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Lakshmi Mills Company Ltd.

BSE: 502958 Sector: Industrials
NSE: LAKSHMIMIL ISIN Code: INE938C01019
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VOLUME 155
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P/E 109.51
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OPEN 3024.90
CLOSE 2832.70
VOLUME 155
52-Week high 3300.00
52-Week low 2011.20
P/E 109.51
Mkt Cap.(Rs cr) 198
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lakshmi Mills Company Ltd. (LAKSHMIMIL) - Director Report

Company director report

Ladies and Gentlemen

Your Directors have pleasure in presenting the Hundred and Seventh year Annual Reporttogether with the audited accounts of the Company for the year ended 31.03.2017.

(Rs. in Lakhs)
WORKING RESULTS 31.3.2017 31.3.2016
No. of days worked 357 357
Sales 22745.05 19919.71
Other income 728.45 452.79
GROSS REVENUE 23473.50 20372.50
Profit before Tax and Exceptional Items 472.40 184.28
Less : Exceptional items 17.65 37.15
Profit before Taxation 454.75 147.13
Less : Current Tax 63.11 1.28
MAT Credit entitlement (61.24) (1.28)
Net Current Tax 1.87 -
Prior Year Taxes 3.92 0.87
Deferred Tax Liability 333.84 41.45
NET PROFIT 115.12 104.81
Add : Carry forward Profit 1365.66 1336.19
1480.78 1441.00
Profit Available for appropriation
Appropriation:
General Reserve - -
Proposed Dividend - 62.60
Corporate Tax on Dividend - 12.74
Balance carried forward 1480.78 1365.66
1480.78 1441.00

The company proposes to retain an amount of Rs. 1480.78 ( Rs. 1365.66) Lakhs in theProfit & Loss Account.

OPERATIONS

The Spindles capacity remained at the same level of 1.33 lakh spindles throughout theyear 2016-17. Overall utilisation remained around 95% - same as that of 2015-16.

Your Company continued to outsource fabrics both for exports as well as for domesticmarket. Export of yarn and fabric accounted for Rs. 5318 Lakhs as against Rs. 4780 Lakhsin the previous year an increase of around 11% over the previous year's performance.

Overall the operational performance was better during the year thanks to improvementin realization of yarn prices as well as power cost reduction.

There was no change in the nature of business of the Company during the financial yearended 31st March 2017.

DIVIDEND

The Directors have recommended a dividend of Rs. 9/- per Equity Share of Rs. 100/-each at 9% for the financial year 2016-2017 (Previous Year – 9%). The Dividend of9% if approved at the forth coming Annual General Meeting will result in the out flow ofRs. 62.60 Lakhs to the company in addition to Rs. 12.74 Lakhs by way of dividenddistribution tax.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of the Companies Act 2013 any unclaimed or unpaid Dividend relating to thefinancial year 2009-10 will be transferred to the Investor Education and Protection Fundestablished by the Central Government after the conclusion of this Annual GeneralMeeting.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31 2017 was Rs. 69555000/- comprising695550 shares of Rs. 100/- each. During the year under review the company has not madeany fresh issue of shares.

EXTRACT OF ANNUAL RETURN

As per the requirements of the Companies Act 2013 the extract of annual return in theprescribed Form MGT 9 is annexed hereto as Annexure - 1 forming part of this report.

BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW

During the year under review 4 Meetings of the Board of Directors and 4 Meetings ofthe Audit Committee 2 Meetings of the Nomination and Remuneration Committee 1 Meeting ofthe Corporate Social Responsibility Committee and 1 Meeting of the StakeholdersRelationship Committee and 20 Meetings of the Share Transfer Committee were held. Furtherdetails of the same have been enumerated in the Corporate Governance Report annexedherewith.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) of the Companies Act 2013 withrespect to the Directors' Responsibility Statement it is hereby confirmed that-

(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures from those standards;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;

(c) the Directors have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe 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;

(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisionsof all the applicable laws and such systems were adequate and operating effectively.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THECOMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There were no instances of frauds identified or reported by the Statutory Auditorsduring the course of their audit pursuant to Section 143(12) of the Companies Act 2013.

DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as stipulated in Section 149(6) ofthe Companies Act 2013 so as to qualify themselves to act as Independent Directors underthe provisions of the Companies Act 2013 and the relevant rules.

