· share capital. equity capital of ... skill training management partners limited has become 100%...

Board‟s Report ________________________________________________________________________ The Shareholders, IL&FS EDUCATION & TECHNOLOGY SERVICES LIMITED Your Directors have pleasure in presenting the Nineteenth 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 The standalone performance of the Company for the financial year ended March 31, 2016 is summarized below:

(Rupees in mn)

Sr. No

Particulars For the year ended 31.3.2016

For the year ended 31.3.2015

1 Income from Operations 4,293 4,401

2 Gross Profit/(Loss) 408 496

3 Depreciation and Amortization

65 62

4 Profit/Loss before taxation 343 434

5 Provision for Current Income Tax

133 154

6 Provision for Deferred Tax (22) (1)

7 Profit/(Loss) after taxation 232 281

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OPERATIONAL REVIEW / YEAR IN RETROSPECT Your Company has earned Profit before tax of Rs. 343 Mn in FY 2016 as against profit of Rs. 434 Mn in FY 2015. The Company witnessed decrease in revenue from Rs. 4,401 Mn in FY 2015 to Rs. 4,293 Mn in FY 2016 and reasons for decrease in revenue and profits is due to following:

(i) The revenue during FY 2016 is primarily from existing mandates and only Pondicherry ICT as new mandate materialized during the period. The anticipated mandates at Bihar ICT for 277 Schools and Daman & Diu for 64 Schools were extended for the FY 2017

(ii) The other large value K-Yan sales transactions could not be completed by March 31, 2016 and would now materialize in FY 2017 which resulted in carrying over of inventory valued Rs 132 mn

(iii) Delay in release of payment from the Government departments and requirement of funds for the implementation of ongoing ICT projects necessitated the Company to incur additional debt which resulted in higher interest cost

DIVIDEND Your Directors have recommended payment of final dividend @ 30% i.e Rs. 3/- per Equity Share, amounting to Rs. 132 mn inclusive of dividend tax The above dividend would be subject to the approval by the Members in the ensuing Annual General Meeting

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UNCLAIMED DIVIDEND Pursuant to the provisions of Section 124 of the Companies Act, 2013, the dividend for the under-mentioned years, if unclaimed for 7 years, will be transferred by the Company to the IEPF Financial Year

Date of declaration

Total Dividend Declared exclusive of Dividend Tax

Unclaimed dividend

Due Date for transfer to Investor Education and Protection Fund on

2008- 2009 August 4, 2009

Rs. 80,795,588 Rs. 17,375 September 9, 2016

2010-2011 September 20, 2011

Rs. 100,000,000 Rs. 30,700 October 26, 2018

2011- 2012 September 28, 2012

Rs. 150,136,584 Rs. 27,800 November 3, 2019

2013- 2014 August 21, 2014 Rs. 131,369,511 Rs. 38,952 September 26, 2021

2014 - 2015 September 21, 2015 Rs. 131,369,511 Rs. 35,452 October 26, 2022

In case you have any unclaimed dividend(s)/ refund order in respect of the financial years mentioned above. Please write to the below address for claiming the respective amounts before the due date mentioned above i.e before the due date to transfer the respective unclaimed dividend to IEPF Address: The Company Secretary/Secretarial & Legal Department Aditya Textiles Inds. Compound, Corduroy Bldg, Second Floor, Unit No.1, Safed Pool, Andheri Kurla Road, Mumbai- 400 072 RESERVES The Company proposes to transfer an amount of Rs. 179 mn to the Debenture Redemption Reserve. The Company does not propose to transfer any amount to the General Reserves.

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SHARE CAPITAL Equity Capital of the Company is Rs. 375.34 mn. During the year under review there was no change in the shareholding pattern of the Company

DEPOSITS Your Company has not accepted any Fixed Deposits during the year under review PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company has not given any loans or provide guarantees covered under the provisions of section 186 of the Companies Act, 2013 during the year under review. However, following investment has been made in following subsidiaries during the year: Name of the entity

Number of shares acquired during the year

Post acquisition holding %

Effective date of investment

Skill Training Management Partners Limited

5000000 Equity Shares of Rs 10/- each

100 September 28, 2015

IL&FS Skills Development Corporation Limited

10850000 Equity Shares of Rs 10/- each

80.01 March 10, 2016

RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm‟s length basis and no transaction have been undertaken requiring approval under sub-section (1) of section 188 of the Companies Act, 2013. Thus, disclosure in Form AOC-2 is not required. During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material 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

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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 Your Company has following subsidiaries as on March 31, 2016:

(i) IL&FS Cluster Development Initiative Limited; Direct Subsidiary (ii) IL&FS Skills Development Corporation Limited; Direct Subsidiary (iii) Skills Training Assessment Management Partners Limited; Direct Subsidiary# (iv) APPTEX Marketing Services & Solutions Limited; Indirect Subsidiary

(Via IL&FS Cluster Development Initiative Limited) (v) Rajsamand Rural Development Initiative Limited; Indirect Subsidiary*

(Via IL&FS Cluster Development Initiative Limited) (vi) Jaipur Rural Development Initiative Limited; Indirect Subsidiary*

(Via IL&FS Cluster Development Initiative Limited) (vii) Dehradun Rural Development Initiative Limited; Indirect Subsidiary*

(Via IL&FS Cluster Development Initiative Limited)

#Skill Training Management Partners Limited has become 100% wholly owned subsidiary w.e.f September 28, 2015 (Earlier indirect subsidiary via IL&FS Cluster Development Initiative Limited) *Closure application under Fast Track Exit (FTE) Scheme for these companies was filed during the year and currently under process of striking off

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 all its subsidiaries, which form part of the Annual Accounts of your Company except Jaipur Rural Development Initiative Limited, Rajsamand Rural Development Initiative Limited and Dehradun Rural Development Initiative Limited, indirect subsidiaries which are under the process of striking off. 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

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COMPANY‟S AFFAIRS: (I) Operating Environment

FY 2016 was a year of firming up of policies related to the businesses of the Company. National Skill Development and Entrepreneurship Policy, 2015 was launched and a National Skill Development Mission (NSDM) was set up to steer the agenda of skilling 400 mn Indians by 2025. With 'Make in India' campaign gaining momentum, the investments in manufacturing are slowly picking up and thus creating demand for cluster development services. The new policy on education is on the anvil, which would provide greater emphasis on technology adoption for enhancing the learning outcomes The Company has also been able to diversify the services across the geographies, particularly foreign countries, and client profile and as IETS Group continued to maintain its leadership position in all the 3 segments: Education, Skill development and Clusters

(II) Salient feature of the operations : The following are the salient features of the

operations during FY 2016: (A) Education:

- ICT@Schools : In addition to existing mandates in 5 States, the

computer labs projects at Himachal Pradesh and West Bengal, have been successfully implemented during FY 2016. The Company has obtained fresh mandates in Bihar and Puducherry for implementation in FY 2017 covering 409 schools. With all these mandates, the Company is present through its ICT@Schools Project in 8 States and impacting 10 million students

- The new K-Yan Pro (with interactivity features) has generated global interest and found buyers in domestic and international markets

