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Master Class on SEBI LODR-III Constitution and Role of Board Committees

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This masterclass discusses the constitution and roles of various board committees (Audit, Nomination & Remuneration, Stakeholder Relationship, and Risk Management) under SEBI's LODR regulations, emphasizing the increased responsibilities and liabilities of independent directors in ensuring corporate governance.

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minute you can just go to the top and

yeah

so I think you have to make it SL show

actually okay okay you did you did ah

now it is now uh am I audible sir yeah

yeah very much very much yeah okay so

friends welcome you uh one more time uh

one more Saturday and we have a

different faculty every time so we are

uh running a master class on a codar

today is a third part and the topic for

the discussion is the Constitutions and

the role of board

committee uh friends uh this regulatory

architect under the companies act and

lodr uh the places lot of

responsibilities on the independent

directors for the implementation of the

corporate governance in the company the

statistics shows that more than 75% of

the listed company in India are the

promoters driven and those independent

directors have been appointed by the

appointed by the promoters only the

regulator like MCA Sab expect

independent directors to play a key role

for the safeguarding the interest of the minority

minority

sholders and um yeah and and and today's

time the independent directors are

loaded with the plethora of

responsibility on a various Committees

of board such as the audit committee uh

NRC committee uh you know and there are

many other committees also even all

those related party transactions are

placed before the audit committee can be

now has to be only approved by the

independent directors

only now uh even the independent

directors uh are also responsible for

for the the compliance of the pit

regulations and also for those sdd

maintenance and Etc and Etc so what I'm

trying to convey uh the the liability of

the independent directors has gone

manyfold and uh of course you know uh

the the company runs through a

committees and it is mandatorily uh

required that you know you need to have

a committees particularly for a listed

companies and a and a companies you know

of a certain categories uh so to discuss

in detail uh

today we have a two speaker and let me

introduce them uh so yeah our penist of

course Mr Bala sonali and HMA Kumari uh

and just to give you their background uh

so HMA to begin with you know Hima

Kumari she's a fellow member of The

Institute of company secretes of India

and a law graduate and she also holds

the bachelor degree she has almost two

decades of experience in the uh the

listed companies and current he works

for a company called uh a den Network

know company uh as a secretary company

secretaries and the compliance officer

and she has worked in the uh she was

associated with the JK group of

companies in the past and of course has

also worked with the uh India groups and

the run irrigations the our next

panelist is uh uh sonali SAS and she's

not new phase to uh in our platform and

also she's a regular speaker at icsi

she's a water Alum and she has done her

postgraduate in a financial management

and also a law graduate and of course a

member of our Institute and she has also

done her pmq uh in her corporate

governance see very few people has done

this uh pmq course even though icsi has

launched this but the experience is not

so great and she's also a diploma in the

general manager management from IM am

tyur um she has also two decades of more

than two decades of EXP experience

presently se's a chief legal officer

company secretary and strategy of a SRA

cement one of the leading cement company

in the industry and a listed company she

she has worked in a ispat group of

company which was belongs to the mythal

group of companies as a vice president

corporate Affairs and legal and she was

managing the uh the corporate uh secal

work of the Pasar group in the past and

she has worked with the heartway group

of companies also in the past so yeah of

of course and uh Mr Bala doesn't

require um uh any introductions he is

our regular panelist and uh four Decades

of experience I was also a student of

his so I've learned many things from him

in icsi ccgt so thank you Mr Bala always

being a part of our journey thank you

sir and uh yeah he's a regular

contributing articles and you know I can

see in a WhatsApp every weekly you know

somewhere uh his uh learning passions

you know doesn't stop so he keeps on

writing a lot of articles in uh the

various magazines so thank you Mr Bala

being with us so I'll say Mr Bala to uh

say some few words and then probably we

can start you know

yeah good morning to all of you I have a

great pleasure in welcoming you all on

my own behalf and also on behalf of the methon

methon

method and really these programs are

actually I'm looking for every Saturday

Father which is rather enhancing

knowledge keep in touch with the

profession interact with many of

you and learn many things in the

process and asul has put it it is a

series of seminar which we are

conducting on the lodr regulations and

today being the third one having

discussed the preliminary things and

obligations of the companies General

applications Etc in the first series and

the second series we talked about the

board composition the respons of the

director other things Etc today we are

moving to

Committee of the board when we talk

about the committee of the board of

course the committee of the board is

actually governed by the company S as

well as the lodr regulations also but

today what we are going to talk since

topic is restricted to LOD regulation we

won't be taking of the committee other

than the elodia regulation specified

mandatory committees namely audit

committee and nomination remuneration

committee and the risk management

committee Etc although other committees

are also Reed to be constituted of the

company like such as CSR committee under

the npsc ass liability management

committee those thing not forming a part

of the thing but coming to the committee

what are these committees committies is

nothing but a subset of the board it is

I can call it as a smaller board

because the complexity of the business

which is growing on with the

globalizations which is happening

today and the way the economy is

actually moving Market is actually

bouncing back Etc and other thing and

all the business is becoming very very

complex with and the role and

responsibility of the board is very

immense as saids in the beginning most

of the companies are promoter one

company people would like to appoint

their known people rather the

recruitment because they don't want to

bring Outsider Unknown People Etc other

thing and but all then regulator would

like to ensure as we see the prle of the

SE act it says very clearly protection

of just small

shareholders and also production of the

small shareholders small investor that

is what it talking about in general it

is the produ of the shareholder

particularly to the small shareholders

what happens is The Regulators is very

much interested to bring a very stin and

regulation thrust upon the non-executive

director especially independent

directors the more responsibility and be

in the transparent Manner and minorities

are safeguarded and majority is not

taking the advantage and exploit the

minori that is the whole purpose so that

what happen the board does not have much

of the time to deliberate all the issue

but at the same time all said and done

there are many people who are having a

particular expertise when it come to the

audit committee Financial literate

people when it come to the risk

management people people who are well in

the risk mitigation Etc and other things

and all so what they do is they identify

the expert people who can actually

deliberate the matter in a smaller group

and come out with a valuable advises to

the board on the specific areas of the

operation that is the whole idea

with this again as you we have been

seeing in the last two three decade the

corporate government which is actually

coming in the Forefront especially after

the Enron issue and also the big five

becoming the big four and various

regulatory things which has happened not

only in India but also across the world

now what happens is the corporate

governance is much more in the corporate

everybody want to excel in the corporate

governance everybody want to be a good corporate

corporate

citizen as such so in the light of that

what is happening is there lot of trust

is thrown upon on the non-executive

director and especially to the

independent director asul suggested one

of the example the related party

transaction are required to be approved

only by the independent directors so the

whole idea is a removing the conflict of

the interest be looking the things at

neutrally and taking a better decision

making process put in place in the board

and work

for majority of the shareholders all the

interest of the shareholders to the

greater extent that is the whole purpose

is there of course the board can appoint

the people but the thing is regulator

says if you are talking about the audit

committee who should be the chairman

what should be their quality what is the

literacy especially in terms of the

financial statement reading and

understanding the financial not

necessarily they need to be a CA or NBA

so long as they understand to interpret

the financial ratio financial statement

they can read they can understand that

is what the requirement is there as a

regulatory say so committees definitely

can deliberate on the smaller issue they

can come out with the solution there are

regulator want committees actually to

approve certain things and committee to

recommend certain things to the board

these are all the things there and

another thing is today we have the two

panelists who are having more than two

decades of the experience who are still

with the industry who are working they

are handling the day and day out you

will come across between the two

committee the overlapping things

especially when you are talking about

the nomination ration committee when you

talk about the audit committee there are

responsib that cost on the same subject

for both the Committees the nomination

ration committee has actually going to

the Recruitment suitability and

recommend where the audit committee

certain things are to be approved there

are overlapping there there likely to be

you know one committee is saying

something other committee does not agree

for something how do we tackle these are

all the Practical issues which are

actually going to come out and although

LOD regulation talks about a various

things as said in the beginning

especially the P regulation P regulation

is not part of the LOD regulation but it

is a separate regulation of the insiding

trading regulation on which the lot of

responsibility cost of the audit

committee also periodically monit in

assessing reporting Etc and all those

the lities are also there so today our

presenter affilia who one of the part is

going to actually run the presentation

and we look forward to learn from both

the panelist their valuable experiences

their knowledges their comments Etc on

the topic and I look forward that I

request to sonali to say a few words on

the topic before we start and followed by

then we can run the go to sonali please

sonali you may note now we are almost 99

people actually there in the beginning

of the seminar that shows the interest

of the people hea you can also take a

note of it always we have around 140 to

150 people participate the seminar of

course there are some few people they

think that this a introductory section

they'll join after introduction that

also happened okay for to sonali please

thank you thank you well sir it was a

nice introduction and you have set the

stage right so now uh coming to the

Committees and my view on this before we

go forward with Alia would be that

committees are in a listed entity and

unlisted also so unlisted entity

committees are equally important as it

is in the listed entity listed entity

have certain additional responsibilities

under lodar but unlisted entities today

also have the similar kind of roles and

respons responsibilities because it to

some extent is responsible to certain

stakeholders not exactly the public at

large but we have other stakeholders we

have suppliers we have vendors we have

the government we have uh the lender we

have uh the funds which have invested in

the private entity so I just wanted to

put that the procedures which are there

in the lodr for listed entity can be

reserv as followed by unlisted entities

too in order to set the stage right for

the corporate governance for the

unlisted entities and also for those who

are looking for future

listings further coming to the

remuneration committee the stakeholder

committee the risk management committees

which are the core committees in a

listed entity and the audit Committee of

course uh these committees actually have

most of the bunch of the independent

directors we will go through Alia's

presentation and as to how the Quorum is

there and uh what kind of uh

Independence is needed to be maintained

by the directors in taking various decisions

decisions

but uh having said so these independent

directors play a integral role and a key

role in the corporate governance of any

listed entity the independent directors

when a company anytime hires independent

director they think that their role is

just statutory compliance but it is much

much more than that it's just that the

running of the organization in

accordance with the framework as

provided by sebi is with the independent director

director

many decisions as Mr Atul MAA also

rightly pointed out like the related to

party transactions can only be taken by

the independent directors so independent

directors plays a key role and the

selection of independent directors

become as important as selection of the

Senior Management in any

organization when we talk about the

Diversified experience the experience

which the independent directors needs to

bring in the audit committee financial

literacy is important but also Financial

L literacy in perspective of the

industry and the businesses become even

more important uh they have to actually

use their own mindset and the business

equipment and the tools which they have

as directors for the purpose of

assessing the financial statements of

the organization they are uh being

Guided by the company Senior Management

but uh independent directors

Independence matters a lot while taking

further decisions so over to uh Hima and

this thank you sonali Bala and S it was

really a nice uh beginning to begin with

the role of committees and the mainly

the role of the independent directors

basically as sonali said there are other

committees also apart from the mandatory

committees which which we are going to

see through the presentation of Alia

today and the main role of these

committees are that the focused role has

responsibility and decision making on

the focused area where more detailed

discussion is required which can be done

by the expertise in the set area has

been delegated to these committees

coming to the role of audit committee

the audit committee has been interested

with the responsibility of uh Finance

oversight of the financial reporting

financial statements dealing with the

internal and statutory Auditors then

apart from that the committee has also

been interested with the responsibility

of visil mechanism any any complaints

receiv received further apart from the

mandatory terms of reference which has

been given in SEI lodr there are other

references also which are company

specific which may be delegated to these

committees coming to the role of

nomination and remniscent committee the

nomination and remison committee is one

of the uh gate of Entry to the company's

board and also to the Senior Management

so it also plays an important role in

recruting and nominating and

recommending the right candidat who can

add to the Strategic goals of the

company or coming to the role of the

risk management committee

uh now the role of risk management

committee has emerged uh as a very

crucial one uh seeing the recent coid

and the geopolitical risk which we all

are seeing in recent years so the

committee should be well equipped to

identify and to take it steps and

recommend it strategies to mitigate the

risk stakeholder relationship committee

is also interested with the

responsibility of seeing the interest of

all the stakeholders attached with the

company and these committees uh affirm

give airation to the public as well as

the board that yes everything is on the

right part and details roles and

responsibilities we can see through the

presentation of Elia and composition of

these committees plays an important role

so hence I think that's why the

composition of committee has been uh

given the minimum requirement of the

compostition of committees has been

given by the law to fulfill the

requirement and responsibilities so

alifia over to

you so before alifia starts let me

recognize know the presence

of Mr jambunathan panku warang an

kumashi HRA partners and partti thank

you all you know for supporting this

yeah uh alifia you can start yes sir

thank you sir so good morning to all my

professional colleagues MAA and MAA

brings you the master class on SE lodr

part three which is the Constitution and

role of the both committees so SE lodr

provides for the constitution of three important

important

one regulation 18 of SE elodia provides

for the Constitution of audit

committee so every listed entity shall

have an independent audit committee with

a minimum of three directors whereby

two-thirds of the members of the audit

committee shall be independent

directors so here this is very important

part of the composition of the audit

committee where independent directors

play an important role in the decision

making of various transactions which the

listed entity may enter into so though

the regulation provides for minimum of

three directors a company depending on

its size and the scale of its operation

may require more number of independent

directors in its audit committee so that

any important transactions are uh

cleared without any

ha further it provides that all members

of the audit committee shall be

financially literate and at least one

member shall have accounting or

financial management expertise so this

is very important as audit committee

deals with mainly the financial

transactions which entity enters into so

the expertise of the members of the

