REPORT ON CORPORATE GOVERNANCE
1. Company's Philosophy of Corporate Governance
The Company believes that sound Corporate Governance is essential for achieving sustainable long term value for all its stakeholders. In furtherance thereof, the Company is firmly committed to the principles of good Corporate Governance and has consistently endeavoured to practice the same. The tenets of good Corporate Governance continue to influence the Company's policies and decisions, and instill the values of transparency, professionalism and accountability in all its dealings.
2. Board of Directors
The Board comprises the Chairman and Managing Director and three Non-Executive Directors, of whom two are Independent Directors. All except the Managing Director are Non-Executive Directors and thus constitute one-half of total number of Directors. The Company has one woman director. The Managing Director is not liable to retire by rotation. None of the Directors are Members of more than 10 Committees of Board in public limited companies or Chairman of more than 5 Committees. Necessary disclosures have been obtained from all the Directors regarding their directorships / Committee memberships and the same have been taken on record by the Board.
The meetings of the Board are normally held at the Registered Office of the Company at "Eldorado", 5th Floor, 112, Nungambakkam High Road, Chennai - 600 034. During the financial year, 6 Board Meetings were held on May 09,2014, August 14,2014, August 30,2014,November 12,2014, February 14,2015 and March 31,2015.
Notice for Board Meetings together Agenda and notes on the subjects to be discussed at the Meeting is issued one week in advance. The items in the agenda are backed by comprehensive background information to enable the Board to take appropriate decisions. In addition to the information required under Annexure X to Clause 49 of the Listing Agreement, the Board is also kept informed of major events and approvals are taken wherever necessary. Periodical reports on compliance of applicable laws are placed before the meeting and the same is taken on record after discussion. In view of the complexity of the Company's business, matters requiring immediate approval of the Board are at times tabled at the Meeting with the consent of all the Directors. Draft minutes of the Meeting of the Board, prepared by the Company Secretary, are circulated among the Directors within 2 weeks of the date of the Meeting and the same is recorded subject to corrections, if any, based on the comments of the Directors. The Minutes of the meetings as recorded are placed at the succeeding meeting.
None of the Directors on the Board is a member of more than 10 Committees nor Chairman of more than 5 Committees (as per Clause 49 of the Listing Agreement) across all the Public Limited Companies in which he/ she is a Director. All Directors have made the requisite disclosures regarding Committee positions held by them in other Public Limited Companies and the same have been taken on record by the Board.
The Company has not had any pecuniary relationships or transactions with any of the Non Executive Directors during the year under review.
The Company does not pay any remuneration to its Non Executive Directors other than the Sitting Fees for attending meetings of the Board or Committee(s) thereof. Also, no Sitting Fees has been paid to Mr R V Tyagarajan, Chairman and Managing Director.
A Management Discussion and Analysis Report which forms part of this Report is appended as a separate annexure and attached to the Directors' Report.
c) Reappointment of Director
Mrs Malathi Ram Tyagarajan, retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-election. The additional information relating to this Director, as required under Clause 49 of the Listing Agreement with the Stock Exchanges, is furnished as part of the Notice convening the Annual General Meeting.
d) Independent Directors
The Company has two Independent Directors. The Shareholders have at the 58 Annual General Meeting held on September 29,2014 approved the appointment of the two Independent Directors for a fixed tenure in compliance with Section 149 of the Companies Act, 2013. The Company has issued a formal letter of appointment to the Independent Directors in the manner provided under the Companies Act, 2013 and as per Clause 49 of the Listing Agreement and the terms and conditions of their appointment are disclosed on the Company's website at www.tasugars.in .
The Independent Directors have confirmed that they satisfy the criteria of independence as stipulated under Section 149(6) of the Companies Act, 2013.
