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CS- PROFESSIONAL- SECRETARIAL AUDIT, COMPLIANCE MANAGEMENT

AND DUE DILIGENCE

CHAPTER 1- SECRETARIAL AUDIT AND SECRETARIAL STANDARDS

BACKGROUND AND CONCEPT

Secretarial Audit is a process to check compliance with the provisions of various laws and

rules/regulations/procedures, maintenance of books, records by professional to ensure that the

company has complied with the legal and procedural requirements and also followed due

processes. It is essentially a mechanism to monitor compliance with the requirements of

stated laws and processes. A Company Secretary in Practice has been assigned the role of

Secretarial Auditor in section 2(2)(c)(v) of The Company Secretaries Act 1980, which is the

only statute in the country, carving out ‘Secretarial Audit’ as an area of practice.

The Ministry of Corporate Affairs has already released Corporate Governance Voluntary

Guidelines, 2009 from the year 2009. The preamble to Guidelines states that “These

guidelines provide for a set of good practices which may be voluntarily adopted by the Public

companies. Private companies, particularly the bigger ones, may also like to adopt these

guidelines.”

SECRETARIAL AUDIT UNDER COMPANIES ACT, 2013

As per Sub-Section 204(1) of the Companies Act, 2013 every listed company and a company

belonging to other class of companies as may be prescribed shall annex with its Board’s

report made in terms of sub-section (3) of section 134, a secretarial audit report, given by a

company secretary in practice, in such form as may be prescribed.

Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 prescribes the other class of companies as under:

a) Every public company having a paid-up share capital of 50 crore rupees or more; or

b) Every public company having a turnover of 250 crore rupees or more.

Further the said rules provided format and the Company is required to submit Secretarial

Audit Report under Annexure A in form MR. 3.

NEED FOR SECRETARIAL AUDIT

1. Complexity of laws- There are various laws i.e. Company Law, Competition Law,

Economic Laws, Securities and Capital Market Laws, Consumer Protection Laws,

Industrial and Labour laws, Pollution Control Laws, Foreign Exchange Legislation,

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etc. which implementation is required thoroughly audit to check their compliances

otherwise would be resulted in various punitive actions.

2. Mismanagement and misuse of public funds by several companies.

3. Ensure effective enforcement of laws and to avoid violations of statutory

compliances.

Clause 49 Sub-clause I(C) (iii) of the Listing Agreementsays that “The Board shall

periodically review compliance reports of all laws applicable to the company,

prepared by the company as well as steps taken by the company to rectify instances of

non-compliances.” Therefore, all listed companies required a system for reporting to

the Board compliances with laws applicable to them. Hence, a Legal Compliance

Reporting System is necessary.

4. Effective tool to boost confidence amongst Directors, Promoters and Key Managerial

Personnel.

5. Hence, Secretarial Audit is an effective tool for corporate compliance management. It

helps ensure timely corrective measures when non-compliance is detected.

BENEFICIARIES

1. Promoters

Affairs of the Company regulated in accordance with requirements of laws.

2. Management/KMP

Perform the delegated duties and responsibility competently, effectively and

efficiently.

3. Directors/Non-executive directors

Directors not in-charge of the day-to-day management of the company are not likely

to be exposed to penal or other liability on account of non-compliance with law.

4. Government authorities/regulators

Reduce the burden of the law-enforcement authorities and enhance governance and

level of compliance.

5. Investors

Reliability that the company affairs are conducted according to the applicable legal

compliances

6. Other Stakeholders

Financial Institutions, Banks, Creditors and Consumers are enabled to measure the

law abiding nature of Company management.

SCOPE OF SECRETARIAL AUDIT

The scope of reporting is very broad and the Company Secretary in practice has to ensure compliances of following statutory provisions in addition to Secretarial standards issued by

The Institute of Company secretaries of India.

1. The Companies Act, 2013 and rules made thereunder

2. Listing Agreement

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3. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made

thereunder;

4. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

5. Foreign Exchange Management Act, 1999 and the rules and regulations made

thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment

and External Commercial Borrowings;

6. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):

I. The Securities and Exchange Board of India (Substantial Acquisition of

Shares and Takeovers) Regulations, 2011; II. The Securities and Exchange Board of India (Prohibition of Insider Trading)

Regulations, 1992; III. The Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2009; IV. The Securities and Exchange Board of India (Employee Stock Option Scheme

and Employee Stock Purchase Scheme) Guidelines, 1999;

V. The Securities and Exchange Board of India (Issue and Listing of Debt

Securities) Regulations, 2008;

VI. The Securities and Exchange Board of India (Registrars to an Issue and Share

Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing

with client;

VII. The Securities and Exchange Board of India (Delisting of Equity Shares)

Regulations, 2009; and

VIII. The Securities and Exchange Board of India (Buyback of Securities)

Regulations, 1998;

7. Any other laws as may be applicable specifically to the company.

PROCESS TO THE SECRETARIAL AUDIT

1. Appointment of Secretarial Auditor

The appointment and remuneration of Secretarial

Auditor decided in the meeting of the Board of

Directors of the Company- Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014 read

with section 179 of the Companies Act, 2013.

