According to SEBI LODR (fourth amendment) Regulation, which is effective from April 1, 2019, Every Listed Company is required to take a certificate from a Company Secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority as per item 10(i) of Part C of Schedule V of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015.
REASON BEHIND INSERTION OF NEW CLAUSE
In continuation to make all the entities compliance full and track the shell companies, Government came with a notification to Struck off the 2.25 Lacs of companies for non-filing of the Financials for last 3 years. Then the Directors of those companies were disqualified by the Ministry for 5 years under section 164(2) of Companies Act, 2013. But still, these Directors are continuing to hold Directorship in some other active Companies. To track all these Directors SEBI Amended its provisions and required a compliance certificate from Practicing Company Secretary to be obtained by the company that the Directors of the company are not Disqualified or debarred to hold the Directorship.
DISCLOSURES PERTAINING TO DISQUALIFICATION OF DIRECTORS
[SEBI (LODR) (AMENDMENT) REGULATIONS, 2018, PARA 3(X)(C)(III)]
The Amendments introduce a requirement to disclose a certificate from a company secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as the directors of companies by the board / MCA or any such statutory authority. In the past, there was no specific provision in the Companies Act and SEBI (LODR) Regulations for the same. But now all listed entities will need to comply with this amendment in the annual report filed for the year ending 31 March 2019 and thereafter.
DISCLOSURE FORMAT TO BE USED BY THE PRACTICING COMPANY SECRETARY
On 18th May 2019, The Institute of Company Secretaries of India issued a recommendatory format to be used by all the Practicing Company Secretaries to restrict the diversified formats of this certificate.
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS
(pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)
The Members of
I/We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of __________ Limited having CIN ________________ and having registered office at _______________ (hereinafter referred to as ‘the Company’), produced before me/us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub-clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In my/our opinion and to the best of my/our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me / us by the Company & its officers, I/We hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31st March, 2019 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, ___________ or any such other Statutory Authority except Mr._____________ (DIN ____________) who has been debarred/ disqualified by ____________[give name of Statutory Authority and reason].
Name of Director
Date of Appointment in Company
Ensuring the eligibility of for the appointment/continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.
After these amendments, SEBI is looking forward to strengthening then compliance part and to detect those Directors who are the wrong doer. Although these regulations are applicable to the Listed entities only but we recommend every company to take opt this disclosure and file it to Registrar of Companies by passing resolution in MGT-14 so that Ministry must be aware of those Directors who are disqualified by any of the authority or by their act for holding the Directorship by the director in any of the company.
Qualification: COMPANY SECRETARY Company: SACHIN MAVI & ASSOCIATES Location: NOIDA
Member Since: 28 Jul 2018 | Total Articles Contributed:6
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