CORPORATE GOVERNANCE REPORT
Company's philosophy on Code of Governance
Corporate Governance is the system by which Companies are directed and controlled. It is notjust corporate management, it is something much broader to include a fair efficient and transparent administration to meet certain well-defined objectives. We firmly believe that Board Independence is essential to bring objectivity and transparency in management and in the dealings. It is imperative for us to manage our business affairs in the most fair and transparent manner with a firm commitment to our values. Corporate Governance enables a corporation to compete more efficiently and prevent fraud and malpractices within organization. Our Corporate Governance framework is a reflection of our culture, our policies, our relationship with stakeholders and our commitment to values. It ensures that we make timely disclosures and share accurate information regarding our financials and performance, as well as the leadership and governance of the Company. Accordingly, we also seek to ensure that our performance is driven by integrity. This is vital to gain and retain the trust of our stakeholders.
The Securities and Exchange Board of India (SEBI) amended the Listing Agreement effective from October 1,2014 to bring in additional corporate governance norms for listed entities. These norms provide for stricter disclosures and protection of investor rights, including equitable treatment for minority and foreign shareholders.
The amended rules required companies to get shareholders' approval for related party transactions, establish whistleblower mechanisms, elaborate disclosures on pay packages and have at least one woman director on their boards. The amended norms are aligned with the provisions of the Companies Act, 2013, and are aimed to encourage companies to 'adopt best practices on corporate governance'.
The Board of Directors has adopted 'Corporate Governance Code' for the Company which is a statement of practices and procedures to be followed by the Company. The copy of the code is available on Company's website www.whyprism.com
Board of Directors
The Current policy is to have an appropriate mix of independent and executive directors to maintain the independence of Board and to separate the functions of governance and management.
As on 31st March, 2015, the board consists of 7 members, three of whom are Independent Directors, two are Executive Directors, one is Non-executive Director & one is a Managing Director. The composition of the Board is in conformity with Clause 49 of the Listing Agreement entered into with Bombay Stock Exchange (BSE). The Chairman of the Board is an independent director and hence l/3rd of the members of Board as per the said clause consist of non-executive directors. Following is the composition of Board of Directors of the Company:
• Dr. Nirmal Jain - Chairman & Independent Director
• Mr. Alok Pathak- Managing Director
• Mr. V. Chandrashekar - Non Executive Director
• Mr. Christof Anderi-Whole-Time Director & Chief Financial Officer**
• Mr. Saurabh Dani- Whole-Time Director
• Mrs. Ranjana Gupta- Independent Director
• Mr. Atul Pradhan- Independent Director
** Mr. Christof Anderi was a non-executive director of the Company. In the Board Meeting held on 30th September, 2014, he has been appointed as a Whole-Time Director and Chief Financial Officer of the Company subject to approval of shareholders in the forthcoming general meeting of the Company
Changes during the financial year (2014-2015) in the composition of Board of Directors of the Company:
• Dr. Ajay Sharma, Independent Director has resigned from the Board with effect from 19th January, 2015.
• Mr. Atul Pradhan has been appointed as Additional Director who will act as an Independent Director of the Company with effect from 13th February, 2015.
• Mrs. Ranjana Gupta has been appointed as Additional Director who will act as an Independent Director of the Company with effect from 20th March, 2015.
• Dr. Ramesh Subramaniam, Non- Executive Director has resigned from the Board with effect from 16th June, 2014
Appointment and Tenure
The Directors of the Company are appointed by Members at the General Meetings. In accordance with the Articles of Association of the Company, all Directors, except the Managing Director and Independent Directors of the Company, step down at the Annual General Meeting each year and, if eligible, offer themselves for re-election. The Managing Director of the Company is appointed for a term of five years as per the requirement of the statute. The Executive Directors on the Board serve in accordance with the terms of their contract of service with the Company. As regards the appointment and tenure of Independent Directors, following is the policy adopted by the Board:
• The Company has adopted the provisions with respect to appointment and tenure of Independent Directors which are consistent with the Companies Act, 2013 and Listing Agreement.
• The Independent Directors will serve a maximum of two terms of five years each.
• The Company would not have any upper age limit of retirement of Independent Directors from the Board and their appointment and tenure will be governed by provisions of the Companies Act, 2013.
Our definition of 'Independence' of Directors is derived from Clause 49 of the Equity Listing Agreement and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, all Non-Executive Directors other than Mr. Chandrashekar are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013.
