Presentation to Reliance Group ADAE By Haribhakti Group

1
Deviations between Clause 49 Proposed
Amendments to Companies Act
Mr.Shailesh Haribhakti Managing Partner CEO
Haribhakti Group
2
Clause 49

• Securities and Exchange Board of India (SEBI) has
  revised clause 49 of the listing agreement to
  improve the standard of Corporate Governance in
  India. These changes primarily strengthened the
  requirements in the following areas

Board Composition
Clause 49
CEO/CFO certification
Audit Committee
Subsidiary Company
Risk Management
3
Proposed Companies Bill
A great need has been felt to amend the existing
Company Law to

• To bring the Corporate Law in consonance with the
  changes that have occurred in the economic
  development
• To delete the redundant provisions and to regroup
  the scattered provisions relating to specific
  subjects
• To condense, simplify and rationalize the
  provisions of Company Law

4
Key Deviations Definition of Independent
Directors
5
Key Deviations Number of Directors on Board
6
Key Deviations Audit Committee
7
Internal Controls Risk Management
8
Internal Controls

• It is a process designed to provide reasonable
  assurance that an organization is achieving its
  objectives by helping to
• Protect its asset and shareholders investments
• Ensure it is not overly exposed to risk
• Improve the reliability of internal and external
  reporting
• Promote compliance with applicable laws and
  regulation
• Improve effectiveness and efficiency of
  operations

9
Types of Internal Controls

• Financial Reporting
• control over preparation of reliable
  financial statements and other financial
  information
• Operational
• addresses a company's basic business objectives
  including safeguarding of resources and adherence
  to performance standards
• Compliance
• cover laws and regulations to which a company is
  subject in order to avoid damage to company's
  image.

10
Corporate Governance Risk Management

• It is the responsibility of the top management to
  ensure that an effective risk management program
  is in place this includes
• Defining organizations risk appetite in terms of
  loss tolerance, risk-to-capital leverage and
  target debt rating.
• Establishing an organisation structure defining
  roles and responsibilities for risk management.

11
Contd.

• Implementing an integrated risk measurement and
  management framework for credit, market and
  operational risk.
• Establishing an organisation structure defining
  roles and responsibilities for risk management.
• Establishing a risk assessment and audit
  processes as well as benchmarking company
  practices to industry best practices

12
CEO/CFO Certification

• CEO and the CFO of the company have to certify
  that
• The annual report does not contain any materially
  untrue statement or omit any material fact or
  contain any statements that might be misleading.
• The annual accounts present true and fair view of
  the company and are in compliance with the
  existing accounting standard and /or applicable
  laws/regulation.
• Evaluated the internal control and have evaluated
  the effectiveness of control systems, disclosed
  to the auditors and Audit Committee, deficiencies
  in the design or operation of internal controls
  if any.

13
Thank You
The Question is Not Whether to Outsource But What
to Outsource
Contact
Mr. Shailesh Haribhakti Managing Partner
CEO Haribhakti Group svh_at_haribhaktigroup.com
Tel [phone] Fax [phone]
6249 E-mail crg_at_haribhaktigroup.com
Address 42-43, Free Press House 215, Nariman
Point, Mumbai 400 021 URL http//www.haribhakti
group.com