Corporate Governance Report
Your Company continues to lay great emphasis on the broad principles of Corporate Governance. Our pursuit towards achieving good governance is an ongoing process. The Company fully complies with the requirements under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations').
I) Company's philosophy on Code of Governance
Your Company believes that good Corporate Governance is essential for achieving long-term corporate goals and enhancing stakeholders' value. In this pursuit, your Company's philosophy on Corporate Governance is led by a strong emphasis on transparency, accountability and integrity. Your Company has been practicing the principles of Corporate Governance over the years for setting highest standards of ethical behaviour. All directors and employees are bound by a Code of Conduct that sets forth the Company's policies on important issues, including its relationship with Customers, Suppliers, Contract Manufacturers, Shareholders and Government.
II) Composition of Board
The Board of Directors has an optimum combination of Executive, Non-executive & Independent Directors, including women directors. The Board comprises of three Whole-time Directors (the Managing Director and two Executive Directors) and seven Non-executive Directors including the Chairman of the Board. Six of the seven Nonexecutive Directors are Independent Directors. Accordingly, the composition of the Board is in conformity with the Listing Regulations.
Except the Non-executive Directors and Managing Director, the two executive Directors are liable to retire by rotation.
During the financial year 2015-16, seven Board Meetings were held on May 19, July 30, September 28, October 29, November 27, 2015, January 27 and March 28, 2016. The last Annual General Meeting of the Company was held on July 30, 2015.
The table below comprises of the following details of the Board of Directors :
a) Board Meeting and Annual General Meeting attendance;
b) Composition of the Board, Directorships/ Committee positions in other Companies; and
c) Other relevant details.
Other than Mr. P. K. Ghosh, who holds 14,676 shares (including joint holdings) of the Company as on March 31, 2016, no other Non-executive & Independent Director hold any shares in the Company.
III) Familiarization Programme for Independent Directors
The Company conducts familiarization programmes for Independent Directors with regard to their roles, rights, responsibilities in the Company, the business operations of the Company etc. Details of familiarization programmes extended to the Independent Directors during the year are disclosed on the Company website at <http://www.colgate.co.in/> Colgate/IN/Corp_v2/RelatedInformation/ Familarization-Programme.pdf
IV) Committees of the Board
i) Audit Committee
The Audit Committee consists of six Nonexecutive & Independent Directors. The Members of the Committee are well versed in financial matters, accounts, company law and general business practices.
During the financial year 2015-16, five Committee Meetings were held, on May 19, July 30, October 29, 2015, January 27 and March 28, 2016.
The Managing Director, Whole-time Director & Chief Financial Officer, Internal Auditor and the Statutory Auditors are invitees to the Meetings.
Mr. Niket Ghate acts as Secretary to the Committee.
The role of the Audit Committee is as under :
a) To review any change in accounting policies and practices.
b) To confirm whether major accounting entries are based on exercise of judgments by management.
c) To oversee the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
d) To recommend the appointment, remuneration and terms of appointment of auditors of the Company.
e) To check whether there are any qualifications made in the draft Auditors’ Report.
f) To review whether there are any significant adjustments arising out of audit.
g) To confirm whether the accounts are prepared on going concern basis.
h) To confirm whether the accounts are prepared by applying applicable accounting standards.
i) To review whether the financial statements comply with the Stock Exchange and Legal requirements.
j) To check whether there are any related party transactions which may have potential conflict with the interests of the Company.
k) To discuss with the auditors whether they have any post audit concerns.
l) To check whether there are any defaults in payment to creditors and shareholders.
m) To evaluate internal financial controls and risk management systems of the Company.
n) 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 to report the matter to the Board.
o) To approve the appointment of the 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, background, etc. of the candidate.
ii) Stakeholders’ Relationship Committee
During the financial year 2015-16, two meetings of the Stakeholders’ Relationship Committee were held on September 28 2015 and March 28, 2016. In the Board Meeting held on September 22, 2014, a new committee, viz. Share Transfer Committee was constituted to note and approve the routine share transfers and other related items and to support the Stakeholders’ Relationship Committee. The Share Transfer Committee meets at regular intervals to approve the transfer of shares and related activities and updates the Stakeholders’ Relationship Committee from time to time.
Mr. Niket Ghate, Whole-time Director & Company Secretary, is the Compliance Officer.
During the financial year 2015-16, 111 complaints were received from shareholders/ investors, details of which are as under :
All complaints have generally been resolved to the satisfaction of the complainants except for disputed cases and sub-judice matters, which would be resolved upon final disposal by the Courts or by authorities before whom they are pending. The increase in the no. of complaints mainly pertains to non-receipt of physical copy of Annual Report 2014-15.
