CORPORATE GOVERNANCE REPORT
(As required under clause 49 of the Listing Agreement with Stock Exchanges)
Corporate Governance refers to a combination of regulations, procedures and voluntary practices that enable Companies to maximize shareholder's value by attracting financial and human capital and efficient performance. The Company believes that good corporate governance contemplates that corporate actions balance the interest of all shareholders and satisfy the tests of accountability and transparency. We have evolved guidelines and best practices over the years to ensure timely and accurate disclosure of information regarding our financials, performance, leadership and governance of the Company.
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
Transparency and accountability leading to management reliability are the touchstone of the Corporate Governance at SUMEET INDUSTRIES LTD. The ultimate objective of the Corporate Governance at SUMEET INDUSTRIES LTD is to enhance shareholder's value in the long term. However, the Corporate Governance at Sumeet Industries Ltd is continuously making efforts to implement sound governance practices with below objectives.
i) To enhance shareholders' value
ii) To comply applicable law, guidelines, rules and regulations
iii) To excel in customer satisfaction
iv) To ensure ethical corporate conduct
v) To maintain high degree of disclosure levels
vi) To concern for environment and sustainable development
2. BOARD OF DIRECTORS
(A) SUMEET INDUSTRIES LTD is having 7 Directors on its Board consisting of 3 Executive and 4 Non-Executive with Executive Chairman as on 31st March, 2015. None of the directors on the Board is a member of more than 10 committees and Chairman of more than 5 committees, across all the Companies in which they are directors
Meetings of Independent Directors
The Company's Independent Directors are required to meet at least once in every financial year without the presence of Executive Directors or management personnel. Such meetings are conducted informally to enable Independent Directors to discuss matters pertaining to the Company's affairs.
(B) NO. OF BOARD MEETINGS HELD AND DATES
During the Financial Year 2014-15, the Board meeting has been held for 15 times.
The Dates of the Board Meetings are:
3. COMMITTEES OF THE BOARD
I) AUDIT COMMITTEE
The Audit committee of the company comprises of 3 members, consisting of 1 Executive Director and 2 Non-Executive & Independent Directors. Mr. B. C. Chordia is the Chairman of the Audit Committee. The constitution of the Audit Committee meets the requirement of Section 177 of the Companies Act, 2013 as well as Clause 49 of the Listing Agreement. The Committee members have requisite experience in the fields of Finance & Accounts and Banking & Management. Mr. Anil Kumar Jain, Secretary of the company is the Secretary of the Audit Committee.
Audit committee of the company has been constituted as per requirement of Clause 49 of the Listing Agreement
During the financial year 2014-15, Audit Committee meeting was held 4 times. The necessary quorums were present at the meeting. The date of the meetings are as follows :- 01. 28.05.2014 02. 08.08.2014 03. 10.11.2014 04. 04.02.2015
The terms of the reference regarding role of the Audit committee are as under :-
1) 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;
2) Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
3) Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
4) Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval with particular reference to:
i) 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 subsection (3) of Section 134 of the Companies Act, 2013 (corresponding to sub-section (2AA) ofSection 217 of the Companies Act, 1956);
ii) Changes, if any, in accounting policies and practices and reasons for the same;
iii) Major accounting entries involving estimates based on the exercise of judgment by management;
iv) Significant adjustments made in the financial statements arising out of audit findings;
v) Compliance with listing and other legal requirements relating to financial statements;
vi) Disclosure of any related party transactions;
vii) Qualifications in the draft audit report.
5) Reviewing with the management, the quarterly 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 utilised 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) Reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process;
8) Approval or any subsequent modification of transactions of the Company with related parties;
9) Scrutiny of inter-corporate loans and investments; Valuation of undertakings or assets of the Company, wherever it is necessary;
10) Evaluation of internal financial controls and risk management systems;
11) Reviewing, with the management, performance of statutory auditors, including cost auditors and internal auditors, adequacy of the internal control systems;
12) 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;
13) Discussion with Internal Auditors of any significant findings and follow up there on.
14) 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.
15) 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;
16) To look into the reasons for substantial defaults, if any, in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
17) To review the functioning of the Whistle Blower mechanism;
18) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee and shall have the functions/role/powers as may be specified in the Companies Act, Listing Agreement with Stock Exchanges or any other applicable law.
19) Review financial statements, in particular the investments made by the Company's unlisted
20) Appointment, removal and terms of remuneration of the Internal Auditor shall be subject to review by the Audit Committee.
