CORPORATE GOVERNANCE REPORT
Company's philosophy on Code of Governance
The Company has adopted and complied with the principles of Corporate Governance as enumerated in Clause 49 of the Listing Agreement as amended from time to time entered into by the Company with the Stock Exchange, which envisages enhancement of long term shareholder value while protecting interests of all other stakeholders. The Company lays emphasis on responsible accounting and transparency across all aspects of the business as well as in discharging its Corporate Social Responsibility activities in a meaningful manner as a responsible Corporate Citizen.
I. BOARD OF DIRECTORS
(A) Composition of Board
The Board of Directors of the Company has an optimum combination of Executive and Non-Executive Directors. The Company has eight Directors as on March 31, 2015 comprising of three Executive Directors holding offices of Executive Chairman, Managing Director & CEO and Whole-time Director respectively and five Non-Executive Directors, including Vice Chairman.
During the year, a Woman Director namely Mrs. Anupa R. Sahney was appointed in the category of Independent Director. Thereby the Company has complied with the requirement under Section 149(1) of the Companies Act, 2013 and Clause 49.II.A.1 of the Listing Agreement.
Since, the Company has an Executive Chairman, hence, half of its Board was comprised of Independent Directors in terms of Clause 49.II.A.2. of the Listing Agreement as on March 31, 2015.
(B) Independent Directors
(i) Formal Letter of Appointment to Independent Directors
On appointment, the concerned Independent Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties and responsibilities.
Every Independent Director, at the first meeting of the Board in which he / she participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of Independence as provided under the Companies Act, 2013 and Listing Agreement.
(ii) Performance Evaluation of Independent Directors
The Performance Evaluation of the Independent Directors of the Company based on the evaluation criteria laid down by the Nomination and Remuneration Committee was completed in the Board meeting held on March 5, 2015.
(iii) Separate Meeting of the Independent Directors
As per the Code of Independent Directors under Schedule IV of the Companies Act, 2013 and the Listing Agreement a separate meeting of the Independent Directors was held on March 5, 2015 under the Chairmanship of Mr. U. K. Mukhopadhyay, Lead Independent Director, to review the performance of the non-independent directors and the Board as a whole along with the Chairman of the Company. The Independent Directors also assessed the quality, quantity and timeliness of flow of information between the Management and the Board and its Committees which is necessary to effectively and reasonably perform their duties.
(iv) Training/Familiarization programme for Independent Directors
A Familiarization Program was conducted for Independent Directors on November 03, 2014, to familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company so that they can contribute in a meaningful way to the Company. Familiarization Program for Independent Directors had been uploaded on website (www.borosil.com) of the Company.
(C) Non-Executive Directors' compensation and disclosures
The remuneration of Non-Executive Directors (NEDs) for attending Board and its Committee meetings of the Company has been decided by the Board of Directors of the Company which is within the limits prescribed under the Companies Act, 2013. Approval of the shareholders is obtained wherever required. The Company has not granted stock options to the Directors.
D) Board and Committee Meetings, etc.
(i) Number of Board Meetings
The Board met seven times during the financial year 2014-2015 on May 29, 2014; May 30, 2014; August 13, 2014;, November 3, 2014; January 30, 2015; March 5, 2015 and March 24, 2015.
The gap between two board meetings did not exceed 120 days.
For this purpose, only Audit Committee and Stakeholders Relationship Committee previously known as Shareholders'/Investors' Grievance Committee have been considered.
(ii) Mr. B. L. Kheruka is father of Mr. P. K. Kheruka and grandfather of Mr. Shreevar Kheruka. In this way, they are related to each other.
(iii) None of the Directors is a Director in more than 10 Public Limited Companies or serves as an Independent Director in more than 7 Listed Companies. Further, none of the Director acts as a member of more than 10 committees or acts as a chairman of more than 5 committees across all Public Limited Companies in which he is a Director.
(iv) Compliance reports of laws applicable to the Company are periodically placed before the Board of Directors of the Company as per Clause 49.II.D.3. There has been no instance of material non-compliance.
