Presented By: Pradnya Naik (94) Darshana Shinde (111) Siddhi Koli (112) Dimple Thakkar (116)

Corporate governance reforms world over have brought into focus a dichotomy of performance and conformance of responsibilities

The main attention is on crucial questions about the true role and responsibility of Board of Directors in the modern organization Directors remuneration is of legitimate concern to the shareholders.

Company should establish a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors No director should be involved in deciding his or her own remuneration

Openness: Shareholders are entitled to a full and clear statement of benefits available to the directors

 The

company must have a credible and transparent policy in determining and accounting for the remuneration of the directors

The

policy should avoid potential conflicts of interest between the shareholders, the directors, and the management
of importance of fixed and variable component of Directors Remuneration

Explanation

Information on performance criteria for share incentives or variable components of remuneration Linkage between remuneration and performance Parameters and rationale For annual bonus and other non-cash schemes

Description of supplementary pension or early retirement scheme for directors

Clause 49 of the listing agreement has recommended that the board should set up a remuneration committee Companies without remuneration committees may not have the appropriate mechanisms to determine Important monitoring and arbiter function in the setting of top pay Bring about objectivity in determining the remuneration package while striking a balance between the interest of the company and the shareholders

Levels of remuneration should be sufficient to attract and retain and motivate executive directors committee should judge where to position their company relative to other companies committee should be sensitive to the wider scene, including pay and employment conditions within the company, when determining annual salary increases

Remuneration

Remuneration

Remuneration committee should consist of independent non-executive directors The board itself or the share holders should determine the remuneration of the non-executive directors, including members of the remuneration committees within the limits set in the Articles of Association Members should be listed each year in the boards remuneration report to shareholders

Consult the chairman or CEO about their proposal relating to remuneration of executive directors and have access to advice inside or outside the company

The Chairman of the board should ensure that the company maintains contact with the principal shareholders about the remuneration in the same way as it does for other matters

By the articles of the company or by special resolution Amount and the mode of remuneration shall be in accordance with the provisions of section 198.
Amount: Not exceed eleven percent of the net profits of the

company in a particular year excluding the sitting fees payable to directors for attending board and committee meetings
Mode: The remuneration of a whole time or managing director

may be paid either by way of a monthly payment or at a specified percentage of the net profits of the company or partly by one way and partly by the other.

A director who in neither in the whole time employment of the company nor a managing director

By monthly, quarterly or annual payment

By way of commission

-Such commission shall not exceed 1%of net profits if the company has a managing or whole time director & -3% if the company has no managing or whole time director

If any director receives any remuneration in excess of the permissible limit, he will have to refund such sums to the company No director of a company who is in receipt of any commission from the company and who is either in the whole-time employment of the company or a managing director shall be entitled to receive any commission or other remuneration from any subsidiary of such company The above provisions pertaining to remuneration do not apply to a private company unless it is a subsidiary of a public company

Disclosure on the remuneration package:

All elements of remuneration package of all the

directors i.e. salary, benefits, bonuses, stock options, pension etc Details of fixed component and performance linked incentives, along with the performance criteria Service contracts, notice period, severance fees Stock option details, if any and whether issued at a discount as well as the period over which accrued and exercisable.

 All

pecuniary relationship or transactions of the non-executive directors vis--vis the company

Criteria

of making payments to non-executive directors in its annual report

the number of shares and convertible instruments held by non-executive directors

Disclose