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Mirza International Ltd.

BSE: 526642 Sector: Others
NSE: MIRZAINT ISIN Code: INE771A01026
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VOLUME 132974
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P/E 26.39
Mkt Cap.(Rs cr) 1,968
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OPEN 164.20
CLOSE 161.95
VOLUME 132974
52-Week high 183.00
52-Week low 69.70
P/E 26.39
Mkt Cap.(Rs cr) 1,968
Buy Price 0.00
Buy Qty 0.00
Sell Price 163.60
Sell Qty 238.00

Mirza International Ltd. (MIRZAINT) - Director Report

Company director report

To

The Members of

MIRZA INTERNATIONAL LIMITED

Your Directors have pleasure in presenting their Thirty-Seventh Annual Report on thebusiness and operations of the Company and the Audited Financial Statements for thefinancial year ended March 31 2016.

1. FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE COMPANY

CELLPADDING="2">
(Rs. in Crore)
Particulars 2015-2016 2014-2015
Total Revenue 928.72 918.99
Earning before Finance Costs 173.52 142.63
Depreciation and amortization
Expenses and Taxes
Less: Finance Charges 31.87 39.29
Depreciation & Amortization 25.83 24.62
Expenses
Profit Before Tax 115.82 78.72
Less: Provision for Taxes 37.73 27.56
Profit After Taxes 78.09 51.16
Add: Balance of profit brought forward 199.49 182.64
277.58 233.80
Less: Appropriations
Transfer to General Reserve 8.00 5.50
Dividend on Equity Shares 6.02 4.64
Tax on Proposed Dividend 1.22 0.94
Income Tax Adjustment (Net) 0.09 2.55
Adjustment on account of Depreciation net of Deferred Tax Liability [Refer Note 36 (c) (a)] - 20.68
Add: Pursuant to Scheme of Amalgamation [Refer Note 33] 58.15 -
Balance at end of the Year 320.40 199.49

2. MAJOR HIGHLIGHTS OF FINANCIAL PERFORMANCE

The financial year 2015-16 has been yet another successful year for your Company. Themajor highlights are given below:

• The Revenue from operations despite industry wide recession marginallyincreased to Rs. 925.75 Crore from Rs. 918.34 Crore in the previous year.

• The Profit Before Tax has however gone upto Rs. 115.82 Crore as compared to Rs.78.72 Crore for the previous year thereby showing the remarkable increase of about 47%.

• The EBITDA increased to Rs. 173.52 Crore from Rs. 142.63 Crore in the previousyear thus showing an increase of about 22%.

• Export (including incentives) was Rs. 691.71 Crore as against Rs. 707.32Crore in the previous year.

• Cash Profit increased to Rs. 103.92 Crore from Rs. 75.78 Crore in the previousyear showing an increase of about 37%.

• The Earning Per Share has also shot up to Rs. 7.21 as against Rs. 5.52 in thePrevious Year.

3. GROWTH STRATEGY

This year Company successfully implemented the Scheme of Amalgamation ofGenesisfootwear Enterprises Private Limited with your Company. Both the Amalgamating andAmalgamated Companies are engaged in the same line of business thus your Company gotbenefit of backward integration after this Amalgamation.

4. SUBSIDIARY / ASSOCIATE COMPANY

Company does not have any Subsidiary / Associate Company as at the end of financialyear 2015-16. During the financial year 2015-16 Company has disinvested its 25% stake inAzad Multispeciality Hospitals & Research Centre Ltd. resulted into bringing down itsholding from 41.67% to 16.67% as at the end of financial year 2015-16

5. DIVIDEND

After considering the Company’s financial performance profitability and futuregrowth plans the Board of Directors of the Company are pleased to recommend a FinalDividend of Rs.0.50 per shares i.e 25% on 120306000 Equity Shares of face value Rs. 2/-each of the Company. The total outflow on account of Dividend if approved by Memberswill be Rs. 7.24 Crores (inclusive of Dividend Distribution Tax of Rs. 1.22 Crores) andsuch Dividend to be distributed to those Equity Shareholders whose name would appear onthe Register of Members as on date of book closing on 22nd September 2016 in proportionto paid-up value of Equity Shares. The Company paid the same rate of dividend for the yearended 31st March 2015 also.

