+ All Categories
Home > Documents > Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057...

Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057...

Date post: 11-Jan-2016
Category:
Upload: grace-summers
View: 244 times
Download: 4 times
Share this document with a friend
75
Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: www.mmchitale.com Provisions of Companies Act Provisions of Companies Act 2013 pertaining to Board & 2013 pertaining to Board & Administration Administration Sushrut Chitale Sushrut Chitale
Transcript
Page 1: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut ChitaleMUKUND M CHITALE & CO.205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057

Landline: +91-22-2614 3127 website: www.mmchitale.com

Provisions of Companies Act 2013 Provisions of Companies Act 2013 pertaining to Board & Administrationpertaining to Board & Administration

Sushrut ChitaleSushrut Chitale

Page 2: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Directors

2

Page 3: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Snapshot – Directors requirements

• Paid up capital / turnover / loans / deposits as of last date of latest audited financial statements to be taken in to account

• Listed company – 1/3 of total as Independent director – time period of 1 year given to comply with provisions of this section. Minimum requirement of at least 2 independent directors where criteria met

Public companies Independent

director

Woman director

Audit Committee

Nomination & Remuneration

committee

Listed companies

Paid up cap ≥ Rs. 10 cr

Paid up cap ≥ Rs. 100 cr

Turnover ≥ Rs. 100 cr

Turnover ≥ Rs. 300 cr

O/s loans, debentures, deposits ≥ Rs. 50 cr

3

Page 4: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 149 – Company to have Board of Directors

• Every company shall have -a) Minimum 3 directors – Public Company Minimum 2 directors – Private Company Minimum 1 director - One Person Companyb) Maximum of 15 directors. (More than 15 allowed by special

resolution)• At least 1 director whose stay in India is not less than 182 days in

previous calendar year

4

Page 5: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 149 – Company to have Board of Directors • An independent director means a director (other than MD/WTD/

nominee director);– who, in Boards’ opinion, is a person of integrity and possesses

relevant expertise & experience– who is / was not a promoter of company / subsidiary / holding /

associate company; and is / was not related to promoters / directors

– who does not have pecuniary relationship with company / Group during last 2 / current financial year

– Whose relatives do not have pecuniary relationship exceeding 2% of gross turnover or total income of Rs. 50 lakhs, whichever is lower, in current / last 2 financial years

– Who or his relative has not been KMP in company / Group in past 3 financial years

5

Page 6: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 149 – Company to have Board of Directors – Who or his relative has not been partner in firm of CA/CS/CMA

who were auditing Books of Company / Group in past 3 financial years

– Who or his relative has not been partner in legal / consulting firm who has transactions in past 3 financial years with company / group exceeding 10% of turnover of the Firm

– Who along with relatives does not hold >2% of voting power– Who or his relative do not run an NGO which receives >25% of

receipts from company / promoters / Group; or holds >2% voting power in company

• Independent director to give Annual Declaration that he / she meets criteria for independence.

• Independent director not entitled to stock option

6

Page 7: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 149 – Company to have Board of Directors• Independent directors can hold office for 2 consecutive terms of 5

years each. Thereafter, he / she can again be eligible by taking a break of 3 years. These provisions to be applied prospectively

• Independent director to be liable for acts of omission / commission committed with his knowledge and with his consent / connivance / where he had not acted diligently.

7

Page 8: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 150 – Selection of Independent Directors • Shall be selected from the data bank of persons eligible & willing to

act as such.• Appointment shall be approved in general meeting.• Company shall exercise proper due diligence before selection.• Explanatory statement annexed to notice containing agenda for

appointment of independent director to include justification for such person’s appointment.

8

Page 9: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 151 – Small shareholders director • A listed company may: a) suo moto or b) i) by application from at least 1000 shareholders or whichever is ii) one-tenth of total small shareholders lower• Only 1 small shareholder for a company• Small shareholders – those who hold shares with nominal value of <

Rs. 20,000• Small shareholder’s director’s tenure to be 3 years – not eligible for

re-appointment on expiry of tenure for another 3 years• A person may be small shareholder director in maximum 2

companies at a time.

9

Page 10: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 152 – Appointment of Directors • First directors – Subscribers of MOA (unless AOA specifies some other

person).• Every director to be appointed in general meeting.• At every AGM, one-third of the directors are liable to retire by

rotation. If number is neither three nor a multiple of three, then number nearest to one-third, shall retire.

