1. Company's Governance Philosophy
The Corporate Governance Code was introduced by the Securities and Exchange Board of India (SEBI) through the incorporation of new clause in the Listing Agreement of the Stock Exchanges and also through applicable provisions of the Companies Act, 2013. Corporate Governance refers to a combination of laws, regulations, procedures, implicit rules and good corporate practices which ensure that a Company meets obligations to optimize shareholders value and fulfill its responsibilities to the community, customers, employees, Government and other segments of society. Some of the important best practices of corporate governance framework are timely and accurate disclosure of information regarding the financial situation, performance, ownership and governance of the Company.
Over the years, your Company has complied with the principles of Corporate Governance emphasizing on transparency, empowerment, accountability and integrity. These have helped the Company enhance its stakeholder values.
Your Company will continue to focus its resources, strengths and strategies for creation and safeguarding of shareholders' wealth and at the same time protect the interests of all its shareholders while upholding the core values of excellence, integrity, responsibility, unity and understanding which are imperative to the Himatsingka Group.
2. Board of Directors (Board)
As on March 31, 2015 the Board of the Company comprised of nine Directors. The Company has a Non-Executive Chairman. The number of Non-Executive Directors is five, four of them being independent directors. The composition of the Board is in accordance with the Clause 49 of the Listing Agreement and exceeds the percentages stipulated in the subject clause.
The Non-Executive Directors are professionals with rich experience in management, finance, law and banking.
None of the Directors on the Board is a Member on more than 10 Committees and Chairman of more than 5 Committees (as specified in Clause 49 of the listing agreement), across all the companies in which he is a Director. All the directors have made the necessary disclosures regarding their Committee positions in other companies as on March 31, 2015.
3. Audit Committee
An independent Audit Committee in line with the Clause 49 of the listing agreement and Section 292A of the Companies Act, 1956 was set up on 13th January 2001. Since the constitution of the committee is in line with the requirements under section 177 of the Companies Act, 2013 as well, no changes were required to be made to the committee structure during the year, however, the functions of the Audit Committee were modified to bring the same in line with the Companies Act, 2013.
The Audit Committee of the Board, inter alia, provides reassurance to the Board on the existence of an effective internal control environment that ensures:
• efficiency and effectiveness of operations;
• safeguarding of assets and adequacy of provisions for all liabilities;
• reliability of financial and other management information and adequacy of disclosures;
• compliance with all relevant statutes.
The functions of the Committee include the following:
• The recommendation for appointment, remuneration and terms of appointment of auditors of the company;
• Review and monitor the auditor's independence and performance, and effectiveness of audit process;
• Examination of the financial statement and the auditors' report thereon;
• Approval or any subsequent modification of transactions of the company with related parties;
• Scrutiny of inter-corporate loans and investments;
• Valuation of undertakings or assets of the company, wherever it is necessary;
• Evaluation of internal financial controls and risk management systems;
• Monitoring the end use of funds raised through public offers and related matters.
• Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
• Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
• Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:-
a. Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Significant adjustments made in the financial statements arising out of audit findings
e. Compliance with listing and other legal requirements relating to financial statements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report
• Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
• 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;
• Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
• 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;
• Discussion with internal auditors of any significant findings and follow up there on;
• 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;
• Discussion with 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;
• To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
• To review the functioning of the Whistle Blower mechanism;
• Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
The minutes of the Audit Committee meetings are placed before the Board of Directors in the subsequent Board Meeting.
During the year 2014-15, the Audit Committee met on four occasions i.e. May 15, 2014, August 7, 2014, November 11, 2014 and February 11, 2015. The necessary quorum was present in all the meetings.
The Chairman of the Audit Committee was present at the last Annual General Meeting.
The Statutory Auditor, Internal Auditor, and the Chief Financial Officer are invited to attend and participate at meetings of the Committee.
The Company Secretary acts as the secretary to the Committee.
4. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board comprises of three Independent Directors. During the year 2014-15, the Remuneration Committee met on May 15, 2014 & February 11, 2015.
The annual compensation of the Executive Directors is approved by the Remuneration Committee within the parameters set by the shareholders at their meetings.
