Your Directors present the 15th Annual Report and the audited financial statement for the financial year ended March 31 2019. Pursuant to the Order dated 15th May 2018 of the Hon'ble National Company Law Tribunal - Mumbai Bench at Mumbai (NCLT Order) Corporate Insolvency Resolution Process (CIR Process) has been initiated for the Company in accordance with the provisions of the Insolvency and Bankruptcy Code 2016 (Code) and related rules and regulations issued thereunder with effect from 15th May 2018. (Corporate Insolvency Resolution Process Commencement Date). Mr. Pardeep Kumar Sethi was appointed as Interim Resolution Professional (IRP) in terms of the NCLT Order. Subsequently pursuant to the Order dated 30th May 2018 of the Hon'ble National Company Law Appellate Tribunal (NCLAT Order) stayed NCLT Order refereed above. Hon'ble NCLAT vide its Order dated 30th April 2019 vacated the stay on NCLT Order and referred the matter back to NCLT Mumbai Bench.
As per Order passed on 7th May 2019 CIR Process was revived against the Company w.e.f. 30th April 2019. The powers of Board of Directors of the Company stand suspended effective from the CIR Process commencement date and such powers along with the management of affairs of the Company are vested with the IRP.
The financial results of the Company for the year ended March 31 2019 is summarised below:
|Particulars ||Financial Year ended March 31 2019||* Financial Year ended March 31 2018|
|Rs. in crore||US$ in million**||Rs. in crore||US$ in million**|
|Gross profit /(Loss) before depreciation Amortisation and exceptional items||(30)||(4)||264||41|
|Depreciation and amortization||277||40||200||31|
|Profit/ (Loss) before Exceptional items and Tax||(307)||(44)||64||10|
|Profit on Fair Value of Investments||8964||1296||-||-|
|Profit/ (Loss) before Tax||8657||1252||64||10|
|Current tax / Excess provision for Tax of earlier years||-||-||1||0.15|
|Deferred Tax charge/ (credit)||3558||515||-||-|
|Profit / (Loss) after tax||5099||737||63||10|
|Profit / (Loss) after tax from Discontinued Operations||(2252)||(325)||(9933)||(1524)|
|Other Comprehensive Income|
|Re-measurement Gain/ (Loss) of defined benefit plans (Net of tax)||-||-||3||(0.46)|
|Total Comprehensive Income||2847||412||(9867)||(1514)|
|Add : Balance brought forward from previous year||(17030)||(2463)||(7163)||(1099)|
|Profit available for appropriation||-||-||-||-|
|Balance carried to Balance Sheet||(14183)||(2051)||(17030)||(2613)|
*Figures of previous year have been regrouped and reclassified wherever required.
** Exchange Rate Rs. 69.155 = US$ 1 as on March 31 2019 (Rs. 65.175 = US$ 1 as on March 31 2018).
During the year under review your Company has earned from Continuing Operations income of Rs. 1465 crore against Rs. 2231 crore in the previous year. The Company has incurred an operational loss of Rs. 2559 crore (including loss from discontinuation of wireless business of Rs. 2252 crore) and including fair valuation of investment net of deferred tax charge there is a profit of Rs. 2847 crore for the year as compared to loss of Rs. 9867 crore in the previous year. The performance and financial position of the subsidiary companies and associate companies are included in the consolidated financial statement of the Company and presented in the Management Discussion and Analysis Report forming part of this Annual Report.
In view of ongoing CIR Process vide order dated 7th May 2019 of Hon'able NCLT Mumbai Bench the matter was not considered.
The Company's Dividend distribution Policy is annexed to this Report as Annexure A.
The Company together with its subsidiary Global Cloud Xchange Limited (GCX) is a leading global communications services provider with businesses including a vast global subsea network; a global on-net Cloud ecosystem; extensive India and global enterprise business; Internet Data Center Business (IDC) and India National Long Distance Business (NLD).
The Company specializes in Enterprise telecommunications service provider and is at the forefront of enabling digital revolution across India and globally with focus on the Emerging Markets of Asia Pacific and the Middle East. The Company continues to build on its global platform designed to power the future digital ecosystem. Based on one of the most extensive subsea and terrestrial fiber optic networks in the world and a global services platform the Company is putting together the very fabric that will deliver the next generation of applications and services to Enterprises Carriers OTTs and government entities.
