CHD Developers Ltd.
|BSE: 526917||Sector: Infrastructure|
|NSE: N.A.||ISIN Code: INE659B01021|
|BSE LIVE 15:16 | 23 Feb||8.47||
|NSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
|Mkt Cap.(Rs cr)||96.22|
|Mkt Cap.(Rs cr)||96.22|
CHD Developers Ltd. (CHDDEVELOPERS) - Director Report
Company director report
CHD Developers Limited
Your Directors are pleased to present their Twenty Sixth Annual Report together withthe Audited Accounts and Financial Statements for the year ended 31st March 2016.
1. Financial Results
The summarized financial results of the Company for the year ended 31st March 2016 areas follows:
Keeping in view need to conserve resources for growth of the Company your Directorsare constrained not to recommend any dividend for the year under review.
3. Financial Summary or Highlights / Performance
During the financial year 2015-16 your Company achieved a turnover of Rs.16931.80 Lacs(Rs. 23320.68 Lacs in 2014-15) and Net profit (Post tax) for the year 2015-16 stood at Rs.885.23 Lacs (Rs. 788.58 Lacs in 2014-15). The Earning per share (EPS) is 0.78. The Companydoesn't propose to carry any amount to the reserves.
During the financial year 2015-16 your Company achieved a turnover of Rs. 18202.49 lacs(Rs. 24970.06 Lacs in 2014-15) and Net profit (Post tax) for the year 2015-16 stood at Rs.896.46 Lacs (Rs. 898.76 Lacs in 2014-15). The Earning per share (EPS) is 0.79.
The Company has managed to perform slightly better than last year and there has beenincrease in profits at standalone basis as compared to last Financial year During theyear there is decline in Turnover but the Company has managed to post better profits dueto decrease in finance cost and expenditure.
There has not been significant improvement in the financials due to factors beyondcontrol Owing to slow down in the whole real estate industry whereas Inspite ofchallenging environment during the year CHD has still performed exceptionally well onvarious fronts by way of concentration on the existing projects & new launches andpositioned itself way ahead to other established real estate players
During the year 2015-16 the Company initiated adoption of latest technology such asTunnel Formwork which shall drastically cut down the project cycle time and theconstruction cost.
Real Estate sector has been battling multifaced problems marked by slow growthdecreased absorption rates and low investor confidence but he Company is always embarkingon making its presence in the real estate industry and has solidified its brand image bylaunching two new projects both at Gurgaon; namely CHD EWay Towers and CHD Resortico i.e.1020000 square feet of area launched. Further after the period under review the Companywas awarded for Best Customer Satisfaction" by Golden Brick Awards 2016 Dubai forits image and to deliver on time.
The Company has sold approx. 470000 square feet of new area with an increased averageprice realization of Rs. 4767 per sq. ft. as compared to Rs. 4205 per sq. ft. last year.
4. Share Capital
During the year under review there has been no change in the paid up Equity ShareCapital of the Company and as on 31st March 2016 the paid up Equity Share Capital of theCompany was Rs. 227184572 (Rupees Twenty Two Crores Seventy One Lacs Eighty FourThousand Five Hundred and Seventy Two only).
No shares with differential voting rights stock or sweat equity shares were issued bythe company during the year under review.
In accordance with the provisions of section 152 of the Companies Act 2013 andArticles of Association of the Company Mr. Rajinder Kumar Mittal Whole time Director ofyour Company retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for reappointment subject to the approval of Shareholders of the
Company. A brief Resume of Mr. Rajinder Kumar Mittal is attached with the Notice ofAnnual General Meeting.
During the year under review the members of the Company approved the appointment ofMrs. Shashi Prabha Passi as an Independent Director for a period of 5 years who is notliable to retire by rotation.
The Company has received declarations from all the independent directors of the Companythat they meet the criteria of independence as provided under Section 149(6) of CompaniesAct 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
During the year under review there is no change in the Board of Directors of theCompany However the Company pursuant to the approval of members reappointed Mr. RajinderKumar Mittal Whole time Director and Mr. Gaurav Mittal Managing Director of the Companyfor a period of 5 years w.e.f. 2nd February 2016 and the remuneration was approved for aperiod of 3 years
The Company has a proper Board Evaluation Framework for performance evaluation ofIndependent Directors Board Non-Independent Directors and Chairman of the Company.Pursuant to this framework a process of evaluation was followed by the Board for its ownperformance and that of its committees and individual directors.
The Company has also devised a program for familiarization of independent directorswith the Company nature of the industry in which Company operate business model of theCompany and other related matters which has been placed on the website of the Company andcan be accessed at the link http://www.chddevelopers.com/pdf/Familiarization-id.pdf.