The committee has devised a Nomination and Remuneration policy in line with the requirements under the Companies Act, 2013 and under the Listing Agreement. The Policy is enclosed as an annexure to the Directors' Re
Reappointment of directors
In accordance with the provisions of the Companies Act, 2013, and Articles of Association of the Company, Mr. A.K. Himatsingka retires by rotation and being eligible, offers himself for re-appointment. His re-appointment will be placed as one of the agenda in the ensuing Annual General Meeting.
5. Remuneration and Shareholding of Directors
The Company pays remuneration by way of salary, perquisites and allowances (fixed component) and commission (variable component) to the Managing and Executive Directors. Commission is calculated with reference to net profits of the Company in a particular financial year and is determined by the Board of Directors at the end of the financial year, subject to overall ceiling stipulated in Sections 197 of the Companies Act, 2013 (Section 198 of the erstwhile Companies Act, 1956). The remuneration is closely linked to the performance of the Company.
Criteria for making payments to non-executive Directors:
The Non-Executive Directors (NEDs) are paid remuneration by way of Commission and Sitting Fees. In terms of the shareholders' approval obtained at the AGM held on September 23, 2014 for a period of five years commencing from April 1, 2014, the Commission is paid at a rate not exceeding 1% per annum of the profits of the Company computed in accordance Section 197 of the Companies Act, 2013.The approval for payment of commission to NEDs is valid upto 31st March, 2019.
A sitting fee of Rs. 10,000/- for attendance at each meeting of the Board, Audit Committee, Remuneration Committee, Risk Management Committee and Independent Directors' meeting is paid to its Members (excluding Executive Directors).
The Company also reimburses out-of-pocket expenses to Directors for attending meetings.
6. Share Transfer Committee
The Company has a Share Transfer Committee. This comprises three directors. The Committee deals with various matters relating to share transfer, share transmission, issue of duplicate share certificates, the approval of split and consolidation requests, the de-materialisation and re-materialisation of shares as well as other matters that relate to the transfer and registration of shares. The members of this committee are D.K. Himatsingka, A.K. Himatsingka and Aditya Himatsingka.
7. Stakeholders Relationship Committee
The Company has a Stakeholders Relationship Committee comprising of three directors and the chairman is an independent, non executive director. The Committee looks into redressing of shareholder and investors complaints like transfer of shares, non receipt of balance sheet, non receipt of declared dividend and related matters.
Four meetings of the committee were held during the year - on May 15, 2014, August 7, 2014, November 11, 2015 and February 11, 2015. The Chairman of the Committee was present in all the meetings.
The minutes of the Stakeholders Relationship Committee meetings are placed before the Board of Directors in the subsequent Board meeting.
8. Risk Management Committee
The Board constituted a Risk Management Committee on July 28, 2009. The Committee's prime responsibility is to implement and monitor the risk management plans and policy of the Company.
During the year, two meeting of the committee was held on September 20, 2014 and March 30, 2015.
The minutes of the Risk Management Committee meetings are placed before the Board of Directors in the subsequent Board meeting
9. Corporate Social Responsibility
The Board constituted a Corporate Social Responsibility Committee on May 15, 2014.
During the year two meetings of the committee were held on November 11, 2014 and February 11, 2015.
Procedure for Postal Ballot:
In compliance with Clause 35B of the Listing Agreement and Section 108,110 and other applicable provisions of the Companies Act, 2013, read with the related rules, the Company provided electronic voting facility to all its Members, to enable them to cast their votes electronically. The Company engaged the services of M/s Karvy Computershare Pvt. Ltd for the purpose of providing e-voting facility to all its Members. The Members had the option to vote either by physical ballot or e-voting. The Company dispatched the postal ballot notices and forms along with postage business reply envelopes to its Members whose names appeared on register of members / list of beneficiaries as on a cut-off date. The postal ballot notice was sent to the Members in electronic form to the e-mail addresses registered with their depository participant (in case of electronic shareholding) / the Company's registrar and share transfer agents (in case of physical shareholding).
The Company also published a notice in the newspaper declaring the details of completion of dispatch and other requirements as mandated under the Act and applicable Rules.
