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CLAUSE 49 OF THE LISTING AGREEMENT

CORPORATE GOVERNANCE
Comparison between the provisions of Old Clause 49 of the Listing Agreement and the
provisions of the said Clause after considering the amendments which are effective
from 01.10.2014 and Circular dated 15th September, 2014 issued by SEBI
Sl. No.
Applicability
of Clause 49

New Clause 49 Applicable from 1/10/2014


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

Old Clause 49
No such provision

i) companies having paid up equity capital/ net worth


not exceeding Rs. 10/ Rs. 25 crores as on last day
of previous financial year. However on applicability
the same shall be complied with six moths from its
applicability
ii)

1.

2.

companies whose equity shares are listed


exclusively on SME and SME-ITP platforms.
I.
Shareholders
A. Rights of Shareholders
The company should seek to protect and facilitate the
exercise of shareholders rights.
i) The Right to participate in, and to be sufficiently
informed on, decisions concerning fundamental
corporate changes
ii) The opportunity to participate effectively and vote in
general shareholder meetings.
iii) Should be informed of the rules, including voting
procedures.
iv) 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.
v) Effective shareholder participation in key Corporate
Governance, decisions should be facilitated.
vi) The exercise of ownership rights by all shareholders,
including institutional investors, should be facilitated.
vii) Company should have an adequate mechanism to
address the grievances of the shareholders
viii)Minority shareholders should be protected from
abusive actions, either directly or indirectly, and
should have effective means of redress.
The company should provide adequate and timely
information to shareholders.
i) Shareholders should be furnished with sufficient
and timely information, as well as full information
regarding the issues to be discussed at the meeting.
ii) Capital structures and arrangements that enable
certain shareholders to obtain a degree of control
disproportionate to their equity ownership should be
disclosed.
iii) All investors should be able to obtain information
about the rights attached to all series and classes
of shares before they purchase.

No such provision

No such provision

4.

5.

The company should ensure equitable treatment of


all shareholders, including minority and foreign
shareholders.
i) Shareholders of the same series of a class should be
treated equally.
ii) Effective shareholder participation in key Corporate
Governance decisions.
iii) Exercise of voting rights by foreign shareholders
should be facilitated.
iv) Company should devise a framework to avoid
Insider trading and abusive self-dealing.
v) Processes and procedures should allow for equitable
treatment of all shareholders.
vi) Company procedures should not make it unduly
difficult or expensive to cast votes.

No such provision

B. Role of stakeholders in Corporate Governance


The company should recognize the
rights of
No such provision
stakeholders and encourage co- operation between
company and the stakeholders.
i) Rights that are established by law or through
mutual agreements are to be respected.
ii) Stakeholders should have the opportunity to obtain
effective redress for violation of their rights.
iii) Company should
encourage
mechanisms
for
employee participation.
iv) Stakeholders should have access to relevant,
sufficient and reliable information on a timely and
regular basis.
v) Company Should Devise an Effective Whistle Blower
Mechanism.
C. Disclosure and Transparency
The company should ensure timely and accurate
disclosure on all material matters including the
financial situation, performance, ownership, and
governance of the company
i) Information should be prepared and disclosed in
accordance with the prescribed
standards of
accounting, financial and non-financial disclosure
ii) Channels for disseminating information should
provide for equal, timely and cost efficient access to
relevant information by users.
iii) The company should maintain minutes of the
meeting explicitly recording dissenting opinions, if
any.
iv) The company should implement the prescribed
accounting standards in letter and spirit in the
preparation of financial statements, and should also
ensure that the annual audit is conducted by an
independent, competent and qualified auditor.

No such provision

S.No

New Clause 49 applicable from 1/10/2014


D. Responsibilities of the Board

Old Clause 49

6.

Disclosure of Information
i) Members of the Board and key executives
should disclose to the board whether they,
directly, indirectly or on behalf of third parties,
have a material interest in any transaction or
matter directly affecting the company.
ii) The Board and top management should meet
the expectations of operational transparency to
stakeholders while at the same time maintaining
confidentiality of information.

No such provision

7.

Key functions of the Board

No such provision

i) 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.
ii) Selecting, compensating, monitoring and, when
necessary, replacing key executives and
overseeing succession planning.
iii) Aligning
key
executive
and
board
remuneration with the longer term interests
of the company and its shareholders.
iv) Ensuring a transparent board nomination
process with the diversity of thought,
experience, knowledge, perspective and gender
in the Board.
v) Monitoring and managing potential conflicts of
interest of management, board members and
shareholders, including misuse of corporate
assets and abuse in related party transactions.
vi) Ensuring the integrity of the companys
accounting and financial reporting systems,
including the independent audit,
vii) Overseeing the process of disclosure and
communications,
viii)
Monitoring and reviewing Board Evaluation
framework

S.No
8.

New Clause 49 applicable from 1/10/2014


Other responsibilities
i) 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.
ii) The Board should set a corporate culture
and
the
values
by
which executives
throughout a group will behave.
iii) 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.
iv) The Board should encourage continuing
directors training to ensure that the Board
members are kept up to date.
v) Where Board decisions may affect different
shareholder groups differently, the Board
should treat all shareholders fairly.
vi) The Board should apply high ethical standards
and should be able to exercise objective
independent judgment on corporate affairs.
vii) The Board should be able to exercise objective
independent judgment on corporate affairs.
viii)
Boards
should
consider
assigning
a
sufficient number of non-executive Board
members capable of exercising independent
judgment to tasks where there is a potential for
conflict of interest.
ix) 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 recognized or
exposes the company to excessive risk.
x) 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.
xi) When committees of the board are established,
their mandate, composition and working
procedures should be well defined and disclosed
by the board.
xii) Board members should be able to commit
themselves effectively to their responsibilities.
xiii)
In order to fulfill their responsibilities, board
members should have access to accurate,
relevant and timely information.
xiv)
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.

