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Board’s Report The Shareholders, IL&FS Cluster Development Initiative Limited Your Directors have pleasure in presenting the Tenth Annual Report on the business and operations of the Company and the audited accounts for the financial year ended March 31, 2016 THE FINANCIAL SUMMARY OR HIGHLIGHTS: The standalone performance of the Company for the financial year ended March 31, 2016 is summarized below:
(` mn) Sr. No Particulars For the year ended
March 31, 2016
For the year ended March 31, 2015
1 Income from Operations
1031 628
2 Gross Profit/(Loss)
46 27
3 Depreciation and Amortization
17 8
4 Profit/Loss before taxation 29 19
5 Provision for Current Income Tax 23 -
6 Provision for Deferred Tax (14) (7)
7 Profit/(Loss) after taxation
20 26
During the year revenue from operations on standalone basis increased to Rs 1031 mn as against Rs 628 mn in the previous year- a growth of 64 per cent Profit before tax for the year was Rs 29 mn representing an increase of 53 per cent over the previous year
OPERATIONAL REVIEW/ YEAR IN RETROSPECT:
During the year under consideration, your Company has been able to achieve about 25 % growth despite several challenges. The progress slowed down during the year on account of delay in approvals of the projects by the Government and it was further constrained by late release funds to the implementing Ministries. Your management had taken initiatives for diversification of the business, which will help the Company to tide over this constraint to certain extent Your Company had remained focused on B2C engagement and various strategic partnerships have been entered into with international organisations like ITC, Geneva and KAAA (Kenya Agribusiness and Agro industry Alliance) and these are likely to be converted to mandates in the coming financial year
The business of your Company has increased state focus in order to expand and deepen engagement with government as well as private clients as many of the activities centered around ‘Make in India’ are going to happen in states. Keeping this in view and in a bid to increase efficiency and bring more accountability, a restructuring of the operations of your Company has been carried out to increase the focus on states
During the year, your Company on a policy advisory capacity had worked with the various Ministries in shaping their policies for providing meaningful thrust to manufacturing as well as other various sectors over a decade. Some of these are likely to turn into programmes and this may give a first mover advantage to the company, once these programmes get approved In the year under review, the major area of concern for your Company was to collect payments which was due from various clients, particularly the Government. The collections systems have improved significantly during the fourth quarter of FY 2016 and efforts will be further continued
DIVIDEND: Your Directors have pleasure in recommending for approval of the members at the Annual General Meeting a dividend of 15 % i.e. Rs 1.5 per Equity Share. The dividend of 15 %, at the forth coming Annual General Meeting, will result in the out flow of Rs. 18,000,000/- to the Company in addition to Rs.3,664,376/- by way of dividend distribution tax RESERVES: No Amount has been transferred to the General Reserves. An amount of Rs. 19 mn is proposed to be retained in the statement of Profit & Loss
SHARE CAPITAL: The paid up equity capital of the Company as on March 31, 2016 was Rs. 120 mn. During the year under review there was no change in the shareholding pattern of the Company DEPOSITS: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Particulars of loans, investment or guarantees covered under the provisions of section 186 of the Companies Act, 2013 forms part of the notes to the financial statements provided in this Annual Report
RELATED PARTY TRANSACTIONS:
There have been no materially significant related party transactions between the Company and the Directors, the management, the subsidiaries or the relatives except for those disclosed in the financial statements Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report MATERIAL CHANGES AND COMMITMENTS, IF ANY:
There were no material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report like settlement of tax liabilities, operation of patent rights, depression in market value of investments, institution of material cases by or against the company, sale or purchase of capital assets or destruction of any assets etc
THE CHANGE IN THE NATURE OF BUSINESS:
During the year under review there was no change in the nature of the business of the Company
DETAILS OF SUBSIDIARIES /JOINT VENTURES/ASSOCIATE COMPANIES: During the year under review, the Board of Directors (“the Board”) of your Company made a continuous effort to realign the group structure and accordingly, four subsidiaries were dissolved or transferred. The details of which are given in the table mentioned below: As on March 31, 2016 your Company has only one wholly owned subsidiary i.e. APPTEX Marketing Services & Solutions Limited (“APPTEX Marketing”). The Company regularly monitors the affairs of APPTEX Marketing The names of the Companies that have ceased to be subsidiaries are given in the table mentioned below:
Sr. No. Name of the Company Status Date
(1) Skills Training Assessment Management Partners Limited (STAMP)
Entire shares transferred to IL&FS Education & Technology Services Limited (“Holding Company”)
September 28, 2015
(2) Dehradun Rural Development Initiative Limited
Under Process of Striking Off
February 16, 2016*
(3) Jaipur Rural Development Initiative Limited
Under Process of Striking Off
February 16, 2016*
(4) Rajsamand Rural Development Initiative Limited
Under Process of Striking Off
February 18, 2016*
*Date of closure application from filed with RoC (Registrar of Companies)
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT: In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and APPTEX Marketing, which form part of the Annual Accounts of your Company. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC -1 is appended as Annexure-I to the Board's report. COMPANY’S AFFAIRS: Your Company is now assisting more than 10 industry groups as Project Management Consultant in setting up Mega Food Parks in the country, and providing services such as preparation of detailed project reports, detailed design and engineering, bid process management and construction supervision etc. In addition to this, it has also been working with the Electronics sector and Tooling sector for the last couple of years. During the year, one greenfield Electronics Manufacturing Cluster (EMC) commenced implementation after receiving approval for grant from Department of Electronics & Information Technology, GoI. The Company is also working with an electronics project in Greater Noida, Uttar Pradesh which is likely to attract large investments from Taiwan. Similarly, the tooling sector viz. common facility centre by Tool & Gauge Manufacturers Association of India (TAGMA), supported by Department of Heavy Industries, GoI also commenced implementation During the year, the Company entered into an Agreement with an equipment manufacturer for bio-waste based small cold stores which would be able to run without grid power. The Agreement is aimed at promoting environment friendly decentralised cold chain solutions in the country. This is part of the Company’s attempt to venture into business of technology promotion and marketing linkages During the period under consideration various activities were undertaken under the programmes which are under implementation. Under USAID India funded India Kenya Dairy Innovation Bridge Programme, trainings were conducted for farmers on clean production practices and improved animal health. In addition, the process of setting up a milk processing facility in Kenya was initiated. Progress of implementation of the project is as per schedule
Your Company’s present engagements with the projects of Central Ministries such as Ministry of Textiles and Ministry of Food Processing Industries and State Governments of Bihar, Tripura and Odisha, private sector clients and bilateral funding agencies (USAID) would continue to meet revenue projections for FY 2017
DIRECTORS & KEY MANAGERIAL PERSONNEL: (1) Key Managerial Personnel:
During the year, no change in Key Managerial Personnel took place. The Company has following Key Managerial Personnel as on March 31, 2016:
Sr. No Name Designation Date of Appointment/Re-designation as KMP
1 Dr. A K Krishna Kumar Executive Director May 12, 2014
2 Mr. Amitabh Jain Chief Financial Officer May 12, 2014
3 Mr. Pankaj Kumar Company Secretary February 10, 2015
(2) Directors:
During the year the following changes took place in Board of Directors of the Company:
Sr. No. Name of Directors Nominee / Representative of/ Chairman if any
Date of Appointment during FY 2016
Date of Cessations during FY 2016
1 Mr. Ravi Parthasarathy
Chairman NA February 04, 2016
2 Mr. RCM Reddy Director NA February 05, 2016
3 Mr. Hari Sankaran Chairman February 04, 2016
(3) Directors liable to retire by rotation:
As per the provisions of Companies Act, 2013, one third of the rotational Directors have to retire by rotation. The Directors to retire by rotation in ensuing Annual General Meeting shall be those who have been longest in office since their last appointment Accordingly, Mr. Manu Kochhar shall be retiring by rotation and is eligible for re-appointment
(4) Independent Directors: Your Company has following Independent Directors as on March 31, 2016 Sr No Name Designation/Re-designation
Date of Appointment
1 Mr. Arvind Malhotra Independent Director March 20, 2015
2 Mr. A Sakthivel Independent Director March 20, 2015
All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013
DIRECTORS’ RESPONSIBILITY STATEMENT: In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: (1) in the preparation of the annual accounts, the applicable accounting standards had
been followed along with proper explanation relating to material departures; (2) the directors have 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 at the end of the financial year and of the profit and loss of the company for that period;
(3) the directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(4) the directors have prepared the annual accounts on a going concern basis; and (5) the directors have laid down internal financial controls to be followed by the company
and that such internal financial controls are adequate and were operating effectively (6) the directors have devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively
STATUTORY AUDITORS:
The Auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants, Gurgaon, were appointed as Statutory Auditors of the Company for a period of 5 years till the conclusion of Annual General Meeting 2019. Such appointment shall be subject to ratification in the ensuing Annual General Meeting till the sixth such meeting by way of passing of an ordinary resolution AUDITOR’S REPORT: The observation made in the Auditors' Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013
NUMBER OF MEETINGS OF THE BOARD:
(1) Meeting of the Board of Directors and attendance thereat: The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The notice of Board meeting is given well in advance to all the Directors. The Agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision The Board met four times in financial year 2016 viz., on May 18, 2015, August 18, 2015, November 02, 2015 and February 04, 2016. The maximum interval between any two meetings did not exceed 120 days
The attendance at these Board Meetings and the previous Annual General Meeting is as under:
Director Number of Board Meetings attended
Mr. Ravi Parthasarathy 4 Dr. A K Krishna Kumar 4 Mr. R C M Reddy 4 Mr. Arumugam Sakthivel 3 Mr. Manu Kochhar 3 Mr. Arvind Malhotra 4 Mr. K K Iyer 3
Annual General Meeting was duly convened on August 21, 2015 and was attended by the following directors:
Directors Designation Dr. A K Krishna Kumar Executive Director Mr. RCM Reddy Director Mr. A Sakthivel Director & Chairman of Audit Committee Mr K K Iyer Chairman of Nomination & Remuneration
Committee COMMITTEES OF THE BOARD: Currently the Board has four Committees: the Audit Committee, Nomination and Remuneration Committee, Committee of Directors and Corporate Social Responsibility (CSR) Committee The composition of the committees and compliances, as per the applicable provisions of the Acts and Rules are as follows: (1) Audit Committee:
(a) The Audit Committee of the Board deals with accounting policies and
commercial matters, financial reporting, Compliance Report and internal control systems, appointment of internal and external auditors and fixing their remuneration, adequacy of internal audit function
(b) All recommendations made by the Audit Committee during the year were accepted by the Board
(c) The Audit Committee met four times during the year under review viz. May
18, 2015, August 18, 2015, November 02, 2015 and February 04, 2016. The attendance status of the Members at these meetings is provided below. The Internal Auditors as well as Statutory Auditors of the Company are invited for all Meetings of the Audit Committee:
Sr. No. Name of the Members Designation Number of
Meetings attended 1 Mr. A Sakthivel Chairman 3 2 Mr. K K Iyer Member 3 3 Mr Arvind Malhotra Member 4
(2) Nomination & Remuneration Committee:
(a) The role of the committee is to oversee and administer executive compensation, operating under a written charter adopted by our Board of Directors
(b) The Committee has designed and continuously review the compensation program for our WTD/MD and senior executives to align both short-term and long-term compensation with business objectives and to link compensation with the achievement of measurable performance goals
(c) During the year under review, Nomination & Remuneration Committee met on July 30, 2015 with attendance of Mr Arvind Malhotra and Mr KK Iyer
(d) Re-constitution of Nomination and Remuneration Committee: - Pursuant to resignation of Mr Ravi Parthasarathy the Nomination and Remuneration Committee of your Company had been re-constituted with following members
Directors Designation Mr K K Iyer Chairman Mr Hari Sankaran (Inducted w.e.f February 04, 2016)
Member
Mr A Sakthivel Member Mr. Arvind Malhotra Member
(3) Committee of Directors of the Company:
Pursuant to resignation of Mr Ravi Parthasarathy and Mr RCM Reddy as Directors, your Company re-constituted the Board as per the provisions of sections 149 and 152 of the Companies Act, 2013 and consequently the Committee of Directors was also re-constituted with following members:
Sr. No. Name of the Director Designation (i) Mr. Hari Sankaran
(Inducted w.e.f February 04, 2016) Member
(ii) Dr. A K Krishna Kumar Member (iii) Mr. K K Iyer Member
(4) Corporate Social Responsibility (CSR) Committee:
The CSR Committee of the Company has been re-constituted in the meeting of Board of Directors held on February 04, 2016 and Mr. K K Iyer has been designated as Chairman of the Committee. The Committee met once during the year on February 04, 2016. The attendance records of the members at the meeting were as follows:
Name of the Members Designation Number of
Meetings attended Mr. K K Iyer Chairman - Mr. Arvind Malhotra
Member 1
Mr. RCM Reddy (Ceased w.e.f February 05, 2016)
Member 1
Dr A K Krsihna Kumar (Inducted w.e.f February 04, 2016)
Member 1
SIGNIFICANT AND MATERIAL ORDER: There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The Company has constituted a ‘Corporate Social Responsibility (CSR) Committee’ and framed a policy on CSR as per the provisions section 135 of the Companies Act, 2013. The summary of which together with details of CSR activities undertaken by the Company during FY 2016 have been covered in separate report on CSR annexed to this report as Annexure-III A and III B the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company EXTRACT OF ANNUAL RETURN: In accordance with section 134 (3) (a) of the Companies Act, 2013 an extract of annual return in the prescribed format is appended as Annexure-IV to the Board’s Report
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director/ Whole Time Director The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board In order to ensure adherence with the provisions of the Companies Act, 2013, your Company has initiated the process of review of the existing processes for each of the functional areas during the year and had engaged a professional firm to evaluate the current processes and policies, to report the gaps and recommend the best industry practices. Improvements suggested have been implemented by the Company RISK MANAGEMENT: In view of the prevailing operating environment, diversified activities & clientele, your Company has developed and implemented the Risk Management Policy. The policy also states the methods of identifying risks and mitigation strategies for the business activities. The policy is annexed herewith as Annexure-V DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
The following is the summary of sexual harassment complaints received and disposed off during the year 2016 • No. of complaints received: NIL • No. of complaints disposed off: NIL PARTICULARS OF EMPLOYEE:
A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration in excess of the limits set out under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure-VI to the Board’s Report CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION:
Your Company is a service Company and has no manufacturing unit. Since your Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required under the provision of Section 134 (3) (m) of the Companies Act, 2013 are not applicable
FOREIGN EXCHANGE EARNINGS & OUTGO: The particulars regarding foreign exchange earnings and expenditure appear as Note No. 25 of Notes to the Accounts
ACKNOWLEDGEMENTS:
The Board of Directors place on record their appreciation for the continued support extended to them by various Government Authorities, Banks, Financial Institutions and Shareholders of the Company
The Directors would also like to place on record their appreciation for the hard work and dedication of the employees of the Company at all levels .
