About ERP System

What role does body language play in making oral presentation effective

2008-01-16T05:13:00.004-08:00

When you are presenting in front of an audience, you are performing as an actor is on stage. How you are being perceived is very important. Dress appropriately for the occasion. Be solemn if your topic is serious. Present the desired image to your audience. Look pleasant, enthusiastic, confident, proud, but not arrogant. Remain calm. Appear relaxed, even if you feel nervous. Speak slowly, enunciate clearly, and show appropriate emotion and feeling relating to your topic. Establish rapport with your audience. Speak to the person farthest away from you to ensure your voice is loud enough to project to the back of the room. Vary the tone of your voice and dramatize if necessary. If a microphone is available, adjust and adapt your voice accordingly.

Body language is important. Standing, walking or moving about with appropriate hand gesture or facial expression is preferred to sitting down or standing still with head down and reading from a prepared speech. Use audio-visual aids or props for enhancement if appropriate and necessary. Master the use of presentation software such as PowerPoint well before your presentation. Do not over-dazzle your audience with excessive use of animation, sound clips, or gaudy colors which are inappropriate for your topic. Do not torture your audience by putting a lengthy document in tiny print on an overhead and reading it out to them.

Speak with conviction as if you really believe in what you are saying. Persuade your audience effectively. The material you present orally should have the same ingredients as that which are required for a written research paper, i.e. a logical progression from INTRODUCTION (Thesis statement) to BODY (strong supporting arguments, accurate and up-to-date information) to CONCLUSION (re-state thesis, summary, and logical conclusion).

Do not read from notes for any extended length of time although it is quite acceptable to glance at your notes infrequently. Speak loudly and clearly. Sound confident. Do not mumble. If you made an error, correct it, and continue. No need to make excuses or apologize profusely.

Maintain sincere eye contact with your audience. Use the 3-second method, e.g. look straight into the eyes of a person in the audience for 3 seconds at a time. Have direct eye contact with a number of people in the audience, and every now and then glance at the whole audience while speaking. Use your eye contact to make everyone in your audience feel involved.

Speak to your audience, listen to their questions, respond to their reactions, adjust and adapt. If what you have prepared is obviously not getting across to your audience, change your strategy mid-stream if you are well prepared to do so. Remember that communication is the key to a successful presentation. If you are short of time, know what can be safely left out. If you have extra time, know what could be effectively added. Always be prepared for the unexpected.

Pause. Allow yourself and your audience a little time to reflect and think. Don't race through your presentation and leave your audience, as well as yourself, feeling out of breath.

What are the different types of sentences? Give 4 examples for each type

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A sentence is a group of words beginning with a capital letter and ending with a full-stop, exclamation or question mark in written language, containing a main verb.

Kinds of Sentences :

Declarative - A declarative sentence makes a statement. A declarative sentence ends with a period.

Example: The house will be built on a hill.

Interrogative - An interrogative sentence asks a question. An interrogative sentence ends with a question mark.

Example: How did you find the card?

Exclamatory - An exclamatory sentence shows strong feeling. An exclamatory sentence ends with an exclamation mark.

Example: The monster is attacking!

Imperative - An imperative sentence gives a command.

Example: Cheryl, try the other door.

Sometimes the subject of an imperative sentence (you) is understood.

Example: Look in the closet. (You, look in the closet.)

What do you mean by the barriers of communication? Explain any two barriers of communication

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When you send a message, you intend to communicate meaning, but the message itself doesn’t contain meaning. The meaning exists in your mind and in the mind of your receiver. To understand one another, you and your receiver must share similar meanings for words, gestures, tone of voice, and other symbols.

1. Differences in perception:

The world constantly bombards us with information: sights, sounds, scents, and so on. Our minds organize this stream of sensation into a mental map that represents our perception or reality. In no case is the perception of a certain person the same as the world itself, and no two maps are identical. As you view the world, your mind absorbs your experiences in a unique and personal way. Because your perceptions are unique, the ideas you want to express differ from other people’s Even when two people have experienced the same event, their mental images of that event will not be identical. As senders, we choose the details that seem important and focus our attention on the most relevant and general, a process known as selective perception. As receivers, we try to fit new details into our existing pattern. If a detail doesn’t quite fit, we are inclined to distort the information rather than rearrange the pattern.

2. Language problems

When you choose the words for your message, you signal that you are a member of a particular culture or subculture and that you know the code. The nature of your code imposes its own barriers on your message. Barriers also exist because words can be interpreted in more than one way. Language is an arbitrary code that depends on shared definitions, but there’s a limit to how completely any of us share the same meaning for a given word. To overcome language barriers, use the most specific and accurate words possible. Always try to use words your audience will understand. Increase the accuracy of your messages by using language that describes rather than evaluates and by presenting observable facts, events, and circumstances.

How is GD conducted?

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A group of people are made to sit together in a room. There will be a person (sometimes two or three) co-ordinating the GD. After the topic is given, the candidates start discussing the topic amongst themselves. They stop the discussion when moderator asks them to stop. In some cases, you may be asked to write the summary of the GD. Hence, while taking chance to speak; you should, at the same time concentrate on what the others are saying, so that it is easy to write others’ point of views. Don’t be in a wrong impression that writing a summary means it is mandatory that you have to come to a conclusion by the end of the allotted time for GD. This is not so! Even if you are asked to come to a conclusion, it is not always possible. In such cases, the moderator will look for your approach to the problems and not your prescription in the form of consensus.

Seating arrangement:

The groups of candidates are made to sit in a circular/ semi-circular fashion or in a u shape or in rectangular “boardroom” seating arrangement. In most cases the group size ranges from 8 to 15 students per group. However, it may also vary to a bigger number of participants depending upon the institute/company, which is conducting the GD. In most cases, the moderator decides the seating arrangement. The participants are allotted a specific seat in the GD. It is very rare that the participants are allowed to select their preferred place. If the seating arrangement is circular, then there is no difference between any two positions. However, if it is a rectangular arrangement, then the best positions are the middle of the shorter side. This gives the advantage of the better noticeability by the other members of the group. The next best position is the centre of the longer side. Physical prominence makes it a little easier to get one’s way into the discussion. The position at the two ends of the longer sides is probably the least desirable. But if don’t have any choice, you should make the best of the situation. Concentrate on your participation rather than on the position of your seat. To make yourself visible to others, you may lean a little forward while speaking. If you are getting physically excluded from the group, push your chair a little forward. Alternatively, request your neighbors to pull their chair a little back.

Time: Normally 15 to 20 minutes is the time given to each group for discussing the topic. There may also be variations. It may be terminated much earlier or it can be extended to 30 minutes or more.

Moderator: The person who co-ordinates the GD is called the ‘moderator’. He is neutral person, either from the company / institute conducting the GD or a professional. The moderators are normally experienced persons, who have the ability to judge the performance of every member of the group -even if is a large one. His primary role is to evaluate the performance of every participant. He is the one who announces the topic and time of the GD. He also keeps track of the time and the way the GD progresses. Generally, he does not interfere during the GD. However, he may intervene at two situations.

i) When the group discusses the points that are not relevant to the given topic.

ii) When there is chaos and noise in the discussion.

In the first case, the moderator may interfere to bring the discussion back to the track and the second case, he may stop the GD temporarily till order settles in. The moderator also has the right to ask a participant to stop talking, when any member dominates the GD. In other word, the moderator is only a facilitator or an observer, who is present to help the smooth flowing of the GD and evaluate the participants during the process.

What are the purposes of conducting a Group discussion

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Group Discussion is forum where people sit together; discuss a topic with the common objective of finding a solution for a problem. The members are expected to arrive at a common consensus. While discussing, it is important that the intention of the members is to facilitate the exchange of views.

You should be aware that in GD, all the members of the group will participate and you have to listen to the views of the other members of the group. It is discussion and the speaker will be “interrupted” by the other members of the group while speaking. At this point, the speaker should modify what he says, based on the points that other members of the group make while the discussion is in progress. He has continually keep evaluating the situation. Also, each participation tries to “grab” the chance to speak or to focus the attention of the group on himself/herself.

You might wonder, “Why should I participate in GD? What is the purpose of GD? Well, Group discussion are arranged in order to measure certain traits of the participants, which are otherwise difficult to identify and time consuming to assess. It is common that a number of people who can communicate their ideas well and discuss effectively with others in a one-to-one situation become tongue-tied in a group situation. They will just not be able to present their ideas or discuss their ideas with the other members of the group. A group discussion will identify people who have such skills and people who do not. It is very necessary for potential candidates to have such group communication skills. The course work at most premier institutes requires group projects to be undertaken. A candidate without the ability to communicate the ideas effectively in a group situation will be a misfit in such and environment.

Further, when you are appointed at any level in an organization, you do not work in isolation of others. Decision making is done after discussing the relevant issues with others-be it superiors, peers or subordinates. In a number of such cases, you will need to interact with more than one person at the same time-very akin to GD type of situation. Unless you are equipped with some of the skills, which will be discussed in the course of this unit, you will not be able to do justice to your role in the organinsation. Hence, it is important to know the nuances of a GD.

What are listening skills? Enlist the types of listening skills

2008-01-16T05:07:00.003-08:00

Types of Listening

1. Discriminative listening:

As the name itself suggests, Discriminative listening is the most basic type of listening, whereby the difference between the sounds is identified. If you cannot hear difference, then you cannot grasp the meaning that is expressed by such difference.

We learn to find the difference between sounds within our own language early, and later are unable to discriminate between the phonemes of other languages. This is one reason why people belonging to one country find it difficult to speak the language of another nation, as they find the sounds similar, but cannot distinguish the subtle sounds that are required in that language.

Likewise, unless a person is attentive to the slight variation in the tone of the speaker’s voice, he is less likely to discern the emotions experienced by the speaker.

2. Comprehension listening:

When the discrimination between sounds is achieved, one should learn to make sense of the perceived sound. To comprehend the meaning, one requires a lexicon of words and all rules of grammar and syntax by which one can understand what others are saying.

The same is true with regard to the visual components of communication. An understanding of the body language helps us understand what the other person really means.

The communication, some words are more important and some are less and comprehension is often facilitated by the extraction of key facts and words from a verbose communication.

3. Evaluative listening:

Evaluative listening is also called ‘critical listening’ because we make judgments about what the other person is saying. We seek to assess the truth of what is being said. We also judge what they say about our values, assessing them as good or bad, worthy or unworthy. Evaluative listening is particularly relevant when the other person is trying to persuade us, perhaps to change our behavior or belief held by us.

4. Appreciative listening:

In appreciative listening, the main intention is to seek certain information which will be appreciated. For example, the information that helps meet our goals and needs are looked for. We use appreciative listening when we are listening to good music, poetry or may be even the stirring words of a great leader.

5. Empathetic listening:

When we listen empathetically, we seek to understand t the beliefs, moods emotions and goals of other people. This requires excellent discrimination and close attention to the nuances of emotional signals.

In order to make others exposes their deep emotions to us, we also need to demonstrate our empathy in our demeanor towards them, asking sensitively and in a way that encourages self-disclosure.

6. Therapeutic listening:

In therapeutic listening, the listener has a purpose of not only empathizing with speaker but also to use this deep connection in order to help the speaker understand, change or develop in some way.

This not only happens when you go to see a therapist but also in many social situations, where friends and family seek to both diagnose problems from listening and also to help the speaker find a remedy for those problems. This also happens in work situations, where Managers, HR people, trainers and Coaches seek to help employees learn and develop.

7. Dialogic listening:

The word ‘dialogue’ stems from the Greek words ‘dia’, meaning ‘through’ and ‘logos’ meaning ‘words’. Thus dialogic listening means learning thorough conversation. It is an engaged interchange of ideas and information in which we actively seek to learn more about the person and how they think. Dialogic listening is also known as ‘relational listening’ because with the help of exchange of ideas while listening, we also indirectly create a relation.

How can overhead projectors be used to enhance the quality of presentations

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Overhead projectors (OHP's) are used to project and enlarge an image contained on a transparent sheet onto a remote screen for easy viewing. Overhead projectors are old in the art but continue to enjoy widespread use in the fields of education and marketing. Overhead projectors have been popular as a means of projecting prepared transparencies or free-hand transparencies that are drawn in real-time, on to a display screen for viewing by a group of viewers. Overhead projectors enable a marking on a transparent film to be projected on a screen or wall by shining light through the transparent film. A speaker giving a presentation can write on the transparent film, and/or make additions or corrections to a preprinted image, while the film is on the overhead projector. The use and display of graphics and text in business presentations, lectures and the like often augments the effectiveness of the speaker and of the presentation. Transparencies, bearing graphics and/or text, are often exhibited to the viewers on a screen using an overhead projector. Transparencies allow the presenter to preview the presentation, easily sort through materials, point out specific features, and easily add additional comments or graphics. This allows the speaker a flexibility which would not be possible if transparencies or other audiovisual aids were used. Use of OHP's has recently expanded from the traditional projection of images printed on transparent films, to the projection of images which are stored in machine-readable form and which are presented by means of a light-transmissive liquid crystal display (LCD) panel which is laid on the stage of the OHP.

Here are three general types of overhead projectors: transmissive, reflective, and opaque. Transmissive overhead projectors are generally comprised of a base having a transparent stage area, a light source inside the base, a projection head mounted above the stage, and a condensing lens system located near the stage for directing the light towards the projector head. The base includes a light source and optical element designed to direct light from the source through a transparent stage defining the upper surface of the base and to the projection head. The post is pivotable between the illustrated upright projection position and a storage position wherein the post is rotated forward and down to engage a clip. Above the base is disposed a projection head having lenses and a mirror which function to gather light from the projector base and redirect it to the screen. The projection head is supported by a post extending upwardly from the base. It is necessary that the distance between the projection head and the base be adjustable so that the image projected on the screen may be brought into focus. A transparent film having translucent or opaque indicia may be placed on the stage and an image of the indicia projected onto a distant vertical surface by the projection head. In a transmission type of overhead projector, a stage is constituted by a Fresnel lens. The condensing lens system often takes the form of a Fresnel lens or a two-element Fresnel lens combination. Transmissive projectors have the light source below the stage and an overhead arm carrying a projection lens and a mirror. Light is focused and transmitted through the transparency on the stage toward the projection lens which is located by the arm over the stage and reflected by the mirror. The image of the transparency is thereby projected onto a large surface.

How should you communicate At the beginning of the interview

2008-01-16T05:06:00.001-08:00

An interview is a conversation between two or more people (the interviewer and the interviewee) where questions are asked by the interviewer to obtain information from the interviewee. Interviews can be divided into two rough types, interviews of assessment and interviews for information.

1. Make a Good First Impression:

The interview is your opportunity to market yourself and it is the reason you prepared and sent out all of those resume and cover letters. Once you get the interview, it is your job to create a good first impression by being prompt, being yourself, attending to your nonverbal behavior such as firm handshake and maintaining eye contact throughout the interview, and by taking the first few minutes to develop rapport with your interviewer. You will want to appear poised, yet comfortable and relaxed during the interview. A good first impression will set the stage for a successful interview.

2. Practice Good Nonverbal Communication:

It's about demonstrating confidence: standing straight, making eye contact and connecting with a good, firm handshake. That first impression can be a great beginning -- or quick ending -- to your interview.

b) At the closing of the interview.

From the candidate standpoint, there are six key elements of an effective interview close. These are:

Expression of interest
The value statement
Requesting feedback
Establishing the "path forward"
The "thank you"
The parting impression.

Expression of Interest

If you are interested in the job, tell them. Think about it for a moment. From the employer's standpoint, it is the end of the interview day. The candidate has spent hours with the firm, been interviewed by 12 people, had the job explained any number of ways and answered all his or her questions, explained the compensation policy, detailed the benefits coverage, discussed the performance evaluation system and it's the close of the interview, and the candidate seems non-committal.
There is no expression of interest in the position, so no one really knows one way or the other if the candidate is interested.

Enter Candidate Number Two:

Now this candidate is a real live wire. She has been full of questions all day long and seemed quite enthusiastic throughout a good deal of the interview. At the end of the day, she directly expresses interest in the position. Now who do you think will be offered the job? The second candidate, of course!

The Value Statement:

Following the statement of your interest in the position, you will want to add a value statement. This is simply a brief statement by you of one or two key ways the organization will benefit from bringing you about in the position.
Stating the confidence in your ability to make substantive contributions in key areas of concern to the employer is certainly going to heighten interest in your employment candidacy. The interview close presents the perfect opportunity to reinforce this impression by using an appropriate worded statement of value.

Asking for Feedback:

After an extensive amount of time of questions and give-and-take between both parties, it is certainly not unreasonable to ask for some preliminary feedback on the status of your candidacy. It may or may not be exactly what you want to hear, but nothing ventured, nothing gained. Even if the answer is negative, it still might be an advantage to be aware of this fact at this stage of the process. This provides you with one last chance to remove the remaining objection before you depart for the journey back home.

If a candidate is going to be rejected, nine out of ten cases it will be for one of two primary reasons:

Lack of technical proficiency in a given area
Lack of fit with the organization's structure

Be tuned-in to what the employer has to say about your candidacy, and note, in particular, the level or degree of interest in you. This will come in handy later when you are ready to discuss the particulars of your employment offer.

Establishing the "Path Forward":

It's a good idea during the interview close to request information concerning the next steps. When can you expect to hear from them? What does the employer see as the next steps and approximate timing?

Say "Thank You":

Courtesy can go a long way in enhancing your image as someone who is polite and considerate. It's utterly amazing to me how many employment candidates have spent a full day in interviews where a lot of valuable time and energy was expended on their behalf, yet they fail to express any appreciation for the employer's efforts. So, take the time to be gracious and thank your host for the interview.

Section 2

1. Prepare a memo for circulation to all employees of your organization announcing a change in the working hours and explaining the reasons for the change.

Cross-cultural research interests to me. Miller wrote that American parents

2008-01-16T05:04:00.000-08:00

Cross-cultural research interests to me. Miller wrote that American parents want their children to sleep on their own beds as soon as possible. It is important for babies learn to sleeping through night by herself. She said that Mayan mothers express the pity on American babies because she has to sleep alone. Japanese parents believe babies should sleeps with their parent too. Cultures who want children to developing independence wants children to sleep alone. Cultures who value interdependence likes babies to sleep with the parent. When mother nurse her baby, it is good for baby to sleep her mother. If baby wake up the night, mother can hold and nurse baby back sleep. Mother can fall asleep with baby too. Then mother is not so tired a next day. Learning about how cultures around world live fascinate to me.

Ans.

