To The Members of Sumeet Industries Limited
Your Directors have pleasure in presenting the 30th Annual Report andAudited Statement of Accounts for the year ended 31st March 2018.
Your Company has delivered satisfactory performance despite considerable headwinds likeGST implication inflation etc. The Company has registered consolidated revenue of Rs.1228.83 Crores with Net Loss of Rs. 2.62 Crores.We remained resolute and relentless inour quest for strengthening our cost-competiveness better management of working capitaland operational excellence across all businesses.
|Particulars || |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Sales & Income form operation ||107081.71 ||130180.80 ||122883.11 ||150959.72 |
|Other Income ||952.60 ||729.50 ||953.65 ||948.76 |
|Profit before Financial cost Depreciation and Exceptional items & Tax (EBIDTA) ||9479.80 ||12353.68 ||9787.81 ||12803.02 |
|Interest ||4917.79 ||4822.47 ||5147.08 ||5035.15 |
|Depreciation ||5259.57 ||2046.32 ||5259.57 ||2047.13 |
|Profit/( Loss ) before Tax ||(697.56) ||5484.89 ||(618.84) ||5720.74 |
|Provision for Taxation || || || || |
|Current tax ||(785.20) ||1170.56 ||(795.82) ||1189.79 |
|Mat Credit ||- ||(1014.70) ||- ||(1014.70) |
|Deferred Tax ||1171.89 ||1656.27 ||1171.89 ||1656.27 |
|Profit after Tax ||(310.87) ||3672.75 ||(242.77) ||3889.38 |
|Taxation for previous year ||(13.98) ||- ||(19.19) ||- |
|profit available for appropriation ||(324.86) ||3672.75 ||(261.96) ||3889.38 |
|Dividend on Equity & Pref. Shares || || || || |
|Transfer to General Reserve ||(324.86) ||3672.75 ||(261.96) ||3889.38 |
Despite challenging business environment the company has posted mixed performance forthe year under review. The company has produced 92607.345 Tons of Pet Chips / Polyesterand Texturized Yarn and dispatched 93259.47 Tons of Pet Chips / Polyester and Texturizedyarns.
Income from operation (Consolidated) of the company has marginally decreased from Rs.1509.60 Crores to Rs. 1228.83 Crores and EBIDTA has been decreased marginally from Rs.128.03 Crores to Rs. 97.88 Crores in comparison to last year. The company has adopted themethod of charging depreciation on fixed assets from SLM Method to WDV (except vehicle)method during the year under review resulting an excess of total amount of Rs.34.54Crores was effected in depreciation amount. The Company has incurred net loss of Rs. 2.62Crores.
The Company is enhancing its capacity on producing specialty and value added yarns andfocusing on expanding market reach both in domestically and internationally costoptimization and elevating people potential. With rising demand in the domestic andinternational markets we are hopeful that we will be able to grow more value addedproducts in future.
A detailed analysis of the operations of your Company during the year under report isincluded in the Management Discussion and Analysis Report forming part of this AnnualReport.
The Board of directors do not recommended dividend for the year under review due toloss incurred by the company. No amount is being transferred to the General Reserves.
EXPANSION & MODERNISATION
The Company is cautiously watching development in synthetic yarn industries and alsoevaluating various options which could be available to it for its growth strategy. Overthe years we have been investing consistently in shoring our manufacturing capacities byway of expansion cum modification in its existing capacities. Presently no expansionprogram of the company has been envisaged by the Board.
During the year under review the company has made Right Issue of 24874173 nos. ofEquity shares with a face value of Rs. 10/- each at a price of Rs. 24/- per equity sharesaggregated to Rs. 5969.80 Lacs in the ratio of 3 fully paid up Right Equity Share(s) forevery 7 Fully Paid up Equity Share(s). Finally the company has allotted 24874173 nos.of equity shares and aggregated Rs.596980152.00 . The proceeds of the Right Issues wasutilized for incremental working capital and adjustment of unsecured loans given by thepromoters as declared in objects of the issue.
Category wise variation between projected utilization of funds made in offer documentand the actual utilization of funds are as follow:
|Sr. No. ||Particulars ||Projected utilization of funds as per offer document ||Actual utilization of funds till 31st March 2018 |
|1. ||Working Capital Requirements ||2300.00 ||2727.04 |
|2. ||Adjustment of Unsecured Loans against the entitlement including additional subscription ||2500.00 ||2500.00 |
|3. ||General Corporate purpose ||1030.00 ||615.00 |
|4. ||Issue related expenses ||170.00 ||127.76 |
| ||Total ||6000.00 ||5969.80 |
CHANGE IN THE NATURE OF BUSINESS
There were no change in the nature of the business of the Company during the financialyear under review. MATERIAL CHANGES AND COMMITMENTS
There have not been any material changes and commitments affecting the financialposition of the Company between the end of the financial year as on 31st March 2018 andthe date of this report i. e. 22nd June 2018.
OVERSEAS SUBSIDIARY COMPANY
The company has a wholly owned subsidiary company named "Sumeet Global PteLimited" in Singapore registered with Registrar of Companies and BusinessSingapore. Pursuant to Accounting Standard AS- 21 issued by the Institute of CharteredAccountants of India and the provisions of the Listing Agreement with Stock Exchanges thecompany has prepared Consolidated Financial Statements of the Company and its subsidiariesare included in the Annual Report.
Pursuant to the provision of section 136 of the Act the financial statements of thecompany consolidated financial statements along with the relevant documents and separateaudited accounts in respect of Sumeet Global Pte Limited are available on the website ofthe company.
The company has been exploring all the possibilities for exporting its products. Duringthe year under review your company has exported products worth of Rs. 93.38 Crores.
At present company is exporting to Egypt Saudi Arabia China Argentina PolandVietnam Philippines Portugal Morocco Columbia Bangladesh Russia Ethiopia MexicoNepal Brazil Peru Algeria Thailand U.S.A Singapore and Turkey etc. The company isweighing possibilities to export its value added newly developed Carpet Yarns Microfilament yarns Dope dyed Yarns Texturised Yarns etc. Exploring export markets has been akey area of focus for the company. Your Company expects more growth in the overall exportsales in the current year also.
