Governance

RE-EXAMINE, RE-ENGINEER, RE-ENHANCE

SCOPE Meritorious Awards recognise the excellent work done by Central Public Sector Enterprises in various fields in 2012-13

dec2014-img-18THE central public sector enterprises (CPSEs) have a vital role to play in transforming India into a world-class global manufacturing hub. But to make this a reality, the CPSEs need to critically re-examine the existing systems and develop newer and efficient ways of doing business. This is the advice that President Pranab Mukherjee gave to the CPSEs while addressing the Standing Conference of Public Enterprises (SCOPE) Meritorious Awards function at Vigyan Bhawan in New Delhi on November 5, 2014.

“Over the years, our CPSEs have developed a certain way of doing business. In today’s scenario, it is critical to re-examine, re-engineer, and re-enhance processes in order to continuously stay ahead of market requirements and expectations,” the President said.

Highlighting the pivotal role of the CPSEs, set up immediately after Independence to channelise investment in areas that were critical for economic development and self-reliance, he said, “As envisaged at the time of their creation, they have proved to be the backbone of our development effort and are rightly recognised as drivers of growth in infrastructure and other critical sectors of the economy.”

“The government has taken a number of steps to improve the functioning of CPSEs. These include empowerment of the Boards of Maharatna, Navratna and Miniratna CPSEs, professionalisation of CPSE Boards and strengthening of performance evaluation systems. These steps have contributed significantly in creating a positive and conducive policy framework for CPSEs,” he said.

Making a special mention of the Prime Minister’s recently launched ‘Make in India’ campaign, he said, “They (CPSEs) have, over the years, established excellent manufacturing facilities in various parts of the country… We should aim not only at catering to our huge domestic demand, but also towards high quality product development and greater access to foreign markets. This would not only create adequate employment opportunities for our youth, but also raise standards of living.”

Speaking on the occasion, Union Heavy Industries and Public Enterprises Minister Anant Geete said that the Indian CPSEs have emerged stronger and more efficient in the face of an increasingly competitive scenario and are now ready to become global entities. In fact, he said, many CPSEs have already made successful global forays and many more are ready to spread their wings.

However, the Minister added, to fully exploit the opportunities presented by the emerging global economic order, the public sector and private sector companies need to increase their technological edge and improve productivity while adhering to good corporate governance practices and with greater emphasis on social orientation mandated in the Companies Act, 2013. To enable the CPSEs Boards to exercise wider powers, the minister announced the government’s decision to grant Navratna status to three more CPSEs the Container Corporation of India Limited, the Engineers India Limited and the National Buildings Construction Corporation Limited.

The Navratna status empowers PSEs to invest up to Rs. 1,000 crore, or 15 per cent of their net worth, on a single project without seeking government approval. In a year, these companies can spend up to 30 per cent of their net worth not exceeding Rs. 1,000 crore. They can also enter joint ventures, form alliances and float subsidiaries abroad.

Earlier, MoS for Heavy Industries and Public Enterprises P Radhakrishnan informed that around 270 CPSEs had an aggregate investment of more than Rs. 8,50,000 crore and a turnover of more than Rs. 19,45,000 crore for the year 2012-13. The total net profit of 229 operating CPSEs was more than Rs. 1,15,000 crore and they contributed more than Rs. 1,62,000 crore to the central exchequer by way of excise duty, customs duty, corporate tax, dividend, and so on, during 2012-13. “These figures show that our CPSEs have put in a remarkable performance which needs to be recognised as is being done today,” he said.

The CPSEs were later conferred SCOPE Meritorious Awards for outstanding performance in areas like corporate governance, corporate social responsibility, human resource development, environment and sustainable development, as well as technology development and innovation. The recipients included the Steel Authority of India Limited (SAI) for Environmental Excellence in Sustainable Development, the Bharat Petroleum Corporation Limited (BPCL) for Corporate Governance, the Indian Oil Corporation Limited (IOC) for Corporate Social Responsibility and Responsiveness, the Hindustan Aeronautics Limited (HAL) for Technology Development and Innovation, the Bharat Electronics Limited (BEL) for Best Practices in Human Resource Management, the Power Finance Corporation Limited (PFC) for Best Managed Bank, Financial Institution or Insurance Company, and the National Safai Karamcharis Finance and Development Corporation for the Best Managed PSE set up under Section 25.