I have interest in Cross-cultural research. Miller writes that American parents want their children to sleep on their own beds, as early as possible. It is important for the babies to learn sleeping through night by themselves. She says that Mayan mothers express pity on American babies, because they have to sleep alone. Japanese parents believe that babies should sleep with their parents. Cultures which want children to develop independently, want their children to sleep alone. Cultures which value interdependence, like babies to sleep with their parents. When mother nurses her baby, it is good for the baby to sleep with her mother. If baby wakes up at night, mother can hold and nurse the baby back to sleep. Mother too, can fall asleep with the baby. Then mother is not so tired the next day. Learning about how cultures live around the world fascinates me.

What are the legal requirements which a company must comply with while borrowing?

2008-01-10T03:08:00.001-08:00

The Companies Act does not expressly empower companies to borrow money and, therefore, most of the companies expressly provide for such borrowing powers in the Memorandum. In such cases, where Memorandum authorises the company to borrow, the Articles provide as to how and by whom these powers shall be exercised. It may also fix up the maximum amount which can be borrowed by the company.

A public company cannot exercise its borrowing powers until it secures the certificate to commence business [Sec. 149 (1)]. A private company may, however, exercise the borrowing powers immediately after its incorporation.

The power to borrow money is generally exercised by the Directors but Articles normally provide for certain restrictions on their power to borrow, to the aggregate of the paid-up capital of the company and its free reserves. Section 293 also limits the power of the Board of Directors to borrow not beyond the aggregate of the paid-up capital and free reserves. It reads: “The Board of Directors of a public company, or a private company which is a subsidiary of a public company, shall not, except with the consent of such public company or subsidiary in general meeting borrow moneys where the moneys to be borrowed, together with the moneys already borrowed by the company (apart from temporary loans obtained from the company’s bankers in the ordinary course of business) will exceed the aggregate of paid-up capital of the company and its free reserves, that is to say, reserves not set apart for any specific purpose.”

Every trading company has an implied power to borrow (General Auction Estate Co. Vs. Smith) but it is wise to include an express power to borrow in the objects clause of the Memorandum. Non-trading companies, however, must be expressly authorised to borrow by their Memorandum.

A power to borrow whether express or implied includes the power to charge the

assets of the company by way of security to the lender.

Board of Directors

2008-01-07T04:50:00.000-08:00

The company wishes to increase the strength beyond (a) Advise ABC Ltd. the procedure to be followed for increasing the strength ofthe Board of Directors beyond 12.(b) What will be the procedure to be adopted in a private limited company whichis not a subsidiary of public limited company?(a) For theprovisionswith respecto increaseof thestrengthof theBoardbeyond12,pleaseseediscussiononSection259underanswerisequallyapplicabletoadeemedpubliccompany.Moreover,aspertheCompanies(Amendment)Act, 2000conceptof deemedpubliccompanyis nolongerrelevant.1. The proposal for increase in the strength of the Board should first be placedbefore the Board itself for its consideration. In case the Articles of Associationof the company already provide for a strength of the Board beyond 12 and theincrease contemplated falls within the strength permissible under the Articles,the company shallnot require:(a) alteration of the Articles, and(b) permission of the Central Government.In other cases, the Board should decide upon the date, time and place of anextraordinary general meeting for special resolution to be passed for amendingthe Articles.. The company secretary should be authorised to issue noticesand do all other requisite acts for the purpose.2. If the shares are listed on a stock exchange (s), an intimation with regard tothe proposed changes should be sent to it/them; copies of the resolution andArticles as amended shall alsO’be sent.3. The general body in its meeting should pass the special resolution subject tothe approval of the Central Government, where such approval is necessary.Another special resolution should be passed to amend the Articles, where theproposed strength exceeds the provision in the Articles.4. Within 30 days of passing the special resolution(s), a copy thereof should befiled
For getting the approval of the Central Government, where necessary, anDepartment application should be made to the of Company Affairs in FormNo. 24 of the Companies (Central Government’s) General Rules and Forms,1956. The Form should be accompanied with the following:(i) a copy of the Memorandum and Articles of Association;(ij) a copy of the resolution passed and the proceedings of the general meeting;(iii) a challan or demand draft evidencing the payment of the requisite fee; and(iv) a copy of the general notice (see step 6 below) together with a certificateof the company as to the due publication thereto.Before application to the Central Government, as aforesaid, is made, thecompany should give general notice in terms of Section 640 B of the CompaniesAct, to the members indicating the nature of the application proposedto be made. The notice must be published at least once in a newspaper in theprincipal language of the district in which the registered office of the companyis situated and circulating in that district and at least once in an Englishnewspaper circulating in that district.Forward copies of the general notice to the stock exchange as per the listingagreement.Forward a copy of the application made to the Central Government alongwiththe enclosures thereto to. the Registrar of Companies [Rule 20 A of theCompanies (Central Government’s) General Rules and Forms, 1956].directors. Thus, the increase in the strength of the Board can be effected by merely passing an ordinary resolution, provided the total number’ does not go beyond the maximum permissible under the Articles. However, where the increase is beyond Articles, special resolution must first be passed and Articles amended.Rest of the procedure (except relating to obtaining permission from the Central Government and provisions related thereto) remains the same as noted above.State the legal position where:The Articles of Association of a company provided for minimum share qualification. Mr. Xwho was appointed as a Director of the company, failed to obtain qualification shares within the specified time limit..9lns. Please see under answer to
X Co. Ltd. wants to make a contract with a partnership. Four 6i the five directors of the company are partners of such partnership. How can the contract be executed?The given problem relates to a situation whre a director is interested in a contract. An interested director must not vote on any contract or arrangement in which he is interested. Moreover, interested director is not counted towards quorum:J!1 the present case, since 4 out of 5 directors are interested directors, unless ArtiCles ‘permit otherwise (i.e., Articles may even allow interested directors to attend and vote), valiq meetinof the Board cannot tak p...!!ceJ:egardiug the contracl!n-9uestion being 1 /3rd ofthe total strength of the Board or 2 directors, whichever is it should be noted th_at there is to enter iEto a £ontract in which direc1oror direttors are rested. Section 299 of the Cornparues Act only requires the interest to be disclosed. Thus/ in the present case, the Board of Directors having been rendered incompetent, the contract can be executed by the general body ofshareholders by passing an ordinary resolution to that effect
MIs XYZLtd., with a paid-up capital of Rs. 5 crores, has nine directors on its Board and as per its Article, the quorum for a Board meeting is 3 (three). A meeting of the Board was called to consider a contract relatlog to purchase of raw materials from another company ABC (P) Ltd., in which A and B, the Directors of XYZLtd., are also major shareholders. In the Board meeting (If xYz Ltd. three Directors including‘A’ and ‘B’ attended. The matter was discussed ‘and the three Directors voted for the contract. ABQ (P) Ltd. wants to enforce the cQntract. Will it succeed? Would it make any difference if ABC Ltd., is a public company? Discuss. ,..9lns. The problem relates to interested directors. In this case, A and B are interested directors and accordingly must disclose their interest as per Section 299. .Further, interested director under Section 300 is forbidden to take part in the discussion or vote on any contract or arrangement entered into by or on behalf of the company where he is directly or indirectly interested in it.Still further, interested director is not to be counted for quorum and the quorum for a Board’s meeting is, as per Articles, fixed at minimum 3 directors [Section 287]. resolution However, Section 287 provides that if at any time, the number of interested directors exceeds or is equal to 2/3rd of the total strength, the remaining directors, that is to say, the number of directors who are not interested, present at the meeting, being not less than two, shall be the quorum. In the given case such a dis-interested director being only one, meeting is not valid.Thus, in the instant case, the ABC (P) Ltd., cannot enforce the contract. ABC (P) Ltd. were a public company, then also the situation would have unchanged because The arrectors A and B are its major shareholders. Exemption of Section 300 (2) (d) is not available.in such a case.P. 17. State with reference to the provisions of the Companies Act, 1956 whether the following companies can make donations to political parties and if so the conditionsto be complied with in this regard:

Director of XYZ Machineries

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(i) ABC Forgings Private Limited where ‘X’, a director of XYZ Machineries
Limited, is interested as a director and member.
(ii)DEF Casting Limited, where ‘Y’, a director of XYZ Machineries Limited, is
interested as a member holding 25 per cent of the paid-up share capital.
State briefly the legal requirements to be complied with under the Companies Act
to give effect to the above proposals. Will the age’ementscontinue to be valid after the
paid-up share capital of XYZMac’N..neriL,.td.jS’inCreased to Rs.4 crores in December
1995 by further issue of shares?
(i)Under Section 297, it will require a resolution of the Board of Directors to be
passed at its meeting.
Besides, approval of the Central Government is required where the paid-up share
capital of the company is Rs. 1crore or more. But, applicability of the Section is to
be determinedat the timeof enteringinto the contract.Ifno pennission under this
section is required at the time of entering into the contract, subsequent pennission
is not necessary even though there may be a change of circumstances which would
require pennission to be taken for a fresh contract.
Thus, it appears that, where contract was entered into by the company when
its paid-up capital was less than Rs.1crore, and raised upwards subsequently
[Rs. 4 crores in the given case], approval of the Central Government would
not be necessary until the expiry of the contract.
Also, under Section 299, ‘X’ must disclose his interest to the Board and not
participate in the said meeting/ deliberations. .
(ii) Section 297 does not cover cases of public limited companies. Thus, the
aforesaid approvals shall not be necessary.
State the legal position in the following circumstances:
The Articles of Association of a company provide for minimum share qualification.
Mr X, who was appointed as a director of the company, failed to obtain qualification
shares within the specified time limit.
Following effects shall follow:
1. He shall be liable to fine up to.Rs. 500 for every day until he stops acting as
such
2He shall be liable to a further penalty under Section 283 (2A) up to Rs. 5,000
for each day he functions as a director. It appears that the penal provisions of
Sections 272 and 283 (2A) will cumulatively apply.
3.He automatically vacates the officeunder Section 283 (1) (a).
Board of Directors of Colourful Textiles Ltd. having a’1effective capital of Rs. 4
crores propose to appoint one of its Directors, Mr. Shyam, as managing director for 5
years with effect from 1st December 1996 on a consolidated monthly salary of Rs.
40,000 per month. Mr. Shyam is already the managing director of Unique Yam Ltd.
receiving a consolidated salary of Rs. 35,000 per month. The effective capital of Unique
Yam Ltd. is Rs. 2 crores. What are the legal requirements to be complied with by
Colourful Textiles Ltd. to give effect to the proposed appointment? Will your answer
be different if Unique Yam Ltd. is a private company? fC.A. (Final)Nov., 1996J
Schedule XIII allows a company to pay its managing director up to 5% of its
net profits for a financial year. Monetary ceilings have been removed except for
loss-making companies or companies with inadequate profits. Presently’, in case a
person is managing director in more than one company, he may draw remuneration
from both or from anyone of them provided that the total remuneration drawn from
the companies does not exceed the higher maximum limit admissible from anyone of
the companies of which he is a managerial person.
Thus, assuming that the two companies in question do not have adequate profits,
the managing director, Mr. Shyam, cannot receive more than Rs. 1,00,000p.m:’ as
salary from both the companies, taken together. Accordingly, no approval of the
Central Government shall be required to be obtained.
Again, please note that the approval of the Central Government shall not be
necessary for his appointment as per conditions of Schedule XIII,since Mr. Shyam is
the managing director of only one other company will not bedifferentevenif Unique Yarn Ltd is a private companysincethe wtntment issoughtto bemadein apubliccompany.ScheduleXIII shall, Your company has received a notice from a shareholder holding shares,
paid-up value of which is Rs. 60,000 which is equal to 5per cent of the voting power
of the company, proposing himself for appointment as a Director of the company in
place of a retiring director. How would you, as the company secretary, deal with the
matter? Pleaseseeunder answer to
undertheheading-“ Appoinmentof Directorsother
thanthoseretiring”.
Mr. X who was apP9inted as a Director at the last annual general meeting
resigned. The Board filled up the casual vacancy by appointing Mr. Y. But within a few
days of his becoming Director, Ydied. The Board wishes to fill up the casual vacancy
by appointing Mr. Zin place of Mr. Yin the next Board meeting.
State the legal position.
Section 262provides that in the case of a public company or a private company
which is a subsidiary of a public company, if the office of any director appointedby the
companyingeneralmeetingis vacated before the expiry of his term of officein the normal
course, the resulting casual vacancy may, subject to any regulations in the Articles of the
company, be filled by the Board of Directors at a meeting of the Board.
It would thus be noted that Board of Directors is empowered to fill a casual
vacancy only in respect of a director appointed by the company in general meeting. If
a casual vacancy arises in the office of a director appointed in the casual vacancy under
Section 262, there is no casual vacancy within the meaning of Section 262 and cannot
be filled up by the Board of Directors. Consequently, Board should not be empowered
to appoint Mr. Z in place of Mr. Y. However, the Deptartment of Company Affairs has
opined that the vacancy may be filled by the Board as a casual vacancy. Certain
commentary writers do not subscribe to this view and suggest that vacancy should be
filled not as a casual vacancy but by appointing the person as an additional director
so that he ceases to hold office by the next AGM.
who was appointed as an additional director of a public limited company
for the first time, filed his consent with the company by way of a letter. He also signed
his consent in Form No. 29 and gave it to the company for filing with the Registrar of
Companies. Due to inadvertence the aforesaid consent was not filed within the
prescribed period of one month. What will be the state of X as director?
Section 264 which deals with filing of consent by a director has two parts. Under
the first part covered under sub-section
(I) it is provided that every person proposed to
be a candidate for the office of a director of a public company shall sign and file with the
company, his consent in writing to act as a director, if appointed.
In the given situation, this requirement has been duly complied with.The second part covered under sub-sec.
(2) requires that a person shall not act asa director of the company unless he has within 30 days of his a.E£2intplent signed and filed with theRegistrarhis consent in writing to act as such Anadditionl direct is exempted to filesuch consent in case of his appointment as a director or re-appointment as additional director. But, in the given case appointment being for the first time, n’on-filing of the consent within 30 days shall result in non-compliance of Section 264 (2).However,failure to file the consent with the Registrar, in the opinion of the Department of
Company Affairs, shall not result in the vacation of the office as director. The only
consequence shall be that penalty under Section 629-1):would become attracted. Such
consent may be filed after the e2Rir of 30 days on payment of additional fee as
contemplated under Section 611 ABC Ltd. is a deemed pu lic company. The present strength of the Board of Directors of ABC Ltd

Articles of Association

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Accordingly, the resolution as aforesaid shall be required to be passed.
'A’ was appointed as Managing Director for life by the Articles of Association of a
private company incorporated on 1st June, 1970. The Articlesalso empowered X’to appoint
a successor. X’ appointed, by will,’G to succeed him after his death. Answer the following:
(i)Can ‘G succeed ‘X’ as Managing Director after the death of ‘X?
(ii)Is it possible for the company in general meeting to remove ‘X’ from his office
of directorship during his lifetime? [CA. (Final) Nov., 1995J
5lns.
(i)‘G’ can succeed ‘X’. Appointing a successor under a power conferred under
the Articles is not considered as ‘assignment of office’ which is prohibited
under Section312 [OrientalMetal Pressingvs. BhaskerKashinathThakoor[1961]
31Comp. Cas. 143 (SC)].
‘(j)’)In case of private companies only, directors appointed for life up to 1st April, 1952 V cannot be removed.
Any other director can be removed under Section 284, i.e.,by passing an ordinary
resolution of which special notice had been given.
(i) In Parween Woodcraft Co. Ltd., Mr. James was named in the list of first
directors. He, however, died before he could assume office. How can the problem
reg. g the appointment of a director be solved in this case?
(ii)case of appointment of directors of a company, all the directors were not
vote on individually, but were appointed by one resolution and no shareholder
objected to it. Discuss the position under the provision of the Companies Act.
(i) The vacancy in question is not a casual vacancy under Section 262 and
cannot, therefore, be filled by the Board of Directors. Accordingly, it will be necessary
for the subscribers to the Memorandum (who will then be only members) to convene
a meeting for the appointment of the director. To the extent to which the Articles do
not make any other provision in this behalf subscribers who would be entitled to
requisition a meeting may call the meeting. A meeting is not necessary if all the
subscribers concur in the appointment.
(i’i)Section 263 stipulates that in the case of a public company or a private company
which is a subsidiary of a public company a motion shall not be made for the
. appointment of two or more persons as director of the company by a single resolution
unless a resolution that it shall be so made has been first agreed to at the meeting
without any vote being given against it [Section 263(1)]. A resolution which is in
contravention of Section 263 (1) shall be void, whether or not objection was taken at
the time of its being so moved [Section 263 (2)]. Hence the appointment of directors
will be void. But, this does not exclude operation of Section 290 which validates acts
where defects are afterwards discovered.XYZMachineries Ltd. having a paid-up share capital of Rs. 80 lakhs proposes
to enter into contract with the following parties for the supply of certain components for a period of five years with effect from 1st January, 1995

Legal requirements

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Legal requirements to be complied with by a public company
to give effect to the following proposals:
(i)Payment of Rs. 50,000 as minimum remuneration to the ordinary directors in
a financial year when the company has suffered a loss. The directors have
been receiving remuneration by way of cmmission on net profits’within the
prescribed limits.
(ii)Payment of minimum remuneration to a whole-time director in a financial year
when the company has suffered a loss. The appointment has been made in
accordance with the conditions specified in Schedule XIII to the Companies
Act and he is being remunerated by way of commission on net profits.
(iii)Appointment of a person as Managing Director without remuneration in
accordance with the conditions specified in Schedule XIII to the Companies
Act, when he is already holding position of Managing Director in a Private
Company. [C.A. (Final) May, 1995]
lemuneration by way of commission can be paid to an ordinary director only
with the sanction of a special resollllion .Fresh special resolution is required t be passed afterevery five years
The concept of minimum remuneration, however, has no relevance with
reference to ordinary””airectors.
Depending upon the effective capital of the company, a wholetime director can be paid @Rs. 75,000 p.m. to Rs. 2,00,000 p.m. as per Schedule XIII (w.e.f. .
2. 3. 2000). It is immaterial as to whether the ?mount is paid by way of salary ., or commISSIon.
Section 31d along with Schedule XIII, provides that no public compapy and no private company which is a subsidiary of a public company shall
appoint or employ any person as managing director, it he is either the
managing director or the manager of any other company including a private
company which is not a subsidiary of a public company except by passing a
resolution at a meeting of the Board with the consent of all the directors
present at the meeting and of which meeting, and of the resolutions to be
moved thereat, specific notice had been given to all the directors then in India.

