CORPORATE GOVERNANCE REPORT
REPORT OF DIRECTORS ON CORPORATE GOVERNANCE
COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE:
The Company's philosophy on Corporate Governance is to observe the highest level of ethics in all its dealings, to ensure the efficient conduct of the affairs of the Company to achieve its goal of maximising value for all its stakeholders.
The Company's governance framework is based on the following principles:
• Appropriate composition and size of the Board;
• Availability of information to the members of the Board and Board Committees to enable them discharge their fiduciary duties;
• Timely disclosure of material operational and financial information to the stakeholders;
• Appropriate systems and processes for internal control; and
• Ethical business conduct by the Board, Senior Management and Employees.
The Company's Board follows ethical standards of Corporate Governance and adheres to the norms and disclosures mentioned in the SEBI Listing Regulations with Stock Exchanges.
The Board of Directors is pleased to place here below a report on the Corporate Governance practices followed by your Company:
GOVERNANCE STRUCTURE: BOARD OF DIRECTORS AND THE COMMITTEE OF DIRECTORS:
BOARD OF DIRECTORS/ BOARD MEETINGS
COMPOSITION OF THE BOARD
The Board of your Company comprises 13 members as on 31st March, 2016. Most of the members of the Board are Non-Executive Directors.
The Directors furnish a notice of disclosure of interest as specified in Section 184 of the Companies Act, 2013. The Company maintains Register of Contracts and details of Companies and Firms in which Directors are interested as provided in Section 189(1)of the Companies Act, 2013. The Independent and Non-Executive Directors of the Company do not have any pecuniary relationship or transactions with the Company except for the sitting fees received by them.
TERM OF OFFICE OF DIRECTORS
In terms of applicable provisions of Section 152 of Companies Act, 2013 two thirds of the total strength of the Directors are liable to retire by rotation and one third of them are required to retire every year and if eligible, may seek re-appointment at the Annual General Meeting.
In accordance with the requirements of the Companies Act, 2013, and Article 125 of the Articles of Association of the Company, Shri G. Srinivasan Director, who is retiring by rotation at the ensuing Annual General Meeting. Shri G. Srinivasan offer himself for re-appointment.
Shri Y. Ramulu, Smt. Alice G. Vaidyan and Shri K. Sanath Kumar were appointed as an Additional Director on 30th June, 2015; 29th January, 2016 and 21st March, 2016 respectively and they offer themselves for appointment as Non-Executive Directors.
Your Directors recommend re-appointment and appointment of Directors and the related resolution on the subject is included in the notice convening the ensuing Annual General Meeting.
CODE OF CONDUCT
The Company has framed and put in place the Code of Conduct, duly approved by the Board of Directors. The said Code is applicable to all Directors and Senior Management of the Company and annual affirmations are obtained. All the Directors and Senior Management have affirmed their adherence to the provisions of the said Code. The code of conduct is posted on the website of the Company www.gichfindia.com
RESPONSIBILITIES OF THE BOARD
The Board of Directors provide direction/guidance to the Management, review performance and ensure ongoing compliances to protect long-term interest of the shareholders.
The Board discharges the duties and responsibilities as required under the various statute(s) as are applicable to the Company, like the Companies Act, 2013, Directions/ Guidelines/ Regulations issued by the Securities Exchange Board of India (SEBI), National Housing Bank (NHB) and other Regulatory Authorities, issued from time to time, including reporting to the shareholders. The Board interalia, reviews the annual business plans, periodically studies the actual performance vis-a-vis the targets fixed, quarterly financial results, minutes of various Committees constituted by the Board, status of NPA and updates and reviews thereof, significant changes in policies and internal controls, show cause, demand, prosecution and penalty notices, if any, received and which are materially important, material defaults, if any, in financial obligations to and by the Company, claims on Company, significant development in Human Resources/Industrial Relations and non-compliance, if any, under any regulatory, statutory or SEBI listing regulations.
The Members of the Board ensure that other responsibilities do not have any material impact on their responsibility as a Director of the Company. The day to day operations of the Company are conducted by the Managing Director & CEO subject to the supervision and control of the Board of Directors. The composition of the Board of Directors meets the requirements of SEBI Listing Regulations. None of the Directors on the Board is a member of more than ten Committees and Chairman of more than five Committees (as specified in Listing Regulations), across all Companies in which they are Directors.
MEETINGS OF THE BOARD
Normally the meetings of the Board are held at Mumbai, dates of which are decided in advance. The Members of the Board have access to all information and records of the Company. Senior officials are invited to attend the meetings to provide clarification as and when required.
The Board met six times during the year on 6th May, 2015; 17th July, 2015; 29th October, 2015; 14th December, 2015; 29th December, 2015; 29th January, 2016. The gap between two meetings did not exceed four months.
COMMITTEES OF THE BOARD
With a view to enable more focused and timely attention to the affairs of the Company, the Board has constituted the following Committees with delegation in particular areas.
The Audit Committee of the Company was constituted in the year April 1996. The present Audit Committee consists of Shri V. Ramasamy, Director, as the Chairman of the Committee, Shri Y. Ramulu and Shri Kamlesh S. Vikamsey; Directors are its other members. The Members of the Committee are experienced Directors having knowledge of Accounts, Law and other related subjects. The quorum for the meeting is two Independent Directors. The Chairman of committee is Independent Director. The composition, quorum, powers, role, review of information, scope etc... of the Audit Committee is in accordance with Section 177 of Companies Act, 2013 and the provisions of SEBI Listing Regulations.
The powers, role and scope of the Audit Committee are as per Regulation 18 of SEBI Listing Regulations, issued as per the directions of SEBI and the Companies Act, 2013. The Members of the Committee are qualified, experienced and possess professional knowledge with reference to powers, role and scope of the Committee and as such effectively contribute to its functioning. The prime responsibility of Audit Committee is to review with the Management, the quarterly/annual financial statements prior to its submission before the Board for approval. It includes the oversight of the Company's financial reporting process and the disclosure of its financial information to ensure its content, sufficiency and credibility, recommending the appointment/re-appointment, replacement or removal, if any, of external/internal auditors, fixation of audit fee, reviewing the internal control systems, scope and functions of internal auditors, findings of internal investigations, if any. The terms of reference include review of draft audit reports, reviewing with Management, the performance of statutory and internal auditors, reports relating to compliance with laws and other legal requirements, records relating to related party transactions and defaults, if any, in the payment(s) to the various investors of the Company. The Audit Committee reviews the inspection reports, if any, submitted by the statutory/regulatory Authorities together with the replies thereon.
The Company Secretary acts as the Secretary to the Committee. The Committee met six times during the year under review on 6th May, 2015; 10th July, 2015; 17th July, 2015; 23rd October, 2015; 29th October, 2015 & 29th January, 2016. Senior Officials and Statutory Auditors are invited to attend the meetings and provide clarification as and when required. The minutes of meetings of the Audit Committee are placed before the Board for noting.
REMUNERATION OF DIRECTORS
The Non Executive Directors of our Company were paid only the eligible sitting fees for attending meetings and no other remuneration has been paid. The Non Executive Independent Directors do not have any material pecuniary relationship or transaction with the Company.
STAKEHOLDERS RELATIONSHIP COMMITTEE
Stakeholders Relationship Committee (previously known as Shareholders Grievance Committee) was constituted in the year March 1995. It presently consists of 3 Directors. Shri V. Ramasamy, Director is the Chairman of the Committee. The other members include Shri Y. Ramulu and Smt. Mona Bhide.
The Chairman of the Committee is a Non-Executive (Independent) Director. The Committee reviews, processes, standard operating procedures and initiatives taken by the Company relating to investor service, reviews compliances with the requirements relating to listing agreements and Corporate Governance, share-holding pattern, periodical transfers/transmissions of shares, de-materialisation and re-materialisation of shares, issue of duplicate certificates of the securities issued by the Company, complaints, if any, like non-receipt of balance sheet, non-receipt of declared dividends, complaints made with any statutory agencies including SEBI by the shareholders/investors, if any, compliance with the applicable provisions of "the Companies Act, 1956 (applicable to the extent sections not yet notified) and the Companies Act, 2013" and various other statutes as applicable and the effective steps taken for redressal. To expedite the process of share transfers, the Board delegated the power of share transfer to the Committee consisting of the Managing Director & CEO and the Company Secretary. The Committee meets on weekly basis and approves the periodical transfers/transmissions, issue of duplicate shares, Rematerialisation, Name deletion etc... The Board Committee reviews the queries and complaints received from the shareholders and the steps taken for their redressal, reconciliation of share capital, shareholding pattern. During the year under review, 21 queries were received, which were replied/resolved to the satisfaction of the shareholders. There are no pending share transfers.
Shri S. Sridharan (Sr. Vice President & Company Secretary) is the Compliance Officer of the Committee.
NOMINATION AND REMUNERATION COMMITTEE
Nomination and Remuneration Committee (previously known as Remuneration Committee) was constituted by the Board in its meeting held on 6th May, 2009. The terms of reference of the Remuneration Committee includes to guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management, to formulate a criteria for determining qualifications, positive attributes and independence of a Director, to evaluate the performance of the Members of the Board and provide necessary report to the Board for further evaluation, to recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management, to ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks, to devise a policy on Board diversity, to carry out any other function as is mandated by the Board from time to time and/or enforced by any statutory notification, amendment or modification, as may be applicable, to perform such other functions as may be necessary or appropriate for the performance of its duties. The Committee presently consists of 3 Directors - Smt. Mona Bhide, Director is the Chairperson of the Committee. The other members include Shri V. Ramasamy and Shri Y. Ramulu. The Committee has laid down the following criteria for evaluation of performance of Independent Directors and the Board:
1. Attendance and contribution at Board and Committee meetings.
2. Familiar with the Company's Policies, Values & Beliefs and Code of Conduct.
3. Keep himself/herself updated with the development & factors affecting the Company's business.
4. Discloses his/her interest in any of the agenda items under discussion and any change in directorship/other interest.
5. Provides inputs and suggestions to Management/Board in his/her areas of expertise
ASSET LIABILITY AND RISK MANAGEMENT COMMITTEE
Asset Liability and Risk Management Committee of the Board consists of 3 Directors - Shri V. Ramasamy, Chairman of the Committee, Shri Y. Ramulu, Member and Shri Warendra Sinha, Member.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Corporate Social Responsibility (CSR) Committee was constituted by the Board in its meeting held on 7th May, 2014. The Board level Committee shall oversee the entire process of implementation of CSR related activities through review meeting on the reports of Management level Committee, which shall be submitted to it quarterly.
The CSR Committee presently consists of Shri Milind A. Kharat, Non-Executive Director (Chairman), Smt. Mona Bhide, Independent Director and Shri Warendra Sinha, Managing Director & CEO.
Compliance Officer: Shri S. Sridharan, Senior Vice President & Company Secretary
E-mail ID for the purpose of registering queries/complaints by investors - email@example.com
COMMUNICATION TO THE SHAREHOLDERS
The main source of information to the Shareholders is the Annual Report, which includes intera lia, the Directors' Report, the Report of the Board of Directors on Corporate Governance, Management Discussion and Analysis Report and the audited financial results. The unaudited quarterly and audited results are published for the information of the Shareholders in leading National and Regional daily newspapers and intimated to the Stock Exchanges as required under the Listing Agreements. The financial results of the Company are uploaded in the Company's website. The Company's website address is www.gichfindia.com .
a) Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its Promoters, the Directors or the Management, their subsidiaries or relatives etc., that may have potential conflict with the interests of the Company at large.
None of the transactions with any of the related parties were in conflict with the interests of the Company. Transactions with related parties entered into by the company in the normal course of business were placed before the Audit Committee. Details of related party transactions as per Accounting Standards - 18 are included in Notes to the Accounts [Note No. 25 point No. 8]
Policy on related party transaction is available on the Company's website i.e. www.gichfindia.com
b) Details of non-compliances by the Company, penalties and strictures imposed on the Company by the Stock Exchange/s, SEBI and any statutory authority on any matter related to capital markets, during the last three years.
There were no instances of non-compliance of any matter related to capital markets during the last three years. There were no strictures or penalties imposed by Securities and Exchange Board of India or by the Stock Exchange/s or any statutory authority for non compliance of any matter related to the capital markets.
c) VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 and Regulation 22 of the Listing Regulation, the Company has formulated Whistle Blower Policy for vigil mechanism of Directors and Employees to report to the Audit Committee about the unethical behaviour, fraud or violation of Company's Code of Conduct. The Whistle Blower Policy is displayed on the Company website i.e. www.gichfindia.com . None of the personnel of the Company has been denied access to the Audit Committee.
d) The Company has complied with the applicable Accounting Standards issued by the Institute of the Chartered Accountants of India from time to time.
e) The Company has laid down procedures to appraise the Board of Directors regarding key risk assessment and risk mitigation mechanisms.
f) REMUNERATION OF INDEPENDENT DIRECTORS
Sitting Fee is only paid to Independent Directors of the Company for attending meetings of the Board and Committees.
g) RECONCILIATION OF SHARE CAPITAL AUDIT
As stipulated by SEBI, a qualified practicing Company Secretary carries out audit to reconcile the total admitted capital with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) with the total issued, paid-up and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Listed Stock Exchanges. The audit confirms that the total Listed and Paid-up Capital is in agreement with the aggregate number of the total number of shares in physical form and the total number of shares in dematerialised form (held with NSDL and CDSL). The said audit report is placed before the Shareholders Grievance Committee for review and before the Board for noting.
Your Company has no subsidiaries and as such the requirement relating to certain compliances as prescribed are not applicable.
i) GOING CONCERN
The Board of Directors of your Company is satisfied that the Company has adequate resources to continue its business for the foreseeable future and consequently considers it appropriate to adopt the Going Concern basis in preparing its financial statements.
j) AUDIT QUALIFICATION
There is no qualification on any of the financial statements for the financial year 2015-16 of the Company.
1. Twenty-Sixth Annual General Meeting:
Date : 27th July, 2016 (Wednesday)
Time : 3.30 P.M.
Venue : Yashwantrao Chavan Pratishthan Mumbai,Chavan Centre, Cultural Hall, 4th Floor, General Jagannath Bhosale Marg, Mumbai-400 021.
2. Financial Year:
1st April, 2015 to 31st March, 2016
3. Financial Calendar for the year 2016-17: (Provisional
Results for the first quarter ending 30th June, 2016 (Subject to Limited Review). :Before the end of July, 2016.
Results for the second quarter ending 30th September, 2016 (Subject to Limited Review). :Before the end of October, 2016.
Results for the third quarter ending 31st December, 2016 (Subject to Limited Review). :Before the end of January, 2016.
Audited Results for the financial year ending 31st March, 2017 :Before the end of May, 2017.
Annual General Meeting for the year ending March, 2017 :Before the end of August, 2017.
4. Book Closure
The Register of Members and Share Transfer books are closed keeping in view the Scheduled date of the Annual General Meeting. For the year under reference the above registers/ books would be closed from 16th July, 2016 (Saturday) to 27th July, 2016 (Wednesday) (both days inclusive) and was notified accordingly.
5. Listing of Shares & Non-Convertible Debentures
Equity Shares - The equity shares issued by the Company are listed on the BSE Limited and National Stock Exchange of India Limited. Annual Listing fees as prescribed have been paid to both the stock exchanges for the year 2016-17.
Security Code for Equity shares
• National Stock Exchange of India Limited: GICHSGFIN
The National Stock Exchange Limited, Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051
• BSE Limited: 511676
BSE Limited P.J. Towers, Dalal Street, Fort, Mumbai - 400 001
Non-Convertible Debentures (NCDs) - The Non-Convertible Debentures issued by the Company are listed with BSE Limited. Annual Listing fees as prescribed have been paid to BSE Limited.
Security Code for Non-Convertible Debentures
• Bombay Stock Exchange: 952052
6. Dematerialisation of shares
With effect from 20th August, 2000, the Equity Shares of the Company are to be traded compulsorily in Dematerialised form. 98.95% of the paid-up Equity Capital has been dematerialised as on 31st March, 2016.
The Company has entered into agreements with the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) for this purpose and the equity shares of the Company have been admitted as an 'eligible security' into the Depository System.
ISIN Number for Equity Shares - INE289B01019
ISIN Number for NCD - INE289B07024
7. Dividend Payment
Subject to approval by the Shareholders, dividend warrants/NECS advice will be posted to eligible members within the time limit permissible under the provisions of the Companies Act, 2013.
Dividend warrants/ NECS advice in respect of shares held in Demat form are posted to the beneficial owners to their addresses as per the information furnished by the NSDL & CDSL as on the date of Book Closure. Dividend will be paid on or after 8th August, 2016 (Monday).
8. Compliance Officer: Shri S. Sridharan
Senior Vice President & Company Secretary
9. Outstanding GDRs/ ADRs/ Warrants or any Convertible Instruments, Conversion Date and Likely Impact on Equity:
10. Plant Location:
11. Registrars, Share Transfer Agents & Shareholders Correspondence New Registrars & Share Transfer Agents (from 11th May, 2016 onwards)
M/S KARVY COMPUTERSHARE PVT. LTD.,
Corporate Office :
Karvy Selenium, Tower B, Plot 31-32, Gachibowli,
Financial District, Narakamguda, Hyderabad, Telangana - 500 032
Tel. No. +91 40 67162222 Fax No. +91 40 23420814 E-mail: firstname.lastname@example.org
Mumbai Front Office :
24-b,Raja Bahadur Mansion, Ground Floor, Ambalal Doshi Marg, Behind BSE, Fort, Mumbai - 400 023.
Tel. No. +91 226623 5454/ 412/ 427
Previous Registrars & Share Transfer Agents (up to 10th May, 2016)
M/s. Sharepro Services (India) Private Limited,
13AB, Samhita Warehousing Complex, Second Floor, Sakinaka Telephone Exchange Lane, Off. Andheri-Kurla Road, Sakinaka, Andheri (East), Mumbai - 400 072
Tel. No.: 022 - 67720300/ 67720400 Fax - 022 - 28591568/ 28508927.
E-mail - email@example.com
12. Share Transfer System
All the transfers are processed by the Registrars and Share Transfer Agents namely, M/s Karvy Computershare Private Limited and approved by the Committee constituted for the said purpose which meets on a weekly basis.
In terms of the provisions of Section 205A (5) of the Companies Act, 1956, money transferred to the Unpaid Dividend Account of the Company, which remain unclaimed and unpaid for a period of 7 years from the date on which it was first due for payment, are required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C(1) of the Companies Act, 1956. Further, in terms of Section 205C, no payments shall be made by the Company in respect of claims made after the above period of 7 years. The Company sends final reminder letters to individual share holders well ahead of due dates for transfer of unclaimed dividend amount to IEPF. Despite such reminders, there are few shareholders who have not claimed their dividends.
The due date for transfer of unclaimed dividend pertaining to year 2008-09 is October, 2016.
Members of the Company can claim the unpaid dividend, if any, from the Company before the date of transfer to IEPF as mentioned above.
The Members may please note that after the unpaid dividend is transferred to the said Fund, no claim shall lie against the Company or the Fund.
BANK ACCOUNT PARTICULARS
The Members holding shares in physical mode are requested to furnish their latest bank account number/ particulars (comprising 15 digits or otherwise, as the case may be), directly to the Registrars and Share Transfer Agents for incorporation of the same on the dividend warrants. This would avoid any fraudulent encashment of warrants and facilitate for payment of dividend through NECS.
DIVIDEND PAYMENT THROUGH NECS
The dividend warrants in respect of the shares held in electronic/ demat mode as of the date of Book Closure would be posted to the beneficial owners to their addresses as per the information furnished by the NSDL and CDSL. The Company will arrange to remit the dividend through NECS, to those beneficial owners with bank account number/ particulars (comprising 15 digits or otherwise, as the case may be), subject to availability of NECS facility at such Centres as notified by the Reserve Bank of India.
Shareholders of the Company holding physical shares in single name are requested to nominate a person of their choice by submitting the prescribed nomination form i.e., Form SH-13, in duplicate, to the Company or to its Registrars & Share Transfer Agents. Shareholders holding shares in dematerialised form are requested to contact their Depository Participant. Every shareholder in a Company may at any time, nominate in the prescribed manner, a person to whom his shares in the Company shall vest in the event of his death. Only individual shareholder(s) applying for/holding shares on his/their behalf can make nomination. If the shares are held jointly, all the holders may jointly nominate an individual person as their nominee. Nomination stands automatically rescinded on transfer/dematerialisation of shares.
13. Non-Mandatory Requirements
1. Chairperson of the Board
Chairperson (Non-Executive Director) of our Board is Chairman cum Managing Director of General Insurance Corporation of India (GIC Re).
2. Shareholders Rights
The financial results are well published in the press. The details are as follows:
Quarter Ended :Details of Publication
31.03.2015: Audited Financial Results :The Financial Express and Loksatta dated 7th May, 2015.
30.06.2015 :Unaudited Financial Results (Subject to Limited Review Report): The Financial Express and Loksatta dated 18th July, 2015.
30.09.2015 :Unaudited Financial Results (Subject to Limited Review Report) :The Financial Express and Loksatta dated 31st October, 2015.
31.12.2015: Unaudited Financial Results (Subject to Limited Review Report) :The Financial Express and Loksatta dated 30th January, 2016.
31.03.2016 :Audited Financial Results :The Financial Express and Loksatta dated 30th April, 2016.
For and on behalf of the Board of Directors
Managing Director & CEO
Sd/- Place: Mumbai
Date: 29th April, 2016