Your Directors have pleasure in presenting before you their 36th Annual Report togetherwith the Audited Accounts of the Company for the year ended 31st March 2019.
The standalone financial results of the Company for the year under review aresummarized for your consideration:
|Particulars ||2018-2019 ||2017-2018 |
| ||(Amount in Lacs) ||(Amount in Lacs) |
|Gross Income ||112.75 ||58.83 |
|Expenses ||65.26 ||48.64 |
|Profit Before Depreciation and Tax ||47.49 ||10.19 |
|Depreciation ||0.23 ||0.29 |
|Net Profit Before Tax ||47.26 ||9.89 |
|Provision for Tax ||12.54 ||2.58 |
|Net Profit After Tax ||34.72 ||7.32 |
|Reserves ||NIL ||NIL |
|Basic EPS ||0.38 ||0.24 |
|Diluted EPS ||0.92 ||0.24 |
STATE OF COMPANY'S AFFAIRS/ BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THEYEAR/HIGHLIGHTS/OPERATIONS
As the Company has been granted NBFC License by RBI Emerald is focused mainly ongiving loans to credit worthy SMEs.
Company has elaborate system of vetting any loan proposal. Whereby we study thefinancials past track records and promoter's credibility. We have granted loans rangingfrom 5 Lakhs to 100 Lakhs.
Our Current Loan Portfolio is performing very well.
As the Promoters of the Company are into financial services from last 20 years theyhave wide knowledge about credit worthiness of various clients.
Company is also in syndication of big tickets loans for various financial institutions.Last Year we have earned a revenue of INR 5428187/- through syndication business only.
We have floated a subsidiary by the name of Eclat Net Advisors Private Limited in March2015. The Company acts as Direct Selling Agent for various financial institutions panIndia.
Your Directors have not recommended any dividend in the current financial year anddecided to reinvest the earnings in the expansion of the company.
Entire amount of Net Profit has been transferred to Profit and Loss Surplus accountwhich appears under the head "Reserves and Surplus." An amount of 6.94 Lakhs hasbeen transferred to Statutory Reserve Fund u/s 45 IC @20% .
In accordance with the provisions of the Companies Act 1956 and Articles ofAssociation of the Company Mrs. Anubha Aggarwal (DIN 02557154) Director of the Companyretire by rotation in the ensuing Annual General Meeting and being eligible offer herselffor re-appointment.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have given declarations that they meet thecriteria of Independence as laid down under Section 149 (6) of the Companies Act 2013 andRegulation 25 of SEBI (LODR) Regulations.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:
|Mr. Sanjay Aggarwal ||Managing Director |
|Ms. Sheetal Kapoor ||Chief Financial Officer |
|Mrs. Anju Sharma ||Company Secretary |
a. Issue Of Shares With Differential Rights
The Company has not issued any shares with Differential Rights during the year underreview.
b. Issue Of Sweat Equity Share
The Company has not issued any Sweat Equity shares Employee Stock Options during theyear under review.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has adopted a policy for prevention of Sexual Harassment of Women atworkplace and has set up Committee for implementation of said policy. During the yearCompany has not received any complaint of harassment.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
No events have been occurred subsequent to the date of financial results
MAJOR CHANGES HAPPENING DURING THE FINANCIAL YEAR
Your Directors wish to inform that there have not been any changes during the FinancialYear under review: a. In the nature of Company's business b. Generally in the class ofbusiness in which the Company has an interest.
The company has allotted 5998650 Equity shares on Right Issue basis during the year.
LISTING AND LISTING REGULATIONS :-
The equity shares of the company are listed on the Bombay Stock Exchange (BSE). Duringthe year Company executed Uniform Listing Regulations in accordance with the requirementsof SEBI circular DCS/ COMP/12/2015-16 dated October 13 2015 with BSE Limited. TheCompany has also formulated the new Policies as required under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015.
The company is regular in paying the listing fee.
