Comparison for New Clause 49 - With Old Clause 49

8/10/2019 Comparison for New Clause 49 - With Old Clause 49

1/30

CLAUSE 49 OF THE LISTING AGREEMENT

CORPORATE GOVERNANCE

Comparison between the provisions of Old Clause 49 of the Listing Agreement and the

provisions of the said Clause after considering the amendments which are effective

from 01.10.2014 and Circular dated 15thSeptember, 2014 issued by SEBI

Sl. No. New Clause 49 Applicable from 1/10/2014 Old Clause 49

Applicability

of Clause 49

The new Clause 49 shall be applicable to all listedcompanies, however the compliances will not bemandatory for time being in respect of following classof companies:

i) companies having paid up equity capital/ net worthnot exceeding Rs. 10/ Rs. 25 crores as on last dayof previous financial year. However on applicabilitythe same shall be complied with six moths from its

applicabilityii) companies whose equity shares are listed

exclusively on SME and SME-ITP platforms.

No such provision

I. Shareholders

A.

Rights of Shareholders

1. The company should seek to protect and facilitate theexercise of shareholders rights.i) The Right to participate in, and to be sufficiently

informed on, decisions concerning fundamentalcorporate changes

ii)

The opportunity to participate effectively and vote ingeneral shareholder meetings.

iii)

Should be informed of the rules, including votingprocedures.

iv)

Shareholders should have the opportunity to askquestions to the board, to place items on the agendaof general meetings, and to propose resolutions,subject to reasonable limitations.

v) Effective shareholder participation in key CorporateGovernance, decisions should be facilitated.

vi) The exercise of ownership rights by all shareholders,including institutional investors, should be facilitated.

vii)Company should have an adequate mechanism toaddress the grievances of the shareholders

viii)Minority shareholders should be protected fromabusive actions, either directly or indirectly, andshould have effective means of redress.

No such provision

2. The company should provide adequate and timelyinformation to shareholders.

i) Shareholders should be furnished with sufficientand timely information, as well as full informationregarding the issues to be discussed at the meeting.

ii) Capital structures and arrangements that enablecertain shareholders to obtain a degree of controldisproportionate to their equity ownership should bedisclosed.

iii)

All investors should be able to obtain informationabout the rights attached to all series and classesof shares before they purchase.

No such provision


2/30

3 The company should ensure equitable treatment ofall shareholders, including minority and foreignshareholders.

i) Shareholders of the same series of a class should betreated equally.

ii)

Effective shareholder participation in key CorporateGovernance decisions.

iii) Exercise of voting rights by foreign shareholdersshould be facilitated.

iv) Company should devise a framework to avoidInsider trading and abusive self-dealing.

v) Processes and procedures should allow for equitabletreatment of all shareholders.

vi) Company procedures should not make it undulydifficult or expensive to cast votes.

No such provision

B.

Role of stakeholders in Corporate Governance

4. The company should recognize the rights ofstakeholders and encourage co- operation betweencompany and the stakeholders.

i)

Rights that are established by law or throughmutual agreements are to be respected.

ii)

Stakeholders should have the opportunity to obtaineffective redress for violation of their rights.

iii) Company should encourage mechanisms foremployee participation.

iv)

Stakeholders should have access to relevant,sufficient and reliable information on a timely andregular basis.

v) Company Should Devise an Effective Whistle BlowerMechanism.

No such provision

C.

Disclosure and Transparency5. The company should ensure timely and accurate

disclosure on all material matters including the

financial situation, performance, ownership, and

governance of the company

i) Information should be prepared and disclosed in

accordance with the prescribed standards of

accounting, financial and non-financial disclosure

ii) Channels for disseminating information should

provide for equal, timely and cost efficient access to

relevant information by users.

iii)

The company should maintain minutes of themeeting explicitly recording dissenting opinions, if

any.

iv)The company should implement the prescribed

accounting standards in letter and spirit in the

preparation of financial statements, and should also

ensure that the annual audit is conducted by an

independent, competent and qualified auditor.

No such provision


3/30

S.No New Clause 49 applicable from 1/10/2014 Old Clause 49

D. Responsibilities of the Board

6. Disclosure of Informationi) Members of the Board and key executives

should disclose to the board whether they,directly, indirectly or on behalf of third parties,

have a material interest in any transaction ormatter directly affecting the company.ii) The Board and top management should meet

the expectations of operational transparency tostakeholders while at the same time maintainingconfidentiality of information.

No such provision

7. Key functions of the Board

i) Reviewing and guiding corporate strategy,major plans of action, risk policy, annualbudgets and business plans; settingperformance objectives; monitoring

implementation and corporate performance;and overseeing major capital expenditures,acquisitions and divestments.

ii) Selecting, compensating, monitoring and, whennecessary, replacing key executives andoverseeing succession planning.

iii)

Aligning key executive and boardremuneration with the longer term interestsof the company and its shareholders.

iv)Ensuring a transparent board nominationprocess with the diversity of thought,experience, knowledge, perspective and gender

in the Board.v) Monitoring and managing potential conflicts of

interest of management, board members andshareholders, including misuse of corporateassets and abuse in related party transactions.

vi)Ensuring the integrity of the companysaccounting and financial reporting systems,including the independent audit,

vii)

Overseeing the process of disclosure andcommunications,

viii) Monitoring and reviewing Board Evaluationframework

No such provision


4/30


8. Other responsibilitiesi) The Board should provide the strategic

guidance to the company, ensure effectivemonitoring of the management and should beaccountable to the company and theshareholders.

ii)

The Board should set a corporate cultureand the values by which executivesthroughout a group will behave.

iii) Board members should act on a fully informedbasis, in good faith, with due diligence andcare, and in the best interest of the companyand the shareholders.

iv) The Board should encourage continuingdirectors training to ensure that the Boardmembers are kept up to date.

v)

