1. Appointment
In accordance with the provisions of the Companies Act, 2013
(“Act”) and other applicable laws,
you will serve as an Independent Director on the Board of
the Company from _____ (“date of
appointment”) through _____ (“First Term”). As an
Independent Director you will not be liable to
retire by rotation and your appointment is subject to the
approval of shareholders at the ensuing
Annual General Meeting of the Company.
In terms of the Act, you may be eligible to serve as an
Independent Director for another term of up
to 5 years, subject to the recommendation of the Nomination
and Remuneration Committee and by
the shareholders of the Company by passing of special
resolution.
The terms of your appointment, as set out in this letter,
are subject to the extant provisions of the
(i) applicable laws, including the Act and the Listing
Regulations (as amended from time to time)
and (ii) Articles of Association of the Company (“AOA”).
2. Role, duties and responsibilities
A. As a member of the Board you along with the other
Directors will be collectively responsible
for meeting the objectives of the Board which include:
·
Requirements under the Companies Act, 2013,
·
Responsibilities of the Board as outlined in the
Listing Regulations,
·
Accountability under the Directors’
Responsibility Statement.
B. You shall abide by the ‘Code For Independent Directors’
as outlined in Schedule IV to Section
149(8) of the Act, and the duties of directors as provided
in the Act (including Section 166) and
in Regulation 4(2)(f) of the Listing Regulations.
C. You will provide guidance in your area of expertise.
3. Professional Conduct for Independent Directors
As an Independent Director, you shall:
i. uphold ethical standards of integrity and probity;
ii. act objectively and constructively while exercising your
duties;
iii. exercise your responsibilities in a bona fide manner in
the interest of the Company;
iv. devote sufficient time and attention to your
professional obligations for informed and balanced
decision-making;
v. not allow any extraneous considerations that may vitiate
your exercise of objective independent
judgement in the paramount interest of the Company as a
whole, while concurring in or
dissenting from the collective judgement of the Board in its
decision-making;
vi. not abuse your position to the detriment of the Company
or its shareholders or for the purpose
of gaining direct or indirect personal advantage or
advantage for any associated person;
vii. refrain from any action that could lead to a loss of
your independence;
viii. ensure that if circumstances arise under which you may
lose your independence, you will
immediately inform the Board accordingly;
ix. assist the Company in implementing the best corporate
governance practices.
4. Roles & Function of Independent Directors
As an Independent Director you shall:
i. help in bringing an independent judgment to bear on the
Board’s deliberations especially on
issues of strategy, performance, risk management, resources,
key appointments and standards
of conduct;
ii. bring an objective view in the evaluation of the
performance of the Board and the Management;
iii. scrutinize the performance of Management in meeting
agreed goals and objectives and monitor
the reporting of performance;
iv. satisfy yourself on the integrity of financial
information and that financial controls and the
systems of risk management are robust and defensible;
v. safeguard the interests of all stakeholders, particularly
the minority shareholders;
vi. balance the conflicting interest of the stakeholders;
vii. determine appropriate levels of remuneration of
executive directors, key managerial personnel
and senior management and have a prime role in appointing
and where necessary recommend
removal of executive directors, key managerial personnel and
senior management;
viii. moderate and arbitrate in the interest of the Company
as a whole, in situations of conflict
between Management and shareholder’s interest.
5. Duties
As an Independent Director, you shall:
i. undertake the appropriate induction into the Board and
regularly update and refresh your skills,
knowledge and familiarity with the Company;
ii. seek appropriate clarifications and, where necessary,
seek and follow appropriate professional
advice from external experts at the expense of the Company;
iii. strive to attend every meeting of the Board and of the
Board committees of which you are a
member;
iv. actively and constructively participate in the Board and
Committees of the Board in which you
may be a member or the Chairperson;
v. strive to attend the general meetings of the Company;
vi. ensure that any concerns that you may have about the
running of the Company are addressed by
the Board and seek inclusion of these concerns in the Board
minutes to the extent these
concerns are not resolved;
vii. keep yourself well informed about the Company and the
external environment in which it
operates;
viii. not unfairly obstruct the functioning of an otherwise
proper Board or committee;
ix. ensure that related party transactions are considered
carefully before they are approved and are
in the interest of the Company;
x. ensure that the whistleblower function of the Company is
functioning adequately;
xi. report concerns about unethical behaviour, actual or
suspected fraud or violation of the
Company’s Code of Conduct and Ethics;
xii. within your authority, assist in protecting the
legitimate interests of the Company, shareholders
and its employees;
xiii. not disclose any confidential information unless such
disclosure is expressly approved by the
Board or required by law.