committee in the finance uh part is very

important so uh sonali uh see this is

very subjective you know when you say

literacy financial literacy means what

even a bcom graduate he also comes from

the Commerce background so can you say

that you know he's also financially

literate because yeah I don't know yeah

that that itself says actually

explanation has been provided if you go

through there she also puts it here

actually what is financially literate

means you you see the slide itself she

has already put it there it only says

there the ability of the people to read

and understand the financial

statements that mean they should be able

to know what is actually there in the

financial what it ref what is it what

are the ratios in terms of profitability

in terms of the earning ratios in terms

of the various concept Associated not

necessarily they need to be you know a

typical ched accountant or MBA or

something that it is not like that in

fact I remember in company called W Lael

long time back which is become ala

limited there was actually a person who

was actually the Chief Financial Officer

who was only a matriculate those days he

occupied the POS of the Chief Financial

Officer the way he he deliver he present

the things Etc even many of the

qualified people they were really taken

a shock the way the interpretation other

things come to them so that is what the

ability to know the things that is what

it is me financially literate not

necessarily a particular qualification

if I understand other panelist your views

views

please yeah baj you're right that the

law doesn't provide that they have to

have any specific qualifications like uh

a qualified a professional like ca or

CFA or something but the point here is

that if uh only a bcom graduate set on a

board of a listed entity with has many

subsidiaries or a turnover of say

minimum say 2,000 to 500 5,000 crores so

he may or may not be able to give the

real inputs I understand from where you

are coming from that they have been

leaders in the industry and in the

profession which although they were not

qualified enough but were given

providing the best insights and even it

holds today good but the way the law is

evolving in India and also

internationally more so when you are

looking onto the context of the

subsidiaries overseas um they need to

have some insights and that is where the

role of the nomination rtion committee

actually comes into play wherein uh they

have to see that whenever independent

director is been appointed and is part

of the audit committee then that person

should have something beyond the normal

financial literacy which is either he or

she should carry the industry expertise

or an expertise in particular field

which has to do more with the technical

skills which he can apply for the

purpose of taking the right decision and

sitting on the chair because the Senior

Management is the management and

independent directors nowadays are

totally a separate set of directors

which are not actually part of the

Senior Management per se so there a

balance is required to be maintained and

where the role of NRC and the board also

comes into play in assing that who would

be the right person for the audit

committee if I actually run a check with

the people also here in the participant

and also other people who is the

chairman of the audit committee or who

are the members of the audit committee

I'm sure you will get answer many of the

people will have

the director or chairman of the audit

committee a qualified charted

retiring from the leading what you call

auditing for et other that is that is

what it is in practice because having

worked with the listed company almost

about 20 years as a company secretary

even the company where I was working I'm

talking about 20 years back actually we

also recruit the independent director

one of the senior partner of the price

waterhous who's retired he was actually

there on the audit committee as a

chairman yeah yeah practically that is

what it is really speaking Yeah yeah

true and that creates a proper balance

also between and another thing as you

right said as you rightly said there are

very few people in the industry who are

non-qualified people who are having this

sort of thing you can't expect at large

you'll get such people that is also true conversing

conversing

yeah your you H yes sir yes sir I also

Endor the same view though law does not

provide for any particular

uh means qualification the only thing

which the law has said is financially

literate but in most of the uh listed

entities uh it's the Chartered

Accountants mainly who form uh or person

with the background of having this

financial uh expertise which forms part

of the uh audit committee sir correct

that is what it is in practice yeah okay

so tomorrow if SB can come and say look

know you have appointed a bcom graduate

or SS and and uh you know he's been

question mark about his ability to read financial

statements sir uh in case that person is

member of the audit committee that means

the nomination and reminisent committee

must have gone through its background uh

its uh experience previous experience

also matters in with simply become

honors or life qualification if that

person has the expertise in the

so yeah sonali your views so actually it

when we talk about financial literacy it

is a word which can be interpretated on

the left and the right both the

ways when I go on the left side what

himma is saying it's absolutely right

that a bom graduate is also a financial

literate but you when you go on the

right side of the law not the left side

of the law then the person should

actually understand the financial in a

way that which is little Beyond than

what a bcom graduate can do uh because

when you read the financial statements

of a industry viser is a qualified bcom

graduate reading a financial statements

it's a quite a c difference

so basically if I if if I have to choose

between a bcom graduate or an MBA then

definitely yes uh as a remuneration

committee I would go with a person who

is qualified at least like an MBA if not

Ro of NRC comes into

picture in fact in fact the companies

which are having subsidiaries overseas

they are also trying to hire CPA now

CPAs also on their roles and CF is

qualified from us uh just to ensure that

globally all their subsidiaries are in

the control of the holding company in

India so and not only that where they

interpret financial literacy in view of

their businesses actually it is actually

financial literacy in view of your

business how your business runs if not

only that the NRC committee has been

given the very you know responsibility

to the independent director to go in the

selection process and work out the skill

MATC which is actually needed by the

company and analy and judge and then

recommend as sonali puts it in the very

beginning what is the choice between the

bcom and the NBA they will go by the NBA

when the things comes to the NRC

committee they would like to choose the

best people who suits to the industry

rather than you know going by the word

you know literacy Etc and everything and

all that's what I think and as I said in

the practice also if you look at any of

the balance sheet of the company listed

company is available on the public

domain invariably you will find actually

a qualified MBA or qualified chter

accountant is only heading the audit

committee that you can always find it

that is there okay now we have a minan

Das know can you minan Das he has raised

the hand you wanted to ask some question

ask seems to be not

there yeah uh alifia you can continue

you can ask anytime

yeah before that I just wanted to

highlight that while uh deciding the

composition of audit committee also the

limit of uh the committee me membership

which that person is having need also to

be seen like there's a limit of 10

committees and chairmanship in five

committees so that also need to be seen

end yeah Alia you can continue yes F LOD

are provides that the chairperson of the

audit committee shall be an independent

director and he shall also be present at

the annual Journal meeting to answer the

queries of the shareholders

the moment you say chairperson shall be

present that means it is mandator it is

required genuinely the chairperson fell

sick unforeseen circumstances it is

happens board nominates board nominates

an alate chairman chairperson who is a

member of the audit committee

okay Bard us to actually nominate

somebody else and and to resolve at the

meeting actually this is the standard

corporate governance practice which

people follow okay chairman of the audit

committee and it is quite natural it is

not necessary that chairman has to

attend every time but nowadays now we

are experiencing this last four five

years when you you're having online agms

the chairman is generally able to

present but in the good old days when it

was not online and that time the board

used to resolve in with proper Quorum at

the board meetings yeah you are actually

right in fact long back not now earlier

in some of the places the audit

committee chairman was actually not

present and R has left and right taken

the issues and companies have been

penalized I think what you are saying

now in the absence of the chairperson I

think probably later on somebody can be

there after the board results ET those

things have come up later on I think

while SE lodr does not give any carve

out but the companies act SS says that

that can be authorized mean any other

member can be authorized as for the

company yeah company it is there and I

think the specific thing the unforeseen

circumstance happen we have to go by

that only that's what I think as sonali

puts it board can take a call they can

resolve the issue and it can happen

view adul what do you think because you

have been dealing with the many

companies you might have seen also the

AGM yeah but I think I agree with no

sonali what she said when the uh you

know the director presents can always

choose you know

yeah yeah go ahead yes further the

company secretary acts as the secretary

to the audit committee also Al the

invitees to the audit committee may be

the finance director head of the finance

function head of the internal audit

Department a representative of the

statutory auditor and any other

Executives who are taking care of the

finance data of the company they can

committee toally I want to ask you one

small thing at this point whenever the

invitees are actually called then

invites are called to address a specific

subject not for the entire agenda of the

item very true yeah okay because one or

two subjects they are actually invited

so in which case the invite has been

called only the appropriate time and

they are present there they leave the

meeting that that that's very true and

rightly put in because audit committee

goes into the details of the entire

Financial operations and also the

business operations of the organization

more so in the context of the internal

Auditors when their scope has been

specified by the audit committee and uh

they are not there to have a preview of

the entire business operations of the

organization and their review is limited

to the scope as is defined by audit

committee then generally most of the

listed entities have internal Auditors

only up to their report and then they

leave similar is the case with certain

uh senior leadership which has come in

to discuss the internal Auditors report

uh with the members and the

chairperson in fact I also remember even

in our days also when I was a company

secretary we used to call for the

inviting and we used to call only for

the particular time once the things are

over we will ask him okay thank you very

much and they leave even we record the

minutes also accordingly for this

particular item so inv has actually

joined and given this

presentation done after the discussion

is over he left the meeting he used to

record that way yes somebody's asking

can there be a permanent invite to the

board which regulation does this emanate

from the question is asked I don't know

about the regulation other thing and all

we always used to have the permanent

invite of the Chief Financial Officer

person in the audit committee meeting

when the things were discussed and of

course in the board meeting he used to

be called for a particular item of the

business only not through the board

meeting that only the company secretary

is there in all the meeting persons yeah

your view

please agree with you I agree with you

that there can be permanent invitees and

CFO as you rightly pointed out is a

permanent invite some companies also

have this chro Chief human resource

officer as an invite permanent invite in

the nomination remuneration committee

and the board also for the purpose of

the senior leadership discussions and

decision to be taken so these certain

functional people do come as a permanent

invitees in certain agendas which are

fixed for certain meetings which are on

regular basis somebody is putting a

question can a chairperson of the audit

committee address the queries of the

shareholders when the chairman is

actually addressing the

meeting see normally the general meeting

what happens is Chairman conducts the

meeting generally and whenever the or r

at other things and all what happen

chairman answers otherwise he request

the audit committee chairman to answer

that is the way it happen if the cor is

put specifically to the audit committee

chairman I think that will happen like

that it's all depends upon how the

meeting is being conducted in

practically and what protocol is set by

the chairman for the that is right it is

yeahia further the regulation provides

for the meetings of the audit committee

it provides that the audit committee

shall meet at least four times in a year

and not more than 120 days shall elapse

between any two meetings so usually at

the end of the quarter the audit

committee meets for to approve the UN

audited quarterly results or the uh

yearly audited results but apart from

them uh that audit committee needs to

meet a number of times at it as it has a

wider role to look into and it may audit

committee approval may be needed under

for various transactions that may be

undertaken by the

company Quorum the Quorum shall be

either two members or onethird of the

members of the audit committee whichever

is dater with at least two independent

directors here again the composition of

audit committee is very important as two

independent directors need to be always

present whenever a meeting of the audit

committee is being called

somebody has actually put a question

here is the general Council entitled to

attend the audit and NRC meetings the

moment you put entitle the entitlement

of the attending the meeting is only on

the directors who are the members of the

board so long as general council is not

the members of the board there is no

question of any entitlement Etc comes

unless the board

permits then only the general Cil can

attend because you cannot say this my

entitlement because nobody can enter in

the Board Room except the board members

and of course the company secretary he

is invariably going to there he the only

person who going to be present

throughout all the meeting and committee meeting

meeting

yeah F the audit committee has the

powers to investigate any activity which

are in the terms of its reference seek

information from any employee obtain

outside legal or other professional

advice and secure attendance of

Outsiders with relevant expertise if it

considers necessary so again the audit

committee has the power to call for

further expertise where it may need

while approving your

transaction so generally to answer both

the questions like what is coming on the

slide also obtain outside legal or other

professional advice this is again

need-based decided by the committee

whenever they want to seek an advice in

this the role of the GC also comes in

general counsel that whenever uh they

want to seek a professional advice the

audit committee or the NRC then the

chairman permits the GC to join the

audit committee and the NRC meetings so

this is how they draw the powers and

this is how they permit the GCS to be

part of the meetings and in generally in

the NRC committees I have seen that gc's

are part of the NRC committee but

permitted by the chair it is

specifically mentioned that invite

meeting

B you are on

mute I also

said when the question is asking is see

entitle there's no entitlement it is

only by the permission not at all no

entit it can be a permanent permission

it can be a need based permission it can

be a restricted permission whatever it

is it is again subject to the permission

from the board members not the

entitlement as such yeah so while they

want to exercise their powers if they

need support then they may permit them

but there is no entitlement to any

except CS yeah yeah that is right

somebody is actually asking either a

checklist for an independent director on

the various committees or is it too

difficult to list

down one thing is there whenever you

talk about the committee there is always

a terms of reference has been well laid

down for each of the committee which is

made available to the members members is

very much aware of it that is one and

the second thing is the every time the

agenda is actually set out it is sent

when the agenda is sent all the

documents relating to the agenda item is

actually sent to the people for their

study Etc and other thing and all so

apart from that they are entitled to ask

any clarification questions Etc and

other things that's what I think so yeah

your view please both the

panelists and yes

the terms of reference which govern the

independent who is part of that

committee apart from that only one thing

in audit committee the related party

transactions can be approved by only the

independent director rest terms of

reference are same for all the directors

sir yeah

alifia part C of schedule two of SE lodr

regulation provides for the role of the

audit committee as we all are aware that

audit committee has a very wide role in any

any

organization so the important roles are

oversight of the financial reporting

process and creditability of the

financial statements recommendation for

the appointment remuneration and terms

of appointment of the Auditors of the

entity so here again uh the expertise of

audit committee is needed uh keeping in

mind the size of the organization uh

whether the particular auditor who is

being appointed is eligible has the

proper infrastructure to cater to the

size of the organization and accordingly

they decide on the Auditors approval of

payment of statutory Auditors for any

other services rendered by them

reviewing the statement of uses and

application of funds raised to any issue

so here again whenever a company has a