3. BOARD COMMITTEES AND OTHER COMMITTEES
a) Audit Committee
The Audit Committee conforms to Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement in all respects including role and powers, mandatory review of the required information, appointment of Statutory Auditors, Cost Auditors and Secretarial Auditors. The Audit Committee reviews the Reports of the Internal Auditor and the Statutory Auditors periodically and discusses their findings. The Company Secretary acts as the Secretary to the Committee. Statutory Auditors and Internal Auditors are invited to the Meetings. Minutes of the Meetings of the Audit Committee are circulated to the Members of the Board and taken note of.
Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Power) Rules, 2014 and Clause 49 of the Listing Agreement, the Company has established a vigil mechanism for Directors and employees to report genuine concerns to the Audit Committee. The Company has not received any complaint during the FY 2014-15.
b) Nomination and Remuneration Committee
i) Composition and terms of reference
The Board has constituted a Nomination and Remuneration Committee (NRC) and this Committee at present consists of Mr. V Thirupathi (Chairman) and Mr. R Vijayaraghavan, both Independent Directors and Mrs Malathi Ram Tyagarajan, Non - Executive Director. The terms of reference of the Committee include
formulation of criteria for determining qualifications, positive attributes and independence of a director and recommending to the Board a policy relating to the remuneration of the Directors and Key Managerial personnel and other employees; formulation of criteria for evaluation of independent directors and the Board; devising a policy on Board diversity; identification of persons who are qualified to become directors and who may be appointed in senior management in accordance with criteria laid down and recommend to the Board their appointment and approval. One meeting of the Nomination and Remuneration Committee was held during the year ended March 31, 2015.
ii) Remuneration Policy
The Company's remuneration Policy is structured based on the trend in the sugar industry. In terms of the provisions of Section 178 of Companies Act, 2013 and the Listing Agreement, the Policy on remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management has been formulated to ensure equitable remuneration to all Directors , KMP and employees of the Company. The Policy ensures that -
• 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;
• Relationship of remuneration to performance is clear and meets appropriate benchmarks; and
• Remuneration to directors, KMP and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.
The Remuneration Policy of the Company inter alia includes Policy for appointment and removal of Directors, KMP and Senior Management and their and other employees' remuneration. The NRC shall indentify the person based on certain fixed norms for appointment as Director and recommend to the Board for his / her appointment. Similar process is followed for appointment of KMP and Senior Management position. The remuneration of Non-Executive Directors comprises of only sitting fees and that of KMP and Senior employees in the management cadre comprises of Fixed Pay (salary and perquisites) and variable pay (performance linked incentive).
iii) Evaluation criteria
The NRC has prescribed certain criteria such as, ability to take decision objectively, guiding the Company in implementing Corporate Governance, assessment of the performance of the Company and active participation in the affairs of the Company as Board/Committee member for performance evaluation of Directors.
iv) Remuneration of Directors
The remuneration of the Executive Directors is determined by the Board based on the recommendation of the NRC as the Remuneration Policy of the Company. The Non-Executive Directors do not draw any remuneration from the Company other than Sitting Fees. Mr. R V Tyagarajan, Chairman and Managing Director does not draw any remuneration from the Company. Details of Sitting Fees paid to Non Executive Directors are as under:
c) Stakeholders Relationship Committee
The Board has constituted Stakeholders Relationship Committee which at present consists of the following Independent Directors.
- Mr V Thirupathi - Chairman
- Mr R Vijayaraghavan - Member
All investor complaints which cannot be settled at the level of Chairman and Managing Director and Mr R R Karthikeyan, Company Secretary & Compliance Officer and M/s Integrated Enterprises (India) Ltd., the Registrar, are forwarded to the Stakeholders Relationship Committee for final settlement. The Company Secretary is the Compliance Officer.
The Company endeavors to settle all shareholder complaints in the minimum possible time. The average period of settlement may vary from 7 days to 10 days except in the event of disputed matters / cases, which are kept pending till the same are mutually settled with the shareholders or are finally disposed off by the Courts.
d) Share Transfer Committee
This Committee approves and monitors transfers, transmissions, splitting, dematerialisation, rematerialisation, consolidation of securities and issue of duplicate certificates by the Company. The Committee presently consists of Mr R V Tyagarajan, Chairman and Managing Director and Mr R R Karthikeyan, Senior General Manager -Finance & Company Secretary. The Committee met 14 times during the year ended March 31,2015.
