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Huhtamaki PPL Ltd.

BSE: 509820 Sector: Industrials
NSE: PAPERPROD ISIN Code: INE275B01026
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OPEN 265.00
PREVIOUS CLOSE 266.35
VOLUME 1717
52-Week high 387.00
52-Week low 201.00
P/E 30.21
Mkt Cap.(Rs cr) 1,966
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 265.00
CLOSE 266.35
VOLUME 1717
52-Week high 387.00
52-Week low 201.00
P/E 30.21
Mkt Cap.(Rs cr) 1,966
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Huhtamaki PPL Ltd. (PAPERPROD) - Director Report

Company director report

Your Directors have pleasure in presenting the 68th Annual Report along withthe Audited Statements of Accounts for the year ended 31st December 2017.

FINANCIAL HIGHLIGHTS:

Your Company's financial performance during the year was as under :

(Rs. in lacs)

Particulars 2017 2016
Sales 219904 233324
Profit before Tax & Exceptional Item 11497 13588
Profit before Tax 11497 13333
Less: Provision for Current Tax 5440 5975
Provision for Deferred Tax (305) (796)
Profit after Tax 6362 8154
Add: Balance of profit for earlier years 37412 34521
Profit available for appropriation 43774 42675
Transfer to General Reserve - 887
Transfer to Debenture Redemption Reserve 1925 1925
Proposed Dividend on Equity Shares & Dividend Tax thereon 2784 2451
Balance Carried forward 39065 37412

DIVIDEND:

Your Directors are pleased to recommend a dividend of ' 3/- (Rupees three only) perequity share (150%) having face value of ' 2/- each for the year ended 31stDecember 2017. The said dividend will absorb an amount of ' 2784 lakhs including thedividend distribution tax and cess thereon.

FIXED DEPOSITS:

The Company did not invite or accept deposits covered under Chapter V of the CompaniesAct 2013 and there are no deposits pending with the Company.

TRANSFER TO RESERVES:

Debenture Redemption Reserve is created to the extent of 25% of the Non ConvertibleDebentures (NCDs) equally over the period till maturity of the NCDs as per therequirements of the applicable laws. There is has been no transfer to reserve during theyear.

MERGER :

Pursuant to the approval of the National Company Law Tribunal (NCLT) the erstwhilesubsidiaries of the Company viz. Positive Packaging Industries Limited and Webtech LabelsPrivate Limited have been merged into the Company effective 1st April 2017and all key functions like Marketing NASP Procurement and Supply Chain Management havebeen fully integrated.

CHANGES IN CAPITAL STRUCTURE

Consequent to the Merger of its erstwhile subsidiary Webtech Labels Private Limitedwith the Company it allotted 2810000 Equity shares of face value of ' 2/- each wereallotted to the shareholders of Webtech Labels Pvt Ltd. Upon allotment of the said equityshares the paid-up share capital of the Company has increased from ' 1454 lakhs to ' 1510lakhs.

SUBSIDIARY COMPANIES AND FINANCIAL STATEMENTS :

Your Company does not have any subsidiaries and hence Form AOC-1 is not applicable.

In accordance with the provisions of Section 136 of the Companies Act 2013 theaudited financial statements and related information of the Company are available on thewebsite of the Company - www.ppl.huhtamaki.com .These documents will be made available to the Members for inspection at the RegisteredOffice of the Company up to the date of the ensuing Annual General Meeting.

AUDITORS AND AUDITORS' REPORT:

Pursuant to provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 S R B C & CO LLP Chartered Accountants(SRBC) were appointed as Statutory Auditors of the Company for a term of five years tohold office from the conclusion of 65th Annual General Meeting up to theconclusion of the 70th Annual General Meeting subject to ratification at everyAnnual General Meeting.

The approval of members is being sought for ratification of appointment of SRBC asStatutory Auditors of the Company to examine and audit the accounts of the Company for theFinancial Year 2018.

