1. Introduction

The Company considers human resources as its invaluable assets. This policy on nomination and remuneration of Directors, Key Managerial Personnel (KMP) and other employees has been formulated in terms of the Companies Act, 2013, in order to pay equitable remuneration to the Directors, KMPs and employees of the Company and to harmonize the aspirations of human resources with the goals of the Company.

2. Objective

The objective and purpose of this policy are

  • To guide and recommend to the Board in matters relating to the appointment and removal of Directors and Key Managerial Personnel.
  • To recommend to the Board the remuneration payable to the Directors and Key Managerial Personnel.
  • To appoint/remove Senior Management Persons (SMPs) and to decide the remuneration payable to them, under criteria laid down for their appointment and remuneration either directly or through delegated authority.
  • To recommend reward(s) payable to the KMP and Senior Management linked directly to their effort, performance, dedication and achievement relating to the Company’s operations.
  • To attract, retain, motivate and promote talent and to ensure the long-term sustainability of talented managerial persons and create competitive advantage.
  • To do all such other acts/deeds as may be prescribed by the Board.

3. Definitions

  1. “Act” means Companies Act, 2013, and rules framed under it as amended from time to time.
  2. “Board of Directors” or Board, in relation to the company, means the collective body of the Directors of the Company.
  3. “Committee” means the Nomination and Remuneration Committee of the Company as constituted or reconstituted by the Board.
  4. “Company” means “Village Financial Services Limited”.
  5. “Independent Director” means a Director referred to in Section 149 (6) of the Companies Act, 2013.
  6. “Key Managerial Personnel” or KMP, means persons referred to in Section 2(51) of the Companies Act, 2013.
  7. Senior Management means personnel of the Company who are members of its core management team excluding the Board of Directors and shall also include all members of management one level below the executive directors including all functional heads.

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.

4. Role of the Committee

The role of the Committee, inter-alia, will be the following

  1. To formulate criteria for determining qualifications, positive attributes and independence of a Director, KMP and SMP.
  2. To identify persons who are qualified to become Directors and KMP under the criteria laid down, and recommend to the Board their appointment and removal.
  3. To recommend to the Board a policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management.
  4. To undertake the process of due diligence under ‘Fit and Proper Policy’ of the Company, at the time of appointment/ renewal of appointment of directors and decide on the acceptance or otherwise of the directors.
  5. To carry out any other function as is mandated by the Board from time to time and/or enforced by the statutory notification, amendment or modification, as may be applicable.

5. Membership

The Committee shall consist of a minimum of three Non-Executive Directors, and the majority of them shall be independent.

A minimum of two members shall constitute a quorum for the Committee meeting.

Membership of the Committee shall be disclosed in the Annual Report.

Term of the Committee shall be continued unless otherwise terminated by the Board of Directors.

6. Chairperson

The Chairperson of the Committee shall be an Independent Director.

The Chairperson of the Company may be appointed as a member of the Committee but shall not be the Chairperson of the Committee.

In the absence of the Chairperson, the members of the Committee present at the meeting shall choose one amongst them to act as Chairperson.

The Chairperson of the Committee shall attend the general meetings of the Company or in his/her absence, any other member of the Committee authorized by him/her in this behalf.

7. Frequency of meetings

The meetings of the Committee shall be held at such regular intervals as may be required and decided upon mutual discussion among the members.

8. Committee members’ interests

A member of the Committee is not entitled to be present when his or her remuneration is discussed at a meeting or when his or her performance is being evaluated.

The Committee may invite such executives, officials or such other persons as it considers appropriate to be present at the meetings of the Committee.

9. Secretary

The Company Secretary of the Company shall act as the Secretary of the Committee.

10. Voting

Matters arising for determination at the Committee Meetings shall be decided by a majority of votes of the Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee.

In the case of an equality of votes, the Chairperson of the meeting shall have a casting vote.

11. Nomination duties

The duties of the Committee concerning nomination matters include

  1. Ensuring that there is an appropriate induction and training programme in place for new Directors and Members of the Senior Management and reviewing its effectiveness;
  2. Ensuring that on appointment to the Board, Non-Executive Directors and Independent Directors receive a formal letter of appointment under the guidelines provided under the Companies Act, 2013;
  3. Identifying and recommending Directors who are to be put forward for retirement by rotation.
  4. Determining the appropriate size, diversity and composition of the Board;Determining the appropriate size, diversity and composition of the Board;
  5. Setting a formal and transparent procedure for selecting new Directors for appointment to the Board;
  6. Delegating any of its powers to one or more of its members or the Secretary of the Committee;
  7. Recommending any necessary changes to the Board.
  8. Considering any other matters as may be requested by the Board.

12. Remuneration duties

The duties of the Committee concerning remuneration matters include

  • Recommending to the Board a Remuneration Policy ensuring
    • that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate members of the Board of the quality required to run the Company successfully;
    • relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
    • remuneration to directors, KMP and SMP 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.
  • Recommending the remuneration of the Directors and KMP under the laid down criteria.
  • Delegating any of its powers to one or more of its Members or the Secretary of the Committee.
  • Considering any other matters as may be requested by the Board.

13. Senior Management Personnel(SMP)

Senior Management Personnel to be appointed or promoted and removed/relieved and be paid remuneration with the authority of Managing Director of the Company based on the business need and the suitability of the candidate in accordance with the criteria laid down for identification of persons who may be appointed in the Senior Management which includes the qualification, skills and experience of the candidate for the responsibility the position shall carry and Policy relating their remuneration. The details of the appointment made and the personnel removed shall be presented to the Committee for its ratification followed by noting by the Board Members.

14. Minutes of a committee meeting

The proceedings of all meetings must be written in the form of Minutes and these Minutes must be signed by the Chairperson of the Committee at the subsequent meeting or within one month from the date of the meeting, whichever is earlier.

Minutes of the Committee meetings will be tabled at the subsequent Board and Committee meetings.

15. Notification

This Policy, including amendments thereof, shall be made available on the Company‘s website and the salient features of the Policy and changes therein, if any, alongwith the web address of the Policy shall be disclosed in the Boards‘ Report of the Company.

16. Policy review

This Policy is framed based on the provisions of the Companies Act, 2013, and rules under it.

In case of any subsequent changes in the provisions of the Companies Act, 2013, or any other regulations which makes any of the provisions in the policy inconsistent with the Act, then the provisions of the Act or regulations would prevail over the policy and the provisions in the policy would be modified in due course to make it consistent with the law.

This policy shall be reviewed by the Nomination and Remuneration Committee as and when any changes are to be incorporated in the policy due to change in applicable law or as may be felt appropriate by the Committee. Any changes or modifications in the policy as recommended by the Committee would be given for approval of the Board of Directors.

This Policy has been approved by the Board of Directors atits meeting held on May 18, 2018.