ASSIGNMENT OF BUSINESS ENVIRONMENT

TOPIC: CSR AND CORPORATE GOVERNANCE OF PUNJAB NATIONAL BANK

SUBMITTED TO: MR.PANKAJ JAIN

SUBMITTED BY: AMANDEEP KAUR SEC. 318 ROLL NO. B36

CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility (CSR, also called corporate responsibility, corporate citizenship, responsible business and corporate social opportunity) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.

CSR ACTIVITIES OF PUNJAB NATIONAL BANK

Punjab National Bank has created a Trust namely, PNB Farmers Welfare Trust, duly registered with Sub Registrar VII, New Delhi on 22.9.2000. This Trust is registered under Section 12 A read with section 12 AA(1)(b) of the Income Tax Act 1961. The Trust has also obtained exemption U/s 80 G of Income Tax Act 1961 and is authorized to accept donations which are exempted under above Section. PNB Farmers' Welfare Trust is established with the basic objective of welfare of farmers without any profit motive for the Bank. The Banks Chairman and Managing Director is the Chairman of the Trust and Executive Director & one Chief General Manger and three General Mangers of HO are the Trustees. To broad base the activities of the Trust, the following outside eminent persons have been inducted in the Trust as Trustees: Shri S. K. Mitra, Managing Director, NABARD, HO Shri S.K. Tuteja, IAS (Retd.), Ex - Secretary, Food & Public Distribution, Govt. Of India Dr. S.S.Johl, Ex - Vice Chancellor, Punjab Agriculture University, Ludhiana Dr.G.S.Kalkat, Ex - Vice Chancellor, Punjab Agriculture University, Ludhiana.

PNB FARMERS TRAINING CENTRE

To fulfill the objectives of PNB Farmers Welfare Trust, it was decided to establish PNB Farmers Training Centres (ftcs) in different states where the farmers, rural women and rural youth may be trained. Accordingly, letters were sent to different State Governments requesting them to allot 7-8 acres of land for establishment of PNB Farmers Training Centres. Many State Governments have responded to the above requests and allotted land for establishment of ftcs.

The latest status in this regard is as under :

FTCS now operational FTC Sacha Khera, District Jind, Haryana FTC Vidisha, District - Vidisha, Madhya Pradsh FTC Neemrana, District Alwar, Rajasthan FTC Shamshernagar (Sirhind), District- Fatehgarh Sahib, Punjab FTC Saifai, District Etawah, Uttar Pradesh FTC Labhandi, District Raipur, Chhattisgarh FTC Mehraj, District Bathinda, Punjab FTC Sacha Khera, District- Jind, Haryana 1. Started functioning wef 16.11.03, this is the first Farmers' Training Centre. 2. Till Dec, 2006, in 910 programmes 29876 persons including 4342 women have been trained. All these trainings and other related facilities are being given free of cost to all desirous persons. 3. Training related to the followings topics are being imparted to farmers: adoption of improved farm technologies, diversification of crops, cultivation of medicinal plants, aromatic plants, flowers, vegetables, fruits etc. Repair and maintenance of Tractor judicious use of nutrients/ pesticides/ insecticides, water harvesting technology, post harvest technology, preparation and use of organic manures allied agricultural activities animal health check up camps etc. Besides, Demonstration plots on various crops, vermi composting, solar lights, sprinkler / drip irrigation etc. Have been developed. Visit of farmers to herbal parks, Agriculture University and agriculture fairs etc. Are being organized. For ladies, 3 months duration trainings on sewing, cutting and embroidery are going on. Besides, trainings on preparation of home made goods like pickle, papad etc. Are also being organized with the help of ngos. For youth, 3 months duration Computer trainings and other vocational trainings are being held. Mobile FTC At FTC Sacha Khera, one Mobile FTC has been started on 12 November 2006 with the following facilities:

Training facility with LCD Projector and Laptop Computer On the spot Soil Sample Testing Artificial Insemination Treatment of Animals etc. Demonstration of Jatropha Oil Processing unit Development of village Sacha Khera as a Model Village Door to door survey of the entire village was undertaken and family profile, as per standardized format, of all the families residing in village Sacha Khera have been prepared. The Trust Board has sanctioned an amount of Rs.5.0 lacs (Rupees Five lacs) only for undertaking various developmental activities in the model village. After several meetings with the villagers and the Sarpanch, the developmental activities to be undertaken in the village for making it a model village and their financial outlay, both Fixed and Recurring, have been prepared. Now these are being implemented.Till now, Village Library, Adult Literacy centre, Homeopath Dispensary, Sewerage system have been established and solar lights, water cooler to school, cricket kits to Village Sports Club etc. Have been provided. Various other activities have also been planned.

FTC Vidisha, District Vidisha, MP :

The FTC has started functioning on 24.01.05. Till Dec 06, in 503 training programmes 11380 persons including 687 women have been trained. Like FTC Sacha Khera, in this FTC also trainings to farmers, women and youth are being given.Demonstration plots have also been developed.Village Rangai is being developed as a model village. FTC Neemrana, District- Alwar, Rajasthan The FTC has started functioning on 21.02.05. Till Dec 06, in 497 training programmes 12455 persons including 1330 women have been trained. Demonstration plots have also been developed. Village Neemrana is being developed as a model village. Skoch Financial Technologies Summit, at Mumbai, was attended by the Director, FTC Neemrana alongwth 2 farmers, who have been benefited after undergoing training at the FTC. One Documentary film prepared by M/S Skoch on FTC Neemrana was shown on the occasion. The above function was attended by the Dy, Governor, RBI, cmds of various Banks, Chairmen of NABARD, LIC, etc. Shri B.M.Mittal, CGM, PNB HO delivered Vision Statement on behalf of PNB. Wef 03.07.06, Computer Training programmes of 6 months duration has been started at the FTC under Tie-Up arrangement with one Computer Training Institute. All study materials, bag, identity card etc. Will be given to the trainees free of cost. Monthly Evaluation tests will be conducted. Successful trainees will be issued Certificates under joint signatures of the FTC and Computer Training Institute. This training will be given free of cost. The successful trainees are likely to get some gainful employment after completion of the above training. FTC Sirhind near Shamshernagar, District Fatehgarh Sahib, Punjab

1. The FTC has been inaugurated on 17.06.05 by Honble Minister of Co-Operative, State Govt. Of Punjab and worthy Chairman and Managing Director of PNB as well as Chairman of PNB FWT. 2. Various demonstration plots have been developed in the FTC complex. 3. Till Dec 06, in 344 training programmes 9855 persons including 2665 women have been trained. 4. Village Badali Ala Singh is being developed as a model village. 5. One NET house has been installed in the FTC in which cultivation of various crops have been undertaken by using only Organic manure. The same is being demonstrated to the trainee farmers. FTC Saifai, District- Etawah, UP 1. The FTC has been inaugurated on 09.08.05 by Honble Chief Minister of Uttar Pradesh and worthy Chairman and Managing Director of PNB as well as Chairman of PNB FWT. 2. Till Dec, 06, in 323 training programmes 7011 persons including 594 women have been trained. 3. Various demonstration plots have been developed in the FTC complex. 4. Village Tikara Bacha is being developed as a model village. FTC Labhandi, District- Raipur, Chhattisgarh The FTC has been inaugurated on 23.03.06. Till Dec 06, in 123 training programmes 2736 persons including 226 women have been trained. FTC Mehraj, district Bathinda in Punjab The construction of the FTC is complete. It is conducting training programmes. Till Dec 06, in 115 training programmes 2602 persons including 116 women have been trained. Ftcs for which Land have been alloted FTC Pilliayarpatti, district Shivaganga in Tamil Nadu, 5.0 acres of land has been purchased. On 25.06.06, the Foundation Stone Laying ceremony of the above FTC was held in presence of Shri P. Chidambaram, Honble Finance Minister, Govt. Of India. Shri S.C.Gupta, CMD, Shri K. Raghuraman, ED and other Senior Executives, Senior Govt. Officials and about 6000 farmers were present. Honble Finance Minister, Govt. Of India lauded the working of PNB and the establishment of FTC. Construction work will be completed shortly. FTC Jhalawar Patan, district Jhalawar in Rajasthan 8.0 acres land has been obtained. Plans are being prepared.