3. Assignment

A letter of engagement may be issued by the

Company to the Secretarial Auditor and Secretarial

Auditor may accept the engagement letter. After the

formal acceptance the Secretarial Auditor shall

commence audit. The Secretarial Auditor shall

examine various documents, conduct meetings with

seniors and KMP and findings shall discuss with the

Management.

2. Communication to earlier incumbent

Whenever a new Secretarial Auditor is appointed in

place of the existing Secretarial Auditor, he/she

should communicate the appointment to the earlier

incumbent in writing by registered/speed post.

4. Submission of Secretarial Audit Report

The Secretarial Audit Report shall be submitted in

prescribed format MR.3. The report of Board of

Directors prepared under Section 134(3) of the Act

shall include explanations or comments by the Board

on every qualification, reservation or adverse remark

or disclaimer made by the company secretary in

practice in his secretarial audit report. (Sub-Section 3

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of Section 204 of the Act). The report is addressed to

the members but submitted to the Board of Directors

of the Company.

Thus the scope of the Secretarial Audit is depending upon volume of the Company and the

Secretarial Audit should begin with the study of applicable laws to the Company.

REPORTING WITH QUALIFICATION

The qualification, reservation or adverse remarks, if any, shall be stated by the Secretarial

Auditor at the relevant places in his/her report. It is recommended that the qualifications,

reservations or adverse remarks of Secretarial Auditor, if any, should be stated in Bold or

Italic format in the Secretarial Audit Report.

If the Secretarial Auditor is unable to form any opinion on any matter, he / she shall state that

he/she is unable to form an opinion on that matter and the reasons thereof. If the scope of

work required to be performed, is restricted on account of limitations imposed by the

company or on account of circumstantial limitations (like certain books or papers being in

custody of another person or Government Authority) the Report shall indicate such

limitations. If such limitations are so material as to render the Secretarial Auditor incapable

of expressing any opinion, the Secretarial Auditor should state that:

“In the absence of necessary information and records, he/she is unable to report

compliance(s) by the Company.”

PROFESSIONAL RESPONSIBILITY AND PENALTY FOR INCORRECT AUDIT

REPORT

Any failure or lapse on the part of Secretarial Auditor in issuing a Secretarial Audit Report

may not only attract penalty for incorrect report and disciplinary action for professional or

other misconduct under the provisions of the Company Secretaries Act, 1980 but also make

him liable for any injury caused to any person due to his/her negligence in issuing the

Secretarial Audit Report.

In Girdhari Lal Gupta v. D.N. Mehta the Supreme Court has construed the expression ‘a

person in charge and responsible for the conduct of the business of the company’ as to mean

the person in overall control of the day-to-day business of the company. This ruling has been

followed in a number of subsequent decisions- Key Managerial Personnel [Section 2(51) of

the Companies Act, 2013] for company’s offences.Besides under the Companies Act, 2013

section 447 and section 448 cast harsh penalties for false statements and fraud respectively.

SECRETARIAL STANDARDS

Secretarial Standards are the guidelines formulating for uniform compliance by the

Companies. In accordance with the requirement of the Section 118(10) of the Companies

Act, 2013 every company shall observe secretarial standards with respect to general and

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Board meetings. The rationale of mandating the compliance of non-financial standard would

ensure that all companies adopt uniform practice in convening the meetings, agenda items

which should be placed before the board and finalisation of minutes etc. Further, it is

generally assumed that the compliance and good governance would be ensured if the

companies follow the said Secretarial Standards effectively.

SECRETARIAL STANDARDS ISSUED BY ICSI

1. Meetings of the board of directors

2. General meetings

3. Dividends

4. Registers & records

5. Minutes

6. Transmission of shares & debentures

7. Passing resolution by circulation

8. Affixing common seal

9. Forfeiture of shares

10. Board’s report

BOARD RESOLUTION FOR APPOINTMENT OF SECRETARIAL AUDITOR

“REOLVED THAT pursuant to the provisions of Section 204(1) of the Companies Act,

2013 and rule 9 of the Companies (Appointment and Remuneration personnel) Rules 2014

and other applicable provisions, if any, of the Companies Act 2013,Consent of the Board is

be and is hereby given for appointment of M/s. ABC, Company Secretaries as Secretarial

Auditors of the Company and Directors of the Company be and is hereby authorized to fix

the remuneration from time to time in consultation with Audit Committee.”

“RESOLVED FURTHER THAT the engagement letter has been placed before the Board

and the same has been signed by the Chairman of the Board for the purpose of identification

of appointment of M/s. ABC, Company Secretaries as Secretarial Auditors of the Company.”

“RESOLVED FURTHER THAT Board of Directors of the Company be and is hereby

authorized to file necessary forms with Registrar of Companies and to do all such act, deeds

and things as may be considered necessary to give effect to the above said resolution.”

