Kaleidoscope-Issue Sep Oct 2014

Vol. 34 No.
5 October, 2014
Message by
Secretary, Department of Public Enterprises...................... 05
Chairmans Desk............................................................................ 06
Articles
Role of PSEs in Developing Women Leaders...................... 08
by Dr. U. D. Choubey
Enhanced Duties, Responsibilities and Liabilities of........ 11
Directors - Companies Act 2013
by Ms. Alka Kapoor
Corporate Social Responsibility: Saviour of........................ 20
Socio-Economic, Environmental & Governance Issues
by Dr. B. B. Goel
One Person Company (OPC) -.................................................. 24
A modified Corporate form to boost entrepreneurship
by Prof. Pankaj Varshney
The New Companies Act.:.......................................................... 27
Step towards better Governance
by A. K. Rastogi
Appointment of Directors under the.................................... 30
Companies Act, 2013 Issues for CPSEs
by Inderpal Singh
Companies Act 2013: Boosts Corporate Governance...... 35
by H. L. Chaudhary
Related Party Transaction (RPT) under................................. 39
Companies Act 2013 and Revised Clause 49
of the Equity Listing Agreement
by Ms. Kumudani Sharma
Corporate Social Responsibility.............................................. 47
as Provisioned in Companies Act 2013
by Rakesh Sinha
Contents
Vol. 34 No. 5 October, 2014
Companies Act 2013 -...................................................................................... 48

A fillip to Corporate Governance
by Pankaj Tewari
Companies Act 2013: Raising the bar on governance......................... 50
by Sai Venkateshwaran
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SCOPE News
Vice President Releases Book Untold Story of........................................ 07
Indian Public Sector by DG, SCOPE
SCOPE Launches Cleanliness Drive under................................................ 56
Swachh Bharat Mission
Interactive Meeting of the CEOs of PSEs with the................................. 58
Central Vigilance Commissioner
PSE News
PSEs News....................................................................................................60 - 93
DD/Cheque drawn in favour of Standing Conference of

Public Enterprises)
ADVISORY BOARD
Dr. U.D. Choubey, Director General
S. A. Khan, GM (HR & CA)
U.K. Dikshit, Adviser (Programmes)
K. N. Dhawan, Adviser (CC)
& Consulting Editor
EDITOR
Nisha Sharma
PUBLISHER
A. S. Khan
Total Pages : 96
Annual Subscription: Rs. 500/Price per copy : Rs. 50/-(Payment may be sent by
Material published in KALEIDOSCOPE may be

reproduced with prior permission of the Editor and with
acknowledgment in the accepted style.
The views expressed in various articles
are that of the authors and not necessarily
of SCOPE Management. - Editor
Published and printed at New Delhi by
A. S. Khan on behalf of Standing Conference of Public
Enterprises, Core 8,1st Floor, SCOPE Compex, 7 Lodhi
Road, New Delhi-110003
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Chairman's Desk
to accelerate the expansion and
growth of our economy, enactment of new legislation had become a sine-quo-non.
Starting with a concept paper put
on the ministrys website on 4th
August 2004, the journey of the
new legislation ended on 29th
August 2013, with assent of the
Honble President, striving to
make Indian corporate environment more transparent, simple
and globally acceptable.
he Enactment of the
Companies Act 2013 has
ushered in a new era for
Corporate India. The landmark
legislation has introduced several
new concepts and seeks to encourage transparency, accountability
and high standards of corporate
governance.
The earlier Act was in need of a
substantial revamp for quite some
time, to make it more contemporary and relevant to corporates,
regulators and other stakeholders in India. When the same was
enacted, that is nearly six decades
earlier in 1956, there were only
around 30,000 companies. This
number is more than nine lakhs
now. The Indian economy has
since then, experienced substantial expansion and growth. The
change in regulatory structure for
corporate sector had become necessary to address issues relating
to regulatory harmony, recognition of good corporate practices
and technological improvements.
To meet the challenges posed by
the changed national and international business environment and
The 2013 Act promises to substantively raise the bar on governance

and in a comprehensive form purports to deal with relevant themes
such as investor protection and
fraud mitigation, inclusive agenda (CSR), auditor accountability,
reporting framework, director responsibility and efficient restructuring. The thrust of the new Act
is on self-regulation and shareholders democracy with stringent penalties being imposed for
violations. In appropriate cases,
it enables the authorities to make
rules through subordinate legislation, thus ensuring that the law remains relevant in future too, in the
changing economic environment.
The new Act is certainly a great
achievement but is not free from
implementation challenges that
are causing anxiety to the promoters, professional managers
and auditors. These include, short
preparation time to Indian companies for implementation of the Act
and also, aligning the same with
other rules/provisions/ regulatory
norms applicable to organizations.
However, I am sure MCA and the
concerned regulatory bodies will
soon address such challenges to
truly make the new Companies
Act, an exemplary reformative
step forward in empowering
Indias business.
With respect to the PSEs too, there
are several challenges being witnessed w.r.t. implementation of
the new Act. In Companies Act
1956, there were certain exemptions/ relaxations applicable to
Government Companies, which
were provided taking into account
the special framework applicable
to them. We are well aware that
the method of selection and appointment of a Chairman and full
time Functional Directors of PSEs
are being done through a process
established by the Government.
The terms of appointment and the
remuneration is also laid down
by Government. These are some
of the issues for which adequate
provisions will have to be made so
that mandatory provisions for the
PSEs are followed.
Today, public sector enterprises
have emerged as global giants and
their contribution to the national
economy has been well acknowledged. In the context of Companies
Act 2013, when the rules of the
game for Government companies
and other than Government companies differ in many aspects, I
am sure, concerns of PSEs in aligning the various guidelines which
are applicable to them would be
looked into on priority.
I am happy that SCOPE has very
appropriately brought out a special issue of KALEIDOSCOPE
devoted to this important subject.
This will certainly provide valuable insight into various aspects
of the new Act and their potential
implications.
C.S.Verma
Chairman, SCOPE
Vice President Releases Book Untold Story of

Indian Public Sector by DG, SCOPE
Vice President Shri M. Hamid Ansari (centre) releasing the book Untold Story of the Indian Public
Sector. Standing on his left are Dr. M. B. Athreya, Management Guru and Dr. U. D. Choubey, DG, SCOPE.
Standing on his right are Mr. C. S. Verma, Chairman SCOPE & Chairman, SAIL and Mr. S. K. Ghai, MD,
Sterling Publishers Pvt. Ltd.
he Vice President of India Shri M. Hamid Ansari released a book entitled Untold Story of the Indian
Public Sector authored by Dr. U.D. Choubey, the Director General of Standing Conference of Public
Enterprises (SCOPE) during a function held on 14th October, 2014 at the Vice Presidents House in
New Delhi. Dr. U. D. Choubey, Director General, SCOPE delivered the Welcome Address. Dr. M. B. Athreya,
Management Guru also addressed the function and focused on reforms in public sector enterprises. Mr. S.
K. Ghai, Managing Director, Sterling Publishers Pvt. Ltd. proposed vote of thanks.
Addressing on the occasion, the Vice President said that in our country, people in high positions remain
shy in sharing their experiences. Dr Choubey has done a commendable job in penning down his vast experience in Public Sector. The book throws light on various aspects of working in Public Sector Enterprises
. He congratulated the author for bringing out such a useful book for enlightenment of people.
The book provides a clear presentation of the overall environment and workings of the
Public Sector that the author
experienced. It is up-to-date,
often forthright, and futuristic. Millions of young men and
women today aspire to join
the esteemed ranks in Indian
Public Sector to contribute to
the creation of a new nation.
Unfortunately, over the years
the Public Sector has seen tremendous denigration.
Kaleidoscope October 2014
ARTICLE
Role of PSEs in
Dr. U. D. Choubey
Developing
Women Leaders
Director General, SCOPE
ender diversity has emerged as an essential element for growth and competitiveness of the economies.
Globally, the call for gender diversity in board rooms has been
growing momentum. There is
increasing sensitivity on the issue
around the world and accordingly, various policy measures and
legislations have been enacted.
Some countries have introduced
quotas to increase womens participation in decision making
process while others have taken
voluntary measures to integrate
womens professional insight
and expertise into board room
discussions.
In India, a welcome step has come
in the form of the Companies Act,
2013. The act provides for atleast
one women director on the board
of every listed company within a
period of one year from the date
of enactment of the new legislation or 3 years for other companies with prescribed share
capital/ turnover. Further, SEBI
has aligned its regulations with
Companies Act, 2013.
Indian corporate sector has actually welcomed the legislation as
they are of the view that this would
bring the much needed gender
diversity in the board room and
would certainly provide a fresh
8
and a new perspective to umpteen discussions that take place

in the Board Room. Many studies
and researches have suggested
that there is correlation between
financial bottomline and the
proportion of women on Boards
or top level. From good governance perspective including
more individuals with different
background and expertise could
improve the Boards functions.
However, the question now arises as to how many vacancies are
likely to be created due to this
legislation and how the corporate
sector aim to fulfill the requirement. The fact remains that there
is dearth of sufficient/requisite
number of women employees to
occupy the Board level position.
The gap created

In a recent survey by the Forbes
Magazine, there are approximately 11,596 directorship positions in NSE listed companies out
of which only 9,009 are occupied
in India. Further, out of the 9,009
positions, only 597 positions are
occupied by women making a
mere 5 percent of the total available positions. Also out of the total 1,456 NSE listed entities, 966
companies (i.e. two thirds) do
not have women directors. This
implies that with the enactment
of Companies Act 2013 and SEBI

regulations, 966 board level positions for women would be available and as per the Institute of
Directors, with the enactment of
the new Companies Act, directorship positions for atleast 2,500
women would be open in both
listed and unlisted companies.
Contrary to above, when we look
at the supply side the position appears to be extremely grim. This
can be seen from the fact that a
single woman holds directorship
positions for as many as 9 companies at a time (both listed and
unlisted). Also, 60 percent of BSE
companies alone would require
300 women directors whereas the
available pool is only 100 women.
Besides the problem of numbers, the situation is further compounded by the degree of ease
of availability of limited pool of
woman directors. To elaborate,
the available woman directors
have to take up their directorship
positions in light of the prevalent
SEBI guidelines whereby a single
director cannot occupy directorship position in more than 7 listed companies making the available pool very restrictive. Also,
the available pool is further limited by the fact that women from
certain sectors such as banking,
financial services and insurance
ARTICLE
are unable to take up directorship
in various companies due to conflict of interest.
Realizing the same, the Indian
corporate sector is making all efforts to scout the most talented
and suitable woman in order
to absorb her in their company.
However, with the limited/ restrictive pool of skill specific
women, HR agencies and Indian
companies in general are finding
it very difficult to find the right
mix of qualification and experience and hence are looking at
bringing woman directors from a
wide gamut of industrial base including government agencies, audit firms, consultancy firm, nonprofit organizations, academic
and research institutions.
Need for a long term

initiative
The empowerment initiative provided in the Companies Act and
SEBI regulations indicates at a
two-fold agenda i.e. socio economic development of women.
At one end the intention of promoting and strengthening the
women is to provide greater authority to them in running the
businesses thereby providing
them with greater economic independence which will ultimately
translate into better business performance and better stakeholder
value. At the other end providing
greater autonomy and authority to women in decision making
aims at changing the mindset of
society towards rights of women.
As mentioned earlier, companies have welcomed this initiative of the government and are
making every possible effort at
fulfilling the legal requirement.
However, the aim should not be
only to fulfill the legal requirement but efforts should be to
develop and mentor women employees to higher and board level

positions. Women have achieved
much progress in education and
at work and talent pool should be
utilized for improving the board
dynamics and benefit of the
organization.
Role of PSEs
It has been time and again seen
that public sector enterprises
(PSEs) in the country have been
fulfilling dual objective of socio economic development of
the country as a whole. One of
its most important social objectives was to provide and generate employment to both men and
women.
This can be seen from data published by Ministry of Labour and
Employment1 (the Ministry)
wherein, though the percentage
of people seeking employment in
public sector (including central
government, state government,
quasi (central) government, quasi (state) government and local
bodies) declined by 1.8 percent
in 2011 in comparison to 2010 as
against employment in private
sector which registered a positive

growth of 5.6 percent in 2011 over
2010, in absolute numbers public sector employed 175.48 lakhs
people in 2011 in comparison to
114.52 lakhs people employed by
private sector in the same year.
A similar pattern has been observed in employment of women. As per the Ministry, though
percentage of women seeking
employment in public sector
(including central government,
state government, quasi (central)
government, quasi (state) government and local bodies) declined
by 0.79 percent in 2011 (over
2010) as against a positive growth
of 4.54 percent in private sector,
in absolute numbers public sector
employed 31.71 lakhs women as
against 27.83 lakhs women in the
private sector.
From the above it can be seen
that public sector enjoys a greater women patronage and hence
should be more accountable and
responsible for their development. And as a matter of fact the
public sector has been very vigilant towards this responsibility.
This can be seen from a study
Employment Review, Government of India, Ministry of Labour & Employment,

Directorate General of Employment & Training, published in 2013
ARTICLE
conducted by The Times Insight
Group in 2012 (the study) of
30 BSE companies. In the study
it was found that out of 30 companies, 17 companies had atleast
one women director, of which
four companies were public sector companies (i.e. 23 percent of
the total sample size). Also, there
was only one company which had
4 women directors and that company was a public sector company. Further, out of three companies having 2 women directors,
one was a public sector company.
In addition, the gender-diversity
ratio (i.e. number of women directors vis-a-vis companys total
board size) was the highest at
23.5 percent that too of a public
sector company. It may also be
further noted in 2013, the highest
position in a PSE i.e. Chairman
and Managing Director (CMD)
position of two ratna enterprises were also filled by women
employees.
Besides providing women with
leadership roles, public sector
has also been active in promoting
forums for common discussions
for women. For this purpose
Women in Public Sector (WIPS)
has been formed under aegis of
Standing Conference of Public
Enterprises (SCOPE) to ensure
holistic development of women
at large in PSEs.
From the above it is apparent that
PSEs have been strongly committed to women empowerment not
only in words but also in action.
However, much more needs to be
done especially in light of developing women leaders.
For this purpose it is important
that beyond their technical and
professional expertise, they need
to be trained in strategic and international business management.
Also mentoring programmes/
10
Besides providing women

with leadership roles,
public sector has also
been active in promoting
forums for common discussions for women. For
this purpose Women in
Public Sector (WIPS) has
been formed under aegis
of Standing Conference
of Public Enterprises
(SCOPE) to ensure holistic development of women at large in PSEs.
periodic workshops/ discussion forums/women centric programmes can be held by each
company wherein board level
women employees are invited to
share their experiences with other
women employees of the company thereby motivating them
to make a progressive career. To
exemplify, customized training
and discussion programs can be
formulated to cater to entry level,
middle level and top level women employees separately.
But all of the above may not be
possible if our women are not
motivated and not aware of their
career graphs. Hence, efforts
should be made by organizations
to induct counselors (can be from
human resource department of
the company or a specialized organization) wherein each women employee is provided with a
career graph (after mutual discussions) at the time of her entry into the organization and the
same should be reviewed periodically. Moving a step further,
adherence or deviation from the
career graph may be considered
as one of the performance evaluation parameters.
Instituting awards recognizing

companies best practices in gender diversity women would encourage and motivate them to do
better and emerge as role model
for other companies to follow suit.
Long Road Ahead

A step ahead has been taken towards women empowerment
by changing the regulatory environment. The change is likely
to bring about a more gender
diverse board thereby improving representation of women in
the decision making circle and
in future probability of shift of
focus from gender to objective
parameters such as effectiveness
and efficiency. However, the empowerment is only possible if the
endeavor is a continuous process
rather than a one-time activity.
At this stage public sector in India
plays a major role. With a huge
women participation in its workforce it is imperative that PSEs
are more aggressive yet sensitive
towards the needs of our women
employees.
Time and again the public sector has come out with women
friendly policies so as to make
the working environment conducive to work with not only good
working conditions but also an
appropriate work life balance.
However, we need to move a step
further and incorporate aggression in our attitude so as to focus
on career development of our
women employees by not only
providing them opportunities
but also guidance so that the public sector companies and boards
not only reflect a great gender
diversity but also equal women
participation thereby becoming
a role model for the corporate
world at large.
ARTICLE
Enhanced Duties,
Responsibilities and
Liabilities of DirectorsMs. Alka Kapoor
Jt. Secretary, ICSI
he accountability of the
board of directors has always been an issue for
strengthening corporate governance. The Financial Aspects of
Corporate Governance (Cadbury
Report), 1992 states that The
formal relationship between the
shareholders and the board of
directors is that the shareholders
select the directors, the directors
report on their stewardship to
the shareholders and the shareholders appoint the auditors to
provide an external check on the
directors financial statements.
Thus the shareholders as owners
of the company elect the directors
to run the business on their behalf
and hold them accountable for its
progress.
Article VI of OECD Principles
of Corporate Governance begins
with injunction that the Board
members should act on a fully
informed basis, in good faith,
with due diligence and care, and
in the best interests of the company and the shareholders. The
board should apply high ethical
standards.
Kumar Mangalam Birla Committee Report on Corporate Governance (2000) highlighted the
Companies Act 2013

Boards Responsibility as the
board of a company provides
leadership and strategic guidance, objective judgement independent of management to the
company and exercises control
over the company, while remaining at all times accountable to the
shareholders. The measure of the
board is not simply whether it
fulfils its legal requirements but
more importantly, the boards attitude and the manner it translates
its awareness and understanding
of its responsibilities.
The Board at the top is enjoined
to steer and activate the entire
corporate governance system.
The Companies Act, 2013, finely
crafted, with sharpened edges
to impact the functioning of any
company and the economy, creates a good governance domain
by incorporating several provisions relating to board duties,
board performance, role of independent directors, stakeholder
protection, better auditing tools,
institutionalizing corporate social
responsibility and the like.
Duties of Directors
Directors have so far played two
roles in a business environment.
On one hand, they are the agents

of the shareholders. Their primary responsibility has been and
still is to act in the best interest
of the shareholders and the main
goal is to maximise shareholder
wealth. This is to ensure a return on shareholder investments
greater than the cost of capital.
On the other hand, directors are
the trustees of the company. Their
principal duty is to act in the best
interest of the company itself.
Companies Act, 2013 has now extended the role of directors to include duties towards other stakeholders, creditors, employees,
society and environment.
Companies Act 1956 did not
specifically provide for the duties of the directors towards
the shareholders, company and
other stakeholders. They were
an outcome of the practices adopted and the court verdicts. The
Companies Act, 2013 (CA, 2013
or Act) has for the first time promulgated the duties of the directors which essentially includes
that a director of a company shall
act in good faith in order to promote the objects of the company
for the benefit of its members as
a whole, and in the best interests
of the company, its employees,
11
ARTICLE
The Board at the top is enjoined to steer and activate

the entire corporate governance system. The
Companies Act, 2013, finely crafted, with sharpened
edges to impact the functioning of any company
and the economy, creates a good governance
domain by incorporating several provisions
relating to board duties, board performance, role
of independent directors, stakeholder protection,
better auditing tools, institutionalizing corporate
social responsibility and the like.
the shareholders, the community

and for the protection of environment. The new Act enshrines the
duties in a written format in the
Act with the penal provisions.
Section 166 of the CA, 2013 lays
down specific duties of the directors as under:
A director shall act in accordance with the articles of the
company.
A director shall act in good
faith in order to promote the objects of the company for the benefit of its members as a whole, and
in the best interest of the company, its employees, the shareholders, the community and for the
protection of environment.
A director shall exercise his
duties with due and reasonable
care, skill and diligence and shall
exercise independent judgment.
associates.
A director shall not assign
his office and any assignment so
made, shall be void.
The efficacy of any regulation depends on measures to put a curb
on violation of the provisions of
the said regulation. With hefty
penalty, the profound duties
embedded in the Act itself is the
picture of what is expected from
the directors. This provision is
aimed at infusing a new sense
of understanding, commitment
and responsibility in the directors who constitute the boards of
Indian companies. This will keep
them on their feet and they shall
perform a more active role in the
best interest of the companies and
all the stakeholders.
A director shall not involve in

a situation in which he may have
a direct or indirect interest that
conflicts, or possibly may conflict,
with the interest of the company.
Duty to Attend Board Meetings:

It is the duty of directors to devote sufficient time to a company.
Directors should always evaluate
the demands on their time before
allowing themselves to be considered for an appointment.
A director shall not achieve

or attempt to achieve any undue
gain or advantage either to himself or to his relatives, partners, or
In a recent analysis by Proxy

Advisory Services in India of renowned listed companies it was
found that two Independent
12
directors hardly attended any

board meetings of certain companies in last 4 years. Their absence
from the board meetings meant
that only 40% of the board members were independent in the
board meetings over last 4 years.
This shows the negligence on the
part of the directors whether independent or otherwise.
Independent Directors play a pivotal role in building a strong foothold of Corporate Governance is
an organization. They bring accountability and credibility to the
Board process and also strengthen sound practices. While they
need not take part in the companys day-to-day affairs or decision making, they should ask the
right questions at the right time
regarding the boards decisions.
Raising the appropriate red flags
at the right time would help them
in avoiding the occurrence of unwanted situations and their consequences to a great extent.
Duty of Disclosure of Interest:
Section 184 of CA Act, 2013 requires a director to give a notice
of disclosure at the first meeting
of the Board in which he participates as a director and thereafter
at the first meeting of the Board
in every financial year or whenever there is any change in the
disclosures already made, then at
the first Board meeting held after
such change. This disclosure is
the disclosure of the directors interest by virtue of his connection.
Duties implicit from provisions of Section 134

Section 134 sets out the contents
of the report of Board of directors. One of the important contents of the Boards Report under
section 134(5) is the Directors
Responsibility Statement (DRS)
ARTICLE
which is a joint statement by all
directors and includes:
that board had laid internal

financial controls to be followed
by the company;
Adherence to accounting
standards
Affirmation by the Board that in
preparation of annual accounts,
the applicable accounting standards had been followed, and
where there were departures,
proper explanation had been
given.
that such internal financial

controls are adequate; and
Accounting policies and reliance

on Judgments and estimates
Statement that the directors had
selected accounting policies, and
applied them consistently, and
made judgements and estimates,
and the same are reasonable and
prudent. The end result of the
above is that the statements give
a true and fair view of the state of
affairs, and the profit or loss for
the period. [Section 134(5)(b) of
the Companies Act, 2013]
Maintenance of adequate accounting records for safeguarding of the companys assets and
prevention of fraud and error
Statement that proper accounting records, so as to safeguard
the assets of the company and to
prevent fraud and error. [Section
134(5)(c) of the Companies Act,
2013]
Going concern accounting
Statement that the annual accounts of the company had been
prepared on a going concern
basis. [Section 134(5)(d) of the
Companies Act, 2013]
Adequacy of internal financial
controls
Section 134(5)(e) is applicable
only in case of listed companies.
This requires the board to certify:
that such internal financial controls were operating

effectively.
Compliance with applicable laws
A report whether the Board had
devised proper systems to ensure compliance with all applicable laws, and that such systems
were adequate and operating effectively. [Section 134(5)(f) of the
Companies Act, 2013]
Responsibility of Enhanced
Disclosure
The Act requires enhanced disclosures with respect to Boards
Report, Prospectus, AGM notice,
Annual return, directors responsibility statement, audit committee constitution, vigil mechanism.
It is the responsibility of the directors to ensure that all disclosures
mandatorily required under the
Act are given appropriately.
Responsibility to establish
Vigil Mechanism
The Act provides that every
listed company or prescribed
class or classes of companies shall
establish a vigil mechanism for
directors and employees to report
genuine concerns. This mechanism shall provide for adequate
safeguards against victimisation
of persons who use such mechanism and make provision for
direct access to the chairperson
of the Audit Committee in appropriate or exceptional cases. The
details of such mechanism are
to be disclosed by the company
on its website, if any, and in the
Boards report.
Corporate Social
Responsibility
In our country, while many corporate houses have been traditionally engaged in doing CSR activities voluntarily, the new CSR
provisions of the CA Act 2013,
put formal and greater responsibility on companies to set out
clear framework and processes to
ensure strict compliance.
Sec 135 of the new Act provides
that every company having net
worth of Rs 500 crore or more,
or turnover of Rs 1000 crore or
more or a net profit of Rs 5 crore
or more during any financial year
shall constitute a Corporate Social
Responsibility Committee, which
is to be a Committee of the Board.
The Board is responsible to ensure that the company spends the
mandatory CSR on specified CSR
activities in accordance with the
CSR policy of the company and
disclose the CSR policy and CSR
activities of the company as specified in the provisions.
Prohibitions and restrictions for directors

While the 1956 Act was silent
on the provisions relating to
insider trading, the 2013 Act on
the other hand, lays down provisions relating to prohibition of
insider trading and forward dealing with respect to all companies.
This is a step towards harmonization between the 2013 Act and
the SEBI Act; more specifically
for listed companies. Any person
who violates the clause will be
punished with a fine or imprisonment or both.
New section 195 has been introduced with respect to prohibition of insider trading of securities under the 2013 Act. No
person including any director or
13
ARTICLE
Key Managerial Personnel of a
company shall enter into insider
trading except any communication required in the ordinary
course of business or profession
or employment or under any law.
Section 194 relates to prohibition
of forward dealing in shares and
debentures of the company.
Key functions of the Board

as per Listing Agreement
The following are the key functions of the Board as per Clause
49 I.D.2 of Listing Agreement:
Reviewing and guiding corporate strategy, major plans of action, risk policy, annual budgets
and business plans; setting performance objectives; monitoring
implementation and corporate
performance; and overseeing major capital expenditures, acquisitions and divestments.
Monitoring the effectiveness
of the companys governance
practices and making changes as
needed.
Selecting,
compensating,
monitoring and, when necessary,
replacing key executives and
overseeing succession planning.
Aligning key executive and
board remuneration with the longer term interests of the company
and its shareholders.
Ensuring a transparent board
nomination process with diversity of thought, experience, knowledge, perspective and gender in
the Board.
Monitoring and managing
potential conflicts of interest of
management, board members
and shareholders, including misuse of corporate assets and abuse
in related party transactions.
Ensuring the integrity of the
14
companys accounting and financial reporting systems, including

the independent audit, and that
appropriate systems of control
are in place, in particular, systems for risk management, financial and operational control, and
compliance with the law and relevant standards.
Overseeing the process of
disclosure and communications.
Monitoring and reviewing
Board Evaluation framework.
Clause 49 I.D.3 of the revised
Listing Agreement sets out the
other responsibilities of the
board, which is a mixed list of
duties as well as powers. This list
has the following items:
The Board should provide
the strategic guidance to the company, ensure effective monitoring
of the management and should
be accountable to the company
and the shareholders.
The Board should set a corporate culture and the values by
which executives throughout a
group will behave.
Board members should act
on a fully informed basis, in good
faith, with due diligence and care,
and in the best interest of the
company and. the shareholders.
The Board should encourage
continuing directors training to
ensure that the Board members
are kept up to date.
Where Board decisions may
affect
different
shareholder
groups differently, the Board
should treat all shareholders
fairly.
The Board should apply
high ethical standards. It should
take into account the interests of
stakeholders.
The Board should be able to
exercise objective independent

judgement on corporate affairs.
Boards should consider assigning a sufficient number of
nonexecutive Board members capable of exercising in-dependent
judgement to tasks where there is
a potential for conflict of interest.
The Board should ensure
that, while rightly encouraging
positive thinking, these do not result in over-optimism that either
leads to significant risks not being
recognised or exposes the company to excessive risk.
The Board should have ability to step back to assist executive management by challenging the assumptions underlying:
strategy, strategic initiatives (such
as acquisitions), risk appetite, exposures and the key areas of the
companys focus.
When committees of the
board are established, their mandate, composition and working
procedures should be well defined and disclosed by the board.
Board members should be
able to commit themselves effectively to their responsibilities.
In order to fulfil their responsibilities, board members should
have access to accurate, relevant
and timely information.
The Board and senior management should facilitate the
Independent Directors to perform their role effectively as a
Board member and also a member of a committee.
Revised Clause 49 II D(3) of
Listing Agreement provides that
the Board of Directors shall periodically review legal compliance
reports of all laws applicable to
the company prepared by the
ARTICLE
company as well as steps taken
by the company to cure instances
of non-compliances.
multiple countries, the risk of

non-compliance increases significantly as such organizations
need to also comply with global
legislations.
The Companies Act, 2013 is a

landmark piece of legislation,
it besides laying down the
Duties and Liabilities of

Independent Directors
The primary task of independent
directors is to adopt an oversight
role and to ensure that the corporate assets are used in the best
interest of the company while
balancing the interests of all
stakeholders. The independent
director must ask for information
about the company s operations
and finances. If he does not get it,
he must take steps to pursue the
matter.
Code for Independent directors
in Schedule IV of the Companies
Act, 2013 specifically lays down
the Guidelines for professional
conduct, role, functions and duties of independent directors, significant amongst which are helping in bringing an independent judgment to bear on
the Boards deliberations especially on issues of strategy, performance, risk management, resources, key appointments and
standards of conduct
duties, responsibilities of the
Every director including independent director is therefore advised to ask following questions
to ensure compliance with good
governance:
directors provides Guidance

in the form of Code for
Independent Directors. The
Act also provides for progres-
Are the systems so well set

that the right tone at the top is
communicated at all levels?
sive reforms like directors

training, performance evaluation of directors. Corporates
What effective mechanism do

we have to assess risk?
and corporate directors need

to ensure that these provi-
Are the systems/procedures

/policies and process to address
risk adequate?
sions are not to be seen as a

compliance exercise. By introducing such provisions, the
What steps are taken to

promote compliance and penalize noncompliance in the
organization?
expectation of the regulators

is that that Indian corporates
meet up to the global stan-
How adequately is companys compliance cell resourced?
dards in terms of governance.
and impartially about any unethical behavior, violation of the

code of conduct, or any suspected
fraud in the company.
Responsibility of
for the Prevention and
Detection of Fraud
ascertaining and ensuring

that the company has an adequate
and functional vigil mechanism
Globally, with the evolving regulatory landscape, which makes

the board responsible for the prevention and detection of fraud,
directors have begun exercising
adequate oversight on the management of the risk of fraud.
Non-compliance of regulations
/ guidelines can have serious repercussions for directors, including their reputational loss and
personal liabilities.
paying sufficient attention

and ensure that adequate deliberations are held before approving
related party transactions and assuring themselves that the same
are in the interest of the company;
reporting concerns honestly
When the red flags are raised,

how are they dealt with?
Are we effectively trained in
various policies and processes?
acting within authority, assisting in protecting the legitimate interests of the company,
shareholders and its employees
attending actively and constructively most of the board and

committee meetings
What monitoring tools do

we have to detect fraud and
misconduct?
For directors of organizations

with operations spread across
Immunity to Independent
Directors under the
Companies Act, 2013
Sub-section (5) of Section 149 of
Companies Act, 2013 provides
that an independent director, can
be held liable only in respect of
such acts of omission or commission by a company:
which had occurred with his
knowledge attributable through
Board processes, and
with his consent or connivance; or
15
ARTICLE
the Boards and shall not act as
Chairman of more than 5 committees/sub-committees of the
Boards across Boards of CPSEs
companies in which he/she is a
director. Furthermore, each nonofficial director should inform
the company about the committee/ sub-commit-tee positions he/
she occupies in other companies
and notify change(s) as and when
they take place.
Liability relating to fraud

where he had not acted
diligently.
Act of omission implies failure
to act where the law requires
him to act. Act of commission
implies an act conducted so as to
cause harm. Connivance means
indirect consent to the commission of offence. Here, the knowledge should arise through Board
processes i.e. from any proceedings of the Board or through
participation in Board meetings
or meetings of any committee of
the Board and any information
which the director is authorized
to receive as director of the Board
as per the decision of the Board.
Knowledge coming from external sources has not been referred
here. Acted diligently means
that the director should have taken steps to avoid the act of contravention, as much as possible.
Duties of Non-Official
Directors in CPSEs
The Ministry of Heavy Industries
and Public Enterprises came
up with draft Model Role and
Responsibilities for Non-Official
Directors on the Board of CPSEs
on 28th December, 2012 later
modified on 20th June, 2013. The
16
model enlists duties of non-official directors. These duties are in

consonance with the duties cast
under the Companies Act, 2013,
however with some additions as
specifically stated hereunder:
not to use confidential information acquired in the course of
their service as non-official director for their personal advantage
or for the advantage of any other
entity;
keep the Board informed
in an appropriate and timely
manner any information in the
knowledge of the member which
is related to the decision making or is otherwise critical for the
company;
furnish a report to the Board
about his role and contribution
during the year.
be acquainted with the applicable laws and understand that
the liability that may arise, where
a company violates any law and
for the purpose should get a list
of applicable laws to the company and understand the penal provisions for contraventions under
those laws.
not be a member on more than
10 committees/sub committees of
Fraud has been comprehensively

defined under Sec 447 of the new
Act, thus fraud in relation to affairs of a company or any body
corporate, includes any act, omission, concealment of any fact or
abuse of position committed by
any person or any other person
with the connivance in any manner, with intent to deceive, to gain
undue advantage from, or to injure the interests of, the company
or its shareholders or its creditors
or any other person, whether or
not there is any wrongful gain or
wrongful loss. Few actions treated as fraud under the provisions
of Act are as thus:
Incorporation of a company:
furnishing any false or incorrect
information or suppression of
any material information.
Mis-statements in Prospectus: Where a prospectus, issued, circulated or distributed
includes any statement which is
untrue or misleading in form or
context in which it is included or
where any inclusion or omission
of any matter is likely to mislead.
fraudulently inducing persons to invest money: Any person who, either knowingly or
recklessly makes any statement,
promise or forecast which is
false, deceptive or misleading, or
ARTICLE
deliberately conceals any material facts, to induce another person
to invest money
Deposits had been accepted
with intent to defraud the depositors or for any fraudulent
purpose.
Where business of a company has been or is being carried
on for a fraudulent or unlawful
purpose, every officer of the company who is in default shall be
punishable for fraud
Furnishing
of
False
Statement (Section 448): If in
any return, report, certificate, financial statement, prospectus,
statement or other document required by, or for, the purposes of

this Act or rules thereunder, any
person makes a statement,- Which is false in any material
particulars, knowing it to be false;
or
Which omits any material
fact, knowing it to be material, he
shall be liable under clause 447.
Fraud is punishable under the
Act. The section provides that
any person who is found to be
guilty of fraud, shall be punishable as under:
imprisonment not less than
six months but which may extend

to ten years
fine not less than the amount
involved in the fraud, but which
may extend to three times the
amount involved in the fraud:
Further it provides that where the
fraud in question involves public
interest, the term of imprisonment shall not be less than three
years.
Therefore, directors need to be
extremely cautious that no false,
incorrect or misleading information is given, which can make
them liable for fraud.
Comparative Analysis of Penal Provisions under Companies Act 1956 & Companies Act, 2013
Section
Particulars
Companies Act 1956 (Penalty

and Persons Liable)
Penalty under Companies

Act, 2013
Persons Liable under

Companies Act, 2013
Incorporation of Company: untrue

and incorrect information is
submitted and material information suppressed at the time of
incorporation of company
No Provision
a) Imprisonment - six
months to ten years and
b) Fine 100% to 300% of
the amount involved in the
fraud
First directors, promoters,

persons connected with
incorporation
34
Criminal liability for mis-statements in prospectus: Untrue or

Misleading statement in form or
context in the prospectus
every person who authorised

the issue of the prospectus
Imprisonment upto two years,
or fine which upto five thousand rupees, or with both.
b) Fine 100% to 300% of
fraud
Every person who authorizes the issue of such

prospectus
36
Fraudulently inducing persons

to invest money: knowingly or
promise or forecast which is
false, deceptive or misleading, or
deliberately conceals any material
facts, to induce another person to
invest money
Any person who, is associated

with inducing persons to invest
money. Imprisonment upto five
years, or fine upto ten thousand
rupees, or with both.
b) Fine 100% to 300% of
fraud
Any person who, is associated with inducing

persons to invest money
42
Contravention of provisions of private placement: where the company makes an offer or accepts
monies being non- compliant of
the provisions of the section
No Provision w.r.t private

placement
Amount involved in the offer

or invitation or two crore
rupees, whichever is higher.
Company, its promoters

and directors
75
Damages for deposit fraud:

Deposits had been accepted with
intent to defraud the depositors
or for any fraudulent purpose.
No Provision
b) Fine 100% to 300% of
fraud
every officer of the company who was responsible for the acceptance
of such deposit
100
Conduct of extraordinary general

meeting: Non-Compliance with
provisions of conducting EGM on
the request of the members
Directors who were in default

in calling the meeting shall
reimburse reasonable expenses
incurred by the requisitionists
in calling the meeting
Reimbursement of reasonable expenses incurred by

the requisitionists in calling
the meeting
Directors who were in

default in calling the
meeting
17
ARTICLE
102
Statement to be annexed to
notice of general meeting: appropriate disclosure in the statement
annexed to notice of annual
general meeting.
No penal provision
In case any benefit accrues

on account of non-disclosure
or insufficient disclosure,
compensate the company
to the extent of benefit received. Fine for noncompliance of provisions- fifty
thousand rupees or five
times the amount of benefit
derived whichever is more
Promoter, director,
manager or other key
managerial personnel
127
Distribution of dividends: Failure

to pay dividend/warrant post
declaration of dividend within 30
days from the date of declaration
Every director of the company

if he is knowingly a party to
default. Simple imprisonment
upto seven days and shall also
be liable to fine of one thousand rupees for continuation
of default
Director: Imprisonmentupto two years and with Fine

upto one thousand per
rupees per day of continuation of default.
Every director of the company if he is knowingly a

party to default.
128
Books of accounts: Non- compliance with maintaining the books

of accounts and other relevant
books, papers and financial statement, for every financial year for
the company and keeping at its
registered office
MD or Manager and all officers

and other employees of the
company and in absence of
MD or manager every director
of the company. Imprisonment
upto six months, or with fine
upto one thousand rupees, or
with both.
Imprisonment - upto one

year; or Fine - fifty thousand
rupees to five lakh rupees;
or with both imprisonment
and fine
MD, the WTD in charge of

finance, the CFO or any
other person charged to
comply with provisions of
section
129
Director of the company or

Financial statement: nonCompliance of provisions while
person held responsible for the
preparation of financial statement. same. Imprisonment upto six
months, or with fine upto one
thousand rupees, or with both.

rupees to five lakh rupees;
and fine
MD, the WTD in charge of

finance, the CFO or any
other person charged to
comply with provisions
of section and in absence
of any of the above all
directors
137
Copies of financials statements to

be filed with the registrar: Failure
of filing financial statements along
with the relevant attachments
with the registrar within the time
specified under section 403
every officer of the company

who is in default. Fine upto fifty
rupees for every day during
which the default continues.
Imprisonment - upto six

months; or
Company, MD and CFO, if

any and if not, then any
director responsible and
in the absence of any
such director, all such
directors
Appointment of directors:
Contravention of section 152, 155,
156 relating to appointment of
director and furnishing DIN
Every such individual or director or the company, as the case

may be, who or which, is in
default. Fine upto five thousand
rupees and with a further
fine which up to five hundred
rupees for continuing default
for every day
Imprisonment - upto six

months; or
165
Number of directorships:
Acceptance of appointment as a
director in contravention of the
provisions of this section i.e. 10
in case of public companies and
maximum 20 companies
Director: Fine upto fifty thousand rupees in respect of each

of those companies after the
first fifteen.
Fine - five thousand rupees

to twenty-five thousand
rupees for every day of continuing default
The person proposed to

be appointed as director
166
Duties of directors: Failure to act

in accordance with the articles of
association and according to provisions mentioned in section 166
No provision
Fine - one lakh rupees to five

lakh rupees
Director
159
18
Fine - one lakh rupees to five

lakh rupees; or with both
imprisonment and fine
Such individual or director of the company
Fine upto fifty thousand

rupees and fine of five hundred rupees for every day of
continuing default
ARTICLE
167
Vacation of office of the director:

Continuation of functioning as a
director even after knowing that
the office of director held by him
has become vacant on account of
any of the disqualifications
Director: Fine which may

extend to five thousand rupees
for each day on which he so
functions as a director.

year or Fine - one lakh
rupees to five lakh rupees,
and fine
Director
184
Disclosure of directors interest:

Failure to make disclosures of
directors interest in accordance
with the provisions of the Act
Director: fine upto fifty thousand rupees.
Imprisonment upto one

rupees to one lakh rupees;
and fine
Director
194
Prohibition on forward dealings in

securities: Contravention of provisions of the section
No provision
imprisonment for a term

which may extend to two
years or with fine which
shall not be less than one
lakh rupees but which may
extend to five lakh rupees, or
with both.
Director or KMP
195
Prohibition on insider trading of

securities: contravenes the provisions of this section If any person,
he shall be punishable with
No provision
Imprisonment for a term

which may extend to five
years or with fine which shall
not be less than five lakh rupees but which may extend
to twenty-five crore rupees
or three times the amount of
profits made out of insider
trading, whichever is higher,
or with both.
Director or KMP
The profound penal provisions

embedded in the Act itself highlights the importance of ethical expectations from directors.
This provisions strengthens the
corporate governance and infuse
a new sense of understanding,
commitment and responsibility on the directors who constitute the Boards of Indian companies. This will keep them on
their feet invigorating perform
a more active role in the best interest of the companies and the
stakeholders.
Conclusion
The duties of directors are partly statutory, partly regulatory
and partly fiduciary and their
responsibilities are quite onerous and multifarious. The Board
It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.
- Josiah Charles
functions on the principle of

majority or unanimity. A single
director can not take decisions,
at the same time, the voice of
each director is sacred. Each
director is expected to keep
the big picture in mind and
simultaneously bring in his
unique contribution. Therefore
it is important that each director
understands his role and responsibilities. A director should be
able to give his opinion without
fear or favour in the best interest of the company. He should
facilitate the smooth board functioning but not at the cost of any
wrong decisions.
The Companies Act, 2013 is a

landmark piece of legislation, it
besides laying down the duties,
responsibilities of the directors
provides Guidance in the form of
Code for Independent Directors.
The Act also provides for progressive reforms like directors
training, performance evaluation
of directors. Corporates and corporate directors need to ensure
that these provisions are not to be
seen as a compliance exercise. By
introducing such provisions, the
expectation of the regulators is
that that Indian corporates meet
up to the global standards in
terms of governance.
19
ARTICLE
CORPORATE SOCIAL RESPONSIBILITY:
Saviour of SocioEconomic, Environmental &

Governance Issues
Dr. B. B. Goel
Prof. of Public Administration (Retd.)

