Role of prof total compliance solution cii 18.08.06

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  • Those manning the boards will have to transform themselves by uplifting their individuality to personality through psyco-social evolution with imperative help from professionals.
  • It will make one a karma yogi for which sri krishna exhorted arjuna “tasmat yogi bhav, O arjuna” ( therefore be a yogi , arjuna), The yogi of srimad bagwat gita is not a religion. It is rather a comprehensive philosphy of human growth, development & fulfillment. It is towards the achievement of these higher ideals that the corporate Governance system has directed & puts relevant implementation model for the same.
  • It will make one a karma yogi for which sri krishna exhorted arjuna “tasmat yogi bhav, O arjuna” ( therefore be a yogi , arjuna), The yogi of srimad bagwat gita is not a religion. It is rather a comprehensive philosphy of human growth, development & fulfillment. It is towards the achievement of these higher ideals that the corporate Governance system has directed & puts relevant implementation model for the same.
  • Role of prof total compliance solution cii 18.08.06

    1. 1. Total Compliance Solutions Role of Professionals Pavan Kumar Vijay In providing By
    2. 2. A famous quote… <ul><li>Every RIGHT implies a RESPONSIBILITY ; </li></ul><ul><li>Every OPPORTUNITY, an OBLIGATION ; </li></ul><ul><li>Every POSSESSION, a DUTY . </li></ul><ul><li>- John D Rockefeller Jr. </li></ul>
    3. 3. RESPONSIBILITY OBLIGATION DUTY Compliance of Rules, Regulations & Laws of the Land CORRESPONDS TO
    4. 4. Compliance of Rules, Regulations & Laws of the Land Good Corporate Governance
    5. 5. <ul><li>The Institute of Company Secretaries of India </li></ul>” Corporate Governance is the adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility Corporate Governance application of best management practices, compliance of law in letter and spirit and for sustainable development of all stakeholders”
    6. 6. Management Perception <ul><li>Most of us can read </li></ul><ul><li>the writing on the wall; </li></ul><ul><li>We just assume it’s </li></ul><ul><li>addressed to someone else. </li></ul><ul><li>- Ivern Ball </li></ul>
    7. 7. Role of Professionals TO CHANGE THE MINDSET
    8. 8. To let management understand <ul><li>Outstanding Performance, </li></ul><ul><li>Higher Profits, </li></ul><ul><li>Expanded Market Reach and the like </li></ul><ul><li>FAILS </li></ul><ul><li>to protect a company </li></ul><ul><li>which has put good governance & ethics </li></ul><ul><li>at the back burner… </li></ul><ul><li>Example – ENRON, WORLDCOM </li></ul>
    9. 9. … Only the culture of Strict adherence to Good Governance can keep a company Ahead on sustainable basis Example – INFOSYS, DABUR, TISCO, CIPLA
    10. 10. Transformation of INDIVIDUALITY to PERSONALITY Through PSYCHO-SOCIAL Evolution
    11. 11. “ Tasmat Yogi Bhav, O Arjuna”
    12. 12. “ Tasmat Yogi Bhav, O Arjuna” Professional’s role to show the right way Management deliberation/confusion on right & wrong
    13. 13. To made management realize <ul><li>GOOD GOVERNANCE </li></ul><ul><li>is the process </li></ul><ul><li>to convert </li></ul><ul><li>Your CUSTOMER </li></ul><ul><li>into </li></ul><ul><li>Your BRAND AMBASSADOR </li></ul>
    14. 14. To made management cautious <ul><li>about ACCOUNTABILITY </li></ul><ul><li>which a company owes to </li></ul><ul><li>shareholders, </li></ul><ul><li>workers, </li></ul><ul><li>creditors, </li></ul><ul><li>customers, </li></ul><ul><li>government & </li></ul><ul><li>Other public at large </li></ul>
    15. 15. CHALLENGES BEFORE THE PROFESSIONALS
    16. 16. Designing effective & user friendly COMPLIANCE MANAGEMENT SYSTEM to lay down strong foundation for GOOD GOVERNANCE
    17. 17. IMPLEMENTING EFFECTIVE COMPLIANCE MANAGEMENT SYSTEM
    18. 18. Statutory Obligations <ul><li>Clause 49 of listing agreement requires compliance of all applicable laws </li></ul><ul><li>Compliance Certificate require confirmation to applicable norms </li></ul><ul><li>Statutory /Tax audit confirming standards laid down </li></ul><ul><li>Proactive role played by independent /nominee directors </li></ul>