The Company confirms that there were no share transfers pending as on March 31,2015 and all requests for dematerialisation and re-materialisation of shares as on that date were confirmed/rejected into the NSDL/CDSL system.
Compliance Officer :
Mr. R R Karthikeyan, Company Secretary
Thiru Arooran Sugars Ltd
"Eldorado", 5th Floor, 112, Nungambakkam High Road, Chennai - 600 034.
e) Finance Committee
Considering the increasing complexity of the Company's business and the need to respond quickly to the business exigencies, the Board of Directors has constituted a Finance Committee / Committee of Directors (Finance) on November 23, 2006. The terms of reference and Rules for functioning of the Committee have been specified by the Board. This Committee presently comprises Mr R V Tyagarajan, Chairman and Managing Director, Mr V Thirupathi and Mrs Malathi Ram Tyagarajan, Directors of the Company.
4. OTHER INFORMATION
a) Risk Management Framework The Company has mechanisms in place to inform Board Members about the Risk Assessment and Minimisation procedures and periodical reviews to ensure that risk is controlled by the Executive Management through the means of a properly defined framework.
b) Code of Conduct
The Company has laid down a Code of Conduct for all Members of the Board of Directors and Senior Management personnel of the Company. It is hereby affirmed that all the Directors and Senior Management personnel have complied with the Code and a confirmation to this effect has been obtained from them.
c) Prevention of Insider Trading
The Company has framed a Code of Conduct for prevention of Insider Trading based on SEBI (Prohibition of Insider Trading) Regulations,1992. This code is applicable to all Directors/ Officers (including Statutory Auditors)/ designated employees. The code ensures prevention of dealing in Company's shares by persons who have access to unpublished price sensitive information. SEBI has notified a new Regulation viz. SEBI (Prohibition of Insider Trading) Regulations,2015 which has come into force with effect from May 15,2015. Pursuant to this Regulation, the Board of Directors has formulated the following Codes which have uploaded in the Company's website and the Stock Exchanges informed of the same.
i) Code of Practices and Procedures for Fair disclosure of Unpublished Price Sensitive Information; and
ii) Minimum Standards for Code of Conduct to regulate, monitor and report trading by Insiders. The Company Secretary has been designated as the Compliance Officer for this purpose.
d) Circular Resolution
Recourse to Circular Resolution is made in exceptional and emergent cases and the same are recorded at the succeeding Board Meeting. During the year, one Circular Resolution was passed on September 23, 2014.
e) Share Capital Audit Report
The Company has submitted, for each of the 4 quarters during the year 2014-15, the Share Capital Audit Report pertaining to reconciliation of Share Capital to the Stock Exchanges in the prescribed format within 30 days from the close of the Quarter.
f) Secretarial Standards
Pursuant to Section 118(10) of the Companies Act, 2013, every company shall observe Secretarial Standards with respect to General and Board meetings prescribed by the Institute of Company Secretaries of India. The Ministry of Corporate Affairs has accorded approval for the Secretarial Standards on Meetings of Board of Directors (SS-1) and General Meetings (SS-2) that has come into force from July 01, 2015. The Company's practices and procedures, by and large, meet with these prescriptions, wherever applicable.
Related Party Transactions
All Related Party Transactions (RPTs) during the year were on an arms-length basis and were in the ordinary course of business. Transactions with RPTs have been disclosed as per Accounting Standard 18 in the Note No.34 of the Financial Statements. None of the transactions with any of the related parties were in conflict with the interests of the Company at large. All RPTs have been approved by the Audit Committee. Prior omnibus approval of the Audit Committee is obtained for the transactions which are non material and repetitive in nature.
