Munoth Financial Services Ltd.
|BSE: 531821||Sector: Financials|
|NSE: N.A.||ISIN Code: INE348D01019|
|BSE 15:15 | 17 Jan||Munoth Financial Services Ltd|
|NSE 05:30 | 01 Jan||Munoth Financial Services Ltd|
|BSE: 531821||Sector: Financials|
|NSE: N.A.||ISIN Code: INE348D01019|
|BSE 15:15 | 17 Jan||Munoth Financial Services Ltd|
|NSE 05:30 | 01 Jan||Munoth Financial Services Ltd|
To The Members
Your Directors have pleasure in presenting their Twenty Sixth Annual Report togetherwith the Audited Accounts for the year ended March 31 2017
REVIEW OF BUSINESS OPERATIONS:
During the financial year 2016-17 the Company's total revenue has increased from Rs.97.86 lakhs to Rs. 103.37 lakhs in the current year.
The Company net loss has decreased to Rs. 8.56 Lakhs as against Rs. 18.88 Lakhs in theprevious year.
Income from stock broking operations has decreased to Rs. 15.51 Lakhs from Rs. 23.80lakhs in the previous year.
The broking turnover of the company in cash segment is Rs. 103.30 crores as compared toRs. 121.26 crores in the last financial year and in F & O segment is Rs. 9.49 Croresas compared to Rs.259.83 crores in the last financial year.
The Company provides institutional broking business and is empanelled with severalpublic sector banks and insurance companies.
As a Depository Participant the company offers facilities to both institutional andretail investors to maintain their investments in securities in electronic form. Incomefrom Depository operations has decreased to Rs. 5.92 Lakhs as against Rs. 6.66 lakhs inthe previous year
Merchant Banking & Portfolio Management Services:
The Company continues to provide PMS services under both discretionary and non discretionary basis.
The Company's MBD division is advising several company to tap market in SME segment.
The Company has been appointed as Investment Managers by IL & FS Trust CompanyLimited for Valmark Infra and Realty Trust a SEBI registered Alternate Investment Fund Category II (AIF II). Income from Merchant Banking & PMS amounted to Rs.75.02Lakhs as against Rs. 57.86 Lakhs in the previous year.
The company will continue to focus on Investment Banking Portfolio Management servicesand Institutional Broking business.
The Board of Directors has decided not to recommend any dividend.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
The provisions of Section 125(2) of the companies Act 2013 do not apply as there wasno dividend declared and paid last year.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHCIHHAS OCCURRED BETWEEN 31ST MARCH 2017 ( THE END OF THE FINANCIAL YEAR and 23rd MAY 2017(THE DATE OF REPORT)
There were no material changes and commitments affecting the financial position of thecompany between 31st March 2017 ( the end of the financial year) and 23rd May 2017 (thedate of the report).
CONSERVATION OF ENERGY TECHNOLOGYABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO.
The Company has no activities relating to conservation of energy technologyabsorption foreign exchange earning and outgo and hence the provisions of Section 134(m)of the Companies Act 2013 is not applicable to the Company.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
The Risk Management Committee of the Company continuously monitors business andoperations risk through an efficient risk management system.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES:
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable for the financial year 2016-17.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not provided working capital loan Guarantee or provided security. Thedetails of investments made by the company are given in the notes to the financialstatements.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
The Company has conducted 5 Board meetings during the financial year under review. Theboard is presented with all the relevant information well in advance before each meetingon various matters affecting the working of the company and the Directors have separateand independent access to senior management at all times. The dates of the Board Meetingswere May 13 2016 May 30 2016 August 1 2016 November 11 2016 and February 9 2017.
The Audit Committee comprises of Independent Directors Mr. Ajit Kumbhat (Chairman) Ms.Lakshika Mehta Mr. Mah Sau Cheong and Mr Jaswant Munoth as Members as per therequirement of Section 177 of the Companies Act 2013. All the recommendations made by theAudit Committee were accepted by the Board.
