25 Apr 2017 | Livemint.com

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Saraf Sons (Traders) Ltd. Accounting Policy

CORPORATE GOVERNANCE REPORT

(As required by Clause 49 of the Listing Agreement entered into with the Stock Exchanges).

The Directors present the Company's Report on Corporate Governance for the year ended March 31, 2015.

1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE

Dynacons firmly believes in adopting the 'best practices' that are followed in the area of Corporate Governance and has consistently endeavored to practice good Corporate Governance. The Company's philosophy on corporate governance is to conduct its business in a manner, which is ethical and transparent with all stakeholders in the Company, including shareholders, venders, creditors and employees.

The Company emphasizes the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. Dynacons believes that all its operations and actions must serve the underlying goal of long term value creation for its shareholders and its investors.

2. BOARD OF DIRECTORS

Dynacons Governance structure broadly comprises the Board of Directors and the Committees of the Board at the apex level and the Management structure at the operational level. This layered structure brings about a harmonious blend in governance as the Board sets the overall corporate objectives and gives direction and freedom to the Management to achieve these corporate objectives within a given framework, thereby bringing about an enabling environment for value creation through sustainable profitable growth.

Composition and category

The present strength of Board of Directors is SEVEN. The Board of Directors of your Company presently comprise of an Executive Chairman Cum Managing Director, two Non-Executive Directors and Four Independent Directors. The Independent Directors with their diverse knowledge, experience and expertise bring in their independent judgment in the deliberations and decisions of the Board.

The Independent Directors have made disclosures confirming that there are no material, financial and/or commercial transactions between Independent Directors and the Company which could have potential conflict of interest with the Company at large.

The Non-Executive Directors with their diverse knowledge, experience and expertise bring in their independent judgment in the deliberations and decisions of the Board.

Directors are provided with well structured and comprehensive agenda papers in advance. All material information is incorporated in the Agenda for facilitating meaningful and focused discussion in the meeting. Minutes of the Board Meetings/Committee Meetings are circulated to the Directors well in advance and confirmed at the subsequent meetings.

The Company has an Executive Chairman and the numbers of Independent Directors are more than half of the total number of Directors. The Company, therefore, meets with the requirements of Clause 49 (1) (A) of the Listing Agreement with the stock exchanges.

As required under Section 149(3) of the Companies Act, 2013, Mrs. Archana Phadke, a lady Director, has been appointed as an Independent Director on the Board.

The following table gives details of composition of the Board of Directors and also the number of other Board of Directors of which they are a member/Chairman are as under:

The Number of Directorships and the positions held on Board, Committees by the Directors are in conformity with the limits on the number of Directorships and Board committee positions as laid down in the Act and the Listing Agreement.

Nine Board Meetings were held during the year 2014-2015. The Board Meetings are held at the Registered Office of the Company.

The dates on which the Board Meetings were held are as follows:

May 29, 2014, August 8, 2014, August 13, 2014, September 03, 2014, October 1, 2014, November 11, 2014, February 13, 2015, February 23, 2015 and March 27, 2015.

Particulars of Director seeking appointment/re-appointment at the Annual General Meeting have been given in the annexure to the Notice.

3. AUDIT COMMITTEE

The Audit Committee acts as a link between the statutory and internal auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its oversight responsibilities of monitoring financial reporting processes, reviewing the Company's established systems and processes for internal financial controls, governance and reviewing the Company's statutory and internal audit activities.

The Committee is presently chaired by Mr. Jitesh Jain, Chartered Accountant having more than a decade of varied experience in the fields of Bank, Government and Corporate Audits, Project Preparation and Reporting, Management Consultancy and Finance and by qualification he is a B. Com., F. C. A., D.I.S.A. All the members of the Committee are Independent Directors having knowledge of Finance, Accounts and Company Law.

