REPORT ON CORPORATE GOVERNANCE
The Securities and Exchange Board of India (SEBI) has issued circular no. CIR/CFD/POLICY CELL/7/2014 dated 15th September 2014 making compliance with clause 49 of listing agreement non-mandatory in respect of certain listed companies. Though the Company is covered under the aforesaid circular, in accordance with Clause 49 of the Listing Agreement entered with the Stock Exchanges, the Company is voluntarily presenting the report on the areas pertaining to the said clause along with the regular practices being followed the Company in complying with them.
COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
The Company continues its efforts towards creating value for all its stakeholders keeping in view the principles of fairness, equity, transparency, accountability and dissemination of information. It also recognizes its social responsibility towards the society, in general and environment, in particular and remains committed to its development as well.
The Company believes that the long term growth lies in adoption of the 'best practices' which are pursued in the area of Corporate Governance. Accordingly, the Corporate Governance philosophy of the Company is built on the principles of equity, fairness, transparency, spirit of law and honest communication. Company believes that sound Corporate Governance is necessary to retain stakeholders' transactions, in order to protect the interests of its stakeholders. The Board considers itself as a Trustee of its Shareholders and acknowledges its responsibilities towards them for creation and safeguarding their wealth.
BOARD OF DIRECTORS
In terms of the Company's Corporate Governance Policy, all statutory and other significant and material information are placed before the Board to enable it to discharge its responsibilities of strategic supervision of the Company and as trustees of stakeholders. The Company's Board has optimum combination of Executive and Non-Executive Directors. The Board presently has five (5) Directors out of which 1 (One) Director is Executive Director and 4 (Four) are Non-Executive Directors. Out of the 4 (Four) Non-Executive Directors 2 (Two) Directors are Independent Directors having considerable experience in coal, coke and allied matters.
The Directors of the Company are appointed by the shareholders at General Meetings. 1/3rd of such Directors as are liable to retire by rotation (except independent directors), if eligible, generally offer themselves for re-election, in accordance with the provisions of Section 152 of the Companies Act, 2013 and that ofthe Articles of Association ofthe Company.
The Wholetime Director on the Board serve in accordance with the terms of their contracts of service with the Company.
a) Composition and category of Directors as on 31st March, 2015
The Independent, Non-executive Director acts as a Chairman in the Board & General body Meetings of the Company. The number of Independent Directors is 2 which is in compliance with the stipulated one third ofthe total number of Directors. All Independent Directors are persons of eminence and bring a wide range of expertise and experience to the Board thereby ensuring the best interest of stakeholders and the Company. All Independent Directors meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 ofthe Act and under Clause 49 ofthe Listing Agreement.
b) Meetings & Attendance Record of each Director
A minimum of four Board Meetings are held every year. Dates for the Board Meetings in the ensuing quarter are decided well in advance and communicated to the Directors alongwith the Agenda papers. The Board Meetings are usually held at Maker Chamber-III, Mumbai- 400021. The Board is also provided with Audit Committee observations on the Internal audit findings and matters required to be included in the Director's 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.
None of the Directors on the Board is a member of more than 10 committees and Chairman of more than 5 committees (as specified in Clause 49 of the Listing Agreement) across all the Companies in which he/ she is a Director. The necessary disclosures regarding committee positions have been made by the Directors.
The attendance record of the Directors at the Board Meetings held during the financial year 2014-15 and at the last Annual General Meeting (AGM), as also the number of Directorships, Committee Chairmanships and Memberships held by them in other Companies are given here below:
During the Financial Year 2014-15, Four (4) Board Meetings were held and the gap between two Board Meetings did not exceed four months. Board Meetings were held on 30.05.2014, 13.08.2014, 13.11.2014 and 13.02.2015.
c) Code of Conduct:
The Board of Directors of the Company has framed a code for all Board members. The Board of Directors of the Company have affirmed compliance of the said Code of Conduct as on 31st March, 2015. The Code of Conduct is displayed on the Website of the Company: - www.foundryfuel.co.in All the members of the Board have affirmed compliance with the Code of Business Conduct and Ethics applicable to them, for the year 2014-15. A declaration to this effect, signed by the Whole Time Director is annexed to the Director's Report.
d) Performance Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Board Evaluation Policy has been framed and approved by the Nomination and Remuneration Committee and by the Board. The Board carried out an annual performance evaluation of its own performance, the Independent Directors individually as well as the evaluation of the working of the Committees of the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors
f) Separate Independent Directors' Meetings
The Independent Directors meet at least once in a quarter, without the presence of Executive Directors or Management representatives. They also have a separate meeting with the NonExecutive Chairman, to discuss issues and concerns, if any. The Independent Directors met once during the Financial Year ended 31st March, 2015 on 20th November, 2014 and inter alia discussed:
• the performance of non-Independent Directors and the Board as a whole;
• the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors; and
• the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
In addition to these formal meetings, interactions outside the Board meetings also take place between the Chairman and Independent Directors.