Scheme of Arrangement
The Board had approved the Scheme of Arrangement for demerger of Wireless Undertaking of Reliance Telecom Limited a wholly owned subsidiary company into the Company on June 24 2016. The Hon'ble High Court of Judicature at Bombay had sanctioned the said Scheme on October 27 2016. The Company has applied to the Department of Telecommunications (DoT) for its approval to the Scheme which is condition precedent before giving effect to the Scheme. The Scheme would be made effective upon receiving the approval of the DoT. Reliance Telecom Limited is also under CIR Process.
Debt Restructuring Plan and Asset Monetisation
The Board of Directors reviewed the progress of the Company's debt resolution plans since the invocation of SDR on 2nd June 2017 at its meeting held on 1st February 2019. The Board noted that despite the passage of over 18 months lenders have received zero proceeds from the proposed asset monetization plans and the overall debt resolution process is yet to make any headway. This unfortunate outcome is attributable to lack of 100% approvals and consensus as mandated by RBI's 12th February 2018 circular pendency of numerous legal issues at High Courts TDSAT and Supreme Court impeding progress at various stages. Accordingly the Board decided that the Company will seek fast track resolution through NCLT Mumbai. The Board believes this course of action will be in the best interests of all stakeholders ensuring comprehensive debt resolution in a final transparent and time bound manner within the prescribed 270 days. As per NCLT Order passed on 7th May 2019 CIR Process was revived against the Company w.e.f. 30th April 2019.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
Non Convertible Debentures
During the year under review the Company has not issued any Non-Convertible Debentures (`NCD'). NCD issued during the earlier years matured for final redemption during the year under review but remains unpaid.
The Company has never accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act 2013 (the Act) and the Companies (Acceptance of Deposits) Rules 2014.
Particulars of Investments
Pursuant to the provisions of Section 186 of the Act the details of the Investments made by the Company are provided in the unabridged standalone financial statement under Notes No. 2.03 and 2.08.
Subsidiary and Associate Companies
The performance and financial position of the major subsidiary companies are presented in Management Discussion and Analysis Report forming part of this Annual Report. Also a report on the performance and financial position of each of the subsidiary companies and associate companies as per the Act is provided in the consolidated financial statement. The Policy for determining material subsidiary companies can be accessed on the Company's website at the link http://www.rcom.co.in/Rcom/about-us/ investor-relations/corporate-governance.html.
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year ended March 31 2019 incorporating the results of the operations of all subsidiary companies and associate companies have been prepared in accordance with Indian Accounting Standard (Ind AS) - 110 on `Consolidated Financial Statement' read with Ind AS-28 on `Investments in Associates and Joint Ventures' notified under the Act read with the Accounting Standards Rules as applicable and same is in compliance with the Companies Act 2013.
During the year under review there is no change in the Board of Directors of the Company.
In terms of the provisions of the Companies Act 2013 Shri Punit Garg Director of the Company retires by rotation and being eligible offers himself for reappointment at the ensuing AGM. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and Listing Regulations.
The details of programme for familiarization of Independent Directors with the Company nature of the industry in which the Company operates and related matters are placed on the website of the Company at the link http://www.rcom.co.in/ Rcom/about-us/investor-relations/corporate-governance.html.
Key Managerial Personnel
Shri Punit Garg ceased to be Executive Director of the Company w.e.f. 5th April 2019 however he will be continuing as a Non Executive Director of the Company. Shri Manikantan V is Director and Chief Financial Officer (CFO) of the Company and Shri Prakash Shenoy is Company Secretary of the Company. Except as mentioned above there was no change in the Key Managerial Personnel of the Company.
Evaluation of Directors Board and Committees
The Nomination and Remuneration Committee (NRC) of the Company has devised a policy for performance evaluation of the individual directors Board and its Committees which includes criteria for performance evaluation.
Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulations the Board has carried out an annual performance evaluation of its own performance the directors individually as well as the evaluation of the working of the Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure effectiveness of Board / Committee processes and information provided to the Board etc. A separate meeting of the Independent Directors was also held during the financial year for the evaluation of the performance of non-independent Directors performance of the Board as a whole and that of the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of the individual Directors based on their knowledge level of preparation and effective participation in meetings understanding of their roles as directors etc.
