action points for listed companies under companies act, 2013

Sl.

No.

Section of

Companies

Act, 2013

Gist of the Provision Present Status of the Company

Transition Period Action Plan

1 12(3)(c) Every Company shall get its

Name, Address of the Registered

Office and the Corporate Identity

Number along with telephone

number, fax number, if any, e-

mail and website address, if any,

printed in all business letter

heads, bill heads, letter papers

and in all notices and official

publications.

At present the Company has not

been printing its Corporate Identity

Number on the business letter

heads, bill heads, and letter papers

and in any notice and official

publications.

No transition period. The

provision is applicable

w.e.f. 1st April, 2014.

The Company has to get new

letter heads printed with its

CIN and the same shall be

displayed in all the mentioned

documents going forward.

2 91(1) The Company may close the

Register of Debenture Holders

and other securities for a period

of 45 days in each year. Registers

can be closed for a period of 30

days at a stretch. The Company

has to intimate the Stock

Exchange seven days prior to the

closure of Register.

Under the Companies Act, 1956,

the provision was voluntary and the

same prevails in the Companies

Act, 2013. If a Listed Company

closes its registers, the same has to

be communicated to the Stock

Exchange and also advertised in

newspaper. At present, Company’s

close their Share Transfer Books at

the time of AGM if it is not closed

anytime during the year.




The Company has to close its

Register of Debenture

Holders and other securities,

at least once at the time of

AGM if not closed anytime

during the year.

3 92(2) The Annual Returns of a Listed

Company shall be certified by a

Company Secretary in Practice.

As per Section 159 of the

Companies Act, 1956, the

Company was required to get its

Annual Return certified by a

Company Secretary in Practice.

Section 92 of the Companies Act,

2013 mandates the same. However,




The Company has to continue

getting its Annual Return

certified from a PCS in Form

MGT-8 as per the provisions

of Section 92.

the certification is to be done in a

specific form which is MGT-8.

4 93 Every Listed Company shall file

with the Registrar a return in

respect to the change in the

number of shares held by

promoters and top ten

shareholders of the Company

constituting 2% or more, within

15 days of such change.

This provision did not exist under

the Companies Act, 1956.

However, the company was

required to make disclosures under

the Substantial Acquisition of

Shares and Takeover Regulations,

2011 and SEBI (Prohibition of

Insider Trading Regulations), 1992.




In addition to the disclosures

made under the SEBI

Regulations, Company has to

now make disclosures about

the change in the shareholding

of Promoters and top ten

shareholders to the ROC.

5 101(1) A General Meeting can be called

by giving a Shorter notice

provided 95% of the members

give their consent to hold the

Meeting.


Company could convene an AGM

at a shorter notice if consent of all

the Shareholders was obtained.


the same has been brought down to

95%.




Before convening a General

Meeting at a shorter notice,

the Company has to ensure

that consent of members

holding 95% of the shares is

received.

6 108 Every Listed Company shall

provide to its Members the

facility to exercise their vote at

General Meetings by electronic

means.

The provision did not exist in the

Companies Act, 1956. However,

Ministry vide its circular,

recommended the option of

providing e-Voting facility as a part

of Green Revolution.




The Company has to tie up

with NSDL or CDSL for

providing e-voting

connectivity and the facility

has to be given to

Shareholders from the

forthcoming Annual General

Meeting.


prepare a report on each Annual

General Meeting to the effect that

the Meeting was convened, held

and conducted as per the

provisions of the Act and file the

same with Registrar of



Companies were filing the report

with Madras Stock Exchange under

Claus 35A of the Listing

Agreement.




The Company has to file a

report with Registrar of

Companies within 30 days

from the conclusion of the

ensuing Annual General

Meeting.

Companies within 30 days from

the date of Annual General

Meeting.

8 129(3) A Company having subsidiaries

and associate companies shall

prepare consolidated accounts in

addition to the stand-alone

financial statements and the same

shall be laid down before the

members.



Listed Companies were mandated

by Clause 32 of the Listing

Agreement to prepare Consolidated

Financial Statements.




Companies having

subsidiaries shall continue

consolidating the accounts of

the subsidiaries with their

own.


appoint an Internal Auditor or a

firm of Internal Auditors who

may or may not be an employee

of the Company and who shall

either be a Chartered Accountant

or a Cost Accountant.



CARO specified the criteria for

appointment of Internal Auditors

and Companies meeting the criteria

specified in CARO appointed an

Internal Auditor.

Six months from the date

of notification of this

Section i.e. w.e.f.

01.04.2014.

If the Company has an

Internal Auditor, it can

continue with the same

Auditor. His appointment

should be approved by the

Board. Companies not having

an Internal Auditor have to

decide on appointing one.


appoint an audit firm as auditor

for one term of five years and not

more than two consecutive terms

or an individual for one term of 5

years.