(v) Succession Planning
The Board of Directors of the Company had at its meeting held on January 30, 2015, adopted Succession Plan for orderly succession of appointments to the Board and to Senior Management of the Company as per Clause 49.II.D.6 of the Listing Agreement.
(E) Code of Conduct
All the Directors and Senior Management personnel have affirmed compliance with the revised Conduct as approved and adopted by the Board of Directors in their meeting held on August 13, 2014. The said Code is posted on the website (www.borosil.com) of the Company.
A declaration to this effect signed by the Managing Director & CEO of the Company is given elsewhere in the Annual Report.
(F) Whistle Blower Policy
The Company has laid down a Whistle Blower Policy providing a platform to all the Directors/Employees to report about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy.
The mechanism provides for adequate safeguards against victimization of employees to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases.
The said Policy is posted on the website (www.borosil.com) of the Company.
II. AUDIT COMMITTEE
(A) Composition & Members of the Committee
Your Company has an Audit Committee at the Board level, which acts as a link between the Management, the Statutory and Internal Auditors and the Board of Directors and it oversees the financial reporting process.
All members of the Audit Committee are capable of understanding financial statements and two member possesses financial management expertise in accordance with Clause 49.
The Chairman of the Audit Committee, Mr. S. Bagai an Independent Director was present at the Annual General Meeting of the Company held on August 13, 2014.
Apart from the members of Audit Committee, generally, meetings are also attended by Chief Financial Officer and Company Secretary. Representatives of Internal Auditors and Statutory Auditors are invited to the meetings.
The Company Secretary acts as the Secretary to the Committee.
(B) Meetings and attendance during the year
The Committee met four times during the financial year 2014-2015 on May 30, 2014; August 13, 2014; November 3, 2014 and January 30, 2015.
All the Committee members, were present at all the meetings on the relevant dates.
(C) Powers of Audit Committee:
The Audit Committee has the following powers:
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.
(D) Role of Audit Committee:
The role of Audit Committee includes the following:
1. Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
2. To recommend to the Board, the appointment, remuneration and terms of appointment of auditors of the Company.
3. To approve payment to statutory auditors for any other services rendered by the statutory auditors.
4. To review with the management, the annual financial statements 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. Qualifications in the draft audit report.
5. To review with the management, the quarterly financial statements before submission to the board for approval.
6. To review 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. To review and monitor the auditor's independence and performance, and effectiveness of audit process.
8. To approve 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. To review, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
13. To review 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. To discuss with internal auditors any significant findings and follow up thereon.
15. To review 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. To discuss 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 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.
(E) Review of information by Audit Committee:
The Audit Committee mandatorily 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; and
5. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.
It may be clarified that the power, role and review of the Audit Committee includes matters specified under Clause 49 of the Listing Agreement as amended from time to time entered into between the Company and BSE Ltd. on which the shares of the Company are listed.
(B) Terms of Reference of the Committee
(i) Laying down criteria, to identify persons who are qualified to become directors & who can be appointed in senior management;
(ii) Recommending to the Board, appointment & removal of directors & senior management;
(iii) Carrying out evaluation of every director's performance;
(iv) Formulating criteria for determining qualifications, positive attributes & independence of directors;
(v) Recommending to Board, a policy relating to remuneration of directors, Key Managerial Personnel & other employees;
(vi) Devising a policy on Board diversity.
The remuneration policy for members of the Board of Directors, Key Managerial Personnel and Other Employees has been formulated pursuant to Section 178 of the Companies Act, 2013, which strive to ensure:
i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;
ii) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
iii) remuneration to directors, 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 the Company and its goals.
REMUNERATION OF THE BOARD OF DIRECTORS:
The Board of Directors of the Company comprises of Executive and Non-Executive Directors, for which separate policies have been framed:
1. Executive Directors comprising of Promoter Directors and Professional Directors;
2. Non-Executive Directors comprises of Promoter (Non Independent) Director and Independent Directors
Remuneration of Executive Directors: Fixed remuneration:
All Executive Directors viz Executive Chairman, Managing Director and Whole Time Director will have a component of Fixed Salary, which may be fixed for the whole tenure or in a graded pay scale basis. In addition, they will be entitled to usual perks which are normally offered to top level executives, such as Furnished/Unfurnished house / House Rent Allowance, Medical / Hospitalization reimbursement, Personal accident insurance, club fees, car with driver and retrial benefits including leave encashment at the end of the tenure.