    19. 19. Role of Professionals to be a Communication Channel
    20. 20. <ul><li>COMPANY POLICIES </li></ul>OPERATIONAL PLANNING AND EXECUTION BOARD OF DIRECTORS CORPORATE PLANNING LEGAL FINANCE AND ACCOUNTS HUMAN RESOURCES CORPORATE COMMUNICATION PRODUCTION AND OPERATIONS MARKETING INFORMATION TECHNOLOGY DEPARTMENTS IN A COMPANY EXTERNAL STAKEHOLDERS INVESTORS GOVERNMENT AND REGULATORS SOCIETY SUPPLIERS CUSTOMERS LENDERS DIR A DIR B DIR C DIR D DIR E
    21. 21. Professionals to understand their role to <ul><li>Coordinate between various departments and all stakeholders, </li></ul><ul><li>Ensure compliance of all applicable laws and </li></ul><ul><li>Develop mutual trust between various stakeholders </li></ul>
    22. 22. <ul><li>COMPANY POLICIES </li></ul>OPERATIONAL PLANNING AND EXECUTION BOARD OF DIRECTORS CORPORATE PLANNING LEGAL FINANCE AND ACCOUNTS HUMAN RESOURCES CORPORATE COMMUNICATION PRODUCTION AND OPERATIONS MARKETING INFORMATION TECHNOLOGY DEPARTMENTS IN A COMPANY EXTERNAL STAKEHOLDERS Professional To work as Communication Channel DIR A DIR B DIR C DIR D DIR E INVESTORS GOVERNMENT AND REGULATORS SOCIETY SUPPLIERS CUSTOMERS LENDERS
    23. 23. Professional need to Analyze & Understand
    24. 24. <ul><li>Different Corporate Structures </li></ul>Public Sector Undertakings Private Limited Companies Trusts And NGOs Coop Societies And Producer Companies Municipal Boards Semi-government Organisation Unlisted Public Companies Listed Public Companies
    25. 25. Different Scale of Operations SMALL SCALE MEDIUM SCALE LARGE SCALE
    26. 26. Different Industries Media And Entertainment Infrastructure, Power And Telecom IT Solutions IT Enabled Services And BPO Textiles Tourism And Hotel Capital Market And Its Intermediaries Engineering and Construction FMCG Agriculture And Food Processing Capital Goods Drugs, Pharma And Healthcare Banking And NBFC Financial Services
    27. 27. Applicable Laws Applicability Factors General / applicable on all Business Specific Industry Specific Company Law Taxation Laws Labour Laws Industry laws Service Trading IT Pharma Manufacturing Textiles
    28. 28. Preparation for Implementing Compliance Management System
    29. 29. Factual Information Collection - Company’s History & Background - Capital Structure & Evolution - Promoters & Group Companies - Management & Administration buildup - Financial Soundness & Debt Structure - Risk Management & Protection - Licenses & Approvals - Outstanding Litigations
    30. 30. Compliance Reporting Coverage <ul><li>- Company law </li></ul><ul><li>- Securities laws </li></ul><ul><li>- Taxation laws </li></ul><ul><li>- Industry Laws </li></ul><ul><li>- labour Laws </li></ul><ul><li>- Environmental laws </li></ul><ul><li>- IPR Laws </li></ul><ul><li>- Sector Specific Laws </li></ul><ul><li>- Area/State Specific Laws </li></ul>
    31. 31. Identifying Compliance Timings Compliance Timings Fixed / Regular Event Based
    32. 32. Fixing Compliance Hierarchy Compliance Manager Area Head Factory Head Departments Head Process Incharge
    33. 33. Compliance Management Process Checklists Date wise Act wise
    34. 34. Compliance Management Tools Software triggering information input triggering date & time
    35. 35. IMPLEMENTING EFFECTIVE COMPLIANCE MANAGEMENT SYSTEM A CASE STUDY IT Industry
    36. 36. specialty about industry <ul><li>Confidentiality Issues </li></ul><ul><ul><li>Between client & company </li></ul></ul><ul><ul><li>Between company & its employees </li></ul></ul><ul><ul><li>Data confidentiality </li></ul></ul><ul><li>Data Security – back up, disaster management & information recovery system. </li></ul><ul><li>IPR </li></ul><ul><li>HRD Aspects – retention plans, ESOPS </li></ul><ul><li>Restructuring – amalgamation & takeovers </li></ul><ul><li>Export Benefits - STP, EOU, SEZ </li></ul>
