Senthil Infotek Ltd.
|BSE: 531980||Sector: IT|
|NSE: N.A.||ISIN Code: INE564B01015|
|BSE LIVE 14:33 | 14 Nov||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Senthil Infotek Ltd. (SENTHILINFOTEK) - Director Report
Company director report
M/s SENTHIL INFOTEK LIMITED
157Dhana Lakshmi SocietyMahendra Hills
East MaredpallySecunderabad - 500026Telangana
The Directors have pleasure in presenting their 22nd Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended 31stMarch2016.
During the year under reviewperformance of your company as under:
3.STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK:
During the period under reviewthe turnover of the Company has increased to Rs.8.80Lakhs as against that of the previous year of Rs.8.07 Lakhs.The financial statementsdepict decrease in profits to Rs.0.34 lakhs for the current year as against the profit ofRs.0.37 Lakhs for the previous year mainly due to the increase in expenses of the Company.
In spite of Increasing competition in the Information Technology sectorchangingcustomer preferences and uncertainty in political decisionsthe Company is making effortsfor creating an increasingly receptive market in the present IT Sector.The current drivingmotto of the Company is to transform their operation and business undertakings in the mostproductive manner and earn returns.
Your Directors are optimistic about better performance with increased revenue onprojects undertaken and reap profits in the coming years.
The extracts of the Annual Return pursuant to the provisions of Section 92(3) of theCompanies Act2013 read with Rule 12 of the Companies (Management and Administration)Rules2014 in Form No.MGT - 9 is enclosed herewith in Annexure I.
5.CHANGE IN NATURE OF BUSINESSIF ANY:
There is no change in the nature of business of the Company during the year.
During the period under reviewthe Company has not been able to earn enough profits soas to reward the shareholders.Thereforeyour directors do not recommend any dividend forthe year under review.
7.AMOUNT TRANSFERRED TO RESERVES:
No transfer to reserves is proposed due to inadequacy of profits and accordingly theentire balance available in profit and loss account is retained in it.
8.TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
The provisions of Section 125(2) of the Companies Act2013 do not apply as there was nodividend declared and paid last year.
The Authorised Share Capital of your Company is Rs.60000000 and the Paid up ShareCapital of your Company is Rs.50500000 During the Financial Year 2015-16there has beenno change in the share capital of the Company during the period under review.
The Company has neither accepted nor renewed any deposits from public within themeaning of Section 73 of the Companies Act2013 read with Companies (Acceptance ofDeposits) Rules2014 during the year.
11.SUBSIDIARIESHOLDING COMPANYJOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any SubsidiaryHoldingJoint venture or Associate Company.
Your Board consistsof 6 Directors including 3 Independent Non-executive Directorsduring the financial year.ThereafterMr.SenrajMuthiahSennavanadiresigned from thedirectorship of the Company w.e.f.20th June2016.
Furtherthe declaration from all the independent Directors have been obtained both atthe time of appointment and at the first Board meeting of the financial year annually.
Pursuant to the provisions of Section 152(6) of the Companies Act2013Mrs.SeethaLakshmi Pitchandi is liable to retire by rotation at the ensuing Annual General Meetingand being eligibleoffers herself for re-appointment.
INDEPENDENT DIRECTORS AND THEIR MEETINGS:
Your Company has 3 Independent Directors comprises of;Mr.SreehariAnkemMrs.DittakaviSurekha and Mrs.SaradaDittakavi.The meeting of IndependentDirectors of the Company was held on 12th February2016 during the year pursuant to theprovisions of Schedule IV of the Companies Act2013 in which the following matters wereconsidered:
i.Review of the performance of all the non-independent directors and the Board as awhole;
ii.Review of the performance of the Chairperson of the Companytaking into accounts theviews of executive directors and non-executive directors;
iii.Assess of the qualityquantity and timeliness of flow of information between thecompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
The policy containing terms and conditions for appointment of independent directors isenclosed herewith as Annexure II.
C.KEY MANAGERIAL PERSONNEL (KMPs):
Your Company has not appointed Company Secretary and Chief Financial Officer (KMPs) asrequired under Section 203 of the Companies Act2013 due to meagre business revenues.
D.EVALUATION OF BOARD AND COMMITTEES:
Pursuant to the provisions of Companies Act2013 and Corporate Governance requirementsof SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board ofDirectors (Board) has to carry out an annual evaluation of its own performance and that ofits Committees and independent Directors.
