Bharat Bhushan Finance & Commodity Brokers Limited
The Directors of your Company take pleasure in presenting the 24thAnnualReport of your Company together with the Audited Statement of Accounts of the Company forthe financial year ended 31st March 2016.
Your Company's financial performance during the year 2015-16 as compared with that ofduring the previous year 2014-15 is summarized in the following table:
| || ||(Rs. In Lakhs) |
|Particulars ||2015-2016 ||2014-2015 |
|Total Income ||78.23 ||85.72 |
|Profit before depreciation & Tax ||51.66 ||53.27 |
|Depreciation ||0.16 ||0.91 |
|Profit Before Tax ||51.50 ||52.37 |
|Provision for Taxation ||8.58 ||9.91 |
|Profit After Tax ||42.92 ||42.45 |
|Balance Profit B/F from earlier Year ||294.45 ||280.77 |
|Profit available for appropriation ||337.37 ||323.22 |
|APPROPRIATION: || || |
|Transfer to Reserve Fund ||8.58 ||8.49 |
|Proposed Dividend ||16.90 ||16.90 |
|Provision for Dividend Tax ||3.44 ||3.38 |
|Profit C/F to Balance Sheet ||308.45 ||294.45 |
During the financial year 2015-16 the net Revenue from Operation was Rs. 64.29 Lakhsagainst Rs. 73.63 Lakhs in the previous year. Your Company has earned the Profit beforetax of Rs. 51.50 Lakhs as compared to Rs. 52.37 Lakhs in the previous year. Profit aftertax was Rs. 42.92 Lakhs against Rs.42.45 Lakhs for the last financial year.
CHANGE IN THE NATURE OF BUSINESS
There has been no significant changes in the nature of business of the Company duringthe Financial Year 2015-16.
DIVIDEND ON EQUITY SHARES
Your Director's are pleased to recommend a Dividend of Re.0.50 Paisa per equity share(5%) on the paid up equity share capital of the Company for the financial year ended 31stMarch 2016. The proposed dividend subject to approval of Shareholders in theensuing Annual General Meeting of the Companywould result in appropriation ofRs.1690200/- and Corporate Dividend Tax of Rs.344091/-. The dividend would be payableto all members whose names appear in the Register of Members as on the record date for thepurpose of dividend for the Financial Year 2015-16. Dividend if approved by shareholdersin Annual General Meeting will maintain the uninterrupted profit making dividend paymentrecord of the Company for the last 24 years.
The Register of Members and Share Transfer books shall remain closed from Thursday22nd September 2016 to Thursday 29thSeptember 2016 (both days inclusive).
Pursuant to the provision of Section 205A (5) of the Companies Act 1956 and Section125 of the Companies Act 2013 the relevant amount against the Final Dividend for thefinancial year 2008-09 which remains unpaid or unclaimed for a period of seven years shallbe transferred by the Company to the Investor Education and Protection Fund (IEPF) by 28thOctober 2016. Shareholders are requested to please send their outdated final dividendwarrants issued by the Company for the financial year 2008-09 to the Company on or before28th October 2016 enabling it to issue demand drafts to the shareholders from whom therequisite requests shall be received otherwise the Company would have no other option butto transfer this amount to the IEPF by 28th October 2016 which is the last date fortransfer of the said amount. No further correspondence would be entertained after suchunpaid/unclaimed dividend amount is transferred to the IEPF. Once unclaimed dividend istransferred to IEPF no claim shall lie further against the Company in respect thereof.
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 858313/- to the General Reserve out of theamount available for distribution.
The paid up Equity Share Capital as on 31St March 2016 was Rs.33804000/-. During the year under review the company has not issued any further ShareCapital.
FURTHER ISSUE OF CAPITAL BY WAY OF RIGHT ISSUE
The Board of Directors of the Company in their meeting held on 30.07.2015 decided toraise further issue of capital by offering the shares to the existing shareholders of thecompany by right basis. But later on the Board of Directors in their meeting held on28.10.2015 have decided to defer the proposal to issue of further shares by way of rightissue due to adverse market conditions.
The Company continues to focus on judicious management of its working capital.Receivables inventories and other working capital parameters were kept under strict checkthrough continuous monitoring. The Company's relationships with its bankers continued tobe cordial during the year.
