1. Pavan Kumar Vijay Past President, ICSI Compliance under SEBI Regulations and Guidelines Corporate Compliance Management 27.03.2010

2. Do you usually confront with these?? I don’t know which laws are applicable How to make compliances on time? I am bored of Stereotyped Compliance system

3. Outstanding Performance, Higher Profits, Expanded Market Reach and the like FAILS to protect a company which has put good governance & ethics at the back burner…. History is Witness S U C E S S D I S A S T E R

4. Secret behind building foundations ..…Only the culture of strict adherence to good compliance can keep a company ahead on sustainable basis , bring in larger profits…

5. Disclosure & Transparency Compliance in Letter Compliance in Letter & Spirit Filing the Gap

6. Designing effective & user friendly COMPLIANCE MANAGEMENT SYSTEM to lay down strong foundation for GOOD GOVERNANCE

7. Compliance of Rules & Regulations Good Corporate Governance

8. Benefits of Effective Compliance To Industry Better Investors confidence Brand Value Enhancement Reduced risk of embarrassment due to defaults

9. IMPLEMENTING EFFECTIVE COMPLIANCE MANAGEMENT SYSTEM

14. HIDDEN KHAZANA for all STAKEHOLDERS Company Professional INVESTORS GOVERNMENT AND REGULATORS SOCIETY SUPPLIERS CUSTOMERS LENDERS

17. Compliance Timings: Evaluation Compliance Timings Fixed / Regular Event Based

20. Corporate Compliance Management Compliance under SEBI Regulations and Guidelines SEBI (SAST) Regulations, 1997 SEBI (PIT) Regulations, 1992 SEBI (ESOS & ESPS) Guidelines, 1999

21. Topics Covered

22. SEBI (SAST) Regulations, 1997

23. Key Regulations Regulation 3(3) Regulation 3(4) Regulation 3(5) Regulation 6 Regulation 7 Regulation 8 Regulation 10, 11 & 12 Regulation 20(4) & 20(5) Clause 40A of Listing Agreement Regulation 3 (1) Exemptions under Takeover Code Regulation 4 Takeover Panel Exemptions Definitions Regulation 2 Disclosures & Compliances Open Offer Provisions

24. Disclosures Requirements

25. Thresholds Defined Acquisition of more than 5%, 10%, 14%, 54% & 74% [Regulation 7 (1)] Persons, who are holding between 15% - 55%, acquisition/ sale aggregating 2% or more share capital/ voting rights [Regulation 7(1A)] Person holding more than 5% shares and Promoter or any person having control over the company.(Transitional Provisions) [Regulation 6]

26. Compliance Chart – Regulation 6 Regulation No. By whom To whom Time limit ( from date of notification ) 6(1) Any person holding More than 5% shares or voting rights Target Company within 2 months 6(2) Target Company All Stock Exchanges where shares are listed within 3 months 6(3) Promoter or any person having control over the company Target Company within 2 months 6(4) Target Company All Stock Exchanges where shares are listed within 3 months

27. Compliance Chart – Regulation 7 Regulation No. By whom To whom Time limit 7(1) Any person who acquires more than 5%, 10%, 14%, 54%, 74% Target Company & Stock Exchanges where shares are listed Within 2 Days of Acquisition 7 (1A) Any person who holds 15%-55% shares and purchases/sells 2% or more of shares or Any person who holds 55%-75% shares and purchases 2% or more of shares in terms of second proviso to regulation 11(2) Target Company & Stock Exchanges where shares are listed Within 2 Days of purchase/sale 7 (3) Target Company All Stock Exchanges where shares are listed Within 7 Days of receipt of information

28. Thresholds Defined Disclosures by Promoters or Person having control over a company [ Regulation 8 (2 )] Disclosure by Person holding more than 15% shares [ Regulation 8(1 )] Disclosures by Target Company [ Regulation 8 (3 )]

29. Compliance Chart – Regulation 8 Regulation No. By whom To whom When Time limit 8(1) Any person who holds more than 15% shares Company As on 31 st March 21 Days 8 (2) Promoters or person having control over a company Company As on 31 st March Record Date 21 Days 8 (3) Target Company Stock Exchange As on 31 st March Record Date 30 Days 8 (4) Maintenance of Register of Holdings