II) NOMINATION AND REMUNERATION COMMITTEE
In accordance with the provisions of the Companies Act, 2013 and the rules made there under and the Listing Agreement, the Remuneration Committee is renamed as "Nomination and Remuneration Committee". The Nomination and Remuneration Committee was re-constituted by the Board on 04.10.2014 considering the requirement of the Companies Act, 2013. The Nomination and Remuneration Committee now comprises of four members viz; Mr. B. C. Chordia, Mr. Sumeet Kumar Somani, Mr. Atma Ram Sarda and Smt. Gangadevi Somani.
Besides above, the Company has not paid any sitting fees to the Non-Executive/Independent Directors.
Remuneration Committee meeting held on 20/05/2014 and 26/03/2015 during the year.
The remuneration is recommended by the Remuneration Committee based on criteria such as qualification & experience, industry benchmarks, the Company's performance vis-a-vis the industry, responsibilities shouldered, performance / track record etc. and is decided by the Board of Directors. The Board, on the recommendations of the Remuneration Committee, approves the annual increments.
The terms of the reference regarding role of the Remuneration committee are as under:-
1) To formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.
2) Formulation of criteria for evaluation of Independent Directors and the Board;
3) Devising a policy of Board diversity Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.
4) To frame company's policies for compensation and benefits for Executive Directors.
5) To review HR Polices and initiatives.
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 to assist and advise the Board in the conduct of affairs of the Company, to ensure compliance with applicable statutory requirements and Secretarial Standards, to provide guidance to directors and to facilitate convening of meetings. He interfaces between the management and regulatory authorities for governance matters.
Ill) STAKEHOLDERS' RELATIONSHIP COMMITTEE
In accordance with the provisions of the Companies Act, 2013 and the rules made there under and the Listing Agreement, the Investor Grievance Committee is renamed as "Stakeholders Relationship Committee" and was reconstituted by the Board on 11.08.2014. The Stakeholders Relationship Committee now comprises of three members viz; Mr. B. C. Chordia, Mr. Sumeet Kumar Somani and Mr. Atmaram Sarda. Mr. B. C. Chordia, Chartered Accountant is the Chairman of the Stakeholders Relationship Committee. It consists of two Non-Executive Directors and one Executive Director.
The Stakeholders Relationship Committee is looking for redressal of Investors' complaints like Transfer of Shares, Issue of Duplicate/Replacement/Split Shares, and Non-receipt of rights, Bonus and Non-receipt of Balance Sheet/Dividends/Bonus Shares etc.
The number of complaints/requests received from the shareholders during the financial year 2014-15 and the number of pending complaints is given below :
Received during the year 2014-2015 26
Pending as on 31/03/2015 NIL
The Stakeholders' Relationship Committee's composition and the terms of reference meet with requirements Clause 49 of the Listing Agreement and provisions of the Companies Act, 2013. The Committee meets as and when need. All the requests for share transfer etc. were processed and the related share certificates were dispatched within 15 days from the date of receipt.
Number of pending shares transfer as on 31/03/2015 : NIL
IV) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR COMMITTEE)
The "Corporate Social Responsibility Committee" (CSR Committee) shall institute a transparent monitoring mechanism for implementation of CSR projects or programmes, activities undertaken by the Company. The functions of CSR Committee are as follows:
i) To formulate and recommend to the Board, a Corporate Social Responsibility Policy, which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;
ii) To recommend the amount of expenditure to be incurred on the CSR activities;
iii) To monitor the Corporate Social Responsibility Policy of the Company from time to time;
iv) To prepare a transparent monitoring mechanism for ensuring implementation of the project / programmes / activities proposed to be undertaken by the Company.
The "Corporate Social Responsibility Committee" was re-constituted by the Board on 13/08/2015. The Corporate Social Responsibility Committee now comprises of three members viz ; Mrs. Gangadevi Shankarlal Somani, Mr. Sumeet Kumar Somani and Mr. Atma Ram Sarda. Mrs. Gangadevi Shankarlal Somani is the Chairman of the Corporate Social Responsibility Committee.
V. GENERAL INFORMATION TO THE SHAREHOLDERS
I) ANNUAL GENERAL MEETING (TENTATIVE)
Date : 30/09/2015,Wednesday
Time : 10:00 A.M.
Venue : Bombay Market Hall, Umarwada, Surat.