Where Board decisions may affect differentshareholder groups differently, the Board

should treat all shareholders fairly.vi) The Board should apply high ethical standards

and should be able to exercise objectiveindependent judgment on corporate affairs.

vii)The Board should be able to exercise objectiveindependent judgment on corporate affairs.

viii) Boards should consider assigning asufficient number of non-executive Boardmembers capable of exercising independent

judgment to tasks where there is a potential forconflict of interest.

ix)The Board should ensure that, while rightly

encouraging positive thinking, these do notresult in over-optimism that either leads tosignificant risks not being recognized orexposes the company to excessive risk.

x) The Board should have ability to step back toassist executive management by challengingthe assumptions underlying: strategy,strategic initiatives (such as acquisitions), riskappetite, exposures and the key areas of thecompany's focus.

xi) When committees of the board are established,their mandate, composition and working

procedures should be well defined and disclosedby the board.xii)

Board members should be able to committhemselves effectively to their responsibilities.

xiii) In order to fulfill their responsibilities, boardmembers should have access to accurate,relevant and timely information.

xiv) The Board and senior management shouldfacilitate the Independent Directors to performtheir role effectively as a Board member andalso a member of a committee.

No such provision


5/30

II. Board of Directors

A. Composition of Board


1. The Board of Directors of the company shall

have an optimum combination of executive and

non-executive directors with at least 1 woman

director and not less than 50% of the Board of

Directors comprising non-executive directors.

Appointment of Women Director shall be

applicable w.e.f. April 1, 2015.

The Board of directors of the company

shall have an optimum combination of

executive and non-executive directors

with not less than fifty percent of the

board of directors comprising of non-

executive directors.

2. Where the Chairman of the Board is:

(i) Non-Executive, a minimum of 1/3rd of the

Board should comprise of Independent

Directors

(ii) Executive, a minimum of of the Board

should comprise of Independent Directors

(iii) In case Non-executive Chairman is thepromoter of the Company, at least 1/2 of

the Board to be independent

(iv) Minimum age of independent Directors

shall be 21 years.

(v) An independent director who resigns or is

removed from the Board of the Company

shall be replaced by a new independent

director within a period of not more than

180 days from the day of such resignation

or removal, as the case may be.

Same

B. Independent Directors

3. Definition: As compared to Section 149 of the Companies Act, 2013 (Attached as per

Annexure I)

4. Limit on number of directorshipsi)

A person shall not serve as an independentdirector in more than seven listedcompanies.

ii)

Any person who is serving as a whole timedirector in any listed company shall serve asan independent director in not more thanthree listed companies.

No such provision.


5. Maximum tenure of Independent Directors

i)

shall be in accordance with theCompanies Act, 2013 andClarifications/circulars issued by theMinistry of Corporate Affair, in this Regard

from time to time.

No such provision


6/30

6. Formal letter of appointment to Independent

Directors

i) The company shall issue a formal letter of

appointment to independent directors in

the manner as provided in the Companies

Act, 2013.

ii) The terms and conditions of Appointment

shall be disclosed on the website of the

Company.

No such provision

7. Performance evaluation of Independent

Directors

i) The Nomination Committee shall lay down

the evaluation criteria for performance

evaluation of independent directors.

ii) Evaluation criteria as laid down by the

Nomination Committee, shall be disclosed in

its Annual Report.

iii) The performance evaluation of independent

directors shall be done by the entire Board

of Directors (excluding the director being

evaluated).

iv)

On the basis of the report of performanceevaluation, it shall be determined whether

to extend or continue the term of

appointment of the independent director.

No such provision

8. Separate meetings of the Independent

Directors

i)

All independent directors of the company

shall hold at least one meeting in a year,

without the attendance of non-independent

directors and members of management in

order to review the performance of the

Chairman, Non Independent Directors and

the Board, etc. . All Independent Directors

shall strive to be present at such meeting.

No such provision

9. Familiarization programme for Independent

Directors

i) The Company shall familiarize the

Independent directors with the company,

their roles, rights, responsibilities in the

company, nature of the industry in whichthe company operates, business model of

the company etc., through various

programmes.

No such provision


7/30

ii) The details of such familiarization

programmes shall be disclosed on the

companys website and a web link thereto

shall also be given in the Annual report.

C. Non-Executive Directors Compensation and Disclosure

10. All fees / compensation, if any paid to non-

executive directors, including independent

directors, shall be fixed by the Board of

Directors and shall require previous approval of

shareholders in general meeting.

Same

D. Meeting of Board of Directors

11. The Board shall meet at least four times a year,

with a maximum time gap of 120 days between

any two meetings

The board shall meet at least four

times a year, with a maximum time

gap of 4 months between any two

meetings.12. List of items is specified which must be placed

before the Board in every meeting.

(As per Annexure- II)

Same

(As per Annexure-II)

E. Other Membership of Directors

13. A Director shall not be a member of more than

10 committees*

Same

14. A Director shall not act as Chairman of morethan 5 committees* Same

15. Every director shall inform the company about

the committee positions he occupies in other

companies and notify changes as

and when they take place.

Annual requirement for every directorto inform the company about thecommittee positions he occupies inother companies and notify changesas and when they take place.

* It applies to the Committees of only public limited companies whether listed or not.

* For the purpose of reckoning the aforesaid limit only Audit Committee and Shareholders

Grievance Committee shall be considered.

16. The Board shall periodically review compliance

reports of all laws applicable to the company,

prepared by the company as well as steps

taken by the company to rectify instances of

non compliances.

Same

17. An independent director who resigns or isremoved from the Board of the Companyshall be replaced by a new independentdirector at the earliest but not later than theimmediate next Board meeting or 03 months

from the date of such vacancy, whichever islater.

An independent director who resignsor is removed from the Board of theCompany shall be replaced by a newindependent director within a periodof 180 days from the date of such

resignation.


