KMSML’s EDUCATION POLICY FOR HIGHER STUDY
The Company hereby makes POLICY FOR HIGHER EDUCATION AID to provide opportunity to the deserving employees ( the term also includes eligible Trainee) of the Company to acquire higher education in the fields directly related to the working of the Company in order to grow in his / her career and Company will gain by having highly qualified, committed and loyal asset (men power) for the fulfilment of its goals.
The policy will be called “HIGHER EDUCATION POLICY” and will come into force w.e.f. January 1, 2015 as amended from time to time in the Board Meeting of the company.
- SCOPE & ELIGIBILITY: The benefits of the policy shall apply to the employees of the Company in the managerial grade.
- TYPES OF EDUCATION: The policy will be related to the higher Education as under:
2.1 Category I: Higher Studies in Management;
2.2 Category II: Higher Studies in Technical –Mechanical, Civil, Chemical, Engineering, I.T. areas;
- EDUCATION FACILITY (EF):
3.1 EF may be granted to the eligible employees in the cadre of Executive grade on the recommendation of Chairman of the Company that added education will improve the performance of the employee towards the working of the Company. IN case of Employee, the concerned HOD shall also certify that he/she will be able to manage work in the absence of the employee.
3.2 The EF may be allowed not more than Rs.1.00 crores p.a.
- EDUCATION FACILITY WITH FULL/ PARTIAL PAYMENT OF FEES (EFPPF):
4.1 EFPPF can be granted to the eligible executive employees on the approval of board , who are academically good and the added education will improve performance of the employee towards the working of the Company.
4.2 Under this category, the employee shall be reimbursed up to 100% of all kinds of fees/expenses like Enrolment fee, tuition fee, examination fee, library fee, hostel charges/ room rent and other charges incidental to completion of course with the education institute excluding mess charges. The security or any kind of refundable deposit shall be reimbursed subject to the condition that on completion of course from the concerned Institute, the employee shall immediately refund the security with the Company.
4.3 The EFPPF may be allowed for a maximum period of five years.
- OTHER TERMS AND CONDITIONS:
5.1 Grant of Education Aid under this / her Policy is at the discretion of the Board even if an employee / or his / her child fulfils the conditions of these rules.
5.2 As per the Board Approval the company can pay a of salary towards cost of monthly expenses of the family of the employee.
In order to avail said facility the concerned employee shall have to give a bond in writing that after completion of his / her education for which aid is sought, he/she will serve the Company for a minimum period equivalent to three years.
5.4 The Company may grant aid to the employee for the period equivalent to the bond period to bear the expenses of education as per this policy.
5.5 The grant under this / her policy will be either directly paid to the concerned institute from where he/she wishes to pursue his / her studies or if employee / or his / her child deposits the fees etc. himself then claim reimbursement from the Company on production of documentary evidence of payment in original.
5.6 The sanctioning authority to grant education aid under this policy shall be Board of the Company.
5.7 The employee will submit the application for Higher Education Financial acility / aid to the Company along with the prospectus/brochure of the course that he/she wants to pursue. In the application, employee shall clearly state that he/she has read and fully understood the ‘Executive Employee Education Facility / Aid ’ and he/she fully agrees to abide by the conditions laid down under the rules. HOD with his / her comments shall forward the same to the concerned Unit Head. Unit Head, if deems fit shall forward the same to the Chairman and the chairman shall place it before the Board for approval.
5.8 There will not be service break to the employee and he/she shall be deemed to be in the employment of the Company during the period of his / her leave as sanctioned for higher education.
Further, the employee shall be allowed to gain post study experience for a period of 2 years after the completion of his studies in order to gain added experience during his performance towards the working of the Company subject to the approval by the board.
5.9 If the employee, who has been allowed education aid is not able to complete his / her studies for which the aid was granted, he/she shall repay all the money spent by the Company on his / her studies along with 9.5% cumulative interest to the Company. However, if the reasons for which education could not be completed were beyond the control of the employee, then this condition may be waived at the sole discretion of the Board.
5.10 The Policy has been framed and issued under the authority of the Board.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
In terms of Clause 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company shall familiarize the independent directors 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., through various programmes.
- Purpose: The Familiarization Programmes are aimed to familiarize the independent directors with the company, their roles responsibilities in the company, nature of industry in which the company operates and business model of the company by imparting suitable training sessions.
- Overview of Familiarization Programmes: Board of Directors in its meeting held on 2md May, 2017 had approved the Independent Director’s Training Policy (“Policy”) according to which :
– To facilitate independent directors in the performance of their duties and responsibilities, and materials regarding the Company’s business and operations, governing documents, information on key personnel, and financial information are made available to them.
– Independent directors are also taken through detailed business strategy for various businesses during the independent directors meetings which are held at least once in a year.
– The Chairman of the Board depending on the business needs may also nominate independent directors for relevant external training programs.
Apart from Independent Directors, Non-Executive Directors are also eligible to attend the familiarization programs.
The Independent Directors are made aware of their role and responsibilities and liabilities at the time of their appointment through a formal letter of appointment, which also stipulates their roles and responsibilities and various terms and conditions of their appointment.
Regular updates on relevant statutory and regulatory changes are regularly circulated to the Directors
- Disclosure of the Policy: This policy is updated n the company website and a a web link for the same shall also be provided in the Annual Report of the Company.
- Review of the Familiarisation Program: The Board shall review this Program and make revisions as may be required.
