104th Meeting of Board of Directors held on 4th Sept. 2006.

MINUTES OF THE 104th MEETING OF THE BOARD OF DIRECTORS OF GHRSSIDC HELD ON 4th September, 2006 at 11.00 A.M. AT HOTEL MANDOVI, PANAJI
 
The following members were present
     
1) Mrs. Victoria R. Fernandes, MLA Chairperson
     
2) Shri Savio De Souza Director
     
3) Shri Keshav K. Kamat Director
     
4) Shri Girish Chodankar Director
     
5) Shri Nilesh S. Pednekar Director
     
6) Shri Venkatesh A. Dessai Director
     
7) Shri Prasad R. Naik Dessai Director
     
8) Shri Manuel Vaz Director
     
9) Shri Dinesh Nair, Director
     
10) Shri Nikhil U. Desai Director
     
11) Shri Prasanna Acharya
Asst. Director, Industries, Trade & Commerce
Special Invitee
     
12) Shri H.T. Toraskar,
Under Secretary (Industries)
Special Invitee

 


Item No.1 : Leave of Absence
 
Shri William Gonsalves, Director remained absent without intimation. As decided in 103rd Board Meeting, leave of absence was not granted to Shri Gonsalves. Leave of absence was granted to Secretary (Industries).
 
Item No.2: Confirmation of the Minutes of the 103rd Board Meeting
 
M.D. read out the Minutes and Action taken report of the 103rd Board Meeting of the Corporation and _after further deliberations / discussions, the minutes were confirmed with the following changes/suggestions.
 
Any other Item
  1.  
The Board authorized the M.D. to formulate the VRS scheme in detail and submit the scheme for approval in the next Board Meeting. M.D. informed the Board that the proposed VR Scheme has been discussed with the Union of GHRSSIDC and they have been asked to come out with necessary suggestions in this regard.

 

2.
As regards privatization of the 3 emporia, it was informed by M.D. that Employees Union has reservations in the matter and requested the Board to keep the matter in abeyance for the time being as the Employees' Union has assured full cooperation to the management in ensuring profitability of the existing emporia. M.D. also informed that the employees were now showing keen interest in generating additional sales. The Board noted the same and deferred the implementation and authorized M.D. to work out further modalities to increase the sales of these emporia.
     
Item No.3  
To consider and approve the provisions made in the Accounts and to approve the Profit & Loss Accounts for the year ended 31st March, 2006 and the Balance Sheet drawn as at that date along with the schedules and notes attached thereto
 
M.D. read out the Balance Sheet and Profit & Loss Account and expressed grave concern over the huge losses made by the Corporation to the tune of Rs.123.00 lakhs during the financial year 2005-06 which he stated was the highest in the history of the Corporation. He informed that the main reasons for the losses were on account of decrease in turnover of steel, which is the major trading activity of the Corporation. This was due to increased competition from the private steel traders.

 


M.D. also stated that additional activities have to be undertaken by the Corporation and other drastic cost cutting measures have to be implemented, with immediate effect so as to improve the profitability. During the discussion, 'Mr. Girish Chodancar expressed his displeasure at the financial results shown, by the Corporation and he stated that the Corporation has to perform well in the current year. The Board members were concerned about the losses made by the Corporation and it was unanimously decided to constitute a Committee to study the reason for losses and submit a report to the Chairperson with 15 days from the date of constitution of the Committee. It was therefore decided to constitute a Committee of the following Directors.
     
  1) Shri Keshav K. Kamat
     
  2) Shri Savio De Souza
     
  3) Shri Nilesh Pednekar
     
  4) Managing Director
 
After making the above suggestion, the board approved the Accounts for the year ended 31st March, 2006 as per resolution below

 

RESOLUTION No.1013
 
"Resolved that the following Provisions made in the Accounts for the year ended 31" March, 2006 be and is hereby approved".
 
