In order to solve certain practical difficulties, complexities, and ambiguities, related with the provisions and regulations given in the revised Clause 49 of the Equity Listing Agreement [presented by SEBI's Circular Dated April 17, 2014], and ensure easy and strict compliance with these provisions, SEBI has now introduced certain amendments in the revised clause 49, through its Circular Dated September 15, 2014. The provisions and regulations presented by this amended Clause 49, will be effective from October 01, 2014; except the provisions regarding the appointment of woman directors. These amendments are made by the Securities and Exchange Board of India (SEBI), as per the powers given in Section 11 of the SEBI Act of 1992, to facilitate easier implementations and compliances to the provisions of the revised Clause 49 of the capital market regulator, and the new company law of India, the Companies Act of 2013. All specified companies and recognized stock exchanges of India are required to follow these new provisions.Some of the main and most significant features of the Clause 49 of the Equity Listing Agreement, after these amendments, are the following:
- The provisions of the amended Clause 49 are strictly applicable to all those public limited companies whose equity shares are properly listed on the recognized stock exchanges of India. However, for time being, these provisions are not made mandatory to companies having the total paid up equity share capital equaling INR-10 Crore, and the Net Worth amounting to a maximum of INR-25 Crore, reckoned on the very last day of the previous financial year.
- The provisions concerned with the appointment of at least one woman director, shall be in force from April 01, 2015. The concerned companies are bound to sponsor some familiarization programmes to help the woman directors in becoming well-acquainted with the concerns, priorities, and objectives of the respective company; and such programmes must be published on the website of the company. As per a rough estimate, more than half of the total number of companies listed on the national stock exchanges, are yet to appoint any woman director.
- The nomination and remuneration committee established by the Board (of Directors) of the company shall contain at least three non-executive directors, mostly independent. The Chairman of this committee will also be an independent director. The Chairperson of the company may be made a member to this committee, but shall not preside over.
- For selling, disposing, or leasing of assets forming more than 25% of the assets of the material subsidiary, shall necessitate prior approval of the shareholders and passing a resolution in the general meeting, except the cases which conform to any schemes of arrangement properly passed by a court/tribunal.
- The company shall devise policies on the materiality of the related party transactions (RPTs), and also on the flawless and fair dealing with the RPTs, in light of the rules and regulations introduced in the amended Clause 49. The company must display its policy on dealing with the RPTs on its website.
- The Clause 49 [VIII] (F), (G), and (H), have been deleted in this amended Clause 49.
To get detailed information about these latest amendments made to the revised Clause 49 of the Equity Listing Agreement of SEBI http://www.sebi.gov.in/cms/sebi_data/attachdocs/1410777212906.pdf