1. PHILOSOPHY ON CODE OF GOVERNANCE
Panasonic Energy India Co. Ltd., a member of the ‘Panasonic’ group, is committed to the highest standards of fair, ethical and transparent governance practices. The corporate governance policies followed by Panasonic are intended to ensure transparency in all dealings. The Company recognizes the importance of strong corporate governance which is an important mechanism of investor protection.
The Board of Directors of the Company acts as a trustee and assumes fiduciary responsibility of protecting the interest of the shareholders and other stakeholders of the Company. The Board supports the broad principles of corporate governance. In order to attain highest level of corporate governance practice, Board lays strong emphasis on transparency, accountability and integrity.
The Company believes that its systems and actions should be devoted for enhancing corporate performance and maximizing shareholders value in the long term.
2. BOARD OF DIRECTORS
The Company has a very balanced structure of Board of Directors which is in conformity with Regulation 26 of the SEBI (LODR) Regulations, 2015. As on March 31, 2016 the Board comprises of seven Directors (six being nonexecutive Directors), of which four Directors are the Independent Directors. The Non-independent Directors include a Chairman & Managing Director and two Promoter Directors. None of the Directors have any inter-se relation among themselves and with any employee of the Company.
All Independent Directors on the Board are highly experienced, competent and renowned persons from their respective field. They actively participate in the Board and Committee Meetings which is a great value addition in the decision making process.
A Directors’ kit containing information about the Company is handed over to the new Independent Directors to familiarize them with the Company. The details of which are available on our website (http:// www.panasonicenergyindia.in). The appointment letter issued to Independent Directors inter alia sets out the expectation of the Board from the appointed director, their fiduciary duties and the accompanying liabilities that come with the appointment as a director of the Company.
The Notice convening Board Meetings are being sent to each of the Directors along with relevant papers around 9 to 10 days in advance of the meeting date, so as to enable the Board to discharge its responsibilities effectively. All significant developments and material events are brought to the notice of the Board.
During the year ended on March 31, 2016, four Board Meetings were held on following dates.
May 28, 2015, July 24, 2015, October 28, 2015 and February 11, 2016. The last Annual General Meeting was held on July 24, 2015.
3. COMMITTEES OF THE BOARD
With a view to have a more focused attention on business and for better governance and accountability, the Board has constituted the following mandatory committees viz. Audit Committee, Stakeholders' Relationship Committee, Nomination & Remuneration Committee and Corporate Social Responsibility Committee. The terms of reference of these Committees are determined by the Board and their relevance reviewed from time to time. Meetings of each of these Committees are convened by the respective Chairperson of the Committee, who also informs the Board about the summary of discussions held in the Committee Meetings. The Minutes of the Committee Meetings are sent to all Directors individually and tabled at the Board Meetings.
A) Audit Committee
Terms of Reference
The Audit Committee acts as a link between the statutory and internal auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its overall responsibilities of monitoring financial reporting processes, reviewing the Company's established systems and processes for internal financial controls, governance and reviewing the Company's statutory and internal audit activities. The terms of reference of the Audit Committee are in conformity with the Companies Act, 2013 and Regulation 18 of the SEBI (LODR) Regulations, 2015. Some of the important functions performed by the Committee are:
? Effective supervision of the management's financial reporting process.
? To ensure the objectivity and independence of the independent auditor.
? To review the Company's quarterly and annual financial statements before submission to the Board for approval.
? To review the accounting and financial policies and practices.
? To review the efficacy of the internal control mechanism and monitor risk management policies adopted by the Company and ensure compliance with regulatory guidelines.
? To review reports furnished by the internal and statutory auditors and to ensure suitable action is taken.
? To recommend appointment/removal of auditors and fix/approve fees and other payments.
? To review significant related party transactions as per the Accounting Standard 18 (AS18).
The Audit Committee was constituted by the Board of Directors at its meeting held on January 23, 2001 and was reconstituted from time to time. The Committee comprises of 3 Independent Directors and 1 Non-independent Director.
The Company's Internal Auditors, Statutory Auditors and head of finance department generally remain present at the Audit Committee meetings. The Company Secretary acts as the secretary of the Audit Committee. Mr. Mayur Swadia, Chairman of the Audit Committee was present at the 43rd Annual General Meeting of the Company held on July 24, 2015.
B) Nomination & Remuneration Committee
Terms of Reference
In compliance with Section 178 of the Companies Act, 2013, the Board has renamed the existing "Remuneration Committee" as the "Nomination & Remuneration Committee" and reconstituted the same. The Committee recommends the appointment, re-appointment and remuneration payable to Executive Directors. The packages are determined by the committee keeping in view (i) financial position of the Company; (ii) trends in the industry; (iii) appointee's qualification, experience, past performance and past remuneration etc. Some of the important functions performed by the committee are given below.