   
(i) Depreciation Rs. 6,40,812.00
   
B. The following additions have been made to Fixed assets during the year 2005 - 2006 be and are hereby approved.
   
  Leasehold land 176760.00
     
  Office Equipment 7032.00
     
  Furniture & Fixtures 16978.00
   
C. APPROVAL OF ACCOUNTS
   
  The following Resolution may be seed:

 


RESOLUTION:1014
   
 
"Resolved that the draft Balance Sheets as at 3103.2006 and the Profit & Loss Account with Schedules and Notes attached thereto, now placed before the Board be and are hereby approved and that Chairperson of the Company , Smt. Victoria Fernandes, Shri Nikhil U. Desai, Managing Director and Shri R.S. Parab, Manager[Accounts] of the Corporation, be and are hereby authorized to sign the same and the Accounts be submitted thereafter to the Statutory Auditors for their Report thereon"
 
Item No. 4  
To approve Draft Directors' Report to Shareholders for the year ended_ 315t March, 2006
 
M.D. read out the agenda note on item no.4 and after brief discussion, the draft Directors' Report was approved as per the resolution below
 
RESOLUTION NO: 1015
   
 
"Resolved that the draft Directors' Report in respect of the year ended 31st March, 2006 initiated by the Managing Director for the purpose of identification and submitted to this Meeting be and is hereby approved."
   
  "Resolved further, that the Chairman be and is hereby authorized to sign and authenticate the same on behalf of the Board of Directors."
   
 
"It is further resolved that the Managing Director be and is hereby authorized to convene the Annual General Meeting within the Statutory period of 30.09.2006."
     
Item No.5   Approval of Schemes to be implemented by GHRSSIDC by obtaininq Grants in aid from State Government
 
M.D. read out the agenda item No.5 and explained in detail the objective of the concerned proposal to the Board and after a brief discussion the board approved the schemes prepared by the Corporation and authorized M.D. to submit the following schemes to the Government for approval for release of grants in aid for implementation of these schemes

 


 
1. (i) Conducting Training Programmes
Rs. 30.00 lakhs
       
  (ii) Marketing support and documentation of Goan Handicrafts
Rs.15.00 lakhs
       
  (iii) Website
Rs.10.00 lakhs
       
  (iv) Advertisement & Publicity
Rs.15.00 lakhs
       
2. (i)
Scheme for rural Artisans for participating in interstate crafts melas,  exhibitions and interstate tour for visiting handicrafts establishments in other states within the country.
Rs.25.00 lakhs
       
  (ii) Organisation of Aparant Maand
Rs. 30.00 lakhs
       
3.  
Scheme for contributing 25% share during organization of Crafts Bazaar Scheme implemented by DC (handicrafts), Govt. of India
Rs. 5.00 lakhs
     
Item No.6 Re-tenderinq of work for interior decoration of Emporium at Baba Kharak Singh Marg, New Delhi
 
M.D. informed the Board that the GHRSSIDC has been allotted space for setting up Handicrafts Emporium at Rajiv Bhavan, Baba Kharak Singh Marg, New Delhi by the office of D.C. (Handicrafts) Govt. of India on 30/12/2004. A Memorandum of Understanding 'to this effect was executed between the GHRSSIDC and D.C. (Handicrafts) on 1/10/2005.
 
He informed that the allotted emporium space is located on the first floor of the building and internal renovation work of the emporium has to be carried out, in order to have a comfortable and attractive interior decor so as to attract maximum buyers.
 
The tender for interior decoration of Delhi Emporium was invited in the month of March 2006 and the order was placed on the lowest party i.e. M/s. Novas Designers, New Delhi for Rs.3, 89,455.00. The party asked for 50% advance vide their letter-dated 15.04.06 which was not considered by the Management, and therefore the party refused to execute the order.

 


Therefore, the tender for interior decoration of Delhi Emporium was re-invited in the month of April 2006 itself and
 
the order was placed on M/s. Cosmos Builders, Vasco for Rs.3, 42,167.00, and the party was asked to complete the work within 20 days. However, the architect and his representative at New Delhi Ms. Annabel Lopez did not hand over the working drawings to M/s. Cosmos Builders, till date. It is also learnt that several additional items will have to be incorporated into the work order as a result of which the estimated amount may go up to Rs.5 lakhs.
 
M.D. informed that the representative of M/s. Cosmos Builders had expressed their inability to execute the work due to non-furnishing of working drawings by the Architect, and this delay in starting the work has resulted in cost escalation for many of the items quoted by him in the tender.
 
In view of the above stated facts M.D. proposed that tender for the interior decoration of the emporium should be refloated after incorporating detailed specifications, electrical items etc. so that there won't be any additional items during the time of executing the work. The matter was submitted to the Board of Directors for approval.
 
