Student Company Secretary 1 February 2007

Training Orientation Programme

As per Company Secretaries Regulations, 1982 (amended
from time-to-time) every student apart from passing the final
examination of the Institute is also required to possess the
practical experience and undergo practical training or be
exempted therefrom before becoming eligible to the Associate
Membership of the Institute. Students who do not possess
practical experience are required to undergo compulsorily 15
months Management/Apprenticeship training.
Most of the students commencing training are not aware of
the significance and methodology of training, business
environment, corporate culture, communication and
behavioural aspects. Keeping in view the above factors, the
Council of the Institute has decided that students requiring to
undergo training should compulsorily attend five days Training
Orientation Programme (TOP) before they are sponsored for
training. It has also been decided that henceforth students
will be sponsored for training in the companies or with company
secretaries in practice as per the following schedule.

Activities Session1 Session 2 Session 3 Session - 4

Registration of students January 1 to March 01 to June 01 to September 01 to
for 15 months Training January 10 March 10 June 10 September 10
Organisation of TOP January 15 to March 15 to June 15 to September 15 to
January 24 March 24 June 24 September 24
Campus Interview January 25 to March 25 to June 25 to September 25 to
January 31 March 31 June 30 September 30
Commencement of February 01 April 01 July 01 October 01
Training Onwards Onwards Onwards Onwards
Completion of April 30* June 30* September 30* December 31*
Training Next Year Next Year Next Year Next Year
* If the student avails extra leave, the training will be extended accordingly.
Training Orientation Programme is a part of the 10. Usefulness of reading newspapers
Management/Apprenticeship training and is based on Guru 11. Self-assessment
Shishya Parampara. Training Orientation Programme will not SWOT analysis
only expose the students to the business environment and Career prospects
corporate functioning but would also help them in acquiring
Personality
the desired skill and confidence.
12. Writing of curriculum vitae
The Regional Councils will organize the Training Orientation
Programme from 15th to 24th of the four fixed months i.e. 13. Interview Techniques
January, March, June & September. 14. Career Planning
For effective interaction and participation, not more than 15. Computer-Internet/E-mail
40 students would be enrolled in each TOP. A fee of Rs. 400/ 16. File management
- per participant will be charged. 17. Organisation structure, role and functioning of Competition
The following topics will be included in the programme : Commission of India, CLB/NCLT, ROC, Stock Exchange,
SEBI, RBI, DRT
1. Importance of Training
18. Usefulness of Professional Development Programmes.
2. Personality Development- Dress Code & How to carry
oneself 19. Code of Conduct
20. Future Prospects
3. Time Management
For helping the students to identify Companies or Company
4. Meaning of Professionals
Secretaries in practice for undergoing training, the Regional
5. Office Culture Councils would also arrange Campus Interviews, immediately
6. Communication Skill on conclusion of each TOP for on-the-spot selection of
Writing ability candidates. Such Campus Interviews will be organized during
Drafting of letters the four fixed months from March 25 to 31; June 25 to 30;
Speaking ability September 25 to 30 and January 25 to 31.
All students intending to commence Management/
7. Group discussion, Drafting of Minutes, Notices,
Apprenticeship training are advised to contact the respective
Resolutions etc.
Regional Councils for enrolling themselves for TOP. Only on
8. How to qualify professional examination successful completion of TOP, students would be sponsored
9. Managing under crisis for training by the Institute.

Student Company Secretary 2 February 2007

 From The President

We must be silent before we can listen.

We must listen before we can learn.
We must learn before we can prepare.
We must prepare before we can serve.
We must serve before we can lead.
William Arthur Ward

Dear Students,
I feel extremely happy to address my maiden communication to you after taking over as the President
of this leading professional body of the country. I accept this honour with a great sense of humility,
mission and responsibility. I take this opportunity to place on record my sincere gratitude and
thanks to representatives on the Council and to all company secretaries for reposing trust and
confidence in me. I am proud to belong to a profession, which is highly sought after spreading its
wings beyond the national borders and thus contributing to the nations prominence in the world.
I feel especially gratified in talking to you who represent the future of the profession. It is an honour to communicate with the
younger generation fresh and pulsating with ideas, dreams, ambition and enthusiasm. No doubt, you have chosen to pursue a
profession that holds a great promise as a profession of the current century. I look upon you with great expectations that you
will persevere and perspire to realize our collective dream to make Company Secretaries profession, the profession of the
future.
Before sharing my thoughts and perceptions, I wish to state that I have succeeded very dynamic, energetic and visionary Past
Presidents, who toiled tirelessly day and night and provided unparalleled fame, recognition and visibility to our profession and
the Institute. During my tenure as President, it will be my endeavor to make further efforts to build up the profession so as to
achieve greater heights in the dynamic global environment with the active involvement of Regional Councils/Chapters and the
vibrant Secretariat of the Institute.
Friends, needless to mention that we are living in a technologically surcharged, integrated global environment where changes
are taking place very frequently. The situation is fluid and dynamic. In this global race, one of the golden rules for success for a
professional is to keep pace with the changing environment around him and at the same time gear himself up for future changes
and the resulting challenges. Experts say that the key to retaining competitive advantage lies in keeping focused on three basic
business principles: i) be customer-driven; ii) adapt quickly to the changing environment; and iii) anticipate change and act today
to meet tomorrows challenges. In this age of intensive competition, only dedicated and committed professionals having vision
and capability to lead, can help the organizations to maintain a competitive edge. This requires working relentlessly with firm
purpose and will as well as expanding the horizons of knowledge to gain expertise in the field and to have an in-depth perception
about the industry and societal requirements, thus paving the way to real prosperity and progress. Since you are going to be our
future professionals, you should imbibe these fundamental principles not only in your professional career but also while pursuing
the CS Course. It is no longer sufficient for us to be the best in the country, we must be the best in the world.
Any Institution be it academic or professional, students are its life line. The same holds equally good for our Institute. During my
tenure, it will be my endeavour to provide 24 hours helpline for students and to pursue vigorously e-learning project to enable the
students even in smaller towns/cities to have access to the best of faculties by way of facilities like virtual class room; 72 hours
IT Course after passing the Foundation course and before appearing for the Intermediate examination; partnership with reputed
credible private institutions for oral coaching classes and amendment of CS Regulations to allow registration for 10+ students.
An early completion of the revision of the syllabus and the training requirements are also of utmost importance. The contents
of the syllabus and training system would be so devised as to provide our next generation Company Secretaries ample knowledge
and skills (including soft skills), necessary practical orientation and exposure to new techniques of rendering value added
professional services to serve all stakeholders more efficiently and effectively.
In order to attract more and more students to join the Company Secretaryship Course, we have to expand our reach to every
nook and corner of the country. In this direction, I propose to spread awareness about the Company Secretaryship course
especially in small towns and cities. I would make special endeavours to organise career awareness programmes in more and
more towns and cities across the country so that youth at those places is made aware of Company Secretaryship as a career
option.
Communication is a means of linking people to achieve a common purpose. The ability to communicate is being rated the most
important factor in making an executive promotable than ambition, education and capacity for hard work. One can significantly
boost his marketability by seizing any academic and professional opportunities offered to him for honing his communication
skills. In this context, let me point out that the Institute every year through its Regional Councils /Chapters organises various
programmes for the students to enable them to hone their communication skills. Likewise this year also, the following National
level Competitions for the students will be organized-
l All India Elocution Competition
l All India Moot Court Competition

Student Company Secretary 3 February 2007

 From The President
l All India Company Law Quiz
l All India Essay Writing Competition
l All India Students Conference
I hope you will actively participate in these programmes and benefit immensely from them.
The Institute has always made earnest efforts to secure new recognitions for its members, both in practice and in employment.
The year 2006 saw new recognitions accorded to our practising members by regulatory authorities and stock exchanges. Intensive
efforts would be continued for seeking increased opportunities and new recognitions for our members. For this, we vigorously
pursue with Ministries of Company Affairs, Finance, Labour, Commerce and Industry as also SEBI, NSE, BSE, Banks, Financial
Institutions, Income Tax, Excise, Customs, Service Tax and VAT Authorities and various other regulatory bodies. I am sure that
a number of such initiatives will bear fruit.
The Institute has various Chapters and Satellite Chapters spread all over the country to serve the students and members besides
enhancing the visibility of the profession and create desired awareness about the Company Secretaryship course in their adjoining
areas. Moreover, they are the extended arms of the Council in implementing its policy decisions. Their infrastructure would be
further strengthened to render value added services to members and students at their doorstep. It would, also be our endeavour
to strengthen the infrastructure and communication facilities upto Satellite Chapter level, so that they are adequately equipped to
spread the desired visibility for the profession.
Further, it will be our endeavour to strengthen the Spreading the Wings Programme by formulating International Secretarial
Standards, expanding the reach of IFCS and strengthening our collaboration with international organizations like World Bank,
Asian Development Bank, OECD, INSOL, New York Stock Exchange, London Stock Exchange, NASDAQ, etc. This will be
important for global recognition of the profession and will also create opportunities for Company Secretaries in international
market.
At the Institute level, the focus will be on increasing brand building and creating more visibility, undertaking contemporary research
and bringing out quality publications in areas of topical importance to the profession and corporate sector.
I am pleased to inform you that one day National Seminar on Limited Liability Partnership Bill, 2006 was organised by the Institute
on January 27, 2007 at New Delhi. The Seminar was inaugurated by Shri Prem Chand Gupta, Honble Minister of Company
Affairs. Shri Jitesh Khosla, Joint Secretary, Ministry of Company Affairs, Shri U K Chaudhary, Senior Advocate, Shri T N Pandey,
Former Chairman, CBDT and Shri Sumant Batra, Kesar Dass B & Associates also addressed the delegates. At the Inaugural
Session of the National Seminar, Institutes publication titled Practitioners Guide to Consumer Protection Law was also released
at the gracious hands of Shri Prem Chand Gupta.
Friends, CCRT is organizing 17th Residential SMTP at ICSI- CCRT, Navi Mumbai commencing from 24th March to 8th April 2007.
The 17th Residential SMTP has been planned with special emphasis on Management Subjects and time-tested and well-appreciated
methodologies on imparting training including an input on Yoga and Meditation in the morning hours. In addition to the subjects
covered in any SMTP, there will be programes in the evening on topics of practical and general managerial relevance. I advise
you to avail of this unique opportunity. Attending Residential SMTP at CCRT will be an experience by itself for you as it provides
all the facilities enabling students to interact with the expert faculty, senior academics and corporate leaders.
To conclude, renowned professionals have said that success and accomplishment are not limited to those who are lucky. They
are available to anyone who chooses to be disciplined, focused, persistent, committed, positive and enthusiastic. Look behind the
scenes at the success of others. And youll clearly see how you can do it, too.

With best wishes,

Yours sincerely,

New Delhi (PREETI MALHOTRA)

