REPORT ON CORPORATE GOVERNANCE
1. ELANTAS Beck's philosophy on Corporate Governance:
Corporate Governance is creation and enhancing long-term sustainable value for Company's stakeholders through ethically driven business process. We, at ELANTAS Beck India Ltd., ensure that we follow the corporate governance guidelines and best practices. At ELANTAS Beck India Ltd., Corporate Governance is all about maintaining a valuable relationship and trust with all stakeholders. We consider stakeholders as partners in our success, and we remain committed to maximizing their value, be it shareholders, employees, suppliers, customers, investors, communities or policy makers.
The essence of Corporate Governance lies in promoting and maintaining integrity, transparency and accountability in the management's higher echelons. The Company has fostered a culture in which it has developed a legacy of high standards of integrity, ethical behavior, individual accountability and transparent disclosures. The objective is to meet stakeholders' aspirations and societal expectations.
The Company's Corporate Governance philosophy is reflected in the following key areas.
2. Board of Directors
(a) Composition and functioning:
The Board comprises of eight Directors, complying with the conditions for the composition of the Board, such as, at least one Woman Director and not less than 50% comprising of Non-Executive Directors. The Board has appointed Mr. Milind Talathi, Director-Manufacturing as Alternate Director to Dr. Guido Forstbach effective 28.10.2015. Dr. Matthias Wolfgruber was the Non-Executive Chairman who retired from the services of the Company effective 31.12.2015. The Board has appointed Mr. Martin Babilas, Non-Executive Director, as Chairman of the Company in place of Dr. Matthias Wolfgruber and Mr. Stefan Genten as Non-Executive Director of the Company effective 01.01.2016. Mr. Ravindra Kumar is Managing Director of the Company.Mr. Martin Babilas, Dr. Guido Forstbach and Mr. Stefan Genten are Non-Executive Overseas Directors. Mr. Suresh Talwar, Mr. Ravindra Kulkarni.Mr. Ranjal LaxmanaShenoyand Mrs. Kishori Udeshi are Non-Executive Independent Directors.
The Managing Director is involved in the day-to-day management of the Company, while the Non-Executive Directors bring in the external perspective and provide valuable guidance to the management on various aspects of business, policy direction governance, compliance etc. and independence in decision making.
(c) Information placed before the Board:
The following information inter-alia has been furnished to the Board on a periodic basis for review:
• annual operating business plans, Capital & Revenue budgets and updates thereto
• business performance and financial results on a quarterly/yearly basis
• business environment and relevant industry analysis
• investment of operating surpluses in mutual funds & bank deposits and the performance of such investments
• quarterly, year end results of the Company including its segment-wise break-up
• recommendation of appointment of statutory, internal and cost auditors
• observations of the internal auditor and issues related to internal controls and business process improvement
• minutes of the Audit Committee and of other Committees' Meetings
• position of accounts receivable, inventories and other significant items of working capital
• any materially significant default in discharge of financial obligations by and towards the Company
• status of pending litigations by and against the Company and position of contingent liabilities
• materially important show cause, demand and penalty notices
• significant developments in the area of human resources management and industrial relations, labour problems and their proposed solutions, signing of wage agreement, implementation of VRS etc.
• details of the insurance programme implemented by the Company
• related party transactions for approval
• issue / revocation of Power of Attorney
• significant capital expenditure projects
• business risks with focus on specific risks faced by the Company as laid down in its Risk Management Manual and also risks in general
• information on recruitment and remuneration of senior officers just below the board level, including appointment or removal of Chief Financial Officer and the Company Secretary
• sale of material nature of investments, assets, not in the normal course of business
• information on other relevant matters requiring the approval of the Board
• non-compliance of any regulatory, statutory or listing requirements, if any
The Board is presented with the above information as and when it becomes materially significant for an effective review.