In this regardthe Company has devised a policy on evaluation of performance of theBoardCommittees and Independent Directors and on terms and conditions for appointment ofthe Independent Directors.
According to the policythe performance of the Board and individual Directors isevaluated by the Board seeking inputs from all the Directors and the performance of theCommittees is evaluated by the Boardseeking inputs from the Committee members.
The said policy on evaluation of performance of the boardits committees andindependent directorshas been annexed with this report as Annexure III.
13.DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013yourdirectors confirm that:
a) In the preparation of the annual accounts for the financial year ended 31stMarch2016the applicable accounting standards had been followed along with properexplanation relating 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 31st March2016 and of the profit/loss of the 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;
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.
14.DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Company has internal financial controls which are adequate and were operatingeffectively.The controls are adequate for ensuring the orderly & efficient conduct ofthe businessincluding adherence to the company's policiesthe safe guarding of assetstheprevention and detection of frauds and errorsthe accuracy and completeness of accountingrecords and timely preparation of reliable financial information.
Pursuant to the resolution passed by the members in their 20th Annual General Meetingheld on 29th September2014the appointment M/s P.Srinivasan & Co.CharteredAccountantsthe statutory Auditors of the Company to hold the office till the conclusionof the 23rd Annual General meeting of the Company to be held in the calendar year 2017issubject to ratification by members at every Annual General Meeting.Hencethe Boardrecommends for ratification of their appointment for the current financial year.
Pursuant to the provisions of Section 204 of the Companies Act2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules2014the Company hadappointed Shri.Ajay.S.ShrivastavaPracticing Company SecretaryHyderabad to undertake theSecretarial Audit and issue the Secretarial Audit Report of the Company.
The Secretarial Audit Report issued by Shri Ajay.S.Shrivastava has been taken on recordby the Board and is annexed hereto.
17.EXPLANATION TO THE QUALIFICATIONS/RESERVATIONS /ADVERSE REMARKS IF ANYMADE BYSTATUTORY AUDITORS AND SECRETARIAL AUDITORS IN THEIR REPORT:
The qualifications made in Statutory Audit Report or Secretarial Audit Report areclarified hereunder:
The Company has not appointed the Chief Financial Officer and Company Secretary (KMPs)as required under Section 203 of the Act.
Due to the meagre size of operationsno qualified professional agrees to join foremployment with the Company.Appointments shall be made upon improvement of businessprospects.
The details of Remuneration paid to the DirectorsKMP's and Employees as required underSection 197(12) of the Companies Act2013 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules2014 are given in Form MGT-9 forming partof the Directors Report and Corporate Governance Reportand the same are NIL.
19.DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL:
During the period under reviewthere has been no significant and material orders passedby any regulators or courts or tribunal.
20.PARTICULARS OF EMPLOYEES:
There are no employees drawing remuneration as prescribed under Section 197 of theCompanies Act2013.Hence the details are NIL.
21.STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY:
The Company has an effective and adequate Risk Management Policy which is capable ofidentifying various types of risks associated with the businessits assessmentriskhandlingmonitoring and reporting.In the opinion of the managementthe following risks areinvolved in the business-
a.Increasing competition in the Information Technology sector.
b.Changing customer preferences and uncertainty in political decisions.
c.Fund raisingmanaging and planning of monetary resources and loans.
22.ESTABLISHMENT OF VIGIL MECHANISM:
Your Company has laid down Whistle Blower Policy covering Vigil Mechanism withprotective Clauses for the Whistle Blowers as per Regulation 22 of SEBI (ListingObligations and Disclosure Requirements) Regulations2015.The Whistle Blower Policy ismade available on the website of the Company www.senthilinfo.com.
23.PARTICULARS OF CONTRACTS ORARRANGEMENTS WITH RELATED PARTIES:
There are no such related party transactions as per Section 188(1) of the CompaniesAct2013 during the financial year under review.
Howeverthe Company has devised a policy on related party transactions and the same hasbeen enclosed as Annexure IV.
24.CORPORATE SOCIAL RESPONSIBILITY:
Since during the financial year under reviewthe Company's performance does not attractthe provisions set under Section 135 of the Companies Act2013 read with rules madethereunderhencethe compliances to the provisions of Section 135 of the CompaniesAct2013 read with Companies (Corporate Social Responsibility Policy) Rules2014are notrequired.
25.CORPORATE GOVERNANCE CERTIFICATE:
Your Company has been constantly reassessing and benchmarking itself with well-established Corporate Governance practices besides strictly complying with therequirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015and applicable provisions of Companies Act2013.