Punjab University.
With enactment of Companies Act (Section 135) and Rules notified on 27.2.2014, India has
become the only country in world with legislated, self regulated & self compliant CSR.
iewed with different connotations like Citizens

Social
Responsibility,
Collective Social Responsibility,
Individual Social Responsibility,
Responsibilities of Business, Corporate Accountability, Corporate
citizenship, Responsible entrepreneurship, let us clarify them
before explaining CSR rationale.
Citizens Social Responsibility
constituting a part of Charter/
Constitution having certain rights
has to be diligently discharged
within family/ group/ society.
Collective Social Responsibility
enjoins upon leadership to maintain internal/ external security,
foreign relations, integrity and
sovereignty of nation. Under
Individual Social Responsibility,
business tycoons are doling billions of money for welfare of
Poor or for building their own
parallel empire out of companys wealth which legally and
rightfully belongs to shareholders. Conversely, instances galore where personalities like Bill
20
Gates, Warren Buffett, Tony Blair,

Azim Premji etc., have selflessly
raised banner of philanthropic
policy. They call upon corporate
heads to stop profit maximization, contribute for social cause,
and commit giving back to communities. These activities however, remain discretionary and
standalone. The crux of conclave
of wealthiest recently gathered at
Bangalore to take philanthropy
rightly concluded How to give to
maximize social impact instead
of How much to give. Advocates
for Responsibilities of Business
favour extending CSR scope to
multi-stakeholders. It implies
that Business has to engage itself
in extra market activities to keep
Social good in mind.
rather than distinct entities. The

emerging partnership between
corporate sector and society is
popularly known as CSR. To
some, CSR is a missing link between corporate governance and
firm performance. It not only
enhances image and credibility
of an enterprise, but also significantly improves employee performance and job satisfaction.
Corporate Social
Responsibility
Adam Smith and Friedman plead

that a Business enterprise concerns profit maximization and
societal function is responsibility of Government. To them,.
The business of Business is business the social responsibility of
There is no unanimity on CSR

definition. World over, it aims at
integration of business and social
needs on the premise that business and society are interwoven
CSR is a universal phenomenon,

voluntary and hardly costs to the
enterprise. It is neither a charity
nor donation. Corporates move
faster towards CSR in view of
stakeholders expectations; maintaining transparency; addressing environmental concerns; and
competing for wealth creation for
society.
ARTICLE
business is to increase its profits.
However, Robert Dahl countering these views observes Today,
it is absurd to regard the corporation simply as an enterprise
established for sole purpose of
allowing profit making. We,
the citizens, give them special
rights, powers and privileges, on
the understanding that their activities will fulfill our purposes.
Corporations exist because one
allows them to do so. And we
allow them to exist only as they
continue to benefit us. In short,
an enterprise owes a debt to be
given back to society from which
it has amassed huge profits.
DPE Guidelines on CSR

& Sustainability
Department of Public Enterprises
has been evincing interest in
formulation,
implementation
and monitoring of Corporate
Governance Guidelines including CSR. These are mandatory for
listed CPSEs/unlisted subsidiaries
(March 2010). The latest CSR and
Sustainability Guidelines (from
April 2013) have main thrust on
capacity building, empowerment of communities, inclusive
growth, environment protection,
backward regions etc. A CPSE
has to select one project in each
category: (i) inclusive growth of
society and backward districts
of the country; and (ii) environment sustainability. However, a
Maharatna company has to take
up an additional project. A Board
Level Committee and designated
nodal officers team constitute
two tier structure to steer CSR
agenda.
Board resolution is required to
allocate yearly budget (1-5% depending on profit) as a percentage of net profit. Sick/loss making
companies or having negative net

worth are exempted. CSR budget
though not lapsable, an enterprise has to disclose reasons for
not spending. If funds remain
unspent for two years, these are
transferable to Sustainability
Fund. 5% of annual CSR budget
(extendable by another 5%) can be
earmarked for emergency needs.
As a policy, employees cannot
be direct CSR beneficiaries. CSR
monitoring is exercised by Board.
The real evaluation is performed
by DPEs Task Force on MOU.
Eight marks (out of 100) are allocated to evaluate performance. A
CPSE is also required to include
a paragraph in Annual Report
CSR regime, being an

on-going process, is a
pioneering effort and is
gaining popularity internationally. Its widening
ambit in accessing capital
and markets, improved
productivity, brand image, customer royalty etc.,
is indeed laudable.
highlighting physical/ financial

progress of projects.
CSR Policy Rules 2014

under 2013 Act
With enactment of Companies
Act (Section 135) and Rules notified on 27.2.2014, India has become the only country in world
with legislated, self regulated &
self compliant CSR. According
to Ernst & Young, India having 16245 registered companies
would spend Rs.22000 crores
during 2014-15(Economic Times
5.6.14). As a result, SEBI has already amended corporate governance norms from 1.10.14 while
DPE is revisiting CPSEs CSR
Guidelines and may bring them
out by year end.
Any company having net worth
of Rs.500 crore or turnover of
Rs.1000 crore or net profit of Rs.5
crore in a fiscal year has to spend
2% average net profits of preceding three financial years. The net
profit threshold limits constitutes
a lions share under CSR net.
Section 135 however, is not applicable to a company which ceases
to meet the aforesaid criteria for
three consecutive years. Net profits before tax do not include dividend income received from other
21
ARTICLE
Indian companies or profit arising from branches outside India.
While the Act used CSR merely
as nomenclature, Rules provide
clear cut definition, scope and application. It allows companies to
engage in activities in Schedule
VII or projects/programs undertaken by Board of a company in
pursuance of recommendations
of CSR Committee as per declared
CSR policy. It implies flexibility
to choose preferred engagements
that are in conformity with CSR
policy (Finance Ministers budget
speech incorporating slum redevelopment in CSR). Similarly,
although contributions towards
disaster management are not
covered in list of CSR activities,
companies spending on relief
meant for flood hit J&K facing a
humanitarian disaster of enormous proportion, have been permitted to do so. Besides, Ministry
of Corporate Affairs has rightly
rejected Finance Ministrys proposal under the same Cabinet
Minister to exempt banks from
2% mandatory CSR norms owing to their capital constraints.
Otherwise, this would have
opened a pandora box for other
entities to come up with such
lame excuses.
The Board has to constitute three
members CSR Committee including one independent director (exception private/unlisted companies having two directors). The
Committee forms a core team,
formulates CSR policy, recommends amount of CSR spend and
develops operating structure and
monitoring mechanism for implementation. A comprehensive
report on CSR containing specified particulars based on comply
or explain framework has to be
annexed with annual report of
Company. Besides, companys
22
website has to display CSR policy.

Companies have three options to
implement CSR policy: (a) directly through employees; (b) third
party arrangement (registered
society/ trust/Section 8 company)
having track record of three years
in line; and (c) collaboration with
others (provided these report
separately as per Act).
Clarifications on CSR
Policy Rules 2014
In light of varying views expressed by industry, professionals and academia, Ministry
of Corporate Affairs has clarified provisions under Section
135 as also amended/substituted
Schedule VII (notification dated
18.6.2014):
Schedule VII entries are
broad based and illustratively
mentioned in Annexure.
One of the events, like marathon/awards/contribution/advertisement/TV sponsorship are not
CSR expenditure.
Expenses for fulfillment of
any act/ statue ( labour law, land
acquisition) or expenditure in
normal course of business or any
program exclusively for benefit of
employees/families are not CSR.
Donations to political parties

are prohibited.
Social business projects are
not a part of Schedule VII.
Surplus CSR funds are not
CSR profits.
Projects undertaken in India
alone count CSR.
Salary paid to regular staff
in proportion to companys time
spent specifically on CSR is CSR
cost. Besides, provision up to 5%
of CSR budget can be factored for
training and capacity building of
employees and CSR implementing partners.
Expenditure by foreign holding companies qualifies for CSR
spend only if routed through
Indian subsidiary.
Contribution to corpus of
trust/society/section 8 company
qualifies CSR if (a) created exclusively for undertaking CSR or
(b) where corpus is created exclusively for related subjects covered in Schedule VII.
Efficacy of CSR
CSR has made great inroads
in SBI, LIC, IOC, SAIL, NTPC,
ONGC, BHEL, CIL and other
public enterprises.
ARTICLE
In order to oversee companies
CSR initiatives, Coal India Board
recently cleared a proposal to
raise new cadre of 120 officers. It
would however, be a novel idea
if all CPSEs form an independent
entity under DPEs umbrella having scale and resources to plan
and execute CSR activities and
free themselves from this responsibility. Pooling of funds has a
multiplier impact than an individual CPSE can achieve.
CSR has become a buzz word in
job market. Companies have to
attract brightest talent to achieve
CSR activities. Accordingly, CSR
course as a part of MBA can be
introduced to build a think tank
of CSR professionals, consultants
and specialists. While New Delhi
Institute of Management has
made a debut in sensitizing students, move of Indian Institute of
Corporate Affairs to launch nine
months CSR program is laudable.
Grey Areas of Concern

Discussions with captains of industry/professionals reveal that
2013 Act/CSR Rules 2014 have inherent limitations:
No clarity whether company
failing to meet 2% obligation is
violating law and liable to penalty. Similarly, no definite clue
whether company shall have to
make good past shortfall in future year.
Foreign companies term CSR
mandate as an additional tax over
and above corporate taxes.
Mandatory CSR is viewed as
a back door entry to increase tax
without following transparent
political system.
No clarity whether any CSR
surplus shall count as CSR fund
for next year.
industrys apprehensions on impact of CSR contribution from tax

deductions deserve merit.
The Board has to constitute three members CSR

Committee including one
Residual clause under the

Act providing unbridled powers
to Government virtually defeats
purpose of bringing Schedule VII.
independent director (exception private/unlisted

companies having two
Absence of any penal provisions for not undertaking CSR

activities especially in Indian setting, dilutes CSR mandate.
directors). The Committee

forms a core team, formulates CSR policy,
Exclusion of Social Business

Projects from original Schedule
VII of the Act through CSR Rules
notification seems to be repealing/
modifying powers of Legislature.
recommends amount of
CSR spend and develops
operating structure and
monitoring mechanism for
implementation.
Unlike Section 135, CSR rules
broaden the term company to
the one incorporated in India including a foreign company having branch or project office thereby inviting judicial scrutiny.
The Act prefers CSR spending in local area. If a company
has more than one operational
office (factory, corporate office),
there is ambiguity as to which
location has to be target. Besides,
rural poor may not be benefitted.
The Act prescribes identified
set of activities in Schedule VII
while CSR activities in Rules are
illustrative and not exhaustive.
The State under CSR garb
passes the buck towards social
development to private sector.
Rules
exceed
Delegated
legislation as companies issue
cheques (PM Relief Fund) instead
of carrying out activities on the
ground.
Section 37(1) of Income Tax
Act explicitly allows business expenditure if it is wholly or exclusively for business. Accordingly,
Companies under cover of

overseas companies or branches
can indulge in fake transactions
and project lower net profits for
reduced quantum of CSR spending in India.
These misgivings need to be addressed expeditiously. Then only,
CSR as a part of financial inclusion
can meet acid test of sustainability,
transparency and accountability.
MCA is likely to come out with
FAQs on CSR shortly for speedy
implementation of CSR policy.
Finally, incentive schemes should
be devised to inject competition
within an enterprise for implementing CSR. No laxity should be
afforded to defer execution of projects on flimsy grounds. Besides,
community may be awakened to
contribute a fraction of matching
funds to arouse their interest in
CSR ventures. Then only, Indian
CSR can counter global benchmarks and evolve best practices.
To conclude, CSR regime, being
an on-going process, is a pioneering effort and is gaining popularity internationally. Its widening
ambit in accessing capital and
markets, improved productivity,
brand image, customer royalty
etc., is indeed laudable.
23
ARTICLE
One Person
Company (OPC)
Prof. Pankaj Varshney
Associate Professor (Finance)
Lal Bahadur Shastri Institute of
Management
ndia is on a threshold of entering into a new era of rapid

economic growth and development. It is going to be the
manufacturing hub with foreign
direct investment being invited
on a large scale. While large scale
businesses will be established
with domestic and foreign investments, micro, small and medium
enterprises have also to play an
important role often a complimentary to large enterprises.
After the enactment of Micro,
Small, and Medium Enterprises
Development Act in 2006, the government has paid special attention to their development. A separate ministry for such enterprises
has been created at the Centre.
Commercial banks are providing
financial assistance to such enterprises on an enlarged scale with
liberal support from the Small
Industries Development Bank of
India (SIDBI). Banks are encouraged to provide collateral free
loans to such enterprises upto
` One crore. A credit guarantee
scheme protects the interest of the
banks. Venture Capital funds also
provide resources for innovative
projects. Several Entrepreneurial
Development Institutes have been
set up to explore and develop entrepreneurial talent. The outcome
24
A modified corporate form

to boost entrepreneurship
of all these efforts has been quite
encouraging not only existing
businesses but many young engineers and management graduates have voluntarily opted to
be entrepreneurs. However, they
are often constrained by the fact
that their personal solvency and
well-being remains vulnerable
to the fortunes and risk of their
business enterprises. Establishing
a joint stock company is a time
consuming and tedious process
while partnership and sole-proprietary business involve unlimited liability. It is to overcome
these constrains of unlimited liability that the new Companies
Act has incorporated for the first
time a simpler form of business
organization i.e. One Person

Company. The Companies Act,
2013 has introduced the concept
of One Person Company, which
is considered to be one of the major highlights of the new legislation. Although prevalent in many
countries such as the US, UK,
Singapore, Australia, and China,
the idea of One Person Company
(OPC) was first suggested in
India by the J.J.Irani Committee,
with the view to give an outlet
to the entrepreneurial capabilities for participation in economic
activity.
One Person Company

- Defined
One Person Company (OPC) has
ARTICLE
been defined by the Companies
Act, 2013 as a company which
has only one member (or shareholder). Any natural person
who is resident of India for more
than 182 days in the preceding
calendar year may subscribe to
the Memorandum and Articles
of Association of an OPC. The
Memorandum should also name
another person a nominee, who
shall, in the event of the death of
the subscriber or his incapacity
to contract, would become the
member of the company. Such
nominee is required to give his
consent in writing. The nominee
can however, withdraw his written consent at any time he wishes
to. Similarly, the member shareholder may also change nominee
at any time, and replace him/her
with another nominee. The Act
provides for the liability of member to be limited by shares, or
guarantee or it may be an unlimited liability company. The minimum paid-up capital of an OPC is
required to be Rs. 1 Lac. Further,
the company would have to mention One Person Company in
brackets below its name in all its
communications and signages.
As per Section 149 (1)(a), the minimum number of directors in an
OPC is one, although there is no
bar on appointment of more than
one director.
Only natural Indian residents are
allowed to become shareholders
of an OPC, which means that body
corporates or foreigners cannot
set-up an OPC. No person is allowed to incorporate or become a
nominee of more than one OPC.
A minor is also not allowed to become a member or a nominee in
an OPC or hold shares with beneficial interests.The law lays down
certain restrictions that have been
imposed on the type of activities
The Companies Act,

2013 has introduced the
concept of One Person
Company, which is considered to be one of the
major highlights of the
new legislation. Although
prevalent in many countries such as the US, UK,
Singapore, Australia,
and China, the idea of
One Person Company
(OPC) was first suggested
in India by the J.J.Irani
Committee, with the view
to give an outlet to the
entrepreneurial capabilities for participation in
economic activity.
the company needs to obtain a

No objection certificate from its
members and creditors which has
to be filed with the Registrar with
prescribed fees and documents.
On the other hand, if the paid-up
capital of an OPC exceeds ` 50
Lac or the average annual turnover during the preceding three
years exceeds ` 2 crores, the OPC
will not be treated as an OPC.
Within 6 months of crossing these
threshold limits, the OPC would
have to amend its Memorandum
and Articles of Association by
passing relevant resolution under
section 122 of the Act. The OPC
would also be required to inform
the Registrar of the fact that it is
no longer an OPC, by filing Form
INC 5.
which an OPC may undertake,

for example an OPC cannot carry
on the business of investments in
securities of body corporates. It
cannot be incorporated as or be
converted into a Not-for-profit
company. Further, an OPC cannot be converted into any other
type of company private limited
or public limited company with
more than one shareholder, unless 2 years have lapsed from the
date of incorporation of the OPC.
One of the main advantages of an

OPC is that being a private limited company, it enjoys the status
of a separate legal entity with the
liability of its sole member being
limited to the unpaid amount of
share capital. Besides the limited liability of an OPC, they
have been provided with certain
privileges and exemptions so that
small businesses may adopt this
corporate form of organization
and at the same time remain free
from compliances of various restrictions for the corporate form.
Conversion of a Private
Limited company into an
OPC and vice versa
A private limited company (other
than a company registered under
Section 8 of the Companies Act,
2013 i.e. a Not-for-profit company) with a paid-up capital of `
50 Lacs or less or an average turnover of ` 2 crore or less, may convert itself into an OPC by passing
a Special resolution at its AGM.
Before passing such a resolution,
Privileges & Exemptions of

an OPC
As a one person company, its

board would have just one director (Sec 149 (1)(A)), although
there is no bar on appointment of
more than one director, as against
the requirement of a minimum of
two directors in a private limited
company and three directors in
case of a public limited company.
An OPC is exempt from holding
the Annual General Meeting under Section 96(1) of Companies
25
ARTICLE
Act, 2013. It is also exempt from
preparing and presenting the
Cash Flow Statement as part of
its Financial Statements under
Sec. 2(40), while it is mandatory
for other types of companies. As
per Section 92(1), an OPC may get
the Annual Return to be signed
by the Company Secretary or in
his absence, by the Director of the
company. Similarly, the Financial
Statements need to be signed by
only the Director and submitted
to the auditors.
As a one person company with
only one director, requirement of
holding quarterly board meetings
is not necessary. It is sufficient
enough to record the resolutions
in the minutes book and signed
by the Director. It would be sufficient if at least one board meeting is conducted in each half of
a calendar year and the gap between the two meetings should
not be less than 90 days. Also, the
requirement of quorum for Board
meetings will not apply in case
of OPCs. The Directors report of
an OPC needs to include only explanation of qualifications or adverse remarks of the auditors and
not all the other information as
required by Section 3 needs to be
included.The provisions relating
to sending of notice atleast 7 days
prior to Board meeting, participation through video conferencing or other audio video means
also do not apply, if the OPC has
only one Director on its Board.
The provision relating to the appointment of an individual as an
auditor for more than one term
of five consecutive years and an
audit firm as an auditor for more
than two terms of five consecutive years shall not apply to OPC.
Thus, the process of incorporating and running an OPC is
relatively simpler than a private
26
OPCs are expected to assist

small entrepreneurs whose
scale of operations is limited and want to take advantage of the limited liability status of the OPC and
concentrate on their businesses. Since April 1, 2014,
when the new Companies
Act became effective, there
has been enthusiastic response to OPCs as evident
from the number of OPC
getting registered - 68 companies in June, 183 in July
and 218 in August, 2014.
It is expected that OPC will
become popular amongst
the budding entrepreneurs
in days to come.
limited company which would
enable an entrepreneur to focus
on his business rather than over
burdened with compliances of
various regulatory processes.
Higher Tax burden - a

disadvantage
Only a natural person who is an
Indian resident can be the member of an OPC. Hence investment
by foreign companies/ funds in
the equity of such companies
would not be allowed, which will
restrict the size of the business undertaken by such companies. The
concept of OPC may not appeal to
small proprietorship firms to convert themselves into an OPC as at
present corporate income tax is
levied at a flat rate of 30.9% which
is quite high as compared to the
slab rate prescribed for individuals. Similarly, if an OPC declares
dividends, it will have to pay

Dividend Distribution Tax which
is presently levied @ 16.95% (base
rate of 15% plus surcharge @ 10%
plus cess @ 3%). This is in addition
to the income tax @ 30.9% while
individuals have to pay only the
income tax on slab basis. Another
disadvantage of an OPC is that if
an owner withdraws any amount
from the business, it is not treated
as deemed dividends, but if the
sole shareholder in an OPC takes
loan from the OPC and the company has distributable profits, the
loan is treated as deemed dividend to the extent of distributable profits under Section 2(22)(e)
of the Income Tax Act, 1961.
Limited Liability Partnerships
(LLPs) also offer the benefit of
limited liability without the baggage of compliance and disclosures as required for private limited or public limited companies.
Hence, OPCs would have to compete with LLPs, which however,
require more than one person to
incorporate. In conclusion, the
Indian entrepreneur now has one
more very useful form of business
organization available to him for
exploring his entrepreneurial
ability. OPCs are expected to assist small entrepreneurs whose
scale of operations is limited and
want to take advantage of the limited liability status of the OPC and
concentrate on their businesses.
Since April 1, 2014, when the new
Companies Act became effective,
there has been enthusiastic response to OPCs as evident from
the number of OPC getting registered - 68 companies in June, 183
in July and 218 in August, 2014. It
is expected that OPC will become
popular amongst the budding entrepreneurs in days to come.
ARTICLE
The New Companies Act:
Mr. A. K. Rastogi
Step towards
better Governance
Executive Director &

Company Secretary, NTPC
n receiving the assent of

the Honble President of
India on August 29, 2013,
Companies Act, 2013 (referred as
Act or New Act) was notified on
August 30, 2013 (Act 18 of 2013).
It consists of 470 Sections and 7
Schedules and it aimed to improve corporate governance, simplify regulations, enhance the interests of minority investors. The
new Act is more a rule-based legislation and the substantial part
of the legislation is in the form
of rules. The new act is being
implemented in a phased manner. Till now 282 sections of the
Companies Act has been notified.
The Companies Act 2013 envisages radical changes in the area
of Corporate Governance and is
set to have far-reaching implications. The new regime is expected
to significantly change the manner in which corporates operate in India. The New Act has
made several significant changes,
which seek to redefine the board
governance. Overall, the new
Act aims to raise the governance
profile of Indian companies and
their boards, at par with the roles
and responsibilities assumed by
boards globally. In this article, an
attempt has been made to touch
upon some of key changes introduced by the Companies Act,
2013 which have implications on

the Governance structure of the
Company:
Composition of The Board

of Directors
Number of Directors
The 1956 Act prescribes minimum 2 directors for private and
3 directors for a public company. This criterion is retained
in the Act, but the maximum directors on the Board have been
raised from 12 to 15 and the Act
has also dispensed with the approval from Central Government
for raising the number of directors above the prescribed limit.
The Company may increase the
number of directors beyond 15
by passing special resolution.

The Board may consist of several
categories of directors including
whole-time directors, managing
directors, independent directors,
nominee directors and women
directors.
For the first time, the requirement of Independent Directors
has been introduced under the
Companies Act, 2013. Under the
Act and rules made thereunder,
the Board of listed companies are
required to have at least one-third
of total number of directors as independent directors and every
public companies with a paidup capital of ` 10 Crore or more
or turnover of ` 100 or more or
27
ARTICLE
outstanding loans, debentures
and deposits, exceeding Rs. 50
Crore are required to have at
least two independent directors.
The new act also prescribes a time
limit of one year for compliance.
Section 149 (6) of the Companies
Act, 2013 defines Independent
Directors and criterion of independence are more stringent
than the criterion envisaged earlier under the Listing Agreement.
Now
independent
directors
must, among other things, be
person of integrity, possess expertise and experience, not be a
promoter of the company or the
holding or associate company,
not be related to the promoter or
directors of the company, or the
holding or subsidiary or associate company, whose relatives not
have any pecuniary relationship
or transaction with the company
or the holding or associate company and neither he nor any of
his relatives hold any key managerial position in the company or
the holding or associate company.
Thus, Independent Directors are
expected to be completely unrelated to the company or its shareholders. Nominee Director are
kept outside from definition of
Independent Director.
Further, Schedule IV of the new
Act contains the guidelines
for professional conducts for
Independent Directors, role &
responsibilities of Independent
Directors, their duties and manner of appointment etc. These
measures have been introduced
with intention to ensure that the
independent directors shall act
in the interest of the company
and with no partiality towards
management.
Women Director
Every listed company and public
28
companies having paid up capital

of Rs. 100 cr. or more, or turnover
of Rs. 300 cr. or more, shall have
at least one Woman Director. This
requirement has been introduced
to facilitate gender equality in the
Board room. All the Companies
covered in aforesaid bracket have
been given 1 year time i.e. upto
1st April 2015 to comply with the
provision.
Resident Director
The section 149 also stipulates
that at least one director of the
company shall stay in India for
182 days or more in the previous
calendar year. This will ensure
that the Board shall continue to
monitor directly the management
of the company on a regular basis
and shall be responsible for acts
and deeds of the company. Their
continued presence will not delay
statutory action steps and will be
a step forward towards meeting
the timely corporate compliance
requirements.
This requirement was missing
in the old Act and foreign companies starting business in India
typically appoint foreign directors as the directors of the Indian
subsidiary. With the implementation of this prerequisite, foreign
companies doing business in
India will now have to appoint
at least one resident director or
Indian national to act as director
to comply with this qualification.
Role of Directors
The Companies Act, 2013 has
brought a paradigm shift by considerably enhancing the role of
the directors individually and
Board collectively. The Board of
Director is no longer a mere apex
decision making body. The new
Act introduces some new concepts which have increased the
role of Directors & Board. Section

166 specifically lays down following of duties of directors which
they are supposed to play.
Director to act in accordance
with AOA.
A director of a company shall
act in good faith in order to promote the objects of the company
for the benefit of its members as a
whole, and in the best interests of
the company, its employees, the
shareholders, the community and
for the protection of environment.
exercise his duties with due and
reasonable care, skill and diligence and shall exercise independent judgment.
not involve in a situation in which
he may have a direct or indirect
interest that conflicts, or possibly
may conflict, with the interest of
the company.
not achieve or attempt to achieve
any undue gain or advantage either to himself or to his relatives,
partners, or associates
not assign his office and any assignment so made shall be void.
Apart from above, Schedule IV
of the Act provides for duties,
role & responsibility of Directors
etc. and Section 149 cast duty
on independent directors and
company for their compliance.
With a view to improve transparency & accountability, the new
Act envisage that the Directors
Responsibility statement in the
Board Report shall disclose various additional matters including:
policy on directors appointment and remuneration.
ARTICLE
Particulars
Audit
Committee
Nomination
and Remuneration
Committee (NRC)
Applicability
Listed company & Public

company with paid up
capital >= 10 crores; or
Turnover of >= 100 crores;
or aggregate loans, borrowings, debentures or deposits
> 50 crores
Listed company & Public

company with paid up
capital >= 10 crores; or
Turnover of >= 100 crores;
or aggregate loans, borrowings, debentures or deposits
> 50 crores
Where total number of

shareholders, deposit
holders, debenture holders
and other security holder
exceeds 1,000 at any time
during a FY
Company having:
Minimum 3 directors, majority shall be Independent

Director
Minimum 3 or more
Non-Executive Director of
which at least shall be
independent.
To be decided by Board.
Chairperson shall be a nonexecutive director and such
other members as may be
decided by the Board
Minimum 3 Directors of
which at least 1 shall be
Independent.
Constitution
policies for regulatory compliance and risk management

and has to ensure that these are
operating effectively
manner of formal evaluation
of performance of the board
Liability of Directors
The new law assumes directors
and key management personnel
to be the sentinels of governance.
New Act intended to ensure involvement of every Director in
the Governance of the Company
and Section 149(12) specifically
provides that a non executive director including an independent
director and nominee directors
will be held liable in respect of
such acts of omission or commission by a company which had
occurred with his knowledge,
attributable through board processes and with his consent or
connivance or where he had not
acted diligently.
The new Act intends to ensure
that directors should exercise
diligence while making decisions
and the act intends to achieve the
same by providing huge penalty for defaults and enhanced
criminal liability under various
provisions.
The Act provides for liability of
Directors in his personal capacity
Stakeholder
Relationship
Committee (SRC)
as well as in his official capacity.

Various provisions of the new
Act like Section 53, 68, 71, 92, 118,
129,134, 167,185,188 etc. provides
for imprisonment in case of default. The new Act also provides
for liability of directors/officers
for fraud under Section 447 of the
Companies Act, 2013 in which
imprisonment shall not be less
than 6 months but may extend to
10 years and where fraud in question involves public interest, the
imprisonment shall not be less
than 3 years.
Committees of The Board

The Companies Act, 2013 mandated creation of following
Committees of the Board of
Directors:
Committee on Corporate
Social Responsibility
(Section 135)
Audit Committee
(Section 177)
Nomination and Remuneration Committee (Section 178) and
Stakeholders Relationship
Committee (Section 178)
Summary of composition and
requirements regarding constitution of above Committees are
given in the table above.
Corporate Social
Responsibility
Committee (CSRC)
net worth of Rs.500 crores
or more; or
turnover of Rs.1000 crores
or more; or
net profit of Rs. 5 crore or
more during any FY
Establishment of Vigil
Mechanism: (Section 177)
The new Companies Act also
mandated establishment of a
vigil mechanism for Directors
and Employees to facilitate reporting their genuine concern/
grievances. The Audit Committee
shall oversee this mechanism.
As per the Act, following companies required to establish vigil
mechanism:
Listed companies
Companies accepting deposits from public
Companies that have borrowed moneys from Banks/PFIs
over Rs. 50 crores
Conclusion
The provisions regarding Directors, meetings, Committees of
the Board, Boards report etc.
envisaged under the Companies
Act, 2013 will have effect on
the decision making & disclosure practices being followed
by the Companies. The new law
will plug most loopholes of the
old Act and it will improve
corporate governance, protect the
interest of minority shareholders
and make it tougher for companies to hide illegal transactions or
commit fraud.
29
ARTICLE
Appointment of
Directors under the
Companies Act, 2013
Mr. Inderpal Singh
Issues for CPSEs
Company Secretary, BHEL
Effective implementation and compliance of provisions of Companies Act, 2013 relating

to appointment of Directors especially independent directors in CPSEs requires active
involvement of Board of CPSEs in the process of appointment. The government authorities
involved in the process of appointment also need to analyse and understand the implications
of these provisions and accordingly, update the process of appointment in coordination
with CPSEs so that they are better equipped to comply the provisions of the Act.
entral
Public
Sector
Enterprises (CPSEs) are
important vehicles of inclusive growth in the country.
CPSEs account for around 20%
of GDP of the country in terms
of turnover and make substantial contribution towards employment generation & Central
Exchequer. In 2012-13, gross revenue from operations of all CPSEs
stood at Rs. 19.45 Lakh Crore
whereas more than Rs. 1 Lakh
crore of overall net profits have
been earned by them (PE Survey
2012-13). As on 31st July, 2014,
Listed CPSEs holds more than
15% of total market capitalization
in BSE as well as NSE.Government
of India being the majority shareholder in CPSEs, the process of
appointment of Directors has
certain peculiarities not to be
found in other non - Government
Companies. Besides, Board and
shareholders of CPSE, the government agencies involved in
30
process of appointment of directors in a CPSE are Administrative

Ministry, Department of Public
Enterprises (DPE), PESB/Search
Committee and Appointments
Committee of Cabinet (ACC). So
far as a CPSE is concerned, normally, the process of appointment
of a director starts with communication from the Administrative
Ministry (after ACCs approval)
of appointment of concerned director by President of India. The
Board of Directors of the CPSE
then is required to complete the
formality of inducting the director on the Board. At the Annual
General Meeting, shareholders
led by the majority shareholder
i.e., Government of India confirms
the appointment. Companies Act
2013 enacts specific provisions
with regard to appointment of
directors to have more clarity &
transparency which also requires
increased role and responsibility
of Board in this regard. Further,
certain issues emanates from

new provisions of the Act which
require the attention of all agencies involved in the process of appointment of directors in CPSEs.
These issues have been highlighted in the following lines along
with possible solutions/suggestions to deal with the same.
Issue @ 1
Formalities prior to
appointment DIN,
Declaration & Consent
Section 152 requires a proposed
Director to furnish his Director
Identification Number (DIN) and
a declaration that he is not disqualified to become a director under the Act. The Section further
states that he shall not act as a
director unless he gives his consent to hold the office as director.
Disqualifications for appointment
of director have been listed in
Section 164 of the Act.Exemption
available under the Act of 1956
ARTICLE
to Government Companies with
regard to one of the disqualifications under Section 274(1)(g) viz.,
failure to file annual accounts or
to repay deposit/ interest/ dividend or to redeem debenture
is not available to CPSEs under the new Act till now. At the
time when appointment process
is initiated at Administrative
Ministry/DPE, it is important to
ensure that the person proposed
to be director is not subject to
any of the disqualifications listed
in Section 164.
Suggestion
Before putting up the proposal
of appointment of a person as
director to ACC, the person concerned should be asked to furnish the declaration that he is
not subject to any disqualification under Section 164. If the
person concerned is already a
director in other companies, it
can be verified from Ministry of
Corporate Affairs (MCA) website
that whether any of those companies has not filed financial statements or annual returns for any
continuous period of three years,
one of the disqualifications mentioned in the Section. It would
be helpful, if the Administrative
Ministrys communication of appointment to person concerned
as director advises him to obtain
DIN in case he is not having one.
Further, CPSE needs to ensure
before inducting the person on
the Board that his DIN, consent
to act as Director and declaration
as to not being disqualified are
obtained.
Issue @ 2
Appointment of Key
Managerial Personnel
(KMP) including CFO
Companies Act 2013 introduced
a new concept of Key Managerial

Personnel (KMP). As per Section
2(51), KMP means CEO/MD/
Manager, Whole time director,
CFO and Company Secretary.
Section 203 requires companies to
have three whole time KMP viz.,
(i) Managing Director or Chief
Executive Officer or Manager and
in their absence, a whole-time director (ii) CFO and (iii) Company
Secretary. Section 203 further provides that each whole time KMP
shall be appointed by means of a
resolution of the Board containing terms & conditions of the appointment including the remuneration. There are two views
with regard to KMP. According
to one, all whole time directors
by implication are KMP in view
of definition of KMP. Another
says that companies need to have
only three KMP as per Section 203
and other whole time directors
are not KMP unless so designated
by Board. Another related issue
The new Act places

tremendous
responsibility and
provides specific duties
of Directors coupled with
strict penalties for noncompliance. Further,
various specialized Board
Level Committees with
mandatory inclusion of
independent directors
in their composition
demand specific skills
so that role envisaged in
their terms of reference
can be effectively fulfilled.
is, whether Director(Finance) in a

CPSE can be considered as CFO.
Suggestion
Supporting the first view above,
it is suggested that an information memorandum citing above
provisions regarding KMP may
be put up to the Board of CPSE
specifying that all whole time directors (currently in position) in
a CPSE will be KMP as second
view may result in a situation in
a CPSE where Director (Finance)
would be a KMP but Director
(HR) or Director (Operations)
may not be a KMP. Further, the
memorandum above may also
provide that Director (Finance)
may be considered as CFO
for the purpose of Section 203
[Director (Finance) is considered
CFO for the purpose of CEO &
CFO certification under Clause
49-Listing Agreement applicable
to Listed Companies. For future
appoint-ments, it would be better
if appointment letter of Director
(Finance) from Administrative
Ministry indicates that he would
be CFO of the company as well.
Issue @ 3
Appointment of
Independent Director
Procedure in CPSEs vis-vis responsibility of Board
under Companies Act, 2013
Companies Act, 2013 entrusts
greater responsibility on the
Board of a company to ensure
that appointment of Independent
Director is justifiable and in compliance with the provisions of
the Act which include a strict
criterion of independence under
Section 149(6). In addition to long
list of cases given in Section 149
(6) under which a person cannot be independent director,
DPE guidelines on Corporate
31
ARTICLE
Governance & Clause 49-Listing
Agreement (for listed CPSEs) are
also required to be kept in mind
which includes an additional
point to ensure that the person
is not a material supplier, service
provider or customer or a lessor
or lessee of the company, which
may affect his independence.
The Section also provides that an
independent director means a director who, in the opinion of the
Board, is a person of integrity and
possesses relevant expertise and
experience. Further as per Section
150 and Section 152, the Board
has to certify through explanatory statement to the shareholders that Independent Director
fulfills criteria of independence
and his/her appointment is justifiable. Since all Directors including Independent Directors on the
Board of Government Companies
are appointed by the President of
India through ACC and CPSEs
Board comes into picture on receipt of communication from
Administrative Ministry regarding appointment of independent
director with instruction to induct him/her in the Board, true
compliance with above provisions is going to be a challenge for
the Board of CPSEs.
Further, the Code for Independent
Directors provided in Schedule
IV of the Act mandates that the
appointment of Independent
Director shall be formalized
through a letter of appointment
which shall, inter-alia, set out
term of appointment, fiduciary
duties, list of action that a director
should not do, remuneration and
expectation of the Board from the
appointed director, Board Level
Committees in which the director is expected to serve & its tasks
etc. Presently, communication
from Administrative Ministry
32
mentions only the term of appointment. Issuing such a letter

of appointment containing all
above details without approval
of Government (which is de-facto
the appointing authority) is another issue for CPSEs.
Suggestion
Compliance with above provisions requires greater involvement of the Board of CPSE in the
appointment process and better
connect between various arms
of the government (viz., Admin.
Ministry, DPE & ACC) and the
CPSE.
Specifically, following
suggestions may be considered
for compliance of above provisions in true letter & spirit: Since the Board of CPSE is
responsible for certifying to the
Shareholders that appointment
of Independent Director is justifiable and he/she meets the criteria
of independence as laid down in
the Companies Act 2013 (as well
as DPE guidelines on Corporate
Governance), it is in the fairness
of things that Board should be
given an opportunity to consider the proposed appointment of
Independent Director before the
same is put up to ACC. Thus, the
Board of CPSE need to be given a
larger role to play as against the
present practice of just inducting the Independent Director appointed by ACC on the Board of
CPSE.
So far as due diligence
from CPSE side with regard to
appointment of Independent
Director is concerned, it generally consists, as per present
practice, seeking comments of
the company management by
Administrative Ministry with regard to possible conflict of interest with the business of CPSE.
However, as explained above,
now the due diligence should
go much beyond in ensuring
(besides no conflict of interest)
that (i) proposed appointment
of Independent Director is justifiable; (ii) proposed candidate
fulfills criterion of independence
under Section 149(6); and (iii)
the proposed candidate is not
disqualified under the Act. All
this is complex and need to be
ensured before the appointment
is approved by ACC. Besides
taking a self-declaration from the
person (proposed to be appointed as director) with regard to (ii)
& (iii) above, DPE may consider
forming a Committee of internal/external experts to carry out
this due diligence. This will on
the one hand, ensure compliance
with the requirements of the Act
and on the other, give more credibility to the process of appointment of Independent Directors in
CPSEs. This Board of CPSE can
cite this due diligence as support
of their assertion to shareholders
that Independent Director fulfills
criteria of independence and his/
her appointment is justifiable.
With regard to detailed appointment letter for Independent
Director, it is suggested that
CPSE may prepare a draft appointment letter containing details envisaged in the Act and got
it approved from Administrative
Ministry. Since, the details contain fiduciary duties, Dos & Dont
for Independent Director, expectation of the Board from the
ARTICLE
appointed director etc., to ensure
uniformity, DPE may consider a
standardized format in this regard to be issued by administrative ministries at the time of communication of appointment of
Independent Director to a CPSE.
Issue @ 4
Number and skill requirements regarding

Companies Act 2013, through
Section 149(4) makes it mandatory for Listed and other specified
companies to have at least onethird of total number of directors
as independent directors. For the
Listed CPSEs, the requirement
is more stringent which requires
half of the Board as independent
directors in case the chairman
is executive. Presently, CPSE,
at best, can request and follow
up with administrative ministry
for appointment of independent
directors.
The new Act places tremendous
responsibility and provides specific duties of Directors coupled
with strict penalties for non-compliance. Further, various specialized Board Level Committees
with mandatory inclusion of
independent directors in their
composition demand specific
skills so that role envisaged in
their terms of reference can be effectively fulfilled. For example,
terms of reference of audit committee includes examination of
financial statement, approval of
relating party transactions and
valuation of undertakings or assets of the company. Nomination
& remuneration committee shall
formulate policy relating to remuneration of directors, KMP &
other employees. Similarly, CSR
Committee shall formulate & recommend to the Board CSR policy
of the company and recommend

the amount of expenditure to
be incurred on CSR activities.
DPE guidelines on Corporate
Governance and Clause 49 Listing
Agreement(applicable
to listed CPSEs) also mandates
that at least one member of Audit
Committee shall have accounting or related financial management expertise. All this calls for
CPSEs independent directors
possessing specialized skills so
as to discharge above functions
effectively.
that appointing authorities in

