CORPORATE GOVERNANCE REPORT
For the Year ended 31 March, 2016
[Pursuant to Clause 49 of Listing Agreements/Schedule V(C) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("The Regulations")]
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The Corporate Governance at Bharat Gears Limited takes care of overall well-being, sustainability and transparency of the system and takes into account the stakeholders' interest in every business decision. Corporate Governance is a combination of voluntary practices and compliances of laws and regulations leading to effective control and management of the Organization and its valuable resources through effective and transparent business conduct, integrating communication, integrity and accountability towards its stakeholders.
The Company is committed to pursue growth by adhering to the highest national standards of Corporate Governance. The Company's philosophy on Corporate Governance is based on the following principles:
• Lay solid foundations for management.
• Promote ethical and responsible decision-making.
• Structure the Board to add value.
• Encourage enhanced performance.
• Safeguard integrity in financial reporting.
• Respect the right of the shareholders.
• Recognise the legitimate interest of shareholders.
• Remunerate fairly and responsibly.
• Recognise and manage business risks.
• Make timely and balanced disclosures.
• Legal and statutory compliances in its true spirit.
Your Company is following transparent and fair practices of good Corporate Governance and its constant endeavour is to continually improve upon those practices. The Company recognizes communication as key element in the overall Corporate Governance framework and therefore, emphasizes on keeping abreast its stakeholders including investors, lenders, vendors and customers on continuous basis by effective and relevant communication through Annual Reports, quarterly results, corporate announcements and reflecting the same on the Company's official website i.e. www.bharatgears.com
2. BOARD OF DIRECTORS
Your Company has an optimum combination of Executive and Non-Executive Independent Directors on the Board which includes one Woman Director in compliance of Regulation I7(I) of the Regulations (Clause 49 of the erstwhile Listing Agreements). As on 3I March, 20I6, the Board consists of 7 (Seven) members, the Chairman of the Board is an Executive Director and more than half of the strength of the Board consists of Non-Executive Independent Directors. All Non-Executive Independent Directors bring a wide range of expertise and experience to the Board. The Board believes that the current size of the Board is appropriate based on the Company's present requirements.
There is no Nominee Director in the Company.
A brief profile of the members of the Board is also available on the Company's website i.e. www.bharatgears.com
A. Board's definition of Independent Director
Independent Director shall mean a Non-Executive Director, other than a Nominee Director of the Company:
a. who, in the opinion of the Board of Directors, is a person of integrity and possesses relevant expertise and experience;
b. (i) who is or was not a promoter of the Company or its holding, subsidiary or associate Company;
(ii) who is not related to Promoters or Directors in the Company, its holding, subsidiary or associate company;
c. who, apart from receiving Director's remuneration, has or had no material pecuniary relationship with the Company, its holding, subsidiary or associate Company, or their Promoters, or Directors, during the two immediately preceding financial years or during the current financial year;
d. none of whose relatives has or had pecuniary relationship or transaction with the Company, its holding, subsidiary or associate Company, or their Promoters, or Directors, amounting to two per cent or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;
e. who, neither himself/herself nor any of his/her relatives —
(i) holds or has held the position of a Key Managerial Personnel or is or has been employee of the Company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the current financial year;
(ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of —
(A) a firm of Auditors or Company Secretaries in Practice or Cost Auditors of the Company or its holding, subsidiary or associate company; or
(B) any legal or a consulting firm that has or had any transaction with the Company, its holding, subsidiary or associate company amounting to ten per cent or more of the gross turnover of such firm;
(iii) holds together with his relatives two per cent or more of the total voting power of the Company; or
(iv) is a Chief Executive or Director, by whatever name called, of any non-profit organization that receives twenty-five percent or more of its receipts from the Company, any of its Promoters, Directors or its holding, subsidiary or associate Company or that holds two per cent or more of the total voting power of the Company;
(v) is a material supplier, service provider or customer or a lessor or lessee of the Company;
f. is not less than 2I years of age.
The Board of Directors of the Company, vide its resolution dated I6 May, 2007 has decided that the materiality/significance shall be ascertained on the following basis:
• The concept of 'materiality' is relevant from the total revenue inflow and/or outflow from and/or to a particular individual/ body, directly or indirectly, during a particular financial year.
• The term 'material' needs to be defined in percentage. One per cent (I per cent) or more of total turnover of the Company, as per latest audited annual financial statement.
It has been confirmed by all the Independent Directors of the Company that as on 3I March, 20I6, they fulfill the criteria of being "Independent Director" as stipulated under Regulation I6 of the Regulations (Clause 49 of the erstwhile Listing Agreements).
The Table-1 gives Composition of the Board, Attendance record of the Directors at the Board Meetings and at the last Annual General Meeting (AGM); Number of their outside Directorships and their Memberships/Chairmanships in Board Committees.
Aexcluding directorship in Private Limited Companies, alternate directorship, Companies registered under Section 8 of the Companies Act, 20I3 and Foreign Companies.
