REPORT ON CORPORATE GOVERNANCE
(Pursuant to Clause 49 of the Listing Agreement)
Company's philosophy on Code of Governance
Corporate Governance contains a set of principles, process and systems to be followed by Directors, Management and all Employees of the Company for increasing the shareholders' value, keeping in view interest of other stakeholders. While adhering to the above, the Company is committed to integrity, accountability, transparency and compliance with laws in all dealings with the Government, customers, suppliers, employees and other stakeholders.
1. Board of Directors
(a) Composition of the Board
The Board of Directors comprised of four Directors as on 31st March, 2015. On 9,h March, 2015 one of the Independent Director Mr. D. Venkatratnam has submitted resignation and was accepted by the Board. On 25* March, 2015, Mrs. Ratnakumari Cherukuri was appointed as Woman Director. Out of these four directors, there is one Executive Vice-Chairman, two Independent Directors and one women Director.
(b) Number of Board meetings
During the financial year 2014-15, nine meetings of the Board of Directors were held on 6"1 April, 2014; 30" May, 2014; 3* June, 2014; 12th August, 2014; 29th September, 2014; 13th November, 2014; 11* February, 2015; 9,h March, 2015 and 25,h March, 2015.
1. Directorships held in foreign companies, private limited companies, one person companies and Companies under Section 25 of the Companies Act, 1956 / under Section 8 of the Companies Act, 2013 have not been considered.
2. For the purpose of reckoning the limit on committee positions, chairmanship / membership of the Audit Committee and the Stakeholders Relationship Committee are considered.
3. Mr. Sivayya Dasari who was co-opted as Additional Director on 17th October, 2013 and Mr. Vishnu Basudeo Bajaj who was co-opted as Additional Director on 06* April, 2014 were appointed as Directors by the members at the Annual General Meeting held on 29* September, 2014. At present they are Independent Directors of the Company.
Mr. C. K. Rao and Mrs. Cherukuri Ratnakumari, being wife and husband, are related to each other.
No other Director is related to any other Director of the Company within the meaning of Section 2(77) of the Companies Act, 2013 and rules thereof
Meeting of Independent Directors:
The meeting of Independent Directors was held on Wednesday, 11* February, 2015 to discuss, inter-alia:
(a) the performance of Non Independent Directors and the Board asawhole;
(b) the performance of the Chairman of the Company, taking into account the views of Executive Director and Non Executive Directors;
(c) the quality, quantity and timeliness of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All Independent Directors were present at the meeting.
Criteria for performance evaluation of Directors is specified under the heading Nomination and Remuneration Committee mentioned in 3 below.
Familiarisation programme for Independent Directors:
Independent Directors of the Company are made aware of their role, rights and responsibilities at the time of their appointment, through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.The Independent Directors get the opportunity to visit the factory of the Company, to enable them to have full understanding of manufacturing operations and processes and the Industry in which it operates.
All Directors of the Company are updated as and when required, of their role, responsibilities and liabilities. The Company holds Board Meetings at the Registered Office and also at locations, where the Company has textile units.The Board of Directors has complete access to the Information within the Company; Presentations are made regularly before the meetings of the Board of Directors and the Audit Committee, where Directors have an opportunity to interact with senior management personnel. Presentations cover, inter-alia, quarterly and annual results, business strategies, budgets, review of internal audit, risk management and such other areas as may arise from time to time.
Independent Directors have the freedom to interact with the management of the Company, Interactions happen during the meetings of the Board or Committees, when senior management personnel of the Company make presentations to the Board.
In February, 2015 and March, 2015 a training programme was conducted for all Directors and Key Managerial Persons of the Company. The training programme covered, inter-alia, aspects such as legal compliance management, corporate governance and role of Independent Directors, liability of Directors under direct and indirect taxes, corporate and labour laws, SEBI Act and regulations.
