GUIDELINES FOR PRACTICE IN CORPORATE FORM Definition. (i) Managing Director, !

o"e#ti$e Director an% Manager #

T!e ter$ &Managing Director', & !o"e#ti$e Director' an% &Manager' (!a"" !a)e t!e (a$e $eaning a( %efine%*+n%er(too% in t!e Co$,anie( Act, -./0. For t!i( ,+r,o(e, t!e $e$1er in ,ractice 2!o i( a Managing Director, !o"e#ti$e Director or Manager (!a"" 1e f+""#ti$e ,ractitioner*,ro,rietor*,artner in a C!artere% Acco+ntant( fir$. (ii) (iii) (i)) ()) ()i) ()ii) Act 3 Act means The Chartered Accountants Act, 1949. Reg+"ation( 3 Regulations means the Chartered Accountants Regulations, 1988. Co%e of Et!ic( 3 Code of Ethics means the Code of Ethics issued by the Institute and decisions of the Council in this regard. In(tit+te 3 Institute means the Institute of Chartered Accountants of India. Co+nci" 3 Council means the Central Council of the Institute. Me$1er 3 ember means a ember in !ractice. ember in !ractice means a " ember in !ractice# as defined in the Chartered Accountants Act, 1949 and its Regulations. Manage$ent Con(+"tanc4 5 Ot!er Ser)ice( $ anagement Consultancy % &ther 'er(ices or C' means " anagement Consultancy % &ther 'er(ices# )ermitted by the Council in )ursuance to 'ection *+*,+i(, of the Chartered Accountants Act, 1949. The definition of the e-)ression . anagement Consultancy and other 'er(ices/ as a))ears at )ages 8011 of the Code of Ethics, *112 edition is as under3 The e-)ression . anagement Consultancy and other 'er(ices/ shall not include the function of statutory or )eriodical audit, ta- +both direct ta-es and indirect ta-es, re)resentation or ad(ice concerning ta- matters or acting as li4uidator, trustee, e-ecutor, administrator, arbitrator or recei(er, but shall include the follo5ing3 +i, +ii, +iii, +i(, +(, +(i, +(ii, +(iii, 6inancial management )lanning and financial )olicy determination. Ca)ital structure )lanning and ad(ice regarding raising finance. 7or8ing ca)ital management. !re)aring )ro9ect re)orts and feasibility studies. !re)aring cash budget, cash flo5 statements, )rofitability statements, statements of sources and a))lication of funds etc. :udgeting including ca)ital budgets and re(enue budgets. In(entory management, material handling and storage. ar8et research and demand studies.

()iii)

+i-, +-, +-i, +-ii, +-iii, +-i(, +-(, +-(i, +-(ii,

!rice0fi-ation and other management decision ma8ing. anagement accounting systems, cost control and (alue analysis. Control methods and management information and re)orting. !ersonnel recruitment and selection. 'etting u) e-ecuti(e incenti(e )lans, 5age incenti(e )lans etc. anagement and o)erational audits. ;aluation of shares and business and ad(ice regarding amalgamation, merger and ac4uisition. :usiness !olicy, cor)orate )lanning, organisation de(elo)ment, gro5th and di(ersification. &rganisation structure and beha(iour, de(elo)ment of human resources including design and conduct of training )rogrammes, 5or8 study, 9ob0 descri)tion, 9ob e(aluation and e(aluation of 5or8 loads. 'ystems analysis and design, and com)uter related ser(ices including selection of hard5are and de(elo)ment of soft5are in all areas of ser(ices 5hich can other5ise be rendered by a Chartered Accountant in )ractice and also to carry out any other )rofessional ser(ices relating to E<!. Acting as ad(isor or consultant to an issue, including such matters as3 0 +a, <rafting of )ros)ectus and memorandum containing salient features of )ros)ectus. <rafting and filing of listing agreement and com)leting formalities 5ith 'toc8 E-changes, Registrar of Com)anies and 'E:I. +b, !re)aration of )ublicity budget, ad(ice regarding arrangements for selection of +i, ad0media, +ii, centres for holding conferences of bro8ers, in(estors, etc., +iii, ban8ers to issue, +i(, collection centres, +(, bro8ers to issue, +(i, under5riters and the under5riting arrangement, distribution of )ublicity and issue material including a))lication form, )ros)ectus and brochure and deciding on the 4uantum of issue material +In doing so, the rele(ant )ro(isions of the Code of Ethics must be 8e)t in mind,. +c, Ad(ice regarding selection of (arious agencies connected 5ith issue, namely Registrars to Issue, )rinters and ad(ertising agencies. +d, Ad(ice on the )ost issue acti(ities, e.g., follo5 u) ste)s 5hich include listing of instruments and des)atch of certificates and refunds, 5ith the (arious agencies connected 5ith the 5or8. Explanation: 6or remo(al of doubts, it is hereby clarified that the acti(ities of bro8ing, under5riting and )ortfolio management are not )ermitted.

