Post on 09-Apr-2018
The global financial crisis has led to an
intense debate on the adequacy of
corporate governance regulations and
practices the world over. In developed
markets such as US and UK, the tax payers’
money has been used to bail out tainted
corporations that were on the verge of
extinction.
In India, we faced a corporate governance
challenge of a different nature in the
aftermath of the Satyam episode – that of
promoter-induced frauds. The question that
has since kept cropping up is whether there
are more skeletons in the closet.
In the context of debating corporate
governance failures and corporate frauds, a
lot of questions have been raised about the
effectiveness of independent directors and
auditors. Regulators, particularly in the UK
and US have responded to public pressure
and pressure from shareholder activists by
strengthening regulations. Some of these
regulations have cast tremendous duties
and responsibilities on the non-executive
directors. The UK has even gone to the
extent of prescribing a new governance
code for leading audit firms. But it is also
important to look at the role of
promoters/executives in ensuring good
governance and consider how the lines
should be drawn in terms of the
responsibilities of the board and that of
management.
More regulations may inevitably lead to
more ‘box ticking’, as past experiences tell
us. Corporate governance is an extension of
the overall governance eco-system and
hence cannot be viewed in isolation. It is
important to therefore look at the entire
value chain comprising regulators,
shareholders, employees, rating agencies
and consumers and introspect where the
improvement levers lie.
Foreword
Deepankar SanwalkaCo-Chairman, ASSOCHAM Expert Committeeon Corporate Fraud and Internal Audit andHead, Risk and Compliance Group, KPMG in India
Shri D. S. Rawat Secretary General ASSOCHAM
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
The relevance of good Corporate Governance 01
Managing stakeholder expectations 04
Weak governance is a pre-cursor to a heightened risk of fraud 06
Financial statement fraud is a major concern 07
Bribery and corruption 08
Emerging fraud risks 09
Addressing today’s challenges in corporate governance and fraud 10
Improving corporate governance holistically 10
Strong and objective Internal Audit function 12
Pro-active approach to Fraud Risk Management 14
Effective whistle-blowing systems and processes 15
Conclusion 16
Table of contents
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
A key aspect that is being debated in the corridors of India Inc. is
whether we need major regulatory changes to improve corporate
governance, or whether improved standards of corporate governance
could be achieved through adoption of principle-based standards
underpinned by greater levels of transparency and disclosures. But there
is also the question – are we mature enough to move to a principle-
based approach?
“Corporate Governance isconcerned with holding thebalance between economic andsocial goals and betweenindividual and communal goals.The corporate governanceframework is there to encouragethe efficient use of resources andequally to require accountabilityfor the stewardship of thoseresources. The aim is to align asnearly as possible the interests ofindividuals, corporations andsociety.”
Sir Adrian Cadbury in'Global CorporateGovernance Forum', WorldBank, 2000
Source:
http://www.corpgov.net/library/library.html -
December 2008
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
1
The relevance of goodCorporate Governance
When one views the corporate landscape in
India, we see that many large Indian
businesses continue to be owner managed.
The term ‘promoter’ is a very Indian
concept and typically, one is accustomed to
associate the term ’promoter’ with family-
managed businesses where the founding
shareholders are also actively involved in
managing the affairs of the business.
The definition of the term ’promoter’ can
also be widened to include multi-national
companies in India where the parent
organization is based overseas but has
significant influence and control over the
operations. Similarly in public sector units,
the government as a majority shareholder
influences policy, strategy and decision
making. In developed markets such as the
US and UK, strong prevalence of
institutional activism driven by pension
funds has helped ensure that post-listing,
ownership and management are distinct
and in separate hands.
Source: KPMG’s Corporate Governance Poll 2009
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
2
Point of view
Shareholder activism in India is at a nascent stage and comes to the fore only in instances where institutional
investors holding a significant stake are in a position to question the quality of corporate governance. As
minority shareholders may not have a complete understanding of their rights or the avenues through which
these rights could be exercised, increased activism from institutional shareholders and reinforcing the role of
independent directors on the board is critical to enhancing good corporate governance.
Hence, there are bound to be justifiable
concerns whether the decisions and actions
of the promoters (family, government, multi-
national companies) are in the best
interests of the minority shareholders.