EXTRACT OF ANNUAL RETURN
As required pursuant to the provisions of Section 134 (3) (a) and Section 92(3) ofCompanies Act 2013 read with Rule 12(1) of Companies (Management and Administration)Rules 2014 an extract of Annual Returnas as at 31St March 2016 in theprescribed Form MGT-9 which is annexed as Annexure "A" to this Reportforming part hereof.
Your Company has not accepted any deposits from the public in terms of the provisionsof Section 73 of the Companies Act 2013 during the Financial Year ended 31stMarch 2016 and your Board of Directors have also passed the necessary resolution fornon-acceptance of any Public Deposits during the Financial Year 2016-17.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT
No material changes and commitments have occurred between the close of the financialyear of the Company to which the balance sheet relates and the date of the report whichmay affect the financial position of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(2) read with other regulations of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 annexed to this Directors' Report provides amore detailed review of the operating performance.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have given declaration to the effect that theymeet the criteria of Independence as laid down under Subsection 6 of Section 149 of theCompanies Act 2013 read with Schedule IV thereof in the first Board Meeting held for thefinancial year 2016-17.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Company has held four Board Meetings during the financial year under review forwhich notices were served in accordance with Section 173 (3) of the Companies Act 2013 attheir address registered with the Company by the permitted mode of delivery. The detailsof the Board Meetings are given in the Corporate Governance Report that forms part of theAnnual Report.
POLICIES OF THE COMPANY
NOMINATION AND REMUNERATION POLICY
The nomination and remuneration committee of the company formulated a criteria fordetermining qualification positive attributes and independence of a director andrecommended to the Board a policy relating to the remuneration for the directors keymanagerial personnel and other employees.
Pursuant to Sub-section 3 of Section 178 of the Companies Act 2013 on recommendationof the Nomination & Remuneration Committee the Board of Directors of the Companyformulated the policy on selection and appointment of Directors Senior Management andother employees of the Company and their remuneration positive attributes Directors'qualifications Independence of Directors and other related matters. The detailedNomination & Remuneration Policy is annexed as Annexure B' and forms partof this Report and is also available on the website of the Company atwww.bbinvestments.in.
IMPLEMENTATION OF RISK MANAGEMENT POLICY
Effective risk management is essential to success and is an integral part of ourculture. While we need to accept a level of risk in achieving our goals sound riskmanagement helps us to make the most of each business opportunity and enables us to beresilient and respond decisively to the changing environment.
The Company has its well defined Risk Management Policy or identifying risks andopportunities that may have a bearing on the organization's objectives assessing them interms of likelihood and magnitude of impact and determining a response strategy.
The main objective of this policy is to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolving riskassociated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues. As a matter of policy these risks are assessed andappropriate steps are taken to mitigate the same as the element of risk threatening theCompany's existence is very minimal.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to provisions of section 177 of the Companies Act 2013 the Company alreadyhas put in place a policy prohibiting managerial personnel from taking adverse personnelaction employees disclosing in good faith alleged wrongful conduct on matters of publicconcern involving violation of any law mismanagement misappropriation of public fundsamong others. Employees aware of any alleged wrongful conduct are encouraged to make adisclosure to the Audit Committee.
No personnel of the Company were denied access to the Audit Committee. Your Company hasmaintained Vigil Mechanism/ Whistle Blower Policy and posted its Policy on websitewww.bbinvestments.in.
COMMITTEES OF THE BOARD
Pursuant to the provisions of Section 177 of the Companies Act 2013 read with Rule 6of the Companies (Meetings of the Board and its Powers) Rules 2014 and Regulation 18 ofthe SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015 the composition of the Audit Committee isas under:
|S.No. ||Name of the Member ||Category |
|1. ||Mr. Vijay Bhushan ||Non-Executive Director |
|2. ||Mr. Kuldeep Gupta ||Non-Executive & Independent Director |
|3. ||Mr. Ravindra Singh ||Non-Executive & Independent Director |
|4. ||Mr. Varun Saihgal ||Non-Executive & Independent Director |
NOMINATION & REMUNERATION COMMITTEE:
Pursuant to the provisions of Section 178 (1) of the Companies Act 2013 read with Rule6 of the Companies (Meetings of the Board and its Powers) Rules 2014 and Regulation 19 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 thecomposition of the Audit Committee is as under:
|S.No. ||Name of the Member ||Category |
|1. ||Mrs. Nisha Ahuja ||Non-Executive Director |
|2. ||Mr. Ravindra Singh ||Non-Executive & Independent Director |
|3. ||Mr. Varun Saihgal ||Non-Executive & Independent Director |
STAKEHOLDERS RELATIONSHIP COMMITTEE:
Pursuant to Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Composition of the Committee is as per the following particulars:
|S.No. ||Name of the Member ||Category |
|1. ||Mrs. Nisha Ahuja ||Non-Executive Director |
|2. ||Mr. Jogesh C. Ahuja ||Non-Executive Director |
|3. ||Mr. Varun Saihgal ||Non-Executive & Independent Director |
The Company's Auditors M/s P. Bholusaria& Co. Chartered Accountants havingregistration no. 000468N who retires at the ensuing Annual General Meeting of the Companyare eligible for re-appointment. They have confirmed their eligibility under section 139141 of the Companies Act 2013 and the Rules framed thereunder for their reappointment asStatutory Auditor of the Company therefore it is proposed to appoint M/s P. Bholusaria& Co. Chartered Accountant as Statutory Auditors of the Company from the conclusionof the forthcoming AGM till the conclusion of next AGM.
