Chapter: Audit Committee and Corporate Governance – Amendments (Nov 19 / May 20)

Compiled By – CA HARSHAD JAJU for CA FINAL AUDIT

Heading – Role of Audit Committee
Reviewing the utilisation of loans and/or advances from/investment by holding company in
the subsidiary exceeding Rupees 100 crore or 10% of the asset size of the subsidiary,
whichever is lower including existing loans/advances/investments as on April 01, 2019

Heading – Verification of Composition of Board

1. Board of Directors of Top 500 Listed entities shall have atleast one independent Woman
Director by April 01, 2019 and the Board of Directors of Top 1000 Listed entities shall
have atleast one independent Woman Director by April 01, 2020
2. Top 500 and 1000 entities are based on market capitalisation based on market
capitalisation, as at the end of the immediate previous financial year.
3. No listed entity shall appoint or continue directorship of a person as Non-Executive
Director who has attained the age of 75 Years unless Special Resolution is passed to that
effect on a
4. The directors of listed entities shall comply with following conditions in respect to
maximum directorship including any alternate directorship that can be held by them at
any point of time-
a. A person shall not be a director for not more than 8 Listed Companies w.e.f. April
01, 2019 and not more than 7 Listed Entities w.e.f. April 01, 2020
b. Provided that a person shall not serve as independent director for more than 7
Listed Entities
5. Notwithstanding above, any person who is serving as Whole Time Director / Managing
Director in any listed entity shall serve as an independent director in not more than 3
listed entities
Number of listed entities shall be only those whose equity shares are listed on a stock
Exchange
6. Board of Directors of Top 1000 Listed Entities (w.e.f. April 01, 2019) and the Top 2000
Listed Entities (w.e.f. 2020) shall comprise of not less than 6 directors.
Top 1000 and 2000 entities are based on market capitalisation based on market
capitalisation, as at the end of the immediate previous financial year.

Heading – Approval of Remuneration of Directors

1. Fees / Compensation fixed by Board of Directors for Non-Executive Directors including
Independent Directors requires previous approval of shareholders in General Meeting –
However, W.e.f. April 01, 2019, approval of shareholders by special resolution shall be
obtained every year, in case the annual remuneration payable to single non-executive
director exceeds 50% of the total annual remuneration payable to all non-executive
directors.
2. Fees/Compensation payable to executive directors who are promoters or members of
the promoter groups, shall be subject to the approval of the shareholders by special
resolution in general meeting, if-
a. The annual remuneration payable to such executive director exceeds Rs. 5 crore or
2.5% of the net profits of the listed entity, whichever is higher; or

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 b. Where there is more than one such director, the aggregate annual remuneration to
such directors exceeds 5% of the net profits of the listed entity:
Provided that the approval shall be valid only till the expiry of the term of such director.
Net profits shall be calculated as per section 198 of Companies Act, 2013

Heading – Obligations with respect to employees including senior management and key
managerial persons, directors and promoters
1. Quorum of Board meeting of Top 1000 Listed Entities w.e.f. April 01, 2019 and the Top
2000 Listed Entities w.e.f. April 01, 2020 shall be 1/3rd of its total strength or 3 directors,
whichever is higher, including atleast one independent director.
2. Participation of directors through video conferencing or by audio-visual means shall also
be counted for the purpose of such quorum.
3. The directors of listed entities shall comply with the following conditions with respect to
the maximum number of directorship, including any alternate directorship that can be
held by them at any time :
a. A person shall not be a director in more than 8 listed entities w.e.f April 01, 2019
and in not more than 7 listed entities w.e.f April 01, 2020
Provided that the same person shall not serve as an independent director in more
than 7 listed entities
b. Notwithstanding above, any person who is serving as a whole time director /
managing director in any listed entity shall serve as an independent director in
not more than 3 listed entity.
Number of listed entities shall be only those whose equity shares are listed on a stock
Exchange

Heading – Stakeholders Relationship Committee

1. Purpose - To look into various aspects of shareholders, debenture holders and other
security holders
2. Chairperson – Non-Executive Director and to attend general meeting to attend security
holders queries
3. Composition – Atleast 3 directors, with atleast 1 being an independent director
4. Meeting – Shall meet atleast once in a year.

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