05 August 2014
As per Listing Agreement half of board should consist of independent director.
As per recent circular issued by MCA Non executive/Non independent director ( being appointed by Bank for loan taken by company ) shall not be considered as independent director.
Now my query is for composition(half of the board) of ID at time of appointing independent director, Non executive /Non independent should be taken in account
for example Board consists of 8 members
2 Members (MD and Non executive directors)- Promoters
1 Members- ID
Balance 5 Members- Non Independent directors being appointed by bank in the board for loan taken by company)
In this situation whether existing ONE ID is enough in the board as ID ( as per Listing agreement )
or
Existing one ID +3 ID members to be appointed in the board as ID (8 -half of board)
or
Existing one ID + 5 to be appointed in the board as ID (Existing 8 +4 New ID- half of board)
05 August 2014
As per Clause 49 of the Listing Agreement,
Where the Chairman of the Board is a non-executive director, at least 1/3rd of the Board should comprise of ID and in case he is an executive director, at least 1/2 Of the Board should comprise of ID.
Provided that where the non-executive Chairman is a promoter of the company or is related to any promoter or person occupying management positions at the Board level or at one level below the Board, at least 1/2 of the Board of the company shall consist of ID.
In your case, if chairman is executive director OR Non executive promoter director or non executive director related to promoter, 1/2 of the Board i.e 8/2 = 4 should be ID. OR
if chairman is non executive, 1/3rd of the board i.e 8/3 = 2.6 i.e 3 should be ID
CAclubindia