1. Audit Committee (a) Composition
The Audit Committee comprises of three directors, all being Independent Directors till 8th March, 2015, (till Mr. Venkata Ratnam submitted his resignation, he was the Chairman of Audit Committee) and two Independent Directors from 9* March, 2015. From 9th March, 2015 onwards Mr. Vishnu Basudeo Bajaj is appointed as Chairman of the Audit Committee by the Board.
1. Mr. Venkata Ratnam D ceased to be member of the Audit Committee with effect from 9* March, 2015.
2. Mrs. Ratnakumari Cherukuri was appointed as member of the Audit Committeewith effect from 25* March, 2015.
The Chairman and Executive Vice-Chairman and Chief Financial Officer attended the meetings of the Audit Committee. The Statutory Auditor and Internal Auditors were invited and attended the meetings of the Audit Committee.
Mr. Venkata Ratnam D, Chairman of the Audit Committee, was present at the 33rd Annual General Meeting of the Company held on Monday, 29* September, 2014The Audit Committee has been vested with the following powers:
a) To investigate any activity within its terms of its reference;
b) To seek information from any employee;
c) To obtain outside legal or other professional advice;
d) To secure attendance of outsiders with relevant expertise, if it considers necessary.,
(a) Terms of Reference
The terms of reference of the Audit Committee include the matters specified under Clause 49(lll) of the Listing Agreement as well as those specified in Section 177 of the Companies Act, 2013 and inter-alia, includes the following:-
Oversight of the Company's financial reporting process and the disclosures of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending the appointment, remuneration and terms of appointment of auditors of the Company.
Examination of the financial statement and auditor's report thereon.
Approving payment to statutory aud iters for any other services rendered by the statutory auditors.
Reviewing with the Management, the annual financial statements and auditors' report thereon before submission to the Board, for approval, with particular reference to:
a) Matters required being included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013.
b) Changes, if any, in accounting policies and practices and reasons forthe same.
c) Major accounting entries involving estimates based on the exercise of judgement by Management.
d) Significant adjustments made in the financial statements arising out of the audit findings.
e) Compliance with listing and other legal requirements relating to financial statements.
f) Disclosure of any related party transactions.
g) Qualification in draft audit report.
Reviewing with the Management, the quarterly financial statements before submission to the Board for approval.
Reviewing with the Management, the statement of uses / applications of funds raised through an issue (public issue, rights issue, preferential issue, etc.) the statement of funds utilised for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency, monitoring the utilisation of proceeds of a public or rights issue and making appropriate recommendations to the Board to take up steps in this matter.
Reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process. Approval or any subsequent modification of transactions of the Company with related parties. Scrutiny of inter-corporate loans and investments.
Valuation of undertakings or assets of the Company, wherever it is necessary. Evaluation of internal financial controls and risk management systems.
Reviewing with the management, performance of statutory and internal auditors and adequacy of the internal control systems.
Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
Discussion with internal auditors of any significant findings and follow up thereon.
Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board.
Discussion with statutory auditors before the audit commences about nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
To look into the reasons for substantial defaults in the payment to the depositors, debenture-holders, shareholders (in case of non payment of declared dividends) and creditors.
To review the functioning of the whistle blower mechanism.
Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging the function) after assessing the qualifications, experience and background, etc, of the candidate.
Reviewing the following information:
a. Management discussion and analysis of financial condition and results of operations;
b. Statement of significant related party transactions submitted bythe management;
c. Management letters / letters of internal control weaknesses issued bythe statutory auditors;
d. Internal audit reports relating to internal control weaknesses and
e. The appointment, removal and terms of remuneration of the Chief Internal Auditor.
Carrying out any other function as mentioned in terms of reference of the Audit Committee, as amended from time to time bythe Companies Act, 2013 and the Listing Agreement.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee (earlier known as Remuneration Committee) comprises of three Directors, all the Directors are Independent Directors. Till 8th March, 2015 Mr. Venkata Ratnam D was the Chairman of the Nomination and Remuneration Committee as he submitted his resignation with effect from 9* March, 2015. Mr. Vishnu Basudeo Bajaj was appointed as Chairman of Nomination and Remuneration Committee with effect from 9th March, 2015. Mrs. Ratnakumari Cherukuri was appointed as member of the Committee with effect from 25th March, 2015.