Subject to the approval of the shareholders and within the overall limits prescribed in Section 197 of the Companies Act, 2013, the Executive Directors shall be paid commission based on nature of duties and responsibilities, as may be determined by the Board of Directors on Year to Year basis.
Reimbursement of Expenses:
Directors will be entitled for actual entertainment and travelling expenses incurred for business purposes.
The above payments shall be subject to such approvals as may be necessary under the Companies Act, 2013 and the Listing Agreement.
Remuneration of Non- Executive Directors: Fees:
Shall be entitled to payment of fees for attending each Board and Committee Meetings as may be decided by the Executive Directors (members) of the Board, within the limit prescribed under the Rules made under the Companies Act, 2013. The fees may be on uniform basis, as the committee views that all directors affectively contribute to the benefit/growth of the Company.
Separate fees may be decided in respect of Board Meetings and Committee Meetings.
Subject to the approval of the shareholders and within the overall limit of 1% as prescribed by the Companies Act, 2013, the Non-Executive Directors may be paid commission on a pro rata basis.
Reimbursement of Expenses:
For Non-Executive Directors actual expenses in connection with Board and committee meetings are to be reimbursed. In addition, if a Non-Executive Director is travelling on Company's business, as permitted by the Board, he/she shall be entitled for his/her travelling and lodging expenses on actual basis.
Key Managerial Personnel:
Key Managerial Personnel shall be paid salary and perquisites, like other employees of the Company based on their qualification, job experience, as may be applicable and as may be applicable to the grade, to which they belong.
The Company has a performance management system in place in form of software that is known as 'Vconnect', for assessing the performance and competence in order to fix the remuneration and determination of increments of the employees.
The Company has various grades starting from Officers Level to Senior Vice President. There are different departments like Marketing-Consumer Ware & Lab Ware, Finance, HR & Administration, Legal & Secretarial and IT, with departmental heads of each departments of the level of Vice President / General Manager with their respective teams/subordinates of different grades.
Initial remunerations are decided based on an employee's qualification, past experience, suitability for the job and the level for which the position is intended.
At the start of every financial year, organizational strategy is converted into department goals which further get converted as individual KRAs & Competencies. At the end of every financial year, individual performance is measured against these set, KRAs & Competencies. The increments then are decided on the basis of 4 parameters, viz.
1) Individual Performance
2) Organizational Performance
3) New year's budgeted Organizational Performance
4) Industry benchmark
The Promotions are decided broadly on the basis of three parameters viz. availability of promotable position, consistent performance, potential of the incumbent to grow to the next level.
Loans / advances to employees:
The Company may frame policy for granting loan/advances to its employees containing such terms & conditions including regarding interest, as it may deem fit. The Company may in special cases grant loan/advances beyond the limit prescribed in the said policy. The Company may vary said policy from time to time.
V. SHARE TRANSFER COMMITTEE
Terms of Reference of the Committee
The Committee has power to approve the transfer/transmission of shares or any other securities as provided in Rule 5 of the Companies (Management and Administration) Rules, 2014 and amended Clause 49 of the Listing Agreement and to issue renewed or duplicate share certificates & related matters as provided in Rule 6(2) (a) of Companies (Share Capital and Debentures) Rules, 2014.
VI. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company has constituted a Corporate Social Responsibility Committee (CSR Committee) as required under Section 135 of the Companies Act, 2013, the composition of which is furnished hereunder
The Committee met three times during the financial year 2014-2015 on May 29, 2014; July 18, 2014 and January 30, 2015. All the Committee members, were present at all the meetings on the relevant dates.
Terms of Reference of the Committee:
i. To formulate and recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;
ii. To recommend the amount of expenditure to be incurred on the activities as prescribed in Schedule VII of the said Act;
iii. To monitor the CSR Policy of the Company from time to time by preparing a transparent mechanism.
