METs INSTITUTE OF MANAGEMENT

MMS III B2014-16

LEGAL AND TAX ASPECTS OF BUSINESS

Legal and regulatory Aspects of Good Governance practices so as to add value to all stake holders.

GROUP MEMBERSTushar Oswal94Moneeb Shaikh139

Sakshi Lalwani110Rohit Wagh166

Rohit Nagra111Devang Shelar140

Zaid Sayed113

TABLE OF CONTENTS

SR NO.PARTICULARSPAGE NO.

1Introduction to Good Governance

2Introduction to Corporate Governance

3Legal Framework:SEBI's Clause 49 of listing AgreementCompanies Act,2013

4Good Governance in:BrazilRussiaIndia

5Rating BRICS according to Governance Practices

6Case Study : ICARE

7Case Study : Akshaya Parta

8Case Study : The Arthur Anderson & Enron

IntroductionGovernanceis "the process of decision-making and the process by which decisions are implemented (or not implemented)".The termgovernancecan apply to corporate, international, national, local governanceor to the interactions between other sectors of society.Since governance is the process of decision-making and the process by which decisions are implemented, an analysis of governance focuses on the formal and informal actors involved in decision-making and implementing the decisions made and the formal and informal structures that have been set in place to arrive at and implement the decision.

Good governance has 8 major characteristics. It is participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive, and follows the rule of law. Good governance is responsive to the present and future needs of the organization, exercises prudence in policy-setting and decision-making, and that the best interests of all stakeholders are taken into account.1. Rule of LawGood governance requires fair legal frameworks that are enforced by an impartial regulatory body, for the full protection of stakeholders.

2. TransparencyTransparency means that information should be provided in easily understandable forms and media; that it should be freely available and directly accessible to those who will be affected by governance policies and practices, as well as the outcomes resulting therefrom; and that any decisions taken and their enforcement are in compliance with established rules and regulations.

3. ResponsivenessGood governance requires that organizations and their processes are designed to serve the best interests of stakeholders within a reasonable timeframe.

4. Consensus OrientedGood governance requires consultation to understand the different interests of stakeholders in order to reach a broad consensus of what is in the best interest of the entire stakeholder group and how this can be achieved in a sustainable and prudent manner.

5. Equity and InclusivenessThe organization that provides the opportunity for its stakeholders to maintain, enhance, or generally improve their well-being provides the most compelling message regarding its reason for existence and value to society.

6. Effectiveness and EfficiencyGood governance means that the processes implemented by the organization to produce favorable results meet the needs of its stakeholders, while making the best use of resources human, technological, financial, natural and environmental at its disposal.

7. AccountabilityAccountability is a key tenet of good governance. Who is accountable for what should be documented in policy statements. In general, an organization is accountable to those who will be affected by its decisions or actions as well as the applicable rules of law.

8. ParticipationParticipation by both men and women, either directly or through legitimate representatives, is a key cornerstone of good governance. Participation needs to be informed and organized, including freedom of expression and assiduous concern for the best interests of the organization and society in general.

CORPORATE GOVERNANCECorporate governance involves a set of relationships amongst the companys management, its board of directors, its shareholders, its auditors and other stakeholders. These relationships, which involve various rules and incentives, provide the structure through which the objectives of the company are set, and the means of attaining these objectives as well as monitoring performance are determined. Thus, the key aspects of good corporate governance include transparency of corporate structures and operations; the accountability of managers and the boards to shareholders; and corporate responsibility towards stakeholders.While corporate governance essentially lays down the framework for creating long-term trust between companies and the external providers of capital, it would be wrong to think that the importance of corporate governance lies solely in better access of finance. Companies around the world are realizing that better corporate governance adds considerable value to their operational performance:

It improves strategic thinking at the top by inducting independent directors who bring a wealth of experience, and a host of new ideas It rationalizes the management and monitoring of risk that a firm faces globally It limits the liability of top management and directors, by carefully articulating the decision making process It assures the integrity of financial reports It has long term reputational effects among key stakeholders, both internally and externallyIn a broader sense, however, good corporate governance- the extent to which companies is run in an open and honest manner- is important for overall market confidence, the efficiency of capital allocation, the growth and development of countries industrial bases, and ultimately the nations overall wealth and welfare.

PERSPECTIVE OF CORPORATE GOVERNANCE:The term perspective means: The Art of drawing solid objects on a flat surface so as to give the right impression of their relative height, width, depth, distance, etc. Apparent relation between different aspects of a problem.Three points of view.1. Stakeholders (Capital Market) Control perspective2. Organization (Management) Control perspective3. Shareholders - Control perspective

1. Stakeholders: All parties to corporate governance have an interest, whether direct or indirect, in the financial performance of the corporation. Directors, workers and management receive salaries, benefits and reputation, while investors expect to receive financial returns. For lenders, it is specified interest payments, while returns to equity investors arise from dividend distributions or capital gains on their stock. Customers are concerned with the certainty of the provision of goods and services of an appropriate quality; suppliers are concerned with compensation for their goods or services, and possible continued trading relationships. These parties provide value to the corporation in the form of financial, physical, human and other forms of capital. Many parties may also be concerned with corporate social performance.

2. Organization: The main purpose is to control i.e. through skills, intelligence, innovation, ideas, professionalism etc. Therefore, here in this perspective, resource allocation decision should rest with them.3. Shareholder: Individual or group concerned or interested with or impacted by the activities of the organization.

Issues in corporate governanceThere are several important issues in corporate governance and they play a great role, all the issues are inter related, interdependent to deal with each other. Each issues connected with corporate governance have different priorities in each of the corporate bodies.The issues are listed as below: Value based corporate culture: For any organization to run in effective way, it needs to have certain ethics, values. Long run business needs to have based corporate culture. Value based corporate culture is good practice for corporate governance. It is a set of beliefs, ethics, principles which are inviolable. It can be a motto i.e. A short phrase which is unique and helps in running organization, there can be vision i.e. dream to be fulfilled, mission and purpose, objective, goal, target.

Holistic view: This holistic view is more or less godly, religious attitude which helps in running organization. It is not easier to adopt it, it needs special efforts and once adopted it leads to developing qualities of nobility, tolerance and empathy.

Compliance with laws: Those companies which really need progress, have high ethical values and need to run long run business they abide and comply with laws of Securities Exchange Board Of India (SEBI), Foreign Exchange Regulation Act, Competition Act 2002, Cyber Laws, Banking Laws etc.

Disclosure, transparency, & accountability: Disclosure, transparency and accountability are important aspect for good governance. Timely and accurate information should be disclosed on the matters like the financial position, performance etc. Transparency is needed in order that government has faith in corporate bodies and consequently it has reduced corporate tax rates from 30% today as against 97% during the late 1970s. Transparency is needed towards corporate bodies so that due to tremendous competition in the market place the customers having choices dont shift to other corporate bodies.

