We hereby present the Annual Report together with the Audited Accounts of our businessand operations for the financial year ended 31st March 2017.
FINANCIAL HIGHLIGHTS (` in Lakhs)
|Particulars ||For the year ended 31st March 2017 ||For the year ended 31st March 2016 |
|Gross sales (including excise duty) ||205330 ||216207 |
|Profit before interest depreciation and tax ||19116 ||27182 |
|Interest and finance charges ||23800 ||25483 |
|Profit/(Loss) before depreciation and tax ||(4684) ||1699 |
|Depreciation ||17487 ||19931 |
|Exceptional Profit ||9459 ||- |
|Profit/(Loss) before tax & after Exceptional Profit ||(12712) ||(18231) |
|Profit/(Loss) for the year (Before Other Comprehensive Income) ||(12712) ||(18231) |
|Balance brought forward from previous year ||(34890) ||(16655) |
|Amount available for appropriation ||(47603) ||(34890) |
|Balance carried forward to the next year ||(47603) ||(34890) |
Note: The financial statements for the year ended 31st March 2016 has beenrestated in accordance with Ind AS and necessary adjustments were made as and wherenecessary.
RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
During the financial year at standalone level your Company reported a total income of `207128 Lakhs in 2016-17 (before exceptional income of ` 9459 Lakhs) compared to `218598 Lakhs in 2015-16 EBITDA of ` 19116 Lakhs (before exceptional income of `9459 Lakhs) and a net loss of ` 12712 Lakhs (after considering the effect ofexceptional items). During the year direct export turnover was
` 12006 Lakhs compared to ` 10964 Lakhs during the preceeding year.
Lower capacity utilization continues to impact the performance of the Company. YourDirectors are pleased to report that consistent efforts and policy to cut down the costhas resulted in reduction in per unit cost and consequently enable the company to achievebetter margin.
DIVIDEND & RESERVE
Your Directors do not recommend any dividend for the year ended 2016-17. Furtherduring the year under review no amount was transferred to General Reserve.
As on 31st March 2017 your Company does not have any subsidiary company.
The Company has joint venture agreement with Trakya Cam Sanayi II AS in HNG Float GlassLtd.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated audited financial statements and the relatedinformation of the Company are available on our website i.e. www.hngil.com. Thesedocuments are also available for inspection during business hours by the shareholders ofthe Company at the Registered Office.
INDIAN ACCOUNTING STANDARDS (IND AS)
During the year under review your Company has adopted Ind AS by replacing the existingIndian GAAP as per notification dated 16th February 2015 on the Companies (IndianAccounting Standards) Rules 2015 issued by the Ministry of Corporate Affairs.
The following are the areas which had an impact on account of transition to Ind AS:
1. Business combinations including recording of intangibles and deferred taxes andaccounting for common control.
2. Fair valuation of certain financial instruments
The reconciliations and descriptions of the effect of transition from IGAAP to Ind AShave been provided in the notes to accounts in the Standalone and Consolidated financialsystem.
Pursuant to the amalgamation of Ace Glass Containers Limited with the Company2141448* shares and 1368872* shares having face value of ` 10 each(corresponding to 10707240 shares and 6844360 shares having face value of ` 2each) were issued to HNG Trust and Ace Trust respectively. At present HNG Trust & AceTrust are holding 7797240 & 6844360 shares respectively. In terms of anundertaking given to the BSE Limited the Company is required to make disclosurespertaining to utilisation of proceeds of shares allotted to the said Trusts until they areextinguished. Entire Shareholding of Ace Trust and 7662490 Shares of HNG Trust has beenpledged in favour of SBICAP Trustee Company Limited in compliance of Corrective ActionPlan (CAP) approved by the Joint Lender Forum.
*The Company's shares were sub-divided from ` 10 per share to ` 2 pershare w.e.f. 13th November 2009.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 Shri MukulSomany (DIN: 00124625) Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible have offered himself for re-appointment. The Boardrecommends his re-appointment.
During the year under review Shri Rakesh Kumar Sharma (DIN: 02166966) ExecutiveDirector and Shri Sujit Bhattacharya (DIN: 00059282) Independent Director has resignedfrom the Directorship of the Company w.e.f 28th February 2017 and 31st March 2017respectively. The Board places on record its sincere appreciation for the guidance andvaluable services rendered by them during their association as Directors of the Company.