public issue or a preference issue then

uh the audit committee reviews quarterly

all the statement uh of uses and

application of funds further it also

reviews the report that is submitted by

the monitoring

agency reviewing and monitoring the

auditor's Independence and performance

and effectiveness of audit process again

this is very important role which an

audit committee plays so that uh it

takes into account the performance of

the auditor whether all the audit

processes and audit trails are being

properly followed by

them and there are no lapses in the audit

audit

any subsequent modification of

transactions of listed entity with

related parties so again the related

party transactions approval prior

approval is needed as per regulation 23

so here an audit committee plays a very

important role to approve the related

party transactions which a listed entity

is about to enter and also any

subsequent modification that may be

taken in that related party

transaction further every half cly the

listed entity is required to submit its

related party transaction statement to

the exchanges so here again it has to

monitor the whatever transactions the

company has entered into during the half

year period and accordingly submit a

statement to the

exchanges scrutiny of intercorporate

loans and

Investments so the audit committee also

looks into any loans which the company

has given to other uh entities and also

the Investments made by The Entity

whether they are profitable whether as

for the business of the entity the

surplus funds are properly invested or

not so all this scrutiny is being done

by the audit

committee somebody has actually put the

question here relevant to this

understand the scrutiny of the

investment means the post factor review

of the investment does it mean that

prior to the investment the audit

so as a as a role of the audit committee

is concerned inter corporate loans and

Investments it's part of the overall

roles and responsibility forming part

under the financial statements of the

audit committee so um intercorporate

loans and Investments as a protocol it

goes in every time before the audit

committee then it travels to the board

scrutiny of intercorporate loan and

investment audit committee can only do

once it has approved it did so the

scrutiny can't be done till the time the

approval is not there by the audit

committee so yes the process uh under

law although it is not very clear in the

lodr but companies act do state that it

has to be by the audit committee the

when when you refer to the terms of

reference and compare under the

companies act and lodr intercorporate

loans and Investments approval comes

under the audit committee's preview and

then and then followed by the scrutiny yeah

yeah

scr and post also both here it can't be

just interpretated that the way it is

mentioned it is

post see my concern is sonali it's like

a full-time job you if I to a company

like yours you know with some thousand

CR T hour if I have to look through all

those you know so I don't know it's it's

like a full-time job Mr Bala I me you

understand what I'm saying uh you know

oversight financial reporting process

recommendations you know all those like

it's like a if somebody is to really

give a Justice to this function know

that person has to be full-time so what

the companies generally do they also

constitute a finance committee in

addition to the audit committee which is

a very minimum number of people because

it's not a statutory committee it has

just internal board members and that

finance committee audit committee uh the

V delegates to the finance committee and

finance committee then provides a proper

reporting to the audit committee after

scrutinizing it so this some some

companies like our company does this so

this is one of the ways of doing it

yeah one more thing is asking reporting

Authority and the risk management

committee report to the audit committee

is the appointment of the chief risk

officer mandatory I think in my opinion

the Committees are actually subset of

the board yeah so risk management

committee cannot report to the audit

committee risk management committee has

necessarily has to report to the board

only that is very clear actually and

second thing is when it come to the

appointment of the chief risk officer I

think it's a regulation 30 if I'm not

mistaken that actually covers the

things yes your views Chief risk officer

appointment yes it is mandatory but it

is not necessary that company should

create a separate position of a cro C

Chief risk officer it can be an over in

role with any of the senior leadership

uh second coming to the uh this

reporting of the risk management

committee to the audit committee as

balasar mentioned yes it is no risk

management committee doesn't report to

the audit committee but the report of

the steering committee of the company

which relates to the risk of the entire

organization also travels in parallel to

the audit committee along with the risk

management committee because the audit

committee has to also review the risk of

the organization so so uh they also

become equally responsible for reviewing

the risk but at the board level both the

reports both the Committees provide

their views and then the chairman

deliberates with the audit committee

chairman and the risk management

committee chairman and then finally the

uh risk are formulated and

mitigated how does the audit committee

how does the audit committee ensure arms

length transaction should we take an

expert opinion from a third party in

fact my experience I can share with you

whenever the matter comes Etc

categorically we need to check up with

the finance department as well as the

taxation Department in terms of the

ordinary course of the business also in

terms of the ons business we take a

specific undertaking letter from them to

save guard the IND wherever the doubt

wherever they are not or something like

that one are two cases we are actually

gone to outside expert also to take a

opinion of the arms length transaction

ET I would like to hear from both the

panelist their practical views on

this as Sir in our organization we are taking

taking

certificate from the of the company uh

who give the certificate based on the

examination of all the transaction Plus

we are also taking certificate from the

Independent Chartered Accountants too so

both these certificates are placed for

committee

coming I was just looking at some

questions in the chat also and I was

trying to answer to this question I

think there was one question in the

previous slide where in somebody has

mentioned that scrutiny and not approval

by the audit committee scrutiny under

companies Act is interpretated as it has

to go to the audit committee first so

that is how uh traditionally it was only

companies act and then lodr came in 2015

so that procedure companies continues to

follow so that is the part of the

corporate governance under the 56 act

followed by 13 act and uh then 2015 the

regulations came now coming to uh this

particular uh issue with regard to just

yeah inter company loans and investment

is there any limit or restrictions

prescribed so no limits and descriptions

are prescribed as far as related party

transactions is concerned uh rpt uh the

board in the first meeting when they uh

provide the approval for the inter uh

this related party transactions they

provide the criteria how the related

party transactions has to be assessed so

one of the criterias which we also

follow is that we take a independent

chartered accountant certificate and on

the quarterly basis the statutory

Auditors uh verify all the related party

transaction and they give a quarterly

reporting to the audit committee that as

per the approval granted by the audit

committee these transactions have

happened in this quarter and it is an

arms transaction in accordance with the

parameters which has been fixed by the

audit committee now the transactions the

type of transactions vary a lot there

are certain service related transaction

certain product related transactions

certain transactions are with regard to

certain properties so it has to be a

different uh kind of interpretation to

be done by the audit committee and they

have to put set in separate criteria but

one thing which goes in common is the

review of all the RPS as per the

parameters set by um the audit committee

by a statutary auditor which is not part

of any of the regulations or the

companies act but uh that is for the

purpose of this safeguarding the

interest of the audit committee and the

board at the large so that is a protocol

follow further yes further it is the

role of the audit committee to review

the annual and quarterly financial

statements and Auditor's report along

with the management and in particular

reference to matters required to be

included in the director's

responsibility statement changes in the

accounting policies and practices along

with the reasons for such change major

accounting entries involving estimates

based on the exercise of judgment uh by

the management the your audit committee

plays an important role where any

estimates are being made or future

projections are being done by the

management significant adjustments made

in the financial statements so even here

the audit committee reviews whether any

significant impact will be there in the

financial statement of the company or

any adverse impact of any adjustments

that are required to be made compliance

with listing and other legal

requirements relating to financial

statements and disclosure of any related party

party

transactions somebody is actually

putting a question any real time example

of the major accounting Andre involving

estimate based on the exercise of the J

yeah so this is like we I had few

examples in our company uh when you do

certain provisioning in the books of

accounts and that provisioning is out of

a litigation then you obviously the

audit committee relies on external third

party judgment and also they have to

exercise their judgment as to whether

the provisioning to be done or not so

this is where the role of the judgment

and estimates of the audit committee

comes into play and the management had

to specifically highlight to the audit

committee seek a proper uh approval

through a resolution before putting in

certain uh

out of the business kind of exceptional business

items he your

views uh sir recently in uh one of our

company we have seen that that uh we get

the ruling in our favor so the entries

has been uh reversed the provisions

which have were created were reversed

and the profit were increased however

it depends upon the Judgment since the

counterparty has gone to the Supreme

Court so in this case I have seen that

yes the Judgment based on the Judgment

reversed further uh the audit committee

also values the undertakings or assets

of the listed entity wherever it is

necessary it evaluates the internal

Financial controls and risk management

system so here again it plays an

important role if there is any issue

with the internal controls then the

audit committee highlights it and makes

sure that this is not faced by the

organization it reviews the performance

of the statutary and internal Auditors

along with adequacy of internal control

systems and internal audit function it

discusses with the internal Auditors any

significant findings and accordingly

follows up whether any issue is there

and it needs to be resolved it reviews

the functioning of whistleblower

mechanism here again an audit committee

plays an important part wherein The

Whistleblower directly reports to the

audit Committee in case of any issue and

accordingly the action is necessary

action is uh taken by the audit

committee it approves the appointment of

Chief Financial Officer I got a question

actually can you say approval of the

appointment of the Chief Financial

Officer which is one of the senior

position of the company now the nomin

ration committee has got the role to

recommend their recommendations for the

appointment of the

senior now the nomination regeration

committee while it is recommending the

approval is lying with the audit

committee so both the Committees do not

in consense if do not agree if the

recommendations of the nomination

committee not acceptable to the audit

procedure

reinitiated okay proced

reinitiated because approval of both

committees are required sir

simultaneously both committees approval

will be required yeah because the

nomination ration committee is actually

not approving Authority but the recommending

recommending

Authority but whereas the audit

committee is the approving Authority

that is where I said

said

sir you can go beyond and say look you

know the board of directors you know

does not approve it then again you know

as sonali revisit you know the whole

thing yeah anyway so no that's what I

said in the beginning the overlapping of

between the

Committees sometime it may

happen but I do not know in reality

because I not to come across at

least since it is a it is a KMP position

even though the information to the stock

also requires right yeah that's right so

as there is overlapping of the

Committees there are also overlapping of

the members of the Committees so even

the person who is a member of an audit

committee is a part of NRC so according

he is a part of both the Committees yeah

right you're right sir yeah yeah yeah it

is very likely you said it rightly

yeah board approval will be required sir

so anyhow NRC approval would also be

required by the board NRC recommends

then goes to the audit committee and

then to the board yeah right that is the

yeah yeah go ahead AUD committee reviews the findings of any internal

the findings of any internal investigations by the Auditors it

investigations by the Auditors it reviews the utilization of loans and

reviews the utilization of loans and advances or any Investments made by the

advances or any Investments made by the company in its subsidiary which exceeds

company in its subsidiary which exceeds 100 crores or 10% of the asset size of

100 crores or 10% of the asset size of the

the subsidiary any Investments existing as

subsidiary any Investments existing as on date and coming into force of this

on date and coming into force of this position provision it considers and

position provision it considers and comments on the rational cost benefits

comments on the rational cost benefits and impacts of schemes involving merger

and impacts of schemes involving merger Dem merger of the listed entity so here

Dem merger of the listed entity so here again an audit committee plays an

again an audit committee plays an important role in uh the restructuring

important role in uh the restructuring of the organization where it takes into

of the organization where it takes into account whether the same would be

account whether the same would be beneficial to The Entity or

not further lodr also provides the following as the mandatory

following as the mandatory reviewed by the audit committee they are

reviewed by the audit committee they are management discussion and Analysis of

management discussion and Analysis of the financial condition and results of

the financial condition and results of the operation of the entity management

the operation of the entity management letters and letters of internal control

letters and letters of internal control Witnesses issued by statutory Auditors

Witnesses issued by statutory Auditors so again any internal control highlight

so again any internal control highlight being highlighted by the statutory

being highlighted by the statutory auditor is always reviewed by the audit

auditor is always reviewed by the audit committee and accordingly it suggests

committee and accordingly it suggests measures so that the said weakness is

measures so that the said weakness is removed internal audit reports relating

removed internal audit reports relating to internal control weakness es the

to internal control weakness es the appointment removal terms of

appointment removal terms of remuneration of the chief internal

remuneration of the chief internal auditor is also reviewed by the audit

auditor is also reviewed by the audit committee and the statement of

committee and the statement of deviations so this statement of

deviations so this statement of deviations is again approved by the

deviations is again approved by the audit committee every quarter and

audit committee every quarter and submitted to the exchanges regarding the

submitted to the exchanges regarding the utilization of funds and any deviation

utilization of funds and any deviation it also reviews the report by the

it also reviews the report by the monitoring agency and accordingly any

monitoring agency and accordingly any deviation from the objects of

deviation from the objects of utilization of the funds is reported to

utilization of the funds is reported to The Exchange

audit committee and insider trading regulations again the code of conduct

regulations again the code of conduct for listed entities to regulate Monitor

for listed entities to regulate Monitor and Report trading by designated person

and Report trading by designated person provides that the compliance officer of

provides that the compliance officer of the listed entity is required to report

the listed entity is required to report to the chairman of the audit committee

to the chairman of the audit committee at least once in a financial year so

at least once in a financial year so here the compliance officer regarding

here the compliance officer regarding the insider trading mechanism which is

the insider trading mechanism which is present in the organization he has to

present in the organization he has to prepare a report and accordingly submit

prepare a report and accordingly submit it to the audit

it to the audit committee it also reviews the compliance

committee it also reviews the compliance with The Insider regulations at regular

with The Insider regulations at regular intervals so that may be quarterly

intervals so that may be quarterly review of The Insider regulations

review of The Insider regulations present in the

present in the organization the uh structured digital

organization the uh structured digital database sdd is supervised by the audit

database sdd is supervised by the audit committee and compliance officer and

committee and compliance officer and they turn report to the

they turn report to the board so any

board so any more light you want to throw on this

more light you want to throw on this insider trading regulations

insider trading regulations sonali the role of the audit

sonali the role of the audit committee audit committee actually is

committee audit committee actually is vested with a lot of responsibilities

vested with a lot of responsibilities under the in trading regulations earlier