Your Board has in accordance with the requirements of Companies Act2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations2015 has adopted newpolicies and amended existing policies such as policy on Related Party TransactionsCodeof Conduct for Directors and Senior Management and Vigil Mechanism.These policies areavailable on the website of the Company and can be viewed on www.senthilinfo.com.
26.COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENTPAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR RULES:
In compliance with the requirements of Section 178 of the Companies Act2013theNomination & remuneration Committee of your Board had fixed various criteria fornominating a person on the Board which inter alia include desired size and composition ofthe Boardage limitsqualification/experienceareas of expertise and independence ofindividual.Your Company is not paying remuneration to any director.
27.PARTICULARS OF LOANSGUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT2013:
There were no loans givenguarantees provided by the company under Section 186 of theCompanies Act2013 during the financial year under review.
28.MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATES AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.
29.CONSERVATION OF ENERGYTECHNOLOGY ABSORPTIONFOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energytechnology absorptionforeignexchange earnings and outgo as required under Section 134(3) (m) of the Companies Act2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 are as follows:
CONSERVATION OF ENERGY:
FOREIGN EXCHANGE EARNINGS AND OUTGO:
Particulars of foreign currency earnings and outgo during the financial year are NIL.
30.DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE:
The Board has constituted the Audit Committee.The compositionpowersrole and terms ofreference of the Committee are in accordance with the requirements mandated under Section177 of the Companies Act2013 and Regulation 18 of SEBI (Listing Obligations andDisclosure Requirements) Regulations2015.
MEETINGS OF THE AUDIT COMMITTEE:
The Authorised Share Capital of your Company is Rs.60000000 divided into 6000000equity Shares of Rs.10/- each and the Paid up Capital is Rs.50500000/- divided into5050000 equity Shares of Rs.10/- each.
During the year under reviewthere is no change in the Share Capital of the Company.
a.Provision of money by company for purchase of its own shares by employees or bytrustees for the benefit of employees:
The company has not made any provision of money for purchase of its own shares byemployees or by trustees for the benefit of employees as per Rule 16(4) of Companies(share capital and debentures) Rules2014.
b.Issue of Sweat Equity Shares:
The Company has not issued any sweat equity share during the financial year inaccordance with the provisions of Section 54 of Companies Act2013 read with Rule 8 of theCompanies (Share Capital and Debentures) Rules2014.
c.Issue Of Equity Shares With Differential Rights:
The Company has not issued any equity shares with differential voting rights during thefinancial year as per Rule 4(4) of Companies (Share capital and debentures) Rules2014.
d.Issue of Employee Stock Option:
The company has not issued any employee stock option during the financial year as perRule 12 of Companies (share capital and debentures) Rules2014.
Your Directors place on record their sincere thanks to bankersbusinessassociatesconsultantsand various Government Authorities for their continues supportextended to your Companies activities during the year under review.Your Directors alsoacknowledge gratefully the Shareholders for their support and confidence reposed on theCompany.
TERMS AND CONDITIONS OF APPOINTMENT OF INDEPENDENT DIRECTORS
1.APPOINTMENT & TENURE
The appointment of Independent Director for initial term is generally for a period of 5(five) consecutive years unless vacated and/or terminated earlieras per provisions of theapplicable laws.This tenure is subject to meeting the criteria for being an IndependentDirector and not being disqualified to be a Director under the provisions of CompaniesAct2013 and other applicable laws on a continuous basis.
Independent Director is not liable to retire by rotation.
The appointment and continuation of office of Independent Director is subject to theapplicable provisions of the Companies Act2013 (the Act) and the SEBI (ListingObligations and Disclosure Requirements) Regulations2015.
Independent Director is expected to bring objectivity and independence of view to theBoard's deliberations and to help the Board with effective overview of the Company'sstrategyperformancesocial commitments and risk management and ensure high standards offinancial integrity and governance.Independent Directors are required to perform theduties including attending Board/Committee meetings in which they are members andshareholders meetings and to devote such timeas appropriateto discharge theresponsibilities and duties effectively.
