Doing Business in India - RSM Austria

The meetings of the board are required to be held at least four times a year,
with a maximum time gap of four months.
A director shall not be a member in more than 10 committees or act as
Chairman of more than 5 committees across all companies in which he is a
director. Furthermore it should be a mandatory annual requirement for
every director to inform the company about the committee positions he
occupies in other companies and notify changes as and when they take
place.
The board is required to lay down a code of conduct for all board members
and senior management of the company and the annual report is required
to contain a declaration of its compliances duly signed by CEO.
The Board of Directors should set up two mandatory committees to be
called Audit Committee and Shareholders Grievance Committee.
Audit committee is required to be set up with minimum three directors as
members and two thirds of the members of audit committee should be
independent directors and chairman of the audit committee is necessarily
required to be an independent director. The Chairman of the Audit
Committee shall be present at Annual General Meeting to answer
shareholder queries.
The audit committee should meet at least four times in a year and not
more than four months should elapse between two meetings. Broad term
of reference has been set out for the working of the audit committee.
At least one independent director on the Board of Directors of the holding
company is required to be director on the board of directors of a material
non listed Indian subsidiary company.
A summary of transactions with related parties in the ordinary course of
business is required to be placed periodically before the audit committee.
Where in the preparation of financial statements, a treatment different
from that prescribed in an Accounting Standard has been followed, the
fact shall be disclosed in the financial statements, together with the
management’s explanation as to why it believes such alternative
treatment is more representative of the true and fair view.
The company is required to lay down risk assessment and minimization
procedures.
Remuneration paid to directors and all other pecuniary relationship of
director with the company is required to be disclosed in the corporate
governance section of the annual report.
Corporate governance section has to include a section of management
perception and analysis of the threats, opportunities, risks, concerns,
outlook, etc.
A board committee under the chairmanship of a non-executive director
shall be formed to specifically look into the redressal of shareholder and
investors complaints like transfer of shares, non-receipt of balance sheet,
46
DOING BUSINESS IN INDIA