INTRODUCTION OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)

REGULATIONS,2015

Listing Regulations has two fold objective: Time Span of 90 days

for implementation

The following Two Provisions of the Listing Regulations are applicable with immediate effect which are as follows:

MAIN HIGHLIGHTS

Regulation 9:Preservation of Documents

The listed company is required to formulate a policy for preservation of documents duly approved by the Board of Directors, classifying them in at least two categories as follows-

documents whose preservation shall be permanent in nature;

documents with preservation period of not less than eight years after completion of the relevant transactions.

(Maintenance of documents in electronic mode will be deemed to be complying with the aforesaid regulation.)

This Regulation is, to some extent, in line with the provisions of Companies Act, 2013 and ensures better governance

in the operations of the company.

Every listed company is required to comply with the following:

To get itself registered on the SCORES platform or any other similar platform to electronically handle the investor complaints as specified by the Board.

To file a Statement within 21 days from the end of the relevant quarter to the stock exchange pertaining to the status of investors complaints detailing the following information:

• No. of Complaints Pending:• pending at the beginning,• Received and disposed of during the quarter,• Unresolved at the end of the quarter;The said statement is also required to be placed before the Board of Directors on a quarterly

basis.

Every listed company is required to comply with the following:

To get itself registered on the SCORES platform or any other similar platform to electronically handle the investor complaints as specified by the Board.

To file a Statement within 21 days from the end of the relevant quarter to the stock exchange pertaining to the status of investors complaints detailing the following information:

• No. of Complaints Pending:• pending at the beginning,• Received and disposed of during the quarter,• Unresolved at the end of the quarter;The said statement is also required to be placed before the Board of Directors on a quarterly

basis.

Regulation 13:Grievance Redressal Mechanism

In the erstwhile Listing Agreement, the information pertaining to pending investors complaints were being submitted on a quarterly basis only along with the Financial Results required to be filed with the stock exchange within 45/60 days (as the case may be) from the

end of the relevant quarter.

In the erstwhile Listing Agreement, the information pertaining to pending investors complaints were being submitted on a quarterly basis only along with the Financial Results required to be filed with the stock exchange within 45/60 days (as the case may be) from the

end of the relevant quarter.

New

Earlier

Important Provisions relating to Related Party Transaction (RPT)

Seek approval from shareholders in General Meeting by passing an ordinary resolution for approving material related party transactions subject to the stipulation that such related parties shall be abstained from voting on such resolution.

Regulation 23Related Party Transaction

With the intent to harmonize the provisions with the Companies Act, 2013, the requirement of shareholder approval for material related

party transaction has been relaxed from Special Resolution to Ordinary Resolution.

Earlier Special Resolution was required Special Resolution was required

Regulation 29:Prior Intimations

The listed company is required to give prior intimation to Stock Exchange about the Board Meeting held, from time to time in the following manner:

For Financial ResultsFor Financial Results

For alteration in the date of payment of interest or nomenclature of the specified securities

For alteration in the date of payment of interest or nomenclature of the specified securities

For Corporate ActionsFor Corporate Actions

At least 5 days advance notice(excluding the date of intimation and date of meeting) before consideration of Financial Results of the company.

At least 5 days advance notice(excluding the date of intimation and date of meeting) before consideration of Financial Results of the company.

At least 2 working days advance notice (excluding the date of intimation and date of meeting) for considering the proposals related to buyback of securities, voluntary delisting, fund raising including determination of issue price.

At least 2 working days advance notice (excluding the date of intimation and date of meeting) for considering the proposals related to buyback of securities, voluntary delisting, fund raising including determination of issue price.

At least 11 working days 'advance notice for considering the proposals pertaining to: a. Change in nomenclature of any of the securities listed on the Stock Exchange;b. Alteration in the date on which, •the interest is required to be paid on debentures or bonds;• the redemption amount is required to be paid on redeemable shares or debentures or bonds.

At least 11 working days 'advance notice for considering the proposals pertaining to: a. Change in nomenclature of any of the securities listed on the Stock Exchange;b. Alteration in the date on which, •the interest is required to be paid on debentures or bonds;• the redemption amount is required to be paid on redeemable shares or debentures or bonds.