30. Query Whether an unlisted Company is also required to make disclosure under regulation 6, 7 & 8? Yes If an unlisted Company acquirers or holds shares/voting rights of a Listed Company beyond the limits specified under regulation 6, 7 & 8, then it is also required to make disclosures as any other acquirer. DALP Tradepool Pvt. Ltd – IG

31. Query Whether dispatch of disclosures is sufficient to ensure compliance? No The proof of dispatch is not sufficient to prove compliance. The obligation is to ensure delivery to the stock exchange. Therefore, proof of delivery should be produced. Sudeep Chitlangia vs. AO

32. Whether shares held by all persons acting in concert with acquirer have to be taken into account for determining whether regulation 7 gets triggered? Query Yes The shares held by all the persons, who act in concert with the acquirer, are to be taken into account for determining whether regulation 7 gets triggered. Radheshyam Tulsian –SAT

33. Whether regulation 7(1) enjoins on any acquirer to report his shareholding once it exceeds 5 per cent regardless of whether his shareholding was acquired or reacquired? No, disclosures under regulation 7 are required to be made as and when the acquirers’ shareholding exceeds the threshold limits because the compliance under regulation 7 is not one time compliance. E.g. A person has acquired more than 5% shares and accordingly made disclosures under regulation 7(1), and then he sells 2% shares. Now, he will again be required to make disclosures, if his shareholding again crossing the limit of 5% on further acquisitions. Query

34. Thresholds Defined-Regulation 8A Disclosure by Promoters or Person forming part of promoter group about the shares pledged before notification [ Regulation 8A(1) ] Disclosures by Promoters or Person forming part of promoter group on pledge of share.[ Regulation 8A (2) ] Disclosures by Promoters or Person forming part of promoter group on invocation of pledge .[ Regulation 8A (3) ] Disclosures by Company when shares pledged exceeds 25000 or 1% of share capital .[ Regulation 8A (4) ]

35. Compliance Chart – Regulation 8A Regulation No. By whom To whom When (Event) Time limit 8A(1) Promoter or person forming part of the promoter group Company Details of shares pledged before notification Within 7 working Days of notification 8A (2) Promoter or person forming part of the promoter group Company On pledge of single shares Within 7 working days of pledge 8A(3) Promoter or person forming part of the promoter group Company On invocation of pledge Within 7 working days of invocation of pledge

36. Compliance Chart – Regulation 8A Regulation No. By whom To whom When Time limit 8A (4) Company Stock Exchange On receipt of information under regulation 8A (1), (2) and (3) if the total number of shares pledged during the quarter exceeds 25000 or 1% of the total paid up capital of the company Within 7 working days of receipt of information

37. Thresholds Defined Acquisition of 15% or more voting rights [Regulation 10] Persons, who are holding between 15% - 55%, acquisition more than 5% or more voting rights in a financial year.[Regulation 11(1)] Persons, who are holding between 55% - 75% , acquisition of any additional single share or voting right [Regulation 11(2)] Acquisition of Control or Change in Control with or without acquisition of shares [Regulation 12]

38. Compliance Chart – Regulation 10, 11& 12 Regulation No. By whom To whom When (Event) Time limit 10 Acquirer or by his PAC Shareholders of Target Company Acquisition of 15% or more voting rights Within 4 working Days of entering in to agreement for acquisition of share/voting rights 11(1) Acquirer or along with PAC holding equal or more than 15% but less than 55% of shares/ voting rights Shareholders of Target Company Acquisition of 5% or more shares or voting rights in Financial Year Within 4 working Days of entering in to agreement for acquisition of share/voting rights

39. Compliance Chart – Regulation 10, 11& 12 Regulation No. By whom To whom When (Event) Time limit 11(2) Acquirer or along with PAC holding equal or more than 55% but less than 75% of shares/ voting rights Shareholders of Target Company Acquisition of any additional single share or voting right Within 4 working Days of entering in to agreement for acquisition of share/voting rights 12 Acquirer or by his PAC Shareholders of Target Company Acquisition of control irrespective of with or without acquisition of shares Within 4 working Days of occurring the event