While many promoter-driven businesses
have been very successful and generated
tremendous returns for shareholders
financially, it is important for promoters to
make decisions in the best interest of the
wider stakeholder group encompassing
employees, shareholders, regulators,
customers, partners and the communities.
Once a company has accessed the capital
markets for funds and has benefited from
the higher profile that inevitably flows from
being a public listed company, it is bound to
abide by a different set of rules which
requires it to exhibit more responsible
behavior and greater levels of transparency
in its dealings with a diverse group of
stakeholders. This is also essential to
ensure that the minority shareholder
interests are not compromised due to lack
of adequate oversight, scrutiny and
disclosures.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
3
Point of view
The Ministry of Corporate Affairs (MCA) has proposed the New Companies Bill which aims to improve
corporate governance by vesting greater powers in shareholders. Additionally the proposed Companies Bill
heralds an era of shareholder democracy through an emphasis on self regulation, minimization of regulatory
approvals and, increased and more transparent disclosures.
Managing stakeholderexpectations
Corporate governance should be seen as a
tool to strike the right balance by
supplementing an entrepreneurial approach
with greater professionalism, rather than as
stringent rules that are ‘policed’ across. It is
important to provide a certain level of
independence and flexibility so as to allow
companies to abide by the regulations that
have been put in place.
Governance regulations may beadequate but governance practicesmay not be in tune with stakeholderexpectations
The existing Clause 49 of the SEBI Listing
Agreement and ensuing Companies Bill
legislations do cover the fundamentals of
effective corporate governance where India
compares favorably with many other
developing and Asian economies as far as
the adequacy of corporate governance
regulations are concerned.
Improved corporate governance, however,
does not solely rest on control through
increased regulations. What is required is a
principle-based approach developed on
fundamentals preventing moral fragility that
is enforced through pragmatic levels of
regulations.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
4
Source: KPMG’s Corporate Governance Poll 2009
Source: KPMG’s Corporate Governance Poll 2009
Point of view
The MCA recently released the voluntary guidelines on corporate governance. Loosely modelled on the UK
Combined Code, the guidelines are drawn from best practices. Although voluntary in nature, listed
companies are required to consider the implementation of these guidelines and be pro-active in disclosing
the extent of their compliance. These guidelines provide a great opportunity to corporate India to up the ante
on corporate governance and also express their views to the MCA on those guidelines that are not
implementable. Clearly the choice is firmly with India Inc in terms of transparency versus obfuscation.
Use the MCA voluntaryguidelines as an opportunity totake stock of the adequacy ofthe company’s governancepractices
Corporate governance should be practiced
through a mix of principle-based standards
and moderate regulations. Also, while
regulations are important, there is need for
stronger regulatory review mechanisms.
One of the biggest risks to corporate
governance in India are the weak oversight
and monitoring mechanisms currently in
place.
Also strengthening punitive provisions
within existing governance laws and
improving the track record in prosecuting
non-compliance with regulatory
requirements are areas where
policy/lawmakers need to raise the bar.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
5
Weak governance is a pre-cursor to heightened riskof fraud
Effective regulatory enforcement,
independent and empowered boards,
strong and objective risk and assurance
functions and an entity wide commitment
to and monitoring of ethical parties are the
cornerstones of effective corporate
functioning. It is important for organizations
to develop a value system that takes into
account all of the above and then tailors
their governance structures and processes
to put this value system into operation.
Even if one element goes missing, it could
lead to and become a precursor to fraud.
Rather than merely equating good
governance to immediate short term
financial performance, it is important to
identify how good corporate governance
can be a key driver of performance,
reputation, compliance and aspiration.
High fraud risk areas
Volatile economic conditions coupled with
increasing business and technological
complexities have led to increased
opportunities for fraud. Organizations have
to constantly deal with fraud and
compliance challenges in today’s business
environment. Not surprisingly, the recently
launched Fraud Survey Report 2010 clearly
highlights that the incidence of fraud is
rising thereby indicating that India Inc needs
to deal with fraud risks firmly. Supply chain
fraud (procurement, distribution and
revenue leakage) is the single most
exposed area. Weak internal control
systems, eroding ethical values and a
reluctance on the part of the line managers
to take decisive action against the
perpetrators are cited as the most vital
underlying reasons for fraud being on the
rise.
