CORPORATE GOVERNANCE REPORT
Corporate Governance assumes a great deal of importance in the business life of the Company. The Company's goal is to find creative and productive ways of delighting its stakeholders, i.e. investors, customers & associates etc while fulfilling the role of a responsible corporate representative committed to best practices. This section besides being in compliance of the mandatory Listing Agreement gives an insight into the process of functioning of the Company.
1. COMPANY'S PHILOSOPHY
•/ Total customer delight
•/ Competing with the best
•/ Total quality people
•/ Product quality a way of life
•/ Continued improvement through innovation & creativity
•/ State of Art Technology with ultra modern R&D facilities
•/ Respect of every VPL parivar member
•/ Achieving excellence through culture integration
•/ Change a way of life
•/ Act as responsible corporate citizen and discharge our social responsibilities
2. BOARD OF DIRECTORS
The Company is fully compliant with the Corporate Governance norms in terms of constitution of the Board of Directors ("the Board"). The Board of the Company is composed of eminent individuals from diverse fields. The Board consists 8 (Eight) Directors out of which 3 (Three) are Executive Directors and 5 (Five) are Non-Executive Directors including one women director. The half of the Board comprises Independent Directors.
b) Board Meetings
During the financial year under review, 5 (Five) Board Meetings were held on 30.05.2014, 12.08.2014, 11.11.2014, 06.02.2015 and 31.03.2015 and the gap between two meetings did not exceed one hundred twenty days.
c) Change in directorship
During the financial year 2014-15, Mrs. Rakhi Oswal was appointed as director of the Company w.e.f. 12.08.2014 being a woman director on the Board. Mr. Ajay Chaudhry, Dr. B. S. Bhatia, Mr. M. D. Kanitkar and Mr. Amit Jain were appointed as Independent Director for a period of five years upto 31.03.2019.
d) Meetings Procedure
The Company holds Board Meetings regularly. The directors are informed about the venue, date and time of meeting in advance in writing at their registered address/e-mail. Detailed agenda papers along with explanatory statements are circulated to the directors in advance. The Board has complete access to all information with the Company. All information stipulated in Clause 49 is regularly provided to the Board as a part of agenda papers alongwith the action taken report on the matters previously approved/discussed. Directors actively participate in the Board Meetings and contribute significantly by expressing their views, opinions and suggestions. Video Conferencing facilities are used to facilitate directors, who are traveling or present at other locations to participate in the meeting. Decisions are taken after proper and thorough discussion. The Board periodically reviews the compliance report of all laws applicable to the Company.
e) Training / Familiarisation programmes for Board Members
The Board members are provided with necessary documents/brochures, reports and internal policies enable them to familiarize with the Company's procedures and practices. Periodic presentations are made at the Board and Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved. Updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly circulated to the Directors.
The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at http://oswalgroup.com/investor_pdf/corporate_governance/Familiarzatio-Programmes-For-Independent-Directories.pdf
f) Remuneration of Directors
i) Executive Directors: The Company pays remuneration to Chairman & Managing Director and Executive Directors as approved by the Board of Directors and Members of the Company.
g) Independent Directors
Independent directors are non-executive directors as defined under Clause 49(II)(B)(1) of the Listing Agreements. The maximum tenure of the independent directors is in compliance with the Companies Act, 2013 ("Act"). All the Independent Directors have confirmed that they meet the criteria of independence as mentioned under clause 49 of the Listing Agreement and Section 149 of the Act. The terms and conditions of appointment of the independent directors are disclosed on the website of the Company.
During the year, a separate meeting of the independent directors was held on 27.12.2014 inter-alia to review the performance of non-independent directors and the board as a whole.
