Terms and conditions of appointment of the Independent Directors

The terms and conditions of appointment of the Independent Directors of the Company in accordance with the requirements of Schedule IV to the Companies Act, 2013 (the “Act”) and Regulation 46 (2) (b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015: Dr. Girish Kumar Ahuja, Ms. Sudha Pillai and Mr. Satwinder Singh have been appointed as Independent Directors of the Company by the members at the Extra-ordinary General Meeting held on 20th September, 2017.

A. Appointment

  1. The Appointment of Independent Director shall be for an initial term of 2 years commencing on 20th September, 2017 unless terminated earlier by either party giving to the other one month’s prior written notice.
  2. Appointment is subject to the Company’s articles of association, as amended from time to time (“Articles”). Nothing in the Appointment letter shall be taken to exclude or vary the terms of the Articles as they apply to Independent Director of the Company. Appointment of Independent Director is subject to confirmation.
  3. Continuation of appointment of Independent Director is contingent on continued satisfactory performance and getting re-elected by the shareholders in accordance with the provision of Companies Act, 2013 and the Articles of Association of the Company, from time to time in force and any other relevant statutory provisions relating to removal of a Director. If the shareholders do not re-elect Independent Director as a Director of the Company, his/her appointment shall terminate automatically, with immediate effect. Independent Director may be required to serve on one or more committees of the Board. Independent Director will be provided with the relevant terms of reference on their appointment to such a committee. Independent Director also may be asked to serve as an Independent Director on the Board of any of the Company’s subsidiaries or joint ventures. Any such appointment will be covered in a separate communication.
  4. Notwithstanding anything contained in above paragraphs, the Company may terminate appointment of Independent Director with immediate effect if they have:
    1. committed a material breach of his/her obligations under the Appointment letter;
    2. committed any serious or repeated breach or non-observance of his/her obligations to the Company (which include an obligation not to breach his/her statutory, fiduciary or common-law duties);
    3. been guilty of any fraud or dishonesty or acted in any manner which, in the Company’s opinion, brings or is likely to bring him/her or the Company into disrepute or is materially adverse to the Company’s interests;
    4. been convicted of a criminal offence;
    5. been declared bankrupt or have made an arrangement with or for the benefit of his/her creditors, or if he/she has an administration order made against him/her;
    6. been disqualified from acting as a Director;
    7. failed to comply with any regulatory requirements imposed by the Reserve Bank of India or any other regulatory authority;
    8. breached any applicable law that in the opinion of the Company adversely impacts the Company;
    9. on failure to meet the parameters of independence as defined in section 149(6) or on the occurrence of any event as defined in section 167 of the Companies Act, 2013.
  5. On termination of appointment, Independent Director shall, at the Company’s
    request, resign from his/her office as Independent Director of the Company.
  6. If matters arise which cause him/her concern about his/her role, he/she should discuss these matters with the Chairman or Senior Independent Director of the Company. If he/she has any concerns which cannot be resolved, and he/she choose to resign for that, or any other, reason, he/she should provide an appropriate written statement to the Chairman of the Company.
  7. In compliance with provisions of section 149(13) of the Companies Act, 2013, his/her Directorship is not subject to retirement by rotation.

