CORPORATE GOVERNANCE REPORT
SEBI vide its notification No. SEBI/LAD-NRO/GN/2015-16/013 dated 2nd September 2015 notified the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which were made applicable with effect from 1st December 2015, and repealed the erstwhile Listing Agreement with the stock exchanges.
This Report, therefore, states the compliance status as per requirements of Companies Act, 2013 and SEBI Listing Regulations, 2015.
COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
The Company's philosophy on Corporate Governance aims at ethical corporate behaviour and always strives to achieve optimum performance at all levels by adhering to corporate governance practices. The Company has put in place the systems to comply with all the rules, regulations and requirements mentioned in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
BOARD OF DIRECTORS
Composition of the Board
A non-executive Chairman heads the Board and one-half of the Directors are 'Independent'. The Independent Directors do not have any pecuniary relationship or transactions with the Company, promoters or management, which may affect their judgment in any manner. There is no relationship between Directors inter-se. The policy formulation, evaluation of performance and the control functions vest with the Board.
A detailed agenda folder is sent to each Director in advance of Board and Committee Meetings. To enable the Board to discharge its responsibilities effectively, the Chairman, Whole-time Director and the President & CEO review the overall Company's performance. In addition to the legal matters compulsorily required to be dealt, the Board also reviews:
a) Strategy and business plans
b) Annual operating and capital expenditure budgets and any updates
c) Investment of Company's funds.
d) Compliance with statutory/regulatory requirements and review of major legal issues.
e) Approval of quarterly results/annual results.
f) Listing requirements, attending to shareholders' grievances, etc.
g) Any other matter which is serious in nature or requires the attention of the Board.
The terms of reference of this committee cover the matters specified for Audit Committee under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as well as in section 177 of the Companies Act, 2013. The Audit Committee comprised of Shri Vinaya L Mehrotra, Chairman, Shri H A Nevatia, Shri Gaurav V Nevatia and Shri Mukul M Upadhyaya, all of whom are Independent Directors, except Shri H A Nevatia.
During the year under review, the Audit Committee met four times, viz on May 27, 2015, August 25, 2015, November 9, 2015 and February 6, 2016. Shri H A Nevatia , Shri Vinaya Mehrotra, Shri Mukul M Upadhyaya attended all four Meetings and Shri Gaurav Nevatia attended three meetings. Shri Vinaya Mehrotra was present at the Annual General Meeting of the Company held on August 10, 2015, to answer the shareholders' queries, as a Chairman of the Audit Committee Meeting.
STAKEHOLDER RELATIONSHIP COMMITTEE
The Committee consists of two Non Executive Directors, viz. Shri Naresh Chandra, Chairman and Shri K F Jhunjhunwala, Member. The Committee looks into the redressal of shareholders complaints and grievances and all other matters incidental or related to shares, debentures and other securities of the Company, if any.
During the year under review, no complaints were received by the Company from shareholders. As on date of this report, there are no unresolved shareholders complaints. The Secretarial Department endeavours to resolve the shareholders complaints within 4 to 5 working days.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The Committee consists of four members, viz, Shri Shekhar Bajaj, Chairman, Shri H A Nevatia, Shri Mukul M Upadhyaya (Independent Director) and Smt Shruti Jatia (Independent Director). The Committee provides guidance and monitor various CSR activities to be undertaken by the Company, as per CSR Policy. During the year under review, the Committee met on May 27, 2015 and February 6, 2016. Both meetings were attended by Shri Shekhar Bajaj, Shri H A Nevatia, Shri Mukul M Upadhyaya and Smt Shruti Jatia attended one meeting.
NOMINATION AND REMUNERATION COMMITTEE (NRC)
The Committee consists of three members, viz Shri Vinaya L Mehrotra, Chairman, Shri Gaurav V Nevatia, who are Independent Directors and Shri K F Jhunjhunwala, who is Non-Executive Director of the Company.
The terms of reference of this committee cover the matters specified for Nomination & Remuneration Committee under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as well as in section 178 of the Companies Act, 2013. During the year under review, the Committee met on May 27, 2015 and February 6, 2016. Both meetings were attended by Shri Vinaya Mehrotra and Shri K F Jhunjhunwala. Shri Gaurav Nevatia attended one meeting.
COMPLIANCE OFFICER :
Shri Kiran Mukadam, Company Secretary of the Company is Compliance Officer of the Company.
