CORPORATE GOVERNANCE REPORT
Company Philosophy on Corporate Governance
Corporate Governance is an essential element of JBF Industries Limited's business practices and value system. The major facets of company's corporate governance codes and policy are:
1. Highest level of transparency and accountability.
2. All operations and actions should serve the goal of enhancing share holder value.
3. Commitment to highest level of customer's satisfaction.
4. Total compliance towards statutory aspects including environmental standards.
5. Continuous activities towards sustained developments of the Company. The Company strongly believes that good corporate governance ultimately leads to growth and competitive strength and the corporate governance norms are the foundations of all procedures at the Board and operational levels.
Board of Directors
Composition & Category of Directors
The Board of Directors consists of 10 Directors out of which 5 are Independent. The Company has an Executive Chairman. The proportion of Non-Executive Directors to Executive Directors complies with the provisions of listing agreement with Stock Exchanges.
CEO & CFO
Mr. Rakesh Gothi, Managing Director, is designated as Chief Executive Officer (CEO; of the Company. Mr. P. N. Thakore, Director-Finance, is designated as Chief Finance Officer (CFO; of the Company till 30th September, 2015.
DIRECTORS RETIRING BY ROTATION IN THIS ANNuAL GENERAL MEETING:
Mr. Rakesh Gothi, is retiring by rotation and Mr. N.K.Shah, Director-Commercial will be re-appointed w.e.f. 1st September, 2015, as the terms of his appointment expires on 31st August, 2015. The term of appointment of Mr. Sunil Diwakar will be changed by making him an Independent Director, not retiring by rotation, for five years.
Brief Profiles Retiring / Change in Terms of Directors :
Mr. Rakesh Gothi (DIN 00229302) a Bachelors Degree in Technology from the Indian Institute of Technology, Madras, a Masters Degree in Science from the University of California and a Masters Degree in Business Administration from the University of Minnesota. Mr. Gothi holds 40770 shares of the Company as on 31st March, 2015.
Mr. Bhagirath C. Arya (DIN : 00228665) Executive Chairman of JBF Industries Limited is an Electrical Engineer by qualification. He started his career in Textile Industry and has more than 4 decades experience in various segments of Textile Industry.
Mr. Nilesh Shah (DIN 00232130) holds a Masters Degree in Microbiology from the Gujarat University, Ahmedabad. Mr. Shah holds 7200 shares of the Company as on 31st March, 2015'
Mr. Sunil Diwakar (DIN: 00089266) holds a Masters Degree in Production Technology from IIT, Madras and also holds a diploma in International Management from IMI, New Delhi. He joined IL&FS in the year 2004. He has an experience of over 18 years in the Indian Private Equity Industry and 3.5 years experience in the Aeronautical Engineering Industry.
Mr. Diwakar is on the Board of Asian Hotels (West; Ltd., Electrosteel Steels Ltd., Prasad Corporation Ltd., JICS Logistics Ltd., and RSB Transmission (I; Ltd.
He is also member of Audit Committee of Prasad Corporation Ltd., & RSB Transmission (I; Ltd. and member of Remuneration Committee of Prasad Corporation Ltd., & RSB Transmission (I; Ltd.
Mr. Diwakar holds 30000 shares of the Company as on 31st March, 2015
Formal Letter of Appointment to Independent Directors
On appointment, the concerned Independent Director is issued a Letter of Appointment setting out in detail, the terms & conditions of appointment.
Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of Independent as provided under the Companies Act, 2013 and Listing Agreement.
Performance Evaluation of Independent Directors
The Performance Evaluation of the Independent Directors of the Company based on the evaluation criteria laid down by the Nomination and Remuneration Committee was completed in the Board meeting held on 27th May, 2015.
Separate Meeting of the Independent Directors
As per the Code of Independent Directors under Schedule IV of the Companies Act, 2013 and the Listing Agreement a separate meeting of the Independent Directors was held on 20th March, 2015 under the Chairmanship of Mr. B.R. Gupta, Independent Director, to review the performance of the non-independent directors and the Board as a whole along with the Chairman of the Company. The Independent Directors also assessed the quality, quantity and timeliness of flow of information between the Management and the Board and its Committees which is necessary to effectively and reasonably perform their duties.
