SEBI (Listing obligations and disclosure requirements) Regulations, 2015 - Obligations of Listed Ent

Key Takeaways:

Obligations of listed entities
Obligations of Compliance Officer
Principles governing disclosures and obligations
Grievance redressal mechanism

1. CS Meenakshi Jayaraman SEBI(LODR) Regulations, 2015 - Obligations of Listed Entities

2. Credits and Acknowledgments Iswariya B S & Sundarrajan

3. Legends used in the Presentation ECS Electronic Clearing Services FY Financial Year GM General Meeting KMP Key Managerial Personnel LODR Listing Obligations and Disclosure Requirements NEFT National Electronic Funds Transfer RBI Reserve Bank of India Regulation SEBI (LODR) Regulations RTGS Real Time Gross Settlement SE Stock Exchange SEBI / Board Securities and Exchange Board of India

4. Presentation Schema

5. Overview Regulation 23(4) deals with material related party transactions Regulation 31A deals with disclosure of class of shareholders and conditions for re-classification

6. Applicability of the Regulations The Regulation shall apply to the listed entities which have listed any of the following securities on a recognised SE * Specified securities shall mean equity shares and convertible securities as defined under SEBI (Issue of Capital and Disclosure Requirements ) Regulations, 2009

7. 7 Chapter II Principles Governing disclosures and Obligations of Listed Entity

8. Regulation 4- Principles governing disclosures and obligations 8 a) Information shall be prepared and disclosed in accordance with applicable standards of accounting and financial disclosure b) The listed entity shall implement the prescribed accounting standards in letter and spirit in the preparation of financial statements and conduct annual audit by an independent, competent and qualified auditor c) The listed entity shall refrain from misrepresentation and ensure that the information provided to recognised SE(s) and investors is not misleading d) The listed entity shall provide adequate and timely information to recognised SE(s) and investors Listed entity which has listed its securities shall make disclosures and be obliged in accordance with the following principles: Regulation 4(1):

9. Contd. f) The channels for spreading information shall provide for equal, timely and cost efficient access to relevant information by investors g) The listed entity shall abide by all provisions of the applicable laws including securities laws h) The listed entity shall make disclosures and follow its obligations in letter and spirit taking into consideration the interest of all stakeholders i) Filings, reports, statements, documents and information which are event based has to be filed periodically and contain the relevant information j) Periodic filings, reports, statements, documents and information reports shall contain information that shall enable investors to track the performance of a listed entity e) The listed entity shall ensure that the information spread by them as per the provisions of the Regulation are accurate, timely and spread in simple language

10. Regulation 4(2)(a)- The rights of shareholders (i)Right to participate and be informed about fundamental corporate changes decision (v)Right to participate in key corporate governance decisions (ii)Opportunity to participate and vote in the general shareholders meeting (vi)To exercise ownership rights including institutional investors (iii)To be informed about the procedures to vote in the general shareholders meeting (vii)Adequate mechanism to address the grievances (iv)Opportunity to ask questions to Board of Directors, to place items on the agenda and to propose resolutions (viii)Protection of minority shareholders and effective means to redress from abusive action Listed entity which has listed its specified securities shall comply with the corporate governance provisions as specified in Chapter IV which shall be implemented in a manner so as to achieve the objectives of the principles as mentioned below: Contd.

11. Regulation 4(2)(b)- Timely information (i)Timely information regarding the date, location, agenda and the issues to be discussed in GM (ii)Information about capital structures and arrangements to obtain degree of control disproportionate to ownership (iii)Rights attached to all series and classes of shares has to be disclosed before the acquisition of shares Contd.

12. Regulation 4(2)(c)- Equitable treatment (i)All shareholders of the same series of a class shall be treated equally (iv)The Listed entity shall make a framework to avoid insider trading and abusive self-dealing (ii)Effective shareholder participation in key corporate governance decisions (v)Processes and procedures of GM shall allow for equitable treatment to all shareholders (iii)Exercise of voting rights by foreign shareholders shall be facilitated (vi)The listed entity shall not make any procedures which are unduly difficult or expensive to cast votes Contd.