75%
Fraud in corporate India is onthe rise
54%
Fraud is on the rise withintheir industry
45%
Fraud (suspected and actual)has increased within theirorganizations
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
6
Financial statement fraud is a major concern
Considering the current economic environment, financial statement fraud is a major area of
concern. A desire to achieve/exceed targets and earnings of senior executives linked to
financial performance are the reasons for senior management involvement in such frauds.
Ineffective whistle-blowing systems, lack of objective and independent Internal Audit (IA)
functions with forensic skills, inadequate oversight of senior management activities by the
audit committee and weak regulatory environment are the reasons for growing worries in
respect of financial statement fraud.
81%
Financial statement fraud is amajor issue
63%
Desire to meet / exceedmarket expectations themost significant reason tocommit financial statementfraud
62%
Disagree that strictdisciplinary actions areimposed for cases involvingfinancial statement fraud
Source: KPMG in India’s Fraud Survey 2010
Source: KPMG in India’s Fraud Survey 2010
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
7
Bribery and corruption
Corruption is a serious offense, often not
appropriately recognized by many
organizations. The World Bank has
estimated that, globally, bribes paid each
year amount to over USD 1 trillion. Bribery
and Corruption is on the risk radar of
governments, regulators, law enforcement
agencies and businesses worldwide. With
the increase in public scrutiny of
multinational organizations, it is pertinent for
companies to adopt essential controls to
mitigate the risk of corruption.
Bribery and corruption in India is more
prevalent in seeking routine regulatory
approvals and to win new business from
prospective clients. Despite the presence of
anti-corruption laws, weak regulatory
enforcement has contributed to the current
impasse. With Indian companies going
global, we see an increasing trend of Indian
companies pro-actively taking measures to
adhere to international anti-bribery
laws/regulations (e.g.: Foreign Corrupt
Practices Act) and strengthening their code
of business ethics at the board and senior
management levels to regulate dealings
with external stakeholders.
37%
Bribes are mostly paid to getroutine administrativeapprovals from Government
38%
Bribery an integral feature ofindustry practices
56%
Tone at the top critical tocombat bribery andcorruption
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
8
Emerging fraud risks
Whilst supply chain, financial statement and
bribery and corruption are likely to continue
to dominate the fraud horizon, the following
types of frauds could pose a higher risk in
the coming years:
• Intellectual property fraud
• E-commerce and computer related fraud.
Despite the apparent awareness of the risks
posed by a multitude of fraud types,
organizations tend to focus more on the
adequacy of controls mitigating financial
frauds with considerably lesser focus on
anti-fraud programs and controls to mitigate
non-financial fraud risks. Organizations are
ill-equipped to deal with these emerging
fraud areas.
Industry Segments
Types of Frauds
FinancialStatement
Fraud*
Bribery andCorruption*
IP Fraud* E-Crime* SupplyChainFraud*
Consumer Markets 3 2 2 1 1
Information, Communication &Entertainment
3 1 1 2 1
Real Estate &InfrastructureFinancial Services
3 1 1 1 1
Financial Services 2 2 1 1 1
Industrial Markets 3 1 1 1 1
*Degree of adequacy depicted by “Harvey Balls” based on score: 95-100: 1; 75-94: ¾; 50-74: ½; 25-49: ¼; < 25: 0. Scoreindicates the percentage of survey respondents who rated their control measures for the aforementioned fraud types as“adequate”.
