Shree Digvijay Cement Co. Ltd.
|BSE: 502180||Sector: Industrials|
|NSE: SHREDIGCEM||ISIN Code: INE232A01011|
|BSE 10:12 | 07 Jul||61.25||
|NSE 09:59 | 07 Jul||60.90||
|Mkt Cap.(Rs cr)||882|
|Mkt Cap.(Rs cr)||882.18|
Shree Digvijay Cement Co. Ltd. (SHREDIGCEM) - Director Report
Company director report
Your Board of Directors has immense pleasure in presenting 77thAnnual Report on business and operation of Shree Digvijay Cement Company Limited("Company") along with audited standalone & consolidated financialstatements for the year ended 31st March 2022.
The financial highlights for the year under report are as under:
Amount (Rs. Lakhs)
OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE:
Company's total income for the year stood at record Rs. 63332.95lakhs 24.39% higher over the previous year driven by comparative higher sales volume.
Profit before tax for the year was Rs.8820.46 lakhs as compared toRs.8293.89 lakhs in previous year. Profit after tax for the year was Rs.5529.09 lakhs ascompared to Rs. 5399.17 lakhs in the previous year.
The growth was recorded mainly due to higher market realization rawmaterial cost optimization and sustainable plant operations.
PRODUCTION AND SALES:
Amount (Rs. Lakhs)
During the year under review Cement production was close to 12 lakhsMT as against 10.28 lakhs MT in previous year. Clinker production was 9.58 lakhs MT asagainst 8.72 lakhs MT in previous year. Company achieved ever high Cement sale of 12.02lakhs MT as against 10.38 lakhs MT in previous year.
There has not been any change in the nature of the business of theCompany.
In view of encouraging performance and on account of healthy retainedearnings and cash position and the confidence of sustaining its performance going forwardduring the year the Board declared an Interim Dividend of Rs.1.50 (i.e. @15%) per equityshare on 143759778 equity shares of Rs. 10/- each aggregating to Rs. 2156.40 lakhs.
The Board of Directors is now pleased to recommend a Final Dividend ofRs.2.00 (i.e. @20%) per equity share on 144027778 equity shares of Rs. 10/- each forthe year ended 31st March 2022 aggregating to Rs. 2880.56 lakhs payable tothose Shareholders whose names appear in the Register of Members as on Record Date.
Thus the aggregate dividend for the year 2021-22 is Rs.3.50 (i.e.@35%) per equity share of Rs. 10/- each with a total pay- out of Rs.5036.96 lakhs andpay-out ratio of 91%.
In terms of the provisions of Regulation 43A of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 as amended ('the ListingRegulations') the Company has formulated a Dividend Distribution Policy("Policy"). The Dividend recommendation is in accordance with the Policy of theCompany. The Policy is available on the Company's website and can be accessed athttps://www.diqviiaycement.com/wp-content/uploads/2021/ 12/Dividend-Distribution-Policy.pdf
TRANSFER TO RESERVES:
During the year under review the Company has transferred Rs. 1000lakhs to the General Reserves.
During the year the paid-up Equity Share Capital of the Companyincreased from Rs. 1422922760/- (142292276 Equity Shares of Rs. 10/- each) to Rs.1440277780/- (144027778 Equity Shares of Rs 10/- each). Increase in share capitalwas on account of issue and allotment of fresh 1 735502 equity shares of face value ofRs. 10/ each arising out exercise of equivalent no. of stock options by eligibleemployees of the Company under "SDCCL Employee Stock Option Plan 2019"("ESOP Plan").
The Company has neither issued shares with differential rights as todividend voting or otherwise nor issued shares to the Employees or Directors of theCompany other than under ESOP Plan.
No disclosures is required under Section 67(3)(C) of the Companies Act2013 ('Act") in respect of voting rights not exercised directly by the employees ofthe Company as the provisions of the said Section are not applicable.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:
As of 31st March 2022 the Company has a Wholly OwnedSubsidiary ("Subsidiary") company viz. SDCCL Logistics Limited (CIN No.U63000GJ2020PLC115066). The Subsidiary company has not started its operation during theyear.
However above Subsidiary is not a material subsidiary company as perthe thresholds of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 as amended from time to time ("Listing Regulations").
The Policy for determining Material Subsidiaries adopted by the Boardpursuant to Regulation 16 of the Listing Regulations can be accessed on the Company'swebsite at https://www.digviiaycement.com/policies/.
