LISTED COMPANY COMPLIANCES
Series-30
2 (52) “Listed Company” means a company which has any of
its securities listed on any
Recognized stock
exchange;
23. (1)A Public Company may issue securities—
(c) Through a rights issue or a bonus issue in
accordance with the provisions of this
Act and in case of a listed company or a
company which intends to get its securities listed also with the provisions of
the Securities and Exchange Board of India Act, 1992 and the rules and
regulations made there under.
Close
Register of Members:
Section- 91
91. (1) A company may close the register of members
or the register of debenture holders or the register of other security holders
for any period or periods not exceeding in the aggregate forty-five days in
each year, but not exceeding thirty days at any one time, subject to giving of
previous notice of at least seven days or such lesser period as may be
specified by Securities and Exchange Board for listed companies or the companies
which intend to get their securities listed, in such manner as may be
prescribed.
Annual Return:
Section-92
Section-92
(2) The annual return, filed by a listed company
or, by a company having paid up share capital of Rs. 10 crore or more and
turnover of Rs. 25 crore or more, shall be certified by a company secretary in
practice in the prescribed form, stating that the annual return discloses the
facts correctly and adequately and that the company has complied with all the
provisions of this Act.
Change in Shareholding of Promoters and Top 10
Shareholders:
As per SECTION 93 of
the Companies Act, 2013 and Rule 13 of
Companies (Management and Administration) Rules, 2014
Every
listed company is required to file a return with Registrar of Companies in e-form MGT-10 with respect to change of 2% or more
(whether in value or volume) in shareholding of Promoters and Top ten
Shareholders of the company within 15 days of such change.
E-VOTING:
As per SECTION 108 of the
Companies Act, 2013 and the Rule 20 of Companies (Management and
Administration) Rules, 2014
Every
listed company or a company having not less than one thousand shareholders,
shall provide to its members facility to exercise their right to vote at
general meetings by electronic means.
Further,
as per Clause 35B of listing agreement, as amended by SEBI vide its Circular
dated April 17, 2014
Every
listed company shall provide e-voting facility to its shareholders, in respect
of all shareholders' resolutions, to be passed at General Meetings and those
shareholders, who do not have access to e-voting facility shall be provided
with postal ballot facility.
CONCLUSION:-
e-voting and postal ballot facility is mandatorily required to be given to the
shareholders in respect of any general meeting resolution.
MAINTENANCE OF RECORDS IN ELECTRONIC FORM
As per Section 120 of the Companies Act, 2013 and Rule 27 & 28
Companies (Management and Administration) Rules, 2014
Every
listed company or a company having
not less than one thousand shareholders, debenture holders and other security
holders, shall maintain its records in electronic form which shall be in a
readable format but cannot be tampered after affixing digital signature wherever
required as per provisions of the Companies Act, 2013.
Record
means: “Any register, index agreement, memorandum, minutes as any other
document required by the Act or the rules made there under to be kept by a
company."
Further
a transitional phase of 6 months has been given for converting the existing
records into e-forms.
The
Managing Director, Company Secretary or any other director or officer of the
company as the Board may decide shall be responsible for the maintenance and
security of electronic records.
CONCLUSION:- All records of the company are mandatorily
required to be maintained in electronic form (readable but non re-writable).
REPORT ON ANNUAL GENERAL MEETING:
SECTION-121.
(1) Every listed public company shall prepare in
the prescribed manner a report on each annual general meeting including the
confirmation to the effect that the meeting was convened, held and conducted as
per the provisions of this Act and the rules made there under.
(2) The company shall file with the Registrar a
copy of the report referred to in subsection (1) within 30 days of the
conclusion of the annual general meeting in
e-form MGT-15.
DIRECTOR
REPORT:
As per Section
134 of the Companies Act, 2013 and Rule8 (4) of Companies
(Accounts) Rules, 2014
Every listed company
shall include, in the report by its Board of directors, a statement indicating
the manner in which formal annual evaluation has been made by the Board of its
own performance and that of its committees and individual directors.
(e) the directors, in
the case of a listed company, had laid down internal financial controls to be
followed by the company and that such internal financial controls are adequate
and were operating effectively.