(II) FINANCIAL CALENDAR (TENTATIVE) :
Annual General Meeting September, 2015
Results for quarter ending June 30, 2015 on or before 14th August, 2015
Results for quarter ending Sept 30, 2015 on or before 14th November, 2015
Results for quarter ending Dec 31, 2015 on or before 14th February, 2016
Results for quarter ending March 31,2016 : on or before 30th May, 2016
III) SHARE TRANSFER SYSTEM:
Presently, the share transfers which are received in physical forms are processed and the certificates returned within a period of 15 days from the date of receipt, subject to documents being valid and complete in all respect. The Company has been offering as per SEBI guidelines the facilities of transfer cum demat. Under the system, after the share transfer is effected, an option letter is sent to the transferee indicating the details of transfer and requesting him in case he wishes to demat the shares, to approach a Depository Participant (DP) with the option letter. All transfers received are processed and approved by the Stakeholders Relationship Committee, which considers transfers and other related matter. The Stakeholders Relationship Committee, of the Company meets as often as required.
The Company has appointed M/s. Bigshare Services Pvt. Ltd. as "Registrar and Share Transfer Agent" as per SEBI directives to have common Registrar for Physical as well as Electronic Registrar.
"Registrar & Transfer Agent M/s Bigshare Services Private Limited has been launched Gen-Next Investor Module i'Boss the most advanced tool to interact with shareholders. Please login into i'Boss [www.bigshareonline.com ] which facilitate to serve better."
(IV) DEMATERIALIZATION OF SHARES AND LIQUIDITY :
The Company's shares are available for dematerialization on both the Depositories viz National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Shares of the company are compulsorily to be delivered in the demat form on Stock Exchange by all investors. As on 31st March, 2015 about 94.67% of the issued capital have already been dematerialized. Shares of the company are listed at 'BSE Limited' & 'National Stock Exchange of India Limited' and being trading regularly. Demat ISIN number of the Equity Share of the Company is INE235C01010.
Those shareholders whose shares are still held in physical form are requested to dematerialize the same at the earliest. Thus investor can exercise dem Participant (DP) who is connected to NSDL or CDSL.
(V) BANK MANDATE FOR DIVIDEND :
As per SEBI guidelines, it is mandate dividend warrants. Those members, requested to furnish the same immediately either to their DP or to the Registrar of the Company.
(VI) UTSTANDING GDRS/ADRS/ WARRANTS OR ANY CONVERTIBLE INSTRUMENTS :
ADDRESS FOR CORRESPOND
Unit: Sumeet Industries Limited Investor Correspondence : Big;
E-2/3, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri (E), Mumbai- 400 072.
Ph. : 022-40430200/28470652
(VII) BOOK CLOSURE :
The books will be closed from Thursday, the 24th September, 2015 to Wednesday, the 30th September, 2015 (both days inclusive) as annual closure for the Annual General Meeting
(VIII) DIVIDEND DATE: NIL
(IX) LISTING :
Equity shares of Sumeet Industries Limited are listed on the BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).
(X)STOCK CODES :
BSE : 514211
NSE : SUMEETINDS
ISIN No. : INE235C01010
All listing and custodial fees to the Stock Exchanges and depositories have been paid to the respective institutions
(XI) NOMINATION :
Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose name the shares shall be transferable in case of death of the registered shareholder(s). Nomination facility in respect of shares held in electronic form is also available with the Depository Participants as per the bye-laws and business rules applicable to NSDL and CDSL. Nomination form can be obtained from the Company's Registrar and Share Transfer Agent.
(XII) NSE ELECTRONIC APPLICATION PROCESSING SYSTEM (NEAPS) :
The NEAPS is a web-based application designed by NSE for corporate. All periodical compliance filings like Shareholding Pattern, Corporate Governance Report, Audited/Un-audited Financial Results are filed electronically on NEAPS.
(XIII) BSE CORPORATE COMPLIANCE & LISTING CENTRE (THE 'LISTING CENTRE') :
BSE's Listing Centre is a web-based application designed for corporate. All periodical compliance filings like Shareholding Pattern, Corporate Governance Report, Media Releases, Audited/Unaudited Financial Results are also filed electronically on the Listing Centre.
(XIV) SEBI COMPLAINTS REDRESS SYSTEM (SCORES) :
The investor complaints are processed in a centralised web-based complaints redress system. The salient features of this system are: Centralised database of all complaints, online upload of Action Taken Reports (ATRs) by concerned companies and online viewing by investors of actions taken on the complaint and its current status.
