Compliance Requirements under the Regulations

1. Compliance of Regulation 15(1A), 16 to 27 by HVDL entities (Regulation 15(1A))

High-value debt-listed (HVDL) entities are required to comply with Regulations 16 to 27 mandatorily with effect from April 1, 2025. High-value debt-listed entity is one which has listed its non-convertible debt securities and has an outstanding value of listed non-convertible debt securities of Rupees One Thousand Crore and above.

Where the value of the outstanding listed non-convertible debt securities becomes equal to or greater than the specified threshold of Rupees One Thousand Crore during the course of the year, a high value debt listed entity shall ensure compliance with these provisions within six months from the date of such trigger, and the disclosures of such compliance may be made in the corporate governance compliance report on and from the third quarter following the date of the trigger.

In case a ‘high value debt listed entity’ has its specified securities listed, it shall comply with the provisions of regulation 15 to regulation 27 of these regulations.

2. Maximum number of Directorships (Regulation 17A)

A person shall be a director/independent director in not more than seven listed entities

1) Where a person is serving as a whole time director / managing  director  in  any  listed  entity, he shall  serve  as  an  independent  director  in  not more than three listed entities.

2) For the purpose of counting the number of listed entities on which a person is a director / independent director, all entities whose equity shares are listed on a stock exchange and high value debt listed entities shall be considered

3) Directorship(s) held by a person on an ex-officio basis due to statute or applicable contractual framework in case of public sector undertakings and entities set up under a public private partnership arrangement shall not be included in calculating the maximum number of directorships

4) Provisions relating to HVDLE shall come into effect after 6 months from date of publication of SEBI LODR Amendment Regulations 2025 in Official Gazette(viz 27.09.25) or AGM date which ever is later.

3. Directors and Officers insurance (Regulation 25(10) (12))

The top 1000 listed entities & high value debt listed entity by market capitalization, shall undertake Directors and Officers insurance (‘D and O insurance’) for all their independent directors of such quantum and for such risks as may be determined by its board of directors.

4. Fees/compensation paid to NED to be approved by shareholders in GM of HVDLE (Regulation 62D (11)(a)-(e))

The board of directors of HVDLE shall recommend all fees or compensation, if any, paid to non-executive directors, including independent directors and shall require approval of shareholders in general meeting.

Requirement of obtaining approval of shareholders in general meeting shall not apply to payment of sitting fees to non-executive directors, if made within limits prescribed under Companies Act, 2013 for payment of sitting fees without approval of CG.

Approval of shareholders shall specify the limits for the maximum number of stock options that may be granted to non-executive directors, in any financial year and in aggregate.

Approval of shareholders by special resolution shall be obtained every year, in which the annual remuneration payable to a single non-executive director exceeds fifty per cent of the total annual remuneration payable to all non-executive directors, giving details of the remuneration thereof.

Independent directors shall not be entitled to any stock option.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

5. Fees/compensation paid to Executive Directors (Promoter/Promoter Group) of HVDLE (Regulation 62D (12))

The fees or compensation payable to executive directors who are promoters or members of the promoter group of HVDLE, shall be subject to the approval of the shareholders by special resolution in general meeting if certain conditions are met.

Conditions:

(i) the annual remuneration payable to such executive director exceeds rupees 5 crore or 2.5 per cent of the net profits of the listed entity, whichever is higher; or

(ii) where there is more than one such director, the aggregate annual remuneration to such directors exceeds 5 per cent of the net profits of the HVDLE.

The approval of the shareholders under this provision shall be valid only till the expiry of the term of such director.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

6. Code of Conduct for Board and Senior Management by HVDLE (Regulation 62D (10))

The board of directors shall lay down a code of conduct suitably incorporating the duties of independent directors as laid down in the Companies Act, 2013 for all members of board of directors and senior management of the HVDLE.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

7. Corporate Governance: Minimum information to be placed before the Board – HVDLE (Regulation 62D (13))

The information specified in Part A of Schedule II of LODR regulations [Corporate Governance: Minimum information to be placed before Board] shall be placed before the board of directors of HVDLE.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

