CIRCULAR
CIR/CFD/POLICY CELL/2/2014
CORPORATE GOVERNANCE IN LISTED ENTITIES
AMENDMENTS TO CLAUSES 35B AND 49 OF THE EQUITY LISTING AGREEMENT
1.
Please refer to
master circular No. SEBI/CFD/DIL/CG/2004/12/10 dated October 29, 2004 on Clause
49 of the Equity Listing Agreement.
2.
The Companies Act,
2013 was enacted on August 30, 2013 which provides for a major overhaul in the
Corporate Governance norms for all companies. The rules pertaining to Corporate
Governance were notified on March 27, 2014. The requirements under the
Companies Act, 2013 and the rules notified there under would be applicable for
every company or a class of companies (both listed and unlisted) as may be
provided therein. It has been decided to review the provisions of the Listing
Agreement in this regard with the objectives to align with the provisions of
the Companies Act, 2013, adopt best practices on corporate governance and to
make the corporate governance framework more effective.
3.
The full text of
the revised Clause 35B of the Equity Listing Agreement is given in Part-A
of the circular. The full text of the revised Clause 49 of the Equity Listing
Agreement is given in Part-B of the circular.
4.
Applicability
4.1
The revised Clause
49 would be applicable to all listed companies with effect from October 01,
2014. However, the provisions of Clause 49(VI)(C) as given in Part-B shall be
applicable to top 100 listed companies by market capitalisation as at the end
of the immediate previous financial year.
4.2
The provisions of
Clause 49(VII) as given in Part-B shall be applicable to all prospective
transactions. All existing material related party contracts or arrangements as
on the date of this circular which are likely to continue beyond March 31, 2015
shall be placed for approval of the shareholders in the first General Meeting subsequent
to October 01, 2014. However, a company may choose to get such contracts
approved by the shareholders even before October 01, 2014.
4.3 For other listed entities which are not companies, but body corporate or
are subject to regulations under other statutes (e.g. banks, financial
institutions, insurance companies etc.), the Clause 49 will apply to the extent
that it does not violate their respective statutes and guidelines or directives
issued by the relevant regulatory authorities. The Clause 49 is not applicable
to Mutual Funds.
4.4
The revised Clause
35B would be applicable to all listed companies and the modalities would be
governed by the provisions of Companies (Management and Administration) Rules,
2014. Circular No. CIR/CFD/DIL/6/2012 dated July 13, 2012 stands amended to
that extent.
5.
The monitoring
cell formed by the Stock Exchanges in terms of Circular No. CIR/CFD/POLICYCELL/13/2013
dated November 18, 2013 shall also monitor the compliance with the provisions
of the revised Clause 49 on corporate governance for all listed companies. The
cell shall ascertain the adequacy and accuracy of disclosures in the quarterly
compliance reports received from the companies and shall submit a consolidated
compliance report to SEBI within 60 days from the end of each quarter.
6.
The above listing
conditions are specified in exercise of the powers conferred under Section 11 read
with Section 11A of the Securities and Exchange Board of India Act, 1992. The
said listing conditions should form part of the existing Equity Listing
Agreement of the Stock Exchange.
7.
All Stock
Exchanges are advised to ensure compliance with this circular and carry out the
amendments to their Listing Agreement as per Part-A and Part-B of this
circular.
8.
This master
circular will supersede all other earlier circulars issued by SEBI on Clauses
35B and 49 of the Equity Listing Agreement.
9.
This circular is available on SEBI
website at www.sebi.gov.in under the categories
“Legal Framework”
and “Issues and Listing”.
Yours faithfully,
Amit
Tandon
Deputy
General Manager
+91-22-26449373
amitt@sebi.gov.in
Enclosures:
Part-A:
Clause 35B of the Equity Listing Agreement
Part-B:
Clause 49 of the Equity Listing Agreement
Clause 35B
35B. (i) The issuer agrees to provide e-voting facility to its
shareholders, in respect of all shareholders' resolutions, to be passed at
General Meetings or through postal ballot. Such e-voting facility shall be kept
open for such period specified under the Companies (Management and
Administration) Rules, 2014 for shareholders to send their assent or dissent.
(ii) Issuer shall continue to enable those shareholders, who do not have
access to e-voting facility, to send their assent or dissent in writing on a
postal ballot as per the provisions of the Companies (Management and
Administration) Rules, 2014 or amendments made thereto.
(iii) Issuer shall utilize the service of any one of the agencies providing
e-voting platform, which is in compliance with conditions specified by the
Ministry of Corporate Affairs, Government of India, from time to time.
(iv) Issuer shall mention the Internet link of such e-voting platform in the
notice to their shareholders
Part-B
49. Corporate Governance
I.
The company agrees
to comply with the provisions of Clause 49 which shall be implemented in a
manner so as to achieve the objectives of the principles as mentioned below. In
case of any ambiguity, the said provisions shall be interpreted and applied in
alignment with the principles.
A.
The Rights of Shareholders
1.
The company should
seek to protect and facilitate the exercise of shareholders’ rights.
a.
Shareholders
should have the right to participate in, and to be sufficiently informed on,
decisions concerning fundamental corporate changes.
b.
Shareholders
should have the opportunity to participate effectively and vote in general shareholder
meetings.
c.
Shareholders
should be informed of the rules, including voting procedures that govern
general shareholder meetings.
d.
Shareholders
should have the opportunity to ask questions to the board, to place items on
the agenda of general meetings, and to propose resolutions, subject to
reasonable limitations.
e.
Effective
shareholder participation in key Corporate Governance decisions, such as the
nomination and election of board members, should be facilitated.
f.
The exercise of
ownership rights by all shareholders, including institutional investors, should
be facilitated.
g.
The Company should
have an adequate mechanism to address the grievances of the shareholders.
h.
Minority
shareholders should be protected from abusive actions by, or in the interest
of, controlling shareholders acting either directly or indirectly, and should
have effective means of redress.
2.
The company should provide adequate and
timely information to shareholders.
a. Shareholders should be furnished with sufficient and timely information
concerning the date, location and agenda of general meetings, as well as full
and timely information regarding the issues to be discussed at the meeting.
b.