3.ROLE & DUTIES
Role and duties of Independent Directors are as set out under the Act and the SEBI(LODR) Regulations2015including but not limited to the fiduciary duties associated withthe office of an independent director (without prejudice to the rolesfunctions and dutiesspecified in Schedule IV of the Act)shall:
i.act in accordance with the AOA;
ii.act in good faith in order to promote the objectives of the Company for the benefitsof its members as a whole and in the best interest of the Company;
iii.discharge responsibilities and duties with due and reasonable careskill anddiligence by exercising independent judgment;
iv.strive to attend every meeting of the Board and its Committee(s) of which a memberand general meetings;
v.strive to attend any other meetingswhere attendance is solicited;
vi.provide strategic direction and also act as a constructive critic in evaluating theproposal and plans on strategic direction;
vii.evaluate and scrutinize the performance of the management in meeting agreed goalsand objectives;
viii.satisfy on the integrity of financial information and that financial controls andsystems of risk management are robust and compliant with applicable laws;
ix.keep well informed about the Company and the external environment in which itoperates; and
x.ensure that the vigil mechanism policy of the Company is implemented and reportconcerns about any unethical behavioractual or suspected fraud or violation of the Codeof Conduct.
4.ADHERENCE TO THE CODE OF CONDUCT:
During the tenureIndependent Directors of the Company are required to comply and abidewith the provisions of the Act and the SEBI (LoDr) Regulations2015 including thefollowing:
i.Code for Independent Directors outlined in Schedule IV of the Act and duties ofDirectors as provided in the Act including Section 166 of the Act and Regulation 25 of theSEBI (LODR) Regulations2015;
ii.Code of Conduct for Board and Senior Management framed under Regulation 26 of theSEBI (LODR) Regulations2015; and
iii.Policy for Prevention of Insider Trading framed by the Company under the Securities& Exchange Board of India (Prohibition of Insider Trading) Regulations2015.
5.PROFESSIONAL CONDUCT AND CONFLICT OF INTEREST:
Independent Directors shall not -
i.participate in or vote at any meetings of the Board/Committees wherein interested;
ii.achieve or attempt to achieve any undue gain or advantage either for self or forrelativespartnersor associates;
iii.allow any extraneous considerations to vitiate exercise of objective independentjudgment in the paramount interest of the Company as a wholewhile concurring with ordissenting from the collective judgment of the Board in its decision making;
iv.abuse position to the detriment of the Company or its shareholders;
v.unfairly obstruct the functioning of the Board or Committee meeting(s);
vi.put in a position which results in a direct or indirect conflict of interest orpossible conflict of interest with the Company; and
vii.assign office of an Independent Director and any assignments so made shall be void.
i.All information including commercial secretstechnologiesadvertising and salespromotion plans related to the Company that is acquired or provided during the tenure isconfidential to the Company and should not be released/disclosed either during the tenureor following termination (by whatever means) to third parties without prior authorizationby the Boardunless such release/disclosure is required by law or by the rules of anystock exchange or regulatory body/authority.AccordinglyIndependent Directors are expectedto maintain all agendanotesdatarecords and other documents in any way relating to theCompany or the Company's business interestas highly confidential and maintain them asinaccessible to others;
ii.Independent Directors to adhere to the requirements under the applicable regulationsof Insider Trading Code in relation to the disclosure of unpublished price sensitiveinformation and dealing in the securities of the Company.ConsequentlyIndependentDirectors should avoid making any statements or performing any transaction that might riska breach of these requirements without prior clearance from the Board; and
iii.At all times and notwithstanding ceasing to be an Independent Director of theCompanyIndependent Director is expected not to use such information for personal orprofessional benefit or disclose such confidential information to third parties who mayuse the same for their personal or professional benefitor otherwise engage in anyactivity that would constitute insider trading.
7.DISCLOSURES OF INTEREST:
i.It is accepted and acknowledged that Independent Director may have business interestsother than those of the Company.As a condition of appointmentIndependent Director arerequired to submit various disclosures/declarations under applicable laws and as perCompany's policies including declarations with respect to any directorshipsappointmentsand interests to the Board in writing.Independent Director will not serve in more thanseven listed companies including the Company and if to be appointed as a whole timedirector in any listed companyyou will not serve as an Independent Director in more thanthree listed companies including the Company.Furtherin no event Independent Directorshall hold directorship in companies beyond the limits specified in Section 165 of theAct;
ii.During the term of appointmentIndependent Director is to promptly notify theCompany of any change in directorships and provide such disclosure and information as maybe required under the applicable laws; and
iii.Independent Director shall refrain from any action that would lead to loss ofindependence.In the event that the circumstances of Independent Director seem likely tochange which might give rise to conflict of interest or such change in circumstances couldlead the Board to revise its judgment regarding independencesuch changes or possiblechanges in circumstances should be disclosed to the Board promptly.
