Home Sitemap Contact us
About Us Financials Investor Info Investor Service Resources
Investor Info
Directors's Report
Corp Governance Report
Chairman's Speech
Shareholder Information
Shareholding Pattern
General Meetings
Chairman's Communique
Code of Conduct


 

Corporate Governance Report

The principles of Corporate Governance introduced by SEBI through Clause 49 of the Listing Agreement with Stock Exchanges and amended from time to time is complied in all respects by the Company. The policies, procedures and processes of the Company are at all times directed in furtherance of following the best practices and institutionalizing the code of corporate governance.

  Company's philosophy on Corporate Governance

The Company belonging to ESVIN Group, which is professionally managed, is deeply committed to the core values of Corporate Governance concepts. It strives to maintain the highest ethical standards in its conduct of business towards shareholders, employees, customers, suppliers, and other stakeholders. Its objective is to transcend beyond bare compliance of the statutory requirement of the code and be a responsive and responsible entity through transparency, integrity of information and timely disclosures. The Company constantly endeavours to improve on these on an ongoing basis.

  Board of Directors

The composition of the Board is devised in a manner to have optimal blend of expertise drawn from Industry, Management, Finance and Agriculture.
 
All except the Managing Director are non-executive Directors and thus constitute more than one-half of the total number of Directors. The Managing Director is additionally responsible to continue to discharge the functions of Secretary within the meaning of Section 2(45) of the Companies Act, 1956.
 
The Chairman is non-executive but comes under promoter category. The number of Independent Directors is onehalf of the total strength, complying with Clause 49 of the Listing Agreement. Any reduction in the strength of Independent Directors is filled within 180 days to ensure minimum strength of Independent Directors in the Board.
 
All non-executive Directors retire by rotation and in the normal course seek re-appointment at the AGM. Brief resume of Directors seeking appointment / reappointment is given in the Notice of the AGM.
 
Name of Director and category
Date of initial Appointment
No. of Equity Shares held
Attendance at Board meetings during 2009-10
As on 31st March 2010
Attendance at
last AGM
 
Y - Yes
No. of Director-ships
Committee position
No. of meetings
%
Chairman
Member

Non-Executive Chairman, Promoter
26.12.1996
2823
6
100
6
2
2
Y
Independent
26.10.2001
536
6
100
4
--
1
Y
Promoter Group
26.12.1996
100
6
100
4
1
2
Y

Promoter
26.10.2001
NIL
4
67
16
--
3
Y
Promoter 
26.10.2001
500466
6
100
7
--
--
Y
Managing Director
01.04.2005
3001
6
100
4
--
1
Y
Independent
26.10.2001
4480
6
100
1
--
--
Y
Independent 
 
26.10.2001
202
6
100
3
--
1
Y
Independent
 
05.06.2009
NIL
6
100
7
2
4
Y
Independent 
 
05.06.2009
NIL
5
83
5
1
2
Y

 

No Director holds membership of more than 10 Committees of Board nor is Chairman of more than 5 such Committees as required under Clause 49.

No Director is a relative of any other Director. The age of every Director, including Independent Director, is above 21.


 Board Meetings

The Board meeting dates for the entire financial year are tentatively fixed before start of the year. An annual calendar of Board / Committee meetings is circulated to facilitate the Directors plan their schedules for attending the meetings. Audit Committee and Board meetings are mostly convened on the same day to obviate avoidable travel and recognizing time constraints of independent directors.
During the year, 6 Board meetings were held as against the minimum requirement of 4 meetings on 05.06.2009, 06.06.2009, 22.07.2009, 23.10.2009, 21.01.2010 and 26.03.2010. Interval between any two meetings was not more than 4 months as stipulated under the Listing Agreement.

  Board Proceedings

Board Agenda containing comprehensive information and extensive details is circulated sufficiently in advance. Urgent issues and procedural matters are at times tabled at the meeting with prior approval of Chairman and consent of all present. Powerpoint presentation is made to facilitate pointed attention and purposive deliberations at the meetings.
 
The Board periodically reviews compliance reports of all laws applicable to the Company and takes proactive steps to avert slippages and take remedial measures as appropriate. The Board is apprised of risk assessment and minimization procedures that are periodically reviewed.