6. RESERVES

The Board proposes to transfer Rs. 8.00 Crore to General Reserve as compared to Rs.5.50 Crore transferred in the previous year.

7. AMALGAMATION

A scheme of amalgamation of Genesisfootwear Enterprises Private Limited (TransferorCompany) with your Company was sanctioned by the Hon’ble High Court of Allahabad onDecember 15 2015. The Order of the Hon’ble High Court was filled with the Registrarof Companies Uttar Pradesh and Uttarakhand on February 04 2016. As a result of the saidamalgamation your Company has achieved synergy in its operations coupled with morefinancial leverage.

In terms of Scheme of Amalgamation 15600000 Equity shares of face value of Rs. 2/-each and 12000000 0% Compulsory Convertible Preference Shares ("CCPS") ofRs. 2/- each fully paid up shares (totalling to 27600000 shares) would be allotted tothe shareholders of transferor Company. Pursuant to the scheme your Company’sAuthorised Capital increased from Rs. 450000000/- (Rupees Forty Five Crore Only) to Rs.510000000/- (Rupees Fifty One Crore Only). The CCPS are converted into equity shares on01.04.2016 pursuant to the terms of above mentioned Scheme.

These issued and converted shares shall rank pari passu with the existing equity sharesof the Company.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Irshad Mirza Chairman and CFO Mr. Rashid Ahmed Mirza- CEO and Managing DirectorMr. Shahid Ahmad Mirza Mr. Tauseef Ahmad Mirza Mr. Tasneef Ahmad Mirza and Mr. N.P.Upadhyay- Whole-Time Directors and Mr. Ankit Mishra- Company Secretary and ComplianceOfficer of the Company are the Key Managerial Personnel as per the provisions of CompaniesAct 2013 as on 31st March 2016.

Appointment

Mr. D.C. Pandey has resigned from the Office of Company Secretary and ComplianceOfficer of the Company and succeeded by Mr. Ankit Mishra w.e.f. 15th March 2016.

Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 read withRules made thereunder Mr. Tasneef Ahmad Mirza (DIN No : 00049066) and Mr. N.P. Upadhyay(DIN No: 00049196) Whole Time Directors of the Company are liable to retire by rotationat ensuing Annual General Meeting and being eligible have offered themselves forre-appointment. The Board recommends their re-appointment.

Independent Directors declaration

All the Independent Directors of your Company viz. Mr. Sudhindra Kumar Jain Mr. P. N.Kapoor Mr. Q. N. Salam Dr. Yashvir Singh Mr. Subhash Sapra Mr. Islamul Haq Mrs.Vinita Kejriwal have individually and severally given a declaration pursuant to Provisionsof Section 149(7) of the Companies Act 2013 affirming compliance to the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation25 of SEBI (LODR) Regulations 2015. Based on the declaration(s) of Independent Directorsthe Board of Directors recorded their opinion that all the Independent Directors areindependent of the management and have fulfilled the conditions as specified in theCompanies Act 2013 and Rules made there under as well as concerning provisions of SEBI(LODR) Regulations 2015.

9. EVALUATION OF BOARD’S PERFORMANCE

Pursuant to the Provisions of Section 134 (3) (p) 149 (8) and Schedule IV of theCompanies Act 2013 and Regulation 17 (10) of SEBI (LODR) Regulations 2015 the Board ofDirectors has carried out an annual evaluation of its own performance and that of itsCommittees and individual Directors.

The performance of the Board and Individual Directors was evaluated by the Boardseeking inputs from all the Directors. The performance of the Committees was evaluated bythe Board seeking inputs from the Committee Members. The Nomination and RemunerationCommittee reviewed the performance of Individual Directors. A separate meeting ofIndependent Directors was also held to review the performance of Non Independent Directorsand Board as a whole and performance of the Chairperson of the Company taking intoaccount the views of Executive Directors and Non Executive Directors assess the qualityquantity and timeliness of flow of information between the Company’s Management andthe Board that is necessary for the Board to effectively and reasonably perform theirduties.