After brief discussion, the Board considered the administrative approval for re-tendering of the work for the interior decoration of the Emporium at Baba Kharak Singh Marg at New Delhi. Board further approved the provisional sanction of approx. Rs.5.00 lakhs towards the cost of this interior decoration and authorized the M.D. to take necessary action in the matter.
     
Item No.7
 
Fixing of 5% service charges payable to the Corporation by the Supplier in respect of items not covered under the Rate Contract /Preferential Purchase Scheme
 
M.D. informed the Board that under the Preferential Purchase Scheme for supply of various steel furniture items to Govt. Department through SSI Units, Corporation is entitled to get 2% Service Charges from the SSI Units. Besides, Govt. pays 1 % service charge on the total value of executed orders.
 
However, in order to give a boost to the marketing efforts, and to increase the total turnover so as to ensure profitability, the Corporation also supplies items to the indenting departments which are not covered under Rate Contract / Preferential Purchase Scheme. Since these items are not covered under Preferential Purchase Scheme It is proposed that the Corporation may be permitted to fix 5% rate of commission on such items supplied to various Govt./Semi Govt. departments / Autonomous bodies etc.

 


considering the man-power and Administrative work and incidental costs involved in floating of tenders and execution of orders.
 
He further informed that similar Corporations in other states also charge 5% rate of commission on various items procured by them for supply to various Govt. organizations. This will contribute to the enhancement of profitability of the Corporation. The matter was submitted to the Board of Directors for approval. Mr. Keshav Kamat suggested .that the proposal should be considered favorably by the Board since this would add to the overall turnover of the Corporation and thereby generate profits.
 
After brief discussion, the Board gave its approval for fixing of 5% service charges payable to the Corporation by the Supplier in respect of items not covered under the Rate Contract /Preferential Purchase Scheme. The Board further resolved that a proposal may be taken up with the Government of Goa to designate the GHRSSIDC as a Central Procurement Agency of the Government of Goa in respect of various items required by Government /semi Government Institutions and autonomous bodies under the State Government. The Board further authorized the M.D. to initiate further modalities in this regard.
     
Item No.8   Disposal of unsold steel at Verna Yard
 
M.D. informed the Board that the primary objective of the Corporation was to make available scarce and controlled raw material like steel, cement, Polymer, etc. and provide the same to the local SSI units. The GHRSSIDC enjoyed a monopoly in procurement and supply of the above items till 1992. Post liberalization era after 1992, the scenario changed completely and the monopoly enjoyed by the Corporation no longer existed due to which we had to face competition from the open market.
 
Private sector posed a stiff competition, and the customer was presented with multiple choices to buy raw material even on credit basis. Hence the Corporation was no longer able to keep fixed margins on steel products procured from manufacturers like SAIL, as the private operators preferred to operate on wafer thin margins compared to a hefty 6% uniform commission charged by the GHRSSIDC. He further informed that the private traders also offer facilities like 45 days credit period to their customers unlike GHRSSIDC, which insists upon down payment. Thus the steel products sold by the Corporation are expensive than the prevailing market rates and hence the total turnover of steel items sold, has started declining alarmingly. This has severely affected the profitability of the Corporation and has resulted in severe losses. Unless the policy of uniform rates of commission @ 6% charged by the Corporation, is reviewed, there appears to be little hope to revive the steel trade. After a careful analysis of the situation, it is felt that the Corporation should adopt the following measures in order to increase its turnover in the steel trade.
 

 


(a) Improve supply position from manufacturers like SAIL, ESSAR, JINDAL. The management has already undertaken this task and efforts are on to add additional steel items, which are in demand in the local market, in the choice provided to the customers.
 
(b) The state Govt. should make it compulsory to source at least 50% of the total requirement of steel of the PWD, Water Resources Dept., GTIDC and GSIDC, from this Corporation and necessary clause to this effect should be inserted in the tender terms and conditions of the respective departments. The Chairperson has already addressed letters to the heads of departments/ Corporations listed above requesting them to source their steel requirement from GHRSSIDC and their replies, are still awaited.
 
(c) The Corporation may extend credit facilities of 30 days to those customers with reputed credit worthiness, provided they enter into an agreement with the Corporation and also furnish suitable security in the form of Bank Guarantee, etc.
 