The Board of Directors of a publiccompany

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The Board of Directors of a publiccompany in the private sector having made
an average profitof Rs. 1 crore during the last three financialyears propose to donate
during the current year the followingamounts:
(i) Rs. 1,00,000 to a school run exclusivelyforthe benefit of employees,
(ii) Rs.40,000to a generalcharitablefund,and
(iii) Rs.4,00,000to a politicalparty.
Advise the Board of Directors about their powers in respect of the above explaining
the relevant provisions of the Companies Act. fC.A. (Final) May, 1995J
There are some restrictions on the powers of the Board in the matter of
donations. The Board of Directors of a public company, shall not, except with the
consent of the company in general meeting contribute to charitable and other funds
not directly relating to the business of the company or the welfare of its employees,
any amounts the aggregate of which will, in any financial year, exceed Rs. 50,000,or
5 per cent of its average net profits as determined in accordance with the provisions
of Sections 349 and 350 during the three financial years immediately preceding,
whichever is greater [Section293(1) (e)].
. The contribution referjQj.D..the bove clause relates to charitable and other
IV’ funds which do not directly relate to the business of the company or the
welfare of the employees. The power of the Board as regards contribution to
funds which directly relate to the business of the company or the welfare of
its employees is unrestricted. Hence, the Board of Directors of the company.
in the given case is competent to donate Rs. 1,00,000 to a school run exclusively
the benefit of employe amount of donation being less than Rs. 50,000, the same shall be in order
and not require the approval of the shareholders
(iv)According to Section 293A of the Companies Act, 1956, only a company which
is not a government company and which has been in existence for not less
than three financial years can contribute to a political party or for a political
purpose. The aggregate of the amounts in any financial year should, however,
not exceed five per cent of its average net profits for the last three financial
years. Accordingly, the company15emgTn the private sector and having been
in existence for more than three years, the Board of Directors can contribute
Rs. 4 lakhs (being less than 5% of Rs. 1 crore). However, the name of the
political party and the amount contributed must be disclosed in the profit and
loss account of the company.
Also, please note that the resolution for the purpose must be passed at a meetingof the Board and not by circulation

External Role as Co-ordinator

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External Role as Co-ordinator
(a) Relating to the Shareholders. For maintaining cordial relations with the shareholders, the company secretary has to maintain proper link or liaison between the Board and the shareholders. Under the Companies Act, shareholders have the right to receive share certificates, notices of meetings, dividend warrants, etc. in time, to inspect books and registers of the company and have extracts of registers on payment of prescribed fees. The secretary must ensure that these rights of shareholders are honoured in time and the extracts of registers demanded by shareholders are supplied to him within the statutory periods.
The secretary should ensure that all letters and complaints from shareholders are
promptly dealt with and their queries are answered without violating the statutory
provisions. He should be polite and courteous while dealing with shareholders.
(b) Relating to the Government. The company secretary has a very important role vis-a-vis the Government. The secretary has to ensure that the provisions of the Companies Act and other laws of the country are complied with strictly. He must see to it that the company is implementing the policies of the Government in their true spirit. He should advise the Board about the changing policies of the Government. While sending information and reports to the Government, the secretary should make
sure that they are factually correct and are in accordance with the law.
(c) Relating to the Society. It has been well recognised that a company has some responsibility towards the society .We find that leading companies are making important contribution in providing more employment opportunities, imparting technical education, establishing schools, colleges and hospitals. The secretary should advise the Board regarding the areas where the company can make useful contribution.
Companies supplying goods and services should be more careful in discharging their
social responsibility by supplying goods and services at reasonable rates.
PRACTICAL PROBLEMS
1. The Board of Directors of Mis ABC Motors Ltd. made the following appointments
at its meeting held on 1st January, 1994:
(i) Mr.X, a Director of its subsidiary company, namely, Mis ABCForgings Ltd., was appointed as Purchase Manager on a consolidated salary of Rs. 11,000
per month witheffect from 1st January, 1994.
(ii) Mr. Ywas appointedas theSalesManageronaconsolidatedsalaryofRs. 11,000 per monthwitheffectfrom1st January, 1994.Answerthe followingexplainingthe
relevant provisions of the Companies Act: .
Pouny Ltd. is a public company which was being mismanaged due to which rtain parties applied to the CLBfor relief.The Central Government, pursuant to a recommendation by the CLB,by its order under Section 408, appointed Mr.Pureesh (an lAS, Officer)as a director of the company for a period of four years. The said Mr. Pureesh is a member of a joint Hindufamilyis which Mr.Paresh who is a director of the company is also a member.
Mr.Ramesh another directoron the Company’s Boardchallenges the action ofthe
Central Government on the ground that the consent of the company by a special
resolution was not obtained before appointing Mr.Pureesh (as he is a relative of Mr.
Paresh) and, therefore, the government nominee should forthwithvacate his officeand
refund the remuneration received tilldate. Examinethe provisions of law applicable to
the facts of the case, and give a well-deliberatedanswer.
this case, the appointment of Pureesh was made by the Central Government,
purse recommendation of the CLB, under Section 408 of the Act; more so,
because he was a Government servant, an IAS officer, not because of his relationship
with any other director on the Board of the company.
Section 314, deals with appointment of a person who is a relative of certain persons
(such as directors of a company) to an office or place of profit in the company. There
is no doubt that Paresh and Pureesh are relatives under section 6 of the Act. But, ‘office
or place of profit’, in relation to a director, means that he is appointed to an office or
place whictl entitles hj!!1J:a..hi!!! as a dus, holding oroffice oTaGirector in itself cannot be said to
constitutean ‘office or place of profit’. Moreover, Section 314(4) enacts that “nothing
contained in this section shall apply to a person, who being the holder of any office of
profit in the company is appointed by the Central Government, under Section 408, as
a director ofthe company”.
Therefore, Ramesh’s challenge of the appointment of Pureesh, would fail.
There is thus no question of Pureesh vacating his office and/or refunding his
remuneration, given the above legal position. The action of the Central Govern-
.. ment is valid, and the challenge of Ramesh is not maintainable in law. However,
the appointment under Section 408 can be made for not more than thg: years at one time. Thus, th apointment of Mr. Pureesh shall be valid for tree years
and not for four years.

Internal Role as a Co-ordinator

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Internal Role as a Co-ordinator
(a)Relating to the Board, Chairman and Managing Director. The secretary is
responsible for convening the meetings of the Board and shareholders. He has to keep
the Board informed about the activities of the company and the progress made in
different areas. He has to inform them about the various legal obligations imposed on
them and keep them informed with the latest changes and developments taking place
in the corporate world. He is to guide the Board of Directors. He helps the Board in
taking various decisions. That is why it is said that “while the directors are the brain
of the company, the secretary is its ears, eyes and hands.”
The secretary is responsible for communicating the decisions of the Board to
different executives and the outsiders. The secretary is not vested with managerial
powers, he has to work under the managing or whole-time director. He has to act as
a connecting link between the officials and in the process to maintain utmost secrecy.
The secretary is to see that work of the company is carried on according to the
provisions of the law and that various returns, reports, etc. are sent in time. The
secretary is responsible for collecting the information from different operating units
and communicate the same to the top management. In this way the secretary helps the
management in taking right policy decisions.
(b)Relating to the Employees. The company secretary plays an important role as a
coordinator of the personnel policy of the company. Though for employing persons,
there may be a separate personnel department, but even then the secretary has to
advise the top management on manpower planning and formulation of recruitment
policy and seeing that the good labour relations are maintained. Whenever an
agreement is made with the trade union, the secretary should make a proper note
of the same so that there may not be any misunderstanding or dispute later on. The
secretary must see to it that the provisions of different labour welfare laws are
strictly complied with. The secretary has an important action, he must ensure that
the legal formalities and procedures are followed. The secretary must make every
possible effort to maintain cordial relations with the employees, it is then only that
objectives of the company could be achieved. The creative activities of employees
should be encouraged and wherever possible grants and subsidy from the company
should be given.
(c)Relating to the Auditors. Every company is required to get its accounts
audited by a qualified auditor and submit the annual audited accounts before
thegeneralbodyofshareholdersa ttheannualgeneralmeeting.Apartfromsta tu tory
audit, auditor’s certificates are also required under various other laws. The secretary
has, therefore, to co-ordinate with the auditors. The company secretary has to ensure
that the appointment of auditors is made in accordance with the requirements of the
Companies Act. The secretary has to see that all books and documents, resolutions,
etc. required by auditors for and its work are made available to them in time.

Secretary as a Co-ordinator

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Secretary as a Co-ordinator
The secretary holds a high administrative position in the company. The Board of
Directors of a company are responsible for managing the affairs of the company and
they lay down the broad policies to be followed by the company. It is the duty of the
secretary to ensure that the policies and decisions of the Board are effectively implemented.
In this connection, it should be noted that a secretary cannot be regarded as
equal to a manager performing managerial functions. He has to co-ordinate the work
of executives at different levels. The secretary is an important link between the Board
and other executives. He can be said to be the “mouthpiece of i’1L Board”. The
company secretary plays the role of a coordinator not only within me company, but
also with the outsiders such as shareholders, society and different Government departments.
The secretary’s role as a co-ordinator has two aspects-internal and external.
His role as an internal coordinator consists of his activities between the Board,
managing director and the chairman on the one hand and other line and staff executives,
trade unions and auditors of the company on the other. His role as an external
coordinator relates to the relationship of the company with shareholders, Government
and society.

Administrative Officer

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Administrative Officer
As a general administrative officer, he is responsible for efficient administration of the
company. The secretary has to ensure that the policies of the company are duly carried
out. He has to, at times, supervise, control and co-ordinate the functioning of different

departments such as finance, personnel. The best possible results can be achieved by
having a sound organisational structure. The company secretary is in such a position
that he can have an overall view of different aspects of company administration and
can develop a strong and efficient organisational structure.
The company secretary has to play an important role in financial administration.
He is to analyse the financial statements and recommend suitable steps. Though in
large-sized companies, the financial part is looked after by a financial expert, the
secretary is to assist the Board in laying down the policies and dealing with the
Government and financial institutions. The secretary has also an important role to play
in the personnel administration of the company. He can render valuable advice to the
Board regarding the recruitment, training, remuneration, promotion, retirement, discharge,
discipline of the staff.
The company secretary has to ensure the safety and proper maintenance of the
assets and properties of the company. He has to ensure that they are not misused. He
has to see that the property and other records are properly insured against loss by fire
and other risks. The company secretary has to ensure that the records are maintained
properly. With the fast changes taking place, a company secretary is expected to play
a still more important role in the administration of the company.
Explain the term ‘secretary’ and elucidate his role as a co-ordinator.
The Companies (Amendment) Act, 1988 has defined the term ‘secretary’ in
“Secretary means a company secretary within the meaning of clause © of subsection
(1) of Section 2 of the Company Secretaries Act, 1980, and includes any other
individual possessing the prescribed qualifications and. appinted to perform the
duties which may be performed by a secretary under this Act and any other ministerial
or administrative duties.”
This definition has brought the definition of ‘secretary’ in line with the definition
of ‘company secretary’ contained in the Company Secretaries Act, 1980. Act defines a company secretary as a person who
is a member of the Institute of Company Secretaries of India.
As per Section 383-A of the Companies Act, every company having a paid-up
share capital of Rs. 2 crores or more (w.e.f. 11.6.2002) must appoint a whole-time
secretary. The Companies (Amendment) Act, 1988 has added a new sub-section (I-A)
to Section 383-A providing penal provisions for non-compliance of statutory requirement
of appointment of a whole-time secretary.
Now, a company secretary plays an important role in the company administration.
He plays a three-fold role-as a statutory officer, as a co-ordinator and .as an
administrative officer.

Balance Sheet and Profit and Loss Account

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Balance Sheet and Profit and Loss Account
The secretary is responsible for holding meetings of directors and shareholders.
He has to be present at all suc.h meetings and is required to make proper minutes of
the proceedings. According to Section 5 of the Companies Act, he is regarded as an
officer in default and he shall be held liable for any non-compliance of any provisions
of the Act.
As a statutory officer, the company secretary is also responsible to comply with
the provisions of other Acts, such as Income-tax Act, M.R.T.P. Act, F.E.M.A, Indian
Stamp Act, Sales Tax Act, various labour laws like Factories Act, Minimum Wages Act,
Payment of Wages Act, Industrial Di.sputes Act, etc.
As a Corporate Manager
A company secretary, besides being a statutory officer under the Companies Act and
other statutes, is also recognised as a corporate manager. He has to play the role of a
co-ordinator between the Board of Directors and other executives of the company as
well as act as a general administrative officer.
As Co-ordinator
A company secretary is the link between the Board of Directors and other executives
of the company. The Board lays down the policy decisions, but it is the secretary who
ensures their proper implementation. In the process, the company secretary plays the
role of a co-ordinator or a link between the Board and other executives, as well as
between the executives at different levels. In a company where there are several
independent departments such as sales, purchases, personnel, etc., he acts as a co-ordinator
with these functionaries for ensuring that the policy decisions are duly carried
out and if there are some matters which require further consideration or modification,
the secretary shall place them before the Board and convey the decision of the Board
to the concerned department.
The company secretary also acts as a co-ordinator between the company on the one
hand, and outsiders like the shareholders, customers, trade unions, Government and the
community at large on the other. He has to deal with the shareholders and has to comply
with various provisions in this regard; for example, issue of share certificates, notices of
meetings, inspection of books and registers of the company within the time prescribed by
law. He has to correspond with shareholders and to answer all their queries and complaints.
It is now widely accepted that the company has some responsibility towards the
society as well. The secretary can advise the Board regarding the matters where the
company can contribute to the welfare of the society.

What are the rights of a company secretary?

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What are the rights of a company secretary?
Rights are given to the secretary by the Companies Act, Board of Directors and the
general meetings of shareholders. He also derives some rights out of his service agreement
with the company. A secretary has the following rights :
(i) He has the right to control and super,vise the working of his department.
(ii) As a principal officer of the company, he has the right to sign a document or
proceeding requiring authentication by the company.
(iii) He has a right to be indemnified by the company for any loss suffered by him
whil.e discharging his duties.
(iv)As an employee of the company, he has the right to receive remuneration. In
the event of winding-up of the company, he has a right to be treated as a
preferential..creditor for his salary, subject to a maximum of Rs. 1,000.
But a company secretary has no right to borrow money in the name of the company
or to make allotment of shares or register transfer of shares without the express
authority or consent of the Board of Directors. He has no authority to convene a
meeting of the company, or to remove a name from the register of members, or to take
policy decisions.
Explain the role of a company secretary in the functioning of a company.
OR
Discuss the role of a ‘Company Secretary’ as a statutory officer and as a corporate
manager.
The company secretary plays an important role in company administration.
From the position of a clerk, he has risen to the level of an officer of the company. The
scope of his role depends on the size and nature of the company. He is liable not only
to the company, but also to its shareholders, creditors, employees, consumers, society
and government.
Generally speaking, the company secretary plays a three-fold role-as a statutory
officer, as a co-ordinator and as an administrative officer.
As Statutory Officer
As a principal officer of the company, the company secretary is responsible for strict
compliance with the various provisions of the Companies Act and the requirements
of other Acts. HE!has a very important role to play from the incorporation stage to the
winding up of the company. The secretary is required to make statutory declaration
of compliance at the time of incorporation and commencement of business. He is
responsible for proper maintenance of books of accounts and other registers. He hasto sign several documents such as annual returns, return of allotment, etc

Contractual Liabilities

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Contractual Liabilities
A company secretary enters into a service contract with the company and accordingly he has several contractual liabilities which arise out of his service agreement. These may be as follows:
(i) The secretary derives his powers from the Board, therefore, he should carry
out the orders given to him.
(ii) He should work for the company and should never allow his personal interest
to clash with the interest of the company.
(iii) He shall be liable to account for the secret profit made by him by virtue of his
position as a secretary.
(iv) He shall be personally liable if he acts beyond his authority.
(v) He shall be liable for any loss or damages caused to the company by wilful
misconduct or negligence in the discharge of his duties.
(vi) He shall be liable to indemnify the company for any loss suffered by the
company as a result of disclosure of some secret information relating to the
company.
(vii)He shall be liable for any fraud or wrong committed in course of his employment.
However, if the secretary performs his duties diligently and honestly, he shall not
be liable. The secretary shall also not be liable for’any fraud by his assistants unless he
is a party to such fraud.

Statutory Liabilities

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Statutory Liabilities
The Companies Act has recognised the secretary as a principal officer of the company, and as such various liabilities have been imposed upon him. As per Section 5 of the Act, a secretary has been included in the list of 1/ officers in default” and is made liable to heavy penalties for any default or non-compliance of the provisions of the Act. The company secretary is responsible for conducting the affairs of the company in accordance with the provisions of the Companies Act. He is also responsible to comply with the requirements of other laws of the country. Thus, the company secretary may be held liable for various acts of omission or commission in the management of the company.
The company secretary may be held liable for the following matters under Companies Act:
(i) Default in Filing Returns as to Allotment. If a default is made in filing returns as to allotment of shares within the prescribed time, he shall be punishable with fine which may extend to five thousand rupees for every day during which the default continues
(ii) Default in the Preparation of Share Certificates, Etc. Share certificates and debenture certificates should be ready for delivery within three months after allotment and within two months after the application for registration of transfer; otherwise, a fine up to Rs. 5,000 for every day of default may be imposed
(iii) Default Regarding Register of Members. Failure to maintain register and index of members and debentureholders as required under the Act shall make him liable for a fine up to Rs 500 (iv) Default in Making Entries on the Issue of Share Warrants. When share warrants are issued in respect of fully paid shares, necessary entries should be made in the register of members. If a default is made, he shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues
(v) Default in Registration of Charges on Properties Acquired Subject to Charge. When a company acquires any property which is subject to a charge of any kind, the necessary particulars of the charge should be filed with the Registrar, failing which a fine up to Rs. 5000 may be imposed
(vi) Default in the Filing of Particulars Regarding Charges. If a default is made in filing with the Registrar the particulars of any charge created by the company, he shall be punishable with fine which may extend to Rs. 5000 for every day during which the default continues
(vii) Default Regarding the Publication of Name of Company. If a default is made in getting the name and address of the registered office of the company painted or affixed outside every office or place of business, a fine up to Rs. 500 for every day of default can be imposed. If a default is made in engraving the name of the company in legible characters on its seal and on all its business letters, bill heads, etc., a fine up to Rs. 5000 may be
(viii) Default in Filing of Annual Returns. If a default is made in filing the annual returns as per the provisions of Sections. 150, 160 and 161, he shall be liable for a fine which may extend to Rs. 500 for every day of default
(ix) Default in the Holding of the Statutory Meeting. If a default is made in holding the statutory meeting, he shall be liable to a fine which may extend to Rs.
(x) Default in Holding Annual General Meeting. Default in holding the annual general meeting in accordance with the provisions of Sections. 166 and 167, shall make him liable for a fine which may extend to Rs. 50,000 and in the case of continuing default, with a further fine up to Rs. 2500 for every day during which the default
(xi) Default in Circulation of Members’ Resolutions. If a default is made in circulating members’ resolution of which they have given notice to the company, he shall be
puishable with fine which may extend to Rs. 50,000
(xii)Default in Registering Certain Resolutions and Agreements. This default shall be punishable with fine which may extend to Rs. 200 for every day during which the default (xiii) Default in Recording the Minutes of the Meetings. If a default is made in recording the minutes of all proceedings of every general meeting and meetings of the Board, a fine up to Rs. 500 may be imposed
(xiv)Default in Maintaining Minutes Book or Allowing Inspection or Furnishing Copies of Minutes to Members. If a default is made in furnishing a copy of the minutes within seven days after the date of request by any member or if inspection is not allowed, a fine up to Rs. 5,000 may be imposed
(xv)Failure to Give Notice of Board’s Meeting. The notice must be given in writing to every director for the time being in India and at his usual address in India to every other director, otherwise a fine up to Rs. 1000 may be imposed
(xvi)Failure to Maintain the Register of Directors. If a default is made in maintaining the register of directors, he shall be liable to be punished with fine, which may extend to Rs. 500 for every day during which the default continues
(xvii)Failure to Maintain the Register of Directors’ Shareholdings. For this default a fine up to Rs. 50,000 may be imposed
(xviii)Failure to Maintain Register of Inter-corporate Loans and Investments. For this default a fine up to Rs. 5,000 plus a further fine up to Rs. 500 per day of default may be imposed In addition to the above-mentioned liabilities under the Companies Act, a company secretary is responsible for deducting income tax from the salaries of the staff and from dividends or interest and depositing the same in Government treasury under Income-tax Act.
Under the Indian Stamp Act, a secretary is responsible to ensure that documents like share certificates, share warrants, debenture certificates, transfer forms, etc. are properly stamped as per the provisions of Indian Stamp Act.
In case the company is a manufacturing concern the secretary shall also be responsible for complying with the requirements of the various labour laws such as Employees’ State Insurance Act, Factories Act, Minimum Wages Act, Payment of Wages Act, Industrial Disputes Act, etc. The company secretary is also responsible to fulfil the duties cast upon him under the Foreign Exchange Management Act (F.E.M.A.) and the Monopolies and Restrictive Trade Practices (M.R.T.P.) Act.

