BGR MINING WAS FINED RS 18 LACS FOR NON-CONSTITUTION OF REMUNERATION AND NOMINATION COMMITTEE

BGR MINING & INFRA LIMITED VS ROC, HYDERABAD-

FACTS OF THE CASE

ROC,(Hyderabad),  found that BGR Mining & Infra Ltd. failed to disclose the constitution of its Nomination and Remuneration Committee in the Board’s Report, as required under Section 134(3)(e) read with Section 178(1) of the Companies Act, 2013, for financial years 2016-17, 2017-18, and 2018-19

REFLECTED  IN THE COVER PAGE OF ANNUAL REPORT

In response of Volition, Company contended that the committee was mentioned on the cover page of the Annual Report.

SECTION 178(1) OF THE COMPANIES ACT ,2013

Section 178(1) mandates that every listed public company—and such other prescribed classes of company—must constitute a Nomination and Remuneration Committee comprising at least three directors, with at least half being independent, and the Chairperson must not chair the Committee.

SECTION 134(3)(E) OF THE COMPANIES ACT ,2013

Section 134(3)(e) requires a company’s Board’s Report to include its policy on directors’ appointment and remuneration, including criteria for determining qualifications, independence, and other related matters.

ROC, Hyderabad, imposed a penalty of ₹9 lakh on the company, ₹7.5 lakh on its directors, and ₹1.5 lakh on the Company Secretary.

KEY HIGHLIGHTS OF THIS CASE

This case underscores the importance of strict compliance with corporate governance mandates:

Public companies (and others as prescribed) must formally constitute and clearly disclose the composition and policy framework of the Nomination and Remuneration Committee in their Board’s Report.

Mere mention on the cover page or in other parts of the annual report doesn’t satisfy Section 134 disclosure requirements if not included specifically in the Board’s Report.

R V SECKAR , FCS , LLB 79047 19295