sebi:BS/AO-56/2008
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Facts / Headnote
Adjudication proceedings disposed of without penalty
Provisions invoked
- s. 4A
- s. 23
- s. 2(41)
Parties
- NALCO
Holding
The adjudication proceedings against NALCO for alleged violation of Clause 49 I (A) and Clause 49 II (A) during the impugned period were disposed of with no penalty, holding the non-compliance was not attributable to the company.
Full text
2 regard to setting up of an independent audit committee. In view of the alleged failure on the part of the noticee to comply with the provisions of Clause 49 of the listing agreement, adjudication proceedings were initiated in terms of provisions of Section 23 I of the SCRA. NOTICE AND REPLY
3 The company agrees to comply with the following provisions: I. Board of Directors (A) Composition of Board (i) The Board of directors of the company shall have an optimum combination of executive and non-executive directors with not less than fifty per cent of the board of directors comprising of non-executive directors. (ii) Where the Chairman of the Board is a non-executive director, at least one-third of the Board should comprise of independent directors and in case he is an executive director, at least half of the Board should comprise of independent directors. (iii) For the purpose of the sub-clause (ii), the expression ‘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; b. is not related to promoters or persons occupying management positions at the board level or at one level below the board; c. has not been an executive of the company in the immediately preceding three financial years; d. is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following: (i) the statutory audit firm or the internal audit firm that is associated with the company, and (ii) the legal firm(s) and consulting firm(s) tha
4 Explanation - For the purposes of the sub-clause (iii): a. “Associate” shall mean a company which is an “associate” as defined in Accounting Standard (AS) 23, “Accounting for Investments in Associates in Consolidated Financial Statements”, issued by the Institute of Chartered Accountants of India. b. “Senior management” shall mean personnel of the company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management one level below the executive directors, including all functional heads. c. “Relative” shall mean “relative” as defined in section 2(41) and section 6 read with Schedule IA of the Companies Act, 1956. (iv) Nominee directors appointed by an institution which has invested in or lent to the company shall be deemed to be independent directors. Explanation: “ ‘Institution’ for this purpose means a public financial institution as defined in section 4A of the Companies Act, 1956 or a ‘corresponding new bank’ as defined in section 2(d) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 or the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 both Acts.”
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Source: SecMarx — sebi:BS/AO-56/2008. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.