1. First Internal Affairs Minister of independent India





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MCQ-> Read carefully the four passages that follow and answer the questions given at the end of each passage:PASSAGE I The most important task is revitalizing the institution of independent directors. The independent directors of a company should be faithful fiduciaries protecting, the long-term interests of shareholders while ensuring fairness to employees, investor, customer, regulators, the government of the land and society. Unfortunately, very often, directors are chosen based of friendship and, sadly, pliability. Today, unfortunately, in the majority of cases, independence is only true on paper.The need of the hour is to strengthen the independence of the board. We have to put in place stringent standards for the independence of directors. The board should adopt global standards for director-independence, and should disclose how each independent director meets these standards. It is desirable to have a comprehensive report showing the names of the company employees of fellow board members who are related to each director on the board. This report should accompany the annual report of all listed companies. Another important step is to regularly assess the board members for performance. The assessment should focus on issues like competence, preparation, participation and contribution. Ideally, this evaluation should be performed by a third party. Underperforming directors should be allowed to leave at the end of their term in a gentle manner so that they do not lose face. Rather than being the rubber stamp of a company’s management policies, the board should become a true active partner of the management. For this, independent directors should be trained in their in their in roles and responsibilities. Independent directors should be trained on the business model and risk model of the company, on the governance practices, and the responsibilities of various committees of the board of the company. The board members should interact frequently with executives to understand operational issues. As part of the board meeting agenda, the independent directors should have a meeting among themselves without the management being present. The independent board members should periodically review the performance of the company’s CEO, the internal directors and the senior management. This has to be based on clearly defined objective criteria, and these criteria should be known to the CEO and other executive directors well before the start of the evolution period. Moreover, there should be a clearly laid down procedure for communicating the board’s review to the CEO and his/her team of executive directors. Managerial remuneration should be based on such reviews. Additionally, senior management compensation should be determined by the board in a manner that is fair to all stakeholders. We have to look at three important criteria in deciding managerial remuneration-fairness accountability and transparency. Fairness of compensation is determined by how employees and investors react to the compensation of the CEO. Accountability is enhanced by splitting the total compensation into a small fixed component and a large variable component. In other words, the CEO, other executive directors and the senior management should rise or fall with the fortunes of the company. The variable component should be linked to achieving the long-term objectives of the firm. Senior management compensation should be reviewed by the compensation committee of the board consisting of only the independent directors. This should be approved by the shareholders. It is important that no member of the internal management has a say in the compensation of the CEO, the internal board members or the senior management. The SEBI regulations and the CII code of conduct have been very helpful in enhancing the level of accountability of independent directors. The independent directors should decide voluntarily how they want to contribute to the company. Their performance should decide voluntarily how they want to contribute to the company. Their performance should be appraised through a peer evaluation process. Ideally, the compensation committee should decide on the compensation of each independent director based on such a performance appraisal. Auditing is another major area that needs reforms for effective corporate governance. An audit is the Independent examination of financial transactions of any entity to provide assurance to shareholder and other stakeholders that the financial statements are free of material misstatement. Auditors are qualified professionals appointed by the shareholders to report on the reliability of financial statements prepared by the management. Financial markets look to the auditor’s report for an independent opinion on the financial and risk situation of a company. We have to separate such auditing form other services. For a truly independent opinion, the auditing firm should not provide services that are perceived to be materially in conflict with the role of the auditor. These include investigations, consulting advice, sub contraction of operational activities normally undertaken by the management, due diligence on potential acquisitions or investments, advice on deal structuring, designing/implementing IT systems, bookkeeping, valuations and executive recruitment. Any departure from this practice should be approved by the audit committee in advance. Further, information on any such exceptions must be disclosed in the company’s quarterly and annual reports. To ensure the integrity of the audit team, it is desirable to rotate auditor partners. The lead audit partner and the audit partner responsible for reviewing a company’s audit must be rotated at least once every three to five years. This eliminates