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Charms Industries Ltd.

BSE: 531327 Sector: Financials
NSE: N.A. ISIN Code: INE442C01012
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Charms Industries Ltd. (CHARMSINDS) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 24th Annual Report of yourCompany together with the Audited Statements of Accounts for the financial year ended 31stMarch 2016.

I. FINANCIAL RESULTS:

The financial performance of the Company for the year ended 31st March 2016 issummarized below:

(In Rupees)
Particulars Year ending on 31st March 2016 Year ending on 31st March 2015
Sales 22637084 15620384
Other Income 40640 714019
Total Income 22677724 16334403
Less: Expenditure 23569791 15900884
Profit/Loss before interest depreciation and tax (892067) 433519
Less: Interest - -
Less: Depreciation & Amortization cost 180464 173533
Profit/ (Loss) before Tax (3676306) 259986
Less: Tax Expense - -
Profit/ (Loss) after Tax (3676306) 259986

II. OVERVIEW OF COMPANY’S FINANCIAL PERFORMANCE:

Due to high fluctuations in exchange rates the year 2015-16 was very challenging year.The sales for the year 2015-16 increased comparing to 2014-15 but due to fluctuations inexchanges rates the Company could not manage to earn net profit but your Directors lookforward to improve the financial position of the Company.

III. DIVIDEND:

Since the Company has occurred loss in the Financial Year 2015-16 hence no dividend isdeclared by the Company.

IV. CHANGE IN THE NATURE OF THE BUSINESS:

During the year there is no change in the nature of the business of the Company.

V. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

Since there was no unpaid/unclaimed Dividend declared and paid last year theprovisions of Section 125 of the Companies Act 2013 do not apply.

VI. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary Joint venture or Associate Company.

VII. PUBLIC DEPOSITS:

During the year under review the Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force). Hence the requirement for furnishing thedetails of deposits which are not in compliance with Chapter V of the Act is notapplicable.

VIII. MATERIAL CHANGES AND COMMITMENT:

No material changes and commitments affecting the financial position of the Companyoccurred between the ends of the financial year to which this financial statement relateon the date of this report.

IX. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the period under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls

X. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

There are no significant material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.

XI. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The company has not given any loans or guarantees or made any investments covered underthe provisions of section 186 of the Companies Act 2013 during the financial period underreview.

XII. STATE OF COMPANY’S AFFAIR :

During the year under review your company has not made any default in repayment of anyof its term loans have met generally all its obligation in time including its taxliabilities.

XIII. RELATED PARTY TRANSACTIONS:

During the year no contracts or arrangements were made with related parties fallingunder the purview of Section 188 of the Companies Act 2013.

There are no materially significant related party transactions made by the company withPromoters Key Managerial Personnel or other designated persons which may have potentialconflict with interest of the company at large.

XIV. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

[A] Consumption Of Energy & Technology Absorption:

The details as required under Section 134 (3) (m) of the Companies Act 2013 inrespect of Conservation of Energy Technology Absorption are not applicable.

[B] Foreign Exchange Earning & Outgo :

Foreign Exchange Earning : NIL Foreign Exchange Outgo : NIL

XV. APPOINTMENT OF M/S BIGSHARE SERVICES PRIVATE LIMITED AS THE REGISTRAR AND SHARETRANSFER AGENT OF THE COMPANY:

The SEBI vide its order No.WTM/RKA/MIRSD2/41/2016 dated 22nd March 2016 has advisedall the clients of the Sharepro Services (India) Private Limited (hereinafter referred toas "Sharepro") to carry out/switch over the activities related to Registrar andShare Transfer Agent due to certain irregularities and hence the Company has terminatedits services with Sharepro.

The Board of Directors of the company at their meeting held on 26th May 2016approved the appointment of M/ S Bigshare Services Private Limited in place of M/sSharepro (India) Private Limited. The Bigshare Services Private Limited will act as CommonShare Registry of the Company.

