CORPORATE GOVERNANCE REPORT
1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE
Stovec firmly believes that Corporate Governance is about upholding the highest standard of ethics, integrity, transparency and accountability in conducting affairs of the Company, so as to disseminate transparent information to all stakeholders. Stovec always seek to ensure that it attains performance goals with integrity. Corporate Governance has indeed been an integral part of the way Stovec have done business. This emanates from our strong belief that strong governance is essential in creating value on a sustainable basis. Corporate Governance is a journey for constantly improving sustainable value creation and is an upward moving target.
2. BOARD OF DIRECTORS
The composition of the Board with reference to the number of Executive, Non-Executive directors and Woman Directors, meets the requirement of Code of Corporate Governance. The Company has an optimum combination of Non-Executive Directors.
The present Board comprises of Six Directors which includes Non-Executive & Independent Chairman, Executive Director, Three Non-Executive Directors (including one Woman Director) & One other Non- Executive & Independent Director.
The Board met 5 (five) times during the year i.e. February 19, 2015, May 7, 2015, June 27, 2015, August 13, 2015, and November 6, 2015 and maximum time gap between any two consecutive meetings was not more than 120 days.
Shareholding of Non-Executive Director
Appointment / Re-appointment of Directors:
The Board of Directors ("Board") in its meeting held on February 16, 2016 has appointed Mr. Eiko Ris, as an Additional Director on the Board of the Company w.e.f. February 16, 2016, who holds office up to the date of the forthcoming Annual General Meeting and is eligible for appointment as a Director of the Company. Mr. Aschwin Nicolai Hollander, due to his other pre-occupations has resigned from the Board of the Company w.e.f. February 16, 2016. At the 42nd Annual General Meeting,
Mrs. Everdina Herma Slijkhuis retires by rotation and being eligible, offers herself for re-appointment.
The tenure of Mr. Shailesh Chandrakrishna Wani, as a Managing Director of the Company expires on September 30, 2016. The Board in its meeting held on February 16, 2016, noted that Company has grown under his leadership and it will be in the interest of the Company to re-appoint him. The Board has re-appointed Mr. Shailesh Chandrakrishna Wani, as a Managing Director of the Company for a further period of three years w.e.f. October 1, 2016, subject to the approval of Members of the Company and of the Central Government, if required.
Brief resume of the Directors seeking appointment/re-appointment has been disclosed and annexed to the Notice of 42nd Annual General Meeting.
Annual Performance Evaluation
The Annual Performance Evaluation of Board, Committees of Board and each Director including Chairman of the Board was carried out through a structured questionnaire. Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), the Board of Directors/Independent Directors/Nomination and Remuneration Committee (as applicable) has undertaken an evaluation of their own performance, the performance of Committees of Board and of all the individual Directors including Chairman of the Board of Directors based on various parameters relating to roles, responsibilities, obligations, level and effectiveness of participation e.g. inputs provided by the Director based on his/her knowledge, skills and experience, independence in judgment, understanding of the Company’s business and strategy, guidance on corporate strategy, sharing knowledge and experience in their respective areas, contribution of Directors at meetings and functioning of Committees. The result of above performance evaluation was presented to the Nomination and Remuneration Committee and the Board of Directors (as applicable).
The Board of Directors (excluding the Director being evaluated) evaluated the performance of Mr. K.M. Thanawalla and Mr. Marco Wadia, Independent Directors of the Company and has determined to continue with the term of appointment of the Independent Directors.
The Independent Directors in their meeting assessed the quality, sufficiency and timeliness of flow of information between the Company Management and the Board which is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors found the same satisfactory.
Familiarization Programme for Independent Directors
The familiarization programme was organized for Independent Directors on February 19, 2015 and on November 6, 2015. The details of familiarization Programme is available at the website of the Company www.stovec.com at http://www.spgprints.com/about+us/major+companies/stovec+ industries+ltd.?company_id= 6&content=profile.
