1. Company's philosophy on Code of Governance
Puncom recognizes the ideals and importance of Corporate Governance and acknowledges its responsibilities towards all stakeholders including Government, employees, customers, suppliers, regulatory authorities and the shareholders. Puncom's Philosophy on Corporate Governance is to bestow high standards of transparency, fairness and accountability for performance at all levels and to ensure the best performance through professionalism, social responsiveness, business practices and maximization of operational efficiency. The Company endeavors to maximize the shareholders' value and to protect the interest of stakeholders. Moreover, being a Public Sector Undertaking the company's performance is subject to various Audits, viz., Statutory Audit, Internal Audit, CAG Audit, ISO Audit, Corporate Governance Audit, Secretarial Audit, etc.
2. Board of Directors
The present strength of the Board is eight directors; One executive director being Vice Chairman cum Managing Director, the second Er. A. K. Pathak being employee of the Company and six non-executive directors, of which four are independent directors, who are professional and/or have expertise in their respective functional areas. The Chairman of the company is non-executive. By virtue of the provisions of the Articles of Association of the company, more than half of the Board is ex-officio nominated by the holding company PICTCL (hereinafter referred to as Punjab Infotech). The names and categories of present directors (as on 12th August, 2015) are given here below:
*These Directors are nominees of Punjab Information and Communication Technology Corporation Limited (Our holding Company having 71.20% equity shares in our Company)
Following changes, in the constitution of Board of Directors, happened during the period under review upto 12th
Sh. Karan Avtar Singh, IAS was appointed as an Alternate Director in place of Sh. D.P. Reddy, IAS w.e.f. 28th October, 2014. However, he ceased as an Alternate Director w.e.f. 8th December, 2014.
Sh. Vikas Pratap, IAS has been appointed as Vice Chairman and Managing Director in place of Sh. D.K. Tiwari, IAS w.e.f. 2nd December, 2014.
Smt. Neena Singh was appointed as Independent Director on the Board of Puncom w.e.f. 31st March, 2015.
The name/nomination of Sh. D.P. Reddy, IAS, was withdrawn by Punjab Infotech and accordingly he ceased to be the Chairman/Director on the Board of Puncom w.e.f. 13th May, 2015. In his place, Sh. Anirudh Tewari, IAS was appointed as Director in the capacity of Chairman by Punjab Infotech w.e.f. 13th May, 2015.
CA. R.K. Nangia, Sr. ED and CS of Punjab Infotech retired from his services after attaining the age of superannuation and accordingly his name was withdrawn by Punjab Infotech w.e.f. 2nd July, 2015.
3. Board Procedure
Five Board Meetings were held during the financial year under report as detailed below out of which two meetings were adjourned due to lack of quorum. The gap between two meetings did not exceed four months i.e., the schedule of Board Meetings held during the year was in consonance with the requirements of Clause 49 of the Listing Agreement.
4. Independent Directors' Meeting
In accordance with the provisions of Clause 49(II)(B)(6)(a), the meeting of Independent Directors for the financial year 2014-2015 was held on 26th March, 2015. CA. Rajiv Dewan and Sh. V.P. Chandan, IRSSE attended the said meeting. The meeting was conducted for familiarization programme and training of Independent Directors, Review of performance of non-Independent directors and Board as a whole, Review the performance of the Chairperson of the company and to assess the quality, quantity and timeliness of flow of information between the company management and the Board. The weblink to the familiarization programme of independent directors is as follows :
5. Audit Committee
The Audit Committee of the company comprises of Sh. V. P. Chandan as Chairman, CA R. K. Nangia, CA Rajiv Dewan & CAAsish K. Bhattacharyya as Members. The constitution of Audit Committee meets the requirements as laid down under Section 177 of the Companies Act, 2013. The duly constituted committee met four times during the financial year 2014-15 i.e. 51st, 52nd, 53rd, 54th and 54th(Adj.) on 29th May, 2014, 12th August, 2014, 12th November, 2014, 13th February, 2015 and 18th February, 2015, respectively
The terms of reference stipulated by the Board to Audit Committee are as contained in Clause 49 of the Listing Agreement & Section 177 of the Companies Act, 2013 as on 31.03.2015. The terms of reference stipulated are as follows:
- Internal Control Systems
- Corporate Plans & Project-wise Analysis
- Delegation of Powers to VC & MD
- Status of Income Tax & Sales Tax Assessments
- Discussion on Internal Audit Report
- Income Tax Matters such as TDS, Returns, Disputed liability etc.
