E-Book

Corporate Governance in India

The Institute of Chartered Accountants of India

(Set up by an Act of Parliament)
Southern India Regional Council
Chennai
 E-Book

The Institute of Chartered Accountants of India

(Set up by an Act of Parliament)
Southern India Regional Council
 Chennai

E-Book

Corporate Governance in India

This e-book has been authored

by
CA. M K Sridhar

The Institute of Chartered Accountants of India

(Set up by an Act of Parliament)
Southern India Regional Council
Chennai
Copyright © with SIRC of ICAI

All rights served. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form, or means, electronic, mechanical, photocopying, recording or
otherwise without prior permission in writing, from the publisher.

DISCLAIMER:

The views expressed in this e-book are of the author(s). The Institute of Chartered
Accountants of India (ICAI) and/or Southern India Regional Council of ICAI may not
necessarily subscribe to the views expressed by the author(s).

The information cited in this e-book has been drawn primarily by the contributor.
While every effort has been made to keep the information cited in this e-book error
free, the Institute or any office of the same does not take the responsibility for any
typographical or clerical error which may have crept in while compiling the
information provided in this e-book.

First Edition : December 2021

E-mail : sirc@icai.in

Published by : Southern India Regional Council

The Institute of Chartered Accountants of India
ICAI Bhawan
122, Mahatma Gandhi Road
Post Box No. 3314, Nungambakkam, Chennai - 600 034
 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
Southern India Regional Council

FOREWORD
DD

Corporate Governance is a set of internal controls, policy and procedures which form
the framework of a company’s operations and its dealings with various stakeholders
such as customers, management, employees, government and industry bodies. The
framework of such policies should be such as to uphold the principles of transparency,
integrity, ethics and honesty. Corporate Governance is the soul of an organization and
must be adhered to while indulging in any business practices.

It is a pleasure to share my happiness amongst the members and other stakeholders in

bringing out an informative e-book on Corporate Governance in India.

This e-book provides insights on the meaning and importance of corporate governance,
how the same has evolved over the years, recommendations by various regulatory
bodies on Corporate Governance, principles and structure laid down for managing the
corporate governance.

This e-book provides detailed knowledge on the essential elements for corporate
governance, practice of good governance and the importance of 4 P’s in achieving the
same. It also outlines the detailed corporate governance structure, its impact on
various stakeholders and having a strong Environmental Social and Governance (ESG)
proposition. Professionals can also make use of this e-book to understand global
scorecard of Corporate Governance.

This e-book, one in a series of member centric publications planned by SIRC, aims to
serve as a Handbook and Guide for the professionals who intend to practice a good and
ethical corporate governance within their organization.

On behalf of SIRC, I wish to take the pleasant privilege of expressing my sincere

gratitude and appreciation to CA. M K Sridhar, for sharing his rich experience and
expertise on the Corporate Governance in India amongst our members through this e-
book. I also take the privilege of thanking CA. Vijaysundar for reviewing the basic draft
of e-book and adding value to the substance of the e-book.

Comments and suggestions on the e-book are welcome at sirc@icai.in

1CA.K. JALAPATHI
Chairman, SIRC of ICAI
Corporate Governance in India

A Study

2
 CONTENT

SNO PARTICULARS

I Introduction
2 The Principles of Governance

3 Corporate Governance structure

4 Environmental, Social and Governance

5 The Corporate Governance Score Card

6 Climate Related Financial Disclosures

7 Useful links for further reading and references.

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 1. Introduction
The word governance comes from the Latin word “gubanare” whichmeans “to steer”.
The meaning of governance is “the manner of directing and controlling the actions and affairs”.
Corporate Governance is the exercise of powers and actions to achieve goals of an organizational
entity. Corporate Governance has variously been defined to mean: “An internal system
encompassing policies, processes and people, which serves the needs of shareholders and other
stakeholders, by directing and controlling management activities, with good business savvy,
objectivity, accountability and integrity. Sound corporate governance is reliant on external market
place commitment and legislation, plus a healthy board culture which safeguards policies and
processes” (by Gabrielle O’Donovan).

In India Corporate Governance guidelines - both mandated and voluntary - have evolved since 1998,
thanks to the efforts of several committees appointed by the Ministry of Corporate Affairs (MCA) and
the SEBI. The principal source of governance is the Companies Act, Rules published under the
Companies Act, and Notifications and Circulars issued by the Ministry of Corporate Affairs (MCA).
Limitedliability partnerships (LLPs) are governed by the Limited Liability Partnership Act, 2008.

Listed companies in India are also required to comply with the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "SEBI Regulations")
and the listing agreement with the stock exchange onwhich the company may be listed.

Prior to 2019, CSR spending was voluntary. After the 2019 amendment to the 2013 Act, it has been
made a mandatory obligation for companies. As per the new amendment, a company has to
transfer the unspent CSR amount to a government specified fund. Non-compliance to this
requirement will attract penalties for the company and defaulting officers.

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Also, the new CSR rules enacted in 2021 have laid down the reporting mechanism for
companies. Companies to whom CSR is applicable have to prepare an annual report on CSR in the
prescribed format and attach it to its board report. Companies exceeding the specific threshold of
CSR obligations have to undertake an impact assessment by an independent agency. CSR activities
have to bedisplayed on the company's website.

In 2009, India’s MCA published the Corporate Social Responsibility Voluntary Guidelines (the "CSR
Guidelines"), recommending that all businesses formulate a CSR policy, and since then sustainability
disclosures have formed an integral part of the best practices of any company that wants to develop
and demonstrate its green or community-oriented credentials.

In 2011, the CSR Guidelines were superseded by the expanded and more detailed National Voluntary
Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business, containing
comprehensive principles to be adopted by companies as part of their CSR activities. This introduced
a structured reporting format for business, requiring certain specified disclosures and demonstrating
the steps taken by companies to implement the environmental, social and governance (ESG)
principles.

The NVGs define nine principles of responsible business conduct to be adopted by companies as part
of their practices and mandates for preparing a business responsibility report by providing
stakeholder information about the initiatives, impacts and future course of action across ethics,
transparency and accountability, product life- cycle sustainability, employees' well-being,
stakeholder engagement, human rights, environment, public advocacy, inclusive growth and
customer value.

