MANAGEMENT, ADMINISTRATION & CORPORATE GOVERNANCE UNDER THE COMPANIES ACT, 2013**AT

ICAI-NIRCNEW DELHI

**INDEX

COMPANIES ACT,2013MANAGEMENT & ADMINISTRATION GOVERNANCEA paradigm shift for CorporateDefinitionGovernanceProminent InfluencersRoles of director Restrictions for DirectorsRe-enacting the lawStrengthening Board FrameworkLoan to DirectorsEntities StructureNumber of DirectorsRelated Party TransactionCategorization of rules Number of DirectorshipsFraudNoveltiesAppoint & Removal of DirectorsClass Action Suits What's in & outIndependent Dircetor Transparency & DisclosuresDecision making by DirectorCorporate Social ResponsibilityMeetings and Related MatterRole & Responsibility of CACommittees of BoardDuties of Director

**

**A PARADIGM SHIFT FOR THE CORPORATE

**Substantial Part of the Act in form of Rules (418 places it has prescribed word)COMPANIES ACT, 2013

**COMPANIES ACT, 2013

**PROMINENT INFLUENCERS TO THE NEW COMPANY LAW

**Bringing Flexibility & Adoption of Internationally Accepted PracticesSelf Regulation with more disclosuresStringent Punishment for violationEfficient enforcement of lawHealthy Growth of India Inc.Effective protection for different sections of SocietyRE-ENACTING THE NEW COMPANIES LAW

**VARIOUS ENTITIES UNDER THE ACT

**CATEGORIZATION OF RULES

S. NoPrescription ofWith respect to1.Manner/Form of documentsReturn of AllotmentInstrument of Transfer statementsAppealSecretarial Audit ReportDisclosuresQuarterly ReportsDeclarationsCharge DocumentsResignationRegistersReportsTakeover Offer StatementAnnual ReportCSR Policy particularsNoticesIntimationApplicationsLicense to CompanyVerification of DeclarationDocuments of CompanyStatement by BoardAuditors Report

**CATEGORIZATION OF RULES

S. NoPrescription ofWith respect to2Time limit for various processes FilingsVarious processes 3Manner of AdministrationFunds4Conditions to be compliedIssueAppointment of auditorEntering into contractVarious other things 5Details in Special Resolution 6Fees Obtaining copiesRequestsAGM reportAppealsDINSitting feesApplicationRevised Authorized CapitalInspections

**CATEGORIZATION OF RULES

S. NoPrescription ofWith respect to7.CompositionNFRAOther committees, bodies8.Class of CompaniesProcessesCommitteesVarious other things9.Appointment of peopleNFRAIDExperts for SFIOValuerMembers to mediation & conciliation panel10.Procedure of Issue11.LimitsNumber of companiesManagerial remunerationClass actionNumber of directors

**CATEGORIZATION OF RULES

S. NoPrescription ofWith respect to12.Manner of maintenanceBooksAccounts, etc.13.Documents to be annexed or attached14.Information to be furnished15.Manner of certification/authentication16.Salary, allowances, conditions of service

**New Concepts

** Introduction of One Person Company Stipulation of Woman Director Provision of Class Action suits Introduction of Registered Valuer Fast Track Merger for Holding & Subsidiary Companies Cross Border Merger Concept of Dormant Company Further Use of electronic mode: Maintenance of Documents, Records, Registers, Books of Accounts, etc. in e-FormMeeting through Video ConferencingSummary Procedure for Winding up of Company Conciliation panel & special courtsCorporate Social Responsibility

NOVELTIES

**WHATS IN & OUT

**MANAGEMENT & ADMINISTRATION

**DirectorDirector appointed by board of company Section 2(34)

Board of DirectorsOrBoardCollective body of director s of the company Section 2(10)

DEFINITIONS

ROLES OF DIRECTOR **

**MANAGING DIRECTOR Managing DirectorDirector Articles Agreements ShareholdingsBy + Entrusted with substantial powers of management+Occupying position of managing director by whatever name called

**MANAGER ManagerIndividual Subject to Superintendence ControlDirection of the BoD

Having Management of whole of affairs of the Company Includes director occupying position of manager by whatever name called and

**CEOORManaging DirectorCompany SecretaryWhole time DirectorCFO++ORSuch other officer as may be prescribed KEY MANAGERIAL PERSONNEL Key Managerial Personnel

**Whole time DirectorKMPs&If no KMPsAll Directors if no one appointedDirectors appointed as ODOrAny Person Authorized by Board or KMPsAny Person who advices, directs or instructs BoDEvery Director who is aware of ContraventionFor Issue or transfer of SharesShare Transfer AgentRegistrar to IssueMerchant BankerOFFICER IN DEFAULT

STRENGTHENING BOARD FRAMEWORK

**

BOARD FRAMEWORK

**

**

BOARD FRAMEWORK

ADDITIONAL/ALTERNATE/NOMINEE DIRECTOR NOTIFIED - (SECTION 161)