Adequacy of controls
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
9
Addressing today’schallenges in corporategovernance and fraud
Improving corporate governance holistically
1. Managing governance structures and processes to drive
performance
• A diverse, competent and independent board is a critical
resource to address the company’s growth-related challenges
and to align company goals and objectives to long-term
shareholder interests. Presence of independent directors on
the board can also provide a structure to deal with disputes
and thus helps resolve issues and bring balance to decisions. It
is true that promoter-appointed independent directors do not
challenge the promoter’s decisions. Therefore, it is important to
establish formal processes for appointing executive and non-
executive directors. Adopting a formal process that involves
the use of specialist human capital advisors to map company’s
strategic priorities with skills required at the board level is a
good way of having a diverse group of directors who can add
value. An environment of constructive challenge and dissent in
the board room is vital if it ultimately results in a better
strategy
• Establish clear roles and responsibilities for the board and
management as a whole and put in place robust induction
processes to maximize non-executive director (NED) input. It is
also vital for promoters to put in place structures for NED
interaction outside the regular board meetings because the
promoters and the organization as a whole stands to gain from
these discussions
• The subject of CEO and board chair segregation has been a
contentious one in the Indian context. Many Indian promoters
look at it as a way of boards becoming more powerful in the
way the organization is run. In many Indian companies where
the CEO/Managing Director is not the chairman of the board, a
closer examination is likely to reveal that the non-executive
chairman of the board is usually the ex-CEO or the founding
promoter. Promoters should be more receptive to the idea of
having a non-executive board chair outside the promoter club.
If the expectations from and role of the board chair is clearly
defined, this practice can actually yield dividends. Non-
Executive board chairs can take on the role of mentoring
promoters and CEOs on strategy and help them deal with
growing complexities in business by offering advice and
external perspectives. An empowered board chair can actually
get more out of his other NED colleagues, bring to the issue a
wider range of issues that represent the concerns of
stakeholders and as a result enhance the dynamics of board
functioning. Additionally, such a practice is likely to be viewed
favorably by the investor community and stakeholders
• Exposure of company senior executives to other
companies’ boards as NEDs could help develop the horizons
of senior executives and develop the leadership gene pool for
meeting future challenges. It is also a great way for promoters
to expose their senior personnel to external challenges and
motivating people to stay with the organization. Unfortunately,
very few Indian companies adopt these practices
• Make the board responsible for CEO performance
evaluation – although this may result in the CEO reporting to
the board, this process also has its benefits in terms of
improving the CEO’s performance and having the board taking
a more hands-on role in terms of mentoring the CEO
• Compensate NEDs well – to do all of the above, it is
imperative that promoters compensate their NEDs well. It is
important to have a balance of fixed and variable pay and
introduce an objective process of board evaluation facilitated
by external experts.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
10
2. Succession planning
As promoter-driven businesses introduce second generation
family members into their business, they often face the challenge
of smoothly transitioning the next generation into the business.
This involves creating an environment where family managers
and professional managers can co-exist and work together to
achieve the chosen objectives. The right time to induct
professional managers in the business is also an important
aspect as the next generation may not be yet ready to assume
critical senior management roles. This is easier said than done
and warrants attention which explains the importance of
succession planning. Developing transparent human capital
processes where professional managers do not feel insecure is
essential. However difficult the exercise may be, the
consequences of not having a succession plan for the CEO may
be extremely damaging for the business. Additionally, aspects
such as attracting the right talent, incentivising professional
managers, adequate delegation of authority and grooming
second and third generation family managers in the company of
professionally qualified managers need to be considered. These
are areas where the promoter together with the NEDs on the
board should be actively involved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
11
Strong and objective IA functionto support boards in theiroversight priorities
Corporate frauds, governance failures,
regulatory scrutiny and globalization have all
contributed to an increased focus on the IA
function and the role it plays in enabling the
board achieve its oversight objectives. There
is considerable re-thinking on IA’s role in
terms of how it can successfully make the
transition from value preservation to value
creation. This has led to a paradigm shift in
expectations from IA today compared to
what it was a few years ago.
With IA roles becoming increasingly broad
based, IA’s reporting relationship and its
communication with the board/audit
committee needs to improve in order to
provide it with the independence it needs.
In many Indian companies, management
continues to play a key role in oversight of
the IA function.
