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Remuneration Committee

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Preeti Gandhi

Company Secretary

44 Points Posted on 07 May 2010

Dear all

Our JV unlisted Company (45% Indian Stake and 55% foreign stake) wants to appoint a WTD in terms of Schedule XIII. On of the requirement is to constitute a remuneration committee consisting of at least three non executive independent directors. The JV Company currently has 4 directors.Two directors are nominated by each JV partner. Whether the JV Company can constitute remuneration committee? the two directors from each side can be considered independent as they are representative of the JV partners also being employees/ directors of the JV Partners.

Please advice.

Thanks

Preeti Gandhi

Replies (1)

Deepak Maharishi

448 Points Posted on 19 May 2010

Dear Preeti,

Please keep in view the definition of an independent director which includes any director who apart from receiving directors' remuneration does not have any pecuniary relation with the company, its directors, its promoters, senior management, subsidiaries, holding company that may affect his independency.

In your case, all 4 directors may be termed as non executive in case those are not executive directors. But they cant be called as Independent Directors.

Thus you may not form a remuneration committee with this composition.

Regards

Deepak