In 2019, the NVGs were revised and the MCA formulated the National Guidelines on Responsible
Business Conduct (NGRBC). The NGRBC have been designed to assist businesses in fulfilling their
regulatory compliance requirements. The NGRBC are made applicable to all businesses, irrespective
of their ownership, size, sector, structure or location. These new guidelines containing precise pillars
of business responsibility (called principles),

5
accompanied by a set of requirements and actions that are essential to the operationalisation of the
principles, referred to as the "core elements". The principles highlighted in the NGRBC are set out
below:

businesses should conduct and govern themselves with integrity in a manner that is ethical,
transparent and accountable;

businesses should provide goods and services in a manner that is sustainable and safe;

businesses should respect and promote the wellbeing of all employees, including those in
their value chains;

businesses should respect the interests of and be responsive to all their stakeholders;

businesses should respect and promote human rights;

businesses should respect and make efforts to protect and restore the environment;

businesses, when engaging in influencing public and regulatory policy, should do so in a

manner that is responsibleand transparent;

businesses should promote inclusive growth and equitable development; and

Businesses should engage with and provide value to their consumers in a responsible
manner.

(https://practiceguides.chambers.com/practice-guides/corporate-governance- 2021/india -
Wakhariya & Wakhariya)
Indeed, it is fair to say that in terms of norms, guidelines and standards set for the board of
directors, financial and non-financial disclosures and information to be shared by the management to
stakeholders and the wider public, Indian corporate governance standards rank among the best in
the world.

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 a. National Task Force

Recognising the importance of Corporate Governance for the protection of investor interest,
promotion of transparency, the need to move towards international standards for disclosures of
information by the corporate sector leading to high level of public confidence in business and
industry, the Confederation of Indian Industries initiated by setting up a national task force under
Rahul Bajaj in 1995 and came out with a voluntary code called “Desirable Corporate Governance” in
1998.

The important recommendations:

a) The number of or percentage of independent directors inBoard

b) Limit on the number of directorship one can hold in listedcompanies
c) Non-executive Directors competency requirement
d) Limits on Commission payable to a MD
e) Active participation of directors in affairs for re-appointment
f) Audit Committee requirement for threshold meetingcompanies
g) Key Information Report
h) Additional Shareholders Information for Listed Companies
i) Compliance Certification by CEO & CFO
j) Credit Rating
k) Fixed Deposit Defaults related restrictions.

b. Kumaramangalam Birla Committee

In 1999 the Securities and Exchange Board of India (SEBI) set up Kumaramangalam Birla Committee
to raise the Corporate Governance standards in Indian Context. The Salient Mandatory and non-
Mandatory recommendations made by the Committee are:

Mandatory recommendations

a) Threshold change
b) Optimum Composition for Executive and Non-ExecutiveDirectors
c) Audit Committee composition specifics
d) Remuneration Committee

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 e) Board Procedure recommendations as to the minimum number of meetings in a year,
necessary matters to be considered, limitation on the number of committees one can be a
member
f) Management Discussions and Analysis Report and matters tobe covered thereunder
g) Information sharing with Shareholders

Non-Mandatory recommendations

a) Role of Chairman
b) Remuneration Committee of Board
c) Shareholders Rights for Half Yearly FinancialPerformance,
Postal Ballot covering critical matters
d) Requirements related to Sale of Whole or Substantial partof the Undertaking
e) Corporate Restructuring
f) Further Issue of Capital
g) Venturing into New Businesses

c. Naresh Chandra Committee

In 2002 MCA appointed a high level committee to examine Corporate Audit and Governance issues
called Naresh Chandra Committee. Their charter included, Auditor-Company relationship Their
independence, adequacy regulations of oversight functionary bodies, role and effectiveness of
independent directors and so on.
The Committee’s major recommendations are:

a) Appointment of auditors , Disqualifications for auditassignments;

b) Compulsory Audit Partner Rotation;
c) Auditor's annual certification of independence;
d) List of prohibited non-audit services;
e) Independence Standards for Consulting, Other Entities thatare Affiliated to Audit Firms;
f) Auditor's disclosure of contingent liabilities, disclosure ofqualifications and consequent
action;
g) Proposed disciplinary mechanism for auditors;
h) Management's certification in the event of auditor'sreplacement;

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 i) Minimum board size of listed companies;
j) Disclosure on duration of board meetings/committeemeetings, Additional
disclosure to directors;
k) Setting up of Independent Quality Review Board;
l) Remuneration of non-executive directors;
m) Exempting non-executive directors from certain liabilities;
n) Defining an independent director and the Percentage ofindependent
directors, Training of independent directors;
o) Audit Committee charter and composition;
p) SEBI and Subordinate Legislation;
q) Corporate Serious Fraud Office; etc.

d. N R Narayana Murthy Committee

Also, in 2002, the SEBI constituted N R Narayana Murthy Committee, to evaluate and improve the
Corporate Governance Practices as existed and to determine the role of companies in responding to
rumour and other price sensitive information circulating in the market, in order to enhance the
transparency and integrity of the market. The committee's recommendations in the final report were
selected based on parameters including their relative importance, fairness, accountability and
transparency, easeof implementation, verifiability and enforceability.

The Key Mandatory requirements are:

a) Improving the quality of financial disclosures, including deployment of proceeds from initial
public offers, related party transactions
b) Requiring corporate executive boards to assess and disclose business risks in the annual
reports
c) Introducing responsibilities on boards to adopt formal code ofconduct
d) The position of nominee directors
e) Strengthening the responsibilities of audit committee
f) Stock holder approval and improved disclosures relating to compensation paid to non-
executive directors
g) Whistle blowers policy

The Non-Mandatory recommendations included:

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 a) Instituting a system of training of board members
b) Evaluation of performance of board members
c) Moving to a regime where corporate financial statements arenot qualified.

The Committee noted that the recommendations contained in their report can be implemented by
means of an amendment to the ListingAgreement, with changes made to the existing clause 49.

e. National Foundation for Corporate Governance (NFCG)

Ministry of Corporate Affairs has set up a National Foundation for Corporate Governance (NFCG) in
2003, association with CII, ICAI and ICSI, as a not-for-profit trust. In 2010 Institute of Cost
Accountants of India and National Stock Exchange and in 2013 IICA(Indian Institute of Corporate
Affairs) were added as trustees
.It provides a platform to deliberate on issues relating to good corporate governance, to sensitise
corporate leaders on importance of good corporate governance practices as well as facilitate
exchange of experiences and ideas amongst corporate leaders, policy makers, regulators, law
enforcing agencies and non- government organizations. The NFCG has a three-tier structure for its
management, viz, the Governing Council under the Chairmanship of Minister of Corporate Affairs, the
Board of Trustees and the Executive Directorate. NFCG had framed an action plan, which includes
development of good corporate governance principles on identified themes i.e. (i) corporate
governance norms for institutional investors, (ii) corporate governance norms for independent
directors, and (iii) corporate governance norms for audit.

