Chapter 7 Segment-wise Role of Company Secretaries – Secretarial Audit Compliance Management and Due Diligence ICSI Study Material is designed strictly as per the latest syllabus and exam pattern.
Segment-wise Role of Company Secretaries – Secretarial Audit, Compliance Management and Due Diligence Study Material
Question 1.
Write a note on the following:
Statutory duties of a Company Secretary under the Companies Act, 2013. (June 2014, 4 marks)
Answer:
1. Duties of Company Secretary Sec. 205 (1) (c) read with Rule 10 of companies Appointment and Remuneration of Managerial Personnel Rules, 2014
The company secretary has following duties as per Section 205(1) and Rule 10:
a. Guidance to directors: to provide to the directors of the company, collectively and individually, such guidance as they may require, with regard to their duties, responsibilities and powers;
b. Facilitate the convening of meeting: to facilitate the convening of meetings and attend Board, committee and general meetings, and maintain the minutes of these meetings
c. Obtaining approvals: to obtain approvals from the Board, general meetings, the Government and such other authorities as required under the provisions of the Act
d. Representation: to represent before various regulators, Tribunal and other authorities under the Act in connection with discharge of various functions under the Act;
e. Assisting the board: to assist the Board in the conduct of the affairs of the company;
f. Advising board for good corporate governance: to assist and advise the Board in ensuring good corporate governance and in complying with the corporate governance requirements and best practices; and
g. Other duties: to discharge such other duties as may be assigned by the Board from time to time;
h. Other duties as prescribed under the Act and Rules: such other duties as have been prescribed under the Act and Rules.
2. Duties and functions of BOD, chair-person etc.: Section 205(2) provides that the provisions contained in Section 204 and Section 205 shall
not affect the duties and functions of the Board of Directors, Chairperson of the company, managing director or whole time director under this Act, or any other law for the time being in force.
Question 2.
Describe the role of a Company Secretary as an Insolvency Professional. (June 2019, 5 Marks)
Answer:
Company Secretary as Insolvency Professional:
Company Secretaries having passed necessary examination; possessing prescribed number of years of experience enrolled with an insolvency professional agency and registered with Insolvency and Bankruptcy Board of India (IBBI) as an insolvency professional, can take up matters relating to corporate insolvency resolution process as Interim Resolution /Resolution Professionals, and also take up voluntary liquidation cases They can also act as authorized representatives for a class of creditors in a meeting of Committee of Creditors in a resolution process.
As per the Insolvency and Bankruptcy Board of India Regulations, a member of the Institute of Company Secretaries of India having ten years’ of experience and have other requisite qualifications is eligible for registration as insolvency professional.
Question 3.
Your client wants to setup Food Processing Unit in the state of Uttarakhand. Describe the details about specific laws applicable to setup Food Processing Unit. (Dec 2019, 5 marks)
Answer:
Illustrative list of the Laws applicable to the food processing sector is as under
- Essential Commodities Act, 1955 (In Relation to Food)
- Export Quality Control and Inspection Act, 1963
- National Food Security Act, 2013
- Food Safety & Standard Act, 2006
- Food Safety and Standards Rules, 2011
- Food Safety and Standards (Packaging and Labelling) Regulations, 2011
- Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011
- Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011
- Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011
- Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011
- The Meat Food Products Order, 1973
- Meat and Meat Product Order, 1992 (MMPO)
- The Fruit Products Order, 1955
- Fruit Products (1st Amendment) Order, 2006
- Vegetables Product Order, 1967 (VPO)
- The Vegetable Oil Products (Control) Order, 1947
- The Edible Oils Packaging (Regulation) Order, 1998
- The Solvent Extracted Oil, De Oiled Meal, And Edible Flour (Control) Order,. 1967
- The Milk and Milk Products Order, 1992
- Respective State Food Laws.
Question 5.