NOMINATION AND REMUNERATION COMMITTEE:
The Remuneration Committee comprises of Ms. Lakshika Mehta (Chairman) Mr. AjitKumbhat Tansri Rajandram.. The committee is vested with all necessary powers andauthority to determine and recommend the remuneration payable to Executive Directors.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARE OF THEIR DUTIES.
The Company's Policy relating to appointment of Directors payment of managerialremuneration Director's qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished as Annexure 1 and is attached to this report.
SHAREHOLDERS RELATIONSHIP COMMITTEE
Pursuant to Companies Act 2013 the Board of Directors had reconstituted Shareholders'/Investor Greivance Committee with the new name Shareholders relationship committee . Thecommittee specifically looks into the shareholders' and investors' complaints on mattersrelating to transfer of shares non-receipt of annual report etc. In addition thecommittee also oversees the share transfers and transmission. The Committee comprised ofMs. Lakshika Mehta (Chairman) Mr. Ajit Kumbhat Tansri Rajandram Mr. Jaswant Munoth.
The chairperson or the member authorized by him of each of the committees constitutedunder Section 178 attended the general meeting of the Company
The aspects covered in the evaluation included the contribution made by the Directorsto the corporate governance practices long term strategic planning fulfillment ofDirector's obligations and fiduciary responsibilities and active participation at theBoard and Committee meetings. The effectiveness of Board / Committee processes wereassessed based on the Directors' inputs received during the meetings of the Board and oneto one meeting by the Chairman with the Directors.
EXTRACT OF ANNUAL RETURN
The Extract of Annual return as on March 31 2017 as provided under Sub-section (3) ofsection 92 in Form No. MGT - 9 is being annexed as Annexure 2 to the report
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder 34(2)(e) of SEBI(LODR) Regulations is presented in separate section forming part ofthe Annual Report as Annexure 3
DIRECTOR'S RESPONSIBILITY STATEMENT:
As requred in Clause (c) of Sub- Section (3) of Section 134 of the Companies Act 2013your Director confirms and state that a) In the preparation of the annual accounts theapplicable accounting standards have been followed along with proper explanation relatingto material departures.
b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the close of the financial year ended31st March 2017 and of the Profit/Loss of the company for the year ended 31st March 2017
c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
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 were operatingeffectively.
f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of balance sheet.
DIRECTORS AND KMP
Re appointment of Directors retiring by rotation
Pursuant to Section 152 of the Companies Act 2013 Mr. Lalchand Munoth Mr. BharatMunoth and Mr. Jaswant Munoth retire by rotation and being eligble offers themselves forreappointment
Re appointment of Mr Jaswant Munoth as Mananging Director
Mr. Jaswant Munoth was reappointed as the Managing Director of the Company in themeeting of Board of Directors held on May 23 2017 for the period of 2 years with effectfrom June 20 2017 subject to the approval of the shareholders at the AGM
Information pursuant to Regulation 36(3) of SEBI (LODR) Regulations
1. Brief resume of Mr. Lalchand Munoth and nature of his expertise in specificareas.
Mr. Lalchand Munoth is retiring by rotation at his Annual General Meeting and beingeligible offers himself for reappointment. Mr. Lalchand Munoth aged 78 years (DOB:05/12/1938) holds a Bachelor Degree in Arts from the Mysore University. He is a seniormember of the board and a guiding figure for the Munoth Team. His stature in the industryand array of corporate relationships are valuable for the Company. He is the architectbehind several successful finance & investment companies and has vast experience inthe finance field.
He is the director of the Company since 1990. He is also director of MunothCommunication Limited Misrimal Navajee Estates Private Limited Munoth IndustriesLimited Munoth Bioscience Limited and South India Chemicals and Leasing Private Limited.
As on March 31 2017 his shareholding in the Company is 687100 shares and has noshares held by/for other persons on a beneficial basis.
