Escolar Documentos
Profissional Documentos
Cultura Documentos
Abbreviation:
BOD/Board - Board of Directors
CA 2013 - Companies Act, 2013 (which includes erstwhile Companies Act, 1956)
KMP - Key Managerial Personnel
Disclaimer: This document is based on our internal research and understanding. It is notified that the author and
co-author & any other person related to him shall not be responsible for any damage or loss of any action taken
based on this presentation. It is suggested to seek professional advice before initiating any action. The views and
opinions expressed in this presentation are those of the author of this document and do not necessarily represent
views of any organisation(s) to which they belongs or had belonged in past.
PREFACE:
Report on “Committee on Corporate Governance” dated1 October 5, 2017 was made available on public domain by
SEBI, this report comprised of detailed recommendation made by the Kotak Committee, proposing various
amendments in the provisions of SEBI LODR Regulations, with an aim to make a Corporate Governance practice in
Indian listed entities more transparent and effective. Based on the recommendation made by the Kotak Committee
on Corporate Governance and through consultation paper, various amendments which were proposed by the
Committee were approved by the SEBI in its Board meeting held this Financial Year. Financial Year 2018-19 was
complete package of amendments, whereby Kotak Committee’s recommendation were made effective in SEBI LODR
Regulations vide various notification, notifying amendments in existing SEBI LODR Regulations and through circulars.
Recommendation of Kotak Committee will come into effect into various stages, so as to enable the listed entities to
settle down with the amended provisions. With this attached docket, we have provided detailed analysis on certain
amendments as notified through various notifications and circular in SEBI LODR Regulations. This docket is divided into
various chapters, based on the nature of the amendments, to ensure that each portion of the amendments are broadly
categorised into various section for ease of understanding. This docket shall benefit you to understand the compliance
requirements for professional working in listed entities / providing their services to listed entities, and it will be also
useful for the students appearing for their professional level of ICSI, as this docket covers the major amendments of
SEBI LODR which were notified in the Financial Year 2018-19, as notified till the date of issue of this docket.
CONTENT OF THIS DOCKET ARE BASED ON FOLLOWING AMEDMENTS
SEBI vide its notification dated2 May 9, 2018 lead to amendment in existing provisions of SEBI LODR Regulations as
recommendation provided by the Committee in its report. Amendment shall come into effective at various intervals,
to ensure that the listed companies shall get enough time to settle down with the requirement of amendments.
SEBI vide its notification dated3 September 6, 2018 inserted the provision w.r.t. listing of Security Receipts on stock
exchanges, amendment in LODR Regulations were notified in order to bring its provisions in line with SEBI (Issue and
Listing of Securitized Debt Instruments and Security Receipts) Regulations, 2008. Chapter VIII-A has been inserted vide
this notification which shall be applicable to listed companies having its Security receipts listed on stock exchanges.
Further, SEBI vide its notification dated4 November 16, 2018 further made an amendment in SEBI LODR regulations,
streamlining the process w.r.t. reclassification of promoter and promoter group. Regulation 31A which deals with
reclassification of promoter and promoter group were repealed with the new set of regulations thereby making some
key amendments in the process flow, compliance requirements, restrictive clause towards such reclassification.
SEBI vide its Circular dated5 February 08, 2019 have introduced new concept of Annual Secretarial Compliance report,
which shall be comprised of all the compliances w.r.t. SEBI Listing regulations, circular, notices, etc. Secretarial
Compliance report shall be certified by Practising Company Secretary and the same shall be submitted to stock
exchange within 60 days from closing of financial year.
_____________________
1Reportof the COMMITTEE ON CORPORATE GOVERNANCE: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/oct-
2017/1509102194616.pdf#page=1&zoom=auto,630,870
2Notification No. SEBI/LAD-NRO/GN/2018/10: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/may-
2018/1525928357601.pdf#page=1&zoom=auto,-24,792
3Notification No. SEBI/LAD-NRO/GN/2018/30: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/nov-
2018/1542004010426.pdf#page=2&zoom=auto,-24,403
4Notification No. SEBI/LAD-NRO/GN/2018/47: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/nov-
2018/1542886228040.pdf#page=1&zoom=auto,-24,792
5Circular No. CIR/CFD/CMD1/27/2019: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/feb-
2019/1549621039496.pdf#page=2&zoom=auto,-23,705
INDEX
Contents
CHAPTER 1: RECOGNITION TO COMPANY SECRETARIES ............................................................................................ 5
CHAPTER 2: BOARD OF DIRECTORS .......................................................................................................................... 10
CHAPTER 3: COMMITTEES OF BOARD ...................................................................................................................... 17
CHAPTER 4: RELATED PARTY TRANSACTION ............................................................................................................ 20
CHAPTER 5: FINANCIAL STATEMENT ........................................................................................................................ 22
CHAPTER 6: AUDITORS ............................................................................................................................................. 27
CHAPTER 7: OTHER AMENDMENTS .......................................................................................................................... 28
CHAPTER 8: SCHEDULE ............................................................................................................................................. 30
CHAPTER 9: RECLASSIFICATION OF PROMOTER AND PROMOTER GROUP ............................................................... 37
CHAPTER 10: ISSUE OF SECURITY RECEIPTS .............................................................................................................. 39
AMENDMENT
KMPs such as Company Secretary and Chief Financial Officer are now included in the definition of Senior Management.
Hence, all the roles and responsibilities of Senior Management which are defined at various instances under LODR
Regulations will become applicable for Company Secretary and CFO by virtue of amendment in definition of Senior
Management.
IMPACT
Even though Company Secretary of the listed companies, who were recognized as Compliance Officer of the listed
entities, now will have greater position in the management and decision-making authority w.r.t. compliances with
inclusion of CS and CFO in definition of Senior management. Since Senior management have been entrusted with roles
and responsibilities under various regulations, which may or may not be applicable on Compliance Officers before the
amendment (and under various other SEBI Regulations), but with the amendment in definition, CS and CFO shall
possess additional responsibility towards adhering with Company’s code of conduct, mandatory disclosure to the
management in case of any material financial and commercial interest in transaction of the Company.
Nomination & Remuneration Committee of the listed entities are entrusted with the responsibilities of recommending
the policy to Board of the company, related to the remuneration of the Directors, KMP and other employees.
Committee is also responsible to identify an individual who qualifies to become director of the listed entities and who
may be appointed at senior management, which was restricted only to senior management and KMPs like CS & CFO
were excluded. However, with the inclusion of CS and CFO in the definition of senior management, NRC shall also
identify an individual who can be appointed as CS and CFO at senior level.
