Additional Topics (Chapter 5)

Additional Compliances
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Quarterly compliance
The listed entity shall submit to the stock exchange a Quarterly Basis to the stock exchange till such time the issue proceeds
statement of deviation or variation (for public issue, have been fully utilized or the purpose for which these proceeds were
rights issue, preferential issue etc.) raised has been achieved.
Half yearly compliance
The listed entity shall submit to the stock exchange, within thirty days from the date of publication of its standalone and
disclosures of related party on consolidated basis. consolidated financial results for the half year.
The listed entity shall also submit as part of its Once in six month.
standalone or consolidated financial results for the
half year a statement of assets and liabilities and a
statement of cash flows by way of a note.
Yearly compliances
In case any changes to the annual report, the revised within 48 hours after the annual general meeting
copy along with the details of and explanation for the
changes shall be sent
The listed entity shall send annual report to the hold- The listed entity shall send annual report to the holders of securities
ers of securities
Event based compliances
The listed entity shall disclose to the stock exchange within 24 hours from the occurance of the event
the deemed material events i.e., receipt of request for
re-classification by the listed entity from the promoter
(s) seeking re-classification; Minutes of the board
meeting considering such request which would in-
clude the views of the board on the request; etc.
The listed entity shall issue certificates or receipts or within thirty days from the date of such lodgement
advices, as applicable, of subdivision, split, consolida-
tion, renewal, exchanges, endorsements, issuance of
duplicates thereof or issuance of new certificates or
receipts or advices, as applicable, in cases of loss or
old decrepit or worn out certificates or receipts or
advices, as applicable
Transfer or transmission or transposition of securities Requests for effecting transfer of securities shall not be processed un-
less the securities are held in the dematerialized form with a depositor
The listed entity shall register transfers of its securities within fifteen days from the date of such receipt of request for transfer.
in the name of the transferee(s) and issue certificates
or receipts or advices, as applicable, of transfers; or
issue any valid objection or intimation to the transfer-
ee or transferor, as the case may be,
The listed entity shall proceed the transmission re- a) In case securities held in Dematerialisated Mode - within seven days
quest for securities held in dematerialization mode after receipt of the documents
and physical mode b) In case of Physical Mode – within 21 days after receipt of the docu-
ments
The listed entity shall intimate the record date or date In case of Right Issue : At least three working days in advance.
of closure of transfer books to all the stock exchange Other than Right Issue: At least 7 clear working days in advance

Dividend Distribution Policy by the top five hundred To formulate a dividend distribution policy which shall be disclosed in
listed entities based on market capitalization their annual reports and on their websites
(calculated as on March 31 of every financial year)
Corporate Governance norms under LODR
COMPOSITION OF BOARD OF DIRECTORS
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Board of Directors shall have optimum combination of executive and non-executive directors with at least one-woman director.
The Composition of board of directors of the listed entity shall be as follows:
• In case chairperson is executive director not less than fifty percent of the board of directors
shall comprise of non executive directors

• In case chairperson is a non-executive director at least one-third of the board of directors shall com-
prise of independent directors

• In case listed entity does not have a regular non- executive chair- at least half of the board of directors shall comprise
person of independent directors

In case- at least half of the board of directors shall be inde-

pendent directors
 non-executive chairperson is a promoter of the listed entity or

 is related to any promoter or person occupying management

positions at the level of board of director or at one level below
the board of directors

Appointment of Woman Director

The Board of directors of the top 500 listed entities shall have at least one independent woman director by April 1, 2019 and the
Board of directors of the top 1000 listed entities shall have at least one independent woman director by April 1, 2020.
Size of the Board
The board of directors of the top 1000 listed entities (with effect from April 1, 2019) and the top 2000 listed entities (with effect
from April 1, 2020) shall comprise of not less than six directors.
Where the listed company has outstanding SR equity shares, atleast half of the board of directors shall comprise of independent
directors.
With effect from April 1, 2022, the top 500 listed entities shall ensure that the Chairperson of the board of such listed entity shall
(a) be a non-executive director;
(b) not be related to the Managing Director or the Chief Executive Officer as per the definition of the term “relative” defined un-
der the Companies Act, 2013.
The quorum for every meeting of the board of directors of the top 1000 listed entities with effect from April 1, 2019 and of the
top 2000 listed entities with effect from April 1, 2020 shall be one-third of its total strength or three directors, whichever is high-
er, including at least one independent director.