Duties under Income Tax Act

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Duties under Income Tax Act
The company secretary has been considered to be a “principal officer” under the
Income-Tax Act and he is required to discharge the following duties:
(i) To ensure that income-tax is deducted at source from the salaries paid to employees, or from dividend or interest paid or payable to shareholders and debentureholders.
(ii) To ensure that a certificate in the prescribed form is issued for deduction of
tax at source.
(iii) To ensure that the tax so deducted has been deposited in the Bank or the
Government treasury in time.
Under the Indian Stamp Act, it is his duty to see that every legal document, share certificate, share warrants, transfer forms, debenture certificates, etc. are affixed with stamps of requisite amount as required under the Act. Under the Sales Tax Act, the secretary has to ensure the timely submission of returns and payment of tax.
The company secretary is also required to perform various duties under M.R.T.P. Act, F.E.M.A., and if the company carries on manufacturing business, then the company secretary has to see that various provisions of different labour laws are also complied with.
Discuss the statutory and contractual liability of a company secretary.
The liability of company secretary may be discussed under two broad heads:
(a) Statutory liabilities, and (b) Contractual liabilities.

What are the statutory duties of a company secretary?

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What are the statutory duties of a company secretary?
A secretary is to perform duties which are required to be performed by him under the Companies Act. Besides he can also perform other administrative and ministerial duties which are entrusted to him. The actual duties to be performed by a company secretary vary with the type of business, the size of company and his status in the administrative set-up. The company secretary is required to comply with the various requirements of the Companies Act such as filing the documents and returns, maintaining the statutory books, etc.
In a small-sized company, the secretary attends to all routine duties including
maintaining accounts. But in a very big company having crores of rupees of share
capital, the routine work like accounting, correspondence, etc., is entrusted to different departments and the secretary is required only to co-ordinate the working of various departments. Sometimes, the Board of Directors may assign some managerial duties to the secretary. The secretary has even been placed as a director on the Board by some companies. It is in this context the statement that the “post of the secretary is wht the company and the individual make of it” seems very true. In modem times, :’1 large-sized companies, the secretary occupies a pivotal position in the administration of the company.
Nowa company secretary is not considered as a mere clerk but is an important officer along with directors, etc. As per Section 5 of the Companies Act, a company secretary is now included as “an officer in default” along with other managerial personnel, and he shall be liable for not complying with the requirements of the Act.
Statutory Duties
As the principal officer of the company the company secretary is responsible for complying with the various provisions of the Companies Act and other laws of the country. Some of the important statutory duties of a company secretary under the Companies Act are as follows:
(i) To verify and sign any document or proceedings requiring authentication by
the company
(ii) To deliver for registration returns of allotment and contracts relating to
allotment of shares for consideration other than cash
(iii) To give notice to the Registrar for increase of share capital
(iv) To deliver the share certificates within three months of allotment or within two months of registration of transfer
(v) To make entries in the register of members on issue of share warrants
(vi) To make available trust deed for inspection to every member or debenture
holder ‘on their request within seven days of rquest and on payment of prescribed
(vii) To deliver for registration to the Registrar particulars of mortgages and charges
(viii) To get painted or affixed the name or name plate of the company outside
every office or the place of its business, to get it printed on documents of the
company and to get it engraved on the seal of the company
(ix) To make the statutory declaration for obtaining the certificate of commencement of business
(x) To sign the annual return and certify the documents annexed thereto
(xi) To make available forinspection and furnish copies of the register of members
(xii) To send notices of general meetings to members as well as of Board.meetings to
(xiii) To file resolutions and agreements requiring registration with the Registrar
(xiv) To record the minutes of the proceedings of every general meeting and of
every meeting of the Board of Directors within thirty days of the conclusion of every such meeting
(xv) To make available for inspection the minutes book of general meetings
(xvi) To make available for inspection the register of directors
(xvii) To maintain statutory books like register of investments held by the company
in the name of its nominee register of charges, register of members , index of members , register of cOntracts in which directors are interested , register of directors, manager and secretary
, and register of directors’ shareholdings .

Link between the company and the outside world

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The secretary acts as a link between the company and the outside world.
The ostensible authority of the company secretary to bind the company by his acts arises from the company’s relationship with the outside world. If the company represents to
outsiders that the secretary has the necessary authority to enter into contracts on behalf of the company, then the company shall be liable to third parties who have acted on such representations

The third parties can hold the company liable for such contracts provided it can be provided that
(i) a representation was made to outsiders that the company secretary had the authority to enter into such a contract;
(il) the representation was made by a person having actual authority to do so;
(iil) the outsider was actually induced to make the contract and he relied upon it;
(iv) the contract was within the powers of the company; and
(v) such powers were validly delegated to the secretary.
Even though a company secretary enjoys a unique position in the management hierarchy, it cannot be assumed that he has managerial powers. Actually, the secretary has no role in the formulation of policies, which is the function of the Board. He cannot be regarded as equal to a manager performing managerial functions. There is a distinct difference in the sphere of these functions. That is why, a company secretary is not included among ‘managerial personnel’ within the meaning of Section 197-A of the Companies Act and his remuneration is not taken into account for the purpose of calculating overall managerial remuneration under Section 198 of the Act.
However, as an agent of the company, managerial powers can be delegated to the secretary by the company and/ or the Board of Directors. There is nothing in the Act to prevent the Board to delegate him wider powers. But without such delegation, the secretary has no authority to exercise managerial powers. He cannot bind the company unless he has been expressly authorised with such powers.
The company secretary cannot exercise the following powers unless he has been
properly authorised:
(i) to allot shares or to register a transfer of shares;
(ii) to convene a meeting of the company;
(iii) to borrow money on behalf of the company;
(iv) to acknowledge a debt in any suit against the company; and
(v) to make an application to Company Law Board forrelief in cases of oppression
and mismanagement.
In conclusion, it can be said that a company secretary has no authority to make any representations or to enter into contracts on behalf of the company without express authority from the company or the Board. He shall be personally liable to third parties for representations for which he has no proper authority.
“The post of the secretary is what the company and the individual make of it.” Explain and discuss the statutory duties of a company secretary.

How can a Company Secretary be dismissed?

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How can a Company Secretary be dismissed?
A secretary may be removed from his office by a resolution of the Board of Directors. A secretary is an employee of the company, the general rules of employment of the company will also be applicable to him. He can be removed by giving the due notice in writing or compensation in lieu thereof. Even where the appointment of a secretary is for a fixed period, the company can dismiss him before the said period by giving due notice.
A secretary can, however, be dismissed without giving him a notice in the following cases:
(a) for wilful disobedience;
(b) for misconduct or moral turpitude;
(c) for negligence;
(d) for incompetence or permanent disability.
In the event of compulsory winding up of the company, the order of the court shall serve as a notice of discharge of officers and employees of the company, i.e., the secretary will also be automatically dismissed.
When the appointment of a secretary is terminated, necessary particulars in duplicate in
should be filed with the Registrar of Companies within thirty days of termination. Necessary changes should also be made in the Register of Directors, Managing Director, Secretary, etc.
The term ‘officer’ as defined in the Companies Act, 1956, includes secretary, as it does any director or manager. State the ostensible authority of a company. secretary to bind the company by his act and also give at least three examples where
he has no such authority.
According to Section of the Companies Act, 1956, the term “officer” includes any director, manager or secretary. This clearly shows that just like directors or a manager in a company, a secretary is also recognized as an officer of the company. Though, in the eyes of law, the secretary is a mere officer of the coir. any, in actual practice, he commands considerable influence with the directors. Plays an important role and enjoys a unique position in the management of the company.
The position of the secretary
changed considerably during the last thirty years. In Barnett Hoares & Co. vs. The South London Tramways Co. Ltd. (1887), “a secretary was termed as a mere servant; his position is that he is to do what he is told, and no person can assume that he has any authority to represent anything at all.” Therefore, the secretary had no original authority, he had to work under the full control of the Board of Directors. He had no authority to negotiate contracts or make representations. In Panorama Developments [Guildford Ltd. vs. Fidelis Furnishing Fabrics Ltd. (1971)J, it was observed by Lord Denning that” a company secretary is a much more important person nowadays than he was in 1887. He is an officer of the company with extensive duties and responsibilities. He is no longer a mere clerk. He regularly makes representations on behalf of the company, and enters into contracts on its behalf.” Mr. Justice Salmon also observed in this case that the secretary has “ostensible authority to sign contracts on behalf of the company”.
Now the company secretary has been bracketed with the managerial personne including directors, managing director and manager. He is recognised as a responsible officer of the c.ompany under Rule (2) (b) of the Company Rules. He is also responsible for observing and complying with the requirements of various other Acts such as M.R.T.P. Act, F.E.M.A., Income Tax Act, etc.
It is because of the important position of the company secretary, the Companies Act has specifically provided that companies having a paid-up share capital of Rs. 50 lakhs or more must appoint a whole-time secretary who should be a member of the Institute of Company Secretaries of India. Even for smaller companies the secretary must possess the prescribed qualifications.
It is true that the secretary has to carry out the instructions of the Board, but for routine day-to-day affairs, the secretary is responsible and he has the authority to carry out the work. As an agent of the company, the secretary has to carry out the policy decisions of the Board. The secretary should not appoint a sub-agent to do the company’s work without proper authority. If he delegates his powers in an unauthorised manner, the secretary shall be personally liable for the consequences.

The secretary is appointed by a formal resolution of the Board.

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The pro-tern secretary must, immediately after the incorporation, secure his position by getting a resolution passed at the first Board meeting. This resolution appointing a person as the secretary of the company should contain the terms and conditions of his appointment.
The secretary is appointed by a formal resolution of the Board. If a director is interested in the appointment of the secretary, he must disclose such interest and should not participate in the discussion or voting.
If a director of the company or his relative is to be appointed as the secretary, a special
resolution should be passed at the general meeting for such an appointment.
In accordance with Section 303 (1) of the Act, the appointment of a person as secretary must be recorded in the Register of Directors, Managing Director, Manager, Secretary, etc. .
The particulars of such appointment should be filed in duplicate in form No. 32
with the Registrar within thirty days of the appointment.
The specimen form of resolution for appointment of secretary is as follows:
RESOLVED THAT: Shri who possesses the requisite qualifications under the
Companies (Appointment and Qualification of Secretary) Rules, 1988, be, and is hereby, appointed secretary of the company on the terms and conditions set out in the draft agreement, a copy of which is initialed by the Chairman for the purpose of identification and placed before the meeting for approval, with effect from ......
RESOLVED FURTHER: That the aforesaid agreement with Shri regarding his
appointment as secretary is hereby approved and the agreement will receive the seal.
of the company in the presence of Shri and Shri , directors of the company, who
will sign the same on behalf of the company.

How is the Secretary of a company appointed

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Every company having a paid-up share capital of Rs. 2 crores or more must have a whole-time secretary. Only individuals can be appointed as

secretary and no individual can hold the office of a secretary in more than one company: Though it is not compulsory for companies having a paid-up

share capital of less than Rs. 2 crores to have a whole-time secretary, yet because of the complexities of the various laws, it

is desirable to appoint a secretary. .

The promoters of the company generally appoint the first secretary who helps them in fulfilling the various formalities. He is known as pro-tern secretary.

The pro-tern secretary appointed by the promoters mayor may not be appointed as regular secretary by the Board. Even when the name of the first

secretary is mentioned in the Articles, it does not bind the company to appoint that very person as its secretary, because Articles bin9 the company to its

members only and it does not constitute an agreement between the company and the outsiders. Therefore, if the pro-tern secretary is not appointed as

the first secretary by the Board after incorporation

The statutory qualifications of a company secretary are not enough

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(i) Sound General Education. A secretary must have a sound general education of reasonably high standard. A university degree is necessary.

(ii) Proficiency in Language. Secretary’s job requires a lot of correspondence, writing reports, etc. Therefore, he must have command over the specialized

business language. It would be better if he has a :working knowledge of one or more foreign language.

(iii) Wide Knowledge. He must have a wide general knowledge; only then he can render advice to directors. He must be well conversant with the particular

industry or trade in which the company is engaged.

(iv) Knowledge of Company Law. He must have a thorough knowledge of company law. He must know the rules for convening various meetings. His know

ledge must be up-to-date.

(v) Knowledge of Other Laws. Besides company law, a secretary should also have the knowledge of other laws such as Contract Act, Sale of Goods Act,

Negotiable Instruments Act and various lbour laws.

(vi) Knowledge of Office Organization and Methods. A secretary should have sound practical knowledge of the methods of filing, use of office equipment

and machinery and other labor-saving devices.

(vii) Knowledge of Economics, Banking and Finance. A secretary must have the basic knowledge of economics, law and practice of banking, working of

money and capital markets, foreign exchange regulations, etc.

(viii) Good Personality. A secretary has to deal with the staff members, shareholders, traders and outsiders. By his personality and good behaviour, he can

win them over and inspire confidence in them. He should be industrious and patient.

Companies having a Paid-up Share Capital of Rs. 2 crores or more

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In case of companies having a paid-up share capital of Rs. 2 crores or more, the whole-time secretary must be a member of the Institute of Company

Secretaries of India. However, where the Board of Directors of any such company comprises only two Directors, neither of them shall be the secretary of

the company [Section 383-A).

In case of Other Companies

In case of companies having a paid-up share capital of less than Rs. 2 crores, the secretary must possess one or more of the following qualifications:

(i) Membership of the Institute of Company Secretaries of India;

(ii) Pass in the Intermediate Examination conducted by the Institute of Company Secretaries of India;

(iii) Post-graduate degree in commerce or corporate secretary ship granted by any university in India;

(iv) Degree in law granted by any university;

(v) Membership of the Institute of Chartered Accountants of India;

(vi) Membership of the Institute of Cost & Works Accountants of India;

(vii) Post-graduate degree or diploma in management. sciences granted by any univer

sity or the Institute of Management, Ahmedabad, Kolkata, Bangalore or Lucknow;

(viii) Diploma in Corporate Laws and Management granted by the Indian Law Institute, New Delhi;

(ix) Post-diploma in Company Secretary ship granted by the Institute of Commercial Practice, Delhi;

(x) Membership of the Association of Secretaries and Managers, Kolkata;

(xi) Post-graduate diploma in Company Law and Secretarial Practice granted by the University of Udaipur.

The secretary is also recognized as the principal authority for complying with the requirements of other statutes

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such as the Income Tax Act, Stamp Act,

Sales Tax Act, Foreign Exchange Management Act, MRTP Act, etc. Thus, it can be said that though

the secretary has to perform ministerial and administrative functions as’laid down in the Act, but in fact he is the chief executive who has to act as a

coordinator between the Board of Directors, Managing Director and Chairman on the one hand and the executives and the staff, auditors and employees

of the company on the other.

Thus, in the changed circumstances the position of company secretary has undergone a great change and in times to come we can foresee further

changes in his role.

State the qualifications which a company secretary must possess.

.9lns. A company secretary must possess the qualifications prescribed in the Companies (Appointment and Qualifications of Secretary) Rules, 1988.

For this purpose the companies have been divided into two categories, i.e., those having a paid-up share capital of Rs. 2 crores or more’ and those having

a paid-up share capital of less than Rs. 2 crores.

With the growing industrialization and enactment of various economic laws

2008-01-03T04:20:00.002-08:00

, the work of company administration has become very complex and difficult.

The position of secretary has changed drastically during the last three decades. Section 2(45) of the Companies Act, 1956 originally provided that the

secretary is an individual appointed to perform the duties which may be performed by a secretary under the Act and any other purely ministerial or

administrative duties. The Companies (Amendment) Act of 1974 brought about some important changes and one change was that the word “purely” has

been deleted. This meant that the secretary’s work was not purely ministerial or administrative, but he was also expected to perform some managerial

functions. The company secretary is now required to sign the balance sheet of the company, his name is required to be filed with the Registrar of

Companies along with the names of managerial personnel. The secretary is recognized as a responsible officer of the company for signing and filing

various forms and returns and for maintaining statutory books and registers.

Section 383-A requires that every company¥ having a paid-up share capital of prescribed amount, presently Rs. 2crores or more ,multipoint whole-time

secretary. Further sub-section (I-A) to Section 383-A provides that if a company fails to appoint a whole-time secretary as per the provisions of this

Section, it shall be punishable with fine. According to Section 5, a secretary is to be treated as an ‘officer in default’ and is liable to penalties for

non-compliance of any legal provisions of the Act.

