Nomination and Remuneration Policy

Nomination and Remuneration Policy of Directors, Key Managerial Personnel and Senior Management

Introduction:

In pursuance of the Company’s Policy to pay equitable remuneration to Directors, Key Managerial Personnel (KMP) and employees of the Company consistent with the goals of the Company and in terms of the provisions of the Companies Act. 2013 and the listing agreement as amended from time to time, this Policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Committee and approved by the Board of Directors at their meeting held on 01.08.2014.

The Committee at its meeting held on 25.09.2017 on taking note of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has reviewed the Nomination and Remuneration Policy of the Company and has recommended few to the Board and the amended Policy was approved by the Board at their meeting held on 25.09.2017.

The objective and purpose of this policy are:

• To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

• To determine remuneration based on the Company’s size and financial position and trends and practices on remuneration prevailing in peer companies, in the manufacturing sector.

• To carryout evaluation of the performance of Directors, as well as Key Managerial and Senior Management Personnel.

• To compensate them to their effort, performance, dedication and achievement relating to the Company’s operations.

• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons.

Effective Date:

This Policy as amended shall be effective from 25th September 2017. 

Constitution of the Nomination and Remuneration Committee:

The Board has constituted the Nomination and Remuneration Committee on 30.05.2014. The Nomination and Remuneration Committee comprises of following Directors:

SL.No       Name of Person
1. Sri R.C.H.Reddy, Chairman (Independent Non-Executive Director)
2. Sri S.Pathy, Member (Non-Executive Chairman)
3. Sri R.Santharam, Member (Non-Executive Director)
4. Sri R.Varadarajan, Member  (Independent Non-Executive Director)

The Board has the power to reconstitute the Committee consistent with the Company’s policy and applicable statutory requirement.

Definitions 

  • Board means Board of Directors of the Company
  • Director means Directors of the Company
  • Committee means Nomination and Remuneration Committee of the Board of Directors of the Company as constituted or reconstituted by the Board.
  • Company means LAKSHMI AUTOMATIC LOOM WORKS LIMITED
  • Independent Director means a director referred to in Section 149(6) of the Companies Act, 2013.
  • Key Managerial Personnel (KMP) means-

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

ii) Company Secretary;

iii) Chief Financial Officer

  • Senior Management means

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

Unless the context otherwise requires, words and expressions used in         this Policy and not defined herein but defined in the Companies Act,         2013 as may be amended from time to time 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 to the 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 THE NOMINATION AND REMUNERATION COMMITTEE


The Committee shall:
 

  • Formulate the criteria for determining qualifications, positive attributes and independence of a director.
  • Identify persons who  are  qualified  to  become  Directors and persons who may be appointed in Key Managerial and Senior Management positions in accordance with  the  criteria  laid  down  in  this
  • Recommend to the Board, appointment and removal of Directors, KMP and Senior Management Personnel.

PART – B

POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTORS, KMP AND SENIOR MANAGEMENT

Appointment criteria and qualifications: 

  1. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level 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 discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.

  1. The Company shall not appoint or continue the employment of any person as Managing Director or 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.

Term / Tenure:

  1. Managing Director/Whole-time Director:

The  Company  shall  appoint  or  re-appoint  its  Managing  Director  or  Whole time 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.

  1. 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.

 At the time of appointment of Independent Director, it should be ensured that number of Boards on which such person serves is restricted to seven listed companies as an Independent Director; and in case such person is serving as a Whole-time Director in any listed company the number of boards on which such person serves as Independent Director is restricted to three listed companies.

Evaluation:

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

Removal:

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, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations.

Retirement:

The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company. The Board will have the discretion to retain the KMP, Senior Management Personnel in the same position / remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

PART – C

POLICY RELATING TO THE REMUNERATION FOR THE KMP AND SENIOR MANAGEMENT PERSONNEL

General:

  1. The remuneration / compensation / commission etc. to the KMP and Senior Management Personnel 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.
  1. The remuneration  and  commission  to  be  paid  to  the  KMP shall  be  in accordance with the slabs / conditions/ percentage approved by the Board subject to the provisions of the Companies Act, 2013,  and  the rules made thereunder.
  1. 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 Managing Director or Manager or Whole-time Director.
  1. Where any insurance is taken by the Company on behalf of its Managing Director or Manager or Whole-time Director, Chief Executive Officer, the Company Secretary and Chief Financial Officer or any other Senior Management Personnel 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.

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 or Manager or Whole-time Director 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 previous approval of the Central Government.

Sitting Fees:

The Company may pay sitting Fees to Directors for attending Meetings of the Board or Committees thereof such sum as may be decided by the Board of  directors which shall not exceed One lakh Rupees per meeting of the Board or Committee thereof or such amount as  may  be prescribed by the Central Government from time to time.

Commission:

Commission to non executive Director may be paid within the monetary limit approved by shareholders, subject to the prescribed limit on the profits of the Company computed as per the applicable provisions of the Companies Act, 2013.

Stock Options:

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