Bfor the purpose of considering the limit of the Committees on which a Director can serve, all Public Limited Companies, whether listed or not, are included and all other Companies including Private Limited Companies, Foreign Companies and the Companies under Section 8 of the Companies Act, 20I3 are excluded and further, it includes Membership/Chairmanship of Audit Committee and Stakeholders' Relationship Committee only in terms of Regulation 26(I) of the Regulations. None of the Directors of your Company is a Member of more than I0 (Ten) Committees or is the Chairman of more than 5 (Five) Committees across all Public Limited Companies in which they are Directors. The Membership/Chairmanship also includes Membership/Chairmanship in Bharat Gears Limited.
In terms of Regulation 25(I) of the Regulations, none of the Independent Director of the Company holds the position of the Independent Director in more than 7 (Seven) listed Companies, including Independent Directorship in Bharat Gears Limited and any such Director serving as a whole time Director in a listed Company is not serving as an Independent Director in more than 3 (Three) listed Companies including Bharat Gears Limited.
* Resigned with effect from 3I July, 20I5
** Resigned with effect from 29 May, 20I5
CMr. Surinder P. Kanwar is father of Mr. Sameer Kanwar. Mr. Sameer Kanwar has been re-appointed as Joint Managing Director of the Company with effect from 0I June, 20I3 for a period of 5(Five) years.
Apart from this, no other Non-Executive Director is related to any other Director inter-se and has any material pecuniary relationships/ transactions vis-a-vis the Company (other than the sitting fees for attending the Board/Committee meetings).
DMr. V.K. Pargal holds I00 Equity Shares of the Company. No other non-executive independent director holds any shares and convertible instruments.
The terms of appointment of the Directors appointed at the Annual General Meeting of the Company held on 3I July, 20I5 are available on the website of the Company i.e. www.bharatgears.com
In terms of Regulation 25(7) of the Regulations, the Company has adopted a familiarization programme for the Directors that covers familiarizing the Directors about the nature of the industry in which the Company operates, business model of the Company, their roles, rights, responsibilities, and other relevant details by way of:
• Convening of meetings of the Board of Directors of the Company during each financial year at different manufacturing plants of the Company including a visit of the respective plant, direct interaction with the heads of production processes to provide a brief idea to the Directors of the production processes and operations of the Company.
• Circulation of an elaborated note on business operations with regard to the operations and financial position of the Company as at the end of each quarter with the Agenda of each Board Meeting.
• Updating the Directors of any amendments in laws, rules and regulations as applicable on the Company through various presentations at the Board Meeting(s) in consultation with the Statutory Auditors, Internal Auditors and the Secretarial Auditors of the Company likewise the Companies Act, SEBI Laws, Listing Regulations and such other laws and regulations as may be applicable.
The details of familiarization programme during the Financial Year 20I5-I6 are available on the official website of the Company i.e. www.bharatgears.com under the link i.e. <http://bharatgears.com/> documents/details-of-familarisation-programme-for-independent-directors-FYI5-I6.pdf.
B. Board Meetings
During the financial year 20I5-I6, 5 (Five) Board Meetings were held on the following dates. The gap between any two meetings was not more than I20 (one hundred and twenty) days as mandated in Regulation I7(2) of the Regulations (Clause 49 of the erstwhile Listing Agreements):-
• 29 May, 2015;
• 31 July, 2015;
• 29 October, 2015;
• 29 January, 2016; and
• 22 March, 2016
The Company Secretary prepares the agenda and explanatory notes, in consultation with the Chairman and Managing Director, Joint Managing Director and Chief Financial Officer and circulates the same in advance to the Directors. The Board meets at least once every quarter inter alia to review the quarterly results. Additional meetings are held, when necessary. Presentations are made to the Board on the business operations and performance of the Company. The minutes of the proceedings of the meetings of the Board of Directors are noted and the draft minutes are circulated amongst the members of the Board for their perusal. Comments, if any received from the Directors are also incorporated in the minutes, in consultation with the Chairman and Managing Director. The Minutes are signed by Chairman of the Board at the next meeting and signed minutes are circulated amongst the members of the Board for their perusal. Senior management personnel are invited to provide additional inputs for the items being discussed by the Board of Directors as and when considered necessary.
Post Meeting Follow Up System: The Company has an effective post Board Meeting follow up procedure. Action Taken Report on the decisions taken in a meeting are placed at the immediately succeeding meeting for information of the Board.
C. Information supplied to the Board
The Board has complete access to all information with the Company. The information is provided to the Board on regular basis and the agenda papers for the meetings are circulated in advance of each meeting. The information supplied to the Board includes the following, extent to the applicability during the year as per Regulation I7(7) read with Schedule II of the Regulations (Clause 49 of the erstwhile Listing Agreements).
• Annual Operating Plans and Budgets and any updates.
• Capital budgets and any updates.
• Quarterly, Half Yearly and Yearly Results of the Company.