The Board of Directors has adopted The Code Of Conduct For Prevention Of InsiderTrading in accordance with the requirements of the SEBI (Prohibition of Insider Trading)Regulations 2015. The Insider trading policy of the company lays down guidelines andprocedures to be followed and disclosures to be made while dealing with shares of theCompany as well as the consequences of violation.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO
The requisite information has been given by way of an Annexure D-1 to this Report.
Though the provisions of corporate governance are not applicable to the company butYour Company is still committed to maintain the highest standards of Corporate Governance.A copy of corporate governance is attached as annexure D-9.
BUSINESS RESPONSIBILITY REPORT
Regulation 34 (2) (f) the Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 is not applicable to the Company.
POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION
Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the CompaniesAct 2013 the policy on appointment of Board members including criteria for determiningqualifications positive attributes independence of a Director and the policy onremuneration of Directors KMP and other employees is attached as Annexure D-2 whichforms part of this report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT:
Management Discussion & Analysis Report for the year under review as stipulatedunder Part B of Schedule V to the Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 is presented in a separate section asAnnexure D-3 forming part of this Annual Report.
PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/EMPLOYEES:-
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the CompaniesAct 2013 the Report and Accounts are being sent to the Members and others entitledthereto excluding the information on employees' particulars which is available forinspection by the Members at the Registered Office of the Company during business hours onworking days of the Company up to the date of the ensuing
Annual General Meeting. If any Member is interested in obtaining a copy thereof suchMember may write to the Company Secretary in this regard.
NUMBER OF MEETINGS OF BOARD
During the year 2018-19 10 Board Meetings were held including one meeting ofIndependent Directors.
|Date of Board Meeting ||Attendance |
|05.04.2018 ||4 |
|30.05.2018 ||4 |
|14.08.2018 ||4 |
|14.11.2018 ||4 |
|19.11.2018 ||2 |
|18.01.2019 ||2 |
|08.02.2019 ||2 |
|14.02.2019 ||4 |
|14.02.2019(Ind. Director Meeting) ||2 |
|08.03.2019 ||2 |
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations with Stock Exchanges the Board in consultation with its Nomination &Remuneration Committee has formulated a framework containing inter-alia the criteriafor performance evaluation of the entire Board of the Company its Committees andIndividual Directors including Independent Directors. Accordingly following is thecriteria for evaluation:-
a. Criteria for evaluation of the Board of Directors as a whole:
i. The Frequency of Meetings
ii. Quantum of Agenda
iii. Administration of Meetings
iv. Flow and quantity of Information from the Management to the Board
v. Number of Committees and their role.
vi. Overall performance of the Company
b. Criteria for evaluation of the Individual Directors including Independent Directors;
i. Experience and ability to contribute to the decision making process
ii. Problem solving approach and guidance to the Management
iii. Attendance and Participation in the Meetings
iv. Personal competencies and contribution to strategy formulation
v. Contribution towards statutory compliances monitoring of controls and CorporateGovernance
The Independent Directors had met separately on 14.02.2019 without the presence ofNon-Independent Directors and the members of management and discussed inter-alia theperformance of non-Independent Directors and Board as a whole and the performance of theChairman of the Company after taking into consideration the views of Executive andNon-Executive Directors.
The Nomination and Remuneration Committee has also carried out evaluation of everyDirector`s performance. The performance evaluation of all the Independent Directors havebeen done by the entire Board excluding the Director being evaluated. On the basis ofperformance evaluation done by the Board it shall be determined whether to extend orcontinue their term of appointment whenever the respective term expires. The Directorsexpress their satisfaction with the evaluation process.