The MCA and SEBI, predominantly are involved in guiding the Corporate Governance initiatives
through various enactments and regulations. SEBI with its Listing agreement – consisting of 55
Clauses presently – has Mandated guidelines and suggested Non- Mandated guidelines.

Listed companies in India are required to comply with the Corporate Governance requirements as
specified in the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements)
Regulations,2015.

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Environmental, Social, and Governance (ESG) reporting, Business Responsibility and Sustainability
Report (BRSR) are further developments into the Corporate Governance, Integrated reporting
framework, and Climate Related Financial Disclosures requirements are briefly covered in the
following pages.

While most of the companies are compliant with the Law and the Regulations to a significant extent,
some companies have taken extra efforts to go beyond what is required in the statute and have
been more than compliant on the Corporate Governance Requirements.

The overwhelming majority of corporate India is well run, well regulated and does business in a
sound and legal manner.

For reference a list of some of the major Corporate Governance failures that lead to investor wealth
destruction is at Annexure A.

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 1. The Principles of Governance

The OECD Principles of Corporate Governance, endorsed by OECD Ministries have since become an
international benchmark for policy makers, investors, corporations and other stakeholders
worldwide. They have advanced the corporate governance agenda and provided specific guidance for
legislative and regulatory initiatives in both OECD and non-OECD countries.

These principles are broadly:

Source:http://www.oecd.org/daf/ca/Corproate-Governance-Principles-ENG.pdf

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The principles capture the essential elements of corporategovernance:

• Principle I: Ensuring the basis for an effective corporate governance framework: The corporate
governance framework must help promote transparent and fair markets, and the efficient allocation
of resources.

• Principle II: The rights and equitable treatment of shareholders and key ownership functions: The
corporate governance framework must identify basic shareholder rights and provide equitable
treatment of all shareholders.

• Principle III: Institutional investors, stock markets and other intermediaries: The corporate
governance framework must discloseand minimize conflicts of interest of market participants.

• Principle IV: The role of stakeholders in corporate governance: The corporate governance framework
must encourage active co-operation between companies and their stakeholders.

• Principle V: Disclosure and transparency: The corporate governance framework must facilitate
disclosure of material information to aid in informed decision-making.

• Principle VI: The responsibilities of the board: The corporate governance framework must ensure
effective supervision by the board and enhance the board accountability to stakeholders.

The Practices of good governance can be represented as 4 Pillars,incorporating:

1. Vision & Mission:

a. Direction: what business are we in, what are we trying to achieve and what are
the values and principles that frame the way we do business? The board is responsible for
these key strategic issues and for proving leadership in establishing the right culture to drive
the performance of the business. Without clear direction, the organisation will flounder and
likely never to realise its long term goals and potential.

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 b. Viability & sustainability: a key priority in today’s dynamic, ever changing
environment. Is the business built on a foundation that provides relevant, client focused
services/products and is there a market that will pay a fair price to enable the organisation
to sustain its activities over the medium term at least? Are the assumptions upon which the
business model is based upon tested on a regular basis to ensure viability can be maintained?
Does the board continually challenge itself on these most important matters?

2. Stakeholder engagement: Do the organisation in general and the board in particular,

understand who the key stakeholders are, how they interact with the business and how they
are engaged with to ensure the best outcome for the organisation? Is stakeholder
engagement included in the annual agenda and strategic plan?

3. Compliance and Management

a. Compliance: does the organisation have a culture of compliance that” it is the

right thing to do rather than something that must be done to avoid penalties?” Is a register in
place to assist in compliance management and to provide evidence to the board of how this is
being managed within theorganisation?

b. Risk management: does the organisation have a risk management plan in place, is
this reviewed over the year and updated on an annual basis? Does the board have a discussion
each year on its appetite for risk, how this impacts on its risk management plan and how this
will be managed during the year? Is there a business continuity plan in place?

c. Performance management: the organisation, the CEO and the board itself – how
is performance managed for each of these? Does every board member have a real
understanding of how the organisation is performing both historically and in terms of lead
indicators? Does the board have a system in place to monitor the performance of the CEO and
an opportunity to provide mutual feedback on an annual basis? Does the board review its
own performance and seek ways to enhance its own functioning?

4. Professional development & succession: are resources allocated for ongoing

professional development of the board

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 and is there an annual plan in place that demonstrates this has been thought about within
the context of the board’s needs? Is there a plan in place for board renewal that both retains
knowledge and experience and ensures appropriate representation?

The 4 P’s of Corporate Governance achievement are broadlyclassified into:

People Purpose Process Performance

Shareholders Vision Business Processes Bench Marks
Investors Mission System Processes Measurement
Employees Objectives Organisation Analysis
Processes
Lenders Strategy Integration Diversification
Suppliers Plans Supply Chain Quality
Assurance
Customers Operational Resource Plans Compliance
Challenges confirmation
Society Energy optimisation Whistle Blowers
protection
Auditors Risk Mitigation
Law Crisis Management
enforcers
Compliances

People

They are people who help and participate to run the company. People including investors,
consumers, staff, lenders, companies, government and society as a whole are the stakeholders. The
internal stakeholders of an organization must be willing to work, employee-oriented and ethical in
their approach and meet the expectations of the external stakeholders in an unbiased manner.
The administration should be fair and result-oriented. The management of the company needs to
incorporate ethical principleslike honesty and integrity in the business. Cordial partnerships and

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their involvement in decision-making minimize conflict areas among various stakeholders.

Purpose

In the intent of a company, the management of a business should be legal, ethical and transparent. All
stakeholders should be notified and aware of the intent. As time and circumstances change, the aim
should be suitably adjusted or modified. The functions specified should be tangible and operational.
The concept of intent contributes to a company's vision and mission. The direction is then taken to
identify a company's strategy and comprehensive action plans, by the Board of Directors duly
supported by the Management.

Process

Clearly defined and documented Business and Management processes. Management of processes
covers resource control, management of companies, supply chain management, energy
management, marketing management, data management, risk management, and Project
management. The management of processes involves how they organize and generate the
predetermined results. There should be identified control parameters and mechanisms to show the
areas in which these processes are deficient, and possible corrective measures executed. The plans
and processes are regulated by different rules and laws that require enforcement in the country.

Performance

The standards of output should be set and communicated to ensure that everyone knows what is
expected in the chain. The effects should be undisputedly defined transparently measurable.
Standard measures contribute to operational efficiencies and vulnerabilities at different stages. The
metrics of success may be made on the monetary transactions in an organization such as the
productivity of assets or the supply chains.