During the financial year 2014-15 three meetings of the Nomination and Remuneration Committee were held on 12,hAugust,2014, IS^November^OMand 11,hFebruary,2015.
1. Mr. Venkata Ratnam has ceased to be Chairman and member of Nomination and Remuneration Committee with effect from 9* March, 2015.
2. Mrs. Ratnakumari Cherukuri has been appointed as Member of the Nomination and Remuneration Committee with effect from 25* March, 2015.
The Board has, on the recommendation of the Nomination and Remuneration Committee adopted the Nomination and Remuneration Policy for selection and appointment of Directors, Senior Management and their remuneration.
The terms of reference of the Nomination and Remuneration Committee are as follows:
(a) Identify persons, who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down.
(b) Recommend to the Board the appointment and / or removal of Directors and senior management.
(c) Carry out evaluation of every Director's performance.
(d) Formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the Directors, key managerial personnel, senior management personnel and other employees.
(e) Perform such functions as may be assigned by the Board of Directors from time to time, and
(f) Perform such functions as required as per the provisions of the Companies Act, 2013, rules thereto and the listing agreement.
Criteria for performance evaluation of Directors:
Performance evaluation of each Director was carried out based on the criteria as laid down by the Nomination and Remuneration Committee.
Criteria for performance evaluation included aspects such as attendance at the meetings, participation and independence during the meetings, interaction with management, role and accountability, knowledge and proficiency.
Further, performance evaluation of the Executive Vice - Chairman was also based on business achievements of the Company.
1. Subsidiary Company
The Company does not have any subsidiary company.
a) Related Party Transactions
As per AS-18 the related party transactions are reflected in notes to accounts.
The Board of Directors has adopted the policy on related party transactions. The copy of the same has been uploaded and is available at the website of the Company, viz. www.psmspinning.com
b) Disclosure of Accounting Treatment
While preparing the financial statements, the Company has followed all relevant accounting standards.
c) Risk Management
The Company has a risk management policy and the same is reviewed periodically by the Board of Directors.
d) Whistle Blower Policy
The Board of Directors has adopted the Whistle Blower Policy. The policy has provided a mechanism for Directors, Employees and other persons dealing with the Company to report to the Chairman of the
7. CEO / CFO Certification
A certificate signed by the Executive Vice - Chairman and the Chief Financial Officer confirming compliance of Clause 49(IX) of the Listing Agreement was placed before the meeting of the Board of Directors held on 29* May, 2015.
8. Stakeholders Relationship Committee:
The Company has stakeholders Relationship Committee, which comprises of three Directors, viz. Mr. V. B. Bajaj, Mr. C. K. Rao and Mr. D. Sivayya.
Mr. V. B. Bajaj acts as the Chairman of the Committee. The Committee has been constituted to consider and resolve the grievances of investors like transfer of shares, non receipt of annual reports, etc. The details of transfer / transmission of shares are placed before the meeting of the Board of Directors on a regular basis.
The Compliance Officer can be contacted at:-Mr. C. K. Rao, Executive Vice-Chairman Priyadarsini Limited Corporate Office: Satyanarayana Enclave, Icon Block, 3rd Floor, Madinaguda, Hyderabad - 500 049 Phone No. 040- 40253333 The Company has designated an exclusive email ID firstname.lastname@example.org
It is to ensure that queries, if any, received from shareholders are attended within a minimum period of time.
There are no outstanding investor grievances pending as on 31s' March, 2015-08-13
One Special Resolution was passed. To re-appoint Mr. C. K. Rao (DIN: 00018525), as Executive Vice Chairman of the Company for a period of three years with effect from 07* June, 2014 without any remuneration.