6. Functions of the Board of Directors
Key functions of the Board of Directors-
·
Reviewing and guiding corporate strategy, major
plans of action, risk policy, annual budgets
and business plans, setting performance
objectives, monitoring implementation and corporate performance, and overseeing
major capital expenditures, acquisitions and divestments.
·
Monitoring the effectiveness of the listed
entity‘s governance practices and making changes as needed.
·
Selecting, compensating, monitoring and, when
necessary, replacing key managerial personnel and overseeing succession
planning.
·
Aligning key managerial personnel and
remuneration of board of directors with the longer term interests of the listed
entity and its shareholders
·
Ensuring a transparent nomination process to the
board of directors with the diversity of
thought, experience, knowledge, perspective
and gender in the board of directors.
·
Monitoring and managing potential conflicts of
interest of management, members of the board of directors and shareholders,
including misuse of corporate assets and abuse in related party transactions.
·
Ensuring the integrity of the listed entity‘s
accounting and financial reporting systems, including the independent audit,
and that appropriate systems of control are in place, in
particular, systems for risk management,
financial and operational control and compliance with the law and relevant
standards.
·
Overseeing the process of disclosure and
communications.
·
Monitoring and reviewing board of director‘s
evaluation framework.
Other Responsibilities:
·
The board of directors shall provide strategic
guidance to the listed entity, ensure effective
monitoring of the management and shall be
accountable to the listed entity and the
shareholders.
·
The board of directors shall set a corporate
culture and the values by which executives
throughout a group shall behave.
·
Members of the board of directors shall act on a
fully informed basis, in good faith, with due
diligence and care, and in the best
interest of the listed entity and the shareholders.
·
The board of directors shall encourage
continuing directors’ training to ensure that the members of board of directors
are kept up to date.
·
Where decisions of the board of directors may
affect different shareholder groups differently,
the board of directors shall treat all
shareholders fairly.
·
The board of directors shall maintain high
ethical standards and shall take into account the
interests of stakeholders.
·
The board of directors shall exercise objective
independent judgement on corporate affairs.
·
The board of directors shall consider assigning
a sufficient number of non-executive members of the board of directors capable
of exercising independent judgement to tasks where there is a potential for
conflict of interest.
·
The board of directors shall ensure that, while
rightly encouraging positive thinking, these do
not result in over-optimism that either
leads to significant risks not being recognised or exposes the listed entity to
excessive risk.
·
The board of directors shall have ability to
‘step back’ to assist executive management by
challenging the assumptions underlying:
strategy, strategic initiatives (such as acquisitions),
risk appetite, exposures and the key areas
of the listed entity‘s focus.
·
When committees of the board of directors are
established, their mandate, composition and
working procedures shall be well defined
and disclosed by the board of directors.
·
Members of the board of directors shall be able
to commit themselves effectively to their
responsibilities.
·
In order to fulfil their responsibilities,
members of the board of directors shall have access to
accurate, relevant and timely information.
7. Board Committee
As advised by the Board, during the tenure of office, you
may be required to serve on one or more
of the Committees of the Board. Upon your appointment to any
one or more Committees, you will
be provided with the appropriate Committee charter which
sets out the functions of that Committee.
Currently, the Board has three committees: Audit Committee,
Nomination and Remuneration
Committee and Stakeholders’ Relationship Committee.
8. Time Commitment
Considering the nature of the role of a director, it is
difficult for the Company to lay down specific
parameters on time commitment. You agree to devote such time
as is prudent and necessary for the
proper performance of your role, duties and responsibilities
as an Independent Director.
9. Remuneration
As an Independent Director you will be paid sitting fees for
attending the meetings of the Board
and the Committees of which you are a member. The sitting
fees for attending each meeting of the
Board and its Committees would be as determined by the Board
from time to time. Currently, we
pay a sitting fee of Rs. 1000 per meeting of the Board and
Rs. 500 per meeting of the Committee.
