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