  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 and designated employees. Trading window would remain closed for the above during the period when sensitive information is unpublished. The ‘closed period’ for this purpose has been refixed by the Board as under:
a. From 1st July upto twenty-four hours after communication of the first quarter financial results to the Stock Exchanges.
 
b. From 1st October upto twenty-four hours aftercommunication of the second quarter and half-yearly financial results to the Stock Exchanges.
 
c. From 1st January upto twenty-four hours after communication of the third quarter financial results to the Stock Exchanges.
 
d. From 1st April upto twenty-four hours after communication of the annual / fourth quarter financial results to the Stock Exchanges.
 
e. 30 days immediately preceding the date of Board Meeting at which other proposals listed in para 3.2.3 of the Model Code of Conduct of SEBI (Prohibition of Insider Trading) Regulations,1992.
The Trading window shall open 24 hours after communication of the decision of the Board of Directors in respect of the above events to the Stock Exchanges where the company’s securities are listed.
It is hereby affirmed that all Directors and Designated Employees have complied with the Code and a confirmation to the effect has been obtained from them.
The Company Secretary is designated as the Compliance Officer for this purpose. The Audit Committee monitors the adherence to the various requirements as set out in the Code.

  Audit Committee
The Board has constituted an Audit Committee comprising only non-executive Directors with more than two-third being Independent. The Chairman of Audit Committee is an independent director. The Audit Committee meets at regular intervals not exceeding 4 months between any two meetings and subject to a minimum of 4 meetings in a year. CEO, CFO, COO and Internal Auditor are present as invitees while Statutory Auditors and Cost Auditor are also present in most meetings. The Company Secretary acts as the Secretary of the Audit Committee.
The Audit Committee conforms to extant SEBI guidelines and Clause 49 of Listing Agreement in all respects concerning its constitution, meetings, functioning, role and powers, mandatory review of required information, basis of related party transactions, disclosures of accounting treatment. It also fulfills the requirements as set out in The Companies Act, 1956.
During the year, the Audit Committee met 5 times on 05.06.2009, 22.07.2009, 23.10.2009, 21.01.2010 and 26.03.2010. Its composition and attendance during 2009-10 is given hereunder: 
Name of Member Category Attendance at meetings
    No %

Mr V Sridar, Chairman

Independent 5 100
Mr Bimal Poddar Non-Independent 4 80
Dr. L M Ramakrishnan Independent 5 100
Mr N Ravindranathan Independent 5 100

Mr N R Krishnan

Independent 5 100
Permanent Invitees:
Mr N Gopala Ratnam

Non-Independent,Non Executive

5 100
Mr N Ramanathan Executive 5 100

Members of the Audit Committee have requisite financial and management expertise. They have held or hold senior positions in reputed organizations.


  Remuneration Committee

The Company has a Remuneration Committee, though this is a non-mandatory requirement. It comprises 4 nonexecutive Directors of which 3 are independent including its Chairman.
Name of Member Category
Mr N Ravindranathan, Chairman Independent, non-executive
Mr N Gopala Ratnam Non-Independent, non-executive
Dr. L M Ramakrishnan Independent, non-executive
Mr V Sridar  Independent, non-executive

Its principal scope/ role is to recommend remuneration package for Executive directors/ Senior management personnel as and when required. The Committee accordingly meets only as per needs. No Meeting was held during the Year.

 

  Remuneration of Directors
Managing Director is the only Executive Director entitled for monthly remuneration. His remuneration was recommended by the Remuneration Committee, determined by the Board on 28.03.2008 and approved by the Shareholders at the 12th Annual General Meeting held on 18th July 2008, Details of remuneration of ManagingDirector for 2009-10 are shown in Note 4(d) of Schedule 22 to the Accounts. There is no service contract containing provisions of notice period or severance fees.
No Director or his relative holds an office or place of profit in the Company. Other than direct or indirect equity holding and sitting fee, there is no pecuniary relationship or transaction between the company and its non-executive directors. No stock option has been issued by the company to executive director.
Non-executive director is paid no remuneration except sitting fees at Rs.5000 per Meeting of Board and Audit Committee and at Rs.2500 for other Committee Meetings. The rates are well within the ceiling permissible under Law and the Articles of Association of the Company.
 