Old Clause 49
No such provision

S.No
1.

2.

II. Board of Directors


A. Composition of Board
New Clause 49 applicable from 1/10/2014 Old Clause 49
The Board of Directors of the company shall The Board of directors of the company
have an optimum combination of executive and shall have an optimum combination of
non-executive directors with at least 1 woman executive and non-executive directors
director and not less than 50% of the Board of with not less than fifty percent of the
Directors comprising non-executive directors.
board of directors comprising of nonexecutive directors.
Appointment of Women Director shall be
applicable w.e.f. April 1, 2015.
Where the Chairman of the Board is:
Same
(i) Non-Executive, a minimum of 1/3rd of the
Board should comprise of Independent
Directors
(ii) Executive, a minimum of of the Board
should comprise of Independent Directors
(iii) In case Non-executive Chairman is the
promoter of the Company, at least 1/2 of
the Board to be independent
(iv) Minimum age of independent Directors
shall be 21 years.
(v) An independent director who resigns or is
removed from the Board of the Company
shall be replaced by a new independent
director within a period of not more than
180 days from the day of such resignation
or removal, as the case may be.

B. Independent Directors
3.

Definition: As compared to Section 149 of the Companies Act, 2013 (Attached as per
Annexure I)

4.

Limit on number of directorships


i) A person shall not serve as an independent
director in more than seven listed
companies.
ii) 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.
New Clause 49 applicable from 1/10/2014

No such provision.

Maximum tenure of Independent Directors

No such provision

S.No
5.

i)

shall be in accordance with the


Companies
Act,
2013
and
Clarifications/circulars issued by the
Ministry of Corporate Affair, in this Regard
from time to time.

Old Clause 49

6.

Formal letter of appointment to Independent


Directors
i)

7.

The company shall issue a formal letter of


appointment to independent directors in
the manner as provided in the Companies
Act, 2013.

ii) The terms and conditions of Appointment


shall be disclosed on the website of the
Company.
Performance
evaluation
of
Independent
Directors
i)

No such provision

No such provision

The Nomination Committee shall lay down


the evaluation criteria for performance
evaluation of independent directors.

ii) Evaluation criteria as laid down by the


Nomination Committee, shall be disclosed in
its Annual Report.
iii) The performance evaluation of independent
directors shall be done by the entire Board
of Directors (excluding the director being
evaluated).

8.

iv) 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.
Separate
meetings
of
the
Independent
Directors

No such provision

i) All independent directors of the company


shall hold at least one meeting in a year,
without the attendance of non-independent
directors and members of management in
order to review the performance of the
Chairman, Non Independent Directors and
the Board, etc. . All Independent Directors
shall strive to be present at such meeting.
9.

Familiarization programme for Independent


Directors
i) The Company shall familiarize the
Independent directors with the company,
their roles, rights, responsibilities in the
company, nature of the industry in which
the company operates, business model of
the
company
etc.,
through
various
programmes.

No such provision

ii) The details of such familiarization


programmes shall be disclosed on the
companys website and a web link thereto
shall also be given in the Annual report.
C. Non-Executive Directors Compensation and Disclosure
10.

11.

12.

All fees / compensation, if any paid to nonSame


executive directors, including independent
directors, shall be fixed by the Board of
Directors and shall require previous approval of
shareholders in general meeting.
D. Meeting of Board of Directors
The Board shall meet at least four times a year, The board shall meet at least four
with a maximum time gap of 120 days between times a year, with a maximum time
any two meetings
gap of 4 months between any two
meetings.
List of items is specified which must be placed
Same
before the Board in every meeting.
(As per Annexure- II)
(As per Annexure-II)
E. Other Membership of Directors

13.

A Director shall not be a member of more than


10 committees*

Same

14.

A Director shall not act as Chairman of more


than 5 committees*

Same

15.

Every director shall inform the company about


the committee positions he occupies in other
companies and notify changes as
and when they take place.

Annual requirement for every director


to inform the company about the
committee positions he occupies in
other companies and notify changes
as and when they take place.

* It applies to the Committees of only public limited companies whether listed or not.
* For the purpose of reckoning the aforesaid limit only Audit Committee and Shareholders
Grievance Committee shall be considered.
16.

17.

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.
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 03 months
from the date of such vacancy, whichever is
later.

Same

An independent director who resigns


or is removed from the Board of the
Company shall be replaced by a new
independent director within a period
of 180 days from the date of such
resignation.

18.

19.
20.

21.

22.

F. Code of Conduct
The Board shall lay down a code of conduct
for
all
Board
members
and
senior
management of the company
This Code of Conduct shall be posted on the
website of the Company
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.
The Code of Conduct shall suitably incorporate
the duties of Independent Directors as laid
down in
the Companies Act, 2013.
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.