(d) The Corporation may be allowed to fix margins on the sale of steel items varying from 2% to 6% depending on the demand and supply position e.g. in case of items which are in high demand like M.S. Plates, H.R.Sheets, etc., the margin of 6% may be charged. While in case of items dealt by private traders / slow moving items/items which are high volume low margin in nature like TMT/Steel Bars which are used for construction activity, etc., may be charged at 2% margin. This marketing approach may be implemented for the next three months and the results may be reviewed in the subsequent Board Meeting for effecting necessary changes / modifications if required in the financial interest of the GHRSSIDC
 
The matter was submitted to the Board of Directors for information and approval
 
Mr. Keshav Kamat agreed with the views put forth by the M.D. and he recalled from his own personal experience that the business of trading in steel was highly competitive and it was essential to have a flexible pricing policy so as to capture the market share which has been ceded to the private traders by the GHRSSIDC. If such a policy is not adopted then it would be very difficult for the GHRSSIDC to compete in the open market and this would lead to losses. Mr. Savio De Souza opined that a good flexible pricing policy could be worked out by the Corporation so that the same is not misused by the officials. M.D. suggested that the flexible policy could be implemented on trial basis for the next three months and based on the feedback, a review could be taken following which a concrete policy could be evolved and the same could be approved by the Board.

 


The Board unanimously approved the differential pricing policy in respect of steel items sold through the Corporation and approved that the rates of commission charged by the Corporation could be kept in the range of 2% to 6%, depending on the product. The Board further authorized the Chairperson and the M.D. to fix the commission in all such cases of steel trading where the margins fell below the minimum level of 2% in case the market forces compel such a move.
     
Item No.9   Payment of Bonus/Ex-Gratia to the employees of the Corporation for the financial year 2005-06.
 
M.D. read out the agenda item No.9 and explained in detail the initiative taken by the Corporation with the cooperation of all the employees to achieve good results during the year 2006-07 to cover the losses of the current year. Mr. Girish Chodankar stated that it would not be in the financial interest of the Corporation to pay ex-Gratia to the employees despite posting huge losses. He stated that in principle he was not against the payment of ex-Gratia to the employees as per the established convention but he submitted that a strong message should be conveyed to the employees that the Board of Directors were not happy about the losses incurred by the Corporation and that the employees had to ensure profitability of the Corporation during the current year. Mr. Savio de Souza desired to know the views of the M.D.
 
M.D. informed that it had been a practice in the past to give ex-Gratia irrespective of the financial results posted by the Corporation. However as per the legal provisions, none of the employees qualified for any bonus as per the provisions of the Bonus Act. However, he informed that he had been receiving good cooperation from the officers and employees of the Corporation.
 
He also informed that the employees had been told to contribute selflessly and work towards achieving profitability. Denial of ex-Gratia to the employees could cause resentment and also affect the progress of work. He therefore submitted that the Board may take a holistic decision after considering all these factors. Under Secretary (industries) submitted that denial of ex-Gratia may cause dissatisfaction among the employees and may stress relations between the management and the employees. Mr. Savio De Souza submitted that M.D. may obtain details about payment of ex-Gratia to employees of Govt. owned Corporation and the modalities adopted therein. After brief discussion the Board unanimously decided to defer the item and further authorized M.D. to consult other Corporations like EDC, GIDC and GTDC about the payment of Bonus / ex-Gratia by them. The Board directed the M.D. to put up this matter for consideration in the next Board Meeting.
     

 


Item No. 10  
Providing space for display and sale of steel furniture items to the SSI Units empanelled with the Corporation under Preferential Purchase Scheme at Craft Complex premises.
 
M.D. read out the agenda item No.10 and explained in detail the objective of the concerned proposal to the Board. After brief discussion, the Board approved the proposal of providing space equally for display and sale of steel furniture items to the SSI Units empanelled with the Corporation under Preferential Purchase Scheme at Craft Complex premises. The Board also approved the levying of Rental charges @ Rs.1500/- per unit per month from the respective units. Further the Board also approved the sale of products to private parties and the commission charged by the GHRSSIDC (for private parties) was fixed at 5% of the sale price.
     
