REPORT ON CORPORATE GOVERNANCE
COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
Your Company is committed \o the adoption of best governance practices and adherence to it, in letter and spirit. Our philosophy of governance rests on five basic tenets, viz., Board accountability to shareholders and other stakeholders, strategic guidance and effective monitoring by the Board, protection of minority interests and rights, equitable treatment of all shareholders as well as transparency accountability and timely disclosure.
TANFAC Industries Limited, a Joint Venture of the Aditya Birla Group with Tamil Nadu Industrial Development Corporation Limited (TIDCO), believes in adopting the "best practices" that are followed in the area of corporate governance across various geographies and is committed to protecting and facilitating the exercise of shareholders' rights, encouraging cooperation between the Company and the stakeholders, competing more effectively, and building long-term value for its shareholders. Your Company shall ensure timely and accurate, disclosure on all material matters, including the financial situation, performance, ownership and governance, to its stakeholders.
Your Company's compliance with requirements is presented in the subsequent sections of this Report.
I. BOARD OF DIRECTORS
The Board of Directors is entrusted with the ultimate responsibility of the management, general affairs, direction and performance of the Company and has been vested with the requisite powers, authorities and duties.
Composition of the Board
TANFAC's Board consists of Nine Non-Executive Directors as on 31st March, 2015, -who have varied experience in their respective areas. The Board has six Independent Directors, including a woman Director, viz., Smt. R. Rajalakshmi, who do not have business relationship with the Company. This is in conformity with the provisions of Clause 49 of the listing agreement with regard to composition of the Board. Smt. R. Rajalakshmi, has been appointed by the Board as an Independent Director with effect from 24th March, 2015.
The Company has defined guidelines and an established framework for the meetings of the Board and Board Committees.
Definition of Independent Directors
Pursuant to provisions of sub-section 6 of Section 149 of The Companies Act, 2013 and under clause 49 of the equity listing agreement with the stock exchanges, an Independent Director is a person who is not an officer or employee of the company or its subsidiaries. It also states that none of his/her relatives has or had material, pecuniary relationship or transaction with the Company, which in the opinion of the Board, would interfere in exercising independent judgment and carrying out the responsibilities of a director. The Company has six Non-Executive Independent Directors on the Board and has received a declaration from them confirming that they met the criteria of independence as provided in sub-section (6) of Section 149 of The Companies Act, 2013.
The Company has complied with the provision of listing agreement with regard to convening of Board Meeting by allowing not more than four months time gap between two such meetings. During the financial year 2014-2015, six meetings of the Board of Directors were held, viz., 29th May, 2014, 13th August, 2014, 6th November, 2014, 23rd January, 2015, 3rd February, 201 5 and 24th March, 2015, with adequate quorum of Directors, to consider and approve inter alia, the statement of standalone unaudited quarterly financial results, audited financial results, approval of annual budget, issue of redeemable cumulative non-convertible preference shares etc. Shri A.K. Agarwala, Non Executive Director, representing Promoter, held 1,150 Equity Shares as on 31st March, 2015. No other Directors are holding any Equity Shares in the Company.
The Company has an Audit Committee with six Non-Executive Directors, including four Independent Directors as per the terms of reference contained in the clause 49(III)(A) of the listing agreement with the stock exchange.
The Members of Audit Committee chart, monitor and provide effective supervision of the Management's handling of finances, stocks, loans and advances and the financial reporting process, with a view to ensuring effective and efficient financial control. The committee reports to the Board. The role of the Audit Committee will be in accordance with the provision contained under clause 49(III)(D) of the Listing Agreement.
The Audit Committee met four times during the financial year 2014-2015, viz., 29th May, 2014, 13th August, 2014, 6th November, 2014 and 23rd January, 2015, with adequate quorum of members, including two independent members present. All the members of the Committee are financially literate, with relevant experience. Shri M.R. Sivaraman, IAS (Retd.), Chairman of the Audit Committee, has expertise in accounting and financial management. The Company Secretary / Compliance Officer acts as Secretary to the Committee.
The Board of Directors has been paid sitting fee for attending the Board Meeting and Board Committee Meetings, viz. Audit Committee and Stakeholders Relationship Committee. No other remuneration is being paid to its Non-Executive Directors.
Shri Laiit Naik, Manager and Director, has not drawn any remuneration, including sitting fees during the year.
The Company has adopted a remuneration policy for its Senior Management and its other employees in line with the Group HR Policy.
