Companies Act

The Companies Act, 2013 (Act), effective from 1 April 2014, brought a radical change in the area of corporate governance. It introduced stricter regime for unlisted public companies and severe consequences for non-compliance. The Ministry of Corporate Affairs (MCA) has been issuing various amendments and clarifications regarding the Act and the corresponding rules to remove practical challenges faced by companies while implementing certain provisions of the Act.

EY’s Companies Act consulting service is specifically designed to help the board and key stakeholders of the companies address their concerns around increased complexities. This provides a robust corporate governance framework and enables them to make continuous amendments.

It is a solution which helps companies in identifying key exposure areas and enables them to build an implementation roadmap to deal with necessary changes required.

EY’s consulting service on the Companies Act, 2013 aims to:

1. Increase a dialogue in the critical areas of corporate governance within the company, industry bodies, government and others.
2. Identify and support in tightening the legal and regulatory compliance requirements.
3. Implement a compliance management process for effective oversight.
4. Streamline internal control financial reporting process.

If your company has not yet addressed any of these matters, our team can help you adopt best practices for efficient conduct of the business:

• Do you have a framework to identify significant business risks and ways to mitigate them?
• Is there a periodic compliance reporting process to identify non-compliances?
• Do you have a record of all applicable laws and is it being updated regularly?
• Do you have a set up process for identification of significant financial controls?
• How do you ensure periodic operating effectiveness of these controls?
• Do you have a process for identification of related party transactions?
• Do you ensure that adequate approvals are obtained with respect to related party transactions?
• Does your current board structure and its role and responsibilities address expectations of the new governance?
• Do you have a CSR strategy in place?
• Are your current secretarial procedures and practices in accordance with requirements of new act and rules?

Our detailed methodology comprises of steps on how we can help

1. Understand current policies and practices of the company.
2. Diagnose and identify key exposure areas due to enactment of the Companies Act, 2013 and new rules and notifications introduced thereunder.
   
3. Develop an implementation roadmap for the company.
   
4. Set up a team of professionals that will project manage and guide you transition to the new regime across corporate and group companies.
   
5. Realign existing policies and procedures to meet enhanced governance requirements.
   
6. Set up processes and policies to ensure compliance of new legal and secretarial requirements, board structure and reporting, related party transactions, etc.
   
7. Design and implement risk management, internal control and statutory compliance frameworks.
   
8. Provide insights on enhanced disclosure requirements in Director’s Report, compulsory consolidation of accounts, shareholding pattern, etc.
   
9. Support in benchmarking to help define your policies, procedures and systems in areas like CSR.
   
10. Provide understanding on latest notifications/amendments/rules issued by the MCA for companies and assist in realigning existing policies and practices.