Voting rights were reckoned on the paid-up value of the shares registered in the names of the Members as on the cut-off date. Members desiring to exercise their votes by physical ballot forms were requested to return the forms duly completed and signed, to the scrutinizer on or before the closure of the voting period. Members desiring to exercise their vote by electronic mode were requested to vote before closure of business hours on the last date of e-voting. The scrutinizer submitted his report to the Chairman, after the completion of scrutiny, and the consolidated results of the voting by postal ballot were then announced by the Chairman / authorised officer. The results were also displayed on the website of the Company, www.himatsingka.com besides being communicated to the stock exchanges, depository and registrar and share transfer agent. The date of declaration of the results by the Company is deemed to be the date of passing of the resolutions.
11. Means of Communication
a. The relevant information relating to the Directors who would be appointed/ re-appointed at the ensuing Annual General Meeting is given in the Notice convening the Annual General Meeting.
b. The Quarterly and Annual Financial Results of the Company are forwarded to the Stock Exchanges and were published in Business Standard - English Newspaper (all editions) and Business Line & Financial Express (all editions) and Vartha Bharati - Kannada newspaper, Bangalore.
c. The financial results and official news releases are also displayed on our website www.himatsingka.com and the website of the Company displays the Investor Updates and presentations made to the institutional investors and analysts from time to time.
d. Reminders for unclaimed dividend are sent to the shareholders, as per records, every year.
e. The Company has designated firstname.lastname@example.org as the Designated Exclusive email-id, for redressal of investor grievances.
12. Code for Prevention of Insider Trading
The Company has adopted a code of conduct for Prevention of Insider Trading in the shares of the Company. The code, inter-alia, prohibits purchase/sale of shares of the Company by employees while in possession of unpublished price sensitive information in relation to the Company.
13. CEO/CFO Certification
The CEO and CFO give quarterly and annual certification of the financial statements to the Board, as required under clause 49.
14. Reconciliation of Share Capital Audit
A qualified practicing Company Secretary carries out quarterly Reconciliation of Share Capital audits to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the aggregate of total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.
The certificate regarding compliance of the conditions of corporate governance obtained from our statutory auditors M/s. Deloitte Haskins & Sells is given elsewhere in this Annual Report.
16. Compliance Officer
The name and designation of the Compliance Officer of the Company is :-Ashok Sharma,
Asso. Vice President - Treasury, Taxation & Company Secretary His contact details are - Telephone : 080- 22378000, Fax No. 080- 4147 9384 e-mail ID : email@example.com
a. Subsidiary Companies
i) None of the Company's Indian Subsidiaries fall under the definition of "material non listed Indian subsidiary as defined under the listing agreement"
ii) The Audit Committee of the Company reviews the financial statements and in particular the investments made by unlisted subsidiaries of the Company.
iii) The minutes of the board meetings of unlisted subsidiaries are periodically placed before the Board of the Company. The Board is periodically informed about all significant transactions and arrangements entered into by the unlisted subsidiaries of the Company.
b. Related party transactions
The statutory disclosure requirements relating to related party transactions have been complied within the Annual Accounts (Note 28)
There were no material transactions during the year 2014-2015 that are prejudicial to the interest of the Company.
c. Disclosure of Accounting Treatment
There is no deviation in following the treatments prescribed in any Accounting Standard in preparation of financial statements for the year 2014-15.
d. Whistle Blower Policy
A Whistle Blower Policy is adopted by the Company, the whistle blower mechanism is in vogue and no personnel has been denied access to the Audit Committee
e. Board Disclosures- Risk Management
The risk assessment and minimization procedures are in place and the Board is regularly informed about the business risks and the steps taken to mitigate the same. A report on Risk Management is included elsewhere in this Annual Report.
f. Familiarisation Programme and Training
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. In addition, presentations are made at the Board and Committee Meetings on the performance of the company along with subsidiaries and quarterly updates on relevant statutory changes. The details of familiarisation programmes for Independent Directors are posted on the website of the company at <http://www.himatsingka.com/corporate-governance.html>
g. Terms and Conditions of appointment of Independent Directors are posted on the website of the company at <http://www>. himatsingka.com/corporate-governance.html
h. The Management Discussion and Analysis report is included elsewhere in this Annual Report.