Without express authority, a secretary cannot exercise the following powers

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(a) He cannot make any representation or enter into any contract on behalf of the

company [Barnett Hoares & Co. vs. The South London Tramways Co. Ltd.]. (b) He cannot borrow money in the name of the company [Re. Cleadon Trust

Ltd.]. © He cannot call a meeting of the company [Re. Haycraft Gold Reduction and

Mining Co. Ltd.].

(d) He cannot register transfer of shares without the Board’s authority [Chida

Mines Ltd. vs. Anderson].

(e) He cannot acknowledge a debt in any suit against the company [Lakshmi

Rattan Cotton Mills Ltd. vs. Aluminium Corpn. of India Ltd.].

(ft He has no independent authority to bind the company by contract [Houghton

& Co. vs. Nothard, Lowe & Wills Ltd.].

In 1902 also his duties were described as “of a limited and of a somewhat humble character” [George White Church Ltd. vs. Cavanagh].

The status of a company secretary has changed a great deal now. He is now the chief administrative officer of a company. Section 2(30) of the

Companies Act also provides that an “officer” includes ‘secretary’ also. The courts have also recognised the improvement in the status of the secretary.

In the year 1971, a significant departure was made when Lord Denning observed in Panorama Development (Guildford) Ltd. vs. Furnishing Fabrics Ltd.

“ But times have changed. A company secretary is a much more important

person now-a-days than he was in 1887. He is an officer of the company with extensive duties and responsibilities. This appears not only in the modem

Companies Acts but also by the role which he plays in the day-to-day business of companies. He is no longer a mere clerk. He regularly makes

representations on behalf of the company and enters into contracts on its behalf which come within the day-to-day running of the company’s business. So

much so that he may be regarded as having authority to do such things on behalf of the company.”

The status of secretary in the Indian corporate scene has undergone significant change during the last three decades

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It is absolutely true to say that the status of company secretary has undergone a significant change during the last three decades. He plays an

important role in the administrative set-up of a company. Besides performing routine duties, he is now entrusted with many executive powers of

management and administration.

The Companies Act recognizes the secretary as a ‘principal officer’ of the company, and as such he has to ensure that all legal requirements are duly

complied with, failing which he will be treated as an ‘officer in default’. The corporate activities have also undergone wide-ranging changes, the company

secretary has various statutory obligations. Therefore, it was found necessary by the Government to have a professionally qualified person to act as

secretary who can discharge the various duties properly.

In 1887 in the course of his judgment in Barnett Hoarse & Co. vs. The South London Tramways Co. Ltd., Lord Escher observed that “a secretary is a

mere servant, he is required to do what he is told to do, and no person can assume that he has any authority to represent anything at all; nor can anyone

assume that statements made by him are necessarily to be accepted as trustworthy without further inquiry.”

According to his opinion, the secretary was a mere servant or an employee of the company, he has to work under the control of the Board of Directors. He

can neither participate in the management of the company’s affairs, nor can he enter into a contract or make representations so as to bind the company.

In brief, the functions of a company secretary can be described as follows

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(i) to assist the Board in formulating policy decisions;

(ii) to make a proper record of proceedings of all the meetings of the company;

(iii) to act as a liaison officer;

(iv) to conduct the affairs of the company in accordance with the provisions of the

Companies Act and other relevant laws; and

(v) to act as chief executive or administrative officer of the company.

In modem times, the functions to be performed by a company secretary are very wide

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The company secretary is required to perform such functions and duties which are specifically assigned to him. He is there to implement the decisions of

the Board and to execute the policy decisions. He has to act as a conduit pipe between the Board on the one hand and the staff, shareholders, customers

and the general public on the other. In this sense it has to act as an agent of the Board of Directors.

The position occupied by the company secretary in the administrative set-up of a company requires him to not only merely supervise the routine office

work, but being the chief executive of the company he has to act as a coordinator. He has to coordinate the activities of different departments. In case

there is some problem in implementing a policy decision, he must bring it before the Board for re-consideration and suitable modifications. In many

companies, either directly or through his assistants, he has to perform the function of maintaining good industrial relations and has to deal with trade

unions as well.

A company secretary has to be present at all meetings of the company, and of the Board. He is required to make proper minutes of the proceedings and

maintain a proper record for future reference. When he is required by the Board, he must send notices to members and others as required by law.

That is why, the remuneration of the secretary is not taken into account for the purposes of calculating overall managerial

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In actual practice, a’ secretary is not simply a servant or agent or mouthpiece of directors, but something more than that. He plays an important role and

enjoys a unique position in the management of the company, though he has no role in the formulation of policies, which is the function of the Board. Since

the secretary is in possession of complete information about all internal and confidential matters relating to the company, he is in a better position to

advise the directors. He is closely associated with directors and enjoys confidence.

A secretary acts as a link between the directors and the staff and outsiders. The decisions taken by the Board are communicated to the staff and

outsiders through the secretary. In this sense he acts as a ‘Public Relations Officer.’ If the secretary enjoys the full confidence of the Board, he may be

entrusted with important executive powers. In such a situation, his position becomes second only to that of the directors.

From the above it becomes clear that a secretary is an important officer of the company who is responsible for executing the policies of the company and

providing the necessary information to the Board in the framing of policies.

Denning described the position of the secretary as under

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Times have changed, a company secretary is a much more important person now-a-days than he was in 1887. HS is an officer of the company with

extensive duties and responsibilities. This appears not only in modem Companies Act but also by the role which he plays in the day-to-day business of the

companies. He is no longer a mere clerk. He regularly makes representations on behalf of the company and enters into contracts on its behalf which

come within the day-to-day running of the company’s business. So much so that he may be regarded as held out as having authority to do such things on

behalf of the company.”

With the growing industrialisation and enactment of various economic laws such

as Companies Act, Foreign Exchange Management Act, Monopolies and Restrictive Trade Practices Act, etc., the work of company administration has

become very complex and difficult. The company secretary can no longer be treated as a mere clerk-his position has changed drastically. The Companies

Act has provided that the duties of a company secretary are ministerial or administrative in nature. Where the secretary is entrusted with the general

managerial power extending to the management of the whole of the affairs of the company, he will be treated as ‘manager’ or if he is also director, the

‘managing director’ or ‘whole-time director’ of the company for the purposes of the Act, though designated as secretary.

The secretary is recognized as a responsible officer of the company for sign.ing and filing various forms and returns and for maintaining statutory books

and registers. If he fails to comply with the statutory obligations as a principal officer of the company, he is liable to penalties for the default. A secretary has

also to comply With the requirements of the Income-Tax Act, Stamp Act, Sales Tax Act and Factories Act.

According to this viewpoint, the secretary is regarded only as a subordinate officer

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and, therefore, has no managerial functions. He is appointed by the Board of Directors

and, therefore, has no original authority. He derives his powers from the Board. He

has no power to negotiate contracts on behalf of the company [Barnett Hoares & Co. vs.

The South London Tramways Co. Ltd]. He has no power to borrow money in the name of

the company. He has no power to make policy decisions, nor, in the absence of a special

authorization, he has the power to acknowledge a debt or other liability [Lakshmi Rattan

Cotton Mills Co. Ltd. vs. Aluminum Corporation of India Ltd. 1967].

A secretary cannot register transfer of shares without the Board’s authority [Chide

Mines Ltd. vs. Anderson]. He cannot make allotment of shares unless authorized by the

Board. He has no authority to strike a name off the Register of Members without the

Board’s authority [Re Indo-China Steam Navigation Co. Ltd. (1917)]. He cannot even convene a general meeting of members [Re, State of Wyoming

Syndicate (1901)]. He has

no authority to make any representations on behalf of the company. If he fraudulently

induces persons to take shares in the company, the company will not be liable in a suit

filed by such persons for damages or rescission of the contract on the ground of such

misrepresentation [Diwan Chand vs. Gujranwala Sugar Mills (1937)].

The legal position of a secretary has undergone a big change during the last century.

In Panorama Development (Guildford) Ltd. vs. Fidelis Furnishing Fabrics Ltd. (1971), Lord

Describe the provisions contained in the Companies Act, 1956 regarding appointment of a secretary

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Section 383-A (1) of the Companies Act, 1956 provides that every company having such paid-up capital as may be prescribed (presently, Rs. 50

lakhs) shall have a whole-time secretary, and where the Board of Directors of any such company comprises only two directors, neither of them shall be

the secretary of the company. Thus, for smaller companies having paid-up share capital of less than Rs. 50 lakhs, the appointment of a whole-time

secretary is not compulsory.

It is also necessary that the person to be appointed as a whole-time secretary must possess the qualifications laid down in the Companies (Appointment

and Qualifications of Secretary) Rules, 1988. It should also be noted that an individual can hold the office of a whole-time secretary only in one company.

The Companies Amendment Act, 1988 incorporated a new sub-section (I-A) in Section 383-A which provides that if a company fails to appoint a

whole-time secretary, the company and every officer of the company, who is in default, shall be punishable with fine which may extend to Rs. 50 for every

day during which the default continues.

It is further provided that in any proceedings against a person in respect of an offence under this sub-section, it shall be a defence to prove that all

reasonable efforts to comply with the provisions of the Act were taken or that the financial position of the company was such that it was beyond its

capacity to engage a whole-time secretary.

Discuss the legal position of company secretary and state his main functions.

Legal Position of Company Secretary

The Companies Act has not defined the exact legal position of a company secretary; therefore, we have to depend on the observations made by judges in

different cases. In 1887 in Barnett Hoares & Co. vs. The South London Tramways Co. Ltd., Lord Esher stated that “a secretary is a mere servant; his

position is that he is to do what he is told, and

no person can assume that he has any authority to represent anything li all; nor can

anyone assume that statements made by him are necessarily to be accepted as

trustworthy without further inquiry.”

What do you mean Dy ‘Company Secretary’ under the Company Secretaries Act, 1980

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According to Section 2(1) of the Company Secretaries Act, 1980, “a Company Secretary is a person who is a member of the Institute of

Company Secretaries of India”. Section 383-A of the Companies Act provides that every company ‘having such paid-up share capital as may be

prescribed’ must appoint a whole-time secretary. The ceiling of paid-up share capital for compulsory appointment of whole-time secretary has been made

flexible. At present this ceiling is Rs. 50 lakhs. Thus, for a company having a paid-up share capital of Rs. 50 lakhs or more, only a member of the Institute

of Company Secretaries of India can be appointed as a whole-time secretary.

Define the term ‘Company Secretary’.

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Explain the term ‘secretary’ under the Companies Act, 1956. Is it necessary for every company to have a secretary?

.9lns. Section 2(45) of the Companies (Amendment) Act, 1988 defines a ‘secretary’ as follows:

“Secretary means a Company Secretary within the meaning of clause © of sub-section (1) of Section 2 of the Company Secretaries Act, 1980 and

includes any other individual possessing the prescribed qualifications and appointed to perform the duties which may be performed by a secretary under

this Act and any other ministerial or administrative duties.”

The Company Secretaries Act, 1980 defines a company secretary as “a person who is a member of the Institute of Company Secretaries of India”

[Section 2(1) ©]. With the amendment made in 1988 in the Companies Act, a statutory recognition has now been given to the members of the Institute of

Company Secretaries of India.

From the present definition of a company secretary, the following three points

emerge:

(i) An individual alone can be appointed as a secretary of a company. Thus, a firm or

a body corporate cannot be appointed as a company secretary.

(ii) The company secretary should possess the qualifications prescribed by the Central Government from time to time. The Central Government, under the

Company Secretary (Qualifications) Rules, 1975, has laid down that a person to be qualified as a Secretary should possess the membership of the

Institute of Company Secretaries of India.

(iii) The company secretary performs the functions which are of a ministerial or

administrative nature.

The secretary has no executive or managerial powers, he has to work under the full control of the Board of Directors. He derives his powers from the

Board. However, limited managerial powers may be delegated by the Board.

Section 383-A of the. Companies Act (as amended i11 2000) provides that every company,

having such paid- up share capital as may be prescribed [presently Rs. 50 lakhs] shall have a whole-time secretary, and where the Board of Directors of

any such company comprises of only two directors, neither of them shall be secretary of the company. Other companies, whether public or private,

whose paid-up share capital is less than the amount so prescribed, need not appoint a whole-time secrry.

Resolution for Compensation for Loss of Office

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Whereas ‘Mr. N’ was employed for a period of three years as the Managing Director of the

company from 19 and whereas the company wanted to dispense with the services

of the said Managing Director, and whereas the company has duly served notice to the said

Managing Director in terms of clause of the agreement between the company and the

said ‘Mr. N’ governing his terms and conditions as the Managing Director of the company,

in terms of clause of the agreement between the company and said ‘Mr. N’. Now,

therefore, it is hereby resolved that an amount of Rs. be paid to ‘Mr. N’ as compensation

for the loss ofhis office as the Managing Director of the company.”

“Resolved that ‘Mr. X’ be and is hereby appointed as alternate director to ‘Mr Y’ during his absence from India and that he shall vacate such office when the

original director

Board of Directors’ resolution for compensation for loss of office; and (c) Appointment of alternate Director

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(a) Resolution for Appointment as Managing Director

“Resolved that subject to the approval of the Central Government pursuant to subsection (4) of Section 316, ‘Mr. A,’ who is already the Managing Director

ofM/s ABC Ltd., be and is hereby appointed as a Managing Director of the company for a period of 5 years commencing from 1^st June, 1992 with the

consent of all the directors present at the meeting of which meeting and the resolution to be moved thereat specific notice was given to all the directors

then in India, on the terms and conditions contained in the draft agreement tabled before the meeting and initialled by the chairman for purposes of

identification and ‘Shri M’, the secretary of the company, be and is hereby authorised to apply to the Central Government for seeking their approval.

“Resolved further that ‘Shri L’, director, and ‘Shri M’, the Secretary of the company, be and are hereby authorised to execute the said agreement subject

to such modifications/alterations made by the Central Government while giving their approval and to affix the common seal of the company thereon.”

Compensation for Loss of Office

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Section 284 (7) of the Companies Act, 1956 provides that a person removed under this Section is entitled to claim compensation or damages payable to

him in respect of termination of his appointment 3S director or of any appointment which terminates along with his directorship.

Under Section 318 of the Act, compensation for loss of office can be paid by the company to a managing director, or a wholetime director or a director

who is a manager of the company. Compensation for loss of office is not payable to any other director. Accordingly, B shall be entitled to claim

compensation for loss of office only, if:

(i) he were acting as Managing Director or holding the office of Manager or was in the wholetime employment of the company; and

(ii) his services had been terminated.

In the given case, the facts only indicate that he has been relieved of most of his

executive powers as a director. On the basis of the above, it is doubtful if he shall be entitled to any compensation for loss of office.

Cardinal Principle of Corporate Management

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The cardinal principle of corporate management is the rule by the majority shareholders. A resolution of majority shareholders passed at a duly convened

and constituted meeting is binding on the other members. This rule “Was laid down in Foss vs. Harbottle (1843). The exceptions to the rule recognised

over a period of time include:

(i) where decision relates to matters ultra vires the company;

(ii) where the act complained of constitutes fraud over the minority;

(iii) where the action is illegal; and

(iv) where a special resolution was required by the Articles and an ordinary resolution was passed by the company.

In the given problm, B has been stripped off most of his executive powers. The relevant issue is that B’ s executive powers could have been conferred

upon him either through the Articles of Association or through Agreement of Service.

Where B derives his powers through Articles, the same cannot be withdrawn by

an ordinary resolution since amendment of ArtiCles require special resolution.

On the other hand, if his powers are derived from Service Agreement, B may have

an action for breach of contract if the resolution conflicts with the terms of the contract.

Since the facts of the given problem lack necessary details as to the source of B’s executive powers, it may not be possible to suggest the exact best

remedies available to B.

Deficiencies generally observed in respect of the applications for payment of higher

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(i) Application fee is not paid in proper manner. Sometimes the Demand Draft is not for the full amount of application fee and sometimes the demand draft

is not payable in favour of Pay & Accounts Officer, Department of Company Affairs, New Delhi as prescribed in rule 2 of the Companies (Fees for

Application) Rules, 1961 as amended vide GSR No. 501 (E) dated 6.7.1999.

(ii) Application is not filled in properly and completely in respect of all columns. If a column is left blank, the letters N.A. should be filled up implying ‘Not

Applicable’ .

(iii) Applications are submitted after remuneration in excess of Schedule XIII has already been paid to the managerial person.

(iv) Certified copies of Newspaper clipping of notices, in original, published in the

Newspaper in English and in local Newspaper in local language as required

in terms of Section 640B of the Companies Act are not furnished.

(v) Certified copies of directors report and audited accounts of the company for each of the last 5 financial years of the company are not enclosed.

(vi) In case of foreign collaboration, certified copy of the PIPB approvalletter(s) is not furnished.

(vii) Remuneration drawn by the proposed appointee from the applicant company or from any other company during the past 3 years prior to the proposed date of appointment is not indicated in terms of monetary package.

(viii) Requirements of section 316 (2)/(4) of the Companies Act are not followed where the proposal is for appointment as managerial person in two or

more than two companies and resolution is not passed by all the companies concerned.

(ix) Estimated project cost and source of finance together with projected equity, position regarding growth in effective capital, projection of turnover and net

profit as computed under section 198 of the Companies Act, 1956 for the next five years is not given as required in col. 4 of the application (Forms 25A

and 26) in respect of new companies.

(x) Figure of turnover, net profit as computed under section 198 of the Companies Act, 1956, as projected/unaudited for the year in which the application is

made, is not given even if the application is made towards the end of Financial year / after the end of Financial Year, unaudited figures of working results

\ire not furnished.

(xi) In case of proposal for mid-term increase for remaining period, it is not indicated how the requirement of Section 269(2) of the Companies Act, 1956

read with part I and II of Schedule XIII was met at the time of appointment of MD/WTD/Manager and how the mid-term increase in remuneration is justified

in terms of working results of the company.

The application for increase in the remuneration should not be submitted in a mechanical way

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(i) Reasons for loss/inadequacy of profit.

(ii) Steps taken to improve the performance of the company.

(iii) Financial health/ performance of the company as may be reflected by effective

capital, net worth, turnover, profit/loss, dividend declared, etc.

(iv) Nature of industry-high technology area, core sector, infrastructure field, etc.

(v) Export performance and net foreign exchange earned.

(vi) Performance of the company in socio-economic activities.

(vii) General performance of industry in the relevant sector.

(viii) Foreign investment and foreign collaborations.

(ix) Expansion/ diversification/ modernization/ technology up gradation.

(x) Qualification, experience, period of association and contribution of the proposed appointee.

(xi) Requirement of personal skill and challenges ahead.

(xii) Past remuneration of the proposed appointee.

(xiii) Creativity / innovativeness of the proposed appointee/ company.

(xiv) Recognition/Award obtained by the proposed appointee/company.

