CORPORATE GOVERNANCE REPORT
1. Company's Philosophy on Corporate Governance:
The Company is fully committed to attainment of the highest levels of transparency, accountability and equity, in all facets of its operations, and in all its interactions with its shareholders, employees, suppliers, customers and the government.
The Company believes that all its operations and actions must serve the underlying goals of achieving business excellence and increasing long-term shareholder value.
Ethics/ Governance Policies:
The Company employees and the Board adhere to ethical standards to ensure integrity, transparency, independence and accountability in dealing with all stakeholders. The Company has adopted various codes and policies to carry out the functions/ duties in an ethical manner. Some of these codes and policies are:
• Code of Conduct
• Code of Conduct for Prohibition of Insider Trading
• Vigil Mechanism and Whistle Blower Policy
• Policy on Materiality of Related Party Transactions and on Dealing with Related Party Transactions
• Corporate Social Responsibility Policy
• Policy for Selection of Directors and determining Directors' Independence
• Remuneration policy for Directors, Key Managerial Personnel and other Employees.
2. Board of Directors:
As on March 31, 2015, the Company's Board comprised 11 Directors (out of which more than 50% of the Directors are Independent Directors) with Mr. Dinesh Munot as the Chairman & Managing Director.
The Board evaluates the Company's strategic direction, management policies, performance, objectives and effectiveness of Corporate Governance practices.
The Company has appointed Independent Directors who are renowned people having expertise/ experience in their respective field/ profession. None of the Independent Directors is Promoter or related to Promoters. They do not have pecuniary relationship with the Company and further do not hold two percent or more of the total voting power of the Company. None of the Independent Directors of the Company serves as an
Independent Director in more than seven listed companies and where any Independent Director is serving as whole-time director in any listed company, such director is not serving as Independent Director in more than three listed companies. All the Independent Directors hold office for five consecutive years from the date of their respective appointment. The Company has issued letter of appointment to all the Independent Directors, as per Schedule IV to the Companies Act, 2013 (the Act), containing the terms and conditions of their appointment.
The Board members are provided with necessary documents, reports, updates on statutory changes and internal policies to enable them to familiaise with the Company's procedures and practices.
With a view to familiarising the independent directors with the Company's operations, as required under Clause 49, the Company has held various familiarization programs for the independent directors. The details of familiarisation programs are placed on the Company's website www.zfindia.com
Meeting of Independent Directors
During the year, a separate meeting of the Independent Directors was held on March 27, 2015, without the attendance of non-independent directors and members of the management.
Board Meetings and Board-Committee Meetings
The Board has constituted five Committees, namely Audit Committee, Nomination & Remuneration Committee, Stakeholders' Relationship Committee, Corporate Social Responsibility (CSR) Committee and Risk Management Committee. The Board is authorized to constitute additional functional Committees, from time to time, depending on business needs.
Number of Board Meetings held with dates
The Board Meeting dates are normally pre-determined. During the year ended on March 31, 2015, the Board of Directors had 5 meetings. These were held on May 21, 2014, July 30, 2014, November 12, 2014, January 29, 2015 and March 2, 2015.
The information including as specified in Annexure IA to Clause 49 of the Listing Agreement entered into with BSE Limited is regularly made available to the Board, whenever applicable and materially significant, for discussion and consideration.
3. Audit Committee:
During the year under review, the following Directors were the members of the Audit Committee (the Committee). Members: Mr. S. A. Gundecha-Chairman, Mr. Manish Motwani- (up to 29.9.2014), Mr. M. L. Rathi and Mr. Jitendra A. Pandit. All the members of the Committee are NonExecutive Independent Directors. The role, powers and functions of the Audit Committee meet with requirements of Section 177 of the Act as well as Clause 49 of the Listing Agreement.
In addition to the members of the Committee, the Committee meetings were attended by the Chairman & Managing Director, Chief Financial Officer (CFO), Internal Auditor and the Statutory Auditors of the Company. The Company Secretary acted as the Secretary to the Committee.
The Committee reviews the financial statements before they are placed before the Board.
During the period under review, the Committee met 4 times on May 19, 2014, July 19, 2014, November 12, 2014 and January 29, 2015. The attendance record of the members of the Committee is given above (under Point No. 2) in tabular form.
The Committee is authorized by the Board in the manner as envisaged under Clause 49 (II) (C) of the Listing Agreement. The Committee has been assigned tasks as listed under Clause 49 (II) (D) of the Listing Agreement. The Committee reviews the information as listed under Clause 49(II) (E) of the Listing Agreement.
The Minutes of the Committee Meetings are noted by the Board of Directors at the Board Meetings. The Chairman of the Committee was present at the 34th Annual General Meeting held on July 30, 2014.
