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GOVERNANCE IN INDIA UNDER THE
NEW COMPANIES ACT, 2013 AT
PREMIER CORPORATE GOVERNANCE CONFERENCE 2015
ON
OCTOBER 28, 2015
VENUE: THE WANDERERS CLUB, JOHANNESBURG
CS ATUL H. MEHTAPRESIDENT -ICSI
ABOUT ICSI
• CONSTITUTED UNDER AN ACT OF PARLIAMENT I.E. THE
COMPANY SECRETARIES ACT, 1980
• TO DEVELOP AND REGULATE THE PROFESSION OF
COMPANY SECRETARIES IN INDIA
• AWARDS THE CERTIFICATE OF BESTOWING THE
DESIGNATION OF COMPANY SECRETARY (CS) TO A
CANDIDATE QUALIFYING FOR THE MEMBERSHIP OF THE
INSTITUTE
• OVER 42,000 MEMBERS INCLUDING 7,300 MEMBERS
HOLDING CERTIFICATE OF THE PRACTICE
• OVER 4,00,000 STUDENTS
PAPER 1: COMPANY LAW
1. COMPANIES ACT, 2013 2. LLP ACT, 2008
PAPER 3: ECONOMIC AND COMMERCIAL LAWS
3. FEMA, 1999 4. FOREIGN CONTRIBUTION ( REGULATION )ACT, 2010 5. SPECIAL ECONOMIC ZONES ACT, 2005 6. COMPETITION ACT, 2002 7. CONSUMER PROTECTION ACT, 1986 8. THE PATENTS ACT, 1970 9. THE TRADE MARKS ACT, 1999 10. COPYRIGHTS ACT, 1957 11. GEOGRAPHICAL INDICATION OF GOODS (REGISTRATION AND PROTECTION) ACT, 199 12. DESIGN ACT, 2000 13. ARBITRATION AND CONCILIATION ACT, 1996 14. TRANSFER OF PROPERTY ACT 15. STAMPS ACT 16. CONTRACT ACT, 1872 17. PREVENTION OF MONEY LAUNDERING, ACT, 2005 18. ESSENTIAL COMMODITIES ACT, 1955 19. THE LEGAL METROLOGY ACT, 2009 20. SOCIETIES REGISTRATION ACT, 1860 21. THE INDIAN TRUSTS ACT, 1882 22. THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 23. THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 24. PUBLIC LIABILITY INSURANCE ACT, 1991 25. THE ENVIRONMENT (PROTECTION) ACT, 1986 26. THE NATIONAL GREEN TRIBUNAL ACT, 2010 27. AIR (PREVENTION AND CONTROL OF POLLUTION) ACT, 1981. 28. WATER (PREVENTION AND CONTROL OF POLLUTION) ACT, 1974 29. THE REGISTRATION ACT, 1908
• PAPER 4: TAX LAWS AND PRACTICE
• 30. INCOME TAX ACT , 1961
• 31. WEALTH TAX ACT, 1957
• 32. SERVICE TAX
• 33. VALUE ADDED TAX
• 34. CENTRAL SALES TAX
• PAPER 6: CAPITAL MARKET AND SECURITIES LAWS
• SECURITIES CONTRACTS (REGULATION) ACT, 1956
• SEBI ACT, 1992
• DEPOSITORIES ACT, 1996
• PAPER 7: INDUSTRIAL, LABOUR AND GENERAL LAWS
• FACTORIES ACT, 1948
• MINIMUM WAGES ACT, 1948
• PAYMENT OF WAGES ACT, 1936
• EQUAL REMUNERATION ACT, 1976
• EMPLOYEES’ STATE INSURANCE ACT, 1948
• EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
• PAYMENT OF BONUS ACT, 1965
• PAYMENT OF GRATUITY ACT, 1972
• WORKMEN’S COMPENSATION ACT, 1923
• CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970
• MATERNITY BENEFIT ACT,1961
• THE CHILD LABOUR (PROHIBITION AND REGULATION) ACT, 1986
• INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946
• INDUSTRIAL DISPUTES ACT, 1947
• INDIAN TRADE UNION ACT, 1926
