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Saturday, February 15, 2014

EXTRACTS OF CLAUSE 49 OF LISTING AGREEMENT AND SECTION 292A OF THE COMPANIES ACT, 1956

EXTRACTS OF CLAUSE 49 OF LISTING AGREEMENT AND SECTION 292A OF THE COMPANIES ACT, 1956

Clause 49 - Corporate Governance
The company agrees to comply with the following provisions:
I. Board of Directors
(A) Composition of Board
(i) The Board of directors of the company shall have an optimum combination of executive and
non-executive directors with not less than fifty percent of the board of directors comprising of nonexecutive
directors.
(ii) Where the Chairman of the Board is a non-executive director, at least one-third of the Board should
comprise of independent directors and in case he is an executive director, at least half of the Board
should comprise of independent directors.
(iii) For the purpose of the sub-clause (ii), the expression ‘independent director’ shall mean a nonexecutive
director of the company who:
(a) apart from receiving director’s remuneration, does not have any material pecuniary relationships
or transactions with the company, its promoters, its directors, its senior management or its holding
company, its subsidiaries and associates which may affect independence of the director;
(b) is not related to promoters or persons occupying management positions at the board level
or at one level below the board;
(c) has not been an executive of the company in the immediately preceding three financial
years;
(d) is not a partner or an executive or was not partner or an executive during the preceding three
years, of any of the following:
i) the statutory audit firm or the internal audit firm that is associated with the company, and
ii) the legal firm(s) and consulting firm(s) that have a material association with the company.
(e) is not a material supplier, service provider or customer or a lessor or lessee of the company,
which may affect independence of the director; and
(f) is not a substantial shareholder of the company i.e. owning two percent or more of the block
of voting shares.
Explanation - For the purposes of the sub-clause (iii):
(b) Associate shall mean a company which is an “associate” as defined in Accounting Standard (AS)
23, “Accounting for Investments in Associates in Consolidated Financial Statements”, issued by the
Institute of Chartered Accountants of India.
(c) “Senior management” shall mean personnel of the company who are members of its core
management team excluding Board of Directors. Normally, this would comprise all members of
management one level below the executive directors, including all functional heads.
(d) “Relative” shall mean “relative” as defined in section 2(41) and section 6 read with Schedule IA of
the Companies Act, 1956.
(iv) Nominee directors appointed by an institution which has invested in or lent to the company shall
be deemed to be independent directors.

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