• Company may fill up the vacancy by appointing retiring director or some other person.

• If vacancy is not filled-up then meeting shall be adjourned. But if the vacancy is not filled up even in adjourned meeting, then the retiring director shall be deemed to be re-appointed.

• Public Company – If there is a casual vacancy, it may be filled by BODs

10

Page 11: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 160 – Person other than retiring director• A person other than retiring director, shall be eligible for

appointment as director.• The person / any member proposing the person to deliver notice in

writing for candidature at company’s registered office 14 days before AGM.

• Deposit of Rs. 100,000 also be submitted• Company to inform members about such candidature at least 7 days

before AGM through individual notices / through website / through notice in newspaper

• Deposit is refunded if proposed person gets elected or gets > 25% of votes.

11

Page 12: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 161 – Appointment of Additional Director, Alternate Director and Nominee Director • AOA may confer power to BODs to appoint any person as additional

director to hold up to next AGM.• AOA may also confer power to BODs to appoint any person as

alternate director for a director during his absence for a period of not less than 3 months from India.

• Alternate director to vacate the office if the director in whose place he has been appointed returns to India.

• One person can not be alternate director for more than 1 director in the same company.

12

Page 13: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 164 – Disqualifications for appointment • A person shall not be eligible for appointment, if he is-– Of unsound mind– An undischarged insolvent– Applied to be adjudicated as insolvent & application is pending– Convicted by court of any offence & sentenced to imprisonment

for not less than 6 months & 5 years yet to pass for expiry of such sentence (if person has been convicted & sentenced for more than 7 years, he can not be Director in any company any time in future)

– Order is passed by a court or Tribunal disqualifying him– Has not paid any call money for 6 months– Convicted of any offence dealing with related party transactions– Has not been allotted with DIN

13

Page 14: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 164 – Disqualifications for appointment • If a person is a director of a company;– which has not filed financial statements for continuous period of 3

financial years– which has failed to repay deposits / interest thereon /

debentures / dividends & such failure continues for more than 1 year,

then he can not be appointed as director in any company for 5 years• Private company may specify additional disqualifications in AOA

14

Page 15: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 165 – Number of Directorships • No person to hold directorship (including any alternate directorship)

in more than 20 companies at a time (not more than 10 in public co).• Directorship in Private companies that are holding or subsidiary

company of a public company shall be calculated as directorship in public companies.

• 1 year time frame given to align number of directorships to the above numbers.

15

Page 16: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 168 – Resignation of Directors • Shall resign by giving a notice in writing.• Resignation shall take effect from the date notice is received by the

company or any date specified by director, whichever is later.• When all the directors resign – Promoters or in their absence, Central

Government shall appoint the required number.

16

Page 17: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 169 – Removal of Directors • Company may remove by passing ordinary resolution.• Special notice is required to be given.• Director shall be entitled to be heard.• If director gives any representations in writing, the company has to

either send it along with notice or director can read out in the meeting.

• The vacancy is to be filled up in the same meeting.• The appointed director to hold the office till the time the predecessor

would have held the same.

17

Page 18: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 177 – Audit Committee • Composition – At least 3 members. Majority to be independent.

Majority to also have ability to read and understand financial statement

• 1 year time given to meet requirements specified in the new Act.• Terms of reference to include;– Recommendation for appointment for auditors– Review & monitor auditor’s independence and performance and

effectiveness of audit process– Examination of financial statements & auditors’ report– Approval of related party transactions Scrutiny of inter-corporate

loans and investments– Valuation of undertakings/assets of the company– Evaluation of internal financial controls & risk management systems– Monitoring end use of funds raised through public offers

18

Page 19: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 177 – Audit Committee • Statutory auditors to have right to be heard at audit committee

meetings when it considers auditors’ meeting but don’t have right to vote

• Board’s report to disclose composition of Audit committee & where Board has not accepted recommendation of Audit committee, the same to be disclosed in report along with reasons therefor

• Every listed company to have whistle blower mechanism

19

Page 20: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 178 – Other Committees Nomination & Remuneration committee • Composition – 3 or more non-executive directors (at least half to be

independent). Chairperson of company can not chair the committee.• Terms of reference – to deal with matters pertaining to appointment,

removal, promotions and other matters for executive directors & senior management.

