Thursday, July 13, 2017

FINANCIAL INFORMATION TRANSPARENCY

FINANCIAL INFORMATION AND TRANSPARENCY RELATED DISCLOSURE FOR GOOD CORPORATE GOVERNANCE
1)        Financial Calendar
2)        Listing of Shares in Stock Exchange
3)        Details of Shareholders/ Shares
4)        International Listing
5)        Stock Market Data (Share Price Volatility)
6)        Share Transfer Process
7)        Dividend Payment
8)        Special Resolution by Postal Ballot
1)     Financial Calendar:
In all the companies disclosure of financial calendar include following data:
•Financial Calendar •Date, Time and Venue of Last Annual General Meeting •Book Closure Date •Dividend Payment Date •Date of Posting of Annual Report •Last Date of Receipt of Proxy forms •Approval Date of Quarterly Results •Stock Code •Special Resolution of Postal Ballot •Reporting on Conciliation of Account GAAP •Board Meeting Date •Probable Date of Dispatch of Warrants for Dividend
2)     Listing of Shares in Stock Exchange:
Listing means admission of securities to dealings on a recognized stock exchange. The securities may be of any public limited company, Central or State Government, quasi-governmental and other financial institutions/corporations, municipalities, etc.
The objectives of listing are mainly to:
•          Provide liquidity to securities;
•          Mobilize savings for economic development;
•          Protect interest of investors by ensuring full disclosures.
3)     Details of Shareholders/ Shares:
Following details of shareholders/shares are disclosed in sampled companies include:
•                   Name of Investors/Shareholders
•                   Number of shares and number of Shareholders
•                   Percentage of total shares and total Shareholders
•                   Percentage of Share Capital
•                   Amount of Shareholding
•                   Shareholding of Nominal Value
•                   Number of Shares held in demat form
4)     International Listing:
GDR (Global Depositary Receipt):
A global depositary receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through the various bank branches.
A financial instrument used by private markets to raise capital denominated in either U.S. dollars or Euros.
ADR (American Depositary Receipt):
An American depositary receipt (ADR) is a negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. This is an excellent way to buy shares in a foreign company while realizing any dividends and capital gains in U.S. dollars. However, ADRs do not eliminate the currency and economic risks for the underlying shares in another country. For example, dividend payments in Euros would be converted to U.S. dollars, net of conversion expenses and foreign taxes and in accordance with the deposit agreement. ADRs are listed on the NYSE, AMEX or Nasdaq as well as OTC.
5)     Stock Market Data (Share Price Volatility):
Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security. Stock price volatility is an indicator that is most often used by options traders to find changes in trends in the market place. There are two main types of stock volatility including Historical Volatility and Implied Volatility that are used in the options markets. The increase or decrease in volatility results from changes in investors emotions in the market place. More specifically greed and fear in the market place are the two main factors that cause stock prices to change. Stock price volatility tends to rise when there is new information released in the markets however the extent to which it rises is determined by the relevance of that new information as well as to the degree in which the news surprises investors.
6)     Share Transfer Process:
The shares of a company are movable property and are generally freely transferable. Though there might be certain restrictions on transfer of shares of private companies provided in the articles of the company, such restrictions are generally added to protect the rights of one set of investors or the shareholders. However, shares of a public company are always freely transferable. Here, researcher has taken 3 aspects of share transfer process which are normally disclosed in sampled companies.
•          Shares in physical form
•          Share transfer is allotted agent
•          Time period for share transfer process
Power of refusal to register transfer of shares is to be exercised by the company within thirty (30) days from the date on which the instrument of transfer or the intimation of transfer, as the case may be is delivered to the Company.
7)     Dividend Payment:
The term ‘dividend’ has been defined under Section 2(35) of the Companies Act, 2013. The term “Dividend” includes any interim dividend. It is an inclusive and not an exhaustive definition. According to the generally accepted definition, “dividend” means the profit of a company, which is not retained in the business and is distributed among the shareholders in proportion to the amount paid-up on the shares held by them.
8)     Special Resolution by Postal Ballot:
Applicable for E-Voting:
•                   Every listed company or
•                   A company having not less than one thousand shareholders shall provide to its members facility to exercise their right to vote at general meetings by electronic means.
•                   E-Voting Period:
•                   The e-voting shall remain open for not less than one day and not more than three days.
•                   In all such cases, such voting period shall be completed three days prior to the date of the general meeting.
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Wednesday, July 12, 2017

THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

The Real Estate (Regulation and Development) Act, 2016 which seeks to protect home-buyers as well as help boost investments in the real estate industry.
Coverage of this act:-
Ø The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution

Ø For on-going projects which have not received completion certificate on the date of commencement of the Act, will have to seek registration within 3 months. Application for registration must be either approved or rejected within a period of 30 days from the date of application by the RERA. On successful registration, the promoter of the project will be provided with a registration number, a login id and password for the applicants to fill up essential details on the website of the RERA. For failure to register, a penalty of up to 10 percent of the project cost or three years' imprisonment may be imposed.
PROTECTION OF BUYERS

Ø The Act prohibits unaccounted money from being pumped into the sector and as of now 70 per cent of the money has to be deposited in bank accounts through cheques.
Real Estate Regulatory Authority and Appellate Tribunal
It will help to establish state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover. Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill.

Certain areas to be exempted from the RERA

Ø The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution. Where the area of land does not exceed to 500 square meters or the no. of apartments does exceed to be developed.
Ø Provided that: If the appropriate government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be.
Ø Promoter has received the completion certificate for real estate project prior to commencement act.
REAL ESTATE REGULATORY AUTHORITY
Ø  Authority is established and incorporated under section 20. According to section u/s 35 Authority has power to take sue motto complaints and inquire against information and conduct the enquiry or invest on that matter. Authority can take cognizance on the sue motto if they necessary to so.
Ø According to section 36 interim order cabs are passed by the authority. 
Ø  Authority can be issue direction u/s 37.
Ø Authority has power u/s 38 to impose the penalty or interest.
Ø Authority has power to rectify its order any time within a period of 2years from the date of order made u/s 39.
If somebody does not agree to the direction or order of Authority then that person can file an appeal under REAL ESTATE APPELATE TRIBUNAL.

REAL ESTATE APPELATE TRIBUNAL

Ø REAL ESTATE APPELATE TRIBUNAL is established under section 43. As per s.43 (5) appeal of promoter would be entertained only on depositing at least 30% of the penalty on higher percentage determined by the appellate tribunal.
Ø As per section 44(5) appellate authority should be endeavor to dispose off the appeal within a period of 60days from the date of receipt.
Ø As per section 58 appeals can be filled against Appellate Tribunal within 60 days of communication of the order of the Appellate tribunal. In case of delay adequate reasoning is required.

OFFENSES AND PENALITIES

Ø As per section 59(1) punishment for non registeration u/s 3 for promoter would be penalty which may extend up to 10% of the estimated cost of the Real Estate Project as determined by the Authority.
Ø As per s.59(2) if the order passed u/s 59(1) is not complicated then promoter shall be punishable with imprisonment for a term which may extended up to 3yrs or with fine which extend to further 10% of the estimated cost of the project.
Ø As per s.60 the penalty for contravention of s4. of promoter would be penalty which may extend up to 5% the estimated cost of the Real Estate Project as determined by the Authority.
Ø As per the s.61 penalty for the contravention of provision of this act and rules other than s.3 and s.4 for the promoter shall be a penalty which may extend to 5% of the estimated cost of the real estate project as determined by the authority
Ø As per s.62 non registration and contravention u/s 9 and 10 done by Real estate agent, in such case he shall be liable to a penalty of rs10000 for everyday during such default continues, which may cumulatively extend up to 5%of the cost of the plot, apppartment or building, as the case may be, of the Real estate project, for which the sale or purchase has been facilitated as determined by the authority.
Ø As per s.63 penalty for failure to comply with the order of Authority would be penalty for everyday during which such default continues, which may cumulatively extend up to 5% of the real estate project as determined by the authority
Ø As per s.64 punishment for contravention of order of Appellate Tribunal by promoter shall be imprisonment for term which may extend up to 3yrs or fine for everyday during which such default continues, which may cumulatively extend up to 10% of the estimated cost of the real estate project or with both.
Ø As per s.65 penalty for failure to comply with order of the Authority by the real estate agent shall be a penalty for everyday during which default continues, which may cumulatively extend up to 5% of the estimated cost of plot, apartment or building or the case may be.
Ø As per s.68 punishment for the failure to comply with order of Authority by allottee shall be imprisonment for a term which may extend up to one year or with fine for everyday during which default continues, which may cumulatively extend up to 10% of the plot or with both
Ø As per the compounding of offences can be done either before or after institution of prosecution before court and any payments of sum shall not in any case, exceeded the maximum amount of the fine which may be imposed for the offense so compounded.
Ø As per section s.80 cognizance of offence can be taken by court on a complaint in writing made by the authority or by any officer of the authority duly authorized by it for this purpose.

