SIDDHARTH ACADEMY

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 Boards
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 3. Assignment

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.
2. Communication to earlier incumbent
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.
4. Submission of Secretarial Audit Report

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.
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 companys 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. Boards 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/ What to check

Records verify
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 Alteration of Memorandum of Association

Articles of Association
of the Company
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 Transfer of shares

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 Meetings

Meeting and Minutes

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 companys 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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 SIDDHARTH ACADEMY

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) INC.1- Application for Reservation of Name
Rules, 2014
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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 SIDDHARTH ACADEMY

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 PAS. 2- Information Memorandum
Allotment of Securities) Rules,
2014& Companies (Issue of PAS. 3- Return of Allotment
Global Depository Receipts)
Rules, 2014
The Companies (Share Capital SH. 1- Share Certificate
and Debentures) Rules, 2014
SH.2- Register of Renewed and Duplicate Share
Certificates

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 SIDDHARTH ACADEMY

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 DPT. 1- Circular or circular in the form of advertisement
Deposits) Rules, 2014 inviting deposits
DPT. 2- Deposit Trust Deed
DPT. 3- Return of Deposits
DPT. 4- Statement regarding deposits
The Companies (Registration of CHG. 7- Register of charges
charges) Rules, 2014
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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 SIDDHARTH ACADEMY

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 MGT. 1- Register of Members
Administration) Rules, 2014
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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 SIDDHARTH ACADEMY

MGT. 12- Polling Paper

MGT. 13- Report of Scrutinizer(s)

MGT. 14- Filing of resolutions and agreements to the

Registrar
The Companies (Declaration and DIV. 5- Statement of amounts credited to Investor
payment of Dividend) Rues, 2014 Education and Protection Fund
The Companies (Accounts) Rules, AOC. 1 Statement containing salient features of the
2014 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 ADT. 1- Notice of appointment of Auditor by the
Auditors) Rules, 2014 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 DIR. 1- Application for inclusion of name in the databank
qualification of Directors) Rules, of Independent Directors
2014
DIR. 2- Consent to act as a Director of a Company

DIR. 3- Application for allotment of Director Identification

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 SIDDHARTH ACADEMY

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 MBP. 1- Notice of Interest by Director
Board and its powers) Rules, 2014
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 MR. 3- Secretarial Audit Report
Remuneration of Managerial
MR. 1- Return of Appointment of Key Managerial
Personnel) Rules, 2014
Personnel

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 SIDDHARTH ACADEMY

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 URC. 1- Application by a Company for Registration under
Register) Rules, 2014 Section 366

URC. 2- Advertisement giving notice about Registration

under Part I of Chapter XXI
The Companies (Registration of FC. 1- Information to be filed by Foreign Company
Foreign Companies) Rules, 2014 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 GNL. 1- Form for Filing an Application with Registrar of
Offices and Fees ) Rules, 2014 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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 SIDDHARTH ACADEMY

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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 SIDDHARTH ACADEMY

- 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 Ministers 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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 SIDDHARTH ACADEMY

- 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

Air (Prevention and
The Factories Act, Foreign Exchange
Income Tax Act, 1961 Control of Pollution)
1948 Management Act
Act, 1981
Water (Prevention and Foreign Trade
Industrial Dispute
Wealth Tax Act Control of Pollution) (Development and
Act
Act, 1974 Regulation) Act, 1992
The Noise (Regulation
Payment of Wages
Central Excise Act and Control) Rules Indian Contract Act
Act
2000
Payment of Bonus The Environment
Custom Act Sale of Goods Act
Act (Protection) Act 1986
Workmen
Service Tax Act Petroleum Act and Rules
Compensation Act,
Sales Tax Act including
Shop And The Urban Land (Ceiling
Value Added Tax Act of
Establishment Act &Regulation) Act
2003
Respective State Sales Weekly Holiday Act,
Transfer of Property Act
Tax Acts 1942
Employees State
Professional Tax Motor Vehicles Act
Insurance Act, 1948
Employees PF &
Essential Commodities
Education Cess Misc. Provisions
Act
Act, 1954
Research and
Payment of Gratuity Information and
Development Cess Act,
Act Technology Act
1991
Contract Labour
The Boiler Act and Gas
(Regulation & Right to Information Act
Cylinders Act and Rules
Abolition Act) 1970
Maternity Benefit Constitution of India

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 SIDDHARTH ACADEMY

Act, 1961
Respective State
Micro, Small And
Govt. Factories
Medium Enterprises
(Control of Major
Development Act, 2006
Industrial Accident
and many other Acts
Hazard) Rules 2002

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