REPORT ON CORPORATE GOVERNANCE
The Directors have great pleasure in presenting the Report on Corporate Governance for the financial year ended 31st March, 2015 as per Clause 49 of the Listing Agreement.
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
Corporate Governance refers to rules, practices, systems and processes by which a company is directed and controlled. It essentially involves balancing the interests of many stakeholders of a company, which include its shareholders, management, suppliers, financiers, regulators, employees and the community. Further, this system spells out the rules and procedures for making decisions on corporate affairs; it also provides the structure through which the Company objectives are set, as well as the means of attaining and monitoring those objectives.
Broadly in tune with the above, your Company's Corporate Governance philosophy rests on the pillars of integrity, accountability, sustainability, equity, transparency and environmental responsibility. It is committed to the highest standards of Corporate Governance in all its activities, systems and processes, by adhering to the good corporate practices and it is constantly striving to improve them.
The Board of Directors fully supports and endorses corporate governance practices as enunciated in Clause 49 of the Listing Agreement as applicable from time to time.
2. BOARD OF DIRECTORS
The Board consisted of 4 (Four) members as at 31st March, 2015 with knowledge and experience in different fields. The Board has a balanced mix of Executive and Non-executive directors and one half of the Board members are Independent Directors.
All independent directors possess the requisite qualifications and are experienced in their own fields. Directors, other than Independent Directors are liable to retire by rotation. None of the directors are members of more than ten committees or chairman of more than five committees in public limited companies, in which they are directors. Necessary disclosures have been obtained from all the directors regarding their directorships/committee memberships and have been taken on record by the Board.
Appointment of Directors
Mr. R. Swaminathan (DIN: 02052310) was appointed as an Additional Director and Independent director w.e.f 29.05.2015 and will hold office till the ensuing annual general meeting. Relevant details relating to Mr. R. Swaminathan are furnished in the notice convening the Annual General Meeting to be held on 03rd September, 2015, sent along with the annual report
a. Other directorships exclude foreign companies, private limited companies and alternate directorships.
b. Only membership in Audit Committee and Stakeholders' Relationship Committee have been reckoned for other committee memberships
b) Board Meetings
The Board has formal schedule of matters reserved for its consideration, discussion and decision. The agenda is circulated well in advance to the Board members. The items in the agenda are backed by comprehensive background information to enable the Board to take appropriate decisions. In addition, to the information required under Annexure X to Clause 49 of the Listing Agreement, the Board is also kept informed of major events/items and approvals have been taken wherever necessary for making investments, ensuring adequate availability of financial resources and periodically consider the report on compliance of applicable laws and gives appropriate directions.
The Board also reviews the Board Meeting minutes and financial statements and also takes on record the Committee meeting minutes.
The Board of Directors met Six (6) times during the financial year ended 31st March, 2015 - on 23rd May 2014, 27th June 2014, 07th August 2014, 30th September 2014, 30th October 2014 and 30th January 2015. The maximum gap between any two meetings was less than one hundred and twenty days as stipulated under Clause 49(II)(D) of the Listing Agreement.
The company places before the Board all those details as required under Annexure X to the listing agreement. The dates for the board meetings are fixed well in advance after taking into account the convenience of all the directors and sufficient notice is given to them. Detailed agenda notes are sent to the directors. All the information required for decision making are incorporated in the agenda. Those items which could not be included in the agenda are tabled at the meeting. The management appraises the Board on the overall performance of the company at every board meeting. Legal issues, write-offs, provisions, purchase and disposal off capital assets are all brought to the notice of the Board. The Board reviews the performance, approves capital expenditures, sets the strategy that the company should follow and ensures financial stability. The Board reviews and takes on record the actions taken by the company on all its decisions periodically.
The Directors are elected based on their qualifications and experience in varied fields as well as company's business needs. The Nomination and Remuneration Committee, recommends the appointment of Directors to the Board. At the time of induction on the Board of the Company, an invitation to join the Board of the Company is sent and a directors' handbook comprising a compendium of the role, powers and duties to be performed by a Director is given to the new Director. Presentation is also made to the new Director regarding the business and other details of the Company.