Following policies of the Company are attached herewith as Annexure 'A' and Annexure'B' respectively:-
i. Board Evaluation Framework; and
ii. Nomination & Remuneration Policy for Directors Key Managerial Personnel andother employees.
Key Managerial Personnel
The following are the Key Managerial Personnel of the Company:
1. Mr. Rajinder Kumar Mittal - Whole time Director
2. Mr. Gaurav Mittal - Managing Director
3. Mr. Sunil Kumar Jindal - Chief Financial Officer
4. Mr. Sachin Kumar - Company Secretary
During the year under review Ms. Ritu Goyal resigned as Company Secretary andCompliance officer w.e.f. 3rd day of February 2016 and Mr. Sachin Kumar joined as CompanySecretary and Compliance Officer of the Company w.e.f. 24th day of February 2016.
6. Material Changes Affecting Financial Position of the Company
No material changes or commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the company to which the financialstatements relate i.e. 31st March 2016 and the date of the Board's Report
M/s. Mohan & Mohan Chartered Accountants the Auditors of the Company hold officeuntil the conclusion of this Annual General Meeting and term of the Auditors expires atthis Annual General Meeting considering which the Board of directors on therecommendation of Audit Committee have proposed the appointment of M/s. AMRG &Associates Chartered Accountants as statutory auditors at the ensuing Annual GeneralMeeting for a period of five years from the conclusion of this Annual General Meeting tothe Conclusion of the Annual General Meeting to be held for the financial year 2020-2021subject to the ratification of appointment by the members of the Company at each AnnualGeneral Meeting.
The report of the Auditors is self-explanatory and does not contain any qualificationreservation or adverse remark and does not call for any comment.
M/s. Rahul Jain and Associates Practicing Cost Accountant was appointed by the Boardof Directors for conducting the audit of cost records of the Company for its"construction" activities for the financial year 2015-16.
Mohd. Nazim Khan Practicing Company Secretary was appointed by the Board of Directorsfor conducting the secretarial audit of the Company for the financial year 2015 -16. Thesecretarial audit report for the financial year 201516 is annexed herewith as Annexure 'C'to this report. The
Secretarial Audit Report doesn't contain any qualification reservation or adverseremark.
8. Management Discussion & Analysis and Corporate Governance Report
The Management's Discussion and Analysis Report and Corporate Governance Report for theyear under review together with a certificate from the Company's Statutory Auditorsconfirming compliance forms part of this Report
Corporate Governance report is annexed to this Report as Annexure 'D' and ManagementDiscussion and Analysis report is separately given under the Annual Report.
9. Extracts of Annual Return
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in Form MGT.9 is attached asAnnexure 'E'.
10. Directors' Responsibility Statement
As required by the provisions of section 134 (3)(c) of the Companies Act 2013 theDirectors confirm that:
In the preparation of the Annual Accounts the applicable Accounting Standardshave been followed along with proper explanation to material departure;
The Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were 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 or loss of the Company for the year under review.
The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
The Directors have prepared the annual accounts on a going concern basis.
The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively;
The Directors have devised proper system to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
11. Subsidiaries of the Company
As on 31st March 2016 the Company had following subsidiaries all incorporated inIndia:
* A part of total share capital of CHD Elite Realtech Private Limited and CHDBlueberry Realtech Private Limited is held by M/s CHD Infra Projects Private Limitedwhich itself is a 100% subsidiary of CHD Developers Limited.
** CHD Hospitality Private Limited is a 100% Subsidiary of CHD Developers Limitedthrough CHD Infra Projects Private Limited which holds 99.71 % shareholding of CHDHospitality Private Limited.
The Board has formulated a policy for determining Material Subsidiaries in terms ofRegulation 16 (1) (c) of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 which has been placed on the website ofthe Company and can be accessed at the link: http://www.chddevelopers.com/pdf/Policy-dms.pdf.
In terms of proviso to sub section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries is set out in the prescribed form AOC - 1.
12. Fixed Deposits
Pursuant to the provisions of the chapter V of the Companies Act 2013 the Company hasaccepted Fixed Deposits and as on 31st March 2016 such deposits stood at Rs. 2929.27 Lacsas against Rs. 1912.66 Lacs at the close of the preceding financial year. There wereunclaimed deposits aggregating Rs. 156763/- pertaining to 62 depositors as on that date.There is no default in repayment of deposits or payment of interest thereon during theyear.
13. Particulars of Employees and Other Additional Information
The information required under Section 197(12) of the Companies Act 2013 and rule 5(2)and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)
Rules 2014 is given in Annexure 'F' to this report and form part of this Report.
14. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of TheCompanies (Accounts) Rules 2014 is attached as Annexure G.
15. Listing at Stock Exchange
The Equity Shares of the Company continue to be listed on BSE Limited. The annuallisting fee for the current year has been paid to BSE Limited.
Corporate Social Responsibility (CSR)
Your Company has always laid emphasis on progress with social commitment. We believestrongly in our core values of empowerment and betterment of not only the employees butalso our communities. Following this principle the Company had laid the foundation of acomprehensive approach towards promoting and facilitating various aspects of oursurrounding communities.
The Board has approved a policy for Corporate Social Responsibility and same has beenuploaded on the website of the Company i.e. www.chddevelopers.com.
During the year the Company has spent Rs. 34.44 Lacs around 2.28% of the average netprofits of last three financial years on CSR activities. The details of CSR activities aregiven under Annexure 'H'.
The Audit Committee of the Company comprises of Mr. Pran Nath (Chairman) Mr. M.S.Kapur and Mr. Rajinder Kumar Mittal as other members of the Committee.
Vigil Mechanism & Whistle Blower Policy
The Company has a Vigil mechanism and Whistle blower policy under which the employeesare free to report violations of applicable laws and regulations and the Code of Conduct.The reportable matters may be reported to the Vigilance & Ethics Officer whichoperates under the supervision of the Audit Committee as protected disclosures through ane-mail or dedicated telephone line or a written letter. Employees may also reportdirectly to the Chairman of the Audit Committee.
The Whistle Blower Policy and Vigil Mechanism have been placed on the website of theCompany and can be accessed at the link
Risk Management Policy
The Board has approved and implemented risk management Policy of the Company includingidentification and element of risks. The Risk Management is overseen by the AuditCommittee of the Company on a continuous basis. The Committee oversees Company's processand policies for determining risk tolerance and review management's measurement andcomparison of overall risk tolerance to established levels. There are no significantelement of risk which in the opinion of the Board may threaten the existence of theCompany However any risks identified will be systematically addressed through mitigatingactions on a continuous basis.
Policy on prevention prohibition and redressal of sexual harassment at workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act
2013 and the Rules there under. The Policy aims to provide protection to employees atthe workplace and prevent and redress complaints of sexual harassment and for mattersconnected or incidental thereto with the objective of providing a safe workingenvironment where employees feel secure. The Company has also constituted an InternalComplaints Committee to inquire into complaints of sexual harassment and recommendappropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2015-16.
Policy on Related Party Transactions
The Board of the Company has adopted the Policy and procedure with regard to RelatedParty Transactions. The policy envisages the procedure governing the materiality ofRelated Party Transactions and dealing with Related Party transactions required to befollowed by Company to ensure compliance with the Law and Regulation. Related PartyTransaction Policy has been placed on the website of the Company and can be accessed atthe link: http://www.chddevelopers.com/pdf/Related-Party-Transaction-Policy. pdf.
Contracts and Arrangements with Related Parties
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of the business and on an arm'slength basis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the Company on materiality of related party transactions.Accordingly no transactions are being reported in Form AOC-2 in terms of Section 134 ofthe Companies Act 2013 read with Rules made thereunder.
The policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board has been placed on the website of the Company.
Your directors draw attention of the members to Note No 25 of financial statementswhich sets out related party disclosures.
Meetings of Board of Directors
During the year under review 9 (Nine) meetings of Board of Directors were held. Furtherdetails regarding the Board Meetings have been provided under Corporate Governance Reportannexed with this Report. The maximum interval between any two meetings did not exceed 120days as prescribed in the Companies Act 2013
Particulars of Loan given Investments made Guarantee given and Security Provided
Particulars of loan given investments made guarantees given and securities providedalong with the purpose for which loan guarantee or security is proposed to be utilized bythe recipient are provided in standalone financial statements (please refer note no. 1011 25 and 27 to the standalone financial statements).
Internal Financial Controls and its Adequacy
The Company has in place adequate internal financial controls with reference tofinancial statements and with the size scale and complexity of its business operations.During the year such controls were tested and no reportable material weakness in thedesign or operation was observed.
The scope and functions of Internal Auditor are defined and reviewed by the Auditcommittee. The Internal Auditor reports to the Chairman of the Audit Committee.TheInternal Auditor assesses opportunities for improvement of business processes systems andcontrols to provide recommendations which can add value to the organization.
