VARIABLE POLICY - GSP AND PRODUCT TEAMS – 18-19 22nd March 2018

OBJECTIVE To create an environment where employees feel a sense of ownership and take responsibility for their contribution to the performance of the company

ANALYSIS CURRENT AND PROPOSED All GSP and Product Team employees at E and S Bands are on Biannual KRA based Bonus Sales is part of KRAs of Product teams Very few role holders in GSP staff at E and S band have sales parameter in their KRAs Variable is payable once in 6 months No direct focus on monthly performance PROPOSED Sales should be a key deliverable for all employees Instant reward for performance at company / region / category level

PROPOSED For all E and S bands across GSP and Product Groups following will be applicable 50% of Band based variable component to be linked to category / region / company monthly performance as applicable. – CALCULATED MONTHLY, PAYABLE QUARTERLY 50% of Band based variable component to be linked to individual performance – PAYABLE BIANNUALLY BASED ON KRA SCORES (All M Bands and above shall continue to be assessed annually basis their KRAs for the payment of Variable component)

PROPOSED S No Department Applicable Scoring Criteria 1 IT Yes HO Team – Basis company sales achievement Regional Team – Basis region sales achievement 2 Finance PH Team – Basis company sales achievement 3 Legal Basis company sales achievement   4 HRT 5 Planning and Monitoring 6 SCM and QC Basis sales achievement of – Hardgoods - NWH Total Home Achievement – Delhi B Apparels – Rest of the PH MRW – Basis Region Sales 7 Apparels Basis Category sales achievement Design Team – 2 groups - Women / Menswear and Kidswear

PROPOSED S No Department Applicable Scoring Criteria 8 Home and Lifestyle Yes Basis Category sales achievement 9 CDLI Basis company sales achievement   10 Brand and Marketing – HO Team HO Team – Basis company sales achievement Regional VM Team – Basis region sales achievement 11 Markets – Retail Concepts 12 Markets – E Comm No Separate Policy - TAB 13 Personal Care 14 Forensic and Internal Audit 15 Markets GSP (MRO Staff) Basis region sales achievement 16 Markets Stores Separate Policy 17 IDS Designers 18 OF

PAYMENT SLABS – BASED ON MONTHLY SALES SALES ACHIEVEMENT PM % VARIABLE PAYABLE (50% OF BAND BASED BONUS) Below 91% 91% - 95% 50% 96 – 99% 75% 100% 101 - 110% 2% extra for every 1 % 111 - 120% 4% extra for every 1 % Above 120% 6% extra for every 1% upto a maximum of 202% of TAB entitlement *202% of TAB is payable at 127% and above quarterly achievement.

SUMMARY – EXPECTED PAYOUTS SUMMARY ON SCENARIO   TOTAL STAFF ON BIANNUAL VARIABLE S AND E BANDS 660 HALF OF BAND BASED VALUE 91 - 95% achievement 96 - 99% achievement 100% Achievement 110% achievement 120% Achievement 127% achievement PAYOUT PM 592750 889125 1185500 1422600 1896800 2394710 PAYOUT PA 7113000 10669500 14226000 17071200 22761600 28736520 Calculation on monthly sales achievement Payment shall be made Quarterly No payment below 91% achievement

PAYMENT SLABS FOR KRA BASED VARIABLE PROPOSED CURRENT KRA Achieved %age of Variable Entitlement 99% 98.50% ≥ 120% 200% 98% 97% 119% 195% 95.50% 118% 190% 96% 94% 117% 185% 95% 92.50% 116% 180% 90% 115% 175% 93% 87.50% 114% 170% 92% 85% 113% 165% 91% 82.50% 112% 160% 80% 111% 155% 89% 77.50% 110% 140% 88% 75% 109% 136% 87% 72.50% 108% 132% 86% 70% 107% 128% 67.50% 106% 124% 84% 64% 105% 83% 60.50% 104% 82% 57% 103% 81% 53.50% 102% 50% 101% ≤ 79% 0% 100% BIANNUAL KRA SCORE % VARIABLE PAYABLE (50% OF BAND BASED BONUS) Below 80% 80% - 85% 50% 86 – 90% 75% 91% - 94% 85% 95% and above 100%

INCREMENT SLABS FOR APRIL 2019 PROPOSED APRIL 19 CURRENT APRIL 18 AVERAGE KRA SCORE INCREMENT SLAB Below 80% 80% - 85% 1 Increment 86 – 90% 2 Increment 91% and above 3 Increment AVERAGE KRA SCORE INCREMENT SLAB Below 80% 80% - 85% 1 Increment 86 – 94% 2 Increment 95% and above 3 Increment

KRA SHEET TEMPLATE EBITDA Responsibility – M Band and above M Bands at Markets – EBITDA responsibility towards Region / Store and Company (80:20) E3 Zonal Managers at Markets – EBITDA responsibility towards assigned stores and Market Region (80:20) M Bands at Product - EBITDA responsibility towards Category and Company (80:20) M Bands rest – Company EBITDA HODs – Company EBITDA

KRA SHEET TEMPLATE ODG to be applicable for all employees at E3 and above and shall comprise of – 360 Degree Survey feedback CSP Score Social Mission – Enhance Craft Quotient of the employees / Periodic quizzes to be conducted Leadership Capability Building – Identifying Successor – Applicable to HOD and 1 level below HOD (Signed off by HR Head and CEO)

INCREMENT VALUE APRIL 18 BAND CURRENT INCREMENT VALUE 10% INCREASE 15% INCREASE S1 500 550 580 S2 650 720 750 S3 800 900 950 E1 1300 1450 1500 E2 1600 1750 1800 E3 2400 2600 2700 M1 3500 3800 4000 M2 4500 5000 5200 M3 6500 7200 7400 M4 9000 10000 10500 CHIEF 16000 18000 18400 GH 20000 22000 23000   CURRENT INCR VALUE CURRENT FIXED 2.5 INCREMENT 3 INCREMENT 88465022 96124102.94 97647527.94 8.7% 10% 10% INCR ON VALUE 96936802.94 98622767.94 9.6% 11.5%  RECOMMENDED 15% INCR ON VALUE 97282452.94 99037547.94 10.0% 12.0%

CURRENT MEDIAN – FIXED SALARY Band Actual Minimum Actual Maximum Median S1 10000 21189 13300 S2 24750 16500 S3 15000 45000 21447 E1 20000 46500 30850 E2 30393 67275 45992 E3 47600 122200 66328 M1 65000 170000 92300 M2 113700 200000 150000 M3 165913 420000 246125 M4 2,58,800 5,75,000 345700 Chief 5,60,000 7,10,000 635000 Group Head 625500 7,88,200 736200

BASELINE RANGE CURRENT APRIL 18 PROPOSED APRIL 19 Band Min Max S1 7700 21000 S2 8800 24000 S3 11200 31000 E1 16500 54000 E2 80000 E3 40000 144000 M1 60000 198000 M2 88000 240000 M3 132000 360000 M4 540000 Chief 330000 900000 Group Head 500000 1100000 Band Proposed Min Proposed Max S1 10000 24000 S2 11000 28000 S3 13500 35000 E1 16500 60000 E2 85000 E3 40000 150000 M1 220000 M2 88000 300000 M3 132000 450000 M4 198000 600000 Chief 330000 1000000 Group Head 500000 1200000