Details of Director seeking appointment / re-appointment
Mrs. Sumathi Sridharan, Director of the Company, retires by rotation at the ensuing Annual General Meeting, and being eligible, offers herself for re-appointment.
3. Board Committees
a. Audit Committee
Overall purpose/ objective
The role of Audit Committee in brief is to review the financial statements, internal controls, accounting policies and internal audit reports.
The purpose of the Audit Committee (the "Committee") is to assist the Board of Directors (the "Board") in reviewing the financial information which will be provided to the shareholders and others, reviewing the systems of internal controls which management and the Board have established, appointing, retaining and reviewing the performance of independent accountants / internal auditors and overseeing the Company's accounting and financial reporting processes and the audits of the Company's financial statements.
Pursuant to Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has already in place an Audit Committee with Mr. R. Kalyanaraman, Director (DIN: 00041770) as the Chairman. The Committee consists of 2 independent Directors and 1 non executive Director. All the members of the Committee have excellent financial & accounting knowledge.
The erstwhile Chairman of the Audit Committee was present at the previous Annual General Meeting of the company held on 28th August, 2014.
Terms of Reference
The terms of reference of the audit committee covers all matters specified in clause 49 of the listing agreement and also those specified in section 177 of the Companies Act 2013. The terms of reference broadly include review of internal audit reports, action taken reports and assessment of the efficacy of the internal control systems/ financial reporting systems as well as reviewing the adequacy of the financial policies and practices followed by the company. The audit committee reviews the compliance with reference to legal and statutory requirements, the quarterly and annual financial statements and related party transactions and reports its findings to the Board. The committee also recommends the appointment of internal auditor, statutory auditor and cost auditorfor the company.
The Committee met Six (6) times during the financial year ended 31st March 2015 on 23rd May, 2014, 27th June 2014, 07th August 2014, 30th September 2014, 30th October 2014, and 30th January, 2015 and the time gap between the two meetings did not exceed one hundred and twenty days.
b. Stakeholders Relationship Committee
Pursuant to Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has constituted a Stakeholders Relationship Committee with Mr. R. Kalyanaraman (DIN: 00041770), Director as the Chairman. The Stakeholders Relationship Committee of the Board looks into the redressal of the investors' complaints like non receipt of annual reports, dividend payments, change or deletion of name, issue of duplicate share certificates, dematerialization, rematerialisation, transfer, transmission, transposition, sub-division, consolidation and other allied transactions. The Board has also delegated to certain executives of the Company, powers to accomplish aforesaid objectives. The Committee also looks into all the communications received from the shareholders and complaints received from the stock exchanges.
Composition & Meetings
a) The Committee met 1 (One) time, during the financial year ended 31st March, 2015 on 31st January, 2015.
b) The Stakeholders Relationship Committee consists of 2 independent Directors and 1 Non-Executive Director.
. Nomination and Remuneration Committee
Nomination and Remuneration Committee was constituted on 23rd May, 2014 pursuant to Section 178 of the Companies Act, 2013 and Clause 49 (III) (IV) of the Listing Agreement for identifying the persons who are qualified to become directors and who may be appointed in senior management cadre, in accordance with the criteria laid down, recommend to the Board their appointments and removal and shall carry out evaluation of every director's performance
The Nomination and Remuneration Committee has framed the criteria for determining qualifications, positive attributes and independence of a director and recommended to the Board policy relating to the remuneration for the directors, key managerial personnel and other employees.
- To formulate the criteria for appointment of directors / senior management including determining their qualifications, positive attributes and other key elements to ensure independence of directors.
- To recommend to the Board, their appointments including re-appointment and removal
- To devise a policy on Board diversity
- To Identify persons, who are qualified to become directors/for appointment in senior management cadre
- To formulate criteria for evaluation of independent directors and Board and to carry out evaluation of every director's performance.
