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With the changing global and Indian economic
scenario within which India’s corporate sector is
confronted with the challenge of sustained growth, the
Ministry of Corporate Affairs has put in place a
number of legislative, regulatory, service-delivery and
capacity-building initiatives to enable the Indian
corporate sector explore newer and wider horizons. The
result of these initiatives can be gauged by the swiftness
with which the Ministry handled the Satyam scam.
Enabling legislative and administrative frameworks to
undertake such regulatory interventions, the speed of
decision making and the thought process that the
Satyam crisis should not be allowed to undermine the
interests of innocent stakeholders, clearly demonstrate
the impact of the numerous initiatives of this Ministry.
The journey of the Ministry to reinvent itself
commenced against the historical backdrop of the
Department of Company Affairs, attached to different
Ministries from time to time, becoming an independent
Ministry in 2004. As the new Ministry went about
defining its role in the overall economic and social
growth story of India, the need for a clear vision
emerged. In 2007, the Ministry adopted a new name,
“Ministry of Corporate Affairs”, along with a new
vision. This journey saw a series of new initiatives like
MCA-21 e-Governance project, Limited Liability
Partnership Law, establishment and operationalisation
of the Competition Commission of India, amending
the Acts governing Professionals’ Institutes (Chartered
Accountants, Company Secretaries and Cost and Works
Accountants), establishment of Indian Institute of
Corporate Affairs, notification of Accounting Standards
and comprehensive revision of the Companies Act,
1956. So, here is a Ministry that manages the corporate
affairs of India with dynamism and foresight, in a spirit
of partnership. ANURAG GOEL, Secretary, Ministry
of Corporate Affairs, talks to SAMAR JEET about how
the Ministry has reinvented itself
MINISTRY OF CORPORATE AFFAIRS
Reinventing a Ministry
The Satyam scam has thrown several questions and
has brought the role of the Ministry of Corporate
Affairs in the limelight. Your first reactions?
What happened in Satyam was an unfortunate aberration.
On January 7, 2009, Ramalinga Raju, the then
Chairman of Satyam Computer Services Limited, made
a statement about there being gross irregularities and
manipulations in the accounts of Satyam, along with
falsification of its financial statements for many years.
The amount involved was stated to be more than
Rs 7,000 crore. The Government reacted at a very swift
pace and in a decisive manner. We immediately instituted
an inquiry/investigation into the irregularities, falsification
and the apparent fraud, to identify and punish
the guilty as per law. At the same time, we initiated steps
to ensure that the employees, customers and shareholders
do not suffer.
What action did you take to protect the interests of
the employees, customers and other stakeholders?
We decided that the erstwhile Board of Satyam needed
to be replaced with a new one comprising eminent and
globally renowned individuals from diverse disciplines.
PHOTO: PRADEEP GAUR
We got the necessary order from the
Company Law Board on January 9, 2009 and
the new Board was constituted two days
later. Kiran Karnik, former president of
NASSCOM, has been nominated as the
Chairman, and the members include some of
the renowned professionals from different
fields. The Board has worked very closely with
the customers, employees, financial institutions
and other stakeholders to ensure continuity
of operations and prepare a roadmap for
the future. We were clear from the outset that
we needed to do everything possible to ensure
that Satyam did not go the Enron way. With
the leadership provided by the new Board,
commitment of the employees and the support
of the customers, Satyam is still functioning,
rendering top-quality service and will survive
and prosper.
And the reasons for success so far?
Three factors I would say, namely, the immediate
and effective response of the Government,
within the statutory framework, under
the stewardship of the Minister for Corporate
affairs, Prem Chand Gupta; the quality, commitment
and swift action of the Board
Members who have put in unprecedented
levels of personal effort; and the dedication
and untiring work of the Satyam team.
Do you think Satyam will recover from this
scam?
I have no doubt that, like the Phoenix, the
company will rise and surpass its past glory.
