Draft Letter of Appointment For Independent Director
To,
Shri ………….
__________________
__________________
Sub
: Appointment Letter for your appointment as an Independent Director of ……
: Appointment Letter for your appointment as an Independent Director of ……
Dear Sir,
Pursuant to the decision ofthe Board of Directors in its meeting held on …….. and the approval of theShareholders, I am writing to confirm our decision to appoint you as
Independent Director on the Board of Directors of The ……………… (hereinafter
referred to as …….. or the Company) with effect from …….., This letter of
appointment sets out the terms and conditions covering your appointment which
are as follows:
Independent Director on the Board of Directors of The ……………… (hereinafter
referred to as …….. or the Company) with effect from …….., This letter of
appointment sets out the terms and conditions covering your appointment which
are as follows:
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1. Appointment
1.1 Subject to the provisions Section 149 and
152 and other applicable provisions of the Companies Act, 2013 (‘Act’) read
with the Companies (Appointment and Qualification of Directors) Rules,2014
(‘Rules’) You will be appointed as a Non-Executive Independent Director on the
Board of Directors of ……….. with effect from 25th March, 2015.
152 and other applicable provisions of the Companies Act, 2013 (‘Act’) read
with the Companies (Appointment and Qualification of Directors) Rules,2014
(‘Rules’) You will be appointed as a Non-Executive Independent Director on the
Board of Directors of ……….. with effect from 25th March, 2015.
1.2
Your term of appointment is for a period of 5 (five) years with effect from 25th
March, 2015.
Your term of appointment is for a period of 5 (five) years with effect from 25th
March, 2015.
1.3 The Company has adopted
the provisions with respect to appointment and tenure of Independent Directors
which is consistent with the Companies Act, 2013. Accordingly, the Independent
Directors will serve for not more than two terms of five years each on the
Board of the Company. The Company is at liberty to disengage Non-Executive
Independent Director earlier subject to compliance of relevant provisions of
Companies Act, 2013.
the provisions with respect to appointment and tenure of Independent Directors
which is consistent with the Companies Act, 2013. Accordingly, the Independent
Directors will serve for not more than two terms of five years each on the
Board of the Company. The Company is at liberty to disengage Non-Executive
Independent Director earlier subject to compliance of relevant provisions of
Companies Act, 2013.
2. Committees
The Board of Directors (the
Board) may, if it deems fit, invite you for being appointed on one or more
existing Board Committees or any such Committee that is set up in the future.
Your appointment on such Committee(s) will be subject to the applicable
regulations.
Board) may, if it deems fit, invite you for being appointed on one or more
existing Board Committees or any such Committee that is set up in the future.
Your appointment on such Committee(s) will be subject to the applicable
regulations.
3. Time Commitment
3.1 As a Non-Executive Director
you are 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. The Board meets
at least four times in a year. The Audit Committee also meets at least four
times in a year. Besides, there are other Committee meetings like Nominationand Remuneration Committee and Corporate Social Responsibility Committee
meetings. You will be expected to attend Board, Board Committees to which you
may be appointed as member and Shareholders meetings and to devote such time to
your duties, as appropriate for you to discharge your duties effectively.
you are 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. The Board meets
at least four times in a year. The Audit Committee also meets at least four
times in a year. Besides, there are other Committee meetings like Nominationand Remuneration Committee and Corporate Social Responsibility Committee
meetings. You will be expected to attend Board, Board Committees to which you
may be appointed as member and Shareholders meetings and to devote such time to
your duties, as appropriate for you to discharge your duties effectively.
3.2 By accepting this
appointment, you confirm that you are able to allocate sufficient time to meet
the expectations from your role to the satisfaction of the Board.
appointment, you confirm that you are able to allocate sufficient time to meet
the expectations from your role to the satisfaction of the Board.
4. Role and Duties
Your role and duties will be
those normally required of a Non-Executive Independent Director under the
Companies Act, 2013 and the listing agreement. There are certain duties
prescribed by the ‘Act’ for all Directors, both Executive and Non-Executive,
which are fiduciary in nature and are as under:
those normally required of a Non-Executive Independent Director under the
Companies Act, 2013 and the listing agreement. There are certain duties
prescribed by the ‘Act’ for all Directors, both Executive and Non-Executive,
which are fiduciary in nature and are as under:
I. You shall act in accordance with
the Company’s Articles of Association.
the Company’s Articles of Association.
II. 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.
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.
III.
You shall discharge your duties with due and reasonable care, skill and
diligence.
You shall discharge your duties with due and reasonable care, skill and
diligence.
IV. 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. Please refer to clause 7 for
full explanation on conflict of interest.
which you may have a direct or indirect interest that conflicts, or possibly
may conflict, with the interest of the Company. Please refer to clause 7 for
full explanation on conflict of interest.
V.
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 achieve or attempt to achieve any undue gain or advantage either
to yourself or to your relatives, partners or associates.
VI.
You shall not assign your office as Director and any assignments so made shall
be void.
You shall not assign your office as Director and any assignments so made shall
be void.