AMENDMENT
With an insertion of Regulation 24A, the secretarial audit will become applicable on all the material unlisted
subsidiaries of listed entities, incorporated within India, in addition to the secretarial audit by the listed entities (which
were required pursuant to Section 204 of CA 2013). Therefore, material unlisted subsidiaries of Indian listed entities,
incorporated outside India are not covered under Regulation 24A for the purpose of conducting Secretarial Audit.
Most of the notified regulations will come into effect from April 1, 2019. But since secretarial audit by material unlisted
subsidiaries to be conducted from the financial year ending on March 31, 2019, it shall become applicable from the FY
2018-19 and therefore, other procedure like appointment of secretarial auditor, fixing their remuneration and
commencement of audit process should be initiated much before the applicability of this amendment and therefore
material unlisted subsidiaries are required to ensure the compliance of new Regulation 24A even before its
enforcement.
IMPACT
Regulation 15 of SEBI LODR exempts SME listed companies from compliance requirement w.r.t. Corporate
Governance. SME listed companies are also exempted with the requirement of Regulation 24A (Secretarial Audit).
Therefore, by virtue of amendment, secretarial audit should not be applicable for the SME listed companies and its
material unlisted subsidiaries. However, with the interpretation of Regulation 15(3), Companies Act 2013 shall still
prevails over the SEBI LODR Regulation in case if the correspondence provisions under CA 2013 are mandatory to
follow the compliance to the extent it is applicable, where LODR Regulations provides for an exemption. Hence, SME
Listed companies and not its unlisted material subsidiaries, are still required to comply with Secretarial Audit and to
annex the report in Form MR – 3.
Facts of such amendments also rest with the requirement of auditor, where separate auditors for listed (other than
SME listed entities) and its material subsidiaries are not specified. Hence, its gives leverage to the management of
listed companies to continue with the secretarial audit of its material subsidiaries by the same auditor of the listed
companies.
Further, effective date of Regulation 24A is immaterial for the appointment of secretarial auditor by the unlisted
material subsidiaries of listed entities, since the appointment process of secretarial auditor to be followed before the
implementation of the LODR amendment Regulations, to avoid last minute challenge.
Legal Provisions CA 2013: Section 204 r/w Rl. 9 of Companies SEBI circular No. CIR/CFD/CMD1/27/2019
(Appointment & Remuneration of Managerial dated February 08, 2019.
Personnel) Rules, 2014
Link: https://bit.ly/2GCeuD1
SEBI LODR: Reg. 24A
Applicable from April 1, 2014 From the financial year ending on March 31,
2019
Applicability as (a) Every listed companies Every listed companies having its equity
per LODR (b) Material unlisted subsidiary(ies) of listed shares listed on stock exchange(s)
Regulations entities
Format Form MR – 3 (prescribed under Companies Annexure – A attached to the Circular (as per
Act, 2013) SEBI Circular)
Due Date for Auditor to submit the Audit Report to Within 60 days from closure of financial year
submission management which shall form part of Annual
Report
Terminology Requirement pertains to ensure the Requirement pertains to give adequate
compliance disclosure towards action taken by Regulators,
compliance w.r.t. Circulars issued from time to
time
Compliances Not required specifically. However, general Detailed disclosure about non-compliance
w.r.t. Circular / comments on any delay in submission or w.r.t. compliance requirement under Circular /
Notices inadequate compliance shall be provided. Notice, its deviation and remarks.
Regulators General comments shall be provided on any Detailed disclosure on action taken, violation,
action regulator action, unless it has major impact on monetary penalties / fines, against listed
business, then specific comments shall be entities / promoters / directors / material
provided. subsidiaries.
Continual Secretarial Audit is limited to the particular Continual disclosure on observations made by
Disclosure Financial Year. Disclosure for previous FY is PCS in previous year’s report, corrective action
not necessary. taken by management and comments of PCS
on such corrective steps taken.
3) Secretarial Audit Report and Secretarial Compliance Report can be issued by same person?
SEBI Circular does not mention any specific requirement to obtain Audit Report and Compliance
Report from different PCS. Therefore, there is no restriction as such.
6) Is there any requirement to approve the terms and remuneration to be paid to PCS for Secretarial
Compliance Report?
There is no requirement to approve the terms and remuneration to be paid to PCS for Secretarial
Compliance Report.
7) Are unlisted material subsidiaries are also required to submit Secretarial Compliance report?
Unlisted material subsidiaries are required to submit Secreatarial audit report only, and not Secretarial
Compliance Report. However, PCS is required to comment on the regulatory action taken against
material subsidiaries.
10) Is SME Listed Companies are also required to submit the ASC Report?
Circular was issued by SEBI pursuant to the Regulation 24A, which is exempted on SME Listed
companies. Therefore, SME Listed companies are not required to submit the ASC Report to the stock
exchange. However, more clarity on the same is expected.
IMPACT
Practising Company Secretaries will have crucial role in identifying the non-filing of financial results of such companies
where the Directors of the listed entities are on board of such default companies. However, this task of identifying the
disqualification becomes risk orient, in an event where the company had failed to file the financial results for
continuous three financial years, and that any directors resign from such company before the date of occurrence of
such default and respective eforms (DIR – 12) are not filed within due date, since this form can be filed at the later
date with the additional fees. Hence, due care needs to be taken and such certificates needs to be worked out based
on declaration / affidavit from directors (which can be treated as backup document).
Further, disqualification of director on other grounds as specified under Section 164 of CA 2013 and based on
debarment / disqualification declared by SEBI/SAT vide its order shall also be reviewed. Hence, this entire task can
become game changer for the listed companies.
1) He should not be a member of the “promoter group”: Even though regulation 16(1)(b)(iii) restrict an individual
from being an independent director, if he is related to promoters or directors of that listed company, provision
amended to make it more stricter, whereby an Independent Director shall not be a member of the “promoter
group”.
IMPACT
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 defines “promoter group” based on the
investment made by the promoter and immediate relatives of promoter in any body corporates above 20% of total
value and it goes to next layer whereby any such identified body corporate(s) have further investment of more than
20%. Hence, amendment with such small insertion of the words “promoter group” will have its impact on Directors to
maintain their independence during their entire tenure of directorships in listed entities.
2) He should not be a “Non-Independent Director” of any other company where any non-independent director of
this listed entity is an independent Director: An individual will be termed to be an independent in case if he is only
Independent Director (not a non-independent director) of any such company where any non-independent director
of the listed entity is an independent director.