XVI. DIRECTORS AND KEY MANAGERIAL PERSONNEL

[A] Retirement by rotation and subsequent re-appointment:

Mrs. Nehal Shivkumar Chauhan (DIN: 02901331) is liable to retire by rotation at theensuing AGM pursuant to the provisions of Section 152 of the Companies Act 2013 read withthe Companies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of Company and being eligible have offered herself for reappointment.Appropriate resolutions for the re-appointment are being placed for your approval at theensuing AGM. The brief resume of the Directors and other related information has beendetailed in the Notice convening the 24th AGM of your Company.

[B] Re-appointment of Managing Director:

Pursuant to the recommendation of the Nomination and Remuneration Committee Mr.Shivkumar R. Chauhan (DIN: 00841729) was re-appointed by the Board of Directors subjectto the approval of the shareholders as the Managing Director of the Company for a furtherperiod of five years with effect from May 26 2016 to May 25 2021

[C] Cessation:

The Board of Directors of the Company in their meeting held on 26th July2016 accepted the resignation of Mr. Dahyabhai B. Sachaniya (DIN: 02468095) from thedirectorship of the Company.

The Board places on record its appreciation for the assistance and guidance provided byMr. Dahyabhai Bhavanjibhai Sachania during his tenure as Director of the Company.

[D] Declaration of Independence:

Mr. Harsad S. Gandhi (DIN: 01056779) and Mr. Nishit M. Rupapara (DIN: 02859031) are theexisting Independent Directors the Company and the Company has received declarations fromall the Independent Directors confirming that they meet the criteria of independence asprescribed under the provisions of the Companies Act 2013 read with the Schedules andRules issued thereunder as well as Regulation 16(1)(b) of Listing Regulations (includingany statutory modification(s) or re-enactment(s) for the time being in force).

[E] Evaluation of Board’s Performance:

Pursuant to the provisions of the Companies Act 2013 read with the Rules issuedthereunder and the Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force) the process for evaluation of the annualperformance of the Directors/ Board/ Committees was carried out.

XVII. NUMBER OF MEETINGS OF THE BOARD

The Company had conduct 5 (Five) Board meetings during the financial year 2015-16 underreview on:

• 06th April 2015 28th May 2015 14th August2015 09th November 2015 and 12th February 2016.

XVIII. DIRECTOR’S RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force) the Directors of ourCompany confirm that:

a) In the preparation of the annual accounts for the financial year ended 31st March2016 the applicable Accounting Standards and Schedule III of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force)have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31st March 2016 and ofthe profit and loss of the Company for the financial year ended 31st March 2016;

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 (including anystatutory modification(s) or re-enactment(s) for the time being in force) for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis;

e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;

f) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.

XIX. DISCLOSURE OF VARIOUS COMMITTEES OF BOARD OF DIRECTORS:

[A] AUDIT COMMITTEE:

The Audit Committee of Directors was constituted pursuant to the provisions of Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section.

• Composition:

The details of composition of Audit Committee are as follows:

NAME OF THE DIRECTORS CATEGORY OF DIRECTORSHIP REMARKS NUMBER OF MEETINGS
HELD ATTENDED
Mr. Harsad S. Gandhi Independent Non Executive Chairman 4 4
Mr. Nishit M. Rupapara Independent Non Executive Member 4 4
Mr. Shivkumar R. Chauhan Non-Independent Executive Member 4 4

• Terms of reference:

The broad terms of reference of the Audit Committee are as under:

- Reviewing of the Company’s financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible.

- Recommending the appointment remuneration and terms of appointment of externalAuditor.

- Review and monitor the auditor’s independence and performance and effectivenessof audit process.

- Approval or any subsequent modification of transactions of the company with relatedparties

- Scrutiny of inter-corporate loans and investments

- Valuation of undertakings or assets of the Company wherever it is necessary.

- Monitoring the end use of funds raised through public offers and related matters.

- Reviewing with management the Annual financial statements and half yearly andQuarterly financial results before submission to the Board.