During the year the Company has invested Rs. 500000/- by subscribingto Rights Issue of Subsidiary. Other than this there is no significant transaction orarrangements entered into by the Company with Subsidiary.
CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements of the Company and its Subsidiaryfor the Financial Year 2021-22 are prepared in compliance with the Section 129(3) readwith Schedule III of the Act and Rules made thereunder including Indian AccountingStandards specified under Section 133 of the Act. The audited consolidated FinancialStatements together with the Auditors' Report thereon forms part of the Annual Report.
Pursuant to Section 129(3) of the Act read with the rules made thereunder a statement containing salient features of the Financial Statements of theSubsidiary is disclosed in Form AOC - 1 in this Annual Report.
The Financial Statements of the Subsidiary company is available forinspection by the Members at the Registered Office of the Company pursuant to theprovisions of Section 136 of the Act. The Company shall provide free of cost a copy ofthe Financial Statements of its Subsidiary company to the Members upon their request. Thestatements are also available on the website of the Company and can be accessed atwww.digviiaycement.com under the 'Investors' section.
Cash and cash equivalent as on 31st March2022 was Rs.1285.29 lakhs (excluding Fixed Deposits of Rs. 7992.15 lakhs for a term exceeding 3months) vis-a-vis Rs. 5141.13 lakhs in the previous year (excluding fixed deposits ofRs.7239.71 lakhs).
Total cash and bank balance as on 31st March 2022 was Rs.9277.44 lakhs vis-a-vis Rs. 12380.84 lakhs in the previous year.
The Company's working capital management is robust and involves awell-organized process which facilitates continuous monitoring and control overreceivables inventories and other parameters.
Your Company has neither accepted any deposits during the year underreport nor did any deposits remain unpaid or unclaimed at the end of the year.
LOANS GUARANTEES AND INVESTMENTS :
Your Company has neither given any loan or guarantee nor has made anyinvestment except investment in its Subsidiary as appearing under Note no. 5 of thisreport during the year under report attracting the provisions of Section 186 of the Act.
Apart from the above the Company has executed a Share Purchase &Shareholders' Agreement with Trinethra Renewable Energy Private Limited (name beingchanged to CGE Shree Digvijay Cement Green Energy Pvt. Ltd.) ("Power Producer")and Continuum Green Energy (India) Private Limited ("Promoter") for agreeing tomake an investment of about Rs. 800 Lakhs constituting 27% of paid-up share capital ofPower Producer for a contracted capacity of 8.10 MW hybrid wind and solar power.
NUMBER OF MEETINGS :
Meetings of Board and its Committees are held as per statutoryrequirements and as per business needs. A calendar of meetings is circulated in advance tothe Directors to enable them to plan their schedule for effective participation in themeetings. Due to business exigencies the Board and Committees have also been approvingseveral proposals by circulation from time to time.
During the year four Board Meetings were convened and held on 28thApril 2021 29th July 2021 27th October 2021 and 27thJanuary 2022 the details of which are given in the Corporate Governance Report. Theintervening gap between the meetings was within the period prescribed under the ActSecretarial Standards - 1 (SS-1) issued by the Institute of Company Secretaries of Indiaand Listing Regulations.
The Company has the following six (6) Board-level Committees whichhave been established in compliance with the relevant provisions of applicable laws and asper business requirements:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Risk Management Committee
4. Stakeholders' Relationship Committee
5. Corporate Social Responsibility (CSR) Committee
6. Committee of Directors for routine matters
The Audit Committee comprises of three members with majority ofIndependent Directors. The Chairman of the Committee is an Independent Director. TheCommittee met four times during the year.
Nomination and Remuneration Committee
The Company has a Nomination and Remuneration Committee comprising ofthree members all members of which are Non- Executive Directors and two-third members areIndependent Directors. The Committee met twice during the year.
Risk Management Committee
The Risk Management Committee comprises of three members with majorityof Independent Directors. The Chairman of the Committee is an Independent Director. TheCommittee met twice during the year.
Stakeholders' Relationship Committee
Stakeholders' Relationship Committee of Directors comprises of threemembers with majority of Non-Executive Directors. The Chairman of the Committee is anIndependent Director. The Committee met once during the year.
Corporate Social Responsibility (CSR) Committee
The CSR Committee comprises of four members of which one isIndependent Director. The Committee met once during the reporting period.
