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NPR Finance Ltd.

BSE: 530127 Sector: Financials
NSE: N.A. ISIN Code: INE446D01011
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OPEN 24.05
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VOLUME 6500
52-Week high 37.05
52-Week low 13.35
P/E 6.36
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.00
Sell Qty 18.00

NPR Finance Ltd. (NPRFINANCE) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 27th Annual Report of theCompany together with Audited Accounts for the year ended 31st March 2016.

1. Financial Summary or Highlights:

The highlights of the financial performance of the Company for the financial year ended31st March 2016 as compared to the previous financial year are as under:Rs. inLacs

Particulars 2015-2016 2014-2015
Gross Profit before depreciation
interest and Tax 206.58 443.03
(Less) :Depreciation (62.28) (61.40)
(Less) : Interest (18.26) (49.74)
(Less) : Provision for Current Tax (96.74) (125.43)
Add/(Less) : Provision for Deferred Tax 12.01 22.02
Net Profit after tax 41.31 228.48
Add : Brought forward from previous year 1705.59 1540.17
Add/(Less) : Income Tax adjustment of earlier years 1.83 (0.53)
Add/ (Less) :Depreciation Adjustments of earlier years - (16.84)
Profit available for appropriation 1748.73 1751.28
APPROPRIATIONS
Statutory Reserve 8.26 45.69
Surplus Carried to balance sheet 1740.47 1705.59
Total 1748.73 1751.28

2. Dividend

Profit after tax for the Financial Year ended 31st March 2016 has beendecreased by Rs. 187.16 lacs. Such decrease in Profit after Tax is by and largeattributable to higher in the provision towards diminution in value of investment by Rs.99.50 lacs. The Company for the foreseeable future shall retain earnings for use in theoperation of its business and the Management feels that it is prudent to use the cash toinvest in new business opportunities for future growth. The Company has scaled down itscore business activity of financing three wheeler and the Board of Directors (hereinafterreferred to as "the Board") feels it necessary to conserve the internalaccruals and financial reserves of the Company so that the Company can exploit theopportunities to undertake development projects for improving the profitability of theCompany in the long run.

3. The amount proposed to be carried to reserves

The details of the amounts apportioned to the reserves has been provided in Point No. 1of this Directors Report under the category "Financial Summary or Highlights".

4. Change in Share Capital

During the year under review there has been no change in the Authorised or Paid-upShare Capital.

The Authorised Share Capital of the Company stands at Rs.70000000/- divided into7000000 Equity Shares of Rs.10/-each.

The Paid-up Share Capital of the Company is Rs.59896000 divided into 5989600Equity Shares of Rs.10/- each.

5. Listing

The equity shares continue to be listed on the BSE Ltd. which has nation-wide terminalsand therefore shareholders/ investors are not facing any difficulty in trading in theshares of the Company from any part of the country. The Company has paid the annuallisting fee for the financial year 2016-17 to BSE Ltd. Further in terms of therequirement of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (hereinafter referred to as "the ListingRegulations") the Company has entered into a fresh Listing Agreement with the BSELtd wide the Listing Agreement dated 23rd February 2016.

6. Corporate Governance Report

Your Company has been complying with all the requirements of the code of CorporateGovernance as specified by SEBI. A separate report on Corporate Governance is furnishedas a part of the Directors' Report and the certificate from the Company Secretary in wholetime practice regarding compliance of condition of Corporate Governance is annexed to thesaid Report.

7. Extract of the Annual Return

The Extract of the Annual Return as on the financial year ended on 31stMarch 2016 in Form MGT-9 pursuant to section 92(3) of the Companies Act 2013(hereinafter referred to as the "Act") and Rule 12(1) of the Companies(Management and Administration) Rules 2014 is appended to the Directors' Report in Annexure-I.

8. Number of Meetings of the Board

The Board of Directors of the Company met four(4) times during the Financial Year underreview.

Further one exclusive meeting of the Independent Directors pursuant to Schedule IV ofthe Act and sub-regulation 3 of Regulation 25 of the Listing Regulations was held on 11thFebruary 2016.

The Meetings were held in accordance with the provisions of the Act the erstwhileListing Agreement and the Listing Regulations 2015.

The details of the Meetings of the Board of Directors during the Financial Year 2015-16is encompassed in the Corporate Governance Report which is annexed to the said Report.

9. Disclosure pursuant to Section 177(8) of the Companies Act 2013-Compositionof the Audit Committee.

The Audit Committee of the Company comprises of three non-executive independentdirectors and one non-executive non-independent promoter director as on 31stMarch 2016. The Committee is chaired by a non-executive Independent Director Mr. NitinGuha (DIN- 01107480).

The detail of the same is morefully provided in the Corporate Governance Report.

During the Financial Year under review the Committee met four (4) times and all suchmeetings were held in accordance with the provisions of the Act Clause 49 of theerstwhile Listing Agreement and the Listing Regulations 2015. Further the Board ofDirectors have accepted all the recommendations of the Audit Committee in the FinancialYear 2015-16.

10. Composition of the Nomination and Remuneration Committee

The Remuneration Committee which was constituted on 30/ 10/2002 was reconstituted asthe Nomination and Remuneration Committee at the meeting of the Board of Directors held on16th May 2014 pursuant to the requirements of Section 178 of the Act.

The Nomination and Remuneration Committee of the Company comprises of three NonExecutive Independent Directors. The details of the Committee is provided in the CorporateGovernance Report.

11. Composition of the Stakeholders Relationship Committee

The Share Transfer and Investors Grievance Committee was reconstituted as theStakeholders Relationship Committee at the meeting of the Board of Directors held on 16thMay 2014 pursuant to the requirements of Section 178 of the Act. The Committee consistsof one Non - Executive Independent Director one Non-Executive Non- independent PromoterDirector and one Executive Non- independent Promoter Director.

The details of the Committee is provided in the Corporate Governance Report.

12. Directors' Responsibility Statement

Pursuant to the provisions of Section 134 (3) (c) read with section 134 (5) of the Actthe Directors hereby confirm and state that:

a. In the preparation of Annual Accounts the applicable Accounting Standards have beenfollowed along with the proper explanation relating to material departures if any.

b. The Directors have selected such accounting policies and have applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on the Financial Yearended on 31st March 2016 and of the profit of the company for the year underreview.

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.

However during the Financial Year under review fraud was committed by an ex-employeeof the Company wherein there was mis-appropriation of funds to the tune of Rs.9.45 Lacs (approx.). The accused has been terminated from employment and is presentlyabsconding. Accordingly FIR has been lodged with the Bowbazar Police Station Kolkata.

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 such internal financial controls are adequate and were operating effectively.