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The core concepts Corporate Governance can be summarised as:

a. Transparency

Transparency leads to sufficient reporting without undermining the interest of the

client. This needs the clarification of strategies and actions of the company for those
to whom it is accountable. The Financials are prepared in accordance with IFRS,
registry filings are up-to-date, high quality Annual Reports are published, Web based
disclosure in place and timely accuratedisclosures of all material matters are made.

b. Rule of law

Understand and abide by the various Rule of Law enacted. Anticipate future
requirements and prepare well in time to ensure adherence.

c. Participation

Educate and involve all stakeholders in a fair manner while conducting the business.

d. Responsiveness

Respond in a timely, transparent and fair manner

e. Responsibility.

Management Board is liable to shareholders and shareholders are liable to the

Management Board. Responsibility gives success impetus.

f. Equity

Being fair and practice equity.

g. Ethics

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 Deviation from ethical values compromises the corporate culture and the interests of
the stakeholders. Upholding of the ethical principles by a corporation enhances its
value. Practice Gender ethics, have and implement clear Sexual Harassment and
Discrimination policies. Implement effective anticorruption policies. Practice
Environmental ethics which is the ethical relationship between us as human beings
and the natural environment.

h. Efficiency and Effectiveness

Perform effectively and efficiently. Benchmark practices and strive to better.

i. Independence

Act independently and enable others to act independently. Protect the

independence of Whistle blowers.

j. Sustainability

In recent times, adapting to and mitigating climate change impact, inclusive growth
and transitioning to a sustainable economy have emerged as major issues globally.
There is an increased focus of investors and other stakeholders seeking businesses
to be responsible and sustainable towards the environment and society. In addition
to the business being sustainable in a manner to achieve the intended objectives,
these aspects also need to be considered andbuilt in.

k. Accountability, Fairness to all Stakeholders

As seen, the Board of Directors are in trusteeship of investors and as such they are
accountable to the shareholders and to all the stakeholders. With power

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 comes responsibility and with trusteeship comes accountability. There should be fair
and clear accountability towards all the stakeholders.

l. Trusteeship

In the board of directors there is a trusteeship concept, which needs to work to

protect and enhance the interests of shareholders and other stakeholders.

m. Empowerment

This actually confers decision-making powers at the most important organizational

levels to stimulate creativity and innovation within the company.

n. Oversight

This means that a checks and balances program exists. It will avoid abuse of power
and make the managementof change and risks timely and effective.

o. External Audit

It must be independent and penetrating.

p. Regulatory Regime

There must be an appropriate regulatory regime to back these obligations.

q. Whistle blowers policy

Companies should adopt a policy for Whistle blowers. Anonymous and in case of
exposure, protection to be ensured for the whistle blowers.

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 4. Corporate Governance structure

A company is an artificial person created by law, having separate entity, with a perpetual succession
and common seal, is an artificialbeing, invisible, intangible, existing only in contemplation of the Law.

Shareholders and stakeholders of a company do not run thecompany. The directors do. All
Board members occupy fiduciarypositions. They are expected to act always in the best interests
ofthe entity they lead should practise quality governance whichinvolves fairness, accountability,
responsibility and transparency ona foundation of intellectual honesty. The role of the Chief
Executive Officer and management is to run the business of thecompany and the role of the
board of directors is to overseemanagement. Given these different roles and responsibilities,
leadership of the board should be separated from leadership ofmanagement.

The only principal way in which directors make themselves accountable to the shareholders is
through communicating and disclosing information about the company and its business performance
to them. Investors hold back from investing and share value will drop if there are doubts about the
honesty and transparency of how information about the company is collected anddisclosed.

Information technology has taken over centre stage on how data and information about companies
are recorded, preserved and transmitted. Accordingly companies should have information
technology frameworks in place to ensure complete, timely, relevant, accurate and accessible IT
reporting firstly from management to the Board and secondly by the Board to shareholders and
stakeholders in the integrated report. Accordingly Boards of entities must ensure that there is an IT
Governance Charter and policies are established and implemented in terms of that Charter. The
Boards of companies should delegate to their management the

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responsibility for establishing and implementing the IT Governance framework through charters and
plans of action. Effective IT Frameworks and policies as well as the processes, procedures and
standards that these evolve, should be implemented with a view to minimizing risk, deliver value,
and ensure business continuity and assist the company to manage its resources efficiently and cost
effectively.

The Board of Directors(BOD) are supported by the CEO and the Management of the company
including the Company Secretary. The BOD also forms various committees (both Mandatory and non-
Mandatory) among the Directors which supports them in the Governance process. The BOD should
ensure the Management and the Committee Members have the necessary skills viz.,

Managerial skillsTechnical Skills

Human Resources SkillsConceptual skills
Diagnostic skills Communication skills Political
skills

for effective discharge of the responsibilities entrusted on them.Board Effectiveness

- Board Composition
- Gender Mix
- Board Skills
- Training of Directors
- Responsibilities of Board
- Board and Committee composition
- Separation of Roles
- Director Remuneration
- Board Evaluation
- Succession PlanningShareholder

Management

- Stakeholder Engagement
- Board Attendance of AGMs

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 - Quality of Shareholder meetings
- Investor Grievance Policies
- Conflict of Interest
- Related Party Transactions
- Voting on Resolutions
- Dividend Policy DisclosuresAudit Quality

- Financial Reporting
- Ownership Structure
- Disclosure and Transparency
- Auditor Experience
- Audit Integrity
- Company Filings
- Risk Management
- Dividend Pay-outs and PoliciesStakeholder

Engagement

- Investor Engagement
- Supplier Management
- Relationship with Creditors
- Related Party Transactions
- Employee Welfare
- POSH
- Whistle blowers Policy
- Conflict of Interest and other disclosures
- Corporate Social Responsibilities
- Corporate Governance
- Business Responsibility initiativesExecutive Remuneration

- CEO Compensation
- Pay vs Performance
- Fixed Vs Variable Components

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Pressures on a company

Corporations are always concerned about the interest of the stakeholders of the corporation.
Stakeholders also take care about social causes and the commercial value of society in relation to
different interest areas of the stakeholders. The success of different corporations is dependant on the
operations of the organizations, which are performed to provide profit to the stakeholders of the
corporation. Stakeholders of a corporation are of four types:

Primary social stakeholder: These are those stakeholders who have direct relations with the
corporation. The presence of these

23
stakeholders in the corporation can affect the progress of the corporation.

Primary non-social stakeholder: These are also directly related to the corporation, but they are never
present in the corporation as primary social stakeholders.

Secondary social stakeholder: These are those stakeholders who are not directly related to the
corporation but changes in these stakeholders can affect the corporation.

Secondary non-social stakeholder: These are those stakeholders who are not related to the
corporation and can rarely affect the corporation.

