REPORT ON CORPORATE GOVERNANCE
A) Company's Philosophy on Code of Governance
Your Company is complying with the principles of Corporate Governance introduced by SEBI through Clause 49 of the Listing Agreement in all respects. Your Company strongly believes that good corporate governance has an important role in enhancing shareholders value and management accountability. Company's guiding principles are focused on achieving the best standards of Corporate Governance and it is committed to attain the highest level of transparency and accountability in its dealings with investors, lenders, employees and all other stakeholders.
B) Board of Directors
The present strength of the Board of Directors is Ten, of which Eight are Non-Executive Directors, one Managing Director, one Whole Time Director and one Women Director. The Board members include two nominee of Punjab Energy Development Agency.
During the year under review, ten Board Meetings were held on 5th April, 2014, 9th May, 2014, 20th May, 2014, 30th May, 2014, 14th August, 2014, 19th August, 2014, 14th November, 2014, 5th December, 2014, 14th February, 2015 and 27th March, 2015. The composition of the Board of Directors and their attendance at the Board meetings during the year and at the last Annual General Meeting as also number of other directorships in other companies are as follows:
C) Committees of the Board
The Board had constituted three Committees, which are - (a) Audit Committee (b) Stakeholder's Relationship Committee (c) Nomination and Remuneration Committee:
I) Audit Committee
The scope of activities of the Audit Committee are as set out in Clause 49 of the Listing Agreement with the NSE & BSE Limited read with Section 177 of the Companies Act, 2013. The terms of reference of the Audit Committee are broadly as follows:
1. Oversignt 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;
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 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.
5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
6. Reviewing, with the management, the statement of uses/ application of funds raised through and 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 depositors, debenture holders, shareholder (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.
During the financial year ended on 31st March, 2015, 4 (four) meetings of the Audit Committee were held. The dates on which the meetings of the Audit Committee were held, are as under:
The Audit Committee invites such Executives as it considers appropriate to be present at its meetings. The Chief Financial Officer and Company Secretary attended all the meetings. The Statutory Auditors are invited to the meetings in which Quarterly/ Annual Accounts are considered. The Internal Auditors are also invited to the meetings in which Internal Audit Reports are discussed. The Company Secretary acts as the Secretary of the Committee.
II) Stakeholder's Relationship Committee
The Stakeholders' Relationship Committee has been constituted to specifically look into transfer/ transmission/ demat/ remat of shares, issue of duplicate/ split/ consolidation of share certificates, notices and to attend shareholder's complaints on SCORES system of SEBI or otherwise etc.
This Committee meets fortnightly or as may ve required. The Company Secretary of the Company is authorized to authenticate the transfers / transmissions / issue of duplicate share certificates etc. All requests for dematerialization of shares are processed and confirmed by Ms/s Alankit Assignments Limited. Registrars and Share Transfer Agents of the Company.
The role of the Nomination and Remuneration committee as set out in Clause 49 of the Listing Agreement and additional scope approved by the Board, inter-alia, include the following:
1. 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;
2. Formulation of criteria for evaluation of Independent Directors and the Board;
3. Devising a policy on Board diversity;
4. 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.
5. Assessing and reviewing the performance of Senior/ Top Management Employees of the Company and recommend their remuneration package as per Policy of the Company after considering the employment scenario, remuneration package of the industry and remuneration package of the managerial talent of other industries
Remuneration of the Chairman, Vice Chairman, Managing Director and Whole Time Director The Company has framed a Remuneration Policy, the brief terms of which are given hereunder:-
a) At the time of appointment or re-appointment, the Chairman, Vice Chairman, Managing Director and Whole Time Director shall be paid such remuneration as may be mutually agreed between the Company (which includes the Nomination & Remuneration Committee and the Board of Directors) and the respective Director within the overall limits as prescribed under the Companies Act, 2013 and rules made thereunder.
b) The remuneration shall be subject to the approval of the members of the Company in General Meeting.
c) The remuneration of the above said directors is broadly divided into fixed and variable component whereas the remuneration of Chairman consists of fixed components only.
d) The remuneration of the directors may also include Employee Stock Option Plans (ESOPs) as per the provisions of applicable laws.
e) The fixed compensation shall comprise salary, allowances, perquisites, amenities and retirement benefits. The variable component shall comprise of individual and company performance bonus.
f) In determining the remuneration (including the fixed increment and performance bonus) the Nomination & Remuneration Committee shall consider the following:
- The relationship of remuneration and performance benchmarks is clear;
- Balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals;
- Responsibility required to be shouldered by the above said Directors and the industry benchmarks and the current trends;
- The Company's performance vis-a-vis the annual budget achievement and individual performance vis-a-vis the Key Responsibility Area (KRAs) / Key Performance Indicators (KPIs).
g) Executive Directors are not entitled to sitting fees for attending meeting of directors.