NOMINATION AND REMUNERATION COMMITTEE AND POLICY

The Company has reconstituted the Nomination and Remuneration Committee of Directors ofthe Company and its composition and attendance are reported elsewhere in the AnnualReport. The Board has on the recommendation of the Nomination & RemunerationCommittee framed a policy on Directors' appointment and remuneration including criteriafor determining qualification positive attributes independence of a Director and othermatters provided under sub-section (3) of Section 178. The said Policy is attachedherewith as Annexure - 6 to this report and is also available on the website of theCompany – www.lakshmimills.com.

EXPLANATION AND COMMENTS ON AUDITOR REPORTS

The reports of the Statutory Auditors M/s. Subbachar and Srinivasan (annexed elsewherein the Annual Report) and that of the Secretarial Auditor Mr. M.D. Selvaraj annexedhereto as Annexure – 2 are self explanatory having no adverse comments.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013. The details of the investments made by the Companyare given in the notes to the financial statements.

RELATED PARTY TRANSACTIONS

All transactions of the Company with the related parties were in the ordinary course ofbusiness and on an arm's length pricing basis. Since there are no transactions which arenot on arm's length basis and material in nature the requirement of disclosure of suchrelated party transactions in Form AOC-2 does not arise.

The policy on Related Party Transactions as approved by the Board of Directors of theCompany has been uploaded on the Company's website and may be accessed through the link atwww.lakshmimills.com.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There is no material change or commitments after the closure of the financial year ason 31.03.2017 and till the date of this report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy technology absorption ForeignExchange Earnings and Outgo as required under section 134 (3) (m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is attached herewith asAnnexure - 3 to this report.

RISK MANAGEMENT

The Company follows a comprehensive and integrated risk management process. The riskmanagement process is designed to safeguard the organization from various risks throughadequate and timely actions. It is designed to anticipate evaluate and mitigate risks inorder to minimize its impact on the business. The potential risks are inventoried andintegrated with the management process such that they receive the necessary considerationduring decision making and are periodically reviewed and revised by the Board ofDirectors.

CORPORATE SOCIAL RESPONSIBILITY

The Board has constituted a CSR Committee comprising of Sri S. Pathy Sri AdityaKrishna Pathy and Sri D. Rajendran.

The Annual Report on Company's CSR activities of the Company is furnished in theprescribed format as Annexure - 4 and attached to this report.

BOARD EVALUATION

Pursuant to the provisions of the Act the Board has carried out an annual evaluationof its own performance the individual Directors (including the Chairman) as well as anevaluation of the working of all Board Committees. The performance evaluation was carriedout on the basis of inputs received from all the Directors / Members of the Committees asthe case may be. The Independent Directors of the Company have also convened a separatemeeting for this purpose. All the results of evaluation has been communicated to theChairman of the Board of Directors.

DIRECTORS & KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Act and the Articles ofAssociation of the Company Sri R. Santharam Director is liable to retire by rotation atthe ensuing Annual General Meeting ("AGM") and being eligible offers himself forre-appointment.

Your directors recommend the re-appointment.

Sri V. S. Velayutham Independent Director has resigned from the Board of Directors ofthe Company with effect from 21.04.2016.

Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203of the Companies Act 2013 are Sri S. Pathy - Chairman and Managing Director Sri AdityaKrishna Pathy - Deputy Managing Director Sri N. Singaravel - Company Secretary and Sri V.Kannappan - Chief Financial Officer.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any joint venture subsidiary or associate company.

FIXED DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control systems to monitor business processesfinancial reporting and compliance with applicable regulations. The systems areperiodically reviewed for identification of control deficiencies and formulation of timebound action plans to improve efficiency at all the levels. The Audit Committee of theBoard constantly reviews internal control systems and their adequacy significant riskareas observations made by the internal auditors on control mechanism and the operationsof the Company and recommendations made for corrective action through the internal auditreports. The Committee reviews the statutory auditors' report key issues significantprocesses and accounting policies.

AUDITORS

STATUTORY AUDITORS

M/s. Subbachar & Srinivasan (Firm Registration No.004083S) Chartered AccountantsStatutory Auditors of the Company were appointed as statutory auditors in the 104thAnnual General Meeting to hold office till the conclusion of the 107th Annual GeneralMeeting.

As per Companies Act 2013 M/s. Subbachar & Srinivasan have completed their termof office and are not eligible for re-appointment. Based on the recommendation of theAudit Committee the Company seeks approval for the appointment of M/s. M.S.Jagannathan& Visvanathan (Firm Registration No. 001209S) Chartered Accountants Coimbatore asstatutory auditors of the company to hold office from the conclusion of this 107thAnnual General Meeting upto the conclusion of the 112th Annual General Meetingto be held in 2021-2022. There are no qualifications or reservations or remarks made bythe auditors in their report.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. M.D.Selvaraj MDS & Associates Company Secretary in practice toundertake the Secretarial Audit of the Company. The Secretarial Audit report is annexedherewith as Annexure - 2.

COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the Directors on the recommendation of the AuditCommittee have appointed M/s. A.R.Ramasubramania Raja & Co. a firm of CostAccountants as the Cost Auditor of the Company for the financial year 2017 – 18.

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Cost Recordsand Audit) Rules 2014 the remuneration payable to the Cost Auditors for the financialyear 2016-17 & 2017 – 18 is subject to the approval of the shareholders in ageneral meeting. The Board recommends the ratification of their remuneration.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the SEBI (LODR) Regulations 2015 Management Discussionand Analysis Report Report on Corporate Governance and Auditors Certificate regardingcompliance of conditions of Corporate Governance provided elsewhere in this Report formspart of the Directors' Report.

COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has reconstituted the Audit Committee of the Board of Directors of theCompany and its composition and attendance are disclosed elsewhere in the Annual Report.The Company has devised a vigil mechanism in the form of a Whistle Blower Policy inpursuance of provisions of Section 177(10) of the Companies Act 2013 and the policy isexplained in corporate governance report and also posted on the website of company and canbe accessed at the link http://www.lakshmimills.com. During the year under review therewere no complaints received under this mechanism.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has in place a policy on Sexual Harassment of Women at Workplace in linewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. An Internal Compliant Committee has been set up toredress complaints received. All employees (permanent contractual temporary trainees)are covered under this policy. There were no complaints received from any employee duringthe financial year 2016 - 17.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of Companies Act 2013 and Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been appended as Annexure - 5 tothis Report.

ACKNOWLEDGEMENT

The Board acknowledges the continued assistance from the Bankers Cotton Yarn andCloth Dealers of the Company and Shareholders and appreciates the valuable servicesrendered by the employees at all levels.

May the Goddess Lakshmi continue to shower her choicest Blessings for the prosperity ofthe Company in the years to come.

By Order of the Board
For The Lakshmi Mills Co. Ltd.
S. PATHY
Coimbatore Chairman and Managing Director
25th May 2017 (DIN 00013899)

ANNEXURE - 3

Conservation of Energy Technology Absorption and Foreign ExchangeEarning and Outgo [Section 134(3)(m) of The Companies Act 2013 read withRule 8(3) of The Companies (Accounts) Rules 2014]

A. Conservation of Energy

i. Steps taken for conservation of energy

A. In Palladam Mill as energy saving measures the following steps were taken.

i) "B Unit" Spinning Frames 29 Nos. and "C Unit" Spinning Frames 12Nos. having Pneumafil fans were replaced with Light weight energy efficient fans.

ii) Installed Cyclic Timer in 8 Nos. "B Unit" autoconer for intermediatestopping and running of empties conveyor motor.

iii) Inverter drives for suction motors were fitted in 3 Nos. VJ autoconers.

iv) Water temperature sensor fitted for YCP Cooling Tower Fan and Pump motors. v) InLadies Hostel 14 Nos. 36 Watts Florescent Tube Street lights were replaced with 20 WattsLED

Street lights.

Due to above measures 41604 units per month of saving achieved during the year. B. InKovilpatti Mill as energy saving measures the following steps were taken. i) "AUnit" Spinning Frames 3 Nos. and "B Unit" Spinning Frames 28 Nos. havingPneumafil fans were replaced with Light weight energy efficient fans. ii) Installed CyclicTimer for 2 Nos. H Plant Pump motor. iii) Inverter drives for suction motors were fittedin 4 Nos. Savio autoconers. iv) In "B Unit" 1 No. 34 KW motor was replaced with40 KW energy efficient motor. v) BEECHEM Beruspin Spindle oil used in 2 Nos. G5/1 Spinningin "B Unit". vi) ELGI – EE75 Energy Efficient Compressor was replaced forReciprocating Compressor and Air leakages were arrested in A B & C Units.

Due to above measures 50718 units per month of saving achieved during the year.

ii. Steps taken by the Company for utilizing alternate sources of energy

The Company has not initiated any alternate source of energy during the year underreview. iii. Capital investment on energy conservation equipment – Rs. 31.48 Lakhs.

B. Technology Absorption

i. Efforts made towards technology absorption adaptation and innovation:

a. The Company has not absorbed any Technology from outsiders

ii. Benefits derived as a result of the above efforts: Not applicable

iii. Information of Imported Technology (imported during the last 5 years from thebeginning of the Financial Year): Not applicable

iv. Expenditure incurred on Research & Development: Nil C) FOREIGN EXCHANGEEARNINGS AND OUTGO

The details of Foreign Exchange earnings and outgo are furnished in Note Nos. 30.1230.13 & 30.14 to the Financial Statements.

