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Terms and Conditions of Appointment as an Independent Director of Maruti Suzuki India Limited (“Company”). The appointment as an independent director shall be subject to the Articles of Association of the Company and the terms and conditions set out below:
TERM OF APPOINTMENT
Your appointment as an independent director on the Board is for a term of 5 (five) consecutive years and you will not be liable to retire by rotation, unless terminated earlier in accordance with the provisions of this letter and the applicable laws
You may be required to serve on various committees of the Board. You shall be provided with the relevant terms of reference on your appointment to such a committee and will be required to act in accordance with such terms of reference.
You are entitled to resign from your office in compliance with the requirements and the procedure prescribed under the Act and the Listing Agreement. The Company may remove you from your office in compliance with the requirements and the procedure prescribed under the Act, the Listing Agreement and other applicable laws. Your office will stand vacated on occurrence of any of the trigger events set out in Section 167 of the Act.
You will be expected to devote such time as will be necessary for the proper performance of your duties as an independent director of the Board. You shall also be expected to make yourself available for all emergency and regular Board Meetings and of the committees thereof and general meetings of the Company.
By accepting this appointment, you undertake that, taking into account all other commitments that you may have, you are in a position to allocate sufficient time to meet the expectations of your role.
EXPECTATIONS FROM THE BOARD
The Board expects you to:
(i) Familiarize yourself with the (a) organisation structure; and (b) nature of business, activities and operations of the Company;
(ii) Observe and comply with applicable law, the Articles of Association of the Company and the rules, regulations and policies of the Company, in relation to your directorship and the business of the Company;
(iii) Perform your duties and responsibilities and exercise your powers, honestly, faithfully, efficiently, diligently and with reasonable care; and
(iv) Observe and follow standards appropriate to and having regard to (a) your role as an independent director; and (b) your knowledge, skills and experience.
(v) Inform the Company, upon accepting additional commitments that might affect the time you are able to devote to your role as an independent director of the Company, including the number of public companies in which you serve as an independent director at any point of time.
CRITERIA OF INDEPENDENCE
You shall at the first meeting of the Board in which you participate as an independent director and thereafter at the first meeting of the Board in every financial year or as and when there is a change in circumstances, which may affect your status as an independent director, submit a declaration to the Board that you meet the criteria of independence specified under Section 149(6) of the Act.
You shall disclose any direct or indirect interest, which you may have in any matter being considered at a board meeting or committee meeting and, save as permitted under the Articles of Association of the Company, you shall not vote on any resolution of the Board, or of any of its committees, on any matter where you have any direct or indirect interest.
Unless specifically authorised to do so by the Board, you shall not enter into any legal or other commitment or contract on behalf of the Company.
You shall not hold office:
(1) as a director (including as an alternate director) in more than twenty companies at the same time;
(2) as a director in more than ten public companies at the same time; and
(3) as an independent director in more than seven listed companies at the same time (provided however, that in case you hold office as a whole time director in a listed company then you shall not hold office as an independent director in more than three listed companies).
DUTIES AND FUNCTIONS
In your capacity as an independent director of the Company, you will have to strictly abide by and comply with:
(i) The duties of directors as set out under Section 166 of the Act;
(ii) The duties and responsibilities as set out under Clause 49 of the Listing Agreement; and
(iii) The Code for Independent Directors under Schedule IV of the Act (pursuant to Section 149 of the Act), including the (a) guidelines for professional conduct; (b) roles and functions; and (c) duties set out thereunder.
The aforementioned duties, guidelines for professional conduct and the Code for Independent Directorsshall be deemed to be incorporated into this letter of appointment and shall form an integral part of this letter.
Subject to your duties as an independent director, you shall not (i) engage in any acts or deeds that would be detrimental to the interests of the Company or any of its affiliates; (ii) tarnish the reputation of or disparage the business of the Company, its affiliates, their respective executive management, directors, shareholders, employees, or people, business relations, organizations connected with the Company and/or any of its affiliates; and (iii) otherwise harm the Company’s and/or any of its affiliates’ goodwill, business interests or reputation in any manner.
You will be expected to perform your duties, whether contractual, statutory or fiduciary, faithfully, efficiently and diligently to a standard commensurate with both the functions of your role and your knowledge, skills and experience and with due regard to applicable laws.
You will be required to comply with all applicable laws including but not limited to the requirement to comply with the maximum number of directorships that can be held by you as an independent director.
You shall moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between management and shareholder's interest.
In addition, the Company will make available and / or conduct training sessions from time to time in understanding the business model of the Company as well as the risk profile of the business parameters of the Company. You are also expected to keep yourself well informed about the Company and the external environment in which it operates. The Company will also be conducting a training programme for all the directors to ensure they understand their responsibilities as directors the best ways to discharge them and the basis for understanding financial statements and related documents. We request your kind participation.
You along with other independent directors of the Company shall hold at least one meeting every year, without the attendance of non-independent directors and members of management, to, inter-alia, (i) review the performance of non- independent directors and the Board as a whole; (ii) review the performance of the Chairperson of the Company, taking into account the views of executive directors and non-executive directors; (iii) 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.
You shall review minutes of board meetings and committee meetings (in which you shall act as a member) in order to ensure proper recording of proceedings taken place in the meetings. Further in case you have concerns about carrying out the affairs of the Company, you shall ensure the same are addressed by the Board and, to the extent that they are not resolved, secure their recording in the minutes. You shall be presumed to have had no such concerns, in case you don't secure their recording in the minutes.
