Sanathnagar Enterprises Ltd.
|BSE: 509423||Sector: Infrastructure|
|NSE: BAKELHYLAM||ISIN Code: INE367E01017|
|BSE 05:30 | 01 Jan||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 509423||Sector: Infrastructure|
|NSE: BAKELHYLAM||ISIN Code: INE367E01017|
|BSE 05:30 | 01 Jan||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
The Directors are pleased to present the 70th Boards's Report of the Companyalongwith the audited financial statements for the financial year ended March 31 2017.
Pursuant to the notification dated February 16 2015 issued by the Ministry ofCorporate Affairs the Company has adopted the Indian Accounting Standards ("IndAS") notified under the Companies (Indian Accounting Standards) Rules 2015 witheffect from April 1 2016. Financial statements for the year ended and as at March 312016 have been restated to conform to Ind AS Note 3 to the consolidated financialstatement provides further explanation on the transition to Ind AS.
1. FINANCIAL RESULTS
Figures for FY 2016-17 have been restated as per Ind AS and therefore may not becomparable with financials for FY 2015-16 approved by the Directors and disclosed in thefinancial statement of previous year.
Highlights of the Company's performance for the FY 2016-17:
Revenue from operations decreased by 12.24% to Rs. 10430.97 lakhs
Profit Before Interest Depreciation & taxes decreased by 57.43% to Rs. 2217.02
Net profit for the year was Rs. 434.86 lakhs as compared to Rs. 2094.07 lakhs duringthe previous financial year
With a view to plough back the profits of the Company into the business operations theBoard of Directors do not recommend any dividend for the financial year under review.
3. business & Industry Review Macro Economic overview
India has emerged as the fastest growing major economy in the world as per the CentralStatistics Organisation and International Monetary Fund. With an annual growth of 7.1%during the year 2017 the Indian economy is one of the most resilient and among thefastest growing economies in the world. As per the Economic Survey 2016-17 the Indianeconomy is expected to grow between 6.75 and 7.5% in FY 2017-18. Moody's has affirmed theGovernment of India's Baa3 rating with a positive outlook stating that the reforms by thegovernment will enable the country perform better compared to its peers over the mediumterm. Source: https://www.ibef.org Sector review
The real estate sector is one of the most globally recognized sectors. In India realestate is the second largest employer after agriculture and is slated to grow at 30% overthe next decade. The construction industry ranks 3rd amongst the 14 majorsectors in terms of direct indirect and induced effects in all sectors of the economy.
The Indian real estate market is expected to touch US$ 180 billion by 2020. The housingsector alone contributes 5-6% to the country's GDP. In the period FY 2008-2020 the marketsize of this sector is expected to increase at a CAGR of 11.2%. Retail hospitality andcommercial real estate are also growing significantly providing much-neededinfrastructure for India's growing needs. Private equity investments in real estateincreased 26% to a nine-year high of nearly Rs. 40000 crore in calendar year 2016.
Mumbai is the best city in India for commercial real estate investment with likelyreturns of 12-19% in the next five years followed by Bengaluru and Delhi-NCR.
The Government of India along with the governments of the respective states has takenseveral initiatives to encourage development in the sector. The Smart City Project wherethere is a plan to build 100 smart cities is a prime opportunity for the real estatecompanies. The recently notified Real Estate (Regulation and Development) Act 2016 isexpected to have a huge transformational impact on the real estate sector. Goods andService Tax is another significant reform which will subsume all indirect taxes and pavethe way for a single market cross India. Demonetization in the third quarter of FY 2017had a profound impact on the economy especially in the real estate sector. The UnionBudget has put special emphasis on the affordable housing segment. Infrastructure statusfor this segment will help real estate entities to raise funds at substantially betterinterest rates. The credit linked subsidy scheme for first-time homebuyers under thePradhan Mantri Awas Yojana is expected to push real estate demand in the mid-income group.
