CORPORATE GOVERNANCE REPORT
1. PHILOSOPHY OF COMPANY ON CORPORATE GOVERNANCE
Good Governance ensures adoption of best business practices, and accountability of the person’s in-charge of the company’s operations. Your Directors are committed to good Governance practices and the company has been sharing all important information about its various business segments and operations of the company through Directors report, Quarterly Results, Chairman’s Statement and Annual Reports. Further as required by the listing agreement, report on Corporate Governance is given below.
2. CORPORATE GOVERNANCE PRACTICE
The Supreme Industries Limited maintains the highest standard of corporate governance; it is the Company’s constant endeavour to adopt the best Corporate Governance Practice.
3. ROLE OF COMPANY SECRETARY IN OVERALL GOVERNANCE PROCESS:
The Company Secretary plays a key role in ensuring that the Board and Committees 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 for assisting and advising the Board in conducting the affairs of the Company, to ensure the compliances with applicable statutory requirements, to provide guidance to Directors and to facilitate convening of Meetings. The Company Secretary interfaces between the Management and regulatory authority for governance matters.
4. BOARD OF DIRECTORS
The Supreme Industries Limited has a broad-based Board of Directors, constituted in compliance with the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 “Listing Regulations” and is in accordance with best practices in Corporate Governance.
THE DETAILS OF FAMILIARISATION PROGRAMMES IMPARTED TO INDEPENDENT DIRECTORS:
Brief Terms of reference:
An Appropriate induction programme for new Directors and ongoing familiarization with respect to the Business / working of the Company for all Directors is a major contributor for meaningful Board Level deliberations and sound business decisions.
The Company has adopted a structured programme for orientation of Independent Directors at the time of their joining so as to familiarise them with the Company’s operations, business, industry and environment in which it functions and the regulatory environment applicable to it. 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 the responsibilities so as to be in an position to take well-informed and timely decisions and contribute significantly to the Company.
The Company through its Managing Director / Executive Director / Senior Management Personnel makes presentations regularly to the Board, Audit Committee or such other Committees, as may be required, covering, inter alia, business environmental, business strategies, operations review, quarterly and annual results, budgets, review of Internal Audit Report and Action Taken, statutory compliance, risk management, etc.
The details of familiarisation programmes held for the Independent Directors is provided on the Company’s website.
8. INDEPENDENT DIRECTORS MEETING:
In Compliance with the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Independent Directors Meeting of the Company was held on 25th January, 2016. Independent Directors Meeting considered the performance of Non-Independent Directors and Board as whole, reviewed the performance of Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board. Shri Y. P. Trivedi is the Chairman of Independent Directors Meeting.
9. AUDIT COMMITTEE:
The Company has an independent Audit Committee. The composition, procedure, Role / Function of the committee complies with the requirements of the Companies Act, 2013 as well as those of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The brief terms of reference of the Audit Committee includes the following:
• Overseeing the Company’s financial report process and the disclosure of its financial information’s.
• To review quarterly, half yearly and Annual Financial results before submission to the Board.
• To review the statement of significant related party transactions submitted by management.
• To review the adequacy of internal control systems with the management, external & internal auditors.
• Discussion with external auditors about the nature and scope of audit including their observation.
• To investigate into any matter referred to by the Board
10. NOMINATION AND REMUNERATION COMMITTEE
(i) Brief Terms of reference:
• To formulate a criteria for determining qualifications, positive attributes and independence of a Director.
• Formulate criteria for evaluation of Independent Directors and the Board.
• Identify persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down in this policy.
• To carry out evaluation of every Director’s performance.
• To recommend to the Board the appointment and removal of Directors and Senior Management.
• To recommend to the Board policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management.
• Ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks.
• To devise a policy on Board diversity.
• To 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
iii) Performance evaluation criteria for Independent Directors:
• How well prepared and well informed the Independent Directors for the Board Meeting
• Is the attendance of Independent Directors at meetings satisfactory?