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Legal Framework for Corporate Social Responsibility

With the introduction of companies’ act 2013, India has become first country to mandate CSR. The fact that CSR initiatives are taken voluntarily, has been ignored and the act has provided for compulsory spending on CSR.
As per section 135 of the new act, Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a CSR committee of the board consisting of three or more directors (at least one shall be independent director). The committee shall
1.        Formulate and recommend to the board a CSR policy
2.        Recommend the amount of expenditure, and
3.        Monitor the CSR policy.
The Companies Act 2013 encourages companies to spend at least 2% of their average net profit in the previous three years on CSR activities. The ministry’s draft rules, that have been put up for public comment, define net profit as the profit before tax as per the books of accounts, excluding profits arising from branches outside India
Applicability: Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.
•The Board's report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee.
The Corporate Social Responsibility Committee shall,—
•Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII;
•Recommend the amount of expenditure to be incurred on the activities referred to in clause (a)
•Monitor the Corporate Social Responsibility Policy of the company from time to time.

SOCIAL RESPONSIBILITY AND RELATED DISCLOSURE:
1)        Means of Communication
2)        Various Social Responsibilities fulfilled by Company
3)        Customer care Grievance
4)        Financial Risk Management
5)        Business Environmental Responsibility
Economic growth is possible only through consumption of inputs available in the environment and society. The harnessing of natural resources has a direct impact on the economy, the environment and society at large. Corporate Social Responsibility (CSR) is a concept whereby organizations serve the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations. Corporate social responsibility is not about just giving randomly but about bringing benefits to all the stakeholders, including customers, employees and community at large.
•Respect for Worker’s Right and Welfare: The companies should provide the workplace environment that is safe, hygienic and humane to work. They should be taken care of the heath issues arising out of the work of the organization. It should conduct the training and development program within the organization for the people of the organization.
•Woman Empowerment: Empowering women and achieving gender equality – the goals of the Women’s Empowerment Principles - requires intentional actions and deliberate policies. The WEPs are based on concrete business practices and have inspired companies around the world to tailor existing policies and programmes – or establish needed new ones – to realize women’s empowerment.