More details about all the Committees of the Board including detailsof the role and responsibilities of Committees the particulars of meetings held andattendance of the Members at such meetings are stated in the Corporate Governance Reportwhich forms part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT :
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the following statementin terms of Section 134 of the Act:
(a) in preparation of Annual Accounts for the financial year ended 31stMarch 2022 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;
(b) that such accounting policies as mentioned in the Notes to theAccounts have been selected and applied consistently and judgment and estimates have beenmade that are reasonable and prudent so as to give a true and fair view of the state ofaffairs of the Company as at 31st March 2022 and the profit of the Company forthe year ended on that date;
(c) that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) that the annual accounts have been prepared on a going concernbasis;
(e) that proper internal financial controls laid down by the Directorswere followed by the Company and such internal financial controls are adequate and wereoperating effectively; and
(f) that proper systems to ensure compliance with the provisions of allapplicable laws have been devised and such systems were adequate and were operatingeffectively.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION :
The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy inter alia for nomination and appointment(including remuneration) of Directors senior management and key managerial personnel ofthe Company. The details of Nomination and Remuneration Policy is stated in the CorporateGovernance Report and uploaded on website of the Company athttps://www.digviiaycement.com/policies/.
The Board of Directors of the Company follows the criteria fordetermining qualification positive attributes independence of Directors as perNomination and Remuneration Policy and the Board Diversity Policy and other applicablepolicies of the Company.
Directors are appointed /re-appointed with the approval of the Membersfor a term in accordance with the provisions of the law and the Articles of Association ofthe Company. The initial appointment of CEO and Managing Director is generally for aperiod of three years. All Directors other than Independent Directors are liable toretire by rotation unless otherwise specifically provided under the Articles ofAssociation or under any statute or terms of appointment. One third of
the Directors who are liable to retire by rotation retire at everyannual general Meeting and are eligible for re-appointment.
Further details on election process appointment of Directors and thedetails of remuneration paid to Directors and Managerial Personnel forms part of theCorporate Governance Report.
CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES:
Details of contracts/arrangement with the Related Parties are appearingunder Note no. 35b and form part of this report. All related party transactions that wereentered into during the year under report were on arm's length basis and were in theordinary course of business. There were no materially significant related partytransactions which could have potential conflict with interest of the Company at large.
Related Party Transactions are placed before the Audit Committee asalso before the Board wherever required for their approval. The Policy on Related PartyTransactions as approved by the Board is uploaded on the Company's website. The Company'smanagement ensures total adherence to the approved Policy on Related Party Transactions toestablish Arm's Length Basis without any compromise. Pursuant to the provisions of Section188(1) of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 particulars ofmaterial contracts and arrangements entered between the Company and the Related Partiesare annexed herewith as Form AOC-2 in Annexure A.
MATERIAL CHANGES AND COMMITMENTS :
The Company has executed a Share Purchase & Shareholders' Agreementwith Trinethra Renewable Energy Private Limited (name being changed to CGE Shree DigvijayCement Green Energy Pvt. Ltd.) ("Power Producer") and Continuum Green Energy(India) Private Limited ("Promoter") agreeing to make investment of about Rs.800 Lakhs constituting 27% of paid- up share capital of Power Producer for a contractedcapacity of 8.10 MW hybrid wind and solar power.
Except above there have not been any material changes and commitmentsin terms of Section 134(3)(l) of the Act affecting the financial position of the Companybetween the end of the financial year of the Company as on 31st March 2022 andthe date of this report i.e. 27th April 2022.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNING AND OUTGO:
Due to second wave of Covid-19 we continued to work remotely given thesurge in Covid-19 cases while the safety and health of our team members were of paramountimportance. Even in these trying times energy conservation and efficiency measures wereundertaken in various areas of the cement manufacturing. Waste Heat Recovery System(WHRs) after its revamping previous year started operating optimally during the yearthrough operational and capex measures.
Information relating to conservation of Energy Technology Absorptionand Foreign Exchange Earning and Outgo required under Section 134(3)(m) of the Act areannexed hereto as Annexure B and form part of this report.
PARTICULARS OF EMPLOYEES AND REMUNERATION :
Disclosure pertaining to the remuneration and other details as requiredunder Section 197(12) of the Act read with the Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed hereto as Annexure C.