the possibility of the lead auditor and the company management getting into the kind of close, cozy relationship that results in lower objectivity in audit opinions. Further, a registered auditor should not audit a chief accounting office was associated with the auditing firm. It is best that members of the audit teams are prohibited from taking up employment in the audited corporations for at least a year after they have stopped being members of the audit team.A competent audit committee is essential to effectively oversee the financial accounting and reporting process. Hence, each member of the audit committee must be ‘financially literate’, further, at least one member of the audit committee, preferably the chairman, should be a financial expert-a person who has an understanding of financial statements and accounting rules, and has experience in auditing. The audit committee should establish procedures for the treatment of complaints received through anonymous submission by employees and whistleblowers. These complaints may be regarding questionable accounting or auditing issues, any harassment to an employee or any unethical practice in the company. The whistleblowers must be protected. Any related-party transaction should require prior approval by the audit committee, the full board and the shareholders if it is material. Related parties are those that are able to control or exercise significant influence. These include; parent- subsidiary relationships; entities under common control; individuals who, through ownership, have significant influence over the enterprise and close members of their families; and dey management personnel.Accounting standards provide a framework for preparation and presentation of financial statements and assist auditors in forming an opinion on the financial statements. However, today, accounting standards are issued by bodies comprising primarily of accountants. Therefore, accounting standards do not always keep pace with changes in the business environment. Hence, the accounting standards-setting body should include members drawn from the industry, the profession and regulatory bodies. This body should be independently funded. Currently, an independent oversight of the accounting profession does not exist. Hence, an independent body should be constituted to oversee the functioning of auditors for Independence, the quality of audit and professional competence. This body should comprise a "majority of non- practicing accountants to ensure independent oversight. To avoid any bias, the chairman of this body should not have practiced as an accountant during the preceding five years. Auditors of all public companies must register with this body. It should enforce compliance with the laws by auditors and should mandate that auditors must maintain audit working papers for at least seven years.To ensure the materiality of information, the CEO and CFO of the company should certify annual and quarterly reports. They should certify that the information in the reports fairly presents the financial condition and results of operations of the company, and that all material facts have been disclosed. Further, CEOs and CFOs should certify that they have established internal controls to ensure that all information relating to the operations of the company is freely available to the auditors and the audit committee. They should also certify that they have evaluated the effectiveness of these controls within ninety days prior to the report. False certifications by the CEO and CFO should be subject to significant criminal penalties (fines and imprisonment, if willful and knowing). If a company is required to restate its reports due to material non-compliance with the laws, the CEO and CFO must face severe punishment including loss of job and forfeiting bonuses or equity-based compensation received during the twelve months following the filing.The problem with the independent directors has been that: I. Their selection has been based upon their compatibility with the company management II. There has been lack of proper training and development to improve their skill set III. Their independent views have often come in conflict with the views of company management. This has hindered the company’s decision-making process IV. Stringent standards for independent directors have been lacking....
MCQ-> Study the following information carefully and answer the questions given below : Eight persons- P, Q, R, S, T, U, V and W - are sitting around a square table in such Question : way that four of them sit at four corners of the square while other four sit in the middle of each of the four sides. P, Q, R and S are facing towards the centre of table while T, U, V and W are facing outside. The ones who sit at the four corners face towards the centre while those who sit in the middle of the sides face outside. Each one of them has different legislative post viz, Defence Secretary, Finance Minister, Home Minister, Foreign Minister, HRD Minister, Education Minister, Prime Minister and Leader of Opposition but not necessarily in the same order. W is the second to the right of the Leader of Opposition. The Leader of Opposition is facing outside. T is the third to the left of Finance Minister. Finance Minister is not the immediate neighbour of W or Defence Secretary. R is not the Prime Minister and he is not the immediate neighbour of HRD Minister. U is to the immediate left of Prime Minister. Prime Minister is not the immediate neighbour of Defence Secretary. Home Minister and Foreign Minister are immediate neighbours of each other. Foreign Minister is not the immediate neighbour of the Leader of Opposition. There is only one person between Home Minister and S. V is Education Minister and he is not the immediate neighbour of P. S is not the Prime Minister.Who among the following is the Prime Minister ?
