CORPORATE GOVERNANCE REPORT FOR THE YEAR 2015-16
(As required under Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations)
1. A brief statement on Company's philosophy on Code of Governance
The Company has set it self the objective of achieving technological leadership in its area of business. As a part of its growth strategy, the Company is adopting the 'best practices' that are followed in the area of Corporate Governance across various geographies and emphasizes the need for full transparency and accountability in all its transactions in order to protect the interests of its stakeholders. The Board considers itself as a Trustee of its Shareholders and acknowledges its responsibilities towards them for creation and safeguarding their wealth.
2. Board of Directors
The Company has a non-executive Chairman and the number of Independent Directors (6) is more than 60% of the total number of directors (9asat31.03.15 and 8 as on date of this report). The Company also has a women director on its Board. The number of non-executive Directors (7) is more than that required under Regulation 17. [Regulation 17 mandates that not less than fifty per cent of the board of directors shall comprise of non-executive director]. The independent directors meet the criteria of independence as required under the Companies Act, 2013 and Regulation 16(1) (b) of Listing Regulations.
No Independent Director of the Company serves as a whole-time director of a listed Company. No Independent Director is a director in more than seven listed companies and as director of more than 10 public companies.
No director is a member in more than 10 committees of public companies nor acts as a chairperson of more than 5 committees across all listed entities in terms of Regulation 26(1)of Listing Regulations.
The shareholders at its General Meeting held time to time have approved appointment of Independent Directors for fixed tenure not exceeding as prescribed under the Companies Act, 2013. The Company issued letter of appointment to all its Independent Directors as per Schedule IV to the Companies Act, 2013 and the terms and conditions of such appointment have been disclosed on the website of the Company at <http://www.trf.co.in>
The Board met nine times during the financial year 2015-16 and the gap between any two meetings did not exceed 120 days. The dates on which the Board meetings were held are as follows:
(i) April 21,2015 (ii) May 29, 2015 (iii) July 18, 2015 (iv) August 14, 2015 (v) August 27, 2015 part adjourned and held on August 31,2015 (vi) September 26, 2015 (vii) October 28, 2015 (viii) January 28, 2016 and (ix) March 09,2016.
As per declarations received by the Company none of the directors are related to each other in terms of the definition of "relative" as persecution 2(77) of the Companies Act, 2013 read with Rule4of the Companies (Specification of Definition Details) Rules, 2014.
Mr. Ranaveer Sinha (Independent, Non-Executive Director) holds 10 (ten) Equity Shares of the Company jointly with his spouse as on March 31,2016. Apart from Mr. Ranaveer Sinha no other director holds any share of the Company.
Details of familiarization programmes imparted to independent directors are disclosed at Company's web site at: www.trf.co.in
At each meeting the Board reviews status of compliance of all laws applicable to the Company. Information as required in terms of Part A of Schedule II read with Regulation 17(7) of Listing Regulations was furnished at the Board meeting(s).
Code of Conduct:
The Tata Code of Conduct, as adopted by the Company, is applicable to the Executive Director and SeniorManagement Personnel and other Executives of the Company. The said code is posted on the website of the Company. The Company has received confirmation from the Managing Director as well as Senior Management Personnel regarding compliance of the code during the year under review.
The Board at its meeting held on December 26,2005, has adopted 'Code of Conduct for Non-Executive Directors'of the Company. The Board at its meeting held on February 10,2015 adopted a revised code which prescribed inter-alia duties of Independent Directors, acting in the interest of the Company, to avoid conflict of interest, compliance to all applicable laws in their individual capacity& safeguard of confidentiality of information. The Company has also received confirmations from the Non-Executive Directors regarding compliance of the code during the year under review.
Separate Meeting of Independent Directors:
During the year, separate meeting of the Independent Directors was held on March 9,2016, without the attendance of non-independent directors and members of the management. All Independent Directors attended the said meeting.
