The Code is a guide to professional conduct for Independent Directors. Adherence to these standards by Independent Directors and fulfillment of their responsibilities in a professional and faithful manner will promote confidence of the investment community, particularly minority shareholders, regulators and companies in the institution of Independent Directors.
An Independent Director shall:
1. uphold ethical standards of integrity and probity;
2. act objectively and constructively while exercising his
duties;
3. exercise his responsibilities in a bona fide manner in the
interest of the Company;
4. devote sufficient time and attention to his professional
obligations for informed and balanced decision making;
5. not allow any extraneous considerations that will vitiate his
exercise of objective Independent judgment in the paramount interest
of the Company as a whole, while concurring in or dissenting from
the collective judgment of the Board in its decision making;
6. not abuse his 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;
7. refrain from any action that would lead to loss of his
independence;
8. where circumstances arise which make an Independent Director lose
his independence, the Independent Director must immediately inform
the Board accordingly;
9. assist the Company in implementing the best corporate governance
practices.
The Independent Directors shall:
1. 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;
2. bring an objective view in the evaluation of the performance of
board and management;
3. scrutinize the performance of management in meeting agreed goals
and objectives and monitor the reporting of performance;
4. satisfy themselves on the integrity of financial information and
that financial controls and the systems of risk management are
robust and defensible;
5. safeguard the interests of all stakeholders, particularly the
minority shareholders;
6. balance the conflicting interest of the stakeholders;
7. 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;
8. moderate and arbitrate in the interest of the Company as a whole,
in situations of conflict between management and shareholder’s
interest.
The Independent Directors shall:
1. undertake appropriate induction and regularly update and refresh
their skills, knowledge and familiarity with the Company;
2. seek appropriate clarification or amplification of information
and, where necessary, take and follow appropriate professional
advice and opinion of outside experts at the expense of the
Company;
3. strive to attend all meetings of the Board of Directors and of
the Board committees of which he isa member;
4. participate constructively and actively in the committees of the
Board in which they are chairpersons or members;
5. strive to attend the general meetings of the Company;
6. where they have concerns about the running of the Company or a
proposed action, ensure that these are addressed by the Board and,
to the extent that they are not resolved, insist that their concerns
are recorded in the minutes of the Board meeting;
7. keep themselves well informed about the Company and the external
environment in which it operates;
8. not to unfairly obstruct the functioning of an otherwise proper
Board or committee of the Board;
9. pay sufficient attention and ensure that adequate deliberations
are held before approving related party transactions and assure
themselves that the same are in the interest of the Company;
10. ascertain and ensure that the Company has an adequate and
functional vigil mechanism and to ensure that the interests of a
person who uses such mechanism are not prejudicially affected on
account of such use;
11. report concerns about unethical behavior, actual or suspected
fraud or violation of the Company’s code of conduct or ethics
policy;
12. act within their authority, assist in protecting the legitimate
interests of the Company, shareholders and its employees;
13. not disclose confidential information, including commercial
secrets, technologies, advertising and sales promotion plans,
unpublished price sensitive information, unless such disclosure is
expressly approved by the Board or required by law.
1. Appointment process of independent directors shall be independent
of the company management; while selecting independent directors the
Board shall ensure that there is appropriate balance of skills,
experience and knowledge in the Board so as to enable the Board to
discharge its functions and duties effectively.
2. The appointment of independent director(s) of the company shall
be approved at the meeting of the shareholders.
3. The explanatory statement attached to the notice of the meeting
for approving the appointment of independent director shall include
a statement that in the opinion of the Board, the independent
director proposed to be appointed fulfils the conditions specified
in the Act and the rules made thereunder and that the proposed
director is independent of the management.
4. The appointment of independent directors shall be formalized
through a letter of appointment, which shall set out:
a. the term of appointment;
b. the expectation of the Board from the appointed director; the
Board-level committee(s) in which the director is expected to serve
and its tasks;
c. the fiduciary duties that come with such an appointment along
with accompanying liabilities;
d. provision for Directors and Officers (D and O) insurance, if
any;
e. the Code of Business Ethics that the company expects its
directors and employees to follow;
f. the list of actions that a director should not do while
functioning as such in the company; and
g. the remuneration, mentioning periodic fees, reimbursement of
expenses for participation in the Boards and other meetings and
profit related commission, if any.
5. The terms and conditions of appointment of independent directors
shall be open for inspection at the registered office of the company
by any member during normal business hours.
6. The terms and conditions of appointment of independent directors
shall also be posted on the Company’s website.
The re-appointment of Independent Director shall be on the basis of report of performance evaluation.
1. The resignation or removal of an Independent Director shall be in
the same manner as is provided in sections 168 and 169 of the Act.
2. An independent director who resigns or is removed from the Board
of the company shall be replaced by a new independent director
within three months from the date of such resignation or removal, as
the case may be.
3. Where the company fulfils the requirement of independent
directors in its Board even without filling the vacancy created by
such resignation or removal, as the case may be, the requirement of
replacement by a new independent director shall not apply.
1. The Independent Directors of the Company shall hold at least one
meeting in a financial year, without the attendance of
Non-Independent Directors and members of management;
2. All the Independent Directors of the Company shall strive to be
present at such meeting;
3. The meeting shall:
a. review the performance of non-Independent Directors and the Board
as a whole;
b. review the performance of the Chairperson of the Company, taking
into account the views of executive Directors and non-executive
Directors;
c. assess the quality, quantity and timeliness of flow of
information between the Company management and the Board that is
necessary for the Board to effectively and reasonably perform their
duties.
1. The performance evaluation of Independent Director shall be done
by the entire Board of Directors, excluding the Director being
evaluated.
2. On the basis of the report of performance evaluation, it shall be
determined whether to extend or continue the term of appointment of
the Independent Director.
The provisions of sub-paragraph (2) and (7) of paragraph II, paragraph IV, paragraph V, clauses (a) and (b) of sub-paragraph (3) of paragraph VII and paragraph VIII shall not apply in the case of a Government company as defined under clause (45) of section 2 of the Companies Act, 2013 (18 of 2013), if the requirements in respect of matters specified in these paragraphs are specified by the concerned Ministries or Departments of the Central Government or as the case may be, the State Governments and such requirements are complied with by the Government companies."
This code is adopted in meeting of Board of Directors June 17, 2024.