CORPORATE GOVERNANCE REPORT -
The Board of Directors of the Company lays great emphasis on the broad principles of Corporate Governance. Given below is the report on Corporate Governance.
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
DFL Infrastructure Finance Limited (DFL) recognizes that Transparency and accountability are the touchstone of the Corporate Governance. The ultimate objective of the Corporate Governance is to enhance value in the long term for all stakeholders and decision-making process reflects this concern.
DFL is committed to conduct its business in a manner, which will ensure long-term growth thereby maximizing value of its shareholders, customers, employees and society at large. DFL's policies are in line with Corporate Governance guidelines prescribed under the Listing Agreements with the Stock Exchange and the Company ensures that various disclosures requirement are complied with for effective Corporate Governance.
DFL recognizes that good Corporate Governance is essential to build and retain the confidence of all stakeholders. To this end, the Company's is to endeavors to ensure:
1. That the system and procedure to monitor the compliance with laws, rules and regulations are in place in each area of its business.
2. That the relevant information regarding the Company and its operations is disclosed, disseminated and easily available to its stakeholders.
3. That the Board of Directors is kept fully informed of all material developments in the Company, the risks in its business and its operations and the rationale for management's decisions and recommendations so that the Board of Directors can effectively discharge its responsibilities to stakeholders.
CORPORATE CODE OF CONDUCT
The activities and conduct of the company and its employees are governed by the Code of Conduct of the Group. The major salutary principles prescribed by the Code of Conduct are:
(a) Conduct of business in consonance with national interest
(b) Fair and accurate possible presentation of financial statement
(c) Practicing political non-alignment
(d) Maintaining quality of product and services
(e) Being a good corporate citizen
(f) Ethical conduct
(g) Commitment to enhancement of stakeholder's value / statutory compliance in all areas.
BOARD OF DIRECTORS
The Company has ensured that the Board functions with utmost transparency, independence which enables the Directors to take informed decisions. To this effect, steps have been taken to ensure that the Board consists of distinguished members with expertise in various fields. The board at DFL is fully aware of its responsibilities to the company, to the stakeholders and to the regulatory authorities and is working towards achieving these responsibilities.
DFL has appropriate personnel in respective position to handle risk management, credit approval collections / sales management. DFL is committed to ethical values and desires lawful business to be conducted by those at helm of the affairs. In connection with this, the company has formulated a code of conduct applicable to Board and senior management. The company also adopted strict insider trading code for preventing insider trading within the company.
Composition of Board
The board has been constituted in such a way to have appropriate mix of the directors with expertise in banking, law, finance, IT, etc. The company has four independent directors to comply with the provisions of the listing agreements. The directors are elected based on their qualification and expertise based on the company's needs. The Board of Directors consists of six members as on the date of the Board Meeting approving this report, the details of which are given below:
The Board of directors meets at regular intervals and the dates for Board meetings are fixed in advance. The Board is briefed on key parameters and activities of the business by way of briefings, business plan documents and presentations on need basis. The Board of the Company met on the following dates during the financial year ended 31st March, 2015. 03.05.2014, 27.05.2014, 04.08.2014, 25.08.2014, 15.10.2014, 05.11.2014, 12.11.2014, 24.11.2014 and 12.02.2015
Mr. S Mahadevan, Mr. T R Suresh, Mr. E Selvaraj, Mr. B Prakash and Mr. S Balachander were present during the last Annual General Meeting of the Company held on September 19, 2014.
The Company placed before the Board the annual operating plans, budgets, performance of various branches and other information including those specified under Annexure I of the Listing Agreement, from time to time.
The Audit Committee monitors and provide effective supervision of the management's financial reporting process with a view to ensuring accurate, timely and proper disclosure and transparency, integrity and quality of financial reporting. The Audit Committee adheres to the Listing Agreement in terms of quorum for its meetings, functioning, role and powers as also those set out in the Companies Act, 1956. The functions of the committee include:
a. Overseeing the company's financial reporting process and disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible
b. Recommendation of appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other services
c. Review of quarterly / annual financial statements before submission to the Board
d. Review of adequacy of internal control systems
e. Review the internal audit function.
f. Review of the company's financial and risk management policies
The company has an Audit Committee, consisting of Independent and Non-Executive Directors. All the members including the Chairman have adequate financial and accounting knowledge.
