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Kolte Patil Developers Ltd.

BSE: 532924 Sector: Infrastructure
NSE: KOLTEPATIL ISIN Code: INE094I01018
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VOLUME 6247
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Kolte Patil Developers Ltd. (KOLTEPATIL) - Director Report

Company director report

Your Directors have the pleasure in presenting 28th Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended 31 March 2019.Despite the regulatory and other hurdles faced witnessed by the real estate industry dueto introduction of RERA and other changes your Company has foreseen these issues andimplemented strategies to ensure that the Company is able to maintain its growth.

1. Financial highlights

(Rs. in Lakhs)

Particulars Consolidated Standalone
2018-19 2017-18 2018-19 2017-18
Revenue from Operations 86929 140272 46209 67110
Other Income 1107 1447 5427 4027
Total Income 88036 141719 51636 71137
Operating Profit before interest depreciation amortization and taxes (EBITDA) 25816 31689 15124 20978
Depreciation and amortization 1494 1536 610 645
Interest and finance charges 9199 9870 3759 4781
Profit Before Tax (PBT) 15123 20283 10755 15552
Tax expenses 5182 4926 2816 5061
Profit After Tax (PAT) 9941 15357 7939 10491
Add: Other Comprehensive Income 32 39 11 16
Total Comprehensive Income before Non-Controlling 9973 15396 7950 10507
Interest
Less: Non-Controlling Interest 2408 3217 - -
Profit after other Comprehensive Income 7565 12179 7950 10507
Earnings Per share (in H) 9.95 16.03 10.47 13.84

2. Performance of the Company

The key highlights of the Company's performance is as under:

Financial Overview (Consolidated Performance)

Our revenues were decreased by 38.03% at Rs.86929 lakhs during the year compared toRs.140272 lakhs in the previous year. Expenses (excluding Finance cost) decreased by34.06% to Rs.115346 lakhs from Rs.174931 lakhs in the previous year. Earnings BeforeInterest Taxes and Depreciation was decreased by 18.53% at Rs.25816 lakhs as compared toRs.31689 lakhs. EBITDA margins increased from 22.59% to 29.70% during the year. TotalComprehensive Income (post minority interest) decreased by 37.88% at Rs.7565 lakhscompared to Rs.12179 lakhs in the previous year. Earnings Per Share stood at Rs.9.95 ascompared to Rs.16.03 last year. Dividend of Rs.1 per share amounting to a payout of10.02% of the year's profits has been recommended by the Board of Directors.

The Ministry of Corporate Affairs ("MCA") on 28 March 2018 notified Ind AS115 revenue from contract with Customers with effect from 1 April 2018. The Company hasapplied the modified retrospective approach under Ind AS 115 to contracts that were notcompleted as at 1 April 2018 and the cumulative effect of applying this standard isrecognised at the date of initial application i.e. 1 April 2018 in accordance with Ind AS115 as an adjustment to opening balance of retained earnings. The transitional adjustmentof Rs.21214 lakhs (net of deferred tax) has been adjusted against opening balance ofretained earnings in accordance with the requirements of Ind AS 115 based on performanceobligation satisfied at a point in time. On account of the application of Ind AS 115 forthe year ended 31 March 2019 revenue from operations cost of services construction andland profit before tax and profit after tax are (lower)/higher by Rs.(32546) lakhsRs.(27112) lakhs Rs.(5434) lakhs and Rs.(3344) lakhs respectively as compared to therespective amounts that would have been reported if the replaced revenue recognitionprinciples were applicable. Consequently Earnings per share (basic and diluted) arereported (lower)/higher by Rs.(6.80) per share for the year ended 31 March 2019.Undermodified retrospective approach the comparatives for the previous year figures are notrequired to be restated and hence are not comparable.