 Corporate Social Responsibility Dimensions
•Sport Promotion: These include CSR initiatives and investments in the sector by leading corporate houses, and non-profit foundations. These foundations are chiefly involved in providing opportunities to children from the under-privileged sections to take up sports, supporting promising sportspersons in accessing world class training facilities and developing sporting infrastructure.
 •Employment Generated: Jobs continue to be created, needing an educated workforce and many in sunrise sub-sectors. We need to recognize new opportunities and prepare the supply side.
•Educational Employee Training: Employee training and development is a broad term covering multiple kinds of employee learning. Training is a program that helps employees learn specific knowledge or skills to improve performance in their current roles.
•Employee Grievance: refers to the dissatisfaction of an employee with what he expects from the company and its management. A company has to provide an employee with a safe working        environment, realistic job preview, adequate compensation, respect etc.                       
•Benefits of Employee Welfare: They provide better physical and mental health to workers and thus promote a healthy work environment. Facilities like housing schemes, medical benefits, and education and recreation facilities for worker's families help in raising their standards of living. This makes workers to pay more attention towards work and thus increases their productivity. Employers get stable labor force by providing welfare facilities. Workers take active interest in their jobs and work with a feeling of involvement and participation.
•Increased Sales and Customer Loyalty: The customers also recognize those companies which are socially responsible. This results in increased sales and content customers.
•Complaint Received During the year: A customer complaint highlights problems with employees or internal processes and you can fix them before further problems arise and cause a bad customer experience. One of the advantages of CRM is that you can keep a record of customer feedback, both positive and negative.
•Complaint Resolved: The complaint is closed as Resolved because the provider has met the member's request for resolution to the complaint (as outlined on the Complaint Resolution Process complaint form).
•Complaint Pending: The complaint is currently in process. No final outcome has been determined.
•Investor Education and Protection Fund (IEPF): is for promotion of investors’ awareness and protection of the interests of investors. This website is an information providing platform to promote awareness, and it does not offer any investment advice or evaluation.
•Financial Risk Management             
Financial Risk Management is           the practice of economic value in a firm by using financial instruments to manage  exposure  to risk, particularly credit risk and market risk. Other types include Foreign exchange risk, Shape risk, Volatility risk, Sector risk, Liquidity risk, Inflation risk, etc. Similar to general risk management, financial risk management requires identifying its sources, measuring it, and plans to address them. Profit Risk is a risk management tool that focuses on understanding concentrations within the income statement and assessing the risk associated with those concentrations from a net income perspective.
•Legal Risk Management
Legal Risk Management refers to the process of evaluating alternative regulatory and non-regulatory responses to risk and selecting among them. Even with the legal realm, this process requires knowledge of the legal, economic and social factors, as well as knowledge of the business world in which legal teams operate. In an organizational setting, risk management refers to the process, by which an organization sets the risk tolerance, identifies potential risks and prioritizes the tolerance for risk based on the organization’s business objectives, and manages and mitigates risks throughout the organization.
•Risk Management
Risk Management and Internal Control help organizations understand the risks they are exposed to, put controls in place to counter threats, and effectively pursue their objectives. They are therefore an important aspect of an organization’s governance, management, and operations. Professional accountants can and should play a leading role in helping their organizations achieve an integrated, organization-wide approach to risk management and internal control—which ultimately helps create, enhance, and protect stakeholder value.
Business Environmental Responsibility
The companies are required to utilize the Planet i.e., Natural Capital in a well manner so that it cannot be wasted, excess utilized which is also required for the other states or countries and also requires to be preserve for the future generation.
Environmental management system that offers a framework that companies and organizations can follow in order to set up an effective environmental management program. Its certificate means that the company or organization is measuring and reducing its environmental impacts. Sustainability Report is used by companies to communicate their economic, environmental and social activities to depict transparency and compliance to rules and regulations.
•Audit of Environment: There are three main types of audits which are environmental compliance audits, environmental management audits to verify whether an organization meets its stated objectives, and, functional environmental audits such as for water and electricity.
•Pollution Control: Pollution prevention is a major global concern because of the harmful effects of pollution on a person’s health and on the environment. Environmental pollution comes in various forms, such as: air pollution, water pollution, soil pollution, etc.
•Project Location and Development: Project management is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria.
•Forest and Plantation of Tress: Industrial plantations are actively managed for the commercial production of forest products. Industrial plantations are usually large-scale. Individual blocks are usually even-aged and often consist of just one or two species. These species can be exotic or indigenous. The plants used for the plantation are often genetically altered for desired traits such as growth and resistance to pests and diseases in general and specific traits.
•Plants having Child Labour: The social scenario, however, changed radically with the advent of industrialization and urbanization under the impact of the newly generated centrifugal and centripetal forces; there was an unbroken stream of the rural poor migrating to urban center in search of livelihood. The child had to work as an individual person either under an employer or independently. His work environment endangered his physical health and mental growth and led to his exploitation. The protection and welfare of these children, therefore, become an issue of paramount social significance.