However in the light of the fraud been detected as mentioned in point no. 12 (c)above such control system has been further strengthened.

f. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

13. Declaration by the Independent Directors

Section 149(7) of the Act requires every independent director to give a declarationthat he meets the criteria of Independence defined in section 149(6) of the Act at thefirst Board Meeting of every financial year.

Accordingly the Statement of Declaration of Independence has been submitted by all theIndependent Directors; viz: Mr.Nitin Guha (DIN: 01107480) Mr. Rajendra Kumar Duggar(DIN:-00403512 ) and Mr. Arun Charan Mukherji (DIN:- 00063975).

14. Policy on Directors' Appointment & Remuneration

Pursuant to the provisions of Section 178(4) of the Act read with the Rules madethereunder and Clause 49 of the erstwhile Listing Agreement entered into with the BSELtd. the Nomination and Remuneration Committee has formulated the criteria fordetermining qualifications positive attributes and independence of a director and hasfurther formulated a policy relating to the remuneration for directors key managerialpersonnel and other employees which has been duly approved by the Board of Directors.

While formulating the Policy the Nomination and Remuneration Committee has assuredthat: a. The level and composition of remuneration is reasonable and sufficient toattract retain and motivate directors of the quality required to run the Companysuccessfully; b. The relationship of remuneration to performance is clear and meetsappropriate benchmarks; and c. The remuneration to directors key managerial personnel andsenior management involves a balance between fixed and incentive pay reflecting short andlong-term performance objectives appropriate to the working of the Company and its goals.

The details of the same have been provided in the Corporate Governance Report for theFinancial Year 2015-16.

15. Auditors & Auditors' report

A. Statutory Auditors

The appointment of M/s R. P. Boobna & Co.(Firm Registration No. 304093E) CharteredAccountants of 209 A.J.C. Bose Road "Karnani Estate" 2nd FloorRoom No. 87 Kolkata 700 017 is subject to ratification by the members at the ensuingAnnual General Meeting.

In this connection M/s R.P. Boobna & Co. have furnished a Certificate ofEligibility pursuant to Section 141 of the Act read with the Rules framed thereunder.

Based on the recommendation of the Audit Committee the Board of Directors haverecommended their ratification to the shareholders.

B. Independent Auditors' Report

The Self Explanatory Independent Auditors' Report does not contain any adverse remarksor qualification save and except for a fraud been committed by an ex-employee of theCompany which has been mentioned in point no. "i" of the Independent Auditor'sReport under the category of "Report on Other Legal and RegulatoryRequirements".

In the light of the fraud detected the Board of Directors have further strengthenedthe Internal Control System to prevent its recurrence in the future.

C. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with the Rules madethereunder Mr. Niaz Ahmed (C.P. No. 5965 Membership No. 15555) Company Secretary inwhole-time Practice was appointed for the issuance of the Secretarial Audit Report forthe Financial Year ended 31st March 2016.

He has been further re-appointed by the Board of Directors at their meeting held on26.05.2016 on the recommendation of the Audit Committee to issue the Secretarial AuditReport for the Financial Year ended 31st March 2017.

D. Secretarial Audit Report

The Secretarial Audit Report is appended to the Directors' Report in Annexure-II.

Secretarial Audit Report does not contain any adverse remark save and except thefollowing:

1. There was a delay in TDS Deposit for the month of July 2015 as the billswere received at a later date.

2. There was a delay in depositing the Service Tax liability for variousmonths.

The details of the same alongwith the reason(s) thereto are enumerated hereunder:

Month ended Reason(s) for Delay as explained by the Management
March April and May 2015 Service tax payment was delayed due to delay in bills provided by the concerned party.
July and November 2015 March 2016 There was delay in making provision for service tax under reverse charge mechanism on works contract by the Branch(s) Office.
1. The due date for service tax payment being 31st March 2016 the service tax payment was made after considering the transactions as on 30th March 2016. However certain transactions of the Money Changing Division were executed on 31st March 2016 and therefore the service tax payments pertaining to such transactions were made after the due date.
2. Further the deficit service tax payments pertaining to the Financial Year 2015-16 were also made after the due date.

3. There was a delay in submission of Quarterly Return in Form - Bregarding Generation of Energy in respect of the Wind Turbine Generators of the Companylocated at Dhule and Sangli.

The relevant non-compliance quarter alongwith the reasons thereto are enumeratedhereunder:

Quarter ended Wind Turbine Generator at Dhule / Sangli - Reason(s) for Delay as explained by the Management
June 2015 Dhule & Sangli : The disclosure sent to the office of the Chief Engineer at Mumbai was undelivered due to change in address. However the Company was not intimated of the same. The disclosure was sent upon receipt of the correct address from the vendor's Office: M/s Suzlon Global Services Limited.
December 2015 Dhule : The Company did not receive the invoice for the months of November & December 2015 since its Vendor M/s Suzlon Global Services Limited informed that the delay was being caused due to structuring of a Centralised Billing System. Therefore the Company submitted Form-B within the due date on the basis of the Invoice of Oct 2015.
Subsequently the Invoices were received after the expiry of the due date for submission of the Return and thereafter the Company resubmitted the revised Form.
March 2016 Dhule : The Company did not receive the invoice for the month of March 2016 since its Vendor M/s Suzlon Global Services Limited informed that M/s Maharashtra State Electricity Distribution Company Limited (MSEDCL)was conducting its audit process. Therefore the Company submitted Form-B on the basis of the Credit Reports of January and February 2016. Subsequently the Invoice for March 2016 was received after the expiry of the due date and thereafter the Company resubmitted the revised Form.

4. The Company's Master Data on the portal of the Ministry of CorporateAffairs reveals prosecution proceedings being initiated against the Company.

The Company did not receive any show cause notice or prosecution notice or copy ofcomplaint filed with Ld. Court any other documents pertaining to the prosecution andtherefore in this connection the Company has been corresponding with the concernedDepartment(s) of the Ministry of Corporate Affairs in order to obtain the prosecutiondetails. The same is in process.

16. Particulars of Loans guarantees or investments under Section 186 of the Act.

The provisions of Section 186 of the Act are not applicable upon a Non-BankingFinancial Company. Therefore the Company is not required to provide any disclosurepursuant to Section 134(3)(g) of the Act.

17. Particulars of contracts or arrangements with related parties referred to insub-section (1) of Section 188 of the Act in the prescribed form.

All related party transactions contracts or arrangements that were entered intoduring the financial year under review were on an arms-length basis and in the ordinarycourse of business. The Company has adhered to its "Policy on Related PartyTransactions and Materiality of Related Party Transactions" while pursuing allRelated Party transactions. During the year under review the Company has entered intomaterial related party transaction as defined in Clause 49 of the erstwhile ListingAgreement and/or section 188 of the Act read with the Rules made thereunder and/orRegulation 23 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.