The quality, will and the determination of the
employees, customers, shareholders, the new
Board and the Government shall make this
happen. The strategy is to stay focused. A clear
roadmap is in place. In the process of achieving
this goal, we hope to create a new global
model for Government-Corporate-Stakeholder
partnerships for managing the aftermath
of such scams. The commitment and
contribution of the key players and partnerships
will, indeed, become a subject of reference
for many future cases.
When and why was the Ministry of
Corporate Affairs set up? What were your
first steps?
It is the story of the Ministry reinventing
itself. The Department of Company Affairs
has been in existence for decades under several
ministries like the Ministry of Industry, the
Ministry of Law and Justice and the Ministry
of Finance. It became an independent
Ministry in 2004. The formation of the
Ministry was itself in recognition of the fact
that the fast changing business environment
requires more intensive and focussed attention
in terms of the basic corporate law, framework
and related services/activities. Once we started,
our first priority was to provide the right
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‘
On day one itself, the Ministry recognised
the need to clearly distinguish between the
willful wrongdoers and the bonafide
employees, to punish the former and
protect the latter. The Ministry also realised
the nature and extent of the crisis and that
it needed a swift response. A multi-pronged
strategy was formulated and decisive action
followed.
Jan 7, 2009, 9.45 am B Ramalinga Raju
e-mails his resignation to SEBI admitting to
financial irregularities.
Jan 7, 2009, 11.22 am The SEBI forwards
e-mail to the Ministry.
Jan 7, 2009 The Ministry asks ICAI and ICSI
to enquire into the role of auditors and
Company Secretaries for prompt regulatory/
punitive action.
Jan 8, 2009 (holiday) The Registrar of
Companies obtains court’s orders and seizes
records of Satyam.
Jan 8, 2009 (holiday) The Ministry drafts a
petition to be filed before the Company
Law Board (CLB).
Jan 9, 2009 The Ministry files the petition
and the same evening obtains order of the
CLB to supersede the Board of Satyam and
to appoint directors.
Jan 9, 2009 State police arrests B Ramalinga
Raju, Chairman of Satyam and B Rama Raju,
MD of Satyam
Jan 11, 2009 The Ministry constitutes a new
three-member board comprising Deepak
Parekh, Chairman, HDFC, C Achuthan, Ex-
Member, SEBI and Kiran Karnik, past
President of NASSCOM.
Jan 12, 2009 The new Board holds its first
meeting, followed by regular subsequent
meetings in quick succession.
Jan 13, 2009 The Ministry hands over the
case to its Serious Fraud Investigation Office
(SFIO) a specialised agency created for
investigating complex corporate
frauds.
Jan 15, 2009 The Ministry appoints three
more members, Tarun Das, Chief Mentor of
CII, TN Manoharan, past President of ICAI
and Surya Kant Balkishan Mainak of LIC to
the Board.
Jan 19, 2009 The Ministry orders SFIO probe
in two related companies, i.e., Maytas Infra
Ltd. and Maytas Properties Ltd.
Jan 24, 2009 State police arrests T Srinivas
and S Gopalkrishnan, of Pricewaterhouse,
Bangalore, the statutory auditors of Satyam
Jan 29, 2009 The Ministry obtains orders
from CLB restraining the promoters from
alienating their properties.
Feb 6, 2009 The Ministry extends SFIO probe
to 325 companies uncovered by SFIO in their
investigation.
Feb 16, 2009 Investigation into the criminal
aspects of the case entrusted to the Central
Bureau of Investigation (CBI).
Feb 19, 2009 CLB orders obtained allowing
increase in authorised capital and bringing
in a strategic investor, to facilitate long-term
restructuring and operations of the
company.
The Satyam Crisis: Anatomy of
Ministry of Corporate Affairs’ Regulatory Response
We were clear from the outset
that we needed to do
everything possible to ensure
that Satyam does not go the
Enron way. Satyam is still
functioning, rendering
top-quality service and will
survive and prosper
’
To be a Leader and Partner in initiatives for Corporate Reforms,
Good Governance and Enlightened Regulation, with a view to
promote and facilitate effective corporate functioning and
Investor protection —Vision statement
legal framework for the functioning of companies.
