees were paid) to the Non-Executive Directors of your Company.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
The composition of the Stakeholder Relationship Committee is in compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 20 of the Listing Regulations.
The Committee met 4 (four) times during the financial year 2015-16 on 20th October, 2015, 8th January 2016, 14th March, 2016 and 21st March, 2016. The constitution of the Stakeholders Relationship Committee of the Board of Directors of your Company along with the details of the meetings held and attended by the members of the Committee during the financial year 2015-16 is detailed below:
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The composition of the CSR Committee is in alignment with provisions of Section 135 of the Companies Act, 2013.
The Committee met 4 (four) times during the financial year 2015-16 on 16th July, 2015, 20th October, 2015, 8th January, 2016 and 21st March, 2016. The constitution of the CSR Committee of the Board of Directors of your Company along with the details of the meetings held and attended by the members of the Committee during the financial year 2015-16 is detailed below:
The CSR Committee is empowered, pursuant to its terms of reference, inter alia, to:
1. Recommend the amount of expenditure to be incurred on the activities;
2. Monitor implementation and adherence to the CSR Policy of the Company from time to time
. Prepare a transparent monitoring mechanism for ensuring implementation of the projects/programmes/ activities proposed to be undertaken by the Company; and
4. Such other activities as the Board of Directors may determine from time to time.
The details of the CSR initiatives of your Company form part of the CSR Section in the Annual Report. The CSR Policy has been placed on the website of your Company and can be accessed through the following link:
<https://www.asianpaints.com/content/dam/asianpainte/website/> secondary-navigation/about-us/corporate-citizenship/CSR%20 Policy.pdf
During the financial year 2015-16, the Shareholders' Committee met 10 (ten) times. The composition of the Shareholders' Committee of your Company along with the details of the meetings held and attended by the members of the Committee during the financial year 2015-16 is detailed below
The terms of reference of the Shareholders' Committee are as follows:
• To issue duplicate share certificates as and when the requests are received by the Company;
• To approve the register of members as on the record date(s) and/or book closure date(s) for receiving dividends and other corporate benefits;
• To review correspondence with the shareholders vis-a-vis legal cases and take appropriate decisions in that regard; and
• To authorise affixing of the Common seal of the Company from time to time on any deed or other instrument requiring authentication by or on behalf of the Company.
Further, the Board of Directors has authorised certain officials of your Company to approve the requests relating to transfer of shares, transmission of shares or requests for deletion of name of the shareholder, etc.
Shri Jayesh Merchant acts as Secretary to the Committee.
RISK MANAGEMENT COMMITTEE
The Board of Directors has constituted a Risk Management Committee and defined its roles and responsibilities in accordance with the provisions of Regulation 21 of the Listing Regulations.
The Risk Management Committee has met twice (2) during the financial year 2015-16 on 17th August, 2015 and 15th February, 2016. The composition of the Risk Management Committee of the Board of Directors of your Company along with the details of the meetings held and attended by the members of the Committee during the financial year ended 31st March, 2016 is detailed below:
Shri Jayesh Merchant acts as Secretary to the Committee.
The Committee's terms of reference, among other things, include framing a risk management policy and identify Company's risk appetite set for various elements of risk, review the risk management practices and structures and recommend changes to ensure their adequacy, approve and review the risk treatment plans put in place by management and ensure adequacy of risk management practices in the Company.
The Risk management policy of your Company, formulated by the Committee and approved by the Board states the Company's approach to address uncertainties in its endeavors to achieve its stated and implicit objectives. It prescribes the roles and responsibilities of various stakeholders within your Company, the structure for managing risks and the framework for risk management.
This policy and the Internal Financial Controls comprehensively address the key strategic/business risks and operational risks respectively.
Your Company does not have any material non-listed Indian subsidiary company in terms of Regulation 16 of the Listing Regulations. A synopsis of the minutes of the Board meetings of the subsidiary companies are placed at the Board meeting of your Company on periodical basis. The Audit Committee reviews the financial statements including investments by the unlisted subsidiaries of your Company
The Policy for determining "material" subsidiaries has been placed on the website of your Company and can be accessed through the following link:
RELATED PARTY TRANSACTIONS
All transaction entered into by your Company with related parties, during the FY 2015 - 16, were in ordinary course of business and on arm's length basis. The details of the related party transactions are set out in the Notes to Financial Statements forming part of this Annual Report.