**

WOMAN DIRECTOR & SMALL SHAREHOLDER DIRECTOR **

DIRECTORS OTHER REQUIREMENTS **

NUMBER OF DIRECTORS**

NUMBER OF DIRECTORS (SECTION 149)**

NUMBER OF DIRECTORSHIPS **

**NUMBER OF DIRECTORSHIPS (SECTION 165)

APPOINTMENT & REMOVAL OF DIRECTORS **

APPOINTMENT OF DIRECTOR (SECTION 152)

**

**

APPOINTMENT OF DIRECTOR (SECTION 152)

DISQUALIFICATION & REMOVAL

**

DISQUALIFICATION & REMOVAL

**

DISQUALIFICATION & REMOVAL

**

**

INDEPENDENT DIRECTOR

INDEPENDENT DIRECTOR SECTION 149

**

**

INDEPENDENT DIRECTOR

As per the draft rules :

Name of Independent Directors who are holding directorship as independent director in beyond 10 Listed Co's**

S.No.Name of Independent DirectorNumberName of Companies1R A Shah14Asian Paints Ltd,Atul Ltd,BASF India Ltd,Bombay Dyeing & Manufacturing Company Ltd,Century Enka Ltd2Anil Harish13Ashok Leyland Ltd,Hotel Leela Venture Ltd,Ador Welding LtdUnitech Ltd,Advani Hotels & Resorts (India)3Dilip J Thakkar12Essar Ports Ltd,Garware Polyester LtdPremier Ltd,4R Srinivasan12Graphite India Ltd,Shalimar Paints Ltd,Sundram Fasteners Ltd,Williamson Magor & Company Ltd,TTK Healthcare

**

APPOINTMENT OF DIRECTOR (SECTION 152) . NOTIFIED

APPOINTMENT OF DIRECTOR (SECTION 152) . NOTIFIED

**

**

SITTING FEE OF DIRECTORS SECTION 197

DECISION MAKING BY DIRECTORS

DECISION MAKING BY DIRECTORSBoard meetingResolution by circulation Committee meetings**

BOARD MEETING SECTION 173**

**BOARD MEETINGS: VIDEO CONFERENCING

BOARD MEETING SECTION 173**

MATTERS TO BE DISCUSSED IN BOARD MEETINGS ONLY (SECTION 179)**

**MATTERS TO BE DISCUSSED IN BOARD MEETINGS ONLY (SECTION 179)

**MATTERS TO BE DISCUSSED IN BOARD MEETINGS ONLY (SECTION 179)

**

MEETINGS AND RELATED MATER

**

GENERAL MEETINGS

**REPORT ON AGM(Sec 121)

**Public Company5 members personally present 1000 members 15 members personally present > 1000 members but 5000 members 30 members personally present> 5000 members Private Company2 members personally present

QUORUM FOR MEETINGS

**

PROXIES (SECTION 105)

**Nature of interest/ concernRelativesKMPDirector and ManagerOther InterestFinancial InterestExplanatory Statement in case of special business to specifyLiability in case of non-disclosure or insufficient disclosure in Explanatory Statement Non-disclosure /insufficient disclosurePromoterKMPDirector and ManagerProfitBenefitExplanatory statement to specify shareholding % of Promoters/directors/manager/KMP whose shareholding is not less than 2% of paid up capitalLiable to compensate to Company to the extent of such profit/benefitSTATEMENT TO BE ANNEXED WITH NOTICE SEC 102

**POSTAL BALLOT SECT 110

**RESOLUTIONS REQUIRING SPECIAL NOTICE & CLOSURE OF REGISTER OFMEMBERRESOLUTIONS REQUIRING SPECIAL NOTICE SEC 115CLOSURE OF REGISTER OFMEMBER SECTION 88IS CLOSURE OF REGISTER OF MEMBERS STILL REQUIRED IN TODAYS CONTEXT ?

**

COMMITTEE OF BOARD

NOMINATION AND RENUMERATION COMMITTEE SECTION 178 **

SHAREHOLDERS GRIEVENCE COMMITTEE SECTION 178 **Committee shall consider and resolve the grievances of security holders of the company

For companies > 1000 shareholders, debenture-holders, deposit-holders and other security holders at any time during a FY

Chairperson : non-executive director and other members as may be decided by the Board

AUDIT COMMITTEE SECTION 177**

AUDIT COMMITTEE.VIGIL MECHANISM **Whistle Blower (a non mandatory item as per Cl 49) is now made mandatory, in the name of Vigil Mechanism

DUTIES OF DIRECTORS **

DUTIES OF DIRECTORS- SECTION 166 **

RISK MANAGEMENT **

RISK MANAGEMENT **

GOVERNANCE - ENHANCING STAKEHOLDER PROTECTION**

**GOVERNANCE

**GOVERNANCE

RESTRICTIONS FOR DIRECTORS**

RESTRICTIONS FOR DIRECTORS**

RESTRICTIONS FOR DIRECTORS **

LOAN TO DIRECTORSNOTIFIED SECTION 185**However, Section 186 (Not yet notified) empowers the company to give loan or guarantee or provide security in connection with the loan to any person; hence Directors may also be included here. It prescribes the limit, sanctioning authority and fulfillment of other prescribed terms thereof.

