COMPLIANCE MANUAL COMPANIES ACT, 1956 AND 2013 …

COMPLIANCE MANUAL

COMPANIES ACT, 1956 AND 2013

Sl. No.

Name of the Act/Rules Relevant Section/ Rule

Periodicity Due date Activity Penal Section

1 The Companies Act, 2013 read with rules made thereunder

Section 2(68) and 2(71)

Ongoing Not applicable Minimum Capital


Section 3 Ongoing Not applicable Minimum number of member 7 for Public Company and 2 for Private Company.


Section 12(3) Ongoing Not applicable Every company shall— (a) paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefor are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages; (b) have its name engraved in legible characters on its seal; (c) get its name, address of its registered office and the Corporate Identity Number 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; and (d) have its name printed on hundies, promissory notes, bills of exchange and such other documents as may be prescribed:

Section 12(8)


Section 12(4) Time based Within fifteen days of the change

Notice of every change of the situation of the registered office shall be given to the Registrar of companies

Section 12(8)

5. The Companies Act, 2013 read with rules made thereunder

Section 12(5) Ongoing Not applicable Special Resolution for shifting of registered office outside the local limits of any city, town or village where such office is situated.

In case of shifting of registered office from the jurisdiction of one registrar of comapnies to another confirmation of the Regional Director to be obtained additionally

Section 12(8)


Section 12(6) Time based Within 60 days from the date of confirmation by the Regional Director

The Company shall file the confirmation received from Regional Director under Section 12(5) with the Registrar of Companies


Section 13(1) Ongoing Not applicable Alteration of memorandum by special resolution. Central Government approval also required for change of name and change of name of the state of the registered office.

Section 13(10)


Section 14 Ongoing Not applicable Alteration of AOA to be done through a Special Resolution. Alteration of AOA having effect of conversion of Public limited Company to Private limited shall be with the approval of Registrar of Companies (till tribunal is notified). Every alteration of Articles shall be filed with Registrar within 15 days of alteration, together with copy of altered Articles


Section 15(1) Ongoing Not applicable Every alteration made in MOA and AOA shall be noted in every copy thereof

Section 15(2)


Section 15(1) Ongoing Not applicable Every alteration made in MOA and AOA shall be noted in every copy thereof

Section 15(2)


Section 17(1) Time based Within seven days of the request

A company shall, on being so requested by a member, send to him, subject to the payment of such fees as may be prescribed, a copy of MOA, AOA and every agreement and resolution referred to in Section 117 if same is not embodied in MOA and AOA.

Section 17(2)


Section 19(1) Ongoing Not applicable No company shall, either by itself or through its nominees, hold any shares in its holding company

Void as per Section 19(1)


Section 20 Ongoing Not applicable Unless specific request is received from member, service of documents by Company to Registrar and member by post or by registered post or by speed post or by courier or by delivering at his office or address, or by such electronic or other mode as may be prescribed


Section 21 Ongoing Not applicable A document or proceeding requiring authentication by a company or contracts made by or on behalf of a company be signed by any key managerial personnel or an officer of the company duly authorised by the Board in this behalf

15. The Companies Act, 2013 read Section 42 read Ongoing Not applicable A company should make private placement only through private Section 42(10)

with rules made thereunder with rule 14 of concerned rules

placement offer letter offer letter in Form PAS-4. The offer letter shall be accompanied by an application serially numbered and addressed specifically to the person. The offer should be made only to such persons whose names are recorded by the company prior to invitation to subscribe.

Offer should not be made to more than 50 members.

No fresh offer or invitation under this section shall be made unless the allotments with respect to any offer or invitation made earlier have been completed or that offer or invitation has been withdrawn or abandoned by the company

Approval of shareholders through special resolution and the explanatory statement shall have the details stated in rule 14.

The Company should not release public advertisement about the offer.

Return of allotment in PAS-3 to be filed within 30 days from the date of allotment with the registrar of companies.

The company shall maintain a complete record of private placement offers in Form PAS-5.

All monies payable towards subscription of securities under this section shall be paid through cheque or demand draft or other banking channels but not by cash and should be kept in separate bank account

Allotment to be completed within 60 days. If company fails then it has to refund the same within 15 days from the expiry of 60 days. In case of delay in repayment interest @ 12% from end of 60 days.


Section 43 Ongoing Not applicable Only two types of capital equity and preference

17. The Companies Act, 2013 read Section 49 Ongoing Not applicable Calls on shares of same class to be made on uniform basis

with rules made thereunder


Section 50 Ongoing Not applicable Company should accepted uncalled capital only if authorised by the Articles. No voting rights on such uncalled capital


Section 51 Ongoing Not applicable Payment of dividend on partly paid shares to the proportion they are paid-up only if authorised by Articles.


Section 52 Ongoing Not applicable Securities premium to be applied only for the following:

• towards the issue of unissued shares of the company to the members of the company as fully paid bonus shares;

• in writing off the preliminary expenses of the company;

• in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company;

• in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company;

• for the purchase of its own shares or other securities;


Section 53 Ongoing Not applicable Company not to issue shares at discount except sweat equity under Section 54


Section 54 read rule 8

Ongoing Not applicable Sweat equity only if authorised by special resolution and one year has elapsed since the date of commencement of business.


Section 55 read with rule 9 and

10

Ongoing Not applicable Conditions for issue of preference shares: 1. Authorised by Articles. 2. Maximum redemption period 20 years, however in case infrastructure company 30 years. 3. Resolution shall contain the terms.

Condition for redemption: 1. Redemption only out of profits of the company available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of such redemption 2. They are fully paid-up. 3. Transfer to capital redemption reserve account if to be redeemed out of profits. Capital redemption reserve to be used only for issue of bonus shares.


Section 56 read with rule 11

Ongoing Not applicable Transfer only on submission of proper transfer deed along with share certificates.


Section 61 read with Section 64

rule 15

Ongoing Not applicable Alteration of Capital at the general meeting only if authorised by Articles and file with the registrar Form No. SH.7.


Section 62(1)(a) Ongoing Not applicable Rights issue:

• To existing shareholders in proportion of their holding.

• Notice of offer shall specify the number of shares offered and period for which offer is open which shall not be less than 15 days and not more than 30 days.

• Unless articles otherwise provide to give right to renounce.

• The board can dispose the unsubscribed portion in a manner which is not prejudicial to shareholders and company.


Section 62(1)(b) read with rule

12

Ongoing Not applicable Issue of ESOPS:

• To be approved by Special Resolution. Separate resolutions for grants to employees of subsidiary or holding company and grant of option to identified employees, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant of option

• Promoters, relative of promoters and directors either directly or indirectly holds 10% not eligible.

• Minimum period of one year from grant date to vesting date.

• Option not transferable

• Company to maintain register of ESOP in Form No. SH-6.


Section 62(1)(C) read with rule 13 and Section

42

Ongoing Not applicable Preferential Allotment:

• To be approved by Special Resolution.

• Price to be determined by valuation report by chartered accountant having 10 years standing in practise.