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Various Policies to be maintained by Listed Compa-
nies
LIABILITY OF A LISTED ENTITY FOR
 Preservation of documents Policy CONTRAVENTION
 Policy on determining "material subsidiary" The listed entity or any other person thereof
 Risk Management Policy who contravenes any of the provisions of these
SEBI (LODR) regulations, shall, in addition to
 Code of Conduct liability for action in terms of the securities
laws, may be liable for the following actions by
 Vigil Mechanism the respective stock exchange:
 Materiality of related party transactions and on dealing (a) imposition of fines;
with related party transactions
(b) suspension of trading;
 Criteria for granting omnibus approval for Related Party
Transactions (c) freezing of promoter/promoter group
holding of securities
 Policy on determination of materiality
(d) any other action as may be specified by the
 Dividend Distribution Policy SEBI from time to time
 Board Diversity Policy
 Criteria for evaluation of performance of independent
directors and the board of directors.
5 
COMMON OBLIGATIONS OF LISTED ENTITIES
A listed company shall appoint a qualified Company Secretary as the Compliance officer .
 The listed entity shall appoint a share transfer agent or mange the share transfer facility in house .
 Co-operation with intermediaries registered with the SEBI.
 listed entity shall have a policy for preservation of documents, approved by its board of directors, classifying them in at least
two categories as follows- documents whose preservation shall be permanent in nature » documents with preservation pe-
riod of not less than eight years after completion of the relevant transactions.
 The listed entity shall file the reports, statements, documents, filings and any other information with the recognised stock
exchange.
 The listed entity shall use any of the electronic mode of payment facility approved by the Reserve Bank of India, in the man-
ner specified in Schedule I, for the payment of dividends, interest, redemption or repayment amounts..
 The listed entity shall ensure that adequate steps are taken for expeditious redressal of investor complaints.
 Fees and other charges to be paid to the recognized stock exchange.

Related Party Transactions

As per Regulation 2(1) (zb) “related party” means a related party as defined under sub-section (76) of section 2 of the
Companies Act, 2013 or under the applicable accounting standards.
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Provided that any person or entity belonging to the promoter or promoter group of the listed entity and holding 20% or more of
shareholding in the listed entity shall be deemed to be a related party any other action as may be specified by the SEBI from time
to time.
All RPT shall require prior approval of the audit committee(ID). (Audit committee may grant omnibus approval)
All material related party transactions shall require approval of the shareholders through resolution and no related party shall vote
to approve such resolutions.

When will a transaction with a related party be material?

 a transaction with a related party shall be considered material, if the transaction(s) to be entered into individually or taken
together with previous transactions during a financial year, exceeds Rs. 1000 crore or 10% of the annual consolidated turnover
of the listed entity as per the last audited financial statements of the listed entity, whichever is lower.”
 With effect from July 01, 2019 a transaction involving payments made to a related party with respect to brand usage or royalty
shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions
during a financial year, exceed five percent of the annual consolidated turnover of the listed entity as per the last audited fi-
nancial statements of the listed entity.

a consolidated approval given in respect of transaction(s) which are repetitive in nature.

Omnibus Approval: Audit committee may grant omnibus approval for related party transactions proposed to be entered into by
the listed entity subject to the following conditions-
(a) the audit committee shall lay down the criteria for granting the omnibus approval in line with the policy on related party trans-
actions of the listed entity and such approval shall be applicable in respect of transactions which are repetitive in nature;
(b) the audit committee shall satisfy itself regarding the need for such omnibus approval and that such approval is in the interest
of the listed entity;
(c) the omnibus approval shall specify: (i) the name(s) of the related party, nature of transaction, period of transaction, maximum
amount of transactions that shall be entered into, (ii) the indicative base price / current contracted price and the formula for
variation in the price if any; and (iii) such other conditions as the audit committee may deem fit. However, where the need for
related party transaction cannot be foreseen and aforesaid details are not available, audit committee may grant omnibus ap-
proval for such transactions subject to their value not exceeding rupees one crore per transaction.
(d) the audit committee shall review, at least on a quarterly basis, the details of related party transactions entered into by the
listed entity pursuant to each of the omnibus approvals given.
(e) Such omnibus approvals shall be valid for a period not exceeding one year and shall require fresh approvals after the expiry of
one year.
7 Corporate Governance requirements related to Subsidiary

“Material Subsidiary” shall mean a subsidiary, whose income or net worth exceeds ten percent of the consolidated income or
net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.
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.
The audit committee of the listed entity shall review the financial statements, in particular, the investments made by the unlisted
subsidiary.
The minutes of the meetings of the board of directors of the unlisted subsidiary shall be placed at the meeting of the board of di-
rectors of the listed entity.
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 .