13. Regulation 4(2)(d)- Role of stakeholders in corporate governance (ii)Right to obtain redress for violation of stakeholders rights (i)The listed entity shall respect the rights of Stakeholders (iv)The listed entity shall devise an effective whistle blower mechanism (iii)Right of access to relevant and reliable information Contd.

14. Regulation 4(2)(e)- Disclosure and transparency (i)The listed entity shall prepare and disclose financial and non-financial information in accordance with the prescribed standards of accounting (ii)The channels for spreading information shall be equal, timely and cost efficient to users (iii)Minutes of the meetings shall be maintained explicitly recording dissenting opinions, if any Contd.

15. Regulation 4(2)(f)- Responsibilities of the Board of Directors Regulation 4(2)(f)(i)- Disclosure of Information Members of board of directors and KMP shall disclose to the board of directors whether they, directly, indirectly or on behalf of third parties, have a material interest in any transaction or matter directly affecting the listed entity The board of directors and senior management shall maintain operational transparency to stakeholders and at the same time they have to maintain confidentiality of information Contd.

16. Regulation 4(2)(f)(ii)- Key functions of the board of directors Reviewing and guiding corporate strategy, major plans of action, risk policy, annual budgets and business plans and overseeing major capital expenditures, acquisitions and disinvestments Monitoring the effectiveness of the listed entity’s governance practices and making changes as needed Selecting, compensating, monitoring and, when necessary, replacing key managerial personnel and overseeing succession planning Aligning KMP and remuneration of board of directors with the longer term interests of the listed entity and its shareholders Contd.

17. Ensuring a transparent nomination of board of directors with the diversity of thought, experience, knowledge, perspective and gender in the board of directors Monitoring and managing potential conflicts of interests of management, members of the board of directors and shareholders Ensuring the integrity of the listed entity’s accounting and financial reporting systems and compliance with the law and relevant standards Overseeing the process of disclosure and communications Monitoring and reviewing board of director’s evaluation framework Contd.

18. Regulation 4(2)(f)(iii)- Other responsibilities The board of directors shall provide strategic guidance to the listed entity and ensure effective monitoring of the management They shall set a corporate culture and value by which the executives shall behave Members of the board of directors shall act in good faith, with due diligence and care and in the best interest of the listed entity and the shareholders They shall encourage continuing directors training to ensure that the members of board of directors are kept up to date They shall treat all shareholders fairly while making decisions They shall maintain high ethical standards and take into account the interest of stakeholders They shall exercise objective independent judgement on corporate affairs Contd.

19. They shall consider assigning a sufficient number of non-executive members of board of directors capable of exercising independent judgements They shall while encouraging positive thinking should ensure that it does not result in significant or excessive risk They shall have the ability to ‘step back’ to assist executive management The compositions and working procedures shall be well defined at the time of establishing committees They shall be able to commit themselves effectively to their responsibilities For fulfilling their responsibilities they shall have access to accurate, relevant and timely information Facilitating the independent directors to perform their role effectively Contd.

20. Regulation 4(3) In case of any ambiguity or incongruity between the principles and relevant regulations, the principles specified in this chapter shall prevail Contd.

21. Chapter III Common obligations of Listed Entities

22. Regulation 5 - General obligation of compliance The listed entity shall ensure that key managerial personnel, directors, promoters or any other person dealing with the listed entity, complies with responsibilities or obligations, if any, assigned to them under the Regulations Regulation 6 - Compliance officer and his obligations Regulation 6(1) A listed entity shall appoint a qualified company secretary as the compliance officer

23. Regulation 6(2): a ) Ensuring conformity with the regulatory provisions applicable b ) Coordinating with the Board, recognised SE and depositories w.r.t. compliance d ) Monitoring email address of grievance redressal division c) Ensuring that the procedures followed by listed entity are correct These Regulations shall not be applicable for units issued by mutual funds which are listed on a recognised SE(s) Responsibilities of the compliance officer

24. Regulation 7(1) Regulation 7 - Share Transfer Agent The listed entity shall appoint a share transfer agent or manage the share transfer facility in-house If the number of holders of securities in the listed company exceeds 1 lakh, in-house share transfer facility shall not be opted subject to the following: - the listed entity shall either register with the Board as Category II share transfer agent or appoint Registrar to an issue and share transfer agent registered with the Board

25. Regulation 7(2) The listed entity shall ensure that all activities in relation to share transfer facility are maintained either in house or by the Registrar to an issue and share transfer agent registered with the Board Regulation 7(3)

26. Regulation 7(5) Regulation 7(4) At the time of change or appointment of new share transfer agent, the listed entity shall enter into a tripartite agreement between the existing share transfer agent, the new share transfer agent and the listed entity If the existing share transfer facility is managed in-house, the agreement shall be entered between the listed entity and the new share transfer agent The listed entity shall intimate the appointment made as per Regulation 7(4) to the SE(s) within 7 days of entering into the agreement The agreement referred to in Regulation 7(4) shall be placed in the subsequent meeting of the board of directors The requirements of Regulation 7 shall not be applicable to the units issued by the mutual fund that are listed on recognised SE Regulation 7(6)

27. Regulation 8- Co-operation with intermediaries registered with the Board The listed entity shall cooperate with and submit the correct and adequate information to the intermediaries registered with the Board within timelines and procedures specified under the Act, Regulations and circulars issued This Regulation shall not be applicable to the units issued by mutual funds listed on a recognised SE

28. Regulation 9- Preservation of documents 1) The listed entity shall file the necessary documents with the recognised SE(s) on the electronic platform 2)The listed entity shall put in place infrastructure as required for compliance with the above provision Regulation 10- Filing of Information

29. Regulation 11- Scheme of Arrangement Regulation 12 - Payment of dividend or interest or redemption or repayment Listed entity shall ensure that any scheme of arrangement to be presented to any Court or Tribunal does not in any way violate, override or limit the provisions of securities laws or requirements of SE This Regulation is not applicable for units issued by Mutual fund which are listed on a recognised SE(s) The listed entity shall use any of the electronic mode of payment facility approved by RBI, in the manner specified in Schedule I, for payment of dividend or interest or redemption or repayment amounts If it is not possible to use electronic mode of payment, ‘payable at par’ warrants or cheques may be issued and if the amount payable as dividend exceeds Rs. 1,500, the ‘payable at par’ warrants or cheques shall be sent by speed post

30. Schedule I The listed entity shall use the facility of ECS/RTGS/NEFT as follows The listed entity shall either on its own or through registered intermediaries can use the above said facilities for payment of dividend or interest or redemption or repayment amount If the aforesaid details are not available, then payment shall be made using ‘payable at par’ warrants/cheques Listed entity shall mandatorily print the bank account details of the investors on such payment instruments Address of the investors shall be printed on the payment instruments if bank details are not available The bank details of the investors has to be maintained by the listed entity or share transfer agent as follows: by seeking the details from depositories if the investors hold securities in demat by updating the details of investors at their end if the investors hold securities in physical mode

31. Regulation 13 - Grievance Redressal Mechanism 1) The listed entity shall ensure that adequate steps are taken for expeditious redressal of investors complaints 2) The listed entity shall make sure that it is registered on the SCORES or any other electronic platform to handle investors complaints electronically 3)The listed entity shall file with the recognised SE(s) on a quarterly basis, within 21 days from the end of each quarter, a statement showing the various positions of investors complaints 4)The statement as specified above shall be placed on quarterly basis, before the board of directors of the listed entity

32. Regulation 14- Fees and other charges to be paid to the recognised SE(s) The listed entity shall pay all such fees or charges, as applicable, to the recognised SE(s), in the manner as specified by the Board or recognised SE(s)

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