A Systematic Approach Corporate Compliance Management 15.12.2007
May 20, 2015
A Systematic Approach
Corporate Compliance Management
15.12.2007
Coverage
About ‘C+M’ of CCM?
Compliance Management
A framework to maintain and build community
confidence
to ensure that we meetagreed standards of ethics, behavior
and responsibility.
HOW TO IMPLEMENT AN EFFECTIVE COMPLIANCE MANAGEMENT
SYSTEM ???
. By Designing effective & user friendly Compliance Management System
. To lay down strong foundation for Good Governance
Elements of Effective Compliance Program
Customization of …..
At One Place
Professional needs to
Analyze & Understand
Management Structure &
Information Flow
COMPANY POLICIES
OPERATIONAL PLANNING AND EXECUTION
DIR A DIR B DIR C DIR D DIR E
BOARD OF DIRECTORSBOARD OF DIRECTORS
CORPORATEPLANNING
LEGALFINANCE AND
ACCOUNTSHUMAN
RESOURCESCORPORATE
COMMUNICATIONPRODUCTION
AND OPERATIONSMARKETING
INFORMATION TECHNOLOGY
DEPARTMENTS IN A COMPANY
EXTERNAL STAKEHOLDERS
INVESTORSINVESTORS
GOVERNMENT AND REGULATORS
GOVERNMENT AND REGULATORS
SOCIETYSOCIETY
SUPPLIERSSUPPLIERS
CUSTOMERSCUSTOMERS
LENDERSLENDERS
Company Secretaries to understand their role
Coordinate between various departments and all stakeholders,
Ensure compliance of all applicable laws and
Develop mutual trust between various stakeholders
COMPANY POLICIES
OPERATIONAL PLANNING AND EXECUTION
DIR A DIR B DIR C DIR D DIR EBOARD OF DIRECTORS
CORPORATEPLANNING
LEGALFINANCE AND
ACCOUNTSHUMAN
RESOURCESCORPORATE
COMMUNICATIONPRODUCTION
AND OPERATIONSMARKETING
INFORMATION TECHNOLOGY
DEPARTMENTS IN A COMPANY
EXTERNAL STAKEHOLDERSCOMPANY
SECRETARY
INVESTORSINVESTORS
GOVERNMENT AND REGULATORS
GOVERNMENT AND REGULATORS
SOCIETYSOCIETY
SUPPLIERSSUPPLIERS
CUSTOMERSCUSTOMERS
LENDERSLENDERS
CS is the Principal Officer of the Company
Role of Company Secretary??
TO TO CHANGECHANGE
THE THE MINDSETMINDSET
Company Secretary is primarily responsible to coordinate with COMPLIANCE OF ALL LAWS
Therefore, WE ARE ANSWERABLE……
What is Compliance of all laws??
Compliance of all laws
Not just any other
compliance ………………
HIDDEN KHAZANA for all
STAKEHOLDERS
INVESTORSINVESTORS
GOVERNMENT AND REGULATORS
GOVERNMENT AND REGULATORS
SOCIETYSOCIETY
SUPPLIERSSUPPLIERS
CUSTOMERSCUSTOMERS
LENDERSLENDERS
Company
Professional
Right Proportion = Creating difference
Understand your company
Proper Identification & Evolution of applicable laws
Analysis of applicable laws
Assessment
Public SectorUndertakings
Private LimitedCompanies
Trusts And NGOs
Coop Societies And Producer Companies
Municipal Boards
Semi-governmentOrganisation
Unlisted PublicCompanies
Listed PublicCompanies
Different Corporate Structures
UNDERSTANDING AT MACRO LEVEL
Media And Entertainment
Infrastructure, Power And Telecom
IT Solutions
IT Enabled Services And BPO
Textiles
Tourism And Hotel Capital Market And Its Intermediaries
Engineering and Construction FMCG
Agriculture AndFood Processing
Capital Goods
Drugs, Pharma And Healthcare
Banking And NBFC
Financial Services
Different Industries
Global Operations
Indian Operations
Different Geographies
Time has come.. Corporate compliance is not merely a legal compliance but it is NECESSITY Now …………
Preparation for ImplementingCompliance Management
System
Understanding the Company - Company’s History & Background
- Capital Structure & Evolution
- Promoters & Group Companies
- Management & Administration buildup
- Financial Soundness & Debt Structure
- Risk Management & Protection - Licenses & Approvals
THE THREE STEP PROCESS
Step I : IDENTIFICATION
Step II : EVALUATION
STEP III : ASSESSMENT
•General application of laws.