As members are aware the company's shares are compulsorily tradable in the electronicform. As on March 31 2018 almost 96.38% of the Company's total paid-up capitalrepresenting 82913911 shares were in dematerialized form. In view of the numerousadvantages offered by the Depository system members holding shares in physical mode areadvised to avail of the facility of dematerialization on either of the Depositories.
The Company's financial discipline and prudence is reflected in the strong creditratings ascribed by Brickwork Ratings India Limited as below :
Long Term Borrowing : BWR BBB Outlook : Stable Short Term Borrowing : BWR A3 + Outlook: Stable FIXED DEPOSITS
The Company has invited deposits from public in accordance with the Section 73 and 74of the Companies Act 2013 (corresponding Section 58 A of the Companies Act 1956) to thetune of Rs. 396.14 Lacs during the financial year 2013-14. No fresh deposits have beeninvited and nor any deposits have been renewed in the financial year 2017-18. Totaloutstanding deposits after repaying on maturity as on 31.03.2018 has been remained Rs.448000/-. There were no deposits which were claimed but not paid by the Company as ondate.
Mr. Sumeet Kumar Somani (DIN No. 00318156) Executive Director of the Company retireby rotation at the ensuing Annual General Meeting and being eligible offer himself forre-appointment.
a) Statutory Auditors
In compliance with the Companies (Audit and Auditors) Rules 2014 the Members at theExtra Ordinary General Meeting of the Company held on November 10 2017 has appointed M/s.S.R. Somani & Co. Chartered Accountants (ICAI Registration no. 110367W) as StatutoryAuditors of the Company to hold the office until the conclusion of the next Annual GeneralMeeting of the Company. Later M/s. S.R. Somani & Co. Chartered Accountants hasresigned w.e.f 01.04.2018 due to their other pre-occupied work assigned. M/s. Pamita Doshi& Co. Chartered Accountants (ICAI Registration no.:141976W) has been appointed asStatutory Auditors of the company for the financial year 2017-18 to fill the casualvacancy up to the conclusion of the next Annual General meeting of the company in theExtra Ordinary General meeting held on 30.04.2018. Members are requested to re-appointthem at the Annual General Meeting.
b) Cost Auditors
The Company has been maintaining cost accounting records in respect of manufacture ofpolyester yarns pursuant to directives of the Central Government. The company hasappointed M/s. V.M. PATEL & ASSOCIATES (Firm Registration No. 10519) as CostAuditors for conducting the audit of cost records for the financial year 2018-19 andapproval of the members is being sought for ratification of their appoinment andremuneration.
c) Internal Auditors
The Board has appointed M/s. RRA & Co. Chartered Accountants (ICAI RegistrationNumber 112115W) as Internal Auditors of your company for the financial year 2018-19. Thereport prepared by the Internal Auditors is to be reviewed by the Statutory Auditors &Audit Committee of the company.
d) Secretarial Auditors
Dhiren R. Dave Practising Company Secretaries (CP No. 2496 Membership No. 4889) wereappointed as Secretarial Auditor to conduct secretarial audit of the company for thefinancial year 2017-18. The Secretarial Audit Report for the financial year ended 31 March2018 is annexed herewith and forms part of the Annual Report as Annexure-1. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
The Board has re-appointed Dhiren R. Dave Practising Company Secretaries assecretarial auditors of the Company for the financial year 2018-19.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of Regulations 34 of the Listing regulations a separate section on ManagementDiscussion and Analysis and Corporate Governance Report together with a certificate fromthe Company's Statutory Auditors confirming compliance with regulations relating toCorporate Governance of the Listing regulations are set out and forms part of this Annualreport.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with provisions of sub-section (3) of Section 129 of the Act and theListing Regulations the consolidated Financial Statements of the company including thefinancial details of the subsidiary company forms part of this Annual report. TheConsolidated Financial Statements have been prepared in accordance with the AccountingStandard s prescribed under Section 133 of the Act.
PERSONNEL AND RELATD DISCLOSURES
The Board of Directors wishes to express their appreciation to all the employees fortheir outstanding contribution to the operations of the company. Pursuant to theprovisions of the Companies (Appointment & Remuneration of managerial personnel) rules2014 no employee is drawing remuneration in excess of the prescribed limits. Your companyalso appreciates that revenue and profit growth cannot take place without the rightequality of people. To that effect your company has undertaken a series of measures thatensures the most appropriate people are recruited in to the organization.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in Annexure-2 forming part of theAnnual Report.
INTERNAL CONTROL SYSTEM
Your Company has a well established Internal Control system to ensure an effectiveinternal control environment that provides assurance on the efficiency of conductingbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures. TheInternal Auditor certifies on the assurance of adequacy of Internal Control System onquarterly basis which are regularly reviewed by the Audit Committee. Independence of theaudit is ensured by the direct reporting of internal audit function to the Audit Committeeof the Board.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is an integral part of the Company's ethos and policyand it has been pursuing on a sustained basis. The Company assists schools situated atnear by villages by distributing dresses & books among poor students and computersnearby situated primary schools etc. Technical education and training are imparted to theemployees through Industrial Training and Workshops. Emphasis was laid on creation ofawareness amongst the villagers about the need to protect the environment. CSR activitiescarried out by the Company have strengthened the relationship with local people. The mainfocus areas taken in the policy are Education Health Care Environment safetycontribution to any relief fund set up by Government Semi-Governments etc.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the companyand the initiatives undertaken by the company on CSR activities during the year are setout in Annexure of this Report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. (Annexure - 3). The Policy is available on thewebsite of the Company.
HUMAN RESOURCES & INDUSTRIAL RELATIONS
The Company understands that employees are vital and valuable assets. The Companyrecognises people as the primary source of its competitiveness and continues its focus onpeople development by leveraging technology and developing a continuously learning humanresource base to unlease their potential and fulfil their aspirations.
The Company continued to maintain harmonious and cordial relations with its workers inall its businesses during the year under report. Your company firmly believes that adedicated work force constitute the primary source of sustainable competitive advantage.
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has in place Prevention of Sexual Harassment Policy in line with therequirements of The Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act; 2013. All employees (permanent contractual temporary trainees) arecovered under this policy.