VII. INVESTMENT COMMITTEE
The Committee lays down policy guidelines and procedures for investing the Company's funds, and reviews this activity at regular intervals. The Investment Committee met four times during the year, on August 22, 2014, September 17, 2014, October 10, 2014 and March 23, 2015. The necessary quorum was present for the meeting.
VIII. SUBSIDIARY COMPANIES
The Company does not have any unlisted Indian subsidiary company.
However, a Wholly Owned Subsidiary viz Borosil Afrasia FZE was formed on January 9, 2014 in the Jebel Ali Free Zone in Dubai, UAE.
The Company enjoys aggregate voting rights of 79.46% in Gujarat Borosil Limited (GBL), an enterprise under control within the meaning of Accounting Standard on Consolidated financial Statement (AS-21). In view of the same the financial statement of GBL have been consolidated as per AS-21 as against Accounting Standard (AS-23) on Accounting for Investments in Associates in Consolidated Financial Statements.
The Company has formulated a policy for determining 'material' subsidiaries and has been uploaded on the website (www.borosil.com) of the Company.
The Company complies with the requirements of 'Subsidiary' as per the Listing Agreement.
A. Basis of Related Party Transactions
The details of all transactions with related parties are placed before the Audit Committee periodically, with justification wherever required.
No material transaction has been entered into by the Company with related parties that may have a potential conflict of interest of the Company. The details of related party transactions have been given in the Notes to the Accounts forming part of the Balance Sheet.
B. Disclosure of Accounting Treatment
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP),including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013 as adopted consistently by the Company.
(a) The Non-Executive Directors are paid sitting fees of f 20,000/- per meeting for attending the Board and Audit Committee meetings and f10,000/- per meeting for attending other Committee meetings. There is no sitting fees for attending Share Transfer Committee meetings.
(b) The Board has decided to pay Commission to all Non-Executive Directors who were on the Board during the year 2014 - 2015, in equal proportion, but on pro-rata basis. However, Mr. Dhanendra Kumar (who was an Additional Director upto 10.05.2014) did not attend any meeting during the year 2014-15, hence, he was not paid any commission.
Commission is payable to the Executive Chairman, Managing Director & CEO & Whole-time Director as decided by the Board within the limits set out in their respective terms of appointment.
(c) The Company has not granted any stock option to the Executive Directors. However, Mr. B. L. Kheruka, Executive Chairman holds 1,08,405 Equity Shares and Mr. Shreevar Kheruka, Managing Director & CEO holds 25,050 Equity Shares of the Company.
(d) The term of office of the Executive Chairman & Managing Director is for 5 years and Whole-time Director & CEO is for 3 years and Notice period is 3 months from either side.
(iii) Number of shares and convertible instruments held by Non-Executive Directors
Mr. P. K. Kheruka, Non Executive Vice Chairman holds 1,08,405 Equity Shares. None of the other Non-Executive Directors hold any Shares or convertible instruments of the Company as on March 31, 2015.
A Management Discussion and Analysis Report containing discussion on the matters specified in clause 49 VIII (D) forms part of the annual report. The Code of Conduct for Board of Directors and Senior Management of the Company is uploaded on the website (www.borosil.com ) of the Company.
i. Relevant details of Directors proposed to be appointed/ reappointed are being furnished in the Notice convening the Annual General Meeting to be held on August 28, 2015 being sent along-with the Annual Report.
ii. Quarterly results, Shareholding Pattern and other reports as directed by Clause 54 are regularly made available on Company's website: www.borosil.com
iii. Stakeholders Relationship Committee is formed to redress grievances of shareholders and other security holders of the Company.
XI. CEO/CFO CERTIFICATION
The Managing Director & CEO and the Chief Financial Officer of the Company has issued a certificate pursuant to the provisions of Clause 49 of the Listing Agreement. The said certificate is annexed and forms part of the Annual Report.
