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TMI BlogCorporate Governance in listed entities - Amendments to Clause 49 of the Equity Listing AgreementX X X X Extracts X X X X X X X X Extracts X X X X ..... te Affairs has issued the following circulars on matters related to Corporate Governance clarifying certain provisions of the Companies Act, 2013: Sr. no. Reference Date Subject matter 1. Circular No.14/2014 June 09, 2014 Clarification on rules prescribed under the Companies Act, 2013- matters relating to appointment and qualification of directors and independent directors 2. Circular No.30/2014 July 17, 2014 Clarifications on matters relating to related party transactions 3. Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to ensure compliance with this circular and carry out the amendments to their Listing Agreement as per the Annexure. 10. This circular is available on SEBI website at www.sebi.gov.in under the categories Legal Framework and Issues and Listing . Yours faithfully, Amit Tandon Deputy General Manager +91-22-26449373 [email protected] Encl : Annexure Amendments to Clause 49 of the Listing Agreement Annexure Amendments to Clause 49 of the Listing Agreement 1. Applicability of Clause 49 The Clause 49 of the Listing Agreement shall be applicable to all companies whose equity shares are listed on a recognized stock exchange. However, compliance with the provisions of Clause 49 shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in this regard, from time to time. 5. Amendment to Clause 49(II)(B)(4)(b) The clause shall be substituted with the following: (b) The terms and conditions of appointment shall be disclosed on the website of the company. 6. Amendment to Clause 49(II)(B)(7) The clause shall be substituted with the following: 7. Familiarisation programme for Independent Directors a. The company shall familiarise the independent directors with the company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc., through various programmes. b. The details of such familiarisation programmes shall be disclosed on the company's web ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49(V)(G) The clause shall be substituted with the following: (G). Selling, disposing and leasing of assets amounting to more than twenty percent of the assets of the material subsidiary on an aggregate basis during a financial year shall require prior approval of shareholders by way of special resolution, unless the sale/disposal/lease is made under a scheme of arrangement duly approved by a Court/Tribunal. Explanation (i): For the purpose of sub-clause (V)(A), the term material non-listed Indian subsidiary shall mean an unlisted subsidiary, incorporated in India, whose income or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated income or net worth respectively, of the listed holding com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following explanation shall be inserted after Clause 49(VII)(A): Explanation: A transaction with a related party shall be construed to include single transaction or a group of transactions in a contract. 13. Amendment to Clause 49(VII)(B) The clause shall be substituted with the following: B. For the purpose of Clause 49 (VII), an entity shall be considered as related to the company if: (i) such entity is a related party under Section 2(76) of the Companies Act, 2013; or (ii) such entity is a related party under the applicable accounting standards. 14. Amendment to Clause 49(VII)(C) The clause shall be substituted with the following: (C)The company shall formulate a policy on materiality of Rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons as the Audit Committee may deem fit; Provided that where the need for Related Party Transaction cannot be foreseen and aforesaid details are not available, Audit Committee may grant omnibus approval for such transactions subject to their value not exceeding ₹ 1 crore per transaction. d. Audit Committee shall review, atleast on a quarterly basis, the details of RPTs entered into by the company pursuant to each of the omnibus approval given. e. Such omnibus approvals shall be valid for a period not exceeding one year and shall require fresh approvals after the expiry of one year 16. Amendment to Clause 49(VII)(E) The following proviso and explanations shall be inserted after Clause 49(VII)(E): Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X
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