• Minutes of the Meetings of Audit Committee and other Committees of the Board.
The Board periodically reviews the compliance reports of all laws applicable to the Company prepared by the Company along with the declaration made by all the respective departmental heads and by the Chairman and Managing Director regarding compliance with all applicable laws.
3. BOARD COMMITTEES
A. Audit Committee
I. Constitution and Composition
In terms of Regulation I8 of the Regulations, the "Audit Committee" comprises of the following 3 (Three) Non-Executive and Independent Directors, who have financial/accounting acumen to specifically look into internal controls and audit procedures. All the members are financially literate and have accounting and financial management expertise. The Table-2 gives the composition of the Audit Committee and attendance record of members of the Committee:
During the year, Mr. N.J. Kamath (the erstwhile member of Committee) and Dr. Ram S. Tarneja, (the erstwhile Chairman of Committee) ceased to be a member and the chairman of the Committee respectively due to their resignation with effect from 29 May, 20I5 and 3I July, 20I5 respectively. Mr. S.G. Awasthi inducted as a member of the Committee on 23 July, 20I5 and Mr. Rakesh Chopra (the erstwhile member of Committee) designated as the Chairman of the Committee on 3I July, 20I5, accordingly the Audit Committee had been reconstituted. During the tenure of Dr. Ram S. Tarneja and Mr. N.J. Kamath in the Financial Year 20I5-I6, I(One) meeting of the Audit Committee was held on 28 May, 20I5 and both were present at the said meeting.
** 4 (Four) meetings of the Committee held after appointment of Mr. S.G. Awasthi as member of the Committee.
In addition to the Members of the Audit Committee, the Chief Financial Officer, Internal Auditors and the Statutory Auditors attended the meetings of the Committee as invitees. Members held discussions with Statutory Auditors during the meetings of the Committee. The Audit Committee reviewed the quarterly, half-yearly and year to date un-audited and annual audited financials of the Company before submission to the Board of Directors for its consideration and approval. The Committee also reviewed the internal control systems and internal audit reports.
Mr. V.K. Pargal, member of the Audit Committee duly authorized by the Board of Directors of the Company to attend the Annual General Meeting of the Company in the absence of the regular Audit
Committee Chairman was present in the last Annual General Meeting due to absence of Dr. Ram S. Tarneja (the erstwhile Chairman of the Committee) and replied to the queries of the shareholders to their satisfaction.
Mr. Prashant Khattry, Head (Legal) and Company Secretary of the Company acted as Secretary to the Audit Committee Meetings as aforesaid.
II. Audit Committee Meetings
During the year, 5 (Five) meetings of the Audit Committee were held on the following dates in terms of Regulation 18 of the Regulations (Clause 49 of the erstwhile Listing Agreements):
• 28 May, 2015;
• 30 July, 2015;
• 28 October, 2015;
• 29 January, 2016; and
• 22 March, 2016
III. Powers of Audit Committee
The Audit Committee has been empowered with the adequate powers as mandated in Regulation 18 of the Regulations (Clause 49 of the erstwhile Listing Agreements) which includes the following:
1. To investigate any activity within its terms of reference.
2. To seek information from any employee.
3. To obtain outside legal or other professional advice.
4. To secure attendance of outsiders with relevant expertise, if it considers necessary.
IV. Role of Audit Committee
The role of the Audit Committee in terms of Regulation 18 of the Regulations includes the following:
1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
2. Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
3. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors;
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 director's responsibility statement to be included in the board's report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013.
b. changes, if any, in accounting policies and practices and reasons for the same.
c. major accounting entries involving estimates based on the exercise of judgment by management.
d. significant adjustments made in the financial statements arising out of audit findings.
e. compliance with listing and other legal requirements relating to financial statements.
f. disclosure of any related party transactions.
g. modified opinion(s) in the draft audit report.
5. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;
6. 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 utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
7. Reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process;
8. Approval or any subsequent modification of transactions of the Company with related parties;
9. Scrutiny of inter-corporate loans and investments;
10. Valuation of undertakings or assets of the Company, wherever it is necessary;
11. Evaluation of internal financial controls and risk management systems;
12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
13. 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;
14. Discussion with internal auditors of any significant findings and follow up there on;
15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
16. Discussion with 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;
17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
18. To review the functioning of the whistle blower mechanism;
19. Approval of appointment of Chief Financial Officer (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;
20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Audit Committee may also review such matters as may be referred to it by the Board or which may be specified as role of the Audit Committee under amendments, if any, from time to time, to the Listing Regulations, Companies Act and other Statutes.