Stakeholders Relationship committee• Company with >1000 shareholders, debenture-holders, deposit-

holders to constitute Stakeholders Relationship committee• Composition – to be decided by Board (NED to chair the committee)

20

Page 21: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Board meetings & powers

21

Page 22: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 173 – Meetings of Board • Every company shall hold first Board meeting within 30 days of its

incorporation.• Thereafter, minimum 4 meetings every year (provided not more than

120 days shall elapse between two meetings).• Meeting shall be called by giving notice of not less than 7 days in

writing to every director at his registered address.• Meeting may be called at shorter notice provided at least 1

independent director, if any, is present.• One Person Company , Small Company and Dormant Company can

hold one meeting in each half year of a calendar year (provided time gap between two meetings is not less than 90 days).

• Board meetings can be held through video conferencing except for certain business which needs to be decided at an actual meeting of the Board

22

Page 23: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 174 – Quorum for Meetings of Board • Quorum – One-third of total strength or two directors, whichever is

higher.• When the number of interested directors at any time equals or

exceeds two-third, the non-interested directors, not less than two, form the quorum.

• If Board meeting can not be held for want of quorum, meeting to be held to same day, time & place in next week. If such day is a national holiday, then meeting to be held on next succeeding day. However, Articles can specify another option in case meeting can not be held for want of quorum.

23

Page 24: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 175 – Passing of Resolution by Circulation • Board can pass the resolution by circulation provided it is circulated

in draft along with necessary papers, if any, to all the directors or members of the committee at their registered address.

• If one-third of the directors require the resolution to be passed at the meeting, then the Chairman shall put it in meeting.

24

Page 25: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 179 – Powers of Board • BODs are entitled to exercise all the powers as the company is

authorised to exercise and do. • BODs shall exercise following powers only at a Board meeting;– Make calls on shareholders– Authorise buy-back– Issue securities– Borrow monies– Invest the funds of the company– Grants loans or give guarantee– Approve quarterly, half yearly, annual financial statements /

financial results & Board’s report– Diversify the business of the company– Approve amalgamation, merger or reconstruction

25

Page 26: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 179 – Powers of Board – Take over a company or acquire controlling stake– Make political contributions– Appoint / remove KMP– Take note of appointment / removal of 1 level below KMP– Appoint internal auditors & secretarial auditor– Take note of disclosure of director’s interest & shareholding– Buy, sell investments held by company (other than trade

investments) constituting >5% of paid up cap + free reserves of investee companies)

– Invite / accept / renew public deposits– Review / change terms and conditions of public deposits

• Routine investment powers out of the above can be delegated

26

Page 27: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 180 – Restrictions on Power of Board

• BODs to exercise following powers only with consent of company (by special resolution);– Sell, lease or dispose of the whole or substantially the whole of the

undertaking.– Invest in trust securities the amount of compensation received as a

result of merger or amalgamation– To borrow money, where the total borrowings will exceed

aggregate of its paid up share capital & free reserves.– To remit or give time for repayment to any director

• These provisions also applicable to private companies. Special resolution passed at AGM in respect of above to be filed with ROC within 30 days.

27

Page 28: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Management & Administration

28

Page 29: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 88 – Register of Members, etc

• Every Company shall keep & maintain following registers:– Register of Members– Register of debenture-holders– Register of any other security holders

• If AOA permits, the company may keep a part of its register in any country outside India, called as “foreign register”.

• Such registers are to be maintained at the registered office of the company, except in some cases at any other place if the special resolution is passed.

• In case of existing companies, particulars to be compiled within 6 months

29

Page 30: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 92 – Annual Return

• Annual return to contain particulars as on close of financial year• Changes in members & debenture-holders since date of close of

financial year• Annual return of following types of companies to require certification

by practising CS;– Listed companies– Company with paid up capital ≥ Rs. 10 crores;– Company with turnover ≥ Rs. 50 crores

• Annual return to be filed within 60 days of AGM in Form MGT-7• Extract of Annual return to be included in Board’s report

30

Page 31: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 93 – File return – Promoters’ stake change

• Return to be filed by listed company within 15 days, if there is change of > 2% in shareholding position of Promoters & Top-ten shareholders.

31

Page 32: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 94 – Place of Keeping Registers

• The Registers and copies of annual return filed have to be kept at the registered office.

• It can be also be kept at any other place (where at least 1/10th of members reside) by passing a Special Resolution.