- The Company has developed an integrated School Improvement Programme named 'Learning Enrichment and Advancement Programme (LEAP)‟. The Company is implementing this integrated solution including Computer labs, K-Yan, Content, Activity based learning tools and Teacher Training and is receiving positive response from CSR and other clients. The Company has been implementing LEAP in 300 schools of UP and the solution has generated interest in all CSR clients, private and government schools

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- Google Partnership: In order to leverage the presence of the Company and to foray in B2B/B2C space, the Company has partnered with Google for marketing and promoting its education related solutions. The partnership would deepen the footprints established so far by the Company

(B) Skills: - The Company and its subsidiaries have trained 195000 (approx.)

candidates in the current year, the largest share of training numbers were from the flagship programme of Pradhan Mantri Kaushalya Yojana (PMKVY). Out of these, 20000 trainees were trained under non-Government funded mandates. The Company has been actively training school students across 11 States under the scheme of National Skills Qualification Framework

- Mc kinsey partnership: The Company‟s subsidiary ISDC has acquired fresh contract from Mckinsey Social Initiative (MSI). MSI has allocated 3,500 candidates to be trained in during year in Delhi NCR, Hyderabad and Kolkata

- SEDA Partnership: The Company has entered into a knowledge partnership with Sports Education Development Australia (SEDA Group) for Skill Education and training in sports, recreation, outdoor education and fitness/wellness sectors. 63 candidates were trained in IIS Delhi for „Fitness Instructor‟ course on a self-paid basis

(C) Technology: The Company successfully completed the Build Phase of the National Career Service (NCS) Project of DGE&T. The Company is successfully managing the operations and maintenance of the portal as part of a prestigious project of GoI. The Company is also working on various on line solutions in the education space

(D) Assessment: The subsidiary of the Company, Skills Training Assessment Management Partners Limited (STAMP) has made its foray into the assessments market with an objective to provide quality assessments across various learner segments, i.e. education, skill training, corporates at various stages of assessment

During the period under review, STAMP has been empanelled as an assessing body with 7 Sector Skill Councils and has assessed more than 20,000 candidates in the skills training space. Under education space, STAMP has

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assessed 6000 (approx.) school children. Various banks and corporates are utilizing technology platform of STAMP and till date, 140000 corporate employees have been assessed using the same

(E) Clusters: The Company through its subsidiary ICDI is working across sectors

like textiles, automobiles, electronics, tooling and food processing. The Company also generated new leads in cluster projects as there is impetus in manufacturing sector due to „Make in India‟ campaign of GoI

(III) Initiatives across all businesses of the Company:

(i) Corporate Social Responsibility: With the provision in the Companies Act, 2013 for spending 2% of average net profit of last 3 years, CSR Practice has broadened the client base by 30 corporates. These corporates include both public and private sector, and some of them are: GAIL, OIL India, NTPC, HPCL and few other major companies are Maruti Suzuki, Toyota etc. Services availed by these corporate include, placement linked programmes, School improvement programmes and personal hygiene related soft skills programme

(ii) Global Business :

- Under Education vertical: During the year, the Company focused in making its footprints globally and as a result the Company has received the first orders for supply of K-YAN (proprietary product of IETS) from Oman and Philippines. The next step in this would be to take other offerings to global markets

- Under Clusters Vertical: The Company through its subsidiary, ICDI has been implementing projects awarded by Ministry of Commerce, USAID etc. mainly in African countries

(IV) Prognosis and strategic objectives for FY 2017

(i) The Company has drawn ambitious plans to enhance its technology enabled offerings in education and skills services that will enable reaching out the clients beyond the government (B2B and B2C). The core of such strategy is the technology innovation centered on the Cloud-Mobile access, delivered through a blended learning model and the necessary platforms are being developed. The partnership with Google would significantly help this blended learning model

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(ii) The Company, with its vast reach and presence across India, has a potential

customer base of 600 million students, teachers, youth, parents, enterprises and the community at large. A strategy would be designed and executed to leverage this massive foot-print and customer base

(iii) Under the skills business, the new initiatives related to assessments and

entrepreneurship development would further be focused (iv) Expansion of services in select countries of Africa, Middle East and South

East Asia, would be a focus area for the year 2017

(v) While incubating and launching new initiatives, as mentioned above, greater focus would be on resource optimisation and the talent building

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

1 Mr. RCM Reddy Managing Director

2 Ms. Daisy Khanna Company Secretary

3 Mr. Amitabh Jain

Chief Financial Officer

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(2) Directors: During the year no changes took place in the Board of Directors of the Company, which consist of following:

Sr. No. Name of Directors

Designation

1 Mr. Ravi Parthasarathy Chairman

2 Mr. Hari Sankaran

Vice Chairman

3 Mr. R C M Reddy Managing Director

4 Mr. A.I. Malhotra Independent Director

5 Mr. Sudhir Mankad Independent Director

6 Mr. A Sakthivel Independent Director

7 Mr. Kumar Krishnan Iyer Nominee Director

8 Mr. Pranay Adhvaryu Nominee Director

9 Dr. Archana Hingorani Director

(3) Directors liable to retire by rotation:

As per the provisions of Companies Act, 2013, one third of the rotational Directors shall 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. Ravi Ramaswamy Parthasarathy (holding DIN 00002392) 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 of Directors Designation 1 Mr. Arvind Inder Malhotra Independent Director

2 Mr. Sudhir Mankad Independent Director

3 Mr. A Sakthivel Independent Director

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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

(5) Formal Annual Evaluation

Evaluation by Nomination and Remuneration Committee: In accordance with the provisions of Section 178 (2) of the Companies Act, 2013, the Nomination and Remuneration Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Board as whole was also evaluated as per the criteria laid down in the Nomination and Remuneration policy of the Company. The Nomination and Remuneration Policy for Directors and KMP is annexed herewith as Annexure II Evaluation by the Board: The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the Section 134 (3) (p) of the Companies Act, 2013. The performance of the individual Directors and the Board was evaluated after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc Additionally, in accordance with Schedule IV of the Companies Act, 2013, the Board evaluated the performance of Mr. Arvind Malhotra, Mr. Sudhir Mankad and Mr. Arumugam Sakthivel as Independent Directors in exercising independent judgment, ability to contribute to objectives and monitor corporate governance practice in the best interest of Company and placed on record its appreciation for the role being played by them Evaluation by the Independent Directors: In a separate meeting of Independent Directors held on December 21, 2015, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors and also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board

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DIRECTORS‟ RESPONSIBILITY STATEMENT In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: (a) in the preparation of the annual accounts, the applicable accounting standards had

been followed along with proper explanation relating to material departures;

(b) 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;

(c) 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;

(d) the directors have prepared the annual accounts on a going concern basis; and

(e) 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;

(f) 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 term of 5 years till the conclusion of Annual General Meeting to be held for FY 2019. Such appointment shall be subject to ratification in the ensuing Annual General Meeting till sixth consecutive annual general 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

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SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed Mr. Sanjay Chugh, Practicing Company Secretary for conducting secretarial audit of the Company for the financial year 2015-2016 A secretarial audit report given by the Practicing Company Secretary is annexed with the Board report as “Annexure III”