STATUTORY AUDITORS & AUDITORS REPORT:-
M/s K. Singh & Associates Chartered Accountants Chandigarh was appointed asStatutory Auditors of the Company in the last Annual General Meeting to hold office tillthe conclusion of Annual General Meeting to be held in the year 2022. Their reappointmentis subject to ratification at every Annual General Meeting. Hence it is proposed to ratifytheir appointment from the conclusion of this Annual General Meeting till the conclusionof the next Annual General Meeting. The Auditors' Report being self-explanatory requiresno comments from the Directors. Further there are no reservations qualifications oradverse remarks in the Audit Report given by them in respect of the Financial Year2018-19.
SECRETARIAL AUDITORS AND THEIR REPORT
Mr. Kanwaljit Singh (M. No. 5901) a Company Secretary in practice having CP no. 5870was appointed as Secretarial Auditor of the Company for the financial year 2018-19pursuant to Section 204 of the Companies Act 2013. The Secretarial Audit Report submittedby him in the prescribed form MR- 3 is attached as Annexure D-4 and forms part of thisreport.
FRAUDS REPORTED BY AUDITORS
There are no frauds reported by auditors under sub-section (12) of section 143including those which are reportable to the Central Government.
As per the Cost Audit Orders Cost Audit is not applicable to the Company.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the Consolidated Financial Statementspursuant to Section 129(3) of the Companies Act 2013 (Act) and SEBI Listing Regulationsand prepared in accordance with the Accounting Standards prescribed by the Institute ofChartered Accountants of India in this regard.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
As required pursuant to provisions of section 134(1) (e) of the Act the Company has awell placed proper and adequate internal financial control system commensurate with thesize scale and complexity of its operations. The scope and authority of the internalAudit function is well defined in the Organization. The internal financial control systemensures that all assets are safeguarded and protected and that the transactions areauthorized recorded and reported correctly.
DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
The Company has in place comprehensive risk assessment and minimization procedureswhich are reviewed by the Board periodically. During the year as per the requirements ofListing Agreement with the Stock Exchanges a Risk Management Committee was constituted bythe Board of Directors with responsibility of preparation of Risk Management Policyreviewing and monitoring the same on regular basis to identify and review critical riskson regular basis The risks faced by the Company and their minimization procedures areassessed by the Board. Further the Company identifies risks and control systems areinstituted to ensure that the risks in each business process are mitigated. The Boardprovides oversight and reviews the Risk Management Policy on a regular basis. In theopinion of the Board there has been no identification of elements of risk that maythreaten the existence of the Company.
The Company has a subsidiary M/s Eclat Net Advisors Pvt.Ltd.(CIN:U74140CH2015PTC035473) as defined in the Companies Act 2013. Report on theperformance and Financial position of the subsidiary in the specified format AOC-1 isannexed to the Directors' Report as Annexure D-5.
The Company has neither accepted nor renewed any deposits during the Financial Year2018-19 in terms of Chapter V of the Companies Act 2013. Information in this regardtherefore is nil. There was no non compliance of provisions of chapter V of the CompaniesAct 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERNS STATUS AND COMPANY`S OPERATIONS IN FUTURE
The Company has not received any significant or material orders passed by anyRegulatory Authority Court or Tribunal which shall impact the going concern status andCompany`s operations in future.
Your Directors wish to inform that in Compliance with Section 177 of the Companies Act2013 and Regulation 18 of Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 an audit committee has been duly constituted.The Audit Committee as on March 31 2019 comprises of the following Directors:
|Mr. Raman Aggarwal ||Independent Director Chairman |
|Mr. Deepak Gour ||Independent Director Member |
|Mr. Sanjay Aggarwal ||Managing Director Member |
Details of the Audit Committee have been separately given in the corporate governancereport. Further all recommendations of Audit Committee were accepted by the Board ofDirectors.
NOMINATION & REMUNERATION COMMITTEE
In terms of Regulation 19 of Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 and pursuant to the provisions of section178 of the Companies Act 2013 Nomination & Remuneration Committee as on March 312019 comprises of the following Directors:
|Mr. Deepak Gaur ||Independent Director Chairman |
|Ms. Anubha Aggarwal ||Non-executive Non-Independent Director Member |
|Mr. Raman Aggarwal ||Independent Director Member |
The details of Remuneration Policy and the Committee are furnished in the Report onCorporate Governance which is annexed herewith.
