Nomination Remuneration Policy
Pursuant to Section 178 of the Companies Act, 2013 and the Rules framed thereunder (as amended from time to time) (the “Act”) and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time) (the “SEBI Listing Regulations”), the Board of Directors of every listed company is required to constitute the Nomination and Remuneration Committee.
In order to comply with the requirements of Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations and any other applicable provisions, the Nomination and Remuneration Committee of the Board of Directors of the Company (the “Committee
”) had formulated this policy (the “Policy
The key objectives of the Policy are as follows:
a. To formulate the criteria for determining qualifications, competencies, positive attributes and independence for appointment of a Director (Executive/ Non-Executive) and recommend to the Board of Directors of the Company (the “Board”), policies relating to the remuneration (payable in whatever form) of the Directors, Key Managerial Personnel and other employees.
b. To formulate criteria for evaluation of the members of the Board and provide necessary report to the Board for further evaluation of the Board.
c. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
d. To devise a Policy on Board Diversity.
e. To develop a succession plan for the Board and to regularly review the plan.
” means the Companies Act, 2013 and the Rules framed thereunder, as amended from time to time.
” means the Board of Directors of the Company.
” shall mean Directors of the Company.
“Key Managerial Personnel
” or “KMP” means: in relation to a Company as defined sub-section 51 of Section 2 of the Companies Act, 2013.
” shall mean officers/personnel of the listed entity who are members of its core management team excluding board of directors and normally this shall comprise all members of management one level below the chief executive officer/managing director/whole time director/manager (including chief executive officer/manager, in case they are not part of the board) and shall specifically include Company Secretary and Chief Financial Officer.
” means a director referred to in Section 149(6) of the Act.
III. Appointment and removal of Directors, KMPs and Senior Management:
i. Appointment criteria and qualifications:
The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or Senior Management and recommend to the Board his/ her appointment.
A person should possess adequate qualification, expertise and experience for the position he/ she is considered for appointment. The Committee has the discretion to decide whether qualifications, expertise and experience possessed by a person is sufficient/ satisfactory for the concerned position.
ii. The Company shall take a prior approval of the Members by way of a Special Resolution for appointment/ continuation of appointment of any Non-Executive Director who has attained the age of 75 (Seventy Five) years.
iii. Term / Tenure:
a. 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 5 (five) years at a time. No re- appointment shall be made earlier than 1 (one) year before the expiry of term.
b. Independent Director:
An Independent Director shall hold office for a term up to 5 (five) consecutive years on the Board 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 3 (three) years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of 3 (three) years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.
At the time of appointment of Independent Director(s) it should be ensured that number of Boards on which such Independent Director serves is restricted to 7 (seven) listed companies as an Independent Director and 3 (three) listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Act or the SEBI Listing Regulations.
The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management at yearly.
The evaluation of performance of the Board, its Committees and Individual Directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and shall review its implementation and compliance.
The evaluation of Independent Directors shall be done by the entire Board of Directors which shall include:
(a) Performance of the Directors; and
(b) Fulfillment of the independence criteria as specified in these regulations and their Independence from the management:
Provided that in the above evaluation, the Directors who are subject to evaluation shall not participate.
Due to reasons for any disqualification mentioned in the Act or under any other applicable law, rules and regulations, the Committee may recommend, to the Board with reasons to be recorded in writing, removal of a Director, KMP or Senior Management, subject to the provisions and compliance of the said Act, such other applicable law, rules and regulations.
The Directors, KMP and Senior Management shall retire as per the applicable provisions of the Act and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.
IV. Policy relating to the Remuneration for the Managing Director/ Whole-time Director / Executive Director, KMP and Senior Management:
i. The remuneration/ compensation/ commission etc. to the Managing Director/ Whole-time Director/ Executive Director, KMP and Senior Management will be determined by the Committee and recommended to the Board for its approval. The remuneration/ compensation/ commission etc. shall be subject to the prior/ post approval of the Shareholders of the Company.
ii. The remuneration and commission to be paid to the Managing Director and/ or Whole-time Director shall be in accordance with the percentage / slabs / conditions laid down as per the provisions of the Act and SEBI Listing Regulations and any other laws, as may be applicable, for the time being in force.
iii. Increments to the existing remuneration/ compensation structure may be recommended by the Committee to the Board which should be within the slabs approved by the Shareholders in the case of Whole-time Director or as laid down as per the provisions of the Act.
V. Remuneration to Managing Director/ Whole-time/ Executive Director, KMP and Senior Management:
i. The Managing Director/ Whole-time/ Executive Director, KMP and Senior Management shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee.
ii. Minimum Remuneration:
If in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Managing Director/ Whole-time/ Executive Director in accordance with the provisions of Section 197 of the Act and Schedule V to the Act.
iii. Provisions for excess remuneration:
If the Managing Director/ Whole-time/ Executive-Director draws or receives, directly or indirectly, by way of remuneration any such sums in excess of the limits prescribed under the Act, he /she shall refund such sums to the Company within two years or such lesser period as may be allowed by the company, and until such sum is refunded, hold it in trust for the company.