We looked at the Companies Act,
1956, the mother Act that governs the incorporation
and functioning of companies. It is
the biggest single Act in the country in terms
of its size and has undergone 25 amendments
so far. Keeping the need to bring the Act in
tune with the emerging business environment,
the JJ Irani Committee was set up in
August, 2004, to come out with a new revised
version of the Act. The committee submitted
its report after going through a wide consultative
process. The Bill was thereafter introduced
in the Lok Sabha in December, 2008.
How has the journey been so far?
The journey so far has been extremely satisfying.
In fact, I believe that as a Ministry we
have been able to achieve a lot at an exceptional
pace, under the visionary leadership of
the Minister. We have been able to reinvent
the Ministry with, what in my opinion, is a
more generic model for governance.
What kind of governance initiatives have
you taken up?
There are many ways of looking at governance
issues and many models are available. What
we have used is a concept in which we see our
role in three major parts. First, the Ministry
needs to provide an efficient corporate law
structure for incorporation and functioning of
companies and other corporate entities along
with appropriate policy framework and prescripttions.
Second, we need to build appropriate
institutions, delivery mechanisms and
systems for regulation, enforcement and service
delivery. Third, we need to build the people
working in the system to be able to regulate
and serve effectively. In brief, we see our
role as that of building laws, institutions and
people. Even more importantly, while doing
so, we must be extremely sensitive and
focussed on the needs and aspirations of the
entities and persons who are to benefit from
our efforts.
You talked of reinventing the Ministry.
How has this been done?
As I mentioned earlier, in 2004, we started
looking at the corporate laws in the context of
modern business environment and requirements.
In March 2006, we amended the Acts
governing the professionals — Chartered
Accountants, Company Secretaries and Cost
and Works Accountants. These professionals
provide the backbone for the corporate governance
of any company. The amendments
helped create an internal structure in the three
institutes, making the professionals more
accountable. Accounting standards were notified
in December, 2006. The Limited Liability
Partnership Act, 2008, has been enacted.
Building institutions have also been taken
up. The Competition Commission of India
(CCI) is being established and operationalised
to ensure smooth free and fair competition in
the functioning of the business sector. We
have also established the National Foundation
for Corporate Governance (NFCG) as an
apex national body to promote good and
responsible corporate governance practices.
The Investor Education and Protection Fund
(IEPF) has been established to promote
investor awareness. This was further followed
by creating and setting up the Indian Institute
of Corporate Affairs (IICA) which would act
as a think-tank, action research, service delivery
and capacity-building institute to serve the
Ministry, corporates and all other stakeholders
in a one-stop-shop mode.
Simultaneously, we have tried to upscale
the capacity of our officials, professionals and
so on through a series of HR initiatives. The
erstwhile Indian Company Law Service has
been rebuilt and renamed as the Indian
Corporate Law Service. Action has been taken
for empowering investors, building stakeholders’
capacity and catalysing entrepreneurs/
innovators.
The Ministry had introduced the concept
of LLP. What is the progress on that front?
The LLP is a corporate structure that is available
in many other countries. You see we have
the company structure that provides limited
liability but comes with a relatively complex
framework of compliances because of the
public interest factor. Another form is the
partnership, which does not entail compliance
requirements like filing of annual returns or
balance sheet. The corporate governance and
management aspect is not regulated either, so
you govern yourself. What was missing in
India was a structure that allowed flexibility of
partnerships with a limited liability aspect. We
started towards creating this new structure
and it received the President’s assent on
January 7, 2009. This new corporate structure
is available as a result of “building law” efforts
of the Ministry and is expected to be operationalised
by April, 2009.
Regulating more than 800,000 companies
must be a huge effort for the Ministry?
I would like to divide that into two parts.