Same

Same
Same

No such provision

No such provision

G. Whistle blower Policy


23

i) The company shall establish a vigil


mechanism for directors and employees to
report concerns about unethical behavior,
actual or suspected fraud or violation of
the companys code of conduct or ethics
policy.
ii) 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

The Whistle Blower Policy as a


mechanism for employees to report to
the management concerns about
unethical
behavior,
actual
or
suspected fraud or violation of the
companys code of conduct or ethics
policy was not mandatory.

iii) The details of establishment of such


mechanism shall be disclosed by the
company on its website and in the Boards
report.
III. Audit Committee
A. Constitution & Independence of Audit Committee
1.
2.

3.

Audit Committee shall have minimum three


Directors as members
2/3rd of the members shall be Independent
Directors.
B. Members Qualification

Same

All members of the Audit Committee shall be


financially literate

Same

Same

4.

5.
6.

At least 01 member shall have accounting or


related financial management expertise

Same

C. Chairman of the Audit Committee


Chairman of the Audit Committee shall be an
Independent Director
Chairman shall be present at AGM to answer
shareholders queries

Same
Same

D. Meeting of Audit Committee


7.
8.

9.

10.

Audit Committee should meet at least four


times in a year
Not more than four months shall elapse
between two meetings
E. Quorum
Quorum shall be either two members or 1/3rd
of the members, whichever is greater

Same

A minimum of two Independent


should be present at every meeting

Same

Same

Same

directors

F. Role & Powers of the Audit Committee


11.

The role of Audit Committee shall include but


not restricted to: (briefly)
Oversight of companys financial reporting
process
Ensuring the credibility, sufficiency and
correctness of financial information
Recommending to Board appointment,
removal, etc. of statutory auditors and
fixation of audit fees, and payment for other
services.
Reviewing
with
management,
quarterly/annual financial statements etc.
before submission to the Board for approval
Reviewing
Internal
control
structure
including the Internal Audit function in all
aspects
Scrutiny of inter corporate loans and
investments
Valuation of undertakings or assets of the
company
Evaluation of internal financial controls and
risk management systems

Same

No such Provision
No such Provision
No such provision

12.

13.

The powers of Audit Committee includes:


(briefly)
Investigating any activity within its terms of
reference
Seeking information from any employee
Obtaining outside legal or other professional
advice
Securing attendance of outsiders with
relevant expertise, if it considers necessary

Same

G. Review of Information by Audit Committee


Following information shall mandatorily be
reviewed by Audit Committee (briefly)
Same
Management Discussion & Analysis of
financial conditions and results of operations
Statement of significant Related Party
Transactions
Management
letters/letters
of
internal
control weaknesses issued by the Statutory
Auditors
Internal Audit Reports
Appointment,
removal
and
terms
of
remuneration of the Chief Internal Auditor
H. Miscellaneous provisions

S.No
14.

15.

16.

New Clause 49 applicable from 1/10/2014


Old Clause 49
Audit Committee may invite such of the
Same
executives as it considers appropriate to be
present at its meetings including the Finance
Director, Head of Internal Audit & a
representative of the Statutory Auditor
Company Secretary shall act as the Secretary to
Same
the Committee
I.
Nomination And Remuneration Committee
The company t h r o u g h
its Board
of
No such provision
D i r e c t o r s 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.
Provided that the chairperson of the company
(whether executive or non-executive) may be
appointed as a member of the nomination and
remuneration committee but shall not chair
such committee.

IV. Subsidiary Company


A. Applicability
1.

Subsidiary shall be considered as material


if the investment of the company in the
subsidiary exceeds 20% of its consolidated
net worth / 20% of the consolidated
income as per the audited balance sheet
of the previous financial year.

Material non-listed Subsidiary means


where Turnover/net-worth (Paid-up capital
+ Free reserves) of the subsidiary exceeds
20% of the consolidated turnover/networth respectively of listed holding
company and its subsidiaries in the
immediately preceding accounting year

B. Other provisions
2.

At least one independent director on the


Board of Directors of the holding company
shall be a director on the Board of
Directors of a material non-listed Indian
subsidiary company.
Audit Committee of the listed holding
company shall also review the financial
statements, in particular, the investments
made by the unlisted subsidiary company

Same

4.

Minutes of the Board meeting of the


unlisted subsidiary company shall be
placed at the Board meeting of the listed
holding company

Same

5.

The management should periodically bring


to the attention of the Board of Directors
of the listed holding company, a statement
of all significant transactions* and
arrangements entered into by the unlisted
subsidiary company.

Same

3.

Same

S.No
6.

New Clause 49 applicable from 1/10/2014


Old Clause 49
The company shall formulate a policy for
No such provision
determining material subsidiaries and such policy
shall be disclosed on the companys website and a
web link thereto shall be provided in the Annual
report.
7.
No company shall dispose of shares in its material
No such provision
subsidiary which would reduce its shareholding
(either on its own or together with other
subsidiaries) to less than 50% or cease the exercise
of control over the subsidiary without passing a
special resolution in its General Meeting except in
cases where such divestment is made under a
scheme of Arrangement duly approved by a
Court/Tribunal.
8
Selling, disposing and leasing of assets amounting
No such provision
to more than twenty percent of the assets of the
material subsidiary on an aggregate basis during a
financial year
shall require prior approval of
shareholders by way of Special Resolution, unless
the sale/disposal/lease is made under a scheme of
Arrangement duly approved by a Court/Tribunal.
Significant transaction or arrangement shall mean any individual transaction or
arrangement that exceeds/likely to exceed 10% of the total revenues/expenses or total
assets/liabilities of material unlisted subsidiary company in the immediately preceding
accounting year.
The term material non listed Indian subsidiary shall mean an unlisted subsidiary,
incorporated in India, whose income or net worth (i.e. paid up capital and free reserves)
exceeds twenty percent { 20% } of the consolidated income or net worth respectively, of the
listed holding company and its subsidiaries in the immediately preceding accounting year

V. Risk Management
1

i)

ii)
iii)

The company through its Board of


Directors
shall
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.
The majority of committee shall consist
of members of the board of Directors.
Senior Executives of the company may
be members of the said Committee but
the chairman of the committee shall be a
member of the Board of Directors.