3. Audit Committee
The Audit Committee of the Board has been functioning since 1997. The Board at its meeting held on April 18, 2014 stated that terms of reference, power and role of Audit Committee shall be as specified in the Companies Act, 2013 and the listing regulations (erstwhile listing agreement with stock exchanges),as amended from time to time. The broad terms of reference of the Audit Committee are as stated in Part C of Schedule II read with Regulation 18(3) of Listing Regulations.
The Committee met seven times during the financial year 2015-16and the gap between any two meetings did not exceed 120 days. The dates on which the said meetings were held are as follows :
(i) May 29,2015 (ii) July 17,2015 which was part adjourned and held on July 18, 2015 (iii) August 14, 2015 (iv) August 27, 2015which was partadjourned and held on August 31,2015(v) October27, 2015 (vi)January 28,2016and (vii) March 9, 2016.
Except Mr. Alok R. Kanagat all members of the Audit Committee are independent directors. All members are financially literate and of the total strength two members are Chartered Accountant. The Audit Committee meetings were attended by the CFO /Dy. Chief/Chief, Finance & Accounts and Chief Internal Auditor. Other senior executives of the Company attended the meetings as invitee. Representatives of PwC the external internal auditors attended the meeting to give presentation on Internal Audit report and on matters where their presence was required. Representatives of Deloitte Haskins and Sells, Statutory Auditors attended all meetings held for consideration of accounts/ results and on matters where their presence was required. Company Secretary acts as the Secretary to the Committee. Chairman of the Audit Committee attended the Annual General Meeting held on September 26, 2015 to answer shareholders queries.
Cost Auditors' Details
M/s Shome & Banerjee, Cost Accountants of 5A, Nurulla Doctor Lane, 2nd Floor, Kolkata 700 017 were appointed as Cost Auditors of the Company for the financial year 2015-16.
4. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board has been in operation since 1995. The Board at its meeting held on April 18, 2014 stated that terms of reference, power and role of Nomination and Remuneration Committee shall be as specified in the Companies Act, 2013 and the listing regulations (erstwhile listing agreement with stock exchanges), as amended from time to time. The broad terms of reference of the Nomination and Remuneration Committee are to:
• Recommend to the Board the setup and composition of the Board and its committees. This shall include "Formulation of the criteria for determining qualifications, positive attributes and independence of adirect or". The committee will consider periodically reviewing the composition of the Board with the objective of achieving an optimum balance of size, skills, independence, knowledge, age, gender and experience.
• Recommend to the Board the appointment or reappointment of directors.
• Devise a policy on Board diversity.
• Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with criteria laid, and recommend the Board of Directors their appointment and removal.
• Whether to extend or continue the term of appointment of the independent director on the basis of report of performance evaluation of independent directors.
• Recommend to the Board appointment of Key Managerial Personnel ("KMP "as defined by the Act) and executive team members of the company (as defined by this committee).
• Support the Board and Independent Directors in evaluation of the performance of the Board, its committees and individual directors. This shall include "Formulation of criteria for evaluation of Independent Directors and the Board." Additionally, the committee may also oversee the performance review process of the KMP and the executive team of the company.
• Recommend to the Board the remuneration policy for directors, executive team/ KMP as well as the rest of the employees.
• On an annual basis, recommend to the Board the remuneration payable to senior executive team/ KMP of the company.
• Oversee familiarization programmers for directors.
• Oversee the HR philosophy, HR and People strategy and HR practices including those for leadership development, rewards and recognition, talent management and succession planning (specifically for Board, KMP and executive team).
• Reviewthe performance of the Managing/Whole-time Directors, to recommend to the Board the salary (including annual increments), perquisites and commission/performance linked remuneration to be paid to the Managing/Whole-time Directors of the Company and also recommend retiral benefits to be paid to the Managing/Whole-time Directors under the Tata Group Retirement Benefits Guidelines adopted by the Board.
The Nomination and Remuneration Committee also considers the annual commission payable to the Non-Executive Directors. The distribution of commission amongst Non-Executive Directors is placed before the Board. The Commission is calculated on the basis of their attendance and contribution to the Board and its Committees meetings.
5. Remuneration of Directors
The Non-Executive Directors are paid remuneration byway of sitting fees and commission. The commission is paid at the rate not exceeding 1% of net profits computed in accordance with Section 197 of the Companies Act, 2013.