8. Furnishing of Compliance Certificate – HVDLE (Regulation 62D (14))

The chief executive officer and the chief financial officer of the HVDLE shall provide the compliance certificate to the board of directors as specified in Part B of Schedule II of LODR Regulations.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

9. Risk assessment and monitoring for HVDLE (Regulation 62D (15))

The board of directors shall be responsible for framing, implementing and monitoring the risk management plan for the HVDLE. Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

10. Evaluation of Independent Directors in HVDLE (Regulation 62D (16))

The board of directors shall evaluate independent directors on the following parameters:

(a) performance of the directors; and

(b) fulfillment of the independence criteria as specified in these regulations and their independence from the management:

Provided that in the above evaluation, the directors who are subject to evaluation shall not participate.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

11. Applicability of Chapter V A to HVDLE (Regulation 62C)

The provisions of Chapter VA shall apply to a listed entity which only has non-convertible debt securities listed, with an outstanding value of Rupees Five Thousand Crore and above and does not have any listed specified securities (here in after refered to as HVDLE)

Where the value of o/s listed non-convertible debt securities becomes equal to or greater than the specified threshold of Rs 5000 cr during the F.Y, it shall ensure compliance with these provisions within six months from the date of such trigger and the disclosures of such compliance may be made in the corporate governance compliance report on and from the third quarter, following the date of the trigger.

Once the provisions become applicable, they will continue to apply till value of o/s listed debt secutities as on Mar 31 in a year, reduces and remains below the specified threshold for a period of 3 consecutive F.Y. (Effective 01.04.25). This however shall not apply to entities which have ceased to be classified as HVDLE in terms of revised threshold as per Reg.62C(1)

12. Audit Committee in a HVDLE (Regulation 62F)

Every HVDLE shall constitute an Audit committee and it should have minimum 3 directors as members

1. 1. 2/3rd members should be independent directors
   2. All members to be financially literate and 1 member to have accounting/financial management expertise
   3. Chairperson of Audit committee should be an independent director & present at AGM
   4. CS to act as Secretary to the Committee
   5. meetings in a financial year and gap of max.120 days between 2 consecutive meetings
   6. Quorum – 2 or 1/3rd of members of committee whichever is more (at least 2 independent directors)
   7. Role of the audit committee and the information to be reviewed by the audit committee shall be as specified in Part C of Schedule II
   8. Provisions of 62F shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of committee shall be fulfilled by interim resolution professional

13. Nomination and remuneration committee in a HVDLE (Regulation 62G)

Board of Directors of HVDLE to constitute a Nomination and remuneration committee having at least 3 directors (all non -executive)

1. 1. At least two-thirds of the directors shall be independent directors
   2. Chairperson of NRC shall be independent director & present at AGM. Chairperson of HVDLE whether executive/non-executive may be appointed as member of NRC & shall not chair NRC
   3. Quorum – 2 or 1/3rd of members of committee whichever is more (at least 1 independent director)
   4. Committee to meet at least once in a financial year
   5. Functions of NRC shall be as specified in Part D of Schedule II. Where entities that are not companies/body corporates under Companies Act 2013 or set up under public private partnership model/structure, functions of NRC as specified under Part D of Schedule II may be ensured as per provisions of their respective statutes or in terms of the public private partnership model/ structure.
   6. Provisions of 62G shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of committee shall be fulfilled by IRP/RP

14. Stakeholders Relationship Committee in a HVDLE (Regulation 62H)

The board of directors of HVDLE shall ensure that the functions of the stakeholders relationship committee as specified in Part D of the Schedule II are discharged by the board of directors or a Stakeholders Relationship Committee is constituted to discharge such functions.

