Secretarial Audit - Compliance of all Laws
How to Begin
(Corporate Compliance Management)
By:- Mr. Pavan Kumar Vijay
July 30th 2014
Time has come.. The compliance
is not merely a legal compliance
but it is a NECESSITY Now
Begin the New Era of
Corporate Compliance
Management
(which starts with Clause
49)
Corporate Compliance in System
Clause 49 of Listing Agreement:
in the year 2003
The Board shall periodically review
compliance reports of all laws
applicable to the company, prepared
by the company as well as steps taken
by the company to rectify instances of
non-compliances.
Now New
Companies Act 2013
All Applicable Laws in Act
Sec 204 of New Companies Act:
Secretarial Audit for Bigger
Companies
..............................................................
(Mention the other laws as may be
applicable specifically to the company)
Applicability Present Rules
Applicable to
9Listed Companies and
9Public Companies
Paid up Capital of Rs. 50 Cr or more
Turnover of Rs. 250 Cr or more
Applicability Expected Rules
Applicable to
9Listed Companies and
9Public Companies
Paid up Capital of Rs. 50 Cr or more
Turnover of Rs. 250 Cr or more
Loan of Rs. 100 Cr or more
All Applicable Laws Legal Part
Form MR - 3
All Applicable Laws System Part
Adequate System and Procedure
All Applicable Laws Audit Part
Non Compliance
Observation
Audit Qualification
Reservation
Adverse Remarks
Do you usually confront with these??
How to identify
the laws and
implement them
How to make
compliances
on time?
How to do
Audit and
till what
extent
IMPLEMENTINGEFFECTIVE
COMPLIANCEMANAGEMENTSYSTEM
What is Compliance of all laws?
Compliance of all laws
Not just any other compliance
Compliance of ALL LAWS
Compliance of ALL LAWS
Company Law
Economic and Commercial Law
Tax Laws
Capital Markets and Securities Laws
Industrial, Labour and General Laws
Secretarial Audit, Compliance Management and Due Diligence
Corporate Restructuring, Valuation and Insolvency
Banking Law and Practice
Capital, Commodity and Money Market
Insurance Law and Practice
Intellectual Property Rights - Law
International Business-Laws
How CCM Works???
General Laws (Applicable to all
companies)
Corporate
laws
Taxation
Laws
Industrial &
Labour Laws
Property
laws
(Based on Number of employees)
10 or more
20 or more
25 or more
100 or more
1000 or more
Event Based Laws
Intellectual
Property Laws
Custom Tax
laws
Foreign
Exchange Laws
Structure Based Laws
Different Corporate Structures
Listed Public
Companies
Unlisted Public
Companies
Private Limited
Companies
Public Sector
Undertakings
Sector Specific Laws
Manufacturing
Trading
Service
Segment Wise Laws
State Wise Laws
Labour
Welfare Act
Shops and
Commercial
Establishment
Act
National
Festival
Holiday Act
Different Geographical Laws
Global
Operations
Indian Operations
Preparation for Implementing
Compliance Management System
About CCM
CCM First Five Steps
STEP I Corporate Dossier
STEP II Questionnaire
STEP III Identification
Process
STEP IV Evaluation Process
[Event based Laws]
Step V : Compliance Organisation
Structure
For Rights
Assignment
Case Study
Corporate Compliance
Management Cement
Industry
Case Study Cement Industry
Understanding The Company
CEMENT INDUSTRY
Public Limited Company
Listed Company BSE, NSE
Manufacturing & Trading
Exporting Company
10,000 No. of Employees (Approx.)
Units Located at Bhubaneswar, Rajnagpur
Case Study Cement Industry
Identification of Applicable Laws
OnthebasisofGeneralCorporateInformation PublicCompany,ListedatBSE,
NSE
Companies Act, 2013
Income Tax Act, 1961
SEBI (Insider Trading) Regulations, 2009
SEBI (Substantial Acquisition of Shares & Takeovers) Regulations,
2011
Listing Agreement
Case Study Cement Industry
Identification of Applicable Laws
OnthebasisofSector ManufacturingandTrading
National Environment Policy
Environment (Prevention of pollution control) Act, 1986
Central Excise Act, 1944
Case Study Cement Industry
Identification of Applicable Laws
OnthebasisofTypeofIndustry Cement
Cement (Quality Control) Order, 2003
Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
Mines and Minerals (Development and Regulation) Act, 1957
Mineral Conservation and Development Rules, 1988
Metalliferous Mine Regulations, 2012.
Explosives Act, 2008
Case Study Cement Industry
Identification of Applicable Laws
OnthebasisofNo.ofEmployees
Employees Provident Funds & Miscellaneous Provisions Act, 1952
Factories Act, 1948
Payment of Gratuity Act, 1972
Industrial Dispute Act, 1947
Employees State Insurance Act, 1948
Payment of Wages Act, 1936
Minimum Wages Act, 1948 & Minimum Wages (Central) Rules, 1950
Advantages of Corporate Compliance
EasyQuantificationofrisk
EstablishingRiskappetite
Identifyandprioritizecontrols
MultitudeofComplianceobligations
BuildingStrongFoundations
ExtendedConfidenceto
Investors
IndependentDirectors
Management
GainingCompetitiveEdge
GoodComplianceSystemleadsto
ExcellenceinOperations
Can we do all this
MANUALLY
with thousands of Law ??
