Total Compliance Solutions

Role of Professionals

Pavan Kumar VijayPavan Kumar Vijay

In providing

By

A famous quote…

Every RIGHT implies a RESPONSIBILITY;

Every OPPORTUNITY, an OBLIGATION;

Every POSSESSION, a DUTY.

- John D Rockefeller Jr.

RESPONSIBILITYRESPONSIBILITY

OBLIGATIONOBLIGATION

DUTYDUTY

Compliance of Rules,

Regulations &

Laws of the Land

CORRESPONDS TO

Compliance of Rules, Regulations & Laws of the

Land

Good Corporate Governance

-The Institute of Company Secretaries of India

”Corporate Governance is the

application of bestmanagement

practices,compliance of law in letterand spirit and adherence to ethical standards

for effective management and distribution of wealth

and discharge of social responsibilityfor sustainable

development of all stakeholders”

Management Perception

Most of us can read

the writing on the wall;

We just assume it’s

addressed to someone else.

- Ivern Ball

Role of Professionals

TO TO CHANGECHANGE

THE THE MINDSETMINDSET

To let management understandOutstanding Performance,

Higher Profits,

Expanded Market Reach and the like

FAILS

to protect a company

which has put good governance & ethics

at the back burner…Example – ENRON, WORLDCOM

…Only the culture of

Strict adherence to Good Governance can keep a company

Ahead on sustainable basis

Example – INFOSYS, DABUR, TISCO, CIPLA

Transformation of

INDIVIDUALITY to PERSONALITY

Through PSYCHO-SOCIAL Evolution

“Tasmat Yogi Bhav, O Arjuna”

“Tasmat Yogi Bhav, O Arjuna”