The Company pays remuneration by way of salary, perquisites and allowances (fixed component) and Commission/ Performance Linked Remuneration (variable component) payable to the Managing/Whole-time Director(s) as determined by the Board at the end of the financial year based on the recommendations of the Remuneration Committee.
Criteria for Performance evaluation :
The Board has as recommended by the Nomination and Remuneration Committee adopted Board Governance Guidelines. The governance guidelines inter-alia prescribed the criteria for performance evaluation of independent directors. The evaluation process lays down detailed questionnaire and criteria. The criteria inter-alia includes attendance, contribution at meetings, guidance/support to management outside meetings.
Stakeholders Relationship Committee
The terms of reference of the Stakeholders Relationship Committee is to review and monitor the system of redressal of Investors 'grievances including complaints related to transfer of shares, issue of duplicate share certificates, transmission of shares, non-receipt of annual reports and non-receipt of declared dividend, etc.
The Company has adopted a Policy for determining material subsidiaries. Adithya Automotive Applications Private Limited and York Transport Equipment (India) Pvt. Ltd. (York, India) are'Material non-listed Indian Subsidiary' As per the provisions of Regulation 16(c) of Listing Regulations, Mr R. V. Raghavan and Mr. Ranaveer Sinha, Independent Directors have been appointed director on the Board of Adithya Automotive Applications Private Limited and York Transport Equipment (India) Pvt. Ltd. (York, India), respectively.
The minutes of the subsidiary companies are placed before the Board of Directors of the Company and the attention of the Directors is drawn to all significant transactions and arrangements entered into by the subsidiary companies.
i) There are no material significant related party transactions which have potential conflict with the interest of the Company at large. The related party transactions are given in the notes to the Balance Sheet and Statement of Profit & Loss.
ii) There has been delay in submission of results for Q4 of FY' 14-15 and Q1 of FY'15-16and as per SEBI circular no CIR/MRI/DSA/31/2013 dated 30th September, 2013, company had paid penalties to the stock exchanges during the FY'15-16. Apart from the aforesaid non-compliance there has been no instance of non-compliance by the Company to the listing agreement/regulations. Further apart from the aforementioned delay in submission of quarterly results for which the company has paid penalties no strictures were imposed by stock exchange, SEBI or any other regulatory authority on any matter relating to capital market during the last three years.
iii) Whistle Blower Policy /Vigil Mechanism :
The Board of Directors at their meeting held on December 26, 2005, approved the Whistle Blower Policy that provides a formal mechanism for all employees of the Company to approach the Ethics Counselor/Chairman of the Audit Committee of the Company and make a protected disclosure about unethical behavior, actual or any suspected fraud or violation of the Company's Code of Conduct .The Board at its meeting held on August 2,2014 adopted revised Whistle Blower Policy in terms of Section 177(9) of the Companies Act, 2013 read with Clause 49of the Listing Agreement. The revised policy provides frame work for directors and employees to report concerns of unethical behavior, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy and provides mechanism for directors and employees of the Company to approach the Ethics Counselor /
Chairman of the Audit Committee of the Company. The Whistle Blower Policy is an extension of the Tata Code Of Conduct ,which requires every employee to promptly report to the management any actual or possible violation of the Code or an event he becomes aware of, that could affect the business or reputation of the Company.
iv) The Company has fulfilled the following non-mandatory requirements as prescribed in Part E of Schedule II of the Listing regulations with the Stock Exchanges:
a) The Company has appointed separate persons to the post of Chairman and Managing Director.
v) The Company has adopted a policy for determining "Material Subsidiaries". The said policy is available on the company's website at www.trf.co.in
vi) The Company has adopted a Policy for Related Party Transactions. The said policy is available on the company's website atwww.trf.co.in
vii) The Board at its meeting held on December26,2005, has adopted the Risk Management framework and the same is being periodically reviewed.
viii) Register of Contracts is placed at each meeting of the Board of Directors as per the requirements of the Companies Act, 2013.
ix) Management Discussion and Analysis Report forms a part of the Director's Report.
x) The Company has not raised any proceeds from public issue, rights issue, preferential issue, etc. during the year.