8/30

F. Code of Conduct

18. The Board shall lay down a code of conductfor all Board members and seniormanagement of the company

Same

19. This Code of Conduct shall be posted on the

website of the Company

Same

20. All Board members and senior management

personnel shall affirm compliance with the codeon an annual basis. The Annual Report of the

company shall contain a declaration to this

effect signed by the CEO.

Same

21. The Code of Conduct shall suitably incorporate

the duties of Independent Directors as laid

down in

the Companies Act, 2013.

No such provision

22. An independent director shall be held liable,

only in respect of such acts of omission or

commission by a company which hadoccurred with his knowledge, attributable

through Board processes, and with his

consent or connivance or where he had not

acted diligently with respect of the provisions

contained in the Listing Agreement.

No such provision

G. Whistle blower Policy

23 i)

The company shall establish a vigilmechanism for directors and employees toreport concerns about unethical behavior,

actual or suspected fraud or violation ofthe companys code of conduct or ethicspolicy.

ii)This mechanism should also provide foradequate safeguards against victimizationof director(s) / employee(s) who avail ofthe mechanism and also provide for directaccess to the Chairman of the AuditCommittee in exceptional cases

iii)

The details of establishment of such

mechanism shall be disclosed by thecompany on its website and in the Boardsreport.

The Whistle Blower Policy as a

mechanism for employees to report to

the management concerns about

unethical behavior, actual or

suspected fraud or violation of the

companys code of conduct or ethics

policy was not mandatory.

III. Audit Committee

A. Constitution & Independence of Audit Committee

1. Audit Committee shall have minimum three

Directors as members

Same

2. 2/3rd of the members shall be Independent

Directors.

Same

B. Members Qualification

3. All members of the Audit Committee shall be

financially literate

Same


9/30

4. At least 01 member shall have accounting or

related financial management expertise

Same

C. Chairman of the Audit Committee

5. Chairman of the Audit Committee shall be an

Independent Director

Same

6. Chairman shall be present at AGM to answer

shareholders queries

Same

D. Meeting of Audit Committee

7. Audit Committee should meet at least four

times in a year

Same

8. Not more than four months shall elapse

between two meetings

Same

E. Quorum

9. Quorum shall be either two members or 1/3rd

of the members, whichever is greater

Same

10. A minimum of two Independent directors

should be present at every meeting

Same

F. Role & Powers of the Audit Committee

11. The role of Audit Committee shall include but

not restricted to: (briefly)

Oversight of companys financial reporting

process

Ensuring the credibility, sufficiency andcorrectness of financial information

Recommending to Board appointment,

removal, etc. of statutory auditors and

fixation of audit fees, and payment for other

services.

Reviewing with management,

quarterly/annual financial statements etc.

before submission to the Board for approval

Reviewing Internal control structure

including the Internal Audit function in all

aspects

Scrutiny of inter corporate loans and

investments

Valuation of undertakings or assets of the

company

Evaluation of internal financial controls and

risk management systems

Same

No such Provision

No such Provision

No such provision


10/30

12. The powers of Audit Committee includes:

(briefly)

Investigating any activity within its terms of

reference

Seeking information from any employee

Obtaining outside legal or other professional

advice

Securing attendance of outsiders with

relevant expertise, if it considers necessary

Same

G. Review of Information by Audit Committee

13. Following information shall mandatorily be

reviewed by Audit Committee (briefly)

Management Discussion & Analysis of

financial conditions and results of operations

Statement of significant Related Party

Transactions

Management letters/letters of internalcontrol weaknesses issued by the Statutory

Auditors

Internal Audit Reports

Appointment, removal and terms of

remuneration of the Chief Internal Auditor

Same

H. Miscellaneous provisions


14. Audit Committee may invite such of the

executives as it considers appropriate to be

present at its meetings including the Finance

Director, Head of Internal Audit & a

representative of the Statutory Auditor

Same

15. Company Secretary shall act as the Secretary to

the Committee

Same

I. Nomination And Remuneration Committee

16. The company through its Board of

Directors shall set up a nomination and

remuneration committee which shall comprise

at least three directors, all of whom shall benon-executive directors and at least half shall

be independent. Chairman of the committee

shall be an independent director.

Provided that the chairperson of the company

(whether executive or non-executive) may be

appointed as a member of the nomination and

remuneration committee but shall not chair

such committee.

No such provision


11/30

IV. Subsidiary Company

A. Applicability

1. Subsidiary shall be considered as material

if the investment of the company in the

subsidiary exceeds 20% of its consolidated

net worth / 20% of the consolidated

income as per the audited balance sheetof the previous financial year.

Material non-listed Subsidiary means

where Turnover/net-worth (Paid-up capital

+ Free reserves) of the subsidiary exceeds

20% of the consolidated turnover/net-

worth respectively of listed holdingcompany and its subsidiaries in the

immediately preceding accounting year

B.

Other provisions

2. At least one independent director on the

Board of Directors of the holding company

shall be a director on the Board of

Directors of a material non-listed Indian

subsidiary company.

Same

3. Audit Committee of the listed holding

company shall also review the financial

statements, in particular, the investments

made by the unlisted subsidiary company

Same

4. Minutes of the Board meeting of the

unlisted subsidiary company shall be

placed at the Board meeting of the listed

holding company

Same

5. The management should periodically bring

to the attention of the Board of Directors

of the listed holding company, a statement

of all significant transactions* and

arrangements entered into by the unlisted

subsidiary company.

Same


12/30


6. The company shall formulate a policy for

determining material subsidiaries and such policy

shall be disclosed on the companys website and a

web link thereto shall be provided in the Annual

report.

No such provision

7. No company shall dispose of shares in its material

subsidiary which would reduce its shareholding

(either on its own or together with other

subsidiaries) to less than 50% 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.

