Reliance Power Ltd.
|BSE: 532939||Sector: Infrastructure|
|NSE: RPOWER||ISIN Code: INE614G01033|
|BSE 00:00 | 23 May||7.66||
|NSE 00:00 | 23 May||7.65||
|Mkt Cap.(Rs cr)||2,149|
|Mkt Cap.(Rs cr)||2148.73|
Reliance Power Ltd. (RPOWER) - Director Report
Company director report
Your Directors present the 24th Annual Report and the audited accounts for thefinancial year ended March 31 2018.
The performance of the Company (consolidated and standalone) for the financial yearended March 31 2018 is summarized below:
During the financial year under review the total Income of the Company was ' 49431lakhs against ' 47662 lakhs in the previous year on a standalone basis. The Company hasearned a Profit after tax of ' 225 lakhs compared to ' 6426 lakhs in the previous year.
During the year under review the Board of Directors has not recommended dividend onthe Equity Shares of the Company. The Company's Dividend Distribution Policy forms part ofthis Annual Report.
During the year 2017-18 all the operating plants of the Company which are functioningthrough its subsidiary companies performed exceedingly well both in terms of efficiencyparameters and profitability. The Plant Load Factor (PLF) of the three thermal plants ofthe Company (Sasan Power Rosa Power and Butibori Power) accounting for a total aggregatecapacity of 5760 MW was 85% as against the all India average of 58%.
The Company's Sasan UMPP (Capacity 3960 MW) had a very impressive year generating31793 MUs for the year with the PLF being 91.65%.
The Sasan UMPP is the World's largest integrated power plant and the Moher and MoherAmlohri Coal mines attached to the plant were the biggest coal mines in the country interms of total quantity of coal excavated. Including the Overburden handled at 74 MillionCuM the total volume handled at Sasan Coal Mine during the year was 86 Million CuMmaking it the largest mine in the country in terms of volume handled.
Sasan mine was awarded by the Honourable President of India with National Safety Award(Mines) for the year 2013 & 2014 through DGMS for its commendable safe workenvironment and safety practices during the year.
The Rosa Thermal plant (1200 MW) at Shahjahanpur in Uttar Pradesh owned by theCompany's subsidiary Rosa Power Supply Company Limited delivered another year ofconsistent performance with generation of 7719 MUs.
The Rosa power plant received prestigious accolades and awards from prestigiousInstitutions for excellence in CSR Training and for best practices in HR.
The Butibori Thermal plant (600 MW) in Maharashtra generated 3307 million units duringthe year. The plant also received recognition from prestigious bodies for excellence inthe areas of the environment and energy. It won accolades for its initiatives in the areaof community development as part of its CSR Projects.
The Solar PV (40 MW) Project in Rajasthan generated 69 million units during the year.
The Solar CSP (100 MW) plant in Rajasthan has achieved a number of operating milestonesincluding achievement of peak load of 132.43 MW during the year.
The Company's Wind farm at Vashpet in Sangli District of Maharashtra also performedsatisfactorily during 2017-18.
As reported in the previous year the Company's subsidiary Jharkhand Integrated PowerLimited (JIPL) a special purpose vehicle for development of 3960 MW Tilaiya Ultra MegaPower Project terminated the Power Purchase Agreement (PPA) with its procurers due totheir failure to meet the conditions subsequent as per the PPA. Procurers accepted thetermination of PPA and on May 10 2018 the Company entered into Share Transfer Agreementfor transferring its entire holding in JIPL to Jharkhand Urja Vikas Nigam Limited theLead Procurer acting on behalf of Procurers of Tilaiya UMPP. The said transaction hasbeen completed on May 16 2018 with Procurers returning Bank Guarantees of ' 600 Crorealong with the payment of agreed termination payment of ' 113 Crore.
Proposed gas-based project in Bangladesh
The Directors are pleased to inform that during the year the progress achieved in theimplementation of the gas-based project in Bangladesh was significant.
The project involves development and operation of a 718 MW (net) Combined Cycle PowerPlant (CCPP) using Re-gasified Liquefied Natural Gas (LNG). The project also includesetting up of a Floating Storage Regasification Unit (FSRU) based LNG Terminal at offshoreof Kutubdia Island Bangladesh.