3. COMMITTEES OF THE BOARD
a) Audit Committee
The Company has an Audit Committee in terms of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, which comprises 3 Independent Directors i.e. Mr. Ajay Chaudhry, Mr. M. D. Kanitkar and Dr. B. S. Bhatia. Mr. Ajay Chaudhry is the Chairman of the Committee and the Company Secretary acts as the Secretary of the Committee. Statutory Auditors, Internal Auditors & Head of Corporate Finance Department are the permanent invitees to the Committee. The terms of reference of the Audit Committee is based on the role of the Audit Committee as mentioned in Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Committee met 5 (Five) times during the year on 30.05.2014, 05.07.2014, 12.08.2014, 11.11.2014 and 06.02.2015.
b) Stakeholders' Relationship Committee
The Company has a Stakeholders' Relationship Committee to look into the redressal of stakeholders complaints on various issues. The members of the Committee are Mr. Ajay Chaudhry, Mr. Ashok Kumar Oswal and Mr. Ashok Kumar Goyal. Mr. Ajay Chaudhry is the Chairman of the Committee. The Committee met once during the year on 30.05.2014 and Mr. Ajay Chaudhry & Mr. Ashok Kumar Oswal were present at the meeting.
The Company has not received any complaint from shareholders during the financial year 2014-15.
Mr. Sushil Sharma, Company Secretary, is Compliance Officer of the Company, may be contacted at 0161-2685301-05, 6629888, 6629990 and fax at 0161-6629988. As per Clause 47 of the Listing Agreement, Company has designated an E-mail Id exclusively for the purposes of registering complaints/queries of investors which is given below:
Designated E-mail Id : email@example.com
c) Nomination and Remuneration Committee
The Company has a Nomination and Remuneration Committee consisting of 3 Non- executive Independent Directors i.e. Mr. Ajay Chaudhry, Dr. B. S. Bhatia and Mr. Amit Jain. Mr. Ajay Chaudhry is the Chairman of the Committee. The Committee is empowered to decide, review and approve the remuneration packages including pension rights and compensation payments of Directors, KMP & other employees as per remuneration policy of the Company. The committee met once during the year on 06.02.2015 and all the members were present at the meeting.
The Nomination and Remuneration Committee at its meeting held on 06.02.2015 approved the Nomination and Remuneration Policy. The details of Nomination and Remuneration Policy and criteria for annual appraisal/evaluation of the Board, the Board Committee and the Directors are given below:
i) Selection criteria
To identify the person as director of the company, the committee shall consider the appropriate skills and experience, age limit, conflict of interest, independence of directors etc.
For the Senior Management Personnel, the candidate should have appropriate qualification, skills and experience for discharging the role. The qualification, skills and experience of each such position shall be defined in the job description, which will be maintained by HR function.
ii) Remuneration Policy
The remuneration of executive directors consisting of basic salary, perquisites, pension benefits and benefits in kind will be competitive with those in other comparable organizations so as to attract high caliber individuals with relevant experience. It will ensure that part of the remuneration of executive directors will be based on the financial performance of the group using predetermined targets so as to motive and reward successful business performance in the interest of shareholders.
Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) shall be paid such remuneration as recommend by the committee and approve by board from time to time. However, for all KMP's (except for the MD/WTD) and/or SMP or other employees, the Committee/Board may also authorize the person in charge of day-to-day affairs of the company to decide their remuneration based on their qualification, experience, expertise and their performance.
iii) Annual Evaluation by the Board
The evaluation framework for assessing the performance of Directors comprises of the following key areas: i). Participation in Board Meetings and Board Committee Meetings. ii). Quality of contribution to Board deliberations.
iii). Strategic perspectives or inputs regarding future growth of Company and its performance. iv). Providing perspectives and feedback going beyond information provided by the management. v). Commitment to shareholder and other stakeholder interests.
4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report has been included in this Annual Report.
5. CODE OF CONDUCT FOR BOARD OF DIRECTORS AND SENIOR MANAGEMENT
The Company's Board has laid down a Code of Conduct for all Board Members and Senior Management Personnel (SMP) of the Company. The Code of Conduct has been placed on the website of the Company i.e. www.oswalgroup.com. All Board Members & SMP have given their affirmations of compliance with the Code. A declaration to this effect signed by Chairman & Managing Director is enclosed and forms part of the Annual Report.
