You are here » Home » Companies » Company Overview » Balrampur Chini Mills Ltd

Balrampur Chini Mills Ltd.

BSE: 500038 Sector: Agri and agri inputs
NSE: BALRAMCHIN ISIN Code: INE119A01028
BSE LIVE 15:45 | 02 Dec 118.55 -2.35
(-1.94%)
OPEN

120.90

HIGH

120.90

LOW

118.10

NSE LIVE 15:49 | 02 Dec 118.65 -2.35
(-1.94%)
OPEN

120.40

HIGH

120.75

LOW

118.10

OPEN 120.90
PREVIOUS CLOSE 120.90
VOLUME 60840
52-Week high 138.00
52-Week low 68.00
P/E 5.15
Mkt Cap.(Rs cr) 2904.48
Buy Price 118.55
Buy Qty 99.00
Sell Price 0.00
Sell Qty 0.00
OPEN 120.90
CLOSE 120.90
VOLUME 60840
52-Week high 138.00
52-Week low 68.00
P/E 5.15
Mkt Cap.(Rs cr) 2904.48
Buy Price 118.55
Buy Qty 99.00
Sell Price 0.00
Sell Qty 0.00

Balrampur Chini Mills Ltd. (BALRAMCHIN) - Director Report

Company director report

For the year ended 31st March 2016

YOUR DIRECTORS HAVE PLEASURE IN PRESENTING THEIR REPORT AS A PART OF THE 40TH ANNUALREPORT ALONG WITH THE AUDITED ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31ST MARCH 2016.

Financial Results

The financial results of the Company are summarized below:

[Rs. in Lacs]

Standalone Consolidated
Particulars 2015-16 2014-15 2015-16 2014-15
Revenue from Operations (Gross) 287407.48 309321.02 287407.48 309321.02
Profit before finance costs tax depreciation and amortisation and exceptional items 46386.76 14153.25 46384.06 14163.75
Less : Finance costs 7559.66 10209.23 7559.66 10209.23
Less : Depreciation and amortization expense 11010.52 11560.32 11019.71 11591.99
Profit / (Loss) before Tax 27816.58 (7616.30) 27804.69 (7637.47)
Less: Exceptional Items 17310.41 - 17310.41 -
Less : Tax expense/(write back) 564.44 (1842.86) 564.44 (1842.86)
Net Profit/(Loss) after Tax 9941.73 (5773.44) 9929.84 (5794.61)

Dividend

Your Directors have not recommended any dividend for the year ended 31st March 2016in view of the restrictions under Section 123 of the Companies Act 2013 (the Act) asamended by the Companies (Amendment) Act 2015 becoming effective from 29th May 2015 byvirtue of which no company can declare dividend unless carried over previous losses anddepreciation not provided in previous year or years are set o3 against profit of thecompany for the current year.

Operations

The operational data of the Company for the last two sugar seasons and financial yearsare as under:

Parameters Season 2015-16 Season 2014-15 Financial year ended 31.3.16 Financial year ended 31.3.15
Sugarcane crushed (in lac Qtls) 703.87 772.04 742.56 805.69
Sugar produced (in lac Qtls) 78.35 75.80 82.15 79.19
Recovery (Percent) 11.13 9.82 11.06 9.83

A detailed analysis of the Company’s operations future expectations and businessenvironment has been given in the Management Discussion & Analysis Report which formspart of this Report.

Performance & Outlook

The Company registered a gross turnover of C287407 Lacs for the year ended 31st March2016 as against C309321 Lacs for the year ended 31st March 2015 - a reduction of 7%primarily on account of lower sugar realizations. The sugar recovery increased to 11.06%in the financial year ended 31st March 2016 as compared to 9.83% in the correspondingprevious year. Distillery and Cogeneration divisions performed well and helped in postinga positive bottom-line this year. The Company earned a net profit of C9942 Lacs as againsta net loss of C5773 Lacs in the previous year.

The financial year began with a surplus stock with mills causing the sugar prices totouch a three-year low of C23000/MT by August 2015. With the global sugar-surplusscenario and muted international prices the chances of any improvement in domestic sugarprices seemed distant.

Finally at that depressing point the End of the tunnel was found.

The Govt. of India stepped in at the right time and announced a slew of measures with aview to

• Reduce the surplus stock of sugar

• Boost the price sentiments in the domestic market

• Clear cane arrears worth about C14000 Crores to farmers (the Govt. of Indiaannounced interest free loans).

In September 2015 the Hon’ble Ministry of Consumer affairs Food & PublicDistribution allocated a target of 4 Million Tonnes of sugar as Minimum Indicative ExportQuota (MIEQ) amongst 570 sugar mills for sugar season 2015-16 and directed the mills todischarge their export obligations accordingly. Subsequently in Early December thegovernment notified a production subsidy of C4.50 per quintal of cane crushed to offsetthe cane cost of millers. The eligibility of production subsidy was subject to a minimum80% export and ethanol blending targets.

Meanwhile the production failure across the Globe led the markets to revise the sugarstock positions from surplus to deficit and from a depressed 11 to 12 cents per poundrange prevalent in late September 2015 the international raw sugar prices graduallyrevived to 14.77 cents in early December 2015 and to around 16.50 cents by March 2016.Improvement in global prices helped the Indian Mills to partially discharge their exportobligations under MIEQ thereby reducing surplus stock in the country.

The sugar production in the country for the sugar season 2015-16 is at 25.2 milliontonnes against the estimates of 26 million tonnes. With an approximate carry forward stockof 9.0 million tonnes from previous season and estimated domestic consumption of 25.5million tonnes and exports of around 1.6 million tonnes during the season 2015-16 a carryforward stock of around 7.1 million tonnes is estimated as on 1st October 2016.

At present the cane acreage data for season 2016-17 is not available. However withreports on lower plantation in the State of Maharashtra and deficit rainfall in thepreceding two years the country’s sugar production in 2016-17 is expected to belower than 2015-16.

Going forward the country’s demand supply dynamics is expected to keep the pricesfirm.

During the year the prices of power alcohol and ethanol remained remunerative drivenby healthy demand. With the focus of the Government on the Ethanol Blending Programme(EBP) and the new fixed pricing mechanism for ethanol supplied to OMCs and removal ofcentral excise duty of 12.5% the profitability of the industry as a whole is expected tofurther stabilize in the next season.

The average realization per unit of power increased from C4.23 per unit in 2014-15 toC4.77 per unit in 2015-16 primarily due to upward revision of power tari3 in the month ofJanuary 2015 as well as on account of normal annual escalation of 2 (two) percent.