Capital structures
and arrangements that enable certain shareholders to obtain a degree of control
disproportionate to their equity ownership should be disclosed.
c.
All investors
should be able to obtain information about the rights attached to all series
and classes of shares before they purchase.
3.
The company should
ensure equitable treatment of all shareholders, including minority and foreign
shareholders.
a.
All shareholders of the same series of
a class should be treated equally.
b.
Effective
shareholder participation in key Corporate Governance decisions, such as the
nomination and election of board members, should be facilitated.
c.
Exercise of voting rights by foreign
shareholders should be facilitated.
d.
The company should
devise a framework to avoid Insider trading and abusive self-dealing.
e.
Processes and
procedures for general shareholder meetings should allow for equitable
treatment of all shareholders.
f.
Company procedures
should not make it unduly difficult or expensive to cast votes.
B.
Role of stakeholders in Corporate
Governance
1.
The company should
recognise the rights of stakeholders and encourage co-operation between company
and the stakeholders.
a.
The rights of
stakeholders that are established by law or through mutual agreements are to be
respected.
b.
Stakeholders
should have the opportunity to obtain effective redress for violation of their
rights.
c.
Company should encourage mechanisms for
employee participation.
d.
Stakeholders should
have access to relevant, sufficient and reliable information on a timely and
regular basis to enable them to participate in Corporate Governance process.
e.
The company should
devise an effective whistle blower mechanism enabling stakeholders, including
individual employees and their representative bodies, to freely communicate
their concerns about illegal or unethical practices.
C.
Disclosure and transparency
1.
The company should
ensure timely and accurate disclosure on all material matters including the
financial situation, performance, ownership, and governance of the company.
a.
Information should
be prepared and disclosed in accordance with the prescribed standards of
accounting, financial and non-financial disclosure.
b.
Channels for
disseminating information should provide for equal, timely and cost efficient
access to relevant information by users.
c.
The company should
maintain minutes of the meeting explicitly recording dissenting opinions, if
any.
d.
The company should
implement the prescribed accounting standards in letter and spirit in the
preparation of financial statements taking into consideration the interest of
all stakeholders and should also ensure that the annual audit is conducted by
an independent, competent and qualified auditor.
D.
Responsibilities of the Board
1.
Disclosure of Information
a.
Members of the
Board and key executives should be required to disclose to the board whether
they, directly, indirectly or on behalf of third parties, have a material
interest in any transaction or matter directly affecting the company.
b. The Board and top management should conduct themselves so as to meet the
expectations of operational transparency to stakeholders while at the same time
maintaining confidentiality of information in order to foster a culture for
good decision-making.
2.
Key functions of the Board
The board should
fulfill certain key functions, including:
a.
Reviewing and
guiding corporate strategy, major plans of action, risk policy, annual budgets
and business plans; setting performance objectives; monitoring implementation
and corporate performance; and overseeing major capital expenditures,
acquisitions and divestments.
b.
Monitoring the
effectiveness of the company’s governance practices and making changes as
needed.
c.
Selecting,
compensating, monitoring and, when necessary, replacing key executives and
overseeing succession planning.
d.
Aligning key
executive and board remuneration with the longer term interests of the company
and its shareholders.
e.
Ensuring a
transparent board nomination process with the diversity of thought, experience,
knowledge, perspective and gender in the Board.
f.
Monitoring and
managing potential conflicts of interest of management, board members and
shareholders, including misuse of corporate assets and abuse in related party
transactions.
g.
Ensuring the
integrity of the company’s accounting and financial reporting systems,
including the independent audit, and that appropriate systems of control are in
place, in particular, systems for risk management, financial and operational
control, and compliance with the law and relevant standards.
h.
Overseeing the process of disclosure
and communications.
i.
Monitoring and reviewing Board
Evaluation framework.
3.
Other responsibilities
a.
The Board should
provide the strategic guidance to the company, ensure effective monitoring of
the management and should be accountable to the company and the shareholders.
b.
The Board should
set a corporate culture and the values by which executives throughout a group
will behave.
c.
Board members
should act on a fully informed basis, in good faith, with due diligence and
care, and in the best interest of the company and the shareholders.
d.
The Board should
encourage continuing directors training to ensure that the Board members are
kept up to date.
e.
Where Board
decisions may affect different shareholder groups differently, the Board should
treat all shareholders fairly.
f.
The Board should
apply high ethical standards. It should take into account the interests of
stakeholders.
g.
The Board should
be able to exercise objective independent judgement on corporate affairs.
h.
Boards should
consider assigning a sufficient number of non-executive Board members capable
of exercising independent judgement to tasks where there is a potential for
conflict of interest.
i.
The Board should
ensure that, while rightly encouraging positive thinking, these do not result
in over-optimism that either leads to significant risks not being recognised or
exposes the company to excessive risk.
j.
The Board should
have ability to ‘step back’ to assist executive management by challenging the assumptions
underlying: strategy, strategic initiatives (such as acquisitions), risk
appetite, exposures and the key areas of the company's focus.
k.
When committees of
the board are established, their mandate, composition and working procedures
should be well defined and disclosed by the board.
l.
Board members
should be able to commit themselves effectively to their responsibilities.
m.
In order to fulfil
their responsibilities, board members should have access to accurate, relevant
and timely information.
n.
The Board and
senior management should facilitate the Independent Directors to perform their
role effectively as a Board member and also a member of a committee.
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 one woman director and not less than
fifty percent of the Board of Directors comprising non-executive directors.
2.
Where the Chairman
of the Board is a non-executive director, at least one-third of the Board
should comprise independent directors and in case the company does not have a
regular non-executive Chairman, at least half of the Board should comprise
independent directors.
Provided that where the regular non-executive Chairman is a promoter of
the company or is related to any promoter or person occupying management
positions at the Board level or at one level below the Board, at least one-half
of the Board of the company shall consist of independent directors.
Explanation: For the purpose of the expression
“related to any promoter” referred to in sub-clause (2):
i.
