Annual Compliance Calendar of Listed Companies

Explanation of Compliance Calendar of Listed Companies

1. Disclosure of Director’s Interest (Form MBP-1): Directors must disclose their interests in other entities at the beginning of each financial year, as per Section 184(1) of the Companies Act, 2013.
2. Declaration by Independent Directors: Independent directors must declare their independence at the beginning of each financial year as per Section 149(7) of the Companies Act, 2013.
3. Filing of DIR-8: Every director must file Form DIR-8 annually to confirm that they are not disqualified under Section 164(2) of the Companies Act, 2013.
4. Annual Information from Designated Persons: Obtain annual information from designated persons regarding trading in securities as per SEBI PITs regulations.
5. Director’s Committee Positions: Directors must inform the company about their committee positions in other listed entities annually or whenever changes occur.
6. Compliance Affirmation by Board and Senior Management: All board members and senior management must affirm compliance with the code of conduct annually.
7. Disclosure of Personal Interest in Transactions: Senior management must disclose material transactions where they have a personal interest annually.
8. Payment of Annual Listing Fees: Pay annual listing fees to recognized stock exchanges within 30 days of the conclusion of the financial year.
9. Certificate from PCS: File a certificate from the Practicing Company Secretary (PCS) with the Recognized Stock Exchange (RSE) regarding issuance of all certificates within 30 days of lodgment.
10. Certificate for Share Transfer Facility Maintenance: File a certificate with SE regarding maintenance of share transfer facility within 30 days of the conclusion of the financial year.
11. Disclosure Requirements for Large Entities: Comply with SEBI’s disclosure requirements for large entities by April 30th.
12. Secretarial Compliance Report: Prepare and submit the Secretarial Compliance Report in PDF and XBRL format within 60 days of the financial year-end.
13. Filing of Form DPT-3: File Form DPT-3 – Return of Deposits with ROC by June 30th.
14. DIR 3 KYC: Complete eKYC for all directors by September 30th.
15. Annual General Meeting (AGM): Hold the AGM within 6 months of the closure of the financial year, on or before September 30th.

Quarterly Compliance Calendar of Listed Companies

Explanation of Quarterly Compliance Calendar of Listed Companies

1. Statement on Investor Complaints: Submit a statement on investor complaints within 21 days from the end of each quarter to SEBI.
2. Corporate Governance Report: Provide the Corporate Governance Report within 21 days from the end of each quarter to SEBI.
3. Shareholding Pattern: Disclose the Shareholding Pattern within 21 days from the end of each quarter to SEBI.
4. Reconciliation of Share Capital Audit Report: Prepare and reconcile the Share Capital Audit Report from PCS in XBRL & PDF format within 30 days from the end of each quarter.
5. Compliance Certificate from RTA: File the Compliance Certificate received from the Registrar and Transfer Agent (RTA) regarding the dematerialization of share certificates to the Stock Exchange within 30 days from the end of each quarter.
6. Closure of Trading Window: Close the trading window from the end of every quarter till 48 hours after the declaration of financial results at the Board Meeting. Additionally, file a notice of closure of the trading window with the Stock Exchange before the end of each quarter.

Half-Yearly Compliance Calendar of Listed Companies

Explanation of Half-Yearly Compliance Calendar of Listed Companies

1. Filing of Form MSME 1 with ROC: Listed entities must file Form MSME 1 with the Registrar of Companies (ROC) within 1 month from the Half Year Ending (HYE). For half-years ending in March, the deadline is April 30th, and for half-years ending in September, the deadline is October 31st.
2. Disclosure of Related Party Transactions: Intimate the Stock Exchange about related party transactions on a half-yearly basis on the same date as the publication of standalone and consolidated financial results. This requirement came into effect on April 1, 2023.

Event-Based Compliance Calendar of Listed Companies

Explanation of Event-Based Compliance Calendar of Listed Companies

1. Intimation of Loss of Certificate/Issue of Duplicate Certificate: Notify the Stock Exchange within 2 days of receiving information from the shareholder or Registrar and Transfer Agent (RTA) regarding the loss of certificate or issuance of a duplicate certificate.

These compliance tasks ensure timely reporting and adherence to regulatory requirements for listed entities, promoting transparency and accountability in their operations.

Board Meeting Related Compliance Calendar of Listed Companies

Explanation:

1. Notice & Agenda of Board Meeting: According to Section 173(3) of the Companies Act 2013 and Secretarial Standard-1 (SS-1), the notice and agenda of the board and committee meetings should be sent to directors and auditors at least 7 days before the meeting date to ensure adequate preparation time.
2. Filing Notice with SE: Regulation 29 of SEBI LODR mandates filing the notice of board meetings with the Stock Exchange (SE) in both XBRL and PDF formats. For meetings where financials are to be considered, intimation should be provided 5 working days before the meeting, and for other cases, it should be given 2 working days prior to the meeting.
3. Obtain Audit Report for Annual Financial Results: Under Regulation 30 & 33 of SEBI LODR, audit reports from auditors must be obtained within 60 days of the financial year-end for consideration of Annual Financial Results.
4. Obtain Limited Review Report for Quarterly Results: For quarterly financial results, a Limited Review Report from auditors must be obtained within 45 days of the quarter end, as per Regulation 30 & 33 of SEBI LODR.
5. Board Meeting for Financial Results: Board meetings for the consideration of financial results must be held within 60 days of the financial year-end for annual results and within 45 days of the quarter end for quarterly results, as per Regulation 33 of SEBI LODR.
6. Filing BM Outcome with SE: Regulation 30 & 33 of SEBI LODR require filing the board meeting outcomes, financial results, and relevant auditor reports with the SE in PDF format within 30 minutes of the board meeting.
7. Filing Financial Results in XBRL: Financial results must also be filed in XBRL format with the SE within 24 hours of the board meeting, as per Regulation 30 & 33 of SEBI LODR.
8. Publishing Financial Results in Newspaper: Regulation 47 of SEBI LODR mandates publishing financial results in newspapers in specified formats within 48 hours of the board meeting.
9. Filing Financial Results Published in Newspaper with SE: The financial results published in newspapers must also be filed with the SE within 24 hours of publication, as per Regulation 30 & 47 of SEBI LODR.

