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 |
Mr N Gopala
Ratnam
Non-Executive Chairman, Promoter |
26.12.1996 |
2823 |
6 |
100 |
6 |
2 |
2 |
Y |
Dr L M Ramakrishnan
Independent |
26.10.2001 |
536 |
6 |
100 |
4 |
-- |
1 |
Y |
Mr Arun
G Bijur Promoter Group |
26.12.1996 |
100 |
6 |
100 |
4 |
1 |
2 |
Y |
Mr
Bimal Poddar
Promoter |
26.10.2001 |
NIL |
4 |
67 |
16 |
-- |
3 |
Y |
Mr C K Pithawalla
Promoter |
26.10.2001 |
500466 |
6 |
100 |
7 |
-- |
-- |
Y |
Mr N Ramanathan
Managing Director |
01.04.2005 |
3001 |
6 |
100 |
4 |
-- |
1 |
Y |
Mr S K Ramasamy
Independent |
26.10.2001 |
4480 |
6 |
100 |
1 |
-- |
-- |
Y |
Mr N
Ravindranathan Independent
|
26.10.2001 |
202 |
6 |
100 |
3 |
-- |
1 |
Y |
Mr V Sridar
Independent
|
05.06.2009 |
NIL |
6 |
100 |
7 |
2 |
4 |
Y |
Mr N R
Krishnan
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 |