The Auditors' Report to the Members on the Accounts of the Company for the year ended31st December 2017 does not contain any qualification reservation or adverseremark.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO :

Information pursuant to the provisions of Section 134 of the Companies Act 2013 andthe rules framed thereunder relating to conservation of energy technology absorptionforeign exchange earnings and outgo forms part of this Report and is given at Annexure 1.

BUSINESS RESPONSIBILITY REPORT :

As per Regulation 34 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations 2015) BusinessResponsibility Report forms part of this Report and is annexed hereto.

In line with the green intiative Business Responsibility Report of the Company for theyear ended 31st December 2017 is available on the website of the Company http://www.huhtamaki.com/web/flexible-packaging-india/policiesand forms part of this Report and is kept at the registered office of the Company forinspection. A copy of the aforesaid report shall be made available to such shareholderswho are desirous of and interested in perusing them upon receipt of a written requestfrom them.

CORPORATE GOVERNANCE REPORT:

The Report on Corporate Governance and the Certificate of the Auditors of the Companyregarding compliance of the conditions of Corporate Governance as stipulated in Part C ofSchedule V of the Listing Regulations 2015 are enclosed as a separate section and formspart of this Report. A declaration signed by the Managing Director in regard to compliancewith the Code of Conduct by the members of the Board and Senior Management Personnel alsoforms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed review of the operations performance and future outlook of the Company andits businesses are given in the Management Discussion and Analysis and forms a part ofthis Report.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. JukkaMoisio retires by rotation and being eligible offers himself for re-appointment. Furtheras stipulated under Regulation 36 of the Listing Regulations 2015 his brief resume isgiven in the section on Corporate Governance which forms part of this Annual Report. Mr.A. Venkatrangan was re-appointed as Managing Director for the period 7thOctober 2017 to 31st October 2017 who has moved laterally to an assignmentwithin the Huhtamaki Group. Dr. Arup Basu was appointed as Managing Director for a periodof 5 (Five) years w.e.f 1st November 2017. Mr. Ramesh Dhir steps down asIndependent Director w.e.f. 30th March 2018 pursuant to expiration of histerm.

EVALUATION OF PERFORMANCE OF BOARD ITS COMMITTEES AND OF DIRECTORS:

Pursuant to the provisions of the Companies Act 2013 and Listing Regulations 2015 theBoard of Directors has undertaken an annual evaluation of its own performance its variousCommittees and individual directors. The manner in which the performance evaluation hasbeen carried out has been given in detail in the Corporate Governance Report annexed tothis Report.

The policy of the Company on directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under Section 178(3) of the Act and Part D of Schedule II of the ListingRegulations adopted by the Board is appended as Annexure 2 to the Directors' Report. Weaffirm that the remuneration paid to the directors is as per the terms laid out in theNomination and Remuneration Policy of the Company.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS :

Your Company has put in place a Familiarisation Programme for Independent Directors tofamiliarize them with their roles rights responsibilities nature of the IndustryCompany's strategy business plan operations markets products etc. The details of theCompany's Familiarisation Programme is available on the Company's website - web link: http://www.huhtamaki .com/web/flexible-packaging-india/policies.pdf.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declaration from all the Independent Directors ofthe Company confirming that they meet the criteria of independence laid down in Section149(6) of the Companies Act 2013 and Listing Regulations 2015.

MEETINGS OF THE BOARD:

During the year nine meetings of the Board of Directors were held particulars ofattendance of directors at the said meetings are given in the report on CorporateGovernance Report which forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT :

Pursuant to the provisions of Section 134 of the Companies Act 2013 your Directorsstate that :

a. in the preparation of the annual financial statements for the year ended 31stDecember 2017 the applicable accounting standards have been followed along with nomaterial departures;

b. appropriate accounting policies have been selected and applied consistently andbased on judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st December 2017 andof the profit of the Company for the year ended on that date;

c. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual financial statements have been prepared on a going concern basis;

e. proper internal financial controls have been laid down to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and

f. the proper systems to ensure compliance with the provisions of all applicable lawsare in place and were adequate and operating effectively.