Ramesh Kumar has received the certificate of membership as well as certificate of practice from the Institute of Company Secretaries of India on 31st March, 2019 and now he wants to become a Registered Valuer. Give your professional advice on the matter and also explain the qualification & disqualification of Registered Valuer to Ramesh Kumar. (Dec 2019, 5 marks)
Answer:
A Company Secretary in practice is recognized to be registered valuer for the asset class “Securities or Financial Assets” under Rule 3 of the Companies (Registered Valuer and Valuation) Rules, 2017. So Ramesh Kumar is recognized to be registered valuer for the asset class “Securities or Financial Assets” under the Companies (Registered Valuer and Valuation) Rules, 2017, as amended. However, he can become a registered valuer once he has at least three years of experience in the discipline.
Further, where valuation is required to be made in.respect of any stocks, shares, debentures, securities, etc. of a company under the provisions of Companies Act, 2013, it shall be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as prescribed under Section 247of the Companies Act, 2013 read with Rule 4 of Companies (Registered Valuers and Valuation) Rules, 2017.
To act as an Registered valuer in the Securities or Financial Assets the person should be the Member of the Institute of Chartered Accountants or the Institute of Cost Accountants of India or the. Institute of Company Secretaries of India; or MBA / PGDBM specialization in finance or; post graduate degree in finance and should have at least three years of experience in the discipline. Further, the person needs to complete and pass the Valuation Specific Education Course as per syllabus specified under rule 5 of the Companies (Registered Valuers and Valuation) Rules, 2017, as attended.
Further, a person is eligible to be a registered valuer if he/she
(a) is a valuer member of a registered valuers organisation;
(b) is recommended by the registered valuers organisation of which he is a valuer member for registration as a valuer;
(c) has passed the valuation examination under rule 5 within three years preceding the date of making an application for registration under rule 6;
(d) possesses the qualifications and experience as specified in rule 4;
(e) is not a minor;
(f) has not been declared to be of unsound mind;
(g) is not an undischarged bankrupt, or has not applied to be adjudicated as a bankrupt;
(h) is a person resident in India;
(i) has not been convicted by any competent court for an offence punishable with imprisonment for a term exceeding six months or for an offence involving moral turpitude, and a period of five years has not elapsed from the date of expiry of the sentence: .
(j) Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be registered;
(k) has not been levied a penalty under Section 271J of Income-tax Act, 1961 and time limit for filing appeal before commissioner of income-tax (appeals) or income-tax appellate tribunal, as the case may be has expired, or such penalty has been confirmed by income-tax appellate tribunal, and five years have not elapsed after levy of such penalty; and
(l) is a fit and proper person.
Explanation: For determining whether an individual is a fit and proper person under these rules, the authority may take account of any relevant consideration, including but not limited to the following criteria
- Integrity, reputation and character;
- Absence of convictions and restraint orders; and
- Competence and financial solvency,
Question 6.
Your client wants to setup a unit in Pharmaceuticals sector in the state of Telangana. Describe in detail about the specific laws applicable for setting up of a unit in the Pharmaceuticals sector. (Dec 2019, 5 marks)
Answer:
Illustrative list of the Laws applicable to the Pharmaceuticals sector is as under
- The Drugs and Cosmetics Act, 1940 & Amendment 2008
- The Drugs and Cosmetics Rules, 1945
- The Pharmacy Act, 1948
- The Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954
- Drugs (Magie Remedies) Objectionable Advertisement Rules, 1955
- The Narcotic Drugs and Psychotropic Substances Act, 1985
- Special Permits and Licences Rules, 1952
- The Medicinal and Toilet Preparations (Excise Duties) Act, 1956
- The Drugs (Prices Control) Order 1995 (under the Essential Commodities Act)
- Essential Commodities Act,1955
- The Clinical Establishments (Registration and Regulation) ACT, 2010
- The Clinical Establishments (Registration and Regulation) Rules, 2010
- Biological Diversity Act, 2002
- Biological Diversity Rules, 2004 .
- Drug Policy, 2002
- Plant Quarantine Order
- National Pharmaceutical Policy, 2012
- Drugs (Prices Control) Order, 2013
- Rules for the Manufacture/ Use/ Import/ Export and Storage of Hazardous microorganisms / genetically engineered organisms or cells.
Question 7.