No such provision

8 Selling, disposing and leasing of assets amounting

to more than twenty percent of the assets of the

material subsidiary on an aggregate basis during afinancial 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.

No such provision

Significant transaction or arrangement shall mean any individual transaction or

arrangement that exceeds/likely to exceed 10% of the total revenues/expenses or total

assets/liabilities of material unlisted subsidiary company in the immediately preceding

accounting year.

The term material non listed Indian subsidiary shall mean an unlisted subsidiary,incorporated in India, whose income or net worth (i.e. paid up capital and free reserves)exceeds twenty percent { 20% } of the consolidated income or net worth respectively, of thelisted holding company and its subsidiaries in the immediately preceding accounting year

V. Risk Management

1 i) The company through its Board of

Directors shall constitute a Risk

Management Committee. The Board shall

define the roles and responsibilities ofthe Risk Management Committee and

may delegate monitoring and reviewing

of the risk management plan to the

committee and such other functions as it

may deem fit.

ii)

The majority of committee shall consist

of members of the board of Directors.

iii) Senior Executives of the company may

be members of the said Committee but

the chairman of the committee shall be a

member of the Board of Directors.

No such provision


13/30


14/30

subject to their value not exceeding Rs.1 crore pertransaction.

d. Audit Committee shall review, at least on aquarterly basis, the details of RPTs entered into bythe company pursuant to each of the omnibusapproval given.

e. Such omnibus approvals shall be valid for aperiod not exceeding one year and shall requirefresh approvals after the expiry of one year"

2. All material Related Party Transactions shall require

approval of the shareholders through special

resolution and the related parties shall abstain from

voting on such resolutions.

Provided that 1 & 2 shall not be applicable in the

following cases:

i)

Transactions entered into between two

government companies;

ii)

transactions entered into between a

holding company and its wholly owned

subsidiary whose accounts are

consolidated with such holding

company and placed before the

shareholders at the general meeting for

approval

All entities falling under the definition of relatedparties shall abstain from voting irrespective ofwhether the entity is a party to the particulartransaction or not.

(A transaction with a related party shall be

considered MATERIAL if the transaction /

transactions to be entered into individually or taken

together with previous transactions during a

financial year, exceeds ten percent {10%} of the

annual consolidated turnover of the company as per

the last audited financial statements of thecompany)

No such provision

3 Details of all material transactions with related

parties shall be disclosed quarterly along with the

compliance report on corporate governance

No such provision


15/30

4. The company shall disclose the policy on dealing

with Related Party Transactions on its website and

a web link thereto shall be provided in the Annual

report.

The company shall formulate a Policy on materiality

of related party transactions and also dealing with

related party transactions.

No such provision

B.

Disclosure of Accounting Treatment

5. Where in the preparation of financial statements, a

treatment different from that prescribed in an

Accounting Standard has been followed, the fact

shall be disclosed in the financial statements,

together with the managements explanation as to

why it believes such alternative treatment is more

representative of the true and fair view of the

underlying business transaction in the Corporate

Governance Report.

Same

C. Proceeds from Public Issue, etc

6. Where money is raised through an issue (public,

rights, preferential, etc) then it shall disclose to the

Audit Committee :-

uses/applications of funds in major categories

on a quarterly basis as a part of quarterly

declaration of financial results

and on annual basis in a statement form of

funds utilized for purposes other than those

stated in the prospectus/offer document (till

such time that the full money so raised has

been fully spent) (statement to be certified by

the Statutory Auditors of the company

Same

D. Remuneration of Directors

7. Annual Report of the Company shall contain :-

pecuniary relationship/ transactions of the non-

executive directors vis--vis the company

all elements of remuneration package of

individual directors

details of fixed components & performancelinked incentives, service contracts, notice

period, stock option details, etc

criteria of making payments to non-executive

directors

number of shares & convertible instruments

held by non-executive directors

Same

8. Non-executive directors must disclose their

shareholding in the listed company in which they

are proposed to be appointed as director. These

details must also be disclosed in the notice of

general meeting called for such appointment.

Same


16/30

E. Management

9. Management Discussion & Analysis Report should

form part of the Annual Report of the Company Same

10. Senior Management* to disclose to the Board:

all material financial & commercial

transactions

where they have personal interests

that may have potential conflict with the

interest of the company

Same

* Senior management shall exclude the Board of Directors but includes the personnel of the

company who are members of its core management team and all members of management one

level below the executive directors including all functional heads.

F. Shareholders

11. In case of the appointment/re-appointment of a

new director following information is to be provided

to the shareholders:

brief resume of the director

nature of his expertise

other directorships

shareholdings (in case of non-executive

directors)

Same

12. Quarterly results and presentations made by the

company to analysts shall be put on

companys web-site, or shall be sent in such a form

so as to enable the stock exchange on which thecompany is listed to put it on its own web-site.

Same

13. A committee under the Chairmanship of a non-

executive director and such other members as may

be decided by the Board of the company shall be

formed to specifically look into the redressal of

grievances of shareholders, debenture holders and

other security holders. This

Committee shall be designated as Stakeholders

Relationship Committee and shall consider and

resolve the grievances of the security holders of thecompany including complaints related to transfer of

shares, non-receipt of balance sheet, non-receipt of

declared dividends.

A board committee under the

chairmanship of a non-executive

director shall be formed to

specifically look into the redressal

of shareholder and investors

complaints like transfer of shares,

non-receipt of balance sheet,

non-receipt of declared dividends

etc. This Committee Shall bedesignated as

Shareholders/Investors

Grievance Committee.

14. To expedite the process of share transfers, the

Board of the company shall delegate the power of

share transfer to an officer or a committee or to the

registrar and share transfer agents. The delegated

authority shall attend to share transfer formalities

at least once in a fortnight.

