Law being dynamic in nature can never be static. With new amendments, new compliances needs to be ensured. Keeping these in mind the following are the checklist that needs to be abided by the Listed Entities by 1st April 2020.
| Reg No. | Provision | Views |
| 17 (1) (A) | The Board of directors of the top 1000 listed entities shall have at least one independent woman director.
The composition of board of directors of the listed entity shall be as follows: An optimum combination of executive and non-executive directors with at least one woman director and not less than fifty per cent. of the board of directors shall comprise of non-executive directors; |
Previously the requirement was to appoint a Woman Director. However, now the Woman Director shall be Independent.
The Provision was applicable to top 500 listed entities w.e.f 01.04.2019. From 01.04.2020 it will be applicable to top 1000 listed entities. |
| 17(1)(c) | The board of directors of top 2000 listed entities shall comprise of not less than six directors. | The Provision was applicable to top 1000 listed entities w.e.f 01.04.2019
From 01.04.2020 it will be applicable to top 2000 listed entities. One must take care of the requirement of the composition of Board as envisaged in Regulation 17 (1) (A) (B). |
| 17(1B) | The top 500 listed entities shall ensure that the Chairperson of the Board of such listed entity shall –
(a) be a non-executive director; (b) not be related to the Managing Director or the Chief Executive Officer as per the definition of the term “relative” defined under the Companies Act, 2013: Provided that this sub-regulation shall not be applicable to those listed entities have any identifiable promoters as per the shareholding pattern filed with stock exchanges. |
This is a new provision inserted by the SEBI (LODR) Amendment Regulations.
Top 500 listed entities now are required to ensure that: Chairperson of the Board is a Non – Executive Director and he is not related to the MD or the CEO.
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| 17(2A) | The quorum for every meeting of the board of directors of top 2000 listed entities shall be one-third of its total strength or three directors, whichever is higher, including at least one independent director. It is to be noted that the participation of the directors by video conferencing or by other audio-visual means shall also be counted for the purposes of such quorum. | The Provision was applicable to Top 1000 listed entities w.e.f 01.04.2019.
From 01.04.2020 it will be applicable to top 2000 listed entities. Attendance of one Independent Director is mandatory. |
| 17A | The directors of listed entities shall comply with the following conditions with respect to the maximum number of directorships, including any alternate directorships that can be held by them at any point of time –
(1) A person shall not be a director in more than eight listed entities with effect from April 1, 2019 and in not more than seven listed entities with effect from April 1, 2020: Provided that a person shall not serve as an independent director in more than seven listed entities. (2) Notwithstanding the above, any person who is serving as a whole time director / managing director in any listed entity shall serve as an independent director in not more than three listed entities. |
The Directors must ensure that they are not holding directorship in not more than 7 listed entities w.e.f 1st April 2020.
For the purpose of limits on directorship, only those company should be taken into account whose equity shares are listed on the Stock Exchanges
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| 24A | Every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its annual report, a secretarial audit report, given by a company secretary in practice, in such form as may be specified. | The Listed Entity shall ensure that its Material Unlisted subsidiary incorporated in India has appointed a Secretarial Auditor to undertake secretarial audit Report for the F.Y. 2019-20. Since the onus of compliance is on the Listed entity.
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| Schedule V part C clause 2 (h) | A chart or a matrix setting out the skills/expertise/competence of the board of directors specifying the following:
(i) With effect from the financial year ending March 31, 2019, the list of core skills/expertise/competencies identified by the board of directors as required in the context of its business(es) and sector(s) for it to function effectively and those actually available with the board; and (ii) With effect from the financial year ended March 31, 2020, the names of directors who have such skills / expertise / competence |
In the Annual Report of 2018-19 the listed entities were required to report the list of core skills/expertise/competencies identified by the board of directors as required in the context of its business(es) and sector(s) for it to function effectively and those actually available with the board;
In the Annual Report of 2019-20 to be prepared by the listed entities now they are report the names of the Directors who have such skills/ expertise/ competencies as identified by the board of directors. |
The Article has been Co-authored alongwith CS Sneha Shaw, Officer- Secretarial, Usha Martin Limited.
Disclaimer: The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author(s). The Author(s) of this Article do not constitute any sort of professional advice or a formal recommendation. The Author(s) has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove
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