By Order of the Board
For IL&FS Cluster Development Initiative Limited
Hari Sankaran Chairman
Place: - Mumbai Date: - May 11, 2016
ANNEXURE - I
FORM AOC-1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES/JOINT VENTURES Part “A”: Subsidiaries
(Amount in Rs.)
Name of the subsidiary APPTEX Marketing Services & Solutions Limited
(Direct Subsidiary) Reporting Period March 31, 2016 Reporting currency and Exchange rate in the case of foreign subsidiaries N.A. Share capital 500,000 Reserves & surplus 78,945 Total assets 3,667,914 Total Liabilities
3,088,969
Investments - Turnover 14,046,400 Profit / (loss) before taxation 3,461,524 Provision for taxation - Profit /(loss) after taxation 3,461,524 Proposed Dividend - % of shareholding 100%
Notes: 1. E-form for striking off name of following PURA Companies (i) Rajsamand Rural Development Initiative Limited (ii) Jaipur Rural
Development Initiative Limited and (iii) Dehradun Rural Development Initiative Limited had been filed with RoC
Part “B”: Associates and Joint Ventures
N.A.
For IL&FS Cluster Development Initiative Ltd
ARVIND MALHOTRA A K KRISHNA KUMAR Independent Director Executive Director AMITABH JAIN PANKAJ KUMAR Chief Financial Officer Company Secretary
Place- Mumbai Date:- May 11, 2016
ANNEXURE II
Nomination and Remuneration Policy
The Board of Directors of IL&FS Cluster Development Initiative Limited (“the Company”) re-constituted the “Nomination and Remuneration Committee” at the meeting held on February 10, 2015 with immediate effect, consisting of four (4) Non-Executive Directors (“NED”) out of which half of the members are Independent Directors (“ID”). The members of the Committee are as follows:
Sr. No.
Name of the Members Designation
(1) Mr. K K Iyer
Chairman, Nominee Director
(2) Mr. Ravi Parthasarathy (Ceased to be wef February 04, 2016)
Member, NED
(3) Mr. A Sakthivel Member, ID
(4) Mr. Arvind Malhotra Member, ID
(5) Mr Hari Sankaran Member, NED
(I) Objective
The Nomination and Remuneration Committee and this policy shall be in compliance with the provisions of Section 178 of the Companies Act, 2013 read with rule 6 of the (Meetings of Board and its Power) Rules, 2014. The key objectives of the Committee would be: (1) To guide the Board in relation to appointment and removal of Directors, Key
Managerial Personnel and Senior Management
(2) To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board
(3) To recommend to the Board on Remuneration payable to the Directors, Key
Managerial Personnel and Senior Management (4) To provide to Key Managerial Personnel and Senior Management reward
linked directly to their effort, performance, dedication and achievement relating to the Company’s operations
(5) To retain, motivate and promote talent and to ensure long term sustainability
of talented managerial persons and create competitive advantage
(II) Definitions
(1) “Act” means the Companies Act, 2013 and Rules framed thereunder, as
amended from time to time
(2) Board means Board of Directors of the Company. (3) Directors mean Directors of the Company. (4) Key Managerial Personnel means
(a) Chief Executive Officer or the Managing Director or the Manager; (b) Whole-time director; (c) Chief Financial Officer; (d) Company Secretary; and (e) such other officer as may be prescribed
(5) Senior Management means Senior Management means personnel of the company who are members of its core management team excluding the Board of Directors including Functional Heads
(III) Role of Committee
(1) Matters to be dealt with, perused and recommended to the Board by the
Nomination and Remuneration Committee The Committee shall: (a) Formulate the criteria for determining qualifications, positive attributes
and independence of a director
(b) Identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy
(c) Recommend to the Board, appointment and removal of Director, KMP
and Senior Management Personnel
(2) Policy for appointment and removal of Director, KMP and Senior
Management (a) Appointment criteria and qualifications: The following Selection
Criteria are proposed for hiring of a Member of the Board / Director
(i) Experience / Know how:
The candidate must meet at least two of the below mentioned four criteria:
• Must have been a CEO of a medium - large
conglomerate in the past • Must have served on other Boards • Must have held General Management role for the last 5-
10 years • Must bring a different dimension to the board due to the
area of work or expertise (Legal, HR, Marketing etc.) • Could be an independent specialist
(ii) Behavioral Competencies:
• Results and Achievement Orientation • Strategic Orientation • Ability to Influence and Inspire • Effective Decision Making • Champions Change • Intra-Group Coordination • Integrity (“Fit & Proper”)
(b) Term / Tenure
(i) Managing Director/Whole-time Director
The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term
(ii) Independent Director • An Independent Director shall hold office for a term up
to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report
• No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly
• Every Independent Director before appointment shall
furnish the declaration of Independence to the Company as per section 149 (6) of the Companies Act, 2013
(3) Performance Evaluation of the Board of Directors
(a) Objective:
The objective is to facilitate the individual Directors and the Board as a whole to review the efficacy of the directives with respect to the Group performance. The Board will undertake the following activities annually:
(i) The Chairperson will meet with each Non-Executive Director
separately to discuss individual performance and ideas for improvement
(ii) The Board as a whole will discuss and analyse its own
performance during the year including suggestions for improvement
(b) Performance Evaluation Areas: (i) Review Strategy and Performance:
• Review Company Strategy annually • Following strategy review above, the Board will set the
organization performance objectives based on qualitative and quantitative measures
• Review the strategic objectives and ensure that they are
in line with the Company’s priorities and the changing nature of the Company’s business
• Review performance of Executive Directors annually
and have it reflect in the remuneration review • Review performance of Independent Directors annually
(ii) Performance of the Committees constituted under the Board:
• Review the necessity of establishing any Committees and delegating certain of its responsibilities to the Committee
• Review the Committees achievements during the year
based on their duties • Review the charters of the Committees once a year to
ensure that they are up to date
(iii) Financial Controls and Reporting:
Ensuring the integrity of the Company’s accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the law and relevant standards
(iv) Corporate Governance:
Ensure that all the corporate governance policies are drafted and followed in spirit
(c) Evaluation of Independent Directors:
Schedule IV of the Companies Act, 2013 prescribes the Code for Independent Directors (Code). The Companies are required to formally adopt the Code. Going forward role, responsibilities, appointment and evaluation of the Independent Directors will be governed by the Code
(d) Review and Modifications:
