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Ruchi Infrastructure Ltd.

BSE: 509020 Sector: Industrials
NSE: RUCHINFRA ISIN Code: INE413B01023
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VOLUME 602
52-Week high 4.94
52-Week low 2.60
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Mkt Cap.(Rs cr) 62
Buy Price 0.00
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Sell Price 3.02
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Ruchi Infrastructure Ltd. (RUCHINFRA) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the Thirty Second Annual Report togetherwith the Audited Financial Statements of the Company for the year ended March 31 2016.

FINANCIAL RESULTS:

2015-2016

2014-2015

(Rs. in Crore)

(Rs. in Crore)
Revenue from operations 2322.72 1059.63
Profit/(Loss) before Depreciation Tax and Exceptional Items 5.77 (5.02)
Exceptional Items* 40.55
Profit before depreciation and tax 5.77 35.53
Depreciation 10.00 12.50
Profit before taxation (4.23) 23.03
Provision for taxation (0.76) (5.10)
Provision for tax for earlier years (0.70)
Profit after taxation from continuing operations (4.99) 17.23
Profit/(Loss) from discontinued operations* (21.63)
Tax Expense for discontinued operations* (7.35)
Profit/(Loss) after tax from discontinued operations (4.99) (14.28)
Profit/(Loss) after taxation (4.99) 2.95
Balance brought forward from previous year 16.69 22.34
Less: Depreciation adjustment as per Companies Act 2013 3.17
Amount available for appropriation 11.70 22.12
APPROPRIATION
Proposed Divided
– Preference 3.28 3.28
– Equity 1.23
Tax on dividend 0.67 0.92
Balance as at end of year 7.75 16.69

*During the financial year 2014-15 the Company has transferred its oil refiningbusiness in accordance with approval accorded by members of the Company in January 2014pursuant to Section 293(1)(a) of the Companies Act 1956. Exceptional items mentionedabove represents the gain on transfer of the Oil refining business which has also beenreferred as dis-continued operations in above mentioned results.

TRANSFER TO RESERVES

The Company has not transferred any amount to the reserves during the current financialyear.

DIVIDEND

Your Directors recommend dividend on 5460613 – 6% Non Convertible CumulativeRedeemable Preference Shares of Rs. 100/- each amounting to Rs. 3.28 Crores. The Board ofDirectors regrets its inability to recommend any dividend on equity shares for the yearended March 31 2016 in view of the loss incurred by the Company during the year.

OPERATIONS AND STATE OF AFFAIRS

During the year under review the revenue from operations of your Company was Rs.2322.72 Crores as against Rs. 1059.63 Crores during the previous financial year. TheCompany has incurred loss after tax of Rs. 4.99 Crores as compared to profit after tax ofRs. 2.95 Crores during the previous year.

The performance of the Company has been severely impacted in view of certain sectorsperforming adversely which impacted segments in which the Company had larger volumes andhigher market shares. General factors such as general economic environment and consequentadverse market costs and high financial cost have severely affected the margins of theCompany. Further the Company incurred loss on sale of certain non-core investments anddiminution in value of its investment in a subsidiary.

The Company continues to focus on its core business of storage infrastructure andrenewable energy and is also evaluating opportunities for further investment in renewableenergy business keeping in the view need and prospects of clean energy andsustainability.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the applicable provisions of the Companies Act 2013 including theAccounting Standard 21 on Consolidated Financial Statements this Annual Report alsoincludes Consolidated Financial Statements for the financial year 2015-16.

DIRECTORS

As per the provisions of Section 152 of the Companies Act 2013 Mrs. Amrita ShahraSachdev Director of the Company retires by rotation at the ensuing Annual General Meetingand being eligible offers herself for re-appointment.

During the year the members of the Company at its 31st Annual GeneralMeeting held on September 23 2015 had appointed Mrs. Amrita Shahra Sachdev as a Directorof the Company liable to retire by rotation pursuant to the provisions of Section 152 ofthe Companies Act 2013 ("the Act") and Clause 49 of the erstwhile ListingAgreement. At the 31st Annual General Meeting Mr. Krishna Das Gupta and Mr.Veeresh Malik were appointed as Independent Directors pursuant to provisions of Section149 and other applicable provisions of the Companies Act 2013. Mr. K. P. Mandhana and Mr.Dinesh Khandelwal resigned from the Baord with effect form July 6 2015 and March 31 2016respectively. The Board of Directors place on record its sincere appreciation for thevaluable contribution made by them during their association wth the Company.