You are engaged as a retainer in a company for looking after all secretarial compliances. With the advent of introduction of Goods and Services Tax (GST), though the company initially managed to handle this work, subsequently, it finds it very difficult in view of the attrition in the concerned staff managing it and also with reference to the latest amendments and notifications issued frequently. The Company then decided to discuss with you to undertake the work as GST professional. What are the duties and responsibilities that has to be performed as a GST Professional? Briefly explain. (Dec 2019, 5 marks)
Answer:
Company Secretary as GST Professional:
Company Secretaries can play an important role in being an advisor and facilitator for due compliances under GST and be an asset to the general business community and corporate world. With their expertise in interpreting laws and skills to tackle and manage regulatory compliances under GST, Company Secretaries render value added services to the trade and industry while acting as extended arms of regulatory mechanism. A person having passed CS final examination is eligible for enrolment as GST Practitioner. Company Secretaries can provide guidance and advisory services to business entities to interpret GST laws and assist in effectively discharging various compliances under GST while undertaking activities like tax planning, maintenance of GST records, drafting legal documents like replying to show cause notices, impact analysis, etc.
Though, the Company Secretaries cannot perform Audit in matters related to GST. But he can provide the following services:
1. Advisory services or strategic advisor: A Company Secretary can comprehensively interpret the law of GST and provide complete guidance and advisory to the business entities. Company Secretaries are more suited for their services because of their knowledge of laws and good communication skills.
2. Tax Planning: Company Secretaries are competent to understand the impact of laws and its various alternatives and can be helpful in proper tax planning under GST.
3. Procedural Compliances: Procedural Compliance includes registration, filing of returns, payments of taxes, assessment etc. Since, a Company Secretary is already playing the role of a Compliance Officer under various other laws, he can assist in the same under GST law also.
4. Book/Record Keeping: Like any other tax laws, introduction of GST would also require proper record keeping and maintaining systematic records of credit of input/input service and its proper utilisation etc.
5. Representation: A Company Secretary can provide the service of representation with confidence because of practical exposure due to appearing before various competent authorities.
6. Appellate work: Because of their legal bent of mind, a Company Secretary can provide better services in the field of appellate work.
Question 8.
Travel and Tourism Industry in India is required to implement various laws. Examine the various laws applicable to such Industry. (Dec 2020, 5 marks)
Answer:
Specific Laws Applicable to Travel & Tourism Industry:
- Legal and Regulatory Framework in Travel and Tourism: Relating to consumer protection; health; safety and security of travel and tourism customers. Legal Liability and Risk Management: Legal liability concepts; owner and director liability; guide and leader liability; risk assessment and controlling; risk mitigation; risk financing and insurance.
- Transport Legislation: Surface; sea and air transport laws in relation to carriage of passengers.
- Contract legislation in relation to Travel and Tourism customers:
Indian Contract Act & Partnership Act; Sale of Goods Act, Consumer Protection Act & Companies Act: - Business Ethics in Travel and Tourism Sector: CSR policy for travel and tourism businesses; corporate responsibility to shareholders versus stakeholders; personal versus social responsibility; stakeholder theory; determinants of social Responsibility of individuals and social groups; role of governance system. Emergence of corporate governance code; development of corporate governance code; development of Indian corporate governance.
- Forex Management: Regulation and Management of foreign exchange: FEMA-realization and repatriation of foreign exchange; Foreign Exchange Rules in India.
- Medical Tourism: Certification and Accreditation in Health and Medical Tourism, Ethical, Legal, Economic and Environmental issues in Health and Medical Tourism. Role of the National Accreditation Board for Hospitals & Healthcare (NABH) and Joint Commission International (JCI).
- Event Laws & Permissions: Permissions required for holding an event, general details, police permissions, traffic police, ambulance, fire brigade, municipal corporation, Indian Performing Rights Society(IPRS), Phonographic Performing License, Entertainment Tax, Permissions for open ground events, license for serving liquor.
- Laws relating to Management of Tourism in Tribal Areas
- Laws relating to Setting up Travel Agency & Tour Operation Unit
Question 9.