The Company completed the execution of project agreements for Phase - I of itsBangladesh Project with Bangladesh Authorities. The Company also initialled the TerminalUse Agreement for LNG Terminal Project with PetroBangla a Government of Bangladeshentity.
Asian Development Bank (ADB) the lead lender has approved debt financing and partialrisk guarantee totalling $583 million for the project.
For CCPP the Company awarded EPC Contract to Reliance Infrastructure Limited (RInfra)and Equipment Supply Contract to Samalkot Power Limited a subsidiary of the Company.
For setting up 500 mmscfd LNG Terminal Project the Company has awarded the EPCContract to RInfra.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulatedunder the Listing Regulations is presented in a separate section forming part of thisAnnual Report.
During the year under review entire amount of ' 560 Crore Redeemable Non ConvertibleSecured Debentures (Rs. NCDs') were matured and paid.
During the year the Company has issued NCDs of ' 250 Crore and ' 750 Crore. As on dateNCDs of ' 1000 Crore are outstanding. These NCDs are listed on BSE Limited.
The Company has not accepted any deposits from the public which comes within thepurview of Section 73 of the Companies Act 2013 (hereinafter referred to as 'the Act')read with the Companies (Acceptance of Deposits) Rules 2014.
Particulars of Investments
Pursuant to the provisions of Section 186 of the Act the details of Investments madeare provided in the unabridged standalone financial statements under Note 3.3(a) and3.5(a).
Subsidiary and Associate Companies
As on March 31 2018 the Company had 44 subsidiaries under its fold.
During the year Reliance Bangladesh LNG Terminal Limited became subsidiary of theCompany.
RPL Surya Power Private Limited RPL Star Power Private Limited RPL Sunlight PowerPrivate Limited RPL Solar Power Private Limited RPL Solaris Power Private Limited RPLSunshine Power Private Limited and Jharkhand Integrated Power Limited have ceased to bethe subsidiaries of the Company.
The Company had the following Associate Companies as on March 31 2018:
1. RPL Sun Power Private Limited
2. RPL Photon Private Limited
3. RPL Sun Technique Private Limited
The operating and financial performance of the major subsidiary companies has beendiscussed in the Management Discussion and Analysis Report forming a part of this AnnualReport. In addition the financial results of the subsidiary companies have beenconsolidated with those of the parent company. The Company's policy for determiningmaterial subsidiaries may also be accessed on the Company's website at the link http://
Financial Statements - Application of the Companies (Indian Accounting Standards)Rules 2015
The Ministry of Corporate Affairs (MCA) vide its Notification No. G.S.R. 111(E) datedFebruary 16 2015 has made the application of the Companies (Indian Accounting Standards)Rules 2015 (Ind-AS Rules) effective from April 1 2015 for certain categories ofcompanies.
The audited financial statement of the Company drawn up both on standalone andconsolidated basis for the financial year ended March 31 2018 are in accordance with therequirements of the Ind-AS Rules.
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year ended March 312018 based on the financial statements received from subsidiaries and associates asapproved by their respective Board of Directors have been prepared in accordance withInd-AS Rules and relevant provisions of the Companies Act 2013.
During the year under review Shri K. Ravikumar was appointed as an IndependentDirector of the Company at the Annual General Meeting (AGM) of the Company held onSeptember 26 201 7 for a term of three consecutive years.
Shri D.J. Kakalia and Smt. Rashna Khan Independent Directors of the Company who wereappointed to hold office for a term up to three consecutive years from September 27 2014were re-appointed as an Independent Directors of the Company for a further term of threeconsecutive years with effect from September 26 2017.
The approval of members has been accorded for appointment of Shri N. Venugopala Rao asa Whole-time Director of the Company commencing from April 13 2017.
Shri N. Venugopala Rao Whole-time Director has superannuated from the services of theCompany from the close of business hours on June 30 2018.
The term of Dr. Yogendra Narain one of the Independent Director has expired witheffect from September 26 2017.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of Independence as prescribed under the Actand the Listing Regulations.
The details of programmes for familiarization of Independent Directors with theCompany nature of industry in which the Company operates and related matters have beenput up on the website of the Company at the link: http://www.reliancepower. co.in/web/reliance-power/corporate governance.
In accordance with the provisions of the Act Shri Sateesh Seth Non-ExecutiveDirector retires by rotation and being eligible has offered himself for re-appointmentat the ensuing AGM.