These compliances ensure transparency, regulatory adherence, and effective corporate governance in conducting board meetings and disseminating financial information for listed entities.

Maintaining compliance is crucial for listed companies to ensure transparency, accountability, and legal adherence. A compliance calendar serves as a roadmap, guiding companies through various regulatory obligations at different intervals throughout the year. Failure to comply with these requirements can lead to severe penalties, tarnishing the company’s reputation and affecting shareholder trust.

Importance of Compliance Calendar:

A compliance calendar is a structured timeline that outlines specific tasks, deadlines, and regulatory filings required by law or stock exchange regulations. It helps companies stay organized, prioritize tasks, and avoid missing critical deadlines. Compliance calendars are particularly vital for listed companies due to the stringent regulatory environment they operate in.

Practical Example:

Let’s consider a hypothetical example of XYZ Ltd., a listed company in India. XYZ Ltd. has a compliance calendar in place to ensure timely adherence to various regulatory obligations. However, due to oversight, they miss filing their quarterly financial results within the prescribed timeline.

As a result, the Securities and Exchange Board of India (SEBI) imposes a penalty on XYZ Ltd. for non-compliance. The penalty could range from monetary fines to suspension of trading or delisting, depending on the severity of the violation and the company’s past compliance record.

Warning for Penalty:

The penalty imposed by SEBI serves as a stern warning to XYZ Ltd. and other listed companies about the consequences of non-compliance. Apart from financial repercussions, the penalty could damage the company’s reputation, erode investor confidence, and lead to legal consequences for the board of directors and senior management.

Moreover, the market may react negatively to news of non-compliance, resulting in a decline in the company’s stock price and market capitalization. This can further exacerbate the company’s financial woes and hinder its ability to raise capital or attract investors in the future.

Lessons Learned:

XYZ Ltd. learns valuable lessons from this incident. They realize the importance of diligently adhering to their compliance calendar and maintaining robust internal controls to prevent future lapses. The company strengthens its compliance framework by implementing automated reminders, enhancing oversight mechanisms, and providing regular training to employees on regulatory requirements.

Additionally, XYZ Ltd. takes proactive measures to communicate with shareholders, regulators, and other stakeholders about the steps taken to rectify the compliance lapse and prevent recurrence. Transparency and accountability become paramount as the company strives to rebuild trust and credibility in the market.

What are the average compliance costs for listed companies in India?

Determining the average compliance costs for listed companies in India can be challenging due to various factors such as the size of the company, industry sector, regulatory environment, and specific compliance requirements. However, several studies and reports provide insights into the approximate compliance costs incurred by listed companies in India.

1. Size of the Company: Larger companies typically incur higher compliance costs due to the scale of operations, complexity of regulatory requirements, and greater scrutiny from regulators and investors.
2. Industry Sector: Compliance costs can vary significantly across different industry sectors based on sector-specific regulations, environmental considerations, and technological advancements.
3. Regulatory Environment: India has a complex regulatory framework governing listed companies, including the Securities and Exchange Board of India (SEBI) regulations, Companies Act, 2013, and various other laws and guidelines. Compliance with these regulations involves costs related to hiring compliance professionals, legal fees, technology infrastructure, and training programs.
4. Specific Compliance Requirements: Listed companies in India are required to comply with a wide range of regulations related to corporate governance, financial reporting, disclosure requirements, shareholder communication, insider trading, and environmental sustainability, among others. Each of these compliance areas incurs costs associated with ensuring adherence to regulatory standards.
5. External Audit and Assurance Services: Listed companies are typically required to undergo annual financial audits conducted by external auditors to ensure compliance with accounting standards and regulatory requirements. The costs associated with external audit services constitute a significant portion of compliance expenses for listed companies.
6. Technology and Compliance Software: Many listed companies invest in compliance management software and technology solutions to streamline regulatory reporting, automate compliance processes, and enhance data security. These investments incur upfront costs as well as ongoing maintenance expenses.

While there is no precise figure for the average compliance costs for listed companies in India, a study conducted by the Confederation of Indian Industry (CII) and consultancy firm Deloitte estimated that compliance costs for Indian companies ranged from 0.5% to 1.5% of their total revenue. However, this estimate may vary depending on the factors mentioned above and the specific circumstances of each company.

Additionally, compliance costs are expected to increase in response to regulatory changes, technological advancements, globalization, and growing investor expectations for transparency and accountability. As a result, listed companies need to continuously assess and manage their compliance costs to ensure efficient and effective compliance with regulatory requirements while maximizing shareholder value.

Conclusion Compliance Calendar of Listed Companies

In conclusion, a compliance calendar is an indispensable tool for listed companies to navigate the complex regulatory landscape effectively. By adhering to their compliance obligations, companies not only mitigate legal risks but also foster investor confidence and uphold corporate governance standards. Failure to comply can have severe consequences, including penalties, reputational damage, and financial losses. Therefore, listed companies must prioritize compliance and allocate sufficient resources to ensure timely adherence to regulatory requirements.