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Criteria of making payments to Non-Executive Directors

Extract from Nomination & Remuneration Policy of Parag Milk Foods Ltd.

Overall remuneration should be reflective of the size of the Company, complexity of the sector/industry/company’s operations, company’s capacity to pay the remuneration and in compliance with the applicable provisions, rules under Companies Act 2013.

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. As of now there is no provision for payment of commission. In future if any will be within regulatory limits and shall be based on Company’s performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided and approved by the Board. Quantum of sitting fees may be subject to review on a periodic basis, as required, within the parameters prescribed by law. The payment of sitting fees and commission will be recommended by the Nomination and Remuneration Committee and approved by the Board.

Overall remuneration (sitting fees and commission- if any) 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).

Overall remuneration practices should be consistent with recognized best practices.

In addition to the sitting fees, 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 and induction and training organised by the Company for Directors.