REPORT ON CORPORATE GOVERNANCE
A report on Corporate Governance is set out in compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges.
1) COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
The Company believes in adopting the best practices in the area of Corporate Governance, to promote integrity, transparency, accountability and compliance with laws in the management of the Company.
2) BOARD OF DIRECTORS
a) Composition of Board of Directors
Names of Directors, details of other Directorships / Committee memberships held by them in other companies -
Committee positions only of the Audit Committee and Stakeholders Relationship Committee have been considered as per Clause 49 of the Listing Agreement.
As on 31st March 2015, in compliance with the Corporate Governance norms, the Company's Board of Directors headed by Executive Chairman, Shri Pradip Kumar Daga, comprised 3 other Directors, out of which 2 are Independent Non-executive Directors. In compliance with Clause 49 of the Listing Agreement with Stock Exchanges, 50% of the total number of Directors are Independent Directors.
Membership of the Directors in various committees are within the permissible limits of the Listing Agreement.
None of the Independent Directors of the Company serve as Independent Director in more than 7 listed companies and none of the Independent Director is serving as Whole Time Director in any listed Company.
None of the Directors of the Company was a member of more than ten Board level Committees, or a Chairman of more than five such Committees across all companies, in which he was a Director.
The Shareholders in the 32nd Annual General Meeting held on 6th September 2014, approved appointment of Independent Directors to hold office for five consecutive years upto 30th September 2019. The Company issued letter of appointment to all the Independent Directors as per Schedule IV to the Companies Act, 2013 and the terms and conditions of their appointment have been disclosed on the website of the Company.
b) Familiarisation Programmes for Independent Directors
In accordance with requirements of clause 49 of the Listing Agreement, the Company has put in place a system to familiarize its Independent Directors about the Company, its product, the industry and business model of the Company. Familiarisation Programme is available on the website of the Company (weblink : <http://www.dsl-india.com/wp-content/uploads/2014/12/FPI->Directors-DSL.pdf).
c) Relationships of Directors interse
Shri Pradip Kumar Daga, Chairman and Managing Director and Shri Yashwant Daga are related to each other. Shri Yashwant Kumar Daga is son of Shri Pradip Kumar Daga.
d) Board Meetings held during the year
During the financial year ended 31st March 2015, six meetings of the Board of Directors were held on 15th May 2014, 06th August 2014, 23rd September 2014, 13th November 2014, 10th February 2015 and 31st March 2015.
Dates for the Board Meetings are decided well in advance and communicated to the Directors. The Agenda along with the explanatory notes are sent in advance to the Directors.
The information as required under Annexure 1A to Clause 49 is being made available to the Board.
The Board periodically reviews Compliance Report of all laws applicable to the Company. Steps are taken by the Company to rectify instances of non-compliance, if any.
e) Code of Conduct
The Company has adopted Code of Conduct for Directors and Senior Management Personnel of the Company. The Company has received confirmations from the Directors as well as Senior Management Personnel regarding compliance of the Code during the year under review. The declaration by Shri P. K. Daga, Chairman and Managing Director of the Company in this regard is given as Annexure 'A' to this report. The Code is posted on the website of the Company.
f) Independent Directors Meeting
During the year under review, the Independent Directors met on 10th February 2015 to discuss -
- Evaluation of the performance of Non-Independent Directors and the Board of Directors as a whole.
- Evaluation of the performance of the Chairman of the Company taking into account, the views of other Non-independent Directors.
- Evaluation of the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
3) AUDIT COMMITTEE
The Audit Committee comprised of three Non - Executive Directors namely Shri Vikram Prakash, Chairman, Shri Yashwant Kumar Daga and Shri Pradeep Kumar Drolia as members. The Members have adequate knowledge of accounts and financial matters. One member, Shri Pradeep Kumar Drolia, has accounting and related financial management expertise. Smt. Puneeta Arora, Company Secretary is Secretary to the Committee.
The role and terms of reference of the Audit Committee cover the matters specified for Audit Committees under Clause 49 of the Listing Agreement as well as Section 177 of the Companies Act, 2013.
4) NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee was constituted on 15th May 2014 in place of Remuneration Committee and Selection Committee. It is governed by the Companies Act, 2013 , Clause 49 of the Listing Agreement and Nomination & Remuneration Policy which is displayed on the website of the Company. The role and terms of reference of the Nomination and Remuneration Committee cover the matters specified for this Committee under Clause 49 of the Listing Agreement as well as Section 178 of the Companies Act, 2013.
The Board of Directors of the Company determines the quantum of commission payable to Non executive Directors considering the performance of the Company for the said year.
The Company pays sitting fees of ' 15,000/- per meeting to the Non-Executive Directors for attending the meetings of the Board and ' 7,500/- per meeting for attending the meetings of the Committees of the Board.
c) Shareholdings of Non Executive Directors in the Company as on 31st March 2015
The Company does not have any Stock Option Scheme.
d) Nomination and Remuneration Policy
The aim of the Nomination and Remuneration Policy is to harmonize the aspirations of human resources consistent with the goals of the Company. It lays down criteria and terms and conditions with regard to identifying persons, who are qualified to become Directors and persons who may be appointed in Senior Management and Key Managerial Positions. This policy is directed towards -
- Determination of remuneration based on the Company's size and financial position, trends and practices on remuneration prevailing in peer companies.
- Remuneration linked directly to the efforts, performance, dedication and achievement.
e) Criteria for Performance Evaluation
The Nomination and Remuneration Committee lays down the criteria for performance evaluation of Independent Directors and other Directors, Board of Directors and the Committees of the Board of Directors. The criteria for performance evaluation covers the areas relevant to their functioning as Independent Directors or other Directors or as a member of Board and is based on the expectation that they are performing their duties in a manner which should create and continue to build sustainable value for shareholders and in accordance with the duties and obligations imposed upon them.
5) STAKEHOLDERS RELATIONSHIP COMMITTEE
In compliance of provisions of Section 178 of the Companies Act, 2013 and the Listing Agreement, the Board has renamed the existing 'Shareholders/Investors Grievance Committee' as the 'Stakeholders Relationship Committee'.
Smt. Puneeta Arora, Company Secretary has been designated as the Compliance Officer by the Board.
The Committee deals with stakeholders' complaints and grievances etc. and all other matters incidental or related to shares and securities of the Company.
a) During the financial year ended 31st March 2015, 6 (Six) complaints were received and all were satisfactorily disposed off. As on 31.03.2015, pendency is Nil.
b) There were no pending requests for Share transfers as on 31st March 2015.
6) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
This Committee was constituted on 15th May 2014. The role and terms of reference of the Corporate Social Responsible Committee cover the matters relating to -
i) formulation and review of CSR Policy and to make it comprehensive so as to indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;
ii) to ensure adherence to CSR Policy; and
iii) to provide guidance on various CSR activities to be undertaken by the Company and to monitor its progress.
7) SUBSIDIARY COMPANIES
The Company does not have any subsidiary Company.
i) RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the Ordinary Course of business and on an arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. The appointment of Shri Shantanu Daga to the Office of Profit, being relative of Director was duly approved by Special Resolution passed by Shareholders in General Meeting.
There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosures as required by the Accounting Standards (AS-18) has been made in the notes to the Financial Statements. All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of foreseen and repetitive nature for a period of one year. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee on a quarterly basis. Where the need for
Related Party Transactions can not be foreseen, the Audit Committee has granted omnibus approval for such transactions subject to their value not exceeding ' 1 crore per transaction, which is valid for a period of one year.
The Board has approved a Policy for Related Party Transactions which has been uploaded on the Company's website. (weblink:<http://www.dsl-india.com/wp-content/uploads/2014/11/Policy_on_> Related_Party_Transactions.pdf)
ii) The Company has fully complied with all the requirements of regulatory authorities on Capital Markets and consequently, no penalties/strictures have been imposed on the Company by Stock Exchange, SEBI or any other statutory authority on any matter relating to the capital markets, during the last three years.
iii) All Accounting Standards mandatorily required have been followed without exception in preparation of the financial statements.
iv) Procedures for assessment of risk and its minimization have been laid down by the Company and reviewed by the Board. These procedures are periodically reassessed to ensure that management can control risks.
v) No money was raised by the Company through any public issue, rights issue, preferential issue, etc. during the financial year 2014-15.
vi) Management Discussion and Analysis forms part of the Annual Report to the shareholders and it includes discussion on matters as required under Clause 49 of the Listing Agreement with Stock Exchanges.
vii) There were no material financial and commercial transactions by Senior Management as defined in Clause 49 of the Listing Agreement where they have personal interest that may have a potential conflict with the interest of the Company at large requiring disclosure by them to the Board of Directors of the Company.
viii) VIGIL MECHANISM
The Company has a Vigil Mechanism to provide an avenue for Directors and employees to raise concerns of any fraud, mismanagement, negligence, violations of legal or regulatory requirement. The Policy on Vigil Mechanism is also posted on the website of the Company. Although no personnel was denied access to the Vigil Officer and the Audit Committee, no complaints were received during 2014-15.
9) MEANS OF COMMUNICATION
Quarterly/ Half Yearly Financial Results are published in the following newspapers :-Dainik Jagran or Aaj Samaj(regional newspapers) and Economic Times (National - English) Website where displayed : www.dsl-india.com The Company does not display the official news release on its web site.
11) GENERAL SHAREHOLDER INFORMATION
a) Annual General Meeting to be held :
Date, time and location :
Day : Wednesday
Date : 23rd September, 2015
Time : at 2.30 P.M.
Venue : at the Registered Office of the Company :121, Industrial Area, Baddi, Tehsil Nalagarh, Dist - Solan 173205 (HP)
b) Financial Calendar (2015-16) -
First Quarter Results :On or before 14th August 2015
Second Quarter Results :On or before 14th November 2015
Third Quarter Results :On or before 14th February 2016
Audited results for the year ending 31st March 2016 :On or before 30th May 2016.
c) Dates of Book closure :
19th September, 2015 to 23rd September, 2015 ( both days inclusive )
d) Listing on Stock Exchanges
Name & address of the Stock Exchanges
Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400001 The Calcutt Stock Exchange Association Limited
Stock Code / Scrip Code 514030
The Calcutt Stock Exchange Association Limited
Stock Code / Scrip Code 10014004
ISIN no. for NSDL / CDSL: INE272C01013
There was NIL trading in equity shares of the Company at Calcutta Stock Exchange during the period from 1st April 2014 to 31st March 2015.
(f) The performance of the Company's shares cannot be compared to BSE Sensex for reasons of low liquidity.
(g) Registrars & Transfer Agents in Physical and Electronic (DEMAT) Mode
M/s MAHESHWARI DATAMATICS PRIVATE LIMITED 6,
MANGOE LANE, 2ND FLOOR, KOLKATA - 700 001
Telephone : (033) 22435029, (033)22433809, (033) 22482248.
(h) Designated Exclusive email-id :
The following e-mail ids have been designated exclusively for investor servicing -
a) email@example.com b) firstname.lastname@example.org
(i) Share Transfer System
Share transfers are registered and returned within a maximum period of 15 days from the date of receipt, if the documents are clear in all respects. Executives of the Company have been authorized to approve transfers.
(l) Dematerialisation of shares and liquidity
The equity shares of the Company are under compulsory Demat trading for all categories of investors. The Company's shares are available for Demat trading with both the depositories i.e. CDSL and NSDL. As on 31st March 2015, 89.90% equity shares of the Company stood dematerialized.
i) 121, Industrial Area, Baddi, Tehsil Nalagarh, District Solan 173205 (HP)
ii) Village Pagara, Tehsil & District Guna - 473001 (MP)
Address for correspondence
Deepak Spinners Limited,
S.C.O. 16, 2nd Floor, Sector - 26, Chandigarh -160019. Telephone: (0172) 2790974, (0172) 2790973
As required by sub-clause IX of Clause 49 of the Listing Agreement with the Stock Exchanges, the CEO and CFO have certified to the Board about compliance by the Company with the requirements of the said sub-clause for the financial year ended on 31st March 2015.
Mandatory and Non Mandatory Requirements
The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement with the Stock Exchanges.
The status of adoption of the non-mandatory requirements of Clause 49 of the Listing Agreement is as under :-
1. Shareholders' Rights -
Half yearly financial results including summary of the significant events in last six months is not being sent to the shareholders of the Company.
2. Audit Qualifications -
There are no qualifications in the Auditors' report on the financial statements to the shareholders of the Company.
3. Separate posts of Chairman and CEO
The posts of Chairman and CEO is held by a single individual.
4. Reporting of Internal Auditor
The Internal Auditors report directly to the Audit Committee.
Compliance Certificate for Corporate Governance from Auditors of the Company is given as 'Annexure -B' to this report.
The above report was adopted by the Board of Directors at its meeting held on 29th May 2015.