Based on the discussion on the foregoing evaluation areas, parameters and regulatory provisions, it is proposed to evolve a suitable matrix for evaluation of Whole Time, Non Whole Time and Independent Directors which will be placed before the Board in its next Meeting
(IV) Remuneration Pattern WTD/ Managing Director:
(1) Structure : A summary of the current structure set for the Whole-time Directors
is as mentioned below :
Components Item Description Policy
Base Salary • Reflects the Directors’ experience, criticality of the role with the Group and the risk factor involved
• Consolidated Salary fixed for each financial year
• This component is also used for paying retiral benefits
• Paid on a monthly basis
Normally positioned as the highest as compared to the Group
Short-term incentive
• Based totally on the performance of the Director
• Variable component of the remuneration package
• Paid on an annually basis
Determined by the Compensation Committee after year-end based on performance against the pre-determined financial and non- financial metrics
Long-term incentive
• Drive and reward delivery of sustained long-term performance
• Variable long-term remuneration component, paid in shares
Determined by the Compensation Committee and distributed on the basis of time, level and performance
Retiral Benefits • Provide for sustained contribution
• Accrues depending on length on service. It is 33.33% of Consolidated Pay
Paid post separation from the Company as per the Rules of the Provident Fund and Gratuity Acts and the IL&FS Superannuation Fund
(2) Base Salary: The Shareholders of the Company, while approving the appointment of the Whole-time Directors approve the scale within which the salary of the Whole-time Directors could be fixed
(3) Perquisites and benefits: All other benefits are as per the rules of the Company. In addition to the above remuneration, the Whole-time Directors are also entitled to perquisites as per the Rules of the Company
(4) Short-Term Incentive Plan (‘STIP’): (a) The Company operates variable pay scheme called as “Performance
Related Pay” [PRP]. Amendments to the PRP scheme is made to suit the organisation’s business and performance
(b) In determining the actual PRP payments, the factors which are usually considered are Performance related to the Group’s financial, Operational performance against budget
(V) Key Management Personnel (KMP):
(1) The Key Management Personnel (KMP) in the Company are the Executive
Director (ED / WTD), Chief Financial Officer (CFO) and Company Secretary (CS)
(2) The KMPs have operational responsibilities in addition to the responsibilities specified by the Companies Act, 2013
(3) The remuneration package of the Key Management and Senior Management comprises of: (a) Fixed Remuneration: This includes a Monthly Salary such as
Consolidated Pay, Variable House Rent Allowance, Compensatory Allowance, Utility Allowance, Interest Subsidy on Housing Loans
(b) Annual Allowances: This consists of Leave Travel Allowance,
Medical Reimbursement and House Maintenance Allowance
(c) Retirals: This includes Provident Fund @ 12% of Consolidated Pay, Gratuity and Superannuation as per Company Policy
(VI) Non-Whole Time Directors:
Non Whole-Time Directors are paid Sitting Fees for attending the Board / Board Committee/s Meetings in accordance with the Companies Act, 2013. The Board is responsible for setting policy in relation to the remuneration of the Non-Whole Time Directors
(VII) Remuneration Mix:
The total remuneration package of Directors and KMPs is designed to provide an appropriate balance between fixed and variable components with focus on Performance Related Pay so that outstanding performance is incentivized but without encouraging excessive risk taking
(VIII) Disclosures: Under the provisions of CA 2013, the Board of Directors would have to disclose the details of the managerial remuneration in the Director’s Report to the Shareholders
(IX) Review and Modification:
Effectiveness of the Managerial Remuneration Policy is ensured through periodical review. The Board of Directors of the Company may amend or modify this Policy in whole or in part at any time
ANNEXURE III-A
IL&FS CLUSTERS CSR POLICY
(1) INTRODUCTION:
Corporate Social Responsibility (CSR) is the Company’s commitment to its stakeholders to
conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical. IL&FS Cluster Development Initiative Limited (IL&FS Clusters) in India is committed to undertake CSR activities in accordance with the provisions of Section 135 of the Indian Companies Act, 2013 and related Rules
(2) BACKGROUND AND OBJECTIVES:
(a) IL&FS Clusters aims at evolving its CSR policy with the following goals:
(i) Promoting education including employment enhancing vocational skills and livelihoods pursuant to Schedule VII read with Section 135 of the Companies Act 2013
(ii) Attain strategic and long term partnership with community through
education and vocational skills and livelihoods
(b) Education is a key instrument for social and economic transformation and can be leveraged as a significant catalyst in achieving the CSR vision. Recognizing the importance of education as a change agent, IL&FS Clusters intends to focus on education driven initiatives focusing on access, equity and quality of education to for improving Education indicators through holistic quality improvement of schools under its CSR. IL&FS Clusters will also provide for discretionary initiatives for need based requirements for specific projects, with a focus on education and skill development
(c) Based on the foregoing, an engagement framework will focus on improving
educational outcomes, creating community awareness & capacities among the stakeholders, and develop linkages for financial and administrative support for sustainability:
(i) Impact of education: To make project
schools effective for a substantive impact of education on students, to lessen the negative effects of socio-economic, demographic and gender disadvantages
Capacity Creation & Linkages
SUSTAINABLEIMPACT
(ii) Enabling the community: To provide enabling conditions in the community to combat attitude deficit, illiteracy, lack of awareness of social issues, health and sanitation and gender inequity
(iii) Creating a sustainable impact: To initiate measures which would (i) create
capacities amongst community stakeholders, (ii) demonstrate outcomes that would find resonance among the community and (iii) create financial and administrative linkages under several welfare schemes of the government departments for continuity, funding and logistical support and a durable impact
CHILDREN COMMUNITY Create leaders & facilitators from within the community
•Enhance learning in 3 subjects •Ensure better performance inschool
• Enable families to sustain children's interest in learning
•
Impart pre -vocational skills : Computers & English
• Activate Village Education Committee •Build community awareness & accountability Empower them with rights & responsibilities Generate a feeling of oneness and purpose to unite the community
•Encourage School enrollment &retention
••
Equip them with Life Skills tofunction in the working world
••
(3) FOCUS AREAS: IL&FS Clusters aims to impact educational outcomes through holistic quality improvement programmes in schools and community development initiatives. The programmes recommended under IL&FS Clusters CSR are as under:
(a) “Livelihood development of communities through context driven income generation
activities by local institutions (SHGs, NGOs etc.)