These are either furnished as a part of the agenda papers sent in advance of the Board Meetings, or are tabled / presented for discussion in the course of the proceedings of the Board Meetings or meetings of the relevant Committees.
(d) Remuneration Policy:
Within the overall limits fixed by the shareholders in a General Meeting, the Nomination & Remuneration Committee decides the remuneration of Executive & Non-Executive Directors and Key Managerial Personnel. Remuneration comprises basic salary, perquisites and performance based incentive, which is decided annually by the Board taking into consideration the Company's performance against financial targets and non-financial objectives as well as the performance of the individual concerned against individual objectives agreed during the course of the year
Remuneration of Non-Executive Independent Directors comprises of sitting fees and commission based on their overall engagement and contribution to the Company's business and also based on the net profits of the Company. As approved by the members, commission is limited to 1 % of the net profits of the Company.
The sitting fees payable to the Non-Executive Independent Directors for attending the Board and Committee meetings, is determined by the Board of Directors within the overall limits prescribed under the Companies Act, 2013. All expenses incurred by such Directors for attending the meetings are reimbursed by the Company. The Non-Executive Independent Directors shall also be entitled to the commission on an annual basis, such amounts are within the overall limit of 1 % of the net profits of the Company and as approved by the Board of Directors. In determining the amount of commission payable to the
Non-Executive Independent Directors, the Committee shall take into consideration the overall performance of the Company together with the responsibility and the contribution of each Director.
Policy for selection and appointment of Directors and their remuneration.
The Nomination & Remuneration Committee has adopted a policy which inter alia deals with the manner of selection of the Board of Directors i.e. the Executive and Non-Executive Directors, Managing Director and their remuneration.
The Company has got an induction program by which the Independent Directors are familiarized of their roles, rights, and responsibilities in the Company, the code of conduct to be adhered to, nature of industry, in which the Company operates, business model, structure of the management team etc. The details of such familiarization program have been disclosed on the Company website http://www.elantas.com/beck-india.
3. Board Committees:
The Board is responsible for constituting, assigning and co-opting the Members of the following Committees,
(a) Audit Committee:
During the financial year ended 31 December 2015, four Audit Committee meetings were held on 24 February, 6 May, 28 July and 28 October.
The Audit Committee comprises of Mr. Ravindra Kulkarni (Chairman/Independent Director), Dr. Guido Forstbach, Mr. Suresh Talwar (Independent Director) and Mr. Ranjal Laxmana Shenoy (Independent Director). All members of the Audit Committee are Non-Executive Directors, satisfying the conditions for composition of Audit Committee such as at least three directors as members, two third of the members being independent, and Chairman of the Audit committee being an Independent Director.
All the Members of the Audit Committee are financially literate with some having accounting or related financial management expertise.
The Managing Director, CFO & VP-IT & Procurement, representatives of the Statutory Auditors and Internal Auditors are permanent invitees to the Audit Committee meetings. The Company Secretary acts as the Secretary to the Committee.
The Audit Committee ensures that the internal controls within the Company and financial reporting processes are robust. It regularly reviews the Financial Statements on a quarterly and yearly basis and periodically meets to review and discuss, interlaid, related matters such as:
• 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
• recommendation for appointment, remuneration and terms of appointment of auditors of the company
• approval of payment to statutory auditors for any other services rendered by the statutory auditors
• 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
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 in the draft Audit Report
• reviewing, with the management, the quarterly/annual financial statements before submission to the board for approval
• review and monitor the auditor's independence and performance, and effectiveness of audit process
• approval or any subsequent modification of transactions of the Company with related parties
• Scrutiny of inter-corporate loans and investments
• valuation of undertakings or assets of the company, wherever necessary
• evaluation of internal financial controls and risk management systems
• reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems
• reviewing the adequacy of internal audit function and frequency of internal audit
• discussion with internal auditors of any significant findings and follow up thereon
• 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
• 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
• to look into the reasons for substantial defaults in the payment to shareholders (in case of non-payment of declared dividends) and creditors
• to review the functioning of the Whistle Blower mechanism
• reports of Statutory Auditors, Internal Auditors, Cost Auditors and Secretarial Auditors
• status report of 'Actions taken' on the findings and recommendations of the Internal Auditors, agreed and accepted by the Management
• compliance with regulatory guidelines
• carrying out any other function as is mentioned in the terms of reference of the Audit Committee In addition to the above, the Audit Committee also mandatorily reviews the following information:
• management discussion and analysis of financial condition and results of operations
• statement of significant related party transactions (as defined by the Audit Committee), submitted by management
(b) Stakeholders Relationship Committee and Share Transfer Committee
The Stakeholders Relationship Committee and the Share Transfer Committee both comprise of Mr. Ranjal Laxmana Shenoy -
Non-Executive Independent Director, Mr. Ravindra Kumar-Managing Director and Mr. Shirish Dabir-Company Secretary.