Government,while selecting independent directors for CPSEs
take into consideration skill &
professional expertise envisaged
in the terms of reference of various Board Level Committees and
listing agreement requirements
so that CPSE Board should have
appropriate mix of specialized
skills, required to effectively discharge the responsibilities envisaged in the relevant provisions of
the Act.
Issue @ 5
Suggestion
So far as requirements as to
minimum number of independent directors are concerned in the
Act as well as Listing Agreement,
immediate steps need to be taken
by government agencies involved
in the process to put forward
proposals for appointment of sufficient number of independent
directors as many CPSEs are in
non-compliance of these requirements. The process of appointment of independent directors
also needs to be compressed. It
is also important because grant/
exercise of Navratna/Maharatna
status has also been linked by
the Government with fulfilling
SEBI requirement of minimum
number of independent directors on which CPSE has no control at present. Since, the Board of
Directors of CPSE are responsible
for ensuring compliance in this
regard, DPE may consider giving
some power to Board of CPSEs at
least to appoint independent directors to meet statutory criterion
of one-third independent directors under the Act if the vacancy
is not filled for a certain period,
say 6 months.
With regard to skill requirement under the Act, it is important
Retirement of directors by
rotation in CPSE
Section 152 of the Act provides
that unless the articles provide
for the retirement of all directors
at every annual general meeting,
not less than two-thirds of the total number of directors of a public
company shall be persons whose
period of office is liable to determination by retirement of directors by rotation. It further states
that one-third of directors liable
to retire by rotation shall retire
at every AGM. The Act also provides that Independent Directors
are no longer liable to retire by rotation. Further, as per provisions
of Articles in many CPSEs, CMD
& Government Directors are not
liable to retire by rotation. This
may lead to a situation where it
may not be practically possible to
comply with the provisions of the
Act as the directors available for
liable to retire by rotation will be
less than two-third.
Suggestion
In view of the fact that above provision may not be practicable in
CPSE (as explained above) and
also of the fact that generally all
directors in a CPSE are appointed by Government of India for a
33
ARTICLE
fixed tenure, CPSEs need to be
exempted from these provisions
of the Act. Till then, CPSE may
not have any option but to go
for retirement & re-appointment
of one-third of two third of total
number of directors (excluding
independent directors) in the
AGM whether such two-third is
actually available for retirement
or not.
this provision should not be made

applicable for such directors.
Issue @ 7
Appointment of
Government Directors
Section 160 (1) provides that the

candidature of a Director at a
general meeting who is not a retiring director can be proposed
by Director himself or a member along with the deposit of Rs
1 lakh. The Section further states
that the amount shall be refunded
if the person proposed gets elected as a director or gets more than
25% of total votes cast. Earlier under Section 257 of the Companies
Act, 1956, the amount to be deposited was Rs. 500/. Taking
such deposit from Government
Directors, Functional Directors
or Independent Directors will be
a futile exercise as they are appointed by GOI.
Section 152 (2) states that save

as otherwise expressly provided
in the Act, every director shall
be appointed by the company in
general meeting. Section 161(3)
gives power to Board of a company, subject to its Articles, to
appoint any person as a director
nominated by the Government
by virtue of its shareholding in
a Government Company. Section
161(1) provides that articles of
a company may confer on its
Board power to appoint any
person as an additional director who shall hold office upto
the date of next AGM. The question arises, whether (where articles permits) Board has the power
to appoint nominee Government
Director and such appointment
doesnt need require approval
of the Shareholders OR whether Government Directors are
required to be appointed as
additional directors only and
their appointment will require
approval by Shareholders in the
General meeting.
Suggestion
Suggestion
Since in case of a Govt. company, all directors (including

Independent Directors) are appointed by GOI and there is
no question of abuse of
right given by the section in
respect of such directors (be
it Functional, Government or
Independent Directors), exemption be given to CPSEs so that
From a simple reading of Section

161(3) along with Section 152(2),
it appears that where articles
permits, nominee Government
Directors appointment need not
go to general meeting. However,
to avoid any confusion, MCA
may consider issuing a clarification stating that appointment
under Section 161 (3) need not
Issue @ 6
Deposit for proposing

candidature of a Director at
general meeting
require approval of general meeting. If it is done, CPSEs whose

articles donot contain such provision can amend their articles
to give such a power to Board to
appoint Government Directors so
that such procedural formality
can be avoided for CPSE.
To conclude, effective implementation and compliance of
provisions of Companies Act,
2013 relating to appointment of
Directors especially independent
directors in CPSEs requires active
involvement of Board of CPSEs in
the process of appointment. The
government authorities involved
in the process of appointment also
need to analyse and understand
the implications of these provisions and accordingly, update the
process of appointment in coordination with CPSEs so that they
are better equipped to comply the
provisions of the Act. DPE, being the nodal agency for CPSEs in
this regard, may explore the possibility of devising standard formats, helping with regard to due
diligence regarding independent
directors and providing more
power/role to Board of CPSEs in
the appointment of directors to
enable them to effectively fufil
their responsibility envisaged in
the Act. MCA may also take into
consideration the distinct nature
of process of appointment of directors in CPSEs where government agencies have a major role
to play and exempt CPSE with
regard to those provisions which
are futile, merely time-consuming formalities or impracticable
for CPSEs.(Exemptions for CPSEs
are awaited at the time of writing
this article).
Disclaimer: The Views expressed in the article are those of the author and do not necessarily reflect the opinion of the company or any other Govt. agency. Your valuable comments on the article are welcomed at inderyours@gmail.com.
34
ARTICLE
Companies Act 2013:

Boosts Corporate Governance
Mr. H. L. Chaudhary
CMD, NPCC
fter more than 50 years,

the first update of the
countrys corporate law
that is The Companies Act 2013
has come into existence with several important provisions that
modernize Indias corporate governance arena. It has taken care
of all the different aspects of business governed by the Corporate
in the country viz. change of
traditional company formation,
creation of Dormant Company,
liberalizes intergroup mergers
and restructuring, changes in
the security contract regulations,
significantly improved corporate governance, empowering
the shareholders, provision for
regulatory authorities, Society
orientation
with
Corporate
Social Responsibility & Gender
Representation, etc.
development with contribution

of nearly 2% of GDP of the country. It is also keeping check on
other Corporate to work as per
Companies Governance norms,
setting themselves as example or
initiator.
The Companies Act 2013 lays

down the framework of the
companys law and now allows
Central Government to formulate the efficient and transparent
procedure for proper governance
to run the Indian corporate juggernaut smoothly and curtail
corporate scams. Public Sector
Enterprises plays very important
role in the countrys all-around
The Companies Act, 2013 provides for a major overhaul in

Corporate Governance norms for
all companies. It provides necessary control/responsibility on
companies with all different aspects related to them for which
they are answerable. The major
changes which come in respect of
Public Sector Enterprises can be
termed as follow:
Increased Reporting
Framework
Mandatory requirement
for Consolidated Financial
Statement (CFS)
As per globally accepted practices, consolidated financial statements are considered as basic financial statements and the only
general purpose financial statements, as standalone financial
statements do not present a true
and fair picture of an economic
entity. So requirement of consolidated financial statements is an
important step with primacy of
standalone financial statements
has been maintained.
35
ARTICLE
of the original cost of the asset.
The Companies Act 2013 states
that it will for specific companies
(whose financial statements are
required to comply with accounting standards prescribed under
the Companies Act 2013), the
useful lives should normally be
in accordance with the Schedule.
However, if a prescribed company uses a different useful life, it
should disclose a justification for
doing so;
Revision in Financial Statement

Under the 1956 Act, companies
are generally not permitted to revise or restate financial information presented in their financial
statements. Material misstatements in the accounts related to
previous years, whether due to
occurrence of fraud or error are
reported as a prior period adjustment in the financial statements
of the year / period in which such
misstatements are discovered.
The New Act has added a new
provision for re-opening/restatement of financial statements in
the following circumstances:
A statutory regulatory authority (e.g., Central Government,
SEBI, income tax authorities, etc.)
or any person concerned applies
to the Tribunal or a court of law
when the accounts of the company were prepared in a fraudulent
manner or the affairs of the company were mismanaged thereby
casting a doubt on reliability of
the financial statements.
Voluntary restatement on application by the Board of Directors
if in their opinion the financial
statements/ Board report do not
comply with the requirements
of the New Act, e.g., relating
to compliance with accounting
36
standards/form of financial statements, mandatory disclosures in

the Board report, etc., Voluntary
restatement is permitted after obtaining approval of the Tribunal
in respect of three preceding financial years. Further, such restatement cannot be carried out
more than once in a financial year.
While the voluntary revision to
accounts is restricted only to the
preceding three years, there is no
time restriction to revision initiated by a statutory regulatory
authority. The impact could be
significant if the restatement is
ordered of a period, many years
into the past, as a restatement in
one year will have a cascading effect on the following years.
Changes in Depreciation
regulation
The Companies act 2013 requires
systematic allocation of the depreciable amount of an asset over
its useful life unlike earlier Act
(which specifies minimum rates
of depreciation to be provided
by a company). The depreciable
amount is defined as the cost of
an asset, or other amount substituted for cost, less its residual value. The residual value is generally not being more than 5 percent
Useful life may be considered as

a period over which an asset is
available for use or as the number of production or similar units
expected to be obtained from the
asset by the entity. The useful
lives specified in the Companies
Act 2013 for various assets will
result in their depreciation over
a different period than currently
applicable under the earlier Act.
For example, for an entity using
Straight line method of depreciation under the Act, useful life has
been reduced for (i) general plant
and machinery from 21years to 15
years; (ii) general furniture and
fittings from 15 years to 10 year;
(iii) computers from 6 years to 3
years; It also specifies the useful
life for depreciating additional
types of plant and machinery
used in various industries (e.g.,
exploration, power, metals, etc).
During transition period, the
carrying amount of an asset is
depreciated as over the remaining useful life of the asset as per
Companies Act 2013; or recognised in opening retained earnings when the remaining useful
life of the asset has been taken nil.
Mandatory Internal Audit & reporting on Internal Financial Controls
Central Government may frame
rules to prescribe the manner
ARTICLE
and intervals for conducting and
reporting on internal audit. The
objective of introduction of this
requirement is to strengthen the
system of internal controls in the
wake of allegations of recent corporate frauds. The Companies Act
2013 also requires the Directors
Report for listed companies and
Auditors Report for all companies to comment on whether the
company has adequate internal
financial controls system in place
and operating effectiveness of
such controls.
directors framed, contraventions would attract punishment

including compensatory fine.
Apart from specific enunciation
of good practices and concepts,
this would result in easier prosecution of delinquent directors.
Central Government has been
empowered to prescribe minimum number of independent
directors for any class of unlisted
public companies. Significance
of independent directors in governance of large companies has
been recognized.
company having net worth of Rs.

500 crore or more, or turnover
of Rs. 1000 crore or more or net
profit of Rs. 5 crore or more during any financial year will have
to comply with the CSR provisions as laid down under the
Companies Act 2013.
Higher Auditor Accountability
Audit Committee
Role of the Committee sharpened
with specific responsibilities including recommending appointment of auditors and monitoring
their independence and performance, approval of related party
transactions, scrutiny of intercorporate loans and investments,
valuation of undertaking/assets
etc. Audit committee is contemplated as a major vehicle for ensuring controls, sound financial
reporting and overall good corporate governance.
In the context of Companies Act

2013, when the rules of the game
for Government companies and
other Government companies are
not identical and differ in some
aspects, a lot of thought has still
to be given to aligning the various
guidelines which are applicable
for Public Sector Companies, with
the provisions in the Companies
Act 2013 and to address to this
issue, a specific section exists in
the Companies Act 2013 which is
Section 462 of the Companies Act
Period of appointment of
Auditors
As per the Companies Act 2013,
instead of the present provision
of appointment from one AGM
to the next, individual or a firm to
be appointed as auditor for a fiveyear term. Change of auditors
before the five year term would
require special resolution after
obtaining the previous approval of the Central Government.
Further the auditor concerned
would have to be given a reasonable opportunity of being heard.
Company Social
Responsibility mandatory
Rotation of auditors
Listed companies or companies implementation
belonging to such class of companies as may be prescribed cannot appoint or reappoint an audit
firm (including an LLP) as auditor for more than two consecutive
terms of five years each (in case of
an individual there would be one
term of five years).
If any of the above financial

strength criteria is met, the qualifying company is mandatorily required to spend at least 2 percent
of the average net profit of past
three financial years on specified
CSR activities.
NPCC Ltd in Nation Building
As per Section 135 of the Act, any
NPCC Ltd was incorporated

on 9th Jan, 1957 as premier construction company under erstwhile Ministry of Irrigation (Now
Wider Director
and Management
Responsibility
Responsibility of Directors/
Specific but inclusive duties of
37
ARTICLE
Ministry of Water Resources) to
create necessary infrastructure
for economic growth of country and to undertake Irrigation
and hydel projects. As per new
Companies Act 2013 NPCC Ltd
ensures adherence to CSR activity
works, financial declaration/ auditing, Risk Management with its
mitigation, transparency in working and adopting all criterias
required to comply with New
Companies Act 2013
Awarded Turnaround Award

2013 by Board for Reconstruction
of Public Sector Enterprises
(BRPSE) on 31.10.2013. It has
been assigned credit rating of A+
by ICRA in July, 2014.
NPCC Ltd is associated with

works in remote and hazardous
locations over the country where
private sector companies did not
venture and this perhaps continues to be its USP till date. Besides
completion of projects NPCC Ltd
is contributing it share to the socioeconomic growth of country
by of providing employment to
local population and creating
infrastructure for the growth of
country.
Role of the
Committee sharpened with specific
responsibilities
including recommending appointment of auditors
and monitoring
their independence
and performance,
approval of related
party transactions,
scrutiny of intercorporate loans
and investments,
valuation of undertaking/assets etc.
Audit committee is
contemplated as a
major vehicle for
ensuring controls,
sound financial
reporting and overall good corporate
governance.
Since inception NPCC Ltd is

providing necessary manpower
& know-how for the construction
of National infrastructure projects and acting as price deterrent
for formation of private sector
cartels.
It has expertise for construction
of projects in all the fields of infrastructure such as Dams and
Barrages, Thermal and Hydel
power projects, Roads and bridges, Industrial structures, buildings( academic and institutional)
and townships, Hospitals and
health sector etc.
It has experienced man power of
1300 employees includes over 200
engineers along with supporting staff and skilled workmen
to care of best quality construction. NPCC Ltd is a profit making entity with annual turnover
of over Rs. 1200 crore with pan
India presence. NPCC Ltd was
38
In North East, NPCC Ltd is playing vital role in development of

North Eastern region since over 45
years and constructed major projects namely Singda Earth Dam,
Khuga Dam, Maharani Barrage,

Dolaitabi Barrage, College of
Fisheries,
Establishments
of
Para military forces i.e. Assam
Rifles, Border roads, fencing,
Border out posts and flood
lights at Indo-Bangla Border in
Assam, Meghalaya, Mizoram,
Tripura, Manipur, Nagaland and
Arunachal Pradesh.
Besides the above NPCC Ltd is
implementing Pradhan Mantri
Gramin Sadak Yojna works in
Bihar, Jharkhand, West Bengal
and Uttar Pradesh. NPCC Ltd
is also completing high altitude
roads at Leh (J&K) at height of
16000 ft for a length of 140 Km on
Indo-China Border near Chumar
where no other organization has
ventured.
Today NPCC Ltd has vision to
become world class engineering project implementing organization. Shri HL Chaudhary,
CMD, NPCC Ltd has mission
to achieve turn over exceeding
Rs. 2000 crore by financial year
ending 2016 with positive net
worth by focusing value addition at all points of interaction
with our clients and continuously
enhancing capabilities of organization and employees through
innovations. To achieve this
NPCC Ltd is doing proactive approach with constant touch and
liaison with clients, exploring
new business & clients like Real
Estate Development, Providing
services to Rail Sector and introducing computerization in project monitoring and management
system (as well as automation
of financial accounting system).
Times to time training program
are organized for employees for
enhancement in skill for optimal
utilization of human resources
available and new parameters of
The Companies Act 2013.
ARTICLE
Related Party
Transaction (RPT)
Ms. Kumudani Sharma

Sr. Manager, Oil
under Companies Act 2013

and Revised Clause 49 of the
Equity Listing Agreement
Introduction of Section 188 of the Companies Act 2013 and Revised Clause 49 of the Equity
Listing Agreement of the Stock Exchange, to be effective from 01.10.14 has thrown a big
challenge to the Corporate Sector to ensure their compliance. This article analyses the
provisions of the Act and Revised Clause 49 and suggest the Road map for the future.
inistry of Corporate
Affairs vide its notification dated 26.03.14
made section 188 applicable to
companies w.e.f from 01.04.14.
The Section does not prohibit
RPT; but channelizes the transactions by prescribing certain compliance requirements. Provisions
relating to RPT apply to every
company, be it a private, unlisted
public, listed public or foreign
company.
Related Party
Section 2(76) of the Act defines
the term related party with
reference to a company. This
definition was brought into force
with effect from 12-09-2013. In its
terms, related party means: a director or his relative; The
term relative with reference to
a person means any one who is
related to another, if- (i) they are
members of a Hindu Undivided
Family; (ii) they are husband and
wife; or (iii) one person is related
to the other in such manner as

may be prescribed. 4 Rule 4 of the
Definition Rules, mentions that
a person shall be deemed to be
relative of another, if he or she is
related to another in the following manner: - (1) Father including
step-father; (2) Mother including
step-mother; (3) son including
step-son; (4) sons wife; (5) daughter; (6) daughters husband; (7)
brother including step-brother;
and (8) sister including step-sister. Step-sons wife, step-daughter
and her husband are not relatives
within this definition.
a key managerial personnel
(KMP) or his relative; KMP is defined in section 2(51) of the Act.
KMP means (i) the CEO or the
MD or the manager; (ii) company
secretary; (iii) the whole-time director (WTD); (iv) the CFO; and
(v) such other officer as may be
prescribed. Appointment of KMP
is mandatory only in respect of
listed companies or public companies having a paid-up capital
of Rs. 10 crore or more. If such

a company has a MD or CEO or
manager, appointment of WTD is
not necessary; but it must have a
CFO and a company secretary.
a firm in which a director, manager or his relative is a
partner;
a private company in which
a director or manager or his relative is a member of director;
a public company in which
a director or manager is a director or holds along with his relatives, more than 2% of its paid up
capital;
any body corporate whose
Board of Directors, managing director or manager is accustomed
to act in accordance with the advice, or direction or instructions
of a director or manager;
any person on whose advice,
directions, or instructions a director or manager is accustomed to
act;
39
ARTICLE
any company which is- (A) a
holding, subsidiary or an associate company of such company;
or (B) a subsidiary of a holding
company to which it is also a
subsidiary;
Associate company on relation to
another company, means a company in which that other company has a significant influence, but
which is not a subsidiary company of the company having such
influence and includes a joint
venture company. Significant
influence means control of at
least 20% of total share capital
or of business decision under an
agreement.
and a director or KMP of the
holding company or his relative
with reference to a company.
Related Party Transactions

As per Section 188, RPT means
any contract or arrangement with
related party with respect to-
related parties, may not amount

to RPT that does not fulfil the nature
of transactions mentioned above;
that is entered into by the
company in its ordinary course of
business, other than those which
are not on arms length basis;
Blacks Law Dictionary defines
the term ordinary course of
business as the transaction of
business according to the usages
and customs of the commercial
world generally or of the particular individual community or
(in some cases) of the particular
individual whose acts are under
consideration. . In general, any
matter which transpires as a matter of daily custom in business.
Thus, the ordinary course of business will cover the usual transactions, customs and practices in
relation to business of a company.
selling or otherwise disposing of, or buying, property of any

kind;
Whether an activity is in the ordinary course of business will

depend on the particular business. In determining whether an
activity is in the ordinary course
of business the following could
be considered:
leasing of property of any

kind;
Business activity is Normal

or otherwise
availing or rendering of any

services;
Its Frequency
sale, purchase or supply of

any goods or materials;
appointment of any agent for

purchase or sale of goods, materials, services or property;
such related partys appointment to any office or place of
profit in the company; and
Under-writing the subscription of any securities or derivates
thereof, of the company.
The following transaction, even
though entered into between
40
And its Financial /Physical

impact ( Capital /Revenue )
(These are only indicative not
exhaustive)
In its Standard on Auditing,
the Institute of Chartered
Accountants of India has included following examples of transactions that are considered outside the entitys normal course of
business:
Complex equity transactions,

such as corporate restructurings
or acquisitions
Transactions with offshore
entities in jurisdictions with weak
corporate laws
The leasing of premises or the
rendering of management services by the entity to another party if
no consideration is exchanged
Sales transactions with unusually large discounts or returns
Transactions with circular arrangements, for example, sales
with a commitment to repurchase.
Transactions under contracts
whose terms are changed before
expiry.
The assessment of whether a
transaction is in ordinary course
of business is subjective, and may
vary on case-to-case basis as per
the nature of business and objects
of the entity.
Thus, a transaction which is
happening at regular interval /
repetitive, affects only revenue
Account, does not results in large
discounts /favours to the party
,whose impact is not permanent
can be termed as transaction in
the ordinary course of business.
that is concluded on arms
length basis and
The expression arms length
transaction means transaction
between two related parties that
is concluded as if they were unrelated, so that there is no conflict of
interest. E.g Transaction entered
into through the process of the
Competitive Bidding are at arms
length
arising out of compromises,
arrangements and amalgamations dealt with under specific
provisions of the Companies Act,
ARTICLE
1956 or the Act.
In terms of section 462 of the
Act, the Central Government has
the power to grant exemption to
any company or class of companies or modify the application of
any provision of the Act. If any exemption is granted by the Central
Government or the provisions of
the Act are modified in exercise of
the powers vested in the Central
Government under section 462
of the Act, any such transaction
even if falling within the nature
of transactions mentioned above,
will not be a RPT. As on date,
such Exemption is awaited from
Government.
Not all transactions with related
party are Related party transactions under the Companies Act
2013. Related party transactions
by virtue of the provisions of section 188 of the Act are limited to
seven types of transactions specified in sub-section (1).On the other hand, transactions with related
party comprise all transactions
when the two contracting parties
are related in the manner specified in section 2(76).
Approvals
RPT involving the transactions
mentioned in above shall have to
be entered into with the consent
of the Audit Committee Section
177(4) and Board accorded by a
resolution passed at a meeting.
Where any director is interested
in any contract or arrangement
with a related party, such director
shall not be present at the meeting
during discussions on the subject
matter of the resolution relating
to such contract or arrangement.
The words shall not be present
at the meeting during discussions
on the subject matter of the resolution shall be construed to refer
to the physical presence of the

concerned director at the meeting. This is quite different from
the expression did not participate in the discussions, which
would imply that the concerned
director was physically present
at the meeting during discussions
on the subject matter.
As per amended Rule 15(3) of
The companies (meeting of
Board and its powers) Rules 2014,
the Related Party Transactions
involving mentioned below shall
be entered into with the prior approval of the company by a special resolution and if any member of a company is a related
party in respect of a RPT, he shall
not vote on the special resolution to approve any contract or
arrangement.
sale, purchase or supply of
any goods or materials, directly
or through appointment of agent,
exceeding ten percent of the turnover of the company or rupees
one hundred crore, whichever is
lower, as mentioned in clause (a)
and clause (e) respectively of subsection (1) of section 188 mentioned at Para 3 above
selling or otherwise disposing of or buying property of
any kind, directly or through
appointment of agent, exceeding

ten percent of net worth of the
company or rupees one hundred
crore, whichever is lower, as mentioned in clause (b) and clause (e)
respectively of sub-section (1) of
section 188 at Para 3 above;
leasing of property of any
kind exceeding ten percent of the
net worth of the company or ten
percent of turnover of the company or rupees one hundred crore,
whichever is lower, as mentioned
in clause (c) of sub-section(1) of
section 188;
availing or rendering of any
services, directly or through appointment of agent, exceeding
ten percent of the turnover of the
company or rupees fifty crore,
whichever is lower, as mentioned
in clause (d) and clause (e) respectively of sub-section (1) of section
188 at Para 3 above:
Explanation: It is hereby clarified
that the limits specified in subclauses (i) to (iv) shall apply for
transaction or transactions to be
entered into either individually
or taken together with the previous transactions during a financial year.
is for appointment to any
office or place of profit in the
41
ARTICLE
company, its subsidiary company or associate company at a
monthly remuneration exceeding
two and half lakh rupees as mentioned in clause (f) of sub-section
(1) of section 188; or
is for remuneration for underwriting the subscription of
any securities or derivatives
thereof, of the company exceeding one percent. of the net worth
as mentioned in clause (g) of subsection (1) of section 188 at Para 3
above.
Explanation: (1) The Turnover or
Net Worth referred in the above
sub-rules shall be computed on
the basis of the Audited Financial
Statement of the preceding
Financial Year.
It is further clarified under the
said Rule that, in case of wholly
owned subsidiary companies ,
the special resolution passed by
the holding company shall be sufficient for the purpose of entering
the transaction between wholly
owned subsidiary and holding
company. This implies that subsidiary company need not get
special resolution passed by its
shareholders.
Ministry of Corporate affairs by
General Circular No. 30/2014
dated 17-07-2014 has clarified
that related party has to be
construed with reference only to
the contract or arrangement for
which said special resolution is
being passed.
Section 188(3) provides that
Where any contract or arrangement is entered into by a director or any other employee, without obtaining the consent of the
Board or approval by a special
resolution in the general meeting under sub-section (1) and if
it is not ratified by the Board or,
42
as the case may be, by the shareholders at a meeting within three

months from the date on which
such contract or arrangement
was entered into, such contract or
arrangement shall be voidable at
the option of the Board and if the
contract or arrangement is with a
related party to any director, or
is authorised by any other director, the directors concerned shall
indemnify the company against
any loss incurred by it.
Board agenda paper shall have

to disclose:
the name of the related party
and nature of relationship;
Procedure for Approval
the manner of determining

the pricing and other commercial
terms, both included as part of
the contract and not considered
as part;
Rule 15 of the Board Rules prescribes the procedutre to be followed in respect of contract requiring consent of the Board at a
meeting of the Board. Passing the
resolution by circulation is not
permissible in this case.
Ministry of Corporate
Affairs vide its notification dated 26.03.14
made section 188
applicable to companies w.e.f from
01.04.14.The Section
does not prohibit
RPT; but channelizes
the transactions by
prescribing certain
compliance requirements. Provisions
relating to RPT apply
to every company, be
it a private, unlisted
public, listed public
or foreign company.
nature and duration of the

contract and particulars of contract or arrangement;
material terms of the contract
or arrangement including the value, if any;
advance paid or received for
the contract or arrangement, if
any;
factors not considered with

the rationale for not considering
those factors; and
any other information relevant or important for the Board to
take a decision on the proposed
transaction.
The usage of the words proposed transaction in condition
(vii) gives an impression that the
Central Government has not considered correctly the legislative
intent while framing Board Rules.
As Board Rules cannot override
the provisions of the Act, the
word proposed appearing in
condition (vii) above should be
ignored as a misplaced reference
to the transaction.
Securing the approval of the
members by a special resolution
will constitute a special business at the general meeting and
hence there shall be an explanatory statement to be annexed to
the notice of a general meeting in
terms of section 101 of the Act.
The following particulars shall be
included in the explanatory statement, namely: -
ARTICLE
name of the related party;
name of the director or KMP
who is related, if any;
nature of relationship;
nature, material terms, monetary value and particulars of the
contract or arrangement; and
any other information relevant or important for the members to take a decision on the proposed resolution.
Other conditions
Every RPT entered into by the
company shall be referred to in
the Boards report to the shareholders along with the justification for entering into such contract or arrangement.
Contracts or arrangements with
related party with respect to RPT
shall be entered into in the register maintained by the company in
Form MBP 4.
The entries in the register shall be
made at once, whenever there is
a cause to make entry, in chronological order and shall be authenticated by the Company Secretary
of the company or by other person authorised by the Board in
this behalf.
The register shall be kept at the
registered office of the company and preserved permanently
in the custody of the Company
Secretary or authorised person.
Upon a request being made by a
member, the company shall provide extracts from the register
within seven days from the date
of request upon payment of such
fee as may be specified in the articles of association of the company
not exceeding Rs. 10/- per page.
Fresh approvals for past contracts
under section 188 Ministry of
Corporate Affairs vide circular
No. 31/2014 dated 17.07.2014 has

clarified that contracts entered
into by companies, after making
necessary compliances under section 297 of the Companies Act,
1956, which already came into
effect before the commencement
of section 188 of the Act, will not
require fresh approval under section 188 of the Act till the expiry
of the term of original contract.
However, if modification in such
contract is made on or after 01-042014, the requirements under section 188 will have to be complied
with Contract or arrangement between wholly owned subsidiary
and holding company. In the case
of wholly owned subsidiary, the
special resolution passed by the
holding company would suffice
for entering into transactions between the wholly owned subsidiary and the holding company.
However, it may be noted that
the Ministry of Corporate Affairs
vide General Circular 32/2014
dated July 23, 2014 has clarified
that resolutions approved or
passed by companies under relevant applicable provisions of
the Old Act during the period
from 1st September, 2013 to 31st
March, 2014, can be implemented, in accordance with provisions
of the Old Act, notwithstanding
the repeal of the relevant provision subject to the conditions (a)

that the implementation of the
resolution actually commenced
before 1st April, 2014 and (b) that
this transitional arrangement
will be available upto expiry of
one year from the passing of the
resolution or six months from
the commencement of the corresponding provision in New Act
whichever is later. It is also clarified that any amendment of the
resolution must be in accordance
with the relevant provision of the
New Act.
This General Circular 32/2014
dated July 23, 2014 appears to
be contradictory to the General
Circular 30/2014 dated July
17, 2014. The General Circular
32/2014 dated July 23, 2014 provides that the transitional arrangement will be available upto
expiry of one year from the passing of the resolution or six months
from the commencement of the
corresponding provision in New
Act whichever is later, whilst the
General Circular 30/2014 dated
July 17, 2014 provided that the
contracts entered into by companies, after making necessary
compliances under Section 297 of
the Companies Act, 1956, which
already came into effect before
43
ARTICLE
the commencement of Section
188 of the Companies Act, 2013,
will not require fresh approval
under the said section 188 till the
expiry of the original term of such
contracts.
General Circular 32/2014 dated
July 23, 2014, however appears
to be in line with SEBI circular dated 17.04.14 on Corporate
Governance in listed Entities
Para 4.2 of the said circular states
that all existing material related
party contracts or arrangement
as on date of this circular which
are likely to be continue beyond
March 31, 2015 shall be placed for
approval of the shareholder in the
first General Meeting subsequent
to October 01, 2014. However
company may choose to get such
contracts approved by the shareholders even before October 01,
2014
Another view could be that
General circular No. 31/2014 dated 17.07.2014 deals specifically
with section 188 hence it shall
prevail and no fresh approval
should be required under the Act.
In the case of any other company,

the director or the employee concerned shall be punishable with
fine which shall not be less than
Rs. 25000 but may extend to Rs.
5 lakhs. The punishment in the
case of any other company does
not contemplate imprisonment
of the director or the employee
concerned.
In the case of a listed company,
punishment for entering into or
authorising the contract or arrangement in violation of the
provisions of section 188 includes
imprisonment for a term which
may extend to one year. As per
section 164 (1) of the Act, one of
the grounds for disqualification
of a person from being appointed as a director of a company is
conviction by a court of any offence, whether involving moral
turpitude or otherwise, and sentenced in respect thereof to imprisonment for a term not less
Revised Clause 49 prescribes that the listed

company shall formulate
Penal Provisions
a policy on materiality of
Contract or arrangement entered

into in violation of section 188
Section 188(5) of the Act deals
with contract or arrangement entered into in violation of its provisions by any director or other
employee.
RPT and also on dealing
The penal provisions are prescribed separately for: - (a) a

listed company; and (b) other
companies. In the case of a listed
company, the director or the employee concerned shall be punishable with imprisonment for
a term which may extend to one
year or with fine which shall not
be less than Rs. 25000, but may
extend to Rs. 5 lakhs or with both.
44
with RPT. A transaction

is material if individually
or taken together with
previous transactions
during a financial year
exceeds 5% of the annual
turnover or 20% of the
net worth of the company as per the last audited
financial statements of
the company, whichever
is higher.
than six months and a period of

five years has not elapsed from
the date of expiry of the sentence.
If a director is awarded punishment of imprisonment for a term
not less than six months for violation of the provisions of section
188 of the Act, he would cease
to be a director not only from
the concerned company but also
from other companies where he
is holding the office as a director.
Revised Clause 49 of the

Equity Listing agreement
RPT under Clause 49 of Equity
Listing Agreement Securities
and Exchange Board of India
(SEBI) has revised Clause 49 of
the Equity Listing Agreement
(revised Clause 49). The revised
Clause 49 will come into force
with effect from 01.10.2014.
Companies whose equity shares
are listed are required to comply
with the provisions of revised
Clause 49. Revised Clause 49 will
also be applicable to listed entities which are not companies, but
are body corporate or subject to
regulations under other statutes
to the extent that it does not violate their respective statutes or
guidelines or directions issued by
the relevant regulatory authorities. Revised Clause 49 is not applicable to mutual funds.
Revised Clause 49 is in addition
to the provisions of section 188
of the Act and not in lieu of it.
According to revised Clause 49,
RPT is a transfer of resources,
services or obligations between
a company and a related party
regardless of whether a price is
charged.
The term related party is defined in terms of a person or
entity that is related to the company. If one party has the ability
to control or exercise significant
ARTICLE
influence over the other party,
directly or indirectly, in making
financial and/or operating decisions, such party will be considered to be related to the other.
A person shall be a related party
to a company, if either himself or
a close member of his family: - (a)
is related to the company as per
the definition under section 2(76)
of Act; or (b) has control or joint
control or significant influence
over the party; or (c) is a KMP of
the company or of a parent of the
company.
The expression a close member
of his family is not either defined/explained in the Act or in
the revised Clause 49.
An entity is related to a company
if: the entity is a related party as
per the definition under section
2(76) of the Act; or
both the entity and the company are of the same group
(which means that each parent,
subsidiary and fellow subsidiary
is related to the others) or;
one entity is an associate or
joint venture of the other party
(or an associate or joint venture of
a member of a group of which the
other party is a member) or;
both parties are joint ventures
of the same third party; or
one entity is a joint venture of
a third entity and the other entity
is an associate of the third party;
or
the entity is a post-employment benefit plan for the benefit of the employees of either the
company or an entity related to
the company. If the company is
itself such a plan, the sponsoring
employers are also related to the
company; or
the entity is controlled or

jointly controlled by a person
identified;
the person identified (b) has
significant influence over the entity (or of a parent of the entity).
Related party defined in revised Clause 49 contains additional criteria for determining
whether a person or an entity is a
related party taking into account
control or influence and the manner of deciding the control or influence of a person or entity over
the other.
Revised Clause 49 prescribes that
the listed company shall formulate a policy on materiality of RPT
and also on dealing with RPT. A
transaction is material if individually or taken together with previous transactions during a financial year exceeds 5% of the annual
turnover or 20% of the net worth
of the company as per the last audited financial statements of the
company, whichever is higher.
On close examination of the above
wordings, it may be inferred that
the limit of the 5% of Turnover or
20% of Net-worth is for all related
party transactions but the fact
whether it is with reference to one
party or all parties put together is
not clearly brought out. Going

by the spirit of the regulation for
promoting transparency appears
that it may be for all parties together. A clarification to this effect
may bring out better clarity.
Revised Clause 49 requires all material RPT shall require approval
of the shareholders through special resolution and the related
parties shall abstain from voting
on such resolution.
A listed company is required to
get the prior approval of the audit
committee for all RPT. Hence in
the case of companies covered by
revised Clause 49, the application
of the provisions of section 188(3)
and 188(4) has been rendered nugatory. A listed company cannot
enter into RPT in anticipation of
the Boards consent or approval
by the shareholders. Listed companies are required to make suitable disclosures as contemplated
in the Revised Clause 49.
Accordingly, (1) all material
transactions with related parties
shall be disclosed quarterly along
with compliance report on corporate governance; and (2) the company shall disclose the policy on
dealing with RPT on its website
and also in the annual report.
45
ARTICLE
Comparative Position under the Act and the Listing Agreement
Companies Act 2013
Clause 49 of Listing Agreement
Definition of the
Related Party
Particulars
Only 7 types of transaction

listed in Sub-section (1)
are RPT
Transfer of resources , services ,or obligation between company and related

party regardless of price is RPT
Definition in Clause 49 much wider
Definition of RP
Defined in Section 2(76)
Includes section 2(76), close member

of the family and 7 more categories.
The Close member of the family is
wider concept but not defined
Definition in Clause 49 much wider

.Might face difficulty in determining the close member of the family
if not considered under definition of
relative
Audit Committee
-Required -For RPT

below the limits specified post facto approval is
possible
All RPT prior approval
More Stricter
Board
-Required - RPT
below the limits specified post facto approval is
possible
All RPT prior approval
More Stricter
Exceptions
Ordinary course of
Business /Transaction at
arms length
No such Exceptions
More Stricter
Prior Shareholders -Threshold limit for speciapproval

fied transaction in terms
of annual turnover is 10%
and in terms of the Networth is 10% or Rs 100
crores, whichever is lower
-Materiality defined with threshold

limits as under in terms of annual
turnover -5% Net worth -20%
-In Case of Ordinary case of Business

and Transaction at Arms length Co
Act -No Limit Clause 49 - Audit
Committee prior approval, and in
case of material transactions then
Special Resolution -If related party
transaction then material Limits will
be Turnover -5% Net worth- 10% or
Rs 100 crore whichever is less, Special
Resolution is required. Company may
define lower limits in case.
Long term existing Material contract /Specified

transaction
Regularisation in Next AGM
Same
As per General circular No.

