Guidance Note on Code of Conduct for Company Secretaries
Author: Unknown
Date: 2018-08-24T13:27:18+00:00

Guidance Note on

Code of Conduct
for

Company Secretaries

BACKGROUNDER

(i)

FIRST EDITION

:

DECEMBER 1989

SECOND EDITION

:

SEPTEMBER 2003

THIRD EDITION

:

OCTOBER 2011

FOURTH EDITION

:

AUGUST 2016

FIFTH EDITION

:

AUGUST 2018

PRICE : Rs. 250/- (Excluding Postage)

© THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

All rights reserved. No part of this publication may be translated or copied in
any form or by any means without the prior written permission of The Institute
of Company Secretaries of India.

Although due care and diligence have been taken in the publication of
this book, the Institute shall not be responsible for any loss or damage,
resulting from any action taken on the basis of the contents of this
book. Any one wishing to act on the basis of the material contained
herein should do so after cross checking with the original source.

Published by :

THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

ICSI House, 22, Institutional Area, Lodi Road, New Delhi - 110 003

Phones : 41504444, 45341000; Fax : 24626727

Website : www.icsi.edu; E-mail : info@icsi.edu

Printed at : India Offset Press/500/August 2018

(i )

PREFACE TO THE FIFTH EDITION

A Code of Conduct is a necessary component of any profession
to maintain standards for the individuals within that profession
to adhere. It brings about accountability, responsibility and trust
to the individuals that the profession serves.

A professional needs to constantly live up to its values so that the
clients, stakeholders, regulators, fellow professionals and the
public at large repose full trust in the profession. The corporate
world in which the professionals operate today has become quite
demanding and competitive with new regulatory prescriptions
each passing day and added emphasis on self regulation.

The profession of Company Secretaries is not new, as it has the
five decades of glorious existence. The Institute is presently in its

Golden Jubilee Year and the value system ingrained in the
profession of Company Secretaries is the essence of ‘Brand CS’.

Adherence to the value system and Code of Conduct in true letter
and spirit is imperative for the success of any professional and
commanding respect and confidence of the regulators, clients,
colleagues and other stakeholders.

Adherence to the Code of Conduct coupled with high level of
integrity and ethical behaviour are the hallmark of quality of
professional services. Company Secretaries being Key Managerial

Personnel under the Companies Act, 2013 hold huge
responsibilities in the organisations they serve and influence the
investors, employees, customers, suppliers, lenders, government
and the society at large. Likewise, Company Secretaries in practice
are being called upon to shoulder onerous responsibilities and
are expected to act as extended arms of the regulators.

The Institute being alive to its responsibilities to the profession
and the professionals has always endeavoured to keep pace with
the emerging regulatory paradigm and this fifth revised edition

(i i)

of Guidance Note on Code of Conduct is a step in that direction.

It is hoped that the fellow professionals would go through this

Guidance Note thoroughly which would enable them to have a
better understanding of their role in corporates, and help them
showcase their expertise as one of the finest category of
professionals in the world.

Place: New Delhi CS Makarand Lele

Date : 23 August, 2018 President, ICSI

(iv)

PREFACE TO THE FOURTH EDITION

Code of Conduct is a set of Principles outlining the responsibilities of, or proper
practices with values for, an individual, party or organization.

“People forget how fast you did a job – but they remember how well
you did it”

-Howard Newton

Professional ethics concerns one's conduct of behavior and practice when carrying
out professional work. Ethics arises from three main factors:

— Moral attitudes as a result of consciousness;

— Culture as a result of education; and

— Application of standards as results of learning and training.

Ethics amounts to fundamental moral attitudes, binding values and irrevocable
standards. “Ethics is relevant and useful to all individuals in a civil society but its importance and significance is much more for a professional because he is
expected to play a more meaningful and useful role for the benefit of the
society in discharging his social responsibility and accountability at a higher level
as compared to other sections of the society”. Observance of high standards of
conduct is an important characteristic of any profession in order that it can
create the trust, confidence and respect of the public.

Being at a key position, advice of a Company Secretary has an impact on all the
stakeholders i.e. investors, employees, customers, suppliers, lenders, government
and society.

The metamorphosis that the Practising side of the profession went through
during the past decade has brought with it numerous opportunities and attendant
challenges. In addition, the Companies Act, 2013 inter alia provides ample
opportunities for growth of the profession of the Company Secretaries. New
competitive business environment provides huge opportunities for the profession
of Company Secretaries vis-à-vis huge responsibilities and accountability. This
necessitated to further revision of the Guidance Note on Code of Conduct for

Company Secretaries.

I take this opportunity to express my sincere thanks to CS Ashish Garg, Chairman
and the members of Practicing Company Secretaries Committee of the Council
for their guidance and offering valuable suggestions in the revision of this Guidance

Note on Code of Conduct.

(v)

I wish to place on record my sincere appreciation to Shri Ritesh Kumar, Deputy Director in the Institute for incorporating various suggestions and inputs under
the able guidance of CS Ashok Kumar Dixit, Joint Secretary and CS Sonia Baijal,

Director and overal supervision of CS Dinesh Chandra Arora, Secretary of the

Institute for accomplishing the task within a short time.

I am confident that this revised Guidance Note would be of immense value to
the members of our profession and other readers.

Place : New Delhi

CS Mamta Binani

Date : 03 August, 2016

President

The Institute of Company Secretaries of India

(vi)

PREFACE TO THE THIRD EDITION

Professional Codes of Conduct are one of the most important characteristics of
a profession. Such Codes of Conduct illustrate the high ethical and professional
standards to reassure various stakeholders of two conditions, namely, that any
particular set of professional services is being rendered not only by (i) properly
qualified or technical y expert persons but also (i ) by persons whose professional
standards merit the high degrees of trustworthiness, typically required of
professionals.

It was in 1989 that the first edition of the Guidance Note on Code of Conduct
for Company Secretaries was published by the Institute which was revised in

2003 in the light of the transformation that had taken place in the practising side
of the profession. The metamorphosis that the practising side of the profession
went through during the past few years brought with it numerous opportunities
and attendant challenges. In addition, the Company Secretaries Act, 1980 was
amended in the year 2006, ushering in a new era of speedy disposal of cases
relating to professional misconduct. This necessitated the Council of the Institute
to further revise the Guidance Note on Code of Conduct for Company Secretaries
to bring it in conformity with the governing legislation.

It was in this backdrop that the Council of the Institute invited CS Mahesh A

Athavale, Past President of the Institute to guide the then Practicing Company

Secretaries Committee of the Council and the successive committees thereafter
in accomplishing the mammoth task of revising the Guidance Note.

I deem it my duty to place on record my sincere thanks to CS Mahesh Anant

Athavale, Past President of the Institute, my colleagues on the Council, members
of the Practicing Company Secretaries Committees of the Council of the Institute
for their untiring efforts in revising this Guidance Note on Code of Conduct.

I wish to place on record my sincere thanks and gratitude to CS Nesar Ahmad,
my colleague on the Council and Vice President of the Institute for finalizing
this revised Guidance Note, as authorized by the Council.

I am thankful to CS N K Jain, Secretary & CEO under whose dynamic leadership
the revision of this Guidance Note has been accomplished.

I also wish to place on record my sincere appreciation for CS Saurabh Jain,

Assistant Director for incorporating various suggestions as advised by the Council
and the Practicing Company Secretaries Committee, under the able guidance
of CS Sutanu Sinha, Director (Academics) of the Institute. I also place on record
my sincere appreciation for CS S Kumar, former Principal Director of the Institute
for his valuable contribution in the finalization of this Guidance Note.

(vi )

I am confident that this revised Guidance Note would be of immense value to the members of our profession and other readers. I look forward to views /
suggestions from the members / readers for further improving the contents of
this publication.

Place : New Delhi

CS Anil Murarka

Date : October 3, 2011

President

The Institute of Company Secretaries of India

(vii )

PREFACE TO THE SECOND EDITION

Since 1989 when the first edition of the Guidance Note on Code of Conduct
for Company Secretaries was published, the profession of Company

Secretaries in general and practicing side in particular, has undergone
metamorphosis. The Government and regulatory authorities continuously
reposing greater trust and confidence have provided various opportunities
to Practising Company Secretaries. Consequently, more and more members
are taking up practice.

A distinguishing characteristic of a profession is the ability to combine ethical
standards with the performance of technical skills. The professionals being
exclusive custodian of expertise, need to profess high ethical and moral values,
and to redeem their noble traditions. There is therefore, a need for introspection
and a dynamic movement is desired to promote a value revolution with deeper
conviction and creative consciousness, leading us to be good professional citizens.

Let the col ective wisdom prevail to inculcate highest standards of professional
ethics, and moral values and adherence to code of conduct of the Institute in its
true letter and spirit.

In view of these developments, a need was felt to revise the guidance
note, to make it a self-contained document on Code of Conduct providing
updated information to the members. The revised edition of the Guidance

Note on Code of Conduct for Company Secretaries as finalised by the

Practising Company Secretaries Committee (PCSC) of the Council after
extensive deliberations has been approved by the Council of the Institute
for publication.

The revised edition apart from containing updated information also incorporates
a ‘Gist of Disciplinary Proceedings Against Members’. I am confident that the
revised Guidance Note will be very useful to the members.

I place on record my sincere thanks to Shri V Sreedharan, Chairman and

S/Shri Mahesh A Athavale, H I Bhatt, H M Choraria, G Gehani and R Ravi,

Members of the Practising Company Secretaries Committee for their unstinted
efforts in revising the publication.

I wish to place on record my sincere thanks and gratitude to Shri Keyoor M

Bakshi, Vice President of the Institute for finalizing this revised Guidance Note,
as authorized by the Council.

I also wish to place on record my sincere appreciation for Shri Purushottam

Grover, Education Officer for incorporating various decisions of the PCSC and

(ix)

Council and seeing the manuscript through the press, under the able guidance of Shri V K Aggarwal, Senior Director of the Institute.

Suggestions/views to improve the contents of this edition are earnestly solicited.

Place : New Delhi

(Pavan Kumar Vijay)

Date : September 1, 2003

President

The Institute of Company Secretaries of India

(x)

PREFACE TO THE FIRST EDITION

Observance of high standards of conduct is an important characteristic of any
profession, in order that it can beget the trust, confidence and respect of the
public. The rigorous preparatory education and valuable practical training
acquired by a member of a profession should enable him to pursue righteous
and edifying conduct in the practise of the profession. The oldest among the
professions, namely, Medicine and Law have set up noble traditions to emulate.

The enactment of Section 383A of the Companies Act, which came into force
from 1st February, 1975 recognised Company Secretary as an important
professional in the efficient management of corporate sector. With a view to
laying down right type of conduct expected of a professional manager and to
create necessary awareness among members, the Institute organised a National

Convention in February 1976. After the conclusion of the Convention, the

Institute appointed a Committee to formulate a model code of conduct. The
model code, evolved by the Committee and accepted by the Council contained
rules applicable to members in service or practice, as well as rules applicable to
all members generally.

The code of conduct became statutory with the conversion of the Institute into
a statutory body under the Company Secretaries Act, 1980 with effect from 1st

January 1981. The First and Second Schedules to the Act encompassing various
instances of professional misconduct adopt to a great measure, the code evolved
by the Institute in 1977.

With the statutory recognition to a Company Secretary in practice under
section 2(45A) of the Companies Act, 1956, an exclusive area of practice by
members for certifying annual returns of listed companies and further, keeping
in view the other growing areas of practice, the Council of the Institute decided
to bring out a concise guidance note explaining the rules relating to professional
misconduct under the Company Secretaries Act, 1980.

The 17th National Convention of the Institute held in Bangalore in March 1989
provided an ideal occasion to deliberate on the code of conduct in the Third

Technical Session as an aspect of ‘Search for excellence’ in the profession. The
background paper on code of conduct prepared by Shri R. Krishnan, Joint

Director of Research, circulated among the delegates at this Convention
made an attempt at giving brief explanations to the various rules of
misconduct. The background paper incorporated the suggestions and
comments of Shri T.V. Narayanaswamy formerly Secretary, DCM Ltd., New

Delhi and Shri T.P. Subbaraman, Secretary & Executive Director of the Institute.

The Professional Development Committee of the Council appointed a special
sub-committee to finalise the draft guidance note prepared in the Directorate
of Research of the Institute, based on the background paper circulated at the

17th National Convention. The sub-committee deliberated upon the draft in
its four long meetings and submitted its final draft for approval by the Council.

I am very grateful to S/Sh. S.D. Israni, Bipin S. Acharya, T.V. Padmanabhan &

O.P. Dani, members of the sub-committee of which I was the Chairman, for

(xi)

their valuable contribution in finalising the guidance note. I am also highly thankful to Shri T.P. Subbaraman, Secretary & Executive Director for giving his
views in the finalization of the draft. The views and suggestions put forward by

Shri P.T. Rangamani and Shri D.K. Prahlada Rao on certain vital aspects of the
draft deserve special mention. I wish to record my appreciation to Shri R.

Krishnan, Joint Director of Research for the support and help extended by him
in revising the draft incorporating the suggestions made by the sub-committee.

The guidance note is only illustrative and not exhaustive. It is for the members
to adopt righteous path and uphold good traditions in the practice of the
profession. I can only quote Marcus Aureliu who said, “The man should be
upright and not kept upright”.

I am sure the guidance note would help the members in understanding the
spirit behind the rules relating to professional misconduct under the Company

Secretaries Act, 1980.

I would value your views and suggestions for improving the content of this
guidance note

Place : New Delhi

(Shyamal Sen)

Date : 28/12/89

President

The Institute of Company Secretaries of India

(xi )

CONTENTS

1.

Background

1

2.

Certain Provisions Relating to Misconduct under the

Company Secretaries Act, 1980 as amended

7

3.

Consequences of misconduct and appeals

15

4.

Professional misconduct in relation to Company Secretaries
in practice (Part I of the First Schedule to the Act)

15

5.

Professional misconduct in relation to members of the

Institute in service

34

6.

Professional misconduct in relation to members of the

Institute general y (Part III of the First Schedule to the Act)

36

7.

Other Misconduct in relation to members of the Institute
general y

37

8.

Part I of the Second Schedule to the Act Section 21(3),

21(B)(3) and 22 where the matters are to be dealt
with by the disciplinary committee constituted by the

Council

38

9.

Professional misconduct in relation to members of the

Institute generally (Part II of the Second Schedule to the

Act)

45

10.

Part III of the Second Schedule

48

11.

Conclusion

48

(xii )

Annexure I

49

Services that can be Rendered as per th e Resolution
passed by the Council under Clause (f) of Sub-section 2
of Section 2 of the Company Secretaries Act, 1980

Annexure II

51

Guidelines for Use of Individual Logo by Company

Secretaries in Practice

Annexure III

57

Resolution under Regulation 168 of the Company

Secretaries Regulations, 1982 allowing Members in

Practice to carry out Non-Attestation Services through
the New Business Structure of Limited Liability Partnership

Annexure IV

59

Guidelines for Advertisement by Company Secretary in

Practice

Annexure V

67

Guidelines of the Council for Name of a Proprietorship

Concern/Firm/Trade under Regulation 169 of the

Company Secretaries Regulations, 1982

Annexure V I

70

Guidelines for Compulsory Attendance of Professional

Development Programmes

Annexure VII

77

Dress Code for Company Secretaries

Annexure VIII

78

Guidelines for Requirement of Maintenance of a Register
of Attestation/Certification Services Rendered by

Practising Company Secretary/Firm of Practising Company

Secretaries

(xiv)

Annexure IX

80

Guidelines for Change in Name of Proprietorship

Concern/Firm of Company Secretary(ies)

Annexure X

81

Guidelines for Peer Review of Attestation Services by

Practising Company Secretaries

Annexure XI

99

Extract of Sections 21 to 22E of Company Secretaries

Act, 1980

Annexure XII

103

Extract of First and Second Schedules to the Act

Annexure XIII

108

Complaints and Enquiries Against Members

Annexure XIV

113

Procedures of making Complaints

Annexure XV

119

Gist of Disciplinary Proceedings against Members

***

(xv)

GUIDANCE NOTE

O N

CODE OF CONDUCT

FOR

COMPANY SECRETARIES

1. Background

1.1 Principles of ethics and morality embedded in the legal framework
makes a code of conduct for a professional. One of the major
reasons why we need laws is that most of us are not self disciplined.

Without external deterrence, barring few respectable exceptions,
people tend to become selfish and violate pious principles or

“DHARMA” One of the distinguishing features of profession over
business is that for a professional , there exists a central controlling
institute which guides the behavior of its members and puts him in
four walls of ethical practices. One of the universally accepted
characteristics of a profession is the observance of a strict code of
conduct by the members of the profession. Not that businessmen
are not guided by the code of conduct (‘Dharma’ ) but such code is
stricter for professional with a legal sanction. A professional is
endowed with higher faculties conditioned by an elaborate
preparatory education, rigorous instruction and valuable practical
training, as to distinguish, above all, righteous act/conduct from
those deviant and unedifying.

1.2 Professionals are expected to conduct themselves in such a manner
so as to uphold the grace, dignity and professional standing of their
respective Institutes. Any commitment to complete a particular
assignment as agreed by the person himself should be completed in
a professional manner.

1.3 The purpose of the guidance note on the Code of Conduct is to
explain to the members of ICSI , the various aspects of the code of
conduct, caution them against the wrongdoing and promote ethical
conduct. The matters covered in this Code are of utmost importance
to all the members of ICSI. The note is designed to assist in defining
appropriate personal and professional conduct, to provide guidance
in the identification and resolution of ethical issues, and to help the
members of the Institute to maintain the culture of honesty, integrity,
transparency and accountability. Since no code or policy can anticipate
every situation that may arise, this guidance note on the Code is
intended to provide guidance for ensuring proper behaviour of each

Member so as to ensure highest standards of work culture. Member
must comply with the letter and spirit of this Code.

1

2

Guidance Note on Code of Conduct for Company Secretaries

1.4 Indian traditions teach us to respect others, earn trust and confidence
of the public and discharge at least three major debts. These debts
are towards their ancestors, parents and society as a whole. A
professional renders personal confidential services to his client and
the latter’s affairs come into full knowledge of the professional when
his services are engaged by a client. That society would, therefore,
expect a professional to be a person of character and integrity. The
society at large is given this assurance through the code of conduct
evolved and effectively administered by the professional body
concerned, of which the professional is a member. Code of conduct
which also goes by the synonym ‘Professional ethics’ encompasses
professional’s conduct towards his peers, the clients, the employer
and the people at large.

1.5 World over, the professions have accorded highest priority to
professional ethical standards in the dealings and relationship of
professionals with their employers, employees, Government, fellow
professionals and the public at large. The fundamental principles
which should govern the conduct of a professional with others have
been broadly identified as to encompass;

—

Integrity;

—

Independence;

—

Competence;

—

Objectivity;

—

Ethical behaviour;

—

Conformance to the prescribed technical standards and

—

Confidentiality of information acquired in the course of
professional work.

1.6 The history of human civilization bears ample testimony to the
reverence and honour with which society looks upon persons who
subjugate their personal gain to public good. Professionals, with
their rigorous education and training belong to a class of people
who have to uphold public good and serve wider public interest.

1.7 The societal expectations or norms are referred to as ‘values’ which
are nothing but generalised beliefs or expected standards of conduct.

The study of what values a society ought to have is the subject of a
branch of philosophy known as ethics. A code of professional conduct
is also referred to as code of professional ethics. Accordingly, the
ethics of a Company Secretary would signify his conduct and
behaviour.

1.8 The enactment of section 383A of the erstwhile Companies Act,

1956 which came into force from 1st February, 1975, recognised
statutorily a Company Secretary as an essential limb of top corporate

Guidance Note on Code of Conduct for Company Secretaries

3
management. This section was amended by the Companies

(Amendment) Act, 2000 to provide that every company not required
to employ a whole-time secretary under sub-section (1) and
having a paid-up share capital of Rs. ten lakh or more upto Rs.5
crore shall file with the Registrar a certificate from a Secretary in
whole-time practice as to whether the company has complied with
all the provisions of the Act and a copy of such certificate shall be
attached with report of the Board of Directors, referred to in section

217 of the Companies Act, 1956. Before that the Companies

(Amendment) Act,1988 introduced a provision that the Annual Return
filed by a company whose shares are listed on a recognised stock

Exchange should be signed by a Secretary in whole-time practice.

These two are the exclusive recocgnitions under the Companies

Act, so far, granted to a Company Secretary in Practice.

1.8.1 Section 204 (1) of the Companies Act, 2013 provides that every
listed company and a company belonging to other class of companies
as may be prescribed shall annex with its Board’s report made in
terms of sub-section (3) of section 134, a Secretarial Audit Report,
given by a Company Secretary in Practice, in such form as may be
prescribed.

1.8.2 Section 92 of the Companies Act, 2013, inter-alia provides for signing
of annual return by a Company Secretary or a Company Secretary in

Practice.

1.9 In order to evoke the necessary interest and awareness among the
members and to create the necessary climate for laying down the
right type of conduct which should govern the profession, the

Institute organised in February 1976, a National Convention, primarily
to evolve the necessary framework for a code of conduct. After the
conclusion of that Convention, the Council of the Institute appointed
a Code of Conduct Committee with the task of formulating a model
code of conduct. The Council of the Institute accepted the
recommendations of the Code of Conduct Committee which inter
alia prescribed:

(a) rules applicable to all members; and

(b) rules applicable to members in service or in practice.

1.10 In formulating the code of conduct, the Committee and the Council
adopted a certain normative approach or value judgment. The codes
evolved were rooted in the principles of Dharma stating positively
what the profession stands for, what it expects from the members
and what it cherishes as valued ideals of the society. The code also
negatively laid down what constitutes a breach of the code in any
given situation and the penal consequences for any violation or
misconduct.

1.11 The code of conduct acquired statutory status with the conversion

4

Guidance Note on Code of Conduct for Company Secretaries
of the Institute into a statutory body under the Company Secretaries

Act, 1980 (hereinafter referred to as ‘The Act’), with effect from 1st

January, 1981. In the year 2006 substantial amendments were made
to Act and also to the First and the Second Schedules to the Act
which encompass in detail, various instances of professional
misconduct on the part of the members of the Institute in practice
as well as in service.

1.12 The statutory recognition to a secretary in whole-time practice given
in section 2(45A) of the Companies Act, 1956, effective from 15th

June, 1988, recognition in e-governance era of Ministry of Corporate

Affairs for certifying e-forms to be uploaded on MCA portal after

2006 and the exclusive recognition conferred on Company

Secretaries in whole-time practice to certify annual returns of listed
companies and for issuing compliance certificate u/s 383A of the

Companies Act, 1956 have been responsible in a great measure,
for the Council of the Institute in deciding to bring the guidance
note. With more and more recognitions likely to be conferred on
the Practicing side of the profession and more and more members
taking up whole-time practice, the Council of the Institute thought
it appropriate to apprise the members, of the different facets of the
code of conduct enshrined in the Act. Also in view of the
development of the profession and in particular, the enactment of
the Act, the Council felt it necessary to focus the attention of the
members in general and those in practice in particular, to the various
provisions of the code of conduct to enable them to uphold the
professional values.

1.12.1 Section 2(24) of the Companies Act, 2013 provides that ‘Company

Secretary’ or ‘Secretary’ means a Company Secretary as defined in
clause (c) of sub section (1) of Section 2 of the Company Secretaries

Act, 1980 who is appointed by a company to perform the functions
of the Company Secretary under the Companies Act, 2013.

1.12.2 Section 2(25) of the Companies Act, 2013 provides that ‘Company

Secretary in Practice’ means a Company Secretary who is deemed
to be in Practice under sub Section (2) of Section 2 of the Company

Secretaries Act, 1980.

1.13 The law in respect of matters of Misconduct has been provided in

Chapter V of the Act. A glance at these substantive provisions would
help understand the subject with precision.

1.14 As contemplated by section 21(1), the Council has by notification,
established a Disciplinary Directorate headed by an officer of the

Institute designated as Director (Discipline) and other employees
for making investigations in respect of any information or complaint
received by it. Section 21 (2) states that on receipt of any information
or complaint along with the prescribed fee, the Director (Discipline)

shall arrive at a prima-facie opinion on the occurrence of the alleged
misconduct.

Guidance Note on Code of Conduct for Company Secretaries

5

1.15 Where the Director (Discipline) is of the prima facie opinion that a
member is guilty of any professional or other misconduct mentioned
in the First Schedule, he places the matter before the Board of

Discipline and where the Director (Discipline) is of the prima facie
opinion that a member is guilty of any professional or other
misconduct mentioned in the Second Schedule or in both the

Schedules, he places the matter before the Disciplinary Committee.

Disciplinary Directorate follows procedures as are prescribed by the

Company Secretaries (Procedure of Investigations of Professional
and Other Misconduct and Conduct of Cases) Rules, 2007.

(hereinafter referred to as ‘the Rules’)

1.16 The amended provisions, of 2006, permit a complainant to withdraw
the complaint, at any stage, including before or after registration of
complaint.

1.17 The Council has constituted a Board of Discipline pursuant to Section

21A of the Company Secretaries Act according to which the Board
of Discipline follows summary disposal procedure in dealing with all
the cases before it. Where the Board of Discipline is of the opinion
that a member is guilty of a professional or other misconduct
mentioned in the First Schedule, it gives the member an opportunity
of being heard before making any order against him and may
thereafter take any one or more of the fol owing actions, namely:—

(a)

reprimand the member;

(b)

remove the name of the member from the Register up to a
period of three months;

(c)

impose such fine as it may think fit which may extend to Rs.

one lakh.

1.18 Where the Director (Discipline) is of the opinion that there is no
prima facie case, he submits before the Board of Discipline all
information and the relevant complaint and the Board of Discipline
may, if it agrees with the opinion of the Director (Discipline), close
the matter or in case of disagreement, may advise the Director

(Discipline) to further investigate the matter.

1.19 The Disciplinary Committee, while considering the cases placed
before it, follows procedure as have been prescribed by the Rules.

Where the Disciplinary Committee is of the opinion that a member
is guilty of a professional or other misconduct mentioned in the

Second Schedule or both the First Schedule and the Second Schedule,
it gives to the member an opportunity of being heard before making
any order against him and may thereafter take any one or more of
the following actions, namely:—

(a)

Reprimand the member;

(b)

Remove the name of the member from the Register
permanently or for such period, as it thinks fit;

6

Guidance Note on Code of Conduct for Company Secretaries

(c)

impose such fine as it may think fit, which may extend to

Rs. Five lakh.

1.20 As contemplated by section 21C, the Authority, Disciplinary

Committee, Board of Discipline and Director (Discipline) have powers
of civil court under the Code of Civil Procedure, 1908, in respect of
the following matters, namely:—

(a)

summoning and enforcing the attendance of any person and
examining him on oath;

(b)

the discovery and production of any document; and

(c)

receiving evidence on affidavit.

1.21 For the purposes of sections 21, 21A, 21B, 21C and 22, “member
of the Institute” includes a person who was a member of the Institute
on the date of the alleged misconduct although he might have
ceased to be a member of the Institute at the time of the inquiry.

1.22 As per section 22 the expression “professional or other misconduct”

includes any act or omission provided in any of the Schedules.

1.23 On making a reference by the Council, the Director (Discipline)

under sub-section (1) of section 21 has to inquire into the conduct
of any member of the Institute under any other circumstances
whether such circumstances fall in either of the schedules or not.

1.24 As contemplated by section 22A the Appellate Authority constituted
under sub-section (1) of section 22A of the Chartered Accountants

Act, 1949, is deemed to be the Appellate Authority for the purposes
of Company Secretaries Act with a modification about its
composition.

1.25 The provisions of section 22C, section 22D and section 22F of the

Chartered Accountants Act, 1949, apply to the Appellate Authority
in relation to allowances and terms and conditions of service of its

Chairperson and members, and in the discharge of its functions
under this Act as they apply to it in the discharge of its functions
under the Chartered Accountants Act, 1949.

1.26 As contemplated by section 22E any member of the Institute
aggrieved by any order of the Board of Discipline or the Disciplinary

Committee imposing on him any of the penalties referred to in
sub-section (3) of section 21A and sub-section (3) of section 21B,
may within ninety days from the date on which the order is
communicated to him, prefer an appeal to the Appellate Authority.

1.27 The Director (Discipline) may also appeal against the decision of the

Board of Discipline or the Disciplinary Committee to the Appellate

Authority if so authorised by the Council, within ninety days.

1.28 The Appellate Authority can entertain any such appeal after the

Guidance Note on Code of Conduct for Company Secretaries

7
expiry of the said period of ninety days, if it is satisfied that there
was sufficient cause for not filing the appeal in time.

1.29 The Appellate Authority may, after calling for the records of any
case, revise any order made by the Board of Discipline or the

Disciplinary Committee under sub-section (3) of section 21A and
sub-section (3) of section 21B and may —

(a) confirm, modify or set aside the order;

(b) impose any penalty or set aside, reduce, or enhance the penalty
imposed by the order;

(c) remit the case to the Board of Discipline or Disciplinary

Committee for such further enquiry as the Appellate Authority
considers proper in the circumstances of the case; or

(d) pass such other order as the Authority thinks fit:

Appellate Authority gives an opportunity of being heard to the parties
concerned before passing any order.

1.30 The following paragraphs explain in detail the implications of the
code of conduct. Explanations in these paragraphs are illustrative
and not exhaustive.

2. Certain Provisions Relating to Misconduct under the Company

Secretaries Act, 1980 as amended

2.1 Under section 9 of the Act, the Council of the Institute is the

Competent Authority for the management of the affairs of the

Institute and discharging the functions assigned to it by or under the

Act. The Council, inter alia, has authority to exercise disciplinary
powers by instituting inquiry through Director (Discipline) into cases
where it is prima facie of the opinion that a member is guilty of
professional or other misconduct.

2.2 Professional misconduct in relation to members of the Institute is
broadly structured as under:

(a)

Professional misconduct in relation to Company Secretaries
in Practice. (Part I of the First Schedule)

(b)

Professional misconduct in relation to members of the Institute
in service. (Part II of the First Schedule)

(c)

Professional misconduct in relation to members of the Institute
generally. (Part III of the First Schedule)

(d)

Other misconduct in relation to members of the Institute
generally. (Part IV of the First Schedule)

(e)

Professional misconduct in relation to Company Secretaries
in practice requiring action by Disciplinary Committee. (Part I
of the Second Schedule)

8

Guidance Note on Code of Conduct for Company Secretaries

(f)

Professional misconduct in relation to members of the Institute
generally, requiring action by Disciplinary Committee. (Part II
of the Second Schedule).

(g)

Other misconduct in relation to members of the Institute
generally. (Part III of the Second Schedule)

The detailed provisions relating to misconduct and disciplinary
mechanism are contained in Sections 21, 21A, 21B, 21C, 21D & 22
and the First and the Second Schedules to the Act and the Rules.

2.2.1 Every member of the Institute in Practice shal , and any other member
may, use the designation of a ‘Company Secretary’ (section 7). A
member of the Institute may be in practice or otherwise occupied,
say, in employment or other vocation.

2.2.2 Under section 6 of the Act, a member of the Institute is entitled to
practice on obtaining from the Council of the Institute, a Certificate
of Practice pursuant to an application made in the prescribed form
and upon remittance of the prescribed fee.

2.3 Members deemed to be in practice

2.3.1 Section 2(2) of the Company Secretaries Act, 1980 provides that a
member of the Institute shall be deemed to be in practice, if he
does any of the following:

(a)

engages himself in the practice of the profession of Company

Secretaries to, or in relation to, any company; or

(b)

offers to perform or performs services in relation to the
promotion, forming, incorporation, amalgamation,
reconstruction, reorganisation or winding up, of companies;
or

(c)

offers to perform or performs such services as may be
performed by:

(i) an authorised representative of a company with respect
to filing, registering, presenting, attesting or verifying any
documents (including forms, applications and returns) by
or on behalf of the company,

(ii) a share transfer agent,

(ii ) an issue house,

(iv) a share and stock broker,

(v) a secretarial auditor or consultant,

(vi) an adviser to a company on management, including any
legal or procedural matter fal ing under the Capital Issues

(Control) Act, 1947 (29 of 1947), the Industries

(Development and Regulation) Act, 1951 (65 of 1951),
the Companies Act, 1956 (1 of 1956), the Securities

Guidance Note on Code of Conduct for Company Secretaries

9

Contracts (Regulation) Act, 1956 (42 of 1956), any of
the rules or bye-laws made by a recognised stock
exchange, the Monopolies and Restrictive Trade Practices

Act, 1969 (54 of 1969), the Foreign Exchange Regulation

Act, 1973 (46 of 1973), or under any other law for the
time being in force,

(vi ) Issuing certificates on behalf of, or for the purposes of, a
company; or

(d)

holds himself out to the public as a Company Secretary in
practice; or

(e)

renders professional services or assistance with respect to
matters of principle or detail relating to the practice of the
profession of Company Secretaries; or

(f)

renders such other services as, in the opinion of the Council,
are or may be rendered by a Company Secretary in practice.

2.3.2 Any member of the Institute engaging in any of the above activities
without obtaining a Certificate of Practice would be deemed to be
in practice and would be liable for professional misconduct. This
section also contemplates a member of the Institute engaging in
the above activities in partnership with members of such other
professions as may be prescribed.

2.3.3 In terms of the above stated section 2(2), the Council has decided
to allow a Company Secretary in Practice who becomes a partner of
a firm of company secretaries to continue to practice individually
also, if there is an agreement to such continuation between the
partners.

Likewise, a Company Secretary in Practice may be permitted to
become a partner in more than one partnership firms of company
secretaries if he has obtained consent from the other partners of
each of such firms.

