REPORT ON CORPORATE GOVERNANCE
The Company pursuant to clause 49 of the Listing Agreement with stock exchange furnish its report on Code of Corporate Governance.
I. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
The Company's philosophy on Corporate Governance envisages the attainment of highest level of transparency, accountability and equality, in the functioning of the Company and its relationship with employee, shareholders, creditors, consumers, dealers, lenders and ensuring high degree of regulatory compliance.
The Company is committed to following best Corporate Governance Practices in all its pursuits and is constantly striving to better them and adopt emerging best practices. The Board understands and respects its fiduciary role and responsibility to shareholders and strives hard to meet their expectations. The Board also believes that best board practices, transparent disclosures and shareholder empowerment are necessary for creating shareholder value. Thus at Terai tea Company Limited, we always endeav our to create an environment of fairness, equity and transparency in transactions with the underlying objective of securing long term shareholder value creation and enhancement while, at the same time, respecting the rights of all stakeholders of the Company and the society at large.
The Company will continue to focus its resources, strengths and strategies to achieve its vision of becoming the most admired and trusted global Tea producer, while upholding the core values of entrepreneurship, disclosure and transparency, equity, responsibility, sustainability and ethical behavior which are fundamental to the Terai family.
II. BOARD OF DIRECTORS
a) Composition of category of Directors
The Board of Directors of the Company have an optimum combination of executive and nonexecutive directors with at least one woman director and not less than fifty percent of the Board of Directors comprising of non-executive directors. Our Company has Six(6) Directors among them two(2) are Promoter Directors of which one(1) is an Executive Director who is the Managing Director and Chairman and one(1) Women Director, one (1) Executive Non Independent Director and remaining three(3) Non-Executive Independent Directors. The name and category of each is given below:
Independent Directors (IDs)
In accordance with the provisions of Companies Act, 2013 and clarifications/ circulars issued from time to time, the Company has appointed Mr. Hemant Kumar Agarwal (DIN 02308200), Dr. Jayantakumar Natwarlal Raja (DIN 06884343) and Mr. Milan Krisna Sarkar (DIN 05272885), as Independent Directors to hold office for a period of 5 (Five ) consecutive years from the date of the 41st Annual General Meeting (AGM) held on 27th September, 2014. In this regard, company has issued formal letters of appointment to the Independent Directors and the same is also posted on the website of the Company.
All the Independent Directors of the Company furnish a declaration at the time of their appointment as well as annually that they qualify the tests of their being independent as laid down under section 149(6) of the Companies Act, 2013 and revised Clause 49 of Listing Agreement. All requisite declarations were placed before the Board.
Independent Directors Meeting
Independent Directors meeting was held on 14th February, 2015 without the presence of the Managing Director and other Non-Executive Non Independent Director. The meeting was attended by all the Independent Directors and enabled them to:
• review the performance of non-independent directors and the Board as a whole
• review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors
• assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Familiarizations Programme for IDs
In terms of Clause 49(II)(B)(7) of the Listing Agreement, the Company has conducted the Familiarization Programme for Independent Directors to familiarize them with their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc., through various initiatives. The details of such familiarization programs have been placed on the website of the Company and may be accessed at the link www.teraigroup.com
The Nomination & Remuneration Committee of your Company has formulated and laid down criteria for Performance Evaluation of the Board (including Committees) and every Director (including Independent Directors) pursuant to provision of Section 134, Section 149 read with Code of Independent Directors (Schedule IV) and Section 178 of the Companies Act, 2013 and the revised clause 49 of the Listing Agreement with Stock Exchanges.
Based on these criteria, the performance of the Board, various Board Committees viz. Audit Committee, Stakeholder's Relationship Committee, Nomination and Remuneration Committee, and Individual Directors (including Independent Directors) were evaluated.
During the year under review, the Independent Directors of your Company reviewed the performance of Non- Independent Directors and Managing Director of your Company, taking into account the views of Executive Directors and Non-Executive Directors.
The Board as a whole is an integrated, balanced and cohesive unit where diverse views are expressed and dialogued when required, with each Director bringing professional domain knowledge to the table. All Directors are participative, interactive and communicative.
The information flow between your Company's Management and the Board is complete, timely with good quality and sufficient quantity.
Code of Conduct for Independent Directors
The Company has adopted additional Code of Conduct for the Independent Directors of the Board, which is as follows:
(1) Uphold ethical standards of integrity and probity;
(2) Act objectively and constructively while exercising duties;
(3) Exercise their responsibilities in a bona fide manner in the interest of the company;
(4) Devote sufficient time and attention to professional obligations for informed and balanced decision making;
(5) Not allow any extraneous considerations that would vitiate their interests of the company as a whole, while concurring in or dissenting from the collective judgments of the Board in its decision making;
(6) Not abuse their position to the detriment of the company or its shareholders or for the purpose of gaining direct or indirect personal advantage for any associated person;
(7) Refrain from any action that would lead to loss of their independence;
1. For the purpose of considering the limit of the committees on which a director can serve, all public limited companies, whether listed or not, shall be included and all other companies including private limited companies, foreign companies and companies under Section 8 of the Companies Act, 2013 shall be excluded.
