|
Report Date : |
16.04.2014 |
IDENTIFICATION DETAILS
|
Name : |
INDIAN ORDNANCE
FACTORIES |
|
|
|
|
Corporate Headquarters : |
Ayudh Bhawan, 10-A, S.K. Bose Road,
Kolkata – 700 001, West Bengal |
|
|
|
|
Country : |
|
|
|
|
|
Year of
Establishment : |
1775 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Not Available |
|
|
|
|
Legal Form : |
Industrial setup which
functions under the Department of Defence Production of the Ministry of
Defence |
|
|
|
|
Line of Business
: |
Subject engaged in
production, testing, logistics, research, development and marketing of a comprehensive
product range in the area of land, sea and air systems. |
|
|
|
|
No. of Employees
: |
Information declined by the Management |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Usually correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a part of ministry of Defence, Government of India. It is a
well-established entity having fine track record. The concerned person from accounts department denied to disclose any
information about the subject to us. As per indirect source, we found that the subject is one of the
factory engaged into manufacturing of transportation equipments for
department of defence, among the 41 factories operating under the head of
Indian Ordnance Factories. Trade relations are trustworthy. Business is active. Payment terms are
reported as usually correct due to bureaucratic hurdles. In view of long standing presence and experience along with the
support from government of India, the subject can be considered for business
dealings at usual trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – December 1, 2013
|
Country Name |
Previous Rating (30.09.2013) |
Current Rating (01.12.2013) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
India’s current account deficit for the fiscal third quarter ended September
2013 narrowed to $4.2 billion or 0.9 % of the gross domestic product from $31.9
billion or 6.5 % of GDP a year earlier, thanks to a pick-up in exports and
moderation in gold imports. Manufacturing activity and new orders in India
showed their strongest growth in a year in February. The news comes as a relief
after data showed Asia’s third largest economy grew by a slower-than-expected
4.7 % annually in the three months through December. The HSBC Manufacturing
Purchasing Managers’ Index which gauges the business activity of India’s
factories but not its’ utilities, rose to 52.5 in February, its highest in a
year from 51.4 in January. Overall new orders for factory goods which rose to a
one-year high of 54.9 contributed to the surge. China has emerged as India’s
biggest trading partner in the current financial year replacing the United Arab
Emirates and pushing it to the third spot. India-China trade has reached $49.5
billion with a 8.7 % share in India’s total trade. The US comes second at $46
billion with 8.1 % share during the first nine months of the current financial
year.
The Reserve Bank of India has granted an additional nine months to the
public to exchange currency notes printed before 2005 including Rs 500 and Rs
1,000 denominations, pushing the deadline to January 1, 2015. A day before
dates for the Lok Sabha polls were announced, the government decided to hike
interest rates on fixed deposit schemes offered by post offices up to 0.2 per
cent. The new rates will be effective April, 1. The Supreme Court will resume
hearing on March, 11 Nokia’s appeal against a ruling over transferring
ownership of its local mobile phones plant which is the subject of a tax
dispute to Microsoft Corp.
In the last days of the current Government, another scam has surfaced.
The defence ministry has ordered a probe into Hindustan Aeronautics Limited’s
contracts from Britain’s Rolls-Royce Holdings worth at least $ 1.2 billion. The
Central Bureau of Investigation will look into allegations that over $80
million was paid in kickbacks in a deal signed in 2011. India has asked Boeing
Co. to find a solution for problems with state-owned Air India’s 787
Dreamliners. The aircraft has experienced a series of malfunctions since its
debut in 2011.
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
INFORMATION DECLINED
MANAGEMENT NON – COOPERATIVE (91-44-26843989)
LOCATIONS
MANAGEMENT
|
Name : |
Mr. M. C.
Bansal |
|
Designation : |
DGOF and Chairman, OFB |
|
Joined IOFS on : |
28.03.1977 |
|
Chairman Since : |
01.03.2014 |
|
|
|
|
Name : |
Mr. Sudhakar
Asthana |
|
Designation : |
Additional DGOF/OEFHQ |
|
Joined IOFS on : |
22.01.1978 |
|
Member Since : |
30.08.2013 |
|
|
|
|
Name : |
Mr. S.