Policy on appointment and remuneration for Directors Key Managerial Personnel and Senior Management Employees
The Nomination and Remuneration Committee of the Board has devised a policy for selection appointment and remuneration of Directors Key Managerial Personnel and Senior Management Employees. The Committee has formulated the criteria for determining qualifications positive attributes and independence of a Director which has been put up on the Company's website at http://www.rcom.co.in/investorrelations and also is attached as Annexure - B.
Directors' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors' Responsibility Statement it is hereby confirmed that:
i In preparation of the annual accounts for the financial year ended March 31 2019 the applicable Accounting Standards had been followed along with proper explanation relating to material departures if any;
ii The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31 2019 and of the profit of the Company for the year ended on that date;
iii The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv The Directors had prepared the annual accounts for the financial year ended March 31 2019 on a `going concern' basis;
v The Directors had laid down internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively and
vi The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into by the Company during the financial year under review with related parties were on an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters Directors Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
During the year the Company had not entered in to any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at the link http://www.rcom.co.in/Rcom/ about-us/investor-relations/corporate-governance.html. None of the Directors has any pecuniary relationships or transactions vis--vis the Company.
There are no transactions entered by the Company with persons / entities as mentioned in Regulation 34 (3) and 53 (f) in Schedule V A 2A of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Material Changes and Commitments if any affecting the financial position of the Company
Except as disclosed in this report there were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year Five Board Meetings were held details of which are given in the Corporate Governance Report forming part of this report.
The Audit Committee of the Board consists of Independent Directors namely Smt. Manjari Kacker Chairperson R. N. Bhardwaj Shri A. K. Purwar Prof. J. Ramachandran Shri Deepak Shourie Smt. Ryna Karani Smt. Chhaya Virani and Non Independent Directors Shri Punit Garg Shri Manikantan V as members. During the year all the recommendations made by the Audit Committee were accepted by the Board.
On April 1 2019 Shri A.K. Purwar resigned from being a member of the Audit Committee of the Company.
Auditors and Auditors' Report
At the 12th Annual General Meeting (AGM) held on September 27 2016 M/s. Pathak H.D. & Associates Chartered Accountants were appointed as the statutory auditors of the Company to hold office till the conclusion of the 17th AGM. Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules 2014 M/s. Pathak H.D. & Associates Chartered Accountants the Statutory Auditors of the Company have been appointed as Auditors for a term of 5 years. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company.
The Auditors in their report to the members have given a qualified opinion and the response of the Company with respect to it is as follows: Considering various factors including admission of the Company to debt resolution process under the IBC with effect from May 15 2018 and pursuant to the commencement of Corporate Insolvency Resolution (CIR) Process of the Company under Insolvency and Bankruptcy Code 2016 (IBC) there are various claims submitted by the operational creditors the financial creditors employees and other creditors. The overall obligations and liabilities including obligation for interest on loans and the principal rupee amount in respect of loans including foreign currency denominated loans shall be determined during the CIR Process. Further prior to May 15 2018 the Company was under Strategic Debt Restructuring (SDR) and asset monetization and debt resolution plan was being worked out. The Company has not provided Interest of Rs..3907 crore (Rs. 4389 crore in case of consolidated) calculated based on basic rate of interest as per terms of loan and foreign exchange variation of Rs. 803 crore (Rs. 984 crore in case of consolidated)loss for year ended March 31 2019 as the impact is not ascertainable. Had the Company provided Interest and foreign exchange variance the Loss would have been higher by Rs. 4710 crore for the year ended March 31 2019 (Rs. 5373 crore in case of consolidated).
Also on finalisation and implementation of debt resolution process through Hon'ble NCLT the Company will carry out a comprehensive impairment review of its Tangible and Intangible assets Assets held for Sale investments and other assets including credits relating to Goods and Service Tax and Tax Deducted at source which the Company is in the process of reconciling and the impact is not ascertainable.
The observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory particularly Note No. 2.32 and 2.49 (standalone financials) and Note No. 2.53 and 2.36 (consolidated financials) and hence the same to be treated as explanation provided under Section 134 of the Act.
