REPORT ON CORPORATE GOVERNANCE_
1. COMPANY'S PHILOSOPHY
Corporate Governance focuses on commitment to values adhering to ethical business practice. Good Corporate Governance helps achieve long term corporate goals of enhancing stakeholders' value. The Company's philosophy on Corporate Governance aims at attaining the highest level of transparency and accountability towards its stakeholders and encompasses regulatory and legal requirements, such as the terms of Listing Agreement with Stock Exchange.
The Company believes that timely disclosures, transparent accounting policies and a strong and independent Board go a long way in protecting the stakeholders' interest while maximising long-term corporate values.
2. BOARD OF DIRECTORS
The Board of Directors of the Company as on March 31, 2015 consisted of six members including one Wholetime Director.
Composition and category of Directors alongwith the details of their other directorships and committee memberships for the financial year 2014-15 are as follows:
Composition and category of Directors
• Past Memberships:
Member of Finance & Banking Committee of PHD Chambers of Commerce & Industry, Secretary / Chairman of Kanpur & Lucknow Chapters of the Institute of Company Secretaries of India and Vice Chairman of Professional Development Committee of Northern India, Regional Council of The Institute of Company Secretaries of India, New Delhi.
• Other Directorships:
- Duncan Investments & Industries Limited.
- Summit Securities Limited.
- Rado Tyres Limited.
- Janpragati Electoral Trust
Mr. Kishore Shete has 45 years of experience in the field of Manufacturing / Heavy duty Engineering / Factory Administration / Industrial Relations & Commercial functions of medium & large scale Industries.
He joined FIBREGLASS PILKINGTON LIMITED
in year 1974 in the middle management in manufacturing division. The Company was later renamed as FGP Limited. He has been instrumental in execution of several mega projects with sophisticated U.K. and American technologies at Thane works. Through diverse functions & responsibilities, he grew to the senior management positions including the position of Works Manager in 1992, with overall responsibility of managing the Thane factory of the Company.
In January 2000, he was also appointed as a "Manager" of the Company, pursuant to the provisions of the Companies Act, 1956. Effective November 2011, he has been elevated to the position of Wholetime Director of the Company. He has also been appointed as the Chief Financial Officer of the Company.
Prior to joining the Company in 1974, he has also worked in the Companies of repute such as Bombay Dyeing Spring Mill and Fabrika Polyarn -division of Hoechst Dyes & Chemicals.
• Other Directorships:
Samudra Securities Limited
• Other Membership of Committees: Nil.
Mr. Shete holds Ten equity shares in the Company and he is not related to any member of the Board of Directors or to any Key Managerial Personnel of the Company.
Board Meetings/ Committee Meetings and their proceedings
During the year 2014-15, five Board Meetings were held on May 14, 2014, May 23, 2014, August 12, 2014, November 11, 2014 and February 2, 2015.
Agenda for all the meetings alongwith detailed agenda notes are circulated to the Board/ Committee members in advance of the respective meetings.
The Company did not have any pecuniary relationship or transactions with its Non-executive and Independent directors during the year under review except payment of sitting fees as disclosed in the Board's Report.
Composition of the Audit Committee is as per the requirements of Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013. As on March 31, 2015, the composition and the particulars of meetings attended by the members was as follows:
The terms of reference of Audit Committee as per Section 177(4) of the Companies Act, 2013 inter alia include the following:
(i) To recommend the appointment/re-appointment/re-placement, remuneration and terms of appointment of the Auditors of the Company.
(ii) To review and monitor independence and performance of the auditors.
(iii) To review the effectiveness of the audit process and adequacy of the internal audit function including structure/ staffing and reporting process and frequency of the internal audit.
(iv) To examine Financial Statements and Auditor's report thereon and for the purpose, to call, if necessary, the comments of the Auditors about the Internal Control systems and scope of audit, including observations of Auditors;
(v) To recommend the Financial Statements to the Board for approval, after carrying out the procedure as per (iv) above.
(vi) To approve transactions of the Company with Related Parties, including subsequent modifications, if any.
(vii) To scrutinize inter-corporate loans and investments made by the Company.
(viii) To carry out valuation of undertakings and the assets of the Company as and when necessary.
(ix) To evaluate the internal financial control systems and the Risk Management Systems.