Financial Overview (Standalone Performance)

Our revenues in 2018-19 decreased by 31.14% during the year at Rs.46209 lakhs comparedto Rs.67110 lakhs in the previous year. Earnings Before Interest Taxes and Depreciationdecreased by 27.91% at Rs.15124 lakhs as compared to Rs.20978 lakhs in the previousyear. EBITDA margins increased from 31.26% to 32.73% during the year. Profit withcomprehensive income after Tax was decreased by 24.34% at Rs.7950 lakhs compared toRs.10507 lakhs in the previous year. Earnings per Share decreased during the year atRs.10.47 as compared to Rs.13.84.

On account of application of Ind AS 115 as mentioned above the transitional adjustmentof Rs.15786 lakhs [net of deferred tax] has been adjusted against opening balance ofretained earnings in accordance with the requirements of Ind AS 115 based on performanceobligation satisfied at a point in time.

On account of the application of Ind AS 115 for the year ended 31 March 2019 revenuefrom operations cost of services construction and land profit before tax profit aftertax are higher/(lower) by Rs.(25263) lakhs Rs.(18702) lakhs Rs.(6561) lakhsRs.(4269) lakhs respectively as compared to the respective amounts that would have beenreported if the replaced revenue recognition principles were applicable.

Consequently Earnings per share basic are reported higher/ (lower) by Rs.(5.63) pershare for the year ended 31 March 2019 and Earnings per share diluted are reportedhigher/(lower) by Rs.(5.59) per share for the year ended 31 March 2019.

Under modified retrospective approach the comparatives for the previous period figuresare not required to be restated and hence are not comparable.

3. Dividend

The Company declared and paid an Interim Dividend for the financial year 2018-19 ofH1.40 per equity share on 75814909 equity shares of Rs.10 each and the Board of Directorsin their meeting held on 28 May 2019 recommended a Final Dividend of Rs.1 per equity shareon 75814909 equity shares of Rs.10 each

4. Fixed Deposits

During the year under review the Company has not accepted any fixed deposits under theprovisions of the Companies Act 2013.

5. Share Capital

The paid-up Equity Share Capital as on 31 March 2019 stood at Rs.7581.49 Lakhs.

During the year under review 16500 Equity Shares have been issued under EmployeeStock Option Scheme and the Company has not issued any shares with differential votingrights nor sweat equity.

During the year the Company granted 379000 stock options to senior employees of theCompany. For details of stock options granted refer Annexure VI of the Directors' Report.

During the year under review the Company reclassified its authorized share capitalfrom Rs.1494500000 (Rupees One Hundred Forty Nine Crores and Forty Five Lakhs) dividedto 149450000 Equity Shares of Rs.10 each to Rs.1494500000 (Rupees One Hundred FortyNine Crores and Forty Five Lakhs) divided into 79450000 Equity Shares of Rs.10 each and70000000 Redeemable Preference Shares of Rs.10 each and the approval of shareholderswas obtained through postal ballot for the same.

Further the Company increased its authorized share capital from Rs.1494500000(Rupees One Hundred Forty Nine Crores and Forty Five Lakhs) to Rs.1900000000/- (RupeesOne Hundred Ninety Crores) divided into 100000000 Equity Shares of Rs.10 each and90000000 Redeemable Preference Shares of Rs.10 each and the approval of shareholderswas obtained through postal ballot for the same.

6. Internal Financial Controls

The Company has adequate internal controls and processes in place with respect to itsfinancial statements which provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements. These controls andprocesses are driven through various policies procedures and certifications. TheManagement has periodically conducted the assessment of internal financial controls fordetermining operative effectiveness and the control were operating effectively. Theinternal financial controls were also reviewed by an Independent Auditor and found to beadequate and operating effectively for ensuring accuracy and completeness of theaccounting records. No reportable material weaknesses were observed. The report ofIndependent Auditor is annexed to the Auditors' Report on Financial Statements.

7. Details of Subsidiary/Joint Ventures/Associate Companies

The Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures in Form AOC - 1 is annexed as Annexure Ito the Directors' report.