31/2014 dated 17.07.2014
dealing with specifically
with section 188, no fresh
approval should be required under the new Act
for existing contracts if not
modified .
Future Road Map

In view of the detailed provisions
of the Act and listing Agreement,
following Road map is proposed
for compliance
Identification of the related
party in terms of the Act 2013 and
Revised Clause 49
Identification of the transaction in Ordinary course of
Business. On compilation of the
list of such transaction, a check
46
list can be prepared for reference

of the employee.
Identification of the related
party transactions in the company
Documenting the arms length
transaction
Preparation of the Related
party policy detailing the procedure and information collection
by above identification process
Since the above exercise is detailed
Remark
and transverse across all spheres

of the organisation, Organisation
may constitute a committee of
representatives from various
Departments which may work
out the modalities of gathering
the information and drafting the
policy. The approach adopted to
seek compliance to the RPT provision could be similar to that
adopted for Risk Management or
Legal Compliance preferably ITsystem based.
ARTICLE
Corporate Social
Responsibility as
Provisioned in
Mr. Rakesh Sinha
CMD, Eastern Coalfields Ltd.
he inclusion of CSR in the

Companies Act, 2013, is a
strong legislative approach
to develop the transparency &
responsibility for execution of
CSR works by the corporate sectors; that are making profit due
to their business operations in
the society; beyond the range defined. It has immense potential to
make an integration of business
process with social development
in harmonious manner in due
course of making the business
operation by the business entities.
It has brought a basic foundation
through the Act for all the private
and public sectors without making any differentiation. This shall
develop a sense of accountability
to serve the society beyond the
concept of business /profit making by the corporate as an intrinsic part of the business operation.
The Company Acts following
CSR points need a consideration
towards its enrichment.
Though the Companies Act specifies that if the company fails to
spend such amount, the Board
shall in its report as stated under
clause (O) of the sub-section (3)
of section 134, specify the reasons
for not spending the amount.
But it is silent that how it should
be accommodated and carried
over in Companys CSR budget.
Companies Act 2013

This Act should provide freedom
that surplus or the unutilized
fund of any year should be allowed to be thrown forward to
the next three years for its utilization as major projects require the
fund accordingly as per their respective time schedule spanning
in different financial years. After
such time limit, Government
should have provisions in the
Act, that such amount should be
diverted in the Govt.s pool in the
specified manner.
As per the Act clause (X) of
schedule (VII), the infrastructural
facilities are to be provided in the
rural areas. It should also have
provision for carrying out infrastructural work in Municipal and
district Areas by corporate sector,
once the need arises.
In GSR- 129(E) 2 (c) ,under the
definition of CSR , the clause
states that CSR means and includes but is not limited to: Projects or programs relating
to activities specified in Schedule

VII of the Act; or
Projects or Programs related
to activities undertaken by the
board of directors (Board) in pursuance of recommendations of
the CSR Committee of the Board
as per declared CSR Policy of the
company subject to the condition
that such policy will cover subjects enumerated in Schedule VII
of the Act.
whereas in Clause 7 under CSR
Expenditure it states that
CSR activities approved by Board
on recommendation of its CSR
committee, but does not include
any expenditure on an item not in
conformity or not in line with activities which fall within the purview of Schedule (vii) of the Act.
The same needs commensurate
correction.
The above observations have immense scope of deliberations to
strengthen the CSR impact in the
national perspectives.
47
ARTICLE
Companies Act 2013

A fillip to Corporate
Governance
Mr. Pankaj Tewari
Associate Director, PwC
Background and context

The Companies Act 2013 (CA
13) intends to significantly raise
the bar on corporate governance
in India and align it with global
standards. It makes a paradigm
shift from a control based regime to a self-regulatory regime.
One of the chief objectives of CA
13 is to encourage disclosure
and transparency while positively impacting ease of doing business in India.
The new Act subjects both private
and public companies to higher
standards of governance, and the
regulatory regime for private limited companies has been made
stricter, through the withdrawal
of several previous exemptions.
Greater accountability of
Board of Directors
The Act entrusts greater responsibility on the Board of Directors,
empowers them while at the
same time making them more accountable. The role of Directors
becomes even more crucial as
economies today compete to attract capital and good governance
plays a decisive role when investors look for safe places to invest.
To delve further into the evolved
role of the Directors, we need
to understand the impact of
48
new disclosures mandated in

Directors report.
In case of
listed companies, the Directors
Responsibility Statement shall
state that adequate Internal
Financial Controls (IFC) had been
laid down and that such controls
were operating effectively. The
term internal financial controls
has been defined and goes far beyond financial controls. It extends
to the policies and procedures
adopted by the company to
ensure efficient conduct of its
business. It would also include
adherence to the framework established by the company to prevent insider trading. Setting up
an anti-fraud framework is within the realm of IFC.
Under the new regime, the
Boards responsibility is not limited to setting up adequate controls

alone, but extends to ensuring
operating effectiveness of such
controls. This assumes greater
significance in the light of an additional reporting obligation cast
upon the statutory auditor with
regard to operating effectiveness
of internal financial controls. The
Board, Management and statutory auditors would have to align
their approach while evaluating and testing the operating effectiveness of internal financial
controls.
Statutory Compliance &

Risk Management
The Directors have to confirm
to state that they had devised
ARTICLE
proper systems to ensure compliance with all applicable laws and
that such systems were adequate
and operating effectively. Given
the complexity in the Indian
Regulatory Environment, the
Board would have to set up a robust compliance framework to be
able to demonstrate diligence on
their part. The Directors report
should also indicate the development and implementation of a
risk management policy, including identification of risk elements
which, in their opinion, may
threaten the companys existence.
Currently, these requirements are
applicable to listed companies
through Clause 49. Going forward, they will apply to all companies unlisted public companies as well as private companies.
What is uniformly visible throughout the Act is that a number
of these disclosures which were
hitherto covered elsewhere have
been brought under the ambit of
Directors Report. The underlying objective is to bring to notice
of the Directors those important
governance issues which get relegated to periphery only to resurface in the form of a crisis at an
inopportune moment.
Immunity to Non-Executive
Directors
The Board is collectively responsible for the disclosures made in
the Directors Report and non-executive directors are also equally
accountable and responsible.
However, the NEDs have an umbrella of immunity which can
be opened only when they have
been diligent in the performance
of their duties and have not consented or connived in a statutory
violation. Active participation in
board meetings, robust controls
which can be demonstrated and

strong documentation could
be some of the ways to exercise
diligence. Ability to demonstrate
diligence is closely linked to eligibility to claim immunity.
Related Party Transactions

Related
Party
Transactions
(RPTs) have always been under
the regulatory scanner. Abusive
RPTs are a real concern as they
can be manipulated to advance
personal interest of controlling
shareholders. The Companies Act
2013 has significantly overhauled
the rules for doing business with
related parties. Doing away with
the requirement of obtaining approval of central government
is a huge positive shift towards
a self-regulatory environment.
However, the penal consequences have been made much stricter
and contraventions in listed companies could result in imprisonment or monetary penalties.
While harmonization has

happened in several areas, the lack of it persists
in areas like voting on related party transactions,
pecuniary relationships
for Independent Directors
etc. We are therefore still
a long distance away
from a consistent and
harmonious regime which
promotes corporate governance without stifling
business. The MCA and
SEBI have to jointly work
towards ironing out conflict and overlap.
Clause 49 vs CA 13
The revised Clause 49 (C 49)
which is effective from October
1, 2014 prescribes stricter requirements for listed companies. There
are overlaps at several places
causing confusion, duplication
and contradiction. SEBI received
representations from companies
and industry associations, highlighting certain practical difficulties in ensuring compliance. The
recent amendments to Clause 49,
issued on September 15, 2014,
provide a welcome respite for
India Inc. SEBI has rationalized
the approval process for related
party transactions (RPTs) by allowing omnibus approval for repetitive transactions. Insistence
on prior approval of all related
party transactions was threatening to have adverse business
consequences.
While harmonization has happened in several areas, the lack
of it persists in areas like voting on related party transactions, pecuniary relationships for
Independent Directors etc. We
are therefore still a long distance
away from a consistent and harmonious regime which promotes
corporate governance without
stifling business. The MCA and
SEBI have to jointly work towards
ironing out conflict and overlap.
Companies Act 2013 - A

tool for good governance.
The new Companies Act presents
an opportunity to strengthen corporate governance and introduce
cultural and systemic changes.
Good governance is reassuring to
the investors and all stakeholders. It creates a positive perception and builds credibility of an
organization which is far beyond
monetary value. It is a mantra not
only for value protection but also
for value enhancement.
49
ARTICLE
Companies Act 2013:

Raising the bar on
governance
Mr. Sai Venkateshwaran
Partner & Head-- Accounting Advisory

Services, KPMG in India
Tilting the Scale: Rights and duties of

the empowered investor
everal Asian economies and

India in particular, have
seen numerous instances
where promoters or controlling
shareholders of companies have
undertaken transactions, including with their related parties,
which are not in the best interests
of the minority or independent
shareholders. Further, in several
of these instances of corporate
misdeed or failure of governance,
it is the minority shareholders who have been left shortchanged. Over time, this has
prompted the regulators to focus
on what they refer to as abusive
related party transactions and
other acts against minority shareholders and devise ways to curb
them. Coupled with this regulatory focus, India is also seeing
some green-shoots of investor
activism, with some large institutional shareholders now starting
to voice their concerns over such
transactions.
With the intent of raising the bar
on governance and increasing
transparency, the Companies Act
2013 (2013 Act) has brought in
several new requirements, that
may either directly or indirectly
impact the way investors are
looked at and are dealt with by
50
Indian companies. This ushers in

a new era of transparency in related party transactions and also
takes shareholder democracy to
another level.
At a broader level, the 2013 Act
lays greater emphasis on better
governance, by codifying duties
and responsibilities of directors
including independent directors,
and making key managerial personnel more accountable. It has
also laid down tighter norms on
financial reporting, including,
making consolidated financial
statements mandatory and also
establishing other anti-abuse
measures. Auditors reporting
responsibilities have also been

widened, making them more accountable. All of these changes
may ultimately go on to make
the corporate eco-system more
suitable for investors. At a more
specific level, the 2013 Act has
also brought in several measures
to directly protect the interests of
investors, including, tightening
the norms around related party
transactions, mandating vigil
mechanism in companies, enforcing stricter penal provisions to
deter any act to mislead or defraud investors, introducing class
action suits, and the like. Some of
these specific provisions are examined in greater detail.
ARTICLE
Related party transactions
The 2013 Act has both, widened
the coverage of related parties as
well as tightened the approval
norms.
Wider coverage of related parties
and transactions
The coverage of related parties under the 2013 Act is much
wider than that in the 1956 Act.
The definition of key managerial
personnel (KMP) and directors
under the 2013 Act covers all directors and the chief executive
officer, chief financial officer, and
company secretary. Further, the
relatives of these directors and
officers are also covered, irrespective of whether they are financially dependent on the officer or
director or whether they may be
expected to influence, or be influenced by, that officer or director
in his/her dealings with the company. Further, the list of related
parties also includes the directors
and key managerial personnel
of the holding company (including ultimate holding company),
together with their relatives. The
list of related parties also could
include partnership firms, companies, & other body corporates,
where a director of the company
may have an interest. As a result,
the list of related parties would
now cover a much wider set of
entities and individuals, and may
at times seem counterintuitive.
For instance, a private company
in which an independent directors brother owns shares would
now be a related party, and any
transaction with such an entity
would be subject to approvals
under the 2013 Act.
Approval process and self
governance model
As per the 2013 Act, the Audit
Committee needs to accord prior

approval for all transactions with
related parties. The committee
should comprise of a majority
of independent directors, who
in turn are governed by a code
of professional conduct, which
states that they shall safeguard
the interests of all stakeholders,
particularly the minority shareholders. So in essence, the onus
of approval of related party transactions has shifted from the companys management to a group
comprised largely of independent directors, whose primary
responsibility is to safeguard the
interests of minority shareholders. The basic questions they
need to answer are whether (i)
these transactions are in the ordinary course of business; and
(ii) these transactions are at arms
length. For those transactions
that do not pass muster with the
Audit Committee in terms of being arms length and in the ordinary course of the companys
business, the board approval is
required, and if certain transaction thresholds are met, then the
shareholders approval through
a special resolution, where any
interested shareholder is not allowed to vote.
Since the Act was operationalised, there have been several
changes that have been made
to the requirements on related
parties to ease their implementation. However, without the concept of financial dependence being brought into the definition of
a relative, the list of related parties still remains quite unwieldy
for companies to handle.
Impact on government
companies
In the context of public sector
companies, the current definition
of related parties would make
all PSEs related to each other, as
a result of their common ownership by the government; it makes
it impractical for government
companies to even gather a list
of their related parties and monitor compliance. While the SEBI
and the RBI have recognised this
issue and provided adequate exemptions to government companies, the corresponding exemptions under the 2013 Act are yet
to be notified; these would need
to be notified by the MCA under Section 462 of the 2013 Act.
Similarly, there are several other
provisions applicable to government companies, which have not
been carried forward in the 2013
Act, and would possibly need to
be exempted through the aforesaid notification.
Misleading statements to
investors and others
While the 1956 Act permitted action to be taken against the company and its directors for untrue
or misleading statements made in
a prospectus, the 2013 Act now
permits any person, group of persons or any association of persons
affected by any misleading statement or the inclusion or omission
of any matter in the prospectus to
file a suit or initiate any other action, including action under section 447; this section deals with
51
ARTICLE
frauds, and prescribes the related
penalties;a minimum imprisonment of three years in matters
involving public interest, which
may extend up to 10 years and a
minimum fine that is equivalent
to the fraud amount or a maximum of three times the amount.
In the context of public
The Act also provides that a person who, either knowingly or

promise or forecast which is false,
deceptive or misleading, or deliberately conceals any material
facts,to induce another person
to enter into, or to offer to enter
into any agreement for buying or
selling of shares; or for obtaining
credit facilities from any bank or
financial institution, shall be liable for action under section 447.
their common ownership
Class action suits

The 2013 Act also brings the
concept of class action suits into
Indian corporate law. As per
these provisions, if 100 shareholders or those holding 10 per cent
of the share capital of the company, whichever is lower, are of
the opinion that the management
or conduct of the affairs of the
company are being conducted in
a manner prejudicial to the interests of the company or its members, they can file an application
before the National Company
Law Tribunal for seeking all or
any of the orders, including:
to restrain the company from
committing certain actions;
to claim damages or compensation or demand any other
suitable action from or against
the company or its directors, its
auditors, any expert or advisor or
consultant or any other person;
sector companies, the

current definition of
related parties would
make all PSUs related to
each other, as a result of
by the government; it
makes it impractical for
government companies
to even gather a list of
their related parties and
monitor compliance.
While the SEBI and the
RBI have recognised
this issue and provided
adequate exemptions to
government companies,
the corresponding exemptions under the 2013
Act are yet to be notified; these would need to
be notified by the MCA
under Section 462 of the
2013 Act.
to seek any other remedy as
the Tribunal may deem fit.
Considering that the thresholds
for initiation of a class action suit
are quite low, the fact that we do
not have a mature process to deal
with such matters, and that there
are no adequate anti-abuse mechanisms, one can expect these provisions to be used.
Other investor protection

measures
Whistleblower mechanism
The 2013 Act also requires the establishment of a vigil mechanism
for directors and employees to
report genuine concerns. This is
meant to serve as an early warning mechanism and also help detect frauds within the company.
Once these are highlighted, there
are avenues available to investors to pursue action against the
company and other stakeholders
involved.
Change in object clause post IPO
The 2013 Act also provides an exit
route to investors in a company
that has raised money through an
IPO, if such a company has unutilised IPO funds, and proposes
to change its objects for which it
raised the money.
The impact: two sides

of a coin
With all these changes, there can
certainly be increased transparency in the area of related party
transactions and any matter impacting investors, which should
lead to better protection of minority shareholders interests.
However, on the flip side, this
now tilts the scale to the other extreme, and possibly takes shareholder democracy to a different
level, where minority shareholders are significantly empowered.
This power must be used judiciously, else it could become
counterproductive and business
disruptive. The 2013 Act was after all, meant to raise the bar on
governance, and not become a
hurdle to business.
The views and opinions herein are those of the author and do not necessarily represent the views and opinions of KPMG in India.
52
ARTICLE
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ARTICLE
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54
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ARTICLE
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isksoj yksxksa dks gkFk esa nsus dh ijaijk
ljdkjh daifu;ksa dks Mkyuh gksxhA
dsoy dkjiksjsV lapkj ;k kklfud
dk;ksZa ls tqM+s yksxksa vFkok dqN Lo;alsoh
laxBuksa ,uthvks ds Hkjksls lh,lvkj
xfrfof/k;ksa dk lapkyu ugha fd;k
tk ldrkA blds fy, ,d MsfMdsVsM
Vhe dh t:jr gSA oks Vhe dsoy
lh,lvkj xfrfof/k;ksa ls gh tqMh gksA
dsanz dh ubZ MsfMdsVsM Vhe dh
t:jr gSA oks Vhe dsoy lh,lvkj
xfrfof/k;ksa dks fy;k gS mlls
yxrk gS fd vkus okys le; esa ;g
nsk esa lkekftd cnyko dh
fnkk esa egRoiw.kZ Hkwfedk r;
djus tk jgh daifu;ksa ij D;ksafd
oks lh/ks ljdkj ds ea=ky;ksa ds
v/khu dke djrh gSA futh {ks= dh
dbZ daifu;ka ljdkj dh bl igy ls
[kqn dks tksM+us dk ,syku Hkh dj pqdh
gSA ljdkj Hkh ljdkjh daifu;ksa ds

yxHkx lksyg gtkj djksM+ :i;s ds
lh,lvkj QaM ij vkkk Hkjh fuxkg
yxk, gq, gSA daifu;ksa dk ;gh QaM
nsk esa u;k lkekftd cnyko ykus
okyk gSA blfy, ljdkjh daifu;ka
Hkh ftruk tYnh daiuh dkuwu ds
ko/kkuksa dsa eqrkfcd [kqn dks <ky
ysaxh oks mruh tYnh nsk ds lkekftd
cnyko esa viuh fgLlsnkjh dj ldsaxhA
;g r; gS fd u, daiuh dkuwu us
daifu;ksa ds lapkyu ds rkSj rjhds
cny fn, gSA gkykafd ljdkjh
daifu;ksa ds ekeys esa xousZal cgqr cM+k
eqk ugha gSA lkB lky ds bfrgkl
esa ikjnfkZrk esa deh ;k fuoskdksa ds
fgrksa ls f[kyokM+ dk kk;n gh dksbZ
cM+k elyk gqvk gS ftlus lkoZtfud
mieksa ds dkedkt ij fdlh rjg dk
nkx yxk;k gSA bl ekeys esa ljdkjh
daifu;ksa us geskk viuk Hkjkslk dk;e
j[kk gSA ysfdu vc ;g vkSj t:jh
blfy, Hkh gks x;k gS D;ksfd vc
bl ekeys esa vkSj lrdrkZ cjrus dh
t:jr gSA daifu;ksa ds csgrj lapkyu
ds lkFk vxj lkekftd nkf;Roksa dk
fuoZgu gksrk gS rks lkoZtfud mieksa
dk fodkl Hkh rst gksxkA
55
SCOPE Launches
Cleanliness Drive under
(On left) Mr. C. S. Verma, Chairman, SCOPE and Dr. U. D. Choubey, DG, SCOPE (on right) paying floral tributes to Mahatma Gandhi,
Father of the Nation.
esponding to the call given by the Prime Minister

for a Swachh Bharat
Mission to realize Mahatma
Gandhis dream of a clean India
by the 150th birth anniversary of
Mahatma Gandhi in 2019, SCOPE
organized Cleanliness Drive
on 2nd October 2014 at SCOPE
56
Complex and SCOPE Minar.

The entire mission was led by Mr.
C. S. Verma, Chairman, SCOPE
and Chairman, SAIL and Dr. U.
D. Choubey, Director General,
SCOPE with participation of
large number of representatives
from public sector enterprises
and SCOPE employees.
Floral tributes were also paid to

the Father of the Nation before
starting the cleanliness drive.
On the occasion, Mr. C.S. Verma,
Chairman, SCOPE administered
the Pledge for cleanliness to
all
the
representatives
of
PSEs and SCOPE employees.
He urged them to follow the
SCOPE News
Mr. Kapil Dev Tripathi takes Charge as

Secretary, Department of Public Enterprises
r. Kapil Dev Tripathi an IAS officer of 1980 batch of the Assam

Meghalaya cadre has taken charge as the Secretary, Department of
Public Enterprises, Ministry of Heavy Industries and Public Enterprises.
Mr. Tripathi has held various posts in Central Government as well as State
Governments. Before taking his present charge he was Secretary, Central
Vigilance Commission, Department of Personnel and Training, Ministry of
Personnel, Public Grievances and Pensions. He has been given additional
charge as Secretary, Central Vigilance Commission.
same in letter and spirit in line

with the nationwide drive of
Swachh Bharat Mission.
Mr. C. S. Verma, Chairman, SCOPE administered the Pledge for Cleanliness to the
Employees of PSEs and SCOPE. Also seen in the picture is Dr. U. D. Choubey, DG, SCOPE.
Dr. U. D. Choubey, Director

General, SCOPE sought the
active support and participationof all PSEs in SCOPEs collective
quest to make a Swachh Bharat so
that PSEs project still better image in the nation-wide drive. He
said the PSEs have never lagged
behind in partnering in such
initiative.
(On left) Mr. C. S. Verma, Chairman SCOPE and (on right) Dr. U. D. Choubey, DG, SCOPE sapling plants during the Launching of
Cleanliness Drive by SCOPE.
57
SCOPE News
Interactive Meeting of the CEOs of PSEs

with the Central Vigilance Commissioner
(L to R) Dr. U. D. Choubey, DG, SCOPE, Mr. C. S. Verma, Chairman, SCOPE, Mr. Pradeep Kumar, Central Vigilance Commissioner,
Ms. Kusumjit Sidhu, Secretary, DPE & Mr. K. D. Tripathi, Secretary, Central Vigilance Commission.
SCOPE organized an Interactive Meeting of Shri Pradeep Kumar, Central Vigilance

Commissioner (CVC) with Chief Executives and Senior Executives of PSEs at its premises in
the presence of Ms. Kusumjit Sidhu, Secretary, DPE, Mr. K.D. Tripathi, Secretary, CVC, Mr. C.S.
Verma, Chairman, SCOPE and Chairman, SAIL and Dr. U D. Choubey,DG,SCOPE. The meeting
was organised on 19th September, 2014.
Mr. B. Ashok, Chairman, Indian Oil Corporation proposed vote of thanks.
r. Pradeep Kumar, CVC

while interacting with
the CMDs emphasised
that organizations need to appreciate that vigilance is an aid
to management. He stated that
in addition to IQ and EQ, Moral
Quotient (MQ) is also important. Appreciating the enormous
contribution of CPSEs in nation
building, CVC said that public
sector has not only built the economic foundation of the country,
but has also provided a vast pool
58
of excellent technical and managerial talent to enterprises, public or private. He emphasised on

continuous learning and acquaintance with newer technology in
the changing environment as
crucial for maintaining competitiveness. He took several questions from the participants and
responded in the wider interest
of public enterprises.
Mr. C. S. Verma, Chairman,
SCOPE & Chairman, SAIL in
his address, highlighted various
issues which are matters of concern in CPSEs with regard to vigilance. These inter alia included
issues related to award of contracts; anonymous & pseudonymous complaints and issues
related to individual vigilance.
He suggested setting up of a
Consultative committee to deal
with complex contract issues of
PSEs of above a certain value. He
also mooted the ideas of pre-audit for large tenders.
SCOPE News
(L to R) Mr. Pradeep Kumar, CVC, Mr. C. S. Verma, Chairman, SCOPE, Dr. U. D. Choubey, DG, SCOPE and Mr. B. Ashok, Chairman,
IndainOil addressing the Interactive Meeting.
While welcoming CVC, Dr. U.D.

Choubey,
Director
General,
SCOPE suggested preparation
of an operating manual, which
could be used as a reference/guide
on key vigilance matters arising
in PSEs. This would be useful for
the entire public sector for deciding cases in a timely manner. Dr.
Choubey offered to provide all
assistance from SCOPE to CVC
in this regard. He also stressed
on timely vigilance clearance for
appointment of CMDs and Board
level positions in PSEs.
Some of the issues highlighted
during the interaction included
action against persons making

false, malicious and unfounded
complaints, applicability of vigilance rules in JVs/subsidiaries of
Oil Companies, proving to be hinderance in their business forays,
guidelines on E-Commerce and
duration to keep data on contract
awarded by PSU on its website.
On the issue of procurement, the
CVC mentioned that the guidelines on award of contract on L1
basis are based on globally accepted principle. He stated that
where there are major changes in
the terms and conditions in the
tenders before award, it is always
desirable to retender the contract

in the interest of transparency
and fairness. Where a JV is with
a private partner, the principles
of integrity, accountability and
best ethical practices should be
followed. On complaints received
against senior functionaries, an
effective mechanism is already
in place. The group of Secretaries
Committee headed by the Cabinet
Secretary screens all complaints
before they are investigated.
Mr. B. Ashok, Chairman,
Indian Oil Corporation proposed
vote of thanks.
59
PSEs Actively Participate in

GSL Launches Swachh GSL & Surrounding Abhiyaan
n line with the Nationwide

launch of Swachhta Saptah
announced by Prime Minister
Mr. Narendra Modi, Goa Shipyard
Limited formally flagged off
Swachh GSL and Surrounding
Abhiyaan in and around the
yard in a big way on 25th September 2014.
The Yard in the week gone by
witnessed extensive cleanliness
drive, which gathered further
momentum with RAdm Shekhar
Mital, NM (Retd) CMD, GSL administering Swachhta Shapath
to the employees and officers.
The same was followed by walk
around in the yard along with the
other senior officials of GSL, in order to identify areas which need

specific attention and cluttered
with unused condemnable machines/scrap for years.
EIL joins the Nation in launching

Swachh Bharat Abhiyaan
ngineers India Limited (EIL)

joined the nation in launching
the Swachh Bharat Abhiyaan
on October 2, 2014. On this occasion, a number of activities
including cleanliness drive in and

around office premises, administering of Swachchhata Shapath,
poster/slogan/essay competition
were organized in various offices
of the Company which witnessed

enthusiastic participation of all
employees. A contingent of 200
EIL employees also took part in the
official launch of Swachh Bharat
Abhiyan at Rajpath. The EILians
took the Swachchhata Shapath
and participated in a walkathon
flagged off by Honble Prime
Minister. As part of the Swachh
Bharat Abhiyaan, EIL has also endeavoured to improve sanitation
facilities by launching construction of 175 toilets in 155 schools in
the states of Tamil Nadu, Odisha
and Bihar.
PFC Organizes a special function to mark

launch of the Swachh Bharat Campaign
n
accordance
with
the
Government of Indias Swachh
Bharat campaign, PFC organized
a week-long cleanliness drive
in the corporation as well. PFC

CMD, Mr. MK Goel addressed
the Employees highlighting the
importance and the spirit of the
Swachh Bharat Abhiyan. In his

message to the Employees, he
stressed on the need for voluntary cleanliness activities,
which should not be restricted
to the campaign period, only but
should become an indelible part
of Office Culture and a habit in
everyones daily routine. A cleanness drive was subsequently organized in the office premises
and its surrounding areas. CMD
and Directors, as well as senior
officials and employees of the
company participated with great
enthusiasm.
Swachh Bharat Awareness Programme

organized in NMDC
week long awareness programme

on
Swachh
Bharat was organized in NMDC
as per the guidelines received
from Government of India from
25th September 2014 to 2nd
October, 2014. The concluding
programme of the awareness and
a massive Safai / cleanliness programme was organized at Head
Office, Hyderabad. Mr. N.K.
Nanda, Director (Technical) was
the Chief Guest on the occasion.
Mr. Subhrendu Bhattacharya,
Retd. IAS, Former Commissioner,
Panchyat
Raj
and
Rural
Development was the Guest
of Honour. Mr. S. Thiagarajan,
Director (Finance); Mr. Subimal
Bose, Director (Production);
Mr. Rabindra Singh, Director
(Personnel) and Mr. Sandeep

Tula,
Executive
Director
(Personnel and Administration)
along with senior officials and
employees were present on the
occasion. Chief guest Mr. N. K.

Nanda appreciated the efforts
being under taken by employees of NMDC towards Swachh
Bharat.
61
62
BHEL Employees Take

Cleanliness Pledge
HEL employees took the cleanliness

pledge on the occasion of the nationwide
launch of the Swachh Bharat Abhiyaan. As part
of a company-wide initiative, Mr. B. Prasada
Rao, CMD, BHEL, administered the pledge
to employees of BHELs Corporate office on
October 2, the birth anniversary of the father
of the nation, Mahatma Gandhi.
Swachh Bharat Campaign by MDL
n its bid of making Swachh

Bharat campaign a success,
Mazagon Dock Limited organized a massive clean-ship and
awareness drive in the Yard as well

as in the areas surrounding MDL.
The campaign commenced with
administering of the Swachta
Shapath (pledge) by all employees led by RAdm R K Shrawat,

CMD. Trees were planted in the
Yard and a new toilet block for
operatives was also inaugurated.
A number of other in-house activities in consonance with the directives of Ministry of Defence were
also undertaken.
MDL teams led by CMD and
Directors then proceeded out of
the Yard and started the cleaning of P Dmello Road around
Dockyard Road Station, Ferry
Wharf and at Darukhana.
Caption: RAdm R K Shrawat,
CMD, MDL takes the lead in
MDLs clean-ship drive on the occasion of Gandhi Jayanti outside
the Shipyard.
CRWC launches Swachh Bharat Campaign
entral Railside Warehouse Company Ltd,

organized a Swachh Bharat Campaign at
its Corporate Office on the Birth Anniversary of
Mahatma Gandhi, Father of Nation. Mr. K.U.
Thankachan, MD, CRWC administered Swachhta
Pledge to all officials of CRWC present on the occasion. While addressing the employees on this occasion, he emphasized the importance of the cleanliness in our day to day activities at office and home
also. He said that unless our working environment
is clean we will not able to concentrate on our work
and will not able to give desired results.
63
64
Swachh Bharath Mission at ECIL
esponding to the call given

by the Prime Minister for a
Swachh Bharat Mission to realize Mahatma Gandijis dream of a
clean India by the 150th birth anniversary of Mahatma Gandhi in

2019, Electronics Corporation of
India Limited (ECIL) has initiated
special drive to clean up its environment on the day of Gandhi

Jayanthi.
Mr. P Sudhakar, CMD, Mr. VSB
Babu, Director (Personnel), Mr.
J S Anand, General Manager
(Finance), Mr. G Nagabhushanam,
Head, ESD, Mr. D. Balakoteswara
Rao, AGM (Personnel), Mr. G
Yadagiri Rao, President, Staff &
Workers Union, Dr. Venubababu,
Secretary, Officers Association
and several employees of various levels cleaned up the
Administrative Building premises and the Factory premises. Also
to create awareness in the society,
ECIL employees also cleaned up
the area near Dr. B R Ambedkars
statue, ECIL Cross Road.
BEL launches Swachh Bharat campaign
esponding to the Prime

Minister,
Mr
Narendra
Modis call for Swachh Bharat
and to realise Mahatma Gandhis
dream of a clean India, Bharat
Electronics Ltd (BEL) organised
a cleanliness campaign, in all its
Units and offices.
P C Jain, Director (Marketing).

Mr M L Shanmukh, Director
(HR), exhorted the employees
to maintain the cleanliness drive
year-round at the workplace and

elsewhere. Cleaning the road outside the Corporate Office was also
undertaken.
As part of the campaign, under

the leadership of the BEL management, employees cleaned
their workplaces, office surroundings, removed weeds and
other vegetation on the roadside
and planted saplings. On October
2, 2014, Gandhi Jayanti, the employees took the Swachhta Shapath. At the Corporate Office,
the pledge was administered in
Kannada by Dr Ajit T Kalghatgi,
Director (R&D), in Hindi by Mr
Amol Newaskar, Director (Other
Units), and in English by Mr
65
66
NSIC organises Intensive National Cleanliness Campaign
SIC organized a nationwide campaign beginning from 25th Sept.2014

at all the NSIC offices across the country.
Mr. P. Udayakumar, Director (Planning
& Marketing) administered a Swachhta
Shapath(Pledge) to the employees at
the Head Office. Speaking on the occasion, Mr. P.Udayakumar, Director (P&M),
NSIC stated that each one of us knows
about the importance of cleanliness and
Hygienic work environment which can
improve the productivity considerably.
As such full effort must be put by employees & their family members to involve
participation of all sections of the society
to bring about mass awareness and lasting behavioural change

to achieve this goal and make this campaign a great success.
ITIs Initiative on Swachh Bharat
n line with the call for Swachh Bharat by Prime

Minister of India, ITI Ltd held cleaning campaign
within the premises of ITI. The mission was inaugurated by Mr. K L Dhingra, CMD, who administered
the Swachata Shapath to all the employees of ITI. In
his opening remarks, Mr. Dhingra stressed the need
for everyone to be part of this mission so that we could
create a Clean India. This was followed by cleaning
the inside and outside of corporate office which was led
by Mr. Dhingra along with the functional Directors and
CVO. Senior officers and employees of corporate office
took active part in this campaign.
Swachh Bharat Diwas observed

in THDC India Limited
wachh Bharat Diwas observed today in THDC India Limited

(THDCIL) on the occasion of Birth Anniversary of Mahatma
Gandhi. Mr. R.S.T. Sai, CMD, THDC India Limited administered the
Swachhta Shapath (Pledge on Cleanliness) to the employees of the
Corporation in the presence of Mr. Sridhar Patra, Director (Finance)
and Mr. S.K. Agrawal, GM(P&A/CC), THDCIL. THDCIL had launched
Swachh Bharat Campaign under which various activities such as
Prabhat Pheri by students of TES School, Debate Competition on the
topic Advantage to promote a Hygienic & Clean Work Environment
for THDCIL Employees & Students of TES School, Essay Competition
on the topic Importance of Cleanliness for Better Life for THDCIL
Employees & Students of TES School and Shram Daan by THDCIL
Employees for Cleanliness etc. were organized to increase awareness
for cleanliness.
67
68
Swachh Bharat Abhiyan at KIOCL Limited
IOCL Limited launched the week long

Swachh Baharat Abhiyan starting from
September 26 to Oct 2, as a tribute to the Father
of the Nation.
Mr. Malay Chatterjee, CMD, inaugurated the mission

on 26 September 2014. Speaking on the occasion, Mr.
Chatterjee stated that the objective of Honble Prime
Ministers Swachh Bharat movement is to address problems of sanitation, waste management and make India a
clean country, ensuring hygiene across the country. Mr.
Chatterjee further emphasized on cleanliness and sanitation as an integral part of living along with the change in
mind set of the people. This mission should not be limited
only for a week but it is a continuous process he added.
He recalled that under Corporate Social Responsibility
policy, KIOCL has constructed toilets in government
schools near its Pellet Plant at Mangalore and also is in
the process of constructing Public Toilets in the vicinity
of Corporate office.
Dci Contributes to Swachh Vidyalaya Scheme under Csr
redging Corporation of India Limited, having its

Head Office in Visakhapatnam has taken a lead
in this national mission under its Corporate Social
Responsibility Program for 2014-15 and is committing an
amount of about Rs.24 Lakhs for construction of toilets for
Government Schools in Visakhapatnam. The Company
has begun this campaign in Visakhapatnam by committing to construct toilets for School Children at Government
High School, Sabbavaram. The foundation stone for construction of Toilets at Government School, Sabbavaram,
Visakhapatnam was laid by Capt. D.K.Mohanty, CMD,
DCI, Cmde. P.Jayapal, Director (Operations & Technical)
and other senior officials of the Company, Headmaster
of the School, officials from district administration and
school children.
PERSONALIA
Mr. Harpreet Singh
Mr. R. R. Mishra
Mr. Om Prakash
Mr. Manoj Mishra
Mr. K. K. Parida
takes over as CMD

of CWC
joins as CMD
of WCL
takes over as
CMD of SECL
takes over as
CMD of CCI
takes over as
Director (Finance), MCL
69
70
Mr. Narendra Singh Tomar, Union Minister for Mines, Steel, Labour
& Employment inaugurates KIOCLs Pellet Auditorium
nion Minister for Mines,

Steel, Labour & Employment, Mr. Narendra Singh Tomar unveiled KIOCLs rejuvenated Pellet Auditorium
during his visit to the Corporate
office of KIOCL in Bangalore.
Speaking on the occasion, Union
Minister emphasized that KIOCL
has done pioneering work in
the field of iron-ore mining and
beneficiation of magnetite ore in
the State of Karnataka and has
been a leader in the Country for
Pelletization. Hence, the State
Government of Karnataka must
ensure that this Asset to the
Nation, KIOCL, do not continue
to suffer due to non-allocation
of a captive iron ore mine. The
Minister further stressed that
Union Government is emphasising thrust on increased utilisation
of pellets as a raw material in the
blast furnaces of integrated steel
plants in the Country. KIOCL,
being pioneer and a leader in
the pelletisation industry can
Mr. Narandra Singh Tomar Union Minister for Mines, Steel, Labour & Employment
inaugurating KIOCLs Pellet Auditorium
contribute immensely in utilizing these resources in the national interest. CMD, KIOCL
Mr. Malay Chatterjee apprised
the Union Minister on the challenges faced by the Company on
closure of its Kudremukh mines
and sought for his assistance
and patronage of Union Minister
for allocation of a suitable mine
at the behest of the State Govt.
of Karnataka. Mr. Chatterjee
appealed to the Minister for
immediate intervention for allocation of mine in Karnataka and

other states. The Minister was informed earlier that the Company
has always been a profit earning and dividend paying CPSE.
KIOCL is currently finalizing its
long term plan with substantial
capital investment in Green field
projects in the states of Karnataka,
Odisha, Jharkhand and Andhra
Pradesh to lead the Pelletization
thrust in the Country.
nion Minister Mr. Ram

Vilas Paswan, (CA & FPD)
planted a sapling at RWC,
Shakurbasti towards promotion
of greenery and environment
friendly practices, around its
warehouses
71
72
NBCFDC Organises Annual Conference of
State Channelising Agencies
r. Thaawar Chand
Gehlot, Union Minister
of SJ&E addressed
the participating MDs of State
Channelising Agencies (SCAs)
of NBCFDC during Annual
Conference cum Review
Meeting recently in SCOPE
Complex at New Delhi. In his
address the Minister, highlighted the need of efficient and effective delivery system for speedy
disbursement of funds to the ultimate beneficiaries. He reiterated
the need of identifying problems
in delivery mechanism so that the
beneficiaries may get loans without any hassle or delay and also
repay in time.
Highlighting the important role
of skill development, the Union
Minister of SJ&E emphasized
that the artisans and handicraft
persons should be exposed to
latest techniques in the areas of
manufacturing and production.
Better designs should be introduced keeping in view the market trend. He also stated that
the State Channelising Agencies
have greater responsibilities to
improve the socio-economic
condition of weaker sections.
The Minister of State for SJ&E
Mr. Sudarshan Bhagat in his address informed that more than 18
lakh Backward Classes families
are assisted by disbursing loans
over Rs.2667 Cr under NBCFDC
Schemes. He emphasized that
women empowerment should be
on the top of the agenda while
implementing schemes of the
Corporation at all levels.
The Minister for Social Justice and Empowerment, Mr. Thaawarchand Gehlot (centre), Mr. Sudarshan Bhagat, State Minister for SJ&E ( 2nd from left) and Mr. Sudhir
Bhargava, Secretary (SJ&E), (2nd from right) releasing the News Letter of NBCFDC.
Mr. A.A. Naqvi, MD, NBCFDC (extreme left) and Mr. B.L. Meena, Joint Secretary (BC),
Ministry of SJ&E, (extreme right) are also seen on the occasion.
Highlighting the important role of skill development, the Union Minister

of SJ&E emphasized that
the artisans and handicraft
persons should be exposed to latest techniques
in the areas of manufacturing and production.
Better designs should be
introduced keeping in
view the market trend. He
also stated that the State
Channelising Agencies
have greater responsibilities to improve the socioeconomic condition of
weaker sections.
In his address, Mr. Sudhir

Bhargava, Secretary (SJ&E), advised the State Channelising
Agencies (SCAs) that marketing
of products through E-commerce
is a better option to reach a
large number of potential buyer in the country. On the occasion, Union Minister (SJ&E) and
Union Minister of State (SJ&E)
released NBCFDC Newsletter.
They also gave away awards to
State Channelising Agencies of
Kerala, Karnataka and Himachal
Pradesh for better performance
in their respective States. The
MD, NBCFDC, Mr. A. A. Naqvi,
welcomed the Honble Ministers,
Secretary and Joint Secretary,
Ministry of Social Justice and
Empowerment, and briefed about
the achievement of NBCFDC
w.r.t. Loan disbursement and recovery from beneficiaries
73
74
BHEL Maintains Leadership Position in a

Shrinking Market; Achieves Turnover of Rs.40, 338 cr
Profitability sustained under
Highest ever Synchronisation/
adverse business conditions;
Commissioning of 13,452 MW in
a year
Total Dividend of 141.5% declared;
n spite of fiscal 2013-14 being

an extremely challenging year
for Bharat Heavy Electricals
Limited (BHEL), the company
has been successful in navigating through such a constrained
business environment. BHEL has
achieved a turnover of Rs.40,338
Cr and a net profit of Rs.3,461 Cr
during 2013-14. The resilience of
the company is evident from the
net Profit Margin of 9 percent
which is still higher than many
industry peers. This was stated
by Mr. B. Prasada Rao, CMD,
BHEL at the 50th Annual General
Meeting of the company in New
Delhi recently.
Consequently, a total dividend of
Rs.693 Cr, has been declared for
2013-14, which is 141.5 percent of
the paid-up capital (including an
interim dividend of 65.5 percent,
maintaining the track record of
paying dividends uninterruptedly since 1976-77, he added.
Addressing shareholders, Mr.
Rao said that, during the year
BHEL synchronized/ commissioned all time high power projects of 13,452 MW which is the
highest in a single year. This includes commissioning of 11,266
MW in utilities comprising 9 nos.
of 600 MW sets, 1,698 MW in captive/industrial sets, and 488 MW
in the overseas markets.
Mr.
Rao
said
that
despite
Mr. B. P. Rao, CMD, BHEL addressing 50th AGM of the Company.
unfavorable externalities, BHEL

secured orders worth Rs. 28,007
Cr. from its diversified business
segments. Despite severe market
shrinkage and stiff competition in
the power sector, BHEL increased
its market share from 68 percent
in 2012-13 to 72 percent in 201314 which included highest ever
mega EPC order worth Rs.7,900
Cr for 3x660 MW supercritical units from NTPC for North
Karanpura. At the end of the year
total orders in hand for execution
in 2014-15 and beyond, stand at
Rs.1,01,566 Cr.
With a manufacturing capacity
of 20,000 MW of power equipment per annum, BHEL is one of
the few global companies with
the capability to manufacture the
entire range/type of power equipment. Today, power stations with
BHEL supplied equipment have a
sturdy 57 percent share in Indias

total installed power generation
capacity and contributes 65 percent to the total generation from
coal based thermal utility sets,
said the CMD.
Keeping up with its commitment to R&D led growth strategy,
BHEL spent Rs.1,114 Cr in 201314 which was 2.76 percent of the
turnover as against 2.49 percent
for the previous year. This is the
highest R&D spend by an Indian
company in the engineering and
manufacturing segment. BHELs
total intellectual capital of 2,589
patents and copyrights is a reflection of its R&D efforts with
the highest ever IPRs (434) filed
during the year. Turnover from
in-house developed products
amounted to Rs.8,110 Cr which
is 20 percent of the companys
turnover.
75
76
PSEs Ink MoUs

CRWC Signs agreement
with IWAI
CRWC Ltd has opened new vistas in the field of multi-modal logistics in North-East by inking an
agreement with Inland waterways
Authority of India (IWAI) for taking over facilities at Pandu Port
complex of IWAI at Guwahati.
CRWC is planning to provide
logistics solutions for various
stake holders operating in NE
by providing viable alternative
in form of cost-efficient and ecofriendly mode of transportation
over National Waterways No. 2
in association with IWAI. The existing facility at Pandu Port complex comprises two warehouses
along the full rake Railway siding
besides permanent jetty for facilitating waterways movement.
Mr. K.U.Thankachen, MD, CRWC signed agreement with Mr. Prabir Pandey, Member
(Finance & Traffic ), IWAI presence of Mr. Ananda Bose, Chairman, CRWC and other
officers.
Logistics cost in North-East is on

higher side owing to over stressed
National Highways and limited
extent of rail network and in such
scenario, waterways movement
may be fostered with Guwahati

as hub for upper Assam, Tripura
and Mizoram in respect of both
inward and outward traffic of
North-East.
NTPC MoU with Govt. of AP for 1000 MW

Solar Power Projects
TPC signed a Memorandum of Understanding (MoU) with

Government of Andhra Pradesh (GoAP) in Hyderabad for developing 1000 MW solar power project(s) in Andhra Pradesh.
Dr. Arup Roy Choudhury, CMD, NTPC and Mr. Ajay Jain, Secretary, Energy, Exchanging
the MoU document.
The MoU was signed by Dr. Arup

Roy Choudhury, CMD, NTPC
and Mr. Ajay Jain, Secretary to
Government of Andhra Pradesh,
Department of Energy in the presence of Chief Minister of Andhra
Pradesh, Mr. N Chandrababu
Naidu, Union Minister of State
(Independent Charge) for Power,
Coal and New& Renewable
Energy Mr. Piyush Goyal, Union
Minister of Civil Aviation, Mr.
Ashok Gajapati Raju, and other esteemed dignitaries. Mr.
R. Venkateswaran, Regional
Executive Director, NTPC and
Mr. Janardan Kar, Executive
Director (Business Development),
NTPC were also present on the
occasion.
77
78
CMD, REC, Distributes Aids and Appliances to

Persons with Disabilities under CSR initiatives
r. Rajeev Sharma, CMD,

Rural
Electrification
Corporation Limited,
distributed Aids and Appliances to
over 340 Persons with Disabilities,
including Orthopedically, Visual and Hearing impaired, in
Bulandshahr, Uttar Pradesh,
in presence of Ms. Kiran Puri,
Jt. Secretary, Ministry of Social
Justice
and
Empowerment
(MoSJE), Mr. Rakesh Arora,
Executive Director, REC, other senior officials of REC and
Artificial Limbs Manufacturing
Corporation of India (ALIMCO)
and local dignitaries .
REC committed financial assistance of Rs. 332.00 Lakh under
CSR initiatives to ALIMCO, a PSU
under the MoSJE, for providing
aids and appliances to approx.
Mr. Rajeev Sharma, CMD, REC, distributing Aids and Appliances to Disabled Person.
4000 persons with disabilities

from poorer and backward sections of society in 15 locations
in 7 States, namely UP, Bihar,
Jharkhand, MP, J&K, Odisha and
Assam, enabling them to lead
improved quality of lives of independence and dignity, and to

improve the socio economic status of the direct as well as indirect
beneficiaries, ie their families and
care givers in the long term.
REIL MD Felicitated as an Eminent Engineer by IoE
r. A.K. Jain, MD,

Rajasthan Electronics
& Instruments Limited
(REIL), has been felicitated as an
Eminent Engineer by Institute
of Engineers on 47th Engineers
Day at Jaipur, for his outstanding contribution to the country
over the period of last more than
32 years, on the occasion of 47th
Engineers Day. On this occasion
Mr. A.K. Jain reiterated the commitment of the Company for
Shaping Rural India through
Electronics, Renewable Energy
and IT Solutions. The Company
puts emphasis on Innovation, and
recognizes the same as a key to
growth of the Organization and

welfare of the society at large. Mr.
Jain congratulated the employees
of REIL for these awards and assured that the Company would
continue to deliver newer and
innovative Electronics, Renewable

Energy and Information Technology based solutions and services
for the social & economic development of rural brethren.
79
80
Cochin Shipyard Ltd delivers the Fast Patrol Vessel (BY 508) to The Indian
Coast Guard & Platform Support Vessel to PSV Holding Inc., Liberia
ochin Shipyard Limited

delivered
the
eighth
of the series of 20 Fast
Patrol Vessels being built for the
Indian Coast Guard, recently.
The Protocol of delivery and acceptance was signed by Capt RS
Sundar, Director (Operations) on
behalf of CSL and Commanding
Officer (Designate) of the vessel
Cmdt PK Jaswal of Indian Coast
Guard.
DIG Vivek Vajpayee,
Principal Director (Materials)
of Indian Coast Guard, DIG TP