(xv) The amount of remuneration proposed to be paid including salary, allow an cues, perquisites and whether it will have any effect on the overall financial health of the company.

(xvi) Any other factors relevant to the proposal, which the company may like to bring to the notice of the government justifying their proposal.

Managerial Remuneration in excess of limit under Schedule XIII

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The Department of Company Affairs, through its Circular dated 10.11.2000, has notified that if for any justifiable reason, it is proposed to pay remuneration

in excess of Schedule XIII of the Companies Act, it should be timely resolved in the Board meeting. The Board resolution should clearly justify the increase

giving sustainable adequate reasons for payment of remuneration in excess of the amount indicated in the schedule.

The Circular has further advised companies to make application for Government approval well in time and no payment of remuneration in excess of the

limit under Schedule XIII should be made till the Government order is received.

. In this connection, the Department has directed auditors of the companies, who audit their accounts to ensure that remuneration to the managerial

personnel is not paid in excess of the limit under Schedule XIII without necessary approvals. The company secretary has also been asked to playa

constructive role in ensuring that the matters relating to managerial remuneration are dealt with in the company within the stipulated timeframe.

The Department has further, vide its Circular dated 27.12.2000, advised the companies which submit an application for a remuneration which is higher

than the prescribed limit to take into consideration the following factors (detailed note on each as applicable be furnished) and give a detailed justification.

Clarification on Schedule XIII

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The Government has issued the following clarification, with regard to Schedule XIII :

It is clarified that for the purpose of salary and perquisites under revised Schedule XIII, the effective capital will have to be calculated as on the last date of

the financial year preceding the financial year in which the appointment is made or in which the remuneration is fixed or revised. However, in those cases

where companies have been incorporated in the same financial year in which the appointment had been made or the remuneration has been fixed or

revised, it would be in order for such companies to make the appointment or fix/ revise remuneration with reference to the effective capital as on the date

preceding the date of appointment.

Increase in Remuneration

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Section 310 provides that every increase in the remuneration of any director including a managing or whole-time director granted or provided by any

amendment in his term of appointment which has the effect of increasing, whether directly or indirectly, the amount payable to him would not be operative

unless the same has been approved by the Central Government. But no approval of the Central Government would be required if the increase in

remuneration made is in accordance with the conditions specified in Schedule XIII.

Any increase in the sitting fee payable to a director shall not require the prior approval of the Central Government if it falls within the prescribed limits.

Thus, companies with an effective capital of Rs.100 crores

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4,00,000/- per month or Rs. 48,00,000/- per annum to each of

their managerial person. Likewise, companies falling under other slabs of effective capital can pay up to double the amount of the respective ceilings, by

complying with the aforesaid requirements and the procedure.

Companies having negative effective capital can pay remuneration up to the revised ceiling [even more]’ by obtaining Central Government’s prior approval.

Companies in Special Economic Zones, as notified by the Deptt. of Company Affairs from time to time, can pay upto Rs. 2,40,00,000 (24Iakhs) per annum

or Rs. 20,00,000 (2 lakhs) per month provided that these Companies have not raised any money by public issue of shares or debentures in India. Again,

such a company should not have defaulted (in India) in repayment of its debts (including public deposits) or debentures or interest thereon for a continuous

period of 30 days in any financial year [Notification dt.14.8.2002]

Besides the aforesaid remuneration, a managerial personnel of a company having nO profits or inadequate profits shall also be eligible to the following

perquisites:

(a) Contribution to provident fund, superannuation fund or annuity funds to the extent these either singly or put together are not taxable under the

Income-tax Act, 1961.

(b) Gratuity payable at a rate not exceeding half a month salary for each com pleted year of service.

In addition to these perquisites, an expatriate managerial person (including a non-resident Indian) shall also be eligible to the following perquisites:

(i) Children Educational Allowance. In case of children studying in or outside India, an allowance limited to a maximum of Rs. 5,000 per month per child or

actual expenses incurred, whichever is less. Such allowance is admissible up to maximum of two children.

(ii) Holiday Passage for Children Studying Outside India/Family Staying Abroad. Return holiday passage Once in a year by economy class or once in two

years by first class to children and to the members of the family from the place of their study or stay abroad to India if they are not residing in India with the

managerial person.

Remuneration Payable by Companies having Profits

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Subject to the provisions of Sections. 198 and 309, a company having profits in a financial year may pay any remuneration, by way of salary, dearness

allowance, perquisites, commission and other allowances, which shall not exceed 5 per cent of its net profits for one such managerial person, and if there

are more than one such managerial persons, 10 per cent for all of them together.

Remuneration Payable by Companies Having No Profits or Inadequate Profits

Where in any financial year during the currency of tenure of the managerial person, a company has no profits or its profits are inadequate, it may pay

remuneration to a managerial person, by way of salary, dearness allowance, perquisites and any other allowance, not exceeding ceiling limit of Rs.

24,00,000 per annum or Rs. 2,00,000 per

month calculated on the followinq.scale:’

Where the effective capital Monthly remuneration

of a company is payable shall not exceed

(j) Less than Rs. 1 crore Rs. 75,000

(ii) Rs. 1 crore or more but less than Rs. 5 crores Rs. 1,00,000

(iii) Rs. 5 crore or more but less than Rs. 25 crores Rs.1,25,000

(iv) Rs. 25 crore or more but less than Rs. 50 crores Rs.1,50,000

(v) Rs. 50 crores or more but less than Rs. 100 crores Rs. 1,75,000

(vi) Rs. 100 crores or more Rs.2,00,000

However, to pay the remuneration to a managerial person as per the aforesaid ceiling limits, it has been made mandatory. to seek approval by way of a

resolution passed by the Remuneration Committee. Besides, the company should not have made any default in repayment of any of its debts (including

public deposits) or debentures or interest payable thereon for a continllolls period of thirty days in the precedingftnancial year before the date of

appointmmt of such managerial person.

Vide its Notification dated 16.1.2002, the Central Government ha’s allowed companies to pay remuneration to their managerial personnel up to double the

amount of the aforesaid ceiling by observing the required procedure as stated above and passing a special resolution at the general meeting, the notice

of which must be accompanied

by a statement containing the specified particulars. The remuneration fixed by way of special resolution, as aforesaid, shall be valid for a period not

exceeding three years.

Managerial Remuneration vis-a-vis Schedule XIII

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The Companies (Amendment) Act, 1988 introduced Schedule XIII to replace the administrative guidelines in respect of managerial remuneration issued by

the Central Government. Accordingly, it is now open to a public company or a private company which is a subsidiary of a public company, to appoint its

managerial personnel and fix their remuneration so long as the same is in accordance with the conditions laid in Schedule XIII without seeking the prior

approval of the Central Government.

The salient features of Schedule XIII are as follows:

3 per cent of the net profits of the company in any other case.

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Higher remuneration may be paid with the approval of the Central Government. A director may receive remuneration by way of a fee for each meeting of

the Board,

or a committee thereof, attended by him.

A whole-time director or a managing director may be paid remuneration either by way of a monthly payment or at a specified percentage of the ne profits

of the company or partly by one way and partly by the other. However, except with the approval of the Central Government such remuneration shall not

exceed 5 per cent of the net profits for one such director and if there are more than one such director, 10 per cent for all of them together.

The net profits of the company for the aforesaid purpose shall be computed in the manner prescribed in Section 198 (1).

If any director draws or receives, directly or indirectly, by way of remuneration any sum in excess of the limits stated above, without the sanction of the

Central Government, where it is required, he shall have to refund such sum to the company and until the refund is made, the money will be held by him in

trust for the company. The company cannot waive the recovery of any sum refundable to it, unless permitted by the Central Government.

The aforesaid provisions of Section 309 which lay down limits to the remuneration payable to directors individually do not apply in respect of an

independent private company.

As regards remuneration payable to a Manager, Section 387 provides that he may receive remuneration either by way of a monthly payment or by way of a

specified percentage of the net profits, or partly by one way and partly by the other. Such remuneration, however, must not exceed in the aggregate 5 per

cent of the net profits except with the approval of the Central Government.

Overall Limits of Managerial Remuneration

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Section 198 provides that the total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company

to its directors or manager in respect of any financial year must not exceed 11 per cent of the net profits of that company for that financial year. In

computing the aforesaid ceiling of 11 per cent, Section 198 (4) says the fees payable to directors for attending Board meetings shall not be included.

.Section 309, another Section dealing with managerial remuneration, provides that subject .to the general provisions of Section 198, the remuneration be

determined by the Articles, or by a resolution or, if the Articles so require, by a special resolution, passed by the company in general meeting. The

remuneration so payable shall be inclusive of the remuneration payable for services rendered by a director in any other capacity except where

(a) the services are of a professional nature, and

(b) in the opinion of the Central Government, the director possesses the requisite qualifications for the practice of the profession.

A director who is neither in the whole-time employment of the company nor a managing

director may be paid remuneration:

What is managerial remuneration? What are the overall limits of managerial remuneration under the Companies Act

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‘Managerial remuneratio’ may take the fOrln of monthly payments, say, salary, or a specified percentage of net profits or a commission or by way of a fee

for each meeting of the Board (called sitting fee). Besides, as per Explanation to Section 198 (4), the expression ‘managerial remuneration’ shall also

include:

(a) any expenditure incurred by the company in providing any rent-free accommodation, or any other benefit or amenity in respect of accommodation free

of charge, to any of its directors or manager.

(b) any expenditure incurred by the company in providing any other benefit or amenity free of charge or at a concessional rate to any of the persons aforesaid.

(c) any expenditure incurred by the company in respect of any obligation or service, which, but for such expenditure by the company, would have been incurred by any of the persons aforesaid.

(d) any expenditure incurred by the company to effect any insurance on the life of, or to provide any pension, annuity or gratuity for, any of the persons . aforesaid or his spouse or child.

Procedure for Filling Casual Vacancy

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Ascertain the provisions with regard to appOIntment of a director in a casual vacancy as contained in the Articles. Ensure that the procedure laid down

is followed.

2. See that the written consent of the person proposed to be appointed is filed with the company.

3. Take steps to call a meeting of the Board of Directors to appoint the director

to hold office for the remaining period of the vacating director’s term. 4. Intimate the appointee of his appointment as director. 5. See that the person so

appointed files with the Registrar his consent to act as

director within 30 days. .

6. File with the Registrar return as per Section 303 notifying the change in

directorship within 30 days.

7. See that necessary entries are made in the Register of Directors and Register

of Directors’ Shareholdings.

Who is a whole-time director?

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In many Sections of the Companies Act, the term ‘whole-time director’ has been used side by side with that of the ‘managing director’. Confusion is,

therefore, likely to arise in respect of their position and role.

While the term ‘managing director’ has been specifically defined under Section 2(26), no such definition of a whole-time director is available. Explanation to

Section 269, however, states that the expression whole-time director includes a director in the whole time employment of the company.

Regarding appointment/re-appointment and remuneration of whole-time director, same provisions as are applicable to a managing director, are

applicable. Under Section 269, every public company and a private company which is a subsidiary of a

public company must have a managing director or a whole-time director if its paid-up

share capital is Rs. 5 crores or more. Similarly, Sections 267 and 268 providing for

5. Where application is to be made to the CenlTal Government, as aforesaid:

(i) Give general notice to all members indicating the nature of the application to be made to the Central Government. Publish the notice at least once in the

regional language in a newspaper of the principal language of the district in which the registered office of the company is situated and circulating in that

district and at least once in English in an English newspaper circulating in that district [Sec. 640B].

(ii) Forward three copies of the general notice published in the newspaper to the Stock Exchange if the shares of the company are listed on a recognized

stock exchange [Standard Listing Agreement].

(iii) Forward to the Stock Exchange with which the shares of the company are listed, a copy of the proceedings of the general meeting and three copies of

the notice of the general meeting [Standard Listing Agreement].

(iv) Make the application in Form No. 25A within 90 days from the date of

appointment and enclose the prescribed documents.

6. Send a copy of the application along with all the documents to the Registrar of Companies.

7. See that the managing director files his consent in writing with the company to act as a director after appointment if he was not a director before his appointment.

8. See that the managing director notifies about his appointment to other com panies in which he is a director, managing director, manager or secretary within 20 days [Sec. 305].

9. Make necessary entries in the Register of Directors.

Where application is to be made to the Central Government as aforesaid:

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(a) Give general notice to all the members indicating the nature of the application to be made to the Central Government. Publish the notice in the

newspaper at least once in the principal regional language of the district in which the registered office of the company is situated and circulating in that

district and at least one in English language in an English newspaper circulating in that district (Section 640 B).

(b) Forward three copies of the general notice published in the newspaper to the Stock Exchange if the shares of the company are listed on a recognised

stock

exchange [Standard Listing Agreement]. .

(c) Make the application to the Central Government and attach along therewith a copy of the notice published as aforesaid together with other specified

documents. Application is to be made in Form No. 25A.

7. Send a copy of the application along with all the documents to the concerned Registrar of Companies [Rule 20 A of the Companies (Central

Government’s) General Rules and Forms, 1956].

8. Send an abstract of the terms of the contract to all the members within 21 days . from the date of entering into the contract and a Memorandum clearly “

specifying the interest or concern of any other director in the contract, if any.

9. See that the managing director files his consent in writing with the company to act as a director, if he was not a director earlier.

10. Enter the name of the appointee in the Register of Directors and file Form No.

32 in duplicate with the Registrar of Companies within 30 days of the

appointment [Sec. 303].

11. See that the managing director notifies about his appointment to other com panies in which he is a director, managing director, manager or secretary within 20 days.

. Mr. P, the managing director of MIs XYZLtd., is proposed to be appointed as managing director of MIs ABC Ltd. State the procedure of such an

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Section 316 of the Companies Act, 1956 provides that a person who is the managing director of one company can be appointed as managing

director of another public company or a private subsidiary company by passing a resolution at the Board meeting considering the said proposal with the

consent of all the directors present and entitled to vote at the meeting provided the specific notice of the meeting and the resolution to be moved thereat

has been given to all directors then in India. In addition, it will require the approval of the Central Government under Section 269 because such appointment

will not satisfy condition (d) of Part 1 of Schedule XIII. Schedule XIII provides that a person may be appointed as a managing director or whole-time director

or manager of a company without the approval of the Central Government if certain conditions are satisfied including a condition [viz., condition (d)] that

tl1e person to be so appointed should not already be the Manager, Managing Director or whole-time Director of another company.

Procedure

1. Hold a Board meeting by giving specific notice of item of appointment and approve the apartment with the consent of all directors of the company

present and entitled to vote at that meeting and pass a resolution for the appointment.

2. Ensure that the provisions of Section 299 regarding disclosure of interest of directors, etc. are duly complied with. Interested directors are not entitled to

vote on the resolution.

3. A copy of the resolution of the Board or agreement executed by the company, relating to the appointment should also be filed alongwith Form No. 23

with the Registrar of Companies (Sec. 192).

4. As the appointment is not in accordance with the conditions specified in Schedule XIII to the Act, make an application to the Central Government in Form

25A of the Companies (Central Government) General Rules and Forms together with the prescribed fee.

5. Approval of the shareholders in general meeting will also have to be obtained. In case, the resolution passed is a special resolution, a copy thereof

along with Form No 23, shall be filed with the Registrar of Companies together with the filing fee within 30 days.

Disqualifications of a Manager

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Section 385 provides that no company shall appoint or continue the appointment or employment of any person as its manager, who

(a) is an undercharged insolvent; or

(b) has at any time within the preceding five years been adjudged an insolvent; or (c) suspends, or has suspended within the previous five years payment

to his

creditors; or

(d) makes, or has at any time, within the preceding five years made a composition with his creditors; or

(e) is, or has at any time within the preceding five years been convicted of an

offence involving moral turpitude.

Besides the aforesaid disqualifications, a person who doesn’t satisfy the conditions of Schedule XIII cannot be appointed as a manager unless approval of

the Central Government is obtained.

Thus, we may notice that the disqualifications of a manager are the same as that of a managing director except that in the case of a manager any of these

disqualifications should be there during the preceding 5 years when the appointment is considered while in the case of managing director it is a life time

stigma.

Distinguish between ‘managing director’ and ‘manager’. What are their disqualifications

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As per Section 2(26) of the Companies Act, 1956, a ‘managing director’ means

a director wh, by virtue of an agreement with the company or of a resolution passed

by the company in general meeting or by its Board of Directors or by virtue of its Memorandum or Articles of Association, is entrusted with substantial

powers of management which would not otherwise be exercisable by him. The expression ‘managing director’ includes a director occupying the position

of a managing director, by whatever name called (say, President). The managing director is, however, to exercise his powers subject to the

superintendence, control and direction of the Board.

. The term ‘manager’ has been defined under Section 2(24) of the Companies Act, 1956 as an individual who, subject to the superintendence, control and

direction of the Board

of directors, has the management of the whole or substantially the whole, of the affairs of . a company, and includes a director or any other person

occupying the position of a manager, by whatever name called, and whether under a contract of service or not.

On perusal of the aforesaid definitions of the managing director and manager alongwith other relevant Sections of the Companies Act, the following points

of distinction may be noted:

(1) A ‘managing director’ is entrusted with substantial powers of management. A ‘manager’, on the other hand, has the management of the whole or

substantially the whole of the affairs of a company.

(2) A company may have more than one managing directors but it cannot have more than one manager.

(3) A managing director is appointed either under an agreement or by a resolution of the Board or general meeting or under the provisions of Memorandum

or Articles. A manager, on the other hand, is usually appointed either under a contract of service or by the Board of Directors though the Articles may also

provide for his appointment.

(4) A managing director must be a director whereas a manager mayor may not be a director.

(5) A managing director, on his ceasing to be a director, shall automatically cease to

be the managing director as well. A manager-director, however, can continue as

a manager even though he ceases to be a director.

(6) The grounds of disqualification of a managing director as given in Section 267 remain effective for whole life and cannot be waived by the Central

Government. The grounds of disqualification of a manager as given in Section 385 are

only for five years and can also be waived by the Central Government.

Disqualifications of a Managing Director Please refer to ‘point 9’ under answer to

Number of Companies a Person can be Appointed Manager Sub-section

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(1) of Section 386 disallows the appointment or employment of any person as

manager if he is either the manager or the managing director of any other company except as provided in sub-section (2) of Section 386. As per

sub-section (2) of Section 386, a company may appoint or employ a person as its manager, if he is the manager or managing director of one, and not

more than one, other company. However, such appointment or employment must be made or approved by a resolution passed at a meeting of the Board

with the consent of all the directors present at the meeting, and of which meeting and of the resolution to be moved thereat, specific notice was given to all

the directors then in India.