In accordance with the provisions of Sections 197(12) & 136(1) ofthe Act read with the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 the list pertaining to the names and other particulars of employees drawingremuneration in excess of the limits set out in the aforesaid Rules is kept open forinspection during working hours (upto the date of ensuing Annual General Meeting) at theRegistered Office of the Company and the Report & Accounts are being sent to all theMembers of the Company excluding the aforesaid particulars of employees. Alternativelyany Member who is interested in obtaining these details may also write to the VicePresident (Legal) & Company Secretary at the Registered Office of the Company or toemail id at email@example.com.
EMPLOYEE STOCK OPTION PLAN (ESOP) :
Pursuant to approval of Shareholders at the Annual General Meeting heldon 5th August 2019 and in accordance with SEBI (Share Based Employee Benefits)Regulations 2014 (SBEB Regulations) the Nomination and Remuneration Committee of theBoard has during the financial year 2019-20 granted 7060000 options at an exerciseprice of Rs. 16/- per option to eligible employees of the Company as per the terms andconditions mentioned in SDCCL Employee Stock Option Plan 2019 ("ESOP Plan"). Outof total options granted 1863750 (Eighteen Lakhs Sixty-Three Thousand Seven HundredFifty) options got vested during the year. On exercise of rights by eligible employees1735502 underlying Equity Shares of Rs.10/- each were allotted to them during the yearin accordance with ESOP Plan.
The certificate of the auditors regarding the implementation of thescheme being in accordance with SBEB Regulations and in accordance with the resolution ofthe Company in the general meeting would be placed at the Annual General Meeting or postedelectronically for the inspection of the members.
Applicable disclosure as stipulated under SBEB regulation and Section62(1) (b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debentures)Rules 2014 as on 31st March 2022 with regard to ESOP Plan is provided atAnnexure D to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
The Company has always provided a congenial atmosphere for work that isfree from discrimination and harassment including sexual harassment. It has providedequal opportunities of employment to all without regard to their caste religion colourmarital status and sex.
The Company has in place Policy on Prevention Prohibition andRedressal of Sexual Harassment in line with the requirements of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. The Company hasconstituted an Internal Complaints Committee for redressal of grievances regarding sexualharassment received by the Committee. All employees are covered under this Policy. Duringthe year under review the Company has not received any complaints of sexual harassment.The Company has complied with all the applicable provisions of the said Act.
The Company's plant properties equipment and stocks are adequatelyinsured against all maior risks including loss on account of business interruption causeddue to property damage. The Company has also taken Directors' and Officers' LiabilityPolicy to provide coverage against the liabilities arising on them.
The Company is aware of the risks associated with the business. Itregularly analyses and takes corrective actions for managing / mitigating the same. TheCompany has developed and implemented a Risk Management Policy that also include theprocess for identifying minimizing and mitigating risks which is periodically reviewed bythe Risk Management Committee Audit Committee and the Board of Directors.
They also review Risk Management procedures measures from time to timeto ensure that executive management controls risk through means of a properly definedframework. The major risks in critical areas have been identified by the Company and itsmitigation process/measures have been formulated accordingly.
Your Company aims to remain essential to the society with its socialresponsibility strongly connected with the principle of sustainability an organizationbased not only on financial factors but also on social and environmental consequences. Itis responsibility of your Company to practice its corporate values through its commitmentto grow in a socially and environmentally responsible way while meeting the interest ofStakeholders.
The Company was the first industrial unit in the region who startedproviding free drinking water and free medical amenities not only to its employees but toall nearby villagers whosoever residing in the radius of more than 15 KMs.
As required under Section 135 of the Act and Rules made thereunder todemonstrate the responsibilities towards social upliftment in structured way the Companyhas formed a Corporate Social Responsibility (CSR) Policy. Details of the Policy CSRCommittee CSR spent during the year forms part of CSR Report and annexed hereto asAnnexure E.
The CSR Committee is supported by an Executive Committee comprising ofsenior officers of the Company from various departments.
DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP): Directors
The Company has six directors on its Board. Detailed composition aboutthe Board is disclosed in Corporate Governance Report. All Directors have submittedrelevant declarations / disclosures as required under Act and Listing Regulations.
Re-appointment of Director
Mr. Anil Singhvi (DIN No. 00239589) Executive Chairman of the Companyretires by rotation at the ensuing Annual General Meeting pursuant to the provisions ofSection 152 of the Act read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 and the Articles of Association of your Company and being eligiblehas offered himself for re- appointment as the Director.
