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Sagardeep Alloys Ltd.

BSE: 510200 Sector: Metals & Mining
NSE: SAGARDEEP ISIN Code: INE976T01013
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Sagardeep Alloys Ltd. (SAGARDEEP) - Director Report

Company director report

Dear Member

Your Directors take pleasure in presenting the 9th Annual Report along withAudited Financial Statements of your Company for the financial year ended 31st March2016.

Financial Results

During the year under review your Company has achieved a total net sale of Rs. 127.29Crores. During the year the Company has achieved Net Profit after Tax (NP) ofRs.3975865/-. Your Directors are hopeful about the performance to be improved of theCompany in the coming years. The following table shows the operational results of theCompany for the year 2015-16 as compared to that of the previous year.

(Standalone)

(Amount in Rs.)

Particulars for the year ended March 31 2016 March 31 2015
Net revenue from Operations 1272936937 1324529815
Profit Before Depreciation and Tax 12542305 12042279
Less: Depreciation 4126672 3616142
Profit Before Tax 8415633 8426137
Less: Provision for Taxation (including deferred tax) 4439768 1127186
Profit After Tax 3975865 7298951
EPS (Basic) 0.47 0.87
EPS (Diluted) 0.47 0.87

Dividend

Your Director feel that it is prudent to plough back the profits of the Company forfuture growth of the Company and therefore do not recommend any dividend for the yearended March 31 2016.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

Since there was no unpaid/unclaimed dividend the provision of Section 125 of theCompanies Act 2013 do not apply.

Reserves

During the year unde review the Company has not transferred any amount to reserve.

Subsidiary Joint Ve tures and Associate Companies

The Company has one wholly owned Indian Subsidiary company i.e. Sagardeep EngineersPrivate Limited.

Consolidated Financial Statement

The Financial Statement of the Company for the Financial year 2015-16 are prepared incompliance with the applicable provisions of the Act Accounting Standards and asprescribed by Securities and Exchange Board of India (SEBI) under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as theSEBI Regulation). The Consolidated Financial Statement has been prepared on the basis ofthe audited financial statement of the Company as approved by their respective Board ofDirectors. Pursuant to the provisions of Section 136 of the Act the Financial Statementsof the Company the Consolidated Financial Statements along with all relevant documentsand Auditors report thereon form part of this Annual Report. The Financial Statements asstated above are also available on the website of the Company and can be accessed at theweb link www.sdalloys.com

Public Deposit

The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the period under review. Hence therequirement for furnishing the details of deposits which are not in compliance withChapter V of the Act is not applicable.

Particulars of loan Guarantees or Investment made under Section 186

Details of loans Guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the note no. 31 & 30 of the Standalonefinancial statements and consolidated financial statements of the Company respectively.

Directors& Key Management Personnel

I. Composition of Board & Board Meetings

The Board of Directors of the Company has an optimum combination of Executive NonExecutive and Independent Directors. As on 31st March 2016 the Board comprises of8(Eight) Directors out of which 4 are Executive Directors and 4 are non-executiveIndependent Directors that includes one Woman Director. The Chairman of the Board is anexecutive Director.

The Board of Directors duly met 12 times on 01/04/2015 08/05/2015 16/05/201506/08/2015 15/09/2015 26/10/2015 17/11/2015 21/12/2015 30/12/2015 05/02/201626/02/2016 & 30/03/2016 during the year. The Composition category and attendance ofeach Director at the Board and Annual General Meeting and Number of other Directorship andChairmanship / Membership of Committee of each Director in various companiesis as follows:-

Name of Director Designation Category No of Board Meetings held during the year * No of Board Meetings attended during the year Attendance at the AGM
Mr.Satishkumar A Mehta Chairman & Managing Promoter 12 12 Yes
Director
Mr.Jayeshkumar A Mehta Whole Time Director Promoter 12 12 Yes
Mr. Asamal S Mehta Whole Time Director Promoter 12 12 Yes
Mr. Harish A Mehta Whole Time Director Promoter 12 07 Yes
#Mr. Hemang M Panchal Non-Executive Director Independent 08 01 No
#Mr. Hemendra B Patel Non-Executive Director Independent 08 06 Yes
#Mr. Nileshkumar D Patel Non-Executive Director Independent 08 05 Yes
#Mrs. Vinita P Maheshwari Non-Executive Director Independent 08 07 Yes

*from the date of appointment

# appointed w.e.f. 28/08/2015

II. Retirement by Rotation

In accordance with the provisions of the Companies Act 2013 and Companies Articles ofAssociation Mr. Jayeshkumar A Mehta (DIN-02156140) retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. Necessaryresolution for his re-appointment is placed before the shareholder for approval.

