Tamil Nadu Newsprint and Papers : Download Corporate Governance 2020-21

41st Annual Report | 2020-2021

ANNEXURE- VII

REPORT ON CORPORATE GOVERNANCE

This Corporate Governance Report relating to the year ended on 31st March, 2021 has been issued in compliance with the requirements of Regulation 34(3) read with Clause of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forms part of the Report of the Directors to the Members of the Company.

1. MANDATORY REQUIREMENTS

1. Company's Philosophy
   TNPL's philosophy on Corporate Governance is to achieve high levels of integrity, equity and transparency in all its operations. The company believes that good Corporate Governance is essential for achieving long term goals and enhancing stakeholders' value. The Company's business objective is to manufacture and market products which create value that can be sustained over time for the benefit of customers, shareholders, employees, bankers and Government.
2. Board of Directors

1. Composition and Category of Directors
   As on 31st March, 2021, the Board consisted of Nine directors - a Chairman, Managing Director (Executive Director) nominated by GOTN and three non-executive Directors nominated by GOTN, and Five independent non-executive Directors including one woman director.

As per Regulation 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Board of Directors shall have an optimum combination of executive and non-executive directors with at least one woman director and not less than fifty percent of the Board of Directors shall comprise of non-executive directors. Where the chairperson of the Board of Directors is a non-executive director, at least one-third of the board of directors shall comprise of independent directors and where the listed entity does not have a regular non-executive chairperson, at least half of the Board of Directors shall comprise of independent directors provided that where the regular non-executive chairperson is a promoter of the listed entity or is related to any promoter or person occupying management positions at the level of Board of Director or at one level below the board of directors, at least half of the Board of Directors of the listed entity shall consist of Independent Directors.

The composition of the Board of Directors of TNPL complied with the provisions of Regulation 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Tvl. N. Narayanan, I.A.S., (Retd.), V. Chandrasekaran, Tmt. Soundara Kumar, P. B. Santhanakrishnan and Dr M. Arumugam are categorized as Independent Directors.

During the year 2020-21, following changes took place in the composition of the Board:

Sl. No.	Name of Director	Event Date	Appointment / Cessation
1.	Tmt Soundara Kumar	30.06.2020	Re Appointed as Director (2nd Term)
2.	Dr R. Anandakumar, I.A.S.,	19.10.2020	Appointed as Additional Director
3.	Tmt Reeta Harish Thakkar, I.A.S.,	19.10.2020	Ceased to be a Director
4.	Thiru V. Chandrasekaran	13.11.2020	Re Appointed as Director (2nd Term)

There is no inter se relationship between the directors.

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During the year 2020-21, following changes took place in the composition of the Key Managerial Personnel (KMP):

Sl. No.	Name of Director	Event Date	Appointment / Cessation
1.	Thiru V. Sivakumar	30.06.2020	Ceased to be Company Secretary
2.	Thiru B. Ravishankar	30.06.2020	Appointed as Company Secretary
3.	Thiru V. Ramanathan	31.05.2020	Ceased to be CFO and KMP
4.	Thiru R. Ramaseshan	11.11.2020	Appointed as CFO and KMP
5.	Thiru R. Ramaseshan	18.01.2021	Ceased to be CFO and KMP
6.	Tmt Sathya Ananth	11.02.2021	Appointed as CFO and KMP

Board Diversity

Your Company has over the years been fortunate to have eminent persons from diverse fields as Directors on its Board.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination

• Remuneration Committee has formalized a policy on Board Diversity to ensure diversity of experience, knowledge, perspective, background, gender, age and culture. The policy is posted on the Company's website and can be accessed on web link http://www.tnpl.com/.

Independent Directors

Based on the confirmations / disclosures received from the Directors and on evaluation of the relationships disclosed, all the Non-Executive - Independent Directors are independent in terms of provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All the directors have made necessary disclosures regarding Committee positions held by them in other companies and do not hold the office of Director in more than twenty companies, including ten public companies. None of the directors are related to each other.