Source: KPMG in India and BSE’s Internal Audit Survey 2009
Point of view
Enhancing Independence of IA
• The head of IA should have clear authority to communicate directly and on their initiative to the board and
members of the Audit Committee (AC). For instance, head of IA should meet privately with the board / AC
without the presence of management. This should reinforce the independence and direct nature of the
reporting relationship
• The reporting line should facilitate open and direct communications with the CEO, the senior executive
group and line management
• The board / AC should have the final authority to review and approve the annual audit plan
• The board / AC should also review the performance of the head of IA and the overall internal audit function
at least once a year, and approve the compensation levels for head of IA.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
12
Source: KPMG in India and BSE’s Internal Audit Survey 2009
Point of view
Continuous Auditing and Continuous Monitoring
Transforming IA and Management Monitoring to create value
The economic crisis clearly
demonstrates that changes are often
fast and dramatic, and that there is a
real need for management and directors
to understand the velocity of risk—the
speed at which an emerging risk can be
manifested and have a catastrophic
impact on the business. In this
environment, management should
assess the company’s critical
alignments (strategy, goals, risks,
incentives, performance measures and
internal controls) on a regular, frequent
basis; annual or semi-annual
assessments may not be adequate.
Many have begun to advance their efforts by implementing Continuous Auditing (CA) and Continuous Monitoring
(CM) disciplines around their organizational processes, transactions, systems, and controls. Leveraging proactive,
technology-based applications to manage performance and key areas of risk and control has become a practical and
necessary alternative to meet the growing needs of the organization. Together, CA and CM offer a broad range of
benefits that can help organizations add value and improve business performance. CA/CM can deliver regular insight
into the status of controls and transactions across the global enterprise, enhancing risk and control oversight
capability through monitoring and detection.
Recent events in corporate India have put the spotlight on fraud risk. Audit committees are
expecting more from IA in the area of fraud risk assessment and monitoring. However, a
shortage of specialist skills, low level of skills and confidence in the use of technology and
analytics and the relative lack of independence for IA are factors impeding IA effectiveness
in fraud risk monitoring.
Source: KPMG in India and BSE’s Internal Audit Survey 2009
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
13
Pro-active approach to fraud riskmanagement
The key to preventing fraud is to understand
the ways in which it can affect a company,
and introduce controls to recognise and
prevent it from occurring. Strong
governance practices and a structured Fraud
risk management process assists
organizations in identifying and addressing
potential fraud risks that could have a major
impact on the company.
A comprehensive assessment of fraud risks
is essential for the management to gain
knowledge on critical risk factors and deploy
appropriate controls to avoid losses.
Perhaps because of the buoyant regional
economies, management of fraud risk was
not hitherto at the top of the agenda. The
increase in frauds and adverse reputation
consequences that come in its wake makes
it imperative that organizations adopt a
proactive approach to fraud risk
management.
An effective, business-driven fraud and
misconduct risk management approach is
one that is focused on three objectives:
• Prevention: controls designed to reduce
the risk of fraud and misconduct from
occurring in the first place
• Detection: controls designed to discover
fraud and misconduct when it occurs
• Response: controls designed to take
corrective action and remedy the harm
caused by fraud or misconduct.
Source: KPMG in India’s Fraud Survey 2010
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
Prevention Detection Response
Board/audit committee oversight Executive and line management functions Internal audit, compliance andmonitoring functions
• Fraud and misconduct risk
assessment
• Code of conduct and related
standards
• Employee and third-party due
diligence
• Communication and training
• Process-specific fraud risk
controls
• Hotlines and whistle-blower
• Auditing and monitoring
• Proactive forensic data analysis
• Internal investigations protocols
• Enforcement and accountability
protocols
• Disclosure protocols
• Remedial action protocols
Source: KPMG in India’s Fraud Survey 2010
14
A whistle-blowing system should also take
the role of an internal auditor into account
where the program itself should be open for
scrutiny and examination. As part of the
overall risk assessment process, the
internal auditor should also be given the
responsibility to review the data for trends,
areas of concern, etc.
Regular communication through various
media and complaint redressal forums,
conducting regular trainings/surveys and
maintaining an ongoing dialogue while
assuring confidentiality in the entire
process, is key to maintaining an effective
and efficient whistle-blowing system.
Effective whistle-blowingsystems and processes
It is a well known fact that employees are
the biggest perpetrators of fraud and
globally most high profile frauds have been
unearthed through whistle-blowing
practices. Despite this, the practice of
establishing whistle blower systems which
are independently monitored is not widely
prevalent in India. For instance under the
Sarbanes Oxley Act, it is mandatory for
whistle-blowing incidents to be reported
and monitored by the audit committee of
the board. In India, this is not required
under Clause 49.
