Checklist for the Directors and Key Managerial Personnel (“KMP”)

As per section 204 of the Companies Act, 2013 the prescribed classes of companies are required to get secretarial audit done, and to annex the secretarial audit report with its Board report.

Here is the checklist for Directors and Key Managerial Personnel (“KMP”) to be verified :-

Check whether

1. The minimum number of directors is as per the provisions of section 149 of the Act.

2. Under Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014), the

company has appointed at least one Woman Director, if the company falls under any one following

category -

(i) a listed company;

(ii) other public company having -

     (a) paid–up share capital of one hundred crore rupees or more; or

     (b) turnover of three hundred crore rupees or more:

3. The Company being the listed company has at least one-third of the total number of directors as

independent directors or such higher number as specified in the listing agreement.

4. If the company falls under the following class or classes of companies, whether the company has at

least two directors as Independent Directors -

(i) the Unlisted Public Companies having paid up share capital of ten crore rupees or more; or

(ii) the Unlisted Public Companies having turnover of one hundred crore rupees or more; or

(iii) the Unlisted Public Companies which have, in aggregate, outstanding loans, debentures and

deposits, exceeding fifty crore rupees:

5. In case it is a listed company, whether it has any director elected by small shareholders and if so,

whether such appointment is in compliance with Rule 7 of the Companies (Appointment and

Qualification of Directors) Rules, 2014).

6. The company is following the provisions for determination of office of directors by retirement by

rotation (Section 152).

7. The company other than Government Company and Private Company has ensured the eligibility of

directors for election to the office of a director (Section 160).

8. The appointment of additional director, alternate and nominee director, filling up of casual vacancies has been done as provided in section 161.

9. The company (other than Private Company) has ensured that the appointment of directors is voted

individually (Section 162).

10. The company has received the consent to act as directors (Section 152) in Form No. DIR-2 and

Form No. DIR.12 was filed for appointment of director.

11. None of the directors is disqualified from continuing to be a director (Section 164).

12. None of the directors has vacated office during the year (Section 167).

13. The provisions of section 168 were complied with at the time of resignation of director.

14. None of the directors was removed from the board.

15. If the company is either a listed company or any other public company having a paid-up share

capital of ten crore rupees or more, if yes, it has appointed whole-time key managerial personnel

and filed a return as per DIR 12 with registrar within thirty days of such appointment or of any changes therein.

       A company other than the companies covered above, which has a paid up share capital of five            crore rupees or more, has appointed a whole-time company secretary.

16. Appointment of key managerial personnel is made by a board resolution.

17. Ensure that as per section 197, the total managerial remuneration payable by a public company

does not exceed 11% of the net profits of the company and where the limit is exceeded, the same is

approved in general meeting and approved by the Central Government. It must be noted that if a

company has no profits or when its profits are inadequate , the company shall pay no remuneration

to its directors, except in accordance with schedule V.

18. Ensure that the procedural aspects relating to appointment of managing director or whole-time

director or manager including the filing of the necessary return are complied with.

Indicative list of documents to be checked

• Articles of Association

• Minutes papers of Board Meetings

• Notice and minutes of Annual General Meeting, Report of AGM

• Register of directors and KMP

• DIR-2, DIR-6, DIR-8, DIR-9 (if any), DIR-10 (if any), DIR-11, DIR-12

• Declaration of independence given by Independent Directors

• Filings with Stock Exchanges

• Balance sheet and P&L account and Board’s Report