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CORPORATE ETHICS IS BASED ON THE PHILOSOPHY OF OPPORTUNITIES
IN MARKET AND ACCORDINGLY INTEGRATE THE VALUE CHAIN IN TO
THEIR OPERATIONS FOR MEETING DEMANDS IN MARKET AT A
PROFITABLE SCALE. THE FUNDAMENTAL RULE IS TO CONTINUOUSLY
LOOK FOR OPPORTUNITIES AND PLAN INTERVENTIONS IN AN
ENTREPRENEURIAL & PROFITABLE MANNER.
CO-OPERATIVES NEED TO FOLLOW THIS RULE AND BASE THEIR FUTURE
PLANS ON THE BASIS OF OPPORTUNITIES IN THE MARKET AND
ACCORDINGLY INTEGRATE VALUE ADDITIVE FEATURES IN THEIR
OPERATIONS TO UPSCALE THE VALUE CHAIN AND SERVE THE NEEDS AND
ASPIRATION OF MEMBERS IN MORE BENEFICIAL MANNER.
“CORPORATE GOVERNANCE IS ABOUT “THE
WHOLE SET” OF LEGAL, CULTURAL, AND
INSTITUTIONAL ARRANGEMENTS THAT
DETERMINE WHAT PUBLIC CORPORATIONS CAN
DO, WHO CONTROLS THEM, HOW THAT CONTROL
IS EXCERCISED, AND HOW THE RISKS AND RETURN
FROM THE ACTIVITIES THEY UNDERTAKE ARE
ALLOCATED.” (BY MARGARET BLAIR,PROFESSOR OF LAW, VANDERBILT UNIVERSITY LAW
SCHOOL)
GOVERNANCE IN COOPERATIVES IS DIFFERENT AS
COMPARED TO PRIVATE ENTERPRISES, BECAUSE
ENSURING RETENTION OF CONTROL BY MEMBERS
DEPENDS ON THE AWARENESS, UNDERSTANDING &
KNOWLEDGE OF THE ELECTED REPRESENTATIVES
ABOUT THE COOPERATIVE PHILOSOPHY, AND THEIR
OWN RESPONSIBILITY AND ROLE IN THE
MANAGEMENT.
THE GOVERNANCE FRAMEWORK
SHOULD ENSURE STRICT REGULATORY
REGIME, EFFECTIVE MONITORING
MECHANISM AND STANDARD OPERATING
PROCEDURES ENSURING BOARD’S
ACCOUNTABILITY TO THE MEMBERS.
GOVERNANCE REFLECTS THE QUALITY OF
MANAGEMENT IN AN ORGANIZATION.
THE PRINCIPAL STAKEHOLDERS IN
COOPERATIVES ARE THE MEMBERS, THE
BOARD OF DIRECTORS, EMPLOYEES,
CUSTOMERS, CREDITORS, SUPPLIERS, AND THE
COMMUNITY AT LARGE.
IN SIMPLE WORDS, IT CAN BE SAID THAT
“GOVERNANCE” IN A COOPERATIVE
ENTERPRISE IS ABOUT STRIKING A FINE
BALANCE BETWEEN THE PROCESS OF MAKING
THE DECISIONS AND THE PROCESS OF
IMPLEMENTING THE DECISIONS.
GOOD CORPORATE GOVERNANCE PRACTICES IN COOPERATIVES
HELP A COOPERATIVE TO ACHIEVE THE FOLLOWING:
– DEVELOPING APPROPRIATE STRATEGIES THAT RESULT
IN THE ACHIEVEMENT OF THE MEMBERS’ OBJECTIVES.
– ATTRACTING, MOTIVATING AND RETAINING MEMBERS.
– CREATING A SECURE AND PROSPEROUS OPERATING
ENVIRONMENT AND IMPROVING OPERATIONAL
PERFORMANCE.
– MANAGING AND MITIGATING RISK AND
– PROTECTING AND ENHANCING THE CO-OPERATIVE’S
REPUTATION.