+-(iii,

+-i-,

+--,

In(estment counseling in res)ect of securities =as defined in the 'ecurities Contracts +Regulation, Act, 192> and other financial instruments.? +In doing so, the rele(ant )ro(isions of the Code of Ethics must be 8e)t in mind,. Acting as registrar to an issue and for transfer of shares@other securities. +In doing so, the rele(ant )ro(isions of the Code of Ethics must be 8e)t in mind,. Auality Audit. En(ironment Audit.

+--i,

+--ii, +--iii,

+--i(, Energy Audit.

+--(,

Acting as Reco(ery Consultant in the :an8ing 'ector.

+--(i, Insurance 6inancial Ad(isory 'er(ices under the Insurance Regulatory % <e(elo)ment Authority Act, 1999, including Insurance :ro8erage. (i6) Manage$ent Con(+"tanc4 Co$,an4 # anagement Consultancy Com)any means a Com)any 5hich com)lies 5ith the Buidelines for !ractice in Cor)orate 6orm issued by the Institute. Re"ati)e 3 Relati(e means .Relati(e/ as defined in A))endi- +9, of the Chartered Accountants Regulations, 1988, *11* edition.

(6) 7.

Na$e of t!e Manage$ent Con(+"tanc4 Co$,an48 +i, The anagement Consultancy Com)any shall ha(e a distinct name 5hich shall be a))ro(ed by the Institute. The )rescribed format of a))lication for a))ro(al of name for anagement Consultancy Com)any is at For$ 9G: +enclosed,. 'tandards )rescribed in Regulations 191 of the Chartered Accountants Regulations, 1988 shall be a))licable to the name of the anagement Consultancy Com)any. Co5e(er, e(en if a name is )ro(ided and subse4uently it is found that the same is undesirable then, the said name can be 5ithdra5n at any time by the Institute. The )ro(isions in res)ect of name of com)anies as )rescribed in the Com)anies Act, 192> shall be a))licable in letter and s)irit. The name of anagement Consultancy Com)any may indicate the area of D anagement Consultancy % &ther 'er(ices# )ermitted by the Council from time to time. The anagement Consultancy Com)any shall neither be )ermitted to ad(ertise nor to use logo.

+ii,

+iii, +i(, ;. Regi(tration8

After a))ro(al of the name under Buideline E and incor)oration under the Com)anies Act, 192>, the anagement Consultancy Com)any is re4uired to be registered 5ith the Institute in a )rescribed For$ <=: +enclosed,. /. Et!ica" Co$,"iance8 +i, &nce the anagement Consultancy Com)any is Registered 5ith the Institute as )er the Buidelines, it 5ill be necessary for such a Com)any to com)ly 5ith the follo5ing re4uirements3 0 a, If the indi(idual )ractitioner@sole0)ro)rietorshi) firm@)artnershi) firm is the statutory auditor of an entity then the anagement Consultancy Com)any should not acce)t the internal audit or boo808ee)ing or such other )rofessional assignments 5hich are )rohibited for the statutory auditor firm. b, The Fotification Fo. 10CA+G,@>1@*11* dated 8th arch, *11* +enclosed, in res)ect of ceiling on Fon0audit fees is a))licable in relation to a anagement Consultancy Com)any.

c, The anagement Consultancy Com)any shall com)ly 5ith clauses +>, % +G, of !art0I of the 6irst 'chedule to the Chartered Accountants Act, 1949 and such other directi(es as may be issued by the Institute from time to time. +ii, The anagement Consultancy Com)any shall gi(e an underta8ing that it shall com)ly 5ith clauses +>, % +G, of !art0I of the 6irst 'chedule to the Chartered Accountants Act, 1949 and such other directi(es as may be issued by the Institute from time to time.

0.

O1>ect of Manage$ent Con(+"tanc4 Co$,an48 The anagement Consultancy Com)any shall engage itself only in anagement Consultancy % &ther 'er(ices. The anagement Consultancy Com)any shall gi(e an underta8ing that it shall render only anagement Consultancy % &ther 'er(ices )rescribed by the Council )ursuant to )o5ers under section * +*,+i(, of the Chartered Accountants Act, 1949. The &b9ect Clause should restrict itself only to the anagement Consultancy % &ther 'er(ices )ermitted by the Council in )ursuance to 'ection *+*,+i(, of the Chartered Accountants Act, 1949.

