(A) Institutionalized decision-making process:

BOARD OF DIRECTORS

The Company has an optimum combination of Executive & Non-Executive Directors on the Board. The Board comprises two  Executive Directors and  Two  Non- Executive Independent  Directors. It also has three eminent members as Advisors to Board. With a view to institutionalize all corporate affairs and setting up systems and procedures for advance planning for matters requiring discussion/ decisions by the Board, the Company has defined guidelines for the meetings of the Board of Directors and Committees thereof. These Guidelines seek to systematize the decision-making process at the meetings of Board/Committees, in an informed and efficient manner.

(B) Scheduling and selection of Agenda items for Board /Committee Meetings:

(i)The meetings are convened by giving appropriate advance notice after obtaining approval of the Chairman of the Board/ Committee. Detailed agenda, management reports and other explanatory statements are circulated in advance in the defined agenda format amongst the members for facilitating meaningful, informed and focused decisions at the meetings. To address specific urgent need, meetings are also being called at a shorter notice. In case of exigencies or urgency Resolutions are passed by circulation.

(ii)Where it is not practicable to attach any document or the agenda is of confidential nature, the same is tabled with the approval of CMD. In special and exceptional circumstances, additional or supplemental item(s) on the agenda are permitted. Sensitive subject matters are discussed at the meeting without written material being circulated.

(iii)The agenda papers are prepared by the concerned officials, sponsored by the concerned functional Directors and submitted for obtaining approval of the Chairman and Managing Director, well in advance. Duly approved agenda papers are circulated amongst the Board members by the Company Secretary and by the respective convener of the Committee.

(iv)The meetings of the Board/Committees are generally held at the Company’s Registered Office in Mumbai.

(v) The Board/Committee is given presentations covering Finance, Production, Operations, major Business Segments, Human Resources, Marketing, Joint Venture operations etc. of the Company and for taking on record quarterly / annual financial statements at the pre-scheduled Board/Committee meetings.

(vi) The members of the Board/Committee have complete access to all information of the Company. The Board is also free to recommend inclusion of any matter in agenda for discussion. Senior management officials are called to provide additional inputs to the items being discussed by the Board/Committee, as and when necessary.

(C) Recording minutes of proceedings at the Board Meeting:

Minutes of the proceedings of each Board/Committee meeting are recorded. Draft minutes are circulated amongst all members of the Board/ Committee for their critical appreciations and comments. The comments are incorporated in the minutes, which are finally approved by the Chairman of the Board/Committee. These minutes are confirmed in the next Board/Committee Meeting. The finalized minutes of the proceedings of the meetings are entered in the Minutes Book.

(D) Follow-up mechanism:

The guidelines for the Board/Committee Meetings facilitate an effective post meeting follow-up, review and reporting process for the action taken on decisions of the Board and Committee. Functional Directors submit follow-up Action Taken Report (ATR) on the areas of their responsibilities, at least once in a quarter, on the decisions/ instructions/directions of the Board.

(E) Compliance:

Every functional Director while preparing the agenda notes is responsible for and is required to ensure adherence to all the applicable provisions of law, rules, guidelines etc. The Company Secretary has to ensure compliance to all the applicable provisions.

A Quarterly Compliance Report (collected from all work centers) confirming adherence to all the applicable laws, rules, guidelines and internal instructions/manuals including on Corporate Governance is reviewed by the Audit & Ethics Committee and the Board.

Role of the Company Secretary in overall governance process:

The Company Secretary plays a key role in ensuring that the Board procedures are followed and regularly reviewed. The Company Secretary ensures that all relevant information, details and documents are made available to the Directors and senior management for effective decision-making at the meetings. The Company Secretary is primarily responsible to ensure compliance with applicable statutory requirements and is the interface between the management and regulatory authorities for governance matters. All the Directors of the Company have access to the advice and services of the Company Secretary.

Board Committees:

In Compliance with both the mandatory and non-mandatory requirements under the Listing Agreement and the applicable laws, the Board has constituted the following committees:

(i) Audit and Ethics Committee

(ii) Investment Committee 

(iii) Financial Management Committee

(iv) Business Development Committee 

(v) Corporate Governance Committee

(vi) Risk Management Committee 

AUDIT AND ETHICS COMMITTEE

The role of the Audit & Ethics Committee includes the following:

a) Overseeing financial reporting processes and the disclosure of financial information, to ensure that the financial statements are correct, sufficient and credible; 

b) Recommending to the Board, audit fees payable to Statutory Auditors appointed by C&AG and approving payments for any other services; 

c) Reviewing with management the periodic financial statements/results before submission to the Board, focusing primarily on: 