Director Sitting fees (Rs. lakhs)
Board Meeting 
Committee Meeting
Total
Mr N Gopala Ratnam
30000
12500
42500
Dr. L M Ramakrishnan
30000
25000
55000
Mr Arun G Bijur
30000
12500
42500
Mr Bimal Poddar
20000
20000
40000
Mr C K Pithawalla
30000
--
30000
Mr N Ravindranathan
30000
25000
55000
Mr S K Ramasamy
30000
--
30000
Mr V Sridar 
30000
25000
55000
Mr N R Krishnan
25000
20000
45000

 Remuneration Policy
 
Performance is recognized and achievements rewarded so as to motivate and induce concerned employees to put in their best. Remuneration levels, though cannot be in the top-rung in a low-margin industry, are comparable to the industry norms. Remuneration package is transparent, fair and simple to administer, besides being legal and tax compliant. The Company is able to attract and retain talents as it bestows functional autonomy and offers professional challenge at all levels.

Securities Transactions cum Investors Grievance Committee

The Board has constituted a Securities Transactions cum Investors Grievance Committee. Its role and responsibility is to expeditiously process and approve transactions in securities, complying with SEBI regulations and listing requirements and redressal of investor grievances. The Committee oversees and monitors the performance of theRegistrar & Transfer Agents and devises measures for overall improvement in the quality of investor services.
The Committee comprises of 3 Directors, out of which two are non-executive directors. The Chairman of the Committee is a non-executive Director. The Committee has met 5 times during the year on 06.06.2009, 22.07.2009, 23.10.2009, 21.01.2010 and 26.03.2010. Its composition and attendance is given hereunder: 
Name of Member Category Attendance at meetings
    No %

Mr N Gopalaratnam
Chairman

Non-Executive 5 100
Mr Arun G Bijur Non-Executive 5 100
Mr N Ramanathan Executive 5 100

Status of investor complaints is shown in the Shareholder Information section of this Report.

The Secretary is the Compliance Officer.


   Finance Committee

The Board has constituted a Finance Committee to facilitate quick response to the financial needs / obligations of the Company. It meets as and when the need to consider any matter assigned to it arises. No meeting was held during the Year.

 Committee Minutes

Minutes of all the Committees of the Board are prepared by the Secretary of the Company, approved by the Chairman of the Meeting, circulated to the Board in the Agenda for the succeeding meeting and recorded thereat.

 Circular Resolution

Recourse to circular resolution is made in exceptional and emergent cases that are recorded at the succeeding Board / Committee Meetings. During the year, no circular resolution was passed.

 Secretarial Compliance Report

Though not legally required, as a measure of good corporate governance practice, a Secretarial Audit on the compliance of corporate laws and SEBI regulations was conducted by Mr B Ravi, Practicing Company Secretary for the financial year ended 31st March 2010. Compliance Certificate issued by him was placed before the Board on 28th May 2010.

 Secretarial Standards

The Institute of Company Secretaries of India has issued ten Secretarial Standards that are presently recommendatory in nature. The company’s practices and procedures mostly meet with these prescriptions, wherever applicable.


Quarterly Compliance Report

 
The Company has submitted for each of the 4 Quarters during 2009-10 the Compliance Report to Stock Exchanges in the prescribed format within 15 days from the close of the Quarter.
 
Description Frequency For the Quarter ended Furnished on
Secretarial Audit Report to stock Exchanges on reconciliation of the total admitted capital with NSDL / CDSL and the total issued & listed capital Quarterly    30.06.2009 06.07.2009
30.09.2009 07.10.2009
31.11.2009 08.01.2010
31.03.2010 08.04.2010

Disclosures

In the preparation of financial statements, no accounting treatment different from that prescribed in any Accounting Standard has been followed.

Related party transactions during the year have been disclosed as required under Accounting Standard 18. Details of related party transactions were periodically placed before the Audit Committee. These transactions are not likely to have a conflict with the company’s interest.

The Company has a procedure to inform the Board about the risk assessment and minimization procedures. The Board of Directors periodically reviews the risk management framework of the Company.

No strictures / penalties have been imposed on the company by the Stock Exchanges or SEBI or any statutory authority on any matters related to the capital market during the last 3 years.