3. COMMITTEES OF THE BOARD
The Committees of the Board are constituted as per the Companies Act, 2013 and Listing Regulations.
3.1 AUDIT COMMITTEE:
The terms of reference of the Audit Committee are in line with the requirement of Section 177 of the Companies Act, 2013 and rules framed thereunder and as per Listing Regulations.
The terms of reference of Audit Committee are briefly described below:
(i) Review Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible and also to examine the financial statement and the auditors' report thereon;
(ii) Review with the management, of the annual financial statements before submission to the Board for approval, with particular reference to:
a. Matters required to be included in the Director's Responsibility Statement forming part of the Board's report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013 or any amendment or re-enactment thereof;
b. Changes, if any, in accounting policies and practices and reasons for the same;
c. Major accounting entries involving estimates based on the exercise of judgment by management;
d. Significant adjustments made in the financial statements arising out of audit findings;
e. Compliance with listing and other legal requirements relating to financial statements;
f. Disclosure of any related party transactions;
g. Qualifications in the draft audit report.
(iii) Review with the management of the quarterly financial statements before submission to the Board for approval
(iv) Recommending to the Board, the appointment, re-appointment, terms of appointment/ re-appointment, fixation of audit fees and, if required, the replacement or removal of the Auditor;
(v) Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors;
(vi) Review and monitor the auditor's independence and performance and effectiveness of audit process;
(vii) Discussion with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
(viii) May call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the Internal and Statutory Auditors and the Management of the Company;
(ix) Reviewing with the Management, performance of Statutory and Internal Auditors, adequacy of the internal control systems;
(x) Review of the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
(xi) Discussion with Internal Auditors of any significant findings and follow up there on;
(xii) Evaluation of internal financial controls and risk management systems;
(xiii) Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
(xiv) Review of information relating to:
a) Management discussion and analysis of financial condition and results of operations;
b) Statement of significant related party transactions, submitted by management;
c) Management letters / letters of internal control weaknesses issued by the
d) Internal Audit reports relating to internal control weaknesses;
e) The appointment, removal and terms of remuneration of the Chief internal auditor
(xv) Approval or any subsequent modification of transactions of the Company with related parties;
(xvi) Scrutiny of inter-corporate loans and investments;
(xvii) Reviewing with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
(xviii) Valuation of undertakings or assets of the Company, wherever it is necessary;
(xix) To look into the reasons for substantial defaults in the payment to the depositors, if any, debenture holders, if any, shareholders (in case of non-payment of declared dividends) and creditors;
(xx) To review the functioning of the Whistle Blower/Vigil Mechanism; Details of establishing the Vigil Mechanism have been disclosed on the Company's website and in the Director's Report;
(xxi) Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
(xxii) To review the financial investments, in particular, the investments made by the unlisted subsidiary company;
(xxiii) Other matters as may be prescribed from time to time to be dealt with or handled by the Audit Committee pursuant to provisions of the Companies Act, 2013, the Rules framed thereunder, the Listing Agreements entered into with the Stock Exchanges where the securities of the Company are listed and the guidelines, circulars and notifications issued by Securities and Exchange Board of India ("SEBI")/Ministry of Corporate Affairs ("MCA") from time to time.
(xxiv) Carrying out any other function as may be assigned to the Committee by the Board from time to time;
Composition & Attendance at the Meeting
The Committee met 5 (five) times during the year i.e. February 19, 2015; May 7, 2015, June 27, 2015, August 13, 2015 and November 6, 2015 .
Mrs. Varsha Adhikari, Company Secretary, acts as the Secretary to the Committee.
The Chairman of the Audit Committee was present in the last Annual General Meeting to answer
the shareholders queries.
3.2 NOMINATION AND REMUNERATION COMMITTEE:
The terms of reference of the Nomination and Remuneration Committee have been formulated
in line with the requirement of Section 178 of the Companies Act, 2013 and rules framed thereunder and as per Listing Regulations.