? Succession planning of the Board of Directors and Senior Management Employees.
? Identifying and selection of candidates for appointment as Directors / Independent Directors based on certain laid down criteria.
? Identifying potential individuals for appointment as Key Managerial Personnel and to other Senior Management positions.
? Formulate and review from time to time the policy for selection and appointment of Directors, Key Managerial Personnel and senior management employees and their remuneration.
? Review the performance of the Board of Directors and senior management employees based on certain criteria as approved by the Board. In reviewing the overall remuneration of the Board of Directors and senior management, the Committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talent.
The Company formed Nomination & Remuneration Committee on January 23, 2004 and it was reconstituted by the Board of Directors at its meeting held on January 12, 2011 and October 29, 2014 respectively.
The Company Secretary acts as the Secretary of the Nomination & Remuneration Committee.
A. Role of Nomination & Remuneration Committee:
? To formulate a criteria for determining qualifications, positive attributes and independence of a Director.
? To identify 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.
? To carry out evaluation of Director’s performance and recommend to the Board appointment / removal based on the performance.
? To recommend to the Board on (i) policy relating to remuneration for Directors, Key Managerial Personnel and senior management and (ii) Executive Directors remuneration and incentive.
? To make recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract.
? To ensure that level and composition of remuneration is reasonable and sufficient and 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.
B. Nomination Duties
? Ensuring that there is an appropriate induction & training program in place for new Directors and members of senior management and reviewing its effectiveness.
? Ensuring that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment in accordance with the guidelines provided under the Companies Act, 2013.
? Identifying and recommending Directors who are to be put forward for retirement by rotation.
? Determining the appropriate size, diversity and composition of the Board.
? Setting a formal and transparent procedure for selecting new Directors for appointment to the Board.
? Developing a succession plan for the Board and senior management and regularly reviewing the plan.
? Evaluating the performance of the Board members and senior management in the context of the Company’s performance from business and compliance perspective.
? Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract.
? Delegating any of its powers to one or more of its members or the Secretary of the Committee.
? Recommend any necessary changes to the Board.
? Considering any other matters as may be requested by the Board.
C. Remuneration Duties
? To consider and determine the remuneration policy, based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract, retain and motivate members of the Board and such other factors as the Committee shall deem appropriate.
? To approve the remuneration of the senior management including Key Managerial Personnel of the Company maintaining a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company.
? To delegate any of its powers to one or more of its members or the Secretary of the Committee.
? To consider any other matters as may be requested by the Board.
? Professional indemnity and liability insurance for Directors and senior management.
Executive Directors’ Compensation
(i) Pecuniary Relationships
None of the Non-Executive Directors of your Company has any pecuniary relationships or material transactions with the Company except for sitting fees paid to them for attending Board meetings or Committee meetings thereof and commission on net profits, if any.
In compliance with the requirements of Accounting Standard 18 (AS-18) issued by ICAI, transactions with related parties have been furnished under Note No. 32 of notes to the accounts of the financial statements.
C) Stakeholders’ Relationship / Grievance Committee
Terms of Reference
Stakeholders’ Relationship Committee was originally formed in the Board Meeting held on January 23, 2001 and subsequently reconstituted by the Board of Directors at its meeting held on January 12, 2011, October 27, 2012 and October 29, 2014 respectively. The Committee specifically looks into issues relating to investors including share related matters and redressal thereof.
Ms. Susheela Maheshwari, Company Secretary has been designated as the Compliance Officer and also acts as secretary of the Committee.
During the year under review, the Company has received two complaints of shareholder and the same have been resolved to the satisfaction of the shareholder. However, the Company had also received 170 requests for change in address, registration of NECS mandate, re-validation of dividend warrants etc. and all the requests have been fully attended by the Company.
No investor correspondence remains unattended for more than 30 days.
D) Corporate Social Responsibility Committee
Terms of Reference
In compliance with the provisions of Section 135 of the Companies Act, 2013, the Board has constituted the Corporate Social Responsibility Committee at its meeting held on May 21, 2014. This committee was subsequently reconstituted by the Board of Directors at its meeting held on October 29, 2014.
The terms of reference of the Corporate Social Responsibility Committee (CSR) broadly comprises:
? To formulate and recommend to the Board, a corporate social responsibility policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII;
? To recommend the amount of expenditure to be incurred on the CSR activities; and
? To monitor the corporate social responsibility policy of the Company from time to time.
a) Related Party Transaction
All transactions entered into with related parties as defined under the Companies Act, 2013 and Regulation 23 of the SEBI (LODR) Regulations, 2015 during the financial year were on an arm’s length basis and majority of those transactions were in the ordinary course of business. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the financial statements.
