Garden Reach Shipbuilders & Engineers Ltd (GRSE), a government-owned defence shipbuilding company, has received notices from both the National Stock Exchange (NSE) and BSE regarding non-compliance with corporate governance regulations for the quarter ending September 30, 2025.
Details of Non-Compliance
The notices pertain to Regulations 17(1), 18(1), and 19(1)/19(2) under SEBI rules, which require:
- A minimum number of independent directors, including at least one woman independent director
- Proper constitution of audit, nomination, and remuneration committees
Due to these lapses, both NSE and BSE imposed penalties of ₹9,77,040 each, inclusive of GST.
Reason for Lapses
GRSE explained that the delay in appointing independent directors stems from pending government orders, as the company is a Central Public Sector Enterprise under the Ministry of Defence. The absence of these directors prevented the proper formation of key board committees, resulting in technical non-compliance.
The company has requested both exchanges to waive the fines, citing that the appointments are outside its direct control, and emphasized active follow-ups with the Ministry of Defence to ensure timely board composition.
Commitment to Compliance
GRSE reaffirmed its commitment to adhere fully to SEBI regulations and stated that corrective measures are underway to restore the required board structure and operationalize all essential committees promptly.
Summary
GRSE has received penalty notices from NSE and BSE for failing to meet corporate governance norms, primarily due to delays in government-appointed independent directors. Both exchanges imposed fines of ₹9.77 lakh each, and GRSE has sought a waiver while actively coordinating with the Ministry of Defence to rectify the board composition and ensure compliance with SEBI regulations.
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