The Audit Committee met Six times during the financial year 2014-2015 on the following date:

May 29, 2014, August 13, 2014, September 3, 2014, November 10, 2014, February 13, 2015 and February 23, 2015.

The terms of reference of the Audit Committee includes:-

• Recommending the appointment and removal of statutory auditor, fixation of audit fee and also approval for payment for any other services.

• Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

• Reviewing with management the quarterly / annual financial statements before submission to the Board focusing primarily on the following:

¦ Any change in accounting policies and practices.

¦ Compliance with accounting standards.

¦ Major accounting entries based on exercise of judgement by management

¦ Matters required to be included in the Director's Responsibility Statement.

¦ Significant adjustment arising out of audit.

¦ Qualification in draft audit report.

• Reviewing the finding of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity of a failure of internal control systems of a material nature and reporting the matter to the Board.

• Discussion with statutory auditors before the audit commences, nature and scope of audit as well as have post audit discussion to ascertain any area of concern.

• Any related party transaction, i.e., transaction of the management, their subsidiaries or relatives, etc., that may have potential conflict with the interest of Company at large.

• Reviewing with the management, statutory and internal auditors, the adequacy of internal control systems.

• Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

• Discussion with internal auditors any significant findings and follow up thereon.

• Scrutiny of inter-corporate loans and investments.

• Valuation of undertakings or assets of the Company, wherever it is necessary.

• Evaluation of internal financial controls and risk management systems. Reviewing the Company's financial and risk management policies.

4. NOMINATION AND REMUNERATION COMMITTEE

In compliance with Section 178 of the Companies Act, 2013, the Board has renamed the existing "Remuneration Committee" as the "Nomination and Remuneration Committee".

Brief description of terms of reference

• To review the performance of the Chairman and Managing Director and the Directors after considering the company's performance and to review overall compensation policy, service agreements, performance incentive and other employment conditions of Executive Director(s).

• To approve the Annual Remuneration of the Directors and Employees of the Company.

The Nomination and Remuneration committee consists of Non-Executive Directors with the Chairman being an Independent Director. The members of Committee were Mr. Jitesh Jain, Mr. Viren Shah and Mr. Dilip Palicha. The committee is chaired by Mr. Viren Shah. The Nomination and Remuneration committee met once during the year.

Remuneration Policy

The Remuneration of the Executive Director is decided by the Remuneration Committee based on criteria such as industry benchmarks, the company's performance vis-a-vis the industry performance, track record of the Executive Directors.

Remuneration of employees largely consists of basic remuneration and performance incentives. The Company while deciding the remuneration package takes into consideration the employment scenario, remuneration package of the industry and the remuneration package of other Industries. The annual variable pay of Senior Managers is linked to the performance of the Company and their individual performance for the relevant year measured against specific Key Result Areas, which are aligned to the Company's objectives.

The Company has not issued any Stock options to the Directors. Except Ms. Archana Phadke, other Independent Directors of the Company have disclosed that they do not hold any Equity Shares of the Company. There has been no pecuniary relationship or transactions of the Non-Executive Directors vis-a-vis the Company during the year under review.

The Company has not issued any Stock options to the Directors. Except Ms. Archana Phadke, other Independent Directors of the Company have disclosed that they do not hold any Equity Shares of the Company. There has been no pecuniary relationship or transactions of the Non-Executive Directors vis-a-vis the Company during the year under review.

Functions

The Shareholders Relationship Committee is chaired by Mr. Dilip Palicha

The committee meets at frequent intervals, to approve inter-alia, transfer/ transmission of Equity shares, non-receipt of annual Report, attending to complaints of investors routed by SEBI/Stock Exchanges and reviews the status of investors' grievances and redressed mechanism and recommend measures to improve the level of investor services. Details of share transfer / transmission approved by the committee are placed at the Board meetings from time to time.

During the year under review, 0 query/complaint was received from shareholders/investors which were replied/resolved to the satisfaction of the investors. Of the above, the complaints/queries outstanding as on March 31, 2015 were Nil. The numbers of pending share transfers as on March 31, 2015 were Nil.