(x) To monitor end use of funds raised through public offers (including public issue, rights issue, preferential issue, etc.) and related matters, if any.
(xi) To investigate into any matter specified under serial nos. (i). to (x). above and for this purpose to obtain advice of external professionals, if necessary, and accord them full access to the information contained in the records of the Company.
(xii) To provide personal hearing to the Auditors and Key Managerial Personnel when and if necessary, while reviewing the Auditor's Report.
(xiii) To oversee the Company's financial reporting process and disclosure of the financial information to ensure that the financial statements are correct, sufficient and creditable.
(xiv) To review the Annual Financial Statements with the Management before submitting the same to the Board particularly the following:
a. Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report in terms of Clause (c) of sub-section 3 of Section 134 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 judgement 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 Audit Report.
(xv) To review with the Management the quarterly financial statements before submitting the same to the Board.
(xvi) To discuss with the Internal Auditors any significant findings and follow-up thereof.
(xvii)To review findings of the internal investigation, including the matters of suspected frauds or irregularities or failure of internal control systems.
(xviii)To discuss with the Statutory Auditors the nature and scope of internal audit before commencement of the internal audit and also after completion of internal audit, to ascertain any internal area of concern.
(xix) To look into the regions for substantial defaults for payment to the deposit holders, debenture holders and creditors.
(xx) To review the functioning of the Whistle Blower Mechanism.
(xxi) To approve appointment of CFO (i.e. the whole-time Finance Director or any other persons heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate.
(xxii)To carry out any other function, as may be assigned to Audit Committee pursuant to any amendments to the Listing Agreement and the applicable provisions of the Companies Act, 2013.
xxiii)To review the following information/documents:
(a) Management discussion and analysis of financial condition and results of operation;
(b) Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
(c) Management letter of internal control weakness issued by the statutory auditors;
(d) Internal audit reports relating to internal control weakness; and
(e) The appointment, removal and terms of remuneration of the Chief Internal Auditor.
(xxiv) To investigate any activity within its terms of reference.
(xxv) To seek information from any employee.
(xxvi)To obtain outside legal or other professional advice.
(xxvii)To secure attendance of outsiders with relevant expertise, if it considers necessary.
The members of Audit Committee have knowledge on financial matters and majority of them have accounting or related financial management expertise. The Chairman of the Audit Committee is an independent director. The Chairman of the Audit Committee Mr. H.C. Dalal was not personally present at the previous Annual General Meeting. However, he had authorized Mr. H.N. Singh Rajpoot to act as Chairman of the Audit Committee who was present at the 52nd Annual General Meeting held on 30th September, 2014.
The Chief Financial Officer, Statutory Auditors, Internal Auditors and any other executive as and when required are the invitees to the Audit Committee meetings. Company Secretary acts as the Secretary to the Audit Committee.
The Audit Committee reviews all the information that is required to be mandatorily reviewed by it under corporate governance.
During the year 2014-15, four meetings of the Committee were held on May 23, 2014, August 12, 2014, November 11, 2014 and February 2, 2015.
4. NOMINATION AND REMUNERATION COMMITTEE
The Erstwhile Remuneration Committee was renamed as 'Nomination and Remuneration Committee' and the terms of reference of the Committee were revised by the Board at their meeting held on May 14, 2014 pursuant to Section 178 of the Companies Act, 2013, effective April 1, 2014 and revised Clause 49 of the Listing Agreement effective October 1, 2014. Further, the Committee was re-constituted on February 2, 2015.
The terms of reference of Nomination and Remuneration Committee ("NRC") include the matters specified under Clause 49(IV)(B) of the Listing Agreement as well as in Section 178 of the Act, which interalia include the following matters:
a) To ensure that the general character of the management or the proposed management of the Company shall not be prejudicial to the interest of its present and/or future depositors, if any.
b) To ensure fit and proper status of existing/proposed directors.
c) To lay down criteria such as qualification, positive attributes and independence for appointment of persons as directors or in the senior management.
d) To identify persons who are qualified to become directors and also who may be appointed in senior management positions, as per the criteria laid down.
e) To recommend to the Board the appointment and removal of the Directors, including Independent Directors.
f) To carry out evaluation of every director's performance.
g) To recommend to the Board a policy relating to the remuneration for directors, including Managing Director(s), Whole-time Director(s), Key Managerial Personnel and other employees. While formulating the policy, the NRC shall ensure that:
(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully.