No such provision

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 lay down


procedures
to
inform
Board
members
about
the
risk
assessment
and
minimization
procedures. These procedures
shall be periodically reviewed to
ensure
that
executive
management
controls
risk
through means of a properly
defined framework.

VI. Disclosures
A. Related Party Transactions
1.

Definition of Related Party ;


For the purpose of Clause 49 (VII), an entity shall
be considered as related to
the company if:
(i) such entity is a related party under Section
2(76) of the Companies Act, 2013; or
(ii) such entity is a related party under the
applicable accounting standards."
All Related Party Transactions shall require prior
approval of the Audit Committee. However, the
Audit Committee may grant omnibus approval for
Related Party Transactions proposal to be entered
into by the company subject to the following
conditions
a. The Audit Committee shall lay down the criteria
for granting the omnibus approval in line with the
policy on Related Party Transactions of the
company and such approval shall be applicable in
respect of transactions which are repetitive in
nature.
b. The Audit Committee shall satisfy itself the need
for such omnibus approval and that such approval
is in the interest of the company;
c. Such omnibus approval shall specify (i) the
name/s of the related party,
nature of transaction, period of transaction,
maximum amount of transaction that can be
entered into,
(ii) the indicative base price / current contracted
price and the formula for variation in the price if
any and
(iii) such other conditions as the Audit Committee
may deem fit;
Provided that where the need for Related Party
Transaction cannot be foreseen and aforesaid
details are not available, Audit Committee may
grant omnibus approval for such transactions

(i) A statement in summary form


of
transactions
with
related
parties in the ordinary course of
business
shall
be
placed
periodically before the audit
committee.
(ii) Details of material individual
transactions with related parties,
which are not in the normal
course of business, shall be
placed
before
the
audit
committee.
(iii) Details of material individual
transactions with related parties
or others, which are not on an
arms length basis should be
placed
before
the
audit
committee, together with
Managements justification for the
same.

subject to their value not exceeding Rs.1 crore per


transaction.
d. Audit Committee shall review, at least on a
quarterly basis, the details of RPTs entered into by
the company pursuant to each of the omnibus
approval given.
e. Such omnibus approvals shall be valid for a
period not exceeding one year and shall require
fresh approvals after the expiry of one year"
2.

All material Related Party Transactions shall require


approval of the shareholders through special
resolution and the related parties shall abstain from
voting on such resolutions.

No such provision

Provided that 1 & 2 shall not be applicable in the


following cases:
i)

Transactions entered into between two


government companies;
ii)
transactions entered into between a
holding company and its wholly owned
subsidiary
whose
accounts
are
consolidated
with
such holding
company
and
placed
before
the
shareholders at the general meeting for
approval
All entities falling under the definition of related
parties shall abstain from voting irrespective of
whether the entity is a party to the particular
transaction or not.

(A transaction with a related party shall be


considered
MATERIAL
if
the
transaction
/
transactions to be entered into individually or taken
together with previous transactions during a
financial year, exceeds ten percent {10%} of the
annual consolidated turnover of the company as per
the last audited financial statements of the
company)
Details of all material transactions with related
parties shall be disclosed quarterly along with the
compliance report on corporate governance

No such provision

4.

5.

6.

The company shall disclose the policy on dealing


with Related Party Transactions on its website and
a web link thereto shall be provided in the Annual
report.

No such provision

The company shall formulate a Policy on materiality


of related party transactions and also dealing with
related party transactions.
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 managements explanation as to
why it believes such alternative treatment is more
representative of the true and fair view of the
underlying business transaction in the Corporate
Governance Report.
C. Proceeds from Public Issue, etc
Where money is raised through an issue (public,
rights, preferential, etc) then it shall disclose to the
Audit Committee :-

Same

7.

8.

uses/applications of funds in major categories


on a quarterly basis as a part of quarterly
declaration of financial results
and on annual basis in a statement form of
funds utilized for purposes other than those
stated in the prospectus/offer document (till
such time that the full money so raised has
been fully spent) (statement to be certified by
the Statutory Auditors of the company
D. Remuneration of Directors
Annual Report of the Company shall contain : pecuniary relationship/ transactions of the nonexecutive directors vis--vis the company
all elements of remuneration package of
individual directors
details of fixed components & performance
linked incentives, service contracts, notice
period, stock option details, etc
criteria of making payments to non-executive
directors
number of shares & convertible instruments
held by non-executive directors
Non-executive directors must
disclose their
shareholding in the listed company in which they
are proposed to be appointed as director. These
details must also be disclosed in the notice of
general meeting called for such appointment.

Same

Same

Same

9.
10.