The Board has approved a policy for related party transactions which has been uploaded on the Company’s website.
b) Non Compliance
There were no non-compliance by the Company during the last three financial years and hence no penalties, strictures were imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three financial years.
c) Vigil Mechanism / Whistle Blower Policy
The Company had established a vigil mechanism for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy.
This mechanism also provides for adequate safeguards against victimization of Director(s) / employee(s) who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The details of establishment of such mechanism have been posted by the Company on its website.
None of the Directors and employees of the Company has been denied access to the Audit Committee.
d) CEO / CFO Certification
The Company has complied with and adopted the mandatory requirements stipulated under regulation 17(8) of SEBI (LODR) Regulation, 2015. The Company has obtained CEO / CFO Certificate from the Chairman & Managing Director and the person heading the finance function in terms of the said regulation.
e) Share Capital Audit
A qualified practicing Company Secretary carried out the share capital audit on quarterly basis to reconcile the share capital with National Securities Depository Services Ltd (NSDL) and Central Depository Services (India) Ltd. (CDSL) and the total issued and listed capital. The audit confirms that the total issued / paid up capital is in agreement with total number of shares in physical forms and total number of shares held with NSDL and CDSL in dematerialized form.
f) Accounting Standard
The Accounting Standards laid down by the Institute of Chartered Accountants of India and applicable to the Company were followed by the Company in preparation of the financial statements of the Company.
g) Details of shares in the suspense account including freeze on their voting rights
The Company is in the process of opening the unclaimed suspense account for the unclaimed shares lying with it.
The Company has 50 such folios comprising of 1581 shares.
h) Non-Mandatory Requirements
The Board may consider adopting the non-mandatory requirements in due course of time. However, during the year under review the status of compliance with non-mandatory requirements of Regulation 27 of the SEBI (LODR) Regulations, 2015 is given below:
During the year under review, there were no audit qualifications in the Company’s financial statements. The Company continues to adopt best practices to ensure a regime of unqualified financial statements.
5. Code of Conduct
a) Code of Conduct for Directors and Senior Management Personnel
The Company has laid down the rules for code of conduct for the members of the Board and Senior Management Personnel of the Company. The code of conduct has also been posted on Company’s website (www.panasonicenergyindia.in). In compliance with this code, the Board members and Senior Management Personnel have affirmed their compliance with the code for the year ended on March 31, 2016. A declaration to this effect duly signed by the Chairman & Managing Director forms part of this Annual Report.
b) Code of Conduct for Prevention of Insider Trading
Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted a code of conduct for prevention of insider trading w.e.f. May 15, 2015.
The Company Secretary acts as the Compliance Officer. This code is applicable to all Directors and such identified employees of the Company who are expected to have access to unpublished price sensitive information relating to the Company.
6. MEANS OF COMMUNICATIONS
a) Quarterly, half yearly and annual audited results have been submitted to BSE as well as published in dailies having wide coverage in English & vernacular language.
b) The results are also uploaded on the Company’s website (www.panasonicenergyindia.in).
c) Management Discussion & Analysis forms part of the annual report which is posted to the shareholders of the Company.
7. GENERAL SHAREHOLDER’S INFORMATION
a) Annual General Meeting
Day, date and time Thursday, July 28, 2016 at 11.00 A.M.
Venue C. C. Mehta Auditorium, M.S. University, Sayajigunj, Vadodara - 390 005.
b) Financial Calendar
For the financial year 2016-17, financial results will be announced as per the following tentative schedule:
1st quarter ended on June 30, 2016 Third week of July, 2016
2nd quarter ended on September 30, 2016 Third week of October, 2016
3rd quarter ended on December 31, 2016 Third week of January, 2017
Audited financial results for the year ended on March 31, 2017 Third week of May, 2017
c) Date of Book Closure
The Company's Register of Members and Share Transfer Books will remain closed from Friday,
July 22, 2016 to Thursday, July 28, 2016 (both days inclusive).
d) Dividend payment date
The dividend for the financial year 2015-16 shall be declared under agenda No. 2 of the forthcoming 44th Annual General Meeting scheduled on July 28, 2016. The mandate date on the dividend warrants shall be August 22, 2016.
e) Listing on Stock Exchange
Company's Equity Shares are listed on The Bombay Stock Exchange Ltd. (BSE). The Company has paid the listing fees for the year 2016-17 to BSE.