Shri Narayanaswami Sitaraman (DIN:01114920) was appointed as an Additional IndependentDirector of the Company w.e.f 13th April 2017. Necessary declaration and consent havebeen received from him under the relevant provisions of the Companies Act 2013 andrequisite notices under Section 160 of the Act have been received from a member proposinghis appointment as an Independent Director of the Company.
Shri Ratna Kumar Daga (DIN: 00227746) Shri Dipankar Chatterji (DIN: 00031256) ShriNarayanaswami Sitaraman (DIN: 01114920) & Smt. Rita Bhimani (DIN: 07106069) are theIndependent Directors of the Company.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of Independence as prescribed under Section 149(6)of the Companies Act 2013. Role responsibilities and duties of Independent Director arebeing uploaded in the Company's website at the linkhttp://www.hngil.com/report/TermsofAppointmentofIndependent Director.pdf.
Pursuant to the applicable provisions of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a structured questionnaire wasprepared after taking into consideration the various aspects of the Board's functioningcomposition of the Board its Committees culture execution and performance of specificduties obligations and governance. The Company has devised a Policy for performanceevaluation of Independent Directors and Board which include criteria for performanceevaluation of the non-executive directors and executive directors.
The performance evaluation of the Independent Directors Chairman and theNon-Independent Directors was carried out. The Board of Directors expressed theirsatisfaction with the evaluation process.
The following policies of the Company are attached herewith and marked as "AnnexureI" : A. Nomination & Remuneration Policy B. Board Evaluation Policy. Thedetails of Key Managerial Personnel of the Company are as follows:-
|Name of Key Managerial Personnel ||Designation |
|1 Shri Sanjay Somany ||Vice Chairman & Managing Director |
|2 Shri Mukul Somany ||Vice Chairman & Managing Director |
|3 Shri Rakesh Kumar Sharma (Upto 28th February 2017) ||Executive Director |
|4 Shri Bimal Kumar Garodia ||Chief Financial Officer |
|5 Shri Ajay Kumar Rai ||Company Secretary |
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act the Directors hereby confirm that:
a) In the preparation of the annual accounts for the year ended 31st March 2017 theapplicable Accounting Standards had been followed along with proper explanation relatingto material departures.
b) e Directors have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give true and fairview of the state of affairs of the Company as at 31st March 2017 and of the loss of theCompany for the year ended on that date.
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
d) The Directors have prepared the annual accounts on a going concern basis'.
e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
The Company has been practising the principles of good corporate governance with a viewto achieve transparent accountable and fair management. The report on CorporateGovernance along with the Certificate of the Auditors M/s Lodha & Co. CharteredAccountants confirming the compliance of Corporate Governance as stipulated in Regulation34(3) read with Schedule V of the SEBI (Listing Obligations & Disclosures Requirement)Regulations 2015 forms an integral part of the Annual Report.
Our Corporate Governance Report for the financial year 2017 forms part of this AnnualReport.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
The contracts/arrangements/transactions entered by the Company during the financialyear with the related parties were in the ordinary course of business and on an arm'slength basis. All the related party transactions are with the approval of the AuditCommittee and are periodically placed before the Board for review. During the year underreview the Company has not entered into any contract/arrangement/transactions with relatedparties which could be considered material in accordance with the policy of the Company onmateriality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://www.hngil.com/report/policyonrelatedpartytransactions.pdf.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee has been formulated and comprises of ShriSanjay Somany Shri Mukul Somany and Smt. Rita Bhimani as members. Since the Company hassuffered losses in the previous financial years as well as in the current financial yearno expenditure was incurred on CSR activities.
The CSR Policy may be accessed on the Company's website at the linkhttp://www.hngil.com/report/POLICYONCORPORATESOCIALR ESPONSIBILITY.pdf.
The repayment of long term loans of the Company is realigned as per the CorrectiveAction Plan (CAP) formulated by Joint Lender Forum (JLF) as per the RBI Guidelines. Duringthe year under review your Company has complied with all the repayment schedule andhonoured all its obligation on time.