Corporate Governance requirements related to Independent Directors

(a) The independent directors of the listed entity shall hold at least one meeting in a financial year, without the presence
of non-independent directors and members of the management and all the independent directors shall strive to be
present at such meeting.
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(b) An independent director who resigns or is removed from the board of directors of the listed entity shall be replaced by a new
independent director by listed entity at the earliest but not later than the immediate next meeting of the board of directors or
three months from the date of such vacancy, whichever is later. (Where the listed entity fulfils the requirement of independ-
ent directors in its board of directors without filling the vacancy created by such resignation or removal, the requirement of
replacement by a new independent director shall not apply)
(c) Every independent director shall, at the first meeting of the board in which he participates as a director and thereafter at the
first meeting of the board in every financial year or whenever there is any change in the circumstances which may affect his
status as an independent director, submit a declaration that he meets the criteria of independence.

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Prior intimation to stock exchange about the meeting of the board of directors
At least 2 Clear Days in adv At least 2 Clear Days in adv. At least 2 Clear Days in adv.

 financial results viz.  proposal for buyback of securities;  an alteration in the form or nature of
quarterly, half yearly, non-convertible securities that are
 proposal for voluntary delisting
or annual, as the case listed on the stock exchange or in the
may be;  fund raising by way of FPO, rights issue, ADR/GDR/ rights or privileges of the holders
FCB, QIP, debt issue, preferential issue or any other thereof;
method and for determination of issue price:
 an alteration in the date of the inter-
 fund raising by way of issuance of non-convertible est/ dividend/ redemption payment of
securities; non-convertible securities or any
 declaration/ recommendation of dividend, issue of matter affecting the rights or interests
convertible securities including convertible deben- of holders of non-convertible securi-
tures ties.

 declaration of bonus securities

Outcome of Meetings of the board of directors (to be disclosed within 30 minutes of the closure of the meeting)
a) dividends and/or cash bonuses recommended or declared or the decision to pass any dividend and the date on which
dividend shall be paid/dispatched; 10
b) any cancellation of dividend with reasons thereof;
c) the decision on buyback of securities;
d) the decision with respect to fund raising proposed to be undertaken
e) increase in capital by issue of bonus shares through capitalization including the date on which such bonus shares shall be cred-
ited/dispatched;
f) reissue of forfeited shares or securities, or the issue of shares or securities held in reserve for future issue or the creation in
any form or manner of new shares or securities or any other rights, privileges or benefits to subscribe to;
g) short particulars of any other alterations of capital, including calls;
h) financial results;
i) decision on voluntary delisting by the listed entity from stock exchange(s).
11 MEETINGS OF SHAREHOLDERS AND VOTING
 The top 100 listed entities by market capitalization, determined as on March 31st of every financial year, shall hold
their annual general meetings within a period of five months from the date of closing of the financial year.
 The top 100 listed entities shall provide one-way live webcast of the proceedings of the annual general meetings.

REGULATIONS APPLICABLE ON TOP 500, TOP 1000 AND TOP 2000 LISTED ENTITIES
TOP 500 LISTED ENTITIES
the Chairperson of the board of such listed entity shall – (a) be a non-executive director; (b) not be related to the Man-
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aging Director or the Chief Executive Officer as per the definition of the term “relative” defined under the Companies Act,
2013.
TOP 1000 LISTED ENTITIES
Board of directors shall have at least one independent woman director by April 1, 2020.
The provisions of Risk Management Committee shall be applicable to top 1000 listed entities.
The top 1000 listed entities shall formulate a dividend distribution policy which shall be disclosed on the website of the listed enti-
ty and a web-link shall also be provided in their annual reports.
Entities shall undertake Directors and Officers insurance (‘D and O insurance’) for all their independent directors of such quantum
and for such risks as may be determined by its board of directors.
TOP 2000 LISTED ENTITIES
The board of directors shall comprise of not less than six directors.
The quorum for every meeting of the board of directors shall be one-third of its total strength or three directors, whichever is high-
er, including at least one independent director.

13 Maximum Number of Directorships / Committee Membership & Chairpersonship

 A person shall not be a director in more than seven listed entities with effect from April 1, 2020. However a person
shall not serve as an independent director in more than seven listed entities.
 Any person who is serving as a whole time director / managing director in any listed entity shall serve as an independent direc-
tor in not more than three listed entities.
(Note: - For the purpose of this regulation, the count for the number of listed entities on which a person is a director / independ-
ent director shall be only those whose equity shares are listed on a stock exchange)

 A director shall not be a member in more than ten committees or act as chairperson of more than five committees across all
listed entities in which he / she is a director which shall be determined as follows:
A) the limit of the committees on which a director may serve in all public limited companies, whether listed or not, shall be in-
cluded and all other companies including private limited companies, foreign companies and companies under Section 8 of the
Companies Act, 2013 shall be excluded;
B) for the purpose of determination of limit, chairpersonship and membership of the audit committee and the Stakeholders’ Re-
lationship Committee alone shall be considered.