The company has issued formal letters of appointment to independent directors in the manner as provided in the Companies Act, 2013.

The terms and conditions of appointment of independent directors have been disclosed on the company's website at www.tnpl.com

The Independent Directors on the Board are experienced, competent and highly respected persons. They take active part in the Board and Committee meetings. Necessary disclosures have been made by the Directors as required by SEBI.

Separate meeting of independent directors

During the year, the Independent Directors of the Company met separately without the presence of other Directors or management representatives on 25th March, 2021 to discuss:

• Evaluation of the performance of non-independent directors and the Board of Directors as a whole.
• Evaluation of the performance of the Chairman, taking into account the views of the executive and non- executive directors.
• Evaluation of the quality, content and timeliness of flow of information between the Management and the
  Board that is necessary for the Board to effectively and reasonably perform its duties.
• The Independent Directors discussed, among other matters, the performance of the company and risk faced by it, competition, strategy, leadership strengths and weaknesses, governance, compliance, Board movements and human resources matters.

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Familiarization Programme

The Company has framed familiarization programme for Independent Directors. The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarise with the Company's procedures and practices. A new Director is welcomed to the Board of Directors of the Company by sharing various documents and information of the Company for his/her reference such as brief introduction to the Company and profile of Board of Directors of the Company, details of various Committees of the Board, latest Annual Reports, Code of Conduct for Directors, Code of Conduct for Senior Management and Employees, Code of Conduct for Independent Directors, Code of Conduct for Prevention of Insider Trading in shares of the Company etc. Periodic presentations are made at the Board and Committee Meetings, on business and performance updates of the Company, business strategy and risks involved. This enables the Directors to get a deeper insight into the operations of the Company. Such presentations also provide an opportunity to the Independent Directors to interact with the Senior Management team of the Company and help them to understand the Company's policies, its long term vision and strategy, business model, operations and such other areas as are relevant from time to time. The Company updates the Board Members on a continuing basis on any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take a well-informed and timely decisions and contribute significantly to the Company.

All Directors are apprised of any changes in the codes or policies of the Company. The Board of Directors has access to the information within the Company which is necessary to enable them to perform their role and responsibilities diligently.

The Independent Directors, from time to time request management to provide detailed understanding of any specific project, activity or process of the Company. The management provides such information and training either at the meeting of Board of Directors or otherwise.

The Statutory Auditors and External Internal Auditors of the Company make presentations to the Board of Directors with regard to regulatory changes from time to time while approving the Financial Results.

The details of familiarization programme is disclosed at Company's website at www.tnpl.com.

Board Meetings Process

The Board plays a pivotal role in ensuring good governance. The Board's role, functions, responsibility and accountability are clearly defined. In addition to its primary role of setting corporate goals and monitoring corporate performance, it directs and guides the activities of the Management towards creating long term sustainable growth that benefits all stakeholders. The Board also sets standards of behavior and ethical conduct for all the employees.

It also ensures strict compliance with the law and all regulations by the Company. Board's key functions include:

1. Reviewing and guiding corporate strategy, major plans of action, risk policy, annual budgets and business plans, setting performance objectives, monitoring implementation and corporate performance and overseeing major capital expenditures, acquisitions and divestments.
2. Monitoring the effectiveness of the company's governance practices and making changes as needed.
3. Selecting, compensating, monitoring and when necessary, replacing key executives and overseeing succession planning.
4. Aligning key executive and Board remuneration with the longer term interests of the company and its shareholders.
5. Ensuring a transparent Board nomination process with the diversity of thought, experience, knowledge, perspective and gender in the Board.

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1. Monitoring and managing potential conflicts of interest of management, Board members and shareholders, including misuse of corporate assets and abuse in related party transactions.
2. Ensuring the integrity of the company's accounting and financial reporting systems, including the independent audit and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control and compliance with the law and relevant standards.
3. Overseeing the process of disclosure and communications.
4. Monitoring and reviewing Board Evaluation framework.