Also, the Related Party Transactions undertaken by your Company were in compliance with the provisions set out in the Companies Act, 2013 and Regulation 23 of the Listing Regulations.
The policy on related party transactions has been placed on the Company's website and can be accessed through the following link: <https://www.asianpaints.com/more/investors/policies-programs>. html
Employees, who are relatives of the Directors, holding an office or place of profit in the Company pursuant to Section 188 of the Companies Act, 2013
The following are the details of the remuneration payable to the employees of your Company, who are relatives of Directors, holding office or place of profit in the Company as on 31st March, 2016:
In terms, of Section 177, 188 and other applicable provisions, if any, of the Companies Act, 2013 read with the Rules issued thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) the appointment and remuneration payable to the aforesaid is approved by the Audit Committee and noted by the Board of Directors of the Company and are at arm's length and in ordinary course of business of your Company.
Directors with materially significant, pecuniary or business relationship with your Company:
There is no pecuniary or business relationship between the Non-Executive/Independent Directors and your Company, except for the commission payable to them annually in accordance with the applicable laws and with the approval of the shareholders. A declaration to this effect is also submitted by all the Directors at the beginning of each financial year.
As required under Regulation 17 of the Listing Regulations, the CEO/CFO certificate for the financial year 2015 - 16 signed by Shri K.B.S. Anand, Managing Director & CEO and Shri Jayesh Merchant, CFO & Company Secretary, President - Industrial JVs, was placed before the Board of Directors of your Company at their meeting held on 11th May, 2016.
Procedure for Postal Ballot:
In compliance with Sections 108, 110 and other applicable provisions of the Companies Act, 2013 read with the Rules issued thereunder, your Company provided electronic voting (e-voting) facility to all its members. The Company engages the services of NSDL for the purpose of providing e-voting facility to all its members. The members have the option to vote either by physical ballot or through e-voting.
Your Company dispatches the postal ballot notices and forms along with postage prepaid business reply envelopes to its members whose names appear on the Register of Members / list of beneficiaries as on cut - off date. The postal ballot notice is sent to members in electronic form to the email addresses registered with the depository participants / Company's Registrar & Share Transfer Agents. Your Company also publishes a notice in the newspapers declaring the details of completion of dispatch and other requirements under the Companies Act, 2013 and the Rules issued there under.
Voting rights are reckoned on the paid up value of shares of your Company in the names of the shareholders as on the cut - off date. Members desiring to vote through physical ballot are requested to return the forms, duly completed and signed to as to reach the Scrutinizer before the close of the voting period. Members desiring to exercise their votes by electronic mode are requested to vote before the close of business hours on the last date of e-voting.
The Scrutinizer submits his report to the Chairman, after the completion of scrutiny and the consolidated results of the voting by postal ballot are then announced by the Chairman / authorized officials of your Company. The results are displayed on the website of your Company (www.asianpaints.com), besides being communicated to the Stock Exchanges and Registrar & Transfer Agents.
1. There are no materially significant related party transactions of your Company which have potential conflict with the interests of the Company at large.
2. Your Company has complied with all the requirements of the Stock Exchange(s) and the SEBI on matters related to Capital Markets. There were no penalties imposed or strictures passed against your Company by the statutory authorities in this regard.
3. Vigil Mechanism and Whistle Blower Policy:
• Your Company believes in conducting its business and working with all its stakeholders, including employees, customers, suppliers, shareholders and business associates in an ethical and lawful manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour;
• Your Company prohibits any kind of discrimination, harassment, victimization or any other unfair practice being adopted against an employee and/or a business associate. In accordance with Regulation 22 of the Listing Regulations your Company has adopted a Whistle Blower Policy with an objective to provide its employees and Business Associates a framework and to establish a formal mechanism or process whereby concerns can be raised in line with your Company's commitment to highest standards of ethical, moral and legal business conduct and its commitment to open communication;
• In accordance with the Policy, an Ethics Committee has been constituted comprising of the Managing Director & CEO, the Compliance Officer and the Vice - President - Human Resources for the purpose of receiving and investigating all complaints and Protected Disclosures under this policy. Employees of your Company or business associates can make Protected Disclosures to the Ethics Committee through the Asian Paints Ethics Hotline (toll free number/ web reporting facility) and/ or any other written or oral means of communication. The employees may, where the matters are of grave nature, make Protected Disclosures directly to the Chairperson of the Audit Committee of the Board of Directors of the Company; and
• No personnel was denied access to the Audit Committee of your Company.
