CORPORATE GOVERNANCE REPORT
I. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The Company considers Corporate Governance as an important tool for achieving all round excellence with ultimate objective of enhancing shareholders' value. The Company took initiative in practicing good Corporate Governance procedures, even before they were made mandatory
It is firmly believed that Corporate Governance begins with Company's continuous review of its internal procedures and practices encompassing all its business areas in the most appropriate manner, which would spell fairness, transparency and accountability.
II. BOARD OF DIRECTORS
The Business of the Company is managed by the Board of Directors. The functions of the Board include formulation of strategic business plans, budgets, setting up goals and evaluation of performance, approving corporate philosophy and mission, monitoring corporate performance against strategic business plans, overseeing operations, recruitment of senior management personnel, review of material investment and fixed assets transactions, ensuring compliance with laws and regulations, keeping shareholders informed regarding plans, strategies and performance of the Company and other important matters.
The Board formulates the strategy, regularly reviews the performance of the Company and ensures that the previously agreed objectives are met on a consistent basis. A director along with a team of professionals manages the day-to-day operations of the Company. The Non-Executive Directors are drawn from amongst persons with experience in business, industry and finance. The Board of Directors has the ideal composition with more than half the Directors being non-executive Directors. Since the Company has a Non-Executive Promoter Chairman, the Board's composition meets the stipulated requirement of at least one-half of the Board comprising independent Directors who have no professional and/or business relationship with the Company.
A. Composition of Directorships
The constitution of the Board as on June 30,2015:
B. Pecuniary Relationship
There is no pecuniary relationship or transaction of the non-executive Directors vis-a-vis the Company.
C. Attendance records of Board Meetings
During the year under review, Five (5) Board meetings were held on 28.08.14,16.09.14, 14.11.2014; 13.02.15; & 12.05.15. The Board members are given appropriate documents and information in advance of each Board meeting.
III. BOARD PROCEDURES
The members of the Board have been provided with the requisite information as per the listing agreement well before the Board Meeting and the same was dealt with appropriately.
All the Directors who are in various committees are within the permissible limit of the listing agreement and none of the Directors are disqualified for appointment as director under any of the provisions of the Companies Act, 2013.
IV. AUDIT COMMITTEE
The Audit Committee comprised Mr. C. K. Garodia as Chairman and Mr. R. C. Jha and Mr. D. Y. Mannawar as its members. The Audit Committee at its meetings exercised the role and duties, which had been defined by the Board of Directors pursuant to provisions of the Companies Act read with Clause 49 of the Listing Agreement.
Terms of Reference of Audit Committee are broadly as follows:
• The Audit Committee is responsible for:
• Overseeing the Company's financial reporting process and disclosure of its financial information;
• Recommending the appointment of the Statutory Auditors and fixation of their remuneration;
• Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors;
• Reviewing and discussing with the Statutory Auditors and the Internal Auditor about internal control systems;
• Reviewing the adequacy and independence of the Internal Audit Function and observations of the Internal Auditor;
• Reviewing major accounting policies and practices and adoption of applicable Accounting Standards;
• Reviewing major accounting entries involving exercise of judgment by the Management;
• Disclosure of Contingent Liabilities;
• Reviewing, if necessary, the findings of any internal investigations by the Internal Auditors and reporting the matter to the Board;
• Reviewing the risk management mechanisms of the Company;
• Reviewing compliance with Listing Agreement and various other legal requirements concerning financial statements and related party disclosure;
• Reviewing the Quarterly and Half-yearly financial results and the Annual financial statements before they are submitted to the Board with particular reference to:
Matters required to be included in the Directors Responsibility Statement to be included in the Board of Directors report in terms of Section 134 of the Companies Act, 2013;
Changes, if any, in accounting policies and practices and reasons for the same; Major accounting entries involving estimates based on the exercise of judgment of management;
Significant adjustments made in the financial statements arising out of audit findings;
Disclosure of any related party transactions; Qualifications in the draft audit report;
• Reviewing the operations, new initiatives, and performance of the business divisions;
• Looking into the reasons for substantial defaults in payments to depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors, if any;
• Carrying out such other functions as may be specifically referred to the Committee by the Company's Board of Directors
During the year under review, the Committee met 4 times on 22/08/2014,14/11/2014, 13/02/2015 and 11/05/2015.
V. NOMINATION & REMUNERATION COMMITTEE
The Nomination & Remuneration Committee comprises of three members, viz., Mr. D. Y. MannawarasChairmanand Mr. B. K. Nopany, Mr.C. K. Garodia as member.
The Nomination & Remuneration Committee shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria lay down, recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance.
The Committee had been constituted to review and approve the annual salaries, commission, service agreement and other employment conditions for the executive directors.
The remuneration policy is directed towards rewarding performance, based on review of achievements on a periodical basis. The remuneration policy is in consonance with the existing industry practice.
During the year under review, the Committee met ones on, 15/09/2014, and all the members present at that meeting.
VI. SHAREHOLDERS' GRIEVANCE COMMITTEE
The Share Transfer & Shareholders' Grievance Committee comprises of three directors under the chairmanship of Mr. C. K. Garodia. The other members in the committee being, Mr. B.K. Nopany and Mr. D. Y. Mannawar.