COST AUDITORS :

The Board has appointed M/s. R. Nanabhoy & Co. Cost Accountants as the CostAuditors of the Company to conduct the Cost Audit for the Financial year 2018. Membersapproval is being sought for ratification of their remuneration as Cost Auditors of theCompany for the Financial Year 2018.

SECRETARIAL AUDITOR :

The Board has appointed M/s. S.N. Ananthasubramanian & Co. Practicing CompanySecretaries to conduct Secretarial Audit for the Financial year 2017. The SecretarialAudit Report in prescribed format is annexed as Annexure 3 to this Report.

PARTICULARS OF EMPLOYEES :

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed to this Report as Annexure 4.

The statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this report. Further thereport and the financial statements are being sent to the members excluding the aforesaidstatement. Further in terms of provisions of Section 136(1) of the Act the Annual Reportexcluding the aforesaid information is being sent to the members of the Company. The saidinformation is open for inspection at the registered office of the Company during workinghours and any member interested in obtaining such information may write to the CompanySecretary and the same will be furnished on request. Further the Annual Report includingthe aforesaid information is also available on the Company's website www.ppl.huhtamaki.com .

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES :

Your Company has formulated a policy on related party transactions which is alsoavailable on Company's website at http:// www.huhtamaki.com/web/flexible-packaging-india/policies.pdf. This policy deals with the review and approval of related party transactions. The Boardof Directors of the Company has approved the criteria for making omnibus approval by theAudit Committee within the overall framework of the policy on related party transactions.Prior omnibus approval is obtained for related party transactions which are of repetitivenature and entered in the ordinary course of business and on arm's length basis. Allrelated party transactions are placed before the Audit Committee for review and approval.

All related party transactions entered during the Financial Year were in ordinarycourse of the business and on arm's length basis. During the year the Company had notentered into any contract/arrangement/transaction with related parties which could beconsidered material in accordance with the policy of the Company on materiality of relatedparty transactions. Accordingly the disclosure of related party transactions as requiredunder Section 134(3)(h) of the Companies Act 2013 in Form AOC 2 is not applicable to yourCompany. However members may refer to Notes to the financial statement which sets outrelated party disclosures pursuant to the Accounting Standards.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :

The Company has not granted any loans guarantees and investments covered under Section186 of the Companies Act 2013 during the financial year ended 31st December2017.

CORPORATE SOCIAL RESPONSIBILITY :

Your Company is committed to Corporate Social Responsibility (CSR) and stronglybelieves that the business objectives of the Company must be in congruence with thelegitimate development needs of the society in which it operates. The Company hasimplemented various CSR projects in the areas like:

• Promotion of education & skill development; and

• Social Welfare and Rural Development;

This is in accordance with Schedule VII of the Act and a detailed report on CSRactivities is given in Annexure 5 forming part of this Report.

Pursuant to the provisions of the Section 135 of the Companies Act 2013 (the Act)your Company has constituted a CSR Committee to monitor the CSR activities of the Companydetails of which are provided in the Corporate Governance Report forming part of thisReport.

EXTRACT OF ANNUAL RETURN :

Extract of Annual Return of the Company in prescribed format is annexed herewith asAnnexure 6 to this Report.

RISK MANAGEMENT & INTERNAL FINANCIAL CONTROLS :

The Company has in place mechanism to inform Board Members about the Risk Assessmentand Minimization procedures which are periodically reviewed to ensure that risk iscontrolled by the Executive Management. The Company has also formulated Risk ManagementPolicy to review and control risk.

Details in respect of adequacy of internal financial controls with reference to theFinancial Statements are given in the Management's Discussion and Analysis which formspart of this Report.