Explain the role of a company secretary in Investor Education and Protection. (Dec 2020, 5 marks)
Answer:
An informed investor is more precious than the investment. Investors provide the much needed capital which, combined with entrepreneurial skills, results in successful corporate. These corporates provide goods and services, taxes and employment, and fuel economic growth. Therefore, it is very important that investors are educated, enlightened and well informed to be able to take sound investment decisions and to protect their interests. Recognising the importance of shareholder rights and investor protection, the Companies Act, 2013 introduced some important changes to the company law regime in India and has plugged many loopholes. It upholds shareholders democracy and investor protection in many ways. A significant development has been the inclusion pertaining to ‘Class Action Suit’ (Section 245) to strengthen the concept of shareholders democracy.
The ICSI as a national body and its members as corporate governance professionals, have played a significant role in the area of investor education and protection. The role of a Company Secretary is also increased due to the developments in Investor Education & Protection laws. A glimpse of the roles of Company Secretaries are as under:
1. Under securities laws such as Securities Contracts (Regulation) Act, 1956, Depositories Act, 1996, regulations and guidelines issued by SEBI under SEBI Act, 1992, the authorities have made various provisions related to Investor Education & Protection. A Company Secretary has an important role in ensuring compliance with these provisions.
2. Under various laws for equity, debt listing, Indian Depository Receipts, company secretaries have been recognized to verify compliances and to issue certificates.
3. A better regulated capital market automatically brings development for the country and a strong regulated capital market instils confidence among the investors that their money is safe. The company secretaries are expected to exercise sensitive professional and moral judgments in all their activities, while carrying out their professional responsibilities. They should accept the obligation to act in a way that will serve public interest, honour public trust and demonstrate commitment to professionalism.
4. The Company Secretaries are expected to maintain and broaden public confidence and perform all professional responsibilities with the highest sense of integrity.
Question 10.
Indian media and entertainment sector comprises mainly of film industry, animation industry and TV channels. Name any ten specific laws applicable to media and entertainment sector. (Aug 2021, 5 marks)
Answer:
Specific Laws applicable to the Media and Entertainment sector includes:
- The Press and Registration of Books Act, 1867
- The Registration of Newspaper (Central) Rules, 1956
- Working Journalists and Other Newspaper Employees (Condition of Service) and Miscellaneous Provisions Act, 1955
- The Working Journalists (Conditions of Service) And Miscellaneous Provisions Rules, 1957
- The Working Journalists (Fixation of Rates of Wages) Act, 1958
- The Newspaper (Price and Page) Act, 1956
- The Delivery of Books and Newspapers (Public Libraries) Act, 1954
- The Delivery of Books (Public Libraries) Rules, 1955
- Press Council Act, 1978
- Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharti)Act, 2007
- The Copyright Act, 1957
- The Cine-workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
- The Cine-workers Welfare Cess Act, 1981
- The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954
- The Drugs and Magic Remedies (Objectionable Advertisements) Rules, 1955
- The Young Persons (Harmful Publications) Act, 1956
- The Dramatic Performances Act, 1876 (Relevant Provisions)
- The Cinematograph Act, 1952
- The Cinematograph (Certification) Rules, 1983
- The Indecent Representation of Women (Prohibition) Act, 1986
- The Indecent Representation of Women (Prohibition) Rules, 1987
- The Prasar Bharati (Broadcasting Corporation of India) Act, 1990
- The Cable Television Network (Regulation) Act, 1995
- The Cable Television Network Rules, 1994.
Question 11.
List out the Companies which are required to appoint Internal Auditor under section 138 of the Companies Act 2013 read with Rule 13 of the Companies Accounts Rules 2014. (Dec 2021, 5 marks)
Answer:
Section 138 of Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 provides that the following class of companies are required to appoint an internal auditor which may be either an individual or a partnership firm or a body corporate, namely:-
(a) every listed company;
(b) every unlisted public company having-
(i) paid-up share capital of fifty crore rupees or more during the preceding financial year; or
(ii) turnover of two hundred crore rupees or more during the preceding financial year; or
(iii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or
(iv) outstanding deposits of twenty five crore rupees or more at any point of time during the preceding financial year; and
(c) every private company having-
(i) turnover of two hundred crore rupees or more during the preceding financial year; or
(ii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year.