- Discussion on Personnel Policy
- Pending Audit Paras
- Appointment of Tax Auditor/Internal Auditors
- Review of Financial Results
- Financial Powers of MD
- Reports/Returns submitted to various bodies like Banks, Stock Exchanges, RBI etc.
- Discussion on Audit paras of AG Auditors in respect of Proprietary Audit
- Limited Review Report
- Post VRS manpower details
- Scrutiny of inter-corporate loans & investments
- Valuation of undertakings or assets of the company wherever necessary
- Recommendation for appointment, remuneration & terms of appointment of auditors of the company
- Approval or any subsequent modification of transactions of the company with related parties
- Review and monitor the auditor's independence and performance/ and effectiveness of audit process
- Monitoring the end use of funds raised through public offers and related matters
- Other terms of reference/ scope of Audit Committee shall be as notified by the appropriate authority from time to time or as directed by the Board of Directors of the Company from time to time.
6. Nomination & Remuneration Committee
The Company formed a Nomination and Remuneration Committee in its 177th Board Meeting held on 29th May, 2014 and the same was reconstituted in 182nd Board Meeting held on 28th May, 2015. Presently the committee comprises of Sh. V.P. Chandan, IRSSE (Retd.), CA Rajiv Dewan, Smt. Neena Singh who are Independent Directors and Sh. A. K. Pathak who is Whole Time Director.
The terms of reference stipulated by the Board to the Nomination and Remuneration Committee are as contained under sub-section (5) of section 178 of the Companies Act, 2013. The terms of reference stipulated are as follows:
- Identification of persons qualified to be directors and in senior management in accordance with the criteria laid down.
- Recommend to the Board appointment and removal of the directors apart from the nominee directors as proposed by the Government of Punjab and in the Senior Management.
- Evaluation of every director's performance.
- Formulation of criteria for determining qualifications, positive attributes and independence of a director.
- Recommendation of Remuneration policy for the directors, KMP and other employees.
- Other terms of reference/ scope of Nomination and Remuneration Committee shall be as notiied by the appropriate authority from time to time or as directed by the Board of Directors of the Company from time to time.
Details of Remuneration of Directors, Key Managerial Personnel and Senior Management:
The remuneration package and compensation for Directors (except for Sitting Fee), KMPs and Senior Officials shall be determined as per the service rules/pay scales/ terms and conditions of the appointment letter issued by/ of the Company and the limits and statutory requirements as prescribed under the Companies Act, 2013 from time to time.
The present Nomination and Remuneration Policy was adopted by the Company in its 182nd Board Meeting held on 28th May, 2015.
7. Risk Management Policy
The Risk Management structure conforms to the requirements of clause 49 of Listing Agreement and is formed to ensure the harmonious growth of the company and to maximize the net worth of the shareholders.
An integrated risk management system continuously identiies, monitors and manages Puncom's risks. The Audit Committee of the Board provides the overall policy guidelines. The committee also conducts periodic reviews of Puncom's Risk Management Policy, while the Board monitors and manages Puncom's risk management through quarterly risk reports to achieve above objectives.
8. Stakeholders' Relationship Committee
The Stakeholders' Relationship Committee (Formerly Shareholders/ Investors Grievances Redressal Committee) presently comprises of Sh. V.P. Chandan, IRSSE (Retd.), Non Executive Director as Chairman, CA R.K. Nangia & CA Rajiv Dewan as Members. During the Financial Year 2014-15 the Committee met on 29th May, 2014.
The terms of reference as on 31.03.2015 mandated by your Board to this committee, which are also in line with the statutory and regulatory requirements, are:
- Redressing Shareholders and Investors complaints/ grievances.