WHISTLEBLOWER POLICY :

The Company has in place a Whistleblower Policy with a view to provide a mechanism forits directors/employees to approach the Chairman of the Audit Committee in case of anygrievances or concern. The Whistleblower Policy can be accessed on the Company's website http://www.huhtamaki.com/web/fiexible-packaging-india/policies.pdf

DIVIDEND DISTRIBUTION POLICY:

SEBI Listing Regulations requires that the top 500 listed companies based on marketcapitalization to formulate Dividend Distribution Policy. In compliance of the saidrequirement the Company has formulated its Dividend Distribution Policy the detail ofwhich is given in Annexure 7 to this Report.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:

The Directors have laid down internal financial controls to be followed by the Companyand such policies and procedures adopted by the Company for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol system periodically.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

Your Company has zero tolerance for sexual harassment at workplace and as per therequirement of the Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act 2013 (‘Act') and Rules made thereunder your company has constitutedan Internal Complaints Committees (ICC) and during the year no cases were reported to theICC.

HUMAN RESOURCES (HR):

The Company's HR policies and procedures are designed to recruit and retain the besttalent to support the operations of your Company and to align the interests of allemployees with the long term organisational goals.

ACQUISITION OF AJANTA PACKAGING (INDIA) :

On 23rd March 2018 the Company entered into a Business Transfer Agreementfor acquisition of the business of Ajanta Packaging India on a slump sale at anenterprise value of ' 1003 million on a cash-free debt-free basis. This acquisition willhelp the Company in consolidating its position in Pressure Sensitive Label business andenable our customers to get the benefits of new technologies and strengthen our innovationcapabilities.

OTHER DISCLOSURES/REPORTING:

Your Directors state that no disclosure and/or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

• Issue of equity shares with differential rights as to dividend voting orotherwise;

• Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme;

• Neither the Managing Director nor the Whole-time Directors of the Companyreceive remuneration or commission from any of its subsidiaries;

• No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future;

• There have been no material changes and commitments if any affecting thefinancial position of the Company which have occurred between the end of the FinancialYear of the Company to which the Financial Statements relate and the date of this Report;

APPRECIATION & ACKNOWLEDGEMENTS:

The Board wishes to place on record its gratitude for the assistance and co-operationreceived from Banks Government Authorities Customers Vendors and all its shareholdersfor the trust and confidence reposed in the Company. The Board further wishes to recordits sincere appreciation for the significant contributions made by employees at all levelsfor their commitment dedication and contribution towards the operations of the Company.Further the Board would also like to congratulate all employees for achieving animportant milestone of successful completion of the Integration exercise.

By Order of the Board

For Huhtamaki PPL Ltd.

Suresh Gupta

Chairman

(DIN No.:00235354)

Place : Mumbai

Date: 23rd March 2018

ANNEXURE-1

Conservation of Energy Research and Development Technology Absorption ForeignExchange Earnings and Outgo (Pursuant to provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rules 8(3) of the Companies (Accounts) Rules 2014)

A. CONSERVATION OF ENERGY

The Company has a well organized structured and centrally controlled Energy Managementsystem for machine utility and Infrastructure. Regular focus and efforts are made toimprove machine efficiency and accuracy by modernization or replacement of Plant &Machinery of high end Technology.

Some of the key initiatives for conserving energy during 2017 were:

• Replacement of Conventional Light with LED Lights in Plants Registered &Corporate Office resulting in saving of electricity.

• Replacement of Conventional Motors with Energy Efficient Motors in Plants.

• Variable Frequency Drive installed in M/C Exhaust Blowers & Fume ExhaustBlowers which results in reducing speed of Blowers and saving power.

• System modification of Thermic Fluid Circulation Pump used for circulation ofOil resulted in energy savings.

• System modification results in Metallizer water being pumped through common pumpinstead of separate pump which has resulted in energy savings.

• Upgradation of Duplex Laminator by replacing DC motor with AC Motors resulted inPower saving.

B. TECHNOLOGY ABSORPTION ADAPTION & INNOVATION

Your company continued its efforts in identifying technologies & products that willhelp in its continued growth. Accordingly various new technologies were studied.

