Report on Corporate Governance
The Directors present the Company's Report on Corporate Governance.
I. MANDATORY REQUIREMENTS
1. Company's Philosophy on Corporate Governance
Corporate Governance refers to a combination of regulations, procedures and voluntary practices that enable companies to maximise stakeholders' value by attracting financial and human capital and efficient performance.
Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.
As a responsible corporate citizen, it is the earnest endeavor of the Company to improve its focus on Corporate Governance by increasing accountability and transparency to its shareholders, bankers, customers and other stakeholders.
2. Board of Directors
A) Composition as on 31st December 2015
The Board of Directors of the Company consisted of11 members, comprising:
¦ Two Executive Directors in the whole-time employment of the Company.
¦ Six Non-executive Directors, five of whom are Independent, drawn from amongst persons with experience in business, finance, legal, technology and management.
¦ Three Non-executive Directors nominated by and representing the Holding Company. The Chairman of the Board is a Non-executive Director.
The composition of the Board is in conformity with Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
3. Audit Committee
A) Terms of Reference
The Audit Committee acts as a link between the Internal and Statutory Auditors and the Board of Directors. The Committee provides the Board with additional assurance as to the adequacy of the Company's internal control systems and financial disclosures. The broad terms of reference of the Audit Committee are as per Section 177 of the Companies Act, 2013 and to review with the Management and/or Internal Auditors and/or Statutory Auditors in the following areas:
i) Overview of the Company's financial reporting process and financial information disclosures;
ii) Review with the Management, the annual and quarterly financial statements/results before submission to the Board;
iii) Review with the Management, the Internal and External Audit Reports and the adequacy of internal control systems;
iv) Review the adequacy and effectiveness of accounting and financial controls of the Company, compliance with the Company's policies and applicable laws and regulations;
v) Recommending the appointment and removal of External Auditors and fixation of audit terms;
vi) Review of utilization of proceeds raised from Public/Rights issues.
B) Composition, Name of Members and Chairperson
The Audit Committee of the Company comprises five members, four of whom are Independent Non-executive Directors and one Non-executive Director representing the Holding Company. All the members of the Audit Committee are qualified and having insight to interpret and understand financial statements
4. Nomination and Remuneration Committee
A) Terms of Reference
The scope of the Nomination and Remuneration Committee extends to recommending to the Board, the compensation terms of the Executive Directors, including Performance Bonus, Employees Stock Option Scheme etc.
B) Composition, Name of Members and Chairperson
The Nomination and Remuneration Committee of the Company comprises four members, two of whom are Non-executive Directors representing the Holding Company and the Chairman is an Independent Director.
As on 31st December 2015, the Nomination and Remuneration Committee of the Company comprises the following members:
Mr Shailendra Hari Singh was appointed as Managing Director and Chief Executive Officer for a period of 5 years with effect from 23rd March 2015 till 22nd March 2020.
¦ Mr Yasuo Ikeda was appointed as a Whole-time Director designated as Chief Operating Officer for a period of 3 years commencing from 1st January 2014 till 31st December 2016.
¦ Except for the Whole-time Directors and Independent Directors, all the members of the Board are liable to retire by rotation. The appointment of the Whole-time Director is governed by the resolutions passed by the Board, as per recommendations of the Nomination and Remuneration Committee, which cover the terms and conditions of such appointment read with the service rules of the Company, subject to final approval by the members.
¦ No Severance Fee is payable and no stock option has been given.
¦ Performance Bonus payable to the Executive Directors is determined on the basis of the status of the inventory and debtors, profitability and overall financial position of the Company.
¦ Dr. P K Dutt, Non-executive Chairman holds 133 equity shares of the Company. No other Directors hold any shares or convertible instruments of the Company.
¦ In addition to the sitting fees, the Company had approved payment of commission to its Resident Non-executive Directors pursuant to approval of the members at the Annual General Meeting held on 12th April 2013. The criteria of payment of commission to the Resident Non-executive Directors, as decided in the Board Meeting held on 9th February 2011 and 8th February 2012, is as under :
• Non-Executive Chairman - 0.5% of the profits subject to annual ceiling of Rs 850,000/-
• Others - 0.5% of the profits subject to annual ceiling of Rs 180,000/- per Director.
The payment of the commission is approved for a period of 5 years commencing from 1st January 2014.