Your directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year underreview:-
i. Neither the Managing Director nor the Whole Time Director of the Company receive anyremuneration or commissions from any of its subsidiaries.
ii. No significant or material orders were passed by the regulators or courts ortribunals which impact the going concern status and company's operations in future.
Your Directors place on record their appreciation of the support extended by itsemployees Bankers Customers and various Government Agencies. The Board also wishes tothank the shareholders for their unstinted support.
Board Evaluation Framework
Current dynamics of Domestic and International business requires that the officers'in-charge of day to day business of the Company are well qualified well trained &equipped constantly evalued so as to keep pace with the challenges of ever changing socioeconomic scenario.
Such officers' in the parlance of an incorporated entity are the Board of Directors'.
The Board of Directors' of any diversified company shoulders
The new Companies Act 2013 and as per the Corporate Governance norms issued by SEBIrequire every listed company to establish a Board Diversity Policy to ensure that there iswide-ranging experience and diversity on the Board. While following the spirit ofdiversity the Company
Board's Training Policy
The Company recongnises that the present complex business environment requires that theBoard of the Company is trained from time to time to equip it with the latest trends inthe domestic and International market relating to technology best practices of corporategovernance environmental protection Taxation legal and financial Laws HR policiesMarketing Risk assessment and minimization.
Through the training policy the Company intends to achieve the following targets:
Development of understanding in which the Board operate and the associatedresponsibilities;
Providing an overview of the knowledge and
Board's Evaluation Policy
As per the applicable provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Nomination and Remuneration Committee (the"Committee") shall lay down the evaluation criteria for performance evaluationof Independent Directors and the not only the responsibility of growth and profitabilityof the business but also the impact of the business of the Company on the society andeconomy under which they operate.
In light of the above the Company has devised this policy of Board Evaluationframework which inter alia includes the policy of Board's diversity Board's Training andEvaluation of performance of the Board of Directors including Independent Directors.maintains that the appointments to the Board should be based on merit as well ascomplementing and expanding the skills knowledge and experience of the Board as acollective body. competences expected from Directors in today's environment;
Develop skills that contribute to the creation of an effective Board culture andperformance;
Hone the ability to challenge executives through positive exchanges focused onthe key issues that underpin corporate performance.
The Company would from time to time organize seminars classroom sessions and workshopsto achieve the purpose of its Training Policy and at the same time ensuring the complianceof relevant Laws include SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Board. Further the Board is required to monitor and review Board Evaluation Framework.This Framework shall contain the details of Board's self-evaluation framework (includingall Committees of the Board and individual directors).
The following process is established to carry out the evaluation of the Board ofDirectors:
1. Independent Directors may at their meeting review the performance of the Chairmanthe Non-Independent Directors and the Board;
2. Nomination and Remuneration Committee may at its meeting carry out the evaluationof every Director's performance. The Committee while doing so may also consider theoutcome of review by Independent Directors;
3. The Board may evaluate the performance of the Board the Committees as defined inthis Policy and each Director and while doing so may also consider the inputs receivedfrom the Nomination and Remuneration Committee and the review by Independent Directors.
Some of the assessment criteria that should be considered by the Board Nomination andRemuneration Committee and Independent Directors for evaluation of the performance are asfollow -
I. Assessment Criteria for performance evaluation of Board
Size structure diversity experience skills and expertise of the Board
Willingness to spend time to discuss the matters put up before the Board fordiscussion
Development of Strategy and Business plans at appropriate time and check itseffectiveness
Proper number of committees as required by legislation and guidelines
Guidance to drive financial and business performance of the Company and periodicreview of the same
Strategic and business risk evaluation assessment and timely action
Corporate Governance standards adopted by the Board and its implementation
Understanding roles and responsibilities of Directors
Code of conduct and Ethics and adherence thereto
Independence of Board functioning
II. Assessment Criteria for performance evaluation of Committees
In addition to the principles stated above for evaluation of Board to the extentapplicable to the respective committee the following criteria may also be kept in mindfor evaluation of committee -
Appropriateness of the responsibilities delegated to the committee
Corporate Governance standards adopted and implemented by the Committee
Implementation of the policies and procedure according to changing businesspractices and market conditions
Adequacy of terms of reference stated by the Board for the Committee and therole played by the committee according to such terms of reference
Effectiveness of suggestions and recommendation made to the Board
III. Assessment Criteria for performance evaluation of Non-Independent DirectorEvaluation of Non-Executive Directors
Participation at the Board/Committee meetings and willingness to spend timeduring the meeting
Integrity and maintaining of confidentiality
Knowledge and expertise
Independent judgment in relation to decision making
Understanding about roles responsibilities and disqualification as a director
Evaluation of Executive Directors
In addition to the parameter decided for Non-Executive Directors evaluation ofExecutive Directors should also be based on following parameters -
Skill expertise experience knowledge about the operations and products of theCompany
Development and management of business plan operational plans and financialaffairs of the Company
Achievement of financial/business targets prescribed by the Board
Managing relationship with the Board management team bankers and otherstakeholders
Establishment of an effective organization structure to ensure management focuson key functions necessary for the growth of the Company
Development of policies and strategies aligned with industrial practice need ofshareholders customers employees and other stakeholders
Ensuring to provide information on item requiring Board decisions withrecommendation based on supporting documents and thorough study
IV. Assessment Criteria for performance evaluation of Independent Director
In addition to the criteria laid down for Non-Executive Directors for performanceevaluation of an Independent Director other criteria like objective evaluation of Board'sperformance unbiased opinion on various matters compliance of Code of Conduct andEthics Code for Independent Directors Insider Trading Code etc. may also be considered.