The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The calendar of meetings is communicated to the Directors to enable maximum participation. However, in case of a special and urgent business need, the Board's approval is taken by passing resolutions by circulation, as permitted by law, which is noted and confirmed in the subsequent Board meeting.
The notice of Board meeting is given well in advance to all the Directors. The Agenda of the Board / Committee meetings is set by the Company Secretary in consultation with the Managing Director of the Company. The Agenda is circulated a week prior to the date of the meeting. The Agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision.
During the Financial Year ended 31st March, 2015, nine Board meetings were held on 4th April 2014,27th May 2014, 8th & 13th August 2014, 1st & 30th September 2014, 13th November 2014,13th February 2015,20th March 2015.The maximum interval between any two meetings was well within the maximum allowed gap of 120 days. The necessary quorum was present for all the meeting convened during the year ended 31st March, 2015.
The normal business of the Board includes:
• Framing and overseeing progress of the Company's annual plan and operating framework;
• Reviewing financial plans of the Company;
• Reviewing quarterly and annual business performance of the Company;
• Reviewing the Annual Report and accounts for adoption by the Members;
• Reviewing the progress of various functions and businesses of the Company;
• Reviewing the functioning of the Board and its Committees;
• Reviewing the functioning of the subsidiary companies;
• Considering and approving declaration / recommendation of dividend;
• Reviewing the details of significant development in human resources and industrial relations front;
• Reviewing details of foreign exchange exposure and steps taken by the management to limit the risks of adverse exchange rate movement;
• Reviewing compliance with all relevant legislations and regulations and litigation status, including materially important show cause, demand, prosecution and penalty notices, if any;
• Reviewing Board Remuneration Policy and individual remuneration packages of Directors;
• Advising on corporate restructuring such as merger, acquisitionjoint venture or disposals, if any;
• Appointing Directors on the Board and Members of Management Committee;
• Reviewing details of risk evaluation and internal controls;
• Reviewing reports on progress made on the ongoing projects;
• Monitoring and reviewing Board Evaluation framework.
Separate Independent Directors' Meetings
During the year a separate meeting of the independent directors was held inter-alia to review the performance of non-independent directors and the board as a whole.
Directors' Induction and Familiarization
The provision of an appropriate induction programme for new Directors and ongoing training for existing Directors is a major contributor to the maintenance of high Corporate Governance standards of the Company. Managing Director and the Company Secretary are jointly responsible for ensuring that such induction and training programmes are provided to Directors. The Independent Directors, from time to time request management to provide detailed understanding of any specific project, activity or process of the Company. The management provides such information and training either at the meeting of Board of Directors or otherwise.
The induction process is designed to:
a) Build an understanding of Prism Informatics, its businesses and the markets and regulatory environment in which it operates;
b) Provide an appreciation of the role and responsibilities of the Director;
c) Fully equip Directors to perform their role on the Board effectively; and
d) Develop understanding of Company's people and its key stakeholder relationships.
Upon appointment, Directors receive a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments.
In addition to the extensive induction and training provided as part of the familiarization programme, the Independent Directors are also taken through various business and functional sessions in the Board meetings including the Board meetings to discuss strategy.
Committees of the Board
The Board Committees play a crucial role in the governance structure of the Company and have been constituted to deal with specific areas / activities which concern the Company and need a closer review. The Board Committees are set up under the formal approval of the Board to carry out clearly defined roles which are considered to be performed by members of the Board, as a part of good governance practice. The Board supervises the execution of its responsibilities by the Committees and is responsible for their action. The minutes of the meetings of all Committees are placed before the Board for review. The Board Committees can request special invitees tojoin the meeting, as appropriate
The Board has currently established the following Committees
A. Audit Committee
The audit committee of the Company is constituted in line with the provisions of Clause 49 of the Listing Agreement entered into with Bombay Stock Exchange read with Section 177 of the Act. The Audit Committee is headed by Dr. Nirmal Jain and has Mr. Alok Pathak & Mr. Atul Pradhan as its members. During the year Mr. Atul Pradhan was appointed as a Member of the Committee with effect from 13th February, 2015. All the members of the Committee have relevant experience in financial matters
The Audit Committee of the Company is entrusted with the responsibility to supervise the Company's internal controls and financial reporting process and inter alia performs the following functions:
• Overseeing the Company's financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible;
• Reviewing and examination with management the quarterly financial results before submission to the Board;