• Does Independent Director demonstrate a willingness to devote time and efforts learning about the Company and its Business
• What has been the quality and value of their contributions at Board Meeting?
• What has been their contribution to development of strategy and to risk management?
• How effectively have they followed up matters about which they have express concern?
• How good is their relationship with other Board members, the company secretary, and senior management.
• Are they up-to-date with the latest development in areas such as corporate governance framework and financial reporting and in the industry and market conditions?
• How well do they communicate with other Board members, senior management and others?
• Do the Independent Directors willing to participate in events outside Board meeting such as site visits?
• Does their performance and behavior promote mutual trust and respect within the Board?
(iv) Nomination and Remuneration Policy:
In accordance with Section 178 of the Act, the Committee has framed a Nomination and Remuneration Policy and the same set out as Annexure IV (A) to the Board Report
11. STAKEHOLDERS RELATIONSHIP COMMITTEE
The company has constituted Stakeholders Relationship Committee of the Board of Directors to look into the transfer of Equity Shares s/transmission of Equity Shares /issuance of duplicate Equity Share certificates, complaints received from the shareholders of the Company and other allied connected matters
b) Compliance Officer:
Shri R. J. Saboo AVP (Corporate Affairs) & Company Secretary is the Compliance Officer for complying with requirements of Companies Act, Securities laws and listing Agreements with Stock Exchanges.
c) During the year, the company received 175 complaints / correspondence from Shareholders regarding non-receipt of Share Certificates / issuance of Duplicate Share Certificates / Dividend Warrants etc. all of which except one have been duly resolved in time.
Terms of reference:
• Formulate and recommended to the Board, a CSR Policy.
• Recommend to the Board CSR activities to be undertaken by the Company.
• Monitor the CSR Policy of the Company from time to time and ensure its Compliance. Submit to the Board half-yearly / yearly report giving status of the CSR activities undertaken, expenditure incurred and such other details as may be required by it.
13. RISK MANAGEMENT COMMITTEE
The Board of Directors of the Company constituted a Risk Management Committee of the Board comprising Shri M. P. Taparia, Managing Director, Shri Rajeev M. Pandia, Independent Director, Shri R. Kannan, Independent Director and Shri P. C. Somani, CFO. The Chairman of the Committee is Shri M. P. Taparia
18. MEANS OF COMMUNICATION:
(i) The Quarterly results of the company are published in widely circulated newspapers such as The Economic Times (English), Business Standard & Maharashtra Times (Marathi). The results are also displayed on the company’s website: http://www.supreme.co.in.
(ii) Official News Releases:-
Official News releases and media releases are sent to the Stock Exchanges.
The Ministry of Corporate Affairs (‘’Ministry’’), Government of India, has taken a ‘’Green Initiative in Corporate Governance’’ by allowing paperless compliance by the Companies and clarified that the service of documents by the Companies can be made through Electronic Mode. Accordingly, as a contribution towards green environment, your Company also implemented the Initiative to send documents, such as Notice calling the general meeting, audited financial statements, directors’ report, auditors’ report, etc. in electronic form on the email id’s provided by the shareholders & made available by them to the company through the depositories.
(iii) Presentation made to Institutional Investor / Analysts:
Detailed presentation made to Institutional Investors and financial analysis’s is available on the Company’s website: http://www.supreme.co.in.
19. GENERAL SHAREHOLDER INFORMATION
i) AGM (Date, Time and Venue) : On Tuesday the 28th June, 2016 at 4.00 pm.
At Walchand Hirachand Hall, Indian Merchant’s Chamber, Near Churchgate Station, 76, Veer Nariman Road, Mumbai - 400 020.
