valid as on 22/10/2020

Regulation 24. Corporate governance requirements with respect to subsidiary of listed entity.
Effective date 01.12.2015

Corporate governance requirements with respect to subsidiary of listed entity.

24. At least one independent director on the board of directors of the listed entity shall be a director on the board of directors of an unlisted material subsidiary, whether incorporated in India or not.

Explanation- For the purposes of this provision, notwithstanding anything to the contrary contained in regulation 16, the term “material subsidiary” shall mean a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.

(1) At least one independent director on the board of directors of the listed entity shall be a director on the board of directors of an unlisted material subsidiary, incorporated in India.

(2)The audit committee of the listed entity shall also review the financial statements, in particular, the investments made by the unlisted subsidiary.

(3)The minutes of the meetings of the board of directors of the unlisted subsidiary shall be placed at the meeting of the board of directors of the listed entity.

(4)The management of the unlisted subsidiary shall periodically bring to the notice of the board of directors of the listed entity, a statement of all significant transactions and arrangements entered into by the unlisted subsidiary.
Explanation.-For the purpose of this regulation, the term “significant transaction or arrangement” shall mean any individual transaction or arrangement that exceeds or is likely to exceed ten percent of the total revenues or total expenses or total assets or total liabilities, as the case may be, of the unlisted subsidiary for the immediately preceding accounting year.

(5)A listed entity shall not dispose of shares in its material subsidiary resulting in reduction of its shareholding (either on its own or together with other subsidiaries) to less than fifty percent or cease the exercise of control over the subsidiary without passing a special resolution in its General Meeting except in cases where such divestment is made under a scheme of arrangement duly approved by a Court/Tribunal .

(6)Selling, disposing and leasing of assets amounting to more than twenty percent of the assets of the material subsidiary on an aggregate basis during a financial year shall require prior approval of shareholders by way of special resolution, unless the sale/disposal/lease is made under a scheme of arrangement duly approved by a Court/Tribunal .

(7)Where a listed entity has a listed subsidiary, which is itself a holding company, the provisions of this regulation shall apply to the listed subsidiary in so far as its subsidiaries are concerned.

Every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its annual report, given by a company secretary in practice, in such form as may be specified with effect from the year ended March 31, 2019.

Substituted vide SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2018 dated 9th May, 2018 effective from 1 April, 2019. To view the notification Click Here
Omitted vide SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2018 dated 9th May, 2018 effective from 1 April, 2019. To view the notification Click Here
Inserted vide the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018 dated 1.06.2018. To view the Notification, Click Here
Inserted vide the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018 dated 1.06.2018. To view the Notification,Click Here
  1. Further relaxation w.r.t. the financial year ending March 31, 2020 provided vide SEBI Circular dated 25.06.2020. The due date for financial year ending March 31, 2020 shall be July 31, 2020. To view the circular, Click Here.
  2. Relaxation w.r.t. the financial year ending March 31, 2020 provided vide SEBI Circular dated 19.03.2020. The due date for financial year ending March 31, 2020 shall be June 30, 2020. To view the circular, Click Here.
  3. Inserted vide SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2018 dated 9th May, 2018 effective from 1 April, 2019. To view the notification Click Here.
  4. To refer the Circular on format for annual secretarial audit report and annual secretarial compliance report for listed entities and their material subsidiaries dated 08.02.2019 Click Here
  1. Extension vide SEBI Circular dated 26.03.2020 provided for implementation of circular on non-compliance with certain provisions of the SEBI LODR and the Standard Operating Procedure for suspension and revocation of trading of specified securities dated 22.01.2020. The revised implementation date is for compliance periods ending on or after June 30, 2020 from earlier date of March 31, 2020. To view the circular, Click Here.
  2. Refer SEBI Circular on non-compliance with certain provisions of the SEBI LODR and the Standard Operating Procedure for suspension and revocation of trading of specified securities dated 22.01.2020 to be implemented for compliance periods ending on or after March 31, 2020. To view the circular Click Here

SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 dated 09.05.2018


The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018 dated 1.06.2018


Circular dated 19.03.2020 regarding relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 due to the CoVID -19 virus pandemic


SEBI Circular dated 25.06.2020 regarding further extension of time for submission of Annual Secretarial Compliance Report by listed entities due to the continuing impact of the CoVID-19 pandemic


SEBI Circular on format for annual secretarial audit report and annual secretarial compliance report for listed entities and their material subsidiaries dated 08.02.2019


SEBI Circular on Further relaxations from compliance with certain provisions of LODR and the SEBI circular dated January 22, 2020 relating to SOP due to the CoVID -19 virus pandemic dated 26.03.2020


SEBI Circular on non-compliance with certain provisions of the SEBI LODR and the Standard Operating Procedure for suspension and revocation of trading of specified securities dated 22.01.2020


CAIRR PLUS on Google Playsecretarial automation?Subscribe for Updates