February 8, 2007 president@icsi.edu

Student Company Secretary 4 February 2007

 Academic Guidance
ACADEMIC GUIDANCE
INTERMEDIATE COURSE
SECURITIES LAWS & REGULATION OF
FINANCIAL MARKETS1
I GUIDELINES ON ANTI MONEY LAUNDERING
MEASURES
The Prevention of Money Laundering Act, 2002 (PMLA) has been
brought into force with effect from 1st July 2005.
As per the provisions of the Act, every banking company, financial
institution (which includes chit fund company, a co-operative bank, a
housing finance institution and a non-banking financial company) and
intermediary (which includes a stock-broker, sub-broker, share transfer
agent, banker to an issue, trustee to a trust deed, registrar to an issue,
merchant banker, underwriter, portfolio manager, investment adviser
and any other intermediary associated with securities market and
registered under section 12 of the Securities and Exchange Board of
India Act, 1992) shall have to maintain a record of all the transactions;
the nature and value of which has been prescribed in the Rules notified
under the PMLA. Such transactions include:
l All cash transactions of the value of more than Rs 10 lakhs
or its equivalent in foreign currency.
l All series of cash transactions integrally connected to each
other which have been valued below Rs 10 lakhs or its equiva-
lent in foreign currency where such series of transactions
take place within one calendar month.
l All suspicious transactions whether or not made in cash.
SEBI has laid down the minimum requirements / disclosures to be
made in respect of clients. The intermediaries are required to specify
additional disclosures to be made by clients to address concerns of
Money Laundering and suspicious transactions undertaken by clients,
according to their requirements.
All intermediaries are advised to ensure that a proper policy
framework as per the Guidelines on anti-money laundering measures
is put into place within one month from the date of the circular. The
intermediaries are also reqired to designate an officer as Principal
Officer who would be responsible for ensuring compliance of the
provisions of the PMLA.
Obligations Of Intermediaries Under Prevention Of Money
Laundering Act, 2002.
Section 12 of the Prevention of Money Laundering Act, 2002 lays
down following obligations on an intermediary:
(1) Every banking company, financial institution and intermediary
shall-
A. maintain a record of all transactions, the nature and value of which
may be prescribed, whether such transactions comprise of a sin-
gle transaction or a series of transactions integrally connected to
each other, and where such series of transactions take place
within a month;
B. furnish information of transactions referred to in clause (a) to the
Director within such time as may be prescribed;
C. Verify and maintain the records of the identity of all its clients, in
such a manner as may be prescribed.
Provided that where the principal officer of an Intermediary or
financial institution or intermediary, as the case may has reason to
believe that a single transaction or series of transactions integrally
connected to each other have been valued below the prescribed limit
so as to defeat the provisions of this section, such officer shall furnish
1. Prepared by Sonia Baijal, Asstt. Director , The ICSI.
Student Company Secretary
information in respect of such transactions to the Director within the
prescribed time.
Cash Transaction Report
The Prevention of Money Laundering Act, 2002 and the Rules there
under require every intermediary to furnish details of the following cash
transactions:
(A) All cash transactions of the value of more than rupees ten lakhs
or its equivalent in foreign currency.
(B) All series of cash transactions integrally connected to each
other which have been valued below rupees ten lakhs or its equivalent
in foreign currency where such series of transactions have taken place
within a month.
Cash Transaction Reports can be filed either in manual or electronic
format. However, a reporting agency must submit all reports to FIU-IND
in electronic format if it has the prescribed technical capability to do so.
It must be noted that every intermediary has to ensure reporting by
all its branches/franchisees either in manual or electronic format. Thus,
an Intermediary has to adopt only one format for all its branches/
franchisees.
Suspicious Transaction Report
The Prevention of Money Laundering Act, 2002 and the Rules
notified thereunder require every intermediary to furnish details of
suspicious transactions whether or not made in cash. Suspicious
transaction means a transaction whether or not made in cash which,
to a person acting in good faith
(a) gives rise to a reasonable ground of suspicion that it may
involve the proceeds of crime; or
(b) appears to be made in circumstances of unusual or unjusti-
fied complexity; or
(c) appears to have no economic rationale or bonafide purpose.
Broad categories of reason for suspicion and examples of
suspicious transactions for an intermediary are indicated as under:
Identity of Client
- False identification documents
- Identification documents which could not be verified within
reasonable time
- Non-face to face client
- Doubt over the real beneficiary of the account
- Accounts opened with names very close to other established
business entities
Suspicious Background
- Suspicious background or links with known criminals
Multiple Accounts
- Large number of accounts having a common account holder,
introducer or authorized signatory with no rationale
- Unexplained transfers between multiple accounts with no
rationale
Activity in Accounts
- Unusual activity compared to past transactions
- Use of different accounts by client alternatively
- Sudden activity in dormant accounts
- Activity inconsistent with what would be expected from
declared business
- Account used for circular trading
Nature of Transactions
- Unusual or unjustified complexity
- No economic rationale or bonafide purpose
- Source of funds are doubtful
- Appears to be case of insider trading
5 February 2007
 Academic Guidance
- Investment proceeds transferred to a third party
- Transactions reflect likely market manipulations
- Suspicious off market transactions
Value of Transactions
- Value just under the reporting threshold amount in an
apparent attempt to avoid reporting
- Large sums being transferred from overseas for making
payments
- Inconsistent with the clients apparent financial standing
- Inconsistency in the payment pattern by client
- Block deal which is not at market price or prices appear to
be artificially inflated/deflated
Suspicious Transaction Reports can be filed either in manual or
electronic format. However, a reporting agency must submit all reports
to FIU-IND in electronic format if it has the prescribed technical
capability to do so.
Each registered intermediary should adopt written procedures to
implement the anti money laundering provisions as envisaged under
the Anti Money Laundering Act, 2002. Such procedures should include
inter alia, the following three specific parameters which are related to
the overall Client Due Diligence Process:
a. Policy for acceptance of clients
b. Procedure for identifying the clients
c. Transaction monitoring and reporting especially Suspicious
Transactions Reporting (STR)
Client identification procedure
The Know your Client (KYC) policy should clearly spell out the
client identification procedure to be carried out at different stages i.e.
while establishing the intermediary client relationship, while carrying
out transactions for the client or when the intermediary has doubts
regarding the veracity or the adequacy of previously obtained client
identification data. SEBI has prescribed the minimum requirements
relating to KYC for certain class of the registered intermediaries from
time to time. Taking into account the basic principles enshrined in the
KYC norms which have already been prescribed or which may be
prescribed by SEBI from time to time, all registered intermediaries
should frame their own internal guidelines based on their experience
in dealing with their clients and legal requirements as per the
established practices. Further, the intermediary should also maintain
continuous familiarity and follow-up where it notices inconsistencies
in the information provided. The underlying principle should be to follow
the principles enshrined in the PML Act, 2002 as well as the SEBI Act,
1992 so that the intermediary is aware of the clients on whose behalf
it is dealing.
Information to be maintained
Trading Members are required to maintain and preserve the
following information in respect of transactions mentioned above.
(i) the nature of the transactions;
(ii) the amount of the transaction and the currency in which it was
denominated;
(iii) the date on which the transaction was conducted; and
(iv) the parties to the transaction.
Maintenance and Preservation of records
The Trading Members are required to take appropriate steps to
evolve an internal mechanism for proper maintenance and preservation
of such records and information in a manner that allows easy and
quick retrieval of data as and when requested by the competent
authorities. Further, the records have to be maintained and preserved
for a period of ten years from the date of cessation of the transactions
Student Company Secretary
between the client and trading member.
Trading Members are required to formulate and implement the client
identification program containing the requirements as laid down in Rule
9 and such other additional requirements that it considers appropriate.
The records of the identity of clients have to be maintained and
preserved for a period of ten years from the date of cessation of the
transactions between the client and trading member.
II SEBI (SELF REGULATORY ORGANISATIONS)
REGULATIONS, 2004
The Securities and Exchange Board of India (Self Regulatory
Organizations) Regulations, 2004 came into effect on 19th February,
2004. According to Regulation 2(1)(k) Self Regulatory Organization
means an organization of intermediaries which is representing a
particular segment of the securities market and which is duly recognised
by the Board under these regulations, but excludes a stock exchange.
Recognition of Self Regulatory Organization
Regulation 3 provides that any group or association of
intermediaries, which is desirous of being recognized as a Self
Regulatory Organization, may form a company under section 25 of
the Companies Act, 1956 and such company may make an application
to the SEBI for grant of certificate of recognition as a Self Regulatory
Organization.
Every application made by such company must contain such
particulars as may be specified and is to be accompanied by a copy of
the governing norms of Self Regulatory Organization and also a copy
of the memorandum and articles of association relating in general to
the constitution of the Self Regulatory Organization and in particular,
to
a. Board of Directors of Self Regulatory Organization, its con-
stitution and powers of management and the manner in which
its business would be transacted;
b. the powers and duties of the office bearers of Self Regula-
tory Organization;
c. the admission into the Self Regulatory Organization of mem-
bers, agents, their qualifications for membership, and the
exclusion, suspension, expulsion and readmission of mem-
bers therefrom or there into;
The application is to be signed on behalf of the applicant under
authority of its Board of Directors by its Chairman, Managing Director,
Chief Executive Officer or whole time director. The application is to be
made in Form A of the first schedule and is to be accompanied by a
non-refundable application fee, as specified in Part A of the second
schedule, to be paid in the manner specified in Part B thereof.
Eligibility criteria
Regulation 4 provides the following criteria to be fulfilled by an
association seeking registration under these regulations:-
a. the applicant should have been granted license under sec-
tion 25 of Companies Act, 1956;
b. the memorandum of association, should specify admission
of members and discharging the functions of Self Regula-
tory Organization as one of its main objects;
c. the applicant should have a minimum networth of one crore
rupees;
d. the applicant is to have adequate infrastructure, to enable it
to discharge its functions as a Self Regulatory Organization
in accordance with the provisions of the Act and these regu-
lations;
e. the directors have the professional competence, financial
soundness and general reputation of fairness and integrity
to the satisfaction of the Board;
f. neither the applicant, nor any director of the applicant is in-
volved in any legal proceeding connected with the securities
market, which may have an adverse impact on the interests
of the investors;
g. neither the applicant, nor any director has at any time in the
6 February 2007
 Academic Guidance
past been convicted of any offence involving moral turpitude
or any economic offence;
h. the applicant has, in its employment, persons having ad-
equate professional and other relevant experience to the
satisfaction of the Board;
i. the applicant, in all other respects, is a fit and proper person
for the grant of a certificate;
j. grant of certificate to the applicant is in the interest of inves-
tors and the securities market.
Grant of recognition as a Self Regulatory Organization
If SEBI is satisfied under Regulation 5, after making such inquiry
as may be necessary in this behalf and after obtaining such further
information, if any, as it may require, -
(a) that the articles and governing norms of the applicant apply-
ing for recognition are in conformity with such conditions as
may be specified by the Board;
(b) that the applicant is willing to comply with any other condi-
tions which the Board may impose for the purpose of carry-
ing out the objects of these Regulations; and,
(c) that it would be in the interest of the trade and also in the
public interest to grant recognition to the applicant as a Self
Regulatory Organization;
the Board may grant certificate of recognition to the applicant as a
Self Regulatory Organization in Form B1 of the First Schedule subject
to such terms and conditions as the Board may deem fit and
appropriate.
Regulation 5(2) empowers the Board to specify any conditions for
the grant of recognition to the applicant as a Self Regulatory
Organization. Such conditions may relate to-
i. the qualification for membership of the Self Regulatory Or-
ganization;
ii. the representation of the Board in the Board of Directors of
the Self Regulatory Organization by such number of direc-
tors not exceeding four as the Board may nominate in this
behalf; and
iii. the maintenance of accounts of members and their audit by
chartered accountants whenever such audit is required by
the Board.
The Self Regulatory Organization cannot amend its articles without
the prior written approval of the Board.
Application to conform to the requirements
Regulation 6 provides that any application for a certificate, which
is not complete in all respects or does not conform to the requirements
of these regulations and particularly regulations 3, 4 and 5 or
instructions specified in Form A shall be rejected by the Board. However,
before rejecting any such application, the Board shall give an
opportunity to the applicant to remove such objections as may be
indicated by the Board, within 30 days of the date of receipt of relevant
communication, from the Board. On sufficient cause being shown,
the Board may extend the time for removal of objections by such further
time, not exceeding 30 days as it may consider fit, to enable the
applicant to remove such objections.
Furnishing of information, clarification and personal
representation
SEBI may under Regulation 7 require the applicant to furnish such
further information or clarification as it may consider necessary for the
purpose of processing of the application. It may also require the applicant
to appear before it through an authorized representative for personal
representation in connection with the grant of a certificate of recognition.
Conditions of certificate and validity period
As provided under Regulation 8 the certificate granted under
regulation 5 is valid for a period of five years, and subject to the following
conditions, namely: -
a. the applicant shall comply with the provisions of the Act,
applicable regulations and guidelines, directions or circulars
Student Company Secretary
issued by the Board from time to time;
b. any information or particulars furnished to the Board by the
applicant shall not be false or misleading in any material
respect;
c. where any material information or particulars furnished to
the Board by the applicant, in or in connection with the appli-
cation for recognition, has undergone change subsequent
to its furnishing, the applicant shall forthwith inform the fact
to the Board in writing;
Renewal of certificate
Regulation 9 provides that an application for renewal of Certificate
of Recognition shall be made to the Board in Form A of the First
Schedule. Such application shall be made not less than three months
before expiry of the period of validity of the certificate. The application
shall be accompanied by a renewal fee as specified in the second
schedule and, as far as may be, shall be dealt with in the same manner
as if it were an application for the grant of a fresh certificate under
regulation 3.
SEBI, if satisfied may renew the certificate in Form B2 of the First
Schedule subject to such terms and conditions as it may deem fit and
appropriate.
Procedure where certificate is not granted
Regulation 10 provides that if, after considering an application made
under regulation 3 or regulation 9, as the case may be, the Board is of
the opinion that a certificate should not be granted or renewed, it may,
after giving the applicant a reasonable opportunity of being heard,
reject the application within a period of thirty days of receipt of such
application complete in all respects or within thirty days of receipt of
further information or clarification sought under regulation 7. The fact
of the rejection of the application shall be communicated to the applicant
forthwith stating the grounds for such rejection.
Effect of refusal to grant certificate
Regulation 11 provides that an applicant whose application for the
grant of a certificate has been rejected shall not undertake any activity
as Self Regulatory Organization. Similarly, a Self Regulatory
Organization whose application for the renewal of certificate has been
rejected by the Board shall on and from the date of the receipt of the
communication of rejection from the Board cease to carry on any activity
as Self Regulatory Organization.
If SEBI is satisfied that it is in the interests of investors to do so, it
may permit the Self Regulatory Organization to complete the functions
or obligations already initiated or undertaken by it during the pendency
of the application or during the period of validity of the certificate. In
order to protect the interests of investors, the Board may issue
directions with regard to the transfer of records, documents or reports
relating to the functions of the Self Regulatory Organization, whose
application for the grant or renewal of a certificate has been rejected.
Further, the Board may, appoint any person to take charge of the
records, documents or reports relating to the organization and also
determine the terms and conditions of such appointment.
Composition of Board of Directors
Regulation 12 of Chapter III of the Regulations provides that the
Articles of Association of a Self Regulatory Organization shall provide
for the following: -
(a) There shall be a Board of Directors of the Self Regulatory Or-
ganization and majority of directors shall be independent direc-
tors.
(b) The independent directors shall not be required to hold any quali-
fication shares.
(c) The Board of Directors shall consist of nine directors out of which
five directors shall be nominated by the Board and the remaining
four shall be elected by the members of the Self Regulatory Or-
ganization.
(d) The General Superintendence, direction and management of the
7 February 2007
 Academic Guidance
affairs of the Self Regulatory Organization shall vest in its Board
of Directors, which may exercise all powers and do all acts and
things which may be exercised or done by the Self Regulatory
Organization.
(e) There shall be a Chairman, who shall be an independent profes-
sional, appointed by Board of Directors, with the prior approval of
the Board.
(f) The Chairman shall be responsible for day-to-day administration
of Self Regulatory Organization and implementing the decisions
of Board of Directors.
(g) The Board of Directors may establish committees including dis-
ciplinary committee, screening committee, arbitration committee
or remuneration committee in order to carry out the purposes of
these regulations. It has been provided that the committees con-
stituted under this regulation may consist wholly of other persons
or partly of directors and partly of other persons. The majority of
members of each such committee shall be independent.
(h) The office bearers of Board of Directors shall relinquish their of-
fice, when the Board passes an order under clause (c) of sub-
section (4) of section 11 of the Act.
(i) The Board of Directors of the Self Regulatory Organization shall
be reconstituted as and when required by the Board.
Membership of Self Regulatory Organization
As per Regulation 13 any application for registration or renewal of
registration as an intermediary with the Board under the respective
regulations applicable to such intermediaries, shall in case of any
applicant who is a member of a Self Regulatory Organization or who
ought to be a member of a Self Regulatory Organization, be made
only through the Self Regulatory Organization of which he is a member,
in the specified manner. The application is to be forwarded by the Self
Regulatory Organization to the Board along with its recommendation
for grant or refusal of certificate of registration not later than 30 days
from the date of its receipt. The Self Regulatory Organization is also
required to give the reasons for its recommendation either for granting
certificate of recognition or for refusal of certificate of registration by
the Board.
Functions and Obligations of Self Regulatory
Organization
As per Regulation 14, a Self Regulatory Organization shall always
abide by the directions of the Board. It shall be responsible for investor
protection and education of investors or its members and shall ensure
observance of Securities Laws by its members. It is required to specify
standard of conduct for its members and also shall be responsible for
the implementation of the same by its members. The SRO is required
to conduct inspection and audit of its members, on regular basis,
through independent auditors. The Annual Report of the SRO is to be
submitted to the Board. The SRO shall treat all its members and the
applications for membership in a fair and transparent manner. The
SRO may collect admission and membership fees from its members
for carrying out the purposes of these regulations. The Board is to be
promptly informed of violations of the provisions of the Act, the rules,
the regulations, the directions, the circulars or the guidelines by any of
its members. The SRO is required to conduct screening and certification
tests for its members, agents and such other persons as it may
determine. The SRO is to conduct training programmes for its members
or agents and also conduct awareness programmes for securities
market investors. The SRO is required to make endeavors for
introduction of best business practices amongst its members. It must
act in utmost good faith and must avoid conflict of interest in the conduct
of its functions. The SRO must comply with the norms of corporate
governance as applicable to listed companies. It may discharge such
other functions and obligations as may be specified by the Board,
from time to time.
Governing norms of Self Regulatory Organization
Regulation 15 provides that a Self Regulatory Organization may,
Student Company Secretary
subject to the previous approval of the Board, make governing norms
and articles consistent with the provisions of the Act and these
regulations. In particular, and without prejudice to the generality of the
foregoing power, the governing norms or articles may provide for:-
(i) eligibility criteria for admission and removal of members from
Self Regulatory Organization;
(ii) manner and the periodicity of furnishing information to the
Board and to its members;
(iii) arbitration mechanism for resolving disputes between mem-
bers and / or between members and their constituents;
(iv) procedure for proceeding against the member committing
breach of the governing norms or articles including provisions
for suspension or expulsion of members from the Self
Regulatory Organization;
(v) internal control standards including procedure for inspection,
auditing, reviewing, monitoring and surveillance of its
members by Self Regulatory Organization;
(vi) code of conduct specifying standards for its members in the
conduct of business;
(vii) procedure for conduct of election of the office bearers and
members of the committees;
(viii) obligation of members to supply such information or
explanation and to produce such documents relating to the
business as Board of Directors may require;
(ix) manner of disciplinary action against its members by Self
Regulatory Organization;
(x) contents and format of the annual report;
(xi) procedure for conduct of the meetings, quorum etc. of Board
of Directors;
(xii) manner of maintaining accounts or records of the Self
Regulatory Organization; and,
(xiii) reporting requirements to the Board on monthly basis about
various aspects of its functioning including policy initiatives,
progress in certification, number of members admitted and
disciplinary action taken against members, if any.
The governing norms or articles must provide that the contravention
of any of the governing norms shall render the member of Self
Regulatory Organization concerned liable to one or more of the
following punishments, namely:-
(i) forfeiture of shares;
(ii) expulsion from membership;
(iii) suspension from membership for a specified period;
(iv) any other penalty of a like nature not involving the payment
of money.
Where the Board considers it expedient so to do, it may, by order
in writing, direct a Self Regulatory Organization to make any governing
norms or to amend or revoke any of them within such period as it may
specify in this behalf. If a Self Regulatory Organization fails or neglects
to comply with such order within the specified period, the Board may
make, amend or revoke the governing norms either in the form specified
in the order or with such modifications as the Board may think fit.
SEBIs right to inspect
Regulation 16 of Chapter IV provides that where it appears to the
Board so to do, it may appoint one or more persons as inspecting
authority to undertake inspection of the books of accounts, other records
and documents of the Self Regulatory Organization for any of the
following purposes:
(a) to ensure that the provisions of the Act, the regulations, the
directions and the circulars issued by the Board are being
complied with;
(b) to inquire into the complaints received from members, in-
vestors, or any other person on any matter having a bearing
on the activities of the Self Regulatory Organization; or,
(c) to inquire suo motu, in the interest of securities business or
8 February 2007
 Academic Guidance
investors interest, into the affairs of the Self Regulatory Or-
ganization.
Procedure for inspection
Regulation 17 provides that before undertaking any inspection under
regulation 16, the Board shall give a reasonable notice to the Self
Regulatory Organization for that purpose. Where the Board is satisfied
that in the interest of the investors or in public interest, no such notice
should be given, it may by an order in writing, direct that the inspection
of the affairs of the Self Regulatory Organization be taken up without
such notice. The inspecting authority shall undertake the inspection
and the Self Regulatory Organization against whom an inspection is
being carried out and shall be bound to discharge its obligations as
provided under regulation 18.
Obligations of Self Regulatory Organization on inspection
by the Board
As provided under Regulation 18, it shall be the duty of the
Chairman, every Director, officer and employee of the Self Regulatory
Organization, who is being inspected to produce to the inspecting
authority or to any person authorized by him, such books, accounts
and other documents in their custody or control and furnish to the
Board the statements and information relating to the activities of Self
Regulatory Organization in securities market within such time as the
Board may require. The SRO shall allow the inspecting authority or
any person authorized by him to have reasonable access to the
premises occupied by the SRO or by any other person on its behalf
and also extend reasonable facility for examining any books, records,
documents and computer data in the possession of the SRO or any
other person and also provide copies of documents or other materials
which, in the opinion of the inspecting authority are relevant.
The inspecting authority in the course of inspection shall be entitled
to examine or record statements of the Chairman, Director, any member
and employee of the Self Regulatory Organization. It is the duty of the
Chairman, every Director, officer and employee of the SRO to give to
the inspecting authority all assistance in connection with the inspection,
which the SRO may reasonably be expected to give.
Submission of report to the Board
Regulation 19 provides for the submission of the report to the Board.
The inspecting authority shall, as soon as possible, submit an
inspection report to the Board.
Appointment of auditor
Under Regulation 20 the Board may appoint a qualified auditor to
inspect the books of account or the affairs of the Self Regulatory
Organization. The auditor so appointed shall have the same powers
of the inspecting authority as mentioned in regulation 16 and the
obligations of Self Regulatory Organization mentioned in regulation
18 shall be applicable to an inspection under this regulation. The Board
is entitled to recover the expenses of such audit or inspection as may
be incurred by it, including fees paid to the auditors, from the concerned
Self Regulatory Organization.
Periodical returns or direct inquiries
Regulation 21 provides that every Self Regulatory Organization is
required to furnish to the Board such periodical returns relating to its
affairs as may be specified. The SRO and every member thereof shall
maintain and preserve for such periods such books of account and
other documents as the Board after consultation with Board of Directors
of SRO concerned, may specify in the interests of the trade or in the
public interest and such books of account and other documents shall
be subject to inspection at all reasonable times by the Board. If the
Board is satisfied that it is in the interests of the trade or in the public
interest so to do, it may, by order, in writing, -
(a) call upon Board of Directors of a Self Regulatory Organiza-
tion or any member thereof to furnish in writing such infor-
mation or explanation relating to the affairs of the Self Regu-
latory Organization or of the member in relation to the Self
Student Company Secretary
Regulatory Organization as the Board may require; or
(b) appoint one or more persons to make an inquiry in the pre-
scribed manner in relation to the affairs of a Self Regulatory
Organization or the affairs of any members of the Self Regu-
latory Organization in relation to the Self Regulatory Organi-
zation and submit a report of the result of such inquiry to the
Board within such time as may be specified in the order or,
in the case of inquiry in relation to the affairs of any of the
members of a Self Regulatory Organization direct Board of
Directors to make the inquiry and submit its report to the
Board.
Where an inquiry in relation to the affairs of a Self Regulatory
Organization or the affairs of any of its members in relation to the
SRO has been undertaken the Chairman, every director, manager,
secretary, or other officer, every member of the Self Regulatory
Organization ( if the member of the Self Regulatory Organization is a
firm, every partner, manager, secretary or other officer of the firm)
and, every other person or body of persons who has had dealings in
the course of business with any of the members or officers of the SRO
whether directly or indirectly; shall be bound to produce before the
authority making the inquiry all such books of account, and other
documents in his custody or power relating to or having a bearing on
the subject matter of such inquiry and also furnish to the authority
such statement or information as he may require within such time as
may be specified by him.
Obligation of Board of Directors to take disciplinary
action against a member if so directed by the Board
Regulation 22 of Chapter V provides that after receiving the report
of an enquiry made under regulation 21, the Board may take such
action as it deems proper and, in particular, may direct Board of
Directors of the Self Regulatory Organization to take such disciplinary
action against the delinquent member, including expulsion, suspension
or any other penalty of a like nature not involving the levy of monetary
penalty, as may be specified by it and thereupon, notwithstanding
anything to the contrary contained in the articles or governing norms
of the Self Regulatory Organization concerned, the Board of Directors
of the Self Regulatory Organization shall give effect to the directions
of the Board and shall not in any manner commute, revoke or modify
the action taken in pursuance of such directions, without the prior
written approval of the Board.
The Board may either on its own motion or on representation of
the member concerned, modify or withdraw any of its directions issued
under sub-regulation (1), if it is satisfied that there are sufficient grounds
for doing so.
Withdrawal of recognition
Regulation 23 provides that if the Board is of the opinion that the
recognition granted to a Self Regulatory Organization under the
provisions of these Regulations should, in the interest of the trade or
in the public interest, be withdrawn, it may serve a written notice in
Form C on Board of Directors of the Self Regulatory Organization
calling upon it to show cause as to why the recognition should not be
withdrawn for the reasons stated in the notice. Where such notice is
issued, the Board may, after giving an opportunity to Board of Directors
of the Self Regulatory Organization to be heard in the matter, withdraw,
by passing an order, the recognition granted to the Self Regulatory
Organization and thereupon the provisions of regulation 11 would apply
as if the application of the Self Regulatory Organization for renewal of
recognition has been rejected under regulation 10.
The Board shall promptly communicate such order to the concerned
Self Regulatory Organization. On receipt of the order, the Self
Regulatory Organization shall cease to carry on any activity as a Self
Regulatory Organization and shall comply with such directions as may
be issued by the Board.
Action in case of violation
It has been provided under Regulation 24 that if any Self Regulatory
9 February 2007
 Academic Guidance
Organization, any office bearer or member thereof violates any
provisions of the Act or these regulations, it may be liable for
(a) action under Chapter VIA of the SEBI Act;
(b) action under subsection (3) of section 12 of the SEBI Act;
(c) action under subsection (4) of section 11 and section 11B of
the SEBI Act;
(d) action under section 24 of the SEBI Act;
(e) such other action permissible under the Act which may be
deemed appropriate in the facts and circumstances of the
case.
FINAL COURSE
BANKING AND INSURANCE LAW AND
PRACTICE
COMPLIANCE AND COMPLIANCE
FUNCTION IN BANKS2
A system of Compliance Officer in banks was introduced by
Reserve Bank of India in August 1992, based on the recommendations
of the Committee on Frauds and Malpractices in Banks (Ghosh
Committee). Further guidelines in this regard, and more specifically
on the role of the Compliance Officers were issued in March 1995. In
1997, a review of the system of Compliance offices was undertaken
wherein, in supersession of earlier guidelines, banks were advised
that the General Manager in charge of Audit and Inspection should be
designated as the Compliance Officer reporting directly to the CMD
and submit a quarterly certificate on compliance (subsequently
withdrawn in 2000) with RBI/ GOI instructions.
The compliance function in banks however, has not received the
required attention by banks, as a number of instances of non-
compliance and lack of proper interpretation of regulatory guidelines
are being reported in successive RBI inspection reports. Further, in
the absence of a comprehensive compliance structure, policy and
manual for addressing compliance risk in most of the banks,
compliance processes remain weak and the role of the Compliance
Officer has not been an effective instrument for which it was created.
In April 2005, the Basel Committee on Banking Supervision (BCBS)
had issued a paper on Compliance and the Compliance function in
banks, prescribing certain principles aimed at strengthening
compliance structure in banks. Comprehensive guidelines on
compliance and the compliance function have been formulated by the
Reserve Bank of India. The RBI vide its Circular No. DBS.PP.BC1/11/
01.005/2006-07 dated November 16, 2006 has made its mandatory
for banks to implement these guidelines.
The RBI Guidelines on Compliance and Compliance function in
Banks provide as under:
Introduction
Each bank, will formulate a Compliance Function for their bank.
The Compliance Function is for ensuring strict observance of all
statutory provisions contained in various legislations such as Banking
Regulation Act, Reserve Bank of India Act, Foreign Exchange
Management Act, Prevention of Money Laundering Act etc. as well as
to ensure observance of other regulatory guidelines issued from time
to time; standards and codes prescribed by IBA, FEDAI, FIMMDA etc.
and also each banks internal policies and fair practices code.
Compliance laws, rules and standards generally cover matters such
as observing proper standards of market conduct, managing conflicts
of interest, treating customers fairly, and ensuring the suitability of
customer advice. They typically include specific areas such as the
prevention of money laundering and terrorist financing, and may extend
to tax laws that are relevant to the structuring of banking products or
customer advice.
Compliance laws, rules and standards have various sources,
2. Compiled by Saurabh Jain, Education Officer, The ICSI.
Student Company Secretary
including primary legislation, rules and standards issued by legislators
and supervisors, market conventions, codes of practice promoted by
industry associations, and internal codes of conduct applicable to the
staff members of the bank. For the reasons mentioned above, these
are likely to go beyond what is legally binding and embrace broader
standards of integrity and ethical conduct.
It shall be the responsibility of banks Compliance Officer in the
bank to assist the top management in managing effectively the
compliance risks faced by the bank.
Compliance Risk
The Basel Committee on Compliance Function defines Compliance
risk as the risk of legal or regulatory sanctions, material financial loss,
or loss to reputation a bank may suffer as a result of its failure to
comply with laws, regulations, rules, related self-regulatory organization
standards, and codes of conduct applicable to its banking activities