Terms of Reference
Brief terms of reference of Nomination and Remuneration Committee are as under:
• Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;
• Formulation of criteria for evaluation of Independent Directors and the Board;
• Devising a policy on Board diversity;
• Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.
Composition & Attendance at the Meeting
The composition of the Nomination and Remuneration Committee and details of meetings attended by the Members of the Nomination and Remuneration Committee during the financial year 2015 are given below:
Mr. Eiko Ris has been appointed as a Member of Nomination and Remuneration Committee w.e.f. February 16, 2016.
The Nomination and Remuneration Committee of the Company is empowered to review the remuneration of the Managing Director / Executive Director’s and retirement benefits to be paid to them.
The Nomination and Remuneration Committee met 3 (three) times during the year on February 19, 2015, May 7, 2015 and June 27, 2015.
Mrs. Varsha Adhikari, Company Secretary acts as the Secretary of the Committee.
The Remuneration policy of the Company is performance driven and is structured to motivate employees, recognize their merits and achievements, in order to retain the talent in the company and stimulate excellence in their performance.
The Board of Directors/Nomination and Remuneration Committee of Directors is authorized to decide the remuneration of the Managing Director/Executive Director's, subject to the approval of the Members and Central Government, if required. Remuneration comprises of fixed Components viz. salary, perquisites and allowances and a variable component comprising of Gross Bonus of minimum 37.5% and maximum of 52.5% of annual fixed salary (as per the scheme applicable to Managing Directors' of SPGPrints Operating Companies) based on the targets achieved.
The Nomination & Remuneration Policy of the Company is available on the Website of the Company at www.stovec.com.
3.3 STAKEHOLDERS RELATIONSHIP COMMITTEE
The terms of reference of the Stakeholder’s Relationship Committee have been formulated in line with the requirement of Section 178 of the Companies Act, 2013 and rules framed thereunder and as per Listing Regulations.
Terms of Reference:
The brief terms of reference of the Stakeholders Relationship Committee are as under:
• The Stakeholders Relationship Committee shall consider and resolve the grievances of security holders.
Mrs. Varsha Adhikari, Company Secretary, who is the Compliance Officer, can be contacted at:-
Stovec Industries Limited
N.I.D.C., Nr. Lambha Village, Post: Narol, Ahmedabad, Gujarat - 382 405, India.
Tel: +91 79 3041 2300 Fax: +91 79 2571 0406 Email: firstname.lastname@example.org
Complaints or queries relating to the shares can be forwarded to the Company's Registrar and Transfer Agents 'M/s Link Intime India Private Limited' at email@example.com. The Compliance officer has been regularly interacting with the Share Transfer Agents to ensure that shares related complaints of the investors are attended to without undue delay and where deemed expedient the complaints are referred to the committee or discussed at the meetings.
3.4 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
During the year, the Corporate Social Responsibility Committee met 2 (two) times i.e. on February 19, 2015 and August 13, 2015.
Terms of Reference:
The Committee is primarily responsible for formulating and recommending to the Board of Directors a Corporate Social Responsibility (CSR) Policy and monitoring the same from time to time, amount of expenditure to be incurred on the activities pertaining to CSR and monitoring CSR activities.
The Company has formulated CSR Policy and the same is available at the website of the Company at www.stovec.com at http://www.spgprints.com/include/files/About_us/Stovec/Policies/ CSR_Policy.pdf link.
Mrs. Varsha Adhikari, Company Secretary, acts as the Secretary to the Committee.
4. CODE OF BUSINESS CONDUCT AND ETHICS
The Company has in place, a Code of Business Conduct and Ethics for its Board Members and the Senior Management. The Board and the Senior Management affirm compliance with the code annually.
6.1 Besides the transactions mentioned elsewhere in the Annual Report, there were no other materially significant related party transactions that may have potential conflict with the interests of the Company at large.