Earlier

at least 7 clear calendar days advance notice

(excluding the date of intimation and date of

meeting)

at least 7 clear calendar days advance notice

(excluding the date of intimation and date of

meeting)

at least 21 advance notice was required at least 21 advance notice was required Earlier

Regulation 30:Disclosure of Events or Information.

The main highlights of the Regulations are outlined as follows:

The responsibility is casted on the Board of listed entities, to authorize one or more KMPs for the purpose of determining materiality of an event or information and making disclosures to the stock exchange.

The Listed Entity is required to frame a Policy For Determination Of Materiality Of Events, duly approved by the Board of Directors of such entity.

The criteria for determining the materiality of events/information is prescribed in the regulation and they are narrated as below:

a) the omission of an event or information, which is likely to result in discontinuity or alteration of event or information already available publicly; or

b) the omission of an event or information is likely to result in significant market reaction if the said omission came to light at a later date; or

c) In case where the criteria specified in sub-clauses (a) and (b) are not applicable, an event/information may be treated as being material if in the opinion of the board of directors of listed entity, the event / information is considered material.

Post 5 years, the requirement of disclosure of such events is as per the archival policy of the Listed Company.

Any delay in filing disclosures beyond the timeframe of 24 hours shall be accompanied by an explanation for delay.

All events or information of material subsidiaries are to be disclosed by such listed entity.

The details of above stated authorized KMPs is required to be disclosed to the Stock Exchange(s) as well as on the Company’s website.

“material subsidiary” shall mean a subsidiary, whose income or networth exceeds twenty percent of the consolidated income or net worthrespectively, of the listed entity and its subsidiaries in the immediatelypreceding accounting year.

“material subsidiary” shall mean a subsidiary, whose income or networth exceeds twenty percent of the consolidated income or net worthrespectively, of the listed entity and its subsidiaries in the immediatelypreceding accounting year.

Material event/ information are needed to be disclosed as per the following timeline:

• Within 24hours from the occurrence of the events as specified in Part - A of Schedule III of the said regulations.

• Within 30minutes of the conclusion of the Board Meeting regarding events specified in sub- para 4 of Para A of Part A of Schedule III of the said regulations.

Every Listed Company is required to update material developments on a regular basis pertaining to the disclosures made till the event is resolved/ closed and host the said events along with all updated information on its website at least for a period of 5 years.

The listed company is required to update any change in the content of its website within 2 working days from the date of such change in the content.

The provisions of this Regulation have removed all the ambiguities of Clause 36 of the erstwhile Listing Agreement and addition of provisions related to explanation for delay in disclosure would surely bring more transparency in the

business affairs of the Company.

Regulation 31(A)Disclosures of Class of Shareholders and

Conditions For Reclassification

The Stock Exchange may allow for reclassification upon receipt of a request from the listed company or the concerned shareholder, along with requisite evidence. The reclassification will be allowed subject to compliance of specified conditions.

I. Reclassification of Promoter as Public Shareholder

When a new promoter replaces the previous promoter subsequent to an open offer or in any other manner, re-classification shall be permitted subject to approval of shareholders in the general meeting.

Shareholders need to specifically approve whether the outgoing promoter can hold any KMP position in the company. In any case, the outgoing promoter cannot act as KMP for a period of more than 3 years from the date of shareholders’ approval.

A.    In case of change in PromoterA.    In case of change in Promoter

The outgoing promoter along with the promoter group and persons acting in concert cannot hold more than 10% of the paid-up equity share capital of the company and shall not have any special rights through any formal or informal arrangements.

In case of transmission/succession/inheritance, the inheritor shall be classified as promoter.

Existing promoters may be re-classified as public in case the company becomes professionally managed and does not have any identifiable promoter subject to the approval of shareholders in a general meeting. A company will be considered as professionally managed for this purpose, if:

No person or group along with Persons Acting in Concert (PACs) taken together holds more than 1% of the paid-up equity share capital of the company (including any convertibles/outstanding warrants/ADR/GDR Holding).