¦ At present, sitting fees of Rs.18,000/- is paid to the Chairman of the Board and the Chairman of the Audit Committee. A sitting fees of Rs.15,000/- is paid to each Resident Non-executive Director for attending each meeting of the Board and the Committees thereof.
¦ No commission and sitting fees are payable to the Non-resident Non-executive Directors.
¦ Other than sitting fees and commission, there is no other pecuniary relationship or transactions with any of the Non-executive Directors.
5. Investors Grievance and Stakeholders' Relationship Committee
A) Terms of Reference
The terms of reference of the Committee include redressal of the shareholders'/investors complaints on transfer of shares, non-receipt of balance sheets, non-receipt of dividend etc
A meeting had been held on 4th February 2015. Dr P K Dutt and Mr P Koek attended the meeting.
D) Status of Transfers
During the year ended 31st December 2015, 1467 shares in physical form were processed for transfer. There were no pending share transfers as on 31st December 2015.
During the year ended 31st December 2015, the Company had received no complaints and no complaints were pending for redressal either at the beginning or at the end of the year. Risk Management Committee
A) Constitution, Terms and reference
The Company has a Risk Management Policy which was adopted in its meeting held on 3rd March 2006. The Board in its meeting held on 22nd October 2014 had constituted a Risk Management Committee, defining the roles and responsibilities of the Committee and have delegated to the Committee the function of monitoring and reviewing the risk management plan of the Company. The Committee has the overall responsibility of dealing and approving the various risk policies and associated practices of the Company. The Risk Management Report containing the various risk exposure and mitigation procedure, after its adoption in the Risk Management Committee meeting, is also placed in the subsequent Board meeting. Composition
The Risk Management Committee is constituted of three members, comprising two Directors and the Chief Finance Officer. As on 31st December 2015, the Committee comprises :
Social Responsibility Committee
A) Constitution, Terms and reference
Pursuant to the requirement of Section 135 of the Companies Act, 2013 and The Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility Policy was adopted by the Board of Directors at its meeting held on 25th August 2014. This Policy has been placed in the Website of the Company at the weblink, <http://www.dicindialtd.co/corp-gov-csr.html>.
8. Meeting of the Independent Directors
As per Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors are required to hold at least one meeting in a year to discuss the following:
a) Review the performance ofnon-independent directors and the Board as a whole.
b) Review the performance of the Chairperson of the Company taking into account the views of executive directors and non-executive directors.
c) Assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Accordingly a meeting had been held on 4th August 2015. All the Independent Directors attended the meeting and discussed the above points.
Nomination and Remuneration Committee in its meeting held on 4th February 2015 adopted the performance evaluation criteria for the Independent Directors and the same has been applied by the Board in its meeting held on 5th February 2016 for evaluating the performance of the Independent Directors.
9. Subsidiary Company
The Company had no subsidiary during the Financial year ended 31st December 2015
A) The Board in its meeting held on 5th December 2014 has adopted Related Party Transaction Policy for determining the materiality of related party transactions and also on the dealings with related parties. This Policy has been placed in the Website of the Company at the weblink, <http://www.dicindialtd.co/corp-gov->rptp.html.
B) During the year there were no transactions of material nature with related parties that had potential conflict with the interests of the Company.
Details of all related party transactions form a part of the accounts as required under Accounting Standard 18 as notified by the Companies (Accounting Standards) Rules, 2006 and the same are given in Note 41 to the Financial Statements.
The omnibus approval of the Audit Committee is taken for all proposed related party transactions to be entered into during the forthcoming year and the details of all related party transactions actually entered into in the preceding quarter is placed before them.
C) During preparation of financial statements during the period under review, no accounting treatment which was different from that prescribed in the Accounting Standards was followed.
D) The Company has complied with the requirements of regulatory authorities on capital markets and no penalties/strictures have been imposed against it in the last three years.
E) The Company has adopted a Risk Management Policy in the meeting of the Board of Directors held on 3rd March 2006. It has laid down procedures to inform the Board Members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risks through means of a properly defined framework. The Company has also constituted Risk Management Committee as per point (6), above.
F) There were no material, financial and commercial transactions where senior management of the Company had personal interest that may have potential conflict with the interest of the Company at large.
