Report on Corporate Governance
Pursuant to Regulation 34 (3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 The following is a report on Corporate Governance code as implemented by your Company.
A. MANDATORY REQUIREMENTS
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
Ingersoll-Rand (India) Limited as a part of the Ingersoll-Rand group is committed to the highest standards of business ethics and values. The Company has over the years consistently demonstrated good corporate governance practices believes in managing its affairs with diligence, transparency, accountability and responsibility. Good Corporate Governance is an integral part of the Company's value system and the Company Management places considerable emphasis on compliance therewith aimed at providing good governance. The Company has an obligation, to conduct business in accordance with highest ethical and legal standards, superior product quality and services, to all our stakeholders including shareholders, employees, customers, suppliers and communities.
2. BOARD OF DIRECTORS
Your Company's Board has an optimum combination of executive, non-executive, independent and women directors as per requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The terms and conditions of appointment of the Independent Directors are disclosed in the Company's website at www.ingersollrand.co.in
Number of Board Meetings:
Six Board Meetings were held during the year 2015-16 on May 12, 2015, August 13, 2015, September 7, 2015, September 21, 2015, November 5, 2015 and February 4, 2016.
Also a separate meeting of Independent Directors was held on February 3, 2016 which was attended by both the Independent Directors.
As per disclosure received from Directors, none of the Directors serve as member of more than 10 Committees nor are they the Chairman/Chairperson of more than 5 Committees as per the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
3. AUDIT COMMITTEE
The Audit Committee held four meetings during the year on May 12, 2015, August 12, 2015, November 5, 2015 and February 4, 2016.
Mr. P. R. Shubhakar, General Manager - Corp. Finance & Company Secretary, acts as the Secretary of the Committee.
The terms of reference of the Audit Committee are set out in accordance with the requirement of Section 177 of the Companies Act, 2013 and Regulation 18 read with Part C of Schedule II of the regulation, inter alia consists of
• Overseeing of the Company's financial reporting process and disclosure of financial information to ensure it is correct, sufficient and credible;
• Reviewing with the management the quarterly and annual financial statements before submission to the Board for approval, primarily focusing, inter alia, on
• Any change in accounting policies and practices and reasons for the change;
• Significant adjustments made in financial statements arising out of audit findings;
• Major accounting entries based on exercise of judgment by Management;
• Compliance with accounting standards;
• The going concern assumption;
• Compliance with stock exchange and legal requirements concerning financial statements;
• Related party transactions;
• Review of the adequacy of the internal control systems with the Management, internal auditors and statutory auditors;
• Recommending to the Board, the appointment / re-appointment of statutory auditors and fixation of fees;
• Approval for payment to statutory auditors for other services;
• Discussing with the Statutory Auditors before the audit commences, the nature and scope of audit as well as conduct post-audit discussions to ascertain any area of concern;
• Reviewing the adequacy of internal audit function, coverage and frequency or internal audit;
• Review with internal auditors and senior management, of any significant findings and follow-ups thereon;
• Review of the Company's financial risk and management policies;
• Review functioning of the Whistle Blower mechanism;
• Reviewing the effectiveness of the system for monitoring compliance with laws and regulations;
• Any other function as may be stipulated by any law/Government guidelines;
• Such other functions as may be specified by the Board of Directors of the Company from time to time;
During the year under review, the Audit Committee besides considering the unaudited quarterly financial results and audited financial results and recommending to the Board of Directors of the Company for its adoption and approval, discussed various topics relating to Company's operations including inventory, direct and indirect tax compliance, receivables, C forms and compliances in general. The minutes of the Audit Committee Meetings are placed before the Board for their review.
The Committee relies on the expertise and knowledge of the management, the Internal Audit Team and Statutory Auditors in carrying out its responsibilities. It also uses external expertise where necessary. Management is responsible 1CB for the preparation, presentation and integrity of the Company's financial reporting. Management is also responsible for internal control over financial reporting and all procedures are designed to ensure compliance with Accounting Standards, applicable laws and regulations as well as for objectively reviewing and evaluating the adequacy, effectiveness and quality of the Company's system of internal control.
4. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee is duly constituted under the provisions of Section 178(5) of the Companies Act, 2013 and Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The terms of reference of the Stakeholders Relationship Committee, inter alia, consists of
• Monitor redressal of investors/shareholders grievances;
• Approve transfer and transmission of shares;
• Issue of duplicate share certificates;
• Approving of split and consolidation requests;
• Review of shares dematerialized;
• Oversee the performance of the Company's Registrars and Share Transfer Agents;
• All other matters related to shares.
The Board of Directors have delegated the powers to approve transfer and transmission of shares upto 500 shares to Mr. P. R. Shubhakar, General Manager - Corp. Finance & Company Secretary or Mr. G. Madhusudhan Rao, Vice President - Finance.
Mr. P. R. Shubhakar, General Manager - Corp. Finance & Company Secretary is the Compliance Officer. The Registrar and Share Transfer Agents of the Company - TSR Darashaw Limited, attend to all grievances received from shareholders and investors.
All queries like non-receipt of annual reports, dividend, transfer of shares, change of address etc. were resolved to the satisfaction of the shareholders/investors. During the year, 508 grievances / queries were received from shareholders/ investors and 4 complaints were received from Securities Exchange Board of India (SEBI) and other statutory authorities.
All investor grievances/queries and 3 complaint from statutory authorities have been resolved to the satisfaction of the complainants before the end of the financial year. 1 complaint relating to transmission of shares was open on March 31, 2016 and has been closed by SEBI on May 2, 2016. There was no outstanding complaint at the beginning of the year or on date of this report.
All valid requests for share transfers received during the year have been acted upon and there are no share transfer pending as on March 31, 2016.
5. NOMINATION AND REMUNERATION COMMITTEE
As on March 31, 2016 the Nomination and Remuneration Committee comprises of Mr. Roman Steinhoff, Mr. Hemraj C. Asher and Mr. Darius C. Shroff. Mr. Hemraj C. Asher is the Chairman of the Committee. The Nomination Remuneration Committee met once during the year on May 12, 2015 and was attended by all the then members of the Committee.
The terms of reference of remuneration committee, inter alia consists of
• Formulation of the criteria for determining qualifications, positive attributes and independence of a director;
• Formulation of criteria for evaluation of Independent Directors and the Board;
• Devising a policy on Board diversity;
• Formulate and recommend to the Board a policy for payment of remuneration to Managing Director, Non-Executive Directors, Key Managerial Personnel etc. and its review from time to time.
• Periodically review and suggest revision of the total remuneration package of Managing Director and Key Managerial Personnel under the provisions of Companies Act.
• Decide the actual salary, allowances, perquisites, retrials and increments of Managing Director/Manager under the Companies Act.
• Decide the amount of commission payable to Managing Director/Manager under the provisions of Companies Act.
In determining the remuneration package of the Managing Director/ Manager under the provisions of Companies Act, the Committee evaluates the remuneration paid by comparable organisations within the industry and across various industries before making its recommendations to the Board of Directors. The compensation is also linked to individual and Company performance.
6. REMUNERATION TO DIRECTORS
Criteria for payments to Non-executive Directors:
Non-Executive Directors have been paid remuneration by way of fixed commission, which will be determined by the Board of Directors in terms of the special resolution passed by the shareholders at the Annual General Meeting held on September 12, 2014.
The Company has formulated a Nomination and Remuneration Policy as per which the criterion for payment of remuneration to Non-Executive Directors inter alia includes the time spent in attending Board/Committee meetings, time spent in perusing the paper/records/documents, time spent in participating in strategy development and advice given to the Management from time to time on strategic matters.
7. NOTES ON DIRECTORS SEEKING RE-APPOINTMENT/APPOINTMENT
Ms. Jayantika Dave
Ms. Jayantika is a Post Graduate in Management (HR & Marketing) from Delhi University. She is a certified Executive Coach from ICF, a certified assessor for Intercultural Development Inventory (IDI), for Myers Briggs Type Indicator (MBTI), and for Personality & Profiles Inventory (PAPI). She has more than three decades of experience in various capacities in Human Resources functions with different IT and Technology firms. She was working as Vice President - Human Resources for Ingersoll Rand group in India till December 2014. Prior to joining Ingersoll Rand group in 2009, she served as Director, Human Resources, Agilent Technologies Private Limited.