• Comply with Section 42 to the extent applicable

29 The Companies Act, 2013 read Section 63 read Ongoing Not applicable Issue of bonus shares:

with rules made thereunder with rule 14 • Should be authorised by AOA.

• On recommendation of the Board approved by shareholders.

• No defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it.

• Only fully paid shares out of free reserves or securities premium account or capital redemption reserve account.

• Partly paid-up shares, if any outstanding on the date of allotment, are made fully paid-up.

• The company which has once announced the decision of its Board recommending a bonus issue, shall not subsequently withdraw the same



Ongoing Not applicable No company limited by shares or by guarantee and having a share capital shall have power to buy its own shares unless the consequent reduction of share capital.

No public company shall give, loan, guarantee, the provision of security or otherwise, any financial assistance for purchase or subscription of any shares in the company or in its holding company except as provided in sub-section (3) read with rule 16


Section 68, 69 and 70 read

with 17

Ongoing Not applicable Buy back:

• Should be authorised by AOA.

• Special resolution except in case of buy back is 10% less of the paid-up capital and free reserves and approved by the Board.

• Not exceeding 25% of paid-up capital and free reserves.

• Secured and unsecured debt ratio not more than paid-up equity and free reserves after buy back.

• Shares are fully paid-up.

• Period of one year elapsed from the closure of previous buy-back.

• The buy-back should be out of free reserves or securities premium account proceeds of issue of other specified

securities.

• Buy-back to be completed within one year from the passing of the special resolution or board resolution.

• Before buy-back file form SH 8 and declaration of solvency in Form SH9

• Maintain register of buy-back in Form SH10

• File Form SH11 with after completion

• Transfer nominal value of shares bought back to capital redemption reserve which can be used only for bonus issue.

• The company should not have defaulted payment of deposits or interest thereon, redemption of debentures or preference shares or payment of dividend to any shareholder, or repayment of any term loan or interest payable thereon to any financial institution or banking company

• Complied with the provisions of sections 92, 123, 127 and section 129


Section 71 read with 18

Ongoing Not applicable Debentures:

• Debentures with option to convert can be issue subject to compliance with Section 62(1)(c) 42 and rules 13.

• Not to issue debentures with voting rights.

• Create debenture redemption reserve out of the profits of the company available for dividend.

• Redemption should be within 10 years in case of Infrastructure Company within 30 years.

• Create charge in case of secured debentures.

• Company to appoint trustee before issue of prospectus or offer letter with 60 days of allotment execute debenture trust deed.


Section 73 read with rules

Ongoing Not applicable On and after the commencement of this Act, no company shall invite, accept or renew deposits under this Act from the public except in a manner provided under Chapter V of the Act read with rules made thereunder.


Section 74 read with rules

Ongoing Not applicable The Company shall file Form DPT-4 within 3 months from commencement of Section 73 for the deposits accepted before commencement and such deposit should be repaid within one year from commencement.



Ongoing Not applicable The Company shall file Form No.CHG-1 for creating of charge. In case of debenture Form No. CHG-9.



Ongoing Not applicable The Company shall file Form No.CHG-4 for satisfaction of charge.



11

Ongoing Not applicable The Company to maintain register of charges in Form No. CHG-7. Such register shall be open for inspection during business hours by any member or creditor of the company without fees and by any other person on payment of fee


Section 88 read with rule 3, 4, 5,

6, 7 and 8

Ongoing Not applicable Every company shall keep and maintain the following registers:

• Register of members in Form No. MGT.1 in case of companies registered under 1956 Act then within six months.

• Register of Debenture holder in Form No. MGT-2.

• Index of above registers.

• Foreign Register if required in MGT-3.

The entries in the registers maintained under section 88 and index included therein shall be authenticated by the company secretary of the company or by any other person authorised by the Board for the purpose, and the date of the board resolution authorising the same shall be mentioned.

The entries in the foreign register shall be authenticated by the company secretary of the company or person authorised by the Board by appending his signature to each entry



Ongoing Not applicable Declaration of beneficial interest:

• Declaration by member who does not hold beneficial interest should be in Form MGT-4 within 30 days from the date of entering of his name in register of member or change

• Declaration by beneficial owner in Form MGT-5 within 30 days from the date of acquisition of such interest or change thereof.

• The company shall make a note of such declaration in the register of members and shall file, within a period of thirty days from the date of receipt of declaration by it, a return in Form No.MGT.6 with the Registrar.



Ongoing Not applicable Closure of register of members or debenture holders or other security:

• The Company may close its register subject to a maximum of 45 days in a year and 30 days at a time.

• Give atleast 7 days previous notice and publish the same in case of listed companies and companies which intend to get listed.



12

Ongoing Not applicable Annual Return:

• The Company to prepare Annual Return in Form No. MGT-7.

• The annual return, filed by a listed company or a company having paid-up share capital of ten crore rupees or more or turnover of fifty crore rupees or more, shall be certified by a Company Secretary in practice and the certificate shall be in Form No. MGT.8

• Abstract of the Annual Return to be attached to Board Report shall be in Form No. MGT-9.

• Annual Return to be filed with Registrar of Companies within 60 days from the date of AGM or due date for such AGM if same is not held.



Event based 15 days from the event

Every listed company shall file with the Registrar Form No.MGT.10 with respect to changes relating to either increase or decrease of 2% or more in the shareholding position of promoters and top ten shareholders of the company in each case, either value or volume of the shares. The change of 2% is of his own shareholding individually.

43 The Companies Act, 2013 read Section 94 read Ongoing Not applicable Registers under section 88 and copies of the annual return filed

with rules made thereunder with rule 14, 15 and 16

under section 92 shall be kept at the registered office of the company and same shall be open for inspection during business hours, at such reasonable time on every working day as the board may decide, by any member, debenture holder, other security holder or beneficial owner without payment of fee and by any other person on payment of such fee as may be specified in AOA but not exceeding Rs.50/-.

The registers can be kept at any other place in India in which more than 10% members reside, if approved by Special resolution and proposed resolution is filed with the Registrar.

Any such member, debenture-holder, other security holder or beneficial owner or any other person may— (a) take extracts from any register, or index or return without payment of any fee; or (b) require a copy of any such register or entries therein or return on payment of such fees as may be prescribed

The company shall provide the same within 7 days.

The company shall preserve the register of members along with index and foreign register permanently.

The register of debenture holders or any other security holders along with the index shall be preserved for a period of eight years from the date of redemption of debentures or securities. Copies of Annual Returns to be preserved for 8 years from date of their filing.


Section 96 Ongoing Not applicable Annual General Meeting:

• 1 Annual General Meeting in each year and the notice shall specify as such.

• Not more than 15 months gap between two Annual

General Meetings.

• First Annual General Meeting to be held within 9 months from the closing of the first financial year in other cases within 6 months from the end of the Financial year.

• If first AGM is held within 9 month of the closing of the first financial year no need to hold a meeting in the year of incorporation.

• Registrar can extend the above period by three months.

• AGM to be held on a day which is not a National Holiday between 9 AM to 6 PM

• AGM to be held at the registered office or within the city, town or village in which the registered office of the company is situated.