B. In case of Inheritance: B. In case of Inheritance: 

C. In case of Company not having any identifiable promoter: 

C. In case of Company not having any identifiable promoter: 

Mutual Funds/Banks/Insurance Companies/Financial Institutions/FPIs can each hold up to 10% of the paid-up equity share capital of the company (including any convertibles/outstanding warrants/ADR/GDR Holding).

Erstwhile promoters and their relatives may hold KMP position in the company only subject to shareholders’ approval and for a period not exceeding 3 years from the date of shareholders’ approval.

The outgoing promoter shall not have any special rights through any formal or informal arrangements.

The outgoing promoter shall not, directly or indirectly, exercise control over the affairs of the company.

 Increase in public shareholding pursuant to re-classification of promoters shall not be counted towards achieving compliance with minimum public shareholding (MPS) requirement under clause 40A of equity listing agreement.

The event of re-classification may be disclosed as a material event in accordance with the listing agreement/regulations.

D.    Other Conditions: 

D.    Other Conditions: 

SEBI may relax any condition for reclassification in specific cases, if it is satisfied about non-exercise of control by the outgoing promoter or its person acting in concert.

II. Reclassification of Public Shareholder as a Promoter:

Then Public shareholder is required to make an open offer in accordance with the provisions of SEBI (SAST) Regulations, 2011.

E Power to relax the provisions on a case to case basis 

E Power to relax the provisions on a case to case basis 

To resolve the ambiguities as to re classification, SEBI has inserted this regulation to place a regulatory framework for re-classification of

promoters in listed companies as public shareholders under various circumstances.

Regulation 35Annual Information Memorandum

The annual Information Memorandum is needed to be submitted by the listed entities to the stock exchange, in the manner as may be specified by SEBI from time to time.

SEBI has proposed the format of Annual Information Memorandum in its Discussion

paper

SECRETARIAL STANDARDSSetting grounds for Corporate Governance

SecretarialStandards

Effective fromJuly 01,2015

Brief Highlights of SS -1

Brief Highlights of SS -1

Brief Highlights of SS - 2

Brief Highlights of SS - 2

EXEMPTIONS TO PRIVATE COMPANY(vide notification no. GSR 446 (E) dated 5.06.2015 )

KEY HIGHLIGHTS :

Definition of related party {Section 2(76)} The transaction done between a private company and following companies noted below is out of the purview of

the Related party transaction referred to u/s 188 • Holding Company• Subsidiary Company • Associate Company • Subsidiary of the Holding Company to which it is also a Subsidiary

Now a private company can offer shares to employees under the scheme of employee’s stock option with an ordinary resolution instead of a special resolution. {Section 62(1) (b)}

Private Company can accept from its members deposit upto (paid up share capital + free reserves ) without complying with the conditions of { section 73 (2) (a) to (e)}:

(a) issuance of circular (b) Filing of circular with MCA (c) Maintaining Deposit repayment reserve(d) Provide deposit insurance etc as prescribed u/s 73 (2) (a) to (e)

EXEMPTIONS TO PRIVATE COMPANY(vide notification no. GSR 446 (E) dated 5.06.2015 ) - contd

Now there is no need to file Form MGT-14 for the purposes of resolution passed u/s 179 read with Rule 8 of the Companies (Meeting of Board and its power) Rules, 2014. {Section 117 (3) (g)}

The provisions relating to giving notice of 14 days along with the deposit of Rs. 1 lakh etc. for contesting for directorship shall not be applicable on private companies {section 160}

At a general meeting of a private company, the motion of appointment of more than one director can be made by a single resolution {Section 162}

EXEMPTIONS TO PRIVATE COMPANY(vide notification no. GSR 446 (E) dated 5.06.2015 ) - contd

An interested director can now participate in the Board Meeting in which he is interested subject to a condition that he discloses his interest in such contract or arrangement. {Section 184 (2)}

Loan to Director are allowed for private companies which not falls in the criteria as prescribed {Section 185}

A member even after being related party, is allowed to vote on special resolution passed u/s 188 (1) of the Act. {Second proviso of section 188(1)}

Now there is no need to pass resolution for appointment of managing director , whole time director or manager u/s 196 of the Act and no need to comply with Schedule V of the Act. {Section 196 (4) & (5)}