Tag Archives: listed companies

business responsibility & sustainability reporting

SEBI has mandated vide its circular dated 10th May, 2021 that with effect from financial year 2022-23, top 1000 companies by market capitalization shall report on a new format which incorporates ESG parameters. Gist of circular follows:

In recent times, adapting to and mitigating climate change impact, inclusive growth and transitioning to a sustainable economy have emerged as major issues globally. There is an increased focus of investors and other stakeholders seeking businesses to be responsible and sustainable towards the environment and society. Thus, reporting of company’s performance on sustainability related factors has become as vital as reporting on financial and operational performance.

  1. SEBI vide Circular no. CIR/CFD/CMD/10/2015 dated November 04, 2015 has prescribed the format for the Business Responsibility Report (BRR) in respect of reporting on ESG (Environment, Social and Governance) parameters by listed
  2. In terms of amendment to regulation 34 (2) (f) of LODR Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021, it has now been decided to introduce new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR). The BRSR is accompanied with a guidance note to enable the companies to interpret the scope of disclosures. The format of the BRSR and the guidance note are detailed in Annexure I and Annexure II respectively.
  3. The BRSR seeks disclosures from listed entities on their performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct’ (NGBRCs) and reporting under each principle is divided into essential and
    leadership indicators. The essential indicators are required to be reported on a mandatory basis while the reporting of leadership indicators is on a voluntary basis. Listed entities should endeavor to report the leadership indictors also.
  4. The BRSR is intended towards having quantitative and standardized disclosures on ESG parameters to enable comparability across companies, sectors and time. Such disclosures will be helpful for investors to make better investment decisions. The BRSR shall also enable companies to engage more meaningfully with their stakeholders, by encouraging them to look beyond financials and towards social and environmental impacts.
  5. The listed entities already preparing and disclosing sustainability reports based on internationally accepted reporting frameworks (such as GRI, SASB, TCFD or Integrated Reporting) may cross-reference the disclosures made under such framework to the disclosures sought under the BRSR.
  6. In terms of the aforesaid amendment, with effect from the financial year 2022-2023, filing of BRSR shall be mandatory for the top 1000 listed companies (by market capitalization) and shall replace the existing BRR. Filing of BRSR is voluntary for the financial year 2021-22.

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LODR – amendments

SEBI has vide its notification dated 8th October, 2020 amended the Listing Obligations and Disclosure Requirements Regulations 2015 as follows:

In Chapter V pertaining to obligations of a listed entity which has listed its non convertible debt securities or non convertible redeemable preference shares or both.

Regulation 54(1) pertaining to asset cover has been amended as follows:

  1. [(1) In respect of its listed non-convertible debt securities, the listed entity shall maintain hundred per cent. asset cover or asset cover as per the terms of offer document/Information Memorandum and/or Debenture Trust Deed, sufficient to discharge the principal amount at all times for the non-convertible debt securities issued.]

In earlier version, the wordings highlighted above were not there. It has been added vide this amendment.

Regulation 54(3) has been omitted. Prior to its omission, reg 54(3) read as follows:

“(3) The requirement specified in sub-regulation (1), shall not be applicable in case of unsecured debt securities issued by regulated financial sector entities eligible for meeting capital requirements as specified by respective

So now even unsecured debt securities will be required to keep asset cover as per reg 54(1) ibid.

Regulation 56 pertaining to documentation and intimation to debenture trustees. New clause has been inserted in reg 56(1)(c) as follows, after existing sub-clause (iii).

1[(iv) all covenants of the issue (including side letters, accelerated payment clause, etc.)]

Reg 56(1)(c) pertains to intimations to be made to the debenture trustee by the issuer – intimations regarding revisions in rating, default in timely payment of interest or redemption or both in case of non-convertible securities or failure to create charge on the assets. Now one more clause has been added as above for making intimation to the debenture trustees.

Reg 56(1)(d) has been replaced as follows:

“(d) a half-yearly certificate regarding maintenance of hundred
percent asset cover or asset cover as per the terms of offer document/
Information Memorandum and/or Debenture Trust Deed, including
compliance with all the covenants, in respect of listed non-convertible
debt securities, by the statutory auditor, along with the half-yearly
financial results:
Provided that the submission of half yearly certificate is not
applicable where bonds are secured by a Government guarantee.”

Earlier this certificate could have been issued by a practising CA or CS. Now that is one opportunity lost for us.

In Schedule III, in part A, a new clause has been added. Schedule III pertains to disclosure of events or information in respect of specified securities under regulation 30.