Performance of Business Segments

Sugar

Your Company is glad to report its highest ever recovery of 11.13% as against 9.82% inprevious season due to varietal change and ideal weather conditions throughout thecrushing season. The Company initiated stringent processes and quality control measures inprocuring clean cane improving varietal balance and inculcating better agriculturalpractices. The Company’s aggregate sugarcane crushing was lower at 703.87 lacquintals during the season 2015-16 as against 772.04 lac quintals in season 2014-15.During the year the Company sold 80.70 lac quintals of sugar at an average realisation ofC27.06/kg as against 81.45 lac quintals at an average realisation of C29.40/kg in thecorresponding year.

The Board in its meeting held on 27th May 2015 approved the closure of its sugar unitat Khalilabad subject to fulfillment of necessary formalities and compliance. The closureof the said unit does not have any significant impact on sales of the Company as the saidunit’s contribution in the overall sales of the Company constituted only 1.68% forthe year ended 31st March 2015. Further the net fixed assets of the said unit as at 31stMarch 2015 constituted only 2.33% of the total net fixed assets of the Company as on thatdate. However for the year ended 31st March 2015 loss before interest and tax ofC1200.72 Lacs of the said unit constituted 4.31% of the loss of the sugar segment for theyear ended 31st March 2015.

Owing to the huge uncertainity regarding the receipt of the Company’s claim underthe New Sugar Industry Promotion Policy 2004 (SIPP) with respect to reimbursements theCompany discontinued the accounting for the same w.e.f. 1st April 2012. Since nomeaningful progress has been made in last four years in the said matter your directorshave proposed to write-o3 an amount of C16900.57 Lacs on account of the Company’sclaim of reimbursements which was currently lying as incentive receivables under the head"other non-current assets" in line with a legal advise received in this matter.

Distillery

The distillery performance was satisfactory as the Company produced 705.55 lac BLduring 2015-16 as against 699.03 lac BL during the previous year. Ethanol productionconstituted 87.38% of the Distillery production in the current year as against 46.55%during the previous year. The average realization per BL stood at C40.41 as against C37.40during the previous year. Further the Company has successfully commissioned incineratorboilers at its distillery - Balrampur in view of prescribed pollution guidelines toachieve Zero Liquid Discharge (ZLD) of efluent waste on 10th February 2016. The otherprojects at Mankapur and Babhnan are under construction and would be completed during theongoing year. This would enable the Company to run its distilleries for higher number ofdays every year.

Cogeneration

The performance of the cogeneration business of the Company was as per expectations.The total power generated stood at 7469.14 lac units as against 8294.86 lac units in theprevious year. Power export to Uttar Pradesh Power Corporation Limited stood at 5307.41lac units as against 6168.10 lac units in the previous year and the total value of powerexported to the grid was C25351.10 Lacs as against C26130.31 Lacs in the previous year.The Company also sold 1.78 lac Renewable Energy Certificates during the year resultinginto gross proceeds of C2670.00 Lacs.

Organic Manure

The performance of the organic manure division was satisfactory during the year underreview.

Policies relating to sugar industry

For sugar season 2015-16 the salient features of the policies relating to sugarindustry are as under:

• The FRP (Fair & Remunerative Price) for sugarcane was fixed at C230 perquintal linked to a basic recovery of 9.50% subject to a premium of C2.42 per quintal forevery 0.1% increase in recovery above that level.

• The Government of Uttar Pradesh maintained State Advised Price (SAP) forsugarcane for season 2015-16 in line with the previous season. In view of the situationprevailing in the Industry at the time of announcement of cane price the Government ofUttar Pradesh also decided the following:

(i) The cane price of C275 per quintal for rejected variety of sugarcane C280 perquintal for normal variety of sugarcane and C290 per quintal for early variety ofsugarcane would be paid to farmers in two installments. The first installment of C230 perquintal would be paid within 14 days of purchase and the balance amount would be paidwithin three months of closure of crushing for the sugar season 2015-16.

(ii) In addition to the above the State Government also announced the sugarcanesubsidy of C35 per quintal of cane which included concessions of C11.70 per quintal ofsugarcane covering the following heads:

Waiver of Entry Tax on sugar C2.80 per quintal
Waiver of cane purchase tax C2.00 per quintal
Reimbursement of Society Commission C6.90 per quintal
Total D11.70 per quintal

The balance subsidy amount of C23.30 (C35.00 – 11.70) per quintal of sugarcanewould be shared between the State Government and the Millers as per the decision of theSpecial Committee to be formed by the Government under the chairmanship of theHon’ble Chief Secretary. The sharing mechanism would be determined by the Committeebased on prices of sugar molasses bagasse pressmud and would also be based on recoveryof the said products.

(iii) Subsequently the State Government reduced the rate of society commission for thesugar season 2015-16 as mentioned above from C6.90 per quintal of sugarcane to C3.00 perquintal of sugarcane thus restricting the concessions also at C3.00 per quintal from theearlier announced rate of C6.90 per quintal of sugarcane.

The policies / schemes announced by the Central Government are summarised as under:

• Soft loan aggregating to C6000 Crores during the year in order to clearsugarcane dues of sugar season 2014-15. The Government will bear interest burden upto 10%simple interest or actual rate of interest charged by banks whichever is less for amaximum of one year by way of interest subvention.

• MIEQ (Minimum Indicative Export Quota) of 4.00 million tones for the sugarseason 2015-16 which was pro-rated amongst all sugar factories with an objective to exportsurplus stock of sugar from the domestic market.

• Cane subsidy of C4.50 per quintal of sugarcane to be paid directly to farmersfor clearance of cane dues for the sugar season 2015-16 and cane price arrears of previoussugar season. Millers to be eligible for the said subsidy have to fulfil minimum of 80%of their export obligations under MIEQ and 80% of their ethanol contracts whereverdistillation capacities are installed.

• Sugar cess was increased from C24.00 per quintal to C124.00 per quintal witheffect from 1st February 2016 with an aim to create fund with the Sugar Development Fundto facilitate timely payment to farmers in case of exigencies.

• Waiver of excise duty of 12.50% on ethanol produced out of molasses from sugarseason 2015-16 and included the waiver component of exise duty within the fixed supplyprice of Ethnaol so as to assist the Millers for paying the farmers on time.