Corporate governance and human resource management: Corporate Governance and Human Resource Management: For any corporate body, the employees and staff are just like family. For a company to be perfect the role of Human Resource Management becomes very vital, they both are directly linked. Every individual should be treated with individual respect, his achievements should be recognized. Each individual staff and employee should be given best opportunities to prove their worth and these can be done by Human Resource Department. Thus in Corporate Governance, Human Resource has a great role.

Innovation:Every Corporate body needs to take risk of innovation i.e. innovation in products, in services and it plays a pivotal role in corporate governance.

Necessity of judicial reforms There is necessity of judicial reform for a good economy and also in todays changing time of globalization and liberalization. Our judicial system though having performed salutary role all these years, certainly are becoming obsolete and outdated over the years. The delay in judiciary is due to several interests involved in it. But then with changing scenario and fast growing competition, the judiciary needs to bring reforms accordingly. It needs to speedily resolve disputes in cost effective manner.

Globalization helping Indian companies to become global giants based on good corporate governance: In todays age of competition and due to globalization our several Indian Corporate bodies are becoming global giants which are possible only due to good corporate governance.

Lessons from Corporate failure: Every story has a moral to learn from, every failure has success to learn from, in the same way, corporate body have certain policies which if goes as a failure they need to learn from it. Failure can be both internal as well as external whatever it may be, in good governance, corporate bodies need to learn from their failures and need to move to the path of success.

Legal Framework

SEBI Guideline as per Clause 49

I. Board of Directors

(A) Composition of Board

The Board of directors of the company shall have an optimum combination of Executive and non-executive directors with not less than fifty percent of the board of Directors comprising of non-executive directors. Where the Chairman of the Board is a non-executive director, at least one-third of the Board should comprise of independent directors and in case he is an executive director, at least half of the Board should comprise of independent directors. Provided that where the non-executive Chairman is a promoter of the company or is related to any promoter or person occupying management positions at the Board level or at one level below the Board, at least one-half of the Board of the company shall consist of independent directors.

Explanation-For the purpose of the expression related to any promoter referred toin sub-clause (ii): If the promoter is a listed entity, its directors other than the independent directors, its employees or its nominees shall be deemed to be related to it; If the promoter is an unlisted entity, its directors, its employees or its nominees shall be deemed to be related to it.

iii. For the purpose of the sub-clause (ii), the expression independent director shall mean a non-executive director of the company who: apart from receiving directors remuneration, does not have any material pecuniary relationships or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the director; is not related to promoters or persons occupying management positions at theboard level or at one level below the board; has not been an executive of the company in the immediately preceding three financial years; is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following: the statutory audit firm or the internal audit firm that is associated with the company, and the legal firm(s) and consulting firm(s) that have a material association with the company. is not a material supplier, service provider or customer or a lessor or lessee of the company, which may affect independence of the director; is not a substantial shareholder of the company i.e. owning two percent or more of the block of voting shares. is not less than 21 years of age

(B) Non executive directors compensation and disclosuresAll fees/compensation, if any paid to non-executive directors, including independent directors, shall be fixed by the Board of Directors and shall require previous approval of shareholders in general meeting. The shareholders resolution shall specify the limits for the maximum number of stock options that can be granted to non-executive directors, including independent directors, in any financial year and in aggregate.Provided that the requirement of obtaining prior approval of shareholders in general meeting shall not apply to payment of sitting fees to non-executive directors, if made within the limits prescribed under the Companies Act, 1956 for payment of sitting fees without approval of the Central Government.

(C) Other provisions as to Board and Committees The board shall meet at least four times a year, with a maximum time gap of four months between any two meetings. The minimum information to be made available to the board is given in Annexure I A. A director shall not be a member in more than 10 committees or act as Chairman of more than five committees across all companies in which he is a director. Furthermore it should be a mandatory annual requirement for every director to inform the company about the committee positions he occupies in other companies and notify changes as and when they take place.

Explanation: For the purpose of considering the limit of the committees on which a director can serve, all public limited companies, whether listed or not, shall be included and all other companies including private limited companies, foreign companies and companies under Section 25 of the Companies Act shall be excluded. For the purpose of reckoning the limit under this sub-clause, Chairmanship/membership of the Audit Committee and the Shareholders Grievance Committee alone shall be considered. The Board shall periodically review compliance reports of all laws applicable to the company, prepared by the company as well as steps taken by the company to rectify instances of non-compliances. An independent director who resigns or is removed from the Board of the Company shall be replaced by a new independent director within a period of not more than 180 days from the day of such resignation or removal, as the case may be: Provided that where the company fulfils the requirement of independent directors in its Board even without filling the vacancy created by such resignation or removal, as the case may be, the requirement of replacement by a new independent director within the period of 180 days shall not apply.

(D) Code of Conduct The Board shall lay down a code of conduct for all Board members and senior management of the company. The code of conduct shall be posted on the website of the company. All Board members and senior management personnel shall affirm compliance with the code on an annual basis. The Annual Report of the company shall contain a declaration to this effect signed by the CEO. Explanation: For this purpose, the term senior management shall mean personnel of the company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management one level below the executive directors, including all functional heads.

II. Audit Committee (A) Qualified and Independent Audit Committee A qualified and independent audit committee shall be set up, giving the terms of reference subject to the following: The audit committee shall have minimum three directors as members. Two-thirds of the members of audit committee shall be independent directors. All members of audit committee shall be financially literate and at least one member shall have accounting or related financial management expertise.

Explanation 1: The term financially literate means the ability to read and understand basic financial statements i.e. balance sheet, profit and loss account, and statement of cash flows.

Explanation 2: A member will be considered to have accounting or related financial management expertise if he or she possesses experience in finance or accounting, or requisite professional certification in accounting, or any other comparable experience or background which results in the individuals financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.

The Chairman of the Audit Committee shall be an independent director; The Chairman of the Audit Committee shall be present at Annual General Meeting to answer shareholder queries; The audit committee may invite such of the executives, as it considers appropriate (and particularly the head of the finance function) to be present at the meetings of the committee, but on occasions it may also meet without the presence of any executives of the company. The finance director, head of internal audit and a representative of the statutory auditor may be present as invitees for the meetings of the audit committee; The Company Secretary shall act as the secretary to the committee.(B) Meeting of Audit Committee The audit committee should meet at least four times in a year and not more than four months shall elapse between two meetings. The quorum shall be either two members or one third of the members of the audit committee whichever is greater, but there should be a minimum of two independent members present.

(C) Powers of Audit Committee The audit committee shall have powers, which should include the following: 1. To investigate any activity within its terms of reference. 2. To seek information from any employee. 3. To obtain outside legal or other professional advice. 4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

(D) Role of Audit Committee The role of the audit committee shall include the following: Oversight of the companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any significant findings and follow up there on. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. To review the functioning of the Whistle Blower mechanism, in case the same is existing. 12A. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate. 13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

(E) Review of information by Audit Committee The Audit Committee shall mandatorily review the following information: Management discussion and analysis of financial condition and results of operations; Statement of significant related party transactions (as defined by the audit committee), submitted by management; Management letters / letters of internal control weaknesses issued by the statutory auditors; Internal audit reports relating to internal control weaknesses; and The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee

III. Subsidiary Companies At least one independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of a material non listed Indian subsidiary company. The Audit Committee of the listed holding company shall also review the financial statements, in particular, the investments made by the unlisted subsidiary company. The minutes of the Board meetings of the unlisted subsidiary company shall be placed at the Board meeting of the listed holding company. The management should periodically bring to the attention of the Board of Directors of the listed holding company, a statement of all significant transactions and arrangements entered into by the unlisted subsidiary company.