- Reviewing periodically the adequacy of the internal control system.

- Discussions with Internal Auditor on any significant findings and follow up there on.

• Meetings

During the Year 4 (four) meetings of the Committee were held on 28/05/201514/08/2015 09/ 11/2015 and 12/02/2016. The necessary quorum was present at the Meetings

[B] NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee of Directors was constituted pursuant to theprovisions of Section 178 of the Companies Act 2013. The composition of the Committee isin conformity with the provisions of the said section.

The Nomination and Remuneration Committee was reconstituted with effect from 06thApril 2015 and comprises as below:

• Composition

The details of composition of Nomination and Remuneration Committee are as follows:

NAME OF THE DIRECTORS CATEGORY OF DIRECTORSHIP REMARKS
Mr. Harsad S. Gandhi Independent Non Executive Chairman
Mr. Nishit M. Rupapara Independent Non Executive Member
Mrs. Nehal S. Chauhan Non-Independent Non Executive Member

• Terms of reference:

The broad terms of reference of the Nomination and Remuneration Committee are as under:

- Formulation of the criteria for determining the qualifications positive attributesand independence of Director;

- Devising a policy on Board diversity;

- Formulation of Remuneration policy;

- Review the structure size and composition of the Board;

- Identifying and selection of candidates for appointment as Directors;

- Identifying potential individuals for appointment as Key Managerial Personnel andSenior Management;

- Formulation of criteria for evaluation of Independent Directors and the Board.

• Meetings:

During the Year 1 (one) meeting of the committee was held on 06/04/2015.

The Board has on the recommendation of Nomination and Remuneration Committee framed apolicy on director’s appointment and remuneration of Directors including criteria fordetermining qualification positive attributes independence of directors and remunerationfor directors Key Managerial Personnel and other employees. The policy is annexed to thisreport as "Annexure-A"

[C] STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee of Directors was constituted pursuant to theprovisions of Section 178(5) of the Companies Act 2013. The composition of the Committeeis in conformity with the provisions of the said section

• Composition:

The details of composition of Nomination and Remuneration Committee are as follows:

NAME OF THE DIRECTORS CATEGORY OF DIRECTORSHIP REMARKS
Mr. Harsad S. Gandhi Independent Non Executive Chairman
Mr. Shivkumar R. Chauhan Non-Independent Executive Member
Mr. Nishit M. Rupapara Independent Non Executive Member

• Details of Investor’s grievances/ Complaints:

The Company has not received any complaints during the year. The pending complaints ofthe Shareholders/Investors registered with SEBI at the end of the current financial yearended on 31st March 2016 are NIL.

• Compliance Officer :

Mr. Shivkumar R. Chauhan is the Compliance Officer of the Company for the abovepurpose.

XX. AUDITORS:

[A] Ratification of Statutory Auditors:

The present Auditors of the Company M/s. Praful N. Shah & Co. CharteredAccountants Ahmedabad were appointed as Auditors at the 23rd Annual GeneralMeeting held on 30th September 2015 to hold office till the conclusion of 25thAnnual General Meeting to be held in 2017.

Pursuant to the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 the Company shall place the matter relating tosuch appointment for ratification by members at every annual general meeting and thereforeit is proposed to ratify the appointment of M/ s. Praful N. Shah Chartered Accountants asthe Statutory Auditors of the Company.

The consent of M/s. Praful N. Shah Chartered Accountants along with certificate underSection 139 of the Act has been obtained to the effect that their appointment if madeshall be in accordance with the prescribed conditions and that they are eligible to holdthe office of Auditors of the Company.

[B] Cost Auditor:

As the cost audit is not applicable to the Company therefore the Company has notappointed the Cost Auditor pursuant to Section 148 of the Companies Act 2013 read withthe Companies (Cost Records and Audit) Amendment Rules 2014.