V. Assessment Criteria for performance evaluation of Chairman
In addition to the above the following criteria may be kept
in mind while evaluating the performance of the Chairman:
Relationship and Communication within the Board
Promoting constructive debate and discussion in the meeting
Effectiveness of communication with the shareholders and other stakeholders
Promoting effective participation of all Board members in decision makingprocess
Promoting shareholders confidence in the Board
Ensuring ease of raising issue and concern by the Board Members
Separate Meeting of the Independent Directors
As required by the provisions of Schedule IV to the Act and the provisions ofregulation 25 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Independent Directors of the Company shall hold at least one meeting in a yearwithout the attendance of Nonindependent Directors and members of the management.
The meeting shall:
review the performance of Non-independent Directors and the Board as a whole;
review the performance of the Chairman of the Company taking into account theviews of Executive Directors and Non-executive Directors;
assess the quality quantity and timeliness of flow of information between theCompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
This meeting could be held prior or after the Board Meeting. The IndependentDirectors are free to call such meeting at any point of time as desired.
Familiarization program for Independent Directors
As required by the provisions of Schedule IV to the Act and as per the provisions ofregulation 25 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Company is required to develop a Familiarization Program for the Independent Directorsof the Company.
The Company will impart Familiarization Programmes for new Independent Directorsinducted on the Board
The Company reserves its right to amend or modify this Policy in whole or in part atany time without assigning any reason whatsoever. However no such amendment or of theCompany. The Familiarization Programme of the Company will provide information relating tothe Company. The programme also intends to improve awareness of the Independent Directorson their roles rights and responsibilities towards the Company. Further theFamiliarization Programme should also provide information relating to the financialperformance of the Company and budget and control process of the Company.
Modification will be binding on the Directors and employees unless the same iscommunicated in the manner described as above.
Nomination & Remuneration Policy
At all levels and at all times monetary compensation has been if not the sole but themost important motivational aspect for getting the job fulfilled under any given businessscenario.
It is the endeavor of CHD Developers Limited ("Company") that its Nomination& Remuneration Policy should represent the mode in which the Company carries out itsbusiness practices i.e. fair transparent inclusive and flexible.
The Company strives that its Remuneration Policy should
Section 178 of the Companies Act 2013 requires every listed company and such class orclasses of companies as may be prescribed to establish a Nomination and RemunerationCommittee ("Committee") and that such Committee shall formulate the criteria fordetermining qualifications positive attributes and independence of a director andrecommend to the Board a policy relating to the remuneration for the directors keymanagerial personnel senior management and other employees.
The Committee shall while formulating the remuneration policy shall ensure that
the level and composition of remuneration is reasonable and sufficient toattract retain and motivate Directors of the quality required to run the companysuccessfully;
relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
remuneration to Directors key managerial personnel and senior managementinvolves a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the company and its goals:
This policy is divided into three parts -
PART A - Appointment of Director KMP and Senior Management Personnel
attract motivate improve productivity and retain manpower by creating a congenialwork environment encouraging initiatives personal growth and team work and inculcatinga sense of belonging and involvement besides offering appropriate remuneration packagesand superannuation benefits
This Nomination & Remuneration Policy applies to directors Key ManagerialPersonnel (KMP) Senior Management and other employees of the Company.