Appointment of Whole-time Director
The Board of Directors at their Meeting held on April 13 2018 has appointed Shri KRaja Gopal as an Additional Director of the Company who holds office only upto the dateof the ensuing AGM and also appointed him to the position of Whole-time director for aperiod of three years effective from July 1 2018 as per the provisions of the Act. Theappointment and the remuneration payable to Shri K. Raja Gopal during the above tenure ofappointment are subject to the approval of the members at the ensuing AGM. Shri K RajaGopal was appointed as the Chief Executive Officer of the Company with effect from May 22018.
The Company has received a notice in writing from a member under Section 160 of theAct proposing the candidature of Shri Gopal for the office of Director of the Company.The Nomination and Remuneration Committee of the Board has also recommended theappointment of Shri K Raja Gopal as a Director.
Particulars of Directors proposed to be appointed
Pursuant to the provisions of Section 152(5) of the Act read with Regulation 36(3) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing
Regulations) the brief resume of Shri Sateesh Seth and Shri K Raja Gopal who areproposed to be appointed at the ensuing AGM as above along with the information regardingthe nature of their expertise in specific functional areas and names of the companies inwhich they hold directorship and / or membership / chairmanship of Committees of therespective Boards shareholding and relationship between Directors inter se is given inthe section on Corporate Governance Report forming part of this Annual Report.
Key Managerial Personnel (KMP)
Shri N. Venugopala Rao Chief Executive Officer (CEO) of the Company was appointed asWhole-time Director (WTD) with effect from April 13 2017 and was also given theadditional responsibility as Chief Financial Officer (CFO) with effect from February 162018.
Shri Suresh Nagarajan has resigned as the CFO effective from February 16 2018.
Shri N. Venugopala Rao superannuated from the service of the Company from the close ofbusiness hours on June 30 2018. However he ceased to be the CEO & CFO from the closeof business hours on May 1 2018 and ceased to be the WTD from the close of business hourson June 30 2018.
Shri K Raja Gopal has been appointed as CEO with effect from May 2 2018 and WTD witheffect from July 1 2018 for a period of 3 years subject to approval of the members ofthe Company.
Shri Shrenik Vaishnav has been appointed as the CFO with effect from May 2 2018.
Shri Ramaswami Kalidas Company Secretary and Compliance Officer has superannuatedfrom the service of the Company from the close of business hours on June 7 2017.
Shri Murli Manohar Purohit has been appointed as Company Secretary and ComplianceOfficer with effect from June 8 2017.
As on date Shri K Raja Gopal WTD & CEO Shri Shrenik Vaishnav CFO and Shri MurliManohar Purohit the Company Secretary are the KMP's.
Evaluation of Directors Board and Committees
The Company has devised a policy for performance evaluation of the individualdirectors Board and its Committees which includes criteria for performance evaluation.
Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulationsthe Board has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of the Committees of theBoard. The Board performance was evaluated based on inputs received from all the Directorsafter considering criteria such as Board composition and structure effectiveness of Board/ Committee processes and information provided to the Board etc. A separate meeting ofthe Independent Directors was also held during the financial year for the evaluation ofthe performance of non-independent Directors performance of the Board as a whole and thatof the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of theindividual directors based on their knowledge level of preparation and effectiveparticipation in the 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 forselection and appointment of Directors Key Managerial Personnel and Senior ManagementEmployees and their remuneration. The Committee has formulated the criteria fordetermining the qualifications positive attributes and independence of Directors whichhas been put up on the Company's website http://www.reliancepower.co.in. Further the Committee has also devised a policy relating to remuneration for KeyManagerial Personnel and Senior Management Employees. All the Non-Executive Directors asat the end of the financial year 2017-18 were paid only sitting fees for attending themeetings of the Board and its Committees. The policy on the above is attached as Annexure- A.
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 the preparation of the annual financial statement for the financial year endedMarch 31 2018 the applicable Accounting Standards had been followed along with properexplanation relating to material departures if any;
ii. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2018 and of the profit ofthe Company for the year ended on that date;
iii. The Directors had 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;
iv. The Directors had prepared the annual financial statement for the financial yearended March 31 2018 on a 'going concern' basis;
v. The Directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and are operating effectively;and
vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts / arrangements / transactions entered into by the Company during thefinancial year under review with related parties were at an arm's length basis and in theordinary course of business.