Subsidiary

The Company’s subsidiary Indo Gulf Industries Limited (IGIL) reported a net lossof C11.89 Lacs for the year ended 31st March 2016 as against a net profit of C382.39 Lacs(including exceptional profit of C362.25 Lacs) for the year ended 31st March 2015.

During the year under review IGIL issued and allotted 250000 Non-ConvertibleNon-Cumulative Redeemable Preference Shares of C100 each on Private Placement basis.Consequently the networth of IGIL has become positive.

Details of the matter relating to IGIL before the Hon’ble Board for Industrial andFinancial Reconstruction are given in the Annual Report 2015-16 of IGIL and the same isavailable on the website of the Company (www.chini.com) and also on the website of IGIL(www.indogulfind.com). Therefore the same is not repeated here for the sake of brevity.

The statement with respect to the Subsidiary Company has been separately annexed. Theaudited financial statements of the Company including the consolidated financialstatements and related information of the Company and the audited accounts of subsidiaryare available on the website of the Company at www.chini.com. The annual accounts of theSubsidiary Company and the related detailed information shall be made available to membersof the Company or of the Subsidiary Company seeking such information at any point of time.The annual accounts of the Subsidiary Company would be avaliable for inspection by membersat the Company’s registered office and at the registered office of the SubsidiaryCompany.

The Company has only one subsidiary as stated above. No body corporate has become orceased to be its subsidiary joint venture or associate company during the year.

Consolidated financial statements

In compliance with the provisions of the Act Accounting Standard - 21 and pursuant toRegulation 34(2)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (the Listing Regulations) the consolidated financial statements formspart of this Annual Report.

Share Capital

The Company issued and allotted 33500 equity shares of C1 each at a price of C45 pershare (including premium of C44 per share) upon the exercise of 33500 options under theEmployee Stock Option Scheme. Consequently the paid up share capital of the Companyincreased to C244949767 consisting of 244949767 equity shares of C1 each.

Employee Stock Option Scheme

The applicable disclosures as required under the SEBI Guidelines as amended and thedetails of stock options as at 31st March 2016 under the Employee Stock Option Scheme2005 are set out in the attached Annexure - I and forms part of this Report.

Credit rating

ICRA Limited - the Credit Rating Agency vide its letter dated 1st April 2016 revisedthe Credit Rating of the Company from [ICRA] A to [ICRA] A+ with respect to long-termloans and from [ICRA] A+ to [ICRA] A1+ with respect to short-term credit facilities.

Directors

The members of the Company at the 39th Annual General Meeting held on 12th August2015 appointed Smt. Novel S. Lavasa as an Independent Director for a term of 5 (five)consecutive years ending on 31st March 2019 in terms of Section 149 and other applicableprovisions of the Act.

Pursuant to Section 149 and other applicable provisions of the Act your Directors areseeking appointment of Shri Sakti Prasad Ghosh and Shri Sumit Mazumder as IndependentDirectors for a period of 5 (five) consecutive years who were appointed as AdditionalDirectors in the category of Independent Directors with effect from 4th November 2015 and21st May 2016 respectively. The terms and conditions of the above appointments arecontained in the Letter of Appointment issued to the respective directors and the same isalso hosted on the website of the Company. Notices in writing under Section 160 of the Acthave been received by the Company proposing the appointment of Shri Sakti Prasad Ghosh andShri Sumit Mazumder as Directors of the Company.

Smt. Meenakshi Saraogi stepped down from the post of Jt. Managing Director owing to herindifferent health and accordingly the Board of Directors noted the change in status ofher directorship from Executive Director to Non-Executive (Non-Independent) Directorw.e.f. 1st June 2015.

Further during the year under review Shri Kishor Shah informed the Company about hisdecision to relinquish his position as Director cum Chief Financial Officer of theCompany to allocate his time and commitment towards pursuing other professional ventures.Accordingly with effect from the close of business hours on 30th November 2015 heceased to be the Director cum Chief Financial Officer of the Company. Shri Kishor Shah hadbeen with the Company for over 22 years in various capacities and has made exceptionalcontributions to the growth of the Company.

The Board places on record its deep appreciation of Shri Shah’s contribution tothe Company spanning over two decades.

Director retiring by rotation

Smt. Meenakshi Saraogi retires from the Board by rotation and being eligible offersherself for reappointment.

Information regarding the directors seeking appointment/ reappointment

Resume and other information regarding the directors seeking appointment /reappointment as required by Regulation 36 of the Listing Regulations has been given inthe Notice convening the ensuing Annual General Meeting and in the Statement pursuant toSection 102 of the Act. The Board of Directors recommends the above appointment(s) /reappointment(s).

Other Information

Appointment of directors is made in accordance with the Criteria for Selection ofDirectors and persons in Senior Management as recommended by the Nomination &Remuneration Committee and approved by the Board of Directors.

Other details pertaining to the Directors their appointment / cessation during theyear under review and their remuneration are given in the Extract of Annual Return annexedhereto and forming part of this Report.

The Executive Directors (including Managing Director and Wholetime Director) of theCompany do not receive any remuneration or commission from the subsidiary company.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed both under the Act andRegulation 16 of the Listing Regulations.

Directors’ Responsibility Statement

The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 andRegulation 18 of the Listing Regulations in the preparation of the annual accounts for theyear ended 31st March 2016 and state that :

i. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any; ii.The Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;

iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

vi. There is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.

Particulars of Employees

The particulars of employees as required under Section 197(12) of the Act read withRules 5(1) 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are given in a separate annexure attached hereto and forms part ofthis Report as Annexure - II. During the year under review no complaint / case was filedpursuant to Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

Conservation of energy technology absorption and foreign exchange earnings and outgo

The particulars related to the conservation of energy technology absorption andforeign exchange earnings and outgo as required under Section 134(3)(m) of the Act aregiven in Annexure - III attached hereto and forms part of this Report.

Deposits

The Company has not accepted any deposit from the public and consequently there are nooutstanding deposits in terms of the Companies (Acceptance of Deposits) Rules 2014.

Key Managerial Personnel

Pursuant to the change in the position of Smt. Meenakshi Saraogi from Jt. ManagingDirector to Non-Executive (Non-Independent) Director she ceased to be a Key ManagerialPersonnel of the Company w.e.f. 31st May 2015.

Shri Santosh Kumar Agrawala retired as the Company Secretary of the Company at theclose of business hours on 3rd November 2015 after serving the Company for more than twodecades. The Board places on record its appreciation for the services rendered by ShriAgrawala during his tenure as the Company Secretary of the Company. Accordingly he ceasedto be a Key Managerial Personnel of the Company w.e.f. 3rd November 2015.