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CHAPTER 2- CHECK LISTS FOR SECRETARIAL AUDIT

CHECK LIST UNDER THE COMPANIES ACT, 2013

Documents/Registers/

Records verify

What to check

Disclosures � Whether address of the registered office id displayed at

the registered office and its local offices as per section 12

of the Act

� Whether any notice, advertisement, official publication,

business letter, bill head or letter paper contain a

prominent statement of amount of authorised, subscribed

and paid-up capital or not

� Whether CIN along with telephone number, fax number, if

any, e-mail and website addresses, if any, printed in all its

business letters, billheads, letter papers and in all its

notices and other official publications as per section 12 of

the Act

Memorandum and

Articles of Association

of the Company

Alteration of Memorandum of Association

� Whether Company has passed special resolution under

Companies (Management and Administration) Rules, 2014

and filed form MGT. 14

� Whether Company has changed its name with the approval

of Central Government

� Whether Company is received or not fresh certificate of

incorporation in form INC. 25 under Companies

(Incorporation) Rules, 2014

� Whether Central Government permission is obtained for

change of registered office of the Company from one state

to another state

Alteration of Articles of Association of the Company

� Whether Articles of Association of the Company is altered

and form MGT. 14 is filed for special resolution

� Whether form INC. 27 is filed for conversion of private

limited company into public limited company and vice

versa. Also check the order of competent authority, if

obtained, is filed with ROC in form INC. 27 within 15 days

from the date of receiving order.

� Whether provision for entrenchment has been made by

alternation of Articles with the consent of all the members

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by passing special resolution

Issue of securities Private Placement/Rights Issue/Bonus Issue under section 42 and

Companies (Prospectus and Allotment of Securities) Rules, 2014

� Offer made to the persons is not exceeding 200 persons

� Previous allotment is not pending

� The allotment is effected by special resolution and

justification of price is mentioned in explanatory statement

� Offer letter is in form PAS. 4 and records is maintained in

PAS. 5. The offer letter is to be filed with ROC within 30

days from the circulation of offer letter

� Share Application money is to be kept in separate account

for allotment/repayment

� The return of allotment is to be filed within 30 days in from

PAS. 3

� Whether share certificates are issued within 2 months in

case of allotment of shares and in case of debentures within

6 months

Preferential Allotment of shares/debentures under section 62 of the

Act

� Whether list of persons is made for offer

� Whether previous allotment is pending

� Whether Articles of Association of the Company authorised

for preferential allotment by special resolution

� Whether valuation report is available from Registered

Valuers for determination of issue price

� Whether offer letter is filed with ROC within 30 days from

the date of circulation

� The return of allotment is to be filed within 30 days in form

PAS. 3

� Whether share certificates are issued within 2 months in

case of allotment of shares and in case of debentures within

6 months

� Whether allotment is completed within 12 months and if not

whether another special resolution was passed or not

Issue of bonus shares

� Whether Articles of Association authorised to do so

� Whether partly paid-up shares are made fully paid-up

� Whether it has been recommendation of Board of Directors

authorised in General Meeting

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� Whether default is made for various all statutory dues

� The return of allotment is to be filed within 30 days in form

PAS. 3

Issue of Sweat Equity shares

� Whether issue is authorised by special resolution. Check

date of commencement of business of the company and

passing of special resolution is not within one year.

� Ensure that the issue is not exceeding 15% of the paid-up

share capital of the Company or shares of the issue value of

Rs. 5 crore, whichever is higher

� Ensure that Sweat equity shares register is maintained in

form SH. 3

Buy-Back of shares

� Ensure that the Articles of Association is authorised buy-

back of shares and if not special resolution is passed under

section 14 of alteration of AOA.

� Ensure that MGT. 14 is filed with ROC within 30 days for

passing of special resolution

� Ensure that buy-back of shares is 10% of the total paid-up

capital and free reserves if the company is as per Board

resolution

� Ensure that Letter of Offer is filed in form SH. 8 and

declaration of solvency is filed in form SH.9 as per section

68 of the Act

� Ensure that the register is maintained in form SH. 10 and

the return is filed within 30 days of completion of buy-back

in form SH. 11

Employee Stock Option

� Section 62 read with Rule 12 of the Companies (Share

Capital and Debenture) Rules, 2014 governed the

procedure

� Ensure that Company has passed special resolution under

section 62 of the Act and filed with ROC in form MGT. 14

� Check the compliance regarding with explanatory

statement to the notice, disclosure of issue of ESOS under

Directors’ Report

� Maintain Register of Employee Stock Option under form

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SH. 6

Debentures

� Appoint Debenture Trustee before issue of prospectus

� Execute Debenture Trust Deed in form SH. 12 within 60

days from allotment of debentures

� Create Debenture Redemption Reserve account

Issue and Redemption of preference shares

� Check Articles of Association of the Company authorised to

the Company and also contained terms and conditions to

issue and redemption of preference shares

� Special resolution is passed to that effect

Transfer/Transmission

of shares

Transfer of shares

� Observe the provisions of Articles of Association of the

Company regarding with this

� Ensure that the instrument is received by the Company in

form SH. 4

� Examine all transfer of shares is included in Annual Return

of the Company

� Ensure that Register of transfer is completed till date

� Transmission of shares is effected through production of

succession certificate/probate/letter of administration. The

Articles of Association of the Company provided the

procedure regarding with this

Deposits � Ensure that the deposit is accepted which maturity date is

not within 6 months and beyond 3 years from the date of

acceptance or renewal

� Ensure that the circular is issued by registered post

acknowledgement due/speed post/ electronic mode in form

DPT. 1 for invitation of deposits

� Ensure that the Company is entered into the contract for

deposit insurance and executed deposit trust deed on form

DPT. 2

� Ensure that return of deposit is file With ROC in form DPT.

