SCCL

1. 1
Company Administration
and functioning of Board of
The Singareni Collieries Company Limited
J. Rama Krishna
GM (CA) & Company Secretary

2. 2
Nature, Form and types of business enterprises
 Non-corporate form of business enterprise
 Sole proprietorship
 Joint Hindu family / HUF
 Partnership
 Corporate form business enterprise
 Co-operative organisation
 Company
 Distinction between Company & Corporation

3. 3
Company – Its Nature and characteristics
 Corporate personality
 Limited liability
 Perpetual succession
 Separate property
 Transferability of shares
 Common Seal
 Capacity to sue and be sued
 Contractual rights
 Limitation of action
 Separate management
 Voluntary association for profit
 Termination of existence

4. 4
Types of Companies:
 Types of Companies which may be registered under the Act.
 Private Companies-limitation, restriction, prohibition &
minimum share capital of Rs.1 lakh
 Public Companies -minimum share capital of Rs.5 lakhs
 Producer Companies.
 Classification of Companies from the point of view of
incorporation
 Chartered Companies.
 Statutory Companies.
 Registered Companies.
 Classification of Companies from the point of view of
liability.
 Unlimited Companies.
 Companies limited by guarantee.
 Companies limited by shares.

5. 5
Other types of Companies.
 Associations not for profit having licence under
sec.25 of the Act.
 Govt. Companies-(not less than 51% of paid up
capital is held by Govt., i.e., majority holding)
 Foreign Companies.
 Holding & Subsidiary Companies.
 Investment Companies.
 Producer Companies.
 Finance Companies.

6. 6
Relevant criterion to identify a Company
with State within the meaning of
Article 12 of the constitution of India.
 The source of share capital
 Extent of State control over the corporation and
whether it is deep and pervasive
 Whether the corporation enjoys monopoly status
 Whether the functions of the corporation are of
public importance and closely related to
Government functions
 Whether what belonged to a department of
Government formerly was transferred to the
corporation

7. 7
Formation of Companies:
 Type of company
 Application of availability of name
 Preparation of Memorandum & Articles of Association
 Vetting of Memorandum & Articles, printing, stamping and signing
of the same
 Power of Attorney
 Additional documents required
 Consent of Directors
 Notice of registered address
 Particulars of Directors
 Statutory declaration
 Payment of registration fee
 Certification of incorporation

8. 8
Governing statute & Documents of SCCL
Companies Act, 1956
Memorandum of Association (Basic document)
* Importance of objects clause
* Doctrine of ultra vires
Articles of Association(Bye laws)
* Doctrine of constructive notice
* Doctrine of indoor management
Tripartite Agreements

9. 9
Financial structure
 Capital – in different senses
 Nominal, Authorised or Registered capital
 Issued capital
 Subscribed capital
 Called up capital
 Un-called capital
 Paid up capital
 Up-paid capital
 Reserve capital
 Capital reserve
 Capital assets
 Preference / equity share capital
 Fixed and circulating capital
 Working capital
 Loan or debenture capital

10. 10
Kinds of shares:
 Equity share capital
 With voting rights
 With differential rights as to dividend, voting or otherwise
 SWEAT equity shares
 Preference share capital
 With respect to dividend
 With respect to capital
 Types of preference shares
 Participating or non-participating
 Cumulative and non-cumulative
 Redeemable and irredeemable

11. 11
Sources of capital
 Raising of capital from promoters
 Raising of capital from public
 By issuing a prospectus
 By an offer for sale or by deemed prospectus
 By placing of shares
 Raising of capital from existing shareholders.
 Debt capital
 Power of company to borrow
 Un-authorised or ultra vires borrowing
 Mortgage on security of property
 Charge on uncalled capital / book debts

12. 12
Modes of acquiring membership
 By subscribing to the Memorandum of Association
 By agreement in writing
 By an application and allotment
 By transfer of shares
 By transmission of shares
 By acquiescence or estoppel
 Holding shares as beneficial owner in the records of depository

13. 13
Management and Administration of Companies
Board of Directors:
Types of Directors:
› Inside Directors
› Outside Directors
› Professional Directors
› Nominee Directors
› Special Directors or executive Directors
› Independent Directors
› Interested Directors
› Government Directors
› Whole-time Directors
› Managing Directors
Disqualifications of Directors
Minimum and maximum number of Directors
Maximum number of Directorships
Managing Director ( for public limited companies with paid up
capital of Rs.5 crores or more)
Chairman