Ms. Jayantika Dave is also Director on the Board of IL&FS Tamil Nadu Power Company Limited.
Ms. Jayantika Dave does not hold any shares in the Company either in her name or for other persons on a beneficial basis.
Mr. Sekhar Natarajan
Mr. Sekhar Natarajan is a Chartered Accountant and a Cost Accountant by qualification, has served more than 30 years in Monsanto India Limited in various capacities. Presently, he is a Non-Executive Chairman of Monsanto India Limited providing strategic counsel, business guidance and representing that company on industry platforms.
During his long career with Monsanto, Mr. Sekhar Natarajan held several leadership positions across functions including that of Chief Financial Officer, Business Development Head, Sales and Marketing Head, Managing Director for South Asia Business, Global Corporate Strategy Lead at Monsanto's headquarters in St. Louis, USA and finally, prior to retirement, as the CEO and the India Region Lead.
Since his retirement in 2010, Mr. Sekhar Natarajan has been the Managing Partner of S N Consultants - a firm providing strategic advise to Indian and Multinational companies. He is also active in advising on M&A matters.
Mr. Sekhar Natarajan is also a Director on the Board of Monsanto India Limited, Accelya Kale Solutions Limited and Maharashtra Hybrid Seeds Company Private Limited.
Mr. Sekhar Natarajan does not hold any shares in the Company either in his own name or through any other persons on a beneficial basis.
All the transactions with related parties were in the ordinary course of business and on arms' length basis. In terms of Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has obtained prior approval of the audit committee for entering into any transaction with related parties. The audit committee granted omnibus approval for certain transactions to be entered into with the related parties, during the year. All material related party transactions have been approved by the shareholders through ordinary resolution and the related parties abstained from voting on such resolutions. There are no related party transactions entered into by the Company with its Promoters, Directors or Management, their subsidiaries or relatives etc. which had potential conflict with the interest of the Company at large. The register of contracts containing the transactions in which Directors are interested is placed before the Board regularly for its approval. Transactions with the related parties are disclosed in Note 33 to the financial statements in the Annual Report.
A firm of qualified Practicing Company Secretaries carried out a Share Capital audit to reconcile the total admitted equity share capital with the National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed equity share capital. The said report confirms that the total issued/ paid-up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shared held with NSDL and CDSL. This report is sent to all the Stock Exchanges on a quarterly basis within 30 days from the end of every quarter.
In terms of the provisions of Section 177(9) of the Companies Act, 2013 the Company has implemented a vigil mechanism which includes implementation of the whistleblower policy. No employee has been denied access to the chairman of audit committee. The Company in conjunction with the Legal and Ethics Team of its ultimate holding company has informed its employees that any non-compliant behavior of directors or employees, including noncompliance of its code of conduct, may be reported by them using the ethics hotline or ethics email id.
The Company has carried out the board and directors performance evaluation during the year. The performance of the independent directors was evaluated by the Board as a whole and the director being evaluation did not participate in the meeting at the time of their evaluation. The independent directors evaluated the performance of the nonindependent directors and Chairman of the Board.
During the year under review, the Company has taken steps to familiarize its directors including independent directors about the Company operations, business model, stratergic business plans, new proudcts, industry in which the Company operates and their roles and responsibilities.
The Company has complied with all the requirements of regulations and guidelines of the Securities and Exchange Board of India (SEBI). Consequently, no penalties were imposed or strictures passed against your Company by SEBI, Stock Exchanges or statutory authorities. The Company has complied with and adopted the mandatory requirements of the Corporate Governance Code.
Status of compliance of Non-Mandatory requirements:
The Company has not set up a separate office for the Chairman or Independent Directors. However, they do have access to the Company information whenever required.
The Company has published its quarterly, half yearly and annual accounts in two newspapers including one vernacular newspaper having wide circulation. The results are promptly put up on the website of the Company besides being sent to the stock exchanges. The Company has not circulated separately half yearly financial reports to its shareholders.
There are no audit qualifications in the auditor's report.
The Company does not have a Managing Director. The Chairman is a Non-Executive Director.
Internal auditor has direct access to the audit committee. The audit plan and performance of the internal audit team is reviewed by the audit committee.
