Compliance Audit
- Legal Compliance is increasing difficult not only in India but across the world.
- Failure of adherence to legal requirements results in :
- Disruption of business
- Loss of reputation
- Prosecution
- Financial loss due to penalties
- Progress Partners has, over the years, developed domain knowledge in the field and has specialised teams that work to check the Compliance Level in your organisation.
- Our teams achieve the following to help the management know the status and be in a position to take adequate action :
- Assessment of Legal Compliance status (level)
- Identifying gaps in compliance
- Identifying the risk levels
- Working out the measures necessary for risk abatement
- Reporting on the above to the Management
Scope :
- Legal Compliance Audit
- Annual
- Quarterly
- One-Time
- Compliance Monitoring (on continuous basis)
- Compliance Mechanism through specialised software
- Training on Compliance
- Review of Compliance Mechanism
Legal Requirement for Compliance – Companies Act, 2013
Sec 205 – Compliance Responsibility
- Company Secretary to report to the Board about compliance with provisions of all laws applicable to the company
Sec 134 (5) (f) – Directors’ Responsibility Statement :
- Annual Report to include a declaration that the company has devised proper systems to ensure compliance with the provisions of all applicable laws and they are adequate and operating effectively.
Clause 49 / Corporate Governance guidelines :
- Requiring the Board to certify that structural Legal Compliance Management system is in place.
- Board is required to periodically review reports prepared and steps initiated to rectify instances of non compliance.
Penalties for Contravention
Under Companies Act :
- Contravention or Mis-declaration by Directors under Sec 134(5)(f)
- Heavy Penalty, Persecution
- Debarred from being director for 5 year
Under Other Laws :
- Penalty under Factories Act – Occupier / Manager
- Up to Rs. 500,000, Imprison-ment of 7 years for any offence
- For continuing offense, liable for fine of Rs. 5,000 per day
- Shop & Establishment Acts have similar provisions
- Occupier’s Responsibility
- Has to be a Director on the Board
- Exempt by court only if he can prove another person actually responsible for the offence, committed without his knowledge, consent or connivance and that he has exercised utmost due diligence
- Other Acts – Person Responsible
- Persons in charge of and responsible to the company for the conduct of business is liable to persecution for any violation / offence