Based on the recommendations of the Nomination & Remuneration Committee of theBoard Shri Nitin Bagaria a qualified company secretary has been appointed by the Boardof Directors as the Company Secretary and Key Managerial Personnel of the Company w.e.f.4th November 2015.

Consequent to the resignation of Shri Kishor Shah as the Director cum CFO of theCompany he ceased to be a Key Managerial Personnel of the Company w.e.f. 30th November2015.

Based on the recommendations of the Nomination & Remuneration Committee and theAudit Committee of the Board Shri Pramod Patwari a qualified chartered accountant hasbeen appointed by the Board of Directors as the Chief Financial Officer of the Companyw.e.f. 16th December 2015.

Other details pertaining to the Key Managerial Personnel of the Company theirappointment / cessation during the year under review and their remuneration have beenprovided in the Extract of Annual Return annexed hereto and forming part of this Report.

Board Meetings

The Board met 5 (five) times during the financial year under review the details ofwhich are given in the Corporate Governance Report attached to this Report.

Audit Committee

Details of the composition the terms of reference number and dates of meetings heldattendance etc. pertaining to the Audit Committee constituted by the Board are given inthe Corporate Governance Report attached to this Report. All recommendations made by theAudit Committee during the year were accepted by the Board.

Whistleblower Policy

The Company has in place a Whistleblower Policy to deal with unethical behaviorvictimisation fraud and other grievances or concerns if any. The aforementionedwhistleblower policy is available on Company’s website at the following web-link:http://www.chini.com/Vigil_Mechanism_Policy.pdf.

Nomination & Remuneration Committee

Details of the composition the terms of reference number and dates of meetings heldattendance etc. pertaining to the Nomination & Remuneration Committee constituted bythe Board are given in the Corporate Governance Report attached to this Report.

Policy on Selection of Directors and Remuneration

The Policy on Selection of Directors and Remuneration Policy is annexed as Annexure -IV.

Board evaluation

Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations theBoard has carried out the evaluation of its own performance and that of its Committees aswell as evaluation of performance of the Directors individually. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Reportattached to this Report.

CSR Committee

Details of the composition the terms of reference number and dates of meetings heldattendance etc. pertaining to the CSR Committee constituted by the Board are given inthe Corporate Governance Report attached to this Report. The CSR policy approved by theBoard is available on Company’s website at the following web-link:http://www.chini.com/CSR_Policy.pdf.

The annual report on CSR activities is appended as Annexure - V.

Inter-corporate Loans and Investments

The Company has not lent out any money or made any investments or provided anyguarantees during the year under review. However the details of loan given or investmentmade before the financial year under review are provided in the notes to the financialstatements.

Related Party Transactions

There have been no materially-significant related party transactions made by theCompany with the promoters the directors the key managerial personnel which may be inconflict with the interest of the Company at large. The policy on related partytransactions as approved by the Board can be accessed on the Company’s website at thefollowing web-link: http://www.chini.com/Policy_on_materiality_of_Related_Party_Transactions.pdf

The details of related party transactions are set out in the notes to the financialstatements.

Risk Management Policy

The policy on risk assessment and minimisation procedures laid down by the Board isperiodically reviewed by the Audit Committee and the Board. The policy facilitates inidentification of risks at appropriate time and ensures necessary steps to be taken tomitigate the risk. Brief details of risks and concerns are given in the ManagementDiscussion and Analysis Report.

Extract of Annual Return

Extract of Annual Return in Form MGT- 9 is annexed to this Report as Annexure –VI.

Material Changes and Commitments

There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year of the Company i.e. 31st March 2016 andthe date of this Report.

Significant and Material Orders

There are no significant/ material orders passed by the Regulators / Courts / Tribunalswhich would impact the going concern status of the Company and its future operations.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to thefinancial statements. During the year such controls were reviewed and no reportablematerial weakness was observed.

Corporate Governance

In terms of the provisions of Regulation 34(3) of the Listing Regulations theManagement Discussion and Analysis the Corporate Governance Report and the Certificate onthe compliance of conditions of Corporate Governance forms part of the Annual Report andare given separately as Annexure - VII.

Auditors

Statutory Auditors and its Audit Report

M/s. G. P. Agrawal & Co. Chartered Accountants Auditors of your Company retireand being eligible offers themselves for reappointment. The notes on accounts referred toin the Auditors’ Report are self-explanatory and therefore do not call for anyfurther explanations/comments.

Secretarial Auditors and its Audit Report

Pursuant to the provisions of Section 204 of the Act the Company has appointed M/s.MKB & Associates Company Secretaries to undertake the secretarial audit of theCompany for the financial year 2015-16. The Secretarial Audit Report for the financialyear 2015-16 is attached as Annexure - VIII and forms part of this Report. The SecretarialAudit Report does not contain any qualification reservation or adverse remark ordisclaimer.

Cost Auditors and its Audit Report

The cost auditors (M/s. N. Radhakrishnan & Co. Cost Accountants) appointed by theBoard have submitted the Cost Audit Report within the time limit prescribed under the Actand Rules made thereunder.

During the year under review pursuant to Section 148 of the Act read with theCompanies (Cost Records and Audit) Rules 2014 (as amended) the Board appointed M/s. N.Radhakrishnan & Co. Cost Accountants to conduct cost audit of the Company relatingto sugar (including industrial alcohol) and electricity for the financial year ended 31stMarch 2016.

On the date of this Report your directors have on the recommendation of the AuditCommittee appointed M/s. N. Radhakrishnan & Co. Cost Accountants as the CostAuditors of the Company for the financial year 2016-17. As required under the Act aresolution seeking ratification for the remuneration payable to the Cost Auditors formspart of the Notice convening the ensuing Annual General Meeting.

Annexures forming part of this Report

The Annexures referred to in this Report and other information which are required to bedisclosed are annexed herewith and forms part of this Report :

Annexure Particulars
I Details of Employees Stock Option Scheme
II Particulars of Employees
III Particulars of Conservation of Energy Technology Absorption and Foreign Exchange earnings and Outgo
IV Policy on selection of directors and Remuneration Policy
V Annual Report on CSR activities
VI Extracts of the Annual Return as per Form MGT-9
VII Corporate Governance Report and Management Discussion & Analysis
VIII Secretarial Audit Report

Appreciation

Your Board of Directors are thankful to various stakeholders – the CentralGovernment the Government of Uttar Pradesh shareholders customers dealers State Bankof India HDFC Bank Punjab National Bank other banks and financial institutionsshareholders customers dealers and other business associates for the excellent supportreceived from them during the year under review. Your Directors also wish to place onrecord their deep sense of appreciation for the committed services by your Company’semployees.

