REPORT CORPORATE GOVERNANCE REPORT
1.COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:
Your company is committed to the attainment of highest level of transparency, integrity, accountability and equity in all dealings with shareholders, employees, lenders, government and other business constituents in all dealings in pursuit of its overall organisational goals.
In pursuance of the above, the Board of directors has constituted committees to implement its policies and guidelines and has set up adequate review systems for exercising effective management control and ensuring compliance of laws. There is adequate representation of independent directors on the Board. We believe in timely and transparent disclosure of information.
Our focus on sustainable growth, productivity improvement, commitment to quality, self-discipline, value of time, safety in operations and total customers satisfaction is unrelenting. The company will continue its efforts towards raising the standards in Corporate Governance and will also review its systems and procedures constantly in pace with the changing economic environment from time to time as it feels that the Corporate Governance should be need based and is not seen only as an issue of compliance dictated by statutory requirements.
3.BOARD OF DIRECTORS :
(a) Size & Composition of Board
As on March 31, 2015 the Board of the Company had eight directors out of which five are independent non-executive directors. The Chairman of the Board is an Executive director. The Board is in conformity with clause 49 of listing agreement and the composition as on 31.03.2015 was as under:
As required under Section 149(3) of the Companies Act, 2013, Mrs. Radhika Gupta, a woman Director appointed as Independent Director on the Board.
None of the Directors on the Board is a Member on more than 1 0 Committees and Chairman of more than 5 Committees (as per Clause 49(I)(C)(ii)) across all the companies in which he is a Director. All the Directors have made the requisite disclosures regarding Committee positions held by them in other companies. The detail of the Composition of the Board, number of directorship and committee position held by each of the directors are given here under:
The Board meets at regular intervals to discuss and decide on business strategies / policies and review the financial performance of the Company The Board meetings are pre-scheduled and a tentative annual calendar of the Board is circulated to the Directors well in advance to facilitate the Directors to plan their schedules. The notice of each Board meeting is given to each director. The Company provides information as set out in Clause 49 of the Listing Agreement to the Board and Board Committees to the extent it is applicable and relevant. The Agenda along with the relevant notes and other material information are sent in advance separately to each director and in exceptional cases tabled at the meeting. This ensures timely and informed decisions by the Board.
1.Mr. Kapil Kumar Jain Mr. Kapil Kumar Jain, Chairman & Managing Director aged about 65 years (date of birth 12.08.1950) is graduate and has a vast experience of 42 years in managing the overall affairs of the company related to Policy Planning, Management, Administration and implementation etc.
2.Mr. Rahul Jain Mr. Rahul Jain, Non-executive Director, aged about 41 years (date of birth 04.10.1974) is a commerce graduate and has an experience of 19 years in Business and Industry. He is a business man having vast experience of Steel Industry.
3.Mr. Vikram Jain Mr. Vikram Jain, aged about 39 years (date of birth 01.07.1976), having degree in Bachelor of Business administration from Australia and has an experience of about 13 years in the Industry.
4.Mr. Rajesh Sharma Mr. Rajesh Sharma aged about 42 years (date of birth 23.1 1.1973) is a Professional Director on the Board of the Company. He is qualified Chartered Accountant, Company Secretary and Cost Accountant and having competent professional experience of 17 years in Accounts, Finance and Taxation etc.
5. Mr. Ashok Kumar Jain Mr. Ashok Kumar Jain aged about 64 years (date of birth 28.10.1951) is Law graduate and practicing as an Advocate. He has an experience of over 38 years in profession.
6. Mr. Ashwani Kumar Mr. Ashwani Kumar, aged about 60 years (date of birth 14.07.1955) is a practicing Chartered Accountant by profession and is a member of the Institute of Chartered Accountants of India. He has an experience of over 34 years in this profession.
7. Mr. Surinder Kumar Vig Mr. Surinder Kumar Vig aged about 65 years (date of birth 07.06.1950) is Law graduate and has been practicing as a Sales Tax Advocate at Ludhiana from last about 42 years.