ACCOUNTING STANDARDS FOLLOWED BY THE COMPANY
The Financial Statements of the Company have been prepared in accordance with theGenerally Accepted Accounting Principles in India ("Indian GAAP") to comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and the relevant provisions of the Act and the Guidelinesprescribed by the RBI as applicable.
EXPLANATION OF AUDITOR'S REPORT
The notes on Financial Satements referred to in the Auditors' Report areself-explanatory and do not call for any further comments.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshas re-appointed M/s Kavita Pamnani& Associates a firm of Company Secretaries inPractice (Membership No. FCS-6288& CP No. 11099) to undertake the Secretarial Auditof the Company for the financial year 2015-16. The Report of the Secretarial Audit isannexed herewith in Annexure "C" in format MR-3. There are noqualifications reservation or adverse remarks made by Secretarial Auditors in theirReport.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
The provision of Section-186 is not applicable on the Company as in pursuant to SubSection- (11) of Section-186 the Company is exempted.
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
Details of contracts or arrangements entered into by the Company during the financialyear 2015-16 with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 and as required to be disclosed as per Section 134 (3) (h) are givenin Form AOC-2 (Annexure -D) attached with this report. Your Company has taken necessaryapprovals as required by Section 188 read with Companies (Meetings of Board and itsPowers) Rules 2014 from time to time.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
The Company conducts Familiarization Programme for the Independent Directors to providethem an opportunity to familiarize with the Company its management and its operations soas to gain a clear understanding of their roles and responsibilities and contributesignificantly towards the growth of the Company. They have full opportunity to interactwith senior management personnel and are provided all the documents required and sought bythem for enabling them to have a good understanding of the Company its various operationsand the industry of which it is a part. The initiative undertaken by the Company in thisrespect have been disclosed on the website of the Company at www.bbinvestments.in.
Pursuant to applicable provisions of the Companies Act 2013 and Listing Regulationsthe Company has devised a mechanism for evaluating the performance of IndependentDirectors Board Committees and other individual Directors. On the basis of the saidmechanism the Board has evaluated the performance of Committees of Board individualdirectors and Board as a whole.
Directors were evaluated on aspects such as attendance contribution at Board/Committeemeetings and guidance/support to the management outside Board/Committee meetings. TheCommittees of the Board were assessed on the degree of fulfillment of keyresponsibilities adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Director was carried out by the wholeBoard. The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors who also reviewed the performance of the Boardits Committees and the Directors.
