Term&Condition of Appointment of Independent Directors
SERVOTECH POWER SYSTEMS LIMITED
TERMS & CONDITION OF APPOINTMENT OF INDEPENDENT DIRECTORS
The Code for Independent Directors contained in The Companies Act, 2013 provides thatwe should issue a letter of appointment to the Independent Directors.
I am pleased to inform you that the shareholders at the Extra Ordinary General Meeting held on June 02, 2017 have approved the appointments as an Independent Director for a period of five years till June 01, 2022. This letter of appointment sets out the terms and conditions covering your appointment which are as follows:
- Your appointment as a Non-Executive Independent Director on the Board of Directors of the Company is subject to the provisions of the Companies Act, 2013.
- In compliance with provisions of section 149(13) of the Companies Act, 2013, your directorship is not subject to retirement by rotation.
- Notwithstanding other provisions of this letter, the appointment may be terminatedin accordance with the provisions of the Articles of Association of the Company or onfailure 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.
- Upon termination or upon your resignation for any reason, duly intimated to theCompany, you will not be entitled to any compensation for loss of office.
- As a Non-Executive Independent Director you are expected to bring objectivity and independence of view to the Board’s discussions and to help provide the Board witheffective leadership in relation to the Company’s strategy, performance, and risk management as well as ensuring high standards of financial probity and corporategovernance. The Board generally meets four times in a year. The Audit Committee generally meets at least four times in a year. Besides, there are other Committeemeetings like Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee, meetings of which are ordinarily convened as per requirements. You will be expected to attend Board and Board Committees to which you may be appointed and Shareholders meetings and to devote such time to your duties, as appropriate for youto discharge your duties effectively. Ordinarily, all meetings are held in Delhi or anysuch place as decided by the Board.
- By accepting this appointment, you confirm that you are able to allocate sufficienttime to meet the expectations from your role to the satisfaction of the Board.
ROLE AND DUTIES:
- Your role and duties will be those normally required of a Non-Executive IndependentDirector under the Companies Act, 2013. There are certain duties prescribed for allDirectors, both Executive and Non-Executive, which are fiduciary in nature and are as under:
- You shall act in accordance with the Company’s Articles of Association as may be amended from time to time.
- You shall act in good faith in order to promote the objects of the Company for the benefit of its members as a whole, and in the best interest of the Company.
- You shall discharge your duties with due and reasonable care, skill and diligence.
- You shall not involve yourself in a situation in which you may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the Company.
- You shall not achieve or attempt to achieve any undue gain or advantage either to yourself or to your relatives, partners or associates.
- You shall not assign your office as Director and any assignments so made shall be void.
In addition to the above requirements the Board of Directors also expect you toperform the following functions:
- You should constructively challenge and help develop proposals on strategy for growth of the Company.
- You should evaluate the performance of management in meeting agreed goals and objectives.
- You should satisfy yourself on the integrity of financial information and thatfinancial controls and systems of risk management are effective and defensible.
- You are responsible for determining appropriate levels of remuneration ofExecutive Directors and have a prime role in appointing, and where necessary, removing Executive Directors and in succession planning.
- You will take responsibility for the processes for accurately reporting on performance and the financial position of the Company.
- You should keep governance and compliance with the applicable legislation andregulations under review and the conformity of Company’s practices to accepted norms.
STATUS OF APPOINTMENT
- You will not be an employee of the Company and this letter shall not constitute a contract of employment. You will be paid such remuneration by way of sitting feesfor meetings of the Board and its Committees as may be decided by the Board. Further, you will also be paid remuneration by way of commission as may beapproved by the Board and the Shareholders from time to time.
- The sitting fees presently paid to the Non-Executive Independent Director is Nil as per meeting of the Board or a Committee thereof for every Boardmeeting and Committee meeting attended by you in person or through video conferencing for all meetings up to the date of the next Annual General Meeting.
- You will have no entitlement to any bonus during the appointment and no entitlement to participate in any employee stock option scheme operated by theCompany or any Group Company.
REIMBURSEMENT OF EXPENSES
In addition to the remuneration described above, the Company will, for the period of your appointment, reimburse you for travel, hotel and other incidental expensesincurred by you in the performance of your role and duties.
INDEPENDENT PROFESSIONAL ADVICE
There may be occasions when you consider that you need professional advice in furtherance of your duties as a Director and it will be appropriate for you to consultindependent advisers at the Company’s expense. The Company will reimburse fullcost of expenditure incurred in accordance with the Company’s policy.
The Company proposes to take Directors’ and Officers’ liability insurance and it isintended that the Company will assume and maintain such cover for the full termof your appointment.
CONFLICT OF INTEREST
- It is accepted and acknowledged that you may have business interests other thanthose of the Company. As a condition to your appointment, you are required to declare any such directorships, appointments and interests to the Board in writingin the prescribed form at the time of your appointment.
- In the event that your circumstances seem likely to change and might give rise to aconflict of interest or, when applicable, circumstances that might lead the Board to revise its judgment that you are independent, this should be disclosed to both theChairman and the Company Secretary.
The Board of Directors will carry out an evaluation of the performance of the Boardas a whole, Board Committees and Directors on an annual basis as per Company’s Policy. Your appointment and reappointment on the Board shall be subject to theoutcome of the yearly evaluation process.
DISCLOSURE OF INTEREST
Any material interest that a Director may have in any transaction or arrangement that the Company has entered into should be disclosed no later than when thetransaction or arrangement comes up at a Board meeting so that the minutes may record your interest appropriately and our records are updated. A general noticethat you are interested in any contract with a particular person, firm or company is acceptable.
CODE OF CONDUCT
During the appointment you are required to comply with regulations as contained inSchedule IV under Companies Act, 2013, including the Code of Conduct.
- All information acquired during your appointment is confidential to the Company and should not be released, either during your appointment or following termination (by whatever means) to third parties without prior clearance from the Chairman unless required by law or by the rules of any stock exchange or regulatorybody. On reasonable request, you shall surrender any documents and other materialsmade available to you by the Company.
- Your attention is also drawn to the requirements under the applicable regulationsand the Company’s Insider Trading Code which concern the disclosure of price sensitive information and dealing in the securities of the Company. Consequently youshould avoid making any statements or performing any transactions that might risk a breach of these requirements without prior clearance from the Chairman orthe Company Secretary.
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 your appointmentand will also arrange for it to be displayed on the Company’s website.
MEMBERSHIP OF COMMITTEES
The Board of Directors may appoint you as Member I Chairman of one or more of its Committees which will be covered in a separate communication setting out therelevant committee’s terms of reference and any specific responsibilities.
- You may resign from your position at any time and should you wish to do so, you are requested to serve a reasonable written notice on the Board. In terms of provisions of the Companies Act, 2013, you are required to file a copy of your resignation letter with the Registrar of Companies, NCT of Delhi & Haryana.
- Continuation of your appointment is contingent on your getting re-elected by the shareholders in accordance with provisions of Companies Act, 2013 and the Articles of Association of the Company, from time to time in force. You will not be entitled to compensation if the shareholders do not re-elect you at any time.
- Your appointment may also be terminated in accordance with the provisions of the Articles of Association of the Company from time to time in force.
- This Letter and any non-contractual obligations arising out of or in connection withthis Letter are governed by, and shall be construed in accordance with, the laws of India, and the parties agree to submit to the exclusive jurisdiction of the courts of Delhi.