The Company shall carry out an evaluation of the performance of the Board as a wholeand of the Committees and directors of the Board on an annual basis as per the Company'spolicy.The performance evaluation of independent directors shall be done by the entireBoardexcluding the director being evaluated.The appointment/ re-appointment on the Boardshall be subject to the outcome of the annual evaluation process.
9.INDEPENDENT DIRECTORS' MEETING:
A separate meeting of the Independent Directors will be held at least once every yearwithout the attendance of the non-independent directors and the members of themanagement.The Company expects all the Independent Directors to strive to be present atthis meeting.
10.LIABILITY UNDER THE ACT:
Pursuant to the provisions of the Actan Independent Director will be liable only inrespect of such omission or commission by the Company which had occurred with his/herknowledgeattributable through Board processes and with his/her consent or connivance orwhere he/she had not acted diligently.
i.Independent Director may resign from the position at any time by giving a notice inwriting to the Company stating reasons of resignation.The resignation shall take effectfrom the date on which the notice is received by the Company or the date if any specifiedin the noticewhichever is later.
11.Independent Director shall cease to hold office if fails to meet the criteria for anIndependent Director mentioned in the Act and/or the SEBI (LODR) Regulations2015 and/orif otherwise disqualified and shall forthwith intimate the Company of such an event andpromptly submit resignation to the Company with effect from date of such change.
iii.The Company can also terminate your directorship in accordance with the procedureset out in Section 169 of the Act.Apart from the grounds of termination as specified inthe Actyour directorship may be terminated for violation of any provisions of theappointment letter.
In the event of any claim or litigation against the Companybased upon any allegedconductact or omission on the part of Independent Director during the tenuretheIndependent Director shall render all reasonable assistance and cooperation to the Companyand provide such information and documents as are necessary and reasonably required by theCompany or its counsels.
13.CHANGES IN PERSONAL DETAILS:
During terman Independent Director shall promptly intimate the Company in theprescribed mannerof any change in address or other contact or personal details.
The appointment letter and any non-contractual obligations arising out of or inconnection with the letter are governed by and shall be construed in accordance withthelaws of India and the parties agree to submit to the exclusive jurisdiction of the courtsin India.
EVALUATION OF PERFORMANCE OF THE BOARDITS COMMITTEES AND INDEPENDENT DIRECTORS POLICY
Pursuant to the provisions of the Companies Act2013 and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations2015 (as maybe applicable)the Board of Directors (Board) shall carry out an annual evaluation of itsown performance and that of its Committees and individual Directors.
The performance of the Board and individual Directors shall be evaluated by the Boardseekinginputs from all the Directors.The performance of the Committees shall be evaluatedby the Boardseeking inputs from the Committee members.A template is prescribed toevaluate the performance of the directors and members of the Committees.
At the first stagethe Chairman of the Nomination and Remuneration Committee shallobtain from all the Board members duly filled in Board evaluation templates for evaluationof the performance of the Board as a wholeevaluation of the Committee members etc.
At the second stagea separate meeting of independent Directors shall be held to reviewthe performance of non-independent Directorsperformance of the Board as a whole andperformance of the Chairperson of the Companytaking into account the views of ExecutiveDirectors and Non-Executive Directors.Based on the report of the meeting an EvaluationReport shall be placed before the Board.
The criteria for performance evaluation of the Board included aspects like Boardcompositionand structureeffectiveness of Board processesinformation and functioningetc.The criteria for performance evaluation of Committees of the Board included aspectslike composition of Committeeseffectiveness of Committee meetingsfollow up actions ondecisions taken etc.The criteria for performance evaluation of the individual Directorsincluded aspects on contribution to the Board and Committee meetings like preparedness onthe issues to be discussedmeaningful and constructive contribution and inputs inmeetingsfollow up actions etc.In addition the Chairperson is to be also evaluated on thekey aspects of his/her role.
The summary of the evaluation reports shall be presented to the respective Committeesand the Board for their consideration.
The details of the two policies are stated below:
POLICY ON BOARD DIVERSITY:
Pursuant to the provisions of the Clause 49 of the Listing Agreement which wassubstituted by SEBI (LODR) Regulations2015 w.e.f.1st December2015the Policy onBoardDiversity is framed and adopted.
The broad objectives of the Policy are:
Diversity and inclusion initiatives based on sound business principles andobjectives;
To help the Company build a Board that can draw upon a wide range ofperspectivesexpertiseKnowledge and experience;
To bridge the gap in Board composition for achieving optimum and balanced Boardwith a wide range of attributes; and
To encourage healthy and open discussion and promote independence of judgment inBoard and Committee deliberations.