Further, the Company may pay or reimburse to you such
expenditure that may be incurred by you
while performing your role as an Independent Director of the
Company. This could include
reimbursement of expenditure incurred by you for
accommodation, travel and any out of pocket
expenses for attending Board/ Committee meetings, General
Meetings, court convened meetings,
meetings with shareholders/ creditors/ management, site
visits, participating in induction and
training programmes (organized by the Company for Directors)
and/or obtaining professional
advice (subject to the expense being reasonable) from
independent advisors in the furtherance of
your duties as an Independent Director.
10. Induction and Development
The Company will from time to time, brief the Independent
Directors on all business related
matters, risk assessment & minimization procedures and
proposed new initiatives. They will also
be updated on changes / developments in the domestic /
global corporate and industry scenario
including those pertaining to statutes / legislation and
economic environment.
11. Performance Evaluation Process
Performance of the Independent Directors as well as the
performance of the entire Board and the
Board Committees will be evaluated annually as required
under the provisions of law, against the
parameters for evaluation laid down by the Nomination &
Remuneration Committee.
12. Disclosures, other directorship and business
interests
It is accepted and acknowledged that you have business
interests other than those of the Company
and have declared conflicts, if any that are apparent at
present. In the event that you become aware
of any potential conflict of interest with your position as
Director of the Company, you shall
promptly disclose the same to the Chairman and the Company
Secretary and provide such other
disclosures and information as may be required under the
applicable laws. By signing this letter,
you hereby confirm that as on date of this letter, you have
no such conflict of interests with your
existing directorships.
Upon any change in circumstances which may affect your
status as an Independent Director, you
agree to promptly provide a declaration under Section 149(7)
of the Act.
13. Memberships of other boards
It is expected that you will not serve on the boards of
competing companies. Apart from the
applicable law and good corporate governance practices,
there are no other additional limitations.
14. Information on meeting
Dates for Board meetings in the ensuing year are decided in
advance. Most Board meetings are
held at the Registered Office of the Company at Nicco House,
2, Hare Street, Kolkata-700001. The
agenda and explanatory notes are sent to the Board in
advance. The Board meets at least once a
quarter to review the quarterly results and other items on
the agenda and also on the occasion of
the Annual General Meeting of the shareholders. Additional
meetings are held, when necessary.
Committees of the Board usually meet the day before the
formal Board meeting, or whenever the
need arises for transacting business. The recommendations of
the Committees are placed before
the Board for necessary approval.
The Board has full and unfettered access to any information
of the Company, and to any employee
of the Company. At Board meetings, the Board invites
managers of the Company when additional
details into the items being discussed are required.
15. Conflict of Interest
a) It is accepted and acknowledged that the Independent
Directors may have business interests
other than those of the Company. They are required to
declare any such directorships,
appointments and interests to the Board.
b) During their term, the Independent Directors agree to
promptly provide a declaration under
Section 149(7) of the Act and Regulation 25(8) of the
Listing Regulations, upon any change in
circumstances which may affect their status, individuality
as an Independent Director. Further,
they also agree to confirm, individually, compliance with
the said criteria of independence
every financial year, along with a confirmation that they
are not aware of any circumstance or
situation, which exist or may be reasonably anticipated,
that could impair their ability to
discharge duties with an objective independent judgement and
without any external influence.
c) During their term, the Independent Directors agree to
keep their names included in the databank
of Independent Directors and comply with the other
conditions prescribed under the Companies
(Appointment and Qualification of Directors) Rules, 2014.
16. General
Actions, in particular that should not be taken by the
Independent Directors while in office, include
the following:
a) Action that involves any violation of applicable law;
b) Action that involves any breach of the Company Code of
Conduct;
c) Action that either involves their personal interest,
except as disclosed in terms of the applicable
laws or compromises or conflicts with the interest of the
Company.
17. Changes in personal details
During your Term, you shall promptly intimate the Company
Secretary and the Registrar of
Companies in the prescribed manner, of any change in address
or other contact and personal
details provided to the Company.
18. Disengagement
You may resign as Director of the Company by giving notice
in writing to the Company stating the
reasons for resignation. The resignation shall take effect
from the date on which the notice is
received by the Company or the date, if any, specified by
you in the notice, whichever is later.
19. Extension of Terms
Upon the expiry of your First Term and subject to your
eligibility under the relevant provisions of
the Act, Rules, Listing Regulations and other applicable
laws, as prevailing from time to time and
subject to annual performance evaluation and recommendations
of the Nomination and
Remuneration Committee, the Board may, at its discretion,
recommend to the shareholders
renewal of your term.