CORPORATE GOVERNANCE REPORT
This report of Corporate Governance form part of the Annual Report.
Company's philosophy on Corporate Governance
Your company continues to practice the principle of good Corporate Governance. It is company's firm belief that good Corporate Governance is a key to success of business. The company's philosophy envisages an attainment of highest level of the transparency and accountability in its operations so that company's goal of creation and maximization of wealth of the shareholders/stakeholders could be achieved. Clause 49 of the listing agreement with stock exchanges incorporates certain mandatory disclosure requirements with regard to Corporate Governance. In pursuance to the requirements of corporate governance rules, we are pleased to report the following:
I. BOARD OF DIRECTORS
1. The Board of the company is well structured and diversified with adequate blend of professional, Executives, Non Executives and Independent Directors.
2. The present strength of Board is Ten Directors. The Board comprises of Executive and NonExecutive Directors. Sh. J.L. Oswal is a Non Executive Chairman and Sh. Dinesh Oswal is Managing Director of the Company. Thus the post of Chairman and Managing Director are held by different persons.
3. The present Board consists of one half of the Independent Directors as required under Corporate Governance Rules. Out of ten Board members, five members namely Dr. (Mrs.) H.K. Bal, Prof. K.S. Maini, Dr. Suresh Kumar Singla, Dr. Amrik Singh Sohi and Dr. Yash Paul Sachdeva are Independent Directors. Dr.(Mrs.) H.K.Bal is woman Director of the company. Thus the company has complied the Corporate Governance Rules regarding structure of the Board.
4. During the year the Board met four times i.e. on 29th May, 2014, 11th August, 2014, 12th November, 2014 and 3rd February, 2015 with a clearly defined agenda circulated well in advance of each meeting. The maximum interval between the two Board Meetings is not more than 120 days.
5. None of the director is a member of more than ten Board level committees or is Chairman of more than five such Board level committees as required under Clause 49 of the Listing Agreement. None of the Director holds Directorships in more than Twenty Companies and is a Director of more than Ten Public Limited Companies as prescribed under the Companies Act, 2013.
6. Participation of Non-Executive Directors has been active in the Board Meetings. The Attendance record of directors in the Board meeting and Annual General Meeting during the year 2014-15 is given here under:
7. Earlier Non-Executive Directors were paid sitting fees of Rs. 5000/- per meeting of the Board. However, w.e.f. 11th August, 2015 the Board has increased the sitting fee from Rs. 5000/- to Rs. 10000/- per meeting of the Board.
8. Sh. Jawahar Lal Oswal is the father of Sh.Kamal Oswal and Sh. Dinesh Oswal. Sh.Kamal Oswal and Sh. Dinesh Oswal are brothers. No other Director is related to any other director of the company within the meaning of Section 2(77) of the Companies Act, 2013.
9. Code of Conduct : The Company is committed to conduct its business in accordance with applicable laws, rules and regulations and highest standard of transparency. Accordingly, the Company has laid down a Code of conduct for all its Board members and Senior Managerial Personnel so that conflict of interest could be avoided. All the Board members and Senior Managerial Personnel are complying with the said code of conduct. The code of conduct is also available on Company's website i.e. www.owmnahar.com . The Board members and senior management personnel affirm the compliance of this Code annually.
10. The Company ensures compliance of various statutory requirements by all its business units.
11. All the statutory Registers that are required to be maintained particularly, Registers of Director's and key managerial personal and their Shareholding, Register of contracts, Register of Investments etc. are properly maintained and continuously updated.