Section 100 & 101 read with rule 17 & 18

Ongoing Not applicable Extraordinary General Meeting and Notice of General Meetings:

• Both AGM and EGM shall be called by giving 21 clear days notice either through writing or through electronic mode to members, auditors and every director.

• Notice of EGM and AGM shall specify place date and time of the meeting and shall contain a statement of business to be transacted.

• EGM to be held within India.


Section 102 Ongoing Not applicable Explanatory Statement:

For every item of special business an explanatory statement shall be given setting out the following:

• Nature of concern or interest, financial or otherwise every director/manager/KMP or their relatives, if any, in respect of each item.

• Any other information and facts that may enable members to understand the meaning, scope and implications of the items of business and to take decision thereon.


Section 103 Ongoing Not applicable Quorum:

• For public companies 5 members if total number of members are not more than 1000 , 15 members if total number of members are not more than 5000 and 30 members if total number of members exceed 5000.

• For private companies 2 members.

If quorum not present within half an hour from the time appointed:

• Meeting to be adjourned to next week same day same time or some other time as may be decided by Board. If meeting called by requisition same shall stand cancelled.

• Three days notice be given for adjourned meeting either individually to members or by advertisement in news paper.

If at the adjourned meeting also, a quorum is not present within half-an-hour from the time appointed, the members present shall be the quorum.


Section 104 Ongoing Not applicable Unless the AOA otherwise provide, the members personally present at the meeting shall elect one of themselves to be the Chairman thereof on a show of hands. If poll is demanded then the chairman shall be elected by poll till then the chairman appointed by show of hands shall be the chairman.


Section 105 read with rule

19

Ongoing Not applicable Proxy:

• Members of Company except Section 8 Company can appoint proxy.

• Proxy can only participate in the poll but have not right to talk at the meeting and cannot participate in voting by show of hands.

• There shall appear with reasonable prominence in the notice a statement that a member entitled to attend and vote is entitled to appoint a proxy.

• Proxy should be in Form MGT-11 and shall be deposited with the Company atleast 48 hours before the meeting.

• A person cannot act as a proxy for more than 50 members and holding in aggregate not more than 10% of the total capital. In case a single person is holding more than 10% then the person can act as proxy for only one person.

• Inspection of proxies during business hours starting from 24 hours before the meeting till the conclusion of the meeting.



20

Ongoing Not applicable Voting through electronic means

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.

Board shall appoint a scrutinizer who is a CA, CS, CWA in practise or Advocate to oversee the process of evoting.

The notice of the meeting of the above companies shall be sent either by registered post or speed post or electronic means like registered email or through courier service.

The notice shall be placed on the website.

Notice should clearly state that business to be transacted through electronic voting and indicate the process and manner of evoting.

Notice shall also provide the time schedule and provide login Id and create facility for generating password.

An advertisement to be published, not less than five days before the date of beginning of the voting period, at least once in a vernacular newspaper having circulation in that district of

registered office, and at least once in English language in an English newspaper having a wide circulation in that district, about having sent the notice of the meeting and specifying therein.

The evoting shall be open for minimum 1 day and maximum three days. However such voting period shall be completed three days prior to the date of Meeting.

The members who did not voted through evoting can vote at the physical meeting.

The results declared along with the scrutinizer’s report shall be placed on the website of the company and on the website of the agency within two days of passing of the resolution at the relevant general meeting of members.



21

Ongoing Not applicable Demand for poll and scrutinizers report:

• Chairman of the meeting shall appoint scrutinizer(s) for conducting poll.

• The chairman shall provide all the documents and registers to the scrutinizers.

• The polling sheets shall be in Form No. MGT.12.

• The scrutinizers shall submit their report in Form No. MGT.13



22

Ongoing Not applicable Postal Ballot:

• Certain items as to passed only through postal ballot. The company can voluntarily pass other items through postal ballot except the ordinary business items.

• Issue notice to shareholders along with draft resolution

and reasons thereof.

• The members to send their assent or dissent within 30 days from the date of despatch of notice.

• Notice to e sent through registered post or speed post or electronic means like registered email or through courier.

• An advertisement in one vernacular language and one English news paper.

• Notice to be placed on the website.

• Appoint scrutinizer.

• Scrutinizers to submit their report as soon as possible after the last of receipt of ballots but not later than 7 days.

• Evoting facility to be provided in accordance with rule 20


Section 117 read with rule 24 of the said chapter and

Section 179(3) read with rule 8 of that chapter

Ongoing Not applicable Filing of Form MGT 14 for the following along with 102 statement:

• Special Resolutions.

• Any resolution of the Board of Directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director.

• Resolutions passed under Section 180(1)(a) and (c).

• resolutions passed in pursuance of sub-section (3) of section 179 and rule 8 under the said chapter.



25

Ongoing Not applicable Minutes of meetings and postal ballots:

• To be entered into the book within 30 days and page to be numbered consecutively.

• Every page to be initialled and last page to be signed by: o Board and Committee meeting chairman of the

meeting or next meeting. o General Meeting by chairman within 30 days. o In case of postal ballot by chairman of the board

within 30 days.

• Minutes book to be kept at registered office and preserved permanently.

55 The Companies Act, 2013 read Section 119 Ongoing Not applicable Inspection of minutes book:

with rules made thereunder read with rule 26

• Shall be open for inspection by members without charge during business hours which shall not be less than two hours.

• On payment of fee prescribed by AOA but not exceeding Rs. 10/- per page the company should within 7 days provide the members with the copies of minutes of General Meetings.


Section 120 read with rule 27 and rule 29

Ongoing Not applicable Every listed company or a company having not less than one thousand shareholders, debenture holders and other security holders, shall maintain its records, as required to be maintained under the Act or rules made there under, in electronic form. Such record shall be allowed for inspection as provided in the act and rules for physical records.



31

Ongoing Not applicable 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 thereunder and file the same with the registrar within 30 days from the conclusion of the General Meeting in Form No. MGT-15.



Ongoing Not applicable Dividend:

• Dividend to be declared only Out of profits for the year or previous year(s) or both after providing depreciation or out of money provided by the Central/State Government or out of free reserves subject to following:

o Rate of dividend shall not exceed the average of the rates at which dividend was declared by it in the three years immediately preceding that year. This will not apply to the company which has not declared divided in each of the preceding three years.

o The total amount to be drawn from such accumulated profits shall not exceed one-tenth of the sum of its paid-up share capital and free reserves as appearing in the latest audited

financial statement. o The amount so drawn shall first be utilised to set

off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared.

o The balance of reserves after such withdrawal shall not fall below fifteen per cent of its paid up share capital as appearing in the latest audited financial statement.

o No company shall declare dividend unless carried over previous losses and depreciation not provided in previous year are set off against profit of the company of the current year the loss or depreciation, whichever is less, in previous years is set off against the profit of the company for the year for which dividend is declared or paid

• The Board can also declare interim dividend. In case the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, such interim dividend shall not be declared at a rate higher than the average dividends declared by the company during the immediately preceding three financial years.

