COMPLIANCES GOVERNANCE CSR MAHIMA JOHNSON GUEST LECTURER CHRISTIAN

COMPLIANCES, GOVERNANCE & CSR MAHIMA JOHNSON GUEST LECTURER CHRISTIAN COLLEGE CHENGANNUR

KEY MANAGERIAL PERSONNEL • CHIEF EXECUTIVE OFFICER/ MANAGING DIRECTOR/ MANAGER • COMPANY SECRETARY • WHOLE TIME DIRECTOR • CHIEF FINANCIAL OFFICER • ANY OTHER PRESCRIBED OFFICER

APPOINTMENT OF KMP • BOARD RESOLUTION CONTAINING TERMS & CONDITIONS OF APPOINTMENT IS REQUIRED • KMP CAN’T HOLD OFFICE IN MORE THAN 1 CO. (NA FOR SUBSIDIARY CO. ) • VACANCY TO BE FILLED WITHIN 6 MONTHS • PENALTY FOR CONTRAVENTION o CO. - FINE 1 -5 LAKHS o KMP- FINE UPTO 50, 000 & 1000/DAY IF CONTRAVENTION CONTINUES

SECRETARIAL AUDIT PROCESS TO CHECK COMPLIANCES MADE BY CO. UNDER VARIOUS LAW MONITORS COMPLIANCES WITH LEGAL REQUIREMENTS SA REPORT COMPULSORY FOR LISTED CO. ’S INDICATES CO. HAS A DISCIPLINED APPROACH TO EVALUATE & IMPROVE EFFECTIVENESS OF RISK MANAGEMENT, CONTROL & GOVERNANCE CO TO PROVIDE ASSISTANCE & FACILITIES TO CS

CORPORATE SOCIAL RESPONSIBILITY What the business does for society’s benefit? Obligation & duties of business to society Maximises shareholders value Results in better products & working conditions • Enables efficient utilisation of natural resources • •

CORPORATE SOCIAL RESPONSIBILITY PROS CONS • MEETING PUBLIC EXPECTIONS VITAL FOR SURVIVAL • ADVERSE EFFECT ON PROFIT MAXIMISATION OBJECTIVE • CREATES BETTER BUSINESS ENVIRONMENT , PUBLIC IMAGE & A SENSE OF MORAL RESPONSIBILITY • CSR COST MAY BE CHARGED AS AN ADDITIONAL COST TO CUSTOMERS • AVOIDANCE OF GOVERNMENT REGULATIONS • EXCESSIVE RELIANCE ON BUSINESS • BUSINESS CAN DIRECT THE RESOURCES • LACK OF SOCIAL SKILL & HELD BY ITSELF TOWARDS WELFARE ACCOUNTABILITY • HELPS GOVT. IN HANDLING SOCIAL ISSUES • SOCIETY’S UNWILLINGNESS TO LET BUSINESS DECIDE • CO. ’S POSSESSES CIVIC DUTIES & RESPONSIBILITIES SAME AS THAT OF A CITIZEN • EXCESSIVE SOCIAL OVERHEAD COST • REPAYMENT OF SOCIETAL DEBT • MISALLOCATION OF RESOURCES

CSR MODELS ACKERMAN’S MODEL CAROL’S FOUR PART MODEL Phase I – Top Managers learn of existing social problem & CEO acknowledges Economic Responsibility Phase II- Specialist Staff/ Consultant hired to study the problem Legal Responsibility Phase IIIImplementational level Ethical Responsibility Discretionary Responsibility

CSR PROVISIONS IN CO. ACT 2013 • CSR COMMITTEE – MANDATORY- LISTED CO. - NET WORTH OF 500 CR OR MORE – TURNOVER OF 1000 CR OR MORE – NET PROFIT OF 5 CR OR MORE • CSR COMMITTEE – MIN. 3 DIRECTORS INCLUDING AN INDEPENDENT DIRECTOR • CSR COMMITTEE – FUNCTIONS – FORMULATION & RECOMMENDATION OF CSR POLICY – DECISION REGARDING EXPENDITURE TO BE INCURRED • MIN. AMOUNT TO BE SPENT – 2% OF AVG. PROFIT OF 3 IMMEDIATELY PRECEEDING FY • PREFERENCE FOR LOCAL AREAS AROUND ITS AREA OF OPERATION