FAMILIARISATION PROGRAMME FOR BOARD MEMBERS
The Company at the time of appointing a Director, issues a formal letter of appointment which inter alia, explains the role, functions, duties and responsibilities expected from him/her as a Director of the Company. All Independent Directors are provided with copies of all the policies/Guidelines as framed by the Company under various statutes and Listing Agreement to familiarise with Company's procedures and practices . Further, to update them on the regular basis, the Company provide copies of all amendments in Corporate Laws, Corporate Governance Rules and Listing Agreement. The details of the Company's policy on Familiarisation Programme for Independent Directors are posted on the website of the Company and can be assessed at <http://www.owmnahar.com/(Web> Link)
SEPARATE MEETING OF INDEPENDENT DIRECTORS
The Company's Independent Directors met on 15th December, 2014, without the attendance of Non Independent Directors and members of the management. All Independent Directors were present at the meeting. At the meeting, they:-
I. Reviewed the performance of non-independent directors and the Board as a whole;
ii. Reviewed the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors;
iii.Assessed the quality and timeliness of flow of information between the Company management and the Board which is necessary for the Board to effectively and reasonably perform their duties.
The Independent Directors were of the unanimous opinion that the Managing Director of the Company is providing good leadership to the Executive Team. He is a Textile expert having experience of more than 30 years in Textile Industry. He also posses good knowledge of Finance, export marketing and plays a pivotal role in guiding and managing the company's affairs in a transparent manner to achieve objectives of maximizing the wealth of the shareholders. It was also confirmed that all the Directors of the Company are persons of integrity and possess relevant expertise and experience. The Board as a whole is an integrated, balanced and organized team of experts. The Directors are participative, interactive and communicative and take keen interest in the affairs of the Company. The Chairperson, Sh. Jawahar Lal Oswal, who is an eminent Industrialist having business experience of more than 51 years, not only provides leadership to the Board but also provides advice to the Managing Director/Chief Executive Officer by sharing his expertise and experience in handling the complex situations. He oversees the distribution of information to Directors and implementation of Good Corporate Governance practices. The information flow between the Company's management and the Board is reasonable, accurate and timely to enable the smooth functioning of the Company's affairs.
II. AUDIT COMMITTEE
The Board had already constituted an independent and qualified Audit Committee as per section 177 of the Companies Act, 2013. The committee consists of three Non-Executive Directors under the Chairmanship of Prof. K.S. Maini, Sh. Dinesh Gogna and Dr. S.K. Singla are the two other members of the Audit Committee. Prof. K.S. Maini is Post Graduate in commerce. He retired as Head of Commerce Department (Post Graduate), Government College, Ludhiana. He is well versed with accounting and financial matters. Sh. Dinesh Gogna is a Company Executive having 36 years of experience in Corporate Finance, Taxation and Financial and Accounting matters. Likewise Dr. S.K.Singla who is M.A. (Stats. & Eco.) & Ph.D (Stats.) is also having requisite expertise in Financial and Accounting matters. The Company Secretary is the Secretary of the committee. The Chief Financial Officer is permanent invitee of the committee. The statutory auditors, the internal auditors and cost auditors are also invited to attend the meetings, as per relevant provisions of the applicable laws/rules, as and when felt necessary.
The term of reference of the Audit Committee is as per Clause 49 of the Listing Agreement entered into with the Stock Exchanges, SEBI Guidelines and Section 177 Companies Act, 2013. During the financial year 2014-15, the committee met four times i.e. on 29th May, 2014, 11th August, 2014, 12th Nov, 2014 and 3rd Feb, 2015 for reviewing and adopting the quarterly un-audited financial results as well as the financial statement for the year ended 31st March, 2014, before recommending the same to the Board of Directors for their perusal and adoption.
Prof. K.S. Maini, Chairman of the Audit Committee attended the last Annual General Meeting of the company held on 30th September, 2014 and replied/clarified the queries at the Annual General Meeting.
III. NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors in their meeting held on 29th May 2014 has reclassified Remuneration Committee as Nomination and Remuneration Committee. The committee consists of three independent directors, Dr. S.K. Singla as Chairman,Dr. A.S. Sohi and Dr.(Mrs.) H.K. Bal are the other members of the Committee.
