REPORT ON CORPORATE GOVERNANC
The Directors present the Company's Report on Corporate Governance for the year ended 31st March, 2016, in terms of regulation 34 read with Schedule - V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations')
1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
The Company's philosophy on Corporate Governance is interwoven in the ethical governance practices followed by the Company commensurate with its size, complexity, international operations and traditional ethical values. We believe that success and sustainability can be achieved only with the highest standards of corporate conduct towards all stakeholders -employees, shareholders, consumers and the community at large - by following the principles of accountability, integrity and responsibility in dealings with them.
The Company has complied with all the requirements of Corporate Governance in terms of Clause 49 of Listing Agreement and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the best practices are followed to achieve its goals on Corporate Governance.
2. BOARD OF DIRECTORS:
(a, b & c) Composition and attendance of Directors at the meetings of the Board and at Annual General Meeting and their other Directorships etc.:
During the financial year 2015-16 the Board of Directors comprised of the Managing Director, an Executive Director and eight non-executive directors including the Chairman. The Chairman of the Board is a promoter-non-executive Director. Five of the eight non-executive Directors are Independent Directors as defined in the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 149(6) of the Companies Act, 2013.
The composition and categories of Directors on the Board during the period 01.04.2015 to 31.03.2016 and details about meetings of the Board and various Committees held and attended by them, attendance in last AGM, directorships in other companies, Chairmanship/Membership in Committees of other companies, and web link where details of familiarisation programmes imparted to independent directors are given in the following table.
Detailed agenda notes were made available to the Directors in respect of the matters listed in Part-A of Schedule-II of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, 7 (seven) days prior to the date of Meetings, as required under Secretarial Standard - 1 -'Meeting of the Board of Directors'.
COMMITTEES OF THE BOARD:
Currently, the Board has the following committees:
• Audit Committee
• Nomination & Remuneration Committee
• Stakeholders Relationship Committee
• Corporate Social Responsibility Committee
• Finance & Capex Committee
The Non-Executive Directors are paid sitting fees for attending the meetings of the above Committees. These Committees meet as and when the need arises and the minutes of their meetings are placed before the Board in its next meeting for the Board to take note thereof
3. AUDIT COMMITTEE:
(a) Brief description of Terms of Reference of the Audit Committee:
• Recommendation for appointment, remuneration and terms of appointment of Statutory Auditors, Cost Auditors, Internal Auditors and Secretarial Auditors of the Company;
• Review and monitor the Auditors' independence and performance, and effectiveness of Audit process;
• Examination of the financial statement and the Auditors' report thereon;
• Approval or any subsequent modification of transactions of the Company with related parties;
• Omnibus approval of Related Party Transactions;
• Scrutiny of inter-corporate loans and investments;
• Valuation of undertakings or assets of the Company, wherever it is necessary;
• Evaluation of internal financial controls and risk management systems;
• Monitoring the end use of funds raised through public offers and related matters
(b) Composition, names of members and Chairperson:
The Audit Committee of the Board consists of the following three Independent Directors and one Promoter- Non-Executive Director:
1. Shri Ninad D. Gupte : Independent Director (Chairman of the Committee)
2. Shri Nimish U. Patel : Independent Director
3. Shri Hemant J. Bhatt : Independent Director
4. Shri Dipesh K. Shroff : Promoter, Non-Executive Director
All the members of the Audit Committee have accounting or financial management expertise by virtue of their having been Chief Executive Officers or possessing the requisite professional qualification or certification in accounting and management
The Chairman of the Audit Committee was present at the last Annual General Meeting held on 21st September, 2015.
4. NOMINATION &REMUNERATION COMMITTEE:
(a) Brief description of Terms of Reference:
• 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 directors, key managerial personnel and other employees;
• Formulation of criteria for evaluation of performance of Independent Directors and the Board and carrying out evaluation;
• 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. The Company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.
