Vol 9 Issue 1
- Date:28 Jan 2011
- Type:Boardroom Report
New consumer law risks for directors
The new Australian Consumer Law (ACL), which came into effect on 1 January 2011, brings in new liabilities for directors and officers.
“Not understanding your new risks, your exposure and whether you have cover under an indemnity or insurance could prove to be a very expensive mistake,” warns Jocelyn Kellam, a partner at Clayton Utz.
She says a director or manager could already be disqualified for breaching some parts of the Trade Practices Act 1974 (TPA), which has now been renamed the Competition and Consumer Act 2010.
ASX 100 companies continued to disclose underlying profits in addition to their statutory profits last year despite the improving economic environment.
KPMG’s Underlying profits report FY10 found that 83 per cent of companies reported underlying profit figures – exactly the same percentage as in 2009 and slightly above the 81 per cent observed in 2008.
But in 2010, 72 per cent of companies reported an underlying profit figure higher than their statutory profit figure, down from 76 per cent in 2009. And, statutory profits rose at a significantly higher rate – by 60 per cent over the 2009 figures. In contrast, underlying profits only grew by 17 per cent.
Directors of listed companies are advised to check whether their companies have lodged their securities dealing policies with the Australian Securities Exchange (ASX) and whether these are compliant with new ASX listing rules, which came into effect on 1 January 2011.
Listed companies have been slow in lodging their policies. Earlier this month, the Australian Financial Review reported that 149 companies had yet to lodge their policies. But according to the ASX, only about 66 policies were outstanding towards the end of last week and many of theserelated to entities whose securities are suspended (for reasons unrelated to trading policies).
Uncertainty about the James Hardie case continues for directors following news that the Australian Securities and Investments Commission (ASIC) has applied for special leave to appeal the latest decision on the matter.
In December, the NSW Court of Appeal overturned a NSW Supreme Court ruling, which found that seven former James Hardie Industries directors misled the Australian Securities Exchange (ASX) about the company’s ability to fund asbestos claims.
At that time, the Australian Institute of Company Directors noted that the NSW Court of Appeal’s overturning of previous findings highlighted the strength of Australia’s legal system and the value of having an independent judiciary and system of appeals.
Nearly 60 per cent of the world’s economies have made significant business regulatory changes to ease paying taxes despite the effects of the economic downturn and the sluggish global recovery, a new global study has found.
Paying Taxes 2011, a report by PricewaterhouseCoopers, the World Bank and the International Finance Corporation, examined 183 economies and discovered that in the past year, 40 economies made it easier to pay taxes, with Tunisia improving the most. Australia, however, ranked number 48 in terms of the ease of paying taxes.
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