REPORT ON CORPORATE GOVERNANCE
(As per Clause 49 of the Listing Agreements entered into with the Stock Exchanges)
1. THE COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE :
The Company's Philosophy is that Corporate Governance is a process which enables the Company to operate in a systemic manner to meet its ethical, legal and business expectations and at the same time fulfill its social responsibilities. The core value of Corporate Governance lies in integrity, transparency, high degree of disclosures, emphasis on product quality, adopting best business practices.
Your Company confirms the compliance of Corporate Governance as contained in Clause 49 of the Listing agreement as amended, the details of which are given below:
2. BOARD OF DIRECTORS:
2.1 Appointment and Tenure:
The Directors of the Company (except Nominee Directors) are appointed by the shareholders at General Meetings. All Executive Directors are subject to retirement by rotation and at every Annual General Meeting, 1/3rd of such Directors as are liable to retire by rotation, if eligible, generally offer themselves for re-election, in accordance with the provisions of Section 152 of the Companies Act, 2013 and that of the Articles of Association of the Company.
2.2. Board composition, category of Directors, meetings and attendance Record of each director:
The Company has a balanced mix of Executive and Non-Executive Independent Directors to maintain the independence of the board and to separate the board functions of governance and management. As at March 31st ,2015, the Board of Directors comprises of 9(Nine) Directors, out of which one (1) is Managing Director, One (1) is Promoter and Non-Executive Directors, Four (4) of them are Independent and Non-Executive Directors including Women Director, one (1) is Executive Director and Two (2) are Nominee Directors. Shri Vimlesh Kumar-.Punjab National Bank Nominee and Shri Ch.Srinivasu-IDBI Nominee. All Independent Directors are persons of eminence and bring a wide range of expertise and experience to the Board thereby ensuring the best interest of stakeholders and the Company.
The Chairman is an Independent & Non-Executive Director of the Company. The number of Independent Directors are 4 which is in compliance with the requirements of Clause 49 of the Listing agreement. The number of Non-Executive Directors is more than 50% of the total number of Directors.
All Independent Directors meet with the criteria of independence as prescribed both under subsection (6) of Section 149 of the Act and under Clause 49 of the Listing Agreement.
No Director is related to any other Director on the Board in terms of the definition of "relative" as defined in Section 2(77) of the Companies Act, 2013. None of the Directors on the Board are Independent Directors of more than seven listed companies and none of the Whole-time Directors are Independent Directors of any listed company
None of the Directors on the Board is a member of more than 10 committees and Chairman of more than 5 committees (as specified in Clause 49 of the Listing Agreement) across all the Companies in which he/she is a Director.
The information stipulated under Annexure X to Clause 49 of the Listing Agreement is being made available to the Board.
Change in Composition of Board of Directors since the date of last AGM held on 30th September, 2014:
1. Resignation of Shri Y.S.Chowdary as Chairman & Non-Executive Director w.e.f. October 15th, 2014.
2. Appointment of Smt B.Sandhyasri as an additional director w.e.f. March 30th, 2015.
2.3. Board Meetings, Board Committee Meetings and Procedures:
The Board of Directors oversees the overall functioning of the Company. The Board provides and evaluates the strategic direction of the Company, management policies and their effectiveness and ensures that the long-term interests of the stakeholders are being served. The Chairman and Managing Director are assisted by the Executive Directors/ Senior Managerial Personnel in overseeing the functional matters of the Company.
The Company believes that a Vibrant and Independent Board should be at the helm of affairs to ensure the highest levels of Corporate Governance. Accordingly your Company has always had adequate competent Independent Directors. For effective discharge of its functions and proper deliberations, Board has constituted various committees.
A minimum of four Board Meetings are held every year. Dates for the Board Meetings in the ensuing quarter are decided well in advance and communicated to the Directors. The Agenda along with the explanatory notes are sent in advance to the Directors. Additional meetings of the Board are held when deemed necessary to address the specific needs of the Company. In case of business exigencies or urgency of matters, resolutions are passed by circulation.
While preparing the Agenda, Notes on Agenda, Minutes etc. of the meeting(s), adequate care is taken to ensure adherence to all applicable laws and regulations including the Companies Act, 2013, read with the Rules made thereunder.