This was followed by a Board Meeting that discussed the performance of the Board itsCommittee and individual Directors. The criteria for performance evaluation of the Boardincluded the aspects like Board Composition and Structure; effectiveness of Board Processinformation and functioning etc. The criteria for performance evaluation of Committees ofthe Board included aspects like composition of Committees effectiveness of committeemeetings etc. The criteria for performance evaluation of individual Directors includedaspects on contribution to the Board and Committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs etc. Inaddition the Chairperson was also evaluated on the key aspects of his role.

10. FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS

The details of the programme for familiarisation of the Independent Directors with theCompany in respect of their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company and related mattersare put up on the website of the Company (URL http:// mirza.co.in/download.html)

11. REMUNERATION POLICY

The company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination and Remuneration Committee and theBoard and is given as Annexure I to this Board’s Report.

12. RISK MANAGEMENT POLICY

The Company has constituted a Risk Management Committee (RMC) which has been entrustedwith responsibility to assist the Board in (a) Overseeing the Company’s RiskManagement process and controls risk tolerance and Capital Liquidity and funding (b)Setting Strategic plans and objectives for Risk Management and review of Risk Assessmentof the Company (c) Review of the Company’s risk appetite and strategy relating to keyrisks including credit risk liquidity and funding risk product risk and reputationalrisk as well as the guide lines and processes for monitoring and mitigating such risks.

The Committee has approved and adopted a Risk Management Policy in accordance with theprovisions of Companies Act 2013 (hereinafter referred to as the Act) and SEBI (LODR)Regulations 2015.

The Board takes responsibility for the overall process of Risk Management in theorganization through Enterprise Risk Management Programme Business units and Corporatefunctions address opportunities and attendant risks through an institutionalized approachaligned to the Company’s objective.

13. WHISTLE BLOWER POLICY & VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy establishing Vigil Mechanism toprovide a formal mechanism to the Directors and employees to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Company’s Code ofConduct. This Policy provides adequate safeguards against victimization of employees whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee. It is affirmed that no personnel of the Company has been denied access to theAudit Committee. The Policy of Vigil Mechanism is available on the Company’s Website(http://mirza.co.in/ policy.html)

14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not given any Loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013 and Rules made there under. The details of theinvestment made by the Company are given in the notes to financial statements.

15. INTERNAL CONTROL SYSTEM

The Company has adequate internal control systems and procedures designed toeffectively control the operations at its Head Office Corporate Office and its Units. Theinternal control systems are designed to ensure that the financial and other records arereliable for the preparation of financial statements and for maintaining assets. TheCompany has well designed Standard Operating Procedures. Internal Auditors conduct auditcovering a wide range of operational matters and ensure compliance with specifiedstandards. Planned periodic reviews are carried out by Internal Audit. The findings ofInternal Audit are reviewed by the top management and by the Audit Committee of the Boardof Directors.

Based on the deliberations with Statutory Auditors to ascertain their views on thefinancial statements including the Financial Reporting System and Compliance to AccountingPolicies and Procedures the Audit Committee was satisfied with the adequacy andeffectiveness of the Internal Controls and Systems followed by the company.

16. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF

Dividend which was declared by the company for the year ended March 31 2009 at theAnnual General Meeting held on September 26 2009 and remained unclaimed will betransferred to the Investor Education and Protection Fund of the Central Government onOctober 24 2016 pursuant to the provisions of Companies Act 2013. Thereafter no claimshall lie on dividend for the year ended March 31 2009 from the shareholders. Notice forunpaid dividend is attached with the Notice convening 37th Annual General Meeting.

17. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulatedunder SEBI (LODR) Regulations 2015 is given separately and forms part of Annual Report

18. HUMAN RESOURCES

Pursuant to the Scheme of Amalgamation of Genesisfootwear Enterprises Private Limited(GEPL) with your Company all the Employees of GEPL become the Employees of the Company.

The Company believes that quality of its employees is the key to success in long run.The Company continues to have cordial relations with its employees. There were 3214regular employees as at March 31 2016.

19. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure II of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. The policy is available on thewebsite of the Company (URL: http:// www.mirza.co.in/policy.html)

20. PARTICULARS OF EMPLOYEES AND OTHER ADDITIONAL INFORMATION

Disclosure with respect to the remuneration of Directors and employees as requiredunder Section 197 of Companies Act 2013 and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been appended as Annexure-IIIto this Report.

The information as required under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 will be provided upon request by anymember of the Company. In terms of Section 136(1) of the Companies Act 2013 the Reportand the Accounts are being sent to the members excluding the said Annexure. Any memberinterested in obtaining copy of the same may write to the Company Secretary at theRegistered Office of the Company.

21. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

A ENERGY CONSERVATION

MIL has always been a frontrunner in continually improving its operational performancein all areas like productivity yield utilization and a host of other operating metricswhile reducing the consumption of fuel power stores and others. This is done by adoptingan approach of continual improvement of process metrics across all energy consumingfacilities.

The key energy conservation initiatives taken by the Company were:

• Use of Compact Fluorescent Lamps (CFL) in place of the conventional lighting toreduce power consumption;

• The options for installing solar lights and solar panels for plant lighting areevaluated for using renewable energy;

• Installation of new types of Tanning Drums and Paddles for the process of WetBlue and Dying to reduce power and water consumption;

• Company has upgraded the power generation and distribution system for long-termenergy saving. Old Generators were replaced by better fuel efficient Generators.

B RESEARCH AND DEVELOPMENT (R & D)

Research Technology and innovation continue to be one of the key focus area to drivegrowth. In addition to developing new design pattern and styles of Company’sproduct it also works on building new capabilities. To support this Company availsservices of qualified and experienced professionals / consultants.

C TECHNOLOGY ABSORPTION

The Company develops in-house Technology and is not dependent on any outsideTechnology/ Source.

D FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year the foreign exchange earned was Rs. 620.51 Crore as compared to Rs.585.32 Crore during the previous year. The foreign exchange outgo was Rs. 129.00 Crore asagainst Rs. 128.75 Crore in the previous year.

22. CORPORATE GOVERNANCE

As required by Schedule V (C) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a detailed report on Corporate Governance is given as AnnexureIV of this Report. The Company is in full compliance with the requirements anddisclosures that have to be made in this regard. The Certificate of Practicing CompanySecretary confirming compliance with Corporate Governance requirements by the Company isattached to the Report on Corporate Governance.

23. AUDITORS

a) STATUTURY AUDITOR

The auditors M/s. Khamesra Bhatia & Mehrotra (ICAI Registration No. 001410C)Chartered Accountants hold Office until the conclusion of the ensuing annual generalmeeting and have expressed their willingness to get re-appointed as the Statutory Auditorsof the Company and a Certificate of their eligibility and consent under Section 141 of theCompanies Act 2013 and the rules framed there under from the auditors has been receivedto the effect that their re-appointment if made would be in accordance with Section 139(1) of the Companies Act 2013. The auditors’ report to the shareholders for the yearunder review does not contain any qualification.

b) SECRETARIAL AUDITOR

The Board of Directors has appointed as per provisions of Section 204 of the CompaniesAct 2013 and read with Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 Mr. K. N. Shridhar Practicing Company SecretaryProprietor of K. N. SHRIDHAR & ASSOCIATES Membership No. 3882 and C.P. No. 2612 toundertake the Secretarial Audit of the Company for the year ended 31st March 2016. Thereare no adverse remarks or observations made in Secretarial Audit Report. The Report ofSecretarial Auditors is given in Annexure V to this Report which is attachedherewith and forms part of Director’s Report.

c) COST AUDITOR

As per Section 148 of the Companies Act 2013 the Company is required to have the auditof its cost records conducted by a Cost Accountant in Practice. The Board of Directors ofthe Company has upon recommendation of Audit Committee approved the appointment of Mr.A.K. Srivastava. Cost Accountant for conducting the Cost Audit pertaining to relevantproducts prescribed under the Companies (Cost Records and Audit) Rules 2014 as amendedfrom time to time for the year ending March 31 2017.

24. EXTRACT OF ANNUAL RETURN:

As required under section 92 (3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of Annual Return in MGT9 forms a part of this Annual Report as ANNEXURE VI.