From the shortlisted technologies your company has successfully integrated 2 newtechnologies namely 5 Panel Pouches and Hotmelt lamination. While 5 Panel Pouches adds toyour company's preformed pouch portfolio the hotmelt lamination provides your companycapability to manufacture laminates for special applications.

Your Company's customers are demanding "Green" environment friendly laminates& the Research & Development Centre of the company located at Thane developedvarious laminate solutions to meet this demand. Your company is leading the efforts in thearea of environment friendly laminates in our country and completed number of trials withvarious customers.

Your company's Innovation programme NASP (New Applications StructuresProducts/Processes) is focused on developing new products and was successful in building astrong pipleline of new products that are being offered to customers. A strong pipeline ofnew products helps your company maintain its technology leadership in the market.

Your Company successfully developed many new products films for improving theefficiency at customers factories new shaped pouches etc. to name a few.

In additional to creating new products your company has put renewed efforts inprotecting the new products by way of filing for intellectual property rights. This yearyour company has filed for 4 new patents for new products.

Sustainability and convenience are the leading concerns in modern day packaging. Yourcompany is continuously working to reduce material usage to make it more sustainable.

The Company has been recognized for its innovative efforts by several packagingorganisations and was awarded with 10 awards for the year under review including 2Worldstar Awards. The details of the awards are mentioned below:

Name of the Award Products
WorldStar 2018 Paper Boat Thandai (Shaped Pouch)
True-south single-serve (Profile Pack)
AsiaStar 2017 Kinder Joy Maxi (Thermoformed Pack)
Paper Boat Badam Milk (Shaped Pouch)
Brookside (Shaped Pouch)
IndiaStar 2017 Godrej Ezee (Shrink Sleeve)
Haldiram's Kesar Laddoo (Pack)
Kinder Joy Maxi (Thermoformed Pack)
Paper Boat Thandai (Shaped Pouch)
Paper Boat Badam Milk (Shaped Pouch)
Kinder Schoko Bons crispy (Twist Wrap)
Colonel & Co.'s (Peel-able Lid)
True South single-serve (Profile Pack)
Ammaas (Poly Bag)
Brookside (Shaped Pouch)
PrintWeek India Packaging Converter of the Year Award 2017 Wild Nature paper-based (Zipper Pouch)
Ammaas (Poly Bag)
Colonel & Co.'s (Peel-able Lid)
Paper Boat Badam Milk (Shaped Pouch)
IFCA Star Award 2017 Parachute anti-hairfall (Shrink Sleeve)
Santoor (Shrink Sleeve)
Kinder Schoko Bons (Shaped Pouch)
Kinder Joy Maxi (Thermoformed Pack)
True-South single-serve (Profile Pack)
Wild Nature paper-based (zipper Pouch)
Ammaas (Poly Bag)
Brookside (Shaped Pouch)
SIES SOP Star Award 2017 Haldiram's Kesar (Laddoo Pack)
Paper Boat Thandai (Shaped Pouch)
Paper Boat Badam Milk (Shaped Pouch)
Ammaas (Poly Bag)
Godrej Ezee (Shrink Sleeve)
Kinder Joy Maxi (Thermoformed Pack)
Parachute anti-hairfall (Shrink Sleeve)

The expenditure on R&D during the year under report is as below:

a. Capital Nil
b. Recurring ' 106.07 lacs
Total ' 106.07 lacs

Apart from the above the Company spends a sizeable amount of money & resources onproduct development which is not covered in the amount reported hereinabove.

C. RESEARCH AND DEVELOPMENT:

The Company is continuously striving to build a technology leadership position in theflexible packaging industry. There is a strong focus on research and development through adedicated R&D team. The R&D team is working closely with customers in developingcost-effective packaging solutions.

The R&D team is actively involved in identifying suitable base films polymersadhesives inks etc. to satisfy the sophisticated flexible packaging requirements ofcustomers.

