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NCLT Scheme / SEBI LODR

NCLT Scheme and LODR: Corporate Governance Report

The first post-scheme corporate governance report must reflect the enlarged board, the reconstituted committees, and the revised shareholding. The report is the primary disclosure of the transferee’s governance architecture after the merger.

29 Oct 20262 min read

The Reconstituted Board

After the scheme, the transferee’s board may change: the transferor’s nominee directors may join, the independent directors may be re-constituted, and the committees may be re-formed. The corporate governance report must disclose the new composition, the directors’ independence, and the committee membership.

The Committee Reconstitution

The audit committee, the nomination and remuneration committee, the stakeholders relationship committee, and the risk management committee must be reconstituted to comply with the LODR and the Companies Act. The report must disclose the composition, the meetings held, and the attendance.

The Shareholding Pattern

The corporate governance report includes the shareholding pattern as on the quarter-end. The post-scheme pattern must reflect the new shareholders, the promoter group’s holding, and the public shareholding. A pattern that does not reconcile with the register of members is a disclosure defect.

The Compliance Certificate

The report includes a certificate from the practising company secretary confirming the compliance with the LODR and the Companies Act. The certificate should cover the post-scheme period, and any qualification should be explained by the board.

The Documentation

The file should contain: the reconstituted board and committee resolutions; the shareholding pattern; the compliance certificate; and the governance report. A scheme that is implemented without the governance report update is incomplete on the LODR front.

Call to Action: For post-scheme corporate governance report preparation, committee reconstitution, or compliance certificate coordination, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.

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