6. RISK MANAGEMENT COMMITTEE

Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities.

The Risk Management committee consists of Non-Executive Directors with the Chairman being an Independent Director. The members of Committee were Mr. Dilip Palicha, Mr. Viren Shah and Mr. Jitesh Jain. The committee is chaired by Mr. Viren Shah. The Risk Management committee met once during the year.

The objectives and scope of the Risk Management Committee broadly comprises:

• Oversight of risk management performed by the executive management;

• Reviewing risks and evaluate treatment including initiating mitigation actions and ownership as per a pre-defined cycle;

• Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.

Within its overall scope as aforesaid, the Committee shall review risks trends, exposure, potential impact analysis and mitigation plan.

7. INDEPENDENT DIRECTORS' MEETING

During the year under review, as required under Schedule IV to the Companies Act, 2013 and the provisions of Clause 49, the Independent Directors met on December 11, 2014, inter alia, to discuss:

• Evaluation of performance of Non Independent Directors and the Board of Directors as a whole;

• Evaluation of performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive 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.

8 . FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

The Independent directors of Dynacons Technologies Limited are eminent personalities having wide experience in the field of business, finance, education, industry, commerce and administration. Their presence on the Board has been advantageous and fruitful in taking business decisions.

Independent Directors are appointed as per policy of the Company, with management expertise and wide range of experience. The Directors appointed by the Board are given induction and orientation with respect to the Company's vision, strategic direction, core values, including ethics, corporate governance practices, financial matters and business operations by having one-to-one meetings. The new Board members are also requested to access the necessary documents / brochures, Annual Reports and internal policies available at our website www.dtlindia.com to enable them to familiarize with the Company's procedures and practices.

Periodic presentations are made by Senior Management, Statutory and Internal Auditors at the Board/Committee meetings on business and performance updates of the Company, global business environment, business risks and its mitigation strategy, impact of regulatory changes on strategy etc. Updates on relevant statutory changes encompassing important laws are regularly intimated to the Independent directors.

9. POLICY FOR REMUNERATION OF NON - EXECUTIVE DIRECTORS

The Non-Executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in the Board / Committee meetings and commission as detailed hereunder:

• A Non-Executive Director shall be entitled to receive sitting fees for each meeting of the Board or Committee of the Board attended by him, of such sum as may be approved by the Board of Directors within the overall limits prescribed under the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014;

• All the remuneration of the Non- Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197 (5) of the Companies Act, 2013) shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or shareholders, as the case may be.

• An Independent Director shall not be eligible to get Stock Options and also shall not be eligible to participate in any share based payment schemes of the Company.

• Any remuneration paid to Non- Executive / Independent Directors for services rendered  which are of professional in nature shall not be considered as part of the remuneration if the following conditions are satisfied:

I) The Services are rendered by such Director in his capacity as the professional; and

ii) In the opinion of the Committee, the director possesses the requisite qualification for the practice of that profession.

10. PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees, after taking into consideration various things like inputs received from the Directors, functions of Board's such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

Criteria for Performance Evaluation of Independent Directors includes :

1. Attendance and Participation.

2. Maintaining confidentiality.

3. Acting in good faith and in the interest of the company as a whole.

4. Exercising duties with due diligence and reasonable care.

5. Complying with legislations and regulations in letter and sprit.

6. Openness to ideas, perspectives and opinions and ability to challenge old practices and throwing up new ideas for discussion.

7. Capacity to effectively examine financial and other information on operations of the company and the ability to make positive contribution thereon.

11. REPORT ON CORPORATE GOVERNANCE

The quarterly compliance report has been submitted to the Stock Exchanges where the Companies equity shares are listed in the requisite format duly signed by the Compliance Officer.

