Section 178 and Reg 19 of LODR Nomination and Remuneration Committee meeting
Section: Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR)
Meeting: Nomination and Remuneration Committee Meeting
Applicability: The Nomination and Remuneration Committee is mandatory for listed companies and any other company that has a paid-up share capital of ten crore rupees or more, or a turnover of one hundred crore rupees or more or in case of any company which has, in aggregate, outstanding loans or borrowings or debentures or deposits exceeding fifty crore rupees or more.
Timeline: The committee should meet at least once in a year, and not more than four months shall elapse between two consecutive meetings.
Exemption: There are no exemptions from the requirement of holding a Nomination and Remuneration Committee Meeting.
Penalty: The penalty for non-compliance can range from INR 1,00,000 to INR 5,00,000, and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with a fine of not less than INR 25,000 but which may extend to INR 1,00,000 or with both.
Reporting Authority: The minutes of the committee meeting should be placed before the Board of Directors at its subsequent meeting. The Annual Report of the company should disclose the composition of the committee, the details of the meetings held, and the remuneration policy of the company.
Other: The purpose of the Nomination and Remuneration Committee is to identify persons who are qualified to become directors or who may be appointed in senior management positions and to recommend their appointment or removal. The committee is also responsible for formulating the criteria for determining qualifications, positive attributes, and independence of a director, and for recommending to the Board a policy relating to the remuneration for the directors, key managerial personnel, and other employees.