Your Directors state that during the year under review there were no cases filedpursuant to The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Risk Management is the systematic process of understanding measuring controlling andcommunicating organization's risk exposures while achieving its objectives. RiskManagement is an important business aspect in the current economic environment and itsobjective is to identify monitor and take mitigation measures on a timely basis inrespect of the events that may pose risks for the business. The Company's risk-managementstrategy is to identify assess and mitigate any significant risks. We have establishedprocesses and guidelinesalong with a strong overview and monitoring framework at theBoard and Senior Management levels.
The Board of Directors regularly review risks and threats and takes suitable steps tosafeguard its interest and that there is no element of risk identified that may threatenthe existence of the Company. The focus shifts from one area to another area dependingupon the prevailing situation. The Risk Management Policy has been reviewed and foundadequate to the requirements of the Company by independent firms of Chartered Accountantsand approved by the Board. A detailed report on significant risks and mitigation isforming part of Management's Discussion and Analysis.
All the properties of the Company including buildings plant and machineries and stockshave been adequately insured.
LOANS GUARANTEES OR INVESTMENT MADE UNDER SECTION 186 OF THE COMPANIES ACT 2013
The loans given investments made and guarantees given & securities provided duringthe year under review are in compliance with the provisions of the Act and rules madethereunder and details thereof are given in the notes to the Standalone FinancialStatements.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT.
No material changes and commitments affecting the financial position of the Companyoccurred from the end of the financial year 2017-18 till the date of this report. Furtherthere was no change in the nature of business of the Company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.
During the year under consideration there were no such instances.
EMPLOYEE STOCK OPTION
The company has not issued any Employee Stock Option.
FOREIGN EXCHANGE TRANSACTIONS
In order to hedge the company's exposure to foreign exchange and interest rate thecompany enters into forward contracts. The volatility witnessed in the global markets hasreiterated the need for robust forex management systems and prudent investment practices.All forex exposures are hedged upon the occurrence of an exposure. In case of liabilitiesin respect of foreign currency loans obtained for acquisition of fixed assets thevariation in the liabilities arising out of exchange rates at the year end have beencapitalized during the year as per Companies (Accounting Standard) Amendment Rules 2009.
ENERGY TECHNOLOGY AND FOREIGN EXCHANGE
Information in accordance with the provisions of Section 134 (3) (m) of the CompaniesAct 2013 regarding conservation of energy technology absorption and foreign exchangeearnings and outgo is given in the Annexure-4 forming part of this report.
RESEARCH & DEVELOPMENT
The Company is giving great emphasis to innovation in product and process technologyand operational efficiencies. The company has set up a separate fully equipped welldesigned lab for testing of MEG and PTA and developing better quality of Pet chips andYarns with different deniers and filaments. It has institutionalized a multiple-stagequality control system at the material handling operations and finished goods stage.Efforts are made to explore and develop more valued added category of yarns. The enhancedquality so developed has been performing well in the domestic as well as in internationalmarket. Successful efforts are being made to re-engineer the products & process toreduce cost and optimize material consumption. The product lines of the plant are designedand re-engineered to change product with minimum changeover losses and thus meet customerrequirement even for small quantities.
CONTRACTS AND ARRANGEMENT WITH RELATED PARTY
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business and that the provisions of Section 188of the Companies Act 2013 and the Rules made thereunder are not attracted. Thusdisclosure in form AOC-2 in terms of Section 134 of the Companies Act 2013 is notrequired. Further there are no material related party transactions during the year underreview with the Promoters Directors or Key Managerial Personnel.
All Related Party Transactions are placed before the Audit Committee as also to theBoard for approval. Omnibus approval was obtained on a quarterly basis for transactionswhich are of repetitive nature. Transactions entered into pursuant to omnibus approval areaudited by the Risk Assurance Department and a statement giving details of all RelatedParty Transactions are placed before the Audit Committee and the Board for review andapproval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company. The web-link of the same has been provided in theCorporate Governance Report. None of the Directors has any pecuniary relationship ortransactions vis-a-vis the Company.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by Securities and Exchange Boardof India (SEBI'). A separate report on Corporate Governance along with Certificatefrom M/s. Pamita Doshi & Co. Chartered Accountants on compliance with the conditionsof Corporate Governance as stipulated under SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 is provided as part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12of the Companies (Management and administration) Rules 2014 in prescribed Form MGT-9 (Annexure-5)is forming part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement :
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CODE OF CONDUCT
As prescribed under the provisions of Section 149 of the Companies Act 2013 read withSchedule IV thereto and Regulation 26 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 for its Board of Directors and Senior management andemployees the Company has formulated a comprehensive Code of Conduct (the Code). The Codeis applicable to Directors and Senior management and employees to such extent as may beapplicable to them depending upon their roles and responsibilities. The Code givesguidance and support needed for ethical conduct of business and compliance of law. TheCode reflects the values of the Company viz. Customer Value Integrity one team andExcellence.
A copy of the Code has been uploaded on the Company's website www.sumeetindustries.com.The Code has been circulated to all the Directors and Management Personnel and itscompliance is affirmed by them annually.
A declaration signed by the Company's Managing Director for the compliance of thisrequirements is published in this Report.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
Pursuant to Section 149(6) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in the aforesaid section.
WHISTLE BLOWER MECHANISM
In order to ensure that the activities of the Company and its directors employees andVendors are conducted in a fair and transparent manner by adoption of highest standards ofprofessionalism honesty integrity and ethical behaviour the Company has adopted a Vigilmechanism/Whistle Blower Policy. This policy is explained in Corporate Governance Reportand also uploaded on the website of the company i.e. www.sumeetindustries. com.
DISCLOSURE RELATED TO BAORD COMMITTEES AND POLICIES
A) BOARD MEETINGS :
The Board of Directors met 15 times during the financial year ended 31stMarch 2018 in accordance with the provisions of the Companies Act 2013 and rules madethere under. The details thereof are given in the Corporate Governance Report forming partof the Annual report.