The provision in regard to rotation

of Auditors did not exist in the

Companies Act, 1956.

3 years from the

commencement of this

Act i.e. w.e.f. 01.04.2014.

Companies in which the Audit

Firm has been doing the audit

can be appointed for a period

of one year at a time and can

continue to audit the accounts

of the Company till the

Financial Year 2016-17. The

last appointment shall be in

the AGM held during the year

2017.

11 149 (1) Every Listed Company shall have

at least one Woman Director on

the Board of the Company.



One year from the date of

commencement of the Act

i.e. w.e.f. 01.04.2014 but

according to Listing

Companies not having a

Woman Director on their

Board have to appoint one on

or before 30.09.2014.

Agreement the transition

period is limited up to

30.09.2014.

12 149(3) Every Company shall have a

Resident Director who has stayed

in India for a period of 182 days

in Previous calendar Year.






Companies not having a

Resident Director on their

Board have to appoint one at

the earliest.

13 149 (4) Every Listed Company shall have

at least one-third of the total

number of Directors as

Independent Directors and

Managing Director, Whole-time

Director & Nominee Director

shall not be treated as

Independent Director.



Clause 49 of the Listing Agreement

mandated Listed Companies to

have an optimum combination of

Executive and Non-Executive

Directors with at least 50% of the

Board comprising of Independent

Directors.



i.e. w.e.f. 01.04.2014 but

according to Listing

Agreement the transition

period is limited up to

30.09.2014.

Companies following the

composition as per Clause 49

of the Listing Agreement can

continue to do so and the

companies which do not have

the optimum combination as

per the Act and Listing

Agreement can take

appropriate steps to set right

the same.

14 165 A Director can hold directorship

in maximum of 20 Companies

out of which he can be a Director

of 10 Public Companies.

These numbers includes Private

Companies & Alternate

Directorship also.


Companies Act, 1956, person was

allowed to act as Director in

maximum 15 companies and while

reckoning the limit of 15, Private

Companies, Section 25 Companies,

Unlimited Companies and Alternate

Directorships were excluded.


commencement of this

Act.

Companies having Directors

who are holding Directorships

in more than 20 companies in

total and 10 public companies

have to request them to

choose the Companies on

which they wish to be on the

Board and relinquish the

office of Director in other

Companies.

15 167(b) Every Director shall mandatorily

attend one Board Meeting out of

all the Board Meetings held

during twelve calendar months.

As per the provisions of the

Companies Act, 1956, a Director

could absent himself from all the

Meetings of the Board after seeking

Leave of Absence.




Companies have to ensure

that the Directors attend at

least one Meeting of the

Board out of all the Meetings

held during 12 calendar

months.

16 168 The resigning Director should file

the e-form DIR 11 with the ROC

within 30 days from the date of

resignation.

The provision was not specified

under the Companies Act, 1956 and

therefore the Company was not

required to follow it.




The Company has to ensure

that the resigning Director

intimates his resignation to

ROC in the specified form.

17 173(2) The Board Members has the right

to participate in the Board

meetings through Video

Conferencing or Audio Visual

means.



Ministry vide its circular, provided

for the option of attending meetings

through Video Conferencing or

Audio Visual means as a part of

Green Revolution.




The Company has the option

to offer video conferencing

for attending the Board

Meeting.

18 177(1) Every Listed Company shall

constitute an Audit Committee

which should consist of a

minimum of three Directors and

majority of the Directors should

be independent.

As per the provisions of Section

292A of the Companies Act, 1956,

every Public Company having a

paid up share capital of Rs. 5

Crores or more was required to

constitute an Audit Committee.

Also Clause 49 of the Listing

Agreement mandated every Listed

Company to constitute an Audit

Committee.



i.e. w.e.f. 01.04.2014.

Companies shall continue

with the existing Audit

Committee and alter the terms

of reference in accordance

with the provisions of the Act

and in accordance with the

revised Clause 49, once the

same becomes effective w.e.f.

01.10.2014.


establish a Vigil Mechanism for

Directors and employees to report

genuine concerns such as fraud,

mal-practices to the Audit

Committee of the Company.

No such provision existed in the



provided companies to set up a

Whistle Blower Policy although the

same was not mandatory.

No transition period

specified. The provision is

applicable w.e.f. 1st April,

2014.

Companies already having a

Whistle Blower Policy can

continue with the same.

Companies which have not

adopted the Vigil Mechanism

shall frame a policy at the

earliest in accordance with the

provisions of this section.The

same should be uploaded in

the website of the Company

for Listed Companies


constitute a Nomination and

Remuneration Committee which

shall comprise of three or more

non-executive Directors out of

which at least one-half shall be

Independent Directors.




provided companies to set up a

Remuneration Committee although

the same was not mandatory.