Familiarization programme for Independent Directors
Independent Directors are given presentations every quarter about the business scenario, the information of the Industry and progress of the different projects of the Company along with the photographs and other details . Plant visits are also conducted by the Company twice in a year or as and when it is required.
A Familiarization Program is conducted, if required, from time to time, for Independent Directors to familiarize them with the Company, their roles rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company so that they can contribute in a meaningful way to the Company.
Non-Executive Directors' compensation and disclosures
The remuneration of Non-Executive Directors (NEDs; for attending Board and its Committees meetings of the Company has been decided by the Board of Directors of the Company which is within the limits prescribed under the Companies Act, 2013. Approval of the shareholders is obtained wherever required. The Company has not granted stock options to the Directors during the year.
Meeting of The Board of Directors
During the Financial Year 2014-2015 the Board of Directors met 6 times on 15th May, 2014, 27th May, 2014, 13th August, 2014, 14th November, 2014, 22nd December, 2014 and 11th February, 2015.
One resolution was passed through circulation on 13th May, 2015 in connection with Code of practices and procedures for Fair Disclosures of Unpublished Price Sensitive Information and Code of Conduct for Insider Trading as per new guidelines.
Procedures at the Board Meetings
The Board of Directors meet at least once in every quarter to review performance of the company along with the financial results. The functions of the Board are effectively and efficiently discharged by briefing each Board member of developments that have taken place.
Apart from the quarterly meetings additional meetings are also convened if required for the specific needs of the Company, by giving appropriate notice.
The Board may also approve urgent matters by passing resolutions by circulations, if permitted by law.
In the various meetings, the progress at subsidiaries JBF Global Pte Ltd., JBF RAK LLC, JBF Petrochemicals Limited, JBF Bahrain S.PC., JBF Global Europe BVBA and JBF Glicols Industria Quimica Ltda has been placed before the Board for their notification.
The Board has ensured the review of compliance reports of all laws applicable to the Company and reviewed quarterly compliance reports. There were no instances of non compliance noticed in such reviews.
The Board notes different risk factors involved in the business and analyses of the same. The different risks involved are mitigated by analysing existing controls and facilities.
The presentation is given to the Board, covering Finance, Sales and Marketing & Operations of the Company, before taking the quarterly results of the Company on record.
Recording Minutes of Proceedings at Board and Committee Meetings
The minutes of the proceedings of each Board and Committee Meetings are recorded by the Company Secretary. Draft Minutes are circulated to all the members of the Board/Committee for their comments. The minutes of the proceedings of the meetings are completed within 30 days from the date of the conclusion of meeting.
Board Committees I. Audit Committee
The terms of reference stipulated by the Board to the Audit Committee are, as contained in Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013, as follows:
Powers of Audit Committee
The audit committee shall have following powers:
• To investigate any activity within its terms of reference.
• To seek information from any employee.
• To obtain outside legal or other professional advice.
• To secure attendance of outsiders with relevant expertise, if it considers necessary.
Role of Audit Committee
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, 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; 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 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 thereon;
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 any material nature and reporting the matter to the board;
16. Discussion with the statutory auditors before 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 reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders ( in case of non-payment of declared dividends; and creditors;
18. To review the functioning of the Whistle Blower mechanism;
19. Approval of appointment of CFO (i.e. whole-time Finance Director or any other person heading the finance function or discharging that function; after assessing the qualification, 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.
Review of Information by Audit Committee
The Audit Committee shall mandatorily review the following informations:
• Management discussion and analysis of financial condition and results of operations.
• Statement of significant related party transactions (as defined by the Audit Committee; submitted by Management.
• Internal audit reports relating to internal control weakness.
• Management letters / letters of internal control weaknesses issued by the statutory auditors; and
• The appointment, removal and terms of remuneration of Internal Auditors shall be subject to review by the Audit Committee.