Hyderabad real estate
Sales in Hyderabad remained steady in H2 2017 despite demonetisation bringing sales toa halt in other major markets. New launches were down by nearly 56% in H2 of 2017 ascompared to H1 2017. Lack of clarity on the implementation of the RERA 2016 emerged asmajor factor dampening new launches in Hyderabad. West Hyderabad remained the preferredmarket largely because buyers' preference for ready to move in properties closer to theoffice hubs. While the relative shares of other residential zones went down in H2 2017compared to H1 2017 West Hyderabad recorded an uptick in sales. Source: Knight FrankReport 2017
The Company's Casa Paradiso project is a large mid income residential project withsupersized 3 room residences at Sanathnagar in Central Hyderabad. The target profile ofthis project is the middle / upper middle income segment of the market. The project hasbeen designed by Hafeez Contractor one of the India's largest and most reputedarchitectural firms.
4. Extract of Annual Return
Pursuant to the provisions of Section 92(3) of the Companies Act 2013 (the Act')and Rule 12(1) of the Companies (Management and Administration) Rules 2014 extract ofthe Annual Return is annexed as Annexure I.
5. Changes in Share Capital
During the financial year 2016-17 there has been no change in the issued paid-up andauthorised share capital of the Company.
6. Directors and Key Managerial Personnel
Mr. Bhushan Shah and Mr. Vinod Shah were appointed as Additional Directors(Independent) on the Board of your Company on July 7 2016 and February 7 2017respectively in accordance with Section 161 of the Act. The Company has receiveddeclarations under section 149 of the Act from all independent directors confirming thatthey meet the criteria of independence prescribed under the Act and the ListingRegulations. Ms. Purnima Pavle retires by rotation and being eligible has offered herselffor re-appointment.
Necessary resolutions for these appointments / reappointments form part of theaccompanying Annual General Meeting notice. Mr. Santoshkumar Ojha and Mr. Umashankar Hegderesigned as Independent Directors effective April 8 2016 and January 2 2017respectively. The Board places on record its appreciation for the services rendered duringtheir tenure as directors. Mr. Sharatkumar Shetty resigned as the Company Secretary &Compliance Officer of your Company effective February 24 2017. Mr. Jitendra Prasad wasappointed as the Company Secretary & Compliance Officer of your Company effective May23 2017.
In terms of Section 203 of the Act the following are the Key Managerial Personnel ofthe Company:
Mr. Maninder Chhabra Manager
Mr. Vishal Ghadigaonkar Chief Financial Officer
Mr. Jitendra Prasad Company Secretary
7. Board and Committees of the board board meetings
Dates for Board meetings in the ensuing year are decided in advance and circulated toall Directors. The agenda for each meeting along with detailed notes is circulated inadvance to the Directors.
Four Board meetings were held during the year and the gap between two meetings did notexceed 120 days. These were held on May 13 2016 September 3 2016 November 22 2016 andFebruary 7 2017.
Attendance of Directors during FY 2017:
1Mr. Umashanker Hegde resigned from the Board w.e.f. January 2 2017
2Mr. Bhushan Shah appointed as Independent Director of the Company w.e.f.July 7 2016 3Mr. Vinod Shah appointed as Independent Director of the Companyw.e.f. February 7 2017
Post meeting follow up mechanism
Important decisions taken at Board / Committee meetings are communicated to theconcerned departments/divisions promptly. An action taken/status report on the decisionsof the previous meeting(s) is placed at the next meeting of the Board for information andfurther recommended action(s) if any.
Committees of the board Audit Committee
The Audit Committee comprises of Mr. Bhushan Shah Mr. Vinod Shah and Ms. PurnimaPavle. Mr Bhushan Shah has been designated as Chairman of the Audit Committee. All membersare financially literate and bring in expertise in the fields of finance economicsdevelopment strategy and management.
The Committee met four times during the year. These meetings were held on May 13 2016September 3 2016 November 22 2016 and February 7 2017.
The attendance details of the Audit Committee meetings are as follows:
1Mr. Umashanker Hegde resigned from the Board effective January 2 2017.
2Mr. Bhushan Shah was appointed as Independent Director of the Companyeffective July 7 2016. 3Mr. Vinod Shah was appointed as Independent Directorof the Company effective February 7 2017.
Nomination & Remuneration Committee
The Nomination and Remuneration committee is constituted in line with the provisions ofRegulation 19 of SEBI Listing Regulations read with Section 178 of the Act. The Committeecomprise of Mr. Bhushan Shah - Chairman Mr. Vinod Shah and Ms. Purnima Pavle.
The Committee met once during the year ie. on February 7 2017. The attendance detailsof the Committee meetings are as follows:
1Mr. Bhushan Shah was appointed as Independent Director of the Companyw.e.f. July 7 2016. 2Mr. Vinod Shah was appointed as Independent Director ofthe Company w.e.f. February 7 2017.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee comprises of Ms. Purnima PavleChairperson Mr. Bhushan Shah and Mr. Vinod Shah. During the year the Committee met onceon May 13 2016. The attendance details of Directors are as follows:
1Mr. Umashanker Hegde and Mr. Babusingh Rajguru stepped down from theCommittee effective January 2 2017 and May 23 2017 respectively. 2Ms. PurnimaPavle was inducted into the Committee effective May 23 2017.
3Mr. Bhushan Shah and Mr. Vinod Shah were inducted in the Committeeeffective February 7 2017.
Details required under the Companies (Corporate Social Responsibility Policy) Rules2014 are given in CSR Report appended as Annexure II to this Report. The CSR Policyof the Company is also annexed to this Report as Annexure III of this Report.
Stakeholders Relationship Committee
The Stakeholders Relationship Committee comprises of Mr. Bhushan Shah Chairman Mr.Vinod Shah and Ms. Purnima Pavle. The Committee met four times during the year. Themeetings were held on May 13 2016 September 3 2016 November 22 2016 and February 72017. The attendance details of Directors are as follows:
1Mr. Umashanker Hegde and Mr. Babusingh Rajguru stepped down from theCommittee effective January 2 2017 and May 23 2017 respectively. 2Mr. BhushanShah and Mr. Vinod Shah were inducted into the Committee effective July 7 2016 and May23 2017.
8. BOARD EVALUATION
The Board of Directors carried out an annual evaluation of its own performance boardcommittees and individual directors pursuant to the provisions of the Act and the Listingregulations. Performance of the board was evaluated by the board after seeking inputs fromall the directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc. The performance of thecommittees was evaluated by the board after seeking inputs from the committee members.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings. In a separate meeting of independentdirectors performance of non-independent directors and the board as a whole wasevaluated taking into account the views of executive directors and non-executivedirectors. Performance evaluation of independent directors was done by the entire boardexcluding the independent director being evaluated.
The policy on Directors' appointment and remuneration for Directors Key ManagerialPersonnel and Senior Management Personnel including policy for performance evaluation ofIndependent Directors Board Committees and other individual Directors is attached as AnnexureIV.
9. Auditors & Auditors' Report Auditors
MSKA & Associates (F.K.A. MZSK & Associates) Chartered Accountants (FirmRegistration No. 105047W) the statutory auditors of your Company hold office until theconclusion of the 74th AGM to be held in the year 2021 subject to ratificationat every AGM. The Members year on year will be requested to ratify their appointment asAuditor and to authorize the Board of Directors to fix their remuneration. In thisconnection the proposal for ratification of Auditors is mentioned in the notice of theforthcoming Annual General Meeting of the Company.
The Auditor's Report does not contain any qualifications reservations or adverseremarks. Secretarial Audit
Shravan A. Gupta and Associates Practicing Company Secretary was appointed asSecretarial Auditor to conduct a Secretarial Audit of records and documents of the Companyfor financial year 2016-17. The Secretarial Audit Report confirms that the Company hasgenerally complied with the provisions of the Act Rules Regulation and Guidelines. TheSecretarial Audit Report is provided in Annexure V.
Cost Auditor and Cost Audit Report
Mr. Dushyant C. Dave Cost Accountant was appointed as Cost auditor to audit the costrecords of the Company for financial year 2017. In accordance with the requirementof the Central Government and pursuant to Section 148 of the Act your Company carries outan audit of cost accounts relating to real estate development activities every year. TheCost Audit Report and the Compliance Report of your Company for FY16 was filed onOctober 5 2016 with the Ministry of Corporate Affairs through Extensive BusinessReporting Language (XBRL) by Mr. Dushyant C. Dave Cost Accountants before the due dateof September 30 2016.
Pursuant to Section 138 of the Companies Act 2013 the Company appointed Mr. ParagParekh Chartered Accountant as Head Internal Auditor. The audit carried out by him is onhalf yearly basis. The report issued by the Internal Auditor is reviewed in the AuditCommittee meetings and appropriate action is taken.
10. Loans guarantees securities and investments
The Company is providing "infrastructural facilities" as defined in ScheduleVI of the Companies Act 2013 and therefore the provisions of Section 186 are notapplicable to any loan made guarantee given or security provided by the Company in termsof exemption provided u/s 186(11) (a). Particulars of investments made by the Company areprovided in the financial statements.
11. Related Party Transactions
The transactions/contracts/arrangements falling within the purview of provisions ofSection 188(1) of the Companies Act 2013 entered by the Company with related parties asdefined under the provisions of Section 2(76) of the Companies Act 2013 during thefinancial year under review were in the ordinary course of business and have beentransacted at arm's length basis. Further there are no transactions/contracts/arrangementsentered by the Company with related party(ies) as defined under the provisions of Section2(76) of the Companies Act 2013 during the financial year 2015-16 that are required tobe reported in Form AOC-2 and as such does not form part of the Report.
12. Holding Company Subsidiaries Joint Venture and Associates
The Company continues to be a subsidiary of Siddhnath Residential Paradise PrivateLimited which in turn is a subsidiary of Lodha Developers Private Limited. The ultimateholding Company of the Company is Sambhavnath Infrabuild and Farms Private Limited. Duringthe year under review the Company did not have any subsidiary joint ventures orassociate companies.
13. Management and Internal Controls Risk Management
Your Company has adopted a Risk Management policy which is based on three pillars:Business Risk Assessment Operational Controls Assessment and Policy Compliance processes.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis. The key risks and mitigating actions arealso placed before the Board of Directors of the Company.
Internal Controls and their adequacy
The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of operations. These systems are routinely tested andcertified by the Statutory as well as the Internal Auditor and cover all offices sitesand key business areas. Significant audit observations and follow up actions thereon arereported to the Board/Audit Committee. The Board/Audit Committee reviews adequacy andeffectiveness of the Company's internal control environment and monitors theimplementation of audit recommendations including those relating to strengthening of theCompany's risk management policies and systems. These systems provide a reasonableassurance in respect of financial and operational information complying with applicablestatutes safeguarding of assets of the Company prevention & detection of fraudsaccuracy & completeness of accounting records and ensuring compliance with corporatepolicies.
The Company has established a vigil mechanism process by adopting a VigilMechanism/Whistle Blower Policy for directors and employees. This policy outlines theprocedures for reporting handling investigating and deciding on the course of action tobe taken in case inappropriate conduct/behaviour is/are noticed reported or suspected.The Policy provides for adequate safeguards against victimization of persons who use themechanism and has a process for providing direct access to the Ombudsman in appropriate orexceptional cases.
The employees of the Company have the right to report their concern or grievance to theChairman of the Audit Committee. The Company is committed to adhere to the higheststandards of ethical moral and legal conduct of business operations. The VigilMechanism/Whistle Blower Policy is posted on the Company's website www.sanathnagar.in.
14. Minimum public shareholding as per securities contract (regulation) (amendment)rules 2010
The Company is in the process of complying with the requirement of Rule 19(2)(b) ofSecurities Contract (Regulation)
(Amendment) Rules 2010 with regard to achieving public shareholding to the prescribedminimum level of 25% of the total equity shares issued by the Company.
15. Disclosure under section 197(12) of the companies act 2013 and other disclosuresas per rule 5 of companies (appointment & remuneration) rules 2014
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) 2014 is attached as AnnexureVI.
The provisions of Section 197(12) of the Act read with rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 do not applyas there are no employees who draw remuneration in excess of the limits set out in thesaid Rules.
16. Human capital
Our Group's objective is to attract the best talent build employee capability andnurture the right culture to deliver on the business goals. We believe that an inspiredinvolved and invigorated workforce makes all the difference to being what we are today.Our Group's vision values and Associate Value Proposition are the foundational blocksthat drive our associates to make their work meaningful. This year the focus largelyremained on strategic hiring laterally and from Premier campuses capability buildingthrough developmental programs and sharpening our people focus by putting in place acomprehensive Talent Management program. The objective is to provide our talent with anenvironment that fosters continuous learning recognition innovation leadershipdevelopment and employee well-being. The human resources function is the prime custodianof the culture at your Company.
17. Details of conservation of energy technology absorption foreign exchange earningsand outgo
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished Annexure VII to this report.
During the financial year 2016-17 the Company neither earned any foreign exchange interms of actual inflows nor is there any foreign exchange outgo in terms of actualoutflows.
18. Corporate Governance and Management Discussion and Analysis Report
As the paid up equity share capital and networth of the Company are both below thelimits specified in Regulation 15 of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Company is not required to furnish a corporategovernance and a Management Discussion Analysis and therefore these do not form part ofthis Report.
Your Directors state that for the financial year ended March 31 2017 no disclosure isrequired in respect of the following items and accordingly confirm as under: a. TheCompany has neither revised the financial statements nor the report of Board of Directors.b. No cases were filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. c. There are no material changes orcommitments affecting the financial position of the Company between March 31 2017 and thedate of this report. d. The Company has not accepted any deposits during financial year2016-17. e. No instance of fraud has been reported to Board of Directors of the Company bythe Auditors or any other person. f. There are no significant or material for which orderswere passed by the Regulators/Courts/Tribunals which impact the going concern status andCompany's operations in future. g. During the financial year 2016-17 there is no changein the nature of the business of the Company. h. There has been no issue of equity shareswith differential rights as to dividend voting or otherwise during the financial year2016-17. i. The Company has not issued any shares (including sweat equity shares) toemployees of the Company under any scheme during the financial year 2016-17.
20. Directors' Responsibility Statement
Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 your Directors confirm that: a. in the preparation of the annualaccounts for the year ended March 31 2017 read with the requirements set out underSchedule III to the Act have been followed and there has been no material departures; b.the directors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the loss ofthe company for that period; c. the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities; d. the directors had prepared the annual accounts on a going concernbasis; e. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial control are adequate and were operatingeffectively; and f. the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
On behalf of the Directors of the Company we would like to place on record our deepappreciation to our shareholders customers business partners vendors bankersfinancial institutions and academic institutions and other stakeholders who havecontributed to the growth and performance of your Company.
Annual Report on Corporate Social Responsibility [Pursuant to section 135 of the Actand companies (Corporate Social Responsibility Policy) Rule 2014]
1 Mr. Umashanker Hegde and Mr. Babushingh Rajguru stepped down from theCommittee w.e.f. 2nd January 2017 and 23rd May 2017 respectively.
2 Ms. Pavle was inducted in the Committee w.e.f. 23rd May 2017.
3 Mr. Bhushan Shah and Mr. Vinod Shah were inducted in the Committee w.e.f.7th February 2017.
The implementation and monitoring of CSR policy is in compliance with CSR objectivesand policy of the Company.
Policy on Directors' Appointment and remuneration for directors key managerialpersonnel senior management and other employees background & Objectives:
Clause 49 of the Listing Agreement and Section 178 of the Companies Act 2013(the Act') requires the Nomination and Remuneration Committee to identify personswho are qualified to become Directors and who may be appointed in Senior Management and toformulate a Policy relating to the remuneration for the Directors Key ManagerialPersonnel (KMP) Senior Management and other employees of the Company and recommend thesame for approval of the Board. Further Section 134 of the Act stipulates that the BoardReport shall include a statement on Company's Policy on Directors' appointment andremuneration including criteria for determining qualifications positive attributesindependence of Director and remuneration for Key Managerial Personnel and otheremployees. This Policy shall act as a guideline for determining inter-aliaqualifications positive attributes and independence of a Director matters relating tothe remuneration appointment removal and evaluation of performance of the Directors KeyManagerial Personnel Senior Management and other employees.
Objective and Role of Committee:
? To attract recruit and retain good and exceptional talent.
To identify persons who are qualified to become Directors and who may be appointmentin Senior Management in accordance with the criteria laid down in this Policy.
To guide the Board in relation to appointment and removal of Directors.
To evaluate the performance of the Members of the Board including IndependentDirectors.Formulation of criteria for evaluation of Independent Director and the Board.
To determine criteria for payment of remuneration to Directors Key ManagerialPersonnel Senior Management and Employees.To recommend to the Board on remunerationpayable to the Directors including Key Managerial Personnel Senior Management andEmployees if required.
To ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks.
To devise a Policy on Board diversity.
To carry out any other function as is mandated by the Board from time to time and/orenforced by any statutory notification amendment or modification as may be applicable.
To perform such other functions as may be necessary or appropriate for theperformance of its duties.
"Act" means the Companies Act 2013 and rules thereunder.
"board of Directors" or "board" means the Board ofDirectors of Sanathnagar Enterprises Limited as constituted from time to time.
"Company" means Sanathnagar Enterprises Limited.
"Committee" means Nomination and Remuneration Committee of the Company asconstituted or reconstituted by the Board. "Director" means a directorappointed to the Board of a Company.
"Independent Director" means an independent director referred to insub-section (5) of Section 149 of the Companies Act 2013. "Policy" meansNomination and Remuneration Policy.
"Key Managerial Personnel" (KMP) means: a. Chief Executive Officeror the Managing Director or the Manager b. Whole-time Director c. Chief Financial Officerd. Company Secretary e. Such other officer as may be prescribed
"Senior Management Personnel" for this purpose shall mean personnel ofthe Company who are members of its core management team excluding Board of Directorscomprising all members of management one level below the executive Director(s) includingthe functional/vertical heads.
Unless the context otherwise requires words and expressions used in this Policy andnot defined herein but defined in the Companies Act 2013 as may be amended from time totime shall have the meaning respectively assigned to them therein.
The Committee shall comprise at least three (3) Directors all of whom shall benon-executive Directors and at least half shall be independent.
The Board shall reconstitute the Committee as and when required to comply with theprovisions of the Companies Act 2013 and applicable statutory requirement.
Minimum two (2) members shall constitute a quorum for Committeemeeting.Membership of the Committee shall be disclosed in the Annual Report.Chairmanof the Committee shall be an Independent Director.
Chairperson of the Company may be appointed as a member of the Committee but shallnot Chair the Committee
Frequency of Meetings:
The meeting of the Committee shall be held at such regular intervals as may berequired.
Committee Member's Interest:
A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.
The Committee may invite such executives as it considers appropriate to be presentat the meetings of the Committee.
Matters arising for determination at Committee meetings shall be decided by amajority of votes Members and voting and any such decision shall for all purposes bedeemed a decision of the Committee.
In the case of equality of votes the Chairman of the meeting will have a castingvote.
Appointment Criteria Identification
The Committee shall identify and ascertain the integrity professionalqualification expertise and experience of the person who is proposed to be appointed asa Director KMP or at a Senior Management level and appropriate recommendation shall bemade to the Board with respect to his/her appointment. However the Committee whileidentifying person who is proposed to be appointed as a Director KMP or at a SeniorManagement level may identify and appoint the employees of the group companies.Aperson should possess adequate qualification expertise and experience for the positionhe/she is considered for appointment as KMP Senior Management Personnel of the Company.The Committee on the recommendation of Human Resource Department (HR Department) ifrequired shall have the discretion to decide whether qualification expertise andexperience possessed by a person is sufficient / satisfactory for the concerned position.
Appointment of Independent Directors shall be subject to the provisions of Section149 of the Act read with schedule IV and rules made thereunder. Before appointment asIndependent Director the Committee shall satisfy itself that the proposed personsatisfies the criteria of independence as stipulated under Section 149(6) of the Act.
Appointment of Directors on the Board of a Company shall be subject to therecommendation made by the Committee. However the decision of the Board with respect toappointment of a Director shall be final.
Appointment of Managing Director and Whole-time Director shall be subject toprovisions of Sections 196 197 198 and 203 of the Act read with Schedule V and rulesmade there under. The Committee shall ensure that a person shall not occupy position as aManaging Director/Whole-time Director beyond the age of seventy years unless hisappointment is approved by a special resolution passed by the Company in general meeting.No re-appointment shall be made earlier than one year before the expiry of term.
No person shall be eligible to be appointed as a Director if he/she is subject toany disqualifications as stipulated under the Companies Act 2013 or any other law(s) forthe time being in force.
Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations there under the Committee may recommend to theBoard with reasons recorded in writing removal of a Director KMP or Senior ManagementPersonnel subject to the provisions and compliance of the said Act rules andregulations.
The Director KMP or Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing Policy of the Company if any. The Board willhave the discretion to retain the Director in the same position/ remuneration orotherwise even after attaining the retirement age for the benefit of the Company.
A) Independent Directors/Non-Executive Directors
The Committee shall carry out evaluation of performance of IndependentDirectors/Non-Executive Directors every year ending
31st March. In case if a Director is a member of the Committee he/sheshall abstain himself/herself from participation when he/ she is being evaluated.
As a part of evaluation the Committee shall determine the following criteria: ?Membership & attendance - Committee and Board Meetings Contribution during suchmeetings
Willingness to spend time and effort learning about the Company and its businessActive participation in strategic decision making Inputs to executive management onmatters of strategic importance Individual Performance and Contribution Such othermatters as the Committee/Board may determine from time to time.
b) Executive Directors
The Committee shall carry out evaluation of performance of Executive Directors everyyear ending 31st March. In case if a Director is a member of the Committeehe/she shall abstain himself/herself from participation when he/she is being evaluated.The evaluation shall be on the basis of Key Performance Indicators (KPI) which would beidentified based on a) their commitment to achieve Company's goals and alignment with thestrategic direction b) their decision making ability and c) their ability and actions tosafeguard the interest of shareholders of the Company and weights assigned for eachmeasure of performance keeping in view the distinct roles of each Executive Director. Theidentified KPI for Executive Directors shall be approved by the Board pursuant torecommendation of the Committee if required.
C) Key Managerial Personnel /Senior Management/ Employees
The HR Department shall assign the responsibility of carrying out the evaluation of theaforementioned persons every year ending March 31st to the concerneddepartment heads. KPI are identified well in advance at the commencement of the financialyear. Performance benchmarks shall be set and evaluation of employees would be done by therespective reporting manager(s)/ Management to determine whether the performancebenchmarks are achieved. The payment of remuneration/annual increment to theaforementioned persons shall be determined after the satisfactory completion of Evaluationprocess.
The objective of carrying out the evaluation by the Company is to identify and rewardthose with exceptional performances during any financial year. Additional Training andDevelopment Orientation programs on need basis shall be provided to employees whoseperformance during any financial year do not meet the benchmark criteria.
Further the performance of the Committees formed by the Board will be evaluated basedon the terms of reference assigned to the respective Committees.
Matters relating to remuneration perquisites for Directors KMP/Senior ManagementPersonnel & Employees:
Clause 49 of the Listing Agreement and Section 178 of the Act emphatically specifythat the Committee while formulating the Policy shall ensure the following: the leveland composition of remuneration is reasonable and sufficient to attract retain andmotivate Directors of the quality required to run the Company successfully;?relationship of remuneration to performance is clear and meets appropriate performancebenchmarks; and remuneration to Directors Key Managerial Personnel and seniormanagement involves a balance between fixed and incentive pay reflecting short andlong-term performance objectives appropriate to the working of the Company and its goals.
In the Company the remuneration structure for Executive Directors/Senior Management& Employees comprises of : base salary a) A fixed set at a level aimed atattracting and retaining executives with professional and personal competences required todrive the Company's performance.
b) Performance bonus based on achieving the minimum KPI predefined at thecommencement of the financial year.
c) Retirement benefits including PF gratuity etc.
d) Such other emolument(s) as the HR department may after consultation with theManagement determine from time to time.
Criteria for Remuneration:
1) KMP/Senior Management/other employees
Upon the satisfactory completion of Evaluation process and after taking intoconsideration the performance appraisal of the concerned employee(s) and also taking intoconsideration the profitability/performance of the Company salary increments/ performancebonus would be decided by the concerned Department Head(s)/Management as the case may be.The increments/ performance bonus declared shall be solely as per Company Policy.