under the in trading regulations earlier it was the compliance officer who had

it was the compliance officer who had been vested with most of the

been vested with most of the responsibility under the pit

responsibility under the pit regulations uh going forward after the

regulations uh going forward after the 2020 Amendment now uh the audit

2020 Amendment now uh the audit committee is actually responsible to

committee is actually responsible to oversee the compliances under insided

oversee the compliances under insided regulations we as a listed entity what

regulations we as a listed entity what we do is on quarterly basis we update

we do is on quarterly basis we update the audit committee on what all

the audit committee on what all compliances has been done during the

compliances has been done during the quarter trading window closure any

quarter trading window closure any non-compliance has been observed by from

non-compliance has been observed by from any of the Insiders what all trades in

any of the Insiders what all trades in the Securities of the companies have

the Securities of the companies have happened so a comprehensive report goes

happened so a comprehensive report goes to the audit committee although their

to the audit committee although their responsibility is reviewing only once in

responsibility is reviewing only once in a year but reviewing once in a year

a year but reviewing once in a year would not give Justice to their roles

would not give Justice to their roles and respons responsibil what is provided

and respons responsibil what is provided under law so we follow on quarterly but

under law so we follow on quarterly but many companies do it on six monthly some

many companies do it on six monthly some of them do on yearly basis also so this

of them do on yearly basis also so this way this becomes actually another

way this becomes actually another additional agenda item in the audit

additional agenda item in the audit committee every

committee every time they were doing it actually

time they were doing it actually quarterly bses yeah yeah somebody's

quarterly bses yeah yeah somebody's asking a question is it a must for the

asking a question is it a must for the CFO to be a qualified chartered

CFO to be a qualified chartered accountant again we go back to the

accountant again we go back to the financially literate what we discuss on

financially literate what we discuss on the audit committee if you actually go

the audit committee if you actually go by the act act it does not prescribe any

by the act act it does not prescribe any qualification at all for the appointment

qualification at all for the appointment of the CF because even if you go in the

of the CF because even if you go in the company s also even LOD regulation also

company s also even LOD regulation also even if you say I think 134 if I'm not

even if you say I think 134 if I'm not mistaken It also says CFO is to be

mistaken It also says CFO is to be appointed that's all and he Reed to sign

appointed that's all and he Reed to sign the financial statement other thing and

the financial statement other thing and all and he has got the responsibility

all and he has got the responsibility oversee the financial statement that's

oversee the financial statement that's what it said no the qualification is

what it said no the qualification is mentioned but as we discussed in the

mentioned but as we discussed in the beginning

beginning the person who is heading the

the person who is heading the financial functions need necessarily to

financial functions need necessarily to be a very well literate person in the

be a very well literate person in the field he should be an expert in the

field he should be an expert in the field that is why if we look at it most

field that is why if we look at it most of the companies almost 99% of the

of the companies almost 99% of the companies I can actually put it either

companies I can actually put it either he a qualified chared accountant or

he a qualified chared accountant or qualified MBA Finance Etc that is what

qualified MBA Finance Etc that is what in

practice butali I have a concern like if you put

butali I have a concern like if you put all those responsibility on the audit

all those responsibility on the audit committee okay so like if I have to be a

committee okay so like if I have to be a chairman of that committee as an

chairman of that committee as an independent

independent directors know my responsibilities are

directors know my responsibilities are unlimited I mean the responsibility and

unlimited I mean the responsibility and probably the liability I don't know

probably the liability I don't know whether the tomorrow if anything goes

whether the tomorrow if anything goes wrong in the statements and all tomorrow

wrong in the statements and all tomorrow the director say look it was the uh the

the director say look it was the uh the chairman of the audit committee should

chairman of the audit committee should have taken know so so whatever know he

have taken know so so whatever know he shown we have agreed and approved you

shown we have agreed and approved you know so I don't know on the light on the

know so I don't know on the light on the lighter side we say that audit committee

lighter side we say that audit committee is the core and the Heart of the

is the core and the Heart of the organization and the meetings of the

organization and the meetings of the audit committee runs for more than like

audit committee runs for more than like the double the time of the board

the double the time of the board meeting you are absolutely right son in

meeting you are absolutely right son in fact our audit committee meeting used to

fact our audit committee meeting used to be almost a full day where the board

be almost a full day where the board meeting only half day correct correct

meeting only half day correct correct yes but one thing is there the audit

yes but one thing is there the audit committee isali in the beginning is

committee isali in the beginning is actually guided with the finance

actually guided with the finance committee which is set up in many of the

committee which is set up in many of the companies and also Guided by the Senior

companies and also Guided by the Senior Management and some extent they also

Management and some extent they also take a help of the statutary auditor

take a help of the statutary auditor internal auditor as well but

internal auditor as well but responsibility all s then is actually

responsibility all s then is actually great to the audit committee that is

great to the audit committee that is there I agree with

there I agree with you go the agenda of the audit committee

you go the agenda of the audit committee at the end of the quarter there are

at the end of the quarter there are almost 20 25 items which they need to

almost 20 25 items which they need to approve and take care of yeah right

approve and take care of yeah right looking at the agenda items only we can

looking at the agenda items only we can say how difficult it is to be a part of

say how difficult it is to be a part of an audit committee and approve all those

an audit committee and approve all those transactions somebody is actually asking

transactions somebody is actually asking is it actually practical to all the

is it actually practical to all the members of audit committee to review the

members of audit committee to review the accounts rpt loans

accounts rpt loans Etc see that is where I think what

Etc see that is where I think what happens is

happens is in our secret standard also specifies

in our secret standard also specifies all the documents need to be sent at

all the documents need to be sent at least 7 days in advance

least 7 days in advance in fact in our internally agreed you

in fact in our internally agreed you know the K and kPa

know the K and kPa parameters although the last 7 days once

parameters although the last 7 days once in our case we have been told Ive been

in our case we have been told Ive been given a mandate when I was a company

given a mandate when I was a company secretary I need to send all the agenda

secretary I need to send all the agenda document with the supporting papers in

document with the supporting papers in full 10 working days before the

full 10 working days before the meeting that used to be the agenda

meeting that used to be the agenda actually because the whole idea is to

actually because the whole idea is to give a suff ient time for the people to

give a suff ient time for the people to go through the document understand the

go through the document understand the things prepared and come and put up the

things prepared and come and put up the questioning Etc in fact I heard also

questioning Etc in fact I heard also occasion there are lot of independent

occasion there are lot of independent director they used to call us seek

director they used to call us seek additional information seek additional

additional information seek additional things not only that even they go to the

things not only that even they go to the extent of asking can you actually give

extent of asking can you actually give me what sort of the approval is actually

me what sort of the approval is actually s prop can you give me at least the

s prop can you give me at least the draft resolution what you are expected

draft resolution what you are expected to pass in the meeting to such an extent

to pass in the meeting to such an extent people have actually question actually

people have actually question actually yeah I seek both The panelists View on

yeah I seek both The panelists View on this it is quite

this it is quite interesting yes sir uh the role of audit

interesting yes sir uh the role of audit committee has grown manifold in recent

committee has grown manifold in recent uh Past coming that audit committee not

uh Past coming that audit committee not only have to see the financial reporting

only have to see the financial reporting aspect but also now rpt has been added

aspect but also now rpt has been added to it then visual

to it then visual mechanism Insider and plus now h s to

mechanism Insider and plus now h s to the summ extent like encumberance

the summ extent like encumberance disclosure has has also to be placed

disclosure has has also to be placed before the audit committee so no doubt

before the audit committee so no doubt the audit committee members the

the audit committee members the regulator expect audit committee members

regulator expect audit committee members to be very prudent and of course they

to be very prudent and of course they are backed by the certificates of the

are backed by the certificates of the Senior Management whom they mo in most

Senior Management whom they mo in most cases relied upon and the Senior

cases relied upon and the Senior Management also certificates certified

Management also certificates certified on the basis of the scrutiny so to some

on the basis of the scrutiny so to some extent means the role of audit committee

extent means the role of audit committee members is uh very important but yes

members is uh very important but yes they are supported by the Senior

they are supported by the Senior Management of the company also

sir yes is it is it more practical for one member carry out the review and

one member carry out the review and discuss the findings with other

members not seen that not seen that thing happening the only only issue has

thing happening the only only issue has been that from the time the unpublished

been that from the time the unpublished price sensitive information has become

price sensitive information has become too important Under lodr And The Insider

too important Under lodr And The Insider tring

tring regulations uh board board members the C

regulations uh board board members the C listed entities generally try to provide

listed entities generally try to provide the information in the sealed envelopes

the information in the sealed envelopes of uh the annual report Etc to the board

of uh the annual report Etc to the board members of four or five days prior to

members of four or five days prior to the board meeting and uh they seek their

the board meeting and uh they seek their comment one to one if the uh audit

comment one to one if the uh audit committee members discussed among

committee members discussed among themselves or the board member discussed

themselves or the board member discussed among on themselves that is their choice

among on themselves that is their choice and prerogative but as a company we

and prerogative but as a company we don't show any Initiative for them to

don't show any Initiative for them to come forward on a common platform and

come forward on a common platform and discuss prior to the audit committee and

discuss prior to the audit committee and the board

the board meeting either a mandate audit Committee

meeting either a mandate audit Committee Member should be the member of the NRC

Member should be the member of the NRC understand it can be constituted with a

understand it can be constituted with a totally

totally different directors yes yes totally

different directors yes yes totally different dependent me but

different dependent me but the yeah but the question is you need to

the yeah but the question is you need to have more independent directors on the

have more independent directors on the board thing you're increasing you're

board thing you're increasing you're increasing your board size yeah that's

increasing your board size yeah that's all if you increase the board size say

all if you increase the board size say this can be done there is no problem at

this can be done there is no problem at all but the choice is yours but who's

all but the choice is yours but who's interested in doing that that is the

interested in doing that that is the problem now in Practical if you commit

problem now in Practical if you commit who's interested in doing

who's interested in doing that at least there would be overlapping

that at least there would be overlapping of one or two members if not all yeah

of one or two members if not all yeah that is there

that is there is a separate internal audit department

is a separate internal audit department is compulsory in case of the 5,000 CR

is compulsory in case of the 5,000 CR listed

company no I don't think so because internal audit function either it can be

internal audit function either it can be within the organization or it can be out

within the organization or it can be out sour that is what the requirement is

sour that is what the requirement is there I think and and the Caro provides

there I think and and the Caro provides that there has to be internal control

that there has to be internal control procedures in place it doesn't talk

procedures in place it doesn't talk about that the internal auditor should

about that the internal auditor should be 5,000 because it is driven from Caro

be 5,000 because it is driven from Caro and what lodr suggests that there has to

and what lodr suggests that there has to be an internal auditor and the audit

be an internal auditor and the audit committee has to review the reporting

committee has to review the reporting and appointment of the internal auditor

and appointment of the internal auditor uh coming to uh in-house internal audit

uh coming to uh in-house internal audit and outside we have tried both but the

and outside we have tried both but the thing is that outside internal Auditors

thing is that outside internal Auditors have always been more effective compared

have always been more effective compared to the in-house internal Auditors

to the in-house internal Auditors in-house internal Auditors uh there is

in-house internal Auditors uh there is again a reporting issue because on dayto

again a reporting issue because on dayto day basis they have to report to the

day basis they have to report to the managing director which is

managing director which is Administrative reporting functional

Administrative reporting functional reporting West with the audit committee

reporting West with the audit committee they meet the audit committee like not

they meet the audit committee like not more than five to six times in a year so

more than five to six times in a year so those challenges

those challenges continues so outside is always

continues so outside is always preferable from the Practical standpoint

preferable from the Practical standpoint I also agree with you because the

I also agree with you because the outside people are there we can get you

outside people are there we can get you know better practices better things

know better practices better things their expertise knowledge ET in M other

their expertise knowledge ET in M other Industries we can have definitely better

Industries we can have definitely better thing that is true actually there one

thing that is true actually there one more question has put is there is the

more question has put is there is the violence of the p how could the Quantum

violence of the p how could the Quantum of the penalty be determined by the

of the penalty be determined by the audit

audit committee no Quantum of the penalty is

committee no Quantum of the penalty is determined by the code in inside a

determined by the code in inside a trading code of conduct audit committee

trading code of conduct audit committee has to just monitor that the compliances

has to just monitor that the compliances under the pit regulations are happening

under the pit regulations are happening or not rather it has been the

or not rather it has been the responsibility of the compliance officer

responsibility of the compliance officer and the managing director as per the

and the managing director as per the court to decide the penalties in most of

court to decide the penalties in most of the companies but uh the monitoring of

the companies but uh the monitoring of the same bestest with the audit

the same bestest with the audit committee so it has has a supervision

committee so it has has a supervision role rather not an executive role in

this I don't know there's another question which is there actually since

question which is there actually since these days all the presentation

these days all the presentation including the internal audit and straty

including the internal audit and straty presentation and board presentations are

presentation and board presentations are being presented directly to the audit

being presented directly to the audit committee meeting so how practically is

committee meeting so how practically is it possible for the audit committee to

it possible for the audit committee to review

review all of them thoroughly unless some are

all of them thoroughly unless some are actually highlighted to

them audit committee generally uh takes their own decisions if they want further

their own decisions if they want further Insight they ask the management they ask

