REPORT ON CORPORATE GOVERNANCE
1) MANDATORY REQUIREMENT
CORPORATE GOVERNANCE PHILOSOPHY
Transparency and accountability are the two basic tenets of Corporate Governance. At TIMEX, we feel proud to belong to a Company whose visionary founders laid the foundation stone for good governance long back and made it an integral principle of the business. Responsible corporate conduct is integral to the way we do our business. Our actions are governed by our values and principles, which are reinforced at all levels within the Company
We, at TIMEX, ensure that we evolve and follow the corporate governance guidelines and best practices. We consider it our inherent responsibility to disclose timely and accurate information regarding our financials and performance as well as the leadership and governance of the Company.
The Board is responsible for and committed to sound principles of Corporate Governance in the Company. The Board plays a crucial role in overseeing how the management serves the short and long term interests of shareholders and other stakeholders. This belief is reflected in our governance practices, under which we strive to maintain an effective, informed and independent Board. We keep our governance practices under continuous review and benchmark ourselves to best practices across the globe.
Composition of Board
The composition of Board of Directors of the Company is in conformity with the requirements of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as well as section 149 of Companies Act 2013. Currently, the Board consists of 8 Directors comprising 1 Executive Director, 4 Non-Executive and Independent Directors, and 3 Non-Executive Directors. All the Directors are well qualified professionals in their respective arenas. The Board has no institutional nominee directors. We believe that an active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance
b) Appointment/Re-appointment of Director(s)
Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and Articles of Association of the Company, Mr. David Thomas Payne was appointed as an additional director of the Company with effect from May 12, 2016. Mr. Payne holds the office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing the appointment of Mr. Payne as a director. The Board recommends his appointment as Director, liable to retire by roation.
As per the Companies Act, 2013, one-third of the Directors retires by rotation and, if eligible, seeks re-appointment at the AGM of shareholders. Mr. Colin Davis Arsenault will retire at the ensuing AGM and being eligible, seek re-appointment. The Board has recommended the re-appointment of the retiring Director.
Ms. Sharmila Sahai was re-appointed as the Managing Director of the Company for a term of two years with effect from 18th November, 2015.
Mr. Ryan Todd Roth ceased to be Director and Vice-Chairman of the Company with effect from 21st March, 2016.
c) Board Meetings
The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board businesses. The Board / Committee Meetings are pre-scheduled and a tentative annual calendar of the Board and Committee Meetings is circulated to the Directors well in advance. Agenda papers are sent to the Directors generally one week before the meeting to facilitate meaningful and focused discussions at the meeting. In case of exigencies or urgencies, resolutions are considered by Circulation as well.
The Board met five times during financial year 2015-2016 on 21st May, 2015, 6th August 2015, 3rd November, 2015,
4th February, 2016 and 30th March, 2016 to consider amongst other business matters, the quarterly performance of the Company and financial results. The gap between no two Board meetings exceeded one hundred and twenty days. Directors attending the meeting actively participated in the deliberations at these meetings.
• Board Independence
The definition of 'Independence' of Directors is derived from Section 149(6) of the Companies Act, 2013 and the rules made thereunder, and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Based on the confirmation /disclosures received from the Independent Directors and on evaluation of their relationships disclosed, they are Independent in terms of Section 149(6) of the Companies Act, 2013 and the rules made thereunder, and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
• Information provided to the Board
The Board has unrestricted access to all Company-related information including that of our employees. Presentations are also made to the Board by different functional heads on important matters from time to time. Directors have separate and independent access to the officers of the Company. The Board was presented with the information broadly on all suggested matters in terms of Regulation 17 of the SEBI Listing Obligations and Disclosure Requirements) Regulations, 2015.
INDEPENDENT DIRECTORS MEETING
A meeting of Independent Directors of the Company was held on 4th February, 2016 which marked the presence of all the Independent Directors of the Company. The Directors discussed the performance of non-independent directors and the Board as a whole, reviewed the performance of Chairman, discussed the quality, quantity and timeliness of flow of information between the management and the Board.
The Board Committees play a crucial role in the governance structure of the Company and have been constituted as per the requirement of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board Committees are set up under the formal approval of the Board to carry out clearly defined roles. The minutes of the meetings of all Committees are placed before the Board for review. The Board Committees request special invitees to join the meeting, as and when considered appropriate.
a) Audit Committee
The Company has adequately qualified and independent Audit Committee. Currently, Audit Committee comprises of six Directors: Ms. Gagan Singh, Mr. Daya Dhaon, Mr. Pradeep Mukerjee, Mr. Bijou Kurien, Mr. Colin Davis Arsenault and Mr. David Thomas Payne. Four of the six members on the Committee are independent directors. The Committee is chaired by Ms. Gagan Singh, who is an independent Director having vast experience and expertise in the area of finance and accounts. Mr. Bijou Kurien is the Vice Chairman of the Committee.