STAKEHOLDERS RELATIONSHIP COMMITTEE
In terms of Regulation 20 of Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has constituted StakeholdersRelationship Committee with following composition as on:-
|Ms. Anubha Aggarwal ||Non-executive Director Member |
|Mr. Raman Aggarwal ||Independent Director Member |
|Mr. Sanjay Aggarwal ||Managing Director Member |
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as on March 31 2019 in the prescribed Form No. MGT-9pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 (1) of the Companies(Management and Administration) Rules 2014 is attached herewith as Annexure D-6 and formspart of this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
Pursuant to Section 134(3)(g) of the Companies Act 2013 particulars of loansguarantees or investments under Section 186 of the Act as at end of the Financial Year2018-19 are attached as Annexure D-7 which forms part of this report.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1) OF THE COMPANIESACT 2013
With reference to Section 134(3)(h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the financial year were in the ordinary course of business and on an arm's lengthbasis. Hence provisions of Section 188 (1) are not applicable. However as thesetransactions were in the ordinary course of business and on an arm's length basis in theopinion of the Board these transactions are justified to be executed. The detail of thesetransactions is given in Annexure D-8 which forms part of this report.
During the year the Company had not entered into any contract or arrangement withrelated parties which could be considered material' according to the policy of theCompany on Materiality of Related Party Transactions. Your attention is also drawn to theRelated Party disclosures set out in Note no. 25 of the Financial Statements.
The Company has established a Vigil Mechanism cum Whistle Blower Policy in terms ofSection 177 (10) of the Companies Act 2013 and also in terms of Regulation 22 ofSecurities Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. The detail of the said Vigil Mechanism cum Whistle Blower Policy isgiven in the Corporate Governance Section which is annexed herewith. The Vigil Mechanismcum Whistle Blower Policy is also available on the Company's websitehttp://www.emeraldfin.com/wp-content/uploads/2015/03/Whistle-Blower-Policy.pdf.
DIRECTORS' RESPONSIBILITY STATEMENT:-
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation 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 at the end of the financial year and ofthe profit and 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 this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(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 provisionsof all applicable laws and that such systems were adequate and operating effectively.
The company has devised proper systems to ensure compliance of all laws applicable tothe company and the compliance reports issued by the Departmental Heads are placed beforethe Board every Quarter confirming compliance by the Company with all applicable Laws.
In accordance with Regulation 17 (8) read with Part B of Schedule V to the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 pertaining to corporate governance norms the Managing Director has submittednecessary certificate to the Board of Directors stating the particulars specified underthe said Clause. The certificate has been reviewed by the Audit Committee and taken onrecord by the Board of Directors.
DEMATERIALIZATION OF SHARES
As mentioned in Company's earlier Annual Reports the Company's equity shares are incompulsory Demat mode in terms of SEBI Guidelines. This has been facilitated througharrangement with NSDL and CDSL. About 92% of the shares of the Company are already indematerialized form. M/s Mas Services Limited New Delhi is acting as the Registrar andShare Transfer Agents for this purpose and acts as common share agency in terms of SEBIGuidelines.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCYCODE 2016 (IBC)
No Insolvency resolution process has been initiated/ filed by a financial oroperational creditor or by the company itself under the IBC before the NCLT.