Further, the Central Government may, by rules, prescribe the manner and the intervals in which the internal audit shall be conducted and reported to the Board.
Question 12.
Your client wants to set up a Bio-technology unit in Bengaluru. Describe the details of specific laws applicable to a Bio-technology industry. (June 2022, 5 marks)
Question 13.
XYZ Ltd. is having paid up share capital of ₹ 10.00 crore as on 31st March, 2019. Whether the company is required to appoint a Company Secretary in the Company ? What would be your answer if the said XYZ is a Private Limited Company ? Explain the relevant provisions regarding the appointment of a Company Secretary in employment by the Company. (Dec 2019, 5 marks)
Answer:
According to Section 203 of the Companies Act, 2013 & Rule 8 of the Companies (Appointment and Remuneration) Rules, 2014, Every listed company and every other public company having paid up share capital of rupees ten crores or more is required to appoint a whole time Company Secretary, Managing Director and CFO.
Further rules 8A of the Companies (Appointment and Remuneration) Rules, 2014 provides that a company other than a company covered under rule 8 which has a paid up share capital of ten crore rupees or more shall have a whole-time company secretary.
Hence, XYZ Ltd as a Public Company is required to appoint Whole Time Company Secretary. Further on 31March, 2019 if XYZ is a Private Limited Company then it has to appoint Whole time Company Secretary if paid up capital of the Company is ₹ 10 Crore or above as per Rule 8A of the Companies (Appointment and Remuneration) Rules, 2014.
Question 14.
Write a short note on “Company Secretary as Registered Valuer”
Answer:
A Company Secretary in practice is recognized to be registered valuer for the asset class “Securities or Financial Assets” under the Companies (Registered Valuer and Valuation) Rules, 2017
To act as an Registered valuer in the Securities or Financial Assets the person should be Graduate in any stream and should be the Member of the Institute of Chartered Accountants or The Institute of Cost Accountants of India or the institute of Company Secretaries of India; or MBA / PGDBM specialization in finance or; Post Graduate Degree in Finance and should have at least three years of experience in the discipline after completing graduation. Further, the person need to complete and pass the Valuation Specific Education Course as per syllabus specified under rule 5 of the Companies (Registered Valuers and Valuation) Rules, 2017.
Further, A person is eligible to be a registered valuer if he/she
- is a valuer member of a registered valuers organisation;
- is recommended by the registered valuers organisation of which he is a valuer member for registration as a valuer;
- has passed the valuation examination under rule 5 within three years preceding the date of making an application for registration under rule 6;
- possesses the qualifications and experience as specified in rule 4;
- is not a minor;
- has not been declared to be of unsound mind;
- is not an undischarged bankrupt, or has not applied to be adjudicated as a bankrupt;
- is a person resident in India;
- has not been convicted by any competent court for an offence punishable with imprisonment for a term exceeding six months or for an offence involving moral turpitude, and a period of five years has not elapsed from the date of expiry of the sentence:
Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be registered;
- has not been levied a penalty under section 271 of income-tax act, 1961 (43 of 1961) and time limit for filing appeal before commissioner of income-tax (appeals) or income-tax appellate tribunal, as the case may be has expired, or such penalty has been confirmed by income-tax appellate tribunal, and five years have not elapsed after levy of such penalty; and
- is a fit and proper person.
Question 15.
“Company Secretaries can play an important role in being an advisor and facilitator for due compliances undei GST and be an asset to the general business community and corporate world”. Comments
Answer:
Company Secretaries can play an important role in being an advisor and facilitator for due compliances under GST and be an asset to the general business community and corporate world. With their expertise in interpreting laws and skills to tackle and manage regulatory compliances under GST, Company Secretaries render value added services to the trade and industry while acting as extended arms of regulatory mechanism.