25. BOARD MEETINGS

During the Year 2015-16 Board met 6 times on 29th May 2015 12th June 2015 30th July2015 6th November 2015 27th January 2016 & 18th February 2016 the details of whichare given in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.

26. BOARD COMMITTEES

The Board of Directors of your Company had already constituted various Committees andapproved the terms of reference / role in compliance with the provisions of the CompaniesAct 2013 and Listing Agreement applicable uptil November 30 2015 / SEBI ListingRegulations (applicable from December 1 2015) viz. Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee and CSR Committee.

During the year under review in accordance with the provisions of the erstwhile Clause49 of the Listing Agreement the Board had voluntarily constituted the Risk ManagementCommittee.

All decisions pertaining to the constitution of Committees appointment of members andfixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees including the number ofmeetings held during the financial year and attendance at meetings are provided in theReport of Corporate Governance in the Annual Report.

27. RELATED PARTIES TRANSACTIONS

During the year under review the Company had not entered into any contract /arrangement / transaction with related parties which could be considered material as perlisting agreement with stock exchanges. Further there are no materially significantrelated party transactions during the year made by the Company with promoters directorskey managerial personnel or other designated persons.

The Policy on dealing with Related Party Transactions as approved by the Board isuploaded on the Company’s website http://mirza.co.in/policy.html. The Policy intendsto insure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and Related Parties. This Policy specifically deals withthe review and approval of Related Party Transactions keeping in mind the potentialconflict of interest that may arise because of entering into these transactions are placedbefore the Audit Committee for review and approval.

During the financial year 2015-16 contract or arrangement entered with Related Partiesas per Form AOC-2 is enclosed herewith as Annexure VII.

28. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti- Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at work place (Prevention Prohibition andRedressal) Act 2013. A Complaint Redressal Committee has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this Policy. No complaints pertaining to SexualHarassment were received during the Financial Year 2015-16.

29. CREDIT RATING

CRISIL has Reaffirmed its rating to the Company as ‘CRISIL A/Stable/CRISIL A1. Therating reflects your Company’s strength supported by the cost optimization initiativeand expansion in the higher margin domestic retail business. CRISIL believes that MIL willcontinue to benefit from its integrated operation and promoters’ extensive industryexperience.

ICRA Limited has also Reaffirmed the Long Term Rating at [ICRA] A and has assigned a‘Stable’ outlook on the Long Term Rating.

30. GENERAL

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 under review.

a. Details relating to deposits covered under Chapter V of the Companies Act 2013.

b. Issue of equity shares with differential right as to dividend voting or otherwise

c. No significant or material orders were passed by the Regulators or Courts ortribunals which impact the going concern status and Company’s operation in future.

31. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134 (5) of the Companies Act 2013;

(a) That in the preparation of the annual accounts the applicable accounting standardsread with requirements set out under Schedule III to the Companies Act 2013 have beenfollowed along with proper explanation relating to material departures;

(b) That such accounting policies as mentioned in Notes to the Financial Statementshave been selected and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at 31st March 2016 and of the profit of the Company for the year ended on thatdate ;

(c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) That the annual financial statements have been prepared on a going concern basis;(e) That proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively;

(f) That systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

32. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the contribution made bythe employees at all level towards the continued growth and prosperity of your company.

Your Directors also wish to place on record their sincere thanks to the Banks andvarious Government Authorities for the support and co-operation extended to the Company.

Your Directors are especially grateful to the shareholders for reposing their trust and confidence in the Company.
For and on behalf of the Board of Directors
Place : Kanpur Irshad Mirza
Date: 30.07.2016 (Chairman)

Annexure I

REMUNERATION POLICY OF MIRZA INTERNATIONAL LIMITED

OBJECTIVE

This Policy shall be formulated in compliance of Section 178 of the Companies Act 2013read along with the applicable rules thereto and Part D of Schedule II of SEBI (LODR)Regulations 2015 . The Key Objectives of the Policy would be:

• 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 means appropriateperformance benchmark

• 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.

DEFINITIONS

• Act means the Companies Act 2013 and Rules framed there under as amended fromtime to time.

• Board means Board of Directors of the Company.