In terms of the decision of the Council published in the December

2007 issue of the Chartered Secretry, a member of the Institute in
practice who is entitled to sign an Annual Return pursuant to proviso
to sub-section (1) of Section 161 of the Companies Act, 1956, and
issue compliance certificates pursuant to section 383A can sign Annual

Returns and issue compliance certificates not exceeding, both put
together, eighty in number in a calendar year. In the case of a firm
of Company Secretaries, the ceiling of eighty Annual Returns and

Compliance certificates (counted together) applies to each partner
therein who is entitled to sign the Annual Return in terms of the
proviso to sub-section (1) of Section 161 of the Companies Act,

1956 and issue compliance certificate in terms of section 383A of
the Companies Act, 1956. In view of the above, where any partner
of a firm of company secretaries is also a partner of any other firm or

10

Guidance Note on Code of Conduct for Company Secretaries
firms of company secretaries or is also holding office in his individual
capacity as Company Secretary in practice, the number of Annual

Returns and Compliance certificates he can sign, shall not exceed
the specified number of eighty, in aggregate, in a calendar year.

2.3.4 On the question of whether Investment Consultancy falls within
the scope of practice under section 2(2) of the Company Secretaries

Act, 1980, the Committee for Company Secretaries in Practice of
the Council stated that, In order to come within the purview of
section 2(2) of the Company Secretaries Act, 1980 and the Company

Secretaries Regulations 1982, the scope of the Investment

Consultancy should be confined to rendering of professional advice/
services to the clients in areas relating to stocks and shares, fixed
deposits in companies, inter corporate loans, mutual funds, savings
scheme and the like. It should not extend to acting as a broker or
agent of various companies, institutions, mutual funds etc. as this
would amount to engaging oneself in the business or profession
other than the profession of Company Secretary.

2.4 Council powers to expand the scope of services that can be
rendered by a member in practice

2.4.1 In terms of clause (f) of section 2(2) of the Act, the Council has
power to specify any other services that can be rendered by a
member. For a copy of the Resolution passed by the Council refer

Annexure I.

2.5 Company Secretary in Practice to use the designation of

‘Company Secretary’ only

2.5.1 Under section 7 of the Act, a member in practice shall use the
designation of a Company Secretary and shall not use any other
designation, whether in addition thereto or in substitution there for.

However, use of the prefix ‘Practicing’ before the designation

‘Company Secretary’ would not offend section 7. Similarly, use of
the suffix ‘in whole-time practice’ or ‘in practice’ after the designation

‘Company Secretary’ would also not offend section 7. Further, use
of any description or letters to indicate membership of any other

Institute in India or elsewhere is permissible, if recognised by the

Council. Any other academic qualification possessed by a member
in practice is also not prohibited to be used - say M.Com., M.Sc.,

M.A., M.B.A., A.C.A., F.C.A, ACWA, FCWA, LL.B. The Council
has recognised membership of the Institute of Chartered Accountants
of India and Institute of Cost & Works Accountants of India and Bar

Councils for the purpose of allowing members of the Institute to
use the relevant statutory descriptions of such bodies, provided
members are not holding certificate of practice of the Institute or
using the description “Company Secretary”.

2.5.2 Use of designations like Company Law Consultant, Corporate Law

Advisor, Corporate Advisor, Investment Advisor, Management

Guidance Note on Code of Conduct for Company Secretaries

11

Consultant, Corporate Counselor, Attorney, and Certified Public

Secretary is prohibited. A PCS can not describe himself as ‘Company

Secretary & Chartered Secretary’ or ‘Company Secretary and Excise
law consultant’ or ‘Company Secretary and Trade mark agent’

2.5.3 Pursuant to Section 7 of the Act, the Council while deciding as
regard to the use of description of MICA (Member of Indian

Council of Arbitration) that only those descriptions/qualifications be
allowed to be indicated by the company secretaries in practice
where the members have passed certain academic/professional
examinations for acquisition of such descriptions/qualifications and
therefore for using the description MICA no academic/professional
examinations are required to be passed, disallowed the use of
description MICA.

2.5A Prefix of CS

The Council of the Institute in its 173rd meeting held on June 23-

24, 2007 has decided that a member of the Institute may prefix CS
to his name in order to distinguish himself from other professionals
and to create brand image of the CS profession

CS Logo

The letters ‘CS’ may be used by the members as a prefix before
their names.

Appropriate usage of CS logo

While using the letters ‘CS’ on their letter heads and visiting cards,
the company secretaries need to ensure that the width of the logo
when used along with the name of the member should not be
more than 125% of the size of the characters used for publishing
the name. When the ‘CS’ logo is used as a standalone on visiting
cards and letter heads then it should not exceed 1cm (0.39 inch) in
height. The logo is to be printed in navy blue colour.

Use of Own Logo by PCS

The Council of the Institute has issued the Guidelines for use of
individual Logo by Company Secretaries in Practice which came into
effect from 1st September, 2015.

The Guidelines deal with the manner in which a Company Secretary
in Practice can design and use their individual Logo on letter head,
visiting cards, uniform for employees of their firm, websites,
advertisement materials, name boards, other stationery, invoices,
packing material, stickers, sponsorship material, etc. For a copy of
the Guidelines please refer Annexure II.

12

Guidance Note on Code of Conduct for Company Secretaries

2.6 Disabilities for purposes of membership

2.6.1 A member has to discharge onerous professional responsibilities,
which call for highest professional standards and values. He should
profess ethics and should first himself get convinced that ethics and
morality are the foundations of the success. Hence, section 8 of the

Act debars a person from having his name entered in or borne on
the register of members, if he —

(a)

has not attained the age of twenty-one years at the time of
his application for the entry of his name in the Register; or

(b)

is of unsound mind and stands so adjudged by a competent
court; or

(c)

is an un-discharged insolvent; or

(d)

being a discharged insolvent, has not obtained from the court
a certificate stating that his insolvency was caused by
misfortune without any misconduct on his part; or

(e)

has been convicted by a competent court, whether within or
without India, of an offence involving moral turpitude and
punishable with imprisonment or of an offence, not of a
technical nature, committed by him in his professional capacity
unless in respect of the offence committed he has either
been granted a pardon or, on an application made by him in
this behalf, the Central Government has, by an order in writing,
removed the disability; or

(f)

has been removed from membership of the Institute on being
found on inquiry to have been guilty of professional or other
misconduct and the period for which name has been removed
has yet to expire.

The name of the person who is found to have been subject at any
time to any of the disabilities aforementioned can be removed from
the Register of Members by the Council [sub-section (2) of section

20].

2.7 Procedure in enquiries relating to misconduct of members
of the Institute

2.7.1 Section 21, 21A, 21B, 21C, 21D, 22, 22A, 22B, 22C, 22D & 22E of
the Act and the Rules lay down the procedure to be followed in an
enquiry. It is essential to know that for the purposes of disciplinary
proceedings, ‘member of the Institute’ includes a person who was
a member of the Institute on the date of al eged misconduct although
he has ceased to be a member at the time of the enquiry.

2.8 Definition of Professional Misconduct or other Misconduct

2.8.1 For the purposes of this Act, the expression “professional or other
misconduct” shall be deemed to include any act or omission provided

Guidance Note on Code of Conduct for Company Secretaries

13
in any of the Schedules, but nothing in this section shal be construed
to limit or abridge in any way the power conferred or duty cast on
the Director (Discipline) under sub-section (1) of section 21 to inquire
into the conduct of any member of the Institute under any other
circumstances.]

2.9 “Other Misconduct” - meaning of

2 9.1 The Supreme Court in Council of the Institute of Chartered

Accountants of India and Another v. B. Mukherjee [1957 AIR 72

1958 SCR 371], after examining the nature, scope and extent of the
disciplinary jurisdiction under the provisions of the Chartered

Accountants Act, 1949 (which contains provisions analogous to those
in the Company Secretaries Act, 1980), observed as follows:-

“We therefore, take the view that, if a member of the Institute is
found, prima facie, guilty of conduct, which, in the opinion of the

Council renders him unfit to be a member of the Institute, even
though such conduct may not attract any of the provision of the

Schedules, it would still be open to the Council to hold an enquiry
against the member in respect of such conduct and a finding against
him, in such an enquiry, would justify appropriate action being
taken by the High Court.”

2.9.2 The following can be cited as illustrative examples of “other
misconduct”:

(i)

where a Company Secretary retains the records, books of
account and documents of the client and fails to return to the
client on request without a reasonable cause;

(ii)

where a Company Secretary makes a material mis-
representation;

(ii )

where a Company Secretary uses the services of his
apprentice(s) for purposes other than professional practice;

(iv)

conviction by a competent court of law;

(v)

wrong publicity causing damage to the clients;

(vi)

where in the opinion of the Council member brings disrepute
to the profession or the Institute as a result of his action
whether or not related to his profession;

(vi )

member is held guilty by any civil or criminal court for an
offence which is punishable with imprisonment for a term
not exceeding six months;

(vii ) furnishing false declaration to the institute or any regulator;
and

(ix)

Non compliance with ICSI Guidelines.

14

Guidance Note on Code of Conduct for Company Secretaries

2.9.3 The question what constitutes misconduct also came up for
consideration before the Hon’ble Supreme Court of India in the
case of N. G. Dastane v. Shrikant S. Shivade & Anr. [AIR (2001) SC

2028]. This case was in the context of sub-section (1) of section

35 of the Advocates Act, 1961. The said provision is extracted herein
below:-

“Where on receipt of a complaint or otherwise a State Bar Council
has reason to believe that any Advocate on its roll has been guilty of
professional or other misconduct, it shall refer the case for disposal
to its disciplinary committee.”

The Hon’ble Supreme Court of India observed in Paras 16 and 17 of
the judgment as under:-

“The collocation of the words “guilty of professional or other
misconduct” has been used for the purpose of conferring power on
the Disciplinary Committee of the State Bar Council. It is for
equipping the Bar Council with the binocular as well as whip to be
on the qui vive for tracing out delinquent Advocates who transgress
the norms or standards expected of them in the discharge of their
professional duties. The central function of the legal profession is to
help promotion of administration of justice. Any misdemeanour or
misdeed or misbehaviour can become an act of delinquency, if it
infringes such norms or standards and it can be regarded as
misconduct.

In Black’s Law Dictionary “misconduct “ is defined as a “transgression
of some established and definite rule of action, a forbidden act, a
dereliction from duty, unlawful behaviour, its synonyms are
misdemeanour, misdeed, misbehaviour, delinquency, impropriety,
mismanagement, offence, but not negligence or carelessness.”

In the aforesaid case, the Hon’ble Supreme Court quoted with
approval the fol owing passage from the observations of Privy Council
in George Frier Grahame v. Attorney General [AIR 1936, PC, 224].

“Misconduct envisaged in Section 35 of the Advocates Act is not
defined. The section uses the expression “misconduct, professional
or otherwise.” The word “misconduct” is relative term. It has to be
considered to the subject–matter and the context wherein such
term occurs. It literal y means wrong conduct or improper conduct.”

2.10 Penalty for falsely claiming to be a member, etc.

Section 24 of the Act provides that any person, who

(a) not being a member of the Institute—

(i) represents that he is a member of the Institute; or

(ii) uses the designation “Company Secretary”; or

Guidance Note on Code of Conduct for Company Secretaries

15

(ii ) uses the letters “A.C.S.” or “F.C.S.” after his name; or

(b)

being a member of the Institute, but not having a certificate
of practice, represents that he is in practice or practices as a

Company Secretary
shall be punishable on first conviction, with fine which may extend
to one thousand rupees, and on any subsequent conviction with
imprisonment which may extend to six months, or with fine which
may extend to five thousand rupees, or with both.

3. Consequences of misconduct and appeals

3.1 Section 22 of the Act states that professional or other misconduct
shall be deemed to include any act or omission provided in any of
the schedules, but nothing in this section shall be construed to limit
or abridge in any way the power conferred or duty cast on the

Director Discipline under sub-section (1) of Section 21 to enquire
into the conduct of any member of the Institute under any other
circumstances.

3.2 Where a member is found guilty of misconduct, both the Board of

Discipline and the Disciplinary Committee have the powers, after
giving an opportunity of being heard, to award the punishment as
stated earlier.

3.3 The Act contains provisions for appeals by a member aggrieved by
any order of the Board of Discipline or the Disciplinary Committee
imposing penalties for professional misconduct. Section 22E of the

Act provides that a member aggrieved by any order of the Board of

Discipline or the Disciplinary Committee, may prefer an appeal to
the Appellate Authority constituted under the provisions of
section 22A of the Act, within ninety days from the date on which
the order is communicated to him.

4. Professional misconduct in relation to Company Secretaries in

Practice (Part I of the First Schedule to the Act)

4.1 Part I of the First Schedule to the Act deals with professional
misconduct in relation to Company Secretaries in practice. It contains
eleven clauses in all. The implications of various clauses in Part I are
briefly explained herein below.

4.2 Clause (1)

4.2.1 Clause (1) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“allows any person to practice in his name as a Company Secretary
unless such person is also a Company Secretary in Practice and is in
partnership with or employed by him.”

4.2.2 This rule is intended to ensure that the professional work is done by

16

Guidance Note on Code of Conduct for Company Secretaries
a qualified professional so as to protect the client’s/public interest.

The rule permits another person to practice in the name of a Company

Secretary in Practice provided such other person is also a Company

Secretary in Practice and is in partnership with or is employed by the

Company Secretary in Practice in whose name the work is to be
carried out.

4.2.3 This clause read with clause 11 of Part I of the First scheduled
does not permit PCS to allow any person to practice in his name as
a Company Secretary or to allow any person to sign as PCS, unless
such person is also a Company Secretary in Practice or is in partnership
with or employed by him;

4.2.4 On a question as to how CA / CWA can become partner(s) of PCS,

Council has opined that though for the time being CA/CWA etc.

cannot become partners of a PCS but after the amendments to the
relevant provisions, person(s) who are non members, may become
partners of PCS and may be allowed to provide non-attestation
services.

4.2.5 Two persons are said to be in Partnership when they work together
on mutual faith and agency. Sharing of remuneration does not make
them partners. Thus an associate who is not a part of decision making
process does not become a partner. Following tests if fulfilled
cumulatively may make two persons partners of each other.

i.

Sharing of profits and or losses.

ii.

Taking decisions together.

iii. Sharing the responsibilities of such decision making.

iv. Acting on behalf of each other and binding other person with
ones own acts of commission or omission.

4.2.6 Sharing of common infrastructure at same or different
geographical location are not relevant at al to decide the relationship.

4.3 Clause (2)

4.3.1 Clause (2) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“pays or allows or agrees to pay or allow, directly or indirectly, any
share, commission or brokerage in the fees or profits of his
professional business to any person other than a member of the

Institute or a partner or a retired partner or the legal representative
of a deceased partner or a member of any other professional body
or with such other persons having such qualifications as may be
prescribed, for the purpose of rendering such professional services
from time to time in or outside India.

Explanation — in this item, ‘partner’ includes a person residing

Guidance Note on Code of Conduct for Company Secretaries

17
outside India with whom a Company Secretary in Practice has entered
into partnership which is not in contravention of item (4) of this
part.”

4.3.2 This clause does not prohibit a Company Secretary in Practice from
sharing fees, commission or brokerage in the fees or profits of his
professional business, with any other member of the Institute or a
partner or a retired partner or the legal representative of a deceased
partner. Such sharing of fees, commission or brokerage in the fees
or profits of professional business is also permissible with members
of such professional bodies or with such other persons having such
qualifications as may be prescribed from time to time. This provision
is made primarily to encourage multi-disciplinary partnership.

4.3.3 In terms of clause (2) of Part II of the First Schedule to the Act, a
member of the Institute in service shall be deemed to be guilty of
professional misconduct, if he being an employee of any company,
firm or person, accepts or agrees to accept any part of fees, profits,
or gains from a lawyer, a Company Secretary or broker engaged by
such company firm or person or agent or customer of such company,
firm or person by way of commission or gratification. Accordingly a

Practicing Company Secretary cannot share fees with an employee

Company Secretary. Therefore, words ‘who is in practice’ are to be
read in Clause 2 of the Part I of the First Schedule, after the word

“institute”

4.3.4 The term ‘partner’ used in this rule would include ‘ ipso facto’

another Company Secretary in Practice or a member of any other
recognised profession under Section 2(2) of the Act. In regard to
sharing of fees with the legal representative of a deceased partner it
is desirable that the partnership deed contains a suitable covenant in
this behalf. In the case of a sole proprietorship firm, on the death of
the proprietor of the firm, there cannot be any sharing of fees
between the purchaser of the goodwill of the firm and the legal
representative of the proprietor. Payment of goodwill is permissible,
which can be in installments as provided in the agreement of sale of
goodwill. The payment of goodwill shall, in no circumstances be
linked with participation in the earnings of the firm of the buyer of
the goodwill.

4.3.5 It may appear that this Clause permits sharing of fees by PCS with
members of the Institute who are not employed but are practicing
as CA / CWA or an Advocate. However this does not appear to be
the intention. The term”Professional Business” used may be
understood as professional activities.

4.3.6 For the time being at least, Council has not permitted PCS to have

Partnership with CA/CWA and other professionals. However, the
modalities are being worked out, to permit PCS to have Partnership
with CA / CWA. Bill is pending before the Parliament in this regard.

18

Guidance Note on Code of Conduct for Company Secretaries

4.3.7 It is to be further understood that as and when permitted, CA/CWA
may become partners of PCS only for non attestation services, i.e.

only for the purposes as contemplated by clause nos. 2, 3, 4 & 5 of
the First Schedule and CA / CWA cannot become ful fledged partners
as contemplated by Clause 1 of Part I of the First Schedule. That is
to say a PCS even if he is allowed to be a partner of a Chartered

Accountant, will not be able to sign the Auditors report on behalf of
the multidisciplinary firm.

4.3.8 Council in its 177th meeting held on 27th November, 2007 has
passed following resolution :

“168A. Other Professional bodies.—

(1)

For the purposes of clauses (2), (3) and (5) of Part I of the First

Schedule to the Act, a person has to be member of any of
the following, namely: -

(a) The Institute of Chartered Accountants of India established
under the Chartered Accountants Act, 1949 (No.38 of

1949);

(b) The Institute of Cost and Works Accountants of India
established under the Cost and Works Accountants Act,

1959 (No. 23 of 1959);

(c) The Bar Council of India established under the Advocates

Act, 1961 (No.25 of 1961);.

(d) The Indian Institute of Architects established under the

Architects Act, 1972(No.20 of 1972);

(e) The Institute of Actuaries of India established under the

Actuaries Act, 2006 (No.35 of 2006);

(f) the membership of the professional bodies or institutions
whose qualifications relating to Company Secretaryship
are recognized by the Council under sub-section (2) of

Section 38 of the Act.

(2)

For the purposes of clauses (2), (3) and (5) of Part I of the First

Schedule to the Act, the fol owing shal be the persons qualified
in India, namely:-

(a) Chartered Accountant within the meaning of the

Chartered Accountants Act, 1949;

(b) Cost Accountant within the meaning of the Cost and

Works Accountants Act, 1959;

(c) Actuary within the meaning of the Actuaries Act, 2006;

(d) Bachelor in Engineering from a University established by
law or an institution recognized by law;

Guidance Note on Code of Conduct for Company Secretaries

19

(e) Bachelor in Technology from a University established by
law or an institution recognized by law;

(f) Bachelor in Architecture from a University established by
law or an institution recognized by law;

(g) Bachelor of Law from a University established by law or
an institution recognized by law;

(h) Master in Business Administration from Universities
established by Law or Technical Institutions recognized
by All India Council for Technical Education.”

The resolution amends the Company Secretaries Regulations, 1982.

The amendment was notified in the Gazette of India Extraordinary
dated 26th of July 2010.

For copy of Resolution under Regulations, 1982, please refer

Annexure - III

4.4 Clause (3)

4.4.1 Clause (3) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“accepts or agrees to accept any part of the profits of the professional
work of a person who is not a member of the Institute:

Provided that nothing herein contained shall be construed as
prohibiting a member from entering into profit sharing or other similar
arrangements, including receiving any share commission or brokerage
in the fees, with a member of such professional body or other person
having qualifications, as is referred to in item (2) of this part.”

4.4.2 This is the converse of clause (2) discussed (supra at para 4.3) wherein
a Company Secretary in Practice can partake of his profits with other
members of the Institute and with members of any other professional
bodies specified in this regard or with such other persons having
such qualifications as may be prescribed, under clause (3) a Company

Secretary in Practice as recipient can enter into profit sharing
arrangement with a member of the Institute and/or with a member
of such other professional body or other person having qualifications,
as is referred to in clause (2).

4.5 Clause (4)

4.5.1 Clause (4) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“enters into partnership, in or outside India, with any person other
than a Company Secretary in Practice or such other person who is a
member of any other professional body having such qualifications
as may be prescribed, including a resident who but for his residence
abroad would be entitled to be registered as a member under
clause (e) of sub-section (1) of section 4 - or whose qualifications
are recognised by the Central Government or the Council for the
purpose of permitting such partnerships .”

20

Guidance Note on Code of Conduct for Company Secretaries

4.5.2 This clause prohibits a Company Secretary in Practice entering into
partnership with any person other than a Company Secretary in

Practice or a member of any other recognised profession. Even
entering into partnership with persons, who are not members of the

Institute, for the purposes of carrying on a business and not the
profession of Company Secretaries, would attract the mischief of
the clause.

4.5.3 Also, partnership with any other person residing outside India but
possessing qualifications recognised by the Central Government or
the Council under section 4(1)(e) of the Act, is permitted. The
purpose behind clause (4) is that a Company Secretary in Practice
should not enter into partnership with any non-recognised
professionals. In recognising any other profession for partnership,
the compatibility of the other profession with the Company

Secretaries’ profession would be a relevant factor. The other
professions referred to in this clause cannot be any different from
those as may be recognised under section 2(2) of the Act. Practicing

Company Secretary may share the fees or profits of the partnership
both within and outside India.

4.5.4 The Council has passed the resolution by inserting the following
regulation in CS Regulations, 1982.

“168B. Membership of Professional body for Partnership — (1) For
the purposes of entering into partnership under clauses (4) and (5)

of Part I of the First Schedule to the Act, a person shal be a member
of any of the following professional bodies, namely:-

(a)

The Institute of Chartered Accountants of India established
under the Chartered Accountants Act, 1949 (No. 38 of 1949);

(b)

The Institute of Cost and Works Accountants of India
established under the Cost and Works Accountants Act, 1959

(No. 23 of 1959);

(c)

Bar Council of India established under the Advocates Act,

1961 (No.25 of 1961);

(d)

The Institute of Engineers or Engineering from a University
established by law or an institution recognized by law;

(e)

The Indian Institute of Architects established under the

Architects Act, 1972 (No.20 of 1972);

(f)

The Institute of Actuaries of India established, under the

Actuaries Act, 2006 (No. 35 of 2006);

(g)

Professional bodies or institutions outside India whose
qualifications relating to Company Secretary recognized by
the Council under sub-section (2) of Section 38 of the Act.”;

The resolution amends the Company Secretaries Regulations, 1982.

Guidance Note on Code of Conduct for Company Secretaries

21

The amendment was notified in the Gazette of India Extraordinary
dated 26th July, 2010.

4.6 Clause (5)

4.6.1 Clause (5) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he—

“secures, either through the services of a person who is not an
employee of such Company Secretary or who is not his partner or
by means which are not open to a Company Secretary, any
professional business.

Provided that nothing herein contained shall be construed as
prohibiting any arrangement permitted in terms of items (2), (3)

and (4) of this part.”

4.6.2 This clause frowns upon discreditable practices in securing
professional work. The clause covers instances of obtaining
professional work by unethical means and by means which are not
open to a Company Secretary.

4.6.3 Council has issued guidelines for advertisement by PCS. These
guidelines were approved by the Council in its 178th Meeting held
on 29th of December, 2007. A PCS can therefore, within the
parameters of the above guidelines issue advertisement / launch his
own website and such action on the part of PCS would not be
treated as violation of Clause 5 as well as Clause 6 of the Part I of
the First Schedule.

Clause 5 of part I of first schedule is very clear that no member in
practice should secure any professional business through propagation,
etc., the member in practice have to be cautious that any kind of
wording or message in the website created by them shal not indicate
or imply securing/solicitation of business/client.

However any act of omission or commission beyond the permitted
methods as per the guidelines would amount to misconduct. Text
of the Advertisement Guidelines is placed as Annexure-IV to this

Guidance Note .

4.7 Clause (6)

4.7.1 Clause (6) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“solicits clients or professional work, either directly or indirectly, by
circular, advertisement, personal communication or interview or by
any other means:

Provided that nothing herein contained shall be construed as
preventing or prohibiting-

(i)

any Company Secretary from applying or requesting for or

22

Guidance Note on Code of Conduct for Company Secretaries
inviting or securing professional work from another Company

Secretary in practice; or

(ii)

a member from responding to tenders or enquires issued by
various users of professional services a organisations from time
to time and securing professional work as a consequence.”

4.7.2 This clause further fortifies the proposition under clause (5) supra
about securing clients or professional work. Solicitation of clients or
solicitation of professional work or both, are prohibited. Such a
solicitation may be direct or indirect and such a solicitation may
further be by means of a circular, advertisement, personal
communication or interview or any other means. The bedrock of
this rule is that a professional should gain recognition by rendering
expert services, to a few though in the beginning, who would
themselves lead others to him. A true professional should command
honour and not demand it. The conduct of the member is noted all
the times by the society at large and their ethics and integrity towards
the profession itself is sufficient for growth. So, the purpose of this
clause is, to ensure that a professional secures work by his credibility,
reliability and integrity in the public eyes and not by advertisement
adversely affecting the image of the professional and also the
profession.

4.7.3 The word ‘solicit’ has various shades of meaning. According to

Legal Thesaurus, it means bait, (lure) desire, importune, inquire,
lobby, petition, plead (implore), apply (request), pray, pressure,
pursue, (strive to gain), urge. ‘Solicit’ means ‘ask for’ or ‘seek’.

Means of solicitation may be a circular, advertisement, personal
communication or by any other means. The phrase ‘by any other
means’ used in this clause would perhaps exhaust other means like
telephonic conversation, mail, electronic means and messages/social
media or even third party solicitation.

4.7.4 The word ‘indirectly’ used in this clause suggests that even innuendos
would not be tolerated under this clause. If the overall message of
the alleged act is solicitation of clients or professional work, though
this lurks or lies beneath what has apparently been done, clause 6
would stand attracted.

4.7.5 It would not be possible to exhaustively provide for all situations
where it can be said there was solicitation of clients or professional
work. But the fol owing may be cited as illustrative examples where
the Council was of the opinion that clause 6 may get attracted:

(1)

Circular or advertisement in newspapers indicating the range
of services offered by him.

(2)

A circular letter offering secretarial services and professional
work.

(3)

Any circular, advertisement or communication which creates

Guidance Note on Code of Conduct for Company Secretaries

23
an impression that certain professional work would be done
much more expeditiously than is normally the case. Like for
instance, registration of a company in, say, two days’ time or
registration of a charge in one day’s time, etc.

(4)

Circular, advertisement or personal communication highlighting
any provision of any law, to person other than existing clients,
which provides for certification/ authentication by a Company

Secretary in Practice of any form/return/application/document.

(5)

Issuing hand bills covering matters in (1) to (4) above.

(6)

Publication in the telephone directory, name and address in
extra bold typeface or opting for more than one listing.

However, where separate sections are devoted in the
telephone directory (yellow pages, for instance) for a classified
list, publishing the name and address by a member in such
sub-section in the directory would not be treated as
misconduct. But any kind of message or writing which indicates
tall claims, supremacy and superiority in professional
attainments wil tantamount to solicitation of clients, indirectly.

(7)

Communicating or holding out, as being prepared to provide
professional services at fees that are less than reasonable and
appropriate in the circumstances, in order to obtain professional
work.

(8)

Communicating or describing himself as a ‘specialist’ in any
branch of law/work or knowingly permitting himself to be so
described.

(9)

A member allowing a company to carry in its prospectus or
other circular letters that ‘Mr. X a specialist in corporate laws
is the adviser to the company’ would offend clause (6).

However printing the name of Practicing Company Secretary
as Secretarial Auditor in Annual Report will not violate the
provisions of the Act.

(10)

Requesting his client(s) to recommend his/their acquaintances
to him for professional work.

(11)

Frequent press announcements or circulars about his not being
available for professional work for a certain period at the place
whereat he normally has his office.

(12)

Highlighting or causing to be highlighted in public interviews
over the television, AIR, etc. their professional attainments,
more than just necessary or warranted by the circumstances
of such an interview, making tall claims, indicating supremacy
over other professional colleagues, etc. However sending
bio data to organizers of the programmes/seminars, etc. ,

24

Guidance Note on Code of Conduct for Company Secretaries
where they have been invited as a faculty, is not violative of
this clause.

(13)

Writing to any institution/agency that though, he is in the
panel; no work has been allotted to him. Even approaching
through a third person is violative of this clause.

(14)

Approaching any trade association/chamber of commerce/
business forum, communicating his ready availability for
rendering any professional service to the constituents of any
association or chamber.

(15)

Sending his profile to persons/companies/firms without any
requisition for the same.

(16)

Including names of other professionals in his profile circulated
to various persons.

4.7.6 The Professional Development Committee of the Council of the

Institute has opined that listing of services by a Company Secretary
with a group for creation of network of affiliates which is
non-professional and not a group of company secretaries would
amount to commercialization of the profession and therefore such
listing would amount to violation of the Code of Conduct.

4.7.7 However, the following would not fall into the mischief of clause

(6):-

(1)

publishing in the journal of the Institute or newspaper any
change in the professional address;

(2)

publishing in professional journals, newspapers and
magazines in any classified column, any advertisement for
recruitment of staff without in any way giving an impression
about the services that he can render, or in other manner
smacking of solicitation of work;

(3)

publishing information regarding changes in the constitution
of firm, provided the information contained therein is limited
to bare facts and consideration given to appropriateness of
the area in which the newspaper or magazine is circulating
and the number of insertions;

(4) sending New Year or any other seasonal greetings without narrating
the list of services, professional attainments, supremacy or any kind
of indication seeking clients.

(5) appearance in AIR, TV or any stage in private capacity as a speaker,
actor or otherwise on programmes having no nexus with his
profession. Any reference to him only as a Company Secretary and
nothing beyond that in such programmes would not offend clause

(6);

Guidance Note on Code of Conduct for Company Secretaries

25

(6) appearance or participation in professional capacity in the AIR/TV
or other forums where a reasonable amount of biographical material
may be given without in any way referring to the member as specialist
in any branch of work;

(7) editing/publishing any professional journal, newspaper and
magazines;

(8) writing articles/comments in professional journals, magazines and
newspapers;

(9) associating with charitable, other welfare associations and trade
associations without in any way using such position to solicit clients/
professional work;

(10) writing to his existing clients about implications/interpretations of
any law or amendments thereof by way of any circular, newsletter
or any personal communication or by way of print/electronic means
of communication.

The Council of the Institute in a case held that the Conduct of the
member in practice by mentioning against his name ‘Company

Secretary’ in the issue of ‘Secretarial Aid’ a journal edited by him
was violative of Clause (6) of Part I of First Schedule to the Act. It
was observed that the words ‘for further clarification please contact
the Editor’ was an indirect attempt to solicit professional work.

Responding to a specific letter or a fol ow up of personal discussions
and sending a profile of a firm/individual to specific addresses is not
prohibited.

(11) Stating the assignments handled by him in his profile. However, the
name of the clients should be supplied only against specific request
of the client for the same.

(12) Issuing advertisement in Chartered Secretary for opening branch or
seeking partnership with other members.

(13) Issuing advertisement or launching website within the frame work
of guidelines issued by the Council about advertisement by PCS.

(14) Securing professional work from another PCS is now expressly
permitted.

(15) Responding to tenders or enquires issued by various users of
professional services and securing professional work as a
consequence is now expressly permitted.

4.8 Clause (7)

4.8.1 Clause (7) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“advertises his professional attainments or services, or uses any

26

Guidance Note on Code of Conduct for Company Secretaries
designation or expressions other than Company Secretary on
professional documents, visiting cards, letterheads or signboards,
unless it be a degree of a University established by law in India or
recognised by the Central Government or a title indicating
membership of the Institute of Company Secretaries of India or of
any other institution that has been recognised by the Central

Government or may be recognised by the Council.

Provided that a member in practice may advertise through a write
up setting out the services provided by him or his firm and particulars
of his firm subject to such guidelines as may be issued by the

Council.”

4.8.2 This clause covers two aspects - (i) advertisement of professional
attainments or services by a Company Secretary in Practice and (ii)

using the designation ‘Company Secretary’.

4.8.3 As regards the ban on advertisement of professional attainments or
services, almost all the professions all over the world had this type
of restriction at least to start with. The idea behind this restriction
was that advertisement by professionals is incompatible with the
qualities of integrity and independence which a professional is
expected to possess, especially when these acts are motivated by a
desire for personal gain. The advertisement of professional attainment
or services under this clause is completely prohibited except where
the Company Secretary in Practice advertises as per the guidelines
issued by the Council, through a write up setting forth services
provided by him or his firm.

4.8.4 A PCS cannot include in his advertisement following particulars like
the infrastructure available in his own office, details of Associate

PCS, details of his networking in other places within & outside India,
infrastructure at such networked offices, number of trainees who
have completed training from his office, certain landmark
achievements like number of companies incorporated since he
started his practice, number of appearances made before CLB/NCLT,

CBDT, Tribunals , Regulatory Authorities, Commissions , number of

Foreign Collaborations handled, number of Merger & Acquisitions
handled, Number of due diligence carried out etc.

4.8.5 Council is of the view that a PCS can be permitted to allow his
clients to use his name in their brochure/ hoardings etc. e.g. , Builders
invariably write the names of Architects, RCC Consultants, legal
advisors on the Board at the construction site. Similarly the name of

PCS may also be written. Certain software companies desire to use
the name of PCS in their marketing brochure for their products
while giving a list of satisfied customers. A PCS is permitted to
allow his name to be used as one of the satisfied customers of
particular software.