First, we have struck off about 1,40,000 companies
which are dormant and it’s a continuing
exercise. The second part has been to put
in place efficient reporting, monitoring, feedback
and evaluation systems to ensure effective
regulation and focus on companies that
involve a higher level of public interest. And,
of course, MCA-21 has helped tremendously.
MCA 21 e-Governance project has been
one of the most remarkable achievements of
the Ministry that has revolutionised the
Government-to-Business transactions. This
e-governance effort has also received
international recognition as being a pathbreaking
initiative. What do you think is
the single most important achievement of
the MCA 21 project and how do you see it
shaping up for future requirements?
MCA 21 has indeed brought about a revolution
in the way the Ministry transacts its business
and extends the services to its clients. In
one stroke, the entire business process of the
office of Registrar of Companies, which
included incorporation of companies, filing of
various compliances under the Companies
Act have been made available through a
secured online system. This has substantially
reduced the compliance cost as well as the
compliance effort. The most striking feature
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In the process of achieving this
goal,we hope to create a new
global model for
Government-corporatestakeholder
partnerships for
managing the aftermath of
such scams
We have been able to reinvent
the Ministry with a more
generic model for governance
of MCA 21 is the in-built scalability to add
more and more G-to-B services on the same
platform. The Ministry is already working fast
towards the Next Generation MCA 21 which
will expand the scope of G-to-B services and
also create enriched corporate databases for
various users.
The Ministry regulates the functioning of
Chartered Accounts, Company Secretaries
and Cost and Work Accountants. How do
Accounting Technicians, the new category
of professionals introduced by the MCA, fit
into this scenario?
Accounting Technicians are being developed
as an intermediate stage for final professional
qualifications of CAs and Cost and Work
Accountants. The former would meet a strong
felt need for accounting professionals required
by a huge number of small and medium
enterprises. Even the corporates require people
with basic financial and accounting skills
below the level of Chartered Accountants and
Costs and Works Accountants, and can use
the services of Accounting Technicians. It will
provide employment to a large number of
educated young people, make them professionally
qualified and improve the compliance
management under various statutes.
Does the Ministry have the human
resources to meet the new global challenges?
What is the Indian Institute of Corporate
Affairs (IICA) supposed to achieve?
We have the Registrars of Companies (RoC)
and the Official Liquidators (OLs). We
realised that unless these institutions and people
are reorganised, a transformation in quality
and outcomes would not be possible. We
started working towards it, and with our
MCA 21 programme, we have revolutionised
the way RoC functions. We have started computerisation
of records of Official Liquidators
offices. Our next step would be to go for
e-Governance in the Official Liquidator’s
offices. We also felt a need to create an institutional
structure to be a quality think-tank,
MARCH 2009 / NAMASKAAR / 97
Indian Institute of Corporate Affairs
“An institute, created with a unique structure to function as a think-tank, action-research and capacity-building support
to the Ministry and other stakeholders, providing thought leadership to help business of today and shape tomorrows”
With the corporate sector
expanding in size as well as its
reach in the global arena,
corporate governance has become a focus
area for the Government. The Ministry of
Corporate Affairs is endeavouring to create
enabling legislative/regulatory/servicedelivery
frameworks which are at par with
the global competitive business
environment to help effective corporate
functioning and investor protection.
This requires an institutional system
that enables a continuous understanding of
the business environment and expectations
of the stakeholders with an ongoing action
research. With this in mind, the Ministry has
set up an Indian Institute of Corporate
Affairs, a new institution with a mandate to
help the business of today and shape
tomorrow’s. In the ever changing world of
business, yesterday’s regulations and
policies cannot drive tomorrow’s growth.
IICA, a research-based think-tank and
capacity building centre, has been
established to proactively assist the Ministry
in designing Legislative/Regulatory/Service
delivery frameworks for the corporate
sector and assist other stakeholders in
entrepreneurship development,
IICA is conceptually unique. It will takeup/
treat holistically all issues/disciplines
which impact on corporate effectiveness
and functioning. It is the first institution
being set up to be formally the ‘think-tank’
for a major Ministry of the Government.