3

Creation of Charges � Ensure that form CHG. 1 and CHG. 9 (for debentures) is

filed within 30 days with ROC

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� Ensure that CHG. 4 is filed for satisfaction of charges

� If the charge is not created within the time ensure that the

application for condonation of delay has been filed with

Central Government in form CHG. 8

� Ensure that the order of the Central Government regarding

with condonation of delay is filed with ROC in form INC.

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Board of Directors

Meeting and Minutes

Meetings

� Ensure number of Board Meetings held as per section 173

� Ensure notice sent as per requirement and attendance

register is maintained of the meeting

� Check following resolution passed in the meeting-

1. Make call

2. Buy-Back of securities

3. Issuing securities

4. Borrowing monies

5. Investments of funds

6. Granting loans/giving guarantees/providing securities

7. Approving financial statements and Board Report

8. Diversifying business

9. Approving amalgamation/merger

10. Takeover of a company

11. Making political contribution

12. Appointing or removing KMP

13. Appointing Internal Auditor and Secretarial Auditor

14. Taking note of disclosure of interested directors

15. Buying and selling investments above 5% of the paid-up

capital and free reserves

16. Inviting public deposits and changing terms

17. Approving periodical financial results

Important Matters required special resolution-

� Inclusion entrenchment clause in AOA- section 5 (4)

� Change of registered office of the company outside local

limits- section 12(5)

� Alteration of MOA- section 13(1)

� Alteration of Articles- section 14

� Variation in terms of contractor objects in prospectus-

section 27(1)

� Issuance of GDRs- section 41

� Variations of shareholders rights- section 48(1)

� Issuance of sweat equity shares- section 54

� Further issue of share capital- section 62

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� Reduction of share capital- section 66

� Restriction on purchase by company or giving of loans by it

for purchase of its shares- section 67(3)

� Buy-back of securities- section 68

� Issue of debentures- section 71

� To keep registers, returns etc. at any other place than

registered office of the Company where more than one-

tenth of members reside- section 94

� Removal of Auditor before expiry of his term- section 140

� Re-appointment independent director after expiry of his

term of five consecutive years- section 149

� Restrictions of powers of the Board- section 180

� Loan to directors- section 185

� Loan and investment by company beyond limit- section 186

� Related party transaction/entering into contracts or

arrangement- section 188

� Appointment of managerial personnel- section 196

� Sick company amalgamation- section 262

� Ensure that proper arrangement made for video conference

meeting

� CheckSecurity systems and integration procedures of the

meetingand Electronic recording mechanism

� Ensure the notice of the meeting is sent as per section 173

of the Act and stated options available to Directors to

participate through electronic mode

� It is necessary the Chairman of the meeting shall take roll

call before the starting of discussion in the meeting in terms

of name, location of a Director and has received agenda for

the purpose

� In the meeting

a. Chairman verify the quorum of the meeting

b. Participating Directors had given their consents by digital

signature

c. The Chairman made roll call when there is objection on any

motion

d. The Chairman announced summery of the meeting

� After completion of the meeting the proceedings entered in

minutes book

� The matters which cannot dealt through electronic mode

a. Approval of Annual Financial Statements

b. Approval of Directors’ Report

c. Approval of the prospectus

d. Audit committee meetings for considerations of accounts

e. Approval in case of

merger/amalgamation/demerger/acquisition/takeover

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1. Following class of companies shall have Woman Director-

section 149(1)

• Every Listed Company

• Public Company having paid-up share capital of Rs. 100

crore or more

• Public Company having turnover of Rs. 300 crore or

more

2. Every Company shall have at least one Director Resident in

India for total period not less than 182 days in previous

calendar year- section 149(3)

3. Every Listed Company shall have one-third of the total

number of Directors as Independent Directors- section

149(4)

4. Following class of Public Companies shall have two

Independent Directors- section 149(4)

• Public Company having paid-up share capital 10 crores

or more

• Public Company having turnover of Rs. 100 crores or

more

• Public Company having outstanding aggregate loans

and deposits exceeding Rs. 50 crores

5. A separate schedule is prescribed in Schedule IV as code

for Independent Director

6. Minimum number of four meetings shall held every year

with not more than 120 days between two meetings- section

173(1)

7. A provision is enabled for Board meeting through video

conferencing- section 173(2)

8. Following class of companies shall have Audit Committee-

section 177(1)

• All Public Companies having Paid-up share capital 10

crores or more

• All Public Companies having turnover of Rs. 100 crores

or more

• All Public Companies having outstanding loan and

deposits exceeding Rs. 50 crores

9. Following class of companies shall have Nomination and

Remuneration Committee- section 178(1)

• All Public Companies having Paid-up share capital 10

crores or more

• All Public Companies having turnover of Rs. 100 crores

or more

• All Public Companies having outstanding loan and

deposits exceeding Rs. 50 crores

10. Stakeholder Relationship Committee shall be formed which

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Company have more than 1000 shareholders with a Non-

Executive Director as Chairman- section 178(5)

11. Every Listed Company is to be disclosed the ratio of

remuneration of Directors to Median Salary of Employee-

section 197(12)

12. Listed Companies and Public Companies having paid-up

share capital 10 crores or more shall have following Whole-

Time KMP- section 203(1)