NUMBER OF MEETINGS OF THE BOARD

Your Company believes in implementing good corporate governance policies that foster integrity, transparency and accountability for meeting shareholders‟ and stakeholders‟ expectations. In this regard, Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility (CSR) Committee is already functional in the Company

Meeting of the Board of Directors and attendance thereat: Four Board Meetings were held during the year under review. The attendance at these Board Meetings and the previous Annual General Meeting is as under: Dates of Meetings May 18, 2015 August 18,

2015 November 02, 2015

February 04, 2016

Mr. Ravi Parthasarathy Yes Yes Yes Yes Mr. R C M Reddy Yes Yes Yes Yes Mr. Hari Sankaran Yes Yes Yes Yes Mr. Arumugam Sakthivel No Yes Yes Yes Dr. Archana Hingorani Yes No Yes No Mr. Sudhir Gunvantray Mankad

Yes Yes Yes Yes

Mr. Arvind Malhotra Yes Yes Yes Yes Mr. K K Iyer Yes Yes Yes No Mr. Pranay Adhvaryu Yes Yes Yes Yes

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Annual General Meeting was duly convened on September 21, 2015 and was attended by the following Directors:

VARIOUS COMMITTEES During the year, in accordance with the Companies Act, 2013, the Board has five Committees: Audit Committee, Nomination and Remuneration Committee, Share Management 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) The Audit Committee met four times during the year under review, 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:

Director Designation

Mr. Arvind Malhotra Audit Committee, Chairman and Shareholder Nomination & Remuneration Committee, Member

Mr. Pranay Adhvaryu

Nominee Director, Lexington Equity Holdings Limited

Dates of Meetings May 18, 2015 August 18, 2015

November 02, 2015

February 04, 2016

Mr. Arvind Malhotra

Yes Yes Yes Yes

Mr. K K Iyer

Yes Yes Yes No

Mr. Sudhir G Mankad

Yes Yes Yes Yes

Mr. A Sakthivel

No Yes Yes Yes

Dr. Archana Hingorani Yes No Yes No

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(2) Nomination & Remuneration Committee

The role of the Nomination & Remuneration Committee is to review and approve the employee compensation structure including the remuneration paid to the Directors and Managerial Personnel, Performance Related Pay, taking into account the financial position of the Company, trend in the industry, qualification and performance of the concerned managerial person and other matters as may be decided by the Board from time to time

Pursuant to sub-section (1) of section 178, company is implementing a policy on directors‟ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-Section (3) of section 178

During the year under review, Nomination & Remuneration Committee met two times physically, the attendance status of the Members at these meetings is provided below. In addition to below mentioned meetings, one circular resolution was also passed by the Committee for carrying out the evaluation of Directors and the Board on February 03, 2016 Dates of Meetings July 30, 2015 November 02, 2015 Mr. Hari Sankaran Yes Yes Mr. A Sakthivel No Yes Mr. Arvind Malhotra Yes Yes Mr. K K Iyer Yes Yes

(3) Corporate Social Responsibility (CSR) Committee

CSR Committee of Directors as required under Section 135 of the Act, comprise of Mr. K K Iyer, Chairman, Mr. RCM Reddy and Mr. Arvind Malhotra, members of the Committee The broad term of reference of CSR committee is as follows: Formulate and recommend to the Board, a corporate social responsibility

(CSR) policy; Recommend the amount of expenditure to be incurred on the activities

referred to above and Monitor the CSR policy of the Company from time to time;

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During the year, one meeting of the CSR Committee was held on February 04, 2016, the attendance status of the Members at these meetings is provided below

Dates of Meetings February 04, 2016

Mr. K K Iyer

No

Mr. RCM Reddy

Yes

Mr. Arvind Malhotra Yes

In addition, other Committees & forums have been formed comprising of Directors / Senior Executives of the Company for carrying out specific tasks

EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as “Annexure IV”

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in “Annexure V - A & V- B” of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company

VIGIL MECHANISM / WHISTLE BLOWER POLICY: Your Company has formulated and published a Vigil Mechanism / Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns in line with the provisions of the Section 177 (9) of the Act. The Whistle Blower Policy for Employees has been implemented in order to encourage employees to genuinely blow the whistle on any misconduct or unethical activity taking place in the Company. During the year, no such incidence was reported under such mechanism

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There has been no change to the policy during the year and same is available on the Company‟s website: http://www.ilfseducation.com/policy/pdf/VIGILMECHANISMpolicy_IETS.pdf The same is also annexed herewith as “Annexure VI” 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, to the Chairman & Managing Director The Internal Audit Function 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 Companies Act 2013, your Company has initiated the process of review of the existing processes for each functional areas during the year and had engaged a professional firm to evaluate the current processes and policies, 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 is implementing 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 VII” 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)

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http://www.ilfseducation.com/policy/pdf/VIGILMECHANISMpolicy_IETS.pdf

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 2015-16

No. of complaints received: NIL No. of complaints disposed off: NIL

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY‟S OPERATIONS IN FUTURE During the year under review there was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and company‟s operations in future MANAGERIAL REMUNERATION / PARTICULARS OF EMPLOYEES

Details of managerial remuneration and of the every employee of the company as required pursuant to Section 197 (12) of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed herewith as “Annexure VIII - A & B” 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. 30 and 31 (b), (c), (d), (e) & (f) of Notes to the Accounts

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CORPORATE GOVERNANCE CERTIFICATE

The provision of Corporate Governance Compliance certificate from the auditors or practicing company secretaries regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement is not applicable to your Company

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 Education & Technology Services Limited

Ravi Parthasarathy Chairman

Place: -Mumbai Date: - May 11, 2016

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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 IL&FS Cluster

Development Initiative Ltd (Direct Subsidiary)

IL&FS Skills Development Corporation Ltd (Direct Subsidiary)

Skills Training Assessment Management Partners Limited (Direct Subsidiary)

APPTEX Marketing Services & Solutions Limited

(Indirect Subsidiary) Reporting Period March 31, 2016 March 31, 2016 March 31, 2016 March 31, 2016 Reporting currency and Exchange rate in the case of foreign subsidiaries

N.A. N.A. N.A. N.A.

Share capital 120,000,000 419,183,330 50,000,000 500,000 Reserves & surplus 409,860,554 177,365,037 (2,235,142) 78,945 Total assets 2,054,234,544 1,201,291,992 54,590,692 3,667,914 Total Liabilities

1,524,373,990 604,743,625 6,825,834 3,088,969

Investments 2,500,000 - - - Turnover 1,031,023,637 1,041,325,748 51,294,390 14,046,400 Profit / (loss) before taxation 28,581,348 60,094,057 (1,877,360) 3,461,524 Provision for taxation 8,990,676 16,634,601 (1,500,000) - Profit /(loss) after taxation 19,590,672 43,459,456 (377,360) 3,461,524 Proposed Dividend 18,000,000 - - - % of shareholding 100% 80.01% 100% 100%

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Part “B”: Associates and Joint Ventures N.A.