Explanation 1: The term material non-listed Indian subsidiary shall mean an unlisted subsidiary, incorporated in India, whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year.

Explanation 2: The term significant transaction or arrangement shall mean any individual transaction or arrangement that exceeds or is likely to exceed 10% of the total revenues or total expenses or total assets or total liabilities, as the case may be, of the material unlisted subsidiary for the immediately preceding accounting year.

Explanation 3: Where a listed holding company has a listed subsidiary which is itself a holding company, the above provisions shall apply to the listed subsidiary insofar as its subsidiaries are concerned.

IV. Disclosures(A) Basis of related party transactions A statement in summary form of transactions with related parties in the ordinary course of business shall be placed periodically before the audit committee. Details of material individual transactions with related parties which are not in the normal course of business shall be placed before the audit committee. Details of material individual transactions with related parties or others, which are not on an arms length basis should be placed before the audit committee, together with Managements justification for the same.

(B) Disclosure of Accounting Treatment Where in the preparation of financial statements, a treatment different from that prescribed in an Accounting Standard has been followed, the fact shall be disclosed in the financial statements, together with the managements explanation as to why it believes such alternative treatment is more representative of the true and fair view of the underlying business transaction in the Corporate Governance Report.

(C) Board Disclosures Risk management The company shall lay down procedures to inform Board members about the risk assessment and minimization procedures. These procedures shall be periodically reviewed to ensure that executive management controls risk through means of a properly defined framework.

(D) Proceeds from public issues, rights issues, preferential issues etc. When money is raised through an issue (public issues, rights issues, preferential issues etc.), it shall disclose to the Audit Committee, the uses / applications of funds by major category (capital expenditure, sales and marketing, working capital, etc), on a quarterly basis as a part of their quarterly declaration of financial results. Further, on an annual basis, the company shall prepare a statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and place it before the audit committee. Such disclosure shall be made only till such time that the full money raised through the issue has been fully spent. This statement shall be certified by the statutory auditors of the company. Furthermore, where the company has appointed a monitoring agency to monitor the utilisation of proceeds of a public or rights issue, it shall place before the Audit Committee the monitoring report of such agency, upon receipt, without any delay. The audit committee shall make appropriate recommendations to the Board to take up steps in this matter.

(E) Remuneration of Directors All pecuniary relationship or transactions of the non-executive directors vis--vis the company shall be disclosed in the Annual Report. The company shall publish its criteria of making payments to non-executive directors in its annual report. Alternatively, this may be put up on the companys website and reference drawn thereto in the annual report. The company shall disclose the number of shares and convertible instruments held by non-executive directors in the annual report.

(F) Management As part of the directors report or as an addition thereto, a Management Discussion and Analysis report should form part of the Annual Report to the shareholders. This Management Discussion & Analysis should include discussion on the following matters within the limits set by the companys competitive position: Industry structure and developments. Opportunities and Threats. Segmentwise or product-wise performance. Outlook Risks and concerns. Internal control systems and their adequacy. Discussion on financial performance with respect to operational performance. Material developments in Human Resources / Industrial Relations front, including number of people employed. Senior management shall make disclosures to the board relating to all material financial and commercial transactions, where they have personal interest, that may have a potential conflict with the interest of the company at large (for e.g. dealing in company shares, commercial dealings with bodies, which have shareholding of management and their relatives etc.).

(G) Shareholders Quarterly results and presentations made by the company to analysts shall be put on companys web-site, or shall be sent in such a form so as to enable the stock exchange on which the company is listed to put it on its own web-site. A board committee under the chairmanship of a non-executive director shall be formed to specifically look into the redressal of shareholder and investors complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc. This Committee shall be designated as Shareholders/Investors Grievance Committee. To expedite the process of share transfers, the Board of the company shall delegate the power of share transfer to an officer or a committee or to the registrar and share transfer agents. The delegated authority shall attend to share transfer formalities at least once in a fortnight.

V. CEO/CFO certification The CEO, i.e. the Managing Director or Manager appointed in terms of the Companies Act, 1956 and the CFO i.e. the whole-time Finance Director or any other person heading the finance function discharging that function shall certify to the Board that: They have reviewed financial statements and the cash flow statement for the year and that to the best of their knowledge and belief : i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; ii. these statements together present a true and fair view of the companys affairs and are in compliance with existing accounting standards, applicable laws and regulations. There are, to the best of their knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the companys code of conduct. They accept responsibility for establishing and maintaining internal controls for financial reporting and that they have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and they have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these deficiencies. They have indicated to the auditors and the Audit committee significant changes in internal control over financial reporting during the year; significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the companys internal control system over financial reporting.

VI. Report on Corporate Governance There shall be a separate section on Corporate Governance in the Annual Reports of company, with a detailed compliance report on Corporate Governance. Non- compliance of any mandatory requirement of this clause with reasons thereof and the extent to which the non-mandatory requirements have been adopted should be specifically highlighted. The suggested list of items to be included in this report is given in Annexure- I C and list of non-mandatory requirements is given in Annexure I D. The companies shall submit a quarterly compliance report to the stock exchanges within 15 days from the close of quarter as per the format given in Annexure I B . The report shall be signed either by the Compliance Officer or the Chief Executive Officer of the company.

VII. Compliance The company shall obtain a certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance as stipulated in this clause and annex the certificate with the directors report, which is sent annually to all the shareholders of the company. The same certificate shall also be sent to the Stock Exchanges along with the annual report filed by the company. The non-mandatory requirements given in Annexure I D may be implemented as per the discretion of the company. However, the disclosures of the compliance with mandatory requirements and adoption (and compliance) / non-adoption of the non- mandatory requirements shall be made in the section on corporate governance of the Annual Report.

COMPANIES ACT 2013 CA 2013 introduces significant changes to the composition of the boards of directors. Every company is required to appoint 1 (one) resident director on its board. Nominee directors shall no longer be treated as independent directors. Listed companies and specified classes of public companies are required to appoint independent directors and women directors on their boards. CA 2013 for the first time codifies the duties of directors. SEBI amends the Listing Agreement (with prospective effect from October 01, 2014) to align it with CA 2013.

KEY CHANGES INTRODUCED BY CA 2013I. BOARD COMPOSITIONCA 2013 has introduced significant changes in the composition of the board of directors of a company. The key changes introduced are set out below:NUMBER OF DIRECTORS: The following key changes have been introduced regarding composition of the board: A one person company shall have a minimum of 1 (one) director; CA 1956 permitted a company to determine the maximum number of directors on its board by way of its articles of association. CA 2013, however, specifically provides that a company may have a maximum of 15 (fifteen) directors. CA 1956 required public companies to obtain Central Governments approval for increasing the number of its directors above the limit prescribed in its articles or if such increase would lead to the total number of directors on the board exceeding 12 (twelve) directors. CA 2013 however, permits every company to appoint directors above the prescribed limit of 15 (fifteen) by authorizing such increase through a special resolution.