The Board of Directors of the Company at its meeting held on April 8 2016 hasappointed Mr. Narendra Shah as an Additional Director and Executive Director of theCompany for a period of three years with effect from April 8 2016 subject to the approvalof shareholders. The terms & conditions of the appointment of Mr. Narendra Shahincluding remuneration are set out in the notice convening the 32nd AnnualGeneral Meeting of the Company. The Company is in receipt of notice under Section 160 ofthe Companies Act 2013 proposing his candidature for directorship of the Company.

Mr. Dinesh Chandra Shahra Mr. Sajeve Deora Mr. N. Murugan and Mr. Naveen Gupta haveresigned from Directorship of the Company with effect from April 8 2016 April 7 2016April 8 2016 and April 21 2016 respectively. The Board of Directors place on record itssincere appreciation for the valuable contribution made by them during their associationwith the Company.

All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

None of the Directors of your Company is disqualified for being appointed as Directoras specified in Section 164(2) of the Companies Act 2013 read with Rule 14(1) of theCompanies (Appointment and Qualification of Directors) Rules 2014.

Necessary information required under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and Secretarial Standards in respect of the appointment ofMr. Narendra Shah at the ensuing Annual General Meeting is given in the notice conveningthe 32nd Annual General Meeting of the Company.

The details of familiarization programs to Independent Directors are available on thewebsite of the Company i.e. www.ruchiinfrastructure.com.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel’s of the Company are as follows:

Mr. Dinesh Chandra Shahra Managing Director (Upto April 8 2016)

Mr. Narendra Shah Chief Financial Officer (Upto April 7 2016)

Mr. Narendra Shah Executive Director (from April 8 2016)

Mr. Ravindra Kumar Kakani Chief Financial Officer (from April 8 2016)

Mr. Ashish Mehta Company Secretary

DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourdirectors confirm that:

a) in the preparation of the annual accounts for the financial year ended March 312016 the applicable accounting standards had been followed along with proper explanationrelating to 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 as at March 31 2016 and of the loss ofthe Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

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.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out the annualperformance evaluation of its own performance the Directors individually as well as theevaluation of the working of its various committees as per the criteria of evaluationprovided in the Nomination Remuneration and Evaluation Policy adopted by the Company. Theperformance evaluation of Independent Directors was carried out by the entire Board andthe performance evaluation of the Managing Director and the Non Independent Directors wascarried out by the Independent Directors.

MEETINGS OF THE BOARD

The Board of Directors of the Company met five times during the financial year 2015-16.The meetings were held on May 27 2015 (adjorned to May 30 2015) August 14 2015November 2 2015 and February 10 2016.

EXTRACT OF ANNUAL RETURN

Extract of an Annual Return of the Company in form MGT-9 is annexed as Annexure I tothis report.

AUDITOR AND AUDITORS’ REPORT STATUTORY AUDITORS

The Auditors Reports on the financial statements of the Company for the year 2015-16 isun-qualified and self explanatory.

M/s. Ashok Khasgiwala & Co. Chartered Accountants (Firm Registration No. 0743C)were appointed as Statutory Auditors of the Company in the 30th Annual GeneralMeeting of the Company for a period of five years i.e. until the conclusion of the 35thAnnual General Meeting of the Company subject to ratification of their appointment bymembers at every Annual General Meeting held after the above said AGM. The Board proposesratification of the appointment of M/s. Ashok Khasgiwala & Co. Chartered Accountantsas Statutory Auditors of the Company for approval of the members in the ensuing AnnualGeneral Meeting.

M/s. Ashok Khasgiwala & Co. Chartered Accountants have furnished a written consentand certificate to the effect that the ratification of their appointment if made wouldbe in accordance with the provisions of Section 139 and 141 of the Companies Act 2013. Asrequired under Regulation 33(1)(d) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Auditors have also confirmed that they hold a validcertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia.

