PEER REVIEW GUIDELINES Guidelines effective from October 1

PEER REVIEW: GUIDELINES Guidelines effective from October 1, 2011 The Peer Review process is an attempt to enhance the quality of services rendered by members of ICSI in practice. PR is a ‘handholding exercise’ and not a ‘fault finding exercise’. 1

n Peer Definition of Peer Review (Para 3. 4) Review deals with examination and review of systems and procedures to determine whether the systems and procedures are in: – Existence – Effective – Operating continuously during the period under review – Put in place by the practice 2

n Means Definition of Attestation Services (Para 3. 1) services involving the secretarial audit issuing of various certificates, but does not include: – Management engagements; consulting – 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, or the basis of facts provided by the 3

n Following Attestation Services covered under Peer Review services are covered under Peer Review: – Signing of Annual Return pursuant to Section 161(1) of the Companies Act, 1956 – Issue of Compliance Certificate pursuant to Section 383 A(1) of the Companies Act, 1956 – Issue of certificate of Securities Transfers in compliance with the Listing Agreement with Stock Exchanges – Certificate of reconciliation of Capital as per SEBI Circular dated Dec. 31, 2002 – Conduct of Internal Audit of Operations of Depository Participants 4 – Certification under Clause 49 of Listing Agreement

Peer Review is directed at the attestation services of a practice unit – SCOPE OF PEER REVIEW (a) Once a practice unit is selected for review, its attestation engagement records pertaining to the immediately preceding financial year shall be subjected to review. (b) Records of attestation services relating to five years prior to the financial year shall not be subjected to review. (c) Review shall focus on – - Compliance with Technical Standards (i. e. Guidance Notes, Secretarial Standards issued by ICSI) - Quality of Reporting - Office systems and procedures with regard to compliance of attestation services systems and procedures 5 - Training programmes for staff concerned

Who would be the reviewer? A member of the Institute who – (a) possesses at least 10 years of post membership experience (could be as an employee or as PCS or as a combination of the two) (b) is currently in practice as a Company Secretary 6

n – Study of information given by PU in the format and based on the same make own observations about possible areas where improvement is possible and note other aspects to be discussed in personal meeting with PU Methodology to be followed by Reviewer Offsite Review n Onsite Review – Verification of information given by PU. Test checks in respect of attestation assignments handled by PU – Interaction with the staff & trainees of PU should be part of PR – Calling for the records of the client maintained by PU to verify whether proper 7 systems and procedures have been

Obligations of the Practice Unit shall - n provide access to any record or document as may be asked for by the reviewer. n afford and provide explanation or further particulars in respect of anything produced before the Peer Reviewer n provide all assistance in connection with peer review n allow the reviewer to inspect, examine or take any abstract of or extract from a record or document 8 or copy there from which may be

n Cost of Peer Review for reviewer Cost of Peer Review and his qualified assistant(s) as may be decided by the Board from time to time, shall be borne by the Practice Unit. n At present the cost of Peer Review is Rs. 10, 000/- (all inclusive) n Same rate shall apply to second review also. 9 n Each branch / office under review

Prescribed rates of Fee for Peer Review Rs. 10, 000/- to be paid directly to the Peer Reviewer (inclusive of TA/DA and any out of pocket expenses) as may be prescribed by the Peer Review Board from time to time. 10

n Three stage process – – Planning • Intimation • Return of completed Questionnaire Review Framework – Execution • Sample of Attestation service engagements • Confirmation of Visit – Initial meeting – Compliance Review – General Controls – Selection of Attestation services engagements to be reviewed – Review of record – Reporting • Preliminary Report of Reviewer • Interim Report of Reviewer • Final Report of Reviewer 11

FAQs on Peer Review What is Peer Review? Ans. Peer Review is a process used for examining the work performed by one’s equals (peers) and to understand the systems, practices and procedures followed by the Practice Unit and to give suggestions, if any, for further improvement. 12

FAQs on Peer Review When will Peer Review start ? Ans. The Peer Review Board has initiated the process of Peer Review from December 2011. 13

FAQs on Peer Review To whom all would Peer Review be applicable? Ans. Peer Review is applicable to all Practicing Company Secretaries. 14

FAQs on Peer Review What is the meaning of Practice Unit? Ans. Practice Unit means members in practice, whether practicing individually or a firm of Company Secretaries. 15