(XV) PLANT LOCATION :
Block No. 289-291-292, Vill PIN- 394 110.
Karanj, Tal : Mandvi, Dist : Surat (Gujarat)
Sumeet Industries Limited is the Manufacturer and Exporter of Polyester Chips, Polyester Filament Yarn (POY & FDY), Texturised Yarn and Carpet Yarn.
XVI) REGISTERED OFFICE :
504, 5th Floor, Trividh Chambers, Opp. Fire Brigade Station, Ring Road, Surat- 395 002 (Gujarat)
Phone : 0261 - 2328902. Fax : 0261 - 2334189. E-mail : email@example.com
(XVII) REGISTRARS AND SHARE TRANSFER AGENTS :
M/S. Bigshare Services Pvt. Ltd. E-2/3, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri (E), Mumbai-400072 Ph. : (022) 40430200, 28470652 Fax : (022) 28475207
5. DISCLOSURES OF NON-COMPLIANCE BY THE COMPANY
A The transactions with the companies, where the Directors of the Company are interested were in the % normal course of business and there were no materially significant related party transactions that have potential conflict with the interest of the Company at large. The SEBI has imposed penalty of Rs.2.00 Crores exercising power conferred under Section 15-1 of the SEBI Act, 1992 and Rule 5 of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudication officer) Rules, 1995 for violation of Regulation 3 (b),(c),(d) and 4(1), 4(2) (a),(d),(e),(f) and (r) of PFUTP Regulations read with Section 12A (a) (b) & (c) of the SEBI Act vide order dated 20.02.2014 and restrain the company from accessing the securities market for the period up to 2 years in exercise of the power % conferred U/s. 19 of the SEBI Act read with section 11 and 11 B thereof and section 12 A of the SCRA Act, 1956 and regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practice relating to % Securities Market) regulation, 2003 vide order dated 21.05.2014.
6. MEANS OF COMMUNICATION
Quarterly/Half yearly results are not sent to the shareholders. However, Company's quarterly/half yearly financial results were published in English (Economic Times) and Gujarati news papers and were also sent to Stock Exchanges. Shareholders can also visit Company's website www.sumeetindustries.com to get more about the company. All price sensitive information is made available at the earliest through press release and presentation made to media on specific occasions.
7. RECONCILIATION OF SHARE CAPITAL AUDIT REPORT
Reconciliation of Share Capital Audit Report of the company in terms of SEBI circular no. D &CC/FITTC/CIR-16/2002, reconciling the total shares held in both the depositories, viz NSDL and CDSL and in physical form with the total issued / paid-up capital of the company were placed before the Board of Directors every quarter and also submitted to the stock exchanges every quarter.
A qualified practicing Company Secretary carried out reconciliation of Share Capital Audit 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 total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.
8. CEO AND CFO CERTIFICATIONS
The Chief Financial Officer of the company gives annual certification on financial reporting and internal controls to the Board in terms of Clause 49. The Chief Financial Officer also gives quarterly certification Agreement. The CFO certification of the financial statements for the year under review is enclosed
9. COMPLIANCE CERTIFICATE OF THE AUDITORS
Certificate from the Auditors of the Company, M/s Pradeep Singhi & Associates confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49, is attached to the Directors' Report forming part of the Annual Report. This Certificate has also been forwarded to the Stock Exchanges where the securities of the Company are listed.
10. CODE FOR PREVENTION OF INSIDER-TRADING PRACTICES
In compliance with the SEBI regulation on prevention of insider trading, the company has instituted a comprehensive code of conduct for its directors, management and staff. The code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of company, and cautioning them of the consequences of violations. The code clearly specifies, among other matters, that Directors and specified employees of the company can trade in the shares of the company only during 'Trading Window Open Period'. The trading window is closed during the time of declaration of results, dividend and material events, as per the Code.
11. VIGIL MECHANISM/WHISTLE BLOWERPOLICY
The Company has established a Vigil Mechanism (Whistle Blower) Policy for Directors and Employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The Vigil Mechanism shall provide adequate safeguards against victimization of Director(s) / Employee(s), who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The details of establishment of the vigil mechanism disclosed by the Company on its website.
12. DECLARATION UNDER CODE OF CONDUCT
As required under clause 49(D) of the Listing Agreement, it is hereby affirmed that all the Board members and senior management personnel have complied with code of conduct of the Company.