Your Directors wish to express their sincere appreciation to valued Clients ReserveBank of India Company's Bankers Government Agencies and Employees of the company fortheir continued support & co-operation.
|For & On Behalf of the Board ||For & On Behalf of the Board |
|Sd/- ||Sd/- |
|(Sanjay Aggarwal) ||(Anubha Aggarwal) |
|MANAGING DIRECTOR ||DIRECTOR |
|(DIN 02580828) ||(DIN 02557154) |
|PLACE: CHANDIGARH || |
|Date: 14.08.2019 || |
ANNEXURE D-1 TO THE DIRECTORS' REPORT:-
A. Conservation of Energy :
Though energy does not form a significant portion of the cost for the Company yetwherever possible and feasible continuous efforts are being put for conservation ofenergy and minimize power cost. The Energy conservation measures include replacement ofincandescent lights with low power consuming LED lights and compact Fluorescent Lightsreplacement of old electrical units with new energy efficient units. Staff of the Companyis regularly educated about conservation of power.
B. Technology Absorption :
The company is in service industry and exposure of technology is not very significant.The Company continues to absorb and upgrade modern technologies in its operations and backend support functions like Accounts Human Resource Management Operations and Compliancefunctions.
C. Foreign exchange earnings and outgo:
There is no foreign exchange earnings and outgo during the financial year.
ANNEXURE D- 2 TO THE DIRECTORS' REPORT
NOMINATION AND REMUNERATION POLICY
This Nomination and Remuneration Policy has been formulated in compliance with Section178 of the Companies Act 2013 read along with the applicable rules thereto andRegulations of SEBI (LODR) Regulations as amended from time to time. This policy onnomination and remuneration of Directors Key Managerial Personnel and Senior Managementhas been formulated by the Nomination and Remuneration Committee (NRC or the Committee)and has been approved by the Board of Directors.
The Nomination and Remuneration Committee and this Policy shall be in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andRegulation under SEBI (LODR) Regulations. The Key Objectives of the Committee would be:
1.1. To guide the Board in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.
1.2. To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.
1.3. To recommend to the Board on Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.
1.4. To provide to Key Managerial Personnel and Senior Management reward linkeddirectly to their effort performance dedication and achievement relating to theCompany's operations.
1.5. To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.
1.6. To devise a policy on Board diversity
1.7. To develop a succession plan for the Board and to regularly review the plan;
2.1. Actmeans the Companies Act 2013 and Rules framed thereunder as amendedfrom timeto time.
2.2. Boardmeans Board of Directors of the Company.
2.3. Directorsmean Directors of the Company.
2.4. Key Managerial Personnelmeans
2.4.1. Chief Executive Officer or the Managing Director or the Manager;
2.4.2. Whole-time director;
2.4.3. Chief Financial Officer;
2.4.4. Company Secretary; and
2.4.5. such other officer as may be prescribed.
2.5. Senior Management means personnel of the company who are members of its coremanagement team excluding the Board of Directors including Functional Heads. 2.6."Remuneration" means money or its equivalent given or passed to any person forservices rendered by him and includes perquisites as defined under the Income-tax Act1961;
3. ROLE OF COMMITTEE
3.1. Matters to be dealt with perused and recommended to the Board by the Nominationand Remuneration
The Committee shall:
3.1.1. Formulate the criteria for determining qualifications positive attributes andindependence of a director.
3.1.2. Identify persons who are qualified to become Director and persons who may beappointed in Key
Managerial and Senior Management positions in accordance with the criteria laid down inthis policy.
3.1.3. Recommend to the Board appointment and removal of Director KMP and SeniorManagement Personnel.
3.2. Policy for appointment and removal of Director KMP and Senior Management
3.2.1. Appointment criteria and qualifications
a) The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel in line with the Business of the Company the Industry Structure which the Companyoperates in and recommend to the Board his / her appointment.
b) A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment to ensure that he/she is able to dischargehis duties in a diligent manner. The Committee has discretion to decide whetherqualification expertise and experience possessed by a person is sufficient / satisfactoryfor the concerned position.
c) The Chief Financial Officer of the Company shall be a person with requisiteprofessional qualification who can understand the finance and accounts. The CompanySecretary of the Company shall necessarily be a member of Institute of Company Secretariesof India. For any other position in the Senior Management where a specific educationalqualification is desirable to discharge the functions and duties attached to thatparticular position the person shall necessarily be holding that qualification.
d) The Company shall not appoint or continue the employment of any person as Whole-timeDirector who has attained the age of seventy years. Provided that the term of the personholding this position may be extended beyond the age of seventy years with the approval ofshareholders by passing a special resolution based on the explanatory statement annexed tothe notice for such motion indicating the justification for extension of appointmentbeyond seventy years.