17. Initiation of Forensic audit: In case of initiation of forensic audit,
(by whatever name called), the following disclosures shall be made
to the stock exchanges by listed entities:
a) The fact of initiation of forensic audit along-with name of
entity initiating the audit and reasons for the same, if available;
b) Final forensic audit report (other than for forensic audit
initiated by regulatory / enforcement agencies) on receipt by the
listed entity along with comments of the management, if any.


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rights issues

SEBI press release dated 23rd September, 2020 streamlining the eligibility criteria for a listed company to come out with a rights issue and truncated disclosure requirements, doing away with duplication of information, already in the public domain.

SEBI has decided to amend SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 to rationalise eligibility criteria and disclosure requirements for Rights Issues’ with an objective to make the fund raising through this route, easier, faster and cost effective.
The key amendments include:

  1. Issuer shall be eligible to make truncated disclosures in terms of Part B :
    i. where it has been filing periodic reports/ statements/ information in
    compliance with Listing Regulations as applicable, for last one year instead of last three years as required earlier.
    ii. where three years have passed after change in management pursuant to acquisition of control or Listing consequent to a scheme of arrangement.
  2. All other issuers not satisfying Part B eligibility conditions shall make disclosures in terms of new set of proposed disclosures i.e. Part B-1. Part B-1 disclosures would be more detailed than Part B, but truncated compared to Part A, which is meant for IPO/FPO offer document.
  3. Disclosure requirements under Part B have been rationalized to avoid duplication of information in letter of offer, especially the information which is already available in public domain and is disclosed by the companies in compliance with the disclosure requirements under SEBI Listing regulations.
  4. Threshold increased from Rs. 10 crores to Rs 50 crores, for filing requirement of Rights issue draft letter of offer with the Board for its observations.
  5. Mandatory 90% minimum subscription criteria for Rights Issue shall not be applicable to those issuers where object of the issue involves financing other than financing of capital expenditure for a project, provided that the promoters and promoter group of the issuer undertake to subscribe fully to their portion of rights entitlement.
  6. Issuer shall be eligible to make Fast Track Rights Issue, in case of pending showcause notices in respect to adjudication, prosecution proceedings and audit qualification, provided that necessary disclosures along with potential adverse impact on the issuer are made in the letter of offer.
  7. The amendments will be effective from the date it is notified in the Gazette.


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proxy advisors

SEBI has issued two circulars, both dated 27th August, 2020 wherein they have extended the time line for compliance of procedural guidelines for proxy advisors and the dispute resolution mechanism between listed entities and proxy advisors by 4 months. Now they will become applicable from 1st January, 2021 onwards.



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SEBI circular dated 13th August, 2020 laying down standard operating procedure for redressal of grievances by listed companies.

Investors are encouraged to initially take up their grievances for redressal with the concerned listed company directly. SCORES platform can also be used to submit grievances directly to the company for resolution, if the complainant has not approached the company earlier. Companies are expected to resolve the complaint directly.

In case the company does not redress the complaint within 30 days from the date of receipt of the complaint, such direct complaints shall be forwarded to Designated Stock Exchange (DSE) through SCORES. Basically it means that the investor will have to complain again in the SCORES system if the company has not redressed his grievance within 30 days.

At the time of lodging the complaint through SCORES platform, in case the
complainant had approached the company earlier, the complainant shall submit all such details of the complaint in SCORES i.e., period of cause of event, date of grievance taken up with the entity, address of the company corresponded earlier, etc. Such complaints shall be forwarded to the DSE. This is not clear, when the complaint is filed at the SCORES platform, then why the necessity to forward complaints to the stock exchange.

Upon receipt of the complaint through SCORES platform, the SE shall take up the complaint with the company. The company is required to redress the complaint and submit an Action Taken Report (ATR) within 30 days from the date of receipt of such complaint. So basically it means that enforcement of SCORES is done by the respective stock exchange.

In case the ATR is not submitted by the company within 30 days or SE is of the opinion that the complaint is not adequately redressed and the complaint remains pending beyond 30 days, a reminder shall be issued by SE to the listed company through SCORES directing expeditious redressal of the grievance within another 30 days. SE should ensure that the ATRs are not frivolous. Company asking for further documents or information is not tantamount to redressal of the complaint.

On being adequately satisfied with the response of the company with respect to the complaint, the stock exchange shall submit an ATR to SEBI. It should be “fully satisfied” rather than adequately satisfied, which is very vague.

For any failure to redress investor grievances pending beyond 60 days by listed companies, stock exchange shall initiate appropriate action against the listed company as detailed below.

