NOMINATION & REMUNERATION COMMITTEE & ITS FUNCTION

NRC Committee of Central Insurance Company Limited comprises four members. The committee is headed by a director who is an Independent Director of the Company.

Terms of reference (ToR) of NRC committee in line with the corporate governance Condition no.6 (1) and other compliance as per 6(2) to 6 (5) of BSEC notification no. BSEC/CMRRCD/2006-158/207/Admin/80 dated 3 June 2018 is as follows-

Terms of Reference

1. PURPOSE

The Committee assists the Board in formulation of the nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and top level executive as well as a policy for formal process of considering remuneration of directors, top level executive.

2. AUTHORITY

The Nomination and Remuneration Committee is a Committee of the Board of Central Insurance Company Limited from which it derives its authority and to which it regularly reports.

The Committee has delegated authority from the Board in respect of the functions and powers set out in these Terms of Reference.

3. Constitution

Chairperson-

• One member of the NRC to be Chairperson of the Committee appointed by the Board, who shall be an independent director;
• In the absence of the Chairperson of the NRC, the remaining members may elect one of themselves as Chairperson for that particular meeting, the reason of absence of the regular Chairperson shall be duly recorded in the minutes;
• The Chairperson of the NRC shall attend the annual general meeting (AGM) to answer the queries of the shareholders:

Provided that in absence of Chairperson of the NRC, any other member from the NRC shall be selected to be present in the annual general meeting (AGM) for answering the shareholder’s queries and reason for absence of the Chairperson of the NRC shall be recorded in the minutes of the AGM.

Membership-

• The Committee shall comprise of at least three members including an independent director;
• All members of the Committee shall be non-executive directors;
• Members of the Committee shall be nominated and appointed by the Board;
• The Board shall have authority to remove and appoint any member of the Committee;
• In case of death, resignation, disqualification, or removal of any member of the Committee or in any other cases of vacancies, the board shall fill the vacancy within 180 (one hundred eighty) days of occurring such vacancy in the Committee;
• The Chairperson of the Committee may appoint or co-opt any external expert and/or member(s) of staff to the Committee as advisor who shall be nonvoting member, if the Chairperson feels that advice or suggestion from such external expert and/or member(s) of staff shall be required or valuable for the Committee;

Secretary-

• The company secretary shall act as the member secretary of the Committee;

4. Proceedings of Meetings

Frequency of Meetings-

• The NRC shall conduct at least one meeting in a financial year;
• The Chairperson of the NRC may convene any emergency meeting upon request by any member of the NRC;

Quorum-

• The quorum of the meeting of the NRC shall be constituted in presence of either two members or two third of the members of the Committee, whichever is higher,
• The quorum of the NRC meeting shall not constitute without attendance of at least an independent director;

Meeting Fees-

• No member of the NRC shall receive, either directly or indirectly, any remuneration for any advisory or consultancy role or otherwise, other than Director’s fees or honorarium from the company.

Minutes of Meeting-

• The proceedings of each meeting of the NRC shall duly be recorded in the minutes and such minutes shall be confirmed in the next meeting of the NRC.

5. Role of NRC

• NRC shall be independent and responsible or accountable to the Board and to the shareholders
• To oversee the preparation and maintenance of a remuneration philosophy and policy to promote performance culture
• To monitor the remuneration structure and levels of Top Executives, Senior Managers and all other Officers
• To review the effectiveness of remuneration policy to ensure that whether the Board’s set objectives and expectations are being met
• To ensure that the structure and mix of fixed and variable pay and other elements are in alignment with the overall business objectives
• To guide and provide proper directives to HRD during preparation and review of any policy or process related to compensation and benefits
• To review the annual salary increment for all employees
• To ensure that all benefits, including retirement benefits and other financial arrangements are justified, appropriately valued and promoting performance based reward & recognition.
• The Committee shall report to the Board and disclose the nomination and remuneration policy and the evaluation criteria and activities of NRC during the year at a glance in its annual report.

6. Major activities during the year

The Committee carried out its functions in accordance with its Charter and applicable laws in key areas of the annual financial reporting cycle. During the year under review, the Committee carried out the following activities:

• Reviewed and recommended to the Board for adoption the updated Code of Conduct for the Board, Key Management Personnel and all members of the Company
• Reviewed the compensation and talent management principles of the Company
• Reviewed and confirmed the appointment of the Director
• Review and recommend to the Board for approval revisions to the Charter of the Committee
• Review and approved the calendar of business of the Committee
• Reviewed and recommended to the Board for approval the Policy on Board Diversity

The minutes of the Committee meetings were placed subsequently before the Committee for its approval, on a regular basis, which contained all issues along with discussions and recommendations to the Management and the Board.

With thanks and best regards

(Abu Mohammed Abid Chowdhury)

Chairman, NR Committee