REPORT ON CORPORATE GOVERNANCE
The detailed report on Corporate Governance as per the format prescribed by SEBI and incorporated in clause 49 of the Listing Agreement is set out below:
Company's philosophy on code of governance:
The Company believes in adopting the best Corporate Governance practices. The Company further believes that the shareholders have the right to know complete information on the Board of Directors and the Management, their interest in the Organization as well as governance practices followed by them.
I. BOARD OF DIRECTORS
• Composition and provisions as to Board and Committees
The Board should have an optimum combination of executive and non-executive directors with at least one woman director and not less than 50% of the Board comprising non-executive directors. Further, at least one-third of the Board should comprise of independent directors if the Chairman is non-executive and at least half of the Board should be independent in case of an executive Chairman. Further in case of non-executive Chairman is a promoter of the Company or related to any promoter, half of the Board of the Company shall consist of independent directors. Also a Director shall not be a member in more than 10 committees or act as Chairman of more than 5 committees across all Companies in which he is a director.
Your Company's existing Board comprises of 6 (Six) Directors. Of these, 2 (two) are Independent Directors and 1(one) is Executive Director. The Chairman is an Independent Director. Effective from 26th March, 2015, Ms. Meike Albrecht was appointed as a Woman Non-Executive Director on the Board of the Company.
• Other provisions of the Board and Committees
The Board shall meet at least four times a year, with a maximum time gap of four months between any two meetings. The minimum information to be made available to the Board should be as prescribed in Annexure IA of Clause 49 of the Listing Agreement.
Your Company's Board plays an important role in ensuing good governance and functioning of the Company. The Board consists of professionals from diverse fields and has vast experience in their respective areas. The Board's role, functions, responsibility are clearly defined. Members of the Board have complete freedom to express their views on agenda items and can discuss any matter at the meeting with the permission of the Chairman. The Board guides the management in achieving its goal and creating value for all stakeholders.
• Code of Conduct
In compliance with the provisions of Clause 49 of the Listing Agreement, the Board of Directors of your Company have laid down a Code of Conduct applicable to all Board Members and Senior Management personnel of your Company. All Board members and Senior Management Personnel affirm compliance with the Code on annual basis. A declaration from Whole-time Director/C.E.O. of your Company to the effect that all Board Members and Senior Management personnel of your Company have affirmed compliance with the Code of Conduct forms a part of this report. The Code of Conduct has been posted on the website of your Company -www.digvijaycement.com
II. AUDIT COMMITTEE
A qualified and independent Audit Committee shall be set up and should meet at least four times in a year. The Audit Committee shall have minimum three directors as member, with two-thirds of its members being independent directors. All members of the Audit Committee shall be financially literate and at least one member shall have accounting or related financial management expertise. The Chairman of the Audit Committee shall be an independent director and shall be present at Annual General Meeting to answer shareholder queries. The Company Secretary shall act as secretary to the Committee.
Your Company has an Audit Committee at the Board level which acts as a link between the Management, the Statutory and Internal Auditors and the Board of Directors and overseas the financial reporting process. The Audit Committee has three Members, of these two are Independent Directors and one is Non-Executive Director. All the Members of the Audit Committee are financially literate. Mr. A. K. Chhatwani is the Chairman of the Committee and was present at last Annual General Meeting of the Company. During the Period, the Audit Committee met four times to deliberate on various matters. The meetings were held on 27th February, 2014, 23rd April, 2014, 12th August, 2014 and 12th November, 2014. The details of attendance are as follows:
1. The Whole Time Director and Finance Head are permanent invitees to the Audit Committee. The Statutory, Internal as well as the Cost Auditors of your Company are also invited to the Audit Committee Meetings.
2. Mr. S. N. Malpani, Company Secretary, acts as the Secretary to the Committee.
The Audit Committee has the following powers:
a. To investigate any activity within its terms of reference,
b. To seek information from any employee,
c. To obtain outside legal or other professional advice,
d. To secure attendance of outsiders with relevant expertise, if it considers necessary.
