REPORT ON CORPORATE GOVERNANCE
The Directors present the Company's Report on Corporate Governance for the year ended 31st March, 2015.
COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
The Company's philosophy thrives on the fundamental goal which is to establish trust with all the stakeholders enabling the Company to grow and be recognized as a market leader in its segment known for niche products. The Company believes in instilling a sense of ownership in its employees and to create value for everyone that touches its business. Our commitment towards integrity, fairness and transparency underpins our corporate governance and is a responsibility to all its stakeholders. Such commitment will in turn lead to greater corporate recognition and enhance shareholder value.
The Compliance Report on Corporate Governance herein signifies compliance of all mandatory requirements of Clause 49 of the Listing Agreement with the Stock Exchanges
BOARD OF DIRECTORS Composition and size of the Board
The present strength of the Board is 7 (seven) Directors comprising of an optimum combination of executive and non-executive directors with more than half of the Board (4) being independent (including woman director) and the other directors being a non-executive Chairman, CEO & Managing Director and Executive Director. The Non-Executive Independent Directors bring independent judgment in the Board's deliberations and decisions.
Committee of Directors
With a view to have a more focused attention on various aspects of business and for better accountability, the Board has constituted the various Committees viz. Audit Committee, Stakeholders' Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Committee of Directors. Each of these Committees has been mandated to operate within a defined framework.
The Management structure for running the business activities of the Company is in place with appropriate delegation of powers and responsibilities. This broadly is as under:
a. Chief Executive Officer and Managing Director
The Chief Executive Officer and Managing Director (CEO & MD) is in overall control and responsible for the day-to-day working of the Company. He gives strategic directions, lays down policy guidelines and ensures implementation of the decisions of the Board of Directors and its various Committees.
b. Chief Financial Officer and Secretary
The Chief Financial Officer and Secretary is responsible for the day-to-day functioning of the financial and secretarial matters and various compliances under the statutory Acts. He reports to the Managing Director and the Board.
c. Executive Director
The Executive Director of the Company is responsible for the operation and maintenance of the Plant and all other functions relating to the day-to-day management of the Plant including the local issues and liasioning with various Government departments as applicable at Plant level. His team consists of technical and commercial managers who report to him on regular basis. He reports to the Managing Director and other Board members of the Company.
The Board of Directors comprises of renowned professionals from diverse fields. They bring with them independent judgments which enhances the quality of the Board's decision making process.
The brief profile of the Company's Board of Directors is as under:
Shri. M. M. Dhanuka, B.E. (Chem), aged 67 years, is the founder member of the Company. He possesses over 35 years of varied experience and expertise in technical, production and marketing.
Shri. Nikunj Dhanuka, aged 47 years is Commerce and a Management Graduate and Promoter of the Company. He has been associated with the Company since 1998 and brings with him diverse experience of handling overseas business and possesses an extensive knowledge on the functioning of Chemical Industries as such. He is in charge of the overall affairs of the Company and specifically supervises the finance, banking and operations of the Company.
Shri. J. K. Saboo, aged 61 years is a Commerce and Law graduate. He is associated with the Company since 1991. In all, he has more than 35 years of experience in the petrochemical industry. He is in charge of the operations of the Company's Plant situated at Taloja.
Shri. Rajesh Muni, aged 63 years is a Commerce Graduate (Hons.) and a fellow member of The Institute of Chartered Accountants of India. He is a senior partner of M/s R.R. Muni & Co., Practicing Chartered Accountants and has more than 30 years of rich experience in audit and taxation.
Dr. A. K. A. Rathi, aged 66 years is M.E. (Chem), Ph.D (Chem) and Diploma in Management and Integrated Coastal Zone Management,. He was associated with the Industries Department and Forest and Environment Department with the Government of Gujarat, Faculty of Planning and Public Policy, CEPT University, Ahmedabad, etc. He has penned various articles on matter of subject interests' viz. industrial development, management, safety and environment in different journals, periodicals etc. and is a visiting professor to various engineering and management colleges.