2014.

Companies already having a

Remuneration Committee can

continue with the same after

altering the name and

companies not having the

same shall constitute one at

the earliest in accordance with

the provisions of this section.

However, Companies have to

make sure that all directors in

the remuneration committee

are non-executive directors in

accordance with the revised

Listing Agreement

21 178(3&4) Every Listed Company shall

formulate a policy relating to the

remuneration of Directors, Key

Managerial Personnel and other

employees and recommend the

same to the Board.



companies having an Remuneration

Committee were formulating the

same.




2014.

Companies having a

Remuneration Policy can

continue with the same after

aligning it in accordance with

the provisions of the section

and Companies not having a

Remuneration Policy shall

constitute one at the earliest.

22 185 The company cannot grant loans,

book debts, guarantees to any of

its Directors or any other persons

in whom the Directors are

interested.


Companies Act, 1956, Companies

were allowed to give loans to its

Directors after obtaining prior

approval of Central Government.




2014.

Company has to ensure that it

does not grant any loans to its

Directors. The Company can

extend loan facility to its

Managing Director and

Whole-time Director if it is

part of the service extended

by the Company to all its

employees and pursuant to

any scheme approved by the

Members by way of special

Resolution.

23 186 Companies cannot make

investment through more than 2

layers of Investment Companies.

As per the provisions of Section

372A of the Companies Act, 1956,

companies were allowed to make

investments up to the limit of 60%

of paid up share capital and free

reserves or 100% of free reserves

after obtaining Board’s approval.

The Company could make

investments in excess of the

specified limits after obtaining the

approval of Shareholders in

General Meeting by way of Special

Resolution.




2014.

The Company should ensure

that it does not make

investments beyond two

lawyers of Investment

Companies.

24 196(2) A Company cannot appoint its

MD, WTD or Manager for a term

exceeding 5 Years at a time

Section 269 of the Companies Act,

1956 governed the appointment of

Managing Director and it did not

clearly specify the term for

appointment.




2014.

Company has to ensure and

limit the term of Managing

Director and Whole-time

Director to five years at a

time.

25 203 Every Listed Company shall have

the following Key Managerial

Personnel:

1. Managing Director, or

CEO or Manager and in

their absence a Whole-

time Director;

2. Company Secretary; and

3. Chief Financial Officer






2014.

Company shall ensure and

appoint persons to the

designated positions at the

earliest.


annex with its Board’s Report a

Secretarial Audit Report given by

a Company Secretary in whole

time practice.

The provision providing for

Secretarial Audit did not exist in

the Companies Act, 1956.

However, Companies voluntarily

opted for Secretarial Audit.

There is lack of clarity

and few companies are

complying with the

provision of this section

w.e.f. the financial year

ended on 31.03.14 and

few companies are taking

a stand that it shall be

applicable w.e.f. the

financial year ending on

31.03.15.

Management of the Company

shall have to take a call on the

applicability of the provisions

relating to Secretarial Audit

and accordingly comply with

the provisions of this section.

Reach Us

About SAS PARTNERS;

Over 10 years of market presence and serving more

than 200 businesses from diversified industries

Divisions : Regulatory Advisory & Support division

and Transaction & Consulting division.

Versatile professional team over 25 professionals

comprising of Company Secretaries, Legal, Finance,

and Business Professionals

Deep rooted entrepreneurial, professional and

regulatory relations

ISO 9001:2008 Certification by TUV SUD

Regulatory Advisory & Support division

Corporate Secretarial

Capital Markets

Foreign Exchange Management

Intellectual Asset Management

Due Diligences

Soy Joseph , ACS, ACIS (UK) BL

Sr Partner – Corporate Regulatory

+91 (0) 988421 2845

[email protected]

Sony George Mathew, MBA, LLB, ACS

Partner – Corporate Regulatory

+91 (0) 98846 56382

[email protected]

Chennai Indira Devi Complex, II Floor, # 20 Gopalakrishna Street, Pondy Bazaar, T. Nagar, Chennai – 600 017, TN, India. RMS Apts, Door No 16, 3rtd Floor, No. 12, Gopalakrishna St, Pondy Bazaar, T Nagar, Chennai- 600 017, TN, India

Tel: +91 44 2815 2673/ 2815 2674, Email: [email protected]

Bangalore

C – 1, Le Chateau Apartments, No. 90, Infantry Road, (Opposite to Shafina Plaza) Bangalore – 560 001 Tel: +91 98846 56382 Email: [email protected]

action points for listed companies under companies act, 2013

Law