4. Code of Conduct
Your Company has adopted a Code of Conduct for all the employees including the Board Members and Senior Management Personnel of your Company in accordance with the requirement under Regulation 17 of the Listing Regulations. The Code of Conduct has been posted on the website of your Company. All the Board Members and the Senior Management Personnel have affirmed their compliance with the said Code of Conduct for the financial year 2015-16. The declaration to this effect signed by Shri K.B.S. Anand, Managing Director & CEO of the Company forms part of the Report.
5. Code of Conduct to Regulate, Monitor and Report Trading by Insiders:
During the year, Asian Paints' Code of Conduct to Regulate, Monitor and Report Trading by Insiders was approved by the Board at their meeting held on 18th May, 2015 and subsequently amended on 18th January, 2016 to conform to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code has been made applicable to cover Directors, Senior Management Personnel, persons forming part of Promoter(s)/ Promoter group(s) and such other designated employees of the Company, who are expected to have access to unpublished price sensitive information relating to the Company ("Designated Persons"). The Designated Persons are restricted in purchasing, selling and dealing in the shares of the Company while in possession of unpublished price sensitive information about the Company as well as during certain periods known as "Quiet Period". The Designated Persons are also restricted from entering into opposite transaction, i.e., buy or sell any number of shares during the next six months following the prior transaction and also are restricted from taking any position in derivative transactions in the shares of the Company at any time. The processes to be followed under the Code of Conduct has been automated by the Company and the Designated Persons are using the same.
6. The Board:
The Non - Executive Chairman of your Company has been provided a Chairman's Office at the Registered Office of your Company.
7. Shareholder Rights:
Half-yearly results of your Company are sent to all shareholders of your Company and additionally, your Company uploads its quarterly results on its website (www.asianpaints.com).
Your Company makes presentations to Institutional Investors and Equity Analysts on the Company's performance on a periodic basis which are also available on the website of your Company.
8. Audit qualifications:
During the year under review, there was no audit qualification on your Company's financial statements.
9. Separate posts of Chairman and CEO:
The Chairman of the Board is a Non-executive Director and his position is separate from that of the Managing Director & CEO.
10. Reporting of Internal Auditor:
The Internal Auditor reports to the Managing Director & CEO and has direct access to the Audit Committee and he participates in the meetings of the Audit Committee of the Board of Directors of your Company and presents his internal audit observations to the Audit Committee.
MEANS OF COMMUNICATION
1. Publication of quarterly results:
Quarterly, half-yearly and annual financial results of the Company were published in leading English and vernacular language newspaper, viz., Business Standard and Maharashtra edition of Punyanagari and Mumbai editions of Free Press Journal and Navshakti newspapers.
2. Website and News Releases:
In compliance with Regulation 46 of the Listing Regulations, a separate dedicated section under 'Investors' on the Company's website gives information on various announcements made by the Company, status of unclaimed dividend, stock quotes, Annual Report, Quarterly/Half-yearly/Nine-months and Annual financial results along with the applicable policies of the Company. Your Company's official news releases and presentations made to the institutional investors and analysts are also available on the Company's website.
3. Stock Exchange:
Your Company makes timely disclosures of necessary information to BSE Limited and the National Stock Exchange of India Limited in terms of the Listing Regulations and other rules and regulations issued by the SEBI.
4. NEAPS (NSE Electronic Application Processing System), BSE Corporate Compliance & the Listing Centre:
NEAPS is a web-based application designed by NSE for corporates.
BSE Listing is a web-based application designed by BSE for corporates.
All periodical compliance filings, inter alia, shareholding pattern, Corporate Governance Report, corporate announcements, amongst others are in accordance with the Listing Regulations filed electronically.