Disclosure of relationships between directors inter-se: Mr. Lalchand Munoth is thefather of Mr. Jaswant Munoth Mr. Bharat Munoth & Mr. Vikas Munoth .
2. Brief resume of Mr. Bharat Munoth and nature of his expertise in specificareas.
Mr. Bharat Munoth is retiring by rotation at this Annual General Meeting and beingeligible offers himself of reappointment. Mr. Bharat Munoth aged 47 years(DOB:02/03/1970) is a commerce graduate and he has extensive knowledge and experience inthe field of finance and investments.
He is the director of the company since 1992.He is also the director of MunothCommunication Limited Munoth Industries Limited Munoth Bioscience Limted South Indiachemicals and Leasing Private Limited Maharana Finance and Investments Private Limitedand Shankeswar Finance and Investments Private Limited.
As on March 31 2017 his shareholding in the Company is 717900 shares and has noshares held by/for other persons on a beneficial basis.
Disclosure of relationships between directors inter-se: Mr. Lalchand Munoth is thefather of Mr Bharat Munoth and Mr. Jaswant Munoth & Mr. Vikas Munoth are brothers ofMr. Bharat Munoth.
3. Brief resume of Mr.Jaswant Munoth and nature of his expertise in specificfunctional areas:
Mr. Jaswant Munoth aged 52 years (Date of Birth : 14/07/1965) holds a Bachelor Degreein Commerce from University of Madras with a Masters Degree in Business Administration. Hehas extensive 30 years of experience and knowledge in the field of Capital Markets. He isthe Managing Director of the company since its inception on 1990. He has managed andsteered the company through the adverse market conditions prevailed in the financialsector. He heads Merchant Banking and Portfolio Management Division of the Company. Underhis leadership the Merchant Banking division has Lead managed 47 IPOs. He has worked withother leading merchant Bankers in 65 other IPO's under various other capacities. He alsoheads Portfolio Management Services since its inception in 1999 and manages portfolio ofclients.
He is also the Managing Director of Munoth Communication Limited and director of MunothIndustries Limited Munoth NEG Windfarm Private Limited Misrimal Navajee Estates PrivateLimited Maharana Finance & Investments P Limited Shankeswara Finance &Investments P Limited South India Chemicals & Leasing P Limited and Munoth BioscienceLimited.
As on March 31 2017 his shareholding in the Company is 815200 shares and has noshares held by/for other persons on a beneficial basis.
Disclosure of relationships between directors inter-se: Mr. Lalchand Munoth is thefather of Mr. Jaswant Munoth and Mr. Bharat Munoth & Mr. Vikas Munoth are brothers ofMr. Jaswant Munoth
DECLARATION OF INDEPENDENT DIRECTORS:
The independent Directors have confirmed and declared that they are not disqualified toact as an independent Director in compliance with the provisions of Section 149 of theCompanies Act. 2013.
ADEQUACY OF INTERNAL CONTROL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year under review such controls were tested and noreportable material weakness in the design or operation were observed.
Members of the Company at the AGM held on 20th September 2014 had approved theappointment of Mardia & Associates as the Statutory Auditors for a period of threefinancial years and they hold office until the conclusion of the ensuing AGM. Therequisite resolution for the appointment of statutory auditors for the period of 5 yearsforms part of the notice convening the AGM.
A Secretarial Audit was conducted during the year by the secretarial Auditor Mr. NSelvam Practicing Company Secretary in accordance with provisions of section 204 of theCompanies Act 2013. The Secretarial Audit Report is attached as Annexure 4 and forms apart of the report of the Directors.
Cost Audit is not applicable to the Company for the financial year 2016-17.
EXPLANATION / COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS.
The comments made by the Auditors in their report have been duly explained in theattached Notes on Accounts. (Note No. 1(I))
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiary or Joint venture Company. The nil disclosurein Form No. AOC 1 is enclosed as Annexure 5.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
In line with the requirements of the Companies act 2013 and equity listing Regulationthe Company has formulated a policy on Related Party transactions which is also availableon Company's website at www.munothfinancial.com. The policy intends to ensure that properreporting approval and disclosure procedures are in place for all transactions betweenthe Company and Related Parties.