3.2.2. Term / Tenure
a) Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any person as its Executive Chairman ManagingDirector or Executive Director for a term not exceeding five years at a time. Nore-appointment shall be made earlier than one year before the expiry of term.
b) 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 butsuch Independent 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 5 years or more in the Company as on October1 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 5 years only.
- At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company or such othernumber as may be prescribed under the Act.
The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval (yearly) on the basis of followingcriteria:-
a. Criteria for evaluation of the Board of Directors as a whole:
vi. The Frequency of Meetings
vii. Quantum of Agenda
viii. Administration of Meetings
ix. Flow and quantity of Information from the Management to the Board
x. Number of Committees and their role.
xi. Overall performance of the Company
b. Criteria for evaluation of the Individual Directors including Independent Directors;
xii. Experience and ability to contribute to the decision making process
xiii. Problem solving approach and guidance to the Management
xiv. Attendance and Participation in the Meetings
xv. Personal competencies and contribution to strategy formulation
xvi. Contribution towards statutory compliances monitoring of controls and CorporateGovernance
Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations thereunder or due to other valid reasons as recordedin writing by the Committee the Committee may recommend to the Board with reasonsrecorded in writing removal of a Director KMP or Senior Management Personnel subject tothe provisions and compliance of the said Act rules and regulations.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.
3.3. Policy relating to the Remuneration for the Whole-time Director KMP and SeniorManagement
a) The remuneration / compensation / commission etc. to the Whole-time Director KMPand Senior Management Personnel will be determined by the Committee and recommended to theBoard for approval. The remuneration / compensation / commission etc. shall be subject tothe prior/post approval of the shareholders of the Company and Central Governmentwherever required.
b) The remuneration to be paid to the Whole-time Directors and shall be in accordancewith the percentage / slabs / conditions laid down in the Articles of Association of theCompany and as per the provisions of the Act.
c) Increments to the existing remuneration/ compensation structure may be recommendedby the Committee to the Board which should be within the slabs approved by theShareholders in the case of Whole-time Director. Further in case of KMP and SeniorManagement the increments shall be allowed not only on the basis of performance of theCompany alone but shall also includes various factors like individual performance vis avis individual KRA diligence in achievement of KRAs Industry trends economic situationfuture growth prospects etc
d) Where any insurance is taken by the Company on behalf of its Whole-time DirectorChief Executive Officer Chief Financial Officer the Company Secretary 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.
3.3.2. Remuneration to Whole-time / Executive / Managing Director KMP and SeniorManagement
1) Remuneration to Managing Director / Whole-time Directors:
a. The Remuneration/ Commission etc. to be paid to Managing Director / Whole-timeDirectors etc. shall be governed as per provisions of the Companies Act 2013 and rulesmade there under or any other enactment for the time being in force and the approvalsobtained from the Members of the Company. b. The Nomination and Remuneration Committeeshall make such recommendations to the Board of
Directors as it may consider appropriate with regard to remuneration to ManagingDirector / Whole-time Directors. c. Minimum Remuneration:
If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Whole-time Director in accordance with theprovisions of Schedule V of the Act and if it is not able to comply with such provisionsthe Company shall pay Remuneration with the previous approval of the Central Government.d. Provisions 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 Act or without theprior sanction of the Central Government where required he / she shall refund such sumsto the Company and until such sum is refunded hold it in trust for the Company. TheCompany shall not waive recovery of such sum refundable to it unless permitted by theCentral Government.