III. Profile of Directors seeking appointment / reappointment

As required under regulation 36(3) of SEBI (LODR) 2015 particulars of the Directorsretiring and seeking reappointment at the ensuing Annual General Meeting is annexed to thenotice convening 9th Annual General Meeting.

IV. Key Managerial Personnel

The following persons are the Key Managerial Personnel(s) of the Company:

a. Mr. Satishkumar A Mehta Chairman & Managing Director

b. Mr. Jayeshkumar A Mehta Whole Time Director

c. Mr. Asamal S Mehta Whole Time Director

d. Mr. Harish A Mehta Whole Time Director

e. Mr. Bhavik R Somani Chief Financial Officer

f. Mr. Dileep Panchal Company Secretary

Further the 5 year term of Mr. Satishkumar A Mehta Managing Director Mr. JayeshkumarA Mehta Mr. Asamal S Mehta Mr. Jayeshkumar A Mehta WholeTime Directors of theCompany expires on December 31 2016. The Board recommends their appointment for a furtherperiod of 5 years and the resolutions seeking member’s approval forms part of thenotice convening the AGM.

Mr. Jayeshkumar A Mehta Mr. Asamal S Mehta and Mr. Jayeshkumar A Mehta are theDirectors who are liable to retire by rotation.

V. Declaration from Independent Director

All the Independent Directors of the Company have given their declarations stating thatthey meet the criteria of independence as prescribed under the Section 149(6) of theCompanies Act 2013 read with the rules made there under and in the opinion of the Boardthe Independent Directors meet the said criteria.

VI. Familiarization Program for Independent Directors

As the Company was not listed during the F.Y. 2015-16 it has not conducted anyspecific program called ‘Familiarization Program for Independent Directors’during the F.Y. 2015-16.

Audit Committee

The Audit Committee is duly constituted on 15/09/2015 in accordance with the ListingAgreement read with SEBI (LODR) Regulations 2015 and of Section 177 of the Companies Act2013 read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules 2014.It adheres to the terms of reference which is prepared in compliance with Section 177 ofthe Companies Act 2013 and SEBI (LODR) Regulations 2015. The Members of the Committeeare:-

Name Category Position
Mr. Nileshkumar D Patel Non Executive Independent Director Chairman
Mr. Hemendra B Patel Non Executive Independent Director Member
Mr. Harish A Mehta Executive Director Member

Two third of the members are Independent Directors and all the members are financiallyliterate. The composition role functions and powers of the Audit Committee are in linewith the requirements of applicable laws and regulations. The Audit Committee shalloversee financial reporting process and disclosures review financial statements internalaudit reports related party transactions financial and risk management policiesauditors qualifications compliance with Accounting Standards etc. and oversee compliancewith Stock Exchanges and legal requirements concerning financial statements and fixationof audit fee as well as payment for other services etc.

Four Audit Committee meetings were held during the year 2015-16 at the RegisteredOffice of the Company on 15/09/2015 26/10/2015 30/12/2015 and 05/02/2016. All themeetings were attended by the Chairman and all the members of the Committeerepresentatives of Internal and Statutory Auditors and Chief Financial Officer. TheCompany Secretary acts as Secretary to the Audit Committee and no personnel has beendenied access to the Audit Committee.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee is constituted on 15/09/2015 in compliancewith the requirements of Listing Agreement read with SEBI (LODR) Regulations 2015 andSection 178 of the Companies Act 2013 read with Rule 6 of the Companies (Meetings of theBoard and its Powers) Rules 2014. The Company Secretary acts as the Secretary to thecommittee and the Committee Members are:

Name Category Position
Mr. Nileshkumar D Patel Non Executive Independent Director Chairman
Mr.Vinita P Maheshwari Non Executive Independent Director Member
Mr. Hemendra B Patel Non Executive Independent Director Member

The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration of Directors Key Managerial Personnel and other employees.

The said policy is furnished in Annexure -B and is attached to this report.