All Related Party transactions are placed before the Audit Committee for review andapproval Prior omnibus approval is obtained for Related Party transactions on a quarterlybasis for transactions which are of repetitive nature and / or entered in the OrdinaryCourse of Business and are at Arm's Length.
There is no materially significant related party transactions which exceeds 10% of theconsolidated turnover of the Company. The nil disclosure in Form No . AOC.2 is enclosed asAnnexure 6
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE:
There are no persons employed in the Company during the year or for part of the yearwho were in receipt of remuneration in excess of the limits set out in Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 readwith in terms of provisions of Section 197(12) of the Companies Act 2013.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) rules 2014 are provided in the Annual Report as Annexure 7
In terms of Section 136 of the Act the reports and accounts are being sent to themembers and others entitled thereto which is available for inspection by the members atthe registered office of the company during business hours on working days of the company.If any member is interested in inspecting the same such member may write to the Companyin advance and the same will be furnished. The full annual report is also available on theCompany's website.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Regulation includes an Ethics & Compliance Task Force comprisingSenior Executives of the
Company. The policy on vigil mechanism and whistle blower policy may be accessed on thecompany's website www. munothfinancial.com
CORPORATE GOVERNANCE REPORT:
Pursuant to Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 report on Corporate Governance is not applicable to the Company for thefinancial year 2016-17 since the Net Worth is below 25 Crores and the Paid up Capital ofthe Company is less than 10 Crores.
The Company's shares are listed on The Stock Exchange Mumbai.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct as per the Guidelines issued by theSecurities and Exchange Board of India for prevention of Insider Trading with a view toregulate trading in securities by the Directors and designated employees of the Company.The Board of Directors and the designated employees have confirmed compliance with thecode.
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.
1. Issue of equity shares with differential rights as to dividend voting or otherwise
2. Issue of shares ( including sweat equity shares) to employees of the company andESOS under any scheme
3. The company does not have any subsidiaries and hence the disclosure stating that theManaging Director / whole Time Director of the Company not receiving any remuneration orcommission for subsidiary is not applicable.
4. 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.
5. There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
Your Directors would like to express their gratitude to the Shareholders vendorsbankers and customers for their support and co-operation. They wish to thank all theemployees of the Company for their sincere and dedicated services.
For and on behalf of the Board of Directors
Nomination and Remuneration Policy
The Remuneration/Compensation Committee of Munoth Financial Services Limited ("theCompany") consisting of three independent directors was renamed as Nomination andRemuneration Committee by the Board at its meeting held on March 31 2015
1. OBJECTIVE The Nomination and Remuneration Committee and this Policy arein compliance with Section 178 of the Companies Act 2013 ("The Act")read along with the applicable rules thereto and Listing Agreement Regulations.
The key objectives of the Committee are:
1.1 To guide the Board in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.
1.2 To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.
1.3 To recommend to the Board on Remuneration payable to the Directors KeyManagerial Personnel and Senior Management.
1.4 To provide to Key Managerial Personnel and Senior Management reward linkeddirectly to their effort performance dedication and achievement relating to theCompany's operations.
1.5 To retain motivate and promote talent and to ensure long term sustainabilityof talented managerial persons and to assist the Board in fulfilling its responsibilities.
2.1 Act means the Companies Act 2013 and Rules framed thereunder as amended fromtime to time.
2.2 Board means Board of Directors of the Company.
2.3 Directors mean Directors of the Company.
2.4 Key Managerial Personnel means Chief Executive Officer or the Managing Directoror the Manager; Whole-time director; Chief Financial Officer; Company Secretary; and suchother officer as may be prescribed.
2.5 Senior Management means personnel of the company who are members of its coremanagement team excluding the Board of Directors including Functional Heads.