COST AUDITORS

The Board of Directors has re-appointed M/s. K.G. Goyal & Co. Cost Accountants(Registration No. 00017/07/2008) to conduct audit of the cost accounting records of theCompany for the financial year 2016-17. A resolution regarding ratification of theremuneration payable to M/s. K.G. Goyal & Co. Cost Accountants forms part of theNotice convening the 32nd Annual General Meeting of the Company.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 SecretarialAudit Report for the financial year ended March 31 2016 Issued by Mr. Prashant Diwanpractising Company Secretary is annexed herewith as Annexure II and is self explanatory.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has four subsidiaries as at March 31 2016 i.e. Mangalore Liquid ImpexPvt. Ltd. Union Infrastructure Solutions Pvt. Ltd. Peninsular Tankers Pvt. Ltd. andRuchi Renewable Energy Pvt. Ltd.

The Company does not have any joint venture and associate Company during the year underreview however financials of an associate partnership firm namely Narang & RuchiDevelopers have been consolidated in terms of applicable Accounting Standard.

The statement containing salient features of the financial statements and highlights ofperformance of its Subsidiary Companies and their contribution to the overall performanceof the Company during the period is attached with the financial statements of the Companyin form AOC-1. The Annual Report of your Company containing inter alia the auditedstandalone and consolidated financial statements has been placed on the website of theCompany at www.ruchiinfrastructure.com. Further the audited financial statements togetherwith related information of each of the subsidiary Companies have also been placed on thewebsite of the Company at www.ruchiinfrastructure.com.

The policy for determining material subsidiary as approved by the Board of Directors ofthe Company are available on the website of the Company at www.ruchiinfrastructure.com.

PARTICULARS OF LOANS & ADVANCES GUARANTEES INVESTMENTS AND SECURITIES

Pursuant to Section 186 of Companies Act 2013 and Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 disclosure on particularsrelating to loans advances guarantees investment and securities are provided in thestandalone financial statements (Please refer Note 46 to the standalone financialstatements).

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered into by the Company with relatedparties during the financial year were in the ordinary course of business and on anarm’s length basis. All related party transactions were placed before the AuditCommittee and the Board for review and approval. Prior omnibus approval was obtained fromthe Audit Committee of the Board for the related party transactions which are ofrepetitive nature and which can be foreseen and accordingly the required disclosures aremade to the Audit Committee on quarterly basis in terms of the transactions under suchomnibus approval of the Committee.

During the year the Company has entered into certain related party transactions withM/s. Ruchi Soya Industries Limited which are material in terms of SEBI (Listingobligations and Disclosure Requirements) Regulations 2015 and to approve the aforesaidtransactions an ordinary resolution is being proposed at the 32nd AnnualGeneral Meeting of the Company for approval of the members. The policy on materiality ofrelated party transactions and on dealing with related party transactions as approved bythe Audit Committee and the Board of Directors may be accessed on the Company’swebsite at www.ruchiinfrastructure.com. Your directors draw attention of the members toNote 46 to the financial statements which set out related party disclosures in terms ofthe provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company does not have any manufacturing activity the information requiredunder Section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 is not applicable to the Company.

No Technology Absorption was effected during the year under review.

Foreign Exchange earning was Rs. 44.95 Crores (Previous year Rs. 279.91 Crores) andForeign Exchange Outgo was Rs. 4.88 Crores (Previous year Rs. 190.43 Crores)

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations to safeguard and protect from loss unauthorized use ordisposition of its assets. The Internal Auditor monitors and evaluates the efficacy andadequacy of internal control system of the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company. The Company isfollowing all the applicable Accounting Standards for properly maintaining the books ofaccounts and reporting financial statements. All the transactions are properly authorizedrecorded and reported to the Management of the Company. Significant audit observations andrecommendations along with corrective actions taken by the management thereon arepresented to the Audit Committee and thereafter to the Board.

RISK MANAGEMENT

With focussed approach towards core business of infrastructure and renewable energythe Board regularly reviews the risk management strategy of the Company.