The Audit Committee at its meeting held on 27th May 2015 had grantedomnibus approval in line with the Company's Policy on Related Party Transactions topursue such transactions subject to a maximum threshold limit of Rs.1 Crore per RelatedParty Transactions that are repetitive in nature for the financial year 2015-16. TheCommittee has on a quarterly basis reviewed the details of the Related PartyTransactions entered into by the Company pursuant to each omnibus approval accorded. Interms of sub-clause VII of Clause 49 of the erstwhile Listing Agreement entered into bythe Company with the BSE Ltd. and Notification dated 14th December 2015 asissued by the Ministry of Corporate Affairs regarding Companies (Meetings of Board andits Powers) Second Amendment Rules 2015 such omnibus approval is valid only for oneyear.

Accordingly the Audit Committee at its Meeting held on 11th February 2016has accorded fresh omnibus approval to pursue related party transactions subject to amaximum threshold limit of Rs.1 Crore per Related Party Transactions that are repetitivein nature for the financial year 2016-17.

The Committee shall on a quarterly basis review the details of the Related PartyTransactions entered into by the Company pursuant to each such omnibus approval accorded.Further in terms of Regulation 23 of the Listing Regulations and section 188 of the Actthe consent of the members shall be sought at the ensuing 27th Annual GeneralMeeting for approval/ratification of various Related Party Transactions. All the MaterialRelated Party Transactions entered in the ordinary course of business and at arm's lengthbasis have been reported in Form No. AOC-2 by way of Annexure – III interms of Section 134 of the Act read with the Rules made thereunder.

18. State of Company Affairs & Future Outlook

NPR Finance Ltd. a Non-Systemically Important Non-Banking Financial (Non-DepositAccepting or Holding) Company is committed to transparency and fairness in dealing withall stakeholders and to develop a culture where it is safe for all employees to raiseconcerns about any poor or unacceptable practice and any event of misconduct or violationof law in force. As on 31st March 2016 the Company does not have anyoutstanding public deposits and the Company shall not accept in future and in theFinancial Year 2016-2017 any public deposit without obtaining the prior approval inwriting of the Reserve Bank of India.

Considering the stiff competition from similar market players and the depression phaseof the Indian economy in the financial year 2015-16 the Company has cautiously executedfew fresh finances and is focusing more on recoveries. It is shifting its focus fromFinancing activities to Real Estate activities. However your Company has considered itprudent to concentrate on the smooth running of its existing business ventures till itidentifies suitable real estate projects. Similar to the previous financial year theCompany is expecting consistent profitability on account of interest income oninter-corporate deposits given to related parties and others. The Company's financialdisbursement has gone down by Rs.355.67 lacs in comparision to the previous financialyear. The Company is continuously reducing its exposure in three-wheeler financing due todifficult operating environment. The Company's entire focus is on recoveries againstearlier year losses and write-offs. The Company has recorded Rs.193.35 lacs towardsrecovery from bad debts as against Rs.279.28 lacs recorded in the previous year.

The income from the Money Changing Business which is operational in Kolkata hasincreased by 18.80% and the Company expects consistent but modest profitability from thisarea of business.

As regards the Wind Energy Sector the Company has focused on strengthening themonitoring of its Wind Turbine Generators installed at Dhule and Sangli- Maharashtra byengaging M/s WinDforce Management Services Pvt. Ltd. for monitoring the Operation andManagement of the wind farms being maintained by M/s Suzlon Global Services Limited.Taking into account the regulatory support to the Power Generation sector and the factthat this sector is exposed to climatic risk Operation and Maintenance Risk and variedvelocity the Company has adopted a wait and watch policy to review the consistency inrevenue generation from this sector before considering further expansion into any similarventure.

During the period under review the Company has not generated any income from the RealEstate Division. However the Company is desirous to explore this arena in the nearfuture subject to suitable opportunities.

19. Material Changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report.

No Material Changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the company to which the financialstatements relate and the date of this Directors' Report.

20. Conservation of Energy Technology Absorption Foreign Exchange Earnings And Outgo.

Disclosure in terms of Rule 8(3) of the Companies (Accounts) Rules 2014 :

a. Conservation of Energy

The Company has no activity relating to conservation of energy .

b. Technology Absorption

In terms of Section 134 (3) (m) of the Act read with the Rules made there under theCompany has no activity relating to Technology Absorption. Further the Company has notentered into any technology transfer agreement.

c. Foreign Exchange earnings and outgo

The Company does not have any Foreign Exchange earnings and outgo during the year underreview.

21. Risk Management Policy

In terms of Clause 49 of the erstwhile Listing Agreement and in compliance withSection 134(3)(n) of the Act the Company has a Risk Management Policy which provides forthe identification therein of elements of risk which in the opinion of the Board maythreaten the existence of the Company.

Pursuant to Schedule IV(II)(4) of the Act the Independent Directors inter-aliaamongst others review the system from time to time to ensure that Risk Management isrobust and satisfactory.

Further in terms of Regulation 17(9)(b) of Listing Regulations and Clause49(I)(D)(2)(a) of the erstwhile Listing Agreement the Board of Directors is responsiblefor framing implementing and monitoring the Risk Management Plan of the Company and hasdelegated the power of monitoring and reviewing of the risk management plan to the RiskManagement Committee. The Risk Management Committee is responsible for laying downprocedures to inform Board members about the risk assessment and minimization procedures.This is described morefully in the Corporate Governance Report.

22. Policy on Corporate Social Responsibility (CSR) Initiatives

Pursuant to provisions of Section 135 of the Act the Company is not required toconstitute a Corporate Social Responsibility Committee or to undertake any CSR activities.

Therefore the Company is not required to make any disclosure as specified in Section134(3) (o) of the Act.

23. Manner of formal annual evaluation by the Board of its own performance and that ofits committees and individual directors.

Pursuant to Section 134(3)(p) of the Act read with Rule 8(4) of the Companies(Accounts) Rules 2014 other applicable provisions of the Act and various applicableclauses of the Listing Regulations and the erstwhile Listing Agreement the disclosureregarding the manner of formal annual evaluation by the Board of its own performance andthat of its various committees and individual directors is provided hereto:

a. Evaluation Criteria

Pursuant to Part C of Schedule II of the Listing Regulations the Nomination andRemuneration Committee has formulated the criteria for evaluation of the performance ofthe Independent Directors and the Board. The Nomination and Remuneration Committee alsoidentifies persons qualified to become directors and who may be appointed in seniormanagement in accordance with the criteria laid down and recommends to the Board theirappointment and removal and carries out the evaluation of every director's performance inaccordance with Section 178(2) of the Act read with the Rules framed there under and PartC of Schedule II of the Listing Regulations. The Board shall monitor & review theBoard Evaluation Framework and evaluate the performance of all the Board Committees.

