ANNEXURE - 3

Remuneration to Directors

NON-EXECUTIVE DIRECTORS

The Non-Executive Directors' remuneration and sitting fees paid/payable by the Company in the Fiscal 2015, are given below:

No Commission was paid to any Non-Executive Director for Fiscal 2015 in view of inadequacy of profits.

Some of the aforementioned Non-Executive Directors are also on the Board of the Company's subsidiaries and associates, in a non executive capacity and are paid remuneration and sitting fees for participating in their meetings. Other than the above, the Non-Executive Director's have no pecuniary relationship or transactions with the Company, its subsidiaries and associates.

Industry comparative data for 13 similar sized companies:

The Company has increased sitting fees to be paid to Non-Excutive Directors w.e.f. May 26, 2015, the details of which are given in the Corporte Governance Report.

EXECUTIVE DIRECTORS

The remuneration paid to the Executive Directors is commensurate with industry standards and Board level positions held in similar sized companies, taking into consideration the individual responsibilities shouldered by them, their individual and Company's performance and is in consonance with the terms of appointment approved by the Members, at the time of their appointment.

The NRC, reviews and recommends to the Board the changes in the managerial remuneration of the Executive Directors on a yearly basis. This review is based on the Balance Score Card that includes the performance of the Company and the individual director on certain defined qualitative and quantitative parameters such as volumes, EBITDA, cashflows, cost reduction initiatives, safety, strategic initiatives and special projects as decided by the Board vis-a-vis targets set in the beginning of the year. This review also takes into consideration the benchmark study undertaken by reputed independent agencies on comparative industry remuneration and practices.

Incentive remuneration paid/payable is subject to the achievement of certain performance criteria and such other parameters as may be considered appropriate from time to time by the Board, not exceeding 200% of the basic salary. An indicative list of factors that may be considered for determining the extent of incentive remuneration, by the Board and as recommended by the Nomination and Remuneration Committee are, the Company's performance on certain defined qualitative and quantitative parameters as may be decided by the Board from time to time, industry benchmarks of remuneration and performance of the individual.

1. Terms of Appointment of Executive Directors
   1. Remuneration
      • Basic Salary Rs. 5,20,000/- per month for Mr Ravindra Pisharody and Rs. 4,10,000/- per month for Mr Satish Borwankar upto a maximum of Rs. 7,00,000/- per month for both of them.
      • Benefits, Perquisites and Allowances upto 140% of salary which includes housing 85% and other perquisites and allowances upto a maximum of 55%. The above limit does not include hospitalistion and major medical expenses, car perks and telecommunication facilites.
      • Incentive Remuneration not exceeding 200% of their Basic Salary to be determined by the Board.
   2. Period of Contract: June 21, 2012 – June 20, 2017 for both the directors.
   3. Severance Fees: The Contracts with the Executive Directors may be terminated by either party giving the other party six months' notice or the Company paying six months' salary in lieu thereof. There is no separate provision for payment of Severance fees.
2. Remuneration to Executive Directors in Fiscal 2015
   
   

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors approved the following, taking into consideration the criterias detailed in the Remuneration Policy, seperately annexed to the Directors' Report:

-	an increment of approximately 9% for Mr Pisharody and Mr Borwankar, individually, for Fiscal 2015.
-	an incentive remuneration, being the flexible component of the aforementioned remuneration which was well within the limit of 200% of basic salary as approved by the Shareholders, was approved for Fiscal 2015.

Industry Comparative Data

On a Survey conducted on comparitive industry benchmarks based on remmuneration to Executive Director on "cost to the Company basis", Mr Pisharody's remuneration was slightly higer than the External Industry median* whereas Mr Borwankar's remuneration was below the said median.

^* The external Industry Median refers to the 50^th percentile of comparable roles in similar sized companies.

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