CORPORATE GOVERNANCE

The Company has in practice a comprehensive system of Corporate Governance. A separatereport on Corporate Governance in terms of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms integral part of this report. Certificate regardingcompliance of conditions of Corporate Governance issued by Statutory Auditors is annexedto this Report as Annexure III.

PARTICULARS OF EMPLOYEES

Information required pursuant to Section 197(12) of the Companies Act 2013 ("theAct") read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure IV to this report.

The particulars of employees as required under Section 197(12) of the Act read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 may be made available to the members on request and the Annual Report isbeing sent to the members excluding such particulars.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a Vigil Mechanism/Whistle Blower Policy in terms of the ListingAgreement/ SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andthe Companies Act 2013 which deals with the genuine concerns about unethical behavioractual or suspected fraud and violation of the Company’s Code of Conduct and ethics.The Vigil Mechanism/ Whistle Blower Policy is uploaded on the website of the Company atwww.ruchiinfrastructure.com.

NOMINATION REMUNERATION AND EVALUATION POLICY

In accordance with the provisions of Section 178 of the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasput in place a Nomination Remuneration and Evaluation Policy and is annexed as Annexure Vto this report. The same is also available on the website of the Company i.e.www.ruchiinfrastructure.com.

CORPORATE SOCIAL RESPONSIBILITY

The Company has a duly constituted CSR Committee which is responsible for fulfillingthe CSR objectives of the Company. The Committee comprises of three Directors viz. Mrs.Amrita Shahra Sachdev (Chairman of the Committee) Mr. Veeresh Malik and Mr. Narendra Shah(Members). The Company has also formulated a Corporate Social Responsibility Policy (CSRPolicy) which is available on the website of the Company at www.ruchiinfrastructure.com.Annual report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed as Annexure VI to this Report.

COMMITTEES OF THE BOARD

The Board of Directors of the Company has the following Committees; Audit CommitteeNomination and Remuneration Committee Stakeholders’ Relationship Committee andCorporate Social Responsibility Committee.

The details of the role of Audit Committee Nomination and Remuneration CommitteeStakeholders' Relationship Committee along with their composition number of meetings heldduring the financial year and attendance at the meetings are provided in the CorporateGovernance Report.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDRESSAL) ACT 2013

The Company has adopted a policy in line with the provisions of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rulesthereunder. All employees (permanent contractual temporary trainees) are covered underthe said policy. An Internal Complaints Committee (ICC) has also been set up to redresscomplaints received on sexual harassment. During the year under review the details ofcomplaints received and disposed off are as follows:

No. of Complaints outstanding as on April 2015 : Nil
No. of Complaints received : Nil
No. of Complaints disposed off : Not Applicable
No. of complaints pending as on March 31 2016 : Nil

GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions pertaining to such matters during the yearunder review:

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

2. Issue of equity shares with differential rights as to dividend voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.

4. The Managing Director of the Company did not receive any remuneration or commissionfrom any of the subsidiaries of the Company.

5. 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.

6. No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateand the date of this Report.

ACKNOWLEDGEMENT

Yours Directors place on record their gratitude for the valued support and assistanceextended to the Company by the Shareholders Banks Financial Institutions and GovernmentAuthorities and look forward to their continued support. Your directors also express theirappreciation for the dedicated and sincere services rendered by employees of the Company.

For and on behalf of the Board of Directors
Narendra Shah Amrita Shahra Sachdev
Place : Gurgaon Executive Director Director
Date : August 9 2016 DIN:02143172 DIN:01494961

Annexure III to the Directors’ Report

Auditors’ Certificate

To

The Members of

Ruchi Infrastructure Limited

We have examined the compliances of conditions of Corporate Governance by RuchiInfrastructure Limited for the year ended March 31 2016 as stipulated in Clause 49 of theListing Agreement of the Company with the Stock Exchange ("Listing Agreement")for the period April 1 2015 to November 30 2015 and the Regulation 17 to 27 clauses (b)to (i) of sub-regulation (2) of Regulation 46 and para C D and E of Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations") for the period December 1 2015 to March 31 2016.