[C] Internal Auditor

The Board of Directors has on the recommendation of Audit Committee and pursuant tothe provision of Section 138 of the Companies Act 2013 in their meeting held on 9thNovember 2015 has appointed Mr. Gaurang Shah Practising Company Secretary as theInternal Auditor of the Company for the financial year 2015-16.

[D] Secretarial Auditor:

Provisions of Section 204 read with Section 134(3) of the Companies Act 2013 mandatesto obtain Secretarial Audit Report from Practicing Company Secretary. M/s KhandelwalDevesh & Associates Company Secretaries had been appointed to issue Secretarial AuditReport for the period ended on 31st March 2016.

Secretarial Audit Report issued by M/s Khandelwal Devesh & Associates CompanySecretaries in Form MR-3 attached and marked as Annexure "B" for the periodunder review forms part of this report. The said report contains observation orqualification which revel that the Company failed to appoint Company Secretary. Furtherthe Company has not filed e-form MGT-14 relating to appointment of Internal Auditor duringthe Audit Period.

• Non-appointment of Company Secretary

The Board of Directors of your Company would like to explain on the said observationrelating to appointment of Company Secretary that your Company took all reasonable stepsto do such appointment but as your Company is not doing well in its present line ofbusiness activity it failed to attract right candidates for such post. The Board of yourCompany continues its efforts to search right candidate for the post of Company Secretaryand will appoint the Company Secretary as soon as possible.

• Qualification pertaining to non-filing of Form MGT-14 for appointment ofInternal Auditor

The Board of the Directors of the Company in their meeting held on 09th November 2015appointed Mr. Gaurang R. Shah Practicing Company Secretary as an Internal Auditor for theF.Y. 2015-16. however the Company missed to file MGT-14 relating to the appointment ofInternal Auditor with the MCA within the stipulated time period and such non-filing wasnot intentional. Further the Company is in process to file the necessary form on MCAportal.

XXI. EXTRACT OF ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure"C" and is attached to this Report

XXII. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has established vigil mechanism and framed whistle blower policy forDirectors and employees to report concerns about unethical behavior actual or suspectedfraud or violation of Company’s Code of Conduct or Ethics Policy. Whistle BlowerPolicy is disclosed on the website of the Company at www.charmsindustries.in

XXIII. RISK MANAGEMENT:

The Company does not have any Risk Management Policy or any statement concerningdevelopment and implementation of risk management policy of the company as the elements ofrisk threatening the Company’s existence are very minimal.

XXIV. COMPANY’S POLICY RELATING TO PAYMEMT OF REMUNERATION TO DIRECTORS:

The Board determines the remuneration payable to the Executive Directors taking intoaccount their qualification expertise and contribution and based on recommendations ofthe Nomination and Remuneration Committee. Non-Executive Directors are eligible to receivesitting fees for attending Board / Committee Meetings as decided by the Board within thelimits prescribed under the Companies Act 2013

The Remuneration policy of the Company is as under:

i. Remuneration to Non–Executive Directors:

- A Non-Executive Director is eligible to receive sitting fees for each meeting of theBoard or Committee of the Board attended by him/her of such sum as may be approved by theBoard of Directors within the overall limits prescribed under the Act and the Companies[Appointment and Remuneration of Managerial Personnel] Rules 2014.

ii. Remuneration to Executive Directors:

- The Board in consultation with the Nomination & Remuneration Committee decidesthe remuneration structure for Executive Directors. On the recommendation of theNomination & Remuneration Committee the Remuneration paid/payable is approved by theBoard of Directors and by the members in the General Meeting in terms of provisionsapplicable from time to time.

XXV. CORPORATE GOVERNANCE:

As per Regulation 15(2) of SEBI (Listing Obligation and Disclosures requirement)Regulation 2015 Report on Corporate Governance is not applicable on the Company as theCompany is not having the paid up share capital exceeding Rs. 10 crores and Net worth isexceeding Rs. 25 crores.

Further Company has obtained a Certificate from a Practicing Company Secretariescertifying the same.