Disclosure pursuant to Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 The Company strongly believes that effective familiarisation programme helps Independent Directors of the Company, not only to have greater insight into Company’s business but also contributes effectively in decision making at Board / Committee meetings. The Board members are provided with necessary documents them to familiarise with the Company’s procedures and practices. Periodic presentations are made at the Board and Committee meetings on business and performance updates of the Company including Finance, Sales, Marketing of the Company’s major business segments, practices relating to Human Resources, overview of business operations of global business environment, business strategy and risks involved. Monthly / quarterly updates on relevant statutory, regulatory changes and landmark judicial pronouncements, if any, encompassing important laws are regularly circulated to the Directors.Disclosure as required under the Regulation 46 of the Listing Regulations:
Details of attendance of Independent Directors in Familiarization Sessions are as follows:
|S.No.||Name of Independent Director||No. of the Sessions attended||No. of hours spent in the Sessions attended|
|FY 2021-22||Cumulative till date||FY 2021-22||Cumulative till date from 2015|
|1||Mr. S K Gupta||2||2||2||15|
|2||Smt. Madhu Mathur||2||2||2||15|
|3||Mr. Suhsil Solomon||2||2||2||6|
|4||Mr. Bibhas Kumar Srivastav||2||2||2||3|
FOREIGN TREAVELLING POLICY
Scope and Purpose of the Policy:
K.M Sugar Mills Limited intends to ensure the proper approval and reporting of foreign visits of the Directors of the Company. Such visits are appropriate only if they are in the best interest of the Company and its shareholders. Considering the requirements for approval expenses of Directors’ Foreign Travelling as prescribed under the Companies Act, 2013 (herein after called “Act”) read with the Companies (Meetings of Board and its Powers) Rules, 2014 (herein after called Rules), applicable Accounting Standard and Regulation 27 of SEBI (LODR) Regulation 2015.
Further as per Regulation 27 of SEBI (LODR) Regulation, 2015 a listed company shall have to formulate a policy foreign visits of the Directors of the Company.
In view of the above, K. M. Sugar Mills limited has framed this Policy on Foreign Travelling of the Directors of the Company (“Policy”). This Policy has been adopted by the Board of Directors of the Company based on recommendations of the Audit Committee. The Board may amend this policy suo moto, or on recommendations of the Audit Committee from time to time. The Audit Committee would review and amend the Policy, as and when required, subject to adoption by the Board.
The first step in measuring Foreign Travelling Policy’s effectiveness is setting goals, whether that’s beneficial to the Company. Next is identifying the metrics that best track progress towards these goals. Key performance indicators (KPIs) such as purpose of the visit, business generated to the Company, how their foreign trips fruitful in the growth of the Company, amount spent on visit, positive outcomes from their foreign visit.
Foreign Travelling of Directors under this Policy
In the event the Company becomes aware of Foreign Business Proposal, the matter shall appraised to the the Audit Committee , who will review the plan after considering all the relevant facts and circumstances and relevancy of Foreign Business Proposal and shall recommend the foreign travelling of Director /(s) of the Company to the Board.
It is further confirmed that the Company shall bear the foreign travelling of Director/(s) and :-
- If so required, he /she may visit with his/ her spouse ;
- The Company will bear the cost of foreign travelling ticket ( including the cost of ticket of the spouse, if travel with him) ;
- Further, the Director visiting foreign country will be entitled for Hotel stay expenses towards their food and local conveyance ;
The Director will submit the foreign travelling report to the Audit Committee and Board also.
POLICY FOR DETERMINING ‘MATERIAL’ SUBSIDIARIES
- Purpose and Scope: The Policy for determining ‘material’ subsidiary companies had been framed in accordance with Regulation 24 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”).
The Policy will be used to determine the material subsidiary of K.M Sugar Mills Limited (referred to as “KMSML” or “the Company”) and to provide the governance framework for such subsidiary.
All the words and expressions used in this Policy, unless defined hereafter, shall have meaning respectively assigned to them under the Listing Regulations and in the absence of its definition or explanation therein, as per the Companies Act, 2013 and the Rules, Notifications and Circulars made/issued thereunder, as amended, from time to time.
- Identification of ‘Material’ subsidiary: A subsidiary shall be considered as material if :
A. The networth of the subsidiary, exceeds 10 per cent of the consolidated net worth of KMSML and its subsidiary in the immediately preceding accounting year or,
B. If the income of the subsidiary exceeds 10 per cent of the consolidated income of KMSML and its subsidiary in the immediately preceding accounting year.
- Governance framework:
(i) The Audit Committee of Board of the Company shall review the financial statements, in particular, the investments made by the unlisted subsidiary.
(ii) The minutes of the Board Meetings of the Unlisted Subsidiary shall be placed before the Board of the Company.
(iii) The management shall periodically bring to the attention of the Board of Directors of the Company, a statement of all significant transactions and arrangements entered into by the unlisted subsidiary.The term “significant transaction or arrangement” shall mean any individual transaction or arrangement that exceeds or is likely to exceed ten percent of the total revenues or total expenses or total assets or total liabilities, as the case may be, of the unlisted material subsidiary for the immediately preceding accounting year.
(iv) At least one Independent Director of the Company shall be a director on the Board of the unlisted material subsidiary, incorporated in India.
(v) The management shall present to the Audit Committee annually the list of such subsidiaries together with the details of the materiality defined herein. The Audit Committee shall review the same and make suitable recommendations to the Board.
- Disposal of Material Subsidiary: The following disposals shall not be permitted:
A. The Company reducing its shareholding (either on its own or together with other subsidiaries) to less than fifty per cent or ceasing exercise of control over the subsidiary or,
B. Selling, disposing and leasing of assets amounting to more than twenty percent of the assets of the material subsidiary on an aggregate basis during a financial year without passing a special resolution in the Company’s General Meeting except in cases where such divestment is made under a scheme of arrangement duly approved by a Court/Tribunal under the Companies Act, 2013 , or rules made thereunder.
- Policy Review: This policy is framed pursuant to the provisions of the Companies Act, 2013, and rules thereunder and the requirements of the Listing Regulations.
In case of any subsequent changes in the provisions of the Companies Act, 2013, or any other regulations which makes any of the provisions in the policy inconsistent with the Act or regulations, then the provisions of the Act or regulations would prevail over the policy and the provisions in the policy would be modified in due course to make it consistent with law.
This policy shall be reviewed by the Audit Committee as and when any changes are to be incorporated in the policy due to change in regulations or as may be felt appropriate by the Committee. Any changes or modification on the policy as recommended by the Committee would be given for approval of the Board of Directors.