• Within 5 days from the date of declaration amount to be deposited in separate bank account


Section 135 Ongoing Not applicable Corporate Social Responsibility:

• Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any of the three financial years shall constitute a Corporate Social Responsibility Committee.

• The CSR committee shall consist of three or more directors out of which one must be an Independent Director.

• Role of CSR Committee:

o Formulate and recommend to the Board a CSR policy.

o Recommend to the amount of expenditure to be incurred on the CSR activities which shall be in accordance with Schedule VII of the Act.

o Monitor CSR policy from time to time.

• Board to approve the CSR policy and the Company to post the same on its website, if any.

• Board should ensure activities are undertaken as per the policy.

• Company to spend 2% of the average profits calculated in accordance with Section 198 of the Act for the last three years on CSR activities every financial year and preference to be given to local area.


Section 136 Time based Twenty one days before the meeting

Annual Report shall be sent to every member of the company, to every trustee for the debenture-holder of any debentures issued by the company, and to all persons other than such member or trustee, being the person so entitled



12

Time based Within 30 days from the date of AGM or due date of AGM

Annual report to be filed with Registrar along with Form No. AOC-4. XBRL form for companies notified by Central Government.



13

Ongoing Not applicable The following companies shall appoint any professional as decided by the Board as internal auditor who may or may not be an employee of the company:

• Listed companies.

• Unlisted public companies having: o Paid-up capital of Rs. 50 crores or more during

preceding FY. o Turnover of Rs. 200 cores or more during

preceding FY. o Loans from banks and Public financial institutions

exceeding Rs. 100 cores at any point of time during preceding FY.

o Outstanding of Rs. 25 cores or more at any point of

time during preceding FY

• Private companies having: o Turnover of Rs. 200 cores or more during

preceding FY. o Loans from banks and Public financial institutions

exceeding Rs. 100 cores at any point of time during preceding FY

• The audit committee or board in consultation with Internal Auditor shall formulate the scope, functioning, periodicity and methodology for conducting the internal audit


Section 139 read with rule 3,

4, 5 and 6

Ongoing Not applicable Appointment of Auditors:

• The audit committee where it is required to constitute in other cases board shall consider the qualification and other traits of the auditor.

• Board after considering the Audit committee recommendations shall recommend the appointment of auditor.

• Auditor to be appointed at AGM for a period of five years.

• The Company shall file Form ADT-1 for appointment of Auditors.

• Listed companies, unlisted public companies having paid-up capital of Rs. 10 crores or more and private companies having paid-up capital of Rs. 25 crores and all companies having public borrowings from Financial Institutions, banks or public deposits of Rs. 50 crores more shall not appoint an Individual as auditor for a term of more than five consecutive years and firm for more than two terms of five consecutive years. If the auditors have already been appointed as auditor at the time of commencement then he shall continue only for balance term or three years whichever is later.

Casual vacancy of auditor: Casual vacancy of auditor shall be filled by the Board within 30 days in case such casual vacancy is due to resignation same shall

also be approved by shareholders within 3 months.



Ongoing Not applicable Removal of auditor before expiry of his term by a special resolution of the company, after obtaining the previous approval of the Central Government. The application to Central Government shall be made in Form ADT-2.


Section 142 Ongoing Not applicable Remuneration of the Auditor to be fixed at the General Meeting or in such manner determined at the General Meeting.


Section 149(1) Ongoing Not applicable Minimum Director Private Company two public company three maximum number of directors fifteen.


Section 149(1) read with rule 3

Ongoing Not applicable Every listed company, unlisted public company having paid‐up share capital of Rs. 100 Crore or more and unlisted public company having turnover of Rs. 300 Crore or more shall appoint women director on or before 31.03.2015.


Section 149(3) read with rule 3

Ongoing Not applicable Every company shall have at least 1 director resident of India for a total period of not less than 182 days in previous calendar year


Section 149(4), (7), (8) (10) (11)

and (13) read with rule 4

Ongoing Not applicable Independent Directors:

• On or before 30.09.2014 every listed public company shall have at least one-third of the total number of directors as independent directors

• On or before 31.03.2014 every unlisted public company having paid-up capital of Rs. 10 crores or turnover of 100 crores or aggregate outstanding loans, debentures and deposits exceeding 50 crores shall have atleast two independent directors as per the latest audited balance sheet. However if such companies are required to appoint more independent directors due to composition of the audit committee then such number.

• Vacancy caused shall be filled in next board meeting or within three months whichever is later.

• The Company and independent directors shall abide by Schedule IV.

• Declaration from independent directors that he meets the criteria.

• Independent director shall hold office for a term up to five consecutive years on the Board of a company, but shall be eligible for reappointment on passing of a special resolution by the company and disclosure of such appointment in the Board's report in no case shall hold office for two consecutive terms.

• Independent Directors not liable for retirement.


Section 150(2) read with sub-

section (5)

Ongoing Not applicable The appointment of independent director shall be approved by the company in general meeting and the explanatory statement annexed to the notice of the general meeting called to consider the said appointment shall indicate the justification for choosing the appointee for appointment as independent director. The explanatory statement to Notice shall also include a statement that in the opinion of Board, the independent director fulfils the conditions of appointment as specified in the Act


Section 152(5) Ongoing Not applicable No person shall be appointed as a director of a company unless he has been allotted the Director Identification Number. Company to obtain consent in Form DIR-2 before appointment.


Section 152(6) Ongoing Not applicable Unless the AOA requires more numbers, 2/3rd to be directors liable to retirement by rotation and 1/3rd should retire every year.



13

Ongoing Not applicable A non‐retiring director shall be eligible for appointment as director, provided a member nominates him at least 14 days before the meeting and deposits Rs. 1 Lacs (refundable on successful appointment).

The Company shall atleast 7 days before the meeting inform the members of the candidature of the person referred above.


Section 161 Ongoing Not applicable Unless the AOA provides the Board cannot appoint Additional Director, Alternate Director, nominee director and director in casual vacancy.



14

Ongoing Not applicable Disqualification of Directors. Company to obtain declaration in Form DIR 8 from directors before appointment/reappointment.

Company to file with registrar in Form DIR-9 : (a) has not filed financial statements or annual returns for any continuous period of three financial years; or

(b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more,


Section 165 Ongoing Not applicable No person shall be a director in more than 20 companies ‐ Maximum number of public companies can be 10


Section 168 read with 15

Ongoing Not applicable The company to intimate the resignation in Form No. DIR-12 within 30 days and post the information on its website if any.


Section 169 Ongoing Not applicable Removal of Director:

• Only with special notice.

• On receipt of special notice forward the same to director who is to be removed.

• State in the notice the fact of representation and send copy of representation to shareholders.

• Pass ordinary resolution after giving reasonable opportunity of being heard.


Section 170(1) read with rule

17

Ongoing Not applicable Every Company to keep at its Registered Office, a Register of Directors and KMP in the prescribed format containing prescribed particulars


Section 170(2) read with rule

18

Time based Within 30 days of appointment or change

Return of Directors and KMP to be filed with ROC in Form DIR‐12,


Section 171 Ongoing Not applicable Register of Director and KMP to be open for inspection for members at Registered Office and also at AGM


Section 173 Ongoing Not applicable Meeting of Board:

• Minimum 4 meetings every year.

