Effective Date:
- Notified on 02nd September, 2015
- Applicable w.e.f. 01st December, 2015
Applicability:
- All Listed Companies who has listed any specified securities in any stock exchanges
All existing listed entities shall execute a fresh listing agreement within 06months from date of notification of SEBI LODR Regulations.
Framework:
- Total XII chapters and X Schedules
- Chapter defines the substantive provisions and schedule defines procedural part
Mandatory Policies required to be framed under SEBI LODR Regulations
- Risk Policy
- Policy on preservation of documents
- Policy on Board Diversity
- Policy on determining ‘material’ subsidiaries
- Policy on materiality of related party transactions
- Policy on dealing with related party transactions
- Whistle Blower Policy
- Policy relating to remuneration of Directors, KMP and other employees
Mandatory Committees of Directors
- Audit Committee
- Nomination and Remuneration Committee
- Stakeholders Relationship Committee
- Risk Management Committee
Board Composition
- Board shall comprise of Executive, atleast 50% Non-Executive and atleast one woman Director
- If Board has Non-executive Chairman:
- Atleast one third of board shall be of Independent Director
- If Board has Executive Chairman:
- Atleast half of board shall be of Independent Director
- If Board has Non-executive Chairman who is promoter or related to promoter or related to person one level below Board:
- Atleast half of board shall be of Independent Director
Key Highlights on Related Party Transactions
- All existing material related party contracts entered prior to regulations shall be placed for approval of shareholders in the first General Meeting subsequent to regulations
- Passing of an Ordinary Resolution instead of Special Resolution in case of all material related party transactions subject to related parties abstaining from voting on such resolutions
- All related party transactions shall require prior approval of Audit Committee
- Audit Committee may grant omnibus approval for related party transactions subject to following conditions namely:
- Audit Committee shall lay down the criteria for granting the omnibus approval which will be in line with the policy on related party transaction and such approval shall be applicable in respect of transactions which are repetitive in nature
- Such approval is in the interest of the company
- Omnibus approval shall specify certain details like: names of related party, nature of transactions, period of transactions, maximum amount of transactions etc.
- Audit Committee shall atleast quarterly review the details of related party transactions
- Such omnibus approval shall be valid only for a period of one year and shall require fresh approval after one year
Preservation of Documents:
- All listed entities shall formulate a policy for preservation of documents
- Documents shall be classified under two categories:
- Documents which are required to be preserved permanently
- Documents which are required to be preserved for atleast eight years
Grievance Redressal Mechanism:
- Registration of listed entities on SCORES is mandatory
- Filing of quarterly statement of various investor complaints received, disposed off, pending during a quarter, with stock exchange
Disclosure of events or information
- All material events shall be disclosed to the stock exchange
- All material events shall be hosted on the website of the listed company for a minimum period of five years and thereafter as per archival policy of the listed entity as disclosed on website.
