REPORT ON CORPORATE GOVERNANCE
The Directors present their Report on Corporate Governance as required by SEBI guidelines and listing Agreements:
Company’s Philosophy on Code of Governance :
The Company’s philosophy on Corporate Governance envisages transparency with integrity in all its dealings with its stakeholders including shareholders, employees, lenders and others.
Code of Conduct :
In tune with the corporate philosophy stated in the preceding para, the Board of Directors of the Company in its meeting held on 29th October, 2005 laid down a Code of Conduct for all the Board Members and Senior Management personnel of the Company in terms of the requirement of clause 49. The Code of Conduct is displayed at the Company’s website www.pudumjee.com. Affirmation regarding compliance with the Code of Conduct had been obtained from all Board members and senior management personnel of the Company. As required, a declaration duly signed by the Managing Director to the effect is appended.
BOARD PROCEDURE :
Board Meetings are held about four-five times a year. Detailed Agenda is sent to each Director well in advance of the meetings. The Directors are briefed at each Board Meeting regarding performance and working by the functional heads. In addition to matters statutorily requiring Board’s approval, all major decisions of policy, strategic formulations, capital expenditure, new investments, major accounting policies are considered by the committees and/ Board.
MANAGEMENT DISCUSSION AND ANALYSIS :
The Company operates in high value Specialty Paper segment, with large range of products including Glassine and Greaseproof Papers used for Packaging of food products, Bake Oven Paper for Bakery, Décor Papers for furniture and other laminating products, Laminating Paper for Flexible packaging, low grammage Fine Printing Paper for printing of Bible, etc. Whilst the segment of Specialty Papers being high value products fetch higher price, their manufacturing due to high cost inputs, quality compliance to meet customer expectation end up in higher cost posing a challenge meeting the competition, especially from imports.
The Company’s endeavour on continuous product development, minimizing costs and providing dependable delivery and service has enabled the Company to maintain its leadership in the market. This has also helped achieving much better financial performance. Viewed in this context, the Company’s output which virtually stagnated in the last few years has seen improvement in terms of higher sales at better prices despite unrestricted imports especially from China.
The Company does recognize and there is continuous thrust to improve upon costs, quality of the products and to innovate new products maintaining timely deliveries and with these positive attributes continuous improvement in performance is expected. The Company’s dependence on bought out fiber (imported pulp) including foreign exchange volatility, dependence on bought out energy due to lack of Co-generation facilities remain a challenge. Judicious mix of purchased bilateral power from independent Power Plants, captive Wind Turbine energy and overall energy management have considerably addressed these concerns. The Company has focused on developing new products to substitute plastic for Pharma and other applications for flexible packaging etc. Government policies, when announced, in restricting the use of plastic to help environment would considerably boost the Specialty Paper segment. The Company is conscious of its social and ecological obligations in fully complying with the statutory requirements. The Company is ISO 14001 compliant, FSC COC certified. The Company is in dialogue with Maharashtra Pollution Control Board for the future “Consent to Operate”, awaiting clearance.
The Company’s Real Estate business through a Partnership firm has been successfully operating, having completed its 5th building comprising of 94 flats in the “GREENS” complex. The 6th building has been started as an ambitious project of 16 stories comprising of 124 flats adding to the tall status of this complex.
The ‘Greenville’ project comprising of residential cum commercial complex taken up by the Company on its land of about 9000 Sq. Mtr. is awaiting statutory clearances.
The existing internal controls of the Company are periodically reviewed by the audit Committee and are considered quite adequate.
The Company employs about 600 employees and Company’s relations with the labour remained cordial.
Board of Directors :
The Board of Directors is composed of a Promoter Director, 3 Whole-time Directors, one of whom is the Managing Director and 6 Non Executive Independent Directors. The Executive chairman, Managing Director and the Whole-time Director conduct the day to day management of the Company subject to the supervision and control of the Board of Directors.
