NRC Policy – HLS Asia Limited

NOMINATION AND REMUNERATION POLICY

(Approved by Board of Directors on the recommendation of NRC on 1st March, 2022)

Revised on: 20th June, 2024

Introduction:

In pursuance of the Company’s policy to consider human resources as its invaluable assets, to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP), Senior Management Personnel and employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 as amended from time to time this policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel has been formulated by the Committee and approved by the Board of Directors.

Objective and purpose of the Policy:

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.
To carry out evaluation of the performance of Directors, Board, Key Managerial and Senior Management Personnel.
To provide them reward/bonus linked directly 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 and create competitive advantage. In the context of the aforesaid criteria the following policy has been formulated by the Nomination and Remuneration Committee and adopted by the Board of Directors.

Effective Date:

This policy shall be effective from the financial year beginning 1^st April, 2022.

Constitution of the Nomination and Remuneration Committee:

The Nomination and Remuneration Committee has been constituted by the Board of Directors of the Company on 20^th March, 2015 in accordance with the provisions of the Companies Act, 2013 and the duties, functions scope of the Committee shall be as per the provisions of Section 178 of the Companies Act, 2013. The constituted Nomination and Remuneration Committee came into effect from 21^st March, 2015.

Definitions:

Board means Board of Directors of the Company.
Directors mean Directors of the Company.
Committee means Nomination and Remuneration Committee of the Company as constituted or reconstituted by the Board.
Company means HLS Asia Limited.
Independent Director means a director referred to in Section 149 (6) of the Companies Act, 2013.
Key Managerial Personnel means-
the Chief Executive Officer or the Managing Director or the Manager;
the Whole-Time Director;
the Chief Financial Officer;
the Company Secretary;
such other Officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and
such other officer as may be prescribed.
Senior Management Personnel for the purpose of Remuneration Policy means employee/s of the Company occupying the position in the grade/designation of Manager and above and shall also include all Functional Heads of the Company. 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 (Executive and Non-Executive)
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., Part – D covers responsibility of the committee.

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:

identify persons who are qualified to become directors and who may be appointed in Key Managerial and senior management positions in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director’s performance.
formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board policies including policy for Performance linked bonus (PLB) , relating to the remuneration for the directors, key managerial personnel and other employees.
ensure that—

(a) 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;

(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay including Performance linked bonus (PLB) reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

Recommend to the board, all remuneration, in whatever form, payable to senior management.

PART – B: POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR, KMP AND SENIOR MANAGEMENT

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 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.

The Company shall appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years subject to the company obtaining necessary approvals from shareholders and other regulatory authorities if required.

Term / Tenure:
Managing Director/Whole-time Director/Executive Director:

The Company shall appoint or re-appoint any person as its Managing Director or Executive Director for a term not exceeding three/ five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.

Independent Director:

The Ministry of Corporate Affairs vide notification number G.S.R. 839(E) dated 5^th July, 2017 issued the Companies (Appointment and Qualification of Directors) Amendment Rules, 2017 inter-alia amending rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014. The said amended Rule 4 inter-alia provides that an unlisted public company which is a joint venture, will not be required to appoint Independent Directors.

In pursuance of aforementioned provisions of Companies Act, 2013, HLS Asia Limited (“the Company”) no longer requires to appoint Independent Director. (Link:https://www.mca.gov.in/bin/ebook/dms/getdocument?doc=MTM2NTI=&docCategory=Circulars&type=open)

Evaluation:

The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management Personnel and Functional Heads as and when necessary and advise on the remuneration payable to them as and when necessary.

Removal:

Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made there under 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 internal HR policy and provisions and compliance of the Act and other applicable, rules and regulations.

Retirement:

The 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 Committee shall recommend to the Board and its discretion to retain the KMP and 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 MANAGING DIRECTOR/WHOLE-TIME DIRECTOR/EXECUTIVE DIRECTOR, KMP AND SENIOR MANAGEMENT PERSONNEL

General:
The remuneration / compensation / commission etc. to the Whole-time Director, Managing Director, Executive Director and KMP 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 other regulatory authorities, if required.

The remuneration and commission to be paid to the Managing Director/Whole-time Director/Executive Director shall be in accordance with the overall limits as percentage / slabs/ conditions laid down in the Articles of Association of the Company and as per the provisions of the Companies Act, 2013, and the Schedule V and other applicable rules made thereunder.
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/Whole-time Director/Executive Director.

Remuneration to Whole-time / Executive / Managing Director:
Fixed pay:

The Managing Director/Whole-time Director/Executive Director shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee. The break-up of the pay scale and quantum of perquisites including employer’s contribution to P.F, pension scheme, medical expenses, LTA, club fees etc. shall be decided and approved by the Board on the recommendation of the Committee and approved by the shareholders and other regulatory authorities if required.

Performance Based Remuneration/ Performance Linked Bonus (PLB):

In addition to fixed remuneration the Company will implement a system of performance linked bonus/incentive designed to create a strong relationship between performance and remuneration. Performance based incentive will be linked to specific performance targets which will be disclosed to relevant employees regularly.

The Nomination and Remuneration Committee will conduct annual performance appraisals for Managing/Whole Time Director/Executive Director and recommend to the Board for any variation in the salary within the limits approved by the shareholders.

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 Director/Executive Director in accordance with the provisions of Schedule V of the Companies Act, 2013.

Remuneration to Non- Executive Director if any:
Remuneration / Commission:

The remuneration / commission shall be fixed as per the slabs and conditions mentioned in the Articles of Association of the Company and the Companies Act, 2013 and the rules made thereunder.

Sitting Fees:

The Non- Executive 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 amount approved by the Board of Directors subject to the limits or such amount as may be prescribed by the Central Government from time to time.

Level & Composition of remuneration :

The Committee shall ensure that level and composition of remuneration is reasonable and sufficient to attract, retain and motivate non-executive directors of the quality required to run the company successfully

Remuneration to KMP and Senior Management Personnel:

Fixed pay:

The KMP and Senior Management Personnel shall be eligible for a monthly remuneration as approved by Remuneration Committee/Board of Directors. The break-up of the pay scale and quantum of perquisites including, employer’s contribution to P.F, pension scheme, medical expenses, LTA, other perquisites, club fees etc. shall be decided and approved by the Committee/ Board of Directors.

Performance Based Remuneration (PLB)/ Performance Linked Bonus (PLB):

PART –D: RESPONSIBILITY OF COMMITTEE

To devise a policy on board diversity.
To review and assesses the composition of the Board of Directors and recommend the appointment of new Directors and also oversee the conduct of the annual review of Board effectiveness.

Evaluation of Directors:

The Committee shall evaluate the performance of each Director including Managing Director, and Board of Directors and recommend the same of Board of Directors for discussion in its meeting. For this clause Director mean Director of the Company, including outgoing Director who served the Company for more than six (6) months of period.

Nomination & Remuneration Committee:

The Nomination & Remuneration Committee is responsible for the monitoring, implementation and review of this policy. The Nomination & Remuneration Committee shall provide recommendations as and when it deems necessary to the Board as to how to effectively structure and make changes as and when required to facilitate a remuneration strategy, which will meet the needs of the Company.

Conflict of law clause:

Any provision in this policy, insofar as it is inconsistent or contradictory with the provisions of law and/ or any statutory enactments shall, to the extent of such inconsistency, be void and the provisions of law/ statutory enactment shall prevail.