Managing Director/CEO/Manager or Whole-Time Director

Company Secretary

Chief Financial Officer

13. Every Listed Company or such class or classes of

companies, as may be prescribed, shall establish a vigil

mechanism for directors and employees to report genuine

concerns in such manner as may be prescribed-177 (9) and

(10)

14. Financial year can only be from April-March, existing

companies has to align within 2 years of the commencement

of the Act- section 2(41)

15. Maintenance of books of account in electronic mode-

128(1)

16. Corporate Social Responsibility provision is mandatory for

following companies- section 135

• Having Net Worth of Rs.500 crore or more; or

• Turnover of Rs.1000 crore or more or

• A net profit of Rs.5 crore or more during the any

financial year

• Every financial year at least 2% of the average net

profits of last 3 years to be spent on CSR activities,

otherwise reason for not spending to be given in

Board's Report

17. If the Board feels that the financials or the Report do not

comply with the applicable provisions of section 129 or

134, they may revise the aforesaid in respect of any of the

three preceding financial years after obtaining approval of

the Tribunal- section 131

18. Quorum of the Annual General Meeting- section 103

If the Members are

1000-5 Members personally present

1000 -5000-15 members personally present

5000-30 members personally present

Minutes of meeting of Board of Directors

� Check present directors name included in minutes

� Check all the pages of the minutes book consecutively

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numbered and initialled by the Chairman

� Check relevant SS is complied with

� The minute books of general meetings, and the minutes

books of the Board and committee meetings are maintained

in the custody of the company secretary or any director duly

authorised by the board.

Annual General Meeting

� Check the provisions of section 96 read with the Companies

(Management and Administration) Rules, 2014, listing

agreement are complied with

� Check first AGM is held within a period of nine months

from the closing of the first financial year of the Company

� Check that subsequent meeting held within six months from

the end of the financial year

� Check meeting was not held on national holiday

� Check notice was given to every member of the Company,

Auditor and Director of the Company

REGISTERS/DOCUMENTS UNDER COMPANIES ACT, 2013

Register of Members-Pursuant to Section 88 (1) (a) and Rule 3 of the Companies

(Management and Administration) Rules, 2014

Register of members in form MGT.1

Debenture- holders or security holders in formMGT.2

Entries in the register will be made in 7 days from the date of approval of allotment, Transfer of

share, debentures or any other securities.

Place of keeping of registers- The registers shall be maintained at the registered office of the

company. The company can keep the register at any other place by passing Special Resolution

within the city, town or village in which the registered office is situated or any other place in

India in which more than one-tenth of the total members entered in the register of members

reside.

Foreign Register-

A company may, if so authorized by its Articles, keep in any country outside India, a part of the

Register of Members orDebenture Holders orSecurity Holders or Beneficial Owners.

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The company shall, within 30 days from the date of the opening of any foreign register, file with

the Registrar notice of the situation of the office where such register is kept in form MGT.3.

• A foreign register shall be deemed to be part of the company’s Principle Register.

• Foreign register shall be maintained in the same format as the principal register.

• Transmit to its registered office in India a copy of every entry in any foreign register

within 15 (fifteen) days after the entry is made; and

• Keep at such office a duplicate register of every foreign register duly entered up from

time to time.

• Every such duplicate register shall, for all the purposes of this Act, be deemed to be part

of the principal register.

• The company may discontinue the keeping of any foreign register; and thereupon all

entries in that register shall be transferred to some other foreign register kept by the

company outside India or to the principal register.

• A foreign register shall be open to inspection and may be closed, and extracts may be

taken there from and copies thereof may be required, in the same manner, mutatis

mutandis, as is applicable to the principal register, Exception: No need to give

advertisement in News Paper.

Inspection of register- The Registers are open for inspection by any Member, Debenture-Holder,

other security holder or beneficial owner, during Business Hour Without payment of any

fees.Inspection by any other person on payment of such fees as may be specified in the Articles

of Association of the company but not exceeding Rs. 50/- (Fifty) for each inspection.

Memorandum and Articles of Association

Preserve permanently at its registered office as per section -15

Copies of MOA & AOA given to Members- A company shall, on being so requested by a

memberSend to him within 7 days of the request on payment of such fess as prescribed in the

Companies (Register offices and Fees) Rules, 2014.

Record of Private Placement

Section 42 read with Rule 14 of Companies Act (Prospectus and Allotment of Securities) Rules,

2014. Record of Private Placement is to be maintained under PAS.5 at its Registered Office.

Register of Renewed and Duplicate Share Certificate

The register shall be maintained under form SH.2 permanently. Register shall be kept at the

registered office of company or at such other place where the Register of Members is kept.

Register of sweat equity shares

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The Register shall be maintained under form SH. 3.

Register of Transfer and Transmission- section 56

The Company shall maintain Separate Register for Transfer & Transmission of Equity/

Preference Shares.

Register of employee stock option- Section 62(1) (b) Read with Rule 12 of Companies

(Share Capital and Debentures) Rules, 2014

This Register shall be maintained in form SH.6.

Register of Security Buy- Back-(Section -68 (9) read with Rule 17 of Companies (Share

Capital and Debentures) Rules, 2014

The Register shall be maintained in form SH.10.

