Nomination and Remuneration Policy

I. PREAMBLE

Pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of Company shall constitute the Nomination and Remuneration Committee. The Company already constituted Remuneration Committee comprising of three non-executive Independent Directors as required under Companies Act. In order to align with the provisions of the Companies Act, 2013, the Board on 30th May 2014 changed the nomenclature of the “Remuneration Committee” as “Nomination and Remuneration Committee” and reconstituted the Committee with three non-executive Independent Directors as Member of the Committee.

This Committee and the Policy is formulated in compliance with Section 178 of the Companies Act, 2013

II. OBJECTIVE

The Key Objectives of the Committee would be:

  • To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.
  • To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation.
  • To recommend to the Board on Remuneration payable to the Directors , Key Managerial Personnel and Senior Management.
III. DEFINITIONS

“Board” means Board of Directors of the Company.

“Company” means “Rockman Industries Limited.”

“Independent Director” means a director referred to in Section 149 (6) of the Companies Act, 2013.

“Key Managerial Personnel” (KMP) means

  • Managing Director
  • Company Secretary
  • Whole-time Director
  • Chief Financial Officer and
  • Such other officer as may be prescribed.

“Nomination and Remuneration Committee” shall mean a Committee of Board of Directors of the Company, constituted in accordance with the provisions of Section 178 of the Companies Act, 2013.

“Policy or This Policy” means, “Nomination and Remuneration Policy.”

“Remuneration” means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-Tax Act, 1961.

“Senior Management” means personnel of the Company who are members of its core management team excluding Board of Directors. This would include all members of management one level below the executive directors, including all the functional heads.

IV. INTERPRETATION

Terms that have not been defined in this Policy shall have the same meaning assigned to them in the Companies Act, 2013, and/or any other notification/ Regulation(s) as amended from time to time.

V. GUIDING PRINCIPLES

The Policy ensures that

  • The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully
  • Relationship of remuneration to performance is clear and meets appropriate performance benchmarks and
  • Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.
VI. ROLE OF THE NOMINATION AND REMUNERATION COMMITTEE (NRC)

The role of the Committee inter alia will be the following:

  • To formulate a criteria for determining qualifications, positive attributes and independence of a Director.
  • Formulate criteria for evaluation of Independent Directors and the Board.
  • Identify persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down in this policy.
  • To carry out evaluation of every Director’s performance.
  • To recommend to the Board the appointment and removal of Directors and Key Management Personnel.
  • To recommend to the Board policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management.
  • Ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks.
  • To devise a policy on Board diversity.
  • To carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification, as may be applicable.
  • To perform such other functions as may be necessary or appropriate for the performance of its duties.
VII. MEMBERSHIP OF NRC
  • The Committee shall comprise at least three (3) Directors, all of whom shall be non-executive Directors and at least half shall be Independent.
  • The Board shall reconstitute the Committee as and when required to comply with the provisions of the Companies Act, 2013 and applicable statutory requirement.
  • Minimum two (2) members shall constitute a quorum for the Committee meeting.
  • Term of the Committee shall be continued unless terminated by the Board of Directors.
VIII. CHAIRMAN
  • Chairman of the Committee shall be an Independent Director.
  • Chairperson of the Company may be appointed as a member of the Committee but shall not Chair the Committee.
  • In the absence of the Chairman, the members of the Committee present at the meeting shall choose one amongst them to act as Chairman.
  • Chairman of the Nomination and Remuneration Committee could be present at the Annual General Meeting or may nominate some other member to answer the shareholders’ queries.
IX. FREQUENCY OF MEETINGS

The meeting of the Committee shall be held at such regular intervals as may be required.

X. COMMITTEE MEMBERS’ INTERESTS
  • 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.
  • The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee.
XI. VOTING
  • Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee.
  • In the case of equality of votes, the Chairman of the meeting will have a casting vote.
XII. APPOINTMENT AND REMOVAL OF DIRECTOR, KMP AND SENIOR MANAGEMENT
1. APPOINTMENT CREITERIA AND QUALIFICATIONS

a. Director:

  • should be of high integrity and level of ethical standards;
  • should possess the requisite qualifications, skills, knowledge, experience and expertise relevant or useful to the business of the Company;
  • should, while acting as a Director be capable of balancing the interests of the Company, its employees, the shareholders, the community and of the need to ensure the protection of the environment;
  • act objectively and constructively while exercising his / her duties;
  • exercise his / her responsibilities in a bona fide manner in the interest of the Company
  • devote sufficient time and attention to his / her professional obligations for informed and balanced decision making;
  • assist the Company in implementing the best corporate governance practices;
  • strictly adhere to and monitor legal compliances at all levels; and
  • protect confidentiality of the confidential and proprietary information of the Company.