14. 14
Appointment of Directors
 By subscribing to the Memorandum
 By members in General meetings
 By Board of Directors
 By Central Govt.,
 By 3rd
parties – if Articles permit.
 By small shareholders – if Articles permit.
Removal of Directors
 Removal by shareholders
 Removal by Central Govt.
 Removal by CLB / Tribunal
 Retirement of Directors
 Resignation of Directors

15. 15
Powers of Directors
 Powers exercisable only at Board meetings.
 Powers exercisable only with the consent of the Company in
general meeting.
 All other powers which the Company is authorised to exercise
Duties of Directors
 Statutory duties
 Duty to attend Board meetings
 Duty not to contract without Board’s consent
 Duty to disclose interest
 Duty to make disclosure of shareholding
 Duty in connection with general meeting
 To disclose receipt from transfer of property
 To disclose receipt of compensation from transferee of
shares
 Duty to file declaration of solvency
 To file return of allotments

16. 16
Fiduciary and general duties
 Not to be negligent and not to commit or let others to commit
tortuous acts.
 Not to exceed powers
 To have regard to and act in the best interests of the Company
and its stake holders
 Duty to creditors if business is conducted with intent to defraud
them
 Duty of confidentiality
 Duty not to exercise powers for a collateral purpose
 Duty not to misapply company assets
 Duty not to compete with the company
 Duty not to delegate
 Duty not to make secret profits

17. 17
Liabilities of Directors
 Liability to outsiders
 When they enter into contracts on behalf of the Company
 When they issue a prospectus
 When they found guilty of fraud
 When they allot shares in an irregular manner
 When the liability has been made unlimited
 When the court issues any orders
 Liability to Company
 When they are negligent in the performance of their duties
 When they commit an act which is ultra vires their / company’s
powers
 When any illegal act / breach of trust is committed
 Liability to the Shareholders
 Liability for statutory defaults and violations

18. 18
Kinds of Company meetings
 Shareholders meetings
 Statutory meetings
 Annual general meetings
 Extraordinary general meeting
 Class meeting of shareholders
 Board meetings
 Meetings of Board Committee
 Meetings of debenture holders
 Meetings of creditors
 Meetings of contributors in winding up

19. 19
Functional Directors (5)
Finance
Personnel, Admn. & Welfare
Operations
Planning & Projects
Electrical & Mechanical
Part-time Directors (5)
from Govt. of India
Director (C.A)), Director (Fin) and CMD of
WCL)
from Govt. of A.P
Prl. Secretary. Energy &
Prl . Secy, Finance
Constitution of Board of SCCL
Chairman & Managing Director

20. 20
Role of the Board
- Framing policies, rules, regulations, Manuals etc.
- Delegation of powers to the Board under the
Companies Act / by the Govt. of India.
- Delegation of powers to C&MD
 Sub-delegation of powers
- Sub-delegation of powers to functional Directors
- Sub-delegation of powers to below Board level
officers
 Decision making process

21. 21
 Mode of exercise of powers by the Board
- Through meetings
- Through Circular Resolutions
- Through Board Committees
 Standing Committees in SCCL
- Technical Committee (Scope)
- Manuals Committee
- Manpower Committee
- Shares allotment / transfer Committee
- Audit Committee (Statutory)

22. 22
Meetings of Board of Directors,
Procedures & Practical aspects
- Minimum number of meetings
- Quorum of meeting
- Agenda for meeting
- Minutes of meeting
- Action on minutes of meeting

23. 23
Organisational functions
Line function Staff function
Decision making role Advisory role

24. 24
 Corporate Governance-issues
- Audit Committee
- Directors’ responsibility statement
- Independent Directors
- Clause-49 of Listing Agreement with Stock exchanges
(For listed Companies)
 Right to Information Act,2005
- Applicability to SCCL
- Information that can be sought

25. 25
Financial Structure
 Shareholding pattern of SCCL
Sl
No. Held by No. of shares Amount paid up
(Rs.)
1 Governor of A.P. (1) 88,55,99,139 885,59,91,390
2 President of India (1) 84,75,59,997 847,55,99,970
3 GoAP Directors (8) 8 80
4 GoI Directors (3) 3 30
5 Indian private
shareholders (161)
37,252 3,72,520
6 Foreign private
shareholders (10)
1,720 17,200
Total (184) 173,31,98,119 1733,19,81,190