For IL & FS Education & Technology Services Limited

RCM Reddy Arvind Malhotra Managing Director Director Amitabh Jain Daisy Khanna Chief Financial Officer Company Secretary Place: Mumbai Date: May 11, 2016

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ANNEXURE II

Nomination and Remuneration Policy

(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;

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(c) Chief Financial Officer;

(d) Company Secretary; and

(e) such other officer as may be prescribed

(5) 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

23

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

24

(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

25

(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

26

(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

27

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

28

(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‟s 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, 201. 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

29

(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

30

31

Admin

Typewritten Text

ANNEXURE III

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:

i) CIN : U80220MH1997PLC112535

ii) Registration Date : 18.12.1997

iii) Name of the Company : IL&FS Education & Technology Services Limited

iv) Category / Sub-Category of the Company : Company Limited By shares

v) Address of the Registered office and contact details : 3rd Floor, Quadrant „D‟, The IL&FS Financial centre, Plot C-22, G Block, Bandra -Kurla Complex, Mumbai- 400051

vi) Whether listed company : Yes, Debt listed Company vii) Name, Address and Contact details of

Registrar and Transfer Agent, if any : Link Intime India Pvt Limited Add: C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West), Mumbai-78

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 Turnover of the Company

1 Education Services 9992 100%

35

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

Infrastructure Leasing & Financial Service Limited Address: TIFC, Bandra Kurla Complex, Bandra East, Mumbai – 400051

U65990MH1987PLC044571 Holding 68.93% Section 2(46)

2 IL&FS Cluster Development Initiative Limited Address:2nd Floor, Niryat Bhawan, Rao Tula Ram Marg, Opposite Army Research and Referral Hospital, New Delhi - 110057

U70109DL2006PLC153767 Subsidiary 100% Section 2(87)

3 IL&FS Skills Development Corporation Limited Address:2nd Floor, Niryat Bhawan, Rao Tula Ram Marg, Opposite Army Research and Referral Hospital, New Delhi - 110057

U80904DL2011PLC213135 Subsidiary 80.01% Section 2(87)

4 Skills Training Assessment Management Partners Limited Address:2nd Floor, Niryat Bhawan, Rao Tula Ram Marg, Opposite Army Research and Referral Hospital, New Delhi - 110057


5 APPTEX Marketing Services & Solutions Limited Address:2nd Floor, Niryat Bhawan, Rao Tula Ram Marg, Opposite Army Research and Referral Hospital, New Delhi - 110057


6 Dehradun Rural Development Initiative Limited* Address:2nd Floor, Niryat Bhawan, Rao Tula Ram Marg, Opposite Army Research and Referral Hospital, New Delhi – 110057


36

7 Jaipur Rural Development Initiative Limited* Address:2nd Floor, Niryat Bhawan, Rao Tula Ram Marg, Opposite Army Research and Referral Hospital, New Delhi - 110057


8 Rajsamand Rural Development Initiative Limited* Address:2nd Floor, Niryat Bhawan, Rao Tula Ram Marg, Opposite Army Research and Referral Hospital, New Delhi - 110057


*Closure application under Fast Track Exit (FTE) Scheme for these companies have been filed with Registrar of Companies

37

IV Share Holding Pattern (Equity share capital Break up as percentage of Total

equity)

I) 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:

1) Indian a) Individual Nil Nil Nil Nil Nil Nil Nil Nil Nil b) Central Govt.

Nil Nil Nil Nil Nil Nil Nil Nil Nil

C) State Govt.


d)Bodies Corp.


e) Public Companies

25,872,987 Nil 25,872,987 68.93 25,872,987 Nil 25,872,987 68.93 Nil

e) Banks / FI Nil Nil Nil Nil Nil Nil f) any other Pvt.Companies)

Nil Nil Nil - -

Sub –Total (A) (1)

25,872,987 Nil 25,872,987 68.93 25,872,987 Nil 25,872,987 68.93 Nil

2) Foreign a) NRIs/ Individuals


b) Other Individuals


c) Public Companies


c)Bodies Corp.


d) Banks / FI


e) any other…..


Sub- Total (A) (2)


Total shareholdings of promotes A= A(1)+ (2)

25,872,987 Nil 25,872,987 68.93 25,872,987 Nil 25,872,987 68.93 Nil

38

B. Public Share holding 1. Institutions

a)Mutual funds


b)Banks / FI Nil Nil Nil Nil Nil Nil Nil Nil Nil c)Central Govt.


d)State Govt. (s)


e)Venture capital funds


f)Insurance Companies


g)FIIS Nil Nil Nil Nil Nil Nil Nil Nil Nil h)Foreign VC funds


i)Body corps.

11,594,255 Nil 11,594,255 30.89 11,594,255 Nil 11,594,255 30.89 Nil

j)Other (specify)


Sub-Total(B)1

11,594,255 Nil 11,594,255 30.89 11,594,255 Nil 11,594,255 30.89 Nil

2. Non- Institutions

a) Bodies Corp.


b) Individuals

58,104 8800 66,904 0.18 58,104 8800 66,904 0.18 Nil

c) Others (Specify)


Sub-total (B) (2)

58,104 8800 66,904 0.18 58,104 8800 66,904 0.18 Nil

Total Public shareholding (B)= B(1) + B (2)

11,652,359 8800 11,661,159 31.07 11,652,359 8800 11,661,159 31.07 Nil

C. Shares Held by Custodian for GDRs & ADRs


Grand Total

A+B+C 37,525,346 8800 37,534,146 100 37,525,346 8800 37,534,146 100 Nil

39

II) Share Holding of Promoters:

S No Shareholders 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 Infrastructure Leasing & Financial Services Limited

25,872,987

68.93 NIL 25,872,987 68.93 NIL NIL

Total 25,872,987 68.93 NIL 25,872,987 68.93 NIL NIL

III) Change in Promoters‟ Shareholding: NIL

Sl. 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


At the beginning of the year

25,872,987 68.93 25,872,987 68.93

Date wise Increase / Decrease in Promoters Share holding during the Year specifying the reasons for increase / decrease (e.g. allotment / transfer /bonus/ Sweat equity etc.

NIL NIL NIL NIL

At the end of the year

25,872,987 68.93 25,872,987 68.93

40

IV) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

S. No.

For Each of the Top 10

Shareholders 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 shares of

the company

1.

Lexington Equity Holdings Limited

At the beginning of the year 9,806,915 26.12 % 9,806,915 26.12 %

Date wise Increase / Decrease in Share holding during the Year specifying the reasons for increase /decrease (e.g. allotment / transfer /bonus / sweat equity etc):

NIL NIL NIL NIL

At the End of the year 9,806,915 26.12 % 9,806,915 26.12 % 2.