CSR ACTIVITIES REMOVAL OF POVERTY & HUNGER . GENDER EQUALITY & WOMEN EMPOWERMENT ENVIRONMENT SUSTAINABILITY . EDUCATION INFANT MORTALITY RATE REDUCTION & IMPROVING MATERNAL HEALTH CREATING EMPLOYMENT OPPORTUNITIES SOCIAL BUSINESS PROJECTS . CONTRIBUTION TOWARDS FUNDS FOR SOCIO ECONOMIC DEVELOPMENT, RELIEF

COMPANY SECRETARYINTRODUCTION • HANDLES LEGAL ISSUES, RULES & REGULATIONS • ARRANGE MEETINGS, PREPARE MINUTES, MAINTENANCE OF RECORDS, MAKING PAYMENTS & DRAFTING CONTRACTS • ENSURE STATUTORY & LEGAL COMPLIANCE • MEMBER OF ICSI • COMPULSORY FOR ALL LISTED CO. & CO. HAVING PAID UP SHARE CAPITAL OF MORE THAN 5 CR.

COMPANY SECRETARY – OTHER PROVISIONS • APPOINTED BY MEANS OF PASSING BOARD RESOLUTION • WHOLE TIME SECRETARY COMPULSORY FOR ALL CO. ’S HAVING PAID UP CAPITAL OF MORE THAN 2 CRORE • EMPOWERED TO PERFORM ACTS DIRECTED BY BOD, ESSENTIAL TO DISCHARGE OTHER DUTIES & OTHER LEGAL COMPLIANCES

DUTIES OF COMPANY SECRETARY CONTRACTUAL DUTIES STATUTORY DUTIES COMPANIES ACT 1. PERFORM DUTIES WITH REASONABLE CARE & SKILL 2. MAINTAIN CONFIDENTIALITY W. R. T INFORMATION RELATING TO CO. 3. MUST NOT MAKE ANY SECRET PROFITS 4. SHOULD ACT WITHIN THE SCOPE OF HIS AUTHORITY INCOME TAX ACT INDIAN STAMP ACT 1. TO SIGN ANY DOCUMENTS OR PROCEEDINGS 2. TO DELIVER SHARE OR DEBENTURE CERTIFICATE 3. TO MAKE ENTRIES IN MEMBERS’ REGISTER 4. TO MAKE DOCUMENTS AVAILABLE FOR INSPECTION 5. TO DELIVER REGISTRATION DETAILS TO REGISTRAR 6. TO MAKE STATUTORY DECLARATION FOR OBTAINING CERTIFICATE OF COMMENCEMENT OF BUSINESS 7. TO SIGN ANNUAL RETURN & FINANCIAL STATEMENTS 8. TO SENT NOTICE OF CO. MEETINGS 9. TO PREPARE MINUTES OF EVERY GM 10. TO MAINTAIN STATUTORY BOOKS 1. TO ENSURE PROPER TAX IS DEDUCTED 2. TO SEE TDS CERTIFICATE IS ISSUED TO DEETURE HOLDERS 3. TO ENSURE TAX DEDUCTED HAS BEEN DEPOSITED TO TREASURY 4. TO VERIFY & SUBMIT STATEMENTS, FORMS & RETURNS 1. TO SEE WHETHER DOCUMENTS ARE PROPERLY STAMPED OTHER ACT

ROLE OF COMPANY SECRETARY • VITAL ROLE IN COMPANY ADMINISTRATION • STATUTORY OFFICER, COORDINATOR & ADMINISTRATIVE OFFICER • RESPONSIBLE TOWARDS SHAREHOLDERS, DEPOSITORS, CREDITORS, CONSUMERS, EMPLOYEES, SOCIETY & GOVT.

FUNCTIONS OF COMPANY SECRETARY • TO REPORT TO BOARD ABOUT COMPLIANCE WITH CO. ACT 2013 • TO ENSURE THAT CO. COMPLIES WITH SECRETARIAL STANDARDS • TO DISCHARGE OTHER DUTIES AS MAY BE PRESCRIBED