[Pursuant to Section 178 (3) of the Companies Act, 2013 and Regulation 19 read along with Part D of Schedule II of the SEBI Listing Regulations]

1. PREAMBLE

Berger Paints India Limited (the “Company”) has formulated this Nomination and Remuneration Policy (“Policy”) to provide a framework for remuneration of Members of the Board of Directors (the “Board”) of the Company, Key Managerial Personnel and other employees of the Company).

The philosophy for remuneration of Directors of the Company, Key Managerial Personnel (“KMP”) and all other employees of the Company is based on the commitment of fostering a culture of Leadership with Trust. The remuneration policy is aligned to this philosophy.

This Policy has been prepared pursuant to the provisions of Section 178(3) of the Companies Act, 2013 (“Act”) and Regulation 19 read with Part D of Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). In case of any inconsistency between the provisions of law and this Policy, the provisions of the law shall prevail and the Company shall abide by the applicable law. While formulating this policy, the Nomination and Remuneration Committee (“NRC”) has considered the factors laid down under Section 178(4) of the Act, which are as under:  

"(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 reflecting short and long-term performance objectives appropriate to the working of the company and its goals”

2. OBJECTIVES 

2.1 To ensure an effective process for identifying persons through a promotion policy, who are qualified to become directors and who may be appointed in Senior Management in accordance with the criteria laid down and to recommend to the Board appointment of Senior Management based on the criteria fixed in this regard; 

3. REMUNERATION OF NON-EXECUTIVE AND INDEPENDENT DIRECTORS

3.1  Independent Directors (“ID”) and Non-Independent, Non-Executive Directors (“NED”) may be paid sitting fees (for attending the Meetings of the Board and of Committees of which they may be Members) and commission within regulatory limits.

3.2  Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the NRC and approved by the Board.

3.3  Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the Company (taking into consideration the challenges faced by the Company and its future growth imperatives).

3.4  Overall remuneration should be reflective of size of the Company, complexity of the sector/industry/Company’s operations and the Company’s capacity to pay the remuneration.

3.5  Overall remuneration practices should be consistent with recognized best practices.

3.6  The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board based on Company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board. The remuneration payable by the Company to NEDs shall be subject to the conditions specified in the Act and the SEBI Listing Regulations including in terms of monetary limits, approval requirements and disclosure requirements.  

3.7  In addition to the sitting fees and commission, the Company may pay to any Director such fair and reasonable expenditure, as may have been incurred by the director while performing his/her role as a Director of the Company. This could include reasonable expenditure incurred by the Director for attending Board / Board Committee Meetings, general meetings, court convened meetings, meetings with shareholders / creditors / management, site visits, induction and training (organized by the Company for directors) and in obtaining professional advice from independent advisors in the furtherance of his/her duties as a Director.

4. REMUNERATION OF EXECUTIVE DIRECTOR / KEY MANAGERIAL PERSONNEL / OTHER EMPLOYEES

4.1  The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be:

• Market competitive (market for every role is defined as companies from which the  Company attracts talent or companies to which the Company loses talent)
• Driven by the role played by the individual,

•  Reflective of size of the Company, complexity of the sector/industry/Company’s operations and the Company’s capacity to pay,

• Consistent with recognized best practices and

• Aligned to any regulatory requirements.

4.2  The compensation paid to the Executive Directors (including Managing Director) will be within the scale approved by the shareholders. The elements of the total compensation, approved by the NRC will be within the overall limits specified under the Act. The remuneration payable by the Company to the Executive Directors shall be subject to the conditions specified in the Act and the SEBI Listing Regulations including in terms of monetary limits, approval requirements and disclosure requirements.  

4.3  The Company’s total compensation for KMP as defined under the Act / other employees will consist of:  

• fixed compensation in line with the skills, experience and performance; 

• variable compensation, including performance based incentive; 

• benefits including retirement, insurance, and medical coverage; and 

• work-related facilities and perquisites in line with policies issued from time to time.

4.4  In addition, select senior executives including the Executive Directors (including Managing Director) will be eligible for long-term incentive plan in the form of ESOPs, as per the ESOP scheme in force from time to time. Grants under the ESOP scheme will be approved by the NRC.

4.5  In addition to the basic/ fixed salary, benefits, perquisites, and allowances as provided above, the Company may provide executive directors (including managing director) such remuneration by way of commission, calculated with reference to the net profits of the Company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the executive directors (including managing director) would be based on performance as evaluated by the Board or the NRC and approved by the Board. In case of inadequacy of profit in any financial year, the remuneration payable to the Executive Director (including Managing Director) shall be further subject to the relevant provisions of the Act. 

4.6  The NRC will determine the annual variable pay compensation in the form of annual incentive and annual increment for the executive director subject to the achievement of certain performance criteria and such other parameters as may be considered appropriate from time to time by the Board, such as Company’s and individual’s performance against the pre-agreed objectives for the year.

4.7  A formal annual performance management process will be applicable to all employees, including senior executives. Performance linked bonus /incentive and annual increases in fixed and variable compensation of individual executives will be linked to the performance assessment of individual employee and the Company’s performance.   

4.8  Executive directors will not be paid sitting fees for any Board / Committee Meetings attended by them.

5. COMMITTEE MEMBERS INTEREST

5.1  A Member of the NRC is not entitled to participate in the discussions when his/her own   remuneration is discussed at a meeting or when his/her performance is being evaluated. 

5.2  The NRC may invite such executives, as it considers appropriate, to be present at the meetings of the NRC.

6. MANAGERS & EXECUTIVES

The salaries and periodicity of revision of Managers reporting to the Managing Director will be determined by the Managing Director after consultation with the Head of HR and those of other Managers and Executives, by the Head of HR, in consultation with the Managing Director, based on need of the Company and performance, job responsibilities, qualification, experience and location of the employees. The salary of Head of HR will be determined by the Managing Director based on the above criteria. Managers may be granted ESOP and similar benefits, as are prevailing, by the Remuneration Committee.

7. BUSINESS CONTINUITY 

In circumstances where there is an urgent need to fill any vacant position(s) of Senior Management in the Company, the  Head of HR and/or the Managing Director & CEO may proceed with the appointment and fixing of remuneration of suitable candidates in accordance with the criteria laid out under this Policy and details of the same will be placed for ratification at the subsequent meeting of the Board/Committee.

8. IMPLEMENTATION 

The Committee may issue guidelines, procedures, formats, reporting mechanism and manuals in supplement and for better implementation of this Policy as considered appropriate. The Committee may delegate any of its powers to one or more of its members. This Policy shall be reviewed by the Committee periodically.

9. ADOPTION, CHANGES AND DISCLOSURE OF INFORMATION

9.1  This Policy and any changes thereof will be approved by the Board based on the  recommendation(s) of the NRC. 

  9.2  This Policy may be reviewed at such intervals as the Board or NRC may deem necessary

9.3  Any subsequent amendments/modifications in the Act or the Listing Regulations shall automatically prevail over this Policy without any further act by the Board of Directors of the Company

   9.4  Such disclosures of this Policy as may be required under the Act and SEBI Listing Regulations may be made.

10. DISSEMINATION OF POLICY  

This Policy shall also be posted on the website of the Company and the details of this Policy, including the evaluation criteria, shall be mentioned in the Annual Report of the Company.”