5. Reminders to Investors:
Reminders to shareholders for claiming returned undelivered share certificates, unclaimed dividend are regularly dispatched.
GENERAL SHAREHOLDER INFORMATION
Annual General Meeting
Date : Tuesday, 28th June, 2016
Time : 11.00 a.m.
Venue : Yashwantrao Chavan Pratishthan Auditorium, Y. B. Chavan Centre, General Jagannath Bhosle Marg, Next to Sachivalaya Gymkhana, Mumbai - 400 021
(ii) Financial Calendar
Financial year : 1st April to 31st March
Tentative Schedule for declaration of results during the financial year 2016-17
First Quarter : On or around 27th July, 2016
Second Quarter and Half Yearly : On or around 25th October, 2016
Third Quarter and Nine Months : On or around 23rd January, 2017
Fourth Quarter and Annual : On or around 11th May, 2017
(iii) Date of Book closure : 18th June, 2016 to 28th June, 2016 (both days inclusive)
(iv) Dividend Payment Date :
For interim dividend 2015-16 of 7 2.20 per equity share declared on 23rd October, 2015 : 31st October, 2015
For final dividend 2015-16 recommended by the Board of Directors at its meeting held on 11th May, 2016 : On or after 29th June, 2016 (subject to approval of the shareholders
(vi) Listing on Stock Exchanges
Name of Stock Exchange(s)
BSE Limited (BSE) :
Stock Code(s) 500820
National Stock Exchange of India Limited (NSE)
Stock Code(s) ASIANPAINT
ISIN for Depositories: INE021A01026
Your Company has paid the listing fees to BSE and NSE for the financial year 2015-16.
Source: BSE and NSE website
Note: High and low are in 7 per traded share. Volume is the total monthly volume of trade (in numbers) in Asian Paints Limited's shares on BSE and NSE.
(viii) Performance in comparison to broad-based Indices
The Chart below shows the comparison of your Company's share price movement on BSE vis-a-vis the movement of the BSE Sensex for the year 2015-16 (based on month end closing):
ix) Registrar and Transfer Agent
(w.e.f. 1st April, 2016) TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate, Near Famous Studios, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai - 400 011, Maharashtra, India Tel No.: +91 22 6656 8484 Extn.: 411/412/413 Fax No.: +91 22 6656 8494 e-mail: email@example.com Website: www.tsrdarashaw.com
(x) Share Transfer System
The share transfer activities in respect of the shares in physical mode are carried out by M/s. TSR Darashaw Limited. The shares lodged for transfer are processed and share certificates duly endorsed are returned within the stipulated time, subject to documents being valid and complete in all respects.
The Board of Directors of your Company have delegated the authority to approve the transfer of shares, transmission of shares or requests for deletion of name of the shareholder, etc., to the designated officials of your Company. The transactions requiring issuance of new share certificates are approved by the Shareholder's Committee of the Board of directors of your Company.
A summary of approved transfers, transmissions, deletion requests, etc., are placed before the Board of Directors from time to time as per Listing Regulations. Your Company obtains a half-yearly compliance certificate from a Company Secretary in Practice as required under Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force) and files a copy of the said certificate with BSE & NSE.
(xii) Dematerialization of shares
Shareholders who continue to hold shares in physical form are requested to dematerialize their shares at the earliest and avail of the various benefits of dealing in securities in electronic/ dematerialized form. For any clarification, assistance or information, please contact M/s. TSR Darashaw Limited.
(xiii) Outstanding GDRs/ADRs/Warrants/Convertible Instruments and their impact on equity:
Your Company does not have any outstanding GDRs/ADRs/ Warrants/Convertible Instruments as on 31st March, 2016.
(xiv) Plant Locations:
Lal Bahadur Shastri Marg, Bhandup, Mumbai - 400 078, Maharashtra (Manufacturing activities discontinued w.e.f. 5th May, 2014).
Plot Nos. 2602/ 2702, GIDC Industrial Area, Ankleshwar 393 002, Gujarat.
Plot Nos. 50-55, Industrial Development Area, Phase II,
Patancheru - 502 319 Dist. Medak, Andhra Pradesh.