8. Directors and Key Managerial Personnel

Pursuant to Section 152 of the Companies Act 2013 read with Article 167 of theArticles of Association of the Company Mr. Naresh Patil – Vice Chairman (DIN:00881077) will retire by rotation and being eligible offered himself for re-appointmentat this ensuing Annual General Meeting.

During the year under review there is no change in Board of Director nor KeyManagerial Personnel.

The Board of Directors in their meeting held on 28 May 2019 has considered andrecommended the re-appointment of the following directors subject to the approval ofmembers in the ensuing Annual General Meeting :

i) Mr. Rajesh Patil as Chairman and Managing Director (DIN:00381866) for a period of 5years from 15 April 2020

ii) Mr. Naresh Patil as Vice Chairman (DIN: 0088077) for a period of 5 years from 15April 2020

iii) Mr. Milind Kolte (DIN: 00170760) as Executive Director for a period of 5 yearsfrom 15 April 2020

iv) Mr. Prakash Gurav as Independent Director (DIN: 02004317) for a period of 5 yearsfrom 13 September 2019

v) Mr. Jayant Pendse as Independent Director (DIN: 02434630) for a period of 5 yearsfrom 13 September 2019

vi) Mr. G L Vishwanath as Independent Director (DIN: 01758785) for a period of 5 yearsfrom 13 September 2019

vii) Mrs. Manasa Vishwanath as Independent Director (DIN: 05241229) for a period of 5years from 13 September 2019

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of the non-executive directors and executive directors. The Board has carriedout an annual evaluation of its own performance various committees and individualdirectors.

The Board members are provided with necessary documents reports and policies to enablethem to familiarise with the Company's procedures and practices. Periodic presentationsare made at the Board and Committee Meetings on business and performance up. The detailsof such familiarization programmes for Independent Directors are posted on the website ofthe Company and can be accessed at http://www.koltepatil.com/investors/corporate-governance.

The Policy for selection of Directors and determining Directors independence andRemuneration Policy for Directors Key Managerial Personnel and other employees is annexedas Annexure II to this Report.

9. Meetings of the Board of Directors

Eight (8) Board Meetings were held during the year and the gap between two meetings didnot exceed four months. The dates on which the board meeting were held as follows:

(1) 23 May 2018

(2) 29 May 2018

(3) 14 August 2018

(4) 26 October 2018

(5) 30 January 2019

(6) 12 February 2019

(7) 02 March 2019 and

(8) 31 March 2019.

10. Statutory Auditors

M/s. Deloitte Haskins & Sells LLP (LLP Registration No. AAB-8737 FRN –117366W/ W-100018) Chartered Accountants Pune were appointed as statutory auditors tillthe Annual General Meeting (AGM) to be held in the year 2023.

11. Contracts or arrangements with related parties

During the year under review all transactions/arrangements entered by the Company withrelated parties were in the ordinary course of business and on an arm's length basis.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://www.koltepatil.com/investors/corporate-governance.

The details of all transactions/arrangement with related party are given in the NoteNo.43 in Notes to Accounts forming part of the Audited Standalone Financial Statement.

12. Conservation of energy technology absorption and foreign exchange earnings andoutgo

As the Company is not engaged in the manufacturing activities the information relatedto Conservation of energy technology absorption has not be provided.

The details of Foreign Exchange outgo are as follows:

Particulars For Year ended 31 March 2019 For Year ended 31 March 2018
Salary - 13
Travelling Expenses 116 24
Professional Fees - 3
Advertising Expenses - 1
Purchase of sanitary wares - 36
Total 116 77

13. Particulars of loans guarantees and investments

The particulars of loans guarantees and investments are given in Note No. 59 and 32in Notes to accounts forming part of the Audited Financial Statements.

14. Extract of the annual return

Pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Managementand administration) Rules 2014 the extract of the annual return in Form No. MGT – 9as provided in Annexure III form part of the Board's report.

15. Corporate Social Responsibility (CSR)

In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has established CorporateSocial Responsibility (CSR) Committee and Report on CSR Activities forms part of thisReport as Annexure IV.

