Board Committees

NAME

AUDIT COMMITTEE

(Section 177) read with Rule 6 of Companies (Meeting of Board and its Powers) Rules, 2014

NOMINATION AND REMUNERATION COMMITTEE

(Section 178) read with Rule 7 of Companies (Meeting of Board and its Powers) Rules, 2014

STAKEHOLDERS RELATIONSHIP COMMITTEE

(Section 178)

CSR COMMITTEE

(Section 135) read with Companies(CSR Policy) Rules, 2014

APPLICABILITY

Every listed companies and the following classes of companies:-

i. all public companies with a paid up capital of Rs.10 Crores or more;

ii. all public companies having turnover of Rs.100 Crores or more;

iii. all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs.50 Crores or more.

The paid up share capital or turnover or outstanding loans, or borrowings or debentures or deposits, as the case may be, as existing on the date of last audited Financial Statements shall be taken into account.

Every listed companies and the following classes of companies:-

i. all public companies with a paid up capital of Rs.10 Crores or more;

ii. all public companies having turnover of Rs.100 Crores or more;

iii. all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs.50 Crores or more.

The paid up share capital or turnover or outstanding loans, or borrowings or debentures or deposits, as the case may be, as existing on the date of last audited Financial Statements shall be taken into account.

A company which consists of more than 1000 shareholders, debenture holders, deposit holders and any other security holders at any time during a financial year.

Every company having:-

a) net worth of Rs.500 crore or more,

b) turnover of Rs.1000 crore or more, or

c) net profit of Rs.5.00 crore or more

Where net profit excludes income from overseas branch & divided distributed by company on which this section apply.

If any company on which CSR provisions were applicable cease to come in above criteria for consecutive 3 years , they are not required to follow the provision of CSR

PARTICULARS

COMPANIES ACT, 2013

CLAUSE 49 OF LISTING AGREEMENT (revised w.e.f. 01.10.2014)

COMPOSITION

Minimum 3 directors with independent directors forming a majority.

Majority of the members including Chairperson shall be persons with ability to read and understand, the financial statement.

Minimum 3 directors with 2/3rd shall be independent directors.

All the members shall be financially literate and at least 1 member shall have accounting or related financial management expertise.

Chairman: Independent Director & present at AGM to answer shareholder queries.

The Company Secretary shall act as the secretary to the Committee.

MEETINGS

SS-1 provides that:

Frequency: Board/ Committees of Board shall meet atleast once in every quarter with a maximum interval of 120 days between any two consecutive meetings.

Quorum: 1/3rd of total strength or 2 Directors, whichever is higher

Frequency: Atleast 4 times in a year and not more than 4 months shall elapse between two meetings.

Quorum: 2 members or 1/3rd of the members, whichever is greater subject to minimum 2 independent members present.

FUNCTIONS

Section 177(4) of the Act provides that every Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall, inter alia, include,—

the recommendation for appointment, remuneration and terms of appointment of auditors of the company;

review and monitor the auditor’s independence and performance, and effectiveness of audit process;

examination of the financial statement and the auditors’ report thereon;

approval or any subsequent modification of transactions of the company with related parties;

scrutiny of inter-corporate loans and investments;

valuation of undertakings or assets of the company, wherever it is necessary;

evaluation of internal financial controls and risk management systems;

monitoring the end use of funds raised through public offers and related matters

The role of the audit committee shall include the following:

1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2. Recommendation for appointment, remuneration and terms of appointment of auditors of the company.

3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

4. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013

b. Changes, if any, in accounting policies and practices and reasons for the same

c. Major accounting entries involving estimates based on the exercise of judgment by management

d. Significant adjustments made in the financial statements arising out of audit findings

e. Compliance with listing and other legal requirements relating to financial statements

f. Disclosure of any related party transactions

g. Qualifications in the draft audit report.

5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval.

6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

7. Review and monitor the auditor’s independence and performance, and effectiveness of audit process.

8. Approval of any subsequent modification of transactions of the company with related parties.

9. Scrutiny of inter-corporate loans and investments.

10. valuation of undertakings or assets of the company, wherever it is necessary.

11. evaluation of internal financial controls and risk management systems.

12. Reviewing with the management, performance of statutory and internal auditors, adequacy of the internal control systems.

13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

14. Discussion with internal auditors any significant findings and follow up there on.

15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.

16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

18. To review the functioning of the Whistle Blower mechanism.

19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.

20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

POWERS

The Audit committee shall have the authority –

1. To call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the internal and statutory auditors and the management of the company.

2. To investigate into any matter in relation to the items or referred to it by the Board or to obtain professional advice from external sources. The committee shall have full access to information contained in the records of the company.

3. The auditors and KMPs have a right to be heard in the meetings of the Audit Committee when it considers the Auditor’s Report but shall not have the right to vote.

The audit committee shall have powers, which should include the following:

1. To investigate any activity within its terms of reference.

2. To seek information from any employee.

3. To obtain outside legal or other professional advice.

4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

The Audit Committee shall mandatorily review the following information:

1. Management discussion and analysis of financial condition and results of operations;

2. Statement of significant related party transactions (as defined by the audit committee), submitted by management;

3. Management letters / letters of internal control weaknesses issued by the statutory auditors;

4. Internal audit reports relating to internal control weaknesses; and

5. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee

The Board’s Report is required to disclose the composition of Audit Committee and where the Board had not accepted any recommendation of the Audit Committee, the same is also required to be disclosed in the Board’s Report along with the reasons therefore.

PARTICULARS

COMPANIES ACT, 2013

CLAUSE 49 OF LISTING AGREEMENT (revised w.e.f. 01.10.2014)

COMPOSITION

3 or more Non-Executive Directors out of which not less than ½ shall be Independent Directors.

The Chairperson of the Company may be appointed as a member of the Committee but shall not Chair such Committee.

Atleast 3 Non-Executive Directors.

Chairman: Independent Director & present at AGM to answer shareholder queries. However, it would be up to the Chairman to decide who should answer the queries.

FUNCTIONS

Subsection (2), (3) and (4) of Section 178 deals specifically with the functions of the Committee which include:

1. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director’s performance.

2. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.

3. Formulation of the policy under sub-section (3) ensure that—

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:

Provided that such policy shall be disclosed in the Board's report.

Role of the Committee includes:

1.Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.

2. Formulation of criteria for evaluation of Independent Directors and the Board.

3. Devising a policy on Board diversity.

4. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal.

The Company shall disclose the Remuneration Policy and the evaluation criteria in its Annual Report.

PARTICULARS

COMPANIES ACT, 2013

CLAUSE 49 OF LISTING AGREEMENT (revised w.e.f. 01.10.2014)

COMPOSITION

1 Chairperson who shall be a Non-Executive Director and such other members as may be decided by the Board.

Chairmanship of a Non-Executive Director and such other members as may be decided by the Board.

FUNCTIONS

The main function is to consider and resolve the grievances of security holders of the Company.

The function is to specifically look into the redressal of shareholder and investor complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc.

The main function is to expedite the process of share transfers.

Company: punishable with fine which shall not be less than 1 lakh rupees but which may extend to 5 lakh rupees.

Officer in default: punishable with imprisonment for a term which may extend to 1 year or with fine which shall not be less than 25 thousand rupees but which may extend to 1 lakh rupees or with both.