B. Time commitment

  1. Independent Directors will be expected to bring objectivity and independence of view to the Board’s discussions and to help provide the Board with effective leadership in relation to the Company’s strategy, performance, and risk management as well as ensuring high standards of financial probity and corporate governance.
  2. Independent Directors will be expected to devote such time as is necessary for the proper performance of their duties. This will include attendance at Board Meetings, the AGM, such other committees of the Board of the Company to which Independent Directors may be appointed, Board functions and strategy, Meetings with Directors, Meetings with shareholders, Meetings forming part of the Board evaluation process and updating and training Members. In addition, Independent Directors will be required to consider all relevant papers before each Meeting. Unless urgent and unavoidable circumstances prevent Independent Directors from doing so, it is expected that Independent Directors will attend the Meetings outlined in this paragraph. The Board generally meets four times in a year. The Audit Committee generally meets atleast two times in a year. Besides, there are other Committee Meetings like Nomination and Remuneration Committee. Meetings of which are ordinarily convened as per requirements. Independent Directors will be expected to attend Board and Board Committees to which Independent Directors may be appointed and Shareholders Meetings and to devote such time to their duties, as appropriate for Independent Directors to discharge their duties effectively. The nature of the role makes it impossible to be specific about the maximum time commitment. Independent Directors may be required to devote additional time to the Company in respect of planning and ad hoc matters which may arise and particularly when the Company is undergoing a period of increased activity. At certain times it may be necessary to convene additional Board, Committee or Shareholder Meetings.
  3. The overall time commitment will increase if Independent Directors become a committee member or chair, or if Independent Directors are given additional responsibilities, such as being appointed the Senior Independent Director of the Company, or other Director on the Boards of any of the Company’s subsidiaries. Details of the expected increase in time commitment will be covered in any relevant communication confirming the additional responsibility.
  4. By accepting this appointment, Independent Directors confirm that, taking into account all of their other commitments, Independent Directors are able to allocate sufficient time to the Company to discharge their responsibilities effectively. Independent Directors should obtain the agreement of the chairman of the Company before accepting additional commitments that might affect the time Independent Directors are able to devote to their role as an Independent Director of the Company.
  5. By accepting this appointment, Independent Directors confirm that Independent Directors are able to allocate sufficient time to meet the expectations from their role to the satisfaction of the Board.

C. Roles and duties

  1. The Board as a whole is collectively responsible for the success of the Company. The Board’s role is to:
    1. provide entrepreneurial leadership of the Company within a framework of prudent and effective controls which enable risk to be assessed and managed;
    2. set the Company’s strategic aims, ensure that the necessary financial and human resources are in place for the Company to meet its objectives, and review management performance; and
    3. set the Company’s values and standards and ensure that its obligations to its shareholders and others are understood and met.
  2. Independent Directors are expected to perform their duties (whether statutory, fiduciary or common law) faithfully, diligently and to a standard commensurate with the functions of their role and their knowledge, skills and experience.
    3. Independent Directors shall exercise their powers in their role as an Independent Director of the Company, having regard to relevant obligations under prevailing law and regulation, including any Company law legislation, corporate codes and associated guidance as well as other regulatory requirements governing the Company.
  3. Independent Directors shall have particular regard to the general duties of Directors in Section 166 of the of the Companies Act 2013 (the “Companies Act”) and specifically in relation to the Independent Directors as set out in Section 149 read with Schedule IV of the Companies Act, 2013 (detailed in Annexure A) or any other applicable laws, including the duty to promote the success of the Company under which all Directors must act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so, as a Director of the Company, Independent Directors must have regard (among other matters) to:
    1. the likely consequences of any decision in the long term;
    2. the interests of the Company’s employees;
    3. the need to foster the Company’s business relationships with suppliers, customers and others;
    4. the impact of the Company’s operations on the community and the environment;
    5. the desirability of the Company maintaining a reputation for high standards of business conduct; and
    6. the need to act fairly as between the members of the Company.
  4. In their role as an Independent Director of the Company, Independent Directors shall also be required to:
    1. constructively contribute to the development of strategy;
    2. scrutinise the performance of management in Meeting agreed goals and objectives and monitor the reporting of performance;
    3. satisfy theirself on the integrity of financial information and that financial controls and systems of risk management are robust and defensible;
    4. be responsible for determining appropriate levels of remuneration of executive Directors, key managerial personnel and senior management and have a prime role in appointing and, where necessary recommend removing of executive Directors, key managerial personnel and senior management and in succession planning;
    5. 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;
    6. bring an objective view in the evaluation of the performance of board and management;
    7. balance the conflicting interest of the stakeholders;
    8. moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between management and shareholder’s interest;
    9. devote time to developing and refreshing their knowledge and skills;
    10. uphold high standards of integrity and probity and support the chairman and executive Directors in instilling the appropriate culture, values and behaviours in the boardroom and beyond;
    11. insist on receiving high-quality information sufficiently in advance of Board Meetings;
    12. take into account the views of shareholders and other stakeholders where appropriate and safeguard the interests of all stakeholders, particularly the minority shareholders;
    13. make sufficient time available to discharge their responsibilities effectively;
    14. exercise relevant powers under, and abide by, the Articles;
    15. disclose the nature and extent of any direct or indirect interest Independent Directors may have in any matter being considered at a Board or committee Meeting and, except as permitted under the Articles Independent Directors will not vote on any resolution of the Board, or of one of its committees, on any matter where Independent Directors have any direct or indirect interest;
    16. immediately report their own wrongdoing or the wrongdoing or proposed wrongdoing of any employee or other Director of the Company of which Independent Directors become aware;
    17. exercise their powers as a Director in accordance with the Company’s policies and procedures and internal control framework;
    18. not do anything that would cause Independent Directors to be disqualified from acting as a Director.
  5. Unless the Board specifically authorises Independent Directors to do so, Independent Directors shall not enter into any legal or other commitment or contract on behalf of the Company.
  6. Independent Directors shall be entitled to request all relevant information about the Company’s affairs as is reasonably necessary to enable Independent Directors to discharge their responsibilities as an Independent Director of the Company.