• Directors mean Directors of the Company.

Key Managerial Personnel means

- Chief Executive Officer or the Managing Director or the Manager;

- Whole-time director;

- Chief Financial Officer;

- Company Secretary; and such other Officer as may be prescribed.

• Senior Management means Senior Managerial personnel of the Company who aremembers of its core management team excluding the Board of Directors including FunctionalHeads.

NOMINATION AND REMUNERATION COMMITTEE

The committee constituted by the Board of Directors consists of four independentnon-executive Directors namely:

Mr. P.N. Kapoor Chairman
Mr. Sudhindra Kumar Jain Member
Mr. Q.N Salam Member
Dr. Yashvir Singh Member

ROLE OF COMMITTEE

The Role and Powers of the Committee shall be as under:

a) To formulate a criteria for determining qualifications positive attributes andindependence of a Director.

b) To formulate criteria for evaluation of Independent Directors and the Board.

c) To identify persons who qualify to become Directors and who may be appointed inSenior Management in accordance with the criteria laid down in this Policy.

d) To carry out evaluation of every Director’s performance.

e) To recommend to the Board the appointment and removal of Directors Key ManagerialPersonnel and Senior Management.

f) To recommend to the Board policy relating to remuneration for Directors KeyManagerial Personnel and Senior Management.

g) To ensure that level and composition of remuneration is reasonable and sufficientRelationship of remuneration to performance is clear and meet appropriate performancebenchmarks.

h) To carry out any other function as is mandated by the Board from time to time and/or enforced by the statutory notification amendment or modification as may beapplicable.

i) To devise a policy on Board Diversity.

j) To formulate the Nomination and Remuneration Policy of the Company and propose anyamendments.

k) To assist the Board in ensuring that plans are in place for orderly succession forappointments to the Board Key Managerial Personnel and to Senior Management.

The Chairperson of the Nomination and Remuneration Committee or in his absence anyother member of the Committee authorized by him shall be present at the General meetingsof the Company to answer the shareholders queries if any.

The Nomination and Remuneration Committee shall set up a mechanism to carry out itsfunctions and is further authorized to delegate any / all of its powers to any of theDirectors and /or Officers of the Company as deemed necessary for proper and expeditiousexecution.

APPOINTMENT AND REMOVAL OF DIRECTORS KMP AND SENIOR MANAGEMENT

Appointment criteria and qualifications are mentioned below:

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.

Term / Tenure

a) Managing Director/Whole-time Director: The Company shall appoint or re-appoint anyperson as its Executive Chairman Managing Director or Executive Director for a term notexceeding five years at a time. No re-appointment shall be made earlier than one yearbefore the expiry of term.

b) Independent Director: - An Independent Director shall hold Office for a term up tofive consecutive years on the Board of the Company and will be eligible for re-appointmenton passing of a special resolution by the Company and disclosure of such appointment inthe Board’s report. No Independent Director shall hold Office for more than twoconsecutive terms but such Independent Director shall be eligible for appointment afterexpiry of three years of ceasing to become an Independent Director. Provided that anIndependent Director shall not during the said period of three years be appointed in orbe associated with the Company in any other capacity either directly or indirectly.However if a person who has already served as an Independent Director for 5 years or morein the Company as on October 1 2014 or such other date as may be determined by theCommittee as per regulatory requirement; he/ she shall be eligible for appointment for onemore term of 5 years only. At the time of appointment of Independent Director it should beensured that number of Boards on which such Independent Director serves is restricted toseven listed companies as an Independent Director and three listed companies as anIndependent Director in case such person is serving as a Whole-time Director of a listedcompany or such other number as may be prescribed under the Act.

Evaluation

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

Removal: Due to reasons for any disqualification mentioned in the Act or under anyother applicable Act rules and regulations thereunder the Committee may recommend tothe Board with reasons recorded in writing removal of a Director KMP or SeniorManagement Personnel subject to the provisions and compliance of the said Act rules andregulations.

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.