The compliances of conditions of Corporate Governance is the responsibility of themanagement. Over examination has been limited to a review of the procedure andimplementation thereof adopted by the Company for ensuring the compliances with theconditions of the certificate of Corporate Governance as stipulated in the said clause. Itis neither an audit nor an expression or opinion of the financial statements of theCompany.

In our opinion and to the best of our information and according to explanations givento us and the representations made by the Directors and the management we hereby certifythat the Company has complied with the conditions of Corporate Governance as stipulated inthe listing agreement and SEBI Listing regulations applicable for the respective period asmentioned above.

As informed to us the records relating to investors’ grievances pending againstthe Company if any is maintained by the Registrar of the company who has certified thatas at March 31 2016 no grievances remained unattended pending for more than 30 days.

We further state that such compliances is neither an assurance as to the futureviability of the company nor of the efficiency or effectiveness with which the managementhas conducted the affairs of the Company.

For and on behalf of
Ashok Khasgiwala& Co.
Chartered Accountants
CA Ashok Khasgiwala
Place: Gurgaon Partner
Date: August 9 2016 Membership No. 70288

ANNEXURE IV TO THE DIRECTORS’ REPORT

The information pursuant to Section 197 (12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are as given below:

1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;

Mr. Dinesh Chandra Shahra is the Managing Director of the Company (Resigned with effectfrom April 8 2016). The ratio of their remuneration to the median remuneration of theemployees of the Company for the financial year was as under:

Mr. Dinesh Chandra Shahra 6.08 : 1.00

The other Directors are non-executive and independent directors and hence were paidonly sitting fee.

2. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;

Mr. Dinesh Chandra Shahra 13%
Mr. Narendra Shah 88%
Mr. Ashish Mehta 16%

Note : Mr. Narandra Shah was promoted and designated as Chief Financial Officer duringthe year under review.

3. The percentage increase in the median remuneration of employees in the financialyear : 6%

4. The number of permanent employees on the rolls of Company : 119 as on March 312016.

5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

At Managerial level the median increase was 39% in the financial year 2015-2016compared to 13% at staff and worker level. There has been no exceptional circumstances forincrease in the managerial remuneration.

6. The remuneration is as per the Nomination Remuneration and Evaluation policy of theCompany.

ANNEXURE 'V' TO THE DIRECTORS’ REPORT

Nomination Remuneration and Evaluation Policy

This Nomination Remuneration and Evaluation Policy (the "Policy") applies tothe Board of Directors (the "Board") Key Managerial Personnel (the"KMP") and the Senior Management Personnel of Ruchi Infrastructure Limited (the"Company").

"Key Managerial Personnel (KMP) means –

(i) Managing Director;

(ii) Company Secretary

(iii) Whole-time Director;

(iv) Chief Financial Officer; and

(v) Such other Officer as may be prescribed.

The term "Senior Management Personnel" means to include all members otherthan the Directors and KMPs of the Company who are the functional heads of the differentfunctions of the Company.

This Policy is in compliance with Section 178 of the Companies Act 2013 read alongwith the applicable rules thereto and Clause 49 under the Listing Agreement.

1. Purpose

The primary objective of the Policy is to provide a framework and set standards for theselection nomination remuneration and evaluation of the Directors Key ManagerialPersonnel and officials comprising the senior management. The Company aims to achieve abalance of merit experience and skills amongst its Directors Key Managerial Personneland Senior Management.

2. Accountabilities

2.1 The Board is ultimately responsible for the appointment of Directors and KeyManagerial Personnel.

2.2 The Board has delegated responsibility for assessing and selecting the candidatesfor the role of Directors Key Managerial Personnel and the Senior Management of theCompany to the Nomination and Remuneration Committee which makes recommendations andnominations to the Board.

3. Nomination and Remuneration Committee

The Nomination and Remuneration Committee (NRC) is responsible for:

3.1 reviewing the structure size and composition (including the skills knowledge andexperience) of the Board at least annually and making recommendations on any proposedchanges to the Board to complement the Company’s corporate strategy with theobjective to diversify the Board;

3.2 identifying individuals suitably qualified to be appointed as the KMPs or in thesenior management of the Company;

3.3 recommending to the Board on the selection of individuals nominated fordirectorship;

3.4 making recommendations to the Board on the remuneration payable to the Directors/KMPs/Senior Officials so appointed/reappointed;

3.5 assessing the independence of independent directors;

3.6 such other key issues/matters as may be referred by the Board or as may benecessary in view of the Listing Agreement and provisions of the Companies Act 2013 andRules thereunder.