If the promoter is
a listed entity, its directors other than the independent directors, its
employees or its nominees shall be deemed to be related to it;
ii.
If the promoter is
an unlisted entity, its directors, its employees or its nominees shall be deemed
to be related to it.”
B.
Independent Directors
1.
For the purpose of
the clause A, the expression ‘independent director’ shall mean a non-executive
director, other than a nominee director of the company:
a.
who, in the
opinion of the Board, is a person of integrity and possesses relevant expertise
and experience;
b.
(i) who is or was
not a promoter of the company or its holding, subsidiary or associate company;
(ii) who is not related to promoters or directors in the company, its
holding, subsidiary or associate company;
c.
apart from
receiving director's remuneration, has or had no pecuniary relationship with
the company, its holding, subsidiary or associate company, or their promoters,
or directors, during the two immediately preceding financial years or during
the current financial year;
d.
none of whose
relatives has or had pecuniary relationship or transaction with the company,
its holding, subsidiary or associate company, or their promoters, or directors,
amounting to two per cent. or more of its gross turnover or total income or
fifty lakh rupees or such higher amount as may be prescribed, whichever is
lower, during the two immediately preceding financial years or during the
current financial year;
e.
who, neither himself nor any of his
relatives —
(i) holds or has held the position of a key managerial personnel or is or
has been employee of the company or its holding, subsidiary or associate
company in any of the three financial years immediately preceding the financial
year in which he is proposed to be appointed;
(ii) is or has been an employee or proprietor or a partner, in any of the
three financial years immediately preceding the financial year in which he is
proposed to be appointed, of —
(A) a firm of
auditors or company secretaries in practice or cost auditors of the company or
its holding, subsidiary or associate company; or
(B) any legal or a consulting firm that has or
had any transaction with the company, its holding, subsidiary or associate
company amounting to ten per cent or more of the gross turnover of such firm;
(iii) holds together with his relatives two per cent or more of the total
voting power of the company; or
(iv) is a Chief Executive or director, by whatever name called, of any
non-profit organisation that receives twenty-five per cent or more of its
receipts from the company, any of its promoters, directors or its holding,
subsidiary or associate company or that holds two per cent or more of the total
voting power of the company;
(v) is a material supplier, service provider or customer or a lessor or
lessee of the company;
f. who is less than 21 years of age.
Explanation
For
the purposes of the sub-clause (1):
i.
"Associate"
shall mean a company which is an “associate” as defined in Accounting Standard
(AS) 23, “Accounting for Investments in Associates in Consolidated Financial
Statements”, issued by the Institute of Chartered
Accountants of
India.
ii.
“Key Managerial
Personnel" shall mean “Key Managerial Personnel” as defined in section
2(51) of the Companies Act, 2013.
iii.
“Relative” shall mean “relative” as
defined in section 2(77) of the Companies
Act, 2013 and
rules prescribed there under.
2.
Limit on number of directorships
a.
A person shall not
serve as an independent director in more than seven listed companies.
b.
Further, any
person who is serving as a whole time director in any listed company shall
serve as an independent director in not more than three listed companies.
3.
Maximum tenure of Independent Directors
a.
An independent
director shall hold office for a term up to five consecutive years on the Board
of a company and shall be eligible for reappointment for another term of up to
five consecutive years on passing of a special resolution by the company.
Provided that a person who has already served as an independent director
for five years or more in a company as on October 1, 2014 shall be eligible for
appointment, on completion of his present term, for one more term of up to five
years only.
Provided further that an independent director, who completes his above
mentioned term shall be eligible for appointment as independent director in the
company only after the expiration of three years of ceasing to be an
independent director in the company.
4.
Formal letter of appointment to
Independent Directors
a. The company shall issue a formal letter of appointment to independent
directors in the manner as provided in the Companies Act, 2013.
b. The letter of appointment along with the detailed profile of independent
director shall be disclosed on the websites of the company and the Stock
Exchanges not later than one working day from the date of such appointment.
5.
Performance evaluation of Independent
Directors
a.
The Nomination
Committee shall lay down the evaluation criteria for performance evaluation of
independent directors.
b.
The company shall
disclose the criteria for performance evaluation, as laid down by the
Nomination Committee, in its Annual Report.
c.
The performance
evaluation of independent directors shall be done by the entire Board of
Directors (excluding the director being evaluated).
d.
On the basis of
the report of performance evaluation, it shall be determined whether to extend
or continue the term of appointment of the independent director.
6.
Separate meetings of the Independent
Directors
a.
The 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. All the
independent directors of the company shall strive to be present at such
meeting.
b.
The independent directors in the
meeting shall, inter-alia:
i.
review the
performance of non-independent directors and the Board as a whole;
ii.
review the
performance of the Chairperson of the company, taking into account the views of
executive directors and non-executive directors;
iii.
assess the
quality, quantity and timeliness of flow of information between the company
management and the Board that is necessary for the Board to effectively and
reasonably perform their duties.
7.
Training of Independent Directors
a.
The company shall
provide suitable training to independent directors to familiarize them with the
company, their roles, rights, responsibilities in the company, nature of the
industry in which the company operates, business model of the company, etc.
b.
The details of such training imparted
shall be disclosed in the Annual Report.
C.
Non-executive Directors’ compensation
and disclosures
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. The shareholders’
resolution shall specify the limits for the maximum number of stock options
that can be granted to non-executive directors, in any financial year and in
aggregate.
Provided that the requirement of obtaining prior approval of
shareholders in general meeting shall not apply to payment of sitting fees to
non-executive directors, if made within the limits prescribed under the
Companies Act, 2013 for payment of sitting fees without approval of the Central
Government.
Provided
further that independent directors shall not be entitled to any stock option.
D.
Other provisions as to Board and
Committees
1.
The Board shall
meet at least four times a year, with a maximum time gap of one hundred and
twenty days between any two meetings. The minimum information to be made
available to the Board is given in Annexure - X to the Listing Agreement.
2.
A director shall
not be a member in more than ten committees or act as Chairman of more than
five committees across all companies in which he is a director. Furthermore,
every director shall inform the company about the committee positions he
occupies in other companies and notify changes as and when they take place.