• Reviewing and examination with management the annual financial statements before submission to the Board and the auditors' report thereon;
• Review management discussion and analysis of financial condition and results of operations;
• Scrutiny of inter-corporate loans and investments made by the Company;
• Reviewing with management the annual financial statements
• Reviewing, approving or subsequently modifying any Related Party Transactions in accordance with the Related Party Transaction Policy of the Company;
• Approving the appointment of Chief Financial Officer after assessing the qualifications, experience and background, etc. of the candidate;
• Recommending the appointment, remuneration and terms of appointment of Statutory Auditors of the Company and approval for payment of any other services;
• Reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process;
• Reviewing management letters / letters of internal control weaknesses issued by the Statutory Auditors;
• Discussing with Statutory Auditors, before the audit commences, on the nature and scope of audit as well as having post-audit discussion to ascertain area of concern, if any;
• Reviewing with management, Statutory Auditors and Internal Auditor, the adequacy of internal control systems;
• Recommending appointment, remuneration and terms of appointment of Internal Auditor of the Company;
• Reviewing the adequacy of internal audit function and discussing with Internal Auditor any significant finding and reviewing the progress of corrective actions on such issues;
• Evaluating internal financial controls and risk management systems;
• Valuating undertaking or assets of the Company, wherever it is necessary;
• Reviewing the functioning of the Whistle Blowing mechanism;
The Audit Committee also reviews the functioning of the Code of Business Principles and Whistle Blower Policy of the Company and cases reported thereunder. The recommendations of audit committee were duly approved and accepted by the Board.
The meetings of Audit Committee are also attended by the Statutory Auditors and Internal Auditor as special invitees. The Company Secretary acts as the Secretary to the Committee. The minutes of each Audit Committee meeting are placed and confirmed in the next meeting of the Board. The Audit Committee also meets the internal and external auditors separately, without the presence of Management representatives.
The Audit Committee met four times during the Financial Year ended 31st March, 2015 on 27th May, 2014, 13th August, 2014, 13th November, 2014, and 13th February, 2015.
B. Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises of Dr. Nirmal Jain, Mr. Atul Pradhan and Mrs. Ranjana Gupta as members of the Committee. The Nomination and Remuneration Committee met twice during the Financial Year ended 31st March, 2015 on 1st September, 2014 and 30th September, 2014. The committee was reconstituted on 20th March, 2015 on account of resignation of Dr. Ajay Sharma from the board.
The role of Nomination and Remuneration Committee is as follows:
• Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;
• Formulation of criteria for evaluation of Independent Directors and the Board;
• Devising a policy on Board diversity;
• Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.
Board Membership Criteria
The Board of Directors are collectively responsible for selection of a member on the Board. The Nomination and Remuneration Committee of the Company follows a defined criteria for identifying, screening, recruiting and recommending candidates for election as a Director on the Board. The criteria for appointment to the Board include:
• Composition of the Board, which is commensurate with the size of the Company, its portfolio, geographical spread and its status as a listed Company;
• Desired age and diversity on the Board;
• Size of the Board with optimal balance of skills and experience and balance of Executive and Non-Executive Directors consistent with the requirements of law;
• Professional qualifications, expertise and experience in specific area of business; balance of skills and expertise in view of the objectives and activities of the Company;
Avoidance of any present or potential conflict of interest;
• Availability of time and other commitments for proper performance of duties;
Personal characteristics being in line with the Company's values, such as integrity, honesty, transparency, pioneering mindset.
Nomination and Remuneration Policy:
Nomination and Remuneration Committee has recommended to Board policy titled as "Nomination and Remuneration Policy" for adoption by Board as per Section 178 of Companies Act, 2013 and clause 49 (iv) of the Listing Agreement entered into by the Company with Bombay Stock Exchange where the shares of the company are presently listed.
OBJECTIVE AND PURPOSE OF THE POLICY:
The objective of the Nomination and Remuneration Committee is to help the board to ensure that members take into consideration following for appointment and payment of remuneration to Directors, Key Managerial Personnel and Senior Management:
• Oversee the nomination and appointment of Directors, Key Managerial Personnel and Senior Management, and monitor their performance.
• The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully.
• Relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
• Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the company and its goals.
Details of Remuneration of Executive Directors for the Financial Year ended 31st March, 2015:
During the year Company has not paid remuneration to any of the Executive Directors except Mr. V. Chandrashekar who has been paid remuneration of Rs. 14, 50,000 for the period 01st April, 2014 to 31st July, 2014 in the capacity of Whole-Time Director of the Company. However in the Board Meeting held on 8th August, 2014, Mr. V. Chandrashekar has resigned as Whole-Time Director and continues to be a non executive director on the Board of the Company.