Mr. Rakesh Gothi, Managing Director, Mr. N. K. Shah, Director-Commercial, Statutory Auditors, Internal Auditors and General Manager Accounts were invited to attend all the Audit Committee Meetings.
During the Financial Year 2014-2015 the Audit Committee met 4 times on 27th May, 2014, 13th August, 2014, 14th November, 2014 and 11th
The Chairman of the Audit Committee attended last Annual General Meeting.
All the members of the Audit Committee possess financial / accounting expertise.
II. Stakeholders Relationship Committee
The Stakeholders Relationship Committee meets once in every quarter to review and to take note of the Compliance Reports submitted to the Stock Exchanges and grievances of the shareholders.
During the Financial Year 2014-2015 the Stakeholders Relationship Committee met 4 times on 27th May, 2014, 13th August, 2014, 14th November, 2014 and 11th February, 2015.
The total number of complaints received and replied to the satisfaction of the shareholders during the year was 12. Pending complaints as on 31st March, 2015, were Nil.
Company had received confirmation from BSE & NSE informing that no investor complaints pending as on 31st March, 2015.
Mrs. Ujjwala Apte, Company Secretary of the Company, has been recognised as Chief Compliance Officer.
III. Nomination and Remuneration Committee
Nomination and Remuneration Committee has been constituted to recommend the increase / modifications in the Remunerations of the Managing Director, Whole-time / Executive Directors based on their performance and defined assessment criteria.
Terms of Reference of the Committee
1. Matters pertaining to the Nomination and Remuneration of members of the Board of Directors & Key Managerial Persons (KMPs;
2. Preparation of the proposal to the General Meeting on matters pertaining to the remuneration of Board Members & KMPs
3. Taking care of the succession planning of Board members.
4. Preparation of matters pertaining appointment of the Managing Director / Whole Time Directors / KMP and the other executives as well as the identification of their possible successors.
5. Preparation of matters pertaining to the remuneration and other financial benefits of the Managing Director / Wholetime Directors / KMPs and other executives.
6. Evaluation of the remuneration of the Managing Director / Wholetime Director / KMPs and the other executives or Key Managerial Persons.
7. Answering questions related t the remuneration statement at the General Meeting.
DIRECTORS SITTING FEES
The Company has paid sitting fees for attending Board, Audit Committee, Remuneration Committee, Investor Grievance Committee, Compensation Committee, Corporate Social Responsibility Committee and Risk Management Committee Meetings Rs. 50,000, Rs. 20,000, Rs. 10,000, Rs. 10,000, Rs. 10,000, Rs. 10,000 and Rs. 10,000 per meeting respectively to all the Non-Executive Directors as mentioned below.
iV. investment committee
Mr. Rakesh Gothi, Managing Director and Mr. P. N. Thakore, Director-Finance are members of the Committee and Mrs. Ujjwala Apte, Company Secretary, is Secretary of the Committee
Vi. corporate Social Responsbility committee (cSR)
The Committee has been constituted to administer CSR activities as per The Companies Act, 2013.
The CSR Committee comprises of One Independent & Non-Executive Director and Three Executive namely Mr. Rakesh Gothi (Chairman) Mr. B. R. Gupta, Mr. P. N. Thakore and Mr. N. K. Shah as members.
The Committee has been constituted to assess the risks and its minimisation as per The Companies Act, 2013.
The Risk Management Committee comprises of Two Independent & NonExecutive Director and Two Executive namely Mr. Rakesh Gothi, Mr. B.R. Gupta, Mr. Sunil Diwakar and Mr. N.K. Shah.
Prevention of insider trading
The Company ensures that the Code of Conduct for prevention of Insider Trading adopted in terms of Regulation 12(1) of the SEBI [Prohibition of Insider Trading] Regulations are strictly adhered to.
CODE OF BUSINESS CONDUCT AND ETHICS FOR BOARD OF DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
The Company has formulated and implemented a Code of Conduct (the 'Code') for the Board of Directors, Senior Management and Employees of the Company. Annual affirmation of compliance with the Code has been made by the Board of Directors, Senior Management and employees of the Company. The Code has also been posted on the Company's website, www.jbfindia.com The necessary declaration by the Chief Executive Officer of the Company regarding compliance of the above mentioned Code by Directors, Senior Management and the employees forms part of the Corporate Governance Report.