26. 26
Debt-equity composition
Debt swapping
Accrual Vs. Cash basis of accounting
Tax implications
 Deferred tax
 Fringe benefit tax
 Service tax
 Value added tax

27. 27
Accounts & Audit
 Requirements of keeping books of Account.
 Place of keeping
 Books of accounts in respect of branch office
 True and fair view
 Preservation
 Inspection of books of accounts
 Directors’ right of inspection
 Inspection by the RoC / SEBI officers
 Members’ right of inspection
 Auditors’ right of inspection
 Persons responsible for keeping the books of accounts

28. 28
Annual Accounts
 Balance sheet
 Profit & Loss account
 Cash flow statement
 Accounting standards
 Recommendations of Audit Committee on Annual Accounts
 Approval of Annual accounts by Board and authentication
 Audit of accounts by Statutory Auditors & C&AG
 Laying of accounts before AGM and adoption
 Dividend
 Laying of annual accounts before Parliament & State
Legislature.

29. 29
Accountability of Govt. Companies
 Responsible to Government(s) as shareholders;
 Subject to Audit by Statutory Auditors appointed by
Comptroller & Auditor General of India.
 Subject to audit & review by C&AG of India.
 Answerable to Assembly & Parliament.
 Answerable to COPU etc.
 Publishing / furnishing of information under RTI Act.
 All actions are subject to judicial review and amenable to writ
jurisdiction.
 Apart from the above there are certain statutory authorities
viz; Registrar of Companies, Regional Directors and Dept. of
Company Affairs under the Companies Act.

30. 30
Liberalisation, Privatisation and Globalisaton
- Dismantelling of Administered price mechanism regime.
- Delicensing
- Reduction of import duties
- Simplification of procedures
Disinvestment (Restructuring of PSUs)
- More autonomy to PSUs
- Outsourcing of activities.
Foreign direct investment
Reforms undertaken in our country

31. 31
Sickness of the Company
 Potential Sickness
 Sickness
 Mandatory reference to Board for Industrial &
Financial Reconstruction
 Remedial measures
 Appeal to Appellate Authority for Industrial &
Financial Reconstruction

32. 32
Financial restructuring July 1999
 Infusion of additional equity of Rs.198.04 crores during IX
Plan period in addition to Rs.327.47 crores.
 10-year interest free moratorium up to 31.3.2007 on payment
of funded interest of Rs.663.34 crores accrued on GoI loans
during VIII Plan.
 Waiver of Rs.65.08 crores penal interest and interest on
interest by GoI accrued on the loans from 1.4.1997 to
31.3.1999.
 Re-schedulement of VIII Plan loan instalments of Rs.157.49
crores due up to 31.3.1997 to repay in 1999-00 and 2000-01 in
two instalments.

33. 33
Difference between Govt. Companies and
Govt. departments
 Commercial enterprises - profit motive.
 Non-profit organisation - Service motive.
 Govt. Companies - Within legal frame work.

34. 34
Future outlook
Opportunities
– Expansion/ backward - forward Integration /
Diversification
Threats
- Limitation of coal reserves
- Environmental restrictions
- Land acquisition problems
- Denationalization
- Price tariff commission
- Reduction of import duty

35. 35
Vision of SCCL
Plan and attain production level commensurate with
extractable reserves.
Use of IT for optimal exploitation of coal reserves and
optimum use of resources.
Introduction of mechanisation with SDLs & LHDs, Continuous
Miners.
Develop deep shaft mines.
Provide decent working conditions to workmen and pioneering
in introduction of manriding systems in UG Mines.
Right sizing of manpower.
Enhancing image of the Company through good relations with
public in general and customers in particular.

36. 36
Mission of SCCL
To retain our strategic role of a premier Coal producing Company in
the country and excel in a competitive business environment.
To strive for self-reliance by optimum utilization of existing
resources and earn adequate returns on capital employed.
To exploit the available mining blocks with maximum conservation and
utmost safety by adopting suitable technologies and practices and
constantly upgrading them against international benchmarks.
To supply reliable and qualitative coal in adequate quantities and
strive to satisfy customers needs by constantly sharing their
experience and customizing our product.
To emerge as a model employer and maintain harmonious industrial
relations within the legal and social framework of the state.
To emerge as a responsible Company through good Corporate
Governance, by laying emphasis on protection of environment &
ecology and with due regard for corporate social obligations.

37. 37
THANK YOU
for
patient listening