Professional’s role to show the right way

Management deliberation/confusion

on right & wrong

To made management realize GOOD GOVERNANCE

is the process

to convert

Your CUSTOMER

into

Your BRAND AMBASSADOR

To made management cautiousabout ACCOUNTABILITY

which a company owes to

shareholders,

workers,

creditors,

customers,

government &

Other public at large

CHALLENGES BEFORE THE PROFESSIONALS

Designing effective & user friendly

COMPLIANCE MANAGEMENT SYSTEMto lay down strong foundation for

GOOD GOVERNANCE

IMPLEMENTING EFFECTIVE

COMPLIANCE MANAGEMENT SYSTEM

Statutory Obligations Clause 49 of listing agreement requires

compliance of all applicable laws Compliance Certificate require

confirmation to applicable norms Statutory /Tax audit confirming

standards laid down Proactive role played by independent

/nominee directors

Role of Professionals to be a Communication Channel

COMPANY POLICIES

OPERATIONAL PLANNING AND EXECUTION

DIR A DIR B DIR C DIR D DIR E

BOARD OF DIRECTORSBOARD OF DIRECTORS

CORPORATEPLANNING

LEGALFINANCE AND

ACCOUNTSHUMAN

RESOURCESCORPORATE

COMMUNICATIONPRODUCTION

AND OPERATIONSMARKETING

INFORMATION TECHNOLOGY

DEPARTMENTS IN A COMPANY

EXTERNAL STAKEHOLDERS

INVESTORSINVESTORS

GOVERNMENT AND REGULATORS

GOVERNMENT AND REGULATORS

SOCIETYSOCIETY

SUPPLIERSSUPPLIERS

CUSTOMERSCUSTOMERS

LENDERSLENDERS

Professionals to understand their role to

Coordinate between various departments and all stakeholders,

Ensure compliance of all applicable laws and

Develop mutual trust between various stakeholders

COMPANY POLICIES

OPERATIONAL PLANNING AND EXECUTION

DIR A DIR B DIR C DIR D DIR E

BOARD OF DIRECTORS

CORPORATEPLANNING

LEGALFINANCE AND

ACCOUNTSHUMAN

RESOURCESCORPORATE

COMMUNICATIONPRODUCTION

AND OPERATIONSMARKETING

INFORMATION TECHNOLOGY

DEPARTMENTS IN A COMPANY

EXTERNAL STAKEHOLDERSProfessional

INVESTORSINVESTORS

GOVERNMENT AND REGULATORS

GOVERNMENT AND REGULATORS

SOCIETYSOCIETY

SUPPLIERSSUPPLIERS

CUSTOMERSCUSTOMERS

LENDERSLENDERS

To work as Communica

tion Channel

Professional need to Analyze & Understand

Different Corporate Structures

Public SectorUndertakings

Private LimitedCompanies

Trusts And NGOs

Coop Societies And Producer Companies

Municipal Boards

Semi-governmentOrganisation

Unlisted PublicCompanies

Listed PublicCompanies

Different Scale of Operations

SMALLSCALE

MEDIUM

SCALE

LARGE

SCALE

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 AndFood Processing

Capital Goods

Drugs, Pharma And Healthcare

Banking And NBFC

Financial Services

Applicable Laws Applicability Factors

General / applicable on allBusiness Specific Industry Specific

Company LawTaxation Laws

Labour Laws Industry laws

Service

Trading

IT

Pharma

Manufacturing Textiles

Preparation for ImplementingCompliance Management System

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

Compliance Reporting Coverage- Company law- Securities laws - Taxation laws - Industry Laws- labour Laws- Environmental laws - IPR Laws - Sector Specific Laws- Area/State Specific Laws

Identifying Compliance Timings

Compliance Timings

Fixed / Regular Event Based

Fixing Compliance Hierarchy

Compliance Manager

Area Head

Factory Head

Departments Head

Process Incharge

Compliance Management Process

Checklists

Date wiseAct wise

Compliance Management Tools

Software

triggering information input

triggering date & time

IMPLEMENTING EFFECTIVE COMPLIANCE MANAGEMENT SYSTEM

A CASE STUDY

IT IT Industry Industry

specialty about industry Confidentiality Issues

Between client & companyBetween company & its employees Data confidentiality

Data Security – back up, disaster management & information recovery system.

IPR HRD Aspects – retention plans, ESOPS Restructuring – amalgamation & takeovers Export Benefits - STP, EOU, SEZ

Legal Framework General

Companies Act, 1956 Income Tax Act, 1961 Sales Tax Act, 1959 SEBI Act, 1992 Rules &

Regulations FEMA, 1999 Copyright Act, 1957 Patent Act, 1970 EPF & ESI Minimum Wages, Bonus

Gratuity – Act, rules & regulations

Specific Information Technology

Act 2000 Indian Contract Act, 1872 Technology Agreement Joint Venture Agreement Custom Regulations RBI Circulars Export – Import Policy

Regulators Companies Act – ROC, RD, CG Labour Laws – Commissioner etc. IPR – Registrars FEMA – RBI, FIPB SEBI – Listed Company Local Laws - Sales Tax Commissioner,

Municipal Corporation Income tax officer / commissioner STP Units – Director, STPI

Compliance Management System TO COVER Companies Act Meetings – board, AGMAccounts / annual return filingsChanges in constitution / managementRegistration of charges

Income TaxTDS Deductions, payments, filing of return Advance taxPreparation of B/s & Filing of return

FEMA – FDI Procedures & disclosers

Labour Laws Filing of return, Payment of dues like PF,

gratuity IPR – Registration, delegation & protection SEBI

Disclosers, Corporate governanceESOP, insider trading bur back takeover etc.

Local Laws Renew licences, maintain attendance, leave

records STP – filing of returns , Softex forms etc

Due diligence at regular interval to cross check the effectiveness of Compliance Management System

Different Types of Due DiligenceBusiness DD Legal DDHR DDEnvironmental DDSystems DDTax DDFinancial DDSoftware Ownership DD

Being Updated on Different Compliances Applicability & Keep Management Informed

Being updated Newsletters & Magazines

Chartered Secretary CA MagazineSEBI & Corporate Law Journal from Taxmann

Newspapers & Business News ChannelsET, FE, NDTV Profit, CNBC TV, IBN

Software carried automatic updating options Taxmann

Being Updated

Attending seminars & workshopsOrganized by ICSI, ICAI, CII, FICCI etc

Discussion e-GroupsCA ClubE-mindsCorps Club

Regular visits at Authority’s website SEBI, RBI, MCA, DIPP etc

Professional is like back bone

of any Compliance Management System

to any organisation and with its

Proactive Approach & Intelligence

make an organisation front runner in its field…

Thanking Youand all the best for implementing a sound and effective Compliance Management System for your organisation