Today's CFOs vs Finance

A higher level of inquisitiveness to gain information about the overall scope of business and the ability to gauge its impact on the organization and the industry enables the CFO to understand the nuances of how to build a strategic partnership with the senior management of the organization.

SiliconIndia CFO summit brought together the experts to exchange notes. The Inaugural keynote session was initiated by Dr. Paritosh Basu, Group Controller, Essar "Implementation of IFRS and Ind AS - Implications on Corporate Governance" some of the important take over points are: Accounting and disclosures in India till today are substantially influenced by legal and regulatory framework, besides institutional framework. The debate on the issue whether good corporate governance is GAAP agnostic will continue over decades in future. However, professionals may get into a study to assess how the future will evolve and unfold with adoption of converged Ind AS for domestic purposes and IFRS for reporting to overseas investors. That institutional framework will attain supremacy over the legislated and regulatory frameworks, will be a definite conclusion from such a study. Again there will be shift towards risk based financial reporting practices with emphasis on substance over form.

It will bring in controversies if someone comments that presently there are some degree of shield, in the nature of protective confidentiality, available in requirements of limited disclosures within the realms of Schedule VI and accounting standards identified under Section 211(3C) of the Companies Act, 1956. But the spectrum of such reporting will substantially be expanded with inclusion of items like critical accounting judgments and estimates, financial risk management, capital management policies, reclassification of preference shares and compound instruments with equity elements, sensitivity analyses for interest rate, currency exchange rate, etc.

Amongst many, a few critical provisions on which the CFO and the board members will have to keep watchful eyes are the doctrine of indoor management while strategising capital structure; new business combinations; compliance of financial and non financial covenants including cross defaults, as included in agreements for borrowings, and the like. New provisions for accounting and disclosures, under the converged standards, will bring in their wake scopes for looking at a corporate house from the viewpoints of a combined economic entity instead of many standalones, as well as a going concern. Legacy issues in holding structures, potential voting rights, and defaults in covenant compliance, unless closely monitored and promptly addressed, may bring in serious repercussions.

Many such new disclosure requirements will by themselves take care of certain factors that influence corporate governance including issues and controversies associated with it. They will also strengthen certain attributes and facets of good governance. Controversies, associated with many such issues, will also be put to rest. Analysts, investors and other stakeholders will starve less for want of financial information.

All such new accounting and disclosures requirements will ensure more transparency and open many facets of a combined group of entities inside out. Thus it will be imperative on the part of the members of the audit committee and board of directors to involve themselves much more in formulating governance strategies, operating practices, etc. and monitor them through their oversight functions.

The first panel started with a discussion on "Evolving role of a CFO" by some of the industry experts Yunus Bookwala, VP Finance, Capgemini India Hariharan Iyer, Chief Financial Officer, APM Terminals Pipavav and Sumeet Ahluwalia , GM Finance, Steria being the moderator they discussed about What do today's CEOs expect from their CFOs' How can CFOs change to meet these expectations" How can CFOs help drive value in their organizations"

"Developing Effective Financial Risk Management Strategies In A Volatile Economy" was the second panel which had Sunil Sapre, CFO, Ceat says "Companies should have integrated risk management framework, which dovetails with internal audit and escalates issues based on impact and probability from individual manager for smaller issues to the Board of Directors for the highest risk issues. Have a robust forex policy and follow the same consistently".Hiranya Ashar, Chief Financial Officer, Rolta India and Hariprakash Pandey, V.P- Finance and Investor Relations, HDIL were also part of the panel discussion.

Rajarathnam Kannan, Head of Corporate Performance Management, Hinduja Group said that " Volataliity is going to be a continuing trend and this will be witnessed in Performance of Economies, Corporates and Asset Classes. Corporates have to prepare themselves for various scenarios and be ready for all situations. The organization and Financial Structure should be flexible and provide legroom for providing an Just In Time appropriate response to emerging realities". The panel was moderated by Anurag Jain, Business Head - GRC, MetricStream

The next keynote session on "Successfully Leveraging Capital Markets to Raise Funds" was by Jitendra Mehta, CFO,Cinemax India who spoke about how Maintaining a healthy level of capital is critical for organizational expansion and modernization and to enable organizations to respond to unforeseen circumstances. He also discussed about topics on Assessing channels to raise funds through the capital markets, The pros and cons of raising funds through IPOs ,Evaluating the activity and trends of the capital markets, Analyzing instruments used for raising capital bank debt, bonds, equities and mezzanine finance.

"Finance Strategies for Small and medium enterprises"-R Dogra, Managing Director, Care Ratings spoke in depth about the issues faced by senior finance executives at SMBs with a focus on innovative strategies and best practices applicable to small and midsize operations he also enlightened on how CFOs at small and midsize businesses (SMB) face some unique growth opportunities and challenges as they steer their companies into the future. We thank our sponsors MetricStream, Care Ratings, Expense OnDemand, Sodexo, TrustPlutus and Nouvasys for being part of the event.