REPORT ON CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges in India, compliance with the requirements of Corporate Governance is set out below:
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
PRUDENTIAL SUGAR CORPORATION LIMITED ("PSCL"/the "Company") is committed to implement sound Corporate Governance practices with a view to bring about transparency in its operations and maximize shareholder value. The Company's core philosophy on the code of Corporate Governance is to ensure:
• Fair and transparent business practices;
• Accountability for performance;
• Compliance of applicable statute;
• Transparent and timely disclosure of financial and management information;
• Effective management control and monitoring of executive performance by the Board; and
• Adequate representation of promoter, executive and independent directors on the Board.
2. BOARD OF DIRECTORS
The Board of Directors along with its Committees provides leadership and guidance to the Company's management and supervises the Company's performance. As at March 31, 2015, the Board of Directors ("Board") comprises of Six Directors, of which 1 is Executive 1 is Non-Executive Directors, and remaining 4 (Four) are independent directors. The Chairman of the Board is Non Executive promoter.
During the year ended March 31, 2015, 7 Board Meetings were held as against the minimum requirement of four meetings. The maximum time gap between any of two consecutive meetings did not exceed four months.
The dates on which the Board meetings were held are: 20.05.2014, 30.05.2014, 14.08.2014, 26.08.2014, 15.11.2014, 26.11.2014 and 14.02.2015
3. COMMITTEES OF THE BOARD
The Company currently has the following Committees of the Board:
a. Audit Committee;
b. Nomination and Remuneration Committee; and
c. Stakeholders Relationship, Grievance and Share Transfer Committee.
a. Audit Committee
• The Audit Committee was constituted by the Board with 3 Independent Directors with Independent Director as its Chairman.
• The Head of Finance and Accounts, Statutory Auditors and Internal Auditors attend the Audit Committee meetings on invitation and the Company Secretary acts as the Secretary of the Committee.
• The minutes of the meetings of the Audit Committee are circulated to all the members of the Board.
P Audit Committee meetings :
• Four Audit Committee Meetings were held during the year ended March 31, 2015. The maximum time gap between any of the two meetings was not more than four months.
• The Audit Committee meetings were held on 30th May 2014, 14th August 2014, 15th November 13, 2014 and 14th February, 2015.
P Terms of Reference:
The terms of reference of the Audit Committee are as under:
1. oversee the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
2. recommendation for appointment, remuneration and terms of appointment of auditors of the company;
3. approval of payment to statutory auditors for any other services rendered by the statutory auditors;
4. review with the management, the annual financial statements and auditor's report thereon before submission to the Board for approval, with particular reference to:
a. matters required to be 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 for the same
c. major accounting entries involving estimates based on the exercise of judgment by management
d. significant adjustments made in the financial statements arising out of audit findings
e. compliance with listing and other legal requirements relating to financial statements
f. disclosure of any related party transactions
g. qualifications in the draft audit report
5. Review with the management, the quarterly financial statements before submission to the board for approval;
6. Review with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
7. Review and monitor the auditor's independence and performance, and effectiveness of audit process;
8. Approval or any subsequent modification of transactions of the company with related parties;
9. Scrutiny of inter-corporate loans and investments;
10.Valuation of undertakings or assets of the company, wherever it is necessary;
11. Evaluation of internal financial controls and risk management systems;
12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
13. 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;
14. Discussion with internal auditors of any significant findings and follow up there on;
15.Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
17.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;
18.To review the functioning of the Whistle Blower mechanism;
19.Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee;
21. Recommendation for appointment, remuneration and terms of appointment of auditors of the company;
22. Review and monitor the auditor's independence and performance and effectiveness of audit process;
23. Examination of the financial statement and the auditors' report thereon;
24. Approval or any subsequent modification of transactions of the company with related parties;
25. Scrutiny of inter-corporate loans and investments;
26. Valuation of undertakings or assets of the company, wherever it is necessary;
27. Evaluation of internal financial controls and risk management systems;
28. Monitoring the end use of funds raised through public offers and related matters;
29. The Audit Committee may call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the internal and statutory auditors and the management of the company; and
30. The Audit Committee shall have authority to investigate into any matter in relation to the items specified (as mentioned at S.No. 21 to 28 above) or referred to it by the Board and for this purpose shall have power to obtain professional advice from external sources and have full access to information contained in the records of the company.
31 .The auditors of a company and the key managerial personnel shall have a right to be heard in the meetings of the Audit Committee when it considers the auditor's report but shall not have the right to vote.
b. Nomination and Remuneration Committee
• The Nomination and Remuneration Committee was constituted by the Board with 3 Independent Directors with Independent Director as its Chairman.