Explanation:
i. For the purpose of considering the limit of the committees on which a
director can serve, all public limited companies, whether listed or not, shall
be included and all other companies including private limited companies,
foreign companies and companies under Section 8 of the Companies Act, 2013
shall be excluded.
ii.For
the purpose of reckoning the limit under this sub-clause, Chairmanship /
membership of the Audit Committee and the Stakeholders' Relationship Committee
alone shall be considered.
3.
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.
4.
An independent
director who resigns or is removed from the Board of the Company shall be
replaced by a new independent director at the earliest but not later than the
immediate next Board meeting or three months from the date of such vacancy,
whichever is later.
5.
Provided that
where the company fulfils the requirement of independent directors in its Board
even without filling the vacancy created by such resignation or removal, as the
case may be, the requirement of replacement by a new independent director shall
not apply.
6.
The Board of the
company shall satisfy itself that plans are in place for orderly succession for
appointments to the Board and to senior management.
E.
Code of Conduct
1.
The Board shall
lay down a code of conduct for all Board members and senior management of the
company. The code of conduct shall be posted on the website of the company.
2.
All Board members
and senior management personnel shall affirm compliance with the code on an
annual basis. The Annual Report of the company shall contain a declaration to
this effect signed by the CEO.
3.
The Code of
Conduct shall suitably incorporate the duties of Independent Directors as laid
down in the Companies Act, 2013.
4.
An independent
director shall be held liable, only in respect of such acts of omission or
commission by a company which had occurred 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.
Explanation: For this purpose, the term “senior management” shall mean personnel of
the company who are members of its core management team excluding Board of
Directors. Normally, this would comprise all members of management one level
below the executive directors, including all functional heads.
F.
Whistle Blower Policy
1.
The company shall
establish a vigil mechanism for directors and employees to report concerns
about unethical behaviour, actual or suspected fraud or violation of the
company’s code of conduct or ethics policy.
2.
This mechanism
should also provide for adequate safeguards against victimization of
director(s) / employee(s) who avail of the mechanism and also provide for
direct access to the Chairman of the Audit Committee in exceptional cases.
3.
The details of
establishment of such mechanism shall be disclosed by the company on its
website and in the Board’s report.
III.
Audit Committee
A. Qualified and
Independent Audit Committee
A qualified and independent audit committee shall be set up, giving the
terms of reference subject to the following:
1.
The audit
committee shall have minimum three directors as members. Two-thirds of the
members of audit committee shall be independent directors.
2.
All members of
audit committee shall be financially literate and at least one member shall
have accounting or related financial management expertise.
Explanation
(i): The
term “financially literate” means the ability to read and understand
basic financial statements i.e. balance sheet, profit and loss account, and
statement of cash flows.
Explanation
(ii): A
member will be considered to have accounting or related financial
management expertise if he or she possesses experience in finance or
accounting, or requisite professional certification in accounting, or any other
comparable experience or background which results in the individual’s financial
sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
3.
The Chairman of the Audit Committee
shall be an independent director;
4.
The Chairman of
the Audit Committee shall be present at Annual General Meeting to answer
shareholder queries;
5.
The Audit
Committee may invite such of the executives, as it considers appropriate (and
particularly the head of the finance function) to be present at the meetings of
the committee, but on occasions it may also meet without the presence of any
executives of the company. The finance director, head of internal audit and a
representative of the statutory auditor may be present as invitees for the
meetings of the audit committee;
6.
The Company Secretary shall act as the
secretary to the committee.
B.
Meeting of Audit Committee
The Audit Committee should meet at least four times in a year and not
more than four months shall elapse between two meetings. The quorum shall be
either two members or one third of the members of the audit committee whichever
is greater, but there should be a minimum of two independent members present.
C. Powers of Audit Committee
The Audit Committee shall have powers, which should include the
following:
1.
To investigate any activity within its
terms of reference.
2.
To seek information from any employee.
3.
To obtain outside legal or other
professional advice.
4.
To secure
attendance of outsiders with relevant expertise, if it considers necessary.
D. Role of Audit Committee
The role of the Audit Committee shall include the following:
1.
Oversight of the
company’s financial reporting process and the disclosure of its financial
information to ensure that the financial statement is correct, sufficient and
credible;
2.
Recommendation for
appointment, remuneration and terms of appointment of auditors of the company;
3.
Approval of
payment to statutory auditors for any other services rendered by the statutory
auditors;
4.
Reviewing, with
the management, the annual financial statements and auditor's report thereon
before submission to the board for approval, with particular reference to:
a.
Matters required
to be included in the Director’s Responsibility Statement to be included in the
Board’s report in terms of clause (c) of sub-section 3 of section 134 of the
Companies Act, 2013
b.
Changes, if any,
in accounting policies and practices and reasons for the same
c.
Major accounting
entries involving estimates based on the exercise of judgment by management
d.
Significant
adjustments made in the financial statements arising out of audit findings
e.
Compliance with
listing and other legal requirements relating to financial statements
f.
Disclosure of any related party
transactions
g.
Qualifications in the draft audit
report
5.
Reviewing, with
the management, the quarterly financial statements before submission to the
board for approval;
6.
Reviewing, with
the management, the statement of uses / application of funds raised through an
issue (public issue, rights issue, preferential issue, etc.), the statement of
funds utilized for purposes other than those stated in the offer document /
prospectus / notice and the report submitted by the monitoring agency
monitoring the utilisation of proceeds of a public or rights issue, and making
appropriate recommendations to the Board to take up steps in this matter;
7.
Review and monitor
the auditor’s independence and performance, and effectiveness of audit process;
8.
Approval or any
subsequent modification of transactions of the company with related parties;
9.
Scrutiny of inter-corporate loans and
investments;
10.
Valuation of undertakings or assets of
the company, wherever it is necessary;
11.
Evaluation of internal financial
controls and risk management systems;
12.
Reviewing, with
the management, performance of statutory and internal auditors, adequacy of the
internal control systems;
13.