Sadanandan, CGRPS (Kochi), Mr.
Paul Ranjan, Director (Finance)CSL, Mr. Sunny Thomas Director
(Technical)-CSL were present on
the occasion. The vessel is named
ICGS AMARTYA and will be
operated by the Coast Guard
Station at New Mangalore.
Cochin Shipyard Limited (CSL)
also delivered a high end Platform
Support Vessel, Sea Triumph,
bearing the Hull No. BY-092, to
M/s. PSV Holding Inc., Liberia on

18 Sep 2014. This is the last of a
series of four (4) Nos. of similar
vessels being built for the same
client. The Protocol documents of
the ship were signed by Capt. R.S.
Sundar, Director (Operations) on
behalf of Cochin Shipyard and
Mr. Avtar Singh Ahluwalia on
behalf of M/s. PSV Holding Inc.,
in the presence of Mr. Sunny
Thomas, Director (Technical) and
other senior officials from CSL.
CSL has posted excellent financial
performance for the last several
years. The shipbuilding income
increased by five times from Rs.
222 cr in 2005-06 to Rs. 1,409 cr
in 13-14. The Profit Before Tax
increased by eleven times from
Rs. 25 cr to Rs. 291 cr and Net
Profit by ten times from Rs. 18 Cr
to Rs. 194 Cr during the period.
The company has been regularly paying dividend for the last
four years. The company has redeemed Rs. 119 cr of preference
shares to the Govt of India.
MMTCs Festival of Gold
MTCs
Festival
of
Gold returned this
festive season from
26th September to 21st October
2014 at MMTCs Showrooms in
SCOPE Complex (Lodhi Road),
Jhandewalan Jewellery Complex
(Rani Jhansi Road), and Cross
River Mall (Shahdara). An additional sale venue at MMTC
Colony Community Centre was
set up in Adhchini. MMTC Ltd.,
is a trusted name in assured purity. On offer were MMTCs complete range of gold medallions
in 999 purity; 1g, 2g, 5g, 8g, 10g,
20g, and 50g, and silver medallions range in 999 purity; 10g, 20g,
50g, 100g, 250g, and 1000g. On
this mega occasion, MMTC also
offered discount up to 30% on its
exclusive Sanchi silverware range
made from sterling silver of 92.5
percent purity.
81
82
Gsl Records Highest Sales of Rs. 1165 cr

during Financial Year 2013-14
ourty eight Annual General

Meeting (AGM) of Goa
Shipyard Limited (GSL)
was held recently. The company
in the recently concluded FY
2013-14 has recorded highest
Sales of Rs 1165 Cr against Rs 844
Cr in the previous year. This is
highest in the history of company
and reflects the execution capabilities of the shipyard.
RAdm Shekhar Mital, NM
(Retd) CMD GSL in his address
said with the delivery of 105M
NOPV-INS Sumedha January
2014, GSL has created a record of
building 200 ships, yet another
significant milestone in the annals of the Company and nations
journey towards indigenisation
and self reliance.
During year 2013-14 GSL delivered two 105 M Naval Offshore
Patrol
Vessels,
five
Glass
Reinforced Plastic (GRP) Survey
Motor Boats to Indian Navy and
One Fishing Research Vessel
to Central Marine Fisheries
Research Institute. During the
year, GSL also successfully executed Shore Based Test Facility
at INS, Hansa, Goa for Naval aircrafts, meant to land at Aircraft
Carrier at sea. It is a unique state
of art facility, which only three
countries in the world presently
possess. It was this very facility,
created by GSL, which played
major role in training of naval pilots to land on Naval Aircraft carrier INS Vikramaditya, at sea.
Besides, the Shipyard also delivered four GRP Patrol boats to
Mr. D. I Rampersad, GOSK, PMSM, Commissioner of Police, Govt. of Mauritius visiting

GSL. Also seen in the picture is RAdm Shekhar Mittal, CMD, GSL.
Gujarat Maritime Board and one

GRP Patrol boat to Captain of
Port, Government of Goa.
During the year, the company
took several initiatives in export
of its proven products range with
the support of Government of
India.
Commissioner of Police,
Mauritius Reviews Fib
Projects At Gsl
Mr. D. I. Rampersad GOSK,
PMSM, Commissioner of Police,
Govt. of Mauritius visited GSL
recently.
During the visit, Mr. Rampersad
had discussions with RAdm
Shekhar Mital, NM (Retd) CMD
GSL on the progress of the 11 Fast

Interceptor Boats (FIBs) and two
Fast Patrol Vessels(FPVs), being
built by GSL for the Government
of Mauritius. Significantly, the
maiden visit of Commissioner of
Police, Govt of Mauritius comes
on the heels of Keel laying ceremony of the FIBs held at GSL in
June 2014.
During the visit, Mr. Rampersad
was conducted around the shipyard by RAdm Shekhar Mital,
NM (Retd) CMD GSL, who apprised him of the various ongoing projects, the massive modernization programme underway
and the progress thereof. Mr.
Rampersad appreciated progress
of design and construction of
both FPV & FIC projects.
83
84
BEML Bags Rs. 570 Cr order from DMRC
EML Limited, has bagged

a Order of Rs. 570 Cr.
from Delhi Metro Rail
Corporation for the supply of
70 Cars which are in addition to
92 Cars being manufactured for
Delhi Metro.
BEML has forayed into the manufacture and supply of hi-tech
Metro Cars during 2002. Since
then, BEML had made significant strides and emerged as the
preferred destination of Metro
Coach Manufacturer in the country. BEML has so far supplied
more than 700 Metro Cars to
Delhi Metro, Bangalore Metro
and Jaipur Metro. With the above
Order, the Order Book position

of the Company, representing all
the three business verticals viz.,
Mining & Construction, Rail &

Metro and Defence Business, has
crossed Rs.6400 Cr. mark.
REIL Pays a dividend of Rs. 1.07 Cr.
r. A.K. Jain, MD REIL handed

over the Dividend payment of Rs.1.07 Crore to
CMD, Instrumentation Ltd., Kota
(Holding company) in the presence of Minister of Heavy Industries
& Public Enterprises, Mr. Anant
Geete and Mr. Rajan S. Katoch,
Secretary, Department of Heavy
Industry. REIL maintained all-time
high dividend payout continuously
for last three years.
While acknowledging the work
being done by REIL, significantly
contributing to National missions,
Mr. Anant Geete, Minister of Heavy
Industries & Public Enterprises emphasized that PSUs should work in
synergy with Make in India mission of the Government and align
their activities to make India a
global manufacturing hub. He also
mentioned that REIL should also focus on capacity building as country
offers unlimited growth potential
From Left to Right : (Mr. Vishvajit Sahay, Joint Secretary MoHI, Mr. A. K. Jain, Managing
Director, REIL, Mr. Anant Geete, Union Minister of Heavy Industries and Public
Enterprises, Mr. Rajan S. Katoch, Secretary, MoHI, Mr. M. P. Eshwar, CMD, IL Kota, and
Mr. A.K. Deori, Director, MoHI).
for the solar photovoltaic industry,

to increase domestic value addition
and technological depth in manufacturing. Mr. A.K. Jain, Managing
Director, REIL, said that REIL has
emerged as the largest off-grid
SPV solution provider in the country while retaining its primacy in
Dairy Sector. He mentioned that the
Company has successfully executed

the projects of national importance
and is now focusing on diversification and deeper geographical
reach through innovative solutions.
He thanked the Ministry of Heavy
Industry, Government of India and
Government of Rajasthan for their
support and guidance.
85
86
Awards and Accolades to PSEs

Dredging Corporation bags award
for Organization with Innovative HR Practice
Dredging Corporation of India Ltd. has been

conferred the Organization with Innovative HR
practices award in recognition to the strategic
position the organization holds in the fraternity.
Capt. D.K.Mohanty, CMD received the award at
Bangalore recently.
Dredging Corporation of India Ltd during the last

three years has taken various steps for improving
the working condition on board the dredgers and
redressal of grievances of the floating staff. The
representation of qualified personnel belonging to
SC/ST community has also improved considerably.
At present the corporation employs about 750 marine personnel to man these dredgers.
Forbes Leadership Award to NTPC CMD
at Forbes India Leadership Award (FILA) function 2014 held in Mumbai.
IGBC Silver Green Home Award to

NBCC Constructed New Moti Bagh Complex
Mr. R.K. Aggarwal, Chief General Manager
(Engg.), NBCC, is seen receiving IGBC Silver
Green Home Award for NBCC constructed New
Moti Bagh Green Complex, by Dr. Ajay Mathur,

Director General, Bureau of Energy Efficiency and
Dr. Prem C. Jain, Chairman, IGBC at a recently ceremony held at Hyderabad. The New Moti Bagh
green complex at New Delhi, has also been certified as the first and largest Green Home project till
date by the Government of India.
ITI Bags National Safety Awards

from Ministry of Labour & Employment
ITI Ltd. has bagged the `National Safety Awards
from the Ministry of Labour & Employment for
Dr. Arup Roy Choudhury , CMD NTPC received

the Best CEO Award - Public Sector from Forbes
87
88
the performance year 2012. Mr. K. L. Dhingra,

CMD, ITI Limited, received the awards from Mr.
Narendra Singh Tomar, Minister for Labour &
Employment in the presence of Mr. Vishnu Kumar
Sai, Minister of State for Labour & Employment at
Vigyan Bhawan, New Delhi. ITIs Mankapur Plant,
Gonda Dist. Uttra Pradesh, has once again bagged
the prestigious National Safety Awards for the performance Year 2012 and has been adjudged winner in two categories of Lowest Average Frequency
Rate and Accident Free Year.
Silver and Bronze Medals for Smt. V.

Sobanakumari in Asia Masters
Smt. V. Sobanakumari, Asst Engineer of Cochin

Shipyard Ltd has won Silver medal in 4 x 400
meters relay and Bronze medal in 4 x 100 meters relay representing India in the 18th Asia
Masters Athletics Championships at Kitakami,
Japan held recently. She has been qualified for the
World Championship to be held at France. Smt
Sobanakumari joined CSL as a trainee during 1979
and was appointed on 17 Dec 1981.
REIL gets Asia Pacific HRM Congress

Award 2014 for Innovative HR Practices
Mr. A. K. Jain
MD, REIL
Mr. A.K. Jain, MD, REIL, Jaipur gets Asia Pacific

HRM Congress Award 2014 for Innovative HR
Practices at Bangalore. The Asia Pacific HRM
Congress Award 2014 award was presented to Mr.
A.K. Jain, for innovative HR practices. On this occasion Mr. Jain told that REIL is having its network
across the country and employees posted there
have been geared up to give best of their capabilities in the progress & success of the company.
Manager (CC), THDCIL, Mr. K.D.P. Dubey
Conferred Media Ratan Award
Smt Sobanakumari is in a way, a brand ambassador for CSL, has brought in many laurels in past.
She had won altogether 26 Gold medals in the national level athletics championships during last
two decades. Gold medal in 400 meters hurdles
and bronze medal in 4x100 meters relay in the
year 1996, bronze medal in 4x400 meters relay and
silver medal in 4x100 meters relay in 2006 are the
previous achievements of Smt V Sobanakumari in
Asia Master Athletics Championships.
Mr. Kapil Deo Prasad Dubey, Manager(Corporate

Communication), THDC India Limited (THDCIL)
has been conferred Media Ratan Award for PR2014by Indraprastha Press Club of India(IPPCI),
Delhi for his incredible contribution in the field of
Public Relations & Corporate Communication and
in promotion & empowerment of Constructive
Media. Mr. Vijay Goel, Member of Parliament
(Rajya Sabha), Mr. Manoj Tiwari Member of
Parliament (Lok Sabha) and Ms. Pinki Anand,
Additional Solicitor General, Govt. of India jointly
gave this award to Mr. Dubey.
90
PSEs Pay Handsome Dividend to the Government

NSIC Pays Record Dividend
Mr. Kalraj Mishra, Minister, Ministry of Micro,

Small and Medium Enterprises received a dividend
cheque of Rs.15.19 cr for the year 2013-14 from
Mr. Ravindra Nath, CMD, NSIC in the presence
of Mr. Madhav Lal, Secretary, Ministry of MSME
and Mr. S.K.Tripathi, Joint Secretary, MSME and
other officials of Ministry of MSME. Mr. Ravindra
Nath, informed that this is the highest dividend
ever paid by NSIC. The Corporation has done an
overall business of Rs. 17,444 cr in 2013-14, posting a 25 percent growth from its previous year, its
Gross Income has gone upto Rs.418.04 cr registering a growth of 22 percent and Profit before Tax for
the year was Rs.114.71 cr posting an increase of 24
percent from the previous year.
Tenth Dividend By FAGMIL
Dr. S.K. Das, CMD, FCI Aravali Gypsum & Minerals

India Limited, presented a dividend cheque of Rs.
9.38 cr to the Minister of Chemical & Fertilizers, Mr.
Ananth Kumar in presence of Mr. Jugal Kishore
Mohapatra, Secretary (F). The minister appreciated
the results and growth achieved by the Company.
The FCI Aravali Gypsum & Minerals India Limited

(FAGMIL) was incorporated in February 2003
consequent upon hiving off Jodhpur Mining
Organization (A unit of FCIL). The New Company
(FAGMIL), started its business with an authorized
capital of Rs.10 Cr and paid up capital of Rs. 7.33 Cr.
With the payment of this dividend, the Company
would be paying Rs.32.45 cr (i.e. 443 percent of paid
up capital of the Company) to the Government of
India within a short span of 11 years.
Reil Posted Profit of Rs. 19.88 cr

in the Financial Year 2013-14
Rajasthan Electronics & Instruments Limited, declared 20 percent dividend to its Share Holders
for the year 2013-14, in its 32nd Annual General
Meeting held recently. On this occasion MD REIL,
Mr. A. K. Jain presented statistics for the year 201314, which emphasized that the net worth of the
Company has increased by 15 percent from Rs.
71.58 Cr. to Rs.82.71 Cr, with a record order booking of Rs. 271.77 Cr. The Company has earned a
profit of Rs.19.88 Cr on a turnover of Rs. 217.25
Cr. Ms. Veenu Gupta, Chairman, REIL stated that
Company is maintaining sustained growth & profitability with innovative solutions, harmonious industrial relations and the continuous support of valued customers. Company will scale greater heights
in the days to come. She expressed her sincere appreciation and thanks to the Employees, Business
Associate, Valued Customers and Share Holders.
KIOCL Pays Rs. 8.16 cr Dividend to

the Government
KIOCL Limited, handed over a cheque of Rs.8.16
cr to the Minister of Mines, Steel, Labour &
91
92
The Company had paid interim dividend @40.0

percent amounting to Rs. 3298.19 cr on February
10, 2014. The Company has paid the final dividend
@17.5 percent amounting to Rs. 1442.97 cr.
Employment, Mr. Narendra Singh Tomar as dividend for the financial year 2013-14, during his visit
to KIOCL Corporate Office in Bangalore.
During the financial year 2013-14, KIOCL reported 35 percent jump in its operational performance with production and dispatch of 1.710 MT
and 1.615 MT of Pellets respectively. Companys
financial performance improved with growth of
32 percent in Gross Income at Rs. 1532.37 crs and
PBT of Rs. 61.40 crs vis--vis Rs.32.34 crs, PAT of
Rs. 39.94 crs vis--vis Rs.31.05 crs thereby recording a growth of 29 percent over the year 2012-13.
NTPC pays Total Dividend of

Rs. 4741.16 cr for FY 2013-14
NTPC Limited paid a total dividend @ 57.5 percent
of its paid-up capital for the financial year 2013-14,
amounting to Rs. 4741.16 cr. The dividend payment is 3rd highest among public sector enterprises and 5th highest among the Listed Companies.
The RTGS advice for the transfer of Rs. 1081.61

Cr. to Government of India, being the share of
Government of India in the final dividend, was
presented by Dr. Arup Roy Choudhury, CMD,
NTPC to Mr. Piyush Goyal, Minister of State
(Independent Charge) for Power, Coal and New &
Renewable Energy in the presence of Dr. Pradeep
Kumar, Joint Secretary & Financial Advisor, MOP,
Mr. Mukesh Jain, Joint Secretary (Power), Mr. K.
Biswal, Director (Finance), NTPC, Mr. I. J. Kapoor,
Director (Commercial), NTPC, Mr. N. N. Misra,
Director (Operations), NTPC, Mr. A. K. Jha, Director
(Technical), NTPC, Mr. U. P. Pani, Director (Human
Resources), NTPC and Mr. S.C. Pandey, Director
(Projects), NTPC. NTPC Ltd. has paid dividend of
Rs. 3555.25 Cr. to the Government of India for the
financial year 2013-14. This is the 21st consecutive
year that NTPC Ltd. has paid dividend.
Cwc Achieves yet another Record Turnover
he
Central Warehousing
Corporation (CWC) achie-ved
yet another record turnover
of Rs.1528.19 cr during 2013-14
as against Rs. 1406.70 cr earned
during 2012-13, thus recording a
growth of 8.64 percent. The Profit
Before Tax (PBT) and Profit After Tax
(PAT) also increased by 22.58 percent and 15.41 percent respectively
over the preceding year. Keeping in
view the national priority for safe
storage of foodgrains, utilization of
capacity for storage of foodgrains
was given due priority. CWC handled 10.36 lakh TEUs during 201314 despite slump in the IMPEX
trade. During 2013-14 CWC continued to operate Cargo Terminal of
Integrated Check Post (ICP) at Attari
on Indo-Pak border entrusted to
CWC by the Department of Border
Management, Ministry of Home
Affairs. CWC handled 85,484 export/
import trucks as against 74,847 export/import trucks handled during
2012-13 and earned a gross revenue of Rs. 39.28 Cr. during 2013-14
as against Rs.33.12 Cr. earned during 2012-13. CWC also commenced

operation of the Cargo Terminal
at ICP, Agartala in November 2013
to facilitate border trade with
Bangladesh. Keeping in view the
improved financial results, CWC declared dividend @ 48 percent for the
year 2013-14 as against 41 percent
paid for 2012-13. During 2014-15
CWC plans to construct additional
storage capacity of about 2.00 lakh
MT across the country with a CAPEX
of about Rs.120 cr.
93
94
Vol. 34 No. 4 September , 2014
Chairmans Desk............................................................................ 05
Articles
Project Management: Constraints & Management ......... 06
by Dr. U. D. Choubey
Skilling - The Success Mantra for Public Sector................. 11
by Narayanan Ramaswamy
Changes in Labour Legislation................................................ 14
for the Organized Sector
by Dr. Rajen Mehrotra
State of Economy and CPSEs.................................................... 18
by Kaleidoscope Bureau
What can Prevent a Heart Attack?.......................................... 20
by Dr. (Prof.) Harsh Wardhan
SCOPE News
SCOPE Developing Global Business Leaders in CPSEs.... 24
SCOPE Workshop on Crisis Communication....................... 26
and Media Management
SCOPE Urges for Greater Autonomy to PSEs...................... 30
SCOPE for Services Tax Compliances..................................... 31
SCOPE for Professionalization of PSEs.................................. 32
Indraprastha Media Ratan Award to...................................... 32
SCOPE PR Employee
SCOPE Pays Rich Tribute to Shri Mohd. Fazal...................... 33
SCOPE Programme on Companies Act & IFRS................... 34
SCOPE Convention Centre Facilities................................35-38
Public Service Ethics Needed for Good Governance....... 39
Book Review by Dr. B. B. Goel
PSE News
SJVN Declares Highest Dividend............................................ 17
Steel Minister Visits SAILs Research Wing........................... 43
Echoes PMs Vision
Contents
Vol. 34 No. 4 September , 2014
PSEs Celebrate 68th Independence Day.............................. 45

PSEs Ink MoU................................................................................. 53
KIOCL Limited open up Export................................................ 55
BHEL Develops Fuel Flexible Supercritical.......................... 57
Boilers: a Major Step towards Managing the
Uncertainties Regarding Coal
CMD, REC Inaugurates Maitri Ghar - a Widows Ashram.57
in Vrindavan under CSR Initiatives
Engineers India Pays Final Dividend to Govt. of India..... 59
Indigenous Ship Equipped with State-of-the-Art............. 59
Equipment from BHEL
WAPCOS Ranked as the Best Performing PSU................. 59
Union Defence Minister visit MDL.......................................... 61
Personalia........................................................................................ 61
CMD, Moil Briefs Minister of Steel about ........................... 63
Companys Growth Plan
MCL Award Rs. 1 Lakh each to 4 Odisha Women............. 65
Hockey Players
HEC Supplied Crane.................................................................... 65
NEEPCO Signs PIA with Govt. of Manipur........................... 65
Awards and Accolades to PSEs..........................................67-70
DD/Cheque drawn in favour of Standing Conference of

Public Enterprises)
ADVISORY BOARD
Dr. U.D. Choubey, Director General
S. A. Khan, GM (HR & CA)
U.K. Dikshit, Adviser (Programmes)
K. N. Dhawan, Adviser (CC)
& Consulting Editor
EDITOR
Nisha Sharma
PUBLISHER
A. S. Khan
Total Pages : 72
Annual Subscription: Rs. 500/Price per copy : Rs. 50/-(Payment may be sent by
Material published in KALEIDOSCOPE may be

reproduced with prior permission of the Editor and with
acknowledgment in the accepted style.
The views expressed in various articles
are that of the authors and not necessarily
of SCOPE Management. - Editor
Published and printed at New Delhi by
A. S. Khan on behalf of Standing Conference of Public
Enterprises, Core 8,1st Floor, SCOPE Compex, 7 Lodhi
Road, New Delhi-110003
Tel.: 24361495, 24360101 Ext.: 2028, 2029 Fax: 24361371
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CHAIRMANS DESK
n more than six decades of existence, the public sector in India has
been the backbone, the growth engine and pillar of strength for the
Indian economy by enhancing value for its stakeholders. Another
hallmark of the PSEs has been adopting best practices in areas such as,
environment management, corporate governance, corporate social responsibility and human resource development. To recognize, encourage
and reward the significant achievements and contribution of PSEs encompassing various facets, SCOPE as an apex body of PSEs,has instituted
SCOPE Meritorious Awards in these Specialized Fields. I am happy to
inform that His Excellency, the President of India, Mr. Pranab Mukherjee has consented to address and present
SCOPE Meritorious Awards 2012-13 to award winning public sector enterprises (PSEs) on 5th November 2014 at
Vigyan Bhawan. Honble Minister of HI&PE along with Minister of State, HI & PE will also address the Chief
Executives and senior executives of public enterprises on this occasion. As this will be a momentous occasion
for the entire public sector fraternity, I request all of you to block the date and time to participate in this award
presentation ceremony.
As you are aware, SCOPE has been taking up issues on behalf of PSEs, harping on the fact that there should be
greater flexibility and freedom to the management of public sector enterprises keeping in view todays increasingly competitive environment. However, many a times, vigilance is cited to propagate a culture of risk aversion
in PSEs, thereby delaying the decision making process and inhibiting performance. SCOPE has firmly believed
and championed the belief that Vigilance is an aid to management and provides a framework to the individuals
to be more alert about any systemic lacunae, which can result in potential inefciencies and higher transaction
costs. To clear the air from policy makers themselves,SCOPE from time to time, has been organizing meetings
of CEOs and Top management of PSEs with Central Vigilance Commissioner. Another apex level meet was
organised on 19th September, 2014. We are grateful to CVC to have kindly consented to come to SCOPE on this
day and interact with CMDs and other senior officials on several key issues related to Vigilance Administration
in CPSEs. I am also happy to note that CMDs and senior officials of CPSEs came in large number which is reflective of the significance of Vigilance in our working. The salient issues which came up for discussion are being
compiled and will be sent to CVC shortly.
I am also happy to share that a major knowledge enhancement initiative launched by SCOPE i.e. Business Quiz
for the employees of the PSEs and financial institutions is going on in full swing. Regional level rounds have
been completed in Mumbai, Kolkata and Bangaluru covering the Western, Eastern and Southern regions respectively. The event saw an overwhelming participation from PSEs which were conducted by a core group of officers from SAIL, NTPC and IOC. It provided a unique opportunity to the managers of public sector to benchmark
their skills with their peers and engage with each other in an environment of healthy competition and hone skills
of lateral thinking, teamwork and decision making.
Developing abetter understanding of global economic environment and international regulatory norms & policiesis mandatory in the present times for the senior management of CPSEs. This would equip the top management of PSEs with the knowledge and the perspective required to operate in a seamless world of business. In
this respect, SCOPE is taking the initiative to form a core group to deliberate on important policy/trade issues
such as WTO & OECD agreements, etc. PSEs have been requested to nominate competent persons for this core
group, which from time to time will brainstorm on important policy matters and the same will be circulated from
SCOPE to CPSEs. This was suggested by Mr Atul Chatruvedi, Chairman, while addressing the participants of
Global Leadership Program, which has been taken up for implementation.
Driven by its mission to promote excellence and global competitiveness of CPSEs, SCOPE is proactively taking
a number of initiatives, on which we once again request feedback and support of all the member companies.
C. S. Verma
Chairman, SCOPE
ARTICLE
Project Management
Dr. U. D. Choubey
CONSTRAINTS
& MANAGEMENT
The growing scale and volume of projects has led to huge monetary investments thereby
increasing the risk of overruns and deviations. Therefore, in recent times, it has not
only become important but also imperative that project management be undertaken
professionally and continually so as to ensure delivery of the project in the most effective
manner. For this purpose it is extremely important that apart from project executors, policy
makers and regulators must also understand the constraints that the projects are struggling
with and accordingly make the environment conducive for project implementation.
n the present day of dynamic

economy, changing technological environment and social expectations, complexities
and the magnitude of projects
have increased manifold. For this
purpose, it is essential to adopt a
structured and a system-oriented
approach towards the project,
which not only reflects at the time
of execution but also at the time
of its conception of the project
and even after its successful completion. At this juncture, Project
Management as a tool comes
handy and, hence, has been gaining gradual importance globally.
Project management may be understood as a process of undertaking a project in an organized
and orderly fashion so as to ensure minimum or no deviations in
terms of time or cost. Wikipedia,
in formal terms, defines Project
6
Management as a process and activity of planning, organizing, motivating, and controlling resources,
procedures and protocols to achieve
specific goals in scientific or daily
problems.
Project Management
Constraints
Typically, every project involves
four major stages planning, execution, monitoring and evaluation, and closure. In order to ensure proper project management,
it is imperative that appropriate
time is invested in each of the
above stages. However, in actual
practice, projects are plagued
with constraints at each stage of
the project life cycle giving rise to
either cost overrun or time overrun. Sometimes a change in scope
leads to a delay in the project.
In India, a delay in project
Kaleidoscope September 2014
completion or the inability of a

project to deliver its commitments
occurs due to various factors including delay in land acquisition
and obtaining clearances, lack
of planning and coordination
amongst various departments,
inability to obtain finances, etc.
Each of the aforesaid reason can
be attributed to an individual
project stage being planning, execution, monitoring and closure.
Shortage of adequate number of
project managers, contractors,
competent workforce and raw
materials is also the major reason
for an ineffective project management. Therefore the constraints
active at each stage of project life
cycle are as follows:
Stage I: Project Pre-Planning/
Planning Stage
The planning stage of the project
ARTICLE
life cycle creates a charter which
includes detailed description of
business needs, desired deliverables and obtaining of appropriate approvals. Hence, it is imperative that appropriate importance
is given to this phase and quality
time is adequately spent so as to
ensure a strong foundation for
the project. The key constraints
during planning are:
Delays in land acquisition
causing schedule overruns: In
India, projects are often awarded
with partial land acquisition (of
as low as 30%) by project owners as against the global practice
where projects are not awarded
unless the process of land acquisition is complete. Partial land
acquisition causes delay in subsequent land acquisition resulting
in lengthening of time in commissioning of the projects. This can
be seen from the fact that 70-90%
of the road projects in India are
delayed on account of issues in
land acquisition.
Reasons for the delay in land acquisition are manifold but they
primarily include resistance from
local community on account of
poor compensation, lack of clarity
on Resettlement & Rehabilitation
policy (R&R) and displacement
of people leading to unemployment. In addition, resistance is
often faced from NGOs and social activists, especially in cases
where land acquisition leads to
felling of trees, displacement of
wild life, destruction of forests reserves or demolition/ destruction
of a heritage site.
Manifold regulatory approvals: In India, it has been seen
that issues pertaining to forest,
environment and wildlife clearances have not only become complex but also time-consuming.
The timelines involved in

obtaining various clearances
generally range from 12 months
to 3 years it generally takes 1215 months to obtain environmental clearances, 1-2 years to obtain
forest clearances and more than
3 years to obtain wildlife clearances. In addition, at times, multiple approvals (from Centre and
State governments) may be required leading to standoffs on
critical issues due to lack of coordination between the approving authorities. This can be seen
from the fact that the timeframe
of 5 years is estimated in order
to obtain mining clearances, as
approvals need to be taken from
multiple levels.
The Indian infrastructure has
been suffering on account of project clearances over a period of
time. As per newspaper reports,
as of 2014, there are 22 highway
projects costing INR 20,000 crores
on account of pending environmental, forest or wildlife clearances. Besides approvals pending
since 2012-2014, few of these 22
projects are awaiting clearances
since 2006 or 2009. Further, as of
2014, 63,395 mining clearances
are pending from different states.
Poor quality of planning and

engineering design: Nodal agencies in India tend to focus more
on cost and less on design thereby
ending up selecting engineering
consultants on the least cost parameter alone. This results in overlooking the quality aspect which
may percolate to an inappropriate
design and insufficiently detailed
project report affecting the quality
of the project and creating bottlenecks at the time of execution.
Delays in site handover causing schedule overruns: Certain
projects (in particular the brownfield projects) require preparation of the site by removing any
previous construction, site clearance, etc. before the actual project begins. At times, handover of
a prepared site takes more time
than required on account of payment issues, scope of work of the
contractor, etc. leading to further
schedule overruns.
Stage II: Project Execution/
Implementation
Once the project planning is complete, the actual execution of the
project begins. The issues faced
by project managers during this
stage are as follows:
ARTICLE
Scope for change or insufficient management of project design: Lack of detailing and planning fails to account for certain
issues which may lead to change
in project design or scope of the
project. Generally this inability
to conduct proper/ incomplete
topographical or geological studies leads to the creation of situations which may lead to change
in scope. This gives rise to delay
in projects and a possible change
in cost estimates.
Inadequate supply of project management professionals
and skilled labour:
Staff shortage is one of the biggest project challenges. Very often projects have to start without
complete project teams leading
to a delay in project execution.
The key reason for this issue is
that apparently project management is the least lucrative field
with little or no emphasis on providing educational support to
engineering students who want
to specialize in project management as a profession. This has led
to a dearth of managers who are
trained in project handling leading to appointment of project
in-charges who may be technically sound but weak at managerial skills. This has led to a power
vacuum for project management
professionals which are often
filled by foreign professionals
thereby leading to an increase of
project cost.
In addition to project management professionals, lack of skilled
labour has also caused problems
in achieving error-free or breakfree execution of projects. This is
primarily due to a lack of vocational training being provided to
skilled workers.
8
Stage III: Project Monitoring and

Evaluation
With projects having a long gestation period, it is very easy for
project teams to lose focus and
get occupied with routine/ administrative work. This, coupled
with increasing workload and
pressure, leads to a reactive rather than a proactive approach of
the teams, thereby overlooking
the need for regular monitoring.
Hence, it is extremely important
that project teams frequently look
at things with a new perspective
and accordingly review progress
of a project.
In India, project monitoring and
evaluation is typically limited to
analyzing whether the project
is progressing as per schedule,
the cost involved and the quality/ scope of the project. There is
little or no focus on devising a
structured approach to assess the
progress of the project with respect to its internal and external
objectives, benefits to stakeholders over a short, medium and
long-term period.
Stage IV: Project Closure
Projects in India generally have a
defined stage of completion after
which certain steps need to be undertaken to formalize the acceptance of the project. The purpose
of evaluation at this stage is to
ensure whether the project commitments have been met to the
satisfaction of all stakeholders.
At this stage issues pertaining to
pre-commissioning teething troubles or contractual disputes may
arise. This is primarily due to
lack of continuous audit and total
Planning Commission
quality check procedures at regularized intervals. Also, at times,

there are issues with respect to
determination of project closure
date which leads to uncontrolled
overruns and may also jeopardize
the entire project executed so far.
Project Management in
Public Sector Enterprises
(PSEs)
The key reason for lack of infrastructure in India has been identified as inefficient project management leading to incomplete
or stalled projects which eventually leads to no or delayed infrastructure. This can be seen from
the fact that in the Eleventh Five
Year Plan (2007-2012) (the Plan),
India had set an ambitious target
of INR 20.56 lakh crores (i.e. 7.60%
of GDP) towards infrastructure
investment. On completion of the
Plan (as per the estimates of the
Planning Commission) the actual
infrastructure investment in the
plan was INR 19.35 lakh crores
(7.18% of GDP). In contrast, the
infrastructure investment allocation for the Twelfth Five Year Plan
has been ambitiously increased to
INR 55.74 lakh crores (8.18% of
GDP). The pace of achievement of
the new target can be seen from
the fact that in 2012-13 (revised)
the estimated infrastructure investment was INR 5.34 lakh
crores as against proposed investment of INR 6.99 lakh crores1 .
In addition to this, it may be
worth noting that out of the total
566 central sector projects costing
INR 150 crores or more monitored by the Ministry of Statistics
and Programme Implementation
ARTICLE
(MOSPI), 270 infrastructure projects were delayed for more than
3 years on account of postponing
of their schedules of commissioning. This has resulted in a cost
overrun of INR 65,771 crores to
the government exchequer.
At this juncture, it may also be
noted that infrastructure projects
are not only taken by the government agencies (for development of infrastructure) but also
by PSEs. Time and again PSEs
have invested heavily into projects which have led to infrastructural development of the country.
Every year, PSEs are given an annual capital expenditure target
wherein they are mandatorily required to invest in capital expansion out of their own funds. The
challenge has always been very
steep for the Indian PSEs which is
also reflected in the current years
budget wherein the annual capex
target has been fixed at INR 2.47
lakh crores.
Minimizing Constraints
Now that we have seen the bottlenecks, it is equally important to
understand the possible ways to
de-bottle the same.
Setting up a single-window
clearance through centralization
of multiple governance: In order to expedite project execution
and completion, it is imperative
that the required clearances are
provided within a limited timeframe. For this purpose an effective coordination between varied levels of governments (being
central and state) is mandatory
which can be achieved through a
single window clearance wherein
a centralized process of receipt
and approval of applications for
various clearances and permits
should be adopted. This will
not only simplify the process of
documentation and screening,

but also save time at the planning
stage of the project thereby expediting project completion.
Setting up an independent
and effective evaluation body:
Continuous and transparent
evaluation of project forms one of
the most critical steps to ensure
effective project completion with
minimum deviations. However,
it is also equally important that
the evaluation process should be
an ongoing one so that deviations
can be plugged at the correct
time.
Moreover, there is a need to set
up a multi-tier organization with
each tier focusing on projects up
to specified thresholds resulting
in a more detailed and focused
evaluation. However, in this process also, there should be a master evaluating body to which all
the tiers should be accountable
to with respect to leakages found
and action taken so that appropriate tracking and high-level monitoring can be done.
Adopting joint evaluation of
project design: It has been often
found that project management
fails or renders ineffective owing to inappropriate engineering
design or lack of focus on the

value of design. In order to prevent this, project owners should
encourage joint evaluation of
the project design by experts.
This process would involve setting up of teams of experts with
significant experience in design,
engineering and procurement in
order to identify benchmarking
parameters for measuring the
efficiency of the project design.
This would lead to enhancement
of the overall value of project
with minimal overruns.
Risk Audit and Management:
Risk management is a critical element in project management as
no project can be conceived in a
perfect way or environment at
its inception. Time and again it
has been found that projects are
stalled due to unaccounted business risks (such as escalation of
material cost, unforeseen strike
or lockout by workers, inflation,
fluctuating foreign currency,
fraudulent activities, erroneous
decision making, etc.) and environmental risks (such as natural
disasters, calamities, etc.). It has
been found that in India little or
no weightage is given to risk assessment while preparing project reports or project timelines.
This leads to cost and schedule
ARTICLE
overruns. Hence, there is a need
to undertake audit of risk factors
and their effective management
in order to ensure effective project implementation.
For this purpose, it is important
that the project management team
be proactive and adopts a structured approach to manage identified risk. This would broadly
involve three major steps risk assessment (identifying risk/ threats
and stakeholders being affected
by it); risk management (evaluating risks, deciding on precautions/ solutions, recording findings and implementing them),
and; risk monitoring/ review
(reviewing of solution and updating, if required). In addition,
the project management team at
the onset should be able to identify possible threats to the project,
the likelihood of their occurrence
and accordingly devise a solution
around that risk so that the threat
can be addressed on time.
Further, the risk audit should not
be a one-time process but a continued one commencing from the
conception of the project, bidding
by contractors and project execution. In order to achieve this, there
should be continuous innovation
in terms of technology or ideas
or business processes so that the
risks can be mitigated.
Developing
human
resources: Primarily, every project
requires two kinds of human resources trained project managers and skilled labour. For this
purpose, it is imperative that the
curriculum for project management be widely introduced in
educational institutes. Moreover
the industry and educational institutes should work in tandem
so as to reduce the supply and
demand gap for trained project
10
management
professionals.
In addition, project managers
should master the art of multitasking which means that they
not only need to master management skills (such as project scoping, issue management, etc.) but
also ensure that the project team
is performance oriented.
Besides project management
professionals, projects at large
face shortage of skilled labour.
Therefore, there is a need to create a pool of readily available
employable workforce through
training and skill development.
The Government has already initiated this process by establishing National Skills Development
Corporation (NSDC) wherein
local people have been encouraged to acquire employable skills.
However, cooperation from the
corporate sector is also needed so
as to absorb the local population
to a large extent in the project and
train them with needed skills.
Centralized
procurement
through accredited vendors:
PSEs and government organizations typically face problems in
procurement of materials as every
government department maintains a separate list of empanelled
vendors through which procurement has to be made. At times
this leads to cost escalation as the
vendors form cartels thereby demanding inappropriate rates or
manipulate the quantity of supply required or compromise on
quality leading to stalled projects. Therefore, there is a need to
prepare a centralized database of
accredited vendors from whom
procurements can be made. The
list should be prepared after fixing certain parameters with respect to material including price,
quality and quantity required to
be maintained by the vendor.

