01 May 2017 | Livemint.com

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Gujarat Fluorochemicals Ltd.

BSE

  • 758.20 7.90 (1.05%)
  • Vol: 40799
  • BSE Code: 500173
  • PREV. CLOSE
    750.30
  • OPEN PRICE
    754.00
  • BID PRICE (QTY.)
    0.00(0)
  • OFFER PRICE (QTY.)
    758.20(469)

NSE

  • 760.05 0.00 (0%)
  • Vol: 235488
  • NSE Code: GUJFLUORO
  • PREV. CLOSE
    760.05
  • OPEN PRICE
    752.30
  • BID PRICE (QTY.)
    0.00(0)
  • OFFER PRICE (QTY.)
    760.05(326)

Gujarat Fluorochemicals Ltd. Accounting Policy

CORPORATE GOVERNANCE REPORT

In compliance with Clause 49 of the Listing Agreement with Stock Exchanges, the Company is pleased to submit this report on the matters mentioned in the said Clause and the practices followed by the Company in this regard.

1. A brief statement on the Company's philosophy on Code of Governance

Corporate Governance is the system by which companies are directed and controlled by the management in the best interest of the Shareholders and others; ensuing greater transparency and better and timely financial reporting. Corporate Governance therefore generates long term economic value for its Shareholders.

Gujarat Fluorochemicals Limited believes that the implementation of Corporate Governance principles generates public confidence in the corporate system. With this belief, the Company has initiated significant measures for compliance with Corporate Governance.

2. Board of Directors

As at the end of the Financial Year on 31st March 2015, the Board of Directors consisted of 11 Directors of which 3 were Executive Directors and 8 were Non-Executive Directors. Hence, the composition of the Board of Directors consisted of optimum combination of Executive and Non-Executive Directors as required under Clause 49 II A 1 of the Listing Agreement. Further, the Company did not have a regular Non-Executive Chairman and, as per the requirements of Clause 49 II A 2 of the Listing Agreement, fifty percent of the Board is required to consist of Independent Directors. The Board of Directors consisted of 5 Independent Directors and 6 Non-Independent Directors. During the Financial year under review, the Company was in the process of identifying a suitable candidate to be inducted on the Board as a Woman Independent Director in order to comply with the balance requirements of Clause 49 II A 1 and 2 of the Listing Agreement. After the close of the Financial Year 2014-15, Ms Vanita Bhargava was appointed on the Board of the Company as a Woman Independent Director with effect from 28th April, 2015. Thus the composition of the Board is in compliance with all the requirements of Clause 49 II A 1 and 2 of the Listing Agreement except for the period from 1st October, 2014 to 28th April, 2015.

Other Directorships, etc.:

None of the Directors are a Director in more than 10 Public Limited Companies or act as an Independent Director in more than 7 Listed Companies. Further, none of the Directors act as a Member of more than 10 Committees or acts as a Chairman of more than 5 Committees across all Public Limited Companies in which he is a Director.

3. Independent Directors Formal Letter of Appointment:

Independent Directors of the Company has been issued a formal Letter of Appointment setting out in detail, the terms of appointment, duties and responsibilities. A copy of letter issued to all the Independent Directors has been disclosed on the Company's website. The same can be viewed at <http://www.gfl.co.in/Appointment_letter.php>

Separate Meeting of Independent Directors:

As stipulated under Section 149 of the Companies Act, 2013 (the "Act"), read with Schedule IV of the said Act and the Listing Agreement with the Stock Exchanges, a separate meeting of the Independent Directors of the Company was held on 17th January, 2015 with the following agenda:

• to review performance of Non-Independent Directors and the Board as a whole;

• to review the performance of the Chairperson of the Company taking into account the views of the Executive and Non-Executive Directors of the Company; and

• to assess 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.

Familiarization Programme for Independent Directors:

At the Meeting of the Board of Directors of the Company held on 29th May, 2014, the Board of Directors was presented with a statement showing the duties of Directors as defined under Section 166 of the Companies Act, 2013 (the "Act") and also duties as well as role and functions of Independent Directors as defined under Section 149 read with Schedule IV of the Act. Further, at the Meeting of the Independent Directors of the Company held on 17th January, 2015, a presentation was made by Shri Deepak Asher, Director & Group Head (Corporate Finance) of the Company, on the nature of industry in which the Company operates and its business model. Details of Familiarization Programme for Independent Director has been disclosed on the Company's website. The same can be viewed at <http://gfl.co.in/familiarization_programme.html>.