4.8.6 What amounts to advertisement of professional attainments or

Guidance Note on Code of Conduct for Company Secretaries

27
services is to be decided on a case to case basis, having regard to
the attendant facts. For instance, where in the visiting card or name
board or letterhead, a member in practice mentions that he is a
specialist or expert in company law, tax law, etc. it would amount to
advertisement of professional attainments or services.

4.8.7 Where a member in practice furnishes upon a specific request by a
prospective client, a list of companies for whom he is a consultant/
retainer or writes his specific subjects of specialisation, it may not
be objectionable.

4.8.8 Where in the letterhead or visiting card, a member in practice
mentions that he was or is holding directorships in any company; it
would be offending this clause.

4.8.9 Advertisement by a Practicing member for staff for his office in the
press should in no way savour of any advertisement of professional
attainments or services. The use of certain adjectives like “a reputed
firm”, “a well-known firm”, etc. may be treated as inconsistent
with the spirit of this clause. Similarly, announcement in the press
by a Practicing member in regard to certain attainments like having
been named for certain public awards, acquisition of merit in other
professional examinations and other recognitions in any important
committee, commission, governing body, etc. should be suitably
modified so as not to be construed as amounting to advertisement
of professional attainments or services. Advertisement for part-time
assignments fall under the mischief of this clause.

4.8.10 Circulars or announcement regarding change of address, or change
in the constitution of the firm should be very cautiously worded to
tell just the minimum necessary facts.

4.8.11 Where a Company Secretary in Practice has been appointed as
retainer/consultant by certain companies, it would not be proper to
either list the names of such companies in letterheads, visiting cards
or signboards or to circulate the list among prospective clients by
way of circular. However, including such names, while sending
individual profile in response to a specific enquiry is permitted.

4.8.12 Where a Company Secretary in Practice takes up the position of a
director in a company, it is incumbent on his part to exercise great
care in regard to references in any explanatory statement in notice
of the general meeting reappointing the Practicing Company

Secretary brochure or circular brought out in connection with an
issue of securities of the company etc. The member concerned is to
ensure personally that laudatory statements in such literature about
his professional competence, while highlighting the Board’s
competence as a whole, are avoided; otherwise liability under clause

(7) would attract.

4.8.13 The Council held a member guilty of professional misconduct for

28

Guidance Note on Code of Conduct for Company Secretaries
misusing the Institute’s letter head, brochures, circulars, etc.

mentioning his name with designation, description and the Practicing
field other than as prescribed and thus misleading the readers by
not mentioning his whole time employment.

4.8.14 This clause also speaks of using the designation ‘Company Secretary’

on professional documents, visiting cards, letterheads, sign-boards,
etc. This requirement fortifies the provisions of section 7 of the Act
and in fact is an extension of the requirement in regard to the use of
proper designation. Designations like Company Law Consultant,

Income Tax Consultant, Corporate Adviser, Investment Adviser,

Management Consultant etc. are prohibited. The use of descriptions
indicating membership of the Institute of Chartered Accountants of

India, The Institute of Cost Accountants of India and the Bar Councils
is permitted provided members are not holding certificate of practice
issued by the Institute or using the description ‘Company Secretary’.

The use of the designation “Practicing Company Secretary”.

“Company Secretary in whole-time practice”, etc. is not violative of
this clause.

4.8.15 Where a member in practice had described himself in visiting cards
and letter heads as “Company Secretary & Advocate, High Court”,
the Council held the member guilty of professional misconduct under
this clause.

4.9 Clause (8)

4.9.1 Clause (8) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“accepts the position of a Company Secretary in Practice previously
held by another Company Secretary in Practice without first
communicating with him in writing.”

4.9.2 The primary requirement under this clause is of prior communication
with the previous incumbent. This is intended for reasons of
professional courtesy. The clause is not intended to prevent a client
from changing over to another Company Secretary for his own
reasons. The client as of right, has full freedom to change over to
another Company Secretary.

4.9.3 It would be desirable for the new incumbent to obtain a letter from
the company letting him know the name of the earlier incumbent
or that no other Company Secretary has been appointed for the
same assignment.

4.9.4 It is expressly clarified that the communication mentioned in this
clause does not mean that no-objection or consent of the previous
incumbent is a prerequisite of accepting the said assignment.

4.9.5 In regard to certification of Annual Return of listed companies under

Section 161 and issuance of compliance certificate under section

Guidance Note on Code of Conduct for Company Secretaries

29

383A of the Companies Act, 1956, and for all exclusive attestation
assignments, it is incumbent on the Company Secretary; to ascertain
if any other Company Secretary had been appointed previously by
the company concerned for certification of Annual Return or for
issuance of compliance certificate, as the case may be. The appointee
shall take positive steps to ascertain if anyone has been engaged
earlier, for the same year, for the certification work. In such cases it
is not only necessary for the Company Secretary to communicate
with the earlier incumbent, but it is desirable to seek his consent in
order to uphold the dignity and independence of the profession. lt
is further clarified that though communication is a must, obtaining
consent will not apply in cases of certification of Annual Returns for
different years.

4.9.6 It would be necessary that the communication, in order to be
effective, shall be by a registered letter or by hand with an
acknowledgement so that there is positive evidence of the
communication having been complete. In a case under a similar
rule of conduct under the Chartered Accountants Act, 1949, the

Rajasthan High Court in J S Bhati v. Council of ICAI (S.B. Civil

Misc. Appeal No. 136 of 1973) observed that mere obtaining a
certificate of posting does not fulfill the requirements of clause (8)

of Schedule I as the presumption under section 114 of the Evidence

Act that the letter in due course reached the addressee cannot
replace that positive degree of proof of delivery of letter to the
addressee which letters of the law in this case require.

4.9.7 The expression ‘in communication with’ when read in the light of
the instructions contained in the booklet ‘Code of Conduct’ cannot
be interpreted in any other manner but to mean that there should
be positive evidence of the fact that the communication addressed
to the outgoing auditor by the incoming auditor reached his hands.

Certificate of posting of a letter cannot, in the circumstances, be
taken as positive evidence of its delivery to the addressee. The

Court, therefore, has expressed the view that the communication
by a certificate of posting cannot be taken as a positive evidence of
its delivery to the addressee. A communication sent by hand which
has been properly acknowledged by the addressee would be effective
communication.

4.9.8 With the advent of use of the technology, it would proper
communication in this regard made by any other electronic medium
viz. , SMS, WhatsApp and such other Messenger apps is also
permitted, provided the sender (the PCS taking up the assignment)

is able to establish that the message is delivered to the recipient
before he or she takes up the assignment. Needless to mention,
that a reasonable time should be given to the previous incumbent
to offer his response, if any, and it is not just a kind of formality. For
sake of better clarity, the new incumbent should express clearly in

30

Guidance Note on Code of Conduct for Company Secretaries
the communication the details of assignment being taken up by
him.

4.9.9 Members have been held guilty of professional misconduct under
this clause for having accepted and commenced the certification of

Annual Return of a company without first communicating with the
earlier incumbent in writing. It has been concluded that mere posting
of the letter is not sufficient to comply with the requirements of
clause (8) of Part I of First Schedule to the Act, but the delivery of
the message to the addressee of the same is essential. Oral
communication is no communication as far as this clause is concerned.

4.9.10 To a question about whether communication ‘with’ contemplates
a dialogue, the Council is of the view that use of the preposition

‘with ‘ instead of ‘to‘ does not make it mandatory for the PCS to
obtain ‘no objection’ from the earlier incumbent. What is critical
for PCS (new incumbent) is to prove that he has sent a written
communication to the earlier incumbent before accepting a position
of PCS.

4.9.11 It has been observed that majority of the Disciplinary cases were in
respect of this clause about not sending written intimation by the
new incumbent (PCS).

4.9.12 While clarifying the scope of the words “accepting a position of

Company Secretary in Practice” Council has expressed a view that
need for sending a previous communication to the earlier incumbent
arises only in relation to exclusive area of practice under the Act.

Therefore, in respect of fol owing it shall not be mandatory (though
desirable) to send a prior written communication to the earlier
incumbent:

a.

certifying e-forms for various companies.

b. giving Due Diligence Certificate for consortium borrowers.

c.

holding assignment as retainer for a company or group of
companies.

d. issuing search reports.

e. Issuing certificates as contemplated by SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.

f.

giving legal opinion.

4.9.13 In respect of the following, it shall be mandatory to send a prior
written communication (including means mentioned above in 4.9.8)

to the earlier incumbent:

(i) Signing / Certification of Annual Return

(ii) Issuance of Secretarial Audit Report in terms of Section 204
of the Companies Act, 2013

Guidance Note on Code of Conduct for Company Secretaries

31

(ii ) Issuance of Certificate of Securities Transfers in Compliance
with the Listing Agreement with Stock Exchanges

(iv) Certificate of reconciliation of capital, updation of Register of

Members, etc. as per the Securities & Exchange Board of

India’s Circular D & CC/Cir-16/2002 dated December 31,

2002

(v) Conduct of Internal Audit of Operations of the Depository

Participants

(vi) Certification under SEBI (Listing Obligations & Disclosure

Requirments) Regulations, 2015.

4.11 Clause (10)

4.10.1 Clause (9) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he -

“charges or offers to charge, accepts or offers to accept, in respect
of any professional employment, fees which are based on percentage
of profits or which are contingent upon the findings or results of
such employment, except in cases which are permitted under any
regulations made under this Act.”

4.10.2 which determine remuneration based on results. For instance, if the

Company Secretary in Practice were to quote remuneration in an

Excise Refund case, as a percentage of the final amount of refund
that may be ordered by an appellate authority, it would be hit by this
clause. The fundamental is that the fee should be more related to
the expertise required and the time spent on a particular case without
in any way linking the fee with the final results.

4.11 Clause (10)

4.11.1 Clause (10) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“engages in any business or occupation other than the profession of

Company Secretary unless permitted by the Council so to engage:

Provided that nothing contained herein shall disentitle a Company

Secretary from being a director of a company except as provided in
the Companies Act.”

4.11.2 This clause is intended to ensure that a PCS does not engage in
vocations which are not compatible with the profession of Company

Secretary. This has been provided with a view to ensure the profession
develops in its true sense. Pursuant to the Company Secretaries

Regulations, 1982, the Council has decided not to issue certificate
of practice to members engaged in other professions such as

Chartered Accountants, Cost Accountants and Advocates and also
to members in employment. The said decision was taken by the

32

Guidance Note on Code of Conduct for Company Secretaries

Council to give an independent identity and status to the profession
and a thrust to the concept of Company Secretary in whole-time
practice.

4.11.3 The Council held a member guilty of professional misconduct under
this clause for engaging himself in employment while holding a
certificate of practice from the Institute.

4.11.4 The Council in an another case held a member guilty of professional
misconduct under this clause for holding the certificate of practice
of both the Institutes, i.e. , ICAI & ICSI without the permission of
the Council of the latter and also Practicing both the professions on
whole-time bases simultaneously.

4.11.5 Regulation 168(2) of the Regulations provides that a Company

Secretary may act as a secretary, trustee, executor, administrator,
arbitrator, receiver, appraiser, valuer, internal auditor, management
consultant or as a representative of financial matters including taxation
and may take up appointment that may be made by the Central or
any State Government, Courts of Law, labour tribunals, or any
authority. From the reading of Regulation 168, it is clear that the
various occupations provided in sub-regulation (2) thereof do not
require a specific resolution to be passed by the Council.

4.11.6 It is pertinent to refer to Regulation 168(1) which provides that the
prior permission of the Council by a resolution is required for a

Company Secretary to engage in any business or occupation other
than the profession of Company Secretary. The Council has expressly
permitted a PCS to take up following vocations:

(i) Acting as Private tutor.

(ii) Authoring Books and Articles.

(ii ) Holding of Life Insurance Agency License for the limited
purpose of getting renewal commission.

(iv) Holding of public elective offices such as M.P., M.L.A., M.L.C.

and others.

(v) Honorary office-bearership of charitable, educational or other
non-commercial organisations.

(vi) Acting as Justice of Peace, Special Executive Magistrate and
the like.

(vi ) Teaching assignment under the Coaching Organisation of the

Institute and other Institutes such as the Institute of Cost

Accountants of India, the Institute of Chartered Accountants
of India, Management Institutes, Universities and any col ege
affiliated to a University, and such other organisation as may
be recognised by the Council of the Institute from time to

Guidance Note on Code of Conduct for Company Secretaries

33
time, so long as the hours during which a member in practice
is so engaged in teaching do not exceed average three hours
in a day irrespective of the manner in which such assignment
is described or the remuneration receivable ( whether by way
of fixed amount or on the basis of any time scale of pay or in
any other manner) by the member in practice for such
assignment.

(vii ) carrying out valuation of papers, acting as a paper-setter, head
examiner or a moderator, for any examination.

(ix) Acting as editor of professional journals.

4.11.7 Permission to be granted specifically

Members of the Institute in practice may engage in the following
categories of business or occupation, after obtaining the specific
and prior approval of the Executive Committee of the Council in
each case:

1. Interest or association in family business enterprises even when
he does not hold substantial interest in such enterprises.

2. Office of Managing Director or whole-time Director of a body
corporate within the meaning of the Companies Act, 1956.

The Council may refuse permission in individual cases though
covered under any of the above categories.

For the purpose of the above, a member shall be deemed to
have a “substantial interest” in a concern:-

(i) in a case where the concern is a company, if its shares

(not being shares entitled to a fixed rate of dividend
whether with or without a further right to participate in
profits) carrying not less than twenty-five per cent of
voting power at any time during the previous year, are
owned beneficially by such member.

(ii) in the case of any other concern, if such member is entitled
at any time during the previous year, to not less than

25% of the profits of such concern.

4.11.8 A PCS can function as a non-executive director of a company. This
does not require any prior approval.

4.12 Clause (11)

4.12.1 Clause (11) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“allows a person not being a member of the Institute in practice or
a member not being his partner to sign on his behalf or on behalf of

34

Guidance Note on Code of Conduct for Company Secretaries
his firm anything which he is required to certify as a Company

Secretary, or any other statements related thereto.”

4.12.2 This clause further fortifies clause (1) discussed already. It is not
permissible for a Company Secretary in Practice to allow any person
to sign on his behalf or on behalf of his firm anything which he is
required to certify as a Company Secretary or any other statement
related thereto. The purpose is not to allow a member to have his
judgment and expertise substituted by the judgment of any other
person who is not a member in practice or his partner in the firm. To
take an instance, the annual return under Section 161 of the

Companies Act, 1956 has to be certified by a Company Secretary in

Practice himself. It is not possible to have the certification done by
a Company Secretary, say, through a power of attorney holder, even
though the holder of the power of attorney is an employee (of the

Company Secretary) who has been associated with the checking up
of various details furnished in the Annual Return.

4.12.3 PCS who is not a partner of another PCS can not sign on behalf of
such other PCS on Annual Returns, Compliance Certificates or

Secretarial Audit Report or any other certificates.

4.12.4 In e-governance era, a PCS on many occasions attaches his Digital

Signature to various forms / statements. Due care has to be taken
that such digital signature is attached only by the PCS himself. It
would be the exclusive duty and obligation of PCS to prevent any
unauthorized use of his Digital signature. PCS is not expected to
part with the password of his Digital signature.

5. Professional misconduct in relation to members of the Institute in
service

(Part II of the First Schedule to the Act)

5.1 Part II of First Schedule to the Act deals with professional misconduct
of a member of the Institute (other than a member in practice) if he
is an employee of any company, firm or person.

5.2 Part II of the First Schedule recognises the need for a member in
employment also to observe a certain code of conduct. To be in

‘employment’ connotes to be in a ‘contract of service’ and not

‘contract for service’. There are four indicia of a contract of service,
namely :-

(a)

master’s power of selection of his servant;

(b)

payment of wages or other remuneration;

(c)

master’s right to control the method of doing the work; and

(d)

the master’s right of suspension or dismissal.

Lord Denning pointedly observed, “under a contract of service, a
man is employed as part of a business, and his work is done as an

Guidance Note on Code of Conduct for Company Secretaries

35
integral part of the business; whereas under a contract for services,
his work although done for the business is not integrated into it but
is only accessory to it.”

5.3 One important issue which very frequently comes up is, the conflict
that may arise between the employer’s interest and the interest of
the member to uphold professional values and broader public interest.

The code of conduct formulated by the Institute originally in 1977,
emphasised the importance of a member in employment exercising
professional independence in relation to his work as well as his
endeavor to provide the highest quality of service attainable by him,
without reference to the monetary compensation. The idea being,
a member must have courage of conviction to express candidly his
considered professional opinion to his employer.

The Royal Commission in its Final Report on legal services submitted
to the British Parliament in October, 1979 categorically observed
that the standards of professional conduct and integrity which a
member of the legal profession in employment has to abide by are
the same as those who practice on their own account. Even though
the difference is that a salaried lawyer acts for only one client, unlike
a lawyer in practice who acts for several clients, the former must
uphold the same standards of honour and etiquette, observed the

Royal Commission. The Report recognised the continuing conflict
between loyalty to the employer and loyalty to the external body
enforcing the code of conduct. Nevertheless, whether a member is
in employment or in practice, his duty to uphold professional values
shall gain precedence over all other exigencies.

5.4 Part II and Part III of the First Schedule to the Act specify certain
instances of misconduct to which a Company Secretary in
employment may stand attracted. It has been mentioned earlier
that under section 21 of the Act, the Council’s power to direct
enquiry is not limited only to those contained in the Schedule to the

Act, in view of the fact that the phrase ‘other misconduct’ used in
section 21 is sufficiently broad enough to cover instances not
enumerated in the Schedule.

5.5 Clause (1)

5.5.1 Clause (1) of Part II of the First Schedule provides that a member of
the Institute (other than member in practice) shall be deemed to be
guilty of professional misconduct, if he, being an employee of any
company, firm or person—

“pays or allows or agrees to pay, directly or indirectly, to any person
any share in the emoluments of the employment undertaken by
him.”

5.5.2 This clause is analogous to clause (2) of Part I of the First Schedule in
some respects. A member in employment shal not share emoluments
of the employment with any other person, not even a member.

36

Guidance Note on Code of Conduct for Company Secretaries

Both direct and indirect sharing of the emoluments is prohibited.

However, it may be noted that under Part I of the First Schedule, a
member in practice can share the fee, commission or brokerage or
profits with any other member of the Institute who is his partner

(see para 4.3).

5.6 Clause (2)

5.6.1 Clause (2) of Part II of the First Schedule provides that a member of
the Institute (who is in service) shall be deemed to be guilty of
professional misconduct, if he, being an employee of any company,
firm or person—

“accepts or agrees to accept any part of fees, profits or gains from a
lawyer, a Company Secretary or broker engaged by such company,
firm or person or agent or customer of such company, firm or person
by way of commission or gratification.”

5.6.2 This clause vindicates the confidence and trust that an employer
reposes in an employee while the latter deals with any outsider on
matters relating to business. It is an implied term of any employment
that the employee concerned shall not secretly benefit from the
employment.

5.6.3 This clause is also analogous in some respects to clause (3) of Part I
of First Schedule.

6. Professional misconduct in relation to members of the Institute
generally (Part III of the First Schedule to the Act)

6.1 Part III of the First Schedule to the Act covers cases of professional
misconduct in relation to members of the Institute general y. Under
this Part, three specific instances have been categorised as
professional misconduct.

6.2 Clause (1)

6.2.1 Clause (1) of Part lll of the First Schedule provides that a member of
the Institute whether in practice or not shall be deemed to be guilty
of professional misconduct, if he —

“not being a Fel ow of the Institute, acts as a Fel ow of the Institute.”

6.2.2 This clause prohibits the practice of styling oneself as a Fellow, while
in fact he is not a Fellow member. A person is entitled to have his
name entered in the Register as a Fellow as per regulation 4(2) of
the Regulations. The Fellowship of the Institute suggests a certain
degree of status and seniority and obviously any wrongful
representation of such seniority amounts to breach of code of
conduct.

6.3 Clause (2)

6.3.1 Clause (2) of Part III of the First Schedule provides that a member of

Guidance Note on Code of Conduct for Company Secretaries

37
the Institute whether in practice or not, shall be deemed to be
guilty of professional misconduct, if he—

“does not supply the information called for or does not comply
with the requirements asked for by the Institute, Council or any of
its Committees, Director (Discipline), Board of Discipline, Disciplinary

Committee, Quality Review Board or the Appellate Authority.”

6.3.2 It is the duty of a member to supply information called for or to
supply the requirements asked for by the Council or any of its

Committees and other authorities. Non-compliance with this clause
would tantamount to breach of code of conduct.

6.3.3 The Council of the Institute in a case of professional misconduct,
held a member guilty of professional misconduct under this clause
for failure to disclose the fact of holding of the certificate practice of
the Institute of Chartered Accountants of India to the Council of

ICSI which was required to be made at the time of renewal of

Certificate of Practice.

6.3.4 A member of ICSI bound to give any and every kind of information
called from him since not providing information is a misconduct
under clause (2) of Part III of the First Schedule. It is presumed that
the concerned authorities would call only relevant information.

6.4 Clause (3)

6.4.1 Clause (3) of Part III of the First Schedule provides that a member of
the Institute, whether in practice or not, shall be deemed to be
guilty of professional misconduct, if he—

“while inviting professional work from another Company Secretary
or while responding to tenders or enquiries or while advertising
through a write up, or anything as provided for in items (6) and (7)

of Part I of this Schedule, gives information knowing it to be false.”

7. Other Misconduct in relation to members of the Institute generally

7.1 Clause 1 of Part IV

A member of the Institute, whether in practice or not, shall be
deemed to be guilty of other misconduct, if he is held guilty by any
civil or criminal court for an offence which is punishable with
imprisonment for a term not exceeding six months;

7.2 Clause 2 of Part IV

A member of the Institute, whether in practice or not, shall be
deemed to be guilty of other misconduct, if in the opinion of the

Council, he brings disrepute to the profession or the institute as a
result of his action whether or not related to his professional work.

7.2.1 Clause 2 of Part IV of the First Schedule provides that it shall be
misconduct if in the opinion of the Council, a member of ICSI brings

38

Guidance Note on Code of Conduct for Company Secretaries
disrepute to the profession or the institute as a result of his action
whether or not related to his professional work. Making an exhaustive
list of such misconduct may not be possible. Fol owing may amount
to misconduct under Clause 2 of Part IV of the First Schedule;
a.

Sending an e-mail to number of members (e-groups) criticizing
the decisions of the Council in derogatory and filthy language.

b.

Discussing through e forums failures of the Council/ president/
secretary by using derogatory and filthy language.

c.

Writing letter(s) in an aggressive, loud and filthy language to
the Ministry of Corporate Affairs, about working of ROC
offices/ MCA site, inability to upload forms etc.

d.

Arranging DHARANA/ agitations at the gates of the Govt.

Offices/ Institute’s offices in a manner not befitting a
professional.

e.

Instigating Students or other members by creating a
pandemonium in or around Institute’s offices by raising issues
pertaining to syl abus, training, examination or any other reason
what so ever.

f.

Misusing the confidential data available with the offices of
the Institute for personal purposes.

g.

Inviting Govt. Officers for Chapter’s / Regional Council’s

Programs by spending heavily on their travel & stay
arrangements, with an intention to get personal mileage.

h.

Tampering with the Books of Accounts/ Minutes of the
meetings of the Managing Committees of Chapter/ Regional

Councils.

8. Part I of the Second Schedule to the Act Section 21(3), 21(B)(3) and

22) where the matters are to be dealt with by the disciplinary
committee constituted by the Council

8.1 Part I of the Second Schedule to the Act deals with ten instances of
professional misconduct in relation to members in practice, which
require action by a Disciplinary Committee. The implications of
various clauses in Part I of the Second Schedule are briefly explained
herein below:

8.2 Clause (1)

8.2.1 Clause (1) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“discloses information acquired in the course of his professional
engagement to any person other than the client so engaging him,
without the consent of such client, or otherwise than as required by
any law for the time being in force.”

8.2.2 This clause indicates the position of trust and confidence reposed by
the client in a Company Secretary in Practice. A Company Secretary

Guidance Note on Code of Conduct for Company Secretaries

39
in Practice in the course of his professional engagement may come
into possession of vital information. Such information has to be kept
confidential unless consent of the client has been obtained to disclose
the same or the disclosure is required by any law. In the case of a
sole proprietor client, consent must be from the sole proprietor. In
case the client is a partnership firm, consent has to be given by all
partners if the partnership deed so provides; if the deed is silent,
any partner can give the consent on behalf of the firm in view of his
implied authority. In the case of Board-managed companies, the

Board has to give the consent unless it has specifically resolved to
delegate the power to any executive. Where the company is
managed by a managing director, he may give consent.

8.2.3 It is necessary to bear in mind that any communication acquired by
a Company Secretary in Practice in the course of his professional
engagement on behalf of his client, any communication or any advice
given by him to his client in the course and for the purpose of his
engagement is a privileged communication and should not be
disclosed by him without the express consent of his client. Similarly,
the Company Secretary in Practice should not disclose, without written
consent of his client, the contents or conditions of any document
with which he has become acquainted in the course and for the
purpose of his professional engagement.

8.2.4 It is observed these days that PCS retains the digital signature of his
client along with the password for the administrative convenience
of uploading the forms from the office of PCS. It is suggested that in
such a situation PCS should retain a formal letter signed by his
client authorising PCS to make use of his Digital signature. The
reason being once the forms are uploaded they appear on MCA
portal and come to public domain. In order to avoid any future
possible controversy, such authority letter would come handy for

PCS.

8.3 Clause (2)

8.3.1 Clause (2) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“certifies or submits in his name or in the name of his firm a report
of an examination of the matters relating to Company Secretarial
practice and related statements unless the examination of such
statements has been made by him or by a partner or any employee
in his firm or by another Company Secretary in practice.”

8.3.2 This clause is intended to imbibe in a member in practice, a higher
degree of responsibility and care while certifying any fact or a
statement. Either he himself or his partner or any employee of his
firm should have examined what is being certified. The words “or
by another Company Secretary in Practice” used in this clause

40

Guidance Note on Code of Conduct for Company Secretaries
envisage a situation where the responsibility for the certification is
undertaken by a Company Secretary in Practice, who is neither a
partner nor an employee of the Company Secretary concerned, for
an examination done by another member in Practice.

This clause prohibits PCS from certifying or submitting in his name a
report of an examination of the matters relating to company
secretarial practice unless the examination of such statements has
been made by him or by a partner or an employee in his firm or by
another Company Secretary in Practice. Trainees working in the office
of PCS are not to be considered as his employees for the purpose of
this item. Reference to “another Company Secretary in Practice” at
the end of paragraph refers to any PCS who may or may not be his
partner. Thus a PCS would be justified in relying on the search
report / examination done by another PCS and such reliance would
not violate Clause 1 of the First Schedule.

8.4 Clause (3)

8.4.1 Clause (3) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“permits his name or the name of his firm to be used in connection
with any report or statement contingent upon future transactions in
a manner which may lead to the belief that he vouches for the
accuracy of the forecast.”

8.4.2 This clause underlines the duty of a Company Secretary in Practice
to exercise utmost care in associating his name with any report or
statement about future happenings or contingencies. A Company

Secretary in Practice has to clearly disclose in the report or statement,
as the case may be, the sources of his information and the premises
on which the forecast is based. He shall further take care that he
does not vouch for the accuracy of the forecast. Restraint is therefore
required in subscribing to reports/statements, the contents of which
may or may not turn out to be true.

8.4.3 The future is always uncertain and there is always an element of
contingency. PCS can not become a fortune teller. PCS should not
certify any possible happening or non happening or give a report
about the future e.g., it would be improper for a PCS to certify the
future earning capacity, future shareholding pattern, future profitability
or similar future figures and numbers. If at all there is any occasion
for a PCS to sign such document he should clearly insert appropriate
disclaimer clause.

8.5 Clause (4)

8.5.1 Clause (4) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

Guidance Note on Code of Conduct for Company Secretaries

41

“expresses his opinion on any report or statement given to any
business enterprise in which he, his firm or a partner in his firm has
a substantial interest;”

8.5.2 This clause ensures that a professional has to be independent while
expressing any opinion. He should not have any substantial interest
in the business enterprise to which the report or statement pertains.

That would create a conflict with his duty. Expressing opinion or
giving any report with appropriate disclosers about his interest in
the report was permitted earlier. However under the new clause
there is a total ban on expressing opinion or giving any report about
any business enterprise in which he, his firm or a partner in his firm
has a substantial interest. ‘Substantial interest’ used in this clause is
not limited to financial interest only.

8.5.3 In this connection it may be stated that the Council has, pursuant
to Regulation 168 of the Regulations passed a resolution in which

‘substantial interest’ has been defined to mean an interest to the
extent of 25%. The same guideline is relevant under the above
clause also. If the business enterprise does not have a share capital,
say a sports club, which may be a company limited by guarantee
without Capital, the question whether PCS has substantial interest
in such Club would be a question of fact.

8.6 Clause (5)

8.6.1 Clause (5) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“fails to disclose a material fact known to him in his report or
statement but the disclosure of which is necessary in making such
report or statement, where he is concerned with such report or
statement in a professional capacity.”

8.6.2 This clause deals with the paramount duty of a member in practice
towards the user of any statement or report. The clause underlines
the need for full and complete disclosure as to make any statement
or report with which he is associated, true in every possible respect.

The aiding or abetting must be with reference to a material fact
known to him. If the member in practice does not know a material
fact, or he has no reason to come to know a material fact by any
means, there cannot arise any liability under this clause; also where
a material fact is known to him but in his considered opinion, there
is no reason to disclose them, the onus of defense would be on him
to prove that the non-disclosure of the material fact has not made
the statement misleading.

8.6.3 The expectation provided in this clause is something similar to the
golden rule in respect of prospectus. The report / statement signed
by PCS should contain truth, whole truth and nothing but the truth.

Half truth at times is more disastrous. For example: making a

42

Guidance Note on Code of Conduct for Company Secretaries
statement that company has continuous track record of dividend
declaration since incorporation, when the facts are that for last
three years dividend was being declared from accumulated profits
and not from current year’s profit. Making a statement that company
has continuous track record of dividend declaration since
incorporation would be half truth. The reader would be made to
believe that the company has sound financial health. Thus the full
facts should be disclosed by PCS by mentioning the fact that company
has continuous track record of dividend declaration since
incorporation, however since last three years dividend is being
declared out of reserves.

8.7 Clause (6)

8.7.1 Clause (6) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“fails to report a material misstatement known to him and with
which he is concerned in a professional capacity.”

8.7.2 This clause deals with non-disclosure by a member in practice of a
material misstatement known to him in any report with which he is
concerned.

8.7.3 What is ‘material misstatement’ is a question of fact. In a certificate
being issued under section 383A of the Companies Act,1956 if PCS
does not disclose a fact of not distributing dividend in 30 days from
the date of declaration would be a failure to report this fact.

8.8 Clause (7)

8.8.1 Clause (7) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“does not exercise due diligence, or is grossly negligent in the
conduct of his professional duties.”

8.8.2 This clause deals with due care that a member in practice has to
exercise in the discharge of his professional duties. The words used
in this clause “grossly negligent” imply that purely clerical errors or
an omission to give more details in any recommended course of
action will not fall within the sweep of this clause. What constitutes
gross negligence would depend upon the facts and circumstances
of each case.

8.8.3 The lCAl in their booklet ‘Code of Conduct’ have quoted the
following extract from the judgment of the Karnataka High Court,
in reference to an identical clause under the Chartered Accountants

Act, 1949:

”It is the duty of an auditor to bring to bear on the work he has to
perform that skill, care and caution which a reasonably competent

Guidance Note on Code of Conduct for Company Secretaries

43
and cautious auditor would use. What is reasonable skill, care and
caution must depend on the particular circumstances of each case.

An auditor is not bound to be a detective, or, as was said, to approach
his work with suspicion or with a foregone conclusion that there is
something wrong. He is a watch dog but not a blood-hound. If
there is anything calculated to excite suspicion he should probe it to
the bottom; but in the absence of anything of that kind he is only
bound to be reasonably cautious and careful. Professional misconduct
is a term of fairly wide import but generally speaking, it implies
fairly serious cases of misconduct of gross negligence. Negligence
per se would not amount to gross negligence. In the case of minor
errors and lapses, which do not constitute professional misconduct
and which, therefore, do not require a reference to the disciplinary
committee, the Council would nevertheless, bring the matter to
the attention of its members so that greater care may be taken in
the future in avoiding errors and lapses of a similar type“.

8.8.4 In Nemi Chand v. Commissioner, Nagpur Division ILR (1947 Nag

256 at 265 ,AIR 1948 24 at 27) it was held that gross negligence
imports high degree of careless conduct.

8.8.5 Where, for instance, a Company Secretary who is not in whole-
time practice as defined in section 2(45A) of the Companies Act,

1956 signs the Annual Return of a listed company pursuant to proviso
to sub-section (1) of Section 161 of the Companies Act, 1956, he
would be guilty of being grossly negligent under this clause. Similarly,
where a member in practice gives a certificate to a financial institution
regarding necessary powers of a company and its directors to enter
into an agreement without thoroughly verifying the Memorandum
and Articles of Association of the Company, he would be guilty of
misconduct under this clause. So also failure to check the resolutions
as contained in the minutes book while certifying copies of
resolutions would attract liability under this clause.

The difference in between the two expressions “Not exercising due
diligence” and “being grossly negligent”- is of degree. In both the
situations it would amount to professional misconduct.

Following may be held to be the instances of “Not exercising due
diligence” or “being grossly negligent.”

a.

Certifying the following forms:

•

DIR-11 Notice of resignation of a director to the Registrar

•

DIR-12 Particulars of appointment of Directors and the
key managerial personnel and the changes among them
without having verified the documents.

b.