The audited financial statement are drawn up both on standalone and consolidated basis for the financial year ended March 31 2019 in accordance with the requirements of the Ind-AS Rules. As per the provisions of Clause (ca) of Sub-section (3) of Section 134 of the Companies Act 2013 the auditors of the Company have not reported any fraud under sub-section (12) of Section 143 of the Companies Act 2013.
Pursuant to the provisions of the Act and the Companies (Cost Records and Audit) Rules 2014 the Interim Resolution Professional have appointed M/s. V. J. Talati & Co. Cost Accountants as the Cost Auditors to conduct cost audit for the telecommunications businesses of the Company for the financial year ending March 31 2020 subject to approval of members at ensuing Annual General Meeting.
During the year under review the Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.
Secretarial Audit & Secretarial Compliance Report
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directors had appointed M/s. Ashita Kaul & Associates Company Secretaries in Practice to undertake the Secretarial Audit of the Company. There is no qualification reservation or adverse remark made in their Secretarial Audit Report submitted to the Company. The Secretarial Audit Report is attached herewith as Annexure C. Pursuant to circular No.CIR/ CFD/ CMD1/ 27/ 2019 dated February 08 2019 issued by the Securities and Exchange Board of India (SEBI) the Company has obtained Annual Secretarial Compliance Report from a Practicing Company Secretary (PCS) on compliance of all applicable SEBI Regulations and circulars/ guidelines issued there under and the copy of the same shall be submitted with the Stock Exchanges within the prescribed due date.
As required under Section 134(3)(a)of the Act the Annual Return for the financial year 2017-18 and 2018-19 is put up on the Company's website and can be accessed at https:// www.rcom.co.in/investor-relations-Annual Return.
Particulars of Employees and related disclosures
(a) Employees Stock Option Scheme
During the year under review the Company has not granted any Options to the employees of the Company. Employees Stock Option Scheme (ESOS) was approved and implemented by the Company and Options were granted to the employees under ESOS Plan 2008 and ESOS Plan 2009 in accordance with earlier guidelines applicable to ESOS.
During the year under review ESOS Plan 2009 has completed ten years tenure and all its outstanding Options were lapsed. All the outstanding Options of ESOS Plan 2008 were lapsed during the financial year ending 31st March 2018.
The ESOS Compensation Committee of the Board which was monitoring the Employees Stock Option Scheme has been dissolved during the year under review. The functions of the ESOS Compensation Committee of the Board would be looked after by the Nomination and Remuneration Committee. The ESOS Scheme and Plan were in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014 (SEBI ESOS Regulations).
(b) Other Particulars
In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (the Rules) as amended a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Directors' Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Rules are also provided in the Annual Report which forms part of this Report.
However having regard to the provisions of Section 136 of the Act the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company on all working days except Saturdays between 11.00 a.m. and 1.00 p.m. upto the date of the Annual General Meeting. Any member interested in obtaining the same may write to the Company Secretary. Upon receipt of such request the information shall be furnished.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
As the Company does not carry on any manufacturing activity being a telecommunications service provider most of the information of the Company as required under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 are not applicable. However the information as applicable has been given in the Annexure D forming part of this Report.
The Company has adopted the Reliance Group-Corporate Governance Policies and Code of Conduct which sets out the systems process and policies confirming to the international standards. The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report A Certificate from the Practising Company Secretaries M/s. Ashita Kaul & Associates Company Secretaries conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations is enclosed to this Report.
Ombudspersons & Whistle Blower (Vigil Mechanism)
The Company has formulated an Ombudspersons & Whistle Blower (Vigil Mechanism) to address the genuine concern if any of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Company's website at www.rcom.co.in.
The Company has constituted a Risk Management Committee in the Board of Directors meeting held on 14th November 2014 consisting of majority of directors and senior managerial personnel of the Company; however this mandatory provisions of Listing Regulations are not applicable to the Company. The Board of Directors of the Company has dissolved the Risk Management Committee in its meeting held on 3rd November 2018. Audit Committee will look after the functions of the Risk Management Committee. The risk framework has different risk models which help in identifying risks trend exposure and potential impact analysis at a Company level as also separately for business segments.
Compliance with provisions of Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013
The Company is committed to uphold and maintain the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year no such complaints were received.