The code of conduct was modified from time to time as and when required as per the guidelines.
Whistle Blower Policy
The Company has laid down a Whistle Blower Policy (refer www.jbfindia.com) providing a platform to all the Directors/Employees to report about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy.
The mechanism provides for adequate safeguards against victimization of employees to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases.
A Management Discussion and Analysis Report containing discussion on the matters specified in clause 49 VIII (D) forms part of the Annual Report.
Disclosures on Materially Significant Related Party Transactions
The details of all transactions with related parties are placed before the Audit Committee periodically, with justification wherever required.
No material transaction has been entered into by the Company with related parties that may have a potential conflict with interest of the Company. The details of related party transactions have been given in the Notes to the Accounts forming part of the Balance Sheet. Policy for Materially Significant
Related Party Transactions is formulated and the same is available on the web site of the Company.
Disclosure of Accounting Treatment
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP),including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013 as adopted consistently by the Company.
Details of Non compliance by the company
There has been no instance of non compliance by the Company on any matter related to capital market during the last 3 years and hence no penalties or strictures have been imposed on the Company by Stock Exchanges or SEBI or any other statutory authority.
The Company has one material non-listed Indian subsidiary company. Mr. B.R.Gupta, the Company's independent director has been appointed as independent director on the Board of JBF Petrochemicals Limited, subsidiary of the Company.
The Minutes of the Board Meetings of unlisted wholly owned subsidiary JBF Global Pte Ltd., with its subsidiaries JBF Petrochemicals Ltd., and JBF RAK LLC have been placed before the Board from time to time.
The Minutes of step down subsidiary companies namely JBF Bahrain S.P.C, JBF Global Europe BVBA and JBF Glicols Industria Quimica Ltda will be placed before the Board as and when the minutes will be received by the Company.
Financial statements, alongwith statement containing all significant transactions and arrangements entered into by them were reviewed and noted quarterly by the Audit Committee of the Company.
Audited Annual Financial Accounts of these Companies for the year ending 31st March, 2015, were placed before the Board of Directors of the Company.
The Company has formulated a policy for determining 'material' subsidiaries.
In compliance to the circular received from Stock Exchange mandating all listed companies to for Secretarial Audit for purposes of reconciliation of the total admitted capital with both the depositories and the total issued and listed capital. The Company has confirmed that there exist no discrepancies with regard to its admitted capital. A certified report to this effect issued by practising Company Secretary Mr. Jagdish Patel (CP No.1782) partner of M/s. Jagdish Patel & Co. has been submitted at close of each quarter to the Stock Exchanges.
A Secretarial Audit for the FY 2014-15 was carried out and the report is incorporated within the Directors' Report forming part of Annual Report.
Means of communication
In compliance of Clause 41 of the Listing Agreement, half yearly and quarterly financial results of the Company were, published in Economic Times at the place of the Corporate Office of the Company and also in The Economic Times, a local vernacular news edition, at the place of Registered Office of the Company. Half-yearly results in addition to being published in newspapers were available to the shareholders on their request.
Results and Official News of the Company are displayed on the Company's Website: www.jbfindia.com
The Ministry of Corporate Affairs (MCA) has through Circular No.17/2011 pronounced a Green Initiative in Corporate Governance that allows Companies to send notices / documents to shareholders electronically. Accordingly the Company has sent notice and annual report by way of electronic mode to the shareholders whose email address was registered with the Company.
The Annual Report is posted individually to all members, whose email address is not registered with the Company.
The shareholders who have not registered email address with the company, are requested to register the email address with company.
The presentations to the institutional investors and to the analysts are made as and when required.
The Management Discussion and Analysis Report is incorporated within the Directors' Report forming a part of the Annual Report.
General information for Shareholders Annual General Meeting
Day, Date & Time Friday, 25th September, 2015 at 11.30.am
Venue : Daman Ganga Valley Resort, Silvassa.