16. Audit Committee

The Audit Committee of the Company comprises following members:

Name of the Member Designation Category
Mr. Prakash Gurav Chairman Independent Director
Mr. Jayant Pendse Member Independent Director
Mr. G L Vishwanath Member Independent Director
Mrs. Manasa Vishwanath Member Independent Director
Mr. Umesh Joshi Member Independent Director
Mr. Milind Kolte Member Executive Director

Mr. Vinod Patil Company Secretary of the Company acts as the secretary to the AuditCommittee and the Managing Director and the Chief Financial Officer of the Company arepermanent invitees to the Audit Committee Meetings.

The Board has accepted all the recommendations of the Audit Committee.

17. Vigil mechanism for directors and employees

The Vigil Mechanism of the Company which also incorporates a whistle blower policy inRegulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 includes an Ethics & Compliance Task Force comprising senior executives of theCompany. Protected disclosures can be made by a whistle blower through an e-mail ordedicated telephone line or a letter to the Task Force or to the Chairman of the AuditCommittee.

The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. To maintain these standards the Company encourages itsemployees who have concerns about suspected misconduct whether by the Directorsemployees vendors or customers and to come forward and express these concerns withoutfear of punishment or unfair treatment. The report received from employees will bereviewed by Audit Committee. The Directors and Management Personnel are obligated tomaintain confidentiality of such reporting and ensure that the whistle blowers are notsubjected to any discriminatory practices. No person has been denied access to the AuditCommittee.

The said policy can be accessed at http://www.koltepatil.com/investors/corporate-governance.

18. Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Company comprises following members

Name of the Member Designation Category
Mr. Jayant Pendse Chairman Independent Director
Mr. Prakash Gurav Member Independent Director
Mr. G. L. Vishwanath Member Independent Director
Mrs. Manasa Vishwanath Member Independent Director
Mr. Umesh Joshi Member Independent Director
Mrs. Sunita Kolte Member Non-Executive Director

19. Managerial Remuneration

The Details required as per Rule 5(1) and (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given in Annexure V to the Directorsreport.

20. Employee Stock Option Scheme

The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the Employees' Stock Option Scheme of the Company inaccordance with the applicable SEBI Guidelines.

The applicable disclosures as stipulated under the SEBI Guidelines as on 31 March 2019(cumulative position) with regard to the Employees' Stock Option Scheme (ESOS) areprovided in Annexure VI to this Report.

21. Secretarial Audit Report

Pursuant to Section 204 of the Companies Act 2013 the Company had appointed M/s. SVD& Associates Company Secretaries Pune as its Secretarial Auditors to conduct thesecretarial audit of the Company for the Financial Year 2018-19. The Report of SecretarialAuditor for the Financial Year 2018-19 is annexed to this report as Annexure VII.

The comments of the Board on observations of the Secretarial Auditors are as follows :-

(1) There was inadvertently delay in submission of prior intimation of date of BoardMeeting to the stock exchanges and the Company has paid fine to stock exchanges in thisregards.

(2) Inadvertently the link of the website of the company and stock exchanges was notgiven in the newspaper advertisement in future the Company will adhere to comply with thesame.

(3) The Company will file the amended Memorandum and Articles of Association in duecourse.

(4) There was inadvertently delay with respect to IEPF notice to shareholdersnewspaper publication and filing corporate action with Depositories the Company willensure the timely compliance.

The Company does not have any material subsidiary hence the secretarial audit reportof material subsidiary is not applicable.

22. Secretarial Standards

The Institute of Company Secretaries of India had revised the Secretarial Standards onMeetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings(SS-2) with effect from 01 October 2017. The Company is in compliance with the revisedsecretarial standards.

23. Corporate Governance Certificate

Report on Corporate Governance for the Financial Year 2018-19 as stipulated under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is presented in aseparate section forming part of the Annual Report.