Register of Deposit- (Section 73 and 76 read with rule 14 of Companies (Acceptance of

Deposit) Rules, 2014

Company shall maintain register of deposit accepted or renewed.Register shall be kept at the

registered office of Company and maintain for at least 8 years. Entry in register shall be made

within 7 (Seven) days from the date of issuance of the receipt duly authenticated by the director

& Secretary of the company or person as may be authorized by the Board.

Register of Charges- (Section 85 read with Rule-10 of company (Registration of charges)

Rules, 2014

The Register shall be maintained in form CHG.7 permanently. Register shall be kept at the

registered office of Company.Entry in register shall authenticated by the director & Secretary of

the company or person as may be authorized by the Board.

Minutes of the Meeting

1. Board Meetings

2. General Meeting of Members

3. Meetings of Each Committee- CSR Committee, Audit Committee, Nomination and

Remuneration Committee, Shareholders Relationship Committee and other Ad-hoc

Committees

• Entry in the Minute Book shall be made within 30 days from the conclusion of the

meeting.

• Each page of Book shall be initialled and last page of Book shall be dated and signed

by:

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Chairman of Meeting with in the period of 30 Days

In case of Inability of Chairman, by a Director Duly authorized by Board for purpose

• Board & Committee Meeting

Chairman of said Meeting

Chairman of Next Succeeding Meeting

Maintenance and inspection of documents in electronic form

Every ListedCompany or a company having not less than One Thousand Shareholders,

Debenture Holders and Other Security Holders, shall maintain its records in electronic

form.Existing Companies, data shall be converted from physical mode to electronic mode within

6months from the date of notification of provisions.

Register of Directors & Key Managerial Personnel- (Section 170(1) and Rule 17 of the

Companies (appointment and Qualification of Directors) Rules, 2014)

Every company shall keep at registered office a register containing such particulars of Directors

and Key Managerial Personnel which shall include the details of the securities held by each of

them in the Company-

• Its Holding

• Subsidiary

• Subsidiary of companies Holding Company

• Subsidiary of Companies Associate Companies

Register of Loan, Investment and Guarantee

Every company Giving Loan or giving a guarantee or providing security or making an

acquisition under this section shall keep a register in form SH.12 which shall contain particulars

of:

• Loan

• Guarantee Given

• Security provided

• Investment made

Register of Investment made by a Company held not in its name(Section 187(2) and (d)

The General rule is that all the investment made by a company shall be made and held in its

name.Where Investment of a company is not held by it in its name but in the name of a

depository, the company shall maintain a register in form MBP.3 at its registered office which

shall contain such particulars as prescribed, namely, the investment in shares and other securities

chronologically.

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Register of Contract or Arrangements in which Directors are interested

Every company shall maintain one or more registers in form MBP. 4 and shall enter therein the

particulars of-

• Company or Companies or Bodies Corporate, Firms or Other Association of individuals,

in which any Director has any concern or interest, as mentioned under sub-section (1) of

section 184

• Contracts Or Arrangements with a Body Corporate or Firm or other entity as mentioned

under sub-section (2) of section 184, in which any Director is, directly or indirectly,

concerned or interested; and

• Contracts or Arrangements with a Related Party with respect to transactions to which

section 188 applies.

The Register shall be placed before next meeting of Board and signed by all Directors present at

meeting.

Keeping Contract of Service with Managing or Whole-Time Director

Every Public Company shall keep at its Register Office-

• Copy of Contract of service, if any, entered into with a Managing or Whole-Time

Director

• Where the Contract is not in writing, a written memorandum setting out its terms

• Copy of the contract of service or Memorandum shall be open for inspection by the

member without fee

RULES AND eFORMS

RULES

eFORMS

The Companies (Specification of

definitions details) Rules, 2014

-

The Companies (Incorporation)

Rules, 2014

INC.1- Application for Reservation of Name

INC. 2- One Person Company- Application for

Incorporation

INC. 3- One Person Company- Nominee Consent Form

INC. 4- One Person Company- Change in

Member/Nominee

INC. 5- One Person Company- Intimation of exceeding

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threshold

INC. 6- One Person Company- Application for Conversion

INC. 7- Application for Incorporation of Company (Other

Than OPC)

INC. 12- Application for grant of License under Section 8

INC. 18- Application to Regional Director for Conversion

of Section 8 Company into Company of any other kind

INC. 20- Intimation to Registrar of revocation/ Surrender

of License issued under Section 8

INC. 21- Declaration Prior to the Commencement of

Business or Exercising Borrowing Powers

INC. 22- Notice of Situation or Change of Situation of

Registered Office

INC. 23- Application to Regional Director for Approval to

Shift the Registered Office from One State to Another

State or from jurisdiction of One Registrar to Another

Registrar within the same State

INC. 24- Application for Approval of Central Government

for Change of Name

INC. 27- Conversion of Public Company into Private

Company or Private Company into Public Company

INC. 28- Notice of Order of the Court or any other

Competent Authority

The Companies (Prospectus and

Allotment of Securities) Rules,

2014& Companies (Issue of

Global Depository Receipts)

Rules, 2014

PAS. 2- Information Memorandum

PAS. 3- Return of Allotment

The Companies (Share Capital

and Debentures) Rules, 2014

SH. 1- Share Certificate

SH.2- Register of Renewed and Duplicate Share

Certificates

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SH. 3- Register of Sweat Equity Shares