• Members may take extracts from any register or a copy of such register during business hours on any working day (at least 2 hours to be specified by Board for this – maximum fee of Rs. 10 per page extracted)

• Periodicity of safe keeping – 8 years

32

Page 33: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 96 – Annual General meeting

• Every company other than One Person Company should hold AGM in each year.

• Not more than 15 months shall elapse between two AGMs.• 1st AGM to be held within 9 months of closing of first F.Y. and in other

cases within 6 months of close of FY• Power given to ROC to allow 3 months extension for holding AGM• AGM to be held between 9 am and 6 pm on any day that is not a

National Holiday

33

Page 34: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 100 –Extraordinary General Meeting

• EGM can be called;– At any time by the Board– Requisition of members holding ≥ 1/10th of paid-up capital– Requisition of members with ≥ 1/10th of voting power (in case of

no share capital)• If Board does not call for EGM within 45 days of date of requisition,

members themselves can requisition EGM within 3 months• In case of requisitioned meeting, the Company to give notice of

resolutions to be moved by members if such requisition is deposited at registered office in the prescribed time

34

Page 35: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 101 – Notice of Meeting

• Clear notice of not less than 21 days to be given either in writing or through electronic means.

• Shorter notice is allowed provided it is approved as such by ≥ 95% of members entitled to vote

• Notice shall be given to:– Every member of the company– Auditor or Auditors of the company and– Every director of the company.

• Omission to give notice shall not invalidate the proceedings of the meeting.

35

Page 36: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 102 – Statement to be annexed to notice

• At any general meeting, all business other than below, shall be deemed special;– Consideration of financial statements, Auditor & Board report– Declaration of dividend– Appointment of directors in place of those retiring– Appointment of Auditors & fixing their remuneration

• All special business to require explanatory statement, and details of directors / KMP / relatives interested in the same

• If the item to be transacted relates to or affects any other company, extent of shareholding interest in such other company held by promoter, director or any KMP shall also be set out, if it is ≥ 2% of paid-up capital of that other company

36

Page 37: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 103 – Quorum for meetings

• In case of Public company:– 5 members personally present if members ≤ 1000– 15 members if members is > 1000 but ≤ 5000– 30 members if total members > 5000

• In case of Private Company – 2 members to be personally present.• AOA can specify larger number than above as quorum• If quorum is not present within half-an hour from scheduled time, it

shall stand adjourned to same day in next week at same time and same place.

• At adjourned meeting, members present shall form a quorum.

37

Page 38: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 104 – Chairman of Meetings

• Unless AOA provide otherwise, members present shall elect the Chairman from amongst themselves by show of hands.

• Members may elect Chairman for the meeting by poll, if such poll is demanded by members

38

Page 39: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 105 – Proxies

• Members are entitled to appoint another person as a proxy to attend and vote on his behalf.

• Proxy shall not have right to speak and shall not be entitled to vote except on a poll.

• Proxy form should be submitted before 48 hours of the scheduled time of meeting.

• A person appointed as proxy shall act as such on behalf of ≤ 50 members or persons holding ≤ 10% voting rights

• If a members hold > 10% of voting rights, he may appoint a proxy, provided such proxy does not act as proxy for any other member

39

Page 40: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 106, 107, 108 – Voting at General meeting

• AOA may provide for restriction on voting rights for any member who has not paid call money.

• Voting at general meeting to be normally by show of hands, unless poll is demanded / electronic voting is applicable

• E-voting facility to be provided to members in case of listed companies, and companies with ≥ 1000 shareholders

• A poll needs to be conducted in case;– Chairman decides so on his own motion– It is demanded by members with ≥ 10% voting power or holding

shares where ≥ Rs. 5 lakhs has been paid up– It is demanded by members with ≥ 10% voting power (in case of

companies without share capital)

40

Page 41: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 110 – Postal Ballot • Voting through postal ballot required in case of following;

– Alteration of objects clause of MOA / alteration of AOA– Change in registered office – Change in objects for which a company has raised money and

there is still unutilised amounts out of such money– Issue of shares with differential rights / variation in such rights– Buy-back of shares– Election of small shareholder director– Sale of whole / substantial part of undertaking– Giving loans / guarantee in excess of limits mentioned in sec 186

• Additional items may also be transacted through postal ballot• Postal ballot not applicable for Companies with ≤ 200 members• Ordinary business (4 standard items of agenda) to be transacted

always at a physical meeting41

Page 42: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 114 – Ordinary and Special resolutions • Meaning of “Ordinary Resolution”- Resolution is an ordinary one if

notice has been duly given and it is required to be passed by show of hands or electronically or by poll and whereby votes cast in favour exceed votes cast against.