2. In accordance with Clause 49 of the Listing Agreement, Membership / Chairmanship of only Audit Committee and Stakeholders' Relationship Committee in all public limited companies (excluding Terai Tea Co Limited) have been considered.
3. Other directorship includes directorship in public companies only.
4. None of the Directors is a member in more than 10 committees or act as a Chairman of more than five committees across all companies in which he is a Director and the same is in compliance with Clause 49 of the Listing Agreement.
5. None of the Directors on the Board serve as an Independent Director of more than 7 (Seven) listed companies across all companies in which he/she is a Director. Further, the Director on the Board serving as a whole time Director in a listed company is not serving as an Independent Director of more than 3 (Three) listed companies across all companies in which he/she is a Director.
6. Further, in compliance with Section 165 of the Companies Act, 2013, none of the Directors on the Board hold directorship in more than 20 (Twenty) companies and the same time with the directorship in public companies not exceeding 10 (Ten). All the Directors have made necessary disclosures regarding directorship/committee positions occupied by them in other companies in accordance with revised Clause 49 of the Listing Agreement with the Stock Exchanges and Companies Act, 2013.
7. Shri Ajit Kumar Agarwala, retires by rotation at the end of ensuing AGM and offers himself for reappointment.
Code of Conduct
The Company has adopted a Code of Conduct specifically for the members of the Board of Directors and/or members of the Senior Management of the Company, which sets out as follows:
1. Conflict of Interest
> To conduct them ethically and honestly and act in the interests of the Company
> To avoid situations that might lead to a conflict between his personal interests and the interests of the Company.
Although it is difficult to describe all situations, which could create a conflict of interest, the following are some examples:
a. Working for a competitor/ supplier/ client while working for the Company.
b. To serve as a Director/Employee in Top Executive Management of any Company that competes with the Company.
c. One may accept Directorship or Employment of a Company / Supplier or Business Partner onlyafter obtaining approval from the Company's Legal Department.
d. Accepting gifts/ receiving discounts from competitors
e. Personally taking a business opportunity that arises due to a Senior Manager's position
f. Receiving a loan or a guarantee or an obligation arising due to his position
2. Confidential Information
> Each Director & Senior Manager is expected to protect the Company's confidential proprietary business information.
> Each Director & Senior Manager's commitment is evidenced by a confidentiality agreement.
> Being a Director / Senior Member, one is expected to keep certain information confidential which have been discussed in the Senior Management Meetings.
> Re-enforcing the confidentiality agreement as stated in the appointment terms and conditions as well as in the service rule of the Organization.
> Only authorized Company spokesperson may communicate with the press on behalf of the Company.
3. Public Disclosures
The Company is committed to all of its public disclosures and reports being full, fair, accurate, timely and understandable.
4. Legal Compliance
The Company recognizes to conduct its business with honesty, integrity and in full compliance with all applicable laws, rules and regulations. All Directors & Senior Managers are required to abide by the statutory requirements.
5. Share Transactions
All Board Members & Senior Managers should report their holding in the Company. There should exist a block period of two weeks (before the quarterly results etc.) when one cannot trade in the Company's securities
In accordance with the SEBI Guidelines, one is expected to refrain from "Insider trading" by misusing any unpublished price-sensitive information.
6. Fair Business Practices
Each Director / Senior Manager of the Organization is committed to conduct business fairly without engaging in corrupt practices and unfair competition. Therefore, manipulation, concealment, abuse of privileged information, misrepresentation of facts is not considered as fair business practice.
7. Supporting Loyalty & Respect
Each Director & Senior Manager will abide by and promote Company's environment of mutual trust and loyalty. If any Director / Senior Member breach this trust, then he/ she will be subject to appropriate corrective action including dismissal or removal from office.
8. Open Communication
Each Senior Manager is encouraged to discuss concerns raised by anyone in the Company, or report any suspected breach to CMD. The Company will not tolerate any form of retaliation for reports or concerns that were made in good faith.
9. Corporate Policy Awareness
All Senior Managers must be aware of all the corporate policies governing the Code of Conduct of employees and the Company's Management System.
Director & Senior Managers are expected to give responsible views about the Company and its performance.
Black out Period
All Directors & Senior Managers are expected to adhere to black out policy during which trading window is closed for them.
Amendment of the Code
The Company recognizes that only the Managing Director of the Company may amend this Code as and when required.