Role of the Audit Committee includes following:
a. 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.
b. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of statutory auditor and the fixation of audit fee and also approval for payment for any other services,
c. Reviewing with Management, the annual financial statements before submission to the Board for approval, with particular reference to;
• Matters required to be included in the Directors' responsibility statement to be included in the Boards' report in terms of clause (2AA) of Section 217 of the Companies Act, 1956
• Changes, if any, in accounting policies and practices and reasons for the same,
• Major accounting entries involving estimates based on exercise of judgment by Management,
• Significant adjustments made in the financial statements arising out of audit findings,
• Compliance with listing and other legal requirements relating to financial statements
• Disclosure of any related party transactions
• Qualification in the draft audit report.
d. Reviewing with the Management, the quarterly financial statements before submission to the Board for approval.
e. Reviewing with the Management, performance of statutory and internal Auditors, adequacy of internal control systems.
f. Reviewing the adequacy of internal audit function, if any, 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,
g. Discussion with internal Auditors any significant findings and follow up there on.
h. Reviewing the findings of any internal investigations by the internal Auditors into matters where there is a suspected fraud or irregularity or a failure of internal control systems of a materials nature and reporting the matter to the Board,
i. Discussion with statutory Auditors before the audit commences, about the nature and scope of audit as well as have post-audit discussion to ascertain any area of concern,
j. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, share holders (in case of non-payment of declared dividends) as creditors.
k. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Audit Committee reviews the following information:
a. Management discussion and analysis on financial condition and results of operations;
b. Statement of significant related party transactions (as defined by the audit committee), submitted by Management;
c. Management letters / letters of internal control weaknesses issued by the statutory Auditors, if any;
d. Internal audit reports relating to internal control weaknesses; and
e. The appointment, removal and terms of remuneration of the Chief internal Auditor
III. Corporate Social Responsibility Committee (CSR):
In terms of the provisions of Section 135 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors at their meeting held on 23rd April, 2014 has constituted a Corporate Social Responsibility (CSR) Committee of the Board.
The CSR Committee comprises Mr. A.K. Chhatwani as the Chairman and Mr. A. Kumaresan and Mr. Chain Singh Jasol as the Members of the Committee. The Committee has met once on 15th October 2014 and all the Members were present at the said meeting.
IV. Appointment & Remuneration of Directors
• Nomination and Remuneration Committee :
In compliance with Section 178 of the Companies Act 2013, the Board of Directors at their meeting held on 25th February, 2015 has renamed the existing "Remuneration Committee of Directors" as the "Nomination and Remuneration Committee".
The Nomination and Remuneration Committee at present comprises Mr. A. Kumaresan as the Chairman, and Mr. A. K. Chhatwani and Ms. Meike Albrecht (Mr. Carlos Boggio till 26th March, 2015) as the Members of the Committee.
The Committee has met twice during the year i.e. on 27th February, 2014 and 23rd April, 2014. Other than Mr. Carlos Boggio, all other members of the Committee were present in the said meetings.
• Appointment & Remuneration of Executive / Whole-time Director
The appointment and remuneration of Whole-time Director(s) including any revisions in their term are made by the Board of Directors for a fixed term on recommendation of Nomination and Remuneration Committee, which are subject to approval of shareholders.
• Non-Executive Directors' Remuneration
All fees/compensation (except sitting fees) paid to non-executive directors, including independent directors, shall be fixed by the Board of Directors on recommendation of the Nomination and Remuneration Committee of the Board and shall require shareholders' approval.
During the year, Independent Directors were paid sitting fee of Rs. 75,000 (w.e.f. 23rd April 2014) and Rs. 15,000 before that date for attending each meeting of the Board or other Committees viz, Audit Committee of Directors and Nomination and Remuneration Committee of Directors. For all other committees, Rs. 15,000 each were paid to Independent Directors.
Apart from sitting fees for attending Board/ Committee Meetings, no other fees/ compensation is paid to the Directors nor have any significant material transactions been made with the non-executive Directors vis-avis the Company. Your Company does not have any stock option scheme for its Directors and employees.
The Non-Executive Directors, other than Independent Directors are not accepting any sitting fee for attending Board/Committee meetings.
(A) Basis of related party transactions
A statement in summary form of transactions with related parties in the ordinary course of business, details of material individual transactions with related parties that are not in the normal course of business and details of material individual transactions with related parties that are not on an arm's length basis is required to be placed before the Audit Committee.
Your Company places all the aforesaid details before the Audit Committee.
Particulars of related party transactions are listed out in 33b. However, all these transactions are on normal commercial arm's length basis.
As required under the Listing Agreement, the Board of Directors has at their meeting held on 17th January, 2015 has formulated a policy on materiality of related party transactions and also on dealing with Related Party Transactions.
(B) Disclosure of Accounting treatment
Your Company has followed all relevant Accounting Standards while preparing the financial statements.
(C) Risk Management
The Company shall lay down procedures to inform Board members about the risk assessment and minimization procedures. These procedures shall be reviewed to ensure that executive management controls risk through means of properly defined framework.