4. The Company has constituted the following Board-level Committees, namely

a. Audit Committee.

b. Nomination and Remuneration Committee.

c. Stakeholders' Relationship Committee.

d. Corporate Social Responsibility Committee.

Audit Committee

The Audit Committee comprises of three Directors with Shri Shanti Prashad Jain as Chairman of the Audit Committee.

The Company Secretary acts as the Secretary to the Audit Committee. Pursuant to the provisions of Section 177 of the Companies Act, 2013 read with relevant Rules made thereunder and Clause 49 of the Listing Agreement, the Board of Directors at its Meeting held on 29th May, 2014, has redefined the powers and terms of reference of the Audit Committee which are given hereunder:

Terms of Reference

The role of the Audit Committee shall include 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;

3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

4. 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 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 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

5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval;

6. 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;

7. Review and monitor the auditor's independence and performance, and effectiveness of audit process;

8. Approval or any subsequent modification of transactions of the company with related parties;

9. Scrutiny of inter-corporate loans and investments;

10. Valuation of undertakings or assets of the company, wherever it is necessary;

11. Evaluation of internal financial controls and risk management systems;

12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

13. Reviewing the adequacy of internal audit function, if 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;

14. Discussion with internal auditors of any significant findings and follow up there on;

15. 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;

16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non­payment of declared dividends) and creditors;

18. To review the functioning of the Whistle Blower mechanism;

19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;

20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

Shri Shanti Prashad Jain, Chairman of the Audit Committee was unable to attend last Annual General Meeting held on 10th September, 2014 due to unavoidable circumstances.

b) Nomination and Remuneration Committee

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with relevant Rules made thereunder and Clause 49 of the Listing Agreement, the Board of Directors at its Meeting held on 29th May, 2014, has constituted a Nomination & Remuneration Committee which consists of majority of Independent Directors.

The Company held 1 (One), Nomination and Remuneration Committee Meeting during the year on 29th July, 2014

Terms of Reference

a. To lay down criteria for identifying persons who are qualified to become Directors and who may be appointed in Senior Management of the Company in accordance with the criteria laid down by NR Committee and recommend to the Board their appointment and removal.

b. To lay down criteria to carry out evaluation of every Director's performance.

c. To formulate criteria for determining qualification, positive attributes and Independence of a Director;

d. To determine the composition and level of remuneration, including reward linked with the performance, which is reasonable and sufficient to attract, retain and motivate Directors, KMP, Senior Management Personnel & other employees to work towards the long term growth and success of the Company.

The Board of Directors of the Company at its meeting held on 29th July, 2014 has adopted following Nomination and Remuneration Policy of the Company which was reviewed and recommended by the Nomination and Remuneration Committee of the Company.

Nomination and Remuneration Policy

1. Preface:

The present Human Resource Policy of the Company considers human resources as its invaluable assets and has its objective the payment of remuneration to all its employees appropriate to employees' role and responsibilities and the Company's goals based on the performance of each of its employees in the Company.

This Nomination and Remuneration Policy (NR Policy) has been formulated, inter alia, for nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel and other Employees of Gujarat Fluorochemicals Limited (hereinafter referred to as the Company), in accordance with the requirements of the provisions of Section 178 of the Companies Act, 2013 and Listing Agreement.

2. Objectives of this NR Policy:

a. To lay down criteria for identifying persons who are qualified to become Directors and who may be appointed in Senior Management of the Company in accordance with the criteria laid down by NR Committee and recommend to the Board their appointment and removal.

b. To lay down criteria to carry out evaluation of every Director's performance.

c. To formulate criteria for determining qualification, positive attributes and Independence of a Director;

d. To determine the composition and level of remuneration, including reward linked with the performance, which is reasonable and sufficient to attract, retain and motivate Directors, KMP, Senior Management Personnel & other employees to work towards the long term growth and success of the Company.

