REPORT ON CORPORATE GOVERNANCE
THE COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE:
"Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goal. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society"
H.P. Cotton Textile Mills Ltd. believes that good governance is essential to achieve long terms corporate goals and enhance stakeholders' value. Thus the Company's philosophy on Corporate Governance aims at not only its own growth but also maximization of benefits to the shareholders, employees, customers, government and also general public at large. For this purpose the company continuously strives to improve its level of overall efficiency through good corporate governance, which envisages transparency, professionalism and accountability in all its operations.
In compliance with the requirement under clause 49 of the Listing Agreement, all the Board Members have affirmed their compliance of Code of Conduct adopted by the Company for the year-ended 31.03.2015 and a declaration to this effect duly signed by the Dy. Managing Director(s) form part of this report.
1. Board of Directors:
A Composition of Board: - The Company Act, 2013 and Clause 49 of the listing agreement with the stock exchanges govern the composition of the Board of Directors. The Board of Directors comprised eight members consisting of Four Executive Directors and four Non- executive Directors as at 31.03.2015. The company is having not less than 50% of the Board's Strength as independent directors as retquired under the listing agreement. The non-executive Directors are professionals having experience in business, industry, Finance and Law.
No Director is related to any other Director on the Board in terms of the provisions of the Companies Act, 2013, except for Shri Raj Kumar Agarwal, Shri Ashok Kumar Agarwal and Shri Kailash Kumar Agarwal who are from the promoters' family and are related to each other.
All the directors who are on various Committees are within the permissible limits of the listing agreement. The Directors have intimated to the Company from time to time about their membership in the various committees in other Companies.
Committees of the Board
1. Audit Committee: Audit Committee consists of four directors, all being non-executive and independent Director viz. Sh. Parshotam Das Agarwal (Chairman), Sh. Bibhuti Charan Talukdar, Sh. Anil Agarwalla and Shri Mohan Lal Jain. Sh. Raj Kumar Agarwal (Director), Sh. Ashok Kumar Agarwal (Dy. Managing Director), Sh. Kailash Kumar Agarwal (Dy. Managing Director), Statutory Auditor, Internal Auditor, Cost Auditor and Financial advisor are the permanent invitees to attend the Audit Committee Meeting for consultation and to respond to the queries raised at the Committee Meeting.
The role and terms of reference of Audit Committee are as contained in the Section 177 of the Companies Act, 2013 and also as contained in the clause 49 of the Listing Agreement. The main objective of the Audit Committee inter-alia includes monitoring and providing effective supervision on the financial transactions, reporting process and the disclosure of its financial information(s) to ensure that these statement(s) are presented/ published timely, accurately, are sufficient and true and fair as well as evaluation of internal financial control and risk management system. It also reviews major accounting policies followed by the company.
Sh. Parshotam Das Agarwal, Chairman of the Audit Committee attended the last Annual General Meeting held on September 26, 2014, at the Registered Office of the Company at 15 K.M. Stone, Delhi Road, Village Mayar, Hisar - 125044 (Haryana).
During the year 2014-15 the Audit Committee met 04 times on 30.05.2014; 13.08.2014; 13.11.2014; & 12.02.2015.
ii. Nomination & Remuneration Committee: Nomination & Remuneration Committee consists of three mem- ber's viz., Sh. Bibhuti Charan Talukdar (Chairman), Sh. Parshotam Das Agarwal and Sh. Anil Agarwalla, all are Non-Executive and Independent Directors. The terms of reference of Nomination & Remuneration Committee include the determination of remuneration packages of the executive directors including remuneration policy and pension rights as well as formulation of criteria for evaluation of independent directors and the Board.
The terms of reference of the Nomination and Remuneration Committee:
The committee is vested with the responsibility to functions as per the SEBI guidelines and recommends to the Board the specific compensation package for the Executive Directors and fees payable to the Non- Executive directors besides framing guidelines for overall compensation packages of Directors/KMP.
The Non- Executive Directors do not draw any remuneration from the company other than the sitting fees.
Details of remuneration paid to Executive and Non- Executive directors during the year from April1, 2014 to March 31, 2015 is given in "Annexure C to Board's Report."
iii. Share transfer Committee: The Share Transfer Committee consists of four members viz., Sh.Parshotam Das Agarwal (Chairman), Sh. Bibhuti Charan Talukdar, Sh. Anil Agarwal, Sh. Kailash Kumar Agarwal. There were no share transfers pending for registration for more than 30 days as at 31st March 2015.
iv The Stakeholders Relationship Committee: The Stakeholders Relationship Committee specifically looks into the redressal of the Shareholders and Investors complaints and expeditious share transfer process. The Stakeholders Relationship Committee consists of three members viz. Sh. Bibhuti Charan Talukdar (Chairman), Sh. Parshotam Das Agarwal and Sh. Anil Agarwalla.
The committee acts in close liaison with its Share transfer agent and Registrar M/s. Alankit Assignments Ltd. Company has received certificate from its Share transfer agent and Registrar that complaints, if any, received from the shareholders have been suitably redressed and the company regularly follows with the Registrars for redressal of all complaint in time as per statutory requirements.
During the year ended 31st March 2015, no complaints/queries were received and as at 31st March 2015 there were no complaints / queries pending for reply.
v) Corporate Social Responsibility (CSR) Committee:
The Companies Act, 2013 notified section 135 of the Act concerning Corporate Social Responsibility along with the Rules there under and revised Schedule VII to the Act on 27th February, 2014 and other amendments to Schedule VII to come into effect from 1st April, 2014. The Company being covered under the provisions of the said section has taken necessary initial steps in this regard. A Committee of the directors, titled 'Corporate Social Responsibility (CSR) Committee', has been formed by the Board in its meeting held on 30th May, 2014, consisting of the following:
Shri Parshotam Das Agarwal Chairman
Shri Bibhuti Charan Talukdar Member
Shri Ashok Kumar Agarwal Member
Shri Kailash Kumar Agarwal Member
Shri Mohan Lal Jain Member
The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.
vi) Risk Management Committee
Business risk evaluation & management is an ongoing process within the organisation. The company has a robust risk management framework to identify, monitor & minimize risk as also identify business opportunities. The objective and scope of risk management committee comprises of reviewing risk and evaluate treatment as well as monitoring, mitigation and reporting of risks.
D) Remuneration of Directors:
i) The Company pays remuneration to its Whole Time Director & Deputy Managing Directors as approved by the Nomination & Remuneration Committee, Board of Directors and Members of the Company in General Meeting. Detail of the remuneration given to them is given below:
ii) The Non Executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in the Board meetings.
A Non Executive Director shall be entitled to receive sitting fees for meeting 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.
The company has paid sitting fees Rs. 5000 per board meeting and Rs. 2000/- for attending per audit committee meeting and Rs. 2000 for attending per remuneration committee meeting & further w.e.f. 01.10.2014 Company has decided to pay Rs. 2000/- for attending per Share Transfer Committee Meeting, Stakeholder Relationship Committee Meeting and Corporate Social Responsibility Committee Meeting to Non Executive Directors during the financial year 2014-15.
E) Retiring Directors: According to Article 110 of the Articles of Association of the Company,
One Director for the time being is liable to retire by rotation; Accordingly Sh Kailash Kumar Agarwal is liable to retire by rotation in the ensuing Annual General Meeting and being eligible has offered himself for reappointment. Further the Company had, pursuant to the provisions of clause 49 of the Listing Agreements entered with the Stock Exchanges, appointed Shri Bibhuti Charan Talukdar, Shri Parshotam Das Agarwal, Shri Anil Agarwalla and Shri Mohan Lal Jain, as Independent Directors at various times, in compliance with the requirements of the clause. Pursuant to the provisions of section 149 of the New Companies Act 2013, which came in to effect from April 1, 2014, every listed public company is required to have at least one-third of the total number of directors as independent directors, who are not liable to retire by rotation.
2. Management Discussions and Analysis Report
The Management Discussion and Analysis Report have been included in this Annual Report and include discussion on the matters specified in Clause 49 of the Listing Agreement.
a) The Company does not have any subsidiary Company.
b) All and individual transactions with the related parties were in the ordinary course of business and were on arm's length basis. Since such transaction(s) were not having potential conflict with the interest of the Company at large and therefore was not required to be placed before the audit committee. Related party transactions have been audited by the Statutory Auditors of the Company.
c) There were no material financial and commercial transactions by Senior Management as defined in Clause 49 of the listing agreement where they have personal interest that may have a potential conflict with the interest of the Company at large requiring disclosure by them to the Board of Directors of the Company.
d) All mandatory Accounting Standards have been followed in preparation of the financial statements.
e) The Company has not raised any money through public issue, right issue, preferential issue etc. in 2014-15 and in the previous financial year and hence provisions relating to above in Clause 49 of the listing agreement are not applicable.
f) The Company has continued to comply with the requirements of the Stock Exchanges, SEBI and other Statutory Authorities on all matters related to capital markets during the last three years. Stock Exchanges, SEBI or any other statutory authorities have not imposed any penalty or strictures related to capital market activities on the Company during the last three Financial years.
g) The Company has three whole time promoter directors whose appointment and remuneration has been fixed by the Board in terms of resolution passed by the Members.
h) The Company has adopted a code of conduct for prohibition of Insider Trading pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulation, 1992 as amended. This code is applicable to all the Directors and such designated employees who are expected to have access to unpublished price sensitive information relating to the Company.
i) The Company has complied all the mandatory requirements and has constituted a Nomination & Remuneration Committee from the non -mandatory requirements.
I) Means of Communication
The quarterly unaudited (provisional) results and annual audited financial results of the company are sent to the stock exchange immediately after they are approved by the board and are also published in one vernacular newspaper 'Aaj Samaj' (Hindi) and the 'Business Standard'(English). Also they are uploaded on company's website 'www.hpthreads.com' The results are published in accordance with the guidelines of the stock exchange.
5.) ADDITIONAL SHAREHOLDER INFORMATION
I) Annual General Meeting :
a) Date : 24th September, 2015
b) Time : 2.30 P.M.
c) Venue : At registered office of the company 15 K.M. Stone, Delhi Road, VPO Mayar, Hisar - 125044 (Haryana)
ii) Financial Calendar: The Last financial year of the Company was of twelve months from April 2014 to March 2015.The tentative financial calendar of the Company for the year 2015-16 shall be as follow:
Board meetings to take on record : Schedule
Financial results for the quarter ending June 30, 2015 : During August, 2015
Financial results for the quarter ending September 30, 2015 : During November, 2015
Financial results for the quarter ending December 31, 2015 : During February, 2016
Financial results for the quarter ending March 31, 2016 : During May, 2016
iii) Date of Book Closure
The Register of members and the Share transfer Books of the Company shall remain closed from 17th September, 2015 to 24th September, 2015 both days inclusive.
iv) Dividend Payment Date:
Within 30 days from the date of Annual General Meeting
v) Listing of Equity Shares on Stock Exchanges at :
Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street Mumbai - 400 001
The Delhi Stock Exchange Association Ltd., DSE House, 3/1, Asaf Ali Road, New Delhi - 110 002
The Company is regularly paying the Listing fee to Bombay Stock Exchange (BSE) and Delhi Stock Exchange (DSE).
Stock Code :
The scrip code of the Company at BSE is 502873.
vii) Share Transfer Agent, Plant Location & Address for Correspondence:
Registrar and Share Transfer Agents
Alankit Assignments Limited, “Alankit Heights” 1E/13, Jhandewalan Extension, New Delhi-110055 Phone:91-11-23541234, 42541234 Fax: 91-11-23552001 E mail: email@example.com
15th K.M Stone, Delhi Road, VPO, Mayar Hisar – 125044 (Haryana) Phone :91-1662-261425-27 Fax : 91-1662-261417
Address for Correspondence
H. P. Cotton Textile Mills Limited 15th K.M Stone, Delhi Road, VPO, Mayar Hisar – 125044 (Haryana) Phone :91-1662-261425-27 Fax : 91-1662-261417 E-mail ID: firstname.lastname@example.org
ix) Dematerialization and Transfer of shares:
Dematerialization and Transfer of shares are being done by M/s Alankit Assignments Limited, Registrar & Share Transfer Agents of the Company.
The equity shares of the company are under rolling settlement and are compulsory traded and settled only in the dematerialized form. A total of 3600390 (94.50%) shares of the company have been dematerialized as on March 31, 2015. There is no case in process/ pending for transfer as well as dematerialization of shares.
x) As per the requirement of Section of 149(1) of the New Companies Act 2013 read with the Companies (Appointment & Qualification of Director) Rules, 2014 which come into force on 1st April 2014 provides that every listed company shall appoint at least one woman Director. Accordingly Company has appointed Woman Director within the prescribed time.
xi) Company has appointed Manish Singla as Company Secretary under section 203 of the New Companies Act 2013 and Sh. Vishesh Kumar Chugh as CFO cum Compliance officer under clause 47 of the Listing Agreement. Any Investor/Shareholder of the company can contact to Compliance officer on the matters related with the company at 15th K M Stone, Delhi Road, VPO Mayar, Hisar - 125044, Phone: 91-1662-261425-27, Fax: 91-1662-261417 and E-mail: email@example.com
xii) Shares held in electronic form:
Shareholders holding shares in electronic form may give instructions regarding bank details which they wish to incorporate on their dividend warrants to their depository participants. As per the regulations of NSDL AND CDSL, the company is required to print the bank details on dividend warrants as furnished by these depositories to the company.
Declaration under Clause 49 (1) (E) (ii) of Listing Agreement
I, Ashok Kumar Agarwal, Deputy Managing Director of the Company, hereby declare that all members of the Board of Directors have affirmed compliance with the code of Conduct for the year-ended 31.03.2015.
Ashok Kumar Agarwal
Deputy Managing Director
(DIN : 00046627)
Dated : 13.08.2015
Place: New Delhi