REPORT ON CORPORATE GOVERNANCE
[Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015(hereinafter referred as "SEBI LODR")]
1. Company's philosophy on code of Governance
The Company is committed to good Corporate Governance. The Company fully realizes the rights of its shareholders to information on the performance of the Company and considers itself a trustee of its shareholders. The Company is of the view that good Corporate Governance is an optimum mix of regulatory compliances as well as voluntary disclosures and practices.
The Company is focused on attaining the highest levels of transparency, fairness, accountability and integrity in its dealings with all the constituents of its business i.e. the stakeholders. Towards this end, substantial disclosures on the Board of Directors and its Committees, financial and stock performance have been made in this Annual Report.
2. Board of Directors
A) Composition of the Board of Directors as on 31 March 2016 is as follows :
The Board of Directors of the Company have an optimum combination of Executive, Non-Executive and Independent Directors who have an in-depth knowledge of business, in addition to the expertise in their areas of specialization. The Board of the Company comprises ten Directors that includes one Woman Director.
None of the Directors held directorship in more than 10 Public Limited Companies and/or were members of more than 10 committees or acted as Chairman of more than 5 committees across all Public Limited Companies in which they were Directors.
None of the Independent Directors served as Independent Director in more than 7 listed Companies.
The Executive Directors were not Independent Directors of any other listed Company.
No Director is related to any other Director on the Board except Mr. Bikram Nag and Mr. Bijon Nag in terms of the definition of "Relative" given under the Companies Act, 2013.
No shares or any other convertible instrument is held by any Non-Executive Director during the year.
C) Board Meetings held in the financial year 2015-2016
The Board meets at least once in a quarter in order to consider amongst other business, the quarterly performance of the Company and its financial results. The gap between any two meetings does not exceed 120 days.
During the year under review four meetings were held on following dates :
29 May 2015, 30 July 2015,30 October 2015,29 January 2016
D) Independent Directors:
The Company has complied with the definition of Independent Director as per SEBI LODR and according to the Provisions of section 149(6) Companies Act, 2013. The company has also obtained declarations from all the Independent Directors pursuant to section 149(7) of the Companies Act, 2013.
i) Training of Independent Directors :
Whenever new Non-executive and Independent Directors are inducted on the Board they are introduced to our Company's culture through appropriate orientation session and they are also introduced to our organization structure, our business, constitution, board procedures, our major risks and management strategy.
The appointment letters of Independent Directors has been placed on the Company's website at www.ifbindustries.com under Legal/investors Relations/ independent director's letters link.
ii) Performance Evaluation of Non-Executive and Independent Directors
The Board evaluates the performance of Non-Executive and Independent Directors which has been recommended by Nomination and Remuneration Committee. All the Non-executive and Independent Directors are eminent personalities having wide experience in the field of business, industry and administration. Their presence on the Board is advantageous and fruitful in taking business decisions.
iii) Separate Meeting of the Independent Directors :
The Independent Directors held a Meeting on 23 March 2016, without the attendance of Non-Independent Directors and members of Management. Three out of five Independent Directors were present at the meeting.
iv) Familiarisation program for Independent Directors
The familiarisation of the Independent Directors is done by the Company. The Managing Director / Executive Director / Sr. Management Personnel who conducts presentations / programmes to familiarise the Independent Directors with the operations and functioning of the Company.
Such presentations / programmes enable the Independent Directors to directly interact with senior leadership of the company and help them to know Company's strategy, business model, product, market, finance, human resource, technology and such other areas as may arise from time to time. Presentations cover annual results, budgets, policies, internal audit etc.
The presentation/programme familiarizes the Independent Directors with their role, right and responsibilities specified under the Companies Act and the SEBILODR. The Web link of the familiarisation programme is given under the official website of the company under the web link : <http://ifbindustries.com/pdf/BOARD_COMMITTEES.pdf>
The Company is also conducting familiarisation programme whenever a new Independent Director is inducted on the Board of the Company.
E) Code of conduct
The Board of IFB has laid down a code of conduct for all Board members and Senior Management of the Company. The Code of Conduct is available on the website of the Company. All Board members and Senior Management personnel have affirmed compliance with the Code of Conduct.
3. Audit Committee
A) Terms of Reference
The Audit Committee is responsible for reviewing with the management the financial statements and adequacy of internal audit function and to discuss significant internal audit findings. The Committee acts as a link between the management, external and internal auditors and the Board of Directors of the Company. The broad terms of reference of this Committee cover the matters specified for Audit Committees under section 177 of the Companies Act, 2013 as well as SEBILODR:
i) Overview of the Company's financial reporting processes and financial information disclosure;
ii) Review with the Management, the annual and quarterly financial statements before submission to the Board; matters to be included into the Directors Responsibility Statement;
iii) Monitoring the auditor's independence and performance, and effectiveness of audit processes;
iv) Review with the Management, the Internal and External Audit Reports and the adequacy of internal control systems and risk management systems;
v) Review the adequacy and effectiveness of accounting and financial controls of the company, compliance with the Company's policies and applicable laws and regulations;
vi) Review the functioning of the Whistle Blower Mechanism;
vii) Recommending the appointment and removal of External Auditors and fixation of audit terms;
viii) Review of utilisation proceeds raised from Public/Right issue.