As per
Section 197 of Companies Act, 2013 and Rule 5 of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014
Every
listed company shall disclose in the Board’s report the ratio of the
remuneration of each director to the median remuneration of the employees of
the company for the financial year and various other details like number of
permanent employees on the rolls of company, comparison of the remuneration of
the Key Managerial Personnel against the performance of the company etc.
MODE OF SENDING FINANCIAL STATEMENTS
As per Section 136 of the Companies Act, 2013 and
Rule 11 of Companies (Accounts) Rules, 2014:
Every listed company
may send the financial statements:-
By Electronic Mode:-
To such members whose
shareholding is in dematerialized format and whose email Ids are registered
with Depository for communication purposes;
where Shareholding is
held otherwise than by dematerialized format, to such members who have
positively consented in writing for receiving by electronic mode; and
By dispatch of physical copies through
any recognized mode of delivery as specified under section 20 of the Act, in
all other cases.
Provided also that a listed company shall also
place its financial statements including consolidated financial statements, if
any, and all other documents required to be attached thereto, on its website, which is
maintained by or on behalf of the company:
Provided also that every company having a
subsidiary or subsidiaries shall,—
(a) place
separate audited accounts in respect of each of its subsidiary on its website,
if any;
(b) provide a copy of separate audited financial
statements in respect of each of its
subsidiary, to any shareholder of the company who
asks for it.
(2) A company shall allow every member or trustee
of the holder of any debentures issued by the company to inspect the documents
stated under sub-section (1) at its registered office during business hours.
(3) If any default is made in complying with the
provisions of this section, the company shall be liable to a penalty of
twenty-five thousand rupees and every officer of the company who is in default
shall be liable to a penalty of five thousand rupees.
INTERNAL
AUDITOR
As per Section 138 of the Companies Act, 2013 and
the Companies (Accounts)Rules, 2014
Every listed company shall have
an internal auditor, who may be a Chartered Accountant, Cost Accountant or any
other Professional (i.e. Company Secretary). The scope, functioning,
periodicity and methodology for conducting the internal audit shall be decided
by Audit Committee in consultation with the internal auditor.
Further a transitional period
of 6 months has been given to comply with this provision.
ROTATION OF AUDITORS
As per Section
139 of the Companies Act, 2013 and the Companies (Audit and
Auditors) Rules, 2014
No listed company shall appoint or re-appoint—
a)
An individual as
auditor for more than one term of five Consecutive years; and
I.
An individual auditor who has completed his term under clause (a) shall not be
eligible for re-appointment as auditor in the same company for five years from
the completion of his term;
II. An audit firm
which has completed its term under clause (b), shall not be eligible for
re-appointment as auditor in the same company for five years from the
completion of such term:
Further, A transitional period of 3 years has been
allowed for the compliance with this provision.
APPOINTMENT
OF WOMAN DIRECTOR
As per Section 149(1) of the Companies Act, 2013
and Rule 3 of Companies(Appointment and
Qualification of Directors, Rules 2014
The following class of companies shall appoint at least one
woman director-
Every listed company;
a)
every other public company having –
b)
paid–up share capital of one hundred crore
rupees or more; or
c)
turnover of three hundred crore rupees or more:
Further a transitional period
of 1 year has been given to comply with this provision and for a newly
Incorporated Company these requirements get triggered after 6 months.
APPOINTMENT
OF INDEPENDENT DIRECTOR
As per Section 149 of the Companies Act, 2013 and
Rule 4 of Companies(Appointment and Qualification
of Directors, Rules 2014
The
following class of companies shall appoint Independent Directors-
(i)
every listed company;
(ii)
every other public company having -
(a)
paid–up share capital of ten crore rupees or
more; or
(b)
turnover of hundred crore rupees or more:
(c)
the Public Companies which have, in aggregate,
outstanding loans, debentures and deposits, exceeding fifty crore rupees
Further a transitional period of 1 year has been given to
comply with this provision
APPOINTMENT
OF SMALL SHAREHOLDER’S DIRECTOR
As per Section 151
and Rule 7(1) of Companies (Appointment and
Qualification ofDirectors) Rules, 2014
A listed company, may upon
notice of not less than one thousand small shareholders or one-tenth of the
total number of such shareholders, whichever is lower, have a small
shareholders’ director elected by the small shareholders.