Reviewing the
adequacy of internal audit function, if any, including the structure of the
internal audit department, staffing and seniority of the official heading the
department, reporting structure coverage and frequency of internal audit;
14.
Discussion with internal auditors of
any significant findings and follow up there on;
15.
Reviewing the
findings of any internal investigations by the internal auditors into matters
where there is suspected fraud or irregularity or a failure of internal control
systems of a material nature and reporting the matter to the board;
16.
Discussion with
statutory auditors before the audit commences, about the nature and scope of
audit as well as post-audit discussion to ascertain any area of concern;
17.
To look into the
reasons for substantial defaults in the payment to the depositors, debenture
holders, shareholders (in case of non-payment of declared dividends) and
creditors;
18.
To review the functioning of the
Whistle Blower mechanism;
19.
Approval of
appointment of CFO (i.e., the whole-time Finance Director or any other person
heading the finance function or discharging that function) after assessing the
qualifications, experience and background, etc. of the candidate;
20.
Carrying out any
other function as is mentioned in the terms of reference of the Audit
Committee.
Explanation (i): The term "related party
transactions" shall have the same meaning as provided in Clause
49(VII) of the Listing Agreement.
E. Review of information by Audit Committee
The Audit Committee shall mandatorily review the following information:
1.
Management
discussion and analysis of financial condition and results of operations;
2.
Statement of
significant related party transactions (as defined by the Audit Committee),
submitted by management;
3.
Management letters
/ letters of internal control weaknesses issued by the statutory auditors;
4.
Internal audit reports relating to
internal control weaknesses; and
5.
The appointment, removal and terms of
remuneration of the Chief internal auditor shall be subject to review by the
Audit Committee.
IV. Nomination and Remuneration Committee
A.
The company shall
set up a nomination and remuneration committee which shall comprise at least
three directors, all of whom shall be non-executive directors and at least half
shall be independent. Chairman of the committee shall be an independent
director.
B.
The role of the committee shall, inter-alia,
include the following:
1.
Formulation of the
criteria for determining qualifications, positive attributes and independence
of a director and recommend to the Board a policy, relating to the remuneration
of the directors, key managerial personnel and other employees;
2.
Formulation of criteria for evaluation
of Independent Directors and the Board;
3.
Devising a policy on Board diversity;
4.
Identifying
persons who are qualified to become directors and who may be appointed in
senior management in accordance with the criteria laid down, and recommend to
the Board their appointment and removal. The company shall disclose the
remuneration policy and the evaluation criteria in its Annual Report.
C.
The Chairman of
the nomination and remuneration committee could be present at the Annual General
Meeting, to answer the shareholders' queries. However, it would be up to the
Chairman to decide who should answer the queries.
V.
Subsidiary Companies
A.
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.
B.
The Audit
Committee of the listed holding company shall also review the financial
statements, in particular, the investments made by the unlisted subsidiary
company.
C.
The minutes of the
Board meetings of the unlisted subsidiary company shall be placed at the Board
meeting of the listed holding company. 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.
D.
The company shall
formulate a policy for determining ‘material’ subsidiaries and such policy
shall be disclosed to Stock Exchanges and in the Annual Report.
E.
For the purpose of
this clause, a subsidiary shall be considered as material if the investment of
the company in the subsidiary exceeds twenty per cent of its consolidated net
worth as per the audited balance sheet of the previous financial year or if the
subsidiary has generated twenty per cent of the consolidated income of the
company during the previous financial year.
F.
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.
G.
Selling, disposing
and leasing of assets amounting to more than twenty percent of the assets of
the material subsidiary shall require prior approval of shareholders by way of
special resolution
Explanation
(i): 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 20% of the consolidated income or net worth
respectively, of the listed holding company and its subsidiaries in the
immediately preceding accounting year.
Explanation
(ii): The
term “significant transaction or arrangement” shall mean any individual
transaction or arrangement that exceeds or is likely to exceed 10% of the total
revenues or total expenses or total assets or total liabilities, as the case
may be, of the material unlisted subsidiary for the immediately preceding
accounting year.
Explanation
(iii): Where
a listed holding company has a listed subsidiary which is itself a
holding company, the above provisions shall apply to the listed subsidiary
insofar as its subsidiaries are concerned.
VI. Risk Management
- The
company shall lay down procedures to inform Board members about the risk
assessment and minimization procedures.
- The
Board shall be responsible for framing, implementing and monitoring the
risk management plan for the company.
- The
company shall also constitute a Risk Management Committee. The Board shall
define the roles and responsibilities of the 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.
VII. Related Party
Transactions
- A
related party transaction is a transfer of resources, services or
obligations between a company and a related party, regardless of whether a
price is charged.
- A ‘related party' is a person or entity that is related
to the company. Parties are considered to be related if one party has the
ability to control the other party or exercise significant influence over
the other party, directly or indirectly, in making financial and/or
operating decisions and includes
the following:
1.
A person or a
close member of that person’s family is related to a company if that person:
a.
is a related party under Section 2(76)
of the Companies Act, 2013;or
b.
has control or joint control or
significant influence over the company; or
c.
is a key
management personnel of the company or of a parent of the company; or
2.
An entity is related to a company if
any of the following conditions applies:
a.
The entity is a
related party under Section 2(76) of the Companies Act, 2013; or
b.
The entity and the
company are members of the same group (which means that each parent, subsidiary
and fellow subsidiary is related to the others); or
c.
One entity is an
associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member); or
d.
Both entities are joint ventures of the
same third party; or
e.
One entity is a
joint venture of a third entity and the other entity is an associate of the
third entity; or
f.
The entity is a
post-employment benefit plan for the benefit of employees of either the company
or an entity related to the company. If the company is itself such a plan, the
sponsoring employers are also related to the company; or
g.
The entity is controlled or jointly
controlled by a person identified in (1).
h.
A person
identified in (1)(b) has significant influence over the entity (or of a parent
of the entity); or
Explanation: For the purpose of Clause 49(V) and
Clause VII(B), the term “control” shall have the same meaning as defined
in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
C.
The company shall
formulate a policy on materiality of related party transactions and also on
dealing with Related Party Transactions.