Certifying PAS - 3, return of allotment, without confirming
receipt of consideration for issue of shares or with out verifying
the share applications on record or without ensuring proper

44

Guidance Note on Code of Conduct for Company Secretaries
compliance of section 39 of the Companies Act, 2013 read
with Rule 12 of the Companies (Prospectus & Allotment of

Securities) Rules, 2014.

8.9 Clause (8)

8.9.1 Clause (8) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“fails to obtain sufficient information which is necessary for expression
of an opinion or its exceptions are sufficiently material to negate the
expression of an opinion.”

8.9.2 The first limb of this clause deals with the duty of a member in
practice to obtain sufficient information to warrant expression of an
opinion. Issuing of a wrong consumption certificate under the Import-

Export Regulations for instance, without obtaining all necessary
information required for the purpose, would get attracted to this
clause. The second limb of this clause requires that any opinion
expressed by a Company Secretary in Practice may be subject to
certain exceptions. But, where the exceptions are sufficiently
material, he should refrain from expressing an opinion, in other
words, the second limb of this clause gives scope for making minor
exceptions which are not important /material as to negate the very
expression of opinion itself.

8.10 Clause (9)

8.10.1 Clause (9) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“fails to invite attention to any material departure from the generally
accepted procedure relating to the secretarial practice.”

8.10.2 This clause deals with the duty of a member in practice to invite
attention to material departure from generally accepted secretarial
practice. As of now, there have evolved certain widely accepted
sound practices in regard to, say, share issue and transfers, share
transmission, servicing of corporate securities, meetings procedure
and other approvals, which are general y accepted as good secretarial
practices. Until the time the standard secretarial practices in respect
to any matter are recommended by the Institute for adoption are
made mandatory, a member in practice has to, by and large, conform
to existing well-recognised secretarial practices and invite attention
to departures which are material.

8.11 Clause (10)

8.11.1 Clause (10) provides that a Company Secretary in Practice shall be
deemed to be guilty of professional misconduct, if he —

“fails to keep moneys of his client other than fees or remuneration
or money meant to be expended in a separate banking account or
to use such moneys for purposes for which they are intended within
a reasonable time.”

Guidance Note on Code of Conduct for Company Secretaries

45

8.11.2 The purpose of this clause is firstly to ensure that the client’s money
is separately accounted for and secondly such money is specifically
used only for the purpose for which it is paid by the client.

Advance received from clients for expenses like traveling, conveyance
to be incurred by PCS need not be kept in a separate account,
however advance received from a client for payment of Statutory /
filing fees, Stamp duty to be paid by PCS on client’s behalf, must
be kept in a separate account. In case client has paid advance for
certain specific purpose, say for payment of fees and stamp duty for
incorporation of the company or for increase in authorized capital
such amount should be used in reasonable time. If the decision to
incorporate a company or increase in capital is postponed/ cancelled,

PCS should promptly return such advance and should not adjust his
fees from the amount so received for services rendered, if any, by
him, unless such adjustment is authosied by the client.

9. Professional misconduct in relation to members of the Institute
generally (Part lI of the Second Schedule to the Act)

9.1 Part II of Second Schedule to the Act covers professional misconduct
in relation to members of the Institute general y. The implications of
the four clauses included in this Part are explained herein below:

9.2 Clause (1)

9.2.1 Clause (1) of Part II of Second Schedule provides that a member of
the Institute whether in practice or not, shall be deemed to be
guilty of professional misconduct, if he —

“contravenes any of the provisions of this Act or the regulations
made there under or any guidelines issued by the Council.”

9.2.2 This clause requires every member to pay due obedience to the

Act, the Regulations and Guidelines issued by the council from time
to time. For instance, a member of the Institute not having a
certificate of practice representing that he is in practice (under section

24) or any violation of the rules relating to the conduct of elections

(under Rule 42 of the Rules)would become guilty under this Clause;
besides becoming liable for prosecution under section 24 of the

Act.

9.2.3 The Council of the Institute, found a member guilty of professional
misconduct under this clause for contravention of Section 6 of the

Act as he certified an Annual Return of a company without holding
a certificate of practice.

9.2.4 Following guidelines have been issued by the Council so far

1.

Display of particulars on website

2.

Approving firm’s name

3.

Compulsory attendance at PDP

46

Guidance Note on Code of Conduct for Company Secretaries

4.

Dress Code

5.

Maintenance of Register of attestation services

6.

Issue of advertisement by PCS

7.

Change of Name of a Concern/Firm

8.

Use of own Logo by PCS

9.

Peer Review

For a copy of the above Guidelines Refer Annexures to this Publication.

9.2.5 It is necessary for all the members to understand the guidelines and
follow the same in spirit and letter. It is also necessary to mention
here that contravention of any of the provisions of the Company

Secretaries Act, 1980 or the Company Secretaries Regulations, 1982
made there under or any guidelines issued by the council falls within
the ambit of clause (1), part II of the Second Schedule to the

Company Secretaries Act, 1980 and invites sterner actions.

9.3 Clause (2)

9.3.1 Clause (2) of Part II of Second Schedule provides that a member of
the Institute whether in practice or not, shall be deemed to be
guilty of professional misconduct, if he—

“being an employee of any company, firm or person, discloses
confidential information acquired in the course of his employment,
except as and when required by any law for the time being in force
or except as permitted by the employer.”

9.3.2 The employer and employee relationship is of trust and confidence.

This principle is embodied in this clause. The confidential information
may pertain to technical secrets, important policy decisions , business
strategies or any matter having a bearing on the interest of the employer.

9.3.3 Confidential information is a valuable asset for any employer.

Confidentiality has be maintained about members, customers,
employees, suppliers, product mix , future plans, proposals, list of
associates, affiliates, stake holders, dealers and financial information.

All confidential information must be used for the benefit and best
interest of the employer. Employee member must maintain the
confidentiality of the information which comes to his knowledge /
custody except when disclosure is authorized or legally required.

Confidential information includes all non-public information that
might be harmful or may have potential to cause harm to the
employer, if disclosed.

9.3.4 The confidential information, discussions, documents and data should
be dealt with utmost care and should not be shared or passed on to
undesirable persons / outsiders under any circumstances , directly
or indirectly.

Guidance Note on Code of Conduct for Company Secretaries

47

9.4 Clause (3)

9.4.1 Clause (3) of Part II of Second Schedule provides that a member of
the Institute whether in practice or not, shall be deemed to be
guilty of professional misconduct, if he—

“includes in any information, statement, return or form to be
submitted to the Institute, Council or any of its Committees, Director

(Discipline), Board of Discipline, Disciplinary Committee, Quality

Review Board or the Appellate Authority any particulars knowing
them to be false.”

9.4.2 This clause covers situation where a member includes in any
statement, return or form to be submitted to the Council any
particulars knowing them to be false. The purpose of this clause is
to ensure that a member submits accurate particulars, as are required
to be furnished by him to the Council. It is pertinent to know that
the clause is attracted only when the particulars furnished are known
to the member to be false. It was held in Metropolitan Life Insurance

Co. vs. S. Adam that the word ‘false’ has two distinct and well
recognized meanings —

(i) intentionally or knowingly or negligently untrue;

(ii) untrue by mistake or accident after the exercise of reasonable
care.

It is in the former sense that the term ‘false’ is to be understood in
this clause. This is abundantly made clear by the qualifying words,

‘knowing them to be false’. The word false itself implies something
more than mere untruth; it would even connote an intention to
deceive.

9.4.3 Where for instance, while submitting the application for the issue/
restoration of certificate of practice under Regulation 10(1) of the

Regulations, a member does not disclose that he is engaged in any
business/occupation other than the profession of company secretaries
when in fact he was so engaged, this clause would be attracted.

9.5 Clause (4)

9.5.1 Clause (4) of Part II of Second Schedule provides that :

“a member of the Institute whether in practice or not, shall be
deemed to be guilty of professional misconduct, if he defalcates or
embezzles moneys received in his professional capacity.”

9.5.2 This clause covers defalcation and embezzlement of moneys received
in professional capacity by a member and not in any other capacity.

The professional capacity referred to here would cover situations
contemplated under Section 2(2) of the Act and those specifically
covered under Regulation 168 of the Regulations. In as much as the

Act deals with professional misconduct, logically the misconduct

48

Guidance Note on Code of Conduct for Company Secretaries
must be something having a nexus, direct in that, with the discharge
of professional duties. However, this does not mean that other cases
of embezzlement are not misconduct. Section 21 of the Act is wide
enough to cover other acts not befitting to the member of the

Institute.

10. Part III of the Second Schedule

10.1 This part is about other misconduct in relation to members of the

Institute generally if a member of the Institute, whether in practice
or not, shall be deemed to be guilty of other misconduct, if he is
held guilty by any civil or criminal court for an offence which is
punishable with imprisonment for a term exceeding six months.

10.1.1 Part III does not get attracted at the very first instance of being held
guilty but it is attracted only after the final appeal, as it may be, is
disposed off and the member is held guilty.

10.1.2 It may be observed that this clause does not provide that the offence
for which a member is held guilty by any civil or criminal court for
an offence which is punishable with imprisonment for a term
exceeding six months involves moral turpitude. Therefore even for
an imprisonment for a term exceeding six months in an offense
which does not involve moral turpitude would attract the
consequences.

11. Conclusion

11.1 The whole gamut of discussion in the preceding paragraphs covering
various facets of conduct expected of members in employment and/
or in practice reflect in the main:

(i) the need for professional independence, integrity and
objectivity;

(ii) adherence to high standards;

(ii ) duty towards clients;

(iv) responsibilities towards fellow professionals; and

(v) responsibility to the public at large.

***

Guidance Note on Code of Conduct for Company Secretaries

49

Annexure I

SERVICES THAT CAN BE RENDERED AS PER THE RESOLUTION

PASSED BY THE COUNCIL UNDER CLAUSE (F) OF SUB-SECTION 2

OF SECTION 2 OF THE COMPANY SECRETARIES ACT, 1980

The Council in its 232nd (Adjourned) meeting held on 29th December,

2015 at New Delhi while considering the recommendations of the Practicing

Company Secretaries Committee passed the following resolution:

“RESOLVED THAT in supersession of the earlier resolution of the Council
passed at its meeting held on March 24-25, 2006 pursuant to the powers
granted under clause (f) of subsection (2) of section 2 of the Company Secretaries

Act, 1980, the Council of the Institute hereby specifies the following categories
of Management, Advisory and Other Services, which may be rendered by a

Company Secretary in Practice. Any of such services may be rendered by
practising members to corporations, bodies corporate, societies, trusts,
associations, enterprises, undertakings, clubs, non-trading corporations, industrial
co-operatives, co-operative societies, non-government organizations, local self
government bodies, estates, firms, small, medium and large industrial
undertakings, entrepreneurs, investors, and other persons in carrying out their
activities and operations :

·

Providing all services in MCA-21 Systems including those relating to

Front Office, Facilitation Centre, Filing Centre, Local Registration

Authority of Digital Signature Certificate Providers.

·

Conceptualisation, identification, crystallization of business enterprise,
industrial-project or business activity.

·

Carrying out feasibility studies, preparation of project reports, proposals
for business operations including setting up a new unit or enterprise,
as well as expansion, or diversification and also representations, fol ow-
up with financial institutions, Government and other authorities for
procurement of the requisite approval, clearance or permission in respect
of such proposals.

·

Guidance and support in relation to collaborations, joint ventures,
business agreements, arrangements, restructuring, contracts, tie-ups
in India and abroad.

·

Business planning, policy and management in all fields including
manpower, recruitment, employment, industrial relations, human
resource development, management information systems, marketing,
publicity and public relations.

·

Planning, supervision and carrying out of internal audit, systems audit,
labour audit, management audit, operational audit, quality audit, social
audit, environment audit and energy audit.

·

Risk management of properties, profits, resources, knowhow and
operations.

50

Guidance Note on Code of Conduct for Company Secretaries

·

Management, planning, representation and protection of trade marks,
patents and intellectual property service.

·

Procurement and management of materials and inventories.

·

Assessment, procurement and management of financial requirements
and resources including project finance, working capital finance, forex
management, loan syndication, portfolio management.

·

Evaluation and management of deployment of funds in investments,
assets and securities, loans, collaborations, tie-ups, joint - ventures.

·

Formulating and implementing al activities relating to capital structure
including creation, issue, offer, allotment, placement, procurement,
listing of shares, debentures, bonds, deposits, coupons, ADR, GDR,

IDR and all types of financial instruments.

·

Recovery-consultant in banking and financial sector.

·

Insurance advisor and other related activities including sale and
distribution of insurance products.

·

Acting as an arbitrator, mediator or conciliator for settlement of disputes
or being on the panel of arbitrators or representing in arbitration,
mediation or conciliation matters.

·

Acting as advisor to investors, depositors, mutual fund unit holders
and stakeholders.

·

Acting as advisor in relation to intermediary in securities and
commodities markets.

·

Due diligence and legal services.

·

Corporate governance services.

·

Competition law and practice.

·

Business process outsourcing, knowledge process outsourcing and legal
outsourcing.

·

Valuer, surveyor and loss assessor.

·

Investigator, private liquidator, insolvency practitioner; operating agency.

·

Sale purchase of real estate, real estate advisor and other related
activities.

·

Mutual funds advisor and other related activities including sale and
distribution of mutual funds.

·

Undertaking aggregative services.

·

Providing travel consultancy and other related activities.

·

Engaging in agricultural and other related activities”

***

Guidance Note on Code of Conduct for Company Secretaries

51

Annexure II

GUIDELINES FOR USE OF INDIVIDUAL LOGO BY COMPANY

SECRETARIES IN PRACTICE

In exercise of the powers conferred by Clause (1) of Part II of the Second

Schedule to the Company Secretaries Act, 1980 (56 of 1980), as amended by
the Company Secretaries (Amendment) Act, 2006, the Council of the Institute
of Company Secretaries of India hereby issues the following guidelines:

1. Introduction

1.1 The Institute of Company Secretaries of India, (the Institute) constituted
under the Company Secretaries Act, 1980 (the Act) is a statutory body
to develop and regulate the profession of company secretaries in India.

Members of the Institute who hold the Certificate of Practice issued
by it are authorised to practise the profession of Company Secretaries
and these members are known as Company Secretaries in Practice.

1.2 The Council of the Institute of Company Secretaries of India at its

230th meeting held on 17th June, 2015 approved the following

Guidelines for Use of Individual Logo by Company Secretaries in

Practice.

1.3 The Guidelines herein, as issued by the Central Council of the Institute
on 1st September, 2015 deal with the manner in which a Company

Secretary in Practice can design and use their individual logo on letter
head, visiting cards, uniform for the employees of their firm, websites,
advertisement materials, name boards, other stationery, invoices,
packing material, stickers, sponsorship material, etc.

1. Any non compliance or violation of these Guidelines as may be in
force from time to time in any manner whatsoever shall be deemed to
be an act of professional misconduct and the concerned member shall
be liable to disciplinary proceedings under the Act.

2. Key Definitions

For the purposes of these Guidelines,

2.1 The “Act” means the Company Secretaries Act, 1980.

2.2 “Institute” means the Institute of Company Secretaries of India.

2.3 “Advertisement or advertising” means advertisement or advertising in
any mode including written, recorded, displayed communication
through print or electronic mode or otherwise including in newspapers,
journals, internet, online, websites, banners, letters, circulars issued,
circulated or published in accordance with these guidelines.

2.4 “Brand” is the perceived emotional corporate image as a whole.

2.5 “Company Secretary in Practice” means a member of the Institute
who is in the practice of the profession of Company Secretaries in
terms of Section 2(2) of the Company Secretaries Act, 1980.

52

Guidance Note on Code of Conduct for Company Secretaries

2.6 “Practice Unit” means a sole practitioner, partnership or any other
entity of professional Company Secretaries as may be permitted by
law and constituted under The Company Secretaries Act, 1980 and

Regulations made thereunder.

2.7 “Identify” means the visual aspects that form part of the overall brand.

2.6 “Logo” is any visual construct that identifies a business in its simplest
form via the use of a mark or icon or any word written in a particular
manner or a combination of these. A logo identifies a company or
product via the use of a mark, flag, symbol or signature.

2.7 “Tag Line” refers to a memorable phrase or sentence that is closely
associated with a particular person, product, service, etc. It may be a
reiterated phrase identified with an individual, group, product or service.

The terms not defined herein shal have the same meaning as assigned
to them in the Company Secretaries Act, 1980, Trade Marks Act,

1999, Designs Act, 2000, Indian Copyright Act, 1957, The Emblems

And Names (Prevention of Improper Use) Act, 1950 and the rules and
regulations made thereunder.

3. Logo for Members

3.1 The members of the Institute have been allowed to use the following
logo on their visiting cards and letter head to indicate that an individual
company secretary is a member of The Institute of Company

Secretaries of India.

3.2 The Council of the Institute has laid down that while using the letters

‘CS’ on their letter heads and visiting cards, the company secretaries
need to ensure that the width of the logo when used along with the
name of the member should not be more than 125% of the size of
the characters used for publishing the name. When the ‘CS’ logo is
used as a standalone on visiting cards and letter heads then it should
not exceed 1cm (0.39 inch) in height. The logo is to be printed in
navy blue colour only.

3.3 The same logo may be used on the website of the firm of Company

Secretaries in Practice, visiting cards, name boards and advertisements
whether in print or electronic media.

3.4 If, for any reason, an individual’s membership should lapse or be
cancelled, the logo must immediately be removed from any written,
printed or electronic materials maintained, displayed or distributed.

3.5 The Logo for members cannot be modified, manipulated or changed

Guidance Note on Code of Conduct for Company Secretaries

53
in any way from its original design, nor can it be used as a feature or
design element of any other logo (e.g. a PCS firm logo).

3.6 The CS member logo cannot be used to imply an endorsement by

ICSI of any PCS firm or any practice group.

3.7 The CS Member logo is open only to individual Company Secretaries,
not to firms of Company Secretaries in Practice. Therefore, use of the
logo cannot imply membership in ICSI by a firm, only by an individual

Company Secretary.

1. ICSI reserves the right to monitor the use of the logo at all times
and may direct a member who is in violation of these usage
guidelines to remove the logo immediately at the member’s cost.

2. The Individual Logo

4.1 A logo is something very specific that one can see. It’s a mark,
something graphic / visual. It is the face of the business. It’s like a
small “ad” that can be put at various places for brand building. It can
be used on business cards, websites, power point presentations,
apparel, letterheads, stickers and more.

4.2 While designing the individual LOGO each member shall ensure the
following:

(i) The Logo is not in contravention of the provisions of the Company

Secretaries Act, 1980, Trade Marks Act, 1999, Designs Act, 2000,

Indian Copyright Act, 1957, The Emblems And Names (Prevention
of Improper Use) Act, 1950 and the rules and regulations made
thereunder.

(ii) The Logo is professional and gives a good impression about the

Practice Unit.

(ii ) The Logo of the Practice Unit is representative of the name of the

Practice Unit or the services provided by the Practice Unit.

(iv) If any tag line is used along with the Logo then the tag line and
the Logo are in cohesion.

(v) In case the Logo is used in a website or in a power point
presentation or in any digital media then it is either static or if
animated the same is sober looking.

(vi) In case the logo is used in digital media and some music / jingle
is attached to it, then the music should be soothing and should
establish a connect with the logo.

(vi ) The Logo shall be in compliance with the ethical principles
enshrined in the Code of Conduct issued by the Institute.

(vii ) The Logo shal conform to the highest levels of dignity and ethical
behaviour.

54

Guidance Note on Code of Conduct for Company Secretaries

(ix) The Logo is consistent with the core idea that make up the Practice

Unit, showing what it stands for, what it believes in and why it
exists.

(x) In case a particular typography is used in creating a Logo design,
then such typography should be simple and legible.

(xi) The Logo is legible when used in any media such as newsprint,
electronic media and mobile devices.

(xi ) The Logo is not an imitation of an existing Logo of any organisation
or brand.

(xii ) The development of the logo must be supported by an explanation/
justification as to meaning, objectives of each word / design of
logo, which shall be produced by the firm, on demand by the

Institute.

4.3 Undesirable Logo

(1) The logo shall be considered undesirable, if it includes any word or
words which are offensive to any section of the people;

(2) The logo shall also be considered undesirable, if¬

(i) the proposed logo is identical with or too nearly resembles the
logo of a Practice Unit;

(ii) it is not in consonance with the principal objects of the practice
unit Provided that every logo need not be necessarily indicative of
the objects of the Practice Unit, but when there is some indication
of objects in the logo, then it shall be in conformity with the
objects of Practice Unit;

(ii ) it resembles closely the popular or abbreviated description of an
existing Practice Unit;

(iv) the logo implies association or connection with embassy or
consulate or a foreign government;

(v) the logo includes or implies association or connection with or
patronage of a national hero or any person held in high esteem or
important personages who occupied or are occupying important
positions in Government;

(vi) the logo is identical to the logo of a Practice Unit dissolved as a
result of liquidation proceeding and a period of two years have
not elapsed from the date of such dissolution:

(vi ) the logo include words such as ‘Insurance’, ‘Bank’, ‘Stock Exchange’,

‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc.,
unless a declaration is submitted by the applicant that the
requirements mandated by the respective regulator, such as IRDA,

RBI, SEBI, MCA etc. have been complied with by the applicant;

Guidance Note on Code of Conduct for Company Secretaries

55

(vii ) the proposed logo includes the word “State”,

(ix) it is intended or likely to produce a misleading impression regarding
the scope or scale of its activities which would be beyond the
resources at its disposal:

(3) The following words and combinations thereof shall not be used as
part of a logo in English or any of the languages depicting the same
meaning ¬

(a) Board;

(b) Commission;

(c) Authority;

(d) Undertaking;

(e) National;

(f) Union;

(g) Central;

(h) Federal;

(i) Republic;

(j) President;

(k) Rashtrapati;

(l) Small Scale Industries;

(m) Khadi and Village Industries Corporation;

(n) Financial, Corporation and the like;

(o) Municipal;

(p) Panchayat;

(q) Development Authority;

(r) Prime Minister or Chief Minister;

(s) Minister;

(t) Nation;

(u) Forest corporation;

(v) Development Scheme;

(w) Statute or Statutory;

(x) Court or Judiciary;

(y) Governor;

56

Guidance Note on Code of Conduct for Company Secretaries

(z) the use of word Scheme with the name of Government (s), State,

India, Bharat or any government authority or in any manner
resembling with the schemes launched by Central, state or local

Governments and authorities; and

(za) Bureau

4.4 Use of the individual LOGO The individual logo may be used on

(i) Stationery (Letterhead, business cards, envelopes, etc.)

(ii) Branding Collateral (Flyers, brochures, books, website, etc.)

(ii ) Apparel Design (Tangible clothing items that are worn by
employees)

(iv) Signage (Interior & Exterior design)

(v) Messages & Actions (Messages conveyed via indirect or direct
modes of communication)

(vi) Other Communication (Audio / video, etc.)

(vi ) Anything visual that represents the business.

5. Disclaimer

The contents or design of the logo are the sole and exclusive
responsibility of the member. The Institute of Company Secretaries of

India shall not own any responsibility whatsoever for such contents or
claims by the member.

6. Responsibility for the observance of these Guidelines

6.1 The responsibility for the observance of these guidelines lies with
members who create, place or publish any Logo or assist in the creation
or publishing of any Logo covered under these guidelines.

6.2 Members are expected not to commission, create, place or publish
any Logo which is in contravention of these Guidelines. This is a self
imposed discipline required to be observed by all those involved in
the commissioning, creation, placement or publishing of Logo(s).

7. EFFECTIVE DATE:

7.1 These guidelines become effective from 1st September, 2015.

By order of the Council

***

Guidance Note on Code of Conduct for Company Secretaries

57

Annexure III

RESOLUTION UNDER REGULATION 168 OF THE COMPANY

SECRETARIES REGULATIONS, 1982 ALLOWING MEMBERS IN

PRACTICE TO CARRY OUT NON-ATTESTATION SERVICES

THROUGH THE NEW BUSINESS STRUCTURE OF LIMITED

LIABILITY PARTNERSHIP

The Council at its 227th Meeting held at New Delhi on January 18, 2015
while approving the formation of LLPs by PCS granted general permission to
the members in practice to:

(a) become designated / active partner of a limited liability partnership

(LLP) the objects of which include carrying out attestation services
which fall within the scope of the profession of Company Secretaries
irrespective of whether or not the practising member holds substantial
interest in that LLP;

(b) become passive partner of LLP which is engaged in any other business
or occupation provided that the practising member does not hold
substantial interest in that LLP.

For the purposes of the above resolution:

(i) “Attestation Services” include Secretarial Audit and Certification of

Annual Return in terms of the provisions of the Companies Act, 2013.

(ii) Non-attestation Services” means services which are not attestation
services.

(ii ) A “passive partner” means a partner of LLP who fulfils the following
conditions:

(a) he must not be a designated partner;

(b) subject to the LLP agreement, he may make agreed contribution
to the capital of LLP and receive share in the profits of the LLP;
and

(c) he must not take part in the management of the LLP nor act as an
agent of the LLP or of any partner of the LLP;

However, none of the following activities shall constitute taking part
in the management of the LLP:

(1) Enforcing his rights under the LLP agreement (unless those rights
are carrying out management function).

(2) Cal ing, requesting, attending or participating in a meeting of the
partners of the LLP.

(3) Approving or disapproving an amendment to the partnership
agreement.

(4) Reviewing and approving the accounts of the LLP;

58

Guidance Note on Code of Conduct for Company Secretaries

(5) Voting on, or otherwise signifying approval or disapproval of any
transaction or proposed transaction of the LLP including –

(a) the dissolution and winding up of the LLP;

(b) the purchase, sale, exchange, lease, pledge, mortgage,
hypothecation, creation of a security interest, or other dealing
in any asset by or of the LLP;

(c) a change in the nature of the activities of the LLP;

(d) the admission or removal of a partner of the LLP;

(e) transactions in which one or more partners have an actual or
potential conflict of interest with one or more partners or the

LLP;

(f) any amendment to the LLP agreement;

(iv) a member shall be deemed to have a “substantial interest” in an LLP
if he is entitled at any time to not less than 25% of the profits of such

LLP.

***

Guidance Note on Code of Conduct for Company Secretaries

59

Annexure IV

GUIDELINES FOR ADVERTISEMENT BY COMPANY

SECTRETARY IN PRACTICE

ICSI Guideline No. 4 of December, 2007

[Pursuant to Clause (1) of part ii of the Second Schedule to the

Company Secretaries Act, 1980 as amended]

New Delhi, the 29th December, 2007

In exercise of the powers conferred by Clause (1) of Part II of the

Second Schedule to the Company Secretaries Act, 1980 (56 of 1980),
as amended by the Company Secretaries (Amendment) Act, 2006,
the Council of the Institute of Company Secretaries of India hereby
issues the following guidelines:-

1. Introduction

1.1

The Institute of Company Secretaries of India, (the Institute)

constituted under the Company Secretaries Act, 1980 (the Act) is
a statutory body to develop and regulate the profession of company
secretaries in India. Members of the Institute who hold the

Certificate of Practice issued by it are authorised to practise the
profession of Company Secretaries and these members are known
as Company Secretaries in Practice.

1.2

The areas in which the Company Secretaries in Practice can and
do render their services and the names, addresses and other
particulars of Company Secretaries in Practice are displayed on
the website of the Institute.

1.3

Members of the Institute are required under the Act to maintain
high standards of professional conduct.

1.4

Part I of the First schedule of the Company Secretaries Act, 1980,
enumerates professional misconduct in relation to a member in
practice and inter-alia includes if such a member :

(6) solicits clients or professional work, either directly or indirectly,
by circular, advertisement, personal communication or interview
or by any other means :

Provided that nothing herein contained shall be construed as
preventing or prohibiting –

(i) any company secretary from applying or requesting for or
inviting or securing professional work from another Company

Secretary in Practice; or

(ii) a member from responding to tenders or enquiries issued by
various users of professional services or organizations from
time to time and securing professional work as a consequence;

(7) advertises his professional attainments or services, or uses

60

Guidance Note on Code of Conduct for Company Secretaries
any designation or expressions other than Company Secretary on
professional documents, visiting cards, letterheads or sign boards,
unless it be a degree of a University established by law in India or
recognized by the Central Government or a title indicating
membership of the Institute of Company Secretaries of India or of
any other institution that has been recognized by the Central

Government or may be recognized by the Council :

Provided that a member in practice may advertise through
a write up setting out

— the services provided by him or his firm and

— particulars of his firm subject to such guidelines as may
be issued by the Council;

1.5

The Council of the Institute of Company Secretaries of India at its

178th meeting held on 29th December, 2007 approved the
fol owing Guidelines for Advertisement by Company Secretary in

Practice.

1.6

The Guidelines herein, as issued by the Central Council of the

Institute on 29th December, 2007 deal with the manner in which
a Company Secretary in Practice can advertise the services provided
by him or his firm and the particulars of his firm through a write-
up.

1.7

Any non compliance or violation of these Guidelines as may be in
force from time to time in any manner whatsoever shal be deemed
to be an act of professional misconduct and the concerned member
shall be liable to disciplinary proceedings under the Act.

2. Key Definitions

For the purposes of these Guidelines,

2.1

The “Act” means the Company Secretaries Act, 1980.

2.2

“Institute” means the Institute of Company Secretaries of India.

2.3

“Advertisement or advertising” means advertisement or advertising
in any mode including written, recorded, displayed communication
through print or electronic mode or otherwise including in
newspapers, journals, internet, online, websites, banners, letters,
circulars issued, circulated or published in accordance with these
guidelines.

2.4

“Company Secretary in Practice” means a member of the Institute
who holds a Certificate of Practice issued to him by the Institute.

2.5

“Firm of Company Secretaries” means sole proprietorship concern,
the sole proprietor of which is a Company Secretary in Practice or
a firm, wherein all partners are Company Secretaries and such
firm is approved by the Council.

2.6

“write up” includes any writing or display setting out services
rendered by a Company Secretary in Practice or firm of company
secretaries and any writing or display of the particulars of the

Guidance Note on Code of Conduct for Company Secretaries

61

Company Secretary in Practice or of firm of company secretaries
issued, circulated or published in accordance with these guidelines.

The terms not defined herein have the same meaning as assigned
to them in the Company Secretaries Act, 1980 and the rules and
regulations made thereunder.

3. Prohibition to Advertise

3.1

No Company Secretary or a firm of Company Secretaries is
permitted to advertise the services as specified in the Act, rules,
regulations framed thereunder except through a write-up as defined
in Clause 2.6.

4. The Write-up shall be made in compliance with the following:

4.1

Applicability

These guidelines shal apply to advertisements issued by a Company

Secretary in Practice not only in India but would also apply to
those circulated, communicated, published, issued or allowed to
be issued abroad.

4.2

Permitted list of information

4.2.1

Name of Company Secretary, Membership number,

Certificate of Practice Number and date of issue

(for each partner in case of firm)

4.2.2

Address and website (if any), telephone, mobile, e-
mail, fax number of the member

4.2.3

Name of the firm in which the member is a partner

4.2.4

Year of Establishment

4.2.5

Date and place of Issue of Advertisement

4.2.6

Age

4.2.7

Gender

4.2.8

Additional recognized qualifications

4.2.9

Languages spoken by the partner(s)

4.2.10

Honours or awards in the field of teaching, research,
authorship etc. conferred by nationally accredited
institutions

4.2.11

Current teaching or research appointments at a
university or col ege of advanced education or professional

Institute

4.2.12

Name of firm in case of partnership

4.2.13

Details of networking through own office or
through formal association in other places within

& outside India

4.2.14

Number, name of employees of the firm and their
qualifications and other particulars

62

Guidance Note on Code of Conduct for Company Secretaries

4.2.15

Business address, telephone numbers (including
email, fax and other details) of the firm

4.2.16

Office hours and after office hours availability

4.2.17

Advertisement about setting up of certified filing
centers

4.2.18

Frequently Asked Questions (FAQs) in conformity to
these guidelines

4.2.19

Declaration indicating

(a) willingness to accept work, either generally or in
particular areas of practice;

(b) unwillingness to accept work in particular areas;

(c) willingness or unwillingness to accept work directly
from clients, either general y or in particular areas of
practice.

4.2.20

The write-up may display the passport size photograph
of the member or partners of the firm of Company

Secretaries

4.2.21

Fees:

(a) Willingness to give written estimates of fees;

(b) Methods for determining fees;

(c) Mode of Acceptance of Fees.

4.2.22

Speed of Service

(a) willingness to give written estimates concerning
completion of particular work;

(b) maximum time within which specific services wil be
completed.

4.2.23

Write-up may include the names of clients and services
rendered

4.2.24

Particulars of Services

(i) The write-up to be circulated, distributed, published,
issued by or on behalf of Company Secretary in

Practice shall set out the professional services
rendered or to be rendered by the advertiser.

(ii) The write-up may explain the nature and usefulness
of the professional services rendered by the Company

Secretary in Practice.

(ii ) The write-up may include the names of clients and
services rendered provided that the Company

Secretary in Practice shall maintain record of his
having provided such professional services.

Guidance Note on Code of Conduct for Company Secretaries

63

4.2.25

In case of advertisement through website :

(a) A Company Secretary or a firm of Company

Secretaries may display photograph of the Company

Secretary or partners of the firm of Company

Secretaries in Practice.

(b) While designing and/or hosting the particulars on
the website, certain keywords should be provided so
as to enable the search engine/s to locate the website
and these keywords will not be visible or displayed
on the website. Any one of the following key words
may be used for this purpose. Company Secretary/

Company Secretary in Whole-time Practice/

Company Secretary in Practice/Practising Company

Secretary/Indian Chartered Secretary/Indian Certified

Corporate Secretary/Indian CS/Indian Company

Secretary/Corporate Advisor/ Company Law

Consultant/Secreta rial Auditor/ Secreta rial

Consultant/Indian Certified Public Secretary/CS/

ACS/FCS/PCS/CSP.

However, the keywords shal not be material y different
from the designations used for a Company Secretary.