The remuneration of Mr. Anil Singhvi Executive Chairman of the Companywas approved by the Shareholders for 3 years commencing from 30th April 2019.The Board of Directors has at their meeting held on 27th January 2022 haveconsidered the revised remuneration effective from 1st April 2022 andrecommended the same to the shareholders with terms & conditions as more particularlydescribed in the Notice of the Annual General Meeting.
As required by Regulation 36(3) of the Listing Regulations andprovisions of the Secretarial standards brief resume and other details of theabove-mentioned Director(s) getting appointed /re-appointed is attached to the Notice ofthe ensuing Annual General Meeting.
None of the Directors proposed for appointment / reappointment at theensuing Annual General meeting are disqualified from being appointed /reappointed asDirectors under the provisions of the Act the Listing Regulations or any other orderdirections of MCA SEBI or any other statutory authorities.
Our definition of 'independence' of Directors is derived fromRegulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and Section 149(6) of the Companies Act 2013. Based on the confirmation/disclosures received from the Directors and on evaluation of the independence of directorsduring the Board evaluation process and assessing veracity of disclosures the followingNon- Executive Directors are Independent:
a) Mr. Mahesh Gupta
b) Ms. Mini Menon
c) Mr. Satish Kulkarni
The Independent Directors have also confirmed that they have compliedwith Schedule IV of the Act and the Company's Code of Conduct.
In the opinion of the Board the Independent Directors fulfil theconditions specified under the Companies Act 2013 the Rules made thereunder and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and are independent ofthe management and are persons of high integrity expertise and experience. Further interms of Section 150 of the Companies Act 2013 read with Rule 6 of the Companies(Appointment and Qualification of Directors) Rules 2014 the Board is also of the opinionthat the Independent Directors of the Company possess requisite qualifications experienceand expertise in the fields of strategy business management accounts & financeauditing tax and risk advisory services legal HR IT sales & marketing logisticspeople management infrastructure technical banking insurance financial servicesinvestments mining & mineral industries both in cement & other sectors and theyhold highest standards of integrity.
Regarding proficiency the Company has adopted requisite steps towardsthe inclusion of the names of all Independent Directors in the data bank maintained withthe Indian Institute of Corporate Affairs ('IICA'). Accordingly all the IndependentDirectors of the Company have registered themselves with IICA for the said purpose. Interms of Section 150 of the Act read with the Companies (Appointment & Qualificationof Directors) Rules 2014 as amended vide Notification No. GSR.774(E) dated 18.12.2020wherever required Independent Directors of the Company have undertaken to complete onlineproficiency self-assessment test conducted by the said Institute.
Key Managerial Personnel (KMP)
During the year under review there is no change in Key ManagerialPersonnel. The following are the Key Managerial Personnel of the Company as defined underSections 2(51) 203 of the Act read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:
Mr. KK Rajeev Nambiar Chief Executive Officer & ManagingDirector
Mr. Vikas Kumar Chief Financial Officer
Mr. Suresh Meher Vice President (Legal & HR) & CompanySecretary
Annual Evaluation by the Board of its own performance its Committeesand Individual Directors
In terms of Policy on Evaluation of Performance of Directors and theBoard the Board has carried out an evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Audit Nomination andRemuneration Committees and other committees of Board as mandated under the Act andListing Regulations. The criteria and manner in which the evaluation has been carried outhas been explained in the Corporate Governance Report.
Certificate of Non-Disqualification of Directors
In accordance with the Listing Regulations a certificate has beenreceived from M/s Manoj Hurkat & Associates Practicing Company Secretaries that noneof the Directors on the Board of the Company has been disqualified to act as Director. Thesame is annexed herewith as Annexure F.
Statutory Auditors and their Report
M/s. BSR & Associates LLP (BSR) Chartered Accountants Mumbai(ICAI Firm Registration Number 116231W/W- 100024) were appointed as Statutory Auditor ofthe Company at the 73rd Annual General Meeting held on 7thSeptember 2018 to hold office from the conclusion of the said Meeting till the conclusionof the 78th Annual General Meeting to be held in 2023 subject to ratificationof their appointment by the Members at every intervening Annual General Meeting heldthereafter.
The requirement of seeking ratification by the members for continuanceof their appointment has been withdrawn consequent upon the changes made by the Companies(Amendment) Act 2017 with effect from 7th May 2018. Hence the resolutionseeking ratification of the members for their appointment is not being placed at theensuing Annual General Meeting.