• THE LABOUR LAWS EXEMPTION FROM FURNISHING RETURNS AND MAINTAINING REGISTER BY CERTAIN ESTABLISHMENTS ACT, 1988
• EMPLOYMENT EXCHANGES(COMPULSORY NOTIFICATION OF VACANCIES) ACT, 1959
• CONSTITUTION OF INDIA
• SPECIFIC RELIEF ACT, 1963
• LIMITATION ACT, 1963
• INDIAN EVIDENCE ACT, 1872
• CODE OF CIVIL PROCEDURE
• INDIAN PENAL CODE
• CRIMINAL PROCEDURE CODE
• RIGHT TO INFORMATION (RTI) ACT, 2005
PROFESSIONAL PROGRAMME LAWS COVERED UNDER NEW SYLLABUS
PAPER 1: ADVANCE COMPANY LAW AND PRACTICE COMPANIES ACT, 1956/2013 (ALREADY COVERED UNDER EXECUTIVE)
PAPER 3: CORPORATE RESTRUCTURING, VALUATION AND INSOLVENCY
COMPANIES ACT, 1956/2013 (ALREADY COVERED UNDER EXECUTIVE)
1. SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002
2. RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 3. SICA 1985
PAPER 4: INFORMATION TECHNOLOGY AND SYSTEMS AUDIT
4. INFORMATION TECHNOLOGY ACT, 2002
PAPER 7: ADVANCE TAX LAWS AND PRACTICE
5. INCOME TAX ACT , 1961 6. WEALTH TAX ACT, 1957 7. CENTRAL EXCISE LAWS 8. CUSTOMS LAWS
ELECTIVE PAPER 9.1: BANKING LAW AND PRACTICE
9. RBI ACT 1935 10. BANKING REGULATION ACT 1949 11. LENDER'S LIABILITY ACT
ELECTIVE PAPER 9.3: INSURANCE - LAW AND PRACTICE
12. INSURANCE ACT 13. INSURANCE REGULATORY AND DEVELOPMENT ACT 14. MOTOR VEHICLES ACT 15. MARINE INSURANCE ACT 16. EMPLOYEES STATE INSURANCE ACT
VISION & MISSION
VISION
“TO BE A GLOBAL LEADER IN PROMOTING
GOOD CORPORATE GOVERNANCE"
MISSION
“TO DEVELOP HIGH CALIBRE PROFESSIONALS
FACILITATING GOOD CORPORATE GOVERNANCE ”
INDIA IS UNIQUE
• 14,00,000 PLUS REGISTERED COMPANIES IN INDIA.
• 7120 LISTED COMPANIES
• 100 PLUS SME LISTED COMPANIES AND STILL GROWING
• BSE – ASIA'S FIRST & FASTEST STOCK EXCHANGE WITH
THE SPEED OF 200 MICRO SECONDS.
• THE COMPANIES LISTED ON BSE COMMAND A TOTAL MARKET
CAPITALIZATION OF USD 1.68 TRILLION AS OF MARCH 2015.
• WORLD'S LEADING EXCHANGES (5TH LARGEST IN MARCH 2015) FOR
INDEX OPTIONS TRADING
NEW CONCEPT IN CO. ACT 2013
• ONE-PERSON CO /PRIVATE
CO / SMALL CO
/DORMANT CO
• KEY MANAGERIAL
PERSONNEL
• PROMOTER
• INDEPENDENT DIRECTOR
• FINANCIAL YEAR – 31ST
MARCH
• CONSOLIDATED FINANCIAL
STATEMENTS
• MANDATORY AUDITOR
ROTATION
• NATIONAL COMPANY LAW
TRIBUNAL (TRIBUNAL OR
NCLT)
• SERIOUS FRAUD
INVESTIGATION OFFICE
(SFIO)
• CORPORATE SOCIAL
RESPONSIBILITY (CSR)
• CLASS ACTION SUITS.
• WOMAN DIRECTORS/
RESIDENT DIRECTOR
• OFFICER IN DEFAULT
• NEW LISTING REGULATIONS
• E VOTING / VIDEO
CONFERANCE
CSR is applicable to every company having-
[Sec.135(1)]
Net worth of Rs. 500 Crore or more,
or
Turnover of Rs. 1000 Crore or more
or
Net profit of Rs. 5 Crore or more
Any Company which ceases to meet the abovecriteria for three consecutive financial years shall notbe required to comply with CSR provisions.