Policy on Selection & Remuneration of Directors, Key Managerial Personnel and Other Employees and on Board Diversity
Sub-section (3) of Section 178 of the Companies Act, 2013 states that the Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
Part – D of Schedule II to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also mandates the Nomination and Remuneration Committee to formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees. It further requires the Nomination and Remuneration Committee to devise a policy on diversity of the Board of Directors of the listed entity.
This Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity (“Policy”) is designed to (i) attract, motivate and retain talented employees in the competitive market, (ii) motivate employees to excel in their performance, recognise their contribution, (iii) retain talent in the organisation, reward merit and protect organisational stability & flexibility and (iv) lay down the criteria for selection of directors in the Board and persons in the senior management to assist the Board of Directors in performing its duties. This Policy will also ensure constitution of the Board with optimum combination of Executive and Non-Executive Directors including Independent Directors who possess diverse experience and expertise in strategic management, governance and provide long term vision and direction to the Company.
However, the Board should act according to its obligations under the specific facts and circumstances it faces.
This Policy has been adopted by the Board of Directors of the Company based on recommendations of the Nominations and Remunerations Committee.
This Policy applies to the Company’s Directors, Key Managerial Personnel and other employees.
- Objectives: This Policy is formulated with the following objectives:
(i) To set the criteria for determining qualifications, positive attributes and independence of a director.
(ii) To have a diverse Board, with people from diverse areas of expertise and experience.
(iii) To ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors and employees of the quality required to run the Company successfully.
(iv) To ensure that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks.
(v) To ensure that the remuneration involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
(vi) To attract, recruit, motivate and retain desired talent.
However, exceptional occasions may arise where it is appropriate to act differently than set out in this Policy due to some extra-ordinary talent of any candidate and due to outstanding performance.
- Definitions and Interpretations:
“Act” shall mean the Companies Act, 2013 (as amended) along with the rules made thereunder.
“Committee” means “Nomination & Remuneration Committee” constituted by the Board of Directors of the Company.
“Key Managerial Personnel” or “KMP” means personnel as defined under the Companies Act, 2013.
“Listing Regulations” shall mean the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
“Senior Management”, “Senior Management Personnel” or “Senior Executives” means employees of Company who are members of its core management team excluding directors comprising all members of management one level below the executive directors, including the functional heads. Unless expressly excluded, Senior Management includes KMP.
- Policy for selection and appointment of the Board Members
I. Board Membership Criteria & Diversity
The Board of Directors should be composed of individuals who have demonstrated significant achievements in business, education, individual profession and/or public service. They should have requisite expertise, education and experience to make a significant contribution to the deliberations of the Board of Directors in light of the Company‟s business. In addition, the Board shall have at least one-woman director.
The Committee may review the appropriate skills and characteristics of Board members in the context of the current structure of the Board. This assessment should include issues of diversity, age, business, qualifications, ethics & integrity, willingness to participate in Board matters and other criteria that the Committee and Board find to be relevant at that point of time. A variety and balance of skills, background and experience is desirable.
The composition of the Board shall meet the conditions prescribed under the Act and the Listing Regulations. Proposed appointees shall possess the Director Identification Number and meet the criteria as laid down in the Act and the Listing Regulations.
The overall ability and experience of individual Board candidate should determine their suitability. The following attributes may be considered as desirable in any candidate for the Board:
a) Experience- A Board candidate should have extensive experience in business, administration, profession, governance and/or public service. An ideal Board candidate may have had experience in more than one of these areas.
b) Education – Ideally, it is desirable that a Board candidate should hold degree from a respected college or university. In some cases, it is further desirable for the candidate also to have earned a masters or acumen in governance & administration. However, these educational criteria are not meant to exclude an exceptional candidate who does not meet these educational criteria.
c) Personal – A Board candidate should be of the highest moral and ethical character. The candidate should exhibit independence, objectivity and be capable of serving as a representative of the stakeholder.
d) Individual Characteristics – A Board candidate should have the personal qualities to be able to make a substantial active contribution to the Board deliberations. These qualities include intelligence, self-assuredness, high ethical standard, inter-personal skills, independence, judgmental, courage, a willingness to ask the difficult question, communication skills and commitment.
e) Availability – A Board candidate must be willing to commit, as well as have, sufficient time available to discharge the duties of the Board membership. The candidate should not have any prohibited interlocking relationships.
f) Compatibility – A Board candidate should be able to develop a good working relationship with other Board members and contribute to the Board‟s working relationship with the Senior Management of the Company.
g) Compliance – A Candidate should meet the compliance requirements prescribed under the Act, the Listing Regulations and other Rules & Regulations or standards set out by the Company.
III. Predominance of Independent Directors
Independence promotes integrity, accountability and governance. The Board shall comprise of requisite number of independent directors as prescribed under the law.
Not less than requisite number of directors shall be independent directors who meet the criteria for independence as required under the Act, the Listing Regulations and other prescribed Rules & Regulations applicable to the Company. Besides, the Board will consider all relevant facts and circumstances in making a determination of independence.
IV. Selection and Orientation of New Directors
The Committee shall identify candidates for the Board and recommend them for appointment by Board and subsequently for approval by the shareholders as prescribed under the law. The Board delegates the screening process to the Committee with direct input from the Chairman of the Board or the Managing Director or any other Committee as may deem appropriate. The Senior Management, working in conjunction with the Committee, shall develop an appropriate familiarisation program for new directors that include background briefings, meetings with the Senior Management and visits to Company facilities etc.
IV. Assessing Performance of Board and Committees
The Committee shall evaluate performance of each director and report annually to the Board on the results of the assessment process. The performance evaluation of Independent directors shall be done by the entire Board of Directors. The Independent directors in their meeting shall review the performance of non-independent directors and the Board as a whole. While assessing the performance, the Board or the Committee shall take into account attendance of directors in the Board and Committee meetings, performance of the business, accomplishment of long-term strategic objectives & their participation, role & functioning of various committees, compliance and other matter as they may think fit. The purpose of the assessment is to increase the effectiveness of the Board.
- Selection and nomination of Senior Management including KMP
Criteria for selection of directors shall also apply for selection of executives in the Senior Management excepting those which are not applicable for KMP. Where appointment or performance of any KMP requires specific qualification or degree, the person should also possess the same. Keeping self-up-to-date for performing duties, on issues and emerging trends is an important part of responsibilities. KMP must take reasonable steps to remain current in professional development, corporate governance and discharging duties & responsibilities.
The KMP shall meet the conditions prescribed under the Act and other Rules & Regulations as may be applicable.
- Compensation Structure
I. Principles of Remuneration
This Policy reflects the balance between the interests of the stakeholders of the Company as well as a balance between the Company‟s short-term and long-term strategy. As a result, the structure of the remuneration package for the Executive Directors and the Senior Management Personnel are designed to balance short-term operational performance with the medium and long-term objective of creating sustainable value within the Company. The Company strives for high performance in the field of sustainability and aims to maintain a good balance between economic gains, respect for people and concern for the environment in line with the values of the Company and business principles to ensure that highly skilled and qualified personnel can be attracted and retained. The Company aims for a total remuneration level that is comparable to levels provided by other companies that are similar to the Company in terms of size and complexity. The Company shall strive to be an equal opportunity employer.
The following elements shall be considered for payment of remuneration to Executive Directors, Senior Management Personnel and other employees :
Industry Average, Remuneration drawn by peers considering nature and volume of responsibilities, Qualification, Experience, Immediate previous position held in earlier organization & responsibilities occupied, responsibilities shouldered in the Company, contribution made within the organisation, any achievement, reward or recognition, behavioural patterns, work ethics, evaluation of performance etc.
II. Remuneration to Executive Directors & Non-Executive Directors
The Executive Directors shall be eligible for a monthly remuneration consisting of salary, perquisites and annual commission (in case of Chairman, Managing Director and Joint Managing Director), as may be approved by the Board of Directors, based on the recommendations of the Committee, provided the same are in accordance with the statutory provisions of the Act, the rules made thereunder, for the time being in force and approved by the Shareholders and Central Government, wherever required.
The Non-Executive Directors (including Independent Directors) shall be entitled to receive sitting fees for attending each meeting of the Board of Directors and the committees thereof. The fees paid to the Non-Executive Directors for attending meetings shall be such as may be determined by the Board within the limits prescribed under the Act. Beside the sitting fees, they are also entitled to reimbursement of expenses for participation in meetings of the Board / Committee / Shareholders.
Any review of the remuneration to Executive Directors and Non-Executive Directors shall be on the basis of performance evaluation of directors and as per recommendation of the Committee.
Payment of sitting fees to Non-Executive Directors shall be subject to the provisions of the Act including prescribed rules & schedules thereunder and the Listing Regulations.
III. Remuneration to Senior Management and other employees
In order to attract and retain managerial expertise, the elements of the remuneration of the Senior Management are determined on the basis of the work they do and the value they create as well as of the conditions in other similar companies. Each element of the remuneration has been weighted in order to ensure a continuous positive development of the Company both in the short and longterm as well as of the employees to enhance productivity.
Remuneration of employees largely consists of base remuneration, perquisites, bonus, exgratia, etc. The components of the total remuneration vary for different cadres/grades are governed by industry pattern, qualification and experience of the employee, responsibilities handled by him, individual performance, among others. The remuneration to employees/workers shall also comply with the applicable regulations and policies of the respective governments. As the factories of the Company are situated in the State of Uttar Pradesh, the remuneration to employees/workers (other than Senior Management) shall also be in compliance with the policies of the U.P. Govt. including Wage Board.
However, the Company may give compensation in the form of reward or incentive to any employee for his outstanding or extraordinary performance, which is over and above the benchmark set for him during any year.
Annual appraisal of performance of Senior Executives and other employees shall be done by the respective reporting authority/ head of the department in association with HR Department. Based on such performance evaluation any increase in remuneration shall be considered.
- Supplementary Provisions
The Committee may review this Policy periodically and suggest revisions in this Policy to the Board to ensure this Policy serves its purpose and accurately reflects the sense of the Board and the Company.
Terms and conditions of Appointment of Independent Directors
In accordance with the provisions of the Companies Act, 2013 and other applicable laws,
The Independent Directors:
Names:- Initial Date Reappointment S.K GUPTA 19/05/2015 20-08-2019 MADHU MATHUR 19/05/2015 20-08-2019 SUSHIL SOLOMON 06/08/2019 20-08-2019 BIBHAS KUMAR SRIVASTAV 01/02/2021 10-03-2021
will serve as an Independent Director of the Board for 5 years as an Independent Director they will not be liable to retire by rotation and their appointment is subject to the approval of shareholders at the ensuing Annual General Meeting of the Company.
In terms of the Act, they may be eligible to serve as an Independent Director for another term of up to 5 years, subject to the recommendation of the Nomination and Remuneration Committee and passing of special resolution by the shareholders of the Company.
The terms of there appointment, as set out in this letter, are subject to the extant provisions of the (i) applicable laws, including the Act and the Listing Regulations (as amended from time to time) and (ii) Articles of Association of the Company.
- Role, duties and responsibilities
A. As a member of the Board they along with the other Directors will be collectively responsible for meeting the objectives of the Board which include:
i) Requirements under the Companies Act, 2013,
ii) Responsibilities of the Board as outlined in the Listing Regulations,
iii) Accountability under the Directors’ Responsibility Statement.
B. They shall abide by the ‘Code For Independent Directors’ as outlined in Schedule IV to Section 149(8) of the Act, and the duties of directors as provided in the Act (including Section 166) and in Regulation 4(2)(f) of the Listing Regulations.
C. They will provide guidance in there area of expertise.
- Professional Conduct for Independent Directors
As an Independent Director, they shall:
i. uphold ethical standards of integrity and probity;
ii. act objectively and constructively while exercising thereduties;
iii. exercise there responsibilities in a bona fide manner in the interest of the Company;
iv. devote sufficient time and attention to thereprofessional obligations for informed and balanced decision-making
v. not allow any extraneous considerations that may vitiate thereexercise 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;
vi. not abuse thereposition 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;
vii. refrain from any action that could lead to a loss of there independence;
viii. ensure that if circumstances arise under which they may lose there independence, they will immediately inform the Board accordingly;
ix. assist the Company in implementing the best corporate governance practices.
- Role and Function of Independent Directors
As an Independent Director they shall:
i. 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;
ii. bring an objective view in the evaluation of the performance of the Board and the Management;
iii. scrutinize the performance of Management in meeting agreed goals and objectives and monitor the reporting of performance;
iv. satisfy thereself on the integrity of financial information and that financial controls and the systems of risk management are robust and defensible;
v. safeguard the interests of all stakeholders, particularly the minority shareholders;
vi. balance the conflicting interest of the stakeholders;
vii. 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;
viii. moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between Management and shareholder’s interest.
As an Independent Director, they shall:
i. undertake the appropriate induction into the Board and regularly update and refresh thereskills, knowledge and familiarity with the Company;
ii. seek appropriate clarifications and, where necessary, seek and follow appropriate professional advice from external experts at the expense of the Company;
iii. strive to attend every meeting of the Board and of the Board committees of which they are a member;
iv. actively and constructively participate in the Board and Committees of the Board in which they may be a member or the Chairperson;
v. strive to attend the general meetings of the Company;
vi. ensure that any concerns that they may have about the running of the Company are addressed by the Board and seek inclusion of these concerns in the Board minutes to the extent these concerns are not resolved;
vii. keep thereself well informed about the Company and the external environment in which it operates
viii. not unfairly obstruct the functioning of an otherwise proper Board or committee;
ix. ensure that related party transactions are considered carefully before they are approved and are in the interest of the Company;
x. ensure that the whistleblower function of the Company is functioning adequately;
xi. report concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct and Ethics;
xii. within there authority, assist in protecting the legitimate interests of the Company, shareholders and its employees;
xiii. not disclose any confidential information unless such disclosure is expressly approved by the Board or required by law.
- Functions of the Board of Directors
1.1. Key functions of the Board of Directors-
a) Reviewing and guiding corporate strategy, major plans of action, risk policy, annual budgets and business plans, setting performance objectives, monitoring implementation and corporate performance, and overseeing major capital expenditures, acquisitions and divestments.
b) Monitoring the effectiveness of the listed entity‘s governance practices and making changes as needed.
c) Selecting, compensating, monitoring and, when necessary, replacing key managerial personnel and overseeing succession planning.
d) Aligning key managerial personnel and remuneration of board of directors with the longer term interests of the listed entity and its shareholders
e) Ensuring a transparent nomination process to the board of directors with the diversity of thought, experience, knowledge, perspective and gender in the board of directors.
f) Monitoring and managing potential conflicts of interest of management, members of the board of directors and shareholders, including misuse of corporate assets and abuse in related party transactions.
g) Ensuring the integrity of the listed entity‘s accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control and compliance with the law and relevant standards.
h) Overseeing the process of disclosure and communications.
i) Monitoring and reviewing board of director‘s evaluation framework.
1.2. Other responsibilities:
a) The board of directors shall provide strategic guidance to the listed entity, ensure effective monitoring of the management and shall be accountable to the listed entity and the shareholders.
b) The board of directors shall set a corporate culture and the values by which executives throughout a group shall behave.
c) Members of the board of directors shall act on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the listed entity and the shareholders.
d) The board of directors shall encourage continuing directors’ training to ensure that the members of board of directors are kept up to date.
e) Where decisions of the board of directors may affect different shareholder groups differently, the board of directors shall treat all shareholders fairly.
f) The board of directors shall maintain high ethical standards and shall take into account the interests of stakeholders.
g) The board of directors shall exercise objective independent judgement on corporate affairs.
h)The board of directors shall consider assigning a sufficient number of non-executive members of the board of directors capable of exercising independent judgement to tasks where there is a potential for conflict of interest.
1.3 The board of directors shall ensure that, while rightly encouraging positive thinking, these do not result in over-optimism that either leads to significant risks not being recognised or exposes the listed entity to excessive risk.
1.4 The board of directors shall have ability to ‘step back‘ to assist executive management by challenging the assumptions underlying: strategy, strategic initiatives (such as acquisitions), risk appetite, exposures and the key areas of the listed entity‘s focus.
1.5 When committees of the board of directors are established, their mandate, composition and working procedures shall be well defined and disclosed by the board of directors.
1.6 Members of the board of directors shall be able to commit themselves effectively to their responsibilities.
1.7 In order to fulfill their responsibilities, members of the board of directors shall have access to accurate, relevant and timely information.
- Board Committees
As advised by the Board, during the tenure of office, they may be required to serve on one or more of the Committees of the Board. Upon there appointment to any one or more Committees, they will be provided with the appropriate Committee charter which sets out the functions of that Committee.
Currently, the Board has Five committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee, CSR Committee and Finance Committee.
- Time Commitment
Considering the nature of the role of a director, it is difficult for the Company to lay down specific parameters on time commitment. They agree to devote such time as is prudent and necessary for the proper performance of there role, duties and responsibilities as an Independent Director.
As an Independent Director they will be paid sitting fees for attending the meetings of the Board and the Committees of which they are a member. The sitting fees for attending each meeting of the Board and its Committees would be as determined by the Board from time to time. Currently, we pay a sitting fee of Rs. 20000/- per meeting of the Board and of the Rs.5000/- per meeting of Committee meetings.
Further, the Company may pay or reimburse to they such expenditure that may be incurred by they while performing there role as an Independent Director of the Company. This could include reimbursement of expenditure incurred by they for accommodation, travel and any out of pocket expenses for attending Board/ Committee meetings, General Meetings, court convened meetings, meetings with shareholders/ creditors/ management, site visits, participating in induction and training programmes (organized by the Company for Directors) and/or obtaining professional advice (subject to the expense being reasonable) from independent advisors in the furtherance of there duties as an Independent Director.
