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SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, prescribes various policies, procedures, programmes etc. that listed entities are required to adopt in compliance with the provisions of the regulation.

The following are the various Policies, procedures etc. which is prescribed under the new listing regulation:

1) Regulation 9: Policy for preservation of documents.

 Regulation 9 provides that listed entity shall have a policy for preservation of documents.

The policy shall be approved by the Board of Directors of the Company.

The policy shall classify documents into 2 categories:

  1. documents whose preservation shall be permanent in nature ;
  2. documents with preservation period of not less than eight years after completion of the relevant transactions.

That means the policy shall contain provisions to classify documents that shall be preserved atleast for a minimum period of 8 years after the completion of relevant transaction.

Provided that the listed entity may keep documents specified in (1) and (2) in electronic mode.

2) Regulation 16(1)(c): Policy for determining 'Material Subsidiary'.

Regulation 16(1)(c) defines material subsidiary as "a subsidiary, whose income or net worth exceeds twenty percent (20%) of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year."

The listed entity shall formulate a policy for determining Material Subsidiary.

The policy for determining material subsidiaries shall be disclosed on the website of the Company.

3) Regulation 17 (5): Code of Conduct.

Like the erstwhile Listing Agreement, Regulation 17(5) of the LODR, 2015 contains provisions for formulation of Code of Conduct for all members of the Board and Senior Management of the Company.

The board of directors shall lay down a code of conduct for all members of board of directors and senior management of the listed entity.

The code of conduct shall suitably incorporate the duties of independent directors as laid down in the Companies Act, 2013.

“senior management” shall mean officers/personnel of the listed entity who are members of its core management team excluding board of directors and normally this shall comprise all members of management one level below the executive directors, including all functional heads.

All members of the Board and Senior Management Personel shall affirm compliance with the code of conduct on an annual basis.

Code of Conduct of the Company shall be disclosed on the website of the Company.

4) Regulation 17(9): Risk assessment and minimization procedures.

Like the erstwhile Listing Agreement, Regulation 17(9) of the LODR, 2015 contains provisions that listed entity shall lay down procedures to inform members of board of directors about risk assessment and minimization procedures.

The board of directors shall be responsible for framing, implementing and monitoring the risk management plan for the listed entity.

5) Regulation 22: Vigil mechanism.

Like the erstwhile Listing Agreement, Regulation 22 of the LODR, 2015 contains provisions that the listed entity shall formulate a vigil mechanism for directors and employees to report genuine concerns.

The vigil mechanism shall provide for adequate safeguards against victimization of director(s) or employee(s) or any other person who avail the mechanism and also provide for direct access to the chairperson of the audit committee in appropriate or exceptional cases.

The details of establishment of vigil mechanism or whistle blower policy shall be disclosed on the website of the Company.

6) Regulation 23: Policy on materiality of Related Party Transactions.

The listed entity shall formulate a policy on materiality of related party transactions and on dealing with related party transactions.

Definition of Material Related Party Transaction: A transaction with a related party shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity.

All related party transactions shall require prior approval of the audit committee. However, the Audit committee may grant omnibus approval for related party transactions
proposed to be entered into by the listed entity subject to some conditions.

All material related party transactions shall require approval of the shareholders through resolution and the related parties shall abstain from voting on such resolutions whether the entity is a related party to the particular transaction or not.

The policy on delaing with related party transactions shall be disclosed on the website of the Company.

7) Regulation 25(7): Familiarization programme of Independent Directors.

The listed entity shall familiarise the independent directors through various programmes about the listed entity, including the following:

a) nature of the industry in which the listed entity operates;
b) business model of the listed entity;
c) roles, rights, responsibilities of independent directors; and
d) any other relevant information.

The details of familiarization programmes imparted to independent directors shall include the following:-

a) number of programmes attended by independent directors (during the year and on a cumulative basis till date),
b) number of hours spent by independent directors in such programmes (during the year and on cumulative basis till date), and
c) other relevant details

The details of familiarization programmes imparted to independent directors including the shall be disseminated on the website of the Company.

8) Regulation 30(4)(iii): Policy for determination of materiality of the disclosure of events and information.

Every listed entity shall make disclosures of any events or information which, in the opinion of the board of directors of the listed company, is material.

The listed entity shall frame a policy for determination of materiality, based on criteria specified in sub-regulation 4 (i), duly approved by its board of directors.

The Policy shall be disclosed on the website of the Company.

The board of directors of the listed entity shall authorize one or more Key Managerial Personnel for the purpose of determining materiality of an event or information and for the purpose of making disclosures to stock exchange(s) under this regulation and the contact details of such personnel shall be also disclosed to the stock exchange(s) and as well as on the listed entity's website.

The listed entity shall disclose all events or information with respect to subsidiaries which are material for the listed entity.

The listed entity shall provide specific and adequate reply to all queries raised by stock exchange(s) with respect to any events or information: Provided that the stock exchange(s) shall disseminate information and clarification as soon as reasonably practicable.

9) Regulation 30(8): Archival Policy (For minimum period of 5 years).

The listed entity shall disclose on its website all such events or information which has been disclosed to stock exchange(s) under Regulation 30 , and such disclosures shall be hosted on the website of the listed entity for a minimum period of five years (5 Years) and thereafter as per the archival policy of the listed entity, as disclosed on its website.

Disclaimer: Statements expressed in this article are those of the author’s personal views and interpretation of law. However, every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information.”

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