The Institu te of Internal Au ditors-India 31-10-2003 Page 1 of 7 SEBI- Amendments to Clau se 49 of the Listing agreement Backgrou nd The SEBI had constituted a Committee on Corporate Governance under the Chairmanship of Shri N. R. Narayana Murthy to further improve the standards of corporate governance in India. Based on this report, SEBI vide its circular dated 26th August 2003, has introduced some major amendments to Clause 49 of the Listing Agreement. The significant features of these amendments may be summarised as under: Broadening of the definition of independent director Fixing of norms relating to Non-executive directors' compensation and disclosures Additional duty on the independent director to periodically review the legal compliance reports prepared by the Company and steps taken by the Company to improve. Obligation on the Board of Directors to lay down a Code of Conduct for all Board members and senior management of the Company. Fixation of the term of Non-executive Directors to a maximum of nine years Requirement of all members of the Audit Committee being financially literate Increase in the powers of the Audit Committee Additional duty on the Audit Committee to review of certain information by the Audit Committee Requirements relating to Audit reports and Audit Qualifications New Requirement of Whistle Blow er Policy Applicability of the requirements to subsidiary companies relating to composition of the Board of directors, laying of minutes of the Board meeting before the Board of the holding company and additional requirement to be included in the Board report of the Holding Company. Disclosure of contingent liabilities Additional Disc...
