Compensation (Including Departure Arrangements) for Members of the Highest Governance Body and Senior Managers

Remuneration of the Chairman and Executive Directors is determined by the Compensation Committee comprising only Non-Executive Directors, within the limits approved by the shareholders. The recommendations of the Compensation Committee are considered and approved by the Board. Remuneration of the seniormost levels of management below the Executive Directors is also recommended by the Compensation Committee to the Board for consideration and approval. Remuneration of other managers is approved by the Corporate Management Committee.

Part of the remuneration of the Chairman, Executive Directors and seniormost levels of management below the Executive Directors is linked to the performance of the Company; the quantum of such Performance Bonus paid for each financial year is determined by the Board on the recommendation of the Compensation Committee; such Bonus is determined, inter alia, on the basis of weightage on parameters of profit & profitability, market standing & organisation vitality and foundations of future growth. Details of compensation paid to the Executive Directors and other managers drawing remuneration above a certain prescribed level are provided to the shareholders every year in the Company's Report and Accounts.

Remuneration to Non-Executive Directors is by way of commission for each financial year; such commission is determined by the Board within the limits approved by the shareholders, based, inter alia, on the Company's performance and regulatory provisions. Such commission is payable on a uniform basis to reinforce the principle of collective responsibility. Non-Executive Directors are also entitled to sitting fees for attending meetings of the Board and Committees thereof, the limits for which have been approved by the shareholders.

Further, Stock Options are also granted to Directors and managers as effective instruments to align interest of employees and build synergy with those of the shareholders by creating a common purpose towards creating sustainable shareholder value, based, inter alia, on the Company's performance, the level/grade of the employee and such other criteria as may be determined by the Board/Compensation Committee.

There is no separate provision for payment of severance fee under the resolutions governing the appointment of Executive Directors who have all been drawn from amongst the management cadre; such appointment is covered by the terms and conditions of a Service Contract. In terms of the Articles of Association of the Company, a notice of one month is required to be given by a Director seeking to vacate office and the resignation takes effect upon the expiration of such notice or its earlier acceptance by the Board. In terms of the Service Contract applicable to the management cadre, employment may be terminated at any time by either party giving to the other one month's notice in writing.