CORPORATE GOVERNANCE

A corporation is a congregation of various stakeholders,namely,customers,employees, investors, vendor partners, government and society. A corporationshould be fair and transparent to its stakeholders in all its transactions. This hasbecome imperative in todays globalized business world where corporations need toaccess global pools of capital, need to attract and retain the best human capital fromvarious parts of the world, need to partner with vendors on mega collaborations andneed to live in harmony with the community. Unless a corporation embraces anddemonstrates ethical conduct, it will not be able to succeed.

"Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance"

REPORT ON CORPORATE GOVERNANCE

Corporate Governance for the company means formalisation of the very best policies and practices, it has adhered to since its inception. The company is committed to the best practices for effective management and control of the business, which in turn shall result in the maximisation of the value of not only the sharholders but all the stakeholders in the company, thereby delivering the very best to the society at large. The objective is achieved through: Blend of the academic knowledge and business experience at the Board Well defined systems and procedures Transparent management Regular Board/Committee meetings for effective leadership, supervision & control

Board of Directors
1. Composition of the Board
The company meets this requirement as is stipulated by the code of corporate governance as the Board of Directors has only one executive director out of seven directors and the Chairman of the Board is a non-executive Director. The composition of the Board is as under : Sh. S.S.Kohli is the Chairman of the Board. He is also the Chairman and Managing Director of Punjab National Bank. He was earlier the Chairman and Managing Director of Punjab and Sind Bank.

Sh. T.S.Narayanasami is the Executive Director of Punjab National Bank. He was earlier General Manager of Union Bank of India. Dr.O.P.Chawla is an educationist. He was earlier Director of National Institute of Bank Management, Pune. Dr. Kamal Gupta is a Chartered Accountant. He was earlier Technical Director of The Institute of Chartered Accountants of India. Sh. S. K. Soni has been appointed as an additional director by the board in its meeting held on 23rd January, 2002. He was earlier Chairman cum Managing Director of Oriental Bank of Commerce. Sh.S.K.Awasthi is General Manager Punjab National Bank. Sh. Arun Kaul, Managing Director has vast experience in the debt market. He was earlier Chief of Investment Division of Punjab National Bank. He has also held position of Managing Director of PNB Asset Management Company ltd. Other information regarding the Board is given below :

Name of the Director

Category

No. Of Directorships Hell in other companies membership

Number of Board committee Held in other companies

Sh. S.S.Kohli Non-Executive Seven Sh. T.S.Narayanasami Non-Executive Five Dr. O.P.Chawla Non-Executive Independent Two Dr. Kamal Gupta Non-Executive Independent Four Sh. S.K. Soni* Non-Executive Independent Sh. S.K.Awasthi Non-Executive One Sh. Arun Kaul, Executive One Managing Director

One Eight -

* Sh. S.K. Soni is appointed as additional director by the board in its meeting held on 23/1/2002. ** only three committees viz. The Audit Committee, the Shareholders Grievance Committee and the Remuneration Committee are considered for this purpose.

2. Meetings and Attendance During the year 2001-2002, ten Board Meetings were held. Attendance record of the Directors in

The meetings is as under : Name of Director Sitting Fees Board Paid during Meeting The year (Rs.) Held on No. Of Board Meetings Attended Attended Last AGM held on August 16, 2001 Yes Yes Yes Yes Not Applicable Yes Yes

Sh. S.S.Kohli Nil Sh. T.S. Narayanasami Nil Dr. O.P.Chawla 30,000 Dr. Kamal Gupta 27,000 Sh. S. K. Soni* 6,000 Sh. S.K.Awasthi Nil Sh. Arun Kaul Nil

11.04.01 Ten 25.04.01 Seven 29.05.01 Ten 22.06.01 Nine 10.07.01 Two 25.10.01 Eight 29.11.01 Ten 19.12.01 23.01.02 15.03.02

* Sh. S.K. Soni is appointed as additional director by the board in its meeting held on 23/1/2002.

Committees of the Board 1. Audit Committee

The role and terms of reference of the Audit Committee covers the areas mentioned under Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956. During the year 2001- 2002 five meeting of the committee were held. The composition and attendance in the committee is as under,: Name of Director Position Sitting Fees paid Committee No. Of committee Held in the during the year Meetings meetings attended Committee (Rs.) Held on Dr. Kamal Gupta Chairman Dr. O.P.Chawla Member Sh. S.K.Awasthi Member 15,000 15,000 Nil 24.04.2001 21.05.2001 10.07.2001 23.10.2001 22.01.2002 Five Five Four

The Company Secretary acts as the Secretary to the Committee. 2. Remuneration of Directors Only non-executive independent directors are paid the sitting fees for attending the Board/ Committee meetings within the limits prescribed under the Companies Act, 1956.

Matters of remuneration of executive director are considered by the Board of Directors of the Company, with the interested executive director, not participating/voting. The terms of Remuneration of executive director are approved by the shareholders at the general body meeting.Therefore, no separate remuneration committee has been constituted. The details of remuneration paid to executive director in the financial year 2001-2002 is given in Note 2 of Notes to Accounts.(Schedule 18 of the financial statements.) The remuneration policy of the company is reviewed by the Board periodically.

3. Shareholders/Investors Grievance and Share Transfer Committee

Composition and Attendance

During the year 2001-2002, twenty two meetings of the committees were held. The composition And attendance in the same is as under : Name of the Director Sh. S. K. Awasthi Sh. Arun Kaul Position held in the Committee Chairman Member No. Of meetings attended Twenty Two Twenty Two

No sitting fee has been paid for these meetings. The company attends the investors grievances/correspondence expeditiously and usually reply is sent within a period of 10 days of receipt, except in the cases that are constrained by disputes or legal impediments.

General Body Meetings

Financial Year 2000-2001 1999-2000 1998-1999 Venue

Location and time of last three Annual General Meetings are as under : Date and Time August 16, 2001 at 1530 hrs. August 8, 2000 at 1130 hrs. August 13, 1999 at 1330 hrs.

FICCI Auditorium, Federation House, Tansen Marg, New Delhi-110 001 Punjab National Bank, 7 Bhikhaiji Cama Place, New Delhi 110 066 Punjab National Bank, 7 Bhikhaiji Cama Place, New Delhi 110 066

Management Discussion and Analysis

Management Discussion & Analysis has been given seperately in the Annual Report.

Disclosures

During 2001-02, the Company had no materially significant related party transactions which is considered to have potential conflict with the interests of the company at large. There has not been any non-compliance, penalities or strictures imposed on the Company by the Stock Exchanges, SEBI or any other statutory authority, on any matter relating to the capital markets.

Means of Communication

The company publishes Unaudited quarterly accounts and half-yearly accounts reviewed by auditors and Audited Annual Financial Results in Economic Times/ Business Standard/Financial Express and Navbharat Times, Delhi

General Shareholder Information

1. Annual General Meeting
Date and Time Venue : Financial Calendar : Date of Book Closure : Dividend Payment Date : : July 24, 2002 at 1530 hours FICCI Auditorium, Federation House, Tansen Marg, New Delhi 110 001 April 1 to March 31 July 18, 2002 to July 24, 2002 August 1, 2002
Listed in September, 2000

2. Listing on Stock Exchanges :

The Delhi Stock Exchange Association Ltd. DSE House, 3/1 Asaf Ali Road, New Delhi 110 002 The Stock Exchange, Mumbai Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 National Stock Exchange of India Ltd. Exchange Plaza, 5th Floor, Plot No. C/1 G- Block, Bandra Kurla Complex Bandra (E), Mumbai 400 051 Annual listing fee of the above mentioned stock exchanges has been paid on time.

Date : June 14, 2002 Chairman

AUDITORS REPORT GOVERNANCE

CERTIFICATE

ON

CORPORATE

To the Members of PNB Gilts Ltd. We have examined the compliance of conditions of Corporate Governance by PNB Gilts Ltd. For the year ended 31.3.2002 as stipulated in clause 49 of the Listing Agreement of the said company with stock exchange(s). The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit not an expression of opinion on the financial statements of the company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We state that no investor grievance(s) is pending for a period exceeding one month against the company as per the records maintained by the Shareholders/Investors Grievance Committee. We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the company.

For Bhushan Bensal Jain Associates Chartered Accountants

Place : New Delhi Dated : June 19, 2002

Ravi Bhardwaj Partner.

BIBLIOGARPHY

www.csrnetwork.com/csr.asp www.pnbgilts.com www.pnbindia.com www.answers.com www.sweetim.com