RISK MANAGEMENT COMMITTEE
Pursuant to Clause 49(VI) of the revised listing agreement which was made effective from 1st October, 2014, the Company had constituted a Risk Management Committee comprising of the following Directors - Shri Lalit Naik, Shri V.T. Moorthy and Shri M.R. Sivaraman, IAS (Retd.). Shri Lalit Naik will act as Chairman of the Committee.
The role of the Risk Management Committee -
? To assess the risk and minimise the procedures
? To review the Company's policy on financial and risk management
? To frame, implement and monitor the risk management plan.
NOMINATION AND REMUNERATION COMMITTEE
Pursuant to Section 178(1) of The Companies Act, 2013 read with the provision as contained under clause 49 of the listing agreement with the stock exchange, the Company has constituted Nomination and Remuneration Committee consisting of three non-executive directors, including two independent directors, viz., Shri Lalit Naik, Shri V.T. Moorthy and Shri M.R. Sivaraman, IAS (Retd.). Shri V.T. Moorthy, act as Chairman of the Committee.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Share Transfer Committee has Stakeholders' Relationship Committee, empowered to perform all the functions of the Board in relation to the handling of investors' grievances.
Pursuant to Section 1 78(5) of The Companies Act, 2013, a Company which consists of more than one thousand shareholders at any time during the financial year shall constitute a Stakeholders Relationship Committee consisting of a Chairperson who shall be a non-executive director and such other members as may be decided by the Board. As the Company already has an Investors Relation Committee, the same has been re-christened as Stakeholders Relationship Committee in line with the compliance requirement.
The primary focus of Stakeholders Relationship Committee -
? to resolve the grievances of shareholders with regard to transfer of shares, non-receipt of annual report, non-receipt of declared dividend, etc;
? to ensure expeditious share transfer process through the Registrar and share Transfer Agent
? evaluate performance and service standards of the Registrar and Share Transfer Agent of the Company.
The Composition of the committee is as follows:
1. Shri V.T. Moorthy
2. Shri Lalit Naik
3. Shri R. Karthikeyan
4. Shri M.R. Sivaraman, IAS (Retd.)
Disclosure on materially significant related party transaction 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 the interest of the Company
Details of non-compliance by the Company, penalties, strictures imposed by stock exchanges / SEBI or any statutory authority, on any matter related to capital markets, during the last three years.
Whistle Blower Policy and affirmation that no personnel has been denied access to the Audit Committee.
The Company has a Group's Whistle Blower Policy to articulate the Group's point of view on whistle blowing, and the objective is to strengthen the whistle blowing mechanism.
The objectives of the policy are -
• To provide a platform and mechanism for the employees and Directors to voice genuine concerns or grievances about unprofessional conduct without fear of reprisal
• To provide an environment that promotes responsible and protected whistle blowing. It reminds employees and directors about their duty to report any suspected violation of any law that applies to the Group and any suspected violation of the Group Values or Aditya Birla Group's Code of Conduct.
Whistle Blower Policy is made available on the Company's website, www.tanfac.com As per whistle blower mechanism of the Company, it is hereby confirmed that no personnel has been denied access to the Audit Committee.
Details of compliance with mandatory requirements and adoption of the non-mandatory requirements as per Clause 49 of the listing agreement.
The Company has complied with all the mandatory requirements as per clause 49 of the listing agreement.
The Company has also adopted the following non-mandatory requirements :
(a) Auditor's Report does not contain any qualifications.
(b) The Internal Auditors report directly to the Audit Committee.
? Details of related party transactions
A comprehensive list of related party transactions as required by the Accounting "Standards (AS) 18 issued by the Institute of Chartered Accountants of India, forms part of Note No. 27.8 (B) of the Annual Audited Accounts.
? Pecuniary relationship or transactions of the Non-Executive Directors
There is no material pecuniary transaction with any Non-Executive as well as Independent Directors of the Company that requires a separate disclosure.
? Details of the use of proceeds from public issues, rights issues, preferential issues, etc.
The Company has issued and allotted 5,00,000 - 11% Redeemable Cumulative Non Convertible Preference Shares of face value of Rs.100/- each for cash AT PAR on a private placement basis to Aditya Birla Chemicals (India) Limited on 24th March, 2015 to shore up the net worth of the Company, for general corporate purpose, and to meet the on-going business requirements of the Company,
? Details of information on appointment of new directors:
A brief resume, nature of expertise in specific functional areas, names of companies in which the person already holds directorship and membership of committees of Board of Directors forms part of the Notice to the Annual General Meeting, annexed to this Annual Report.