In addition to the above requirements the Board of Directors also expect Independent Directors to perform the following functions:

  1. Independent Directors should constructively challenge and help develop proposals on strategy for growth of the Company.
  2. Independent Directors should evaluate the performance of management in Meeting agreed goals and objectives.
  3. Independent Directors should satisfy their self on the integrity of financial information and that financial controls and systems of risk management are effective and defensible.
  4. Independent Directors are responsible for determining appropriate levels of remuneration of Executive Directors and have a prime role in appointing, and where necessary, removing Executive Directors and in succession planning.
  5. Independent Directors will take responsibility for the processes for accurately reporting on performance and the financial position of the Company.
  6. Independent Directors should keep governance and compliance with the applicable legislation and regulations under review and the conformity of Company’s practices to accepted norms.

D. Fees and expenses

  1. Independent Directors shall be paid sitting fees of Rs. 75,000/- (Rupees Seventy Five Thousand Only) per meeting of the Board and Rs. 50,000/- (Rupees Fifty Thousand) for per Committee Meetings. This fee covers all duties, save for those relating to service on any Board committee, whether as Chairman or Committee member.
  2. Independent Directors will comply with the Company’s requirements regarding any maximum shareholding level (agreed from time to time by the Board).
  3. The Company shall reimburse Independent Directors for all reasonable and properly documented expenses that Independent Directors incur in performing the duties of their office.
  4. On termination of their appointment, Independent Directors shall only be entitled to such fees as may have accrued to the date of termination, together with reimbursement in the normal way of any expenses properly incurred before that date.

E. Independent professional advice

In some circumstances Independent Directors may consider that Independent Directors need professional advice in the furtherance of their duties as a Director and it may be appropriate for Independent Directors to seek advice from independent advisers at the Company’s expense. The Company shall reimburse the reasonable cost of expenditure incurred by Independent Directors in accordance with its policy.

F. Outside interests

  1. As a condition precedent to commencement of their appointment, Independent Directors are required to declare any such Directorships, appointments and interests to the Board in writing in the prescribed form. In the first board Meeting in which Independent Directors participate as a Director of the Company and thereafter at the first Meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect their status as an independent Director, Independent Directors shall give a declaration that Independent Directors meet criteria for independence as specified in Section 149 of the Companies Act.
  2. Independent Directors must inform the chairman in advance of any changes to these commitments. In certain circumstances, Independent Directors may have to seek the Board’s agreement before accepting further commitments which either might give rise to a conflict of interest or a conflict with any of their duties to the Company, or which might impact on the time that Independent Directors are able to devote to their role at the Company.
  3. It is accepted and acknowledged that Independent Directors may have business interests other than those of the Company and Independent Directors have declared any conflicts that are apparent at present. If Independent Directors become aware of any further potential or actual conflicts of interest, these should be disclosed to the chairman and Board as soon as Independent Directors become aware of them and again Independent Directors may have to seek the agreement of the Board.
  4. Independent Directors must also ensure that Independent Directors make appropriate disclosures as may be required by any law or regulation in order to avoid any conflict or to ensure effective statutory reporting of related or interested party transactions.
  5. The Board has determined that Independent Directors are independent according to the provisions of applicable laws, codes and guidelines.

G. Confidentiality

  1. Independent Directors acknowledge that all information acquired during their appointment is confidential to the Company and should not be released, communicated or disclosed to third parties or used for any reason other than in the interests of the Company, either during their appointment or following termination (by whatever means), without prior approval from the chairman. This restriction shall cease to apply to any confidential information which may (other than by reason of their breach) become available to the public generally.
  2. Independent Directors acknowledge the need to hold and retain Company information (in whatever format Independent Directors may receive it) under appropriately secure conditions.