Some leading practices for establishing a whistle blowing helpline
Tone at the top
• Has the endorsement of the board and senior
management
• Culture of openness and honesty
• Prompt and thorough investigation
• Oversight at the board / audit committee levels
Role of internal auditors
• Investigate all or certain types of
investigations
• Investigate whether the whistle
blowing program is operating as
planned by auditing its policies and
procedures
• Be a point of contact for all allegations
or administer response process
depending on organizational resources
• Participate in the hotline's program
management team
• Review data for trends, areas of
concern as part of the overall risk
assessment process
Top hotline practices
• Annual review
• Communication to employees through
various media
• Employee training
• Surveys of employers / stakeholders
• How are complaints addressed?
• Independent service provider
• Confidentiality of person reporting
• 24X7 hotline
• Voicemail is avoided
• Ongoing dialogue promoted
Source: Joint Publication of the Institute of Internal Auditors and American Institute of Certified Public Accountants
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
15
Conclusion
In the wake of high profile
corporate scandals and a rising
concern over yet increasing risk of
corporate fraud and issues around
financial statement, it is now
necessary to step away from the
traditional approach and focus on
establishing a cohesive system,
delivering two important qualities:
transparency and honesty.
As companies grow in size and
complexity they need to take into
account several requirements –
internal monitoring controls,
corporate governance, and external
reporting activities - that are able
to function as a synergistic whole.
Moreover, as one increases their
stakeholder base the expectation
level also rises from regulators as
well as the society at large. It is
paramount that companies adopt
and implement a code of conduct
that re-enforces the culture of
transparency in business
transaction.
The mechanisms of corporate
governance have been built up
after a long history of responding
to the misconduct and failures of
management. Business reality and
fraud knowledge require to be
interwoven so as to develop a
consistent system of corporate
governance.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
16
About KPMG in India
KPMG is a global network of
professional firms providing Audit,
Tax and Advisory services. We
operate in 146 countries and have
140,000 people working in
member firms around the world.
The independent member firms of
the KPMG network are affiliated
with KPMG International
Cooperative (“KPMG
International”), a Swiss entity. Each
KPMG firm is a legally distinct and
separate entity and describes itself
as such.
KPMG in India, the audit, tax and
advisory firm, is the Indian
member firm of KPMG
International Cooperative (“KPMG
International.”) was established in
September 1993. As members of a
cohesive business unit they
respond to a client service
environment by leveraging the
resources of a global network of
firms, providing detailed
knowledge of local laws,
regulations, markets and
competition. We provide services
to over 2,000 international and
national clients, in India. KPMG has
offices in India in Mumbai, Delhi,
Bangalore, Chennai, Hyderabad,
Kolkata, Pune and Kochi. The firms
in India have access to more than
2000 Indian and expatriate
professionals, many of whom are
internationally trained.
We strive to provide rapid,
performance-based, industry-
focused and technology-enabled
services, which reflect a shared
knowledge of global and local
industries and our experience of
the Indian business environment.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
17
About KPMG’s ForensicPractice
Operating in both developed and
emerging markets, KPMG’s
Forensic Practice helps clients
protect their business from fraud,
misconduct and non-compliance
which could lead to reputation
risks and commercial losses.
KPMG's Forensic practice in India
was established in 1995. Our
practice endeavors to provide an
independent, proactive and
responsive service, by effectively
utilizing our investigative,
accounting and technology skills
towards the prevention, detection
and investigation of alleged fraud
and fraud-related issues in
resolving commercial and legal
disputes.
The practice has over time evolved
into a team of over 350 dedicated
professionals, each one bringing in
not only rich and extensive
experience but also a competitive
and specific skill set. Our team
includes certified fraud examiners,
former police officers, chartered
accountants, CPAs, MBAs,
business ethics professionals,
social workers, technology
professionals and lawyers. Our
forensic professionals have
working experience on
engagements both at national and
international levels in the US,
Canada, UK, Africa, Singapore,
Europe, Middle East, Mauritius and
South Asian countries, and are able
to provide practical and prudent
advice on various assignments
across industry sectors and
different lines of businesses.
