SEBI issued a circular amending clause 35 B and 49 of the Equity Listing Agreement. As per the circular, Top 100 companies shall set up risk management committee. The companies shall also provide e-voting platform for its shareholders for resolutions to be passed in general meetings. The circular gives detailed list of disclosures and practices required for Corporate governance(Clause 49). For listed entities which are not companies, but body corporate or are subject to regulations under other statutes (e.g. banks, financial institutions, insurance companies etc.), the Clause 49 will apply only to the extent that it does not violate their respective statutes and guidelines or directives issued by the relevant regulatory authorities. The Clause 49 is not applicable to Mutual Funds.
The Circular also gives strict norms for related party transaction. A related party transaction is a transfer of resources, services or obligations between a company and a related party, regardless of whether a price is charged. A ‘related party' is a person or entity that is related to the company. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party, directly or indirectly, in making financial and/or operating decisions.
The circular is very important one and you may click here to read full circular.