Insight they ask the management they ask the internal Auditors the they decide as

the internal Auditors the they decide as to how comfortable they are the way the

to how comfortable they are the way the reporting of the financials are being

reporting of the financials are being done to them and uh ultimately it rest

done to them and uh ultimately it rest with the chairman of the audit committee

with the chairman of the audit committee who seeks the process right that whether

who seeks the process right that whether I need further information from the CFO

I need further information from the CFO or I need from internal Auditors or I

or I need from internal Auditors or I need a elaborated presentation so it's

need a elaborated presentation so it's various means and ways in which the

various means and ways in which the audit committee tries to become

audit committee tries to become comfortable in their

comfortable in their shoes what is what the finance head is a

shoes what is what the finance head is a part of the audit committee meetings

part of the audit committee meetings also so that they could explain the

also so that they could explain the members regarding

members regarding any yeah they are the attendees yes yes

any yeah they are the attendees yes yes what is the ideal for internal audit

what is the ideal for internal audit committee

committee we internal audit committee we are not

we internal audit committee we are not discussing the internal audit committee

discussing the internal audit committee we are talking about audit committee I'm

we are talking about audit committee I'm not clear what is the mind in the

not clear what is the mind in the reader not having day to access ideal

reader not having day to access ideal for internal audit

for internal audit maybe uh I think they are saying ke uh

maybe uh I think they are saying ke uh since external audit is follow since

since external audit is follow since external audit agency is not having any

external audit agency is not having any day-to-day

day-to-day access no exal a need not have the

access no exal a need not have the access because he goes through the

access because he goes through the various Financial things ET normally

various Financial things ET normally what happens is whenever the external

what happens is whenever the external person is also there any of the company

person is also there any of the company now the digital they are actually given

now the digital they are actually given a specific access to go through all the

a specific access to go through all the transaction which has happened that is

transaction which has happened that is what they do actually they go through

what they do actually they go through each and everything and they come out

each and everything and they come out with their solutions they may not be on

with their solutions they may not be on day today the organization or something

day today the organization or something like

like that can a company secretary me the

that can a company secretary me the whole time employment be appointed as

whole time employment be appointed as the internal auditor of the same company

the internal auditor of the same company will there be a conflict of

interest internal auditor has to be independent there will definitely be

independent there will definitely be conflict of interest because as such

conflict of interest because as such internal auditor role itself is

internal auditor role itself is challenging because till now it is very

challenging because till now it is very difficult to establish independence of

difficult to establish independence of In-House internal auditor because

In-House internal auditor because internal auditor that way has to report

internal auditor that way has to report to the audit committee but for

to the audit committee but for day-to-day operations how the

day-to-day operations how the administratively they will function they

administratively they will function they have to report to somebody in the

have to report to somebody in the organization so any reporting in the

organization so any reporting in the organization itself creates a question

organization itself creates a question mark on the transparency and

mark on the transparency and independency of the in-house internal

independency of the in-house internal auditor if it is a compliance officer

auditor if it is a compliance officer there is not something that compliance

there is not something that compliance officer cannot be internal auditor but

officer cannot be internal auditor but the thing is that Independence and

the thing is that Independence and transparency cannot be maintained it'll

transparency cannot be maintained it'll be further more challenged yeah

be further more challenged yeah theoretically it is possible but when it

theoretically it is possible but when it come to the practicality looking at the

come to the practicality looking at the complexity looking at the compliance

complexity looking at the compliance requirement Etc it is really impossible

requirement Etc it is really impossible for a company security to function both

for a company security to function both the things especially in the listed

the things especially in the listed company and the larger company that is

company and the larger company that is one and coming to my own personal

one and coming to my own personal experience we also had an internal audit

experience we also had an internal audit initially you know people were not happy

initially you know people were not happy then we decided to Outsource but the

then we decided to Outsource but the question is who will actually oversee

question is who will actually oversee the

the outside internal audit functions and

outside internal audit functions and other thing and all that time the board

other thing and all that time the board discussed elaborately then ultimately

discussed elaborately then ultimately they decided the company secretary will

they decided the company secretary will be the company secretary also the head

be the company secretary also the head of the internal audit who responsible to

of the internal audit who responsible to oversee the things that is what it is

oversee the things that is what it is decided I was actually holding the

decided I was actually holding the position that way but the thing is I was

position that way but the thing is I was not involved in the internal audit I was

not involved in the internal audit I was actually used to prepare what is the

actually used to prepare what is the terms of reference for the internal

terms of reference for the internal audit and are to be interal audited Etc

audit and are to be interal audited Etc and other I used to monitor I used to

and other I used to monitor I used to facilitate but reporting is always

facilitate but reporting is always interal auditor to directly to the audit

interal auditor to directly to the audit committee audit committee I was only the

committee audit committee I was only the coordinating uh person to see the

coordinating uh person to see the the internal audit function goes well

the internal audit function goes well well laid out Etc of course with the

well laid out Etc of course with the discussion with the audit committee

discussion with the audit committee members that is what I was doing to come

members that is what I was doing to come to the Practical

to the Practical experience the support of the audit

experience the support of the audit Committee of

Committee of internal audit Department especially

internal audit Department especially inhouse will become effective that's

inhouse will become effective that's what somebody is saying what is the

what somebody is saying what is the thought in-house has only challenges of

thought in-house has only challenges of Independence and

Independence and transparency they they come under the

transparency they they come under the influence of the various user

influence of the various user departments and as far as external is

departments and as far as external is concerned they follow Set pet protocols

concerned they follow Set pet protocols this is has yeah as you rightly say

this is has yeah as you rightly say internally you know there is something

internally you know there is something always you know if I report this what

always you know if I report this what will happen if I don't report this what

will happen if I don't report this what will happen and all the sort of things

will happen and all the sort of things will be there because of the employing

will be there because of the employing contractual obligations

contractual obligations yeah yeah this is this is the right

yeah yeah this is this is the right thing the contractual obligation of the

thing the contractual obligation of the employee

employee correct the things why we should not

correct the things why we should not have yeah in spite of being a FCA CA and

have yeah in spite of being a FCA CA and qualified MCA directorship the

qualified MCA directorship the expectations of the independent auditor

expectations of the independent auditor Sky High are lot of responsibility

Sky High are lot of responsibility better to avoid the director I guess I

better to avoid the director I guess I won't say anything on

won't say anything on that for more better compliance controll

that for more better compliance controll in all the parameter like Financial

in all the parameter like Financial compliance in those internal audit is

compliance in those internal audit is there more effective yeah internal audit

there more effective yeah internal audit is required in fact law made it very

is required in fact law made it very compulsory for the internal audit for

compulsory for the internal audit for certain category of the company

certain category of the company appointment of the internal auditor is

appointment of the internal auditor is actually a mandatory and in fact Strat

actually a mandatory and in fact Strat auditor governed many time by the

auditor governed many time by the internal auditor even by choosing the

internal auditor even by choosing the audit program itself how much they to

audit program itself how much they to rely upon how much check they all to do

rely upon how much check they all to do and all the things decided by the exal

and all the things decided by the exal auditor even after taking the internal

Auditors yeah go ahead a I think we are still in the second

still in the second already 12 1220 we need a lot of things

already 12 1220 we need a lot of things to go please so regulation 19 of the SE

to go please so regulation 19 of the SE lodr provides for the constitution of

lodr provides for the constitution of another important committee that is

another important committee that is nomination and remuneration

nomination and remuneration committee it shall consist of three

committee it shall consist of three directors and all the directors of the

directors and all the directors of the committee needs to be non-executive

committee needs to be non-executive directors two3 of the directors of this

directors two3 of the directors of this committee shall be

committee shall be independent the chairperson of the

independent the chairperson of the committee shall be an independent

committee shall be an independent director further it also provides that

director further it also provides that the chairperson of the listed company

the chairperson of the listed company entity whether he is executive or

entity whether he is executive or non-executive can be a member of an NRC

non-executive can be a member of an NRC but he shall not be a chairman of the

but he shall not be a chairman of the committee the chairperson shall be

committee the chairperson shall be present at the annual Journal meeting to

present at the annual Journal meeting to answer the queries of the

shareholders further the regulation provides that either two members or

provides that either two members or onethird of the members of the committee

onethird of the members of the committee whichever is greater shall constitute

whichever is greater shall constitute the Corum including at least one

the Corum including at least one independent director to be present at

independent director to be present at the meeting and the NRC shall meet at

the meeting and the NRC shall meet at least once in a year again NRC the role

least once in a year again NRC the role of the NRC is very wide and very

of the NRC is very wide and very important for any listed entity and

important for any listed entity and meeting once in a year will not be

meeting once in a year will not be possible as a number of responsibilities

possible as a number of responsibilities and decision making Powers is there with

and decision making Powers is there with the

NRC what do you think Sali is the NRC committee meets only once or it is more

committee meets only once or it is more than once twice th what is the

than once twice th what is the experience generally more than once

experience generally more than once generally because the review of the

generally because the review of the performance of the senior leadership

performance of the senior leadership when you have quarterly payouts defined

when you have quarterly payouts defined it has to be more than once

yeah forther Part B of schedule two of SE lodia provides for the role of the

SE lodia provides for the role of the nomination and remuneration

nomination and remuneration committee which provides that it

committee which provides that it formulates the criteria for deter in the

formulates the criteria for deter in the qualifications positive attributes and

qualifications positive attributes and Independence of a director it also

Independence of a director it also recommends to the board of directors the

recommends to the board of directors the policy relating to the remuneration of

policy relating to the remuneration of directors KMS and other

directors KMS and other employees every appointment of the

employees every appointment of the independent director is properly

independent director is properly scrutinized by the committee by

scrutinized by the committee by preparing a description of the role and

preparing a description of the role and capabilities of that director it

capabilities of that director it evaluates the performance of independent

evaluates the performance of independent directors and the board of directors so

directors and the board of directors so NRC plays an important role in

NRC plays an important role in identifying correct people are on the

identifying correct people are on the board of the company so that uh the

board of the company so that uh the company gains advantage to the expertise

company gains advantage to the expertise which it brings to the

board it also identifies the persons who are qualified to become directors and

are qualified to become directors and who may be appointed in the Senior

who may be appointed in the Senior Management of the

Management of the company it also decides whether to

company it also decides whether to extend or continue the term of

extend or continue the term of appointment of the independent director

appointment of the independent director on the basis of the report of the EV

on the basis of the report of the EV performance evaluation so again it plays

performance evaluation so again it plays an important role uh in the appointment

an important role uh in the appointment and in the continuation of the term of

and in the continuation of the term of the independent director or any other

the independent director or any other director in the board so even if a

director in the board so even if a director of a company is retiring by

director of a company is retiring by rotation it is placed before the NRC

rotation it is placed before the NRC whether he is eligible for

whether he is eligible for reappointment it also recommends to the

reappointment it also recommends to the board remuneration in whatever form that

board remuneration in whatever form that is payable to the Senior Management so

is payable to the Senior Management so again it dep it defines a qualitative

again it dep it defines a qualitative and quantitative criteria on the basis

and quantitative criteria on the basis of which the directors executive

of which the directors executive directors and the Senior Management of

directors and the Senior Management of the entity are remunerated accordingly

the entity are remunerated accordingly properly given incentives and uh bonus

properly given incentives and uh bonus or any esops whatever is being granted

or any esops whatever is being granted in the

in the company so any more insights on the role

company so any more insights on the role of the NRC

of the NRC HMA uh for independent director the NRC

HMA uh for independent director the NRC also looks for the uh uh EV the skills

also looks for the uh uh EV the skills experience available on the board on the

experience available on the board on the basis of that the NRC prepares the

basis of that the NRC prepares the description of role of role and

description of role of role and responsibility of the independent

responsibility of the independent directors and then propose the right

directors and then propose the right candidate who is suitable for the role

candidate who is suitable for the role so NRC basically is the entry gate for

so NRC basically is the entry gate for the boardroom as well as for the Senior

the boardroom as well as for the Senior Management Personnel in the company so

Management Personnel in the company so it's basically the right person at the

it's basically the right person at the right place is decided by the NRC NRC is

right place is decided by the NRC NRC is the first step toward this

the first step toward this further to retain and motivate the

further to retain and motivate the employees Senior Management as well as

employees Senior Management as well as director NRC prepares the remuneration

director NRC prepares the remuneration structures and recommends the same to

structures and recommends the same to the board third thing is that uh coming

the board third thing is that uh coming to the uh renewal of the term of

to the uh renewal of the term of the uh independent director the NRC

the uh independent director the NRC reviews the performance of The

reviews the performance of The Independent director and recommends the

Independent director and recommends the continuation of independent director so

continuation of independent director so here the basically the human uh aspect

here the basically the human uh aspect has been interested with the NRC

has been interested with the NRC committee which sees that person is the

committee which sees that person is the right person is there sitting on the

right person is there sitting on the board or on the Senior Management then

board or on the Senior Management then sees that that person is fully motivated

sees that that person is fully motivated to the remuneration or other forms of

to the remuneration or other forms of the package or other things and then

the package or other things and then whether to continue with that same

whether to continue with that same person set of person or not so overall

person set of person or not so overall the human aspect of of the top

the human aspect of of the top management is looked after by the NRC

committee further I think they also play an important role in the appointment of

an important role in the appointment of any uh individual on the office or place

any uh individual on the office or place of profit where they have to justify how