?.

@io"ation of Act8 In case of alleged (iolation of the )ro(isions of the Act, Regulations framed thereunder, guidelines@directions laid do5n by the Council from time to time and Code of Ethics issued by the Council, the indi(idual )ractitioner@sole0)ro)rietorshi) firm@)artnershi) firm in general and the anaging <irector@7hole0time <irector@ anager of such com)any in )articular, 5ould be ans5erable.

A.

A,,"ica1i"it4 of Co$,anie( Act, -./0 an% ot!er "a2(8 All the )ro(isions of the Com)anies Act, 192> and other la5s that are a))licable to a Com)any formed under the Com)anies Act, 192> shall be a))licable to the anagement Consultancy Com)any. The Buidelines are in addition to the )ro(isions contained in the Com)anies Act, 192>.

..

Benefit( a)ai"a1"e to $e$1er( if t!e G+i%e"ine( fra$e% are co$,"ie% 2it!8 i, The member can retain full time Certificate of !ractice besides being the anaging <irector@7hole0time <irector@ anager of anagement Consultancy Com)any. The member 5ill be entitled to train articled@audit assistant+s,. There 5ill be no restrictions on the 4uantum of the e4uity holding of the member, either indi(idually and@or along 5ith his relati(es, in such a com)any.

ii, iii, -C.

Tran(itor4 Pro)i(ion(8

i,

Any member 5ho 5ishes to become anaging <irector@7hole0time <irector@ anager of an e-isting Com)any, 5hich is rendering anagement Consultancy % &ther 'er(ices, and 5ishes to ta8e other benefit contained in the Buidelines, shall com)ly 5ith the Buidelines for !ractice in Cor)orate 6orm. The Com)any is re4uired to ta8e a))ro(al of name and then a))ly for registration 5ith the Institute. If the Institute has reser(ation o(er the name of an e-isting Com)any that 5ishes to come under the )ro(isions of this Buidelines, the Com)any shall be re4uired to a))ly for change in name. The Com)any is also re4uired to change its ob9ect clause, if the same contains ob9ects other than those )ro(ided in the Buidelines.

ii, iii,

i(,

For$ 9G: APPLICATION FOR APPRO@AL OF NAME FOR PROPOSED MANAGEMENT CONSULTANCD COMPAND T=E INSTITUTE OF C=ARTERED ACCOUNTANTS OF INDIA ESee G+i%e"ine 7 of G+i%e"ine( for Practice in Cor,orate For$F 1. !ro)osed name of the Com)any 1. HHHHHHHHHHHHHHHHH +in order of )reference, *. HHHHHHHHHHHHHHHHH E. HHHHHHHHHHHHHHHH *. Fame of the embers@firm along 5ith name of )artners forming )ro)osed Consultancy Com)any 6irm Fame@ ember Fame 6irm Regn. Fo.@ .Fo. anagement Consultancy Com)any anagement

E. Address of the Registered &ffice of the )ro)osed HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHH!in HHHHHHHHHHHHH Tel. Fo. HHHHHHHHHHHHHHHHHHHHHHHHHH 6a- Fo. HHHHHHHHHHHHHHHHHHHHHHHHHH E0mail HHHHHHHHHHHHHHHHHHHHHHHHHHH 7ebsite Address HHHHHHHHHHHHHHHHHHH 4. &5nershi) )attern of the Com)any 2. Fame of the member )ro)osing to become Fame of the ember 1.HHHHHHHHHHHHHHHHHHHHHH *HHHHHHHHHHHHHHHHHHHHHHH E.HHHHHHHHHHHHHHHHHHHHHH !lace 3 IIIIIIIII.. <ate 3 IIIIIIIII..

anaging <irector@7hole0time <irector@ anager

embershi) Fo. HHHHHHHHHHHHHH HHHHHHHHHHHHHH HHHHHHHHHHHHHH Fame+s, 5ith embershi) Fo+s,. and signature+s, of duly authoriJed !artner+s,@!ro)rietor+s, of the firms

For$ <=: DECLARATION FOR REGISTRATION OF MANAGEMENT CONSULTANCD COMPAND T=E INSTITUTE OF C=ARTERED ACCOUNTANTS OF INDIA ESee G+i%e"ine ; of G+i%e"ine( for Practice in Cor,orate For$F 1. *. Fame of the Address of the +(, +(i, anagement Consultancy Com)any Registered &ffice :ranch &ffice