[ Rule 3(2)]
Applicability
CLAUSE 49 OF LISTING AGREEMENTS
UNDER REVISED CLAUSE 49, A PERSON SHALL NOT SERVE
AS AN INDEPENDENT DIRECTOR IN MORE THAN 7 LISTED
COMPANIES.
FURTHER, ANY PERSON WHO IS SERVING AS A WHOLE TIME
DIRECTOR IN ANY LISTED COMPANY, SHALL SERVE AS AN
INDEPENDENT DIRECTOR IN NOT MORE THAN 3 LISTED
COMPANIES.
NEW CONCEPT IN CO. ACT 2013( TWO MAJOR CHANGES FOR CS PROFESSION
)
• SECRETARIAL AUDIT FOR BIGGER COMPANIES
• COMPLIANCE OF ALL LAWS
• SECRETARIAL STANDARDS: THE 2013 ACT REQUIRES EVERY COMPANY TO
OBSERVE SECRETARIAL STANDARDS SPECIFIED BY THE INSTITUTE OF COMPANY
SECRETARIES OF INDIA WITH RESPECT TO GENERAL AND BOARD MEETINGS
[SECTION 118 (10) OF 2013 ACT],
REGULATORS ARE ACTIVE FOR STAKEHOLDERS
REGULATORS ARE ACTIVE FOR STAKEHOLDERS
• MINISTRY OF CORPORATE AFFAIRS (MCA)
• SECURITIES BOARD OF INDIA (SEBI)
• COMPETITION COMMISSION OF INDIA (CCI)
CHANGING ROLE OF COMPANY SECRETARY
• NO CORPORATE GOVERNANCE - NO CORPORATE GROWTH
• NO CORPORATE GROWTH – NO ECONOMIC GROWTH
• NO ECONOMIC GROWTH – NO COUNTRY GROWTH
COMPANY SECRETARY
24
CompanyPolicies
ManagementFunctions
Regulatory Compliances
Ethics andMutual Trust
COMPANY SECRETARY
navigates the
CORPORATE GROWTH
with
GOOD GOVERNANCE
COMPANY SECRETARY AS GOVERNANCE PROFESSIONAL-
MOTIVATES, CULTIVATES AND NURTURES
BEST GOVERNANCE PRACTICES IN A
CORPORATE;
EXHIBITS, PROFESSES INTEGRATION OF
COMPLIANCE FRAMEWORK TO SAFEGUARD
THE CORPORATE FROM COMPLIANCE
FAILURES;
PROVIDES CUSHION TO STAKEHOLDER
INTEREST AND GUIDES MANAGEMENT AND
BOARD ON RELATED ISSUES.
EXPECTATIONS FROM COMPANY SECRETARY
• REPOSITORY OF KNOWLEDGE IN VARIOUS ASPECTS OF BUSINESSADMINISTRATION, GOVERNANCE AND COMPLIANCES,
• PROVIDING VALUE ADDED SUPPORT TO BOARD IN POLICYFORMULATION AND DECISION MAKING PROCESS,
• HUB OF KNOWLEDGE IN ANY ORGANIZATION.
• CONSCIENCE KEEPER OF THE COMPANY AND
• GUARDIAN OF CORPORATE LEGITIMACY.
26
COMPANY POLICIES
VARIOUS POLICIES & MANDATES UNDER EVOLVED REQUIREMENT TO MAINTAIN VARIOUS POLICIES &
MANDATES UNDER THE NEW ACT.
• CSR POLICY
• RISK MANAGEMENT POLICY
• RPT POLICY
• NRC POLICY
• WHISTLE BLOWER POLICY – A VIGIL MECHANISM
COMMITTEES UNDER CO ACT
COMMITTEES UNDER CO ACT
• AUDIT COMMITTEE
• NOMINATION AND REMMUNERATION COMMITTEE
• STAKEHOLDERS RELATIONSHIP COMMITTEE
• CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
INDIA IS CHANGING
THANK YOUCS ATUL MEHTA
PRESIDENT
ICSI