Corporate Governance

Terms and Conditions of appointment of Independent Directors

  1. Duration of Appointment:

    The Independent Directors appointed under the provisions of the Companies Act, 1956 will serve the term in office as Director per the respective resolutions pursuant to which they were appointed. The Independent Directors appointed after April 1, 2014 under the provisions of the Companies Act, 2013 will serve for a period of one year from the date of their respective appointments.

    The board may invite the Independent Directors to continue on as an Independent director for an additional period there after subject to recommendation by the Nomination and Remuneration Committee and approval of shareholders.

  2. Remuneration:

    The Board determines the level of remuneration paid to its non-executive members including Independent Directors within any limitations imposed by shareholders. Presently, the Company pays sitting fee of `50,000 for attending each meeting of the Board and Audit & Risk Management Committee and `40,000 for attending any other committee meeting if you are a member of such committee(s). TDS shall be deducted at applicable rates from the sitting fee.

    The Company will reimburse the Directors for all direct and indirect expenses such as toll calls, accommodation and travelling expenses, reasonably and properly incurred and documented.

  3. Duties of Directors:

    1. The directors shall abide by the following duties provided in section 166 of the Companies Act, 2013:

      1. Subject to the provisions of the Companies Act 2013, the directors shall act in accordance with the Articles of Association of the company

      2. Directors 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 interests of the company, its employees, the shareholders, the community and for the protection of environment.

      3. Directors shall exercise duties with due and reasonable care, skill and diligence and shall exercise independent judgment.

      4. Directors shall not involve in a situation in which they may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the Company.

      5. The directors shall not achieve or attempt to achieve any undue gain or advantage either to themselves or to their relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal of that gain to the Company.

      6. The Directors shall not assign their office and any assignment so made shall be void.

    2. Further, Independent Directors shall have to ensure the following in compliance with Schedule IV read with section 149(8) of the Act.

      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 they are 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;

      12. acting within their 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;

      14. shall maintain professional conduct and abide by the role, responsibilities and other provisions set out in schedule IV of the Companies Act, 2013 pursuant to section 149(8) of the Act.

Familiarisation Programme

  1. Overview

    The Board members of Essar Oil Limited (Independent and Non-Independent) are afforded every opportunity to familiarize themselves with the Company, its management and its operations and the Industry in which the Company operates. They are provided with an environment to interact with senior management personnel and are given all the documents sought by them for enabling a good understanding of the Company, its various operations and the oil & gas industry.

  2. Familiarisation Process:

    1. Induction Manual:

      At the time of appointment, the Directors are provided with Induction Manual covering various aspects such as background, details of Board members, shareholding pattern, Company Policies, Code of Conduct, operations reports, presentations etc. which enables them to be conversant with the structure and operations of the Company.

    2. Off-site visits to plant:

      The Directors get the opportunity to visit the Company’s plant at Devbhumi Dwarka and other locations where we operate, to enable them to have full understanding & appreciation on the activities of the Company.

    3. Presentations:

      Presentations on operations are made regularly to the Board / Committees. Presentations inter alia covers operational performance, business strategies, quarterly and annual results, budgets, review of internal audit, risk management framework etc.

Whistle Blower Mechanism

Essar Oil Limited has established a Vigil Mechanism process by adopting a Whistle blower Policy for directors and employees.

This policy outlines the procedures for reporting, handling, investigating and deciding on the course of action to be taken in case inappropriate conduct or behaviour, such as demanding or accepting bribes, questionable accounting or fraudulent financial transactions. The Policy provides for adequate safeguards against victimization of persons who use the mechanism. The policy aims not only at protecting the identity of the “Whistle blower” but also protecting him/her from any subsequent retribution within the system by any affected party. It has a process for providing direct access to the Chairman of the Audit & Risk Management Committee in appropriate or exceptional cases.

Corporate governance compliance reports

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