V. Review of Information by Audit Committee
The Audit Committee reviews the following information:
1. Management Discussion and Analysis of financial condition and results of operations;
2. Statement of significant Related Party Transactions (as defined by the Audit Committee), submitted by Management;
3. Management letters/letters of internal control weaknesses issued by the Statutory Auditors;
4. Internal Audit Reports relating to internal control weaknesses;
5. The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the Audit Committee; and
6. Statement of deviations, if required.
B. Nomination and Remuneration Committee
I. Constitution and Composition
In terms of Section I78 of the Companies Act, 20I3 and Regulation I9 of the Regulations (Clause 49 of the erstwhile Listing Agreements), the Nomination and Remuneration Committee constitutes of following 4 (four) Directors as members. Table-j] gives the composition of the Nomination and Remuneration Committee and the attendance record of the members of the committee.
During the year, Mr. N.J. Kamath (the erstwhile member of Committee) and Dr. Ram S. Tarneja, (the erstwhile Chairman of Committee) ceased to be a member and the Chairman of the Committee respectively due to their resignation with effect from 29 May, 20I5 and 3I July, 20I5 respectively. Mr. S.G. Awasthi
inducted as the Chairman of the Committee on 3I July, 20I5 and Mr. Rakesh Chopra inducted as a member of the Committee on 3I July, 20I5, accordingly the Nomination and Remuneration Committee had been reconstituted. During the tenure of Dr. Ram S. Tarneja and Mr. N.J. Kamath in the Financial Year 20I5-I6, I(One) meeting of the Nomination and Remuneration Committee was held on 28 May, 20I5 and both were present at the said meeting.
2 (Two) meetings of the Committee held after appointment of Mr. S.G. Awasthi as chairman and Mr. Rakesh Chopra as member of the Committee.
Mr. S.G. Awasthi, Mr. V.K. Pargal and Mr. Rakesh Chopra are the Non-Executive Independent Directors and Mr. Surinder P. Kanwar is Chairman and Managing Director of the Company.
II. Nomination and Remuneration Committee Meetings
During the Financial Year 20I5-I6, 3 (Three) meetings of the Nomination and Remuneration Committee were held. Table-4] gives
III. Role of Nomination and Remuneration Committee
The role of the Nomination and Remuneration Committee in terms of the Regulations includes the following:
1. formulation of the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration of the Directors, Key Managerial Personnel and other employees;
2. formulation of criteria for evaluation of performance of Independent Directors and the Board;
3. devising a policy on Board diversity;
4. identifying 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 of Directors their appointment and removal;
5. deciding whether to extend or continue the term of appointment of the Independent Directors, on the basis of the report of performance evaluation of Independent Directors.
Pursuant to Schedule V to the Companies Act, 20I3, in case of no profits or inadequate profits, the Nomination and Remuneration Committee has been empowered to consider, approve and recommend the remuneration of Whole Time Director/Managing Director.
IV. Nomination and Remuneration Policy
Pursuant to the provisions of the Companies Act, 20I3 read with Regulation I9 of the Regulations (Clause 49 of the erstwhile Listing Agreements), the policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management as approved by the Board is available on the website of the Company i.e. www.bharatgears.com
The objectives and purpose of the said policy are:
• To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.
• To determine remuneration based on the Company's size and financial position and trends and practices on remuneration prevailing in peer companies, in the Auto Component industry.
• To carry out evaluation of the performance of Directors, as well as Key Managerial and Senior Management Personnel.
• To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company's operations.
• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
While deciding the remuneration for Directors, Key Managerial Personnel and other employees, the Board and the Nomination and Remuneration Committee takes into consideration the performance of the Company, the current trends in the industry, the qualification of the appointee(s), positive attributes, their independence, expertise, past performance and other relevant factors. The Board/Committee regularly keeps track of the market trends in terms of compensation levels and practices in relevant industries. This information is used to review the Company's remuneration policy from time to time.
V. Policy on Board Diversity
In terms of Regulation I9 of the Regulations, the Nomination and Remuneration Committee formed the policy on Board Diversity to provide for having a broad experience and diversity on the Board. The
VI. Performance Evaluation
In terms of Regulation I7 of the Regulations, the Board of Directors in its meeting held on 22 March, 20I6 evaluated the performance of Independent Directors in terms of criteria of performance evaluation as laid down by Nomination and Remuneration Committee which covers the area relevant to their role as Independent Director in the Company.
During the Financial Year 20I5-I6, a separate meeting of the Independent Directors of the Company was held on 22 March, 20I6 in terms of Regulation 25 of the Regulations.
The Independent Directors in their separate meeting:
i. reviewed the performance of non-independent Directors and the Board as a whole;
ii. reviewed the performance of the Chairperson of the Company, taking into account the views of executive directors and non-executive directors;
iii. assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform
C. Stakeholders' Relationship Committee
In terms of the provisions of the Companies Act, 2013 and Regulation 20 of the Regulations (Clause 49 of the erstwhile Listing Agreements), the "Stakeholders' Relationship Committee" constitutes of following 3 (Three) Directors as members.
The "Stakeholders' Relationship Committee" has been empowered to consider and resolve the grievances of shareholders of the Company including complaints related to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends and other miscellaneous complaints. The said Committee is also authorised to effect transfers/transmissions of Equity Shares/Debentures and other securities and also to issue Duplicate Share Certificates and other securities and matters related or incidental thereto.