6.2 The Company has complied with various rules and regulations prescribed by Stock Exchanges, Securities and Exchange Board of India or any other statutory authority relating to the capital markets during the last 3 years. No penalties or strictures have been imposed by them on the company.
6.3 Pursuant to the provisions of Regulation 17 (8) of the Listing Regulations, the Managing Director and the Chief Financial Officer have issued a certificate to the Board for the financial year ended December 31, 2015.
6.4 Whistle Blower Policy:
The Company has in place a Whistle Blower Policy through which Directors, Employees and other Stakeholders may report their genuine concerns or grievances. The Whistle Blower Policy of the Company has been disclosed on the website of the Company at www.stovec.com.
No personnel has been denied access to the Audit Committee to report its genuine concerns or grievances.
6.5 Related Party Transactions
There were no materially significant related party transactions except transaction(s) with respect to purchase of raw material and components from M/s SPGPrints B.V., the Holding Company of the Company, the details of which are disclosed in the explanatory statement annexed to the notice of 42nd Annual General Meet ing and will be placed before the shareholders for their approval by way of Ordinary Resolution. Related Party Transaction Policy has been formulated in order to regulate the transactions between Company and Related Parties. The Related Party Transaction Policy is available at the website of the Company at www.stovec.com at http://www.spgprints.com/include/files/About_us/Stovec/ Policies/Related_Party_Transaction Policy.pdf link.
6.6 Risk Management
As required by Listing Regulations, the Risk Management Policy has been formulated and the same is available at the website of the Company at www.stovec.com.
6.7 Policy for Prohibition of Insider Trading and Code of Conduct for Fair Disclosures
The Company has adopted a Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and Code of Conduct for fair disclosures pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, which became effective from May 15, 2015.
6.8 Policy for determining Material Subsidiaries
The Company has formulated Policy for determining Material Subsidiaries and the same is available at the website of the Company at www.stovec.com at http://www.spgprints.com/ include/files/About_us/Stovec/Policies/Policy_for_determining_Material_Subsidiaries.pdf.
6.9 Policy for determining Material Information
As required by Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have approved the Policy for determining Material Information, which is effective from December 1, 2015 and is available at the website of the Company at www.stovec.com at http://www.spgprints.com/include/files/About_us/Stovec/ Policy_for_determining_ Material_Information.pdf.
6.10 Policy for Preservation of Documents and Archival Policy
As required by Regulation 9 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have approved the Policy for Preservation of Documents and Archival Policy and the same is available at the website of the Company at www.stovec.com at http://www.spgprints.com/include/files/About_us/Stovec/Policies/ Policy_for_Preservation_of_ Documents___Archival_Policy.pdf.
6.11 Disclosure of Accounting Treatment
The Company in the preparation of financial statements has followed the treatment laid down in the Accounting Standards prescribed by the Institute of Chartered Accountants of India. There are no audit qualifications in the Company's financial statements for the year under review.
6.12 Disclosure of Commodity Price Risks, Foreign Exchange Risk and Commodity Hedging Activities
High quality Nickel, which is the principal raw material for the Company is imported regularly, as per Purchase guidelines of the Company. The Company's performance may get impacted in case of substantial change in prices of Nickel or Foreign Exchnage rate fluctuations. The Company does not undertake commodity hedging activities.
6.13 Adoption of Non-Mandatory Requirements of Listing Regulations
The Company has separate persons for the position of Chairman and Managing Director.
Mr. K.M. Thanawalla is a Chairman (Independent & Non - Executive) and Mr. Shailesh Wani is the Managing Director of the Company.
7. SUBSIDIARY COMPANY
Atul Sugar Screens Private Limited is the Wholly Owned Subsidiary of the Company. The provisions of Regulation 24 of the Listing Regulations, as applicable, have been complied with.