(b) Composition, names of members & Chairman:
The Nomination and Remuneration Committee of the Board consists of the following two Independent Directors and one Promoter, Non-Executive Director:
1. Shri Ninad D. Gupte : Independent Director (Chairman of the Committee)
2. Shri Nimish U. Patel : Independent Director
3. Shri Dipesh K. Shroff : Promoter, Non-Executive Director
(d) Performance Evaluation:
Pursuant to the provisions of Section 178 of the Companies Act, 2013 and sub-regulation (4) of Regulation 19 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee laid down the criteria for performance evaluation of Independent Directors and other Directors, Board of Directors and its Committees and inputs were obtained from the Directors in structured questionnaires. The criteria for Performance Evaluation cover the areas relevant to their functioning as Director on the Board of the Company and as member of the Committees of the Board. An exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as oversight of Management, Interaction with Senior Management, Adequacy of Information & Timeliness, Board Dynamics, Stakeholders' Management, discharge of responsibility, conduct of meetings, composition and skills, preparedness and attendance at meetings, understanding Company's operations and Key Competency/ area of knowledge, contribution at Board Meetings/Quality of inputs, interpersonal skills, confidentiality etc. The performance evaluation of the Independent Directors had also been carried out by the other Directors on the Board. The Directors expressed their satisfaction with the evaluation process.
5. REMUNERATION OF DIRECTORS:
(a) During the year under review, there were no pecuniary relationship or transactions of the non-executive directors vis-à-vis the Company. The details of payment of sitting fees and commission made to the non-executive directors are given below. The details of related party transactions are given separately in this report and in the Notes on Accounts in the Annual Report.
(b) The non-executive Directors are paid sitting fees for attending meetings of the Board and of Committees of Directors. In addition, as approved by the members of the Company, a commission not exceeding in the aggregate 1% per annum of the net profits of the Company computed in the manner laid down in Section 198 of the Companies Act, 2013,in such proportion and manner as the Chairman may decide shall be payable to non-executive Directors of the Company.
The non-executive Directors were paid sitting fee of Rs.20,000/- for each meeting of the Board and various Committees except in the case of meetings of Stakeholders Relationship Committee where the sitting fees paid was Rs.10,000/- for each meeting. The non-executive Directors were also paid commission upto 1% in the aggregate for the year 2014-2015 as detailed below:
** The Managing Director of the Company is paid performance incentive linked with the performance of the Company at the rate of 1.5% of PBT and the Executive Director is paid Commission at the rate of 1% of the Net Profits as calculated under Section 198 of the Companies Act, 2013.
The above remuneration of the executive director is within the limits approved by the shareholders. 5(c)(iii) Service contracts, notice period, severance fees:
The employment of the Managing Director and Executive Director is contractual for a period of five years and terminable by either party giving three months' notice. As per the terms of contract, in the event of non-renewal or premature termination of the Contract by the Company, the Managing Director is entitled to receive compensation equivalent to 12 months' salary and perquisites as applicable at the time of such termination.
5(c)(iv) Stock option details, if any and whether issued at a discount as well as the period over which accrued and over which exercisable:
The Company does not have any Stock Option Scheme and did not issue any Stock Options during the Financial Year 20152016.
6. STAKEHOLDERS RELATIONSHIP COMMITTEE:
(A) Stakeholders Relationship Committee as constituted by the Board pursuant to the provisions of Section 178 of the Companies Act, 2013, Clause 49 of Listing Agreement and Regulation 20 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is being headed by Shri Nimish U. Patel, Independent Director of the Company. Other members of the Committee include Shri Atul G. Shroff, Managing Director of the Company and Shri Hemant J. Bhatt, Independent Director of the Company.
(B) Shri Alak D. Vyas, Dy. Company Secretary and Compliance Officer of the Company also acts as the Secretary of this Committee.
8. MEANS OF COMMUNICATION:
(A & B) The un-audited quarterly and summarized annual audited results have been submitted to the BSE Limited and are published in any of the two newspapers- (one English newspaper and one Vernacular) - from among Business Standard (Ahmedabad Edition); Vadodara Samachar (Vadodara Edition); Indian Express (Vadodara Edition) and Financial Express (Ahmedabad Edition).
(C) The financial results are also placed on the Company's Website - 'www.transpek.com' and are also available on the website of BSE Ltd. 'www.bseindia.com'
(D) The Company has not issued any press note during the year.