(b) Quality Improvement of Schools: The objective is to take up existing stressed schools which is providing education to the marginalized (Minorities, Economically disadvantaged, girls, Socially backwards etc) for holistic quality improvement focused on improving learning outcomes. The objective is to equip the schools with resources, capacity creation and linkages so that they can demonstrate outcomes which are a direct output of the school related activities and other outcomes which are linked to the community and indirectly influence education indicators. The measurable outcomes where the project school will play a central role is Student and Teacher performance and working with the Community to improve school enrolment and adult literacy. The interventions will focus on the following : (i) Academic Support to ensure greater teaching effectiveness and student
learning including:
• Supplementary teaching: Improving learning outcomes in English, Maths, Science
• Providing & Enabling usage of Technology in classroom Library resources and reading programmes
• Capacity building of existing teachers in IT skills, Classroom
management
(ii) Enhancement of Learning environment through interventions in ‘Adding Dimensions’
(iii) Life Management Skills to improve career prospects of students and to
impart practical skills for the working world and care of self and common property resources
(iv) Community Engagement with VEC, SMCs, parents etc and awareness
generation to promote positive attitudes towards education and gender equity and Adult literacy
(v) Linkages with Government/ other Corporates/ Institutions for financial &
administrative support for sustainability, wherever possible
For FY 2015, it is recommended to take up 2 such schools to be supported under IL&FS Clusters CSR with an outcome driven approach, one in Delhi/ NCR and the other in Mumbai. The locations have been chosen with a view to have the schools in proximity to the IL&FS Clusters headquarters
(c) Discretionary initiatives: In order to enable need based support to projects under education, it is also recommended to provide for a discretionary allocation towards such requirements. As examples, the following are recommended to be taken up for FY 2015:
(i) To use infrastructure in government schools to support life skills programmes
through e-learning, specifically in English language, Health and Financial literacy
(ii) To support educational interventions under area development plan in Tiyulia,
Uttar Pradesh in convergence with IL&FS CSR commitments
(4) APPROVAL PROCESS:
Whilst, in the normal case, approval would be taken for an Overall Plan at the start of each financial year, it is expected that in the initial years of the implementation of the CSR regime, periodic reviews and / or modifications to the Budgets may be required. Hence approval of CSR Committee is would be taken for any proposed expenditure to be incurred for CSR
(5) KEY RULES /GUIDELINES FOR THE CSR EXPENDITURE:
(a) The prescribed CSR spend, as indicated in Section 135 of the Companies Act, 2013
is at 2% of the Average Profit Before Tax of the Company, duly adjusted for any dividend income received from companies, and any profits from Overseas Branches
(b) The overall spend will be only on such interventions and programs whose impacts
are both meaningful and measurable
(c) The selected projects need to adhere to the following guidelines : (i) The Company will undertake CSR projects / programmes that are in
conformity with Schedule VII of the Act; (ii) CSR Activities shall not include the activities undertaken in pursuance of
normal course of business of the Company; (iii) Any surplus arising out of any of the CSR activities / programmes shall not
form part of the business profits of the Company; (iv) Any activity for the exclusive benefit of the employees of the Company or
their family members shall not be considered as a CSR activity; (d) However, the Company may build CSR capacities of its own personnel as well as
those of its Implementing Agencies but such expenditure shall not exceed 5% of the total CSR expenditure of the Company in any one financial year
(6) DISCLOSURE OF THE POLICY: As per the Act, IL&FS Clusters is required to disclose the composition of the CSR Committee and its CSR Policy in the Company’s Annual Report and on the website. Further, the details of the CSR activities and programme taken up during the year will also be disclosed
(7) IMPLEMENTATION:
To implement the Company's CSR Programmes through Company personnel or through external implementing agencies or through Social Empowerment and Economic Development Society (SEEDS) directly, or through implementing agencies in the form of NGO’s, service providers, vendors etc. (and/or other Trusts, Foundations and Section 8 companies that may be established by the Company from time to time). In such cases, the Company will specify the CSR Programmes which may be undertaken by those Trusts in accordance with their Objects and administrative and accounting processes laid down in the respective Trust Deeds/ Memoranda and Articles of Association
(8) GOVERNANCE:
(a) Every year, the CSR Committee will place for the Board's approval, a CSR Plan delineating the CSR Programmes to be carried out during the financial year and the specified budgets thereof. The Board will consider and approve the CSR Plan with any modification that may be deemed necessary
(b) The CSR Committee will assign the task of implementation of the CSR Plan within
specified budgets and timeframes to such persons or bodies as it may deem fit
(c) The persons/bodies to which the implementation is assigned will carry out such CSR Programmes within the specified budgets and timeframes and report back to the CSR Committee on the progress thereon at such frequency as the CSR Committee may direct
(d) The CSR Committee shall review the implementation of the CSR Programmes as and
when required and issue necessary directions from time to time to ensure orderly and efficient execution of the CSR Programmes in accordance with this Policy
(e) At the end of every financial year, the CSR Committee will submit its report to the Board
(9) CSR EXPENDITURE CSR expenditure will include all expenditure, direct and indirect, incurred by the Company on CSR Programmes undertaken in accordance with the approved CSR Plan. Moreover, any surplus arising from any CSR Programmes shall be used for CSR. Accordingly, any income arising from CSR Programmes will be netted off from the CSR expenditure and such net amount will be reported as CSR expenditure
ANNEXURE III-B
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES Your Company has prepared and adopted the CSR policy in accordance with Section 135 of the Companies Act, 2013. The projects undertaken will be within the broad framework of Schedule VII of the Companies Act, 2013. Brief outline of CSR policy is stated herein below: Corporate Social Responsibility (CSR) is the Company’s commitment to all of its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical. To pursue these objectives, we will continue to; (a) To support capacity building through skills based training programs with a focus on
employment and entrepreneurship
(b) To support quality education through quality improvement of schools
(c) The objective is to take up existing stressed schools which are providing education to the marginalized (Minorities, economically disadvantaged, girls, socially backward etc) for holistic quality improvement focused on improving learning outcomes
(1) Composition of CSR committee
Sr. No. Name of the Director Designation
(i) Mr. K K Iyer Chairman
(ii) Mr. RCM Reddy (Ceased w.e.f February 05, 2016)
Member
(iii) Mr. Arvind Malhotra Member
(iv) Dr A K Krishna Kumar Member
(2) Average net profit of the company for last three financial years:
Average net profit: Rs. (13.74) mn
(3) Prescribed CSR Expenditure (Two percent of the amount as in item 3 above)
During FY 2016 the Company was not required to contribute/ fund for CSR activities as there was no average net profits for last three years (as mentioned above). However, the Company has carried forward its CSR contribution fund of FY 2015 and the same was incurred during FY 2016
(4) Details of CSR spend for the financial year: (a) Total amount spent for the financial year : Rs 1.78 mn
(b) Amount unspent if any : Nil
(c) Manner in which the amount spent during the financial year is detailed below :