You shall make all statutory disclosures required under the Act and other applicable laws, to the Company (in particular disclosure of interest with respect to matters specified under Section 184 of the Act and certificate/declaration of independence at the time of your reappointment) and to various regulatory authorities.
CODE OF CONDUCT
You will be required to comply with all rules, regulations and codes of practice issued by the Company. This includes the code of conduct laid down by the Board applicable to all the Board members and senior management of the Company
In addition, you will adhere to the following standards of professional conduct while performing your duties as an independent director:
(1) uphold ethical standards of integrity and probity;
(2) act objectively and constructively while exercising your duties;
(3) exercise your responsibilities in a bona fide manner in the interest of the Company;
(4) devote sufficient time and attention to your professional obligations for informed and balanced decision making;
(5) not allow any extraneous considerations that will vitiate your 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 your 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 your independence;
(8) where circumstances arise which make you lose your independence, you should immediately inform the Board accordingly; and
(9) assist the Company in implementing the best corporate governance practices.
PERFORMANCE EVALUATION AND TRAINING
Your performance evaluation will be conducted by the entire Board, excluding you, on an annual basis and based on the parameters and guidelines prescribed by the Nomination and Remuneration Committee of the Company.
For any breach by you of the duties, you will be subject to the penal consequences as set out under the Act and other applicable laws including SEBI regulations and the Listing Agreement.
In relation to the Company, you would be liable for such acts of omission or commission by the Company which had occurred with your knowledge, attributable through Board processes, and with your consent or connivance, or where you have not acted diligently.
As an independent director, and during the term, you will be entitled to the sitting fee for attending the board and committee meetings, besides commission on an annual basis which shall be subject to such revisions as may be determined by the shareholders of the Company and any limits that may be prescribed under applicable law.Additionally, all travelling and other expenses properly incurred in performing your duties in accordance with the Articles of Association and the Act and other applicable laws, will be reimbursed as per Company's policy.
The remuneration shall be subject to applicable taxes and the Company may withhold therefrom any amounts as are required to be withheld pursuant to applicable law. Any tax liability arising in respect of payments made pursuant your remuneration shall be borne solely by you.
DIRECTORS AND OFFICERS (D & O) INSURANCE
You, as a director of the Company, are covered by an appropriate directors and officers (D & O) insurance policy. Details of the insurance coverage would be available to you on request.
You accept and acknowledge that the business interests of the Company require a confidential relationship between you and the Company and the fullest protection and confidential treatment of the financial data, customer information, supplier information, market information, marketing and/ or promotional techniques and methods, pricing information, purchase information, sales policies, employees’ lists, policy and procedure information, records, advertising information, computer records, computer access codes, trade secrets, know how, plans and programs, sources of supply, and other knowledge of the business of the Company, irrespective of whether marked as ‘confidential’ or not (all of which are hereinafter jointly termed “Confidential Information”), which has or may in whole or in part be conceived, learned or obtained by you in the course of your tenure as an independent director of the Company.
You hereby agree that you shall not, except in the proper performance of your duties either during your tenure as an independent director of the Company or at any time after the completion or termination of your appointment with the Company (howsoever caused), directly or indirectly, use, divulge, export, publish or communicate, to any person, other than any person employed by the Company (including, for the avoidance of doubt, any professional or other adviser appointed by the Company, who is required to know the same) any Confidential Information, which has come to your knowledge during the term of your appointment with the Company, for your own benefit or for the benefit of any third party or, except as required by law, a court or tribunal of competent jurisdiction or any applicable regulatory or statutory authority or body, or except as necessarily required in the context of proceedings before any such court, tribunal, or regulatory or statutory authority or body to evidence the proper discharge of your duties as an independent director of the Company. This obligation shall be in addition to and not in derogation or substitution of any express or implied duty of confidentiality owed by you to the Company.
The restrictions contained in this Clause 11 shall cease to apply to any Confidential Information which may (otherwise than through your default) become available to, or be within the knowledge of, the public generally.
As a director, you are subject to and bound by the prohibition and restrictions against insider trading and disclosure of unpublished price sensitive information, as prescribed under the Act and the regulations issued by the Securities and Exchange Board of India (“SEBI”).
You agree and acknowledge that during the course of your appointment, you may have access to certain Confidential Information, which may constitute unpublished price sensitive information. You hereby agree that you shall comply with the provisions of the Act, and the Code of Conduct for Prevention of Insider Trading of the Company under SEBI (Prohibition of Insider Trading) Regulations, 1992, as the Company may adopt from time to time.
COMPANY RECORDS AND OTHER PROPERTY
You shall, on request at any time and from time to time (and in any event, on termination/expiry of your appointment with the Company), immediately deliver to the Company or its authorised representatives, all keys, passes, credit or charge cards, Confidential Information and all documents, which may be in your possession or control and which relate in any way to the business and affairs of the Company.
Your appointment as an independent director of the Company shall be terminated with immediate effect in the event you:
(1) commit a breach of any of your duties, functions and responsibilities or obligations towards the Company under this letter or for reasons prescribed under the Act; or
(2) compromise your independence vis-à-vis the Company in any manner whatsoever which will have an impact on the criteria of independence specified in Section 149(6) of the Act.
You may resign from your office by giving one month prior written notice to the Company. Upon resignation, you shall in compliance with the provisions of Section 168 of the Act, forward a copy of the resignation along with detailed reasons for resignation to the Registrar of Companies, National Capital Territory of Delhi and Haryana within 30 (thirty) days of your resignation in the prescribed manner.