* Dr. Ramesh Subramanian has resigned from the position of Non-Executive Director with effect from 14th June 2014
** Mr. Atul Pradhan was appointed as Additional Director of the Company who will act as an Independent Director with effect from 13th February, 2015 and he has attended all Board meetings from the date of appointment.
**** Mrs. Ranjana Gupta was appointed as Additional Director of the Company who will act as an Independent Director with effect from 20th March, 2015
A. Whistle Blower Policy/vigil Mechanism:
Company has adopted a Whistle Blower Policy, as part of vigil mechanism to provide appropriate avenues to the Directors and Employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the fundamental business principles of the Company. The Company has provided dedicated e-mail address email@example.com for reporting such concerns and Mr. V. Chandrashekar, Non-Executive Director has been appointed as "Ethics Officer" to redress genuine concerns as mentioned above. Alternatively, employees can also send written communications to the Company. The employees are encouraged to voice their concerns by way of whistle blowing and all the employees have been given access to the Audit Committee. The Company Secretary is the designated officer for effective implementation of the policy and dealing with the complaints registered under the policy. All cases registered under the Whistle Blower Policy of the Company, are reported to the Committee of Directors and are subject to the review of the Audit Committee. The process to be adopted by the Directors and Employees to redress their concerns is available on the website of the Company www.whyprism.com/investor/CorporateGovernance/VigilMechanism
B. Code of Conduct:
The Board of Directors is responsible for ensuring that rules are in place to avoid conflict of interest by the Board members and the Management Committee. The Board has adopted the Code of Conduct for members of Board and Senior Management Team. The Code provides that the Directors are required to avoid any interest in contracts entered into by the Company. If such an interest exists, the Directors are required to make disclosure to the Board and to abstain from discussion, voting or otherwise influencing the decision on any matter in which the concerned Director has or may have such interest. The members of the Board and the Management Committee annually confirm the compliance of the Code of Conduct to the Board. A copy of the said Code of Conduct is available on the website of the Company www.whyprism.com/ investor/Corporate Governance/Code of Conduct-Prism. In addition, members of the Board and Management Committee also submit, on an annual basis, the details of individuals to whom they are related and entities in which they hold interest and such disclosures are placed before the Board. Transactions with any of the entities referred above are placed before the Board for approval. Details of all Related Party Transactions are placed before the Audit Committee on quarterly basis.
C. Policy on dealing with Related Party Transactions:
In line with requirement of the Companies Act, 2013 and Equity Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is also available at Company's website at www.whyprism.com/investors/CorporateGovernance/RelatedParty Transactions Policy. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. This policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions for transactions which are of repetitive nature and / or entered in the ordinary course of business and are at Arm's Length.
D. Insider Trading Code:
The Company has instituted mechanism to avoid Insider Trading and abusive self-dealing. In accordance with the SEBI Regulations as amended, the Company has established systems and procedures to restrict insider trading activity and has framed Insider Trading Code. The Insider Trading Code of the Company prohibits the Directors of the Company and other specified employees dealing in the securities of the Company on the basis of any unpublished price sensitive information, available to them by virtue of their position in the Company. The objective of this Code is to prevent misuse of any unpublished price sensitive information and prohibit any insider trading activity, in order to protect the interest of the shareholders at large. The Board of Directors of the Company have adopted a new Insider Trading Code, in line with new SEBI (Prohibition of Insider Trading) Regulations, 2015. The details of dealing in Company's shares by Specified Employees (which include members of the Management Committee and Directors) are placed for intimating the Board on quarterly basis. The Code also prescribes sanction framework and any instance of breach of code is dealt with in accordance with the same. A copy of the Insider Trading Code of the Company is made available to all employees of the Company and compliance of the same is ensured. The Insider Trading Code is available on the website of the Company www.whyprism.com/investor/CorporateGovernance/ Insider Trading Code.
Secretarial audit report
The Company has undertaken Secretarial Audit for the year 2014-15 which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made under the Act, Listing Agreement and Regulations and Guidelines prescribed by the Securities and Exchange Board of India and Foreign Exchange Management Act, 1999. The Secretarial Audit Report is part of this Annual Report.