These Committees are headed by Mr. Ranjal Laxmana Shenoy. Mr. Shirish Dabir, Company Secretary is designated as the
During the year ended 31 December 2015, fifteen meetings of Share Transfer Committee and 1 Meeting of Stakeholders
Relationship Committee were held. As of 31 December 2015, there were no unresolved investor complaints pending.
Transfer of shares held in physical mode was processed by Sharepro Services (India) Pvt. Ltd. and approved by the Share Transfer Committee. Transfer of shares is effected and share certificates are dispatched within a period of 15 days from the date of receipt of relevant documents, provided they are complete in all respects. The Share Transfer Committee of the Company normally meets at fortnightly intervals for approval of share transfers, received if any, and other related matters. As on 31 December, 2015, no request for transfer of shares was pending. Scope of the Stakeholders Relationship Committee and Share Transfer Committee:
• to review and discuss the nature of shareholders/ investors' complaints received
• to oversee transfer of shares, non-receipt of annual reports/ dividend warrants, consolidation, split, transmission and transposition of shares etc.
• to look into requests for dematerialization of shares and status of physical holdings
• to review total number of complaints received and replied to the satisfaction of shareholders
• to oversee the performance of Registrar & Share Transfer Agents and recommend measures to improve investor services
c) Committee for issue of duplicate share certificates
The board has constituted a Special Committee for the purpose of issuance of duplicate share certificates. The committee comprises of two Non-Executive Independent Directors, Mr. Ranjal Laxmana Shenoy & Mrs. Kishori Udeshi and one Executive Director Mr. Ravindra Kumar, Managing Director. The Meeting of this Committee is chaired by Mr. Ranjal Laxmana Shenoy. Scope:
• To look into the requests received for issue of duplicate share certificates on account of loss/mutilated certificates etc.
• To look into the requests received for dematerialization of share certificates from the shareholders
• To issue share certificates upon consolidation or sub-division of shares ofthe Company.
Mr. Shirish Dabir, Company Secretary is designated as the Compliance Officer.
d) Nomination & Remuneration Committee
The Board has constituted a separate Nomination & Remuneration Committee comprising of Directors viz. Mr. Suresh Talwar (Non-Executive Independent), Mr. Ranjal Laxmana Shenoy (Non-Executive Independent), Dr. Guido Forstbach (Non- Executive) and Mr. Ravindra Kulkarni (Non-Executive Independent), satisfying the conditions for composition of the Committee such as at least three Non-Executive Directors, half of the members being Non-Executive Independent, and Chairman of the Committee being an Independent Director, for reviewing and approving the compensation payable to the Executive & Non-Executive Directors and Key Managerial Personnel, as considered by the Board within the overall limits approved by the Members.
Two meetings of the Committee were held during the year.
