REPORT ON CORPORATE GOVERNANCE
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
Corporate Governance is the application of best management practices, compliances of law and adherence to ethical standards to achieve the Company's objective of enhancing shareholder value and discharge of social responsibilities. Adopting high standards gives comfort to all existing and potential stakeholders including government and regulatory authorities, customers, suppliers, bankers, employees and shareholders. Corporate Governance signifies acceptance by management of the inalienable rights of shareholders as true owners of the organization and of their own role as trustees on behalf of the shareholders.
At Chambal, Corporate Governance is all about maintaining a valuable relationship and trust with all the stakeholders. At Chambal, we consider our stakeholders as our partners in our success and we remain committed to maximizing stakeholder value, be it shareholders, employees, suppliers, customers, investors, communities or policy makers. This emanates from our strong belief that sound governance system based on relationship and trust is integral to creating value on an overall basis. We have a defined policy framework for ethical conduct of businesses.
Chambal Breweries And Distilleries Limited remains resolute in its commitment to conduct business in accordance with the highest ethical standards and sound Corporate Governance practices.The Company strongly believes that sound and unambiguous system of Corporate Governance practices go a long way in enhancing shareholder value and retaining investor trust and preserving the interest of all stakeholders in a context where ethics and values are under siege.
Chambal Breweries And Distilleries Limited has always believed that an independent and diversified Board following best practices, transparent disclosures and empowerment of shareholders are as necessary as solid financial results for creating and sustaining shareholder's value. The Company fully recognizes the rights of its shareholders to information on the performance of the Company and considers itself a trustee of its shareholders. The Company strives for the fullest possible disclosure standards. It provides detailed information on various issues concerning the Company's business and financial performance to its shareholders. The Board of the Company acts with autonomy and independence in exercising strategic supervision, discharging its fiduciary responsibilities and in ensuring that the management observes high standards of ethics, transparency and disclosure.
At Chambal, it is our belief that as we move closer towards our aspirations of becoming a large corporation, our corporate governance standards must be globally benchmarked.This gives us the confidence of having put in the right building blocks for future growth and ensuring that we achieve our ambitions in a prudent and sustainable manner.
Chambal not only adheres to the prescribed corporate governance practices as per Clause 49 but is also committed to sound corporate governance principles and practices and constantly strives to adopt emerging best practices being followed worldwide. It is our endeavor to achieve higher standards and provide oversight and guidance to management in strategy implementation, risk management and fulfillment of stated goals and objectives.
In India, Corporate Governance standards for listed companies are regulated by the Securities and Exchange Board of India (SEBI), through Clause 49 of the listing agreement of the Stock Exchanges. Chambal Breweries And Distilleries Limited has adopted best practices mandated in Clause 49 of the listing agreement and has established procedures and systems to be fully compliant with it.
2. BOARD OF DIRECTORS
The Board is in a fiduciary position, empowered to oversee the management function with a view to ensure its effectiveness and enhancement of stakeholder value. The Board decides on the policies to be implemented across the Company, and reviews and monitors its strategic direction and annual business plan and business objectives. Acting as trustees on behalf of the shareholders, the Board ensures that the Company has clear goals in enhancing value and growth for all the stakeholders associated with the Company and follows best governance practices.
As on 31 st March, 2014, the Board of company consist of Four (4) Directors out of which one (1) is Non- Executive & Chairman from the promoter group, and three (3) Non Executive Independent Directors and are highly experienced, competent and highly renowned persons from their respective fields. They show active participation at the board and committee meetings, which enhances the transparency and add value to their decision making.The Board of the Company is headed by Non Executive Chairman. Chairman takes the strategic decisions, frame the policy guidelines and extend wholehearted support to Managing
Director, Executive Directors, Business Heads and Associates._The composition of the Board is in conformity with Clause 49, which stipulates that where the regular non-executive Chairman is a promoter of the company or is related to any promoter or person occupying management positions at the Board level or at one level below the Board, at least one-half of the Board of the company shall consist of independent directors.