The evaluation was conducted according to Schedules IV of the Companies Act 2013 whichstates that the performance evaluation of individual director was done by all thedirectors present except director being evaluated.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The current composition of the Board of Directors of your Company is as under:
|S.NO. ||NAME OF DIRECTOR ||DESIGNATION ||DATE OF APPOINTMENT |
|1. ||Mr. Vijay Bhushan ||Non-Executive Director ||03.06.1992 |
|2. ||Mrs. Nisha Ahuja ||Non-Executive Director ||03.06.1992 |
|3. ||Mr. Jogesh C. Ahuja ||Non-Executive Director ||29.01.1998 |
|4. ||Mrs. Sant Kumari Agrawal ||Non-Executive Director ||29.01.1998 |
|5. ||Mr. Arun Kumar Garg ||Non-Executive Director ||26.07.2012 |
|6. ||Mr. Kuldeep Gupta ||Non-Executive & Independent Director ||28.01.2010 |
|7. ||Mr. Varun Saihgal ||Non-Executive & Independent Director ||21.05.2013 |
|8. ||Mr. Ravindra Singh ||Non-Executive & Independent Director ||12.06.2008 |
Key Managerial Personnel
|S.NO. ||NAME OF PERSON ||DESIGNATION ||DATE OF APPOINTMENT |
|1. ||Mr. Satish Aggarwal ||Chief Financial Officer & Manager ||25.09.2014 |
|2. ||Ms. Shipra Kamra ||Company Secretary ||11.05.2016 |
Retire by Rotation
In terms of section 152 (6) of the Companies Act 2013 the Board of directors of theCompany recommends the reappointment of Mr. Arun Kumar Garg and Mr. Jogesh Chander Ahujaas Directors of the Company who are liable to retire by rotation at the forthcomingAnnual General Meeting and being eligible offer themselves for re-appointment.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of Energy: Since the Company is not engaged in any manufacturing activityissues relating to conservation of energy and technology absorption are not quite relevantto its functioning.
Export Activities: There was no export activity in the Company during the year underreview. The Company is not planning any export in the near future as well.
Foreign Exchange Earnings and Outgo: There was no Foreign Exchange Earnings and outgoduring the year under review.
SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
Your Company does not have any Subsidiary/Subsidiaries Joint Ventures and AssociateCompany within the meaning of Companies Act 2013 as at March 31 2016.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant and material orders were passed by the regulators or courts or tribunalsduring the financial year 2015-16 which have an impact on the going concern status andCompany's operations in future.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The Company has alsoimplemented several best corporate governance practices as an important step towardsbuilding strong investors' confidence improving investor protection and maximizinglong-term stakeholders' value.
Pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulation 2015 acompliance report on Corporate Governance together with the certificate auditors of theCompany on compliance mandatory requirements has been annexed in this report.
RBI NORMS AND ACCOUNTING STANDARDS
To comply with RBI directions your company closed its accounts for the full yearending March 2016 and your Company continues to comply with the directives issued as wellas the norms prescribed by Reserve Bank of India for NBFCs.
Your Company is complying with all the guidelines of the Reserve Bank of India forNon-Banking Finance Company. In terms of Para 13 of the NBFC Regulations the particularsas applicable to the Company are appended to the Balance Sheet.
NON-BANKING FINANCIAL COMPANIES AUDITORS' REPORT (RESERVE BANK) DIRECTIONS 1998
Pursuant to the Non-Banking Financial Companies Auditors' Report (Reserve Bank)Directions 1998 a report from the statutory auditors to the Board of Directors has beenreceived by the Company.
DISCLOSURE OF SEXUAL HARRASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company does not fall in requirements of the Sexual Harassment of Women at theWorkplace (prevention prohibition & redressal) Act 2013. No employees (permanentcontractual temporary trainees) are covered under this policy.
The Securities and Exchange Board of India (SEBI) on September 02 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulations were effectiveDecember 01 2015. Accordingly all listed entities were required to enter into theListing Agreement within six months from the effective date. The Company entered intoListing Agreement with BSE Limited during February 2016.
LISTING OF EQUITY SHARES
The securities of the Company are listed and are traded at BSE Limited. The Company haspaid listing fee to BSE Ltd. for the Financial Year 2016-17.
BUSINESS RESPONSIBILITY STATEMENT
SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13 2012 mandated the top 100listed entities based on market capitalization at BSE and NSE to include BusinessResponsibility Report (BRR) as part of the Annual Report describing the initiatives takenby the companies from Environmental Social and Governance perspective. Accordingly thiscircular is not applicable to our Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3) (C) of the Companies Act 2013 theDirectors confirm the following in respect of the Audited Annual Accounts for theFinancial Year ended March 31 2016:
a. that in the preparation of the annual financial statements for the year ended 31stMarch 2016 all the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
c. that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
d. that the directors had prepared the annual accounts on a going concern basis;
e. that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
f. that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The provisions of section 135 of the Act with regard to Corporate SocialResponsibility (CSR) are at present not applicable on the Company.
(A) The ratio of the remuneration of each director to the median employee'sremuneration and other details in terms of sub-section 12 of Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is not applicable on the Company.