Apart from these, the Oil India Limited (OIL), the Water and Power Consultancy Services (WAPCOS), the Ircon International Limited (IRCON), the REIL Electricals India Limited and the THDC India Limited were given Commendation Certificates.

The three new Navratna CPSEs were also felicitated by the President on the occasion.

The awards ceremony was jointly organised by SCOPE and the Department of Public Enterprises.
The awardees were finalised by a panel of judges under the chairmanship of Justice RC Lahoti, former Chief Justice of India. The eminent members in the jury comprised former Secretary (Steel), Padma Bhushan Moosa Raza, the renowned management consultant, Padma Bhushan MB Athreya, the former Chairman, PESB, C Phunsog, the former Chairman, SAIL, Arvind Pande, and the DG, SCOPE, UD Choubey.

SCOPE is an apex professional organisation representing the CPSEs and has state enterprises, banks and other institutions among its members. Its objective is to promote excellence in organisations, where public investment is involved, to enable them to be globally competitive.

dec2014-img-20Steel Authority of India Limited
SAIL’s Corporate Environmental Policy lays down that the company will conduct its operations in an environmentally responsible manner, comply with applicable regulations and strive to go beyond

THE Rs. 50,000-crore Maharatna Public Sector Enterprise and India’s largest steel producing company, Steel Authority of India Limited (SAIL) is adopting various environment-friendly technologies that include pollution control, effluent treatment plants, water and energy conservation, noise reduction, recycling solid wastes and improved housekeeping measures.

The overall effort is on waste minimisation, conservation at source, recovery and recycling. Also, over 20 million trees have been planted in green belts, parks and tree-lined avenues at various SAIL plants and units. In 2013-14, about 1.51 lakh saplings were planted in SAIL plants and about 0.54 lakh in the mines.

The efforts have borne fruit in terms of better solid waste utilisation and reduced water consumption, CO2 emission and about 22 per cent energy consumption in SAIL plants.

The company has achieved an increase of 11 per cent in steel production without any increase in total energy consumption in the last 5 years. As a result, CO2 emissions were reduced by 6 per cent. Dedicating the award to all SAIL employees, SAIL Chairman CS Verma said, “SAIL plants are bringing in new, clean and green technologies, which will lead to reduction in the air and water pollution, energy use and increase in utilisation of wastes.”

dec2014-img-21Bharat Petroleum Corporation Limited
The main emphasis of BPCL’s Corporate Governance philosophy has been to ensure fairness to all its stakeholders through transparency, full disclosures, empowerment of employees and collective decision making

BPCL exemplifies how good corporate governance holds the key to enhancing competitiveness, profitability, growth and superior returns for stakeholders.

With the focus on transparency, fairness, disclosure and accountability, BPCL has been committed to enhancing the shareholders’ value with good corporate governance. This seems to be paying rich dividends as in the year 2013-2014 the company achieved a net profit of Rs. 4,060.88 crore—almost double that of last year. As a result, BPCL achieved the highest average Gross Refining Margin (GRM), market sales volume and market share amongst the public sector oil companies.

With an annual turnover of around Rs. 534 billion, BPCL is a leading player in the business of refining crude and marketing of petroleum products. It is the second-largest petroleum marketing company with an overall market share of 22 per cent in retail products and a market share of 27 per cent, 32 per cent, 25 per cent and 16 per cent in HSD, MS, LPG and SKO, respectively.

The company traces its history to 1928 when the Burmah Shell Oil Storage and Distribution Company of India was incorporated in England to enter the petroleum products business in India. In 1952, Shell and Burmah Oil Company set up Burmah Shell Refineries to establish a refinery in Mumbai. Its operations were nationalised in 1976 and the Refinery and Marketing Companies were merged to form BPCL.

dec2014-img-22Indian Oil Corporation Limited
India’s flagship energy major and Maharatna company, Indian Oil, has been meeting India’s energy demands for over half a century

INDIAN Oil Corporation Limited’s strong presence can be felt across the entire hydrocarbon value chain —exploration, production and refining to piped transportation and marketing of natural gas and petrochemicals. Indian Oil is the driving force behind many health, family welfare, education, environment protection, drinking water, sanitation and women empowerment programmes.