The broad terms of reference of the Nomination and Remuneration Committee are as per the provisions of Section 178 of the Companies Act, 2013, i.e. to frame and recommend Company's policies in respect of nomination and remuneration of Managing Director, Senior Executives. The policies help the company to recruit and retain best talent and also ensure appropriate disclosures as per the applicable provisions of the Companies Act 2013. The Nomination and Remuneration Committee met thrice on 29th May, 2014, 11th August 2014, 18th August 2014, during the year under review.
REMUNERATION OF DIRECTORS
The remuneration of Managing Director of the Company comprises of both fixed and variable component i.e. Salary, perquisites, retirement benefits and a commission of 1.5% of the Net Profit. The remuneration of Managing Director is recommended by the Nomination and Remuneration Committee and approved by Board of Directors and shareholders of the Company. The tenure of office of Managing Director is for five years from the date of appointment, and can be terminated by either party by giving one month notice in writing. There is no separate provision for payment of severance fees. Pursuant to Section 197 and 198 read with Schedule V of the Companies Act, 2013, the Company has paid minimum remuneration of Rs. 5316744/- only for the year 2014-15 to Sh. Dinesh Oswal, Managing Director of the Company. The Company has also applied to Ministry of Corporate Affairs (MCA), Government of India for approval for payment of Managing Directors' remuneration as approved by shareholders vide special resolution dated 30-09-2014 but the same has not been received as yet.
The non-executive directors are paid remuneration in the form of sitting fees for attending Board Meetings as fixed by the Board of Directors from time to time subject to statutory provisions.
None of the Non Executive Directors has any pecuniary relationships or transactions vis-a-vis the Company. None of the Directors has been granted any stock option. The appointment and remuneration policy of the Company in respect of Company's Directors has already been discussed in the Directors' Report. Hence, the same is not repeated here for the sake of brevity.
IV. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has reclassified and changed the name of Shareholder's/Investors' Grievances Committee to Stakeholder Relationship Committee in its meeting held on 29th May, 2014. The committee consists of three non executive directors under the Chairmanship of Dr.(Mrs.) H.K. Bal, Dr. A.S. Sohi and Sh. S.K. Sharma are the other two members of the Committee. Sh. Brij Sharma, Company Secretary is the Compliance Officer of the Company. The Committee look into the complaints/grievances of shareholders in respect of transfer of shares, non receipt of Dividend/Share Certificates, demat problems etc. The Committee met four times from 1st April, 2014 to 31st March,2015 i.e. on 29th May, 2014, 11th August, 2014, 12th November, 2014 and 03rd Feb, 2015
The Company has been quick in redressal of the grievances of the shareholders and has attended to most of the investors correspondence/grievances with in a period of 15 to 20 days from the date of the receipt of the same.
Number of complaints received/resolved/pending is as under:
No. of complaints received during the year : 3
No. of complaints resolved during the year : 3
No. of complaints pending as on 31st March, 2015 : NIL
None of the complaints during the year remained pending for more than 20 days.
V. Share Transfer Committee
The Company has also constituted a Share Transfer Committee com p risin g 4 me m bers u nder the Chairmanship of Sh. Dinesh Oswal, Managing Director of the Company. The Committee is responsible for approving the transfer and transmission of securities, dematerialization of shares, issuance of duplicate certificates and other shareholders related issues. The Committee generally meets twice in a month. During the period 1st April, 2014 to 31st March, 2015, the Committee held 22 meetings i.e. on 29.04.2014, 31.05.2014, 16.06.2014, 30.06.2014, 15.07.2014, 31.07.2014, 14.08.2014, 30.08.2014, 13.09.2014, 30.09.2014, 15.10.2014, 31.10.2014, 15.11.2014, 29.11.2014, 15.12.2014, 31.12.2014, 15.01.2015, 31.01.2015, 14.02.2015, 28.02.2015, 14.03.2015, 31.03.2015 and the attendance record of the members is as follow:
As per SEBI Circular No. D&CC/FITTC/CIR-15/2002 dated 27th December, 2002, Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transfer and Electronic Connectivity. Accordingly, all the shareholders, investors, Members of the Stock Exchanges, Depository Participants and all other concerned are requested to send all communication in respect of share transfer, Demat/Remat, Change of Address etc. to our Registrar whose address and telephone no. etc. has already been mentioned in the Directors Report.