For and on behalf of the Board of Directors
Sd/- Sd/-
Dr. Arvind Krishna Saxena Vivek Saraogi
Place: Kolkata Whole-time Director Managing Director
Date: 20th May 2016 DIN – 00846939 DIN – 00221419

Annexure I to the Board’s Report

Statement with respect to Employees Stock Option Scheme of the Company as at 31stMarch 2016:

a] Description:

Year 2005@ 2006# 2007 2008 2009
No. of options granted 622500 883000 995500 1280000 1464500
Date of grant 31.10.2005 27.11.2006 27.11.2007 25.11.2008 28.05.2009
Exercise price per share* C 45 C 45 C 45 C 45 C 45
(Each option is equivalent to one equity share having face value of C1 each of the Company) (revised from C 74.60) (revised from C 104.10) (revised from C 72.20) (revised from C 74.20)

@ 12000 options remaining unexercised at the end of exercise period as on 31.10.2014lapsed during the year 2014-15.

# 18500 options remaining unexercised at the end of exercise period as on 26.11.2015lapsed during the year 2015-16.

b] Pricing formula:

The exercise price of the options is determined by the Remuneration Committee on thedate the option is granted. It is based on the average daily closing market price of theequity shares of the Company during the preceding 26 weeks prior to the date of grant [onthe stock exchange it is traded most].

* The shareholders of the Company at their Extra-Ordinary General Meeting held on 25thMay 2009 has accorded approval to re-price the exercise price of the options granted inthe years 2005 2006 2007 & 2008 which have not been exercised and also the exerciseprice in respect of options to be granted for the year 2009 at 20% discount to the averagedaily closing market price of the Company’s shares on the stock exchange it istraded most during the preceding 26 weeks prior to the date of the meeting held tore-price the exercise price of the unexercised options and options granted for the year2009. Accordingly the Remuneration Committee on 28th May 2009 has re-priced the exerciseprice of the unexercised options for the years 2005 2006 2007 & 2008 and grantedstock options for the year 2009 at an exercise price of C45 per equity share.

c] Options vested: 4593000

d] Options exercised: 4334300 e] Total number of equity shares arising as a result ofexercise of options: 4334300 equity shares of C1 each.

f ] Options lapsed: 753000

g] Variation of terms of option: Re-pricing of options as stated above.

h] Money realised on exercise of option: C197460340/-i] Total no. of option inforce: 158200 j] Details of option granted to

i] Senior Managerial Personnel: Options have not been granted during the year ended31st March 2016.

ii] Any other employee who receives a grant in any one year of option amounting to 5%or more of option granted during that year – Nil.

iii] Identified employees who were granted option during any one year equal to orexceeding 1% of the issued capital (excluding outstanding warrants and conversions) of theCompany at the time of grant – Nil.

k] Diluted Earnings per share (EPS) pursuant to the issue of shares on exercise ofoptions calculated in accordance with Accounting Standard [AS] ‘Earnings PerShare’ – C4.06.

For and on behalf of the Board of Directors
Sd/- Sd/-
Dr. Arvind Krishna Saxena Vivek Saraogi
Place: Kolkata Whole-time Director Managing Director
Date: 20th May 2016 DIN – 00846939 DIN – 00221419

Auditors’ Certificate as required under Clause 14 of the SEBI (Employees StockOption Scheme & Employee Stock Purchase Scheme) Guidelines 1999 read with Regulation13 of the SEBI (Share Based Employee Benefits) Regulations 2014

We have examined the books of account and other relevant records of Balrampur ChiniMills Ltd. having its registered office at ‘FMC Fortuna’ 2nd floor 234/3AA.J.C. Bose Road Kolkata – 700020 and based on the information and explanationsgiven to us we certify that in our opinion the Company has implemented the EmployeeStock Option Scheme in accordance with SEBI (Employees Stock Option Scheme & EmployeeStock Purchase Scheme) Guidelines 1999 read with the SEBI (Share Based Employee Benefits)Regulations 2014 and in accordance with the special resolution passed by the Company inthe Extra-ordinary General Meeting held on 8th September 2005 and 25th May 2009.

For G.P. Agrawal & Co.
Chartered Accountants
F.R.No. 302082E
Sd/-
(CA. Sunita Kedia)
Place: Kolkata Membership No. 60162
Date: 20th May 2016 Partner

Annexure II to the Board’s Report

Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 andRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014

I. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year 2015-16:

Name Designation Ratio
Shri Vivek Saraogi Managing Director 104:1
Dr. A. K. Saxena Wholetime Director 13:1
Smt. Meenakshi Saraogi Jt. MD upto 31.05.2015 and Non-Executive Director thereafter N.A. (Refer Note No. 1)
Shri Kishor Shah Director cum Chief Financial Officer (Resigned w.e.f. 30.11.2015) N.A. (Refer Note No. 1)

(Refer Note No. 3)

II. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer and Company Secretary in the financial year 2015-16:

Name Designation % increase in remuneration
Shri Vivek Saraogi Managing Director 1.83
Dr. A. K. Saxena Wholetime Director 8.81
Smt. Meenakshi Saraogi Not Applicable
Shri S. K. Agrawala (Refer Note No. 1 2 and 3)
Shri Nitin Bagaria
Shri Kishor Shah
Shri Pramod Patwari

III. The percentage increase in the median remuneration of employees in the financialyear 2015-16:

The percentage increase in the median remuneration of the employees is 8.50%.

IV. The number of permanent employees on the rolls of the Company:

There were 3113 number of permanent employees on the rolls of the Company as on 31stMarch 2016.

V. The explanation on the relationship between average increase in remuneration and theCompany performance:

Net sales during the year 2015-16 was C275667 Lacs as compared to C298698 Lacsduring 2014-15. Net profit for the year 2015-16 was C9942 Lacs as against a net loss ofC5773 Lacs in 2014-15. Increase in median remuneration of employees during the year was8.50%. The remuneration philosophy of the Company is to provide performance drivenremuneration with reference to external market norms and in relation to other positionswithin the Company keeping in mind the performance of the Company.

VI. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:

The Company earned a net profit of C9942 Lacs for the financial year 2015-16 ascompared to a net loss of C5773 Lacs in the previous year whereas the salary of ShriVivek Saraogi increased marginally by 1.83%.