(E) The Company has not held any analyst meet/investors conference during the year and no presentations were made to Institutional Investors or to the analysts.
9. GENERAL SHAREHOLDER INFORMATION:
a. Date, time and venue of Annual General Meeting: On Friday, the 5th August, 2016 at 3.30 PIM. at Hotel Surya Palace, Opp: Parsi Agiyari, Sayajigunj, Vadodara - 390 020.
b. Financial calendar:
i. Financial year : 1st April to 31st March
ii. First quarter results : on or before 15th August, 2016
iii. Half yearly results : on or before 15th November 2016
iv. Third quarter results : on or before 15th February, 2017
v. Results for the F.Y.2015-16 : on or before 30th May, 2017
c. Dividend Payment date : within 30 days after 5th August, 2016
d. Stock Exchange Listings : The BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001. The Company has paid Annual Listing Fees to the BSE Limited for the F.Y. 2015-16.
e. Stock code: '506687'; or 'Transpek'
ISIN No.: INE 687A01016 for dematerialization.
Registrar to an issue and Share Transfer Agent:
The Company's Registrar & Share Transfer Agent is M/s. Link Intime India Private Limited. The address of Company's RTA is as under:
(i) Registered Office:
Link Intime India Private Limited, C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai 400 078 Phone: 022- 5555 5454 Fax : 022- 25672693 Website: www.linkintime.co.in
(ii) Branch Office:
Link Intime India Private Limited B - 102 & 103 Shangrila Complex 1st Floor, Nr. Radhakrishna Char Rasta Akota, Vadodara - 390020 Phone : 0265- 2356794, 2356573 Fax : 0265-2356791 Email: email@example.com firstname.lastname@example.org email@example.com
Share Transfer System:
All the transfer requests received are processed by the Registrar and Share Transfer Agent and are approved by the Committee of Sr. Officials of the Company, which meets every ten days. Share transfers are registered and returned within a maximum of 15 working days from the date of lodgment if documents are complete in all respects.
l. Dematerialization of Shares and liquidity:
The Company has entered into agreements with both National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) whereby shareholders have an option to dematerialize their shares with either of the depositories. As on 31-03-2016, 5607536 nos. of equity shares representing 95.50% of the paid up capital are held by 3710 shareholders in dematerialized form and 264504 nos. of equity shares representing 4.50% of the paid up capital are held by 4017 shareholders in physical form. The shares of the Company are regularly traded in electronic mode on the BSE Ltd., which has nationwide online trading facility and which provides adequate liquidity.
m. There are no outstanding Global Depository Receipts or American Depository Receipts or warrants or any convertible instruments.
n. Commodity price risk or foreign exchange risk and hedging activities: The Company has framed a Foreign Exchange Risk Management Policy for hedging activities which takes care of foreign exchange risk.
o. Plant locations:
Transpek Industry Limited At & Post -Ekalbara 391 440, Taluka Padra, Dist. Vadodara Telephone: 02662-244444,244289, 244309, 244318, 244276 Website : 'www.transpek.com'
p. Address for correspondence:
Shri Alak D. Vyas Dy. Company Secretary & Compliance Officer Transpek Industry Ltd, 6th Floor, Marble Arch, Race Course, Vadodara 390 007. Telephone : 0265-2335444,2335446, 2335447, 2334141, 2358236, 2335757, 2342262 Fax : 0265-2335758 E-mail : firstname.lastname@example.org Website : 'www.transpek.com'
Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participants.
10. OTHER DISCLOSURES:
a. Disclosure on materially significant related party transactions that may have potential conflict with the interests of the listed entity at large:
Among the related party transactions are contracts or arrangements made by the Company from time to time in the ordinary course of business and on arm's length basis with the companies in which the Directors are interested. All these contracts or arrangements are entered in the 'Register of Contracts in which Directors are interested' maintained under Section 189 of the Companies Act, 2013 and the Register is placed before the Audit Committee and the Board from time to time. Prior omnibus approval of the Audit Committee had also been obtained for entering into certain Related Party Transactions. During the year, the Company had entered into related party transactions with M/s. Anshul Life Sciences and the same are in line with the approval accorded by the shareholders for such material related party transactions at the 49th Annual General Meeting held on 21st September, 2015. The material related party transactions have been disclosed in Form "AOC - 2", annexed to the Directors' Report.