E. Management
Management Discussion & Analysis Report should
form part of the Annual Report of the Company
Senior Management* to disclose to the Board:
all
material
financial
&
commercial
transactions
where they have personal interests
that may have potential conflict with the
interest of the company

Same
Same

* Senior management shall exclude the Board of Directors but includes the personnel of the
company who are members of its core management team and all members of management one
level below the executive directors including all functional heads.

F. Shareholders
11.

12.

13.

14.

1.

In case of the appointment/re-appointment of a


new director following information is to be provided
to the shareholders:
brief resume of the director
nature of his expertise
other directorships
shareholdings (in case of non-executive
directors)
Quarterly results and presentations made by the
company to analysts shall be put on
companys web-site, or shall be sent in such a form
so as to enable the stock exchange on which the
company is listed to put it on its own web-site.

Same

Same

A committee under the Chairmanship of a non- A board committee under the


executive director and such other members as may chairmanship of a non-executive
be decided by the Board of the company shall be director shall be formed to
formed to specifically look into the redressal of specifically look into the redressal
grievances of shareholders, debenture holders and of shareholder and investors
other security holders. This
complaints like transfer of shares,
Committee shall be designated as Stakeholders non-receipt of balance sheet,
Relationship Committee and shall consider and non-receipt of declared dividends
resolve the grievances of the security holders of the etc. This Committee Shall be
company including complaints related to transfer of designated
as
shares, non-receipt of balance sheet, non-receipt of Shareholders/Investors
declared dividends.
Grievance Committee.
To expedite the process of share transfers, the
Same
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.
VII. CEO/CFO Certification
CEO or the managing Director or manager or in
their absence, a whole time Director appointed in

Same

terms of Companies Act, 2013 and the CFO shall


certify to Board:- (briefly)
a) There is no material untrue statement in
financial statements.
b) True and fair view of affairs and compliance
with Accounting Standards/applicable laws are
presented in financial statements.
c) No transactions are fraudulent/illegal/violate
Code of Conduct.
d) Accept responsibility for internal control for
financial reporting.
e) Indicate
to
Auditors/Audit
Committee
significant charges in internal control /
accounting policies, instances of significant
fraud involving management/employee etc.
VIII. Report on Corporate Governance
1.

2.

3.

1.

2.

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 companies shall submit a quarterly compliance
report to the stock exchanges within 15 days from
the close of quarter as per the format given. The
report shall be signed either by the Compliance
Officer or the Chief Executive Officer of the
company.
IX. Compliance
The Company shall obtain a certificate from
The Auditors or
Practicing Company Secretary
regarding compliance of conditions of Corporate
Governance.
The aforesaid certificate is to be annexed with the
Directors Report which is sent annually to all the
shareholders and Stock Exchanges

Same

Same

Same

Same

Annexure - I
Comparison of Definitions of Independent Directors under Clause 49 of Listing
Agreement and Section 149 of Companies Act 2013 and
new Clause 49 of Listing
Agreement
SNO

SECTION 149 OF
COMPANIES
ACT
2013
An
independent
director in relation to
a company means a
director other than a
managing director or a
whole-time director or
a nominee director.

S
N
O
1

Old
CLAUSE
49
OF
LISTING AGREEMENT

Who, in the opinion of


the Board, is a person
of
integrity
and
possesses
relevant
expertise
and
experience.

No such provision.

Who, in the opinion of the


Board, is a person of
integrity
and
possesses
relevant
expertise
and
experience;

No such provision.

The Board of directors of


the company shall have an
optimum combination of
executive
and
nonexecutive directors with not
less than fifty percent of
the board of directors
comprising
of
nonexecutive directors

The Board of Directors of


the company shall have an
optimum combination of
executive
and
nonexecutive directors with at
least one woman director
and not less than fifty
percent of the Board of
Directors comprising nonexecutive directors

This
concept
of
number
of
Independent
Directors, linking with
Chairman,
not
present.

Where the Chairman of the


Board is a non-executive
director, at least one-third
of
the
Board
should
comprise of independent
directors and in case he is
an executive director, at
least half of the Board
should
comprise
of
independent directors.

Where the Chairman of


the Board is a nonexecutive director, at least
one-third of the Board
should
comprise
independent directors and
in case the company does
not have a regular nonexecutive Chairman, at
least half of the Board
should
comprise
independent directors.

Although, in terms of
Section 149(4) of the
Companies
Act,
2013{Act}
every
listed public company
shall
have
atleast
one-third of the total
number of Directors
as
Independent
Directors
on
the
Board (fractions to be
rounded off as 1).
Following classes of
Companies,
shall
have
atleast
two
Independent Directors
{ in terms of the rules

An independent director
shall mean a non-executive
director of the company.

Provided that where the


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

NEW CLAUSE 49 OF
LISTING AGREEMENT
WEF 1-10-2014
Independent director shall
mean
a non-executive director,
other than a nominee
director of the company:

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

notified}:1. Public Companies


having
paid
up
share capital of Rs.
10 Crore or more;
or
2. Public Companies
having turnover of
Rs. 100 Crore /- or
more; or
3. Public Companies
which
have,
in
aggregate
outstanding loans
or borrowings or
debentures
or
deposits exceeding
Rs. 50 Crore or
more

purpose of the expression


related to any promoter
referred to in sub-section
(ii):
a.) 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;
b.) If the promoter is an
unlisted entity, its directors,
its
employees
or
its
nominees shall be deemed
to be related to it.

