Corporate Governance

Corporate Governance

NOMINATION AND REMUNERATION POLICY OF THE COMPANY

In pursuance of the Company’s policy to consider human resources as its invaluable assets, to pay equitable remuneration to all Directors, Key Managerial Personnel and employees, to harmonize the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 as amended from time to time, this policy is being formulated.

The Board of Directors of Prem Somani Financial Services Limited. (“the Company”) constituted the Committee known as “Nomination and Remuneration Committee”. All the members of the Committee are non-executive directors with at least one-half of them being independent.

The policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Committee and approved by the Board of Directors.

OBJECTIVE AND PURPOSE OF THE POLICY:

1. OBJECTIVE:

The Nomination and Remuneration Committee and this Policy shall be in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto. The Key Objectives of the Committee would be:

  • To guide the Board and lay down criteria in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.
  • To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation.
  • To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.
  • 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.
  • To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
  • To devise a policy on Board diversity.
  • To develop a succession plan for the Board and to regularly review the plan.
  • To assist the Board in fulfilling all related responsibilities.

The Nomination and Remuneration Policy has been formulated in order to bring about objectivity in determining the remuneration package while striking a balance between the interest of the Company and the shareholders.

2. DEFINITIONS:

  1. “Act” means the Companies Act, 2013 and Rules framed there under, as amended from time to time.
  2. “Board” means Board of Directors of the Company.
  3. “Directors” mean the Directors of the Company.
  4. “Key Managerial Personnel” (“KMP”) means:
    1. Chief Executive Officer or the Managing Director or the Manager;
    2. Whole-time director;
    3. Chief Financial Officer;
    4. Company Secretary; and
    5. Such other officer as may be prescribed under the Act.
  5. “Senior Management” means officer/ personnel of the company who are members of its core management team excluding the Board of Directors, comprising of all members of management one level below the Executive Directors including Functional Heads.

3. CONSTITUTION OF THE NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors of the Company (the Board) constituted the committee to be known as the Nomination and Remuneration Committee consisting of three non-executive directors out of which at least one half shall be Independent. The Chairman of the Committee shall be an Independent Director.

The Board has the power to reconstitute the Committee consistent with the Company’s policy and applicable statutory requirement.

Applicability The Policy is applicable to:

  • Directors (Executive and Non-Executive Directors)
  • Key Managerial Personnel (“KMP”)
  • Senior Management Personnel

4. ROLE OF COMMITTEE:

The Committee shall:

  • To guide the Board and lay down criteria in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.
  • To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation.
  • To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.
  • 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.
  • To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
  • To devise a policy on Board diversity.
  • To develop a succession plan for the Board and to regularly review the plan.
  • To assist the Board in fulfilling all related responsibilities.

5. APPOINTMENT CRITERIA AND QUALIFICATIONS:

The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointmentas Director, KMP or at Senior Management level and recommend to the Board his / her appointment. Criteria for identifyingpersons who are qualified to be appointed as a Directors / KMP /Senior Management Personnel of the Company:

a) Directors
Section 164 of the Companies Act, 2013 states disqualifications for appointment of any person to become Director of any Company. Any person who in the opinion of the Board is not disqualified to become a Director, and in the opinion of the Board, possesses the ability, integrity and relevant expertise and experience, can be appointed as Director of the Company.

b) Independent Directors
For appointing any person as an Independent Director he/she should possess qualifications as mentioned in Section 149 of the Act along with rules made there under and Regulation 16 (1)(b) of the Securities And Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

c) Senior Management Personnel and KMP
The Company has an hierarchy structure displaying positions of Senior Management including KMP and other positions with the minimum qualifications and experience requirements for each positions which commensurate with the size of its business and the nature and complexity of its operations. Any new recruitment in the Company is to match the requirements prescribed inthe hierarchy structure of the Company.
A person should possess adequate qualification, expertise and experience for the position he/ she is considered forappointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by aperson are sufficient / satisfactory for the concerned position.

d) Term / Tenure

  • Managing Director/Whole-time Director/Independent Director:
    The Committee shall ensure that the appointment and reappointment of any director as above is carried out as per rules and regulations listed under the Companies Act, 2013 along with other relevant laws.

  • Independent Director:
    The maximum tenure of Independent Directors shall be in accordance with the Companies regard, from time to time. At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Act.

e) Criteria for Evaluation
The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management Personnel at regular interval.

  • Criteria for evaluating Non-executive Board members:
    Section 149 of the Companies Act, 2013 read with Schedule IV of the said Act states that the Independent Directors shall at their separate meeting review performance of non- independent directors and the Board as a whole and the performance evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Director being evaluated.

  • Criteria for evaluating performance of Key Managerial Personnel and Senior Management Personnel
    Criteria for evaluating performance of KMP and Senior Management Personnel shall be as per the HR Guideline on Performance Management System and Development Plan of the Company.
    a) Removal
    Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations there under,the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations.

6. REMUNERATION FOR THE MANAGING DIRECTOR/WHOLE-TIME DIRECTOR, KMP AND SENIOR MANAGEMENT PERSONNEL

  • The remuneration to the Managing Director, Whole-time Director, KMP and Senior Management Personnel will be determined by the Committee and berecommended to the approval its approval there on. The remuneration / compensation / commission etc. shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required.
  • The remuneration and commission to be paid to the Managing Director/Whole-time Director shall be in accordance with the percentage / slabs /shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force or as per the policy of the company & on-going industrial norms.

    • a) Sitting Fees
    In view of the present financial position of the Company no Director is entitled to receive remuneration by way of fees for attending meetings of Board or Committee there of. Provided, Board is empowered to fix the sitting fees for the Directors, however,the amount of such fees shall not exceed Rs. One lakh per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time.

    b) Commission
    Commission may be paid within the monetary limit approved by shareholders subject to the limit not exceeding 1% of the profitsof the Company computed as per the provisions of Section 197 the Companies Act, 2013.

7. STOCK OPTIONS
An Independent Director shall not be entitled to any stock option of the Company.

8. MEMBERSHIP, FREQUENCY OF MEETINGS

  • Chair person of the Committee shall be an Independent Director.
  • The Committee shall consist of a minimum 3 non-executive directors, all of them being independent.
  • Membership of the Committee shall be disclosed in the Annual Report.
  • Term of the Committee shall be continued unless terminated by the Board of Directors.
  • The meeting of the Committee shall be held at such regular intervals as may be required.

9. SECRETARY
The Company Secretary of the Company shall act as Secretary of the Committee.

10. MINUTES OF COMMITTEE MEETING
Proceedings of all meetings must be minutised and signed by the Chairman of the Committee as per the provisions of the Act and other applicable provisions.

11. COMMUNICATION OF THIS POLICY
For all Directors, a copy of this Policy shall be handed over with in one month from the date of approval by the Board. This Policy shall also be posted on the web-site of the Company.

12. AMENDMENT
Any change in the Policy shall, on recommendation of Nominations and Remuneration Committee, be approved by the Board of Directors of the Company. The Board of Directors shall have the right to withdraw and / or amend any part of this Policy or the entire Policy, at any time, as it deems fit, or from time to time, and the decision of the Board in this respect shall be final and binding.