In the present composition of the committee, Mr. Dakshinamurthy Radhakrishnan is Chairman and Mr. E Selvaraj, Mr. Balasubramanian Ramaiah and Ms. Gomathi Shankar are Members of the Audit Committee of the Company.
The Committee met on 27.05.2014, 04.08.2014, 15.10.2014, 12.11.2014 and 12.02.2015 during the financial year 2014-15. Requisite quorum was present in all the audit committee meetings
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Present Composition of the Committee includes Mr. B Prakash is Chairman and Mr. E Selvaraj, Mr. S Balachander are members of the Committee. During the financial year 2014-15, Stakeholders
Relationship Committee met 3 times.
The Stakeholders Relationship Committee approves and monitors transfers, transmission, splits and consolidation of shares of the Company, reviews Redressal of complaints from shareholders relating to transfer of shares, non-receipt of dividends and other grievances. The Committee also reviews the compliances with various statutory and regulatory requirements.
• All shares have been transferred within one month from the date of the receipt so long as the documents are clear in all respects.
• Total numbers of share transferred in physical form for the financial year ended 31st March, 2015 were 410 shares numbering to 12 share transfers.
• There is no transmission during the financial year ended 31st March, 2015.
• Total numbers of Remat for the financial year ended 31st March, 2015 were 10 shares numbering to 1 remat.
• There are no transfers pending with the Company as on 31st March, 2015.
The remuneration committee, which will assist / suggest the Board in finalizing the compensation packages for the employees of the company. The Committee would have its own terms of references on the basis of which the committee would function. The minutes of the Remuneration committee will be placed before the subsequent Board meeting for ratification and adoption.
The terms of reference of the committee amongst others, shall include:
To assist the Board in the determination of specific remuneration packages / any compensation payment to Managing and Executive Directors.
To provide independent view / opinion on the company's compensation policies with respect to executive management.
To develop and review annual compensation plans, including pension rights, periodic review of salary increments to the executive directors.
To review and approve compensation plans or any other benefits to the employees of the company as a whole.
The Present composition of the committee includes Mr. E Selvaraj, Chairman, Mr. Dakshinamurthy Radhakrishnan, Mr. Balasubramanian Ramaiah and Ms. Gomathi Shankar Members of the remuneration Committee of the Company.
REMUNERATION OF DIRECTORS
The remuneration package of Managing Director and Wholetime Director has been calculated in accordance with the requirements of Schedule XIII of the Companies Act, 1956.
The remuneration of the Managing Director and Wholetime Director were approved by the shareholders through Postal Ballot on 18th March, 2014.
The non-executive directors are being remunerated by way of sitting fees. The details of remuneration paid to the Managing Director and Wholetime Director are disclosed in the Notes on Accounts.
MEANS OF COMMUNICATION
Quarterly and Annual Results were published in accordance with the Stock Exchange Listing Agreement in "Trinity Mirror" (English) and "Makkal Kural" (Tamil).
The results were also displayed on the Company's website @ www.dflfinance.com
GENERAL SHAREHOLDER INFORMATION
Date : 25.09.2015
Time : 10.00 A M
Venue : Balamandir German Hall, 17, Prakasam Street, T. Nagar, Chennai - 600 017
Financial year - 1st April, 2015 to 31st March, 2016
Board Meeting for consideration of accounts : 30.05.2015
Annual General Meeting : 25.09.2015
Posting of Annual Report along with notice of AGM : 31.08.2015
Book Closure dates : 19.09.2015 to 25.09.2015 (both days inclusive)
Last date for receipt of proxy forms ; 23.09.2015 (before 10 am)
Unaudited results for the quarter ending 30th Jun, 2015 : 14.08.2015
Unaudited results for the quarter ending 30th Sep, 2015 : Before 15th Nov, 2015
Unaudited results for the quarter ending 31st Dec, 2015 : Before 15th Feb, 2016
In view of the loss posted by the Company, the Board does not recommend any dividend for the financial year ended March 31, 2015.
Listing on Stock Exchanges:
The Company's shares are presently listed on the Bombay Stock Exchange.