3.7 to make 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;

3.8 ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks;

3.9 to devise a policy on Board diversity;

3.10 to develop a succession plan for the Board and to regularly review the plan;

The composition and term of Nomination and Remuneration Committee shall be subject tothe following:

a) The Committee shall consist of a minimum 3 non-executive directors majority of thembeing independent.

b) Minimum two (2) members shall constitute a quorum for the Committee meeting.

c) Membership of the Committee shall be disclosed in the Annual Report.

d) Term of the Committee shall be continued unless terminated by the Board ofDirectors.

CHAIRMAN

a) Chairman of the Committee shall be an Independent Director.

b) Chairman of the Company may be appointed as a member of the Committee but shall notbe a Chairman of the Committee.

c) In the absence of the Chairman the members of the Committee present at the meetingshall choose one amongst them to act as Chairman.

d) Chairman of the Nomination and Remuneration Committee could be present at the AnnualGeneral Meeting or may nominate some other member to answer the shareholders’queries.

COMMITTEE MEMBERS’ INTERESTS

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.

b) The Committee may invite such executives as it considers appropriate to be presentat the meetings of the Committee.

VOTING

a) 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.

b) In the case of equality of votes the Chairman of the meeting will have the castingvote.

4. Appointment of Directors/KMPs/Senior Officials

4.1 Enhancing the competencies of the Board and attracting as well as retainingtalented employees for role of KMP/a level below KMP are the basis for the Nomination andRemuneration Committee to select a candidate for appointment as KMP or a level below KMPand to the Board. When recommending a candidate for appointment the Nomination andRemuneration Committee has regard to:

– assessing the appointee against a range of criteria which includes but will notbe limited to qualifications skills regional and industry experience background andother qualities required to operate successfully in the position with due regard for thebenefits from diversifying the Board;

– the extent to which the appointee is likely to contribute to the overalleffectiveness of the Board work constructively with the existing directors and enhancethe efficiencies of the Company;

– the skills and experience that the appointee brings to the role of KMP/SeniorOfficial and how an appointee will enhance the skill sets and experience of the Board as awhole;

– the nature of existing positions held by the appointee including directorshipsor other relationships and the impact they may have on the appointee’s ability toexercise independent judgment;

4.2 Personal specifications:

– Degree holder in relevant disciplines;

– Experience of management in a diverse organization;

– Excellent interpersonal communication and representational skills;

– Demonstrable leadership skills;

– Commitment to high standards of ethics personal integrity and probity;

– Commitment to the promotion of equal opportunities community cohesion andhealth and safety in the workplace;

– Having continuous professional development to refresh knowledge and skills.

5. Letters of Appointment

Each of Directors/KMP/Senior Officials is required to sign the letter of appointmentwith the Company containing the terms of appointment and the role assigned in the Company.

6. Remuneration of Directors Key Managerial Personnel and Senior Management Personnel

The guiding principle is that the level and composition of remuneration shall bereasonable and sufficient to attract retain and motivate Directors Key ManagerialPersonnel and other senior officials. The Directors Key Managerial Personnel and othersenior official’s remuneration shall be based and determined on the individualperson’s responsibilities and performance and in accordance with the limits asprescribed under the Companies Act 2013 and the Rules made thereunder if any.

The Nominations & Remuneration Committee shall determine and recommend individualremuneration packages for Directors KMPs and Senior Officials of the Company to the Boardof Directors after taking into account factors it deems relevant including but notlimited to market business performance and practices in comparable companies having dueregard to financial and commercial health of the Company as well as prevailing laws andgovernment / other guidelines.