In addition, in the case of an Independent Director(s), he/she must also satisfy the criteria specifically set out under applicable laws including the Act

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

b. Key Managerial Personnel (KMP)

The KMPs and the Senior Management should possess the highest integrity and ethical standards and have the requisite qualification and experience in any field relevant to and necessary for the business of the Company, including but not limited to technology, finance, law, public administration, management, accounting, marketing, production and human resource. They should also meet the requirements of the Act, Rules and / or any other applicable laws.

2. APPOINTMENT AND REMOVAL

a. APPOINTMENT

  • (i) Depending upon the requirements of the Company for the Managing Director/ Whole-time Directors, the NRC shall identify persons and recommend their appointment to the Board including the terms of appointment and remuneration.
  • (ii) The Board will consider the recommendations of NRC and accordingly approve the appointment(s) and remuneration. The appointment of the Managing Director/ Whole-time Directors shall also be subject to the approval of the shareholders.
  • (iii) Appointments of KMPs  other than directors will be made in accordance with the Company’s Human Resource (HR) policy.

b. TERM/ TENURE

1. Managing Director/Whole-time Director

  • The Company shall appoint or re-appoint any person as its Managing Director/ Whole-time Directors 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.

2. Independent Director:

  • An Independent Director shall hold office for a term upto a maximum of five consecutive years and for not more than two consecutive terms, on the Board of the Company. They will be eligible for reappointment on passing of 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. However, if a person who has already served as an Independent Director for 5 years or more in the Company, he / she shall be eligible for appointment for one more term of 5 years only.

c. EVALUATION

The Committee shall carry out evaluation of performance of Directors at regular intervals.

d. REMOVAL

  • i) Removal of a Director
    Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other applicable Act, rules and regulations, the Committee may recommend to the Board with reasons recorded in writing, removal of a Director subject to the provisions and compliance of the said Act, rules and regulations.
  • Removal of KMP (other than whole time Directors ) and Senior Management personnel will be in accordance with the HR policy of the company and the Whole Time Directors or the HR head will exercise the authority to take appropriate action.

e. RETIREMENT

The Directors shall retire as per the applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company.

Retirement of KMP (other than whole time Directors ) and  Senior Management will be in accordance with the HR policy of the company

XIII. PROVISIONS RELATING TO REMUNERATION OF DIRECTORS, KMP AND SENIOR MANAGEMENT
General:
  • The remuneration / compensation / commission etc. to directors will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required.
  • The remuneration and commission to be paid to directors shall be as per the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.
  • Where any insurance is taken by the Company for its directors, KMP or any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration.
A. Remuneration to Whole Time Directors:
1. Fixed pay:

Whole Time Directors shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee in accordance with the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force. The break-up of the pay scale and quantum of perquisites including, employer’s contribution to P.F, superannuation fund, gratuity, medical expenses, club fees etc. shall be decided and approved by the Board on the recommendation of the Committee and approved by the shareholders and Central Government, wherever required.

2.Variable Pay

Whole Time Directors shall be eligible for commission in accordance with provisions of Companies Act, 2013

3. Minimum Remuneration:

If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Managerial Person in accordance with the provisions of Schedule V of the Companies Act, 2013 and if it is not able to comply with such provisions, with the prior approval of the Central Government.

4. Provisions for excess remuneration:

If any Managerial Person draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction of the Central Government, where required, he / she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government.

 B. Remuneration to Non-Executive / Independent Director:
 1. Remuneration / Commission:

The remuneration / commission shall be in accordance with the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.

 2. Sitting Fees:

The Non- Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed the maximum amount as provided in the Companies Act, 2013, per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time. This fee to be decided by the Board.

 3. 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 net profits of the Company computed as per the applicable provisions of the Companies Act, 2013

 C. Remuneration for Key Managerial Personnel (other than Whole Time Directors) , Senior Management and Other Employees

The remuneration for the Key Managerial Personnel other than Whole Time Directors and the Senior Management shall be based on the HR policy of the Company and shall be decided by the Whole Time Directors as per the internal process.

While doing so, they would be guided by the external competitiveness and internal parity through benchmarking.

Grade Structure

Employees are assigned grades according to their qualifications and work experience, competencies as well as their roles and responsibilities in the Company. Individual remuneration is determined within the appropriate grade and is based on following:

  • An individual’s experience, skill, competencies and knowledge relevant to the job; and
  • An individual’s performance and potential contribution to the Company.
XIV. REVIEW/AMENDMENT

Based on the recommendation of the NRC, the Board may review and amend any or all clauses of this Policy depending upon exigencies of business.

XV. MINUTES OF COMMITTEE MEETING

Proceedings of all meetings must be minuted and signed by the Chairman of the said meeting or the Chairman of the next succeeding meeting. Minutes of the Committee meeting will be tabled at the subsequent Board and Committee meeting.

XVI. 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.