Symbiotic partnerships with corporates,
professionals and world class universities/
institutions/experts will be built into its
DNA. Knowledge creation and knowledge
management are key components of its
strategy for excellence. Inclusive growth
issues would receive focussed attention
through Corporate Social Responsibility
initiatives. Capacity building, Organisational
Development (OD) and innovation, both in
government and the corporate sector
would lay the foundation for effective
interventions. Global knowledge will be
applied for finding local solutions. Latest
pedagogy and learning models would be
drawn upon, including distance education,
e-learning and self learning.
A state-of-the-art and IT-enabled
Knowledge Management (KM) system will
synergise the initiatives and capabilities of
the five centres within IICA, as also with its
partners. It will provide a two-way window
between India and the world on the
corporate landscape, developments,
performance, potential and data.
Knowledge creation would include large
scale action research on actual ground level
issues/problems, for finding real-time
solutions and capitalising on immense
opportunities thrown up by environmental/
energy/technological challenges. The KM
system will also disseminate
knowledge/information/data to all
stakeholders whenever and wherever they
need it, in an easy to understand and use
format. The institute will plan it’s
priorities/activities on the basis of
alternative visions of the likely future
world/national economic scenario, and
work with Government, corporates,
professionals etc to proactively set in place
appropriate legal framework, policy
prescripttions, institutional structures and
delivery systems for optimising economic
growth and productivity.
A number of institutions in India and
abroad, as also captains of Indian industry,
have indicated interest/support for the
institution. Partnership with IIT, Kharagpur,
George Washington University (Law
School), Washington DC, USA and the Evian
Group IMD, Lausanne, Switzerland are
already in advanced stages of finalisation.
Distinguished President/Deans/Professors
from Carnegie Mellon University, Kellogg
School of Management, Yale University etc.
have also evinced interest, in addition to
institutions like IIM, Bangalore and other
international/multi-lateral
organisations/institutions. The institute
would encompass provisions for schools and
centres dedicated to various aspects of
corporate affairs and capacity-building
functions.
Name of Schools:
n School of Corporate Laws
n School of Finance
n School of Corporate Governance
n School of Business Environment
n School of Competition Law
Name of Centres:
n ICLS Academy
n Innovation Centre
n Centre for E-governance
n Corporate Governance Centre
n Partnership Centre
‘Develop and establish a new discipline called “Corporate Affairs”
for holistic treatment and coverage of all subjects involved in, or
impacting on, corporate functioning, e.g. management, economics,
finance, taxation, accountancy, law, regulation, compliance
management, global business scenario, emerging
technologies, energy, environment, ethical corporate
governance, corporate social responsibility, inclusive growth,
sustainable development’—IICA
which also has the ability to deliver. We started
the process of setting up the Indian
Institute of Corporate Affairs (IICA), which
has now been registered and is functional. In
terms of concept, design and functioning, it is
unique. The IICA has partnerships with IIT
Kharagpur, the George Washington
University (Law School), Washington DC,
USA and the Evian Group IMD, Lausanne,
Switzerland and the Carnegie Mellon
University, USA. On the corporate side, we
have a partnership with Intel. These initiatives
incorporate the vision of building institutions
and people aspect of MCA.
How has the Ministry upgraded its own
human resource?
We started with changing the way people were
recruited under the Indian Company Law
Service to which the RoCs and OLs belong.
After changing the name to Indian Corporate
Law Service (ICLS), we have got it incorporated
as an allied service in the Civil Services
Examination conducted by the UPSC. Our
effort is to ensure that those who clear the
ICLS develop a common identity of their
own and capacity to play a larger role. In addition,
we are upgrading offices which will now
be called Corporate Bhavans, and will have
the office of RoC, Official Liquidator and
National Company Law Tribunal (NCLT), all
in a single integrated modern office complex.
The Serious Fraud Investigation Office
(SFIO) is investigating the Satyam fraud.