(c) The website may provide a hyperlink to the website
of ICSI, its Regional Councils and Chapters and other
regulatory bodies of the Government, after obtaining
necessary permission from the concerned body.

(d) A Company Secretary in Practice may provide online advice
to their clients or other members/ firms of Company

Secretaries who specifical y request for the same.

(e) A Company Secretary or a firm of Company

Secretaries may disclose the fact that he/she or their
firm has been Peer Reviewed. Any such disclosure
shal clearly state the period for which the Peer Review
has been conducted and in case the member has
more than one office or place of practice, then it
shall be mentioned that the Peer Review has been
done for which branch office.

4.2.26

Changes in any of the above particulars.

4.3

Restrictions

The write-up shall :

(i) not be false or misleading ;

(ii) not claim superiority over any or al other Company Secretaries
in Practice;

(ii ) not be indecent, sensational or otherwise of such nature as to
be likely to bring the profession into disrepute;

64

Guidance Note on Code of Conduct for Company Secretaries

(iv) not contain testimonials or endorsements concerning the

Company Secretary in Practice.

(v) not refer the Company Secretaries in practice in terms such
as “specialists” or “experts”.

(vi) In case of advertisement through website :

(a) A Company Secretary in Practice or a firm of Company

Secretaries shal ensure that no information contained in
the website is circulated to other websites/e-mail accounts
etc. through e-mail or otherwise without the same having
been specifically requested for.

(b) A Company Secretary in Practice or a firm of Company

Secretaries shal not use logo(s) unless otherwise permitted
by the Institute.

4.4

Declaration

The Advertiser shal declare that the contents of the advertisement
are true to the best of his knowledge and belief and are in
conformity with these Guidelines.

4.5

Disclaimer

The Advertiser shall also include the following Statement of

Responsibility and Disclaimer in the Advertisement :

Disclaimer : The contents or claims in the Advertisement issued
by the advertiser are the sole and exclusive responsibility of the

Advertiser. The Institute of Company Secretaries of India does
not own any responsibility whatsoever for such contents or claims
by the Advertiser.

5. Responsibility for the observance of these Guidelines

5.1

The responsibility for the observance of these guidelines lies with
members who commission, create, place or publish any
advertisement or assist in the creation or publishing of any
advertisement covered under these guidelines. Members are
expected not to commission, create, place or publish any
advertisement which is in contravention of these Guidelines. This
is a self-imposed discipline required to be observed by all those
involved in the commissioning, creation, placement or publishing
of advertisements.

6. EFFECTIVE DATE :

6.1

These guidelines become effective from 1st January, 2008 and
consequently the existing Guidelines for Display of Particulars on

Website by Company Secretaries in Practice stand repealed.

By order of the Council

N K JAIN, SECRETARY & CEO

Guidance Note on Code of Conduct for Company Secretaries

65

Annexure

MODEL ADVERTISEMENT

(i) Name of Company Secretary

Passport

(ii) Membership number
size

(ii ) Certificate of Practice number and date of issue
photograph

(iv) Website (if any)

(v) Name of the sole proprietary concern under which the member is
practicing/Name of the partnership in which the member is a partner

(vi) Age

(vi ) Gender

(vii ) Languages spoken

(ix) Number, name of employees and their qualifications and other
particulars

(x) Business address telephone numbers (including email, fax and other
details)

(xi) Office hours and after office hours availability

(xi ) Additional recognized qualifications

(xii ) Current teaching or research appointments at a university or college
of advanced education or professional Institute

(xiv) Honours or awards conferred

(xv) Frequently Asked Questions (FAQs)

(xvi) Declaration indicating:

•
willingness to accept work, either generally or in particular areas
of practice;

•
unwillingness to accept work in particular areas;

•
willingness or unwillingness to accept work directly from clients,
either generally or in particular areas of practice.

(xvi ) Fees :

•

Mode of Acceptance of Fees

•

Methods for determining fees

•

Willingness to give written estimates of fees

(xvi i) Speed of Service :

•
willingness to give written estimates concerning completion of
particular work;

66

Guidance Note on Code of Conduct for Company Secretaries

•
maximum time within which specific services will be completed.

(xix) Particulars of Services:

(xx) Declaration : I …………………. declare that the contents of the
advertisement are true to the best of my knowledge and belief and
are in conformity with these Guidelines.

(xxi) Disclaimer : The contents or claims in the Advertisement issued by
the advertiser are the sole and exclusive responsibility of the Advertiser.

The Institute of Company Secretaries of India does not own any
responsibility whatsoever for such contents or claims by the Advertiser.

(xxi ) Date and Place of Issue of Advertisement : .........…………..

***

Guidance Note on Code of Conduct for Company Secretaries

67

Annexure V

GUIDELINES OF THE COUNCIL FOR NAME OF A PROPRIETORSHIP

CONCERN / FIRM/ TRADE UNDER REGULATION 169 OF THE

COMPANY SECRETARIES REGULATIONS, 1982.

1. A trade or firm or concern name shall be restricted to the name(s) of
the proprietor/partners or a name which is already in use.

2. A trade/firm name may include the name(s) of the member(s) as it/
they appear in the Register of Members in the following manner:

(i) For Sole proprietorship concern:

(a) Name comprising first name and/or middle name and/or
surname of the member, in any order, with or without
commonly used suffix or prefix

(b) Initials of the first name and/or middle name and/or surname,
in whichever order

(c) Combination of (a) and (b) above, in any order

(d) Parts of or prevalent abbreviations of or acronyms of commonly
used names alongwith any combination referred to in (c) above

(ii) For Partnership firm:

(a) Full surnames of two or more partners

(b) Full first names of two or more partners

(c) Combination of first names and / or middle names and/or
surnames of two or more partners with or without commonly
used suffix or prefix

(d) Combination of initials of first names and/or middle names
and/or surnames of the two or more partners

(e) Combination of (c) and (d) above, in any order

3. General

(i) A trade or firm name shall not be approved if the same or similar
or nearly similar name is already used by a Company Secretary in
practice or which resembles the name of Company Secretary in
practice or firm of such Company Secretaries and has been entered
in the Register of office of firms.

(ii) A trade/firm name shall not contravene the provisions of The

Names and Emblems (Prevention of Improper Use) Act, 1950 or
any modification/re-enactment thereof.

(ii ) The trade or firm name may be suffixed by the suffixes “& Co.”,

“& Company” or “& Associates”. However, any suffixes that may
be considered undesirable by the Council shall not be allowed.

68

Guidance Note on Code of Conduct for Company Secretaries

(iv) The word “and”/ “&”could be used in between the first name/
middle name/surname including initials thereof, of the partners
of the firm.

(v) A firm name may also be allowed without the use of the suffixes

“& Co.”, “& Company” or “& Associates” provided ful first names
and/or full middle names and/or full surnames of the partners are
used. Also, in such cases, the word “&”/”and” is compulsorily to
be used either in between the full first names and/or full middle
names and/or full surnames of the partners or before the last full
first name/full middle name/full surname of the partners.

(vi) The name of a sole proprietorship concern shall not be allowed
without the use of suffixes “& Co.” / “and Company” / “&

Associates”.

(vi ) A trade/firm name, which has no relationship with the name of
member(s) as above, shall not be allowed.

(vii ) Descriptive trade/firm names viz. Fire, Smash, Leader, Champion,

Mastermind, Super, Supreme etc. shall not be allowed.

(ix) Trade/firm names denoting publicity shall not be allowed. Any
trade/firm name, regardless of reason or logic, using the initials,
acronyms or ful forms of any profession whether used individually
and/or collectively and/or in any order, shall not be allowed. The
use, therefore, of CA, CS, CMA, MBA, CACMA, CACS, CSCA,

CSCMA, CMACS, CMACA, Secretary, Accountant, Management,

Chartered Accountant, Cost Accountant, Chartered Secretary etc.,
shall not be allowed. However, trade/firm names matching with
the group name/theme shall be allowed, if the same is not in
contradiction with any other criteria.

(x) The name, middle name and surname of the member shal conform
to the name, middle name and surname as they appear in the
register of members.

(xi) In case any change in the status of the firm from individual firm to
partnership firm or vice-versa, the firm name already been in use
by any of the partner or individual could be approved provided
there is no objection by any of the partners or individual.

(xi ) A trade/firm name which was in use by a proprietor or partners
shall not be al owed to any other member or members for a period
of three years of the closure of firm. The name may be re-allotted
to the same member or members’ upto a period of three years of
the closer of the firm. In the event of removal of name of a
practising member, after the expiry of the period of three years,
the said trade/firm may be allowed to any member or members
who are eligible for allotment of such name under the guidelines.

(xii ) After various permutations and combinations under guidelines 2(i)

Guidance Note on Code of Conduct for Company Secretaries

69
and (ii) have been exhausted and the member is not able to get
approval of firm/trade name in accordance with the same, he
may be permitted to adopt or coin a firm/trade name out of the
names of his/her family members provided that such name was
not already registered by some other members. The terms “family”

for this purpose means husband, wife, father, mother, son and
daughter. An affidavit or other evidence to the satisfaction of the

Secretary is to be produced in such cases.

(xiv) Any reconstitution of the firm with the same firm name shall not
have effect except with the prior approval of the Council pursuant
to Regulation 170.

(xv) Approval accorded by the ICSI for any trade/firm name shall not
tantamount to any protection by the ICSI in case of any dispute
arises affecting to Intellectual Property Rights between any trade/
firm with any other brand, entity, business etc., outside the
profession and in relation to the name in dispute. The responsibility
and liability in such cases shall solely be of the concerned trade/
firm and at its own risk and costs and not of the ICSI. The ICSI
shal not be any party to any kind of dispute that may arise in this
regard.

***

70

Guidance Note on Code of Conduct for Company Secretaries

Annexure VI

GUIDELINES FOR COMPULSORY ATTENDANCE OF PROFESSIONAL

DEVELOPMENT PROGRAMMES1

In exercise of the powers conferred by Clause (1) of Part II of the Second

Schedule to the Company Secretaries Act, 1980 (56 of 1980), as amended
by the Company Secretaries (Amendment) Act, 2006, the Council of the

Institute of Company Secretaries of India hereby issues the following
guidelines :-

1. Introduction

The Company Secretaries Act, 1980 was enacted to make provisions
for the regulation and development of the profession of Company

Secretaries. The Institute of Company Secretaries of India set up under
the said Act has been conducting examinations and prescribing
standards for adherence by its members.

Members of the Institute in employment occupy important positions
in industry. The concept of whole-time practice, which gained its
initial recognition in 1988, has gained momentum after the enactment
of the Companies (Amendment) Act, 2000 which required Compliance

Certificate to be issued by Practising Company Secretary for certain
category of companies. Our members in practice are also being
recognized for issuing various certificates by various regulatory
authorities.

In the present day scenario, a profession cannot maintain its cutting
edge competencies unless its members regularly update their
knowledge. Attendance and participation in Professional Development

Programs, Participative Certificate Programs organized by the

Headquarters and Centre for Corporate Governance Research and

Training (CCGRT), and Seminars, Conferences, Study Circle Meetings
organised by the Council, Regional Councils, Chapters and other
recognised bodies enable members to –

1. Constantly upgrade professional competence and skil s.

2. Sensitize them to new and emerging opportunities for service.

3. Assure users of professional services that they possess adequate
skills commensurate with their professional responsibilities.

4. Improve their level of confidence to meet ever-changing demands
on the profession. The Perspective Planning Group constituted by
the Council had recommended compulsory attendance by
members at Professional Development Programmes as a means
of ensuring constant updation of knowledge and skil s of members.

1

As amended by the Council in its 223rd Meeting held at New Delhi on March

14, 2014.

Guidance Note on Code of Conduct for Company Secretaries

71

The ICSI, drawing strength from these recommendations, has
now decided that the following guidelines are required to be
followed for giving and recording credit as well as eligible
programmes and the number of Program Credit Hours to be given
for each program.

2. Key Definitions

2.1 “Approved Learning Program” means any Professional Development

Program, Continuing Education Program, Participative Certificate

Program of the ICSI, Programmes organised through electronic /
distance mode or any other program, Seminar or study circle meeting
organised by the Council, Regional Council, Chapter or Satellite

Chapter of the Institute, and programmes organised [jointly with
professional bodies or Chambers of Commerce].

2.2 “Year” for the purposes of these guidelines shall mean the period
commencing from 1st day of April and ending on 31st day of March
fol owing.

2.3 “Learning Program Centre” (LPC) means any wing of the ICSI which
conducts programs and includes the Council, any Committee of the

Council, Regional Councils, Chapters and shall include any other
centre, wing or any other entity as may be recognized by the

Council from time to time for this purpose.

3. Authorisation and Method of Regulation

3.1 Under Section 9 of the Company Secretaries Act, 1980, the
responsibility for management of the affairs of the Institute and for
discharging the functions assigned under the said Act vests with
the Council.

3.2 The Council considers that in the context of the liberalised economy
and the competitive environment, proper regulation and maintenance
of the status and standards of the Members is necessary for ensuring
competency of the members.

3.3 Pursuant to the above-mentioned authorizations, these guidelines
are therefore being issued for implementation.

3.4 Compliance with these guidelines is mandatory for the members in
practice and recommendatory for other members.

3.5 For the removal of doubts, it is clarified that all issues relating to the
implementation and interpretation of terms used in these guidelines
shall be the responsibility of the Professional Development Committee
constituted by the Council. The Committee may discharge its duties
in this regard (including issue of supplementary guidelines from time
to time) for implementation within the limits of its authority as specified
or prescribed by the Council.

72

Guidance Note on Code of Conduct for Company Secretaries

4. Power to Modify Guidelines

To ensure that these guidelines are dynamic, the requirements,
conditions or terms specified in these guidelines may be modified
from time to time at the discretion of the Council on the
recommendations of the Professional Development Committee of
the Council.

5. Applicability of the Guidelines

5.1 It is mandatory for all members in practice of the Institute, except
those specified in para 5.2 to secure 15 Program Credit Hours (PCH)

in a year or 50 Program Credit Hours in a block of 3 years by attendance
of approved learning program. However, no carry forward for excess

Program Credit Hours from block of three years to another block of
three years will be allowed.

5.1.1 It would be sufficient if a member obtains atleast fifteen credit
hours in a year or 50 credit hours in a block of three years. If a member
takes a Certificate of Practice during the block, the requirement for
obtaining Credit Hours shall be as under :

Certificate of Practice taken

The requirement of Credit Hours
during

1st April of the first year of the

No requirement of Credit Hours
block to 31st March following.

in the First Year of the block

Fifteen Credit Hours each in
the second and third year of the
block or 30 Credit hours in the
block of three years

1st April of the second year of

No requirement of Credit Hours in
the block to 31st March
the second year of the block
following

Fifteen Credit Hours in the third
year of the block

1st April of the third year to

No requirement of Credit Hours

31st March following
in that block

No credit hours will be given to a participant who attends the
programme partial y.

Members whose reply to prize queries is published in the Chartered

Secretary will be entitled to four Programme Credit Hours].

Members above the age of 60 years shal be required to obtain 50%
of the PCH required to be obtained by the members below 60 years
w.e.f. April 01, 2011.

5.1.2 Members in employment i.e. members in whose name Form 32 (in

Guidance Note on Code of Conduct for Company Secretaries

73
terms of the provisions of the Companies Act,1956) /DIR -12 (in
terms of the provisions of the Companies Act, 2013) has been filed
by the Companies shall be required to obtain 10 Programme Credit

Hours in each year or 35 Programme Credit Hours in a block of three
years.

5.2 The requirement specified above shall not apply to :

(a) A member who attains the age of 65 years during a particular
calendar year.

(b) A member, for the year during which he gets his Certificate of

Practice for the first time.

(c) A member or class of members to whom the Council may in its
absolute discretion grant full/partial exemption either specific/
general, on account of facts and circumstances in case of :

(i) Maternity/Paternity Leave

(ii) Accident/Medical Emergencies

(ii ) Unemployment

(iv) Any other case, as may be deemed appropriate by the Council
on a case to case basis.

6. Functions of The Learning Program Centres

6.1 To conduct programs on current topics for the benefit of the members.

6.2 To maintain attendance record of the member attending the program
in a manner which will be prescribed.

6.3 To furnish periodic Activity and Attendance Report to the Headquarters
of the ICSI for updation in the master database.

7. Obligations of the Member

7.1 A personal record of compliance with the requirements of Program

Credit Hours is required to be maintained by each member on an
annual basis. This record shall be open to verification by the Institute.

7.2 At the time of payment of annual membership fees, every member is
required to confirm that they have secured the minimum annual

Program Credit Hours (PCH) and that the record can be produced
to the Institute for verification on request.

8. Manner of Calculation of Program Credit Hours (PCH)

8.1 No Program Credit Hours will be awarded for any learning program
whose duration is less than 1 hour.

74

Guidance Note on Code of Conduct for Company Secretaries

8.2 The basis of calculation of Program Credit Hours will be as under:

No. of hours of Learning Program

Program Credit Hours (PCH)

attended by the member

Beyond 1 hour and upto 2 hours

1

Beyond 2 hours and upto 4 hours in
a single day

2

Beyond 4 hours in a single day

4

Program spanning 1 ½ days

6

Program spanning 2 days

8

Program spanning 2 ½ days and
above/National Convention

10

8.2.1 Members attending programmes in non-core areas such as Service

Tax, Indirect Taxes, Accounting Standards, Labour Laws, Intellectual

Property Rights, Competition Law and NCLT etc. shall be entitled for
grant of 50% extra PCH than eligible for other programmes of the
same duration.

8.3 A member whose article is published in the “Chartered Secretary”

will be entitled to 4

Program Credit Hours.

In respect of joint authorship of the article, the two credit hours be
awarded to each author. However, the joint authorship should be limited
to two authors only.

The article published in the Souvenir of National Convention be treated
at par with the article published in the Chartered Secretary for the
purposes of grant of credit hours.

8.4 If the Course Coordinator attends the full program, full credit of the

Program Credit Hours allotted for the program will be given.

8.5 No Program Credit Hours shall be given to a member for acting as a
faculty in Oral Tuition Classes.

8.6 There may be cases of members contributing articles in newspapers,
working on research projects,preparationof or vetting of background
or technical material, participating in interactive media programs,
etc. All such cases will be decided by the Committee on case to case
basis until fresh guidelines covering such instances are drawn up.

8.7 A member who acts as a Chairman or Speaker in any technical session
at a Workshop, Seminar or Conference organised by the Program

Learning Centre will be entitled to equivalent number of Program

Credit Hours as is available for the said technical session.

Guidance Note on Code of Conduct for Company Secretaries

75

8.8 For Members who reside in places beyond 100 km from the nearest

Regional Council/Chapter and attend a program at any Program

Learning Centre, they shall be awarded double the Program Credit

Hours for which the concerned Program is entitled. However this
will not apply to attendance at the National Convention/National

Conference of Practising Company Secretaries/Regional Conferences
organised by the Regional Councils. Such members have also the
option to prepare a research paper on a topic recommended by
the Secretariat.

Where the members in practice residing in remote places are not
able to attend the professional development programmes, they
may write to the Institute for approving a topic on which they can
prepare research paper to get the exemption from securing
programme credit hours.

The Research paper includes :

(i) A concept paper on emerging areas of practice for Company

Secretaries

(ii) A Referencer / backgrounder on contemporary topics relevant
to Company Secretaries

(ii ) A booklet on any topic relating to the areas of practice for Company

Secretaries

(iv) A monograph on any contemporary topic relevant to the Practising

Company Secretaries

(v) An empirical study of practical relevance to the Practising Company

Secretaries

Members whose research paper is approved by the Professional

Development Committee of the Council, wil be exempted from the
requirement of securing programme credit hours for a block of three years.

Members who reside in places beyond 100 Kms. from the nearest

Regional Council/Chapter will be entitled for Eight Programme

Credit Hours if their article/reply to prize query is published in the

Chartered Secretary.

8A. Programme Credit Hours for Unstructured Learning Activities

The members shall be granted Programme Credit Hours (PCH) under
these Guidelines for undertaking any of the following unstructured
learning activities subject to a maximum of ten PCH in each year of
the block:

Learning Activity

PCH

1.

Web based learning including e learning,subject
to the production of Certificate, per year.

4

76

Guidance Note on Code of Conduct for Company Secretaries

2.

Publication of article in a journal of repute other
than the Chartered Secretary Journal.

4

3.

Publication of book(s).

8

4.

Revision of Published Book

4

5.

Acting as Guide / Supervisor for M.Phil./LL.M./Ph.D. 6

6.

Suggestions on Questionnaires / Consultative Papers /

Exposure Draft, etc. sought by the Institute

2

7.

Reviewing of Articles / Guideline Answers /Study

Material and other publications of the Institute.

4

8.

Publication of Research findings / Studies on the areas
relevant to Corporate Sector, Capital Markets and

Professional interest.

4

9.

Publication of articles of professional interest in
national dailies.

4

10.

Visit to foreign countries as part of government
delegation.

4

11.

Acting as visiting faculty or guest faculty at the various

Universities / Management Institutions / Institutions
of National importance.

4

9. Monitoring Requirements

9.1 The Professional Development Committee will monitor and review
the programs conducted by the various Program Learning Centres
from time to time and appraise the Council of the progress.

9.2 The said Committee shall set up an appropriate monitoring
mechanism and provide clarifications (as it considers necessary) to
all concerned for effective implementation of these guidelines as
per Annexure.

10. These Guidelines are effective from 1st January, 2008.

***

Guidance Note on Code of Conduct for Company Secretaries

77

Annexure VII

DRESS CODE FOR COMPANY SECRETARIES

Dress Code for a CS appearing before Judicial/Quasi - Judicial
bodies and Tribunals like NCLT - NCLAT, etc.

The Council has approved the following Guidelines for Professional Dress

Code for Company Secretaries to appear before judicial / quasi-judicial bodies
and tribunals like NCLT- NCLAT, SAT, etc.:

S. No.

Guidelines

1

For Male Members:

a.

Navy Blue Suit (Coat & Trouser), with CS logo, Insignia

OR Navy Blue Blazer over a sober colored Trouser
b. Neck Tie (ICSI)

c.

White full sleeve Shirt
d. Formal Black Leather Shoes (Shined)

2.

For Female Members:

a.

Navy Blue corporate suit [Coat & Trouser), could be with
a neck tie/ Insignia

OR
b. Saree / any other dress of sober colour with Navy Blue

Blazer with CS logo
c.

A sober footwear like Shoes/Bellies/Wedges, etc. (shined)

3.

Members in Employment - As prescribed in 1 or 2 above

Members are advised to strictly adhere to the Dress Code prescribed
by the Council.

***

78

Guidance Note on Code of Conduct for Company Secretaries

Annexure VIII

GUIDELINES FOR REQUIREMENT OF MAINTENANCE OF A

REGISTER OF ATTESTATION/CERTIFICATION1 SERVICES RENDERED

BY PRACTISING COMPANY SECRETARY/FIRM OF PRACTISING

COMPANY SECRETARIES2

In exercise of the powers conferred by Clause (1) of Part II of the Second

Schedule to the Company Secretaries Act, 1980 (56 of 1980), as amended by
the Company Secretaries (Amendment) Act, 2006, the Council of the Institute
of Company Secretaries of India hereby issues the following guidelines :-

1. For the purpose of maintaining quality of attestation [/certification]1
services provided by Company Secretaries in Practice, every Practicing

Company Secretary (PCS)/Firm of PCS shall maintain a register
regarding attestation [/certification]1 services provided by him/her/it,
which shall be open for inspection by such person as may be authorised.

2. The Format of the register to be maintained by a Practising Company

Secretary/Firm of Practising Company Secretaries regarding attestation

[/certification]1 services is as under:

Sl. No.

Name and

Services

Date of

Signature

Signature

Registration No.

rendered
signing of
of the
of the
of the company to Certificate/
authorised
person for
which attestation

Return/

PCS for
verifica-

[/Certification]1

Audit
verification
tion
services* provided Report

1

2

3

4

5

6

*

The various attestation [/certification]1 services mean :

*

THE INSTITUTE OF COMPANY SECRETARIES OF INDIA, (Constituted
under the Company Secretaries Act, 1980) ICSI Guideline No.2 of

November, 2007 [Pursuant to Clause (1) of Part II of the Second Schedule
to the Company Secretaries Act, 1980 as amended] New Delhi, the 27th

November, 2007

1.

Inserted by the Council in its 178th Meeting held on 29th December,

2007.

2.

Published in the January 2008 issue of Chartered Secretary at pg. 139.

(i)

Signing of Annual Return pursuant to proviso to sub-section (1) of section

161 of the Companies Act, 1956.

(ii) Issue of Compliance Certificate pursuant to proviso to sub-section (1) of section 383A of the Companies Act, 1956.

(iii)

Issue of certificate of Securities Transfers in Compliance with the Listing

Agreement with Stock Exchanges.

(iv)

Certificate of reconciliation of capital, updation of Register of Members,
etc. as per the Securities & Exchange Board of India’s Circular D&CC/

FITTC/Cir-16/2002 dated December 31, 2002.

Guidance Note on Code of Conduct for Company Secretaries

79

(v) Conduct of Internal Audit of Operations of the Depository Participants.

(vi) [Certification under Clause 49 of the Listing Agreement]1.

3. These Guidelines are effective from 1st January, 2008.

By order of the Council

N K JAIN, SECRETARY & CEO

***

80

Guidance Note on Code of Conduct for Company Secretaries

Annexure IX

GUIDELINES FOR CHANGE IN NAME OF PROPRIETORSHIP

CONCERN/FIRM OF COMPANY SECRETARY(IES)

In case an existing proprietary concern/firm of Company Secretary (ies)

desires to change its name, the following conditions shall be fulfilled:

(a) An application for change in name of the firm (preferably mentioning
its Unique Code Number) shall be submitted along with the Form for
giving particulars of Offices and Firms duly filled- in.

(b) All the existing partners of the firm must sign the application and the

Form duly filled- in.

(c) In the case of a proprietary firm, an application along with the Form
for giving particulars of Offices and Firms (mentioning its Unique Code

Number) is to be submitted duly filled-in and signed by the proprietor.

(d) The application for approval of the firm name along with the Form
should be sent to the Directorate of Membership, ICSI.

(e) The new proposed name will be approved under the provisions
contained in Regulations 169 and 170 of the CS Regulations, 1982.

(f) The letter granting approval of a trade / firm name will be sent at the
address mentioned in the Form for giving particulars of Offices and

Firms.

(g) The Proprietorship concern/firm of Company Secretary (ies) which
has requested for change in name, upon approval shall mention

“formerly known as (old name)” for a period of one year from the
date of approval of the changed name.

***

Guidance Note on Code of Conduct for Company Secretaries

81

Annexure X

GUIDELINES FOR PEER REVIEW OF ATTESTATION SERVICES BY

PRACTISING COMPANY SECRETARIES

(As amended by the Council in its 229th Meeting held on

March 19-20, 2015)

1. Introduction

The Company Secretaries Act, 1980 (the Act) was enacted to make
provision for the regulation and development of the profession of

Company Secretaries. The Institute of Company Secretaries of India
set up under the said Act has been conducting examinations and
prescribing standards for adherence by its members.

The concept of whole-time practice, which gained its initial recognition
in 1988, gained momentum after the enactment of the Companies

(Amendment) Act, 2000 which required Compliance Certificate to be
issued by Practising Company Secretary for certain size of companies

Our members in practice are also being recognised for issuing
certificates under various laws. The Companies Act, 2013 has also
introduced secretarial audit.

Excellence is the hallmark of success in a competitive environment.

The performance can be judged and enhanced to that level of
excel ence only by evaluation by a competent professional. The Council
of the Institute, therefore, in its 202nd meeting held on 25th and

26th August, 2011decided to introduce Peer Review for Practising

Company Secretaries to periodically review the PCS firms and evaluate
the quality, sufficiency of systems, procedures and practices, so that
excellence in their performance is maintained.

The Council of the Institute of has been constituted under the Company

Secretaries Act, 1980 for discharging the functions assigned to the

Institute under the Act. Section 15 of the Act provides that “the duties
of carrying out the provisions of this Act shall be vested in the Council”

and enumerates various duties of the Council. With a view to regulate
the profession of Company Secretaries and in terms of the powers
vested, the Council is thus authorised to issue these guidelines for

Peer Review and also modify/ amend/ adopt new guidelines in this
respect from time to time. These guidelines serve as a mechanism
intended to further enhance the quality of professional services
rendered by Practising Company Secretaries over a period of time,
thereby ensuring that the profession of Company Secretaries continues
to serve the society in the manner envisaged.

2. Objectives

2.1 The main objective of Peer Review is to ensure that in carrying out
their attestation services and professional assignments, the PCS (a)

comply with the Technical Standards laid down by the Institute and (b)

82

Guidance Note on Code of Conduct for Company Secretaries
have in place proper systems (including documentation systems) for
maintaining the quality of the attestation services work they perform.

The Council has specified in these guidelines for Peer Review, the

Technical Standards in relation to which peer review is to be carried
out. Peer review does not seek to redefine the scope and authority of
the Technical Standards specified by the Council but seeks to enforce
them within the parameters prescribed by the Technical Standards.

2.2 Peer Review is directed towards maintenance as well as enhancement
of quality of attestation services and to provide guidance to members
to improve their performance and adhere to various statutory and other
regulatory requirements. Essentially, through a review of attestation
services engagement records, peer review identifies the areas where
a practising member may require guidance in improving the quality of
his performance and adherence to various requirements as per
applicable Technical Standards.

2.3 These guidelines provide a framework of the Peer Review process and
the requirements of what is expected of a member during the conduct
of a peer review.

3. Key Definitions - For the purpose of these guidelines

3.1 Attestation Services - Means services involving the secretarial audit
and issuance of various certificates, but does not include:

·

Management consulting Engagement;

·

Representing a client before the Authorities;

·

Testifying as expert witness; and

·

Providing expert opinion on points of principle, such as secretarial
standards or the applicability of certain laws, on the basis of facts
provided by the client;

·

The phrase ‘Attestation Services’ is used in these guidelines
interchangeably with secretarial or compliance audit Services,

Attestation Functions and secretarial audit functions.

·

Scope of Peer Review on attestation services shall be as per Para

7.1.(3).

3.2 Engagement Records – means the records relating to the attestation
services covered in Para 7.1.3 and also includes the letter of
engagement, if any, issued to the Practice Units.

3.3 Firm – means a sole practitioner, partnership or any other entity of
professional Company Secretaries as may be permitted by law and
constituted under The Company Secretaries Act, 1980 & Regulations
made thereunder.

3.4 Member - Means a member of the Institute of Company Secretaries
of India.

Guidance Note on Code of Conduct for Company Secretaries

83

3.5 Partner – includes any individual with authority to bind the firm with
respect to the performance of a professional services assignment.

3.6 Practice Unit - Means members in practice, whether practicing
individually or a firm of Company Secretaries.

3.7 Peer Review - Means an examination and review of the systems,
procedures and practices to determine whether they have been put in
place by the practice unit for ensuring the quality of attestation services
as envisaged and implied/ mandated by the Technical Standards and
whether these were effective or not during the period under review

3.8 Peer Review Board - Means a Board established by the Council in
terms of these Guidelines to conduct peer review. The expression

“Peer Review Board” is hereinafter referred to as “Board”.

3.9 Regulator – Means Government or any regulatory body constituted by
the Parliament or State Legislature who is/are empowered to regulate
the Acts which include various attestation services which the Council
may, from time to time, prescribe to cover as attestation services for
the purpose of peer review.

3.10 Reviewer -Means any member engaged to carry out peer review of
practice unit from the panel of reviewers.

3.11 Technical Standards - Mean and include:

·

Secretarial Standards issued by the Institute of Company Secretaries
of India, wherever mandatory;

·

Guidance Notes on Secretarial Standards issued by the Institute of

Company Secretaries of India;

·

Compliance of the Guidance Notes issued by the Institute of

Company Secretaries of India;

·

Notifications/Directions issued by the Council of Institute of

Company Secretaries of India; and

·

Compliance of the provisions of the various relevant Statutes and/
or Regulations, which are applicable in the context of the specific
engagements being reviewed.

3.12 Qualified Assistant – means a person assisting the reviewer for carrying
out peer review, who is a member of the Institute and has undergone
adequate training in the manner considered appropriate by the Board
in terms of clause 15.1 of the Guidelines.

3.13 Words and expressions used and not defined in these guidelines shall
have the meanings assigned to them under the Company Secretaries

Act, 1980 and the Company Secretaries Regulations, 1982 framed
thereunder and as amended from time to time.

4. Authority of the Guidelines on Peer Review

4.1 The guidelines on Peer Review shall applyto al or any of the following
cases :

(a) Whenever a peer review is mandated

84

Guidance Note on Code of Conduct for Company Secretaries

(b) Whenever a peer review is requested

(c) Whenever peer review is conducted

4.2 The Guidelines on Peer Review are issued in relation to conduct of
members in attestation services:

·
to promulgate an appropriate mechanism for ensuring the quality
of attestation services and guide the members to conduct
themselves in a manner that the Council considers appropriate;

·
to provide guidance in relation to the statutory powers and
obligations with respect to the parties involved in peer review;

·
to prescribe the scope of peer review and the procedures to be
adopted during the conduct of a peer review; and

·
to establish the expected conduct of members during a peer review.

5 Powers of the Council

·

To constitute the Board and to fill in the vacancies arising in the

Board from time to time.

·

To decide upon, from time to time, the Technical Standards, the
implementation of which will fall within the purview of the peer
review process.

·

To refer such matters to the Board as the Council may deem fit.

6 Peer Review Board

6.1 Establishment and Appointment

(1) The Board shall be established by the Council.

(2) The Board shall consist of not less than seven members to be
appointed by the Council, of whom at least four shall be from
amongst the Members of the Council.

(3) The balance members of the Board shal be drawn from amongst
prominent members of high integrity and reputation, including
but not limited to, former public officials, regulatory authorities
etc.