- Code of Conduct
As an Independent Director of the Company, they agree to comply with the Code of Conduct for Non-Executive Directors (NEDs). For there reference, the Code of Conduct for NEDs is provided in Annexure A.
They will appreciate that all information acquired during there appointment is confidential to the Company and should not be released, communicated, nor disclosed either during there appointment or following termination (by whatever means), to third parties without prior clearance from the Company. This restriction shall cease to apply to any confidential information which may (other than by reason of there breach) become available to the public generally. They acknowledge the need to hold and retain Company information (in whatever format they may receive it) under appropriately secure conditions.
There obligation of confidentiality shall survive cessation of there directorship with the Company. Additionally, they shall not participate in any business activity which might impede the application of there independent judgment in the best interest of the Company.
They are required to sign a confirmation of acceptance of the Code of Conduct for NEDs as adopted by the Board on an annual basis. We would also like to draw there attention to the applicability of both, Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and the Code of Conduct on Prevention of Insider Trading, prohibiting communication or use of unpublished price sensitive information. Being a Director of the Company, they are classified as a designated person of the Company and hence are prohibited from dealing in the Company’s securities during the period when the trading window is closed.
The trading window shall be closed for the following purposes:
1) Declaration of financial results;
2) Declaration of dividend(s);
3) Change in capital structure;
4) Mergers, de-mergers, acquisitions, delistings, disposals and expansions of business and such other transactions;
5) Changes in Key Managerial Personnel; and
6) Material events in accordance with the Listing Regulations
The time for commencement of closure of trading window shall be decided by the Company. The trading window shall be opened 48 hours after the information referred to above becomes generally available.
Further, for the purpose of compliance with insider trading regulations, they are required to pre-clear from the Compliance Officer of the Company, trade(s) in securities of Company where the cumulative trade whether in one or more transaction, exceeds ₹10 lacs in any financial year.
- Training and Development
The Company may, if required, conduct formal training programmes for its Independent Directors. The training programmes may include any or all of the following:
a)Board roles and responsibilities, whilst seeking to build working relationship among the Board members,
b)Company’s vision, strategic direction, core values, ethics and corporate governance practices,
c) Familiarization with financial matters, management team and business operations,
d) Meetings with stakeholders, visits to business locations and meetings with senior and middle management.
The Company may, as may be required, support Directors to continually update their skills and knowledge and improve their familiarity with the Company and its business. The Company will fund/arrange for training on all matters which are common to the full Board.
- Performance Appraisal / Evaluation Process
Annually, the Board evaluates the effectiveness of its functioning, that of the Committees and of individual Directors. The Board, through NRC, seeks feedback of Directors on various parameters such as:
a) Degree of fulfillment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning etc.);
b) The structure, composition and role clarity of the Board and Committees;
c) Extent of co-ordination and cohesiveness between the Board and its Committees;
d) Effectiveness of the deliberations and process management;
e) Board/Committee culture and dynamics; and
f) Quality of relationship between Board Members and the Management.
The Chairman of the Board will have one-on-one meetings with the Independent Directors and the Chairman of NRC will have one-on-one meetings with the Executive and Non-Executive Directors. These meetings are intended to obtain Directors’ inputs on effectiveness of the Board/Committee processes.
- Disclosures, other directorships and business interests
It is accepted and acknowledged that they have business interests other than those of the Company and have declared conflicts, if any that are apparent at present. In the event that they become aware of any potential conflict of interest with there position as Director of the Company, they shall promptly disclose the same to the Chairman and the Company Secretary and provide such other disclosures and information as may be required under the applicable laws. By signing this letter, they hereby confirm that as on date of this letter, they have no such conflict of interests with there existing directorships. Upon any change in circumstances which may affect there status as an Independent Director, they agree to promptly provide a declaration under Section 149(7) of the Act.
- Memberships of other boards
It is expected that they will not serve on the boards of competing companies. Apart from the applicable law and good corporate governance practices, there are no other additional limitations.
- Information on meetings
Dates for Board meetings will be communicated to they in advance. The agenda and explanatory notes are sent to the Board in advance. The Board meets at least once a quarter to review the quarterly results and other items on the agenda and also on the occasion of the Annual General Meeting of the shareholders. Additional meetings are held, when necessary.
Committees of the Board usually meet before the formal Board meeting, or whenever the need arises for transacting business. The recommendations of the Committees are placed before the Board for necessary approval.
The Board has full and unfettered access to any information of the Company, and to any employee of the Company. At Board meetings, the Board invites managers of the Company when additional details into the items being discussed are required.
- Independent Directors’ discussion
Annually and when required, the Independent Directors meet without the presence of Non-Independent Directors and members of the Management. At this meeting, the Independent Directors inter alia evaluate the performance of the Non-Independent Directors and the Board of Directors as a whole, evaluate the performance of the Chairman of the Board and discuss aspects relating to the quality, quantity and timeliness of the flow of information between the Company, the Management and the Board.
- Retirement policy
The age of retirement for non-executive directors is will be as per the provisions of section 149 of the Companies Act,2013 and SEBI (LOARD) Regulations,2015, which mention that who is not less than 21 years of age, however there is no upper limit in this regard.
- Changes in personal details
During there Term, they shall promptly intimate the Company Secretary and the Registrar of Companies in the prescribed manner, of any change in address or other contact and personal details provided to the Company.
They may resign as Director of the Company by giving notice in writing to the Company stating the reasons for resignation. The resignation shall take effect from the date on which the notice is received by the Company or the date, if any, specified by they in the notice, whichever is later.
- Extension of Term
Upon the expiry of there First Term and subject to there eligibility under the relevant provisions of the Act, Rules, and SEBI (LOARD) Regulations,2015and other applicable laws, as prevailing from time to time and subject to annual performance evaluation and recommendations of the Nomination and Remuneration Committee, the Board may, at its discretion, recommend to the shareholders renewal of there term.
The terms of appointment contained in this letter along with there detailed profile shall be disclosed on the website of the Company and the relevant stock exchanges.
WHISTLE BLOWER POLICY & VIGIL MECHANISM
A) The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. Towards this end, the Company has adopted the K.M Sugar Mills Ltd. Code of Conduct (“the Code”) as prevalent from time to time, which lays down the principles and standards that should govern the actions of the Company, its Associates and its employees. Any actual or potential violation of the Code, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the Directors, Employees in pointing out such violations of the Code cannot be undermined. There is a provision under the Code requiring employees to report violations, which states:
Clause: Raising Concerns
“We encourage our employees, customers, suppliers and other stakeholders to raise concerns or make disclosures when they become aware of any actual or potential violation of our Code, policies or law. We also encourage reporting of any event (actual or potential) of misconduct that is not reflective of our values and principles.
Avenues available for raising concerns or queries or reporting cases could include:
– immediate line manager or the Human Resources department of our company
– designated ethics officials of our company
– the ‘confidential reporting’ third party ethics helpline (if available)
– any other reporting channel set out in our company’s ‘Whistleblower’ policy.
We do not tolerate any form of retaliation against anyone reporting legitimate concerns. Anyone involved in targeting such a person will be subject to disciplinary action. If you suspect that you or someone you know has been subjected to retaliation for raising a concern or for reporting a case, we encourage you to promptly contact the company’s – the MD/JMD/CEO or the office of the General Manager –Personnel, C. F.O..”
B) Section 177 (9) of the Companies Act, 2013 mandates the following classes of companies to constitute a vigil mechanism –
– Every listed company;
– Every other company which accepts deposits from the public;
– Every company which has borrowed money from banks and public financial institutions in excess of Rs. 50 crores.
Further, Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires a listed entity to formulate a vigil mechanism for directors and employees to report genuine concerns.
The vigil mechanism shall provide for adequate safeguards against victimization of director(s) or employee(s) or any other person who avails the mechanism and also provide for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases.
C) Accordingly, this Whistleblower Policy (“the Policy”) has been formulated with a view to provide a mechanism for directors and employees of the Company to approach the MD/JMD/CEO or the office of the General Manager –Personnel, C. F.O. of the Company.
The definitions of some of the key terms used in this Policy are given below. Capitalised terms not defined herein shall have the meaning assigned to them under the Code.
a. “Associates” means and includes vendors, suppliers and others with whom the Company has any financial or commercial dealings.
b. “Audit Committee” means the Audit Committee of Directors constituted by the Board of Directors of the Company in accordance with Section 177 of the Companies Act, 2013 and read with Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
c. “Employee” means every employee of the Company (whether working in India or abroad), including the directors in the employment of the Company.
d. “Code” means the K.M Sugar Mills Ltd. Code of Conduct.
e. “Director” means every Director of the Company, past or present.
f. “Investigators” mean those persons authorised, appointed, consulted or approached by the Ethics Counsellor / Chairman of the Audit Committee and includes the auditors of the Company and the police.
g. “Protected Disclosure” means any communication made in good faith that discloses or demonstrates information that may evidence unethical or improper activity.
h. “Subject” means a person against or in relation to whom a Protected Disclosure has been made or evidence gathered during the course of an investigation.
i. “Whistleblower” means an Employee or director making a Protected Disclosure under this Policy.
a. This Policy is an extension of the K.M Sugar Mills Ltd Code of Conduct. The Whistleblower’s role is that of a reporting party with reliable information. They are not required or expected to act as investigators or finders of facts, nor would they determine the appropriate corrective or remedial action that may be warranted in a given case.
b. Whistleblowers should not act on their own in conducting any investigative activities, nor do they have a right to participate in any investigative activities other than as requested by the Ethics Counsellor or the Chairman of the Audit Committee or the Investigators.
c. Protected Disclosure will be appropriately dealt with by the Ethics Counsellor or the Chairman of the Audit Committee, as the case may be.
All Employees and directors of the Company are eligible to make Protected Disclosures under the Policy. The Protected Disclosures may be in relation to matters concerning the Company or any other related Company.
a. While it will be ensured that genuine Whistleblowers are accorded complete protection from any kind of unfair treatment as herein set out, any abuse of this protection will warrant disciplinary action.
b. Protection under this Policy would not mean protection from disciplinary action arising out of false or bogus allegations made by a Whistleblower knowing it to be false or bogus or with a mala fide intention.
c. Whistleblowers, who make three or more Protected Disclosures, which have been subsequently found to be mala fide, frivolous, baseless, malicious, or reported otherwise than in good faith, will be disqualified from reporting further Protected Disclosures under this Policy. In respect of such Whistleblowers, the Company / Audit Committee would reserve its right to take / recommend appropriate disciplinary action.
a. All Protected Disclosures concerning financial / accounting matters should be addressed to the Chairman of the Audit Committee of the Company for investigation.
b. In respect of all other Protected Disclosures, those concerning the Ethics Counsellor (MD/JMD/CEO or the office of the General Manager –Personnel, C. F.O ) and employees at the levels of Vice Presidents and above should be addressed to the Chairman of the Audit Committee of the Company and those concerning other employees should be addressed to the MD/JMD/CEO or the office of the General Manager –Personnel, C. F.O. of the Company.
c. The contact details of the Chairman of the Audit Committee and of the Ethics Counsellor of the Company are as under:Mr. S.K Gupta, Independent Director
Chairman – Audit Committee of the Company
c/o Office– Post Office Moti Nagar, Faizabad District-224201,Uttar Pradesh,India
Mr. V.N MISHRA
Chief Ethics Counsellor
Post Office Moti Nagar, Faizabad District-224201,Uttar Pradesh,India
d. If a protected disclosure is received by any executive of the Company other than Chairman of Audit Committee or the Ethics Counsellor, the same should be forwarded to the Company’s Ethics Counsellor or the Chairman of the Audit Committee for further appropriate action. Appropriate care must be taken to keep the identity of the Whistleblower confidential.
e. Protected Disclosures should preferably be reported in writing so as to ensure a clear understanding of the issues raised and should either be typed or written in a legible handwriting in English, Hindi or in the regional language of the place of employment of the Whistleblower.