A centralized accredited database
of vendor would not only ensure
minimum time in procurement of
material but would also ensure
that the material being provided
is not sub-standard or overpriced.
The process of accreditation and
revision of database at regular
intervals would also ensure high
level of competitiveness amongst
vendors thereby maintaining
their performance.
Conclusion
The growing scale and volume of
projects has led to huge monetary
investments thereby increasing
the risk of overruns and deviations. Therefore, in recent times,
it has not only become important
but also imperative that project
management be undertaken professionally and continually so as
to ensure delivery of the project
in the most effective manner. For
this purpose it is extremely important that apart from project
executors, policy makers and regulators must also understand the
constraints that the projects are
struggling with and accordingly
make the environment conducive
for project implementation.
Alongside, it is also important to
understand that the threats encountered by every project cannot
be resolved by one party/ stakeholder alone; it needs a conscious
and coordinated effort by all towards a common understanding
of improving bottlenecks that
are hampering the achievement
of project completion. Therefore,
a project can only be successful
if it is completed with appropriate planning and controls, and a
right balance is struck between
simplicity and efficiency.
ARTICLE
SKILLING
The Success Mantra

for Public Sector
Mr. Narayanan Ramaswamy
Partner & National Leader for Edu.
& Dev. Sector, KPMG in India
It will not be possible to train the entire organization and hence skilling programs are likely
to cover a key section of employees. Many a time it covers employees of a particular level of
function. But for an effective change, everyone in the process chain should be trained. Hence
the re-skilling programs should be cognizant of the organizational mapping for the process
that is likely to get impacted. For example if the organization is bringing in e-auction as a
procurement alternative, then it is important that the both procurement person and the
finance person are trained in the process. At the same time, the seniors of these executives,
who perhaps approve the process, should also be trained and skilled in running e-auctions,
handling exceptions and rewarding innovations that teams could introduce.
awaharlal Nehru once famously said public sector is

the mortar of growth. After
six decades, public sector remains
a mixed bag some spectacular
successes and some also ran. If
we take a closer look at the ingredients of success for those Public
Sector Undertakings (PSUs),
there emerges a clear direction.
Lets look at the critical success
factors. Most of the PSUs are
capitalized adequately depending on the sector in which they
were operating. Government patronage and support has never
been an issue and many a times
even became a monopoly. India
as an emerging market ensured
there was enough demand. In
the pre-liberalization era, PSU
jobs were the most sought after
so they had attracted some disproportionately large number of
talented people for three to four

generations (if we consider the
globally accepted nine years as
a definition of one generation).
In the post-liberalization era,
some of the large and profitable
ones in the form of Maharatnas,
Navratnas and Miniratnas, were
given self reliance (with minimal/
no government interference). So
what really made the difference?
In my view, two aspects stand
out. First and foremost is the leadership; leadership made a big difference. We have seen PSUs doing very well under a determined
leadership, immediately falling
behind with leadership change.
In PSU banks, where the average
tenure of the Chairperson is less
than 2 years, this is clearly evident from the flourish of banks
which had a capable Chairperson
for a longer duration. The second
aspect is that of the environment

or culture of the organizations
which are gained were built by
some influential individuals
who had a longer tenure. The
internal environment, which
fosters learning and innovative
and risk-taking culture, seems to
have produced a different set of
individuals.
Both the above factors point to
one key aspect of success capacity building at the PSUs (be
it at leadership or at other levels
that have made the difference).
Capacity building can be interpreted in many ways. Bringing in
additional, fresh talent is definitely one of the many parts of building capacity. But, that is not all.
It will be preposterous to think
that fresh skills will bring in new
or additional capacity. For one,
you cannot have the numbers (in
11
ARTICLE
terms of fresh talent) to bring in
the required capacity and more
importantly, bringing in fresh talent, without preparing the organization to manage such talent,
would be counterproductive. So
the critical and lasting way to
build capacity is to equip existing employees with additional
and contemporary skills. If you
look at any of the success, you
will find a conscious attempt by
the leadership to augment skills
within the organization.
PSUs need to undertake skill augmentation and capacity building
on a war footing. There needs to
be a structured and sustained effort in doing this. Some of the key
elements of the capacity building
are going to be as follows:
Leadership Development
In the liberalization era, PSUs
have taken a distinct course for
themselves and have been able
to play a significant part in nation building. In the past 20 years
the generation that steered these
organizations is slowly retiring,
giving way to modern era leaders. These leaders have started
their professional careers in the
post-liberalization era and may
not have had the grounding of
the some of the current leaders.
Also, the next two decades will
see an unprecedented growth
and lay the foundation for the
modern, resurgent India. Some
key aspects of leadership training
would be:
Formal coaching sessions:
In the older system, there was
an informal gurukula system
where the young leaders learnt
from their leaders from observing
them at close quarters and imbibing some of their key leadership
traits almost intuitively. But in todays age, neither do we have the
12
Adequate and appropriate skilling of employees

could be the key for PSUs
to become the mortar of
growth that Jawaharlal
Nehru had envisaged. It
is time they have a formal
re-look at their skilling
agenda possibly look at
collaborating within and
also with the academic
world in a holistic fashion.
luxury of time for this gurukula

system nor do the young leaders
want to emulate the older generation. Hence a formal coach and a
more structured way of working
with the coach who can act as a
mentor becomes essential.
Soft skills and organizational leadership: This has become a
big differentiator for leaders. It is
important to look at the dimensions of the sector and market
place, and some of the fundamentals are changing. For e.g. a warm
handshake was considered one of
the basics of building trust; however now, millions of dollars are
being transacted without seeing
each other.
Globalization: This has started to impact directly and/ or indirectly. Hence the global elements
of conducting business, such as
competing and collaborating
with global partners, working in
international markets and global
employees.
Technology and communication: Usage of technology
especially as a communication
media with all social media and
one-on-one communications
can be an essential part of leadership development.
Soft Skills Cutting Across

Specializations
Another noticeable gap in the
training programs in many PSUs
is the soft skill development
what with the importance given
to functional and technical training. The past few years have demanded very high specialization
and hence all training programs
have been geared to deliver this.
For example the changes in accounting system, mergers and
acquisitions have highlighted the
importance of specialists who
have deep knowledge of finance
and accounts. On the other hand,
the rapid changes in manufacturing technology have necessitated
those who have deeper exposure
and training in that function to
rise up the ranks faster. In this
process, the overall development
of the individual across functions and specializations which
used to be the hallmark of PSUs
has taken a back seat. A conscious
training-cum-career progression
program with high emphasis
on soft skill development will
be needed to bring back overall
development whcih will be essential to successfully lead very
large and multi-faceted PSUs.
Blended Programs
Apart from this, the infrastructure for training and skill development is a big concern. After a
lull, we see recruitments happening across PSUs and suddenly there isnt enough training
infrastructure both physical
and faculty for training the new
joiners. Public sector banks have
induction and beginners training program round the clock,
throughout the year and yet have
a backlog. Now there is nobody
who plans for the continuous
training and re-skilling aspects,
ARTICLE
which becomes a game changer
in the current market environment especially for those who
have a large service component.
For example in the past decade,
heavy engineering and industrial engineering has significantly
moved towards electronics dominance and all the mechanical and
electrical engineers need to undergo formal classroom coaching
and re-skilling to be effective. So
is the case with technology and
bankers. Todays bankers need to
know and operate more technology than the technocrat did ten
years back. So a rough calculation for at least 2 weeks of training for all the 50 lakh+ current
employees in PSUs would mean
an overall 2,00,000 man years of
formal training for our PSUs.
Amongst other things, where is
the infrastructure for such training? We need to think innovatively in terms of blended programs where there is innovative
use of classrooms and work places even the home computer and
tablets to deliver effective and
continuous training. An emerging concept that the PSUs need to
examine in detail is that of Work
Integrated Learning Programs
that will seamlessly blend the
regular work with new learnings.
It may be worthwhile to consider
partnering with Universities and
specialized coaching agencies to
achieve this.
Contemporary Curriculum
and Content
Recently I had an opportunity
to visit the training and research
center of one of the largest firms
in India. As the proud center head
was showing their achievements,
I picked up one of the material
suggested for reading. I realized
this book must have been written
at least 15 years ago as many of

what was given in the book, the
organization has discontinued
long time back. In fact, no one in
the industry did. Now the question is: when was the last revamp
of our training curriculum? So,
over a period of time, training
becomes at best a place for theoretical introduction to concept,
which will have a different manifestation even if it is practiced on
the ground. It is time we did a
zero-based review of our training
curriculum and got it updated to
be fully relevant for the trainees.
Taking Everybody Along

It will not be possible to train the
entire organization and hence
skilling programs are likely to
cover a key section of employees.
Many a time it covers employees
of a particular level of function.
But for an effective change, everyone in the process chain should
be trained. Hence the re-skilling
programs should be cognizant of
the organizational mapping for
the process that is likely to get impacted. For example if the organization is bringing in e-auction as
a procurement alternative, then
it is important that the both procurement person and the finance
person are trained in the process.

At the same time, the seniors of
these executives, who perhaps
approve the process, should also
be trained and skilled in running
e-auctions, handling exceptions
and rewarding innovations that
teams could introduce.
Training as an SBU
Public sectors have an additional
burden more often than not to
train smaller private players as
well. PSUs, in my view, should
budget for it and build a robust
training center, which should be
looked at as a profit center. These
centers should act independently
and shall look at having tie-ups
and alliances with reputed educational institutions to lean on
the research and innovation that
happens in the academic world.
They should also look at having a
formal program with assessment
and certification.
Adequate and appropriate skilling of employees could be the
key for PSUs to become the mortar of growth that Jawaharlal
Nehru had envisaged. It is time
they have a formal re-look at
their skilling agenda possibly
look at collaborating within and
also with the academic world in a
holistic fashion.
13
ARTICLE
CHANGES IN
LABOUR LEGISLATION
for the Organized Sector
Dr. Rajen Mehrotra*
It is time that we move with changes in Labour Laws to improve the competitiveness of the
organized sector and ensure not only its survival but also growth, so that the organized
sector can generate employment for the youth of India. We also need to recognize that in a
competitive business environment, certain enterprises will need to go through restructuring
to prevent becoming sick. At the same time certain enterprises that become sick and are
unviable will need to be closed as they cannot continue to live in a comatose situation.
he National Democratic
Alliance (NDA) Government has assumed
office in May 2014. The same
NDA Govt. earlier on 15th Oct.
1999 had appointed the Second
National Commission on Labour
on 15 October 1999 with the following terms of reference:
To suggest rationalization of
existing laws to labour in the organized sector, and;
To suggest an umbrella legislation for ensuring a minimum
level of protection to the workers
in the unorganized sector.
mentioned that he proposes to

amend the existing labour legislation in the country with reference
to both the organized and the unorganized sectors.
recommended by the Second

National Commission of Labour
in Chapter VI, Vol. 2 of their
Report (the number in the bracket
is from the report).
The present Labour Minister Mr.

Narendra Singh Tomar in June
2014, had a meeting with the labour ministers/ labour secretaries of the State Governments and
also with the employers organizations and trade unions seeking
their suggestions on the amendments to the existing Labour
Laws and its implementation.
Definition of organized sector

minimum employment of 20 persons (6.11 & 6.17).
Amendment in Labour
The report of the Second National Laws - Recommendations
Commission on Labour was of the Second National
not implemented though the Commission of Labour for
then Union Labour Minister in organized sector
his meetings with Employers
Organizations, Trade Unions and
various Professional Bodies had
Given below are the salient

features covering summary of
amendments in the Labour Laws
Beyond Rs. 25,000/- per month

salary will be non-workers (6.19).
(NB: This figure could be revised
considering inflation; there is a
need to get the gold color workers out from the coverage of the
Industrial Disputes Act).
Need for minimum level of protection to non-workers against
unfair dismissals or rewards
(adjudication by Labour Cour or
Labour Relations Commission or
Arbitration) (6.22).
Single definition on appropriate
government. National Labour
*President, Industrial Relations Institute of India (IRII), Former Sr. Specialist on Employers Activities for South Asia with International
Labour Organization (ILO) and Former Corporate Head of HR, of ACC Ltd. and Novartis India Ltd.; E-Mail:rajenmehrotra@gmail.com
14
ARTICLE
Relations Commission (NLRC) to
decide disputes (6.22).
under Section 9A of ID Act to be

dropped (6.82).
Special law for Small Scale units

(less than 20 workers) (6.28 & 6.106).
Refusal by workers to undergo

training at employers cost & time
may be included as an act of misconduct under SO if such refusal
is without valid reasons (6.83).
Definition of establishment: place

of work where some activity is
carried on with help and cooperation of workers (6.39).
Go slow and work; rule to be
defined as misconducts under
Standing Orders (SO) (6.41).
In the event of a positive strike
ballot, dispute to be referred to
compulsory arbitration; in case
of social essential services, withdrawal of Essential Services
Maintenance Act (6.48 & 6.49).
Negotiating agent on basis of
check off system. Check off system compulsory in units with
more than 300 workers (recognition 4 years and coterminous
with a period of settlement) (6.66,
6.73 & 6.76).
Establishment employing standing orders 20 or more workers to
have SO or Regulation. No need
to delimit issues on which SO can
be framed and to include multiskilling, production, job enrichment, productivity. Government
may prescribe separate Model
Standing Orders for units employing less than 50 workers; SO
to be appended with appointment letter (6.77).
Establishment to have a grievance Redressal Committee with
equal representation of workers and employers representatives (6.80). (Note Before: In 2010
there was an amendment to the
Industrial Disputes Act 1947; it is
mandatory that every employer
who employs 20 or more workers
must have one or more Grievance
Redressal Committee.
Item 11 of fourth schedule
on increase in the workforce
Under Chapter VA & VB of ID

Act:
- Prior permission not necessary with respect of lay off & retrenchment in an establishment of
any size. Two months notice/ pay
required in case of retrenchment.
- In establishments employing 300 or more workers, where
lay off exceeds a period of one
month, establishment to obtain
post facto approval.
Permission for closure needed if establishment is employing
300 or more workmen.
Compensation under closure
is:
30 days wages per year of
service for sick industry, NGOs,
charitable institutions;
45 days wages per year
of service for profit making
organizations.
Compensation under
retrenchment:
45 days wages per year of
service for sick industry or body
done with a view to make it
viable;
60 days wages per year
of service for profit making
organization.
For establishments employing less than 100 workers, the
compensation would be half of
the amounts mentioned above in
number of days wages per year of
service. However the notice pay
will be the same (6.88, 6.91).
Disputes between management

and Labour to be referred to arbitration (6.92, 6.93, and 6.94).
Section 2A of ID Act to be amended. Matters concerning termination of employment or transfer or
any other matter to be referred to
Grievance Redressal Committee,
conciliation and arbitration/ adjudication by Labour Court. Section
11A of ID Act to be retained and
power of court to reinstate in case
of violence, sabotage, theft and/
or assault not to be there (6.96).
Strike only after strike ballot,
which is supported by 51%.
Lockout will require approval
at the highest level. Illegal strike
and illegal lockout will result in
loss/ payment of three days wages for every day of strike/ lockout.
The union leading illegal strikes
to be derecognized and debarred
from applying for registration or
recognition for two or three years
(6.101).
Workers participation in management in establishments employing 300 or more workers (6.102).
Recommendations to be taken as
a whole and not in a piece meal
manner (6.104).
There cannot be fixed number of
posts in an organization. Contract
labour not to be engaged for core
production/ service activities.
With reference to offloading of
perennial non-core services like
canteen, watch and ward, cleaning, etc. to other employing
15
ARTICLE
agencies there is a need to take
care of three aspects:
Our major concern today should also be to undertake

the activity of massive skill acquisition and upgradation
programmes for the youth to become a skilled workforce
which is a prerequisite for the achievement of the countrys desired rapid and inclusive growth. Target to skill 50
million people by the end of 12th Five Year Plan, is worth
maintaining and making all out efforts at achieving.
There have to be provisions that ensure that perennial core services are not transferred to other core agencies or
establishments;
Where such services are being performed by employees on
the pay rolls of the enterprises, no
transfer to other agencies should
be done without consulting, bargaining (negotiating) agents;
Where the transfer of such
services does not involve any employee who is currently in service
of the enterprise, the management will be free to entrust the
service to outside agencies.
Contract labour to be remunerated at the rate of regular labour
(6.109).
No worker to be kept continuously as casual or temporary against
a permanent job for more than 2
years (6.110).
One months wage as minimum
bonus. Any demand for bonus in
excess of this up to a maximum
of 20% of the wages will be subject to negotiations. Ceiling for
reckoning entitlement and calculation of bonus be enhanced to
Rs. 7500/- and Rs. 3500/-, respectively (6.113). (NB: The ceiling for
reckoning entitlement and the
calculation of bonus had been
enhanced to Rs. 10,000/- & Rs.3,
500/-, respectively, with effect
from 01 April 2006.)
National Minimum Wage inclusive of DA. The DA to be linked
with CPI, DA revision in every
six months and minimum wage
revised once in five years. Under
the Piece-Rate System employee
to receive at least 75% of notified
time rate, if employer not able to
provide work (6.114, to 6.118).
16
Over Time (OT) rate to be double

and present ceilings be increased
to double. Also subsection (2) of
Section 64 of Factories Act to expand list of contingencies. Every
establishment employing more
than 20 or more workers must
run a crche. No holiday on
death, polling day (6.122).
Employment Exchange Act to remain but salary level is of Rs. 60
per month, above which vacancies to be notified be raised suitably [6.131(v)].
Khadi and Village Industries
Commission (KVIC) to review its
remuneration system to reach the
level of prospective or prescribed
national minimum wage as soon
as possible (6.135).
Constituting an All India Labour
Administrative Service (6.148).
Systems of tax incentives to be
examined for generating further
employment (6.149).
Need for Changes in Labour

Laws for the Organized
Sector
Nobody can deny that there is
a need for changes in Labour
Laws for the organized sector,
if one desires to ensure removal
of hindrances to both the manufacturing and service sector for
growth and employment generation. Presently employer organizations, Chambers of Commerce
& Industry, professional bodies,
trade unions, NGOs and others
are busy submitting their suggestions to the NDA Government

for the changes/ non-changes that
each desire in Labour Laws and
its implementation.
The recommendations of the
Second National Commission on
labour is an available document
with the NDA Government which
can be reviewed, revised, updated and adopted. The Commission
arrived at their recommendations after consultation with the
social partners (i.e. employers,
trade unions and Government),
even though there will be social
partners who will have reservations on the recommendations
of the Commission. There is a
pressing need to have revisions
in the Labour Laws guaranteeing healthy birth and growth of
existing enterprises in the organized sector of the economy to
ensure industrial peace, generation of employment and also having measures to handle situations
when an enterprise is not doing
well or becomes sick.
Our major concern today should
also be to undertake the activity of massive skill acquisition
and upgradation programmes
for the youth to become a skilled
workforce which is a prerequisite
for the achievement of the countrys desired rapid and inclusive
growth. Target to skill 50 million
people by the end of 12th Five
Year Plan, is worth maintaining and making all out efforts at
achieving.
ARTICLE
Conclusion
live in a comatose situation.
The First National Commission

on Labours Report, which was
submitted in 1969, was not implemented. The Second National
Commission on Labour Report
which was submitted in 2002
has also not been implemented
to date. It is time that the present government, after listening to
the views of all the stakeholders,
takes a decision and goes ahead
in implementing changes both in
the Labour Laws, reporting systems and also ensures that the
present inspection machinery of
the labour department which is
just an inspector raj changes to a
partnering and advisory role.
Government has said that it is

prepared to take tough decisions
in the interest of the country;
hence it needs to look at changes
in Labour Laws. There is need to
ensure that employees in the organized sector are covered under
the social legislation ensuring
benefits of paid leave, provident
fund, pension, health care, treatment and adequate compensation
in the event of an accident. The
micro, small and medium enterprises who by and large employ
less than 50 workers, desire to
have a simple composite Labour
Law which would be easier for
the enterprise to operate at the
same time safeguarding the interest of the workers.
It is time that we move with

changes in Labour Laws to improve the competitiveness of the
organized sector and ensure not
only its survival but also growth,
so that the organized sector can
generate employment for the
youth of India. It is also needed
to recognize that in a competitive
business environment, certain enterprises will need to go through
restructuring to prevent becoming sick. At the same time certain enterprises that become sick
and are unviable will need to be
closed as they cannot continue to
Business is not a straight line

graph with a continuous growth
curve. Enterprises in their life cycle have to be restructured with
reference to various resources including product portfolio, supply
manufacturing distribution
process and also people. Quite
often the existing ID Act at time
does become a hindrance, because of some of the age old provisions under Section 9A which
have not kept pace with changes
in the economic and business environment after the Indian economy opened up in 1991. Also there
is a need to review the existing
Labour Law for unviable enterprises, as they cannot continue to
live in a state of comatose. This is
because the labour department, in
most appropriate governments,
refuses to grant permission for
layoff, retrenchment and closure
when the enterprise is employing
more than 100 workers.
Our aim should also be to create an investor-friendly climate
so that the foreign companies,
which are wary of entering India
due to the perception of unfavorable Labour Laws are attracted to
invest in India.
The practice and implementation
of labour should not be such that
the management of an enterprise
or trade union is pressurized by
either party through power play
during wage negotiations with
the appropriate Government
just being a silent spectator. The
Labour Laws should also not be
unfavorable to the labour force,
but it cannot be such that managements of enterprises are held
to ransom by politically interested external trade union leaders.
SJVN Declares Highest

Dividend
he SJVN has approved a

dividend of Rs.405.39 crore
as against the dividend of
Rs.397.12 crore for the previous
year. This is the highest ever dividend paid by SJVN since commissioning of its flagship 1500
MW Nathpa Jhakri Hydro Power
Station in 2003-04. Dividend was

approved during the recently
held AGM. SJVN earned a total
revenue of Rs. 2110.72 crore as
against Rs. 1927.36 crore and a net
profit of Rs. 1114.36 crore during
the year 2013-14. The construction work of companys Rampur
HEP was completed during the

year. The 47.6 MW Khrivere
Wind Energy Plant was also completed and commissioned successfully during the year and energy generation of 3.32 MUs was
achieved from the Project up to
March,2014.
17
ARTICLE
STATE OF ECONOMY
& CPSEs
- Kaleidoscope Bureau
ood days are coming.

Indian economy is likely
to grow in the range of
5.4 to 5.9 per cent in 2014-15 overcoming the sub-5 per cent GDP
growth of the past two years,
even as poor monsoon and disturbed external environment remain a cause for concern, says the
Economic Survey for 2013-14. It
expects that moderation in inflation will ease the monetary policy
stance and revive the confidence
of investors. There are some
downside risks like poor monsoon, external environment and
poor investment climate, they can
have a bearing on the growth of
recovery. However, measures taken by the government to improve
the investment climate and governance could push up growth to
7-8 per cent in the coming years,
it added.
The survey said that the current
economic situation precludes fiscal stimulus to kick-start activity.
Targeted measures by the government and RBI have improved
the external situation significantly even as India remains exposed
to risk on/ off sentiments of the
investors and to policy shifts in
advanced economies. The emphasis of the policy, it said, would
have to remain on fiscal consolidation and removal of structural
constraints. Though some measures have been initiated to this
18
end, reversion to a growth rate of

around 7-8 per cent can only occur beyond the ongoing and the
next fiscal.
The services sector also slowed
during the last two years. The
deceleration in growth was particularly sharp in the combined
category of trade, hotels and restaurants, transport, storage and
communications. However, robust growth continued in financing, insurance, real estate and
business services.
The latest GDP data showed that
the industry sector registered a
growth of one per cent in 201213 and that slowed further to 0.4
per cent in 2013-14. The key reason for this poor performance
was contraction in mining and
deceleration in manufacturing.
The growth of the eight core industry sectors declined from 6.5
per cent during 2012-13 to 2.7 per
cent in 2013-14. The moderation
in growth occurred mainly on account of contraction in natural gas
and crude oil, subdued growth in
coal, fertilizer and refinery products. Continuing slowdown has
impacted the performance of the
corporate sector.
What does the Economic Survey
say and expect from the Central
Public
Sector
Enterprises
(CPSEs)? In pursuing development objectives, the state has
historically played a key role in

industrial development through
public-sector enterprises. State
ownership can be justified where
there are natural monopolies unsuitable for private enterprises
for social or developmental goals,
to achieve investment returns for
supporting budgetary objectives
and for national economic security. The CPSEs play a significant role in the growing Indian
economy.
The role of the CPSEs and their
need in the nation building has
been justly amplified here. It also
admits that they are indeed playing a significant role in the countrys economic growth. There
were altogether 277 CPSEs under
the administrative control of various ministries, as on March 31,
2013. Out of these, 229 were operational and 48 under construction. How did the operational
CPSEs perform in 2012-13? It said
there were 149 profit-making and
79 loss-making CPSEs, while one
neither made profit nor loss.
The net profit of profit-making
CPSEs stood at Rs 1,43,559 crore
in 2012-13, while the net loss of
loss-making CPSEs stood at Rs
28,260 crore. There was a marginal increase in the total contribution of Central Public Sector
Enterprises (CPSEs) to the central
exchequer by way of dividend
ARTICLE
payment, interest on government loans and payment of tax
and duties during the year from
Rs 1,62,402 crore in 2011-12 to Rs
1,62,761 crore in 2012-13. This, the
survey said, primarily owed to
increase in contribution towards
service tax and sales duty. There
was, however, a decline in customs duty and excise duty.
Oil and Natural Gas Corporation
Ltd (ONGC), NTPC Ltd., Fertiliser
Corporation of India Ltd, Coal
India Ltd and Bharat Heavy
Electricals Ltd (BHEL) were the
top five profit-making CPSEs.
Meanwhile,
Bharat
Sanchar
Nigam Ltd (BSNL), Mahanagar
Telephone Nigam Ltd (MTNL),
Air India Ltd, Chennai Petroleum
Corporation Ltd, Hindustan
Photo Films Manufacturing Co
Ltd were among the top five lossmaking CPSEs during 2012-13.
Given the above fact, it is almost
clear that while the CPSEs dealing with natural resources are
doing good, but the performance
of those involved in the services
sector are incurring losses. It indicates that they need to catch up
and it has to be done at a faster
pace to be at par with those doing well in the private sector. The
beauty of services sector is that
the business here prospers with
the image of a firm. It is very hard
to get it, the hardest part is perhaps to maintain the image. So
what is wrong with the telecom
services providers and the national carrier?
The survey itself said that the
Indian telecom sector has registered a phenomenal growth during the past few years and has
become the second largest telephone network in the world after
China. A series of reform measures by the government, innovations in wireless technology and
improvement in the working of

the two state-run service providers. The government, thus, proposes to make a fresh investment
of Rs 39,468 crore over the next
five years to bring the loss-making units back on their feet.
The need of the hour is to

help improve the performance of the ailing and
loss-making CPSEs. There
are no short-cuts, but it
certainly can be done by
a well thought out plan
and this will take time. The
foremost need is to infuse
professionalism into these
entities and equip them to
compete with the changing environment of business... A system needs to
be put in place where the
real talent gets monetary
benefit and an enabling
environment to work
freely. Also talent must be
rewarded and respected.
active participation by the private

sector played an important role in
the growth of the telecom sector
in the country. Indias telecomdensity was 73.32 per cent in 2013.
This raises a pertinent question:
Why couldnt BSNL and MTNL
prosper while the private sector
took away with the biscuit? Why
are they making losses now even
though they were making profit
earlier? Telecom Minister Ravi
Shankar Prasad recently said in
Parliament that these two did not
get the structural support they
required leading to their present
state of affairs and acknowledged
the fact that there is scope for
Air India incurred Rs 5,189.55

crore loss in 2012-13. However,
this was down from the previous
years Rs 7,559.74 crore loss. The
civil aviation ministry has already
set up a panel to suggest ways of
improving the profitability of Air
Indias routes. Being the national
carrier, the airline is required to
fly on unprofitable routes in India
to maintain air connectivity. A
recent study found that between
April and June 2012, only 16 of its
184 flights met its overall costs.
The need of the hour is to help improve the performance of the ailing and loss-making CPSEs. There
are no short-cuts, but it certainly
can be done by a well thought out
plan and this will take time. The
foremost need is to infuse professionalism into these entities and
equip them to compete with the
changing environment of business. Ownership structure also
needs to be redefined. The board
of any company has to be professional and guide the functional
management on the right path
keeping the changes taking place
internationally so that they can
improve. Talented people often
do not find a job in a PSU lucrative
because of the salary differences
with the private sector. A system
needs to be put in place where the
real talent gets monetary benefit
and an enabling environment to
work freely. Also talent must be
rewarded and respected.
These are just some of the steps.
To ensure ache din for CPSEs,
much more needs to be done!
19
ARTICLE
What
can Prevent a
Dr. (Prof.) Harsh Wardhan*
HEART ATTACK?
A diet rich in fruits, vegetables and whole grains can help protect
your heart. Beans, other low-fat sources of protein and certain types
of fishes can also reduce your risk of heart disease. Most people need
to add more fruits and vegetables to their diet five to 10 servings a
day. Eating several servings a week of certain fish, such as salmon and
mackerel, may decrease the risk of heart attack. Those who have high
blood pressure should take less of salt, particularly preserved foods
which are rich in salt content. If one is overweight, the total calorie
intake also needs to be restricted to reduce the weight.
ur heart is one of the

most important organs
in our body. It performs
the most important function of
pumping blood for circulation
throughout the body. Stoppage
of heart halts supply of blood,
oxygen and nutrients to all vital
organs of the body. Life cannot
sustain if body does not get these
nutrients for more than 3 minutes. To do this arduous work of
pumping continuously, the heart
muscle also needs oxygen and
other nutrients like glucose which
are in the blood and its supply to
the coronary artries.
further branch into sub-arteries

which run on the surface of the
heart and supply blood to the
heart muscle (Figure 1). Any
blockage in these arteries will

reduce the blood supply to the
heart muscle. If this blockage is
partial, the heart muscle receives
There are two main coronary arteries right and left and they
*
Dr. (Prof.) Harsh Wardhan, Chairman-Cardiology, Rockland Group of Hospitals, New Delhi (former Professor, Consultant & Head
of the Department (Cardiology), Dr. Ram Manohar Lohia Hospital & PGIMER, New Delhi).
20
ARTICLE
insufficient blood during physical
exertion. As a result the patient
gets pain during exertion which
subsides on taking rest. This is
called angina.
Besides chest discomfort on exertion, shortness of breath may
also be a manifestation of blockages in the coronary arteries. If
any coronary artery blocks 100%
suddenly whcih happens due to
the formation of blood clot on
partially blocked coronary artery
myocardial infarction (commonly known as heart attack)
occurs. This total blockage of the
artery cuts off the blood supply to
the heart muscle supplied by that
artery/branch. Unless opened
within six hours of blockage, it
can lead to permanent damage to
that part of the heart muscle with
the result that the heart pumping
activity is permanently reduced.
The extent of damage caused depends on the site of blockage. If
a main artery gets blocked, the
damage will be larger than the
blockage in a smaller branch.
One third of the patients of heart
attack has sudden cardiac death
and are not able to seek medical help. In those patients who
are able to reach the hospital, the
doctors open the blood vessel either by a clot dissolving medicine
or mechanically by angioplasty.
In angioplasty, a fine tube is inserted from the artery of groin or
wrist and through this tube a balloon is passed across the blockage over a fine wire. The balloon
is inflated to open the artery and
then a stent is placed to keep this
artery open (Figure-2).
Blockages can also be removed
with clot dissolving medicines.
However in the first 12 hours of
heart attack, angioplasty is the
most viable and effective option.
High levels of blood cholesterol are associated

with increased risk of
heart disease. Blood cholesterol levels, therefore,
should be maintained
within the normal range,
particularly the LDL
cholesterol levels (also
known as bad cholesterol levels). Higher HDL
cholesterol (good cholesterol level) level is good
for the heart. A healthy
lifestyle, proper care of
diet and doing physical
activity helps to reduce
the LDL cholesterol levels and increase the HDL
cholesterol levels.
The sooner the artery is opened,
the lesser is the damage to the
heart and better are the results.
One should therefore never ignore the symptoms of a heart attack. Any discomfort or pain in
the chest, upper abdomen or jaws
or acute shortness of breath could
be a symptom of heart attack and
should not be ignored. Some people may also get vomiting and/ or
sweating along with pain. Many
a time when these symptoms are
ignored and attributed to indigestion, etc., precious time is lost.
Whenever a patient is suspected
to be suffering from heart attack,
he/ she should be immediately
rushed to the nearest heart center. Chewing a tablet of aspirin, if
readily available, may be helpful
before transferring the patient to
the nearest hospital. Lot of lives
can be saved if a heart attack is
recognized soon and the blocked

artery is opened early.
Blockages in arteries occur because of deposition of cholesterol
in the walls of the coronary artery
called atherosclerosis. The exact
cause of deposition of cholesterol
in the vessel wall is not known
but certain factors risk factors
increase the threat of deposition
of cholesterol. These risk factors
may be modifiable or non-modifiable. The non-modifiable risk factors are: ageing, male gender and
heredity. Some of the important
modifiable risk factors are: high
blood cholesterol, smoking, high
blood pressure, diabetes, lack
of physical activity, obesity and
stress. To prevent heart disease,
one must control these modifiable risk factors. Fortunately,
most of these risk factors can be
controlled by adopting a healthy
life style.
Some Heart Attack

Prevention Tips
Quitting Smoke
and Tobacco Use
Smoking or using tobacco of any
kind is one of the most significant risk factors for developing a
heart disease. Carbon monoxide
in cigarette smoke replaces some
of the oxygen in blood. This increases blood pressure and heart
rate. Women who smoke are also
at a greater risk of having a heart
attack or stroke than those who
dont. Smokeless tobacco and
low-tar and low-nicotine cigarettes are as risky as exposure to
secondhand smoke. If one quits
smoking, the risk of heart disease
drops almost to that of a nonsmoker in about five years. And
no matter how long or how much
you smoke, youll start reaping
rewards as soon as you quit.
21
ARTICLE
Eat a Heart-Healthy Diet
It is always better to eat a low
fat diet; limiting certain harmful fats are also important. Of
all the types of fat saturated,
polyunsaturated, monounsaturated and trans-fat saturated
fats and trans-fats are the ones
which should be avoided. One
should try to keep saturated fat to
no more than 10 percent of daily
calories and avoid trans-fats altogether. The major sources of
saturated fat and cholesterol include red meat, yellow portion of
egg, dairy products, coconut and
palm oils. Major sources of transfats include deep-fried fast foods,
bakery products, packaged snack
foods, margarine and crackers,
etc. If the nutrition label has the
term partially hydrogenated, it
indicates that the product contains trans-fats.
A diet rich in fruits, vegetables and
whole grains can help protect the
heart. Beans, other low-fat sources of protein and certain types of
fishes can also reduce the risk of
heart disease. Most people need
to add more fruits and vegetables
to their diet five to 10 servings
a day. Eating several servings a
week of certain fish, such as salmon and mackerel, may decrease
the risk of heart attack.
Those who have high blood pressure should take less of salt, particularly preserved foods which
are rich in salt content. If one is
overweight, the total calorie intake also needs to be restricted to
reduce the weight.
Regarding alcohol intake in
healthy adults, its better to do
so in moderation women of all
ages and men older than age 65
can have one drink a day; men
aged 65 and younger can have
two drinks a day. At the moderate
level, alcohol does not adversely
22
Fig.: 1
affect the heart. More than that

becomes a health hazard.
Exercising/ Doing Physical
Activity
Getting some regular, daily exercise can reduce the risk of heart
disease. If one combines physical activity with other lifestyle
measures, such as maintaining
It is recommended that at
least 30 to 60 minutes of
moderately intense physical activity most days of the
week is good for the heart.
However, even shorter
amounts of exercise could
offer heart benefits. One
can even get the same
health benefit if the workout time is broken up into
three 10-minute sessions
most days of the week. One
doesnt have to exercise
strenuously to achieve
benefits. One can see bigger benefits by increasing
the intensity, duration and
frequency of the workouts.
a healthy weight, the payoff is

even greater. Physical activity
helps to control weight, reduces
blood pressure, controls diabetes
and improves blood cholesterol
levels, thus reducing the risk of
heart disease.
It is recommended that at least 30
to 60 minutes of moderately intense physical activity most days
of the week is good for the heart.
However, even shorter amounts
of exercise could offer heart benefits. One can even get the same
health benefit if the workout time
is broken up into three 10-minute
sessions most days of the week.
One doesnt have to exercise
strenuously to achieve benefits.
One can see bigger benefits by
increasing the intensity, duration
and frequency of the workouts.
Maintain a Healthy Weight
Excess weight can lead to conditions that increase the chances
of heart disease high blood
pressure, high cholesterol and
diabetes. One way to see if the
weight is healthy is to calculate
the Body Mass Index (BMI), which
considers height and weight, in
order to determine whether you
have a healthy or unhealthy percentage of body fat. BMI numbers
23 kg/m2 and higher in Indians
ARTICLE
are associated with higher blood
fats, higher blood pressure, and
an increased risk of heart disease
and stroke.
Fig.: 2
The BMI is a good, but imperfect

guide. Muscle weighs more than
fat. For instance women and men
who are very muscular and physically fit can have high BMIs without added health risks. Because of
that, waist circumference also is a
useful tool to measure how much
abdominal fat you have:
Men are considered overweight if their waist measurement is greater than 90 cm
Women are overweight if
their waist measurement is greater than 80 cm.
Even a small weight loss can be
beneficial. Reducing even 5 to 10
percent of weight can help decrease blood pressure, lower the
blood cholesterol level and reduce the risk of diabetes.
Controlling Blood
Pressure and Diabetes
If one is suffering from high blood
pressure, it should be kept under control by adopting lifestyle
measures and proper medication.
Proper control of blood pressure
reduces the risk of heart attack.
Since high blood pressure usually
does not cause any symptoms, it
may remain undetected unless
measured. A regular measurement of blood pressure at least
once in a year is suggested for
healthy individuals.
Controlling Diabetes
Every diabetic should attempt
to keep blood sugar levels and
HbA1c levels within normal limits. HbAic tells us the average degree of blood sugar control in last
three months and is an important indicator of diabetes control.
Diabetes is an important risk factor for heart disease. Proper control of diabetes not only reduces
the chances of heart attacks, but
also lessens the damage to other
organs of the body, like kidneys,
brain and eyes.
Controlling Blood Cholesterol
Levels
High levels of blood cholesterol
are associated with increased risk
of heart disease. Blood cholesterol
levels, therefore, should be maintained within the normal range,
particularly the LDL cholesterol
levels (also known as bad cholesterol levels). Higher HDL cholesterol (good cholesterol level) level
is good for the heart. A healthy
lifestyle, proper care of diet and
doing physical activity helps to
reduce the LDL cholesterol levels
and increase the HDL cholesterol
levels. If changes in ones lifestyle
are unable to control ones cholesterol levels, one may have to take
medications to control the cholesterol levels.
Enough Quality Sleep
Sleep deprivation can have harmful effects on health. People who
dont get enough sleep have a
higher risk of obesity, high blood
pressure, heart attack, diabetes

and depression.
If one feels that hes been
getting enough sleep but still
feels tired throughout the day, it
is better to consult ones doctor
to be evaluated for sleep apnea.
Obstructive sleep apnea blocks
the airflow through the windpipe
and causes you to stop breathing
temporarily. Signs and symptoms
of sleep apnea include snoring
loudly; gasping for air during
sleep; waking up several times
during the night; waking up with
a headache; sore throat or dry
mouth, and; memory or learning
problems.
Reducing Stress
Practice a relaxation technique,
such as yoga or meditation, and
take time out every day for a few
quiet minutes to unwind and appreciate life.
Regular Health
Screenings
Blood pressure, cholesterol levels

and blood sugar levels should be
regularly screened to detect them
early before they cause damage.
By following these few tips, one
can keep ones heart healthy & reduce the risk of a heart attack.
23
3rd Advanced Global Leadership Program
SCOPE Developing Global

Business Leaders in CPSEs
After a week-long first
phase at the Indian
Institute of ManagementCalcutta,
(IIM-C),
the
3rd
Advanced
Global
Leadership
Programme,
organized by SCOPE and
IIM-C, entered its second
phase with the European
Study Tour. In this regard,
one day Workshop was
organized on 29th August
2014 at SCOPE Convention Mr. Atul Chaturvedi, Chairman, PESB (centre) addressing the Global leadership
Centre, New Delhi. Mr. Atul Programme. Sitting on his left is Mr. C. S. Verma, Chairman, SCOPE and on his right
Chaturvedi,
Chairman, Dr. U. D. Choubey, DG, SCOPE.
Public Enterprises Selection Board (PESB), delivered the keynote address at the Workshop.
Mr. C. S. Verma, Chairman, SCOPE & Chairman, SAIL, Dr U.D. Choubey, Director General,
SCOPE, also address the participants Mr. Ashok Pavadia, Joint Secretary, Department of
Public Enterprises, was also present on the occassion and addressed the participants in a
subsequent session.
r
Atul
Chatuvedi,
Chairman, PESB in his
address said that enhancing knowledge base, clarity
of thoughts and ability to take
risks are the skills required to

be an effective leader in a competitive business environment.
He said that perception plays
an important role for successful
running of a company and advised the participants to create a

positive image of Indian CPSEs
globally. Developing understanding of global business dynamics,
(L to R) Mr. C. S. Verma, Chairman, SCOPE, Dr. U. D. Choubey, DG, SCOPE, Mr. A. K. Pavadia, Joint Secretary, DPE, Mr. Pratyush Sinha,
former CVC addressing the participants.
24
SCOPE News
Group photo of delegates of the Global Leadership Programme.
functioning of the company value

chain and relationship with different stakeholders and society
at large will benefit the CPSEs, he
added
Mr. Chaturvedi, while addressing
the participants, suggested formation of a Core Group to look
into the economic issues, such as
WTO Agreements and their impact on Public Sector Enterprises.
Mr. C.S. Verma, Chairman,
SCOPE, and Chairman, SAIL, in
his address exhorted the Board
level aspirants to emerge as role
models for the entire industry
domestically and globally. He
said that in the current business
environment, organizations need
to change the ways of doing business order to keep pace with the
changing times. Strong leadership at the top, investment in
innovation and R&D, sustained
relations with the community,
concern for environment and
transparency are the need of the
hour, he added
Dr. U.D. Choubey, DG, SCOPE,
said that there is need to focus
on leadership development in
CPSEs. While outlining the differentiating between leader and
leadership, Dr Choubey said that
a leader focuses on personal attributes whereas leadership is a system process. He said the concept
of leadership cannot be transported outright from Western
Mr. Augustine Peter, Member CCI (left) and Mr. Akashdeep

Chakravarti, Registrar, TDS & AA addressing the Workshop.
management.
But needs to
be adapted to
Indian culture
and context. He
also emphasized
the need to have
sustained relationship
with
the community
at large.
Dr. Sougata Ray, programme

Director and Professor IIM
Calcutta Shared the programme
press spech
In the session accountability
in CPSES key issues of vigilance session. Mr. Pratyush
Sinha, former Central Vigilance
Commissioner, addressed the
participants. It was followed by
a session in which Mr. Ashok
Pavadia, Joint Secretary, DPE,
spoke on the role of DPE in Policy
and Governance Framework.
Mr. Augustine Peter, Member,
Competition Commission of India,
highlighted strategic dimensions
of the competition law. Mr. Akash
Deep Chakravarti, Registrar,
Telecom Disputes Settlement &
Appellate Authority, spoke on the
key issues in implementation of
the RTI act.
In the concluding session, Prof.
Sougata Ray, Program Director,
IIMC and Mr. U. K. Dikshit,
Programe (Adviser) SCOPE
summed up the proceedings, while Mr. R.K. Vasudeva,
Program Coordinator, proposed
the vote of thanks.
25
SCOPE News
SCOPE Workshop on Crisis Communication
and Media Management
Mr. C. S. Verma, Chairman, SCOPE (2nd from left) releasing the Special Issue of Kaleidoscope Journal on Image Management
in CPSEs. Standing on his right is Dr. U. D. Choubey, DG, SCOPE and on his left are Mr. Ashok Venkatramani, CEO, MCCS Pvt.
Ltd. (an ABP Group Company) and Dr. Jaishri Jethwaney, Programme Director.
Crises are part and parcel of Corporate life. During crises, communication takes centre
stage. While good management and transparent handling of crises can lesser the physical
harm, effective communication can mitigate damage.
SCOPE organized a two-day workshop on Changing Paradigms in Crisis Communication
and Media Management on 20th-21st August 2014 at SCOPE Convention Centre with a view
to acquaint the Corporate Communication Executives and other executives, posted in strategic
positions, with all the aspects of natural and man-made crisis, foreseeing crisis, advance planning,
role and imperatives of communication in various phases of crisis and providing hands-on-skill
in media management. Mr. C.S. Verma, Chairman, SCOPE & Chairman, SAIL, inaugurated the
workshop and released the special edition of SCOPEs monthly journal KALEIDOSCOPE on
Image Management in CPSEs. Other eminent speakers in the inaugural session included Dr. U.D.
Choubey, Director General, SCOPE, Mr. Ashok Venkatramani, CEO, MCCS Pvt. Ltd (an ABP Group
Company), Dr. Jaishri Jethwaney, Professor (PR & Advertising), IIMC, and Programme Director
and, Mr. R.K. Singhal, GM (Corporate Affairs Division), SAIL.
The inaugural session was followed by six technical sessions which were addressed by some of
the most happening speakers who provided varying perspectives on the subject and related
issues. In the valedictory session, Mr. Sanjeev Srivastava, Group Editor-In-Chief, Focus News
Network, delivered the valedictory address. Dr. U.D. Choubey, DG, SCOPE, gave special address
while Dr. Jaishri Jethwaney summed up the proceedings. Mr. R.K. Singhal, GM (Corporate Affairs
Division), SAIL, welcomed the dignitaries and participants while Mr. K.N. Dhawan, Advisor
(CC), SCOPE, proposed a vote of thanks. The workshop was attended by a large number of PR
& Corporate Communication practitioners and other executives posted in strategic positions in
various PSEs.
26
SCOPE News
naugurating the workshop, Mr.