Pursuant to the provisions of the Companies Act2013 and Clause 49 of the ListingAgreementthe Remuneration Policy is framed and adopted.
The broad objectives of the Policy are:
To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board;
To recommend to the Board on Remuneration payable to the DirectorsKeyManagerial Personnel and Senior Management;
To provide to Key Managerial Personnel and Senior Management reward linkeddirectly to their effortperformancededication and achievement relating to the Company'soperations; and
To retainmotivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.
While deciding on the remuneration for Directorsthe Board and Nomination &Remuneration Committee considers the performance of the Companythe current trends in theindustrythe director's participation in Board and Committee meetings during the year andother relevant factors.
The performance of the Company and individual performance as well employees'potentialcriticality and longevity in the grade are considered while determiningremuneration to the Employees.
EVALUATION DURING THE YEAR:
The Independent Directors in their meeting held on 12th February2016 have reviewed thetemplates filled by the directors on Board evaluation and assessed the grounds ofevaluation of the directors such as:
a.Strategic decisions and Direction;
b.Self-motivated & Monitoring;
c.Advisory Role & Accountability;
d.Pro-Active & Periodic Reporting;
e.GovernanceCompliant & Compliance oriented.
The Report of the evaluation of the Board and Committees were finalized by theIndependent Directors and placed before the Board in the next Meeting.
POLICY ON RELATED PARTY TRANSACTIONS
1.1 The Companies Act2013 ('Act') and Securities and Exchange Board of India ('SEBI')have significantly revised the regulations governing related party transactions enteredinto by the companies.The Act defines related parties and related party transactions andprescribes certain approval requirements with respect to such transactions.
1.2 The listing agreement entered into by a company with the stock exchanges where itsshares are listed ('Listing Agreement')also requires a company to adopt a policy settingout the manner in which the company will deal with related party transactions as well asthe materiality thresholds applicable to such transactions.
1.3 In view of the above and to consolidate the procedural requirements under the Actand the Listing Agreementthe Company has laid down this policy on related partytransactions in accordance with the requirements of the Act read with relevant rulesprescribed therein and the Listing Agreement.
1.4 The Board of Directors of (the 'Board') of SenthilInfotek Limited (the 'Company')has adopted the following policy and procedures with regard to Related Party Transactions.
2.1 The Board recognizes that related party transactions need to be reviewed as per theprovisions of the Act and the Board has adopted this Policy to set forth the proceduresunder which transactions with related parties shall be reviewed for approval orratification in accordance with the procedures set forth below:
2.1.1 This Policy also aims to comply with the applicable laws.
2.1.2 No related party transactions may be entered into by the Companyexcept inaccordance with the provisions of this Policy and applicable laws.
Definitions of some of the key terms used in this policy are given below:
a) Act' means Companies Act2013as amended from time to time.
b) Arm's Length Transaction' means a transaction between the Company and its RelatedParty(ies) that is conducted as if they were unrelated and at a fair valueso that thereis no conflict of interest.
c) Audit Committee' or 'Committee' means Committee of Board of Directors of the Companyconstituted under provisions of the Act and the Listing Agreement.
d) Director' means a director on the Board of the Company.
e) Key Managerial Personnel or KMP' means:
i.the Chief Executive Officer or the Managing Director or the Manager and in theirabsence the Whole-Time Director;
ii.the Company Secretary;
iii.the Chief Financial Officer; and
iv.any other person appointed as the KMP by the Board of Directors of the Company.
f) Material Related Party Transaction' will have the same meaning as defined inRegulation 23 of SEBI (LODR) Regulations2015.
g) "Ordinary Course of Business ('OCB')" means a transaction which is:Carried out in the normal course of business envisaged in accordance with the Memorandumof Association ('MoA') of the Company as amended from time to timeor historical practicewith a pattern of frequencyorcommon commercial practiceor meets any other parameters /criteria as decided by the Board/Audit Committee.
h) Policy' means this Related Party Transaction Policy.
i) Related Party' has the same meaning as assigned to it under the Act and SEBI (LODR)Regulations2015.
j) "Related Party Transactions" mean all transactions between the Company onone hand and one or more related party on the other hand including contractsarrangementsand transactions as envisaged in Section 188(1) of the Act and/or Regulation 23 of SEBI(LODR) Regulations2015.
k) Stock Exchanges' means the stock exchanges where equity shares of the company arelisted.