Does it have the required manpower to deal
with cases of corporate frauds of this
magnitude?
SFIO is a multi-disciplinary body with
experts from IT, police, taxation, audit and
SEBI trained to investigate corporate fraud. A
committee has been set up to recommend
measures to make SFIO more effective. The
report will come in a month or two. After the
Satyam case surfaced, it was also felt that there
is an urgent need to strengthen the SFIO. At
the moment we have people on temporary
deputation. To strengthen it further, we have
created 58 more posts.
What about having a system of early
warnings and alerts for preventing
corporate frauds?
We certainly need the early warning system
and have been working in this direction. The
next generation MCA 21 system will have a
huge database regarding corporates and very
sophisticated analytical tools. Once the XBRL
system is introduced over the next few years,
we will evolve a system which will start ringing
the bell in cases of potential frauds much
earlier than it does now.
The corporate sector is the key driver for
economic growth in India. Don’t you think
that the Ministry can play a larger role
beyond regulation of companies and
contribute to economic growth?
Yes. In fact, we see corporates as a major vehicle
of economic growth and promoting/facilitating
effective corporate functioning is an
intrinsic part of our vision. Good corporate
governance practices are in the long-term
interest of the company as well as the
investors. I find that the concept of Corporate
Social Responsibility (CSR) has grown significantly
in the last two-three years and is
becoming almost synonymous with the
idea of inclusive growth, for which the
Government and corporates should partner.
Indeed, the Indian Institute of Corporate
Affairs would take this as one of its major
thrust areas.
What are the future challenges for the
Ministry?
This is an interesting question. We have
achieved so much in so little time but we all
feel that we have miles to go before we rest.
We have to concentrate on the new
Companies Bill and work towards its enactment
at an early date. We also need to go to
the next-generation MCA-21, that involves
the possible creation of a single Regulators-to-
Business portal and the use of Extensible
Business Reading Language (XBRL). These
will furnish a vast amount of information and
give advance warning against potential frauds
and scams. We are already working in this
direction. We need to focus on the small and
medium enterprises, identify opportunities in
the evolving business scenario and help them
to act quickly and capitalise on the early
mover advantage. We need to ensure convergence
with the International Financial
Reporting Standards (IFRS) by April, 2011.
And, of course, we need to carry on and build
on the initiatives undertaken so far.
Finally, how would you sum up the present
Ministry of Corporate Affairs?
I would say it is a Ministry with visionary
leadership and a great team, which has
reinvented itself and redefined the basic
framework for corporate functioning and
investor protection for the 21st century
business environment.
— For feedback email at agoel @ nic.in
98 / NAMASKAAR / MARCH 2009
Limited Liability Partnership Act
“The Ministry of Corporate Affairs enables entrepreneurs to segregate and protect personnel assets from business risks”
The Ministry of Corporate Affairs
has been listening to all the
stakeholders and entities involved
in fuelling the economic growth of
India and recognises the entrepreneurs
will be a key driving force of our
country.
Recognising the need for a new
corporate format and structure which
enables the entrepreneurs to de-risk their
personnel assets from business assets and
risks, a far reaching change has been
heralded by the Ministry of Corporate
Affairs by the introduction of Limited
Liability Partnerships (LLP) Act, which
enables:
n The professional expertise to organise
and provide a range of services to the
corporate sector in a comprehensive and
efficient manner.
n Partnerships to compete effectively in
the corporate environment and also create
a level playing field by doing away with
unlimited business liabilities and
introducing simple compliance procedures.
Apart from this, the Act also supports
existing companies. The existing
partnerships/private limited/ proprietorship
firms can easily transfer to an LLP and enjoy
the various provisions proposed under the
Act. As the notifications have already been
issued under the Act, any company that is
willing to form LLP can now register with
the Ministry of Corporate Affairs and enjoy
the fruits of this new initiative.
The LLP Act will enable entrepreneurs
who are limited in fully accessing the
market opportunities today to move to a
structure that will not over-engineer
them, yet will allow them a format which is
more amenable for maximising their
potential.