4. &5nershi) )attern of the Com)any 2. Fame of the member+s, )ro)osing to become <irector@ anager Fame of the ember embershi) Fo. 1.HHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHH *.HHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHH E.HHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHH >. Fumber and <ate of Incor)oration Certificate +!lease enclose Incor)oration Certificate issued by the R&C, I@7e hereby declare that the anagement Consultancy Com)any shall render anagement Consultancy % &ther 'er(ices 5hich are )rescribed by the Council of the Institute from time to time )ursuant to )o5ers under 'ection *+*,+i(, of the Chartered Accountants Act, 1949. This Com)any has been constituted in com)liance 5ith the Buidelines for !ractice in Cor)orate 6orm issued by the Institute. I@7e hereby declare that I@7e shall com)ly 5ith Clauses +>, % +G, of !art I of the 6irst 'chedule to the Chartered Accountants Act, 1949 and such other directions as may be issued by the Institute from time to time in this regard. !lace 3 IIIIIIII <ate 3 IIIIIIII 'ignatures of t5o authorised <irectors of the body cor)orate and the anaging <irector@7or8ing <irector@ anager of that body cor)orate together 5ith membershi) no. under a common seal. +Enclose a co)y of :oard Resolution, anaging <irector@7hole0time

Notification No.-#CA(?)*0C*GCCG

At!Marc!, GCCG

-#CA(?)*0C*GCCG8 In e-ercise of the )o5ers conferred by clause +ii, of !art II of the 'econd 'chedule to the Chartered Accountants Act, 1949, the Council of the Institute of Chartered Accountants of India hereby s)ecifies that a member of the Institute in )ractice shall be deemed to be guilty of )rofessional misconduct, if he acce)ts the a))ointment as statutory auditor of !ublic 'ector Knderta8ing+s,@ Bo(ernment Com)any+ies,@Listed Com)any+ies, and other !ublic Com)any+ies, ha(ing turno(er of Rs. 21 crores or more in a year and acce)ts any other 5or8+s, or assignment+s, or ser(ice+s, in regard to the same Knderta8ing+s,@ Com)any+ies, on a remuneration 5hich in total e-ceeds the fee )ayable for carrying out the statutory audit of the same Knderta8ing@com)any. !ro(ided that in case a))ointing authority+ies,@regulatory body+ies, s)ecify+ies, more stringent condition+s,@restriction+s,, the same shall a))ly instead of the conditions@restrictions s)ecified in this Fotification. E6,"anation8 1. The abo(e restrictions shall a))ly in res)ect of fees for other 5or8+s, or ser(ice+s, or assignment+s, )ayable to the statutory auditors and their associate concern+s, )ut togetherM *. 6or the abo(e )ur)ose, +i, the term .other 5or8+s,/ or .ser(ice+s,/ or .assignment+s,/ shall include anagement Consultancy and all other )rofessional ser(ices )ermitted by the Council )ursuant to 'ection *+*,+i(, of the Chartered Accountants Act, 1949 but shall not include3 0 +i, audit under any other statuteM +ii, certification 5or8 re4uired to be done by the statutory auditorsM and +iii, any re)resentation before an authorityM +ii, the term .associate concern/ means any cor)orate body or )artnershi) firm 5hich renders the anagement Consultancy and all other )rofessional ser(ices )ermitted by the Council 5herein the )ro)rietor and@or )artner+s, of the statutory auditor firm and@or their .relati(e+s,/ is@are <irector@s or )artner@s and@or 9ointly or se(erally hold .substantial interest/ in the said cor)orate body or )artnershi)M +iii, the terms .relati(e/ and .substantial interest/ shall ha(e the same meaning as are assigned under A))endi- +11, =no5 A))endi- +9,? to the Chartered Accountants Regulations, 1988. E. In regard to ta8ing u) other 5or8+s, or ser(ice+s, or assignment+s, of the underta8ing@com)any referred to abo(e, it shall be o)en to such associate concern or cor)orate body to render such 5or8+s, or ser(ice+s, or assignment+s, so long as aggregate remuneration for such other 5or8+s, or ser(ice+s, or assignment+s, )ayable to the statutory auditor@s together 5ith fees )ayable to its associate concern+s, or cor)orate body+ies, do@does not e-ceed the aggregate of fee )ayable for carrying out the statutory audit. ;. T!i( notification i( a,,"ica1"e for an4 a,,oint$ent(() on or after -(t A,ri", GCCG.