All the other Key Managerial Personnel were employed for part of the year thereforethe comparison against the performance of the Company is not provided.

VII. Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer:

Particulars As on 31st March 2016 As on 31st March 2015
NSE 107.85 49.55
Closing Price – (C)
BSE 107.65 49.45
NSE 264178 121356
Market Capitalisation (Rs. in Lacs)
BSE 263688 121111
NSE 26.56 Times N.A.
P/E Ratio (Considering Standalone Earnings) BSE 26.51 Times (The EPS for the year 2014-15 was negative)
IPO Price (in 1978-79) (Adjusted) (C) 1 1
Percentage increase (after considering bonus issues and sub-division) in the market quotations in comparison to the IPO Price (Adjusted) 355805% 163420%

VIII. Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year – 3.18%

Percentile increase in the managerial remuneration – 5.32%

Justification – The above percentile increase in the managerial remuneration isbased on the salary of those managerial persons who have served for the full year.Remuneration of managerial persons who were employed for part of the year has not beenconsidered. Therefore the correlation will not be visible in the salaries of employeesother than the managerial personnel and in the managerial remuneration hence nojustification is deemed necessary.

IX. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the Company:

Please refer to Point no. VI above.

X. The key parameters for any variable component of remuneration availed by thedirectors:

The Managing Director Jt. Managing Director and Director cum CFO are entitled toreceive profit based annual commission. The Non-Executive Directors are entitled to beremunerated by way of annual commission based on profit of the Company. The Non-ExecutiveDirectors are also entitled to receive sitting fees for attending each meeting of theBoard and its committees.

Any review of the remuneration to Executive Directors and Non-Executive Directors shallbe on the basis of performance evaluation of directors and as per recommendation of theNomination & Remuneration Committee.

The commission to Executive Directors and commission and sitting fees to Non-ExecutiveDirectors are subject to provisions of the Companies Act 2013 including prescribed rulesand schedules thereunder and the Listing Regulations.

XI. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year:

None of the employees of the Company received remuneration in excess of the highestpaid director during the year.

XII. Affirmation that the remuneration is as per the remuneration policy of theCompany:

It is hereby affirmed that the remuneration paid during the year 2015-16 is as per theRemuneration Policy of the Company.

Notes: 1. Smt. Meenakshi Saraogi ceased to be the Jt. Managing Director and Shri KishorShah ceased to be the Director cum Chief Financial Officer of the Company with effect from31st May 2015 and 30th November 2015 respectively and therefore the calculation of theratio of remuneration and percentage increase in remuneration is not provided.

2. Shri S. K. Agrawala ceased to be the Company Secretary of the Company with effectfrom 3rd November 2015 Shri Pramod Patwari (Chief Financial Officer) and Shri NitinBagaria (Company Secretary) were appointed w.e.f. 16th December 2015 and 4th November2015 respectively and therefore percentage increase in remuneration is not provided.

3. The Non-Executive Directors of the Company are entitled for sitting fee andcommission as per the statutory provisions and within the limits approved by theshareholders. The details of remuneration of Non-Executive Directors are provided in theReport on Corporate Governance and is governed by the Remuneration Policy of the Companyas provided in the Annual Report. In view of this the calculation of the ratio ofremuneration and percentage increase in remuneration of Non-Executive Directors would notbe meaningful and hence not provided.

4. Permanent employees on the rolls of the Company does not include Badli WorkersSeasonal Retainers Advisors Trainees / Apprentice etc.

STATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 197(12) OF THECOMPANIES ACT 2013 READ WITH RULE 5(2) AND (3) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

Name Designation Nature of duties Remuneration (D) Qualification and experience (years) Age (years) Date of commencement of employment Last employer designation
Employed throughout the financial year
Shri Vivek Saraogi Managing Director 17214496 B. Com (Hons.) (28) 50 3rd July 1987 None
Shri Krishana Pal Singh Group Head (Operations) 6960589 Diploma in Mech. Engineering (38) 59 16th September 2002 Ghaghara Sugar Ltd. D.G.M. (Engg.)
Employed for a part of the financial year
Smt. Meenakshi Saraogi Jt. Managing Director upto 31st May 2015 2848036 B.A. (33) 72 1st October 1982 None
Shri Kishor Shah Director cum Chief Financial Officer upto 30th November 2015 4867608 Chartered Accountant (28) 52 24th January 1994 Independent Consultancy
Shri Santosh Kumar Agrawala Company Secretary upto 3rd November 2015 4959371 B.Com (Hons) AASM FCMA FCS (40) 61 1st January 1995 Birla Cotton Spg. & Wvg. Mills Ltd. Secretary

Notes:

1. Remuneration includes salary company’s contributions to provident fund bonusallowances and monetary value of perquisites. However provision for gratuity includingsettlements during the year have been excluded.

2. Except the appointment of directors all appointments are non-contractual andterminable by notice on either side.

3. No employee is a relative of any director except Shri Vivek Saraogi and Smt.Meenakshi Saraogi who are related to each other.

4. None of the employees are covered under Rule 5(2)(iii) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.

For and on behalf of the Board of Directors
Sd/- Sd/-
Dr. Arvind Krishna Saxena Vivek Saraogi
Place: Kolkata Whole-time Director Managing Director
Date: 20th May 2016 DIN – 00846939 DIN – 00221419

Annexure III to the Board’s Report

Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo required under the Companies (Accounts) Rules 2014

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy

The Company has taken various steps towards energy conservation. All new sugar plants(5 nos.) set up by the Company are greenfield sugar plants. The Company continues to givehigh priority to the conservation of energy on an ongoing basis. Some of the significantmeasures taken are:

a) Installation of Variable Frequency Drive (VFDs) at Boiler Plate type heat exchangerwith Cigar Cane Belt Coveyor;

b) Installation of high efficiency spreader stocker type travelling grateshigh-pressure boilers condensing cum extraction turbine variable frequency drives forfeed pumps compressors and fans heat recovery units in boiler feed water heatersdistributed control system for centralised efficient operation;

c) Installation of bigger size constant ratio mill with variable speed DC motor drivehaving full auto control hydraulic cane unloaders rotary screens juice flowstabilization system continuous sulphur burner high efficiency centrifugal pumpsfluidized bed sugar drier and sugar bag conveying system efficient and automaticcentrifugal machines continuous pans for B and C massecuites etc.;

d) DCS controlled operation at various stations to achieve maximum efficiency. Use ofcapacitors near motor to maintain the power factor;

e) Recycling of process water to conserve natural resources. Replacement ofconventional inefficient bulbs with efficient CFL and LED lights. Conserve energy byproviding timers at street lights & putting energy efficient motors.

f) Installation of LTEM (Low Temperature Evaporator Module) for waste heat recovery.

g) Change in Vapour Bleeding Systems for steam conservation.