g) Directors' Induction and Familiarization
The provision of an appropriate induction programme for new Directors and ongoing training for existing Directors is a major contributor to the maintenance of high Corporate Governance standards of the Company. The Independent Directors, from time to time request management to provide detailed understanding of any specific project, activity or process of the Company. The management provides such information and training either at the meeting of Board of Directors or otherwise. The induction process is designed to:
a. build an understanding of Foundry Fuel Products Ltd, its businesses and the markets and regulatory environment in which it operates;
b. provide an appreciation ofthe role and responsibilities ofthe Director;
c. fully equip Directors to perform their role on the Board effectively; and
d. develop understanding of Company's people and its key stakeholder relationships.
Upon appointment, Directors receive a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments.
In addition to the extensive induction and training provided as part of the familiarization programme, the Independent Directors are also taken through various business and functional sessions in the Board meetings including the Board meetings to discuss strategy.
The details of Director's induction and familiarization are available on the Company's website at www.foundryfuel.co.in/investor relations
The following committees have been constituted by the Board of Directors as on date with adequate delegation of powers to discharge day-to-day affairs of the Company as well as to meet the exigencies of the business of the Company.
Audit Committee of the Board comprises three Directors out of which two are Independent & Non-Executive Directors. The Members possess adequate knowledge of Accounts, Audit, Finance, etc. The composition of the Audit Committee meets the requirements as per Section 177 of the Companies Act, 2013 and Clause 49 ofthe Listing Agreement.
The terms of reference of Audit Committee are as per Section 177 of the Companies Act, 2013 and the revised Clause 49 of the Listing Agreement.
i. Terms of reference Powers:-
a. To investigate any activity within its terms of reference.
b. To seek information from any employee.
c. To obtain outside legal or other professional advice.
d. To secure attendance of outsiders with relevant expertise, if it considers necessary.
a. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
b. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditors and fixation of audit fees. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
c. Reviewing with management the annual financial statements before submission to the Board, focusing primarily on:
- Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (5) of section 134 ofthe Companies Act, 2013;
- Changes, if any, in accounting policies and practices and reasons for the same;
- Major accounting entries involving estimates based on the exercise of judgement by management;
- Qualifications in draft audit report;
- Significant adjustments arising out of audit;
- Compliance with listing and legal requirement concerning financial statements;
- Disclosure of any related party transactions.
d. Reviewing, with the management, the quarterly financial statements before submission to the board for approval.
e. 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 utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.
f. Reviewing with management, performance of statutory auditors and adequacy of the internal control systems.
g. Discussion with statutory auditors before the audit commences, nature and scope of audit as well as have post audit discussion to ascertain any area of concern.
h. To look into the reasons of substantial defaults in payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
i. Reviewing the adequacy of internal audit function, in 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.
j. Discussion with internal auditors any significant findings and follow up thereon.
k. 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.
l. Approval of appointment of CFO (i.e. the whole time Finance Director or any other person heading the finance function or discharge that function) after assessing the qualifications, experience and background, etc. ofthe candidate. m. To review the functioning ofthe Whistle Blower mechanism, in case the same is existing. n. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. The Company has system and procedure in place to ensure that the Audit Committee mandatorily reviews:
1. Management discussion and analysis of financial condition and result of operations;
2. Statement of significant related party transactions (as defined by the audit committee), submitted by management;
3. Management letters/letters of internal control weaknesses issued by the statutory auditors;
4. Internal audit reports relating to internal control weakness; and
5. The appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the Audit Committee.
Four (4) meetings of the Audit Committee were held during the financial year 2014-15, as against the minimum requirement of four meetings, held on 30.05.2014, 13.08.2014, 13.11.2014 & 13.02.2015. The Compliance Officer, Mr. Kamal Ghosh, is the Secretary to the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
In compliance with Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board in its meeting held on 30.05.2014, merged the Remuneration Committee and re-named the merged committee as the Nomination & Remuneration Committee. The Nomination & Remuneration Committee's responsibilities include framing of specific remuneration package of Executive Directors and commission / fees for Non-Executive Directors etc. and approval of remuneration to the managerial personnel as per the Company's policy on the same.
The broad terms of reference of the said Committee, inter alia, includes the following:
• Identifying personnel 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 for their appointment and removal and carry out evaluation of every director's performance including criteria for evaluation of Independent Directors and the Board.
• Formulating a criteria for determining qualifications and independence of a director and recommending to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees.
