The document outlines the essential elements of corporate compliance management (CCM) and its necessity for companies to ensure adherence to applicable laws. It highlights the importance of a systematic approach for compliance, including audits and governance structures, to maintain corporate integrity and reputation. It emphasizes that effective CCM can create value, minimize risks, and avoid severe consequences due to non-compliance.

1. CORPORATE COMPLIANCE MANAGEMENT
12/12/2014
(CCM)
“Governance
Initiatives
& Accountability”

2. Corporate Compliance Management (CCM)
Systematic - Well Organized
Governed - Compliance
Valued - Building Value

3. Time has come.. The compliance
is not merely a legal compliance
but it is a NECESSITY Now
…………

4. Begin the New Era of
Corporate Compliance
Management

5. Corporate Compliance Management (which
starts with Clause 49)
Clause 49 of Listing Agreement:
in the year 2003
“ The Board shall periodically review
compliance reports of all laws
applicable to the company, prepared by
the company as well as steps taken by
the company to rectify instances of
non-compliances.”

6. Now
Companies Act 2013

7. COMPLIANCE OF ALL APPLICABLE LAWS IN ACT
Section 204 of Companies Act, 2013:
Secretarial Audit for every Listed
Companies and Public Companies (as
per Rule 9):
Having
Paid up Capital of Rs. 50 Cr or more
Turnover of Rs. 250 Cr or more

8. COMPLIANCE OF ALL LAWS
 Company Law
 Economic and Commercial Law
 Tax Laws
 Capital Markets and Securities Laws
 Industrial, Labour and General Laws
 Secretarial Audit, Compliance Management and Due Diligence
 Corporate Restructuring, Valuation and Insolvency
 Banking Law and Practice
 Capital, Commodity and Money Market
 Insurance Law and Practice
 Intellectual Property Rights - Law
 International Business-Laws

9. ALL APPLICABLE LAWS– SYSTEM PART
 Adequate System and Procedure

10. ALL APPLICABLE LAWS– AUDIT PART
Now Secretarial Auditor has to provide their Audit Report
in Form No.- MR -3 and to certify that Company is
complying the provisions of :
Companies Act
SCRA
FEMA
Depositories
Act
SEBI Regulations:
Takeover Code
Buy Back
Delisting
UTP
ICDR
ESOP
Issued Debt Fund
Secretarial
Standard
Listing
Agreement

11. ALL APPLICABLE LAWS– AUDIT PART
 Non Compliance
 Observation
 Audit Qualification
 Reservation
 Adverse Remarks

12. PREPARATION FOR IMPLEMENTING COMPLIANCE
MANAGEMENT SYSTEM
The Board of Directors
of the Company has to
ensure that for
compliance of all the
applicable laws on the
Company there will be a
system within the
Company.

13. IMPLEMENTING EFFECTIVE
COMPLIANCE MANAGEMENT SYSTEM

14. WHAT IS COMPLIANCE OF ALL LAWS?
Compliance of all laws
Not just any other compliance ………………

15. COMPLIANCE OF ALL LAWS
Product
Profile
Factory
Location
Sector
Employees
Transaction
Segment

16. HOW CORPORATE COMPLIANCE MANAGMENT WORKS ???

17. GENERAL LAWS (APPLICABLE TO ALL COMPANIES)
Taxation
Laws
Corporate
laws
Industrial &
Labour Laws
Property
laws
(Based on Number of employees)
10 or more 20 or more 25 or more 100 or more 1000 or more

18. EVENT BASED LAWS
Consumer Laws
Intellectual Property
Law
Custom Tax Law
Foreign Exchange
Management Law

19. STRUCTURE BASED LAWS
Different Corporate Structures
Listed Public
Companies
Unlisted Public
Companies
Private Limited
Companies
Public Sector
Undertakings

20. SECTOR SPECIFIC LAWS
Manufacturing Trading Service
E-commerce

21. SEGMENT WISE LAWS
Tourism And Hotel
IT Enabled
Textiles
Services And BPO
IT Solutions
Infrastructure,
Power And Telecom
Media And
Entertainment
Capital Market And
Its Intermediaries
Financial Services
Banking And NBFC
Engineering and
Construction
Drugs, Pharma
And Healthcare
Agriculture And
Food Processing
FMCG
Capital Goods

22. STATE WISE LAWS
Labour Welfare Act
Shops and Commercial
Establishment Act
Environmental Laws
National Festival
Holiday Act
Industrial Laws

23. DIFFERENT GEOGRAPHICAL LAWS
Global
Operations

24. CASE STUDY – CEMENT INDUSTRY
Understanding The Company
 CEMENT INDUSTRY
• Public Limited Company
• Listed Company – BSE, NSE
• Manufacturing & Trading
• Exporting Company
• 10,000 No. of Employees (Approx.)
• Units Located at Bhubaneswar, Rajnagpur