BSE Stock Code 511393
ISIN No: ISINE 071C01019
The Company has paid the listing fees for the financial year 2015-16 to the Bombay Stock exchange
SHARE TRANSFER SYSTEM
Share transfers were processed and share certificates despatched within 30 days from the date of lodgment in accordance with the Stock Exchange listing agreement. The Company's shares are being compulsorily traded in dematerialized form. Requests for dematerialization of shares are completed within the prescribed time limit.
REGISTRAR AND TRANSFER AGENTS
M/s. Cameo Corporate Services Ltd, have been appointed as the registrars and share transfer agents of the Company for both physical and electronic segment and have attended to the share transfer formalities regularly. The Registrar and Share transfer agent can be contacted by the investors at the following address:
M/s. Cameo Corporate Services Ltd, Subramanian Building, No.1, Club House Road, Chennai - 600 002 Phone No: 044 28460390 to 0394 Fax: 044 28460129 Email: firstname.lastname@example.org
Contact person: Ms. K. Sreepriya
As per Section 72 of the Companies Act, 2013 and rule 19(1) of the Companies (Share Capital and Debentures) Rules 2014, facility for making nomination is now available to individuals holding shares in the Company. The nomination form No. SH-13 prescribed by the Government can be obtained from the Company.
Payment of Unclaimed / Unpaid Dividend:
No dividend has been declared by the company since 2006-07 under section 205 of the Companies Act, 1956. The Company has remitted all the unclaimed/unpaid dividends upto the financial year 2005-06 to Investor Education and Protection Fund.
The Company has been regularly filing the financial results, shareholding patterns and other results.
Investor grievance redressal division:
Further to the BSE circular on the exclusive designation of an email ID for investor grievance redressal has to be displayed on the website of the company. Accordingly, the investors are requested to register their complaints in the email ID: email@example.com
DEMATERIALISATION / REMATERIALISATION
As on 31st March, 2015, 49,93,847 shares of the Company held by the shareholders are in dematerialized form, aggregating to 83.86% of the Equity share capital of the Company.
Address for correspondence and any assistance / clarification:
DFL Infrastructure Finance Limited No: 14, Ramakrishna Street T Nagar, Chennai - 600 017 Phone Nos. 28141778 / 1304
COMPLIANCE WITH NON-MANDATORY REQUIREMENTS
The Company has fulfilled the following non-mandatory requirements.
The compliance requirements with respect to Remuneration Committee have been mentioned earlier in this report.
As the Company's financial results are published in an English newspaper and in a Tamil newspaper widely circulated in Chennai, the same are not sent to the shareholders of the company individually. The Company's quarterly / half yearly / annual audited results are also posted on the Company's website.
Shareholders holding more than 1% as at 31.03.2015 of the equity share capital
The response by the Board to the remarks made by the Statutory Auditor in the Auditors' Report is given in the Directors' Report.
Training of Board Members
The necessary training is being provided to the Board members as and when required.
Mechanism for evaluating Non-Executive Board Members
The Mechanism of performance evaluation of Non-executive directors by peer group of directors is under process. This would help the company to determine any modifications in their terms of Appointment.
Whistle Blower Policy
The Company's stand on the whistle Blower policy has been mentioned under DISCLOSURE clause of this report.
The company does not have a material non-listed Indian subsidiary whose turnover or net worth (i.e. paidup capital and free reserves) exceeds 20% of the consolidated turnover or net worth of the listed holding company and its subsidiaries in the immediately preceding accounting year.
The financial statements of the subsidiary companies are placed before and reviewed by the Audit Committee.
Copies of the minutes of the Board meetings of the subsidiary companies are tabled at the Board Meetings of the company.
ANNUAL DECLARATION OF CODE OF CONDUCT BY MANAGING DIRECTOR
This is to confirm that the Board has laid down a Code of Conduct for all the board members and senior management of the company. The Code of Conduct has also been posted on the website of the Company. It is further confirmed that all directors and senior management of the company have affirmed compliance with the Code of Conduct of the company for the financial year ended 31st March 2015 as envisaged in Clause 49 of the Listing Agreement with the Stock Exchanges.
(DIN : 02644584)
Place : Chennai
Date : 14.08.2015