General Shareholders Information:
i) Company Registration Details:
Company is registered under thejurisdiction of Mumbai - ROC in the State of Maharashtra. Corporate Identity Number (CIN) allotted to the Company by the Ministry of Corporate Affairs (MCA) is L67120MH1983PLC029483
ii) Date, time and venue of the Annual General Meeting:
Date: 22nd September, 2015
Time: 4.00 P.M.
Place: Four Points by Sheraton, Plot 39/1, 6 To 15, Sector 30A , Vashi, Navi Mumbai, Mumbai, Maharashtra 400705, India
iii) Financial Year: April l,2014toMarch31,2015
iv) Results for the quarter ending:
June 30,2013 - 13th August, 2014
September 30,2013 - 13th November, 2014
December 31,2013 - 13th February, 2015
March 31,2014 - 29th May, 2015(Audited Financials)
Annual General Meeting - 22nd September, 2015
v) Date of Book Closure:
The share transfer book of the Company will be closed from Tuesday, 15th September, 2015 to Tuesday, 22nd September, 2015 (both days inclusive)
vi) Listing on Stock Exchange:
Bombay Stock Exchange, Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai-400 001, Tel 022-22721233/34 Fax: 02222723121. Stock Code: 505530.
The Annual listing fees have been paid and there is no outstanding amount as on date. Demat ISINNumber for NSDL and CDSL: INE389J01028
vii) Dematerialization of Equity Shares:
The Equity Shares of the company are admitted in the following depositories of the Country under the International Securities IdentificationNumber(ISIN)INE389J01028.
This number is required to be quoted in each transaction relating to dematerialized Equity shares of the Company.
Name of Depository : National Securities Depository Limited
Address : Trade World, A Wing, 4th & 5th Floors, Kamala Mills Compound, Senapathi Bapat Marg Lower Parel, Mumbai - 400 013
Name of Depository : Central Depository Services (India) Limited
Address : Phiroze Jeejeebhoy Towers,16th Floor, Dalai Street, Mumbai - 400 001
b. Registrar and Transfer Agents:
Sharex Dynamic India Pvt Ltd, Unit 1, Luthra Industrial Premises, Safed Pool, Andheri Kurla Road, Andheri (East), Mumbai - 400 072 Tel-28515644, Fax-28512885
E-mail- firstname.lastname@example.org email@example.com
c. Share Transfer System:
Managing Director and/or Company Secretary have been empowered by the Board for approving transfer/ transmissions of shares. The Company's registrar Sharex Dynamic (India) Private Limited have adequate infrastructure to process the share transfer applications received within 15 days from the date of lodgment of transfer subject to the transfer instrument being valid and complete in all respects.
xi) Dematerialization of shares and liquidity:
The Shares of the Company form part of the compulsory demat segment. The company has established connectivity with both Depositories viz, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) through the Share Transfer Agent. As on 31st March 2015,97.49%of Paid up Capital of the Company comprising 24,317,492 equity shares of Re 1/- each has been dematerialized.
xii) Plant Locations:
The Company has following operating divisions:
Registered office: Prism Informatics Limited is located at C-912, BSEL Tech Park, Opposite Vashi Railway Station, Sector 30 A, Vashi, Navi Mumbai-400705
Operative Divisions located at
Registered Office Address
Pune : Unit 602, Sixth Floor, Wing 2-Cluster C,EON FREE ZONE, Plot No.l,S.No.77,Kharadi MIDC, Knowledge Park, Pune-411 014.
02. Europe Gewerbestrasse 5,6330 Cham/ Zug, Switzerland
03. USA Six Concourse Parkway, Fifth Floor, Atlanta, GA 30328, USA
04 Germany Sciencepark2,DE-66123 Saarbrucken, Germany
05. Singapore 31, Cantonment Road, Singapore- 089747.
06. Dubai Unit No.2502, Fortune Tower Plot No.Cl, Jmeriah Lakes Towers, Dubai, United Arab Emirates.
07. Seychelles Suite 3, 1st Floor, La ciotat Building, Mont Fleuri, PO Box 438, Mahe, Seychelles
Address for Correspondence:
Shareholders may correspond on all matters to the address mentioned below:
1. Prism Informatics Limited: C-912,BSEL Tech Park, Opposite Vashi Railway Station, Sector 30 A, Vashi, Navi Mumbai -400 705. Contact Number: 022-61371000.
2. Sharex Dynamic (India) Pvt. Ltd: 1st Floor, 44-E, M Vasanti Marg, Andheri-Kurla Road, Safed Pool, Andheri(E), Mumbai 400072. Tel No. 22702485, Fax No. 22641349