Remuneration of Non-Executive Directors
The remuneration of Non Executive Directors shall be finalized considering the following:
They will be entitled to receive remuneration by way of sitting fees for attending meetings of the Board or its Committees at rates within the limits prescribed under the Companies Act, 2013 and rules made thereunder.
Remuneration of Key Managerial Personnel (KMP)/ Senior Management Personnel (SMP)
Key Managerial Personnel include Chief Financial Officer and Company Secretary appointed pursuant to the provisions of section 203(1) of the Companies Act, 2013 irrespective of the remuneration drawn by them.
Senior Management Personnel include the heads of Business Segments and functions to be specifically decided by the Nomination and Remuneration Committee, on the recommendation of the Chief Executive Officer (CEO
The pecuniary disclosure with regard to interested Directors
(a) Disclosures on materially significant related party transactions of the Company of material nature with the promoters, the Directors or the management, their subsidiaries or relatives, that may have potential conflict with the interests of the Company at large:
None of the transactions with any of related parties were in conflict with interests of the Company.
(b) Details of non-compliance by the Company, penalties, stricture imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to Capital Markets during the last three years.
I) CEO & MD/ CFO CERTIFICATION
In terms of Clause 49 of the Listing Agreement the certification of Managing Director and Chief Financial Officer on the Financial Statements and Internal controls relating to financial reporting has been obtained.
J) MEANS OF COMMUNICATION
i) The quarterly, half-yearly and annual audited financial results of the Company are sent to the Stock Exchanges immediately after they are approved by the Board. In addition, the Stock Exchanges are notified of any important developments that may materially affect the working of the Company. Disclosures with regard to shareholding pattern, change in major shareholding, quarterly Reconciliation of Share Capital Audit Report etc. are also sent to the Stock Exchanges as required under various Regulations. The results are normally published in Indian Express/Financial Express/ Business Standard/Mint and Punjabi Tribune/ Hindi Tribune/ Hindustan.
ii) Management Discussion and Analysis Report forms part of this Annual Report and is given separately. as Annexure-D
K) GENERAL SHAREHOLDER'S INFORMATION
i) 23rd Annual General Meeting Venue : The Institution of Engineers(India) Madhya Marg, Sector 19-A, Chandigarh
Date : 30th September, 2015
Tentative Financial Calendar
Audited Annual Results (2014-15) : May, 2015
Publication of Audited Results : --
First Quarter Results : August, 2015
Publication of Half Yearly Results : November, 2015
Third Quarter Results : February, 2016
Fourth Quarter Results: May, 2016
Audited Annual Results (2015-16) : May, 2016
iii) Book Closure
The register of members and share transfer books of the Company shall remain closed from 26th September, 2015 to 30th September, 2015 (both days inclusive).
iv) Listing on Stock Exchanges and Stock Codes
The names of the stock exchanges at which the equity shares of the Company are listed and the respective stock codes are as under:
Sr. No. Name of the Stock Exchange
1. BSE Limited : 507490
National Stock Exchange of India Limited : RANASUG
vii) Registrar and Transfer Agent
M/s. Alankit Assignments Limited, 205-208, Anarkali Market, Jhandewalan Extension,New Delhi-110 055.
viii) Share Transfer System
The Stakeholder Relationship Committee of the Company usually meets every fortnight to approve the transfer, transmission and issue of duplicate share certificates etc. The shares of the Company are traded in dematerialized form only.
x) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity - Nil
xi) Location of Plant Sugar and Power Unit:
i) Village Buttar Seviyan, ii) Village Belwara, Tehsil Baba Bakala, Tehsil & Distt. Moradabad, U.P. District Amritsar, Punjab
iii) Village Karim Ganj, Distillery Unit: Tehsil Shahabad, Village Lauhka, Tehsil Patti, Distt. Rampur, U.P. District Tarn Taran, Punjab.
xii) Address for Correspondence
RANA SUGARS LIMITED SCO 49-50, Sector 8-C, Chandigarh - 160 009 Tel.: 0172-2773422, 2540007, 2779565 & 2549217 E-mail : email@example.com
L) RE-APPOINTMENT OF DIRECTORS
Shri Balour Singh and Rana Karan Pratap Singh are liable to retire by rotation offer themselves for re-appointment as Directors. Brief particulars of these Directors are given below :
i) Shri Balour Singh, is a nominee director of Punjab Energy Development Agency. Presently he is working as Director with Punjab Energy Development Agency.
ii) Rana Karan Pratap Singh, is a promoter Director. He has done MBA. He has about 9 years of experience in industry.