There were no materially significant related party transactions which could havepotential conflict with the interest of the Company at large.
During the year the Company had not entered into any contract / arrangement /transactions with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.
AH related party transactions were placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee was obtained for the transactions whichwere of a repetitive nature. The transactions entered into pursuant to the omnibusapproval so granted were reviewed and statements giving details of all related partytransactions were placed before the Audit Committee on a quarterly basis. The policy onRelated Party Transactions as approved by the Board has been uploaded on the Company'swebsite at the link http://www.reliancepower .co.in/web/reliance-power/corporate-governance.
Your Directors draw attention of the members to Note 12 to the financial statementwhich sets out related party disclosures.
Material Changes and Commitments if any affecting the financial position of theCompany
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the close of the financial year till the date of thisReport.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year seven Board Meetings were held. Details of the meetings held and attended byeach Director are given in the Corporate Governance Report.
The Audit Committee of the Board consists of the Independent Directors namely: Shri KRavikumar (Chairman) Shri D. J. Kakalia and Smt. Rashna Khan. Shri Sateesh SethNon-Independent Non-Executive Director is a member of the Committee. During the year allthe recommendations made by the Audit Committee were accepted by the Board.
Auditors and Auditors' Report
M/s. Pathak H.D. & Associates Chartered Accountants and M/s. B S R & Co. LLPChartered Accountants were appointed as the Auditors of the Company for a term of 5 (five)consecutive years at the AGM of the Company held on September 27 2016 and September 26201 7 respectively. The Company has received letters from M/s. Pathak H.D. &Associates Chartered Accountants and M/s. B S R & Co. LLP Chartered Accountants thatthey are not disqualified from continuing as the Auditors of the Company.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The observations and commentsgiven by the Auditors in their report read together with notes on financial statements areself-explanatory and hence do not call for any further comments under Section 134 of theAct.
Pursuant to the provisions of the Act and the Companies (Audit and Auditors) Rules2014 the Board of Directors have appointed M/s. V. J. Talati & Co. Cost Accountantsas the Cost Auditors in respect of its 45 MW Wind Farm Power Project at Vashpet Dist.Sangli Maharashtra for the financial year ending March 31 2019 subject to theremuneration being ratified by the shareholders at the ensuing AGM of the Company.
During the year under review the Company has complied with the applicable SecretarialStandards issued by The Institute of Company Secretaries of India (ICSI).
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board has appointed M/s. Ajay Kumar& Co. Company Secretaries in Practice to undertake the Secretarial Audit of theCompany. There is no qualification reservations or adverse remarks in their SecretarialAudit Report.
The Report of the Secretarial Auditor is attached herewith as Annexure - B.
Extract of Annual Return
Extract of the Annual Return of the Company in form MGT-9 is attached herewith asAnnexure - C.
Employees Stock Option Scheme
Pursuant to the approval accorded by the Shareholders on September 30 20O7 underSection 81(1A) of the erstwhile Companies Act 1 956 and pursuant to ESOS Guidelines onMay 8 201 0 a Committee of the Board had approved implementation of "Reliance Power- Employees Stock Option Scheme 2010" (ESOS-2010) and grant of 20000000 optionsthereon exercisable into equal number of fully paid up equity shares of the Company tothe eligible employees of the Company and its subsidiaries based on specified criteria.
However considering the market price of the equity shares none of the employee hadexercised the options vested and consequently the ESOS Committee at their meeting heldon May 19 2014 had amended the ESOS Plan 2010 and extended the validity period ofExercise Period.
Thereafter considering the Company's proposed revision in its current Employees'Remuneration and Incentive Policy market condition and the current market price which wasquoted under ' 50 per share for past six months and after considering the recommendationsof Nomination and Remuneration Committee the Company decided to wind up Reliance ESOSPlan 2010 with effect from October 23 201 7.
Particulars of Employees and Related Disclosures
In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) & 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said Rules are provided in the AnnualReport which forms part of this report.
Disclosures relating to the remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 201 4 as amended are also provided in the Annual Reportwhich forms part of this Report.