(B) The statement containing particulars of employees as required under Section 197(12)of the Companies Act 2013 read with Rule 5(1) and Rule 5 (3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of thisreport named as Annexure-E'. In terms of Section 136 of the Companies Act2013 the same is open for inspection at the Registered Office of the Company.
Copies of this statement may be obtained by the members by writing to the CompanySecretary.
(C) There are no employees employed throughout the financial year and in receipt ofremuneration of Rs. 60 lacs or more or employed for part of the year and in receipt ofRs. 5 lacs or more a month to be reported under Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
INTERNAL FINANCIAL CONTROL
Internal control framework including clear delegation of authority and standardoperating procedures are available across all businesses and functions. These are reviewedperiodically at all levels. The Company's Internal Audit is conducted by Rajesh SureshJain & Associates Chartered Accountant Internal Auditors of the Company. TheInternal Auditor independently evaluates the adequacy of internal controls and reviewsmajor transactions. The Internal Auditor report directly to the Audit Committee to ensurecomplete independence.
SERVICE OF DOCUMENTS THROUGH ELECTRONIC MODE
In furtherance of the Green Initiative in Corporate Governance announced by theMinistry of Corporate Affairs the Company had in past requested the shareholders toregister their email addresses with the Registrar/ Company for receiving the Report andAccounts Notices etc. in electronic mode. However some of the shareholders have not yetregistered their E-mail IDs with the Company. Shareholders who have not registered theirE-mail addresses are once again requested to register the same with the Company by sendingtheir requests to email@example.com.
Your Directors would like to express their sincere appreciation for the cooperationpatronage assistance and guidance by their business associates bankers and clients andother business constituents for their continued support throughout the year. YourDirectors also sincerely acknowledge the significant contributions made by the employeesthrough their dedicated services to the Company.
The Board would like to take this opportunity to express its gratitude to you allpartners in our enterprise for your confidence encouragement and unstinting support.
| ||For & on Behalf of the Board of Directors |
|For Bharat Bhushan Finance & Commodity Brokers Limited |
| ||Sd/- ||Sd/- |
| ||NISHA AHUJA ||VIJAY BHUSHAN |
|Place : New Delhi ||DIRECTOR ||DIRECTOR |
|Date :09th August 2016 ||(DIN : 00001875) ||(DIN : 00002421) |
NOMINATION AND REMUNERATION POLICY
1.1 The objective of Nomination and Remuneration Policy is to ensure rationale andobjectivity in the remuneration of the Directors Senior Management & employees of theCompany.
1.2 The Policy also intends to bring in a pragmatic methodology in screening ofcandidates who may be recommended to the position of Directors and senior management andto establish effective evaluation criteria to evaluate the performance of every Directorand the overall Board of the Company.
1.3 The Policy also serves as a guiding principle to ensure good Corporate Governanceas well as to provide sustainability to the Board of Directors of the Company.
2.1 The requirement of formulating a Nomination and Remuneration Policy stems out fromthe provisions of the Companies Act 2013 including any statutory modification(s) orre-enactment(s) thereof for the time being in force and from the clause 49 of the listingagreement entered into with the Stock Exchanges.
2.2 Any other Law and Statute as may be applicable for the time being in force.
3.1 To identify suitable persons interview them if necessary and recommend them assuitable candidates to fill up vacancies on the Board or augment the Board and SeniorManagement.
3.2 To ensure the optimum composition of the Board of Directors ensuring a mix ofknowledge experience and expertise from diversified fields of knowledge.
3.3 To lay down criteria for the evaluation of the Board.
3.4 To formulate a criteria for determining qualifications positive attributes andindependence of a Director and recommend to the Board a Policy thereon.
3.5 To formulate criteria for evaluation of Directors.
4. Eligibility Criteria for recommending a candidate to be appointed on theBoard of Directors.
The Nomination and Remuneration Committee may consider the following parameters whileconsidering the credentials of potential candidates for Directorship in the Company.
4.1 Educational Qualification:
Possess any Graduation/ Post Graduation/ M. Phil / Doctorate
Possess any other Professional Qualification / Degree/ Diploma
4.2 Experience / Expertise
To possess appropriate skills experience and knowledge in one or more fields offinance law management sales marketing administration research corporategovernance technical operations or other disciplines related to the Company's business.
The Candidate should not be of unsound mind.
The Candidate should not be an undischarged insolvent.