10. CODE OF CONDUCT
The Board has laid down a Code of Conduct for all Directors and Senior Management and all its employees. The Code of Conduct is also posted on the Company's website www.ingersollrand.co.in All Directors and Senior Management personnel of the Company have affirmed compliance with the Code. A declaration signed by the Chairman to this effect is appended at the end of this Report.
11. CEO/CFO CERTIFICATION
A certificate from the Manager under the provisions of Companies Act, 2013 and Vice President - Finance on the integrity of the financial statements and other matters of the Company for the financial year ended March 31, 2016 was placed before the Board at its meeting held on May 26, 2016.
12. RISK MANAGEMENT
The Board has established a risk assessment and minimization procedure which is reviewed by the Board periodically.
There is a structure in place to identify and mitigate various identifiable risks faced by the Company from time to time. These risks are reviewed by the Risk Management Committee of the Board and new risks are identified. After identification, controls are put in place with specific responsibility of the concerned officer of the Company.
13. MEANS OF COMMUNICATION
The last year's audited accounts were announced by the Company within 60 days of closure of the financial year.
The quarterly results during the year were announced within 45 days of close of the fiscal quarter. The results were published in leading newspapers. The financial results, press releases and other major events/developments concerning the Company were also posted on the Company's website www.ingersollrand.co.in
• Half yearly report sent to each household of shareholders : No
• Quarterly Results -
Which newspapers normally published in :The Financial Express Kannada Prabha
Any Website, where displayed :The quarterly results are displayed on the Company's website www.ingersollrand.co.in
• Presentation made to Institutional Investors or to Analyst : No
• Whether Management Discussion and Analysis Report is a part of annual report or not :Yes
14. GENERAL SHAREHOLDER INFORMATION
• AGM - Date July 27, 2016
- Time: 12.00 Noon
- Venue :Vivanta by Taj, 41/3, Mahatma Gandhi Road, Bangalore - 560 001
Financial Calendar :April 2016 to March 2017
(a) First Quarter Results :Last week of July 2016
(b) Second Quarter Results: Second week of November 2016
(c) Third Quarter Results :First week of February 2017
(d) Results for the year ending March 2017: Second week of May 2017
Date of Book Closure
The Company's Register of Members and Share Transfer Books will remain closed for the purpose of payment of final dividend 2015-2016 from July 19, 2016 to July 22, 2016 (Both days inclusive)
Dividend Payment Date
August 1, 2016
Listing on Stock Exchange
Ahmedabad Stock Exchange Limited
National Stock Exchange of India Limited
Listing fees for the period 2016-2017 has been paid to the stock exchanges.
BSE Limited 500210
Ahmedabad Stock Exchange Limited 26610
National Stock Exchange of India Limited INGERRAND EQ
Demat ISIN No. for NSDL and CDS INE177A01018
Registrars & Share Transfer Agents
TSR Darashaw Limited
6-10, Haji Moosa Patrawala Ind. Estate, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400 011
• Share Transfer System
The share transactions are approved by the General Manager - Corp. Finance & Company Secretary periodically in terms of the authority granted by the Board of Directors of the Company with a view to expedite the process of approving the share transactions. The summary of share transactions approved is placed before the Board of Directors of the Company at the succeeding Board Meetings for ratification.
Share transfers are registered and returned within 15 days from the date of receipt, if the relevant documents are complete in all respects. Requests for dematerialization of shares are processed and confirmation is given to the respective depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) within 15 days.
The total number of shares transferred in the physical form during the year under review was 10,770.
Dematerialisation of shares and liquidity
The equity shares of the Company are in compulsory demat list and are available for trading under National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). As of March 31, 2016, 98.84% of the paid-up capital has been dematerialised.
Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion dates and likely impact on equity
21-30, G.I.D.C. Estate, Naroda, Ahmedabad 382 330
• Address for correspondence
Shareholders correspondence should be addressed to the Registrars and Share Transfer Agents or to the Compliance Officer at the following address:
Registrars & Share Transfer Agents
TSR Darashaw Limited
6-10, Haji Moosa Patrawala Ind. Estate, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400 011
The Company Secretary
Ingersoll-Rand (India) Limited
8th Floor, Tower D, IBC Knowledge Park, No. 4/1, Bannerghatta Main Road, Bangalore - 560029
Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participant.
For and on behalf of the Board of Directors
May 26, 2016