8. Mrs. Radhika Gupta Mrs. Radhika Gupta (date of birth 23.08.1968) is a Woman Independent Director on the Board of the Company. She has a master degree and has a wide experience and expertise in Human Resource management.
4. COMMITTEES OF THE BOARD:
(A) Audit Committee: Composition:
Audit Committee of the Board of Directors ("the Audit Committee is entrusted with the responsibility to supervise the company's internal controls and financial reporting process. During the financial year 2014-15, the audit committee has been re-constituted two times as per Section 1 77 of the Companies Act, 201 3 and Clause 49 of the Listing Agreement. All members of the Audit Committee are financially literate and bring in expertise in the field of Finance, Taxation, Economics and Risk. The present re-constituted Audit Committee of the company is comprised of Mrs. Radhika Gupta (Chairman), Mr Ashwani Kumar, Mr. Surinder Kumar Vig and Mr. Ashok Kumar Jain as members. All these members are non-executive independent directors of the Company.
Meetings and Attendance:
The Audit Committee met four times during the financial year ended on March 31, 2015. The Company is in full compliance with the provisions of Clause 49 of the Listing Agreement The Committee met on 30.05.2014, 14.08.2014, 14.11.2014 and 14.02.2015, The attendance record of the directors at Audit Committee Meetings during the year ended March 31, 2015 alongwith Statutory Auditors and Internal Auditors as invitees is as under:
The Audit Committee inter-alia performs the functions of approving Annual Internal Audit Plan, reviews of financial reporting system, internal control systems, discussion on quarterly, half-yearly and annual financial results, interaction with Statutory and Internal Auditors, recommendation for appointment of Statutory and Cost auditors and their remuneration, recommendation for appointment of and remuneration of Internal Auditors, Review of Internal Audit reports, significant related party transactions. The Board has framed the Audit Committee Charter for the purpose of effective compliance of provisions of Section 1 77 of the Companies Act, 201 3 and Clause 49 of the Listing Agreement. The Audit Committee of the Board of Directors of the company inter-alia, provides assurance to the Board on the adequacy of the internal control system and financial disclosures.
(B) REMUNERATION AND NOMINATION COMMITTEE:
In compliance with Section 1 78 of the Companies Act, 2013, the Board has constituted the "Nomination and Remuneration Committee" comprising of the following members:
1.Mrs. Radhika Gupta, Chairman*
2.Mr. Ashwani Kumar, Member
3.Mr. Surinder Kumar Vig, Member
4.Mr. Rajesh Sharma, Chairman**
All these members are non-executive independent Directors of the Company. No meeting of Remuneration and Nomination Committee was held during the financial year 2014-2015. The objectives of constituting of Remuneration and Nomination Committee are as follow:
1.The Remuneration and Nomination Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
2.The Remuneration and Nomination Committee shall, while formulating the above policy shall ensure that-
(a)The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
(b)Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(c)Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.
(C)STAKEHOLDERS' RELATIONSHIP COMMITTEE:
Composition and Attendance:
In compliance with the provisions of Section 1 78 of the Companies Act, 201 3 and the Listing Agreement, the Board has renamed the existing "Shareholders'/Investors' Grievance Committee" as the "Shareholders Stakeholders' Relationship Committee".
This Committee is constituted under the chairmanship of Mr. Surinder Kumar Vig and other members being Mr. Kapil Kumar Jain, Mr. Ashwani Kumar and Mr. Rajesh Sharma. The compliance officer of this committee is Mr. Pawan Maggu. The objective of the Committee is to focus on the shareholders Grievance and to strengthen the investor relations.
The quorum for the meeting is two directors and the committee meets frequently to dispose off/attain investors' complaints/requests as well as for transfer etc. of shares. During the year ended 31st March, 2015, the company has received very few complaints/requests comprising of non-receipt of annual report, demat queries/requests and request for transfer/transmission/transposition and dematerialisation etc., which were successfully resolved. 15 (Fifteen) meetings of Stakeholders relationship committee were held on 05.05.2014, 12.05.2014, 02.06.2014, 23.06.2014, 30.06.2014, 21.07.2014, 28.07.2014, 27.10.2014, 01.12.2014, 08.12.2014, 15.12.2014, 22.12.2014, 09.03.2015, 16.03.2015 and 23.03.2015.
(D) CORPORATE SOCIAL RESPONSIBILITY- Mandatory Committee:
The terms of reference of the Corporate Social Responsibility Committee (CSR) broadly comprises:
•To prepare and implementation of CSR Policy and to make it more comprehensive so as to indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 201 3;
•To provide guidance on various CSR activities to be undertaken by the Company and to monitor its progress.
The composition of the Corporate Social Responsibility Committee as at March 31, 2015 is as under:
1.Sh. Kapil Kumar Jain, Chairman
2.Sh. Rahul Jain, Member
3.Sh. Surinder Kumar Vig, Member
During the year, there was 1 (One) committee meeting held on 14.08.2014 with presence of all members. An annual report on CSR activities is appended at the end of this report. (
E) RISK MANAGEMENT COMMITTEE:
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities.
This Committee is constituted under the chairmanship of Mr. Surinder Kumar Vig and other members being Mr. Ashok Kumar Jain and Mr. Ashwani Kumar. No meeting of Committee was held during the financial year 2014-20 l5.The objectives and scope of the Risk Management Committee broadly comprises:
• Oversight of risk management performed by the executive management;
•Reviewing the BRM policy and framework in line with local legal requirements and SEBI Guidelines;
•Reviewing risks and evaluate treatment including initiating mitigation actions and ownership as per a pre-defined cycle;
•Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.
•Within its overall scope as aforesaid, the Committee shall review risks trends, exposure, potential impact analysis and mitigation plan.
(F) INDEPENDENT DIRECTORS' MEETING:
During the year under review, the Independent Directors met on March 31, 2015, inter alia, to discuss:
•Evaluation of performance of Independent Directors and the Board of Directors as a whole;
•Evaluation of performance of Chairman of the Company, taking into account the views of the Executive and Non Executive Directors; and
•Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All the Independent Directors were present in the meeting. 5. POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION: The Remuneration and Nomination Committee has adopted a Charter which, inter alia, deals with the manner of selection of Board of Directors and Managing Director and their remuneration. This Policy is accordingly derived from the said Charter.
A)Criteria of selection of Non Executive Directors
a.The Non Executive Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.
b.In case of appointment of Independent Directors, the Remuneration and Nomination Committee shall satisfy itself with regard to the independent nature of the Directors vis-a-vis the Company so as to enable the Board to discharge its function and duties effectively.
c.The Remuneration and Nomination Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 of the Companies Act, 2013.
d.The Remuneration and Nomination Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director-
Qualification, expertise and experience of the Directors in their respective fields; Personal, Professional or business standing; and Diversity of the Board.
e.In case of re-appointment of Non Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.
B)Criteria for selection /appointment of Managing Director For the purpose of selection of the MD, the Remuneration and Nomination Committee shall identify persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board. The Committee will also ensure that the incumbent fulfills such other criteria with regard to age and other qualifications as laid down under the Companies Act, 201 3 or other applicable laws.
C)Remuneration for Managing Director
i.At the time of appointment or re-appointment, Managing Director shall be paid such remuneration as may be mutually agreed between the Company (which includes the Remuneration and Nomination Committee and the Board of Directors) and the Managing Director within the overall limits prescribed under the Companies Act, 201 3.
ii.The remuneration shall be subject to the approval of the Members of the Company in General Meeting.
iii.In determining the remuneration (including the fixed increment and performance bonus) the Remuneration and Nomination Committee shall ensure / consider the following:
a.the relationship of remuneration and performance benchmarks is clear;
b.balance between fixed and incentive pay reflecting short and long term performance objectives, appropriate to the working of the Company and its goals;
c.responsibility required to be shouldered by the Managing Director, the industry benchmarks and the current trends; and
d.the Company's performance vis-a-vis the annual budget achievement and individual performance. D) Remuneration Policy for the Senior Management Employees
I. In determining the remuneration of the Senior Management Employees (i.e. KMPs and Executive Committee Members) the Remuneration and Nomination Committee shall ensure / consider the following:
a.the relationship of remuneration and performance benchmark is clear;
b.the balance between fixed and incentive pay reflecting short and long term performance objectives, appropriate to the working of the Company and its goals;
c.the remuneration including annual increment is decided based on the criticality of the roles and responsibilities, the Company's performance vis-a-vis the annual budget achievement, individuals performance.