The Auditors' Report issued by BSR to the shareholders for the yearunder review does not contain any qualification.
Cost Auditors and Cost Audit Report
Pursuant to Section 148 of the Act read with Rule 8 of the Companies(Accounts) Rules 2014 the Company has made and maintained the cost accounts and recordsfor the year 2021-22. The Board of Directors on the recommendation of the Audit Committeeappointed M/s. Kiran J. Mehta & Co. Cost Accountants as the Cost Auditors of theCompany for
the financial year 2021-22. The Cost Audit Report for the financialyear ended 31st March 2021 was filed with the Central Government on 6thAugust 2021 vide SRN No. T34399634.
Further the Board of Directors has appointed M/s Kiran J Mehta &Co. as the Cost Auditors of the Company for the financial year 2022-23 and fixed theirremuneration subject to ratification by the shareholders at the ensuing AGM of theCompany. M/s Kiran J Mehta & Co. have confirmed that their appointment is within thelimits of the section 139 of the Act and have also certified that they are free from anydisqualifications specified under Section 141 of the Act. The Audit Committee has alsoreceived a certificate from the Cost Auditor certifying their independence and arm'slength relationship with the Company. Necessary resolution seeking Member's approval forratification of remuneration payable to the Cost Auditor for FY 2022-23 is included inthe notice convening 77th Annual General Meeting.
Secretarial Auditor and Secretarial Audit Report
Section 204 of the Act inter-alia requires every listed company toundertake Secretarial Audit and annex with its Board's Report a Secretarial Audit Reportgiven by a Company Secretary in practice in the prescribed form.
In line with the requirement of Section 204 of the Act and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 read withRegulation 24A of the Listing Regulations and other applicable provisions if any theBoard of Directors of the Company had appointed M/s Manoj Hurkat & Associates CompanySecretaries in Whole-time Practice to carry out Secretarial Audit for the financial year2021 -22.
The Secretarial Audit Report for the financial year ended 31stMarch 2022 are annexed as Annexure G to this Report. This report is unqualified andself-explanatory and does not call for any further comments/explanations.
The Board of Directors on the recommendation of the Audit Committeere-appointed M/s. BSR & Associates LLP (BSR) Chartered Accountants to carry out theTax Audit for the Assessment Year 2022-23.
During the year under review M/s. RSM Astute Consulting (RSM) has actedas Internal Auditors of the Company. Audit observations of RSM and corrective actionsthereon are periodically presented to the Audit Committee of the Board. The Board ofDirectors on the recommendation of the Audit Committee re-appointed RSM to carry out theInternal Audit of the Company for the Financial Year 2022-23.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. The
Company has adequate internal financial control which are constantlymonitored by Finance Department.
The Finance Department monitors and evaluates operating systemsaccounting procedures and policies at all locations of the Company. Based on the report ofexternal Internal Auditors the Audit Committee/ Board initiate corrective action inrespective areas and thereby strengthen the controls. The scope functioning periodicityand methodology for conducting internal audit is as per terms agreed by the AuditCommittee in consultation with the Internal Auditor and as approved by the Board.
The Company had in all material respects an adequate internalfinancial controls system with respect to its financial statements for the year ended 31stMarch 2022 and that are operating effectively. More details on internal financialcontrols forms part of the Management Discussion and Analysis Report.
ANNUAL RETURN AND OTHER POLICIES/ DOCUMENTS:
In line with the requirement of the Companies (Amendment) Act 2017effective from 31st July 2018 the extract of annual return is no longerrequired to be part of the Board Report. However in Compliance to the provisions ofSection 92 and Section 134 of the Act read with Rule 12 of the Companies (Management andAdministration) Rules 2014 the extract of the Annual Return of the Company for thefinancial year ended 31st March 2022 and other policies of the Company isplaced on the Company's website at www.digviiaycement.com.
MANAGING THE RISKS OF FRAUD CORRUPTION AND UNETHICAL BUSINESSPRACTICES:
Vigil Mechanism (Whistle Blower Policy) and Code of Conduct
Creating a fraud and corruption free culture has always been the corefactor of your Company. In view of the potential risk of fraud corruption and unethicalbehavior that could adversely impact the Company's business operations performance andreputation Digvijay has emphasized even more on addressing these risks. To meet thisobjective a comprehensive vigil mechanism named Whistle Blower Policy in compliance withthe provisions of Section 1 77(10) of the Act and Regulation 22 of Listing Regulations isin place. The details of the Whistle Blower Policy is explained in the CorporateGovernance Report and posted on the website of the Company at www.digviiaycement.com.