• Meaning of “Special Resolution” - Resolution is a special one if– Intention to propose it as special is specified in the notice– Notice is duly given– Votes cast in favour ≥ 3 times the number of votes cast against.

42

Page 43: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 115 – Resolution requiring Special Notice • If special notice is required for any resolution, notice of the intention

to move such resolution shall be given to the company by members– Holding not less than 1% of total voting power or– Holding shares on which sum not less than Rs. 5 lakh is paid up

• Notice to be sent to Company between 3 months & 14 days before date of meeting

43

Page 44: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 117 – Resolutions to be filed with ROC • Copy of following types of resolutions / agreements is to be filed with

ROC within 30 days of it’s passing with prescribed fees;– Special resolutions– Board resolution for appointment / reappointment / variation in

terms of appointment of MD– Resolutions passed in respect of borrowing powers / disposal of

substantial part of undertaking– Resolutions requiring a company to be wound up voluntarily– Certain important Board resolutions

• Above resolutions can be filed within 300 days of event with additional fees – beyond such time limit, company will be liable to pay fines

44

Page 45: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 118, 119, 120, 121 – Minutes of Meetings • Minutes to be recorded within 30 days of conduct of meeting• Minutes, document, records, registers can now be maintained in

electronic form• Inspection / copies can be given to members in electronic form• Every listed company to file a report of each AGM within 30 days of

the conduct of the meeting.

45

Page 46: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Consequences of default

46

Section & Default Party in default Imprisonment term

Fine range (Rupees ‘000s)

88 – Company does not maintain register of members

Company & Every officer

NA 50 – 300 / 1K PD for continuing

default

92 – Certification of Annual Return

Company Secretary

NA 50 - 500

94 – Place of keeping & inspection of register

Company & Every officer

NA 1 (everyday) – 100

102 – Statement to be annexed to notice

Promoter/Director/

Manager/KMP

NA 50 – 5 times amt of benefit

Page 47: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Consequences of defaultSection & Default Party in default Imprisonm

ent termFine range

(Rupees ‘000s)

111 – Circulation of Members resolution

Company & Every officer

NA 25

117 – Filing of resolutions

Company NA 500 – 2500

Officer in default NA 100 – 500

118 – Tampering with Minutes

Any Person 2 years 25 – 100

119 – Inspection of Minute book

Company & Every officer

NA 5

121 – Report on AGM

Company NA 100 – 500

Officer NA 25 – 100

47

Page 48: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Other administration aspects – highlights • In case of new companies, Company can commence business only

after subscription shares are fully paid up & verification of registered office is complete

• CIN to be quoted on all business letters, bills, invoices, notices etc• In case of change in registered office for existing companies /

verification of registered office for new companies, documents pertaining to ownership of premises / lease agreement / letter from owner to company for usage of premises, to be maintained.

Page 49: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 203 – Appointment of KMP• Following types of companies to appoint KMP (i.e. WTD / MD / CEO,

Company secretary, chief financial officer– Listed companies– Public companies with paid up share capital > 10 crores

• A person can be both Chairman & CEO of a company, only if Articles so provide or where there is only 1 business segment.

• A KMP not to hold office as such in more than 1 company – he / she though can hold office in subsidiary of a company

• A person can be MD of at most 2 companies at a time• Only a person resident in India can be appointed as a MD / WTD /

Manager

49

Page 50: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 204 – Secretarial Audit• Secretarial audit required for

– Listed companies– Public company with paid up capital ≥ Rs. 50 crores– Public company with turnover ≥ Rs. 250 crores

• Secretarial audit to be conducted by company secretary in practice

50

Page 51: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Related party transactions

51

Page 52: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 184 – Disclosure of interest• Every Director to disclose his concern / interest at;

– First Board meeting after he is appointed as Director– First Board meeting of every financial year– First Board meeting after there is any change in such interest

• If Company proposes to enter in to contract / arrangement with,– Another company where Director holds > 2% stake or is

promoter / manager / CEO; or– A Firm where Director is partner / owner / member,

Then Director should disclose interest and not participate in the meeting

• If Director does not disclose such interest / attends meeting, contract is voidable at option of company