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.

Who is or was not a


promoter
of
the
company
or
its
holding, subsidiary or
associate company;

No such provision except,


the
provision
of
nonexecutive Chairman being
promoter of the company
and consequently at least
half
of
Board
to
be
independent

Who is or was not a


promoter of the company
or its holding, subsidiary
or associate company;

Who is not related to


promoters or directors
in the company, its
holding, subsidiary or
associate company;

He is not related to
promoters
or
persons
occupying
management
positions at the board level
or at one level below the
board;

Who is not related to


promoters or directors in
the company, its holding,
subsidiary
or
associate
company;

Who 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;

Apart
from
receiving
directors
remuneration,
does not have any material
pecuniary relationships or
transactions
with
the
company, its promoters, its
directors,
its
senior
management or its holding
company, its subsidiaries
and associates which may
affect independence of the
director

Apart
from
receiving
director's
remuneration,
has or had no Material
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;

None
of
whose
relatives has or had
pecuniary relationship
or transaction with the
company, its holding,
subsidiary or associate
company,
or
their

No such provision.

None of whose relatives


has or had pecuniary
relationship or transaction
with the company, its
holding,
subsidiary
or
associate
company,
or
their
promoters,
or

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;
Who, neither himself
nor any of his relatives
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.

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;

He has not been an who, neither himself nor


executive of the company any of his relatives
in
the
immediately
preceding three financial ( holds or has held the
years;
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;

SNO

SECTION 149 OF
COMPANIES
ACT
2013

SN
O

Old CLAUSE 49 OF
LISTING AGREEMENT

NEW CLAUSE 49 OF
LISTING AGREEMENT
WEF 1-10-2014

10

Who, neither himself 10


nor any of his relatives
is or has been an
employee
or
proprietor
or
a
partner, in any of the
three financial years i.
immediately preceding ii.
the financial year in iii.
which he is proposed iv.
to be appointed, of
v.
(A) a firm of
auditors or company
secretaries in practice
or cost auditors of the vi.
company
or
its vii.
holding, subsidiary or viii.
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;
No such provision.
11

He is not a partner or an
executive or was not
partner or an executive
during the preceding three
years, of any of the
following:

Who, neither himself nor


any of his relatives 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

1} the statutory audit firm


or the internal audit firm
that is associated with the
company, and

(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;

11

12

13

Who, neither himself


nor any of his relatives
holds together with his
relatives two per cent.
or more of the total
voting power of the
company.
No such provision.

2} the legal firm(s) and


consulting
firm(s)
that
have
a
material
association
with
the
company.

He is not a material
supplier, service provider
or customer or a lessor or
lessee of the company,
which
may
affect
independence
of
the
director;

Who, neither himself nor


any of his relatives is a
material supplier, service
provider or customer or a
lessor or lessee of the
company

12

He is not a substantial
shareholder
of
the
company i.e. owning two
percent or more of the
block of voting shares.

Who, neither himself nor


any of his relatives holds
together with his relatives
two per cent or more of
the total voting power of
the company;

13

He is not less than 21


years of age

He is not less than 21


years of age

SN
O
14

SECTION
149
OF
COMPANIES
ACT
2013
No such provision.

SN
O
14

Old
CLAUSE
49
OF
LISTING AGREEMENT

NEW CLAUSE 49 OF
LISTING AGREEMENT
WEF 1-10-2014
Explanation
Explanation
a. Associate shall mean ai.
i. Associate" shall
company which is an
mean
a
company
associate as defined in
which
is
an
Accounting
Standard
associate as defined
(AS) 23, Accounting for
in
Accounting
Investments
in
Standard (AS) 23,
Associates
in
Accounting
for
Consolidated
Financial
Investments
in
Statements, issued by
Associates
in
the
Institute
of
Consolidated
Chartered
Accountants
Financial
of India.
Statements,
issued
by the Institute of
Chartered
b. Senior management
Accountants of India.
shall mean personnel
of the company who
are members of its
ii.
Key Managerial
core
management
Personnel" shall mean
team excluding Board
Key
Managerial
of Directors. Normally,
Personnel as defined in
this would comprise all
section 2(51) of the
members
of
Companies Act, 2013.
management one level
below the executive
directors, including all
functional heads.
c. Relative shall mean
relative as defined in
section
2(41)
and
section 6 read with
Schedule IA of the
Companies Act, 1956.
d. Nominee
directors
iii.
Relative shall
appointed
by
an
mean
relative
as
institution which has
defined in section 2(77)
invested in or lent to
of the Companies Act,
the company shall be
2013
and
rules
deemed
to
be
prescribed there under.
independent directors.
Explanation:
Institution
for
this
purpose means a public
financial
institution
as
defined in Section 4A of
the Companies Act, 1956
or a corresponding new
bank as defined in section
2(d)
of
the
Banking
Companies
(Acquisition
and
Transfer
of
Undertakings) Act, 1970 or
the Banking Companies
(Acquisition and Transfer of
Undertakings) Act, 1980
[both Acts].

SN
O
15

16

SECTION
149
OF
COMPANIES
ACT
2013
Who, neither himself
nor any of his relatives
is a Chief Executive or
director, by whatever
name called, of any
non-profit organisation
that receives twentyfive 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; or

SN
O

Old
CLAUSE
49
OF
LISTING AGREEMENT

15

No such provision.

Who possesses such


other qualifications as
may be prescribed.