B) COMMITTEE MEETINGS :
The Audit Committee of the Board comprises of Mr. Dinesh Sharan Khare (Chairman) Mr.Sumeet Kumar Somani Member Mr. Dipesh Dasadia Member and Mr. Abhishek Desai Member.
All recommendations made by the Audit Committee were accepted by the Board during theyear 2017-18. The brief details of the Audit Committee are given in Corporate GovernanceReport forming part of the Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board comprises of Mr. Dinesh SharanKhare (Chairman) Mr. Atma Ram Sarda Member Mr. Dipesh Dasadia Member and Mr. AbhishekDesai Member.
The Nomination and Remuneration Committee and this Policy shall be in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andListing Regulations (as may be amended from time to time). Emphasis is given to personsfrom diverse fields or professionals.
The Nomination and remuneration Committee has framed the " NOMINATION &REMUNERATION AND EVALUATION POLICY" (Annexure-6(i)) and "POLICY ON BOARDDIVERSITY" (Annexure-6(ii)) forming part of the Annual Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee review and ensures redressal of investor grievances. The StakeholdersRelationship Committee of the Board comprises of Mr. Dinesh Sharan Khare (Chairman) Mr.Sumeet Kumar Somani Member Mr. Dipesh Dasadia Member and Mr. Abhishek Desai Member.
The brief details of the Stakeholders Relationship Committee are given in CorporateGovernance Report forming part of the Annual report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has laid down the Company's policy on Corporate Social Responsibility (CSR)and the CSR activities of the company are carried out as per the instructions of theCommittee.
The CSR committee of the Board comprises of Mrs. Gangadevi Somani Chairman Mr. SumeetKumar Somani Member and Mr. Dinesh Sharan Khare Member.
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theBoard has carried out an annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Audit CommitteeNomination and Remuneration Committee.
The evaluation process covered the aspects which included Board structure andcomposition frequency of Board meetings participation in the long term strategicplanning contribution to and monitoring of corporate governance practices and thefulfilment of Directors' obligation and fiduciary responsibilities including but notlimited to active participation at the Board and committee meetings.
This evaluation is led by the Chairman of the Board Governance Nomination andRemuneration Committee with specific focus on the performance and effective functioning ofthe Board.
The result of the evaluation is satisfactory and adequate and meets the requirement ofthe Company.
FAMILIAZATION PROGRAMME FOR INDEPENDENT DIRECTORS
A policy on familiarization program for Independent Directors has also been adopted bythe Company and are put up on the website of the company www.sumeetindustries.com. All newIndependent Directors (IDs) inducted in to the Board are presented with an overview of theCompany's business operations products organization structures and about the BoardConstitutions and its procedures.
KEY MANAGERIAL PERSON
Pursuant to the provisions of section 203 of the Companies Act 2013 read with rulesframed thereunder the following persons are the Key Managerial Personnel of the company.
1) Mr. Sumeet Kumar Somani Managing Director
2) Mr. Anil Kumar Jain Company Secretary
3) Mr. Abhishek Prasad Chief Financial Officer SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2relating to Meetings of the Board of Directors and General Meetings respectively havebeen duly followed by the Company.
Your Directors would like to express their grateful appreciation for the assistance andco-operation received from the Financial Institutions Banks Government Authorities andShareholders during the year under review. Your Directors wish to place on record theirdeep sense of appreciation for devoted services of the Executives Staff and workers ofthe Company for its success.
| ||On behalf of the Board of Directors |
| ||Sd/- |
|Place : Surat ||Shankarlal Somani |
|Date : 22nd June 2018 ||Chairman |
ANNEXURE TO DIRECTORS' REPORT
FORM AOC - 1
The information required under Section 197(12) o the Companies Act 2013 read with Rule5(1) of the i Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014for the year ended 31st March 2018 are given below
1) The ratio of the remuneration of each director to the median remuneration of theemployees of the
Company for the financial year ended March 2018 : -
|Name of the Director / KMP & Designation ||Remuneration ||% increase in Remuneration in F.Y. 2017-18 ||Ratio to median remuneration ||Comparison of the Remuneration of the KMP against the performance of the company |
|Shri Sumeet Kumar Somani * Managing Director ||5.40 || ||1.66 || |
The company has incurred Loss of Rs. 261.96 Lacs during the year but EBIDTA (Consolidated) is Rs. 9787.81 Lacs
|Anil Kumar Jain Company Secretary ||10.60 ||40% ||3.27 |
|Abhishek Prasad ** ||8.70 ||15% ||2.68 |
* MR. Sumeet Kumar Somani has been appointed as Managing Director of the company w.e.f.01.04.2017 and ceased to act as CFO of the company.
** MR. Abhishek Prasad has been appointed as CFO of the company w.e.f. 01.04.2017.
The Non-Executive Independent Directors of the Company are entitled for sitting feesCommission and reimbursement of expenses as per the statutory provisions and are withinthe prescribed limits. The details of sitting fees and commission paid to independentdirectors are provided in the Corporate Governance Report forms a part of the AnnualReport.
2) Percentage increase in the median remuneration of employees in the financial year :7.65%
3) Number of permanent employees on the rolls of Company as on 31st March2018 : 701
4) The explanation on the relationship between average increase in remuneration andCompany performance:
On an average employees received an increase in remuneration of 7.25% to 8%. Duringthe year company has incurred loss of Rs. 324.86 Lacs.
The increase in remuneration of employees is in line with the market trends and closelylinked to corporate performance business performance and individual performance.
5) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company :
|Particulars of Remuneration || |
Key Managerial Personnel
|Mg. Director ||C.F.O. ||Company Secretary |
|Remuneration (Rs. in Lacs) ||5.40 ||8.70 ||10.60 |
|Revenue (Rs. in Lacs) ||122883.11 ||122883.11 ||122883.11 |
|Remuneration (As a % of Revenue) ||0.0044 ||0.0070 ||0.0086 |
|Profit (Loss ) before Tax (PBT) (Rs. in Lacs) ||(618.84) ||(618.84) ||(618.84) |
|Remuneration (As a % of PBT) ||- ||- ||- |
6) Variations in the market capitalisation of the Company price earnings ratio asat the closing date of the current financial year and previous financial year andpercentage increase over decrease in the market quotations of the shares of the Company incomparison to the rate at which the Company came out with the last public offer:
|Date ||Closing Market Price per Share(Rs.) ||Earnings Per Share (Rs.) ||Price Earnings Ratio ||Market Capitalization (Rs. in Crores) |
|31.03.2017 ||33.30 ||6.81 ||4.89 ||193.27 |
|31.03.2018 ||15.55 ||-0.15 ||- ||128.93 |
|% Change ||-205.79 ||-102.20 ||- ||-33.29 |
The Company made its Initial Public Offer (IPO) in 1993. An amount of Rs.1000 investedin the IPO towards 100 shares of Rs.10 each was worth Rs. 1555/- (100 shares of Rs. 15.55each) as on 31st March 2018 excluding dividend. After considering Rights shares offeredand Bonus issue of shares from time to time 100 shares of Rs.10 each issued in 1993 havebecome 471 shares of Rs.10 each.
7) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstance for increase in managerial remuneration :
Average Percentile increase in Remuneration of employees other than ManagerialPersonnel was 7.65% and average increase in remuneration of Managerial Personnel was 15%to 40%.
8) Key parameters for any variable component of remuneration availed by the Directors :
Key result areas of the managerial personnel are broadly to achieve Company's growthand performance target achieving the same against various adverse externalities globallydevising sustained strategy to combat global forces like competition exchange rate etcwhich in turn enhance shareholders' value. There are no variable component ofremuneration to the Directors during the financial year 2017-18 and 2016-17. Remunerationof the managerial personnel is based on the Remuneration Policy as recommended by theNomination & Remuneration Committee and approved by the Board of Directors.
9) Ratio of the remuneration of the highest paid director to that of the employees whoare not directors but receive remuneration in excess of the highest paid director duringthe year: NIL.
10) Affirmation that the remuneration is as per Remuneration policy :
The Company affirms that the remuneration paid is as per the Remuneration policy of theCompany.
11) Pursuant to the provisions of the Companies (Appointment & Remuneration ofmanagerial personnel ) rules 2014 no employee is drawing remuneration in excess of theprescribed limits.
ANNEXURE TO DIRECTORS' REPORT
PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OFBOARD OF DIRECTORS) RULES 1988
A. Conservation of Energy :
Energy conservation is a high priority area for the Company. Our continued effort toreduce and optimize the use of energy consumption has shown positive results. The Companyis continuously putting its efforts to improve Energy Management by way of monitoringenergy related parameters on regular basis. The Company is committed to transform energyconservation into a strategic business goal fully along with the technological sustainabledevelopment of Energy Management System. It is putting best endeavour to reduce energyconsumption in all its operations and activities.
a) Energy Conservation measures taken by the Company
1) Continuously monitoring the energy parameters such as maximum demand power factorload factor TOD tariff utilization on regular basis.
2) Continuously replacing the inefficient equipment's with latest energy efficienttechnology & up gradation of equipment's continually.
3) Automated load management system to improve power factor with reduced contractdemand
4) Installed of LT APFC 5950 KVAR with detune reactor to improve Power Factor up tounity for reducing line losses
5) Installed of MV APFC 1000 KVAR with detune reactor to improve Power Factor up tounity for reducing line losses
6) Installed VFD at Air compressor motors of 8 & 13 bar and its close monitoring torun at required sustainable parameters.
7) Installed EMS system in Air Compressors to monitor controlling of compressors toreduce unload running of compressors and thereby saving in power.
8) Utilized waste vapours of CP Plant in to chilling Plant VAM
9) Reduce pressure losses in air/liquid pipe lines to reduces load in connectedequipment's.
b) Impact of measures at (a) above for reduction of energy consumption and consequentimpact on the cost of production of goods
1) Reduction in consumption of electricity and fuel oils with consequent reduction incost of production.
2) Product improvement product development and growth in business
c) Total energy consumption and energy consumption per unit of production as perprescribed Form - A given hereunder :-
A. Power and Fuel Consumption:
| ||2017-18 ||2016-17 |
|1. Electricity || || |
|(a) Purchased || || |
|- Units ||66685366 ||60599918 |
|- Total Amount ||500872636 ||394386178 |
|- Rate/Unit(Rs.) ||7.51 ||6.51 |
|(b) Own generation || || |
|(i) Through diesel generator in Units (KWH) ||3680 ||4960 |
|Liters of HSD Consumed ||1200 ||1689 |
|Unit per Ltr. of Diesel ||3.06 ||2.93 |
|(ii) Through HFO/generator || || |
|Unit ||20176012 ||29131213 |
|Consumed ||4614608 ||7376850 |
|Unit per Ltr of FO ||4.37 ||3.949 |
|(iii) Gas (Generated by Gas based Gen Set) || || |
|Quantity (in units KWH) ||- ||89000 |
|Gas Consumed (in SM3) ||- ||25535 |
|Unit per KWH / SM3 ||- ||3.48 |
|2. Gas || || |
|Quantity (in units) || ||- |
|Total amount || ||- |
|Average rate || ||- |
|3. Furnace oil || || |
|Quantity (in Ltrs.) ||7418529 ||7654369 |
|Total amount ||170007873 ||166515492 |
|Average rate ||22.91 ||21.75 |
|B. Consumption per unit of production (in tons) || || || |
|Product: Polyester Pet Chips & Yarn || || || |
|Electricity ||Standards (if any) ||2017-18 ||2016-17 |
|Purchases and Own Generation |
(Own Generation Through F.O. based Gen Set)
|- ||928.71 ||1028.16 |
(Forms for disclosure of particulars with respect to Technology Absorption)
I. Research and Development (R & D)
1. Specific areas in which R & D carried out by the company
a) Modification in polymerization to improve process cost optimization
b) Up-gradation and modification in yarn spinning lines
c) Value added yarns are developing.
d) Continuous monitoring of Equipments efficiency to reduce power consumption
e) Substitution of imported spares with indigenous spares by developing in localmarkets
2. Benefit derived as a result of the above R & D
a) Reduction in wastage and energy consumption.
b) Reduction in cost of power.
c) Strengthening value added product portfolio and improved contribution margin
d) Improvement in QUALITY Rationalization of manufacturing cost
e) Reduction in daily demand by even distribution of daily load
3. Future plan of action
a) Development of new properties in yarns for value addition .
b) Enhancement of productivity of spinning and take-up machines.
c) Energy optimization for process plants
d) Optimization of product process for value added product mix .