In addition to above policy Company has in place Code of ConductEthics Anti-Corruption policy and other critical compliance policies which are laid downbased on the Company's values beliefs principles of ethics integrity transparency andapplicable laws. Your Company has zero- tolerance to bribery and corruption and iscommitted to act professionally and fairly in all its business dealings.
To create awareness about the Company's commitment to conduct businessprofessionally fairly and free from bribery and corruption regular training andawareness programs and workshops is conducted for all employees (both direct and indirect)across the organization.
More details about the Code are given in the Corporate GovernanceReport.
Code of Conduct to Regulate Monitor and report trading by Insiders
In terms of SEBI (Prohibitions of Insider Trading) Regulations 2015as amended from time to time the Company has adopted a Code of Conduct for Prevention ofInsider Trading (Insider Code) as approved by the Company's Board. Any Insiders (asdefined in Insider Code) including designated employees & persons and their relativesare inter-alia prohibited from trading in the shares and securities of the Company orcounsel any person during any period when the "unpublished price sensitiveinformation" are available with them.
The Insider Code also requires pre-clearance for dealing in theCompany's shares and prohibits dealing in Company's shares by the Directors and thedesignated employees while in possession of unpublished price sensitive information inrelation to the Company and during the period when the Trading Window is closed.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
The Management Discussion and Analysis Report which gives a detailedaccount of state of affairs of the Company's operations forms a part of this AnnualReport.
CORPORATE GOVERNANCE REPORT :
The Corporate Governance Report forms an integral part of this Reportas annexed hereto as Annexure H together with the Certificate from the Practicing CompanySecretary regarding compliance with the requirements of Corporate Governance as stipulatedin Part C of Schedule V to the Listing Regulations.
BUSINESS RESPONSIBILITY REPORT :
The Business Responsibility Report as required under NationalGuidelines on Responsible Business Conduct formulated by Ministry of Corporate AffairsGovernment of India and under Regulation 34(2)(f) of the Listing Regulations describingthe initiatives taken by the Company from an environmental social and governanceperspective form an integral part of this Annual Report and annexed hereto as Annexure I.
TRANSFER OF SHARES ONLY IN DEMAT MODE :
As per SEBI norms all requests for transfer of securities includingtransmission and transposition requests shall be processed only in dematerialised form.The
procedure to dematerialise shares is available athttps://www.diaviiaycement.com. Further vide circular date 24th January 2022SEBI has notified that all request for duplicate issuance splitting and consolidationrequests too will be processed in a demat mode only. The necessary forms are available onthe Company's website https://www.digviiaycement.com.
UPDATING KYC DETAILS
Efforts are underway to update Permanent Account Number (PAN) and bankaccount details of shareholder(s) as required by SEBI. The regulator vide circular dated3rd November 2021 and 15th December 2021 has mandated furnishingof PAN KYC details and nomination by holders of physical securities by 31stMarch 2023 and linking PAN with Aadhaar by 31st March 2022. Members arerequested to submit their PAN KYC and nomination details to the Company's registrarsthrough the forms available at https://www.digviiaycement.com. SDCCL has sentcommunications in this regard to relevant shareholders
Pursuant to aforesaid SEBI Circular in case a holder of physicalsecurities fails to furnish these details or link their PAN with Aadhaar before the duedate our registrars are obligated to freeze such folios. The securities in the frozenfolios shall be eligible to receive payments (including dividend) and lodge grievancesonly after furnishing the complete documents. In case the securities continue to remainfrozen as on 31st December 2025 the registrar/ the Company shall refer suchsecurities to the administering authority under the Benami Transactions (Prohibitions)Act 1988 and/ or Prevention of Money Laundering Act 2002.
LISTING OF EQUITY SHARES :
The Company's equity shares are listed on the BSE Ltd. and NationalStock Exchange of India Ltd. Listing fees have been duly paid to the exchanges.
More details about the Transfer of Shares and Listing of Shares aregiven in the Corporate Governance Report.
COMPLIANCE WITH SECRETARIAL STANDARDS :
The Board of Directors affirms that the Company has complied with theapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiawhich have mandatory application during the year under review.