The Company has obtained the Compliance certificate for the Financial Year 2018-19 fromthe Statutory Auditors i.e. M/s. Deloitte Haskins & Sells LLP for the compliance ofconditions of corporate governance as stipulated in Regulation 34 (3) read with Part E ofSchedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

24. Risk management policy

The Company has constituted Risk Management Committee comprising 6 members in which 3members are Independent Directors. The Risk Management Committee has approved the RiskManagement Policy. The Committee monitors the policy ensures that the Company is actingappropriately to achieve prudent balance between the risk and reward and evaluatessignificant risk exposures and assesses the management's actions to mitigate theexposures.

25. Directors' Responsibility Statement

Your Directors state that:

a) in the preparation of the annual accounts for the year ended 31 March 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgements 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 31 March 2019 and of the profit ofthe Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a ‘going concern' basis;

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

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

26. Management's Discussion And Analysis Report

Management's Discussion and Analysis Report for the year under review as stipulated inRegulation 34 (2) (e) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is presented in a separate section forming part of the Annual Report.

27. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013

The Company has adopted a policy on prevention and redressal of Sexual Harassment atworkplace. Pursuant to the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has in place an InternalComplaints Committee for prevention and redressal of complaints of sexual harassment ofwomen at the workplace.

Status of Complaints received during the year under review:

Received during the year Resolved Pending at the year end
2 2 0

28. Credit Rating

The Company has obtained credit rating as A+/Positive for the bank facilities of Rs.600Crores from CRISIL.

29. Acknowledgements

Your Directors take this opportunity to thank customers vendors stakeholders Centraland State Governments business associates and bankers for their consistent support andco-operation to the Company. Your Directors take this opportunity to thank all theemployees who have helped for sustained excellence in performance of the Company.

Finally the Directors would like to convey their gratitude to the members for reposingtheir confidence and faith in the Company and its management.

For and on behalf of the Board of Directors
Rajesh Patil
Date: 28 May 2019 Chairman and Managing Director
Place: Pune DIN 00381866

Annexure I

Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)

Statement containing salient features of the Financial Statement ofSubsidiaries/Associate Companies/Joint Ventures

PART A: Subsidiaries

(Rs. in Lakhs)

Sr. No. 1 2 3 4 5 6 7 8 9 10
Name of the subsidiary Kolte-Patil Real Estate Private Limited Bellflower Properties Private Limited Tuscan Real Estate Private Limited Snowflower Properties Private Limited Regenesis Facility Management Company Private Limited Sylvan Acres Realty Private Limited Kolte-Patil Redevelopment Private Limited (Formerly known as PNP Retail Private Limited) PNP Agrotech Private Limited Anisha Lifespaces Private Limited Kolte-Patil Global Private Limited
The date Since when subsidiary was acquired 28 March 2008 31 March 2009 31 December 2006 21 March 2011 02 February 2009 22 May 2006 18 February 2010 30 March 2012 04 January 2019 31 July 2018
Reporting period for the subsidiary concerned if different from the holding company's reporting period 31 March 2019 31 March 2019 31 March 2019 31 March 2019 31 March 2019 31 March 2019 31 March 2019 31 March 2019 31 March 2019 31 March 2019
Share capital 1374 100 100 5 2 375 1968 933 1 202
Reserves & surplus 6594 2764 2756 2942 168 699 (1828) (555) (1) -
Total assets 18289 3034 4271 14190 213 1075 723 1232 5 202
Total Liabilities (excluding Share capital and Reserves & Surplus) 10320 169 1416 11243 43 1 583 854 5 -
Investments - - - - - - - - - -
Turnover 9589 357 2397 2099 259 - 188 176 - -
Profit before taxation 3587 (128) 645 (667) 61 (3) (159) (158) (1) -
Provision for taxation 1044 43 60 (282) 15 0 (29) - - -
Profit after taxation before comprehensive Income 2543 (171) 584 (385) 46 (3) (129) (158) (1) -
Profit after taxation after Comprehensive Income 2548 (171) 588 (380) 46 (3) (129) (158) (1) -
Proposed Dividend - - - - - - - - - -
Extent of shareholding (in percentage) 100.00% 100.00% 51.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Part B: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures

(Rs. in Lakhs)
Name of associates/Joint Ventures Kolte-Patil I-Ven Townships (Pune) Limited $
1. Latest audited Balance Sheet Date 31 March 2019
2. Date on which the Associate or Joint Venture qas associated or acquired 15 February 2013
3. Shares of Associate/ Joint Ventures held by the company on the year end
No. of shares 4500000
Amount of Investment in Associates/Joint Venture 450.00
Extend of Holding (in percentage) 45%
4. Description of how there is significant influence As per the Joint Venture Agreement there is significant influence.
5. Reason why the associate/joint venture is not consolidated N.A.
6. Net worth attributable to shareholding as per latest audited Balance Sheet (7943)
7. Profit/Loss for the year 1669
i. Considered in Consolidation* 751
ii. Not Considered in Consolidation -

$ Considered as a subsidiary in the Ind AS Financial Statements based on controlassessment carried out under Ind AS.

* Represents our share of attributable Profit/Loss

ANNEXURE II

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS INDEPENDENCE ANDREMUNERATION POLICY FOR DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

PREAMBLE

OVERVIEW UNDER COMPANIES ACT 2013

{Section 178 & Companies (Meetings of Board and its Powers) Rules 2014}

Constitution of the Nomination and Remuneration Committee consisting of three or morenon-executive directors out of which not less than one-half shall be independent directors

The Nomination and Remuneration Committee shall identify persons who are qualified tobecome directors and recommend to the Board their appointment and removal and shall carryout evaluation of every director's performance.

The Nomination and Remuneration Committee shall formulate the criteria for determiningqualification attributes and independence of a director and recommend to the Board apolicy relating to the appointment of directors remuneration for the directors keymanagerial personnel and senior management personnel i.e. employees at one level below theBoard including functional heads (the "Policy").

The Nomination and Remuneration Committee shall while formulating the Policy ensurethat:

• The level and composition of remuneration is reasonable and sufficient toattract retain and motivate directors of the quality required to run the Companysuccessfully;

• Relationship of remuneration to performance is clear and meets appropriateperformance benchmark set out by the Company; and

• Remuneration to directors key managerial personnel and senior managementinvolves a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the company and its goals.

• Such policy shall be disclosed in the Board's report.

OVERVIEW OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENT) REGULATIONS 2015

The Company shall set up a Nomination and Remuneration committee which shall compriseat least three directors all of whom shall be non-executive directors and at least halfshall be independent. Chairman of the committee shall be an independent director.

The role of the committee shall inter-alia include the following:

Formulation of the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration of the directors key managerial personnel and other employees;

Formulation of criteria for evaluation of Independent Directors and the Board;

Devising a policy on Board diversity;

Identifying persons who are qualified to become directors and who may be appointed insenior management in accordance with the criteria laid down and recommend to the Boardtheir appointment and removal. The company shall disclose the remuneration policy and theevaluation criteria in its Annual Report.

PRESENT POSITION OF DIRECTORS& KEY MANAGERIAL PERSONNEL OF THE COMPANY

The Company has constituted a Nomination and Remuneration Committee of the Board ofDirectors (Board).

At present there are total ten directors on the Board of which three (3) are ExecutiveDirectors and two (2) are Non - Executive and non-Independent and five (5) areNon-Executive Independent.

Key Managerial Personnel (KMP) consists of Chairman and Managing Director ViceChairman Executive Directors Chief Executive Officer Chief Financial Officer andCompany Secretary.