STAKEHOLDERS RELATIONSHIP / GRIEVANCE COMMITTEE
The Board of Directors at its meeting held on 30th May, 2014 has renamed the Shareholders/Investors Grievance Committee as 'Stakeholders Relationship / Grievance Committee' in compliance with the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The main tasks of 'Stakeholders Relationship / Grievance Committee' is to looks into redressing of shareholders' and investors grievances like transfer / transmission of Shares, non- receipt of Dividend, Balance Sheet, etc. The Company has registered with SCORES of SEBI for Redressal of Investors' Grievances on-line.
The Board has also modified the scope of the Committee to align it with the revised Clause 49 of the Equity Listing Agreement, which is as follows:
1) To review the reports submitted by the Registrars and Share Transfer Agents of the Company at Half yearly intervals.
2) To interact periodically and as & when required with the Registrars and Share Transfer Agents to ascertain and look into the quality of the Company's Shareholders / Investors grievance redressal system and to review the report on the functioning of the said Investor grievances redressal system.
3) To consider and resolve the grievances ofthe security holders ofthe company.
4) To periodically report to the Board about serious concerns if any.
5) To follow-up on the implementation of suggestions for improvement.
The Stakeholders Relationship / Grievance Committee comprises of 3 Directors out of which two are Independent Directors.
Number of complaints from members received and resolved during the period under review and pending as on 31- 03-2015 are as follows:
No of complaints received 2, No. of complaints resolved 2 and No. of complaints pending at the end ofthe year - Nil. No request for transfer was pending for more than 30 days as on 31-03-2015.
The Compliance Officer, Mr. Kamal Ghosh, is the Secretary to the Audit Committee.
The Compliance Officer is for complying with the requirements of SEBI Regulations and the Listing Agreement with the Stock Exchanges in India. His address and contact details are as given below:
Address : 504, Diamond Prestige, 41 A, A.J. C. Bose Road, Kolkata - 700 017 Phone : 033-2226 8441 / 4066 8072 Fax : 033-22650116 Email : email@example.com
SHARE TRANSFER COMMITTEE
The Board has also modified the scope of the Committee to align it with the revised Clause 49 of the Equity Listing Agreement and in compliance with the provisions ofthe Companies Act, 2013.
The Share Transfer Committee comprises ofthe following Directors:-
a. Mr. Kamal Ghosh - Chairman & Secretary ofthe Committee and Compliance Officer
b. Mr. Sunil Vishwambharan- Member ofthe Committee
c. Mr. Ruchir Omprakash Jalan - Member ofthe Committee
The Committee oversees the performance of transfer & Dematerialisation, Investors' Grievances and other investor related matters and recommends measures for overall improvement of the quality of investor service.
The rules and the terms of reference of this Committee are wide enough covering matters specified under the provisions of the Companies Act, 2013 & Depository rules & guidelines regarding transfer & Dematerialisation etc. of shares. The share transfers & dematerialisation cases approved by the Committee in their meeting is noted at the forthcoming Board Meeting and so on.
The Committee met once during the year 2014-15 on 20th November, 2014.
All the members have attended the Committee Meeting held on those dates.
RISK MANAGEMENT COMMITTEE
In accordance with the requirement of Listing Agreement, your Company constituted a Risk Management Committee during the year. The Committee comprises Mr. Sunil Vishwambharan as the Chairman and Mr. Kamal Ghosh, Executive Director and Mr. Ruchir Jalan Independent Director as members of the Committee.
The role of Risk Management Committee is as follows:
• Implementation of Risk Management Systems and Framework;
• Reviewing the Company's financial and risk management policies;
• Assessing risk and minimizing the procedures;
• Framing, implementing and monitoring the risk management plan for the Company.
During the Financial Year ended 31st March, 2015, the Committee met once on 20th November, 2014.
CORPORATE SOCIAL RESPONSIBILITY
The Company is a loss making Company since a long period of time, hence, the provisions of Section 135 of the Companies Act, 2013 and rules made there under are not applicable to the Company.
i. No transactions of materially significant nature were entered into by the Company with its promoters, the Directors or the management, its subsidiaries or relatives of directors/promoters, etc. that may have potential conflict with the interests ofthe Company at large.
ii. The Company has complied with various rules and regulations prescribed by the Stock Exchange, Securities and Exchange Board of India or any other Statutory Authority related to the capital markets during last three years. No penalty or strictures have been imposed by them on the Company during last th^ee years.
iii. The Company has identified risk involved in respect to its products, quality, cost, location and finance. It has also adopted the procedures / policies to minimize the risk and the same are reviewed and revised as per the needs to minimize and control the risk.
iv. The CEO / CFO certification as required under Clause 49 is annexed hereto which forms part of this report. Currently, the position of CFO is vacant and hence the declaration to be given by CEO and CFO is certified by Mr. Kamal Ghosh who is a whole time director and also a compliance officer of the Company and in charge of finance function.
v. The Board hereby confirms that no personnel have been denied access to the audit committee.
vi. The Management Discussion and Analysis Report as required under Clause 49 is annexed hereto which forms part of this report.
vii. The Company does not have any employee as on date therefore the Whistle blower policy is not in place.
viii. The Company is in compliance with all mandatory requirements of Clause 49 of the Listing Agreement. The Company has not adopted non-mandatory requirements.
ix. Pending finalization of another project in view of cancellation of coal block of the holding company, the Company it yet to appoint Chief Financial Officer (CFO) and Company Secretary (key managerial personnel) as required by Section 203 of the Companies Act, 2013.
