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Determination of independence of director

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Sandeep Saraf

Senior Manager

25 Points Posted on 15 July 2013

Hi All

Was looking for answers if a Director who is a Executive Director in a Subsidiary can be appointed as a Independent Director in the Holding Company, which is listed.

Other facts of the case.

Ø He would be a Non-Executive Director in Listed Company, by this it means he would not be involved with the day to day affair of the holding Company and hence cannot influence the decision making in the Holding Company

Ø He is not related to the Promoter of the Company

Ø He is not a material supplier/service provider or customer of Holding Company

Ø He has not been the executive of the Holding Company in the preceding 3 financial years.

He is not holding shares in the Holding Company, which can be a factor to decide Independence or not.

Regards

Sandeep

Replies (1)

CS SIDDHARTHA BANIK

COMPANY SECRETARY

683 Points Posted on 16 July 2013

Listing agreement clearly provides as followes:

‘independent director’ shall mean a non-executive director of the company who:

a. apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the director"

Therefore, an executive direor ina subsidiary co. can not be appointed as ID.

Thanks,

CS Siddhartha Banik