OBTAIN CERTIFICATE OF
INDEPENDENCE FROM INDEPENDENT DIRECTORS
As
per Section 149(7) of the Companies
Act, 2013 and theCompanies(Appointment and
Qualification of Directors, Rules 2014
Every independent director
shall at the first meeting of the Board in which he participates as a director
and thereafter at the first meeting of the Board in every financial year or
whenever there is any change in the circumstances which may affect his status
as an independent director, give a declaration that he meets the criteria of
independence as provided in sub-section (6).
CONSTITUTION
OF AUDIT COMMITTEE
As per Section 177
and Rule 6 of Companies (Meetings of Board and
its Powers)Rules, 2014
The following class of
companies shall constitute an Audit Committee: -
(i)
every
listed company;
(ii)
every
other public company having -
(a)
paid–up share capital of ten crore rupees or
more; or
(b)
turnover of hundred crore rupees or more:
(c)
the Public Companies which have, in aggregate,
outstanding loans, debentures and deposits, exceeding fifty crore rupees
Composition: -
Minimum 3 directors with majority independent, furtherprovided that majority
including its Chairperson shall be persons with ability to read and understand,
the financial statement.
Transitional phase for
Reconstitution: - As per Section 177(3), EveryAudit Committee
of a company existing immediately before the commencement of this Act shall,
within one year of such commencement, be reconstituted in accordance with
sub-section (2).
(9)
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 insuch manner as may be prescribed.
CONSTITUTION
OF NOMINATION & REMUNERATION COMMITTEE
As per Section 178
of Companies Act, 2013 and Rule 6 of Companies (Companies(Meetings
of Board and its Powers) Rules, 2014
Companies
as aforesaid, shall constitute a Nomination &
RemunerationCommittee
Composition: -
Three or more non-executive directors out of which notless than one-half be
independent directors. The chairperson of the company (whether executive or
non-executive) may be appointed as a member of the Nomination and Remuneration
Committee but shall not chair such Committee.
CONSTITUTION
OF STAKEHOLDERS RELATIONSHIP COMMITTEE
As per Section 178of
Companies Act, 2013
The
Board of Directors of a company which consists of more than one thousand
shareholders, debenture-holders, deposit-holders and any other security holders
at any time during a financial year shall constitute a Stakeholders
Relationship Committee consisting of a chairperson who shall be a non-executive
director and such other members as may be decided by the Board.
APPOINTMENT
OF KEY MANAGERIAL PERSONNNEL
As per Section 203 and Rule 8 of Companies
(Appointment and Remuneration ofManagerial Personnel) Rules, 2014
Every
listed company and every other public company having a paid-up share capital of
ten crore rupees or more shall have whole-time key managerial personnel
SECRETARIAL
AUDIT
As per Section 204
of the Companies Act, 2013 and Companies
(Appointmentand Remuneration of Managerial Personnel) Rules, 2014
Every listed Company shall
annex with its Board’s report, a secretarial audit report, given by a company
secretary in practice, in form MR-3 and the Board shall explain in full
in its Board report any qualification or observation made by the secretarial
auditor.
Further,
following Companies also have to comply with these provisions:-
(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.
OTHER
IMPACT AREAS:-
A. Notice of Board meeting:-
As
per Section 173 of the Companies Act,
2013 at least 7 days notice in writing is required to be given to every
director of the company.
B. Quorum for Annual
General Meeting
As per Section 103
of the Companies Act, 2013 following shall be the quorum
for all public Companies:-
|
S.
No.
|
No. of
Members
|
Quorum
|
|
1.
|
Upto 1000
|
5 Members
|
|
2.
|
Above 1000
upto 5000
|
15
Members
|
|
|
Above 5000
|
30
members
|
C. Maximum Number of
Directorships
As per Section 165
no person, after the commencement of this Act, shall hold office as a director,
including any alternate directorship, in more than 20 companies at the same
time.
Provided that the maximum number of public
companies in which a person can be appointed as a director shall not exceed 10.
For this purpose, holding or subsidiaries of
private companies shall be taken as public.
Further a company may, by special resolution, specify any
lesser number of companies in which a director of the company may act as
directors.
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