MEANS OF COMMUNICATIONS
The Company regularly intimates unaudited as well as audited financial results to the Stock Exchanges immediately after taken on record by the Board. These financial results are normally published in "Financial Express" in English Language and in "Durantobarta/ Kalantar" in Bengali Language and are displayed on the website of the Company www.foundryfuel.co.in
GENERAL SHAREHOLDER INFORMATION
i. 51st Annual General Meeting
Venue: "SURYA SEN MANCHA" , 432, Prince Anwar Shah Road, Kolkata-700 068 Time : 10.00 A.M. Date : September 28, 2015
ii. Financial Year: 2014-2015
iii. Date of Book Closure:
22ndSeptember, 2015 to 28th September, 2015 (Both days inclusive)
iv. Dividend: The Board has not recommended any dividend for the Financial Year ended on 31-03-2015.
v. Listing on Stock Exchanges
The Company's securities are listed at:-
1. The Bombay Stock Exchange, Mumbai Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 023 *2. The Calcutta Stock Exchange Association Ltd. 7 Lyons Range, Kolkata - 700 001
*3. The Stock Exchange, Ahmedabad Kamdhenu Complex, Opposite Sahaj and College, Panjarapole, Ahmedabad - 380 015
*4. The Magadh Stock Exchange Association Ltd. "Ashiana Plaza", 9th Floor, Budh Marg, Patna - 800 001
*The Company has already applied to delist its shares from these stock exchanges and will continue listed on the Bombay Stock Exchange, Mumbai, which has nationwide trading terminals, as per the SEBI Delisting Guidelines, 2009.
vi. Stock Code
Stock Exchange Stock Code
The Bombay Stock Exchange, Mumbai : 513579
The Calcutta Stock Exchange Association Ltd. : F019
The Stock Exchange, Ahmedabad : 17500
The Magadh Stock Exchange Association Ltd : F018
Note: There is no regular transaction at Calcutta Stock Exchange, Ahmedabad Stock Exchange and Magadh Stock Exchange.
vii. Code No. allotted by NSDL/CDSL
Under the Depository System, the International Securities Identification Number (ISIN) allotted to the Company's Shares is INE617C01027.
Registrar and Transfer Agent (Common Registrar- both for Physical & Demat): M/S. Niche Technologies Pvt. Ltd. D-511, Bagree Market, 71, B.R.B. Basu Road, Kolkata 700 001 Phones : 2235-7270/ 7271. 2234-3576, Fax : 2215-6823 Email : firstname.lastname@example.org , URL : www.nichetechpl.com
Shares Transfer System
Share Transfer assignment has been given to the Registrars and Share Transfer Agents. The Shares Transfer Committee is empowered to approve the Share transfers. Transfer Committee Meeting is held as and when required.
The Share Transfers, issue of duplicate certificate etc. are endorsed by Directors / Executives / Officers as may be authorised by the Transfer Committee. Grievances received from members and miscellaneous correspondences are processed by the Registrars within 15 days.
Dematerialisation of shares
The Company's shares are compulsorily traded in the demat form with effect from 20th December, 2000 for all categories of shareholders. All transfers are debited/credited through the respective Accounts maintained with the Depository Participants (DPs) of the Investors. 72,93,367 Nos. of Equity shares of the Company representing 90.95 % of the Company's share capital are dematerialized as on 31st March, 2015.
Liquidity of shares
The equity shares of the Company are listed and traded in Bombay Stock Exchange. Outstanding Instruments
The Company has not issued any GDRs / ADRs / Warrants or any convertible Instrument. As such, there is no impact on Equity of the Company.
The Company owns one factory, situated in Jealgora, G.T. Road, Govindpur, Dist- Dhanbad in the State of Jharkhand.
Address for Correspondence
Regd. Office: 504, 'DIAMOND PRESTIGE', 41 A, A.J.C. Bose Road, Kolkata-700017 Telephone - 4066 8072 / 2226 8441, Fax - (033) 22650116
Mr. Kamal Ghosh 504, 'DIAMOND PRESTIGE', 41 A, A.J.C. Bose Road, Kolkata-700017 Telephone - 4066 8072 / 2226 8441, Fax - (033) 22650116