Schedule IV of the Companies Act, 2013.

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CODE FOR INDEPENDENT DIRECTORS

The Code is a guide to professional conduct for independent directors. Adherence to these standards by independent directors and fulfilment 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.

I. Guidelines of professional conduct:

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.

II. Role and functions:

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) scrutinise 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.

III. Duties :

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 is a 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 behaviour, actual or suspected fraud or violation

of the company’s code of conduct or ethics policy;

(12) acting within his 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.

IV. Manner of appointment:

(1) Appointment process of independent dir ectors 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 formalised 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.

V. Re-appointment:

The re-appointment of independent director shall be on the basis of report of

performance evaluation.

VI. Resignation or removal:

(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 a period of not

more than one hundred and eighty days 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.

VII. Separate meetings:

(1) The independent directors of the company shall hold at least one meeting in a

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.

VIII. Evaluation mechanism:

(1) The performance evaluation of independent directors 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.

Note: This page is as mentioned in the website of the Ministry of Corporate Affairs, which can be found in the link as mentioned below:-

http://www.mca.gov.in/SearchableActs/Schedule4.htm