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Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
Action Points for Listed Companies under Companies Act, 2013
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Action Points for Listed Companies under Companies Act, 2013

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Write up on the Action Points for Listed Companies under Companies Act, 2013 is prepared by SAS Partners Team to give a bird eye view of all the important provisions which a Listed Company has to take …

Write up on the Action Points for Listed Companies under Companies Act, 2013 is prepared by SAS Partners Team to give a bird eye view of all the important provisions which a Listed Company has to take into consideration in the Board Meeting of the first quarter of the Financial Year 2014-15 or subsequent Board Meeting. The write up shall be helpful for Professional, Corporates and Students at large. SAS Partners Team has considered the provisions which were applicable as on date and due care has been taken to prepare the write up.

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  • 1. 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. No transition period. The provision is applicable w.e.f. 1st April, 2014. 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, No transition period. The provision is applicable w.e.f. 1st April, 2014. The Company has to continue getting its Annual Return certified from a PCS in Form MGT-8 as per the provisions of Section 92.
  • 2. 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. No transition period. The provision is applicable w.e.f. 1st April, 2014. 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. Under the Companies Act, 1956, Company could convene an AGM at a shorter notice if consent of all the Shareholders was obtained. Under the Companies Act, 2013, the same has been brought down to 95%. No transition period. The provision is applicable w.e.f. 1st April, 2014. 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. No transition period. The provision is applicable w.e.f. 1st April, 2014. 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. 7 121 Every Listed Company shall 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 The provision did not exist in the Companies Act, 1956. However, Companies were filing the report with Madras Stock Exchange under Claus 35A of the Listing Agreement. No transition period. The provision is applicable w.e.f. 1st April, 2014. The Company has to file a report with Registrar of Companies within 30 days from the conclusion of the ensuing Annual General Meeting.
  • 3. 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. The provision did not exist in the Companies Act, 1956. However, Listed Companies were mandated by Clause 32 of the Listing Agreement to prepare Consolidated Financial Statements. No transition period. The provision is applicable w.e.f. 1st April, 2014. Companies having subsidiaries shall continue consolidating the accounts of the subsidiaries with their own. 9 138 Every Listed Company shall 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. The provision did not exist in the Companies Act, 1956. However, 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. 10 139 Every Listed Company shall 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. The provision did not exist in the Companies Act, 1956. 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.
  • 4. 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. The provision did not exist in the Companies Act, 1956. No transition period. The provision is applicable w.e.f. 1st April, 2014. 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. The provision did not exist in the Companies Act, 1956. However, 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. One year from the date of commencement of the Act 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. As per Section 275 of the 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. One year from the date of 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. No transition period. The provision is applicable w.e.f. 1st April, 2014. Companies have to ensure that the Directors attend at least one Meeting of the Board out of all the Meetings held during 12 calendar
  • 5. 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. No transition period. The provision is applicable w.e.f. 1st April, 2014. 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. The provision did not exist in the Companies Act, 1956. However, Ministry vide its circular, provided for the option of attending meetings through Video Conferencing or Audio Visual means as a part of Green Revolution. No transition period. The provision is applicable w.e.f. 1st April, 2014. 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. One year from the date of commencement of the Act 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. 19 177(9) Every Listed Company shall 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 Companies Act, 1956. However, Clause 49 of the Listing Agreement 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
  • 6. the website of the Company for Listed Companies 20 178(1) Every Listed Company shall 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. No such provision existed in the Companies Act, 1956. However, Clause 49 of the Listing Agreement provided companies to set up a Remuneration Committee although the same was not mandatory. No transition period specified. The provision is applicable w.e.f. 1st April, 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. No such provision existed in the Companies Act, 1956. However, companies having an Remuneration Committee were formulating the same. No transition period specified. The provision is applicable w.e.f. 1st April, 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. As per Section 295 of the Companies Act, 1956, Companies were allowed to give loans to its Directors after obtaining prior approval of Central Government. No transition period specified. The provision is applicable w.e.f. 1st April, 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
  • 7. 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. No transition period specified. The provision is applicable w.e.f. 1st April, 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. No transition period specified. The provision is applicable w.e.f. 1st April, 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 The provision did not exist in the Companies Act, 1956. No transition period specified. The provision is applicable w.e.f. 1st April, 2014. Company shall ensure and appoint persons to the designated positions at the earliest.
  • 8. 26 204 Every Listed Company shall 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.
  • 9. 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 soy@saspartners.com Sony George Mathew, MBA, LLB, ACS Partner – Corporate Regulatory +91 (0) 98846 56382 sony@saspartners.com 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: chennai@saspartners.com Bangalore C – 1, Le Chateau Apartments, No. 90, Infantry Road, (Opposite to Shafina Plaza) Bangalore – 560 001 Tel: +91 98846 56382 Email: bangalore@saspartners.com

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