• The gap between two meetings should not be more than 120 days.

• Directors can attend either personally or through video

conferencing or other audio visual means

• Minimum seven day notice by hand delivery or by post or by electronic means, shorter notice for urgent matters.

• In case of meeting called with shorter notice atleast one independent, if any, shall be present. In case of absence of independent directors from such a meeting of the Board, decisions taken at such a meeting shall be circulated to all the directors and shall be final only on ratification thereof by at least one independent director, if any.

• One Person Company, small company and dormant company shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days


Section 174 Ongoing Not applicable Quorum for Meeting of Board:

• 1/3rd or two whichever is higher is quorum and present by video conference will be counted for quorum.

• The number of directors’ fall below the quorum fixed under the Act then the continuing directors or director can act for purpose increasing the number of directors to the number fixed for quorum under the Act.

• In case interested directors exceed 2/3rd then the remaining directors who are not less than 2 shall be quorum.

• If meeting not held for want of quorum then the meeting to be postponed to next week same day, if that is holiday then next succeeding day which is not a national holiday.

• Any fraction shall be rounded off to one.


Section 175 Ongoing Not applicable For passing resolution by Circulation, the draft resolution together with the necessary papers, if any, to be circulated to all directors/members by hand delivery/post/courier/electronic mode and approved by majority of directors entitled to vote

Resolution to be noted in the subsequent Board / Committee Meeting and made part of the minutes


Section 177 (1) to (8)

Ongoing Not applicable Audit Committee: (unlisted company to comply on or before 31.03.2015):

• Every listed company, unlisted public companies having paid‐up share capital of Rs. 10 Crore or more, unlisted public companies having turnover of Rs. 100 Crore or more and unlisted public companies having outstanding loan/debt/deposits exceeding Rs. 50 Crore shall have audit committee.

• Audit Committee should consist of minimum 3 directors of which majority are Independent Directors.

• Majority of the director and chairman of the audit committee shall be the persons who have ability to read and understand the financial statements.

• Composition of Audit Committee to be disclosed in the Board Report along with recommendation of Committee, not accepted by Board, if any (applicable for financial year starting after 01.04.2014).


Section 177 (9) and (10) read

with rule 7

Ongoing Not applicable Every listed company, unlisted public companies which accepts deposits from public, unlisted public/private companies having borrowing from banks/FI exceeding Rs. 50 Crore shall have Vigil Mechanism for Directors and employees.

The Vigil Mechanism shall provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases.

Details of establishment of such mechanism shall be disclosed by the company on its website, if any, and in the Board’s report.



Ongoing Not applicable Nomination Committee:

• Every listed company, unlisted public companies having paid‐up share capital of Rs. 10 Crore or more, ‐ all public

companies having turnover of Rs. 100 Crore or more and unlisted public companies having outstanding loan/debt/deposits exceeding Rs. 50 Crore shall constitute the Nomination and Remuneration Committee.

• The Committee should consist of 3 or more non-executive directors of which minimum 50% shall be Independent Directors. The chairperson of the Company shall whether executive or non-executive shall be a member of the committee but cannot be a chairman.

• The Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees and such policy shall be disclosed in the Board's report.

• The Committee shall identify persons who are qualified to become directors and who may be appointed in senior management.

• The Chairman of the committee in his absence any member of the committee authorised by him shall attend the General Meetings.



Ongoing Not applicable Stakeholders Relationship Committee:

• Company which consists of more than 1000 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.

• Stakeholders Relationship Committee shall consider and resolve the grievances of security holders of the company

• The Chairman of the committee in his absence any member of the committee authorised by him shall attend the General Meetings.

90 The Companies Act, 2013 read Section 179 Ongoing Not applicable The Board of Directors of a company shall exercise the following

with rules made thereunder read with rule 8 powers on behalf of the company by means of resolutions passed only at meetings of the Board:

• to make calls on shareholders in respect of money unpaid on their shares

• to authorise buy-back of securities under section 68

• to issue securities, including debentures, whether in or outside India

• to borrow monies;

• to invest the funds of the company;

• to grant loans or give guarantee or provide security in respect of loans;

• to approve financial statement and the Board’s report;

• to diversify the business of the company;

• to approve amalgamation, merger or reconstruction;

• to take over a company or acquire a controlling or substantial stake in another

• company;

• to make political contributions;

• to appoint or remove key managerial personnel (KMP);

• to take note of appointment(s) or removal(s) of one level below the Key Management Personnel;

• to appoint internal auditors and secretarial auditor;

• to take note of the disclosure of director’s interest and shareholding in form MBP-1;

• to buy, sell investments held by the company (other than trade investments), constituting five percent or

• more of the paid up share capital and free reserves of the investee company;

• to invite or accept or renew public deposits and related matters;

• to review or change the terms and conditions of public deposit;

• to approve quarterly, half yearly and annual financial

statements or financial results as the case may be.

The Company shall file Form MGT-14 for the above within 30 days of passing of the above resolution.

Board may, by a resolution passed at a meeting, delegate to any committee of directors, the managing director, the manager or any other principal officer of the company or in the case of a branch office of the company, the principal officer of the branch office, the powers to borrow monies, to invest the funds of the company and to grant loans or give guarantee or provide security in respect of loans on such conditions as it may specify.


Section 180 Ongoing Not applicable Board to exercise following powers only with prior approval of shareholders by Special Resolution:

• Sell, Lease or dispose‐off Undertaking or substantial the whole of Undertaking; (resolution may stipulate the conditions)

• To invest otherwise in trust securities;

• To borrow money in excess of paid‐up capital and free reserves; (resolution shall specify the amounts upto which can borrowed)

• To give time to director for re‐payment of debt


Section 181 Ongoing Not applicable Prior permission of the shareholders for making contribution to charitable and other funds in case any amount the aggregate of which, in any financial year, exceed five per cent. of its average net profits for the three immediately preceding financial years


Section 182 Ongoing Not applicable The political contributions made by the Company in any financial year contributed by the company in any financial year shall not exceed seven and a half per cent. of its average net profits during the three immediately preceding financial years. No contribution to be made without resolution of the board at its meeting held under section 179.

94 The Companies Act, 2013 read Section 183 Ongoing Not applicable Every company shall disclose in its profits and loss account the

with rules made thereunder total amount or amounts contributed by it to National Defence Fund during the financial year to which the amount relates.



Ongoing Not applicable Every director at First meeting in which he participates as director and at First meeting of Board in every FY and whenever there change in disclosures shall disclose in Form MBP‐1, his concern or interest in any: a) body corporate in which director or in association with other directors, holds more than 2% shareholding of that body corporate OR is a promoter, manager or CEO of that body corporate; b) firm or other entity in which such director is a partner, owner or member, as the case may be

Such director shall not participate in such meeting



10

Ongoing Not applicable Save as otherwise provided in this Act, no company shall, directly or indirectly, advance any loan, including any loan represented by a book debt, or give any guarantee or provide any security in connection with any loan taken to any of its directors or the following persons:

• Any director of the lending company, or of a company which is its holding company or any partner or relative of any such director.