12. GENERAL BODY MEETINGS

The last Three Annual General Meetings of the Company were held as under:-

• 5th AGM : September 30, 2014 at 3.30 P.M. at Karl Residency, 36, Lallubhai Park Road, Andheri (W), Mumbai-400058. Number of Special Resolutions passed: Nil

• 4th AGM : September 30, 2013 at 3.30 P.M. at Karl Residency, 36, Lallubhai Park Road, Andheri (W), Mumbai-400058. Number of Special Resolutions passed: 2

1. Investment by FII including their sub-accounts and NRI/POI for acquisition of shares of the Company.

2. Approval of Issue of shares through preferential basis as per Capital & disclosure requirement as per Section 81(1A) of the Companies Act, 1956

. 3rd AGM : September 28, 2012 at 3.30 P.M. at Karl Residency, 36, Lallubhai Park Road, Andheri (W), Mumbai-400058.

Number of Special Resolutions passed: Nil

Extra-ordinary General Meeting (EGM) of the Company was held on April 30, 2012 at 4.00 P.M. at 78, Ratnajyot Industrial Estate, Irla lane, Vile Parle (West), Mumbai - 400056 for Appointment of Shirish Anjaria as a Chairman cum Managing Director.

13. CODE OF CONDUCT

The Board of Directors has laid down Code of conduct for all Board Members and Senior Management of the Company. The copies of Code of Conduct as applicable to the Executive Directors (including Senior Management of the Company) and Non Executive Directors are uploaded on the website of the Company - www.dtlindia.com

14. VIGIL MECHANISM / WHISTLE BLOWER POLICY

In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.

Pursuant to Section 177 of the Companies Act, 2013, the Company has adopted Vigil Mechanism (Whistle Blower Policy) for the directors and employees of the company to deal with instances of fraud and mismanagement, if any and to ensure that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.

The mechanism provides for adequate safeguards against victimization of Directors and employees to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. This neither releases employees from their duty of confidentiality in the course of their work nor can it be used as a route for raising malicious or unfounded allegations about a personal situation.

15. DISCLOSURES

a) Materially significant related party transactions i.e. transactions of the company of material nature with its Promoters, the Directors or the Management, their subsidiaries or relatives etc. that may have potential conflict with the interest of the Company at large : None

b) Disclosure of Accounting Treatment

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historic cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

c) Board Disclosures - Risk Management

The Company has laid down procedures to inform the Board of Directors about the Risk Management and its minimization procedures. The Audit Committee and Board of Directors review these procedures periodically.

d) Proceeds from public issues, right issues, preferential issues etc.

During the year under review, the promoter and promoter group of Company entered in to Share Purchase Agreement (SPA) dated August 8, 2014 with Mr. Arun Govil.Mr. Govil gave an Offer to the equity shareholders of the Company (other than parties to the Share Purchase Agreement) to acquire 2,03,90,006 equity shares of the Company of face value of Re. 1 each representing in aggregate 26.00% of the paid up equity share capital and voting capital of the Target Company at a price of Rs. 1.30/- (Rupee one and Thirty Paisa only) per fully paid up equity share. The open offer was open from February 26, 2015 to March 12, 2015. Details are available on SEBI website: www.sebi.gov.in .

e) Management Discussion and Analysis Report

The Management Discussion and Analysis Report have been provided in the Directors' Report to the Shareholders.

f) Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets, during the last three years: NIL

g) A qualified Practicing Company Secretary carried out a reconciliation of Share capital Audit, the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd (CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.

h) The Company has laid down procedures to inform the Board of Directors about the Risk Management and its minimization procedures. The Audit Committee and the Board of Directors reviewed these procedures periodically as per guidelines of SEBI / Stock Exchange.

i) The Company has established a mechanism called "Whistle Blower Policy" for employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy.

j) Shareholders

(i) The Company has sent Annual Report through email to those Shareholders who have registered their email ids with Depositary Participant.

(ii) Mr. Parag Dalal is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment.