Shri P H. Ravikumar, aged 64 years is a B.Com, CAIIB, ACIB (Lond.), FCISI (Lond.) (Hons.) and a retired Banker. He possesses an expertise in finance and has sharp acumen in corporate banking functions, treasury, retail, agri business verticals. He is also associated with Commodity and Derivatives exchanges.
Dr. Vaijayanti Pandit, aged 64 years, is a M.A. in Political Science, Diploma in Journalism and Mass Communications and Ph.D in Management Studies. She holds the credit of successfully setting up a vibrant organization of woman entrepreneurs, managers, professionals, etc. that has grown exponentially as the largest in India. She was the Secretary of Indian Merchants Chambers for the period 1999-2006 and handled Trade Fairs and Business Promotions, International Trade Missions and Policy issues having a direct impact on Business and Industry. She was also a Senior Director of the Federation of Indian Chambers of Commerce and Industry (FICCI) from 2006-12.
Board Training and Induction
Based on the recommendation of the Nomination and Remuneration Committee, the Board formally makes the appointment of a Director. A formal letter of appointment containing the terms and conditions including the role, responsibilities, duties and functions expected from the appointee is issued to the Director. This process runs concurrent with the briefing by the Chairman to make the director conversant with the Board Policy and Process, history of the Company and the major milestones, information about the products manufactured by the Company vis-a-vis general industry scenario, etc. The specific attention of the appointee is also drawn to the legislative provisions which are Clause 49 of the Listing Agreement, the Companies Act, 2013 read with the relevant rules framed thereunder in so far as its concerns the Directors and the obligations attached to the Directorship. The Directors are also informed of their tenure and the conditions that their appointment is subject to the confirmation by the shareholders at their meeting.
The Board, thus, attempts to familiarize the newly appointed directors by adhering to the above mechanism so as to achieve the object to bringing diversity to the Board which in turn would result in effective and responsible decision making process.
BOARD MEETINGS AND ATTENDANCE
During the year under review, four Board Meetings were held i.e. on 22nd May, 2014, 30th July, 2014, 13th November, 2014 and 10th February, 2015.
COMMITTEES OF THE BOARD
In accordance with the statutory provisions, the Board of Directors have from time to time constituted mandatory as well as non-mandatory committees viz. Audit committee, Stakeholders' Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Committee of Directors. The constitution and composition of mandatory committees are governed by the provisions of law to achieve certain purpose as intended by the legislative provisions. The non-mandatory committees are designated purely for the purpose of administrative convenience and to deal with matter of lesser importance which could be done otherwise than by a Board but within the scope and framework defined by the Board.
The Board follows the process of defining in clear terms the references, powers, scope, etc. while constituting of the committees. The Committees from time to time meet at such time and interval as deemed necessary considering the statutory law and business exigencies. The Committees are entrusted with the responsibilities to keep the Board abreast of all decisions arrived by it by placing the minutes of its meetings at the immediately succeeding meeting of the Board apart from circulating the same along with agenda to the Board Members.
Terms of Reference of the Committee are:
i. To oversee Company's financial reporting/financial information/financial statements.
ii. To review with management the Annual financial statements before submission to Board, focusing primarily on changes in accounting policies and practices.
iii. To look into compliance with Stock Exchange and legal requirements concerning financial statements.
iv. To review the external and internal management systems and internal control systems.
v. To discuss with the auditors periodically about internal control system, the scope of audit including the observations of the auditors and review the half yearly and annual financial statements before submission to the Board and also ensure compliance on internal control system.
Additional Terms of Reference as per the provisions of Section 177 of the Companies Act, 2013
i. The recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
ii. Review and monitor the auditor's independence and performance and effectiveness of audit process;
iii. Examination of the financial statement and the auditor's report thereon;
iv. Approval or any subsequent modification of transactions of the Company with related parties;
v. Scrutiny of inter-corporate loans and investments;
vi. Valuation of undertakings or assets of the Company wherever it is necessary;
vii. Evaluation of internal financial controls and risk management systems;
viii. Monitoring the end use of funds raised through public offers and related matters.
