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  • Key Takeaways of Kotak

    Committee Report on

    Corporate Governance

    Gaurav N Pingle,

    Practising Co. Secretary, Pune.

    Pune Chapter of ICSI Study Circle . Nov. 18, 2017

  • Recent boardroom battles,

    Recent Corporate practices,

    IDs Change in Role & Liabilities,

    Cos.Act, 2013 CG provisions

    Brief background to

    Corporate Governance Reforms

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    2

  • Members & their Experience,

    Deliberations,

    Outcome

    Brief background of the Kotak Committee

    on Corporate Governance

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    3

  • Format of the Report

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    4

  • Terms of Reference

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Ensuring independence in spirit of Independent Directors

    IDs active participation in functioning of the Co.

    Improving safeguards & disclosures pertaining to RPTs

    Issues in accounting & auditing practices by listed Cos.

    Improving effectiveness of Board Evaluation practices

    Addressing issues faced by investors on voting & participation in general meetings

    Disclosure and transparency related issues, if any

    Any other matter, as the Committee deems fit

    5

  • Broad Contents of the Report

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Composition and Role of the Board of

    Directors

    The Institution of Independent Directors

    Board CommitteesEnhanced Monitoring

    of Group Entities

    Promoters/Controlling Shareholders and

    Related Party Transactions

    Disclosures and Transparency

    Accounting and Audit related issues

    Investor Participation in Meetings of Listed

    Entities

    Governance Aspects of Public Sector

    EnterprisesLeniency Mechanism

    Capacity building in SEBI for Enhancing

    Corporate Governance in Listed

    Entities

    6

  • Chapter I: Composition & Role of BoD

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Minimum No. of Directors

    Gender Diversity

    Attendance of Directors

    Disclosures of Expertise

    NED Age limit

    Minimum No. of Board Meetings

    Updation of Knowledge of Board Members

    Quorum for Board Meeting

    Separation of Non Executive Chairperson and MD / CEO

    7

  • Chapter II: Institution of Independent Directors

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Minimum No. of IDs

    Eligibility Criteria for IDs

    Minimum Compensation to

    IDs

    Disclosures on Resignation of IDs

    Induction & Training of IDs

    Alternate Directors for ID

    Lead ID in Cos. with Non-

    independent Chairperson

    Casual Vacancy of Office of ID

    8

  • Chapter III: Board Committees

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Minimum Number of Committee Meetings

    Role of Audit Committee

    Role / Constitution of Nomination & Rem. Committee

    Composition & Role of StakeholdersRelationship Committee

    Quorum for Committee Meetings

    Applicability & Role of Risk Management Committee

    Information Technology Committee

    9

  • Chapter IV: Enhanced Monitoring

    of Group Entities

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Obligation on BoD of

    Listed Entity w.r.t.

    Subsidiaries.

    (ICSI Report referred)

    Secretarial Audit

    (i) SA may be made compulsory for all listed entities under SEBI LODR

    Regulations in line with Cos. Act,

    (ii) SA may also be extended to all material unlisted Indian subsidiaries.

    This is in line with the theme of strengthening group oversight and

    improving compliance at a group level.

    10

  • Chapter V: Promoters / Controlling shareholders

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Sharing of Info. with Controlling Promoters / Shareholders with Nominee Directors

    Re-classification of Promoters / Classification of Entities as Professionally Managed

    11

  • Chapter V: Related Party Transactions

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Disclosures of RPTs

    Approval of RPT

    Materiality Policy

    12

  • Chapter V: Related Party Transactions

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Remuneration to ED (Promoter)

    Remuneration to ED (Non-Promoter)

    Remuneration to NED (Promoter)

    Remuneration to NED (Non-Promoter)

    13

  • Chapter VI: Disclosures &Transparency

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Submission of Annual Reports

    Searchable Formats of Disclosures

    Harmonization of Disclosures Avoiding the risk of Disclosure arbitrage

    Disclosures Pertaining to Disqualification of Directors Certificate of Practising CS

    14

  • Disclosures Pertaining to Disqualification of

    Directors Certificate of Practising CS

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    15

    Certificate from Company Secretary in practice that none ofthe directors on the board of the company have beendebarred or disqualified from being appointed or continuingas directors of the companies by the SEBI / MCA or any suchauthority.

    What is contemplated to check:

    Debar or Disqualify,

    From being appointed or continuing as Directors

    SEBI / MCA or any such authority.

  • Accounting & Audit-related issues

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Audit Qualifications

    Independent External Opinion

    by Auditors

    Quarterly Financial Disclosures

    Disclosure of Reasons of

    Resignation of Auditors

    Disclosures on Audit & Non-audit Services Rendered

    by Auditor

    Disclosures of Credentials and

    Audit Fee of Auditors

    16

  • Powers of ICAI vis--vis SEBI

    Strengthening Monitoring & Enforcement by SEBI

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Powers of SEBI w.r.t. Auditors & Other Statutory 3rd Party

    Fiduciaries for Listed Entities

    Strengthening the Role of ICAI

    Strengthening the Independent

    Functioning of Quality Review

    Board

    17

  • Chapter VIII: Investor Participation in Meetings

    of Listed Entities

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Timeline for Annual General

    Meetings of Listed Entities

    E-voting and Webcast of

    Proceedings of the Meeting

    Resolutions sent to Shareholders without Boards

    Recommendation

    18

  • Establish a transparent mandate for PSEs and

    disclose its objectives & obligations;

    Ensure independence of PSEs from

    Administrative Ministry,

    Consolidate the Govt. stake in listed PSEs

    under holding entity structure(s)

    Chapter IX: Governance Aspects of

    Public Sector Enterprises

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    19

  • Committee felt that Leniency Programme would improve

    effective detection of violations and enhance ease of

    investigation and enforcement, while also acting as a

    deterrent that could result in an increase in the overall

    compliance of securities regulations;

    Committee felt that SEBI may be empowered to grant

    leniency and offer protection against victimisation to whistle-

    blowers in certain instances determined on case by case basis

    Chapter X: Leniency Mechanism

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    20

  • Committee recommended enhancing SEBIs

    capacity in line with global best practices:

    Enhance No. & skill-sets of its human resources;

    Exploit power of data science & technology; and

    Strategically work with other agencies,

    especially for monitoring and enforcement.

    Chapter XI: Capacity building in SEBI for Enhancing

    Corporate Governance in Listed Entities

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    21

  • Deliberation on the Key Takeaways22

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

  • Q & A Session

    Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    23

  • Pune Chapter of ICSI (Study Circle). Nov. 18, 2017 . Presentation by

    CS Gaurav Pingle

    Thank you Pune Chapter of ICSI for this wonderful

    opportunity!!

    Thank you Students & Members for active

    participation!!

    (E): gp@csgauravpingle.com

    (W): www.csgauravpin