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Key Managerial Personnel

Khushboo Maheshwari (Company Secretary) (548 Points)

30 January 2010

Hi....can anyone tell who is defined as key managerial personnel (KMP)........is an independent director KMP as per Companies Act, 1956. One of our independent director is Chairman in our group company so will he be a related party.......please tell

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5 Replies

Mitali Agarwal (Company Secretary) (638 Points)
Replied 30 January 2010

The concept of KMP has come from the Companies Bill, 2009 which will take the form of Act on approval in future.

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Mitali Agarwal (Company Secretary) (638 Points)
Replied 30 January 2010

Independent directors according to Companies Act are defined as persons who:

• Are not relatives of the chairman, managing director, whole time director, or the company secretary

• Should not have been auditors, internal auditors, legal advisors or consultants to the company during any of the preceding three financial years

• Should not have been suppliers, vendors or customers of the company

• Should not hold below two per cent of the shares of the company, presently or in past

• Should not have held any position in the company

• Should not have been a director for a continuous period of nine years

• Nominee directors of banks or FIs cannot be considered independent directors .

In view of above definition, just holding position of Chairman in group company will not make any person ineligible to hold position of independent director in a co. Views of other members solicited.