- To recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
- To recommend the remuneration package of the executive directors at the time of initial appointment
- To determine the increments in the remuneration of executive directors
- To devise annual incentive package of the executive directors
- To decide the minimum remuneration of executive directors in the event of inadequacy of profits
- To recommend to the Board, the remuneration including commission payable to non-executive directors subject to the limits laid down under the Act
- To exercise all powers and authority, which are necessary for implementation, administration and superintendence of the Employees Stock Option Schemes , if applicable
- To frame suitable policies and systems to ensure that there is no violation of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; and the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995, by any employee.
- To deal any other items under the terms of reference, as may be required by the Committee to exercise pursuant to any law or changes thereof.
Composition & Meetings
a) The Committee met 1 (One) time, during the financial year ended 31st March, 2015 on 31st January, 2015.
b) The composition of Nomination and Remuneration Committee and particulars of meetings attended by the members of the Committee are given below:
Criteria for Performance Evaluation
Section 178 read with Section VII (3 a & b) & Section VIII of Schedule IV of the Companies Act,2013 lays down specific requirements on performance evaluation of Board/ Chairperson/Independent Directors. As per Clause 49 of listing agreement, the Nomination and Remuneration Committee has to lay down the criteria for the above. The Committee had discussed in detail about the criteria to be adopted and process/format to be followed for evaluation of performance of Board/Committees and Directors. Based on the same, the evaluation process was completed for the year.
The criteria for performance evaluation are available in the Company's website: www.pentamedia.in
Pursuant to the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination and Remuneration Committee, and Stakeholders Relationship Committee. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directors, including Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment and safe guarding the interest of the Company. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.
The Board through the Nomination and Remuneration Committee adopted Remuneration policy pursuant to Section 178 of the Companies Act, 2013.This Remuneration Policy provides the framework for remuneration of members of the Board of Directors, Key Managerial Personnel and other employees of the Company.
The Non-Executive Directors (NEDs) are entitled for remuneration by way of commission besides sitting fees. The distribution of commission amongst the NEDs is placed before the Board for its consideration and approval. The actual commission payable to Directors is restricted to a fixed sum. This sum is reviewed periodically taking into consideration various factors such as performance of the company, time spent by the Directors for attending to the affairs and business of the company and extent of responsibilities cast on Directors under general law and other relevant factors.
The Non-Executive Directors are also entitled for sitting fees as per the Articles of Association of the Company for every Board / Committee meeting attended by them.
Remuneration Policy and Remuneration to Directors
Remuneration to Executive directors has been decided based on job profile, special skill requirements, number of years of experience and contribution made by the respective directors and consistent with the existing industry practice. As regard payment of sitting fees to Non -Executive Directors, the same is within the limits prescribed in the provisions of Sections 197 of the Companies Act,2013. The detail of remuneration paid to Executive Directors during the financial year 2014-15 is noted below:-
(b) Non Executive Directors:
The Non - Executive Directors are not paid any remuneration except sitting fees for attending the meetings of the Board of Directors and / or committees thereof. The Company does not have material pecuniary relationship or transactions with its non executive directors. The details of sitting fees paid, stock options granted and shares held by the non- executive directors are as under:
MEETING OF INDEPENDENT DIRECTORS:
The Independent Directors of the Company had met during the year on 30th January, 2015 to review the performance of non- Independent Directors and the Board as a whole, review the performance of the Chairperson of the Company and had assessed the quality, quantity and timeliness of flow of information between the company management and the Board.
The Company had also during the year, conducted familiarization programme for Independent Directors of the Company. This was done through regular presentation to the Directors and also discussions with management team. Any fresh induction into the Board of Directors is followed up with detailed briefing on the background of the Company, where the Company is present and other business details. The details of the Familiarisation programme is disclosed in the following web link www.pentamedia.in
Details of shareholding of Directors as on 31st March 2015
As on 31st March 2015, the company had one non -executive director and two non-executive Independent directors. Among the directors, non-executive director Mrs. Sumathi Sridharan (DIN: 00162055) holds 10000 equity shares in the company.
