The Company's philosophy on corporate governance endeavours attainment of the highest levels of transparency, accountability and equity in all facets of its operations and in all its interactions with stakeholders, including shareholders, employees, cane growers, lenders and the Government.
2.BOARD OF DIRECTORS
A Composition and category of Directors
The composition of the Board is in conformity with the provisions contained in the Companies Act 2013 and Clause 49 of the Listing Agreement. As on 31st March 2015, the Board consists of an Executive Chairman, a Managing Director, a Joint Managing Director, an Executive Director, seven Independent Directors, and a Non-Executive and Non-Independent Woman Director.
None of the Directors on the Board is in more than 10 Committees or Chairman of more than 5 Committees across all the companies in which he/she is a Director, as per the disclosures made by the Directors.
Of the seven Independent Directors, 4 Independent Directors were appointed by the Members at the 52nd Annual General Meeting of the Company held on 30th September 2014. The remaining 3 Independent Directors were appointed by the Board, subject to the approval of the Members at the ensuing Annual General Meeting. The Company has issued formal letters of appointment to the Independent Directors and the terms of their appointment are disclosed on the Company's website www.sakthisugars.com. These Independent Directors have confirmed that they satisfy the criteria of independence as stipulated under Section 149(6) of the Companies Act 2013.
During the year, the Independent Directors had a separate meeting on 14.2.2015 without the participation of Non-Independent Directors and the management team.
The Executive Chairman, Managing Director and Joint Managing Director are related to each other as brothers.
b.Attendance of each Director at the Board Meetings and the last Annual General Meeting
During the financial year ended 31st March 2015, the Board met six times on 30.5.2014, 15.7.2014, 14.8.2014, 30.9.2014, 12.11.2014 and 14.2.2015. The gap between two meetings did not exceed 120 days. The details of attendance of each Director at the Board Meetings and at the last Annual General Meeting held on 30.9.2014 and the number of other Directorships and Committee Chairmanship/Membership as on 31st March 2015 are given below:
1.Excluding directorships in private limited companies and Section 8 company.
2.Includes only Audit Committee and Stakeholders Relationship Committee.
c.Familiarisation programme for Independent Directors
The familiarisation process followed by the Company includes briefing about the Board's Composition and conduct, roles, rights, responsibilities of Directors, nature of the industry, details about the Company, Group and its culture. The familiarisation process is disclosed at the Company's weblink www.sakthisugars.com/investorinformation/ familiarisationprog.pdf.
D .Performance Evaluation
In terms of the requirements of the Companies Act 2013 and Clause 49 of the Listing Agreement, the Board carried out annual performance evaluation of its own performance and performance of individual directors, including the Chairman, and of the Committees formed by the Board. These evaluations are based on structured questionnaires. Similarly Independent Directors reviewed the performance of the Chairman and of the Non-Independent Directors.
e. Code of Conduct
The Board has laid down a code of conduct for all Board Members and Senior Management personnel of the Company and the same has been posted on the website of the Company www.sakthisugars.com. All Board Members and Senior Management personnel have confirmed compliance with the code and an Annual Declaration signed by the Managing Director in this regard is attached.
3. AUDIT COMMITTEE
a. Composition and Meetings
The Audit Committee was reconstituted on 30th September 2014. The Audit Committee comprises the following Independent Non-Executive Directors as its members:
Sri C. Rangamani, Chairman
All members of the Audit Committee are financially literate. The minutes of the Audit Committee Meetings are placed before the meetings of the Board of Directors. The Chairman of the Audit Committee attended the last Annual General Meeting.
b. Terms of reference:
The Audit Committee assists the Board in fulfilling its oversight responsibilities in monitoring financial reporting, reviewing internal financial controls and the statutory and internal audit activities.
The terms of reference of the Audit Committee are as per the guidelines set out in the listing agreement with the stock exchanges and section 177 of the Companies Act, 2013. The role and terms of reference of the Audit Committee include the following:
1.Examination of the financial statement and draft auditors' report.
2.Oversight of the Company's financial reporting process and disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
3.Recommendation for appointment, remuneration and terms of appointment of statutory auditors and cost auditors of the Company.
4.Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
5.Discuss and review, with the management and auditors, the annual / quarterly financial statements before submission to the Board, with particular reference to:
a.Matters required to be included in the Directors' Responsibility Statement in the Board's report in terms of sub-section (3)(c) of Section 134 of the Companies Act 2013.
b. Disclosure under 'Management Discussion and Analysis of Financial Condition and Results of Operations'.
c. Any changes in accounting policies and practices and reasons for them.
d. Major accounting entries involving estimates based on exercise of judgment by management.
e. Significant adjustments made in the financial statements arising out of audit findings.
f. Qualifications in the draft audit report.
g. Disclosure of any related party transactions.
h. Compliance with listing and other legal requirements relating to financial statements.