(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks
(iii) Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.
h) To recommend remuneration to be paid to a Director for any service rendered by him to the Company which are of a professional nature and provide an opinion, whether such Director possess the requisite qualification for the practice of such profession.
The NRC deals with the matters specified in Clause 49 of the Listing Agreement and also reviews the overall compensation structure and policies of the Company.
During the year 2014-15, four meetings of the Committee were held on May 23, 2014, August 12, 2014, November 11, 2014 and February 2, 2015.
A. Payments to Non-executive Directors and details of remuneration paid to all the Directors:
The Non-executive Directors are entitled to sitting fees for attending every board meeting. Further, members of the Board who are members of the Audit Committee receive sitting fees for attending the meetings of the Audit Committee. The sitting fees paid to the directors are within the limits prescribed under the Companies Act, 2013 and Rules made thereunder.
B. Nomination and Remuneration Policy:
The Board has approved Nomination and Remuneration Policy as recommended by Nomination and Remuneration Committee which forms part of the Directors' Report.
5. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Erstwhile Shareholders / Investors Grievance Committee was renamed as 'Stakeholders Relationship
Committee' and the terms of reference of the Committee were revised by the Board at their meeting held on May 14, 2014 pursuant to Section 178 of the Companies Act, 2013, effective April 1, 2014 and revised Clause 49 of the Listing Agreement effective October 1, 2014. The composition and the particulars of meetings attended by the members were as follows
The terms of reference of the Stakeholders Relationship Committee envisage the following:
a) Consider and resolve the grievances of the security holders i.e. currently, the shareholders and the deposit holders of the Company.
b) Review and deal with complaints and queries received from the investors.
c) Review and deal with responses to letters received from the Ministry of Corporate Affairs, the Stock Exchanges, the Depositories and Securities and Exchange Board of India (SEBI) and other regulatory authorities.
d) Review the transfer and transmission of securities.
e) Review issue of duplicate share certificates.
The Stakeholders Relationship Committee has delegated the power of approving transfer / transmission of shares to Share Transfer Committee which met as and when required during the year 2014-15.
6. RISK MANAGEMENT COMMITTEE
During the year, the Company has constituted a Risk Management Committee (RMC) comprising of Mr. H.C. Dalal (Chairman), Ms. Shruti Joshi, Mr. Vimal Kejriwal and Mr. H.N. Singh Rajpoot.
The terms of reference of the Committee include the following:
1. To ensure that all the current and future material risk exposures of the company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e. to ensure adequate systems for risk management.
2. To establish a framework for the Company's risk management process and to ensure its implementation.
3. To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.
7. MEETING OF INDEPENDENT DIRECTORS
During the year under review, the Independent Directors met on March 12, 2015, inter alia, to discuss matters as prescribed under the Companies Act, 2013 and Listing Agreement executed by the Company with the Bombay Stock Exchanges. All the Independent Directors were present at the Meeting.
8. CODE OF CONDUCT
The Board has laid down a code of conduct for all Board members and senior management personnel of the Company which is posted on the Company's website www.fgpltd.in All the Board members and senior management personnel have affirmed compliance with the said code of conduct. A certificate to this effect given by Mr. Kishore Shete, Wholetime Director and Chief Financial Officer of the Company is attached to this report.
A. All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There were no transactions of material nature with Directors or the management, their relatives, etc. during the year that may have potential conflict with the interests of the Company at large.
The transactions with the related parties as per Accounting Standard AS-18 and Companies Act, 2013, are set out in notes to account in the Annual Report and were placed before the Audit Committee periodically.
Under the provisions of Clause 49(VII) (C) of Listing Agreement, the Company has formulated a policy on dealing with related parties named as "Related Party Transactions Policy" and the same has been uploaded on the website of the Company.
B. The Company has formulated a Risk Management Committee and has adopted a risk management policy. The Board of Directors has been informed from time to time of the business risks faced by the Company and the steps taken by the management to face them. It is uploaded on the website of the Company.
