“Better Governance Better Value”factumlegal.com/images/CCM_2014.pdf · Compliance with Central Laws Central Taxation Laws e.g., Income Tax Act, 1961 Central Labour and Employment

“Better Governance Better Value”

Corporate Compliance Management is essential

to facilitate timely compliance with legal as well

as self regulations.

It enable uniformity, predictability and credibility

of corporate operations and disclosures.

It is essential to streamline all the aspects of

compliance through a comprehensive compliance

management system which is clear, unambiguous

and efficient.

Value Creation Advantage

Self Regulation/Investor Requirements

Directors’ and Officers’ Liability

Regulatory Requirements

› Clause 49 of Listing Agreement

› Provision in Companies Act 2013

Director Responsibility Statement

Secretarial Audit

Goodwill

Increased Company Valuation

Brand Value

Consumer/Client Loyalty

Better & Competitive Financing

Market Access

Regulatory Relief

Growth Growing

Revenues

Growing

Profits

Growing

Market Value

Corporate Governance Policy

Self-Imposed Standards of Operations

Internal Safety and Environment Policies

Internal Accounting and Disclosure Standards

Investor and Stakeholder Protection Policies

Criminal Liability under various laws including

Labour laws

Personal liability under Contract Law, Taxation

Laws and Other Laws

Liability under Companies Law

› Disqualification of Directors

Clause 49 of Listing Agreement: “ The Board shall periodically review compliance reports of all laws

applicable to the company, prepared by the company as well as steps taken

by the company to rectify instances of non-compliances.”

Clause 134 of Companies Bill 2012 “ The Director’s responsibility statement referred to in clause © of subsection

(3 ) shall state that:

the directors had devised proper system to ensure compliance with the

provisions of all applicable laws and that such system were adequate and

operating effectively.”

General application of compliances

Industry / Segment specific compliances

Geography based compliances

Employee/Worker specific compliances

Transaction related compliances

Company Law

Securities Laws

Taxation Laws

Environment Laws

Foreign Exchange

Laws

Industrial & Labour Laws

Media And

Entertainment

Infrastructure,

Power And Telecom

IT Solutions

IT Enabled

Services And BPO

Textiles

Tourism And Hotel Capital Market And

Its Intermediaries

Engineering and

Construction FMCG

Agriculture And

Food Processing

Capital Goods

Drugs, Pharma

And Healthcare

Banking And NBFC

Financial Services

As for instance:

A Company engaged in the business of Automotive

Component Manufacturing is required to comply

additionally with

The Central Motor Vehicles Rules, 1989

› Special Emission Norms

› Safety Norms

Compliance with Central Laws

Central Taxation Laws e.g., Income Tax Act, 1961

Central Labour and Employment Laws

Environment Laws e.g., The Environment Protection Act, 1986

Foreign Exchange Laws

Compliance with State Laws

State Taxation Laws e.g., VAT

State Labour and Employment Laws

State Industrial Licensing and Regulations

Special Economic Zone (SEZ) regulations

Factories Act, 1948

Payment of Wages Act, 1936

Contract Labour (regulation & abolition) act,

1970

The Industrial Dispute Act, 1947

Shops & Establishment Laws

Other Laws

Foreign Exchange: FEMA

Import Export: FEM (Exports of goods &

services) Regulations, 1999

Related Party Transactions: Transfer Pricing

Internet/Online Transactions: Cyber Laws, Data

Privacy Regulations

Other Laws

Loss of Investors Confidence

Difficulty in raising of further capital

Investor Complaints

Loss of reputation in National & International

Markets

Loss of Human Capital

Other

Outstanding Performance,

Higher Profits,

Expanded Market Reach and the like

FAIL

to Protect a Company

that has put Good Governance & Ethics

at the Back Burner….

..…Only the Culture of

Strict Adherence to Good Compliance

can Keep a Company

Ahead on Sustainable Basis, and Bring in

Larger Profits…

Understanding the Company and Business

Identification of Applicable Laws

Assessment of Laws

Setting of Compliance Organization Structure

The Four Step Process

Evolution of Corporate Compliance Management

Tools

› Contribution of Information Technology (IT)

Maximizing Efficiency

Minimizing Lapses

› Reminders

External Tools v/s In-House Tools

Good Corporate Governance

Reduces Risk

Higher Profits

Higher Valuation

Thank you

Thanks

Arun Gupta managing counsel

factum legal , advocates & solicitors

Tel : (O) 011-41066313 (M) 9810275571

www.factumlegal.com; [email protected]