Though, the Company Secretaries cannot perform Audit in matters related to GST. But he can provide the following services:
1. Advisory services or Strategic advisor: A Company Secretary can comprehensively interpret the law of GST and provide complete guidance and advisory to the business entities. Company Secretaries are more suited for their services because of their knowledge of laws and good communication skills.
2. Tax Planning: Company Secretaries are competent to understand the impact of laws and its various alternatives and can be helpful in proper tax planning under GST.
3. Procedural Compliances: Procedural Compliance includes registration, filing of returns, payments of taxes, assessment etc. Since a Company Secretary is already playing the role of a Compliance Officer under various other laws, he can assist in the same under GST law also.
4. Book/Record Keeping: Like any other tax laws, introduction of GST would also require proper record keeping and maintaining systematic records of credit of input/input service and its proper utilisation etc.
5. Representation: A Company Secretary can provide the service of representation with confidence because of practical exposure due to appearing before various competent authorities.
6. Appellate work: Because of their legal bent of mind, a Company Secretary can provide better services in the field of appellate work.
Question 16.
What is the role of Qompany Secretary as Global Leader?
Answer:
The changing global business environment has not only brought changes in the role and responsibilities of the Company Secretaries but has transformed it into new dimensions obliterating almost the concept of their role in a company performed by them hitherto. The changes have thrown up new challenges and opportunities that have spurred the professional instincts of Company Secretaries to identify themselves with the totality of business and managerial responsibilities. The position of the company secretary enables them to have a holistic view of the governance framework and as a result they are generally tasked with the responsibility of ensuring that this framework and any supporting policies and procedures are clearly documented. Thus, a Company Secretary has emerged as a key professional in the corporate management providing solutions to the core management team and harmonise the basic decision making process to bring it in line with key factors of the corporate world.
Global leadership may be referred to as capacity to unify a diverse workforce around a single purposeful vision, through demonstration of personal mastery, thinking globally, anticipating opportunity and using shared leadership networks. A global leader must continuously practice personal mastery and provide organizational leadership through internal/external influence. Thus a company secretary as a global leader thinks globally, anticipates opportunity, creates a shared vision, develops and empowers people, appreciates cultural diversity, builds teamwork and partnerships, embraces change, encourages constructive challenge, ensures customer satisfaction, achieves a competitive advantage, demonstrates personal mastery, shares leadership and lives the values.
Question 17.
What are the Management and Reporting functions of Company Secretary?
Answer:
Management and Reporting functions of Company Secretary
- Filling of various documents/returns as required under the provisions of the Companies Law.
- Proper maintenance of books and registers of the company as required under the provisions of the Companies Law.
- To see whether legal requirements of the allotment, issuance and transfer of share certificates, mortgages and charges, have been complied with.
- To convene/arrange the meetings of directors, on their advise.
- To issue notice and agenda of board meetings to every director of the company.
- To carry on correspondence with the directors of the company on various matters.
- To record the minutes of the proceedings of the meetings of the directors.
- To implement the policies formulated by the directors.
- To deal with all correspondence between the company and the shareholders.
- To issues notice and agenda of the general meetings to the shareholders.
- To keep the record of the proceedings of all general meetings.
- To make arrangement for the payment of the dividend within prescribed period as provided under the provisions of the Companies Law.
Question 18.
“Company Secretary to act as authorized representative of a company and its Board” Comment.
Answer:
The Company Secretary of a company can appear before the following authorities as a authorized representative of the company and its board:
- National Company Law Tribunal
- Competition Commission of India
- Securities Appellate Tribunal
- Registrar of Companies
- Consumer Forums
- Telecom Disputes Settlement and Appellate Tribunal
- Tax Authorities
- Other quasi-judicial bodies and Tribunals.
Question 19.
What is the role of Company Secretary as a Regulator?
