DUTIES OF DIRECTORS AS HELD BY COURTS AND AS PER COMPANIES BILL 2012

DUTIES OF DIRECTORS -COMPANIES ACT 2013Friday, February 28, 201411Courts held the position of Directors as :AGENTSTRUSTEESEMPLOYEESDUTIES LAID DOWN BY COURTS ARE:HonestyGood faithCareDiligenceDisclosure of interest

Friday, February 28, 20142DUTIES PROPOSED IN COMPANIES ACT 2013- SECTION 166

A director shall act in accordance with the Articles of the company.Act in good faith in order to promote the objects of the company for its benefit & environment.Exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.No direct or indirect conflicts of interest with the company.No undue gain or advantage and if so, he shall be liable to pay an amount equal to that gain to the company. A director of a company shall not assign his office and any assignment so made shall be void.

Friday, February 28, 20143SECTION 184 REGARDING DISCLOSURE OF INTEREST BY DIRECTORSEvery director shall at the first meeting of the Board in which he participates as director At the first meeting of the Board in every financial year Whenever there is any change in the disclosures already made, then at the first Board meeting held after such change, Disclose his concern or interest in any :-Company/ies, bodies corporate,Firms, other association of individuals, which shall include the shareholding, in such manner as may be prescribed.

Friday, February 28, 20144SECTION 184 REGARDING DISCLOSURE OF INTEREST BY DIRECTORSDirectors direct / indirect concern or interest in following contract /arrangement is covered.

Contract /arrangement of the Company :- {1} entered into, or {2} to be entered intoWITH :- {a} a body corporate in which the director holds more than 2% cent shareholding , or where he is a promoter / CEO or {b} a firm or other entity in which, he is a partner, owner or member. His disclosure required at Board meeting where matter discussed. He cannot participate & consequently vote, however, his presence will count for quorum

Friday, February 28, 20145SECTION 184 REGARDING DISCLOSURE OF INTEREST BY DIRECTORS A contract or arrangement entered into by the company in contravention - VOIDABLE at the option of the company.EXCEPTION any contract or arrangement entered into or to be entered into:- {A} between two companies & {B} where any of the directors of the one company or two or more of them together hold/s not more than 2% of the paid-up share capital in the other company.

Friday, February 28, 20146SECTION 188 REGARDING RELATED PARTY TRANSACTIONS CONSENT OF BOARD is required at its meeting for the company to enter into any contract or arrangement with the related party for :- Sale, purchase or supply of any goods or materials.Selling or otherwise disposing of, or buying, property of any kind.Leasing of property of any kind.Availing or rendering of any services.Appointment of any agent for purchase or sale of goods, materials, services or property.Such related party's appointment to any office or place of profit in the company, its subsidiary company or associate company.Underwriting the subscription of any securities or derivatives thereof, of the Company.Significantly, the words related party have been defined first time in the Companies Act 2013 under section 2 {76} which definition has to be invoked at outset. This includes, among others, director, relative, KMP, their firms, private/ public companies, etc. Office or place of profit has been defined - for a director receiving remuneration over & above his entitlement of directors remuneration .Friday, February 28, 20147GENERAL BODY APPROVAL/ NO VOTING BY RELATED PARTY/ JUSTIFICATION/ CONTRAVENTION - SECTION 188Previous approval of the members in a general meeting required by way of passing special resolution. {As may be prescribed by the Central Government}No member who is a related party shall vote on special resolution to approve any contract or arrangement which may be entered into by the company with the related party.

EXEMPT any transactions which are entered into by the company in ordinary course of business

NOT EXEMPT transactions which are not on an arms length basis.

TRANSACTION shall be referred to in the Boards report along with the justification for entering into such contract or arrangement.In case of contravention, can be ratified by Board/ members within 03 {THREE} months. Else VOIDABLE at the option of Board. INDEMNITY by director to company. Company can also RECOVER any loss from director.

Friday, February 28, 201488SECTION 192 REGARDING RESTRICTION ON NON CASH TRANSACTIONS INVOLVING DIRECTORS

Acquisition of assets by director from the company No company shall enter into an arrangement by which a director of company or its holding, subsidiary associate company, or a connected person, acquires assets for consideration other than cash, from the company. Acquisition of assets by the company from director The company is restricted from acquiring assets for consideration other than cash from director or connected person . Members approvalMembers approval is required by way of an ordinary resolution.The notice for of general meeting shall include the PARTICULARS of the arrangement along with the VALUE OF THE ASSETS involved in such arrangement duly calculated by a registered valuer.ContraventionAny arrangement in contravention of the provisions of this section shall be VOIDABLE at the instance of the company with exceptions of the company being indemnified or bonafide transaction for value.

Friday, February 28, 20149CLAUSE 194 REGARDING PROHIBITION ON FORWARD DEALINGS IN SECURITIES OF COMPANY BY DIRECTOR OR KEY MANAGERIAL PERSONNEL This sub clause prohibits the following persons:- Any WTD or any of KMP of a company from buying:- in the company or in its holding / subsidiary/ associate company, a right to call for delivery, or a right to make delivery, OR a right, as he may elect to call for delivery, or to make delivery at a specified price and within a specified time, of a specified number of relevant shares or a specified amount of relevant debentures; The consequences of contravention are that the acquirer shall be liable to surrender the same to the company. Company is also prohibited to give effect to the transfer of the securities, & depository not to record such acquisition .

Friday, February 28, 201410SECTION 195 REGARDING PROHIBITION ON INSIDER TRADING OF SECURITIES.

NO PERSON INCLUDING ANY DIRECTOR OR KEY MANAGERIAL PERSONNEL OF A COMPANY SHALL ENTER INTO INSIDER TRADING OF SECURITIES.

PROHIBITION - AN ACT OF :- subscribing, buying, selling, dealing or agreeing to subscribe, buy, sell or deal in any securities of the company, by any director, or key managerial personnel/, officer if such director etc is reasonably expected to have access to any NON-PUBLIC PRICE SENSITIVE INFORMATION in respect of securities of company. PROHIBITION - AN ACT OF :- giving counsel, guidance or advise to any person, about procuring, directly or indirectly, any non public price sensitive information, or communicating to any person, directly or indirectly, any non public price sensitive information.

EXCEPTION is that this does not apply to any communication required in the ordinary course of business or profession or employment or under any law

Price sensitive information relates, directly or indirectly, to a company and which if published is likely to materially affect the price of securities of the company.

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