Appointment of Directors:
Pursuant to provision of Section 152(6) of the Companies Act, 2013, Independent Directors are not liable to retire by rotation and pursuant to section 149 their appointment has been approved by shareholders for five years, Mr. Ved Prakash Leekha, Director, retires by rotation at the ensuing Annual General Meeting, and being eligible, offer himself for re-appointment.
During the year Dr. Ashok Kumar was appointed as an additional director at the Board meeting held on 14th February, 2015.
Dr. Ashok kumar was also appointed by the Board of Directors as an Executive Director of the Company for a period of 5 (Five) years with effect from 2nd March, 2015, on the terms, as approved and recommended, by the Nomination & Remuneration Committee of the Board, subject to approval of the members of the Company and such other approvals as may be required. His appointment as the Executive Director is proposed for the approval of the members at the forthcoming Annual General Meeting
COMMITTEES OF DIRECTORS :
a) Audit Committee
The Audit Committee consists of three Independent non Executive Directors, they have vast experience and knowledge of corporate affairs and financial management and possess strong accounting and financial management expertise.
Pursuant to provisions of section 177 of the Companies Act, 2013 and Clause 49 of Listing Agreement, following revised terms of reference of this Committee are as under :
• the recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
• review and monitor the auditor’s independence and performance, and effectiveness of audit process;
• examination of the financial statement and the auditors’ report thereon;
• 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;
• monitoring the end use of funds raised through public offers and related matters;
• Seek information from any employee;
• To obtain outside legal and other professional advice;
• 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;
• Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
• Reviewing, 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.
• Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
• Reviewing, 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 utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
• Approval or any subsequent modification of transactions of the Company with related parties;
• Reviewing, with the management, performance of statutory and internal auditors, 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 there on;
• Reviewing the findings of any internal investigations by the internal auditors into matters where;
• Overseeing suspected fraud or irregularity or a 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 the 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 that function) after assessing the qualifications, experience and background, etc. of the candidate;
The Meetings of the Audit Committee are also attended by the Managing Director, Chief Finance Officer, the Statutory Auditors and the Internal Auditors.
The Chairman of the Committee, Mr. Bhupen Champaklal Dalal, was present at the Annual General Meeting held on 13th September, 2014, to answer queries of shareholders.
b) Nomination and Remuneration Committee
During the year Remuneration Committee was re-constituted by the Board of Directors as Nomination & Remuneration Committee and also adopted terms of reference stating role and scope of activities of the committee as prescribed under section 178 of Companies Act, 2013 and clause 49 (IV) of listing agreement.
The Nomination & Remuneration Committee comprises of Mr. Bhupendra Champaklal Dalal, Mr. Vinod Kumar Beswal and Mr. Venkateshwar Onkarmal Somani. Mr. Bhupendra Champaklal Dalal is Chairman of the Committee.
The detailed policy of the Company on directors’ appointment and remuneration including criteria for determining qualifications, of a director and other matters & Policy, relating to the remuneration for the directors, key managerial personnel and other employees is annexed as respective annexure No. 10 to the directors’ report in this annual report.
c) Stakeholders Relationship Committee
The shareholders’ Grievance Committee was renamed as Stakeholders Relationship Committee.
The said Committee has been re-constituted by the Board of Directors and it comprises of Directors Mr. Venkateshwar Onkarmal Somani, Mr. Arunkumar Mahabir Prasad Jatia, and Mr. Surendra Kumar Bansal, as its members.
Its terms of reference include review of complaints of shareholders/investors, Fixed deposit holders the Company’s performance on redressal of complaints and to look into the correspondence with Securities & Exchange Board of India (SEBI) and the Stock Exchanges concerning Investor’s Complaints.
During the year 2014-2015, the Company received 27 complaints from investors and No complaints were received through SEBI and No Complaint was received through Stock Exchange. The complaints received have been replied to and resolved. No complaints are pending for resolution. Mr. Venkateshwar Onkarmal Somani is the Chairman of the Committee. Company Secretary is the Compliance Officer of the Company.
