Dfes

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The CFO Summit 2006
An Overview
Jairaj Purandare
February 16, 2006
pwc
Confederation of Indian Industry
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Introduction

• Indian corporate sector is witnessing rapid
  business growth and is transforming amidst
  challenges
• Good performance of the economy and strong
  Industrial growth
• Inherent challenges remain from global and local
  environmental developments in the following
  areas
• Accounting Standards
• Risk management
• Corporate Governance

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Convergence of Accounting Standards

• Globalisation of Businesses
• Adapt to local accounting language
• Lack of comprehensive accounting framework
• CFOs need to think of more than one GAAP
• Indian GAAP is broadly similar to IFRS
• Alternatives from an Indian perspective
• Adopt IFRS
• Adapt Indian GAAP to confirm to all or some of
  IFRS

Long term vitality of global capital markets
demands a revolution in Corporate Reporting
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Risk Management

• Businesses need to understand various risks
• The perspective on risks has shifted from an
  event driven approach towards an opportunity
  laden approach
• The finance function can be the flag bearer which
  champions good risk management practices
• Risk management should be embedded in the
  organizations DNA
• Risk management is an evolutionary approach and
  an enterprise wide view ultimately helps to
  understand the impact of risk better

A culture of decision making based on effective
risk management is the need of the hour
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Corporate Governance

• Loss of public trust over financial reporting and
  accounting have pushed corporate governance from
  theory into regulated practice (e.g. SOX, UK
  Code)
• Corporates need to earn trust through
  Accountability, Responsibility and
  Transparency
• In India, SEBI monitors and regulates corporate
  governance through clause 49

It is no longer a question of whether
corporate governance best practices are necessary
in India but more of how and how soon
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CFO - Role Transformation
Business Partnering
Normal Enterprises
World Class
Decision Support
Role Transformation
Control
Process Redesign
Decision Support
Reporting
Control
Value Added Services
Transaction Processing
Reporting
Integrated Systems
Transaction Processing
Cost Reduction
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Creating a vision for Finance
The CFO team transforms itself from a score
keeper function to a business partner role, that
is more strategic
Business Skills

• Business Partner
• Acts as business advisor and integrator of the
  total business view
• Provides insight and supports commercial decision
• Takes ownership for and actively manages the
  financial drivers of value
• Diligent Caretaker
• Role focused on world class governance
• Works with the business to ensure compliance and
  effective controls
• Custodian of assets and value protection
• Conscience of the business

• Commentator
• Providing decision support as required
• Explaining the business story in numbers and
  variances
• Score Keeper
• Role focused on book keeping
• Inward looking culture
• Efforts expended on transaction processing and
  month end figure

Reactive
Proactive
Accounting Skills
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Thank You
pwc
Confederation of Indian Industry