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Provisions of Cos Act 2013 and SEBI with respect to woman director in board of companies

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ABCAUS Excel for Chartered Accountants

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Chartered Accountants

As per press release of PIB dated 08-08-2014, the Minister of State for Finance, Smt. Nirmala Sitharaman in written reply to a question in Lok Sabha today has stated,

“Securities and Exchange Board of India (SEBI), vide its circular No. CIR/CFD/POLICYCELL/2/2014 dated April 7, 2014 has mandated that the Board of Directors of the listed company shall have atleast one woman director on its Board. As per para 4.1 of the said circular, the deadline for implementation of this directive is October 1, 2014”

However, It should be noted that provisions related to the appointment of woman directors are currently prescribed by SEBI as well as the Companies Act  2013

(a) Provisions related to woman director as per SEBI
The relevant parts of the above mentioned circular of SEBI are as under:

Sub: Corporate Governance in listed entities - Amendments to Clauses 35B and 49 of the Equity Listing Agreement

Part-B
49 Corporate Governance
II. Board of Directors
A. Composition of Board

1. The Board of Directors of the company shall have an optimum combination of executive and non-executive directors with at least one woman director and not less than fifty percent of the Board of Directors comprising non-executive directors. Read Full Circular >>

(b) Provisions related to woman director as per Companies Act, 2013
Section 149(1) requires at least one women director for not only for listed companies but also for such non listed companies as prescribed.

Rule 3 of the companies (Appointment and Qualification of Directors) Rules 2014, prescribes the class/classes of the companies to have at least one woman director as under:

3. Woman director on the Board.- The following class of companies shall appoint at least one woman director-
(i) every listed company;
(ii) every other public company having -

(a) paid–up share capital of one hundred crore rupees or more; or

(b) turnover of three hundred crore rupees or more:

Provided that a company, which has been incorporated under the Act and is covered under provisions of second proviso to sub-section (1) of section 149 shall comply with such provisions within a period of six months from the date of its incorporation:
Provided further that any intermittent vacancy of a woman director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy whichever is later.

SEBI-Table of Fine for Non Compliance of Clause 49(II)(A)(1) Click Here >>

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