VI. WHISTLE BLOWER POLICY/VIGIL MECHANISM
Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, the Board in its meeting held on 29th May 2014 has framed and approved a Vigil Mechanism/Whistle Blower Policy for its directors and employees to report the genuine concerns or grievances about the unethical behaviour, actual or suspected fraud or violation of the Code of Conduct or Policy and for providing adequate safeguards against victimisation of persons who use such mechanism. Whistle Blower Policy/Vigil Mechanism is also posted on Company's Website. The Company has a dedicated email address i.e. firstname.lastname@example.org for reporting the genuine concerns. The Audit Committee regularly review the working of the Mechanism and no complaint was received during the year. The mechanism provide direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. In case of repeated frivolous complaints being filed by a director or an employee, the Audit Committee may take suitable action against the concerned director or employee including reprimand them. The Company Confirms that no personnel have been denied access to the Audit Committee.
VII. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board in its meeting held on 29th May, 2014 has constituted the Corporate Social Responsibility Committee as per provisions of Section 135 read with Schedule VII of the Companies Act, 2013. The committee consists of Sh. Dinesh Oswal, Managing Director, as Chairman and Dr. S.K. Singla and Sh. Dinesh Gogna, Directors of the Company, are the other members of the Committee. The terms and reference of the Committee are:-
1. To formulate and recommend the Board a CSR Policy which shall indicate the activities to be undertaken by the Company as laid down in Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
2. To recommend the amount of expenditure to be incurred on the CSR activities.
3. To monitor the Company's CSR Policy and implementation of CSR projects from time to time.
During the year under review, the Committee met twice i.e. on 11th August, 2014 and 2nd February, 2015
I) During the year, there are no material related party transactions made by Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company at large. During the year, the Company had not entered in to any contract/arrangement/ transaction with related parties which could be considered material in accordance with the provisions of Clause 49 of the Listing Agreement. However, the details of the transactions with Group Companies are disclosed in schedule 28, sub-heading XX in the Notes to Financial Statements as per the applicable provision.
ii) The Company continues to comply with the requirements of Stock Exchange, SEBI or any statutory authority on all matters related to capital market during last three years. No penalty or strictures have been imposed on the company by the said authorities relating to the above.
iii) The company complied with not only the mandatory requirements but has also complied with the non mandatory requirements in respect of separate posts of chairman and managing director/CEO.
The Company is yet to comply with the other non mandatory requirements on the listing agreements on Corporate Governance.
IX. PREVENTION OF INSIDER TRADING
Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted a Code of practices and procedures for fair disclosure of unpublished price sensitive information" and "Code of Conduct to regulate, monitor and report trading by insiders. The code help to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Company Secretary being the Compliance Officer is responsible for implementation of the Code.
XI. MEANS OF COMMUNICATION
The Company's quarterly results in the format prescribed by the stock exchanges are approved and taken on record by the Board within the prescribed time frame and sent immediately to all Stock Exchanges on which the Company's shares are listed. These results are published in leading news papers i.e. Business Standard/Financial Express in English and Dainik Jagran in vernacular. Our Quarterly, Half yearly and Annual Results are also displayed on the website of the Company i.e. www.owmnahar.com . Whenever any official news is released, the same is also displayed on the aforesaid website of the company. Likewise whenever any presentation about Company's working is made to the Financial Institutional Investors or to the analysts, the same is displayed on the Company's Website.