We emphasize the need for
innovation, flexibility and quality
and provide evidence to help
companies make informed
decisions.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
18
About ASSOCHAM
The Associated Chambers of
Commerce and Industry of India
(ASSOCHAM) acknowledged as
Knowledge Chamber of India has
emerged as a forceful, pro-active,
effective and forward looking
institution playing its role as a
catalyst between the Government
and Industry. ASSOCHAM
established in 1920, has been
successful in influencing the
Government in shaping India’s
economic, trade, fiscal and social
policies which will be of benefit to
the trade and industry.
ASSOCHAM renders its services
to over 3,50,000 members which
includes multinational companies,
India’s top corporates, medium and
small scale units and Associations
representing all the sectors of
Industry. ASSOCHAM is also
known as a Chamber of Chambers
representing the interest of more
than 300 Chambers & Trade
Associations from all over India
encompassing all sectors.
ASSOCHAM has over 100 National
Committees covering the entire
gamut of economic activities in
India. It has been especially
acknowledged as a significant
voice of Indian industry in the field
of Corporate Social Responsibility,
Environment & Safety, Corporate
Governance, Information
Technology, Agriculture,
Nanotechnology, Biotechnology,
Pharmaceutics, Telecom, Banking
& Finance, Company Law,
Corporate Finance, Economic and
International Affairs, Tourism, Civil
Aviation, Infrastructure, Energy &
Power, Education, Legal Reforms,
Real Estate, Rural Development
etc. The Chamber has its
international offices in China,
Sharjah, Moscow, UK and USA.
ASSOCHAM has also signed MoU
partnership with Business
Chambers in more than 45
countries.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative(“KPMG International”), a Swiss entity. All rights reserved.
19
kpmg.com/in
© 2010 KPMG, an Indian Partnership and a member firm of theKPMG network of independent member firms affiliated withKPMG International Cooperative (“KPMG International”), a Swissentity. All rights reserved.
KPMG and the KPMG logo are registered trademarks of KPMGInternational Cooperative (“KPMG International”), a Swiss entity.
Printed in India.
The information contained herein is of a general nature and is not intended to address the circumstances of
any particular individual or entity. Although we endeavour to provide accurate and timely information, there
can be no guarantee that such information is accurate as of the date it is received or that it will continue to
be accurate in the future. No one should act on such information without appropriate professional advice
after a thorough examination of the particular situation.
The Associated Chambers ofCommerce and Industry of India
1, Community Centre, Zamrudpur, Kailash Colony, New Delhi - 110 048
Tel: +91 11 4655 0555Fax: + 91 11 4653 6481/82
Email: assocham@nic.in
Website: www.assocham.org
ASSOCHAMKPMG in India
BangaloreMaruthi Info-Tech Centre11-12/1, Inner Ring RoadKoramangala, Bangalore – 560 071Tel: +91 80 3980 6000Fax: +91 80 3980 6999
ChennaiNo.10, Mahatma Gandhi RoadNungambakkamChennai - 600034Tel: +91 44 3914 5000Fax: +91 44 3914 5999
DelhiBuilding No.10, 8th FloorDLF Cyber City, Phase IIGurgaon, Haryana 122 002Tel: +91 124 307 4000Fax: +91 124 254 9101
Hyderabad8-2-618/2Reliance Humsafar, 4th FloorRoad No.11, Banjara HillsHyderabad - 500 034Tel: +91 40 3046 5000Fax: +91 40 3046 5299
Kochi4/F, Palal TowersM. G. Road, Ravipuram,Kochi 682 016Tel: +91 484 302 7000Fax: +91 484 302 7001
KolkataInfinity Benchmark, Plot No. G-110th Floor, Block – EP & GP, Sector VSalt Lake City, Kolkata 700 091Tel: +91 33 44034000Fax: +91 33 44034199
MumbaiLodha Excelus, Apollo MillsN. M. Joshi MargMahalaxmi, Mumbai 400 011Tel: +91 22 3989 6000Fax: +91 22 3983 6000
Pune703, Godrej CastlemaineBund GardenPune - 411 001Tel: +91 20 3058 5764/65Fax: +91 20 3058 5775
KPMG Contacts
Vikram UtamsinghHead of Markets+91 22 3090 2320vutamsingh@kpmg.com
Deepankar SanwalkaHead of Risk and Compliance Group+91 124 307 4302dsanwalka@kpmg.com