? Details of non-compliance, penalties and strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets, during the last three years.
- None -
GENERAL SHAREHOLDER INFORMATION:
A.G.M., Date, Time and Venue
29th September, 2015 (Tuesday) at 11.00 A.M. at the Registered Office of the Company at -14 SIPCOT Industrial Complex CUDDALORE - 607 005, TAMIL NADU
Financial Year : 1st April to 31st March
Date of Book Closure : 24th September 2015 (Thursday) to 29th September 2015 (Tuesday)
FINANCIAL CALENDAR 2015-2016 : (TENTATIVE)
First Quarter Results : End - On or before 14th August, 2015
Second Quarter Results : End - On or before 14th November 201 5
Third Quarter Results : End - On or before 14,h February, 2016
Results for the year ending March 2015 : End - On or before 30th May 2016
Annual General Meeting for the year ending 31st March 201 5. : Before September, 2016
Dividend Payment Date
Not Applicable. Payment of dividend has not been recommended by the Board as the Company suffered loss during the financial year 2014-2015.
Listing on Stock Exchange : EQUITY SHARES
BSE Limited Phiroze Jeejeebhoy Towers Dalai Street, MUMBAI - 400 023.
Stock Code : 506854
The Company has paid Annual Listing Fee for the year 2015-2016 to BSE.
Annual Custodial/Issuer fee to NSDL and CDSL for the year 2015-2016 will be made on receipt of their invoices
Madras Stock Exchange Limited (MSE), where the Company's Equity Shares have been listed since the Public Issue, had withdrawn the permission granted for dealing of the Company's Equity Shares vide their letter MSE/LD/PSK/731/379/14 dated 29th December, 2014 and removed them from the list of listed securities of the exchange with effect from 29th December, 2014, in terms of SEBI (Delisting of Equity Shares) Regulations, 2009 for voluntary delisting. MSE, unable to meet the threshold limit of annual trading turnover stipulated by SEBI before the timeframe, decided to. seek voluntary surrender of recognition and exit as a Stock Exchange to SEBI. Hence the Company has voluntarily delisted its Equity Shares from the MSE.
Registrar and Transfer Agents (For share transfers and other communications relating to share certificates, and change of address etc.)
PHYSICAL Investors Services Department
INTEGRATED ENTERPRISES LTD "KENCES TOWERS" IInd FLOOR
DEMAT NO. 1 RAMAKRISHNA STREET OFF. NORTH USMAN ROAD, T.NAGAR CHENNAI - 600 017. TEL: (044)28140801 TO 3 , FAX: (044) 28142479/28143378 Email Id: firstname.lastname@example.org
Share Transfer System
Share Transfers in physical form are registered and returned within 15 days. An officer of the Company is authorised by the Board to approve transfer of shares and the Share Transfer Committee of the Board meets at regular intervals to ratify such transfers.
During the year, the company obtained from a Company Secretary in Practice half-yearly certificates for compliance with the share transfer formalities as required under Clause 47(c) of the listing agreement and filed the same with the listed stock exchanges
DEMATERIALISATION OF SHARES AND LIQUIDITY
As on 31st March, 2015, 92,54,902 shares, against subscribed fully paid equity shares of 99,75,000, were converted from the physical to electronic form. Over 92.78% of the outstanding equity shares have been dematerialised up to 31st March, 2015.
In view of the advantages offered by the Depository System, members who have not yet dematerialised their shares are requested to avail of the facility of dematerialisation of the equity shares. They have the choice to open an account with Depository Participants of either of the Depositories by quoting the Company's ISIN No.INE639B01015.