I .Review the statement for uses/applications of funds by major category on a quarterly basis, with the financial results and annually the statement of funds utilized for purposes other than as mentioned in the offer document / prospectus /notice. Such review shall be conducted till the full money raised through the issue has been fully spent.
6.Review the financial statements, in particular, the investments made by the unlisted subsidiary company, if any.
The matters reviewed and recommended in the meetings of the Audit Committee were appraised to the Board by the Chairman of the Audit Committee for its approval. All the recommendations of the Audit Committee were accepted by the Board.
a. Composition and Meetings:
The Nomination and Remuneration Committee comprises the following Independent Non-Executive Directors:
1.Sri S.S.Muthuvelappan, Chairman
3.Sri C. Rangamani
The Nomination and Remuneration Committee met 4 times during the year on 14.8.2014, 30.9.2014, 12.11.2014 and 16.3.2015 and all the members of the Committee were present in all the meetings. The Chairman of the committee was present at the last Annual General Meeting of the Company.
b. Terms of reference:
The terms of reference of the Committee includes the following:
1.Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down;
2.Recommend to the Board about appointment and removal of Directors and senior management personnel.
3.Carry out evaluation of every Director's performance;
4.Formulate the criteria for determining qualifications, positive attributes and independence of a Director;
5.Recommend to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel (KMP) and other employees and to ensure the following:
i.the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
ii.relationship of remuneration to performance is clear and meets the appropriate benchmarks; and
iii.remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting the short and long term performance, objectives appropriate to the working of the Company and its goals.
6.Review and recommend the compensation and variable pay for Executive Directors to the Board;
7.Recommend on Board diversification
c.Policy on Remuneration:
The Remuneration policy of the Company is in consonance with the industry practices and aims to attract, retain, develop and motivate a high performance workforce. The policy ensures equality, fairness and consistency in rewarding the employees on the basis of performance. The details of Policy on remuneration for Directors, Key Managerial Personnel and other employees of the Company form part of the Board's Report.
i)The Non-executive Directors were paid sitting fee for attending the meetings of Board and Committee Meetings.
ii)Dr.M.Manickam, Executive Chairman, has been paid remuneration for the period upto 24th October 2014 in terms of the approval of the Central Government. As his re-appointment has been made subject to the approval of the Central Government and the approval of the Central Government is still awaited, he has not been paid remuneration from 25th October 2014. He is entitled for the remuneration upon receipt of the approval of the Central Government. The aforesaid remuneration consists of fixed component only. The Company does not have any service contract with the Executive Chairman.
iii)In respect of Sri M.Balasubramaniam, Managing Director, and Sri M.Srinivaasan, Joint Managing Director, the Central Government while approving their appointments for 5 years, had approved payment of remuneration only for the period upto 31st March 2014. The remuneration mentioned above relate to the year ended 31st March 2014 paid in the financial year 2014-15 after receipt of the approvals of the Central Government. Since they are Managing Directors in one another company, the remuneration has been paid after adjusting the remuneration paid by the other company in terms of Schedule V to the Companies Act 2013. The said remunaration does not contain variable component. Fresh applications have been made to the Central Government for payment of remuneration for the remaining period of their appointments from 1st April 2014 and the approvals of the Central Government are awaited. In view of this Sri M.Balasubramaniam and Sri M.Srinivaasan have not been paid any remuneration for the financial year ended 31st March 2015. The Company does not have any service contract with the Managing Director. A service contract has been entered into with the Joint Managing Director.
iv)Sri V.K.Swaminathan, Executive Director, has been paid remuneration as per the terms of appointment approved by the Members of the Company. There is no variable component in his remuneration. The Company does not have any service contract with the Executive Director.
v)No severance fee is payable to the Directors on termination of employment.
vi)The Company has no stock option scheme to its Directors or employees.
e. Details of shareholding of Non-executive Directors in the Company as on 31st March 2015:
5. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board had renamed the existing Shareholders/Investors Grievance Committee as Stakeholders Relationship Committee in accordance with Section 178 of the Companies Act 2013 and Clause 49 of the Listing Agreement.