• Sectoral applications
• Industry / Segment applications
• Geographical applications
• Number of Employees
• Transaction applications
IDENTIFICATION PROCESS
Evaluation: Preparation at home
Evaluating the applicable laws after due identification process
As for instance:
A Company has its operations of exports which further Involve lots of foreign exchange transactions.
Identification: FEMA, 1999
Evaluation : FEM ( Exports of goods & services) Regulations, 1999
Assessment Process
Further improvements Implication of Compliance System Effective Usability Bridging the gap of Compliance in
letter & Compliance in Letter & spirit
EXPLAINING THE PROCESS
TEXTILE INDUSTRY
• Manufacturing & Trading
• 1000 workers
• Export process
• Polluting Unit
• Unlisted Company
• Surat based
IDENTIFICATION, EVALUATION & ASSESSMENT AT ONE PLACE…
Identification of applicable laws
General Laws
• Companies Act, 1956
• Income Tax Act, 1961
Area Specific
• All laws applicable to Particular State
Sector Specific
• Central Excise Act
• Value Added Tax Act
International Transaction
• FEMA , 1999
No of Employees
• Factories Act, 1948
• Payment of Wages Act, 1936
•Contract Labour (regulation & abolition) act,
1970
Subjective
• Air (Prevention of Pollution Control) Act, 1981
•Environment (Prevention of pollution control) Act,
1986
Taxation Laws
Corporate laws
Industrial & Labour Laws
10 or more 20 or more 25 or more 100 or more 1000 or more
Property laws
General Laws(Applicable to all companies)
(Based on Number of employees)
Listed Company
Un-listed Company
Public Company
Private Company
Govt. Company
On the basis of Status of the Company
Intellectual Property
Laws
Foreign Exchange
Laws
Custom Tax laws
Event Based Laws
Manufacturing Trading Service
Insurance
Tourism
PowerFMCG
Banking
Pharmaceutical
Entertainment
IT enabled services & BPO
Industry Specific Laws
Automobiles
Computers
Aluminium Products
Cables
Cement
Cigarettes
Breweries & Distilleries
Sector Specific Laws
Maharashtra PunjabGujarat
Labour Welfare Act
National Festival Holiday
Act
Shops and Commercial
Establishment Act
State Wise Laws
Compliance Timings: Evaluation
Compliance Timings
Fixed / Regular Event Based
The assessment process:
Identify the gap between the present compliance system and the results of evaluation
process
Simplification: The Next MoveDeveloping Compliance Management Tools
Law wise
Period wise
Developing Compliance Management Tools..contd
Triggering date & time
Triggering information input Organisation type, Capital deployed, Business typeOrganisation type, Capital deployed, Business type
Product profileProduct profile
Effective Usability
Newsletters & Magazines Discussion e-Groups Software carried automatic
updating options Attending seminars & workshops Newspapers & Business News
Channels Regular visits at Authority’s
website
Developing Compliance Management Tools..contd
Effective Usability
Unsystematic Compliance
System… the aftermath
CURRENT PROFILE
80% 20%
TRADITIONAL ROLE STRATEGIC ROLE
Form Filing
Registers& Returns
Good Compliance
Risk Mitigation
Corporate Governance
PRESENT FACE
ChecEChecklists
Let IT works for you………….
Compliance Tool by PWC
Compliance Tool by PWC
complianceonline.com by Metric Stream
bizfilings.com
Compliance Tool by Corporate Professionals
Striking Features of CCM Tool
Coverage of more than 200 Act, Rules, Regulations, Guidelines, Circulars & Notifications effecting the compliance requirement of a Company
Covers all Industry Specific & Location based laws
Real Time updations by Expert Professionals located all over India
Customization of Checklist according to the applicable laws to your Company
Rights/option to create a complete system of compliance management Creation of Different Users to comply with
different laws Fixation of dead lines for compliance by each
user
Creation of Three Tier Hierarchy for compliance Reporting System
Alerts at different levels as the last date of compliance comes closure
Alerts & Reminders by way of mails & messages
Features of CCM Tool
Online support in the form of Query Box
Facility of getting Opinion on any of the Topic of Compliance from Eminent Professionals of the field on our panel
Discussion Forum & Archive of Topic-wise Discussions
Library of Forms of all laws covered
Features of CCM Tool
Reporting of Compliance & Non-Compliance On Real-time Basis On Quarterly Basis Archive of Quarterly Compliance Reports
Risk Assessment of Non-Compliances Reporting of Consequences segregated in
High, Medium & Low financial & Other Risks
Features of CCM Tool
How it works??