10. Means of communication
The quarterly and annual results along with the segmental report are generally published in Financial Express (in English) & Hindustan, Prabhat Khabar, Dainik Bhaskar, DaninikJagran, Uditvani, (in Hindi) and also displayed on the Company's website at www.trf.co.in shortly after its submission to the Stock Exchanges.
Any significant event is first informed to the Stock Exchanges and then posted on the Company's website.
11. General Shareholder Information
AGM: Date, time and venue : July30,2016at12:00Noon,at"Main Hall", Beldih Club,Northern Town, Jamshedpur-831001
ii) As required under Regulation 36(3) of Listing Regulations, particulars of Directors seeking appointment/ reappointment are annexed to the Notice of the Annual General Meeting to be held on July 30,2016
iii) Financial Calendar : April to March
Annual General Meeting : July
Dividend Payment : No dividend payment
iv) Date of book closure : July19,2016toJuly21,2016(both days inclusive)
v) Dividend Payment date : N.A.
vi) Listing on Stock Exchange : The Company's shares are listedon-
(1) BSE Ltd. (BSE)
(2) National Stock Exchange of India Ltd. (NSE)
(3) The Calcutta Stock Exchange Ltd. (CSE).
The Company has paid the annual listing fees to all the Stock Exchanges forthe financial year 2015-16.
vii) Stock Code : 505854 (BSE), TRF (NSE) &10030045 (CSE)
x) Registrar& Transfer Agents:
TSR Darashaw Limited Contact person : Ms. Shehnaz Billimoria 6-10, Haji Moosa Patrawala Ind Estate, Tel. no. : (022) 6656-8484 (Near Famous Studio)20,Dr.E.MosesRoad, Faxno. : (022)6656-8494 Mahalaxmi,Mumbai-400 011 E-mail : firstname.lastname@example.org <mailto:csg- Website : www.tsrdarashaw.com
xi) Share transfer system:
a) Physical Form:
Share transfers in physical form can be lodged either at the Registered Office of the Company or with TSR Darashaw Ltd, the Registrar& Transfer Agents, at the above-mentioned address or any of their branch offices, addresses of which are available on their website.
Transfers are normally processed within 15 days from the date of receipt, provided the documents are complete in all respects. Certain executives (including the Managing Director) are severally empowered to approve transfers.
b) Demat Form:
The Company has made arrangements to dematerialize its shares through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and Company's ISIN No. is INE391D01019.
xiii) Dematerialization of shares and liquidity:
93.80% of the share capital of the Company had been dematerialized till March 31,2016. The Company's shares are frequently traded on BSE and NSE.
xiv) The Company has no outstanding GDR/ADR/Warrants or any convertible instruments.
xv) The Company has adopted Forex Risk Management Policy and hedging of exposure are undertaken as per the said policy
xvi) Plant location : 11,StationRoad,BurmaMines, Jamshedpur-831 007(Jharkhand).
xvii) Address for correspondence : TRF LIMITED, ATATA Enterprise, 11, Station Road, BurmaMines,Jamshedpur-831 007. Tel.: (0657) 2345727/3046326, Fax: (0657) 2345732 E-mail: email@example.com Web-site: www.trf.co.in
12. Reconciliation of Share Capital Audit
A qualified Practicing Company Secretary carried out the Share Capital Reconciliation Audit to reconcile the total issued and paid up capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) with the total issued and listed capital. The audit confirms that the total issued/ paid up capital is in agreement with the total number of shares in the physical form and the total number of dematerialized shares held with NSDL and CDSL.
13. CEO/CFO Certification
Managing Director and Chief Financial Officer have submitted the required Certificate to the Board at its meeting held on May 16, 2016, wherein the Audited Accounts of the Company for the financial year 2015-16 were considered.
14. A Certificate from the Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, regarding due Compliance of conditions stipulated in Schedule V(E) of the Listing Regulations is annexed hereto.