(4) The Council shall appoint the Chairperson and the Vice-

Chairperson from amongst the Members of the Council.

(5) At least one-half of Council Members on the Board shall hold

Certificate of Practice.

(6) The tenure of the Peer Review Board shall be co-terminus with
the tenure of the Council and the term of a member shall be for
such period as may be prescribed by the Council.

(7) Any vacancy(ies) on the Board shall be filled in by the Council.

Guidance Note on Code of Conduct for Company Secretaries

85

(8) Members of the Disciplinary Committee of the Institute of

Company Secretaries of India shall not concurrently serve on the

Board.

6.2 Meetings

(1) No business shall be transacted at a meeting of the Board unless
there are present at least three members, including the

Chairperson or, in his absence, the Vice-Chairperson.

(2) If there is noquorum within half an hour of the time fixed for the
meeting, the meeting shall stand adjourned to a date, time and
place fixed by the Chairperson or, in his absence, the Vice-

Chairperson.

(3) The Board shall meet not less than four times in a year, provided
that not more than 120 days shal elapse between two consecutive
meetings of the Board.

6.3 Reporting

The Board shal submit proceedings of the meeting of the Board within

30 days from the date of its meeting, to the Council.

7. Scope of Peer Review

7.1 The peer review process is directed at the attestation services as per

Para 7.1(3) of a practice unit.

(1) Once a practice unit is selected for review, its engagement records
pertaining to the immediately preceding financial year shall be
subjected to review.

(2) The Review shall focus on:

(i) Compliance with Technical Standards.

(ii) Quality of Reporting.

(ii ) Office systems and procedures with regard to compliance of
attestation services, systems and procedures.

(iv) Training Programs for staff (including trainees) concerned with
attestation functions, including appropriate infrastructure.

(3) The following attestation services will be covered:

(i) Signing of Annual Return pursuant to proviso to sub-section

(1) of section 161 of the Companies Act, 1956.

(ii) Certification/ Signing of Annual Return pursuant to section

92 of the Companies Act, 2013.

(ii ) Issuance of Compliance Certificate pursuant to proviso to sub-
section (1) of section 383A of the Companies Act, 1956.

86

Guidance Note on Code of Conduct for Company Secretaries

(iv) Issuance of Secretarial Audit Report in terms of Section 204
of the Companies Act, 2013

(v) Issuance of Certificate of Securities Transfers in Compliance
with the Listing Agreement with Stock Exchanges.

(vi) Certificate of reconciliation of capital, updation of Register of

Members, etc. as per the Securities & Exchange Board of

India’s Circular D & CC/Cir-16/2002 dated December 31,

2002.

(vi ) Conduct of Internal Audit of Operations of the Depository

Participants.

(vii ) Certification under Clause 49 of the Listing Agreement.

Since law is a dynamic subject, situations may arise whereby regulatory
prescriptions may necessitate certification in other areas also in due
course. The Council may include other attestation services under the
scope of Peer Review from time to time.

Wherever there is a mention of the Companies Act 2013 it is to be
read with its Rules, Notifications, Circulars, Guidelines etc. issued from
time to time by the Ministry of Corporate Affairs.

8. Powers of the Board

8.1 The duty of carrying out the provisions of these guidelines shall be
vested in the Board.

8.2 In particular, and without prejudice to the generality, of the foregoing
powers, the duties of the Board shall include:

(1) To cal for information from practice units in such form, as amended
from time to time, as it deem fit.

(2) To maintain a panel of Reviewers.

(3) To define the terms of appointment of the reviewers.

(4) To send a Panel of at least 3(three) reviewers (from the Board’s
own panel) to the practice unit and allow the practice unit to
choose any one reviewer from the panel so forwarded to it.

Provided that in case the practice unit would like to have reviewers
from another State/Region (and undertakes tobear the extra costs
that would be incurred for TA/DA etc.) and none of the reviewers
as identified by the Board for the practice unit are from outside
the place of business of the practice unit, then the practice unit
may make a special request to the Board to provide names of
reviewers from outside the State/Region where the practice unit
has his place of business.

(5) To examine the aspects of basis of selection of records pertaining

Guidance Note on Code of Conduct for Company Secretaries

87
to the attestation services in terms of the appropriate Technical

Standards.

(6) To arrange for such training programs for reviewers as may be
deemed appropriate;

(7) To prescribe the system, practice and procedure to be observed in
relation to peer reviews; and

(8) On considering the Report of a reviewer, to do any or all of the
following:

(a) To issue recommendations to the practice unit;

(b) To order a further peer review to be carried out;

(9) After considering the report of the reviewer and compliance of
recommendations by the Practice Unit, wherever deemed
appropriate by the Board, to issue Peer Review Certificate.

(10) To guide the members on best practices on peer review.

8.3 Where deemed appropriate, after the conclusion of a cycle of reviews
or at the end of each such period as may be determined, the Board
shall have the powers to make a Special Report to the Council on:

(i) General issues regarding the level of implementation and
adherence to Technical Standards amongst practice units.

(ii) Its own suggestions for further improvement in quality of attestation
services.

8.4 The Board may perform any other thing or act as may be incidental to,
or, which it considers necessary or expedient for the performance of
its functions, or exercise of its powers as delegated to it by the Council,
including the formation of sub-committees and regional benches of
the Board for specific tasks.

9. Compliance with Peer Review Guidelines

9.1 Practice units are required to comply with the provisions of these
guidelines. Practice units failing in this regard will be required to
undergo appropriate review of their quality controls by the Board in
terms of such specific directions as may be given to it by the Council
in these regards from time to time, and as notified to the members.

9.2 Practice Units failing to comply with these Guidelines shall be liable
for disciplinary action as provided under the Company Secretaries Act,

1980.

10. Qualifications of the Reviewer

10.1 The nature and complexity of peer review require the exercise of
professional judgement. Accordingly, an individual serving as a reviewer
shall:-

(a) Be a member;

88

Guidance Note on Code of Conduct for Company Secretaries

(b) Possess at least 10 (ten) years experience; and

(c) Be currentlyin practice as Company Secretary in Practice;

10.2 The Board may examine the quality of the report and shall have powers
to remove the reviewer from the panel of reviewers in case the quality
of the review/report fails to match the desired standards.

10.3 Sitting members on the Council / Regional Council and sitting Office

Bearers of Managing Committee of the Chapter(s) of the ICSI shall
not act as Peer Reviewers till they demit their office.

11. Members/ Firms Subject to Review

11.1 Peer review will be implemented on the basis of random selections
from the practice units or at the request of practice unit or in the
situations mentioned in 11.2 and 11.3 given below.

11.2 If company/concern requests the Board for the conduct of peer review
of its secretarial auditor (practice unit), the Board shall take due
cognizance of such request and in that case the cost of the peer
review shall be borne by such company/ concern.

11.3 If Council / Government or any regulatory body requests the Board for
conduct of peer review of any Practice Units, the Board shall take due
cognizance of such request and in that case the cost of peer review
shall be borne by the referred practice unit.

11.4 The Peer Review Board may alter/change/modify the above method
of selection with prior approval of the Council.

12. Obligations of the Practice Unit

12.1 Provisions of access to any record or document to a reviewer:

(1) Any person to whom this clause applies and who is reasonably
believed by a reviewer to have in his possession or under his
control any record or other document, which contains or is likely
to contain information relevant to the peer review shall:

(i) Produce to the reviewer or afford him access to, any record
or document specified by the reviewer or any other record or
document which is of a class or description so specified, and
which is in his possession or under his control/ being in either
case a record or other document which the reviewer
reasonably believes is or may be relevant to the peer review,
within such time as the reviewer may reasonably require;

(ii) If so required by the reviewer, afford and provide to him such
explanation or further particulars in respect of anything
produced in compliance with a requirement under sub clause

(i) above, as the reviewer shall specify; and

(ii ) Provide to the reviewer all assistance in connection with peer
review which he is expected to provide.

Guidance Note on Code of Conduct for Company Secretaries

89

(2) Where any information or matter relevant to a practice unit is
recorded otherwise than in a legible form, the practice unit shall
provide and present to the reviewer a reproduction of any such
information or matter, or of the relevant part or it in a legible form,
with a suitable translation in English if the matter is in any other
language, and such translation is requested for by the reviewer.

(3) The practice unit shall ensure that the reviewer is given access to
al documents relevant to his review no matter which office of the
practice unit these documents may be available in, in case the
practice unit has more than one office.

(4) A practice unit shall allow the reviewer to inspect, examine or
take any abstract of or extract from a record or document or copy
therefrom which may be required by the reviewer.

12.2 For the purpose of this clause a person means a Partner/ Sole Proprietor
of the practice unit to which the particular review relates or any person
employed by or whose services are engaged by such unit.

13. Periodicity of Peer Review

13.1 The peer review of every practice unit should be mandatorily carried
out at least once in a block of five years. However, if the Board so
decides or otherwise at the request of the practice unit, the peer
reviews for a practice unit can be conducted at shorter intervals.

14. Cost of Peer Review

14.1 The cost of Peer Reviewfor reviewer and his qualified assistant(s) as
may be decided by the Board from time to time, shall be borne by the

Practice unit. In case reviewer has to conduct second review, the
same rate would apply to the second review also. Each of the branch/
office under review would be considered separately.

15. Training and Development

15.1 To ensure that the objective of peer review is attained in letter and
spirit, adequate training facilities shall/be provided, from time to time,
to the Reviewer(s) and to the qualified assistants and also to other
persons who assist the Board as and when and in the manner considered
appropriate by the Board. Reviewers shall be expected to be fully
familiar with al procedures, prescriptions, guidelines and other decisions
as may be issued by the Board from time to time.

16. Review Framework

16.1 Essentially, a peer review entails a review of engagement records and
related statements to ascertain that the practice unit is adhering to

Technical Standards. Where a practice unit is not following Technical

Standards in certain situations, suggestions and recommendations for
improvement may be made, and possibly fol owed by a further review,
in keeping with the primary thrust of peer review.

90

Guidance Note on Code of Conduct for Company Secretaries

16.2 The methodological approach involved in peer review can be defined
in terms of three stages viz., planning, execution and reporting, which
are summarized below:

(i) Planning

Notification - A practice unit will be notified in writing about an
impending peer review and wil be sent a Questionnaire for completion.

Return of completed Questionnaire - The practice unit shall have to
complete and return the Questionnaire to the Secretariat within 30

(thirty) days of receipt. The information will be used for the planning
of the review. In addition, practice units will be required to enclose a
complete list of their attestation services, and to provide any other
information the reviewer considers necessary to facilitate the selection
of a sample of attestation services, engagement records which will be
representative of the practice unit’s client portfolio, for review.

(ii) Sample of Attestation services Engagements

(a) From the complete list of attestation services , an initial sample
will be selected by the reviewer. Practice units will be notified of
the selection in writing about 2 (two) weeks in advance, requesting
the relevant records of the selected attestation services, to be
made available for review.

(b) At the execution stage, the initial sample may be reduced to a
smal er actual sample for review. However, if the reviewer considers
that the actual sample does not cover a fair cross-section of the
practice unit’s attestation services engagements, he may make
further selections.

(ii ) Confirmation of visit

In consultation with the practice unit, date(s) will be set for the on-
site review to be carried out. Flexibility will be permitted to ensure
that members are not inconvenienced at especially busy periods. The
on-site review date(s) will be arranged by mutual consent such that
the review is concluded within 60 (sixty) days of intimation.

(i) Peer review visits will be conducted at the practice unit’s head
office or other officially noted/ recorded place of office. The
complete on-site review of a practice unit may take at least a full
day depending upon the size of the practice unit. This is based on
the assumption that the practice unit concerned has made all the
necessary information and documentation available to the reviewer
for his review. However, in any case this on-site review should
not extend beyond 3 (three) working days.

(ii) Initial meeting

An initial meeting may be held between the reviewer and a
partner/ sole proprietor of the practice unit designated to deal

Guidance Note on Code of Conduct for Company Secretaries

91
with the review (designated partner). The primary purpose of this
meeting is to confirm the accuracy of the responses given in the

Questionnaire. The description of the system in the Questionnaire
may not fully explain all the relevant procedures and policies
adopted by the practice unit and this initial meeting can provide
additional information. The reviewer should gather a full
understanding of the system and be able to form a preliminary
evaluation of its adequacy at the conclusion of the meeting.

(ii ) Compliance Review-General Controls

(a) The reviewer may carry out a compliance review of the General

Controls and evaluate the degree of reliance to be placed
upon them. The degree of reliance will, ultimately, affect the
attestation services engagements to be reviewed. The
following 5 (five) key controls will be considered as General

Controls:

·

Independence

·

Maintenance of Professional Skills and standards

·

Outside Consultation

·

Staff Supervision and Development

·

Office Administration including maintenance of registers
and records

Practice units are expected to address each of the 5 (five) key
control areas.

(b) In each key control area there shal be supplementary questions
and matters to consider. These are intended to ensure that
the kind of controls that are expected to be maintained, are
installed and operated within practice units.

(c) All questions in the questionnaire may not necessarily be
relevant to particular types of practice units because of the
size and culture etc. However, practice units should still assess
their internal control systems to ascertain whether they address
the objectives under the five key control areas.

(iv) Selection of attestation services engagements to be reviewed

(a) The number of attestation services engagements to be reviewed
depends upon:

·

The number of practicing members involved in attestation
services engagements in the practice unit;

·

The degree of reliance placed, if any, on general quality
controls; and

92

Guidance Note on Code of Conduct for Company Secretaries

·

The total number of attestation services engagements
undertaken by the practice units for the period under review.

(b) The engagements reviewed should be a balanced sample from a
variety of different types of companies. Accordingly, if the reviewer
considers that the actual sample is not representative of the practice
unit’s attestation services client portfolio, he may make further
selections from the initial sample or from the complete attestation
services list.

(v) Review of records

The reviewer may adopt a compliance approach or substantive approach
or a combination of both in the review of attestation services
engagement records.

(a) Compliance approach-Attestation services Engagements

·

The compliance approach is to assess whether proper control
procedures have been established by the practice unit to ensure
that attestation services are being performed in accordance
with Technical Standards.

·

Practice units should have procedures and documentation
sufficient to cover each of the key areas. Members in smaller
practices may find some of the documentation too elaborate
for most of their clients and so should tailor their attestation
services documentation to suit their particular circumstances
with justification for doing so provided to the reviewer.

(b) Substantive approach-Attestation services Engagements

A substantive approach wil be employed if the reviewer chooses
not to place reliance on the practice unit’s specific controls on
attestation engagements or is of the opinion that the standard of
compliance is not satisfactory. This approach requires a review of
the attestation working papers in order to establish whether the
attestation work has been carried out as per norms of Technical

Standards.

16.3 Reporting

(i) Preliminary Report of Reviewer

·

At the end of an on-site review, the reviewer shall, before
making his report to the Board, communicate a preliminary
report to the practice unit. The reviewer shall report on the
areas where systems and procedures had been found to be
deficient or where he has noticed non-compliance with
reference to any other matter.

·

The reviewer shall not name any individual in his reports.

Guidance Note on Code of Conduct for Company Secretaries

93

·

The practice unit shall have 21(twenty one) days beginning
the day after the day the preliminary report is received, by
the practice unit from the reviewer to make any submissions
or representations, in writing to the reviewer, concerning the
preliminary report.

(hh) Interim Report of Reviewer

(a) If the reviewer is satisfied with the reply received from the
practice unit, he shall submit an appropriate Report to the

Board.

(b) In case the reviewer is not satisfied with the reply of the
practice unit, the reviewer shall accordingly submit his Interim

Report to the Board.

(c) In pursuance of the provisions contained in the clause or on
receipt of a request from the practice unit, the Board may
instruct the reviewer to - again carry out the review after 3

(three) months of the date of submission of the interim report,
but within 6 (six)months of the same to verify that systems
and procedures have been streamlined and accordingly, on
being satisfied, submit a report to the Board.

(d) On receiving a report from a reviewer in terms of these, the

Board, having regard to the Report and any submissions or
representations attached to it, may:

·
make recommendations to the practice unit concerned
regarding the application by it of Technical Standards;

·
if it is of the pinion that

(1) In case the review is related to a firm, any one or
more or al of the partners in the firm may have failed
to observe, maintain or apply, as the case may be,

Technical Standards;

(2) In case the review is related to a member practicing
on his own account, the member may have failed to
observe, maintain or apply, as the case may be,

Technical Standards;

Then;

(3) Issue instructions to the reviewer to carry out, within
such period as may be specified in the instructions

(which period shall not commence earlier than six
months after the date on which the instruction is
issued), a further peer review as regards the practice
unit to which the report relates; and

(4) Specify in the instruction, the matters as regards
which the review is to be carried out;

94

Guidance Note on Code of Conduct for Company Secretaries

(e) The Board will make recommendations to the practice unit
where:

Based on the report of the reviewer, it appears that the practice
unit has satisfied all key control objectives, which the Board
has determined and/or prescribed in respect of maintenance
of/ adherence to Technical Standards but where further
improvements could be made to internal quality control
systems; and

Based on the report of the reviewer, it appears that the practice
unit has satisfied the major key control objectives but some
weaknesses exist in others. The practice unit is expected to
consider the recommendations for rectifying the weaknesses
thus identified and informed by the Board and take al necessary
actions to ensure that all key control areas are addressed.

(f) A follow up review will be required where the practice unit
has not satisfied the Board that all the key control objectives
have been maintained and where, in the view of the Board
the deficiencies are likely to material y affect the overal quality
of an attestation services engagement of the practice unit. In
such cases the Board will also make recommendations, which
it expects the practice unit to implement in order to ensure
the maintenance of Technical Standards. The implementation
of these recommendations will be examined during the fol ow
up review.

(g) In case the reviewer is not satisfied even at, the subsequent
review, he shall submit his Report to the Board incorporating
his reasons for dissatisfaction.

(ii ) Final Report of Reviewer

(a) The reviewer will prepare a final Report to the Board (the

Reviewer’s Report), incorporating the findings as discussed
with the practice unit. The final report will be examined/
inspected by the Board in terms of the degree of compliance
with the Technical Standards by the reviewed practice unit.

The model forms of such final Reports shall be communicated
to the reviewer by the Board.

(b) The Board shall consider the reviewer’s final report and the
practice unit’s submissions. Thereafter, the Board may issue
recommendations, if considered appropriate, to the practice
unit and/or instruct the Reviewer to perform any follow-up
action. The Board may, if deemed fit, then issue Peer Review

Certificate to the practice unit.

(iv) The reviewer shall not communicate any Report(s) unless the
examination of such Report(s) and related records has been made
by him or by a partner or an employee of his firm.

Guidance Note on Code of Conduct for Company Secretaries

95

17 Referral of Disputes and Appeal

17.1 Where a dispute arises over the powers of reviewers or the process or
conclusions reached after the review or to any other matter related to
the review, the practice unit, the reviewer or both may refer the dispute,
in writing, to the Board. Such referral shall have to be made within 2

(two) months of occurrence of the issue in dispute, in such manner as
may be prescribed by the Board in this regard.

17.2 Where a dispute is referred, after considering any submissions or
representations (which shall be made in writing) made by the relevant
practice unit and/or the relevant reviewer, the Board-

·

Shall decide the dispute within 6 (six) months of the reference
and communicate such decision to each of the parties to the
dispute, simultaneously;

·

May issue directions relating to the matter in dispute to such
practice unit or the reviewer concerned and require such unit or
reviewer to comply with them within 30 (thirty) days and send a
report to the Board of the said compliance within 15 (fifteen) days
of such compliance;

·

Shall convey its decision in these regards to each of the parties
within 15 days from the date of the decision.

17.3 Where a practice unit is dissatisfied with the decision of the Board, it
may refer the matter to the Council within 2 (two) months in such
manner as may be prescribed.

18. Immunity

18.1 A practice unit, which makes available records or documents to a
reviewer, shall not incur any liability under the Code of Conduct under
the Company Secretaries Act, 1980 and the Regulations framed
thereunder, by reason of compliance with these Guidelines on Peer

Review.

18.2 The reviewer, by virtue of carrying out the peer review shall not incur
any liability other than the liability arising out of his own conduct under
the Code of Conduct under the Company Secretaries Act, 1980 and

Regulations framed thereunder as well as under the relevant clauses
of these Guidelines.

18.3 The members of the Peer Review Board shall not incur any liability by
virtue of their having discharged the responsibilities as given in these

Guidelines and/or as may in future be specified by the Council, other
than the liability arising out of their own conduct under the Code of

Conduct under the Company Secretaries Act, 1980 and Regulations
framed thereunder as well as under the relevant clauses of these

Guidelines.

96

Guidance Note on Code of Conduct for Company Secretaries

19. Confidentiality

19.1 Strict confidentiality provisions shall apply to all those involved in the
peer review process, namely, reviewers, members of the Board, the

Council, or any person who assists any of these parties.

19.2 Those persons subject to the secrecy provision:

(1) Shall at all times after his/ their appointment preserve and aid-in
preserving secrecy with regard to any matter coming to his/ their
knowledge in the performance or in assisting in the performance of
any function, directly or indirectly related to the process and conduct
of peer review.

(2) Shal not at any time communicate any such matter to any other person;
and

(3) Shall not at any time permit any other person to have any access to
any record, document or any other material if any form which is in
his/their possession or under his/ their control by virtue of his/their
being or having been so appointed or his/their having performed or
having assisted any other person in the performance of such a function.

19.3 Non-compliance with the secrecy provisions in the above clause shall
amount to professional misconduct as defined under Section 22 of the

Company Secretaries Act, 1980.

19.4 A statement of confidentiality (appended as Annexure ‘A’) shall be
filled in by the persons who are responsible for the conduct of peer
review i.e., reviewers/ the members of the Board and others who
assist them.

20. Procedural Departures

20.1 Where the persons who are responsible for the conduct of peer review

(reviewers, the members of the Board and others who assist them)

have not followed the prescribed procedures, they shall have to justify
significant departures and such justification shal have to be mandatorily
made known to the Council in the periodic Reports of the Board to
the Council.

***

Guidance Note on Code of Conduct for Company Secretaries

97

Annexure ‘A’

Statement of Confidentiality

[In accordance with the Guidelines on Peer Reviews this statement of
confidentiality is to be filled in by the persons who are responsible for the
conduct of peer review i.e., reviewers, members of the Board and others who
assist them, individually. The Reviewer shall be responsible for taking this
undertaking from all those persons who assist him or are likely to assist him in
conducting peer reviews, and shal send the same to the Board. This statement
of Confidentiality should be renewed every year.]

To

The Chairman, Peer Review Board,

The Institute of Company Secretaries of India

Sir,

I hereby declare that my attention has been drawn to the need for
confidentiality in the conduct of peer reviews. I therefore undertake and assure
that in so far as any or all of the following relate to me or are brought to my
knowledge/attention, in any manner whatsoever, whensoever, I will ensure
that on my part

— Working papers shall always be kept securely so that unauthorised
access is not gained by anyone.

— The practice unit’s attestation services procedures shall not be disclosed
to third parties.

— Any information with regard to any matter coming to my knowledge
in the performance or in assisting in the performance of any function
during the conduct of peer reviews shall not be disclosed to any person.

Access to any record, document or any other material, in any form which is in
my possession, or under my control, by virtue of my being or having been so
appointed or my having performed or having assisted any other person in the
performance of such a function, shal not at any time be permitted to any other
person.

I understand that any breach of the provisions regarding confidential
information contained in the Guidelines on Peer Review will be considered as
gross negligence and, subject to investigation, will result in appropriate action.

Signature:

Name:

Designation:

Date:

Place:

98

Guidance Note on Code of Conduct for Company Secretaries

Taken on record on (date)

By

Signature:

Name:

Designation:

Guidance Note on Code of Conduct for Company Secretaries

99

Annexure XI

EXTRACT OF SECTIONS 21 TO 22E OF

COMPANY SECRETARIES ACT, 1980

(Chapter V of the Act under the heading ‘Misconduct’)

CHAPTER V

MISCONDUCT

21.

Disciplinary Directorate

(1) The Council shall, by notification, establish a Disciplinary Directorate
headed by an officer of the Institute designated as Director

(Discipline) and such other employees for making investigations in
respect of any information or complaint received by it.

(2) On receipt of any information or complaint along with the prescribed
fee, the Director (Discipline) shal arrive at a prima facie opinion on
the occurrence of the alleged misconduct.

(3) Where the Director (Discipline) is of the opinion that a member is
guilty of any professional or other misconduct mentioned in the First

Schedule, he shall place the matter before the Board of Discipline
and where the Director (Discipline) is of the opinion that a member
is guilty of any professional or other misconduct mentioned in the

Second Schedule or in both the Schedules, he shall place the matter
before the Disciplinary Committee.

(4) In order to make investigations under the provisions of this Act, the

Disciplinary Directorate shall follow such procedure as may be
specified.

(5) Where a complainant withdraws the complaint, the Director

(Discipline) shall place such withdrawal before the Board of Discipline
or as the case may be, the Disciplinary Committee, and the said

Board or Committee may, if it is of the view that the circumstances
so warrant, permit the withdrawal at any stage.

21A. Board of Discipline

(1) The Council shall constitute a Board of Discipline consisting of—

(a) a person with experience in law and having knowledge of the
disciplinary matters and the profession, to be its presiding officer;

(b) two members one of whom shall be a member of the Council
elected by the Council and the other member shall be the
person designated under clause (c) of sub-section (1) of
section (16);

(c) the Director (Discipline) shall function as the Secretary of the

Board.

100

Guidance Note on Code of Conduct for Company Secretaries

(2) The Board of Discipline shall follow summary disposal procedure in
dealing with all the cases before it.

(3) Where the Board of Discipline is of the opinion that a member is
guilty of a professional or other misconduct mentioned in the First

Schedule, it shall afford to the member an opportunity of being
heard before making any order against him and may thereafter take
any one or more of the following actions, namely:—

(a) reprimand the member;

(b) remove the name of the member from the Register up to a
period of three months;

(c) impose such fine as it may think fit which may extend to rupees
one lakh.

(4) The Director (Discipline) shall submit before the Board of Discipline
all information and complaints where he is of the opinion that there
is no prima facie case and the Board of Discipline may, if it agrees
with the opinion of the Director (Discipline), close the matter or in
case of disagreement, may advise the Director (Discipline) to further
investigate the matter.

21B. Disciplinary Committee

(1) The Council shall constitute a Disciplinary Committee consisting of
the President or the Vice-President of the Council as the Presiding

Officer and two members to be elected from amongst the members
of the Council and two members to be nominated by the Central

Government from amongst the persons of eminence having
experience in the field of law, economics, business, finance or
accountancy:

Provided that the Council may constitute more Disciplinary

Committees as and when it considers necessary.

(2) The Disciplinary Committee, while considering the cases placed
before it, shall follow such procedure as may be specified.

(3) Where the Disciplinary Committee is of the opinion that a member
is guilty of a professional or other misconduct mentioned in the

Second Schedule or both the First Schedule and the Second Schedule,
it shall afford to the member an opportunity of being heard before
making any order against him and may thereafter take any one or
more of the following actions, namely:—

(a) Reprimand the member;

(b) Remove the name of the member from the Register permanently
or for such period, as it thinks fit;

(c) impose such fine as it may think fit, which may extend to rupees
five lakhs.

(4) The allowances payable to the members nominated by the Central

Government shall be such as may be specified.

Guidance Note on Code of Conduct for Company Secretaries

101

21C. Authority, Disciplinary Committee, Board of Discipline and

Director (Discipline) to have powers of civil court

For the purposes of an inquiry under the provisions of this Act, the

Authority, the Disciplinary Committee, Board of Discipline and the Director

(Discipline) shall have the same powers as are vested in a civil court
under the Code of Civil Procedure, 1908, in respect of the following
matters, namely:—

(a) summoning and enforcing the attendance of any person and
examining him on oath;

(b) the discovery and production of any document; and

(c) receiving evidence on affidavit.

Explanation – For the purposes of sections 21, 21A, 21B, 21C and 22,

“member of the Institute” includes a person who was a member of the

Institute on the date of the alleged misconduct although he has ceased
to be a member of the Institute at the time of the inquiry.

21D. Transitional provisions

Al complaints pending before the Council or any inquiry initiated by the

Disciplinary Committee or any reference or appeal made to a High Court
prior to the commencement of the Company Secretaries (Amendment)

Act, 2006 shall continue to be governed by the provisions of this Act, as
if this Act had not been amended by the Company Secretaries

(Amendment) Act, 2006.

22.

Professional or other misconduct defined

For the purposes of this Act, the expression “professional or other
misconduct” shall be deemed to include any act or omission provided in
any of the Schedules, but nothing in this section shall be construed to
limit or abridge in any way the power conferred or duty cast on the

Director (Discipline) under sub-section (1) of section 21 to inquire into
the conduct of any member of the Institute under any other circumstances.

22A. Constitution of Appellate Authority

The Appellate Authority constituted under sub-section (1) of
section 22A of the Chartered Accountants Act, 1949, shall be deemed
to be the Appellate Authority for the purposes of this Act subject to the
modification that for clause (b) of said sub-section (1), the following
clause had been substituted, namely:—

(b) the Central Government shal , by notification appoint two part-time
members from amongst the persons who have been members of
the Council of the Institute of Company Secretaries of India for at
least one full term and who is not a sitting member of the Council;

22B. Term of office of members of Authority

A person appointed as a member shall hold office for a term of three
years from the date on which he enters upon his office or until he attains
the age of sixty two years, whichever is earlier.

102

Guidance Note on Code of Conduct for Company Secretaries

22C. Procedure, etc. of Authority

The provisions of section 22C, section 22D and section 22F of the

Chartered Accountants Act, 1949 shall apply to the Authority in relation
to al owances and terms and conditions of service of its Chairperson and
members, and in the discharge of its functions under this Act as they
apply to it in the discharge of its functions under the Chartered Accountants

Act, 1949.

22D. Officers and other staff of Authority

(1) The Council shall make available to the Authority such officers and
other staff members as may be necessary for the efficient
performance of the functions of the Authority.

(2) The salaries and allowances and conditions of service of the officers
and other staff members of the Authority shall be such as may be
prescribed.]

22E. Appeal to Authority

(1) Any member of the Institute aggrieved by any order of the Board of

Discipline or the Disciplinary Committee imposing on him any of
the penalties referred to in sub-section (3) of section 21A and sub-
section (3) of section 21B, may within ninety days from the date on
which the order is communicated to him, prefer an appeal to the

Authority:

Provided that the Director (Discipline) may also appeal against the
decision of the Board of Discipline or the Disciplinary Committee to
the Authority if so authorised by the Council, within ninety days:

Provided further that the Authority may entertain any such appeal
after the expiry of the said period of ninety days, if it is satisfied that
there was sufficient cause for not filing the appeal in time.

(2) The Authority may, after calling for the records of any case, revise
any order made by the Board of Discipline or the Disciplinary

Committee under sub-section (3) of section 21A and sub-
section (3) of section 21B and may —

(a) confirm, modify or set aside the order;

(b) impose any penalty or set aside, reduce, or enhance the penalty
imposed by the order;

(c) remit the case to the Board of Discipline or Disciplinary

Committee for such further enquiry as the Authority considers
proper in the circumstances of the case; or

(d) pass such other order as the Authority thinks fit:

Provided that the Authority shall give an opportunity of being heard to
the parties concerned before passing any order.

***

Guidance Note on Code of Conduct for Company Secretaries

103

Annexure XII

EXTRACT OF FIRST AND SECOND SCHEDULES TO THE ACT

THE FIRST SCHEDULE

[See sections 21 (3), 21A(3) and 22]

PART I

Professional misconduct in relation to Company

Secretaries in Practice

A Company Secretary in Practice shal be deemed to be guilty of professional
misconduct, if he–

(1) allows any person to practice in his name as a Company Secretary
unless such person is also a Company Secretary in practice and is in
partnership with or employed by him;

(2) pays or allows or agrees to pay or allow, directly or indirectly, any
share, commission or brokerage in the fees or profits of his professional
business, to any person other than a member of the Institute or a
partner or a retired partner or the legal representative of a deceased
partner, or a member of any other professional body or with such
other persons having such qualifications as may be prescribed for the
purpose of rendering such professional services from time to time in
or outside India.

Explanation. – In this item, “partner” includes a person residing outside

India with whom a Company Secretary in practice has entered into
partnership which is not in contravention of item (4) of this Part;

(3) accepts or agrees to accept any part of the profits of the professional
work of a person who is not a member of the Institute:

Provided that nothing herein contained shal be construed as prohibiting
a member from entering into profit sharing or other similar
arrangements, including receiving any share commission or brokerage
in the fees, with a member of such professional body or other person
having qualifications, as is referred to in item (2) of this part;

(4) enters into partnership, in or outside India, with any person other than
a Company Secretary in practice or such other person who is a member
of any other professional body having such qualifications as may be
prescribed, including a resident who but for his residence abroad would
be entitled to be registered as a member under clause (e) of sub-
section (1) of section 4 or whose qualifications are recognized by the

Central Government or the Council for the purpose of permitting such
partnerships;

(5) secures, either through the services of a person who is not an employee
of such company secretary or who is not his partner or by means
which are not open to a Company Secretary, any professional business:

104

Guidance Note on Code of Conduct for Company Secretaries

Provided that nothing herein contained shal be construed as prohibiting
any arrangement permitted in terms of items (2), (3) and (4) of this

Part;

(6) solicits clients or professional work, either directly or indirectly, by
circular, advertisement, personal communication or interview or by
any other means:

Provided that nothing herein contained shal be construed as preventing
or prohibiting–

(i) any company secretary from applying or requesting for or inviting
or securing professional work from another company secretary in
practice; or

(ii) a member from responding to tenders or enquiries issued by various
users of professional services or organizations from time to time
and securing professional work as a consequence;

(7) advertises his professional attainments or services, or uses any
designation or expressions other than Company Secretary on
professional documents, visiting cards, letterheads or sign boards, unless
it be a degree of a University established by law in India or recognized
by the Central Government or a title indicating membership of the

Institute of Company Secretaries of India or of any other institution
that has been recognized by the Central Government or may be
recognized by the Council:

Provided that a member in practice may advertise through a write up
setting out the services provided by him or his firm and particulars of
his firm subject to such guidelines as may be issued by the Council;

(8) accepts a position as a Company Secretary in practice previously held
by another Company Secretary in practice without first communicating
with him in writing;

(9) charges or offers to charge, accepts or offers to accept, in respect of
any professional employment, fees which are based on a percentage
of profits or which are contingent upon the findings, or result of such
employment, except as permitted under any regulation made under
this Act;

(10) engages in any business or occupation other than the profession of

Company Secretary unless permitted by the Council so to engage:

Provided that nothing contained herein shall disentitle a Company

Secretary from being a director of a company except as provided in
the Companies Act, 1956;

(11) allows a person not being a member of the Institute in practice, or a
member not being his partner to sign on his behalf or on behalf of his
firm, anything which he is required to certify as a Company Secretary,
or any other statements relating thereto.