RESIDENT DIRECTOR: CA 2013 introduces the requirement of appointing a resident director, i.e., a person who has stayed in India for a total period of not less than 182 (one hundred and eighty two) days in the previous calendar year.INDEPENDENT DIRECTORSCA 1956 did not require companies to appoint an independent director on its board. Provisions related to independent directors were set out in Clause 49 of the Listing Agreement (Listing Agreement).a)Number of independent directors: As per the Listing Agreement, only listed companies were required to appoint independent directors. The number of independent directors on the board of a listed company was required to be equal to (i) one third of the board, where the chairman of the board is a non-executive director; or (ii) one half of the board, where the chairman is an executive director. However, under CA 2013, the following companies are required to appoint independent directors:(i)Public listed company: Atleast one third of the board to be comprised of independent directors; and(ii) Certain specified companies that meet the criteria listed below are required to have atleast 2 (two) independent directors: Public companies which have paid up share capital of INR 100,000,000 (Rupees one hundred million only); Public companies which have a turnover of 1,000,000,000 (Rupees one billion only); and Public companies which have, in the aggregate, outstanding loans, debentures and deposits exceeding INR 500,000,000 (Rupees five hundred million only)Eg. ITC has 8 independent directors out of its 19 board members.

b)Qualification criteria:(i) CA 2013 prescribes detailed qualifications for the appointment of an independent director on the board of a company. Some important qualifications include: he / she should be a person of integrity, relevant expertise and experience; he / she is not or was not a promoter of, or related to the promoter or director of the company or its holding, subsidiary or associate company; he / she has or had no pecuniary relationship with the company, its holding, subsidiary or associate company, or their promoters, or directors during the 2 (two) immediately preceding financial years or during the current financial year; a person, none of whose relatives have or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors amounting to 2 (two) percent or more of its gross turnover or total income or INR 5,000,000 (Rupees five million only), whichever is lower, during the 2 (two) immediately preceding financial years or during the current financial year.(ii) CA 2013 also sets forth stringent provisions with respect to the relatives of the independent director.c)Duties of independent directors:Neither the Listing Agreement nor the CA 1956 prescribed the scope of duties of independent directors. CA 2013 includes a guide to professional conduct for independent directors, which crystallizes the role of independent directors by prescribing facilitative roles, such as offering independent judgment on issues of strategy, performance and key appointments, and taking an objective view on performance evaluation of the board. Independent directors are additionally required to satisfy themselves on the integrity of financial information, to balance the conflicting interests of all stakeholders and, in particular, to protect the rights of the minority shareholders. The SEBI Circular however, states that the board is required to lay down a code of conduct which would incorporate the duties of independent directors as set out in CA 2013.d)Liability of independent directorsUnder CA 1956, independent directors were not considered to be officers in default and consequently were not liable for the actions of the board. CA 2013 however, provides that the liability of independent directors would be limited to acts of omission or commission by a companywhich occurred with their knowledge, attributable through board processes, and with their consent and connivance or where they have not acted diligently.e)Position of Nominee Directors While the Listing Agreement stated that the nominee directors appointed by an institution that has invested in or lent to the company are deemed to be independent directors, CA 2013 states that a nominee director cannot be an independent director. However, the SEBI Circular in line with the provisions of CA 2013 has excluded nominee directors from being considered as independent directors. CA 2013 defines nominee director as a director nominated by any financial institution in pursuance of the provisions of any law for the time being in force, or of any agreement, or appointed by the Government or any other person to represent its interests.

WOMAN DIRECTOR Listed companies and certain other public companies shall be required to appoint atleast 1 (one) woman director on its board. Companies incorporated under CA 2013 shall be required to comply with this provision within 6 (six) months from date of incorporation. In case of companies incorporated under CA 1956, companies are required to comply with the provision within a period of 1 (one) yearfrom the commencement of the act.Eg. Archana Bhargava, chairman and managing director of United Bank of India

Duties of directorsCA 1956 did not contain any provisions that specifically identified the duties of directors. CA 2013 has set out the following duties of directors: To act in accordance with companys articles; To act in good faith to promote the objects of the company for benefit of the members as a whole, and the best interest of the company, its employees, shareholders, community and for protection of the environment; Exercise duties with reasonable care, skill and diligence, and exercise of independent judgment;The director is not permitted to: Be involved in a situation in which he may have direct or indirect interest that conflicts, or may conflict, with the interest of the company; Achieve or attempt to achieve any undue gain or advantage, either to himself or his relatives, partners or associates.II. COMMITTEES OF THE BOARDCA 2013 envisages 4 (four) types of committees to be constituted by the board:a)AUDIT COMMITTEE: Under CA 1956, public companies with a paid up capital in excess of INR 50,000,000 (Rupees fifty million only) were required to set up an audit committee comprising of not less than 3 (three) directors. Atleast one third had to be comprised of directors other than Managing Directors or Whole Time Directors. CA 2013 however, requires the board of every listed company and certain other public companies to constitute the audit committee consisting of a minimum of 3 (three) directors, with the independent directors forming a majority. It prescribes that a majority of members, including its Chairman, have to be persons with the ability to read and understand financial statements. The audit committee has been entrusted with the task of providing recommendations for appointment and remuneration of auditors, review of independence of auditors, providing approval of related party transactions and scrutiny over other financial mechanisms of the company.b)NOMINATION AND REMUNERATION COMMITTEE: While CA 1956 did not require companies to set up nomination and remuneration committee, the Listing Agreement provided companies with theoptionto constitute a remuneration committee. However, CA 2013 requires the board of every listed company to constitute the Nomination and Remuneration Committee consisting of 3 (three) or more non-executive directors out of which not less than one half are required to be independent directors. The committee has the task of identifying persons who are qualified to become directors and provide recommendations to the board regarding their appointment and removal, as well as carry out their performance evaluation.c)STAKEHOLDERS RELATIONSHIP COMMITTEE: CA 1956 did not require a company to set up a stakeholders relationship committee. The Listing Agreement required listed companies to set up a shareholders / investors grievance committee to examine complaints and issues of shareholders. CA 2013 requires every company having more than 1000 (one thousand) shareholders, debenture holders, deposit holders and any other security holders at any time during a financial year to constitute a stakeholders relationship committee to resolve the grievances of security holders of the company.d)CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR Committee): CA 1956 did not impose any requirement on companies relating to corporate social responsibility (CSR). CA 2013 however, requires certain companies to constitute a CSR Committee, which would be responsible to devise, recommend and monitor CSR initiatives of the company. The committee is also required to prepare a report detailing the CSR activities undertaken and if not, the reasons for failure to comply.III. BOARD MEETINGS AND PROCESSESThe key changes introduced by CA 2013 with respect to board meetings and processes are as under: First board meeting of a company to be held within 30 (thirty) days of incorporation; Notice of minimum 7 (seven) days must be given for each board meeting. Notice for board meetings may be given by electronic means. However, board meetings may be called at shorter notice to transact urgent business provided such meetings are either attended by at least 1 (one) independent director or decisions taken at such meetings on subsequent circulation are ratified by at least 1 (one) independent director. CA 2013 has permitted directors to participate in board meetings through video conferencing or other audio visual means which are capable of recording and recognising the participation of directors. Participation of directors by audio visual means would also be counted towards quorum. Requirement for holding board meeting every quarter has been discontinued. Now at least 4 (four) meetings have to be held each year, with a gap of not more than 120 (one hundred and twenty) days between 2 (two) board meetings. Certain new actions have been identified, that require approval by directors in a board meeting. These include issuance of securities, grant of loans, guarantee or security, approval of financial statement and boards report, diversification of business etc. Approval of circular resolution will be by a majority of directors or members who are entitled to vote on the resolution, irrespective of whether they are present in India or otherwise.