6. RISK MANAGEMENT
The Company has adopted a well defined procedure for risk management. The Risk Management Policy of the Company provides procedures for identification and mitigation of internal as well as external risks of the Company. The Company is having a Risk Management Committee consisting of directors and senior management functionaries within the organization. The Committee assesses the risks in various functional areas of the organization and defines the steps to minimize/mitigate those risks.
7. SUBSIDIARY COMPANIES
The Audit Committee reviews the significant issues including financial statements pertaining to subsidiary companies. The minutes of the subsidiary companies are placed before the Board of Directors of the Company and attention of the Directors is drawn to significant transactions and arrangements entered into by the subsidiary companies. The performance of its subsidiaries is also reviewed by the Board periodically. The Company does not have any material non-listed Indian subsidiary company. The Company has a policy for determining 'material subsidiaries' which is disclosed on its website at the following link
a) Details of Directors seeking appointment/re-appointment
The brief profile of the directors being appointed/re-appointed is given in this Annual Report, which forms part of the Corporate Governance Report.
c) Means of Communication
The Company communicates with the shareholders at large through its Annual Reports, placing the information on Company's website, publication of financial results, press releases in leading newspapers and by filing various reports and returns with the Statutory Bodies like Stock Exchanges, the Registrar of Companies and website of Ministry of Corporate Affairs. The financial results are published in prominent daily newspapers viz. Business Standard and Desh Sewak (Punjabi).
The financial results, annual report and shareholding pattern of the Company are also available on the Company's website viz. www.oswalgroup.com
a) Related Party Transactions: All related party transactions that were entered into during the financial year were on arm's length basis and in the ordinary course of business. All Related Party Transactions were placed before the Audit Committee for its approval. The Audit Committee has granted omnibus approval for Related Party transactions as per the provisions and restrictions contained in the Listing Agreement. There was no material/significant transaction with the directors or the management, their subsidiaries or relatives etc. that have any potential conflict with interest of the Company at large read with details of transactions as disclosed in Notes on Accounts annexed in the Balance Sheet as per Accounting Standard (AS) -18. The Board has approved a policy for related party transactions which has been uploaded on the Company's website at the following link. http://oswalgroup.com/investor_pdf/POLICY_ON_MATERIALITY%20_OF_AND_DEALING_WITH_RELATED_PARTY_TRANSACTIONS.pdf
b) Non-compliances/ Penalties: There has not been any non-compliance made by the Company in respect of which penalties or strictures were imposed by the Stock Exchanges or SEBI or any other Statutory Authority during the last three years.
c) Vigil Mechanism/Whistle Blower Policy: The Company promotes ethical behavior in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. The Company has a vigil mechanism/whistle blower policy wherein the employees are free to report violation of laws, rules, regulations or unethical conduct to their immediate supervisor or such other person as may be notified by the management to the workgroups. The confidentiality of person reporting violation is maintained and he is not subjected to any discriminatory practice. No person has been denied access to the chairman of Audit Committee. The vigil mechanism policy is available at Company's website.
d) Mandatory/ Non-Mandatory requirements: The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement. The Company has also implemented non mandatory requirements of Clause 49 regarding direct report by internal auditor to Audit Committee.
10. GENERAL SHAREHOLDERS INFORMATION
i) 35th Annual General Meeting
Date : Tuesday, 29th September, 2015
Time : 11:00 A.M.
Venue : Regd. Office: Vardhman Park, Chandigarh Road, Ludhiana - 141123
ii) Financial Year : 1st April to 31st March
iii) Financial Calendar 2015-2016 (Tentative)
First Quarter Results August, 2015
Second Quarter Results November, 2015
Third Quarter Results February, 2016
Annual Results May, 2016
iv) Dates of Book Closure :
23.09.2015 to 29.09.2015 (both days inclusive)
v) Listing of Securities
Sr. No. Description Stock Exchange Stock Code
1. Equity Shares
Bombay Stock Exchange Ltd (BSE)
25th Floor, P.J. Towers, Dalal Street, Mumbai-400 001
The National Stock Exchange of India Ltd (NSE)
"Exchange Plaza", Bandra-Kurla Complex, Bandra (E), Mumbai-400 051
2. Foreign Currency Convertible Bonds (FCCBs)
Singapore Exchange Securities Trading Ltd.
2, Shenton Way, # 19-00, SGX Centre 1 Singapore- 068804
The Company has duly paid the listing fees to BSE and NSE for the year 2015-2016.
vii) Registrar & Share Transfer Agent (RTA)
M/s Alankit Assignments Limited (Unit: Vardhman Polytex Limited)
1E/13, Alankit Heights, Jhandewalan Extension, New Delhi-110 055 Telephone No. : 011-42541234, 23541234, Fax No. 011-41543474 E-mail: firstname.lastname@example.org, Web Site: www.alankit.com
viii) Share Transfer System
The Company has a share transfer committee which meets on an average once in a fortnight. A list of valid transfers and objectionable cases received from RTA is placed before the Committee for its approval/confirmation. The share certificates are returned /dispatched to the shareholders by RTA after necessary endorsements normally within 15 days from the date of receipt. The delays, if any, are mostly due to notice given to seller for confirmation in case of difference in signatures and/or non receipt of copy of PAN.
The shares of the Company are traded on the Stock Exchanges compulsorily in demat form. The Company has participated as an issuer both with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The shareholders may operate through any of the depositories, based on tariffs, quality and range of services being offered by them. The International Securities Identification Number (ISIN) for equity shares is INE 835 A01011.
ix) Dematerialisation of Shares
As on 31st March, 2015, 90.27% of the paid up equity share capital comprising 2,01,20,937 shares were dematerialised against 88.97% comprising 1,76,32,801 shares as on 31st March, 2014.
xii) Outstanding GDRs/ADRs/Warrants
There are no outstanding GDRs/ ADRs/ Convertible Warrants. However, the Company is having outstanding 2% unsecured Foreign Currency Convertible Bonds (FCCBs) for the principal amount of USD 3.2 million.
Vardhman Polytex Limited,
Badal Road,Bathinda-151 005
Vinayak Textile Mills (Dyeing Unit)
D- 295/1, Phase VIII, Focal Point,Ludhiana-141 010
Vinayak Textile Mills (Spinning Unit)
D- 295/1, Phase VIII, Focal Point,Ludhiana-141 010
D- 295/1, Phase VIII, Focal Point,Ludhiana-141 010
Vardhman Polytex Limited,
Village Nangal Nihla/Upperla,Swarghat Road, Nalagarh -174 101(HP)
Chandigarh Road,Ludhiana-141 123
xiv) Address for correspondence
Shareholders should address their correspondence to the Company's Registrar & Transfer Agents at the address mentioned in point (vii).
Shareholders may also contact Mr. Sushil Sharma, Company Secretary and Compliance Officer at the Registered Office of the Company at Vardhman Park, Chandigarh Road, Ludhiana-141 123.
Tel : 0161-2685301-05, 6629888, 6629990 Fax : 0161-6629988
E-mail : email@example.com
Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participants (DP).
The unpaid/unclaimed dividend upto the financial year 2006-2007 has been transferred to Investor Education and Protection Fund (IEPF) of the Central Government. The members who have not claimed their dividend for the financial 2007-08 are requested to make their claim to the Company at the earliest.
The list of unpaid/unclaimed dividend pending for transfer to IEPF is available on the Company's website at www.oswalgroup.com
Green Initiative in Corporate Governance
Recognizing the 'Green Initiative' taken by the Ministry of Corporate Affairs ("MCA"), the Company opted and send the Notices, Annual Reports etc during previous year through electronic form to the members at their registered e-mail address provided to the depository participant/ Company/RTA.
11. AUDITOR'S CERTIFICATE ON COMPLIANCE
Certificate from the Statutory Auditors confirming compliance of Clause 49 is given in this Annual Report.