• “Interest” means any interest, direct or indirect, which conflicts with duties towards company as a Director

52

Page 53: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 185 – Loan to DirectorsA Company (including Private Limited company) can not advance loan /

give guarantee / security for loan taken by

53

Director or his relative / partner

Director of Holding co

Firm where director / relative is

partner

Body corp where >25% voting controlled by 1 or more Directors

Body corp which acts under control of lending co

• Above restrictions do not apply to loan given to MD/ WTD as part of terms of employment; or pursuant to scheme approved by special resolution; or to a company which is in the lending business

• Any loan made by holding company to WOS or guarantee / security by holding company for loan taken by WOS will be expressly allowed.

• Guarantee given/ security provided by holding company in respect of bank loan to subsidiary (note – not WOS) is also expressly allowed.

Page 54: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 186 – Loan / investment by Co• Prior approval through special resolution at AGM required if,

– Loan given– Guarantee / security in respect of any loan – Value of securities purchased > 60% of paid up cap + free reserves + securities premium; or> 100% of free reserves + securities premium; whichever is more

• Above limits not applicable for loan / guarantee to WOS/ JV & investments in WOS

• Sec 186 also applicable to private companies. Filing to be done with ROC within 30 days of holding AGM in case of special resolution.

54

Page 55: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 186 – Loan / investment by Co..• Above provisions in respect of loan / guarantee not applicable for

banks, insurance, HFC, NBFC in business of acquiring securities, acquiring shares in rights issue, company engaged in providing infrastructural facilities

• Investment / loan / guarantee / security can be offered only after Board resolution is passed – All Directors present at meeting to give consent

• In case of subsisting term loan from public FI, approval of such public FI also required. Such approval not required where limits mentioned earlier not exceeded and repayment is as per plan

• Loan should not be given at yield < Government security• Company which has defaulted on deposits repayment shall not give

loan / guarantee till such default continues• Company to maintain register to record such transactions. Such

register to be maintained permanently55

Page 56: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 188 – Related party transactions• Following transactions entered in to with related parties are called

related party transactions;a) sale / purchase / supply of goods / materialsb) Selling / buying of propertyc) Leasing of propertyd) Availing / rendering of servicese) Appointment of agent for purchase / sale of goods / materials /

services / propertyf) Related party’s appointment to office / place of profit in

company / subsidiary / associate companyg) Underwriting subscription of securities / derivatives of company

• “Office or place of profit” – any facility or remuneration received by the related party. In case of director, any facility or remuneration received above what he is entitled as director

56

Page 57: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 188 – Related party transactions..

• All related party transactions (RPT) to be pre-approved / ratified by Board / AGM within 3 months. Interested Director not to participate

• Interested member not to vote in AGM, for deciding approval

57

Approval process for related party transactions

Is paid up capital => 10 crores

Transactions require prior approval at

AGM through special

resolution

1.Is value of total transactions in a) & e) above during FY > 25% as per last FY

2.Is value of transactions in b)&d) > 10% of NW3.Is value of transactions in c)>10% of turnover4.Is value of f) > 2.5 lakhs p.m.5.Is underwriting contract for > 1% of NW

Yes

No

Yes

Is it an arm’s length transaction in ordinary course of business

Only Board resolution reqd

No

Yes

No

Page 58: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 188 – Related party transactions..• In case of 100% subsidiary, special resolution passed by holding

company is enough for transactions between holding company & subsidiary

• “Arms length transaction” – transaction between 2 related parties that is conducted as if they were unrelated, so that there is no conflict of interest

• Details of RPT to be mentioned in Board report, along with justification for entering in to the same

• If Board / AGM does not ratify a RPT, contract voidable at company’s option. If contract is with related party of director, the concerned director to indemnify for any loss caused to company

58

Page 59: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 2 (76) - Related party Related party with reference to a company

A person Director*

• * - includes “relatives”• KMP–CEO/MD/Manager, CS, WTD, CFO

KMP* Firm

Or relative is partner

Pvt Co

Is member / Director

Public Co

Is Director / members & holds with relatives > 2% paid up sh cap

Body corp

Controls action of Board / MD / Manager

Controls action

Holding coSubsidiaryAssociate co

Subsidiary

Director* / KMP*

• Manager – manages affairs of company (may / not be Director)