The Central Government has been further empowered under sub-section (4) of Section 386 to permit, by order, any person to be appointed as a manager

of more than two companies, if it is satisfied that it is necessary that the companies should, for their proper working, function as single unit and have a

common manager. It may, however, be noted that Schedule XIll provides for obtaining the approval of the Central Government for the appointment of a

person as a Manager in the second company itself.

Remuneration of Manager (Section 387). The manager of a company may, subject to the provisions of Section 198, receive remuneration either by way of

a monthly payment, or by way of a specified percentage of the ‘net profits’ of the company calculated in the manner laid down in Sections 349 and 350 or

partly by one way and partly by the other. However, except with the approval of the Central Government, such remuneration shall not exceed in the

aggregate five per cent of the net profits calculated as above.

Application of Sections 269, 310, 311, 312 and 317 to Managers. The provisions of certain sections relating to managing directors have been made

applicable to managers also (Section 388). These provisions include:

(a) Section 269: appointment or re-appointment requires Central Government approval except in cases specified under Schedule XIII;

Write a short note on ‘Manager’ of a puplic limited company

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Section 2(24) defines ‘manager’ as : “Manager means an individual who, subject to the superintendence, control and directions of the Board of Directors,

has the management of the whole or substantially the whole of the affairs of the company, and includes a director or any other person occupying the

position of a manager, by whatever name called and whether under a contract of service or not.

Thus, an individual must be in charge of the whole or substantially the whole of the affairs of the company, in order to be called a manager in accordance

with the Companies Act. A person who is one of the departmental manager or a branch manager is not deemed to be a manager in this sense.

Please note that only an individual can be appointed a manager of a company. According to Section 384, no company can appoint or employ any firm,

body corporate or association as its manager.

Disqualifications of a Manager Section 385 lays down the disqualifications of a manager. The Section provides that no company shall appoint or continue

the appointment or employment of any person as its manager, who

(a) is an undischarged insolvent; or

(b) has at any time within the preceding five years been adjudged an insolvent; or

(d) makes, or has at any time, within the preceding five years made a composition with his creditors; or

(e) is, or has at any time within preceding five years been convicted of an offence involving moral turpitude. .

“The Central Government may, however, by notification in the Official Gazette, remove any of the aforesaid disqualification incurred by any person either

generally or in relation to any company or companies specified in the notification [Section 385 (2)].

require the approval of the Central Government? What are the consequences, if such approval

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Section 2(26) defines ‘managing director’ as a director who, by virtue of an

agreement with the company or of a resolution passed by the company in general meeting or by its Board of Directors or by virtue of its Memorandum or

Articles of Association, is entrusted with substantial powers of management which would not otherwise be exercisable by him. The expression includes a

director occupying the position of a managing director, by whatever name called.

The definition makes it clear that the managing director’s powers of managing the affairs of the company must be substantial. The power to do

administrative acts of routine nature such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on

the account of the company in any bank or to sign any certificate of share shall not be deemed to be included within substantial powers of management.

The managing director shall exercise his powers subject to the superintendence,

control anQ direction of the Board of Directors.

Some of the important legal provisions relating to managing directors are:

1. He, being a director, must be an individual.

2. He is appointed by the Board of Directors usually to perform such functions and carry out such duties as may be assigned to him by the Board of

Directors to whom he is responsible or subject. The Board can revoke the authority of the managing director.

3. There can be two or more than two managing directors in a company.

4. Approval of the Central Government shall be necessary in case the conditions

as laid down in Schedule XIII are not satisfied. The Government may subject its approval to any conditions, that it may deem fit.

In case the approval is not granted by the Central Government (the application for which must have been made within 90 days of the appointment) the

appointee shall vacate the office immediately on communication of the decision of the Central Government to the company [Sec. 269(6)].

5. As per Section 316, a person cannot be appointed as a managing director of more than two companies without the approval of the Central Government.

6. Section 269, as amended by the Companies (Amendment) Act, 1988 requires that every public company and/ or private company which is subsidiary of

a public company having a paid-up share capital of not less than Rs. 5 crores must appoint a managing director/manager /wholetime director.

7. The term of office of a managing director cannot exceed 5 years at a time. Also re-appointments or extension can be made on the basis of 5 years

tenure on each occasion [Sec. 317]. However, re-appointment cannot be made earlier than 2 years from the date on which it is to come into force.

8. A managing director may be remunerated either by way of a monthly payment or as a specified percentage of the net profits of the company or partly

by one way and partly by the other. However, such remuneration should not

exceed 5 per cent of the net profits without the sanction of the Central Govenunent. Where there are more than one managerial personnel, the

remuneration to all of them must not exceed 10 per cent of the net profits without sanction of the Central Government [Sec. 309].

Write a short note on ‘Managing Director’

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Define the Managing Director. How is a Managing Director appointed? What are the restrictions imposed on the appointment and remuneration of

Managing Director? When is a person disqualified from being appointed as a Managing Director?

Is it obligatory on the part of the companies to have a Managing Director or manager? When does the appointment of a managing or wholetime director

Grant vs. United Kingdom Switchback Railway

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). If,

however, the company does not ratify such contract then the company will not be bound by the contract. Consequently, the directors will remain liable to

the other party to the contract for the breach of an implied warranty of their authority [Weeks vs. Propert, Starkey vs. Bank of England).

Indemnity Against Liability. In the ordinary course of things, directors being agents are entitled to an indemnity under Section 223 of the Indian Contract Act

in respect of all liabilities incurred in managing the business of the company in good faith. In addition to the indemnity which arises by implication in the

agency relationship, a more extensive indemnity can be provided under the Articles or by an express contract. But Section 201 prohibits a company from

exempting any officer of the company or indemnifying him against any liability, which, by virtue of any rule of law, would otherwise attach to him in respect

of any negligence, default, misfeasance, breach of duty or breach of trust of which he may be guilty in relation to the company. If there is any such

agreement, it shall be void. However, a company may indemnify any officer against any liability incurred by him in defending any proceedings, whether civil

or criminal in which judgement is given in his favour or in which he is acquitted or discharged or in connection with an application under Section 633 in

which relief is granted to him by the court.

Directors’ Rights and Liabilities for their Ultra Vires Acts

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The acts of directors which may be regarded as ultra-vires are two fold in nature, namely, (a) the acts which are beyond their authority but within the

company’s powers (i.e., intra vires the company) and (b) the acts which are beyond the directors’ authority as well as the company’s. The rights and

duties which emanate from ultra vires acts are as under:

(i) Under the Companies Act, the funds of the company can be applied in carrying out its permitted objects. Therefore, if an ultra vires payment is made by

directors of the company, e.g., payment of interest out of capital, they may be compelled to repay the money to the company even after it goes into

liquidation (In Re. Sharpe). But the directors so compelled to refund the money to the company could claim to be indemnified by the payees who received

the money from the directors with the knowledge that the payment to them was ultra vires. The reason for this rule of indemnification is that in such a

case, the payees would be constructive trustees of that money [Russel vs. Wakefield Water Works Co.].

(ii) The directors are the agents of the company. Therefore, they cannot do anything which the company itself cannot do under its Memorandum. But if

they make a contract within the powers of the company (i.e., intra vires the Memorandum)

Liability for Breach of Warranty

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Directors are supposed to act within the scope of their authority. Thus, where they transact in respect of matters ultra vires the company or ultra vires the

Articles, they may be proceeded against personally for any loss sustained by the third party.

What are the rights and liabilities of the Directors for their ultra vires acts? Is it in order for the company to indemnify the Directors against all liabilities that

may beincurred by them?

example the East India Company

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Their powers and actions are governed by the charter. For example the East India Company, Bank of England;etc. Such companies are now treated as foreign companies.Companies may be classified from different(points of view as follows A. Companies According to their Mode of Incorporation. In this point of view companies may bel. Chartered Companies, 2. Statutory Companies, and 3.Companies.1. Chartered Companies. These companies are incorporated under special Royal charter issued by the King or Queen. A company registered under the companies Act is not a chartered company Union of India AIR (/959) Cat. 95].2. Statutory Companies. Companies which are brought into existence and governed by special Acts of the legislature are known as Statutory Com allies. Public utility services, electric supply, gas work, etc, are generall by cnmpames ormed unaer specl11c Ja v WhICll govern and hese Com anies are usuall given some special owers which are not generall ossessed b companies regis ereer Companies Act.. This is necessary because public uti ItIes are mo oly orgamsatIons and supply services which are vital to the needs of the public. The Reserve Bank of India, the L.I.C.
of India, the Unit imes of India, the Indian Airlines and the State Bank of India are some examples of statutory companies in India. The audit of such companies is conducted under the supervision and control of the Auditor General of India. These companies have a corporate existence and can sue or be sued in their own name. 3. Registered Companies. Companies registered under the Companies Act, 1956 or under any previous Companies Act; are
Registered Companies.

Classification by Intelligence level and power

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Classification by Intelligence level and power
Lee et al. classify Web agents into four levels, according to their
intelligence and power.
1) Level 0 These agents retrieve documents for a user under straight
orders. Popular Web browsers fall into this category.
2) Level 1 These agents provide user initiated searching facility for
finding relevant Web pages.
Internet search agents such as Yahoo, Alta Vista, and
Infoseek are examples.
When the user provides key words, the search engine
matches them against the indexed information.
3) Level 2 These agents maintain user’s profiles. Then they monitor
internet information and notify the users whenever relevant
information is found.
Examples of such agents are WebWatcher and SIFT.
4) Level 3 Agents at this level have learning and educative component
of user profiles to help a user who cannot formalize a query
or specify a target for a search.
DiffAgent and Letzia are examples of such agents.

Classification of application area
According to IBM’s white paper, there are nine major application areas
that elate to internet agents.
1. Agents that assist in workflow and administrative management
2. Agents that collaborate with other agents and people
3. Agents that support electronic commerce
4. Agents that support desktop applications
5. Agents that assist in information access and management
6. Agents that process mail and messages
7. Agents that control and manage the network access
8. Agents that manage systems and networks
9. Agents that create user interfaces
Gilbert and Janca indicates that many agents are being used in each
category, be in mainstream use. They also provide many examples of
agents in each of the nine categories.
King classifies agents into interface, tutors, scheduling assistants,
search agents, report agents, presentation agents, navigation agents,
and role playing agents.

Internet based software agents
Following are the main internet based software agents.
1. E-mail agents
2. Web browsing assisting agents
3. Frequently asked questions agents (FAQ)
4. Intelligent search agents
5. Internet softbot

Managerial Issues
The following are some representative managerial issues.
1) Cost Justification 5) Other ethical issues
2) Security a) Agent learning
3) Privacy b) Agent accuracy
4) Industrial intelligence and ethics c) Heightened expectations
5) Other ethical issues d) System acceptance
e) System technology
f) Agent development toolkits
g) Strategic information systems

Cost Justification
With technology rapidly changing and with intelligent agents in their
developmental infancy, it ma be hard to justify spending lots of money
on something that may be obsolete tomorrow.

Security
Agents are a technology with many unknown ramifications.
With the great concerns about the security the security of systems,
does it make sense that a company would knowingly send out agents
that could come back laden with a virus or hiding a Trojan horse?

Privacy
There are some cases in which agents have intruded on people’s
privacy.
Example _ Cookies

Industrial intelligence and ethics
Legitimate industrial intelligence gathering is usually expensive and
time consuming.

Other ethical issues
Agents represent a significant new way of interacting with the world.
Just as a unique etiquette has evolved on the internet, there will need
to be new definitions of acceptable and unacceptable uses for agents.

Agent learning
The theory behind agents is that the more you use them, the more they
learn and, therefore, the more effective they are.

Agent accuracy
Along with agent learning, comes agent accuracy.
Assuming that the agent develops the ability to learn, the next issue
facing managers is the accuracy of the data returned by the agent.

Heightened expectations
With any new technology or product come higher expectations. This is
especially true when it comes to intelligent agents.

System acceptance
The introduction of intelligent agents into an existing system can
sometimes create problems.
Systems have different architectures and operating systems.

System technology
As intelligent agents become more powerful, the systems required to
run them also must be more powerful.

Agent development toolkits
To implement agent applications, one can use specially toolkits.
Strategic information systems
Management has a great need to survey the environment for
opportunities and treats to the long term survival and success of the
company.
Intelligent agents are an excellent long term strategic asset a company
may develop in gathering data from a variety of sources around the
world.
EDP Electronic Data Processing
UIMS User Interface Management System
GUI Graphical User Interface
IFPS Interactive Financial Planning System
DFPM Educom’s Financial Planning Model
ES Expert System
ANN Artificial Neural Networks
VRML Virtual reality Markup Language
GPS Global Positioning System
GIS Global Information System
OLE Object Linking and Embedding
NGT Nominal Group Technique
SANN Simulated Artificial Neural Networks

Classification and Types of Agents

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Classification and Types of Agents

There are several types of agents that can be classified in different
ways.
Franklin and Graesser use a taxonomic tree to classify autonomous
agents.
Relevant to managerial decision making are computational agents,
software agents and risk specific agents.
Another classification is according to control structure, computational
environment, programming language and application type.

Classification by Classification by characteristics
1) Organizational and personal agents 1) Agency
2) Private agents versus public agents 2) Intelligence
3) Software agents and intelligent agents 3) Mobility
4) Mobile agents

Organizational and personal agents
There are two broad classifications of intelligent agents.
1. Organizational
2. Personal
Organizational agents execute task on behalf of a business process or
computer application.
Personal agents perform tasks on behalf of users.
Example of an organizational intelligent agent is an automatic e-mail
sorting system. When a new message come in, it an automatically be
routed to the right file and folder.
Personal agents are very powerful. They allow users to go directly to
the information they want on the internet.

Private agents versus public agents
A private agent works only for one user who creates it.
Public agents are created by a designer for the use of anybody who
has access to the application, network or database.

Software (simple) agents and intelligent agents
Truly intelligent agent must be able to learn and exhibit autonomy.
Most internet and electronic commerce agent do not exhibit these
characteristics.
Therefore, they are often called software, or simple agents.

Mobile Agents
Mobile agents can move from one internet site to another and send
and retrieve data to the user, who can focus on other work in the
meantime.
This can be very helpful to a user.
Software applications that automatically watch stocks are available, but
they require a dedicated line and computer.
The mobile agent travels from site to site, looking for information on
that stock as instructed by the user.
Example _ if the stock price hits a certain level or if there is news about
the stock, the agent alerts the user.

Classification by characteristics
Of the various characteristics of agents three are of special importance.
Agency, Intelligence and mobility.

Agency
This is the edge of autonomy and authority vested in the agent and can
be measured at least qualitatively by the nature of the interaction
between the agent and other entities in the system.
The degree of agency is enhanced if an agent represents a user in
some way.

Intelligence
This is the degree of reasoning and learned behavior.
The agent’s ability to accept the user’s statement of goals and carry out
the tasks delegated to it.

Mobility
This is the degree to which agents themselves travel through the
network.
Some agents may be static, either residing on the client machine or
initiated at the server.
Mobile scripts may be composed on one machine and shipped to
another for execution in a suitable secure environment, in this case, the
program travels before execution, so no state data need be attached.

Supports conditional processing

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Supports conditional processing
Many agents use rule based pattern matching logic to make decisions
in the face of changing context.
As agents become more sophisticated, these rules will increasingly be
able to be stated at a higher level, even natural language.
Learning
Some of the newer internet search engines boast intelligent agents,
which can learn from previous requests the user has made.
Reactivity
Agents perceive their environment which may be the physical world, a
user via graphical user interface, a collection of other agents, the
internet, or perhaps all of these combined and respond in a timely
fashion to changes that occur in it.

Proactive ness
Agents do not simply act in response to their environment. They are
able to exhibit goal defected behavior by taking initiative.

Temporal continuity
The agent should be a continuously running process, not a one shot
deal that terminates after completing a series of commands.

Personality
For an agent to be effectively, it must be believable and be able to
interact with human users.

Mobility
An agent that can transport it across different system architectures and
platforms is far superior to those that cannot.

Why intelligent Agents.
Information access and navigation are today’s major applications of
intelligent agents, but there are several other reasons why this
technology is expected to grow rapidly.
Examples _ Intelligent agents can improve computer network security,
support electronic commerce, empower employees, and increase
productivity and quality
Following are the reasons.
1) Decision Support 4) Search and retrieval
2) Repetitive office activity 5) Domain experts
3) Mundane personal activity
Decision support
There is a need for increased support for tasks performed by
knowledge workers, especially in the decision machine area.
Timely and knowledgeable decisions businesses in the marketplace.

Repetitive office activity
There is a pressing need to automate tasks performed by
administrative and clerical personnel in functions such as sales or
customer support to reduce labor costs and increase office productivity.

Mundane personal activity
In a fast paced society, time strapped people need new ways to
minimize the time spent on routine personal tasks such as booking
airline tickets so that the voice activated interface Aetna that reduces
the burden on the user of having to explicitly command the computer.
Another is that of a personal assistant, whom learns our work patterns
and replicates the on typical but mundane tasks such as appointments,
meal reservations, and e mail processing.

Search and retrieval
It is not possible to directly manipulate a distributed database system in
an electronic commerce setting with millions of data objects.
These agents perform the tedious, time consuming and repetitive tasks
of searching databases, retrieving and filtering information and
delivering it back to the user.

Domain experts
It is advisable to model costly expertise and make it widely available.
Examples of expert software agents could be models of real world
agents such as translators, lawyers, diplomats, union negotiators,
stockbrokers, and even clergy.

Artificial Neural Networks

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Artificial Neural Networks
An artificial neural network is a model that emulates a biological neural
network.
The concepts are used to implement software simulations of the
massively parallel process that involve processing elements (also
called artificial neurons or neuroses) interconnected in network
architecture.
The artificial neuron receives inputs that are analogous to the
electrochemical impulses that the dendrites of biological neurons
receive Ron other neurons.
The output of the artificial signals can be neuron corresponds to signals
sent out from a biological neuron over its axon.
Learning
An ANN learns from its experiences.
The usual process of learning involves three tasks.
1. Compute outputs
2. Compare outputs with desired targets
3. Adjust the weights and repeat the process

Neural Network Hardware
Most current neural network applications involve software simulations
that run on conventional sequential process (called simulated artificial
neural networks, or SANN).
To increase the computational speed when regular computers are
used, one of four approaches is applicable.
1. Faster general purpose computers
2. General purpose parallel processors
3. Neural chips
4. Acceleration boards
Faster general purpose computers
Use a high end PC with a fast Pentium, P6 or PowerPc processor chip
or a RISC workstation like an IBM RS/6000.
General purpose parallel processor
There are a number of general purpose parallel processors, ranging
from the large grained IMB SP – 2 to small grained transcomputers
such as INMOS Transputer.
Neural computing is inherently parallel in nature.
There are a number of parallel neural network codes such as Nnets
from Cosmic / The University of Georgia.
Neural chips
Most of today’s special chips can execute computations very fast, but
they cannot be used to train the network.
The idea of a chip is to provide implementation of neural network data
structures on the following.
An Analog chip _ such as Intel 80170NX Electronically Trainable ANN,
or ETANN
A Digital chip _ such as Micro Devices MD – 1220
An optical chip.
Acceleration boards
These are powerful, dedicated parallel / array processors that can be
installed in regular computers, similar to a math coprocessor.
Such a processor can be thousand soft times faster than a Pentium
processor.
Some examples are….
Adaptive Solutions CNAPS/PC–128 – Which BrainMakers uses
The Mosaic QED Board The HNC Balboa Board
Acceleration bards are extremely useful because they reduce training
time, which is usually quite long.