COMPANY POLICIES :
During the year under review, the Board adopted the following policies/ programme :
(a) Policy on Related Party Transactions :
Pursuant to Clause 49 of the Listing Agreement and upon recommendation by the Audit Committee, the Board of Directors, at its meeting held on 1st November, 2014, approved and adopted the Policy on Related Party Transactions w.e.f. 1st November, 2014. This Policy can be viewed on the Company’s website viz. www.pudumjee.com.
(b) Policy on Material Subsidiaries :
Pursuant to Clause 49 of the Listing Agreement and upon recommendation by the Audit Committee, the Board of Directors, at its meeting held on 17th January, 2015 approved and adopted the Policy on Material Subsidiaries w.e.f. 17th January, 2015. This Policy can be viewed on the Company’s website viz. www.pudumjee.com.
(c) Whistle Blower Policy/Vigil Mechanisam:
Pursuant to Clause 49 of the Listing Agreement and upon recommendation by the Audit Committee, the Board of Directors, at its meeting held on 17th May, 2014, approved and adopted the Whistle Blower Policy w.e.f. 17th May, 2014. This Policy can be viewed on the Company’s website viz. www.pudumjee.com.
(d) Criteria For Selection Of Candidates For Senior Management And Members On The Board Of Directors :
Pursuant to Clause 49 of the Listing Agreement , the Board of Directors, at its meeting held on 1st November, 2014 approved and adopted the Criteria For Selection Of Candidates For Senior Management And Members On The Board Of Directors w.e.f. 1st November, 2014. This Policy can be viewed on the Company’s website viz. www.pudumjee.com.
(e) Familiarization programme for Independent Directors :
Pursuant to Clause 49 of the Listing Agreement the Board of Directors, the Familiarisation programme for Independent Directors can be viewed on the Company’s website viz. www.pudumjee.com.
(f) Policy on Board’s Diversity :
Pursuant to Clause 49 of the Listing Agreement the Board of Directors, at its meeting held on 1st November, 2014 approved and adopted the Board’s Diversity w.e.f. 1st November, 2014. This policy can be viewed on the Company’s website viz. www.pudumjee.com.
(g) Risk Policy & Procedures :
Pursuant to Clause 49 of the Listing Agreement the Board of Directors, at its meeting held on 17th May 2014 approved and adopted the Risk Policy & Procedures w.e.f. 17th May 2014. This policy can be viewed on the Company’s website viz. www.pudumjee.com.
(h) CSR Policy :
Pursuant to Clause 49 of the Listing Agreement the CSR Commitee, at its meeting held on 1st November, 2014 approved and adopted the CSR Policy w.e.f. 1st November, 2014. This policy can be viewed on the Company’s website viz. www.pudumjee.com.
a) As disclosed in the accompanying accounts, wherever required, full provision has been made relating to transactions with subsidiary and associate Companies.
b) There were no instances of non compliance by the Company, nor were any penalties or strictures imposed on the Company by Stock Exchanges, SEBI or any statutory authority on any matter relating to capital markets during the last three years.
c) No personnel has been denied access to the Audit Committee.
d) All the Mandatory requirements of the revised Clause 49 of the listing agreement have been complied with as detailed in this annexure. Non-Mandatory requirements have been complied with in so far as they relates to the appointment of remuneration committee and having unqualified financial statements.
e) In terms of listing agreement, the Company has its “Risk Management Policy and Mitigation measures” and is adopted by the Board. The Board/Audit Committee periodically reviews the risks and the measures to mitigate the same.
Means of Communication
a) The Company has published its quarterly and half yearly results giving the required particulars in the “Financial Express”/”Economic Times” and “Loksatta”/Maharashtra Times (Regional Language).
b) These results are also posted on Company’s website www.pudumjee.com.
c) The Company has created a dedicated E-mail ID for investor’s complaints viz. email@example.com
d) The Management Discussion and Analysis is part of the Annual Report of the Directors to the Shareholders of the Company.
e) The Code of conduct adopted by the Board of Directors is also posted on Company’s aforesaid website.