Guidance Note on Code of Conduct for Company Secretaries

105

PART II

Professional misconduct in relation to members of
the Institute in service

A member of the Institute (other than a member in practice) shall be
deemed to be guilty of professional misconduct, if he, being an employee of
any company, firm or person–

(1) pays or allows or agrees to pay, directly or indirectly, to any person any
share in the emoluments of the employment undertaken by him;

(2) accepts or agrees to accept any part of fees, profits or gains from a
lawyer, a Company Secretary or broker engaged by such company,
firm or person or agent or customer of such company, firm or person
by way of commission or gratification.

PART III

Professional misconduct in relation to members of
the Institute generally

A member of the Institute, whether in practice or not, shall be deemed to
be guilty of professional misconduct, if he –

(1) not being a Fellow of the Institute, acts as a Fellow of the Institute;

(2) does not supply the information called for, or does not comply with
the requirements asked for, by the Institute, Council or any of its

Committees, Director (Discipline), Board of Discipline, Disciplinary

Committee, Quality Review Board or the Appellate Authority;

(3) while inviting professional work from another Company Secretary or
while responding to tenders or enquiries or while advertising through
a write up, or anything as provided for in items (6) and (7) of Part I of
this Schedule, gives information knowing it to be false.

PART IV

Other misconduct in relation to members of
the Institute generally

A member of the Institute, whether in practice or not, shall be deemed to
be guilty of other misconduct, if –

(1) he is held guilty by any civil or criminal court for an offence which is
punishable with imprisonment for a term not exceeding six months;

(2) in the opinion of the Council, he brings disrepute to the profession or
the institute as a result of his action whether or not related to his
professional work.

106

Guidance Note on Code of Conduct for Company Secretaries

THE SECOND SCHEDULE

[See sections 21(3), 21(B)(3) and 22]

PART I

Professional misconduct in relation to

Company Secretaries in Practice

A Company Secretary in practice shal be deemed to be guilty of professional
misconduct, if he—

(1) discloses information acquired in the course of his professional
engagement to any person other than his client so engaging him,
without the consent of his client, or otherwise than as required by any
law for the time being in force;

(2) certifies or submits in his name, or in the name of his firm, a report of
an examination of the matters relating to company secretarial practice
and related statements unless the examination of such statements has
been made by him or by a partner or an employee in his firm or by
another Company Secretary in practice;

(3) permits his name or the name of his firm to be used in connection
with any report or statement contingent upon future transactions in a
manner which may lead to the belief that he vouches for the accuracy
of the forecast;

(4) expresses his opinion on any report or statement given to any business
or enterprise in which he, his firm, or a partner in his firm has a
substantial interest;

(5) fails to disclose a material fact known to him in his report or statement
but the disclosure of which is necessary in making such report or
statement, where he is concerned with such report or statement in a
professional capacity;

(6) fails to report a material mis-statement known to him and with which
he is concerned in a professional capacity;

(7) does not exercise due diligence, or is grossly negligent in the conduct
of his professional duties;

(8) fails to obtain sufficient information which is necessary for expression
of an opinion or its exceptions are sufficiently material to negate the
expression of an opinion;

(9) fails to invite attention to any material departure from the generally
accepted procedure relating to the secretarial practice;

(10) fails to keep moneys of his client other than fees or remuneration or
money meant to be expended in a separate banking account or to use
such moneys for purposes for which they are intended within a
reasonable time.

Guidance Note on Code of Conduct for Company Secretaries

107

PART II

Professional misconduct in relation to members of
the Institute generally

A member of the Institute, whether in practice or not, shall be deemed to
be guilty of professional misconduct, if he—

(1) contravenes any of the provisions of this Act or the regulations made
there under or any guidelines issued by the Council;

(2) being an employee of any company, firm or person, discloses
confidential information acquired in the course of his employment,
except as and when required by any law for the time being in force or
except as permitted by the employer;

(3) includes in any information, statement, return or form to be submitted
to the Institute, Council or any of its Committees, Director (Discipline),

Board of Discipline, Disciplinary Committee, Quality Review Board or
the Appellate Authority any particulars knowing them to be false;

(4) defalcates or embezzles moneys received in his professional capacity.

PART III

Other misconduct in relation to members of
the Institute generally

A member of the Institute, whether in practice or not, shall be deemed to
be guilty of other misconduct, if he is held guilty by any civil or criminal court
for an offence which is punishable with imprisonment for a term exceeding six
months.]

***

108

Guidance Note on Code of Conduct for Company Secretaries

Annexure XIII

COMPLAINTS AND ENQUIRIES AGAINST MEMBERS

Complaints and enquiries relating to professional or other misconduct
of members

1 “(Applicable to a complaint or information pending before the Council or
any inquiry initiated by the Disciplinary Committee or any reference or appeal
made to a High Court prior to 17.11.2006.)”.

(1) Subject to the provisions of this regulation, any complaint received
against a member of the Institute under Section 21 shall be investigated,
and any enquiry relating to misconduct of such member shal be held,
by the Disciplinary Committee.

Provided that if the subject matter of a complaint is, in the opinion of
the President, substantially the same as or has been covered in any
previous information of complaint received, the Secretary may file the
complaint without any further action or inform the complainant,
accordingly, as the case may be.

(2) A complaint under Section 21 shall be made to the Council in the
appropriate from, duly verified as required therein.

(3) Every complaint shall contain the fol owing particulars, namely-

(a) the acts or omissions which, if proved, would render the member
complained against guilty of any professional or other misconduct;

(b) the oral and/or documentary evidence relied upon in support of
the allegations made in the complaint.

(4) Every complaint other than a complaint made by or on behalf of the

Central or any State Government, shal be accompanied by a deposit of
rupees fifty which shall be forfeited, if the Council, after considering
the complaint, comes to the conclusion that no prima facie case is
made out and, moreover, that the complaint is either frivolous or has
been made with mala fide intention.

(5) The Secretary shal return a complaint which is not in the proper form
or which does not contain the aforesaid particulars or which is not
accompanied by the deposit of rupees fifty to the complainant for
resubmission after compliance with such requirements and within such
time as the Secretary may specify.

1.

Inserted by the Company Secretaries (Amendment) Regulations, 2010,

Notification No. 531:legal:710/1/M/1, published in the Gazette of India,

Extraordinary, Part III, Section 4, dated 26.07.2010.

Guidance Note on Code of Conduct for Company Secretaries

109

(6) Ordinarily within sixty days of the receipt of a complaint under

Section 21 the Secretary shall,-

(a) if it is against an individual member send particulars of the acts of
omissions alleged or a copy of the complaint, as the case may be,
to such member at his address as entered in the Register;

(b) if it is against a firm, send particulars of the acts or omissions or a
copy of the complaint, as the case may be, to the firm concerned
at the address of the head office of the firm as entered in the

Register of offices and firms which a notice calling upon the firm
of disclose the name(s) of the member(s) concerned and to send
particulars of acts or omissions or a copy of the complaint, as the
case may be to member(s).

Explanation - A notice shall be deemed to be a notice to all the
members who are partner or employees of that firm.

(7) A member who has been intimated of the complaint made against him
under sub-regulation (6) (hereinafter referred to as the respondent)

shall, within fourteen days of issue of such intimation or within such
further time as the Secretary may allow, forward to the Secretary a
written statement in his defence verified in the same manner as the
complaint.

(8) On a perusal of the complaint and written statement in any, the Secretary
may call for such additional particulars or documents connected there
with either from the complainant or the respondent, as he may consider
necessary or as may be directed by the President, for perusal of the

Council.

(9) Where on a perusal of the complaint, the written statement, if any, of
the respondent and other relevant documents and papers, the Council
is prima facie of opinion that any member has been guilty of professional
or other misconduct, the Council shall cause an enquiry to be made in
the matter by the Disciplinary Committee and where the Council is
prima facie of opinion that there is no case against the respondent, the
case shal be dismissed and the complainant, if any, and the respondent
shall be informed accordingly.

Provided that the Council may, if deemed necessary, call for any
additional particulars or documents connected therewith from the
complainant, if any, or the respondent.

(10) (i) Every notice issued by the Secretary or by the Disciplinary

Committee under this Regulation shall be sent to the member or
the firm concerned by registered post with acknowledgement due.

(ii) If the notice is returned unserved with an endorsement to the
effect that the addressee had refused to accept the notice, it shall
be deemed to have been served.

(ii ) If the notice is returned with an endorsement indicating that the
addressee cannot be found at the address given, the Secretary
shall ask the complainant to supply to him the correct address to

110

Guidance Note on Code of Conduct for Company Secretaries
the member or firm concerned and send a fresh notice to the
member or firm at the address so supplied.

(11) The provision relating to a notice shall apply mutatis mutandis to a
letter.

2[15A. Fee and procedure for investigation of a complaint or
information to be followed by the Director (Discipline),

Disciplinary Directorate and procedure for inquiry by the

Disciplinary Committee. [Applicable to a complaint or information
received on or after 17-11-2006.]

(1) Every complaint other than a complaint filed by or on behalf of the

Central Government or any State Government, or any statutory
authority shall be accompanied by a fee of rupees two thousand
five hundred.

(2) Each such complaint or information shal be dealt with in accordance
with the procedure specified in the Company Secretaries (Procedure
of Investigations of Professional and Other Misconduct and Conduct
of Cases) Rules, 2007.]

16. Information relating to misconduct of members

3(Applicable to the complaint or information pending before the Council
or any inquiry initiated by the Disciplinary Committee or any reference
or appeal made to a High Court prior to 17.11.2006).

The procedure laid down in Regulation 15 shal , so far as may be, apply
to any information received under Section 21.

17. Time limit for entertaining complaint or information

4(Applicable to the complaint or information pending before the Council
or any inquiry initiated by the Disciplinary Committee or any reference
or appeal made to a High Court prior to 17.11.2006).

Save in cases of misconduct involving moral turpitude or in cases
instituted by the Central Government or any State Government, the

Council may refuse to entertain any complaint or information in respect
of misconduct made more than ten years after the same was al eged to
have been committed, where the Council is satisfied that there would
be difficulty in securing proper evidence of the alleged misconduct or

2. Inserted by the Company Secretaries (Amendment) Regulations, 2010,

Notification No. 531:legal:710/1/M/1, published in the Gazette of India,

Extraordinary, Part III, Section 4, dated 26.07.2010.

3. Inserted by the Company Secretaries (Amendment) Regulations, 2010,

Notification No. 531:legal:710/1/M/1, published in the Gazette of India,

Extraordinary, Part III, Section 4, dated 26.07.2010.

4. Ibid.

Guidance Note on Code of Conduct for Company Secretaries

111
that the member against whom the information has been received or
the complaint has been field, would find it difficult to lead evidence to
defend himself on account of the time lag, or that changes have taken
place rendering the enquiry procedurally inconvenient or difficult.

18. Procedure in enquiry before the Disciplinary committee

5(Applicable to the complaint or information pending before the Council
or any inquiry initiated by the Disciplinary Committee or any reference
or appeal made to a High Court prior to 17.11.2006).

(1) It shal be the duty of the Secretary to place before the Disciplinary

Committee all facts brought to his knowledge which are relevant
for the purpose of any enquiry by the Disciplinary Committee.

(2) The Disciplinary Committee shall have the power to regulate its
procedure in such manner as it considers necessary and during the
course of enquiry, may examine witnesses on oath and receive
evidences on affidavits and any other oral or documentary evidence,
exercising its powers as provided in Sub-section (8) of Section 21.

(3) The Disciplinary Committee shall give the complainant and
respondent a notice of the meeting at which the case shall be
considered by the Committee.

(4) Such complainant and respondent may be allowed to defend
themselves before the Disciplinary Committee either in person or
through a legal practitioner or any other member of the Institute.

(5) Where, in the course of a disciplinary enquiry, a change occurs in
the composition of the Disciplinary Committee, unless any of the
parties to such enquiry makes a demand within fifteen days of
receipt of a notice of a meeting of such Disciplinary Committee,
that the enquiry be made de novo report of the Disciplinary

Committee shall be called in question on the ground that any
member of the Disciplinary Committee did not possess sufficient
knowledge of the facts relating to such inquiry.

(6) The Disciplinary Committee shal after investigation report the result
of its enquiry to the Council for its consideration.

19. Procedure in a hearing before the Council

(1) The Council shal consider the report of the Disciplinary Committee
and if in its opinion, a further enquiry is necessary, may cause such
further enquiry to be made and a further report submitted by the

Disciplinary Committee.

(2) After considering such report or further report of the Disciplinary

Committee, as the case may be, where the Council finds that the

5. Inserted by the Company Secretaries (Amendment) Regulations, 2010,

Notification No. 531:legal:710/1/M/1, published in the Gazette of India,

Extraordinary, Part III, Section 4, dated 26.07.2010.

112

Guidance Note on Code of Conduct for Company Secretaries
respondent is not guilty of any professional or other misconduct, it
shal record its findings accordingly and direct that the proceedings
shal be filed or the complaint shal be dismissed as the case may be.

(3) After considering such report or further report of the Disciplinary

Committee, as the case may be, where the Council finds that the
respondent has been guilty of a professional or other misconduct,
it shall record its findings accordingly and shall proceed in the
manner as laid down in the succeeding sub-regulations.

(4) Where the finding is that the member of the Institute has been
guilty of a professional or other misconduct, the Council shal afford
to the member an opportunity of being heard before orders are
passed against him in the case. The Council after hearing the
respondent, if he appears in person or after considering the
representations, if any, made by him, pass such orders as it may
think fit, as provided under Sub-section (4) of Section 21.

(5) The orders passed by the Council shall be communicated to the
complainant and the respondent.

***

Guidance Note on Code of Conduct for Company Secretaries

113

Annexure XIV

PROCEDURES OF MAKING COMPLAINTS

1. A complaint under Section 21 of the Act against a member or a firm
shall be filed in Form I, in triplicate before the Director in person or by
post or courier.

2. Every complaint received by the Directorate is acknowledged by
ordinary post together with an acknowledgement number.

3. Every complaint, other than a complaint filed by or on behalf of the

Central Government or any State Government or any statutory authority,
shall be accompanied by a fee as prescribed by the Council through
regulations. Presently the fee prescribed is Rs. 2,500/- to be paid in
the form of a demand draft drawn on any bank in India in favour of the

Institute of Company Secretaries of India payable at Delhi .The fee
once paid shall not be refunded.

4. No additional fee is payable if the complaint is required to be
resubmitted after rectification of defect under sub-rule (5) of rule 5.

5. The Director or an officer or officers authorized by the Director, shall
endorse on every complaint the date on which it is received or
presented and the Director or the officer or officers so authorized,
shall sign on each such endorsement. He shall then scrutinize the
complaints so received. If found to be in order, it shal be duly registered
and a unique reference number allotted to it, which shal be quoted in
all future correspondence.

6. If, the complaint, on scrutiny, is found to be defective,
including the defects of technical nature, the Director may allow the
complainant to rectify the same in his presence or may return the
complaint for rectification and resubmission within such time as he
may determine.

7. If, the complainant fails to rectify the defect or defects within
the time al owed under sub-rule (5), the Director shal form the opinion
that there is no prima facie case and present the complaint before the

Board of Discipline for its closure.

Withdrawal of a complaint

8. Complainant may by writing a letter to the Director withdraw the
complaint subject to the approval of the Board of Discipline or the

Committee, as the case may be, at any stage, before or after registration
of complaint.

Procedure of Investigation

Procedure to be followed by Director on a complaint

9. The Director within sixty days of the receipt of a complaint shal , if the
complaint is against an individual member, send particulars of the
acts of commission or omission alleged or a copy of the complaint, as
the case may be, to that member at his professional address; or in

114

Guidance Note on Code of Conduct for Company Secretaries
case of a firm at its head office, as entered last in the Register of

Offices and Firms maintained by the Institute, with a notice calling
upon the firm to disclose the name or names of the member or
members concerned and to send particulars of acts of commission
or omission or a copy of the complaint, as the case may be, to such
members.

10. A member who has been informed of the complaint filed against him

(hereinafter referred to as the respondent) shall, within 21 days of the
service of a copy of the complaint, or within such additional time, not
exceeding thirty days, as may be allowed by the Director, forward to
the Director, a written statement in his defense.

11. On receipt of the written statement, if any, the Director may send a
copy thereof to the complainant and the complainant shall, within 21
days of the service of a copy of the written statement, or within such
additional time, not exceeding thirty days, as may be allowed by the

Director, forward to the Director, his rejoinder on the written statement.

12. On perusal of the complaint, the respondent’s written statement,
if any, and rejoinder of the complainant, if any, the Director may call
for such additional particulars or documents connected therewith
either from the complainant or the respondent or any third party or
parties, as he may consider appropriate: If no reply is sent by the
respondent within the time allowed under sub-rule (3) or by the
complainant within the time allowed under sub-rule (4), the Director
shall presume that the respondent or the complainant, as the case
may be, have nothing further to state and take further action as provided
under this Chapter.

Examination of the Complaint

13. The Director shall examine the complaint, written statement, if any,
rejoinder, if any, and other additional particulars or documents, if any,
and form his prima facie opinion as to whether the member or the
firm is guilty or not of any professional or other misconduct or both
under the First Schedule or the Second Schedule or both.

14. Where the Director is of the prima facie opinion that the member or
the firm is guilty of any misconduct under the First Schedule, he shall
place his opinion along with the complaint and all other relevant papers
before the Board of Discipline;

15. Where the Director is of the prima facie opinion that the member or
the firm is guilty of misconduct under the Second Schedule or both
the First and Second Schedules, he shall place his opinion along with
the complaint and all other relevant papers before the Committee.

16. If the Board of Discipline or the Committee, as the case may be,
agrees with the prima facie opinion of the Director, then the Board of

Discipline or the Committee may proceed further under.

17. If the Board of Discipline or the Committee, as the case may be,
disagrees with the prima facie opinion of the Director under clause (a)

Guidance Note on Code of Conduct for Company Secretaries

115
above, it shall either close the matter or advise the Director to further
investigate the matter.

18. Where the Director is of the prima facie opinion that the member or
the firm is not guilty of any misconduct either under the First Schedule
or the Second Schedule, he shall place the matter before the Board of

Discipline, and the Board of Discipline, if it agrees with such opinion
of the Director, shall pass order, for closure. If it disagrees with such
opinion of the Director, then it may either proceed under chapter IV
of these rules, if the matter pertains to the First Schedule, or refer the
matter to the Committee to proceed under Chapter V of these rules,
if the matter pertains to the Second Schedule or both the Schedules,
or may advise the Director to further investigate the matter.

19. The Director shall, after making further investigation as advised by the

Board of Discipline under sub-rule (2) or (3) of this rule or by the

Committee under sub-rule (2), shall further proceed under this rule.

Mode of Sending Notice

20. Every notice or letter issued by the Director, Board of Discipline, or
the Committee under these rules shall be sent to the member or the
firm or any other person, by registered post with acknowledgement
due or speed post, except where specified otherwise in any rule. If
any notice or letter is returned un-served with an endorsement
to the effect that the addressee had refused to accept the notice or
letter, the notice or letter shall be deemed to have been served.

21. If the notice or letter is returned with an endorsement to the
effect that the addressee cannot be found at the address given, the

Director shall ask the complainant or any other person who may be
in a position to provide another address of the member or firm or
person whose address is found to be not correct, and on production
of the correct address, a fresh notice or letter shall be issued at such
address.

22. Where the notice or letter is returned under sub-rule (3), it
may be served by fixing a copy thereof in some conspicuous place at
the professional address or residence of the respondent which was
last registered with the Institute or in such other manner as the Board
of Discipline may think fit and such service shall be deemed to be
sufficient service for the purposes of these rules.

Time limit on entertaining complaint or information

23. Where the Director is satisfied that there would be difficulty in securing
proper evidence of the alleged misconduct, or that the member or
firm against whom the information has been received or the complaint
has been filed, would find it difficult to lead evidence to defend himself
or itself, as the case may be, on account of the time lag, or that
changes have taken place rendering the inquiry procedurally
inconvenient or difficult, he may refuse to entertain a complaint or
information in respect of any misconduct made more than seven years

116

Guidance Note on Code of Conduct for Company Secretaries
after the same was alleged to have been committed and submit the
same to the Board of Discipline for taking decision on it under sub-
section (4) of Section 21A of the Act.

Board of Discipline

24. All questions which come up before the Board of Discipline
shall be decided by a majority of the members present and voting,
and in the event of an equality of votes, the Presiding Officer or in his
absence, the person presiding, shall have a second or casting vote.

25. The quorum for any meeting of the Board of Discipline shall
be two members.

26. In the event of the Presiding Officer not being able to attend a
meeting of the Board of Discipline, the member of the Council
appointed under clause (b) of sub-section (1) of Section 21A of the

Act shall act as the Presiding Officer.

Procedure to be followed by the Board of Discipline

27. The Board of Discipline shall follow summ ary disposal
procedure in dealing with all cases before it. If the Board of Discipline
decides to proceed further under clause (b) of sub-rule (2) of rule 9 or
under clause (b) of sub-rule (3) of rule 9, it shal expeditiously cause to
deliver to the respondent and the complainant, a copy each of prima
facie opinion formed by the Director; and particulars or documents
relied upon by the Director, if any, during the course of formulation of
prima facie opinion.

28. The Board of Discipline shall inform the respondent to file a
written statement, within such time as may be specified. One time
additional time for submitting written statement may be given to the
the respondent on his adducing sufficient reasons to the satisfaction
of the Board of Discipline .

29. The respondent shall send a copy of his written statement,
along with supporting documents, to the Director and the
complainant within the stipulated time.

30. The complainant or the Director may, after receipt of the
written statement, submit a rejoinder to the Board of Discipline, with
a copy to the respondent, along with supporting documents, if any.

31. The Presiding Officer of the Board of Discipline shall fix a
date, hour and place of hearing, which shall not ordinarily be later
than 45 days from the date of receipt of prima facie opinion and the

Board of Discipline shall cause a notice to be sent of such date, hour
and place to the Director, respondent and complainant and require
them to appear before it in person to make oral submissions, if any.

32. Appearance by an advocate or through any authorized representative,
who may be a Chartered Accountant, Cost Accountant or Company

Secretary is permitted.

Guidance Note on Code of Conduct for Company Secretaries

117

33. On the date of hearing, if the respondent, in spite of the
service of notice, under sub-rule (6), does not appear either in
person or through his authorized representative, the Board of

Discipline may proceed ex-parte and pass such orders as it may
think fit or direct fresh notice to be served.

34. The Board of Discipline may, on such terms as it thinks fit,
and at any stage of the proceedings one adjourn the hearing.

35. The Board of Discipline shal consider the written representations,
including the written statements, rejoinder and supporting documents,
and the oral submission, if any made by the Director, the complainant
and the respondent, and arrive at a finding on whether the respondent
is guilty or not of any professional or other misconduct.

Orders of the Board of Discipline

36. On arriving at a finding that the respondent is guilty of professional or
other misconduct, the Board of Discipline shall give the respondent an
opportunity to be heard before passing any order under sub-section

(3) of section 21A of the Act.

37. If the respondent is not guilty of professional or other misconduct,
the Board of Discipline shall pass orders closing the case.

38. The Board of Discipline shall send, free of charge, to the Director,
respondent and the complainant, a certified copy of the final
order.

Disciplinary Committee

39. The Council has constituted a Committee presently located in Delhi.

40. All questions which come up before the Committee are decided by a
majority of the members present and voting, and in the event of an
equality of votes, the Presiding Officer or in his absence, the person
presiding, shall have a second or casting vote.

41. The quorum for meeting of the Committee shall be three members,
of which at least one shall be a member nominated by the Central

Government under sub-section (1) of section 21B of the Act

42. In the event of the Presiding Officer not being able to attend a meeting
of the Committee, the senior most member amongst the members
nominated by the Central Government under sub-section (1) of

Section 21B of the Act shall act as the Presiding Officer.

43. The Committee shall, subject to the other provisions of the Act and
these rules, regulate its own procedure for matters not covered by the

Rules.

Procedure to be followed by the Committee

44. The Committee shall be guided by the principles of natural justice and

118

Guidance Note on Code of Conduct for Company Secretaries
shall follow the procedure in dealing with all cases before it, as laid
down in the rules which is similar to that follwed by Board of Discipline.

45. If the respondent pleads guilty, the Committee shall record the plea
and take action as per provisions under rule 19.

46. If the respondent does not plead guilty, then the Committee shall fix
a date for examination of witnesses and production of documents.

47. Committee may permit the cross-examination of any witness to be
deferred until any other witness or witnesses have been examined or
recall any witness for further cross-examination.

48. The witnesses summoned is not eligible for reimbursement of
expenses incurred for attending the hearing except where a witness
summoned before the Committee under sub-rule (11) of rule 18.

who shall be eligible for reimbursement of expenses, as may be
determined through guidelines laid down by the Council.

49. After evidences have been presented, the Director and the respondent
shall present their arguments before the Committee.

50. The complainant and the respondent shall have the right to attend the
hearings of the Board of Discipline or the Committee, as the case may
be, unless ordered otherwise by the Board of Discipline or Committee,
for reasons to be recorded in writing.

51. The complainant and the respondent shall not be eligible for
reimbursement of expenses incurred for attending the hearing.

***

Guidance Note on Code of Conduct for Company Secretaries

119

Annexure XV

GIST OF DISCIPLINARY PROCEEDINGS AGAINST MEMBERS

(I) Clause (6) of Part I of the First Schedule

A member was charged with contravention of clause (6) of Part I of
the First Schedule to the Company Secretaries Act, 1980, vide complaint
dated 18.4.1989, for sending circular letters indirectly soliciting
professional assignment from certain companies. The respondent in
his written statement submitted that neither he nor his partner were
in whole-time practice entitled to sign annual returns and that the
letter under reference was issued by him with the only intention of
informing the listed companies of a newly introduced provision of

Companies (Amendment) Act, 1988, with regard to certification of
annual return. There was no intention to solicit professional work either
directly or indirectly, he stated.

The Disciplinary Committee pointed out that although the respondent
was not qualified to sign the annual returns and he had submitted that
he had no intention to solicit business but only to educate the various
companies about the new provision of law, the issuing of circulars to
companies listed at the Stock Exchange with whom the respondent
had no business relationship, can be calculated to indirectly secure
publicity and solicit clients as the recipients of the circular may be
lured to contact the respondent for the assignment or further details.

Such a circular is not proper and attracts clause (6) of Part I of the First

Schedule to the Company Secretaries Act, 1980.

It is, however, not denied that the concept of Company Secretaries in
practice is in nascent stage and members at large may not have been
ful y aware of the implications of soliciting business, after the provisions
relating to certification of annual returns came into force.

In issuing the circular to persons who were not in professional
relationship with the respondent, the respondent violated, may be
unwittingly, clause (6) of Part I of the First Schedule to the Company

Secretaries Act, 1980. He was therefore, guilty of professional
misconduct in terms of the said clause.

However, as the respondent has admitted that he had absolutely no
intention to advertise himself or solicit business from any quarter and
that it had been out of sheer over enthusiasm and in view of the fact
that he has tendered unqualified regrets and that he is not qualified to
undertake the certification work being not in whole-time practice, the

Committee recommended that the Council may take a lenient view
of the case.

The Council concurred with the findings of the Disciplinary Committee
and held the respondent guilty of professional misconduct and passed an
order of ‘Reprimand’ against him in accordance with sub-section (4) of
section 21 of Company Secretaries Act, 1980.

120

Guidance Note on Code of Conduct for Company Secretaries

Comment : Now the concept of Company Secretaries in practice is
no more in nascent stage and members are fully aware of the
implications of soliciting business and hence lenient view may not be
expected anymore.

(II) Clause (8) of Part I of the First Schedule

A complaint was filed against a member for violation of clause (8) of

Part l of the First Schedule to the Company Secretaries Act, 1980, on
the grounds of:

(a) signing of the Annual Return of a listed company for the financial
year ended on 31.3.1989, without first communicating in writing
with the complainant who had certified the annual return of the
said company earlier; and

(b) accepting the position as company secretary in practice in the
aforesaid company which was previously held by the complainant,
in such conditions which clearly amounted to under cutting as the
respondent raised a bill of Rs. 1,000 only for the certification of
annual return for which in the ordinary course, the bill should not
have been less than Rs. 5,000.

The respondent in his written statement stated with regard to allegation

(a) that he had not snatched any assignment made in favour of the
complainant but admitted that the said mistake of non-communication
occurred through oversight and not intentional y.

Regarding al egation (b) he stated that the object of undercutting was
to compete and get professional work but he only relied upon the
information given by the Company and the fee was accordingly
charged.

The Disciplinary Committee after enquiry found that the respondent
was guilty of professional misconduct under clause (8) of Part I of the

First Schedule to the Company Secretaries Act, 1980, in having
accepted and commenced the certification of 1989 annual return for
the said company without first communicating with the complainant
in writing. The Disciplinary Committee observed that a perusal of clause

(8) of Part l of the First Schedule clearly established that it was a
mandatory provision and not recommendatory as evident from the
word ‘shall’ used therein. The Guidance Note on Signing of Annual

Return did not say that the communication with the earlier incumbent
in case of signing of annual return was recommendatory but it only
stated that it was recommendatory to make the communication by
way of registered post. So far as the communication was concerned
that mandatory requirement existed and the respondent admittedly
did not communicate by any available means as required by the Act

[ J.S. Bhati v. Council of ICAI (SB. Civil Misc. Appeal No. 136 of

1973) - referred to].

As regards the al egation regarding undercutting of fee the Committee

Guidance Note on Code of Conduct for Company Secretaries

121
pointed out that the fee charged for any work is dependent inter alia
upon the work load, time involved, standing, seniority and reputation
of the person concerned. A lower fee charged by a new incumbent
may not ipso facto amount to undercutting. For want of evidence the

Committee came to the conclusion that the charge could not be
substantiated and that the respondent was not guilty of undercutting.

* Comment : due to deletion of clause 11 of the First Schedule as it
existed prior to amendment in 2006 , undercutting is no more a case
of misconduct.

The Council concurred with the findings of the Disciplinary Committee
and held the respondent guilty of professional misconduct in not
ensuring advance communication and passed an order of ‘Reprimand’

against him in accordance with sub-section (4) of section 21 of the

Company Secretaries Act, 1980.

(III) Clause (8) of Part I of the First Schedule

In yet another case a similar complaint was made against a member
for signing of the annual return of a listed company for the financial
year ended on 31.3.1989, without first communicating in writing with
the complainant who had certified the annual return of the company
earlier. The respondent in his written statement admitted that for the
year 1988, the complainant had signed the annual return of the
company while for 1989 the respondent had signed return of the said
company. He stated that he had duly intimated to the complainant at
his official address by a letter under certificate of posting dated

20.9.1989 and had waited for more than a month and then certified
the annual return on 29.11.1989. He also forwarded with his written
statement a photocopy of the intimation letter and certificate of posting.

The Disciplinary Committee found that the facts of the case were
similar to those of J.S Bhati v. Council of ICAI (S.B. Civil Misc. Appeal No. 136 of 1973) where the Rajasthan High Court while interpreting
a similar provision relating to Chartered Accountants Act pointed out
that the expression “communicate with him in writing”, could not be
interpreted to mean that the provision simply casts a duty in the incoming
auditor to accept his new assignment. He has to do something more
to discharge his obligation. The expression ‘communicate with him’

requires more than mere intimating his intention by dispatching a
letter under certificate of posting. The Disciplinary Committee pointed
out that mere posting of a letter should not be sufficient compliance
but acknowledgement by the addressee of the same was also essential.

On the basis of materials available it could not be proved that the
complainant received that letter of intimation. Hence, it was held that
the respondent was guilty of violating clause (8).

The Council concurred with the finding of the Disciplinary Committee
and held the respondent guilty of professional misconduct and passed
the order of ‘Reprimand’ against him in accordance with,
sub-section (4) of section 21 of Company Secretaries Act, 1980.

122

Guidance Note on Code of Conduct for Company Secretaries

(IV) Clause (10) of Part I and Clause (3) of Part III of the First

Schedule (Now Clause 2 of Part III of the First Schedule and
clause 3 of Part II of the second Schedule after 2006
amendment.)

In another case a complaint was made against a member for violation
of clause (10) of Part l and clause (3) of Part Ill of the First Schedule to
the Company Secretaries Act, 1980, on the grounds of:

(a) holding the Certificate of Practice of both the Institutes i.e. the

Institute of Company Secretaries of India and the Institute of

Chartered Accountants of India which has not been permitted by
the Council of the former and Practicing both the professions on
whole-time basis; and

(b) the information that he was holding the Certificate of Practice of
the Institute of Chartered Accountants of India was not disclosed
by him to the Council of ICSI which was required to be given at
the time of renewal of Certificate of Practice.

The respondent in his written statement had admitted his mistake of
holding certificates of practice of both the Institutes simultaneously
but he stated that his intention was not mala fide and that he had not
enjoyed any extra benefit of such dual holding of certificate of practice.