Violation of the Code of Conduct
If there is a violation of the above-mentioned Code of Conduct by any of the Senior Managers, depending on the seriousness/ severity of the issue will be taken up by a Committee, headed by the MD of the Company for appropriate action as deemed fit.
B. AUDIT COMMITTEE
Composition Meeting and attendance during the year
The terms of reference, role and scope of Audit Committee are in line with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchange(s). The Audit Committee of the Board, inter alia, provides reassurance to the Board on the existence of an effective internal control environment. The Audit Committee is constituted by three Non Executive Independent Directors (NEID) all of whom are financial literate and they have accounting or related financial management expertise. Mr. Hemant Kumar Agarwal, Chairman of the Committee is among the Non-Executive Independent Directors., The Company Secretary acts as the Secretary of the Audit Committee. During the year 4 (Four) meetings of the Audit Committee were held on May 30, 2014, August 13, 2014, November 14, 2014 and February 14, 2015.The maximum time gap between any two consecutive meetings did not exceed 4 (Four months). Moreover, the quorum of minimum 2 (Two) Independent Directors, as required by the Listing Agreement, was present in all the meetings of the Audit Committee held during the year. The constitution of the Committee, number of meetings held and attendance of the members are given below:
Terms of Reference :
The Audit Committee functions as a bridge between the administration of the Company and its Board in all financial and accounting matters including budget. The terms of reference for Audit Committee include:
(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 auditors' 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;
(viii) Monitoring the end use of funds raised through public offers and related matters.
Statutory Audit Observations
While reviewing the financial records for the year under report, the Audit Committee took note that there were no observations of the Statutory Auditors.
C) STAKEHOLDERS RELATIONSHIP COMMITTEE
Composition & Terms of Reference
In compliance with the provisions of Section 178(5) of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has renamed the existing "Shareholders / Investors' Grievance Committee" as " Stakeholders Relationship Committee".which comprises of three(3) Directors namely Dr. Jayantakumar Natwarlal Raja (Non-Executive Independent Director) who is the Chairman of the Committee ,Mr. Milan Krisna Sarkar (NonExecutive Independent Director) and Mr. Hemant Kumar Agarwal (Non- Executive Independent Director,Mr. Roshan Dave, Company Secretary acts as the Secretary to the Stakeholders Relationship Committee.. This Committee additionally monitors the relationship with Stakeholders including Shareholders, Employees, Customers, Vendors, Government and Society. Such meetings are held on quarterly basis and the Shareholders' complaints and grievances are reviewed in detail by the Committee and prompt and effective directions are given to the Registrars for proper disposal. During the Financial Year 2014-15 the Company has not received any complaint from the Shareholders / Investors of the Company and no queries are pending to be resolved as on date.
D. NOMINATION & REMUNERATION COMMITTEE:
In compliance with Section 178 of the Companies Act, 2013, the Board has renamed the existing "Remuneration/CompensationCommittee" as the "Nomination and Remuneration Committee". The Nomination and Remuneration Committee ("the Committee') shall act in accordance with the prescribed provisions of Section 178 of the Companies Act, 2013Companies (Meetings of Board and its Powers) Rules, 2014 and under the Listing Agreement with the Stock Exchanges.
The Nomination & Remuneration Committee of the Company comprises of three(3) Non-Executive Independent Directors, Mr. Milan Krisna Sarkar is the Chairman of the Committee and the Company Secretary acts as the Secretary of the Nomination & Remuneration Committee
Remuneration Committee Comprises members of the Board of Directors ("Board"), Key Managerial Personnel and the Senior Management Personnel of the Company.
The objective of the remuneration policy is to enable the Company to attract, motivate, and retain qualified industry professionals for the Board of Management and other executive level in order to achieve the Company strategic goals. The remuneration policy acknowledges the internal and external context as well as the business needs and long term strategy. The policy is designed to encourage behavior that is focused on long-term value creation, while adopting the highest standards of good corporate governance.
Disclosure on Materially Significant Related Party transactions:
All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arms length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosures as required by the Accounting Standards (AS18) have been made in the Note No. 29 to the Financial Statements.
The Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website and may be accessed at the link www.teraigroup.com
Disclosure on Accounting Treatment:
In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.
Details of Non-Compliance by the Company, Penalties, strictures imposed on the Company by the Stock Exchanges, SEBI or any Statutory Authority on any matter related to Capital Markets :
The Company has complied with all the requirements of the Listing Agreement with the Stock Exchanges as well as regulations and guidelines of SEBI. No penalties or strictures were imposed by SEBI, Stock Exchanges or any authority on matters relating to Capital Markets during the last three years.
The Company has laid a comprehensive Risk Assessment and Minimization Procedure which was presented to the Audit Committee and reviewed by the Board from time to time. These procedures are reviewed to ensure that executive management controls risk through means of a properly defined framework.