MANAGEMENT DISCUSSION AND ANALYSIS
Management's Discussion and Analysis under Schedule V read along with the Regulation34(3) of the SEBI (Listing Obligations & Disclosures Requirement) Regulations ispresented in a separate section forming part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements have been prepared in accordance with the provisionsof the Companies Act 2013 and with Indian Accounting Standard 110 read with IndianAccounting Standard 28 notified by the Ministry of Corporate Affairs and forms part ofthis Annual Report.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the FinancialStatements of Subsidiaries/ Associate Companies/Joint Ventures is given in Form AOC-1.RISK MANAGEMENT
Risk management is embedded in your Company's operating framework. The Company managesand monitors various risks and uncertainties that can have some adverse impact on theCompany's business. Your Company believes that managing risks helps in maximising returns.Your Company is giving major thrust in developing and strengthening its internal audit sothat risk threat can be mitigated. The Company's approach to addressing business risks iscomprehensive and includes periodic review of such risks and a framework for mitigatingcontrols and reporting mechanism of such risks.
The Company has a formal Risk Management Policy. The Board of Directors from time totime review the same.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
Your Company has a comprehensive and effective internal control andriskmitigation system including internal financial control for all the majorprocesses to ensure reliability of financial reporting timely feedback on operational andstrategic goals compliance with policies procedures law and regulations safeguardingof assets and economical and efficient use of resources. The Company's internal controlsystem is commensurate with its size scale and complexities of its operations. The mainthrust of internal audit is to test and review controls appraisal of risks and businessprocesses besides benchmarking controls with best practices in the industry. The AuditCommittee of the Board of Directors of the Company actively reviews the adequacy andeffectiveness of the Internal Control System and suggests improvements wherever necessary.The Company has a robust Management Information System (MIS) which is an integral part ofthe control mechanism.
AUDITORS AND AUDITORS' REPORT
Pursuant to Section 139 of the Companies Act 2013 M/s Lodha & Co CharteredAccountants would complete their current term as Statutory Auditors of the Company at theconclusion of the ensuing 71st Annual General Meeting of the Company. Accordingly theBoard of Directors has considered and recommended the appointment of M/s DoshiChatterjee Bagri & Co LLP Chartered Accountants (Firm Registration Number325197E/E300020) as Statutory Auditors of the Company for a period of five (5) consecutiveyears from the conclusion of 71st Annual General Meeting till the conclusion of the 76thAnnual General Meeting of the Company subject to ratification by the shareholders at eachAnnual General Meeting.
M/s Doshi Chatterjee Bagri & Co LLP Chartered Accountants have confirmed theireligibility under Section 141 of the Companies Act 2013 and the Rules framed thereunderfor appointment as auditors of the Company.
Appointment of M/s Singhi & Co as Branch Auditor is also placed for ratificationby shareholders at the ensuing Annual General Meeting.
The Statutory Auditors have not reported any incidence of fraud to the Audit Committeeof the Company during the year under review.
The Auditors Report contains the following observations:
As stated in Note of the financial results due to inadequacy of profit managerialremuneration has become in excess of the limits laid down in the Companies Act 2013awaiting Central Government approval. Necessary application has been filed with theCentral Government for their approval.
The effect of the decision of Supreme Court on entry tax matter is yet to be given bythe various State Governments and the amount of said levy is yet to be determined.Accordingly the same has not been recognised by the Company.
Due to reasons given here aboveimpact thereof on the financial statements is notascertainable.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethereunder the Company has appointed Shri Babu Lal Patni Practising Company Secretary toconduct the Secretarial Audit for the financial year 2016-17. The Secretarial Audit forthe financial year ended 31st March 2017 does not contain any qualification reservationor adverse remark and is annexed herewith and marked as "Annexure II" tothis report.
The Audit Committee comprises of all Independent Directors namely Shri Ratna Kumar Daga(Chairman) Shri Dipankar Chatterji and Shri Narayanaswami Sitaraman as members. All therecommendations made by the Audit Committee were accepted by the Board during thefinancial year 2016-17.
Presently the composition of the Audit Committee is as follows:
|Name ||Designation |
|1 Shri Ratna Kumar Daga ||Chairman |
|2 Shri Dipankar Chatterji ||Member |
|3 Shri Sujit Bhattacharya (upto 31st March 2017) ||Member |
|4 Shri Narayanaswami Sitaraman (w.e.f. 13th April 2017) ||Member |
Vigil Mechanism/Whistle Blower Policy
The Company has a Vigil Mechanism which also incorporates a Whistle Blower Policy forDirectors and Employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of conduct. Disclosures can be made bya Whistle Blower through an email to the Chairman of the Audit Committee.