5. Code of Conduct
The Company has formulated a Code of Conduct ("The Code") for Members of the Board and Senior Management of the Company and the compliance of the same is affirmed by the Board and Senior Management personnel annually. The Code has also been posted on Company's corporate website www.pentamedia.in A declaration to this effect is signed by Mr. V. Chandrasekaran, Managing Director and the same forms a part of this report.
6. CEO and CFO Certification
In terms of clause 49 of the Listing agreement, the Chief Financial Officer have given the annual certification on financial reporting and internal controls to the Board. The Chief Financial Officer has also also given quarterly certification on financial results, while placing the financial results before the Board, in terms of clause 41 of the Listing Agreement. Accordingly, the Chief Financial Officer has certified to the Board, inter alia, the accuracy of financial statements and adequacy of internal controls for the financial reporting purpose, for the year ended March 31, 2015.
The requisite certification from Managing Director and CFO for the financial year 2014-15 under Clause 49(V) has been placed before the Board of Directors of the Company.
7. Prevention of Insider Trading
The Company has framed a code of conduct for prevention of insider trading based on SEBI (Insider Trading) Regulations, 1992. This code is applicable to all Directors / officers / designated employees. 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 to the Company and during the period when the trading window is closed. All the Directors and Senior Management Personnel have confirmed compliance with the code.
8. Vigil Mechanism / Whistle Blower Policy
The Company has adopted the whistle blower mechanism, a mandatory requirement of the Listing Agreement and the Companies Act, 2013 with the objective to provide employees, customers and vendors, an avenue to raise concerns, in line with the Company's commitment to the highest possible standards of ethical, moral and legal conduct of business, its commitment to open communication and to provide necessary safeguards for protection of employees from reprisals or victimization of whistle blowing in good faith. The Audit Committee reviews periodically the functioning of whistle blower mechanism. The policy also lays down the process to be followed for dealing with complaints and in exceptional cases, also provides for direct appeal to the Chairman of the Audit Committee. The detail of establishment of such mechanism is disclosed by the Company on its website and in the Board's Report.
It is hereby affirmed that no person has been denied access to the Audit Committee.
Mr. R. Kalyanaraman, has been appointed as the Ombudsperson, who will deal with the complaints received.
Related Party Transactions
All transactions entered into with the 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 arm's length pricing basis. There were no materially significant related party transactions with Directors/ promoters/ management, which had potential conflict with the interests of the Company at large.
Periodical disclosures from Senior Management relating to all material, financial and commercial transactions, where they had or were deemed to have had personal interests, that might have a potential conflict with the interest of the Company at large, are placed before the Board. The Company has also evolved a policy on dealing with the Related Party Transactions and necessary approval of the audit committee and Board of directors were taken, wherever required in accordance with the Policy. The details of such policies for dealing with Related Parties and the Related Party Transactions are disseminated in the website of the Company.
Transactions with the related parties are disclosed in Note No.9 to the financial statements in the Annual Report.
Statutory Compliances and Strictures
The Company has complied with the requirements of the Stock Exchanges / SEBI and statutory authorities on all matters related to capital markets during the last three years. No strictures or penalties have been imposed on the Company either by Stock Exchanges or by SEBI or any statutory authority.
10. Compliance with Corporate Governance Norms
The Company has complied with the mandatory requirements of the Code of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. The Company has submitted the compliance reports in the prescribed format to the stock exchanges for every
quarter during the year ended 31st March, 2015. The certificate of compliance with the conditions of corporate governance as stipulated in clause 49 of the Listing Agreement forms part of the Annual Report.
The other non-mandatory requirements of Clause 49 to certain extent have been adopted by the Company.