4.MANNER OF DEALING WITH RELATED PARTY TRANSACTIONS
4.1 Identification of related parties
The Company has formulated guidelines for identification and updating the list ofrelated parties as prescribed under Section 2(76) of the Act read with the Rules framedthere under and SEBI (LODR) Regulations2015.
4.2 Identification of related party transactions
The Company has formulated guidelines for identification of related party transactionsin accordance with Section 188 of the Act and SEBI (LODR) Regulations2015.
The Company has also formulated guidelines for determining whether the transaction isin the ordinary course of business and at arm's length basis and for this purposetheCompany may seek external professional opinionif necessary.
4.3 Approval of Audit Committee
a) All the Related Party Transactions shall require prior approval of the AuditCommittee.
b) The Audit Committee may grant omnibus approval for Related Party Transactionssubject to the conditions as laid down under Clause 49 of the Listing Agreementas amendedfrom time to time.
c) Any member of the Audit Committee who has a potential conflict of interest in anyRelated Party Transaction shall abstain from discussion and voting.
4.4 Approval of Board of Directors
a) The following Related Party Transactions which are not in the ordinary course ofbusiness or are in the ordinary course of business but are not Arm's Length Transactionsshall require prior approval of the Board:
i.salepurchase or supply of any goods or materials;
ii.selling or otherwise disposing ofor buyingproperty of any kind;
iii.leasing of property of any kind;
iv.availing or rendering of any services;
v.appointment of any agent for purchase or sale of goodsmaterialsservices orproperty;
vi.such Related Party's appointment to any office or place of profit in the Companyits
subsidiary company or Associate Company; and
vii.underwriting the subscription of any securities or derivatives thereofof theCompany.
b) All the Material Related Party Transactions shall be considered and approved by theBoard before placing them before shareholders for their approval except for thosetransactions that do not require approval under Section 177 and 188 of the Act; and aretransactions entered into between the Company and its wholly-owned subsidiary whoseaccounts are consolidated with the Company and placed before the shareholders at thegeneral meeting for approval.
c) Where any Director is interested in any Related Party Transactionsuch Director willabstain from discussion and voting on the subject matter of the resolution relating tosuch Transaction.
For the purpose of this Policywholly-owned subsidiary means a company whose 100%voting powerdirectly or indirectlyis controlled by another company i.e.holding company.
4.5 Approval of Shareholders
a) Related Party Transactions set out in Clause 6(a) abovewhich exceed the limits asprescribed under Section 188 of the Act read with Rule 15 of the Rules shall be placed forshareholders' approval by way of a resolution.Any shareholder which is a Related Party inthe context of the proposed Related Party Transaction shall abstain from voting on suchresolution in terms of the provisions of the Act.
b) Subject to the Regulation 23(4) of the SEBI (LODR) Regulations2015all MaterialRelated Party Transactions shall be approved by the shareholders' by way of resolution.TheRelated Party(ies) shall abstain from votingirrespective of whether the entity is a partyto the particular transactionon such resolution in terms of the provisions of the saidRegulation.
4.6 Approval of Related Party Transactions
a) To approve a Related Party Transactionthe Committee/ Board/ shareholdersshall beprovided all relevant material information of the Transactionincluding the termspurposeof the transaction and such other details as required under the applicable law or by theCommittee/Boardas the case may be.While approving a Related Party TransactiontheCommittee/Board will consider the following factorsamong othersto the extent relevant:
i.Whether the terms on which Related Party Transaction proposed are fair and on arm'slength basis to the Company;
ii.Whether the Related Party Transaction would affect the independence of anindependent director;
iii.Whether the Related Party Transaction includes any potential reputational risk thatmay arise as a result of or in connection with the proposed transaction; and
iv.Whether the Related Party Transaction would present conflict of interest for anyDirector or KMP of the Company.
v.Whenever there is any doubt with regard to transaction(s) with Related Party(ies)and/or the applicable corporate governance requirementsthe Audit Committee/ Board shallbe entitled to seek a legal opinion/clarification for the same.
b) The Audit Committee shall consider all relevant facts and circumstances regarding aRelated Party Transaction placed before it.
c) In the event of any DirectorKMP or any other employee become aware of any RelatedParty Transaction(s) that has been omitted to be approved by the Audit
Committee/Board/Shareholders or is in deviation of this Policysuch person shallpromptly notify the management about such transactionwho shall ensure that suchtransaction is brought to the notice of the Audit Committee or the Boardas applicableatthe earliest.