3. ROLE OF COMMITTEE
3.1 The role of the Committee inter alia will be the following: a. to formulate acriteria for determining qualifications positive attributes and independence of aDirector. b. to recommend to the Board the appointment and removal of Senior Management c.to carry out evaluation of Director's performance and recommend to the Board appointment /removal based on his / her performance. d. to recommend to the Board on (i) policyrelating to remuneration for Directors Key Managerial Personnel and Senior Management and(ii) Executive Directors remuneration and incentive. e. to make recommendations to theBoard concerning any matters relating to the continuation in office of any Director at anytime including the suspension or termination of service of an
Executive Director as an employee of the Company subject to the provision of the lawand their service contract; f. ensure that level and composition of remuneration isreasonable and sufficient relationship of remuneration to performance is clear and meetsappropriate performance benchmarks g. to devise a policy on Board diversity; h. todevelop a succession plan for the Board and to regularly review the plan;
Policy for appointment and removal of Director KMP and Senior Management
3.2 Appointment criteria and qualifications
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) The Company shall not appoint or continue the employment of any person as Whole-timeDirector who has attained the age of seventy years. Provided that the term of the personholding this position may be extended beyond the age of seventy years with the approval ofshareholders by passing a special resolution based on the explanatory statement annexed tothe notice for such motion indicating the justification for extension of appointmentbeyond seventy years.
3.3 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 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. At the time of appointmentof Independent Director it shall be ensured that number of Boards on which suchIndependent Director serves is as may be prescribed under the Act and / or the ListingAgreement.
3.4 Evaluation The Committee shall carry out evaluation of performance of everyDirector KMP and Senior Management Personnel at regular interval (yearly).
3.5 Removal Due to reasons for any disqualification mentioned in the Act or underany other applicable Act rules and regulations thereunder the Committee may recommendto the 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.
3.6 Retirement The Directors KMP and Senior Management Personnel shall retire asper the applicable provisions of the Act and the prevailing policy of the Company. TheBoard will have the discretion to retain the Director KMP Senior Management Personnel inthe same position/ remuneration or otherwise even after attaining the retirement age forthe benefit of the Company.
3.7 Policy relating to the Remuneration for the Managing / Whole-time Director KMP andSenior Management Personnel
The Remuneration Policy of the Company for managerial personnel is primarily based onthe following:
Performance of the Company potential of individual and
External competitive environment
a. The remuneration/compensation/commission etc. to the Managing / Whole-timeDirector KMP and Senior Management Personnel will be determined by the Committee andrecommended to the Board for approval at the time of appointment. The remuneration /compensation / commission etc. of the Managing / Whole Time Director shall be subject tothe prior/post approval of the shareholders of the Company and Central Governmentwherever required.
b. The remuneration and commission to be paid to the Whole-time Directors shall be inaccordance with the provisions of the Act.
c. Increments to the existing remuneration/ compensation structure may be recommendedby the Committee to the Board which would be within the limits approved by theShareholders in the case of Whole-time Directors and as per the Policy of the Company incase of others.
d. Where any insurance is taken by the Company on behalf of its Whole-time DirectorChief Executive Officer Chief Financial Officer the Company Secretary and any otheremployees for indemnifying them against any liability the premium paid on such insuranceshall not be treated as part of the remuneration payable to any such personnel. Providedthat if such person is proved to be guilty the premium paid on such insurance shall betreated as part of the remuneration.
Remuneration to Managing / Whole-time Director KMP and Senior Management Personnel
a. Fixed pay: The Managing / Whole-time Director KMP and Senior ManagementPersonnel shall be eligible for a monthly remuneration as may be approved by the Board onthe recommendation of the Committee. The breakup of the pay scale and quantum ofperquisites including employer's contribution to P.F pension scheme medical expensesclub fees etc. shall be decided and approved by the Board/ the Person authorized by theBoard on the recommendation of the Committee and approved by the shareholders and CentralGovernment wherever required.
b. Minimum Remuneration: If in any financial year the Company has no profits orits profits are inadequate the Company shall pay remuneration to its Whole-time Directorin accordance with the provisions of Schedule V of the Act and if it is not able to complywith such provisions with the previous approval of the Central Government.
c. Provisions for excess remuneration: If any Whole-time Director draws orreceives directly or indirectly by way of remuneration any such sums in excess of thelimits prescribed under the Act or without appropriate approvals the Committee shallrecommend the due course of action to the Board as and when required.