10. Means of Communication
In compliance with the requirements of the Listing Agreement, the Company regularly intimates financial results to BSE Limited immediately after they are approved by the Board of Directors, the financial results of the Company are also available on the website, viz. www.psmspinning.comQuarterly and yearly results are published in national and local dailies such as Financial Express (English newspaper) and Prajasakti (Telugu newspaper), having wide circulation. Since the results of the Company are published in national and regional newspapers, the results are not sent individually to each member.The financial results and official news releases of the Company are also displayed on the website of the Company, viz.www.psmspining.com
1. General Shareholders' Information
Date, Time and Place 29* September, 201410.00 a.m.
Venue : Survey No. 744 & 745, Factory Premises, Sadasivepet, Sadasivpet Mandal, Medak-502 291
Financial year :
1st April, 2014 to 31st March, 2015 During the year under review, the results were announced as under –
First quarter 12th August, 2014
Second quarter 13,h November, 2014
Third quarter 11,h February, 2015
Annual 29* May, 2015
Dates of Book Closure : 26.09.2015 to 29.09.2015 (Both days inclusive)
Listing on stock exchange BSE Limited
Stock Code 503873
Company's ISIN : INE165C01019
Mode of Transfer of Shares : Compulsory dematerialization Annual General Meeting Financial Year 32nd Annual General Meeting 2012-13 Annual General Meeting Financial Year 33rt Annual General Meeting 2013-14
Registrar and Share Transfer Agent
The Company entrusted the entire work relating to processing of transfer of securities to M/s. XL Softech
Systems Limited, a SEBI Registered and Share Transfer Agent. The Registrar and Share Transfer Agent can be contacted at-XL Softech Systems Limited Plot No. 3, Sagar Society, Road No. 2, Banjara Hills, Hyderabad-500 034 Ph: No. 040-23545913, Fax No. 040-23553214, Email: xlfield @gmail.com
Share Transfer System
The applications for transfer of shares in physical form are processed by the Registrar and Share Transfer Agent of the Company and are returned after the registration of transfers within 15 days from the date of receipt, subject to the validity of all documents lodged with the Company. The applications for transfer of shares under objection are returned within a week. The transfer applications are approved at regular intervals.
Income Tax PAN mandatory for Transfer / Transmission / Deletion / Transposition of securities held in physical form
The Securities and Exchange Board of India (SEBI) vide its Circular Nos. MRD/DoP/ Cir-05/2009 dated 20* May, 2009 and SEBI/MRD/DoP/SE/RTA/Cir-03/2010 dated T January, 2010 has made it mandatory to furnish a copy of Income Tax PAN Card to the Company / the Registrar and Share Transfer Agent for Transfer / Transmission / Deletion / Transposition of securities held in physical form.
Equity Shares in electronic form
As on 31st March, 2015,89.75 percent of paid-up equity share capital of the Company was held in electronic form.
Procedure for dealing with unclaimed shares in terms of Clause 5A of the Listing Agreement
Pursuant to SEBI Circular No. CIR/CFD/DIR/10/2010 dated 16* December, 2010 and Clause 5A of the Listing Agreement, the Company had sent reminder letters to those shareholders, whose share certificates have returned undelivered by the postal authorities due to insufficient / incorrect information and are lying with the Company. These share certificates will be sent to eligible shareholders, if these shareholders submit necessary documents to the Company.
Nominations in respect of shares held in physical form
Individual shareholders holding shares singly or jointly in physical for can nominate a person in whose name the shares shall be vested in the event of death of the registered shareholder(s). The prescribed nomination can be obtained from the Company or the Registrar and Share Transfer Agent.
Nomination facility for shares held in electronic form is available with the depository participant as per the bye laws and business rules applicable to NSDL and CDSL.
12. Outstanding GDR/ADR/Warrants or any convertible instruments, conversion date and impact on equity
There are no convertible instruments outstanding as on 31" March, 2015 for conversion into equity shares.
13. Factory Locations
1. Unit-Sadasivpet, Medak District
2. Wind Mill - Ramagiri, Anantapur District
3. Gas Power Project - Y. Kttapalli Village, P. Gannavaram Mandal, East Godavari Dist. Andhra Pradesh -533240