Your Company is aware of the risks associated with the business. It regularly analysis the risks and takes corrective actions for managing/ mitigating the same. Your Company has developed risk management policy.
(D) Proceeds from public issues, rights issues, preferential issues etc.
If any capital is raised through an issue, the Company needs to disclose to the Audit Committee, the uses/applications of funds on a quarterly basis. Further, on an annual basis, the Company shall prepare a statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and place it before the Audit Committee. This statement shall be certified by the Statutory Auditors of the Company.
The Company did not raise any capital during the year under report.
• As part of the Directors' Report or as an additional thereto, a Management Discussion and Analysis Report should form part of the Annual Report to the shareholders.
The Management Discussion and Analysis Report forms part of Annual Report and in accordance with the requirements laid out in Clause 49 of the Listing Agreement.
• Senior management shall make disclosures to the Board relating to all material financial and commercial transactions, where they have personal interest that may have a potential conflict with the interest of the Company at large (for e.g. dealing in company shares, commercial dealings with bodies, which have shareholding of management and their relatives etc.)
No material transactions has been entered in to by your Company with the Promoters, Directors or the Management, their subsidiaries or relatives etc., that may have a potential conflict with interest of your Company.
• In case of the appointment of a new director or re-appointment of a director the shareholders must be provided with the details of Directors.
Details of Directors seeking appointment / re-appointment at the ensuing AGM are provided in the Notice convening the AGM.
• Quarterly results and presentations made by the Company to analysts shall be put on Company's website, or shall be sent in such a form so as to enable the stock exchange on which the Company is listed to put it on its own website.
Financial results are made available on the website of your Company - www.digvijaycement . com
• Stakeholders Relationship Committee
Stakeholders Relationship Committee under the Chairmanship of a non-executive director shall be formed to specifically look in to the redressal of shareholder and investors complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc. To expedite the process of share transfers, the Board of the Company shall delegate the power of share transfer to an officer or a committee or to the registrar and share transfer agents. The delegated authority shall attend to share transfer formalities at least once in fortnight.
Your Company has a "Stakeholders Relationship Committee" at the Board level, under the Chairmanship of a non-executive director. The Committee looks into issues relating to share holders, including transfer/transmission of shares, issue of duplicate share/debenture certificates, non receipt of Annual Report, shares after transfer and delays in transfer of shares. The Committee met twice on 27th February 2014 and 12th November 2014 to review the status of investor grievances, dematerialization / rematerialization of shares as well as systems and procedures followed to track investor complaints and suggest measures for improvement from time to time.
The Company's shares are compulsorily traded and delivered in the dematerialized form. The equity shares of the Company have been admitted with National Securities Depository Limited and Central Depository Services (India) Limited, bearing ISIN No. INE232A01011.
To expedite the transfer in the physical segment, necessary authority has been delegated by your Board to Officers of the Company, to approve issue of share certificates, approve transfer/ transmission of shares, consolidation, subdivision, split of share certificates etc. Details of transfer/transmission of shares approved by the officers are placed before the Board.
Details of complaints received, number of shares transferred during the year, time taken for affecting these transfers and the number of share transfer pending are furnished in the "Shareholder Information" section of this Annual Report.
Details of non-compliance by the Company, penalties, and strictures imposed on the Company by stock exchange or SEBI or any other statutory authority, on any matter relating to capital market during the year.
There has been no instance of non-compliance by the Company on any matter related to capital markets during the year under review and hence no strictures/penalties have been imposed on the Company by the SEBI or any statutory authority.
(G) Whistle Blower Policy:
The Company believes in the conduct of its affairs in a fair and transparent manner to foster professionalism, honesty, integrity and ethical behaviours in all its business activities and has put in place a mechanism of reporting illegal or unethical behaviour. The Company has adopted a whistle blower policy through which the employees, Directors and other stakeholders are free to report to Senior Management any unethical behaviour, improper practices and wrongful conduct taking place in the Company for taking appropriate action. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice.
(H) Mandatory & Non-Mandatory Clauses:
The Company has complied with all mandatory requirements laid down by clause 49. The non-mandatory requirements complied with has been disclosed at the relevant places.