The Policy may be accessed on the Company's website at the linkhttp://www.hngil.com/report/whistleblowerpolicy.pdf
Meetings of the Board
During the year under review 4(four) meetings of the Board of Th Directors were held. emaximum interval between any two meetings did not exceed 120 days as prescribed in theCompanies Act 2013. Details of compositions and other information are provided in theCorporate Governance Report.
Extract of Annual Return
Extract of Annual Report in Form MGT-9 is provided separately as "AnnexureIII" and forms the part of Board's Report.
Particulars of Loans Guarantees or Investment made guarantee given and securitiesprovided
Particulars of Loans given Investments made Guarantee given and securities providedalong with the purpose for which the Loan or Guarantee or Security is proposed to beutilized by the recipient are provided in the Standalone Financial Statements.
Change in nature of business
During the year under review there has been no change in the nature of business of theCompany.
Remuneration from subsidiary
None of the Vice Chairmen and Managing Directors Executive Director of the Company hasreceived any remuneration or commission from its subsidiary.
Significant or Material order
No significant or material order was passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
Material changes and commitments
There have been no material changes and commitments affecting the financial positionbetween the end of the financial year and the date of the report.
During the year under review no case was reported pursuant to the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013
Business Responsibility Reporting
The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI(Listing Obligations & Disclosure Requirement) Regulations 2015 is not applicable toyour company for the financial year ending 31st March 2017.
ANNUAL LISTING FEES
The Company's shares continue to be listed at the National Stock Exchange of IndiaLimited BSE Limited and The Calcutta Stock Exchange Limited.
The annual listing fee for the year 2017-18 has been paid to all these Exchanges.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of Section 197(12) of the Act read with Rule 5(1) (2) & (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rule 2014 a Statementshowing the names and other particulars of the employees drawing remuneration in excess ofthe limits set-out and other details as required in the said rule are provided as "AnnexureIV".
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to Rule 3 of the Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company onthe Ministry of Corporate Affairs website.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The statements containing the required particulars under the Act are provided as "AnnexureV" and forms a part of this report.
PERSONNEL AND INDUSTRIAL RELATIONS
Your Company takes pride in the commitment competence and dedication shown by itsemployees in all the areas of business.
People are the Company's key assets. e focus in 2016-17 was on enhancing employeeengagement and driving performance excellence to achieve the Company's long term vision.Your Company is consolidating the human resource operations and the internal systems toenhance the operations of the Company. The Company continued to actively drive the Ethicsand Compliance agenda via trainings programmes and employee engagements focussing onnon-retaliation and zero tolerance to non-compliance. HR function is a critical pillar tosupport the organization's growth and its sustainability in the long run.
Your Directors would like to place on record their appreciation to the employees at alllevels for their contribution to the Company's peformance but for whose hard work andsupport your Company's achievements would not have been possible. Your Directors alsowish to thank its customers dealers agents suppliers investors and bankers for theircontinued support and faith reposed in the Company.
For and on behalf of the Board
|Sanjay Somany ||Mukul Somany |
|Vice Chairman & Managing Director ||Vice Chairman & Managing Director |
|(DIN: 00124538) ||(DIN: 00124625) |
Place : Kolkata Date : 15th May 2017
Annexure I to the Board's Report
IA. Nomination & Remuneration Policy
e Company considers human resources as its invaluable assets. This policy onnomination and remuneration of Directors Key Managerial Personnel (KMPs) and otheremployees has been formulated in terms of the provisions of the Companies Act 2013 andthe listing agreement in order to pay equitable remuneration to the Directors KMPs andemployees of the Company and to harmonise the aspirations of human resources consistentwith the goals of the Company.
2. Objective and purpose of the policy
The objectives and purpose of this policy are:
2.1 To formulate the criteria for determining qualification competencies positiveattributes and independence for appointment of a Director (Executive/Non-Executive) andrecommend to the Board policies relating to the remuneration of the Directors KeyManagerial Personnel and other employees. This includes reviewing and approving corporategoals and objectives relevant to the compensation of the Vice Chairmen & ManagingDirectors (VC & MD) and Executive Director (ED) evaluating the VC & MD's and ED'sperformance in light of those goals and objectives and either as a committee or togetherwith the other independent directors (as directed by the Board) determine and approve theVC & MD's and ED's compensation level based on this evaluation and makingrecommendations to the board with respect to executive officer compensation andincentive-compensation that are subject to Board approval;
2.2 The policy also addresses the following items: Committee member qualifications;Committee member appointment and removal; Committee structure and operations; andCommittee reporting to the Board.
