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Regulation

Particulars

62K

(Related Party Transactions)

1. Every HVDLE must adopt a board-approved policy on material related party transactions (RPTs), setting clear materiality thresholds.

This policy must be reviewed and updated at least once every three years.

A related party transaction is considered material if, alone or together with others in a financial year, it exceeds ₹1,000 crore or 10% of the entity’s annual consolidated turnover, whichever is lower.

2. Any transaction involving payments to a related party for brand usage or royalty is considered material if it exceeds 5% of the HVDLE’s annual consolidated turnover as per the last audited financial statements.
   This applies even if the amount is lower than the general materiality thresholds set for other related party transactions.
3. All related party transactions and subsequent material modifications shall require prior approval of the audit committee of the HVDLE.

Provided that only those members of the audit committee, who are independent directors, shall approve related party transactions.

Provided further that:

• Every HVDLE must define “material modifications” in its related party transactions (RPT) policy;
• Prior audit committee approval is needed for significant RPTs at the subsidiary level if they cross 10% of consolidated or standalone turnover, depending on whether the parent is a party.
• The audit committee can give omnibus approvals for repetitive transactions, laying down criteria, specifying details viz. :

1. Name of the Related party, Nature of Transaction, Period of Transaction, maximum amount of Transaction;
2. The indicative base price / current contracted price and the formula for variation in the price if any; and
3. Such other conditions as the audit committee may deem fit:

Provided that where the need for related party transaction cannot be foreseen and aforesaid details are not available, audit committee may grant omnibus approval for such transactions subject to their value not exceeding Rupees one crore per transaction.

• The audit committee shall review, at least on a quarterly basis, the details of related party transactions entered into by the HVDLE pursuant to each of the omnibus approvals given.
• Such omnibus approvals shall be valid for a period not exceeding one year

5. All material RPTs and subsequent material modifications require a No-Objection Certificate (NOC) from the Debenture Trustee, who must also get NOC from unrelated debenture holders holding over 50% in value, via voting including e-voting.
6. Only after debenture holders’ approval, the transaction must be approved by shareholders through a resolution.

For listed debt issued on or after April 1, 2025, this NOC process applies; for debt outstanding as on March 31, 2025, it doesn’t apply to existing or prospective RPTs.

Prior approval of the shareholders and NOC by Debenture trustee shall not be required for a related party transaction to which the listed subsidiary is a party but the listed entity is not a party, if regulation 62K of these regulations is applicable to such listed subsidiary.

The requirements of this sub-regulation shall not apply to a resolution plan approved under Section 31 of the Insolvency Code, provided that the event is disclosed to the recognized stock exchanges within one day of such approval.

7. Exceptions: these rules don’t apply to:
8. Transactions between government companies,
9. Between a holding company and its wholly-owned subsidiaries, or between two wholly-owned subsidiaries if their accounts are consolidated and presented to shareholders at general meeting for approval.
10. The provisions of this regulation shall be applicable to all transactions entered into on or after April 01, 2025.
11. The HVDLE shall submit to the stock exchanges disclosures of related party transactions in the format as specified by the Board from time to time, and publish the same on its website:

Provided that a HVDLE shall submit such disclosures along with its standalone financial results for the half year.

62L

(Corporate governance requirements with respect to unlisted material subsidiary of HVDLE)

• At least one independent director on the board of the HVDLE shall also be a director on the board of an unlisted material subsidiary, whether incorporated in India or abroad.
• The Audit Committee shall review the financial statements of the unlisted material subsidiary, particularly its investments.
• The Board minutes of the unlisted material subsidiary shall be placed before the board of the HVDLE.
• The management of the unlisted material subsidiary shall periodically bring to the notice of the HVDLE's board of directors a statement of all significant transactions and arrangements entered into by the subsidiary.
• The HVDLE shall not reduce its shareholding in the unlisted material subsidiary to 50% or below, or relinquish control, without passing a special resolution in the General Meeting.
• Selling, disposing of, or leasing assets exceeding 20% of the unlisted material subsidiary's assets during a financial year requires prior shareholder approval through a special resolution.

This requirement mentioned in points 5 and 6 above does not apply if the transaction is pursuant to a Court/Tribunal-approved scheme of arrangement or a resolution plan under section 31 of the Insolvency Code, provided the event is disclosed to stock exchanges within one day of such approval.

• Where an HVDLE has a listed subsidiary that is itself a holding company, these regulations shall apply to that listed subsidiary in respect of its own subsidiaries.

62M

(Secretarial Audit and Secretarial Compliance Report)

62N

(Obligations with respect to independent directors.)

1. No alternate director: An alternate director cannot be appointed for an independent director of a HVDLE.
2. Tenure: Maximum tenure of independent directors shall follow the Companies Act, 2013 and the rules made thereunder.
3. Appointment & removal: Appointment, re-appointment, or removal requires a special resolution. If it fails, but more votes are cast in favor than against—especially by public shareholders—it shall still be valid.
4. Separate meeting: Independent directors must meet at least once a year without non-independent directors and management.
5. Purpose of meeting:They should:
   • Review performance of non-independent directors and the board as a whole
   • Review performance of the chairperson considering views of executive and non-executive directors
   • Assess the quality, quantity, and timeliness of information flow from management
6. Liability: Independent directors are liable only for acts done with their knowledge, consent, connivance, or when they failed to act diligently.
7. Replacement: Any vacancy must be filled within three months, unless the board still meets the minimum requirement of independent directors.
8. Familiarization:HVDLE must conduct programs to familiarize independent directors with:
   • The industry in which HVDLE operates
   • HVDLE’s business model
   • Their roles, rights, and responsibilities
9. Declaration: Independent directors must annually declare compliance with independence criteria in the first board meeting.
10. Board’s duty: The board must assess and validate this declaration.
11. Insurance: HVDLE must provide D&O (Directors & Officers) insurance as decided by the board.
12. Cooling-off period: A resigning independent director cannot be appointed as executive/whole-time director in the HVDLE or its group entities for one year.

62O

(Obligations   with      respect   to   employees      including   senior   management,   key managerial personnel, directors and promoters)

Provided that expired or subsisting agreements (within three years) must be disclosed to stock exchanges for public dissemination

Provided further that if subsisting, approved by the board in the forthcoming board meeting and then by shareholders in the forthcoming general meeting.

Provided further that all interested persons involved in the transaction covered under the agreement shall abstain from voting in general meeting

62P

(Vacancies in respect of certain Key Managerial Personnel)

       Provided  that     where  the  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:

       Provided further that 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.

62Q

(Other corporate governance requirements)

Details of all material transactions with related parties shall be disclosed along with the report mentioned in clause (a) of this sub-regulation.

Details     of  cyber  security     incidents  or  breaches     or  loss  of     data  or  documents shall  be     disclosed  along  with     the  report  mentioned     in  clause  (a)     of  this  sub-regulation, as may be specified.

The report mentioned in clause (a) of sub-regulation (2) shall be signed either by the compliance officer or the chief executive officer of the HVDLE.