MCA’s Voluntary Guidelines for Companies for providing information on websites


This guideline is voluntarily applicable for a company having paid up capital not less than Rs. 10 crore (Rs.10,00,00,000/- or more) or having more than 100 members. (Though, I could not understand, why MCA selected a class of company for this voluntary guideline. Whether, they will prosecute other companies if they want to follow these guidelines. In my views, the class of companies mentioned in these guidelines should be under “Comply or Explain” and other companies need no explanation, if they choose not to follow these guidelines.)

[UPDATE: There is nothing to suggest that these guideline are in force after the Companies Act, 2013 and Rules made there under. The Act, otherwise, has own list of compliances for providing information on websites.]

All companies, whether listed or non-listed including private companies limited by share are included in these guideline if they falls under abovementioned criteria.

The guideline has first requirement of a functional website. In internet word, any website which is user-friendly interactive website is considered as functional website. All functional website are dynamic in nature not static.

The company is required to put some basic information within 3 month of close of the previous year. As the term previous year is not a term of company law jurisdiction, we may use layman meaning to the term. The term previous year is being used for last financial year of the company.

The basic information suggested in this guideline is:

  1. General information about company:
    1. Company Business,
    2. Risk and concerns of company,
    3. Industry scenario,
    4.  Brand information,
    5. Experiences in years,
    6. Core competence, and
    7. Market share.
  2. Detail of Board of Directors:
    1. Name and Address of Directors,
    2. Details of promoters and their shareholdings,
    3. Code of conduct for Directors and senior management,
    4. Remuneration of Managing Director/whole time director,
    5. Number and Date of board Meetings for last 3 years,
    6. Date of Annual general meeting s for last 3 years (Here, I think, Extra ordinary General Meeting should also be included), and
    7. Attendance of each director in each meeting for last 3 years.
  3. Audit Committee:
    1. Description,
    2. Terms of reference,
    3. Composition,
    4. Date of Meeting for last 3 years, and
    5. Attendance of each member in last 3 years.
  4. Functional Information:
    1. Financial information and ratios, and
    2. Comparison of important ratios with industry peers.
  5. Subsidiary:
    1. Name of subsidiary company,
    2. Percentage of shareholdings there,
    3. Turnover of last 3 years, and
    4. Profit after tax for last 3 years.
  6. Share issued in last 5 years
    1. Share issued,
    2. Issue price,
    3. shareholdings pattern,
    4. Detail of registrar and transfer Agent (RTA),
    5. Date of book closure,
    6. Date of dividend payment for previous year,
    7. Name, Designation and contact number, and
    8. Information of IPO/FPO including withdrawn.
  7. Investor information:
    1. Composition of Shareholders/ investors grievance committee,
    2. Reference of such committee,
    3. Detail of shareholders complaints in last 3 years; received, resolved and pending,
    4. Auditors’ qualification, (In my views MCA want to details of qualification made by auditors to the financials of the company.)
    5. Any penalty imposed by government/court, and
    6. Complaint of Insider trading during last 3 years.
  8. Particulars of share sold/purchased in company by directors and their relatives during last 3 years.
  9. Online investor grievance Complaint system and its online follow-up till resolution.
  10. Detail of related party transactions during last 3 years and detail of mandatory compliance done.
  11. Initiative towards corporate Social Responsibility and Environment Protection during last 3 years.
  12. Detail of pending litigation likely to affect financial position and working results.

Please note blog post is not a professional advice but general information about the subject covered here. In case, you have specific query, please seek professional advice or contact author.

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One response to “MCA’s Voluntary Guidelines for Companies for providing information on websites

  1. I have mailed to MCA on this subject. Copy of the mail is here:

    Subject: Suggestions for “voluntary guidelines for companies for providing some information on their website”

    Dear Madam,
    I am writing my this mail to bring into your notice some point in “voluntary guidelines for companies for providing some information on their website” need be addressed by MCA.
    1. As per guidelines, these are voluntary guidelines and seems to be outside even “Comply or Explain” mechanism. In my view such pure voluntary guidelines need not target any particular class of companies and should be made voluntary to all companies. After sometime, these guideline may be put under “Comply or Explain” mechanism for a particular class of companies.
    2. In para 2(ii), Date for Annual General Meetings for last 3 years need to disclosed. In my suggestion, Extra-ordinary general meetings may also be included herein.
    3. The term “Auditors’s qualification” in para 2(vii) may be misunderstood. In my suggestion it should be “Qualification to Balance Sheet made by auditors” or some other suitable term.

    Thanks, Regards and Best Wishes,
    Yours
    Aishwarya Mohan Gahrana

    Like

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