Compliance Organisation Structure
Low
High
All Rights availableCompliance Officer
CEO
Corporate and Securities Law Department
Labour and Industrial Law Department
Taxation Department
Executive Executive
Executive Executive
Executive Executive
Compliance Reporting
Assignment Task 1 Task 2 Task 3
LISTING AGREEMENT Submit CG
Compliance Certificate
Submit Shareholding
Pattern
Submit Financial Results
Complied/ Not Complied
Not Complied, because I was
out of town and I forgot to
delegated work
Level 2 Securities Law DepartmentMr. R Sharma
Proof of Compliance attached
Proof of Compliance attached
Compliance Report
Compliance Scheduler
Title Notice by Occupier
Form No
------
Due Date
At least 15 days before he begins to occupy or use
Title Shareholding Pattern
Form No
Fixed Format
Due Date
Within 21 days from the end of each Quarter
IncomeTax
Factories Act
CompaniesAct
Listing Agreeme
nt
Today This Week This Month Select Period
Title Return of Income
Form No
ITR-6
Due Date
On or before 31st October of the assessment year
Title Appointment of Director
Form No
Form 29 &
32 Due Date
Within 30 days of appointment
Compliance Scheduler
Alerts & Notifications
Compliance
Due DateLevel III
(Executive)
Level II(Department Head)
Level I(Complia
nce Officer)
CEO
Submit CG Compliance Certificate
15/04/2007
05/04/2007,
08/04/2007, 11/04/2007,
14/04/2007,15/04/2007
Submit Shareholding Pattern
21/04/2007
11/04/2007,
14/04/2007, 17/04/2007,
20/04/2007,21/04/2007
Submit Financial Results 23/04/2007
13/04/2007,
16/04/2007, 19/04/2007,
22/04/2007,23/04/2007
Note: Reminders in case of Non Compliance
Assigned To Mr. SumitReminder Date
Reminders
Forms Library
Download
Compliance Statistics
No status37%
Not Complied
Complied
52%
Status on the
basis of
information
provided
11%
Penalty Risk Classification
Significance Type Probability
I year prosecution
High Urgent Moderate
Fine of Rs. 1,00,000
High Not Urgent
Moderate
Fine of Rs. 1,000
Low Avoid Low
High RiskModerate RiskLow Risk
Risk Assessment & Analysis
Risk Reporting
USING COMPLIANCE SYSTEM
80% 20%
STRATEGIC ROLE TRADITIONAL ROLE
Corporate Compliance
Risk Management
Form filing
System Driven
organisation
Registers & Returns
Checklists & Modules
IT based Compliance System can change the face……
Advantages of Corporate Compliance
Easy Quantification of risk Establishing Risk appetite Identify and prioritize controls Multitude of Compliance
obligations. Building Strong Foundations Extended Confidence to Investors Gaining Competitive Edge Good Compliance System leads
to Excellence in Operations
Effect of Technology
Easy Compliance
Impossible Non- Compliance
Company Secretary is like back bone
of any Compliance Management System
to any organisation and with its
Proactive Approach & Intelligence
make an organisation front runner in its field…
Good Corporate governance
Reduces Risk
Higher Profits
Higher Valuation of Company
RESULT OF GOOD CORPORATE COMPLIANCE
MAKING YOUR COMPANY DIFFERENT & LEADING TOWARDS EXCELLENCE
Happy Company
Happy Management
Happy Investors
Happy Customers
Happy Regulators
EXCELLENCE PAYS…
A Solution for Today and Beyond……
Corporate Compliance Management
Conclusion is … Make Your Company
GOOD GOVERNED COMPANY