Total Compliance Solutions

Role of Professionals

Pavan Kumar Vijay

In providing

By

A famous quote…A famous quote…

Every RIGHT implies a RESPONSIBILITY;

Every OPPORTUNITY, an OBLIGATION;

Every POSSESSION, a DUTY.

- John D Rockefeller Jr. - 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

Management Perception 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 Role of Professionals

TO TO CHANGECHANGE

THE THE MINDSETMINDSET

To let management To let management understandunderstand

Outstanding 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, ADELPHIA, TYCO

…Only the culture of Strict adherence to Good

Governance can keep a company

Ahead on sustainable basis

Example – INFOSYS, MICROSOFT, RANBAXY, DABUR

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 To made management realize realize

GOOD GOOD GOVERNANCEGOVERNANCE

is the process is the process

to convert to convert

Your Your CUSTOMER CUSTOMER

into into

Your Your SALES PERSONSALES PERSON

Designing Designing effective & user friendly effective & user friendly

COMPLIANCE MANAGEMENT COMPLIANCE MANAGEMENT SYSTEMSYSTEM

to lay down strong to lay down strong foundation for foundation for GOOD GOOD

GOVERNANCEGOVERNANCE

IMPLEMENTING IMPLEMENTING EFFECTIVE EFFECTIVE

COMPLIANCE COMPLIANCE MANAGEMENT MANAGEMENT

SYSTEMSYSTEM

Professional need to

Analyze & Understand

Different Corporate Structures 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 Different Scale of OperationsOperations

SMALLSCALE

MEDIUM

SCALE

LARGE

SCALE

Different Industries 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

Management Structure Management Structure & Information Flow& Information Flow

COMPANY POLICIESCOMPANY 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 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 POLICIESCOMPANY 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

Preparation for Preparation for ImplementingImplementing

Compliance Management Compliance Management SystemSystem

factual information factual information collection collection

- Company’s History & Background- Company’s History & Background

- Capital Structure & Evolution- Capital Structure & Evolution

- Promoters & Group Companies- Promoters & Group Companies

- Management & Administration - Management & Administration buildupbuildup

- Financial Soundness & Debt - Financial Soundness & Debt StructureStructure

- Risk Management & Protection - Risk Management & Protection

- Licenses & Approvals - Licenses & Approvals

- Outstanding Litigations - Outstanding Litigations

compliance reporting compliance reporting coveragecoverage

- Company law- Company law

- Securities laws - Securities laws

- Taxation laws - Taxation laws

- Industry Laws- Industry Laws

- labour Laws- labour Laws

- Environmental laws - Environmental laws

- IPR Laws - IPR Laws

- Sector Specific Laws- Sector Specific Laws

- Area/State Specific Laws - Area/State Specific Laws

identifying compliance identifying compliance timings timings

Compliance Timings

Fixed / Regular Event Based

Fixing Compliance Fixing Compliance Hierarchy Hierarchy

Compliance Manager

Zonal Head

Area Head

Factory Head

Departments Head

Wings Officers

Compliance Management Compliance Management Tools Tools

Checklists

Date wiseAct wise

Compliance Management Compliance Management Tools Tools

Software

triggering information input

triggering date & time

Information input trigger Information input trigger point point

• Organisation typeOrganisation type• Capital deployedCapital deployed• Business typeBusiness type• Product profile Product profile • Number of employees / LabourNumber of employees / Labour• Location/area of the plantLocation/area of the plant• Emission of waste Emission of waste • Income earned Income earned

Making IT Tools works Making IT Tools works as your Compliance as your Compliance

Manager Manager Demo of Compliance Management Software

IMPLEMENTING IMPLEMENTING EFFECTIVE EFFECTIVE

COMPLIANCE MANAGEMENT COMPLIANCE MANAGEMENT SYSTEMSYSTEM

A CASE STUDYA CASE STUDY

IT IT Industry Industry

specialty about industry specialty about industry • Confidentiality IssuesConfidentiality Issues