(together, compliance laws, rules and standards).
The compliance area is critically important in identifying, evaluating,
and addressing legal and reputational risks. Given the significance of
these risks, a strong Group/enterprise-wide compliance program is a
necessity for banks. A group/enterprise-wide compliance program helps
the bank to look at and across business lines and activities of the
organization as a whole and to consider how activities in one area of
the firm may affect the legal and reputational risks of other business
lines and the entire group/ enterprise.
A group/enterprise-wide compliance program could help
management and the board in understanding where the legal and
reputational risks in the organization are concentrated, provide
comparisons of the level and changing nature of risks, and identify
those control processes that most need enhancement. The compliance
function must therefore ensure that controls and procedures capture
the appropriate information to allow senior management and the board
to better perform their risk management functions on a group-wide
basis.
Responsibility of the Board and Senior Management
Compliance starts at the top. It will be most effective in a corporate
culture that emphasizes standards of honesty and integrity and in which
the board of directors and senior management lead by example.
Responsibility of the Board of Directors
The Board would be responsible for ensuring that an appropriate
compliance policy is in place in the bank to manage compliance risk
and also oversee its implementation. It has to ensure that compliance
issues are resolved effectively and expeditiously by senior management
with the assistance of compliance staff. If necessary, the Board may
delegate these tasks either to the Audit Committee of the Board (ACB)
or a specific Board level Committee constituted for the purpose.
The Board, ACB or the Board Committee, as the case may be,
should review compliance function on a quarterly basis. In order to
ensure that the activities of the compliance function are subject to
independent review, the compliance function and the audit function of
the bank should necessarily be kept separate.
Responsibility of Senior Management
The banks senior management would be responsible for
establishing a written compliance policy that would contain the basic
principles to be followed by the management and staff, and would
explain the main process by which compliance risk would be identified
and managed through all levels of the organization.
The senior management would ensure that appropriate remedial
or disciplinary action is taken if breaches are identified.
Senior management should, with the assistance of the compliance
function:
l at least once a year, identify and assess the main compli-
ance risk issues facing the bank and formulate the plans to
manage them.
10 February 2007
 Academic Guidance
l at least once a year send a report to the board of directors or
a committee of the board on the banks management of its
compliance risk, in such a manner as to assist board mem-
bers to make an informed judgment on whether the bank is
managing its compliance risk effectively; and
l report promptly to the board of directors or a committee of
the board on any material compliance failure (e.g. failure
that may attract a significant risk of legal or regulatory sanc-
tions, material financial loss, or loss to reputation).
The Compliance Policy
A robust Compliance system in a bank should include a well
documented Compliance Policy, outlining the compliance philosophy
of the bank, role and set up of the Compliance Department, composition
of its staff and their specific responsibilities. The policy should be
reviewed annually by the Board.
Broadly, the policy should include the following aspects:
l Setting up of an independent Compliance Department at the
Head Office with a senior executive heading it with adequate
support staff and specifying its role and responsibilities.
l Compliance structure in controlling offices and branches
specifying the role and responsibility of each functionary in
the Compliance units.
l Measures to ensure independence of the compliance func-
tion - It would be necessary that the remuneration of the
compliance functionaries is not related to the business line
for which they exercise compliance responsibilities though it
could generally be related to the financial performance of
the bank as a whole.
l Focus of the compliance on regulatory compliance, statu-
tory compliance, compliance with fair practice codes and
other codes prescribed / suggested by self-regulatory or-
ganizations, government policies, banks internal policies and
prevention of money laundering and funding of illegal activi-
ties.
l Monitoring compliance testing procedure.
l Right of the compliance function to have access to informa-
tion necessary to carry out its responsibilities and conduct
investigations of possible breaches of compliance policy.
l Relationship between Chief Compliance Officer and head of
other functional departments.
l Mechanism for dissemination of information on regulatory
matters among operational staff and periodic updating of
operational manuals.
l Approval of all new processes and products by the Compli-
ance Department prior to their introduction.
l Right of the compliance function to freely disclose its find-
ings and views to senior management, Board / ACB or Board
Committee.
The Compliance structure
Depending on its branch network, size and complexity of the
business operations, sophistication of products and services offered
etc. every bank should decide on the organizational structure and
composition of its Compliance unit.
A Compliance Department having formal status should be set up
at the Head Office of the bank, (in the case of foreign bank branches
it should be at the banks Principal Office in India). The compliance
department should have an executive or senior staff member of the
cadre not less than in the rank of DGM or equivalent designated as
Group Compliance Officer or Head of Compliance with overall
responsibility for coordinating the identification and management of
the banks compliance risk and supervising the activities of other
compliance function staff.
The Compliance officer, once appointed cannot be removed by
the Chief Executive Officer of the bank, except with the specific approval
of the Board of Directors of the bank / Head Office of the bank in the
Student Company Secretary
case of foreign banks. The Board, Audit Committee of the Board or
any other Board Committee as the case may be, should be kept
informed of any change in the Chief Compliance Officer as also the
reason for the change in the incumbent. The Reserve Bank of India
shall also similarly be kept informed of the name of the Chief
Compliance Officer as also any change thereof, as and when it takes
place.
In the case of larger banks, compliance staff may be located within
operating business lines. Internationally active banks (including foreign
banks having a presence in India) may also have group and local
compliance officers reporting to their own Regional / Global Head while
closely working with the local CEO on regulatory / compliance issues.
The Compliance Department should be provided with adequate
staff. Further, each Department in the Head Office, controlling offices
and branches (and / or Strategic Business Units (SBUs) in the case of
certain banks as considered appropriate depending on their business
delivery model) should have a Compliance Officer, who would report
to the Chief Compliance Officer.
The staff in the Compliance Department at the Head Office as also
Compliance Officers at controlling offices and branches / SBUs should
primarily focus on compliance functions. However, in small sized banks
with limited branch network, the compliance staff could be assigned
some other duties while ensuring that there is no conflict of interest.
Under no circumstances, the compliance staff should be assigned
audit/inspection duty as it gives rise to serious conflict of interest in
view of the fact that all products and processes are expected to be
cleared by the Compliance Department and its audit needs to be carried
out independently by separate set of staff.
Some banks may wish to organize their compliance function within
their operational risk function, as there is a close relationship between
compliance risk and certain aspects of operational risk. Others may
prefer to have separate compliance and operational risk functions,
but establish mechanisms requiring close cooperation between the
two functions on compliance matters.
Apart from the basic qualifications, the Compliance staff should
preferably have a fair knowledge of law, accountancy and information
technology and also adequate practical experience in various business
lines and audit/inspection functions to enable them to carry out their
duties effectively. In order to keep the compliance staff up-to-date with
developments in the areas of banking laws, rules and standards, regular
and systematic education and training are required.
They should therefore be adequately trained in new products and
services introduced in the banking industry as well as in the areas of
corporate governance, risk management, supervisory practices etc.
In some banks, the entire compliance responsibilities may not be
carried out by the compliance department. Compliance function staff
who reside in operating business units or in local subsidiaries may
have a reporting line to operating business unit management or local
management. This is not objectionable, provided such staff also have
a reporting line through to the head of compliance as regards their
compliance responsibilities. In cases where compliance function staff
reside in independent support units (e.g. legal, financial control, risk
management), a separate reporting line from staff in these units to the
head of compliance may not be necessary. However, these units should
co-operate closely with the head of compliance.
In all such cases, there should invariably be an appropriate
mechanism for coordination among these departments to enable the
Chief Compliance Officer to perform the assigned responsibilities
effectively.
The Chief Compliance Officer should be the nodal point of contact
between the bank and the regulator. Regardless of how the compliance
function is organized within a bank, it should be independent and
sufficiently resourced, its responsibilities should be clearly specified
and its activities should be subject to periodic and independent review.
The compliance function should also attend to the compliance of
11 February 2007
 Academic Guidance
directions from other regulators (IRDA, SEBI etc.) in those cases where
the activities of the bank are not limited to the banking sector. For
example, a bank which is acting as a corporate agent for distribution
of other companies insurance products may receive direction from
IRDA, which should be a part of the compliance function. Further,
discomfort conveyed to the bank on any issue by other regulators,
should be brought to the notice of the Reserve Bank of India.
Compliance process and procedures
The Compliance Department at the Head Office should play the
central role in the area of identifying the level of compliance risk in
each business line, products and processes and issue instructions to
operational functionaries. It should circulate the instances of
compliance failures among staff along with preventive instructions at
least once a year. Inspection/audit findings should serve as a feedback
mechanism for the Compliance Department.
Broadly the Compliance process should involve the following
actions: The Compliance Department should be the focal point for
receipt and dissemination of all regulatory and internal guidelines/
instructions among all operational departments. It should ensure that
(a) appropriate instructions get promptly issued within the organiza-
tion,
(b) the instructions are actually received at each office, and
(c) the instructions are implemented.
Banks may consider software-based solutions, provided by reputed
vendors, which make available all the regulatory instructions and also
provide regular updates.
The Compliance risks in all new products and processes should
be thoroughly analyzed and appropriate risk mitigants by way of
necessary checks and balances should be put in place before
launching. The Chief Compliance Officer must be a signatory to all the
existing and new products and the policy / procedure formulation for
outsourcing contracts in the bank. He should be a member of the new
product committee of the bank and all products should be approved
by him. All new products should be subjected to intensive monitoring
for the first six months of introduction to ensure that the indicative
parameters of compliance risk are adequately monitored.
The Compliance Department should serve as a reference point for
the banks staff from operational departments for seeking clarifications/
interpretations of various regulatory and statutory guidelines.
Banks should develop function-wise Compliance Manuals duly
approved by the Chief Compliance Officer and provide these to the
staff associated with the respective functions.
The Compliance Department should go through all audit/inspection
reports and rectification reports regularly to enable it to identify
compliance failures in the bank. The Compliance Department should,
at frequent intervals, interact with Legal Department, Operational risk
management Department, Taxation Department and Audit/Inspection
Department of the bank to take stock of the latest developments.
Compliance officers should have access to all information they require
and have the right to conduct investigation and report the findings to
the Chief Compliance Officer. The Chief Compliance Officer shall
necessarily be a participant in the quarterly informal discussions held
with RBI. In case, no quarterly meeting is held, he should meet the
Chief General Manager, DBS in charge of the concerned bank at
Central Office of RBI, once in every quarter of the year, to discuss
compliance issues.
The compliance functionary should be looked at as a friend,
philosopher and guide by the business units. There should be close
co-ordination and partnership between Compliance and Business
Operations functions. The interaction may be formalized by making
the Chief Compliance Officer a member of the various
interdepartmental committees in the bank.
Banks with fully operational core banking solutions should centralize
their regulatory reporting at the Compliance Department. In other cases,
Student Company Secretary
Compliance Department shall monitor timely submission of regulatory
returns by the controlling offices through appropriate mechanism, such
as a Monthly Returns Calendar, which may indicate the returns/reports
to be submitted by each branch/controlling office and their dates of
submission.
Compliance function should use the internal audit and concurrent
audit as a feedback mechanism. The Chief Compliance Officer should
be an invitee to the meetings of the ACB. All audit reports should be
marked to Chief Compliance Officer and similarly, all reviews by
compliance department should be marked to internal audit department.
The compliance function should monitor and test compliance by
performing sufficient and representative compliance testing and the
results of such compliance testing should be reported to the senior
management.
It should also consider ways to measure compliance risk (e.g. by
using performance indicators) and use such measurements to enhance
compliance risk assessment.
Compliance staff should be empowered to conduct compliance
reviews/investigations, whenever required. The authority to use external
experts for the purpose of investigation, if required, should be left to
the discretion of the Chief Compliance Officer.
The compliance function should be free to report to senior
management on any irregularities. Although its normal reporting line
should be to senior management, the compliance function should also
have the right of direct access to the board of directors or to a committee
of the board, bypassing normal reporting lines. Further, it may be useful
for the board or a committee of the board to meet with the head of
compliance at least annually, as this will help the board or board
committee to assess the extent to which the bank is managing its
compliance risk effectively. It should have a right to direct access to
the board of directors or a committee of the board.
An Annual Report on compliance failures/breaches should be
compiled and placed before the Board/ACB/Board Committee and
circulated to all the functional heads. Non-compliance of any regulatory
guidelines and administrative actions taken against the bank along
with corrective steps taken to avoid recurrence of the lapses should
be disclosed in the annual report of the banks.
The code of conduct for employees should envisage working
towards earning the trust of the society by dealing with customers in a
fair manner and conducting business operations consistent with rules
and regulations. Due weightage could be given to record of compliance
during performance appraisal of staff at various levels. Staff
accountability should be examined for all compliance failures.
The Compliance Programme
The responsibilities of the compliance function should be carried
out under a compliance programme that sets out its planned activities.
The compliance programme should be risk-based and subject to
oversight by the head of compliance to ensure appropriate coverage
across businesses and co-ordination among risk management
functions.
The compliance function may have specific statutory responsibilities
(e.g. fulfilling the role of anti-money laundering officer). Periodical
reviews of the compliance systems and procedures within the bank
and reporting to the Board are essential for maintaining the
effectiveness of the compliance function. Banks should carry out an
annual compliance risk assessment in order to identify and assess
major compliance risks faced by them and prepare a plan to manage
the risks. The Annual review should broadly cover the following aspects.
l Compliance failures, if any during the preceding year and
consequential losses and regulatory action as also steps
taken to avoid recurrence of the same.
l List of all major regulatory guidelines issued during the pre-
ceding year and steps taken by the bank to ensure compli-
ance.
l Independence of compliance function.
12 February 2007
 Academic Guidance
l Scope of compliance procedures and processes.
l System of internal control to minimize compliance risk.
l Compliance with fair practices codes and adherence to stand-
ards set by self regulatory bodies and accounting standards.
l Progress in rectification of significant deficiencies pointed
out in the internal audit, statutory audit and RBI inspection
reports and position of implementation of recommendations
made therein.
l Strategy for the next year including restructuring of compli-
ance department, if necessary, posting/transfer/training of
staff.
Apart from the exhaustive annual review, a monthly report on the
position of compliance risk may be put up to the senior management/
CEO by the Chief Compliance Officer. A brief report on the compliance
position may also be placed before the Board/ACB/Board Committee,
as the case may be on a quarterly basis.
Instances of all material compliance failures which may attract a
significant risk of legal or regulatory sanctions, financial loss or loss of
reputation should be reported to the Board/ACB/Board Committee
promptly.
The activities of compliance function should be subject to annual
review by the internal audit. Compliance risk shall be included in the
risk assessment methodology of the internal audit function and the
audit programme shall cover the adequacy and effectiveness of the
banks compliance function including testing of controls commensurate
with the perceived level of risk.
Guidance and education
The compliance function should advise and assist the senior
management on compliance laws, rules and standards, including
keeping them informed on developments by establishing written
guidance to staff on the appropriate implementation of compliance
laws, rules and standards through policies and procedures and other
documents such as compliance manuals, internal codes of conduct
and practice guidelines.
Cross Border issues
Banks may choose to carry on business in various jurisdictions for
a variety of legitimate reasons. In such cases, it should be ensured
that they comply with applicable laws and regulations in all such
jurisdictions and that the organization and structure of the compliance
function and its responsibilities are consistent with local legal and
regulatory requirements. It is for local businesses to ensure that
compliance responsibilities specific to each jurisdiction are carried out
by individuals with the appropriate local knowledge and expertise, with
oversight from the head of compliance in co-operation with the banks
other risk management functions.
TAX LAWS
3 Whether the Angel Garment Company Ltd. could be said to have
LEGAL DECISIONS
[2006] 287 ITR 372 (Guwahati), Bishnu Talkies vs. Commissioner
of Income-Tax 20.09.06
Facts:
Bishnu Talkies, the assessee, started construction of a cinema
hall at Dhubri in financial year 1984-85 and almost completed the
same in the financial year 1987-88. The assessee filed the return for
the assessment year 1988-89 showing loss.
The assessment was completed on a total income of Rs.
4,29,610/-. On appeal the assessment order was set aside and
valuation report was called for. On perusal of the report proceedings
u/s 147 initiated and notices u/s 148 were issued for the assessment
years 1985-86 to 1987-88. In response, loss returns of the assessment
years were filed and also objections against the valuation report were
3. Prepared by Mamta Goel, Asstt. Education Officer, The ICSI.
Student Company Secretary
submitted on the basis that books of accounts properly maintained by
the assessee were approved by assessing officer and not rejected by
him.
Issues:
Whether the report of the departmental valuer was binding on the
assessing officer irrespective of the fact that books of accounts for
cost of construction were maintained by the assessee? Is it right to
rely on valuation report in spite of the fact that no positive contrary
evidences were brought in by the assessing officer for rejecting the
books of account of the assessee maintained for the purpose of cost
of construction?
Decision:
The valuation report was called for before reopening of the
assessment and on perusal of the same, proceedings u/s 147 initiated.
The reopening was within the powers of the assessment officer since
he had a reason to believe from the valuation report that income
chargeable to tax has escaped assessment u/s 69 of the Income- tax
Act, 1961.
It was found that the cost of construction as assessed by the
Valuation Officer was reasonable and no error or mistake could be
pointed out by the assessee during the course of hearing. The matter
is purely a question of fact and not of law.
It was held that the function of a valuer of a property is a technical
function requiring expert investigation for the purpose of estimating
the cost of construction. A valuation report is only an opinion of the
valuer and cannot form a ground for reason to believe for initiation of
a proceeding u/s 147 of the Income-tax Act, 1961.
[2006] 287 ITR 341 (AAR) [Before the Authority for Advance
Rulings], (Income- Tax), Angel Garment Ltd., In re, October 30,
2006
Facts:
Angel Garment Ltd., Hong Kong, a non resident company, having
its head office at Hong Kong, is proposing to set up a liaison office in
India. The liaison office will perform following activities:
1) Collecting information and samples of various garments and tex-
tiles from various manufacturers, traders and exporters.
2) Passing on information with regard to various garments and tex-
tile products available in India to the company at Hong Kong
3) Co-ordinate and act as the channel of communication between
the Company and the Indian exporters
4) Follow up with the Indian exporters for timely export of goods
ordered by the applicant
The entire expenses of the proposed liaison office were to be met
through remittances from the head office. On these facts the company
applied to Authority for Advance ruling on the following issue.
Issue:
received income taxable in India as per provisions of Income tax Act,
1961?
Decision:
The section 6(3) of the Income tax Act, 1961 reads as follows:
6. For the purposes of this Act,-
(3) A company is said to be resident in India in any previous year,
if-
(i) it is an Indian company; or
(ii) during that year, the control and management of its affairs is
situated wholly in India..
It is clear from the facts of the case and section 6(3) that as the
3. Prepared by Mamta Goel, Assistant Education Officer, The ICSI.
13 February 2007
 Academic Guidance
company in not an Indian company and control and management is
situated outside India, the company is non- resident.
The clause (b) of Explanation 1 to Section 9(1)(i) of the Income
Tax Act, 1961 reads as follows:
Income deemed to accrue or arise in India.
Section 9. (1) The following incomes shall be deemed to accrue or
arise in India :-
(i) all income accruing or arising, whether directly or indirectly,
through or from any business connection in India, or through or from
any property in India, or through or from any asset or source of income
in India, or through the transfer of a capital asset situate in India.
Explanation 1. For the purposes of this clause-..
(b) in the case of a non-resident, no income shall be deemed to
accrue or arise in India to him through or from operations which are
confined to the purchase of goods in India for the purpose of export;
As the liaison office functions are confined to the purchase of goods
for export and the company is a non-resident, the company could not
be said to have earned any income taxable in India from the proposed
activities under the provisions of Income Tax Act, 1961.
UNIFORMITY IN SIGNATURES
It has been observed that some of the enrollment
applications/ letters received from the students are either
unsigned or bear different signatures from time to time.
All the students are, therefore, advised to maintain uniformity
in their signatures on all the correspondence with the Institute
including students identity card, enrolment application and
attendance sheet provided in the examination hall at the time
of writing the examination.
ATTENTION STUDENTS!
Applicability of Latest Finance Act and other changes for
Company Secretaries June 2007 Examination.
DIRECT TAXES
All students may note that for the June 2007 Examination session,
in respect of Direct Taxes, the applicable Assessment Year shall
be 2007-08 (Previous year 2006-07).
Thus, they will have to study Finance Act, 2006 for June 2007
examination. Further, as per the syllabus, students are required
to update themselves about all the Circulars, Clarifications,
Notifications issued by CBDT & Central Government, which come
in to effect on or before 6 months prior to the date of the respective
Examination.
Gift Tax Act has been excluded from the scope of examination
from June 1999 session onwards unless otherwise informed.
INDIRECT TAXES
Students appearing in the Tax Laws (Indirect Tax portion to the
extent of topics covered in the syllabus) and Direct and Indirect
Taxation-Law and Practice (Indirect tax portion) paper of the
Intermediate and Final Courses respectively may take note of the
following changes applicable for June 2007 Examination:
1. All changes made by the Finance Act, 2006.
2. All Circulars, Clarifications/Notifications issued by CBE&C/
Central Government which became effective six months prior
to the date of examination.
Student Company Secretary
In our endeavour to provide prompt and efficient services to the
student community, the overall status of all the registered students
of the Institute has been uploaded to the website of the Institute
viz. www.icsi.edu. The information can be accessed as under:
. Visit the Home Page
. Click on the tab 'Overall Status' under the
Group 'Students'
. Enter Full Registration Number
. Press Tab Key
. Wait for the name to appear on the adjacent
field
. Click on the tab 'Go'
The students may verify the particulars contained therein viz.
Student's Name, Father's Name, Date of Birth, Qualification, Paper-
wise Exemption (if any), Complete Postal Address with City, State
and Pin Code, Postal/Oral Coaching Status, etc. In case, they
come across any discrepancy and/or need any clarification/
additional information/service, a written request may be sent to us
by E-Mail as per the details given below:
1. Query regarding Registration Status/
Issue of Study Material, etc. for
(a) Intermediate Course ss_reg@icsi.edu
(b) Foundation Course ss_fond@icsi.edu
(c) De-novo/Extension/Final Enrollment ss_post@icsi.edu
2. Query regarding non-receipt of ss_misc@icsi.edu
Registration Letter/ldentity Card/
Student Company Secretary Bulietin/
CS Foundation Course Bulletin, etc.
3. Query regarding paperwise exemption ss_enrol@icsi.edu
4. Query regarding Coaching ss_coaching@icsi.edu
Completion Certificate/Suggested
Answers and Response Sheet status
5. Query regarding issue of Admission dss@icsi.edu
Certificate/Roll No. for Examinations, etc.
CLARIFICATION REGARDING HINDI MEDIUM
Queries are often being received by the Institute with regard
to the option of medium for pursuing the Company Secretaryship
Course.
It is clarified that the students may opt for pursuing the course
in English/Hindi medium. However, the study material at present
is available in English medium only. In any case, the students
can enjoy the facility of submitting their response sheets to the
test papers under the Postal Tuition Scheme in English or Hindi
medium. Similarly, they can opt to write the Institutes main
examination in English or Hindi Medium.
As regards writing of examination, the option is to be exercised
while filling up the examination form as and when the students
intend to appear in the examination. This option is to be exercised
on group wise basis and not on individual paperwise basis.
Answering to test papers and writing examination partly in
English and partly in Hindi medium is not permissible.
14 February 2007
 Legal World
LEGAL WORLD
Compiled by T.K.A. Padmanabhan, FCS, Advocate, New Delhi.
CORPORATE LAWS
LW(S) 08.02.2007
ASHOK ORGANICS INDUSTRIES LTD. v. DENA BANK & ORS
[(2007) 135 Comp Cas 203 (Bom)], S.C.Dharmadhikari J. [Decided
on 8.11. 2006]
Companies Act read with SICA- Sick Company before BIFR-
Scheme of arrangement proposed by the sick company Whether
company court has jurisdiction to entertain the petition- Issue
referred to Larger Bench.
Brief Facts : The Petitioner Company was a sick company and
was registered with the BIFR. The Petitioner Company proposed a
scheme of arrangement before the High Court. The Company Judge
took a view that as long as the reference before the BIFR is pending,
the company court has no jurisdiction. A coordinate bench of the High
Court had decided the other way in an earlier case. Since there was
difference between two coordinate benches of the same High Court,
the issue was referred to the Larger Bench.
Decision: Referred to Larger Bench.
Reason: The Supreme Court has held in NGEF Ltd. v. Chandra
Developers P. Ltd. (2005) 127 Comp Cas 822 that the Sick Industrial
Companies (Special Provisions) Act, 1985, is a special statute and a
complete code by itself. It prevails over the Companies Act, 1956. It
cannot be said that there is no inconsistency in the two enactments
and that they supplement each other. The provisions of the 1985 Act
would prevail over the Companies Act.
Judicial discipline requires the single judge not to ignore judgments
rendered by a co ordinate Bench and observations therein, which are
binding cannot be ignored unless they are per incuriam. Therefore,
the question whether an industrial company which has made a
reference under section 15 of the Sick Industrial Companies (Special
Provisions) Act, 1985, can during the pendency of such reference,
apply to the court for sanctioning a scheme of arrangement or
compromise with its creditors and shareholders under sections 391
and 394 of the Companies Act, 1956, and whether the court can take
cognizance of such an application during the pendency of the reference
and pass necessary orders thereon as are permissible in law, has to
be decided by a larger bench.
LW(S) 09.02.2007
ELECTREX (INDIA) LTD. v. USHA D. ROHRA & ORS. [(2007) 135
Comp Cas 157 (Kar)], R.Guru Rajan & Jawed Rahim JJ. , [Decided
on 22-9- 2006.]
SICA- Reference pending before the BIFR-Depositors approached
the CLB for the repayment of deposits-CLB ordering for the same-
Whether correct- Held, Yes.
Brief Facts: The appellant company received deposits from the
respondents and utilized them towards its working capital requirements.
It became sick and on a reference to the BIFR, an operating agency
was appointed to prepare a comprehensive report in the matter. In
the meantime on applications filed by the respondents under section
58A(9) of the Companies Act, 1956, the Company Law Board ordered
repayment of the amount in deposit together with up to date interest.
The court by an interim order granted liberty to the depositors to file
complaints, a few depositors filed criminal cases and their payments
were settled. The company appealed against the order of the CLB.
Decision: Appeal dismissed.
Reason: The repayment of the deposits was not barred by section
22 of the Sick Industrial Companies (Special Provisions) Act, 1985.
Quick remedial measure was an urgent need as the depositors were
fairly old and having invested their hard earnings, were entitled to
Student Company Secretary
repayment in terms of the deposits. The appellant having made
payments to a few depositors was to settle similarly situated depositors.
Payments were directed to be made within three months, failing which
the respondents were entitled for interest at 10 percent, on delayed
payment.
LW(S) 10.02.2007
SHAW WALLACE BREWERIES LTD. v. HIM NEEL BREWERIES
LTD. [(2007 135 Comp Cas 57 (Del)] Vikramajit Sen J. [Decided on
08.9. 2006]
SICA-Section 22- During pendency of proceedings, civil court
granted injunction against alienating assets of the company-
Whether such injunctions fall under the purview of section 22 of
the SICA- Held, No.
Brief facts: Ex-parte interim orders were passed against the
respondent company on February 19, 2004, and March 18, 2004,
restraining it from selling, alienating or in any manner creating third
party interest in respect of finished stock, stock of raw materials and
stock of packing materials. On an application the respondent relying
on section 22(1) of the Sick Industrial Companies (Special Provisions)
Act, 1985, contended that the orders passed deserved to be recalled
as no coercive recovery proceedings against the company shall lie or
be proceeded with or without the permission of the BIFR.
Decision: Application dismissed.
Reason: I had expressed the opinion that the bar of section 22(1)
of SICA would apply only to disputes reckoned or included in the
sanctioned scheme. Jural experience is that companies most often
initiate proceedings under SICA in order to escape or procrastinate an
adjudication of their liabilities and debts. Where a claim of party had
not been included in the scheme presented to BIFR, the preponderant
opinion is that courts can continue legal proceedings.
There is yet another aspect to the present dispute. As has already
been noted the SICA embargo is in respect of distress proceedings or
injunctions/orders in the genre of distress. The appointment of a
receiver, despite pendency of proceedings before BIFR could justifiably
be viewed as distressful to the sick company, yet such appointments
have been made. The injunctions passed in these proceedings on
19.2.2004, as well as on 18.3.2004, are preservatory rather than
distressful. The Uppal Engineering (2005) 121 DLT 539; (2006) 132
Comp Cas 4(Delhi) partake of the nature of distress in as much as a
sum of Rs.133 crores had been taken out of the funds available to the
sick company. In the present case the interim orders are calculated to
ensure that the assets of the sick company are not dissipated or frittered
away. Such orders do not fall within the moratorium of section 22 of
SICA.
GENERAL LAWS
LW(S) 11.02.2007
BIRTHE FOSTER v. STATE & ANR [136 (2007) DLT 397), Badar
Durez Ahmed, J. [Decided on 1.12.2006]
Negotiable Instruments Act, 1881- Section 141- Cheque dishonour-
Persons responsible for the offence committed by a company-
Whether agent of a company covered by section 141- Held, No.
Brief Facts: The petitioner was an agent of one Gin Company Ltd.
She was also included as an accused along with the company and its
directors in a complaint filed under section 138 of the NIA. The
Magistrate took cognizance of the offence and issued summons to
the petitioner. The petitioner approached the High Court challenging
the decision of the Magistrate and recalling the issue of summons.
Decision: Petition allowed.
Reason: The persons mentioned in sub-section (2) of section 141
are any director, manager, secretary or other officer of the company.
This gives an indication as to which person would fall within the purview
of section 14(1) of the said Act. The petitioner is neither a director,
15 February 2007
 Legal World
manager, secretary nor other office of the company. Furthermore, the
petitioner even otherwise not in charge of or responsible to the accused
company for the conduct of the business of the said company. It is
another matter that as an agent, the petitioner may have handled
transactions for and on behalf of the company in India but that does
not bring the petitioner within the purview of section 141which,in my
view, is restricted to an officer of the company or a director or manager
or secretary. That being the case, the summoning order in so far as
the petitioner is concerned, is liable to be set aside. The same is set
aside and quashed to this extent.
LABOUR & INDUSTRIAL LAWS
LW(S) 12.02.2007
VOLTAS LTD v. VOLTAS EMPLOYEES UNION & ANR [136) (2007)
DLT 450], Shiv Narayan Dhingra, J. [Decided on 12.1.2007]
Industrial Disputes Act, 1947 read with Trade Unions Act, 1926-
Protected workman- Office bearers of a trade union elected not
in accordance with the rules of the union - Whether they can be
treated as protected workmen-Held, No.
Brief Facts: In the present case, four of the persons whose names
were sent by the union were already under suspension and were facing
departmental inquiry. When their names reached the employer, the
employer sought to know as to how they were appointed/elected as
office bearers. Such information should have been provided to the
employer along with the application. The respondent did not provide
this information to the employer even then demanded. The Assistant
Labour Commissioner [ALC] has held that the employer had no right
to seek this information. The petitioner approached the High Court
under a writ.
Decision: Petition allowed.
Reason: I consider that the ALC did not take a correct view of law
and did not appreciate that only those office bearers have right to be
declared as protected workmen who have been appointed as office
bearers of the union in accordance with the rules of the union. There
is no presumption that once the names of the office bearers are sent
for being declared as protected workmen, the persons have been
rightfully appointed as office bearers. A self appointed Executive
committee of a union de hors the rules of the trade union cannot claim
protection as protected workmen under section 33(4) of the ID Act. I
consider that the order of the ALC is contrary to law and express
provisions of the Act. The order of the ALC is set aside the writ petition
is allowed.