16

No such provision.

NEW CLAUSE 49 OF
LISTING AGREEMENT
WEF 1-10-2014
Who, neither himself nor
any of his relatives is a
Chief
Executive
or
director, by whatever
name called, of any nonprofit 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;
No such provision

Annexure-II
CORPORATE GOVERNANCE
(Compliance report in respect of the minimum information to be placed before the Board
in terms of Clause 49 of the Listing Agreement)
Sl.
No.
1
2
3
4
5

6
7
8

10
11
12

13
14

15

New Clause 49
Old Clause 49
Applicable from 1/10/2014
Information to be placed before the Board
Annual operating plans and budgets and any updates.
Same
Capital budgets and any updates.
Same
Quarterly results for the Company and its operating
Same
divisions or business segments.
Minutes of meetings of Audit Committee and other
Same
Committees of the Board.
The information on recruitment and remuneration of
Same
senior officers just below the board level, including
appointment or removal of Chief Financial Officer and
the Company Secretary.
Show cause, demand, prosecution notices and penalty
Same
notices, which are materially important.
Fatal or serious accidents, dangerous occurrences, any
Same
material effluent or pollution problems.
Any material default in financial obligations to and by
Same
the company, or substantial nonpayment for goods
sold by the company.
Any issue, which involves possible public or product
Same
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.
Details of any joint venture or collaboration agreement.
Same
Transactions that involve substantial payment towards
Same
goodwill, brand equity, or intellectual property.
Significant labour problems and their proposed
Same
solutions. Any significant development in Human
Resources/ Industrial Relations front like signing of
wage
agreement,
implementation
of
Voluntary
Retirement Scheme etc.
Sale of material nature, of investments, subsidiaries,
Same
assets, which is not in normal course of business.
Quarterly details of foreign exchange exposures and
Same
the steps taken by management to limit the risks of
adverse exchange rate movement, if material.
Non-compliance of any regulatory, statutory or listing
Same
requirements and shareholders service such as nonpayment of dividend, delay in share transfer etc.

Annexure-III
SUGGESTED LIST OF ITEMS TO BE INCLUDED IN THE REPORT ON CORPORATE
GOVERNANCE IN THE ANNUAL REPORT OF COMPANIES
Sl.
No.
1
2

New Clause 49
Applicable from 1/10/2014
A brief statement on companys philosophy on
code of governance.
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.
Audit Committee:
a. Brief description of terms of reference
b. Composition, name of members and
Chairperson
c. Meetings and attendance during the year
Nomination and Remuneration Committee:
a. Brief description of terms of reference
b. Composition, name of members and
Chairperson
c. Attendance during the year
d. Remuneration policy
e. Details of remuneration to all the directors,
as per format in main report.

Stakeholders' Grievance Committee:


a. Name of non-executive director heading the
committee
b. Name and designation of compliance officer
c. Number
of
shareholders
complaints
received so far
d. Number not solved to the satisfaction of
shareholders
e. Number of pending complaints

General Body meetings:


a. Location and time, where last three AGMs
held.
b. Whether any special resolutions passed in
the previous 3 AGMs
c. Whether any special resolution passed last
year through postal ballot details of
voting pattern
d. Person who conducted the postal ballot
exercise
e. Whether any special resolution is proposed

Old Clause 49
No Change
No Change

No Change

Remuneration Committee:
a. Brief
description
of
terms
of
reference
b. Composition, name of members and
Chairperson
c. Attendance during the year
d. Remuneration policy
e. Details of remuneration to all the
directors, as per format in main
report.
Shareholders Committee:
a. Name of non-executive director
heading the committee
b. Name
and
designation
of
compliance officer
c. Number
of
shareholders
complaints received so far
d. Number
not
solved
to
the
satisfaction of shareholders
e. Number of pending complaints
No change

Sl.
No.
7

to be conducted through postal ballot


f. Procedure for postal ballot
New Clause 49
Applicable from 1/10/2014

Old Clause 49

Disclosures:
a. Disclosures
on
materially
significant
related party transactions that may have
potential conflict with the interests of
company at large.
b. 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.
c. Whistle Blower policy and affirmation that
no personnel has been denied access to
the audit committee.
d. Details of compliance with mandatory
requirements and adoption of the nonmandatory requirements of this clause
Means of communication:
a. Quarterly results
b. Newspapers wherein results normally
published
c. Any website, where displayed
d. Whether it also displays official news
releases; and
e. The presentations made to institutional
investors or to the
General Shareholder information:
a. AGM: Date, time and venue
b. Financial year
c. Date of Book closure
d. Dividend Payment Date
e. Listing on Stock Exchanges
f. Stock Code
g. Market Price Data: High., Low during each
month in last financial year
h. Performance in comparison to broadbased indices such as BSE Sensex, CRISIL
index etc.
i. Registrar and Transfer Agents
j. Share Transfer System
k. Distribution of shareholding
l. Dematerialization of shares and liquidity
m. Outstanding GDRs/ADRs/Warrants or any
Convertible instruments, conversion date
and likely impact on equity
n. Plant Locations
o. Address for correspondence

No Change

No Change

No Change

Sl.
No.
1

NON-MANDATORY REQUIREMENTS
New Clause 49
Old Clause 49
Applicable from 1/10/2014
The Board
The Board
The Board - A non-executive Chairman may A non-executive Chairman may be entitled
be entitled to maintain a Chairman's office to maintain a Chairmans office at the
at the company's expense and also allowed companys expense and also allowed
reimbursement of expenses incurred in reimbursement of expenses incurred in
performance of his duties.
performance of his duties. Independent
Directors may have a tenure not
exceeding, in the aggregate, a period of
nine years, on the Board of a company.
The company may ensure that the person
who is being appointed as an independent
director has the requisite qualifications
and experience which would be of use to
the company and which, in the opinion of
the company, would enable him to
contribute effectively to the company in
his capacity as an independent director.
No such provision
Remuneration Committee
i.

ii.

iii.
iv.

