Articles

  • The never-ending story by Mr. B Sai Chandravadhan Vice-President
    Published in The Financial Express on March 24, 2009. 

    Excerpts:-

    “Time to bring in a legislation to regulate the use and depiction of children in the media”

    Link to full article

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  • Prevention of Women Harassment and protection under various laws
  • Prevalence of Sexual Harassment in South Asian Countries?

    Women exploitation and sexual harassment has been on a public debate since epic years. Right from the Duryodhan’s atrocity of forcibly undressing Draupathi in Mahabharata to the day-to-day eve-teasing incidences happening across the country, sexual harassment was and is always booed and frowned upon and is considered as an act that deserves severe punishment.

    However this oppression of women has been more prevalent on the West Asian, Mid Eastern and Asian countries compared to European, Soviet, American and other developed countries. The reason could be that here women have always been considered as a weaker sex and that has moulded the attitude and perception towards women. Across these countries there is a culturally deep-rooted belief that :

    • Women are physically weaker than men.

    • Women need special care and protection by men.

    • Women wouldn’t be able to sustain themselves without the help of men.

    Thus the assumption that women are helpless and a fascination for misadventures create an urge to certain persons to utilize women for their needs. This urge culminates into certain actions by men which sometimes just annoys women or at the worst turns fatal for them. This is strongly against the human rights principles and deserves the strongest condemnation from all quarters.

    In the present times where we live in a more open economy, Women in large numbers are crossing the boundaries of Home to work outside & the biggest challenge they face is Sexual harassment at Workplace. Working Women often face the backlash for taking new roles, which is predominantly male prerogative. Sexual Harassment at work is an extension of violence in everyday life and is discriminatory, exploitative, thriving in atmosphere of threat, terror and reprisal.

    What is Sexual harassment?
    In the year 1997, the Supreme Court issued the guidelines on prevention of sexual harassment at the workplace. popularly known as the Vishakha guidelines, for resolution and prevention of sexual harassment enjoining employers by holding them responsible for providing safe work environment for women. The Judgment is the basis for guidelines on prevention and redressal of sexual harassment at workplace in India.

    According to the guidelines, sexual harassment includes

    • Any physical contact and advance

    • Demand or request for sexual favour

    • Sexually coloured remarks

    • Showing pornography and

    • Any other unwelcome physical, verbal, non-verbal contact of sexual nature.

    The Supreme Court guidelines make employers and institutions responsible for implementing both preventive and remedial measures to make the workplace safe for women.

    Prohibition of Women’ harassment in India under various Laws?

    Sexual harassment encroaches the fundamental right of a woman to gender equality under Article 14, her right to life and live with dignity under Article 21. Women have been given a special status in the constitution so much so that under Article 15(3), the constitution allows the State Government to create special provisions for women, if need be.

    Under the Factories Act, 1948 women are given the following benefits:

    • Women shall not be required to work in any factory at night without a due permission from the Factories Inspector.

    • Women shall not be required to do any work that physically toils them or to work with any dangerous machines or process.

    • Women shall be given access to a separate covered latrine and urinals.

    • Women shall be given a special area in the canteen to have food and a separate washing area.

    • Women shall be allowed to take breaks to nurse their infants in a privately secluded place.

    • The Contract Labour (Regulation and Abolition) Act, 1970 states that women contract workers should be given a separate rest rooms.

    However, these benefits shall be applicable only women working in factories and not otherwise.

    But since the Vishakha Guidelines were issued, it is mandatory for every establishment to have a complaints committee in place and take preventive and remedial actions. Visakha requires the employer to give a police complaint where sexual harassment also amounts to an offence. It shall be the duty of the employer or other responsible persons in work places to prevent the commission of acts of sexual harassment and to provide for the resolution of acts of sexual harassment by taking all steps required. These Guidelines make it mandatory that every employer shall Create Awareness, Constitute Complaints Mechanism, Initiate disciplinary action against perpetrators, Initiate criminal action where required, Provide support mechanisms to victims.

    Similarly the Madras High Court passed a judgement in WP.4604/1999 dated 08-Dec-2001 in which the Court had laid down certain guidelines for employing women in night shifts:

    • Circulation and discussion of complaints committee, its role and mechanism.