PART B - Board Diversity
PART C - Remuneration to Director KMP Senior Management Personnel and otheremployees
Part A - Appointment of Director KMP and Senior Management Personnel
a. 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
b. 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.
c. Term and Tenure of Director Independent Director Managing Director Whole TimeDirector and KMP shall be governed by the provisions of Companies Act 2013 as may be inin force and amended from time to time.
d. Due to reasons for any disqualification mentioned in the Companies Act 2013(hereinafter referred to as 'the Act') or under any other applicable Act rules andregulations thereunder the Committee may recommend to the Board with reasons recorded inwriting removal of a Director KMP or other employee subject to the provisions andcompliance of the said Act rules and regulations.
e. The Director KMP shall retire as per the applicable provisions of the Act and theprevailing policy of the Company. The Board will have the discretion to retain theDirector KMP Senior Management Personnel in the same position/ remuneration or otherwiseeven after attaining the retirement age for the benefit of the Company
f. The remuneration/ compensation / commission/ increment etc. to the Directors and KMPwill be determined by the Committee and recommended to the Board for approval. Theremuneration / compensation / Commission/increment etc. shall be subject to the prior/postapproval of the shareholders of the Company and Central Government wherever requiredunder the Companies Act 2013.
g. Human Resource Department of the Company in consultation with Chairman/ManagingDirector of the Company is empowered to appoint the candidates in the Senior Management interms of the criteria prescribed herein and report their appointment to the Committee. TheCommittee may also identify and recommend to the Board who may be appointed in seniormanagement in accordance with the criteria laid down.
h. Where any insurance is taken by the Company on behalf of its Whole time DirectorManaging Director Chief Executive Officer Chief Financial Officer the Company Secretaryand any other employees for indemnifying them against any liability the premium paid onsuch insurance shall not be treated as part of the remuneration payable to any suchpersonnel. Provided that if such person is proved to be guilty the premium paid on suchinsurance shall be treated as part of the remuneration
Part-B - Board Diversity
The Board shall consist of such number of Directors including at least one womanDirector and not less than fifty percent of the Board of Directors comprising nonexecutivedirectors as is necessary to effectively manage the Company of its size.
When the Chairman of the Board is a non-executive director at least one-third of theBoard should comprise independent directors and in case the company does not have aregular non-executive Chairman or in case the regular nonexecutive Chairman is a promoterof the company at least half of the Board should comprise independent directors.
The Committee will lead the process for Board appointments. All Board appointments willbe based on the skills diverse experience independence and knowledge which the Board asa whole requires to be effective. The Committee shall seek to address Board vacancies byactively considering candidates that bring a diversity of background and opinion fromamongst those candidates with the appropriate background and industry or related expertiseand experience The candidates will be considered against objective criteria having dueregard to the benefits of diversity on the Board.
Additionally the Board may consider appointment of experts from various specializedfields such as finance law information technology corporate strategy marketing andbusiness development international business operations management etc. so as to bringdiversified skill sets on board or succeed any outgoing director with the same expertise.
Part-C - Remuneration to Director KMP Senior Management Personnel And Other EmployeesA. Remuneration to Managing Director/Whole-time Director
The Company strives to provide fair compensation to Directors KMP Senior ManagementPersonnel and other employee taking into considerations following factors -
Company's' performance vis a vis industry
Scope of duties roles and responsibilities
Skill knowledge performance/track record
Core performance requirements and expectations of individuals
Legal and industrial Obligations
Managing Director/ Whole-time Director shall be eligible for remuneration as may beapproved by Shareholders of the Company on the recommendation of the Committee and theBoard of Directors.
The remuneration payable to any one managing director or whole-time director shall notexceed 5% of the net profits of the company and if there is more than one such directorremuneration shall not exceed 10% of the net profits to all such directors taken together.
The break-up of the pay scale and quantum of allowances perquisites includingemployer's contribution to PF pension scheme medical expenses car & driver facilityetc. shall be decided and approved by the Board on the recommendation of the Committee.The remuneration may also be paid in the form of Profit linked Commission but with theoverall limits as stated above.
If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managing Director/Whole-time Director inaccordance with the Schedule V and other applicable provisions of the Act and if it is notable to comply with such provisions then with the previous approval of the CentralGovernment.
Provisions for excess remuneration
If any Managing Director/Whole-time Director draws or receives directly or indirectlyby way of remuneration any such sums in excess of the limits prescribed under the Act orwithout the prior sanction of the Central Government where required he / she shallrefund such sums to the Company and until such sum is refunded hold it in trust for theCompany. The Company shall not waive recovery of such sum refundable to it unlesspermitted by the Central Government.
B. Remuneration to Non-Executive and Independent
The Non-executive and Independent Directors of the Company shall be paid sitting feesas approved by the Board in terms of the provisions of the Act and no sitting fee is paidto Non-executive Non Independent Directors.
Pursuant to the provisions of the Act an Independent Director shall not be entitled toany stock option of the Company.
C. Remuneration to KMP Senior Management other Employees
Apart from the Directors remuneration along with annual increment of all other KMPSenior Management Personnel and other employees of the Company shall be determined by HRdepartment in consultation with Managing Director/ Whole-time Directors of the Company.
The remuneration and increment thereof should be in line with company's philosophy toprovide fair compensation to employees based on their experience roles andresponsibilities performance track record legal obligation industry benchmark jobcomplexity etc.
The various remuneration components such as basic salary allowances perquisites etcmay be combined to ensure an appropriate and balance remuneration package.
The Incentive pay shall be decided by HR department of the Company based on the HRpolicies in relation thereto and considering the balance between performance of theCompany and performance of the Key Managerial Personnel Senior Management Personnel andother employee.
The Committee may recommend to the Board a policy for granting Stock options to KMPSenior Management Personnel and other employees in line with the provisions of the ActSEBI regulation and the provision of any other applicable laws.
This Remuneration Policy shall apply to all existing and future employees of theCompany.
The Company reserves its right to amend or modify this Policy in whole or in part atany time without assigning any reason whatsoever. However no such amendment ormodification will be binding on the Directors and employees unless the same iscommunicated in the manner described as above
Secretarial Audit Report
FORM NO. MR-3
SECRETARIAL AUDIT REPORT
For the Financial Year ended March 31 2016
[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration
Personnel) Rules 2014]
M/s CHD Developers Limited
SF-16-17 1st Floor Madame Bhikaji Cama Bhawan 11 Bhikaji Cama Place
New Delhi-110066 India
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by CHD Developers Limited(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon.
Based on our verification of CHD Developers Limited books papers minute books formsand returns filed and other records maintained by the company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31stMarch 2016 complied withthe statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance-mechanism in place to the extent in the manner and subjectto the reporting made hereinafter.
We have examined the books papers minute books forms and returns filed and otherrecords maintained by CHD Developers Limited ("the Company) for the financial yearended on 31stMarch 2016 according to the provisions of:
i. The Companies Act 2013 (the Act) and the rules made thereunder;
ii. The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;
iii. The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
iv. Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
v. The following Regulations prescribed under the Securities and Exchange Board ofIndia Act 1992 ('SEBI Act');
a. The Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations 2011;
b. The Securities and Exchange Board of India (Prohibition
of Insider Trading) Regulations 1992;
c. The Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations 2009;
d. The Securities and Exchange Board of India (Registrars
to an Issue and Share Transfer Agents) Regulations 1993 regarding the Companies Actand dealing with client;
vi. Other Applicable Laws on the basis of confirmation by way of ManagementRepresentation Letter received from the management:
1. Shops and Commercial Establishments Act 1958 read with Shops and CommercialEstablishments Rules with respect to office situated at:
a) SF-16-17 1st Floor Madame Bhikaji Cama Bhawan 11 Bhikaji Cama Place NewDelhi-110066 India
2. Employees Provident Fund and Miscellaneous Provisions Act 1952 The EmployeesProvident Funds Scheme 1952 The Employees Deposit-Linked Insurance Scheme 1976 &The Employees Pension Fund Scheme 1995.
3. The Contract Labour (Regulation & Abolition) Act - 1970 and Rules framedthereunder with respect to construction site situated at:
a. SF-16-17 1st Floor Madame Bhikaji Cama Bhawan 11 Bhikaji Cama Place NewDelhi-110066 India
b. In Gurgaon:
i. Avenue 71 Sohna Road Sector 71 Gurgaon Haryana
ii. CHD Vann Sohna Road Sector 71 Gurgaon Haryana
iii. Golf Avenue 106 Sector-106 Gurgaon Haryana
iv. CHD EWay Towers Sector 109 Dwarka Expressway Gurgaon
v. CHD Resortico Sector-34 Sohna South of Gurgaon Haryana
c. In Karnal:
(i) CHD City Sector-45 Karnal Haryana
4. The Employees State Insurance Act 1948 Employees State Insurance (Central) Rules1950 and Employees State Insurance (General) Regulations 1950
5. Equal Remuneration Act 1976 and Equal Remuneration Rules 1976
6. Maternity Benefit Act 1961 read with State Maternity Benefit Rules framedthereunder.
7. Minimum Wages Act 1948 read with State Minimum Wages Rules framed thereunder.
8. The Payment of Gratuity Act 1972 read with State Payment of Gratuity Rules framedthereunder.
9. Child Labour (Prohibition and Regulation) Act 1986 read with Child Labour(Prohibition and Regulation) Rules 1988.
10. Building and Other Construction Workers (Regulation of Employment & Conditionsof Service) Act 1996.
11. Payment of Wages Act 1936 read with State Payment of Wages Rules framedthereunder.
12. The Payment of Bonus Act 1965 read with the Payment of Bonus Rules 1975
13. The Sexual Harassment of women at workplace (Prevention Prohibition &Redressal) Act 2013
14. Public Liability Insurance Act
15. Professional Tax Act
We have also examined compliance with the applicable clauses of the following:
i. The Secretarial Standards formulated by the Institute of Company Secretaries ofIndia and notified by the Central Government.
ii. The Listing Agreement entered into by the Company with Bombay Stock Exchange;
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines mentioned above subject to the following facts:
1. The Company vide its management representation letter dated 01.08.2016 stated thatthese related party transactions were entered into with related parties on arm's lengthbasis and in the ordinary course of business and therefore these transactions are notcovered by virtue of third proviso to sub-section (1) of Section 188 of the Act.
2. As confirmed by the management vide its management representation letter dated01.08.2016 pursuant to the provisions of the Sexual Harassment of Women at Work Place(Prevention Prohibition and Redressal) Act 2013 read with Rules as amended upto datethe Company is in the process of submitting the annual reports to the District Officerpursuant to Section 21 with respect to office situated at New Delhi and other constructionsite situated at various places situated in Haryana.
3. As confirmed by the management vide its management representation letter dated01.08.2016 The Company stated that the compliance of the Contract Labour (Regulation& Abolition) Act 1970 is ensured by the respective contractor at the respectiveconstruction site situated at various places in Haryana.
4. As confirmed by the management vide its management representation letter dated01.08.2016 the Company stated that the Company is regular in ensuring the compliance ofBuilding and Other Construction Workers (Regulation of Employment & Conditions ofService) Act 1996 with respect to all the projects.
5. As confirmed by the management vide its management representation letter dated01.08.2016 the Company stated that the Company is not discharging the contaminated waterat the public drains/rivers. The Company has efficient water treatment plants at theoffice situated at Delhi and at respective construction site situated at various places inHaryana (if applicable).
6. As per Note 20 of the Audited Financial Statement dated 29.05.2015 read withAnnexure-H of the Directors Report dated 29.05.2015 the Company has incurred theexpenditure related to the Corporate Social Responsibility pursuant to Section 135 to theextent of INR 2750000 in financial year 2014-15.
7. As per Note 4 and 25 of the Audited Financial Statement dated 29.05.2015 read withPara 11 of the Directors Report dated 29.05.2015 it was observed that the Company hasaccepted the deposit from shareholders and public while the Statutory Auditors of theCompany vide its Audit Report dated 29.05.2015 has stated that the Company has compliedwith the provisions of Section 73-76 or any other relevant provisions of the Act and Rulesframed thereunder with respect regards to the said deposits.
8. It was observed that there are 62 cases amounting to Rs. 156763 which is pendingfor payment of interest on deposit accepted by the Company. As confirmed by the managementvide its management representation letter dated 01.08.2016 the Company stated that theCompany has issued cheques towards payment of interest on deposit but no person stands forhis claim amount though the Company is ready to pay.
We further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non Executives Directors Independent Directors and the WomenDirectors. The changes in the composition of the Board of Directors that took place duringthe period under review were carried out in compliance with the provisions of the Act.
Adequate notice along with detailed agenda were given to all directors for the BoardMeetings and a system exists for seeking and obtaining further information andclarification on agenda items before the meeting and for meaningful participation at themeeting.
As per the minutes maintained by the Company for the Board/ Committee and Shareholderswe noticed that most of the decisions were approved by the respective Board/ Committee andShareholders without any dissent note.
We further report that we cannot comment on the adequate systems and processes in theCompany commensurate with the size and operations of the Company to monitor and ensurecompliance with applicable laws rules regulations and guidelines because we have notphysically visited the project site located at various places at Haryana.
We also report that the compliances of other applicable laws as listed in Para (vi)above are based on the management representation letter.
For MNK & Associates
Mohd Nazim Khan
FCS: 6529; CP-8245
Note: This report is to be read with our letter of even date which is annexed asAnnexure-I and form forms an integral part of this report.
CHD Developers Limited
SF-16-17 1st Floor Madame Bhikaji Cama Bhawan
11 Bhikaji Cama Place
New Delhi-110066 India
1. Maintenance of secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification goes done on the random test basis to ensure the correct facts are reflectedin secretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesstandards is the responsibility of the management. Our examination was limited to theverification of procedures on random test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.
For MNK & Associates
Mohd Nazim Khan
FCS: 6529; CP-8245