Same

VII. CEO/CFO Certification

1. CEO or the managing Director or manager or in

their absence, a whole time Director appointed in Same


17/30

terms of Companies Act, 2013 and the CFO shall

certify to Board:- (briefly)

a)

There is no material untrue statement in

financial statements.

b) True and fair view of affairs and compliance

with Accounting Standards/applicable laws are

presented in financial statements.

c)

No transactions are fraudulent/illegal/violate

Code of Conduct.

d) Accept responsibility for internal control for

financial reporting.

e) Indicate to Auditors/Audit Committee

significant charges in internal control /

accounting policies, instances of significant

fraud involving management/employee etc.

VIII. Report on Corporate Governance

1. There shall be a separate section on Corporate

Governance in the Annual Reports of company, with

a detailed compliance report on Corporate

Governance.

Same

2. Non-compliance of any mandatory requirement of

this clause with reasons thereof and the extent to

which the non-mandatory requirements have been

adopted should be specifically highlighted.

Same

3. The companies shall submit a quarterly compliance

report to the stock exchanges within 15 days from

the close of quarter as per the format given. The

report shall be signed either by the Compliance

Officer or the Chief Executive Officer of the

company.

Same

IX. Compliance

1. The Company shall obtain a certificate from

The Auditors or

Practicing Company Secretary

regarding compliance of conditions of Corporate

Governance. Same

2. The aforesaid certificate is to be annexed with theDirectors Report which is sent annually to all the

shareholders and Stock Exchanges


18/30

Annexure - I

Comparison of Definitions of Independent Directors under Clause 49 of ListingAgreement and Section 149 of Companies Act 2013 and new Clause 49 of ListingAgreement

SNO SECTION 149 OF

COMPANIES ACT2013

S

NO

Old CLAUSE 49 OF

LISTING AGREEMENT

NEW CLAUSE 49 OF

LISTING AGREEMENTWEF 1-10-2014

1 An independentdirector in relation toa company means adirector other than amanaging director or awhole-time director ora nominee director.

1 An independent directorshall mean a non-executivedirector of the company.

Independent director shallmean

a non-executive director,other than a nomineedirector of the company:

2 Who, in the opinion ofthe Board, is a person

of integrity andpossesses relevantexpertise andexperience.

2 No such provision. Who, in the opinion of theBoard, is a person of

integrity and possessesrelevant expertise andexperience;

3 No such provision. 3 The Board of directors ofthe company shall have anoptimum combination ofexecutive and non-executive directors with notless than fifty percent ofthe board of directors

comprising of non-executive directors

The Board of Directors ofthe company shall have anoptimum combination ofexecutive and non-executive directors with atleast one woman directorand not less than fifty

percent of the Board ofDirectors comprising non-executive directors

4 This concept ofnumber ofIndependentDirectors, linking withChairman, notpresent.

Although, in terms of

Section 149(4) of theCompanies Act,2013{Act} everylisted public companyshall have atleastone-third of the totalnumber of Directorsas IndependentDirectors on theBoard (fractions to berounded off as 1).

Following classes ofCompanies, shallhave atleast twoIndependent Directors{ in terms of the rules

4 Where the Chairman of theBoard is a non-executivedirector, at least one-thirdof the Board shouldcomprise of independentdirectors and in case he isan executive director, atleast half of the Board

should comprise ofindependent directors.

Provided that where thenon-executive Chairman isa promoter of the companyor is related to anypromoter or personoccupying managementpositions at the Board levelor at one level below theBoard, at least one-half ofthe Board of the companyshall consist ofindependent directors.

Explanation- For the

Where the Chairman ofthe Board is a non-executive director, at leastone-third of the Boardshould compriseindependent directors andin case the company doesnot have a regular non-

executive Chairman, atleast half of the Boardshould compriseindependent directors.

Provided that where theregular non-executiveChairman is a promoterof the company or isrelated to any promoter orperson occupyingmanagement positions atthe Board level or at onelevel below the Board, atleast one-half of the Boardof the company shallconsist of independent


19/30

notified}:-1.

Public Companieshaving paid upshare capital of Rs.10 Crore or more;or

2.

Public Companieshaving turnover ofRs. 100 Crore /- ormore; or

3.

Public Companieswhich have, inaggregateoutstanding loansor borrowings ordebentures ordeposits exceedingRs. 50 Crore ormore

purpose of the expressionrelated to any promoter

referred to in sub-section(ii):a.) If the promoter is alisted entity, its directorsother than the independentdirectors, its employees orits nominees shall bedeemed to be related to it;

b.) If the promoter is anunlisted entity, its directors,its employees or itsnominees shall be deemedto be related to it.

directors.

Explanation: For thepurpose of theexpression related toany promoter

referred to in sub-clause(2):

i. If the promoter is alisted entity, its directorsother than theindependent directors, itsemployees or its nomineesshall be deemed to berelated to it;

ii. If the promoter is

an unlisted entity, itsdirectors, its employeesor its nominees shall bedeemed to be related toit.

5 Who is or was not apromoter of thecompany or itsholding, subsidiary orassociate company;

5 No such provision except,the provision of non-executive Chairman beingpromoter of the companyand consequently at leasthalf of Board to beindependent

Who is or was not apromoter of the companyor its holding, subsidiaryor associate company;

6 Who is not related topromoters or directorsin the company, itsholding, subsidiary orassociate company;

6 He is not related topromoters or personsoccupying managementpositions at the board levelor at one level below theboard;

Who is not related topromoters or directors inthe company, its holding,subsidiary or associatecompany;

7 Who has or had nopecuniary relationshipwith the company, itsholding, subsidiary or

associate company, ortheir promoters, ordirectors, during thetwo immediatelypreceding financialyears or during thecurrent financial year;

7 Apart from receivingdirectors remuneration,

does not have any materialpecuniary relationships or

transactions with thecompany, its promoters, itsdirectors, its seniormanagement or its holdingcompany, its subsidiariesand associates which mayaffect independence of thedirector