IL&FS Employee Welfare Trust

At the beginning of the year 1,787,340 4.77% 1,787,340 4.77%


NIL NIL NIL NIL

At the End of the year 1,787,340 4.77% 1,787,340 4.77%

3. Others

At the beginning of the year 66,904 0.18% 66,904 0.18%


NIL NIL NIL NIL

At the End of the year 66,904 0.18% 66,904 0.18%

41

V) Shareholding of Directors and Key Managerial Personnel:

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


1. Mr. Ravi Parthasarathy, Chairman

NIL NIL NIL NIL

2. Mr. RCM Reddy, Managing Director

NIL NIL NIL NIL

3. Mr. Hari Sankaran Vice Chairman

NIL NIL NIL NIL

4. Mr. A. Sakthivel Director

NIL NIL NIL NIL

5. Mr. Arvind Malhotra Director

At the Beginning of the year

1000 0.002 1000 0.002

Date wise Increase /Decrease in Shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment /transfer /bonus/sweat equity etc):

NIL NIL NIL NIL

At the end of the year 1000 0.002 1000 0.002 6. Dr. Archana Hingorani

Director NIL NIL NIL NIL

7. Mr. K K Iyer Director

NIL NIL NIL NIL

8. Mr. Sudhir G. Mankad Director

NIL NIL NIL NIL

9. Mr. Pranay Adhvaryu Director

NIL NIL NIL NIL

10. Mr. Amitabh Jain ( Chief Financial Officer )

NIL NIL NIL NIL

11. Ms. Daisy Khanna ( Company Secretary )

NIL NIL NIL NIL

42

V INDEBTEDNESS

Secured Loans excluding deposits

Unsecured Loans

Debentures Total Indebtedness

Indebtedness at the beginning of the financial Year i) Principal Amount

767,155,384 - 4,000,000,000 4,767,155,384

ii) Interest due but not paid

- - - -

iii) Interest accrued but not due

- - 93,277,721 93,277,721

Total (i+ii+iii) 767,155,384 - 4,093,277,721 4,860,433,105

Change in Indebtedness during the financial Year

Addition 844,989,399 1,666,330,490 - 2,511,319,889

Reduction (500,000,000) - (497,401,734) (997,401,734)

Net Change 344,989,399 1,666,330,490 (497,401,734) 1,513,918,155

Indebtedness at the end of the financial year

i) Principal Amount 1,112,144,783 1,661,998,333 3,512,000,000 6,286,143,116

ii) Interest due but not paid

- - - -

iii) Interest Accured but not due

4,332,157 83,875,987 88,208,144

Total (i+ii+iii) 1,112,144,783 1,666,330,490 3,595,875,987 6,374,351,260

43

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or

Manager:

S. no.

Particulars of Remuneration

Mr. RCM Reddy, Managing Director

Total Amount

(in Rs.) 1. Gross salary (a) Salary as per provisions

contained in section 17(1) of the Income-tax Act, 1961

4,500,000 4,500,000

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

83,925 83,925

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

- -

2. Stock Option - - 3. Sweat Equity shares - - 4. Commission

- As % of profit - Others

- -

5. Others* 18,730,633 18,730,633 Total (A) 23,314,558# 23,314,558

Overall Ceiling as per the Companies Act, 2013

Rs. 17,168,043/- (Being 5% of the Net Profits of the Company as calculated under Section 198 of the Companies Act, 2013)

*Others include consultancy fee, Provident Fund and Superannuation upto Rs. One Lac (Superannuation above One Lac is a part of tax perquisite)

#Mr. RCM Reddy remuneration included remuneration of Rs.22,070,000/- approved by the Central Government for the period April 01, 2015 to January 20, 2016 vide order No. SRN C44779510/1/ 2015 - CL.VII dated January 11, 2016. Remuneration for the re-appointment period from January 20, 2016 till March 31, 2016 paid in accordance with the pro-rata limit of 5% as laid under Section 197 of the Companies Act, 2013

44

B. Remuneration to other Directors:

S. No.


Name of Directors

Total Amount (in Rs.)

A Shaktivel Arvind Malohtra Sudhir Mankad - 1. Independent Directors

Fee for attending Board/ Committee meetings 1,40,000 2,40,000 1,80,000 5,60,000

Commission NIL NIL NIL NIL Others, please specify NIL NIL NIL NIL

Total (1) 1,40,000 2,40,000 1,80,000 5,60,000

2. Other Non-Executive Directors

Ravi Parthasarathy

Hari Sankaran Archana Hingorani

Fee for attending Board/ Committee meetings 80,000 1,20,000 80,000 2,80,000

Commission NIL NIL NIL NIL Others NIL NIL NIL NIL

Total (2) 80,000 1,20,000 80,000 2,80,000 Total (B) = (1 + 2) 8,40,000

Total Managerial Remuneration

NIL

Overall Ceiling as per the Companies Act, 2013

Rs. 3,433,609/- (Being 1% of the Net Profits of the Company as calculated under Section 198 of the Companies Act, 2013)

45

C. Remuneration to Key Managerial Personnel other than

MD/Manager/WTD S. No.


Key Managerial Personnel

Amitabh Jain, Chief Financial Officer (CFO)

Daisy Khanna, Company Secretary

Total (in Rs.)

1.

Gross Salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

- 2,956,980 7,456,980

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

- 10,599 94,524

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

- - -

2

Stock Option - - -

3

Sweat Equity - - -

4.

Commission - As % of profit - Others

-

-

-

5.

Others* 7,200,000 65,520 25,996,153

Total 7,200,000 3,033,099 33,547,657 *Others include consultancy fee, Provident Fund and Superannuation upto Rs. One Lac (Superannuation above One Lac is a part of tax perquisite)

VII 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

For IL&FS Education & Technology Services Limited


Place: Mumbai Date: 11 May 2016

46

ANNEXURE V – A

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

IL&FS Education & Technology Services Limited

(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 Education and Technology Services Limited (IL&FS Education) 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 : IL & FS EDUCATION aims at evolving CSR

policies under a „Public Private Community Partnership‟ framework with the following goals: (a) Attain strategic and long term partnership with community through

education and vocational skills and livelihoods pursuant to Schedule VII read with Section 135 of the Companies Act 2013

(b) Address social and environmental impact of businesses (c) Align with the company‟s vision (d) Make an impact investment (e) Nurture the interests of all stakeholders in the business (f) Projects which are sustainable, replicable, scalable & reliable

(3) Focus Areas:

(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 : 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

(c) Discretionary initiatives: In order to enable need based support to projects,

it is also recommended to provide for a discretionary allocation towards such requirements.

47

(4) Activities for Approval for FY 2015 (a) Skills Development : Support Skills scholarships under Nalanda Foundation

(b) School improvement programme : 2 stressed schools have been identified (one in Delhi/ NCR and the other in Mumbai) under Educational trusts for minorities/ marginalized children

(c) Discretionary initiatives : Following are recommended that could be taken up for FY 2015:

(i) To use infrastructure in government schools to support life skills programmes through e-learning, specifically in Adolescent Health and Financial literacy, and/or

(ii) To support educational interventions under area development plan in Tiyulia, Uttar Pradesh in convergence with IL&FS CSR commitments

(5) 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

(6) 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;

48

(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

(7) Disclosure of the Policy: As per the Act, IL&FS Education 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

(8) Implementation

To implement the Company's CSR Programmes through Nalanda Foundation or 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.

(9) 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

49

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.