The concept of CSR has become
synonymous with the idea of
inclusive growth for which the
Government and corporates
should partner. The ICA would
take this as one of its major
thrust areas
Corporate governance practices
are in the long-term interest of
the company as well as the
investors
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The Indian economy has been growing
at a rapid pace. Noticeably, this
growth is being largely driven by the
corporate sector. Since the time when the
Companies Act, 1956, was formulated, a lot
has changed in the way the corporate sector
functions. The financial reform of 1991
created a strong globally interconnected
financial and capital market in India. The
Indian companies are raising funds in the
international market and the foreign investors
are investing in Indian securities. Good
financial results of the corporate sector
combined with a healthy outlook for the
future have brought about a boom in the
capital market till 2008. Unless the regulatory
agencies understand these changing patterns
on a continuing basis, regulatory initiatives
could become ineffective and even become
counter-productive to the nation’s interests.
Keeping the changing global economic
environment in mind and given the fact that
the corporate sector is the most important
driver of economic growth, the Government
converted the erstwhile Department of
Company Affairs to a Ministry so as to enable
a comprehensive treatment of the issues
concerning the corporate sector.
The basic challenge faced by the Ministry
was to integrate the role and function of a
large number of stakeholders and players in
the corporate arena so that together they
create an efficient, growing and buoyant India
INC. The initiatives of the Ministry enable
this integration by keeping the stakeholders
“clued” to the corporate affairs of the country.
This “staying clued” is achieved through
creating the right corporate structure,
facilitating the right investment decisions, a
true and fair disclosure regime, large-format
knowledge-management system, investor
protection mechanism, cutting-age institutional
framework and a vibrant human resource
base. The underlining objective of all these
initiatives is to provide new horizons for the
corporate sector to grow and flourish and to
enable all sections of the society to participate
and benefit from this growth process.
Stay clued
The MCA has started various schemes and offers to help a prospective investor and
guide those who have already invested in the market
The Ministry of Corporate Affairs has brought efficiency and
convenience of filing the various documents required by the Registrar
of Companies (RoC) through its flagship MCA 21, a revolutionary
initiative. It is a path-breaking effort which has removed the long hours
and difficult logistics of filing returns and brought a sigh of relief to the
corporate world.
MCA21 is an e-Governance project which provides easy, secure, online
services to stakeholders by an interactive and paperless process through
the Internet.
It is a multi-faceted tool with multiple features:
n Information Anytime anywhere online services with speed and
certainty to all stakeholders. All disclosed financial details of public limited
companies listed or unlisted are available on your screen right here, right
now!
n Guidance All that you need to know about rules, regulations, policies
and procedures on compliances and all that is required for incorporating
and running an enterprise.
n For all It also seeks to fulfil the requirements of various stakeholders,
companies, professionals, regulators, financial institutions and the public.
The MCA21 e-Governance project provides electronic filing, storage,
retrieval, viewing, processing and transmission of transactions and a
number of other services like incorporation of a company, filing of annual
and statutory returns, registration, modification and satisfaction of
charges.
MCA-21
“Ever wondered how to bring the
world of corporate affairs on your
fingertips? Whether you are an
investor making sure that your
investment decision is sound, a
vendor wanting to know whether
your client is credit worthy or an
employee looking for the financial
status of the company you are
about to join?”
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NAMASKAAR FOCUS FEATURE
The National Foundation for
Corporate Governance
With a view to support your business needs
and improve the standard of corporate governance,
the Ministry of Corporate Affairs
has set up the National Foundation of
Corporate Governance (NFCG) which
provides a platform to deliberate issues
relating to good corporate governance and
sensitise business leaders on its importance.
It enables:
Knowledge Dissemination Exchange
of experience and ideas among corporate
leaders, policy makers, regulators, law
enforcing agencies and non-government
organisations.
Capacity Building Provide research
and training, capacity-building, standard
setting, rating, recognition and related support
in the field of corporate governance.