of profit where they have to justify how it is how a related party is being

it is how a related party is being appointed to that place and accordingly

appointed to that place and accordingly remunerated so even there it plays an

remunerated so even there it plays an important

uh regulation 20 of SE lodr provides for the constitution of stakeholders

the constitution of stakeholders relationship

relationship committee so one question is there on

committee so one question is there on NRC in case of the appointment of the

NRC in case of the appointment of the KMS what is the stage when MRC committee

KMS what is the stage when MRC committee be involved or is it right from the

be involved or is it right from the screening or it only stamps a choice of

screening or it only stamps a choice of the

management interesting question so actually for the KMP positions it goes

actually for the KMP positions it goes from the screening the NRC actually

from the screening the NRC actually meets the KMS they meet the senior

meets the KMS they meet the senior leadership and then the appointment

leadership and then the appointment happens what the management does is only

happens what the management does is only if that to if NRC says recommend certain

if that to if NRC says recommend certain positions to the NRC so ultimately NRC

positions to the NRC so ultimately NRC decides the protocol they may also think

decides the protocol they may also think that we want an executive Search agency

that we want an executive Search agency we want somebody from outside to come

we want somebody from outside to come and recommend certain profiles to us or

and recommend certain profiles to us or they may delegate to the management so

they may delegate to the management so it is how the NRC would set the stage

it is how the NRC would set the stage right and screening uh in 90% cases it

right and screening uh in 90% cases it is done by

is done by NRC not provided in law anywhere but

NRC not provided in law anywhere but this is how uh the N can ensure that the

this is how uh the N can ensure that the appointment is recommended in the right

appointment is recommended in the right perspective to the board of

perspective to the board of directors I also would presume bu a lar

directors I also would presume bu a lar in the LI companies and the larger

in the LI companies and the larger companies and all the same this is what

companies and all the same this is what it is happening but all sudden and done

it is happening but all sudden and done coming to the unlisted public companies

coming to the unlisted public companies which are more or less run by promoter

which are more or less run by promoter and family people except and all the

and family people except and all the things where the independent director

things where the independent director itself is actually questionable because

itself is actually questionable because strally independent director is there

strally independent director is there that is why they are actually there

that is why they are actually there otherwise they are not involved they

otherwise they are not involved they don't know any business Etc that sort of

don't know any business Etc that sort of the thinking is actually there in some

the thinking is actually there in some of the companies I believe it is only

of the companies I believe it is only you know sort of a thing what the

you know sort of a thing what the participant says okay because record the

participant says okay because record the approval from here so you people beat

approval from here so you people beat give your approval we will take it that

give your approval we will take it that is happening in some of the unlisted

is happening in some of the unlisted companies like this you know promoter D

companies like this you know promoter D and I think

and I think so

yeah and MD is to be appointed by the holding company for its subsidary as for

holding company for its subsidary as for the association and article of the

the association and article of the company which authori holding company

company which authori holding company will appoint the MD or whether it will

will appoint the MD or whether it will be required con as by NRC in the holding

company first of all NRC would not according to me NRC would not play any

according to me NRC would not play any role here because this is something uh

role here because this is something uh between the holding and the subsidiary

between the holding and the subsidiary company and not governed by the

company and not governed by the lodr uh appointment can be made by the

lodr uh appointment can be made by the holding company if it is provided so but

holding company if it is provided so but definitely the board of the subsidiary

definitely the board of the subsidiary should also

consider somebody is actually putting only an auditor will understand another

only an auditor will understand another auditor and the accounting standard so

auditor and the accounting standard so one person from the auditing profession

one person from the auditing profession is therefore necessary to have in the

is therefore necessary to have in the audit

audit committee yes so the audit committee

committee yes so the audit committee generally uh the board decides the

generally uh the board decides the protocol of the composition of the audit

protocol of the composition of the audit committee so they every industry and

committee so they every industry and every board they have a different

every board they have a different mindset they decide the skill metrics

mindset they decide the skill metrics and uh then they decide from from which

and uh then they decide from from which metrics is more important in their

metrics is more important in their particular industry is it the the

particular industry is it the the technical expertise or it is a financial

technical expertise or it is a financial or accounting or auditing so accordingly

or accounting or auditing so accordingly they nominate the members from uh the

they nominate the members from uh the entire panel to the audit

entire panel to the audit committee can I speak yeah sure yeah I

committee can I speak yeah sure yeah I asked a question that in case of a

asked a question that in case of a holding company uh it is required to

holding company uh it is required to appoint a MD of its subsidary company uh

appoint a MD of its subsidary company uh as per the agreement promoters agreement

as per the agreement promoters agreement as well as as for the articles of of the

as well as as for the articles of of the subsidiary company now MD is to be

subsidiary company now MD is to be appointed by the holding company and

appointed by the holding company and that appointment is binding on the

that appointment is binding on the subsidiary company now the question is

subsidiary company now the question is who will appoint the such MD of the

who will appoint the such MD of the subsidiary company in the holding

subsidiary company in the holding company which authority will appoint

company which authority will appoint whether this will require consideration

whether this will require consideration of the NRC of the holding company or the

of the NRC of the holding company or the CMD will appoint or the board will

CMD will appoint or the board will appoint who will

appoint according to me you should be govern only by your articles and

govern only by your articles and internal agreements between the holding

internal agreements between the holding and the subid agreement that holding

and the subid agreement that holding will Appo so holding will be appointed

will Appo so holding will be appointed by holding am but who will appoint when

by holding am but who will appoint when it says it will be appointed by holding

it says it will be appointed by holding am will appoint so then it has to be V

am will appoint so then it has to be V if because if it is not delegated

if because if it is not delegated authority to but it is nowh written that

authority to but it is nowh written that the such appointment is to be made by

the such appointment is to be made by the board it is nowh in the authority of

the board it is nowh in the authority of the board as such uh in in the normal

the board as such uh in in the normal context if it is not a delegated

context if it is not a delegated authority the decision decisions of the

authority the decision decisions of the board is Bing on the organization but

board is Bing on the organization but when uh you have to I think you have to

when uh you have to I think you have to go into the detail of your own case that

go into the detail of your own case that whether it is the shareholders agreement

whether it is the shareholders agreement which is there in place what does the

which is there in place what does the shareholder agreement say was it

shareholder agreement say was it approved by the board when it was

approved by the board when it was approved by the board what kind of

approved by the board what kind of authority was delegated by the board of

authority was delegated by the board of directors to take the necessary action

directors to take the necessary action as per the agreement which has been

as per the agreement which has been approved so I think your case specific

approved so I think your case specific documents you have to review actually

documents you have to review actually actually no such specific thing is given

actually no such specific thing is given the only consideration from my point of

the only consideration from my point of view is that because you are appointing

view is that because you are appointing a very senior person who is a board

a very senior person who is a board member of a subsidiary and for

member of a subsidiary and for appointment of any senior functionary

appointment of any senior functionary the matters require consideration of the

the matters require consideration of the NRC so why this matter should not be

NRC so why this matter should not be considered by NRC and then the board

considered by NRC and then the board should approve it NRC is actually only

should approve it NRC is actually only for the particular company not for the

for the particular company not for the subsidary company so that is very clear

subsidary company so that is very clear if any appointment is actually required

if any appointment is actually required to be done in the board of the holding

to be done in the board of the holding company then NRC comes into the pure NRC

company then NRC comes into the pure NRC cannot actually step out their limits

cannot actually step out their limits beyond the company when you talk about

beyond the company when you talk about subsidary company subsidary company is a

subsidary company subsidary company is a separate entity on which NRC members are

separate entity on which NRC members are the neither the member nor connected

the neither the member nor connected with them so in which case that cannot

with them so in which case that cannot be the case because probably when you

be the case because probably when you say there is nothing in there it is only

say there is nothing in there it is only the AA the holding company will appear

the AA the holding company will appear then when you say holding company is

then when you say holding company is actually govern by the board of

actually govern by the board of directors so if the board take the

directors so if the board take the decision that is the end of

decision that is the end of it one more point one

it one more point one more just one more point to add if the

more just one more point to add if the officer belongs to the holding company

officer belongs to the holding company the officer to be appointed on the

the officer to be appointed on the subsidiary company is an officer of the

subsidiary company is an officer of the holding company in that case also do you

holding company in that case also do you think that nrc's recommendation is not

think that nrc's recommendation is not required no not no not at all not

required no not no not at all not because they don't have the powers to

because they don't have the powers to exercise because NRC cannot exercise any

exercise because NRC cannot exercise any power in the stock the subsidary company

power in the stock the subsidary company because the appointment is going to be

because the appointment is going to be in the subsidary company NRC no way

in the subsidary company NRC no way connected with the subsidary company one

connected with the subsidary company one sir this is fine one more question

sir this is fine one more question pertaining to the audit committee can I

pertaining to the audit committee can I ask a question relating to audit

ask a question relating to audit committee yeah if you permit yes yes

committee yeah if you permit yes yes yeah my question is let company ja says

yeah my question is let company ja says the persons who are the chairman and

the persons who are the chairman and members of the

your voice is not some problem yeah as for the Comm act and as

problem yeah as for the Comm act and as for the CB lodr uh the persons who are

for the CB lodr uh the persons who are chairman and members of the audit

chairman and members of the audit committee they should be able to read

committee they should be able to read and understand the financial statements

and understand the financial statements so how you how you interpret it who is

so how you how you interpret it who is capable of reading it and who is not

capable of reading it and who is not capable I don't know whether you are

capable I don't know whether you are there in the initial or not this we

there in the initial or not this we actually talked in the initial stages

actually talked in the initial stages law says the understanding thing

law says the understanding thing practically we need an expert because

practically we need an expert because even sonali actually shared thought when

even sonali actually shared thought when we give a chance will you go by a just a

we give a chance will you go by a just a be graduate who knows the financial

be graduate who knows the financial literacy whether we will go by a MBA

literacy whether we will go by a MBA qualified person or the immediate action

qualified person or the immediate action was we will go by the APA person we need

was we will go by the APA person we need an expert to understand the thing that's