Provided that 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 five
percent of the annual turnover or twenty percent of the net worth of the
company as per the last audited financial statements of the company, whichever
is higher.
D.
All Related Party Transactions shall
require prior approval of the Audit Committee.
E.
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.
VIII. Disclosures
A.
Related Party Transactions
1.
Details of all
material transactions with related parties shall be disclosed quarterly along
with the compliance report on corporate governance.
2.
The company shall
disclose the policy on dealing with Related Party Transactions on its website
and also in the Annual Report.
B.
Disclosure of Accounting Treatment
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 management’s
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.
C.
Remuneration of Directors
1.
All pecuniary
relationship or transactions of the non-executive directors vis-à-vis the
company shall be disclosed in the Annual Report.
2.
In addition to the
disclosures required under the Companies Act, 2013, the following disclosures
on the remuneration of directors shall be made in the section on the corporate
governance of the Annual Report:
a.
All elements of
remuneration package of individual directors summarized under major groups,
such as salary, benefits, bonuses, stock options, pension etc.
b.
Details of fixed
component and performance linked incentives, along with the performance
criteria.
c.
Service contracts, notice period,
severance fees.
d.
Stock option
details, if any - and whether issued at a discount as well as the period over
which accrued and over which exercisable.
3.
The company shall
publish its criteria of making payments to non-executive directors in its
annual report. Alternatively, this may be put up on the company’s website and
reference drawn thereto in the annual report.
4.
The company shall
disclose the number of shares and convertible instruments held by non-executive
directors in the annual report.
5.
Non-executive
directors shall be required to disclose their shareholding (both own or held by
/ for other persons on a beneficial basis) in the listed company in which they
are proposed to be appointed as directors, prior to their appointment. These
details should be disclosed in the notice to the general meeting called for
appointment of such director
D.
Management
1.
As part of the
directors’ report or as an addition thereto, a Management Discussion and
Analysis report should form part of the Annual Report to the shareholders. This
Management Discussion & Analysis should include discussion on the following
matters within the limits set by the company’s competitive position:
a.
Industry structure and developments.
b.
Opportunities and Threats.
c.
Segment–wise or product-wise
performance.
d.
Outlook
e.
Risks and concerns.
f.
Internal control
systems and their adequacy.
g.
Discussion on
financial performance with respect to operational performance.
h.
Material
developments in Human Resources / Industrial Relations front, including number
of people employed.
2.
Senior management
shall make disclosures to the board relating to all material financial and
commercial transactions, where they have personal interest, that may have a
potential conflict with the interest of the company at large (for e.g. dealing
in company shares, commercial dealings with bodies, which have shareholding of
management and their relatives etc.)
Explanation: For this purpose, the term "senior
management" shall mean personnel of the company who are members of
its core management team excluding the Board of Directors). This would also
include all members of management one level below the executive directors
including all functional heads.
3.
The Code of
Conduct for the Board of Directors and the senior management shall be disclosed
on the website of the company.
E.
Shareholders
1.
In case of the
appointment of a new director or re-appointment of a director the shareholders
must be provided with the following information:
a.
A brief resume of the director;
b.
Nature of his
expertise in specific functional areas;
c.
Names of companies
in which the person also holds the directorship and the membership of
Committees of the Board; and
d.
Shareholding of
non-executive directors as stated in Clause 49 (IV) (E) (v) above
2.
Disclosure of
relationships between directors inter-se shall be made in the Annual Report,
notice of appointment of a director, prospectus and letter of offer for
issuances and any related filings made to the stock exchanges where the company
is listed.
3.
Quarterly results
and presentations made by the company to analysts shall be put on company’s
web-site, or shall be sent in such a form so as to enable the stock exchange on
which the company is listed to put it on its own web-site.
4.
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 the company including complaints related to transfer of
shares, non-receipt of balance sheet, non-receipt of declared dividends.
5.
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.
F.
Disclosure of resignation of directors
1.
The company shall
disclose the letter of resignation along with the detailed reasons of
resignation provided by the director of the company on its website not later
than one working day from the date of receipt of the letter of resignation.
2.
The company shall
also forward a copy of the letter of resignation along with the detailed
reasons of resignation to the stock exchanges not later than one working day
from the date of receipt of resignation for dissemination through its website.
G.
Disclosure of formal letter of
appointment
1.
The letter of
appointment of the independent director along with the detailed profile shall
be disclosed on the websites of the company and the Stock Exchanges not later
than one working day from the date of such appointment.
H.
Disclosures in Annual report
1.
The details of
training imparted to Independent Directors shall be disclosed in the Annual
Report.
2.
The details of
establishment of vigil mechanism shall be disclosed by the company on its
website and in the Board’s report.
3.
The company shall
disclose the remuneration policy and the evaluation criteria in its Annual
Report.
I.
Proceeds from public issues, rights
issue, preferential issues, etc.
When
money is raised through an issue (public issues, rights issues, preferential
issues etc.), the company shall disclose the uses / applications of funds by
major category (capital expenditure, sales and marketing, working capital,
etc), on a quarterly basis as a part of their quarterly declaration of
financial results to the Audit Committee. Further, on an annual basis, the
company shall prepare a statement of funds utilized for purposes other than
those stated in the offer document / prospectus / notice and place it before
the audit committee. Such disclosure shall be made only till such time that the
full money raised through the issue has been fully spent. This statement shall
be certified by the statutory auditors of the company. Furthermore, where the
company has appointed a monitoring agency to monitor the utilisation of
proceeds of a public or rights issue, it shall place before the Audit Committee
the monitoring report of such agency, upon receipt, without any delay. The
audit committee shall make appropriate recommendations to the Board to take up
steps in this matter.
IX. CEO/CFO certification
The
CEO, i.e. the Managing Director or Manager appointed in terms of the Companies
Act, 1956 and the CFO i.e. the whole-time Finance Director or any other person
heading the finance function discharging that function shall certify to the
Board that:
A.
They have reviewed
financial statements and the cash flow statement for the year and that to the
best of their knowledge and belief :
1.
these statements
do not contain any materially untrue statement or omit any material fact or
contain statements that might be misleading;
2.
these statements
together present a true and fair view of the company’s affairs and are in
compliance with existing accounting standards, applicable laws and regulations.