1. 1. The chairperson of this committee shall be a non-executive director.
   2. Minimum 3 Directors (out of which 1 should be independent Director) shall be the members of the committee
   3. Chairperson shall be present at AGM to answer queries of the debenture holders
   4. Committee to meet at least once in a financial year
   5. Provisions of 62H shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of committee shall be fulfilled by IRP/RP

15. Risk Management Committee in a HVDLE (Regulation 62I)

The board of directors of HVDLE shall constitute a Risk Management Committee with minimum 3 members (out of which at least 1 should be independent director. Functions of the committee are specified in Part D of Schedule II and shall be discharged by the AC or Board or Risk Management Committee

1. 1. Chairperson of committee shall be a member of B.O.D and senior executives of HVDLE may be members of committee
   2. Committee to meet at least twice in a financial year and not more than 210 days shall elapse between any two consecutive meetings
   3. Quorum – 2 or 1/3rd of members of committee whichever is more (at least 1 member of Board to be present)
   4. Board shall define role and responsibility of committee and may delegate monitoring and reviewing of risk management plan to committee and such other functions deem fit including cyber security. Role and responsibilities of committee shall mandatorily include performance of functions specified in Part D of Sch II
   5. Committee shall have powers to seek information from employees, obtain outside legal/professional advice and secure attendance of outsiders with relevant expertise, if necessary
   6. 62I shall be N.A during period HVDLE is undergoing CIRP under Insolvency Code. Roles/responsibilities of committee shall be fulfilled by IRP/RP

    16.Related party transactions in HVDLE (Regulation 62K(1) – (2))

HVDLE shall comply with provisions of Regulation 23 of LODR except Regulation 23(8) and 23(9) in respect of related party transactions. For the purpose of this regulation word “listed entity’ mentioned in regulation 23 shall be read as “HVDLE 1.Transaction with related party is material if individually or with previous transactions in a year exceeds Rs.1000 cr or 10% of annual consolidated turnover (ACT) of listed entity as per its audited financial statements (F.S) whichever is less 2.Transaction involving payments made to related party for brand usage/royalty shall be considered material if individually or with previous transactions during a year exceeds 5% of ACT of HVDLE as per its last audited F.S

17. Prior approval for RPT in HVDLE (Regulation 62K(3),(4))

a. RPT to which subsidiary is party & listed company is not shall require prior approval of AC of HVDLE if

    transaction whether alone or with previous transactions during a F.Y. exceeds 10% of ACT, as per last audited F.S of listed entity

b. RPT to which the subsidiary of a HVDLE is a party but HVDLE is not a party, shall require prior approval of AC of HVDLE if value of such transaction

   whether entered into individually or taken together with previous transactions during a F.Y exceeds 10% of annual standalone turnover, as per last

   audited financial statements of subsidiary

c. Prior approval of AC of HVDLE shall not be required for a RPT to which listed subsidiary is a party but listed entity is not a party, if Reg 23 and Reg

   15(2) are applicable to such listed subsidiary. [For RPT of unlisted subsidiaries of a listed subsidiary as referred herein, the prior approval of the audit

   committee of the listed subsidiary shall suffice.]

d. AC may grant omnibus approval as per Reg 62K(4)

18. Prior NOC for RPT & approval of shareholders in HVDLE (Regulation 62K(5)-(8))

1. After obtaining debentureholders approval, shareholders approval to be obtained. NOC from Deb trustee (DT) & deb. holders(DH) is required for listed

     debt securities issued on or after 01.4.25

2. In case NOC is witheld, matter cannot be taken for shareholders approval

3. NOC from DT & DH shall not be required for existing/prospective material RPT in case of O/s listed debt securities as on 31.03.25

4. Prior approval of shareholders & NOC by DT of HVDLE shall not be required for a RPTon to which listed subsidiary is a party but listed entity is not if

    regulation 62K is applicable to such listed subsidiary

5. For RPT of unlisted subsidiaries of listed subsidiary as above,prior approval of shareholders & NOC from DT of listed subsidiary shall be obtained.

    Regulation 62K(6) shall not apply in respect of a resolution plan approved U/s 31 of Insolvency Code subject to event being disclosed to recognized

    S.E.within a day of resolution plan being approved

6. 62K(5) N.A. to transactions in 62K(7)

   19. governance requirements with respect to unlisted material subsidiary ofHVDLE (Regulation 62L)

1. AC of HVDLE to review F.S.focusing on investments in unlisted material subsidiaries

2. BM minutes of unlisted material subsidiaries to be presented at HVDLE’s BMs

3  Management of unlisted material subsidiaries must inform HVDLE’s board of significant transactions > 10% of subsidiary’s total

    revenues/exp/asset/liabilities for previous F.Y

4. HVDLE cannot reduce shareholding in unlisted material subsidiary to <50%/relinquish control without special resolution at GM except under

    court/tribunal-approved scheme of arrangement/IRP with disclosure to S.E within a day of resolution plan approval