(ii) Financial Year (for the period of 9 months) : 1st July, 2015 to 31st March, 2016, (9 Months)
(iii) Key Financial Reporting Dates F.Y. 2016-2017
Unaudited Results for the First Quarter ended June 30, 2016 : On or before 15th August, 2016
Unaudited Results for the Second Quarter ended September 30, 2016 : On or before 15th November, 2016
Unaudited Results for the Third Quarter ended December 31, 2016 On or before 15th February, 2017
Audited Results for the F.Y. 2016-2017 : On or before End 31st May, 2017
(iv) Date of Annual Book Closure (Both days inclusive) : From 22nd June, 2016, to 28th June, 2016
(v) Registered Office : 612, Raheja Chambers, Nariman Point, Mumbai 400 021.
(vi) Listing on Stock Exchanges :
(i) BSE limited.
(ii) National Stock Exchange of India Ltd., (NSE),
(vii) Listing Fees : Annual Listing Fees for the year up to 2016-17 have been paid to both the Stock Exchanges.
(viii) Stock Codes : (i) BSE : 509930
(ii) NSE : SUPREMEIND
(ix) Trading Group : (i) BSE : “A” Group,
(ii) NSE : “Other Securities”
xii) Registrar & Transfer Agent
(For Physical &Demat Shares) : M/s. Bigshare Services Pvt. Ltd. E-2/3 Ansa Industrial Estate, Saki Vihar Road, Sakinaka, Andheri (E) Mumbai 400 072. Tel No. 28470652, 40430200 Fax No. 28475207 E-mail : email@example.com
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(xiii) Share Transfer System : Share Transfer are registered and returned within a period of 30 days from the date of receipt, if the documents are clear in all respects.
xv) Dematerialisation of Shares : 12,45,42,600 Shares are Dematerialized (as on 31.03.2016) (98.04% of total Shares viz 127026870 shares)
(xvi) Outstanding GDRS/ADRS/Warrants or any Convertible Instruments, Conversion Date and likely impact on Equity
: The Company has not issued any GDRs/ADRs/Warrants or any convertible instruments in past and hence as on 31st March, 2016, the Company does not have any outstanding GDRs/ADRs/Warrants or any convertible instruments
xvii) Foreign Exchange Risk & Hedging Activity
1. Long term liabilities
Long term liabilities by way of loans including ECB loans are fully hedged ab initio by way of a currency and interest rate swap.
2. Trade exposure
2.1. Imports/ buyer’s credit finance
This exposure is hedged to the extent of at least 50% on a regular basis;
Since the quantum of exports is nominal in comparison to Company’s imports/ buyer’s credit exposure, the same is kept open.
The Company follows a very conservative policy with regard to derivatives. The derivatives are used only to cover/ hedge the underlying liabilities in the nature of Long Term Loans.
4. The foreign exchange policy is in line with the mandate received from the Board. The same is closely followed by Chief Financial Officer, under the overall supervision of the Managing Director and Executive Directors.
(xviii) Plant Locations :
1. Derabassi (Lalru, Punjab)
2. Durgapur (West Bengal)
3. Gadegaon (Maharashtra)
4. Guwahati (Assam)
5. Halol - Unit I (Gujarat)
6. Halol - Unit II (Gujarat)
7. Halol - Unit III (Gujarat)
8. Halol - Unit IV (Gujarat)
9. Hosur Unit I (Tamil Nadu)
10. Hosur Unit II (Tamil Nadu)
11. Jalgaon - Unit I (Maharashtra)
12. Jalgaon - Unit II (Maharashtra)
13. Kanhe (Talegaon, Maharashtra)
14. Kanpur (Uttar Pradesh)
15. Kharagpur (West Bengal)
16. Khopoli (Maharashtra)
17. Khushkheda (Rajasthan)
18. Malanpur - Unit I (Madhya Pradesh)
19. Malanpur - Unit II (Madhya Pradesh)
20. Malanpur - Unit III (Madhya Pradesh)
21. Noida (Uttar Pradesh)
22. Puducherry (Union Territory)
23. Silvassa (Union Territory)
24. Sriperumbudur (Chennai, Tamil Nadu)
25. Urse (Maharashtra)
(xix) Address for Correspondence Investor Correspondence :
For shares held in Physical form: M/s. Bigshare Services Pvt.Ltd E-2/3 Ansa Industrial Estate Saki Vihar Road, Sakinaka, Andheri (E) Mumbai 400 072. Tel No. : 28470652, 40430200 Fax No. : 28475207 E-mail : firstname.lastname@example.org
For Shares held in Demat form:
Investor’s concerned Depository Participant’s and / or M/s Bigshare Services Pvt Ltd.