f. The Protected Disclosure should be forwarded under a covering letter which shall bear the identity of the Whistleblower. The Chairman of the Audit Committee / Ethics Counsellor, as the case may be shall detach the covering letter and forward only the Protected Disclosure to the Investigators for investigation.
g. Protected Disclosures should be factual and not speculative or in the nature of a conclusion, and should contain as much specific information as possible to allow for proper assessment of the nature and extent of the concern and the urgency of a preliminary investigative procedure.
h. The Whistleblower must disclose his / her identity in the covering letter forwarding such Protected Disclosure. Anonymous disclosures will not be entertained as it would not be possible to interview the Whistleblowers.
a. All Protected Disclosures reported under this Policy will be thoroughly investigated by the Ethics Counsellor / Chairman of the Audit Committee of the Company who will investigate / oversee the investigations under the authorization of the Audit Committee. If any member of the Audit Committee has a conflict of interest in any given case, then he/she should recuse himself/herself and the other members of the Audit Committee should deal with the matter on hand. In case where a company is not required to constitute an Audit Committee, then the Board of directors shall nominate a director to play the role of Audit Committee for the purpose of vigil mechanism to whom other directors and employees may report their concerns.
b. The Ethics Counsellor / Chairman of the Audit Committee may at its discretion, consider involving any Investigators for the purpose of investigation.
c. The decision to conduct an investigation taken by the Ethics Counsellor / Chairman of the Audit Committee is by itself not an accusation and is to be treated as a neutral fact-finding process. The outcome of the investigation may not support the conclusion of the Whistleblower that an improper or unethical act was committed.
d. The identity of a Subject will be kept confidential to the extent possible given the legitimate needs of law and the investigation.
e. Subjects will normally be informed of the allegations at the outset of a formal investigation and have opportunities for providing their inputs during the investigation.
f. Subjects shall have a duty to co-operate with the Ethics Counsellor / Chairman of the Audit Committee or any of the Investigators during investigation to the extent that such co-operation will not compromise self- incrimination protections available under the applicable laws.
g. Subjects have a right to consult with a person or persons of their choice, other than the Ethics Counsellor / Investigators and/or members of the Audit Committee and/or the Whistleblower. Subjects shall be free at any time to engage counsel at their own cost to represent them in the investigation proceedings.
h. Subjects have a responsibility not to interfere with the investigation. Evidence shall not be withheld, destroyed or tampered with, and witnesses shall not be influenced, coached, threatened or intimidated by the Subjects.
i. Unless there are compelling reasons not to do so, Subjects will be given the opportunity to respond to material findings contained in an investigation report. No allegation of wrongdoing against a Subject shall be considered as maintainable unless there is good evidence in support of the allegation.
j. Subjects have a right to be informed of the outcome of the investigation. If allegations are not sustained, the Subject should be consulted as to whether public disclosure of the investigation results would be in the best interest of the Subject and the Company.
k. The investigation shall be completed normally within 45 days of the receipt of the Protected Disclosure
a. No unfair treatment will be meted out to a Whistleblower by virtue of his/her having reported a Protected Disclosure under this Policy. The Company, as a policy, condemns any kind of discrimination, harassment, victimization or any other unfair employment practice being adopted against Whistleblowers. Complete protection will, therefore, be given to Whistleblowers against any unfair practice like retaliation, threat or intimidation of termination/suspension of service, disciplinary action, transfer, demotion, refusal of promotion, or the like including any direct or indirect use of authority to obstruct the Whistleblower’s right to continue to perform his/her duties/functions including making further Protected Disclosure. The Company will take steps to minimize difficulties, which the Whistleblower may experience as a result of making the Protected Disclosure. Thus, if the Whistleblower is required to give evidence in criminal or disciplinary proceedings, the Company will arrange for the Whistleblower to receive advice about the procedure, etc.
b. A Whistleblower may report any violation of the above clause to the Chairman of the Audit Committee, who shall investigate into the same and recommend suitable action to the management.
c. The identity of the Whistleblower shall be kept confidential to the extent possible and permitted under law. Whistleblowers are cautioned that their identity may become known for reasons outside the control of the Ethics Counsellor / Chairman of the Audit Committee (e.g. during investigations carried out by Investigators).
d. Any other Employee or Director assisting in the said investigation shall also be protected to the same extent as theWhistleblower.
a. Investigators are required to conduct a process towards fact-finding and analysis. Investigators shall derive their authority and access rights from the Ethics Counsellor / Audit Committee when acting within the course and scope of their investigation.
b. Technical and other resources may be drawn upon as necessary to augment the investigation. All Investigators shall be independent and unbiased both in fact and as perceived. Investigators have a duty of fairness, objectivity, thoroughness, ethical behavior, and observance of legal and professional standards.
c. Investigations will be launched only after a preliminary review which establishes that:
i. the alleged act constitutes an improper or unethical activity or conduct, and
ii. either the allegation is supported by information specific enough to be investigated, or matters that do not meet this standard may be worthy of management review, but investigation itself should not be undertaken as an investigation of an improper or unethical activity.
If an investigation leads the Ethics Counsellor / Chairman of the Audit Committee to conclude that an improper or unethical act has been committed, the Ethics Counsellor / Chairman of the Audit Committee shall recommend to the management of the Company to take such disciplinary or corrective action as the Ethics Counsellor / Chairman of the Audit Committee deems fit. It is clarified that any disciplinary or corrective action initiated against the Subject as a result of the findings of an investigation pursuant to this Policy shall adhere to the applicable personnel or staff conduct and disciplinary procedures.
The Ethics Counsellor shall submit a report to the Audit Committee on a regular basis about all Protected Disclosures referred to him/her since the last report together with the results of investigations, if any.
- Retention of documents
All Protected Disclosures in writing or documented along with the results of investigation relating thereto shall be retained by the Company for a minimum period of seven years.
The Company reserves its right to amend or modify this Policy in whole or in part, at any time without assigning any reason whatsoever. However, no such amendment or modification will be binding on the Employees and directors unless the same is notified to the Employees and directors in writing.