Stakeholders Relationship Committee

The Stakeholders Relationship Committee was constituted on 15/09/2015 in compliancewith the requirements of the Listing Agreement and Section 178 of the Companies Act 2013.Company Secretary is the Compliance Officer who acts as the Secretary to the Committeeand the Members of the Committee are:

Name Category Position
Mr. Vinita P Maheshwari Non Executive Independent Director Chairman
Mr. Hemang M Panchal Non Executive Independent Director Member
Mr. Satishkumar A Mehta Chairman & Managing Director Member

The Stakeholders Relationship Committee looks into shareholders’ complaintsrelated to transfer of shares non-receipts of balance sheet besides complaints from SEBIStock Exchanges Court and various Investor Forums. It oversees the performance of theRegistrars and Transfer Agent and recommends measures for overall improvement in thequality of investor services. The Company is in compliance with the SCORES which hasinitiated by SEBI for processing the investor complaints in a centralized web basedredress system and online redressal of all the shareholders complaints.

Compliance Officer

The Compliance officer of the Company is Mr. Dileep Panchal who is also designated asCompany Secretary of the Company.

Performance Evaluation

Pursuant to the provisions of Section 134 of the Companies Act 2013 every listedcompany or such other public company having such paid-up share capital as may beprescribed shall attach a statement indicating the manner in which formal annualevaluation has been made by the Board of its own performance and that of its Committeesand individual director.

As the Company was not listed during the F.Y. 2015-16 nor does it have such paid upcapital as prescribed the Board has not conducted its performance evaluation and itscommittees during the F.Y. 2015-16.

Change in the nature of business if any-

During the year there is no change in the nature of business of the Company.

During the year under review your Company has closed its chemical manufacturing plant dueto some unavoidable circumstances and conditions.

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

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Companyand the date or report..

Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company’s operations in future

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concerns status and Company’s operations infuture.

Details of Subsidiary/Joint Ventures/Associate Companies

Pursuant to Section 129(3) of the Companies Act 2013 read with rule 5 of the Companies(Accounts) Rules 2014 the statement containing the salient features of the financialstatements of the Company’s subsidiaries is attached to the financial statements.

Further the Company had remitted Rs. 2719748/- on December 28 2015 for subscribingshare capital in Sagardeep General Trading FZE in Dubai which on allotment of shares wouldhave made it a wholly owned subsidiary of the Company. However the funds have beenremitted back to the Company on February 3 2016 without shares being allotted to thecompany and therefore as on date Sagardeep General Trading FZE is not a subsidiary of theCompany.

Auditors

1. Statutory Auditors

At the Extra Ordinary General Meeting held on November 02 2015 M/s. Piyush J Shah& Co. Chartered Accountant Ahmedabad were appointed as Statutory Auditors of theCompany to fill the casual vacancy due to resignation of M/s Pushpendra Gupta &Associates Chartered Accountants Ahmedabad and to hold office till the conclusion of theAnnual General Meeting to be held in the calendar year 2016. The Board of Directors of theCompany has recommended their appointment as statutory auditor of the Company for a periodof 5 years i.e. from 9th AGM to 14th AGM of the Company to be heldin the year 2021. Further the appointment of the auditors shall be placed forratification at every Annual General Meeting held thereafter.

The consent of M/s. Piyush J Shah & Co. Chartered Accountants along with thecertificate under Section 139 of the Act has been obtained to the effect that theirappointment if made shall be in accordance with the prescribed conditions and that theyare eligible to hold the office of the Auditors of the Company.

2. Cost Auditors

As per the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 framed thereunder and the Cost Audit ordersissued from time to time the Board of Directors in their meeting held on 06.08.2015 hasappointed M/s. Soni & Associates Cost Accountants (FRN 102850) as Cost Auditor of theCompany for the financial year 2015-16. Further the remuneration of the Cost Auditor wasratified by members of the Company in their annual general meeting held on 28.08.2015.

Extract of the annual return

The extract of the Annual Return in Form-9 pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and Administration) Rules 2014 isfurnished in Annexure A and is attached to the report.

Management’s Discussion and Analysis Report

The Management’s Discussion and Analysis Report for the year under review asstipulated under Regulation 34 (2) (e) of the Listing Regulations is given as an annexureto this report

Corporate Governance

Your Company has been complying with the principals of good Corporate Governance overthe years and is committed to the highest standards of compliance. Pursuant to the Listingagreement read with regulations 15(2) of the SEBI (LODR) Regulations 2015 the compliancewith the corporate governance provisions as specified in regulations 17 to 27 and clauses(b) to (i) of Regulation 46 (2) and para C D and E of schedule V shall not apply to theCompany as the Equity Share Capital & Net worth of the Company does not exceedprescribed limit of Rs.10 Crores and Rs. 25 Crores respectively as on 31stMarch 2016.

Therefore the Corporate Governance Report is not applicable on the Company andtherefore not provided by the Board.

Personnel

The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is not provided in the Report as no remuneration is paid to any of the directors of thecompany nor any employee of the Company was in receipt of the remunerationexceeding the limits prescribed in the rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

Corporate Social Responsibility (CSR)

The present financial position of the company does not mandate the implementation ofcorporate social responsibility activities pursuant to the provisions of Section 135 andSchedule VII of the Companies Act 2013. The company will constitute CSR Committeedevelop CSR policy and implement the CSR initiatives whenever it is applicable tothe Company.

Conservation of energy technology absorption and foreign exchange earnings and outgo

The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:

Conservation of energy:

a) Energy conversation measures taken by the Company

(i)The Company has been taking continuous steps to conserve the energy and minimizingenergy cost at all levels as per the past experiences.

(ii)Monitoring the overall energy consumption by reducing losses and improvingefficiency

(iii) Maximum demand of electricity is being reduced and evenly distributing the loadsthroughout the day and increasing efficiency of plants and machines

b) Total energy consumption and energy consumption per unit as per Form A:

Particulars Current Year Previous Year
Electricity
Purchased
Units (KWH) 1180272 1334437
Total Amount (Rs.) 9341246 9958469
Rate per unit (Rs.) 7.91 7.46
Own Generation- Nil Nil
Natural Gas
Total Amount 3718931 5529167
Rate per SCM 35.98 50.58

(B) Disclosure with respect to Absorption and Research & Development

1.Specify the area in which R&D is carried out by the Company Nil
2.Benefits derived as a result of the above R&D Nil
3.Future Plan of Action Nil
4.Expenditure on R&D Nil
(C)Technology absorption Adaption and Innovation
1. Efforts made in brief towards Technology Absorption Adaption and Innovation Continuous efforts
2. Benefits arrived as a result of above efforts Quality
Improvement
3. In case of imported technology (imported during the 5 years reckoned from the beginning of the financial year ) NIL

 

(D) Foreign exchange earnings and Outgo: (In USD)
Foreign Exchange Earning $ 18000.00
Foreign Exchange Outgo $ 171383.14

Particulars of contracts or arrangements with related parties:

The Company has no material significant transactions with its related parties which mayhave potential conflict with the interest of the Company at large.

Listing

Your Company made its landmark move by entering into the capital market on May 172016. The shares of the Company have been listed on "NSE-EMERGE" the SMEplatform of National Stock Exchange of India Limited by way of public issue of 3000000equity shares of the face value of Rs. 10.00 each for cash at a price of Rs. 20/-per equity share (share premium of Rs. 10/- each).

This Annual Report for the financial year 2015-16 has been prepared in accordance withthe applicable disclosure requirements of the Companies Act 2013. However the provisionsof the LODR 2015 shall be applicable from the financial year 2016-17.

Statement regarding the development and implementation of Risk Management Policy

The Company has not developed and implemented any risk management policy as the risk threateningthe business activity carried out by the Company during the year are minimal.

Adequacy of Interna Financial Control

The Company has in place adequate internal financial controls with reference to financialstatements. The Board has inter alia reviewed the adequacy and effectiveness of theCompany’s internal financial controls relating to its financial statemen s. Duringthe year no reportable material weakness was observed.

Directors’ Responsibility Statement

In terms of Section 1 4 (5) of the Companies Act 2013 the directors would like to statethat:

(a) In the preparation of the annual accounts for the financial year ended March31 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures.

(b) The directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period under review.

(c) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.

(d) The directors have prepared the annual accounts on a going concern basis.

(e) The directors had laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively.

(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.

Acknowledgement

The Directors place on record their sincere thanks to the Bankers Business associatesconsultants customers and employees for their continued support extended to yourCompanies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.

For and on behalf of the Board of Directors
Date: 13/08/2016 Satishkumar A Mehta
Place: Ahmedabad Chairman & Managing Director

Annexure B

NOMINATION & REMUNERATION POLICY

Introduction

This policy on nomination and remuneration of Directors Key Managerial Personnel(KMPs) and other employees has been formulated in terms of the provisions of theCompanies Act 2013 and the listing agreement in order to pay equitable remuneration tothe Directors KMPs and employees of the Company.

Objective and purpose of the policy

The objectives and purpose of this policy are:

• To lay down criteria for determining qualifications competencies positiveattributes and independence for appointment of a Director (Executive / Non-Executive) andrecommend to the Board policies relating to the remuneration of the Directors KeyManagerial Personnel and other employees. This includes reviewing and approving corporategoals and objectives relevant to the compensation of the Chief Executive Officer("CEO") evaluating the CEO's performance in light of those goals andobjectives and either as a committee or together with the other independent directors(as directed by the board) determine and approve the CEO's compensation level based onthis evaluation; and making recommendations to the board with respect to non-CEO executiveofficer compensation and incentive-compensation and equity- based plans that are subjectto board approval;

• The policy also addresses the following items: Committee member qualifications;Committee member appointment and removal; Committee structure and operations; andCommittee reporting to the Board.

• To formulate the criteria for evaluation of performance of all the Directors onthe Board;

• To devise a policy on Board diversity; and

• To lay out remuneration principles for employees linked to their effortperformance and achievement relating to the Company’s goals.

Constitution of the Nomination and Remuneration Committee

The Board has constituted the "Nomination and Remuneration Committee" of theBoard on September 15 2015. This is in line with the requirements under the CompaniesAct 2013 ("Act").

The Board has authority to reconstitute this Committee from time to time.

Definitions

A. ‘Board’ means Board of Directors of the Company. B. ‘Directors’means Directors of the Company.

C. ‘Committee’ means Nomination and Remuneration Committee of the Company asconstituted or reconstituted by the Board in accordance with the Act and applicablelisting agreements and/or regulations.

D. ‘Company’ means Sagardeep Alloys Limited. E. ‘IndependentDirector’ means a Director referred to in Section 149(6) of the Companies Act 2013and rules. F. ‘Key Managerial Personnel (KMP)’ means-

- the Managing Director or the Chief Executive Officer or the manager and in theirabsence a Whole-time Director; - the Company Secretary; and

- the Chief Financial Officer

Senior Management means personnel of the company who are members of its core managementteam excluding Board of Directors comprising all members of management one level below theExecutive Directors including the functional heads.

Unless the context otherwise requires words and expressions used in this policy andnot defined herein but defined in the Companies Act 2013 and Listing Agreement as may beamended from time to time shall have the meaning respectively assigned to them therein.

General

This Policy is divided in three parts: -

Part – A covers the matters to be dealt with and recommended by the Committee tothe Board;

Part – B covers the appointment and nomination; and Part – C coversremuneration and perquisites etc.

This policy shall be included in the Report of the Board of Directors.

Part – A

Matters to be dealt with perused and recommended to the Board by the Nomination andRemuneration Committee The following matters shall be dealt by the Committee:-

a. Formulate the cr teria for determining qualifications positive attributes andindependence of a director.

b. Identify persons who are qualified to become Director and persons who may beappointed as KMP and Senior Management positions in accordance with the criteria laid downin this policy.

c. Recommended to the Board appointment and removal of Director KMP and SeniorManagement Personnel

PART – B

Policy for appointment and removal of Director KMPs and Senior Management

Appointment criteria and qualifications

The Committee shall identify and ascertain the integrity qualification expertise andexperience of the person for appointment as Directo KMP or senior management level andrecommend to the Board his/ her appointment.

A person to be appointed as Director KMP or senior management level should possessadequate qualification expertise and experience for the position he/she is considered forappointment. The Committee has discretion to decide whether qualification expertise andexperience possessed by a person is sufficient/satisfactory for the concerned position.

The Company shall not appoint or continue the employment of any person as ManagingDirector/Executive Director who has attained the age of seventy years and shall notappoint Independent Director who has attained the age of seventy years. Provided that theterm of the person holding this position may be extended at the discretion of thecommittee beyond the age of seventy years with the approval of shareholders by passing aspecial resolution based on the explanatory statement annexed to the notice for suchmotion indicating the justification for extension of appointment beyond Seventy years asthe case may be.

A whole-time KMP of the Company shall not hold office in more than one company exceptin its subsidiary company at the same time. However a whole-time KMP can be appointed asa Director in any company with the permission of the Board of Directors of the Company.

Term / Tenure

Managing Director / Whole-time Director

The Company shall appoint or re-appoint any person as its Managing Director and CEO orWhole-time Director for a term not exceeding five years at a time. No re-appointment shallbe made earlier than one year before the expiry of term.

Independent Director

An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board’s report.

No Independent Director shall hold office for more than two consecutive terms but suchIndependent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly. However if a person who hasalready served as an Independent Director for five years or more in the Company as onApril 1 2014 or such other date as may be determined by the Committee as per regulatoryrequirement he / she shall be eligible for appointment for one more term of five yearsonly.

At the time of appointment of Independent Director it should be ensured that number ofBoards on which such Independent Director serve is restricted to seven listed companies asan Independent Director and three listed companies as an Independent Director in case suchperson is serving as a Whole-time (Executive) Director of a listed company.

Removal

Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable Act rules and regulations the Committeemay recommend to the Board with reasons recorded in writing removal of a Director or KMPsubject to the provisions and compliance of the said Act rules and regulations.

Retirement

The Whole-time Directors KMP and senior management personnel shall retire as per theapplicable provisions of the Companies Act 2013 and the prevailing policy of the Company.The Board will have the discretion to retain the Whole-time Directors KMP and seniormanagement personnel in the same position /remuneration or otherwise even after attainingthe retirement age for the benefit of the Company.

PART – C

Policy relating to the remuneration for Directors KMPs and other employee

General

The remuneration / compensation / commission etc. to Directors will be determined bythe Committee and recommended to the Board for approval.

The remuneration and commission to be paid to the Managing Director shall be inaccordance with the provisions of the Companies Act 2013 and the rules madethereunder.

Increments to the existing remuneration / compensation structure may be recommended bythe Committee to the Board which should be within the limits approved by theShareholders in the case of Managing Director.

Where any insurance is taken by the Company on behalf of its Managing Director ChiefFinancial Officer the Company Secretary and any other employees for indemnifyingthem against any liability the premium paid on such insurance shall not be treated aspart of the remuneration payable to any such personnel. Provided that if such person isproved to be guilty the premium paid on such insurance shall be treated as part ofthe remuneration.

Remuneration to KMPs and other employees

The policy on remuneration for KMPs and other employees is as below:-

Fixed pay

The Whole-time Director / KMP and Senior Management Personnel shall be eligible for amonthly remuneration as may be approved by the Board on the recommendation of theCommittee. The breakup of the pay scale and quantum of perquisites includingemployer’s contribution to P.F pension scheme medical expenses club fees etc.shall be decided and approved by the Board on the recommendation of the Committee andapproved by the shareholders and Central Government wherever required.

Minimum remuneration to Managing Director

If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managing Director and Whole TimeDirectors in accordance with the provisions of Schedule V of the Companies Act 2013 andif it is not abl to comply with such provisions with the previous approval of the CentralGovernment.

Provision for excess remuneration

If any Whole-time Director draws or receives directly or indirectly by way ofremuneration any such sums in excess of the limits prescribed under the Companies Act2013 or without the prior sanction of the Central Government where required he / sheshall refund such sums to the Company and until such sum is refunded hold it in trust forthe Company. The Company shall not wai e recovery of such sum refundable to it unlesspermitted by the Central Government.

Remuneration to Non-Executive / Independent Directors

Remuneration/Commission

The remuneration payable to each Non-Executive Director is based on the remunerationstructure as determined by the Board and is revised from time to time depending onindividual contribution the Company’s performance and the provisions of theCompanies Act 2013 and the rules made thereunder.

The remuneration to the Non-executive Directors (including Independent Directors) maybe paid within the monetary limit approved by shareholders subject to the limit notexceeding 1% of the profits of the Company computed as per the applicable provisions ofthe Companies Act 2013.

Sitting Fees

The Non-Executive/Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof. Provided that the amount of such feesshall not exceed Rs. One lakh per meeting of the Board or Committee or such amount as maybe prescribed by the Central Government from time to time.

Stock options

The Independent Directors shall not be entitled to any stock option of the Company.

Policy review

In case of any subsequent changes in the provisions of the Companies Act 2013 or anyother regulations which makes any of the provisions in the policy inconsistent with theAct or regulations then the provisions of the Act or regulations would prevail over thepolicy nd the provisions in the policy would be modified in due course to make itconsistent with law.

This policy shall be reviewed by the Nomination and Remuneration Committee as and whenany changes are to be incorporated in the policy due to change in regulations or as may befelt appropriate by the Committee.