Further pursuant to Clause 49(IV)(B)(1) of the erstwhile Listing Agreement theNomination and Remuneration Committee has formulated criteria for determiningqualifications positive attributes and independence of a director and recommended to theBoard a policy relating to the remuneration of the directors key managerial personneland other employees. The details of the same is morefully described in the CorporateGovernance Report. Further the Committee has also devised a Policy on Board Diversity asprovided in Clause 49(IV)(B)(3) of the erstwhile Listing Agreement.

b. Performance Evaluation of the individual directors

Pursuant to section 178(2) of the Act the Nomination and Remuneration Committee of theCompany carries out the performance evaluation of the individual directors.

c. Board of Directors

A separate meeting of the Independent Directors of the Company was held on 11thFebruary 2016 pursuant to Clause VII of Schedule IV to the Act and Regulation 25 of theListing Regulations for transacting the following businesses as set forth in the Agenda :

1. Review the performance of the non-independent directors and the Board as a whole.

2. Review the performance of the Chairman of the Company taking into account the viewsof the executive directors and non-executive directors.

3. Assessment of the quality quantity and timeliness of flow of information betweenthe company management and the Board that is necessary for the Board to effectively andreasonably perform their duties.

The same was perused in accordance with the Evaluation criteria determined by theNomination and Remuneration Committee.

The Independent Directors of the Company in fulfilling their role and functions asspecified in Clause II of Schedule IV to the Act help in bringing an objective view inthe evaluation of the performance of the Board and management. The Independent Directorsexpressed satisfaction over the performance of all the non-independent Directors and theChairman.

d. Performance Evaluation of the Independent Directors

Pursuant to Clause VIII of Schedule IV to the Act and Regulation 19 of the ListingRegulations read with Part D of Schedule II thereto the performance evaluation of theIndependent Directors is pursued by the entire Board of Directors excluding the directorbeing evaluated.

On the basis of the report of performance evaluation the extension of the term ofappointment or its continuance in respect of the independent directors is beingconsidered.

e. Performance Evaluation of the Committee

The Board of Directors evaluate the performance of all the Board Committees based onthe Company's Performance Evaluation Policy.

24. Nomination and Remuneration Policy

Based on the recommendation of the Nomination and Remuneration Committee the Board hasadopted a Nomination and Remuneration Policy in terms of Section 178 of the Act read withRules made thereunder and Clause 49(IV)(B) of the erstwhile Listing Agreement with the BSELtd. and Listing Regulations.

The Nomination and Remuneration Policy is reproduced in

Annexure-IV.

25. Change in the nature of business

There has been no change in the nature of business of the Company in the Financial Yearunder review.

26. Directors & Key Managerial Personnel a. Non-Executive & ExecutiveDirectors- Non-independent.

Mr. Nandlal Todi (DIN-00581581) Non-Executive Non-independent Promoter Director of theCompany retires by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment. He is the relative of Mr. Pawan Kumar Todi(DIN-00590156) Managing Director of the Company.

Further Ms. Sarika Mehra (DIN-06935192) Executive Director & Company Secretarywas appointed as an Executive Director of the Company for a term of five years with effectfrom 19th September 2014.

Mr. Pawan Kumar Todi (DIN-00590156) Managing Director was re-appointed for a term offive years with effect from 1st November 2014.

b. Independent Director.

All the Independent Directors of the Company viz. Mr. Nitin Guha Mr. Arun CharanMukherji and Mr. Rajendra Kumar Duggar were appointed for a term of five years at the 25thAnnual General Meeting of the Company with effect from 19th September2014.

c. Chief Financial Officer

Mr. Ashok Kumar Shah is the Chief Financial Officer of the Company.

27. Names of Companies which have become or ceased to be the Company's subsidiariesjoint ventures or associate companies during the year under review

The Company does not have any Subsidiary or associate companies (as defined in Section2(6) of the Act) nor is associated with any joint ventures and therefore the disclosurerequirement pursuant to Rule 8 of the Companies (Accounts) Rules 2014 is not applicablefor the Company.

28. Details relating to deposits covered under Chapter V of the Act

The Comapany has not accepted any deposits during the financial year under review.

As on 31st March 2016 and as on date the Company has no outstanding publicdeposit and the Company shall not accept in future and in the Financial Year 2016 - 2017any public deposit without obtaining prior approval in writing of the Reserve Bank ofIndia.

29. Details of deposits which are not in compliance with the requirements of Chapter Vof the Act

Since the Company has neither accepted any deposits during the financial year underreview nor has any outstanding deposits as on 31st March 2016 thereforethere are no disclosures as specified in Rule 8(5) (vi) of the Companies (Accounts) Rules2014 for non-compliance with the requirements of Chapter V of the Act.

30. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and the Company's future operations

No significant and material orders have been passed by the regulators or courts ortribunals impacting the going concern status and the Company's future operations.

The Company's Master Data on the portal of the Ministry of Corporate Affairs revealsprosecution proceedings being initiated against the Company. However the Company did notreceive any show cause notice or prosecution notice or copy of complaint filed with Ld.Court any other documents pertaining to the prosecution and therefore in thisconnection the Company has been corresponding with the concerned Department(s) of theMinistry of Corporate Affairs in order to obtain the prosecution details. The same is inprocess.

31. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements

The Audit Committee of the Company ensures that there is a direct relationship betweenthe Company's objectives and the internal financial controls it implements to providereasonable assurance about their achievement.

In this connection the Audit Committee in coordination with the Internal AuditDepartment periodically reviews the following: a. Transactions are executed in accordancewith the management's general or specific authorization; b. All transactions are promptlyrecorded in the correct amount in the appropriate accounts and in the accounting period inwhich they are executed so as to permit preparation of financial information within aframework of recognized accounting policies and practices and relevant statutoryrequirements if any; c. Accountability of assets is adequately maintained and assets aresafeguarded from unauthorized access use or disposition.

There is a proper allocation of functional responsibilities within the Company and itis ensured that the quality of personnel commensurate with their responsibilities andduties. Further proper accounting and operating procedures are followed to confirm theaccuracy and reliability of accounting data efficiency in operation and safety of theassets. The regular review of work of one individual by another minimizes the possibilityof fraud or error in the absence of collusion. In the light of a fraud been committed byan ex-employee of the Company to the tune of Rs. 9.45 Lacs such internal financialcontrol system has been further strengthened to prevent its recurrence in the future.

A reference is made in this connection in the CEO & CFO Certificate dated 26thMay 2016.

32. Disclosure pursuant to Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014

The Company has no employee whose remuneration exceeds the limit prescribed underSection 197 of the Act read with Rule 5(2) of The Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014.

The disclosure pursuant to Rule 5(1) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided herein below: In computing the variousparameters Gross Salary alongwith Employers' contribution to Provident Fund Bonus paidLeave Encashment paid have been considered. Gross Salary of the employees primarilyencompasses Salary allowances and perquisites.