S. No.
CSR Projects or activity identified
Sector in which the project is covered
Projects or programs
Amount Outlay (budget)* project or programs wise (in mn)
Amount spent on the projects or programs
Cumulative expenditure upto the reporting period (in mn)
Amount spent: direct or through implementing agency
Area
Name of District
Direct Overheads
1 Capacity Building & Skill Development of Women in Bhilwara District, Rajasthan
Promoting education {Schedule VII (ii)}
Bhilwara Bhilwara 1.78 1.78 - 1.78 Direct
(5) Reasons for not spending the amount
During the year, your Company spent the entire funds allocated for the CSR activities (6) Our CSR responsibilities
We hereby affirm that the CSR policy, as approved by the Board, has been implemented and the CSR committee monitors the implementation of the CSR projects and activities in compliance with our CSR objectives
By Order of the Board For IL&FS Cluster Development Initiative Limited
Dr A K Krishna Kumar Whole Time Director
K K Iyer Chairman of CSR Committee
Place: - Mumbai Date: - May 11, 2016
ANNEXURE IV
Form No. MGT-9
EXTRACT OF ANNUAL RETURN
as on the financial year ended on 31.03.2016 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies
(Management and Administration) Rules, 2014]
(I) REGISTRATION AND OTHER DETAILS: ( 1) CIN : U70109DL2006PLC153767
( 2) Registration Date : 14.09.2006
(3) Name of the Company : IL&FS Cluster Development Initiative Limited
( 4) Category / Sub-Category of the Company: Limited by shares
(5) Address of the Registered office and contact details: 2nd Floor, Niryat Bhawan, Rao Tula Ram Marg, Opposite Army Research and Referral Hospital, New Delhi, Delhi 110057
(6) Whether listed company : No (7) Name, Address and Contact details of Registrar and Transfer Agent, if any
Not Applicable
(II) PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10 % or more of the total turnover of the company shall be stated: -
Sl. No
Name and Description of main products/ Services
NIC Code of the product / Services
% of Total Turn over the Company
1 Establishment and development of Industrial and development projects and implementation of various Cluster development schemes
99831
334,174,262
2 Placement linked skill development program under various scheme of Government of India
99923
605,196,117
(III) PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE
COMPANIES
Sl. No.
Name & Address of the company
CIN/ GLN Holding/ Subsidiary/ Associate
% of Shares Held Applicable Section
1
IL&FS Education and Technology Services Limited
U80220MH1997PLC112535 Holding 100 2 (87)(ii)
2 APPTEX Marketing Services & Solutions Limited
U51909DL2008PLC172927 Subsidiary 100 2 (46)
3 Dehradun Rural Development Initiative Limited*
U45400DL2012PLC232310 Subsidiary 100 2 (46)
4 Jaipur Rural Development Initiative Limited*
U45200DL2012PLC232308 Subsidiary 100 2 (46)
5 Rajsamand Rural Development Initiative Limited*
U45400DL2012PLC232313 Subsidiary 100 2 (46)
*Closure application under Fast Track Exit (FTE) Scheme for these companies have been filed with Registrar of Companies
(IV) Share Holding Pattern (Equity share capital Break up as percentage of Total equity)
(1) Category – Wise Share Holding
Category of Share holders
No. of shares Held at the Beginning of the year
No. of shares held at the end of the year % of change during the year
Demat Physical
Total
% of total shares
Demat
Physical
Total
%of total shares
A. Promoters: a) Individual Nil 60 60 00.01 Nil 60 60 00.01 -b) Central Govt. Nil Nil Nil Nil Nil NilC) State Govt. GHMC
Nil Nil Nil Nil Nil Nil
d)Bodies Corp.(IEISL) Nil Nil Nil Nil Nil Nile) Public Company 11,999,940 Nil 11,999,940 99.99 11,999,940 Nil 11,999,940 99.99 Nile) Banks / FI Nil Nil Nil Nil Nil Nil Nilf) any other(Pvt.Companies)
Nil Nil Nil Nil Nil Nil -
Sub –Total (A) (1) 11,999,940 Nil 11,999,940 99.99 11,999,940 Nil 11,999,940 99.99 Nil2) Foreign a) NRIs/Individuals Nil Nil Nil Nil Nil Nil Nilb) Other Individuals Nil Nil Nil Nil Nil Nil Nilc)Bodies Corp. Nil Nil Nil Nil Nil Nil Nild) Banks / FI Nil Nil Nil Nil Nil Nil Nil
e) any other….. Nil Nil Nil Nil Nil Nil NilSub- Total (A) (2) Nil Nil Nil Nil Nil Nil NilTotal shareholdings of promotes A= A(1)+ (2)
Nil Nil Nil Nil Nil
B. Public Share holding
a)Mutual funds Nil Nil Nil Nil Nil Nil Nil Nil Nilb)Banks / FI Nil Nil Nil Nil Nil Nil Nil Nil Nilc)Central Govt. Nil Nil Nil Nil Nil Nil Nil Nil Nild)State Govt. (s) Nil Nil Nil Nil Nil Nil Nil Nil Nile)Venture capital funds Nil Nil Nil Nil Nil Nil Nil Nil Nilf)Insurance Companies Nil Nil Nil Nil Nil Nil Nil Nil Nilg)FIIS Nil Nil Nil Nil Nil Nil Nil Nil Nilh)Foreign VC funds Nil Nil Nil Nil Nil Nil Nil Nil Nili)Other (specify) Nil Nil Nil Nil Nil Nil Nil Nil NilSub-Total(B)1 Nil Nil Nil Nil Nil Nil Nil Nil Nil
2. Non- Institutions a) Bodies Corp. Nil Nil Nil Nil Nil Nil Nil Nil Nili) Indian Nil Nil Nil Nil Nil Nil Nil Nil Nilii) Overseas Nil Nil Nil Nil Nil Nil Nil Nil Nilb) Individuals Nil Nil Nil Nil Nil Nil Nil Nil Nili)Individuals shareholders holding nominal share capital upto Rs. 1 Lakhs
Nil Nil Nil Nil Nil Nil Nil Nil Nil
ii) Individuals shareholders holding nominal share capital excess of Rs. 1 Lakhs
Nil Nil Nil Nil Nil Nil Nil Nil Nil
c) Others ( Specify) Nil Nil Nil Nil Nil Nil Nil Nil NilSub-total (B) (2) Nil Nil Nil Nil Nil Nil Nil Nil NilTotal Public shareholding (B)= B(1) + B (2)
Nil Nil Nil Nil Nil Nil Nil Nil Nil
C. Shares Held by Custodian for GDRs & ADRs
Nil Nil Nil Nil Nil Nil Nil Nil Nil
Grand Total A+B+C
120,00,000 120,00,000 100 120,00,000 120,00,000 100
(2) Share Holding of Promoters:
Sl. No
Share Holders Name
Share holding at the Beginning of the year
Share holding at the end of the year
No. of shares % of total shares of the Company
% of shares pledged/encumbered to total shares
No. of shares
% of total shares of the Company
% of shares pledged/encumbered to total shares
Shares of % change in share holding during the year
1 IL&FS Education & Technology Services Limited
120,00,000 100 - 120,00,000 100 - No Change
Total
120,00,000 100 120,00,000 100 No Change
(3) Change in Promoters’ Shareholding:
S. No.
Shareholding at the beginning of the year
Cumulative Shareholding during the year
No. of Shares
% of total shares of the Company
No. of Shares
% of total sharesof the Company
At the beginning of the year
120,00,000 100
120,00,000 100
Date wise Increase /Decrease in Promoters Share holding during the Years pecifying the reasons for increase/ decrease (e.g.allotment / transfer /bonus/ Sweat equity etc..