The Company Secretary of the Company acts as the Secretary to the Committee.
The role of the Audit Committee, inter-alia, includes the following:
1. Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
2. Recommendation for appointment, remuneration and terms of appointment of auditors of the company and also approval for the payment of any other services;
3. Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:
a. Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of section 134(3)(c) of the Companies Act, 2013
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
4. Review and monitor the auditor's independence and performance, and effectiveness of audit process;
5. Approval or any subsequent modification of transactions of the company with related parties;
6. Evaluation of internal financial controls and risk management systems;
7. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
8. To review/oversee the functioning of the Whistle Blower/ vigil mechanism.
Audit Committee's composition and terms of reference are in compliance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year under review, the Audit Committee met four times on 21st May 2015, 6th August 2015, 3rd November, 2015 and 4th February, 2016
b) Nomination and Remuneration Committee
The Committee comprises of five Non- Executive Directors, namely Mr. Daya Dhaon, Ms. Gagan Singh, Mr. Pradeep Mukerjee, Mr. Colin Davis Arsenault and Mr. David Thomas Payne. Mr. Daya Dhaon, an Independent Director is the Chairman of the Committee. The Committee meets periodically as and when required. None of the Directors, except Managing Director draws remuneration from the Company.
Terms of reference of the Committee, inter alia, includes the following:
1. Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance.
2. Formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
3. Formulation of criteria for evaluation of Independent Directors and the Board;
4. Devising a policy on Board diversity;
5. To recommend/ review remuneration of Managing Director(s)/ Whole time Director(s).
6. Whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of the independent directors.
Performance evaluation criteria for Independent Directors
The Nomination and Remuneration Committee have developed parameterized feedback forms for the evaluation of the Independent Directors of the Company.
c) Stakeholders Relationship Committee
The Committee comprises of six Non-Executive Directors namely, Mr. Daya Dhaon, Ms. Gagan Singh, Mr. Pradeep Mukerjee, Mr. Bijou Kurien, Mr. Colin Davis Arsenault and Mr. David Thomas Payne. Mr. Daya Dhaon, an Independent Director is the Chairman of the Committee. The Company Secretary is the Secretary of the Committee and attends its meetings.
The Stakeholders Relationship Committee is primarily responsible for looking into the redressal of shareholders and other security holders, if any. The Committee considers and resolves the grievances of the security holders of the company including complaints relating to transfer and transmission of securities, non receipt of balance sheet, non receipt of declared dividends. To expedite the process of share transfers, the Board of the company has delegated the power of share transfer to Share Transfer Committee which attends to share transfer formalities.
The Stakeholders Relationship Committee's composition and terms of reference are in compliance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year under review, the Stakeholders Relationship Committee met four times on 21st May 2015, 6th August 2015, 3rd November, 2015 and 4th February, 2016.
Name and designation of compliance officer: Mr. Dhiraj Kumar Maggo - GM Legal & Company Secretary. Address: JA-1203, 12th Floor, DLF Tower A, Jasola, New Delhi-110025
d) Corporate Social Responsibility Committee
The Committee comprises of Ms. Gagan Singh, Ms. Sharmila Sahai and Mr. David Thomas Payne. The Company
Secretary is the Secretary of the Committee.
Terms of reference of the Committee includes the following:
a) To formulate and recommend to the Board, CSR policy which shall indicate the activities to be undertaken by the Company as per the Companies Act, 2013;
b) To review and recommend the amount of expenditure to be incurred on the activities to be undertaken by the Company;
c) To monitor the CSR policy of the Company from time to time.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance towards sexual harassment at the workplace and has formed committees called Internal Complaints Committee for prevention and prohibition of sexual harassment and redressal against complaints of sexual harassment of working women at the workplace as per Sexual Harassment of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013 read with Sexual Harassment of Women At Workplace (Prevention, Prohibition And Redressal) Rules, 2013 at all locations of the Company. This Internal Complaints Committee has the power/jurisdiction to deal with complaints of sexual harassment of working women as per the rules specified therein. All the employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the financial year 2015-16, no such complaints were received across the organisation .