However having regard to the provisions of first proviso to Section 136(1) of the Actthe Annual Report excluding the aforesaid information is being sent to all the Members ofthe Company and others entitled thereto. The said information is available for inspectionat the Registered Office of the Company on all working days except Saturdays between11:00 A.M. and 1:00 P.M. upto the date of meeting. Any member interested in obtaining thesame may write to the Company Secretary and same shall be furnished on request.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars as required to be disclosed in terms of Section 134(3)(m) of the Actread with Rule 8 of the Companies (Accounts) Rules 2014 are given in Annexure - Dforming part of this Report.
The Company has adopted 'Reliance Group-Corporate Governance Policies and Code ofConduct' which sets out the systems processes and policies conforming to theinternational standards. The report on Corporate Governance as stipulated under Regulation34(3) read with para C of Schedule V of the Listing Regulations is presented in a separatesection forming part of this Annual Report.
A certificate from the Auditors of the Company M/s. Pathak H. D. & AssociatesChartered Accountants and M/s. B S R & Co. LLP Chartered Accountants conformingcompliance to the conditions of Corporate Governance as stipulated under Para E ofSchedule V to the Listing Regulations is enclosed to this Report. The disclosures requiredunder Schedule V of the Act as applicable to Shri K Raja Gopal as a Whole-time Directorare given below:
(i) Remuneration comprises of salary allowances and other perquisites of ' 300 Lakhsper annum inclusive of performance linked incentive of ' 75 Lakhs.
(ii) Details of fixed component and performance linked incentives along with theperformance criteria - Fixed component of ' 225 Lakhs per annum and performance linkedincentive of ' 75 Lakhs
(iii) Service contracts notice period severance fees - He has a binding servicecontract with functions and duties of a Whole-time Director and Chief Executive Officer.
(iv) Stock option details if any and whether the same has been issued at a discountas well as the period over which accrued and over which exercisable - Not Applicable
(v) Details of Non Executive Directors are provided in Corporate Governance Report.
Whistle Blower (Vigil Mechanism)
In accordance with Section 1 77 of the Act and the Listing Regulations the Company hasformulated a Vigil Mechanism and a Whistle Blower Policy to address the genuine concernsif any of the Directors and employees. The details of the same have been stated in theReport on Corporate Governance and the policy can also be accessed on the Company'swebsite.
The Company continues to have a Risk Management Committee consisting of majority ofdirectors and senior managerial personnel. The details of the Committee and its terms ofreference etc. are set out in the Corporate Governance Report forming part of this Report.
The Company has a robust Business Risk Management framework to identify evaluatebusiness risks and opportunities. This framework seeks to create transparency minimizeadverse impact on the business objectives and enhances the Company's competitiveadvantage. The business risk framework defines the risk management approach across theenterprise at various levels including documentation and reporting. The risks are assessedfor each project and mitigation measures are initiated both at the project as well as thecorporate level.
Compliance with provisions of Sexual Harassment of Women at workplace (PreventionProhibition and Redressal) Act 2013
The Company is committed to uphold and maintain the dignity of women employees and ithas in place a policy which provides for protection against sexual harassment of women atworkplace and for prevention and redressal of such complaints. During the year underreview no such complaint has been received. The Company has also constituted an InternalCompliance Committee under the Sexual Harassment of Women at workplace (PreventionProhibition and Redressal) Act 2013. Corporate Social Responsibility
The Company has constitued Corporate Social Responsibility (CSR) Committee incompliance with the Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014. The CSR Committee has formulated a Corporate SocialResponsibility Policy (CSR policy) indicating the activities to be undertaken by theCompany.
The CSR policy may be accessed on the Company's website at the link
The CSR Committee consisted of Smt Rashna Khan as Chairperson Shri Sateesh Seth ShriK Ravikumar Shri D. J. Kakalia and Shri N. Venugopala Rao Directors as members as onMarch 31 2018. Dr. Yogendra Narain has ceased to be Chairman of the Committee witheffect from September 26 2017 being the date on which he has relinquished his office asa Director. Shri N. Venugopala Rao ceased to be a member of the Committee with effect fromJune 30 2018.
The disclosures with respect to CSR activities forming part of this report is given asAnnexure - E.
Orders if any passed by Regulators or Courts or Tribunals
No orders have been passed by the Regulators or Courts or Tribunals which impact thegoing concern status and operations of the Company.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls with reference tofinancial statements across the organization. The same is subject to review periodicallyby the Internal Audit Cell and Audit Committee for its effectiveness. The control measuresadopted by the Company have been found to be effective and adequate to the Company'srequirements.