None of the Directors on the Board is a member of more than 10 Committees or chairman of more than 5 Committees (as specified in clause 49 of the Listing Agreement) across all Public Limited Companies in which he is a Director.
The Board functions as a full Board or through various Committees constituted for specific operation areas. The Board provides leadership, strategic guidance, objective and independent views to the Company's management while discharging its fiduciary responsibilities, thereby ensuring that the management adheres to high standards of ethics, transparency and disclosure.
None of the Non-Executive Directors have any material pecuniary relationship or transactions with the Company. The individual details of the Directors seeking appointment / reappointment at the ensuing AGM of the Company are provided in the explanatory statement companying the notice of the Annual General Meeting.
The members of the Board are provided with the requisite information mentioned in the Listing Agreement well before the Board meetings.
The Board considers all the matters, which are statutorily required to be considered by it. In addition the following issues are also discussed at the meetings of the Board:
• Annual operating and capital expenditure budgets and periodical review thereof.
• Investment /expansion /modernization /diversification plans of the Company.
• Overall strategy and business plans.
• Approval of quarterly / half-yearly / annual results (after review by Audit Committee).
• Compliance with statutory / regulatory requirements and review of major pending legal cases.
• Major accounting practices, provisions and write-offs.
• Transactions pertaining to acquisition /disposal of fixed assets /related party transactions.
• Review of working of various committees of the Board.
• Significant labour problems, if any.
• Minutes of the meeting of other committee and other committee of board.
• Any material default in financial obligation to and by the Company, or substantial non payment for goods sold by company.
As per the statutory provisions the Board is required to meet at least once every quarter and minimum 4 times in a year with the time gap between two consecutive meetings not exceeding four months as per Companies Act, 1956 and listing agreement. Additional meetings are held as and when necessary. As against this, during the period under review the Board held 4 (Four) meetings on 30.05.2013,06.08.2013,12.11.2013 and 07.02.2014 to consider amongst other business, the quarterly / annual performance of the Company and its financial results.
The draft of the minutes is circulated among the Directors for their comment(s) / suggestion(s) and finally after incorporating their views, final minutes are recorded in the minute's books. Post meeting, important decisions taken are communicated to the concerned officials and departments for the effective implementation of the same
3. BOARD COMMITTEES
The Board has three (2) sub-committees namely - Audit Committee and Stakeholders Relationship Committee.
The committee appointed by the board focuses on specific areas and take informed decision within their delegated authority. The committee also makes specific recommendations to the board on various matters from time to time.
1) AUDIT COMMITTEE
The Audit Committee has been constituted as per the Section 292A of the Companies Act, 1956 and the guidelines of the Listing Agreement with the stock Exchanges. The Terms of reference of the committee have been realigned with Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Audit Committee comprises of four (4) Non- Executive Directors out of which (3) three are Independent Directors as on the last day of financial year 2013-14 and is chaired by Mr. Rajkumar Jain, an Independent and Non Executive Director.The composition is strictly according with the provision of section 292A of the Companies Act, 1956 and listing agreement entered with Stock Exchanges. The details of the composition and attendance at its meetings during the financial year 2013-14 are set out in the following table:
Terms of Reference
The primary objective of the Audit Committee is to monitor and effectively supervise the Company's financial reporting process with a view to provide accurate, timely and proper disclosures and at the same time maintain the integrity and quality of the financial reporting.
The role of the Audit Committee includes:
Audit Committee in accordance with section 177 of the Companies Act, 2013 of the Board, inter alia, provides reassurance to the Board on the existence of an effective internal control environment.
The composition, powers, role and terms of reference of the Audit Committee covers the areas as contemplated under Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013. The purpose of the audit committee is to ensure the objectivity, credibility and correctness of the Company's financial reporting and disclosure processes, internal controls, risk management policies and processes, tax policies, compliance and legal requirements and associated matters. In particular, these include:
• Oversight of Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
• Recommending the board, the appointment, reappointment and, if required, the replacement or removal of Statutory Auditors and fixation of audit fees.