GOOD GOVERNANCE FOLLOWED BY BRAZIL. In the 1950s and 1960s most Brazilian firms were controlled by families with majority shareholders doubling as executive directors. But now they have been offered for public issues (non-executive directors). Brazil is one of the most govern countries in the world. The Brazilian Institute of Corporate Governance is the most recently updated standard and is available as a single document including practices other than those already mandatory for Brazilian organizations at the time it was issued, e.g., proxy voting and poison pills, access to the agenda, transparency of minutes of meetings, and board efficiency. The IBGC code of Brazil was issued in 1999 has been updated four times and is currently in its fifth edition that was introduced in the 2009 edition. The 2009 edition revised recommendations intended to improve governance systems and increase performance and longevity. At present the latest edition of IBGC code is divided into six sections: ownership, board of directors, management, and independent auditors, board of supervisors and ethical conduct/conflicts of interest. The five first sections describe practices and guidelines for each area in the Corporate Governance system. The last section deals with ethical conduct and behaviors, policies and recommendations for avoiding conflicts of interest, and improper use of organizational assets and information. The Brazilian Government created Participatory Health Councils (PHCs) to allow citizen participation in the public health policy process. PHCs are advisory bodies that operate at all levels of government and that bring together different societal groups to monitor Brazils health system. Today PHCs are present in 98% of Brazilian cities.

GOOD GOVERNANCE FOLLOWED BY RUSSIA

Russia emphasized the idea of people-centred development that allows the citizens to have the opportunity to participate in identifying development priorities. Over 6, 05,000 individuals from different parts of the world have already participated in the survey and their opinions will be taken into consideration in the process of forming the new post-2015 development agenda. Participants in the survey were asked to vote for the changes that would make the most difference to their world. Currently out of sixteen honest and responsive government countries on the website Russia ranks third overall also following good education and better healthcare. In 2011, Vladimir Putin suggested that Russia should share other countries governance aspirations and defined a course toward open government, which is based on citizen involvement in current affairs of public institutions. Russias also started anti-corruption campaign an attempt to secure the national loyalty of the state elite by increasing their stakes in Russian institutions. To this end, bureaucrats have been banned from possessing foreign shares, bank accounts and certain other assets. In these the state Officials are also supposed to report major purchases worth more than three times their annual salary, registered to themselves, their spouses and children under 18.

GOOD GOVERNANCE FOLLOWED BY INDIA Digital India is a step towards transformation and would ensure that Government services are available to citizens electronically. It would also bring in greater accountability through mandated delivery of governments services electronically.ie computers, internet, etc. Booth stall voting that is still followed in the rural parts of the India which can be transferred to electronic voting system to create peoples participation more for making decisions and creating good governance.

India has too few excellent institutions. Its share in the worlds top universities should be proportional to its share of global gross domestic product -- meaning 10 universities in the top 500 cities (it currently has just one). Making that an official goal can help increase the governance of India.

Innovation in agriculture sector. Gujarat is not a traditional agricultural producer, but it has improved productivity with initiatives like its white revolution in milk production. The whole nation, still greatly dependent on farming, needs enormous improvements.

RATING THE BRICS ACCORDING TO THE GOVERNANCE THEY FOLLOW:-

COUNTRIESBRAZILRUSSIAINDIACHINASOUTH AFRICA

OWNERSHIP STRUCTURE AND THE EXERCISE OF CONTROL RIGHTS66165

1OWNERSHIP STRUCTURE11010

2PROCESS FOR HOLDING OF ANNUAL GENERAL MEETING11111

3CHANGES IN SHAREHOLDINGS11011

4CONTROL RIGHTS11011

5RULES AND PROCEDURES GOVERNING THE ACQUISITION OF CORPORATE CONTROL IN CAPITAL MARKETS11011

6ANTI-TAKEOVER MEASURES11011

FINANCIAL TRANSPARENCY AND INFORMATION DISCLOSURE67355

1FINANCIAL AND OPERATIONAL RESULTS11111

2COMPANY OBJECTIVES01011

3THE DECISION MAKING PROCESS FOR TRANSACTIONS WITH RELATED PARTIES11111

4RULES AND PROCEDURE GOVERNING EXTRAORDINARY TRANSACTIONS11011

5BOARDS RESPONSIBILITIES REGARDING FINANCIAL COMMUNICATIONS11111

6CRITICAL ACCOUNTING ESTIMATES11000

7IMPACT OF ALTERNATIVE ACCOUNTING DECISIONS11000

CORPORATE RESPONSIBILITY AND COMPLIANCE55315

1POLICY AND PERFORMANCE IN CONNECTION WITH ENVIRONMENTAL ANDSOCIAL RESPONSIBILITY11001

2MECHANISMS PROTECTING THE RIGHTS OF OTHER STAKEHOLDERS IN BUSINESS11111

3A CODE OF ETHICS FOR THE BOARD AND WAIVERS TO THE ETHICS CODE00000

4A CODE OF ETHICS FOR ALL COMPANY EMPLOYEES11101

5IMPACT OF ENVIRONMENTAL AND SOCIAL RESPONSIBILITY POLICIES ON THE FIRMS SUSTAINABILITY11001

6THE ROLE OF EMPLOYEES IN CORPORATE GOVERNANCE00000

7POLICY ON WHISTLEBLOWER PROTECTION FOR ALL EMPLOYEES11101

Case Study : ICARE :Ishwar Charitable Trust (ICT)was established in 1982 by Dr. Sushil Choudhry in the name of his Late. Mother Smt. Ishwar Choudhry.ICARE Eye Hospital was established in 1993 in Noida under the ICT.Presently ICARE is situated on an acre of land in Noida and equipped with the entire range of state of the art diagnostic, curative, and surgical equipments in the field of Ophthalmology. ICARE is manned by a highly qualified skilled, competent and motivated medical, paramedical and support staff providing comprehensive diagnosis, treatment and surgical services covering the entire range of ocular sub-specialities comparable to international standards. They have well-equipped OPD with nine sub-speciality clinics examines and treats over 200 walk-in patients every day.