CODE OF CONDUCT
The Company has formulated and adopted a Code of Conduct for its Board of Directors and senior management and has put the same on the company's website www.timexindia.com The Code has been circulated to all members of the Board and Senior Management and they have affirmed the compliance of the same. A declaration signed by the Managing Director of the Company is annexed hereto.
a) Related party transactions
Audit Committee has been reviewing the disclosure of Related Party Transactions periodically. None of the transactions with any of the related parties were in conflict with the Company's interest. Attention of members is drawn to the disclosure of transactions with related parties set out in Note no. 32 of Financial Statements, forming part of the Annual Report.
All related party transactions are negotiated on arms length basis, and are intended to further the Company's interests.
Company has formulated a "Related Party Transaction Policy" to ensure the proper approval and reporting of transactions between the Company and its Related Parties. This Policy as considered and approved by the Board has been uploaded on the website of the Company at www.timexindia.com
The Audit Committee/ Board may review and amend this policy from time to time.
b) Accounting treatment in preparation of financial statement
The Company has followed the Accounting standards notified by the Institute of Chartered Accountants of India, as amended from time to time, in preparation of its financial statements.
c) Certificate for transfer of Shares and Reconciliation of Share Capital
Pursuant to Regulation 40(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, certificates on half-yearly basis, have been issued by a Company Secretary-in-Practice with respect to due compliance of share transfer formalities by the Company.
Pursuant to SEBI (Depositories and Participants) Regulations, 1996, certificates have also been received from a Company Secretary-in-Practice reconciling the total shares held in both the depositories, viz. NSDL and CDSL and in physical form with the total issued / paid-up capital of the Company and submitted the same to the Stock Exchange where the securities of the Company are listed within 30 days of the end of each quarter.
d) Details of Non-compliance
The Company has complied with the requirements of the Stock Exchanges, SEBI and other statutory authorities on all matters relating to capital markets during the last three years. There has been no instance of non-compliance with any legal requirements, nor have there been any strictures imposed by any stock exchange or SEBI, on any matters relating to the capital market over the last three years.
e) Risk management
The Company has established a risk management framework where in a committee comprising of the senior executives of the Company has been established which periodically indentifies potential risks to the strategy of the Company and takes effective measures to mitigate the same in the best possible manner.
f) CEO/CFO certification
As required under Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managing Director and the Chief Financial Officer of the Company have certified to the Board regarding the Financial Statements for the year ended which is annexed to this Report.
g) Whistle Blower Policy
The Company is committed to adopt the best Corporate Governance Practices and to follow the highest possible moral, legal and ethical standards in the conduct of its business. In line with this commitment, Whistle blower Policy was designed to provide a mechanism for employees / Board Members and others to raise good faith concerns about unethical behaviour, actual or suspected fraud or violation of Company's Code of Conduct and to protect the individuals who take such actions from retaliation or any threat of retaliation. No person was denied the access to the Audit Committee.
h) The Company has fully complied with the mandatory requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 entered into with the Stock Exchange.
i) Discretionary Requirements.
The Company has maintained separate posts for Chairperson and Managing Director of the Company. Further the Internal Auditor has the direct access to the Audit Committee of the Company.
In accordance with requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Familiarization Programme for the independent directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. The details of such familiarization programme have been disclosed on the Company's website www.timexindia.com
Non Executive Directors including Independent Directors do not have any pecuniary relationships or transactions with the Company. However, the independent directors were paid sitting fees of Rs. 20,000/- for attending meetings of the Board of Directors or Committees.
MEANS OF COMMUNICATION
In accordance with Regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has maintained a functional website at www.timexindia.com containing information about the Company viz., details of its business, financial information, shareholding pattern, compliance with corporate governance, contact information of the designated officials of the Company who are responsible for assisting and handling investor grievances, details of conference calls/presentations to institutional investors or analysts etc. The contents of the said website are updated within 2 working days from the date of such change.
The quarterly and annual results are generally published in Business Standard (English and Hindi editions) and also displayed on the Company's website.
Further, the Company disseminates to the Stock Exchange (i.e. BSE Ltd.), wherein its equity shares are listed, all mandatory information and price sensitive/ such other information, which in its opinion, are material and/or have a bearing on its performance/ operations and for the information of the public at large.