(10) 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

50

ANNEXURE V - 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

The details are also provided in the CSR policy which is available on the website of the Company: http://www.ilfseducation.com/pdf/policy/IETS_CSRPolicy.pdf

1. Composition of CSR committee

Sr. No. Name of the Director Designation

(i) Mr. K K Iyer Chairman

(ii) Mr. RCM Reddy Member

(iii) Mr. Arvind Malhotra Member

2. Average net profit of the company for last three financial years:

Average net profit: Rs. 296.37 Mn

51

3. Prescribed CSR Expenditure ( Two percent of the amount as in item 3 above)

The company is required to spend Rs 5.93 Mn

4. Details of CSR spend for the financial year: a) Total amount spent for the financial year : Rs 0.57 Mn b) Amount unspent if any : Rs. 5.36 Mn 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 School improvement Programme, Shafiq Memorial School

Promoting education {Schedule VII (ii)}

Bada Hindu Rao

Central Delhi

0.45 0.49 - 0.49 Direct

2 School improvement programme, Government School, Tiyulia Village

Promoting education {Schedule VII (ii)}

Village Tiyulia

Bareilly 0.21 0.08 - 0.08 Direct

5. Reasons for not spending the amount

CSR initiatives usually involve setting the foundation of various programs at an initial level, getting requisite approvals / feedback and then putting an enhanced sustainable model to ensure maximum benefit to the community. Moreover, few projects could not be completed as per anticipated timelines and therefore, the Company‟s spend on the CSR activities has been less than the limits prescribed under Companies Act, 2013, during the year. The CSR activities identified by the Company are scalable which may be considered in future, moving forward the Company will endeavor to spend on CSR activities in accordance with the prescribed limits

52

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

For IL & FS Education & Technology Services Limited

RCM Reddy K K Iyer Managing Director Chairman of CSR Committee

Place: Mumbai Date: 11 May 2016

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ANNEXURE VI

VIGIL MECHANISM / WHISTLE BLOWER POLICY

I Introduction

(a) IL&FS Education & Technology Services Limited (“IL&FS Education”) and its subsidiaries (collectively addressed as the “Company”) are committed to complying with the domestic and foreign laws that apply to them, particularly ensuring that the business is conducted with integrity and that the Company‟s financial information is accurate

(b) The Company believes in the conduct of the affairs of its constituents in a

fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. Towards this end, the Company has adopted the Code of Conduct (“the Code”) which lays down the principles and standards that should govern the actions of the Company and its employees. Any actual or potential violation of the Code, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the Code cannot be undermined. There is a provision under the Code requiring employees to report violations, which states:

“XXII. Reporting Violations

(a) Responsibility to Report Violations of the Code and Law:

The Covered Persons should promptly report any actual or apparent violations of this Code. Any such reports may be made anonymously. Confidentiality will be maintained, to the extent permitted by law

(b) The Company is committed to developing a culture where it is

safe for all Employees to raise concerns about any poor or unacceptable practice and any event of misconduct”

(c) Section 177(9) of the Companies Act, 2013 (Act) provides for the

institution of the Vigil and Whistle Blowing Mechanism in the specified companies, for employees and Directors to report to the Management instances of unethical behaviour, actual or suspected, fraud or violation of the Company‟s Code of Conduct, in turn to be monitored by the Audit Committee

54

(d) Accordingly, this Whistle Blower Policy (“the Policy”) has been formulated with a view to provide a mechanism for employees and Directors of the Company to approach the designated Ombudsperson and/or the Chairman of the Audit Committee of the Company to report unethical behaviour, actual or suspected, fraud or violation of the Company‟s Code of Conduct and matters specified in this Policy

(e) The Policy protects employees and Directors wishing to raise a concern about serious irregularities within the Company

(f) The Policy neither releases employees and Directors from their duty of confidentiality in the course of discharging their duties, nor is it a route for taking up a grievance about a personal situation

II Policy:

(a) This Policy is for the benefit of the Employees and the Directors as defined hereinafter

(b) The Policy has been drawn up so that Employees and Directors can be confident about raising a concern

III Definitions:

The definitions of some of the key terms used in this Policy are given below. Capitalised terms not defined herein shall have the meaning assigned to them under the Code

(a) Audit Committee : means the Audit Committee constituted by the Board of Directors of the Company in accordance with Section 177 of the Companies Act, 2013

(b) Director : means a person appointed as the Director on the Board of

Directors of the Company (c) Disciplinary Action : means any action that can be taken on the

completion of / during the investigation proceedings including but not limiting to a warning, imposition of fine, suspension from the official duties or any such action as is deemed to be fit considering the gravity of the matter

55

(c) Employee: means every employee of the Company (whether working in

India or abroad), including the expatriates stationed in India and persons engaged on contract

(d) Code : means the Code of Conduct

(e) Investigator: mean those persons authorised, appointed, consulted or approached by the Chairman of the Audit Committee and includes the Statutory and/or Internal Auditors of the Company and the Police

(f) Ombudsperson: will be a Non-Executive Director / Head of Human Resource (HR) / Company Secretary/ Chief Financial Officer for the purpose of receiving all the complaints under this Policy and ensuring appropriate action. In the first instance, the Board shall appoint this Ombudsperson. The Board/Audit Committee shall have the authority to change the Ombudsperson from time to time

(g) Protected Disclosure : means any written or anonymous communication (including email) made in good faith that discloses or demonstrates information that may evidence unethical or improper activity

(h) Subject: means a person against or in relation to whom a Protected

Disclosure has been made or evidence gathered during the course of an investigation

(i) Whistle Blower: means an Employee or a Director making a Protected

Disclosure under this Policy. IV Guiding Principles:

To ensure that this Policy is adhered to, and to assure that the concern will be acted upon seriously, the Company will:

(a) Ensure that the Whistle Blower and/or the person processing the Protected Disclosure is not victimized for doing so;

(b) Treat victimization as a serious matter including initiating disciplinary action on such person/(s);

(c) Ensure complete confidentiality;

56

(d) Not attempt to conceal evidence of the Protected Disclosure; (e) Take disciplinary action, if any one destroys or conceals evidence of the

Protected Disclosure made/to be made; (f) Provide an opportunity of being heard to the persons involved especially to

the Subject

V Scope :

(a) This Policy is an extension of the IL&FS Education Code of Conduct. The Whistle Blower‟s role is that of a reporting party with reliable information. They are not required or expected to act as investigators or finders of facts, nor would they determine the appropriate corrective or remedial action that may be warranted in a given case

(b) Whistle Blowers should not act on their own in conducting any

investigative activities, nor do they have a right to participate in any investigative activities other than as requested by the Chairman of the Audit Committee or the Investigators

(c) Protected Disclosure will be appropriately dealt with by the Ethics

Counsellor or the Chairman of the Audit Committee, as the case may be (d) The Policy covers malpractices and events which have taken place/

suspected to take place involving:

(i) Abuse of authority for personal gain or obtaining undue advantage or to prevent or deprive another of its rights or to the detriment of the Company