XXVI. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The provision of section 135(1) of Companies Act 2013 i.e. Corporate SocialResponsibility is not applicable on the company. Therefore the company has not constitutedCSR committee.

XXVII. MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:

The Management’s Discussion and Analysis Report for the year under review asstipulated under Regulation 34(2)(e) of the Listing Regulations is given as an annexure tothis report

XXVIII. LISTING:

The Equity Shares of the Company are listed on Bombay Stock Exchange. The company yetto pay annual listing fees to the Stock Exchange for the year 2016-17 further the Companyis regular in compliances of various clauses and regulations of the Listing Agreementand/or LODR

XXIX. PARTICULARS REGARDING EMPLOYEES:

During the year under report none of the employees was in receipt of remunerationexceeding the limit prescribed under Section 197(12) of the Companies Act 2013 and Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

XXX. GENERAL: a. Your Company has not issued any equity shares with differentialrights as to dividend voting or otherwise; and b. Your Company does not have any ESOPscheme for its employees/Directors.

XXXI. APPRECIATION:

Your Directors wish to convey their gratitude and place on record their appreciationfor all the employees at all levels for their hard work solidarity cooperation anddedication during the year.

Your Directors sincerely convey their appreciation to customers shareholders vendorsbankers business associates regulatory and government authorities for their continuedsupport.

For and on behalf of the Board
Harsad S. Gandhi
Date : 26/07/2016 Chairman & Director
Place : Ahmedabad (DIN: 01056779)

Annexure-‘A’

NOMINATION AND REMUNERATION POLICY INTRODUCTION:

In pursuance to the Company’s policy to consider human resources as its invaluableassets to pay equitable remuneration to all Directors key managerial personnel andemployees of the Company to harmonize the aspirations of human resources consistent withthe goals of the company and in terms of the provisions of the Companies Act 2013 thispolicy on Nomination and Remuneration of directors Key Managerial Personnel (KMP) andSenior Management has been formulated by the Nomination and Remuneration Committee("NRC")and approved by the Board of Directors of the Company.

CONSTITUTION OF COMMITTEE

The Board of Directors of Charms Industries Limited ("the Company")constituted the "Nomination and Remuneration Committee" consisting of three (3)Non-Executive Directors of which majority are Independent Directors in accordance with theprovisions of Section 178 of the Companies Act 2013. The Chairman of the Committee is anIndependent Director.

OBJECTIVE:

The Nomination and Remuneration Committee of Directors was constituted pursuant to theprovisions of Section 178 of the Companies Act 2013. The composition of the Committee isin conformity with the provisions of the said section.

The key objectives of the Committee would be:

a) To guide the Board in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.

b) Formulate the criteria for determining qualifications positive attributesindependence of a Director and policy relating to remuneration for Directors KeyManagerial Personnel and other employees

c) To evaluate the performance of the members of the Board and provide necessary reportto the Board for further evaluation of the Board.

d) To recommend to the Board on Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management

e) To provide to Key Managerial Personnel and Senior Management reward linked directlyto their effort performance dedication and achievement relating to the Company’soperations.

f) To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage

g) To develop a succession plan for the Board and to regularly review the plan.

DEFINITIONS:

"Act" means the Companies Act 2013 and Rules framed thereunder as amendedfrom time to time.

"Board" means Board of Directors of the Company.

"Directors" mean Directors of the Company.

"Key Managerial Personnel" means

i. Chief Executive Officer or the Managing Director or the Manager;

ii. Whole-time director;

iii. Chief Financial Officer;

iv. Company Secretary; and

v. such other officer as may be prescribed.

"Senior Management" means personnel of the company who are members of itscore management team excluding the Board of Directors including Functional Heads.

Policy for appointment and removal of Director KMP and Senior Management

A. Appointment criteria and qualifications

I. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.