I. Ratio of Remuneration of each director to the median remuneration of the employeesof the company for the financial year.

Directors Ratio of Remuneration to Median Remuneration
Nandlal Todi Paid Sitting Fees only
Arun Charan Mukherji Paid Sitting Fees only
Nitin Guha Paid Sitting Fees only
Rajendra Kumar Duggar Paid Sitting Fees only
Mr. Pawan Kumar Todi 16:1
Ms. Sarika Mehra 15:1

II. The percentage increase in the remuneration of each Director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager if any in the financialyear.

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the Financial Year
Nandlal Todi - Non-executive Director -Paid Sitting Fees only
Arun Charan Mukherji - Non-executive Director -Paid Sitting Fees only
Nitin Guha - Non-executive Director -Paid Sitting Fees only
Rajendra Kumar Duggar - Non-executive Director -Paid Sitting Fees only
Mr. Pawan Kumar Todi - Managing Director 3.81 %
Ms. Sarika Mehra - Executive Director & Company Secretary 9.39 %
Mr. Ashok Kumar Shah - Chief Financial Officer of the Company 6.30 %

III. The percentage increase in the median remuneration of the employees in thefinancial year.

There has been increase of 7.77 % in the median remuneration of the employees in theFinancial Year.

IV. The number of permanent employees on the rolls of the company.

As on 31st March 2016 there are 40 Employees on the rolls of the Company.

V. The explanation on the relationship between average increase in remuneration andcompany performance.

In order to ensure that remuneration reflects Company performance the performance payis also linked to organization performance apart from an individual's performance.

VI. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company.

Comparitive Parameter Amount (in Rs. )
Aggregate remuneration of Key Managerial Personnel (KMP) in the Financial Year 2015-16. 3249842
Total Revenue 440499975
Remuneration of KMP's as a percentage of Total Revenue 0.74 %
Profit before tax 12604307
Remuneration of KMP's as a percentage of Profit before Tax 25.78 %
Profit after tax 4131307
Remuneration of KMP's as a percentage of Profit after Tax 78.66 %

VII. VARIATIONS IN :

A. The market capitalisation of the Company price earnings ratio as at the closingdate of the current financial year and previous financial year.

Particulars 31st March 2016 31st March 2015 % Change
Market Capitalisation 77565320 66484560 16.67 %
Price Earnings Ratio 18.77 2.91 544.20 %

B. Percentage increase over decrease in the market quotations of the shares of thecompany in comparison to the rate at which the Company came out with the last publicoffer.

Particulars 31st March 2016 27th Feb 1995 % Change
(IPO issue)
Market Price 12.95 15.00 -13.67 %

VIII. A. Average percentile increase already made in the salaries of employees otherthan the managerial personnel in the last financial year.

Percentile increase in the salary in 2014-15 Percentile decrease in the salary in 2015-16
41.03 22.28

The decrease in salary as provided aforesaid is by and large attributable to thedecrease in the number of employees from 60 as on 31st March 2015 to 40 ason 31st March 2016. There was no decrease in the salary of the existingemployees.

B. Its comparison with the percentile increase in the managerial remuneration andjustification thereof.

In comparision to the aforesaid decrease of 22.28% of other employees the salary ofthe Managerial Personnel increased by 6.36% to cover the inflationary impact.

C. Whether there are any exceptional circumstances for increase in the managerialremuneration.

There are no exceptional circumstances prevalent for increase in the managerialremuneration.

IX. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company.

Comparative Parameter Pawan Kumar Todi Sarika Mehra Ashok Kumar Shah
-Managing Director -Executive Director & Company Secretary -Chief Financial Officer
Remuneration of the Key Managerial Personnel (KMP) in the FinancialYear 2015-16. 1290242 1159800 799800
Total Revenue of the Company

440499975

Remuneration of KMP's as a percentage ofTotal Revenue 0.29% 0.26% 0.18%
Profit before tax

12604307

Remuneration of KMP's as a percentage of Profit before Tax 10.24% 9.20% 6.35%
Profit after tax

4131307

Remuneration of KMP's as a percentage of Profit after Tax 31.23% 28.07% 19.36%

X. The key parameters for any variable component of remuneration availed by thedirectors.

The Variable Components of Remuneration broadly comprises of - Performance basedpromotion and bonus.

The same shall also depend upon various factors including: their grade industry benchmark overall business performance.

Further in determining the director's remuneration their performance evaluation asduly carried out by the Board and/or Independent Directors shall also be given dueweightage.

Any annual increase in the remuneration of the Directors Key Managerial Personnel andSenior Management Personnel shall be at the sole discretion of the Board based on therecommendation of the Nomination and Remuneration Committee and subject to such statutoryapprovals if any.

XI. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year.

None of the employees' remuneration is more than that of the highest paid director forthe Financial Year under review.

XII. Affirmation that the remuneration is as per the remuneration policy of thecompany.

The Board of Directors hereby affirm that the remuneration paid to all directors KeyManagerial Personnel is in accordance with the Nomination and Remuneration Policy of theCompany.

33. Vigil Mechanism/Whistle Blower Policy

The Vigil Mechanism/Whistle Blower Policy of the Company is aimed to provide avigilance mechanism for the directors and employees of the Company to raise concern of anyviolations of legal or regulatory requirements incorrect or misrepresentation of anyfinancial statements and reports etc. The purpose of this Policy is to encourage theCompany's directors and employees who have concerns about suspected misconduct to comeforward and express these concerns without fear of punishment or unfair treatment.

No personnel have been denied access to the Audit Committee. There were no instances ofreporting under the Whistle Blower Policy.

The details of the Vigil Mechanism/Whistle Blower Policy is explained in the CorporateGovernance Report and also disclosed on the website of the Company.

34. Insider Trading

The Company has put in place a Code of Conduct for Prevention of Insider Trading basedon SEBI (Prohibition of Insider Trading) Regulations 1992. This code was applicable uponall Directors and select employees. The code ensured prevention of dealing in shares bypersons having access to unpublished price sensitive information.

The aforesaid Code was effective till 14th May 2015 & thereafterrepealed with the following Codes pursuant to the SEBI(Prohibition of Insider Trading)Regulations 2015 and effective from 15th May 2015:

a. Code of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation.

b. Code of Conduct to Regulate Monitor and Report Trading.

The aforesaid Codes have been disclosed on the website of the Company.

35. Transfer of amount to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act 1956therelevant amount which remained unpaid or unclaimed for a period of seven years has beentransferred by the Company from to time to time on respective due dates to the InvestorEducation and Protection Fund(IEPF).Pursuant to the provisions of Investor Education andProtection Fund (Uploading of information regarding unpaid and unclaimed amounts lyingwith Companies) Rules 2012 the Company had uploaded from time to time the details ofunpaid and unclaimed amount lying with the Company on the Company's website (www.nprfinance.com)as also on the Ministry of Corporate Affairs' website. Members are requested to note thatonce the unclaimed dividend is transferred to the IEPF no claim shall lie in respectthereof.