G) The Company has adopted Whistle Blower Policy(Vigil Mechansim) for Directors and employees which has been placed in the website of the Company at the weblink, <http://www.dicindialtd.co/investers->wbp.html. No personnel has been denied access to the audit committee
13. Code of Professional Conduct
The Company has formulated a Code of Conduct for the employees, including the Directors with all the stakeholders of the Company and the same has been adopted by the Board in the meeting held on 29th April 2005. The Code covers dealings with customers and suppliers, shareholders, concern for occupational, health, safety and environment and gender friendly workplace.
Further, the Code of Conduct has been amended to include the Code for Independent Directors pursuant to the Schedule IV of the Companies Act, 2013 by the Board at its meeting held on 5th December 2014.The updated Code is also available on the Company's official website at the weblink, <http://www.dicindialtd.co/corp-gov->cid.html.
In terms of the resolution passed by the Board of Directors in their meeting held on 5th February 2016, the Board has authorized Mr. Shailendra Hari Singh, Managing Director and Chief Executive Officer to sign all Certificates as may be required, to comply with the statutory requirements.
Accordingly, a declaration from the Chief Executive Officer that all Board Members and Senior Management personnel have duly complied with the Code of Conduct for the financial year ended 31st December 2015 forms part of the Annual report.
14. CEO /CFO Certification
The Certificate duly signed by the Managing Director and Chief Executive Officer and the Chief Finance Officer in respect of the financial year ended 31st December 2015 has been placed before the Board at its meeting held on 5th February 2016 and forms a part of the Annual Report.
15. Familiarisation programme for Independent Directors
The Company has a structured Familiarisation programme through various reports/codes/policies and the same are placed before the Board with a view to update them on the Company's policies and procedures on a regular basis. This includes various business review presentations at the Board Meetings where Company's performance, strategy, initiatives, risk mitigation programmes are discussed.
The details of familiarization programme have been posted in the website of the Company under the weblink <http://www>. dicindialtd.co/corp-gov-cor-gov.html.
II. NON-MANDATORY REQUIREMENTS
1. Office of the Chairman of the Board and re-imbursement of expenses by the Company
The Chairman of the Company is a Non-executive Director and no reimbursement of his expenses is made by the Company.
2. Shareholders' Rights
The Company's financial results are published in the newspapers and also posted on its own website (www.dicindialtd.co). Hence, the Financial Results are not sent to the shareholders. However, the Company furnishes the financial results on receipt ofrequest from the shareholders.
3. Modified Opinion in Audit Report
The Company, at present, does not have any modification in the audit opinion.
4. Separate posts of Chairman and CEO
The Company has a separate post of Chairman, who is a Non-Executive Chairman and separate CEO.
5. Reporting of Internal Auditor
The Company's Internal Auditor has the access of reporting directly to the Audit Committee.
1. Annual General Meeting
The 68th Annual General Meeting will be held at 11 A.M. on 22nd April 2016 at Williamson Magor Hall, The Bengal Chamber of Commerce & Industry, Royal Exchange, 6, Netaji Subhas Road, Kolkata - 700 001.
2. Financial Year
The Financial Year of the Company is 1st January to 31st December. For the year ended on 31st December 2015, results were announced on
Approval of Board Meeting Date ^
Unaudited Results for 1st quarter ended 31.03.2015 21.04.2015
Unaudited Results for 2nd quarter ended 30.06.2015 27.07.2015
Unaudited Results for 3rd quarter ended 30.09.2015 14.10.2015
^ Audited Results for financial year ended 31.12.2015 05.02.2016 j
3. Book Closure Date
The period of book closure is from 16th April 2016 to 22nd April 2016, both days inclusive.
4. Dividend Payment Date
A dividend payment of Rs. 4/- per equity share of Rs. 10.00 each will be paid on 29th April 2016 subject to the approval of the members in the Annual General Meeting.
5. Listing on Stock Exchanges The equity shares of the Company are listed on :
1. BSE Limited (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001
2. National Stock Exchange of India Limited (NSE) Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051
3. The Calcutta Stock Exchange Limited (CSE)
7, Lyons Range, Kolkata - 700 001
6. Listing Fees to Stock Exchanges
The Annual Listing Fees for the year 2014-15 and 2015-16 have been paid to all these Stock Exchanges within the stipulated time.
7. Annual Custody Fees to Depositories
The Company has paid Annual Custody Fees for the year 2014-15 and 2015-16 to both the depositories namely National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) within the stipulated time.