ATTENTION ALL STUDENTS APPEARING IN THE CS INTERMEDIATE EXAMINATIONS

FROM JUNE, 2007 SESSION ONWARDS
COMPULSORY COMPUTER TRAINING SCHEME
In the Company Secretaries Regulations, 1982, for regulation 40, the following regulation shall be substituted, as published in the Gazette of
India(Extra Ordinary) vide Notification No. ICSI/710/1(M)/1 dated 3rd May, 2006.
40 Admission to the Intermediate Examinations -
No candidate shall be admitted to the Intermediate examination unless he/she :-
- (a) is a registered student and produces a certificate from the head of the coaching administration ( by whichever name designated) to the effect that he has
undergone satisfactorily a course of postal or oral tuition for the Intermediate examination; and
- (b) has successfully completed computer training program as may be specified from time to time by the Council and in the manner so specified
or exempted there from;
- (c) applies with such examination fee as may be determined by the council from time to time so as to reach the Secretary, in accordance with the
directions given by the Council.
In terms of the aforesaid amendment in the Company Secretaries Regulations, 1982, all students are required to successfully undergo a Compulsory
Computer Training Programme for becoming eligible for appearing in the CS Intermediate Examinations from June, 2007 examinations onwards.
The Institute, in compliance of the aforesaid amendments, has tied up with M/s NIIT through which 70 hours of computer training shall be provided
to the students/members of the Institute in all Centres of NIIT all over the country. To undergo this course, a student/member has to approach any NIIT
Centre on all India basis. To take admission, he/she has to deposit the requisite fees at the respective NIIT Centre and fulfill the formalities as per the
requirements of the Computer Training Centre.
The list of NIIT Centres including detailed course contents, module details and topic-wise time duration etc. have been published on the website of
the ICSI i.e. www.icsi.edu under FAQ.
Salient features of the course in brief : -
Title of the Course Understanding Information Technology in Corporate Environment.
Duration of the Course 70 Hours
Fee Rs.3000 per participant for General Category & Rs.2500 per participant for SC/ST Category
Note : Service Tax as per the GOI rules applicable from time to time shall be paid in actual by the participant
A student can be exempted from undergoing the course on the basis of his existing qualification/degree in the computer field subject to the conditions
that he or she enrolls himself/herself for an online exemption test (to be conducted by NIIT) at any of the NIIT Centre on all India bases and successfully
clears the test. A fee of Rs.450 plus Service Tax, etc. per student is payable for online test which is applicable for a maximum of TWO attempts within a
period of one month.
The Course is open to all the students and members of the ICSI.