Standard Rule Prepare a code of best
practices for corporate governance and to
provide advice, consultancy and technical
and managerial support to the stakeholders.
To accomplish its objectives, NFCG performs
the following functions:
n Creates awareness regarding benefits of
implementation of good corporate governance
practices.
n Encourages research capability.
n Provides key inputs for developing laws
and regulations.
n Liaisons with the various regulatory
authorities for proper implementation and
enforcement of various laws related to corporate
governance.
n Cultivates international linkages and
maintains the evolution towards convergence
with international standards.
n Setting up national centres for corporate
governance across the country to provide
quality training to directors and also to
provide quality research with the aim to
receive global recognition.
Accounting
Standards
Accounting and financial disclosures are no
longer the forte of chartered accountants and
company secretaries. Business accounting
reports are now the news report for the masses
and go beyond financial reporting. Accounts
are the window into the corporate world and
hence it is critical that the various figures speak
the same language and have no ambiguity in
interpretation.
India has seen a paradigm shift in its economic
environment during the last few years,
which has led to increasing attention towards
transparent financial reporting system for corporates.
To bring transparency and standardise
accounting structure with global standards,
the MCA has initiated reforms in the accounting
standards, thereby ensuring comparability
of financial statements of different enterprises
to provide meaningful information to various
users of financial statements. The ongoing
accounting standards reforms aim:
n To grant statutory status to the accounting
standards which so far had only an advisory
status.
n To standardise and rationalise accounting
methods with guidelines that enhances transparency
and align the business with international
norms.
n Harmonising the different accounting
policies and practices in use in a country.
n To reduce the accounting alternatives in
the preparation of financial statements within
the bounds of rationality.
n To enable comparability of information in
the financial statements for meaningful economic
decisions
n To progressively bring Indian standards in
conformity with international accounting
standards.
Recognising the need for an international
harmonisation for accounting standards, the
International Accounting Standard Committee
was established. It aims at harmonising
accounting standards worldwide. The new
accounting standards are prepared with a view
to describe the accounting principles and the
method of applying these in the preparation
and presentation of financial statements so
that they give a true and fair view.
Investor Education and
Protection Fund (IEPF)
As investors, do you feel confused at times?
Do you think you are better equipped to take
good investment decisions? Do you wish you
were more aware about your rights and
recourses? You have a friend and guide in the
MCA, who is the custodian of protecting the
rights of investors.
With a large population of investors, there
is an ambiguity among them about who
would be protecting their rights. Recognising
this as a high priority area, the MCA has constituted
the Investor Education and Protection
Fund (IEPF). The Fund had been established
under the Companies Act, 1956, for promotion
of investors’ awareness and protection of
their interests. IEPF plays the role of both a
coach and an umpire between the investor
and the corporate world. It educates and
enables investors on their rights against unfair
practices in corporate affairs. At the same time,
it provides an efficient investor grievance
redressal mechanism.
The IEPF aims at:
n Educating investors about market operations.
n Equipping investors to analyse information.
n Empowering investors by making them
aware of their rights and responsibilities under
various laws.
n Promoting research and investor surveys
to create knowledge amongst them.
n Creating awareness about market volatilities.
Major activities under IEPF:
n Educating and creating awareness among
investors through voluntary organisations and
associations registered under IEPF.
n Educating investors through electronic
media, advertising in the national and regional
newspapers on various grievance redressal
mechanism.
n Funding of research projects, conducting
training of trainers’ programmes. A website
www.watchoutinvestors.com has been launched
under IEFP, which covers information or
convictions by various regulatory bodies.
‘SME focus on innovation,
entrepreneurship and
employment generation’—
IICA
‘Action research, consultancy,
incubation, hand-holding and
problem-solving for
corporates and other
stakeholders’ —IICA
‘Global Collaboration Network
for Governance and Economic
Growth (GCNGEG), comprising
governments, corporates and
think-tanks for analytical
treatment and action on
governance and inclusive
growth’—IICA
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