    • Providing adequate lighting facilities in the work premises.

    • Women should not be allowed to work alone at night. They should be in batches of 10s and the total number of women workers at night should not be less than 1/3 of the total strength.

    • Provide women security guards at night at entry and exit points.

    • Work shed to be provided so that women can arrive and stay in advance or leave after dawn and not during the dark hours.

    • Separate Canteen facility for female workers

    • Separate transportation for female workers

    • Provide separate holiday for women during their menstrual cycles.

    • Appropriate emergency telephone connections to be made available.

    • Separate vehicle to meet emergencies to be provided.

    • Appointment of atleast two women wardens and supervisors.

    Provisions in other legislations that prescribes punishment for sexual harassment at workplace is,

    • IPC Sections 292 294: Obscenity

    • IPC Section 354: Criminal Force or Assault Intended to Outrage Modesty

    • IPC Section 375: Rape

    • IPC Section 509: Word, Gesture or Act Intended to Outrage Modesty of a Woman

    • Protection of Human Rights Act, 1993

    But here question arises that after so many years, has there been an implementation to these? One of the major drawbacks being, that such laws and guidelines find their places only in law books and few journals. The common masses don’t get to know about such judgments. The NCW study shows that 60% of working woman is still not aware of this. It’s a true fact that woman who makes complaints has to meet with an enquiry about her own conduct and in reality no enquiry is being made against the person against whom the complaint was made. Lodging complaints often results in isolation of the women, both by employer and by the colleagues.

    Insight of the Future laws on Sexual harassment

    Protection of Women against Sexual harassment at workplace bill 2010.

    The Parliament has cleared the introduction of The sexual harassment Bill which will give Women right to complain against colleagues who are guilty of Sexual advances-verbal or physical. The guilty will suffer financial penalties besides loss of employment and, in case of graver offence, a police complaint.

    It provides protection not only to women who are employed but also to any woman who enters the workplace as a client, customer, apprentice, daily wageworker, or in ad hoc capacity. Students, research scholars in colleges/universities and patients in hospitals have also been covered.

    Hence it has addressed the Short comings of Vishakaha Guidelines as –

    No Woman shall be subjected to sexual harassment at any workplace which may include but not limited to

    • Implied or overt promise of preferential treatment in her employment

    • Implied or overt threat of detrimental treatment in her employment

    • Implied or overt threat about her present or future employment status

    • Conduct of any person which interferes with her work or creates an intimidating or offensive or hostile work environment for her

    • Humiliating conduct constituting health and safety problems

    The bill asks for formation of Committees in every Organization with more than 10 workers or a local committee at district / sub district level for organizations with less than 10 employees.

    A complaint Committee (Internal Complaint Committee) should be set by employers in Organized Sector, with half of the members as women, including senior officials and people with legal knowledge. The Complaint Committees are required to complete the enquiry within 90 days and a period of 60 days has been given to the employer or District Officer for implementation of the recommendations of the Committee. Any employer who fails to comply with the provisions of the proposed legislation would be liable to be fined Rs 50,000 (after the Bill is passed).

    The biggest flaw in this bill is that Domestic servants are not covered in it.

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  • International Finance Reporting System
  • Introduction

    In this era of globalization and liberalization, the world has become a village, particularly on economic front. It is now imperative to have a globally accepted financial reporting system, which is now being realized in the form of International Financial Reporting Standards (IFRS).

    IFRS is an accounting framework that establishes recognition, measurement, presentation, and disclosure requirements relating to transactions and events that are reflected in the financial statements. IFRS was developed in the year 2001 by the international accounting standard board (IASB) in the public interest to provide a single set of high quality, understandable and uniform accounting standards.

    Objective of IFRS

    The objective of IFRS is to develop a single set of high quality understandable and enforceable global accounting standards that will form the “stable platform” for international accounting. The correct adoption of IFRS will bring more transparency and a higher degree of comparability, both of which promise many benefits for the organization, including enhanced investor confidence, greater consistency and transparency of financial reporting as well as ability to compare financial information from companies around the world.
    The ultimate goal of IASB is the development and rigorous application of a single set of global accounting standards, which will produce high quality transparent and comparable information in general purpose financial statements.

