The Hindu : Dr. Reddy's Labs and Tisco bag corporate excellence awards

Online edition of India's National Newspaper
Wednesday, Jan 01, 2003

Business

Business

Dr. Reddy's Labs and Tisco bag corporate excellence awards

By Our Legal Correspondent

NEW DELHI DEC. 31. The Vice President, Bhairon Singh Shekhawat, today presented the `corporate excellence awards 2002' instituted by the Institute of Company Secretaries of India (ICSI) to Tata Iron and Steel Co. (Tisco) and Dr. Reddy's Laboratories (DRL) in the private sector and IBP Co. Ltd. in the public sector.

The `ICSI life time achievement award for translating excellence in corporate governance into reality' was bagged by the Chairman of Cipla Ltd., Y. K. Hamied. Awards were also presented to the company secretaries of the three best governed companies.

The awards instituted in 2001 is to fulfil the twin objectives of creating widespread consciousness towards corporate governance among Indian corporate citizens and to reward excellence in the practice of good governance.

The citation for DRL said the company had excelled in all the important dimensions of corporate governance. It had shown high performance in the relevant parameters of sales, growth, profitability and shareholder value.

On Tisco, the citation said the company had emerged as the lowest cost steel producer in the world. It had reinforced its survival prospects by adopting risk management policies and practices and had delivered sustained high performance.

On IBP, the citation said the company with high performance in petroleum products had earned excellent rating for ten consecutive years and had excelled in all important dimensions of corporate governance.

Speaking on the occasion, Mr. Shekhawat noted that worldwide corporate debacles in recent times had amply demonstrated that undue emphasis on profits and market expansion at the cost of good governance was disastrous.

He said many corporates erroneously felt that profit and ethical corporate management practices were incompatible. For them wealth making could only be promoted through unethical practices.

He also expressed anguish over the fact that corporates often ignored the interest of the public on whose money they had established their industrial or business empire. He said small investors were often at the receiving end of corporate manipulation and mismanagement.

The Vice President felt that with the investing public becoming steadily more vigilant and investors both institutional and overseas mindful of governance benchmarks in place, corporate governance was used to evaluate a company's competitiveness, to attract investment and its overall potential world.

He was of the view that excellence in performance of the corporate sector could be achieved only through accountability, transparency, quality of information and by fulfilling their obligations towards society.

New norms for M&As shortly

Explaining the steps taken by the Government, the Secretary, Department of Company Affairs, Vinodh Dhall said with a view to checking corporate frauds and failures, the Government would soon revamp the accounting standards while plugging the loopholes in the norms for mergers and acquisitions, preferential allotment of shares, inter-corporate deposits and related party transaction.

He said the Naresh Chandra Committee report had been put out for public comments and after considering some suggestions "we will implement it.'' He said the Government was also working on stringent norms for bringing greater accountability on auditors.

Further, he said the Government was thinking of tightening the norms for inter-corporate deposits (ICDS) as many companies had channelised funds raised through ICDS to invest in stock markets.

The former Chief Justice of India, M. N. Venkatachalaiah, who was the Chairman of the Jury that selected the awardees, hoped that these awards would help in positioning good corporate governance as something desirable rather than enforced.

The President of the ICSI, S. Gangopadhyay, Vice President, Pavan Kumar Vijay and Secretary, S. P. Narang explained the significance of the awards and the method of selection of the awardees.

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