Apart from receivingdirector's remuneration,has or had no Materialpecuniary relationship with

the company, its holding,subsidiary or associatecompany, or theirpromoters, or directors,during the twoimmediately precedingfinancial years or during thecurrent financial year;

8 None of whoserelatives has or hadpecuniary relationship

or transaction with thecompany, its holding,subsidiary or associatecompany, or their

8 No such provision. None of whose relativeshas or had pecuniaryrelationship or transaction

with the company, itsholding, subsidiary orassociate company, ortheir promoters, or


20/30

promoters, ordirectors, amountingto two per cent. ormore of its grossturnover or totalincome or fifty lakhrupees or such higheramount as may beprescribed, whicheveris lower, during thetwo immediatelypreceding financialyears or during thecurrent financial year;

directors, amounting totwo per cent. or more ofits gross turnover or totalincome or fifty lakh rupeesor such higher amount asmay be prescribed,whichever is lower,during the twoimmediately precedingfinancial years or duringthe current financial year;

9 Who, neither himselfnor any of his relativesholds or has held theposition of a keymanagerial personnelor is or has been

employee of thecompany or itsholding, subsidiary orassociate company inany of the threefinancial yearsimmediately precedingthe financial year inwhich he is proposedto be appointed.

9 He has not been anexecutive of the companyin the immediatelypreceding three financialyears;

who, neither himself norany of his relatives

holds or has held theposition of a keymanagerial personnel or is

or has been employee ofthe company or itsholding, subsidiary orassociate company in anyof the three financial yearsimmediately preceding thefinancial year in which heis proposed to beappointed;


21/30

SNO SECTION 149 OFCOMPANIES ACT

2013

SNO

Old CLAUSE 49 OFLISTING AGREEMENT

NEW CLAUSE 49 OFLISTING AGREEMENT

WEF 1-10-2014

10 Who, neither himselfnor any of his relativesis or has been anemployee orproprietor or apartner, in any of thethree financial yearsimmediately precedingthe financial year inwhich he is proposedto be appointed, of

(A) a firm ofauditors or companysecretaries in practiceor cost auditors of thecompany or its

holding, subsidiary orassociate company; or

(B)any legal or aconsulting firm thathas or had anytransaction with thecompany, its holding,subsidiary or associatecompany amountingto ten per cent. ormore of the grossturnover of such firm;

10 He is not a partner or anexecutive or was notpartner or an executiveduring the preceding threeyears, of any of thefollowing:

1} the statutory audit firmor the internal audit firmthat is associated with thecompany, and

2} the legal firm(s) andconsulting firm(s) thathave a materialassociation with thecompany.

Who, neither himself norany of his relatives is orhas been an employee orproprietor or a partner, inany of the three financialyears immediatelypreceding the financial yearin which he is proposed tobe appointed, of

(A) a firm of auditors orcompany secretaries inpractice or costauditors of thecompany or its holding,subsidiary or associatecompany; or

(B)

any legal or aconsulting firm thathas or had anytransaction with thecompany, its holding,subsidiary or associatecompany amounting toten per cent or more ofthe gross turnover ofsuch firm;

11 No such provision. 11 He is not a materialsupplier, service provideror customer or a lessor orlessee of the company,which may affectindependence of thedirector;

Who, neither himself norany of his relatives is amaterial supplier, serviceprovider or customer or alessor or lessee of thecompany

12 Who, neither himselfnor any of his relativesholds together with hisrelatives two per cent.

or more of the totalvoting power of thecompany.

12 He is not a substantialshareholder of thecompany i.e. owning twopercent or more of the

block of voting shares.

Who, neither himself norany of his relatives holdstogether with his relativestwo per cent or more of

the total voting power ofthe company;

13 No such provision. 13 He is not less than 21years of age

He is not less than 21years of age


22/30

SNO

SECTION 149 OFCOMPANIES ACT

2013

SNO



WEF 1-10-2014

14 No such provision. 14 Explanationa.

Associate shall mean acompany which is an

associate as defined inAccounting Standard(AS) 23, Accounting forInvestments inAssociates inConsolidated FinancialStatements, issued bythe Institute ofChartered Accountantsof India.

b. Senior managementshall mean personnel

of the company whoare members of itscore managementteam excluding Boardof Directors. Normally,this would comprise allmembers ofmanagement one levelbelow the executivedirectors, including allfunctional heads.

c.Relative shall meanrelative as defined in

section 2(41) andsection 6 read withSchedule IA of theCompanies Act, 1956.

d. Nominee directorsappointed by aninstitution which hasinvested in or lent tothe company shall bedeemed to beindependent directors.

Explanation:Institution for this

purpose means a publicfinancial institution asdefined in Section 4A ofthe Companies Act, 1956or a corresponding newbank as defined in section2(d) of the BankingCompanies (Acquisitionand Transfer ofUndertakings) Act, 1970 orthe Banking Companies

(Acquisition and Transfer ofUndertakings) Act, 1980[both Acts].

Explanationi. Associate" shallmean a companywhich is an

associateas definedin AccountingStandard (AS) 23,

Accounting forInvestments inAssociates inConsolidatedFinancialStatements, issuedby the Institute ofCharteredAccountants of India.

ii. Key ManagerialPersonnel" shall mean

Key ManagerialPersonnel as defined insection 2(51) of theCompanies Act, 2013.

iii. Relative shallmean relative asdefined in section 2(77)of the Companies Act,2013 and rulesprescribed there under.