• Any firm in which any such director or relative is a partner.

• Any private company of which any such director is a director or member.

• Any body corporate at a general meeting of which not less than 25% of the total voting power may be exercised or controlled by any such director, or by two or more such directors, together; or

• Any body corporate, the Board of directors, managing director or manager, whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director or directors, of the lending company.

These provisions shall not apply to the following:

(1) Any loan made by a holding company to its wholly owned subsidiary company or any guarantee given or security provided by a holding company in respect of any loan made to its wholly owned subsidiary company is exempted from the requirements under this section; and (2) Any guarantee given or security provided by a holding company in respect of loan made by any bank or financial institution to its subsidiary company is exempted from the requirements under this section:

Provided that such loans made under (1) and (2) are utilised by the subsidiary company for its principle business activities.

(3) The giving of any loan to a managing or whole-time director as a part of the conditions of service extended by the company to all its employees; or pursuant to any scheme approved by the members by a special resolution and

(4) A company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loans an interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India.


Section 186 (1) Ongoing Not applicable Company not to make investment through more than two layers of investment companies. Exceptions:

• Acquiring companies outside India, if such company has investment subsidiaries beyond 2 layers as per local law

• Required for the purpose of meeting any law or rules/regulations framed thereunder


Section 186 (2) Ongoing Not applicable No Company shall directly/indirectly:

• give any loan to any person or other body corporate;

• give guarantee/security in connection with loan to any

• person/body corporate;

• acquire by way of subscription, purchase or otherwise, securities of any body corporate exceeding 60% of paid‐up share capital, free reserves and securities premium account OR 100% of free reserves and securities premium account, whichever is more


Section 186 (3) read with rule

11 and 13

Ongoing Not applicable In case of exceeding the limits, prior approval of shareholders by special resolution shall be required.

Special Resolution not required in case of loan/guarantee/security to WOS or JV OR acquisition by holding company in WOS



11 and 13

Ongoing Not applicable The company shall disclose to the members in the financial statement the full particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security


Section 186 (5) Ongoing Not applicable No investment shall be made or loan or guarantee or security given by the company unless the resolution sanctioning it is passed at a meeting of the Board with the consent of all the directors present at the meeting


Section 186 (6) Ongoing Not applicable No company, which is registered under section 12 of the Securities and Exchange Board of India Act, 1992 and covered under such class or classes of companies as may be prescribed, shall take inter-corporate loan or deposits exceeding the prescribed limit and such company shall furnish in its financial statement the details of the loan or deposits


Section 186 (7) Ongoing Not applicable No loan shall be given at a rate of interest lower than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan.


Section 186 (8) Ongoing Not applicable No company which is in default in the repayment of any deposits accepted before or after the commencement of this Act or in payment of interest thereon, shall give any loan or give any guarantee or provide any security or make an acquisition till such

default is subsisting


Section 186 (9) & 10read with

rule 12

Ongoing Not applicable Every Company to maintain Register in manual/electronic form in Form MBP‐2 from the date of incorporation, kept at the Registered Office and entries to be made chronological order, within 7 days of such event and authenticated by Company Secretary or any other person authorised by the Board for the purpose.

The registered must be open for inspection and the extracts from the register may be furnished to any member of the company on payment of such fee as may be prescribed in the Articles of the company which shall not exceed ten rupees for each page



12

Ongoing Not applicable Every Company to maintain Register in manual/electronic form in Form MBP‐2 from the date of incorporation, kept at the Registered Office and entries to be made chronological order, within 7 days of such event and authenticated by Company Secretary or any other person authorised by the Board for the purpose



12

Ongoing Not applicable Section 186 shall not apply to:

• Banking company, insurance company, housing finance company, business finance company, infrastructure companies;

• to any acquisition made by NBFC OR investment company OR Right Issue;



14

Ongoing Not applicable All investments made or held by Company in any property, security or other assets shall be made and held in its own name. Exception ‐ Holding of shares in subsidiary companies in the name of any nominee or nominees of the Company, to ensure number of members are not reduced below statutory limits

To maintain Register in Form MBP‐3 from the date of registration and kept at the Registered Office and entries to be made chronological order, along with necessary details and authenticated by company secretary of the company or by any other person authorised by the Board for the purpose

109 The Companies Act, 2013 read Section 188 Ongoing Not applicable No company shall enter into any contract or arrangement with

with rules made thereunder read with rule 15

any Related Party without prior approval of the Board of Directors and shareholders. Exception:

• Ordinary Course of Business; and

• Arms' Length



16

Ongoing Not applicable Every Company shall keep one or more registers in Form MBP‐ 4 containing the particulars of all contracts to which section 184(2) and 188 applies. After entering the details, the Register shall be placed before the next Board Meeting and signed by all directors present Exception:

• Any contract or arrangement for sale, purchase or supply of any goods, material or services not exceeding Rs. 5 Lacs

• Banking Company for collection of bills in ordinary course of business

Every director and KMP shall, within 30 days of appointment/relinquishment of office, shall disclose to the Company particulars specified in Section 184(1), which shall be entered into the Register.

Exception ‐ Companies/Body Corporates in which director himself or together with other directors holds 2% or less of paid‐up share capital shall not be required to entered in Register

Register shall be kept at the Registered Office and entries in the Register shall be made at once in chronological order and shall be authenticated by company secretary of the company or by any other person authorised by the Board for the purpose


Section 190 Ongoing Not applicable Every company shall keep at its registered office, where a contract of service with a managing or whole-time director is in writing, a copy of the contract and where such a contract is not in writing, a written memorandum setting out its terms and same shall be open to inspection by any member of the company without payment of

fee


Section 192 Ongoing Not applicable Company not to enter into non-cash transactions involving directors.


Section 194 Ongoing Not applicable No director of a company or any of its key managerial personnel shall enter into forward dealings in securities of company.


Section 196 read with

Schedule V and rule 3

Ongoing Not applicable • No Company shall appoint MD and Manager at the same time.

• No Company shall appoint/re‐appoint MD, WTD or Manager for a term exceeding 5 years at a time.

• MD, WTD or Manager to appointed and terms/remuneration to be approved by the Board at its meeting, subject to shareholder's approval at next general meeting and Central Government, if applicable

• Return of appointment of MD/WTD/Manager/CEO/CS/CFO to be filed with ROC in Form MR‐1 within 60 days of appointment

• The remuneration not to exceed more than 100% of profits except in accordance with Schedule V


Section 197 read with

Schedule V, rule 4 and 5

Ongoing Not applicable • Total Managerial Remuneration of a public company not to exceed 11% of net profits except with the approval of Central Government or in compliance with Schedule V.

• Remuneration to all executive directors shall not cross 10% and each should not cross 5% except with the approval of Central Government or in compliance with Schedule V.

• Remuneration should not include sitting fee.

• Nonexecutive Directors not to exceed 1%

• Sitting fee not to exceed Rs. 1 lakh sitting fee for women and independent directors should not be less than other directors.