4. Nomination and Remuneration Committee (earlier 'Remuneration Committee'):
During the year under review, the nomenclature of the 'Remuneration Committee' was changed to 'Nomination and Remuneration Committee' (the Committee), as required under the provisions of Section 178 of the Act and revised Clause 49 of the Listing Agreement (effective October 1, 2014), related to Corporate Governance, entered into with BSE Limited.
During the year under review, following Directors were the members of the Committee. Members: Mr. M. L. Rathi - Chairman, Mr. Manish Motwani and Mr. Jitendra A. Pandit. The Company Secretary acted as the Secretary to the Committee.
Terms of Reference of the Committee, inter alia, includes the following:
- 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 to recommend to the Board their appointment and/ or removal
- To carry out evaluation of every Director's performance
- To 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
- To formulate the criteria for evaluation of Independent Directors and the Board
- To devise a policy on Board diversity
- To recommend/ review remuneration of the Executive Directors based on their performance and defined assessment criteria
The Minutes of the Committee Meetings are noted by the Board of Directors at the Board Meetings.
During the financial year, the Committee met on January 29, 2015. The attendance record of the members of the Committee is given above (under Point No. 2) in tabular form
The Nomination and remuneration policy is directed towards rewarding performance, based on review of achievements on a periodical basis. The policy is in consonance with the existing industry practice. The detailed Remuneration Policy is placed on the Company's website www.zfindia.com
The Committee lays down the criteria for performance evaluation of the Independent directors and other directors, Board of Directors and Committees of the Board of Directors. The Criteria for performance evaluation covers the areas relevant to their functioning as independent directors or other directors, member of Board or Committees of the Board. The criteria are placed on the Company's website www.zfindia.com
Policy on Board Diversity:
The Committee devises the policy on Board diversity to provide for having a broad experience and diversity on the Board
None of the Non-Executive Directors was paid any incentive or commission during the year. Mrs. Eitika Munot was employee of the Company, up to August 31, 2014, before she was appointed as Non Executive Director of the Company. During April 1, 2014 to August 31, 2014, she was paid Rs. 476,246 as salary. There was no other pecuniary relationship or transaction with any Non-Executive Director of the Company, during the year.
None of the Non-Executive Directors, except Mr. S. A. Gundecha, who holds 1,250 shares of the Company, holds any share in the Share capital of the Company.
5. Stakeholders' Relationship Committee:
The Stakeholders' Relationship Committee' (the Committee) was reconstituted by the Board on September 29, 2014. The Committee is primarily responsible to review all matters connected with the Company's transfer of securities and Redressal of shareholders'/ investors'/ security holders' grievances. The Committee looks into redressing of shareholders' complaints like transfer/ transmission of shares, non-receipt of Annual Report, non-receipt of declared dividends, etc. and recommends measures for overall improvement in the quality of investor services.
The Committee's composition and the terms of reference meet with the requirements of Clause 49 of the Listing Agreement and provisions of the Act.
During the year under review, following Directors were the members of the Committee. Members: Mr. Jitendra A. Pandit - Chairman, Mr. M. L. Rathi and Mrs. Eitika Munot. The Company Secretary acted as the Secretary to the Committee.
During the financial year, the Committee met on November 12, 2014. The attendance record of the members of the Committee is given above (under Point No. 2) in tabular form
The Company has an efficient system of dealing with investors' grievances. The Chairman & the Managing Director of the Company takes the personal interest in all matters of concern for investors. Mr. Satish Mehta - Company Secretary, being the Compliance Officer, carefully looks into each issue and reports the same to the Committee.
The total number of complaints received and resolved to the satisfaction of shareholders, during the year under review, was six. All the complaints were redressed to the satisfaction of the shareholders.
6. Corporate Social Responsibility (CSR) Committee:
The Corporate Social Responsibility Committee (the Committee)'s prime responsibility is to assist the Board in discharging its social responsibilities by way of formulating and monitoring implementation of the framework of Corporate Social Responsibility (CSR) Policy indicating the activities to be undertaken by the Company as per Schedule VII to the Act, recommending the amount of expenditure to be incurred and observe practices of Corporate Governance at all levels.
The Committee's constitution and terms of reference meet with the requirements of the Act.
During the year under review, the following Directors were the members of the Committee. Members: Mr. Dinesh Munot - Chairman and Managing Director, Mr. Jinendra Munot - Jt. Managing Director, Mr. Utkarsh Munot - Executive Director and Mr. M. L. Rathi - Independent Director. The Company Secretary acted as the Secretary to the Committee.