The Company has also constituted an Internal Compliance Committee under the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Company's website at the link; http://www.rcom.co.in/Rcom/ about-us/investor-relations/corporate-governance.html. The CSR Committee consists of Smt. Manjari Kacker as Chairperson Shri R. N. Bhardwaj Prof. J. Ramachandran Shri Deepak Shourie Shri A. K. Purwar Shri Punit Garg Shri Manikantan V. Smt. Ryna Karani and Smt. Chhaya Virani Directors as members of the Committee.
On April 1 2019 Shri A.K. Purwar resigned from being a member of the Corporate Social Responsibility Committee of the Company.
The annual report on CSR activities is annexed as Annexure E.
Orders if any passed by Regulators or Courts or Tribunals
Except as disclosed in this report no orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company's operation.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the organisation. The same is subject to review periodically by the internal audit cell and by the audit committee for its effectiveness.
During the year such controls were tested and no reportable material weakness in the design or operation were observed.
Your Directors express their sincere appreciation for the cooperation and assistance received from shareholders debenture holders bankers financial institutions regulatory bodies debenture trustee and other business constituents during the year under review. The Directors express their sincere thanks to the lenders of the Company for continuous support during the year. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives officers and staff and look forward to their continued support in future.
|By the Order of the Interim Resolution Professional|
|Manikantan V||Suresh Rangachar|
|Director and Chief Financial Officer||Director|
|May 27 2019|
Annexure A Dividend Distribution Policy
The Board of Directors (the Board) of Reliance Communications Limited (the Company) at its meeting held on May 27 2017 has adopted this Dividend Distribution Policy (the Policy) in accordance with the Companies Act 2013 (the Act) and Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (the Listing Regulations).
This policy was reviewed by the Board at its meeting held on July 18 2018.
The Objective of this Policy is to establish the parameters to be considered by the Board of Directors of the Company before declaring or recommending dividend.
3. Circumstances under which the shareholders may or may not expect dividend
The shareholders of the Company may not expect dividend in the below mentioned circumstances:
a) In the event of a growth opportunity where the Company may be required to allocate a significant amount of capital.
b) In the event of higher working capital requirement for business operations or otherwise.
c) In the event of inadequacy of cashflow available for distribution.
d) In the event of inadequacy or absence of profits.
e) In the event of any regulation or contractual restriction.
The Board may consider not declaring dividend or may recommend a lower payout for a given financial year after analysing the prospective opportunities and threats or in the event of challenging circumstances such as regulatory and financial environment.
4. Parameters to be considered before recommending dividend
Dividends will generally be recommended by the Board once a year after the announcement of the full year results and before the Annual General Meeting (AGM) of the shareholders as may be permitted under the Companies Act 2013. The Board may also declare interim dividends as may be permitted under the Companies Act 2013.The Company has had a consistent dividend policy that balances the objective of appropriately rewarding shareholders through dividends and to support the future growth of the Company.
The decision regarding dividend pay-out is a crucial decision as it determines the amount of profit to be distributed among shareholders and amount of profit to be retained in business. The Dividend pay-out decision of any company depends upon certain external and internal factors:
4.1 External Factors
State of Economy: In case of uncertain or recessionary economic and business conditions Board will endeavor to retain larger part of profits to build up reserves to absorb future shocks.
4.2 Internal Factors
Apart from the various external factors aforementioned the Board will take into account various internal factors while declaring Dividend which inter alia will include:
Income / Profits earned during the year;
Present & future capital requirements of the existing businesses;
Brand/ Business Acquisitions;
Expansion/ Modernization of existing businesses;
Additional investments in subsidiaries/ Joint
Ventures/ associates of the Company;
Fresh investments into external businesses;
Repayment of Loans
Any other factor as deemed fit by the Board.
5. Utilisation of retained earnings
The Company shall endeavour to utilise the retained earnings in following manner:
For expansion and growth of business;
Additional investments in existing businesses;
Declaration of Dividend;
General Corporate purpose; and
Any other specific purpose as may be approved by the Board.
6. Parameters that shall be adopted with regard to various classes of shares
The Company has issued only one class of shares viz. Equity shares. Parameters for dividend payments in respect of any other class of shares will be as per the respective terms of issue and in accordance with the applicable regulations and will be determined if and when the Company decides to issue other classes of share.
This Policy will be reviewed periodically by the Board.