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MCQ-> Read the following passage carefully and answer the questions given below it. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions. Once upon a time there was a King of Benaras who was very rich. He had many servants and a beautiful palace with wonderful gardens; he had chariots and a stable full of horses. But his most prized possession was a magnificent elephant called Mahaghiri. She was as tall as two men, and her skin was of the colour of thunder clouds. She had large flapping ears and small, bright eyes and she was very clever. Mahaghiri lived in her own special elephant house and had her own keeper, Rajinder. The King would often visit Mahaghiri to take her some special tit-bit to eat and check that Rajinder was looking after her properly. But Rajinder needed no reminding, for he also loved the elephant dearly, and trusted her completely. Every morning, he would take her down to the river for her bath. Then he would bring her freshly cut grass, leaves and the finest fruits he could find in the market for her breakfast. During the day, he would talk to her and, in the evening, he would play his flute to send her to sleep. One morning, Rajinder arrived as usual with fruit for Mahaghiri’s breakfast. Suddenly, before he knew what was happening, she picked him up with her trunk and threw him out of the stall, breaking his arm. She began to stamp on the ground and trumpet so loudly that it took several strong men all morning to bind her with ropes and chains, When the king heard about what had happened, he was very upset and sent for the doctor to help Rajinder. Then he called for his chief minister. “You must go and see Mahaghiri at once,” he said. “She used to be so kind and gentle, but this morning she threw her keeper out of her stall. I can’t understand it. She must be ill or in pain. Spare no expense in finding a cure.” So the chief minister went to see Mahaghiri. who was still bound firmly with ropes. First he looked at her eyes – they were as clear and bright as usual. Then he felt behind her ears – her temperature was normal. Next he listened to her heart that was fine too – and checked all over for cuts or sores. He could find nothing wrong with her. “Strange,” he thought. “I can find no explanation for her bad behaviour.”But then his eye was caught by something gleaming in the straw. It was a sharp, curved knife, like the ones used by robbers. Could there be a connection? That night, when everyone else had gone to bed, the chief minister returned to the elephant house. There, in the stall next to Mahaghiri’s, sat a band of robbers. “Tonight we’ll burgle the palace,” said the chief. “First, we’ll make a hole in the wall, then we’ll steal the treasure. “But what about the guards?” someone asked. “Don’t tell me you’re still afraid to kill! When will you learn to be a real robber?” From the shadows, the minister could see the elephant, her ears pinned back, listening to every hateful and violent word.”Just as I suspected,” thought the minister. Then he slipped out, bolted the door on the outside so the robbers could not escape, and went immediately to the king.”Your majesty,” he said, “I think I have found the cause of your elephant’s bad behaviour.” As soon as the king heard what the minister had to say, he sent for his guards and had the robbers arrested. “But what about the elephant? How can she be cured?’ he asked. “Well, your majesty, if Mahaghiri became dangerous through being.in the company of those wicked robbers, perhaps she could be cured by being in the company of good people.” “What a brilliant idea!” exclaimed the king. “Let us invite the friendliest, happiest and kindest people in the city to meet in the stall next to the elephant.” “Mahaghiri, the king’s most prized elephant, has been in bad company and has become violent and dangerous,” the minister told his friends. “Will you help her to become her old self again?””Of course,” they replied. “What do you want us to do?” “Just meet in the elephant house every day for the next week. Let her hear how kindly and thoughtfully you speak to each other, and how helpful you are.” So the minister’s friends met in the elephant house as planned. They talked together and enjoyed each other’s company. Sometimes they brought cakes and sweets to share; sometimes their children came and played happily in the straw. All the while, Mahaghiri watched and listened. Gradually, she became calmer. “I think it’s working,” said the minister. “Soon we’ll be able to remove the ropes.” Everyone felt a bit nervous when the day came for Mahaghiri to be untied. The king ordered everyone to wait outside as, very carefully, brave Rajinder began to undo the ropes around her ears and trunk. Next he removed the ropes holding her head. Finally, he loosened the thick chains holding her great feet. Everyone held their breath. What if she was still wild?Mahaghiri looked round shuffling her feet to stretch them. Then she slowly curled her trunk around her keeper’s waist and lifted him high into the air before placing him gently on her back. A great cheer went up. The king was delighted. “Let’s have a picnic to celebrate,” he announced. “Mahaghiri can come too.” What a great afternoon they all had! Mahaghiri bathed in the lake and gave the children rides. It seemed as though she had now become kinder, gentler and even more trustworthy than ever. But Rajinder never forgot what had happened and was always careful to set Mahaghiri a good example by being kind and friendly himself.As per the context of passage, what was the most prized possession of the king of Benaras ?