During the financial year, the Committee met on March 2, 2015. The attendance record of the members of the Committee is given above (under Point No. 2) in tabular form
7. Risk Management Committee:
The Risk Management Committee (the Committee) was constituted by the Board on September 29, 2014. The Committee's prime responsibility is to implement and monitor the risk management plan and policy of the Company.
During the year under review, the following Directors were the members of the Committee. Members: Mr. Jitendra A. Pandit - Chairman, Mr. Manish Motwani, and Mr. Utkarsh Munot - Executive Director. The Company Secretary acted as the Secretary to the Committee.
During the financial year, the Committee met on November 12, 2014. The attendance record of the members of the Committee is given above (under Point No. 2) in tabular form.
The Committee is inter-alia responsible for risk identification, evaluation and mitigation and control process for such risks, oversight the Enterprise Risk Management System and internal control process, monitoring and reviewing risk management plan of the Company and reviewing the foreseeable trends that could significantly impact the Company's overall business objectives and mitigation thereof
a. Transactions with related parties, as per requirements of Accounting Standard 18, are disclosed elsewhere in this Annual Report.
b. The Company has not entered into any transaction of a material nature, with any of the Related Parties, that may have a potential conflict with the interests of the Company at large. The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions and during the financial year 2014-15, there were no material transactions with related parties. The Policy is available on the website of the Company (www.zfindia.com).
c. With regard to matters related to capital markets, the Company has complied with all the requirements of the Listing Agreement as well as the regulations and guidelines of SEBI. No penalties were imposed or strictures passed against the Company by SEBI, BSE Limited or any other statutory authority, during the last three years in this regard.
10. Risk Management Framework:
The Company has in place a mechanism to inform the Board about the risk assessment and minimization procedures and periodical review to ensure that management controls risk through means of a properly defined framework.
11. Code of Conduct
The updated Code of Conduct includes duties of Independent Directors. The Code is available on the website of the Company www.zfindia.com
Pursuant to Clause 49 of the Listing Agreement, a confirmation from the Chairman & Managing Director regarding compliance with the Code by all the Directors and Senior Management forms part of this Report.
12. Code of Conduct for Prevention of Insider Trading:
With a view to regulate trading in shares by the directors and designated employees, the Company has adopted a Code of Conduct for Prevention of Insider Trading. The Code of Conduct is posted on the website of the Company. During the year under review, there has been due compliance with SEBI (Prohibition of Insider Trading) Regulations, 1992.
13. Whistle Blower Policy:
The Company has established a Vigil Mechanism/ Whistle Blower Policy to enable Directors and employees to report unethical behavior, actual or suspected fraud or violation of applicable laws and regulations and the Company's Code of Conduct. The Policy provides adequate safeguards against victimization of Directors(s) / employee(s).
The Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.
The Whistle Blower Policy has been disclosed on the Company's website www.zfindia.com
14. Means of Communication:
Quarterly Financial Results: The Quarterly Financial Results of the Company are published in the following leading 'Business Standard' (English newspaper) and 'Prabhat' (Marathi newspaper) and are also displayed on the Company's website, www.zfindia.com
Corporate Filing and Dissemination System: The financial and other information filed by the Company from time to time can be accessed on the URL www.corpfiling.co.in
News, Press Releases etc.: They are sent to BSE Limited as well as uploaded on the Company's website.
Presentations to Institutional Investors/ Analysts: During the year, no such presentations have been made.
Website: The Company's website www.zfindia.com contains a separate section 'Investors' where all important public domain information including information mandated to be provided pursuant to the Act and the Listing Agreement can be accessed. The Company's Annual Report (in a downloadable form), Quarterly Financial Results, Quarterly Shareholding Pattern, Chairman's Speech etc. are available on the site.
General Shareholder Information:
35th Annual General Meeting:
Day, date and time : Wednesday, September 23, 2015 at 4 p.m.
Venue :Registered. Office: Gat No. 1242/1244, Village - Vadu Budruk, Tal. Shirur, Pune- 412 216.
Financial Calendar (tentative):
The Company follows the period of April 1 to March 31, as the Financial Year. For the Financial Year 2015-16:
Adoption of Quarterly Results for
Quarter ending In the Month of
June 30, 2015 : July 2015
September 30, 2015 : October 2015
December 31, 2015 : January 2016
Annual Accounts : May 2016
36th Annual General Meeting : July 2016
Book Closure: September 17, 2015 to September 23, 2015 (both days inclusive).
Dividend and Dividend Payment Date:
The dividend of Rs. 10 per share for FY 2014-15, recommended by the Board of Directors, subject to approval by the shareholders at the ensuing Annual General Meeting will be paid on or after September 24, 2015 to those shareholders, whose names appear on the Company's Register of Members as on September 15, 2015.