Compliance with other Mandatory requirements: 

 Management Discussion and Analysis

Management Discussion and Analysis Report is made in conformity with Clause 49(IV)(F) of the Listing Agreement and is attached to the Directors’ Report forming part of the Annual Report of the Company.

 Senior Management Declaration

Senior management personnel have declared to the Board that no material financial and commercial transactions were entered into by them during 2009-10 where they have personal interest that may have a potential conflict with the interest of the Company at large.

 Subsidiary Companies
The Company has no subsidiary.

 Code of Conduct

The Board has formulated a Code of Conduct for Directors and Senior Management Personnel of the Company which is posted on its Website. 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 individually.

 CEO/CFO certification

CEO certification by Mr N Ramanathan, Managing Director and CFO certification by Mr K Yokanathan, Chief Financial Officer as required under Clause 49(V) of the Listing Agreement were placed before the Board at its meeting on 28th May 2010.

 Review of Directors' Responsibility Statement

The Board in its Report have confirmed that the annual accounts for the year ended 31st March 2010 have been prepared as per applicable accounting standards and policies and that sufficient care has been taken for maintaining adequate accounting records.

 Auditor's Certificate on Corporate Governance

Certificate of Statutory Auditors has been obtained on the compliance of conditions of Corporate Governance in deference to Clause 49(VII)(1) of the Listing Agreement and the same is annexed. Copy of the certificate is furnished to the Stock Exchanges as required.



Compliance with non-mandatory requirements

 Board

The Chairman is non-executive but does not maintain an office at the Company’s expense. The tenure of no Independent Director has exceeded 9 years from the date when the new Clause 49 became effective. The Company ensures that every independent director has the requisite qualification and experience that would be of use to the Company and which, in the opinion of the Company, would enable him to contribute effectively to the Company in his capacity as an independent director.

 Remuneration Committee 
The Company has a Remuneration Committee vide details furnished supra.

 Shareholders' Rights

Quarterly Audited Results on the Company’s financial performance are mailed to shareholders on request. These are posted on the Company’s Website and advertised in newspapers.
 
SEBI by Circular dt.26/04/07 has directed Stock Exchanges to amend Clause 32 of Listing Agreement. This is to facilitate circulation of Abridged Accounts in lieu of full-fledged Annual Report. The Company has however not exercised this option and continues to send Annual Report in full form to all shareholders.

 Audit Qualification

The Company from inception has ensured to remain in the regime of unqualified financial statement.


 Others

All the Directors are well versed in the business model of the Company. Detailed presentations are made by Senior Executives and Professionals followed by full-length discussions at Audit Committee/ Board Meetings. Considering same, no formal training of Board members or peer review of the performance of non-executive Directors is arranged.
 
The Company has an informal work atmosphere where employees have direct access to top management including the Chairman and other non-executive Directors. Hence institution of a formal Whistle Blower Policy is not considered warranted.
Additional Disclosures
The Company has no unclaimed shares that require to be credited to a suspense account. Accordingly disclosures under Clause 5A of the Listing Agreement are not applicable.
 
No loan or advance in the nature of loan was made during or outstanding at the close of the year to Associates or Firms/ Companies in which a director of the company is interested. Accordingly no disclosure in terms of Clause 32 on this score is applicable.
 
Promoters and Promoter Group have not pledged any part of their shareholding in the Company. This factual position is reflected in the shareholding pattern furnished to Stock Exchanges and Financial Statements published for each quarter.
 
Pursuant to directions of SEBI, Stock Exchanges have amended Clause 41 of the Listing Agreement which stipulates that limited review / audit reports shall be given only by an Auditor who has subjected himself to the peer review process and holds a valid certificate issued by the Peer Review Board of the ICAI. The statutory auditors of the Company M/s R Subramanian and Company and M/s Maharaj N R Suresh & Co have undergone the peer review process and been issued requisite certificate that were placed before the Audit Committee.


 Means of Communication 

Intimation of Board meeting
After the amendment to Clause 41 of the Listing Agreement in July 2007, the Company publishes Notice of Board Meeting to consider financial results in newspapers.