SH. 4- Securities Transfer Form

SH. 5- Notice for Transfer of Partly Paid Securities

SH. 6- Register of Employee Stock Options

SH. 10- Register of Shares or other Securities Bought-Back

SH. 12- Debenture Trust Deed

SH. 13- Nomination Form

SH. 15- Certificate of Compliance in respect of Buy-Back

of Securities

SH. 7- Notice to Registrar of any alteration of share capital

SH. 8- Letter of Offer

SH. 9- Declaration of Solvency

SH. 11- Return in respect of buy-back of securities

Companies (Acceptance of

Deposits) Rules, 2014

DPT. 1- Circular or circular in the form of advertisement

inviting deposits

DPT. 2- Deposit Trust Deed

DPT. 3- Return of Deposits

DPT. 4- Statement regarding deposits

The Companies (Registration of

charges) Rules, 2014

CHG. 7- Register of charges

CHG. 1- Application for Registration of creation,

modification of charge (other than debentures) including

particulars of modification charge by Asset Reconstruction

Company in terms of SARFAESI Act, 2002

CHG. 4- Particulars of satisfaction of charge thereof

CHG. 6- Notice of appointment or cessation of receiver or

manager

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CHG. 8- Application to Central Government for extension

of time for filing particulars of registration of

creation/modification/satisfaction of charge OR for

rectification of omission or misstatement of any particular

in respect of creation/modification/satisfaction of charge

CHG. 9- Application for registration of creation or

modification of charge for debentures or rectification of

particulars filed in respect of creation or modification of

charge for debentures

The Companies (Management and

Administration) Rules, 2014

MGT. 1- Register of Members

MGT. 2- Register of Debenture holders/other securities

holders

MGT. 3- Notice of situation or change of situation or

discontinuation of situation, of place where foreign register

shall be kept

MGT. 4- Declaration by the registered owner of shares

who does not hold the beneficial interest in such shares

MGT. 5- Declaration by the beneficial owner who holds or

acquires beneficial interest in shares but whose name is not

entered in the register of members

MGT. 6- Return to the Registrar in respect of declaration

under section 89 received by the Company

MGT. 7- Annual Return

MGT. 8- Certificate by a Company Secretary in Practice

MGT. 9- Extract of Annual Return

MGT. 10- Changes in shareholding position of promoters

and top ten shareholders

MGT. 11- Proxy form

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MGT. 12- Polling Paper

MGT. 13- Report of Scrutinizer(s)

MGT. 14- Filing of resolutions and agreements to the

Registrar

The Companies (Declaration and

payment of Dividend) Rues, 2014

DIV. 5- Statement of amounts credited to Investor

Education and Protection Fund

The Companies (Accounts) Rules,

2014

AOC. 1 – Statement containing salient features of the

financial statement of subsidiaries/ associate companies/

joint ventures

AOC. 2- Form for disclosures of particulars of

contracts/arrangements entered into by the Company with

related parties referred to in sub-section (1) of section 188

of the Companies Act, 2013 including certain arm length

transactions under third proviso thereto

AOC.3- Abridged financial statements

AOC. 4- Form for filing financial statement and other

documents with the Registrar

The Companies (Audit and

Auditors) Rules, 2014

ADT. 1- Notice of appointment of Auditor by the

Company

ADT. 2- Application for removal of auditor(s) from

his/their office before expiry of term

ADT. 3- Notice of resignation by the Auditor

ADT. 4- Report to the Central Government

The Companies (Appointment and

qualification of Directors) Rules,

2014

DIR. 1- Application for inclusion of name in the databank

of Independent Directors

DIR. 2- Consent to act as a Director of a Company

DIR. 3- Application for allotment of Director Identification

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Number

DIR. 4- Verification of Applicant for application for DIN

DIR. 5- Application for surrender of Director Identification

Number

DIR. 6- Intimation of change in particulars of Director to

be given to the Central Government

DIR. 7- Verification of Applicant for change in DIN

particulars

DIR. 8- Intimation by Director

DIR. 9- Report by the Company to Registrar

DIR. 10- Form of application for removal of

disqualification of Directors

DIR. 11- Notice of resignation of a Director to the

Registrar

DIR. 12- Particulars of appointment of Directors and the

Key Managerial Personnel and the changes among them

The Companies (Meetings of

Board and its powers) Rules, 2014

MBP. 1- Notice of Interest by Director

MBP. 2- Register of loans, guarantee, security and

acquisition made by the Company

MBP. 3- Register of Investments not held in its own name

by the Company

MBP. 4- Register of contracts with related party and

contracts and Bodies etc. in which Directors are interested

The Companies (Appointment and

Remuneration of Managerial

Personnel) Rules, 2014

MR. 3- Secretarial Audit Report

MR. 1- Return of Appointment of Key Managerial

Personnel

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MR. 2- Form of application to the Central Government for

