Saturday, August 10, 2013

BL> CSs' Role Under New Company Law ; Insrance Brokers Beware, et al



 Secretarial Audit Report Under Companies Act, 2013



The write-up so also many of the readers' comments have , unwittingly or otherwise, proceeded or taken off on a narrow premise that the demerits of the new rules are not acceptable only from the view point of the impact on a personal plane. It does not also seem to be right in trying to belittle or dilute in any manner the CSs role in good governance of corporate - closely held or otherwise. If one cares and turns over the applicable testaments, the primary role of CSs is to function as a gatekeeper and keep monitoring and ensuring to the hilt compliance by the entity of all statutes , central or state, as well as  rues having statutory force.
Should that be so, the need of the hour is to mandate CS as one of the requirements for any corporate set-up, may be including LLPs, - not the other way, certain to turn out to be a retrograde measure.
With the same breath, may wish to add, from the viewpoint of stake holders/ public interest, importance of strict compliance by CSs of the attendant responsibilities  must be underscored and subjected to strict monitoring / vigilance.
In  turn, ICSI, as the connected semi-regulator,  has a proactive  and constructive role to play towards accoplishing that goal.  
"...envisages a much larger role for company secretaries in the areas of ..."
"Along with the professional honour comes more responsibility for company secretaries. They will now be considered as an officer in default if something goes wrong with a company, say corporate observers. Punishment in such situations will include penalty and imprisonment, it was pointed out.


Ananthasubramanian said ICSI would soon tie up with the Insurance Institute of India, Mumbai to enable professional influence in risk management and compliance function. The Institute has already initiated programmes with the Indian Institute of Banking and Finance to further deepen the engagement of company secretaries in banking compliance, he added. "

<> If perceptively viewed, even under the extant rules and regulations, the expected professional "role" of CS, truly meaning the attendant responsibilities, was sufficiently large and comprehensive enough to take pride as having been duly empowered. At best, the new law can only be considered to have made it more explicit, so as to ensure or guard / ward against the possibilities of being over sighted any longer. As such, also from the viewpoint of the stakeholders , the ostensible changes deserve to be commended as welcome.

"... understanding the policy terms and benefits, and .."

<>This is one area where there is lot left to be desired. Consumers invariably take it for granted that the form of application sets out fully and fairly all the applicable terms and conditions subject to which the insurer underwrites the risk - particularly, if it be a property cover. In one's perceptive view, however, he will be making a fatal mistake if he assumes and proceeds on the premise that once he decides on the amount and keeps paying the agreed premium he would remain fully secured. Consider for instance the commonly-come-across term of insurance of a building assuring that the cover is for "re-in statement or market value". While these terms, if simply read, are inducive enough to go in for a maximum cover, there is no clarity at all what the insured would actually receive, especially in monetary terms/equivalent towards "reinstatement", in the event of a "total loss".

Last add-on >

<>  As regards tax incentives presently available in respect of income from (or out of) house property, one feels,no such article can be taken to be complete and of useful guidance to the readers, without a mention of the expected changes in the law in the foreseeable future, of potential disadvantage to taxpayer. Reference is to the DTC Bill, enactment whereof is, according to official indications, round the corner. Especially as, so far, there appears to be no certainty or clear indications as to in what manner those are going to be made available even in respect of investment made prior to the date of coming into force of the new Tax Code.

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