The notice of Board Meeting is given well in advance to all the Directors. The meetings are usually held at the company's Registered Office at 67, Mount Road, Guindy, Chennai 600 032. The Agenda and Pre-reads are circulated well in advance in the prescribed agenda format before each meeting to all the Directors for facilitating effective discussion and decision making. Where it is not practicable to attach any document to the agenda, the same is placed on the table at the meeting with specific reference to this effect in the agenda. With the permission of Chairman, in special and exceptional circumstances, additional or supplementary item(s) on the agenda are permitted.

All the seven Board Meetings were conducted through Video Conferencing (VC), the recoding of which are preserved by the Company, as required under the Companies Act, 2013 and the relevant Rules and Regulations made thereunder.

Sensitive subject matters may be discussed at the meeting without written material being circulated in advance of the meeting.

In case of business exigencies or urgency of matters, resolutions are passed by circulation and the same is placed before the Board in the next meeting.

Considerable time is spent by the Directors on discussion and deliberations at the Board Meetings..

Support and Role of Company Secretary

The Company Secretary is responsible for collation, review and distribution of all papers submitted to the Board and Committees thereof for consideration. The Company Secretary is also responsible for preparation of the Agenda and convening of the Board and Committee meetings. The Company Secretary attends all the Meetings of the Board and its Committees, advises/assures the Board on Compliance and Governance principles and ensures appropriate recording of minutes of the meetings. He acts as interface between the Board and the Management and provides required assistance and assurance to the Board and the Management on compliance and governance aspects.

Invitees & proceedings

Apart from the Board members, Company Secretary, Senior Management executives are invited as and when necessary, to provide additional inputs for the items being discussed by the Board. The Chief Financial Officer makes presentation on the quarterly and annual operating & financial performance and on annual operating & CAPEX budget. The Chief Financial Officer and other senior executives make presentations on CAPEX proposals & progress, operational health & safety, marketing & industry scenario and other business issues. The Chairman of various Board Committees brief the Board on all the important matters discussed & decided at the respective committee meetings, which are generally held prior to the Board meeting.

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1. Attendance of each Director at the Board of Directors' Meetings held during 2020-2021, the last AGM and number of other company/ies in which each of the directors of the company is a member or chairperson are as follows:

		No. of Board	Wheth-	Directorships	Committee*
		er	held in other	Memberships held
		meetings
Name of Director	Category	attend-	companies	in other companies
		Held	Attended	ed last	Director	Chairman	Member	Chairman
		AGM
Thiru N. Muruganandam, I.A.S.,	Non-	7	5	Yes	2	6	0	0
Executive
Thiru S. Sivashanmugaraja,	Executive	7	7	Yes	0	0	0	0
I.A.S.,
Managing Director
Thiru S. Krishnan I.A.S.,	Non-	7	7	No	11	0	4	2
Executive
Tmt Reeta Harish Thakkar,	Non-	4	3	No	0	2	0	0
I.A.S.,	Executive
Dr R. Anandakumar, I.A.S.	Non-	3	3	NA	1	3	0	0
(Appointed w.e.f 19.10.2020	Executive
Thiru N. Narayanan,	Independent
Non-	7	7	Yes	1	0	0	0
I.A.S.,(Retd.)
Executive
Tmt. Soundara Kumar	Independent
(Reappointed 2nd Term	Non-	7	7	Yes	6	0	2	2
from 30.06.2020)	Executive
Thiru V. Chandrasekaran	Independent
(Reappointed 2nd Term	Non-	7	7	Yes	9	0	2	3
from 13.11.2020)	Executive
	Independent		7	Yes	1	0	0	0
Thiru P. B. Santhanakrishnan	Non-	7
	Executive
	Independent
Dr M. Arumugam	Non-	7	6	Yes	3	0	0	0
	Executive

*Chairmanship / membership of the Audit Committee and Stakeholders' Relationship Committee has been taken.

None of the Directors on the Board is a member of more than 10 Committees and Chairman of more than 5 Committees as specified in Regulation 26 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 across all companies in India of which he is a Director.

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