Since no amount was lying unpaid and unclaimed therefore the question of transfer toIEPF in the Financial Year 2015-16 does not arise.

36. Prudential Norms for NBFC'S

Your Company has been complying with all the requisite norms prescribed by the ReserveBank of India for income recognition accounting standards capital adequacy creditrating provisioning and all other requirements applicable for Non-Deposit TakingNon-Systematically Important NBFCs.

37. Green Initiative

To support the ‘Green Initiative' in the Corporate Governance taken by theMinistry of Corporate Affairs to contribute towards greener environment and to receiveall documents notices including Annual Reports and other communications of the Companyinvestors should register their e-mail addresses with M/s. Niche Technologies PrivateLtd. if shares are held in physical mode or with their DP if the holding is inelectronic mode.

Electronic Copies of the Annual Report and Notice of the Annual General Meeting aresent to all members whose e-mail addresses are registered with the Company/DepositoryParticipant(s).For members who have not registered their email address physical copies ofthe Annual Report and Notice of the Annual General Meeting are sent in the permitted mode.Members requiring physical copies can send their request to Ms. Sarika Mehra(DIN-06935192) Executive Director & Company Secretary of the Company.

In terms of Section 108 of the Act and Rule 20 of the Company's (Management andAdministration) Rules 2014 the Company is providing remote e-voting facility to all themembers to enable them to cast their votes electronically on all the resolutions set forthin the Notice. This is pursuant to Section 108 of the Act and Rule 20 of the Company's(Management and Administration) Rules 2014.

38. Compliance to the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 read with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Rules 2013.

The Company is committed to the protection of women against sexual harassment. Theright to work with dignity are universally recognised human rights by internationalconventions and instruments such as Convention on the Elimination of all Forms ofDiscrimination against Women. In adherence to the provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 read with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Rules 2013 theNPR Group has constituted an Internal Complaints Committee to look into the mattersrelating to sexual harassment at workplace.

Place : Kolkata
Dated : 26.05.2016

Ms. Sarika Mehra (DIN-06935192) Executive Director & Company Secretary is thePresiding Officer of the Committee.

In the event of any sexual harassment at workplace any woman employee of the NPR Groupmay lodge complaint to Ms. Sarika Mehra in writing or electronically through e-mail at : smehra@nprfinance.com.

During the period under review no complaints were received by the Company in termsof the aforesaid act.

39. Management's Discussion and Analysis

In accordance with the listing requirement the Management's Discussion and Analysisforms part of this Report.

40. Acknowledgement

Your Directors wish to place on record their gratitude for the valuable guidance andsupport rendered by the Government of India various State Government departmentsFinancial Institutions Banks and stakeholders including but not limited toshareholders customers and suppliers among others. We place on record our appreciationof the contribution made by our employees at all levels. The Directors look forward to thecontinued support of all the stakeholders in the future and appreciate and value thecontribution made by every member of the Company.

On Behalf of the Board of Directors

Arun Charan Mukherji

Chairman

DIN-00063975

Annexure - III to the Directors' Report

FORM AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Form of Disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to insub-section (1) of section 188 of the Companies Act 2013 including certain arm's lengthtransactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm's lengthbasis

During the year under review the contracts or arrangements with related party weredone at arm's length basis.

2. Details of material contracts or arrangement or transactions at arm's lengthbasis

Name of related party and nature of relationship GNB Motors Pvt. Ltd. -Enterprise where control exists Star Wire (India) Vidyut Pvt. Ltd. -Enterprise where control exists T. P. Farms Pvt. Ltd. -Enterprise where control exists
Nature of contracts/arrangements/ transactions Loan Given Loan Given Loan Given
Duration of the contracts / arrangements/transactions Payable on Demand Payable on Demand Payable on Demand
Salient terms of the contracts/ arrangements/ transactions including the valueif any 1. Loan given during the year: Rs. 5500000. 1. Loan given during the year: Rs. 34000000 1. Loan given during the year: Nil
2. Refund of Loan given during the year: Rs. 28000000. 2. Refund of Loan given during the year: Nil 2. Refund of Loan given during the year: Nil
3. Interest Received during the year(net of TDS) : Rs. 12289990. 3. Interest Received during the year(net of TDS) : Rs. 6781271. 3. Interest Received during the year(net of TDS) : Rs. 1040259.
4. Rate of interest: 12% 4. Rate of interest: 12% 4. Rate of interest: 12%
Amount paid as advances if any - - -

 

Name of related party and nature of relationship Viewlink Highrise LLP (formerly Viewlink Highrise Pvt. Ltd. - Enterprise where control exists Mountview Tracom LLP- Enterprise where control exists Ganesh Narayan Brijlal Pvt. Ltd. - Enterprise where control exists
Nature of contracts/arrangements/ transactions Loan Given Loan Given Rent Paid
Duration of the contracts / arrangements/transactions Payable on Demand Payable on Demand Rental Agrement for five years subject to renewal.
Salient terms of the contracts/ arrangements/ transactions including the valueif any 1. Loan given during the year: Nil. 1. Loan given during the year: Nil. Rent Paid during the year Rs. 86356/-
2. Refund of Loan given during the year: Rs. 3124434. 2. Refund of Loan given during the year: Nil.
3. Interest Received during the year(net of TDS) : Rs. 70134. 3. Interest Received during the year(net of TDS) : Rs. 799556.
4. Rate of interest: 12% 4. Rate of interest: 12%
Amount paid as advances if any - - -

 

Name of related party and nature of relationship Sheersh Enclave Private Limited (formerly Rose velly Enclave Private Limited)- Enterprise where control exists Oval Promoters LLP - Enterprise where control exists Matra Studios LLP - Enterprise where control exists
Nature of contracts/arrangements/ transactions Loan Given Loan Given Loan Given
Duration of the contracts / arrangements/transactions Payable on Demand Payable on Demand Payable on Demand
Salient terms of the contracts/ arrangements/ transactions including the valueif any 1. Loan given during the year: Rs. 3500000. 1. Loan given during the year: Nil. 1. Loan given during the year: Rs. 150000.
2. Refund of Loan given during the year : Nil. 2. Refund of Loan given during the year : Nil. 2. Refund of Loan given during the year : Nil.
3. Interest Recd during the year (net of TDS) : Rs. 23754. 3. Interest Recd during the year (net of TDS) : Rs. 1179245. 3. Interest Recd during the year (net of TDS) : Rs. 434745.
4. Rate of interest: 12% 4. Rate of interest: 12% 4. Rate of interest: 12%
Amount paid as advances if any - - -

 

Name of related party and nature of relationship Mr. Pawan Kumar Todi- Key Managerial Personnel Ms. Sarika Mehra - Key Managerial Personnel Mr. Ashok Kumar Shah- Chief Financial Officer
Nature of contracts/arrangements/ transactions Remuneration Remuneration Remuneration
Duration of the contracts / arrangements/transactions Remuneration paid for the year Remuneration paid for the year Remuneration paid for the year
Salient terms of the contracts/ arrangements/ transactions including the valueif any Remuneration paid for the year: Rs. 1290242. Remuneration paid for the year: Rs. 1159800. Remuneration paid for the year: Rs. 799800.
Amount paid as advances if any - - -

Note:- Appropriate approvals have been taken for Related Party Transactions. Allthe transactions referred above are in the ordinary course of business and on an arm'slength basis.