3. Definitions:

a. "Board" means the Board of Directors of the Company.

b. "Directors" means the Directors of the Company.

c. "Committee" means the Nomination and Remuneration Committee of the Company as constituted or reconstituted by the Board from time to time.

d. "Company" means Gujarat Fluorochemicals Limited.

e. "Key Managerial Personnel"(KMP) means

• Managing Director; or Chief Executive Officer; or Manager and in their absence, a Whole-time Director;

• Company Secretary;

• Chief Financial Officer

f. "Senior Management Personnel" means, the personnel of the Company who are members of its core management team excluding Board of Directors and KMPs, comprising of all members of management on level below the Executive Directors including the functional heads.

g. "Other employees" means, all the employees other than the Directors, KMPs and the Senior Management Personnel.

4. NR Policy

NR Policy is divided into three parts as follows:

I Qualifications

Criteria for identifying persons who are qualified to be appointed as a Directors / KMP /Senior Management Personnel of the Company:

a Directors

Section 164 of the Companies Act, 2013 states disqualifications for appointment of any person to become Director of any Company. Any person who in the opinion of the Board is not disqualified to become a Director, and in the opinion of the Board, possesses the ability, integrity and relevant expertise and experience, can be appointed as Director of the Company.

b Independent Directors

For appointing any person as an Independent Director he/she should possess qualifications as mentioned in Rule 5 of The Companies (Appointment and Qualification of Directors) Rules, 2014.

c Senior Management Personnel and KMP and Other Employees

The Company has an Organogram displaying positions of Senior Management including KMP and other positions with the minimum qualifications and experience requirements for each positions which commensurate with the size of its business and the nature and complexity of its operations. Any new recruit in the Company is to match the requirements prescribed in the Organogram of the Company.

II Remuneration

a Structure of Remuneration for the Managing Director, Key Managerial Personnel and Senior Management Personnel

The Managing Director, Key Managerial Personnel and Senior Management Personnel (other than Non-executive Directors) receive Basic Salary and other Perquisites. The Perquisites include other allowances. The Managing Director is also eligible for payment of Commission on net profits as permissible under Section 197 of the Companies Act, 2013 and approved by the Shareholders from time to time to be payable to the Managing Director of the Company . The total salary includes fixed and variable components.

The Company's policy is that the total fixed salary should be fair and reasonable after taking into account the following factors:

• The scope of duties, the role and nature of responsibilities

• The level of skill, knowledge and experience of individual

• Core performance requirements and expectations of individuals

• The Company's performance and strategy

• Legal and industrial Obligations

The table below depicts the standard components of remuneration package

b Structure of Remuneration for Non-executive Director

Non-Executive Directors are remunerated to recognize responsibilities, accountability and associated risks of Directors. The total remuneration of Non-Executive Directors may include all, or any combination of following elements:

i. Fees for attending meeting of the Board of Directors as permissible under Section 197 of the Companies Act, 2013 read with Rule 4 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 and decided at the Meeting of the Board of Directors.

ii. Fees for attending meetings of Committees of the Board which remunerate Directors for additional work on Board Committee as permissible under Section 197 of the Companies Act, 2013 read with Rule 4 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 and decided at the Meeting of the Board of Directors.

iii. Commission on net profits as permissible under Section 197 of the Companies Act, 2013 and decided by the Board from time to time to be payable to any of the Non-executive Director.

iv. Non-Executive Directors are entitled to be paid all traveling and other expenses they incur for attending to the Company's affairs, including attending and returning from General Meetings of the Company or Meetings of the Board of Directors or Committee of Directors.

Any increase in the maximum aggregate remuneration payable beyond permissible limit under the Companies Act, 2013 shall be subject to the approval of the Shareholders' at the Annual General Meeting by special resolution and/or of the Central Government, as may be applicable.

c Structure of Remuneration for Other Employees

The power to decide structure of remuneration for other employees has been delegated to HR Department of the Company.

III Evaluation

a Criteria for evaluating Non-Executive Board Members:

Section 149 of the Companies Act, 2013 read with Schedule IV of the said Act states that the Independent Directors shall at its separate meeting review performance of Non- Independent Directors and the Board as a whole and the performance evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Director being evaluated.

b Criteria for evaluating performance of Key Managerial Personnel and Senior Management Personnel

Criteria for evaluating performance of KMP and Senior Management Personnel shall be as per the HR Guideline on Performance Management System and Development Plan of the Company.

c Criteria for evaluating performance of Other Employees

The power to decide criteria for evaluating performance of Other Employees has been delegated to HR Department of the Company.

