Regulation 62D - Board of Directors - Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

1 [Board of Directors 62D. (1) The composition of board of directors of a HVDLE shall be as follows: (a) board of directors shall have an optimum combination of executive and non-executive directors with at least one woman director and not less than fifty per cent. of the board of directors shall comprise of non-executive directors; (b) where the chairperson of the board of directors is a non-executive director, at least one-third of the board of directors shall comprise of independent directors and where the listed entity does not have a regular non-executive chairperson, at least half of the board of directors shall comprise of independent directors: Provided that where the non-executive chairperson is a promoter of the listed entity or is related to any promoter or person occupying management positions at the level of board of director or at one level below the board of directors, at least half of the board of directors of the listed entity shall consist of independent directors. Explanation : For the purpose of this clause, the expression related to any promoter shall have the following meaning: (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. (2) No HVDLE shall appoint a person or continue the directorship of any person as a non-executive director who has attained the age of seventy five years unless a special resolution is passed to that effect, in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such a person. (3) The HVDLE shall ensure that approval of shareholders for appointment or re-appointment of a person on the board of directors or as a manager is taken at the next general meeting or within a time period of three months from the date of appointment, whichever is earlier: Provided that a public sector company shall ensure that the approval of the shareholders for appointment or re-appointment of a person on the board of directors or as a Manager is taken at the next general meeting: Provided further that the appointment or a re-appointment of a person, including as a managing director or a whole-time director or a manager, who was earlier rejected by the shareholders at a general meeting, shall be done only with the prior approval of the shareholders: Provided further that the statement referred to under sub-section (1) of section 102 of the Companies Act, 2013, annexed to the notice to the shareholders, for considering the appointment or re-appointment of such a person earlier rejected by the shareholders shall contain a detailed explanation and justification by the nomination and remuneration committee (if constituted) and the board of directors for recommending such a person for appointment or re-appointment. (4) The continuation of a director serving on the board of directors of a listed entity shall be subject to the approval of the shareholders in a general meeting at least once in every five years from the date of their appointment or reappointment, as the case may be: Provided that the continuation of the director serving on the board of directors of a HVDLE as on March 31, 2025, without the approval of the shareholders for the last five years or more shall be subject to the approval of shareholders in the first general meeting to be held after March 31, 2025: Provided further that the requirement specified in this regulation shall not be applicable to the Whole-Time Director, Managing Director, Manager, Independent Director or a Director retiring as per the sub-section (6) of section 152 of the Companies Act, 2013, if the approval of the shareholders for the reappointment or continuation of the aforesaid directors or Manager otherwise provided for by the provisions of these regulations or the Companies Act, 2013 has been complied with: Provided further that the requirement specified in this regulation shall not be applicable to the director appointed pursuant to the order of a Court or a Tribunal or a resolution plan approved under section 31 of the Insolvency Code or to a nominee director of the Government on the board of a listed entity, other than a public sector company, or to a nominee director of a financial sector regulator on the board of a listed entity or to a director appointed under the public private partnership model/structure: Provided further that the requirement specified in this regulation shall not be applicable to a director nominated by a financial institution registered with or regulated by the Reserve Bank of India under a lending arrangement in its normal course of business or nominated by a debenture trustee registered with the Board under a subscription agreement for the debentures issued by the HVDLE. (5) Any vacancy in the office of a director shall be filled by the listed entity at the earliest and in any case not later than three months from the date of such vacancy: Provided that if the HVDLE becomes non-compliant with the requirement under sub-regulation (1) of this regulation, due to expiration of the term of office of any director, the resulting vacancy shall be filled by the listed entity not later than the date of such office is vacated: Provided further that this sub-regulation shall not apply if the HVDLE fulfils the requirement under sub-regulation (1) of this regulation without filling the vacancy. (6) The board of directors shall meet at least four times a year, with a maximum time gap of one hundred and twenty days between any two meetings. (7) The quorum for every meeting of the board of directors shall be one-third of its total strength or three directors, whichever is higher, including at least one independent director. Explanation : For removal of doubts, it is clarified that the participation of the directors by video conferencing or by other audio-visual means shall also be considered for the purposes of such quorum. (8) The board of directors shall periodically review compliance reports pertaining to all laws applicable to the HVDLE, prepared by the HVDLE as well as steps taken by the HVDLE to rectify instances of non-compliances. (9) The board of directors of the HVDLE shall satisfy itself that plans are in place for orderly succession by appointment to the board of directors and senior management. (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. (11) (a) The board of directors 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. (b) The requirement of obtaining approval of shareholders in general meeting shall not apply to payment of sitting fees to non-executive directors, if made as per the Companies Act, 2013 for payment of sitting fees without approval of the Central Government. (c) The approval of shareholders mentioned in clause (a) of this sub-regulation, 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. (d) The 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. (e) Independent directors shall not be entitled to any stock option. (12) The fees or compensation payable to executive directors who are promoters or members of the promoter group, shall be subject to the approval of the shareholders by special resolution in general meeting, if- (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: Provided that the approval of the shareholders under this provision shall be valid only till the expiry of the term of such director. Explanation: For the purposes of this clause, net profits shall be calculated as per section 198 of the Companies Act, 2013. (13) The information specified in Part A of Schedule II shall be placed before the board of directors. (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. (15) (a) The HVDLE shall lay down procedures to inform the board of directors about risk assessment and minimization procedures. (b) The board of directors shall be responsible for framing, implementing and monitoring the risk management plan for the HVDLE. (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. (17) The statement to be annexed to the notice as referred to in sub-section (1) of section 102 of the Companies Act, 2013 for each item of special business to be transacted at a general meeting shall also set forth clearly the recommendation of the board of directors to the shareholders on each items. ] **************** NOTES:- 1 . Inserted vide F. No. SEBI/LAD-NRO/GN/2025/239 dated 27-03-2025