– matters required to be included in the Directors’ Responsibility Statement; 

– any changes in accounting policies and practices; – major accounting entries based on exercise of judgement by the management; 

– qualifications in draft audit report; 

– significant adjustments arising out of the audit;

– the going concern assumption;

– compliance with accounting standards;

– compliance with listing agreement and legal requirements concerning financial statements;

– any related party transactions i.e. transactions of the company of material nature, with promoters or the management, their subsidiaries or relatives etc. that may have potential conflict with the interest of the company at large;

d) Reviewing with the management, Statutory Auditors, Govt. Audit and Internal audit reports, adequacy of internal control systems and recommending improvements to the management;

e) Reviewing the adequacy of internal audit function, approving internal audit plans and efficacy of the functions including the structure of the internal audit department, staffing, reporting structure, coverage and frequency of internal audits;

f) Discussion with internal auditors any significant findings and follow-up thereon;

g) Reviewing the findings of any internal investigations by the internal auditors into the matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

h) Discussion with the Statutory Auditors before the audit commences, the nature and scope of audit, as well as post-audit discussion including their observations to ascertain any area of concern;

i) Reviewing the Company’s financial and risk management policies;

j) Reviewing Quarterly Compliance Report confirming adherence to all the applicable laws, rules, guidelines, instructions and internal instructions/manuals including on Corporate Governance principles;

k) Reviewing the management discussion and analysis of financial condition and results of operations, statement of significant related party transactions, management letters/letter of internal control weaknesses issued by the statutory auditors, internal audit reports; and

l) Reviewing the financial statements and in particular the investments made by the unlisted subsidiaries of the Company.

m) Matters relating to Corporate Governance including Ethics in business.

Minutes of the meetings of the Audit & Ethics Committee are approved by the Chairman of the Committee and are noted and confirmed by the Board in its next meeting. 

The terms of reference of the Audit and Ethics Committee are as follows:

1. Overseeing our Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.

3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

4. Appointment, removal and terms of remuneration of internal auditors

5. Reviewing, with the management, the quarterly, half-yearly and annual financial statements before submission to the Board for approval;

6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

7. Monitoring the use of the proceeds of the proposed initial public offering of our Company.

8. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems;

9. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit;

10. Reviewing management letters / letters of internal control weaknesses issued by the statutory auditors;

11. Discussion with internal and statutory auditors on any significant findings and follow up there on;

12. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected 

fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

13. Discussion with the statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

14. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of nonpayment of declared dividends) and creditors;

15. To review the functioning of the Whistle Blower mechanism, when the same is adopted by our Company and is existing;

16. Carrying out any other function as may be statutorily required to be carried out by the Audit Committee;

17. The Audit Committee shall mandatory review the following information: 

· Management discussion and analysis of financial condition and results of operations; 

· Statement of significant related party transactions (as defined by the audit committee), submitted by management; 

· Management letters / letters of internal control weaknesses issued by the statutory auditors; 

· Internal audit reports relating to internal control weaknesses; and 

· The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee. 

· Financial statements, in particular, the investments made by the unlisted subsidiary company. 

INVESTMENT COMMITTEE

The Terms of Reference of Investment Committee:

Subject to the powers and duties of the Board and to the requirements of the Companies Act, 1956, the Investment Committee will perform the following duties:

1. Investment Statements and Risk Policy: 

Review and recommend to the Board at least annually: 

· (a) the Investment Statements; and 

· (b) the Risk Policy.

2 Implementation of Investment Policies: 

Receive reports on the implementation of the Investment Statements and the Risk Policy. 

3 Compliance with Investment Statements and Risk Policy: Review, evaluate and approve procedures that Management has implemented to monitor compliance with the Investment Statements and the Risk Policy by receiving Management’s annual report on specified internal controls audited by the external auditor. 

4 External Managers – Criteria and Process for Selection: Oversee the criteria and process for the selection of external investment managers with discretionary authority to invest the assets of the CPP Investment Board.   

5 Engagements of External Managers: Approve the engagement of investment managers with discretionary authority to invest the assets of the CPP Investment Board. 

6 External Managers – Monitoring: Oversee the process for monitoring external investment managers with discretionary authority to invest the assets of the CPP Investment Board. 

7 Custodian: Approve the selection of custodians. 

8 Investment Transactions: Approve Investment Transactions (as defined in the Authorities Policy) specifically outlined in the Authorities Policy. 

9 Other: Carry out other duties as may be determined from time to time by the Board. 10. Accountability: The Investment Committee shall report its discussions to the Board by distributing the minutes of its meetings and, where appropriate, by oral reports at Board meetings. 

