CS Ambika Mehrotra

Pursuant to Regulation 27(2) of SEBI Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’), listed entities were required to submit a quarterly compliance report on corporate governance to the Stock Exchange. The report had to be submitted in the format prescribed by SEBI from time to time and the timeline for submitting the same is within 15 days from the end of each quarter. The said format was earlier prescribed by SEBI vide its circular dated September 24, 2015[1]. Thereafter, the listing regulations have been largely amended vide notification dated May 9, 2018[2] based on the recommendations of the Kotak Committee. Accordingly, it was necessary to amend the format of the quarterly compliance report in order to reflect the corresponding amendments in respective regulations mentioned in the report. Therefore, SEBI vide its circular dated July 16, 2019[3] has revised the format of the quarterly compliance report on corporate governance to incorporate the amendments made in various provisions of the Listing Regulations. The circular shall come into force with effect from the quarter ended September 30, 2019.

The reporting timelines for the three formats prescribed in the amended circular (as annexures) remain the same as provided in the previous circular in 2015. The same includes:-

Annex – I – on quarterly basis;

Annex – II – at the end of a financial year (for the whole of financial year);

Annex – III – within six months from end of a financial year, may be submitted along with the second quarter’s report.

Below are the summary of the changes in the revised format of the quarterly compliance report on corporate governance provided by SEBI.

S. No. Headings Amendments/ additions Periodicity Regulation Reference Remarks
1. Composition of Board of Directors
  • Initial date of appointment
  • Date of re-appointment
  • Date of cessation
  • No of Independent Directorship in listed entities including this listed entity
  • Whether Regular chairperson appointed
  • Whether Chairperson is related to managing director or CEO
Quarterly Reg. 17
2. Composition of Committees
  • Whether regular chairperson appointed
  • Date of Appointment
  • Date of Cessation
Quarterly  Reg. 26(1)
3. Meeting of Board of Directors
  • Whether requirement of Quorum met
  • Number of Directors present
  • Number of independent directors present
Quarterly Reg.17
4. Meetings of Committees Same as above Quarterly Reg. 18 to Reg. 21
5. Disclosure on website in terms of Listing Regulations
  • 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
  • Advertisements as per regulation 47 (1)
  • Credit rating or revision in credit rating obtained by the entity for all its outstanding instruments
  • Separate audited financial statements of each subsidiary of the listed entity in respect of a relevant financial year
  • Whether company has provided information under separate section on its website as per Regulation 46(2)
  • Materiality Policy as per Regulation 30
  • Dividend Distribution policy as per Regulation 43A (as applicable)
  • A statement mentioning that it is certified that these contents on the website of the listed entity are correct.
Yearly Reg. 46(2)

 

Apart from the amendments in Reg. 46, the requirement of mentioning the compliance status wrt the disclosure of Materiality Policy and Dividend Distribution Policy have been inserted as an additional item
6. Annual Affirmations
  • Quorum of board meeting
  • Recommendation of board u/r 17(11)
  • Maximum number of directorship
  • Quorum of Nomination and Remuneration Committee meeting
  • Meeting of Nomination & Remuneration Committee
  • Meeting of Stakeholder Relationship Committee
  • Meeting of Risk Management Committee
  • Disclosure of related party transactions on consolidated basis
  • Annual Secretarial Compliance Report
  • Alternate Director to Independent Director
  • Declaration from Independent Director
  • Directors and Officers insurance
Yearly Reg. 17,

 

Reg 18-21,

 

Reg 23(9);

 

Reg. 24 (A),

 

Reg. 25

 

7. Affirmations wrt AGM Presence of Chairperson of the Stakeholder Relationship committee at the annual general meeting To be submitted by listed entity at the end of 6 months after end of financial year Reg. 20
8. Others CFO also permitted to sign the reports All/any of the above Earlier the Company Secretary / Compliance Officer / Managing Director / CEO were authorized to sign, the same has been extended to authorize the CFO to sign all/ any of the formats of the report

[1] https://taxguru.in/sebi/format-compliance-report-corporate-governance-submitted-stock-exchange-listed-entities.html

[2] https://taxguru.in/sebi/securities-exchange-board-india-listing-obligations-disclosure-requirements-amendment-regulations-2018.html

[3] https://taxguru.in/sebi/sebi-amends-formats-compliance-report-corporate-governance.html

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