The Company shall not waive the recovery of any sum refundable to it under the aforementioned para unless it is approved by the Company by way of a Special Resolution within two years from the date the sum becomes refundable.
Where the Company has defaulted in payment of dues to any bank or public financial institution or non- convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the Company before obtaining approval of such waiver.
VI. Remuneration to Non- Executive/ Independent Director:
i. Remuneration / Commission:
The remuneration/ commission shall be in accordance with the statutory provisions of the Act and the Rules made thereunder for the time being in force.
ii. Sitting Fees:
The Non- Executive/ Independent Director may receive remuneration by way of fees for attending meetings of the Board or Committee thereof. Provided that the amount of such fees shall not exceed the maximum amount as provided in the Act, per meeting of the Board or Committee or such amount as may be prescribed by the applicable law from time to time.
iii. Limit of Remuneration/Commission:
Remuneration/ Commission may be paid within the monetary limit approved by Shareholders, subject to the limit not exceeding 1% of the profits of the Company computed as per the applicable provisions of the Act.
VII. Stock Options:
An Independent Director shall not be entitled to any stock option of the Company.
i. The Committee shall comprise of at least (3) Directors, all of whom shall be non-executive Directors and at least half shall be Independent Directors.
ii. The Board shall reconstitute the Committee as and when required to comply with the provisions of the Act and the SEBI Listing Regulations.
iii. The quorum for the Meeting of the Nomination and Remuneration Committee shall either be two members or one third of the total strength of the Committee, whichever is higher (including at least one independent director in attendance).
iv. Membership of the Committee shall be disclosed in the Annual Report.
v. Term of the Committee shall be continued unless terminated by the Board of Directors.
i. The Chairperson of the Committee shall be an Independent Director.
ii. The Chairperson of the Company may be appointed as a member of the Committee but shall not be a Chairman of the Committee.
iii. In the absence of the Chairperson, the members of the Committee present at the meeting shall choose one amongst them to act as Chairperson.
iv. Chairman of the Nomination and Remuneration Committee meeting could be present at the Annual General Meeting or may nominate some other member to answer the shareholders’ queries.
X. Frequency of Meetings:
The Nomination and Remuneration Committee shall meet at least once a year.
XI. Committee members’ interests:
i. A member of the Committee is not entitled to be present when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated.
ii. The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee.
The Company Secretary of the Company shall act as Secretary of the Committee.
XIII. Duties of the Nomination & Remuneration Committee
Duties with respect to Nomination:
The duties of the Committee in relation to nomination matters include:
Ensuring that there is an appropriate induction in place for new Directors and members of Senior Management and reviewing its effectiveness;
Ensuring that on appointment to the Board, Independent Directors receive a formal letter of appointment in accordance with the guideline provided under the Act;
Identifying and recommending Directors who are to be put forward for retirement by rotation.
Determining the appropriate size, diversity and composition of the Board;
Setting a formal and transparent procedure for selecting new Directors for appointment to the Board;
Developing a succession plan for the Board and regularly reviewing the plan;
Evaluating the performance of the Board members in the context of the Company’s performance from business and compliance perspective;
Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of the Managing Director/ Whole Time Director/ Executive Director as an employee of the Company subject to the provision of the law and their service contract.
Recommend any necessary changes to the Board; and
Considering any other matters, as may be requested by the Board.
Duties with respect to Remuneration:
The duties of the Committee in relation to remuneration matters include:
To consider and determine the remuneration policy;
Based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract, retain and motivate members of the Board, as the Committee shall deem appropriate, the committee shall fix elements of the remuneration of the Members of the Board;
To recommend and approve the remuneration of the Senior Management including key managerial personnel of the Company maintaining a balance between fixed and variable pay reflecting short and long term performance objectives appropriate to the working of the Company;
To delegate any of its powers to one or more of its Members of the Committee; and
To consider any other matters as may be requested by the Board.
XIV. Minutes of Committee Meeting
Proceedings of all the Meetings must be minuted and signed by the Chairperson of the Committee at the subsequent Meeting. Minutes of the Committee Meetings will be tabled at the subsequent Board and Committee Meeting.
XV. Deviations from this Policy
Deviations on elements of this policy in extraordinary circumstances, when deemed necessary in the interests of the Company, will be made if there are specific reasons to do so in an individual case.
Any change in the Policy shall be approved by the Board of Directors or any of its Committees (as may be authorized by the Board of Directors in this regard). The Board of Directors or any of its authorized Committees shall have the right to withdraw and / or amend any part of this Policy or the entire Policy, at any time, as it deems fit, or from time to time, and the decision of the Board or its Committee in this respect shall be final and binding. Any subsequent amendment / modification in the Listing Regulations and / or any other laws in this regard shall automatically apply to this Policy.