The Managing director, the Internal Auditors and the Statutory Auditors are the invitees to the meeting. It is the prerogative of the Audit Committee to invite Senior Executives, whom it considers appropriate to be present at the Meetings.
The Chairman of the Audit Committee was present at the Annual General Meeting of the Company held on 26th July, 2014.
Self Assessment by the Audit Committee
The Audit Committee has set in place a process to measure and benchmark its performance each year. The assessment broadly covers composition, structure and committee meetings, overview of the financial reporting process, internal control systems and overview of internal and external audits. The results of the self assessment are presented to the audit Committee along with the action plan in the areas requiring improvement.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Shareholders/Investors Grievance Committee was rechristened to 'Stakeholders' Relationship Committee' to comply with the provisions of Section 178 of the Companies Act, 2013 and the Listing Agreement.
The Committee overseas and reviews all matters connected with the investor services viz. transfer of shares, dematerialization and rematerialisation of shares, issue of duplicate share certificates in lieu of reported lost, defaced or destroyed certificates, issue of new certificates against sub-division of shares, renewal, split or consolidation of share certificates, issue of rights, bonus share etc. and other related matters. The investor grievances mainly pertains to non-receipt of Annual Reports, notices, non-receipt of dividends, change of address, etc. and are being attended by M/s Bigshare Services Pvt. Ltd., Registrar and Transfer Agent (RTA) administered under the supervision of the Company Secretary and a periodical report on the same is being presented before the Committee as and when it meets..
The Committee oversees the performance of the RTA and recommends measures for overall improvement in the quality of investor services. The Board has also constituted the Share Transfer committee which deals with transfers/transmissions of securities and other matters and delegated the power of approving the transfer statements to the officers of the Company.
NOMINATION AND REMUNERATION COMMITTEE
Terms of Reference and Remuneration Policy :
The terms of reference of the Committee includes manner of selection of the Directors and senior management personnel, the determination of their remuneration and evaluation of their performance. In the process of the appointment of Directors, the Committee attempts to bring diversity to the Board having regard to the nature of the business of the Company, consider the appointee's expertise and experience, age, qualification, degree of independence, integrity, etc.
The Non-executive directors are paid sitting fees for each meeting of the Board/Committee whereas the remuneration of the executive directors consists of fixed pay, perquisites, etc. subject to the overall ceiling limit under the Companies Act, 2013. The remuneration of the senior management employees are recommended by the Committee based on the prevailing industry standards.
The Board evaluates its own performance vis-a-vis directors individually taking into consideration the number of meetings attended, level of engagement, measures initiated for the protection of the stakeholders' interest, etc.
The Committee discharges its function within the defined scope of reference.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The terms of reference of the CSR Committee broadly comprises of:
a) To identify core areas where social activities are required to be done i.e. eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water.
b) Promoting education, especially among children, women, elderly, and the differently abled and livelihood enhancement projects.
c) Rural development projects.
d) Overall developmental activities in areas surrounding our manufacturing sites for the benefit of the society.
e) Any other projects which may be recommended and taken from time to time.
Related Party Transactions
The Company has certain long term related party transactions which are on arm's length basis and in the ordinary course of business. During the year under review, there were no related party transactions within the meaning of Section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meeting of the Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement. 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 as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.
The Board has approved a policy for related party transactions which has been uploaded on the company's website.
Strictures and Penalties:
No strictures or penalties were imposed on the Company by the Stock Exchanges or by the Securities and Exchange Board of India or by any statutory authority on any matters related to capital markets during the last three years.
Compliance with Accounting Standards
In the preparation of the financial statements, the Company has followed the Accounting Standards notified pursuant to Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provision of the Companies Act, 1956 read with General Circular 8/2014 dated April 04, 2014, issued by the Ministry of Corporate Affairs. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.
The Company has a formal system of internal control testing which examines both the design effectiveness and operational effectiveness to ensure reliability of financial and operational information and all statutory /regulatory compliances. The Company's business processes are on SAP-ERP platforms and has a strong monitoring and reporting process resulting in financial discipline and accountability.