Item No.11  
Establishing of Crafts Village at Agricultural Farm Land belonging to Agriculture Dept. at Chimbel, Tiswadi Goa
 
M.D. read out the agenda item No. 11 and explained in detail the objective of the concerned proposal to the Board. After a brief discussion, the Board approved the proposal of Establishing of Crafts Village at Agricultural Farm Land belonging to Agriculture Deptt. at Chimbel, Tiswadi Goa by obtaining financial assistance under Urban Haat Scheme of the Development Commissioner (Handicrafts), Govt. of India.
     
Item No.12
 
Holding of Crafts Bazaar at Kaka Academy from 8th to 17th October, 2006 with financial help from Development Commissioner (Handicrafts), Government of India, Ministry of Textiles, New Delhi on 75: 25 Ratio.
 
M.D. read out the agenda item No. 12 and explained in detail the objective of the concerned proposal to the Board. Mr. Savio De Souza cautioned that about the possibility of rains during the proposed period. M.D. informed that all these factors would be considered before finally deciding the date and the venue and requested the Board to grant in principle approval to hold the Crafts Bazaar. After brief discussion, the Board approved the proposal of Holding of Crafts Bazaar at Kaka Academy from 8th to 17th October 2006 or any other suitable date / venue by obtaining financial assistance under the scheme implemented by Development Commissioner (Handicrafts), Government of India, Ministry of Textiles, New Delhi on 75: 25 Ratio basis, provided the funds were sanctioned by the D.C. (handicrafts).
 

 


Any Other Item
 
During the discussion, it was decided to take action on the following
   
1)
M.D. informed the Board that Hon. Industries Minister had forwarded an application from Mr. Mohammad Mokash, resident of Margao Goa. Shri Mokash had applied for allotment of free kiosk. The then M.D. of GHRSSIDC, Mr. Borkar had informed Industries Minister that one sample kiosk lying with the Corporation could be considered for handing over to Shri Mokash, free of cost after obtaining the approval from Board of Directors of the Corporaton.
   
 
M.D. further informed that Hon. Minister had directed him to hand over the sample kiosk to Shri Mokash on humanitarian grounds as Shri Mokash is physically challenged and his brother and sister are also deaf and dumb.
   
 
After considering all the aspects of the matter, the Board of Directors unanimously resolved to allot the sample kiosk lying with the Corporation on humanitarian grounds to Shri Mokash as a special case.
   
 
The Board also resolved that this should not be established as a convention in future. The Board further authorized the Managing Director to put up the matter before the Government for obtaining necessary approval.
   
2)
It was brought to the notice by Shri Nilesh Pednekar, Director that whatever irregularities found during the CAG Audit for the year 2004-05 & 2005-06 may be placed in the Board Meeting for information and action to be taken.. M.D. assured that the same would be put up in the next board meeting.
   
3)
Mr. Manuel Vaz, Director proposed that a tour programme may be worked in     the month of January in order to enable the Directors of the Corporation to visit handicrafts emporium and handicrafts related activities in the state of Kerala. The Board unanimously passed this proposal and further authorised the M.D. to work out further modalities in his regard.
   
4)
Mr. Savio De Souza suggested that the GHRSSIDC should prepare some folders and information booklets on Goan Handicrafts so that the same could be distributed during the International Film Festival of India 2006 and in case it is difficult to get new information,

 


 
the Govt. Printing Press photos could be used. This proposal was unanimously passed by the Board and the Board' further authorized the M.D. to work out further modalities in this regard.
   
5)
Mr. Dinesh Nair suggested that the existing color of the new kiosks under the GYRY scheme. He further suggested that the tenders for purchasing the kiosk under GYRY scheme should be re-floated as the existing tender was finalized in 2005. M.D. informed the Board that in case the tenders are re-floated then there was a possibility of increase in rates quoted by the suppliers to which Mr. Savio De Souza asked if this probable increase in rate was considered when the new scheme was formulated. He suggested that to avoid this, the current supplier with whom GHRSSIDC had executed an agreement to supply 100 kiosks could be asked to complete his allotted quota. After discussion, the Board resolved to allow Chairperson to decide.
   
6)
Boxing Championship, regarding the same, an amount of Rs.15000/- was sanctioned being an international event and GHRSSIDC would be getting wide publicity.
   
7)
The Board also decided to hold monthly Board Meetings on 6th of every month till January 2007 at 10.30 a.m. in the GHRSSIDC board room.
   
 
The meeting ended with a vote of thanks to the Chair.