The Role of Stakeholders' Relationship Committee is as under :
a) To note the minutes of the Share Transfer Committee Meetings;
b) To note the synopsis of the complaints received and redressed;
c) To approve allotment of shares, if any; and
d) Other important shareholders related issues.
iii) Corporate Social Responsibility Committee
During the financial year 2015-16, two meetings of the CSR Committee were held on November 27, 2015 and March 28, 2016.
The Role of the CSR Committee is as under :
a) To identify and recommend to the board, the programs to be carried out during the financial year;
b) To carry out evaluation of the CSR activities;
c) To review and monitor the CSR programs undertaken by the Company;
d) To review and monitor the spending on the CSR activities;
e) To give inputs to enhance quality of the CSR activities;
f) To develop new areas CSR activities; and
g) To seek advice from external experts or consultants on CSR related matters.
iv) Risk Management Committee
During the F.Y. 2015-16, two meetings of the RMC were held on September 28, 2015 and March 28, 2016.
The Committee has adopted a policy on Risk Management to assess and determine the risks and potential threats to the Company.
The Role of Risk Management Committee is as under :
a) To identify, assess and mitigate the existing as well as potential risks to the Company and to recommend the strategies to the Board to overcome them;
b) To develop and implement action plans to mitigate the risks;
c) To oversee at such intervals as may be necessary, the adequacy of Company's resources to perform its risk management responsibilities and achieve its objectives;
d) To review on a half-yearly basis the Company's performance against the identified risks of the Company;
e) To formulate the strategies towards identifying any areas that may materially affect the Company's overall risk exposure and to review the Risk Management Policy;
f) To regularly review the risk management framework for the operations of the Company that are deemed necessary; and
g) To perform such other activities related to this Policy as requested by the Board of Directors or to address issues related to any significant subject within its term of reference.
v) Nomination & Remuneration Committee :
During the F.Y. 2015-16, three meetings of the Committee were held on May 19, September 28, 2015 and January 27, 2016.
The Committee has adopted a policy relating to the appointment and remuneration for the Directors, Key Managerial Personnel and Senior Management employees.
The Role of Nomination & Remuneration Committee is as under :
a) The appointment and remuneration of new Directors on Board, Key Managerial Personnel and Senior Management employees shall be made on the basis of core competencies, expertise, experience, qualifications, etc.
b) Evaluation of the performance of the Executive Directors shall be based on the parameters such as accomplishment of assigned goals, their professional contributions towards the Company and the overall performance. On the basis of the evaluation, the remuneration of the Executive Directors will be determined.
c) Evaluation of the overall performance of the Non-executive & Independent Directors of the Company shall be determined by the terms of the policy.
d) Remuneration of the Senior Management employees and Key Managerial Personnel will be fixed annually considering performance of the Company and achievements of the individuals corresponding to their goals set during the year.
Details of remuneration to the Directors :
I) Executive Directors :
The Nomination & Remuneration Policy is directed towards rewarding performance. It is aimed at attracting and retaining high potential talent. The Company does have an incentive plan which is linked to performance and achievement of the Company's objectives. The Company has no stock option scheme relating to its shares. For more information on share-based compensation refer Note 1.8 to the Financial Statements. The Nomination & Remuneration Committee of the Company shall, inter-alia, evaluate the performance of the Executive Directors and the remuneration payable to the Executive Directors and Senior Management employees.
Details of remuneration paid/payable to the Executive Directors of the Company during the year ended March 31, 2016 are given below :
II) Non-executive & Independent Directors :
The Company has no pecuniary relationship or transaction with its Non-executive & Independent Directors other than payment of sitting fees to them for attending the Board and Committee meetings and Commission as approved by the members for their invaluable contribution to the Board. The Company pays fees for professional services rendered by a firm of Solicitors and Advocates of which a Non-executive & Independent Director is a Partner. The fees are, however, not material in nature.
The Shareholders of the Company at the Annual General Meeting held on July 23, 2012 have approved payment of commission to Nonexecutive & Independent Directors not exceeding 1% of the Net Profit subject to a maximum limit of ? 5,00,000/- (Rupees Five Lacs only) per annum to each of the Non-executive & Independent Directors, for a period of five years commencing from April 1, 2012.
During the year 2015-16, three meetings of Independent Directors were held on July 30, November 27, 2015 and March 28, 2016.
Details of the sitting fees and commission paid to the Independent Directors for the financial year 2015-16 are as under :
V) Annual Performance Evaluation of the Board :
Pursuant to provisions of the Companies Act, 2013 and Regulation 17(10) of Listing Regulations, the Board has carried out a formal process of performance evaluation of the Board, Committees and individual Directors. The performance was evaluated based on the parameters such as composition and quality of Board Members, effectiveness of Board/Committee process and functioning, contribution of the Members, Board culture and dynamics, fulfillment of key responsibilities, ethics and compliance etc. A structured questionnaire was prepared covering the above areas of competencies. All the responses were evaluated by the Nomination & Remuneration Committee as well as the Board of Directors and the results reflected high satisfactory performance.