- Approving issue of duplicate share certificates and transfer of securities.
- Oversee the performance of Registrar & Transfer Agent/s.
- Recommending measures for overall improvement in the quality of services being provided to the shareholders/investors.
- Consider and resolve the grievances of security holders of the Company.
Other terms of reference/ scope of Stakeholder's Relationship Committee shall be as notified by the appropriate authority from time to time or as directed by the Board of Directors of the Company from time to time
9. Procedure at Committee Meetings
Company's Guidelines relating to board meetings are applicable to committee meetings as far as may be practicable. Each committee has the authority to engage outside experts, advisers to assist the committee in its work. Minutes of the proceedings of each committee meeting are placed before the Board for its perusal and noting.
11. Transfer of Unclaimed amounts to Investor Education & Protection Fund
During the year under review, there was no amount of unclaimed dividend to be credited to the Investor Education & Protection Fund, pursuant to section 125 of the Companies Act, 2013 & the Investor Education & Protection Fund (Awareness & Protection of Investors) Rules, 2001. However, there is an unclaimed amount of Rs.27,722/-pertaining to Buyback Offer made by the company in the year 2003 pertaining to ive shareholders lying in the Escrow Account maintained for the said purpose with Axis Bank, Mohali.
Mandatory/ Non-mandatory provisions of Clause 49
Your company is complying with the mandatory requirements as per Annexure IA and has not adopted any of the non-mandatory requirements as given in Annexure XIII to Clause 49 of the Listing Agreement.
The required disclosures under Clause 49 of the Listing Agreement are as follows :
Under Sub-Clause II (F) - Vigil Mechanism/Whistle Blower Policy:
The company formed a Vigil Mechanism Policy in its 179th Board Meeting held on 12th November, 2014 in accordance with the requirements of Clause 49(II)(F) and under Section 177 of the Companies Act, 2013. Sh. A.K.
Pathak, Executive Director had been appointed as Vigilance and Ethics Officer.
No personnel has been denied access to the audit committee during the Financial Year 2014-2015.
Under Sub-Clause V (D) - Material Subsidiary:
The company has no material subsidiary as defined in Sub-clause V (E) and thus no policy has been formulated to determine 'material' subsidiaries.
Under Sub-Clause VIII (A) - Related Party Disclosure:
The Company has formulated a policy on "materiality of related party transactions" and also on dealing with related party transactions, to be effective from 1st October, 2014. The policy takes into account various provisions on related party transactions mentioned in Clause 49 of the listing agreement and also in the Companies Act, 2013.
The weblink for the policy on dealing with related party transactions is <http://www.puncom.com/downloads/>
There is no Related Party Transaction, as required to be disclosed u/s 188(2), read with notification no G.S.R. 463
(E) dated 5th June, 2015 and Clause 49 of the Listing Agreement.
There is no material transaction entered into by the company with its promoters, the Directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the company at large. However, the company had leased a portion of its building to its holding Company M/s Punjab Information, Communication and Technology Corporation Limited but the same was at market rate/price only. Also, all compliances have been made by the company and no penalties/strictures have been imposed on the company by the Stock Exchange or SEBI or any other statutory authority, on any matter pertaining to Capital Markets, during the last 3 years.
Under Sub-Clause VIII (B) -Accounting Treatment:
The Company has prepared financial statements in accordance with applicable accounting standards. Further, there is no qualification in Independent Auditor's Report. The disclosure w.r.t. Auditor's opinion and Matter emphasized in Independent Auditor's Report is detailed in the Board's Report and the same has been done as per the past practice.
Under Sub-Clause VIII (C) - Remuneration to Directors:
a) All elements of remuneration package of individual directors summarized under major groups, such as salary, benefits, bonuses, stock options, pension, etc.: Basic, DA, HRA, Medical Reimbursement, LTA, Conveyance, Driver Allowance, Retention allowance, Leave Encashment, PF and Gratuity.
b) Details of ixed component and performance linked incentives, along with the performance criteria: Only Fixed Component is there and that is as per the terms and conditions of letter of appointment.
c) Service contracts, notice period, severance fees: as per Service Rules of the company and terms and conditions of the respective appointment letters.
d) Stock option details, if any- and whether issued at a discount as well as the period over which accrued and over which exercisable: NIL.