Primary Social Stakeholder Primary non-Social

Stakeholders

Investors Employees Natural Environment

Lenders Customers Future Generation
Suppliers Business
partnersGlobal Citizen
Local Communities

Secondary Social Secondary non-Social

Stakeholders Stakeholders

Government Environmental pressure Group Animal

Society Unions Welfare pressure Group
Media and CommunicatorsTrade
Bodies
Competitors
Religious pressure group(Halal
/ Vegan etc)

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 The responsibility an individual assumes when he became charged with governance of an entity is
considerable and one that should only be taken with a clear understanding of, and commitment to,
fulfilling this responsibility to the best of their ability foremost for the stakeholder interest. Having a
clear understanding of the principles and practices of good governance will enhance the
performance of both the individual and the organisation.

Five Golden Rules of leading corporate governance practice are:

1. Ethics: a clearly ethical basis to the business

2. Align Business Goals: appropriate goals, arrived at through thecreation of a suitable stakeholder
decision making model
3. Strategic Management: an effective strategy process whichincorporates
stakeholder value
4. Organisation: an organisation suitably structured to effect goodcorporate governance
5. Reporting: reporting systems structured to provide transparencyand accountability

Source:https://www.applied-corporate-governance.com/best-corporate- governance-
practice/importance-of-corporate-communication/

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5. Environmental, Social and Governance
(ESG)

ESG is a business review of a company’s economic, environmentaland social impacts, caused by

everyday business operations and activities.

Source: Irisbusiness.com-esgreporting

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ESG reporting was limited in a way through BRR reporting and CSR (Corporate social responsibility)
reporting.
Business Responsibility Reporting(“BRR”) is a report (part of the annual report) submitted to Indian
stock exchanges by the top 1000 listed entities by market capitalization. Non-submission of BRR is
considered as a violation of Clause 55 of the Equity Listing Agreement.
BRR reporting philosophy was to make the listed company accountable towards stakeholders and
also at the same time to be environmentally sustainable.
In May 2020, Committee on Business Responsibility Reporting developed and recommended
Business Responsibility and Sustainability Report (BRSR) be integrated with the MCA21 portal. SEBI
(under the guidance of MCA) in March 2021 made BRSR reporting applicable to the top 1000 listed
entities (by market capitalization). New disclosure will be made in the format of the Business
Responsibility and Sustainability Report (BRSR), which is a notable departure from SEBI's existing
Business Responsibility Report and a significant step toward bringing sustainability reporting up to
existing financial reporting standards.

The new BRSR format is based on the nine principles of the Indian government's "National
Guidelines on Responsible Business Conduct" (the "RBC Guidelines"), which are intended to define
responsible business conduct for Indian companies. The RBC Guidelines are driven by leading
international standards and practices including the UN Guiding Principles on Business and Human
Rights, UN Sustainable Development Goals, the Paris Agreement and the ILO Core Conventions. The
principles address a range of sustainability matters including business ethics and transparency,
human rights, environmental safety and fair labour practices.

Reporting under each principle is divided into essential indicators, which are mandatory obligations,
and leadership indicators, which operate on a voluntary basis. Some of the key disclosure
requirements (under either essential or leadership indicators) are tabulated below:

27
Aspects Disclosure requirements Principles

 An overview of the
company's material ESG
risks and opportunities
and approach to mitigate
or adapt to the risks,
together with relevant
financial implications
 Sustainability related goals
General General management and
and targets and related
process disclosures
performance
 Management structures,
policies and processes
relatedto sustainability

 Resource usage (energy

and water) and intensity
metrics Principle 6: Businessesshould
 Air pollutant respect and make efforts to
emissions protectand restore the
 Greenhouse gas environment
Environment emissions (Scope 1, Scope
2 and Scope 3) Principle 2: Input material
 Waste generated and sourcing, usage of
waste management reuse/recycleinputs
practices
 Impact on bio-
diversity

 Employees
Principle 3: Businessesshould
respect and promote the
o Gender and social
well-beingof all employees,
diversity including
Social including those in theirvalue
measures for
chains
differently-abled
employees
Principle 5: Businessesshould
o Turnover rates
respect and promote human
o Median wages
rights
o Welfare benefits to
permanent and

28
 contractual
employees
o Occupational healthand
safety
o Trainings

 Communities
Principle 7: Affliationwith
chambers
o Social Impact
Assessments
Principle 8: Businessesshould
o Rehabilitation and
promote inclusive growth
Resettlement
and equitable development
o Corporate Social
Responsibility

 Consumers

o Product labelling Principle 9: Businessesshould

o Product recall engage with andprovide
o Consumer complaintsin value to their consumers in a
respect of data privacy, responsible manner
cyber security etc

 Training on the principles

in the RBCGuidelines for
members of the Board, Principle 1: Businesses
senior managers and should conduct and govern
employees themselves with integrity,
 Anti-corruption andanti- and in amanner that is
bribery policies Ethical,Transparent and
Governance  Awareness programs Accountable.
conducted for value chain
partners on theprinciples Principle 4: Stakeholders
in the RBCGuidelines interestprotection

29
The new reporting requirements promote transparent, standardized disclosures on ESG parameters
and sustainability-related risks and opportunities among listed companies in India. This approach will
help companies better demonstrate their sustainability objectives, position and performance to the
market, resulting in long-term value creation and increasing the ability of investors to make
informed ESG-related decisions.

The Economic Times, Bangalore 15 Oct 2021

BRSR reporting will be voluntary for FY 2021-22 and mandatory from FY 2022-23 for the top 1,000
listed companies by market capitalization. This is to provide companies subject to these
requirements with sufficient time to adapt to the new requirements. Companies are encouraged,
however, to adopted the BRSR early in order to be at the forefront of sustainability reporting. The
new reporting requirements promote transparent, standardized disclosures on ESG parameters and
sustainability-related risks and opportunities among listed companies in India. This approach will
help companies better demonstrate their sustainability objectives,

30
position and performance to the market, resulting in long-term value creation and increasing the
ability of investors to make informed ESG-related decisions.

Going forward, the applicability is proposed to be extended to all companies and even LLPs in a span
of 5 years starting from FY 2021-22.

The BRSR framework consists of two separate formats.

Comprehensive BRSR

Applicable to the top 1000 listed entities in India and may be extended to other listed entities based
on the threshold.
BRSR Lite

Applicable to non-listed entities which have a simple structure to encourage more companies to
begin sustainability reporting. BRSR Lite is voluntary for adoption by non-listed entities.