The Company has also framed a Related Party Transactions Policy pursuant to the provisions of the Companies Act, 2013 read with Regulation 23 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is available on the Company's website 'www.transpek.com'
Particulars of transactions between the Company and related parties as per the Accounting Standard 18 "Related Party Disclosures" notified under Section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Audit and Accounts) Rules, 2014 are given under Note No.29(C) of the Standalone Annual Accounts for the financial year 2015-16.
b. Statutory Compliance, Penalties and Strictures:
There has neither been any non-compliance of any of the provisions of law by the Company nor any penalty or stricture imposed by the Stock Exchange or SEBI or any other statutory authority on any matter related to capital markets during the last three years.
c. Whistle Blower Policy:
The Company promotes ethical behaviour in all its business activities and has put in place a mechanism of reporting illegal or unethical behaviour. The Company has adopted a whistle blower policy wherein the employees are free to report violations of laws, rules, regulations or unethical conduct. The confidentiality of those reporting violations shall be maintained and they will not be subjected to any discriminatory practice. The Company affirms that no personnel have been denied access to the Audit Committee. Vigil Mechanism/Whistle Blower Policy is attached as Annexure to the report of the Board of Directors and is also available on the Company's website www.transpek.com/pdf/whistle-blower- policy.pdf.
d. Details of compliance with mandatory requirements and adoption of the non-mandatory requirements
The Company has complied with all the mandatory requirements and have not adopted non-mandatory requirements.
e. The Company does not have any material subsidiary company and hence policy for determining material subsidiaries has not been adopted.
f. Policy on dealing with related party transactions is available on the website of the Company 'www.transpek.com/pdf/ policy-on-related-party-transactions.pdf'
g. Commodity price risks and commodity hedging activities: As informed above, the Company has framed a Foreign Exchange Risk Management Policy for hedging activities which takes care of foreign exchange risk.
11. The Company has complied with the requirements of Corporate Governance report as disclosed in paras 2 to 10 above.
12. Compliance of Discretionary requirements under Part E of Schedule II of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
1. The Board: The Chairperson does not maintain his separate office at the Company's expense.
2. Shareholder Rights: The Company publishes the financial results in news papers and places on its website and does not send it to the shareholders.
3. Modified opinion(s) in audit report: The Audit opinion received by the Company has not been modified.
4. Separate posts of chairperson and chief executive officer: The Company already has two separate persons for the post of Chairperson and Chief Executive Officer (Managing Director).
5. Reporting of internal auditor: The Internal Auditor of the Company directly reports to the Audit Committee of the Company, and their Internal Audit Reports are presented in the meetings of the Audit Committee.
13. Compliance with Corporate Governance requirements specified in Regulations 17 to 27and clauses (b) to (i) of sub-regulation (2) of regulation 46 of the SEBI (LODR) Regulations, 2015.
The Company has complied with Corporate Governance requirements as specified in regulations 17 to 27 relating to Board of Directors; Audit Committee; Nomination and Remuneration Committee; Stakeholders Relationship Committee; Risk Management Committee (voluntarily constituted); Vigil Mechanism; Related Party Transactions, Corporate Governance Requirements with respect to subsidiary Company (The Company has one subsidiary incorporated outside India which is not a material subsidiary company); obligations with respect to Independent Directors, other Directors and Sr. Management. The information and documents specified under clauses (b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been placed on the website of the Company.
D. CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCT POLICY
This is to confirm and certify that the Company has adopted a Code of Conduct for Board Members and Senior Management Personnel. As provided under sub-regulation (3) of Regulation 26 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board Members and Senior Management Personnel have confirmed compliance with the Code of Conduct and Ethics for the year ended 31st March, 2016.
Transpek Industry Ltd.
Sd/- Atul G. Shroff
Date : 14.06.2016
Place : Vadodara