The Candidate must not have applied to be adjudicated as an insolvent and hisapplication must not be pending.
The Candidate must not have been convicted by a Court of any offence whetherinvolving moral turpitude or otherwise and sentenced in respect thereof to imprisonmentfor not less than six (6) months.
There must not be any order passed by Court or Tribunal disqualifying a personto be appointed as a Director.
There should not be any calls in respect of any shares of the Company held byhim whether alone or jointly with others and six months must not have elapsed from thelast date fixed for the payment of the call.
The Candidate must not have been convicted of the offence dealing with relatedparty transactions under Section 188 of the Companies Act 2013 at any time during thelast preceding five (5) years.
The Candidate must be holding his Director Identification Number (DIN).
The Candidate is not or has not been a Director of a Company which has not filedFinancial Statements or Annual Returns for any continuous three (3) financial years.
The Candidate is not or has not been a Director of the Company which has failedto repay the deposits accepted by it or pay interest thereon or to redeem any debentureson the due date or pay interest due thereon or pay any dividend declared and such failureto pay or redeem continues for one year or more.
The Candidate should not have been found guilty of any offence consisting ofviolation of Rules/ Regulations/ Legislative requirements by Customs/ Excise/ Income TaxAuthority/ Foreign Exchange/ Other Revenue Authorities.
4.4 Other Eligibility Criteria
Each director must be an individual of high personal and professional integrityand ethical character.
The candidate should have exhibited behavior that indicates he or she iscommitted to the highest ethical standards.
The candidate should not deprive the Company of any opportunity that belongs tothe Company.
He should not be in a position of diverting the corporate opportunity for ownbenefits or to others to the detriment of the Company.
The candidate must not at any time compete with the company in respect of anybusiness transaction.
Each director must possess the ability to exercise sound business judgment on abroad range of issues.
The candidate has achieved prominence in his or her business governmental orprofessional activities and has built a reputation that demonstrates the abilityto make the kind of important and sensitive judgments that the Board is called upon tomake.
The Nomination and Remuneration Committee must be satisfied that the candidatewill effectively consistently and appropriately take into account and balance thelegitimate interests and concerns of all of the Company's shareholders and otherstakeholders in reaching decisions rather than advancing the interests of a particularconstituency.
The Nomination and Remuneration Committee must satisfy itself that the candidatewill be able to devote sufficient time and energy to the performance of his or her dutiesas a Director.
4.5 Fit and Proper Criteria
The Nomination and Remuneration Committee shall undertake a process of Due Diligencebased on the criteria of qualifications technical expertise track record integrity etc.The basic objective of ascertaining the fit and proper criteria shall be to put in placean internal supervisory process on a continuing basis and to determine the suitability ofthe person for appointment / continuing to hold appointment as a Director on the Board ofthe Company. The Committee shall undertake such Due Diligence exercise at the time ofappointment as well as the time of renewal of the Directorships of the incumbent.
4.6 Criteria For Independence For Directors to be appointed as IndependentDirector on Board of the Company
An independent director in relation to a company means a director other than amanaging director or a whole-time director or a nominee director
(a) who in the opinion of the Board is a person of integrity and possesses relevantexpertise and experience;
(b) (i) who is or was not a promoter of the company or its holding subsidiary orassociate company; (ii) who is not related to promoters or directors in the company itsholding subsidiary or associate company;
(c) who has or had no pecuniary relationship with the company its holding subsidiaryor associate company or their promoters or directors during the two immediatelypreceding financial years or during the current financial year;
(d) none of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year;
(e) who neither himself nor any of his relatives
(i) holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;
(ii) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of
(A) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or
(B) any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten per cent or more of thegross turnover of such firm;
(iii) holds together with his relatives two per cent or more of the total voting powerof the company; or
(iv) is a Chief Executive or director by whatever name called of any non-profitorganisation that receives twenty-five per cent or more of its receipts from the companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; or
(f) who possesses such other qualifications as may be prescribed.
ExplanationFor the purposes of this section "nominee director" means adirector nominated by any financial institution in pursuance of the provisions of any lawfor the time being in force or of any agreement or appointed by any Government or anyother person to represent its interests.
5. Remuneration Policy
I. Board Level Remuneration Structure
1. For Executive Directors (MD and Whole-Time Director) -The remunerationwill be paid as approved from time to time subject to the approval of the Board andShareholders as the case may be and as per the applicable provisions of Companies Act2013 and under any other Act/ Rules/ Regulations for the time being in force.