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MCQ-> India is rushing headlong toward economic success and modernisation, counting on high- tech industries such as information technology and biotechnology to propel the nation toprosperity. India’s recent announcement that it would no longer produce unlicensed inexpensive generic pharmaceuticals bowed to the realities of the World TradeOrganisation while at the same time challenging the domestic drug industry to compete with the multinational firms. Unfortunately, its weak higher education sector constitutes the Achilles’ Heel of this strategy. Its systematic disinvestment in higher education inrecent years has yielded neither world-class research nor very many highly trained scholars, scientists, or managers to sustain high-tech development. India’s main competitors especially China but also Singapore, Taiwan, and South Korea — are investing in large and differentiated higher education systems. They are providingaccess to large number of students at the bottom of the academic system while at the same time building some research-based universities that are able to compete with theworld’s best institutions. The recent London Times Higher Education Supplement ranking of the world’s top 200 universities included three in China, three in Hong Kong,three in South Korea, one in Taiwan, and one in India (an Indian Institute of Technology at number 41.— the specific campus was not specified). These countries are positioningthemselves for leadership in the knowledge-based economies of the coming era. There was a time when countries could achieve economic success with cheap labour andlow-tech manufacturing. Low wages still help, but contemporary large-scale development requires a sophisticated and at least partly knowledge-based economy.India has chosen that path, but will find a major stumbling block in its university system. India has significant advantages in the 21st century knowledge race. It has a large high ereducation sector — the third largest in the world in student numbers, after China andthe United States. It uses English as a primary language of higher education and research. It has a long academic tradition. Academic freedom is respected. There are asmall number of high quality institutions, departments, and centres that can form the basis of quality sector in higher education. The fact that the States, rather than the Central Government, exercise major responsibility for higher education creates a rather cumbersome structure, but the system allows for a variety of policies and approaches. Yet the weaknesses far outweigh the strengths. India educates approximately 10 per cent of its young people in higher education compared with more than half in the major industrialised countries and 15 per cent in China. Almost all of the world’s academic systems resemble a pyramid, with a small high quality tier at the top and a massive sector at the bottom. India has a tiny top tier. None of its universities occupies a solid position at the top. A few of the best universities have some excellent departments and centres, and there is a small number of outstanding undergraduate colleges. The University Grants Commission’s recent major support of five universities to build on their recognised strength is a step toward recognising a differentiated academic system and fostering excellence. At present, the world-class institutions are mainly limited to the Indian Institutes of Technology (IITs), the Indian Institutes of Management (IIMs) and perhaps a few others such as the All India Institute of Medical Sciences and the Tata Institute of Fundamental Research. These institutions, combined, enroll well under 1 percent of the student population. India’s colleges and universities, with just a few exceptions, have become large, under-funded, ungovernable institutions. At many of them, politics has intruded into campus life, influencing academic appointments and decisions across levels. Under-investment in libraries, information technology, laboratories, and classrooms makes it very difficult to provide top-quality instruction or engage in cutting-edge research.The rise in the number of part-time teachers and the freeze on new full-time appointments in many places have affected morale in the academic profession. The lackof accountability means that teaching and research performance is seldom measured. The system provides few incentives to perform. Bureaucratic inertia hampers change.Student unrest and occasional faculty agitation disrupt operations. Nevertheless, with a semblance of normality, faculty administrators are. able to provide teaching, coordinate examinations, and award degrees. Even the small top tier of higher education faces serious problems. Many IIT graduates,well trained in technology, have chosen not to contribute their skills to the burgeoning technology sector in India. Perhaps half leave the country immediately upon graduation to pursue advanced study abroad — and most do not return. A stunning 86 per cent of students in science and technology fields from India who obtain degrees in the United States do not return home immediately following their study. Another significant group, of about 30 per cent, decides to earn MBAs in India because local salaries are higher.