During the year, Mr. N.J. Kamath (the erstwhile Chairman of Committee) ceased to be Chairman of the Committee due to his resignation with effect from 29 May, 2015. Mr. S.G. Awasthi inducted as member of the Committee and Mr. Rakesh Chopra (the erstwhile member of the Committee) designated as Chairman of the Committee on 31 July, 2015, accordingly the Stakeholders' Relationship Committee had been reconstituted. During the tenure of Mr. N.J. Kamath in the Financial Year 2015-16, l(One) meeting of the Stakeholders' Relationship Committee was held on 28 May, 2015 and he was present at the said meeting.
* No meeting of the Committee held after appointment of Mr. S.G.
Awasthi as member of the Committee.
Mr. Rakesh Chopra and Mr. S.G. Awasthi are the Non-Executive Independent Directors and Mr. Sameer Kanwar is Joint Managing Director of the Company.
Mr. Rakesh Chopra, member of the Stakeholders' Committee earlier duly authorized by the Board of Directors of the Company to represent the Stakeholders' Relationship Committee was present in last Annual General Meeting and replied to the queries of the shareholders to their satisfaction.
I. Stakeholder's Relationship Committee Meetings
During the Financial Year 20l5-l6, the Committee met l (One) time on 28 May, 20l5 and the Committee took note of status of requests received from the Shareholders for Dematerialisation, Rematerialisation, non-receipt of annual report, non-receipt of declared dividend, Transfers and Transmission of Shares as on 3l March, 20l5.
Mr. Prashant Khattry, Head (Legal) and Company Secretary of the Company acted as Secretary to the Stakeholder's Relationship Committee Meeting as aforesaid.
In order to have speedy disposal of the Shareholders'/Investors' requests for transfer and transmission, a Sub-Committee consisting of the following Directors/Officers of the Company is in place for effecting transfer/ transmission/ split/ consolidation of shares;
a. Mr. Surinder P. Kanwar, Chairman and Managing Director
b. Mr. Sameer Kanwar, Joint Managing Director
c. Mr. Prashant Khattry, Head (Legal) and Company Secretary
Any two of the above are authorised to consider and approve the transfer/transmission/split/consolidation of shares. The Sub-Committee is attending to Share Transfer formalities at least once in a fortnight.
III. Status of Investor Complaints/Requests
No. of Complaints received during financial year 2015-16 NIL
No. of Complaints resolved to the satisfaction of Not Applicable stakeholders during financial year 2015-16
No. of pending requests for share transfers, transmissions, dematerialisations and rematerialisations as on 3l March, 20l6
Particulars No. of Requests No. of Securities
Transfers and Transmissions NIL NIL
Dematerialisations and NIL NIL
D. Corporate Social Responsibility Committee ("CSR Committee")
I. Constitution and Composition
In terms of provisions of Section l35 of the Companies Act, 20l3, the Corporate Social Responsibility Committee ("CSR Committee") constitutes of following 4 (Four) Directors as members to monitor the Corporate Social Responsibility Policy of the Company as approved by the Board and the said policy is available on website of the Company i.e. www.bharatgears.com
II. CSR Committee Meetings
During the Financial Year 20l5-l6, no meeting of CSR Committee was held since the provisions of Section 135 of the Companies Act, 2013 were not applicable on the Company during the year because the Company does not fall under the conditions necessary for complying with CSR provisions. Hence, nil amount required to be spent during the year.
E. Finance Committee
The "Finance Committee" of the Board of Directors of the Company is in existence which has been empowered to take care of the financing and other day to day requirements of the Company. The said Committee is authorised to borrow monies, make loans, issue shares, etc. and matters related or incidental thereto.
4. COMPLIANCE OFFICER
Mr. Prashant Khattry, Head (Legal) and Company Secretary is the Compliance Officer of the Company.
During the financial year 20l5-l6, the members of the Company at their Annual General Meeting held on 3l July, 20l5 approved the appointment of Mr. Rakesh Chopra and Mr. V.K. Pargal as Non-Executive Independent Directors in terms of Section l49 of the Companies Act, 20l3 for a period of 5 (Five) Years upto the conclusion of the 48th Annual General Meeting (AGM) of the Company in the calendar year 2020.
Re-Appointment of existing Non-Executive Rotational Directors
In accordance with the provisions of the Companies Act, l956 and the Articles of Association of the Company, Mr. W.R. Schilha retire by rotation at the ensuing Annual General Meeting. Therefore, in terms of Section l49 of the Companies Act, 20l3, it has been proposed to appoint Mr. W.R. Schilha as Non Executive Independent Director at the ensuing Annual General Meeting (AGM) of the Company for a period of 5 (Five) Years upto the conclusion of the 49th Annual General Meeting (AGM) of the Company in the Calendar year 202l.
