Comments
The Securities and Exchange Board of India has said that the top 100 companies must constitute risk management committees immediately, in line with its revised corporate governance norms.
Risk management committees identify, evaluate and mitigate all risks associated with business, interest rates, currencies and other challenges companies face.
A SEBI circular on Thursday said the boards of these companies have to define the roles and responsibilities of the committee and may delegate monitoring and reviewing of the risk management plan to the panel.
All other companies have to implement the revised corporate governance norms by October 1. The norms will be implemented through stock exchanges under Clause 49 of the listing agreement.
The amended norms will apply to all prospective related-party transactions. For existing material related-party contracts or arrangements that are likely to continue after FY15, companies are required to seek shareholder approval at the first annual general meeting after October 1, 2014. They are also free to seek the shareholder nod prior to the meeting.
A related-party transaction is a transfer of resources or obligations between related parties, regardless of whether a price is charged. Parties are considered to be related if at any time during the reporting period one party has the ability to control the other or exercise significant influence over the other party in making financial and operating decisions.
SEBI clarified that the norms would be applicable to banks, financial institutions and insurers only to the extent that it does not violate any norms of their primary regulator — RBI /IRDA. This is not applicable to mutual funds, SEBI said.
Listed companies also have to compulsorily provide an e-voting facility to shareholders for all resolutions. For shareholders without access to e-voting, companies have to seek assent or dissent in writing through a postal ballot.
The monitoring cells of stock exchanges have been mandated to track compliance on disclosures. They must report to SEBI within 60 days of the end of each quarter.
Also read page 13
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.