The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”) require every listed entity to include a corporate governance report in its annual report. The report is the principal disclosure document on the company's governance practices, and it is scrutinised by investors, proxy advisers, and regulators.
The Applicability
The corporate governance report is mandatory for every listed entity that has listed its specified securities. The report must be included in the annual report, and it must be submitted to the stock exchanges. The regulation applies to the listed entity on a consolidated basis, and it covers the entity's subsidiaries where the regulation so requires.
The Contents
The corporate governance report must disclose the composition of the board, the number of independent directors, the board meetings, the committees (audit, nomination and remuneration, stakeholders' relationship, and risk management), the remuneration of the directors, the general body meetings, the means of communication, the shareholding pattern, the compliance with the mandatory and non-mandatory requirements, and the certification of the CEO and CFO.
The report must also disclose the company's policies on related party transactions, risk management, and whistleblower protection. The report is a comprehensive document, and it must be updated annually.
The Certification
The CEO and CFO must certify that the financial statements are true and fair, that the internal controls are adequate, and that the company has complied with the laws. The certificate is included in the corporate governance report, and it is a key element of the board's accountability.
The Consequences of Non-Compliance
The failure to include the corporate governance report, or to comply with its contents, attracts the penalty prescribed by the LODR. The stock exchanges can impose fines, and SEBI can take enforcement action. The report is a public document, and the non-compliance is visible to the investors.
Call to Action
Anuj Desai & Associates advises listed entities on the corporate governance report—from the board and committee disclosures and the remuneration to the CEO and CFO certification and the LODR compliance. If your company's governance report is due, we can help you prepare it.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
🔗 linkedin.com/in/ca-anuj-desai-122547230
Article 169