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Tuesday, July 11, 2017

ETHICAL ISSUES IN CORPORATE GOVERNANCE

Corporate fraud is defined as “one that occurs within an organization or by its owners or managers and involves deliberate dishonesty to deceive the public, investors or lending companies, usually resulting in a financial gain to the individuals or organization.” Most of the corporate frauds fall under the categories of asset misappropriation, money laundering, accounting frauds, frauds committed by senior management, bribery and corruption and regulatory non-compliance. It is practices such as these that are denting the image of our financial system. The organizations, therefore, must be attentive to these challenges and adopt pro-active anti-fraud measures rather than being reactive. Otherwise, organizations and entire societies have to bear the risk of fraud and its consequences, which will become more devastating.
Keys to solving ethical issue
1.        Sound Risk Management Framework
2.        Data Management and analysis
3.        Code of Conduct for Board of Directors
4.        Internal & External control system
5.        Forensic Accounting
6.        Independent auditor’s role
7.        Role of top management
8.        Whistle blowing policy
A. Sound Risk Management Framework
With the occurrence of such major financial crisis globally a lot of emphasis is laid on strengthening risk management practices for both financial and non-financial institutions. However, with respect to the financial institutions, it is evident that much attention is being paid to financial risk such as market risk, credit and liquidity, despite the focus being on managing operational risk. Accordingly, major reports have been published by many organizations, such as the Basel Committee, Institute of International Finance and others that highlight the need for effective risk management in financial institutions (OECD report, 2014).
B. Data Management and Analysis
An organization’s ability to generate revenue, manage the expenses and extenuate risks is determined by its ability to successfully share, store, retain and retrieve the escalating data. Effective data management practices can bring in large customer base, improve customer relationships which in turn help in generating revenue. According to American Institute of Certified Public Accountant (AICPA) report 2013, accountants play an important role in governing the organization’s data and ensure that it is in accordance with the CG practices of the organization. Since any financial institutions’ operation is based entirely on its customer base, governing the ever-increasing customer data becomes an important part of its CG practices.
C. Strict code of Conduct for Board Of Directors
Although people have always questioned the need for having corporate boards, it is empirically proven that their presence matters a lot at the time of organizational crisis. This can be verified as in the case of Enron, Worldcom and Parmalat scandals where the directors in particular were held liable for the fraud. Consequently, more attention is being paid to research on the role of corporate boards. Uzun, Szewczyk and Verma (2004) have demonstrated that the composition of the board and the structure of the supervisory committee were significantly related to occurrence of corporate frauds. In contrast, the study also found that the larger the number of independent outside directors, lesser was the possibility of occurrence of corporate frauds in U.S during the period 1978-200. Nevertheless, not many papers are available on the composition and effectiveness of corporate boards in the financial sector, which motivated this study to investigate the relationship between CG and fraud.
D. Internal and External Control Systems
Internal control system refers to the approved policies and procedures followed by the management in order to carry out smooth and proper functioning of business thereby avoiding various types of risks such as improper maintenance of accounts, unauthorized transactions and frauds which may affect the organization’s financial performance.
On the other hand external control system refers to the government regulations, market competition, media exposure, takeover activities, public release and assessment of financial statements. In spite of the fact that the company’s governance process also comprises of government regulations the role of external control systems in the financial sector is still a mystery.
E. Forensic Accounting
Forensic accounting is a special field related to accountancy profession where the accountants implement their accounting, auditing and investigative skills to detect frauds, bankruptcy and other litigations. The role of forensic accountants in investigating corporate frauds has long been identified by many countries and they now play a major role in probing corporate frauds. However the field is still in its nascent stage in India due to rapid increase in “white collar crimes” and the notion that the law enforcement agencies do not have sufficient time or expertise to expose the frauds committed. Therefore the researcher anticipates studying the role of forensic auditors and auditing process which may determine the quality of CG practices in the banking sector.
F. Independent auditor’s role