The Quarterly and Annual Financial statements, Balance sheet, Profit & Loss Account, Directors' Report, Auditors' Report, Cash Flow Statement, Corporate Governance Report, Report on Management Discussion and Analysis and Shareholding Pattern etc. can also be retrieved by the investors from the website of the Company, Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
XII. GENERAL SHAREHOLDERS INFORMATION
1. Annual General Meeting:
Date : September 30, 2015
Day : Wednesday
Time : 11:30 a.m.
Venue : Premises of Nahar Industrial Enterprises Limited, Focal Point, Ludhiana
2. Financial Calendar :
The Financial year of the Company covers 1st April, to 31st March.
3. Date of Book Closure :
12th Sept., 2015 to 22th Sept., 2015 (Both days inclusive)
4. Dividend Payment
a) Payment Date :
On or Before 10th Oct., 2015
b) Mode of payment : The Company provides the facility of paying dividend through Electronic Clearing System (ECS). The members desirous of availing the facility of electronic credit of dividend are requested to ensure that their correct bank details along with 9 digit MICR code of their Bank is noted in the records of their Depository Participant (DP), Members who hold shares in physical form, should contact the R&T agents and the Company in this regard. In order to prevent fraudulent encashment of Dividend Warrants, members are requested to provide their correct bank account details, to their DP in case of electronic holding and to the R&T Agent or the Company in case of physical holding.
All the unclaimed/unpaid dividend upto financial year ended March 31,2007 have been transferred to the Investor Education & Protection Fund of the Central Government pursuant to Section 205C of the Companies Act, 1956. Further the dividend for the financial year ended 31st March, 2008 will be transferred to the said Fund in November, 2015. All the members who have not encashed their dividend warrants for the aforesaid year may approach the company for obtaining duplicate dividend warrants/ revalidation of the dividend warrants.
d) Change of address:
Members may kindly note that R&T agent and/or the company will not entertain the requests for noting of the change of address/bank details/ECS mandate in the case of account with the Demat holding. For this purpose the shareholders should approach their Depository Participant (DP).
5. Listing on Stock Exchanges:
The National Stock Exchange of India Ltd (NSE) "Exchange Plaza 5th Floor, Plot No.C/1, G-Block, Bandra-Kurla Complex, Bandra (East) Mumbai-400051.
The Bombay Stock Exchange Limited (BSE), 25th Floor, P.J. Towers, Dalal Street, Mumbai- 400001. The listing fees payable to BSE and NSE for 2015-16 have been paid in full by the Company.
6. Stock Code :
For trading at NSE : NAHARSPING
For tradi ng at BSE : 500296
7. Demat ISIN number : INE290A01027
The annual cu st odian fe es for the financial year 2015-16 have been paid to the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
8. Dedicated e-mail for Investor Grievance
To enable investors to register their grievances, the Company has designated an exclusive e-mail id i.e. email@example.com
9. Registration/updation of e-mail address
The Ministry of Corporate Affairs vide Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 has taken ''Green Initiative in the Corporate Governance'' by allowing paperless compliance by the companies. Further, the Compaies Act, 2013 also provide that the Company can now send various notices and documents, including Annual Report, to its shareholders via electronic mode to the registered e-mail addresses of the shareholders. To support this Green Initiative of the Government in full measure, shareholders are requested to register/update their latest e-mail addresses with their Depository Participant (DP) with whom they are having Demat A/c or send the same to the Company via e-mail at secnsm @owmnahar.com or gredressalnsml@owmnahar. com.
10. Compliance Officer
Sh. Brij Sharma, Company Secretary is the Compliance Officer of the Company.
XV. REGISTRAR AND TRANSFER AGENTS
As per SEBI circular no. D&CC/FITTC/CIR-15/2002 dated 27th December,2002, Company has appointed M/s Alankit Assignments Limited as registrar for Share Transfer and Electronic Connectivity. Accordingly, all the shareholders, investors, Members of Stock Exchanges, Depository Participants and all other concerned are requested to send all the communications in respect of Share Transfer, Demat/Remat, Change of address etc. to our Registrar whose address and telephone nos. etc. have already been mentioned in the Director's Report.In case any query/complaint remains unresolved with our Registrar please write to the Company Secretary at the registered office of the company.