As required under Regulation 36 of the Regulations, the information or details pertaining to the Director seeking appointment/re-appointment in the ensuing Annual General Meeting, are furnished below.
8. GENERAL SHAREHOLDERS' INFORMATION
A. Company Registration Details:
The Company is registered under the Registrar of Companies, NCT of Delhi and Haryana.
The Corporate Identification Number (CIN) allotted to the Company by the Ministry of Corporate Affairs (MCA) is L29I30HRI97IPLC034365.
B. Annual General Meeting Details:
The forthcoming AGM of the Company shall be held at II:30 A.M. on Thursday, the 04 August, 20I6 at HUDA Convention Centre, Sector-I2, Faridabad-I2I007, Haryana.
C. Financial Year:
Financial year of the Company commences on 0I April and ends on 3I March. The four Quarters of the Company ends on 30 June, 30 September, 3I December and 3I March respectively.
D. Listing on Stock Exchanges and Stock Code:
The Shares of the Company are listed on the following Stock Exchanges:
1. BSE Limited [BSE] [Stock Code: 505688]
2. National Stock Exchange of India Limited [NSE] [Symbol: BHARATGEAR]
The Annual Listing Fees for the year 20I6-I7 has been paid in advance to the aforesaid Stock Exchanges.
E. Market Price Data:
High and Low prices during each month of Financial Year 20I5-I6 on National Stock Exchange of India Limited and BSE Limited are as under:
The Closing Price represents the price on the last trading day of each month of Financial Year 20I5-I6.
F. Registrar and Transfer Agent:
Link Intime India Private Limited (Formerly known as Intime Spectrum Registry Limited) is the Registrar and Transfer Agent for handling both the share registry work relating to shares held in physical and electronic form at single point. The Share Transfers were duly registered and returned in the normal course within stipulated period, if the documents were clear in all respects.
The Shareholders are therefore advised to send all their correspondences directly to the Registrar and Transfer Agent of the Company at the below mentioned address:
Link Intime India Private Limited 44, Community Centre, 2nd Floor Naraina Industrial Area Phase-l, Near PVR Naraina New Delhi- ll0028 Tel Nos.: 0ll-4l4l0592-94 Fax No.: 0ll-4l4l059l Email: email@example.com
However, for the convenience of Shareholders, correspondence relating to Shares received by the Company are forwarded to the Registrar and Transfer Agent for action thereon.
In terms of Regulation 7 of the Regulations, the Company has filed a compliance certificate with National Stock Exchange of India Limited (NSE) through NSE Electronic Application Processing System (NEAPS) and with BSE Limited (BSE) through BSE Listing Centre duly signed by Mr. Prashant Khattry, Compliance Officer of the Company and the authorized representative of Registrar & Transfer Agent of the Company certifying that all activities in relation to both physical and electronic share transfer facility are maintained by the Registrar & Transfer Agent of the Company.
G. Share Transfer System:
The Shares are accepted for registration of transfer at the Registered Office of the Company in addition to the office of Registrar and Transfer Agent (RTA), Link Intime India Private Limited. Link Intime India Private Limited is fully equipped to undertake the activities of Share Transfers and redressal of Shareholders grievances.
In order to have speedy disposal of the shareholders'/investors' requests for transfer and transmission, a sub-committee consisting of the following directors/officers of the Company is in place for effecting Transfer/Transmission/Split/Consolidation of Shares.
a. Mr. Surinder P. Kanwar, Chairman and Managing Director
b. Mr. Sameer Kanwar, Joint Managing Director
c. Mr. Prashant Khattry, Head(Legal) and Company Secretary
Any two of the above are authorised to consider and approve the Transfer/Transmission/Split/Consolidation of Shares. The Sub-Committee is attending to Share Transfer formalities at least once in a fortnight.
After approved by the Sub-Committee, the Share Transfers are affected by the Registrar and Transfer Agent of the Company.
As per the requirements of Regulation 40(9) of the Regulations and Clause 47(c) of the erstwhile Listing Agreements, the Company has obtained the Half Yearly Compliance Certificates from a Company Secretary in Practice for due compliance of Share Transfer formalities
J. Share Dematerialisation System:
The requests for dematerialisation of shares are processed by Registrar & Transfer Agent (RTA) expeditiously and the confirmation in respect of dematerialisation is entered by RTA in the depository system of the respective depositories, by way of electronic entries for dematerialisation of shares generally on weekly basis. In case of rejections the documents are returned under objection to the Depository Participant with a copy to the shareholder and electronic entry for rejection is made by RTA in the Depository System.
K. Dematerialization of Shares and Liquidity:
The Company's Equity Shares are compulsorily traded in the Stock Exchanges in the dematerialized mode and are available for trading under both the Depository Systems in India i.e. National Securities Depository Limited and Central Depository Services (India) Limited.