• Assoc Company - > 20% of cap , JV

59

Page 60: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 2 (77) – Definition of relative

Mr. A Mrs. A

• Relatives include all members of HUF• Father, mother, son, brother, sister also includes step-relations

MotherFather

Son

Son’s wife

Daughter

Daughter’s husband

Brother

Sister

60

Page 61: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Determination of arm’s length price

61

Nature of transaction Possible mechanism to determine ALP

Sale, purchase or supply of any goods or materials

Transfer Pricing guidelines for domestic / international transactions

Selling or otherwise disposing of, or buying, property of any kind

Since this is not in ordinary course of business, shareholder approval may be taken

Leasing of property Compare the lease cost with market determined price based on location, area, age of property etc to satisfy that it is at arm’s length

Availing or rendering of services Transfer Pricing guidelines for domestic / international transactions

Appointment of agent for purchase / sale of goods / materials / services / property

Market price can be determined in such cases

Related party’s appointment to office / place of profit in company / subsidiary / associate company

If Director is appointed as director even in subsidiary / associate company, it may be agreed that he/ she will not paid any fees in subsidiary / associate

Page 62: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Consequences of default

• Consequences of default in the above cases are either imprisonment or fine or both

62

Section & Default Party in default Imprisonment term

Fine range (Rupees ‘000s)

184 – Director does not disclose interest

Director 1 year 50 – 100

185 – Loans to Directors

Company NA 500-2500

Director/Other person

6 months 500-2500

186 – Loans / investment by Cos

Company NA 25-500

Office in default 2 years 25-100

188 – Related party transactions

Director-listed Co.

1 year 25-500

Director-other co. NA 25-500

Page 63: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Acceptance of Deposits

63

Page 64: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits

• Definition of “Deposit” – [Sec 2 (31)] – includes any receipt of money by way of deposit or loan or in any other form by a company, but does not include such categories prescribed in consultation with RBI.

• Definition of “Deposit” – Rule 2(1)(b) of Companies (Acceptance of Deposits) Rules, 2014 – includes any receipt of money by way of deposit / loan / other form, but does not include – – Amount received from Central / State Government– Amount received from foreign Government / approved foreign

donors– Bank loan– Loan from public financial institutions / insurance companies– Commercial paper / instrument issued as per RBI guidelines– Any amount received by a company from any other company

64

Page 65: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….– Amount received as securities application money (If securities are

not allotted within 60 days of receipt of money & still not refunded within 15 days thereafter, the money to be treated as deposits)

– Amount received from person, who at the time of receipt of money was a director (Director to give declaration that amount given to company is not out of borrowed money)

– Amount raised through secured bonds / Debentures or bonds / debentures compulsorily convertible in equity in 5 years

– Non-interest bearing security deposit received from employee, not exceeding his annual salary

– Non-interest bearing amount received / held in trust– Amount received in course / purposes of business

• As advance against goods / services provided it is appropriated as such within 365 days

65

Page 66: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….• Advance received under agreement for sale of property

provided it is duly registered• Security deposit against supply of goods / services• Advance received against long term projects (in any of above 4

sub-points, if amount becomes refundable because company does not have permission to deal in that business, amount to be considered as deposits)

– Amount brought in by promoters / relatives as unsecured loan at insistence of bank / financial institution

66

Page 67: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….

• Eligible company – Defined in Companies (Acceptance of Deposits) Rules 2014 – means a public company which has obtained prior consent of AGM through special resolution for accepting public deposits; and has– Net worth of at least Rs. 100 crores, or– Turnover of at least Rs. 500 crores,

67

Provisions applicable in respect of deposits determined by type of company

Private company Public company Eligible company

Page 68: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….

68

Key questions Private Company

Public Company

Eligible Company

From whom can deposits be accepted Members Members Members + Public

What is the minimum tenure of deposits 6 months 6 months 6 months

Can deposits < 6 months repayment be accepted

Yes, provided such deposits are not > 10% of NW. Under no circumstances – deposits < 3 months maturity to be accepted

What is the maximum tenure of deposits 3 years 3 years 3 years

Can deposits which are repayable on demand be accepted / renewed

No No No

Is there a monetary limit on total deposits o/s from members

O/s + fresh deposits to be < 25% NW

O/s + fresh deposits to be < 25% NW

O/s + fresh deposits to be < 10% NW

• NW = paid up capital + free reserves

Page 69: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….