—and are lost to science and technology.A corps of dedicated and able teachers work at the IlTs and IIMs, but the lure of jobs abroad and in the private sector make it increasingly difficult to lure the best and brightest to the academic profession.Few in India are thinking creatively about higher education. There is no field of higher education research. Those in government as well as academic leaders seem content to do the “same old thing.” Academic institutions and systems have become large and complex. They need good data, careful analysis, and creative ideas. In China, more than two-dozen higher education research centers, and several government agencies are involved in higher education policy.India has survived with an increasingly mediocre higher education system for decades.Now as India strives to compete in a globalized economy in areas that require highly trained professionals, the quality of higher education becomes increasingly important.India cannot build internationally recognized research-oriented universities overnight,but the country has the key elements in place to begin and sustain the process. India will need to create a dozen or more universities that can compete internationally to fully participate in the new world economy. Without these universities, India is destined to remain a scientific backwater.Which of the following ‘statement(s) is/are correct in the context of the given passage ? I. India has the third largest higher education sector in the world in student numbers. II. India is moving rapidly toward economic success and modernisation through high tech industries such as information technology and bitechonology to make the nation to prosperity. III. India’s systematic disinvestment in higher education in recent years has yielded world class research and many world class trained scholars, scientists to sustain high-tech development.....
MCQ-> Read the following caselet and choose the best alternative: Head of a nation in the Nordic region was struggling with the slowing economy on one hand and restless citizens on the other. In addition, his opponents were doing everything possible to discredit his government. As a famous saying goes, "There is no smoke without a fire", it cannot be said that the incumbent government was doing all the right things. There were reports of acts of omission and commission coming out every other day. Distribution of public resources for private businesses and for private consumption had created a lot of problems for the government. It was being alleged that the government has given the right to exploit these public resources at throw-away prices to some private companies. Some of the citizens were questioning the government policies in the Supreme Court of the country as well as in the media. In the midst of all this, the head of the nation called his cabinet colleagues for a meeting on the recent happenings in the country. He asked his minister of water resources about the bidding process for allocation of rights to setup mini-hydel power plants. To this, the minister replied that his ministry had followed the laid out policies of the government. Water resources were allocated to those private companies that bid the highest and were technically competent. The minister continued that later on some new companies had shown interest and they were allowed to enter the sector as per the guidelines of the Government. This, the minister added, would facilitate proper utilization of water resources and provide better services to the citizens. The new companies were allocated the rights at the price set by the highest bidders in the previous round of bidding. After hearing this, the head of the nation that one would expect the later allocations to be done after a fresh round of bidding. The minister of water resources replied that his ministry had taken permissions from the concerned ministries before allocating the resources to the new companies.Media reports suggested that the minister of water resources had deliberately allocated the water resources at old prices to the new companies, and in return some received kickbacks. However, the minister denied these charges. His counter argument was that he followed the stated policies of the Government and it is very difficult to price a scarce resource. He also said that the loss that the media is talking about is notional and in reality the Government and the citizens have gained by the entry of new players. Which of the following is the most appropriate inference?
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