an expert to understand the thing that's what it is it goes much

what it is it goes much Beyond so Financial literate should be

Beyond so Financial literate should be in the context of your business actually

in the context of your business actually it is not General generalist Financial

it is not General generalist Financial late

yeah one more thing is there here the recent observation of the NFA maybe

recent observation of the NFA maybe noted I think in sharing the thought I

noted I think in sharing the thought I think so that the members of the audit

think so that the members of the audit committee need to ask the right

committee need to ask the right positions in the given context before

positions in the given context before approving the item this indirectly

approving the item this indirectly speaks of the financial expertise and

speaks of the financial expertise and again appreciation voice application

again appreciation voice application wise the audit committee members yeah

wise the audit committee members yeah that is always there because the

that is always there because the independent director non executive

independent director non executive director or ref to enquire find out

director or ref to enquire find out check before they take a decision that

check before they take a decision that is always the case that is what is

is always the case that is what is highlighted here I

believe yeah go ahead AIA I think we are running out of time I think we need to

running out of time I think we need to cover two more committees I think yeah

cover two more committees I think yeah yes sir so regulation 20 of the seod

yes sir so regulation 20 of the seod regulation provides for the constitution

regulation provides for the constitution of stakeholders

committee uh SRC is formed to look into various aspects of the interest of the

various aspects of the interest of the shareholders debenture holders and other

shareholders debenture holders and other security holders so though the

security holders so though the nomenclature of the committee States

nomenclature of the committee States stakeholders it is primarily for the

stakeholders it is primarily for the benefit of shareholders deure holders

benefit of shareholders deure holders and security holders of a company the

and security holders of a company the chairperson of the SRC shall be a

chairperson of the SRC shall be a non-executive director and he shall be

non-executive director and he shall be present at the annual general meeting to

present at the annual general meeting to answer the queries at least three

answer the queries at least three directors with at least one being an

directors with at least one being an independent director should be pres

independent director should be pres should be the members of the committee

should be the members of the committee the committee shall meet at least once a

the committee shall meet at least once a year so again here though the

year so again here though the regulations provide for the meeting of

regulations provide for the meeting of the committee only once a year SRC may

the committee only once a year SRC may be required to meet more than uh that to

be required to meet more than uh that to address the Grievances of the

address the Grievances of the shareholders or any difficulties in the

shareholders or any difficulties in the process of their claims so accordingly

process of their claims so accordingly it needs to meet at regular

Part D of schedule two of lodr Regulation provides for the role of the

SRC so SRC resolves the Grievances of the security holders having complaints

the security holders having complaints relating to transfer or transmission of

relating to transfer or transmission of shares non receipt of annual report or

shares non receipt of annual report or non receipt of dividends declared so

non receipt of dividends declared so here again when the uh share Department

here again when the uh share Department of the company is being interested to an

of the company is being interested to an outside RTA then the S it is the duty of

outside RTA then the S it is the duty of the SRC to have proper reporting from

the SRC to have proper reporting from the RTA saying how they have handled the

the RTA saying how they have handled the request which they may have received

request which they may have received during the quarter or during a half year

during the quarter or during a half year period and accordingly address any

period and accordingly address any grievances that may be

grievances that may be pending review of adance to the service

pending review of adance to the service standards adopted in respect of various

standards adopted in respect of various Services being rendered by the

Services being rendered by the RTA

review of measures taken for Effective exercise of voting rights by the

exercise of voting rights by the shareholders and it also reviews the

shareholders and it also reviews the measures and takes initiatives for

measures and takes initiatives for reducing the Quantum of unclaimed

reducing the Quantum of unclaimed dividends ensuring timely receipt of

dividends ensuring timely receipt of dividend warrants Etc by the

dividend warrants Etc by the shareholders of the

company so here if for the SRC committee also the company Secretary of the

also the company Secretary of the company plays an important role where it

company plays an important role where it makes available all the necessary

makes available all the necessary reports that may be required by the

reports that may be required by the members of the committee at regular

intervals regulation 21 of lodr Regulation provides for the constitution

Regulation provides for the constitution of the risk management

of the risk management committee so the formation of risk

committee so the formation of risk management committee is applicable to

management committee is applicable to top thousand listed entities and the

top thousand listed entities and the same is determined on the basis of

same is determined on the basis of market capitalization as at the end of

market capitalization as at the end of the immediately preceding Financial year

the immediately preceding Financial year further it is also applicable to a high

further it is also applicable to a high value debt listed

value debt listed entity RMC is uh needs minimum of three

entity RMC is uh needs minimum of three members with majority of them being

members with majority of them being members of the board of directors

members of the board of directors including at least one independent

including at least one independent director further this is the only

director further this is the only committee which provides for the

committee which provides for the inclusion of senior Executives of the

inclusion of senior Executives of the listed entity as members of the

listed entity as members of the committee

committee however it also provides that the

however it also provides that the chairperson of the RMC shall be a member

chairperson of the RMC shall be a member of the board of

directors the Quorum of the RMC shall be either two members or one-third of the

either two members or one-third of the members of the committee whichever is

members of the committee whichever is higher including at least one member of

higher including at least one member of the board of directors who shall be

the board of directors who shall be present the committee shall meet at

present the committee shall meet at least twice a year and it shall be

least twice a year and it shall be conducted in such a manner that one

conducted in such a manner that one continuous basis not more than 180 days

continuous basis not more than 180 days shall elapse between any two consecutive

shall elapse between any two consecutive meetings here again though the frequency

meetings here again though the frequency has been provided by the lodr to be only

has been provided by the lodr to be only two meetings in an annual year RNC plays

two meetings in an annual year RNC plays a very important role in respect of the

a very important role in respect of the risk make decisions that it may have to

risk make decisions that it may have to take so the frequency may be uh more

take so the frequency may be uh more regarding to the

regarding to the meetings the board of directors shall

meetings the board of directors shall Define the roles and responsibilities of

Define the roles and responsibilities of that of the RMC and also delegate

that of the RMC and also delegate monitoring and reviewing of the risk

monitoring and reviewing of the risk management plan to the committee

management plan to the committee particularly covering cyber security so

particularly covering cyber security so now the risk pertaining are not only to

now the risk pertaining are not only to external and physical risk that or any

external and physical risk that or any internal risk that it may be facing the

internal risk that it may be facing the cyber security risk is an important risk

cyber security risk is an important risk which any entity in today's time

which any entity in today's time phase in fact the risk management

phase in fact the risk management Committee in our company where I was

Committee in our company where I was working used to meet every quarterly not

working used to meet every quarterly not only every quarterly even sometime we

only every quarterly even sometime we used to have more than four meeting six

used to have more than four meeting six meeting seven meeting and each time when

meeting seven meeting and each time when the board meets the risk management

the board meets the risk management committee also meets and authoriz the

committee also meets and authoriz the things and the status actually put up to

things and the status actually put up to the board that used to be the practice

the board that used to be the practice because risk is one thing which they all

because risk is one thing which they all to on ongoing B regularly they all to

to on ongoing B regularly they all to monitor they all to work it out so this

monitor they all to work it out so this cannot be twice in a year or something

cannot be twice in a year or something like that it be more frequent most of

like that it be more frequent most of the companies it is like that I think so

the companies it is like that I think so sonali your expertise yeah I agree with

sonali your expertise yeah I agree with you vaj it is 100% like this only it's

you vaj it is 100% like this only it's on quarterly basis so what happens is

on quarterly basis so what happens is the risk management management committee

the risk management management committee uh prepares a report for the board of

uh prepares a report for the board of directors and also the risk register of

directors and also the risk register of the organization is quite exhaustive so

the organization is quite exhaustive so you have various risk many risks travel

you have various risk many risks travel from low medium to high at different

from low medium to high at different frequencies in a year so the high risk

frequencies in a year so the high risk has to mandatorily go to the board of

has to mandatorily go to the board of directors this is how the policy

directors this is how the policy prescribes generally and when you keep

prescribes generally and when you keep on evaluating on regular basis you are

on evaluating on regular basis you are actually mitigating the risk in the

actually mitigating the risk in the right manner which in any ways if it

right manner which in any ways if it goes only twice in a year it will not

goes only twice in a year it will not be actually evaluated in the right

be actually evaluated in the right manner risk like we have seen co co as a

manner risk like we have seen co co as a risk to the companies which if we would

risk to the companies which if we would have waited for this six monthly meeting

have waited for this six monthly meeting then it would have created a disaster

then it would have created a disaster for the organizations so it has to be as

for the organizations so it has to be as frequent as possible depending upon the

frequent as possible depending upon the uh risk appetite whether how many risk

uh risk appetite whether how many risk are following in the high risk category

are following in the high risk category and medium ones in but as I was heading

and medium ones in but as I was heading the internal audit function coordinating

the internal audit function coordinating the thing one of the Mandate I used to

the thing one of the Mandate I used to give to the inter auditor is whenever

give to the inter auditor is whenever they come across any irregularities non-

they come across any irregularities non- compliance Etc he used to exercise his

compliance Etc he used to exercise his risk Matrix he has to give risk in the

risk Matrix he has to give risk in the scale of one to five highest risk medium

scale of one to five highest risk medium risk low risk negligible risk he has to

risk low risk negligible risk he has to rate and give the risk that is the way

rate and give the risk that is the way you we used to analyze and these things

you we used to analyze and these things directly used to go to the audit

directly used to go to the audit committee and if there is a allowing

committee and if there is a allowing things ET and it is escalated further to

things ET and it is escalated further to the board

the board yeah

yeah and one more thing is ask here in the

and one more thing is ask here in the some of the boards NRC also conduct the

some of the boards NRC also conduct the succession planning and talent pipeline

succession planning and talent pipeline building in the top level that is

building in the top level that is conducted annually to keep internal

conducted annually to keep internal Talent getting ready for the

Talent getting ready for the camping normally in many organization

camping normally in many organization the second line person is actually

the second line person is actually prepared really if he goes what that

prepared really if he goes what that stop much will depend upon what is the

stop much will depend upon what is the company's policy actually whether they

company's policy actually whether they wait for the position to be start or

wait for the position to be start or whether they actually keep ready the

whether they actually keep ready the succession that's all much depends on

succession that's all much depends on the company policy and one more thing is

the company policy and one more thing is there coming to the KMS normally by and

there coming to the KMS normally by and large in most of the companies the

large in most of the companies the notice period of a separation is

notice period of a separation is generally 3 months because earlier it

generally 3 months because earlier it should be one month but when it come to

should be one month but when it come to the KB ET I think it is actually 3 month

the KB ET I think it is actually 3 month period the 3 month period is means they

period the 3 month period is means they they have the enough time to prepare by

they have the enough time to prepare by the time the position gets W they buil

the time the position gets W they buil up that's what I think

so yeah succession planning has uh become the main terms of reference for

become the main terms of reference for the NRC and it goes to the board on and

the NRC and it goes to the board on and the NRC on every yearly basis now when

the NRC on every yearly basis now when we plan the succession as you rightly

we plan the succession as you rightly mentioned it can be shortterm and

mentioned it can be shortterm and long-term but generally companies

long-term but generally companies present both the scenarios in shortterm

present both the scenarios in shortterm who would be the successor and the

who would be the successor and the long-term who would be the successor and

long-term who would be the successor and short-term intermediary charge can be

short-term intermediary charge can be given to anybody and subsequently if the

given to anybody and subsequently if the company wants to build somebody for the

company wants to build somebody for the long term then the talent pipeline comes

long term then the talent pipeline comes into play otherwise it goes to the

into play otherwise it goes to the outside hiring yeah recently KB joining

outside hiring yeah recently KB joining time is 3 months as the needs to be

time is 3 months as the needs to be given the Advan notice to the existing

given the Advan notice to the existing company when need to intimate the stock

company when need to intimate the stock when we need to intimate the stock

when we need to intimate the stock exchange of the C appointment data isue

exchange of the C appointment data isue of the appointment letter or the date of

of the appointment letter or the date of joining so mostly companies are

joining so mostly companies are informing at the time of joining till

informing at the time of joining till then uh that will be upsi that

then uh that will be upsi that information will be upsi because any

information will be upsi because any time before resignation things can turn

time before resignation things can turn around and the person may not leave or

around and the person may not leave or may not

may not join if the empty of the subsidary

join if the empty of the subsidary company is appointed by holding company

company is appointed by holding company then po that is place of effective

then po that is place of effective management uh will be attracted and the

management uh will be attracted and the tax guys will be come running yeah that

tax guys will be come running yeah that depends whether subsidiary is in India

depends whether subsidiary is in India or overseas so it is very subjective to

or overseas so it is very subjective to that organization yeah very right yeah

that organization yeah very right yeah go ahead

go ahead AA yes so the powers of the RMC is to

AA yes so the powers of the RMC is to seek information from any employee of

seek information from any employee of the entity obtain outside legal or other

the entity obtain outside legal or other professional advice and secure

professional advice and secure attendance of Outsiders with relevant

attendance of Outsiders with relevant expertise if it considers necessary

expertise if it considers necessary since RNC has an important function to

since RNC has an important function to AO the risk that may be faced by The

AO the risk that may be faced by The Entity then it is possible that they may

Entity then it is possible that they may require outside help so that the risk is