Dematerialization of Shares and Liquidity as on 31st March, 2015
Physical Form : 2.84%
Dematerialized Form : 97.16%
Trading in equity shares of the Company is permitted in dematerialized form only as per the notification issued by Securities and Exchange Board of India (SEBI). Non-promoters’’ share holding is 38.49%.
Disclosure of shares lying In the Unclaimed Suspense Account
Pursuant to clause 5A (II) in listing Agreement the details in respect of the shares lying in the unclaimed suspense account till March 31, 2015 is as under:
General Information for Shareholders:
Annual General Meeting
1. Date & Time “ Saturday,19th September, 2015 at 12.00 noon
2. Venue : of AGM Registered Office of the Company at Thergaon, Pune 411 033
3. Financial Year: 1st April to 31st March
Financial Calendar (Tentative)
1. Date of Book Closure : 8th September, 2015 to 19th September, 2015
2. Last date for receipt of Proxy Form 17th September, 2015 by 12.00 noon
3. Dividend Payment Date : 25th September, 2015
4. Board Meeting for Consideration of unaudited Within 45 days from the end of the each quarter results for first three quarters
5 Listing on Stock Exchanges and Scrip code:
Bombay Stock Exchange Ltd Phiroze Jeejibhoy Towers 25th Floor, Dalal Street, Mumbai 400 001. : 500343
The National Stock Exchange of India Ltd Exchange Plaza, 5th Floor, Plot No.C/1, G Block, Bandra-Kurla Complex, Bandra (E), MUMBAI 400 051. : PDUMJEPULP
Pune Stock Exchange Ltd. Shivaleela Chambers, 3rd Floor, R.B. Kumthekar Marg, 752, Sadashiv Peth Pune 411 030.
PADPU 2440 (Note : The Company Ceased to be listed on PSE , w.e.f. 15th April, 2015, on de-recognition of PSE by SEBI vide its order dated 13th April, 2015)
NSDL and CDSL Dematstock code : INE606A01024
6 E-mail ID for Investor Complaints : firstname.lastname@example.org
7 Registrars & Share Transfer Agents: Karvy Computershare Pvt. Ltd. Karvy Selenium Tower B, Plot No 31 & 32 Gachibowli, Financial District,Nanakramguda, Serilingampally Hyderabad – 500 032. Tel. : 91-40-44655000 Fax : 91-40-23420814 E-mail: email@example.com
This is a Common Agency looking after all the work related to share registry in terms of both physical and electronic connectivity (as per directions of SEBI) the details are as under :
The Shareholders/investors can approach M/s Karvy Computershare Pvt. Ltd. at any of its service centres throughout the country for any of their queries relating to share transfer, dividend etc. (Note : Shareholders holding shares in Electronic Mode should address all correspondence to their respective Depository Participants).
8 Any other inquiry: The Company Secretary, Pudumjee Pulp & Paper Mills Ltd., Thergaon, Pune 411 033. Tel. : 91-20-30613333 Fax. : 91-20-30613388 E-mail : firstname.lastname@example.org
9 Plant Location : Thergaon, Pune 411 033.
Listing fees for the year 2014-2015 have been paid in full to Pune Stock Exchange Ltd., Bombay Stock Exchange Ltd., Mumbai, and National Stock Exchange of India Ltd.
Share Transfer System:
The Share transfers in physical form are presently processed and the Share Certificates returned within a period of 15 days from the date of receipt subject to the documents being in order in all respects.
Certificate of Compliance:
The Certificate of Compliance with requirements of Corporate Governance by the Company, issued by M/s Khare & Company, the auditors of the Company is annexed.
On behalf of the Board of Directors,
Place : Mumbai
Dated : 30th May, 2015