C. A certificate from the Whole time Director and Chief Financial Officer of the Company in terms of Clause 49 (IX) of the Listing Agreement was placed before the Board in its meeting held on May 28, 2015.
D. The Company has adopted a Whistle Blower Policy and it confirms that no personnel was denied access to the Audit Committee.
E. The Company has complied with all the mandatory requirements of Clause 49 of Listing Agreement. The status on adoption of non-mandatory items finds a mention in this Report.
F. There were no instances of non-compliance by the Company on any matter related to capital markets during the last three years and no penalties/strictures have been imposed against the Company.
G. Clause 49 of the Listing Agreement mandates to obtain a certificate from either the Auditors or Practicing Company Secretaries regarding compliance of conditions of corporate governance stipulated in the clause and annex the certificate with the Board Report, which is sent annually to all the shareholders. The Company has obtained a certificate from the Auditors of the Company to this effect and the same is given as an annexure to this Report.
11. MEANS OF COMMUNICATION
The half-yearly and quarterly results are regularly submitted to the Stock Exchange in accordance with the Listing Agreement and are published in newspapers like Free Press Journal (English) and Navshakti (Marathi). These are not sent individually to the shareholders.
• Website: www.fgpltd.in
• e-mail ID for Investor Grievances: email@example.com
12. GENERAL SHAREHOLDER'S INFORMATION
12.1 Annual General Meeting
• Date : Thursday, September 24, 2015
• Time : 02.30 p.m.
• Venue : Auditorium of Textiles Committee Complex P. Balu Road, Prabhadevi Chowk, Mumbai-400 025.
12.2 Financial Year : April 1, 2015 to March 31, 2016 First quarter results : By second week of August* Second quarter results : By second week of November* Third quarter results : By second week of February* Fourth quarter results : By last week of May* *Tentative
12.3 Date of Book Closure
From: - September 18, 2015 To: - September 24, 2015
12.4 Dividend Payment Date : Not Applicable
12.5 Listing on Stock Exchange : At the BSE Limited
12.6 (a) Stock Code - Physical : BSE 500142
(b) ISIN in NSDL and CDSL : ISIN No. INE512A01016
12.8 Registrar & Share Transfer Agents:
Sharepro Services (India) Pvt. Ltd.
13AB/2nd Floor, Samhita Warehousing Complex, Sakinaka Telephone Exchange Lane, Off Andheri Kurla Road, Sakinaka, Andheri (East) Mumbai-400 072.
12.9 Share Transfer System:
Share transfers are registered and duly transferred share certificates are returned to the lodger within a period of fifteen days from the date of receipt, if the documents are otherwise in order.
The Share Transfer Committee meets as often as possible to approve transfers and related matters as may be required.
12.12 Dematerialization of Shares and Liquidity:
As on March 31, 2015 - 89.25 % of the paid up share capital has been dematerialized.
The shares of the Company are not traded frequently.
Outstanding GDRs / ADRs / Warrants or any convertible instruments conversion date and likely impact on equity: Nil
12.13 Plant Location: Not Applicable
12.14 Address for Correspondence:
Registrar and Share Transfer Agents: Sharepro Services (India) Pvt. Ltd. Unit: FGP Limited
13AB /2nd Floor, Samhita Warehousing Complex, Sakinaka Telephone Exchange Lane, Off Andheri Kurla Road, Sakinaka, Andheri (East), Mumbai - 400 072. Tel. : 91 22 67720300 Fax : 91 22 28591568
Compliance Officer: Ms. Aayushi Mulasi Company Secretary Commercial Union House, 9, Wallace Street, Fort, Mumbai-400 001. Tel. : 91 22 22070273 Fax : 91 22 22015269
12.15 NON-MANDATORY REQUIREMENTS:
a. The Board
Non- Executive Chairman has not sought any reimbursement of expenses incurred in the performance of his duties.
b. Shareholder Rights
The quarterly financial results are published in the newspapers and also displayed on the Company's website (www.fgpltd.in). Therefore, the Company does not send the financial results to the shareholders separately.
c. Audit Qualifications
The financial statements for the year ended March 31, 2015 are unqualified.
d. Reporting of Internal Auditor
The Internal Auditor presents the Internal Audit Report for every quarter at the meeting of the Audit Committee.