C.S. Verma, Chairman, SCOPE
and Chairman, SAIL, said that
business communication and business strategy are an integral part of
business communication and the
two functions need to be integrated to succeed in the competitive
environment. Highlighting the
importance of corporate communication in the changing business
environment, he said that CPSE
should initiate action for board
level positions for strategy & communication in CPSEs.
Mr. Verma stressed on the fact that

the parameters of doing business
today have changed. He added
that since the organizations today
live in an era of uncertainty, ambiguity and fierce competition, it
was imperative that companies
to have a closer understanding of
the market matrix, alternatives to
traditional products and consumer preferences.
Earlier Mr. Verma released the special edition on KALEIDOSCOPE
on Image Management in CPSEs
which contained articles by experts and eminent persons on the
important aspects related to corporate communication and writeups from PSEs along with success
stories of their PR & CC.
Dr. U. D. Choubey, DG, SCOPE,
in his address emphasized on the
necessity of image management
for CPSEs. He said that companys image is one of the most intangible assets, and if corporate
image is not managed, enterprises will lose their global presence.
He also advised that companies
should nurture continuously
their community relations.
Dr. Choubey exhorted the participants to meet their CEOs and
emphasize on the creation of
(L to R) Mr. C. S. Verma, Chairma, SCOPE, Dr. U. D. Choubey, DG, SCOPE and Mr. Ashok
Venkatramani, CEO, MCCS Pvt. Ltd. addressing the Workshop.
strategies and tactics to build a robust image of their organizations.

Image he said cant be created in
isolation of the good work that
needs to be put in by the CPSEs.
According to him there is a need
to have a dedicated taskforce to
look into the aspects of national
and international visibility of the
company and project the culture
based on ethics and transparency.
The keynote speaker, Mr. Ashok
Venkatramani, CEO, MCCS Pvt.
Ltd. (an ABP Group Company),
gave a formal presentation on
crisis communication. He said
that a company had a crisis if
the media felt it had a crisis, so
it was important for organizations to set agenda. Some of the
key rules in crisis communication according to him included
Speed, Stakeholder Definition,
Key Messages and Identification
of key Spokesperson.
Mr. Ashok Venkatramani, urged
the participants to be truthful to
media and dont to hide facts at
the time of crisis in order to safeguard the image of the company.
He suggested to keep politicians
away from the management of
crisis and advised to build an effective relationship with various
stakeholders and empower the
team to handle the crisis.
Resource
person,
Dr.
Jaishri
Jethwaney, outlined the importance of partnering with media in

critical times to share organizational perspective with the stakeholders and public at large. She
explained out the thought process behind various sessions and
selecting faculty members and
media representatives in anchoring various modules.
In the first session of Deconstructing Crisis Communication
Imperatives, Dr. Jaishri Jethwaney
put together various conceptual inputs embellished with
various case studies, while Mr.
Anuj Dayal, Executive Director,
DMRC. gave a case study of crisis handling in DMRC. Learning
from mistakes Mr. Dayal suggested that after major accidents,
it was not a good idea to go in
for immediate recovery as it may
boomerang. He cited the case of
Matro Accidents in 2009, in their
regards.
The session on crisis communication in the financial sector in
the afternoon had Mr. Prithvi
Haldea, CMD, Prime Database,
and Mr. Gaurav Choudhary,
Economy Editor, Hindustan
Times, as speakers. After giving
suggestions on crisis communication in the financial sector,
both deconstructed the Sahara
27
SCOPE News
crisis and other crises cases from
the communications perspective
and why a few strategies employed by the players went
against them.
Mr. S. S. Mohanty, Director
(Technical), SAIL, presented case
studies of disruption of plant
operations at Bhilai Steel Plant
in June 2014 and Bokaro Steel
Limited in August 2010. During
the last session on the day 1 on
levarging Employee confidence
and trust in a Crises Situations.
Mr. Sugata Hazara, Senior
Advisor, Public Affairs, DTA,
and Mr. Rahul Dhawan, Head,
Strategy & Planning, DTA, provided many tips on crisis management. It was shared that many
companies, like Coca Cola, dont
use the term crisis as it had negative connotations. Instead they
called it Incident Management.
In a crisis situation, the rulebook,
he said often fails, what come to
rescue are human integrity and
improvisation skills. The four
Cs of incident management,
according to them, included
Control, Concern, Caution
and Containment.
Day-2 began with screening of
films on various crisis situations
followed by analysis and a Q&A
session. The session was anchored by Dr. Jethwaney.
Session IV on disaster management the importance of thinking on your feet was anchored by
Mr. Subhamoy Bhattacharjee, Dy.
Editor, Indian Express, and Mr.
G.S. Bawa, GM (PR), AAI. Mr.
Bawa emphasized on the need for
preparation/ doing ones homework and developing sharp reflexes. He shared the importance
of BMW, an acronym for Brain,
Mouth & Words and mentioned
28
Mr. Sanjeev Srivastava, Group Editor-In-Chief, Focus News Network (centre) delivering the Valedictory Address. Sitting on his right is Dr. U. D. Choubey, DG, SCOPE and
on his left Dr. Jaishri Jethwaney, Programme Director.
the importance of thinking before

speaking in a crisis situation. Mr.
Bhattacaryjee shared that it was
common with journalists today
to get news cues from twitter and
follow important persons with
news value on social media.
Session V, on what media expects
from PR professionals, had CMD,
NPCC, Mr. H. L. Choudhary,
Senior News Editor, Times of
India, Mr. Surojit Gupta, National
Economic Editor, Times of India,
Mr. Sidhartha. The crux of the
discourse that emerged from the
session was that media expected
interesting sound bites, facts, candid disclosures and speed from
organizations. Managing perceptions on social media was challenging as the canvass was too
large and world community too
diverse. The lesson that came out
of the session was that as soon as a
crisis breaks, uploading information on the company website was
very important. Responding to
journalists queries and bloggers
concern was equally important.
In the last technical session on
crisis handling in digital age,
Mr. Rishi Raj, Associate Editor,
Financial Express, felt that the liberalization of economy provided
opportunity to the practitioners
in the CPEs to come of age. Focus

on communication he felt needed
to shift the digital media, as even
the government was active on
the social media. He shared that
there was a time when journalists
would be waiting till late at night
and even in inclement weather
to get sound bites from the government and politicians. All has
changed as Twitter has come
in handy for them to follow on
their phone devices. Mr. Rajdeep
Chaterjee, Digital Marketing
Manager, Nokia, felt that the crisis seemed bigger in the public
sector, because of the scale and
they being in the public domain.
He said that the common mistake
one made in a crisis was when
one tried to reverse the impact.
Bad cant be turned into looking good, he said, but the effort
has to be to see that the bad does
not look worse. The communication plans the choice of the
medium has to change because of
the changing demographic profile of the Indian population. The
median age in India, he shared,
was 24 years and it was a common knowledge that an average youngster did not pick up a
newspaper or sit glued in front of
a news channel. He would rather
pick his information on his smart
phone. The change he exhorted
SCOPE News
(L to R) Mr. H. L. Choudhary, CMD, NPCC, Mr. S. S. Mohanty, Director (Tech.), SAIL, Mr. Prithvi Haldea, CMD, Prime Database, Mr.
Gaurav Choudhary, Economy Editor, Hindustan Times and Mr. Subhmoy Bhattacharjee, Dy. Editor, Indian Express addressing the
Workshop.
needed to be understood, assimilated and strategized made

accordingly.
Mr. Saurabh Parmar, Founder &
CEO, Brandologist, felt that digital was just a device, a handle, an
enabler; the basic thing was human communication whatever
the mode one used. Therefore, it
was imperative that those handling digital media needed to
understand human behavior
carefully. It was also felt that corporte needs to creater a mood-emater to gauge on the social media about them. By avoiding and
eviding the percipation wont go
away. There is never over communication in a crises situation.
The learning for the participants
continued in the valedictory
session. The Chief Guest for

SCOPE said business communication and business
strategy are an integral part
of business communication
and the two functions need
to be integrated to succeed in
the competitive environment.
Highlighting the importance
of corporate communication
in the changing business
environment, he said that
CPSE should initiate action
for board level positions for
strategy & communication in
CPSEs.
the session was Mr. Sanjeev
Srivastava, Group Editor-InChief, Focus News Network, who
has had the distinction of working for years in print and electronic media including his over
15 years stint at the BBC and
many mainstream news channels
and newspapers.
DG, SCOPE reiterated that he
would soon have a dialogue with
the chief executives of CPSEs
on the need for creating a taskforce on corporate strategy and
communication.
Mr. Srivastava advised on the
need for being factual and honest
in a crisis. He said that his years
of experience in the print and
electronic media both Indian
and foreign has made him to
believe that reality with warts
and inadequacies was far better than concoctions, half truths
and being evasive. Media people
know about crisis than anyone
else even within their own media organizations so they tend
to believe and appreciate honest
sharing of facts, he advised.
In her summation Dr. Jaishri
presented some key learning
from across various sessions. She
praised the delegates for their
excellent participation. Mr. R.K.
Singhal welcomed the participants, while Mr. K.N. Dhawan
proposed vote of thanks. The twoday workshop hopefully achieved
its objectives in full measures, if
the response of the participants
could be an indication.
- K.N. Dhawan
29
SCOPE News
SCOPE Urges for Greater Autonomy

to PSEs at India Today PSUs Awards
r. C. S. Verma,
Chairman, SCOPE
&
Chairman,
SAIL and Dr. U.D. Choubey,
were invited by India Today
Group in a panel discussion
titled The Business of Public
Enterprise: The Winning
Formula during the PSU
Awards function held on
August 21, 2014 in New Delhi.
The third Panelist was Mr. B.C.
Tripathi, CMD, GAIL India
Ltd. Mr. Ram Vilas Paswan,
Union Minister of Consumer
Affairs, Food & Public
Distribution Distributed the
awards to PSEs.
SCOPE emphasized on measures for greater autonomy and
efficiency of CPSEs through
further reforms aimed at separating the management from
the ownership in these organizations. This was the need of
the hour, keeping in view the
Mr. C. S. Verma, Chairman, SAIL and Chairman, SCOPE, received Awards for being the Best in CSR and Sustainability as well as the most Eco-friendly PSU
from Mr. Ram Vilas Paswan, Union Minister of Consumer Affairs, Food & Public
Distribution.
challenges of the dynamic market

conditions, he added. Mr. Verma
informed that SCOPE has suggested creation of a holding company of leading PSEs to represent
government ownership for greater autonomy and empowerment
of their Boards. This can be on the
lines of successful model already
operating in many countries.
He also emphasized the need for
level playing field between public
sector and private sector. Dr. U.D.
Dr. U. D. Choubey, DG, SCOPE (2nd from left) addressing the India Today PSUs
Awards Function. Also seen in the picture are Mr. C. S. Verma, Chairman, SCOPE
and Chairman SAIL (extreme right), and Mr. B. C. Tripathi, CMD, GAIL India Ltd.
(3rd from left).
30
Choubey, Director General,

SCOPE envisaged for further
reforms in public sector enterprises in the country. He
elaborated his 10-point agenda for immediate reforms
of PSEs. The government
should minimize its control
and give more autonomy to
boards. Multiple checks and
balances should be simplified
and time-bound project clearances should be ensured, he
added. Different trends are
emerging due to recession
the world over. A large number of countries have started
consolidation of sovereign
holding in their state owned
enterprises (PSEs) for improving governance and deliverability. The trend has been to
relinquish ownership rights
and control by administrative
ministry and creation of supreme Sovereign Department
and Sovereign Wealth Fund to
run the companies in a professional manner.
SCOPE News
SCOPE for Service Tax Compliances

Service Tax has assumed
significance in recent years as one
of the major contributors to the
Government exchequer. Service
Tax has spread its wings deeply
and widely and its scope is being
widened every year by adding
core services within its ambit. It
entails numerous compliances
and procedures. A programme
on Service Tax-Compliances was
organized by SCOPE and the
Institute of Cost Accountants of Dr. U. D. Choubey, DG, SCOPE, (centre) CMA A.S. Durgaprasad, President, ICAI
India on 28th August 2014 at (left) and CMA Dr. S. R. Bhargave, Secretary, ICAI in the Inaugural Session of
the Programe on Service Tax - Compliances.
SCOPE Convention Centre, New
Delhi. Dr. U.D. Choubey, Director General, SCOPE, CMA Dr. A.S. Durga Prasad, President of the
Institute of Cost Accountants of India, CMA Dr. Sanjay R. Bhargave, Central Council Member &
Chairman Cost Audit and Assurance Standards Board, and CA Atul Gupta, Consultant and Tax
Expert, addressed the members during the programme.
arious reforms have been

carried out in the past few
years in the prevailing indirect tax regime, which will pave
the path for the eventual transition to Goods and Service Tax.
However, Finance Act 2012 has
brought about a paradigm shift
in the basis for levying Service
Tax. As the law has matured over
the years, the enforcement has become stricter. Several provisions
relating to offences and penalties
have recently been introduced in
the law, which warrants a higher degree of attention towards
compliance.
Speaking in the programme on
Service Tax - Compliances
organized by SCOPE, Dr. U.D.
Choubey,
Director
General,
SCOPE, in his inaugural address, said that the contribution
of Service Tax to the national
exchequer has been steadily increasing over the years and the
estimated revenue from Service
Tax for the fiscal 2014-15 is more
than Rs. 2,15,000 crores. Its share
in the GDP is more than that of
agricultural and industrial sectors, he added.
Dr. Choubey further mentioned
that CPSEs are facing problems
because of total taxation. He said
that on the one side there is VAT
on commodities but on the other
side Service Tax is levied on their
transportation and other services
that also include the commodity. He implied that the unified
GST would help them come out
of such paradoxical taxation regime, which has currently been
prevailing.
Dr. Choubey also urged that not
only specific infrastructure projects but also all the infrastructure
projects, including the power

plants and pipelines, need to be
given proper consideration by
the government for exemption of
service tax.
CMA Dr. A.S. Durga Prasad,
President of the Institute of Cost
Accountants of India, in his address said a harmonious blending
of Service Tax and VAT into the
Goods and Service Tax has now
become inevitable and may soon
become a reality.
CMA Dr. Sanjay R. Bhargave,
Central Council Member &
Chairman Cost Audit and
Assurance Standards Board of
the Institute of Cost Accountants
of India, gave the program perspective. He elaborated the abatement under Service Tax and highlighted the CENVAT Credit. CA
Atul Gupta, Consultant and Tax
Expert gave an analysis of the
Service Tax provisions.
31
SCOPE News
SCOPE for Professionalization of PSEs
peaking at elts PSU Summit

2014, Dr. U.D. Choubey,
emphasized the need for further
reform in PSEs. He advocated
that establishing community relations on sustained basis is the
best strategy for improving image of PSEs/Corporates.
DG, SCOPE said the post recession period witnessed a major
change in world-wide trend
in governance of State Owned
Enterprises.
Globally, many
countries have created Sovereign
Wealth Fund or Sovereign
Holding Structure for their State
Owned Enterprises for improving governance and deliverability. Therefore, there is need for
structural change which could be
arrived at by wide deliberations
Dr. U. D. Choubey, DG, SCOPE addressing the elts PSU Summit 2014.
between academicians, researchers, professional and government and people at large. This
would help in improving corporate governance practices and
far better professionalization. Dr.

U.D. Choubey, Director General,
SCOPE highlighted enormous
contribution made by PSEs in the
national economy.
Indraprastha Media Ratan Award to SCOPE PR Employee
s. Nisha Sharma, Manager (CC), SCOPE & Editor,

KALEIDOSCOPE Journal has been conferred
with the Media Ratan Award 2014 for achieving excellence in public relations. Mr. Vijay Goel, M.P.
and Ms. Pinki Anand, Additional Solicitor General of
India presented the award to Ms. Nisha Sharma during
a glittering function in New Delhi on 6th September,
2014. The awards were instituted by Indraprastha
Ms. Nisha Sharma, Manager (CC), SCOPE being awarded the

Indraprastha Media Ratan Award by Mr. Vijay Goel, MP and
Ms. Pinki Anand, Additional Solicitor General of India.
Press Club of India (IPPCI). IPPCI also organized a seminar on Changing Trends of Public Relations which was
addressed by Mr. K.N. Dhawan, Adviser (CC), SCOPE.
Mr. K. N. Dhawan, Adviser (CC) and Mr. A. S. Khan, Manager
(CC), SCOPE (Special Invitees) felicitating Mr. Manoj Tiwari, MP
durign the Award Function.
32
On this occasion, Mr. K.N. Dhawan, Adviser (CC) and Mr.

A.S. Khan, Manager (CC), SCOPE (Special Invitees) felicitated Mr. Manoj Tewari, Member of Parliament and the
Chief Guest of the function.
SCOPE News
SCOPE Pays Rich Tribute to
Shri Mohd. Fazal
Shri. Mohd. Fazal

(1922 - 2014)
SCOPE Family deeply mourns the sad demise of its first Chairman Shri Mohd. Fazal,
aged 93, who passed away on 5 September 2014 at his residence in Abu Bakarpur in
Allahabad. Paying tribute to Shri Fazal during the condolence meeting held in SCOPE, Dr
U.D. Choubey, Director General, SCOPE, said that Shri Fazal was a great visionary whose
contribution to the cause of Public Sector has been exemplary.
Born on July 2, 1922, Shri Fazal was associated with SCOPE since its formative years. He
was the Founding Member of the society New Horizon which, later in the year 1973, was
converted into Standing Conference of Public Enterprises (SCOPE). Under his leadership,
SCOPE gradually increased its activities to play a useful role for the growth of public
sector. Shri Fazal studied at the Allahabad University and later at the London School of
Economics. He served in Government of India in various capacities. He was appointed Secretary of the Industrial Development Department and was later the senior-most
Member of the Planning Commission 1980-85. He served in the Planning Commission as
its senior-most member from April 1980 till January 1985. He was also the Chairman and
Managing Director of EPI and the Founding Chairperson of Hughes & Hughes Chem Ltd.
In 1999, he was appointed the Governor of Goa and later the Governor of Maharashtra.
SCOPE, the Public Sector Fraternity and KALEIDOSCOPE remember his contribution for
the growth of Public Sector.
33
SCOPE News
SCOPE Programme on Companies
Act & IFRS

Enactment of the new
Companies Act, 2013
has paved the way
for IFRS converged
Ind
AS
environment
as it has incorporated
various
provi-sions
compatible
with
the
requirements contained
in IFRS converged Indian
Accounting
Standards.
Further, in view of the
recent budget proposal
for adoption of Ind AS by
Dr. U. D. Choubey, DG, SCOPE (centre), Mr. R. P. Tak, CMD, CCI (left) and Mr. Rajkumar
S. Adukia, Chairman Ind AS Committee (IFRS), ICAI in the opening session of the
SCOPE Programme on Companies Act & IFRS.
Indian Companies from FY 2015-16 voluntarily and from FY 2016-17 on a mandatory

basis, there is an urgent need to create awareness on IFRS in India.
In the context of the above, SCOPE had organized a two day programmme on
Companies Act and IFRS on 25th & 26th August, 2014 at the SCOPE Convention
Centre. The programme was organized in collaboration with the Ind-AS (IFRS)
Implementation Committee of the Institute of Chartered Accountants of India.
Dr. U.D. Choubey, Director General, SCOPE, Mr. R.P. Tak, CMD, Cement Corporation of
India, and Member, SCOPE Executive Board, and CA Rajkumar S Adukia, Chairman,
Ind AS committee (IFRS) of the ICAI, and Program Director, addressed the participants
during the programme.
r. U.D. Choubey, Director

General, SCOPE, in his
address during the inaugural session said that the Indian
public sector companies were
well prepared to adopt the Ind AS
34
before the deadline as set by the

Honble Finance Minister in his
budget speech on 10th July 2014
(voluntary adoption from FY 1516 and mandatory adoption from
FY 16-17).
Dr. Choubey further added that

liberalization and open market
economy required corporate to
be more competitive and assimilate with world economic order
for better professionalization,
SCOPE News
governance, deliverability and image building.
He said that adopting
IFRS would enable them
to compete with multinationals throughout the
world.
Mr. R. P. Tak, CMD,
Cement
Corporation
of India, and Member,
SCOPE Executive Board,
in his address said that
the adoption of IFRS
would enormously benefit the commercial organizations, investors and
the regulatory bodies.
Dr. U. D. Choubey, Director General,

SCOPE said that the Indian public sector
companies were well prepared to adopt
the Ind AS before the deadline as set by
the Honble Finance Minister in his budget speech on 10th July 2014 (voluntary
adoption from FY 15-16 and mandatory
adoption from FY 16-17).
He further stated that reducing international differences in reporting standards by applying IFRS removes cross-border takeovers and acquisitions, and
gives better access to foreign capital markets and
investments.
CA Rajkumar S Adukia, Chairman, Ind AS
committee (IFRS) of
the ICAI, and Program
Director, gave the programme
perspective.
The other distinguished
faculty constituted of
CA Mohan R. Lavi, CA
Yagnesh M. Desai CA
Arpit Mundra and CA
Anand J. Banka. Nearly
70 participants from
member PSUs attended
the programme. Mrs.
Shashi Bala Mathur &
CA Prachi Jain were the
Program Coordinators
from SCOPE and the
Institute, respectively.
SCOPE Business Centre Provides Excellent

Video Conferencing Facility to PSEs
he prestigious Business Centre at SCOPE

Convention Centre in SCOPE Complex,
New Delhi is equipped with High Definition
picture quality Video Conferencing facility
having both IP and ISDN line for one or multi
point National and International Conferences.
In addition to this, a Multi functional device
(Photocopier) with additional facility of printer,
fax and scanner attached with Computer/
Laptop with Internet surfing has also been
provided at the Business Centre to the companies
holding conferences/meetings in the Auditorium
and different Halls/Chambers in the SCOPE
Convention Centre. The aesthetic dcor with

laminated walls, beautiful energy efficient LED
lights, comfortable sitting for eight persons and
sophisticated Sound System is enhancing the looks
of Video Conferencing Chamber.
For Booking and Technical Details, please
contact Mr. M. L. Marya Acting GM (Tech.) Mob.
No. 9313375238, Mr A. Zaman, Manager (HR) Mob.
No. 09868502306 and Mr. Niyamatullah, Engineer
(Elect), Mob. No. 09312062098 Standing Conference
of Public Enterprises, Ist Floor, Core No. 8, SCOPE
Complex, Lodhi Road, New Delhi-110003. Phone:
Ph: 24360101 & 24361747 Fax:011-24361371.
35
Conference Facilities at SCOPE Convention Centre

The centrally air-conditioned SCOPE Convention Centre at SCOPE Complex, Lodhi Road,
New Delhi provides excellent conference facilities to PSEs, Govt. Departments, Autonomous
Bodies, Institutions/NGOs etc. The Auditorium and other Conference Halls are equipped with
projector and screen facilities, sound & light control room with recording & P.A. facility, etc.
Details of the capacity of the Auditorium and other Halls, which are available on nominal tariff
are given below.
Auditorium
The chamber having capacity of 92 persons (86
Nos. Chairs + 6 Nos. Chairs on Dias) equipped with
mikes on dias, tables & podium.
Bhabha Chamber
The Auditorium having capacity of 310 persons (300

Chairs + 10 Nos. Chairs at stage) capacity equipped
with mikes on dias and podium on stage.
Mirza Ghalib Chamber

The chamber having capacity of 44 persons (24 Nos.
Chairs on round table and 20 Nos. Chairs on sides)
equipped with mikes on dias, tables & podium.
Fazal Chamber
The chamber having capacity of 108 persons (102

Nos. Chairs + 6 Nos. Chairs on Dias) equipped with
mikes on table, dias and podium.
Tagore Chamber
The chamber having capacity of 25 persons (15 Nos.

Chairs on round table and 10 Nos. Chairs on sides)
capacity with board room type sitting arrangement
equipped with mikes.
36
Business Centre
Annexe II
The Business Centre having capacity of 7 persons

equipped with multi point Video Conferencing
System (1+3), at three locations at a time for National
& International both.
The Annexe-II having capacity of 25 Persons.
Tansen Chamber at UB
Banquet Hall
The banquet hall having capacity of 500 Persons for

the purpose of lunch & dinner. Sitting arrangement
could be done for 90 persons.
The Tansen Chamber having capacity of 50 persons

having stage and podium.
Amir Khusro Chamber at UB
Annexe I
The Annexe-I having capacity of 25 Persons.
The Amir Khusro Chamber having capacity of 50

persons having facility of stage and podium.
For Booking & Tariff details please contact

Mr. A. Zaman, Manager(HR), SCOPE
1st Floor, Core No. 8, SCOPE Complex, 7 Lodhi Road, New Delhi - 110003
(M) 9868502306, (O) 24361747 Fax: 011-24361371 Email: zaman.scope@gmail.com
37
Conference Facilities at SCOPE Minar Convention Centre

SCOPE Minar, an architecturally conceived in the form of two high rise curvilinear tower blocks sitting on a four
storey circular Podium Block, is strategically located in Laxmi Nagar District Centre, Delhi -110092 and housing
around 40 PSEs of repute. It is one of the known buildings of East Delhi. It has a very size Reception Foyer giving
ambience look inside the building. There is a green environment all around the SCOPE Minar with large size
planters all around. The building is also having state of art Convention Centre, comprising four halls i.e.
Convention Hall
Meeting Hall
A large sized Convention hall having sitting capacity of 300 delegates. Various seminars, training programmes, presentations, get to gather etc. are conducted in Convention Hall. It provides ambient and
peaceful environment for the programmes.
Meeting hall having U shaped table, with a meeting capacity of 65 delegates.Most widely used for
small size meetings and training programmes,
group discussion, power point presentations etc.
Banquet Hall
VIP Lounge
VIP Lounge having sitting capacity of 60 delegates.

The executives and higher level officers, Directors,
CMDs can use it as waiting lounge also.
A new beautiful Banquet Hall with latest specification of engineering has been created in SCOPE
Minar. It has attached huge kitchen and washrooms
facility. Around 300 persons can dine in the banquet
hall including sitting of 50 persons.
There is a wide space for vehicle parking that cater for a capacity of 700 cars, including the newly built good quality Banquet Hall
wherein 300 delegates can comfortably dine at a time, makes it special to deliver an all-round conducive meeting environment .
For Booking & Tariff details please contact

Mr. Shubh Ratna, SE(C), SCOPE Minar & Mr. Gopal Bharti JE(C)
(M) 9873398242, (O) 011-22458176, 22458178, Email: shubhratna@yahoo.co.in
38
Book Review
Public Service Ethics

Needed for Good Governance
Dr. B. B. Goel,
ood Governance is indispensable for a democratic

set-up. It requires efficient institutions, good delivery
mechanism and supportive legislation. Its effectiveness hinges
on transparency and accountability of ruling elite and public
services. Besides, morality acts
as a doubled-edged weapon both
in removing greed, exploitation,
abuse of power and instilling
confidence and trust of citizenry
in Government. In this sense,
Good Governance is essentially
a moral enterprise. The book under review by B.P. Mathur, a seasoned administrator, scholar and
eminent trainer, covers various
facets of administration with emphasis on Public Service Ethics in
governance process. It attempts
to explain that efficient and accountable public services having
ancient ethos can turn around
India and look for better days.
The
Introductory
provides
glimpses of Rise of Modern State
with divergent philosophies.
Neoliberal policies pursued by
advanced countries (1980s) led
to downturn of their economies
(2008). Resultantly, State became
a Big player in the lives of citizens. In India where constitutional liberalism holds the key, Good
Governance can unleash creative
potential of people and enhance
quality of life. Surprisingly, the
author evades highlighting the
positive contribution of Indian
Prof. of Public Administration (Retd.), Punjab University
Such values (satya, dharma,

shanty, prem, ahimsa, nyaya and
swatantrata) need to be religiously practiced. Character building for national reconstruction
is suggested thereafter. Quoting
Sanskrit
couplet
.when
character is lost, everything is
lost, Mathur takes recourse to
Bhagavad Gita prescribing 26
qualities to become perfect.
Virtues like trustfulness, honesty,
self-discipline, fearlessness, faith,
spirit of service, etc., significantly
contribute in character building.
Ethics for Governance

Reinventing Public Services
Dr. B. P. Mathur,
IA&AS (Retd.)
Pages: 396
Routledge, Delhi, 2014
democracy and brands it as a

Bandit democracy. Its manifestations comprise disillusionment
with governance system, lust for
power, agenda on caste/ communal considerations, missing ethics
and morality, irresponsible ruling elite, etc. These realities pose
a challenge to policymakers to
lead the country towards Good
Governance.
Deeply pained with declining

values, the author favours inculcating Indian ethos at all levels.
Unlike western materialistic culture guided by economic orientation, Indian culture is predominantly spiritual and focuses on
sympathy, empathy and brotherhood. Substantiating arguments
from Epics viz. a king has to
be rajrishi and rule as per rajdharma a moral revolution is
required to ensure corrupt-free
politic and legal framework for
punishing wrongdoers holding
public offices.
Fundamental values for humanity are the bedrock of any civilized society. Originating from
the mind and aspirations, these
affect attitudes, preferences and
intelligence. Values are first personal, then familial and culminate into societal values. Besides,
all religions propound values for
moral regeneration of mankind.
Referring to Indian polity, the author avers that emphasis ought

to be on social democracy than
political democracy. Highlighting
indispensability of democracy,
a reference is drawn to Churchil
(democracy is the worst form of
Government except those other
forms which have been tried).
His observations that leadership
39
SCOPE News
has shown no inclination to bring
reforms can be accepted only
partially. Democracy has matured while power and energy
of human capital and I.T. have
been the driving forces for success. However, the country has
to rise to its full potential and
make a dent on problems of poverty, employment, illiteracy and
productivity.
The aggressive tone is again
visible on the current state of
economy forgetting that India
was among the few countries to
withstand global bubble (2008).
Notwithstanding that quality of
life is still to bloom, wrong economic policies and governance
failure is a cause for concern.
Inability of anti-poverty programs for skill upgradation, capital intensification at the expense
of creating employment, inadequate infrastructure, worsening
trade deficit, etc. need prompt
attention.
Mathur justifiably argues that
we blindly adopt western models for solving ills. This results
in looming ecological disaster,
economic inequality and relentless consumerism. Faced with
GDPs fallacy that it neither measures sustainability of growth
nor quality of life. While UNDP
developed HDI, World Watch
Institute has recently devised the
Genuine Progress Indicator (GPI)
across the economic, ecological
and social domain to measure
sustainable development. This
matrix deserves befitting trial.
Explaining the Gandhian ideology (based on ethics and individual welfare), Trusteeship envisages an individual to look after
not only his interest but also the
interests of others. Following the
footprints of Buddha, a Middle
40
Path judicious mix of free market and socialist ideology is

rightly suggested. His advice
to Big Business to plough back
profits into Business for socially
productive activities CSR is
timely and relevant.
The most brilliant part relates
to Public Administration. It is
hard to find a single line appreciating contribution of public
services in an independent era.
Instead, scathing criticism surfaces from colonial hangover
and snobbish behavior of bureaucrats. Elaborating deteriorating standards of services and
signs of deadwood, celebrities
even argue for the abolishment
of IAS. Similarly, instability of
Governments in 1970s brought
sycophancy, politicians patronizing bureaucracy and relegating
Deeply pained with declining values, the author

favours inculcating Indian
ethos at all levels. Unlike
western materialistic culture guided by economic
orientation, Indian culture
is predominantly spiritual
and focuses on sympathy,
empathy and brotherhood.
Substantiating arguments
from Epics viz. a king has
to be rajrishi and rule as
per rajdharma a moral
revolution is required to
ensure corrupt-free politic
and legal framework for
punishing wrongdoers
holding public offices.
merit and specialization a casualty. While resolute leadership can

break the hold of vested interests, reinventing and refurbishing public services into responsive administration is a must. It
calls for orientation of services
towards specialization/ professionalism, competition from both
within and outside (25% ceiling)
and institutional mechanism to
reward for proven ability/ keeping rascals out.
Mrs.Thatchers NPM reforms
transformed unresponsive bureaucracy into a lean, enabling,
and customer-oriented organization.
Subsequently,
the
Executive Agencies, the Citizens
charter and the Public Service
Agreements brought substantial
changes. The New Zealand model stresses on outputs/ results to
evaluate performance. In USA,
the GPR Act focuses on outcomes.
The Japanese autonomous agencies manage personal matters. In
brief, Public Service reforms (autonomous agencies, performance
contracting and client focus) need
adaptation in India for building vibrant and citizen-friendly
services.
Discussion
on
Public
Management is, however, more
of repetition/ elaboration of
Reinventing Services. Here, issues like repealing Article 311, 360
degree performance appraisal,
Civil Service Authority, contracting out and inculcating habits to
trust public servants are emphasized. Besides, the NPM philosophy and Agencification model
for revamping administration is
supported. But, his observations
that Performance Monitoring and
Evaluation System introduced by
the Government, has made practically no impact and lacks evidence. In fact Results Framework
SCOPE News
Document, monitored by an independent Task Force, is rated
by international observers as the
best in the world.
A brilliant exposure on ethical
framework is portrayed Kant
echoing Gita do your duties for
the sake of duty and Utilitarians
expounding greatest good of
greatest number. History testifies that ideals bestowed under the Preamble to Indian
Constitution are achievable if
public office holders have strong
ethical moorings. Further, in the
wake of adherence to NPM, public servants have to behave ethically in maintaining peoples trust
UK Civil Service Code enjoins
civil servants to follow pride,
passion, pace and professionalism in practical life. The Office
of Government Ethics (USA) has
devised 14 principles (employees not to use public office for
private gain and act impartially).
Australia is a repository of adhering to fundamental values more
than legislation.
In India, various Committees/
2nd ARC have reiterated for upholding the highest standards of
ethical conduct (integrity, impartiality, commitment, accountability, exemplary behavior). But, as
usual, the Conduct rules provide
escape routes for unscrupulous.
It requires well-structured institutional support and ethics infrastructure for inspiring public
servants to realize vision and purpose in carrying out their duties.
Besides, the author beautifully
suggests changes in work culture
by reminding Gita: one should
perform duties diligently and piously, without expecting results.
The last part on combating corruption and leadership is lively.
Corruption, an abuse of entrusted power for private gain,
In todays world, problems are so complex and information

flow so massive that leadership has to be perceived as a
collective process than an individual enterprise. However,
discarding hereditary stratification and affording opportunities to meritocracy, stirs ambition and inspires emulation. Such leaders (like Modi), setting aside personal ambition, work for public good on Gitas mantra: excellence in
work is Yoga. Dr. Mathur is optimistic that if civil servants
have such a cosmic feeling, India shall soon seize the opportunity of having world class public services.
culminates into nepotism, money

power in politics, black economy,
money laundering, etc. It is coercive than collaborative corruption that compels citizens to pay
bribes even for basic services.
Mathur vividly highlights the
hallmark of corruption right from
Bofors to latest scams. Corruption
thrives as it is a low-risk highprofit business. Minimal conviction rate, bureaucratic jungle of
rules, electoral process impinging
mockery of democracy, MNCs
playing into politics, etc., manipulate peoples aspirations. The
crusade against corruption (Lok
Pal Act) awaits tangible results.
Accordingly, this menace can be
arrested by restoring time-tested
Indian ethico-spiritual view of life
simple living and high thinking.
It requires multipronged strategy
on the part of everybody to lead
moral revolution to get its value
system right.
On the point of Leadership,
the
author
asserts
Public
Administration in virtual shambles and abandons the path
of cherished values inherited
from Indian culture. Stalwarts
like Nehru, Patel, Shastri or
Mrs. Gandhi, with their visionary outlook, laid foundations of
resurgent India. Their rapport

with civil servants in shaping
Indian destiny was above board.
Short sightedness, dynastic rule,
lust for power, lack of character,
etc., resulted in all round decay.
In todays world, problems are so
complex and information flow so
massive that leadership has to be
perceived as a collective process
than an individual enterprise.
However, discarding hereditary
stratification and affording opportunities to meritocracy, stirs
ambition and inspires emulation.
Such leaders (like Modi), setting
aside personal ambition, work
for public good on Gitas mantra:
excellence in work is Yoga. Dr.
Mathur is optimistic that if civil
servants have such a cosmic feeling, India shall soon seize the opportunity of having world class
public services.
Overall Dr. Mathur deserves
kudos for diligently bringing a
thought-provoking book lucid
in style, with percepts and examples drawn from Epics, literature and writings of intellectuals,
and sensitizing thinktanks and
citizenry to ponder over viable
innovative reforms for steering Public Services on the path of
Good Governance.
41
42
Steel Minister Visits SAILs Research Wing

Echoes PMs Vision: Make in India-Made in India
r.
Narendra
Singh
Tomar, Union Minister of Mines, Steel,
Labour and Employment and Mr.
Vishnu Deo Sai, Union Minister
of State for Mines, Steel, Labour
and Employment, visited RDCIS
Ranchi on 23rd August, 2014 to
review the status of R&D and lay
thrust on proprietary research
in the organization. The Honble
Minister addressed a large gathering of RDCIS collective and
conveyed to them the thrust of
government on research. The
visiting dignitaries were accompanied by Mr. C. S. Verma,
Chairman, SAIL, and Mr. S. S.
Mohanty, Director Technical.
Mr. Tomar inaugurated a Heat
Hardening Pelletisation Unit at
SAIL Research & Development
Centre for Iron & Steel (RDCIS),
Ranchi. This unit shall facilitate
in resolving the problems being
faced by Indian steel industry for
beneficiation of iron ore. SAIL can
now develop relevant technology
Mr. Narendra Singh Tomar, Union Minister of Mines, Steel, Labour & Employment
(centre), Mr. Vishnu Deo Sai, MoS for Mines, Steel, Labour & Employment (on right)
and Mr. C. S. Verma, Chairman, SAIL at RDCIS, Ranchi.
parameters for producing heat

hardened pellets from geothite/
hematite iron ores.
While addressing the SAIL
collective, Mr. Tomar said, Steel
industry is the core industry
which reflects the technological status of the country and for
a self-reliant India, PMs vision
of Make in India-Made in India
needs to be internalised by the
erudite researchers and technologists of SAIL and Steel sector.
Steel Majors Form Indian Steel Association

Mr. C. S. Verma, Chairman, SAIL elected as First President
r. C. S. Verma, Chairman,
SAIL, was unanimously elected as the first President of the
Indian Steel Association.
He thanked the members for reposing
confidence in him and electing him as
the first President of the Indian Steel
Association and mentioned that he
looked forward to working along with
(From left to right) Mr. C.S.
the other members so that the Indian
Verma, Mr G. Mohan Kumar,
Dr. Edwin Basson and Mr. steel industry plays a catalyst role in the
economic growth of the country.
Sajjan Jindal.
Honble Minister of State

for Mines, Steel, Labour and
Employment, Mr. Sai said that the
per capita consumption, which
is currently hovering around 60
kg, must be raised to the level of
250 kg. He opined that to achieve
this objective, the production of
rural sector niche products must
be accentuated so that the much
needed rural infrastructure also
gets a boost.
Elaborating on SAILs R&D plan,
Mr. C.S. Verma, Chairman, SAIL,
said, We plan to gradually increase the R&D spend to 1% of
gross sales from the current level
of 0.3%. The current level of 0.3%
is the highest among Indian Steel
producers. He further added that
SAIL is undertaking Technology
Missions and High Impact
Projects at the corporate level.
Different units of biological waste
water treatment plant for Coke
Oven Effluent treatment were
also inaugurated on the occasion.
It will help SAIL and Indian steel
industry to conform to the stringent norms of environment.
43
44
PSEs Celebrate
68th Independence Day
Independence Day Celebrations at MCL,
Burla and Sambalpur
Independence Day was celebrated by children at

Bal Bhawan, NTPC Township. The President of Bal
Bhawan unfurled the National flag and addressed
the children on the occasion. Employees of NTPC
and their family members were also present on the
occasion. A colourful cultural programme was also
presented by the children of Bal Bhawan.
CWC Celebrates Independence Day
Mr. Animesh Nandan Sahay, CMD, MCL, hoisting the flag to

mark the start of Independence Day celebrations.
The 68th fervour was much visible at the MCL

Grounds, Anand Vihar, Burla, Sambalpur, on
15th August, 2014. The flag was hoisted by Mr.
Animesh Nandan Sahay, CMD, MCL, after which
he inspected the parade comprising of platoons of
Scouts, Guides and NCCs of different schools of
Sambalpur and Burla. CMD, in his address to the
employees of MCL, congratulated the MCLians
for their performance in the year 2013-14. Stressing
on the importance of Coal in the energy needs of the
nation, he impressed upon all the employees to rise
to the occasion to meet the responsibility of higher
coal production that has been laid on its shoulders.
Independence Day Celebrations at Bal

Bhawan, NTPC Township, Noida
Mr. B. B. Pattanaik, MD, CWC, unfurling the national flag.
Central Warehousing Corporation celebrated the 68th

Independence Day in its corporate office at New Delhi on
15th August, 2014, with zeal
and patriotic fervour. Mr. B.
B. Pattanaik, MD, CWC, unfurled the national flag in the
presence of functional directors, officials of the CWC and
their families.
On this occasion, a badminton
tournament was also organized and prizes were distributed amongst the winners.
MDL Celebrates 68th

Independence Day
The President of Bal
Bhawan unfurling
the National flag.
Mazagon
Dock
Limited
(MDL) celebrated the 68th
Independence
Day
with
RAdm R.K. Shrawat,

CMD, MDL, hoisting the
National flag on the 68th
Independence Day celebrations in the North Yard.
45
46
great fervour on its premises. Rear Admiral R. K.