ICARE as an NGOexists to provide the same standard of eye care to the under privileged rural population by their Outreach Programme in the Community Wing. The Outreach Programme screens andtreats approximately 150,000 people for eye diseaseand performs about8000 surgeries in a year free or at a very subsidized cost.

The post graduate institute caters to the burgeoning unmet demand of quality healthcare education and training. The institute is accredited with National Board of Examination for DNB courses in the field of ophthalmology. The institute conducts several clinical courses for medical and paramedical personal to increase ophthalmic human resources in the country to provide continuing skills development.VisionTo excel in cutting edge technology in eye care, education & research in ophthalmology.MissionICARE is committed to provide comprehensive quality ophthalmic services of International Standards to all sections of society at an affordable cost.

Facilities providedCorneal Collagen Crosslinking with Riboflavin (C3-R)ICARE is the only Hospital in NOIDA and the NCR region to have C3R.It is utilized to treat corneal ecstasies especially keratoconus, a degenerative condition characterized by bulging of cornea. Treatment through C3R reduces the need to go in for corneal transplantation & it has helped these patients to accept glasses & Contact Lens which enhances visual quality.

Visual Therapy Clinic

Visual Therapy Clinic provides Vision Therapy through the sophisticated software program which enhances the quality of vision in children who has lazy eye (amblyopia). Other equipments like Synaptophores, Prisim Bars, Brock String and Flippers help the patients to get rid off eye strain in cases like Ocular Muscle Weakness, Squint, Computer Vision Syndrome etc.

LASIK VISX Iris Registration Technology

ICARE is the only Institute in NOIDA which offers latest LASIK services of international standards to people desirous of getting rid of spectacles or contact lenses.

ICARE has upgraded its VISX CustomVue Technology to VISX Iris Registration Technology which is a non-contact method of aligning the cornea. It tailors a distinct correction for each individual eye, based on the unique characteristics of their vision resulting in the best correctionCorneal Specular Microscope

Corneal Specular Microscope is an advanced tool available only at ICARE in Noida. Through this technique it helps the ophthalmologist to detail out any minute problems in the Corneal Transparency. It also helps to diagnose different Corneal dystrophies & degenerations.Fundus Fluorescein Angiography

Fundus Fluorescein Angiography helps an ophthalmologist to know about the circulation of retina in the YE in cases of patients with diabetic retinopathy, macular problems & other retinal problems.Optical Coherence Tomography (OCT)

Investigation department at ICARE is upgraded with Spectral Anterior Segment OCT which is the latest addition to its existing OCT. With the help of this technology different scans of eye are taken at a minute level which enables the ophthalmologist to study the detail structure of the eye.

It helps as a diagnostic tool to treat diseases like age related macular degeneration, diabetic retinopathy, vascular occlusions of the retina, macular holes etc. which are on the rise given the drastic life style changes that have occurred in the recent years, especially in the urban populations.Latest Technology for Cataract Removal

There are various state of art phaco machines available at ICARE. The latest machine with a cold phaco helps the operating surgeon to remove the hardest of hard cataract and thus provide the benefit of MICS to the patient for stitchless cataract surgery. Alcon Infinity Phaco system with Ozil technology AMO Signature Phacomulsification with FX & Ellipson system AMO Sovereign Phacoemulsification System AMO Compact with ICE Phacoemulsification System Bausch & Lomb - Millenium Phacoemulsification SystemLow Vision ClinicICARE is the leading hospital in NCR in providing latest state of art technology for the infants & younger generation suffering from eye disorders through its specialized equipments & team. The special vision charts & tools available in the clinic help to check vision in infants & toddlers for early identification and intervention for any sight threatening problems at such a young age.ICARE EYE BANKThe ICARE Eye Bank was instrumental in procuring 700 donor eyes and restoring eyesight to 522 sightless people over the decade.It is an institutional life member of the Eye Bank Association of India (EBAI). ICEB is a registered eye bank under the Transplantation Human Organ Act 1995, Govt. of India. ICEB has set standards of excellence in eye banking and is the model eye bank for north eastern Uttar Pradesh. ICEB was instrumental in procuring 700 donor eyes & restoring eye sight to 522sightless people over the decade.The Spectrum of Activities of ICEB Public awareness programs on eye donation. Hospital based Cornea Retrieval Program to enhance eye donation. Recovery, preservation, evaluation and distribution of donor corneas by its state of art equipments available at the Eye Bank. Screening of donor blood for infectious diseases. Training of eye bank professionals. Research

ICARE SupportersICARE has been able to grow only with the constant and unflagging support of their supporters. Their supporters have stood by their side through all the ups and downs they have faced. Being a source of constant encouragement, their supporters have helped in sustaining our growth and in ensuring that we reach out to the greatest number of people in need of their servicesRotary Club of Delhi South East helped them by sponsoring USD 80,000 for Hospital Equipments.Projects & Development India Ltd. Helped them by donating a Slit Lamp and Applanation Tonometer for the underprivileged villagers for their Community wing.National Small Industries Corporation conducted 26 Eye camps, 3250 patients screening, 260 surgeries and dispensing 390 spectacles in Delhi+NCR for the underprivileged section of the society.Advance Metering Technology Ltd. & Mr. Vikram Rana Dey, Executive Director of PKR Groups donated an Ambulance for the transporting of needy and elderly patients from their village homes to ICARE Eye Hospital Noida for Ophthalmic services and cataract surgery. On recovery, patients are also sent back to their homes. This ambulance will benefit approximately 20-30 patients a day.

Community ServicesMost modern state-of-the-art ophthalmic services are usually available in and around the urban areas of our country leaving large sections of the population unserviced. ICARES Community Services aim at reaching modern eye care services to the doorstep of the patients irrespective of their ability to pay.

ICARE currently runs 15 Peripheral Centres in the National Capital Region servicing rural areas in Uttar Pradesh, Haryana, Rajasthan and the underprivileged population living in the Delhi slums. Patients requiring surgical intervention are transported free of charge to ICAREs tertiary facility located at NOIDA. Post-surgery, they are dropped back to their respective peripheral centres. All post-operative check-ups are carried out at the centre itself.

In addition to the regular peripheral centers being serviced by ICAREs community services team, other Community activities being carried out by them include: School Screening Program Eye Screening Camps in association with RWAs, Empanelled companies and Corporate. Ocular health awareness camps. Eye donation awareness camps. Diabetic Retinopathy Screening & awareness camps. Glaucoma Screening and awareness camps. Talk shows, media coverage to spread awareness about eye health

Rural Peripheral Centres

ICARE has 15 Peripheral Centres in the National Capital Region servicing rural areas in Uttar Pradesh, Haryana, Rajasthan and the underprivileged population living in the Delhi slums. Close interaction is maintained with the local community leaders to ensure smooth running of the peripheral centres.