Yamdagni |
|
Designation : |
Member/PER |
|
Joined IOFS on |
06.01.1978 |
|
Member Since : |
30.08.2013 |
|
|
|
|
Name : |
Mr. Ashwani
Kr. Prabhakar |
|
Designation : |
Member/WV&E |
|
Joined IOFS on |
20.04.1978 |
|
Member Since : |
30.08.2013 |
|
|
|
|
Name : |
Mr. N. M.
Kalanee |
|
Designation : |
Member/P&MM |
|
Joined IOFS on |
19.09.1977 |
|
Member Since : |
30.08.2013 |
|
|
|
|
Name : |
Mr. M. K.
Jain |
|
Designation : |
Member/PEDB and TS |
|
Joined IOFS on : |
26.09.1977 |
|
Member Since : |
30.08.2013 |
|
|
|
|
Name : |
Ms. Sanhita
Kar |
|
Designation : |
Member/Finance |
|
Member Since : |
16.11.2012 |
KEY EXECUTIVES
|
Name : |
Mr. Y. Somra |
|
Designation : |
Additional General Manager |
BUSINESS DETAILS
|
Line of Business : |
Subject engaged in
production, testing, logistics, research, development and marketing of a
comprehensive product range in the area of land, sea and air systems. |
|
|
|
|
Products : |
·
Buy
Pistol/Revolver ·
Civilian
Arms and Ammunition ·
Weapons ·
Ammunition,
Explosives, Propellants and Chemicals ·
Military
Vehicles ·
Armoured
Vehicles ·
Optical
Devices ·
Parachutes ·
Support
Equipment ·
Troop
Comfort and General Stores ·
Material,
Components and SPMs |
LOCAL AGENCY FURTHER INFORMATION
|
Check
List by Info Agents |
Available
in Report (Yes / No) |
|
1) Year of Establishment |
Yes |
|
2) Locality of the firm |
Yes |
|
3) Constitutions of the firm |
Yes |
|
4) Premises details |
No |
|
5) Type of Business |
Yes |
|
6) Line of Business |
Yes |
|
7) Promoter’s background |
No |
|
8) No. of employees |
No |
|
9) Name of person contacted |
No |
|
10) Designation of contact person |
No |
|
11) Turnover of firm for last three years |
No |
|
12) Profitability for last three years |
No |
|
13) Reasons for variation <> 20% |
-- |
|
14) Estimation for coming financial year |
No
|
|
15) Capital in the business |
No |
|
16) Details of sister concerns |
No |
|
17) Major suppliers |
No |
|
18) Major customers |
No |
|
19) Payments terms |
No |
|
20) Export / Import details (if
applicable) |
No |
|
21) Market information |
-- |
|
22) Litigations that the firm / promoter involved
in |
-- |
|
23) Banking Details |
No |
|
24) Banking facility details |
No |
|
25) Conduct of the banking account |
-- |
|
26) Buyer visit details |
-- |
|
27) Financials, if provided |
No |
|
28) Incorporation details, if applicable |
No |
|
29) Last accounts filed at ROC |
No |
|
30) Major Shareholders, if available |
No |
|
31)
Date of Birth of Proprietor/Partner/Director, if available |
No |
|
32)
PAN of Proprietor/Partner/Director, if available |
No |
|
33)
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
34)
External Agency Rating, if available |
No |
WEBSITE DETAILS:
HISTORY:
The Beginning
The history and development of Indian
Ordnance Factories is directly linked with the British reign in India. East
India company of England for their economic interest in India and to increase
their political hold considered military hardware as vital element. During 1775
British authorities accepted the establishment of Board of Ordnance in Fort
William, Kolkata. This marks the official beginning of the Army Ordnance in
India.
In 1787 a gun powder factory was
established at Ishapore which started production from 1791 (at which location
Rifle Factory was established in 1904). In 1801 a Gun Carriage Agency at
Cossipore, Kolkata (presently known as Gun and Shell Factory, Cossipore) was
eatablished and production started from 18th March, 1802. This is the first
Industrial establishment of Ordnance Factories which has continued its
existence till date.
Growth of Indian Ordnance Factories
The growth of the Ordnance
Factories leading to its present setup has been continuous but in spurts. There
were 18 ordnance factories before India became independent in 1947. 21
factories have been established after independence - mostly, in wake of defence
preparedness imperatives caused by the three major wars fought by the Indian
Armed forces. 40th Factory is under establishment at Nalanda, Bihar.