VII) Means of Communication :
The quarterly results are published in The Financial Express, Free Press Journal, The Hindu Business Line and Navshakti as required under Regulation 47 of the Listing Regulations. The Company results and official news releases are displayed on the Company website www.colgatepalmolive.co.in
Presentations are made from time to time to analysts and institutional investors and the same are displayed on the Company's website www.colgatepalmolive.co.in
VIII) General Shareholder Information :
a) 75th Annual General Meeting
Day, Date and Time : Monday, August 8, 2016 at 3.30 p.m.
Venue : Shri Bhaidas Maganlal Sabhagriha, Swami Bhaktivedanta Marg, J.V.P.D. Scheme, Vile-Parle (West), Mumbai 400 056
Record Date : NA
Date of Book Closure :
Tuesday, August 2, 2016 to Monday, August 8, 2016 (both days inclusive)
Financial Calendar : The Company follows April–March as its financial year. The financial results for every quarter beginning from April are declared in the month following the quarter except for the last quarter, for which the results are declared on or before May 30 as permitted under the Listing Regulations
b) Dividend Payment Dates
During the F.Y. 2015-16, the Company declared and paid three interim dividends as detailed below :
Dividend for 2015-16 Payment Dates
First Interim November 26, 2015
Second Interim December 23,2015
Third Interim April 21, 2016
c) Listing on Stock Exchanges
The Company's shares are listed on the following Stock Exchanges :
Name of the Stock Exchange_
BSE Limited, Mumbai
(Physical & Demat)
Stock Code :500830
National Stock Exchange of India Limited, Mumbai
(Physical & Demat)_
Stock Code :COLPAL
Company has paid the Annual Listing fees for the financial years 2015-16 & 2016-17.
f) Registrars & Share Transfer Agents
Effective April 1, 2016, the Company has appointed new Registrars & Shares Transfer Agents M/s Link Intime India Private Limited (RTA) in place of Messrs. Sharepro Services (India) Private Limited.
The Registered Office address of the new RTA is as under :
M/s. Link Intime India Private Limited C-13, Pannalal Silk Mills Compound L.B.S Marg, Bhandup (West) Mumbai- 400 078. Tel : 91-22-2594 6970 Fax : 91-22-2594 6969
E-mail : firstname.lastname@example.org
For any assistance regarding dematerialisation of shares, share transfers, transmissions, change of address, non-receipt of dividend or any other query relating to shares, please write to our Registrar and Shares Transfer Agent at their aforesaid registered address.
An exclusive e-mail ID, investors_ email@example.com for redressal of investor complaints has been created and the same is available on our website.
For the Convenience of our investors, apart from the above mentioned registered address, our RTA will accept the share transfer documents and other related letters at the following locations :
Ahmedabad 303, 3rd Floor Shoppers Plaza — V, Near 5 Government Society Opp. Municipal Market, C. G. Road, Navrangpura, Ahmedabad - 380 009
Tel : 079-2646 5179 Fax : 079-2646 5179 E-mail : firstname.lastname@example.org
Coimbatore Surya 35, Mayflower Avenue, Behind Senthil Nagar, Sowripalayam Road, Coimbatore 641 028
Tel : 0422-2314792 Fax : 0422-2314792 E-mail : email@example.com
Kolkata 59 C, Chowringhee Road, 3rd Floor, Kolkata - 700 020
Tel : 033-2289 0540 Fax : 033-2289 0539 E-mail : firstname.lastname@example.org
New Delhi 44, Community Centre 2nd Floor, Naraina Industrial Area Phase I, Near PVR Naraina, New Delhi - 110 028
Tel : 011-41410592/93/94 Fax : 011-41410592/93/94 E-mail : email@example.com
Pune Block No. 202, 2nd Floor, Akshay Complex, Near Ganesh Temple, Off. Dhole Patil Road, Pune - 411 001
Tel : 020-2616 1629 Fax : 020-2616 3503 E-mail : firstname.lastname@example.org
Vadodara B-102 &103, Shangrila Complex, 1st Floor, Opp. HDFC Bank, Near Radhakrishna Char Rasta, Akota, Vadodara - 390 020
Tel : 0265-2356573 Fax : 0265-2356791 _E-mail : email@example.com _
g) Share Transfer System
Applications for transfer of shares held in physical form are received at the office of the Registrars and Share Transfer Agents of the Company. All valid transfers are processed and registered within 15 days from the date of receipt.