require outside help so that the risk is minimized and

mitigated Part D of schedule two of LOD provides for the role of the risk

provides for the role of the risk management

management committee so the important role of the

committee so the important role of the risk management committee is to

risk management committee is to formulate the risk management policy

formulate the risk management policy which shall include a proper framework

which shall include a proper framework where the any internal and external risk

where the any internal and external risk that may be faced by an organization to

that may be faced by an organization to a particular industry which it may

a particular industry which it may belong to is properly identified and

belong to is properly identified and accordingly taken care of it also

accordingly taken care of it also devises measures for mitigation of risk

devises measures for mitigation of risk or minimization of Risk by placing by

or minimization of Risk by placing by putting in place proper processes and

putting in place proper processes and systems of internal control it also

systems of internal control it also takes into consideration the business

takes into consideration the business continuity plan so as if the company is

continuity plan so as if the company is uh is having presence in internationally

uh is having presence in internationally then there are many

then there are many situations for example a war like

situations for example a war like situation which is going on at present

situation which is going on at present which may threaten the existence of its

which may threaten the existence of its business so in that situation the RMC

business so in that situation the RMC and the risk management policy plays an

and the risk management policy plays an important role to ensure that the

important role to ensure that the business of the company is not affected

adversely the role of the risk management committee is also to ensure

management committee is also to ensure the appropriate method processes and

the appropriate method processes and systems are in place to Monitor and

systems are in place to Monitor and evaluate the risk it also monitors and

evaluate the risk it also monitors and oversees the implementation of the risk

oversees the implementation of the risk management policy including evaluating

management policy including evaluating the adequacy of the system it reviews

the adequacy of the system it reviews the risk management policy and it shall

the risk management policy and it shall be done at least once in two years so

be done at least once in two years so though it the regulation provides for

though it the regulation provides for once in two years many times the review

once in two years many times the review of the policy may be required so to put

of the policy may be required so to put into place new measures and new

into place new measures and new framework for identification of

framework for identification of risk to keep the board of director

risk to keep the board of director informed about the nature and content of

informed about the nature and content of his discussions and recommendations and

his discussions and recommendations and actions to be

actions to be taken another important role is the

taken another important role is the appointment removal in terms of

appointment removal in terms of remuneration of Chief risk officer and

remuneration of Chief risk officer and it shall be reviewed by the risk

it shall be reviewed by the risk management committee so even appointment

management committee so even appointment of uh Chief risk officer plays an

of uh Chief risk officer plays an important

important role the risk management committee shall

role the risk management committee shall also coordinate its activities with

also coordinate its activities with other committees wherever there is an

other committees wherever there is an overlap of activities so the the

overlap of activities so the the decision making of RNC if it pertains to

decision making of RNC if it pertains to the any decisions of the audit committee

the any decisions of the audit committee or NRC then it shall coordinate

or NRC then it shall coordinate accordingly and submit its report to the

accordingly and submit its report to the board along with the other committee

board along with the other committee with which its function is

overlapping somebody is putting a question what is a risk profiting and

question what is a risk profiting and how it is

done can ask them to uh unmute and explain yeah Rahul are you

explain yeah Rahul are you there can you speak rul can you unmute

there can you speak rul can you unmute on

top oh sorry he's correting not risk profiting risk

profiting risk profiling Rahul can we hear from you can

profiling Rahul can we hear from you can you

you talk please unmute and talk us talk to

talk please unmute and talk us talk to us

maybe sir he is refering to uh what all risk uh risk profiling may be the

risk uh risk profiling may be the identification of risk what all risk are

identification of risk what all risk are there with the company uh profiling them

there with the company uh profiling them on the basis of medium low and high and

on the basis of medium low and high and how to mitigate it this is what I

how to mitigate it this is what I understand from this

understand from this question I don't know because he has

question I don't know because he has actually

actually put yeah it maybe s geopolitical risk it

put yeah it maybe s geopolitical risk it may be the uh business risk marketing

may be the uh business risk marketing risk so maybe the profiling he saying

risk so maybe the profiling he saying maybe of that way but I'm not sure this

maybe of that way but I'm not sure this is what he is asking

is what he is asking for it seems like yeah him seems like

for it seems like yeah him seems like he's asking for a risk register what

he's asking for a risk register what profiling means a register it seems yeah

profiling means a register it seems yeah and there is one more question sir can

and there is one more question sir can another view be taken while calculating

another view be taken while calculating 180 days Gap suppose if the meeting has

180 days Gap suppose if the meeting has happened in March can we have another

happened in March can we have another meeting in November so I don't think so

meeting in November so I don't think so because 180 days Gap need to be seen

because 180 days Gap need to be seen it's two meetings in a year days Gap

it's two meetings in a year days Gap also need to be seen so in this case no

also need to be seen so in this case no won't work I think when you talk about

won't work I think when you talk about 180 days Gap means it is two successive

180 days Gap means it is two successive meeting that is what I think yeah so it

meeting that is what I think yeah so it won't work you're right actually yeah go

won't work you're right actually yeah go ahead

AA section 134 3n of the companies act provides proper disclosures in the

provides proper disclosures in the board's report whereby the management

board's report whereby the management needs to disclose a statement indicating

needs to disclose a statement indicating development and implementation of risk

development and implementation of risk management policy including

management policy including identification of elements of risk which

identification of elements of risk which in the opinion of the board May threaten

in the opinion of the board May threaten the existence of the company so s year

the existence of the company so s year the RMC needs to develop a proper

the RMC needs to develop a proper statement and accordingly help the board

statement and accordingly help the board uh to properly intimate the shareholders

uh to properly intimate the shareholders of the

company schedule five of SE lodr regulation also provides proper

regulation also provides proper disclosures to be made in the annual

disclosures to be made in the annual report of a company whereby audit in

report of a company whereby audit in respect of all the four committees so uh

respect of all the four committees so uh description of the terms of reference of

description of the terms of reference of each of the Committees along with their

each of the Committees along with their composition name of the members and the

composition name of the members and the chairperson further how many meetings of

chairperson further how many meetings of the audit committee NRC SRC and RNC has

the audit committee NRC SRC and RNC has been done during the year and

been done during the year and accordingly all these entire information

accordingly all these entire information is required to be submitted to the

is required to be submitted to the shareholders so even they are aware of

shareholders so even they are aware of how the decision making process is being

how the decision making process is being done at the

organization uh in particular for SRC committee uh the details pertaining to

committee uh the details pertaining to the number of shareholders complaint

the number of shareholders complaint received during the financial year along

received during the financial year along with the complaints which have not been

with the complaints which have not been solved at the end of the year are also

solved at the end of the year are also required to be disclosed in the annual

report the secretarial standards one on the meetings of the board of directors

the meetings of the board of directors are also applicable to the meetings of

are also applicable to the meetings of the audit committee NRC and SRC

the audit committee NRC and SRC committees as these committees are Mily

committees as these committees are Mily required to be constituted by the board

required to be constituted by the board of the listed entity so secretarial

of the listed entity so secretarial standards one needs to be followed with

standards one needs to be followed with respect to uh sending of notices agenda

respect to uh sending of notices agenda notes to agenda along with the draft

notes to agenda along with the draft minutes and sign minutes of the

minutes and sign minutes of the committee meetings also so company

committee meetings also so company secretary has to take care that all

secretary has to take care that all these secretarial standards are being

these secretarial standards are being followed not only for the board meetings

followed not only for the board meetings but also for the all the three committee

but also for the all the three committee meetings further it should also be noted

meetings further it should also be noted that though these the secretary

that though these the secretary standards are followed for these

standards are followed for these committees uh any there are number of

committees uh any there are number of committees which are voluntarily formed

committees which are voluntarily formed by a listed entity and as a good

by a listed entity and as a good governance practice ss1 shall be

governance practice ss1 shall be followed also in respect of those

followed also in respect of those committees though it is not mandated by

committees though it is not mandated by the

law yes excellent ailia you are given a very

yes excellent ailia you are given a very very wonderful presentations in a very

very wonderful presentations in a very very Caple form putting everything

very Caple form putting everything together and nicely and your flow of

together and nicely and your flow of language also very good my appreciation

language also very good my appreciation to you as for as the question is

to you as for as the question is concerned let me see I don't think there

concerned let me see I don't think there is any question there except the last

is any question there except the last one when we are talking about the

one when we are talking about the profiling that person did not know

profiling that person did not know actually I don't think any other

actually I don't think any other questions are left out in the chat box I

questions are left out in the chat box I think we answered all the queries still

think we answered all the queries still if the participants have queries they

if the participants have queries they can still

can still answer that that is one thing there are

answer that that is one thing there are a lot of appreciations are actually

a lot of appreciations are actually coming for this program everybody

coming for this program everybody thanking for conducting the good program

thanking for conducting the good program ET other and is

sonali thank you very much first of all to all of you very interactive session

to all of you very interactive session and it's actually a good platform of MAA

and it's actually a good platform of MAA and mea to discuss informally this is

and mea to discuss informally this is the right word I would like to put

the right word I would like to put because webinars are generally a set

because webinars are generally a set webinar set pattern so good initiative

webinar set pattern so good initiative uh by the firm and uh also I would uh

uh by the firm and uh also I would uh like to thank himma Alia Mr balakrishna

like to thank himma Alia Mr balakrishna and Mr mea everyone for their immense

and Mr mea everyone for their immense contribution and to the uh entire

contribution and to the uh entire audience here today you have been a good

audience here today you have been a good audience yeah in fact at this time also

audience yeah in fact at this time also we can see over 100 people are present

we can see over 100 people are present normally in any webinar in the end of

normally in any webinar in the end of the session when it comes the figure

the session when it comes the figure reduced to the minimum which is is not

reduced to the minimum which is is not the case here that show the importance

the case here that show the importance of this particular topic and not only

of this particular topic and not only that it is important the sharing of the

that it is important the sharing of the knowledge with the expertise people like

knowledge with the expertise people like you who are in the

you who are in the field I think I take the opportunity of

field I think I take the opportunity of thanking you all the panelist and

thanking you all the panelist and especially to MAA for organizing this

especially to MAA for organizing this programul MAA and really it was a very

programul MAA and really it was a very very educative session to all of us and

very educative session to all of us and very interactive sessions and we could

very interactive sessions and we could complete in timely and of course my

complete in timely and of course my special thanks to AIA for the very good

special thanks to AIA for the very good presentation she has actually made

presentation she has actually made putting the things together and one more

putting the things together and one more thing I would also like to mention at

thing I would also like to mention at this particular time here it is not only

this particular time here it is not only the El are coming into the picture even

the El are coming into the picture even The Regulators they are also going into

The Regulators they are also going into the various non-c compliances issue

the various non-c compliances issue across the country Let It Be R Bangalore

across the country Let It Be R Bangalore R Bombay r ahmadabad r Delhi they are

R Bombay r ahmadabad r Delhi they are looking at about the non- compliances if

looking at about the non- compliances if the audit committee or nomination ration

the audit committee or nomination ration committee is not constituted for a

committee is not constituted for a period Etc nothing they are taking

period Etc nothing they are taking company secretaries are invariably kill

company secretaries are invariably kill as a compliance officer the penalties

as a compliance officer the penalties Levy to the company secures that two

Levy to the company secures that two also very heptic penalties which is

also very heptic penalties which is actually levied on the levy of the

actually levied on the levy of the penalty happens it has to be paid from

penalty happens it has to be paid from the own pocket no company is going to

the own pocket no company is going to reimburse please keep that in mind so

reimburse please keep that in mind so secrety has got a very responsible role

secrety has got a very responsible role to play ensuring the compliances

to play ensuring the compliances absolutely and a actually brought out

absolutely and a actually brought out the SS one secretarial standard ss1 SS2

the SS one secretarial standard ss1 SS2 secret standard coupled with the ss1 and

secret standard coupled with the ss1 and SS2 there is a ex exemplary guidance

SS2 there is a ex exemplary guidance note has been issued by the Institute

note has been issued by the Institute which I think everybody should go

which I think everybody should go through it which gives the right

through it which gives the right examples and other things and all giving

examples and other things and all giving the things which will be very useful to

the things which will be very useful to all of us I think we'll keep meeting in

all of us I think we'll keep meeting in the sessions and enlighting your last

the sessions and enlighting your last words

words that's as usual know thank you all

that's as usual know thank you all panelist you know particularly sonani in

panelist you know particularly sonani in a very short term know she immediately

a very short term know she immediately accepted thank you once again and of

accepted thank you once again and of course him for your wonderful you know

course him for your wonderful you know suggestions and all so thank you all you

suggestions and all so thank you all you know balaj you're always you know we are

know balaj you're always you know we are our own person so uh you know he's also

our own person so uh you know he's also very passionately you know takes any

very passionately you know takes any topic you know you discuss any topic he

topic you know you discuss any topic he has those you know background and

has those you know background and knowledge and you know so thank you very

knowledge and you know so thank you very much sir and alifia for thank you for

much sir and alifia for thank you for the wonderful presentation sir and yeah

the wonderful presentation sir and yeah I'll bother you again

I'll bother you again because I mean you know anytime you are

because I mean you know anytime you are my last res any but otherwise also you

my last res any but otherwise also you are always there to support meta so

are always there to support meta so thank youma once again and probably we

thank youma once again and probably we are going to have another part also for

are going to have another part also for Alia what is the part four now we are

Alia what is the part four now we are going to take it up next satday sir it

going to take it up next satday sir it is about the audit audit okay again okay

is about the audit audit okay again okay so that's going to be more 24 regulation

so that's going to be more 24 regulation ready4 so thank you once again thank you

ready4 so thank you once again thank you Mr Bala thank you himma thank you sonali

Mr Bala thank you himma thank you sonali thanks so much you know for your uh

thanks so much you know for your uh sharing your knowledge and this is the

sharing your knowledge and this is the platform where you know we we ask people

platform where you know we we ask people to share their knowledge thank you thank

to share their knowledge thank you thank you thank you everyone thank thanks a

you thank you everyone thank thanks a lot to one and all have a good weekend

lot to one and all have a good weekend thank

thank you session bye thank you

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