S. PATHY
Coimbatore Chairman and Managing Director
25th May 2017 DIN: 00013899

ANNEXURE -5

Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 readwith Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 i. Ratio of the remuneration of each director to the median remuneration ofthe Employees of the Company for the financial year 2016-17:

Sl. No Name Category Ratio
1 Sri S. Pathy Chairman & Managing Director 33.59 : 1
2 Sri Aditya Krishna Pathy Deputy Managing Director 21.46 : 1

Note: For this purpose sitting fees paid to the Directors have not been considered asremuneration ii. The percentage of increase in remuneration of each director ChiefFinancial Officer Chief Executive Officer Company Secretary or Manager if any in thefinancial year 2016-17:

Sl. No Name Category %
1 Sri S. Pathy Chairman & Managing Director 5.53
2 Sri Aditya Krishna Pathy Deputy Managing Director 18.18
3 Sri N. Singaravel Company Secretary 22.32
4 Sri V. Kannappan Chief Financial Officer 9.95

iii. The percentage increase in the median remuneration of employees in the financialyear: 0.25%.

iv. The number of permanent employees on the rolls of Company: 557 (591).

v. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: Theincrease in remuneration for employees other than Managerial Personnel and KMP is 0.25%(14.72%) while it is 10.82% (10.63%) for Managerial Personnel and KMP.

vi. Affirmation that the remuneration paid during the year is as per the RemunerationPolicy of the Company. Yes

vii. Particulars of employees: Rule 5(2) and 5(3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

Name (Age in years) Designation Gross Remuneration paid in (Rs.) Qualification Date of commencement of employment (Experience in years) Previous employment
NIL

ANNEXURE - 6

NOMINATION AND REMUNERATION POLICY

Introduction

In pursuance of the Company's Policy to pay equitable remuneration to Directors KeyManagerial Personnel (KMP) and employees of the Company consistent with the goals of theCompany and in terms of the provisions of the Companies Act 2013 and the listingagreement as amended from time to time this Policy on nomination and remuneration ofDirectors Key Managerial Personnel and Senior Management has been formulated by theCommittee and approved by the Board of Directors.

The objective and purpose of this policy are

To lay down criteria and terms and conditions with regard to identifying persons whoare qualified to become Directors (Executive and Non Executive) and persons who may beappointed in Senior Management and Key Managerial positions and to determine theirremuneration.

To determine remuneration based on the Company's size and financial position and trendsand practices on remuneration prevailing in peer companies in the manufacturing sector.

To carryout evaluation of the performance of Directors as well as Key Managerial andSenior Management Personnel.

To compensate them to their effort performance dedication and achievement relating tothe Company's operations.

To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons. In the context of the aforesaid criteria the following Policyhas been formulated by the Nomination and Remuneration Committee and adopted by the Boardof Directors at its meeting held on 25.07.2014.

Effective Date:

This Policy shall be effective from 1st August 2014.

Constitution of the Nomination and Remuneration Committee

The Board has changed the nomenclature of Remuneration Committee constituted on29.05.2002 by renaming it as Nomination and Remuneration Committee on 26th May 2014. TheNomination and Remuneration Committee comprises of the following Non Executive Directors:

1. Sri D. Rajendran Chairman (Independent)
2. Sri R. Santharam Member (Non – Independent)
3. Sri V. S. Velayutham Member (Independent)
4. Sri Satish Ajmera Member (Independent)

The Board has the power to reconstitute the Committee consistent with the Company'spolicy and applicable statutory requirement.

Definitions

• Board means Board of Directors of the Company.

• Directors means Directors of the Company.

Committee means Nomination and Remuneration Committee of the Board of Directors of theCompany as constituted or reconstituted by the Board.

Company means THE LAKSHMI MILLS COMPANY LIMITED.

Independent Director means a director referred to in Section 149(6) of the CompaniesAct 2013.

Key Managerial Personnel (KMP) means -

i) Managing Director or Chief Executive Officer or Manager and in their absence aWhole-time Director;

ii) Company Secretary;

iii) Chief Financial Officer.

Senior Management means -

All Members of Company's Management team one level below the executive directorincluding functional heads and such other officer as may be prescribed under theapplicable statutory provisions / regulations.

Unless the context otherwise requires words and expressions used in this Policy andnot defined herein but defined in the Companies Act 2013 as may be amended from time totime shall have the meaning respectively assigned to them therein.