4. Expenditure on R & D / Product Development
Capital and recurring expenditure is incurred by the company regularly.
II. Technology absorption adaptation and innovation
1. Efforts made towards technology absorption adoption and innovation
a) Replacing local developed spares from costlier imported spares in various importedequipments.
b) Adopting modern tools & techniques in maintenance to reduce down time ofmachineries
2. Benefits derived as a result of above efforts
a) Improvement in operating performance and reduction in wastage
b) Reduction in cost of production
c) Reduction in energy cost
3. Information regarding technology imported during the last five years
|Technology Imported ||Year of Import ||Status |
|POY and FDY Plant ||2013 ||Absorbed |
III. FOREIGN EXCHANGE EARNING AND OUTGO
I. Activities relating to exports Initiatives taken to increase export markets forproducts and services and export plans
Newer markets are being explored and initiative taken to focus on increasing exports.
II. Total Foreign Exchange used and earned
| || ||(Rs. in Lacs) |
| ||2017-18 ||2016-17 |
|[a] Foreign Exchange Earnings ||7881.24 ||5437.51 |
|[b] Foreign Exchange Outgo ||19284.34 ||24631.37 |
ANNEXURE TO DIRECTORS' REPORT ANNEXURE- 6 ( i)
Nomination & Remuneration and Evaluation Policy (Framed under Section178(3) ofCompanies Act 2013 & the Listing Agreement)
This Nomination Remuneration and Evaluation Policy (the "Policy") applies tothe Board of Directors (the "Board") Key Managerial Personnel (the"KMP") and the Senior Management Personnel of Sumeet Industries Limited (the"Company").
"Key Managerial Personnel (KMP) means
(i) Managing Director;
(ii) Company Secretary
(iii) Whole-time Director;
(iv) Chief Financial Officer; and
(v) Such other Officer as may be prescribed.
The term "Senior Management Personnel" means to include all members otherthan the Directors and KMPs of the Company who are the functional heads of thedepartments/divisions/branches of the Company.
This Policy is in compliance with Section 178 of the Companies Act 2013 read alongwith the applicable rules thereto and Clause 49 under the Listing Agreement.
1.1 Sub-section (3) of Section 178 of the Companies Act 2013 states that theNomination and Remuneration Committee shall formulate the criteria for determiningqualifications positive attributes and independence of a director and recommend to theBoard a policy relating to the remuneration for the directors key managerial personneland other employees.
1.2 Section 178 of the Companies Act 2013 has been made effective from April 1 2014by the Central Government by notification no. S.O. 902(E) issued on March 26 2014.Therefore this Nomination and Remuneration Policy ("the Policy") has been framedin compliance with the provisions of the Act and Rules made under the Act.
1.3 The Policy provides a framework for remuneration to the members of the Board ofDirectors ("Board") Key Managerial Personnel ("KMP") and the SeniorManagement Personnel ("SMP") of the Company (collectively referred to as "Executives").
The expression senior management" means employees of Company who aremembers of its core management team excluding directors comprising all members ofmanagement one level below the executive directors including the functional heads.
1.4 The existing Remuneration Committee of the Board of Directors has been re-named asNomination and Remuneration Committee ("the Committee or NRC") so as to complywith the provisions of Section 178(1) of the Act. The Members of the Committee shall beappointed by the Board and shall comprise three or more non-executive directors out ofwhich not less than one-half shall be independent directors. Any fraction in the one-halfshall be rounded off to one.
1.5 This Policy will be called " SIL Nomination & Remuneration Policy"and referred to as "the Policy".
1.6 The Policy will be reviewed at such intervals as the Nomination and RemunerationCommittee will deem fit.
2.1 The objectives of the Policy are as follows:
2.1.1 To set criteria for determining qualifications positive attributes andindependence of a director and remuneration of the Executives.
2.1.2 To enable the Company to attract retain and motivate highly qualified membersfor the Board and other executive level to run the Company successfully.
2.1.3 To enable the Company to provide a well-balanced and performance-relatedcompensation package taking into account shareholder interests industry standards andrelevant Indian corporate regulations.
2.1.4To ensure that the interests of Board members & senior executives are alignedwith the business strategy and risk tolerance objectives values and long-term interestsof the company and will be consistent with the "pay for performance" principle.
2.1.5To ensure that remuneration to directors KMP and senior management employees ofthe Company involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.
3.1 The Board is ultimately responsible for the appointment of Directors and KeyManagerial Personnel.
3.2 The Board has delegated responsibility for assessing and selecting the candidatesfor the role of Directors Key Managerial Personnel and the Senior Management of theCompany to the Nomination and Remuneration Committee which makes recommendations &nominations to the Board.
4. PRINCIPLES OF REMUNERATION
4.1 Support for Strategic Objectives: Remuneration and reward frameworks and decisionsshall be developed in a manner that is consistent with and supports and reinforces theachievement of the Company's vision and strategy.
4.2 Transparency: The process of remuneration management shall be transparentconducted in good faith and in accordance with appropriate levels of confidentiality.
4.3 Internal equity: The Company shall remunerate the Executives in terms of theirroles within the organisation. Positions shall be formally evaluated to determine theirrelative weight in relation to other positions within the Company.
4.4 External equity: The Company strives to pay an equitable remuneration capable ofattracting and retaining high quality personnel. Therefore the Company will remainlogically mindful of the ongoing need to attract and retain high quality people and theinfluence of external remuneration pressures. Reference to external market norms will bemade using appropriate market sources including relevant and comparative survey data asdetermined to have meaning to the Company's remuneration practices at that time.
4.5 Flexibility: Remuneration and reward shall be sufficiently flexible to meet boththe needs of individuals and those of the Company whilst complying with relevant tax andother laws.
4.6 Performance-Driven Remuneration: The Company shall establish a culture ofperformance-driven remuneration through the implementation of the Performance IncentiveSystem.