5 Communication of this Policy

For all Directors, a copy of this Policy shall be handed over within one month from the date of approval by the Board. This Policy shall also be posted on the web-site of the Company and in the Annual Report of the Company.

6 Amendment

Any change in the Policy shall, on recommendation of NR Committee, be approved by the Board of Directors of the Company. The Board of Directors shall have the right to withdraw and / or amend any part of this Policy or the entire Policy, at any time, as it deems fit, or from time to time, and the decision of the Board in this respect shall be final and binding.

The Nomination and Remuneration Policy is placed on the website of the Company. The same can be viewed at <http://www.gfl.co.in/pdf/> Gujarat-Fluorochemicals-Limited-Nomination-and-Remuneration-Policy.pdf

c Stakeholders' Relationship Committee

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with relevant Rules made thereunder and Clause 49 of the Listing Agreement, the Board of Directors at its Meeting held on 29th May, 2014, has changed the name of its Share Transfer and Investors Grievance Committee to Stakeholders' Relationship Committee.

Terms of Reference

The Committee specifically looks after the redressal of Shareholders and Investor complaints for non-receipt of Share Certificate after transfer, non-receipt of dividend, etc, and to ensure their expeditious disposal. The Committee approves the request for share transfers, transmission, re-materialization, issue of duplicate share certificates, splitting and consolidation of Share Certificates after the same are processed and approved by the Company's Registrar and Share Transfer Agent viz. Link Intime India Private Limited.

Shri Bhavin Desai, Company Secretary acts as Compliance Officer of the Company.

During the year ended on 31st March, 2015, the Company has received 21 complaints which were replied / resolved to the satisfaction of the Shareholders and no requests for transfer were pending for approval as on 31st March, 2015.

d Corporate Social Responsibility Committee

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with relevant Rules made thereunder, the Board of Directors at its Meeting held on 29th May, 2014, has constituted a Corporate Social Responsibility Committee

The Board of Directors of the Company at its meeting held on 21st October, 2014 has adopted a Corporate Social Responsibility Policy ("CSR Policy") of the Company which was reviewed and recommended by the Corporate Social Responsibility Committee of the Company. The CSR Policy of the Company is disclosed on the Company's website. The same can be viewed at <http://www.gfl.co.in/pdf/CSR_Policy_> Final_05112014.pdf

5. Subsidiary Companies:

In compliance with the provision of Clause 49 (V) (c) of the Listing Agreement, the Company has formulated a policy for determining 'material' subsidiaries and such policy has been disclosed on the Company's Website. The same can be viewed at <http://www.gfl.co.in/pdf/GFL%20-%20> Material%20Subsidiary%20Company%20Policy.pdf

7. Disclosures

a) Materially significant related party transactions:

There were no materially significant transactions with related parties during the Financial Year which were in conflict with the interest of the Company. Suitable disclosure of related party transactions as required by the Accounting Standards (AS18) has been made in the Note No. 53 to the Standalone Financial Statement and in the Board's Report as required under Section 134 of the Companies Act, 2013.

The Board has also approved a policy on Materiality of Related Party Transactions which also includes procedure to deal with Related Party Transactions and such policy has been put up on the Company's Website. The same can be viewed at <http://www.gfl.co.in/pdf/GFL%20-%20> Related%20Party%20Transaction%20Policy.pdf

b) Details of non-compliance:

During the last three years, there were no instances of non-compliance, penalties or strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets.

c) Whistle Blower Policy:

The Company has adopted Whistle Blower Policy at its Board Meeting held on 29th May 2014 to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. Adequate safeguards have been provided in the Policy to prevent victimization of Directors/Employees. No personnel has been denied access to the Audit Committee. A copy of Company's Whistle Blower Policy has been put up on Company's Website. The same can be viewed at <http://www.gfl.co.in/pdf/Whistleblower-Policy-FINAL-29052014->Website.pdf

d) Disclosure about Directors being appointed / re-appointed:

The brief resume and other information required to be disclosed under this section is provided in the Notice of the Annual General Meeting.

e) Management Discussion and Analysis Report:

Management Discussion and Analysis Report is set out in the Board's Report forming part of the Annual Report

f) CEO/CFO Certification

The Company has obtained a certificate from the Managing Director and Chief Financial Officer in respect of matters stated in Clause 49 (IX) of the Listing Agreement.

g) All the mandatory requirements of Clause 49 of the Listing Agreement have been complied by the Company.

h) Adoption of Non Mandatory requirement

Audit qualification: For the year ended 31st March, 2015, there is no audit qualification in the Company's financial statements. The Company continues to adopt best practices to ensure the regime of unqualified financial statements.