The impact of above measures are expected to reduce the consumption of fuel and powersubstantially and consequently the cost of production.

(ii) The steps taken by the Company for utilising alternate sources of energy a) Mostof the sugar plants of the Company have bagasse based cogeneration power plants which isused for captive consumption and surplus being sold to the U.P. Power Corporation Ltd.

b) Recycling of process water to conserve natural resources.

c) Replacement of conventional inefficient sodium vapour & mercury vapour bulbswith efficient CFL and LED lights.

(iii) The capital investment on energy conservation equipments during the year 2015-16was D500 Lacs.

Apart from this the Company makes investments wherever required for conservation ofenergy. The Company has a continuous process to monitor and explore ways and means forconservation of energy.

(B) Technology absorption

(i) The Company carried on following sugarcane development activities during thefinancial year 2015-16: Distribution of new improved varieties of seeds; Rearing of speednurseries of new improved varieties for varietal replacement; Moist heat therapy toeradicate seed born diseases; Pest control measures to protect cane from diseases;Biological control laboratory for sugarcane pest management; Inter cropping of sugarcanefor multi crops to growers; Distribution of fertilisers and manures for healthydevelopment & growth of sugarcane.

Installation of soil testing laboratory including analysis of micronutrients; Ratooncrop management & gap filling helping increase yield and recovery;

(ii) Due to above efforts it is expected that higher yield of disease free cane willbe available to the Company resulting in higher returns to the Company and the canegrowers. Multi cropping also helps farmers to get more returns.

(iii) The Company has not imported any technology.

(iv) Expenditure incurred on Research & Development : Nil.

(C) Foreign Exchange Earnings and outgo

Year 2015-16 Year 2014-15
Foreign Exchange earned in terms of actual inflows Nil Nil
Foreign Exchange outgo in terms of actual outflows C44.87 Lacs C172.26 Lacs

 

For and on behalf of the Board of Directors
Sd/- Sd/-
Dr. Arvind Krishna Saxena Vivek Saraogi
Place: Kolkata Whole-time Director Managing Director
Date: 20th May 2016 DIN – 00846939 DIN – 00221419

Annexure IV to the Board’s Report

Remuneration Policy

Introduction – The Remuneration Policy is designed to attract motivate and retaintalented employees in a competitive market. The purpose of the remuneration policy are tomotivate employees to excel in their performance recognise their contribution retaintalent in the organisation reward merits and protect organisational stability &flexibility and create sustainable long term value for the shareholders. Therefore theCompany formulated the Remuneration Policy with the following objectives:

(i) Ensuring that the level and composition of remuneration is reasonable andsufficient to attract retain and motivate directors of the quality required to run theCompany successfully;

(ii) Ensuring that the relationship of remuneration to performance is clear and meetsappropriate performance benchmarks; and

(iii) Ensuring that the remuneration involves a balance between fixed and incentive payreflecting short and long-term performance objectives appropriate to the working of theCompany and its goals.

However occasions may arise where it is appropriate to act differently than set out inthis Policy in exceptional cases due to some extra-ordinary talent of the candidate andfor outstanding performance. The Remuneration Policy applies to the Company’sdirectors key managerial personnel and other employees.

Criteria for remuneration – The Remuneration Policy reflects balance between theinterests of Balrampur Chini main stakeholders as well as a balance between theCompany’s short-term and long-term strategy. As a result the structure of theremuneration package for the Managing Board and senior executives are designed to balanceshort-term operational performance with the medium and long-term objective of creatingsustainable value within the Company. The Company strives for a high performance in thefield of sustainability and aims to maintain a good balance between economic gain respectfor people and concern for the environment in line with the Balrampur Chini values andbusiness principles to ensure that highly skilled and qualified senior executives can beattracted and retained. The Company aims for a total remuneration level that is comparableto levels provided by other companies that are similar to Balrampur Chini in terms of sizeand complexity.

The following elements shall be considered for payment of remuneration to ExecutiveDirectors KMP and other employees: Industry Average Remuneration drawn by peersconsidering nature and volume of responsibilities Qualification Experience Immediateprevious position held in earlier organization & responsibilities occupiedresponsibilities shouldered in the Company contribution made in the Company anyachievements rewards or recognitions behavioural patterns and work ethics evaluation ofperformance etc.

Remuneration to Executive Directors & Non-Executive Directors – Theremuneration of the Executive Directors consists of salary and perquisites. The ManagingDirector Jt. Managing Director and Director cum CFO are also entitled to receive profitbased annual commission. The salary perquisites and the commission shall be recommendedby the Nomination & Remuneration Committee for approval by the Board of Directors.After approval from the Board of Directors shareholders’ approval will be sought.

The Non-Executive Directors shall be remunerated by way of annual commission based onprofit of the Company. The Non-Executive Directors shall also be entitled for sitting feesfor attending each Board of Directors meeting and committee meeting. The commission &sitting fees shall be recommended by the Nomination & Remuneration Committee forapproval by the Board of Directors. Thereafter shareholders’ approval shall besought for payment of commission to the Non-Executive Directors.

Any review of the remuneration to Executive Directors and Non-Executive Directors shallbe on the basis of performance evaluation of directors and as per recommendation of theNomination & Remuneration Committee.

The Salary perquisites and commission to Executive Directors and commission &sitting fees to Non-executive Directors shall be subject to provisions of the CompaniesAct 2013 including prescribed rules & schedules thereunder and the Listing Agrements.

Remuneration to KMP Senior Executives and other employees – In order to attractand retain managerial expertise the elements of the remuneration of the KMP & seniorexecutives are determined on the basis of the work they do and the value they create aswell as of the conditions in other similar companies. Each element of the remuneration hasbeen weighted in order to ensure a continuous positive development of the Company both inthe short and long-term as well as of the employees to enhance productivity.

Remuneration of employees largely consists of base remuneration perquisites bonusexgratia etc. The components of the total remuneration vary for different cadres/gradesare governed by industry pattern qualification and experience of the employeeresponsibilities handled by him individual performance among others. Employees/workersmay be granted advance/loan with or without interest in case of genuine needs like-medical education housing marriage or for any other genuine purpose subject to inconformity with the applicable laws and regulations as amended from time to time. Theremuneration to employees/workers shall also comply with the applicable regulations andpolicies of the respective Governments. As the factories of the Company are situated inthe State of Uttar Pradesh the remuneration to employees/workers there should be incompliance with the policies of the U.P. Govt. including Wage Board.