A-1, UPSIDC Industrial Area, Kasna - II, Kasna Village, Greater Noida, Dist. Gautambudh Nagar - 203 207, Uttar Pradesh.
SIPCOT Industrial Park, Plot No. E6-F13, Sriperumbudur - 602 105, Kancheepuram District, Tamil Nadu.
Plot No. 1, IMT, Sector 30 B, PO Kherisadh Village, Rohtak - 124 027, Haryana.
Plot A1, MIDC, Khandala Industrial Area, Taluka Khandala, Satara - 412 802, Maharashtra.
Taloja Plant: Plot No. 3/ 2, MIDC, Taloja, Raigad - 410 208, Maharashtra.
Phthalic Plant: Plot No. 2702, GIDC Industrial Area, Ankleshwar - 393 002, Gujarat.
Penta Plant: B-5 and 10, Sipcot Industrial Complex, Cuddalore - 607 005, Tamil Nadu.
(xv) Address for Correspondence:
For any queries relating to the shares of your Company, correspondence may please be addressed to M/s. TSR Darashaw Limited at:
6-10, Haji Moosa Patrawala Industrial Estate, Near Famous Studios, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai - 400 011, Maharashtra Tel No.: +91 22 6656 8484 Extn.: 411/412/413 Fax No.: +91 22 6656 8494 e-mail: firstname.lastname@example.org Website: www. tsrdarashaw.com
For the benefit of shareholders, documents will continue to be accepted at the following Registered Office of the Company:
Asian Paints Limited
CIN: L2422MH1945PLC004598 6A, Shantinagar, Santacruz (E), Mumbai - 400 055, Maharashtra Tel. No.: +91 22 6218 1000 Fax No.: +91 22 6218 1111 E-mail: email@example.com Website: www.asianpaints.com
Shareholders are requested to quote their folio no. / DP ID & Client ID, e-mail address, telephone number and full address while corresponding with the Company and its Registrar & Transfer Agent.
(xvi) Addresses of Regulatory Authority/ Stock Exchanges: Securities and Exchange Board of India
Plot No. C4-A, G Block, Bandra Kurla Complex Bandra (East), Mumbai 400 051, Maharashtra Tel.: +91 22 2644 9000 Fax: +91 22 2644 9019-22
National Stock Exchange of India
Exhange Plaza, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051, Maharashtra Tel.: +91 22 2659 8100 Fax: +91 22 2659 8120
Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400 001, Maharashtra Tel.: +91 22 2272 1233 Fax: +91 22 2272 1919
(xvii) National Electronic Clearing System (NECS) for dividend:
The remittance of dividend through Electronic Clearing System has been moved to National Electronic Clearing System (NECS) platform through core banking system effective 1st October, 2009. Accordingly, dividend will be credited to the shareholders' bank account through NECS where complete core banking details are available with the Company. In the event any branch of a bank
has not migrated to core banking system, or where core banking account is not furnished by the shareholder to the Depository/ Company as the case may be, your Company will print details available in its records on the dividend warrants to be issued to the shareholders.
(a) For shares held in physical form:
Investors who would like to avail NECS facility and are holding shares in physical form may send in their NECS Mandate Form, duly filled in to the M/s. TSR Darashaw Limited. The NECS Mandate instruction should be under the signature of the shareholder(s) as per the specimen signature lodged with your Company.
(b) For shares in electronic/ dematerialized form:
Investors holding shares in dematerialized or electronic form may check the details on record with the concerned Depository Participant (DP). Pursuant to the Depository Regulations, your Company is obliged to pay dividend on dematerialized shares as per the details furnished by the concerned DP. The Company or the Registrar & Transfer Agent cannot make any change in such records received from the Depository.
(xviii) Transfer of unclaimed dividend to Investor Education and Protection Fund:
In terms of Sections 205C of the Companies Act, 1956 (including any statutory modification(s) or re-enactment(s) for the time being in force), your Company is required to transfer the amount of dividend remaining unclaimed for a period of seven years from the date of transfer to the unpaid dividend account to the Investor Education and Protection Fund (IEPF). Shareholders are requested to ensure that they claim the dividend(s) from your Company before transfer of the said amounts to the IEPF.