B) No. of meetings held during the year
During the year under review four meetings were held of the members of the Committee which are as follows : 29 May 2015, 30 July 2015, 29 October 2015 and 28 January 2016.
M/s Deloitte Haskins & Sells, Statutory Auditors, KPMG & PWC, Internal Auditors & in house Internal Auditor of the Company are invited to attend the Audit Committee Meetings.
The Minutes of the Audit Committee are circulated to all the members of the Board.
4. Nomination & Remuneration Committee
A) Terms of Reference
This Committee identifies the persons, who are qualified to become Directors of the Company / who may be appointed in Senior Management in accordance with the criteria laid down, recommend to the Board their appointment and removal and also carries out evaluation of each director's performance. The Committee also formulate the criteria for determining qualifications, positive attributes, independence of the Directors and recommend to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.
B) No. of Meetings held during the year
During the year under review two meeting was held on 29 July 2015 & 30 October 2015.
C) Nomination and Remuneration Policy
The Nomination and Remuneration policy may be referred to at the Company's official website at the web link<http://ifbindustries.com/nomination_remuneration_policy.php>.
5. Corporate Social Responsibility Committee (CSR)
A) Terms of reference
The Committee formulates and recommend to the Board, a CSR Policy. Committee framed a mechanism for implementation of CSR projects or programs or activities undertaken by the Company and also monitor CSR policy from time to time. This policy has been placed in the website of the company at the weblink, <http://www.ifbindustries.com/legal/policies>.
B) No. of Meetings held during the year
During the year the Committee had one meeting i.e. on 23 March 2016.
6. Risk Management
This part is covered under the Directors' Report.
7. Investor's Grievance & Stakeholder's Relationship Committee:
A) Terms of reference :
The terms of reference of the Committee includes the following :
a) To review all complaints recorded in SCORES of SEBI and replies made to the same by RTA / Company Secretary.
b) To receive report on all complaints recorded in SCORES of the Registrar and Share Transfer Agent and note the corrective actions taken by the Registrars.
c) To take action of all grievances and complaints lodged by stock exchange, shareholder associations and other bodies.
d) To review grievances of other Stakeholders of the Company given in their individual capacity.
e) Overview activities relating to Share maintenance and related work.
In view of compulsory trading of shares in dematerialized form and consequent lowering of volume of physical transfers there were very few complaints which were sufficiently addressed to at the level of the Compliance Officer and CB Management Services (P) Ltd., the Registrar & Transfer Agent of the Company for shares both in physical and demat modes.
C) No. of Meetings Held during the year
During the year under review twenty Six meetings were held on the following dates :
2 April 2015,13 Apri 2015, 24 Apri 2015, 6 May 2015,15 May 2015, 27 May 2015,12 June 2015, 24 June 2015, 8 July 2015,15 July 2015,1 August 2015,12 August 2015, 28 August 2015, 8 September 2015, 28 September 2015, 9 October 2015, 23 October 2015, 6 November 2015,1 December 2015,11 December 2015, 23 December 2015,11 January 2016, 25 January 2016, 24 February 2016,11 March 2016 & 31 March 2016.
No. of shareholders complaints received so far:5
No. of complaints not solved to the satisfaction of shareholders:0
No. of pending complaints:0
No. of Complaint disposed off:5
E) Name, Designation & Address of the Compliance Officer:
Mr. Goutam Ray Choudhury, Company Secretary IFB Industries Limited
Plot No IND-5 Sector 1, East Kolkata Township, Kolkata - 700 107
Tel: (033) 39849524, Fax : (033) 24421003, E-Mail: email@example.com
8. Means of communication :
The quarterly, half yearly and annual results of the Company are forthwith communicated to the Stock Exchanges with whom the Company has listing agreements as soon as the results are approved and taken on record by the Board of Directors of the Company. Further, the results are generally published in leading newspapers such as Business Standard (English) and Aajkal (Bengali). No presentation was made to the institutional investors/analysts during the year 2015-2016. However Investors calls were duly attended and redressed for each quarter.
The quarterly, half-yearly and annual financial results and Official News releases are posted in respective Stock Exchange web-sites and also on the web site of the Company.