On Behalf of the Board of Directors

NPR Finance Ltd.

Arun Charan Mukherji

Chairman

DIN-00063975

Annexure - IV to the Directors' Report

NOMINATION AND REMUNERATION POLICY

(updated on 14th November 2015)

NPR Finance Ltd. (the "Company") recognizes that Human Capital plays anessential role in developing a company's strategy. The future of any company depends onwhat it knows rather than what it owns. The former is intimately tied to the knowledge andexperience of the people of the organization. Further the honesty integrity soundjudgement and performance of the Directors and the Senior Management are the key criteriafor the success of the Company.

1. PREFACE

1.1 Section 178 of the Companies Act 2013 read with Rules made thereunder andapplicable regulations of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (hereinafter referred to as the"Listing Regulations") defines the role of the Nomination and RemunerationCommittee to include inter alia amongst others the following:

• To formulate the criteria for determining qualifications positive attributesand independence of a director and to recommended to the Board a policy relating to theremuneration of the directors key managerial personnel and other employees.

• To identify persons who are qualified to become directors and who may beappointed in senior management in accordance with the criteria laid down and recommend tothe Board their appointment and removal.

1.2 This Policy shall be applicable upon all the Directors Key Managerial PersonnelSenior Management Personnel and other employees of the Company as prescribed.

1.3 This amended Policy shall be effective from 1st December 2015.

2. POLICY OBJECTIVES

This Policy is framed to define the basic principles and procedure of nomination anddetermination of remuneration of all the Directors Key Managerial Personnel and otheremployees of the Company. It is further intended to ensure that the Company is able toattract develop and retain high-performing Directors Key Managerial Personnel and otheremployees and that their remuneration is aligned with the Company's business strategiesvalues and goals.

3. DEFINITIONS

3.1 "Act"means the Companies Act 2013 and the Rules made thereunderincluding any modifications amendments or re-enactment thereof.

3.2 "Audit Committee" means the Audit Committee constituted by the Board ofDirectors of the Company in accordance with Section 177 of the Act.

3.3 "Board of Directors" or "Board" means the collective body ofthe Board of Directors of the Company.

3.4 "Committee" means the Nomination and Remuneration Committee of theCompany as constituted or reconstituted by the Board in accordance with the provisions ofSection 178 of the Companies Act 2013 and the Listing Regulations as amended time totime.

3.5 "Company" means NPR Finance Limited inclusive of its Registered Officeand all Branch Offices.

3.6 "Director" means a Director appointed to the Board of a Company.

3.7 "Independent Director" means a Director referred under provisions ofSection 149 of the Companies Act 2013 and the Rules framed thereunder and as providedunder the Listing Regulations as amended time to time.

3.8 "Key Managerial Personnel" means a Key Managerial Personnel as defined inthe Act.

3.9 "Manager" means an individual who subject to the superintendencecontrol and direction of the Board has the management of the whole or substantially thewhole of the affairs of a Company and includes a director or any other person occupyingthe position of a manager by whatever name called whether a contract of service or not.

3.10 "Policy" means this Nomination and Remuneration Policy

3.11 "Relative" means a relative as defined in the Act.

3.12 "Senior Management" shall mean personnel of the Company who are membersof the core management team excluding the Board of Directors. This would also include allmembers of the management one level below the executive directors including all functionalheads.

Interpretation: Words and/or expressions not specifically defined here shall derivetheir meaning from the Companies Act 2013 read with the Rules made thereunder ListingRegulations or any other law/legislature applicable upon the Company.

4. POLICY

4.1 Identification process of persons qualified to become Directors and who may beappointed in senior management

The Committee shall identify persons who are qualified to become directors and who maybe appointed in senior management in accordance with the criteria laid down in the Act andthe Listing Regulations. Subsequently they shall recommend to the Board their appointmentand removal and carryout the evaluation of every director's performance in accordance withSection 178(2) of the Act readwith the Rules framed thereunder and the ListingRegulations.

4.2 Criteria for determining qualifications positive attributes and independence of adirector

Qualifications positive attributes of a director :

The supreme executive authority controlling the management and affairs of a companyvests in the team of directors of the company collectively known as its Board ofDirectors. Therefore considering the pivotal role of the Directors it is important todefine the required qualifications and positive attributes of a person appointed as adirector :

1. The person should not be disqualified pursuant to Section 164 of the Act read withthe Rules made thereunder.

2. The Company shall consider the balance of skills experience expertise appropriateto the requirements of the businesses of the Company etc. of persons for appointment asDirectors Key Managerial Personnel. The need of the hour also requires such person topossess requisite business literacy/skill.

3. The person should be open to learning and possess strong ethical values andrequisite communication skills to execute his or her task as a Director.

4. A director should have the ability to respect alternative viewpoints.

The Board has not established specific minimum age education years of businessexperience or specific types of skills for Board members but in general expects acandidate to have extensive experience and proven record of professional successleadership and the highest level of personal and professional ethics integrity andvalues.

The aforesaid criteria and attributes are not exhaustive principles and the Committeeand Board can look beyond the aforesaid guidelines to take the best decisions in theinterest of the Company.

Additional Qualifications for a director appointed as a member of the AuditCommittee:

In addition to the attributes laid in Clause No. 4.1 of this Policy a Directorproposed to be appointed as a member of the Audit Committee should possess the followingadditional qualifications in lieu of requirements of Section 177 of the Act read with theRules made thereunder and the Listing Regulations:

1. All members of the Audit Committee shall be financially literate. The term"financially literate" means the ability to read and understand basic financialstatements i.e. balance sheet profit and loss account and statement of cash flows.

2. At least one member shall have accounting or related financial management expertise.A member will be considered to have accounting or related financial management expertiseif he or she possesses experience in finance or accounting or requisite professionalcertification in accounting or any other comparable experience or background whichresults in the individual's financial sophistication including being or having been achief executive officer chief financial officer or other senior officer with financialoversight responsibilities.