GOOD GOVERNANCE DEPENDS ON :
A. RESPONSIVE ELECTED LEADERSHIP
– FAITH IN COOPERATIVE PRINCIPLES AND VALUES.
– INDEPENDENT WITHOUT ANY OUTSIDE PRESSURE.
– DEMOCRATIC DECISION MAKING.
– MEMBER DRIVEN-ACCOUNTABLE TO MEMBERS.
– KNOWLEDGE ABOUT BUSINESS DIMENSION, VISION AND BUSINESS
ACUMEN.
– TRANSPARENT DECISION MAKING.
– ALIVE AND RESPONSIVE TO SOCIAL NEEDS.– ALIVE TO MARKET PRACTICES AND TECHNOLOGICAL INNOVATION.
– OPEN FOR IDEAS AND SENSITIVE TO MARKET CHANGES.– TAKING CARE OF MEMBER NEEDS, RIGHT OF INFORMATION TO
MEMBERS
B. PROFESSIONAL MANAGEMENT
– QUALIFIED TO TAKE RESPONSIBILITY OF
MANAGEMENT AND BUSINESS.
– ACCOUNTABLE TO ELECTED LEADERSHIP.
– UNDERSTAND COOPERATIVE PHILOSPHY,
COOPERATIVE WAY OF FUNCTIONING.
– RESPECT DEMOCRATICALLY EXPRESSED NEEDS
OF MEMBERS.
C. VALUE BASED MANAGEMENT
– UNIFIED BOARD OF DIRECTORS COMPRISING OF
UNITED TEAM OF PROFESSIONAL MANAGERS SUCH
AS FUNCTIONAL DIRECTORS AND ELECTED
DIRECTORS ON THE BOARD.
– PROFESSIONAL MANAGERS ON THE BOARD ALLOW
THEM TO COMPREHEND THE THINKING OF THE
ELECTED DIRECTORS IN SERVING THE MEMBERS.
– ALLOW POLICY FORMATION TO BE DRIVEN BY BOTH
MEMBER-LEAD PHILOSPHY AND BUSINESS RESULTS.
E. ROLE OF THE GOVERNMENT
– RECOGNIZE COOPERATIVES AS DISTINCT AND MAJOR
STAKEHOLDER IN ECONOMY BOTH NATIONALLY AND
INTERNATIONALLY.
– TO PROVIDE FRAMEWORK OF LEGISLATION CONDUCIVE TO
THE GROWTH OF COOPERATIVES.
– COOPERATIVE LEGISLATION SHOULD BE MORE MEMBER-
ORIENTED, MEMBER DRIVEN , MEMBER FRIENDLY AND
BUSINESS ORIENTED.
– AUTONOMY TO THE BOARD TO RUN THE AFFAIRS OF THEIR
COOPERATIVES DEMOCRATICALLY IN CONFORMITY WITH
THE COOPERATIVE PRINCIPLES WHILE ASSISTANCE FROM
THE GOVERNMENT COULD STILL CONTINUE.
RECOGNISES THAT IT IS SUBSERVIENT TO THE MEMBER SHAREHOLDERS.
PROTECT RIGHTS AND ENSURES EQUAL TREATMENT TO ALL SHAREHOLDERS.
RECOGNISES THE ROLE AND RESPECTS THE “PROFESSIONAL MANAGERS”.
ENSURES ACCOUNTABILITY.
ENSURES FAIRNESS AND TRANSPARENCY IN DECISION MAKING.
WEAK OVERSIGHT AND VISION.
LACK OF PROPER MONITORING AND SUPERVISION.
MANAGEMENT OVERRIDE.
INADEQUATE INDEPENDENCE OF THE BOARD.
LACK OF RESPECT FOR COOPERATIVE COMMUNITY.
ELECTED BOARD OF DIRECTORS NOT GETTING RIGHT
INFORMATION AND ENOUGH TIME FOR BOARD AFFAIRS.
BOARD COMMITTEES NOT HAVING HIGH
EFFECTIVENESS.
IFFCO HAS CONSISTENTLY FOLLOWED TRANSPARENT,
DEMOCRATIC AND PROFESSIONAL PRACTICES IN ITS
GOVERNANCE.
IFFCO HAS CARVED OUT A STRONG " COOPERATIVE
IDENTITY" AND IS MAKING SINCERE EFFORTS TO
UPHOLD THE "COOPERATIVE VALUES" BY CHERISHING
"COOPERATIVE PRINCIPLES".
IFFCO CONDUCTS ITS BUSINESS WITHIN THE FRAME
WORK OF MULTI STATE COOPERATIVE SOCIETIES ACT
AND ITS BYE-LAWS
IFFCO BOARD CONSISTS OF
– ELECTED MEMBERS
– NOMINATED MEMBERS
– FUNCTIONAL DIRECTORS
FORMATION OF VARIOUS COMMITTEES
– PROJECT SUB-COMMITTEE
– MARKETING SUB COMMITTEE
– EXECUTIVE COMMITTEE
– AUDIT COMMITTEE AND
– TASK-BASED SUB GROUP
IFFCO HAS A “REPRESENTATIVE GENERAL BODY” WHICH AS
PER LAW EXCERCISES THE RIGHTS OF THE GENERAL BODY.
MEMBER SOCIETIES(39,910)
MEMBERS OF THE REPRESENTATIVE GENERAL BODY
(RGB)(1,000)
ELEVEN DIRECTORS
ON THE BOARD
ELECTS
ELECTS
IN COOPERATIVES, GENERALLY THE ‘DESIGN’ OF THE
BOARD, PLAYS A SIGNIFICANT ROLE. THE COMPOSITION OF
THE BOARD, TO A VERY LARGE EXTENT, DECIDES
GOVERNANCE IN A COOPERATIVE.
IN IFFCO , THE BOARD COMPRISES OF :-
1. ELECTED DIRECTORS - 11 (ELEVEN)
2. DIRECTORS FROM STATE FEDERATION - 10 (TEN)
21 (TWENTY
ONE)
3. FUNCTIONAL DIRECTORS - 7 (SEVEN)
4. COOPTED DIRECTORS - 2 (TWO)
9 (NINE)
30 (THIRTY)
THOUGH THE “ELECTED LEADERSHIP” AND THE
“PROFESSIONAL MANAGERS” ARE THE INTEGRAL PART OF
THE GOOD GOVERNANCE ; BUT IFFCO TYPICALLY HAS STILL
MADE THE DIFFERENCE.
BYE LAW - 40 PROVIDES ‘MORE SAY’ BY “ELECTED
MEMBERS”.
BYE LAW - 40 PROVIDES THAT
– QUORUM OF THE BOARD MEETING IS ONE-HALF I.E. 15
DIRECTORS(OUT OF 30 DIRECTORS).
– EIGHT OF WHOM AT LEAST SHALL BE OTHER THAN
FUNCTIONAL DIRECTOR AND COOPTED DIRECTOR.
IFFCO HAS A WELL DEFINED "CODE OF CONDUCT" FOR ITS BOARD
OF DIRECTORS IN ALIGNMENT WITH SOCIETY'S VISION AND
VALUES TO ACHIEVE THE MISSION AND OBJECTIVES AND AIMS AT
ENHANCING ETHICAL AND TRANSPARENT PROCESS IN MANAGING
THE AFFAIRS OF THE SOCIETY.
KEEPING IN VIEW THE RESPONSIBILITY TO SAFEGUARD THE
INTEREST OF ITS MEMBERS, IFFCO HAS SET UP VIGILANCE
DEPARTMENT AT EACH MANUFACTURING UNIT AND ZONAL
OFFICE OF MARKETING DIVISION.
VIGILANCE DEPARTMENT REVIEW THE PROCUREMENT FILES,
SERVICE CONTRACTS AND VERIFY COMPLAINTS ETC. AND
FORWARD IT'S REPORTS TO MANAGING DIRECTOR WITH
RECOMMENDATIONS FOR NECESSARY ACTION.
IFFCO SUBJECTS ITSELF TO REGULAR AUDIT.
AUDITORS PERIODICALLY COME TO THE BOARD
MEETINGS(AT LEAST BI-ANNUALLY).
AUDITORS ARE INVITED TO ANNUAL GENERAL MEETINGS.
IFFCO HOLDS QUARTERLY REVIEW MEETINGS.
IFFCO HAS STANDARD OPERATING MANUALS-
1. PROCUREMENT & CONTRACTING PROCEDURE
2. INTERNAL AUDIT MANUAL
3. ACCOUNTS MANUAL
4. CIVIL MANUAL
5. HR MANUAL
FLOW OF IDEAS ON
ENHANCING BENEFIT TO MEMBERS
FROM EMPLOYEES/ OUTSIDERS
MANAGING
DIRECTOR
JOINT VENTURES
TECHNICAL
AGRICULTURAL SERVICES
HR
DIRECTOR (COOP.DEVELOPMENT)
FOR SCRUTINIZING
AND FEASIBILITY
STUDY PURPOSE
ACCOUNTSFOR CONSIDERATION
OF BUDGET PROVISION
FOR CONSIDERING WHETHER THE
PROPOSAL IS WITHIN THE BYE LAWS AND ITS USEFULNESS FOR THE
MEMBERS.P
R
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P
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S
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Q
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(QUARTERLY REVIEW
MEETING)
MANAGING
DIRECTOR
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M
P
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E
M
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N
T
A
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CHAIRMAN/VICE-CHAIRMAN & BOARD OF DIRECTORS
EXECUTIVES
MANAGING DIRECTOR
FINANCEDIRECTOR
MARKETING DIRECTOR
DIRECTOR (TECH)
DIRECTOR(COOP. DEVELOPMENT)
DIRECTOR(HRD)
DIRECTOR(JOINT VENTURES)
FinanceAccountsAuditBudgetPayrollsBooksTaxation
Plant OperationsLogisticsReal EstateIT Projects
Marketing SalesDistribution/TransportationAgriculture ServicesPublicity WarehousingPort Operation Promotion of Hindi
Coop. RelationsCoop. DevelopmentShares BoardCorporate Social Responsibility
Human ResourceAdministrationPersonnelRecruitment Training & Development Legal Industrial RelationsVigilance/Security
Joint Venture Operations
COOPS. & MEMBERS
FIELD OFFICES
ZONAL OFFICE - 5
STATE OFFICE - 20
AREA OFFICE - 63
ZONAL ADVISORY COMMITTEE
STATE ADVISORY COMMITTEE
DISTRICT CONFERENCES
CHAIRMAN IS AUTHORISED FOR NOMINATION TO OTHER
ORGANISATION.
PLACEMENT ON VARIOUS SPECIALISED COMMITTEES.
PLACEMENT AS “DIRECTORS” ON SUBSIDIARY
INSTITUTIONS.
VISIT TO VARIOUS CONNECTED INSTITUTIONS.
ZONAL ADVISORY/STATE ADVISORY
FIELD PROGRAMMES
EXPOSURE TO VARIOUS CONFERENCES/SEMINARS/
INFORMATION SESSION WITHIN AND OUTSIDE THE
COUNTRY.
TRAININGS
DELEGATES (MEMBERS OF REPRESENTATIVE GENERAL
BODY ) ARE EXPOSED TO :
– PLANT VISIT PROGRAMME TO SEE THE MAGNITUDE
OF THE OPERATIONS.
– SEMINARS/CONFERENCES/INFORMATION SESSION.
– ZONAL ADVISORY/STATE ADVISORY/DISTRICT LEVEL
CONFERENCES.
– CROP SEMINARS/FIELD PROGRAMMS.
– TRAINING PROGRAMMS.
ALL DECISIONS IN THE BOARD ARE
TAKEN BY ‘CONSENSUS’.
THE BOARD HAS NOT BEEN SUBJECTED
TO “VOTING” THUS FAR ON ANY
DECISION (EXCEPT VOTING FOR THE
POSITIONS).
IFFCO FOLLOWS THE GLOBAL PRACTICES OF CORPORATE
SOCIAL RESPONSIBILITY (CSR) COVERING THE ENVIRONMENTAL
AND SOCIAL ASPECTS.
IFFCO HAS UNDERTAKEN ACTIVITIES IN THE AREAS OF
COMMUNITY DEVELOPMENT, ENVIRONMENT PROTECTION,
HEALTH CARE/MEDICAL FACILITIES AND LITERACY
ENHANCEMENT/EMPOWERMENT PROGRAMME.
VILLAGE ADOPTION - BRING OVERALL SOCIO-ECONOMIC DEVELOPMENT IN RURAL AREAS.
IFFCO KISAN SEWA TRUST(IKST)- FOR THE WELFARE AND CRITICAL MEDICAL ATTENTION OF NEEDY
FARMERS. IFFCO FOUNDATION – FOR TECHNOLOGY TRANSFER., PRESERVATION &
CONFEDERATION OF FOLK, ART & CULTURE.
CORDET- PROVIDE PRACTICAL TRAINING TO FARMERS. INDIAN FARM FORESTRY DEVELOPMENT COOP. LTD.(IIFDC)
- DEVELOPMENT OF WASTE LAND FOR TREE PLANTATION.
ESTABLISHMENT OF HRD AND IT FORUMS TO UNDERSTAND THE
SUGGESTIONS AND OUTLOOK OF EMPLOYEES
CONNECTIVITY OF ALL THE FIELD OFFICES TO MONITOR THE
OPERATIONS THEREBY PROMOTING TRANSPARENCY AND FAST
COMMUNICATION
E-PROCUREMENT
THE E-PROCUREMENT PROCESS AVAILABLE THROUGH IFFCO'S WEBSITE
FOR REGISTERED VENDORS, ENQUIRIES ARE ISSUED TO THEM
ELECTRONICALLY.
VENDORS CAN COMMUNICATE WITH IFFCO ON RELATED SUPPLY OF
MATERIAL THROUGH THE WEB-SITE.
PO STATUS, DELIVERY STATUS, PAYMENT STATUS CAN BE OBTAINED
ONLINE
THE SYSTEM INTRODUCES ONLINE SUBMISSION OF BIDS USING DIGITAL
SIGNATURES
IFFCO WAS AMONG THE FIRST ORGANIZATIONS IN INDIA TO IMPLEMENT
ITS ‘E-PROCUREMENT’ INITIATIVE.
INITIAL AT PRESENT
MEMBERSHIP 57(Year 1967-68)
39,910
SHARE CAPITAL 0.05 MILLION US$(Year 1967-68)
94.43 MILLION US$
PRODUCTION 0.18 MILLION TONNES (Year 1975-76)
8.2 MILLION TONNES
MARKETING 0.18 MILLION TONNES (Year 1975-76)
11.83 MILLION TONNES
TURNOVER 588 MILLION US$(Year 1989-90)
3545 MILLION US $
REGISTERED ON 3RD NOVEMBER 1967, AT THE INITIATIVE OF
COOPERATIVE LEAGUE OF USA (CLUSA) NOW KNOWN AS NCBA; AND
EFFORTS OF GOVERNMENT OF INDIA.
OWNED AND CONTROLLED BY MEMBER COOPERATIVES.
LARGEST MARKETER OF FERTILISERS IN THE WORLD.
GROWTH OF IFFCO
IFFCO HAS ENTERED INTO JV- PROJECTS AND DIVERSIFIED
INTO DIFFERENT AREAS:-
OMAN INDIA FERTILISER COMPANY (OMIFCO):
• ANNUAL CAPACITY OF 1.6 MILLION MT UREA AND 0.25
MILLION MT AMMONIA
• THE ACTUAL PROJECT COST USD 892 MILLION (SAVING OF
USD 77 MILLION ON ESTIMATES)
INDUSTRIES CHIMIQUES DU SENEGAL (ICS)
• IFFCO HOLDS ABOUT 20% OF THE PAID-UP SHARE CAPITAL.
