CS Rashi Jain
(Practicing Company Secretary @ RASHI JAIN & ASSOCIATES)
(1295 Points)
Replied 18 March 2020
An independent director in relation to a company, means a director other than a managing
director or a whole-time director or a nominee director,—
(a) who, in the opinion of the Board, is a person of integrity and possesses relevant
expertise and experience;
(b) (i) who is or was not a promoter of the company or its holding, subsidiary or
associate company;
(ii) who is not related to promoters or directors in the company, its holding,
subsidiary or associate company;
(c) who has or had no pecuniary relationship with the company, its holding,
subsidiary or associate company, or their promoters, or directors, during the two
immediately preceding financial years or during the current financial year;
(d) none of whose relatives has or had pecuniary relationship or transaction with
the company, its holding, subsidiary or associate company, or their promoters, or directors,
amounting to two per cent or more of its gross turnover or total income or fifty lakh rupees
or such higher amount as may be prescribed, whichever is lower, during the two
immediately preceding financial years or during the current financial year;
(e) who, neither himself nor any of his relatives—
(i) holds or has held the position of a key managerial personnel or is or has
been employee of the company or its holding, subsidiary or associate company in
any of the three financial years immediately preceding the financial year in which
he is proposed to be appointed;
(ii) is or has been an employee or proprietor or a partner, in any of the three
financial years immediately preceding the financial year in which he is proposed to
be appointed, of—
(A) a firm of auditors or company secretaries in practice or cost
auditors of the company or its holding, subsidiary or associate company; or
(B) any legal or a consulting firm that has or had any transaction
with the company, its holding, subsidiary or associate company amounting
to ten per cent or more of the gross turnover of such firm;
(iii) holds together with his relatives two per cent or more of the total
voting power of the company; or
(iv) is a Chief Executive or director, by whatever name called, of any non-
profit organisation that receives twenty-five per cent or more of its receipts from
the company, any of its promoters, directors or its holding, subsidiary or associate
company or that holds two per cent or more of the total voting power of the
company; or
(f) who possesses such other qualifications as may be prescribed.
he must satisfy all the conditions of this section
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