(xx) Shareholders Assistance Investors Service Department : Shares Department
The Supreme Industries Limited, Regd. Office: 612, Raheja Chambers, Nariman Point, Mumbai 400 021. Phone Nos. : 22820072, 22851656, 22851159-60 Fax No. : 22851657 E-mail : email@example.com
(i) Materially Significant Related Party Transactions:
There are no materially significant related party transactions of the Company which have potential conflict with the interest of the Company at large.
(ii) Details of non-compliance by the Company, penalties, and strictures imposed on the Company by Stock Exchange or SEBI, or any statutory authority, on any matter related to capital markets, during the last three years:
During the financial year 2014-15 The Stock Exchanges (BSE & NSE) issued a notice under Clause 31 of Listing Agreement regarding fine for late submission of the Annual Report within prescribed time period for the financial year 2013-2014. Accordingly, the Company had paid the fine.
(iii) Vigil Mechanism Policy
The Company believes in conducting its affairs in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In order to provide a secure environment and to encourage employees of the Company to report unethical, unlawful or improper practice, acts or activities, the Company has adopted a Vigil Mechanism policy. The reportable matter may be disclosed to the Audit Committee. Employees may also report to the Chairman of the Audit Committee. During the year under review, no employee was denied access to the Audit Committee.
(iv) Mandatory and Non-mandatory requirements:
The Company has complied with all the mandatory requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and The Company has fulfilled the following non-mandatory requirements as prescribed in Schedule II, PART E of Regulation 27(1) of (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Positions of Chairman and Managing Director are separate.
(v) The Policy for determination of Material Subsidiary and Related Party Transactions is available on company’s website: www. supreme.co.in.
(vi) Your Company has complied with all the requirements of Regulations 17 to 27 and clause (b) to (i) of sub-regulation 46 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 except regulations 17(6), 24(1) which are not applicable to the Company.
(vii) Additional Information Regarding the Company is also available on the Company’s Website at : http://www.supreme.co.in
(viii) CEO / CFO Certification : Shri M. P. Taparia, Managing Director and Shri P. C. Somani, CFO heading the finance function have certified to the Board that :
(a) They have reviewed financial statements and the cash flow statement for the year and that to the best of their knowledge and belief:
(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
(b) There are, to the best of their knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company’s code of conduct.
(c) They accept responsibility for establishing and maintaining internal controls for financial reporting and that they have evaluated the effectiveness of the internal control systems of the company, pertaining to financial reporting and they have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these deficiencies.
d) They have indicated to the Auditors and the Audit Committee
(i) significant changes in internal control over financial reporting during the year;
(ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and
(iii) instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system over financial reporting.
The above Certificate was placed before the Board Meeting held on 21st April, 2016.
CODE OF CONDUCT
The Board has adopted the Code of Conduct for members of the Board and Senior Management personnel of the Company. The Code lays down, in details, the standards of business conduct, ethics and governance. The compliance of the same has been affirmed and a declaration signed by the Managing Director to this effect is given below. Code of Conduct has also been posted on the Company’s Website. www.supreme.co.in
As provided under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all Board members and Senior Management Personnel have affirmed compliance with The Supreme Industries Limited Code of Conduct for the year ended 31st March, 2016.
For The Supreme Industries Limited
M. P. Taparia
Place : Mumbai:
date : 10th May, 2016