D. FOREIGN EXCHANGE EARNINGS & OUTGO

a. Foreign exchange earnings from the exports of the Company's products & servicesamounted to ' 52637 lacs.

b. The outflow of foreign exchange on account of import of raw materials storesspares capital goods expenses on travelling commission on exports and technicalService charges amounted to ' 46531 lacs.

By Order of the Board

For Huhtamaki PPL Ltd.

Suresh Gupta

Chairman (DIN No.:00235354)

ANNEXURE- 2

NOMINATION AND REMUNERATION POLICY OF HUHTAMAKI PPL LIMITED

1. PREAMBLE:

a. The Nomination and Remuneration Policy ("Policy") provides a framework forremuneration to be paid to the members of the Board of Directors ("Board") andKey Managerial Personnel ("KMP") and the Senior Management Personnel("SMP") of Huhtamaki PPL Limited (‘the Company").

b. This Policy has been framed by the Nomination and Remuneration Committee("Committee") of the Board of Directors ("Board") and based on itsrecommendation approved by the Board of Directors of the Company. The Nomination andRemuneration Committee is entitled to review and amend this policy if necessary subjectto Board approval.

2. OBJECTIVE:

The Policy aims to enable the Company to attract retain and motivate high qualitymembers for the Board and executives by providing a well-balanced and performance-relatedcompensation package taking into account all stakeholders' interests risks &opportunities industry practices and relevant corporate regulations. The Policy shall beread along with Section 178 of the Companies Act 2013 the applicable rules thereto andprovisions of the Listing Agreement.

3. CRITERIA FOR IDENTIFICATION OF THE BOARD MEMBERS AND APPOINTMENTS OF SENIORMANAGEMENT:

a. The Members of the Board shall be persons who possess appropriate qualificationsskills aptitude attributes maturity knowledge and experience. The objective is to havea Board with diverse background and experience in management functions or in such areas asmay be considered relevant or desirable to conduct the Company's business in an ethicaland competitively superior manner.

b. An Independent Director shall be a person of integrity who possesses relevantexpertise and experience and who shall uphold ethical standards of integrity and probity;act objectively and constructively; exercise responsibilities in a bona-fide manner in thebest interests of the company; devote sufficient time and attention to professionalobligations for informed and balanced decision-making; and assist the company inimplementing the best corporate governance practices. An Independent Director should meetthe requirements of the Companies Act 2013 and Clause 49 of the Listing Agreementconcerning independence of directors.

c. The candidate for the appointment of KMP and SMP should possess appropriatequalifications skills aptitude attributes with relevant work experience. The candidatefor KMP and SMP should also possess high level of personal and professional ethicsintegrity and values.

4. POLICY RELATING TO REMUNERATION :

I) POLICY FOR WHOLE-TIME DIRECTORS/MANAGING DIRECTOR/KMP/SENIOR MANAGEMENT PERSONNEL-

Remuneration to Whole-Time Directors Key Managerial Personnel and Senior ManagementPersonnel will involve a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the Company and its goals. The break-up of thepay scale and quantum of perquisites and retiral benefits shall be decided and approved bythe Board/the Person authorized by the Board on the recommendation of the Committee andapproved by the shareholders and Central Government wherever required. If in anyfinancial year the Company has no profits or its profits are inadequate the Companyshall pay remuneration to its Whole-time Director in accordance with the provisions of theCompanies Act 2013.

II) POLICY FOR INDEPENDENT DIRECTORS -

a. Independent Directors shall receive remuneration by way of sitting fees forattending meetings of Board or Committee thereof. Provided that the amount of such feesshall not exceed Rupees One Lac per meeting of the Board or Committee or such amount asmay be prescribed by the Central Government from time to time.

b. Independent Directors may be paid Commission within the monetary limit approved byshareholders subject to the limit not exceeding 1% of the profits of the Companycomputed as per the applicable provisions of the Companies Act 2013. IndependentDirectors shall not be entitled to any stock options of the Company.