The Corporation’s CSR initiatives can be classified into three main thrust areas—’Clean Drinking Water’, ‘Health and Medical Care’ and ‘Expansion of Education’. Every year, a fixed portion of its profits is set aside for community welfare and development programmes. About one-fourth of the community development funds are spent on the welfare of Scheduled Caste and Scheduled Tribe beneficiaries.
Indian Oil also aims at developing techno-economically viable and environment-friendly products and services while ensuring the highest standards of safety and environment. Indian Oil has also been in the forefront of helping victims of calamities and during national emergencies.

Speaking on the occasion, Indian Oil Chairman B Ashok said, “Receiving this award brings in
greater responsibility on us and we would continue to serve India in all our capacities.”

dec2014-img-23Hindustan Aeronautics Limited
HAL has filed over 300 patents in the last two years and identified 111 technologies on which its experts could contribute with the funding to be provided by the company

HINDUSTAN Aeronautics Limited (HAL) has designed and developed some 15 types of aircraft and helicopters, including basic trainers, intermediate trainers, fighters and light helicopters. It has designed more than 600 avionics systems and accessories for a variety of aircraft and is manufacturing about 15 aircraft/helicopters (with in-house R&D) and is producing 14 types of aircraft/helicopters under licence.

Research and Technology Development is a priority area for HAL which has created an R&D corpus, earmarking 10 per cent of operational profit after tax, to promote technology development within the company. Ten R&D centres of the company have been brought under the ambit of the Committee of Institutional Network (COIN) to ensure synergy. HAL has also entered into MOUs for technology collaboration with IIT-Kanpur for rotary unmanned systems, IIT-Kharagpur for avionics and electronic warfare systems, IIT-Roorkee for aircraft subsystem research and with IIT-Bombay for communications systems. HAL is also working with IIS, Bengaluru, DRDO laboratories and private industries for various R&D activities.

Some of the R&D feathers in its cap include Advanced Light Helicopter, Light Combat Aircraft, Intermediate Jet Trainer, Light Combat Helicopter and Polar Satellite Launch Vehicle.

dec2014-img-24Bharat Electronics Limited
BEL has been constantly evolving innovative strategies in Human Resource Management to develop the employees as the most valuable assets of the company, enriching their careers and aligning them with the current and future business strategy of the enterprise

BHARAT Electronics Limited’s (BEL) initiatives on Human Resource Management include Behavioural Competency Modelling, Competency-based Development Centres for senior executives, 360-Degree Feedback, Leadership Development Workshops, Employee Engagement, Organisational Culture Building, Leading the Change management programme, Outbound Learning Programmes and strategy workshops.

BEL has a staff of around 10,000, including 3,991 engineers and scientists. Around 20 per cent of these are women. Some 240 engineers, scientists and other professionals were inducted during the last year. BEL plans to recruit 400 engineers in the current year. Faced with severe competition from the private sector, BEL has tailored its HR practices to attract and retain talent, specially in engineering disciplines.

As part of this initiative, BEL is conducting various training programmes to enhance competencies in technical, functional and managerial or leadership areas. A new performance management system (PMS) has been introduced for all DGMs and highrt staff across the company. Global consultancy firms like Ernest & Young have been asked to suggest ways to improve the working ethos and performance-oriented culture in the organisation.

dec2014-img-25Power Finance Corporation Limited
PFC is today the largest non-banking finance institution (NBFC) in the country in terms of net worth and enjoys the status of a Navratna company

Set up on July 16, 1986, as a dedicated financial institution for the power sector, the Power Finance Corporation (PFC) has emerged as the financial backbone of Indian power sector. It has overtaken HDFC to reach the top spot in the NBFC market.

PFC has sanctioned loans worth Rs. 59,429 crore and disbursed an amount of Rs. 39,818 crore. PFC’s net profit has increased 16 per cent over last year to reach Rs. 3,032 crore. Its total income has risen 28 per cent to Rs. 13,037 crore and net worth has jumped 37 per cent from last year to reach Rs. 19,493 crore today.

PFC’s strategy is to retain its supremacy in the Indian power sector by continuing its growth story while making inroads into new avenues of business. It has a wide range of products and services to cater to the changing needs of clients across the value chain of the power sector. To expand its operations beyond traditional financing, PFC is exploring options in renewable energy, loan syndication and equity financing related to the power sector.