XII. MEANS OF COMMUNICATION
The quarterly and half yearly unaudited and annual audited financial results were published in 'The Economic Times' in English and 'Maharashtra Times' in Marathi (regional language). The quarterly financial results, shareholding pattern, reports on compliance with corporate governance, annual reports, etc. are regularly uploaded on the Company's website -'www.borosil.com' in compliance with Clause 54 of the Listing Agreement.
The Company has not made any presentation to institutional investors or analysts. As per the requirement under Clause 47 of the Listing Agreement, an exclusive email ID has been created namely, 'firstname.lastname@example.org' on which the investors can register their complaints. The said email ID is also displayed on Company's website (www.borosil.com).
XIII. General Shareholder Information Annual General Meeting
Date & Day : Friday, August 28, 2015
Time : 2.30 pm
Venue : Textiles Committee Auditorium, Textiles Committee Building, P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai - 400 025.
Financial year : 1st April to 31st March
Financial Calendar :
First Quarter – 2nd week of August
Second Quarter – 2nd week of November
Third Quarter – 2nd week of February
Fourth Quarter – 4th week of May
Date of Book Closure : August 22, 2015 to August 28, 2015
Dividend Payment Date : September 18, 2015
Listing on Stock Exchange : BSE Ltd.
Stock Code : 502219
ISIN No. : INE666D01014
Corporate Identity Number (CIN) : L99999MH1962PLC012538
Payment of listing fees : The Annual Listing fee for the year 2015-16 has been paid by the Company to BSELtd. on April 22, 2015.
Payment of Depository Fees : Annual Custody / Issuer fee for the year 2015-16 will be paid by the Company to NSDL and CDSL on receipt of the Invoices
Registrars and Transfer Agents:
Universal Capital Securities Pvt. Ltd. 21, Shakil Niwas, Mahakali Caves Road, Andheri (E), Mumbai 400 093
Share Transfer System:
The Registrars and Transfer Agents process, inter-alia, the share transfer requests received in physical and electronic mode and confirm dematerialisation requests and extinguishment of shares and other share registry work.
The transfers are normally processed within 10-12 days from the date of receipt if the documents are complete in all respects.
Dematerialisation of shares and liquidity
As on March 31, 2015, 28,34,654 shares of the Company representing 94.30% of the Company's total paid up share capital had been dematerialised and 1,71,346 shares representing 5.70% were in physical form.
The Company's shares are regularly traded on BSE Ltd. as is indicated in the table containing market information.
Zonal Sales Offices
i. 403/404, Kaliandas Udyog Bhavan Premises, Near Century Bazar, Worli, Mumbai - 400 025.
ii. Dabriwala House, 10-C, Middleton Row, Kolkata - 700 071.
iii. 1st Floor, New no.20, Old No. 9, Brahadammal Road, Nungambakkam, Chennai - 600 034.
iv. 19/90, Connaught Circus, Madras Hotel Block, New Delhi - 110 001.
Address for Correspondence
Any communication by the Shareholders may be addressed to either of the following:
Borosil Glass Works Limited
11th floor, 1101, Crescenzo, G Block, Opposite MCA Club, Bandra Kurla Complex, Bandra (East), Andheri (E),
Universal Capital Securities Pvt. Ltd.
Unit: Borosil Glass Works Ltd. Shakil Niwas, Mahakali Caves Road, Mumbai - 400 051. Mumbai - 400 093
Complaints/grievances may also be addressed to 'email@example.com'.
Compliance with Non Mandatory Requirements under Clause 49 of the Listing Agreement:
1. The Board
The Company has an Executive Chairman whose office is maintained by the Company at its expenses. The travelling and other expenses of the Chairman for office purposes are paid / reimbursed by the Company.
2. Shareholder Rights
The quarterly and half yearly financial performance are published in the newspapers and are also posted on the website (www.borosil.com) of the Company and hence, it is not being sent to the shareholders.
3. Audit qualifications
The Company's financial statement for the year 2015 does not contain any audit qualification.
4. Separate posts of Chairman and CEO
The Company has an Executive Chairman whose position is separate from that of the Managing Director & CEO of the Company.
5. Reporting of Internal Auditor
The Internal Auditor presents his report to the Audit Committee on quarterly basis.