4.7 Affordability and Sustainability: The Company shall ensure that remuneration isaffordable on a sustainable basis.
5. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee is responsible for:
5.1 reviewing the structure size and composition (including the skills knowledge andexperience) of the Board at least annually and making recommendations on any proposedchanges to the Board to complement the Company's corporate strategy with the objective todiversify the Board;
5.2 identifying individuals suitably qualified to be appointed as the KMPs or in thesenior management of the Company;
5.3 recommending to the Board on the selection of individuals nominated fordirectorship;
5.4 making recommendations to the Board on the remuneration payable to the Directors/KMPs/Senior Officials so appointed/reappointed;
5.5 assessing the independence of independent directors;
5.6 such other key issues/matters as may be referred by the Board or as may benecessary in view of the Listing Agreement and provision of the Companies Act 2013 andRules thereunder.
5.7 to make recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract;
5.8 ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks;
5.9 to devise a policy on Board diversity;
5.10 to develop a succession plan for the Board and to regularly review the plan;
The Nomination and Remuneration Committee comprises of the following:
a) The Committee shall consisting of minimum four members out of that there will beminimum three non-executive directors and majority of them being independent.
b) Minimum two (2) members shall constitute a quorum for the Committee meeting.
c) Membership of the Committee shall be disclosed in the Annual Report.
d) Term of the Committee shall be continued unless terminated by the Board ofDirectors.
a) Chairman of the Committee shall be an Independent Director.
b) In the absence of the Chairman the members of the Committee present at the meetingshall choose one amongst them to act as Chairman.
c) Chairman of the Nomination and Remuneration Committee meeting could be present atthe Annual General Meeting or may nominate some other member to answer the shareholders'queries.
COMMITTEE MEMBERS' INTERESTS
a) A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.
b) The Committee may invite such executives as it considers appropriate to be presentat the meetings of the Committee.
a) Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.
b) In the case of equality of votes the Chairman of the meeting will have a castingvote.
The Committee shall :-
i) review the ongoing appropriateness and relevance of the Policy;
ii) ensure that all provisions regarding disclosure of remuneration includingpensions leave encashment gratuity etc. are fulfilled;
iii) obtain reliable up-to-date information about remuneration in other companies;
iv) ensure that no director or executive is involved in any decisions as to their ownremuneration.
6. PROCEDURE FOR SELECTION AND APPOINTMENT OF THE BOARD MEMBERS
6.1 Board membership criteria:
6.1.1The Committee along with the Board shall review on an annual basis appropriateskills characteristics and experience required of a Board Member. The objective is tohave a Board with diverse background and experience in business government academicstechnology and in areas that are relevant for the Company's global operations.
6.1.2 In evaluating the suitability of individual Board members the Committee shalltake into account many factors including general understanding of the Company's businessdynamics global business and social perspective educational and professional backgroundand personal achievements. Directors must possess experience at policy-making andoperational levels in large organizations with significant international activities thatwill indicate their ability to make meaningful contributions to the Board's discussion anddecision-making in the array of complex issues facing the Company.
6.1.3 Director should possess the highest personal and professional ethics integrityand values. They should be able to balance the legitimate interest and concerns of all theCompany's stakeholders in arriving at decisions rather than advancing the interests of aparticular constituency.
7. PROCEDURE FOR SELECTION AND NOMINATION OF KMP AND SMPS
The C.F.O who is also a Member of the NRC shall along with the Chairman of thecommittee and the Company Secretary / Vice President ( Plant ) identify and appointsuitable candidates for appointing them as KMPs (excluding Executive Directors) or SMPs ofthe Company on the basis of their academic professional qualifications relevant workexperience skill and other capabilities suitable to the position of concerning KMP orSMP.
Further in case of KMP (excluding Executive Director) appointment approval of theBoard of Directors / concerned Committee shall be taken in accordance with provisions ofrelevant Act statutes regulations etc. Existing as on that date. The appointment and/orremoval of KMPs shall be placed before the NRC and / or Board of Directors at regularintervals.
8. REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT
The guiding principle is that the level and composition of remuneration shall bereasonable and sufficient to attract retain and motivate Directors Key ManagementPersonnel and other senior officials.
The Directors Key Management Personnel and other senior official's salary shall bebased and determined on the individual person's responsibilities and performance and inaccordance with the limits as prescribed statutorily if any.
The Nominations & Remuneration Committee (NRC) determines individual remunerationpackages for Directors KMPs and Senior Officials of the Company taking into accountfactors it deems relevant including but not limited to market business performance andpractices in comparable companies having due regard to financial and commercial health ofthe Company as well as prevailing laws and government/ other guidelines. The Committeeconsults with the Chairman of the Board as it deems appropriate.
a) Base Compensation (fixed salaries):
Must be competitive and reflective of the individual's role responsibility andexperience in relation to performance of day-to-day activities usually reviewed on anannual basis; (includes salary allowances and other statutory/non-statutory benefitswhich are normal part of remuneration package in line with market practices).
b) Variable salary:
The NRC may in its discretion structure any portion of remuneration to link rewards tocorporate
and individual performance fulfilment of specified improvement targets or theattainment of certain financial or other objectives set by the Board. The amount payableis determined by the Committee based on performance against pre-determined financial andnon-financial metrics.
(ii) Statutory Requirements:
Section 197(5) provides for remuneration by way of a fee to a director forattending meetings of the Board of Directors and Committee meetings or for any otherpurpose as may be decided by the Board.
Section 197(1) of the Companies Act 2013 provides for the total managerialremuneration payable by the Company to its directors including managing director andwhole time director and its manager in respect of any financial year shall not exceedeleven percent of the net profits of the Company computed in the manner laid down inSection 198 in the manner as prescribed under the Act.
- The Company with the approval of the Shareholders and Central Government mayauthorise the payment of remuneration exceeding eleven percent of the net profits of thecompany subject to the provisions of Schedule V.
- The Company may with the approval of the shareholders authorise the payment ofremuneration upto five percent of the net profits of the Company to its any one ManagingDirector/Whole Time Director/Manager and ten percent in case of more than one suchofficial.