• Applicability

The Policy is applicable to -

• Directors

• Key Managerial Personnel

• Senior Management Personnel

General

This Policy is divided in three parts:

Part – A covers the matters to be dealt with and recommended by the Committee tothe Board

Part – B covers the appointment and nomination and

Part – C covers remuneration and perquisites etc.

The key features of this Company's policy shall be included in the Board's Report.

PART – A - MATTERS TO BE DEALT WITH PERUSED AND RECOMMENDED TO THE BOARD BY THENOMINATION AND REMUNERATION COMMITTEE

The Committee shall:

Formulate the criteria for determining qualifications positive attributes andindependence of a director.

Identify persons who are qualified to become Directors and persons who may be appointedin Key Managerial and Senior Management positions in accordance with the criteria laiddown in this Policy.

Recommend to the Board appointment and removal of Directors KMP and Senior ManagementPersonnel.

PART – B - POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTORS KMP AND SENIOR MANAGEMENTPERSONNEL

Appointment criteria and qualifications:

1. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.

2. A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person are sufficient /satisfactory for the concerned position.

3. The Company shall not appoint or continue the employment of any person as ManagingDirector or Whole-time Director who has attained the age of seventy years. Provided thatthe term of the person holding this position may be extended beyond the age of seventyyears with the approval of shareholders by passing a special resolution based on theexplanatory statement annexed to the notice for such motion indicating the justificationfor extension of appointment beyond seventy years.

Term / Tenure:

1. Chairman and Managing Director / Whole-time Director:

The Company shall appoint or re-appoint its Chairman and Managing Director or Whole -time Director for a term not exceeding five years at a time. No re - appointment shall bemade earlier than one year before the expiry of term.

2. Independent Director:

An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution 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 suchIndependent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly.

However if a person who has already served as an Independent Director for 5 years ormore in the Company as on 1st October 2014 or such other date as may bedetermined by the Committee as per regulatory requirement he shall be eligible forappointment for one more term of 5 years only.

At the time of appointment of Independent Director it should be ensured that number ofBoards on which such Independent Director serves is restricted to seven listed companiesas an Independent Director and three listed companies as an Independent Director in casesuch person is serving as a Whole Time Director of a listed company.

Evaluation:

The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval (but atleast once in a year).

Removal:

Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable Act rules and regulations the Committeemay recommend to the Board with reasons recorded in writing removal of a Director KMPor Senior Management Personnel subject to the provisions and compliance of the said Actrules and regulations.

Retirement:

The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Companies Act 2013 and the prevailing policy of the Company. The Boardwill have the discretion to retain the KMP Senior Management Personnel in the sameposition / remuneration or otherwise even after attaining the retirement age for thebenefit of the Company.

PART – C - POLICY RELATING TO THE REMUNERATION FOR THE KMP AND SENIOR MANAGEMENTPERSONNEL General:

1. The remuneration / compensation / commission etc. to the KMP and Senior ManagementPersonnel will be determined by the Committee and recommended to the Board for approval.The remuneration / compensation / commission etc. shall be subject to the prior/postapproval of the shareholders of the Company and Central Government wherever required.

2. The remuneration and commission to be paid to the KMP shall be in accordance withthe slabs / conditions / percentage approved by the Board subject to the provisions of theCompanies Act 2013 and the rules made thereunder.

3. Increments to the existing remuneration / compensation structure may be recommendedby the Committee to the Board which should be within the slabs approved by theShareholders in the case of Chairman and Managing Director or Whole Time Director.

4. Where any insurance is taken by the Company on behalf of its Chairman and ManagingDirector or Whole-time Director the Company Secretary and Chief Financial Officer or anyother Senior Management Personnel for indemnifying them against any liability the premiumpaid on such insurance shall not be treated as part of the remuneration payable to anysuch personnel. Provided that if such person is proved to be guilty the premium paid onsuch insurance shall be treated as part of the remuneration.

Minimum Remuneration:

If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Chairman and Managing Director or Whole TimeDirector in accordance with the provisions of Schedule V of the Companies Act 2013 and ifit is not able to comply with such provisions with the previous approval of the CentralGovernment.

Sitting Fees:

The Company may pay sitting fees to Directors for attending Meetings of the Board orCommittees thereof such sum as may be decided by the Board of directors which shall notexceed One lakh Rupees per meeting of the Board or Committee thereof or such amount as maybe prescribed by the Central Government from time to time.

Commission:

Commission to Non Executive Directors may be paid within the monetary limit approved byshareholders subject to the prescribed limit on the profits of the Company computed asper the applicable provisions of the Companies Act 2013.

Stock Options:

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