REMUNERATION OF DIRECTORS KMP AND SENIOR MANAGEMENT

a) The Remuneration / Compensation / Profit linked Incentive etc. to ManagerialPersonnel KMP and Senior Management will be determined by the Committee and recommendedto the Board for approval. The Remuneration / Compensation / Profit Linked Incentive etc.to be paid for Managerial Personnel shall be subject to the prior/post approval of theshareholders of the Company and Central Government wherever required.

b) The remuneration and commission to be paid to Managerial Personnel shall be as perthe statutory provisions of the Companies Act 2013 and the rules made thereunder for thetime being in force.

c) Managerial Personnel KMP and Senior Management shall be eligible for a monthlyremuneration as may be approved by the Board on the recommendation of the Committee inaccordance with the statutory provisions of the Companies Act 2013 and the rules madethere under for the time being in force. The break-up of the pay scale and quantum ofperquisites including employer’s contribution to P.F pension scheme medicalexpenses club fees etc. shall be decided and approved by the Board on the recommendationof the Committee and approved by the shareholders and Central Government whereverrequired.

d) If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managerial Personnel in accordance with theprovisions of Schedule V of the Companies Act 2013 and if it is not able to comply withsuch provisions with the prior approval of the Central Government.

e) If any Managerial Personnel draws or receives directly or indirectly by way ofremuneration any such sums in excess of the limits prescribed under the Companies Act2013 or without the prior sanction of the Central Government where required he / sheshall refund such sums to the Company and until such sum is refunded hold it in trust forthe Company.

f) Increments if declared to the existing remuneration / compensation structure shallbe recommended by the Committee to the Board which should be within the limits approved bythe Shareholders in the case of Managerial Personnel.

REMUNERATION TO NON- EXECUTIVE / INDEPENDENT DIRECTOR:

a) Remuneration / Profit Linked Commission: The remuneration / profit linkedcommission shall be in accordance with the statutory provisions of the Companies Act2013 and the rules made there under for the time being in force.

b) Sitting Fees: The Non- Executive / Independent Director may receive remunerationby way of fees for attending meetings of Board or Committee thereof. Provided that theamount of such fees shall not exceed the maximum amount as provided in the Companies Act2013 per meeting of the Board or Committee or such amount as may be prescribed by theCentral Government from time to time.

c) Limit of Remuneration /Profit Linked Commission:

Remuneration /profit linked Commission may be paid within the monetary limit approvedby shareholders subject to the limit not exceeding 1% / 3% of the net profits of theCompany respectively.

MONITORING EVALUATION AND REMOVAL:

a) Evaluation: The Committee shall carry out evaluation of performance of everyManagerial Personnel Director KMP and Senior Management on yearly basis.

b) Removal: The Committee may recommend to the Board with reasons recorded inwriting removal of a Managerial Personnel Director KMP or Senior Management subject tothe provisions of Companies Act 2013 and all other applicable Acts Rules andRegulations if any.

c) Minutes of Committee Meeting: Proceedings of all meetings must be minuted andsigned by the Chairperson of the said meeting or the Chairperson of the next succeedingmeeting. Minutes of the Committee meeting will be circulated at the subsequent Boardmeeting for noting.

AMENDMENT TO THE POLICY:

The Board of Directors on its own and / or as per the recommendations of Nomination andRemuneration Committee can amend this Policy as and when deemed _t. In case of anyamendment(s) clarification(s) circular(s) etc. issued by the relevant authorities notbeing consistent with the provisions laid down under this Policy then such amendment(s)clarification(s) circular(s) etc. shall prevail upon the provisions hereunder and thisPolicy shall stand amended accordingly from the effective date as laid down under suchamendment(s) Clarification circular(s) etc.

Annexure II

1. A brief outline of the Company’s CSR Policy including overview ofprojects or programmes proposed to be undertaken and a reference to the web link to theCSR Policy and projects or programmes.

