Board Notes Exchange Fines for Board Composition and Committee Non-Compliance; Waiver Sought

BSE and NSE levied fines for non-compliance on Board composition, Board meeting quorum and constitution of Audit, NRC, Stakeholder Relationship and Risk Management committees for the quarter ended June 2026.

Wed 30 Sep 2026

BSE Fine - Basic Amount

Rs. 11,63,000

BSE Fine - GST

Rs. 2,09,340

Non-Compliance Quarter

Quarter ended June 2026

Payment Deadline

Within 15 days

Previous Waiver Period

March 2021 to December 2025

What happened

The exchanges flagged that for the quarter ended 30th June 2026 the company did not meet SEBI LODR requirements on Board composition, quorum of Board meetings, and the constitution of the Audit, Nomination and Remuneration, Stakeholder Relationship and Risk Management committees. Fines were imposed.

Fine break-up as advised by BSE (basic fine plus GST at 18%)

• Regulation 17(1), Board composition: 455000 basic, 81900 GST
• Regulation 17(2A), quorum of Board meetings: 40000 basic, 7200 GST
• Regulation 18(1), audit committee: 182000 basic, 32760 GST
• Regulation 19(1)/19(2), nomination and remuneration committee: 182000 basic, 32760 GST
• Regulation 20(2)/(2A), stakeholder relationship committee: 152000 basic, 27360 GST
• Regulation 21(2), risk management committee: 152000 basic, 27360 GST
• Total: 1163000 basic and 209340 GST

Board's response

The matter was placed before the Board on 07th September 2026. The Board noted the non-compliances and the fines, and desired that follow-up be made with the appointing authority, the Ministry of Railways, to expedite appointment of the requisite number of Independent Directors.

The Board also noted that the exchanges have been requested to waive the fine, as the appointment of directors is beyond the company's control. It further noted that in earlier instances of similar non-compliance, NSE and BSE had already waived fines for the period March 2021 to December 2025.

Why it arises

Being a Government Company, the power to appoint directors vests with the President of India through the Ministry of Railways. The company states it has no control over such appointments.

Procedural points in the exchange communication

• Fines including GST are payable within 15 days, failing which the exchange may initiate action relating to freezing of the promoter's entire shareholding and other securities in the promoter's demat account.
• A second consecutive quarter of non-compliance with Regulation 17(1), 18(1) or 27(2) can lead to transfer to the Z group and liability for suspension of trading in equity shares.

What investors may watch

Whether the Ministry of Railways appoints the required Independent Directors, and whether the exchanges grant the requested waiver as in past instances.

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