25. Identification of Applicable Laws
– Cement Industry
On the basis of General Corporate Information – Public
Company, Listed at BSE, NSE
•Companies Act, 2013
•Income Tax Act, 1961
•SEBI (Insider Trading) Regulations, 2009
•SEBI (Substantial Acquisition of Shares & Takeovers)
Regulations,
2011
•Listing Agreement

26. Identification of Applicable Laws
– Cement Industry
On the basis of Sector – Manufacturing and Trading
•National Environment Policy
•Environment (Prevention of pollution control) Act,
1986
•Central Excise Act, 1944

27. Identification of Applicable Laws
– Cement Industry
On the basis of Type of Industry – Cement
•Cement (Quality Control) Order, 2003
•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.
•Explosives Act, 2008

28. Identification of Applicable Laws –
Cement Industry
On the basis of No. of Employees
•Employees’ Provident Funds & Miscellaneous Provisions
Act, 1952
•Factories Act, 1948
•Payment of Gratuity Act, 1972
•Industrial Dispute Act, 1947
•Employees State Insurance Act, 1948
•Payment of Wages Act, 1936
•Minimum Wages Act, 1948 & Minimum Wages (Central)
Rules, 1950

29. Designing the Corporate Compliance
Management System
What to Focus on?
Careful division of Consequences of Non-Compliances
of Applicable Laws under the following broad heads:
 Criminal Consequences;
 Loss of Reputation, and
 High Penalties

30. “The exercise of good governance
can ensure that compliance is
aligned with the company’s
business objectives and risk
management strategies. In this way
compliance can add real value and
not just be a cost to the
organisation.”

31. Satyam Vada Dharmam Chara
- Taittariya Upanishad

32. “Forever speak the truth and follow the dharma”

33. Truth : Disclosure of Actual State of Affairs
(Transparency in operations and transactions)

34. Principles of Corporate Excellence
Fairness to all stakeholders
Fairness to all Mutual Trust, Transparency and Togetherness
Mutual Trust, Transparency and Togetherness
Unrestricted Communication and Continuous Feedback
Unrestricted Communication and Continuous Feedback
Sharing Knowledge, Success Stories and Experience
Sharing Knowledge, Success Stories and Experience
Sharing Happiness and Concerns
Helping Each Other – Round the Clock

35. EMPLOYEES
Enhanced Trust and
Confidence of all
Stakeholders
INVESTORS
CUSTOMERS
SUPPLIERS
GOVERNMENT AND
REGULATORS
SOCIETY

36. Growth
Growing
Revenues
Growing
Profits
Growing
Market Value

37. Ready Market for
New Products
Widespread Goodwill and Brand Reputation
Access to Global
Markets
Better Access to
Human Capital
Widening
Customer Base

38. WINNING
EMPLOYEES
GROWING
INVESTORS
DELIGHTED
CUSTOMERS
TRUSTED
SUPPLIERS
HAPPY
SOCIETY
SATISFIED
GOVERNMENT AND
REGULATORS

39. Leading to…

40. Environment
SUSTAINABLE
DEVELOPMENT
Civil Society
Business Society

41. Corporate Value without Compliance
– The Past
COMPANY
• Loss of reputation & recognition in International Market
• Loss of Moral Fibre of Corporations
• Loss of Investors Confidence
• Difficulty in further raising of capital
• Investor Complaints
• Regulatory hurdle
• Difficulties in Business operations
• Penalty , Imprisonment and Criminal liability on BOD
• Degradation of reputation of BOD

42. Corporate Value without Compliance
– The Past
PRACTICES:
• Lacking of proper Compliance Mechanism in the
Company
• Unawareness about latest regulatory
development and Laws
• Lacking of expertise knowledge on Compliance
of All Laws

43. Corporate Value without Compliance
and its Result

44. Secret behind building foundations
..…Only the culture of
strict adherence to good compliance
can keep a company
ahead on sustainable basis , bring in
larger profits…

45. Cost Involved in CCM
Cost of
Compliance
Cost of Non-
Compliance
Corporates may consider CCM as a costly tools but it is
a mechanism though which Company can assure about
well Compliant Company and avoid the high cost of
non-compliance including but not limited to penalties,
loss of investor confidence and negative goodwill.

46. Thus, Although a lot has been done, but a lot needs
to be done.

47. “It is not enough to take good decisions
and make good choices. It is necessary
to take heed and comply with applicable
laws in order to grow right”

48. THANK YOU
Pavan Kumar Vijay
Managing Director
Corporate Professionals Capital Private Limited
D-28, South Extension –I, New Delhi-110 049
Ph: +91.11.40622200; Fax: +91.11.40622201; E: pkvijay@indiacp.com