As part of its strategy, PFC is moving towards new and allied areas like coal mine development, development of ports for coal transportation, power equipment and energy efficiency. It is also planning to enhance its presence in non-conventional energy financing, such as solar and wind power.

dec2014-img-26National Safai Karamcharis Finance and Development Corporation
The NSKFDC has been successfully achieving more than 100 per cent of its targets every year in respect of sanction and disbursement of funds

THE National Safai Karamcharis Finance and Development Corporation (NSKFDC), a social sector company under the Ministry of Social Justice and Empowerment, was incorporated as a not-for-profit company under Section 25 of the Companies Act on January 24, 1997.

The corporation’s focus is on ‘manual scavengers’, or persons engaged in manually cleaning, carrying, disposing or handling human excreta in unsanitary latrines and open drains.

NSKFDC’s main aim is socio-economic upliftment of such conservancy workers and their dependents throughout the country. The corporation aims to help them break away from traditional occupation. No income limit is fixed for availing of financial assistance for such persons. However, the corporation accords priority to the economic development and rehabilitation of scavengers, women and Persons with Disabilities from among the target group.

The NSKFDC provides loans at a concessional rate of interest to the beneficiaries through the State Channellising Agencies (SCAs) appointed by the respective State governments and Union Territories across the country.

COMMENDATION CERTIFICATES

Environmental Excellence and Sustainable Development
Oil India Limited

THE emphasis at Oil India Limited (OIL) is to deploy advanced technology in all its operations while protecting the environment. The company is investing Rs. 600 crore to set up renewable energy capacity through wind and solar power plants and by diversifying into clean energy sources. The company already has a 57.6-megawatt (MW) wind power plant with an investment of Rs. 400 crore and plans to build a 5-MW solar power project in Rajasthan this year. If the National Action Plan on Climate Change is to be taken seriously, India should generate 15 per cent of its power from solar, wind, hydropower and other renewable sources by 2020.

dec2014-img-42OIL is the second-largest national oil and gas company in India. It is involved in exploration, production and transportation of crude oil and gas. Ninety-four per cent of its oil and natural gas reserves are located onshore in the Upper Assam basin, in the States of Assam and Arunachal Pradesh. Further, it is exploring crude oil and gas in Egypt, Gabon, Iran, Libya, Nigeria, Timor Leste and Yemen.

OIL’s Reserve Replacement Ratio (RRR) of 200 per cent and exploratory success rate of 76 per cent is better than the best globally—the world average exploratory success rate is 20 per cent. No wonder, OIL has been named in the ‘Platts Top 250 Global Energy Company Rankings’ for 2014.

OIL owns and operates a 1,157-km cross-country crude oil pipeline with a capacity to transport over 44 million barrels of crude oil annually. OIL also owns and operates a 660-km petroleum pipeline, connecting Numaligarh Refinery Limited (NRL) to Siliguri in West Bengal. The company has interests in downstream activities through a 26 per cent stake in NRL, a 10 per cent stake in Brahmaputra Cracker and Polymer Limited (BCPL) and a 23 per cent stake in Duliajan-Numaligarh Pipeline (DNP) Limited. OIL also holds a 10 per cent stake in a 741-km pipeline project in Sudan.

The Chairman and Managing Director of Oil India Limited, SK Srivastava, received the SCOPE Meritorious Award Commendation Certificate 2012-13 for ‘Environmental Excellence and Sustainable Development’ from the Minister of Heavy Industries and Public Enterprises, Anant Geete.

Corporate Governance
WAPCOS Limited
INCORPORATED under the Companies Act, 1956, WAPCOS Limited is a Mini-Ratna Public Sector Enterprise under the aegis of the Union Ministry of Water Resources. The company provides consultancy services in critical areas of water resources, power and infrastructure development and is recognised amongst the leading consultancy organisations in India and abroad.

dec2014-img-43WAPCO’s areas of specialisation cover irrigation and drainage, flood control and land reclamation, river management, dams, reservoir engineering and barrages, integrated agriculture development, watershed management, hydro-power and thermal power generation, power transmission and distribution, rural electrification, ground water exploration, minor irrigation, water supply and sanitation (rural and urban), environmental engineering including environmental impact assessment and environmental audit, ports and harbours and inland waterways, rainwater harvesting, survey and investigations, human resource management, system studies and information technology.

