Board of Directors

EDAC ENGINEERING LIMITED
CODE FOR INDEPENDENT DIRECTORS
(Code for Independent Directors as per Schedule IV (Section 149(8)) of the Companies Act, 2013.)


This Code is a guide to professional conduct for independent directors and the independent directors are expected to adhere to these standards and fulfill their responsibilities in a professional and faithful manner.
I. Guidelines of professional conduct
  1. The independent directors are expected to maintain the following guidelines/ standards while conducting their professional duty.
  2. Independent directors shall uphold ethical standards of integrity and probity in the interests of the Company.
  3. They shall act objectively and constructively while exercising their duties;
  4. They shall exercise their responsibilities in a bona fide manner in the interest of the Company;
  5. They shall devote sufficient time and attention to their professional obligations for informed and balanced decision making;
  6. They shall not allow any extraneous considerations that will vitiate their 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;
  7. They shall not abuse their 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;
  8. They shall refrain from any action that would lead to loss of their independence;
  9. They shall immediately inform the Board where circumstances arise which makes them lose their independence;
  10. They shall assist the Company in implementing the best corporate governance practices.

II. Role and functions
  1. The independent directors shall 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. They shall bring an objective view in the evaluation of the performance of board and management;
  3. They shall scrutinize the performance of management in meeting agreed goals and objectives and monitor the reporting of performance;
  4.They shall satisfy themselves on the integrity of financial information and that financial controls and the systems of risk management are robust and defensible;
  5. They shall safeguard the interests of all stakeholders, particularly the minority shareholders;
  6. They shall balance the conflicting interest of the stakeholders;
  7. They shall 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. They shall moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between management and shareholder’s interest.

III. Duties
  1. The independent directors shall undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the Company;
  2. They shall 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. They shall strive to attend all meetings of the Board of Directors and of the Board committees of which they are members;
  4. They shall participate constructively and actively in the committees of the Board in which they are chairpersons or members;
  5. They shall strive to attend the general meetings of the Company;
  6. Where they have concerns about the running of the Company or a proposed action, they shall ensure that these are addressed by the Board and, to the extent that they are not resolved, they shall insist that their concerns are recorded in the minutes of the Board meeting;
  7. They shall keep themselves well informed about the Company and the external environment in which it operates;
  8. They shall not unfairly obstruct the functioning of an otherwise proper Board or committee of the Board;
  9. They shall 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. They shall ascertain and ensure that the Company has an adequate and functional vigil mechanism and ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use;
  11. They shall report concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy;
  12. They shall while acting within their authority, assist in protecting the legitimate interests of the Company, shareholders and its employees;
  13. They shall 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 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 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.An independent director may resign from his office by giving a notice in writing to the Company and to the Registrar of Companies in the manner and in accordance with the provisions of section 168 of the Companies Act, 2013 (“the Act”).
  2.An independent director may be removed from his office in accordance with the provisions of section 169 of the Companies Act, 2013.
  3.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.
  4.Where the company fulfills the requirement of independent directors in its Board even without filing 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
  i) The independent directors shall hold at least one meeting in a year, without the attendance of non-independent directors and members of management of the Company
  ii) All the independent directors shall strive to be present at such meeting;
Such 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. Performance Evaluation
The performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.
On the basis of the report of performance evaluation, it shall be determined whether to re-appoint the independent director.

IX. Training Programme
The independent directors shall attend the training programme as may be organized by the Company in order to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc.

X. Adherence to the Applicable Laws
  1. The independent directors shall adhere to the provisions of the Companies Act, 1956 and the Companies Act, 2013 to the extent and as may be applicable to them.
  2. They shall comply with the Code of Independent Directors.
  3. They shall comply with all the laws to the extent and as may be applicable to the Company.
  4. They shall give a declaration that they meet the criteria of independence as provided in section 149(6) of the Companies Act, 2013 as amended from time to time in the format as given in ‘Declaration - I’ at the first meeting of the Board in which they participate as directors 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.
  5. They shall from time to time furnish to the Company such declarations, disclosures, statements as may be required to be furnished by the Directors under the relevant laws.
  6. An independent director shall be held liable in respect of such acts of omission or commission by the Company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he had not acted diligently with respect to the provisions contained in the Companies Act, 1956 or the Companies Act, 2013.