• No Stock Option to Independent Director and remuneration only by sitting fees, commission and reimbursement

• Every Listed Company to disclose the ratio of

remuneration of directors to median salary of employee and such disclosures shall also include particulars mentioned in Rules


Section 201 Ongoing Not applicable Before any application is made by a company to the Central Government under any of the sections of this chapter, there shall be issued by or on behalf of the company a general notice to the members thereof, indicating the nature of the application proposed to be made.

Such notice shall be published at least once in a newspaper in the principal language of the district in which the registered office of the company is situate and circulating in that district, and at least once in English in an English newspaper circulating in that district

The copies of the notices, together with a certificate by the company as to the due publication thereof, shall be attached to the application


Section 203(1)read with

rule 8

Ongoing Not applicable Every Listed Company and Public Companies having paid‐up share capital of Rs. 10 Crore or more shall have following whole-time KMP:

• Managing director or CEO or Manager or in their absence WTD

• Company Secretary;

• CFO


Section 203(3) Ongoing Not applicable Every KMP shall be appointed by Board Resolution containing terms and conditions of the appointment, including remuneration


Section 203(4) Ongoing Not applicable Any casual vacancy to be filled in by the Board at its meeting, within 6 months



Ongoing Not applicable Every Listed Company and Public Companies having paid‐up capital of Rs. 50 Crore or more or turnover of Rs. 250 Crore or more shall have Secretarial Report from PCS in Form MR‐3, annexed to Board Report.

FEMA LAWS:

Sl. No.

Name of the Act/Rules Relevant Section/ Rule

Periodicity Due date Activity Penal Section

1 The Foreign Exchange Management Act, 1999 read with The Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000, FDI Policy and RBI Master Circular on FDI 2014

Section I(2) of RBI Master

Circular on FDI 2014

Ongoing Not applicable Under FDI Scheme investment can be made in shares, mandatorily and fully convertible debentures and mandatorily and fully convertible preference shares of an Indian company by non-residents through two routes:

• Automatic Route

• Government Route

Citizens/body corporate incorporated in Bangladesh and Pakistan can invest subject to FIPB approval, however they can’t invest in industry pertaining to defence, space and atomic energy

Section 13




Ongoing Not applicable Citizens/body corporate incorporated in Bangladesh and Pakistan can invest subject to FIPB approval, however they can’t invest in industry pertaining to defence, space and atomic energy

Section 13




Ongoing Not applicable Investment in partly paid shares allowed only from 08.07.2014. Pricing should be decided upfront and minimum 25% to be received upfront.

Section 13

4 The Foreign Exchange Management Act, 1999 read with The Foreign Exchange Management (Transfer or issue of



Ongoing Not applicable Pricing Guidelines: 1. As per SEBI guidelines in case of listed companies. 2. For unlisted companies’ upto 15.07.2014 DCF method. From 15.07.2014 internationally accepted method

Section 13

Security by a Person Resident outside India) Regulations, 2000, FDI Policy and RBI Master Circular on FDI 2014




Ongoing Not applicable Mode of Payment for FDI:

• Inward remittance through normal banking channels.

• Debit to NRE / FCNR account of a person concerned maintained with an AD category I bank.

• Conversion of royalty / lump sum / technical knowhow fee due for payment /import of capital goods by units in SEZ or conversion of ECB shall be treated as consideration for issue of shares.

• Conversion of import payables / pre incorporation expenses / share swap can be treated as consideration for issue of shares with the approval of FIPB.

• debit to non-interest bearing Escrow account in Indian Rupees in India which is opened with the approval from AD Category – I bank and is maintained with the AD Category I bank on behalf of residents and non-residents towards payment of share purchase consideration.

Section 13


Section II of RBI Master Circular

on FDI 2014

Ongoing Not applicable Portfolio Investment Scheme:

• SEBI registered FII and NRI’s only can invest through PIS.

• Each FII including sub-accounts cannot investment more than 10% of that capital.

• Total FII holding should not be more than 24% except by passing of a resolution by its Board of Directors, followed by a special resolution to that effect by its General Body which should necessarily be intimated to the Reserve Bank of India

• Each NRI cannot investment more than 5% of that capital.

• Total NRI investment should not be more than 10% and can be increased to 24% by passing of a resolution by its Board of Directors, followed by a special resolution to that

Section 13

effect by its General Body which should necessarily be intimated to the Reserve Bank of India


Section IV of RBI Master Circular

on FDI 2014

Ongoing Not applicable NRI’s can invest on non-repatriation basis subject to the condition that amount of consideration for such purchase shall be paid by way of inward remittance through normal banking channels from abroad or out of funds held in NRE / FCNR (B) / NRO account maintained with the AD Category - I bank

Section 13


Section V(1)(i) of RBI Master Circular on FDI

2014

Time based Not later than 30 days from the date of receipt of funds.

An Indian company receiving investment from outside India for issuing shares /convertible debentures/preference shares/ warrants under the FDI Scheme, should report the details of the amount of consideration (including each upfront/call payment) to the Regional Office concerned of the Reserve Bank through its AD Category I bank in Advance Reporting Form enclosed in Annex – 6 together with a copy/ies of the FIRC/s evidencing the receipt of the remittance along with the KYC report (enclosed as Annex – 7) on the non-resident investor from the overseas bank remitting the amount.

Section 13


Section V(1)(ii) of RBI Master Circular on FDI

2014

Time based By July 15 every year

Annual Return on Foreign Liabilities and Assets Section 13

10 The Foreign Exchange Management Act, 1999 read with The Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000,

Section V(1)(iii) of RBI Master Circular on FDI

2014

Time based Within 180 days from the date of inward remittance

Allotment of equity shares/convertible securities/convertible preference shares to non-resident.

Section 13

FDI Policy and RBI Master Circular on FDI 2014


Section V(1)(iv) of RBI Master Circular on FDI

2014

Time based Within 30 days from the date of allotment

Intimation of allotment of equity shares/convertible securities/convertible preference shares to non-resident in Form FC-GPR

Section 13


Section V(1)(v) of RBI Master Circular on FDI

2014

Time based Within 60 days from the date of receipt of consideration

Reporting of transfer of shares/ convertible debentures and partly paid shares and warrants to the extent the equity shares are called up between residents and non-residents and vice- versa is to be made in Form FC-TRS

Section 13

13 The Foreign Exchange Management Act, 1999 read with Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 and RBI Master Circular 2014

Section A.3 Ongoing Not applicable Indian parties are prohibited from making investment in a foreign entity engaged in real estate (meaning buying and selling of real estate or trading in Transferable Development Rights (TDRs) but does not include development of townships, construction of residential/commercial premises, roads or bridges) or banking business, without the prior approval of the Reserve Bank

Section 13


Section A.4 Ongoing Not applicable General Permission to invest without any limit from the following and also sell the shares so purchased:

• out of the funds held in RFC account;

• as bonus shares on existing holding of foreign currency shares; and

• when not permanently resident in India, out of their foreign currency resources outside India.