(iii) Ms. Archana Phadke was appointed as an Additional Director and being eligible, she has given the consent to continue as director of the Company. She is being regularized in the ensuing Annual General Meeting of the Company. Her brief profile is published in the Annual Report.

16. CEO Certification

The Managing Director & CEO of the Company give quarterly/annual certification on financial reporting and internal controls to the Board in terms of Clause 41 and 49 II((E)(2) of the Listing Agreement.

17. COMPLIANCE ON CORPORATE GOVERNANCE

The quarterly compliance report has been submitted to the Stock Exchanges where the Company's equity shares are listed in the requisite format duly signed by the Compliance Officer. Pursuant to Clause 49 of the Listing Agreement, the Auditor's Certificate in compliance on conditions of Corporate Governance is published in the Annual Report.

18. MEANS OF COMMUNICATION

The quarterly, half-yearly and yearly financial results of the Company are sent to the Stock Exchanges immediately after they are approved by the Board. These are widely published in Leading newspapers and local language newspapers. After adoptions by the Board of Directors in their Board Meeting the financial results,official news releases are posted on the company's website: www.dtlindia.com.The Management Discussion and Analysis Report is a part of the Annual Report for the year.

19. GENERAL SHAREHOLDER INFORMATION

19.1 Annual General Meeting :-

Date and Time

September 30, 2015 at 4:30 P.M.

Venue

Hotel Karl Residency, 36, Lallubhai Park Road, Andheri (West), Mumbai - 400058

19.2 Financial Calendar: -(Tentative)

April'15 - March'16

Financial Reporting for quarter ending:

- June 30 Second week of August

- September 30 Second week of November

- December 31 Second week of February

- March 31 Second week of May

- Annual Results End of May

19.3 Book Closure Date

24th September, 2015 to 30th September, 2015. (Both days inclusive)

19.4 Dividend Payment Date

N.A.

19.5 (a) Listing of Equity Shares on Stock Exchanges at:

Name Code Nos.

The Bombay Stock Exchange Ltd., Mumbai :534674

The National Stock Exchange of India Ltd. :DYNATECH

(b) Listing of Global Depository Receipts :N.A.

(c) Demat ISIN numbers in NSDL & CDSL: INE741L01018

(d) Annual listing fees for the year 2015-2016 have been duly paid to all the above Stock Exchanges

19.6 Registrar and transfer Agents: Bigshare Services Pvt. Ltd.

S EBI Regn. No. INR 00001385

E -2, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (E), Mumbai- 400 072

Tel : 022-40430365/4 Fa x: 022-28475207

19.7 Share Transfer System :

The Company's shares shall be traded on the Stock Exchanges compulsorily in Demat mode. Shares in physical mode which are lodged for transfer at Share Transfer Agent are processed and subject to exercise of option under compulsory transfer-cum-demat procedures. Share Certificates are either dematted or returned within the time prescribed by the authorities.

19.8 Compliance Officer :

Dharmesh S. Anjaria

19.9 Address for Investor Correspondence :

Bigshare Services Pvt. Ltd.

SEBI Regn. No. INR 00001385

E-2, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (E), Mumbai- 400 072 Tel : 28470652/3 Fax: 28475207

Dynacons Technologies Ltd.

CIN : L72900MH2009PLC191412

78, Ratnajyot Ind. Estate, Irla Lane, Vile Parle (west), Mumbai - 400 056 Email: investor@dtlindia.com Cont No. 022-66889900

19.10 Corporate Ethics:

The consistent endeavor of Dynacons Technologies Ltd. is to enhance the reputation of the Company and irrespective of the goals to be achieved, the means are as important as the end. The Company has adopted "the Code of Conduct for prevention of Insider Trading", which contains policies prohibiting insider trading. As per SEBI / Stock Exchanges Guidelines, the Company has also promulgated Code of Conduct to be followed by Directors and Management.