9. General Shareholder Information
i) 40th AGM date, time and venue :
22 July 2016 At. 9.30 A.M.
Club Ecovista, Ecospace Business Park, Premises No. 2F/11, Action Area II, Rajarhat, New Town, Kolkata - 700 156.
ii) Financial Year
01 April 2015 to 31 March 2016.
iii) Book Closure date
16 July 2016 to 22 July 2016 (both days inclusive)
iv) Dividend payment date
Dividend is not recommended.
v) Listing on Stock Exchange
a) Bombay Stock Exchange Limited (BSE)
b) The National Stock Exchange of India Limited (NSE)
c) The Calcutta Stock Exchange Association Limited (CSE) (applied for delisting)
vi) Listing Fees to Stock Exchanges
The listing fees for NSE, BSE & CSE has been paid within time limit for the year 2016-17. DSE has been derecognised by SEBI.
vi) Stock Code
NSE IFB IND
ix) Registrars and Share Transfer Agents :
CB Management Services (P) Ltd.
P 22 Bondel Road, Kolkata 700 019
Tel : (033) 4011 6700/2280 6692/ 22823643 Fax: (033) 40116739
E-mail: firstname.lastname@example.org Website: www.cbmsl.com
x) Share Transfer System
In order to expedite the process, the Board of Directors has also delegated the authority to approve the share transfers to the Company Secretary of the Company. The transactions of shares held in Demat and Physical form are handled by the Company's Depository Registrar, CB Management Services (P) Ltd.
xii) Dematerialization of shares :
As on 31st March 2016, 97.61% of the Company's total shares representing 39550607 shares were held in dematerialised form and the balance 2.39% representing 968189 shares were held in physical form.
xiii) Commodity Price Risk or Foreign Exchange Risk and Hedging Activities
The Company is exposed to foreign currency risk for the raw materials and capital goods that it imports and export of finished goods and engages in foreign currency hedging with banks by way of currency forward contracts in order to protect its foreign exchange exposure arising from its foreign-currency denominated purchase in terms of the foreign exchange risk management policy of the Company.
xiv) Outstanding GDRs/ADRs/Warrants or any convertible instruments
The Company has not issued any Convertible instruments, conversion any GDRs / ADRs / Warrants
xv) Plant locations
a) 14 Taratolla Road, Kolkata - 700 088
b) JL-71, P. O. Bishnupur, Gangarampur, West Bengal
c) L-1, Vema Electronic City, Verna, Selcete, Goa - 403 722
d) 62,64 & 66 Corlim Indl. Estate, Corlim Il has, Goa - 403 110
e) 16/17, Visveswariah Ind l, Estate, Whitefield Road, Bangalore - 560 048
xvi) Address for correspondence
Corporate Office Plot No. IND 5, SectorI, East Calcutta Township, Kolkata - 700 107.
Tel: (033) 39849475 Fax: (033) 39849676
10. Other Disclosures:
A) Disclosure on materially significant related party transactions that may have potential conflict with the interest of the Company at large.
None of the transactions with any of the related parties were in conflict with interests of the Company. Transactions with the related parties are disclosed in Note No. 35 "Notes to Financial Statements" annexed to the Financial Statements for the year. The Policy on Related Party has been given under Company's official website under the web link: <http://ifbindustries.com/csrpolicy.php>
B) Details of non-compliance by the Company, penalties, and strictures imposed on the Company by the Stock Exchanges, SEBI or any statutory authorities on any matter related to capital markets during the last 3 years : None
C) The financial statements for the year 2015-16 have been prepared in accordance with the applicable accounting standards prescribed by The Institute of Chartered Accountants of India and there are no deviations.
D) The Board has noted and reviewed the Compliance Reports of all laws applicable to the Company, which were placed before each of its meeting held during the year 2015-16.
E) The Company has adopted Whistle Blower/Vigil Mechanism Policy for Directors and employees which has been placed in the website of the Company under the web link <http://www.ifbindustries.com/vigil_mechanism.php>. No personnel has been denied access to the Audit Committee.
F) The Company has taken several mitigating actions, applied many strategies and introduced control and reporting systems to reduce and mitigate risk.
G) Reconciliation of Share Capital Audit:
A Qualified Practicing Company Secretary carried out Reconciliation of Share Capital Audit during the financial year 201516 on quarterly basis to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The Reconciliation of Share Capital Audit Report confirms that the total Paid up Share Capital is in agreement with the total No. of Shares in physical form and the total number of Dematerialized shares held with NSDL and CDSL.
H) The Company has complied with all the mandatory requirements specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of the SEBI LODR.
This Corporate Governance Report of the Company for the year 2015-2016 as on 31st March, 2016 are in compliance with the requirements of Corporate Governance under SEBI LODR as applicable.
11. Requirement under PART E of Schedule II
i) The Board
Is not applicable as the Company is having one Executive Chairman.
ii) Shareholders' Rights
The Company's financial results are published in the newspaper and also posted on its website www.ifbindustries.com Hence Financial Results are not send to the Shareholders. However the Company furnishes the financial results on receipt of request from the shareholders.
iii) Modified opinion in Audit Report
The Company, at present, does not have any audit qualification pertaining to the financial statements.
iv) Seperate post of Chairman and Chief Executive Officer
The Compnay has appointed seperate persons as Chairman and Managing Director
v) Reporting of Internal Auditor
KPMG, PWC & the Company's Internal Auditor report directly to the Audit Committee.