The purpose of designing a set of codes for CG is to enhance the efficiency of auditing process in order to retain the interests of all the stakeholders and investors. This is where the role of independent auditor comes into picture. The auditor has all the authority to capture the offender, eliminate bias from financial reports of the company and report objectively. Recently a lot of emphasis is placed on the role of auditor with respect to CG as auditors’ are solely responsible in detecting the scam. On the contrary, the auditor’s must not be forced into any kind of obligation which may bind his hands from discharging his duties veritably.
G. Role of top management
According to the Basel Committee report on banking supervision published in the year 2014 (Bank for International Settlements, 2014), it is the responsibility of the senior managers to carry out and manage all the activities of the banks in accordance with the business strategy, risk policies and other strategies as approved by the board. The top management’s personal conduct also contributes significantly in achieving “sound CG” along with the members of the board.
H. Whistle blowing policy
Whistle blowing policy in a company refers to the particular internal policy designed for its employees to report to the management about any suspicious behavior or frauds or any kind of infringement in company’s norms or code of conduct. The policy enables an employee to report to the senior managers or top management directly without informing his immediate manager(s). Because of this advantage, whistle blowing policy is considered to be a valuable tool in an organizations effective CG strategy.
The issues of corporate governance
1.        Asset Misappropriation
2.        Money laundering
3.        Accounting frauds
4.        Frauds committed by senior management
5.        Bribery and corruption
6.        Regulatory non-compliance
7.        Practice of Insider Trading and Selective leak of sensitive data
A. Asset Misappropriation
Asset misappropriation refers to the misuse of a company’s assets or resources for an individual’s personal use at the expense of the company. Sometimes it may even involve stealing of the company’s assets for personal interests and producing false records to mask the committed fault. Studies have shown that though asset misappropriation might not be visibly significant, disregarding the same may become “an incurable disease” and consequently affect the financial status due to unnecessary expenditure incurred.
B. Money laundering
Money laundering is gaining illegal money from criminal activities and projecting it to be a source from legal proceedings by concealing its actual source of inflow, ownership and use of funds.
C. Accounting frauds
Accounting frauds refer to deliberate falsification introduced in the financial statement to gain unlawful financial advantage by employees, management or any other individuals related to the organization. On the other hand, accounting irregularities arise due to inadvertent misrepresentation of facts or omission of certain entries in the financial statements. Both these mistakes lead to economic problems which ultimately find its root cause in fruitless CG mechanism and its inability to detect and prevent such faults. For instance the financial irregularities that happened with Enron, WorldCom and Satyam, all point towards a lack of proper CG at some point for the tragedy occurred.
D. Frauds committed by senior management
Also known as “white collar crime”, frauds committed by the members of the top management directly impacts the shareholders, employees and society as a whole. Frauds committed may not always be in terms of capital. It may also include the involvement of top managers in certain activities that are against the rules and regulations of the company or refrain themselves from taking necessary action after being aware of any illegal activity happening in the organization or certain disastrous decisions taken by the managers.
E. Bribery and corruption
Studies have demonstrated that poor CG practices can breed corruption. Corruption pertains to “the misuse of public office for private gains and has both demand and supply sides to it”. CG practices can be affected by bribery and corruption practices of the members involved at various levels including the board members, to managers, employees, shareholders and stakeholders. Good CG is expected to reduce the level of corruption by imposing strict constraints on the officials.
F. Regulatory non-compliance
For any organization it is mandatory to comply with the legal framework prescribed by the respective boards apart from the internal rules and regulations of the company. In India the Securities and Exchange Board of India imposes the rules and regulations and frames the guiding the guiding principles for companies to protect the interests of the investors. Apart from this, companies are also required to comply with the provisions of Companies Act 1956, Kumara Mangalam Birla report on CG, accounting standards issued by ICAI and additional listing agreements with the stock exchange they are listed with.
G. Practice of Insider trading and Selective leak of sensitive data
Insider trading indicates the practice of buying and selling company’s securities illegally without the knowledge of the public with the intention of making profit or preventing loss in the securities transactions of the company. In India it is considered as illegal trading by SEBI. In this case, the management of the company may take advantage of the confidential and price-sensitive data to make profit for themselves without informing the public investors.

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Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.
Contact at parascs@gmail.com or refer website www.pnjlegal.com