2. Remuneration to Non- Executive / Independent Directors:
a. The Non-Executive / Independent Directors may receive sitting fees and such otherremuneration as permissible under the provisions of Companies Act 2013. The amount ofsitting fees shall be such as may be recommended by the Nomination and RemunerationCommittee and approved by the Board of Directors.
b. All the remuneration of the Non- Executive / Independent Directors (excludingremuneration for attending meetings as prescribed under Section 197 (5) of the CompaniesAct 2013) shall be subject to ceiling/ limits as provided under Companies Act 2013 andrules made there under or any other enactment for the time being in force. The amount ofsuch remuneration shall be such as may be recommended by the Nomination and RemunerationCommittee and approved by the Board of Directors or shareholders as the case may be.
c. An Independent Director shall not be eligible to get Stock Options and also shallnot be eligible to participate in any share based payment schemes of the Company.
d. Any remuneration paid to Non- Executive / Independent Directors for servicesrendered which are of professional in nature shall not be considered as part of theremuneration for the purposes of clause (b) above if the following conditions aresatisfied:
i. The Services are rendered by such Director in his capacity as the professional; and
ii. In the opinion of the Committee the director possesses the requisite qualificationfor the practice of that profession.
e. The Nomination and Remuneration Committee of the Company shall determine the stockoptions and other share based payments to be made to Non Executive Non IndependentDirectors.
3) Remuneration to Key Managerial Personnel and Senior Management:
a) The remuneration to Key Managerial Personnel and Senior Management shall be incompliance with the applicable provisions of the Companies Act 2013 and in accordancewith the Company's Policy.
b) The Nomination and Remuneration Committee of the Company shall determine the stockoptions and other share based payments to be made to Key Managerial Personnel and SeniorManagement.
c) The Fixed pay shall include monthly remuneration employer's contribution toProvident Fund contribution to pension fund pension schemes etc. as decided from totime.
d) The Incentive pay shall be in the form of Performance Bonus and shall be decidedbased upon the balance between performance of the Company and performance of the KeyManagerial Personnel and Senior Management to be decided annually or at such intervals asmay be considered appropriate.
4. MEMBERSHIP OF COMMITTEE
4.1 The Committee shall consist of a minimum 3 non-executive directors majority ofthem being independent.
4.2 Minimum two (2) members shall constitute a quorum for the Committee meetings.
4.3 Membership of the Committee shall be disclosed in the Annual Report.
4.4 Term of the Committee shall be continued unless terminated by the Board ofDirectors.
5.1 Chairperson of the Committee shall be an Independent Director.
5.2 Chairperson of the Company may be appointed as a member of the Committee but shallnot be a Chairman of the Committee.
5.3 In the absence of the Chairperson of the Committee the members of the Committeepresent at the meeting shall choose one amongst them to act as Chairperson.
5.4 Chairman of the Nomination and Remuneration Committee meeting would be present atthe Annual General Meeting or may nominate some other member to answer the shareholders'queries.
6. FREQUENCY OF MEETINGS
The meeting of the Committee shall be held at such regular intervals as may berequired. However it shall be ensured that such minimum number of meetings of thecommittee are held as required under the Companies Act 2013 and Rules framed thereunderor under the listing Regulations.
7. COMMITTEE MEMBERS' INTERESTS
7.1 The disclosure of Interest and participation in the meetings by a member of theCommittee shall be as per the provisions of the Act and Rules made thereunder from time totime.
7.2 The Committee may invite such executives professionals consultants or experts asit considers appropriate to be present at the meetings of the Committee.
The Company Secretary of the Company shall act as Secretary of the Committee.
9.1 Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.
9.2 In the case of equality of votes the Chairman of the meeting will have a castingvote.
10. MINUTES OF COMMITTEE MEETING
Proceedings of all meetings must be minuted and signed by the Chairman of the Committeeor the chairman of the subsequent meeting. Minutes of the Committee meetings will betabled at the subsequent Board and Committee meeting.