Determination of remuneration/performance bonus for KMP /Senior Management/otheremployees so far as there are no regulatory requirements need not berecommended/approved by the Committee/Board. The concerned Department Head(s)/Managementon the recommendation of the HR department shall have the discretion to determine thequantum of remuneration to be payable to KMP/Senior Management and other employees as thecase may be. Regulatory compliance if any needs to be complied appropriately beforedetermining/approving remuneration.
2) Executive Director(s) (EDs)
The remuneration/compensation etc. to Executive Directors (EDs) of the Company duringany financial year shall be determined on the basis of they achieving the Key PerformanceIndicators (KPIs) as is set on them at the commencement of every financial year. Theremuneration/compensation shall be determined by the Committee after considering the KPIachieved by EDs. The Committee may consider the recommendation of HR department whiledetermining the remuneration to be paid to EDs.
The remuneration payable to EDs and Whole-time Directors shall be subject to theprovisions of Section 197 and 198 of the Companies Act 2013 or which may be mutuallyagreed.
3) Non-Executive Director/Independent Director
The Non-executive / Independent Directors (NEDs) of the Company may be paid sittingfees as per the applicable Regulations. Any revision in the quantum of sitting fees shallbe subject to approval of Board of Directors of the Company. Further the travellingboarding and lodging expenses if any shall be reimbursed to the Directors based out ofMumbai. The profit-linked Commission may be paid within the monetary limit approved by theshareholders of the Company and subject to compliance with the provisions of CompaniesAct 2013 if any. The aforesaid Commission shall be paid subject to NEDs satisfying thecriteria approved by the Board for receiving remuneration.
Pursuant to the provisions of the Act an Independent Director shall not be entitled toany stock option (ESOPs) of the Company.
Where any insurance is taken by the Company on behalf of its KMP and any otheremployees for indemnifying them against any liability the premium paid on such insuranceshall not be treated as part of the remuneration payable to any such personnel. Providedthat if such person is proved to be guilty the premium paid on such insurance shall betreated as part of the remuneration.
Amendments to the Policy:
The Board of Directors on its own and / or as per the recommendations of Nomination andRemuneration Committee can amend this Policy as and when deemed fit.
In case of any amendment(s) clarification(s) circular(s) etc. issued by the relevantauthorities not being consistent with the provisions laid down under this Policy thensuch amendment(s) clarification(s) circular(s) etc. shall prevail upon the provisionshereunder and this Policy shall stand amended accordingly from the effective date as laiddown under such amendment(s) clarification(s) circular(s) etc.
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
1. The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2016-17 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2016-17 are as under:
* Mr. Vishal Ghadigaonkar and Mr. Sharatkumar Shetty are not on the rolls of theCompany and are deputed by Nabhiraja Software Design India Private Limited a GroupCompany. Their remuneration is being reimbursed by the Company to the said Group Company.Mr. Sharatkumar Shetty has resigned as Company Secretary on 24th February2017.
# The Company has not paid any remuneration to independent directors during thefinancial year 2015-16 and hence percentage increase in remuneration in the financialyear 2016-17 is shown as 100%. This is towards sitting fees. No remuneration has been paidduring FY 2016-17 to Non-Independent directors.
2. The percentage increase in the median remuneration of employees as compared to thelast financial year 2016-17:
The Company had 17 employees in financial year 2015-16 and 4 in the financial year2016-17. The percentage increase in the median remuneration of employees as compared tothe last financial year therefore cannot be derived.
3. Since the Company has not paid any remuneration to any of its managerial personnelin any of the financial years i.e. 2015-16 and 2016-17 the point pertaining toaverage percentile increase / decrease in the salaries of employees other than themanagerial personnel is not applicable.
4. It is hereby confirmed that the remuneration / reimbursement paid is as per theRemuneration Policy for Directors Key managerial Personnel and other employees.
5. The Rule (5)(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is not applicable to the Company as none of the employee was inreceipt of remuneration as prescribed under the above mentioned rule.
Annexure VII Details of conservation of energy technology absorption foreign exchangeearnings and outgo