23/30

SNO

SECTION 149 OFCOMPANIES ACT

2013

SNO



WEF 1-10-2014

15 Who, neither himselfnor any of his relativesis a Chief Executive ordirector, by whatevername called, of anynon-profit organisationthat receives twenty-five per cent. or more ofits receipts from thecompany, any of itspromoters, directors orits holding, subsidiary orassociate company orthat holds two per cent.or more of the totalvoting power of thecompany; or

15 No such provision. Who, neither himself norany of his relatives is aChief Executive ordirector, by whatevername called, of any non-profit organisation thatreceives twenty-five percent or more of itsreceipts from thecompany, any of itspromoters, directors orits holding, subsidiary orassociate company orthat holds two per centor more of the totalvoting power of thecompany;

16 Who possesses suchother qualifications asmay be prescribed.

16 No such provision. No such provision


24/30

Annexure-II

CORPORATE GOVERNANCE

(Compliance report in respect of the minimum information to be placed before the Board

in terms of Clause 49 of the Listing Agreement)

Sl.

No.

New Clause 49

Applicable from 1/10/2014

Old Clause 49

Information to be placed before the Board

1 Annual operating plans and budgets and any updates. Same

2 Capital budgets and any updates. Same

3 Quarterly results for the Company and its operating

divisions or business segments.

Same

4 Minutes of meetings of Audit Committee and other

Committees of the Board.

Same

5 The information on recruitment and remuneration of

senior officers just below the board level, includingappointment or removal of Chief Financial Officer and

the Company Secretary.

Same

6 Show cause, demand, prosecution notices and penalty

notices, which are materially important.

Same

7 Fatal or serious accidents, dangerous occurrences, any

material effluent or pollution problems.

Same

8 Any material default in financial obligations to and by

the company, or substantial nonpayment for goods

sold by the company.

Same

9 Any issue, which involves possible public or product

liability claims of substantial nature, including any

judgement or order which, may have passed strictures

on the conduct of the company or taken an adverse

view regarding another enterprise that can have

negative implications on the company.

Same

10 Details of any joint venture or collaboration agreement. Same

11 Transactions that involve substantial payment towards

goodwill, brand equity, or intellectual property.

Same

12 Significant labour problems and their proposed

solutions. Any significant development in Human

Resources/ Industrial Relations front like signing ofwage agreement, implementation of Voluntary

Retirement Scheme etc.

Same

13 Sale of material nature, of investments, subsidiaries,

assets, which is not in normal course of business.

Same

14 Quarterly details of foreign exchange exposures and

the steps taken by management to limit the risks of

adverse exchange rate movement, if material.

Same

15 Non-compliance of any regulatory, statutory or listing

requirements and shareholders service such as non-

payment of dividend, delay in share transfer etc.

Same


25/30

Annexure-III

SUGGESTED LIST OF ITEMS TO BE INCLUDED IN THE REPORT ON CORPORATE

GOVERNANCE IN THE ANNUAL REPORT OF COMPANIES

Sl.

No.

New Clause 49


Old Clause 49

1 A brief statement on companys philosophy on

code of governance.

No Change

2 Board of Directors:

a. Composition and category of directors, forexample, promoter, executive, non-executive, independent non-executive,nominee director, which institutionrepresented as lender or as equity investor.

b. Attendance of each director at the Boardmeetings and the last AGM.

c. Number of other Boards or Board

Committees in which he/she is a member orChairperson.d.

Number of Board meetings held, dates on

which held.

No Change

3 Audit Committee:a. Brief description of terms of referenceb.

Composition, name of members andChairperson

c. Meetings and attendance during the year

No Change

4 Nomination and Remuneration Committee:

a. Brief description of terms of reference

b.

Composition, name of members andChairpersonc.

Attendance during the yeard. Remuneration policye. Details of remuneration to all the directors,

as per format in main report.

Remuneration Committee:

a. Brief description of terms of

referenceb. Composition, name of members andChairperson

c. Attendance during the yeard. Remuneration policye. Details of remuneration to all the

directors, as per format in mainreport.

5 Stakeholders' Grievance Committee:a.

Name of non-executive director heading thecommittee

b.

Name and designation of compliance officerc. Number of shareholders complaints

received so fard. Number not solved to the satisfaction of

shareholderse. Number of pending complaints

Shareholders Committee:a.

Name of non-executive directorheading the committee

b.

Name and designation ofcompliance officer

c.

Number of shareholderscomplaints received so far

d.

Number not solved to thesatisfaction of shareholders

e. Number of pending complaints6 General Body meetings:

a. Location and time, where last three AGMsheld.

b. Whether any special resolutions passed inthe previous 3 AGMs

c. Whether any special resolution passed lastyear through postal ballot details of

voting patternd. Person who conducted the postal ballot

exercisee. Whether any special resolution is proposed

No change


26/30

to be conducted through postal ballotf.

Procedure for postal ballotSl.

No.

New Clause 49Applicable from 1/10/2014

Old Clause 49

7 Disclosures:

a. Disclosures on materially significant

related party transactions that may havepotential conflict with the interests ofcompany at large.

b. Details of non-compliance by thecompany, penalties, strictures imposed onthe company by Stock Exchange or SEBIor any statutory authority, on any matterrelated to capital markets, during the lastthree years.

c. Whistle Blower policy and affirmation thatno personnel has been denied access tothe audit committee.

d.

Details of compliance with mandatoryrequirements and adoption of the non-mandatory requirements of this clause

No Change

8 Means of communication:a. Quarterly resultsb. Newspapers wherein results normally

publishedc. Any website, where displayedd. Whether it also displays official news

releases; ande. The presentations made to institutional

investors or to the

No Change

9 General Shareholder information:a.

AGM: Date, time and venueb.

Financial yearc. Date of Book closured. Dividend Payment Datee. Listing on Stock Exchangesf.

Stock Codeg. Market Price Data: High., Low during each

month in last financial yearh. Performance in comparison to broad-

based indices such as BSE Sensex, CRISILindex etc.

i.

Registrar and Transfer Agents

j.

Share Transfer Systemk. Distribution of shareholdingl. Dematerialization of shares and liquiditym.