8. Limitation and amendment
In the event of any conflict between the Act or the Listing Regulations and the provisions of the policy the Listing Regulations shall prevail over this policy. Any subsequent amendment / modification in the Listing Regulations in this regard shall automatically apply to this policy.
Annexure - B Policy on appointment and remuneration for Directors Key Managerial Personnel and Senior Management employees
1.1 Reliance Communications Limited considers human resources as its invaluable assets. This policy aims to harmonise the aspirations of the directors/ employees with the goals of the Company.
1.2 Human capital is a strategic source of value creation. As part of our progressive HR philosophy it is necessary to have in place a comprehensive Compensation Policy which is in line with the industry trend and is employee friendly.
2.1 Ensuring that the quantum and composition of remuneration is reasonable and sufficient to attract retain and motivate employees to run the Company successfully.
2.2 Ensuring that relationship of remuneration to performance is clear and meets the performance benchmarks.
2.3 Ensure that annual compensation review considers industry/ business outlook and strategies adopted by industry peers differentiates employees based on their performance/skill sets and also protects employees particularly those in junior cadre against inflationary pressures;
2.4 Retention of high performers at all levels and those playing critical roles.
The Board has constituted the Nomination and Remuneration Committee in line with the requirements under the provisions of the Companies Act 2013. This Policy sets out the broad guiding principles for the Committee for recommending to the Board the appointment and remuneration of the directors key managerial personnel senior managerial personnel of the Company.
4.1. Director means a director appointed to the Board of the Company.
4.2. Key Managerial Personnel means
(i) the Chief Executive Officer or the Managing Director or the Manager;
(ii) the Company Secretary;
(iii) the Whole-time Director;
(iv) the Chief Financial Officer; and
(v) such other officer as may be prescribed under the Companies Act 2013.
4.3. ``Senior Management'' means personnel of the company who are members of its core management team excluding Board of Directors comprising of all members of management one level below the executive directors if any.
5.1 Appointment of Directors/ Key Managerial / Senior Management personnel
The Nomination and Remuneration Committee inter alia considers qualifications positive attributes areas of expertise and number of Directorships and Memberships held in various committees of other companies by such persons for selection. The Board considers the recommendation of the Committee and takes appropriate decisions. The Company also considers the requirement of skills and effectiveness of persons contributing to the Company's business and policy decisions.
5.2 Remuneration to Directors/ Key Managerial Personnel
5.2.1 The remuneration of the Directors/ Managing Director/ Whole time Directors and Managers etc. will be governed as per provisions contained in the Companies Act 2013 and rules made therein from time to time.
5.2.2 Non-Executive Directors shall be entitled to sitting fees for attending the meetings of the Board and the Committees thereof as approved by the Board of Directors from time to time. The Non-Executive Directors shall also be entitled to profit related Commission if approved by the Board in addition to the sitting fees.
5.2.3 The Board on the recommendation of the Nomination and Remuneration Committee shall review and approve the remuneration payable to the Directors/ Key Managerial Personnel/ Senior Management Personnel of the Company within the overall limits if any approved by the shareholders.
5.2.4 The remuneration structure shall include the following components:
(i) Basic Pay
(ii) Perquisites and Allowances
(iii) Stock Options if any.
(iv) Commission (Applicable in case of Executive Directors/ Directors)
(v) Retiral Benefits
(vi) Performance Linked Incentives
5.2.5 The Annual Plan Objectives financial results of the Company shall be reviewed by the Nomination and Remuneration Committee and performance incentives increment revision in remuneration etc. will be proposed based on the achievements.
5.3 Remuneration to other employees
Employees shall be assigned grades/bands according to their qualifications and work experience competencies as well as their roles and responsibilities in the organization. Individual remuneration shall be determined within the appropriate grade/bands and shall be based on various factors such as job profile skill sets seniority experience performance and prevailing remuneration levels for equivalent jobs.
6. Retention Features as part of Compensation Package
Based on the organizational need for retaining performing employees and those in critical roles certain retention features may be rolled out as part of the overall compensation package. These may take form of Retention Bonuses (RBs); Special Monetary Programs (SMPs) Long-term Incentives (LTIs) Employee Stock Options etc.
7. Modification and Amendment
The policy is subject to modification amendment and alterations by the management at any time without assigning any reasons.