BOARD TRAINING AND INDUCTION
As a part of familiarisation programme, the Company arranged a factory visit and also explained in detail about the Company, Company's Products and its Marketing, Compliances under the acts, role, rights, functions and responsibilities of Independent Directors as envisaged in the Companies Act 2013. The details of such familiarization programmes are placed on website of the Company i.e. www.indef.com
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out the annual performance evaluation of its own performance and that of its Committees and Individual Directors. A structured questionnaire covering various criteria's of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and corporate governance. The said criteria are placed on the company's website.
Based on the said criteria, rating sheets were filled by each of the Director with regard to evaluation of performance of the Board, its Committees and Directors (except for the Director being evaluated). A consolidated summary of the ratings given by each of the Director was then prepared. On the basis of summarized evaluation statements, the performance was reviewed by the Board, Nomination & Remuneration Committee and Independent Directors in their meetings held on February 6, 2016. The Directors expressed their satisfaction with the evaluation process.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Whistle Blower policy / Vigil Mechanism provides a mechanism for the Director/employee to report violations without fear of victimization any unethical behavior, suspected or actual fraud, violation of the Code of Conduct etc. which are detrimental to the organization's interest. The mechanism protects Whistle Blower from any kind of discrimination, harassment, victimization or any other unfair employment practice. The Directors in all cases & employees in appropriate or exceptional cases will have direct access with the Chairman of the Audit Committee. The said Policy is placed on the website of the Company.
POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Nomination and Remuneration (N&R) Committee adopted a policy which deals with the manner of determining qualifications, positive attributes and independence of a director and remuneration for the Directors, Key Managerial Personnel, and other employees. The said policy is placed on the website of the Company. The summarized features of the policy are as follows-
1. An Independent Director shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, operations or other disciplines related and beneficial to the company's business.
2. An Independent Director shall be a person of integrity, who possesses relevant expertise & experience and who shall uphold ethical standards of integrity and probity; act objectively and constructively; exercise his responsibilities in a bona-fide manner in the interest of the company; devote sufficient time and attention to his professional obligations for informed and balanced decision making; and assist the company in implementing the best corporate governance practices.
3. An Independent Director should meet the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 concerning independence of directors.
a) Remuneration to Non-Executive Directors (NED's):
NED's shall be paid a sitting fee for every meeting of the board and committee thereof attended by them as member. NED's shall not be entitled to any commission on net profit of the Company.
b) Remuneration to Key Managerial Personnel & other employees :
Remuneration to Executive Director/ Key Managerial Personnel and Senior Management will be such as to ensure that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks and may involve a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. While deciding the remuneration package, current employment scenario and remuneration package of the industries operating in the similar comparable businesses in the geographical area of its operations should be considered. The company has no stock options, plans and hence, such instruments do not form part of their remuneration package.
REMUNERATION OF DIRECTORS
All the Directors, other than the Whole-time Director, are paid remuneration by way of a sitting fee at Rs.30,000/- for each of the Board / Audit Committee Meeting and Rs.20,000/- for other meetings attended by them. Shri H A Nevatia, Whole-time Director was paid a remuneration which is within the limits specified under the Companies Act, 2013. The details of remuneration paid to the Directors during the year 2015-16 are as follows:-
DISCLOSURES REGARDING RE-APPOINTMENT / APPOINTMENT OF DIRECTORS
Brief resumes of Directors seeking re-appointment/appointment are given below as per regulation no. 36 (3) of the SEBI (Listing Obligations and Disclouser Requirement) Regulation 2015:
1) Shri Naresh Chandra
Shri Naresh Chandra, aged 81 years, is M.A. and Diploma in Business Administration (U.K.). He is an industrialist and he has been a Director of your Company since 20th September, 1972. He was the Managing Director of M/s. Kaycee Industries Limited from 1968 to 2002. He has vast experience in overall management. He is also Director of M/s. Endurance Technologies Ltd.. , M/s. Varroc Engineering Pvt. Ltd., M/s. Varroc Polymers Pvt. Ltd., M/s. Varroc Trading Pvt. Ltd., M/s. Durovalves India Pvt. Ltd., M/s. Varroc Exhaust Systems Pvt. Ltd. and M/s. Varroc Elastomers Pvt. Ltd.
2) Shri K F jhunjhunwala
Shri K F Jhunjhunwal, aged 79 years, is a diploma holder in textile manufacturing with distinction from VJIT, Mumbai. He is an industrialist having vast experience in business viz cotton, export-import, real estate development, stock broking etc. He is a member of National Stock Exchange of India Limited and sub-broker of BSE Ltd. He has been a director of your Company since 16th March 1995. He became a director of East India Cotton Association in 1985 and was elected President on 23rd Novemvber 2002. He was the member of the Executive Committee of Indian Merchats Chambers, Mumbai and a Committee member of western region of FICCI. He is also connected with various trusts and social organisation. He is past president and life member of Lions Club of Malad, Borivali. He is also director of the Bearbull Securities Private Limited, Shree Shakti Housing & Dev Pvt Ltd., JCO Component Pvt Ltd.
3) Shri Vandan Shah
Shri Vandan Shah, aged 53 years, graduated with a Bachelors Degree in Industrial Engineering from R V College of Engineering, Bangalore in 1985. He started his career with LML Ltd. in 1985 for their joint venture with Piaggio. He subsequently joined Sipra Engineers Pvt. Ltd. as their Dy. General Manager and later became their General Manager. In 1998 he took over as the Managing Director of Sipra Engineers Pvt. Ltd. Sipra Engineers is a leading manufacturer of aluminum die castings. Employing about 500 people, it has three plants in Nashik and counts Piaggio, Tata Motors and Mahindra amongst its major customers. Over 30% of its production are exported to countries like Germany, USA and China. Sipra has been the proud recipient of the Excellence Award from Corporation Bank in All India Medium Scale Auto Components category in 2008 and from Axis Bank in 2012. Sipra has a received a total of 12 awards in areas of Exports, Quality, Management and Customer Satisfaction. He has received training on die casting in Italy and has participated in Entrepreneurship Training through AOTS at Yokohama, Japan. He was a consultant to Bajaj Electricals Ltd. for their two die casting units and their JV with an American company for die casting. He was a member of the delegation led by the Chief Minister of Maharashtra in 2005 to the USA to attract FDI. He is closely involved with the Western Regional Council of CII and was earlier the Chairman of the Nashik Zonal Council. He is on the Board of Directors of Kansai Sipra Die Casting Pvt. Ltd. and Sipra Services & Investments Pvt. Ltd
i) During the year 2015-16, the Company did not pass any resolution through Postal Ballot.
ii) The particulars/details of transactions between the Company and its related parties as per the Accounting Standards are set out in the Notes forming parts of the Accounts. These transactions are not likely to have any conflict with the Company's interest. All transactions entered into with Related Parties as defined under the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 during the financial year were in the ordinary course of business and on an arms length pricing basis. The Board approved a policy for related party transactions which is placed on the website of the Company.
iii) All details relating to financial and commercial transactions, where Directors may have a potential interest, are provided to the Board, and interested Directors neither participate in the discussion, nor do they vote on such matters.
iv) The Company has laid down the procedures to inform Board Members about the risk assessment and mitigation procedures. The Board is periodically informed about business and other functional risks and its minimization procedures.
v) The Board Diversity Policy is placed on the website of the Company
vi) During the year, the Board periodically reviewed compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the Management.
vii) There are no instances of non-compliances by the company necessitating imposition of penalties, strictures on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years except payment of penalty of Rs.45000/- each paid to BSE and NSE for non-submission of un-audited financial results for the quarter ended June 30, 2015 under Clause 41 of the Listing Agreement
viii) In preparation of financial statement, the Company has followed the applicable Accounting Standard referred to in Section 133 of the Companies Act, 2013.
ix) The Company has complied with all mandatory requirements under SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 except default in submission of unaudited financial results for the first quarter of FY 2015-16 [refer MGT 9, Point VIII]
x) The Company has not complied with non-mandatory requirements.
MEANS OF COMMUNICATION TO THE SHAREHOLDERS
(i) The Company has its own web-site and all vital information relating to the Company and its performance, including quarterly results, annual report and any other information prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are placed on the web-site -www.indef.com
(ii) The Company has set-up a designated e-mail ID (Shareholders_grievance@indef.com) exclusively for the shareholders/ investors to lodge their complaints/grievances and information about the said e-mail ID has been posted on the Company's website.