    The current status of IAS (Indian Accounting Standards)

    In India, the Statements on Accounting Standards are issued by the Institute of Chartered Accountants of India (ICAI) to establish standards that have to be complied with to ensure that financial statements are prepared in accordance with generally accepted accounting standards in India (India GAAP).

    Need of IFRS (Harmonization of the accounting practice across the world)

    Accounting standards are being established both at national and international levels. But the variety of accounting standards and principles among the nations of the world has been a sustainable problem for globalizing the business environment. We need to process of harmonization of accounting practices for the following reasons.

    • To make a common platform for better understanding of accounting, internationally
    • Synchronization of accounting standards across the globe
    • To create comparable, reliable, and transparent financial statement
    • To facilitate greater cross-border capital raising and trade
    • To having company–wide one accounting language which have subsidiaries in different countries

    Suggestive Guidelines

    • Understanding and analyzing the impact of IFRS on financial performance
    • Obtaining the new data required and adopting systems to provide it
    • Finding the resources and expertise needed to make the changes
    • Meeting employee training and knowledge sharing needs
    • Aligning systems for reporting for statutory regulatory and international purposes
    • Gaining shareholder and analyst understanding of the impact of changing to IFRS.

    IFRS and Indian Corporate

    • The use of international financial reporting standards (IFRS) as a universal financial reporting language is gaining momentum across the globe
    • The institute of Chartered Accountants of India (ICAI) has recently released a concept paper on convergence with IFRS in India, detailing the strategy with effect from April 1, 2011. This has been strengthened by a recent announcement from the Ministry of Corporate Affairs (MCA) conforming the agenda for convergence with IFRS IN India by 2011
    • Adopting IFRS by Indian corporates is going to be very challenging but at the same time could also be rewarding. Indian corporates are likely to reap significant benefits from adopting IFRS

    Benefits of IFRS on Indian Corporates

    There are likely to be several benefits to corporates in Indian context as well. These are:

    • Improvement in comparability of financial information and financial performance with global peers and industry standards.
    • Adoption of IFRS is expected to result in the better quality of financial reporting due to consistent application of accounting principles and improvement in reliability of financial statements
    • Better access to and reduction in the cost of capital raised from global capital market since IFRS are now accepted as a financial reporting framework for companies seeking to raise funds from most capital market across the globe
    • Improved access to international capital markets
    • Lower cost of capital
    • Enhanced brand value
    • Avoidance of multiple reporting
    • Transparency in reporting

    Challenges in adopting IFRS in India prospect

    • Regulatory endorsement and acceptance
    • Shortage of skilled resources
    • Huge cost of enhancement of IT systems
    • Acceptance by tax authorities
    • Managing market expectations and investor relationships
    • Managing day to day business issues – MIS, tax planning, performance indicators, mergers and acquisitions, etc.

    General Differences

    • IFRS provides much less overall detail than GAAP
    • IFRS contains relatively little industry specific instructions as compared to GAAP.
    • IFRS use a single – step method for impairment write – downs rather than the two step method used in US GAAP
    • IFRS does not Permit Last in First Out (LIFO)

    Conclusion

    Transition from Indian GAAP (Generally Accepted Accounting Standards) to IFRS (International Financial Reporting Standards) has its own set of benefits and challenges for those who prepare and use financial statements. Harmonization of existing standards with IFRS requires changes not only in the accounting procedures but also in the legal regulatory framework and IT systems.
    IFRS is important from investor confidence perspective but can’t be considered as an accounting firewall against all frauds. Satyam was one of the first Indian companies to announce transition to IFRS but the Rs 7,000-crore financial fraud shows that the real problem is in the auditing process and the corporate governance framework, not in the accounting standards. The present financial crisis has thrown up a new set of problems of credit, job losses, decreased consumer spending and shrinking margins, and it comes as no surprise that the companies don’t seem to be in a rush to implement IFRS. Regulators are also too occupied in grappling with new challenges to keep up the momentum. Moreover, the modification of Income-tax Act, Companies Act and other legislations that run counter to IFRS is not easy, and in practice, such legislative activity could take years. Therefore, ICAI and the Government have to play a larger role in addressing these problems to avoid long delays.

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