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Compliance Applicable On Listed Companies

HomeSecurities lawCompliance Applicable On Listed Companies
  • listed company compliance
19
Jun
Compliance Applicable On Listed Companies

 482 total views

There are various laws and regulations applicable on any company registered in India.  Reporting has to be done on monthly, quarterly, half yearly and yearly basis to various regulators and government departments.

A company is primarily governed by the Companies Act, 2013 and rules made thereunder. The companies whose shares are listed on a recognized stock exchange in India are required to follow regulations issued by Securities Exchange Board of India (SEBI). A listed company has to make necessary disclosure and reporting as required under Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. Following is the list containing all the compliance applicable on a listed company as per the aforementioned Regulations:

S. No Regulation Time Limit Compliance
  Regulation 7(3) Compliance certificate certifying maintaining physical & electronics transfer facility     Within one month from end of each half of the financial year. Every listed entity shall submit a  compliance certificate to stock exchange  signed by both  by compliance officer of the listed entity and the authorized representative of the share transfer agent within one month from end of each half of the financial year,  certifying physical and electronic transfer facility either in house or RTA, as applicable.
  Regulation 13(3) Statement of Investors Complaints within 21 days from the end of the each quarter  Every listed entity shall file with the recognized stock exchange on quarterly basis, within twenty one days from the end of each quarter, a statement giving the number of investor complaints pending at the beginning of the quarter, those received during the quarter, disposed of during the quarter and those remaining unresolved at the end of the quarter.
3 Regulation 27 (2)  Corporate Governance Within 15 days from end of quarter The listed entity shall submit a quarterly compliance report on corporate governance within fifteen days from close of the quarter.   Further, it is not applicable, in respect of : (a) the listed entity having paid up equity share capital not exceeding INR 10 Crore and net worth not exceeding INR 25 Crore, as on the last day of the previous financial year.   Provided that where the provisions of the regulations specified in this regulation become applicable to a listed entity at a later date, such listed entity shall comply with the requirements those regulations within six months from the date on which the provisions became applicable to the listed entity.   (b) the listed entity which has listed its specified securities on the SME Exchange.


4 Regulation 31, shareholding pattern Within 21 days from the end of the quarter (1) The listed entity shall submit to the stock exchange or exchanges a statement showing holding of securities and shareholding pattern separately for each class of securities, in the format specified by the Board from time to time within the following timelines: a) One day prior to listing of its securities on the stock exchange(s);   b) On a quarterly basis, within twenty one days from the end of each quarter;   c) Within ten days of any capital restructuring of the listed entity resulting in a  change exceeding two per cent of the total paid-up share capital:   Provided that in case of listed entities which have listed their specified securities on SME Exchange, the above statements shall be submitted on a half-yearly basis within twenty-one days from the end of each half year.  

 
5 Regulation 33 Financials Results Within 45 days from quarter end. And in case of Annual Financial Result, within 60 days from end of Financial Year. The listed entity shall submit quarterly and year-to-date standalone financial results to the stock exchange within forty-five days of the end of each quarter, (other than last quarter) along with Limited Review Report or Audit Report as applicable. The listed entity shall submit Annual Audited standalone Financial results for the financial year, within sixty days from the end of the financial year along with the audit report and either with Statement on Impact of Audit Qualifications (applicable for audit report with modified opinion(s)) or declaration (applicable for audit reports with unmodified opinion(s) ). Provided that if the listed entity has subsidiaries, it shall, while submitting annual audited standalone financial results also submit annual audited consolidated financial results along with the audit report and Statement on Impact of Audit Qualifications (applicable for audit report with modified opinion). Provided further that, in case of audit reports with unmodified opinion(s), the listed entity shall furnish a declaration to that effect to the Stock Exchange(s) along with the annual audited financial results.  

 
6 Regulation 34 Annual Report Within 21 working days of it being approved and adopted in the annual general meeting. The listed entity shall submit the annual report to the stock exchange within twenty-one working days of it being approved and adopted in the annual general meeting as per the provisions of the Companies Act, 2013.   In case of top 500 listed entities based on market capitalization (calculated as on March 31 of every financial year), Business responsibility report is required to include in Annual Report is compulsory as per prescribed Format. However, in case of other than top 500 listed companies based on market capitalization and listed entities which have listed their specified securities on SME Exchange, may include these Business responsibility reports on a voluntary basis.
Further as per Regulation 43A. the top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) shall formulate a dividend distribution policy which shall be required to disclose in their annual reports and on their websites. However the listed entities other than top five hundred listed entities based on market capitalization may disclose their dividend distribution policies on a voluntary basis in their annual reports and on their websites

7 Regulation 40 (9)  Certificate from Practicing Company Secretary. Within 1 month of the end of each half of the financial year. The listed entity shall ensure that the share transfer agent and/or the in-house share transfer facility, as the case may be, produces a certificate from a practicing company secretary within one month of the end of each half of the financial year, certifying that all certificates have been issued within thirty days of the date of lodgment for transfer, sub-division, consolidation, renewal, exchange or endorsement of calls/allotment monies.    
8 Regulation-55A Reconciliation of Share Capital Audit. Within 30 days from quarter end. Listed entities are required to submit Reconciliation of Share Capital Audit Report on a quarterly basis to the stock exchanges audited by a qualified chartered accountant or a practising company secretary for the purpose of reconciliation of share capital held in depositories and in physical form with the issued/listed capital.  