Regarding allegation (b) it was stated that he had informed the ICSI in
reply to its letter dated 18.11.1989 that he had already surrendered
certificate of practice of ICAI but so far he had not received any
communication from ICAI about the cancellation of his certificate of
practice.

The Disciplinary Committee after enquiry found that the information
regarding holding of certificate of practice of ICAI was given by the
respondent to the ICSl only when the ICSI vide its letter dated

25.9.1989, specially asked the respondent to confirm whether he was
holding certificate of practice from the ICAI / lCWAI.

When the respondent had given a declaration that he had surrendered
the certificate of practice from ICAI, it was obligatory on him to make
sure that his certificate of practice of ICAl had been cancelled in their
records. But the respondent did not care to confirm from ICAl whether
his certificate of practice had been cancelled in their records as request
made by him to it on 1.9.1989. Therefore, on the basis of material
made available on record, it was clear that the respondent had violated
the provisions of Clause (3) { now Clause 2 of Part III of the First

Schedule and clause 3 of Part II of the second Schedule after 2006
amendment } of Part III of the First Schedule to the Company

Secretaries Act, 1980.

So far as al egation at (b) is concerned the contention of the respondent
that he never used the certificate of practice of ICSI cannot be accepted
as it was used by him for admission as Fellow Member of ICSI.

Guidance Note on Code of Conduct for Company Secretaries

123

The Council concurred with the above finding of the Disciplinary

Committee and held the respondent guilty of professional misconduct
and passed an order to the effect that ‘the name of the respondent be
removed from the Register for a period of one year’ as provided in
sub-clause (b) of sub-section (4) of section 21 of the Act.

(V) Clause (10) of Part I and Clause (3) { Now Clause 2 of Part III
of the First Schedule and clause 3 of Part II of the second

Schedule after 2006 amendment} of Part III of the First Schedule

In another case a complaint was made for violation of clause (10) of

Part l of the First Schedule and Clause (3) of Part Il of the First Schedule
to the Company Secretaries Act, 1980, on the grounds of:

(a) holding the Certificate of Practice of both the Institutes i.e. Institute
of Chartered Accountants of India and Institute of Company

Secretaries of India without the permission of the Council of the
latter and also Practicing both the professions on whole-time basis
simultaneously;

(b) Signing of annual return in excess of the limit fixed by the Institute,
during the year 1989-90;

(c) holding of post of Company Secretary under section 383A of the

Companies Act, 1956; and

(d) filing of Form 32 in respect of his appointment under
section 383A of Companies Act, 1956.

The respondent in his written statement stated with regard to allegation

(a) that he was holding only a part-time certificate of practice from the

Institute of Chartered Accountants of India which was later surrendered
in October 1990. Regarding allegation (b) he submitted that he did
not sign annual return of any company during the year due to his
continuous il -health. Regarding allegations (c) and (d), the respondent
denied that he held any post of company secretary under section 383

A of the Companies Act, 1956, or filed any Form No. 32 with any

Registrar of Companies in India showing his appointment as such.

The Disciplinary Committee after, enquiry found that admittedly, the
respondent’s case was that he was holding the Certificate of Practice
of Institute of Chartered Accountants of India from 1987 but in his
application dated 11.5.1988 for issue of certificate of practice made
to the Institute of Company Secretaries of India, he did not disclose
that he was holding part-time certificate of practice of ICAI. In his
application for issue of certificate of practice, he had given a declaration
that he was engaged in the profession of company secretaries and not
in any other profession, business or occupation. Further, on 21.6.1988,
he gave an undertaking/declaration to the Institute that as long as he
was holding certificate of practice of the ICSI, he would not hold the
certificate of practice from any other professional body or institution.

In his statement given before the Disciplinary Committee the

124

Guidance Note on Code of Conduct for Company Secretaries
respondent had categorically admitted that he had a certificate of
practice of ICAI since February 1987, and he also held Certificate of

Practice on whole-time basis til May 1988. With regard to his declaration
dated 11.5.1988, he stated that while giving the said declaration he
meant that he was not in whole-time practice as Chartered Accountant
but was in part-time practice as Chartered Accountant on the date of
declaration but in the first part of his statement he clearly admitted
that he was Practicing as a Chartered Accountant on whole-time basis
till May 1988. Therefore, the Committee found that the respondent
was guilty of violation of the provisions contained in Clause (10) of

Part l of the First Schedule and Clause (3) { Now clause Clause 2 of

Part III of the First Schedule and clause 3 of Part II of the second

Schedule after 2006 amendment . } of Part Ill of the First Schedule to
the Company Secretaries Act, 1980. As allegations (b) to (d) were not
referred to the Committee by the Council, it did not look into them.

The Council concurred with the above finding of the Disciplinary

Committee and held the respondent guilty of professional misconduct
and passed an order that ‘the name of the respondent be removed
from the Register for a period of one year ’ as provided in
sub-clause (b) of sub-section (4) of section 21 of the Act.

(VI) Clause (6) and (7) of Part I of the First Schedule

A complaint was filed against a member for violation of clauses (6) &

(7) of Part I of the First Schedule to the Company Secretaries Act,

1980 on the grounds of:

(a) printing and circulating visiting cards in a manner which is
prohibited by the Code of Conduct; and

(b) misusing the Institute’s letterhead, brochures, circulars etc.

mentioning his name with designation, description and the

Practicing field other than as prescribed and thus misleading the
reader by not mentioning his whole-time employment.

The respondent in his written statement denied all the allegations and
stated the same were untrue. Regarding visiting cards the respondent
had stated that the cards in question were not printed by him or used
by him and the souvenir and the brochures were published by Regional

Council Office and not by him and he also stated that there was
nothing to indicate personal canvassing and misleading of the readers
by him in the souvenir, brochure or visiting cards, as alleged.

The Disciplinary Committee after enquiry found that the respondent
was guilty of professional misconduct under clause 7 of Part I of the

First Schedule to the Company Secretaries Act. 1980 and observed
that the respondent’s plea that he had not printed or circulated or
used the visiting cards cannot be accepted on the bases of the facts
and circumstances of the case. Since the respondent had held a certain
office in the Regional Council at the relevant point of time, his plea

Guidance Note on Code of Conduct for Company Secretaries

125
that what was printed in the souvenir, brochures and other materials
was done by the Regional Council Office without his knowledge and
consent cannot be accepted, particularly as he said that he had nothing
more to add, when the Committee had asked him what steps he took
to prevent circulation of such material.

The Council concurred with the finding of the Disciplinary Committee
and held the respondent guilty of professional misconduct and passed
an order of ‘Reprimand’ against him in accordance with sub-section

(4) of section 21 of the Company Secretaries Act, 1980.

(VII) Clause (6), (7) and (8) of Part I of the First Schedule

In yet another case a complaint was filed for violation of clauses (6), (7)

& (8) of Part l of the First Schedule to the Company Secretaries Act,

1980, on the grounds of:

(a) accepting a certification work from a company without first
communicating with the earlier incumbent;

(b) misrepresenting by issuing his association with the complainant;

(c) circulating visiting cards against the Code of Conduct; and

(d) addressing a letter to a company indirectly soliciting professional
assignment.

The respondent in his written statement stated with regard to allegation

(a) that he had not snatched any assignment made in favour of the
complainant but admitted that there was delay in communicating the
acceptance of assignment from the named company for certification
of annual return for 1989 and the delay was not intentional but was
due to inadvertence. Regarding al egation (b), it was submitted that at
no time he had any association with the complainant and hence had
not misrepresented. Regarding allegation (c) about visiting cards, he
submitted that the visiting cards under question were printed in a very
small quantity and the same were used by him only for limited purpose
in connection with the business of a company in whose service he
was and that too only for a short period. Regarding allegation (d), he
had denied having solicited any professional assignments through any
unfair means.

The Disciplinary Committee held as under:

(a) The respondent is guilty of violation of the provisions contained in

Clause (8) of Part l of the First Schedule to the Company Secretaries

Act, 1980, on his own admission that he had not communicated
with the complainant prior to accepting the 1989 Annual Return

Certification work for the company but the respondent is absolved
of the charge of snatching assignment from the complainant as
the complainant had not been assigned the Certification of Annual

Return of the company for the year 1989.

(b) In the absence of deposition of witnesses or written evidence in

126

Guidance Note on Code of Conduct for Company Secretaries
this regard, the complaint regarding misrepresentation against the
respondent was not held proved.

(c) On the admission of the respondent it was clear that the visiting
cards were circulated in violation of rules of the Code of Conduct
laid by the Institute albeit for a short duration. However, the fact
that the respondent had taken corrective steps in this regard, may
be kept in mind while taking further action.

(d) In the absence of deposition of witnesses or furnishing of suitable
evidence, the letter on record dated 8.12.1989, from the
respondent to the company secretary of a company speaks for
itself that the respondent in having issued this letter has violated
the provisions of Clause (6) and/or (7) of Part l of the First Schedule
to the Act.

Accordingly, the Committee concluded that the respondent was guilty
of professional misconduct under Clauses (6), (7) and (8) of Part l of
the First Schedule to the Company Secretaries Act, 1980— (a) in having
accepted and commenced the 1989 Annual Return Certification work
without first communicating with the complainant; (b) circulating visiting
cards against the Code of Conduct though for a short duration only,

(c) in addressing a letter dated 8.12.1989 to the company secretary of
a company indirectly soliciting professional assignment and (d) in
addressing a letter to the company, in violation of the relevant provisions
contained in the First Schedule to the Company Secretaries Act, 1980.

The Council concurred with the above findings of the Disciplinary

Committee and held the respondent guilty of professional misconduct
and passed an order of ‘Reprimand’ to the respondent in accordance
with sub-section (4) of section 21 of the Company Secretaries Act,

1980.

(VIII) Clauses (6) and (7) of Part I of the First Schedule

A complaint was filed against a member alleging misconduct as
envisaged under clauses (6) and (7) of Part I of the First Schedule to
the Company Secretaries Act, 1980. The allegations were that the

Member:

(a) had personally met officers of the ABC Ltd. on various occasions
for soliciting business;

(b) had used the influence of a Management Consultant to solicit
business;

(c) had written a nasty letter to the Senior President of ABC Ltd.

which was against the Code of Conduct;

(d) had described himself in visiting cards and letter heads as “Advocate,

High Court” which was also against the Code of Conduct;

(e) had sent undated circulars to companies to solicit professional
work by unfair means.

Guidance Note on Code of Conduct for Company Secretaries

127

In his written statement the respondent denied the allegations. His
contention was that the complaint was based on documents produced
in another complaint where the respondent was himself the
complainant and that till such time the other complaint was disposed
of, the documents could not be used in the present complaint. He
denied meeting the senior executives of the ABC Limited since he
was never appointed to carry out the work of certification of annual
returns for the year 1989. Allegations (b) and (c) were based on the
evidence produced by the Member himself in the earlier complaint
filed by him. According to him, describing himself as Advocate in his
visiting card while being a Practicing Company Secretary did not amount
to misconduct. Regarding allegation (e) the respondent stated that
there was no circular as alleged but what was produced by the
complainant as evidence was only a copy of the acknowledgement
receipt from the company.

The Disciplinary Committee found that the respondent did resort to
unfair means in soliciting professional work and that the letter written
by respondent to ABC Limited were violative of professional standards
of behaviour. In spite of the clarification from the Institute that no
one, using the designation ‘Company Secretary’, was to use any other
designation to describe himself, the respondent had used both the
designations “Company Secretary” and ‘Advocate, High Court’ and
this was clearly against the Code of Conduct. The Committee
categorical y held that there was nothing wrong in relying upon evidence
or documents which may have formed the basis of any other complaint.

In matters of professional conduct it is necessary for the Institute to
uphold high values so that the image of the Institute is not impaired
and technical points ought not to influence the findings in such matters.

The Committee held the respondent guilty of professional misconduct
under Clauses (6) and (7) of Part I of the First Schedule to the Company

Secretaries Act, 1980.

The Council after considering al the documents and the representations
of the parties both written and oral, confirmed the findings of the

Disciplinary Committee. Thereafter hearing was afforded to the
respondent member as envisaged under section 21(4) of the Company

Secretaries Act, 1980, and the Council passed an order directing the
removal of the name of the respondent member from the Register for
a period of one year.

The respondent member preferred an appeal in the Court under
section 30 of the Act. The Court, without expressing any opinion on
merits of the matter, accepted the respondent Members’ apology
tendered in the Court, and in view of the apology and considering all
factors, the Court set aside the order passed by the Council. Thereafter,
the respondent member’s name was reinstated in the Register of

Members as Associate Member from the date of removal. Now appeal
can be made before the Appellate Authority and from there to the

Supreme Court.

128

Guidance Note on Code of Conduct for Company Secretaries

(IX) Clause 10 of Part I of the First Schedule

A complaint was filed against a member of the Institute ( hereinafter
referred to as ‘Respondent’) for professional misconduct alleging the
following—

(a) that he has been employed as a company secretary on remuneration
while holding a certificate of practice of the Institute;

(b) he had disclosed information confidential and other acquired by
him in the course of his professional engagement;

(c) he was grossly negligent in the performance of his professional
duties and failed to fulfill the requirements of the Companies Act,

1956 and other Acts;

(d) he was carrying several other business other than full-time
employment while holding certificate of practice.

The Respondent in his written statement submitted with regard to
allegation (a) that his association with the company was an interim
measure and he was appointed to the post of Company Secretary on
certain remuneration even without discussion/obtaining any prior
consent from him. Regarding allegation at (b) the Respondent
submitted that the same is absolutely vague, false and motivated.

Regarding allegation at (c) he stated that he performed his duties
completely in accordance with the Articles of Association of the

Company and the applicable provisions of the Companies Act.

Regarding al egation (d) the Respondent stated that he had not indulged
in any business / occupation.

The Disciplinary Committee after enquiry found the Respondent guilty
of professional misconduct under clause (10) of Part I of the First

Schedule to the Company Secretaries Act, 1980, for engaging himself
in employment while having a certificate of practice from the Institute.

The explanation / justification of the Respondent that at the time he
had resigned from the services of the Company and in anticipation of
his being relieved from employment, he had applied for renewal of
certificate of practice for the year 1992-93. The Disciplinary Committee
observed that the said explanation/justification of the Respondent is
not acceptable and it is for the member having certificate of practice
of the Institute to ensure the prior approval of the Council before
engaging in any business, occupation, employment or other profession
and found the Respondent guilty of professional misconduct under
clause (10) of Part I of the First Schedule to the Act.

As regards the other allegations, the Committee held that the same
have not been proved as were neither proved, by the Complainant by
evidence nor the documents on record substantiated the said
al egations.

The Council after considering the report of the Disciplinary Committee,

Guidance Note on Code of Conduct for Company Secretaries

129
al the relevant documents, circumstances and representations of both
the parties, endorsed the findings of the Disciplinary Committee that
the Respondent was guilty of professional misconduct under
clause (10) of Part I of the First Schedule to the Act and passed an
order of ‘Reprimand’ against the respondent.

(X) Clause (1) of Part II of Second Schedule

A suo-motu enquiry was initiated by the lnstitute against the member

(hereinafter referred to as ‘Respondent’) on receipt of information
that he had certified the annual returns of one company without having
a certificate of practice issued by the Institute and the same was signed
by him fraudulently stating himself as a Company Secretary. The act
on the part of the member amounted to professional misconduct under
clause (1) of Part l of the Second Schedule to the Company Secretaries

Act, 1980.

The Respondent in his written statement stated that — (a) the Institute’s
letter regarding cancellation of his certificate of practice could not
come to his notice due to misplacement by his family member. The
said annual returns had been signed by him under the belief that he
had been holding the certificate of practice during that period; (b)

after realizing the mistake, he rectified the same by getting the said
annual returns re-certified by some other company secretary at his
own expenses. The Council after forming the prima facie opinion
referred the matter to the Disciplinary Committee for an enquiry.

The Disciplinary Committee after enquiry from the documents and
information on record observed that it was clear that the Respondent
had certified the annual returns without holding a certificate of practice
from the Institute. The Respondent had also admitted his said mistake.

The contention of the Respondent that he had signed the annual
returns under the belief that he had been holding the certificate of
practice during that time had not been substantiated by any document
or other evidence on record. The Respondent’s another contention
that he had not received the Institute’s letter regarding cancellation of
certificate of practice at his request was not tenable as, it was obligatory
on the Respondent to be sure that his Certificate of Practice had been
cancelled in the records of the Institute and also the date of cancellation
while holding Certificate of Practice on whole-time basis from lCAI.

The Disciplinary Committee found the Respondent guilty of professional
misconduct under clause(1) Part II of the Second Schedule to the

Company Secretaries Act, 1980 for contravention of section 6 of the

Company Secretaries Act,1980.

The Council after considering the report of the Disciplinary Committee
and the representation of the Respondent found that the Respondent
was guilty of professional misconduct for signing the annual returns of
a company without holding a certificate of practice under clause (1) of

Part II of the Second Schedule to the Act though the said act might

130

Guidance Note on Code of Conduct for Company Secretaries
have been committed by him bonafide and forwarded the case to the

High Court under sub-section (5) of section 21 of the Act, along with
its recommendations that in view of the respondent having admitted
his guilt and also apologised for the same he be reprimanded.

The Hon’ble High Court of Rajasthan vide its order dated 10th March,

1997 accepted the reference of the Institute wherein he was
recommended to be ‘Reprimanded’. Accordingly, the punishment of

‘Reprimand’ was recorded in the Register of Members against his
name. { now after 2006 amendment there is no need for making
reference to the High court . Matters covered by second schedule are
dealt with by the Disciplinary Committee.}

(XI) Clause (6) of Part I of the First Schedule

A suo-motu enquiry was initiated by the Institute on receipt of
information against the member (hereinafter referred to as

‘Respondent’) that he had solicited professional work of signing the

Annual Returns of a company through a letter, which amounted to
professionaI misconduct under clause (6) of Part I of the First Schedule
to the Company Secretaries Act, 1980. The Respondent in his written
statement admitted that he had been negligent in drafting and sending
few letters to the company and also requested for condonation of
lapse of any violation. However, the Respondent submitted that the
letter under reference was issued by him in connection with some
assignment entrusted to him by one bank for the preparation of search
report, verification of charges and detailed inventory audit, including
the company to which he had sent the letter under reference.

The Disciplinary Committee after enquiry observed that though the

Respondent tried to explain and justify his act of omission, yet there
was no substance in his explanation / justification and being a senior
member of the Institute his statement that the omission was committed
by him accidentally and without any intention on his part was not
acceptable. The Committee found that the Respondent was guilty
of professional misconduct under clause (6) of Part l of the First

Schedule to the Act for issuing a letter to the Managing Director of
the company for soliciting professional work.

The Council after considering the report of the Disciplinary Committee,
representation of the Respondent and all the relevant documents and
circumstances endorsed the findings of the Disciplinary Committee
and held that the respondent was guilty of professional misconduct
under clause (6) of Part I of the First Schedule to the Act, and after
affording an opportunity of hearing to the Respondent passed an order
of ‘Reprimand’ against him.

(XII) Clause (6) of Part I of First Schedule

It was brought to the notice of the Institute that a Member had issued
a circular letter offering secretarial services and soliciting professional

Guidance Note on Code of Conduct for Company Secretaries

131
work which amounted to professional misconduct under clause (6) of

Part l of the First Schedule to the Company Secretaries Act, 1980

(hereinafter referred to as the ‘Act’).

On receipt of the information, the Institute initiated suo-motu enquiry
against the Member. The Member in his written statement admitted
to have issued a circular letter and stated that the same was issued
inadvertently due to absence of knowledge of such prohibition.

The Disciplinary Committee after enquiry found the member guilty of
professional misconduct under clause (6) of the Part I of the First

Schedule to the Act for issuing the circular letter for soliciting professional
work.

The Council considered the report of the Disciplinary Committee,
representation of the member and all other relevant documents
available on record and attended facts and circumstances, recorded its
findings that the respondent was guilty of professional misconduct
under clause (6) of Part l of the First Schedule to the Act and passed
the order of ‘Reprimand’ against him.

(XIII) Clause (8) of Part I of First Schedule

A complaint was filed against a member for violation of clause (8) of

Part I of the First Schedule to the Company Secretaries Act, 1980 on
the ground that the respondent has accepted the assignment of
certification of Annual Return of a Company for the year 1994-95
without first communicating his acceptance of his position to the
complainant in writing. The respondent in his written statement stated
that he had accepted the position with prior intimation to the
complainant through a letter at Complainant’s official address and also
stated that due date for filing the annual returns for the period ended
on 30.9.1995 was 30.11.1995 and there was no time left with him
not to sign them on or before 30.11.1995. Otherwise the company
has to face the default notice under the provisions of the Companies

Act, 1956. The Disciplinary Committee after enquiry found the member
guilty of professional misconduct under clause (8) of Part I of the First

Schedule to the Company Secretaries Act, 1980 in having accepted
the certification of Annual Return of the company for the year 1994-

95 without first communicating with the complainant in writing.

The Disciplinary Committee observed that mere posting of the letter
is not sufficient to comply with the requirement of clause (8) of Part

I of First Schedule to the Act, but acknowledgement by the addressee
of the same is also essential.

The Council considered the report of the Disciplinary Committee,
representation of the member and other relevant documents available
on record and attendant facts and circumstances recorded its findings
that the respondent was guilty of professional misconduct under
clause (8) of Part I of the First Schedule to the Act and passed the

132

Guidance Note on Code of Conduct for Company Secretaries
order of ‘Reprimand’ against him in accordance with sub-section (4)

of Section 21 of the Act.

(XIV) Section 21 read with section 22 of the Company Secretaries

Act, 1980

A complaint was filed against a member for professional or other
misconduct under section 21 read with section 22 ( prior to 2006
amendment ) of the Company Secretaries Act, 1980 on the ground
that the respondent had misappropriated the funds of the Institute, by
placing on a printing press an order for printing of brochures and
souvenirs for the Regional Members Conference and passing the bill
of the printer at a rate which was abnormally high and for a quantity
more than the actual supply in spite of strong objections from the
concerned Regional Council Members.

The Disciplinary Committee, after enquiring into the complaint held
that the respondent was guilty of professional or other misconduct
under section 21(1) read with section 22 of the Company Secretaries

Act, 1980 in committing an act of gross negligence in awarding the
printing contract and passing the bills for payment without following
the prescribed procedure and especially so as he was an office bearer
of a Regional Council of the Institute.

The Council concurred with the findings of the Disciplinary Committee
and after taking into consideration the facts on record, held the
respondent guilty of professional or other misconduct and passed an
order of removal of respondent’s name from register of members of
the Institute for one month in accordance with sub-section (4) of
section 21 of the Company Secretaries Act, 1980.

(XV) Clause (8) of part I of the First Schedule

A complaint was filed against a member for professional misconduct
under section 21 of the Company Secretaries Act, 1980 for signing
the annual returns of eleven companies without first communicating
in writing with the complainant who had been earlier signing the

Annual Returns of these companies.

The Disciplinary Committee after enquiring into the complaint held
that the respondent was guilty of professional misconduct under

Clause (8) of Part I of the First Schedule to the Act for signing of

Annual Returns of eleven Companies without first communicating in
writing with the complainant.

The Council after considering the report of the Disciplinary Committee,
the written representation of the parties, documents on record and all
the facts and circumstances of the case, concurred with the findings
of the Disciplinary Committee and found the respondent guilty of
professional misconduct under Clause (8) of Part I of the First Schedule
to the Act and after considering the representation of the respondent

Guidance Note on Code of Conduct for Company Secretaries

133
passed an order of reprimand against the respondent in accordance
with sub-section (4) of section 21 of the Act.

(XVI) Clause (8) of Part I of the First Schedule

In another case, a complaint was filed against a member for professional
misconduct under Section 21 of the Company Secretaries Act, 1980
for signing the annual returns of a company without first communicating
in writing with the complainant, who had been signing the annual
returns of the said company for the past many years.

The Disciplinary Committee after enquiring into the complaint held
that the respondent was guilty of professional misconduct under

Clause (8) of Part I of the First Schedule to the Act for signing the

Annual Returns of the Company without first communicating in writing
with the complainant.

The Council after considering the report of the Disciplinary Committee,
documents on record and all the facts and circumstances of the case
concurred with the findings of the Disciplinary Committee, found the
respondent guilty of professional misconduct and after affording the
respondent an opportunity of hearing, passed an order of reprimand
against the respondent in accordance with Sub-section (4) of

Section 21 of the Company Secretaries Act, 1980.

(XVII) Clause (6) of Part I of the First Schedule

A suo-motu enquiry was initiated by the Institute under section 21
of the Company Secretaries Act, 1980 against the respondent on receipt
of information that the respondent had given an advertisement in the
newspaper in contravention of the provisions of the Company

Secretaries Act, 1980.

The Disciplinary Committee after enquiring into the matter held
that the respondent was guilty of professional misconduct under

Clause (6) of Part I of the First Schedule to the Act for giving an
insertion in the newspaper. The Council after considering the report
of the Disciplinary Committee, all records and circumstances, concurred
with the findings of the Disciplinary Committee and found the
respondent guilty of professional misconduct under Clause (6) of

Part I of the First Schedule to the Act and after considering the written
representation of the respondent passed an order of removal of
respondent’s name from the Register of members of the Institute for
a period of six months, in accordance with sub-section (4) of
section 21 of the Act.

ABOVE CASES WERE DECIDED PRIOR TO THE YEAR 2006 AND

HENCE THOUH THE PROCEDURES MAY HAVE CHANGED DUE TO

AMENDMNET TO THE ACT, THE PRINCIPLES ( RATIO OFF THE CASE)

HAD REMAINED SAME HENCE THESE HAVE BEEN REPORTED.

134

Guidance Note on Code of Conduct for Company Secretaries

CASES DECIDED POST 2006 BY THE BOARD OF DISCIPLINE.

(XVIII) Clause (8) of part I of the First Schedule to the Act

The complainant had alleged that the respondent had given the

Compliance Certificates to two HE Pvt. Ltd. and WE Pvt. Ltd. for the
financial years 2006-07 without any prior information in writing to the
complainant.

The respondent in reply had submitted that earlier the respondent
made great efforts to trace the company secretary who had previously
given the certificate and came to know that the complainant had given
the certificate to the two companies. The complaint was known to
him and he personal y went to the complainant’s residence at Lucknow,

UP and informed him regarding the same. The complainant informed
the respondent that no formal notice required since most of the member
of the Institute do not follow the guidelines. The respondent relying
complainant’s statement, did not given any formal written notice. He
further submitted that he got married on 6-12-2007 and due to lack of
time and having faith in the words of the complainant, became careless
in giving written communication before filing the compliance certificate.

The respondent admitted that he had not given any communication
in writing to the complainant prior to filing the Compliance Certificates.

After providing another opportunity of hearing, the Board passed the

Order of “ Reprimand”

(XIX) Clause 8 of Part I of the First Schedule to the Act .

The complainant had alleged that the respondent had accepted the
position of Company Secretary previously held by the complainant
without first communicating him in writing and certified the Annual

Return as on date of the AGM held on 21-09-2006.

The respondent vide e-mail dated 4th October, 2007 submitted as
under:-

(a) According to the First Schedule a Company Secretary in practice
shall be deemed to be guilty of professional misconduct if he
accepts the position of Company Secretary in practice previously
held by another company Secretary in practice without first
communicating with him in writing.

(b) The Institute has clarified the provision in its book “Guidance

Note on Code of Conduct for Company Secretaries (Second

Edition). The relevant parts of the provisions are quoted below:-

(i) the primary requirement under this clause of prior
communication with the previous incumbent is intended for
reasons of professional courtesy. The clause is not intended
to prevent a client from changing over to another company
secretary for his own reasons. The client as of right has full
freedom to change over to another company secretary.

Guidance Note on Code of Conduct for Company Secretaries

135

(ii) It would be desirably for the new incumbent to obtain a letter
from the company that no other company secretary has been
appointed for the same assignment.

(ii ) It is further clarified that though communication is a must,
obtaining consent will not apply in’ cases of certification of

Annual Returns for different years.

(iv) The respondent was assigned the task of certification of the

Annual Return of WF Services Ltd., for the year 2005-2006,
when the company was satisfied after discussion with the

Respondent.

(v) Due communication in writing in this regard pursuant to the

First Schedule to the Company Secretaries Act, 1980 was
sent by registered post by the Respondent to the address of
the Petitioner.

(vi) There is no provision in the Company Secretaries Act, 1980
under which the Respondent was under any obligation to
obtain a consent or no objection from the petitioner. The
respondent drew attention to 4 (iii) and 4 (iv) above.

(vi ) A letter dated 30th October, 2006 from the company’s to
the respondent regarding the appointment of the respondent
was received.

(vii ) As the relevant provisions of the First Schedule to the Company

Secretaries act, 1980 were duly complied with by virtue of
the written communication by the respondent to the petitioner
and no ‘consent’ or ‘no objection’ of the Petitioner was
necessary the complaint of the petitioner is liable to be
rejected.

The respondent submitted that through e-mail dated 4th October,

2007 a copy of letter of communication (scanned copy) was sent by
registered post to the complainant on dated 3rd November, 2006 but
despite a number of reminders the respondent has not submitted any
postal receipt for having sent the communication.

Since the respondent has failed to send the proof of having sent the
communication by registered post and the complaints has denied to
have received any such communication, the board held the
respondent is prima facie guilty of professional misconduct under
clause (8) of Part I of the First Schedule to the Act. What was the
punishment?

(XX) Clause (8) of part I of the First Schedule to the Act

The complainant had alleged that the respondent had issued

Compliance Certificate to M/s. ST Pvt. Ltd. for the financial year ended

31-03-2007 without prior communication in writing to the complaint.

The said certificate has been issued at Ludhiana where the respondent
has no office. The complainant has further alleged that the respondent

136

Guidance Note on Code of Conduct for Company Secretaries
has solicited professional work by personal communication through
the mediator. The complainant has also alleged the respondent has
not intimated his professional address to the Institute.

The respondent submitted that he had sent a letter dated 4-10-2006
to the complainant intimating him of his appointment as Compliance

Officer. The complainant denied to have received any such letter from
the respondent. The respondent denied of soliciting professional work.

The respondent submitted that he was in a rented premises (changed
recently) but had not changed the correspondence address which is
his permanent residence at Yamuna Nagar.

The respondent was requested to provide the mode of having sent
the letter dated 4th October, 2006 to the respondent and the proof of
having sent the said letter. However, the respondent did not provide
any proof .

After considering the allegation and the defence, the Board was of
the opinion that the respondent has not effectively communicated
with the respondent before accepting the assignment and therefore
guilty of professional or other misconduct under clause (8) of Part I of
the First Schedule to the Company Secretaries Act, 1980.

(XXI) Clause (8) of part I of the First Schedule to the Act

The respondent had informed to have intimated the Complainant by a
letter under Certificate of Posting which the respondent denied to
have received. The UPC does not provide positive evidence of having
received the letter by the respondent. Hence, the respondent is prima-
facie guilty of Professional or other misconduct.

CASES DECIDED POST 2006 BY THE DISCIPLINARY

COMMITTEE

(XXII) Clause 1 of Part II of the second Schedule to the Act

A Complaint was received against a PCS alleging that he was holding

Certificate of practice while being in employment which was in
contravention of the resolution passed by the Council.

The Complaint was enquired into by the Disciplinary Committee and
the charge was proved. The Committee after providing the opportunity
of hearing removed the name of the respondent for the period of 90
days.

(XXIII) Clause 7 of Part I of the second Schedule to the Act

A Complaint was received against a PCS al eging that PCS was negligent
in discharging her professional duties.

The respondent provided explanation to the various allegations made
by the complainant, however, the respondent accepted that a wrong
date of resignation in respect of one of the Directors was inadvertently

Guidance Note on Code of Conduct for Company Secretaries

137
mentioned. Respondent PCS also accepted to have made similar
mistakes on more than one occasion for which she has not provided
any justification including Form No.2 which was filed on three
occasions.

(XXIV) Clause 7 of Part I of the second Schedule to the Act .

It was alleged that the respondent issued certificate No.178240 for

34,00,000 shares and certificate No.178241 for 6,00,000 shares in
lieu of certificate No.178197 for 40,00,000 shares. These shares were
issued on 12th September, 2003, although the same was approved by
the Shares Transfer and the Grievance Committee in its meeting held
on 27th February, 2004. Also there was no superscription on the
certificate No. 178240 and 178241 to the effect that these certificates
were issued in lieu of certificate No.1 74197. This lead to circulation
or two sets of certificates (No.178240 for 34,00,000) shares.

The respondent during her deposition before the investing authority
of SEBI had identified the three sets of certificates issued by PGL in
the name of VAPL. She also admitted the lapse, which she attributed
to her in-experience.

The Committee after providing the opportunity of hearing to the member
decided that The name of a member be removed from the Register of

Members for the period of 30 days.

(XXV) Clause 7 of Part I of the second Schedule to the Act

The Complainant has alleged that the respondent has manipulated
the challans and falsified the information in the MCA21 portal service.

The respondent had generated two challans and the third challan was
created manually superimposing the data of the second challan. The
third challan was presented to a Bank along with transfer cheque of

Rs.25,000/-. However, the verification procedure laid down in the
reconciliation of the payments in the MCA21 system had trapped the
modifications and rejected the chal an with the error back to the bank.

After this the respondent approached ROC, Chennai on 3rd October,

2006 for Master Data correction and upon rectification filed a fresh

Form 5 paying Rs.25,000/- as the fee.

The respondent in his written statement accepted the allegation

“ I have made my submissions in this matter. Whatever mistake has
happened . I request the Disciplinary Committee to be lenient and
close the matter. I assure you that I wil hold the professional ethics of
the Institute.”

After providing another opportunity of hearing , the Committee passed
the Order of “ Reprimand”.

***

Document Outline

- 1

- 2

Table of Contents

- 1

- 2