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.

The
board
may
set
up
a
remuneration
committee
to
determine on their behalf and on
behalf of the shareholders with
agreed terms of reference, the
companys
policy
on
specific
remuneration
packages
for
executive
directors
including
pension
rights
and
any
compensation payment.
To avoid conflicts of interest, the
remuneration committee, which
would determine the remuneration
packages of the executive directors
may comprise of at least three
directors, all of whom should be
non-executive
directors,
the
Chairman of committee being an
independent director.
All
the
members
of
the
remuneration committee could be
present at the meeting.
The Chairman of the remuneration
committee could be present at the
Annual General Meeting, to answer
the shareholder queries. However,
it would be up to the Chairman to
decide who should answer the
queries.
No Change

Sl.
No.
5

Audit qualifications
Company may move towards a regime of
unqualified financial statements.
New Clause 49
Applicable from 1/10/2014
No such provision

No such provision

No such provision

Separate posts of Chairman and CEO


The company may appoint separate persons
to the post of Chairman and Managing
Director/CEO.
Reporting of Internal Auditor
The Internal auditor may report directly to
the Audit Committee.
The company will mandatorily comply with
all the Accounting Standards issued by
Institute of
Chartered Accountants of India (ICAI) from
time to time.

10

No Change

Old Clause 49
Training of Board Members
A company may train its Board members
in the business model of the company as
well as the risk profile of the business
parameters
of
the
company,
their
responsibilities as directors, and the best
ways to discharge them.
Mechanism for evaluating nonexecutive Board Members
The performance evaluation of nonexecutive directors could be done by a
peer group comprising the entire Board of
Directors, excluding the director being
evaluated; and Peer Group evaluation
could be the mechanism to determine
whether to extend /continue the terms of
appointment of non-executive directors.
Whistle Blower Policy
The company may establish a mechanism
for
employees
to
report
to
the
management concerns about unethical
behaviour, actual or suspected fraud or
violation of the companys code of conduct
or ethics policy. This mechanism could
also provide for adequate safeguards
against victimization of employees who
avail of the mechanism and also provide
for direct access to the Chairman of the
Audit committee in exceptional cases.
Once established, the existence of the
mechanism
may
be
appropriately
communicated within the organization.
No such provision

No such provision

No Change

Sl.
No.
11

12

New Clause 49
Applicable from 1/10/2014
Corporate Filing and Dissemination
System
(CFDS),
viz.,
www.corpfiling.co.in
(1) The company agrees (a) to file on the CDFS, such information,
statements and reports as may be specified
by the Participating Stock Exchanges in this
regard.
(b) that the Compliance Officer, appointed
under clause 47(a) and the company shall
be responsible for ensuring the correctness,
authenticity and comprehensiveness of the
information, statements and reports filed
under this clause and also for ensuring that
such information is in conformity with the
applicable laws and the listing agreement.
(c) to ensure that the electronic filing of
information through CFDS, pursuant to
compliance with any clause of the listing
agreement, shall be done within the time
limit specified in the respective clause of the
listing agreement.
(d) to put in place such infrastructure as
may be required to comply with the clause.
Explanation: For the purposes of this clause

(i) The term Corporate Filing and


Dissemination System (CFDS) shall mean
the portal at the URL www.corpfiling.co.in or
such other website as may be specified by
the participating stock exchanges from time
to time to take care of exigencies, if any.
(ii)
The
term
Participating
Stock
Exchanges shall mean the stock exchanges
owning and maintaining CFDS.
The company agrees to notify the stock
exchange and also disseminate through its
own website, immediately upon entering
into agreements with media companies
and/or their associates, the following
information:a. Disclosures regarding the shareholding (if
any) of such media companies/associates in
the company.
b. Any other disclosures related to such
agreements, viz., details of nominee of the
media companies on the Board of the
company, any management control or
potential conflict of interest arising out of
such agreements, etc.
c. Disclosures regarding any other back to
back treaties/contracts/agreements/MoUs or
similar instruments entered into by the
company with media companies and/or their
associates for the purpose of advertising,
publicity, etc.

Old Clause 49
No Change

No Change

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13

14

New Clause 49
Applicable from 1/10/2014
The issuer company agrees to maintain a
functional
website
containing
basic
information about the company e.g. details
of its business, financial information,
shareholding pattern,
compliance with
corporate governance, contact information
of the designated officials of the company
who are responsible for assisting and
handling investor grievances, details of
agreements entered into with the media
companies and/or their associates, etc. The
company also agrees to ensure that the
contents of the said website are updated at
any given point of time.
Listed entities shall submit, as part of their
Annual Reports, Business Responsibility
Reports, describing the initiatives taken by
them from an environmental, social and
governance perspective, in the format
suggested as under.

Date:- 17th October 2014

Old Clause 49
No Change

No Change