Under Sub-Clause VIII (C) (2)-Disclosure on Remuneration of Directors
None of the non-executive directors are getting remuneration from the company except for the sitting fee which is within the prescribed limits.
Under Sub-Clause VIII (D) - Management:
Management and Discussion Analysis is an integral part of this Annual Report. Senior Management Disclosure has also been obtained and the disclosure is a part of the annual report.
14. Code of Conduct for Prevention of Insider Trading
The Company adopted revised Code of Conduct for Prevention of Insider Trading to be effective from 15th May, 2015 and the same is in place. The said code has been uploaded on Puncom's website under the link-<http://www.puncom.com/downloads/2015/CODE%20OF%20CONDUCT%20FOR%20PREVENTION%20OF%25> 20INSIDER%20TRADING.pdf
Declaration on compliance with Code of Conduct for Senior Management and Board
The necessary declaration from MD/CEO under Clause 49(II)(E)(2) has been obtained. The Code of Conduct for Senior Management and Board has been uploaded on Puncom's website at <http://www.puncom.com/> downloads/
CEO/CFO Certification under Clause 49(IX):
The necessary certificate from CEO/CFO under the said clause has been obtained.
16. Disclosure under Clause 5A.I (g) of Listing Agreement
Following information have been given with respect to Listing Agreement under clause 5A.I. Though the information asked for is for shares issued pursuant to Public Issues or any other issue which remains unclaimed & are lying in the escrow account.
However, the company came up with a Buy-Back offer in 2003 and as on date there are 419 shares lying in the escrow account with M/s Karvy Computer Share Pvt. Ltd., Hyderabad as required in the Buy-back guidelines & the company is providing the information on the same pattern.
General Shareholders Information
A. Annual General Meeting (Date, time and venue)
Date : 29th of September, 2015
Time : 1100 Hrs.
Venue : B-93, Phase VIII, Indl. Area SAS Nagar, (Chandigarh) - 160 071
B. Financial Calendar 1st April 2014 to 31st March 2015
C. Date of Book Closure/ Record Date 23rd September, 2015 to 29th September, 2015 (Both days inclusive)
D. Dividend Payment Date N.A.
E. Listing on Stock Exchange : The Bombay Stock Exchange Limited, Mumbai (BSE)Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001
Note : Annual Listing Fee for the financial year 2014-15 has been paid to the Stock Exchange, Mumbai
F. Stock Code :
Bombay Stock Exchange
Scrip Code 500346
Registrar and Share Transfer Agents (Both for Physical & Dematerialised categories)
Alankit Assignments Limited DP & RTA, Alankit House 2E/21, Jhandewalan Extension, New Delhi - 110055.
Share Transfer System
For expeditious processing of share transfers, the Board of Directors of the Company has delegated the power of share transfer to Share Transfer Committee. The shares for transfers received in physical mode by the company are considered/ approved by the committee at regular intervals (fortnightly) and transferred promptly.
L. Outstanding GDRs/ADRs or any Convertible instruments
The company has not issued any GDRs/ADRs or any Convertible instruments.
M. Puncom's Building Locations
B-91, B-93 & A-39. C-134 & C-135 (Given on Lease) Phase-VIII, Industrial Area, S.A.S. Nagar (Chandigarh) - 160 071 - PUNJAB.
N. Name, Designation and Address of the Compliance Officer/ Address for Correspondence
CS Madhur Bain Singh Company Secretary B-91, Phase VIII, Industrial Area, S.A.S. Nagar (Chandigarh) - 160 071 - PUNJAB. Phone : +91-0172-2237142. Fax : +91-0172-2237125, 3046919 Email : email@example.com Exclusive Email id : firstname.lastname@example.org (as per the provisions of the Listing Agreement)