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TMI BlogSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018.X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 2018. 2. Save as otherwise specifically provided for in these regulations, they shall come into force with effect from April 1, 2019. 3. In the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, - (a) in regulation (2), in sub-regulation (1), in clause (zb), - i. the following proviso shall be inserted after the definition and before the existing proviso, namely, - "Provided that any person or entity belonging to the promoter or promoter group of the listed entity and holding 20% or more of shareholding in the listed entity shall be deemed to be a related party." ii. in the existing proviso, which shall be renumbered as the second proviso, the word "further" shall be inserted after the word "Provided" and before the word "that". (b) in regulation 15, in sub-regulation (2) as well as in the proviso to clause (b) of sub-regulation (2), the figure "17A" shall be inserted after the figure "17" and the figure "24A" be inserted after the figure "24". (c) in regulation (16), in sub-regulation (1), - i. in clause (b), - 1. in sub-clause (ii), the words "or member of the promoter group of the listed entity" shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1A) as above, the following new sub-regulation shall be inserted, namely, - "(1B). With effect from April 1, 2020, 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 the listed entities which do not have any identifiable promoters as per the shareholding pattern filed with stock exchanges. Explanation - The top 500 entities shall be determined on the basis of market capitalisation, as at the end of the immediate previous financial year." iv. after the existing sub-regulation (2), the following new sub-regulation shall be inserted, namely, - "(2A) The quorum for every meeting of the board of directors of the top 1000 listed entities with effect from April 1, 2019 and of the top 2000 listed entities with effect from April 1, 2020 shall be one-third of its total strength or three directors, whichever is higher, including at least one independent director ; Explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial business to be transacted at a general meeting shall also set forth clearly the recommendation of the board to the shareholders on each of the specific items." (e) after the existing regulation 17, the following new regulation shall be inserted, namely, - "17A. Maximum number of directorships. 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. For the purpose of this sub-regulation, the count for the number of listed entities on which a person is a director / independent director shall be only those whose equity shares are listed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usage or royalty shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceed two percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity." c. in sub-regulation (4), the words "the related parties shall abstain from voting on" shall be substituted with the words "no related party shall vote to approve". d. in sub-regulation (7), the words "abstain from voting" shall be substituted with the words "not vote to approve the relevant transaction". e. after the existing sub-regulation (8), the following new sub-regulation shall be inserted, namely, - "(9) The listed entity shall submit within 30 days from the date of publication of its standalone and consolidated financial results for the half year, disclosures of related party transactions on a consolidated basis, in the format specified in the relevant accounting standards for annual results to the stock exchanges and publish the same on its website." The amendment shall come into force with effect from the half year ending March 31, 2019. (j) in regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted by the independent director under sub-regulation (8) after undertaking due assessment of the veracity of the same. (10) With effect from October 1, 2018, the top 500 listed entities by market capitalization calculated as on March 31 of the preceding financial year, shall undertake Directors and Officers insurance ('D and O insurance') for all their independent directors of such quantum and for such risks as may be determined by its board of directors." (m) in regulation 29, in sub-regulation (1), in clause (f), the proviso thereto shall be omitted with effect from October 1, 2018. (n) in regulation 32, after the existing sub-regulation (7), the following new sub-regulation shall be inserted, namely, - "(7A) Where an entity has raised funds through preferential allotment or qualified institutions placement, the listed entity shall disclose every year, the utilization of such funds during that year in its Annual Report until such funds are fully utilized." (o) in regulation 33, in sub-regulation (3), - i. in clause (b), - a. the word 'may' shall be replaced with the word 'shall' ; b. the words and symbol "subject to following:" shall be substituted with the sym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the year ended March 31, 2019 and thereafter. ii. after the existing sub-regulation (3), the following new sub-regulations shall be inserted, namely, - "(4) The disclosures made by the listed entity with immediate effect from date of notification of these amendments- (a) to the stock exchanges shall be in XBRL format in accordance with the guidelines specified by the stock exchanges from time to time; and (b) to the stock exchanges and on its website, shall be in a format that allows users to find relevant information easily through a searching tool: Provided that the requirement to make disclosures in searchable formats shall not apply in case there is a statutory requirement to make such disclosures in formats which may not be searchable, such as copies of scanned documents. (5) The notice being sent to shareholders for an annual general meeting, where the statutory auditor(s) is/are proposed to be appointed/re-appointed shall include the following disclosures as a part of the explanatory statement to the notice: (a) Proposed fees payable to the statutory auditor(s) along with terms of appointment and in case of a new auditor, any material change in the fee payabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatever form, payable to senior management." ii. the contents under clause B shall be substituted with the following new provisions, namely, - "The role of the committee shall inter-alia include the following: (1) Resolving the grievances of the security holders of the listed entity including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc. (2) Review of measures taken for effective exercise of voting rights by shareholders. (3) Review of adherence to the service standards adopted by the listed entity in respect of various services being rendered by the Registrar & Share Transfer Agent. (4) Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the company." c. in Part E, clause D shall be omitted. The amendment in clause c. above shall come into effect from April 1, 2020. (v) in Schedule III, in Part A, under the Clause A dealing with 'Events which shall be disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing new sub-clauses shall be inserted, namely,- "(i) details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including: (i) Debtors Turnover (ii) Inventory Turnover (iii) Interest Coverage Ratio (iv) Current Ratio (v) Debt Equity Ratio (vi) Operating Profit Margin (%) (vii) Net Profit Margin (%) or sector-specific equivalent ratios, as applicable. (j) details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof." c. in Part C dealing with 'Corporate Governance Report', - i. in clause (2), - 1. in sub-clause (c), after the word "chairperson", the symbol and words ", and with effect from the Annual Report for the year ended 31st March 2019, including separately the names of the listed entities where the person is a director and the category of directorship" shall be inserted. 2. after the existing sub-clause (g), the following new sub-clauses shall be inserted, namely, - "(h) A chart or a matrix setting out the skills/expertise/competence of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsidiaries, on a consolidated basis, to the statutory auditor and all entities in the network firm/network entity of which the statutory auditor is a part." Save as specified otherwise, the amendments to Schedule V shall be applicable in respect of Annual reports filed for the year ended March 31, 2019 and thereafter. Sd/- AJAY TYAGI CHAIRMAN SECURITIES AND EXCHANGE BOARD OF INDIA Footnote: 1. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 were published in the Gazette of India on 2nd September 2015 vide No. SEBI/LAD-NRO/GN/2015-16/013. 2. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, were subsequently amended on: a) December 22, 2015 by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2015 vide notification no. SEBI/LAD-NRO/GN/2015-16/27. b) May 25, 2016 by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2016 vide notification no. SEBI/LAD-NRO/GN/ 2016-17/001. c) July 08, 2016 by Securities and Exchange Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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