5 Sale,disposal,or lease of over 20% of an unlisted material subsidiary’s assets in aF.Y. requires prior shareholder special resolution, except under

   court/tribunal-approved schemes or IRP cases, with disclosure to S.E. within a day of resolution plan approval. N.A to transactions between WoS of

   HVDLE

6. HVDLE having a listed subsidiary that is a holding co, regulations apply to its listed subsidiaries

20. Secretarial Audit and Secretarial Compliance Report – HDVLE (Regulation 62M)

Every HVDLE and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit as per Regulation 24A.

    21. Obligations w.r.t Independent Directors (Regulation 62N(1-10)

1) Independent Director(ID) of HVDLE shall hold atleast 1 meeting in a F.Y without presence of non-IDs & members of management

2) IDs shall review performance of non-IDs & Board as a whole & of Chairperson taking in account views of executive/non-executive directors, assess

   quality, quantity, timeliness of information flow from management to board.

3) ID liable only for acts with their knowledge, consent, or where due diligence was not exercised

4) ID must be replaced within 3 months of resignation/removal, unless the board already meets independent director requirements 4) HVDLE to educate

   IDs on the industry, business model, roles/rights/responsibilities of HVDLE, and other relevant matters

5) ID to Submit a declaration that he meets the criteria of independence as per Reg 62D(1)(b) at first BM he participates as Director and therafter at first

   BM in every F.Y or when there is change in circumstances affecting his status as ID.The board must verify and record the director’s declaration.

22. Vacancies w.r.t certain KMP (CEO,MD,WTD,Manager,CFO) (Regulation 62P)

a. Where HVDLE is required to obtain approval of regulatory, government or statutory authorities to fill up such vacancies, then the vacancies shall be

    filled up by the HVDLE at the earliest and in any case not later than six months from the date of vacancy

b. Also the HVDLE shall not fill such vacancy by appointing a person in interim capacity, unless such appointment is made in accordance with the laws

    applicable in case of a fresh appointment to such office and the obligations under such laws are made applicable to such person.

c. Any vacancy in the office of CEO/MD/WTD/CFO/Manager of HVDLE in respect of which a resolution plan has been approved , shall be filled within 3

   months of such approval. In the interim, such HVDLE shall have not less than one full time KMP managing its day-to-day affairs

23. Submission of periodic Compliance Report (Regulation 62Q(2))

The HVDLE shall submit, to the recognized stock exchange(s), a periodic compliance report on corporate governance in the format and within the timelines, as may be specified by the Board from time to time

a) Details of cyber security incidents or breaches or loss of data or documents shall be disclosed along with the report

b) The Corporate Governance Report shall be signed either by the compliance officer or the chief executive officer of the HVDLE.

Penalty & Punishment

1) Sec 15A of SEBI Act:

If any person, who is required under this Act or any rules or regulations made thereunder,—

(a)  to furnish any document, return or report to the Board, fails to furnish the same or who furnishes or files false, incorrect or incomplete information, return, report, books or other documents, he shall be liable to a penalty which shall not be less than one lakh rupees but  which  may  extend  to  one  lakh  rupees  for  each  day  during  which  such failure continues subject to a maximum of one crore rupees  

(b)  to file any return or furnish any information, books or other documents within the time specified therefor in the regulations, fails to file return or furnish the same within the time specified  therefor  in  the  regulations or  who  furnishes  or  files  false,  incorrect  or incomplete information, return, report, books or other documents, he shall be liable to penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees

(c) to maintain books of account or records, fails to maintain the same, he shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees

2) General penalty:

Listed entity/any other person who contravenes any provision of the regulations shall be liable for one or more of the following penalties/actions as deemed fit by the regulator:

1. a) action as per Securities Law,
2. b) fine,
3. c) suspension of trading,
4. d) freezing of promoter/promoter group holding of designated securities, as may be applicable, in coordination with depositories,
5. e) any other action specified by Board