(ii) Negligence causing substantial and specific danger to public health

and safety (iii) Manipulation / unauthorized use or disposal of company

data/records (iv) Financial irregularities, including fraud, or suspected fraud (v) Criminal offence (vi) Pilferation of goods, property, confidential/proprietary information (vii) Deliberate violation of law/regulation

57

(viii) Wastage/misappropriation of company funds/assets (ix) Breach of employee Code of Conduct or Rules (x) Any other unethical, biased, favoured, imprudent event

(e) Policy should not be used in place of the Company Grievance

Procedures or be a route for raising malicious or unfounded allegations against colleagues or superiors

VI Eligibility:

All Employees and Directors of the Company are eligible to make the Protected Disclosures under the Policy. The Protected Disclosures may be in relation to matters concerning the Company

VII Disqualifications :

(a) While it will be ensured that genuine Whistle Blowers are accorded complete protection from any kind of unfair treatment as herein set out, any abuse of this protection will warrant a disciplinary action

(b) Protection under this Policy would not mean protection from the

disciplinary action arising out of false or bogus allegations made by a Whistle Blower knowing it to be false or bogus or with a mala fide intention

(c) However, the disciplinary action would be taken based on the principles of

the natural justice and only after giving the reasonable opportunity to the concerned Employee to be heard

(d) Whistle Blowers, who make any Protected Disclosure/s, which have been

subsequently found to be mala fide or malicious or Whistle Blowers who make three or more Protected Disclosures, which have been subsequently found to be frivolous, baseless or reported otherwise than in good faith, will be disqualified from reporting further Protected Disclosures under this Policy for a period of Six months

VIII Manner in which concern can be raised:

(a) Whistle Blower can make Protected Disclosure to Ombudsperson, as soon as possible but not later than 30 consecutive days after becoming aware of the same

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(b) For the purpose of providing the protection to the Whistle Blower, it is preferred that the Whistle Blower should disclose his/her identity in the covering letter forwarding such Protected Disclosure.

(c) Protected Disclosures should be reported in writing (including email) so as to ensure a clear understanding of the issues raised and should either be typed or written in a legible handwriting in English, Hindi or in the regional language of the place of employment of the Whistle Blower. Alternatively, Protected Disclosures can also be reported orally by leaving a voice mail on the following telephone line of the Company (Tel No. 0120-2459200) followed by reporting in writing. Oral reports will normally be documented by the Ombudsperson based on accessing the voice mail by a written transcription of the oral report and written report

(d) The Protected Disclosure should be forwarded under a Covering Letter which shall preferably bear the identity of the Whistle Blower. The Ombudsperson/Chairman of the Audit Committee, as the case may be shall detach the Covering Letter and forward only the Protected Disclosure to the Investigators for investigation

(e) Protected Disclosures should be factual and not speculative or in the nature

of a conclusion, and should contain as much specific information as possible to allow for proper assessment of the nature and extent of the concern

(f) All Protected Disclosures concerning Financial/Accounting matters should

be addressed to the Chairman of the Audit Committee of the Company for investigation

(g) In respect of all other Protected Disclosures, those concerning the employees at the levels of Vice Presidents and above should be addressed to the Chairman of the Audit Committee of the Company and those concerning other employees should be addressed to the Ombudsperson of the Company

(h) The contact details of the Ombudsperson / Chairman of the Audit

Committee are as under: Mr. Amitabh Jain, CFO, Ombudsperson NTBCL Building, Toll Plaza, DND Flyway, Noida: 201 301, Uttar Pradesh E-mail - [email protected] Tel: +91-120-2459 261

59

Mr. Arvind Malhotra, Chairman, Audit Committee NTBCL Building, Toll Plaza, DND Flyway, Noida: 201 301, Uttar Pradesh E-mail - [email protected] Tel: 9821240400

(i) If a Protected Disclosure is received by any Executive of the Company other than Ombudsperson / Chairman of Audit Committee, the same should be forwarded to the Ombudsperson or the Chairman of the Audit Committee for further appropriate action

(j) If initial enquiries by the Ombudsperson indicate that the concern has no

basis, or it is not a matter to be investigated pursuant to this Policy, it may be dismissed at that stage and the decision shall be documented and communicated to the Whistle Blower whose identity is known

(k) Where initial enquiries indicate that further investigation is necessary, this will be carried through either by the Ombudsperson alone, or by the Audit Committee. The investigation would be conducted in a fair manner, as a neutral fact-finding process and without presumption of guilt or wrong doing. A written report of the findings would be made

(l) Name of the Whistle Blower shall not be disclosed to the Audit Committee (m) The Ombudsperson / Audit Committee shall:

(i) Make a detailed written record of the Protected Disclosure. The record will include:

- Facts of the matter - Whether the same Protected Disclosure was raised

previously by anyone, and if so, the outcome thereof; - Whether any Protected Disclosure was raised previously

against the same Subject, and if so, the outcome thereof; IX Investigation:

(a) All Protected Disclosures reported under this Policy will be thoroughly

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mailto:[email protected]

investigated by the Ombudsperson or Chairman of the Audit Committee of the Company who will investigate / oversee the investigations under the authorization of the Audit Committee

(b) The Chairman of the Audit Committee may at his discretion, consider

involving internal Functions/employees and/or outside Investigators for the purpose of investigation.

(c) The decision to conduct an investigation taken by the Chairman of the Audit Committee is by itself not an accusation and is to be treated as a neutral fact-finding process. The outcome of the investigation may not support the conclusion of the Whistle Blower that an improper or unethical act was committed

(d) The identity of a Subject and the Whistle Blower will be kept confidential

to the extent possible given the legitimate needs of law and the investigation

(e) Subject will normally be informed of the allegations at the outset of a formal investigation and have opportunities for providing his/her inputs during the investigation

(f) Subject shall have a duty to co-operate with the Ombudsperson / Chairman of the Audit Committee or any of the Investigators during the investigation to the extent that such co-operation will not compromise self-incrimination protections available to the Subject under the applicable laws

(g) Subject has a right to consult with a person or persons of his/her choice,

other than the Ombudsperson / Investigators and/or members of the Audit Committee and/or the Whistle Blower.

(h) Subject has a responsibility not to interfere with the investigation

(i) Evidence shall not be withheld, destroyed or tampered with, and witnesses shall not be influenced, coached, coerced, threatened or intimidated by the Subject

(j) Unless there are compelling reasons not to do so, Subject will be given the

opportunity to respond to material findings contained in an investigation report. No allegation of wrongdoing against a Subject shall be considered as

61

maintainable unless there is an evidence in support of the allegation (k) Subjects have a right to be informed of the outcome of the investigation. If

allegations are not sustained, the Subject should be consulted as to whether public disclosure of the investigation results would be in the best interest of the Subject and the Company

(l) The investigation shall be completed normally within 30 days of the receipt of the Protected Disclosure

X Protection:

(a) No unfair treatment will be meted out to a Whistle Blower by virtue of his/her having reported a Protected Disclosure under this Policy. The Company, as a policy, condemns any kind of discrimination, harassment, victimization or any other unfair practice being adopted against Whistle Blowers. Complete protection will, therefore, be given to the Whistle Blowers against any unfair practice like retaliation, threat or intimidation of termination/suspension of service, disciplinary action, transfer, demotion, refusal of promotion, or the like including any direct or indirect use of authority to obstruct the Whistle Blower‟s right to continue to perform his duties/functions including making further Protected Disclosures. The Company will take steps to minimize difficulties, which the Whistle Blower may experience as a result of making the Protected Disclosure. Thus, if the Whistle Blower is required to give evidence in criminal or disciplinary proceedings, the Company will arrange for the Whistle Blower to receive advice about the procedure, etc.