• UNDER LONG TERM BUY BACK AGREEMENT , 0.5 MILLION
MT PHOSPHORIC ACID IS LIFTED BY IFFCO
IFFCO TOKIO - GENERAL INSURANCE COMPANY LTD ( ITGI)
• SPECIAL INSURANCE SERVICES FOR FARMERS .
PHOSPHORIC ACID PLANT AT ESHIDYA IN JORDAN
• THIS JV WILL MAKE AVAILABLE THE REQUIRED
QUANTITY OF ROCK PHOSPHATE FOR IFFCO.
IFFCO KISAN SEZ’ AT NELLORE (ANDHRA PRADESH)
• SETTING UP A MULTI-PRODUCT WITH PRIMARY FOCUS ON
FOOD PROCESSING AND AGRI BASED INDUSTRIES.
INDIAN POTASH LIMITED (IPL)
– IPL IS PRIMARILY ENGAGED IN TRADING OF IMPORTED
POTASSIC AND NON-POTASSIC FERTILISERS .
LEGEND INTERNATIONAL HOLDINGS INC, AUSTRALIA
(LEGEND)
– IMPORT OF ROCK PHOSPHATE FROM LEGEND’S MINING
PROJECT.
KISAN INTERNATIONAL TRADING FZE, DUBAI
• TRADING IN RAW MATERIALS AND FINISHED FERTILISERS
AMERICAS PETROGAS INC, CANADA
– OIL AND GAS FIELDS IN ARGENTINA AND POTASH RESERVES IN
PERU.
IFFCO CHHATTISGARH POWER LTD.
– IFFCO HAS ENTERED INTO POWER SECTOR BY
INCORPORATING A JOINT VENTURE COMPANY WITH
CHHATTISGARH STATE ELECTRICITY BOARD (CSEB) TO SET UP
A 1000 MW COAL BASED MEGA POWER PLANT; THE COMPANY
TO SUPPLY ELECTRICITY TO FARMERS AT A CHEAPER RATE.
PROMOTION OF COMMODITY TRADING IN INDIA
THROUGH
– NATIONAL COMMODITY AND DERIVATIVE EXCHANGE
LTD (NCDEX)
– NATIONAL COLLATERAL MANAGEMENT SERVICES LTD.
(NCMSL)
SPECIAL INSURANCE SERVICES FOR FARMERS
THROUGH IFFCO TOKIO GENERAL INSURANCE
COMPANY LTD. (ITGI)
– SANKAT HARAN BIMA YOJANA
– BARISH BIMA YOJANA
IFFCO KISAN SANCHAR LTD.
– TO STRENGTHEN RURAL TELEPHONY A JOINT VENTURE WITH AIRTEL
– SUPPORT FARMERS THROUGH VALUE ADDED INFORMATION THROUGH
MOBILE TELEPHONY
– ENHANCING THE CAPACITY OF ITS MEMBER COOPERATIVE SOCIETIES BY
PROVIDING THEM AN ADDITIONAL MEANS OF GENERATING INCOME.
INDIAN FARM FORESTRY DEVELOPMENT
COOPERATIVE LTD. (IFFDC)
– FOCUSES ON DEVELOPMENT OF WASTELAND.
– UNDERTAKES ACTIVITIES LIKE PROMOTING PRIMARY FARM FORESTRY
COOPERATIVES (PFFCS) TO ENHANCE THE SOCIO ECONOMIC STATUS OF
RURAL POOR
IFFCO KISAN SEVA TRUST
– A CHARITABLE TRUST WITH IFFCO’S CONTRIBUTION AND
CONTRIBUTION BY IFFCO EMPLOYEES TO PROVIDE RELIEF
AND REHABILITATION TO VICTIMS IN RURAL INDIA IN THE
EVENT OF NATURAL CALAMITIES.
COOPERATIVE RURAL DEVELOPMENT TRUST (CORDET)
─ TO PROVIDE TRAINING TO THE FARMERS TO IMPROVE THEIR
SKILLS IN AGRICULTURAL PRODUCTION, DAIRY, POULTRY,
FISHERIES AND PROFESSIONAL LEADERSHIP AT VILLAGE
LEVEL.