Listing agreement not in consonance with the companies act,

This query is : Resolved

Preety Gupta (Querist)
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01 October 2013 Currently, clause 49 of the listing agreement requires that a board of a listed company will have an optimum combination of executive and non-executive directors with not less than 50% of the board comprising non-executive directors. It also provides that where the Chairman of the board is a non-executive director, at least one-third of the board should comprise independent directors. In case the Chairman is an executive director, at least half of the board should comprise independent directors.

The Companies Bill states that every listed company will have atleast one-third of total number of directors as independent directors, with any fraction to be rounded off as one. Unlike the listing agreement, the Companies bill does not contain any specific requirement of 50%independent directors if the Chairman of the board is an executive director.

Query: within what time can should a public limited listed company appoint another Independent Director, if at present it has 4 directors, Chairman as Executive & Promoter and one of its Independent Director resign from the Board reducing the Composition of the Board from 4 to 3.

As per the Companies Act, 2013 an existing company has a transition period of one year to comply but as there is no non-compliance of the Companies Act, 2013.

Also confirm as to what is the transition period to comply with the non-compliance of Listing Agreement.

Ajay Mishra

Ajay Mishra (Expert)
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01 October 2013 As per my understanding..........

You will complied the provision of Listing Agreement and not to the Companies Act.

The Listing agreement is prevail over Companies Act, 2013.

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