– Between client & companyBetween client & company– Between company & its employees Between company & its employees – Data confidentiality Data confidentiality

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

• IPRIPR• HRD AspectsHRD Aspects – – retention plans, ESOPSretention plans, ESOPS• RestructuringRestructuring – – amalgamation & amalgamation &

takeoverstakeovers• Export BenefitsExport Benefits - - STP, EOU, SEZ STP, EOU, SEZ

Legal Framework Legal Framework • General General

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

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

Bonus Gratuity – Act, Bonus Gratuity – Act, rules & regulations rules & regulations

• Specific Specific – Information Information

Technology Act 2000 Technology Act 2000 – Indian Contract Act, Indian Contract Act,

18721872– Technology Technology

Agreement Agreement – Joint Venture Joint Venture

Agreement Agreement – Custom RegulationsCustom Regulations– RBI CircularsRBI Circulars– Export – Import Export – Import

PolicyPolicy

Regulators Regulators • Companies Act – Companies Act – ROC, RD, CGROC, RD, CG• Labour Laws – Labour Laws – CommissionerCommissioner etc. etc.• IPR – IPR – RegistrarsRegistrars• FEMA – FEMA – RBI, FIPBRBI, FIPB• SEBISEBI – Listed Company – Listed Company• Local Laws - Local Laws - Sales Tax Sales Tax

CommissionerCommissioner, , Municipal Municipal CorporationCorporation

• Income tax officer / commissioner Income tax officer / commissioner • STP Units – STP Units – Director, STPIDirector, STPI

Compliance Management Compliance Management System System

TO COVER TO COVER • Companies ActCompanies Act – Meetings – board, AGMMeetings – board, AGM– Accounts / annual return filingsAccounts / annual return filings– Changes in constitution / managementChanges in constitution / management– Registration of chargesRegistration of charges

• Income TaxIncome Tax– TDS Deductions, payments, filing of TDS Deductions, payments, filing of

return return – Advance taxAdvance tax– Preparation of B/s & Filing of returnPreparation of B/s & Filing of return

• FEMAFEMA – FDI Procedures & disclosers – FDI Procedures & disclosers

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

gratuitygratuity• IPR IPR – – Registration, delegation & protectionRegistration, delegation & protection • SEBISEBI

– Disclosers, Corporate governanceDisclosers, Corporate governance– ESOP, insider trading bur back takeover ESOP, insider trading bur back takeover

etc.etc.• Local LawsLocal Laws

– Renew licences, maintain attendance, leave Renew licences, maintain attendance, leave recordsrecords

• STPSTP – filing of returns , Softex forms etc – filing of returns , Softex forms etc

Due diligence at regular Due diligence at regular interval to cross check the interval to cross check the

effectiveness of Compliance effectiveness of Compliance Management System Management System

• Different Types of Due DiligenceDifferent Types of Due Diligence– Business DD Business DD – Legal DDLegal DD– HR DDHR DD– Environmental DDEnvironmental DD– Systems DDSystems DD– Tax DDTax DD– Financial DDFinancial DD– Software Ownership DDSoftware Ownership DD

Being Updated Being Updated on Different on Different Compliances Compliances

Applicability & Applicability & Keep Keep

Management Management Informed Informed

Tools for updationTools for updation

• Newsletters & Magazines Newsletters & Magazines • Discussion e-GroupsDiscussion e-Groups• Software carried automatic Software carried automatic

updating options updating options • Attending seminars & workshopsAttending seminars & workshops• Newspapers & Business News Newspapers & Business News

Channels Channels • Regular visits at Authority’s website Regular visits at Authority’s website

Professional is like back bone Professional is like back bone

of any Compliance Management System of any Compliance Management System

to any organisation and with its to any organisation and with its

Proactive Approach & Intelligence Proactive Approach & Intelligence

make an organisation front runner in its make an organisation front runner in its field… field…

Thanking Thanking you you for for an an

Patient Patient Hearing Hearing