Unclaimed dividend for the years prior to and including the FY 2006-07 has been transferred to the General Revenue Account/ the Investor Education and Protection Fund (IEPF), set up by the Central Government, as applicable. The shareholders who have not encashed their dividend - drafts for the financial years 2007- 08 are requested to claim the amount from the Company. As per the relevant provisions, any dividend remaining unclaimed for a period of seven years, shall be transferred to IEPF. No claims shall lie against the Company in respect of amount so transferred. Unclaimed Dividend for FY 2007-08 is due for transfer in August 2015.
Listing on Stock Exchange: The Company's Equity Shares are listed on BSE Limited,
Phiroze Jeejebhoy Towers, Dalal Street, Mumbai 400 001. The Company has paid the annual listing fees up to the financial year 201516.
Stock Code/ Symbol:
BSE : 505163
International Securities Identification Number (ISIN) : INE116C01012
Corporate identity Number (CIN)-allotted by Ministry of Corporate Affairs : L29130PN1981PLC023734
Custodial Fees to Depositories:
Annual Custody/ Issuer fee for the year 2015-16 will be paid by the Company to NSDL and CDSL on receipt of the invoices.
Registrar and Transfer Agents
Link Intime India Pvt. Ltd. (website :www.linkintime.com) (email: firstname.lastname@example.org)
Block No. 202, Akshay Complex, Near Ganesh Temple, Pune- 411001 Phone No. (020) 2616 1629/ 26160084 Fax No. (020) 2616 3503
C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W) Mumbai- 400078 Phone No. (022) 2596 3838 Fax No. (022) 2594 6969
Share Transfer System:
Share-transfers are processed by Link Intime India Pvt. Ltd. and share-certificates duly endorsed are delivered within a period of 15 days from the date of receipt, subject to documents being valid and complete in all respects. The Board has delegated the authority for approving transfer, transmission etc. of the shares to the Chairman & Managing Director and/ or Company Secretary. A summary of transfers / transmissions so approved, is placed at every Stakeholders' Relationship Committee. The Company obtains from a Company Secretary in Practice half-yearly Certificate of Compliance with the Share-transfer formalities as required under Clause 47(c) of the Listing Agreement and files a copy of the said Certificate with BSE Limited.
Dematerialization of Shares & Liquidity:
Considering the advantages of dealing in securities in electronic/ dematerialized form, shareholders still holding shares in physical form are requested to dematerialize their Shares at the earliest. For further information/ clarification/ assistance in this regard, please contact Link Intime India Pvt. Ltd., Registrar and Share Transfer Agents.
As per the directions of SEBI, Equity Shares of the Company can be traded by all the investors only in dematerialized form. The Company's Shares are traded on BSE Limited
Outstanding GDR, ADR or Warrants:
The Company has not issued so far any GDR, ADR or any Convertible instrument pending conversion or any other instrument likely to impact the equity share capital of the Company.
Adoption of Mandatory and Non-Mandatory Requirements of Clause 49:
The Company has complied with all mandatory requirements of Clause 49 of the Listing Agreement. The Company has adopted following non-mandatory requirements of Clause 49 of the Listing Agreement:
1. The Company is in the regime of unqualified financial statements.
2. The Internal Auditor directly reports to the Audit Committee.
Auto Components Gat No. 1242/ 44, Village Vadu-Budruk, Tal. Shirur, Dist: Pune- 412 216. (Maharashtra)
Solar Power Project Plot No. 45 & 46, Survey No. 152/1, Charanka, Santalpur, Patan (Gujarat)
Wind Power Projects
1. Supa Site- At Post- Kavadya Dongar, Supa, Tal. Parner, Dist. Ahmednagar (Maharashtra)
2. Satara Site- At Post- Vankusavade, Tal. Patan, Dist. Satara (Maharashtra)
3. Sadawaghapur Site- At Post-Sadawaghapur. Tal. Sadawaghapur, Dist. Satara (Maharashtra)
Address for Investor Correspondence:
• For transfer/de materialization of shares Link Intime India Pvt. Ltd.
202 A-Wing, Second Floor, Akshay Complex, Off Dhole Patil Road, Pune- 411 001 Phone- (020) 26161629/ 26163503/ 26160084 • E-mail- email@example.com
• For payment of dividend and other correspondence Secretarial Department!
ZF Steering Gear (India) Ltd.
Corporate Identity Number (CIN)- L29130PN1981PLC023734 6th Floor, Eden Hall , Model Colony, Pune- 411 016 E- Mail: firstname.lastname@example.org • Phone- (020) 2567 6754/ 55 Website- www.zfindia.com
For and on behalf of the Board of Directors
Chairman and Managing Director
Place : Pune
Date : July 28, 2015