BRSR | Summary of Disclosures and Principles

Section A and B focusses on “quantitative data” while Section C focusses on “qualitative data”

31
32
(BSE Guidance Document on ESG Disclosures)

IASB has already initiated a discussion to establish IFRS-based ESG standards which will be made part
of IFRS XBRL taxonomy, it’s inevitable that an equivalent update in IND-AS and in MCA XBRL
Taxonomy will occur.
It is ideal for SEBI/MCA to establish a data standard for ESG data reporting at the inception of ESG
evolution in India. Data Standards like XBRL, iXBRL, SDMX have garnered immense importance in
business reporting in recent years mainly due to the fact that they are open source, have globally
accepted data structures, and have abundant software, human resources availability.

33
Source: McKinsey – Five ways that ESG creates value Nov 2019

34
 6. The Corporate Governance Score Card

BSE has collaborated with the International Finance Corporation (IFC) Washington, a member of the
World Bank Group for developing a "CG Scorecard" for Indian corporates and decided to avail the
expertise of Institutional Investors Advisory Services (IiAS), a leading proxy advisory firm in India to
devise a questionnaire under the guidance of IFC and BSE.

www.issgovernance.com © 2021 ISS

Institutional Shareholder Services and/or its affiliates – has issued a ISS ESG Governance Quality
Score Methodology Guideline in Sept 2021 covering the 6 CG principals of OECD covering widely held
companies of India in the Asia Pacific Region.

35
The scorecard requires the evaluation to be conducted only on publicly available data. Sources of
information will primarily include official company documents on the company website and stock.

ESG Criteria – Major Index Providers

Source: Refinitiv, MSCI, Bloomberg, FTSE, OECD assessment

The questions in the Scorecard have been grouped into four categories – each category
corresponding to one of the principles recognised in the G20/OECD Principles as a measure of good
corporate governance exchange filings. For a few specific questions, the verification sources may even
include regulatory orders and media reports.

36
The Scorecard has been developed considering four of the six G20/OECD Principles (Principle II, IV,
V, and VI), which focus directly on the company’s governance practices. G20/OECD Principles I and III
have been kept outside the purview of the model as they deal with the overall regulatory
environment and the role of market participants in corporate governance – factors which are not in the
control of the company. The underlying principles behind theScorecard are listed as follows:

• The Scorecard must be able to provide a true and fair assessment of governance practices.

• The Scorecard should reflect globally recognized good governancepractices.

• The Scorecard should factor in the Indian construct. However, to the extent possible, it should be
universally applicable even for companies outside the Indian markets.

• The Scorecard should be constructive and encourage companies to adopt better practices beyond
minimum compliance.

• The Scorecard should be reliable and have appropriate checks and balances to ensure credibility of
the assessments.

37
38
Percentage of SENSEX companies in each category

Companies with leadership scores in BSE100

Distribtion of governance scores for the BSE100 companies

39
Companies with highest scores in BSE100 to have featured at least twice in the studies

Annual Median, maximum and minimum scores for BSE100 companies

Source: AS_CG_Scorecard_2020-5-May_2021

40
Some of leading Indian Companies recent CG Score Card

41
42
43
44
45
46
 7. Climate Related Financial Disclosures
Ever since the formation of the Task Force on Climate-related Financial
Disclosures (TCFD) in 2015 and the publication of their first set of
recommendations 2 years later, there has been rapid and significant buy-in from
organizations across the financial services spectrum.

The TCFD recommendations consist of four pillars — governance, strategy, risk

management, and metrics and targets — with suggested disclosures against each
one.

47
https://www.oecd.org/finance/ESG-Investing-Practices-Progress-Challenges.

SASB materiality map

Source: SASB Website – for illustrative purposes only

48
TFCD materiality framework

Source: Taskforce on Climate-related Financial Disclosures

Through integrated reporting along with the Financial reporting, with ever
expanding environmental awareness, these requirements are also increasing and
being addressed progressively.

49
 Annexure A.

List of some of the major Corporate Governance failures inIndia that

lead to investor wealth destruction.

Unfortunately, history tells us that even the best standards cannot prevent
instances of major corporate misconduct. This has been true in the US - Enron,
Worldcom, Tyco and, more recently gross miss- selling of collateralised debt
obligations; in the UK; in France; in Germany; in Italy; in Japan; in South Korea;
and many other OECD nations.

A. Ramalinga Raju-Satyam
The biggest corporate scam in India has come from one of the most respected
businessmen. Satyam founder By Ramalinga Raju resigned as its chairman after
admitting to cooking up the account books. His efforts to fill the fictitious assets
with real ones through Maytas acquisition failed, after which he decided to
confess the crime. With a fraud involving about Rs 8,000 crores, Satyam is
heading for more trouble in the days ahead. On Wednesday, India fourth largest
IT company lost a staggering Rs 10,000 crores in market capitalisation as
investors reacted sharply and dumped shares, pushing down the scrip by 78 per
cent to Rs 39.95 on the Bombay Stock Exchange. The NYSE-listed firm also faced
regulator action in the US.
I am now prepared to subject myself to the laws of the land and face
consequences thereof Raju said in a letter to SEBI and the Board of Directors,
while giving details of how the profits were inflated over the years and his failed
attempts to fill the fictitious assets with real ones Raju said the company balance
sheet as of September 30 carries inflated (non-existent) cash and bank balances
of Rs 5,040 crores as against Rs 5,361 crores reflected in the books.

B. Harshad Mehta
Harshad Mehta worked with the New India Assurance Company before he
moved ahead to try his luck in the stock markets. Mehta soon mastered the
tricks of the trade and set out on dangerous game

50
plan. Mehta has siphoned off huge sums of money from several banks and
millions of investors were conned in the process. His scam was exposed, the
markets crashed and he was arrested and banned for life from trading in the
stock markets.

He was known as the Big Bull However, his bull run did not last too long. He
triggered a rise in the Bombay Stock Exchange in the year 1992 by trading in
shares at a premium across many segments. Taking advantages of the loopholes
in the banking system, Harshad and his associates triggered a securities scam
diverting funds to the tune of Rs 4000 crores from the banks to stockbrokers
between April1991 to May 1992.

He was later charged with 72 criminal offences. A Special Court also sentenced
Sudhir Mehta, Harshad Mehta brother, and six others, including four bank
officials, to rigorous imprisonment (RI) ranging from 1 year to 10 years on the
charge of duping State Bank of India to the tune of Rs 600 crores in connection
with the securities scam that rocked the financial markets in 1992. He died in
2002 with many litigations still pending against him.