FAQs on Peer Review Whether the concept of Peer Review exists for CWA's and CA's? Ans. The Institute of Chartered Accountants of India has a mechanism of Peer Review of their Members in Practice. 16

FAQs on Peer Review What are the advantages of the Peer Review to the Practice Unit (PU) ? Ans. It is expected to A) enhance the quality of attestation services. B) enhance credibility and provide competitive advantage. C) provide a forum for Guidance and knowledge sharing. 17

FAQs on Peer Review What is the frequency of Peer Review? Ans. Initially, each Practice Unit would be required to be peer reviewed at least once in every five years. 18

FAQs on Peer Review How will I be selected for Peer Review? Ans. You may apply to be peer reviewed or it may be done through random selection by the Peer Review Board. 19

FAQs on Peer Review If I have been Peer Reviewed can I disclose this on my website? Ans. Only the fact of being Peer Reviewed can be stated. However, neither the Certificate nor the Peer Review Report may be given on the website. 20

FAQs on Peer Review Can I become a Peer Reviewer? Ans. Any member of the Institute who fulfills the following criterion may apply to be empanelled as a Peer Reviewer(a) possesses at least 10 years of post membership experience (b) is currently in practice as a Company Secretary. 21

FAQs on Peer Review Will the information disclosed by me be kept confidential by the reviewer? Ans. The Peer Reviewer is bound by a Confidentiality Agreement with the Peer Review Board. If the Reviewer misuses the information disclosed by you he may be subject to disciplinary action by the Institute. 22

FAQs on Peer Review If I am Peer Reviewed and it is found that I have not maintained adequate records will I be liable for any disciplinary action? Ans. No. 23

FAQs on Peer Review Is the Peer Reviewer exposed to any liability? Ans. 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. 24

FAQs on Peer Review After the Peer review of my records do I get any protection from disciplinary proceedings under the Code of Conduct? Ans. No. Peer Review is only a broad examination of the systems and procedures followed by the Practice Unit. The fact that you have been Peer Reviewed does not provide immunity from Disciplinary Action. However, neither Institute nor the Reviewer can file any complaint in respect of deficiencies observed during the course of Peer Review. (Refer Cl. 18 of the Guidelines for details) 25

FAQs on Peer Review What do I do if I am not satisfied with the Report of the Peer Reviewer? Ans. You may refer your case to the Peer Review Board. 26

FAQs on Peer Review If I am selected for Peer Review is it mandatory for me to offer myself for Peer Review? Ans. Yes 27

FAQs on Peer Review Do I need to disclose the records of my clients to the reviewers? Ans. No 28

FAQs on Peer Review A) Can any of my clients ask the Institute to get me peer reviewed? Ans. Yes Who will pay the cost of such Peer Review? Ans. The client shall pay the cost of such Peer Review. 29

FAQs on Peer Review Will ICSI be issuing any Certificate after Peer review? Ans. Yes. 30

FAQs on Peer Review Will ICSI put up the names of the PU which have undergone PR on ICSI website? Ans. Yes 31

FAQs on Peer Review What are my obligations as a Practice Unit? Ans. Refer Cl. 12 of the Guidelines 32

FAQs on Peer Review Can I volunteer to get Peer Reviewed? Ans. Yes 33

FAQs on Peer Review I have been Peer Reviewed once, will I be Peer Reviewed again? Ans. Yes, if the Peer Review Board so decides. 34

FAQs on Peer Review Can I choose my Peer Reviewer? Ans. The Peer Review Board would send you a panel of atleast three reviewers and you may choose any one name out of the panel sent to you. 35

FAQs on Peer Review Can I reject all the reviewers mentioned in the panel and ask for another reviewer from the same State or region? Ans. No. 36

FAQs on Peer Review If I want a Peer Reviewer from out side my State or region what should I do? Ans. You may make a special request to the Peer Review Board to provide names of such Peer Reviewers. However, in such a case you would have to bear the extra cost that would be incurred for TA / DA etc. 37

FAQs on Peer Review If I am not satisfied with the order of the Peer Review Board can I appeal to the Council? Ans. Yes. You may appeal against the Order of the Peer Review Board to the Central Council of the Institute. (Refer cl. 17. 3 of the Guidelines) 38

FAQs on Peer Review Can I refuse to get myself Peer Reviewed? Ans. No. Any refusal to get Peer Reviewed shall be a misconduct under the Code of Conduct. 39

THANK YOU! 40