Outstanding GDRs/ADRs/Warrants or anyConvertible instruments, conversion dateand likely impact on equity

n. Plant Locationso.

Address for correspondence

No Change


27/30

NON-MANDATORY REQUIREMENTS

Sl.

No.

New Clause 49


Old Clause 49

1 The BoardThe Board - A non-executive Chairman may

be entitled to maintain a Chairman's officeat the company's expense and also allowedreimbursement of expenses incurred inperformance of his duties.

The BoardA non-executive Chairman may be entitledto maintain a Chairmans office at thecompanys expense and also allowedreimbursement of expenses incurred inperformance of his duties. IndependentDirectors may have a tenure notexceeding, in the aggregate, a period ofnine years, on the Board of a company.The company may ensure that the personwho is being appointed as an independentdirector has the requisite qualificationsand experience which would be of use tothe company and which, in the opinion of

the company, would enable him tocontribute effectively to the company inhis capacity as an independent director.

2 No such provision Remuneration Committee

i. The board may set up aremuneration committee todetermine on their behalf and onbehalf of the shareholders withagreed terms of reference, thecompanys policy on specificremuneration packages for

executive directors includingpension rights and anycompensation payment.

ii. To avoid conflicts of interest, theremuneration committee, whichwould determine the remunerationpackages of the executive directorsmay comprise of at least threedirectors, all of whom should benon-executive directors, theChairman of committee being anindependent director.

iii.

All the members of theremuneration committee could bepresent at the meeting.

iv. The Chairman of the remunerationcommittee could be present at theAnnual General Meeting, to answerthe shareholder queries. However,it would be up to the Chairman todecide who should answer thequeries.

3 Shareholder Rights

A half-yearly declaration of financialperformance including summary of thesignificant events in last six-months, may besent to each household of shareholders.

No Change


28/30

4 Audit qualificationsCompany may move towards a regime ofunqualified financial statements.

No Change

Sl.

No.


Old Clause 49

5 No such provision Training of Board MembersA company may train its Board members

in the business model of the company aswell as the risk profile of the businessparameters of the company, theirresponsibilities as directors, and the bestways to discharge them.

6 No such provision Mechanism for evaluating non-executive Board MembersThe performance evaluation of non-executive directors could be done by apeer group comprising the entire Board ofDirectors, excluding the director beingevaluated; and Peer Group evaluation

could be the mechanism to determinewhether to extend /continue the terms ofappointment of non-executive directors.

7 No such provision Whistle Blower PolicyThe company may establish a mechanismfor employees to report to themanagement concerns about unethicalbehaviour, actual or suspected fraud orviolation of the companys code of conductor ethics policy. This mechanism couldalso provide for adequate safeguardsagainst victimization of employees who

avail of the mechanism and also providefor direct access to the Chairman of theAudit committee in exceptional cases.Once established, the existence of themechanism may be appropriatelycommunicated within the organization.

8 Separate posts of Chairman and CEOThe company may appoint separate personsto the post of Chairman and ManagingDirector/CEO.

No such provision

9 Reporting of Internal Auditor

The Internal auditor may report directly tothe Audit Committee.

No such provision

10 The company will mandatorily comply withall the Accounting Standards issued byInstitute ofChartered Accountants of India (ICAI) fromtime to time.

No Change


29/30

Sl.

No.


Old Clause 49

11 Corporate Filing and Dissemination

System (CFDS), viz.,www.corpfiling.co.in(1) The company agrees -

(a) to file on the CDFS, such information,statements and reports as may be specifiedby the Participating Stock Exchanges in thisregard.(b) that the Compliance Officer, appointedunder clause 47(a) and the company shallbe responsible for ensuring the correctness,authenticity and comprehensiveness of theinformation, statements and reports filedunder this clause and also for ensuring thatsuch information is in conformity with theapplicable laws and the listing agreement.

(c) to ensure that the electronic filing ofinformation through CFDS, pursuant tocompliance with any clause of the listingagreement, shall be done within the timelimit specified in the respective clause of thelisting agreement.(d) to put in place such infrastructure asmay be required to comply with the clause.Explanation: For the purposes of this clause(i) The term Corporate Filing andDissemination System (CFDS) shall meanthe portal at the URL www.corpfiling.co.in orsuch other website as may be specified bythe participating stock exchanges from timeto time to take care of exigencies, if any.(ii) The term Participating Stock

Exchanges shall mean the stock exchangesowning and maintaining CFDS.

No Change

12 The company agrees to notify the stockexchange and also disseminate through itsown website, immediately upon enteringinto agreements with media companiesand/or their associates, the followinginformation:-

a. Disclosures regarding the shareholding (ifany) of such media companies/associates inthe company.b. Any other disclosures related to suchagreements, viz., details of nominee of themedia companies on the Board of thecompany, any management control orpotential conflict of interest arising out ofsuch agreements, etc.c. Disclosures regarding any other back toback treaties/contracts/agreements/MoUs orsimilar instruments entered into by the

company with media companies and/or theirassociates for the purpose of advertising,publicity, etc.

No Change


30/30

Sl.

No.


Old Clause 49

13 The issuer company agrees to maintain afunctional website containing basicinformation about the company e.g. detailsof its business, financial information,shareholding pattern, compliance with

corporate governance, contact informationof the designated officials of the companywho are responsible for assisting andhandling investor grievances, details ofagreements entered into with the mediacompanies and/or their associates, etc. Thecompany also agrees to ensure that thecontents of the said website are updated atany given point of time.

No Change

14 Listed entities shall submit, as part of theirAnnual Reports, Business ResponsibilityReports, describing the initiatives taken by

them from an environmental, social andgovernance perspective, in the formatsuggested as under.

No Change

Date:- 17thOctober 2014

Comparison for New Clause 49 - With Old Clause 49

Documents

Transcript of Comparison for New Clause 49 - With Old Clause 49