Mega Camps

In addition to the 15 regular centres, ICARE also provides ophthalmic services at Mega Camps with the blessings of Sant Rajinder Singh ji Maharaj organized by Sawan Kripal Ruhani Mission held in February and September every year at Kripal Bagh, Delhi and at NTPC, Dadri, Uttar Pradesh.

They have been a part of these mega camps since the past 8 years. On an average, 500 - 1000 patients are screened at these mega camps. Surgical services have been provided to 1238 patients in 2009 2010.

Secondary Eye care Centre

ICAREs effort has always been to provide quality ophthalmic services to those in need. In an attempt to further expand the reach of their services, they have established a well-equippedSecondary Eye care centre at Khurjain Uttar Pradesh in association with the Rotary Club of Khurja. Dayawati Mool Chand Netra chikitsalaya, Khurja, started functioning from September 2009. Together with daily OPD services, the centre has a fully functional Operation Theatre along with an optical shop and a pharmacy. Screening camps are regularly organized within a radius of 100 kilometers around Khurja.

Associated NGOs

They are also associated with the following NGOs and extend our ophthalmic services to their beneficiaries. They conduct regular eye screening camps with them. Karuna Mai Ma Ashram with the blessings of Nand Baba ji Sawan Kripal Ruhani Mission with the blessing of Sant Rajinder Singh ji Maharaj Delhi Bharat Vikas Foundation Sai Samiti, Noida Sai Bhakta Samaj, Delhi Lioness Clubs, Noida and Delhi Inner Wheel Clubs Delhi Midtown Round Table, Delhi Jain Milan, Shahdara Rotary Clubs Sree Ma Trust, Bombay Human Vision Society, Delhi All India Confederation for the BlindICAREs operating model: comprehensive, quality care at the doorstep

Surgical services and Post-op care 40-50 surgeries daily. Across sub specialties (80% cataract, 20% retinal, corneal problems). Free post-op care for distant rural patients for 2 days with boarding, loading, medicines.Community Outreach 2-3 eye screening camps daily. 100 screenings per camp. 1500 camps annually. 20,000 patients transported to and from their villages for surgery annuallyTraining and Capability Building Training 80 medical and paramedical personnel annually. 13 doctors DNB, Fellows. 30 optometrists IGNOU 20 paramedics from EWS Registered with Diplomat of National Board as a credible training provider + IGNOU.Walk-In Screening & OPD Services 1000 patients screened each day. 70% screenings are free (via outreach and a charitable OPD) Comprehensive screening with state of art diagnostic equipments.

Case Study Akshaya PartaThe Akshaya Patra Foundation is a not-for-profit organisation headquartered in Bengaluru, India. The organisation strives to fight issues like hunger and malnutrition in India. By implementing the Mid-Day Meal Scheme in the Government schools and Government aided schools, Akshaya Patra aims not only to fight hunger but also to bring children to school.Since 2000, the organisation has worked towards reaching more children with wholesome food on every single school day.Akshaya Patra is continuously leveraging technology to cater to millions of children. Its state-of-the-art kitchens have become a subject of study and they attracts curious visitors from around the world.In partnership with the Government of India and various State Governments, and inestimable support from many businesses, philanthropic donors and well-wishers; they have grown from their humble beginnings in the year 2000, serving just 1,500 children across 5 schools. Today Akshaya Patra is the worlds largest (not-for-profit run) mid-day meal programme serving wholesome food to over 1.4 million children from 10,845 schools across 10 states in India, a result of the successful partnership with the Government of India, various State Governments and generous supporters.For the past five years, our NGO has been awarded for excellent reporting by the ICAI.

VisionNo child in India shall be deprived of education because of hunger.MissionTo feed 5 million children by 2020.

Akshaya Patra GovernanceTheir Governance Philosophy is based on a set of laws, rules and regulations and good practices that enables the organisation to perform efficiently and ethically and create value for all its stakeholders.The organisation is committed to the belief that the adoption of the best governance practices will take us a long way ahead.The roots of our value system and governance practices reflect the culture of the trusteeship. The core philosophy rests on 4 basic tenets: Board accountability to the organisation and stakeholders Equitable treatment to all stakeholders Strategic guidance and effective monitoring by the Board Transparency and timely disclosure

TransparencyTransparency, especially for an NGO, is the key to trust and reliability. Akshaya Patra hence upholds absolute transparency in all its activities.For this purpose, we comply with the International Financial Reporting Standards (IFRS). The IFRS reporting which was adopted in 2008-09 has contributed substantially in building confidence amongst the stakeholders of the organisation.They also comply with the Indian Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and are up to date on accounting standards. At the end of each financial year an Annual Report with financial audits and statements is published and made available to the stakeholders.

Business Model

As we can see,82% of their funds are used in all the programs conducted by this organisation, while 14% is management cost including salaries, and other expenses like audit fees etc., and 4% of the funds are used in advertisements, creating awareness so as people can also contribute towards this vision.51% of the funding is from Central and state Government grants and subsidies and 49% is Self raised.For a meal costing 7.50, the Government gives4.50, while the trust contributes 3 by using donations.

Akshaya Parta's strategies and Programs conducted by themEradicating HungerFor majority of the children across the country, the mid-day meal is the ONLY meal of the day. Akshaya Patras strategy of providing an unlimited meal stems from the above understanding. Children are encouraged to eat as much as they want, thereby eradicating hunger to a great extent and ensuring that children can focus on their school lessons.EducationMid-day meals at government schools and government-aided schools across India encourage children to come to school and stay back for education, curbing child labour as well. According to a longitudinal impact assessment done by leading research firm, AC Nielsen from 2006-10 On an average, student enrolment in Class I increased by 23.3% during the first year of program implementation in all the centers measured. Overall attendance in the schools measured increased by a total of 11.67%. Close to 85% of Heads of institutions/teachers across all locations reported that the proportion of students getting higher grades has increased, while the proportion of students getting lower grades has reduced.Empowering women and promoting gender equalityThe organization gives employment (full time and part time) to close to 6000 people (mix of both genders) in its kitchens and delivery operations across the country. Of this, there are approximately 1000 female cookscum-helpers working only in the decentralized school based-kitchens of Baran (Rajasthan) and Nayagarh (Orissa), thereby reducing poverty to a certain extent.Improvement of HealthThe mid-day meals served to children undoubtedly have an impact on their health. According to AC Nielsens longitudinal study, around 78.2 % of all parents across all locations said that their childs health had improved due to having the TAPF midday meal at school.Environment SustainabilityThe Akshaya Patra Foundation also works towards environment sustainability by introducing various elements in everyday operations across locations. Some of the examples are Bio-gas plants (Currently in Bangalore) wherein solid food waste is converted into fuel which is utilized in the form of diesel and briquettes in the kitchens itself. An estimated INR 10.08 lakhs is saved per annum.1. Stainless steel (Across all locations) - 100% recyclable, hygienic and corrosion-resistant.2. Gruel Free Rice Cooking (Currently practiced in Hubli) Earlier each cauldron consumed 270 litres of water, but after the implementation of this practice, only 110 litres is used, resulting in 16, 000 litres of water saved every day.Use of briquettes (Currently in Bellary) a biofuel substitute to coal and charcoal.