Computer Training will be compulsory and pre-requisite for all the students intending to appear in the Intermediate Examination from December, 2007
session onwards. No student will be allowed to appear at the Examination to be held from December, 2007 session onwards unless he/ she successfully
completes the Computer Training.
However, a student may be permitted PROVISIONALLY to appear in the June, 2007 session only without completing the computer training with the
condition that, he/ she will complete the Computer Training before seeking enrollment to Final Examinations.

Student Company Secretary 16 February 2007

 Student Services
STUDENT SERVICES
REGISTRATION AND POSTAL TUITION
1. CANCELLATION OF REGISTRATION
Registration of students registered upto and including March, 2002
stands terminated on expiry of five-year period on 28th February, 2007
leading to the following immediate consequences:
(a) Supply of Student Company Secretary bulletin will be
discontinued from March, 2007 onwards.
(b) Response sheets will not be accepted even if submitted and
coaching completion certificates will not be issued (after the
expiry of registration period)
They are advised to apply for registration de novo/extension
of registration as per the guidelines published in this bulletin.
(Students whose registration is valid upto February, 2007 are,
however, eligible to appear in June, 2007 examination without seeking
extension of registration / registration de-novo subject to fulfilling other
requirements laid down in the regulations.)
2. CHANGE OF ADDRESS
Change of address, if any, should be intimated to the Institute by
sending a separate letter in this regard. While intimating the change in
their mailing address, the students are advised to invariably quote the
PIN CODE number alongwith the student registration number, name
and full postal address with city, state in capital letters.
PIN CODE is required to be mentioned for quick delivery of the
mail. Students may, therefore, check up the computerised mailing
address as printed on the Student Company Secretary bulletin. In
case, it does not carry or carry the wrong PIN CODE number, the
same may be intimated immediately quoting student registration
number and full postal address with Postal Index Number so that it
could be incorporated in the computerised mailing list.
3. STUDENTS IDENTITY CARD
All the students appearing in the examination must hold Identity
Card in the manner prescribed by the Institute, if not already obtained
at the time of seeking registration. For obtaining the Identity Card,
students are advised to obtain a proforma from the Headquarters/
Regional Offices of the Institute and send it again to the Institute duly
filled up and attested as per instructions given in the prospectus/
registration letter.
Students who have so far not obtained Identity Cards are advised to
write to the Institute immediately. The students should carry their Identity
Cards without fail for appearing in the Institutes examination. If the
Identity Card already issued has been lost or mutilated, student should
send a request for obtaining duplicate Identity Card together with the
mutilated Identity Card/ldentity Card proforma duly filled in and attested
together with Rs. 50/- towards duplicate Identity Card fee.
4. COMPULSORY ENROLMENT FOR FINAL COURSE
Students who have passed/completed both groups of Intermediate
examination are advised to seek compulsory enrolment for undergoing
coaching for the Final course on payment of Rs.4200/- towards postal
tuition fee.
Please note that a student is admitted to the final examination only
after a minimum period of nine calendar months has elapsed since
his/her passing the Intermediate examination and subject to completion
of coaching and fulfillment of other requirements.
5. COMPANY SECRETARIES EXAMINATION -JUNE,
2007
I. EXAMINATION FEE
Foundation : Rs.875 (Lumpsum)
Intermediate : Rs.900 (Per group)
Final : Rs.750 (Per group)
Student Company Secretary
Students seeking paperwise exemption for the first time (on
qualification basis) are required to remit the exemption fee @ RS.1 00
per subject in addition to the examination fee on or before the last date.
II. ELIGIBILITY FOR APPEARING IN THE INTERMEDIATE
EXAMINATION
In terms of regulation 33 of the Company Secretaries Regulations,
1982, students registered upto and including August, 2006 are eligible
to appear in both groups of the Intermediate examination to be held in
June, 2007 subject to completion of coaching and Computer Training
and fulfilment of other conditions as laid down in the regulations.
However, candidates registered as students upto and including the
month of November, 2006 are eligible for appearing in anyone group
in June, 2007 session (i.e. either in Group-lor Group-II) subject to
fulfilment of other conditions as laid down in the regulations.
III. ELIGIBILITY FOR APPEARING IN THE FINAL
EXAMINATION
In terms of regulation 43 of Company Secretaries Regulations,
1982, students who have passed/completed both groups of the
Intermediate examination upto and including June, 2006 are eligible
to appear in all the three groups or in combination thereof in any two
groups of the Final examination to be held in June, 2007 under New
Syllabus, subject to completion of coaching and fulfilling other
conditions as laid down in the regulations.
IV. LAST DATE FOR RECEIPT OF ENROLMENT
APPLICATIONS
The last date for receipt of applications for enrolment to the June,
2007 examination, complete in all respects, together with the requisite
examination fee in the Institute, is 26th March, 2007 (25th March,
2007 being a holiday). However, enrolment applications accompanied
with late fee of Rs. 100/-, if received in the Institute after the closing
date, but on or before 9th April, 2007 will be entertained.
Students who could not be enrolled in the earlier examination owing
to late receipt of enrolment application, cancellation of registration
etc. and whose examination fee was kept at credit, are advised to
send fresh enrolment applications requesting therein for the adjustment
of amount at their credit together with the balance of examination fee,
if any. Formal application along with the original letter issued by the
institute showing credit amount, must reach the Institute on or before
the closing date as otherwise such students shall not be enrolled for
appearing in June, 2007 examination.
No other remittance/letter/query should be clubbed with the
enrolment application/examination fee.
6. CLARIFICATION REGARDING PAPERWISE
EXEMPTION
(a) The paperwise exemption is granted only on the basis of
specific request received in writing from a registered student
along with the attested photocopies of marks sheets for all
parts of the Degree/examination (on the basis of which the
paperwise exemption is sought) and the exemption fee @
Rs. 100/- per paper. It is one time payment and not to be
remitted for availing of paper wise exemption in every session
of examination during the validity of registration period.
(b) The application for claiming paperwise exemption must reach
the Institute on or before the last date for submission of
enrolment application i.e. 25th March and 25th September
for June and December examinations respectively and with a
late fee of Rs. 100/-, the application can be accepted upto 9th
April and 10th October respectively.
(c) The paperwise exemption once granted holds good during
the validity of registration period or passing/completing the
examination, whichever is earlier.
(d) The paperwise exemption is cancelled only on receipt of a
specific request in writing from the student concerned on or
before the last date- for submission of the enrolment
application. If any candidate appears in the exempted paper(s)
17 February 2007
 Student Services
of examination without receiving the written confirmation from
the Institute, but by making personal representation, appeal,
request, etc., at the Examination Centre at the last moment,
his/her appearance in such paper(s) shall automatically be
treated as cancelled.
(e) It may be noted that candidates who apply for grant of paper
wise exemption or seek cancellation of paper wise exemption
already granted, before the last date of submission of
enrolment applications for a particular examination, must see
and ensure that they receive written confirmation from the
Institute at least 15-20 days prior to the commencement of
the examination. Candidates who would presume automatic
grant or cancellation of paper wise exemption without obtaining
written confirmation on time and absent themselves in any
paper(s) of examination and/or appear in the exempted
paper(s) would do so at their own risk and responsibility and
the matter will be dealt with as per the above guidelines.
(f) Exemption once cancelled on request in writing shall not be
granted again under any circumstances.
(g) The candidates who have passed either group of the
Intermediate/Final examination under the old syllabus, may
claim the paperwise exemption in the corresponding subject(s)
of new syllabus indicating the basis of exemption as APO in
the appropriate column of the enrolment application.
(h) In case the paperwise exemption has already been granted
on the basis of qualification or the candidates is eligible for
grant of exemption on the basis of securing 60% or more
marks, a photocopy of the letter/marks-sheet issued by the
Institute should be enclosed with the enrolment application
while claiming such exemption, failing which the same may
not be granted for the ensuing examination.
(i) No exemption fee is payable for availing paperwise exemption
on the basis of APO or on the basis of securing 60% or
more marks in the Institutes examination.
(i) Paperwise exemption fee is payable only when the exemption
is to be availed on the basis of qualification(s) specified for
the purpose.
7. EXEMPTION FROM COMPUTER TRAINING
A student can be exempted from undergoing the course on the basis
of his existing qualification / degree in the computer field and qualifies
the need of Course Contents Syllabus as scheduled by NIIT for C.S.
Students, subject to the condition that he or she enrolls himself / herself
for an online exemption test (to be conducted by NIIT) from any of the
NIIT Center on all India basis and successfully clears the test. .
8. COMPLETION OF COACHING AND FILLING UP
OF EXAMINATION FORMS
At times queries are received by the Institute from the students with
regard to filling up of examination forms for want of issue of coaching
completion certificate. It is clarified that students (i) who are undergoing
oral coaching, and (ii) students who have submitted or re-submitted
their response sheets and/or would be submitting or re-submitting the
response sheets within the stipulated period, are eligible to fill up the
examination forms for the respective session of examination Such
students need not withhold the submission of their examination forms
for want of coaching completion certificates. The students concerned
are advised to make a note in the application form to the effect that they
are undergoing oral coaching/have submitted response sheets and are
awaiting coaching completion certificates. Since there cannot be any
change with regard to the closing date for submission of examination
forms, students need not wait for the issue of coaching completion
certificates for filling up their examination forms. They are advised to
mention against the appropriate column in the enrolment application
form that coaching completion certificates are being awaited.
Students who were issued with limited permission letters, for
appearing in December, 2006 examination, are advised to submit the
Student Company Secretary
deficient response sheets immediately as such students, if failed, will
not be allowed to appear in June, 2007 examination, unless they are
issued with the regular coaching completion certificate(s) for the
group(s) for which limited permission letter was issued.
Students who secure 35% or more marks in aggregate and 30%
marks in individual paper in a group in December, 2006 examination,
are advised to submit photocopy of the marks sheet for the issue of
Coaching Completion Certificate, if eligible.
9. SUBMISSION OF RESPONSE SHEETS FOR JUNE,
2007 EXAMINATION
The last date for receipt of response sheets, including resubmission,
if any, from the students who wish to be enrolled for the June, 2007
examination is 28.02.2007. Students are advised to send the response
sheets to the Institute in a regular flow without waiting for the last date.
The last date mentioned above is just an indicator for students who
suitably plan their submission. This will not only give the Institute
reasonable time to get the response sheets evaluated in time but also
an opportunity to the students to resubmit the response sheets in which
they have failed to obtain a minimum of forty per cent marks. Students
are advised to get acknowledgement from the Institute for the response
sheets sent by attaching a self addressed stamped post card. It may
be noted that credit is given for the response sheets received in the
Institute on or before the stipulated due date, as above. Name of
student, registration number, subject, test paper number, number of
sheets used and postal address with PIN code number should be
written on the title sheets attached with each response sheet. The
above information may also be indicated on the first, middle and last
pages of each response sheet besides mentioning the Registration
Number on each page on the right hand corner on top. It will facilitate
early evaluation and return of the evaluated response sheets. It may
be noted that no response sheet will be entertained by the Institute in
the absence of above information. Accordingly, no credit will be given
to students of such response sheets received by the Institute.
Students are also advised to write the subjecUpaper, number of
sheets used and examination correctly on the title sheet before sending
the response sheets to the Institute. Similarly, relevant title sheets
may be appended with them. There are separate title sheets for
Foundation, Intermediate and Final course. Even when the response
sheets are sent in a bunch, complete particulars are to be given on
each title sheet and first, middle and last pages of each response
sheet. No cognizance of the response sheets will be taken if the student
fail to comply with the above instructions. It is emphasized that separate
title sheets are to be attached with each response sheet.
Students are aware that the Institute has made arrangements for
acceptance of response sheets for Foundation, Intermediate and Final
Course in its Regional/Chapter Offices in Ahmedabad, Bangalore,
Kolkata, Chennai, Delhi, Hyderabad, Jaipur, Kanpur, Mumbai, Madurai
and Pune. Students located in and around these cities are advised to
contact and submit their response sheets in the respective Regional/
Chapter offices.
10. IMPORTANT
While making any correspondence regarding examination, the
students are advised to quote the following particulars for taking prompt
action:
i) Name in full (ii) Student Registration number (iii) Stage of
examination (Intermediate/Final) (iv) Group opted (v) Centre
opted (vi) Particulars of fee remitted, i.e. Demand Draft
(printed) number, date, amount, name of the bank and its
branch (vii) Date and mode of despatch of enrolment
application and their complete address with PIN code,
telephone number, mobile number or e-mail address.
In case of any specific problem/complaint regarding registration,
post-registration, students services and postal/oral coaching, students
may contact personally or write to Sohan Lal, Joint Director and for
academic guidance and suggestions, if any, students may write to V K
Aggarwal, Principal Director, at the Institutes address.
18 February 2007
 Student Services
6. It is again emphasised that students who have already been
ATTENTION STUDENTS granted exemption in any paper included in the group for which
INTENDING TO APPEAR IN COMPANY SECRETARIES the enrolment has been sought, must indicate in the appropriate
EXAMINATION JUNE, 2007 column of the enrolment application and enclose a photocopy
1. (a) Last date for receipt of Examination 26.03.2007* of the letter issued by the Institute granting such exemption.
application in the Institute Similarly, in those cases where the student has applied for
exemption for the first time, the same must also be indicated in
(b) With a late fee of Rs. 100 09.04.2007 the appropriate column of the enrolment application form along
2. Examination fees with the attested photocopies of the relevant marks sheets and
Foundation Rs.875 (Lumpsum) the exemption fee.
Intermediate Rs.900 (Per group) 7. In case, student is interested in cancellation of exemption which
has already been granted to him, a separate request should be
Final Rs.750 (Per group) made for the same along with the enrolment application. Please
3. Last date for seeking paperwise 26.03.2007* note that once paperwise exemption is cancelled, it shall not be
exemption restored/reviewed under any circumstances.
4. Last date for seeking extension 26.03.2007* 8. No exemption fee is payable for availing of paperwise exemption
on the basis of APO (already passed under old syllabus) or
of registration/registration de-novo
securing 60% or more marks in the Institutes examination.
*(25- 03-2007 being a holiday)
XI Mode of Payment : Students who intend to pay the fees by
Notes : demand draft may please ensure that it should be crossed and
I. The examination fee stands revised as above. drawn in favour of The Institute of Company Secretaries of
India, payable at New Delhi.
II. Examination fee is payable on groupwise and not on paperwise
basis for intermediate/Final examinations. XII Students Identity Card : All the candidates appearing in the
III. All students appearing in the Intermediate examination are re- Company Secretaries Examination are advised to timely complete
quired to complete successfully the Computer Training before necessary formalities for obtaining their identity cards duly
filling up the examination form EXA countersigned by the issuing authority of the Institute as per
instructions published in the prospectus Career in Company
IV. The students who have submitted/ would be submitting all the Secretaryship A Handbook.
response sheets within the stipulated time, may submit their en-
rolment applications for appearing in the examination pending
issue/receipt of the coaching completion certificates. But coach-
ing completion certificate would be issued only when they have
successfully completed the coaching for the group(s) concerned.
V. Please note that unsigned, incomplete and applications not filled
in their own handwriting by the students will not be accepted.
VI. No change of group(s) will be allowed after submission of the
enrolment application.
VII. No request for change of medium for writing the examination will
be entertained after submission of the enrolment application.
VIII. No cutting and over writing is to be done in the examination form.
IX. No request for grant/cancellation of paperwise exemption shall
be entertained after the last date i.e. 25th March/25th September
for June/December examination respectively.
X. No request/correspondence for withdrawal of application
from appearing in the examination or adjustment of amount
for the next examination shall be entertained after submis-
sion of the examination form under any circumstances.
Students are, therefore, once again advised to fill in the enrolment
applications/examination forms EXA carefully to avoid last moment
problem for themselves as well as for the Institute.
All the students appearing in the examination are required to enclose
the photocopies of the following documents with their enrolment
application forms :
1. Certificate for completion of Computer Training issued by the re-
spective centre.
2. Letter granting the paperwise exemption (wherever paperwise
exemption has been granted on the basis of qualification).
3. Marks-sheet for availing paperwise exemption on the basis of
securing 60% or more marks in the earlier examination of the
Institute.
4. Original letter issued by the Institute showing the credit balance,
if any, for adjustment towards the examination fee.
5. Coaching Completion Certificate, if already issued from the
Institute.