2.3 To formulate the criteria for evaluation of performance of all the Directors on theBoard;
2.4 To devise a policy on Board diversity; and
2.5 To lay out remuneration principles for employees linked to their effortperformance and achievement relating to the Company's goals.
3. Constitution of the Nomination and Remuneration Committee
The Board has constituted the "Nomination and Remuneration Committee" of theBoard on 20th May 2014. This is in line with the requirements under the Companies Act2013 ("Act").
The Board has authority to reconstitute this Committee from time to time.
'Board' means Board of Director of the Company.
'Directors' means Directors of the Company.
'Committee' means Nomination and Remuneration Committee of the Company asconstituted or reconstituted by the Board in accordance with the Act and applicablelisting agreements and/or regulations.
'Company' means Hindusthan National Glass & Industries Ltd.
'Independent Director' means a Director referred to in Section 149(6) of theCompanies Act 2013 and rules. 'Key Managerial Personnel (KMP)' means i. TheManaging Director or the Chief Executive Officer or the manager and in the absence aWhole-time Director; ii. The Company Secretary and iii. The Chief Financial Officer
'Senior Management' means personnel of the Company who are members of its coremanagement team excluding Board of Directors comprising all members of management onelevel below the Executive Directors including the functional heads.
Unless the context otherwise requires words and expressions used in this policy andnot defined herein but defined in the Companies Act 2013 and Listing Agreement as may beamended from time to time shall have the meaning respectively assigned to them therein.
This policy is divided in three parts :
Part A covers the matters to be dealt with and recommended by the Committee tothe Board; Part - B covers the appointment and nomination; and Part - C coversremuneration and perquisites etc.
This policy shall be included in the Report of the Board of Directors.
Matters to be dealt with perused and recommended to the Board by the Nomination andRemuneration Committee
The following matters shall be dealt by the Committee:-
a) Size and composition of the Board:
Review the size and composition of the Board to ensure that it is structured to makeappropriate decisions with a variety of perspectives and skills in the best interest ofthe Company as a whole;
Formulate the criteria determining qualifications positive attributes and independenceof a Director and recommending candidates to the Board when circumstances warrant theappointment of a new Director having regard to the range of skills experience andexpertise on the Board and whole will best compliment the Board;
c) Succession plans:
Establishing and reviewing Board and senior executive succession plans in order toensure and maintain an appropriate balance of skills experience and expertise on theBoard and Senior Management;
d) Evaluation of performance:
Make recommendations to the Board on appropriate performance criteria for theDirectors.
Formulate the criteria and framework for evaluation of performance of every Director onthe Board of the Company.
Identify ongoing training and education programs for the Board to ensure thatNon-Executive Directors are provided with adequate information regarding the options ofthe business the industry and their legal responsibilities and duties.
e) Board diversity:
The Committee is to assist the Board in ensuring Board nomination process with thediversity of gender thought experience knowledge and perspective in the Board inaccordance with the Board Diversity Policy.
f) Remuneration framework and policies:
formulate the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration for the Directors key managerial personnel and other employees.
formulate remuneration policy of the Company to ensure that the level and compositionor remuneration is reasonable and sufficient to attract retain and motivate directors ofthe quality required to run the Company successfully relationship of remuneration toperformance is clear and meets appropriate performance benchmarks and remuneration todirectors key managerial personnel and senior management involves a balance between fixedand incentive pay reflecting short and long term performance objectives appropriate to theworking of the Company and its goals.
Policy for appointment and removal of Director KMPs and Senior Management
Appointment criteria and qualifications
1. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or senior management leveland recommend to the Board his/her appointment.
2. A person to be appointed as Director KMP or senior management level should possessadequate qualification expertise and experience for the position he/she is considered forappointment. The Committee has discretion to decide whether qualification expertise andexperience possessed by a person is sufficient/satisfactory for the concerned position.
3. A person to be appointed as Director should possess impeccable reputation forintegrity deep expertise and insights in sectors/ areas relevant to the Company abilityto contribute to the Company's growth complimentary skills in relation to the other Boardmembers.
4. The Company shall not appoint or continue the employment of any person as ManagingDirector/Executive Director who has attained the age of seventy years.
5. A whole-time KMP of the Company shall not hold office in more than one companyexcept at its subsidiary company at the same time. However a whole-time KMP can beappointed as a Director in any company with the permission of the Board of Directors ofthe Company.