approval of appointment or reappointment and

remuneration or waiver for excess or over payment to

Managing Director or Whole-Time Director or manager

and commission or remuneration to Directors

Companies (Inspection,

Investigation and Inquiry) Rules,

2014

-

- -

- -

- -

-

- -

- -

The Companies (Authorised to

Register) Rules, 2014

URC. 1- Application by a Company for Registration under

Section 366

URC. 2- Advertisement giving notice about Registration

under Part I of Chapter XXI

The Companies (Registration of

Foreign Companies) Rules, 2014

FC. 1- Information to be filed by Foreign Company

FC. 2- Return of alteration in the documents filed for

registration by Foreign Company

FC. 3- Annual Accounts along with the list of all principal

places of business in India established by Foreign

Company

FC. 4- Annual Return of a Foreign Company

FC. 5- Nomination by IDR Holder

The Companies (Registration

Offices and Fees ) Rules, 2014

GNL. 1- Form for Filing an Application with Registrar of

Companies

GNL. 2- Form for submission of documents with the

Registrar

GNL. 3- Particulars of person(s) or Key Managerial

Personnel charged or specified for the purpose of sub-

clause (iii) or (iv) of clause 60 of section 2

Nidhi Rules, 2014 NDH.1- Return of Statutory Compliances

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NDH. 2- Application for extension of time

NDH. 3- Half Yearly Return

CORPORATE SOCIAL RESPONSIBILITY- SECTION 135

• Legal Sanctity

- Section 135 of the Companies Act, 2013

- Schedule VII of the Companies Act, 2013

- Companies (Corporate Social Responsibility Policy) Rules, 2014

• Constitution of Corporate Social Responsibility (CSR) Committee

Section 135 of the Act provides that Every Company having following criteria shall

constitute Committee called CSR Committee

- Net worth of Rs. 500 crores or more

OR

- Turnover of Rs. 1000 crores or more

OR

- Net profit of Rs. 5 crores or more

During any financial year of the Company

• Composition of the Committee

- Three or more Directors out of which at least one director shall be an independent

director. Therefore, there should be minimum three directors and out of which one

director shall independent director.

• Responsibility of CSRC

- To formulate and recommend to the Board of Directors CSR policy

- To ensure that the Company spends in every financial year at least two per cent of the

average net profits of the company made during the three immediately preceding

financial years on CSR activities

- To explain the reasons for non- spending and explanation shall be given in Directors’

Report

- Monitor the CSR policy from time to time

• The committee shall formulate the policy, including activities specified in schedule

VII as amended as follows:

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- Eradicating hunger, poverty and malnutrition, promoting preventive health care and

sanitation and making available safe drinking water

- Promoting education, including special education and employment enhancing

vocation skills especially among children, women, elderly, and the differently abled

and livelihood enhancement projects

- Promoting gender equality, empowering women, setting up homes and hostels for

women and orphans; setting up old age homes, day care centres and such other

facilities for senior citizens and measures for reducing inequalities faced by socially

and economically backward groups

- Ensuring environmental sustainability, ecological balance, protection of flora and

fauna, animal welfare, agro forestry, conservation of natural resources and

maintaining quality of soil, air and water

- Protection of national heritage, art and culture including restoration of buildings and

sites of historical importance and works for art; setting up public libraries; promotion

and development of traditional arts and handicrafts

- Measures for the benefit of armed forces veterans, war widows and their dependents

- Training to promote rural sports, nationally recognised sports, Paralympic sports and

Olympic sports

- Contribution to the Prime Minister’s National Relief Fund or any other fund set up by

the Central Government for socio-economic development and relief and welfare of

the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and

women

- Contributions or funds provided to technology incubators located within academic

institutions which are approved by the Central Government

- Rural development projects

- Slum Area Development

• Highlights

- Board of Directors’ report shall disclose the composition of the CSR committee

- Contribution of any amount directly or indirectly to any political party shall not be

considered CSR activity

- CSR activities shall display on its website

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- The company shall give preference to the local area and areas around it where it

operates

- Net profit is to be calculated according to section 198 of the Act

APPLICABILITY OF OTHER LAWS

Taxation laws Labour laws Environmental laws other laws

Income Tax Act, 1961 The Factories Act,

1948

Air (Prevention and

Control of Pollution)

Act, 1981

Foreign Exchange

Management Act

Wealth Tax Act Industrial Dispute

Act

Water (Prevention and

Control of Pollution)

Act, 1974

Foreign Trade

(Development and

Regulation) Act, 1992

Central Excise Act Payment of Wages

Act

The Noise (Regulation

and Control) Rules

2000

Indian Contract Act

Custom Act Payment of Bonus

Act

The Environment

(Protection) Act 1986 Sale of Goods Act

Service Tax Act Workmen

Compensation Act, Petroleum Act and Rules

Sales Tax Act including

Value Added Tax Act of

2003

Shop And

Establishment Act

The Urban Land (Ceiling

&Regulation) Act

Respective State Sales

Tax Acts

Weekly Holiday Act,

1942 Transfer of Property Act

Professional Tax Employees State

Insurance Act, 1948 Motor Vehicles Act

Education Cess

Employees PF &

Misc. Provisions

Act, 1954

Essential Commodities

Act

Research and

Development Cess Act,

1991

Payment of Gratuity

Act

Information and

Technology Act

The Boiler Act and Gas

Cylinders Act and Rules

Contract Labour

(Regulation &

Abolition Act) 1970

Right to Information Act

Maternity Benefit

Constitution of India

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Act, 1961

Respective State

Govt. Factories

(Control of Major

Industrial Accident

Hazard) Rules 2002

Micro, Small And

Medium Enterprises

Development Act, 2006

and many other Acts