The committee has been constituted to specifically look into redressal of shareholders' grievances such as transfer, dividend, and de-materialization related matters. The Committee has also been delegated the power to approve transfer/transmission of shares, issue of new or duplicate certificates, sub-division of shares, split of share, review of dematerialization of shares and all matters related to shares.
During the year under review, the Committee met 20 times on 01/07/2014,03/07/2014, 04/07/2014, 05/07/2014, 08/07/2014, 09/07/2014, 10/07/2014,18/07/2014, 21/07/2014, 25/07/2014, 28/07/2014, 05/08/2014, 07/08/2014,25/08/2014, 03/09/2014, 11/09/2014, 16/09/2014, 17/09/2014, 30/09/2014, 13/10/2014.
Total number of letters and complaints received and replied to the satisfaction of shareholders during the year under review was Nil As on 30th June 2015, there are Nil complaints pending with the Company.
The Company has also adopted code of internal procedures and conduct for prevention of insider trading in the shares of the Company, pursuant to Securities & Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, as amended. The Board has designated Company Secretary as the Compliance Officer for this purpose.
A. Basis of related party transaction
Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives etc., that may have potential conflict with the interest of company at large — Nil
B. Whistle Blower Policy
The company encourages an open door policy where employees have access to the Head of the business/Function. In terms of Company's Code of Conduct, any instance of non adherence to the code/ any other observed unethical behavior are to be brought to the attention of the immediate reporting authority, who is required to report the same to the Head of Corporate Human Resources. We hereby affirm that no personnel have been denied access to the audit committee.
The Company has complied with all mandatory requirements of the revised Clause 49 of the Listing agreement, which came into effect from 1st January 2006. Further, the Company has also complied with the non-mandatory requirement.
C. Code of Business Conduct and Ethics for Directors and management personnel
The Board has prescribed a Code of Conduct ("Code") for all Board members and senior management of the Company. The Code is provided on the Website of the Company. All Board members and senior management personnel have confirmed compliance with the Code for the year 2014-15. A declaration to this effect signed by the Executive Director of the Company is provided elsewhere in the Annual Report.
D. Disclosure of Accounting Treatment
In the preparation of financial statements for the year ended on 30th June, 2015; there was no treatment different from that prescribed in an accounting standard that had been followed.
E. Board Disclosures- Risk Management
The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risk through means of properly defined framework.
F. Proceeds from Public Issues, Right Issues, Preferential Issues, etc.
During the year, the Company has allotted 12250000 equity shares of Rs 10/- each on preferential basis.
IX. SUBSIDIARY MOTORING FRAMEWORK
The Company has no subsidiary.
X. MEANS OF COMMUNICATION
Immediately after the Board of Directors of the Company took note of Results for quarter ended 30th September 2014, 31st December 2014, 31st March 2015, 30th June 2015 and Audited Annual Accounts, the same were informed to the National Stock Exchange, Bombay Stock Exchange Ltd., Mumbai were also published in English newspaper (viz. Hindustan Times in Patna) and Hindi newspaper, viz., Business Standard, in Patna.
A management Discussion and Analysis report which forms part of the Annual Report is given bymeansof a separate annexure and is attached to the Directors' Report.
XI. GENERALSHAREHOLDERS INFORMATION
1. Annual General Meeting
Date : 22nd March, 2016
Day : Tuesday
Time : 1.00 P.M.
Venue : Regd.Office.:
P.O. Hanuman Sugar, Mills Motihari, Dist.: EastChamparan, Bihar-845401
Scrip Code-507528 Scrip Id-EASUG Scrip Code-EASTSUGIND INE889B01016
2. Financial Calendar
[Tentative and subject to change]
Financial Year :July 1,2015 to March 31,2016 (9 Months)
First Quarter Results : By 14th November, 2015
Second Quarter Results : By 14th February, 2016
Third Quarter Results: By 30th May, 2016
3. Date of Book closure
Friday, 18th March, 2016 to Tuesday 22nd March, 2016 (both days inclusive)
4. Listing on Stock Exchanges
The Shares of the Company are listed on Bombay Stock Exchange, Mumbai and National Stock Exchange India Ltd. However, trading of shares of the Company at the National Stock Exchange and Bombay Stock Exchange is suspended and efforts are being made for resumption of the same.
5. Stock Codes
Mumbai Stock Exchange
National Stock Exchange ISIN Number for Dematerialized Shares
7. Registrar & Share Transfer Agent
M/s Maheshwari Datamatics Pvt. Ltd 6, Mangoe Lane, 2nd Floor Kolkata-700001
Phone: 033-2248 2248 / 2243 5809 Fax : 033-2248 8787 E-mail: email@example.com
8. Share Transfer system
Presently, the share certificates which are received for transfer in physical form are processed and are returned within a period of 10 to 15 days from the date of receipt, subject to the documents being valid and complete in all respects.
The transfers are approved in the Shareholders Grievance Transfer Committee which meets on a periodical basis.
11. Dematerialization of Shares and liquidity
The dematting facility exists with both the NSDL and CDSL for the convenience of shareholders. As on 30th June, 2015,14052400 equity shares representing 48.21% of your Company's Equity shares capital have been de-materialised.
12. Plant location
13. Investors correspondence may be addressed to -Eastern Sugar & Industries Ltd
'Chandra Kunj' 3, Pretoria Street Kolkata-700071
By Order of the Board
For EASTERN SUGAR & INDUSTRIES LIMITED
B. K. Nopany
Date: 9th February, 2016