1. OVERVIEW OF C OMPANIES ACT,2013 CA. Arun Saxena Saxena & Saxena Chartered Accountants 811, Ansal Bhawan 16, Kasturba Gandhi Marg, New Delhi – 110 001. Mob.: 9810037364 E-mail : arunsaxena@saxenaandsaxena.com

2. The Companies Act, 2013 Time line  18 Dec., 2012Passed by Lok Sabha  8 th August, 2013passed by Rajya Sabha  29 th August 2013got President’s assent  30 th August 2013Gazetted as Act no. 18 of 2013  12 th September 201398 Sections notified  26 th March 2014183 Sections notified w.e.f. 1.4.2014 2 SAXENA & SAXENA

3. CA, 2013 vs. CA, 1956 CA, 2013CA, 1956 CHAPTERS2913 SECTION470658 SCHEDULE715 RULES400 Approx.Nil 3 SAXENA & SAXENA

4. DEFINITIONS

5. Associate company  Sec 2(6) “associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.  Explanation.—For the purposes of this clause, “significant influence” means  control of at least twenty per cent. of total share capital, or  of business decisions under an agreement;

6. Books & Papers: Section 2(12)  Books of accounts  Deeds, Vouchers, writings, Documents, minutes and registers. SAXENA & SAXENA 6

7. Books of accounts : Section 2(13)  All money received and expended  All sales and purchases of goods and services  All assets and liabilities  Items of costs (Section 148) SAXENA & SAXENA 7

8. Financial statement  Sec 2(40)- new definition.  Financial statement includes:  a balance sheet as at the end of the financial year.  A profit and loss account for the financial year.  Cash flow statement for the financial year (except OPC, small company and dormant company).  A statement of changes in Equity, if applicable. and  Any explanatory notes.

9. Financial Year : Section 2(41)  31 st march every year.  For 1 st year of incorporation  If incorporated before 1 st January– 31 st March same year.  Otherwise -- 31 st march of next financial year.  Transition period – 2 years SAXENA & SAXENA 9

10. Key Managerial Personnel  Sec 2 (51) “key managerial personnel”, in relation to a company, means—  (i) the Chief Executive Officer or the managing director or the manager;  (ii) the company secretary;  (iii) the whole-time director;  (iv) the Chief Financial Officer; and  (v) such other officer as may be prescribed;

11. Officer in default  Sec 2(60) “officer who is in default”, for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the  following officers of a company, namely:— (i) whole-time director; (ii) key managerial personnel; (iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified;

12. Officer in default (iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default; (v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity;

13. Officer in default (vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance; (vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer;

14. Promoter  Promoter means a person:  Who has been named as such in MOA or  Identified by the co. in A/R under section 92 or  Who has control over the affairs of the co. directly or indirectly as A shareholder A director or Otherwise  In accordance with whose advice, direction or instructions the BOD is accustomed to act  But does not include a director acting in professional capacity.

15. Relative  Section 2 (77) ‘‘relative’’, with reference to any person, means anyone who is related to another, if— (i) they are members of a Hindu Undivided Family; (ii) they are husband and wife; or (iii) one person is related to the other in such manner as may be prescribed;

16. Rule 4 16 SAXENA & SAXENA 1Father (including step father) 2Mother (including step mother) 3Son (including step son)4Son’s wife 5Daughter6Daughter’s husband 7Brother (including step brother) 8Sister (including step sister)

17. Related Party Sec 2 (76) “related party”, with reference to a company, means— (i) a director or his relative; (ii) a key managerial personnel or his relative; (iii) a firm, in which a director, manager or his relative is a partner; (iv) a private company in which a director or manager is a member or director; (v) a public company in which a director or manager is a director or holds along with his relatives, more than two per cent. of its paid-up share capital;

18. Related Party (vi)any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager; (vii) any person on whose advice, directions or instructions a director or manager is accustomed to act:  Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity;

19. Related Party (viii) any company which is— (A) a holding, subsidiary or an associate company of such company; or (B) a subsidiary of a holding company to which it is also a subsidiary; (ix) such other person as may be prescribed;

20. Related Party Transaction (Section 188) Except with approval of Board of Directors, a company shall not enter into any contract or arrangement and the related party with respect to:  Sale, Purchase or supply of goods or material and services.  Selling or disposing off or buying of property  Lease of property  Appointment of any agent for sale, purchase of goods, services or property.  Appointment of any related party to any office or place of office of the company or its subsidiary or associate company.  Contract for underwriting. 20 SAXENA & SAXENA

21. Conditions for Related Party Transaction (Rule 15) 1) Agenda shall disclose: a) Name and relationship. b) Nature, duration and particulars of contract c) Terms and conditions of RPT d) Any advance paid / received e) Manner of determining the pricing f) Any other information. 2) Director interested shall not participate in discussion. 21 SAXENA & SAXENA

22. Conditions for Related Party Transaction (Rule 15) 3) S/R is required if: a) Paid up capital Rs.10.00 crores or more. b) Sale / purchase / supply exceeds Rs.25% of Annual turnover. c) Sales of property > 10% of networth. d) Leasing of property > 10% of networth or 10% of Turnover. e) Availing services > 10% of networth f) Appointment to any office or place of office > Rs.2.50 lacs per month. g) Remuneration for underwriting exceeds 1% of networth. 22 SAXENA & SAXENA

23. THANK YOU 23 SAXENA & SAXENA