(i) Remuneration:

a) Base Compensation (fixed salaries)

Must be competitive and reflective of the individual’s role responsibility andexperience in relation to performance of day-to-day activities usually reviewed on anannual basis; (includes salary allowances and other statutory/ non-statutory benefitswhich are normal part of remuneration package in line with market practices).

b) Variable salary:

The Nominations & Remuneration Committee may in its discretion structure anyportion of remuneration to link rewards to corporate and individual performance forfulfilment of specified improvement targets or the attainment of certain financial orother objectives set by the Board. The amount payable shall be determined by theCommittee based on performance against pre-determined financial and non-financialmetrics.

(ii) Statutory Requirements:

• Section 197(5) provides for remuneration by way of a fee to a director forattending meetings of the Board of Directors and Committee meetings or for any otherpurpose as may be decided by the Board.

• Section 197(1) of the Companies Act 2013 provides for the total managerialremuneration payable by the Company to its directors including managing director andwhole time director and its manager in respect of any financial year shall not exceedeleven percent of the net profits of the Company computed in the manner laid down inSection 198 in the manner as prescribed under the Act.

• The Company with the approval of the Shareholders and Central Government mayauthorise the payment of remuneration exceeding eleven percent of the net profits of thecompany subject to the provisions of Schedule V to the Companies Act 2013.

• The Company may with the approval of the shareholders authorise the payment ofremuneration upto five percent of the net profits of the Company to its any one ManagingDirector/Whole Time Director/Manager and ten percent in case of more than one suchofficial.

• The Company may pay remuneration to its directors other than Managing Directorand Whole Time Director upto one percent of the net profits of the Company if there is amanaging director or whole time director or manager and three percent of the net profitsin any other case.

• The net profits for the purpose of the above remuneration shall be computed inthe manner referred to in Section 198 of the Companies Act 2013.

6.1 The Independent Directors shall not be entitled to any stock option and may receiveremuneration by way of fee for attending meetings of the Board or Committee thereof or forany other purpose as may be decided by the Board and profit related commission as may beapproved by the members. The sitting fee to the Independent Directors shall not be lessthan the sitting fee payable to other directors.

6.2 The remuneration payable to the Directors shall be as per the Company’s policyand subject to the provisions of the Companies Act 2013 and shall be valued as per theapplicable Income Tax Act / Rules.

6.3 The remuneration payable to the Key Managerial Personnel and the Senior Managementshall be as may be decided by the Board and subject to the provisions of the CompaniesAct 2013 having regard to their experience leadership abilities initiative takingabilities and knowledge base.

7. Evaluation/ Assessment of Directors/ KMPs/Senior Officials of the Company –

The evaluation/assessment of the Directors KMPs and the senior officials of theCompany is to be conducted on an annual basis to comply with the requirements of theListing Agreement and Companies Act 2013.

The following criteria may assist in determining how effective the performance of theDirectors/KMPs/Senior officials have been:

• leadership & stewardship abilities;

• contributing to clearly defined corporate objectives & plans;

• communication of expectations & concerns clearly with subordinates;

• obtain adequate relevant & timely information from external sources;

• review & approve achievement of strategic and operational plans objectivesbudgets;

• regular monitoring of corporate results against projections;

• identify monitor & mitigate significant corporate risks;

• assess policies structures & procedures;

• direct monitor & evaluate KMPs senior officials;

• review management’s succession plan;

• effective meetings;

• assuring appropriate board size composition independence structure;

• clearly defining roles & monitoring activities of committees and

• review of Company's ethical conduct.

Evaluation on the aforesaid parameters will be conducted by the Independent Directorsfor each of the Executive/Whole-time/Non-Independent Directors in a separate meeting ofthe Independent Directors.

The Executive Director/Non-Independent Directors along with the Independent Directorswill evaluate/assess each of the Independent Directors on the aforesaid parameters. TheIndependent Director being evaluated will not participate in the said evaluationdiscussion.

The Nomination and Remuneration Committee shall also carry out evaluation of theperformance of Directors of the Company at regular intervals.

8. Review and Amendment

• The Nomination and Remuneration Committee or the Board may review the policy asand when it deems necessary.

• The Nomination and Remuneration Committee may issue the guidelines proceduresformats reporting mechanism and manual in supplement and better implementation to thispolicy if it thinks necessary.

• This policy may be amended or substituted by the Board of Directors on therecommendation of the Nomination and Remuneration Committee.