Amendments in Schedule IV: Code for Independent Directors

MCA vide Notification dated 5^th July, 2017, amended Schedule IV of the Companies Act, 2013. The amendments are as follows:

Schedule	Earlier	Amended
Paragraph III, sub-para (12)	The independent directors shall— acting within his authority, assist in protecting the legitimate interests of the company, shareholders and its employees;	The independent directors shall— acting within their authority, assist in protecting the legitimate interests of the company, shareholders and its employees
Paragraph VI, sub-para (2)	An independent director who resigns or is removed from the Board of the company shall be replaced by a new independent director within a period of not more than one hundred and eighty days from the date of such resignation or removal, as the case may be.	An independent director who resigns or is removed from the Board of the company shall be replaced by a new independent director within a period of not more than three months from the date of such resignation or removal, as the case may be.
Paragraph VII, sub-para (1)	The independent directors of the company shall hold at least one meeting in a year, without the attendance of non-independent directors and members of management;	The independent directors of the company shall hold at least one meeting in a financial year, without the attendance of non-independent directors and members ofmanagement;
Paragraph VIII	Evaluation mechanism: (1) The performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. (2) On the basis of the report of performance evaluation, it shall be determined whether to extend or continue the term of appointment of the independent director.	Paragraph VIII is same. Following note is inserted after Paragraph VIII: 'Note: The provisions of sub-paragraph (2) and (7) of paragraph II*paragraph IV*, paragraph V*' clauses (a) and (b) of sub-paragraph (3) of paragraph VII and paragraph VIII shall not apply in the case ofa Governmentcompanyasdefinedunderclause(45)ofsection2oftheCompanies Act,20|3 (18 of 2013), if the requirements in respect of mattersspecified in these paragraphs are specified by the concerned Ministries or Departments of the Central Government or as the case may be the State Governments and such requirements are complied with by the Government companies."

* Paragraph II: Role and Functions of Independent Directors

   Paragraph IV: Manner of Appointment of Independent Directors

   Paragraph V:  Re-Appointment of Independent Directors