• The minutes of the meetings of the Nomination and Remuneration Committee are circulated to all the members of the Board.
P Brief description of terms of reference
• 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;
• carry on the evaluation of every director's performance;
• formulation of the criteria for determining qualifications, positive attributes and independence of a director;
• 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; and
• any other matter as the Board may decide from time to time. P Nomination and Remuneration Committee meetings
• During the period from April 1, 2014 to March 31, 2015, Nomination and Remuneration Committee Meetings were held on 2 times 14.08.2014, and 14.02.2015,
P Nomination and Remuneration policy
• The compensation of the executive directors comprises of fixed component and commission. The compensation is determined based on the remuneration prevailing in the industry and the performance of the Company. The remuneration package of the executive directors is periodically reviewed and suitable revision is recommended to the Board by the committee.
• The Non-executive directors are paid sitting fees for attending meetings of Board/ Committee.
p Terms of Reference
• Stake Holders Relationship, Grievance and Share Transfer Committee oversees and reviews
all matters connected with the securities transfers and also looks into redressal of shareholders
complaints like transfer of shares, non-receipt of annual reports/dividends etc.
• The Committee oversees the performance of the Registrar and Transfer agents and
recommends measures for overall improvement in the quality of investor services.
P Name and designation of Compliance Officer:
Mr. Sandeep Kumar Daga, Company Secretary
Email-id for Investor Grievances: email@example.com
P Number of Shareholders complaints received so far.:
DATA FROM SECRETARIAL DEPT
• During the year ended March 31, 2015, the Company has received and resolved 218 complaints and there were no pending complaints as at the year end.
• Number of complaints not resolved to the satisfaction of shareholders is Nil.
a. Related party transactions
During the year ended March 31, 2015, there were no materially significant related party transactions, which had potential conflict with the interests of the Company at large. The transactions with related parties are disclosed in the Notes to the Annual Accounts.
b. Details of non-compliance, etc.
A Statement of Compliance with all Laws and Regulations as certified by the Managing Director and Whole Time Director is placed at periodic intervals for review by the Board.
The Company is in the process of filing relevant documents/information for the financial year 2014-15 with the Stock Exchanges in compliance with Clause 41 and Clause 47 (C) as the listing of the Company is under suspension.
c. Disclosure of Accounting Treatment
The Company has followed the accounting standards in the preparation of its financial statements.
d. Whistle Blower policy
The Board of Directors of the Company had adopted the Whistle Blower Policy. Employees can report to the Management concerned unethical behavior, act or suspected fraud or violation of the Company's Code of Conduct policy.
The Audit Committee reviews periodically the functioning of whistle blower mechanism.
No employee has been denied access to the Audit Committee. A copy of the Whistle Blower Policy is also hosted on the website of the Company: www.prudentialsugar.com
The chairman of the Audit Committee had not received any complaint during the Financial Year ended 31st March, 2014.
e. Board Disclosures - Risk Management
The Company has constituted Risk Management Committee and Risk Management Policy which has been adopted by the Board of Directors. Currently, the Company's risk management approach comprises of the following:
• Governance of Risk
• Identification of Risk
• Assessment and control of Risk
The risks have been prioritized through a company-wide exercise. Members of Senior Management have undertaken the ownership and are working on mitigating the same through co-ordination among the various departments, insurance coverage, security policy and personal accident coverage for lives of all employees.
The Company had appointed a Risk Officer and also put in place the risk management framework, which helps to identify various risks cutting across its business lines. The risks are identified and are discussed by the representatives from various functions.
The details of Risks identified and mitigation measures undertaken are presented to the Board of Directors and the Audit Committee on a quarterly basis. The Board and the Audit Committee provides oversight and review the risk management policy periodically.
A detailed note on the risks is included in the Management Discussion and Analysis annexed to the Directors' Report.
f. Code of Conduct
The Board has laid down a Code of Conduct covering the ethical requirements to be complied with covering all the Board members and Senior Management Personnel of the Company. An affirmation of compliance with the code is received from them on an annual basis.
g. CEO and CFO Certification
The Managing Director and the CFO have given a Certificate to the Board as contemplated in Clause 49 of the Listing Agreement and is separately annexed.
h. Proceeds from public issues, rights issues, preferential issues, etc.