GENERAL SHAREHOLDER INFORMATION
AGM: Day, Date, time and venue
Wednesday, 3rd August, 2016 at 10.00 am at Air Force Auditorium, Subroto Park, New Delhi-110010
April 1, 2015 to March 31,2016
Tentative calendar of events for the financial year 2016-17 (April- March)
To review and approve unaudited Financial Results for the quarter
First quarter – up to 14th August, 2016 Second quarter – up to 14th November, 2016
Third quarter – up to 14th February, 2017
Fourth quarter – up to 15th May, 2017 or alternatively up to 30th May, 2017 with Annual Results for the year ending on 31st March, 2017.
Book closure Date : 1st August 2016 to 2nd August 2016 (both days inclusive)
Listing of shares on Stock Exchanges
BSE Ltd., Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400001
JA-1203, 12th Floor, DLF Tower A, Jasola, New Delhi-110025.
Listing fees as prescribed has been paid to the Stock Exchange up to 31 March 2017
Registrar & Share Transfer Agents of the Company for both physical and electronic mode of share transfers.
Alankit Assignment Limited 1E/13 Alankit Heights, Jhandewalan Extension, New Delhi -110055 Contact Person: Mr. J K Singla Phones : 011-42541234 Fax : 011-23552001 Email : email@example.com firstname.lastname@example.org Website : www.alankit.com
SHARE TRANSFER SYSTEM
The Company has appointed M/s Alankit Assignment Limited as the Registrar and Shares Transfer Agent. Shares sent for transfer in physical form are registered by the Registrar and Share Transfer Agents within fifteen days of receipt of the documents, if found in order. Shares under objection are returned within two weeks. All requests for dematerialization of shares are processed, if found in order and confirmation is given to the respective depositories i.e. National Securities Depository Ltd (NSDL) and Central Depository Services (India) Limited (CDSL) within twenty-one days. The Board has delegated the authority for approving transfer, transmission etc. of the Company's securities to the Share Transfer Committee. A summary of transfer, transmission etc. of securities of the company so approved by the Share Transfer Committee is placed at the Board Meeting.
During the year, the company conducted a postal ballot for the equity shareholders in accordance with the provisions of Section 108, 110 and any other applicable provisions of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014.
Pursuant to the requirements of Companies Act 2013, the Company had offered the facility of e-voting to the shareholders in addition to the existing system and for this purpose the Company entered into an agreement with NSDL. The Postal Ballot Notice along with the Postal Ballot form and a postage pre-paid envelope were sent by Courier to all those shareholders whose e-mail IDs were not registered with the Company/ Depositories and by electronic mode by NSDL to all those shareholders who have registered their email IDs with the Company/ Depositories and for the same the Company had published an advertisement providing the details of the postal ballot. During the e-voting period, shareholders of the company, holding shares either in physical form or in dematerialized form had casted their vote electronically. The Postal Ballot Forms received within 30 days of dispatch along with the votes casted electronically were considered by the Scrutinizer and thereafter Scrutinizer submitted his report to the Company for declaration of results. The results were also placed at the website of the Company. The date of declaration of the results by the Company is deemed to be the date of passing of the resolutions.
Details of the voting pattern and resolutions are given below:
The stock code of the Company at BSE Ltd. : 500414
ISIN allotted by National Securities Depository Limited and Central Depositories Services (India) Limited for Equity Shares : INE064A01026
DEMATERIALISATION OF SHARES
Members are requested to convert their physical holdings to demat/electronic form through the registered Depository Participants (DPs) to avoid the hassles involved in dealing in physical shares such as possibility of loss, mutilation, etc. and also to ensure safe and speedy transaction in respect of the shares held. Shares received for dematerialization are generally confirmed within a maximum period of twenty one days from the date of receipt, if the documents are clear in all respects. There are 27536 no. of shareholders holding their shares in dematerialized form, which represent 97.13 % of the paid up capital of the Company.
FOREIGN CURRENCY RISK AND HEDGING ACTIVITIES
The Company is exposed to foreign currency risk due to imports of components and watches and export of watches. The Company had not indulged in currency hedging activities during the year under report.
COMMODITY PRICE RISK AND COMMODITY HEDGING ACTIVITIES
The Company is exposed to commodity price risk as per nature of its business. The Company had not indulged into commodity hedging activities during the year under report.
TIMEX GROUP INDIA LIMITED
Plot No-10, Baddi, Ind. Area Katha, Near Fire Station Baddi, Nalagarh, Solan, Himachal Pradesh.
ADDRESS FOR CORRESPONDENCE
Timex Group India Limited, JA-1203, 12th Floor, DLF Tower-A, Jasola, New Delhi-110025. Email: email@example.com