This Committee was reconstituted on 12th November 2014 after the demise of Dr.N.Mahalingam, a non-executive Director. Sri S.Chandrasekhar, a Non-Executive Independent Director, is the Chairman of the Committee. The Committee consists of the following Directors as its Members:
The Committee met 3 times during the financial year on 27.9.2014, 31.12.2014 and 31.3.2015 and the attendance of the members are given below:
The Company had received 2 complaints during the year under review and both of them have been attended and resolved. There is no compliant remaining unresolved or pending as on 31st March 2015.
6. RISK MANAGEMENT COMMITTEE:
In terms of the revised Clause 49 of the Listing Agreement a Risk Management Committee has been constituted by the Board of Directors of the Company for laying down procedures for risk assessment and mitigation and to report to the Board. The Risk Management Committee consists of the following Directors as Members:
Sri C.Rangamani, Chairman
Sri K.V. Ramachandran
The Committee met once during the financial year ended 31st March 2015 and all the members attended the meeting. The Board has framed a Risk Management Policy for assessing and mitigating the risks.
7 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Corporate Social Responsibility Committee has been constituted by the Board pursuant to Section 135 of the Companies Act 2013. This Committee consists of the following Directors:
Sri N.K.Vijayan, Chairman Sri M.Srinivaasan Sri S.Chandrasekhar
The Committee met once during the financial year under review on 12.11.2014 and all the members attended the meeting. Since the Company has incurred loss during the last three financial years, besides the financial year ended 31st March 2015, the necessity of incurring expenditure as specified in the Companies Act read with Schedule VII to the Act, has not arisen during the year under review. The CSR Policy approved by the Board is displayed on the website of the Company www.sakthisugars.com.
a.Related Party Transactions:
The details of related party transactions are disclosed in Notes on financial statements. Those transactions are not in conflict with the interest of the Company and are on arms length basis. Statements of related party transactions are placed before the Audit Committee periodically.
There are no materially significant transactions with the related parties viz. Promoters, Directors or the Management, or their relatives or holding company or associate company that may have potential conflict with the Company's interest.
The Policy on related party transactions are posted on the Company's website www.sakthisugars.com.
b. Compliance with Accounting Standards:
The Company has followed all relevant Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 while preparing Financial Statements and has not adopted a treatment different from that prescribed in the Accounting Standards.
During the year ended 31st March 2015, the Company did not have any subsidiary. As such the need for framing a policy for determining "material subsidiary" does not arise at present.
d. Instances of non-compliance, if any:
There are no instances of non-compliance by the Company on any matter relating to capital markets, nor have any penalty/strictures been imposed on the Company by Stock Exchanges or SEBI or any other statutory authority on any matter relating to capital markets during the last three years.
e. Whistle Blower Policy:
The Company has adopted a While Blower Policy and a vigil mechanism for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics. This policy has been posted on the website of the Company. It is affirmed that no personnel has been denied access to the Audit Committee of the Company.
f. Proceeds from issue of shares:
The Company has not raised any money through issue of shares (public issue, right issue, preferential issues, etc.) during the financial year ended 31st March 2015.
g. Compliance on Corporate Governance
The Company has complied with all mandatory requirements of Clause 49 of the Listing Agreement. The status of adoption of the non-mandatory requirements stipulated by the clause is as under:
i. Non-Executive Chairman's Office: A separate office was maintained for the Non-executive Chairman up to 2nd October 2014.
ii. Shareholders rights: As the quarterly/half yearly financial results are published in newspapers and are also posted in the website of the Company, they are not being sent to the shareholders separately.
iii. Audit qualification: There is only one qualification by auditors, removal of which is possible only when CDR EG permits payment of interest and guarantee commission to the holding company. The Company is striving for a regime of unqualified financial statements.
iv. Separate posts of Chairman and CEO: As the Company has multiple products and more than one managerial personnel, one of the managerial personnel is appointed as Executive Chairman in terms of first proviso to Section 203(1) of the Companies Act 2013.
v. Reporting of Internal Auditor: The Company has in house internal audit system and the head of internal audit team reports to the Audit Committee of the Company.
The Managing Director and the Chief Financial Officer of the Company have certified to the Board in accordance with Clause 49(IX) of the Listing Agreement pertaining to CEO/CFO certification for the financial year ended 31st March 2015.
The Senior Management personnel have made disclosures to the Board relating to all material, financial and commercial transaction stating that they did not have personal interest that may have a potential conflict with the interest of the Company at large.
11.MEANS OF COMMUNICATION:
The quarterly/half yearly/annual financial results of the Company are announced within the stipulated time and are published in English and Tamil Newspapers. The Company displays its periodical results on the Company's website www.sakthisugars.com as required by the Listing Agreement.
12.GENERAL SHAREHOLDLER INFORMATION
a. Annual General Meeting
Day and Date Time : Wednesday, 30th September 2015 2.45 p.m.
Venue : Sakthinagar - 638 315,Bhavani Taluk, Erode District, Tamilnadu.
b. Financial Calendar for the financial year: From 1st April 2015 to 31st March 2016
Results for the quarter ending Result announcement
30th June 2015 :On or before 14th August 2015
30th September 2015 : On or before 14th November 2015
31st December 2015 : On or before 14th February 2016
31st March 2016 (Audited) : On or before 30th May 2016
C .Date of Book Closure:
The Register of Members and the Share Transfer Books of the Company shall remain closed from Thursday, the 24th September, 2015 till Wednesday, the 30th September, 2015 (both days inclusive) for the purpose of Annual General Meeting.
d. Listing on Stock Exchanges:
The Company's equity shares are listed on the following Stock Exchanges and the Annual Listing Fees have been paid to all the stock exchanges. The Company's Stock Codes are as follows:
Name of Stock Exchanges
National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex Bandra(East) Mumbai 400 051.
Stock Code SAKHTISUG
BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Fort Mumbai 400 001.
The equity shares of the Company remains delisted from Madras Stock Exchange Limited from 15th October 2014.
Stock Code : 507315
F .Registrar and Share Transfer Agents:
Registered Office: Link Intime India Pvt Ltd (formally Intime Spectrum Registry Limited) C-13, Pannalal Silk Mill Compound LBS Marg, Bhandup (W), Mumbai-400078 Phone No:022 - 25963838 Fax No: 022 - 25946969 Email: firstname.lastname@example.org
g. Share Transfer System:
The shares lodged in physical form are processed, registered and returned by the Registrar and Share Transfer Agents within a period of 15 days from the date of receipt, if the documents are in order.
"Surya" 35, Mayflower Avenue Behind Senthil Nagar, Sowripalayam Road Coimbatore - 641 028. Phone Nos: 0422 - 2314792 & 2315792 Fax No:0422 -2314792 Email: email@example.com
j. Dematerialisation of shares and liquidity:
The shares of the Company are in compulsory demat segment. The Company's shares are available for demat both with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). International Securities Identification Number (ISIN) allotted to the equity shares of the Company is INE 623A01011.
As on 31st March 2015, 9,47,89,833 equity shares of the Company representing 98.52% have been dematerialised.
k. Reconciliation of Share Capital Audit:
As stipulated by SEBI, a qualified Practising Company Secretary carries out the share capital audit of Reconciliation of Share Capital to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital with the Stock Exchanges.
l. Details of Unclaimed Share Certificates:
Pursuant to Clause 5A of the Listing Agreement, the Company has opened a Demat Account in the name of "Sakthi Sugars Limited Unclaimed Suspense Account" with Stock Holding Corporation of India Limited. The details of unclaimed shares as on 31.3.2015 are as under:
m. Outstanding Foreign Currency Convertible Bonds (FCCB) and impact on Equity:
Outstanding Foreign Currency Convertible Bonds as at 31st March 2015 is USD 16.6 Million. The details of conversion and the number of shares that may have to be allotted in the event of the said FCCB being converted into equity shares are given in the Note No.1 forming part of financial statement. In respect of outstanding FCCB (Series B) of USD 15.6 million, the conversion is subject to the terms of the Scheme of Arrangement as may be approved by the Hon'ble High Court of Judicature at Madras.
n. Plant Location
Sugar Unit, Distillery Unit, Ethanol & Co-generation plant
Sugar Unit & Beverage Plant and Co-generation plant
Sugar Unit, Distillery Unit and Soya Extrusion Plant
Sugar Unit and Co-Generation plant Soya Unit
o. Address for Correspondence
Sakthinagar - 638 315 Erode District, Tamilnadu
Padamathur Village - 630 561 Sivaganga District, Tamilnadu
Haripur Village, Korian Post - 759 013 Dhenkanal District, Orissa
Poonthurai Semur Post - 638 115 Modakurichi, Erode District, Tamilnadu
Marchinaickenpalayam Ambarampalayam Post - 642 103 Coimbatore District
Sakthi Sugars Limited 180, Race Course Road Coimbatore - 641 018 Phone : 0422 4322 222, 2221551 Fax : 0422 2220574, 4322488 Email : firstname.lastname@example.org Website : www.sakthisugars.com