Business Responsibility Report
Business Responsibility Report for the year under review as stipulated under ListingRegulations is presented in a separate section forming part of this Annual Report.
Your Directors express their sincere appreciation for the cooperation and assistancereceived from shareholders debenture holders debenture trustee bankers financialinstitutions regulatory bodies and other business constituents during the year underreview. Your Directors also wish to place on record their deep sense of appreciation forthe commitment displayed by all executives officers and staff resulting in thesuccessful performance of the Company during the year.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
July 21 2018
Policy on Appointment and remuneration for Directors Key Managerial Personnel andSenior Management Employees
Following is the summary of the policy as approved by the Nomination and RemunerationCommittee of the Board:
1.1 The Company considers human resources as an invaluable asset. The policy isintended to harmonize the aspirations of the directors / employees with the goals andobjectives of the Company;
1.2 As part of a progressive HR philosophy it is imperative for the Company to have acomprehensive compensation policy which has been synchronized with the industry trends andis also employee friendly.
2.1 Broad objective is to attract and retain high performing resources.
2.2 The remuneration policy aims at achieving the following specific objectives:
2.2.1 To attract highly competent human resources to sustain and grow the Company'sbusiness;
2.2.2 To build a performance culture by aligning performance of individuals with thebusiness objectives of the Company;
2.2.3 To ensure that annual compensation review considers Industry/business outlook andstrategies adopted by industry peers differentiates employees based on their performanceand also adequately protects employees especially those in junior cadres againstinflationary pressures;
2.2.4 To retain high performers at all levels and those who are playing critical rolesin the Company.
3. Scope and Coverage
In accordance with the provisions of the Companies Act 2013 (the 'Act') a Nominationand Remuneration Committee of the Board has been constituted inter-alia to recommend tothe Board the appointment and remuneration of Directors KMPs and persons belonging to theSenior Management cadre.
4.1 'Director' means a director appointed to the Board of the Company.
4.2 'Key Managerial Personnel' in relation to the Company 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' refers to personnel of the Company who are members of its coremanagement team excluding the Board of Directors and comprises of all members of themanagement one level below the Executive Directors if any.
5.1 Remuneration i.e. Cost-to-Company (CTC) shall comprise of two broad components;fixed and variable.
5.2 Fixed portion comprises of Base pay and Choice pay components.
5.3 Variable pay termed as Performance Linked Incentive (PLI) comprises of apre-determined maximum that can be paid as % at the end of the performance year based onthe composite score achieved during the relevant performance year.
5.4 Performance Year shall be from 1st April - 31st March.
5.5 PLI is based on the following dimensions with indicated weightages for computingthe Composite score based on:
(a) Individual performance rating;
(b) Function/Project Annual Operating Plan (AOP) achievement rating; and
(c) Company AOP achievement rating.
6. Payout Mechanism
6.1 Fixed pay gets paid on a monthly basis net of retiraLs and taxes
6.2 RetiraLs are 12% of basic for provident fund and 4.81% of basic towards gratuity.
6.3 ALL payments are made with TDS implemented.
7. Annual Compensation Review
The compensation review year will be from 1st April to 31st March. The annualcompensation review as part of the Performance Management System (PMS) cycle shall beguided by:
7.1 Industry/business outlook;
7.2 Strategies adopted by industry peers;
7.3 Employee differentiation based on individual performance rating (achieved duringthe applicable performance year); and
7.4 Protection of employees especially those in junior cadre against inflationarypressures.
8. Retention Features as part of Compensation Package
8.1 Based on the organizational need for retaining high performing employees and alsothose who are playing critical roles from time to time certain retention features may berolled out as part of the overall compensation package. These may take form of RetentionBonuses (RBs) Special Monetary Programs (SMPs) Long-term Incentives (LTIs) etc.
8.2 While attracting talent in critical positions also such retention features could beincorporated as part of the compensation package.
9. Modifications / Amendments / Interpretation
The policy is subject to modifications amendments and alterations by the Management atany time without assigning any reasons or without giving any prior intimation to theemployees. In case of any ambiguity the interpretation provided by the Corporate HR teamshall be final.