COMPOSITION OF NOMINATION AND REMUNERATION COMMITTEE

Name of the Member Designation Category
Mr. Jayant Pendse Chairman Independent Director
Mr. Prakash Gurav Member Independent Director
Mr. G. L. Vishwanath Member Independent Director
Mr. Umesh Joshi Member Independent Director
Mrs. Manasa Vishwanath Member Independent Director
Mrs. Sunita Kolte Member Non-Executive Director

TERMS OF REFERENCE TO NOMINATION AND REMUNERATION COMMITTEE

• To recommend to the Board the appointment reappointment of DirectorsExecutive Directors and Key Managerial Personnel and determination fixation of theremuneration and revision in the remuneration payable to the Executive Directors of theCompany and removal of the director/Executive Director/Key Managerial Personnel;

• To formulate the criteria for determining qualifications positive attributesand independence of the director;

• To recommend the Board the policy related to the remuneration of for DirectorsKey Managerial Personnel and other employees;

• To carry out evaluation performance of every Director of the Company; and

• To formulate and recommend to the Board the policy relating to the stock optionsto the employees grant the stock options to the eligible employees and review themanagement of stock option scheme.

CRITERIA FOR DETERMINING THE FOLLOWING:-

Qualifications for appointment of Directors (including Independent Directors):

• Person of eminence standing and knowledge with significant achievements inbusiness professions and/ or public service.

• His / her financial or business literacy/skills.

• Appropriate other qualification/experience to meet the objectives of theCompany.

• As per the applicable provisions of Companies Act 2013 Rules made thereunderand Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Nomination and Remuneration Committee shall have discretion to consider and fixany other criteria or norms for selection of the most suitable candidate/s.

Attributes of Directors (including Independent Directors):

• Demonstrate integrity credibility trustworthiness ability to handle conflictconstructively and the willingness to address issues proactively.

• Actively update their knowledge and skills with the latest developments inmarket conditions and applicable legal provisions.

• Willingness to devote sufficient time and attention to the Company's businessand discharge their responsibilities

• Assist in bringing independent judgment to bear on the Board's deliberationsespecially on issues of strategy performance risk management resources keyappointments and standards of conduct and ability to develop a good working relationshipwith other Board members and contribute to the Board's working relationship with thesenior management of the Company.

• Act within their authority assist in protecting the legitimate interests of theCompany its shareholders and employees

• Any other attributes as maybe required under the Companies Act 2013 read withthe Rules made there under along with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended from time to time.

Criteria for appointment of KMP/Senior Management:

• Possess the required qualifications experience skills & expertise toeffectively discharge their duties and responsibilities;

• Practice and encourage professionalism and transparent working environment;

• Build teams and carry the team members along for achieving the goals/objectivesand corporate mission;

• Strictly adhere to the code of conduct and any other policies as maybe set outby the Company from time to time; and

• Act at all times in the interest of the Company while discharging their duty.

POLICY RELATING TO REMUNERATION OF DIRECTORS KMP & SENIOR MANAGEMENT PERSONNEL:

• To ensure that the level and components of remuneration is reasonable andsufficient to attract retain and motivate Directors KMP and other employees of thequality required to run the Company successfully.

• No director/Key Managers of Personnel/ other employee shall be involved indeciding his or her own remuneration.

• The trend prevalent in the industry nature and size of business is kept in viewand given due weight age to arrive at a competitive quantum of remuneration.

• It is to be ensured that relationship of remuneration to the performance isclear and meets appropriate performance benchmarks which are unambiguously laid down andcommunicated from time to time.

• Improved performance should be rewarded by increase in remuneration and suitableauthority for value addition in future.

• Remuneration packages should strike a balance between fixed and incentive paywhere applicable reflecting short and long term performance objectives appropriate to theCompany's working and goals.

• Other criteria are also to be considered such as responsibilities and duties;time & effort devoted; value addition; profitability of the Company & growth ofits business; analyzing each and every position and skills for fixing the remunerationyardstick; standard for certain functions where there is a scarcity of qualifiedresources; ensuring tax efficient remuneration structures; ensuring that remunerationstructure is simple and that the cost to the Company (CTC) is not shown inflated and theeffective take home remuneration is not low.

• Consistent application of remuneration parameters across the organisation.

• Provisions of law with regard making payment of remuneration as may beapplicable are complied.

REVIEW

The policy shall be reviewed by the Nomination & Remuneration Committee and theBoard from time to time as may be necessary.

.