8. International Securities Identification Number (ISIN) of the Company
The International Securities Identification Number (ISIN) of the Company's shares in the dematerialized mode, as allotted by NSDL and CDSL is INE 303A01010.
9. Scrip Code
The Company's Stock Exchange codes are as follows:
No. Stock Exchange Scrip Code
1 BSE Limited 500089
2 National Stock Exchange of India Limited DICIND
V 3 The Calcutta Stock Exchange Limited 13217
10. Commodity price Risk or Foreign Exchange Risk and Hedging Activities
The Board monitors the foreign exchange exposures on a quarterly basis and the steps taken by management to limit the risks of adverse exchange rate movement. Similarly, the management monitors commodities/raw materials whose prices are volatile and suitable steps are taken accordingly to minimize risk on the same
13. Registrar and Share Transfer Agent
Pursuant to the directive of The Securities and Exchange Board of India (SEBI), whereby all work related to share register in terms of both physical and electronic mode for maintenance had to be carried out at a single point, the Company has appointed M/s C B Management Services (P) Limited, Kolkata, from 1st April 2003 as its Registrar & Share Transfer Agent, to handle its entire share related activities, both for physical shares and shares in demat form.
M/s C B Management Services (P) Limited
P-22, Bondel Road, Kolkata - 700 019 Phone: 033-2280 6692-94/40116700 Facsimile: 033 2287 0263 E-mail: email@example.com Website: www.cbmsl.com
14. Investor Grievances
The Company has designated an exclusive e-mail id viz. firstname.lastname@example.org to enable the investors to register their grievances, if any.
15. Share Transfer System
For expeditious transfer of shares, the Board of Directors has authorised certain officers of the Company to approve share transfers before being placed before the Board for ratification.
Reconciliation of Share Capital Audit
As stipulated by SEBI, Mr Tarun Chatterjee of M/s T. Chatterjee and Associates, Practising Company Secretary carries out Audit to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges and to the Board of Directors. The audit confirms that the total listed and paid-up capital is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form.
Dematerialization of Shares and Liquidity
As per notification issued by SEBI, with effect from 26th June 2000, it has become mandatory to trade in the Company's shares in the electronic form. The Company's shares are available for trading in the depository systems ofboth the NSDL and CDSL.
As on 31st December 2015, 98.04% of the Company's total paid up capital representing 8,998,863 equity shares were held in dematerialised form and the balance 1.96% representing 180,114 equity shares were held in physical form.
Disclosure with respect to demat suspense account/unclaimed suspense account
As on 31st December 2015, there are no outstanding shares lying in the demat suspense account/unclaimed suspense account.
Address for correspondence with Depositories
National Securities Depository Limited Trade World, 4th & 5th Floor Kamala Mills Compound Senapati Bapat Marg, Lower ParelMumbai - 400 013Telephone No : 022-2499 4200 Facsimile Nos : 022-2497 2993/6351 E-mail : email@example.com Website : www.nsdl.co.in
Central Depository Services (India) Limited Phiroze Jeejeebhoy Towers, 17th Floor, Dalal Street Mumbai - 400 001Telephone No : 022-2272 3333 Facsimile Nos : 022-2272 3199/2072 E-mail : firstname.lastname@example.org Website : www.cdslindia.com
22. Outstanding GDR/Warrants and Convertible Bonds, Conversion Dates and likely impact on Equity
The Company had no outstanding GDRs/ADRs/Warrants or any Convertible instruments
25. Plant Locations
Kolkata Transport Depot Road, Kolkata - 700 088
Noida C - 55 A & B, Phase II, Dist. Gautam Budh Nagar, Noida - 201 305
Ahmedabad Plot No. 633 & 634, G.I.D.C. Industrial Estate, Phase IV, Vatva, Ahmedabad - 382 445
Bengaluru 66A, Bommasandra Industrial Area, Hosur Road, Anekal Taluk, Bengaluru - 562 158
26. Address for correspondence with the Compliance Officer / Investor Complaint Redressal Officer of the Company
Mr Banibrata DeSarkar
DIC INDIA LIMITED
Transport Depot Road, Kolkata - 700 088 Phone : 033 2449 6591 to 96 (6 lines), Facsimile : 033 2449 5267 E-mail : email@example.com Website : www.dicindialtd.co