Shares held in the dematerialized form are electronically traded in the Depository and the Registrars and Share Transfer Agents of the Company periodically receive from the Depository the beneficiary holdings so as to enable them to update their records and send all corporate communication, dividend warrants, etc.
Physical shares received for dematerialisation are processed and completed within a period of 21 days from the date of receipt, provided they are in order in every respect. Bad deliveries are immediately returned to Depository Participants under advice to the shareholders.
) Outstanding GDRs/ADRs/Warrants or any convertible instruments
There are no outstanding GDRs/ADRs/Warrants or any convertible instruments as at end March 2016.
k) Plant Locations
Baddi Himachal Pradesh
Plot No. 78, EPIP Phase 1,Jharmajri, Baddi, District Solan,[H.P.] 174 103.
Plot Nos. 154, 158 & 160,Kundaim Industrial Estate,Kundaim, Goa 403 115.
Plot No. SM-02, Sanand - II, GIDC Industrial Area, Near BOI Village, Sanand, Gujarat 382 170.
Sricity Andhra Pradesh
6000 Central Expressway, Sricity, Satyavedu (M), Chittoor District,Andhra Pradesh 517 588
IX) Management Discussion and Analysis Report :
The Management Discussion and Analysis Report is appended to this report.
X) Disclosures :
a) Policy on materially significant related party transactions :
• There are no materially significant related party transactions that may have potential conflict with the interests of the Company at large. Attention is drawn to Note 31 to the Financial Statements for disclosure of related parties.
• The Company has formulated policy on dealing with related party transactions. This policy has been hosted on the Company's website at <http://www.colgate.co.in/app/> Colgate/IN/Corp/Investor/ CorporateGovernance.cvsp
b) Policy on determination of materiality of event or information :
In accordance with the requirements of the Listing Regulations, the Company has formulated a policy on determination of materiality of event or information which is available on the Company website at <http://> www.colgate.co.in/app/Colgate/IN/Corp/ <http://www.colgate.co.in/app/Colgate/IN/Corp/> Investor/CorporateGovernance.cvsp This policy prescribes 'quantitative' and 'qualitative' criteria for determining the materiality of the event.
c) Policy for Preservation of Documents :
The Company has framed a Record Management Policy for preservation of documents. This Policy prescribes the nature of Documents and the period for which the same should be preserved.
The Archival Policy which forms part of this policy, is hosted on the Company website at <http://www.colgate.co.in/app/Colgate/IN/> Corp/Investor/CorporateGovernance.cvsp
d) Policy for Prohibition of Insider Trading :
In line with the requirements of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 the Company has adopted a Code of Conduct for prohibition of insider trading duly approved by the Board of Directors. The objective of the policy is to ensure the prohibition of insider trading practices in the Company. Mr. Niket Ghate, Company Secretary, is the Compliance Officer for the purpose of this policy. This policy has been hosted on the Company website at <http://www.colgate.co.in/app/Colgate/IN/> Corp/Investor/CorporateGovernance.cvsp
e) The Company has an effective Vigil Mechanism system which is embedded in its Code of Conduct. The Code of Conduct of the Company serves as a guide for daily business interactions, reflecting your Company's standard for appropriate behaviour and living Corporate Values. The Colgate-Palmolive EthicsLine phone number and e-mail id are available on the Company website at <http://> www.colgate.co.in/app/Colgate/IN/Corp/ HomePage.cvsp to report any genuineconcerns about unethical behavior, any actual or suspected fraud or violation of Company's Code of Conduct.
f) The Company has adopted a Code of Conduct for its Directors, Senior Management and employees of the Company. This Code of Conduct has been communicated to each of them. A certificate from Mr. Issam Bachaalani, Managing Director, to this effect has been obtained.
g) The Company has complied with the requirements of regulatory authorities on capital markets and no penalty/stricture was imposed on the Company during the last three years.
XI) Compliance with Discretionary Requirements :
The Company has separate positions for the Chairperson and the Managing Director of the Company. To this extent, the Company has adopted the applicable requirements as specified in Part E of Schedule II in Listing Regulations.
XII) Adoption of Non-Mandatory Requirements :
As specified in sub-regulation 1 of Regulation 27 of the Listing Regulations, the non-mandatory requirements are reviewed by the Board as and when necessary.
XIII) Chief Executive Officer (CEO) and Chief
Financial Officer (CFO) Certification :
As required under Regulation 17(8) of the Listing Regulations, the CEO and CFO of the Company have certified the accuracy of Financial Statements, the Cash Flow Statements and adequacy of Internal Control Systems for financial reporting for the year ended March 31, 2016.