C. Ketan Parekh
Ketan Parekh followed Harshad Mehta footsteps to swindle croress of rupees
from banks. A chartered accountant he used to run a family business, NH
Securities. Ketan however had bigger plans in mind. He targeted smaller
exchanges like the Allahabad Stock Exchange and the Calcutta Stock Exchange,
and bought shares in fictitious names.
His dealings revolved around shares of ten companies like Himachal Futuristic,
Global Tele-Systems, SSI Ltd, DSQ Software, Zee Telefilms, Silverline,
Pentamedia Graphics and Satyam Computer (K-10 scrips). Ketan borrowed Rs
250 crores from Global Trust Bank to fuel his ambitions. Ketan along with his
associates also managed to get Rs 1,000 crores from the Madhavpura Mercantile
Co- operative Bank. According to RBI regulations, a broker is allowed a loan of
only Rs 15 crores. There was evidence of price rigging in the scrips of Global
Trust Bank, Zee Telefilms, HFCL, Lupin Laboratories, Aftek Infosys and Padmini
Polymer.

51
D. Bhansali scam
The Bhansali scam resulted in a loss of over Rs 1,200 crores. He first launched the
finance company CRB Capital Markets, followed by CRB Mutual Fund and CRB
Share Custodial Services. He ruled like a financial wizard 1992 to 1996
collecting money from the public through fixed deposits, bonds and debentures.
The money was transferred to companies that never existed. CRB Capital
Markets raised a whopping Rs 176 crores in three years. In 1994 CRB Mutual
Funds raised Rs 230 crores and Rs 180 crores came via fixed deposits. Bhansali
also succeeded to raise about Rs 900 crores from the markets. However, his good
days did not last long, after 1995 he received several jolts. Bhansali tried
borrowing more money from the market. This led to a financial crisis. It became
difficult for Bhansali to sustain himself. The Reserve Bank of India (RBI) refused
banking status to CRB and he was in the dock. SBI was one of the banks to be hit
by his huge defaults.

E. The Cobbler’s scam - Sohin Daya

Sohin Daya, son of a former Sheriff of Mumbai, was the main accused in the
multicrores shoes scam. Daya of Dawood Shoes, Rafique Tejani of Metro Shoes,
and Kishore Signapurkar of Milano Shoes were arrested for creating several
leather cooperative societies which did not exist. They availed loans of croress of
rupees on behalf of these fictitious societies. The scam was exposed in 1995. The
accused created a fictitious cooperative society of cobblers to take advantage of
government loans through various schemes. Officials of the Maharashtra State
Finance Corporation, Citibank, Bank of Oman, Dena Development Credit Bank,
Saraswat Cooperative Bank, and Bank of Bahrain and Kuwait were also charge
sheeted.

F. Dinesh Dalmia’s stock scam.

Dinesh Dalmia was the managing director of DSQ Software Limited when the
Central Bureau of Investigation arrested him for his involvement in a stocks
scam of Rs 595 crores. Dalmia group included DSQ Holdings Ltd, Hulda
Properties and Trades Ltd, and Power flow Holding and Trading Pvt Ltd. Dalmia
resorted to illegal

52
ways to make money through the partly paid shares of DSQ Software Ltd, in the
name of New Vision Investment Ltd, UK, and unallotted shares in the name of
Dinesh Dalmia Technology Trust. Investigation showed that 1.30 crores shares of
DSQ Software Ltd had not been listed on any stock exchange.

G. The Fake stamp papers racket.

He paid for his own education at Sarvodaya Vidyalaya by selling fruits and
vegetables on trains. He is today famous (or infamous) for being the man behind
one of The Telgi case is another big scam that rocked India. The fake stamp
racket involving Abdul Karim Telgi was exposed in 2000. The loss is estimated to
be Rs 171.33 crores, it was initially pegged to be Rs 30,000 crores, which was
later clarified by the CBI as an exaggerated figure. In 1994, Abdul Karim Telgi
acquired a stamp paper license from the Indian government and began printing
fake stamp papers. Telgi bribed to get into the government security press in
Nashik and bought special machines to print fake stamp papers. Telgi
networked spread across 13 states involving 176 offices, 1,000 employees and
123 bank accounts in 18cities.

H. The Money Market Fraud

Virendra Rastogi chief executive of RBG Resources was charged with for deceiving
banks worldwide of an estimated $1 billion. He was also involved in the duty
draw back scam to the tune of Rs 43 crores in India. The CBI said that five
companies, whose directors were the four Rastogi brothers -- Subash, Virender,
Ravinder and Narinder -- exported bicycle parts during 1995-96 to Russia and
Hong Kong by heavily over invoicing the value of goods for claiming excess duty
draw back from customs.

I. The UTI Scam

Former UTI chairman P S Subramanyam and two executive directors
-- M M Kapur and S K Basu -- and a stockbroker Rakesh G Mehta, were arrested
in connection with the; UTI scam. UTI had purchased 40,000 shares of
Cyberspace On September 25, 2000, for about Rs
3.33 crores from Rakesh Mehta when there were no buyers for the scrip. The
market price was around Rs 830. The CBI said it was the

53
conspiracy of these four people which resulted in the loss of Rs 32 crores.
Subramanyam, Kapur and Basu had changed their stance on an investment
advice of the equities research cell of UTI. The promoter of Cyberspace Infosys,
Arvind Johari was arrested in connection with the case. The officials were paid
Rs 50 lakh (Rs 5 million) by Cyberspace to promote its shares. He also
received Rs
1.18 crores (Rs 11.8 million) from the company through a circuitous route for
possible rigging the Cyberspace counter.

J. Sanjay Agarwal’s Finance Portal

Home Trade had created waves with celebrity endorsements. But Sanjay
Agarwal finance portal was just a veil to cover up his shady deals. He swindled a
whopping Rs 600 crores from more than 25 cooperative banks. The government
securities (gilt) scam of 2001 was exposed when the Reserve Bank of India
checked the acounts of some cooperative banks following unusual activities in
the gilt market. Co-operative banks and brokers acted in collusion in abide to
make easy money at the cost of the hard earned savings of millions of Indians.
In this case, even the Public Provident Fund (PPF) was affected. A sum of about
Rs 92 crores was missing from the Seamen Provident Fund. Sanjay Agarwal,
Ketan Sheth (a broker), Nandkishore Trivedi and Baluchan Rai (a Hong Kong-
based Non- Resident Indian) were behind the Home Trade scam.

K. Gilt funds
Gilt funds, as they are conveniently called, are mutual fund schemes floated by
asset management companies with exclusive investments in government
securities. The schemes are also referred to as mutual funds dedicated
exclusively to investments in government securities. Government securities
mean and include central government dated securities, state government
securities and treasury bills. The gilt funds provide to the investors the safety of
investments made in government securities and better returns than direct
investments in these securities through investing in a variety of government
securities yielding varying rate of returns gilt funds, however, do run the risk.
The first gilt fund in India was set up in December 1998.