(iii) The Investor Complaints are processed in a centralized web based Complaints redress system through SEBI SCORES.
(iv) The Company promptly reports BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), wherein its equity shares are listed, all the material information including declaration of quarterly/half yearly and annual financial results in the prescribed formats.
(v) The Financial Results are communicated by way of an advertisement in 'Free Press Journal' in English and in 'Navshakti' newspaper in Marathi having wide circulation, immediately after the results are approved at the Board Meeting
GENERAL SHAREHOLDER INFORMATION
a) Registered Office
Bajaj Bhawan, 2nd floor, 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400 021.
(b) Plant Location
1) 43/2B, Savroli Kharpada Road, Dhamani, Khalapur 410202 (MH)
2) 255/2, Hinjawadi, Pune 411057 (MH)
Four Windfarms [1.25 M.W. capacity each]- situated at Khori-Titane, Amkhel, Phophade [All from Dhule District, Maharashtra]
(c) Correspondence Address
43/2B, Savroli Kharpada Road, Dhamani, Khalapur 410202 (MH) Tel. (02192) 662502/503/555 Fax: (02192) 662504
Email: email@example.com & Shareholders_grievance@indef.com
(d) Date, Time and Venue of Annual General Meeting
Date and Time: August 12, 2016 at 4.00 P. M.
Venue: Cultural Hall, 4th Floor, Yeshwantrao Chavan Centre, Genreal Jagannathrao Bhosale Marg, Near to Mantralaya , Nariman Point, Mumbai 400021
(e) Financial Year : 1st April ,2015 to 31st March, 2016
(f) Financial Calendar
a) First Quarterly Result - August 25, 2015
b) Second Quarterly Result- November 9, 2015
c) Third Quarterly result- February 6, 2016
d) Fourth Quarterly Result- June 14, 2016
g) Tentative Financial Calendar for FY 20162017
a) First Quarterly Result - Before 14th August, 2016
b) Second Quarterly Result- before 14th November, 2016
c) Third Quarterly result- before 14th February, 2017
d) Fourth Quarterly Result- before 30th May, 2017
(h) Dates of Book Closure August 6, 2016 to August 12, 2016
(i) Dividend and payment date
Dividend of Rs.1.50 per share has been recommended by the Board of Directors and subject to the approval of the members at the ensuing Annual General Meeting will be paid within 30 days from date of Annual General Meeting
CIN & Listing Details
CIN: L45400MH1962PLC012385; ISIN: INE688E01024
The BSE Limited, Phiroze jeejeebhoy Towers Dalal Street, Mumbai- 400023
[Scrip Code- 505720]
National Stock Exchange of India Limited Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai-400051
[Scrip Code HERCULES EQ]
For the FY 2015-16, the Company have paid listing fee in full before due date.
Registrar and Share Transfer Agent
Universal Capital Securities Pvt. Ltd.
21, Shakil Niwas, Opp. Satya Saibababa Temple, Mahakali Caves Road, Andheri (East), Mumbai 400 093. Tel. (022) 28207203-04-05; 28257641; Fax : (022) 28207207 E-Mail : firstname.lastname@example.org Website : <http://www.unisec.in>
(m) Share Transfer
The Company has a Share Transfer Committee consisting of Shri Shekhar Bajaj, Shri Naresh Chandra and Shri H A Nevatia. The applications for transfer of shares are approved and the Certificates are dispatched /kept ready for delivery within prescribed time, if the documents are complete in all respects.
Investor Grievances Redressal System
The shareholder complaints are handled by the Company’s Registrar and Share Transfer Agent M/s Universal Capital Securities Private Limited in consultation with the Secretarial Department of the Company
Dematerialization of shares
The shares of the Company are in compulsory demat segment and available for trading in the depository systems of both National Securities Depository Limited [NSDL] and Central Depository Services (India) Limited [CDSL]. 2,94,35, 136 equity shares of the Company representing 91.98% of the Company's shares are held in electronic form as on March 31, 2016.
The Company has not issued any GDRs / ADRs / Warrants or any convertible instruments and as such, there is no impact on equity.
CEO and CFO Certification
The President & CEO and Chief Financial Officer of the Company have given annual certification dated June 6, 2016 on financial reporting and internal controls to the Board in terms of Regulation No. 17 (8) read with Part B of Schedule II of SEBI (Listing Obligations & Disclosure Requirements ) Regulation 2015