69

Key questions Private Company

Public Company

Eligible Company

Is there a monetary limit on total deposits o/s from public

NA NA O/s + fresh deposits to be < 25% NW

What is the monetary limit for Government companies wrt deposits

O/s + fresh deposits to be < 35% NW

What is the maximum rate of interest payable on deposits

Rate <= maximum ROI prescribed by RBI for deposit accepting NBFCs (currently 12.5%)

Is deposit insurance compulsory in case of deposits

Yes Yes Yes

What is the minimum amount of deposit insurance to be taken

Rs. 20,000 Rs. 20,000 Rs. 20,000

Can the cost of deposit insurance be passed on to the depositors

No No No

Can unsecured deposits be accepted Yes Yes Yes

Page 70: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….

70

Key questions Private Company

Public Company

Eligible Company

Is deposit insurance required even for unsecured deposits

Yes Yes Yes

What security is to be obtained for secured deposits

Any Assets (other than intangible assets)

What should be quantum of security in case of secured deposits? How is it valued?

Security of assets charged should cover deposit + interest, not covered by deposit insurance. Deposits + interest not to exceed market value of assets charged (valued by registered valuer)

What happens in case deposits are not fully secured?

Deposits will be termed as “unsecured deposits”

Is appointment of deposit trustees compulsory

Only for secured deposits

What happens to o/s deposits at commencement of the Act

To be repaid within 1 year, or extended time allowed by Tribunal

Existing repayment schedule to continue in case of regular repayment

Page 71: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….Company decides to

accept depositsSpecial resolution passed by AGM

Board authorises form and content of circular /

advertisement

Board to;1.Send Circular to ROC 30 days before issue (signed by >50% directors)2. Obtain deposit insurance 30 days before issue3.Appoint deposit trustees and execute deposit trust deed at least 7 days before issue, in case of secured deposits4.Obtain credit rating in case of eligible companies – through out tenure

Invitation in form of circular / advertisement issued to members / public;1.Send by registered post AD / speed post / electronic mode2.Publish in English / Vernacular newspaper in place where registered office is situated3.Publish on company’s website, in case of invitation to public4.Consent of deposit trustees to appear in the circular5.Circular to be valid for 6 months from end of financial year or up to AGM, whichever is earlier. Fresh circular for every financial year

Next slide

71

Page 72: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….Previous slide

Form to be submitted by intending depositor

Company to accept deposits – furnish deposit receipt within 2 weeks – create charge within 30 days in case of

secured deposits

Company to maintain register which contains various details pertaining to the depositor and depositsEntry to be made in register within 7 days of issue of deposit receiptRegister to be maintained for 8 years from date of latest entry in register

By 30th April of every financial year, keep 15% of deposit to be repaid in current + next financial year, in a scheduled bank

(Deposit repayment reserve account).Amount to be free from lien

By 30th June of every financial year, file return along with certain audited

information to ROC

72

Page 73: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….

• Deposit trustee not to be appointed, if he is– Director / KMP / employee of company / holding / subsidiary

company or relative of aforesaid– Depositor in the company– Indebted to company / holding / subsidiary– Has material pecuniary relationship with company– Has guaranteed repayment of the company’s deposits

• Deposit trustee can be removed only if approved by all directors in meeting. Such meeting to include independent director, if applicable

• Duty of deposit trustee to enforce compliance as required by Law and ensure protection of depositors interest

• Depositors meeting can be called on requisition by depositors with 10% of total deposit value

73

Page 74: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

Sec 73-76 – Acceptance of deposits….

• Deposits in case of banks and NBFCs to be regulated by RBI – these provisions not to apply

• Depositor has right to make nomination• If repayment made by company after 6 months, but before expiry of

period – interest rate to be reduced by 1%• Penal rate of interest @ 18% p.a. payable on overdue period in case

deposits matured & claimed but remaining unpaid

74

Page 75: Sushrut Chitale MUKUND M CHITALE & CO. 205A, AGRAWAL SHYAMKAMAL, VILE PARLE EAST, MUMBAI -400057 Landline: +91-22-2614 3127 website: .

Sushrut Chitale

THANK YOU!

Mukund M Chitale & Co.204/205, Agrawal Shyamkamal – A,Vile Parle East, Mumbai – 400057,

Mobile: 91 98211 12904Email: [email protected]: www.mmchitale.com

Sushrut Chitale

75


Recommended