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L. ILF&S
Infrastructure Leasing & Financial Services (IL&FS) is a non-banking financial
company (NBFC), or 'shadow bank'. Established over 30 years ago, the
conglomerate funds infrastructure projects across India. IL&FS Financial
Services fell short of cash and defaulted on several of its obligations. Even as
new infrastructure projects dried up, IL&FS' running construction projects faced
cost overruns amid delays in land acquisition and approvals. It defaulted on
repayment of bank loans (including interest), term and short-term deposits and
also failed to meet commercial paper redemption obligations. It reported that it
had received notices for delays and defaults in servicing some of the inter-
corporate deposits accepted by it. Following the defaults, rating agency ICRA
downgraded the ratings of its short-term and long-term borrowing programmes.
The defaults also jeopardised hundreds of investors, banks and mutual funds
associated with IL&FS, and sparked panic among equity investors, even as
several non-banking financial companies faced turmoil amid a default scare.

The IL&FS group operates over a hundred subsidiaries and is sitting on a debt of
Rs 94,000 crores. Serious Fraud Investigation Office (SFIO) started a probe
as there were huge procedural lapses at the NBFC. The initial SFIO probe also
revealed that there were major lapses in Deloitte's audit of the IL&FS. SFIO
investigation found it guilty of painting a rosy picture of IFIN despite being
aware of the poor financial health of the company, triggering the ministry to seek
a ban on the auditors.

M. Amrapali
Once ranked among the country’s biggest real estate giants, the Amrapali Group
is today struggling to pay its dues. At its peak in 2015, the group, which has
been hauled to Supreme Court by more than 2,500 homebuyers, claimed to have
nearly 50 properties spread across 24 cities. The Amrapali group had expanded
into the FMCG sector with its ‘Amrapali Mums’ product line introduced in Bihar,
as well as the entertainment sector with its Amrapali Media Vision.

55
There seem to be diversion of funds and the bankers started legal action for
recovery of dues, Amrapali’s funds are running dry because of its tussles with
financial institutions and settlement of various bank obligations.

N. Dewan Housing Finance Company (DHFL)

A lumpsum of Rs 14,046 crores, out of which Rs 11,755.79 crores was routed to
several fictitious firms known as Bandra Book Firms, was loaned to borrowers. A
forensic audit report, unearthed by Grant Thornton disclosed the irregularities
of DHFL, after which the CBI registered a case on March 2021. In November
2019, DHFL became the first NBFC to be referred for bankruptcy by the RBI. It
defaulted on its debt payments, including bank loan repayments and commercial
paper (CP) redemption obligations. Creditors, mostly scheduled commercial
banks (SCBs), rushed to tighten lending norms against NBFCs. This sparked a
brutal liquidity crisis that affected all shadow lenders, big and small.

DHFL is a non-banking financial company. This means that all banks are supposed
to lend a certain portion of their funds to companies like DHFL. This is the
reason that money deposited by small depositors in bank accounts of State Bank
of India, Bank of Baroda, etc. ends up in the hands of NBFC’s like DHFL. As per
recent data, the Indian banking sector had invested at least $3 billion in DHFL.
Along with this amount, DHFL has also borrowed heavily by issuing bonds and
other debt instruments. These instruments are also largely held by the retail
investor. Hence, if the allegations against DHFL are true, it could signify massive
losses for the retail investor.

The alleged Methodology by which DHFL was able to siphon off money lent to it
by public sector banks are:

Loans to Shell Companies: It was alleged that DHFL has made dubious loans to
shell companies which are pass-through entities they are just a stop on the
complex route which is generally created to confuse tax and other regulatory
authorities. These corporations have indirect links to the promoters of the DHFL
group, and reports indicate that DHFL has lent out close to $1.5 billion in
unsecured

56
loans to these companies. It is alleged that a lot of these loans given to shell
companies have now become non-performing assets (NPA’s)

Round Tripping: The bigger problem is that the money which was loaned out has
later flown back into entities which were owned by the DHFL group. In financial
parlance, this is known as round- tripping. Hence, in effect, DHFL gave an
unsecured loan to its promoters. Without round-tripping DHFL is just guilty of
negligence. With round-tripping, DHFL has a malafide intent and therefore
becomes guilty of fraud.

Purchasing Overseas Assets: Lastly, the money acquired by round tripping was
used by DHFL in order to purchase assets in other countries. It is alleged that
DHFL has invested the money in start up companies in the United Kingdom and
has purchased a cricket team in the Sri Lankan Premier League. It is also alleged
that other personal assets have also been created in countries like Mauritius and
Dubai by the owners of DHFL. Once again, this seems like a scam because all the
assets have been created in other jurisdictions. Hence the Indian government or
the tax authority will not be able toacquire the same.
The bottom line is that the allegations made against DHFL are explosive. A scam
of this magnitude will cause a lot of damage to Indian investors.

57
USEFUL LINKS for further reading and references

India Governance Links Regulators

 Securities Exchange Board of India (SEBI)

 Ministry of Corporate Affairs (MCA)

Laws, Regulations and Reports

 Report of the Committee on Corporate Governance for publiccomments

 Integrated Reporting by Listed Entities

 Securities and Exchange Board of India guidelines on BoardEvaluations

 Securities and Exchange Board of India (Listing Obligations AndDisclosure

Requirements) (Amendment) Regulations, 2017

 Report of The Companies Law Committee

 Principles of Corporate Governance (G20 2015, OECD)

 Baijal Committee report

 The Companies Act of 1956

 The Companies Act of 2013

 The Desirable Corporate Governance - a code

 The Naresh Chandra Committee Report

 The Kumar Mangalam Birla Committee Report

 The N R Narayana Murthy Committee Report

 Clause 49 of the Listing Agreement

 Revised Clause 49 of the Listing Agreement

58
Statutory Bodies
 Institute of Company Secretaries of India (ICSI)

 ICAI

 IICA

Others
 National Foundation for Corporate Governance (NFCG)

 Corporate Governance section from the Business Portal of India

 The Competition Commission of India

 The Central Vigilance Commission of India

 Confederation of Indian Industries (CII)

 Institute of Internal Auditors (IIA) India

 Bombay Chartered Accountants Society (BCAS)

 Asian Corporate Governance Association (ACGA)

 Information Systems Audit and Control Association (ISACA)

59
 60
Southern India Regional Council
(Set up by an Act of Parliament)
The Institute of Chartered Accountants of India