Outstanding ADRs/GDRs/Warrants or any convertible instruments, conversion date and likely impact on equity: Not Applicable
L. Unclaimed Shares in Physical Mode:
As per Part F of Schedule V of the Regulations, there are no unclaimed shares in the Company.
N. Plant locations:
The Company's Plants are located at the below mentioned addresses:
• 20 K.M., Mathura Road, P.O. Amar Nagar, Faridabad, Haryana, Pin-I2I 003
• Kausa Shil, Mumbra, Dist. Thane, Maharashtra, Pin-400 612
• Lonand, Taluka Khandala, District Satara, Maharashtra, Pin: 4I552I
O. Addresses for Correspondence:
For Share transfer/demat/remat of shares or any other query relating to shares: -
Link Intime India Private Limited, 44 Community Centre, 2nd Floor, Naraina Industrial Area Phase-I, Near PVR Naraina, New Delhi II0 028, Phone No. 0II-4I4I0592-94, Email: firstname.lastname@example.org
For Investor Assistance:-
Mr. Prashant Khattry, Head (Legal) and Company Secretary, Bharat Gears Limited, 20 K.M., Mathura Road, P.O. Amar Nagar,
Faridabad-I2I 003, Phone: 0I29-4288888, Fax No. 0I29-4288822-23,
9. OTHER DISCLOSURES
A. Related Party Transactions:
During the year 20I5-I6, there were no material individual transactions with related parties, which are not in normal course of business or are not on an Arm's Length basis in terms of Regulation 23 of the Regulations (Clause 49 of the erstwhile Listing Agreements). The statements in summary form of transactions with Related Parties in the ordinary course of business are placed periodically before the Audit Committee for its consideration and approval. All disclosures related to financial and commercial transactions where Directors are interested are provided to the Board and the interested Directors neither participated in the discussion nor did they vote on such matters. The details of the Related Party Transactions during the year are given in the Notes forming part of financial statements.
Further, the Company has formulated a policy on materiality of Related Party Transactions in accordance with the Regulation 23 of the Regulations (Clause 49 of the erstwhile Listing Agreements) and the same is available on the website of the Company i.e. www.bharatgears.com under the link <http://www.bharatgears.com/> corporate-governance.htm.
B. Disclosure of Accounting Treatment in preparation of Financial Statements:
Bharat Gears Limited has followed the guidelines of Accounting Standards as mandated by the Central Government in preparation of its financial statements.
C. Risk Management Framework:
In pursuance to the Companies Act, 20l3 and Regulation l7(9) of the Regulations, the Board of Directors of the Company has adopted a comprehensive Enterprise Risk Management Framework wherein the risks faced by the Company have been identified and assessed and on the basis of the same, the various risks have been prioritized and further the procedures have been devised upon to mitigate such risks. The progress checks on all the risks are done at the Senior Management level and the summary of the same is placed before the Board on a quarterly basis.
The process of risk identification, assessment, prioritization and the devising of the procedures for mitigation of risks is repeated on an annual basis to make the risk management framework inline with the changing requirements of the Industry vis-a-vis the operations of the Company.
A detailed note on Risk Management is given in the Management Discussion and Analysis section forming part of the Board's Report.
Management Discussion and Analysis forms part of the Annual Report to the Shareholders for the Financial Year 20l5-l6.
E. Compliance by the Company:
There were no instances of any non-compliance by the Company or any penalties, strictures imposed on the Company by Stock Exchanges or SEBI or any other Statutory Authority, on any matter related to the Capital Markets, during the last three years.
F. Whistle Blower Policy/Vigil Mechanism:
The Whistle Blower policy/Vigil Mechanism of the Company has been formulated as per Regulation 22 of the Regulations (Clause 49 of the erstwhile Listing Agreements) and Section l77 of the Companies Act, 20l3. The policy provides a channel to the employees, Directors and any other person who avails such mechanism to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism of policy provides for adequate safeguards against victimization of employees, Directors and any other person who avails such mechanism and also provide for direct access to the Chairman of the Audit Committee in appropriate and exceptional cases. The said policy has been communicated to all the personnel of the Company and is available on the website of the Company i.e www.bharatgears.com
During the year under review, no unethical behavior has been reported. Further, the Company has not denied any personnel access to the Audit Committee and it will provide protection to Whistle Blower, if any, from adverse personnel action.
G. Policy on Preservation of Documents/Archival Policy on Website Disclosure:
The Policy on Preservation of Documents/ Archival Policy on Website Disclosure has been framed in accordance with the Regulation 9 and Regulation 30(8) of the Regulations which provides the framework for preservation of documents and records of the Company for a specified period and the records of the Company which are no longer needed or are of no value are discarded after following the due process for discarding the same. This Policy aids the employees of the Company in understanding their obligations in retaining and preserving the documents and records which are required to be maintained as per the applicable statutory and regulatory requirements. The said policy is available on the website of the Company i.e. www.bharatgears.com
H. Policy on criteria for Determining Materiality of Events :
The Policy on criteria for determining Materiality of Events has been framed in accordance with Regulation 30 of the Regulations which defines the criteria for determining the materiality of events or information related to the Company provides that such information should be adequately disseminated in pursuance with the Regulations and further provides for the overall governance framework for such determination of materiality. The said policy is available on the website of the Company i.e. www.bharatgears.com
I. CEO/CFO certification:
Certificate from Mr. Surinder P. Kanwar, Chairman and Managing Director and Mr. Milind Pujari, Chief Financial Officer in terms of Regulation l7(8) of the Regulations for the Financial Year ended 3l March, 20l6 was placed before the Board of Directors of the Company in its meeting held on 24 May, 20l6.