For E.g.: Mr. “A” is Independent Director of ABC Limited. Mr. “B” is another Director than Independent Director of
ABC Limited. In case if Mr. B is an Independent Director of XYZ Limited and at the same time, Mr. A is also a director
of that Company (other than Independent Director), then Mr. A cease to be an Independent Director of ABC Limited.
IMPACT
Listed entities where there is cross directorship of Independent Director and Non-Executive Director between listed
entity and “another company”, then the management needs to restructure its board, to eliminate the cross
directorship of Independent Director and Non-Executive Director between listed entity and “another company”.
Expression “another company” will also covers the private and unlisted companies and therefore cross directorship to
be eliminated with private and unlisted companies as well.
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Clarification by SEBI
Above provision was notified on May 9, 2018 and it came into effective from October 1, 2018. Therefore, all the listed
companies were granted certain timeframe, i.e. upto October 1, 2018 to comply with the above-mentioned provision.
Thus, above provision will be applicable to existing directors and to new appointment/re-appointment as well. Further,
definition of independent director has been amended by inserting above mentioned provision, which shall come into
effective from its effect date irrespective of whether tenure of Independent Director is yet to be completed.
Effective Dates:
Both the above-mentioned provisions will come into effect from October 1, 2018. Hence lot of restructure in Board
constitution and therefore reconstitution in the Board committees is expected. Since the appointment and removal of
the Independent Director is time consuming event as it is subject to the approval from the members, hence listed
entities might end up starting with the process of restructuring their Board even before their effective date.
1
https://www.sebi.gov.in/sebi_data/commondocs/oct-2018/sebisundaraminformal_p.pdf
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
Insertion of new provision which makes it mandatory for the appointment of at least one Independent Woman
Director by the listed companies as per the timeframe specified in the table below:
IMPACT
Earlier provisions of SEBI LODR made it mandatory for a listed entity to have at least one-woman director on its board.
However, woman director should be Executive or Non-Executive Director was not specified, which left a door open for
a listed entity to appoint an individual as Women Director, be it as Executive Director or not. Now provisions are very
much clear that top 500 listed companies are required to appoint one Woman Director as Independent Director on
their board and next 500 listed companies (if the top 1000 listed companies remain the same at end of FY 2019-2020)
to appoint woman independent director on their board.
Illustration:
If any listed entity to comply with the requirement of Woman Director, had appointed an Executive Director
designating her as Woman Director. Since there was no specification of Woman Director should be Non-Executive
Director, companies have appointed their family member or existing Executive Director as Woman Director, in order
to comply with the requirement. Top 500 listed companies will have to now initial the process of appointing at least
one Woman Director in capacity of Independent Director, which may lead to restructure of Board composition, leading
to removal of existing Woman Director (appointed as Executive Director) or additional director on their board to meet
the requirement.
“No person shall be appointed or continue as an alternate director for an independent director of a listed entity with
effect from October 1, 2018.”
IMPACT
Concept of appointment of alternate director in place of Independent Director comes from Section 161(2) of
Companies Act, 2013. However, with the amendment in SEBI LODR, no longer appointment or continuous of office of
Alternate Directors is permitted in place of original IDs. Hence original directors are obliged to occupy their offices and
alternate directors to vacate the office. Since such restrictions are made effective with the amendment in SEBI LODR
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Regulation and there is no correspondence amendment in CA 2013 so far, such alternate directors in place of
Independent Director shall continue to be alternate directors in private and unlisted public companies.
5. OTHER AMENDMENTS
a) Declaration by Independent Directors about their status as independence at the first board meeting after their
appointment where they participate and in first board meeting of every financial year or where such status may get
affected.
b) Top 500 listed companies w.e.f. October 1, 2018 shall obtain the “Directors and Officers Insurance” (D&O) to cover
all such risk which may be determined by its BOD, which may have adverse effects on the business.
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
IMPACT
Pursuant to Section 196 of Companies Act, 2013, an individual can be appointed as Executive Director if he has attained
the age of seventy years, only by passing a special resolution along with an explanation justifying his appointment.
With the similar kind of amendment in LODR regulation, one more move taken by market regulator to ensure that if
person has attained age of seventy-five years, then his appointment / re-appointment as Non-Executive Director shall
be supported by a justification for his appointed as Non-ED which should be provided in the Explanatory statement
annexed to the notice of General meeting to be called for. SEBI LODR regulations makes it mandatory for listed entities
to justify the appointment or continuation of Non-Executive Director when such person attend the age of seventy-five
years, by way of passing special resolution in members meeting.
One more interesting fact left unanswered with the amendment, any director who had attained 75 years during this
amendment and to continue with his appointment, there is a need to pass special resolution explaining his
appointment in detail, so such transaction passed in special resolution will tantamount to reappointment and whether
eforms like DIR 12 will be required to upload on MCA portal?
Illustration:
“No listed entity shall appoint a person or continue the directorship of any person as a non-executive director who has
attained the age of seventy-five years unless a special resolution is passed to that effect, in which case the explanatory
statement annexed to the notice for such motion shall indicate the justification for appointing such a person.”
With the terminology used in the provision “continue the directorship”, makes it clear that to continue the directorship
of a person who attained the age of seventy – five years as Non-Executive Director, listed entity shall pass a special
resolution with explanation justifying his directorship in the explanatory statement.
Even though there is no specification for such transaction in CA 2013, but it would be mandatory for organization
passing a special resolution under this regulation, to intimate the ROC about special resolution been passed for
continuation of tenure of such directors by filing respective e-forms.
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
IMPACT
Any remuneration payable to NED are based on recommendation of the Board of Directors. When remuneration is
paid to single NED exceeds 50% of the remuneration to be paid to all other NED including such NED, will attract the
approval from members. Since, tenure of all NED is not for short term, hence such excess payment should be justified,
hence special resolution on annual basis will be required from members. Prior approval to be obtained every year
from shareholders for such payment to NED.
Two terminologies “annual remuneration payable” and “every year” explains the requirement of such approval. “Year”
to be justified as financial year and not calendar year since all such payment will be based on financial statement and
other compliance attached with the remuneration are based on financial year and not calendar year. Further
“remuneration payable” makes it clear that the payment when it is occurred and when it is paid, hence prior approval
to be obtained from members.
IMPACT
Welcome move by the market regulators for the top listed companies to have six directors on their board. Somewhere,
this amendment may serve the purpose of having effective and optimum combination of directors. The compliance
with appointment of minimum no of directors is time consuming and since there is no cooling period specified once
such amended provision will come into effective, hence process of compliance to be ensure even before the effective
dates.
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
IMPACT
With the insertion of new regulation 17A, market regulators want to ensure the limits on the number of directorships
of an individual in listed entities. Since Independent Directors play a crucial role to in decision making activities in listed
entities, along with its successful implementation, upper limits are provided for their appointment as Director of the
listed entities. However, the time limits provided by the market regulators are based on the volume of restructure to
be made by the listed entities and to hunt for the replacement, if required. The implementation of maximum number
of directorships shall come into effect at various stages, so as to ensure that the listed entities have enough timeframe
to cross check the compliance requirement and restructure their Board strength, if required.
IMPACT
Section 174(1) of CA 2013 provides for minimum 2 directors or one third of its total strength. However, for top listed
companies, one more director will be required for forming quorum throughout the meeting. CA 2013 was silent on
the presence of the Independent Director for meeting with the requirement of quorum, however for the top listed
companies, one ID would be required for forming quorum in Board meeting. Further, Secretarial Standards makes it
mandatory for companies to ensure the presence of quorum throughout the meeting.
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
AMENDMENT
Quorum of NRC and frequency of such meetings has been prescribed under SEBI LODR amendment. However, such
amended provisions will not be applicable on unlisted public companies and private companies, since Companies Act
does not prescribe for quorum and frequency of such meeting.
IMPACT
Quorum: With the insertion of sub regulation 2A under Regulation 19, requirement of minimum quorum has been
defined as two members or one third of total committee members, whichever is greater, to be presented at the
meeting. Out of total members, presence of one Independent Director is mandatory for forming quorum, which
conclude that even if more than 2 members or 1/3rd of total members are present, but if there is no Independent
Director present at such meeting, then this meeting will not hold any validity.
Frequency: With the insertion of sub regulation 3A under Regulation 19, the NRC shall meet at least once in a year.
Even when such frequency of meeting was not prescribed under LODR Regulations, even then it was mandatory for
listed entities to call for and conduct meeting at least once in a year; as board evaluation has to be carried out by NRC,
further recommendation to the Board on appointment or removal on Board of Directors / senior management has to
come from NRC.
Note: Both the above amendments will not be applicable for SME Listed companies. Since NRC constitution and further
compliances for listed companies as per Regulation 19 of SEBI LODR Regulations falls under exemption list for SME
listed companies as per Regulation 15, and above-mentioned amendments are not covered under Companies Act, 2013,
hence, SME Listed may comply with the applicable provisions restricted to Companies Act, 2013 and may not be
required to comply with the amended provision of SEBI LODR Amendment Regulations.
AMENDMENT
Minimum number of members for such committee has been defined, as three directors with one Independent Director
should be member of such committee. Provision of CA 2013 empowered Board to decide on the committee members
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
except Chairperson of SRC and hence there was no such requirement of minimum members to constitute committee.
Further, as per amended provision, Chairperson of SRC is required to attend the AGM, so as to answer the queries of
stakeholder, which is in line with the CA 2013. Further, committee to meet at least once in a year.
IMPACT
Minimum number of members: At least three directors, including one Independent Director, shall be member of such
committee. Listed entities may have to reconstitute their committee members if committee members do not have
one Independent Director.
Chairperson to attend AGM: This amendment is in line with the requirement of CA 2013 and therefore it won’t have
any impact on such companies.
Frequency: SRC shall meet at least once in a year. Even though such frequency was not prescribed under LODR
Regulation, it was somewhere required by listed entities to call for and conduct meetings as periodic disclosure
requirement on redressal of stakeholders’ grievances and submission of corporate governance report.
AMENDMENT
RMC to meet at least once in a year to discuss over the risk factor of an organization and thereafter formation or
modification in the risk policy of an organization. Amendment provision will need 500 top listed companies to
constitute RMC.
IMPACT
Compared with earlier provision for top 100 listed companies, further 400 top listed companies to constitute RMC
along with all other provisions will become applicable. In addition, RMC to meet at least once in a year.
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
CONSTITUTION OF COMMITTEES OF BOARD AS PER COMPANIES ACT AND SEBI LODR REGULATIONS – COMPARISON
*As per Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014.
**If there will be more than three members in NRC, then apart from three members, other members can be ED.
***Applicable specifically to listed companies as required under SEBI LODR Regulations, CA 2013 is silent.
****Companies other than listed companies which are not required to appoint ID under sub-section (4) of Section 149,
shall have two or more Directors in its CSR Committee.
ID - Independent Director
ED - Executive Director
Non-ED - Non – Executive Director
BOD - Board of Director
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
Regulation 23: Related Party Transactions Regulation 23: Related Party Transactions
(1) The listed entity shall formulate a policy on (1) The listed entity shall formulate a policy on
materiality of related party transactions and on materiality of related party transactions and on
dealing with related party transactions: dealing with related party transactions including
Explanation. - A transaction with a related party clear threshold limits duly approved by the board
shall be considered material if the transaction(s) of directors and such policy shall be reviewed by
to be entered into individually or taken together the board of directors at least once every three
with previous transactions during a financial years and updated accordingly:
year, exceeds ten percent of the annual Explanation. - A transaction with a related party
consolidated turnover of the listed entity as per shall be considered material if the transaction(s)
to be entered into individually or taken together
the last audited financial statements of the
with previous transactions during a financial year,
listed entity.
exceeds ten percent of the annual consolidated
turnover of the listed entity as per the last audited
financial statements of the listed entity.
(4) All material related party transactions shall (4) All material related party transactions shall require
require approval of the shareholders through approval of the shareholders through resolution
resolution and the related parties shall abstain and the related parties shall abstain from voting
from voting on such resolutions whether the on no related party shall vote to approve such
entity is a related party to the particular resolutions whether the entity is a related party
transaction or not. to the particular transaction or not.
(7) For the purpose of this regulation, all entities (7) For the purpose of this regulation, all entities falling
falling under the definition of related parties under the definition of related parties shall abstain
shall abstain from voting irrespective of whether from voting not vote to approve the relevant
the entity is a party to the particular transaction transaction irrespective of whether the entity is a
or not. party to the particular transaction or not.
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AMENDMENT
(1) Regulation 23(1) required the formulation of the material policy of RPT and way to deal with such transaction,
however with the amended provision, now such policies are required to be more specific in terms that
threshold limits of RPT duly approved by the Board and such policies to be reviewed by the Board once in
every three years, to make the necessary changes in the policy and update accordingly.
(2) Insertion of Regulation 23(1A) will require members approval for payment towards royalty/brand usage. Most
of the companies makes the payment towards royalty/brand usage. Such transaction shall be considered as
material if consolidated transaction or individual transaction in any financial year exceeds 2% of the annual
consolidated turnover of listed entity as per the last audited financial statement.
(3) Regulation 23(4) abstained the related parties from voting on such transaction in which such party are related
party. Amended provision allows the related party to cast their vote against such transaction where they are
related party. However, such amendment does not allow them to caste the vote in favor which will lead to the
conflict of interest.
(4) Disclosure of RPT on consolidated basis to be provided to stock exchange along with the same been published
on the website of the company within 30 days from publication of its standalone and consolidated financial
results on half year basis.
IMPACT
Rationale behind the amendment in RPT provisions is to bridge the gap between SEBI LODR Regulations and
Companies Act, 2013. Earlier provision in Regulation 23(4) kept related party away from voting in such transaction.
Hence it was proposed to bring the provisions of LODR in line with Companies Act, 2013, whereby allowing related
parties to cast a negative vote i.e. not in favor of such transaction.
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AMENDMENT
With an insertion of Sub-regulation 7A after sub- regulation 7, all the listed entities are required to disclose every year,
about the utilization of funds raised through preferential allotment of qualified institutions placement, until such funds
are fully utilized. Before proposed amendment, requirement of intimating to stock exchange about utilization of funds
raised through public and any deviation / variation in utilization of funds other than the objects, were required to be
intimated on quarterly basis, for funds raised through public issue, rights issue or preferential issue.
IMPACT
Rationale behind insertion of above regulation is to ensure appropriate disclosures are made for funds raised through
preferential allotments and QIPs. Such disclosures shall be provided in Annual Report by such listed entities until funds
are fully utilized.
(3) The listed entity shall submit the financial results (3) The listed entity shall submit the financial
in the following manner: results in the following manner:
(1) The listed entity shall submit quarterly and (1) The listed entity shall submit quarterly and
year-to-date standalone financial results to year-to-date standalone financial results to the
the stock exchange within forty-five days of stock exchange within forty-five days of end of
end of each quarter, other than the last each quarter, other than the last quarter.
quarter. (2) In case the listed entity has subsidiaries, in
(2) In case the listed entity has subsidiaries, in addition to the requirement at clause (a) of
addition to the requirement at clause (a) of sub-regulation (3), the listed entity may shall
sub-regulation (3), the listed entity may also also submit quarterly/year-to-date
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IMPACT
AMENDMENT
(1) The listed entity shall submit the annual report (1) The listed entity shall submit the annual report to
to the stock exchange within twenty-one the stock exchange and publish on its website:
working days of it being approved and adopted within twenty-one working days of it being
in the annual general meeting as per the approved and adopted in the annual general
provisions of the Companies Act, 2013.
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IMPACT
Disclosure of annual report to stock exchange within 21 days after AGM delays the disclosures to the shareholders.
Therefore, it was recommended to listed entities that the annual report shall be disclosed to the stock exchanges and
on their website in the following manner:
(a) Copy of the annual report sent to the shareholders along with the notice of AGM to be disclosed not later than
the day as dispatched to the shareholders.
(b) In the event shareholders approve any amendment in annual reports, then revised copy of annual report is to
be sent, not later than 48 hours after AGM.
Note: Above amendments in regulation 32, 33 & 34 will come into effect from April 1, 2019 onwards.
Regulation 36: Documents & Information to Regulation 36: Documents & Information to
shareholders. shareholders
(1) The listed entity send the annual report in the (1) The listed entity send the annual report in the
following manner to the shareholders: following manner to the shareholders:
(a) Soft copies of full annual report to all those (a) Soft copies of full annual report to all those
shareholder(s) who have registered their shareholders(s) who have registered their
email address(es) for the purpose; email address(es) for the purpose either with
the listed entity or with any depository;
IMPACT
In the interest of environmental responsibility and in view of increased digital access, it was necessary to promote the
requirement of dispatching the annual reports only in soft copies, unless the shareholders specifically ask for the hard
copy of the annual report. Hence, to ensure the mandatory dispatch of soft copies of annual reports, adequate details
of shareholders should be made available, for which it was felt necessary to register the contact details either with
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company or with depositories of the company. The amendment in regulation 36(1) was made in line with the proposed
amendment in Regulation 34.
Regulation 36: Documents & Information to Regulation 36: Documents & Information to
shareholders. shareholders
IMPACT
While several disclosures w.r.t. price sensitive information and material disclosures (both events based and periodic)
have been made mandatory, concern were raised on the manner of presentation of such information. Most of these
disclosures are not in “searchable” format, which makes it difficult for investors to find out the information by
searching through specific word or phrase. Accordingly, amendment was made to ensure that the disclosures should
be made in XBRL format, in accordance with guidelines specified by the stock exchanges from time to time.
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CHAPTER 6: AUDITORS
Regulation 36: Documents & Information to Regulation 36: Documents & Information to
shareholders. shareholders
IMPACT
Earlier provision in SEBI LODR Regulations does not made it mandatory for the listed entities to give adequate
disclosures as a part of explanatory statement to be annexed to the notice of general meeting w.r.t.
appointment/reappointment of statutory auditor(s).
(a) Proposed fees payable to statutory auditor(s) along with terms and conditions of such appointment. In case
of new appointment, material changes in the fees payable to proposed auditor(s) via-z-via fees paid to the
outgoing auditor(s) and rationale for such changes, if any.
(b) Basis of recommendation for such appointment of auditor along with credential of auditors to be appointed.
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1) Title of the Regulation 44 has been changed from ‘Voting by shareholders’ to ‘Meetings of shareholders and
voting’.
2) For top 100 listed entities (identified by market capitalization as determined as on March 31 st of every financial
year), AGM shall be conducted within 5 months from closing of financial year (Inserted by new sub-regulation
(5)).
3) One-way live webcast of the proceedings of AGM for top 100 listed entities shall be mandatory (Inserted by
new sub-regulation (6)).
(5) “The top 100 listed entities by market capitalization, determined as on March 31 st of every financial year, shall hold
their annual general meetings within a period of five months from the date of closing of financial year.
(6) The top 100 listed entities shall provide one-way live webcast of the proceedings of the annual general meetings.
Explanation: The top 100 listed entities shall be determined on the basis of market capitalization, as at the end of
the immediate previous financial year.”
IMPACT
(1) In order to avoid bunching up of number of AGMs, especially in the month of August-September, it was
recommended to fix the timeframe for conducting the AGM within 5 months from closure of financial year.
Due to over lapping of AGMs, which results in the less participation of shareholders (due to clashes of AGM
timings). To avoid such situation and to successfully implement the timelines for AGMs, amendment was made
for top 100 listed companies to conduct the AGM within five months from the closure of financial year. The
same may be extended to other entities in a phased manner based on the experience gained.
(2) Because of over lapping of Annual General Meetings and facilities of e-voting to be provided as Companies
(Management and Administration) Rules, 2014, e-voting is permitted upto 5pm one day prior to the AGM.
Thus, less shareholders participate such general meetings, once voting is done through e-voting facility. In
such scenario, important proceedings of the AGM are missed out and there is no requirement of one-way
webcast. So, to ensure the active participation of shareholders and to reach them out with all the latest
progress of the AGM, it was made mandatory for the top 100 listed entities to provide with the one-way live
webcast, so that shareholders who are not attending the meeting in person, can get the detailed proceedings
of AGM.
1) All the details which are required to be uploaded as per Regulation 46 are to be updated under separate
section on its website.
2) W.e.f. October 1, 2018, credit ratings obtained for its outstanding instruments, shall be updated on the
website as and when there is any revision in any of the ratings.
3) Audited financial statement of subsidiary of the listed entities, shall be uploaded at least 21 days prior to the
date of the annual general meeting.
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IMPACT
(1) Presently, there is no provision under Companies Act, 2013 w.r.t. disclosure of credit ratings. As per SEBI LODR
regulations, credit ratings shall be disclosed half yearly / annually along with financial results. According to the
amendment in regulation, all the credit ratings shall be disclosed for all such instruments shall be disclosed at
one place and any revision in any of these ratings, shall be disclosed on the website.
(2) With the amendment in disclosure w.r.t. subsidiary accounts, listed entities shall be required to have audited
financial statements for the relevant financial year of each of its subsidiary available on its website at least 21
days before the date of the annual general meeting.
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CHAPTER 8: SCHEDULE
SCHEDULE II – CORPORATE GOVERNANCE:
PART C: ROLE OF THE AUDIT COMMITTEE AND REVIEW OF INFORMATION BY AUDIT COMMITTEE
Companies Act, 2013 and SEBI LODR Regulations provide with specific roles and terms of the Audit Committee. Roles
and responsibilities of the Audit Committee in listed companies are specified under Part C of the Schedule II, which
determines the provisions w.r.t. Corporate Governance. In addition to the existing norms, it was recommended that
the Audit Committee shall also review the utilization of the funds where the total amount of
loans/advances/investment from holding company to its subsidiary exceeds Rs. 100 Crore or 10% of the asset size of
the subsidiary.
Part C: Role of the Audit Committee and Review of Pact C: Role of the Audit Committee and Review of
information by Audit Committee information by Audit Committee
AMENDMENT
Insertion of new sub-clause (6) making it mandatory for NRC to recommend to the Board, all the remuneration payable
to senior management, in whatever form payment is to be made.
IMPACT
With the insertion of sub-clause and changes made in the definition of senior management in LODR regulations, all
the remuneration to be paid to the KMPs in listed entities which falls under the definition of senior management shall
be routed through NRC, recommendation by NRC to the Board, thereafter approval will be granted by Board. Section
203 of CA 2013 require the companies to take the approval of Board for appointment of KMPs on their Board, along
with the terms and conditions for such appointment. However, section 203 applicable to private and unlisted
companies as well, whereby the requirement for constitution of NRC is not mandatory if not classified as per the
requirement. Hence, to make the provisions more stringent and to streamline the process of appointment and fixation
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of remuneration to be paid to senior management of listed companies, recommendation of the remuneration payable
to senior management shall be done by NRC in listed entities.
The Committee shall consider and resolve the Insertion of a new clause B
grievances of the security holders of the listed entity
including complaints related to transfer of shares, The Role of the committee shall inter-alia include the
non-receipt of annual report and non-receipt of following:
declared dividend.
(1) resolving the grievances of the security holders of
the listed companies including complaints related
to transfer/transmission of shares, non-receipt of
annual report, non-receipt of declared dividends,
issue of new/duplicate certificates, general
meetings, etc.
(2) Review of measures taken for effective exercise of
voting rights by shareholders
(3) Review of adherence to the service standards
adopted by the listed entity in respect of various
services being rendered by the Registrar & Share
Transfer Agent.
(4) Review of the various measures and initiatives
taken by the listed entity for reducing the
quantum of unclaimed dividends and ensuring
timely receipt of dividend warrants/annual
reports/statutory notices by the shareholders of
the company.
IMPACT
The entire roles and responsibilities of SRC towards the grievances of stakeholders has been redesigned by the
insertion of new clause. In addition to existing responsibilities of SRC, the role of SRC got widen to include the
following:
(a) Resolving grievances relating to issue of new/duplicate certificates, general meetings, etc.
(b) Reviewing the measure taken for effective exercise of voting rights
(c) Review of adequate services being rendered by RTA
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Deletion of Clause D:
Extract of the provisions deleted with the amendment:
SCHEDULE III:
PART A: DISCLOSURES OF EVENTS OR INFORMATION: SPECIFIED SECURITIES
Regulation 30 of SEBI LODR Regulations mandates listed entities to make disclosures of certain events or information,
which are approved by the Board or members, as the case maybe, which is material in nature. Events which are
specified in Part A of Schedule III are material in nature and shall be disclosed to the stock exchange(s) as soon as
possible but not later than 24 hours from occurrence of such events / information.
In addition to the amendment as discussed under “Chapter 6 – Auditors”, certain addition disclosures are required to
be made w.r.t. resignation of the auditors, whereby adequate reason for the resignation of the auditors shall be
disclosed to the stock exchange. CA 2013 provides for the provisions whereby all the companies are required to specify
the reason for the resignation of the auditor. However, there was no requirement specified in SEBI LODR Regulations.