• Approval of payment to Statutory Auditors for any other services rendered by them.
• Reviewing with the management, the annual financial statements before submission to the board for approval, with particular reference to:
- Matters required being included in the Director's Responsibility Statement to be included in the Directors' Report.
- Changes if any in accounting policies, practices, and reasons for the same.
- Major accounting entries involving estimates based on the exercise of judgment by the management.
- Significant adjustments made in the financial statements arising out of audit findings.
- Compliance with listing and other legal requirements relating to financial statements.
- Disclosure of related party transactions.
- Qualifications in draft audit report.
• Reviewing with the management, the quarterly financial statements before submission to the board for approval.
• Reviewing, with the management, the statement of uses / application of funds raised through an issue i.e. public issue, rights issue, preferential issue, etc.
• Reviewing with the management, the performance of statutory and internal auditors, and adequacy of internal control systems.
• Discussion with internal auditors on any significant findings and follow up thereon.
• 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 any nature and reporting the matter to the Board.
• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
• To review the functioning of the whistle blower/Vigil mechanism.
• Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.
• Carrying out such other work as may be specifically referred to the committee by the Board of Directors and / or other Committees of Directors of the Company.
Power of Audit Committee
• To investigate any activity with in terms of reference.
• To seek information from any employee in respect of matter under its preview.
• Obtain outside legal or other professional advice.
• To secure attendance of outsiders with relevant expertise, if consider necessary
2) STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee was re-constituted and renamed by the Board as 'Stakeholders Relationship Committee'. The Committee is primarily responsible to review all matters connected with the Company's transfer/ transmission of securities, non-receipt of dividend in case declared and any other related matters and redressal of shareholders' / investors' / security holders' complaints as and when they arise. The Committee also monitors the implementation and compliance with the Company's Code of Conduct for prohibition of InsiderTrading.
The Stakeholders Relationship Committee's composition and the terms of reference meet with the requirements of Clause 49 of the Listing Agreement and provisions of the Companies Act, 2013.
4. CODE OF BUSINESS CONDUCT AND ETHICS FOR DIRECTORS AND SENIOR MANAGEMENT
The Company has laid down a code of conduct and Ethics for the members of the board and identified senior management personnel of the Company. Our Principals are enshrined a Code of conduct for all our board members and senior management of the Company and are adhered to, in letter and spirit. The code of conduct has been posted on the Company's website: -www.chambalkota.in.The code of conduct has been circulated to all the members of the board and senior management personnel and they have affirmed their compliance with the said code of conduct for the financial year ended 31st March 2014.This code ensures compliance with the provision of revised clause 49 of the Listing Agreement executed with the Stock Exchanges. A declaration to this effect signed by Mr. Parasram Jhamnani, Chairman & Non Executive Director of the Company forms part of this report.
5. VIGIL MECHANISM / WHISTLE BLOWER POLICY
As per Section 177 of the Companies Act, 2013, it is necessary to establish a Vigil Mechanism for their directors and employees to report their grievances by every listed Company. Your company has established a vigil mechanism, the details of Vigilance Officer is as under: Name: Mr. Rajkumar Jain, Independent Director
Address - 94, Jain Gali, Rampura, Ward No 50, Ary Samaj Road, Rampur, Tehsil- Ladpura, Kota, 324009, Rajasthan Emailfirstname.lastname@example.org With the rapid expansion of the business in terms of volume, value and geography, the risk associated with each of them has also increased considerably. One such risk identified is the risk of fraud and misconduct. To strengthen the process of conducting business in a fair, transparent and ethical manner, the Company has set up a vigil mechanism. The Company takes any activity of fraud or misconduct very seriously. This Policy is intended to govern reporting and investigation of allegations on violations of the Code of Conduct of the Company, for which a dedicated email id cbdl ©chambalkota.in has been established. Mr. Rajkumar Jain, Chairman of the Audit Committee of the Company has been nominated by the Board as Ombudsperson for this purpose. No employee was denied access to the Audit Committee during the year.
6. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
Comprehensive guidelines in accordance with the SEBI regulations are in place. The code of Conduct and corporate disclosure practices framed by the company has helped in ensuring compliance with the requirements.
1) RELATED PARTYTRANSACTION
Related party transactions are defined as transactions of the Company of a material nature with its Promoters, Directors or the Management or relatives, etc. that may have potential conflict with the interest of the Company at large.
All transaction covered under the Related Party Transactions are regularly ratified and/or approved by the Board. There has been no transaction of the Company with its promoters, their subsidiary or the management that may have conflict with the interest of the Company at large.
2) DISCLOSURE OF ACCOUNTINGTREATMENT
The Company has followed all the relevant accounting standards issued by Institute of Chartered Accountants of India (ICAI) to the extent applicable.
3) STATUTORY COMPLIANCE, PENALTIES AND STRICTURES:
The Company has complied with the regulations pertaining to Listing Agreement and company law compliances.
4) COMPLIANCE WITH CODE OF CONDUCT AND VIGIL MECHANISM (WHISTLE BLOWER MECHANISM):
The Company has laid down a Code of Conduct for all its employees across the organization. The Code of Conduct of the Company lays down that the employees shall promptly report without hesitation any violation or breach to the concerned superior & can make suggestion for further improvement also.
The code provides that the Company shall support and protect employees for doing so.The Company has established vigil mechanism in line with requirement given under Clause 49 of the Listing Agreement and section 177(9) of Companies Act, 2013 for employees to report concerns about unethical behavior. No personnel have been denied access to the Audit Committee.
5) COMPLIANCEWITH RECOMMENDATORY AND OTHER MANDATORY REQUIREMENTS:
a) The Company follows the guidelines as recommended from time to time by Institute of Company Secretaries of India. One such instance is the adoption of Secretarial Standards in respect to preparation and recording of minutes and other statutory records and registers.
b) In respect to audit qualifications, the Company is making conscious efforts towards moving into a regime of unqualified financial statements.
TRANSACTIONWITH NON EXECUTIVE DIRECTOR
There are no pecuniary relationships or transaction of Non Executive Director vis-a-vis the Company which had any potential conflict with the interest of the Company at large.
9. MEANS OF COMMUNICATION
a. Quarterly, Half yearly and Annual financial Results are published in one English leading national newspaper i.e. The Free Press Journal and one Marathi newspaper of repute circulated widely in the regional language of the state i.e. Navshakti.
b. The Company's Results and other Corporate announcement are regularly sent to the stock exchanges.
c. All price sensitive information is made available at the earliest through newspapers and intimated to the stock exchanges for public dissemination.
d. Annual Report containing, inter alia, Audited Annual Accounts, Directors' Report, Auditors' Report and other important information is circulated to members and others entitled thereto. The Management's Discussion and Analysis (MD&A) Report forms part of the Annual Report.
10. GENERAL SHAREHOLDER INFORMATION
A. Company Registration Details
The Company is registered in the State of Rajasthan The Corporate Identity Number (CIN) allotted to the Company by the Ministry of Corporate Affairs (MCA) is L99999RJ1985PLC046460.
B. Annual General Meeting
Date: Saturday, 29th November, 2014
Time: 03:00 P.M.
Venue: Registered Office at 7-A Shopping Centre, Kota
C. Financial Year: 1st April to 31st March
The tentative schedule of Financial Results of the Company is as follows:
June Quarter Ending Results :- Within 45 days from end of quarter.
September Quarter Ending Results:- Within 45 days from end of quarter.
December Quarter Ending Results:- Within 45 days from end of quarter.
March Quarter/Year Ending Results Within 60 days from end of quarter
E. Book Closure Date
The Register of Members and the Share Transfer Books of the Company shall remain closed from Friday, 14th day of November, 2014 to Saturday, 15th day of November, 2014, (both days inclusive).
F. Listing on Stock Exchanges
The equity shares are presently listed on Bombay Stock Exchange Limited (BSE) and Jaipur Stock Exchange Limited (JSE).
G. Payment of Listing fees
The Company has paid the listing fee upto 31 st March 2015 to the BSE Limited, where the shares of the Company are listed.
H. Stock Code : Bombay Stock Exchange : 512301 Jaipur Stock Exchange : 786
I. Demat ISIN for NSDL and CDSL INE417N01011
K. Registrar and Share Transfer Agent
M/s Adroit Corporate Services Pvt. Ltd., Mumbai, is the Registrar and Share Transfer Agent of the Company for handling both electronic and physical shares transfers. The address and contact detail of the same is given below:
Adroit Corporate Services Pvt Ltd.
19/20 Jaferbhoy Industrial Estate,1 st Floor, Makwana Road Marolnaka, Mumbai- 400059, e-mail: email@example.com
L. Share Transfer Process
Share transfers are processed and share certificates duly endorsed are returned within a period of 15 days from the date of receipt, subject to the documents being valid and complete in all respects. A summary of transfer/ transmission of securities of the Company so approved by the Company is placed at every Board meeting / Shareholders'/Investors' Grievance Committee.The Company obtains from a Company Secretary in Practice half-yearly certificate of compliance with the share transfer formalities as required under Clause 47(c) of the Listing Agreement and files a copy of the said certificate with the Stock Exchanges. The certificate in this regards has been obtained from V. M. & Associates, Practicing Company Secretaries, and the same has been forwarded to Bombay Stock Exchange Limited and Jaipur Stock Exchange Limited.
M Reconciliation of Share Capital Audit
Secretarial Audit for reconciliation of shares held with Depository Participants and in Physical form is being carried out in every quarter by a practicing Company Secretary and his audit report is placed before the Board for its perusal and filed regularly with the Stock Exchange within the stipulated time. The Audit Certificate for the same has been obtained from V. M. & Associates, Practicing Company Secretaries, and the same has been forwarded to Bombay Stock Exchange Limited and Jaipur Stock Exchange Limited.
N. Outstanding GDRs/ADRs/Warrants Or Any Convertible Instruments
The Company has not issued GDRs/ADRs/Warrants or any other instruments, which are convertible into equity shares of the Company during the financial year 2013-14 and no ADR/ GDR/ warrant convertible into equity share are pending for conversion as on 31 st March 2014.
O. Depository System
Shareholders can trade in the Company's shares only in electronic form. The process for getting the shares dematerialized is as follows:
(a) Shareholder submits the shares certificate along with Dematerialization Request Form (DRF) to Depository Participant (DP).
(b) DP processes the DRF and generates a unique Dematerialization Request No.
(c) DP forwards DRF and Share Certificates to Registrar and Share Transfer Agent (RTA).
(d) RTA after processing the DRF confirms or rejects the request of Depositories.
(e) If confirmed by the RTA, depositories give credit to shareholder in his account maintained with DR
(f) Physical shares received for dematerialization are processed and dematerialized within the stipulated period, provided the same are in order in all respect. Bad Deliveries are immediately returned to the DR
R. Address for correspondence
Shareholder's correspondence relating to transfer/transmission/issue of duplicate shares or for any queries or grievances should be addressed to the Company's RTA at the address mentioned below:
Adroit Corporate Services Pvt. Ltd.
19/20 Jaferbhoy Industrial Estate, 1st Floor, Makwana Road Marolnaka, Mumbai- 400059 e-mail: firstname.lastname@example.org
S. In Compliance of Clause 47(f) of the Listing Agreement, the Company has designated exclusive Email ID for redressal of Investor Grievances i.e. email@example.com Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participant.
T. CEO &CFO CERTIFICATE
Certificate from CEO & CFO for the financial year ended on March 31 st, 2014 has been annexed to the Annual Report.
Sd/- PARASRAM JHAMNANI
DIN = 01266196
For and on behalf of the Board of Directors of
Chambal Breweries And Distilleries Limited
Sd/- RAJKUMAR JAIN
PLACE : KOTA
DATE : 18.10.2014