Shrawat, CMD, MDL, hoisted the flag and inspected the guard of honour presented by the CISF, Fire
& Safety and Security contingents on the occasion.
The ceremony was attended by MDL Directors,
CVO and other senior officials along with their
families.
The CISF unit put up a short weapons handling
drill-cum-competition which was greatly appreciated by the audience.
BHEL Celebrates 68th Independence Day
after unfurling the National Flag in the presence

of Mr. N. K. Nanda, Director (Technical), Mr. S.
Thiagarajan, Director (Finance), Mr. S. Bose, Director
(Production), Mr. S. K. Das, Director (Commercial),
Mr. Rabindra Singh, Director (Personnel), employees and their family members congratulated one
and all for their dedicated work and commitment
for keeping the companys performance at its peak.
He appreciated their efforts especially for achieving
production and dispatch of iron ore (more than 30
million tonnes) for the year 2013-14, which is the
highest since inception of the company.
Mr. Kothari said the country has grown significantly in the last 68 years of Independence mainly in the
fields of agriculture, science, literacy, engineering,
medical and sports. The public sector enterprises
at the time of Independence were considered as
Temples of Modern India. Today, these enterprises
play a pivotal role in the economic development
of the country and the contribution made by these
Public Sector Enterprises is about Rs. 1,65,000 crore
to the Central Exchequer.
Mr. R. Krishnan, Director (HR), BHEL addressed

BHEL employees on the occasion of Indias 68th
Independence Day.
Independence Day Celebrations at NMDC

NMDC celebrated 68 Independence Day at its
Corporate Office at Hyderabad and its various
units.
th
Mr. Narendra Kothari, CMD, NMDC Limited,

1
2
Mr. Narendra Kothari, CMD, NMDC Limited, addressing
the employees in the presence of Mr. N. K. Nanda, Director
(Technical), Mr. S. Thiagarajan, Director (Finance), Mr. S. Bose,
Director (Production), Mr. S. K. Das, Director (Commercial), Mr.
Rabindra Singh, Director (Personnel), employees and their
family members.
The celebrations concluded with prize distribution

to the winners of various sports and cultural events
conducted by the Company on the occasion.
IndianOil Day Celebrated with Gusto at

IndianOil R&D Centre
Mr. B. P. Das, ED Incharge,
R&D Centre, led the grand celebrations to mark the IndianOil
Day. Speaking on the occasion,
Mr. Das lauded the role of Team
IndianOil R&D in building this
institution into a world-class
research centre encompassing refining technologies, biotechnology,
petrochemicals,
nanotechnology, material sciences, engine and vehicle testing, pipeline research as well
as state-of-the-art analytical
facilities.
On the occasion of the IndianOil
Day, over 110 IndianOil inventors/ innovators were felicitated under the Intellectual
Property (IP) incentive scheme. Launched in 2012, the
Intellectual Property incentive
Mr. B.P. Das, ED

Incharge, R&D
Centre, speaking on
the occasion of the
IndianOil Day.
47
48
scheme aims to reward the individuals for their

contribution in the generation of innovative ideas
for new products and processes, thus enhancing the
IP wealth of the organization.
AAI Celebrates Independence Day

On 15th August, 2014 as part of 68th Independence
Day, celebrations on at Srinagar International
Airport, Mr. S. Raheja, Member (Planning), Airports
Authority of India, hoisted the national flag.
Various agencies, viz. Airports Authority of India,
J&K Police, CRPF, Airlines, IndianOil, commercial,
concessionaries and passengers participated in the
celebration. The flag hoisting was the inauguration
of the newly installed all weather illuminated monumental National Flag which is the first of its kind
installed at AAI has Managed Airports across the
country. Further, in its first phase, AAI identified
seven airports where such flags will be installed.
Mr. P. Sudhakar, CMD, ECIL, hoisting the national flag on the

occasion of Independence Day Celebrations at ECIL.
the function were Mr. Kishor Rungta, Director

(Finance), Mr. V.S.B. Babu, Director (Personnel),
Mr. A. Rajeswar Rao, General Secretary, ECIL, Dr.
P Venu Babu, Secretary, ECIL Officers Association
and, staff and workers union. Mr. Sudhakar, in his
Independence Day message, highlighted ECILs
achievements in the recent past. He urged the employees to increase focus on homegrown technologies and increase productivity and competitiveness.
The students of Atomic Energy Central School - 1
presented a cultural programme comprising of patriotic songs and dances. The highlight of the occasion was the dance by the school children in depicting the diversity of India. They drew the applause
and appreciation of the large gathering.
Mr. S. Raheja, Member (Planning), Airports Authority of India,

hoisting the all weather illuminated monumental National
Flag at Srinagar Airport flag.
The high mast National Flag is 30.5 meter high. The

flag, with dimensions 20 feet by 30 feet, is 100%
knitted polyester with reinforced super strong nylon webbing on all three sides with rope and toggle
sleeve. The National Flag shall remain hoisted 24 x 7
and shall be illuminated during night time with metal halide luminors of 400 watt focusing on the flag.
Regularisation Process of Contract

Workmen Commenced CMD, NLC
The daylong celebrations commenced with the
garlanding of Mahatma Gandhi bust at Township
Administration Office premises by Mr. B. Surender
Mohan, CMD, NLC. Later, he hoisted the National
flag at Bharati Stadium and inspected the ceremonial parade. He also accepted the guard of honour
Independence Day Celebrations at ECIL

Electronics Corporation of India Limited (ECIL),
celebrated the 68th Independence Day with patriotic fervor and enthusiasm. Mr. P Sudhakar, CMD,
ECIL, hoisted the National flag at the ceremonial
function held at the factory main gate and inspected the Guard of Honour presented by the CISF
contingent.
Among
the
dignitaries
who
participated
in
Mr. B. Surender Mohan, CMD, NLC Ltd, inspecting the ceremonial parade at the 68th Independence Day celebrations at
Neyveli.
49
50
presented by Central Industrial Security Forces,

NLC security personnel, Home Guards, Scouts and
Guides, NSS volunteers and schools and college
students.
Mr. Mohan, while addressing the Independence
Day Celebrations-2014, announced, The process
of regularization of Contract Workmen in NLC in
the light of orders of Honble Supreme Court read
along with the terms of MoU reached with the
Contract Workmen Unions has commenced with
the verification of certificates from 11.08.2014.
Mr. Antony, Chairman, Cochin Port Trust, addressing the

employees and their families on the occasion.
contingent. Employees and their families were also

present on the occasion.
ITI Celebrates 68th Independence Day

Employees of ITI Ltd celebrated the 68th
Independence Day at Corporate Office with traditional gaiety. Mr. K. L. Dhingra, CMD, ITI Ltd.,
delivered the Independence Day message at the
Corporate Office, Bangalore. Employees and their
family members were also present on the occasion.
Mrs. Swarnakumari Surender Mohan and Mr. Mohan, honouring the senior-most worker of NLC Mr. Basheer and his
spouse Mrs. B. Feredha Begam on the occasion.
During his address, CMD also mentioned that NLC

continues to contribute towards the Nations progress
by supplying electricity, the prime mover for the economic growth. He complimented the workmen for
their sincere contribution and achievements both in
production and financial fronts, during the year 201314. He further said, Concentration must not only be
in the key areas to maximize productivity, but also on
the high standards of Safety of Men, Materials and
vital installations. Mr. I. Basheer, Service Worker,
Mine-IA, the senior-most worker of the company
and his spouse Mrs. B. Feredha Begam were honoured by Mrs. and Mr. Surender Mohan during the
celebrations. NLC directors Mr. Rakesh Kumar, Mr.
M.S. Ravindranath, Mr. S. Rajagopal, Mr. S. Boopathy
and Mr. Shivraj Singh, CVO, NLC, along with their
spouse participated in the function and distributed
the prizes.
Cochin Port Trust Celebrates

Independence Day
Mr. Paul Antony, Chairman, Cochin Port Trust,
hoisted the National Flag on 15th August, 2014 in
the lawns of the administrative building of Cochin
Port Trust and inspected the parade by the CISF
Mr. K. L. Dhingra, CMD, ITI, salutes the National Flag after unfurling it amidst the singing of the National Anthem
As Chief Guest of the function at ITI Vidhya Mandir

School, Mr. K.L. Dhingra, CMD, ITI, unfurled the
National tricolour flag amidst cheers from school
students. Large numbers of children belonging
to ITI schools were present to celebrate a colorful Independence Day function. Mr. Dhingra was
impressed by the performance of the ITI School
in bringing excellent results not only in academic
fields but also in extracurricular activities. The students participated with enthusiasm in the celebration and exhibited their talent through a variety of
cultural shows. The other highlights of the function
included a colorful march-past by the students and
the distribution of awards to students for their exemplary performance in various disciplines including sports.
51
52
PSEs Ink MoU

Signing of MoU between IREDA and JICA
Indian
Renewable
Energy
Development Agency (IREDA)
has signed the agreement with
Japan International Cooperation
Agency (JICA) for availing the
Line of Credit of JPY 30 billion
from JICA. The agreement was
signed by Mr. K. S. Popli, CMD,
IREDA, and Mr. Shinya Ejima,
Chief Representative, JICA, in
New Delhi recently in the presence of senior officials of JICA,
MNRE and IREDA. Under the
agreement, IREDA shall utilize
the funds for financing renewable energy based power projects
in India. The line of credit from
JICA shall enable IREDA to provide funding to a large number of
renewable energy projects across
the country at competitive terms
including the longer tenure of
loan which shall also support in
the overall endeavor towards a
low carbon economy. The company has cumulatively disbursed
an amount of Rs.14,319.76 cr uptill March 2014. IREDA has been
raising resources from various
CWC Signs MoU with ICICI

Bank
bilateral/ multilateral agencies

in addition to raising resources
from domestic sources by way
of taxable and tax-free bonds to
augment its resource base.
KAPL Signs MoU with BBMP

for Park Maintenance under CSR
Karnataka Antibiotics & Pharmaceuticals
Limited
(KAPL),
Bangalore, under its Corporate
Social
Responsibility
(CSR)
Initiative, has entered into a
Memorandum of Understanding
(MoU) for Park Maintenance
near its corporate office, i.e. park
opposite to Karnataka Soaps &
Detergents Limited (KS&DL)
factory. The MoU was received
by Mr. K.M. Prasad, MD, KAPL
from Mr. Anantha Kumar,
Minister for Chemicals and
Fertilizers,
recently.
KAPL
has also undertaken Hygiene
Awareness programmes among
girl students in the backward district of Chithradurga, Karnataka,
under its CSR initiative.
Central Warehousing Corporation

(CWC) signed a Memorandum
of Understanding (MOU) with
ICICI Bank recently at the CWCs
corporate office. As per the MOU,
CWC will act as a Collateral
Manager and the bank will finance the CWC customers against
the
Negotiable
Warehouse
Receipts (NWRs) issued by CWC
on deposits of their agriculture
produce for scientific storage.
The MOU was signed by Mr.
R.N. Meena, General Manager
(Commercial), CWC, and Mr.
Avijit Saha, General Manager,
ICICI Bank, in the presence of
Mr. B. B. Pattanaik, MD, CWC,
functional directors of CWC and
other senior officials of CWC and
the bank.
Addressing the occasion, Mr.
Pattanaik stated that CWC, which
has already registered its 175
warehouses with Warehousing
Development and Regulatory
Authority (WDRA), is encouraging the farmers for using its warehouses by extending 30 percent
rebate in its storage charges. He
further stated that during 201314 these warehouses issued 4539
number of NWRs for stocks valuing Rs. 289 cr and around 2500
number of farmers and other
customers availed credit/ finance
facilities through various banks
against the pledge of these NWRs.
53
54
KIOCL Limited opens up Export
IOCL Limited (formerly

Kudremukh Iron Ore
Company Limited) being a 100 percent EoU Unit,
is a Mini-Ratna Category-I
profit making Central PSE
has expertise in Mining and
Beneficiation of iron ore for more
than 25 years. It had operated the
most sophisticated Mechanized
Magnetite Iron Ore Mine to produce 22.5 million tons of Run of
Mines (ROM) per annum with
state-of-the art beneficiation technology to produce 7.5 million
tons of iron ore concentrate in
the country till the end of 2005.
KIOCL stopped mining operations at Kudremukh with effect
from 1st January, 2006, as per
the order of Honble Supreme
Court, as the area was declared
a National Park region. KIOCL,
however, continued to operate its
Pellet Plant in Mangalore with a
capacity to produce 3.5 million
tons per annum as a value addition to iron ore concentrate.
Mr. Malay Chatterjee, CMD,
KIOCL, informed that due to
the Kudremukh Pellet prices not
being competitive in the world
market (since the company has
no captive mines and has been
sourcing iron ore from NMDCs
Mines at Chhattisgarh) they are
incurring huge logistic cost coupled with the levy of distance.
Due to the Based Charge (DBC)
by Railways, the recently imposed 5 percent export duty and
the pellet prices not being competitive in the world market,
KIOCL has not been exporting it
in recent past. However the company, through its efforts in economizing the cost and making the
Mr. Malay Chatterjee, CMD, KIOCL addressing the 38th AGM of the company.
price internationally viable and

competitive, was able to export a
cargo of 48,309 DMT by MV Port
Nelson which sailed from NMPT
on 25th August 2014 to M/s. Frost
International Pte Ltd., China.
Mr. Chatterjee, being vibrant and
optimistic, was extremely upbeat
to state that the company, after a
span of 3 years, has opened up
the export with its first shipment
of pellets to China. Opening up
its export capability, KIOCL will
retain its 100 percent EOU status, continue to earn foreign exchange for the Nation and in turn
enable the company to minimize
the fixed cost in absence of the diminishing domestic market.
38th AGM of KIOCL

The 38th AGM of KIOCL recently concluded in Bangalore.
Addressing the shareholders,
Mr. Chatterjee, highlighted the
global and domestic scenario
particularly touching upon the
Iron & Steel sectors and Pellet
Industry. Mr. Chatterjee also
highlighted the operational performance of the company which
grew by 35 percent on Y-O-Y basis

with production and dispatch of
1.710 MT and 1.615 MT of pellets,
respectively. Companys financial
performance has also improved
with growth of 32 percent in
gross income at Rs. 1532.37 cr and
PBT of Rs. 61.40 cr vis--vis Rs.
32.34 cr, PAT of Rs. 39.94 cr vis-avis Rs. 31.05 cr thereby recording
a growth of 29 percent over the
year 2012-13.
Mr. Chatterjee mentioned that
the company is exploring new
markets for sale of pellet and
has signed MOU with APMDC
and RINL for exploration and
exploitation of iron ore deposit
in Andhra Pradesh State. The
exploration activities are expected to commence shortly in
the PL area. The Company is expecting an award of the O&M
contract for NMDCs upcoming 1.8 MTPA beneficiation and
1.2 MTPA Pelletisation Plants
at Donimalai. He added that
the company is in active discussions with SAIL for setting up of
2 MTPA pelletisation plant for
SAIL at Bokaro Steel Plant premises on BOO basis.
55
56
BHEL Develops Fuel Flexible Supercritical Boilers a Major Step towards Managing the Uncertainties Regarding Coal
harat Heavy Electricals

Limited (BHEL), has been
designing boilers for the past
30 years and has extensive
experience of designing boilers
fired with indigenous as well
as imported coals exhibiting
wide variations in properties.
Based on BHELs extensive inhouse experience of working
with a great variety of indigenous
as well as imported coals over
the years, BHEL has developed
a new boiler with fuel flexibility
of indigenous & imported coals.
BHEL is now ready to offer the
new boiler design to overcome
these issues.
on a unique combination of indigenous and imported coals

with a capability of firing both
extremes of 100% domestic coal
as well as 100% imported coal. It
will provide developers with the
much needed freedom regarding
the ratio of blending as well as
the characteristics of the domestic
and imported coal to be blended.
This enables the boiler to work
over the entire range of blending
ratios and would protect the project developer against the vagaries
in coal availability, thereby providing him with an opportunity
to operate the plant throughout
the year.
This new boiler design is based
BHEL has an advanced state of
the art Coal Research Centre at its

Tiruchirapally Plant which will
be used to identify the unique
combination of blended coal after carrying out the analysis of
imported and domestic coal samples supplied by the customers.
The associated boiler auxiliaries,
also manufactured by BHEL, will
be designed to accommodate the
variation during firing of different type of fuels. Addressing todays environment where thermal
power plants are starved for fuel
and developers face severe uncertainties regarding the availability
of domestic and imported coals,
BHELs new design with fuel flexibility will be a major step forward in this direction.
CMD, REC Inaugurates Maitri Ghar - a Widows

Ashram in Vrindavan under CSR Initiatives
r. Rajeev Sharma, CMD,

Rural
Electrification
Corporation
Limited
(REC) inaugurated the Maitri
Ghar, an elderly widows
ashram in Vrindavan. This
ashram was set up on 16th
August 2014 under the Corporate
Social Responsibility (CSR) initiatives of REC in the presence
of Mr. B. N. Sharma, Joint
Secretary, Ministry of Power,
Government of India, Mr. P.
N. Singh, Managing Director,
Dakshinanchal Vidyut Vitaran
Nigam Ltd. of UP, Lt. Gen
Bhopinder
Singh
(Retd.),
President, Maitri, and other senior officials of REC and Maitri.
Maitri Ghar, in partnership with
Maitri, will be a home to 100
abandoned and destitute elderly
Mr. Rajeev Sharma, CMD, REC inaugurating the Maitry Ghar - a Widows Ashram in
Vrindavan.
widows who will live a life of respect and dignity. The ashram will
provide them essentials for life
including daily midday meals,
fruits, nutritional supplements,
clothing and healthcare. Maitri
Ghar will also serve as an Ageing
Resource Centre for research in
ageing as well as be a training
institute for elderly care, which

will empower the widow mothers with skill building and income generation opportunities,
ensure citizenship rights like
Aadhar Card, voter card, pension, etc. and educate them on
ways to access government-provided benefits.
57
NMDC Advt
58
Engineers
India Pays
Final Dividend to
Govt. of India
Mr. A. K. Purwaha, CMD, EIL handing over

the dividend cheque to Mr. Dharmendra
Pradhan, MoS (I/c) for Petroleum &
Natural Gas.
ngineers India Limited

(EIL) paid Rs. 70.12
crore as final dividend
to Government of India for the
financial year 2013-14. The dividend cheque was presented
to Mr. Dharmendra Pradhan,
Minister of State (I/c), Ministry of
Petroleum & Natural Gas, by Mr.
A.K. Purwaha, CMD, EIL, recently. On this occasion, Mr. Rajive
Kumar, Addl. Secretary, MoPNG,
EIL, functional directors, government director on EIL Board, senior officials of the Ministry and
Company Secretary of EIL were
also present. The final dividend is
@ Rs. 3.00 per share of the company (of the face value of Rs. 5/each). Government of India holds
69.37 per cent of the paid up share
capital of the company.
INS Kamorta commissioned
Indigenous Ship Equipped

with State-of-The-Art Equipment from BEL
NS Kamorta, the first of the four anti-submarine stealth corvettes, fitted with state-of-the-art equipment from Bharat
Electronics Ltd. (BEL) and built indigenously for the Indian
Navy by Garden Reach Shipbuilders & Engineers Ltd. (GRSE), was
commissioned by Mr. Arun Jaitley, Raksha Mantri, in Visakhaptnam
recently. Admiral R.K. Dhowan, Chief of Naval Staff, Vice Admiral
Satish Soni, Flag Officer Commending in Chief, East and Vice
Admiral A.V. Subhedar, Controller of Warship Production and
Acquisition, and other senior officers of BEL and GRSE were present at the occasion.
BEL has contributed to the indigenous construction of INS
Komarta by providing most of the major sensors and electronic
systems, including 3-D Surveillance Radar (Revathi), Active-cumPassive Integrated Sonar System (Humsa-NG), EW System Sanket,
Combat Management System, Fire Control System (Lynx), Ship
Data Network, Composite Communication System (CCS Mk III)
and Data Link (Link II). INS Kamorta is a significant step towards
Indias pursuit for self-reliance in indigenous warship building.
WAPCOS ranked as the Best performing PSU
APCOS
has
been
ranked as the Best
performing PSU-
Miniratna by India Today Group.

The award was presented to
WAPOS recently.
59
60
Union Defence Minister visits MDL
r. Arun Jaitley, Minister

of Defence, visited the
state-owned Mazagon
Dock Ltd. recently. He was briefed
on the progress of the Submarine
Project as well as the ongoing
warship building projects including P15A and P15B Class Stealth
Destroyers. During his yard tour
the Minister inspected the submarine building facility. MDL is
constructing Six Scorpene Class
submarines in collaboration with
DCNS of France.
With effective resource planning and innovative Project
Management, MDL has completed hulls of all six submarines.
The first three submarines are in
outfitting phase, and the systems
of the first submarine are being
Set to Work. The launch of the
first submarine is scheduled in
September 2015 followed by delivery in September 2016. MDL
is the only shipyard in the nation to have built conventional
submarines.
Mr. Arun Jailtely, Raksha Mantri (extreme right), inaugurating the Mazdock
Modernization Project by unveiling the plaque. RAdm R.K. Shrawat, CMD, MDL and
Admiral R. K. Dhowan, Chief of the Naval Staff, standing on the right of the Minister.
The submarine construction facilities at MDL have been modernised and augmented to world
class standards. With its highly
skilled and trained manpower,
MDL is now poised to build the
next generation submarines for
the Indian Navy.
During his visit to MDL, the
Defence Minister also inaugurated the Mazdock Modernization
Project (MMP). Once put to use,

the MMP infrastructure would
significantly enhance the warship and submarine construction capability of the shipyard.
The major components created
under MMP included a new Wet
Basin with level luffing cranes,
300 ton Goliath crane, module
workshop, stores building, shipyard transporter and Cradle &
Assembly shop.
PERSONALIA
Mr. Ravindra Nath

takes over as CMD
of NSIC Ltd.
Mr. N. K. Verma
takes over as MD of
ONGC Videsh Ltd.
Mr. P. C. Panigrahi
Director (Pers.) MCL
elected Regional
Vice-President
NIPM.
Mr. R. G. Rao
takes over as
Director (Finance),
Instrumentation Ltd.
Mr. Sidhartha Sur

takes over as
ED-Chief of Corporate
Planning, ONGC.
61
62
CMD, MOIL Briefs Steel Minister about Companys
Growth Plans
r. G. P. Kundargi, CMD,
MOIL, called on Mr.
Narendra Singh Tomar,
Union Minister for Steel, Mines,
Labour and Employment in New
Delhi recently. During the meeting CMD appraised the Minister
about MOIL, its future growth
plans and the technical capabilities and the vast experience
gained by the Company over the
last several decades in manganese mining and value addition
based on manganese ore.
He further informed that in order
to meet the growing demand for
manganese ore by steel industry,
MOIL has undertaken a number
of mining projects in its mines
which will not only help to sustain the existing production level
but also augment the same in
the coming years. In addition,
developmental work is also
under progress in respect of
the new areas in Nagpur and
Bhandara districts which will
help to expand the existing mines
as well as opening up of at leas t 4
new mines.
Mr. G. P. Kundargi, CMD, MOIL, welcomming Mr. Narendra Singh Tomer, Union
Minister for Steel, Mines Labour and Employment, New Delhi.
During the meeting, CMD sought

the help of the Minister with respect to expeditious clearance of
certain mining leases in the State
of Madhya Pradesh which are
vital for the growth and development of the mines located in
Balaghat district. The Minister
appreciated the efforts of MOIL.
MOIL PBT UP BY 20.81%

The Board of Directors of MOIL
Limited, approved the audited
Performance Excellence
Award 2013 to CMD, MOIL
r. G. P. Kundargi,
CMD,
MOIL has been awarded
PERFORMANCE EXCELLENCE
AWARD 2013 (INDIVIDUAL) by Indian
Institution of Industrial Engineering
(IIIE). The award has been conferred
based on the outstanding contribution made by him in leading the organization towards excellence.
The award was presented to Mr.
Kundargi by Padmabhushan Dr. A
Sivathanu Pillai, a Distinguished
Scientist and Chief Controller of the

Research and Development, DRDO,
Ministry of Defence and CEO&MD,
BrahMos Aerospace.
financial results of the Company

for the year 2013-14 in its
meeting held in New Delhi
recently. The Profit Before Tax
(PBT) during the year 2013-14
has been Rs. 769.33 cr. as against
Rs. 636.78 cr. during the previous FY 2012-13 which is 20.81
percent higher. The Profit After
Tax (PAT) has been Rs. 509.56 cr.
as compared to Rs. 431.72 cr. during 2012-13, reflecting a growth
of 18.03 percent. The Company
has achieved 5.60 percent growth
in Sales Turnover to Rs.1021.28
cr. during 2013-14 as against Rs.
967.12 cr. during 2012-13. On the
basis of audited figures, the MoU
rating for the year 2013-14 works
out to 1.09 which falls under
Excellent category.
Considering the excellent performance, the Company proposes
to pay a dividend @ 75 percent
for the FY 2013-14, out of which
40 percent interim dividend
has already been paid to the
shareholders.
63
64
MCL Awards Rs. 1 Lakh

each to 4 Odisha Women
Hockey Players
HEC Supplied
Crane -
The First Equipment

Installed upcoming Bar
& Rod Mill, BSP Bhilai
H
Mr. A. N. Sahay, CMD & Mr. J. P. Singh, Director Technical (Proj. & Plng.), MCL with
Women Hockey Players.
ahanadi
Coalfields
Limited (MCL), a subsidiary of Coal India
Limited, awarded one lakh rupees each to the women hockey
players of Odisha who brought
bronze medal for India in the
Junior Women Hockey World
Cup-2013 held at Germany.
Ms Nomita Toppo, Ms Nilima
Minz, Ms Anupa Barla, Ms

Deepa Grace Ekka and the
members of Team India that
won bronze in Junior Women
Hockey World Cup, held at
Germany, were felicitated at
MCL headquarters by Mr.
A.N. Sahay, Chairman-cumManaging Director, and Mr.
J. P. Singh, Director Technical
(Project & Planning).
EC supplied 20/5T span

33.5m EOT crane was
successfully
commissioned in the upcoming Bar &
Rod Mill (BRM) at Bhilai Steel
Plant, Bhilai. The crane has been
in-house manufactured by HEC
with only electric items and DSL
as the bought-out components.
The crane was inaugurated by
Mr. S. K. Pradhan (ED, Projects/
BSP). The project was executed
by HEC on turnkey basis under
the guidance of BSP team and
MECON as consultant.
This crane is the first equipment
commissioned in the upcoming
BRM under 7MT expansion programme of BSP. At present, the
crane will be used for equipment
erection and when the Mill would
be commissioned, it shall be used
as Service Crane.
NEEPCO Signs PIA with Govt. of Manipur
he
State
Government
of Manipur has signed
the Pre Implementation
Agreements (PIA) towards allotment of four Hydro Electric
Projects (HEP) namely, 51 MW
Tuivai, 60 MW Irang, 67 MW
Khongnem Chakha and 190
MW Pabaram HEPs to the
North Eastern Electric Power
Corporation Ltd. (NEEPCO) for
detailed investigation and subsequent execution. The signing in
ceremony was held at Imphal in a
function attended by Mr. Okram

Ibobi Singh, Honble Chief
Minister, Mr. P. C. Lawmkunga,
Chief Secretary, Deputy Chief
Minister, various other ministers, MLAs of concerned districts,
including other high officials
from the State Government and
Manipur State Power Company
Ltd. (MSPCL).
Signing the PIA on behalf of
NEEPCO, its CMD Mr. P. C.
Pankaj assured the gathering
that NEEPCO shall put in its best
efforts to execute these projects in

a time-bound manner.
65
66
Awards & Accolades to PSEs

HAL Bags Best PSU Award Under Best
Global Presence Category
The company has exported indigenously designed

and developed ALH Dhruv to Ecuador, Mauritius,
Maldives and Nepal. HAL also exports aircraft/ helicopter engines, carries out midlife upgradation/
overhaul of aircraft/ helicopters. HAL manufactured avionics items are fitted as original equipment
on leading aircraft platforms of foreign companies
supplied to some of the developing countries.
NMDC Receives Most

Valuable Company Award
Mr. C.K. Vishwakarma (right), Executive Director, HAL, receiving

the Best PSU Award for global presence from Mr. Ram Vilas
Paswan, Union Minister of Consumer Affairs, Food and Public
Distribution.
he first ever India Today survey on Indian

Public Sectors resulted in HAL bagging
the award as the Best PSU under the category of the Best Global Presence. Mr. Ram Vilas
Paswan, Union Minister of Consumer Affairs, Food
and Public Distribution, gave away the awards to
PSUs in eight categories. Mr. C.K. Vishwakarma,
Executive Director (Coordination), HAL, received
the award on behalf of Mr. R. K. Tyagi, Chairman,
HAL, at India Today PSU Awards function held in
New Delhi.
In pursuit of its export objectives, HAL recently created a special group to look after its international
business. The companys export saw a steady growth
over a period of time and the company aimed to
consolidate its position by leveraging its capabilities. During the last year (2013-14), HALs exports
registered 15% growth over the previous year.
The company has identified SAARC, the Middle
East, Africa and Latin America as focus regions for
export of its product platforms, work packages including aero-structures, forgings, castings to international majors, avionics, spares, MRO, etc. HAL
presently exports to 20 countries.
Mr. Narendra Kothari, CMD, NMDC, receiving the award from

Mr. Ram Vilas Paswan, Union Minister of Consumer Affairs,
Food and Public Distribution.
NMDC recently received the Most Valuable

Company Award in the Navaratna Category of
India Today PSU Awards 2014. Mr. Narendra
Kothari, CMD, NMDC, received the award from
Mr. Ram Vilas Paswan, Union Minister of Consumer
Affairs, Food and Public Distribution in the presence of Mr. Shekhar Gupta, Vice Chairman and
Editor-in-Chief, India Today, and other dignitaries
in New Delhi recently.
BEL Wins Awards for Being Most

Eco Friendly & Best in R&D Innovation
Bharat Electronics Ltd. (BEL) has won 2 awards
for being the Most Eco Friendly Company and the
Best in R&D Innovation in the first ever India Today
Group PSU Awards function.
Dr Ajit T. Kalghatgi, Director (R&D), BEL, received
the awards for BEL from Mr. Ram Vilas Paswan,
67
Consumer Affairs, Food and Public Distribution, in

the presence of Mr. Shekhar Gupta, Vice Chairman
and Editor-in-Chief, India Today. NTPC is a preferred employer and one of the best companies to
work for in India.
BHEL Conferred with India Today Best

Maharatna PSU Award
Dr Ajit T. Kalghatgi, Director (R&D), BEL, receiving the India

Today Award for the Most Eco Friendly company and the Best
in R&D Innovation for BEL from Mr. Ram Vilas Paswan, Union
Minister of Consumer Affairs, Food and Public Distribution.
Union Minister of Consumer Affairs, Food and

Public Distribution, at the awards ceremony held in
New Delhi recently.
BEL has been maintaining a clean and green environment at all of its nine units, which are all ISO
14001 certified. Stringent pollution control measures, waste water treatment, zero effluent discharge, rainwater harvesting, energy conservation,
water conservation, systematic management and
disposal of hazardous and other forms of wastes
and several other endeavours have become a part
of the well-established Environmental Management
System at BEL.
NTPC Awarded for Best HR Practices

NTPC has been conferred with the Best HR Practices
Award at India Today Awards 2014 as a Maharatna
Company of Govt. of India. The award was received by Mr. A.K. Jha, Director (Technical), NTPC,
from Shri Ram Vilas Paswan, Union Minister for
Mr. A.K. Jha, Director (Technical), NTPC, receives the award for
Best HR Practices from Mr. Ram Vilas Paswan, Union Minister
for Consumer Affairs, Food and Public Distribution.
68
Mr. P. K. Bajpai, Director (Finance), BHEL, receiving Best

Maharatna PSU Award for Global Presence and Best
Maharatna PSU Award for Innovation and R&D.
Mr. P. K. Bajpai, Director (Finance), BHEL, received

the India Today Best Maharatna PSU Award for
Global Presence from Mr. Ram Vilas Paswan, Union
Minister for Consumer Affairs, Food and Public
Distribution. BHEL also won the Best Maharatna
PSU Award for Innovation and R&D.
REC Bestowed India Today Award

for Best HR Practices
REC Limited has been conferred with the India
Mr. Vinod Behari, Executive Director (HR & CC), REC, collects
the award for Best HR Practices from Chief Guest Shri Ram
Vilas Paswan, Union Minister for Consumer Affairs, Food and
Public Distribution
Today PSUs Award 2014 for Best HR Practices in

the Navratna PSUs category. The award was received by Mr. Vinod Behari, Executive Director (HR
& CC), REC, from the Chief Guest Mr. Ram Vilas
Paswan, Union Minister for Consumer Affairs, Food
and Public Distribution.
NVVN Awarded the

Best Performing Company
NTPCs wholly owned subsidiary NTPC Vidyut
Vypar Nigam (NVVN) has been awarded the India
Neyveli Lignite Corporation was awarded the "Best in
Diversification of Power Projects" at Elets PSU Summit 2014
- New Delhi. CMD received the award along with Director
(Power) and Executive Director (SME & Conveyor) from Mr.
Japang Taloh Hon'ble Minister of Education, Arunachal
Pradesh and Dr. M.P. Narayanan former CMD (of CIL & NLC)
MCL Wins 2 Elects PSU Summit

2014 awards
Mr. N. K. Sharma, CEO, NVVN and Mr. A. K. Jha, Director

(Technical), NTPC receiving the award from Mr. Ram Vilas
Paswan, Union Minister for Consumer Affairs, Food & Public
Distributions.
Today Best Performing Company among other PSUs

at an award function held in New Delhi recently.
The Award was received by Mr. N.K. Sharma, CEO,
NVVN, and Mr. A.K. Jha, Director (Technical),
NTPC from Mr. Ram Vilas Paswan, Union Minister
for Consumer Affairs, Food and Public Distribution.
NLC Honoured with Special Award for

Diversification of Power Projects
NLC was conferred with the special award for its
best Diversification Activities of Power Projects in
Power Generation by Elets Technomedia Ltd.
Mahanadi Coalfields Limited (MCL) has received

two elects PSU Summit 2014 awards for transparency in business transaction through e-initiatives and
mining operations with economical usage of fuel.
The awards were presented by Mr. Tapang Taloh,
Minister of Education, Arunachal Pradesh, at a ceremony in New Delhi.
Mr. Deepak Srivastava, IFS, Chief Vigilance Officer,
received the award for the IT initiative for bringing
in transparency in business transactions by implementing auto-refund of EMDs to the unsuccessful
bidders in public procurement, as a citizen-centric
service initiative.
Mr. R.K. Sinha, General Manager (IED), MIL, received the award for the Saving of Specific Diesel
Consumption project with respect to CMPDI norms
in MCL projects/ mines.
For the past half century NLC was operating lignitebased Thermal Power Station. Now it is installing
coal-based thermal power stations apart from Nonconventional energy technology including wind
and solar power.
Mr. B. Surender Mohan, CMD, NLC, delivered the
keynote address. Mr. S. Rajagopal, Director (Power),
and Mr. N. Illamparuthi, ED (SME & Conveyors),
NLC, also participated in the summit.
69
Mr. K. L. Dhingra, CMD, ITI Conferred Udyog

Rattan Award
Mr. K.L. Dhingra, CMD, ITI has been conferred the
Udyog Rattan Award by the Institute of Economic
Studies (IES) at seminar held at Bangalore.
ITI Ltd. Conferred Loss Reduction through

Cost Cutting Award
NBCC Gets Arch of Excellence Award

National Buildings Construction Corporation
Limited, has been recently awarded with the Arch
of Excellence Award under the corporate category
at All India Achievers Conference. Mr. Hem Raj,
Mr. Hem Raj, Executive Director (Technical), NBCC, receiving

the award on behalf of the company.
The Loss Reduction through Cost Cutting Award

has been bestowed upon ITI Ltd, Bangalore, at the
PSU Summit 2014 Award function organised by
Elets Technomedia Ltd. at New Delhi.
Executive Director (Technical), NBCC, received

the award on behalf of the company. The award
was given to NBCC in recognition of its outstanding achievements in the field of Construction and
Contribution to the nations growth.
REC Receives ICSI National Award for

Excellence in Corporate Governance
MCL Winner of HR Best

Practices Award 2014
Mr. Rajeev Sharma, CMD, REC, received the 13th

ICSI National Award for Excellence in Corporate
Governance for the year 2013 from Mr. Arun Jaitley,
Minister for Finance, Corporate Affairs and Defence,
recently, at an award presentation in Kolkata. The
award was conferred by The Institute of Company
Secretaries of India (ICSI). REC was selected as the
Best Governed Company from a number of listed
and unlisted companies in public and private sector
by eminent jury members headed by Mr. Justice M.
N. Venkatachaliah, former Chief Justice of India.
Mahanadi Coalfields Limited (MCL) has been conferred with the HR Best Practices Award 2014 by
the National Institute of Personnel Management
(NIPM). MCL has been adjudged as the 1st position holder/ winner in Category A (for organizations having more than 2,500 employees) of HR Best
Practices Award 2014.
Mr. Rajeev sharma, CMD, REC receiving the ICSI National Award
from Mr. Arun Jaitely, Minister for Finance, CA and Defence.
70
Mr. A.N. Sahay, CMD, MCL, congratulated Director

(Personnel) and his entire team for their efforts in
bringing about a positive change in the company by initiating best practices in human resource
management.
The Company had paid interim dividend @40.0

percent amounting to Rs. 3298.19 cr on February
10, 2014. The Company has paid the final dividend
@17.5 percent amounting to Rs. 1442.97 cr.
Employment, Mr. Narendra Singh Tomar as dividend for the financial year 2013-14, during his visit
to KIOCL Corporate Office in Bangalore.
During the financial year 2013-14, KIOCL reported 35 percent jump in its operational performance with production and dispatch of 1.710 MT
and 1.615 MT of Pellets respectively. Companys
financial performance improved with growth of
32 percent in Gross Income at Rs. 1532.37 crs and
PBT of Rs. 61.40 crs vis--vis Rs.32.34 crs, PAT of
Rs. 39.94 crs vis--vis Rs.31.05 crs thereby recording a growth of 29 percent over the year 2012-13.
NTPC pays Total Dividend of

Rs. 4741.16 cr for FY 2013-14
NTPC Limited paid a total dividend @ 57.5 percent
of its paid-up capital for the financial year 2013-14,
amounting to Rs. 4741.16 cr. The dividend payment is 3rd highest among public sector enterprises and 5th highest among the Listed Companies.
The RTGS advice for the transfer of Rs. 1081.61

Cr. to Government of India, being the share of
Government of India in the final dividend, was
presented by Dr. Arup Roy Choudhury, CMD,
NTPC to Mr. Piyush Goyal, Minister of State
(Independent Charge) for Power, Coal and New &
Renewable Energy in the presence of Dr. Pradeep
Kumar, Joint Secretary & Financial Advisor, MOP,
Mr. Mukesh Jain, Joint Secretary (Power), Mr. K.
Biswal, Director (Finance), NTPC, Mr. I. J. Kapoor,
Director (Commercial), NTPC, Mr. N. N. Misra,
Director (Operations), NTPC, Mr. A. K. Jha, Director
(Technical), NTPC, Mr. U. P. Pani, Director (Human
Resources), NTPC and Mr. S.C. Pandey, Director
(Projects), NTPC. NTPC Ltd. has paid dividend of
Rs. 3555.25 Cr. to the Government of India for the
financial year 2013-14. This is the 21st consecutive
year that NTPC Ltd. has paid dividend.
Cwc Achieves yet another Record Turnover
he
Central Warehousing
Corporation (CWC) achie-ved
yet another record turnover
of Rs.1528.19 cr during 2013-14
as against Rs. 1406.70 cr earned
during 2012-13, thus recording a
growth of 8.64 percent. The Profit
Before Tax (PBT) and Profit After Tax
(PAT) also increased by 22.58 percent and 15.41 percent respectively
over the preceding year. Keeping in
view the national priority for safe
storage of foodgrains, utilization of
capacity for storage of foodgrains
was given due priority. CWC handled 10.36 lakh TEUs during 201314 despite slump in the IMPEX
trade. During 2013-14 CWC continued to operate Cargo Terminal of
Integrated Check Post (ICP) at Attari
on Indo-Pak border entrusted to
CWC by the Department of Border
Management, Ministry of Home
Affairs. CWC handled 85,484 export/
import trucks as against 74,847 export/import trucks handled during
2012-13 and earned a gross revenue of Rs. 39.28 Cr. during 2013-14
as against Rs.33.12 Cr. earned during 2012-13. CWC also commenced

operation of the Cargo Terminal
at ICP, Agartala in November 2013
to facilitate border trade with
Bangladesh. Keeping in view the
improved financial results, CWC declared dividend @ 48 percent for the
year 2013-14 as against 41 percent
paid for 2012-13. During 2014-15
CWC plans to construct additional
storage capacity of about 2.00 lakh
MT across the country with a CAPEX
of about Rs.120 cr.
93
94

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Vol. 34 No.

Vol. 34 No. 5 October, 2014

Companies Act 2013 -...................................................................................... 48

daiuh dkuwu vkSj lkoZtfud mie

DD/Cheque drawn in favour of Standing Conference of

Material published in KALEIDOSCOPE may be

The 2013 Act promises to substantively raise the bar on governance

Vice President Releases Book Untold Story of

Kaleidoscope October 2014

Director General, SCOPE

Kaleidoscope October 2014

and a new perspective to umpteen discussions that take place

The gap created

of Companies Act 2013 and SEBI

Need for a long term

develop and mentor women employees to higher and board level

sector which registered a positive

Employment Review, Government of India, Ministry of Labour & Employment,

Kaleidoscope October 2014

Kaleidoscope October 2014

Besides providing women

Instituting awards recognizing

Long Road Ahead

Companies Act 2013

On one hand, they are the agents

Kaleidoscope October 2014

The Board at the top is enjoined to steer and activate

the shareholders, the community

A director shall not involve in

Duty to Attend Board Meetings:

A director shall not achieve

In a recent analysis by Proxy

Kaleidoscope October 2014

directors hardly attended any

Duties implicit from provisions of Section 134

that board had laid internal

that such internal financial

Accounting policies and reliance

that such internal financial controls were operating

Prohibitions and restrictions for directors

Kaleidoscope October 2014

Key functions of the Board

Kaleidoscope October 2014

companys accounting and financial reporting systems, including

exercise objective independent

multiple countries, the risk of

The Companies Act, 2013 is a

Duties and Liabilities of

duties, responsibilities of the

directors provides Guidance

Are the systems so well set

sive reforms like directors

What effective mechanism do

and corporate directors need

Are the systems/procedures

sions are not to be seen as a

What steps are taken to

expectation of the regulators

How adequately is companys compliance cell resourced?

dards in terms of governance.

and impartially about any unethical behavior, violation of the

ascertaining and ensuring

Globally, with the evolving regulatory landscape, which makes

paying sufficient attention