d) The Audit Committee/Board shall evaluate such transaction(s) and may decidenecessary action as it may consider appropriate including ratificationrevision ortermination of the Related Party Transaction.
a) In terms of the provisions of Section 134(3)(h) of the ActRelated PartyTransactions requiring approval of Board/Shareholders under Section 188 of the Act shallbe disclosed in the Directors' Report along with the justification for entering into suchRelated Party Transactions.
b) Details of all Material Related Party Transactions shall be disclosed quarterlyalong with Company's Compliance Report on Corporate Governancein accordance with theprovisions of SEBI (LODR) Regulations2015.
c) This Policy shall be disclosed on the website of the Company and a web link theretois http://www.senthilinfo.com/investors.html.
d) The Company shall keep one or more registers giving separately the particulars ofall contracts or arrangements with any Related Party.
a) This Policy is based on the provisions of the Act and rules framed there under andas per the requirements of the SEBI (LODR) Regulations2015.
b) In case of any changes in the provisions of the Actthe SEBI (LODR) Regulations2015or any other regulation which are inconsistent with the Policysuch amended provisionswould prevail over the Policy.
c) The Board is authorized to amend this Policy to be consistent with the prevailingprovisions of the Act and SEBI (LODR) Regulations2015which shall be placed before theAudit Committee and Board for their approval.
In case of any doubt with regard to any provision of the Policy and also in respect ofmatters not covered hereina reference shall be made to the Chairperson of theCommittee.In all such mattersthe interpretation and decision of the Chairperson shall befinal.The Company reserves the right to modifycanceladdor amend any clause of thisPolicy as set out above.
POLICY ON FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
Regulation 25(7) of SEBI (Listing Obligations and DisclosureRequirements)Regulations2015 (hereinafter referred as "Listing Regulations")stipulates as under:-
The listed entity shall familiarize the Independent Directors through variousprogrammes about the listed entityincluding the following:
a) Nature of the industry in which the listed entity operates;
b) Business model of the listed entity;
c) Rolesrightsresponsibilities of independent directors; and
d) Any other relevant information.
Furtheras per Regulation 46 of the ListingRegulations the details of suchfamiliarization programs shall be disclosed on the Company's websitewww.senthilinfo.comand a web link thereto shall also be given in the Annual Report.
The familiarization program (hereinafter referred as "program") aims toprovide insights into the Company to enable the Independent Directors to understand itsbusiness in depth and contribute significantly to the Company.
The Company shall through its Senior Managerial Personnelconduct programs /presentations periodically to familiarize the Independent Directors with thestrategyoperations and functions of the Company and to appraise them their rolesrightsand responsibilities in the Company to enable them to make effective contribution anddischarge their functions as a Board Member.The Independent Directors are given everyopportunity to interact with the Key / Senior Management Personnel and are given all thedocuments sought by them for enabling a good understanding of the Companyits variousoperations and the industry of which it is a part.
Familiarization Program for Independent Directors includes:
Covering details of the Companyshareholding patternthe Board structurethe BoardCommittees and their functionspolicies applicable to the directorstheirrolesresponsibilitiesdutiesrights as a director etc.
Covering details of nature of the industry in which the Company operatesbusiness modelof the Companyfinancial details etc. RolesRights and Responsibilities of IndependentDirectors:
Covering the definition of Independent Directorsrelevant provisions of the CompaniesAct2013 and the Listing RegulationsTenure of Independent Directorstheirrolesrightsresponsibilitiescode of conduct etc.
Familiarisationprogram will be conducted on "as needed" basis duringthe year.
As and when familiarisation program is conductedthe same will be disclosed onthe website of the Company.
The details of the familiarisation program shall be disclosed on the Company'swebsite www.senthilinfo.com and a web linkthereto shall be provided in the Annual Report.
The Board shall periodically overview the following:
Number of programmes attended by independent directors (during the year and on acumulative basis till date);
Number of hours spent by independent directors in such programmes (during theyear and on cumulative basis till date); and3
Other relevant details.
The details of training programs attended by independent directors during Financialyear 201516* are as follows:
*For the period January 012016 to March 312016.
The Independent Directors are also made aware of their rights/role/ responsibilities atthe time of theirappointment/ reappointment through a formal letter of appointment alongwith the terms and conditions oftheir engagement.
The Market data HighLow during each month in last financial year is in BSE Limited isgiven below: