PHILOSOPHY OF THE COMPANY ON CORPORATE GOVERNANCE:
Your Company believes that good Corporate Governance is the foundation for a truly sustainable Company. Corporate Governance is a set of principles, processes and systems to be followed by the Directors, Management and all Employees of the Company for enhancement of shareholder value while keeping in view interests of other stakeholders. Good governance ensures adoption of best business practices and accountability of the person in-charge of the Company's operations. Your Company is fully committed to the principles of integrity, transparency and compliance with regulations in all dealings with the Government, Customers, Suppliers, Employees and other Stakeholders. Your Directors fully endorse and support the Corporate Governance practices in accordance with the provisions of the Listing Agreement.
1. BOARD OF DIRECTORS:
Composition and Category:
During the period under review i.e. July 01, 2015 to March 31, 2016 the Board met on 5 occasions i.e. July 21, 2015; September 23, 2015; October 27, 2015; January 22, 2016 and March 15, 2016.
The Audit Committee's composition and terms of reference meets the requirements of provisions of Section 177 of the Companies Act, 2013 and Clause 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015.
Audit Committee has the following powers:
- to investigate any activity within its terms of reference;
- to seek information from any employee;
- to obtain outside legal or other professional advice and
- to secure attendance of outsiders with relevant expertise, if it considers necessary Role of Audit Committee includes the following:
(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 listed entity;
(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:
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. Modified opinion(s) 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) Review and monitor 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;
(10) Valuation of undertakings or assets of the Company, wherever it is necessary;
(11) Evaluation of internal financial controls and risk management systems;
(12) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
(13) 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;
(14) Discussion with internal auditors of any significant findings and follow up there on;
(15) 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;
(16) 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;
(17) 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;
(18) To review the functioning of the Whistle Blower mechanism;
(19) 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;
(20) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. The Audit Committee mandatorily reviews the following :
1. Management discussion and analysis of financial condition and results of operations;
2. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
3. Management letters/letters of internal control weaknesses issued by the statutory auditors;
4. Internal audit reports relating to internal control weaknesses;
5. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee and
6. Statement of deviations:
(a) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 23(1);
(b) Annual statement of funds utilised for purposes other than those stated in the offer document/prospectus/notice in terms of Regulation 32(7).
The Audit Committee functions under the overall supervision of the Board of Directors of the Company.
During the period under review i.e. July 01, 2015 to March 31, 2016 the Audit Committee met on 3 occasions i.e. July 21, 2015; October 27, 2015 and January 22, 2016.
3. NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee's composition and terms of reference meet the requirements of provisions of Section 178(1) of the Companies Act, 2013, and Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Role of Nomination and Remuneration Committee inter-alia includes:
1. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;
2. Formulation of criteria for evaluation of Independent Directors and the Board of Directors;
3. Devising a policy on diversity of Board of Directors;
4. 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 and
5. Whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of independent directors.
The Nomination and Remuneration Committee functions under the overall supervision of the Board of Directors of the Company.
During the period under review i.e. July 01, 2015 to March 31, 2016 no meeting of Nomination and Remuneration Committee was held.
Performance Evaluation Criteria for Independent Directors:
The Criteria for performance evaluation for Independent Directors includes:
1. Attends meetings regularly.
2. Understands business regulatory competitive and social environment in which the Company operates.
3. Understands strategic issues and challenges confronting the Company.
4. Demonstrates a solid understanding of his/her responsibility as a Director including his/her statutory and fiduciary roles and acts appropriately in his/her governance role.
5. Attends meetings well prepared to evaluate and/or add value to Agenda items presented to the Board.
6. Brings useful outside information and perspective to Board deliberations.
7. Contributes meaningfully to Board discussions, makes useful suggestions, provides strategic insight and directions.
8. Demonstrates an ability to identify the cost benefits and implications of Board decisions.
9. Demonstrates a strong understanding of financial statements, ratios and/or indices of performance and can see the issues behind the numbers.
10. Appropriately questions data and information presented to the Board for its deliberations.
11. Listens effectively to others ideas and view points and encourages contributions from other Directors.
12. Works effectively with fellow Directors to build consensus, manages conflict constructively.
13. Awareness about the developments regarding corporate governance.
4. STAKEHOLDERS RELATIONSHIP COMMITTEE:
The terms of reference of the Stakeholders Relationship Committee are as follows:
The Committee shall consider and resolve the grievances of the security holders of the listed entity including complaints related to transfer of shares, non-receipt of annual report, and non-receipt of declared dividend and shall approve transfers of the Company's securities.
Compliance Officer: Shri Ravi V Kuddyady, Company Secretary.
During the period under review, your Company received 77 complaints including complaints through the Stock Exchanges and the Securities and Exchange Board of India (SEBI) and majority of these complaints were resolved within 30 days. There were NIL pending complaints as on March 31, 2016.
5. FINANCE COMMITTEE:
Your Company has constituted an independent Finance Committee of Directors on July 26, 2005. The terms of reference of the Finance Committee includes:
i. Borrow moneys from Banks or any other source including temporary loans;
ii. Authorisation for creation of security on the Company's assets to secure the borrowings;
iii. Authorisation to invest temporary surplus funds in money market investments and delegate financial powers for approved projects capital expenditure and
iv. Opening/Closing of Bank Accounts and authorise officials of the Company for operating of Bank Accounts.
During the period under review i.e. July 01, 2015 to March 31, 2016 the Finance Committee met on 3 occasions i.e. September 01, 2015; February 02, 2016 and March 26, 2016.
6. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
Your Company has constituted Corporate Social Responsibility Committee as mandated by Schedule VII of the Companies Act, 2013 on July 18, 2014, to perform the following functions:
a) 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;
b) To recommend the amount of expenditure to be incurred on the activities referred to in clause above and
c) Monitor the Corporate Social Responsibility Policy of the Company from time to time.
The Corporate Social Responsibility Committee functions under the overall supervision of the Board of Directors of the Company. During the period under review i.e. July 01, 2015 to March 31, 2016 the Corporate Social Responsibility Committee comprising of the following Directors met on one occasion i.e. October 27, 2015.
7. INDEPENDENT DIRECTORS:
Shri Hasmukh Shah, Shri R. Kannan, Shri M. S. Ramachandran, Shri Nihalchand Chauhan, Miss Ameeta Parpia and Dr. S. Sivaram were the Independent Directors on the Board of Directors of your Company as on March 31, 2016. Shri Hasmukh Shah resigned from the Board of Directors of the Company w.e.f. April 07, 2016. The other Independent Directors continue to serve on the Board and hold Office for a consecutive term up to September 21, 2019 pursuant to the provisions of the Companies Act, 2013.
During the period under review i.e. July 01, 2015 to March 31, 2016 the Independent Directors met on one occasion i.e. January 22, 2016.
8. CODE OF CONDUCT:
The Company has framed and adopted a Code of Conduct which is approved by the Board of Directors. The code is applicable to all Directors and Senior Management of the Company. This code has been posted on the Company's website www.supremepetrochem.com .
Declaration by the CEO:
During the period under review i.e. July 01, 2015 to March 31, 2016 all Directors and Senior Management personnel have affirmed adherence to the provisions of the code of conduct for Board Members and Senior Management.
9. COMPLIANCE CERTIFICATE BY CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER
A. We have reviewed the financial statements and the cash flow statement for the year (9 months period) and that to the best of our knowledge and belief:
(1) these statements do not contain any material untrue statement or omit any material fact or contain statements that might be misleading.
(2) these statements together present a true and fair view of the listed entity's affairs and are in compliance with existing accounting standards, applicable laws and regulations.
B. To the best of our knowledge and belief, no transactions entered into by the listed entity during the year which are fraudulent, illegal or violative of the listed entity's code of conduct.
C. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the listed entity pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
D. We have indicated to the auditors and the Audit Committee:
(1) significant changes in internal control over financial reporting during the year;
(2) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statement and
(3) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the listed entity's internal control system over financial reporting.
The above certificate was placed before the Board at its meeting held on April 20, 2016.
10. SUBSIDIARY COMPANY:
Your Company does not have any Subsidiary, hence has not laid down a policy for determining material Subsidiaries.
a. Basis of related party transactions -
Your Company places all the details before the Audit Committee periodically. A comprehensive list of related party transactions as required by the Accounting Standard (AS) 18 issued by the Institute of Chartered Accountants of India, forms part of the Notes to the Accounts in the Annual Report (Please refer to note no.33). However, these transactions are not likely to have any conflict with the interest of the Company at large. The policy on dealing with Related Party Transactions is available on the Company's website on the link <http://supremepetrochem.com/pdf/> Policy-On-Dealing-With-Related-Party-Transactions.pdf.
b. Disclosure of Accounting Treatment -
Your Company has followed all relevant Accounting Standards notified under Section 133 of The Companies Act, 2013 read together with Rules 7 of The Companies (Accounts) Rules 2014.
c. Risk Management -
Your Company has a comprehensive risk management policy. The risk management policy inter-alia provides for review of the risk assessment and minimisation procedure, laying down procedure to inform the Board in the matter and for periodical review of the procedure to ensure that executive management controls the risks through properly defined framework.
d. Proceeds from public issues, right issues, preferential issues etc.
During the period under review i.e. July 01, 2015 to March 31, 2016 your Company has not raised any proceeds from public issue, right issue or preferential issue.
e. Disclosure of non-compliance of the Company -
There were no instances of non-compliance or penalty, strictures imposed on your Company by Stock Exchanges or SEBI or any statutory authority on any matter related to capital markets, during the last three years.
f. Whistle Blower Policy/Vigil Mechanism -
A Whistle Blower Policy/Vigil Mechanism has been adopted by the Board of Directors on July 18, 2014. No personnel have been declined access to the Audit Committee.
g. The Company has adopted Clause D and E of Part E of Schedule II of the SEBI (Listing Obligations & Disclosure Requirements) Regulation 2015, by having separate persons to the post of Chairperson and CEO and by direct reporting by internal auditor to the Audit Committee.
h. Compliance with Corporate Governance requirements specified in regulation 17 to 27 and Clause (b) to (i) of sub-regulation (2) of regulation 46 of the SEBI (Listing Obligations & Disclosure Requirements) Regulation 2015,
12. IMPLEMENTATION OF CODE OF INTERNAL PROCEDURE & CONDUCT FOR REGULATING, MONITORING & REPORTING OF TRADING BY INSIDERS:
Your Company has adopted Code of Conduct for prevention of insider trading which is based on the SEBI framework. Your Company follows strict guidelines in respect of insiders' stock trading and related disclosures. The Company Secretary is designated as the Compliance Officer to oversee its implementation. Periodic disclosures have been obtained from all the Directors and Designated Employees. Under the aforesaid code all the Directors and Designated Employees are required to conduct all their dealings in securities of the Company only in valid trading window after obtaining pre clearance from the Company as per the pre dealing procedure described in the Code.
13. MEANS OF COMMUNICATION:
Shareholders are intimated through the press and the Company's website: <http://www.supremepetrochem.com> of the quarterly performance and financial results of the Company. The website also displays Chairperson's statement and the shareholding pattern. The quarterly results during the period under review i.e. July 01, 2015 to March 31, 2016 were published in Business Standard, DNA, Free Press Journal, Sakal and Navshakti. Announcement to Stock Exchanges are also displayed on the Company's website. No presentations were made to institutional investors or to the analysts during the period under review i.e. July 01, 2015 to March 31, 2016.
14. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management discussion and analysis is a part of the Annual Report and Annexed separately.
15. GENERAL SHAREHOLDERS INFORMATION :
Annual General Meeting
Wednesday, August 24, 2016 at 4.00 p.m. at I.M.C. Walchand Hirachand Conference Hall, Churchgate, Mumbai - 400 020
Period under review
July 01, 2015 to March 31, 2016 (9 months)
Date of Book Closure
Monday, August 22, 2016 to Wednesday, August 24, 2016 (both days inclusive)
Dividend Payment Date
Listing on Stock Exchanges
Phiroze Jeejeebhoy Towers, 1st Floor, Dalal Street, Mumbai - 400 001
The National Stock Exchange of India Ltd.,
Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051
BSE Ltd - 500405
The National Stock Exchange of India Ltd. - SUPPETRO
Payment of Listing Fees
Annual listing fees for the year 2016-2017 have been paid to BSE and The National Stock Exchange of India Ltd.
Payment of Depository Fees
Annual Custody/Issuer Fees for the year 2016-2017 will be paid to NSDL and CDSL on receipt of invoices
REGISTRAR AND TRANSFER AGENT :
Karvy Computershare Pvt. Ltd.,
Karvy Selenium Tower B, 6th Floor, Plot No. 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, HYDERABAD - 500 032
SHARE TRANSFER SYSTEM :
The Company has outsourced its share transfer function to Karvy Computershare Private Limited, which is registered with SEBI as Category 1 Registrar. Karvy has been appointed as the common agency for all work related to share registry in terms of both physical and electronic modes.
DEMATERIALISATION OF SHARES & LIQUIDITY :
Equity Shares of the Company can be held in the dematerialised form with either National Securities Depository Limited or Central Depository Services Limited 95.44% Shares have been dematerialised up to March 31, 2016.
COMMODITY PRICE RISK OR FOREIGN EXCHANGE RISK & HEDGING ACTIVITIES
Your Company's main raw material like Styrene Monomer, Polybutadiene Rubber and major additives are imported and therefore your Company has a substantial exposure in foreign exchange currencies. To overcome the risk to Company's operations due to foreign exchange volatility your Company's Board has approved a policy to hedge by way of forward cover foreign exchange exposures. Your Company also has some hedge by way of export receivables.
PLANT LOCATION :
i Amdoshi, Wakan Roha Road, Post Patansai, Taluka Roha, District Raigad, MAHARASHTRA - 402 106.
ii Ammulavoyil Village, Andrakuppam Post, Manali New Town, Chennai - 600 103, TAMIL NADU.
ADDRESS FOR CORRESPONDENCE :
Solitaire Corporate Park, Building No. 11, 5th Floor, 167, Guru Hargovindji Marg, Andheri-Ghatkopar Link Road, Chakala, Andheri (East), MUMBAI - 400 093
The Secretarial Department operates from the Company's Corporate Office at Andheri in Mumbai, besides, the Company's Registrars and Transfer Agents Karvy Computershare Private Limited has investor services Offices at Ahmedabad, Bangalore, Chennai, Cochin, Jaipur, Kolkata, Lucknow, Mumbai (Fort & Andheri), New Delhi, Pune, Vadodara and Vijaywada.
For any assistance related to the Company's shares please write to:
(1) Shri Ravi V Kuddyady / Shri Finian Lopez / Ms. Jean Bhandary
Secretarial Department, Supreme Petrochem Ltd,
Solitaire Corporate Park, Building No. 11, 5th Floor, 167, Guru Hargovindji Marg, Andheri-Ghatkopar Link Road, Chakala, Andheri (East), MUMBAI - 400 093
Telephone No. : 022-67091900 and 66935927 Fax No. : 022-40055681
E-mail : email@example.com
(2) Shri K. S. Reddy
Karvy Computershare Private Limited,
Unit: Supreme Petrochem Ltd, Karvy Selenium Tower B, 6th Floor, Plot No. 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, HYDERABAD - 500 032 Telephone No. : 040-33211500/33215570
Toll Free No. : 1800-3454-001 Fax No. : 040-23440674
E-mail : firstname.lastname@example.org , email@example.com
Website : www.karvy.com
(3) Shri Praveen Amlani
Karvy Computershare Private Limited,
Unit: Supreme Petrochem Ltd,
7, Andheri Industrial Estate, Off Veera Desai Road, Andheri (W),
MUMBAI - 400 053
Telephone No. : 022-26730799/26730843 Fax No. : 022-26730305
E-mail : firstname.lastname@example.org
The voting rights on these Shares lying in the Unclaimed Suspense Account shall remain frozen till the rightful owner of such Shares claims the Shares.
For and on behalf of the Board
M. P. Taparia
Website : Please visit us at <http://www.supremepetrochem.com> for financial and other information about the Company.
Place : Mumbai
Date : April 20, 2016