Let IT work for you.
Go for IT
Reduce time consumption in repetitive tasks.
Devote more time on Strategic analysis, value additions and
planning.
Use online regulatory services.
Make use of exhaustive databases, checklists, research papers
available online.
Manage multiple tasks through IT.
Use IT to shorten procedure and shift to STRATEGIES and PLANNING.
Go for IT
Adopt technology to defeat technology
is the latest survival mantra .
Effect of Technology
EasyCompliance
ImpossibleNon Compliance
Compliance Scheduler
Today
This Week This Month Select Period
Factories
Act
Income
Tax
Listing
Agreement
Companies
Act
Title
Return of
Income
Title
Notice by
Occupier
Title
Form
No
ITR-6
Form
No
------
Form
No
Due
Date
On or
before
31st
October
of the
assessme
nt year
Due
Date
At least
15 days
before he
begins to
occupy or
use
Due
Date
Appointment
of Director
Form 29 & 32
Within 30 days
of
appointment
Title
Shareholding
Pattern
Form
No
Fixed Format
Due
Date
Within 21
days from the
end of each
Quarter
Simplification: The Next Move
Developing Compliance Management Tools
Law wise
Period wise
Effective Usability
Triggering date & time
Triggering information input
Organisation type, Capital deployed, Business type
Product profile
Elements of Effective
Compliance Program
Customization of ..
At One Place
ROLE OF
Company Secretary in
Corporate Compliance
Management??
DIR A DIR B
DIR C
DIR D
DIR E
BOARD OF
DIRECTORS
COMPANY POLICIES
INVESTORS
INVESTORS
SUPPLIERS
SUPPLIERS
CUSTOMERS
CUSTOMERS
Company Secretary
EXTERNAL STAKEHOLDERS
LENDERS
LENDERS
GOVERNMENT
GOVERNMENTAND
AND
REGULATORS
REGULATORS
SOCIETY
SOCIETY
DEPARTMENTS IN A COMPANY
CORPORATE
PLANNING
LEGAL
FINANCE AND HUMAN
CORPORATEPRODUCTION
INFORMATION
MARKETING
ACCOUNTS RESOURCES
COMMUNICATION
AND OPERATIONS
TECHNOLOGY
OPERATIONAL PLANNING AND EXECUTION
CompanySecretaryisprimarilyresponsible
tocoordinatewith
COMPLIANCEOFALLLAWS
Therefore,WEAREANSWERABLE
Learn
The 80:20 Theory
Present Focus of Services
20%
Strategy
Management
Research
80%
All Applicable Laws
Filing forms & Applications
Registers & Returns
Checklists
Focus of services in emerging
Scenario
80%
Strategy
Management
Research
20%
All Applicable Laws
Filing forms & Applications
Registers & Returns
Checklists
See the Horizon Beyond Company
Law
Its time to go beyond the pre-defined framework.
Always say YES, its my area of work
Move with a Direction
Services Provided by an Ordinary CS
No
Direction
Piecemeal
services
Move with a new Direction
We have to move towards
That is
ega Firm
Single Window interface calls for Synergy of
Brand
Knowledge
Capital
Infrastructure
Collaboration is the buzz word
Economic
Brand
Synergy Taxation Laws
Corporate
Laws
Laws
Knowledge Commercial Law
Synergy International Trade Law
Capital Market Law
Infrastructure
Synergy
Labour Law
Capital
Synergy
Banking Law
Quality
of
Service
Single
Window
Interface
Global
Presence
Insurance Law
Securities LAw
Commerce
Collaborative Commerce
CS + CA +
CWA + MBA
+ LLB
Problems becomes opportunities,
when right people come together
Advantages of Collaborative
Commerce
Enhanced Capability to compete with giants
Broader Reach
Brand leverage
Wider Area of Expertise
Risk Minimization
Attraction of best talent
"We do not have to become heroes overnight
Just a step at a time, meeting each thing that comes
up, seeing it is not as dreadful as it appeared,
discovering we have the strength to stare it down."
Quality Brand Building
Thus, Opportunities are Unlimited
Its just a matter of
Creativity, Confidence and Communication
and also Perception and Positive Thinking
So now, we need to prepare ourselves to
create niche in the emerging scenario
But merely optimism will not do
optimism with Confidence & Right
Attitude will
The emerging scenario requires us to reinvent
everything - to think of ourselves as
compared to others
When Opportunity does not knock your
door.
build the door.
But now opportunities have knocked your door
But still
You have to get off from your seat and open
the door.
Thank You