Remuneration to Non- Executive / Independent Director
a. Remuneration / Commission: The remuneration / commission shall be fixed as perthe limits and conditions mentioned by the Company and the Act.
b. Sitting Fees: The Non- Executive / Independent Director may receive Sitting feesfor attending meetings of Board or Committee thereof provided that the amount of suchfees shall not exceed the amount as may be prescribed by the Central Government from timeto time.
c. Commission: Commission may be paid subject to the limit not exceeding 1% of theprofits of the Company computed as per the applicable provisions of the Act.
d. Stock Options: An Independent Director shall not be entitled to any stock optionof the Company.
4. NOMINATION COMMITTEE FUNCTIONS:
The functions of the Committee in relation to nomination matters include:
a. Ensuring that there is an appropriate induction in place for new Directors andmembers of Senior Management and reviewing its effectiveness;
b. Ensuring that on appointment to the Board independent directors receive a formalletter of appointment in accordance with the guidelines provided under the Act;
c. Identifying and recommending Directors who are to be put forward for retirement byrotation.
d. Determining the appropriate size diversity and composition of the Board;
e. Setting a formal and transparent procedure for selecting new Directors forappointment to the Board;
f. Developing a succession plan for the Board and Senior Management and regularlyreviewing the plan;
g. Evaluating the performance of the Board members and Senior Management in the contextof the Company's performance from business and compliance perspective;
h. Making recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract.
i. Delegating any of its powers to one or more of its members or the Secretary of theCommittee; j. Recommend any necessary changes to the Board; and k. Considering any othermatters as may be requested by the Board.
5 . REMUNERATION COMMITTEE FUNCTIONS
The function of the Committee in relation to remuneration matters include:
a. to consider and determine the Remuneration Policy based on the performance and alsobearing in mind that the remuneration is reasonable and sufficient to attract retain andmotivate members of the Board and such other factors as the Committee shall deemappropriate all elements of the remuneration of the members of the Board. b. to approvethe remuneration of the Senior Management including key managerial personnel of theCompany maintaining a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company.
c. to delegate any of its powers to one or more of its members or the Secretary of theCommittee.
d. to consider any other matters as may be requested by the Board.
e. Professional indemnity and liability insurance for Directors and senior management.
6. MEMBERSHIP The Committee shall consist of a minimum 3 non-executivedirectors majority of them being independent. Minimum two members shall constitute aquorum for the Committee meeting. Membership of the Committee shall be disclosed in theAnnual Report. Term of the Committee shall be continued unless terminated by the Board ofDirectors.
7. CHAIRPERSON The Chairperson of the Committee shall be an IndependentDirector. The Chairperson of the Company may be appointed as a member of the Committee butshall not be a Chairman of the Committee. In the absence of the Chairperson the membersof the Committee present at the meeting shall choose one amongst them to act asChairperson.
8. FREQUENCY OF MEETINGS The meeting of the Committee shall be held at suchregular intervals as may be required.
a. A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.The Committee may invite such executives as it considers appropriate to be present atthe meetings of the Committee.
b. Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee. In the case of equality of votes theChairman of the meeting will have a casting vote.
c. The Company Secretary of the Company shall act as Secretary of the Committee.
d. Proceedings of all meetings must be minuted and signed by the Chairman of theCommittee at the subsequent meeting. Minutes of the Committee meetings will be tabled atthe subsequent Board and Committee meeting.
For and on behalf of the Board of Directors