H. Inside information and dealing in the Company’s shares

During their period of appointment Independent Directors are required to comply with the provisions of regulations, guidelines and codes in relation to dealing in the Company’s publicly traded or quoted securities, and any such other code as the Company may adopt from time to time which sets out the terms for dealings by Directors in the Company’s publicly traded or quoted securities.

I. Evaluation

The Board of Directors will carry out an evaluation of the performance of the Board as a whole, Board Committees and Directors on an annual basis as per Company’s Policy. Their appointment and reappointment on the Board shall be subject to the outcome of the yearly evaluation process.

J. Publication of the Letter of Appointment

In line with provision of Clause IV sub clause 6 of Schedule IV, under Companies Act, 2013, the Company will make public the terms and conditions of their appointment and will also arrange for it to be displayed on the Company’s website.

K. Insurance and indemnity

The Company has Directors’ and officers’ liability insurance and it intends to maintain such cover for the full term of their appointment.

L. Changes to personal details

Independent Directors shall advise the Board of Directors of the Company promptly of any change in their address or other personal contact details.

M. Return of property

On termination of their appointment with the Company however arising, or at any time at the Board’s request, Independent Directors shall immediately return to the Company all documents, records, papers or other property belonging to the Company which may be in their possession or under their control, and which relate in any way to the Company’s or a group Company’s business affairs and Independent Directors shall not retain any copies thereof.

N. Moral rights

Independent Directors hereby irrevocably waive any moral rights in all works prepared by Independent Directors, in the provision of their services to the Company, to which Independent Directors are now or may at any future time be entitled under any law in any jurisdiction, including (but without limitation) the right to be identified, the right of integrity and the right against false attribution, and agree not to institute, support, maintain or permit any action or claim to the effect that any treatment, exploitation or use of such works or other materials, infringes their moral rights.

O. Post-termination restriction

By countersignature of this letter and in consideration for the fees payable to Independent Directors under the terms of this letter, Independent Directors agree that, in order to protect the confidential information, trade secrets and business connections of the Company and each Company in the Company’s group to which Independent Directors have access as a result of their appointment, Independent Directors will not (without the previous consent in writing of the Company), for the period of twenty four months immediately after the termination of their appointment, whether as principal or agent and whether alone or jointly with, or as a Director, manager, partner, shareholder, employee consultant of, any other person, carry on or be engaged, concerned or interested in any business which is similar to or which is (or intends to be) in competition with any business being carried on by the Company or any Company in the Company’s group.

P. Liability

For any breach by Independent Directors of the duties set out under Clause 2 above and their general responsibilities towards the Company, Independent Directors will be subject to the penal consequences as set out under applicable laws. Subject to applicable laws, in relation to the Company, Independent Directors would be liable for such acts of omission or commission by the Company which had occurred with their knowledge, attributable through Board processes, and with their consent or connivance, or where Independent Directors have not acted diligently.

Q. Data protection

  1. By signing this letter Independent Directors consent to the Company holding and processing data about Independent Directors for legal, personnel, administrative and management purposes and in particular to the processing of any personal data (as may be defined in data protection legislation) relating to Independent Directors including, as appropriate:
    1. information about their physical or mental health or condition in order to monitor sick leave and take decisions as to their fitness to perform their duties; or
    2. their racial or ethnic origin or religious or similar beliefs in order to monitor compliance with equal opportunities legislation; or
    3. information relating to any civil or criminal proceedings in which Independent Directors have been involved for insurance purposes and in order to comply with legal requirements and obligations to third parties.

R. Entire agreement

  1. This letter and any document referred to in it constitutes the entire terms and conditions of their appointment and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between Independent Directors and the Company, whether written or oral, relating to its subject matter.
  2. Independent Directors agree that Independent Directors shall have no remedies in respect of any representation, assurance or warranty (whether made innocently or negligently) that is not set out in this letter and Independent Directors shall not have any claim for innocent or negligent misrepresentation/misstatement based on any statement in this letter.

S. Variation

No variation of this letter shall be effective unless it is in writing and signed by Independent Directors and the Company (or respective authorised representatives).

T. Governing law and jurisdiction

Their appointment with the Company and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of India and Independent Directors and the Company irrevocably agree that the courts of New Delhi shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this appointment or its subject matter or formation (including non-contractual disputes or claims).