    37. 37. Legal Framework <ul><li>General </li></ul><ul><ul><li>Companies Act, 1956 </li></ul></ul><ul><ul><li>Income Tax Act, 1961 </li></ul></ul><ul><ul><li>Sales Tax Act, 1959 </li></ul></ul><ul><ul><li>SEBI Act, 1992 Rules & Regulations </li></ul></ul><ul><ul><li>FEMA, 1999 </li></ul></ul><ul><ul><li>Copyright Act, 1957 </li></ul></ul><ul><ul><li>Patent Act, 1970 </li></ul></ul><ul><ul><li>EPF & ESI </li></ul></ul><ul><ul><li>Minimum Wages, Bonus Gratuity – Act, rules & regulations </li></ul></ul><ul><li>Specific </li></ul><ul><ul><li>Information Technology Act 2000 </li></ul></ul><ul><ul><li>Indian Contract Act, 1872 </li></ul></ul><ul><ul><li>Technology Agreement </li></ul></ul><ul><ul><li>Joint Venture Agreement </li></ul></ul><ul><ul><li>Custom Regulations </li></ul></ul><ul><ul><li>RBI Circulars </li></ul></ul><ul><ul><li>Export – Import Policy </li></ul></ul>
    38. 38. Regulators <ul><li>Companies Act – ROC, RD, CG </li></ul><ul><li>Labour Laws – Commissioner etc. </li></ul><ul><li>IPR – Registrars </li></ul><ul><li>FEMA – RBI, FIPB </li></ul><ul><li>SEBI – Listed Company </li></ul><ul><li>Local Laws - Sales Tax Commissioner , Municipal Corporation </li></ul><ul><li>Income tax officer / commissioner </li></ul><ul><li>STP Units – Director, STPI </li></ul>
    39. 39. Compliance Management System TO COVER <ul><li>Companies Act </li></ul><ul><ul><li>Meetings – board, AGM </li></ul></ul><ul><ul><li>Accounts / annual return filings </li></ul></ul><ul><ul><li>Changes in constitution / management </li></ul></ul><ul><ul><li>Registration of charges </li></ul></ul><ul><li>Income Tax </li></ul><ul><ul><li>TDS Deductions, payments, filing of return </li></ul></ul><ul><ul><li>Advance tax </li></ul></ul><ul><ul><li>Preparation of B/s & Filing of return </li></ul></ul><ul><li>FEMA – FDI Procedures & disclosers </li></ul>
    40. 40. <ul><li>Labour Laws </li></ul><ul><ul><li>Filing of return, Payment of dues like PF, gratuity </li></ul></ul><ul><li>IPR – Registration, delegation & protection </li></ul><ul><li>SEBI </li></ul><ul><ul><li>Disclosers, Corporate governance </li></ul></ul><ul><ul><li>ESOP, insider trading bur back takeover etc. </li></ul></ul><ul><li>Local Laws </li></ul><ul><ul><li>Renew licences, maintain attendance, leave records </li></ul></ul><ul><li>STP – filing of returns , Softex forms etc </li></ul>
    41. 41. Due diligence at regular interval to cross check the effectiveness of Compliance Management System <ul><li>Different Types of Due Diligence </li></ul><ul><ul><li>Business DD </li></ul></ul><ul><ul><li>Legal DD </li></ul></ul><ul><ul><li>HR DD </li></ul></ul><ul><ul><li>Environmental DD </li></ul></ul><ul><ul><li>Systems DD </li></ul></ul><ul><ul><li>Tax DD </li></ul></ul><ul><ul><li>Financial DD </li></ul></ul><ul><ul><li>Software Ownership DD </li></ul></ul>
    42. 42. Being Updated on Different Compliances Applicability & Keep Management Informed
    43. 43. Being updated <ul><li>Newsletters & Magazines </li></ul><ul><ul><li>Chartered Secretary </li></ul></ul><ul><ul><li>CA Magazine </li></ul></ul><ul><ul><li>SEBI & Corporate Law Journal from Taxmann </li></ul></ul><ul><li>Newspapers & Business News Channels </li></ul><ul><ul><li>ET, FE, NDTV Profit, CNBC TV, IBN </li></ul></ul><ul><li>Software carried automatic updating options </li></ul><ul><ul><li>Taxmann </li></ul></ul>
    44. 44. Being Updated <ul><li>Attending seminars & workshops </li></ul><ul><ul><li>Organized by ICSI, ICAI, CII, FICCI etc </li></ul></ul><ul><li>Discussion e-Groups </li></ul><ul><ul><li>CA Club </li></ul></ul><ul><ul><li>E-minds </li></ul></ul><ul><ul><li>Corps Club </li></ul></ul><ul><li>Regular visits at Authority’s website </li></ul><ul><ul><li>SEBI, RBI, MCA, DIPP etc </li></ul></ul>
    45. 45. <ul><li>Professional is like back bone </li></ul><ul><li>of any Compliance Management System </li></ul><ul><li>to any organisation and with its </li></ul><ul><li>Proactive Approach & Intelligence </li></ul><ul><li>make an organisation front runner in its field… </li></ul>
    46. 46. Thanking You and all the best for implementing a sound and effective Compliance Management System for your organisation

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