CEO & MD / CFO Certification
The CEO & MD and the CFO have issued certificate pursuant to the provisions of Clause 49 of the Listing Agreement certifying that the financial statements do not contain any untrue statement and these statements represent a true and fair view of the Company's affairs.
Code of Conduct
The Board of Directors has approved a Code of Business Conduct which is applicable to the Members of the Board and all senior employees of the Company. The Code lays down the standard of conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. The Code has been posted on the Company's website www.igpetro.com
Vigil Mechanism / Whistle Blower Policy
The Company is committed to the high standards of Corporate Governance and stakeholder responsibility and hence has adopted the Vigil Mechanism/Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. All protected disclosures should be reported in writing by the complainant as soon as possible about the instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct. The CFO & Secretary is the Vigilance Officer who should be reported about the disclosures. All protected disclosures shall be thoroughly investigated and action or corrective action taken as it may deem fit. The investigation reports shall be placed before the Audit Committee and the Board.
Prevention of Insider Trading
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Company Secretary is responsible for implementation of the Code.
All Board Directors and the designated employees have confirmed compliance with the code.
Communication with the Members/Shareholders
The information related to the Unaudited quarterly / half yearly Financial Results are announced within forty-five days of the close of the quarter. The Annual Audited Financial Results are announced within two months from the close of the financial year as per the requirements of the Listing Agreement with the Stock Exchanges. The aforesaid financial results are sent to BSE Limited (BSE) and The National Stock Exchange of India Limited (NSE) where the Company's securities are listed. The results are thereafter published within forty-eight hours in English and Marathi newspapers. The audited financial statements forms part of the Annual Report which is sent to the Members well in advance of the Annual General Meeting.
The Company also informs from time to time all the price sensitive matters or such other matters which in its opinion are material and of relevance to the members.
The Annual Report of the Company, the quarterly / half yearly and the annual results are also placed on the Company's website: www.igpetro.com and can be downloaded.
Non mandatory disclosures
The Company has fulfilled the following non-mandatory requirements as prescribed under Clause 49 of the Listing Agreement:
a) The financial statements of the Company are unqualified
b) The post of Chairman and Managing Director are being held by separate individuals
c) The Internal Auditors are invitees to the Audit Committee meetings and report to the Audit Committee.
GENERAL INFORMATION TO SHAREHOLDERS
Date, Time and Venue of AGM :
Monday, 17th August 2015 at 11.00 a.m. at Hotel Mandovi, D. B. Bandodkar Road, Panaji,
Goa - 403 001.
Date of Book Closure
The Register of Members and Share Transfer Books will be closed from Tuesday, 11th August 2015 to Monday, 17th August 2015 (both days inclusive).
Financial Year : 1st April to 31st March
Dividend Payment Date : 25th August 2015.
Listing on Stock Exchange
Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India (NSE). The listing fees have been paid to BSE & NSE for the year 2015-16.
BSE - 500199
NSE - IGPL
ISIN Code : INE 204A01010
Share Transfer System
Being done by the Registrar & Transfer Agents
Dematerialisation of shares
92.48 % of the shares have been dematerialised by the members as on 31.03.2015.
Registrar & Transfer Agents
M/s Bigshare Services Pvt. Ltd., E-2/3 Ansa Industrial Estate, Saki Vihar Road, Sakinaka, Andheri (E), Mumbai 400 072. Contact person - Mrs. Indira Reddy / Ms. Ujata Pokharkar Tel No.: (91) 022-40430200/40430210 Fax No.: (91) 022-28475207 E-mail : firstname.lastname@example.org
The website of the Company www.igpetro.com contains information about the business activities of the Company and the financial results of the Company.
Dedicated e-mail for Investors
To enable investors to register their grievances, the Company has designated an exclusive e-mail id viz. email@example.com All investors are requested to avail this facility.
T-2, MIDC Industrial Area, Taloja 410 208, Dist. Raigad, Maharashtra.
Address for correspondence
The Company Secretary I G Petrochemicals Limited 401-404, Raheja Centre 214, Nariman Point Mumbai - 400 021. Tel.: 022-302 86100 • Email: firstname.lastname@example.org