II. A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person is sufficient /satisfactory for the concerned position.

III. The Company shall not appoint or continue the employment of any person asWhole-time Director who has attained the age of seventy years. Provided that the term ofthe person holding this position may be extended beyond the age of seventy years with theapproval of shareholders by passing a special resolution based on the explanatorystatement annexed to the notice for such motion indicating the justification for extensionof appointment beyond seventy years.

B. Term / Tenure

• Managing Director/Whole-time Director:

The Company shall appoint or re-appoint any person as its Executive Chairman ManagingDirector or Executive Director for a term not exceeding five years at a time. Nore-appointment shall be made earlier than one year before the expiry of term.

• Independent Director:

- An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board’s report.

- No Independent Director shall hold office for more than two consecutive terms butsuch Independent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly. However if a person who hasalready served as an Independent Director for 5 years or more in the Company as on October1 2014 or such other date as may be determined by the Committee as per regulatoryrequirement; he/ she shall be eligible for appointment for one more term of 5 years only.

- At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company or such othernumber as may be prescribed under the Act.

C. Evaluation

The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval (yearly).

D. Removal

Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations thereunder the Committee may recommend to theBoard with reasons recorded in writing removal of a Director KMP or Senior ManagementPersonnel subject to the provisions and compliance of the said Act rules and regulations.

E. Retirement

The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.

POLICY RELATING TO THE REMUNERATION FOR THE WHOLE-TIME DIRECTOR KMP AND SENIORMANAGEMENT PERSONNEL

The remuneration / compensation / commission etc. to the Whole-time Director KMP andSenior Management Personnel will be determined by the Committee and recommended to theBoard for approval. The remuneration / compensation / commission etc. shall be subject tothe prior/post approval of the shareholders of the Company and Central Governmentwherever required.

While determining the remuneration of Executive Directors and Key Managerial Personnelthe Committee shall consider following factors:

i) Industry standards if the data in this regard is available.

ii) The job description.

iii) Qualification and experience level of the candidate.

The remuneration payable to the Executive Directors including the value of theperquisites shall not exceed the permissible limits as are mentioned within theprovisions of the Companies Act 2013. They shall not be eligible for any sitting fees forattending any meetings.

The Non-Executive Directors shall not be eligible to receive any remuneration/ salaryfrom the Company. However the Non-Executive Directors shall be paid sitting fees forattending the meeting of the Board or committees thereof and commission as may be decidedby the Board/ Shareholders from time to time presently the Company is not paying anysitting fee. They shall also be eligible for reimbursement of out of pocket expenses forattending Board/ Committee Meetings.

DUTIES IN RELATION TO NOMINATION MATTERS

The duties of the Committee in relation to nomination matters include:

a) Ensuring that there is an appropriate induction in place for new Directors andmembers of Senior Management and reviewing its effectiveness;

b) Ensuring that on appointment to the Board Non-Executive Directors receive a formalletter of appointment in accordance with the Guidelines provided under the Act;

c) Determining the appropriate size diversity and composition of the Board;

d) Evaluating the performance of the Board members and Senior Management in the contextof the Company’s performance from business and compliance perspective;

e) Making recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract.

f) Delegating any of its powers to one or more of its members or the Secretary of theCommittee;

g) Recommend any necessary changes to the Board; and

DUTIES IN RELATION TO REMUNERATION MATTERS:

The duties of the Committee in relation to remuneration matters include:

• To consider and determine the Remuneration Policy based on the performance andalso bearing in mind that the remuneration is reasonable and sufficient to attract retainand motivate members of the Board and such other factors as the Committee shall deemappropriate all elements of the remuneration of the members of the Board.

REVIEW AND AMENDMENTS:

i. The NRC or the Board may review the Policy as and when it deems necessary.

ii. The NRC may issue guidelines procedures formats reporting mechanism and manualin supplement and better implementation to this policy if it thinks necessary.

iii. This Policy may be amended or substituted by the NRC or by the Board and as whenrequired and also by the Compliance Officer where there is any statutory changenecessitating the change in the policy.