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On 15th November, 2022, Securities & Exchange Board of India (SEBI) notified Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2022 which brought in the following changes; this article examines the impact of these amendment in regulations with respect to independent directors, financial statements, Draft Scheme of Arrangement and Scheme of Arrangement, Fee in respect of the draft scheme of arrangement, etc

1. Regulation 25 (2A) – Ease of Resolution Requirements for Appointment or Removal of Independent directors 

Earlier the regulation provided for a special resolution to be passed for appointment or removal of independent director.

With the insertion of proviso in Sub-regulation 2A of Regulation 25; even if the special resolution fails, but if the Votes Casted in Favour (VCF) are greater than Votes Casted Against (VCA) the motion (i.e., Simple Majority) [VCF > VCA] or if Votes Casted in Favour (by Public Shareholders) are greater than Votes Casted Against, under this proviso the person shall be deemed to be have been made independent director. Same process and regulation shall be applicable for removal of an independent director as well.

This amendment eases the process of appointment of independent director even if the special resolution per se fails, but in general terms the person can be made director, this simple majority would prevail. This empowers to a greater extend public shareholders and would have a greater impact in companies where relatively public/retail shareholding is lesser in whole.

2. Regulation 32 – Statement of Deviation(s) and Variation(s)

In accordance with Regulation 32 of SEBI (LODR) Regulations, listed entities are mandated to submit a quarterly statement of deviation(s) or variation(s) to stock exchanges indicating if they have deviated or varied in using the proceeds from issue of the object stated for the issue, till the complete use of fund from proceed.

Earlier this statement had to be submitted for public, rights and preferential issues.

With the amendment, SEBI had broadened the scope of disclosure and submission of such statement even in funds raised from Qualified Institutional Placements.

This amendment, would bring more transparency in corporate governance and may help flag any averments earlier and along side boost confidence of QIBs in corporate governance matters.

Impact of SEBI (Listing Obligations & Disclosure Requirement) Sixth Amendment

3. Regulation 52 – Tightening norms for quarterly submission of audited or unaudited financial statements 

SEBI has mandated that, for the final quarter of the fiscal year, the listed entity shall submit unaudited or audited quarterly and year-to-date standalone financial results to the recognised stock exchange within 60 days of the end of the quarter in order to improve disclosure requirements for the listed entities (s).

In case of non-convertible debentures, the same information has to be provided to debenture trustee, earlier the regulation stated that debenture trustee shall be provided with the “information submitted to stock exchange”, this phrase has now been omitted, which means that the information to debenture trustee can be even other than that provided to stock exchange.

4. Regulation 52 (2) – Norms for companies to be audited by Comptroller & Auditor General 

Previously, the CAG-appointed auditor was responsible for doing the first level audit and submitting the results to the stock exchange(s) within 60 days of the financial year’s end. The SEBI now mandates that unaudited financial results be submitted to stock exchanges within 60 days of the end of the fiscal year, along with a limited review report from the CAG, an auditor designated by the CAG, or a practising chartered accountant, and that audited financial results be submitted within 9 months of the fiscal year.

5. Regulation 52 (2A) – Mandatory provision for submission of Statement of Asset & Liabilities and Cash Flow at end of half year. 

Earlier Regulation 52 (2) (f) provided for submission of a statement of assets and liabilities and statement of cash flows as at the end of the half year. This has been omitted in present amendment.

With amendment insertion of Regulation 52 (2A), SEBI has made it mandatory for listed entity to submit a statement of assets and liabilities and statement of cash flows as at the end of every half year, by way of a note, along with the financial results.

6. Regulation 52 (4) – Provision for disclosure of line items 

Regulation 52 (4) provides for disclosure of multiple ratios that assists true and fair comparative view to investors. The new amendment maintains the original list, and merely sectoral equivalent ratios have been omitted.

7. Regulation 52 (7) – Statement of Utilization of Funds 

Earlier the statement of utilization of fund and statement if there have been any material averments had to be submitted before 45 days of end of quarter, and it had no specified format.

With the amendment, these statements are to be a part of quarterly report itself and a format has been prescribed by the board.

8. Regulation 52 (8) – Submission of Financial Result and Line Items within 2 days of conclusion of board meeting.

Earlier, Regulation 52 (8) contained an inadvertent error, the word Statement along with Financial Results as per Regulation 52 (4) had been used. Whereas, Regulation 52 (4) provides for Line Items and financial results.

This error has been now rectified, by substitution of Statement by Line Items.

9. Regulation 59 – Draft Scheme of Arrangements

For listed entities that have listed non-convertible debt securities or non-convertible redeemable preference shares, intend to enter into a scheme of arrangement, or are currently engaged in a scheme of arrangement pursuant to sections 230 to 234 and section 66 of the Companies Act of 2013, Regulation 59A of the SEBI (LODR) Regulations, 2015 has been introduced.

There are provisions relating to stock exchanges filling out draught schemes, no objection certificates, etc. Only Regulation 37, which describes the Scheme of Arrangements, was available up until this point. The entities that have listed non-convertible debt securities or non-convertible redeemable preference shares are the only ones for whom this amendment was purchased.

10. Regulation 61A – Inclusion of transfer of unclaimed funds in escrow account by listed entities which are not companies as per Companies Act 

Regulation 61 A, earlier provided that a company (as per Companies Act) shall keep unclaimed funds and benefits in an escrow account, which, on completion of seven years shall be transferred to Investor Education Protection Fund.

This provision, did not include listed entities, which were not companies as per definition of Companies Act.

With amendment, it has been inserted that Listed Entities that are not company as per Companies Act, shall also transfer the unclaimed funds in an escrow account for seven years, post which transfer it to Investor Education Protection Fund.

11. Fee for Draft Scheme of Arrangement

Following the National Company Law Tribunal’s approval of the scheme, fees for entities with listed specified securities, listed specified securities and listed nonconvertible debt securities, or listed non-convertible redeemable preference shares, shall be at the rate of 0.1% of the paid-up share capital of the listed/transferee/resulting company, whichever is higher.

The total amount due cannot be greater than Rs. 5 lakhs

This article has been authored by Varun Matlani, student of law at Gujarat National Law University and CA (Intermediate) at Institute of Chartered Accountants of India, and can be contacted at

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April 2024