(b) A Whistle Blower may report any violation of the above clause to the

Chairman of the Audit Committee, who shall investigate into the same and recommend a suitable action to the Management

(c) The identity of the Whistle Blower shall be kept confidential to the extent

possible and permitted under law

(d) Any other Employee assisting in the said investigation shall also be protected to the same extent as the Whistle Blower

XI Investigators:

(a) Investigators are required to conduct fact-finding and analysis methodically. Investigators shall derive their authority and rights from the Audit Committee when acting within the course and scope of their

62

investigation

(b) Technical and other resources may be drawn upon as necessary to augment the investigation. All Investigators shall be independent and unbiased. Investigators have a duty of fairness, objectivity, thoroughness, ethical behavior, and observance of legal and professional standards

(c) Investigations will be launched only after a Preliminary Review by the Ombudsperson / Chairman of the Audit Committee as the case may be, which establishes that:

(i) the alleged act constitutes an improper or unethical activity or conduct, and

(ii) the allegation is supported by the information specific enough to be

investigated or in cases where the allegation is not supported by specific information, it is felt that the concerned matter is worthy of Management review. Provided that such investigation should be undertaken as an investigation of an improper or unethical activity or conduct

XII Decision:

If an investigation leads the Ombudsperson / Chairman of the Audit Committee to conclude that an improper or unethical act has been committed, the Chairman of the Audit Committee shall recommend to the Management of the Company to take such disciplinary or corrective action as the Chairman of the Audit Committee may deem fit. It is clarified that any disciplinary or corrective action initiated against the Subject as a result of the findings of an investigation pursuant to this Policy shall adhere to the applicable personnel or staff conduct and disciplinary procedures as per the Disciplinary Policies of the Company

XIII Reporting:

(a) The Ombudsperson shall submit a report to the Chairman of the Audit Committee on a quarterly basis about all Protected Disclosures referred to him/her since the last report together with the results of investigations, if any.

(b) Audit Committee in turn shall submit a report to the Chairman of the Board on a regular basis about all Protected Disclosures referred to him/her since

63

the last report together with the results of investigations, if any

(c) Board of Directors shall disclose the details of the establishment and

operation of the Whistle blowing and Vigil Mechanism in the Directors Report

XIV Retention of documents :

All Protected Disclosures in writing or documented along with the results of investigation relating thereto shall be retained by the Company for a minimum period of eight years or such period as may be prescribed under applicable laws

XV Amendment :

The Company may amend or modify this Policy in whole or in part, at any time, such amendment or modification shall not affect the on going or completed investigations

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ANNEXURE VII

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:

65

(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

66

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.

67

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

68

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

(1) 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 :

(1) The above framework is proposed as a broad risk management policy of the Company

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ANNEXURE VIII - A

INFORMATION PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 (1) OF THE

COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

(1) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

Director – Rs. 2,33,14,558/- & Employees – Rs.9,00,000/-

Ratio: 25.91 : 1

(2) The percentage increase in remuneration of each director, Chief Financial Officer and Company Secretary in the financial year;

Designation Name Salary '14-'15 Salary '15-'16 % increase

Managing Director Mr. RCM Reddy 3,07,58,974 2,33,14,558 -24.2% Chief Financial Officer Mr. Amitabh Jain 43,91,667 72,00,000 63.94% Company Secretary Ms. Daisy Khanna 19,95,915^ 30,33,099 -

^Since information pertains to period October 01, 2015 to March 31, 2015, the same is not comparable with Salary of 2015-16

(3) The average increase in the median remuneration of employees in the financial year in employee remuneration was upto 7% (4) Total number of permanent employees on rolls: 188 (5) The explanation on the relationship between average increase in remuneration and company performance: The average

increase in remuneration is an outcome of Company‟s market competitiveness as against its peer group companies. The increase in the remuneration has been carried out in accordance with the Human Resource policy of the Company.

(6) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company:

70

Aggregate remuneration of Key Managerial Personnel (KMP) in FY16 (Rs. in Mn)

33.54

Revenue (Rs. in Mn) 4293 Remuneration of KMPs (as % of revenue) 0.78% Profit before Tax (PBT) (Rs. in Mn) 343 Remuneration of KMP (as % of PBT) 9.78%

(7) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year: Not applicable

(8) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last

financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: The average annual increase in the salaries of employees other than the managerial personnel was upto 7%. There was no increase in the managerial remuneration during the year 2015 -16. Managerial remuneration rather witnessed a drop because payment has been made in accordance with Central Government approval Section 197 of the Companies Act, 2013, refer Point VI of Annexure VI of this report

(9) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company:

Designation Name Salary '15-'16 as % of revenue as % of PBT Managing Director Mr. RCM Reddy 23,314,558 0.54% 6.80% Chief Financial Officer Mr. Amitabh Jain 7,200,000 0.17% 2.10% Company Secretary Ms. Daisy Khanna 3,033,099 0.07% 0.88%

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(10) The key parameters for any variable component of remuneration availed by the directors – Only Variable component is

Performance Related Pay (PRP) which is paid annually. The methodology for distribution of the PRP is designed to reward superior performance

(11) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: Not applicable

(12) We affirm that remuneration is as per the remuneration policy of the Company as approved by the Nomination and Remuneration Committee of the Directors

By Order of the Board For IL&FS Education & Technology Services Limited


Place: - Mumbai Date: - May 11, 2016

72

ANNEXURE VIII - B

INFORMATION PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 (2) OF THE

COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Statement showing the name of the employees who -

designation of the

employee;

remuneration received;

nature of employment,

whether contractual or

otherwise

qualifications and

experience of the

employee;

date of commencem

ent 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: -

were employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees –

Mr. RCM Reddy,

Managing Director

2,33,14,558 On Deputation IAS January 21, 2010

52 years Infrastructure Leasing & Financial Services Limited (IL&FS) from June 2005

United Nations Industrial

N.A No

73

Development Organisation (UNIDO)

Ms. Deepti Lamba, COO

1,94,12,542 Permanent BA, MBA (Marketing & Finance)

June 06, 2005

41 years Citxsys Technologies Pvt. Ltd.

N.A. No

Mr. Amitabh Jain, CFO

72,00,000 Consultant CA July 01, 2010

50 years Infrastructure Leasing & Financial Services Limited (IL&FS)

N.A. No

were 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;

- - - - - - - - -

were employed throughout the financial year or part thereof, was in

- - - - - - - - -

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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 Education & Technology Services Limited


Place: - Mumbai Date: - May 11, 2016

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· share capital. equity capital of ... skill training management partners limited has become 100%...

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