**RELATED PARTY NOTIFIED SECTION 2(76)

**RELATED PARTY NOTIFIED SECTION 2(76)

**Disposing of, or buying, propertyRestriction on non cash transactionAppointment of any related party to any office or place of profitBoard approval required for following RPTsRELATED PARTY TRANSACTION SECTION 188

**FRAUD

**CLASS ACTION SUITS (Sec 245) Suit may be filed by members or depositors or any class of them;If management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interest of the company, its members or depositors;Suit may be filed by more than 100 in number or more than a percentage of the total number of depositors, whichever is less, or any depositor or depositors to whom the company owes such percentage of total deposits of the company.Damages or compensation or any other suitable action from or against The company or its directors for any fraudulent, unlawful or wrongful act or omission.Any expert or advisor or consultant or any other person for any incorrect or misleading statement or for any fraudulent, unlawful or wrongful act or conduct.

**

TRANSPARENCY AND DISCLOSURE

**Registered office, principal business activitiesIndebtednessPromoters, directors, key managerial personnelMeeting of board and committeesPenalty or punishment & details of compoundingother matters as may be prescribed.ANNUAL RETURN - Contents (Sec 92)

**Extract of Annual ReturnDeclaration by Independent DirectorComments/explanation by BOD on Secretarial Audit ReportParticulars of contracts/arrangements with related partyStatement on risk management policyBOD/Committees performance evaluation

BOARDS REPORT

**financial summary/highlightsDetails of directors or KMPDetails relating to DepositsBOARDS REPORT: OTHER MATTERS PRESCRIBED

**DISCLOSURES IN PROSPECTUS (Section 26)

**REPORT ON MANAGERIAL REMUNERATION (Section 197)

**DIRECTORS RESPONSIBILITY STATEMENT (Section 134)PROMOTERS STAKE CHANGES (Section 93)

**PROMOTING WELFAREINITIATIVES

CORPORATE SOCIAL RESPONSIBILITY

**CORPORATE SOCIAL RESPONSIBILITY(SECTION - 135)

**CORPORATE SOCIAL RESPONSIBILITY(SECTION - 135)

**CORPORATE SOCIAL RESPONSIBILITY(SECTION 135)

**CORPORATE SOCIAL RESPONSIBILITY(SECTION 135)

**CORPORATE SOCIAL RESPONSIBILITYAs per the draft rules Net Profit: defined as net profit before tax as per books of accounts and does not include profits from branches outside India

CSR Policy of the company to include:

Specify the projects and programmes that are to be undertaken. Prepare a list of CSR projects/programmes which a company plans to undertake during the implementation year , specifying modalities of execution in the areas/sectors chosen and implementation schedules for the same. CSR projects/programmes of a company may also focus on integrating business models with social and environmental priorities and processes in order to create shared value. CSR Policy of the company should provide that surplus arising out of the CSR activity will not be part of business profits of a company

**CORPORATE SOCIAL RESPONSIBILITYCSR Policy would specify that the corpus would include the following:. a. 2% of the average net profits, b. any income arising there from c. surplus arising out of CSR activities 2% CSR to be computed as 2% of average net profits made by company during every block of 3 years Format prescribed for Annual Report in CSR Initiatives to be included in the Board report CSR activities to be conducted as projects or programmes excluding activities undertaken in normal course of business CSR Committee to prepare transparent monitoring mechanism for implementation Company may conduct CSR activities through trusts, societies, or non profit companies operating in India, not set up by company itself CSR activities to be within India only Companies may collaborate resources with other companies to undertake CSR CSR activities not to benefit only the employees of the company

List of Companies who are required to make CSR contribution**Amount in INR Crores

S.No.Name of CompanyAverage PAT for last 3 Years2 % of Average PAT1Reliance Industries Ltd 20,443.00 408.86 2Oil & Natural Gas Corpn Ltd 20,271.49 405.43 3State Bank of India 11,358.93 227.18 4Tata Consultancy Services Ltd 10,444.10 208.88 5NTPC Ltd 9,018.17 180.36 6Infosys Ltd 8,009.67 160.19 7Bharti Airtel Ltd 7,624.37 152.49 8Coal India Ltd 7,518.51 150.37 9ICICI Bank Ltd 6,647.37 132.95

As per the analysis of the companies listed on Bombay stock exchange it is found that :Average net profit of three financial years of these companies amounts:

Approx INR 3,90,000 croreCSR spending which shall be 2% of such average net profits amounts:Approx INR 7800 croreCYNOSURE TO ALL EYES

**

ROLE OF CA

**

RESPONSIBILITYOF CA

IMPACT OF CHANGE

**

THANK YOUCorporate Professionals Group D-28, South Extension I, New Delhi-110 049Ph: +91.11.40622200; Fax: +91.11.40622201; E: pkvijay@indiacp.com

PAVAN KUMAR VIJAY**

******

******