- The Company may pay remuneration to its directors other than Managing Director andWhole Time Director upto one percent of the net profits of the Company if there is amanaging director or whole time director or manager and three percent of the net profitsin any other case.
- The net profits for the purpose of the above remuneration shall be computed in themanner referred to in Section 198 of the Companies Act 2013.
8.1 The Independent Directors shall not be entitled to any stock option and may receiveremuneration by way of fee for attending meetings of the Board or Committee thereof or forany other purpose as may be decided by the Board and profit related commission as may beapproved by the members. The sitting fee to the Independent Directors shall not be lessthan the sitting fee payable to other directors.
8.2 The remuneration payable to the Directors shall be as per the Company's policy andshall be valued as per the Income Tax Rules.
8.3 The remuneration payable to the Key Managerial Personnel and the Senior Managementshall be as may be decided by the Board having regard to their experience leadershipabilities initiative taking abilities and knowledge base.
9. EVALUATION/ ASSESSMENT OF DIRECTORS/ KMPS/SENIOR OFFICIALS OF THE COMPANY
The evaluation/assessment of the Directors KMPs and the senior officials of theCompany is to be conducted on an annual basis and to satisfy the requirements of theListing Agreement. The following criteria may assist in determining how effective theperformances of the Directors/KMPs/Senior officials have been :
Leadership & stewardship abilities
contributing to clearly define corporate objectives & plans
Communication of expectations & concerns clearly with subordinates
obtain adequate relevant & timely information from external sources.
review & approval achievement of strategic and operational plansobjectives budgets
regular monitoring of corporate results against projections
identify monitor & mitigate significant corporate risks
assess policies structures & procedures
direct monitor & evaluate KMPs senior officials
review management's succession plan
assuring appropriate board size composition independence structure
clearly defining roles & monitoring activities of committees
review of corporation's ethical conduct
Evaluation on the aforesaid parameters will be conducted by the Independent Directorsfor each of the Executive/Non-Independent Directors in a separate meeting of theIndependent Directors.
The Executive Director/Non-Independent Directors along with the Independent Directorswill evaluate/ assess each of the Independent Directors on the aforesaid parameters. Onlythe Independent Director being evaluated will not participate in the said evaluationdiscussion.
10. APPROVAL AND PUBLICATION
10.1 This Policy as framed by the Committee shall be recommended to the Board ofDirectors for its approval.
10.2 The Policy shall form part of Director's Report as required under Section 178(4)of the Companies Act 2013.
11. SUPPLEMENTARY PROVISIONS
11.1 This Policy shall formally be implemented from the date on which it is adopted bythe Board of Directors.
11.2 Any matters not provided for in this Policy shall be handled in accordance withrelevant laws and regulations the Company's Articles of Association.
11.3 The right to interpret this Policy vests in the Board of Directors of the Company
| ||On behalf of the Board of Directors |
| ||Sd/- |
|Place : Surat ||Shankarlal Somani |
|Date : 22nd June 2018 ||Chairman |
ANNEXURE - 6 (ii)
BOARD DIVERSITY POLICY
(Pursuant to Regulation 19(4) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which have came into effect from 1st December 2015)
This policy was originally framed pursuant to Clause 49 of the Listing agreement and isamended pursuant to Regulation 19(4) of the SEBI (Listing Obligations and DisclosureRequirements ) Regulations 2015 which have came into effect from 1st December 2015.
The Board Diversity Policy (the Policy') sets out the approach to have diversityon the Board of Directors (Board') of Sumeet Industries Limited (the"company").
SCOPE OF APPLICATION
The Policy applies to the Board.
The Company recognizes and embraces the benefits of having a diverse Board thatpossesses a balance of skills experience expertise and diversity of perspectiveappropriate to the requirements of the businesses of the Company. The Company seesincreasing diversity at Board level as an essential element in maintaining a competitiveadvantage. A truly diverse Board will include and make good use of differences in theskills regional and industry experience background race gender and other distinctionsbetween directors. The differences will be considered in determining the optimumcomposition of Board and when possible should be balanced appropriately.
The Company maintains that Board appointments should be based on merits thatcomplements and expands the skills experience and expertise of the Board as a wholetaking into account knowledge professional experience and qualifications gender agecultural and educational background and any other factors that the board might considerrelevant and applicable from time to time for it to function effectively.
These diversities will be considered in determining the optimum composition of theBoard and when and wherever possible should be balanced appropriately. All Boardappointments are made on merit in the context of the skills experience independence andknowledge which the Board as a whole requires to be effective.
In the process of attaining a diverse Board based on the aforementioned criteria thefollowing criteria needs to be assessed:
(a) The Board shall have an optimum combination of executives and non- executivedirectors and not less than fifty per cent of the Board of directors comprising non-executive directors.
(b) At least half of the Board should comprise of independent directors (where thechairman of the Board is executive or promoter) or at least one-third of the Boardconsisting of independent directors (where the chairman of the Board is non-executive).
I n any case the Company should strive to ensure that the number of independentdirectors do not fall below 3(three) so as to enable the board to function smoothly andeffectively.
(c) The Company shall have at least one women director on the Board to ensure thatthere is no gender inequality on the Board.
ROLE OF NOMINATION AND REMUNERATION COMMITTEE
The Nomination & Remuneration Committee (Committee') reviews and assessesBoard composition on behalf of the Board and recommends the appointment of new Directorsalso considering the provisions of Companies Act 2013 and rules framed there under. TheCommittee also oversees the conduct of the annual review of Board effectiveness.
In reviewing Board composition the Committee will consider the benefits of all aspectsof diversity including but not limited to those described above in order to enable itto discharge its duties and responsibilities effectively.
In identifying suitable candidates for appointment to the Board the Committee willconsider candidates on merit against objective criteria and with due regard for thebenefits of diversity on the Board.
REVIEW OF THE POLICY
The Committee will review the policy from time to time keeping in view the statutoryrequirement and need of the organization and recommend the same to the Board for theirapproval.
| ||On behalf of the Board of Directors |
| ||Sd/- |
|Place : Surat ||Shankarlal Somani |
|Date : 22nd June 2018 ||Chairman |