B.
There are, to the
best of their knowledge and belief, no transactions entered into by the company
during the year which are fraudulent, illegal or violative of the company’s
code of conduct.
C.
They accept
responsibility for establishing and maintaining internal controls for financial
reporting and that they have evaluated the effectiveness of internal control
systems of the company pertaining to financial reporting and they have
disclosed to the auditors and the Audit Committee, deficiencies in the design
or operation of such internal controls, if any, of which they are aware and the
steps they have taken or propose to take to rectify these deficiencies.
D.
They have indicated to the auditors and
the Audit committee:
1.
significant changes in internal control
over financial reporting during the year;
2.
significant
changes in accounting policies during the year and that the same have been
disclosed in the notes to the financial statements; and
3.
instances of
significant fraud of which they have become aware and the involvement therein,
if any, of the management or an employee having a significant role in the
company’s internal control system over financial reporting.
X.
Report on Corporate Governance
A.
There shall be a
separate section on Corporate Governance in the Annual Reports of company, with
a detailed compliance report on Corporate Governance. 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. The suggested list of items to be included in this report is given
in Annexure - XII to the Listing Agreement and list of non-mandatory
requirements is given in Annexure - XIII to the Listing Agreement.
B.
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 in Annexure - XI to
the Listing Agreement. The report shall be signed either by the Compliance
Officer or the Chief Executive Officer of the company.
XI. Compliance
A.
The company shall
obtain a certificate from either the auditors or practicing company secretaries
regarding compliance of conditions of corporate governance as stipulated in
this clause and annex the certificate with the directors’ report, which is sent
annually to all the shareholders of the company. The same certificate shall
also be sent to the Stock Exchanges along with the annual report filed by the
company.
B.
The non-mandatory
requirements given in Annexure - XIII to the Listing Agreement may
be implemented as per the discretion of the company. However, the
disclosures of the compliance with mandatory requirements and adoption (and
compliance) / non-adoption of the non-mandatory requirements shall be made in
the section on corporate governance of the Annual Report.
Annexure
- X to the Listing Agreement
Information to be placed before Board of Directors
1.
Annual operating plans and budgets and
any updates.
2.
Capital budgets and any updates.
3.
Quarterly results for the company and
its operating divisions or business segments.
4.
Minutes of meetings of audit committee
and other committees of the board.
5.
The information on
recruitment and remuneration of senior officers just below the board level,
including appointment or removal of Chief Financial Officer and the Company
Secretary.
6.
Show cause,
demand, prosecution notices and penalty notices which are materially important.
7.
Fatal or serious
accidents, dangerous occurrences, any material effluent or pollution problems.
8.
Any material
default in financial obligations to and by the company, or substantial
nonpayment for goods sold by the company.
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.
10.
Details of any joint venture or
collaboration agreement.
11. Transactions that involve substantial payment towards goodwill, brand
equity, or intellectual property.
12.
Significant labour
problems and their proposed solutions. Any significant development in Human
Resources/ Industrial Relations front like signing of wage agreement,
implementation of Voluntary Retirement Scheme etc.
13.
Sale of material
nature, of investments, subsidiaries, assets, which is not in normal course of
business.
14.
Quarterly details
of foreign exchange exposures and the steps taken by management to limit the
risks of adverse exchange rate movement, if material.
15.
Non-compliance of
any regulatory, statutory or listing requirements and shareholders service such
as non-payment of dividend, delay in share transfer etc.
Annexure
- XI to the Listing Agreement
Format
of Quarterly Compliance Report on Corporate Governance
Name
of the Company:
Quarter
ending on:
|
Particulars
|
|
|
Clause of
|
Compliance
|
Remarks
|
||
|
|
|
|
|
Listing
|
Status
|
|
|
|
|
|
|
|
agreement
|
Yes/No
|
|
|
|
II. Board of Directors
|
|
49
|
(II)
|
|
|
||
|
|
|
|
|
|
|||
|
(A) Composition of Board
|
49
|
(IIA)
|
|
|
|||
|
(B) Independent Directors
|
49
|
(IIB)
|
|
|
|||
|
(C)
|
Non-executive
|
Directors’
|
49
|
(IIC)
|
|
|
|
|
compensation & disclosures
|
|
|
|
|
|||
|
(D) Other provisions as to Board and
|
49
|
(IID)
|
|
|
|||
|
Committees
|
|
|
|
|
|
|
|
|
(E) Code of Conduct
|
|
49
|
(IIE)
|
|
|
||
|
(F) Whistle Blower Policy
|
49
|
(IIF)
|
|
|
|||
|
III. Audit Committee
|
|
49
|
(III)
|
|
|
||
|
|
|
|
|
|
|||
|
(A) Qualified &
Independent Audit
|
49
|
(IIIA)
|
|
|
|||
|
Committee
|
|
|
|
|
|
|
|
|
(B) Meeting of Audit Committee
|
49
|
(IIIB)
|
|
|
|||
|
(C) Powers of Audit Committee
|
49
|
(IIIC)
|
|
|
|||
|
(D) Role of Audit Committee
|
49
|
(IIID)
|
|
|
|||
|
(E) Review of
Information by Audit
|
49
|
(IIIE)
|
|
|
|||
|
Committee
|
|
|
|
|
|
|
|
|
IV.
Nomination
|
and
|
Remuneration
|
49
|
(IV)
|
|
|
|
|
Committee
|
|
|
|
|
|
|
|
|
V. Subsidiary Companies
|
49
|
(V)
|
|
|
|||
|
|
|
|
|
|
|
||
|
VI. Risk Management
|
|
49
|
(VI)
|
|
|
||
|
|
|
|
|
|
|||
|
VII. Related Party Transactions
|
49
|
(VII)
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
VIII. Disclosures
|
|
|
49
|
(VIII)
|
|
|
|
|
|
|
|
|
|
|||
|
(A) Related party transactions
|
49
|
(VIIIA)
|
|
|
|||
|
(B)
|
Disclosure
|
of
|
Accounting
|
49
|
(VIIIB)
|
|
|
|
Treatment
|
|
|
|
|
|
|
|
|
(C) Remuneration of Directors
|
49
|
(VIII C)
|
|
|
|||
|
(D) Management
|
|
|
49
|
(VIII D)
|
|
|
|
|
(E) Shareholders
|
|
|
49
|
(VIII E)
|
|
|
|
|
(F) Disclosure of
resignation of
|
49
|
(VIII F)
|
|
|
|||
|
directors
|
|
|
|
|
|
|
|
|
(G) Disclosure of
formal letter of
|
49
|
(VIII G)
|
|
|
|||
|
appointment
|
|
|
|
|
|
|
|
|
(H) Disclosures in the Annual report
|
49
|
(VIII H)
|
|
|
|||
|
(I) Proceeds from public issues, rights
|
49
|
(VIII I)
|
|
|
|||
|
Particulars
|
Clause of
|
Compliance
|
Remarks
|
|
|
|
Listing
|
Status
|
|
|
|
|
agreement
|
Yes/No
|
|
|
|
issue, preferential issues, etc
|
|
|
|
|
|
IX. CEO/CFO Certification
|
49
|
(IX)
|
|
|
|
|
|
|
|
|
|
X. Report on Corporate Governance
|
49
|
(X)
|
|
|
|
|
|
|
|
|
|
XI. Compliance
|
49
|
(XI)
|
|
|
|
|
|
|
|
|
Note:
1.
The details under
each head shall be provided to incorporate all the information required as per
the provisions of the Clause 49 of the Listing Agreement.
2.
In the column No.
3, compliance or non-compliance may be indicated by Yes/No/N.A.. For example,
if the Board has been composed in accordance with the Clause 49 I of the
Listing Agreement, "Yes" may be indicated. Similarly, in case the
company has no related party transactions, the words “N.A.” may be indicated
against 49(VII).
3.
In the remarks
column, reasons for non-compliance may be indicated, for example, in case of
requirement related to circulation of information to the shareholders, which
would be done only in the AGM/EGM, it might be indicated in the
"Remarks" column as – “will be complied with at the AGM”. Similarly,
in respect of matters which can be complied with only where the situation
arises, for example, "Report on Corporate Governance" is to be a part
of Annual Report only, the words "will be complied in the next Annual Report"
may be indicated.
Annexure
- XII to the Listing Agreement
Suggested List of
Items to Be Included In the Report on Corporate Governance in the Annual Report
of Companies
1.
A brief statement on company’s
philosophy on code of governance.
2.
Board of Directors:
a.
Composition and
category of directors, for example, promoter, executive, nonexecutive,
independent non-executive, nominee director, which institution represented as
lender or as equity investor.
b.
Attendance of each director at the
Board meetings and the last AGM.
c.
Number of other
Boards or Board Committees in which he/she is a member or Chairperson.
d.
Number of Board meetings held, dates on
which held.
3.
Audit Committee:
i.
Brief description of terms of reference
ii.
Composition, name of members and
Chairperson
iii.
Meetings and attendance during the year
4.
Nomination and Remuneration Committee:
i.
Brief description of terms of reference
ii.
Composition, name of members and
Chairperson
iii.
Attendance during the year
iv.
Remuneration policy
v.
Details of remuneration to all the
directors, as per format in main report.
5.
Stakeholders' Grievance Committee:
i.
Name of non-executive director heading
the committee
ii.
Name and designation of compliance
officer
iii.
Number of shareholders’ complaints
received so far
iv.
Number not solved to the satisfaction
of shareholders
v.
Number of pending complaints
6.
General Body meetings:
i.
Location and time, where last three
AGMs held.
ii.
Whether any special resolutions passed
in the previous 3 AGMs
iii.
Whether any
special resolution passed last year through postal ballot – details of voting
pattern
iv.
Person who conducted the postal ballot
exercise
v.
Whether any special resolution is
proposed to be conducted through postal ballot
vi.
Procedure for postal ballot
7.
Disclosures:
i.
Disclosures on
materially significant related party transactions that may have potential
conflict with the interests of company at large.
ii.
Details of
non-compliance by the company, penalties, strictures imposed on the company by
Stock Exchange or SEBI or any statutory authority, on any matter related to
capital markets, during the last three years.
iii.
Whistle Blower
policy and affirmation that no personnel has been denied access to the audit
committee.
iv.
Details of
compliance with mandatory requirements and adoption of the non-mandatory
requirements of this clause
8.
Means of communication:
i.
Quarterly results
ii.
Newspapers wherein results normally
published
iii.
Any website, where displayed
iv.
Whether it also displays official news
releases; and
v.
The presentations made to institutional
investors or to the analysts.
9.
General Shareholder information:
i.
AGM: Date, time and venue
ii.
Financial year
iii.
Date of Book closure
iv.
Dividend Payment Date
v.
Listing on Stock Exchanges
vi.
Stock Code
vii.
Market Price Data: High., Low during
each month in last financial year
viii.
Performance in
comparison to broad-based indices such as BSE Sensex, CRISIL index etc.
ix.
Registrar and Transfer Agents
x.
Share Transfer System
xi.
Distribution of shareholding
xii.
Dematerialization
of shares and liquidity
xiii.
Outstanding
GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity
xiv.
Plant Locations
xv.
Address for correspondence
Annexure
- XIII to the Listing Agreement
Non-Mandatory Requirements
1.
The Board
The
Board - A non-executive Chairman may be entitled to maintain a Chairman's
office at the company's expense and also allowed reimbursement of expenses
incurred in performance of his duties.
2.
Shareholder Rights
A half-yearly declaration of financial performance including summary of
the significant events in last six-months, may be sent to each household of
shareholders.
3.
Audit qualifications
Company may move
towards a regime of unqualified financial statements.
4.
Separate posts of Chairman and CEO
The company may appoint separate persons to the post of Chairman and
Managing Director/CEO.
5.
Reporting of Internal Auditor
The Internal
auditor may report directly to the Audit Committee.