SEBI circular empowers the stock exchanges to levy fines and if the fines are not paid or the complaints are not redressed, then the promoter’s shareholding can be frozen. Stock exchanges can levy a fine of upto Rs.1000/- per day for those complaints which are not redressed within the stipulated time period. Stock exchanges have power to take any other action as it may deem fit beyond the levy of fines and freezing of the shareholding of the promoters.

Then it has laid down procedures after the fines have been paid for the unfreezing of the promoters’ shares in the exchange. After this period, payment of fines levied is mandatory. Even if the complaint has been redressed, the shares will not be unfrozen until and unless the fines have been paid.

This circular will come into force from 1st September, 2020,

Copy of the circular can be found here


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SEBI has decided vide its public notice dated 11th August, 2020 that going forward all complaints against listed entities, SEBI registered intermediaries and SEBI registered market infrastructure institutions have to be made only on the SCORES platform. People cannot anymore send complaints to the SEBI e-mail id or to the e-mail id of the officers of the SEBI. But even before this change, any e-mail sent to the SEBI e-mail id i.e. sebi@sebi.gov.in was never used to be attended. That was their apathy. I have sent so many mails against the mutual funds to the SEBI e-mail ids, but they never bothered to reply even, forget about redressing the same.

SCORES is an online platform on which the person who wants to make a complaint has to register himself giving his PAN and other details and nowadays there is a web application too.

Don’t know the efficacy of SCORES platform, since i have not tried it so far.

SEBI circular can be found here i.e .


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SEBI relaxation – mar 20 a/cs

SEBI has vide their circular dated 24/6/20 further relaxed the timeline for submission of financial results by listed entities for their march 20 quarterly as well as final audited results by one more month upto 31st July, 2020. Earlier it was relaxed upto 30th June, 2020

Under Regulation 33 and 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”) listed companies have to submit their quarterly and annual financial results within 45 days from the end of the quarter/ financial year. This year due to Covid, relaxations were given to the companies in view of the office lockdown situation.

SEBI circular can be found here


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Minimum Public Shareholding


SEBI has issued a circular (as per above) dated 14th May, 2020 wherein those listed companies where minimum public shareholding requirements falls between March 2020 to August 2020 – any action taken against such companies shall be withdrawn or not initiated. 


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acquisition of shares – exemption

SEBI vide its order dated 10th February, 2020 exempted MOFT from the applicability of regulations 3 & 5 of SEBI (SAST) Regulations 2011 on the ground that the inter se transfer of shares was between connected persons, there is no change in the shareholding of the company, public interest is not affected etc. SEBI granted the exemption. Gist of the case is given below

  • Target Company : MOFSL
  • Acquirer : MOFT(trust)
  • As per the application made to SEBI it indicates that Motilal Oswal holds 50% shares in PIMPL which constitutes 56.78% of MOFSL.
  • MOFSL is a subsidiary of PIMPL.
  • Motilal Oswal intends to gift its shareholding in PIMPL to MOFT by a registered deed dated on 15 Oct, 2019.
  • The propose acquisition of 50% shares of PIMPL will results into indirect acquisition of control over the target company.
  • Grounds on which the application was made to grant exemption is as under:-
    • The transfer of shares of Motilal Oswal to the acquirer is to its own family trust members and to any third party.
    • Also regulation 10 provides for exemption from making an open offer in case of such type of acquisition.
    • Proposed indirect acquisition is a non commercial transaction which will not affect the interest of public shareholding of Target Company.
    • MOFT will be considered as part of promoter group of PIMPL after the said acquisition as well as of the Target Company.
    • Also the said acquisition will not alter the board of directors of Target Company.
    • There shall be no change of control of PIMPL and Target Company through acquirer.
    • The propose transfer is just an internal reorganization of target company. Further such transfer would not results into any increase or decrease in the holding of transferor in PIMPL and Target Company.
  • Acquirer has made an application to SEBI and confirmed to comply with the guidelines mention in SEBI circular dated on 22 Dec, 2017.
  • After the acquisition the acquirer will hold total 50% of equity capital in PIMPL.
  • It is noted that there is no change in in the public shareholding and control of Target Company after the acquisition.
  • But the Target Company shall continue to be in compliance with the minimum public shareholding as required.
  • After considering the application made to SEBI and considering the above facts the SEBI has granted exemption under regulation 11 subject to certain conditions which are as follows:-
    • The proposed acquisition shall be in accordance with the requirements of Companies Act, 2013.
    • After the post-acquisition the acquirer shall file a report within 21 days.
    • The acquirer shall comply with the provisions of SEBI Circular dated on 22 Dec, 2017.
    • It is to be noted that the exemption granted as above shall be limited to the requirements of making open offer and shall not be construed as exemption from the disclosure requirements as per SEBI Regulations.

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