Financial Calendar [Tentative]
Results for the quarter ended June, 2014. End 2nd week of August ' 15
Results for the quarter ended September, 2014 End 2nd week of November '15
Results for the quarter ended December, 2014. End 2nd week of February' 16
Results for the quarter ended March, 2015 End May' 16
Annual General Meeting End September' 16
The Register of Members will be kept closed from 1st September, 2015 to 4th September, 2015. [Both days inclusive] for the purposes of payment of dividend
The dividend will be paid to the shareholders, whose names appear in the Register of Members on 4th September, 2015.
Dividend, if declared at the Annual General Meeting, will be paid on or after the date of Annual General Meeting through NECS mode, who have selected NECS mode and by way of dividend warrants to other shareholders.
Companies Act, 2013, dividends that are unclaimed for a period of seven years, statutorily get transferred to the Investor Education and Protection Fund (IEPF) administered by the Central Government, and thereafter cannot be claimed by the investors. To ensure maximum disbursement of unclaimed dividend, the Company sends remainders to the concerned investors, before transfer of dividend to IEPF
Unclaimed Dividend of Rs. 807327.50 for the financial year 2006-2007 has been transfered to Investor Education Protection Fund on 28th October, 2014.
Listing of Equity Shares
The shares of the Company are listed on The Bombay Stock Exchange Ltd, National Stock Exchange of India Ltd.
The shares of the Company are delisted from The Calcutta Stock Exchange Limited w.e.f 31st March, 2015.
The Annual Listing fees for the year 2015-16 has been paid to The Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd.
Registrar & Transfer Agents
Link Intime India Pvt. Ltd., C-13, Pannalal Silk Mills Compound, LBS Road, Bhandup [West], Mumbai - 400 078. Tel. No. - 022-25 94 69 70. E-mail id: email@example.com
Shares received for transfer are registered within a period of 15 days from the date of receipt of all documents which are clear and complete in all respects.
DEMAT ISIN Number in NSDL & cDSL : INE187A01017
Share Code on BSE : 514034
Share Code on NSE : JBFIND
JBF Share Price at NSE
Plant Location Survey No. 273, Saily-Rakholi Road Plot No. 11 and 215 to 231 Village Athola, Dadra Nagar Haveli Sarigam GIDC Indl. Area Dadra Nagar Haveli Silvassa Tal:Umbergaon, Silvassa. Sarigam,Vapi, Gujarat.
Address for corporate Office : correspondence 8th Floor Express Towers, Nariman Point, Mumbai - 400 021. Tel Nos : 22 88 59 59 Fax No : 22 88 63 93
E-mail Address for investor Grievance & correspondence:
Website : www.jbfindia.com
compliance with mandatory requirements
The Company has fully complied with the applicable mandatory requirements of Clause 49.
complaince with non-mandatory requirements
1. The Board
The Company has an Executive Chairman whose office is maintained by the Company at its expenses. The travelling and other expenses of the Chairman for office purposes are paid / reimbursed by the Company.
2. Shareholder Rights
The quarterly and half yearly financial performance are published in the newspapers and are also posted on the website (www.jbfindia.com of the Company and hence, it is not being sent to the shareholders.
3. Audit qualifications
The Company's financial statement for the year 2015 does not contain any audit qualification.
4. Separate posts of chairman and cEO
The Company has an Executive Chairman whose position is separate from that of the Managing Director & CEO of the Company.
5. Reporting of internal Auditor
The Internal Auditor presents his report to the Audit Committee on quarterly basis.
4. We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee those deficiencies, of which we are aware, in the design or operation of the internal control systems and that we have taken the required steps to rectify these deficiencies;
5. We further certify that :-
i There have been no significant changes in the internal control over financial reporting during this year.
ii There have been no significant changes in accounting policies made that require disclosure in the notes to the financial statements as on 31st March, 2015.
iii. There have been no instances of significant fraud and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control system over financial reporting, has came to our notice.
For and on behalf of the Board of Directors
P N. THAKORE
CFO & Director Finance
DIN : 00229024
CEO & Managing Director
DIN : 00229302
Place : Mumbai
Date : 27th May, 2015