Student Company Secretary 19 February 2007

 Student Services
EXAMINATION
1. DECLARATION OF DECEMBER , 2006
EXAMINATION RESULTS
Results of the Foundation Course, Intermediate and Final
examinations of the company secretaries held in December, 2006
are scheduled to be declared at 4.00 P.M. on Sunday, the 25th February,
2007. As in the past, the results will be displayed simultaneously on
the Notice Boards at the Institutes Headquarters, Offices of the
Regional Councils and Chapters, and Examination Centres. The results
along with break-up of subjectwise marks will also be available on
Institutes Website www.icsi.edu on 25th February, 2007 from 4.00
P.M. onwards.
The result-cum-marks statements will be despatched to all
candidates latest by 3rd March, 2007. Meanwhile, if there has been
any change in the mailing address of a candidate, he/she should
immediately intimate the same enclosing a self-addressed envelope
of 23 cms. x 11 cms. size for posting his/her result-cum-marks
statement at the changed address. Further, any candidate who does
not receive his/her result-cum-marks statement by 14th March, 2007,
should immediately write to the Sr. Director (Exams.) for issuing
duplicate marks statement giving relevant particulars, i.e., his/her name,
student registration number, stage of examination and group(s) in which
he/she appeared, roll number, examination centre along with a self-
addressed stamped envelope worth Rs.5/-.
2. VERIFICATION OF MARKS
In terms of regulation 46 (2) of The Company Secretaries
Regulations, 1982, as in force, a candidate can seek Verification of
Marks in any subject(s) of December, 2006 examination within one
month from the date of declaration of results. The application for
verification of marks should be made on a plain paper, in candidates
own handwriting together with requisite fee @ Rs.100/- per subject
within 30 days from the date of declaration of results, i.e., upto 26th
March, 2007 (25 th March, 2007 being holiday) . Candidates are
advised not to club any other query/matter or remittance along
with his/her request for verification of marks to facilitate an early
reply.
After completion of verification process, candidates are individually
communicated outcome of the verification of marks, normally within
2-3 weeks time. However, if a candidate does not receive any
communication by 20th April, 2007, he/she should write to the Sr.
Director (Exams.) giving relevant details (i) his/her name; (ii) student
registration number; (iii) stage of examination and roll number;
(iv) name of the subject(s) in which verification of marks was sought;
(v) date of application and mode of its despatch; (vi) amount of
verification fee and mode of its remittance, viz., Bank Draft No., date
of issue of Bank Draft, Name of drawee and drawer bank; and
(vii) complete postal address along with PIN Code.
3. JUNE, 2007 EXAMINATIONS
Next examination for the Foundation Course, Intermediate and
Final, scheduled in June, 2007, will be held from Saturday, the 02nd
June, 2007 to Sunday, the 10th June, 2007, as per the Time-Table and
Programme published on the last cover page of this issue. The last
date for receipt of enrolment application for June, 2007 examinations
in the Institute together with the requisite examination fee is 26th March,
2007 (25th March, 2007 being holiday) and with late fee of Rs.100/-
upto 9th April, 2007.
Important : Candidates should note that non-receipt/delayed
receipt of result-cum-marks statement, response to result queries,
verification of marks, etc., will not be accepted as valid and
sufficient reason for seeking any relaxation or not complying with
the requirements of regulations and/or last dates for submission
of enrolment applications for the next examinations. Therefore,
Student Company Secretary
the candidates in their own interest are timely advised to keep
track of important announcements, last dates and observe the
time schedule.
4. USE OF CALCULATORS IN EXAMINATIONS
Candidates are allowed to bring and use their own battery
operated, noiseless and cordless pocket calculators with not more
than 6 functions, 12 digits and 2 memories. Exchange or lending/
borrowing of calculators among students is forbidden in the
examination hall.
5. HINDI AS AN OPTIONAL MEDIUM FOR WRITING
THE FOUNDATION, INTERMEDIATE AND FINAL
EXAMINATIONS
Candidates are allowed to use Hindi as an optional medium for
writing all papers of the Foundation Course (except: English &
Business Communication paper) , Intermediate and Final
examinations on the following conditions:
(i) option of Hindi Medium for writing the examination is to be
exercised for all papers of an examination OR a particular group
of examination, and not for any individual paper(s) in the enrolment
application form for each term of examination;
(ii) option of medium for writing examination once exercised is
irrevocable for that particular session of examination;
(iii) answer books of candidates who write part of papers/answers in
one medium and the remaining part in other medium are liable to
be cancelled without any notice;
(iv) candidates who have exercised option of Hindi medium in their
examination enrolment form for writing Foundation Course
examination and Group-I of Intermediate examination will be
provided Question Papers printed both in English and Hindi version
(except in English & Business Communication paper which
will be printed/required to be answered in English only). The
Question Papers for Group-II of the Intermediate examination
and all papers of Final examinations will be printed in English
version only;
(v) if a candidate writes his/her answers in Hindi medium without
exercising such an option in the enrolment application form, he/
she may not be given credit for his/her answers;
(vi) candidates opting Hindi medium for the examination must write
HINDI MEDIUM in bold letters on the top of the cover page of
Answer Book No.1 OR 1B, as the case may be; and
(vii) candidates opting Hindi medium for the examination may write
answers to practical questions, headings, quotations, technical
and legal terms, sections, rules, etc., in English medium, if they
so desire.
6. AVAILING OF CONCESSION BY PHYSICALLY
DISABLED CANDIDATES FOR WRITING
EXAMINATIONS
Any physically disabled student who requires some concession
or assistance which is normally admissible under the rules for the
purpose of appearing or writing the examination, for that he/she should
make a separate written request along with his/her application for
enrolment to the examination together with the following supporting
documents :
(i) Disability Certificate issued by the Medical Board/Head of Deptt.
or Sr. Medical Officer (Specialists) of a Central or State Govt.
Hospital certifying the nature (permanent or temporary) and
percentage of disability, and its duration affecting the normal physi-
cal functions; and
(ii) Letter of Permission issued by Sr. Secondary Board/University
and/or any other professional/educational examining body, such
as UPSC, SSC, State Public Service Commission, ICAI, ICWAI,
etc., granting him/her assistance of a Scribe and/or extra-time for
writing examinations.
20 February 2007
 Student Services
THE REGISTRATION OF NEWS PAPERS (CENTRAL)
ATTENTION STUDENTS APPEARED IN RULES, 1956 (FORM IV : RULE 8)
DECEMBER, 2006 EXAMINATIONS Statement about ownership and other particulars of Student
Company Secretary
The Institute awards Merit Scholarships and Merit-cum- 1. Place of Publication : New Delhi
Means Assistance to students for pursuing Intermediate and 2. Periodicity of Publication : Monthly
Final Courses on the basis of their meritorious performance in 3. Printer's Name : N.K. Jain
the examinations and/or merit-cum-need basis on their passing Whether Citizen of India : Yes
Foundation and Intermediate examinations respectively, as per If foreigner, State the country : Not applicable
the criteria stipulated under the Merit Scholarship (Company of origin
Secretaryship Course) Scheme, 1983 and Merit-cum-Means Address : Secretary & Chief Executive
Assistance (Company Secretaryship Course Scheme), 1983. Officer, The Institute of
MERIT SCHOLARSHIP Company Secretaries of India,
In pursuance of para 7 of the Merit Scholarships (Company 'ICSI House', 22, Institutional
Secretaryship Course) Scheme, 1983, 15 numbers of scholarships Area, Lodi Road, New Delhi-
are awarded each for Intermediate and Final examinations per 110003
session only to registered students, purely in order of merit, from 4. Publisher's Name : N.K. Jain
amongst the candidates who appeared and passed in all the Whether Citizen of India : Yes
subjects of their respective examination, at first attempt, in one If foreigner, State the country : Not applicable
sitting, without claiming any exemption in any subject, on all-India of origin
basis and subject to fulfilling other terms and conditions as Address : Secretary & Chief Executive
stipulated in the said scheme. Officer, The Institute of
Company Secretaries of India,
Accordingly, students who pass the Foundation examination, 'ICSI House', 22, Institutional
December, 2006 should get themselves registered with the Institute Area, Lodi Road, New Delhi-
for pursuing Intermediate course within 3 months from the date of 110003
declaration of results to become eligible for award of Scholarship. 5. Editor's Name : N.K. Jain
MERIT-CUM-MEANS ASSISTANCE Whether Citizen of India : Yes
In pursuance of para 8 of the Merit-cum-Means Assistance If foreigner, State the country : Not applicable
(Company Secretaryship Course) Scheme, 1983, 15 numbers of of origin
financial assistance are awarded each for Intermediate and Final Address : Secretary & Chief Executive
examinations per session only to registered students. According Officer, The Institute of
to the scheme, a candidate has to apply in the prescribed form Company Secretaries of India,
obtainable from the Institute, and submit his/her application within 'ICSI House', 22, Institutional
a specified date as notified from time to time. Any candidate Area, Lodi Road, New Delhi-
applying for financial assistance should have passed the 110003
Foundation/Both Groups of Intermediate examination, at first 6. Name and Address : Not applicable
attempt, in one sitting, without claiming exemption in any subject. of individual who Official journal of the
If the candidate is employed or having an independent source of own the newspaper Institute of Company
income, in that case his/her income should not be more than and partners or Secretarties of India
Rs.1,50,000/- per annum and if he/she is dependent on his/her shareholers holding
parents/guardian/spouse, then the combined income from all more than one per cent
sources should not be more than Rs.2,50,000/- per annum and of the total capital
also subject to fulfilling other terms and conditions as stipulated in I, N.K. Jain, hereby declare that the particulars given above are
the said scheme. true to the best of my knowledge and belief.
Sd/-
Students who pass the Foundation examination, December,
N.K. JAIN
2006 must get themselves registered with the Institute for pursuing
Date : 15th Feb., 2007 Signature of the Publisher
Intermediate Course within 3 months from the date of declaration
of results to become eligible for award of this financial assistance.
A separate notification inviting applications for award of Merit-
cum-Means Assistance will be published in the March/April and OPENING OF NEW EXAM. CENTRES AT KOLHAPUR AND
September/October issue of C.S. Foundation Course Bulletin SRINAGAR FOR CS EXAMINATIONS
and Student Company Secretary Bulletin.
The Institute is pleased to announce opening of two new
Examination Centres at following places for conduct of 'Company
E-MAIL ADDRESS OF THE STUDENTS Secretaries' examinations for the next three sessions to be held in
June, 2007, December, 2007 and June, 2008 purely on
Those students who are having e-mail address may communicate experimental basis:
the same to the Students Services Section at dss@icsi.edu which
will facilitate quick and economic communication from the Institutes Sl No. Place Centre Code
side. The e-mail address may be sent in the following format. 1. Kolhapur 417
2. Srinagar (J&K) 227
Name : Accordingly, students are welcome to opt for the new Examination
Registration No. : Centre in their enrolment applications for appearing in the
E-mail Address : forthcoming examinations.