40. Amendment in Regulation 11 (2) w.e.f. October 31, 2008 Proviso to Regulation 11 (2) Extra limit of 5% is allowed to persons holding 55%-75% shares Routes Allowed Purchase through Open market Buy-back Routes Dis-allowed Bulk Deal Block Deal Off-market Preferential Allotment

41. SEBI (Prohibition of Insider Trading) Regulations, 1992

42. What Is INSIDER TRADING?

43. Insider Trading It is dealing in the securities by a Insider , who has the knowledge of material “inside” information which is not known to the general public

44. Who Is Insider ???

45. Reg 2 (e) ANY PERSON WAS IS CONNECTED WITH THE COMPANY WHO OR OR DEEMED TO HAVE BEEN CONNECTED AND WHO IS REASONABLY EXPECTED TO HAVE ACCESS HAS RECEIVED HAS HAD ACCESS OR OR TO UNPUBLISHED PRICE SENSITIVE INFORMATION INSIDER

46. Reg 2 (ha) ANY INFORMATION OR AND TO A COMPANY LIKELY TO MATERIALLY AFFECT THE PRICE OF SECURITIES OF THE COMPANY INDIRECTLY DIRECTLY Price Sensitive Information WHICH RELATES WHICH IF PUBLISHED

47. Disclosures To be Made

48. Reg 13(1) Disclosures To be Made PARTICULARS TO BE SUBMITTED To PERIOD Initial disclosure by person who holds more than 5% shares/ voting rights in any listed company Company within 2 working days of receipt of information of allotment or the acquisition of shares/voting right TO INTIMATE The number of shares held by such persons

49. Reg 13(2) Disclosures To be Made PARTICULARS TO BE SUBMITTED To PERIOD Initial disclosure by person who is either director or officer of listed company Company within 2 working days of becoming the director or officer of company TO INTIMATE The number of shares held by such persons

50. Reg 13(3 & 5) Disclosures To be Made PARTICULARS TO BE SUBMITTED To PERIOD Continual disclosure by person who holds more than 5% shares/ voting rights in any listed company Company within 2 working days of receipt of information of allotment or the acquisition of shares/voting right TO INTIMATE The number of shares held & any Change exceeding 2%

51. Reg 13(4 & 5) Disclosures To be Made PARTICULARS TO BE SUBMITTED To PERIOD Continual disclosure by person who is either director or officer of listed company Company as well as to the stock exchange where the shares of the company are listed within 2working days of receipt of information of allotment or the acquisition of shares/voting right TO INTIMATE The number of shares held & any Change exceeding Rs. 5 Lakh OR 25000 Shares OR 1% whichever is Lower

52. Reg 13(6) Disclosures To be Made PARTICULARS TO BE SUBMITTED To PERIOD Disclosure by the company on the receipt of information under regulation 13(1), 13(2), 13(3) and 13(4) Stock Exchange where the shares of the company are listed within 2working days of receipt of information under regulation 13(1), 13(2), 13(3) and 13(4)

53. Modal Code of Conduct

56. Model Code of Conduct Schedules SCHEDULE I MODEL CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING PART A - FOR LISTED COMPANIES PART B – FOR OTHER ENTITIES SCHEDULE II CODE OF CORPORATE DISCLOSURE PRACTICES FOR PREVENTION OF INSIDER TRADING

57. Important Terms In Code of Conduct

63. Interesting Judgements on Insider Trading

64. MATTER OF DEBATE WHETHER AN ACTION UPON ANY PRICE SENSITIVE INFORMATION WHICH TURN OUT TO BE INCORRECT FALLS UNDER INSIDER TRADING SAMEER ARORA VS. SEBI HELD INFORMATION WHICH FINALLY TURNS OUT TO BE FALSE OR AT LEAST UNCERTAIN CANNOT EVEN BE LABELED AS INFORMATION.

65. MATTER OF DEBATE WHEN AN PRICE SENSITIVE INFORMATION WILL BE TREATED AS MADE PUBLIC DSQ HOLDINGS VS. SEBI HELD THE DAY ON WHICH THE INFORMATION IS SENT TO THE STOCK EXCHANGE AS PER THE LISTING AGREEMENT.