 Financial Results - All audited 


Period Date of Pub of Notice of Board Meeting Financial Results Newspaper
Date of app. by Board Date of Publication
Quarter ended 30.06.2009

09.07.2009

22.07.2009 23.07.2009

Business line &  Makkal Kural 

Quarter ended 30.09.2009

07.10.2009

23.10.2009 24.10.2009

Business line & Makkal Kural 

Quarter ended 31.12.2009

06.01.2010

21.01.2010  22.01.2010

Business line & Makkal Kural 

Year ended
31.03.2010

01.05.2010

28.05.2010 29.05.2010*

Business line & Makkal Kural 

* Publication arranged


The results published also show as footnote relevant additional information and/or disclosures to the investors. Financial results are-

(a) faxed to Stock Exchanges immediately after the conclusion of the Board meeting;

(b) filed on the Electronic Data Information Filing and Retrieval (EDIFAR) website maintained by National Informatics Centre (NIC), online, in the format prescribed by SEBI;

(c) posted on the company’s website www.ponnisugars.com which displays official news releases of the company as well; and

(d) mailed to shareholders on request. SEBI vide its circular dt.16.4.2010 has discontinued the system of filing through EDIFAR effective 1.4.2010.

No presentation was made during the year to institutional investors or to analysts.

 

General Shareholder Information

A separate section has been included in the Annual Report furnishing various details viz. AGM time and venue, share price movements, distribution of shareholdings etc.

Corporate Goverance Voluntary Guidelines 2009

Ministry of Company Affairs (MCA) released in December 2009 the “Corporate Governance Voluntary Guidelines 2009”. While mandatory aspects for adoption by corporates are included in the Companies Bill 2009, the Voluntary Guidelines are intended to serve as a benchmark for corporates to help them achieve the highest standard of corporate governance.

MCA has observed that these guidelines do not substitute any extant law or regulation but are essentially for voluntary adoption by the corporates. It expects more and more corporates to voluntarily go forward to adopt these guidelines. Where there are genuine reasons for companies not being able to adopt some of these provisions, it expects such companies to inform their shareholders of the details of such non adoption.

Our Company has adopted most part of the Voluntary Guidelines while some of the new requirements would be addressed in due course. Considering the fact that the guidelines have come only towards the later part of the financial year, a more detailed report on this would be included from the next financial year.

CSR Voluntary Guidelines

MCA in December 2009 has released the “Corporate Social Responsibility Voluntary Guidelines 2009”. This is intended to assist the businesses to adopt responsible governance practices. The guidelines indicate some of the core elements that businesses need to focus on while conducting their affairs. These have been framed, factoring the governance challenges being faced in our country and the expectations of the society.

The Voluntary Guidelines underscore the fundamental principles of business. It further dwells on the core elements, viz. care for all stakeholders, ethical functioning, respect for workers’ rights and welfare, respect for human rights, respect for environment and activities for social and inclusive development. It also outlines implementation guidelines.

Our company has steadfastly stood for the principles stated in these Guidelines. It enjoys considerable goodwill of the neighbourhood residents based on transparency of dealings and fair practices followed all along. It would endeavour further to strengthen its focus and attention to abide by the spirit of these new Guidelines.

 

For Ponni Sugars (ERODE) Limited

N Gopala Ratnam
N Ramanathan
Chairman
Managing Director
Chennai
28th May 2010
 
   
                                                                                                             
AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of Ponni Sugars (Erode) Limited


We have examined the compliance of conditions of Corporate Governance by Ponni Sugars (Erode) Ltd. for the year ended 31st March 2010 as stipulated in the Clause 49 of the Listing Agreement of the said company with the Stock Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.

In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directors and the management, we certify that the company has complied with the conditions of Corporate Governance as stipulated in the abovementioned Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that as per the records maintained and certified by the Company / Registrars and Transfer Agent of the company, there were no investor grievances remaining unattended / pending for more than 30 days as at 31st March 2010.

We further state that such compliance is neither an assurance as to the future viability of company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

 

For Maharaj N R Suresh & Co                                          For R Subramanian And Company FRN No.001931S                                                                                              FRN No.004137S Chartered Accountants                                                                            Chartered Accountants

N R Suresh                                                                                                            A Ganesan Partner                                                                                                                          Partner Membership No. 21661                                                                             Membership No. 21438

 Chennai                                                                                                                                28th May 2010