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Query:Sub-section 6 of the Section 149 of Companies Act 2013 provides for meaning of independent Director and clause (c) & (d) of sub-section 6 of section 149 of Co. Act, 2013 provides that Independent Director or his relatives has or had no pecuniary relationship or transaction with Company, its holding, subsidiary or associate company etc. Please explain the meaning of “Pecuniary Relationship” and “materiality” in this regard.
Answer:Ministry of Corporate Affairs has in its Report of Expert Committee on Management and Board Governance has explained that the term material pecuniary relationship should also be clearly defined for the purpose of determining whether the director is independent or not.
The concept of “Materiality’ is relevant from the recipient’s point of view and not from that of the company. The term ‘material’ needs to be defined in terms of percentage.
In view of the Committee, 10% or more of recipient’s consolidated gross revenue / receipts for the preceding year should form a material condition affecting independence.
For determining materiality of pecuniary relationship, transactions with an entity in which the director or his relatives hold more than 2% shareholding, should also be considered.
E-payment of DVAT & CST tax for Jan: 21.02.2016
Payment of ESI of Jan: 21.02.2016
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