WAPCOS has also been venturing into newer fields such as software development, city development plans, financial management system, technical education, quality control and construction supervision, roads and bridges.

It is registered with various international funding agencies like the World Bank, Asian Development Bank, African Development Bank, Japan Bank for International Cooperation and United Nations Office for Project Services.

Apart from India, WAPCOS has successfully completed consultancy assignments in more than 50 countries and is currently engaged in providing consultancy services in 26 countries.

WAPCOS Chairman and Managing Director RK Gupta received the SCOPE Meritorious Award
Commendation Certificate 2012-13 in the ‘Corporate Governance’ category.

Corporate Social Responsibility & Responsiveness
IRCON International Limited

IRCON International Limited (IRCON), incorporated by the Central Government (Ministry of Railways) under the Companies Act, 1956, was originally called the Indian Railway Construction Company Limited. Its mandate was to utilise the Indian Railway’s experience in helping developing nations of the world to instal or maintain their own railways and to execute railway projects for the private sector. It is today a specialised constructions organisation, covering the entire spectrum of construction activities and services in the infrastructure sector in India and abroad. It has completed more than 280 infrastructure projects in India and more than 90 projects in 21 countries across the world.

dec2014-img-44The only construction PSU to be granted the Mini-Ratna status by the Government of India, IRCON specialises in railways, railway electrification, signal and telecommunication, construction of roads, highways, commercial, industrial and residential complexes, airport runways, airport constructions, leasing of locomotives and mass rapid transit system. It is among the top 225 construction contractors of the world, with a higher than average profitability of 6.90 per cent. It is also the highest foreign exchange earner in the construction sector.

IRCON Chairman and Managing Director Mohan Tiwari received the SCOPE Meritorious Award Commendation Certificate 2012-13 in the ‘Corporate Social Responsibility and Responsiveness’ category.

R&D Technology Development and Innovation
Rajasthan Electronics and Instruments Limited

THE Rajasthan Electronics and Instruments Limited (REIL) has a long-term vision to deliver new and innovative electronics, renewable energy and information technology-based solutions and services for the social and economical development of people in the rural areas.

dec2014-img-46REIL has launched over 15 products, like data processor unit, electronic milk adulteration tester, auto electronic milk tester and solar auto tracker, through in-house R&D efforts. It has also been working jointly with the Government of India’s R&D centres in the last three years. These innovations have helped the organisation in vertical integration by significant contribution in manufacturing activities.

REIL Managing Director AK Jain, who received the SCOPE Meritorious Award Commendation Certificate 2012-13 in the ‘R&D Technology Development and Innovation’ category, reiterated the company’s commitment to work for the success of the Government’s ‘Make in India’ mission by increasing the manufacturing component. This, he said, would be done by focusing on the R&D, technology development and innovation.

He said REIL firmly believes that the path to social and economic progress of the country lies through the villages. The company is committed to the upliftment of the rural economy by taking technology to the villages.

Best Practices in Human Resource Management
THDC India Limited

THE THDC India Limited (formerly Tehri Hydro Development Corporation Limited), jointly promoted by the Government of India and the Government of Uttar Pradesh, is a Mini-Ratna Category-I Enterprise. It operates and maintains the Tehri (1,000 MW) and Koteshwar (400 MW) hydro power complexes. The Union Government holds 73.08 per cent shares in THDCIL and the balance is held by the Government of Uttar Pradesh.

dec2014-img-45THDCIL Chairman and Managing Director RST Sai, who received the SCOPE Meritorious Award Commendation Certificate 2012-13 in the ‘Best Practices in Human Resource Management’ category, said the award was an acknowledgement of exemplary initiatives taken by the company.

THDCIL, which has plans to increase its installed capacity to 2,424 MW by the end of the 12th Plan, has implemented many innovative HR policies and strategies to motivate its employees and attract people to join the organisation. It has an enviable track record of zero loss of mandays, which symbolises that there’s a cordial relationship between the management and the employees. THDCIL won the gold medal at the World HRD Congress in the category of ‘Best HRD Strategy in line with Business’. In June, the company’s Director (Personnel), SK Biswas, was conferred with the ‘HR Leader Award’ at the 4th Annual Green-Tech HR Awards in Bengaluru.

Vol. 8 | Issue 9 | December 2014

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