Vigil Mechanism/Whistle Blower Policy:
In compliance with provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement the Company has framed a Vigil Mechanism/ Whistle Blower Policy and the same has also been placed in the website of the Company. None of the employees of the Company has been denied access to the Audit Committee.
Details of Compliance with Mandatory Requirements and Adoption of Non-Mandatory Requirements:
The Company has complied with all the applicable mandatory requirements. The Company has not adopted the non-mandatory requirements of the Listing Agreement.
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 of 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.
CEO & CFO Certification :
The Managing Director and Chief Financial Officer of the Company have issued necessary certificate pursuant to the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges and the same is attached and forms part of the Annual Report.
Compliance Certificate of The Comapany Secretary
Certificate from the Company's Secretaries M/s MR & Associates, Kolkata- CP No 2551, confirming compliance with conditions of corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is attached and forms part of Annual Report.
a) Annual General Meeting
Date : September 29, 2015
Time : 10.30 A.M
Venue : Terai Tea Co. Ltd, 1st Floor 10 Government Place (East) Kolkata - 700 069
b) Financial Calendar (Tentative and subject to change)
Particulars Date of Board meeting for approval
Annual Accounts for 2014-15 : 4th week of May, 2015
Financial results for First Quarter : 2nd week of August, 2015
Financial results for Second Quarter : 2nd week of November, 2015
Financial results for Third Quarter : 2nd week of February, 2016
Financial Result for the year ended : Last Week of May, 2016
c) Book Closure : Books shall remained closed from September 21st 2015 to September 29th 2015 (both days inclusive)
d) Listing in Stock Exchange
i) The shares of the company are listed as detailed below:
The Stock Exchange Stock Code
Bombay Stock Exchange Limited, Phiroza Jeejeebhoy Tower, 25th Floor, Dalal Street, Mumbai-400001 : 530533
Calcutta Stock Exchange Association Limited, 7, Lyons Range Kolkata-700001 : 30105
Ahmedabad Stock Exchange Limited, Kamdhenu Complex, Ahmedabad-380015 : 60857
Jaipur Stock Exchange LimitedIndra Place, J.L.N. Marg, Jaipur-302017 ; 596
ISIN Number for NSDL/CDSL : INE 390D1011
CIN No : L51226WB1973PLC029009
The Company has paid Annual Listing fees to Bombay Stock Exchange for the year 2015-16.
i) Depositories :
National Securities Depository Ltd. Trade World, 4th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai-400001
Central Depository (India) Ltd. Phiroza Jeejeebhoy Tower, 28th Floor,Dalal Street, Mumbai-400001
(e) Demat ISIN Numbers:
NSDL : ISIN INE 390D1011
CDSL : ISIN INE 390D1011
(f) Registrar and Share Transfer Agents
Maheshwari Datamatics Pvt. Ltd. 6, Mangoe Lane, 2nd Floor, Surendra Mohan Ghosh Sarani,
Kolkata - 700 001 Tele : (033) 2243-5029/5809 Fax : (033) 2248-4787 Email : email@example.com
ii) Share Transfer System
The request for the transfer of shares held in physical mode should be lodged at the Company's Registrar Share Transfer Agents, Maheshwari Datamatics Pvt. Ltd. The Board of Directors has unanimously delegated the powers of share transfer, transmission, sub-division and consolidation to a Share Transfer Committee in order to expedite transfer, transmission, etc in the physical form. The Committee meets once in every fortnight for approving share transfer and for other related activities. Share transfers are registered and returned in normal course within an average period of 15 days, if the transfer documents are found technically in order and complete in all respects
m) Outstanding GDRs/ ADRS/Warrants or any Convertible Instruments:
No GDRS/ADRs/Warrants or Convertible Instruments are issued during the year.
p) Address for correspondence:
Any assistance regarding share transfer and transmission, change of address, non- receipt of share certificate/ duplicate share certificate, demat and other matters and for redressal of all share-related complaints and grievances, the Members are requested to write to or contact the Registrar & Share Transfer Agents or the Share Department of the Company for all their queries or any other matter relating to their shareholding in the Company at the addresses given below
1. The Company's Registered Office :
TERAI TEA COMPANY LIMITED
10, Government Place (East), 1st Floor, Kolkata- 700 069, Tele: (033) 4021-4412(34 Lines), Fax: (033) 2248-9182, Email: firstname.lastname@example.org Website: www.teraigroup.com
2. Registrar and Share Transfer Agent :
MAHESHWARI DATAMATICS PVT. LTD., 6, Mangoe Lane, 2nd Floor, Surendra Mohan Ghosh Sarani, Kolkata - 700 001, Tele: (033) 2243-5809; 2243-5029, Fax: (033) 2248-4787, Email: email@example.com