Main Events
Main events in the evolution of
Ordnance Factory can be listed as below:
1801 - Establishment of Gun
Carriage Agency at Cossipore, Kolkata.
1802 - Production started from
18th March 1802 at Cossipore.
1906 - The Administration of
Indian Ordnance Factories came under a separate charge as 'IG of Ordnance
Factories'.
1933 - Charged to 'Director of
Ordnance Factories'.
1948 - Placed under direct control
of Ministry of Defence.
1962 - Dept. of Defence Production
was set up at Ministry of Defence.
1979 - Ordnance Factory Board came
into existence from 2nd April.
Profile:
The Indian Ordnance Factories organisation - a family of 41 Ordnance Factories under the aegis of its corporate headquarters Ordnance Factory Board, Kolkata - possesses the unique distinction of over 200 years experience in defence production. They are engaged in production, testing, logistics, research, development and marketing of a comprehensive product range in the area of land, sea and air systems.
The patronage they receive both in India and abroad speaks of their quality of products and services. Undoubtedly, they are the force behind armed forces.
Indian Ordnance Factories is the oldest and largest industrial setup which functions under the Department of Defence Production of the Ministry of Defence. The ordnance factories form an integrated base for indigenous production of defence hardware and equipment, with the primary objective of self reliance in equipping the armed forces with state of the art battlefield equipments.
Introduction
Indian Ordnance Factories is a
giant industrial setup which functions under the Department of Defence
Production of the Ministry of Defence. Indian Ordnance Factories, headquartered
at Kolkata, is a conglomerate of 41 Factories, 9 Training Institutes, 3
Regional Marketing Centres and 4 Regional Controller of Safety.
Today OFB along with its 41
factories spread over India provide
·
a broad and versatile production
base with multi-technology capabilities
·
state of the art
manufacturing facilities
·
large reservoir of
skilled and professionally qualified manpower and managerial personnel
·
strict adherence
to quality standard (all the units are ISO-9000 certified)
·
original as well as
adaptive research and development to make need based refinement and
modifications
·
project engineering
capability
·
a strong base for
industrial training facilities
·
ready market access
due to convenient location
Geographical Spread
There are 41 Ordnance
Factories geographically distributed all over
the country at 24 different locations. A visual idea of how their factories and
headquarters are distributed can be had from their location
map.
|
Name of State/
Union Territory |
Number of
factories |
|
Maharashtra |
10 |
|
Uttar Pradesh |
8 |
|
Madhya Pradesh |
6 |
|
Tamil Nadu |
6 |
|
West Bengal |
4 |
|
Uttaranchal |
2 |
|
Andhra Pradesh |
1 |
|
Chandigarh |
1 |
|
Orissa |
1 |
Their Product Range
Items produced in Ordnance Factories
are highly sophisticated and complex in nature. Also the range of products is
simply astonishing. Their products, as is evident from the list below, span
across a wide and exhaustive range of requirements of any armed forces.
Their products must be safe in
handling, reliable and perform consistently during actual operation with equal
efficiency under varying and extreme conditions of climate. The plant and
technologies have been so chosen as to ensure high degree of quality and reliability
and is a unique blend of old and the most modern state-of-the-art CNC
technologies. The manufacturing process covers wide spectrum of engineering -
Mechanical, Electrical, Metallurgical, Chemical, Textile, Leather, Optics and
Electronics.
It is their endeavour to
manufacture world class products without compromising with the safety aspects
of products and processes. Adherence to safety standards is given highest
priority and a well laid down safety norm as well as diaster management plan
exists in the organisation.
The prime customers of Indian
Ordnance Factories are the Indian Armed Forces. Apart from supplying armaments
to the Armed Forces, Ordnance Factories also meet the requirement of other
customers viz. Central Paramilitary Forces and State Police Forces in respect
of Arms, Ammunition, Clothings, Bullet Proof Vehicles and Mine Protected
Vehicles etc. Increase in volume of Export, as an extension to its functioning
remains an important objective of Ordnance Factories.
PRESS RELEASES
MOD'S MASSIVE RS 150000.000 MILLIONS UPGRADE FOR ORDNANCE FACTORIES
APRIL 08, 2013
This amount will be spent during the 12th Plan on upgrading, modernising and supplementing the OFB's production facilities The defence ministry (MoD) will spend an unprecedented Rs 150000.000 Millions on the Ordnance Factory Board (OFB), its fully owned conglomerate of 41 factories that manufactures arms, ammunition, vehicles and equipment mainly for the military.
This amount will be spent during the 12th Plan (2012-13 to 2016-17) on
upgrading, modernising and supplementing the OFB's production facilities.
During the last decade, the OFB has spent an average of about Rs 4000.000
Millions per year on modernisation. Now, during the 12th Plan, OFB
modernisation will consume more than Rs 30000.000 Millions annually.
For private sector companies that are foraying into defence manufacture, this
is worrying news. Bharat Forge, for example, has invested about Rs 1000.000
Millions on importing an entire factory to build artillery guns; it has set up
a production unit in Pune. Now the private sector fears that that heavy
expenditure on upgrading the OFB will result in military orders being placed on
the OFB rather than on the private sector.
Dismissing such apprehension, a top MoD official tells Business Standard that
the OFB's modernisation plan will not create additional production capacity.
Instead, the new infrastructure is intended to improve production quality and
to reduce the OFB's manpower levels by increasing automation.
For example, some OFB facilities still fill explosive into ammunition by
pouring it manually, a laborious and inaccurate process that causes variations
in the ammunition. The new machines being installed will fill explosive using a
screw-driven mechanism that is faster and more precise.
A key benefit of modernisation will be a reduction in the OFB's bloated
workforce. While the OFB is authorised more than 1,50,000 workers, it functions
with just 90,000 on Sunday. Modernisation could bring this down to below
50,000.
This modernisation plan comes as a major relief for the OFB, which has been
tarred by scandal since the Central Bureau of Investigation arrested the OFB's
just-retired chairman Sudipta Ghosh on May 19, 2009, for allegedly accepting
bribes from foreign companies.
Now dust from that scandal appears to be settling. While Ghosh has not yet been
convicted, the MoD banned six arms vendors on March 5, 2012, from doing
business with the Ordnance Factory Board for 10 years. Last month the army
placed a Rs 12600.000 Millions order for 114 artillery guns, which the Ordnance
Factory Board has developed from plans obtained from Bofors in the 1980s.
While Bofors provided 155 millimetre/39 calibre guns in the 1980s, the OFB has
upgraded these with in-house RandD to 45 calibre.
Of the sanctioned Rs 150000.000 Millions, the Ordnance Factory Board says that Rs 76000.000 Millions will be spent from the Replacement Fund on replacing old machinery with new, automated and efficient machines that require fewer operators. The Replacement Fund is built up from the depreciation amount that OFB writes off each year, creating a corpus for replacing production machines after about 20 years of operation. Another Rs 74000.000 Millions will be spent from the New Capital head on civil works and modern production gear that is badly needed in the OFB's more decrepit factories.
One of the OFB's facilities, the Gun and Shell Factory, Cossipore, has produced
equipment at the same location since 1802.
The New Capital expenditure also caters for new projects, such as the Rs
15000.000 Millions plan that was approved last month for manufacturing the
DRDO-designed Pinaka multi-barrel rocket launcher, and advanced variants of its
ammunition in several OFB facilities.
In addition, the Ordnance Factory Board will now build 51 mm and 81 mm mortar
casings and will enhance its capacities for producing and overhauling infantry
combat vehicles (ICVs).
"The modernisation plan, which was drawn up in 2010, has been approved by
the government. Now the MoD will allocate funds to the OFB based on an annual
expenditure plan," says L Mohanty, the OFB's Deputy Director
(Engineering).
OFB officials admit that it will be a challenge to transparently absorb such a
large modernisation budget. Mohanty explains that the OFB has overhauled and
simplified its procurement procedures, especially eprocurement, which is now
mandatory for most transactions.
Three key procurement manuals have been completely revamped. These include the
Plant and Machinery Procurement Manual, with new procedures for overhauling
machinery; the Civil Works Procedure Manual which has a simplified procedure
for civil works construction; and the OFB Procurement Manual, which lays down
the procedure for procuring raw materials.
The Ordnance Factory Board was the world's 46th largest arms manufacturer in
2010, according to the Stockholm International Peace Research Institute.
Its total sales that year were Rs 112140.000 Millions ($2.04 billion), with arms sales bringing in about 80 per cent of its revenue. However, worker productivity has been abysmally low, at just Rs 1.250 Millions per annum.
CRPF ASKS OFB TO ENHANCE SAFETY OF MINE PROTECTED VEHICLES
NOVEMBER 18, 2012
New Delhi: The CRPF has approached the Ordnance Factory Board to enhance security features of its mine protected vehicles which have infamously earned the tag of "coffin on wheels" as numerous troopers have died inside them in Maoists triggered IED blasts.
|
|
The country's lead anti-naxal force has asked the Ordnance Factory Board (OFB) to enhance the "internal security and accident insulation" ergonomics of these vehicles.
Top CRPF commanders, including those deployed for operations in naxal-affected
areas, recently met OFB experts including those from the Vehicle Factory
Jabalpur (VFJ) to devise new designs to make these vehicles completely safe for
its occupants.
The VFJ is the designated unit of the OFB which looks after the transport needs and manufactures armoured vehicles for the armed forces in the country including paramilitary forces.
Sources in the force said the CRPF has suggested enhancing the cushioning and insulation of the metal interiors of the mine protected vehicles so that once the vehicle is hit by a explosion the occupants remain safe inside.
"In a number of cases, it was found that while the vehicle sustained the
impact of the blast the resulting tumbling and toppling effect killed the
troops as the hard metal interiors hit the personnel inside injuring them
seriously," they said.
The force has now asked the VFJ experts and engineers to enhance the interiors
while further armouring the body of these vehicles, they said.
Last year, the then CRPF chief K Vijay Kumar had used the tag "coffin on
wheels" for these vehicles even as he had said that these vehicles cannot
be written off and can be improved to suit the specific needs of these terrains
which have been mined extensively with as much as 70kgs of explosives hidden
beneath the roads in certain cases.
The CRPF also discussed the designs of similar vehicles used by NATO forces in
Afghanistan which have better ergonomics and protect troopers from getting
killed or seriously injured.
On October 18, Naxals had carried out a deadly blast in which six CRPF troopers
inside a mine protected vehicle were killed in the Chakarbanda forests of Gaya
(Bihar).
In a number of instances earlier, the mine protected vehicles have been blasted
to smithereens as the explosives planted were in large quantities.
The force has already issued orders to all its formations in the Naxal grid to
rationalise the use of these vehicles and prefer patrolling on foot. The
instructions also mentioned that only in very rare instances, vehicles and mine
protected trucks should be used.
FIELD TRIALS OF UPGRADED BOFORS GUN IN JAN 2013
MARCH 20, 2012
Kolkata: An upgraded version of the 155mm Bofors gun, the Indian Army's most potent artillery weapon, will be ready for field trials in January 2013, a top official of the Ordnance Factory Board (OFB) said on Tuesday.
"We are working on this upgraded version. This has been tried out in PXE
(Proof and Experimental Establishment), Balasore," OFB chairperson Sashi
Dhar Dimri said on the sidelines of its 210th anniversary here.
|
|
OFB is upgrading the gun from its original 39-calibre to 45-calibre with mechanical and electronic suites.
Extensive firing has been carried out at PXE Balasore as part of the upgrade
process.
"We are confident that in the beginning of 2013, our GCF (Gun Carriage
Factory, Jabalpur) will be in a position to field the gun for trials,"
Dimri said.
While one gun has been upgraded with the electronic suite incorporating
ballistic computers, servo valves and communication systems to provide
automation, the second gun has been upgraded by fitting a new 45 calibre
barrel, enabling it to achieve a range of 40 km.
INDIGENOUS ARTILLERY GUN 'DHANUSH' TO BE READY THIS YEAR
MARCH 18, 2014
KOLKATA: After trials, India's indigenous artillery gun 'Dhanush' would be ready for use by the Army by the end of this year.
Ordnance Factory Board (OFB) chairman M C Bansal today said the winter trials
of the 'desi' howitzers were successfully completed in Sikkim and after the
summer trials to be held in the deserts of Rajasthan in the next few months, it
would be ready for use.
"We will add another laurel to the country by producing them with
indigenous technology," he said.
After the extensive trials, 'Dhanush' would be produced in bulk in the Gun
Carriage Factory in Jabalpur and the Army has placed an initial order of 114
such guns.
An improved and indigenous version of the Swedish Bofors, 'Dhanush' is a 155mm
and 45 calibre gun. While the original Bofors gun has a maximum effective range
of 27 km, 'Dhanush' can fire a salvo up to 38 km in the plains.
With the Defence Ministry focusing on indigenous technology, OFB had also
decided to increase production capacity for making 5000 rockets for the Pinaka
multi-barrel weapons system.
"Our capacity expansion programme is underway," Bansal said, adding
that production capabilities for T-90 and T-72 tanks, engines for armoured
vehicles to meet the requirements of the Army were being augmented.
The Kolkata-based OFB, which makes arms, ammunition and equipment for military and
civilian used at 41 factories in the country, was on a massive modernisation
and product upgrade programme investing Rs 110000.000 Millions in the 12th Plan
period.
Stating that core competency of OFB was in ammunition, Bansal said making
hardware as per the needs of the armed forces was being looked into.
An Ordnance Factory Project was underway at Nalanda for bi-modular charges
while the Korwa project would manufacture carbines.
Officials said OFB would be taking up new products such as new generation
assault rifles, CQB carbine, 155/52 artillery guns, 155/52 mounted gun system,
Smerch rockets, grad rockets, successor to L-70 AD gun, very short-range air
defence missile and latest generation ammunition for 84 mm rocket launcher
through technology transfer.
Asked about exports, the OFB chairman said products worth Rs 500.000 c Millions
rore were sold to buyers outside the country for visibility at the global
level.
PROBATIONERS OF INDIAN ORDNANCE FACTORIES SERVICE CALL ON THE PRESIDENT
30.03.2013
A group of 30 probationers of Indian Ordnance Factories Service -2012 (i) batch from National Academy of Defence Production, Nagpur called on the President of India, Shri Pranab Mukherjee today (May 30, 2013) at Rashtrapati Bhavan.
Speaking on the occasion, the President said that Indian Ordnance Factory Organization has aptly earned its name as ‘force behind armed forces’ as it is ever ready to contribute towards the defence and the peace keeping efforts of the country.
The President said that while trying their managerial and technical skills, officers should never forget that for every failed bullet or weapon, the life of a soldier who is just performing his call of duty for the safety and integrity of this country would be at stake. It’s not about producing arms and ammunitions only; it is about giving quality products, ensuring timely deliveries and strengthening hands of our armed forces, para military forces and police forces, he stated.
The President said that in future the probationary officers would be manning the decision making positions. He advised them that they must ensure that the integrity of government decision-making is not compromised. He urged them to ensure transparency in their decision making and actions.
The President said that innovation and modernization is the key to survival for Ordnance Factories in today’s continually changing environment.
The probationers of Indian Ordnance Factory Service were in Delhi for a three day training on Parliamentary Procedures and Practices at (Bureau of Parliamentary Studies and Training (BPST), Lok Sabha Secretariat.
CAG REPORT ON ARMY AND ORDNANCE FACTORIES, DEFENCE SERVICES PRESENTED
The Compliance Audit Report No. 30 of 2013 of the CAG on the Army and Ordnance Factories (Defence Services) deals with audit of the accounts and the financial transactions related to the Ministry of Defence, the Army, Ordnance Factories, Defence Research and Development Organisation and Works and Military Engineer Services was laid on the floor of Parliament here today. Compliance Audits scrutinize transactions relating to expenditure, receipts, assets and liabilities of the audited entities to ascertain whether the provisions of the Constitution of India, applicable laws, rules, regulations and various orders and instructions issued by the competent authorities are being complied with.
The Report contains a total of 27 compliance audit paragraphs which are divided into six chapters.
MINISTRY OF DEFENCE
Para 2.1 Improper management of Defence land
Despite highlighting cases of poor management of Defence estates in the various Audit Reports repeatedly and issue of specific directions by the PAC for strict compliance with the concerned Rules and Regulation, there had been no significant improvement in the management of Defence land. As a result, the irregularities relating to misuse of Defence land, inordinate delay in renewal/termination of leases involving huge accumulation of arrears of rentals, unauthorised occupation of Defence land by other departments etc. continued to persist.
2.3 Non introduction of Air‐ Conditioners in Tanks
Ignoring the recommendations of the trial team, the Ministry of Defence procured Tanks 'X' valuing Rs.90833.600 Millions in 2001 and 2007 without Air Conditioners rendering the fleet of Tank ‘X’ vulnerable to degradation of sensitive components. Although the action for procurement of Air‐Conditioners was initiated in 2002, the same was yet to materialise.
2.4 Non‐synchronization of payments without corresponding progress of work
Monitoring Cell consisting of members from Army and Bharat Earth Movers Limited failed to release payments judiciously, without linking the same to corresponding progress of work resulting in release of Rs.1100.00 Millions as interest free advance to M/s Bharat Earth Movers Limited. As a result, order placed in 2001 for supply of Pontoon Mid Stream bridges did not fructify despite advance payment of Rs.3137.200 Millions made almost nine years ago.
2.5 Absence of effective controls resulting in non recovery of outstanding dues
Ambiguity about the responsibility between Ministry of External Affairs (MEA) and Ministry of Defence (MoD) for recoveries pertaining to Peace Keeping Missions from the United Nations (UN) not only resulted in accumulation of huge outstanding balances but also in unlikely reimbursement of Rs. 738.400 Millions due from four missions which have since been closed.
ARMY
3.1 Acceptance of sub‐standard stores without prior technical inspection from an unregistered and inexperienced firm
The Integrated Headquarters of Ministry of Defence (Army) procured Mask Face Extreme Cold Weather valuing `25.400 Millions between April 2008 and August 2008 from an unregistered vendor without proper survey and prior approval of sample resulting in non‐ utilisation of 92783 numbers valuing `18.200 Millions.
3.3 Loss due to non‐maintenance of batteries
Out of 37957 low maintenance batteries procured by Army Headquarters/Central Ordnance Depot Delhi Cantonment, 6993 batteries became defective due to inadequate maintenance required during storage resulting in a loss of Rs.41.800 Millions.
3.5 Extra expenditure on account of provision of unauthorized strengthening measures in Buildings
In violation of Indian Standard 1893:2002, National Building Code of India 2005 and Central Command Works specifications, concerned competent financial authorities accorded sanctions incorporating additional plinth area rates for construction of buildings in seismic zones II and III resulting in extra expenditure of Rs.23.400 Millions.
WORKS AND MILITARY ENGINEER SERVICES
4.2 Poor planning resulting in suspension of work and damage to the Government property
Army acquired land worth Rs.90.400 Millions, without considering the provision for approach road, resulting in suspension of construction work after incurring Rs.30.000 Millions. These assets sustained damages worth Rs.3.700 Millions and necessitated preventive works worth Rs.18.700 Millions.
DEFENCE RESEARCH AND DEVELOPMENT ORGANISATION
5.1 Extra avoidable expenditure by ANURAG
Advanced Numerical Research and Analysis Group placed a supply order on single tender basis on M/s ITI Limited Hyderabad for upgradation of project CHITRA at a cost of Rs.163.800 Millions. However, M/s ITI Limited got the work executed by outsourcing through M/s Real Time Tech Solution Bangalore at a cost of Rs.142.600 Millions involving extra expenditure of Rs.21.200 Millions to the department.
5.3 Procurement in violation of norms by DRDO
Defence Research and Development Organisation procured a critical component required in production of ‘NAG’ missile at a cost of Rs.525.800 Millions, in anticipation of an order from the Army, which resulted in blocking of Government money amounting to Rs.347.000 Millions.
ORDNANCE FACTORIES ORGANISATION
6.4 Undue benefit to a foreign firm by diluting the conditions in Tender Enquiry and contract
Ordnance Factory Badmal, in violation of Defence Procurement Manual, accorded undue benefit to a foreign firm by accepting the PC Sheets valuing Rs.25.800 Millions without ascertaining its manufacturing month. This coupled with delayed issue of PC Sheets to Ordnance Factory Chanda had resulted in accumulation of shelf life expired PC Sheets valuing Rs.6.700 Millions.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.60.26 |
|
|
1 |
Rs.100.71 |
|
Euro |
1 |
Rs. 83.27 |
INFORMATION DETAILS
|
Information
Gathered by : |
HNA |
|
|
|
|
Report Prepared
by : |
KVT |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.