24 November 2015
As per Companies Act 2013, a person may be appointed as an ID for a term upto 5 years, and then he may be reappointed for one more term upto years,on the strength of a special resolution. However, the revised Clause 49 of the Listing Agreement seems to provide for only one more term. The relevant clause reads: Provided that a person who has already served as an independent director for five years or more in a company as on October 1, 2014 shall be eligible for appointment, on completion of his present term, for one more term of up to five years only.
If one examines closely, there is no conflict between the requirements of the Act and the Listing Agreement, if the directors are appointed before 1st October 2014. Sure enough, the AGM of 2014 will be over before 1st October. So, if the appointment is done before 1st October 2014, it becomes a “present term” as on 1st October 2014, and therefore, the term of 5 years will start running only after the expiry of the “present term”.
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