Other Programs Certain that the primary cause of Akshaya Patra is to actually compliment the creation of srila prabhupad by implementation of the mid-day meal program. But, apart from the mid-day meal program Akshaya Patra implements other feeding and socio-developmental initiatives too. Some of the programs are:

Feeding ProgramsSocio-developmental Initiatives

Anganwadi feedingAfter class tuitions

Feeding expecting and lactating mothersLife skills program

Feeding programs in special schoolsCommunity health camps

Subsidised lunch for the economically backwardScholarship program

Feeding runaway childrenHealth check-up camps

Feeding programmes in old-age homes

Feeding the homeless

Disaster relief

Case Study : The Andersen vs. Enron ScandalIntroduction Arthur Andersen was a son of a Norwegian immigrant. After attending evening school and working as a mail boy during the day, Arthur was hired as an assistant controller of Allis- Chalmers in Chicago. This is where his interest for public accounting was founded. He continued his studies of accounting at the University of Illinois and Northwestern University. At the age of 28 Andersen and DeLany founded Andersen, DeLany& Co; later in 1918 to become Arthur Andersen& Co. Andersen continued his devotion to the firm until his death in 1947. Arthur Andersen was a great believer of the need of high standards in the accounting industry. He argued that the accountants responsibility should lie not with the clients but the investors. The companies motto remained Think straight, act straight for many years to come. However, in 2001 the auditing and consulting firm got a tough blow, which it didnt survive. Something Arthur Andersen himself probably would have never imagined to happen. Andersens severe punishment The Enron auditing scandal marked the end for the once so prestigious auditing firm, Arthur Andersen. Around 85.000 employees worldwide had to loose their job. Partners lost their investments. Was the destruction of Andersen the right decision? Is it justified to blame the whole worldwide company network for what happened at Enron? For this, we would have to go deeper into the case and look from an ethical perspective upon what happened. How Andersens loose internal controls created the potential for ethical failure ?Arthur Andersen consisted of an accounting and consulting wing. Employees were expected to show a maximum of dedication. Team building, extensive training and morale raising exercises were an important part of the company culture tools. All this was founded strongly on the one-firm philosophy of Arthur Andersen himself. This implied widespread integration of departments amongst each other. How, with this seemingly healthy company culture, could it have turned in such a disaster? Taking a look at the company history, the Enron lawsuit appears not to be the only case of fraudulent auditing. Until today, there are around a 100 civil lawsuits still pending. Every action implies ethical judgment, it can become habitual and unconscious but once we reflect on why we do things, we invoke ethical principles. (John Hooker, May 2005, Carnegie Mellon University) The Andersen problem was the fact that the HQ seemingly had lost control over the rest of the company network. There was no higher level commitment to the ethical issues. This meant that some employees could act out of misplaced self-interest (Act-Egoism) or think they were acting for the companys good (Act-Utilitarianism), whereas they were not. Neither the company CEO (Joseph Berardino) nor the CFO did have the insight into the amount of damage that was already done, by some employees. Citing an extract from a BBC News article concerning Mr. Duncan, the former head of the Enron account: He only realized that he had broken the law after poring over legal textbooks, and admitted to his family in March that he thought he had committed a crime. Mr. Duncan, who had in January questioning claimed innocence, said his decision to admit guilt followed "a lot of soul searching about my intent and what was in my head at the time". From; Enron auditor feared Lawsuit, May 15 2002, BBC News The lack of control meant the regional partners could keep close relationships with companies such as Enron, from which it profited, for the time being. The positive attitude towards these practices did not restrain itself to one office; it became a global network issue. But at the time, there was nobody to see the fatal signs and prevent further escalation.

Why arms length relationships are crucial for ethical integrity in auditing Every country has its General Accepted Accounting Principles, they may differ per country to some extent, but the main point is globally accepted: An auditor must be objective and free from bias at all times. He/She also has to practice conservatism. This must be rooted deeply into the company practices. Under Act-Utilitarianism, means to reach a goal can get distorted. The main goal for Andersen became to have the best reputation and more clients, and as a result, bring in more money. This is not wrong de facto, but siding with clients and accepting their malicious accounting system, no matter how big they are, results in absence of objectiveness and brings conservatism in danger. Besides that, certain social policies and generally accepted ethical rules are ignored. Though this may have seemingly profitable results in the short run, it destroyed the long nourished company reputation which made Andersen so big in the first place.

The logic of indicting the entire company for ethical failures Human nature, being a social person, demands people to relate to others. In the Andersen case, seeing some executives having huge success with their, alas, risky ethical approach, made the other employees to practice a Relativism way of decision making. This implied that employees began to involve in the same practices and didnt see the actual danger of it. Why indict the whole company? The fact that the company participated in these malicious practices, not only at the Houston office, completely destroys the credibility of the firm. Andersen violated many GAAP principles and other social laws, despite that after the Waste Management case the firm agreed to the SEC consent decree. This may be ethically justified in the employees point of view, but it makes them free-riders in the eyes of society. There are certain rules in society, a way to maintain justice, which a company has to consider, no matter what the main ethical base may be. If those rules are violated, the firm might want to do business; but nobody would want to tarnish their own credibility by doing business with the firm. The attitude towards Andersen could be well described by the victims of the Baptist Foundation of Arizona case, which also filed bankruptcy after fraudulent accounting practices. Citing an article from Salon.com dealing with the Andersen issue: some BFA victims have braved the hot sun from time to time to picket Andersen's elegant headquarters in Phoenix. They've even thought up a song, which not only dates them, but also expresses their bitter sentiments. To the tune of "Where Have All the Flowers Gone," the BFA victims like to sing: "Where has all the money gone? Just Ask Arthur Andersen ..."From; Arthur Andersen and the Baptists; Feb.7 2002; Salon.com How could Andersen have been able to avoid this disaster?It may seem surprising, but in the early 1980s, almost no company took the initiative to set up its own Corporate Ethics Programme. A company, especially a financial one, and suffer greatly from distorted ethics. Apart from the fines and court judgments a company can loose billions and even cease to exist at all. Seeing the amount of damage that can result from ethical misbehavior, such a programme is crucial for a company, especially one of scale. With the increased focus by the media on corporate conduct, government pressure and growing maturity of business institutions, a company cannot do without.

Besides a standard Corporate Policies Scheme a company can do the following: Set up a Code and Compliance programme: regulate behavior of employees; deal with conflicts of interest, bribing, anti competitive behavior etc. Set up an Identity and Values programme: deals with what the corporation stands for; integrity, respect for others, service to stakeholders etc. Give regular Corporate Ethics trainings Assign one contact person at every office to deal with ethical issues Become member of Ethics Officers Association for more support If Andersen would have integrated more conscious moral behavior in its company culture, much damage could have been avoided. For example the confusion about what is ethically acceptable and what isnt in the company. After all, for an auditing firm, especially today, this is one of the things that make a rich ground to cultivate success.