Answer:
Company Secretaries are highly valued and relied upon by regulators for compliances and they are considered as the first level regulators at the corporate level. The dynamics of the boardroom are changing and chairmen and directors are realising that they need specialist skills and technical knowledge in this area and they are looking to company secretaries to provide this expertise In effect, they are considered an extended arm of the regulatory mechanism. They act as the link and interface between industry and regulators. Laws”are getting liberal as well as complex and changing very fast. CS must be updated about regulatory changes and must educate and update management about changes in the applicable laws and their likely impact on the company and the domestic environment as well as economy as a whole. Being corporate governance professionals, regulators depend and rely on Company Secretaries for implementation of good governance practices. Company Secretaries enjoy the confidence of industry as well as regulators for their professional conduct, ethics and values.
Question 20.
What is the role of Company Secretary in Board and Committee processes?
Answer:
The company secretary plays a leading role in good governance by helping the Board and its committees function effectively and in accordance with their terms of reference and best practice. Providing support goes beyond scheduling meetings to proactively managing the agenda and ensuring the presentation of high quality up-to-date information in advance of meetings. This should enable directors to contribute fully in board discussions and debate and to enhance the capability of the Board for good decision making. Following meetings the company secretary should pursue and manage follow up actions and report on matters arising.
Question 21.
What is the role of Company Secretary as Support to the Chairman?
Answer:
The company secretary has a duty to advise the Board, through the chairman, on all governance matters. Together they should periodically review whether the Board and the company’s other governance processes are fit for purpose, and consider any improvements or initiatives that could strengthen the governance of the company. The relationship between the company secretary and the chairman is central to creating an efficient Board.
Segment-wise Role of Company Secretaries Notes
Appointment as Whole time Company Secretary:
As per Section 203 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every company having a paid-up share capital of ten crore rupees or more is required to appoint a whole-time Company Secretary.
Company Secretary as Key Managerial Personnel (KMP):
Company Secretary has been recognized as Key Managerial Personnel and has placed along with Managing Director (MD) or Chief Executive Officers (CEO) or Manager, Whole time director(s) or Chief Financial Officer (CFO) under Section 203 of the Companies Act, 2013. Accordingly, every listed company and the every other public company having paid up share capital of ten crore rupees or more is required to appoint the.whole time Company Secretary as the Key Managerial Personnel.
Functions & Duties of the Company Secretary:
1. To report to the Board about compliance with the provisions of this Act, the rules made thereunder and other laws applicable to the company;
2. To ensure that the company complies with the applicable secretarial standards;
3. To discharge such other duties which includes:
- to provide to the directors of the company, collectively and individually, such guidance as they may require, with regard to their duties, responsibilities and powers;
- to facilitate the convening of meetings and attend Board, committee and general meetings and maintain the minutes of these meetings;
- to obtain approvals from the Board, general meeting, the government and such other authorities as required under the provisions of the Act;
- to represent before various regulators, and other authorities under the Act in connection with discharge of various duties under the Act;
- to assist the Board in the conduct of the affairs of the company;
- to assist and advise the Board in ensuring good corporate governance and in complying with the corporate governance requirements and best practices; and
- to discharge such other duties as have been specified under the Act or rules; and
- such other duties as may be assigned by the Board from time to time.
Company Secretary as an Expert:
Section 2(38) of the Companies Act, 2013 include the company secretaries as an expert and the definition of the expert under Companies Act, 2013 is as under: “Expert” includes an engineer, a valuer, a chartered accountant, a company secretary, a cost accountant and any other person who has the power or authority to issue a certificate in pursuance of any law.
Company Secretary as GST Professional:
Company Secretaries can play an important role in being an advisor and facilitator for due compliances under GST and be an asset to the general business community and corporate world. With their expertise in interpreting laws and skills to tackle and manage regulatory compliances under GST, Company Secretaries render value added services to the trade and industry while acting as extended arms of regulatory mechanism.
Though, the Company Secretaries cannot perform Audit in matters related to GST. But he can provide the following services:
- Advisory Services or Strategic Advisor
- Tax Planning
Procedural Compliances - Book/Record Keeping
- Representation
- Appellate Work
Specific Laws applicable to the cement sector includes
- Cement Control Order, 1967
- Cement Cess Rule, 1993
- Cement (Quality Control) Order, 1995
- Cement (Quality Control) Order, 2003
- Bureau of Indian Standards Rules, 1987
- 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.