The Company has framed a Policy in compliance with the provisions of Companies Act2013 and the same is placed on Company’s website and web link for the same ishttp://mirza.co.in/policy.html

2. Composition of the CSR Committee
Mr. Irshad Mirza Chairman
Mr. Tasneef Ahmad Mirza Whole-Time Director
Mr. Sudhindra Kumar Jain Independent Director

3. Average net profit of the Company for last three financial years

Average Net Profit Rs. 7236 Lakh

4. Prescribed CSR Expenditure (two percent of amount as in item 3 above)

The Company is required to spend Rs. 144.72 Lakh

5. Details of CSR spent for the financial year :

a) Total amount spent for the financial year : Rs. 76.94 Lakh

b) Amount unspent if any : Rs. 67.78 Lakh

DETAILS OF AMOUNT SPENT ON CSR ACTIVITIES DURING THE FINANCIAL YEAR 2015-16

(Rs. in Lakh)
S. No. Particulars (A) (B) Total
(1) CSR Project or activity identified

Scholarships for the Students Donation to School

Eye Camp Mobile Ambulance HIV seminar and medical camp

(2) Sector in which the Project is covered Education Healthcare
(3) Projects or programme
(i) Local area or other Unnao Kanpur Delhi Unnao Kanpur
(ii) Specify the State and other district where projects or programme was undertaken Uttar Pradesh Delhi Uttar Pradesh
(4) Amount outlay (budget) project or programme wise 37.72 107.00 144.72
(5) Amount spent on the project or Programme Sub Heads; 20.05 56.89 76.94
(i) Direct expenditure on projects or Programmes
(ii) Overheads
(6) Cumulative expenditure up to the reporting period 20.05 56.89 76.94
(7) Amount spent: direct or through implementing agency • Amount Directly spent by the Company: 0.30 Through implementing Agency* : 56.89 76.94
• Through implementing Agencies* : 19.75

Implementing Agencies:

• Quami Ekta Inter College Maswasi Unnao;

• Jyoti Vikas Sansthan Bithoor Kanpur;

• Kilkari Charitable Trust Delhi;

• Spastic Centre Kanpur;

• Nida-e-Aman Foundation Delhi;

• Hazrat Ameer Khusru Educational Society Delhi;

• Azad Multispeciality Hospital & Research Centre Ltd. Kanpur;

• Physiotherepy Centre PAC Battalion Kanpur;

• Indian Blind and Para Judo Association Kanpur

Several activities were taken up and implemented during the year particulars of whichare given in this report. However some of the projects envisaged could not take offduring the year. Further the Company has been working on identifying some more Projectsfor carrying out CSR activities which has taken more time than estimated resulting inamount spent slightly lower than the amount to be spent.

We hereby confirms that the implementation and monitoring of CSR Policy is incompliance with CSR objectives and Policy of the Company.

Sd/- Sd/-
Tasneef Ahmad Mirza Irshad Mirza
Director Chairman

Annexure III

a) Information as per Section 197(12) read with Rules 5 (1) of Chapter XII Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014.

(i) The ratio remuneration of each Director to the median remuneration of the employees of the Company for the financial year Name of Director Ratio of remuneration to Median remuneration of employees
Irshad Mirza 1.64
Rashid Ahmed Mirza 116.85
Shahid Ahmad Mirza 98.00
Tauseef Ahmad Mirza 111.26
Tasneef Ahmad Mirza 97.94
N.P. Upadhyay 21.31
ii) the percentage increase in remuneration of each Director Chief Financial Officer Company Secretary(CS) or Manager if any in the Financial year Name of Director % Increase in remuneration
Executive Director
Irshad Mirza 7.20
Rashid Ahmed Mirza 18.43
Shahid Ahmad Mirza 20.96
Tauseef Ahmad Mirza 18.11
Tasneef Ahmad Mirza 25.27
N.P. Upadhyay 18.09
D.C. Pandey 6.58
Ankit Mishra* NA
(iii) the percentage increase in the median remuneration of employees in the financial year 13%
(iv) the number of permanent employees in the rolls of the Company 3214
(v) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; The average percentile increase in remuneration of employee was 07.40% as compared to 75.59% of managerial remuneration. The increases of managerial remuneration is based on growth criteria and are in terms of Special Resolution passed by shareholders of the Company at the 35th Annual General Meeting of the Company held on 20th September 2014.
(vi) affirmation that the remuneration is as per the Remuneration Policy of the company. YES: The remuneration is as per the Remuneration Policy of the Company.

* Mr. Ankit Mishra joined the Company as Company Secretary and Compliance Officerw.e.f. 15.03.2016.