CORPORATE GOVERNANCE REPORT
1. CORPORATE GOVERNANCE PHILOSOPHY
Corporate Governance is about credibility, transparency and accountability of the Board and Management towards shareholders and other investors ofthe Company. We believe in aBoard ofappropriate size, composition and commitment to adequately discharge its responsibilities and duties. We consistently review on a periodical basis all systems, policies and delegations so as to establish adequate and sound systems of risk management and internal control.
Corporate Governance is founded upon a rich legacy of fair, ethical and transparent governance practices, many of which were practiced by the DCM Group as a whole. Our Corporate Governance Policy has been based on professionalism, honesty, integrity and ethical behaviour.
Through the Governance mechanism in the Company, the Board alongwith its Committees undertake its fiduciary responsibilities to all its stakeholders by ensuring transparency, fairplay and independence in its decision making.
The Corporate Governance philosophy is further strengthened with the adherence to Total Quality Management as a mean to drive excellence and articulating the Company's values and ethics with a Code of Conduct. Given below is a brief report for the year April 01, 2014 to March 31, 2015 on the practices followed at DCM Limited towards achievement of good Corporate Governance:
2. BOARD OF DIRECTORS
(A) Composition of the Board
As on March31, 2015, the Board comprised of Six (6) directors, namely, Mr. Jitendra Tuli, Chairman and Managing Director, Mr. Bipin Maira, Prof. Sudhir Kumar Jain, Mr. Ravi Vira Gupta, Mr. Narendra Pal Chawla and Dr. Meenakshi Nayar.
The Board of Directors of the Company consists of appropriate number of Non-Executive Directors, Independent Directors and Executive Director(s) in conformity with the provisions of Listing Agreement. Mr. Bipin Maira, Prof. Sudhir Kumar Jain, Mr. Ravi Vira Gupta and Dr. Meenakshi Nayar are Independent Directors. Mr. Narendra Pal Chawla is Non-Executive Non Independent Director nominated by Life Insurance Corporation of India (LIC). Mr. Jitendra Tuli is the Chairman and Managing Director of the Company. All the directors bring with them rich and varied experience in different facets of the corporate functioning. They play an active role in the meetings of the Board. None of the directors have any pecuniary relationship with the Company except for receiving sitting fee for attending meetings of the Board and the Committees thereof.
No director of the Company is inter-se related to any other director on the Board.
(B) Board Meetings
During the year April 01, 2014 to March 31, 2015, Six (6) meetings of the Board ofDirectors were held on May 28, 2014, August 14, 2014, November 14, 2014, December 8, 2014, January 15, 2015 and February 14, 2015.
(C) Code of Conduct
The Company's Board has laid down a code of conduct for all the Board Members and Senior Management of the Company, which has been provided, to all concerned executives. The Code of Conduct is available on the website of the Company www.dcm.in <http://www.dcm.in>All Board members and designated Senior Management Personnel have affirmed compliance with the Code of Conduct. A declaration signed by the Chief Executive Officer to this effect is enclosed as Annexure-A and forms part of this report.
(D) Important items discussed at the Board Meetings
The Board of the Company is provided with detailed notes along with the agenda papers in advance in respect of various items discussed in the Board meetings including:
1. Annual Business Plan including financial and operational plan.
2. Capital budgets and updates
3. Quarterly financial results/Annual financial statements.
4. Review of operation of units.
5. Investment proposals.
6. Quarterly statutory compliance report.
7. Minutes of meetings of audit committee and other committees of the board.
8. Show cause, demand, prosecution notices and penaltynotices, which are materially important.
3. AUDIT COMMITTEE
The Audit Committee of the Company consists of Mr. Bipin Maira, Chairman, Mr. Ravi Vira Gupta, Mr. Jitendra Tuli and Prof. Sudhir Kumar Jain as members. The Board ofDirectors of your Company has revised its terms of reference to make it in line with the requirements of Section 177 of the Companies Act, 2013 and clause 49 of the listing agreement.
All the members of Audit Committee are independent directors except Mr. Jitendra Tuli, who is Chairman and Managing Director of the Company.
The terms of reference of the Audit Committee cover all areas mentioned under Clause 49(III) of the listing agreement with the stock exchanges and Section 177 of the Companies Act, 2013. The broad terms of reference of the Audit Committee, as on March 31, 2015, include, inter-alia, systematic review of accounting policies & practices, financial reporting process, adequacy of internal control systems and internal audit function, quarterly/half-yearly financial statements. It also recommends appointment of Statutory Auditors, Internal Auditors, Cost Auditors, Secretarial Auditors and fixation of their audit fees. Mr. Bipin Maira, Mr. Jitendra Tuli and Mr. Ravi Vira Gupta have knowledge of finance and accounts. Prof. Sudhir Kumar Jain has expertise in managerial economics and has knowledge of finance.
Audit Committee meetings are attended by Chief Executive Officer, Chief Operating & Finance Officer, Sr. Executives of Accounts & Finance Department of the Company. Representatives of Statutory / Cost Auditors and Internal Auditors also attend the Audit Committee Meetings on invitation.
During the year April 01, 2014 to March 31, 2015, six (6) Audit Committee meetings have taken place on May 28, 2014, August 14, 2014, November 14, 2014, December 8, 2014, January 15, 2015 and February 14, 2015.
The composition and terms of reference of the Audit Committee are in conformity with the Listing Agreement and the Companies Act, 2013.
The minutes of the meetings of the Audit Committee are placed before the Board for its information.
4. NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors of your Company has renamed and reconstituted its existing 'Compensation Committee' as 'Nomination and Remuneration Committee' and have also revised its terms of reference to make it in line with the requirements of Section 178 of the Companies Act, 2013 and clause 49 of the listing agreement. At present, the 'Nomination and Remuneration Committee' comprised of Mr. Bipin Maira, Chairman, Prof. Sudhir Kumar Jain and Mr. Ravi Vira Gupta, as members of the Committee.
Terms of Reference
The terms of reference of the Nomination and Remuneration Committee cover all areas mentioned under Clause 49(IV) of the listing agreement with the stock exchanges and Section 178 of the Companies Act, 2013. The broad terms of reference of the Nomination and Remuneration Committee inter-alia include recommending a policy relating to remuneration of directors and senior management personnel, formulation of criteria and identify persons who may be appointed as directors or senior management of the Company, Board diversity and any other matters which the Board of Directors may direct from time to time.
During the year April 01, 2014 to March 31, 2015, three (3) 'Nomination and Remuneration Committee' meetings have taken place on May 09, 2014, August 14, 2014 & November 14, 2014.
The Remuneration Policy recommended by the Nomination and Remuneration Committee has been accepted by the Board of Directors. The Remuneration policy is enclosed as Annexure-VI to the Directors Report. During the year under review, there was no pecuniary relationship or transactions ofthe non-executive directors vis-a-vis the Company. Both Executive and Non- Executive Directors were paid remuneration only by way of sitting fees for attending the meetings of Board of Directors and Committees thereof.
Service Contract and Severance Fees
The appointment of Mr. Jitendra Tuli, Chairman and Managing Director of the Company is governed by the resolution passed by the Board of Directors which covers the terms and conditions of such appointment. Both Executive and Non-Executive Directors are paid sitting fees for attending the meetings of Board of Directors and Committees thereof. Stock Option Scheme: The Company does not have any Stock Option Scheme for any of its director or employee.
5. SHARE TRANSFER, FINANCE FACILITIES AND STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Board of Directors of your Company has renamed and reconstituted its existing 'Share Transfer, Finance Facilities and Shareholders'/Investors' Grievance Committee' as 'Share Transfer, Finance facilities and Stakeholders' Relationship Committee' in terms of requirements of Section 178 of the Companies Act, 2013 and clause 49 of the listing agreement. At present, 'Share Transfer, Finance Facilities and Stakeholder Relationship Committee' comprised of Mr. Bipin Maira, Chairman, Mr. Jitendra Tuli, Mr. Ravi Vira Gupta and Prof. Sudhir Kumar Jain, members of committee.
The Company Secretary of the Company acts as Compliance Officer of the Company.
i. All the related party transactions are entered on arm's length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the listing agreement. During the year, there are no materially significant related party transactions made by the company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the company at large. Related party transactions have been dealt with in note 41 to the Standalone Financial Statements annexed. These transactions are not in conflict with the interest of the Company.
The Board of Directors of the Company has formulated 'Related Party Transaction Policy', which is available on website ofthe Companyat weblink: <http://www.dcm.in/pdf/Policy-on-related-party-transactions.pdf>
ii. The Company has not been imposed with any penalty by the Stock Exchanges, SEBI or any other statutory authority on any matter relating to Capital Markets during the last three years.
iii. The Company has a Legal Department headed by General Manager (Legal), which deals with the legal issues. The Secretarial Department is responsible for compliances in respect of Company Law, SEBI, Stock Exchange rules and regulations and other related laws.
iv. The Company has in place Whistle Blower policy which is also available on Company's website www.dcm.in. <http://www.dcm.in> No personnel has been denied access to the audit committee.
v. All mandatory requirements have been appropriately complied with. However, the Company has not adopted the non-mandatory requirements as specified in Annexure XIII of the Listing Agreement.
vi. Management Discussion and Analysis report forming part of the Annual Report is enclosed.
vii. Disclosure regarding appointment or re-appointment of directors
Pursuant to the requirements of the listing agreements with the stock exchanges, on Corporate Governance, the information required to be given, in case of the appointment of a new director or re-appointment of a director, is enclosed as Annexure-B and forms part of this report.
viii. Risk Management
The Company has laid down procedures to inform the Board members about the Risk Assessment and Risk Minimization. These procedures are being reviewed from time to time to ensure appropriate Risk Management and control.
ix. Subsidiary Company
All the subsidiary companies of the Company are managed by their respective Boards having the rights and obligations to manage such companies in the best interest of their stakeholders.
Prof. Sudhir Kumar Jain, independent director of the Company has been appointed as director on the Board of DCM Engineering Limited w.e.f. February 12, 2013, aMaterialUnlistedsubsidiaryofthe Company. All minutes of the Board meetings of unlisted subsidiary companies are placed before the Company's Board. All significant transactions and arrangements entered into by the unlisted subsidiary company are brought to the attention of Company's Board.
The Board of Directors of the Company has formulated 'Material Subsidiary Policy', which is available on website of the Company at weblink: <http://www.dcm.in/pdf/Material-subsidiary-policy.pdf>
The annual audited accounts of all the subsidiary companies and the related detailed information is available at the website of the Company at www.dcm.in <http://www.dcm.in>The annual accounts of the subsidiary companies are also kept for inspection by any shareholder in the head office of the Company and of the subsidiary companies concerned. Also the Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on request.
x. CEO/CFO Certification
The certificate in compliance with Clause 49 IX of the Listing Agreement was placed before the Board of Directors in its meeting.
xi. The details of familiarization programme for Independent Directors is available on website of the Companyat weblink: <http://www.dcm.in/>pdf/Familirisation-program-for%20independe-t%20directors.pdf.
xii. The Independent Directors have confirmed that they continue to meet the 'Criteria of Independence' as stipulated under Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013.
7. MEANS OF COMMUNICATION
The quarterly / half yearly / annual financial results are announced within the stipulated period and are generally published in Financial Express (English) and Jansatta (Hindi) newspapers and are also forwarded to the Stock Exchanges as per Listing Agreement. The results are put up on their website(s) by the Stock Exchanges. All financial results and other shareholder information are also available at the website of the Company at www.dcm.in <http://www.dcm.in>The quarterly/ half yearly financial results are not sent to shareholders individually.
No presentation of financial results has been made to Financial Institutions/ analysts during the year ended March 31, 2015.
8. GENERAL SHAREHOLDER INFORMATION
i. Annual General Meeting:
Date : August 18, 2015
Time : 1.00 PM
Place : MPCU Shah Auditorium, Shree Delhi Gujrati
Samaj Marg, Civil Lines, New Delhi
ii. Book Closure Dates
12.08.2015 to 18.08.2015 (both days inclusive)
iii. Financial Year
April 01 to March 31
iv. Dividend Payment
The company has paid interim dividend @ Rs. 1.50 per equity share to the shareholders on December 8, 2014. The record date for the said interim dividend was November 27, 2014. Final dividend, if any, declared in the ensuing Annual General Meeting, will be paid within 30 days of the date of declaration to those members whose names appear in the Register of Members on the dates of book closure.
Shares of Company are listed on BSE Limited and National Stock Exchange of India Limited. Listing fee for the year upto April 01, 2015 to March 31, 2016 has been paid to both Stock Exchanges.
vi Securities Code
Securities code for Company's equity shares on the Stock Exchanges are as follows:
BSE Limited : 502820
National Stock Exchange of India Limited : DCM
vii. Registrar & Share Transfer Agent
F-65, Okhla Industrial Area, Phase I, New Delhi 110 020
Telephone No: 011- 41406149-52
viii. Share Transfer System
The Company's Shares are traded in the Stock Exchanges in compulsorily Demat mode as per Stock Exchanges Regulations. Power of share transfer has been delegated to Registrar & Share Transfer Agents for expediting share transfers. Physical Shares, which are lodged for transfer, are processed at MCS Limited and returned to the Shareholders within 15 days from the date of receipt subject to documents being valid and complete in all respects.
ix. Dematerialisation of Shares
The Equity Shares of the Company are compulsorily tradable in Dematerialised form by all categories of investors and placed under rolling settlement by SEBI. The Company has signed agreement with NSDL & CDSL for dematerialization of shares. ISIN of the Company for dematerialization of equity shares is INE 498A01018. As on March 31, 2015, 94.35% of paid-up share capital of the Company has been dematerialised.
x. Outstanding ADRs/ GDRs
The Company has not issued any ADRs, GDRs, Warrants or any Convertible Instrument during the financial year 2014-15.
xi. Location of Works:
Textile Division: Hisar (Haryana)
IT Division: Gurgaon (Haryana)
xii. Address for Correspondence
The shareholders may address their communication to the Registrar and Share Transfer Agents at their address mentioned above or to the Company Secretary, 6th Floor, Vikrant Tower, 4 Rajendra Place, New Delhi - 110008 or at exclusively designated e-mail ID for any grievance at investors@dcm. in
For and on behalf of the Board
Sd/- Jitendra Tuli
(Chairman and Managing Director)
Place : New Delhi
Date : June 20, 2015