1. Managing Director/Whole-time Director
The Company shall appoint or re-appoint any person as its Managing Director and CEO orWhole-time Director for a term not exceeding five years at a time. No re-appointment shallbe made earlier than one year before the expiry of term.
2. 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 but suchIndependent 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 five years or more in the Company as on 1stApril 2015 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 five yearsonly.
At the time of appointment of Independent Director it should be ensured thatnumber of 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 (Executive) Director of a listed company.
Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade there under or under any other applicable Act rules and regulations the Committeemay recommend to the Board with reasons recorded in writing removal of a Director or KMPsubject to the provisions and compliance of the said Act rules and regulations.
The whole-time Directors KMP and senior management personnel shall retire as per theapplicable provisions of the Companies Act 2013 and the prevailing policy of the Company.The Board will have the discretion to retain the Whole-time Directors KMP and seniormanagement personnel in the same position/remuneration or otherwise even after attainingthe retirement age for the benefit of the Company.
PART - C
Policy relating to the remuneration for Directors KMPs and other employees.
1. The remuneration/compensation/commission etc. to Directors will be determined by theCommittee and recommended to the Board for approval.
2. The remuneration and commission to be paid to the Vice Chairman & ManagingDirector shall be in accordance with the provisions of the Companies Act 2013 and therules made thereunder.
3. Increments to the existing remuneration/compensation structure may be recommended bythe Committee to the Board which should be within the limits approved by the Shareholdersin the case of Managing Director.
4. Where any insurance is taken by the Company on behalf of its Managing DirectorChief Financial Officer the Company Secretary and any other employees for indemnifyingthem against any liability the premium paid on such insurance shall not be treated aspart of the remuneration payable to any such personnel provided that if such person isproved to be guilty the premium paid on such insurance shall be treated as part of theremuneration.
Remuneration to KMPs and other employees
The policy on remuneration for KMPs (other than Vice Chairman & Managing Director)and other employees will be governed as per the HR Policy of the Company and incrementwill be paid accordingly.
Remuneration to Non-Executive / Independent Directors
The remuneration payable to each Non-Executive Director is based on the remunerationstructure as determined by the Board and is revised from time to time depending onindividual contribution the Company's performance and the provisions of the CompaniesAct 2013 and the rules made thereunder.
The remuneration to the Non-executive Directors (including Independent Directors) maybe paid within the monetary limit approved by shareholders subject to the limit notexceeding 1.5% of the profits of the Company computed as per the applicable provisions ofthe Companies Act 2013.
2. Stock options
The Independent Directors shall not be entitled to any stock option of the Company.
This policy is framed based on the provisions of the Companies Act 2013 and rulesthereunder and the requirements of the Clause 49 of the Equity Listing Agreement with theStock Exchanges.
In case of any subsequent changes in the provisions of the Companies Act 2013 or anyother regulations which makes any of the provisions in the policy inconsistent with theAct or regulations then the provisions of the Act or regulations would prevail over thepolicy and the provisions in the policy would be modified in due course to make itconsistent with law.
This policy shall be reviewed by the Nomination & Remuneration Committee as andwhen any changes are to be incorporated in the policy due to change in regulations or asmay be felt appropriate by the Committee. Any changes or modification on the policy asrecommended by the Committee would be given for approval of the Board of Directors.
IB. Board Evaluation Policy
1.1 The challenge for Board is to prevent crisis in the organisation they govern.Performance evaluation is a key means by which board can recognise and correct corporategovernance problems and add real value to their organisations.
1.2 Board and Director's evaluation involves board members undertaking a constructivebut critical review of their own performance identifying strengths weaknesses andimplementing plans for further professional development. e provision of feedback on boardperformance and governance processes is the most crucial element of Director's evaluation.
1.3 To enable Directors of the Company to evaluate their individual performance as wellas the collective performance of the Board the Board has developed a framework forevaluating board's effectiveness. This Policy is in compliance with Section 178 of theCompanies Act 2013 read along with the applicable rules thereto and Clause 49 under theListing Agreement.
2.1 The primary objective of the Policy is to provide a framework and set standards forthe evaluation of the Board as a whole its Committees and Directors. The Company aims toachieve a balance of merit experience and skills on the Board.