14 SIPCOT INDUSTRIAL COMPLEX, CUDDALORE - 607 002, TAMILNADU
Address for correspondence
Address for Shareholders' correspondence
INTEGRATED ENTERPRISES (INDIA) LTD "KENCES TOWERS", IIND FLOOR N0.1 RAMAKRISHNA STREET OFF. NORTH USMAN ROAD, T.NAGAR CHENNAI - 600 017. TEL: (044)28140801 TO 3 FAX: (044) 28142479/28143378 Email Id: email@example.com
Shareholders holding shares in electronic mode should address all their correspon-dence to their respective Depository Participant. Investors' Grievance with respect to non receipt of dividend may please be addressed to our Secretarial Department at our Registered Office at 14, SIPCOT Industrial Complex, Cuddalore - 607 005, Tamilnadu, OR mail to - firstname.lastname@example.org
SEBI (Prohibition of Insider Trading) Regulations, 2015 :
The Board of Directors of the Company has adopted formulation of "Code of Conduct" and Code of Practices and Procedure as required under The SEBI (Prohibition of Insider Trading) Regulations, 2015, vide its Extraordinary Notification dated 15th January, 2015, effective from 15th May, 2015. The details are made available in the Company's website, viz., www.tanfac.com
CODE OF CONDUCT
The Company has laid down the Code of Conduct (the "code") after incorporating the duties of the Independent Directors as required under The Companies Act, 2013 and as per clause 49 of the listing agreement. The Code of Conduct applies to all employees and Directors of the Company to ensure integrity, transparency, independence and accountability in dealing with all stakeholders.
The Board and the senior management affirm compliance with the code of business conduct and ethics annually. The details of code of conduct have been posted on the Company's website www.tanfac.com
A Certificate to this effect has been given by our Manager and Director, affirming compliance of the said Code by all the Board Members and Members of the senior management to whom the Code is applicable, is annexed elsewhere in the Annual Report.
Securities and Exchange'Board of India (SEBI) Complaints Redress System (SCORES) has formed a website www.scores.gov.in to take up investors complaints related issue, viz, transfer of securities, non payment dividend etc. with the listed companies. SCORES is processed in a centralized web based complaints redress system in which the action taken reports of the concerned companies are uploaded on this website for online viewing by investors. The website lists the complaints, action taken and the current status ot the complaint.
During the year, no complaint was registered against your Company on this website.
BSE CORPORATE COMPLIANCE & LISTING CENTRE ('the listing Centre') :
BSE Limited listing centre is a web-based application designed for corporates. All periodical/quarterly compliance filing, viz. Shareholding pattern, report on corporate governance, and other such reports are filed efectronically on the listing centre.
International securities identification number (ISIN) is a unique identification number of traded scrip: This number has to be quoted in each transaction relating to the dematerialized equity shares of the Company. The ISIN of the equity shares of the Company is INE639B01015.
CORPORATE IDENTIFICATION NUMBER (CIN):
Your Company's Corporate Identification number registered with Registrar of Company is L24117TN1972PLC006271
The Manager and Director and the Chief Financial Officer of the Company duly authorised by the Board have given their annual certification on financial reporting and internal controls to the Board as required under clause 49 of the listing agreement which is available in this report.
INTIMATION TO BIFR
The net worth of the Company for the financial year 2013-2014 had eroded by more than 50% of its peak net worth during the immediately preceding four financial years. As required under the provisions of Section 23(1)(a)(i) of The Sick Industrial Companies (Special Provisions) Act, .19^5, the Company has made necessary intimation to The Board for Industrial and Financial Reconstruction (BIFR) and filed Form C prescribed for this purpose after the adoption of accounts by the Members at their Annual General Meeting.
The Members present at their Extraordinary General Meeting held on 13th August, 2014, have passed the required resolution.
NON-MANDATORY REQUIREMENTS: THE BOARD:
Your Company is a Joint Sector undertaking with Tamilnadu Industrial Development Corporation Limited (TIDCO), a Government of Tamilnadu undertaking. The Chairman of the Company is nominated by TIDCO as per Joint Venture Agreement and performs his duty at their office. Hence no separate Chairman's office is maintained at your Company
The Company's quarterly and half yearly results are published in the English and vernacular newspapers and the results are also on the uploaded on the Company's website www.tanfac.com As per the requirements of listing agreement with BSE Limited, the Company has uploaded the Unaudited/Audited Financial Results and also Shareholding Pattern etc. to its designated website.
Therefore, no individual communications with respect to quarterly/half yearly financial performance are sent to the Shareholders. However, based on request from the Shareholders, if any, the Company would provide the same to them individually
There are no qualifications in the Auditors' Report of the accounts for the financial year 2014-2015.
SEPARATE POSTS OF CHAIRMAN AND CEO
The Company does not have the post of Chairman and Managing Director/CEO.
REPORTING OF INTERNAL AUDITOR
The Internal Auditor of the Company directly reports to the Audit Committee on functional matters.
TRAINING OF BOARD MEMBERS
The Board of Directors of the Company have extensive experience in their fields and contribute substantially in the decision-making process. The Board seeks to impart training to its Directors, if necessary, to ensure that Board members are kept up to date.