i. All the mandatory requirements have been duly complied with.
j. With regard to adoption of non-mandatory requirements, the Company has a non-executive director as its Chairman, it has appointed separate persons as Chairman and CEO, and the Internal Auditors report directly to the Audit Committee.
k. Statutory Compliance, Penalties and Strictures
The Company complied with all the requirements of the Stock Exchanges/ SEBI/ and other statutory authorities on all matters related to the capital markets during the last three years. There were no penalties or strictures imposed on the Company by the Stock Exchanges, the SEBI or any statutory authority on matters relating to capital markets.
18. General Shareholders' information Corporate
Himatsingka Seide Limited was incorporated at Bangalore, in the State of Karnataka, on January 23, 1985. The Corporate Identity Number (CIN) allotted to the Company by the Ministry of Corporate Affairs (MCA) is L17112KA1985PLC006647. The address of our Registered office is 10/24, Kumara Krupa Road, High Grounds, Bangalore 560 001.
Listing on Stock Exchanges Bangalore Stock Exchange Ltd Stock Exchange Towers, No. 51, 1st Cross, J C Road, Bangalore 560 027 Stock Exchange Code : HIMATSEIDE (During the year the stock exchange has voluntarily surrendered its recognition and has ceased to be an exchange)
Bombay Stock Exchange Ltd Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 Stock Exchange Code : 514043
National Stock Exchange of India Ltd Exchange Plaza, 5th Floor, Plot No. C/1, G Block Bandra-Kurla Complex, Bandra (E), Mumbai 400 051 Stock Exchange Code : HIMATSEIDE
Listing Fees Paid for 2014-2015 for all the above stock exchanges and for only BSE and NSE for 2015-2016
Custodial Fees Paid to Central Depository Services (India) Ltd for 2014-15. The Company has paid one time fees to National Securities Depository Limited. Demat ISIN : INE049A01027
Pursuant to Section 205C of the Companies Act, 1956, dividends that are unpaid/ unclaimed for a period of seven years from the date they became due for payment are required to be transferred by the Company to the Investor.
Annual General Meeting
15.09.2015 at 2.00 pm The LaLiT Ashok Bangalore, Kumara Krupa Road, High Grounds, Bangalore - 560 001
Financial year : 1st April to 31st March
Financial Calendar : Board Meetings for approval of
Financial Results for 1st Quarter 2015-16 : July- August 15, 2015
Financial Results for 2nd Quarter 2015-16 : October-November 15, 2015
Financial Results for 3rd Quarter 2015-16 : January- February 15, 2016
Annual Accounts 2015-16 : April- May 30, 2016
Date of Book Closure : 08.09.2015 to 15.09.2015 (both days inclusive)
Dividend payment date : on or before October 14, 2015
Share Transfers and other communication regarding share certificates, dividends, and change of address, etc., may be addressed to Karvy Computershare Private Limited
Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District Nanakramguda, Hyderabad - 500 032 Phone : (040) 6716 1559 Fax : (040) 2300 1153 E-mail : firstname.lastname@example.org
Share Transfer System
Share transfers are registered and returned within a period of 10/15 days from the date of receipt if the documents are in order. The Company obtains from a Company Secretary in Practice half-yearly certificate of compliance with the share transfer formalities as required under Clause 47(c) of the Listing Agreement with Stock Exchanges and files a copy of the certificate with the Stock Exchanges.
Dematerialisation of shares and liquidity
The equity shares of the Company are available for dematerialisation with National Securities Depository Limited (NSDL) and Central Depository Services of India Limited (CDSL). The equity shares of the Company have been notified by SEBI for settlement only in the demat form for all investors from 21st March 2000.
As on March 31, 2015, 98.55% of the Company's share capital is dematerialized and the rest is in Physical form. The Company's shares were regularly traded on the National Stock Exchange and Bombay Stock Exchange.