During the year under review, the Company has not raised any funds from public issue, rights issue or preferential issue.
h) Means of Communication
a) Quarterly results are published in an English Daily and "Makkal Kural", a vernacular daily. The annual results are posted to every shareholder of the Company.
b) Management Discussion & Analysis forms part of this Annual Report, which is also being posted to all the shareholders of the Company.
c) Official news releases are given directly to the Press.
d) From the Quarter ended December 31, 2002 onwards, the results and shareholding pattern are posted on SEBI's website www.corpfiling.co.in.
e) As per Clause 54 of the Listing Agreement with Stock Exchanges, certain documents/information such as quarterly/annual financial results, shareholding pattern and Corporate Governance are accessible on the Company's website www.tasugars.in .
i CEO/CFO Certification
In terms of revised Clause 49 of the Listing Agreement, the certification by the CEO and CFO on the financial statements and internal controls relating to financial reporting and declaration regarding compliance of Code of Conduct has been obtained and the same has been placed before the Meeting of the Board.
Date and Venue of Annual General Meeting
Tuesday, December 15, 2015 at 10.30 A.M. at the Obul Reddy Hall at Vani Mahal, 103, G.N. Chetty Road, T.Nagar, Chennai 600 017.
The Financial Year of the Company is from April to March.
Financial Reporting for the Quarter Ended
June 30, 2015 On or before August 14, 2015
September 30, 2015 On or before November 14, 2015
December 31, 2015 On or before February 14, 2016
March 31, 2016 On or before May 30, 2016
Date of Book Closure
The Register of Members and the Share Transfer Books of the Company will remain closed from December 09,2015 to December 15,2015 (both days inclusive).
Listing and Trading of Company's Equity Shares
The Company's Equity Shares are listed on the following Stock Exchanges in India. The Company has paid the annual renewal fees upto March 31, 2015 to all the Stock Exchanges on which its Equity Shares are listed.
Name and address of the Stock Exchange
National Stock Exchange of India Limited
Exchange Plaza, Plot No. C/1, G Block, Bandra - Kurla Complex, Bandra (E), Mumbai 400 051.
Stock Code THIRUSUGAR
Market Lot One Equity Share
Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers Dalal Street, Mumbai 400 001.
Stock Code 507450
Market Lot One Equity Share
Dematerialisation of Equity Shares
The trading in the Company's Equity Shares on the specified Stock Exchanges has to be compulsorily settled in the electronic form by all the investors. The Company has entered into tripartite agreement along with the Registrar and Share Transfer Agents of the Company with two depositories viz., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
The Equity Shares of the Company have been admitted for dematerialisation by these depositories with the International Securities Identification Number (ISIN) - INE 409A01015. Members desiring to know further details may contact the Depositories at the following address:
National Securities Depository Limited
Trade World, A Wing, 4th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013.
Central Depository Services (India) Limited
Phiroze Jeejeebhoy Towers, 16thFloor, Dalal Street, Mumbai - 400 001.
Registrars and Share Transfer Agents
M/s. Integrated Enterprises (India) Limited
2nd Floor, Kences Towers, No 1, Ramakrishna Street North Usman Road, T. Nagar, Chennai 600 017
Tel : 044 - 2814 0801 Fax : 044 - 2814 2479
Integrated Enterprises (India) Ltd, a SEBI registered Registrar & Share Transfer Agent (R&T Agent), maintains all work related to share registry in terms of both physical and electronic shareholding as mandated by SEBI vide its Circular No. D&CC/FITTC/CIR-15/2002 dated December 27, 2002.
Share Transfer System
As already stated, the Company's shares are traded on the Stock Exchanges compulsorily in demat mode. Therefore, investors/shareholders are requested to kindly note that physical documents, viz., Demat Request Forms (DRF) and Share Certificates, etc. should be sent by their Depository Participants (DPs) directly to the Share Transfer Agents. Any delay on the part of the DPs in sending the DRF and the Share Certificates beyond 21 days from the date of generation of the Demat Request Number (DRN) by the DP will be rejected /cancelled. This is being done to ensure that no demat requests remain pending with the Share Transfer Agent beyond a period of 30 days. Investors / Shareholders should, therefore, ensure that their DPs do not delay sending the DRF and Share Certificates to the Share Transfer Agent after generating the DRN.