11. Means of Communication
The quarterly unaudited financial results and major announcements like notice of Board Meetings, Book Closure etc. are normally published in daily newspapers viz., Newstoday (English) and Maalaisudar (Tamil). The annual audited financial results are published in Newstoday (English) and Maalaisudar (Tamil). Further, the Code of Conduct of the Company applicable to the Board and senior management is also posted on the website of the Company
The company's website address is: www.pentamedia.in >. The website contains basic information about the company and such other details as required under the listing agreement. The company ensures periodical updation of its website. The company has designated the email-id email@example.com to enable the shareholders to register their grievances.
12. Management Discussion and Analysis Report
Management Discussion and Analysis Report forms part of the Annual Report.
13. General Shareholder Information
A separate section has been annexed to the Annual Report, furnishing various details viz., AGM venue, distribution of shareholding pattern, means of communication etc., for the general information of the shareholders.
Registered Office : “TAURUS”, No. 25, 1st Main Road United India Colony, Kodambakkam Chennai - 600 024
Corporate Identifi cation Number (CIN) : L74210TN1976PLC007142
Annual General Meeting
Day : Thursday
Date & Time : 03rd September 2015 at 10:00 AM
Venue : Rani Seethai Hall - No. 603, Anna Salai, Chennai – 600 006
Financial Year : 01.04.2014 - 31.03.2015
Book Closure Period : Friday, 28th August 2015 to Thursday, 3rd September 2015 (both days inclusive).
Listing on stock exchanges and stock code :
BSE Limited Phiroz Jheejhee Bhai Towers, Dalal Street, Fort, Mumbai – 400 001.
Luxembourg Stock Exchange : Societe te Bourse De Luxumbourg Societe p Binyrene/Rc B8222 8P 165 1- 2011 Luxumbourg.
Stock Code : 500329 (BSE)
ISIN No. : INE202A01022
Registrar and Share Transfer Agents:
In due compliance with SEBI norms, the Company has entrusted the share transfer work both physical as well as electronic transfers to the transfer agents mentioned below: M/s Cameo Corporate Services Ltd
5th Floor, Subramanian Building, No.1, Club House Road, Chennai - 600 002
Share Transfer and Investors Service System
A committee constituted for this purpose approves transfers in the physical form on fortnightly basis. The Board has also authorized its directors and executives to approve the transfer/transmission. As per the directions of SEBI, the company immediately on transfer of shares sends letters to the investors, in the prescribed format, informing them about the simultaneous transfer and dematerialization option available for the shares transferred in their names. The committee also looks into all the communications received from the shareholders a nd complaints received from the stock exchanges. There are no Pending Complaints as on 31.03.2015.
The Shares of the company are compulsorily traded in dematerialization form. The code number allotted by the National Securities Depository Limited (NSDL) and Central Depository Services limited (CDSL) to Pentamedia Graphics Limited is - INE202A01022.
Outstanding GDRs/Warrants or any convertible warrants
There are no outstanding convertible GDRs/Convertible warrants.
Section 72 of the Companies Act, 2013 provides the facility of nomination to shareholders. This facility is mainly useful for individuals holding shares in sole name. In the case of joint holding of shares by individuals, nomination will be effective only in the event of death of all joint holders.
Investors, especially those who are holding shares in single name, are advised to avail of the nomination facility by submitting the prescribed Form SH-13 for initial registration of nomination and Form SH-14 for cancellation and variation of nomination as per Companies Act, 2013 to the Company's R&TA.
Address for Correspondence
Registered Office: "TAURUS" No. 25, First Main Road United India Colony Kodamabakkam, Chennai-600 024 E-Mail: firstname.lastname@example.org Website : www.pentamedia.in /pentamediagraphics
For all matters relating to Shares
M/s. Cameo Corporate Services Limited
Fifth Floor, "Subramaniam Building" No.1, Club House Road Chennai - 600 002 Tel: (054) - 28460390 (5 lines) Fax: (054) - 28460129 Email: email@example.com Website : www.cameoindia.com