The Company's plants are situated at the following locations:
Drapery & Upholstery Unit : 23A KIADB Industrial Area, Veerapura Village, Doddaballapur Taluk PO - 561 203, Bangalore Dist., Karnataka, India.
Bed Linen Unit : Plot No. 1, SEZ, Textile Specific, KIADB Industrial Area, Gorur Road, Hanumanthapura PO, Hassan - 573 201, Karnataka, India.
Service of documents through electronic mode:
As a part of Green initiative, the members who wish to receive documents like the Notice convening the general meetings, Financial Statements, Director's Report, Auditors Report etc., through e-mail, may kindly intimate their e-mail address to Company/ Registrars (for shares held in physical form) and Depository Participants (for shares held in dematerialized form).
Other useful information to shareholders
• Equity shares of the Company are under compulsory demat trading by all investors, with effect from March 21, 2000. Considering the advantages of scripless trading, shareholders are requested in their own interest to consider de-materalisation of their shareholding so as to avoid inconvenience in future.
• Shareholders/Beneficial Owners are requested to quote their Registered Folio No./DP & Client ID Nos. as the case may be, in all correspondence with the RTA/ Company. Company has also designated an exclusive E-mail ID: email@example.com for effective investors' services where they can complain/ raise query and request for speedy and prompt redressal.
• Shareholders holding shares in physical form are requested to notify to the RTA/ Company, change in their address/ Pin Code number with proof of address and Bank Account details promptly by written request under the signatures of sole/ first joint holder. Shareholders may note that for transfer of shares held in physical form, as per circular issued by SEBI, the transferee is required to furnish copy of their PAN card to the Company/RTAs for registration of transfer of shares.
• Beneficial Owners of shares in demat form are requested to send their instructions regarding change of name, bank details, nomination, power of attorney, etc., directly to their Depository Participants only. Non-resident members are requested to immediately notify the following to the Company in respect of shares held in physical form and to their Depository Participants in respect of shares held in dematerialized form:
Indian address for sending all communications, if not provided so far;
Change in their residential status on return to India for permanent settlement;
Particulars of the Bank Account maintained with a bank in India, if not furnished earlier; and
E-mail ID and Fax No(s), if any.
• In case of loss/ misplacement of shares, investors should immediately lodge FIR/Complaint with the Police and inform to the Company along with original or certified copy of FIR/ Acknowledged copy of the Police complaint.
• For expeditious transfer of shares, shareholders should fill in complete and correct particulars in the transfer deed. Wherever applicable, registration number of Power of Attorney should also be quoted in the transfer deed at the appropriate place.
• Shareholders are requested to keep record of their specimen signature before lodgement of shares with the Company to obviate the possibility of difference in signature at a later date.
• Shareholders of the Company, who have multiple accounts in identical names(s) or holding more than one Share Certificate in the same name under different Ledger Folio(s), are requested to apply for consolidation of such Folio(s) and send the relevant Share Certificates to the Company.
• Section 72 of the Companies Act, 2013 extends nomination facility to individuals holding shares in physical form in Companies. Shareholders, in particular those holding shares in single name, may avail of the above facility by furnishing the particulars of their nominations in the prescribed Nomination Form.
• Shareholders are requested to give their valuable suggestions for improvement of the Company's investor services.
Investors' correspondence may be addressed to Ashok Sharma, Associate Vice President - Treasury, Taxation & Company Secretary, Himatsingka Seide Limited, 10/24, Kumara Krupa Road, High Grounds, Bangalore 560 001. Phone (080) 2237 8000 Fax (080) 4147 9384, e-mail: firstname.lastname@example.org
Mandatory/Non Mandatory Requirements
The Company has complied with all the mandatory requirements of clause 49 of the Listing agreement relating to Corporate Governance. With regard to the non-mandatory requirements of clause 49, The Company has a non-executive director as its Chairman, it has appointed separate persons as Chairman and CEO, and the Internal Auditors report directly to the Audit Committee.
As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, all Board members and Senior Management Personnel have affirmed compliance with Himatsingka Seide Limited Code of Business Conduct and Ethics for the year ended March 31, 2015.
Date: July 23, 2015