8. MEANS OF COMMUNICATION
The Company has published quarterly, half yearly as well as annual results in the following News Papers:
Type of Result Date on which Daily News Paper Daily News Paper
Published (English) (Gujarati)
Quarterly of March 31, 2015 May 9, 2015 Business Standard Loksatta Jansatta
Quarterly of June 30, 2015 August 14, 2015 Business Standard Jaihind
Quarterly of September 30, 2015 November 7, 2015 Business Standard Jaihind
Annual as on December 31, 2015 February 18, 2016 Business Standard Jaihind
The quarterly and annual financial results of the company are also updated on the company's website viz. www.stovec.com and of the website of BSE viz. www.bseindia.com.
The Annual Report, Quarterly Results, Quarterly Corporate Governance Report and Shareholding Pattern of the Company are filed with the Stock Exchanges within the prescribed time.
9. GENERAL INFORMATION FOR MEMBERS
9.1 Annual General Meeting
Date and Time 25th day of May, 2016 at 11.00 A.M.
Venue Stovec Industries Limited
N.I.D.C., Nr. Lambha Village, Post: Narol, Ahmedabad–382405.
9.2 Financial Calendar:
Financial Year Ending December 31, 2015
Date of Book Closure May 19, 2016 to May 25, 2016 (both days inclusive)
Dividend Payment Date Amount of Dividend will be deposited with the bank within 5 days of approval of Dividend by the Shareholders in the forthcoming Annual General Meeting and its payment will be made within 30 days of its declaration.
The Company's shares are listed on the BSE Limited (BSE) and Ahmedabad Stock Exchange Limited (ASE). The Company has paid annual listing fees to both the stock exchanges in respect of the year 2015-2016.
9.4 The following are the listing details of the Company’s Shares
Type of Shares
ISIN No. INE755D01015
BSE 504959 ASE 57410
9.6 Registrar and Transfer Agents:-
For transfer lodgement, delivery and correspondence related to Shares, Members are requested to do correspondence with the Company's Registrar and Share Transfer Agents - M/s Link Intime India Private Limited quoting their folio no. at the following address:-
M/s Link Intime India Private Limited,
Unit No. 303, 3rd Floor, Shoppers Plaza - V, Opp. Municipal Market, Behind Shoppers Plaza II, Off. C.G. Road, Ahmedabad - 380 009.
Tel: +91(0) 79 - 2646 5179 Fax: +91(0) 79 - 2646 5179.
9.7 Share Transfer System:
The Board has issued Power of Attorney to Registrar and Share Transfer Agent, M/s. Link Intime India Pvt. Ltd., to approve transfer of shares.
9.8 Reconciliation of Share Capital Audit & Certificate pursuant to Clause 47 (c) of the listing agreement:
A qualified Practicing Company Secretary carried out a Reconciliation of Share Capital Audit to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital.
The audit confirms that the total issued/paid up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialized form (held with NSDL and CDSL).
Pursuant to Clause 47(c) of the erstwhile Listing Agreement with the Stock Exchanges, certificate on half-yearly basis have been issued by a Practicing Company Secretary for due compliance of share transfer formalities by the Company.
9.9 Report on Corporate Governance:
The Company regularly submits to the Stock Exchanges, within the prescribed period, quarterly reports on Corporate Governance. A Certificate from the Practicing Company Secretary on Compliance of conditions of Corporate Governance is attached as annexure to the Report.
9.10 Dematerialization of Shares & Liquidity
As on December 31, 2015, shares comprising 93.59 % of the Company's Equity Share Capital have been dematerialized.
ISIN No.:- INE755D01015
9.11 Plant Location & Address for Correspondence:
Stovec Industries Limited
N.I.D.C., Nr. Lambha Village, Post: Narol, Ahmedabad, Gujarat – 382 405, India.
CIN : L45200GJ1973PLC050790 Tel : +91 79- 3041 2300
Facsimile No : +91 79- 2571 0406 Website : www.stovec.com E-mail : firstname.lastname@example.org