Pursuant to the provisions of the Companies Act, 201 3 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Remuneration and Nomination Committees.
A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.
7.TERMS OF APPOINTMENT & REMUNERATION OF MANAGING DIRECTOR:
The company pays remuneration to the Managing Director as approved by the members of the company in the general body meeting. The detail of remuneration paid to him during the year 2014-15 is given below:
The above appointment is on contractual basis. Non-executive independent directors have not been paid any remuneration during 2014-15.
Details of remuneration paid to the Directors are given in Form MGT - 9 in Annexure-II. 8. DISCLOSURES:
A.Related Party Transactions:-
All transactions entered into with related parties as defined under the Companies Act, 201 3 and Clause 49 of the Listing Agreement during the year were on an arm's length price basis and in the ordinary course of business. During the Financial Year 2014-15, the Company did not have any material pecuniary relationship or transactions with Independent and Non executive Directors.
In the preparation of financial statements, the Company has followed the Accounting Standards. The significant accounting policies which are applied have been set out in the Notes to Financial Statements. The Board has received disclosures from Promoters, Directors relating to material, financial and commercial transactions where they and/or their relatives have personal interest. There are no materially significant related party transactions which have potential conflict with the interest of the Company at large.
B. Compliances by the Company:-
a) During the last three years, no penalties or strictures have been imposed on the Company by the Stock Exchange or SEBI or any other statutory authorities on matters related to capital markets.
b) Company has not denied any personnel, access to Audit Committee for informing unethical or improper practice.
c) The Company has Complied with mandatory requirements of clause 49 of the Listing Agreement with the Stock Exchange and applicable and in force till on March 31, 2015.
d) During the period under review, there was no material significant transaction with the promoters, directors, management, their relatives etc. that may have potential conflict with the interest of the company at large.
e) The company has not issued any GDRs/ADRs/Warrants and there are no warrants or convertible instruments pending as on 31.03.2015.
C. Compliances with capital market regulators:-
The Company has complied with the requirements of Regulatory Authorities on capital markets including the requirements under the SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended and currently the company is placed under group "B" by BSE.
As per circular No. SEBI/CFD/DIL/CG/1/2008/08/04 dated April 08, 2008 issued by SEBI and amended clause 49 of listing agreement company make following disclosure:
Mr. Kapil Kumar Jain and Mr. Vikram Jain, the non-executive directors of the company are father and brother of Mr. Rahul Jain, Managing Director of the Company. Mr. Kapil Kumar Jain is the father of Mr. Vikram Jain.
9. CODE OF CON DUCT:
The Company had adopted the Code of Conduct for all the Board members and senior management personnel. Further all the Board members and senior management personnel (as per Clause 49 of the listing Agreement) have affirmed the compliance with the respective Code of Conduct. A declaration to this effect signed by the Managing Director and Chairman forms part of this report.
10. MEANS OF COMMUNICATION:
The Company communicates with the shareholders at large through its Annual report, publication of financial results in English and Vernacular Newspapers and by filing reports and returns with the statutory bodies like Stock Exchange and the Registrar of Companies.
The financial results and shareholding pattern of the company are also available at the Company's website viz. www.vallabhgroup.com
11. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) and (10) of the Companies Act,20l3 and Clause 49 of the Listing Agreement, the company has formulated the Whistle Blower policy for the vigil mechanism for Directors and employees to report the management about unethical behavior, fraud or violation of Company's code of conduct. The mechanism provides for adequate safeguard against the victimization of employees and Directors who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee in exceptional cases. None of the personnel of the company has been denied access to the audit committee.
12. PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view 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 & Head Compliance is responsible for implementation of the Code.
RESOLUTION PASSED DURING THE FINANCIAL YEAR 2014-15 BY POSTAL BALLOT:
2 (Two) resolutions under Section 180(1) (a) and 186 under the Companies Act, 201 3 were passed by Postal Ballot during the financial year 2014-15. 31 st Annual General Meeting:
Date and Time : Wednesday, the 30th September, 2015 - 1.30 PM.
Venue : AF 1 & 2, First Floor,2, Jaisav Place, 5006, Hamdard Marg, Hauz Qazi,Delhi- 110 006
Financial Calendar 2015-16
First Quarter Results : By middle of August, 2015
Second Quarter Results : By middle of November, 2015
Third Quarter Result : By middle of February, 2016
Fourth Quarter and audited : In the month of May, 2016
Annual Results 2015-16 Date of Book Closure: Thursday, the 24th September, 2015 to Wednesday, the 30th September, 2015 (both days inclusive)
vii)Dividend Payment Date: on or before 29th October, 2015.
viii)Listing : The company's shares are listed on the BSE Limited at Mumbai.
ix) Stock Code
Stock Exchange Code
(xi) Dematerialisation of Shares, Registrar & Transfer Agents & Share Transfer system:
The equity shares of the company are available for dematerialisation through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
The International Securities Identification Number (ISIN) is INE 458 E 01014.
M/s. Mas Services Limited, having its office at T-34, 2nd Floor, Okhla Industrial Area, Phase-II, New Delhi-1 10020 as Registrar and Share Transfer Agents (RTA) being a Common Agency for Physical and Electronic modes.
The dematerialised shares are directly transferred to the beneficiaries through the depositories. 6952064 equity shares comprising of 88.05% of the total equity shares of the company are in dematerialised form as on 31.03.201 5. Out of a total of 8238 shareholders 3066 shareholders representing 37.22% have got their shares dematerialised as on 31.03.2015.
The process of transfer/transmission/transposition etc. of equity shares in physical form including dispatch of the share certificates is completed by RTA within a period of 15 days if the documents are in order in all respects.
The Shareholders Grievance Committee specifically looks into the redressal of shareholders complaints like transfer of equity shares and related matters.
(xiv) Registrar for Demat and Share Transfer :
Mas Services Limited T-34, 2nd Floor, Okhla Industrial Area, Phase-II, New Delhi-110020 Phone No. : 011-26387281-83, Fax No. : 011-26387384, E-Mail : firstname.lastname@example.org
(xv) Investors Correspondence :
All queries of investors regarding the company's shares in physical form may be sent to the company at its Administrative office at GTT. Road, Village Pawa, Sahnewal, Ludhiana-141 120. (Phone No. : 0161-2511412) OR to the Registrar for physical/demat modes at their above noted address.
(xvi)Plant Locations of the company :
a)G.T. Road, Village Pawa, Sahnewal, Ludhiana-141 120. Phone No. : 0161-2511412,2511413
b)G.T. Road, Village Nandpur, Sahnewal, Ludhiana-141 120.
c)G.T. Road, Village Beopror, Teh. Rajpura, Distt. Patiala (Punjab) Phone No. : 01762-265700 14. SECRETARIAL AUDIT FOR RECONCILIATION OF CAPITAL :
As stipulated by SEBI, the statutory auditors of the company carry out Secretarial Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and report thereon is submitted to the Stock Exchange where shares of the Company are listed. The audit confirms that the total listed and paid-up capital is in agreement with the aggregate of the total number of shares in dematerialised form (held with NSDL and CDSL) and total number of shares in physical form.
As provided under Clause 49 of the Listing Agreement with the Stock Exchange, all Board members and Senior Management Personnel have affirmed compliance with Vardhman Industries Limited's Code of Business Conduct and Ethics for the year ended 31st March, 2015.
BY ORDER OF THE BOARD OF DIRECTORS
Sd/-(KAPIL KUMAR JAIN)
Place : Ludhiana
Date : 14.08.2015