During the year ended March 31, 2015, there were no proceeds from public issues, rights issues, preferential issues, etc.
i. Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause
The Company has complied with all the mandatory requirements of the Clause 49 of the Listing Agreement. Separate persons to the post of Chairman and Executive Director and Reporting of Internal Auditors to the Audit Committee have been adopted from non-mandatory requirements.
j. Details about familiarization of programme
Senior management personnel of the Company make presentations to the Board Members on a periodical basis, briefing them on the operations of the Company, plans, strategy, risks involved, new initiatives, etc. and seek their opinions and suggestions on the same. Also, the Directors are briefed on their specific responsibilities and duties that may arise from time to time. Any new Director who joins the Board is presented with a brief background of the Company, its operations and is informed of the important policies of the Company including the Code of Conduct for Directors and Senior Management Personnel and the Code of Conduct for Prevention of Insider Trading, Policy on Related Party Transactions, Policy on Remuneration, Policy on material events as per Clause 36 of the Listing Agreement, Whistle blower policy, and Risk Management Policy.
The Statutory Auditors and Internal Auditors of the Company will make a presentation to the Board of Directors with regard to provisions of Companies Act, 2013 and amended Clause-49 of the Listing Agreement and its impact on the Company. Further Statutory Auditors and Senior Management will make a presentation to the Board of Directors on regulatory changes while approving the Quarterly Financial Results.
k. Related Party Transactions policy.
In terms of Clause 49 of the listing agreement, the Board of Directors of the Company have adopted a policy to determine Related Party Transactions.
The policy is placed on the website of the company www.prudentialsugar.com
6. MEANS OF COMMUNICATION
a. Quarterly results: Quarterly financial results have been submitted with Stock exchanges
b. News releases, presentations, etc.
Official news releases along with quarterly results are displayed on the Company's website: www.prudentialsugar.com
The Company presentations made to the investors/ analysts, if any, are placed on the Company's website: www.prudentialsugar.com
c. Management Discussion and Analysis (MDA) Report
The report on MDA is annexed to the Directors' Report and forms part of this Annual Report.
7. GENERAL SHAREHOLDER INFORMATION
a. Annual General Meeting: 24th Annual General Meeting
Time: 02:00 p.m.
Venue: HMT Bearings Officers' Colony Community Function Hall, IV Avenue Road, HMT Bearings Officers' Colony, Sainikpuri, Hyderabad - 500 094,
b. Dates of Book Closures:
24th December, 2015 to 28th December 2015 (both days inclusive)
c. Dividend Payment Date : -
d. Listing on Stock Exchange:
Company's equity shares are listed at:
Name and Address of the Stock Exchange Scrip Code
BSE Limited 500342
Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai 400 001
The listing fee for the year 2014-15 has been paid to the above stock exchange.
e. Market Price Data:
High and low during each month from April 1, 2014 to March 31, 2015. : Not Applicable since the company is under suspension of trading
f. Registrar & Share Transfer Agents:
(for Shares held in both Physical and Demat mode)
M/s.R&D Infotech Private Limited
1st Floor, 7A, Beltala Road, Kolkata - 700 026. West Bengal. Phones: 033 - 2419 2641/2642
g. Share transfer System and Dematerialization of Shares:
SEBI vide its Circular No. CIR/MIRSD/8 /2012, dated July 5, 2012 has reduced the time-line for registering the transfer of shares to 15 days. The Physical share transfers are to be processed and the share certificates to be returned to the shareholders within a maximum period of 15 days from the date of receipt, subject to the documents being valid and complete in all respects.
Any transferee who wishes to dematerialize the shares may approach a Depository participant along with a duly filled Demat Request Form, who shall, on the basis of the Share Certificate, generate a demat request and send the same to the Registrar and Share transfer Agents (RTA). On receipt, the Depository Registrar confirms the request.
All requests for Dematerialization of shares are processed and the confirmation is given to the respective Depositories, i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), within 21 days of receipt.
j. Dematerialisation of Shares & Liquidity
The Company's shares are available for dematerialisation with both the Depositories, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
18535289 equity shares were dematerialised representing 51.84% of the total paid up equity share capital of the Company as on March 31, 2015.
k. Plant Location:
"Prudential Nagar" Koppedu Post, Nindra Mandal, Chittoor District 517 587, AP, India Ph: +91-8576 271093, 271202, Fax: +91-8576 270201
l. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity:
The Company has not issued any GDRs/ADRs/Warrants and there are no outstanding warrants or any Convertible instruments.
m. Address for Correspondence
Prudential Sugar Corporation Limited "Akash Ganga", Plot No. 144, Srinagar Colony, Hyderabad - 500 073. Telangana State
Phones: 040-23746451; Fax: 040-66822871
Email: firstname.lastname@example.org Website: www.prudentialsugar.com
On behalf of the Board of Directors
for Prudential Sugar Corporation Limited
Place : Hyderabad
Date : 28.09.2015