Section 13

15 The Foreign Exchange Management Act, 1999 read with Foreign Exchange Management

Section B.1 Ongoing Not applicable Automatic Route:

• To make investment in overseas Joint Ventures (JV) /

Wholly Owned Subsidiaries (WOS) upto 400% of the net

Section 13

(Transfer or Issue of Any Foreign Security) Regulations, 2004 and RBI Master Circular 2014

worth from 03.07.2014 upto 100% of the net worth before such date. The following will be considered for said 100% or 400%:

o 100% of equity and preference shares. o 100% of loan. o 100% guarantee other than performance

guarantee o 100% bank guarantee and o 50% of performance guarantee

• The Indian party / entity may extend loan / guarantee only to an overseas JV / WOS in which it has equity participation.

• The Indian party should not be on the Reserve Bank’s Exporters' caution list / list of defaulters.

• All transactions relating to a JV / WOS should be routed through one branch of an Authorised Dealer

• Valuation by Category I Merchant Banker registered with SEBI or an Investment Banker / Merchant Banker outside India registered with the appropriate regulatory authority in the host country if investment if more than USD 5 million otherwise by Chartered Accountant or a Certified Public Accountant

• Valuation in case of swap to be by Category I Merchant Banker registered with SEBI or an Investment Banker outside India registered with the appropriate regulatory authority in the host country and with approval of FIPB.


Section B.1(5) Ongoing Not applicable Method of Funding:

• Drawal of foreign exchange from an AD bank in India.

• Capitalisation of exports;

• Swap of shares;

• Proceeds of ECB/FCCB,;

• In exchange of ADR/GDR

• Balance held in EEFC account of the Indian party (limit of

Section 13

400%/100 not to apply) and

• Proceeds of ADR/GDR (limit of 400%/100 not to apply)

General Permission without any limits:

• out of funds held in RFC account;

• bonus shares;

• When not permanently resident in India, out of their foreign currency resources outside India.


Section B.3 Time based Within a period of 30 days from the date of the transaction

The Indian Party is required to report such acquisition in form ODI to the AD Bank for submission to the Reserve Bank

Section 13


Section B.14 Time based By June 30 To file Annual Performance report (APR). Section 13


General Circular Time based By July 15 every year

Annual Return on Foreign Liabilities and Assets Section 13


Section B.15 Time based Within 30 days from the date of transfer

Submit details of such disinvestment through its designated AD category-I bank

Section 13

21 The Foreign Exchange Part I.A Ongoing Not applicable Automatic Route: Section 13

Management Act, 1999 read with Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 and RBI Master Circular 2014

Recognised Lenders:

• international banks;

• International Capital Markets;

• multilateral financial institutions; • regional financial institutions and Government owned

development financial institutions;

• export credit agencies;

• foreign collaborators;

• foreign equity holders other than erstwhile OCB’s subject to following conditions:

o ECB up to USD 5 million (including all outstanding ECB’s)- minimum paid-up equity of 25 per cent held directly by the lender

o ECB more than USD 5 million (including all outstanding ECB’s)- minimum paid-up equity of 25 per cent held directly by the lender and ECB liability-equity ratio not exceeding 4:1

• From indirect equity holders is permitted provided the indirect equity holding in the Indian company by the lender is at least 51 per cent

• From a group company is permitted provided both the borrower and the foreign lender are subsidiaries of the same parent

Overseas Organizations have to furnish to the AD bank of the borrower a certificate of due diligence from an overseas bank, which, in turn, is subject to regulation of host-country regulator and adheres to the Financial Action Task Force (FATF) guidelines. The certificate of due diligence should comprise the following:

• that the lender maintains an account with the bank for at

least a period of two years,

• that the lending entity is organised as per the local laws and held in good esteem by the business/local community

and

• that there is no criminal action pending against it.

Individual Lender has to obtain a certificate of due diligence from an overseas bank indicating that the:

• Lender maintains an account with the bank for at least a period of two years.

• Other evidence /documents such as audited statement of account and income tax return, which the overseas lender may furnish, need to be certified and forwarded by the overseas bank. Individual lenders from countries wherein banks are not required to adhere to Know Your Customer (KYC) guidelines are not eligible to extend ECB

22 The Foreign Exchange Management Act, 1999 read with Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 and RBI Master Circular 2014

Part I.A(iii) Ongoing Not applicable Amount and Maturity:

• Corporates in the services sector viz. hotels, hospitals and software sector and miscellaneous services sector upto USD 200 million or its equivalent in a FY.

• Others USD 750 million.

• The proceeds should not be used for acquisition of land.

• Upto USD 20 millions in FY minimum three years.

• Above USD 20 millions in FY minimum Five years.

• All in cost for average maturity period of three years and upto five years 350 basis points over 6 months Libor

• All in cost for average maturity period above five years 500 basis points over 6 months Libor

Section 13


Part I.A(vii) Ongoing Not applicable End use restrictions:

• For on-lending or investment in capital market or acquiring a company (or a part thereof) in India by a corporate [investment in Special Purpose Vehicles (SPVs), Money Market Mutual Funds (MMMFs), etc., are also considered as investment in capital markets.

• for real estate sector

• for general corporate purpose which includes working capital and repayment of existing rupee loans other than

Section 13

ECB for general corporate purposes from direct foreign equity holders by companies in manufacturing, infrastructure, hotels, hospitals and software sector: Eligible borrowers can avail ECB from their direct foreign equity holder company with a minimum average maturity of 7 years for general corporate purposes:

o Minimum paid-up equity of 25 per cent should be held directly by the lender.

o Such ECBs would not be used for any purpose not permitted under extant the ECB guidelines (including on-lending to their group companies / step-down subsidiaries in India); and Repayment of the principal shall commence only after completion of minimum average maturity of 7 years.


Part I.A(viii) Ongoing Not applicable Issuance of guarantee, standby letter of credit, letter of undertaking or letter of comfort by banks, Financial Institutions and Non-Banking Financial Companies (NBFCs) from India relating to ECB is not permitted

Section 13

25 The Foreign Exchange Management Act, 1999 read with Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000, and RBI Master Circular 2014

Part I.A(ix) Ongoing Not applicable Security for ECB:

• Choice of security is borrower’s prerogative, subject to the following:

o ECB in compliance with guidelines. o Security clause in the Loan Agreement. o NOC if required from existing lenders in India. o Such security shall be subject to provisions

contained in the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000

Section 13

26 The Foreign Exchange Management Act, 1999 read with Foreign Exchange Management

Part I.A(xi) Ongoing Not applicable Prepayment of ECB exceeding USD 500 million not allowed without prior approval of Reserve Bank. Upto 500 million subject to minimum maturity period.

Section 13

(Borrowing or Lending in Foreign Exchange) Regulations, 2000, and RBI Master Circular 2014


Part IB(xvi) Ongoing Not applicable Application in Form ECB for seeking approval for ECB under approval route.

Section 13


Part X Ongoing Not applicable Borrower must obtain Loan Registration Number from RBI before drawing down the loan. Form No. 83 to be filed for LRN.

Section 13


Part X Time based Within 7 days from the end of the month

Filing of Form No. ECB-2 every month by the borrower. Section 13

Documents

COMPLIANCE MANUAL COMPANIES ACT, 1956 AND 2013 …