66. SEBI (ESOS & ESPS) Guidelines, 1999

68. Legal Provisions relating to ESOS

69. Legal Provisions relating to ESOS

70. Eligibility to participate in ESOS An Employee Other than Employee who is promoter Employee who belongs to Promoter Group Director who directly or indirectly holds more than 10% shares of the Company OR OR

71. Constitution of Compensation Committee

74. ESOS Valuation and Accounting Calculation of Fair Market Value On the date of Vesting of Option Listed Company Unlisted Company Stock Exchange means Recognized Stock Exchange where highest trading volume has been recorded Listed on One Recognized Stock Exchange Date of Vesting of Option Any date earlier than, but not more than 180 days earlier than, the date of Vesting of Option Closing price available on last date preceding the date of vesting of option FMV shall be the value as determined by Category I Merchant Banker Listed on more than One Recognized Stock Exchange Average of Opening and Closing Price on the date of Vesting of Option If price is not available on the date of vesting On Specified Date

75. Compliance Under Listing Agreement Activity Time Line CLAUSE 16 Notice for Book Closure/ Record Date In case of Right issue In case of Bonus Issue In case of Dividend declaration 7 working days prior to Record Date

76. Compliance Under Listing Agreement CLAUSE 19(a),(d) Board meeting notice for dividend, convertible debentures, buy-back, right issue Declaration of dividend or cash bonus 2 working days prior to the date of Board meeting 5 days before the book closure or record date fixed for that purpose CLAUSE 19(b) Board meeting notice for bonus issue (No intimation to stock exchange is required if declaration of bonus is not part of agenda) Simultaneously with the sending of notice to BODs CLAUSE 22 Intimation regarding the outcome of Board meeting regarding increase in capital, reissue of forfeited shares, new issue, alteration of capital, calls to be made Within 15 minutes of the conclusion of the Board meeting

77. Compliance Under Listing Agreement CLAUSE 31 Periodical Reports As soon as they are issued Notices, resolutions, circulars regarding new issue of capital Prior to their dispatch to the shareholders Notices, circulars, call letters, annexures regarding s.391, 394 At the same time when they are sent to the concerned persons Proceedings of AGM/EGM No time limit is given Notices, circulars, proceeding regarding reconstruction or reduction of capital No time limit is given

78. Compliance Under Listing Agreement CLAUSE 35 Share Holding Pattern Within 21 days of the end of each quarter CLAUSE 38 Annual Listing Fees to the Stock exchange Annual payment of Custodian Fees to the Depositories On or before 30th April each year CLAUSE 32 Submission of the Balance sheet and Profit and Loss account. Supply a copy of the complete and full Balance Sheet, Profit and Loss Account and the Directors’ Report, to each Shareholder and upon application to any member of the Exchange.

79. Compliance Under Listing Agreement CLAUSE 40 A Minimum Level of Public Shareholding The company shall maintain on a continuous basis, public shareholding of at least 25%/ 10% of the total number of issued shares of a class or kind as the case may be, for every such class or kind of its shares which are listed. CLAUSE 41 Financial Results Filing Within one month of the end of each quarter (other than last quarter) Intimation of Board Meeting Atleast 7 clear days before Board meeting Publication of financial results Within 48 hours of the conclusion of the Board Meeting at which financial results are approved

80. Compliance Under Listing Agreement CLAUSE 49 Compliance report on corporate governance signed by CEO/Compliance officer Within 15 days of the end of each quarter

82. Good Corporate governance Reduces Risk Higher Profits Higher Valuation of Company RESULT OF GOOD CORPORATE COMPLIANCE MAKING YOUR COMPANY DIFFERENT & LEADING TOWARDS EXCELLENCE

84. The Conclusion is ………. Make Your Company GOOD GOVERNED COMPANY

85. Thank You Pavan Kumar Vijay Managing Director Corporate Professionals (India) Pvt. Ltd. D – 28, South Ext- I, New Delhi 1100049 Tel: +91.11.40622200, Fax: +91.11.40622201 Email: info@indiacp.com Visit us at: www.corporateprofessionals.com