AWARDS AND RECOGNITION :
'Excellence is not an act but a habit' - Aristotle
At Digvijay we continuously invest in the development and improvementof our operations to achieve the world best. Your Company received several awards andrecognitions during the year 2021-22.
Key recognitions among them are reflected through the following awardsconferred on the Company:
- Corporate Governance Award in Winner category from Greentech forexcellence in Corporate Governance.
- IMC Ramkrishna Bajaj National Quality Award for Performanceexcellence;
- SEEM Platinum Award - SEEM Energy Management Award beating all theIndian Cement Manufacturers through our outstanding achievements in Energy Management;
- Energy conservation Award in Winner category for outstandingachievements in Energy Management;
- Effective safety culture Award in Winner category for outstandingachievements in Effective Safety Culture;
- Greentech Environment Protection Award for outstanding achievementsin Environment Protection;
- Five Star Rating Mines Award for Pachhatar Mine;
HOLDING ENTITY :
True North Fund VI LLP is the "Promoter" of the Company.During the year there has not been any change in number of shares held by Promoter. As atthe end of the Financial Year 2021 -22 the Promoter and the Holding entity continue tohold 80825928 fully paid-up equity shares.
HUMAN RESOURCES :
Your people are your greatest resource. Your Company encourages andprovides regular training to employees to improve skills. Your Company has performanceappraisal system for senior employees and junior management staff. In-house news-lettersprovide forum for information sharing. Rewarding individuals for their contribution ispart of motivation towards Excellence. More details on this section are forming part ofManagement Discussion and Analysis Report.
HEALTH AND SAFETY/ INDUSTRIAL RELATIONS :
The Company continues to accord high priority to health and safety ofemployees at all locations. During the year under review the Company conducted safetytraining programs for increasing disaster preparedness and awareness amongst all employeesat the plant. Training programs and mock drills for safety awareness were also conductedfor all employees at the plant. Safety Day was observed with safety competition programswith aim to imbibe safety awareness among all the employees (both direct and indirect) atthe plant.
During the year under review your Company enjoyed cordial relationshipwith workers and employees at all levels.
No disclosure or reporting is made in respect of the following items asrequired under the Companies Act 2013 and
Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 as there were no transactions during the yearunder review:
Details relating to deposits covered under Chapter V of theCompanies Act 2013.
Issue of equity shares with differential rights as to dividendvoting or otherwise.
The Company does not have any scheme or provision of money forthe purchase of its own shares by employees or by trustees for the benefit of employees.
The Managing Director of the Company does not receive anyremuneration or commission from its subsidiary company.
Further your directors state that no disclosure or reporting isrequired in respect of following items as either there were no transactions on theseitems or these items are not applicable to the Company during the year under review:
1) No company have ceased to be Subsidiary Associate or joint ventureof the Company during the year under review.
2) No significant and material orders were passed by the regulators orcourts or tribunals which impact the going concern status and Company's operations infuture.
3) No fraud has been reported during the audit conducted by theStatutory Auditors Secretarial Auditors and Cost Auditors of the Company.
4) During the year under review no revision was made in the previousfinancial statement of the Company except as otherwise required under applicable laws.
ENVIRONMENT SUSTAINABILITY :
We believe in sustainable development. We regard social economic andenvironmental responsibility as integral element of our business.
Your Company is an ISO 14001:2015 Environment Management SystemCertified and adhere to ISO 45001 standards of Safety and Occupational Health. Companygives top priority to health and safety of its employees (both direct & indirect) atits workplaces not only to avoid work related injuries and fatalities but they areessential to effective business performance. With this approach Company switched overfrom OHSAS to latest version of ISO 45001:2018 on Occupational Health and SafetyManagement Systems.
Professional Environment Auditors such as Det Norske Veritas the StatePollution Board's certified auditors and Environmental System Auditors conduct periodicin-depth environmental audit on our plant. The Audit Reports validate our commitment toenvironmental conservation. Large scale plantations in the mines plant colonies andsurrounding areas provide a lush green cover and are reflection of our respect for theenvironment.
Your directors are thankful to the Central and State GovernmentDepartments Organizations and Agencies for their continued guidance and co-operation. TheDirectors are grateful to all valuable Stakeholders Dealers Vendors Banks and otherbusiness associates for their excellent support and help rendered during the year. TheDirectors also acknowledged the commitment and valued contribution of all employees of theCompany.
Your directors wish to place on record their appreciation for thesupport and guidance provided by its Parent Company/ Promoter.