At the end of the year
120,00,000 100
120,00,000 100
(4) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): NA
(V) Shareholding of Directors and Key Managerial Personnel: NIL
Sl. No Shareholding at the beginning of
the year Cumulative share holding during the year
For Each of the Directors & KMPs
No. of shares % of total shares of the company
No. of shares % of total shares of the company
1. Mr. Ravi Parthasarathy Chairman (Ceased w.e.f 04.02.2016)
Nil - Nil -
2. Dr. A K Krishna Kumar Executive Director
Nil - Nil -
3. Mr. Manu Kochhar Director
Nil - Nil -
4. Mr. Arumugam Sakthivel Independent Director
Nil - Nil -
5. Mr. Arvind Inder Malhotra Independent Director
Nil - Nil -
6. Mr. K K Iyer Nominee Director
Nil - Nil -
7. Mr. RCM Reddy Director (Ceased w.e.f 05.02.2016)
Nil - Nil -
8 Mr Hari Sankaran, Chairman (appointed w.e.f 04.02.2016)
9. Mr. Amitabh Jain CFO Nil - Nil - 10 Mr. Pankaj Kumar CS Nil - Nil - At the Beginning of the year - - - - Date wise Increase /Decrease in
Shareholding during the year specifying the reasons for increase/ decrease (e.g.allotment /transfer /bonus/sweat equity etc):
At the end of the year - - - -
(VI) INDEBTEDNESS
Indebtedness of the Company including interest outstanding /accrued but not due for payment.
Secured Loans excluding Deposits
Unsecured Loans
Debentures
Total Indebtedness
Indebtedness at the beginning of the financial Year Principal Amount 234,879,428 Nil - 234,879,428 Interest due but not paid Nil Nil - Nil Interest accrued but not due Nil Nil - Nil Total (i+ii+iii) 234,879,428 Nil - 234,879,428 Change in Indebtedness during the financial Year *Addition *Reduction 89,960,836 - - 89,960,836 Net Change Indebtedness at the end of the financial year i) Principal Amount 144,918,592 1,100,000,000 - 1,244,918,592
ii) Interest due but not paid Nil Nil - Nil iii) Interest Accured but not due Nil Nil - Nil Total (i+ii+iii) 144,918,592 1,100,000,000 - 1,244,918,592
(VII) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
(1) Remuneration to Managing Director, Whole-time Directors and/or Manager:
S. No. Particulars of Remuneration Name of WTD Total Amount Dr. A K Krishna Kumar 1. Gross salary Nil
(a) Salary as per provisions contained in section17(1) of the Income-tax Act, 1961
9,018,981 Nil 9,018,981
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
453,190 Nil Nil
(c) Profits in lieu of salary under section 17(3)Income- tax Act, 1961
Nil Nil Nil
2.
Stock Option
Nil Nil Nil
3.
Sweat Equity shares
Nil Nil Nil
4.
Commission - As % of profit - Others Specify
Nil Nil Nil
5.
Others*
100,000 Nil 100,000
Total (A) 95,72,171 95,72,171
Ceiling as per the act**
1,404,107
*Others include consultancy fee, Provident Fund and Superannuation upto Rs. One Lac (Superannuation above One Lac is a part of tax perquisite)
**The remuneration paid was over and above the ceiling specified under Companies Act, 2013. Therefore, approval from members of the Company and Central Government had been sought and the above is approved
(2) Remuneration to other Directors:
S. No.
Particulars of Remuneration
(Amount in Rs)
A Sakthivel Arvind Malhotra Total
1. Independent Directors
Fee for attending Board/ Committee meetings
140,000
220,000 360,000
Commission NIL NIL NIL Others, please specify NIL NIL NIL
Total (1) 140,000 220,000 360,000
2. Other Non-Executive Directors
Manu Kochhar Ravi Parthasarathy RCM Reddy Total
Fee for attending Board/ Committee meetings
60,000 80,000 100,000 240,000
Commission NIL NIL NIL NIL Others NIL NIL NIL NIL
Total (2) 60,000 80,000 100,000 240,000 Total (B) = (1 + 2) 600,000
Total Managerial Remuneration
Nil
Overall Ceiling as per the Companies Act, 2013
280,821.30
(3) Remuneration to Key Managerial Personnel other than MD/Manager/WTD
S. no. Particulars of Remuneration
Key Managerial Personnel
Dr. A K Krishan KumarWTD
Mr. Amitabh JainCFO
Mr. Pankaj KumarCS
Total
1.
Gross salary
Salary as per provisionscontained in section 17(1) of theIncome-tax Act, 1961
9,018,981 5,599,354 5,88,228 152,06,563
Value of perquisites u/s 17(2) Income-tax Act, 1961
453,190 174,456 15,000 642,646
Profits in lieu of salary undersection 17(3) Income-tax Act,1961
- - - -
2
Stock Option
- - - Nil
3
Sweat Equity
- - - Nil
4.
Commission - as % of profit - others, specify
- - Nil
5.
Others*, please Specify
100,000 1,00,000
- 200,000
Total 9,572,171 5,873,810 603,228 16,049,209 *Others include consultancy fee, Provident Fund and Superannuation upto Rs. One Lac (Superannuation above One Lac is a part of tax perquisite)
(VIII) PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: There were no penalties / punishment / compounding of offences for breach of any section of Companies Act against the Company or its Directors or other officers in default, if any, during the year
By Order of the Board For IL&FS Cluster Development Initiative Limited
Hari Sankaran Chairman
Place: - Mumbai Date: - May 11, 2016
ANNEXURE V
RISK MANAGEMENT POLICY
I Purpose:
The purpose of this memorandum is to document the Risk Management Policy of the Company
II Underlying approach to Risk Management:
(1) The following key principles outline the Company’s approach to risk
management and internal control: (a) The Board/Committee assumes responsibility for overseeing risk
management within the Companies (b) While evaluating risk management of the companies within the
Group, the Board / Committee recognize that they are exposed to a large number of risks which are inextricably linked to the entrepreneurial activities
(c) An open and receptive approach to solving risk problems is
adopted by the Board/Committee (d) Business Heads and Functional Heads under guidance of Chief
Executive Officer and support functionaries advise and implement policies approved by the Board/Committee
(e) All staff are responsible for encouraging good risk management
practice within their areas of work
III Role of the Board/Committee
(1) The Board/Committee will be responsible for management of risks associated with the operations of the Company. It will inter alia:
(a) Set the tone and influence the culture of risk management within the company / group. This includes:
(i) communicating approach to risk (ii) determining what types of risk are acceptable and which
are not (iii) setting the standards and expectations of staff with respect
to conduct and probity.