However the Company may give compensation in the form of reward or incentive to anyemployee for any outstanding or extraordinary performance by him which is over and abovethe benchmark set for him during any year.

Annual appraisal of performance of KMP senior executives and other employees shall bedone by the respective reporting authority/ head of the department in association with HRDepartment. Based on such performance evaluation any increase in remuneration shall bedone.

Long Term Incentive Employee Stock Option Scheme – Balrampur Chini had implementedEmployees Stock Option Scheme for the non-promoter executive director and employees of theCompany with the objective of aligning interests of the executive management and keyemployees with the long-term goals of the Company and its shareholders and also to attractand retain talent to align the interest of employees with those creating sustainableshareholder value. The stock options plan is long term for eight years after vesting timeof one year from the date of grant of options.

Review – The Nomination & Remuneration Committee shall review the RemunerationPolicy and shall recommend to the Board amendments to these Guidelines as it deemsappropriate.

Criteria for selection of Directors and persons in Senior Management

A. Introduction

This Policy sets out general guiding principles defining criteria for selection ofdirectors in the Board and persons in senior management to assist the Board of Directorsin performing its duties. However the Board should act according to its obligations underthe specific facts and circumstances it faces. It will ensure constitution of the Boardwith optimum combination of Executive and Non-Executive Directors including IndependentDirectors which possess diverse experience and expertise in strategic managementgovernance and provide long term vision and direction to the Company.

B. Selection and Composition of the Board

Board Membership Criteria & Diversity

The Board of Directors should be composed of individuals who have demonstratedsignificant achievements in business education the professions and/or public service.They should have requisite intelligence education and experience to make a significantcontribution to the deliberations of the Board of Directors in light of the Company’sbusiness. In addition the membership of the Board of Directors should bring a broad rangeof experiences to the Board.

The Nomination & Remuneration Committee will review annually the appropriateskills and characteristics of Board members in the context of the current structure of theBoard. This assessment should include issues of diversity age business qualificationsethics & integrity willingness to participate in Board matters and other criteriathat the Committee and Board find to be relevant at that point of time. A variety andbalance of skills background and experience is desirable.

The composition of the Board shall meet the conditions prescribed under the CompaniesAct 2013 and Clause 49 of the Listing Agreement. The proposed appointee shall possess thedirector identification number and meet the criteria as laid down in the Companies Act2013 and Clause 49 of the Listing Agreement.

Attributes

The overall ability and experience of individual Board candidates should determinetheir suitability. The following attributes may be considered as desirable in anycandidate for the Board of Directors:

Experience - A Board candidate should have extensive experience in businessadministration profession governance and/or public service. An ideal Board candidate mayhave had experience in more than one of these areas.

Education - Ideally it is desirable that a Board candidate should hold degree from arespected college or university. In some cases it is further desirable for the candidatealso to have earned a masters or acumen in governance & administration. However theseeducational criteria are not meant to exclude an exceptional candidate who does not meetthese educational criteria.

Personal - The Board candidate should be of the highest moral and ethical character.The candidate should exhibit independence objectivity and be capable of serving as arepresentative of the stakeholder.

Individual Characteristics - The Board candidate should have the personal qualities tobe able to make a substantial active contribution to Board deliberations. These qualitiesinclude intelligence self-assuredness high ethical standard inter-personal skillsindependence judgmental courage a willingness to ask the difficult questioncommunication skills and commitment.

Availability - The Board candidate must be willing to commit as well as havesufficient time available to discharge the duties of Board membership. The Board candidateshould not have any prohibited interlocking relationships.

Compatibility - The Board candidate should be able to develop a good workingrelationship with other Board members and contribute to the Board’s workingrelationship with the senior management of the Company.

Compliance - The Candidate should meet the compliance requirements prescribed under theCompanies Act 2013 Listing Agreement and other Rules & Regulations or standards setout by the Company.

Predominance of Independent Directors

Independence promotes integrity accountability and governance. The Board of Directorsshall comprise of requisite number of independent directors as prescribed under the law.

Not less than requisite number of directors shall consist of independent directors whomeet the criteria for independence as required under the Companies Act 2013 ListingAgreement and other prescribed Rules & Regulations applicable to the Company. Besidesthe Board will consider all relevant facts and circumstances in making a determination ofindependence.

Selection and Orientation of New Directors

The Nomination & Remuneration Committee shall identify candidates for the Board andrecommend them for appointment by Board and subsequently for approval by the shareholdersas prescribed under the law. The Board delegates the screening process to the Nomination& Remuneration

Committee with direct input from the Chairman of the Board or Managing Director or anyother Committee as may deem appropriate. Management working in conjunction with theCommittee shall develop an appropriate familiarisation program for new directors thatinclude background briefings meetings with senior management and visits to Companyfacilities etc.

Assessing Performance of Board and Committees

The Nomination & Remuneration Committee shall evaluate performance of each directorand report annually to the Board on the results of the assessment process. The performanceevaluation of Independent directors shall be done by the entire Board of Directors. TheIndependent directors in their meeting shall review the performance of non-independentdirectors and the Board as a whole. While assessing the performance the Board or theNomination & Remuneration Committee shall take into account attendance of directors inthe Board & Committee meetings performance of the business accomplishment oflong-term strategic objectives & their participation role & functioning ofvarious committees compliance and other matter as they may think fit. The purpose of theassessment is to increase the effectiveness of the Board.

C. Selection of Key Managerial Personnel (KMP)

Above criteria shall also apply for selection of Key Managerial Personnel (KMP)excepting those which are not applicable for persons in senior management. Whereappointment or performance of any KMP requires specific qualification or degree theperson should also possess that specific qualification or degree. Keeping self-up-to-datefor performing duties on issues and emerging trends is an important part ofresponsibilities. KMP must take reasonable steps to remain current in professionaldevelopment corporate governance and discharging duties & responsibilities.

The KMP shall meet the conditions prescribed under the Companies Act 2013 and otherRules & Regulations as may be applicable.

D. Review

The Nomination & Remuneration Committee may review this Policy periodically andsuggest revisions to the Board to ensure the policy serves its purpose and accuratelyreflects the sense of the Board and the Company.

(All the references to Listing Agreements be read as the Listing Regulations)

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard