SEBI revises the Format of Compliance Report on Corporate Governance to be submitted to Stock Exchange(s) by Listed Entities; additional information relating to Independent Directors to be disclosed

SEBI revises the Format of Compliance Report on Corporate Governance to be submitted to Stock Exchange(s) by Listed Entities; additional information relating to Independent Directors to be disclosed

August 1, 2019 SEBI 0

The Securities and Exchange Board of India (“SEBI”), in its Circular dated 16th July, 2019 has modified the Format for compliance report on Corporate Governanceto be submitted to Stock Exchange(s) by Listed Entities under the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This step has been taken by SEBI based upon the recommendations prescribed in the report of Committee on Corporate Governance under the Chairmanship of Shri Uday Kotak.

Please find below the detailed comparison on the old format of Compliance Report on Corporate Governance and the additions in the Modified (New) Format for the same.

Annexures Old Format New Format
Annexure I (Format to be submitted by listed entity on quarterly basis)

 

 

 

The first box deals with information related to Composition of Board of Directors and there were nine columns.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The new format of Composition of Board of Directors has thirteen columns, the additional information that is to be provided includes:

  1. Date of Reappointment along with the date of initial appointment in a separate column. (In the old format, there was only date of appointment)
  2. Date of Cessation
  3. Date of Birth
  4. No of Independent Directorship in listed entities including this listed entity

Some additional information like whether Regular chairperson appointed and if appointed, whether he / she is related to managing director or CEO will be needed.

 

The second box deals with information related to Composition of Committees.

The information related to the appointment of Regular Chairperson was to be provided under this header before.

 

In the old format, two columns were there where information relating to Name and Category of Committee members were required to be provided.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the revised format, the information related to the appointment of the Regular Chairperson has been included under the heading Composition of Board of Directors.

 

 

Here, there are four. The additional columns require to provide information on the following:

  1. Date of Appointment
  2. Date of Cessation

 

 

The third box deals with Meeting of Board of Directors. In the previous format, there were only three columns, namely:

  1. Date of meetings held in previous quarter
  2. Date of meetings held in relevant (current) quarter
  3. Maximum gap (in days) between any two consecutive meetings
In the revised format, along with the information that was required to be filled regarding Meeting of Board of Directors, the following additional information also needs to be added:

  1. Number of Directors present in the current quarter
  2. Number of Independent Directors present in the current quarter
  3. Whether requirement of Quorum met

 

The fourth box deals with information to be filled with regard to Meetings of Committees. There were four columns which required information relating to:

  1. Date of Meetings in relevant quarter
  2. Quorum of Meetings
  3. Date of meetings in the previous quarter
  4. Maximum gap (in days) between any two consecutive meetings
In the revised format, along with the information that was required to be filled regarding Meeting of Committees, the following additional information also needs to be added:

  1. Number of Directors present in the current quarter
  2. Number of Independent Directors present in the current quarter

 

 

 

The fifth box deals with Related Party Transactions. The fifth box in the revised format, dealing with Related Party Transactions has not undergone any noticeable change.

 

 

The sixth box deals with Affirmations. The sixth box in the revised format, dealing with Affirmations has not undergone any noticeable change.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annexure II (Format to be submitted by listed entity at the end of the financial year (for the whole of financial year))

 

 

 

Box I deal with Disclosure on website in terms of Listing Regulations. There were fifteen items under this header in the old format.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the revised format, the number of items to be disclosed is nineteen and the additional rows include:

  1. Schedule of analyst or institutional investor meet and presentations made by the listed entity to analysts or institutional investors simultaneously with submission to stock exchange
  2. Advertisements as per regulation 47 (1)
  3. Credit rating or revision in credit rating obtained by the entity for all its outstanding instruments
  4. Separate audited financial statements of each subsidiary of the listed entity in respect of a relevant financial year

Along with that, the following information also needs to be provided:

  1. Whether company has provided information under separate section on its website as per Regulation 46(2)
  2. Materiality Policy as per Regulation 30
  3. Dividend Distribution policy as per Regulation 43A (as applicable)

 

Also, the information provided on the website needs to be certified that these contents on the website of the listed entity are correct.

 

Box 2 has information related to Annual Affirmations. In the revised format there have been quite a many additions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The additional information to be provided, in the revised format under the header-Annual Affimations are as follows:

  1. Quorum of board meeting
  2. Recommendation of board
  3. Maximum number of directorship

 

  1. Quorum of Nomination and Remuneration Committee meeting
  2. Meeting of Nomination & Remuneration Committee
  3. Meeting of Stakeholder Relationship Committee
  4. Meeting of Risk Management Committee
  5. Disclosure of related party transactions on consolidated basis
  6. Annual Secretarial Compliance Report
  7. Alternate Director to Independent Director
  8. Maximum Tenure
  9. Meeting of independent directors
  10. Familiarization of independent directors
  11. Declaration from Independent Director

 

 

 

Box III requires information to related to Affirmation.

 

 

 

 

 

 

There has been no change in format with regard to Box III.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annexure III (Format to be submitted by listed entity at the end of 6 months after end of financial year along-with second quarter report of next financial year)

 

 

 

There is only one heading under this Annexure, and that is Affirmations as to whether or not the listed compliance requirements under the heading have been followed or not. In the revised format, there has been an additional compliance status requirement of the Presence of Chairperson of the Stakeholder Relationship committee at the annual general meeting.

Source : Old Format ; New FormatSecurities and Exchange Board of India

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