Student Company Secretary 21 February 2007

 Quiz - Prize Winners
STUDENTS QUIZ
PRIZE QUERY
AB Limited is controlled by two groups headed by C and D.
Differences arose between C and D in management of AB
Limited and this difference landed before the Company Law
Board (CLB) for adjudication. At the intervention of CLB, a
settlement was reached between C and D. This settlement was
incorporated in the Order of the CLB. Subsequently the
settlement was not implemented. C applied to CLB for
enforcing the implementation of the settlement while D applied
for the recall of the order of CLB. CLB refused to enforce the
settlement. Is CLB right in refusing to enforce the
implementation of its order?
CONDITIONS
1. Answer should not exceed one page typed in double space.
The answer sheet should contain the name, registration number
and address of the student.
2. Last date for receipt of answer is 16th March, 2007.
3. Two prizes (a first and a second) in kind will be awarded to the
best answers and the names of the contributors will be published
in the Bulletin.
4. The envelope should be superscribed Students Query,
February 2007 and addressed by name to N.K. Jain, Secretary
& Chief Executive Officer, The Institute of Company
Secretaries of India, ICSI House, 22, Institutional Area, Lodi
Road, New Delhi-110003.
QUIZ - PRIZE WINNERS
September 2006
QUERY
A company issued bonus shares from out of revaluation
reserve. The Articles of Association of the company authorized
such an issue. Is such an issue of bonus shares valid in law?
WINNERS
First Prize
T.S.Anandhi (SR0257791/02/2003) S-3, Sangath Apartments
MGR Nagar 1 Street, Velachery, Chennai 600042.
Second Prize
J. Swaminathan (CR0329949/06/2007), 115, I Floor, Luz Church
Road Mylapore, Chennai 600 004.
ANSWERS
First Prize
There is a conflicting view between the Courts and Department of
Company Affairs* and SEBI regarding issue of bonus shares out of
revaluation reserve. In respect of listed companies SEBI (Disclosures
and Investor Protection) Guidelines, 2000 clearly lays down that bonus
shares cannot be issued out of reserves created by revaluation of
fixed assets. Department of Company Affairs has vide its Circular No.9/
94 dated 6.9.1994 has prohibited private/closely held and unlisted
companies from issuing bonus shares from reserves created out of
revaluation of fixed assets.
However, in a similar case of Bhagwati Developers v. Peerless
General Finance & Investment Co. and others ( 2005) 5 Comp LJ 377
(SC); (2005) 62 SCL 574 (SC) the company intended to capitalize
reserves by issuing bonus shares out of revaluation reserve and at a
meeting of the company a resolution to this effect was passed. One
share holder challenged the issue of bonus shares out of revaluation
reserve which was rejected by the Hon'ble High Court. The appellant
* Now Ministry of Company Affairs.
Student Company Secretary
appealed to the Hon'ble Supreme Court.
The Hon'ble Apex Court upheld the issue of bonus shares and
reasoned that the issue of bonus shares out of revaluation reserve is
valid. Section 205(3) of the Companies Act, 1956 provides for
capitalization of profits or reserve of a company for the purpose of
issuing fully paid up bonus shares or paying up any amount for the
time being unpaid on any shares held by the members of the company.
The Companies Act does not specifically prohibit utilization of reserve
arising out of the revaluation of assets for purpose of issuing fully paid
up bonus shares.
Now Ministry of Company Affairs
It was clear that the words 'available for dividends' as appearing in
the articles of the company, would be applicable to all categories.
Therefore, the Hon'ble High Court was wrong in concluding that these
words only applied to the last category, that is, funds of the company
or in the hands of the company. However, it must be seen that the
word 'dividend' wherever it appears in the articles of association also
includes 'bonus'. Thus the words 'available for dividends' would
necessarily mean 'available for dividend/bonus'.
Article 182 of the company provides that where the law permits
issuing of bonus shares from appreciation of value in the capital assets,
the same could be done. The proviso to sub section (3) of section 205
also permits capitalization of profits or reserve of a company for the
purpose of issuing fully paid up bonus shares or paying up any amount
for the time being unpaid on any shares held by the members of the
company. Clearly, the Companies Act specifically permits utilization of
reserve arising out of the revaluation of assets for purpose of issuing
fully paid up bonus shares.
Thus it can be observed that while the executive has one view on
the issue the judiciary has another view on the same. It is also a
question as to who should be the competent authority to interpret the
law enacted by the Parliament. It is also a wider question to be
examined as to whether SEBI and DCA can frame rules and regulations
in conflict with the Companies Act. Since the word reserve as mentioned
in the Companies Act gives rise to different definitions and is not
specifically defined in the concerned section, the same has led to the
above conflicts. In all such cases the right forum to decide the issue
would be the judicial review of the law, rules and regulations. But it is
not known whether all these issues were agitated before the Hon'ble
Supreme Court. It is submitted that a clear decision on the issue should
be taken after the SEBI, DCA and concerned companies make their
submission in this regard.
However, as a judicial precedent has been set and all laws, rules
and regulations enacted are subject to judicial review and the view of
the Hon'ble Supreme Court in the matter is final, it can be concluded
that in the above case the company can issue bonus shares out of the
revaluation reserves.
Second Prize
The Law permits issue of bonus shares out of revaluation reserve
of the company.
Provisions Applicable : The said issue is dealt under Section 205(3) of
the Companies Act, 1956 and which is subject to the provisions of the
Articles of Association of the company.
Reasons : The Companies Act, 1956 specifically permits utilization of
reserve arising out of revaluation of assets for the purpose of issuing
fully paid up bonus shares. In this regard, sub section (3) of section 205
permits capitalization of profits or reserve of a company for the purpose
of issuing fully paid up bonus shares or paying up any amount for the
time being unpaid on any shares held by the members of the company.
The said issue has been recently dealt with by the Supreme Court
hence reliance is also placed on the following judgment of the Supreme
Court:
Bhagwati Developers v. Peerless General Finance and Investments
Company and others [2005] 5 Comp LJ 377 (SCC).
24 February 2007
 Quiz - Prize Winners
In this case the matter was before the Supreme Court as a result
of an appeal from the orders of the High Court which considered the
issue of bonus shares out of revaluation reserve as legally valid. The
Supreme Court upheld the order of the High Court by placing reliance
on the following points:
a. The word 'dividend' wherever it appears in the articles also includes
'bonus', and thus the words available for dividends would
necessary mean "available for dividends/bonus.'
b. The term 'available for dividends' would be applicable to all
categories.
c. Thus the High Court was wrong in concluding that these words
only apply to the funds of the company.
d. The Supreme Court also pointed out that the High Court was right
in concluding that, as per Article 182 of Articles of Association there
is nothing to prohibit the company from issuing bonus shares.
Apart from complying the provisions of section 205(3) of the Companies
Act, 1956 the Articles of Association of the company must contain a
provision for the issue of bonus shares out of revaluation of reserves.
October 2006
QUERY
A public limited company procured plain glazed creamic duty
paid tiles and processed them into decorated glazed ceramic wall
tiles by applying drying and colouring processes. The Department
of Central Excise considered the processing done by the public
limited company amounted to manufacture and levied excise duty
on the finished product. Is the action of the Department Correct
in Law?
WINNERS
First Prize
T.S. Anandhi (SR0257791/02/2003) S-3, Sangath Apartments, MGR
Nagar I Street, Velachery, Chennai 600 042
Second Prize
R.Pattu Rathi (SR0246083/09/2002) 5/286, Annai Indhira Nagar I
Street, Tuticorin, Tamilnadu-628002
ANSWERS
First Prize
The question of what would amount to 'manufacture' which is the
heart of the excise law has been agitated many times before the judicial
forum. However, by design or otherwise the Act has not defined the
term 'manufacture'. The Department in its quest to increase the revenue
tries to classify each and every process as manufacture and levies tax
on the same. On the other hand the manufacturers try to wriggle out
of the same by trying to convince the Department that the process
does not amount to manufacture. Many a time the issue has been
elevated to the highest judicial body of the country to obtain a ruling
on the issue and to decide what amounts to 'manufacture'. The definition
of the term 'manufacture' is very important as only then the Department
would be able to levy excise duty on the goods. In addition, the term
'salability' is also important. In the land mark judgement of UOl v. Delhi
Cloth and General Mills case (ELT-1977-J.199) the Hon'ble Supreme
Court succinctly explained what constitutes manufacture. Manufacture
implies a change but every change is not a manufacture and yet every
change in an article is the result of some treatment, labour and
manipulation. For manufacture something more is necessary. There
must be transformation and a new article must result, having a distinct
name, character or use.
It is, by now, well settled that a product can be construed as
manufactured if and only if it emerges as a result of changes on the
inputs and such changes have brought in new characteristics or use
or name as against the inputs themselves. Mere value addition through
a process would not tantamount to manufacture.
In a similar case of Commissioner of Central Excise v. Pan Pipes
Student Company Secretary
Resplendents Ltd. (JT 2006 (2) SC 562) the company procured duty
paid plain ceramic glazed tiles and processed them into decorated
glazed ceramic wall tiles by applying drying and colouring processes.
The Department considered these process as manufacture and
demanded excise duty from the company. The company argued that
the processes applied by it was not amounting to manufacture. The
case reached the Hon'ble Supreme Court for final adjudication.
The Hon'ble Apex Court held that the point which falls for
consideration in this case is whether printing/decorating duty paid plain
glazed ceramic tiles amounts to manufacture or not. The process for
amounting to manufacture must be one which brings into being a new
substance known to the market. Manufacture implies a change but every
change is not a manufacture and yet every change in an article is the
result of some treatment, labour and manipulation. For manufacture
something more is necessary. There must be transformation and a new
article must result, having a distinct name, character or use.
These conditions were not satisfied in the instant case because
ceramic glazed tiles remain ceramic glazed tiles even after the process
of printing and decorating. Transformation of a product must be such
that it becomes commercially different commodity to attract central
excise duty and unless a new and distinct article known commercially
to the market emerges, the process would not amount to manufacture.
In the present case no distinct commodity came into being as a result
of process carried out. The contention of the Department that ceramic
glazed tiles which are subject to printing and decoration would be
commercially useless but for the process carried out was not right. In
the present case the decorated glazed ceramic wall tiles after their
decoration did not change their basic character viz. glazed tiles and
therefore did not undergo a process of manufacture.
Therefore, it can be concluded that the action of the Department in
considering the processing of drying and colouring of the plain glazed
ceramic wall tiles by the company as amounting to manufacture and
levying of excise duty on the finished product will not stand judicial scrutiny.
Second Prize
The case in question calls for consideration whether printing/
decorating duty paid plain glazed ceramic tiles amounts to manufacture
or not. The factum probans (relevant facts) and causa (circumstances)
of the given query are exactly similar to those of the recent Supreme
Court decision in Commissioner of Central Excise v. Pan Pipes
Resplendents Ltd [JT 2006 (2) SC 562] Ashok Bhan & C. K. Thakker,
11. [Decided on 1.12.2005].
In this case : (i) The respondent (assessee) procured plain glazed
ceramic duty paid tiles and by applying drying and colouring processes
converted them into decorated glazed tiles. (ii) The appellant
considered the processes done by the assessee as manufacture and
levied excise duty on the finished product. (iii) The respondent
challenged the duty denying that the process applied to it does not
amount to manufacture.
When the matter finally came up before the Supreme Court it
dismissed the appeal on the following grounds: a) As manufacture is
the focal point in determining levy of excise duty it is essential to find
out whether the process is a manufacture or not. b) Manufacture implies
every change but every change is not manufacture; and yet every
change of an article is the result of treatment, labour and manipulation.
But something more is necessary and there must be a transformation.
c) A product can be construed as manufactured if and if only it emerges
as a result of changes on the inputs and such changes have brought
in new characteristics or use or name as against the inputs themselves.
d) Mere value addition through a process would not tantamount to
manufacture.
In the Instant case these conditions are not satisfied as no distinct
article known to the market emerges as a result of the process carried
out by the respondent.
Applying the ratio of the above cited case to the case in question it
can be concluded that the action of the Department of Central Excise
is against the law and incorrect.
25 February 2007
 News and Announcements
NEWS AND ANNOUNCEMENTS
EASTERN INDIA REGIONAL CONCIL
BHUBANESWAR CHAPTER
CAREER AWARENESS PROGRAMMES
The Chapter organized a series of Career Awareness Programmes
from 30.11.2006 to 09.12.06 at Bhubaneswar Chapter and other
neighbouring places covering four districts i.e. Cuttack, Puri, Khurda &
Nayagarh, wherein I.J. Kalucha, Consultant, the ICSI was the main
speaker in all the programmes. Kalucha during his visit conducted 38
career awareness programmes/activities including 8 programmes in
schools, 20 programmes in colleges, Meeting with Prof. L.N.Mishra,
Vice Chancellor, Utkal University, Meeting with the HOD & Faculty
members of P.G. Department of Commerce, Utkal University,
Bhubaneswar, 7 meeting with the Principals & Faculty Members of
Schools/Colleges and inaugurated one Accredited Oral Tuition Centre
of the ICSI for CS Foundation Course at Nayagarh Autonomous College,
Bhubaneswar. The Chapter was represented by U.C.Mishra, Chapter
Official in all the aforesaid activities. The number of participants taken
together in all the career awareness programmes was more than 3000.
CELEBRATION OF BASANT PANCHAMI
On 23.1.2007 the Chapter celebrated Basant Panchami Puja of
Devi Sarswati at its premises amidst the presence of the students and
members of the Chapter. The Chapter office was colourfully decorated
by the students on the day. The Chapter office was opened whole day
for visit of the students, members and others and for offering prayer to
Goddess Saraswati. On 25.1.2007, Goddess Sarswati was taken for
immersion to the river Kuakhai.
INAUGURATION OF COLLABORATIVE ORAL
COACHING CENTRE AT NAYAGARH AUTONOMOUS
COLLEGE, NAYAGARH, ORISSA
On 9.12.2006 the ICSI Collaborative Oral Coaching Centre was
inaugurated at Nayagarh Autonomous College, Nayagarh, Orissa by
I.J. Kalucha, Consultant, the ICSI. The function was attended by a
large number of students and teachers of various faculties.
NORTHERN INDIA REGIONAL COUNCIL
TALK ON HOW TO PREPARE FOR EXAMINATIONS
On 7.12.2006 the Regional Council organised a talk on the above
topic at ICSI-NIRC Auditorium, New Delhi. Guest speaker J.K. Bareja,
FCS shared with the students valuable tips about the material to be studied,
how it is to be studied, how to read the question paper and write the
answers to the questions and what are the Dos and Donts in the
examination hall. Bareja also replied the queries raised by the students.
A.K. Srivastava, Executive Officer of the Regional Office in his
motivational and enthusiastic address explained the profile of a
company secretary in the corporate sector. The programme was
attended by more than 150 students.
CAREER AWARENESS PROGRAMMES
On 3.12.2006 the Regional Council conducted a Career Awareness
Programme at Non-Collegiate Womens College, Rohini, Delhi. Again
on 22.12.2006 a Career Fair was organised at Vivekanand College,
Vivek Vihar, Delhi. Guest speakers in the first institution were J.K.
Bareja, FCS; Swati Patil, ACS and A.K. Srivastava, Executive Officer
of the Regional Office. K.K. Narula, Administrative Officer of the
Regional Office addressed the Career Fair in the second institution. A
good number of students attended the Career Awareness Programme/
Career Fair. During the programmes the students were apprised about
the mode of registration in the CS course, syllabus, structure of the
course and also the avenues available to the profession both in
employment and in practice. Pamphlets explaining Career in Company
Secretaryship Course were also distributed to the students.
AGRA CHAPTER
CAREER BUILDING PROGRAMME
On 7.1.2007 the Chapter conducted a Career Building Programme.
Student Company Secretary
The speakers were Om Prakash Mutha, Chairman NIRC, Hitender
Mehta, Secretary, NIRC and S. Koley, Member, NIRC. After the
inauguration of the programme Om Prakash Mutha in his address to
the students gave important tips to them. He said that the syllabus of
the company secretaries course has been designed to produce
Corporate Executives. Efforts are being made to upgrade the course
contents so that the product of the Institute becomes a Specialist
Manager. He emphasized the need of hard work, regularity and
sincerity while pursuing studies. Admitting that the coaching facilities
are a necessary part of studies, he insisted that a student must read
the lesson first and then revise also after taking a tuition. Then only
the depth of the subject can be understood and learnt. He explained
to the students that the e-governance initiative of the Government has
opened new avenues for the company secretaries, which has led to
the development of the profession. He proclaimed that the industry is
ready to welcome fresh company secretaries with attractive packages.
Therefore, the students must take up the course very seriously and
not as a part time course. He said although he himself was a Chartered
Accountant and a Cost Accountant also but he had no hesitation in
admitting that the course contents of CS is undoubtedly the best. He
also tactfully dealt with various queries of the students.
Hitender Mehta felt that company secretaries are liked by the
industry as a Compliance Officer now due to their depth of knowledge.
Mehta informed the students that with the adoption of e-governance
by the WTO Regime, young Indian professionals will have the
opportunity to invade 150 countries.
Koley lured the students towards the glory of professional practice.
He said that MCA-21 has opened wide scope for C.S. Practice.
JAIPUR CHAPTER
CAREER AWARENESS PROGRAMMES
The Chapter conducted Career Awareness Programmes at different
places of Rajasthan from 18.12.2006 to 23.12.2006 which were as
under : On 18.12.2006 the Career Awareness Programmes were held
at Govt. Dunger College,M.S.Girls Govt. College and Jain Girls College
at Bikaner. About 250 students attended the programmes.
On 19.12.2006 the Career Awareness Programmes were held at
B.J.S. Rampuria College and Shree Nehru Sarda Peeth at Bikaner.
About 150 students attended the programmes.
On 20.12.2006 the Career Awareness Programmes were held at
Suratgarh Degree College, Govt. College,Rathi Public Senior
Secondary School, Saraswati Bal Mandir Higher Secondary School,
Sharma Bal Mandir Higher Secondary School, Priya Darshan Public
School and Tagore Central Academy Sr.Secondary School all at
Suratgarh. About 700 students attended the programmes.
On 21.12.2006 the Programmes were held at MD Girls College
and Saheed Bhagat Singh College at Raisingh Nagar and at Gyan
Jyoti College and Gyan Jyoti Sr. Secondary School at Sri Karanpur.
About 500 students participated in the programmes.
On 22.12.2006 the Programmes were held at Govt. College and
Choudhary Ballu Ram Godara Girls College at Sri Ganganagar.
Around 350 students attended the programmes.
On 23.12.2006 the Career Awareness programmes were held at
M.D. College, S.G.N. Khalsa College & Seth G.L. Bihani Sanatan
Dharam College at Sriganganagar. More than 500 students
participated in the programmes.
In one such programme ICSI Corporate Kit was presented to the
Vice Chancellor of Bikaner University.
KANPUR CHAPTER
COMMENCEMENT OF ORAL COACHING CLASSES
On 6.1.2007 the Council organized the inaugural function on the
eve of commencement of Oral Coaching Classes of Intermediate both
groups for the session ending June, 2007 at its premises. Dr. A.S.
Bhatnagar, HOD, VSSD Law College, Kanpur inaugurated the classes.
In his address Dr. Bhatnagar said that he was associated with Kanpur
Chapter for last around 20 years as faculty member. He felt proud as
his students were elected as office bearers of the Chapter. As Chapter
has been adjudged for the best Chapter of the Institute, continuously
26 February 2007
 News and Announcements
for four times. He advised the students to work hard and plan their and Andhra Pradesh. Another write up about the course has been
study. First they should be very clear in their minds about the objective published in Dinamani, a leading Tamil daily in Elaignar Mani dated
goal which they propose to pursue and second they should put in all 22.1.2007 arranged by SIRO.
efforts to achieve that objective. He wished them all a grand success. TENTH TRAINING ORIENTATION PROGRAMME
Vineet Tripathi, Chapter Chairman briefed the students about the On 8.1.2007 the Regional Council organized the inaugural session
scope of the profession. He informed them about the position, functions of the 10th Batch of Training Orientation Programme at ICSI SIRC
and responsibilities of a company secretary in employment as well as House. Sarah Arokiaswamy, Deputy Director, SIRO & Programme
in practice also. Coordinator, apprised the participants about the structure and importance
S.N. Agarwal, Fellow Member informed the students that they of attending Training Orientation Programme. She advised the
have to keep in mind two things to be successful in their endeavor in participants to be punctual, comply with administrative formalities while
any area. Without hard & sustained labour, nothing can be achieved attending the training. On 12.1.2007 at the Valedictory Session of the
in life. Since they have decided to join the CS course, which is a right Training Orientation Programme Sarah Arokiaswamy, congratulated
decision, they should now pursue their studies with all sincerity to be the trainees on their successful completion of Training. She advised
successful in the shortest possible time. the participants to register with The ICSI for undergoing Management/
Vibha Mehrotra, Fellow Member informed the students and the faculty Apprenticeship Training. She also informed the trainees about various
members that they are free to contract for any type of problems and programmes and coaching sessions organized by SIRO for the benefit
suggestions if any for the improvement of the standard of Kanpur Chapter. of Company Secretaryship students and advised them to make use of
the same. The 10th TOP was attended by 14 participants.
Ajai Kumar Sharma ACS informed the students that the Chapter
has well equipped library, good faculty members and cooperative staff. BANGALORE CHAPTER
He advised them to become library member and suggest the CAREER AWARENESS PROGRAMME
Committee for purchase of new books. K.L. Kushwaha, Chapter official On 5.12.2006 the Chapter organised a Career Awareness
advised the students to refer to Student Company Secretary bulletin Programme at Aurobindo PU College, Shimoga. V Devendra, Acadamic
December 2006 regarding compulsory computer training scheme. On Director and Secretary, K Nagaraj, Principal, M Srikanth Hegde,
the occasion time table was also circulated among the students. Principal (High School) of Aurobindo PU College & High School were
SOUTHERN INDIA REGIONAL COUNCIL present during the programme. Over 200 students of Science,
Commerce and Arts streams attended the programme.
FOUNDATION/INTERMEDIATE COURSE ORAL P.K. Pande, Chairman, Oral Coaching and Students Facilities and
COACHING CLAS SES FOR DECEMBER 2007 Library Audit and Disposal Sub-Committee, Bangalore Chapter of the
EXAMINATIONS ICSI, explained in detail the course offered by the Institute and the
criteria for eligibility for the course, examination, requirements of training
The SIRC of the ICSI proposes to conduct Foundation/ etc. He also highlighted the importance of making the right career
Intermediate (Both Groups) Oral Coaching Classes for December choice so as to be successful in life. He then spoke about the role of a
2007 Examinations as per details given below : Company Secretary and importance of the profession of Company
Secretary in the changing economic scenario. He also highlighted the
State Date of Timing Fees Last date for opportunities available to anyone who has completed the Company
commence- receipt of Secretaryship course. He further enumerated the emerging areas of
ment application practice and the changing role of a Company Secretary. He also
Foundation 23.07.2007 9.00 A.M. Rs. 3000/- 16.07.2007 focused on what would be the mindset and preparation required from
(Morning) to a student who wanted to pursue the Company Secretaryship Course.
Pande also clarified the various doubts and issues those were raised
11.00 A.M.
by the participants and thanked the management for providing the
Foundation 23.07.2007 4.00 P.M. Rs. 3000/- 16.07.2007 Institute this opportunity. Brochures containing brief details of the
(Evening) to Company Secretaryship Course were distributed to the participants.
6.00 P.M. INAUGURATION OF ORAL COACHING CLASSES
Intermediate 02.04.2007 6.30 A.M. Rs. 3350/- 26.03.2007 On 8.1.2007 the 23rd batch of Foundation Course and 41st batch of
Group-II to per group Intermediate Course Oral Coaching Classes of the Bangalore Chapter
(Morning) 8.30 A.M. was inaugurated at a Students Meet held at St. Joseph Indian High
School. Prof. J. Subramanian, Dean, Faculty of Commerce &
Intermediate 02.04.2007 6.00 P.M. Rs. 3350/- 26.03.2007
Management, Christ College, Bangalore was the Chief Guest who
Group-I to per group inaugurated the Oral Coaching Classes. In his address Prof.
(Evening) 8.00 P.M. Subramanian, focused on the importance of planned and systematic
For further details please contact: study and approaching the process of learning as a continuous process
SIRO of the ICSI, New No. 9, Wheat Crofts Road, and not merely an exam oriented one. He also emphasized that the
Nungambakkam, Channai-600034 fact that would ensure one in being effective would be how well one
Phone : (044) 28279898; 28268685 was conversant with the Law and especially the latest amendments
e-mail: siro@icsi.edu; icsisirc@md3.vsnl.net.in and their effect/implications. He cautioned the students to become a
true professional and not a professional of a profession and to be
COMMENCEMENT OF ORAL COACHING CLASSES solution providers and facilitator of business rather than being spoke
in the wheels of the plans of the Management. G.V. Srinivasa Murthy,
On 8.1.2007 the SIRO of the ICSI commenced Oral Coaching Secretary, Bangalore Chapter of the ICSI also addressed the students
Classes for Intermediate Group I (Morning) and Group II(Evening) for and emphasised on the importance of having the right attitude, hard
June 2007 examinations at ICSI-SIRC House, Chennai. work and reading.
WRITE UP ON COMPANY SECRETARYSHIP COURSE COCHIN CHAPTER
The SIRO of the ICSI released a comprehensive write up about INAUGURATION OF ORAL COACHING CLASSES
the Company Secretaryship Course in a leading Tamil weekly Ananda
Vikatan in its issue dated 10.1.2007. The above weekly is having the On 30.1.2006 the Intermediate and Foundation Course Oral
largest circulation in Tamilnadu and it is having wide readership abroad Coaching Classes conducted by the Chapter was inaugurated at its
also. The SIRO has been receiving a number of letters from various premises. K.O. Kuriachan, Chairman inaugurated the Coaching
parts of interior Tamilnadu and also from adjoining states - Karnataka Classes. A.A. Varghese and A. Sivadasan, Managing Committee