The Nomination & Remuneration Committee has the following objectives:
• 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
• Formulation of criteria for evaluation of Independent Directors and the Board Devising a policy on Board diversity
• 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 their appointment and removal.
e) Risk Management Committee
The Board has constituted a Risk Management Committee comprising Mr. Ravindra Kumar, Mr. Ranjal Laxmana Shenoy, Dr. Guido Forstbach, Mr. Milind Talathi and Mr. Sanjay Kulkarni.
The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. The framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage.
The Company has in place a comprehensive Enterprise Risk Management Manual containing evaluation and assessment of the adequacy of its risk management systems in various areas of risks. The Manual identifies risks, its likelihood, impact and mitigation methods. It undergoes updation and modification depending on the changes in business and market conditions. The job of the Committee is to review these risks on a periodic basis. The Company also has in place Risk Management Policy.
f) Corporate Social Responsibility Committee
The Board has constituted a Corporate Social Responsibility Committee consisting of two Non-Executive Independent Directors Mr. Ranjal Laxmana Shenoy & Mrs. Kishori Udeshi and one Executive Director Mr. Ravindra Kumar, Managing Director.
A Corporate Social Responsibility Policy is in place, which indicates the activities to be undertaken by the Company as specified in Schedule VII ofthe Companies Act, 2013.
4. Other Information:
(a) Code of Conduct:
The Company has laid down a Code of Conduct for all Directors and Senior Management, which is posted on the Company's website http://www.elantas.com/beck-india. All Directors and Senior Management personnel have affirmed their compliance with the said Code. A declaration signed by the Managing Director to this effect is appended at the end of this Report.
(b) CEO/CFO Certificate
A certificate from the Managing Director and CFO & VP-IT & Procurement on the integrity of the financial statements and other matters of the Company for the financial year ended 31 December 2015, annexed and forms part of the Annual Report, was placed before the Board at its meeting held on 23 February 2016
In terms of the requirements of Accounting Standard 18 on Related Party Disclosures issued by the Companies (Accounting Standard) Rules, 2006, transactions with related parties have been adequately disclosed in Note No. 38 in Notes to accounts forming part of the Balance Sheet as at 31 December 2015. There were no transactions of material nature with the Directors or the management or relatives during the year that might have potential conflict with the interests of the Company
• There have been no instances of any personnel seeking access to the Audit Committee.
• None of the Directors holds equity shares or convertible instruments in the Company.
• The Company has been complying with the mandatory requirements and adoption of the non mandatory requirements of clause 49 of then listing agreement and the mandatory and discretionary requirements under part E of Schedule II of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations, 2015).
(f) Discretionary requirements under Regulation 27 of Listing Regulations, 2015 Status relating to following specific requirements:
• Maintenance of office for Non-Executive Chairman: Because of the very good communication facilities it was felt that separate Chairman's office would not be essential.
• Shareholders' Rights: Half yearly and quarterly financial results are forwarded to the Stock exchanges and also uploaded on the Company's website.
• Modified opinion(s) in Audit Report: During the year under review, there was no audit qualification in the Auditors' Report on the Company's financial statements.
• Separate Posts of Chairman and Chief Executive Officer: The Chairman of the Company and the Managing Director are different persons.
• Reporting of the Internal Auditors: The Internal Auditors attend the Audit Committee meetings and submit their Report with details and actions to be taken.
(g) Independent Directors' meeting was held on 24 February 2015.
(h) Means of Communication:
The quarterly and annual financial results of the Company are announced within the stipulated period from the end of the respective quarter and are published in the following newspapers viz. Loksatta (Marathi edition in Pune), Free Press Journal (English edition in Mumbai) & Navashakti (Marathi edition in Mumbai), having requisite circulation. The financial results and other major events/ developments concerning the Company are also posted on the Company's website http://www.elantas.com/beck-india.
5. General Shareholders' Information:
(a) Company Registration details:
The Company is registered in the State of Maharashtra, India, under the jurisdiction of Registrar of Companies, Pune. The Corporate Identity Number (CIN) allotted to the Company by the Ministry of Corporate Affairs (MCA) is L24222PN1956PLC134746.