8. Means of communication

The quarterly / annual Financial Results as also Annual Report of the Company/Subsidiaries during / for the year ended 31st March, 2015 were submitted with the Stock Exchanges immediately after they were approved by / taken on record by the Board and published in well-circulated Gujarati (Vadodara Samachar) and English dailies (Financial Express and / or Business Standard) as well. The said results along with official news releases and presentations made to the institutional investors / analysts have been posted on the Company's website viz www.gfl.co.in

9. General Shareholder information

Annual General Meeting : Tuesday, 29th September, 2015

Financial Year : April to March

Book Closure Date : 23rd September, 2015 to 29th September, 2015

Dividend Payment Date : On or before 28th October, 2015

Listing of Equity Shares

National Stock Exchange of India Limited, Exchange Plaza, Bandra - Kurla Complex, Bandra (E), Mumbai 400 051

BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001

The Calcutta Stock Exchange Association Limited. 7, Lyons Range, Kolkata 700 001

(The Company's application for voluntarily delisting of its equity shares with The Calcutta Stock Exchange Association Limited is pending with the Stock Exchange since 2004).

Stock Code

BSE Limited : 500173

National Stock Exchange of India Limited (symbol) : GUJFLUORO

Demat ISIN Number in NSDL and CDSL : INE538A01037

9.9 Registrar and Share Transfer Agents

For lodgment of transfer deeds and other documents or any grievances / complaints, Investors may contact the Company's Registrar and Share Transfer Agents at the following address:

Link Intime India Private Limited, B - 102 & 103, Shangrila Complex, First Floor, Near Radhakrishna Char Rasta, Akota, Vadodara 390 020.

9.10 Share Transfer System

Trading in the Company's shares on the Stock Exchanges takes place in electronic form. However, the share transfers which are received in physical form are processed and the Share Certificates returned within a period of 15 days from the date of receipt, subject to the documents being valid and complete in all respects.

9.12 Dematerialization of shares

The Company's Equity Shares are traded compulsorily in dematerialized form. Approximately 98.46% of the Equity Shares issued by the Company have been dematerialized upto 31st March, 2015.

9.13 Outstanding GDRs/ADRs/Warrants:

The Company has not issued GDRs/ADRs/Warrants or any convertible instruments.

9.14 Liquidity

The Company's Equity Shares are traded on BSE Limited and National Stock Exchange of India Limited. Relevant data of BSE Limited and National Stock Exchange for the Financial Year 2014-15 is given in 9.7 above.

9.15 Listing Fees

The Company has paid the Annual Listing Fees for the Financial Year 2014-15 to the NSE and BSE on which the securities are listed.

9.16 Plant location Ranjitnagar Plant

Survey Number 16/3, 26 and 27, Ranjitnagar 389 380, Taluka Ghoghamba, District Panchmahal, Gujarat State

Dahej Plant

Plot Number 12-A, GIDC, Dahej Industrial Estate, Taluka Vagra, District Bharuch, Gujarat State

9.17 (i) Address for Investor Correspondence

Link Intime India Private Limited, B - 102 & 103, Shangrila Complex, First Floor, Near Radhakrishna Char Rasta, Akota, Vadodara 390020

ii Any query on Annual Report

Company Secretary, Gujarat Fluorochemicals Limited, ABS Towers, 2nd Floor, Old Padra Road, Vadodara 390 007

9.18 Code of Conduct

The Board of Directors of the Company had laid down a Code of Conduct for all the Board Members and Senior Management of the Company which was amended at is meeting held on 21st October, 2014 by including duties of Independent Directors. All the Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct. The Code of Conduct is placed on the website of the Company at <http://www.gfl.co.in/corporate_governance.htm>