Student Company Secretary 27 February 2007

 News and Announcements
members addressed the gathering and explained about the importance
of the CS course as well as the future scope and opportunities. On
the occasion, Rajesh the youngest member of the Institute from Kerala,
having passed the final course at the young age of 20 years was
felicitated. Rajesh also addressed the students. The session was
attended by a good number of students and parents.
COIMBATORE CHAPTER
INAUGURATION OF ORAL COACHING CLASSES
On 3.1.2007 the Chapter inaugurated the Oral Coaching Classes
for the June 2007 session for Foundation, Intermediate Group-I &
Group-II. V.S.Subash, Practising Company Secretary, C.Subramaniam,
Company Secretary, Shanti Gears Ltd., G.Vasudevan, Practising
Company Secretary and G.Balasubramaniam, Company Secretary,
Roots Multi Clean Ltd., addressed the students on the importance of
Company Secretary in the Corporate Scenario and gave a detailed
account of the course contents, training requirements, employment
opportunities etc.
HYDERABAD CHAPTER
FOUNDATION/INTERMEDIATE COURSE ORAL
COACHING CLAS SES FOR DECEMBER 2007
EXAMINATIONS
From 9.4.2007 onwards fresh batch of Foundation/
Intermediate course Oral Coaching Classes will be conducted
by the Chapter for December 2007 examinations as per the
following schedule.
Foundation Course
Timings : 06.30 P.M. to 08.30 P.M.
Fees : Rs. 2750/-
Venue : Sujatha Degree College for Women, Chapel Road, Abids,
Hyderabad
No. of Lectures : 150 lectures each of 2 hrs. duration
Intermediate Gr. I
Timings : 07.00 A.M. to 09.00 A.M.
Fees : Rs. 2750/-
Venue : The ICSI-Hyderabad Chapter # 6-3-609/5, Anandnager
Colony, Khairatabad, Hyderabad-500 004
No. of Lectures : 96 lectures each of 2 hrs. duration
Intermediate Gr. II
Timings : 06.30 P.M. to 08.30 P.M.
Fees : Rs. 2750/-
Venue : Sujatha Degree College for Women, Chapel Road, Abids,
Hyderabad
No. of Lectures : 96 lectures each of 2 hrs. duration
Intermediate Gr. I & II
Timings : 09.15 A.M. to 01.30 P.M.
Fees : Rs. 4750/- (Both Groups)
Venue : The ICSI-Hyderabad Chapter # 6-3-609/5, Anandnager
Colony, Khairatabad, Hyderabad-500 004
No. of Lectures : 192 lectures each of 2 hrs. duration
Interested candidates are advised to deposit the fee by
Challan at the Chapter Office by 5th April 2007. The students
who undergo Oral Coaching, pass the Eligibility Tests and get
the Coaching Completion Certificates, need not to submit the
response sheets under postal tuition scheme. For further details
the students are advised to contact the Chapter at the above
address. Telephone Nos. 040-23399541, 040-23396494. Fax :
040-23325458. E-mail: Hyderabad@icsi.edu
EIGHTH ACADEMIC DEVELOPMENT PROGRAMME
On 20.1.2007 the Chapter organized the 8th Academic Development
Programme on Drafting of Notices, Resolutions, Minutes etc. at its
premises. B. Pavan Kumar, Company Secretary in Practice in his
address explained drafting of minutes, resolutions and notices, pre-
requisites of drafting, General principles of drafting. Use of appropriate
words and phrases, points to remember, provisions relating to notices,
resolutions &minutes, Notice Ordinary business, Notice-special
business, Notice-Explanatory Statement, Notice-Special resolution,
Specimen Notice of AGM, explanatory statement pursuant to the
Student Company Secretary
provisions of section 173(2) of the Companies Act, 1956, minutes of
board meeting, specimen minutes, specimen resolutions, resolution
for enhancement of authorized share capital, resolution for rights issue,
resolution for increase of remuneration of MD/WTD and resolution for
commencement of new business.
MEDITATION PROGRAMME
On 26.1.2007 the Chapter organized a meditation programme for
students at its premises. The programme was conducted by Dr. Trilok
Kumar, after School Centre for Social Entrepreneurship, Bikaner. The
programme was attended by 40 students who stated that they were
immensely benefited by attending the programme.
CAREER AWARENESS PROGRAMMES
On 10.1.2007 the Chapter organized a Career Awareness
Programmes at Shyamala Devi Degree College for Women and on
23.1.2007 at Scholors Degree College, Hyderabad. R. Chandra Sekhar,
Executive Officer explained the importance and opportunities available
for the company secretaries and advised the students to take up the
course. Around 200 students participated in the above programme.
THIRUVANANTHAPURAM CHAPTER
STUDENTS MEETING WITH CHAPTER CHAIRMAN
On 14.1.2007 the Chapter organised a student meeting at its
seminar hall. T.R. Narayanan Nair, Chapter Chairman while addressing
the students of the Chapter highlighted the role of the students in
reviving and vitalizing the Chapter. A good interaction took place
between the Chairman and the students.
WESTERN INDIA REGIONAL COUNCIL
AHMEDABAD CHAPTER
INAUGURATION OF INTERMEDIATE GROUP I ORAL
COACHING CLASSES
On 4.1.2007 the Chapter inaugurated the Intermediate Group I
Oral Coaching Classes conducted by the Chapter. The batch of more
than 100 students was inaugurated by Dr. Harish Oza, Head,
Commerce Department, Gujarat University and Director School of
Commerce, Gujarat University. Dr. Oza briefly explained the students
the importance of profession and methodology for preparation of
professional examinations. Chirag Shah, Chapter Secretary also
explained the students the seriousness of the hour and importance of
adoption of professional conduct towards professional studies.
THANE CHAPTER
INTERMEDIATE GROUP II ORAL COACHING
CLASSES
W.e.f. 2.7.2007 the Chapter intends to commence next batch
of Oral Coaching Classes for Intermediate Group II students.
For further details contact the Chapter Office at 206, Swastik
Plaza, 2nd Pohkran Rd (Subash Nagar), Prior to Voltas Ltd., Thane
(W) 400 601.Phone:25444479;e-mail: rrajguroo@yahoo.co.in
VADODARA CHAPTER
MEETING WITH STUDENTS
On 29.1.2007 the Chapter in its endeavor to provide best possible
services to the student community organized a meeting with the students
at its premises. The basic objective of the meeting was to get the feed
back on the oral tuition classes which have started recently and also to
get the pulse of students on any problem that they are facing relating to
their studentship and while undergoing Oral Tuition during the current
term. A large number of students attended the meeting and gave their
candid feedback on the performance of the Oral Tuition Classes and
also raised various queries on their studentship which were addressed
to their satisfaction. Students also gave various suggestions for improving
the students infrastructure at the Chapter including those for purchase
of new books, keeping the Chapter premises open on Holidays prior to
examination, increase in duration of lectures and extra lectures etc. All
the suggestions were noted and assurance given that attempts shall be
made to provide them the best. Other than the students the managing
committee members of the Chapter and WIRC representatives were
present during the interaction.
28 February 2007
 SMTP ORGANISED BY H.Q./REGIONAL COUNCILS/CHAPTERS
ELIGIBILITY OF PARTICIPANTS : ICSI final passed candidates. SMTP COURSE CONTENTS : Module I-Filling and Filing of Forms under
the Companies Act, 1956. G Module II-Practical and Procedural Aspects of Convening and Conducting Board Meetings & Annual General
Meetings and Related Aspects. G Module III-Managing Public Issues. G Module IV-Loan Documentation, Joint Ventures & Foreign
Collaborations, Raising Finance through EURO Issues & Export and Import Procedures and Documentation. G Module V-Practical and
Procedural Aspects relating to Appearance before CLB/Under SICA, Consumer Protection Act and Case Studies in RTP/UTP. In addition, the
participants would be exposed to case studies and mock board/general meeting, etc.
Organised by Dates & Duration Venue of Programme Contact Address
EIRC of 23.04.2007 EIRO Premises Executive Officer, EIRO of the ICSI, ICSI-EIRC Bldg., 3-A, Ahiripukur 1st
the ICSI to Lane, Near Beck Bagan Nursing Home, Kolkata-700019 Tel. : 22832973/
09.05.2007 22816541 Fax No. : 033-22816542 E-mail : eiro@icsi.edu
SIRC of 14.03.2007 SIRC Premises Deputy Director SIRC of the ICSI, SIRC-ICSI House No. 9, Wheat Crofts
the ICSI to Road, Nungambakkam, Chennai-600034 Tel. : 044-28279898/28268685
30.03.2007 Fax No. : 044-28268685 E-mail : siro@icsi.edu/icsisiro@md3.vsnl.net.in
Bangalore 12.03.2007 Chapter Executive Officer & Programme Coordinator, Bangalore Chapter of the SIRC
Chapter of to Premises of the ICSI Sheriff Chambers, 3rd Floor, Rear Block, 14, Cunningham Road,
SIRC of the 29.03.2007 Bangalore-560 052 Tel. : 22286574/22287158 Fax No. : 22261861
ICSI (STD CODE : 080) E-mail : bangalore@icsi.edu; icsibc@sify.com
Hyderabad 10.04.2007 Chapter Programme Coordinator, Hyderabad Chapter of the SIRC of the ICSI
Chapter of to Premises # 6-3-609/5,Anand Nagar Colony, Khairatabad, Hyderabad-500004
SIRC of the 26.4.2007 Tel. : 23399541/23396494 Fax No. : 23325458 (STD CODE : 040)
ICSI E-mail : hyderabad@icsi.edu
CCRT of the 24.03.2007 CCRT Programme Coordinator, CCRT of the ICSI, Plot No. 101, Sector-15,
ICSI to Premises Institutional Area, CBD Belapur, Navi Mumbai-400614 Tel. : 022-27577814/
08.04.2007 15/16 Fax No. : 022-27574348 E-mail : ccrt@vsnl.com, ccrt@icsi.edu
(17th Residential
SMTP)
The schedule of other SMTPs proposed to be conducted by SIRC and Bangalore Chapter during 2007 is as under :
SIRC : (i) 18.07.07 to 03.08.07 (ii) 18.09.07 to 04.10.07. Bangalore Chapter : 10.09.07 to 27.09.07.

SCHEDULE OF ACADEMIC DEVELOPMENT PROGRAMMES (ADP)

Every student of the Institute who has been sponsored for 15 months training either in a company or under a Company Secretary in Practice is
compulsorily required to attend and complete 25 Hours Academic Development Programme (ADP). The duration of each ADP would be eight hours
and those who have attended three such programmes would be deemed to have attended 25 Hours ADP.
Fee Rs. 250/- per participant
The Schedule of ADPs proposed to be organized by NIRC, SIRC & Hyderabad Chapter is as under :
Organised by Date Venue of the Contact Address
Programme
NIRC of 10.03.2007 NIRC Premises Executive Officer, NIRC of the ICSI, ICSI-NIRC Bldg., Plot No. 4, Prasad
the ICSI Nagar Institutional Area, New Delhi-110005 Tel. : 25763090/25767190/25816593
Fax No. : 25722662 (STD Code No. 011) E-mail : niro@icsi.edu/icsi@eth.net
SIRC of 16.05.2007 SIRC Premises Deputy Director SIRC of the ICSI, SIRC-ICSI House No. 9, Wheat Crofts
the ICSI Road, Nungambakkam, Chennai-600034 Tel. : 044-28279898/28268685
Fax No. : 044-28268685 E-mail : icsisirc@md3.vsnl.net.in/siro@icsi.edu
Hyderabad 01.04.2007 Chapter Programme Coordinator, Hyderabad Chapter of the SIRC of the ICSI # 6-3-609/5,
Chapter of Premises Anand Nagar Colony, Khairatabad, Hyderabad-500004 Tel. : 23399541/
SIRC of the 23396494 Fax No. : 23325458 (STD CODE : 040) E-mail : hyderabad@icsi.edu
ICSI
The schedule of other ADPs proposed to be organised by SIRC and Hyderabad Chapter during 2007 is as under :
SIRC : (i) 18.08.07 (ii) 15.11.07 Hyderabad Chapter : 13.05.07.

Attention Students! ATTENTION STUDENTS!

REVISION OF EXAMINATION FEE FROM DECEMBER, 2006 Fee Concession to Physically Handicapped
The Examination Fee stands revised from December, 2006 The Council of the Institute has decided to grant 50% concession in
session of examination as under : payment of Registration/Examination Fees by the candidates belonging to
Physically Challenged (including blindness) category with effect from 1st
1. Foundation Exam : Rs. 875 (Lumpsum) July 2006. For availing the aforesaid benefit, such applicants/students will
2. Intermediate Exam : Rs. 900 (Per Group) be required to submit a certificate issued by the Medical Supdt. of a State/
3. Final Exam : Rs. 750 (Per Group) Central Government Hospital to this effect.

Student Company Secretary 29 February 2007

LIST OF THE COMPANIES REGISTERED FOR Synthite Industrial Chemicals Limited 15 and 03 3000-
IMPARTING TRAINING DURING THE MONTH OF Ajay Vihar, M.G. Road, Months 5000
DECEMBER 2006 Cochin-682016 Practical
Training
Region Training Stipend
Period (Rs.) Dynaspede Integrated Systems Pvt. Ltd. 15 Months 4000-
# 24, Krishnaswamy Nagar Training 6000
Northern Region
50 Feet Road, Coimbatore-641045
Spray Engineering Devices Limited 15 Months Suitable
Western Region
25, Industrial Area, Phase-II Training
Chandigarh-160002 Rohanna Agri Business Corporation 15 Months Suitable
Limited Training
Ludhiana Stock Exchange Limited 15 Months Suitable "Shrikrishna", Krishnakeval Nagar
Firoze Gandhi Market Training 1-A, Kondhwa Khurd, Pune-411048
Ludhiana-141001
Sintex Industries Limited 15 Months Suitable
eSys Information Technologies Ltd. 15 Months Suitable Kalol (N. Gujarat)-382721 Training
B-65, Okhla Industrial Area, Phase-I Training
New Delhi-110020 IL & FS Investmart Limited 15 Months Suitable
The IL & FS Financial Centre Training
Status Mark Finvest Limited 15 Months Suitable Plot No. C-22, G Block, Bandra-Kurla
1090/13, Hardhyan Singh Road, Training Complex, Bandra (East), Mumbai-400051
Karol Bagh, New Delhi-110005
Carol Infrastructure Pvt. Ltd. 15 Months 4000 LIST OF PRACTISING MEMBERS REGISTERED FOR
C-22, IIIrd Floor, RDC, Raj Nagar, Training THE PURPOSE OF IMPARTING APPRENTICESHIP
Ghaziabad-201002 U.P. TRAINING DURING THE MONTH OF DECEMBER,
Landcraft Developers Pvt. Ltd. 15 Months 4000 2006
C-22, IIIrd Floor, RDC, Raj Nagar Training 1. LOKESH SHARMA PCSA-1430
Ghaziabad-201002 U.P. Hinger Market, Station Road, Kankroli Distt.
Allianz Securities Limited 15 Months 3000 Rajsamand-313324 (Rajasthan)
2nd Floor, 3, Scindia House Training 2. DEEPAK JAIN PCSA-1431
Janpath, New Delhi-110001 728, Navijivan Commercial Premises
Southern Region Co-Op. Soc. Ltd. Lamington Road,
Creamline Dairy Products Ltd. 15 Months Suitable Mumbai-400008
1-11-252/11/1, Motilal Nagar Training 3. DIPAK RENUKUMAR JOGI PCSA-1432
Begumpet, Hyderabad-500016 Tenement No. 7, Plot No. 180
Ward 4/B, Adipur-370205 (Kutch)

STATUS OF TRAINING
(Period from 01-01-2007 to 31-01-2007)
15 Months Training with Company/Company Secretary in Practice and 03 Months & 15 days Practical Training
STAGE-I STAGE-II
Biodata of the students sent to the companies/company Students sponsored for training
secretaries in practice for consideration
APPLICATIONS CASES
Pending Received Forwarded for Pending Pending Received No. of students Pending
Training as on during the consideration as on as on during who have actually as on
Type 31.12.06 month (upto 31.01.07) 31.01.07 31.12.06 the month taken for training 31.01.07
(upto 31.01.07)
15 Months in 10 27 22 15 07 21 24 04
Companies
15 Months with NIL 06 06 NIL 05 27 25 07
CS in Practice
3 Months in NIL 38 38 NIL
Company/
15 Days in
Optional Area
2. Exemption
1. Number of applications pending as on 31.12.2006 : 18
2. Number of applications received for exemption : 07
3. Number of exemptions granted : 20
4. Number of pending applications as on 31.01.2007 : 05

Student Company Secretary 30 February 2007

 SCHEDULE OF TRAINING ORIENTATION PROGRAMMES (TOP)
Organised by Dates Venue of the Programme Contact Address
Bhubneswar 10.03.2007 Chapter Programme Coordinator/Office Incharge, Bhubaneswar Chapter of the EIRC
Chapter of to Premises of the ICSI, ICSI Bulding, Plot No. 70, VIP Colony, IRC Village,
EIRC of the 14.03.2007 Bhubaneshwer-751015 Tel. : 0674-2552282 (Mobile) : 9937004139
ICSI E-mail : bhubaneswar@icsi.edu
NIRC of 26.02.2007 NIRC Premises Executive Officer, NIRC of the ICSI, ICSI-NIRC Building, Plote No. 4,
the ICSI to Prasad Nagar, Institutional Area, New Delhi-110005 Tel. : 25763090/
02.03.07 25767190, 25816593 Fax : 25722662 (STD CODE : 011)
E-mail : niro@icsi.edu/icsi@eth.net
SIRC of 05.03.2007 SIRC Premises Deputy Director SIRC of the ICSI, SIRC-ICSI House No. 9, Wheat Crofts
the ICSI to Road, Nungambakkam, Chennai-600034 Tel. : 044-28279898/28268685
09.03.2007 Fax No. : 044-28268685 E-mail : icsisirc@md3.vsnl.net.in/siro@icsi.edu
Bangalore 05.03.2007 Chapter Executive Officer & Programme Coordinator, Bangalore Chapter of the SIRC
Chapter of to Premises of the ICSI Sheriff Chambers, 3rd Floor, Rear Block, 14, Cunningham Road,
SIRC of the 09.03.2007 Bangallore-560 052 Tel. : 22286574/22287158 Fax No. : 22261861
ICSI (STD CODE : 080) E-mail : bangalore@icsi.edu; icsibc@sify.com
Hyderabad 06.03.2007 Chapter Programme Coordinator, Hyderabad Chapter of the SIRC of the ICSI
Chapter of to Premises # 6-3-609/5, Anand Nagar Colony, Khairatabad, Hyderabad-500004
SIRC of the 10.03.2007 Tel. : 23399541/23396494 Fax No. : 23325458 (STD CODE : 040)
ICSI E-mail : hyderabad@icsi.edu
The schedule of other TOPs proposed to be organised by SIRC and Bangalore Chapter during 2007 is as under :
SIRC : (i) 08.10.07 to 12.10.07 Bangalore Chapter : 03.09.07 to 07.09.07.

ATTENTION
STUDENTS!

TRAINING
It has been observed that the students opting for
undergoing 15 months training with Company Secretaries
in whole-time Practice are submitting the Contract of
Apprenticeship and other relevant documents and
registration fees to the Institute after a considerable period
of time.
As per the Training Guidelines, the students should
submit the underlisted documents within 15 days from the
commencement of training to enable the institute to take
their training on record with effect from the date of execution
of Contract.
(i) Contract of Apprenticeship in duplicate on a non-judi-
cial stamp paper of requisite value as applicable to the
particular State, where the contract is executed.
The Contract should be executed by both the par-
ties viz., the trainee and the Company Secretary in
whole-time Practice.
(ii) Statement of Particulars to be submitted in duplicate
for registration as a trainee (Part A & B).
(iii) Rs. 50/- being the Registration Fee.
If the aforesaid documents/information is not received
within the stipulated time, the training shall not be taken on
record.

Student Company Secretary 31 February 2007