2. In case of Non-Executive / Independent Directors
(i) Sitting Fees The Non-Executive/Independent Directors shall be paidsitting fees for attending each meeting of the Board and various Committee/s of Directors.The Sitting Fees may be determined/revised by the Board of Directors from time to timesubject to the overall limits as prescribed under the applicable provisions of theCompanies Act 2013.
II. Other then Board Level
Apart from the directors the remuneration of-
All the Other KMPs such as the company secretary or any other officer that maybe prescribed under the statute from time to time; and
"Senior Management" of the Company defined in the clause 49 of theListing Agreement with the Stock Exchanges i.e. personnel who are members of its coremanagement team excluding the Board of Directors Senior executives one level below theBoard i.e. President Cadre shall be determined by the Human Resources Department of theCompany in consultation with the Managing Director by considering his/her qualificationskills experience and the relevant policy of the Company.
The remuneration determined for all the above said KMPs and the Senior Personnel shallbe in line with the Company's philosophy to provide fair compensation to key - executiveofficers based on their performance and contribution to the Company and to provideincentives that attract and retain key executives instill a long-term commitment to theCompany and develop a pride and sense of Company ownership all in a manner consistentwith shareholder interests.
Decisions on Annual Increments of above said KMPs and the Senior Personnel shall bedecided by the Human Resources Department in consultation with the Managing Director.
6. Monitoring and Evaluation
The Nomination and Remuneration Committee shall evaluate the performance of theDirectors and the overall Board broadly on the basis of below mentioned criteria:
Whether the Directors / Board have acted in accordance with the provisions ofthe Articles of Association of the Company.
The Committee shall assemble all information regarding a candidate's backgroundand qualifications to determine if the candidate possesses or satisfies the minimum skillsand qualifications that a director must possess.
The Committee shall evaluate a candidate's mix of skills and qualifications anddetermine the contribution the candidate could be expected to make to the overallfunctioning of the Board.
The Committee shall give due consideration to the overall Board balance ofdiversity of perspectives backgrounds and experiences.
With respect to current directors the Committee shall consider past attendanceat meetings and assess the participation in and contributions to the activities of theBoard.
Whether the Directors / Board have acted in good faith in order to promote theobjects of the Company for the benefit of its members as a whole and in the bestinterests of the Company its employees the shareholders the Community and for theprotection of environment.
Whether the Director / Board has exercised their duties with due and reasonablecare skill and diligence and whether the Director / Board have exercised independentjudgment.
Whether the Director / Board have involved in a situation in which he / they mayhave a direct or indirect interest that conflicts or possibly may conflict with theinterest of the Company.
The Committee shall recommend director to the Board based on its assessment ofoverall suitability to serve on the Board in accordance with this Policy.
7. Board Diversity
The Nomination and Remuneration Committee shall ensure that the Board comprisesof Directors from diversified fields of knowledge and experience.
The Board should have Directors who can add professionalism and objectivity inthe decision making process.
The overall Board should reflect representatives from areas like finance lawaccountancy economics administration and other disciplines concerning the operationalinterests of the Company at large.
CRITERIA FOR EVALUATION OF PERFORMANCE OF INDEPENDENT DIRECTORS OF THE COMPANY
The performance of independent directors shall be evaluated by assigning rating on eachparameter.
The rating scale is as under:
|Scale ||Performance |
|5 ||Exceptionally good |
|4 ||Good |
|3 ||Satisfactory |
|2 ||Needs Improvement |
|1 ||Unacceptable |
Parameters are :
1. Compliance with Article of Association Companies Act and other Laws.
2. Compliance with ethical standard & code of conduct of company.
3. Rendering independent unbiased opinion.
4. Attendance & presence in meetings of Board & committees.
5. Attendance & presence in general meetings.
6. Leadership qualities.
8. Disclosure of non-independence.
9. Independent view on key appointments & strategy formulation.
10. Objective evaluation of Board's performance
11. Review of integrity of financial information & risk management
12. Safeguard of stakeholders' interests
13. Determination of level of remuneration of KMPs
14. Updation of skills and knowledge
16. Information regarding external environment
17. Raising of concerns to the Board
18. Safeguarding interest of whistle-blowers under vigil mechanism
19. Reporting of frauds violation etc.
20. Team work attributes
21. Safeguard of confidential information