Five (5) Board Meetings were held during the year 2014-15 and the gap between two meetings did not exceed four months. The dates on which the Board Meetings were held were as follows:
(1) May 30th, 2014
(2) August 12th, 2014
(3) August 28th, 2014
(4) November 13th, 2014
(5) February 14th, 2015
In addition to items which are mandated to be placed before the Board for its noting and/or approval, information is provided on various significant items.
The Board periodically reviews compliance reports of all laws applicable to the Company. Steps were taken by the Company to rectify instances of non-compliance, if any.
Independent Directors Meeting:
The Independent Directors met on March 30th, 2015 without the presence of Non- Independent Directors and members of the Management. At this meeting, the Independent Directors evaluated the performance of the Non-Independent Directors and the Board of Directors as a whole, evaluated the performance of the Chairman of the Board and discussed aspects relating to the quality, quantity and timeliness of the flow of information between the Company, the Management and the Board.
3. BOARD COMMITTEES:
In addition to functional Committees, your Board has constituted the following Committees under the mandatory and non-mandatory requirements of the Clause 49 of the Listing Agreement.
3.1 Audit Committee:
The Audit Committee of the Company is constituted in line with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges read with Section 177 of the Companies Act, 2013. The terms of reference, role and powers of the Audit Committee are as mentioned in Clause 49 of the Listing Agreement entered into with the Stock Exchanges read with Section 177 of the Companies Act, 2013 and includes overseeing of the Company's financial reporting process, reviewing with the management of the financial statements and the adequacy of the internal audit function, internal control and to discuss significant internal audit findings, statutory compliance and issues related to risk management and compliances.
Composition and Procedure of the Audit Committee:
The audit committee shall meet at least four times in a year and not more than four months shall elapse between two meetings.
The quorum for the audit committee shall be either two members or one third of the members whichever is higher and minimum of at least two independent directors.
The Audit Committee of your Company comprises of Three (3) members, out of which Two (2) are independent and non-executive directors and one (1) Executive Director. The Members possess adequate knowledge of Accounts, Audit, Finance, etc. The composition of the Audit Committee meets with the requirements of Section 177 of the Companies Act, 2013 and of Clause 49 of the Listing Agreement.
During the financial year 2014-15, the audit committee met Five times on the following dates:
(1) May 30th, 2014,
(2) August 12th, 2014,
(3) August 28th, 2014,
(4) November 13th, 2014
(5) February 14th, 2015
The necessary quorum was present at the meetings.
3.2 Nomination and Remuneration Committee (Formerly Remuneration Committee)
Nomination and Remuneration Committee has been reconstituted by the Board of Directors. In compliance with Section 178 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 and revised Clause 49 of the Listing Agreement, Remuneration Committee were renamed "Nomination and Remuneration Committee" of the Board of Directors of the Company.
The Scope of Nomination & Remuneration Committee is to review the remuneration package payable to Executive Director(s) and Executives in the top level Management of the Company and gives its recommendation to the Board and acts in terms of reference of the Board from time to time.
There were no changes in composition of Nomination and Remuneration Committee since the date of last AGM held on September 30th, 2014.
The remuneration recommendations about the remuneration of Directors are subject to the approval of the Members of the Company and the remuneration of the key managerial persons is to be recommended by the Nomination and Remuneration Committee to the Board.
.3. Shareholders' Grievances Committee:
Scope of the Shareholders' Grievance Committee:
The Shareholders' Grievance Committee of your Company shall look into the redressing of shareholder and investor complaints like non-receipt of Balance Sheet, non-receipt of declared Dividend, etc.,
Constitution and Composition of the Shareholders' Grievance Committee:
The Shareholders' Grievance Committee of your Company comprises of two (2) members.
No Shareholders' Grievance Committee Meeting was held during the financial year 2014-15.
3.4. Share Transfer Committee:
The Share transfer committee comprises of Shri G.Srinivasa Raju and Shri R.K.Birla. The role, terms of reference, the authority and powers of the Share Transfer Committee are in conformity with the provisions of the Companies Act, 2013. During the year under review the Share Transfer Committee met 4 (Four) times.
There are no share transfers pending for more than a fortnight.
3.5. Management Committee:
The Management Committee comprises of Shri Shri G.Srinivasa Raju, Shri R.K.Birla and Shri S.Hanumantha Rao. The role, terms of reference, the authority and powers of the management committee are in conformity with the provisions of the Companies Act, 2013. During the year under review the management committee met 20 (Twenty ) times.
3.6. CSR Committee as per the provisions of Section 135 of Companies Act, 2013:
As per the Section 135 of the Companies Act, 2013, the Company is required to constitute a Committee viz., 'Corporate Social Responsibility (CSR) Committee of the Board of Directors of the Company consisting of three or more Director, out of which at least one Director should be Independent Director. In this connection, the CSR Committee was constituted by the Board Meeting held on May 30th, 2014 with the following Directors:
The terms of reference of CSR Committee shall, inter-alia, include the following:
a. To formulate and recommend to the Board, a CSR policy which shall indicate the activities to be undertaken by the Company as per the Companies Act, 2013;
b. To review and recommend the amount of expenditure to be incurred on the activities to be undertaken by the Company;
c. To monitor the CSR policy of the Company from time to time;
d. Any other matter as the CSR Committee may deem appropriate after approval of the Board of Directors or as may be directed by the Board of Directors from time to time".
The quorum for the CSR Committee Meeting shall be one-third of its total strength (any fraction contained in that one-third be rounded off as one) or two members, whichever is higher".
One CSR committee meeting was held during the year on 19.01.2015.
The Company Secretary to the Company shall act as Secretary to the CSR Committee.
3.7. Risk/Management Committee pursuant to Clause 49 (VI) (as per revised Listing Agreement:
As per revised Clause 49(VI) of the Listing Agreement entered by the Company with the Stock Exchanges, the Company is required to constitute a Committee viz., 'Risk Management Committee of the Board of Directors of the Company consisting of three or more Director. In this connection the Committee was constituted with the following Directors in the Board Meeting held on May 30th , 2014:
(i) Materially Significant related party transactions:
There were no materially significant related party transactions during the year having potential conflict with the interest of the Company at large. The Company has formulated the Policy on Materiality of Related party transactions to decide the materiality for the related party transaction and to deal with related party transaction.
The said Policy has been posted on the website of the Company www.sujana.com All transactions were carried out on an arms-length basis and were not prejudicial to the interest of the Company.
(ii) Details of Statutory Non-compliances:
There have not been any non-compliance by the Company and no penalties or strictures imposed on the Company by the Stock Exchanges or SEBI or any Statutory Authority, on any material related to capital markets, during the last three (3) years.
(iii) Risk Management:
The Company has laid down procedures to inform the Board of Directors about the Risk Assessment and Minimization Procedure. These procedures are periodically reviewed by the Board to ensure that Executive management controls risk through means of a properly defined framework.
(iv) Disclosure on Requirements of the Listing Agreement:
The Company has complied with all the requirements of the Listing Agreement with the Stock Exchanges as well as regulations and guidelines of SEBI. No penalties or strictures have been imposed by SEBI, Stock Exchanges or any other statutory authority on matters relating to capital markets during last three years.
(v) Details of the Compliance with Mandatory and Non-mandatory requirements of Clause 49 of the Listing Agreement:
During the Financial year under review, your Company has duly complied with all the mandatory requirements of Clause 49 of the Listing Agreement.
Following is the status of the compliances with Non-mandatory requirements.
During the year under review there is no audit qualification on the Company's financial statements.
The Chairman of the Board as a Non-executive Chairman and his position is separate from that of the Managing Director and CEO of the Company.
The Internal Auditor reports to the Audit Committee of the Company. (vi) It is confirmed that no personnel has been denied access to the Audit Committee.
6. Other Disclosures as per Clause 49 of the Listing Agreement:
(i) Clause 49(II)(E): Code of Conduct
The Company has adopted a Code of Conduct as required under Clause 49(II)(E) of the Listing Agreement with the Stock Exchanges, which applies to all the Board Members and Senior Management of the Company. The Board Members and Senior Management personnel have affirmed their compliance with the Code on annual basis and their confirmations have been received in this regard. The Code of Conduct has been posted on the Company's website. A separate declaration to this effect signed by the Managing Director is attached.
(ii) Clause 49(VIII)(B): Disclosure of Accounting Treatment
The Company has complied with the appropriate accounting policies and has ensured that they have been applied consistently and comply with material aspects with the accounting standards notified under in Section 133 of the Companies Act, 2013. Significant Accounting policies is provided elsewhere in the Annual Report.
(iii) Disclosure under Clause 49(VIII)(C)
(a) None of the Independent/Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the judgment of the Board may affect the independent of the director except receiving sitting fee for attending Board/Committee meetings.
(b) None of the non-executive director is holding any shares in the Company.
(iv) Management Discussion and Analysis Report
The Management Discussion and Analysis Report form part of this Annual Report and is in accordance with the requirements as laid down in Clause 49 of the Listing Agreement with Stock Exchanges.
(v) Clause 49(VIII)(E): Shareholders Information
(a) Appointment/Re-appointment of Directors: The brief resume of directors retiring by rotation , appointment of Directors and re-appointment of directors, including nature of their experience in specific functional areas, names of companies in which they hold directorship and membership of committees of the Board is appended to the Notice for calling Annual General Meeting.
(b) None of the Directors are related to each other.
(vi) Clause 49(IX):CEO&CFO Certification:
Shri R.K.Birla, Managing Director and Shri Ch.Narayana Rao, CFO of the Company have given annual certification on financial reporting and internal controls to the board in terms of Clause 49 of the Listing Agreement. The Managing Director and the Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Clause 41 of the Listing Agreement.
7. Means of Communication
(i) Publication of Quarterly Financial Results in daily newspapers - Andhra Prabha or Financial Express or Business Standard and the same will be updated in the Company's Website at www.sujana.com
(ii) Furnishing the Quarterly Financial Results to Stock Exchanges in which Company's shares is listed.
(iii) Sending Balance Sheet, Profit & Loss Account, Directors' Report & Auditors' Report to Shareholders through Post/Courier/Email.
(iv) Company's Corporate Website :
The Company's website www.sujana.com is a comprehensive reference on Sujana Metal Products Limited's management, vision, mission, policies, corporate governance, corporate sustainability, investor relations, sales network, updates and news. The Section on 'Investor Relations' serves to inform the shareholders, by giving complete financial details, shareholding patterns, corporate benefits, information relating to stock exchanges, registrars, share transfer agents and frequently asked questions. Investors can also submit their queries and get feedback through online interactive forms. The Section on 'Newsrooms' includes all major press reports and releases, awards, campaigns.
(v) NSE Electronic Application Processing System (NEAPS):
NEAPS is a web based application designed by NSE for corporates. Financial Results, Shareholding pattern and Corporate Governance Report are also filed electronically on NEAPS.
(vi) BSE Online (Listing.bseindia.com) : It is a web based application designed by BSE for corporates. The Shareholding pattern, Corporate Governance Report and Financial Results are also filed electronically as pdf attachments
(vii) Annual Report: Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Directors' Report, Auditor's Report and other important information is circulated to members and others entitled thereto. The Management Discussion and Analysis (MD&A) Report forms part of the Annual Report.
(viii) SEBI Complaints Redress System (SCORES):
SCORES is a system implemented by SEBI which enables investors to lodge their complaints electronically on the SEBI website. The investor complaints are processed in a centralized web based complaints redressal system. The salient features of this system are Centralised database of all complaints, online uploading of Action Taken Reports (ATRs) by the concerned companies and online viewing by investors of actions taken on the complaint and its current status. All complaints received through SCORES are resolved in a timely manner by the Company, similar to other complaints.
(ix) Chairman's Communique: Printed copy of the Chairman's Speech is distributed to all the shareholders at the Annual General Meetings.
8. General Shareholders Information
(i) Details pursuant to the 25th Annual General Meeting
Date : September 30th , 2015
2. Time : 12.00 noon
3. Venue : Katriya Hotel & Towers, # 8, Raj Bhavan Raod, Somajiguda, Hyderabad - 500 082, Telangana
4. Financial year
2014-2015, (consisting of 12 months from 01.04.2014 to 31.03.2015)
5. Book Closure Date : 29.09.2015 (One day only)
6. Dividend Payment Date : Not Applicable
7. E-voting facility : www.evotingindia.com (opens at 9:00 A.M. on September 26th , 2015 and closes at 5:00 P.M. on September 29th, 2015 and the cutoff date is September 23rd, 2015
(ii) Details pursuant to Listing of Securities:
The Company's Equity shares are listed on the following 2 Stock Exchanges in India :
1. Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001
2. National Stock Exchange of India Ltd Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.
The Company has paid annual listing fees to each of the above Stock Exchanges for the financial years 2014-15.
Global Depository Receipts(GDRs) delisted from the Luxembourg Stock Exchange w.e.f.
(iii) Stock Code/Symbol
(a). BSE Scrip Code/NSE Symbol : 513414/SMPL
(b). Demat ISIN in NSDL and CDSL for equity shares : INE215G01021
(c). Corporate Identity Number (CIN) : L28120TG1988PLC008610
(v) Share Transfer System
Your Company has appointed M/s. Bigshare Services Private Limited for dealing in with the shares of the Company in physical and electronic mode. Presently they are completing the process of transfer within a period of 10 to 15 days from the date of receipt, subject to the documents being valid and complete in all respects.
(ix) Outstanding GDR/ADR/Warrants or any convertible instruments, conversion date and impact on equity:
There are no outstanding GDR/ADR/Warrants or any convertible instruments as on the date of this report.
(x) Reconciliation of Share Capital Audit Report:
SEBI has vide its circular no: CIR/MRD/DP/30/2010 dated: 06.09.2010 renamed the Secretarial Audit Report as the Reconciliation of Share Capital Audit Report.
Reconciliation of Share Capital Audit Report in terms of SEBI Guidelines vide Circular No. CIR/ MRD/DP/30/2010 dated 06th September, 2010, confirming that the total issued capital of the Company is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) is placed before the board on a quarterly basis and is also submitted to the Stock Exchanges where the shares of the Company are listed.
(xi) Plant Location: Hyderabad:
(i) Survey No.296/7/9
(ii) Plot No. 4, Survey No.296/7/7, 8 & 11,
(iii) Survey No. 296/7/7, 296/7/8, 296/7/11
(iv) Survey No. 296/7/7, 8 & 11,
IDA Bollaram, Jinnaram Mandal Medak District - 502 325, Telangana.
(v) Survey No. 196 & 197, Parigi Road, Elikatta Village, Shadnagar, Mahaboobnagar District, Telangana.
(vi) Cut and Bend Division : Survey No. 204, 205 & 206, Elikatta Gram Panchayat, Farooq Nagar Mandal, Mahaboob Nagar District-509216, Telangana.
(vii) Trading Division : Plot No. 4, Survey No. 296/7/7A, IDA Bollaram, Jinnaram Mandal, Medak District-502325, Telangana.
(viii) Survey No.473, 576 & 442, Chikatigudem, Kethepally Mandal, Nalgonda District, Telangana-508211.
(i) Survey No. 204/8B, Manjankaranai Village, Chengai, M.G.R. District - 620 502, Tamilnadu
(ii) Plot No. B-20E, SIPCOT Industrial Complex, Gummidi Pondi, Chennai, Tamilnadu.
Sanivada Village, Rajeevnagar, Visakhapatnam-530046, Andhra Pradesh.
(xii) Address for Correspondence Secretarial Department:
Plot No.18, Nagarjuna Hills, Panjagutta, Hyderabad-500 082. Phone No.2335 1882, Email: email@example.com
Regd.Office and Corporate Office:
Plot No.18, Nagarjuna Hills, Panjagutta, Hyderabad - 500 082. Ph: 23351882, 23351887. Email:firstname.lastname@example.org Website: www.sujana.com
Registrars and Share Transfer Agents:
M/s. Bigshare Services Private Limited, 306, Right Wing, Third Floor, Amruta Ville, Opp: Yashoda Hospital, Raj Bhavan Road, Somajiguda, Hyderabad - 500 082. Phone No.040-23374967 Email: email@example.com
DECLARATION IN TERMS OF AMENDED CLAUSE 49(II)(E) OF LISTING AGREEMENT.
I hereby declare that the Company has obtained affirmation from all the members of the Board and Senior Management Personnel that they have complied with the Code of Business Conduct & Ethics for Board Members/ Senior Management Personnel in respect of the financial year 2014-15.
I further declare that the said Code of Conduct have been posted on the website of the Company in accordance with the Clause 49 of the Listing Agreement.
Date: August 28th 2015