2.2 The Board's policy is to assess the effectiveness of the Board as a whole and itsBoard Committees. Individual Board members are assessed on their effective contributionand commitment to their role and responsibilities as directors. The Board evaluationprocess shall be carried out by the Nomination and Remuneration Committee of the Board ofDirectors ("The NR Committee").
3. Objectives of evaluation
3.1 The objective to undertake evaluation of Board and individual directors are asunder:
(a) To demonstrate commitment to performance management;
(b) To review problems in the dynamics of the Board room or between the Board andManagement; (c) To enhance good corporate governance; (d) To provide Directors withguidance for their learning and growth; and (e) To develop appropriate skillscompetencies and motivation on the Board.
4. Scope of Evaluation
4.1 Evaluation of the Board as a whole
Regular evaluation of the Board as a whole can be seen as a process that ensuresDirectors develop a shared understanding of their governance role and responsibilities. Itserves as an excellent familiarisation tool for Boards.
4.2 Individual Directors' Evaluation
Individual evaluation provides the Board with an opportunity to probe particular issuesin depth.
5. Method of Evaluation
5.1 Depending on the degree of formality the objectives of the evaluation and theresources available the evaluation process will involve a range of qualitative andquantitative techniques.
5.2 To evaluate individual directors either self or peer evaluation techniques is tobe used. The aim of self-evaluation is to encourage Directors to reflect on theircontributions to Board activities and have them identify their personal strengths andweaknesses. An objective view is best gained through peer evaluation whereby directorsidentify each other's individual strengths and weaknesses. By having members of the Boardevaluate each other it is possible to gain a more rounded picture of the strengths andweaknesses of each director and their contribution to the effectiveness of the Board. Itcan also be used to identify skill gaps on the Board.
6. Process for Evaluation of the Board as a whole and its Board Committees
6.1 Each of the Directors will complete all Th sections of the Board SelfEvaluation Form honestly and sincerely. e Directors will also be required to providecomments to explain the ratings allocated. A rating scale of "1" to"5" is employed wherein "1" denotes a strong rating and "5"a critical condition.
6.2 The above Forms will be submitted by the Directors to the NR Committee on an annualbasis within 30 days of the end of every financial year.
6.3 Based on the Forms submitted the NR Committee shall assess and discuss theperformance of the Board as a whole and its Committees every year and ascertains keyareas for improvement and the requisite follow-up actions.
7. Process for Evaluation of Individual Directors
7.1 The evaluation/assessment of the Directors of the Company is to be conducted onan annual basis and to satisfy the requirements of the Listing Agreement.
7.2 The Non-Executive Directors ("NEDs") led by the NR Committee's Chairmanshall assess the performance of the Chairman and other Directors. The Chairman shall meetwiTheach individual Director to discuss the evaluation and any matter relating to thefunctioning of the Board.
7.3 Each Non-Executive Director's ("NED") contribution will be assessed bythe Chairman and the results of the assessment will be discussed with the NR CommitteeChairman.
7.4 Criteria for assessment of NEDs include attendance record intensity ofparticipation at meetings quality of interventions and special contributions.
7.5 Each of the Directors (other than director being evaluated) will complete allsections of Individual Director Assessment Form and Non-Executive Director Assessment Formhonestly and sincerely. The Directors will also be required to provide comments to explainthe ratings allocated. A rating scale of "1" to "5" is employedwherein "1" denotes strong rating and "5" a critical condition.
7.6 The following criteria may assist in determining how effective the performances ofthe Directors have been: leadership & stewardship abilities contributing to clearlydefine corporate objectives & plans communication of expectations & concernsclearly with subordinates obtain adequate relevant & timely information from externalsources. review & approval achievement of strategic and operational plans objectivesbudgets regular monitoring of corporate results against projections identify monitor& mitigate significant corporate risks assess policies structures & proceduresreview management's succession plan effective meetings assuring appropriate Board sizecomposition independence structure clearly defining roles & monitoring activities ofCommittees review of corporation's ethical conduct
7.7 Evaluation on the aforesaid parameters will be conducted by the IndependentDirectors for each of the Executive/ Non-Independent Directors in a separate meeting ofthe Independent Directors.
7.8 The Executive Director/Non-Independent Directors along with the IndependentDirectors will evaluate/assess each of the Independent Directors on the aforesaidparameters. Only the Independent Director being evaluated will not participate in the saidevaluation discussion.
8. Reporting to Board
At the end of the evaluation process the Chairman of NR Committee shall submit areport to the Board members on the results of the evaluation process.