Additional Criteria/Qualifications for a person proposed to be appointed as aManaging Director Whole-time Director or Manager :

In addition to the aforesaid criteria the Company shall also adhere to the provisionsof Section 196 of the Act read with the Rules made thereunder and Schedule V of the Actalongwith the relevant provisions of the Listing Regulations if any.

Criteria of Independence for independent Directors :

Pursuant to the Listing Regulations and Section 149(6) of the Act read with the Rulesmade thereunder ‘independent director' shall mean a non-executive director otherthan a nominee director of the company:

1. who in the opinion of the Board is a person of integrity and possesses relevantexpertise and experience;

2. (a) who is or was not a promoter of the company or its holding subsidiary orassociate company; (b) who is not related to promoters or directors in the company itsholding subsidiary or associate company;

3. apart from receiving director's remuneration has or had no material pecuniaryrelationship with the company its holding subsidiary or associate company or theirpromoters or directors during the two immediately preceding financial years or duringthe current financial year;

4. none of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year ;

5. who neither himself nor any of his relatives

(a) holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;

(b) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of

(A) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten per cent or more of thegross turnover of such firm;

(c) holds together with his relatives two per cent or more of the total voting power ofthe company; or

(d) is a Chief Executive or director by whatever name called of any non - profitorganisation that receives twenty-five per cent or more of its receipts from the companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company;

(e) is a material supplier service provider or customer or a lessor or lessee of thecompany; 6. who is not less than 21 years of age.

Limits on number of Directorships:

1. The number of Directorships of the proposed appointee and the present directorsshould be within the prescribed limits of Section 165 of the Act read with Rules madethereunder including any statutory modification(s) and/or reenactment thereof andrelavant provisions of the Listing Regulations if any.

2. Pursuant to Listing Regulations a person shall not serve as an independent directorin more than seven (7) listed companies. Further any person who is serving as a wholetime director in any listed company shall serve as an independent director in not morethan 3(three) listed companies.

4.3 Criteria for determining qualifications positive attributes of persons who may beappointed in senior management

The Company shall consider the balance of skills experience expertise appropriate tothe requirements of the businesses of the Company etc. of persons for appointment atSenior Management levels.

4.4 Procedure of appointment:

The appointment of the Directors Manager Key Managerial Personnel and SeniorManagement Personnel shall be governed by this Policy alongwith the Articles ofAssociation relevant provisions of the Act read with the Rules and Schedules formingpart thereto and the provisions of the Listing Regulations.

4.5 Tenure

Independent Directors

Pursuant to Listing Regulations :

The maximum tenure of independent directors shall be in accordance with the CompaniesAct 2013 and rules made thereunder in this regard from time to time.

Executive Directors

Pursuant to Section 196 of the Act read with the Rules made thereunder there-appointment of the Managing Director Whole-time Director or manager shall be for aterm not exceeding five (5) years at a time.

Provided that no re-appointment shall be made earlier than one year before the expiryof the term.

Retirement

The Directors Key Managerial Personnel 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 Key Managerial Personnel SeniorManagement Personnel in the same position/ remuneration or otherwise even after attainingthe retirement age in the interest of the Company.

4.6 Succession Planning

The Board shall satisfy itself that plans are in place for orderly succession forappointments to the Board and to senior management. The Company recognizes that successionplanning will ensure that investors do not suffer due to sudden or unplanned gaps inleadership. Succession Planning will therefore ensure that the Company is well-preparedfor expansion loss of any key talent business continuity and that there is anappropriate balance of skills experience and expertise on the Board and SeniorManagement.

4.7 Removal

The Committee may recommend with reasons recorded in writing removal of a DirectorKey Managerial Personnel or Senior Management Personnel subject to the provisions of thisPolicy the Articles of Association Companies Act 2013 read with the Rules madethereunder the Listing Regulations and any other applicable Law in force. The tenure ofthe Managing Director and the Executive Director can be terminated by either party bygiving ninety (90) days notice in writing and shall be subject to the approval of theNomination and Remuneration Committee and the Board of Directors.

4.8 Criteria for determining remuneration to Directors Key Managerial Personnel andSenior Management Personnel.

Remuneration to the Non-Executive Directors

1. All Non-Executive Directors including the Independent Directors are entitled toreceive remuneration by way of sitting fees for each meeting of the Board or Committee ofthe Board( Audit Committee & the Nomination and Remuneration Committee).The sittingfees is determined and revised by the Board and is subjected to the threshold limitprescribed in the Listing Regulations Companies Act 2013 and the Rules made thereunderand any other applicable law(s) in force.

2. Further they may receive such other remuneration as permissible under theprovisions of the Companies Act 2013 read with Rules made thereunder and/or theprovisions of the Listing Regulations.

3. The Listing Regulations provide that :

All fees / compensation if any paid to non-executive directors including independentdirectors shall be fixed by the Board of Directors and shall require previous approval ofshareholders in general meeting. The shareholders' resolution shall specify the limits forthe maximum number of stock options that can be granted to non-executive directors in anyfinancial year and in aggregate.

Provided that the requirement of obtaining prior approval of shareholders in generalmeeting shall not apply to payment of sitting fees to non-executive directors if madewithin the limits prescribed under the Companies Act 2013 for payment of sitting feeswithout approval of the Central Government.

Remuneration of the Key Managerial Personnel Senior Management Personnel Managerand the Executive Directors including Whole-time Director and Managing Director.

1. The remuneration of the Managing Director and Whole-time Director is determined bythe Board of Directors subject to the Listing Regulations statutory limits laid in theCompanies Act 2013 read with the Rules and Schedules forming part thereto and theapproval of the shareholders and/or Central Government wherever required.

2. The remuneration shall be broadly divided into the following components:

I. The Fixed Components- This shall broadly encompass: Salary allowancesperquisites retirement benefits etc.

II. The Variable Components- Performance based promotion and bonus shall beprimarily included hereto.

3. The remuneration package of the employees will comprise of the aforesaid twocomponents. However the same shall also depend upon various factors including: theirgrade industry bench mark overall business performance. Further in determining thedirector's remuneration their performance evaluation as duly carried out by the Boardand/or Independent Directors shall also be given due weightage.

4. Any annual increase in the remuneration of the Directors Key Managerial Personneland Senior Managerial Personnel shall be at the sole discretion of the Board based on therecommendation of the Committee and subject to such statutory approvals if any.

5. Disclosures a. Pursuant to the provisions of section 178(5) of the Actread with the Rules made thereunder the Company shall disclose this Policy in the Board'sReport. b. Further the Company shall publish its criteria of making payments tonon-executive directors in its Annual Report.

Alternatively this may be put up on the company's website and reference drawn theretoin the Annual Report.

6. Amendments in the Policy a. The Nomination & Remuneration Committeeshall review and amend this Policy as and when required subject to the approval of theBoard of Directors. b. Any subsequent amendment / modification in the applicable laws inthis regard shall automatically apply to this Policy.