In addition to the above requirements applicable to all
Directors, the role of the Non-Executive Director has the following key
elements:
Directors, the role of the Non-Executive Director has the following key
elements:
Strategy:
Non-Executive Directors should help to develop proposals on strategy;
Non-Executive Directors should help to develop proposals on strategy;
Performance :
Non-Executive Directors should scrutinise the performance of management
in meeting agreed goals and objectives;
Non-Executive Directors should scrutinise the performance of management
in meeting agreed goals and objectives;
Risk:
Non-Executive Directors should satisfy themselves on the integrity of financial
information and that financial controls and systems of risk management are
robust and defensible;
Non-Executive Directors should satisfy themselves on the integrity of financial
information and that financial controls and systems of risk management are
robust and defensible;
People:
Non-Executive 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;
Non-Executive 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;
Reporting:
Non-Executive Directors take responsibility for the processes for accurately
reporting on performance and the financial position of ………..; and
Non-Executive Directors take responsibility for the processes for accurately
reporting on performance and the financial position of ………..; and
Compliance:
Non-Executive Directors should keep governance and compliance with the
applicable legislation and regulations under review and the conformity of ………..
practices to accepted norms.
Non-Executive Directors should keep governance and compliance with the
applicable legislation and regulations under review and the conformity of ………..
practices to accepted norms.
5. Status of
Appointment
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 fees for meetings of the
Board and its Committees as may be decided by the Board.
of the Company and this letter shall not constitute a contract of employment.
You will be paid such remuneration by way of sitting fees for meetings of the
Board and its Committees as may be decided by the Board.
6. Reimbursement of
Expenses
Expenses
In addition to the
remuneration described in paragraph 5 the Company will, for the period of your
appointment, reimburse you for travel, hotel and other incidental expenses
incurred by you in the performance of your role and duties.
remuneration described in paragraph 5 the Company will, for the period of your
appointment, reimburse you for travel, hotel and other incidental expenses
incurred by you in the performance of your role and duties.
7. Conflict of
Interest
Interest
7.1 It
is accepted and acknowledged that you may have business interests other than
those of the Company. As a condition to your appointment commencing, you are
required to declare any such directorships, appointments and interests to the
Board in writing in the prescribed form at the time of your appointment.
is accepted and acknowledged that you may have business interests other than
those of the Company. As a condition to your appointment commencing, you are
required to declare any such directorships, appointments and interests to the
Board in writing in the prescribed form at the time of your appointment.
7.2 In the event that your circumstances seem
likely to change and might give rise to a conflict of interest or, when
applicable, circumstances that might lead the Board to revise its judgment that
you are independent, this should be disclosed to the board.
likely to change and might give rise to a conflict of interest or, when
applicable, circumstances that might lead the Board to revise its judgment that
you are independent, this should be disclosed to the board.
8. Confidentiality
All information acquired
during your appointment is confidential to ……….. 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 regulatory body.
during your appointment is confidential to ……….. 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 regulatory body.
9. Evaluation
The Company will carry out
an evaluation of the performance of the Board as a whole, Board Committees and
Directors on an annual basis. Your appointment and re-appointment on the Board
shall subject to the outcome of the yearly evaluation process.
an evaluation of the performance of the Board as a whole, Board Committees and
Directors on an annual basis. Your appointment and re-appointment on the Board
shall subject to the outcome of the yearly evaluation process.
10. Disclosure of
Interest
Interest
The Company must include in
its Annual Accounts a note of any material interest that a Director may have in
any transaction or arrangement that the Company has entered into. Such interest
should be disclosed not later than when the transaction or arrangement comes up
at a Board meeting so that the minutes may record your interest appropriately
and our records are updated. A general notice that you are interested in any
contracts with a particular person, firm or company is acceptable.
11. Code of conduct
During the tenure of your
appointment, you are required to comply with the code of conduct adopted by the
Board of Directors and to comply with Schedule IV of the Companies Act, 2013.
appointment, you are required to comply with the code of conduct adopted by the
Board of Directors and to comply with Schedule IV of the Companies Act, 2013.
12. Termination
a). 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.
should you wish to do so, you are requested to serve a reasonable written
notice on the Board.
b). Continuation of your
appointment is in accordance with provisions of Companies Act, 2013, Rules made
there under and the Articles of Association of the Company, from time to time
in force.
appointment is in accordance with provisions of Companies Act, 2013, Rules made
there under and the Articles of Association of the Company, from time to time
in force.
c). Your appointment may
also be terminated in accordance with the provisions of the Articles of
Association of the Company and the provisions of the Companies Act, 2013 and
rules made there under as amended.
also be terminated in accordance with the provisions of the Articles of
Association of the Company and the provisions of the Companies Act, 2013 and
rules made there under as amended.
13. Governing Law
This agreement is governed by and will be interpreted in
accordance with Indian law and your engagement shall be subject to the
jurisdiction of the Indian courts and the Courts in Indore shall have exclusive
jurisdiction.
accordance with Indian law and your engagement shall be subject to the
jurisdiction of the Indian courts and the Courts in Indore shall have exclusive
jurisdiction.
If you are willing to accept these terms of appointment
relating to your appointment as a non executive Independent Director of ………..,
kindly confirm your acceptance of these terms by signing and returning to us
the enclosed duplicate copy of this letter.
relating to your appointment as a non executive Independent Director of ………..,
kindly confirm your acceptance of these terms by signing and returning to us
the enclosed duplicate copy of this letter.
Yours sincerely
For ………………………….
……………….
I hereby acknowledge
receipt of and accept the terms set out in this letter.
receipt of and accept the terms set out in this letter.
Signed ……………………………….
Dated ………………………………..
This Draft Letter of Appointment For Independent Director is only for reference, kindly make necessary changes as applicable in the given case.
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