(b) Determine the appropriate risk appetite or level of exposure for the
company / Group (c) Approve major decisions affecting the Company’s risk profile or
exposure (d) Monitor the management of fundamental risks to reduce the
likelihood of unwelcome surprises (e) Receive assurance that the preventable risks are being actively
managed, with the appropriate controls in place and working effectively
(f) Periodically review the Company’s approach to risk management
and approve changes or improvements to key elements of its processes and procedures.
IV Role of Management:
(1) Role of the Chief Executive Officer and Senior Management is to:
(a) Implement policies on risk management and internal control (b) Identify and evaluate the fundamental risks faced by the company
/ Group for consideration by the Board/Committee
(c) Provide adequate information in a timely manner to the Board/Committee on the status of risks and controls
(d) Undertake periodical review of effectiveness of the system of
internal control and provide a report to the Board/Committee V Risk Management Process:
(1) Conscious that no entrepreneurial activity can be undertaken without
assumption of risks and associated profit opportunities, the Group operates a Risk Management Process /Framework aimed at minimization of identifiable risks after evaluation so as to enable management to take informed decision
(2) Operationalization of the Framework is entrusted by Board to an empowered Committee (Audit Committee/ Risk Management Committee) which in turn is supported by a team comprising (i) Chief Executive Officer (ii) Heads of Business and Support Functions (iii) Risk Coordinator / Risk Champions. The tiered structure of the Risk Organization ensures uniform appreciation and understanding of the risk process and culture across the organization
(3) Broad outline of the framework is as follows:
(a) Risk Identification: Management identifies potential events that
may positively or negatively affect a company’s ability to implement its strategy and achieve its objectives and performance goals. Potentially, negative events represent risks and are assigned a unique identifier. The identification process is carried out based on a collegium approach so that an expansive risk identification covering operations and support functions are put together and dealt with
(b) Root Cause Analysis: Undertaken on a consultative basis, Root
Cause Analysis enables tracing the reasons / drivers for existence of a risk element and helps developing appropriate mitigation action
(c) Risk Mitigation Plan: Management develops appropriate
responsive action on review of various alternatives, costs and benefits, with a view to managing identified risks and limiting the impact to tolerance level. Risk Mitigation Plan drives policy development as regards risk ownership, control environment timelines, standard operating procedure (SOP) etc
Risk Mitigation Plan is the core of effective risk management. The
mitigation plan covers:
(i) Required Action
(ii) Required Resources
(iii) Responsibilities
(iv) Timing
(v) Performance Measures and
(vi) Reporting and Monitoring requirements
Hence it is drawn up in adequate precision and specificity to manage identified risks in terms of documented approach (accept, avoid, reduce, share) towards the risks with specific responsibility assigned for management of the risks. This is an auditable document and an inter temporal comparison of the mitigation plan is expected to signal improving direction
(d) Risk Scoring: Management considers qualitative and quantitative
methods to evaluate the likelihood and impact of identified risk elements. Likelihood of occurrence of a risk element within a finite time is scored based on polled opinion or from analysis of event logs drawn from the past. Impact is measured based on a risk element’s potential impact on cost, revenue, profit etc. should the risk element materialize. The composite score of impact and likelihood are tabulated in an orderly fashion and the table is known as Risk Register (RR)
(e) Risk Categorization: The identified risks in RR are grouped in to
(i) External (ii) Strategic and (iii) Preventable categories to homogenize risks
(i) Preventable Risks are largely internal to organization and are operational in nature. The endeavor is to reduce / eliminate the events in this category as they are controllable. SoPs and Audit Plans are relied upon to monitor and control such internal operational risks that are preventable
(ii) Strategy Risks are voluntarily assumed risks by the Senior Management in order to generate superior returns / market share from its strategy. Approaches to strategy risk is ‘Accept’ /‘Share’, backed by a risk-management system designed to reduce the probability that the assumed risks actually materialize and to improve the company’s ability to manage or contain the risk events should they occur
(iii) External risks arise from events beyond organization’s influence or control. They generally arise from natural and political disasters and major macroeconomic shifts. Management regularly endeavors to focus on their identification and impact mitigation through ‘avoid’ / ‘reduce’ approach that includes measures like Business Continuity Plan / Disaster Recovery Management Plan / Specific Loss Insurance / Policy Advocacy etc
(f) Risk Prioritization: Based on the composite scores, risks are prioritized for mitigation actions and reporting
(g) Risk Monitoring: is designed to assess on an ongoing basis, the
functioning of risk management components and the quality of performance over time. Staff members are encouraged to carry out assessments throughout the year.
(h) Risk Reporting: Periodically key risks are reported to Board or
empowered committee in the form of Heat Maps and Bubble Maps with causes and mitigations undertaken / proposed to be undertaken. Preventable risks are attempted to be managed through operationalization of SOP and monitoring of exceptions. Strategic Risks are discussed by the empowered committee in details and directions provided for acceptance / avoidance / reduction / sharing. External Risks are taken note of and direction of the risks monitored by the Board / empowered committee
VI Periodical Review of Effectiveness
Effectiveness of Risk Management Framework is ensured through periodical Internal Audits and Statutory Audits. These play an important validation role to provide assurance to Board / empowered committee that the critical processes continue to perform effectively, key measures and reports are reliable and established policies are in compliance
VII Summation:
The above framework is proposed as a broad risk management policy of the Company
ANNEXURE VI
DETAILS OF EMPLOYEE PURSUANT TO 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
The Board’s report shall include a statement showing the name of every employee of the company, who-
designation of
the employee; remuneration received;
nature ofemployment, whether contractual orotherwise
qualifications and experience of the employee;
date ofcommencement of employment;
the age of such employee;
the last employment held by such employee before joining the company
the percentage of equity shares held by the employee in the company within the meaning of clause (iii) of sub-rule (2) above; and -
whether any such employee is a relative of any director or manager of the company and if so, name of such director or manager: -
if employed throughout the financial year, was in receipt of remuneration for that year which,
A K Krishnakumar,
Executive Director
9,572,171 Permanent Ph. D from I.I.T, Kharagpur with 37 years of experience
02-10-2011 60 years Rubber Production
Officer and Ex Officio
member of the Rubber Board
NA No
in the aggregate, was not less than sixty lakh rupees –
if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month; -
- - - - - - - - -
if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the
- - - - - - - - -
aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company. -
By Order of the Board For IL&FS Cluster Development Initiative Limited
Hari Sankaran Chairman
Place: - Mumbai Date: - May 11, 2016