Section 72 of the Companies Act,2013 and the Rules prescribed thereunder viz. Companies (Share Capital and Debentures) Rules,2014 provide for nomination of shares. The shareholders can nominate a person with whom the shares shall vest in the event of death of the shareholders. The nomination can be made only by individuals holding shares of the Company either in sole name or jointly with another (not exceeding one joint holder). The nominee shall be an individual. In the case of nominee being a minor, he/she may be represented by his/her natural guardian or a Court appointed guardian. The transfer of shares in favour of a nominee shall be a valid discharge by the Company against the legal heirs. The nomination shall stand rescinded upon transfer of shares. The nomination by a shareholder can be changed or cancelled at any time by giving due notice and upon execution of a fresh nomination form. Shareholders holding shares in physical form may file nomination in the prescribed Form SH-13 with the Company's Registrar and Transfer Agent. In respect of shares held in demat form, the nomination form may be filed with the respective Depository Participant.
All share transfers should be forwarded to the Registrars & Share Transfer Agents of the Company. All communications should be forwarded to the Registered Office of the Company, marked to the attention of the Company Secretary. Share Transfers will normally be registered and returned within 15 days from the date of receipt of correct documents.
Investors' complaints/grievances not resolved within 30 days should be addressed to the Chairman and Managing Director for redressal.
Plant locations :
Papanasam Taluk Thanjavur District Tamil Nadu Pincode : 612 301
Virudhachalam Taluk Cuddalore District Tamil Nadu Pincode : 606 105
Other useful information for Shareholders:
In terms of Section 205A of the erstwhile Companies Act,1956, unclaimed equity dividend for the financial year(s) upto 1993-94 has been transferred to the General Revenue Account of the Central Government. Shareholders who have so far not claimed or collected their dividend for the said financial year(s), may claim the same from the Registrar of Companies, Tamil Nadu by submitting an application in the prescribed form.
In terms of Section 205A of the erstwhile Companies Act,1956, unclaimed equity dividend for the financial year(s) 1994-95, 1995-96, 1996-97, 1997-98,1998-99 and 2005-06 has been transferred to the Investor Education and Protection Fund of the Central Government. It may be noted that no claims shall lie against the Company in respect of such amounts and no payment shall be made against such claims subsequent to the date of the aforesaid transfer. Pursuant to the provisions of Investor and Education
Protection Fund(Uploading of Information regarding unpaid and unclaimed dividend lying with companies) Rules,2012, the Company has uploaded the details of unpaid and unclaimed dividend lying with the Company as on September 29, 2014 (date of the last Annual General Meeting) on the website of the Ministry of Corporate Affairs.
The Unpaid / Unclaimed dividend for the 15 month period ended December 31,2009 will be transferred in March 2017. A sum of Rs. 2,63,820 remains unclaimed as on date of this report out of divided declared at Rs.4/- per share for the aforesaid financial year. Shareholders who have not encashed the Dividend Warrant are advised to contact the Company
All queries on the Annual Report and other clarifications may be addressed to the Registered Office of the Company at
"Eldorado", 5 floor 112, Nungambakkam High Road Chennai - 600 034.
Phone : 2827 6001 Fax : 2827 0470
Email : email@example.com
Disclosure of Information pursuant to Clause 49 VIII E1 of the Listing Agreement
Disclosure of Information to shareholders pursuant to Clause 49 49 VIII E1 of the Listing Agreement pertaining to reappointment of Director is furnished as part of the Notice convening the Annual General Meeting.
On behalf of the Board
R V Tyagarajan
Chairman and Managing Director
September 24, 2015