VI. CEO/CFO CERTIFICATION
Mr. Chain Singh Jasol -Whole Time Director and Mr. S.N. Malpani - Interim CFO & Company Secretary have certified to the Board that:
1. They have reviewed the balance sheet and profit and loss account and all its schedules and notes to accounts, as well as the cash flow statement;
2. Based on their knowledge, information and belief, these statements do not contain any untrue statement of a material fact or omit to state material fact that might be misleading with respect to the statements made;
3. Based on their knowledge, information and belief, the financial statements and other financial information included in this Report present a true and fair view of the Company's affairs for the period presented in this Report and are in compliance with the existing accounting standards, applicable laws and regulations;
4. To the best of their knowledge, information and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the Company's Code of Conduct;
5. They are responsible for establishing and maintaining internal controls for financial reporting and have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting;
6. They have disclosed, based on their most recent evaluation, wherever applicable, to the Company's Auditors and Audit Committee of the Company's Board of Directors all significant deficiencies in the design or operation of internal controls, if any, of which they are aware and the steps taken or proposed to be taken to rectify the deficiencies;
They have indicated to the Auditors and the Audit Committee:
a) Significant changes in the Company's internal control over financial reporting during the year;
b) All significant changes in the accounting policies during the year, if any, and the same have been disclosed in the notes to the financial statements;
c) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control system over financial reporting.
VII. MEANS OF COMMUNICATION
a. Which news papers normally published in
- Business Standard - All India Edition
- Jansatta - Gujarati
b. Any website, where displayed
- www.digvijaycement.com <http://www.digvijaycement.com>
c. Whether MD&A is part of Annual Report
d. Whether Shareholder Information Section Form part of the Annual Report
SHARE HOLDER INFORMATION
1. Annual General Meeting
Date & Time : 20th May, 2015 at 9.00 A.M.
Venue : Digvijaygram-361 140, .Via. Jamnagar (Gujarat)
2. Financial Calender
Financial reporting and Limited Review for the quarter ending 31st March, 2015 - upto 15th May, 2015.
Financial reporting and Limited Review for the quarter ending 30th June, 2015 - upto 14th August, 2015.
Financial reporting and Limited Review for the quarter ending 30th September, 2015 - upto 15th November, 2015.
Financial reporting for the Year ending 31st December, 2015 - by end of February 2016.
Annual General Meeting for the year ending 31st December, 2015 - by end of June 2016.
3. Dates of Book Closure
12th May, 2015 to 20th May, 2015 (both days inclusive)
4. Registered Office & Works
Digvijaygram - 361 140, Via. Jamnagar (Gujarat) Telephone: (0288) 2344272-2344275 Fax No. (0288) 2344092 & 2344214 Website: www.digvijaycement.com
5. Listing on Stock Exchanges & Stock Code No.
P. J .Towers, Dalal Street, Mumbai - 400 001 (Stock Code - 502180).
Note: The annual listing fee has been paid to BSE Limited.
6. Stock Price Data
Price on BSE Limited.
7. Registrars and Share Transfer Agents
Link Intime India Pvt. Ltd.
(Unit : Shree Digvijay Cement Co.Ltd.)
C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai 400 078
Tel No. (022) 2596 3838 Fax No. (022) 2594 6969 E.mail: firstname.lastname@example.org
8. Investors Correspondence
A) For shares held in Physical Form Link Intime India Pvt. Ltd.
(Unit :Shree Digvijay Cement Co.Ltd.) C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai 400 078
Tel No.(022) 2596 3838 Fax No.(022) 2594 6969 Email: email@example.com
B) For shares held in Demat Form To the respective DP
C) For General Correspondence
The Company Secretary,
SHREE DIGVIJAY CEMENT CO. LTD. Digvijaygram - 361 140, Via. Jamnagar (Gujarat)
Telephone: (0288) 2344272 2344275 Fax No. (0288) 2344092 & 2344214 Email: firstname.lastname@example.org
9. Share Transfer System
The Share Transfers and Shareholders Grievance Committee meets every fortnight. Share Transfer in physical form are re-registered or returned within a period of 15 days from the date of receipt in case documents are completed in all respects.
11. Dematerialisation of Shares & Liquidity
The shares of the Company are in compulsory demat segment, and are available for demat both with the NSDL & CDSL. International Securities Identification Number (ISIN) allotted to the equity shares of the Company is INE232A01011.
As on 31st December, 2014, 140431579 Equity Shares of the Company representing 99.33% are in dematerialised form.
12. Registered Office & Works
Shree Digvijay Cement Co.Ltd.
Digvijaygram - 361 140, Via. Jamnagar (Gujarat)
Telephone: (0288) 2344272-2344275 Fax No. (0288) 2344092 & 2344214
14. Nomination facility
Shareholders are eligible to file their nominations against shareholding for smooth transmission process. Nomination forms are available at the Investors Service Division. Those interested in getting the facility of information may write to the Company Secretary for a copy of the prescribed Nomination Form.