XVI. SHARE TRANSFER SYSTEM
The Company has constituted Share Transfer Committee consisting of four members, namely Sh. Dinesh Oswal, Managing Director, Sh. Dinesh Gogna, Sh. S.K. Sharma, Directors and Sh. Brij Sharma, Company Secretary of the company. The Share Transfer Committee meets twice in a month to approve the transfer/ transmission/ transposition, issue of duplicate share certificates and duly transferred shares are generally dispatched with in prescribed period under the Companies Act, 2013/ Guidelines of the stock exchanges. As required under the clause 47(c) of the Listing Agreements entered into by the Company with the Stock Exchanges, a certificate is obtained every six months from a Practising Company Secretary with regard to inter alia, effecting transfer, transmission, Sub-division, consolidation, renewal and exchange of Equity Shares with in 15 days from their lodgement. The certificates are forwarded to BSE and NSE, where the equity shares are listed.
XVII. NOMINATION FACILITY
Individual shareholders holding physical shares can nominate any person for the shares held by them. This will save the nominee from going through the lengthy process for getting the shares later on transmitted to his/her name. For further details, shareholders may write to the RTA of the Company.
XX. DEMATERIALISATION OF SHARES AND LIQUIDITY.
The Securities and Exchange Board of India (SEBI) has included Company's scrip in compulsory demat settlement for all type of investors. Thus, the dealing in Company's equity shares can be in demat form only. To facilitate holding and trading of securities in electronic form, your Company has established connectivity with both the Depositories i.e. National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL). The investors have an option to dematerialise their equity shares with either of the Depositories. As on date, 95.17% of the total equity capital of the Company have been dematerialised.
XXI. OUTSTANDING GDRs/ADRs/WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATE AND LIKELY IMPACT ON EQUITY
The Company does not have any outstanding GDRs/ADRs/Warrants or any Convertible Instruments which is likely to have any impact on the equity of the Company.
XXII. PLANT LOCATIONS :
373, Industrial Area-A, Ludhiana
427, Industrial Area-A, Ludhiana
Dhandari Kalan, G.T. Road, Ludhiana
Village Simrai, Mandideep, Distt. Raisen (M.P.)
Village Lalru and Lehli, Distt. S.A.S. Nagar (Pb.)
Village Jalalpur, Distt. S.A.S. Nagar (PB.)
Village Jodhan, Distt. Ludhiana
Village Jitwal Kalan, Tehsil Malerkotla, Distt. Sangrur
XXIII. Address for Correspondence :
NAHAR TOWER 373, Industrial Area-A, Ludhiana - 141 003 (Pb.) Phone No. : 0161-2665000
Fax No. : 0161-2601956, 2222942
E-mail address : firstname.lastname@example.org
Website : www.owmnahar.com
XXIV. CEO/CFO CERTIFICATION
As required under Clause 49 of the Listing Agreement, a Certificate duly signed by Managing Director and Chief Financial Officer was placed at the meeting of Board of Directors held on 30.05.2015.
XXV. SECRETARIAL AUDIT FOR RECONCILIATION OF CAPITAL
The Securities and Exchange Board of India has directed vide Circular No.D&CC/FITTC/CIR-16/2002 dated 31st December, 2002 that all issuer companies shall submit a certificate of capital integrity, reconciling the total share held in both the depositories, viz. NSDL and CDSL and in physical form with the total issued/paid-up capital. The said certificate duly certified by a practicing Company Secretary is submitted to the Stock Exchanges where the securities of the Company are listed within 30 days of the end of the each quarter.
FOR AND ON BEHALF OF THE BOARD
JAWAHAR LAL OSWAL
DATED: 5th August, 2015