(b) 60th Annual General Meeting
Day, Date & Time : Friday, 3 June 2016 at 2.30 p.m.
Place : Hall No. 4, 'A' Wing, 5th Floor, MCCIA Trade Tower, ICC Complex, Senapati Bapat Road, Pune 411016.
Dates of Book Closure From Thursday, 26 May 2016 to Friday, 3 June 2016 (both days inclusive).
Dividend payment date On Friday, 1 July 2016, if declared in the Annual General Meeting on 3 June 2016, within the stipulated statutory period.
(c) Unclaimed dividends:
I) Pursuant to Sections 124 and 125 of the Companies Act, 2013, all unclaimed/unpaid dividend/s remaining unclaimed/unpaid for a period of seven years from the date it becomes due for payment, has to be transferred to the Investors Education and Protection Fund (IEPF) established by the Central Government
iii) In case of non receipt/ non encashment of dividend warrants pertaining to the above dividend payment date and thereafter. Members are requested to correspond with the Company,
(d) Company's financial year: 01 January to 31 December
(e) Listing on Stock Exchanges:
The Company's shares are listed on BSE Ltd. The Company has paid the listing fees for the period 1 April 2015 to 31 March 2016.
(g) Share Transfer System:
The share transfers received in physical form are processed by the Registrar and Transfer Agent and approved by the Share Transfer Committee of the Company which usually meets twice in a month or more depending upon the volume of transfers. The share certificates are returned to the member/s within the stipulated period, subject to the documents being valid and complete in all respects. The details of transfer/ transmission of shares of the Company so approved is placed at every Board Meeting.
(h) Registrars and Share Transfer Agents:
The Securities Exchange Board of India (SEBI) vide its Order dated 22 March, 2016 has banned the activities of Sharepro Services (India) Pvt. Ltd. in the Securities Market and advised its client companies to change their Share Registrar and Transfer Agents (R & T Agent). In view of the same, the Company has appointed Link In time India Pvt. Ltd. as its R & T Agent w.e.f. 2 May 2016.
As of 31 December 2015,77,92,916 shares i.e. 98.30% of the Company's total issued, subscribed and paid-up capital were held in dematerialized form.
(I) Compliance with the Minimum Public Shareholding Requirement:
The Company is compliant with the minimum public shareholding threshold of 25%, pursuant to the provisions of the Securities Contract (Regulations) Rules, 1957 as amended.
With reference to this subject. Company had filed consent application with SEBI in the Year 2014. In view of the recommendations of High Powered Advisory Committee followed by SEBI's intimation regarding payment of settlement charges of Rs. 8,84,000, Company has made said payment of Rs. 8,84,000 to SEBI vide Demand Draft no. 016747 dated 21.08.2015.
(m) Plant Locations, Registered Office and address for correspondence:
(I) Plant Locations: The Company's plants are located at two places as indicated below: 147, Mumbai-Pune Road, Pimpri, Pune 411018, Maharashtra. [Tel: (020) 30610666] Plot No.1 (A, B & C) & 122, GIDC Industrial Area, Ankleshwar 393002 Dist: Bharuch, Gujarat. [Tel: (02646) 304736]
(ii) Registered Office:
147, Mumbai-Pune Road, Pimpri, Pune 411018. Tel: (020) 30610800
(iii) Address for correspondence:
In respect of transactions relating to shares:
Link Intime India Pvt. Ltd. Pune Office: Block No. 202, 2nd Floor, Akshay Complex Off Dhole Patil Road, Pune-411001 Tel: (020)26160084/1629 Telefax: (020) 26163503
In respect of any other matter:
ELANTAS Beck India Ltd. 147, Mumbai-Pune Road, Pimpri, Pune 411018. Tel: (020)30610800
For and on behalf of the Board
PLACE ; Mumbai
DATE : 23 February 2016