The Reconciliation of Share Capital Audit Report is required to be submitted to the Stock Exchange within 30 days from the end of the Quarter under regulation 55A of the SEBI (Depositories and Participants) Regulations, 1996.
9 Regulation-7 Appointment of New Share Transfer Agent. within 7 days of entering into the agreement. In case of any change or appointment of a new share transfer agent, the listed entity shall enter into a tripartite agreement between the existing share transfer agent, the new share transfer agent and the listed entity, in the manner as specified by the Board from time to time. The listed entity shall intimate such appointment, to the stock exchange(s) within seven days of entering into the agreement.
10 Regulation 14 Listing Fees & Other charges.   The listed entity shall pay all such fees or charges, as applicable, to the recognized Stock Exchange(s), in the manner specified by the Board or the recognized Stock Exchange(s).
11 Regulation 29   Notice for Board Meeting to consider the prescribed matters. Advance notice of at least 5 days (excluding the date of the intimation and date of the meeting) for considering financial results viz. quarterly, half yearly, or annual, as the case may be;   For other matters at least 2 working days in advance (excluding the date of the intimation and date of the meeting).   At least 11 working days in advance in case matter related to alteration in securities or date of interest or redemption of debenture or bond as per regulation 29(3) (a), (b). The Company shall give advance notice of at least 5 days for Financial Result as per regulation 29 1 (a) (excluding the date of the intimation and date of the meeting).  

In case of other matters as stated in regulation 29 1 (b) to (f) – 2 Working days in advance (Excluding the date of the intimation and date of the meeting) to Stock Exchange.  
The Company shall give advance notice of 11 working days in case matter related to alteration in i) Securities; ii) date of interest or redemption of Debenture/bond as per regulation 29(3) (a), (b).
12 Regulation 30 Disclosure of Price-Sensitive Information. Within 24 hrs from occurrence of event or information. The Company has to intimate to the Stock Exchange about the material events which will have a bearing on the performance/operations of the company as well as price sensitive information both at the time of occurrence of the event and subsequently after the cessation of the event. The listed entity shall first disclose to stock exchange(s) of all events, as specified in Part A of Schedule III, or information as soon as reasonably possible and not later than twenty-four hours from the occurrence of event or information.
13 Regulation 30 Outcome of Board Meeting Within 30 minutes of closure of board meeting. The listed entity shall disclose the information to the Exchange(s), within 30 minutes of the closure of the meeting.
14 Regulation 42 Notice for Record Date/Corporate Action Advance notice of at least 7 working days The Company must ensure that there is a gap of at least 30 days between 2 book closure and/or record date. The Company shall give an advance notice of at least 7 working days (Excluding the date of the intimation and record date/book closure start date) to the Stock Exchange for corporate actions (Book closure/Record date) fixed for the purpose of corporate benefits like mergers, de-mergers, split , bonus, dividend, rights etc. The listed entity shall recommend or declare all dividend and/or cash bonuses at least five working days (excluding the date of intimation and the record date) before the record date fixed for the purpose.
15 Regulation 43 Declaration of Dividend   The Company has to declare and disclose the dividend on per share basis only.
16 Regulation 43 A Dividend Distribution Policy.   The top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) shall formulate a dividend distribution policy which shall be disclosed in their annual reports and on their websites. The dividend distribution policy shall include the following parameters:   (a) The circumstances under which the shareholders of the listed entities may or may not expect dividend;   (b) The financial parameters that shall be considered while declaring dividend;   (c) Internal and external factors that shall be considered for declaration of dividend;   (d) Policy as to how the retained earnings shall be utilized; and   (e) Parameters that shall be adopted with regard to various classes of shares:   Provided that if the listed entity proposes to declare dividend on the basis of parameters in addition to clauses (a) to (e) or proposes to change such additional parameters or the dividend distribution policy contained in any of the parameters, it shall disclose such changes along with the rationale for the same in its annual report and on its website.   The listed entities other than top five hundred listed entities based on market capitalization may disclose their dividend distribution policies on a voluntary basis in their annual reports and on their websites.

17 Regulation 44 Voting Result   The listed entity shall submit to the stock exchange, within forty-eight hours of the conclusion of its General Meeting, details regarding the voting results in the format specified by the Board.
18 Regulation 46 Company Website   The listed entity shall maintain a functional website containing the basic information about the listed entity. The listed entity shall disseminate the information as stated in Regulation 46 (2). The listed entity shall ensure that the contents of the website are correct & the listed entity shall update any change in the content of its website within two working days from the date of such change in content.

Above are the compliance required to be done by the listed entities on a regular basis. Compliance with the (Listing Obligations and Disclosure Requirements) Regulations, 2015 is very important. Any non-compliance may lead to penal actions against the company by the stock exchanges in addition to the liability of action under securities law. These include:

  1. Imposition of fines
  2. Suspension of trading
  3. Freezing of promoter / promoter group holding of designated securities. as may be applicable,
    in coordination with depositories

At Knovalt, we help listing entities in making complying with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. We have a team of specialized and experienced professionals who can help you and your company in complying with these regulations.


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