J. Code of Conduct and Corporate Ethics:
Code of Business Conduct and Ethics
Bharat Gears Limited believes that Good Corporate Governance is the key to the Conduct of Company's Business in a transparent, reliable and vibrant manner. It is of paramount importance for any Company to create an atmosphere of faith, integrity, accountability, responsibility and financial stability by adhering to commitment, ethical business conduct, a high degree of transparency thereby unlocking the individual intellectual capabilities and enabling its Board of Directors to conduct its duties under a moral authority, which ultimately leads to enhance legitimate needs and value of the stakeholders. A copy of this code formulated in terms of Regulation l7 of the Regulations (Clause 49 of the erstwhile Listing Agreements) has been posted at Company's official website i.e. www.bharatgears.com
Code of Conduct for Prevention of Insider Trading
The Company has a comprehensive Code of Conduct for its Management, Staff and Directors for prevention of Insider Trading in compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015. The code lays down the guidelines and procedures to be followed and disclosures to be made while dealing with the Shares of the Company and cautioning them on the consequences of non-compliances. The pieces of the price sensitive information are disseminated to the Stock Exchanges timely, adequately and promptly on continuous basis for prevention of Insider Trading. The Company Secretary has been appointed as Compliance Officer and is responsible for adherence to Code for prevention of Insider Trading. A copy of same has been posted at the official website of the Company i.e. www.bharatgears.com
K. Legal Compliance Reporting:
The Board of Directors reviews in detail, on a quarterly basis, the reports of compliance to all applicable laws and regulations in terms of Regulation l7 of the Regulations. The Company has developed a very comprehensive Legal compliance manual, which drills down from the Senior Management Personnel to the executive-level person (who is primarily responsible for compliance) within the Company. The process of compliance reporting is fully automated, using the legal compliance software. System based alerts are generated till the user submits the compliance report, with provision for escalation to the higher-ups in the hierarchy. Any non-compliance is seriously taken up by the Board, with fixation of accountability and reporting of steps taken for rectification of non compliance.
M. Non-Mandatory Requirements:
The Company has set up a Finance Committee, details whereof aregiven in the Board Committee section of this report.
N. Investor Relations:
The growing requirements of disclosure, transparency and corporate governance have made it imperative for Companies to manage information flow and communicate more effectively with shareholders.
Investor Relations at BGL aims at seamless two way communication with the Investor Community. It is based on the tenets of transparency, accuracy and timeliness of disclosures. There is a conscious effort towards the effective dissemination of information to the shareholders to communicate the Company’s long term vision and goals.
O. Email for investors:
The Company has designated email@example.com as e-mail address especially for investors’ grievances. Alternatively, the investors can send their complaints/requests at firstname.lastname@example.org. SEBI has commenced processing of investor complaints in a centralized web based complaints redress system i.e. SCORES. The Company has supported SCORES by using it as a platform for communication between SEBI and the Company.
P. Nomination facility:
The Shareholders holding Shares in physical form may, if they so want, send their nominations in prescribed Form SH-13 of the Companies (Share Capital and Debentures) Rules 2014, to the Company’s RTA. The said form can be obtained from the Company’s RTA or downloaded from the Company’s Website http://bharatgears.com/ documents/form_sh_13_nomination.pdf. The Shareholders who wish to change or cancel their nominations, if already made may send their requests in prescribed Form SH-14 of the Companies (Share Capital and Debentures) Rules 2014, to the Company’s RTA which can be obtained from the Company’s RTA or downloaded from the Company’s Website http://bharatgears.com/documents/form-sh-14- validation-or-cancellation.pdf. Those holding shares in dematerializedform may contact their respective Depository Participant (DP) to avail the nomination facility or further change in nominations.
Q. Updation of Shareholders information:
The Shareholders of the Company are requested to intimate their latest Residential Address along with the details of their Shareholding in “Updation of Shareholder’s Information Form” (which can be obtained from the Registered Office of the Company or downloaded from the Company’s Website http://bharatgears.com/documents/ form_updation_shareholders_information.pdf. The duly filled form for Updation of information may either be sent to the Company at its Registered Office or be hand-delivered at the Annual General Meeting of the Company.
On Behalf of the Board of Directors
Surinder P. Kanwar
Chairman and Managing Director
Dated: 24 May, 2016