“(7A) in case of resignation of the auditor of the listed entity, detailed reasons for resignation of auditor, as given
by the said auditors, shall be disclosed by the listed entities to the stock exchanges as soon as possible but not later
than twenty-four hours of receipt of such reasons from the auditor
(7B) Resignation of auditor including reasons for resignation: In case of resignation of independent director of the
listed entity, within seven days from the date of resignation, the following disclosures shall be made to the stock
exchanges by the listed entities:
i. Detailed reasons for the resignation of independent directors as given by the said director shall be
disclosed by the listed entities to the stock exchanges.
ii. The Independent Director shall, along with the detailed reasons, also provide a confirmation that there
are no other material reasons other than those provided.
iii. The confirmation as provided by the independent director above shall also be disclosed by the listed
entities to the stock exchanges along with the detailed reaons as specified in sub-clause (i) above”
IMPACT
Auditor of the company plays very crucial role in ensuring that the financial statements of the companies provide a
true and fair view of the affairs of the company. Companies Act, 2013 prescribe five financial years as tenure for which
auditor of the company shall be appointed. Resignation by the auditor before completion of their tenure may become
cause of concern. Hence, to maintain transparency of information between company and stakeholders, it would be
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necessary to keep the details of such resignation by the auditor in public domain, which was never made mandatory
within framework of SEBI LODR regulations.
Auditors generally tender the resignation before completion of their audit tenure, mainly because of some fraud or
financial irregularities. Resignation of auditors in listed entities becomes major setback in the capital market, which
may further result in the resignation of various others officials of the companies like Independent Directors, KMPs like
Company Secretary and Chief Financial Officer of the company, if any fraud or financial irregularities triggers /
identified. Therefore, detail reason for resignation of Independent Director shall also be provided.
SCHEDULE III:
PART A: DISCLOSURES IN FINANCIAL RESULTS
Statutory Auditor of the company have to ensure any discrepancies or irregularities in the process of the company
shall be qualified in the Audit Report. CA 2013 and SEBI LODR Regulations requires the auditors to qualify the report
based on their observation and to extent possible, to quantify the qualification of the audit report. However, in
absence of the adequate information (which may not be traceable / identifiable), the management were required to
quantify the qualification as raised by the auditor and it was responsibility of the auditor to verify the same.
Clause BB: With respect to audit qualifications where Clause BB: With respect to audit qualifications where
the impact of the qualification is not quantifiable: the impact of the qualification is not quantifiable:
i. The management shall make an estimate and the i. The management shall mandatorily make an
auditor shall review the same and report estimate which the auditor shall review and
accordingly; or report accordingly; or
ii. If the management is unable to make an estimate, ii. Notwithstanding the above, the management
it shall provide the reasons and the auditor shall may be permitted to not provide estimate on
review the same and report accordingly. matters like going concerns or sub-judice matters;
in which case, the management shall provide the
The above shall be included in the statement on
reasons and the auditor shall review the same and
impact of audit qualifications (for audit report within
report accordingly;
modified opinion)
ii. If the management is unable to make an
estimate, it shall provide the reasons and the auditor
shall review the same and report accordingly.
IMPACT
With the amendment in clause BB, quantification of the audit qualification raised by the statutory auditors becomes
mandatory, with exception to certain sub-judice matters or matters which are going concerns. Management will be
mandatory to make an effort towards quantifying the qualification of the audit, which shall be further reviewed by the
auditors.
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Certain promoters/promoter group entities were not categorized as Related Parties under SEBI LODR regulations for
certain transaction, because of nature of transaction and for not falling within the ambit of the definition of “related
parties” under accounting standards. Hence, to bring all the transaction with any person belongs to promoter/
promoter group, amendment was proposed in the SEBI LODR Regulations.
“(2A) Disclosures of transactions of the listed entity with any person or entity belonging to the promoter/promoter
group which hold(s) 10% or more shareholding in the listed entity, in the format prescribed in the relevant accounting
standards for annual results.”
IMPACT
Transaction with the person / entity which belongs to the promoter/promoter group holding more than 10% stake of
the listed entities, would fall under the ambit of the related party transaction for the disclosure purpose. All such
transaction would be required to be disclosed by the listed entities.
There is no provision under CA 2013 and SEBI LODR Regulations making it mandatory for the companies to disclose
about key changes in certain indicators w.r.t. financial statements. Under Part B, various details of financial
information are provided on periodical basis under head “Management Discussion and Analysis”.
“(i) details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial
year) in key financial ratios, along with detailed explanations therefor, including:
(j) details of any change in Return on Net Worth as compared to the immediately previous financial year along
with a detailed explanation thereof.”
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Various amendments have been made w.r.t. various disclosures to be made in the Corporate Governance Report. For
ease of understanding such amendments in line with the amendments in the Regulations (which are discussed earlier
in various chapter of this docket), summary of the same are tabled below:
2(h) w.e.f. FY ending March 31, 2019: Rationale were made that Board seek the
Identification of skills/expertise/competencies expert opinion on various matters, however
Board of
(which are to be identified by the Board), directors Board collectively, are responsible for the
Directors
of the listed companies shall possess expansion and growth of the firm. Hence, it
was recommended and amended the
provision, that the board are required to list of
competencies/expertise that the Board
members shall possess.
w.e.f. FY ending March 31, 2019: With an effort towards identifying the
Disclose the name of directors who have such skills/expertise which Board should possess,
skills/expertise as identified by the Board disclosure shall be made with the name of the
directors who actually have possessed such
qualities, which were identified by the Board.
2(i) Board to confirm that the Independent Directors Onus of proving that the independent status of
has appointed on its board fulfills the conditions as every Independent Directors was on the
Board of
specified under SEBI LODR Regulations, more likely Directors itself. Hence, IDs are required to give
Directors
towards independence status of all IDs. the declaration about the status of their
independence towards the management.
However, to ensure the same has been verified
by the management, Board would be
responsible to confirm about the fulfillment of
conditions w.r.t. independence of IDs in line
with the SEBI LODR Regulations.
2(j) Whenever Independent Directors of the listed firm Resignation of Independent Directors and
resign before the expiry of their terms, lot of auditors of the company are major challenge
Board of
concern are attached towards such replacement. for the listed companies, as they hold
Directors
Hence, to keep the transparency towards any important position and play vital role in listed
identified irregularities, detailed reasons for the entities. Therefore, detailed information w.r.t.
resignation shall be provided, which shall be resignation of ID was required to be part of CG
confirmed by the outgoing IDs that there were no Report.
material reasons other than those which are
provided to the company.
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9(q) List of all credit ratings shall be provided along This will assist the investor to get the financial
with any revisions during the relevant financial position of the company
General
year.
Shareholder
information
10(h) Details of utilization of funds raised through Amendment was made to provide the details of
preferential allotment / QIP utilization of funds raised through preferential
Other
allotment / QIP, these requirements are in
Disclosures
addition to the details provided for funds
utilization when raised through public offer.
10(1) To ensure that none of the Directors of the In addition to the disclosure made by the
company are debarred / disqualified as per Section respective directors before the board in first
Other
164 of CA 2013, either in the listed entity or in any Board meeting of the Financial Year and
Disclosures
other companies, certificate from PCS shall be statement given by the Auditor in their Audit
obtained report; to ensure that such statement are
correct, certificate from PCS shall be obtained,
which result in the cross check by the Company
Secretary within the parameter of Section 164
& 167 of CA 2013 and SEBI order, that none on
the Board are submitting false declaration
w.r.t. debarment / disqualification of their
directorship.
10(j) Details of such recommendation which were made Lot of recommendation are made to the Board
by the Committee of Boards and were not for their consideration, which may or may not
Other
accepted by the Board, along with the reasons in be accepted by the Board. However, such non-
Disclosures
detail acceptance of recommendation was never
made public, since there was no requirement
stipulated under SEBI LODR regulations.
10(k) Total fees paid to the statutory auditors (including Requirement to ensure that all the fees paid
all entities in same network firm/network entities) towards various services rendered by the
Other
by the company along with its subsidiaries shall be auditor or through its network firm are
Disclosures
disclosed disclosed, as such transaction are difficult to
trace from various financial statement of
company and its subsidiaries.
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With the introduction of sixth amendment in SEBI LODR Regulations, the norms for reclassification of Promoter and
Promoter Group was amended to lead down new set of procedure to ensure that the reclassification of Promoter are
done in effective manner and more transparency will be created with new set of procedure. Where the Companies
Act, 2013 is completely silent on the reclassification of the promoter to public category, Regulation 31A stipulate
certain norms w.r.t. classification of promoters to public category, on satisfying certain norms.
Before amendment, provision of Regulation 31A mainly covered four aspects on which entire reclassification of
promoters were depended. They are (i) prior approval from stock exchange (ii) reclassification to be done when new
promoters replace the existing one (iii) reclassification to be done when the company is professionally managed and
there is no identifiable promoters (iv) other general norms.
When the listed entities cease to have promoters, i.e. company is professionally managed, then the existing promoters
along with the person acting in concert shall not hold more than 1% of paid up capital. The entire Regulation 31A is
substituted with new Regulation.
Eligibility Criteria:
(1) Promoter(s) seeking for reclassification of promoters should not be willful defaulters as per RBI or declared as
Fugitive Economic Offenders as per Section 12 of Fugitive Economic Offenders Act, 2018.
(2) Listed entities shall be in compliance w.r.t. requirement of Minimum Public Shareholding as per Regulation
38.
(3) Trading in securities of applicant listed entities shall not be suspended by stock exchange
(4) There shall be no outstanding dues to SEBI, stock exchanges or depositories
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(3) Shall not any special rights w.r.t. such listed entity by way of formal / informal arrangements. Any shareholding
agreements executed before such reclassification granting special rights to promoters shall not revoked /
terminated.
Note: Promoters shall ensure the compliance of above provisions on continuous basis from the date of such
reclassification, failing to maintain the compliance of provisions as mentioned above, promoters shall automatically
be reclassified as promoter/person related to promoter(s).
Representation on Board:
(1) Promoter(s) shall not be allowed to have any representation on Board of applicant company (including
nominee director)
(2) Promoter(s) shall not act as KMP of such listed entity.
Note: Promoters shall ensure the compliance of the above provisions for the period of three years from the date of
reclassification, failing to which, they will be automatically reclassified as promoters/person related to promoter(s).
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SEBI on June 26, 2018 has amended SEBI (Public Offer and Listing of Securities Debt Instruments) Regulations, 2008
[now Regulation has been renamed to be called as “SEBI (Issue and Listing of Securitized Debt Instruments and
Security Receipts) Regulations, 2008 (hereinafter referred to be as “SDISR Regulations”)] to enable the issuance and
listing of security receipt (“SR”). Pursuant to the listing of Security Receipt, listing provisions as applicable under SEBI
(LODR) Regulations shall become applicable to such listing. In order to align LODR regulations with SDI regulations,
Fifth Amendment in SEBI LODR Regulations was notified on September 06, 2018.
Before the amendment in corresponding regulations, SDISR Regulations was applicable for following transactions:
With the amendment in SDISR and LODR regulations, now companies can list its Security Receipt on recognized stock
exchange(s). Pursuant to the listing of SR, SEBI LODR regulations shall become applicable on such listing. Hence,
amendment in SEBI LODR regulations was notified to bring the provision of post listing in line with the listing of SR.
AMENDMENT
Procedural Compliance:
i. Disclosure requirement:
- Listed companies shall disclose to stock exchange of all events / information as specified in Part E of Schedule
III, as soon as reasonably possible, but within 24 hours from occurrence of such events / information;
- Any delay in giving disclosure, shall be supported with the adequate reason of such delay;
- Listed companies shall provide further updates on all disclosures made under Part E of Schedule III, till the
time such event is resolved/closed;
- Listed companies shall provide reply to all the queries raised by the stock exchanges w.r.t. such
events/information;
- All disclosures made under Part E of Schedule III shall be uploaded on the Company’s website for period of
minimum 5 years and thereafter as per Company’s archival policy.
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About author:
This handbook is authored by CS ASHISH BAID, who is an associate member of Institute of Company Secretaries of
India (“ICSI”), CS into employment from Mumbai. He is Commerce Graduate and have cumulative experience of more
than 4 years in Corporate Laws, Securities Laws, Labour Law and Environmental Law, FEMA related compliance, etc.
He authored various articles covering topics on Corporate Laws, SEBI regulations, Labour Laws, FEMA and case laws.
Articles were also published in ICSI magazines i.e. WIRC – Focus, EIRC – Newsletters, Kochi chapter, Ahmedabad
Chapter and professional websites like Tax Guru. Author has also contributed towards Mobile App “SEBI LODR
Regulations” covering all aspects of the SEBI LODR Regulations, amendments, circulars, notification and case laws.
CS ARJUN SHARMA has co-authored this handbook, who is also an associate member of Institute of Company
Secretaries of India (“ICSI”). He is from Delhi and CS into employment. He has total experience of more than 2 years
post qualification and was associated with listed company, handled IPO of the same company. He has wide knowledge
in listing compliances, post listing compliances w.r.t. provisions of SEBI Takeover Code and SEBI Insider Trading
regulations. He has co-authored various articles covering topics on SEBI regulations and Corporate laws.
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SEBI LODR (AMENDMENT) REGULATIONS, 2018 CS ASHISH BAID (8097979445)
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