f) Stock Code
The Bombay Stock Exchange Ltd. 504093
International Securities Identification No. (ISIN) INE795A01017
g) Registrar & Transfer Agent
Share transfer, dividend payment and all other investor related matters are attended to and processed by our Registrar and Share Transfer Agent (RTA) viz. Link Intime India Pvt. Ltd. The correspondence address of our RTA has been given elsewhere in the Corporate Governance Report.
h) Share Transfer System
Share transfer request received in physical mode are normally registered within 15 days from the date of receipt and demat requests are also normally confirmed within an average of 15 days from the date of receipt.
i) Dematerialization of Shares and Liquidity
At the end of the year 68,14,752 shares were held in dematerialized form which comes to 90.86% of total capital. Trading in equity shares is permitted only in dematerialized form from August 28, 2000 as per notification issued by Securities & Exchange Board of India. The Company has Demat connectivity with National Securities Depository Ltd. (NSDL) & Central Depository Services (India) Ltd. (CDSL).
j) Audits in 2015-16
Sr. No. Audit Audit Firm
1 Statutory Audit M/s. K. C. Mehta & Co., Chartered Accountants, Vadodara
2 Tax Audit M/s. K. C. Mehta & Co., Chartered Accountants, Vadodara
3 Internal Audit M/s. Talati & Talati, Chartered Accountants, Vadodara
4 Cost Audit M/s. Diwanji & Co., Cost Auditors, Vadodara
5 Reconciliation of Share Capital Audit M/s. Vijay Bhatt & Co., Company Secretaries, Vadodara
6 Corporate Governance Audit M/s. Vijay Bhatt & Co., Company Secretaries, Vadodara
7 Secretarial Audit M/s. J. J. Gandhi & Co. Company Secretaries, Vadodara
n) Plant locations
Gujarat G.I.D.C, Makarpura, Vadodara - 390 010, Gujarat.
Madhya Pradesh Plot No. 112, Sector III, Pithampur Industrial Area, Dist. Dhar - 454774 M.P.
o) Address for correspondence
Panasonic Energy India Co. Ltd.
G.I.D.C., Makarpura, Vadodara – 390 010 Gujarat, India.
Tele.: (0265) 264 2661/62 Fax: (0265) 263 8890
E-Mail: firstname.lastname@example.org Website: www.panasonicenergyindia.in
Registrar & Share Transfer Agent
Link Intime India Pvt. Ltd.
B-102 & 103, Shangrila Complex, First Floor , Opp HDFC Bank, Near Radha Krishna Char Rasta, Akota, Vadodara – 390 020, Gujarat, India.
Tele.: (0265) 235 6573/ 235 6794 Fax: (0265) 235 6791 E-mail: email@example.com
p) Information on dividend of past years
Pursuant to Section 123 of the Companies Act, 2013 dividend that remained unpaid or unclaimed for the financial year ended on March 31, 2007 will be transferred to "Investor Education & Protection Fund" (IEPF) a fund constituted by the Central Government under section 125 of the Companies Act, 2013.
While the Company has already written to the members about the due dates for transfer to IEPF, attention of the members is again drawn to this matter through this Annual Report.
For the claims lodged after the last date mentioned above the Company does not take any responsibility for payment, as the amount lying unpaid and unclaimed shall be transferred to IEPF.
q) Other facilities of interest to shareholders holding shares in physical form
(i) Nomination facility
Shareholders who wish to make / change the nomination in respect of their shares as permitted under section 72 of the Companies Act, 2013, may submit to the Company / Registrar & Share Transfer Agent, the prescribed form SH.13. Form SH.13 can be downloaded from the Company's website at www.panasonicenergyindia.in
(ii) Bank details
Shareholders are requested to notify / send the following details to the Company / RTA to facilitate better services:
(a) Any change in their address; and
(b) Bank Account Details or any change thereto.
Shareholders are advised that respective bank details and address be furnished by them to the Company as it would be printed on their dividend warrants as a measure of protection against fraudulent encashment.
(iii) NECS facility
Shareholders who are desirous of receiving dividends by way of direct credit to their bank account through NECS may authorize the Company by way of their NECS mandate. The shareholders desirous to obtain NECS mandate form may download it from the website of the Company at www.panasonicenergyindia.in or may write to the Company Secretary at the Registered Office of the Company.
(iv) PAN card
Pursuant to SEBI circular, the shareholders holding shares in physical form are requested to submit self certified copy of PAN at the time of sending their request for share transfer/ transmission of name/ transposition of name.
r) Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participants (DPs).
For and on behalf of the Board
S. K. Khurana
Chairman & Managing Director
Vadodara, May 24, 2016