10) To assess the Plan recommended by the GEC and make appropriate recommendation to the Group Board. 

11) To review on an ongoing basis the appropriateness of the Plan in the light of economic and business conditions 

affecting the Company, and make recommendations for Board approval as may be appropriate. 

12) To ensure that investments are made in accordance with the Plan. 

13) To provide the Board quarterly reports on investment performance. 

14) To meet at least quarterly. 

15) To monitor performance, including the performance of outside investments managers, to ensure that investment returns fall within acceptable limits. 

16) To provide independent input to the Board on overall investment strategy and portfolio positioning matters, as required. 

17) To review the governance process and policies in place on an annual basis and provide appropriate assurance to the Board. 

18) To consider and if appropriate approve any specific investments in excess of Plan limits. 

19) To consider and if appropriate recommendations to the Board for approval of any changes in limit thresholds above which the Board refers to the Investment Committee. 

FINANCIAL MANAGEMENT COMMITTEE

The Terms of Reference of the Financial Management Committee, inter-alia, include the following: 

1.Review the Company’s financial policies, risk assessment and minimization procedures, strategies and capital structure, working capital, and cash flow management and make such reports and recommendations to the Board with respect thereto as it may deem advisable. 

2. Review banking arrangements and cash management

. 

3. Exercise all powers to borrow money (otherwise than by issue of debentures) within the limits approved by the Board and take necessary actions connected therewith including refinancing for optimization of borrowing costs. 

4. Giving of guarantees/issuing letters of comfort/ providing securities within the limits approved by the Board. 

5. Borrow monies by way of loan and/or issuing and allotting bonds/notes denominated in one or more foreign currencies in international markets, for the purpose of refinancing the existing debt, capital expenditure, general corporate purposes including working capital requirements and possible strategic investments within the limits approved by the Board. 

6. Provide corporate guarantee/performance guarantee by the Company within the limits approved by the Board. 

7. Approve opening and operation of Investment Management Accounts with foreign banks and appoint them as agents, establishment of representative/sales offices in or outside India etc. 

8. Carry out any other function as is mandated by the Board from time to time and/or enforced by any statutory notification, amendment or modification as may be applicable. 

9. Other transactions or financial issues that the Board may desire to have them reviewed by the Finance Committee. 

10. Delegate authorities from time to time to the executives/authorised persons to implement the decisions of the Committee. 

11. Regularly review and make recommendations about changes to the charter of the Committee. 

Business Development Committee

In order to oversee new areas of business, proposals for collaborations, Joint Ventures, amalgamation, mergers and acquisitions; commercial matters including marketing etc. a Committee under the Stewardship of our Managing Director has been constituted during the year under review. 

The Terms of Reference of the Business Development Committee include the following: 

· Review and report to the Board on investment and business development strategies.

· Review tactical plans developed to achieve investment and business development goals set out in the Corporation’s Strategic Plan.  

· Review, monitor, and report to the Board on investment and business development opportunities. 

· Review the economic evaluations of potential investments and business development opportunities.  

· Review and recommend for the approval of the Board, the appropriate operating structure for potential investments and business developments. 

· Monitor compliance with the External Investment Policy, Processes and Guidelines for Subsidiary Companies, if any and the Significant Transactions Reporting Policy, as well as any other guidelines established by the Company relating to investments and business development. 

· Review and monitor Management reports regarding the proper due diligence for any investment or business development to be undertaken.

· Review and recommend for the approval of the Board investments or business development projects and initiatives. 

· Review and recommend to the Board for approval the business development aspects of the Company’s annual business plan. 

· Review and monitor the monetization of external investments. 

· When requested by the Board, review and report on the status and future outlook of existing investments and business developments held by the Company from time to time. Such review should include using approved corporate business plan. 

· Review and report to the Board on the effectiveness and timeliness of Management’s execution of specific investments that were approved by the Board. 

Corporate Governance Committee

The Board of Directors has constituted Corporate Governance Committee during the year under review.

Terms of Reference of Corporate Governance Committee:

· Observance of practices of Corporate Governance at all levels and to suggest remedial measures wherever necessary. 

· Provision of correct inputs to the media so as to preserve and protect the Company’s image and standing. 

· Dissemination of factually correct information to the investors, institutions and public at large. 

· Interaction with the existing and prospective FIIs and rating agencies, etc. 

· Establishing oversight on important corporate communication on behalf of the Company with the assistance of consultants/advisors, if necessary. 

· Ensuring institution of standardized channels of internal communications across the Company to facilitate a high level of disciplined participation. 

· Recommendation for nomination of Directors on the Board.