Appointment and Qualification Director

8/16/2019 Appointment and Qualification Director

1/32

• 1

APPOINTMENT AND

QUALIFICATIONS OF

DIRECTORS (SEC 149-172)

By - Ankit Singh

B.Com, CS (Final), MBA (IB )


2/32

PPOINTMENT & QU LIFIC TIONS OF DIRECTORS

(SEC 149)

• Minimum 2 directors in a private company, 3 directors in a publiccompany and one director in an OPC

• Maximum 15 directors

• Special resolution required or more t!an 15 directors"

WOMAN DIRECTOR

• #very listed company and ot!er public companies !avin$ a paid

up capital of Rs 100 crore or more or turnover of Rs 300crore or more to appoint at least one %oman director it!inone "ear "

• &ntermittent vacancy o %oman director to be illed up not latert!an t!ree mont!s or next board meetin$, !ic!ever is later

RE#IDENC$• At least one director to sta" in India for not less t!an 1%&

da"s in t!e previous calendar "ear'

MCA Clarification( 'urin$ t!e calendar year 2(1), t!e director*s+s!ould be resident in &ndia or more t!an 13 days"

• 2 By - Ankit Singh B.Com, CS (Final), MBA (IB)


3/32

INDE)ENDENT DIRECTOR

•-isted public company. ot!er pu*lic companies !avin$ apaid up capital o /s 1( crore or more or turnover o /s 1((crore or more or !avin$ outstandin$ loan, debentures anddeposits exceedin$ /s 5( crore or more to !ave 103rd oardstren$t! as &ndependent 'irector %it!in 1 year *)rivate

companies e+empted+• tleast 2 directors s!all be t!ere in t!e above companies.!i$!er number o independent directors may be required dueto composition o udit Committee

•&ndependent director deined ex!austively u0s 1)4*+"•#very independent director to $ive at t!e irst meetin$ adeclaration in every inancial year t!at !e is independent"

•Independent directors to a*ide *" t!e code , #c!edule-I."

• 3


(SEC 149)

By - Ankit Singh B.Com, CS (Final), MBA (IB)


4/32

• T!e Code inter alia sets out /a Role and functions ofIndependent Directors /* t!eir duties /c manner of

appointment /d !oldin of at least one meetin ofindependent directors in a "ear it!out t!e attendance ofnon-independent directors and mem*ers of manaement

• o remuneration ot!er t!an sittin$ ee, commission on proitand reimbursement o expenses to &ndependent 'irectors

• o stoc6 Option to &ndependent 'irectors

• &ndependent director to !old oice up to 5 consecutive years

• /eappointment on passin$ a special resolution or next iveyears and disclosure in oard7s /eport"

• &ntermittent vacancy o independent director to be illed up notlater t!an t!ree mont!s or next board meetin$, !ic!ever islater

• 4

(SEC 149)



5/32

• rea6 o t!ree years necessary ater t%o terms orreappointment"

• o association %it! t!e company directly or indirectly inany capacity in t!e said t!ree "ears"

• E+istin tenure of t!e independent director not to *ecounted' Clause 2 of 4A is in t!e contrar"'

• person %!o !as already served as an &ndependent'irector or ive years or more in a company as on(1"1("2(1) s!all be eli$ible or appointment on completiono !is present term or one more term o up to 5 years only"

• &ndependent director not liable to retire by rotation"• #xplanatory statement to t!e notice required in case o

appointment o independent director t!at !e ulills t!econditions speciied in t!e ct"

• 5


(SEC 149)



6/32

• Re5uisition it! deposit of Rs 1 lac re5uired for

appointment of ID at t!e s!are!olders6 meetin

• Independent director to *e e+cluded !ile computindirectors retirin *" rotation in ever" A7M'

• 8ormal letter of appointment to be issued to &'s %it!in

one %or6in$ day rom t!e date o appointment o &'

• )erformance evaluation of Independent Directors(

a+ omination Committee to lay do%n t!e evaluation criteriaor perormance evaluation o &'s

• 6

INDEPENDENT DIRECTORS – DDITION L

REQUIREMENTS / DISCLOSURES UNDER EQUITY

LISTING GREEMENT



7/32

b+ Company to disclose t!e criteria or perormanceevaluation as &'s in its nnual /eport

c+ On t!e basis o t!e report o perormance evaluation, its!all be determined %!et!er to extend or continue t!e termo &ndependent 'irectors

•#eparate Meetins of Independent Directors *at leastone meetin$ a year+ %it!out t!e presence o nonindependent directors and members o mana$ement

•8!e company to provide suitable trainin$ to independent

directors to amiliari9e t!em %it! t!e company, t!eir roles,ri$!ts, responsibilities in t!e company" Details of suc!trainin imparted to *e disclosed in t!e Annual Report'

• 7



LISTING GREEMENT



8/32

4ia*ilities of Independent Directors

&ndependent 'irectors s!all be !eld liable, only in respecto suc! acts o omission or commission by a company%!ic! !ad occurred %it! !is 6no%led$e, attributable t!rou$!board process and %it! !is consent or connivance or %!ere

!e !ad not acted dili$ently"9e s!all *e deemed as an :Officer !o is in default6 orpenal provisions i !e is a%are o a contravention o t!eprovisions o 2(13 ct by virtue o receipt o oard

proceedin$s or participation in t!e oard proceedin$s%it!out ob:ectin$ to t!e same or %!ere suc! contravention!ad ta6en place %it! !is consent or connivance"

• 8



LISTING GREEMENT



9/32

PPOINTMENT OF DIRECTOR BY SM LL

S REOLDER (SECTION 1!1)

listed company ma" !ave one director elected by small

s!are!olders *t!at is, s!are!older !oldin$ s!ares onominal value not more t!an /s 2(,(((+

/equisition notice, o not less t!an 1((( smalls!are!olders or 101(t! o t!e total number o suc! smalls!are!olders, !ic!ever is less, is required

Company suo motu may appoint a small s!are!olderdirector

Small s!are!older director;

*a+ is not liable to retire by rotation

*b+!is tenure on t!e board not to exceed 3 consecutive years

*c+ not eli$ible or re


10/32

RIGT OF PERSONS OTER T N RETIRING

DIRECTORS TO ST ND FOR DIRECTORSIP

(SECTION 1"#)

Proposal or appointment o director /ot!er t!andirectors retirin *" rotation %it! notice anddeposit o /s" 1 la6! 1) days beore meetin$"

Members to be inormed at least seven days beore

t!e meetin$ Members %it! e


11/32

PPOINTMENT OF DDITION L / LTERN TE/

NOMINEE DIRECTOR (SECTION 1"1)

dditional director to !old oice up to next >M"

oard not to appoint a person as additional director %!o ailsto $et elected in a $eneral meetin$"

n alternate director or a director cannot act as alternate oranot!er director"

director may act in dual capacity or !imsel and analternate or any ot!er director"

Alternate director for an independent director s!ould *e5ualified for appointment as an independent director

lternate director to vacate oice i t!e ori$inal directorreturns to India

Causal vacancy o a director appointed by a company in$eneral meetin$ may be illed at oard meetin$

• 1 1 By - Ankit Singh B.Com, CS (Final), MBA (IB)


12/32

DISQU LIFIC TIONS FOR PPOINTMENT

OF DIRECTOR – SECTION 1"4

Additional dis5ualifications over and a*ove section& Act(

Order passed by t!e 8ribunal disqualiyin$ a personor appointment"

)erson convicted of t!e offence dealin it!related part" transactions durin t!e lastprecedin = "ears'

Person convicted o any oence and sentenced to

imprisonment or ? years or more"



13/32

o person %!o is or !as been a director o a

company %!ic!;

a+ @as not iled inancial statements 0 annualreturns for t!ree "ears?

a+ @as ailed to repay deposits, redeemdebentures, interest t!ereon or ailed to paydividend declared and suc! failurecontinues for one "ear or more

S!all be eli$ible to be reappointed as adirector in t!e same compan" or an"ot!er compan" for a period of = "ears'



14/32

NUMBER OF DIRECTORSIPS (SEC 1"!)

o person to !old oice in more t!an in 2( companies att!e same time includin$ alternate directors!ip and

directors!ip in private companies' Maximum 1( public companies includin$ private

companies %!ic! are eit!er !oldin$ or subsidiary o apublic company"

Only directors!ip in companies incorporated outside &ndiaexcluded"

Mem*ers; *" special resolution; ma" specif" lessernum*er'

As per Clause 2 of 4istin Areement

*a+ person s!all not serve as an independent director inmore t!an seven listed companies

*b+ A8' in any listed company can serve as an independentdirector in not more t!an t!ree listed companies



15/32

#xcess t!an speciied !ere to *e reulari@edit!in one "ear from commencement of t!e Act"

/OC and company to be inormed about resi$nationas a director *in case o excess in number+"

Company to inorm t!e resi$nation to /oC in 8ormDIR-1& and post t!e inormation on its %ebsite, iany

Resination o a director or compliance %it! t!e

limits is effective immediatel" on despatc! o lettero resi$nation"



16/32

DUTIES OF DIRECTORS (SECTION

1"")

Similar to B Companies ct, 2((

'uties o 'irectors are as under;

a+ director o a company s!all act in accordance %it!

t!e company7s rticles"

b+ director o a company s!all act in $ood ait! in order

to promote t!e ob:ects o t!e company or t!e beneit

o its members as a %!ole and in t!e best interests o

t!e company, its employees, t!e s!are!olders, t!e

community and t!e environment"

c+ director o a company s!all exercise !is duties %it!

due and reasonable care, s6ill and dili$ence and s!all

exercise independent :ud$ement" • 1 6 By - Ankit Singh B.Com, CS (Final), MBA (IB)


17/32

d+ director o a company s!all not involve in a situationin %!ic! !e may !ave a direct or indirect interest t!atconlicts or possibly may conlict, %it! t!e interest ot!e company"

e+ director o a company s!all not ac!ieve or attempt toac!ieve any undue $ain or advanta$e eit!er to !imsel

or !is relatives, partners or associates and i suc!director is ound $uilty o ma6in$ undue $ain, !e s!allbe liable to pay an amount equal to t!at $ain to t!ecompany"

+ director o a company s!all not assi$n !is oice andany assi$nment so made s!all be void"

$+ 'irector contravenin$ is punis!able %it! ine minimum /s 1 la6!. maximum /s 5 la6!



18/32

$ C TION OF OFFICE OF DIRECTOR (SEC

1"7)

Additional 7rounds(

'irector absentin$ !imsel rom all meetin$s o oard !eld durin$a period o 12 mont!s it! or it!out leave of a*sence'

'irector convicted *" a court of an" offence and sentenced toimprisonment or not less t!an mont!s"

Note( T!e office to *e vacated even if !e !as filed an

appeal aainst t!e order of suc! Courtecomes disqualiied by an order o Court08ribunal

@e, !avin$ been appointed as director by virtue o !is !oldin$ anyoice or employment in t!e !oldin$, subsidiary or associate

company ceases to !old suc! oice or ot!er employment in t!ecompany

Penal provisions en!anced includin$ imprisonment"



19/32

RESIGN TION OF DIRECTOR (SECTION

1"%)

oard to taBe note of resination %!en received in

%ritin$ and inorm /OC and include in t!e 'irectors7

/eport"

Director to forard cop" of resination it! detailed

reasons for resination to ROC it!in 30 da"s'

/esi$nation to ta6e eect rom t!e date o receipt o t!enotice by t!e company or t!e date speciied by t!e director

!ic!ever is later "

8!e company to inorm /oC t!e resi$nation o director in

8orm DIR , 1& %it!in 3( days and post t!e intimation onits e*site i any

)romoters or in t!eir a*sence; t!e Central 7overnment

to appoint minimum directors if all directors resin'



20/32

REMO$ L OF DIRECTORS (SECTION 1"9)

company may, by ordinary resolution, remove a director

#pecial notice required o any resolution to remove adirector or appoint some one in !is place upon removal"

Company to send copy o t!e Special notice to t!e director

Company to send representation, i any, received rom

director to members or to be read out at t!e meetin$" 'irector removed s!all not be reappointed as director by

t!e oard"

8!e directors appointed accordin to principle of

proportional representation or *" t!e Tri*unal under#ection &2& /oppression and mismanaement cannot

*e removed'



21/32

REGISTER OF DIRECTORS & MPS ND

TEIR S REOLDING (SECTION 17#)

#very company to 6eep at its re$istered oice a re$ister

o its directors and M)s containin$ various particularsas speciied under /ule 1? o t!e Companies

*ppointment and Dualiication o 'irectors+ /ules, 2(1)

8!e Company to include in t!e said /e$ister details o

securities !eld by 'irectors and M)s

*a+ in t!e company

*b+ in its !oldin$ company

*c+ in its subsidiaries*d+ in its co


22/32

REGISTER OF DIRECTORS & MPS ND

TEIR S REOLDING (SECTION 17#)

8!e /e$ister is open or inspection byMembers and t!ey !ave t!e ri$!t to ta6e

extracts t!ererom and Copies t!ereo.

8!e /e$ister to be 6ept open at every >M

and is accessible to any person attendin$ t!e

meetin$



23/32

E-$OTING



24/32

$OTING TROUG ELECTRONIC ME NS (SEC

1#%)

Section 1(E o Companies ct, 2(13 and Clause 35

o t!e #quity S!are -istin$ $reement $overn eovernment !as under /ule 2( o t!e

Companies *Mana$ement and dministration+ /ules,

2(1), prescribed t!e procedures or e


25/32


1#%)

#


26/32


1#%)

Scrutini9er to unbloc6 t!e votes ater e


27/32

CL USE '!B OF LISTING GREEMENT (E-

$OTING)

#


28/32

QUERIES ON E-$OTING

*1+ &s e


29/32

QUERIES ON E-$OTING

E+ Can a s!are!older %!o !as not voted durin$ e


30/32

QUERIES ON E-$OTING

13"Can s!are!olders pass t!e resolutions on s!o% o

!ands at t!e meetin$F No

1)"&s it a must t!at C!airman s!ould order a Poll to be

ta6en at t!e meetin$ to enable members %!o could not

vote durin$ e


31/32

QUERIES ON E-$OTING

b+ &n t!e instructions or eM date can neit!er vote on t!e e


32/32

T9AN $OF

• 3 2

Appointment and Qualification Director

Documents

Transcript of Appointment and Qualification Director