Intelligent Agents and Creativity
An intelligent Agent (IA) is a computer program that helps a user with
routine computer tasks.
The first vignette is an example of a first generation individually
operated agent.
They can overcome the most critical limitation of the internet – the
information overflow – and make electronic commerce a viable
organization tool.

Names
Several names are used to describe intelligent agents, including
software agnates, wizards, knowbots, and softbots (intelligent software
robots).
The names sometimes reflect the nature of the agent.

Characteristics of Intelligent Agents
Autonomy Learning
Operates in background Reactivity
Single task Proactive ness
Communication Temporal continuity
Automates repetitive tasks Personality
Supports conditional processing Mobility

Autonomy
An agent is autonomous; that is, it is capable of action on its own.
An agent must be able to make some decisions on its own by being
goal oriented, collaborative, and flexible.
It must b able to alter its course or behavior when it meets obstacles to
find ways around the impediment.
Example _ an agent should be able to accept high level request and
decide on its own where and how to carry out the request.
Autonomy implies that an agent takes initiative and exercises control
over its own actions in the following ways.
Goal oriented Accepts high level requests indicating what a human wants and
is responsible for deciding how and where to satisfy certain
requests.
Collaborative Does not blindly bet commands, but can modify requests, ask
clarification questions, or even refuse to satisfy certain requests.
Flexible Actions are not scripted, able to dynamically choose which
actions to invoke and it what sequence, in response to the state
of its external environment.
Self Starting Unlike standard programs directly invoked by user, an agent can
sense changes of its environment and decide when to act.

Operates in backboard
An agent must be able to work out of sight, within the realm of
cyberspace or other computer systems, without the constant attention
of its user.
Some developers use the term remote execution or mobile agents to
describe this attribute.

Single task
In most cases an agent is designed to accomplish a single task.
A single task cold is searching the internet for articles.
Another might be filtering electronic mail.
The more futuristic agents appear capable of doing multiple things.

Communication
Many agents are designed to interact with other agents, humans, or
software programs.
Instead of making a single agent smarter, additional agents can be
created to handle undefeated tasks.
The ability to collaborate enables the system to accomplish more
complex tasks.

Automates repetitive tasks
An agent is designed to do narrowly defined tasks, which it can do over
and over without getting bored or sick or going on strike.

Problems and Limitations of Expert System

2007-12-21T03:05:00.000-08:00

Problems and Limitations of Expert System
1. Knowledge is not always readily available
2. Expertise an be hard to extract from humans
3. The approach of each expert to situation assessment may be different, yet
correct.
4. It is hard, even for a highly skilled expert, to abstract good situational
assessments when he or she is under time pressure.
5. Users of expert systems have natural cognitive limits.
6. ES work well only in a narrow domain of knowledge
7. Most experts have to independent means of checking whether their
conclusions are reasonable
8. The vocabulary or jargon, that experts use for expressing facts and relations
is often limited and not understood by others.
9. Help is often required from knowledge engineers who are rare and expensive,
a fact that cold make ES construction costly.
10. Lack of trust by end users may be a barrier to ES use.
11. Knowledge transfer is subject to a host of perceptual and judgmental biases.
Cutting Edge DSS Technology : Neural Computing and Intelligent
Agents
Machine learning methods
Machine learning methods and algorithms have been developed.
Following are some of the examples.
Neural
Computing
This approach can be used for inferencing knowledge acquisition, thus, it can
be used for decision support.
Inductive
learning
This approach is used in knowledge acquisition, as in rule induction.
Case based
reasoning and
analogical
Reasoning
This approach is used in knowledge acquisition and inferencing.
Genetic
algorithms
Genetic algorithms attempt to follow some of the procedures of biological
systems, which are excellent learners.
Statistical
methods
Statistical methods have been applied to knowledge acquisition, forecasting
and problem solving.
Explanation
based learning
This approach assumes that there is enough existing theory to explain why
one instance is or is no a prototypical member of a class.
Neural Computing
A different approach to intelligent system involves constructing
computers with architectures and processing capabilities that mimic
certain processing capabilities of the human brain.
The results are knowledge representations based on massive parallel
processing, fast retrieval of large amounts of information and the ability
to recognize pattern based on historical cases.
The technology that attempts to achieve these results is called neural
computing or artificial neural networks (ANNs).
Artificial neural networks are an information processing technology
inspired by studies of the brain and the nervous system.

Benefits of Expert System

2007-12-21T03:03:00.000-08:00

Benefits of Expert System
1. Increased output and productivity
ES can work faster than humans.
Customers can have direct access to help desk ES – A self service help desk
2. Decreased decision marketing time
Using the system’s recommendation, a human can make much faster
decisions.
3. Increased process and product quality
ES can increase quality by providing consistent advice and reducing the size
and rate or errors.
4. Reduced downtime
By using ES it is possible to reduce machine downtime significantly.
5. Capture of scare expertise
The scarcity of expertise becomes evident in situation where there are not
enough experts for a task.
6. Flexibility
ES can offer flexibility in both service and manufacturing industries.
7. Easier equipment operation
ES makes complex equipment easier to operate.
8. Elimination of the need for expensive equipment
ES can perform the same task as human expert does with lower cost
instruments because of their ability to investigate the information provided by
instruments more thoroughly and quickly.
9. Operation in hazardous environment
Many tasks require human to operate in hazardous environments. The ES
may enable humans to avoid such environments. It enables workers to avoid
hot, humid, or toxic environment.
10. Accessibility to knowledge and help desks
ES make knowledge accessible, thus freeing experts from routine work
People can query systems and receive advice
11. Increased capabilities of other computerized systems
Integration of ES with other systems makes the other systems more effective.
12. Integration of several experts opinions
In certain cases, ES forces us to integration the opinions of several experts
and thus may increase the quality of the advice.
13. Ability to work with incomplete or uncertain information
ES can, like human experts, work with incomplete, imprecise, uncertain data,
information, or knowledge.
14. Provide training
Novices who work with ES become more and more experience.
15. Enhancement of problem solving and decision making

ES enhance problem solving by allowing the integration of top experts
judge met into analysis.
16. Improved decision making process
ES provide rapid feedback on decision consequences facilitate
communication among decision makers in a tea, and allow rapid response to
unforeseen changes in the environment.
17. Improved decision quality
ES are reliable, thy do not become tired or bored, call in sick or go on strike,
and thy do not talk back to the boss.
18. Ability to solve complex problems
One day. ES may solve problems whose complexity exceeds human ability.
19. Knowledge transfer to remote locations
One of the greatest potential benefits of ES is its ease of transfer across
international boundaries.
20. Enhancement of other CBIS
ES can often be fond providing intelligent capabilities to large CBIS. Many of
these benefits lead to improved decision making, improved products and
customer service, and a sustainable strategic advantage.

The Human Element in Expert Systems

2007-12-21T03:00:00.000-08:00

The Human Element in Expert Systems
At least two humans, and possibly more participate in the development
and use of an expert system.
The Expert
The expert is a person who has special knowledge, judgment,
experience, and methods along with the ability to apply these talents to
give advice and solve problems.
The knowledge engineer
The knowledge engineer helps the expert structure the problem area
by interpreting and integrating human answers to questions, drawing
analogies, posing counter examples, and bringing to light conceptual
difficulties.
The user
Most computer based systems have evolved into a single user mode.
In contrast, an ES has several possible classes of users.
o A non expert client seeking direct advice. In such case, the ES
act as a consultant or advisor.
o A student who wants to learn. The ES acts as an instructor.
o An ES builder who wants to improve or increase the knowledge
base. Here the ES acts as a partner.
How Expert system work
ES construction and use consists of three major activities.
1. Development
2. Consultation
3. Improvement
Development
The development of an expert system involves the construction of the
knowledge base by acquiring knowledge from experts or documented
sources.
Development activity also includes the construction (or acquisition) of
an inference engine, a blackboard, an explanation facility, and any
other required software, such as interfaces.
The major participants in this activity are the domain expert, the
knowledge engineer, and possibly information system analysts and
programmers.
A tool that is often used to expedite development is called the ES shell.
ES shells include all the generic components of an ES, but they do not
include the knowledge.
Consultation
Once the system is developed and validated, it is deployed to the
users, who are typically novices.
When users seed advices, they access the ES.
Improvement
ES are improved several times through a process called rapid
prototyping during their development.
Problem Areas addressed by Expert System
Prediction
Systems
This includes weather forecasting, demographic predictions, economic
forecasting, traffic predictions, crop estimates, and military, marketing, or
financial forecasting.
Diagnostic This system typically relates observed behavioral irregularities to underlying
Systems causes.
This includes medical, electronic, mechanical, & software diagnosis.
Design
Systems
This develops configurations of objects that satisfy the constraints of the
design problem.
Such problems include circuit layout, building design, and plan layout.
Planning
Systems
This specializes in problems of planning, such as automatic programming.
They also deal with short and long term planning areas such as project
management, routing, communications, product development, military
applications, and financial planning.
Monitoring
Systems
This compares observations of system behavior with standards than seem
crucial for successful goal attainment.
Air traffic control to fiscal management tasks
Debugging
Systems
This relies on planning, design, and prediction capabilities to create
specifications or recommendations for correcting a diagnosed problem.
Repair
Systems
This develops and executes plans to administer a remedy for certain
diagnosed problems.
Such systems incorporate debugging, planning and execution capabilities.
Instruction
Systems
This incorporates diagnosis and debugging subsystems that specifically
address the student needs.
Control
Systems
These adaptively govern the overall behavior of a system.

Knowledge refining system

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Knowledge refining system
Knowledge acquisition subsystem
Knowledge acquisition is the accumulation, transfer and transformation
of problem solving expertise from experts or documented knowledge
sources to a computer program for construction or expanding the
knowledge base.
Potential sources of knowledge include human experts, text books,
multimedia documents, databases, special research reports, and
information available over the World Wide Web.
Typically the knowledge engineer helps the expert structure the
problem area by interpreting and integrating human answers to
questions, drawing analogies, posing counter examples, and bringing
to light conceptual difficulties.
Knowledge base
The knowledge base contains the knowledge necessary for
understanding, formulating, and solving problems.
It includes two basic elements.
1. Facts such as the problem situation and theory of the problem
area
2. Special heuristics or rules that direct the use of knowledge t
solve specific problems in a particular domain.
The heuristics express the informal judgmental knowledge in an
application area.
Inference Engine
The brain of the ES is the inference engine, also known as the control
structure or rule interpreter.
This component is essentially a computer program that provides
methodology for reasoning about information in the knowledge base
and on the blackboard, and for formulating conclusions.
The inference engine has three major elements.
1) An interpreter This executes the chosen agenda items by applying
the corresponding knowledge base rules.
2) A scheduler This maintains control over the agenda.
It estimates the effects of applying inference rules in
light of item priorities or other criteria on the agenda.
3) A consistency enforcer This attempts to maintain a consistent representation
of the emerging solution.
User interface
Expert systems contain a language processor for friendly, problem
oriented communication between the user and the computer.
This communication can best be carried out in a natural language.
Sometimes it is supplemented by menus and graphics.
Blackboard - workplace
The blackboard is an area of working memory set aside for the
description of a current problem, as specified by the input data. It is
also used for recording intermediate results.
The blackboard records intermediate hypotheses and decisions.
Three types of decisions can be recorded on the blackboard.
1. A plan - how to attack the problem
2. An agenda – potential actions awaiting execution
3. A Solution – candidate hypotheses and alternative courses of
action that the system has generated
Explanation subsystem - Justifier
The ability to trace responsibility for conclusions to their sources is
crucial both in the transfer of expertise and in problem solving.
The explanation subsystem can trace such responsibility and explain
the ES behavior by interactively answering questions.
Knowledge refining system
Human experts have a knowledge refining system, that is, they can
analyze their own knowledge, and its use, learn from it, and improve on
tit for future consolations.
Similarly, such evaluation is necessary in computerized learning, so
that the program can analyze the reason for its success or failure.
Such a component is not available in commercial expert system at the
moment, but is being developed in experimental ES.

Accessing the GroupSystems tools

2007-12-21T02:55:00.000-08:00

Accessing the GroupSystems tools
The tools are accessed from the Agenda (Which is the control panel),
The agenda offers a rich collection of features to support the session
leader and the group as they work together to accomplish objectives
during a face to face meeting.
The group resources interact with other members of the group.
People People contain the list of participants with background information
for the meeting.
Whiteboard This is a group enabled drawing and annotation tool.
Handouts These are reference materials for group viewing such as a report,
agenda, or spreadsheet file.
Opinion Meter This is a faster, simpler version of the vote tool.
It allows us to quickly determine the group’s opinions.
Briefcase This allows us to access your commonly used applications such as
word processing, calculators, and e mail.
Personal Log This allows us to make notes during a meeting.
Only we can access these notes.
Event Monitor This keeps s informed of new activities and new information in
existing activities.
Expert System [EI]
An expert system is a system that uses human knowledge captured in
a computer to solve problems that ordinarily require human expertise.
General Purpose Problem solver (GPS)
The general purpose problem solver, a procedure developed by Newell
and Simon from their logic theory machine.
GPS attempts to find operations that reduce the difference between a
goal and current states.
Basic Concept of Expert
The basic concepts of expert system revolve around expertise; expert’s
transferring expertly inferencing rules, and explanation capability.
Expertise is the extensive, task specific knowledge acquired from
training, reading and experience.
The following types of knowledge are examples of what expertise
include…
Theories about the problem area.
Rules and procedures regarding the general problem area.
Rules (heuristics) of what to do in a given problem situation.
Global strategies for solving these types of problems.
Meta knowledge – knowledge about knowledge
Fact about the problem area.
Expert
Typically, human expertise includes a constellation of behavior that
involves the following activities.
Recognizing and formulating the problem
Solving the problem quickly and properly
Explain the solution
Learning from solution
Restructuring knowledge
Breaking rules
Determining relevance
Degrading gracefully – awareness of limitation
o Experts would be able to explain the results, learn new thing about the
domain, restructure knowledge whenever needed, break rules
whenever necessary, and determine whether their expertise is
relevant.
o Experts degrade gracefully. "Meaning that as they approach the
boundaries of their knowledge, they gradually become less proficient at
solving problems, but can still develop reasonable solutions".
Transferring Expertise
The objective of an expert system is to transfer expertise from an
expert to a computer system and then on to other humans (non expert)
These processes involve four activities.
1. Knowledge acquisition – from experts or other recourses
2. Knowledge representation – in the computer
3. Knowledge inferencing
4. Knowledge transfer – to the user.
The knowledge is entered in the computer in a component called
knowledge base.
The two types of knowledge are distinguished.
1. Facts 2. Procedures – usually rules
Inferencing
A unique feature of expert system is its ability to reason (Think).
The inferencing is performed in a component called the inference
engine that includes procedures regarding problem solving.
Rules
Most commercial ES are Rule based system.
The knowledge is assorted mainly in the form of rules, as are the
problem solving procedures.
Structure of Expert Systems
ES are composed of two major parts.
1. The development environment
2. Te consultation (runtime) environment
The ES builder o builds the components and put knowledge into the
knowledge base uses the development environment.
The three major components that appear virtually in every expert
system are …
1. The knowledge base
2. Inference engine
3. User interface
In general, though an expert system may contain the following
components…
1) Knowledge acquisition subsystem 5) User interface
2) Knowledge base 6) Blackboard – workplace
3) Inference engine 7) Explanation subsystem – Justifier
4) User

The Technology of GDSS

2007-12-21T02:51:00.000-08:00

The Technology of GDSS
There are three technology options for providing GDSS.
1. A special purpose electronic meeting facility
2. Custom designed for GDSS, a general purpose computer lab
that doubles as a less elegant but equally useful GDSS facility
3. Web (Internet), intranet, or LAN based software that allows
groups to work from any location at any time.
DeSanctis and Gallupe define the components of GDSS as hardware,
software, people and procedures.
Hardware
Single PC Participants gather around a single PC while one person
accesses and enters data and models.
PCs and Key
Board
This is basically a collection of workstations, each equipped
with keypads for voting.
A Decision Room This is a GDSS facility dedicated to and designed for
electronic meeting.
Distributed GDSS The participants are in different locations using PCs,
networks, and standard operating systems.
Software
GDSS software includes modules for support the individual, the group,
the process, and specific tasks.
Example _ the software may include special routines for improving the
decision making process and an easy to use, flexible user interface.
Typical group features include…
Numerical and graphical summarization of group members, ideas, and
votes.
Programs for the calculation of weights for decision alternatives,
anonymous recording of ideas, formal selection of a group leader,
progressive rounds of voting toward consensus building or elimination
of redundant input during brainstorming.
Text and data transmission among the group members, between the
group members and the facilitator, and between the members and a
central data / document repository.
People
The people component of the GDSS includes the group members and
a facilitator, who serves as the group’s chauffeur, operating the GDSS
hardware and software, and displaying requested information to the
group as needed.
Procedures
The final component of the GDSS consists of the procedures that
enable ease of operation and effective use of the technology by group
members.
GDSS Software Packages
The following are the major comprehensive GDSS software packages
that are primarily used in a decision room environment.
GroupSystems for
Windows
This is a comprehensive set of electronic meeting software.
VisionQuest This product supports a wide range of interactive team functions
such as control over the agenda, prioritizing, idea generation,
and the documentation of activities.
It also supports meetings in which the participants are in
different locations and can even communicate at different times.
SAMM This software from the University of Minnesota has been
installed in several corporate decision rooms
Lotus
Domino/Notes
This software is applicable to executive information system
deployment.
Netscape
Communicator
This software provides many of the features of Lotus notes
directly via Web servers and browsers.
TCBWorks This is one of the emerging Web based GDSS packages. It runs
on Unix servers.
The GROUPSYSTEMS for Windows standard tools support group
processes such as brainstorming, list building, information gathering,
voting, organizing, prioritizing, and consensus building.
The standard tools are as follows.
Electronic
brainstorming
This is designed to gather ideas and comments in an
unstructured manner.
Group Outliner This allows the group to create and comment on a multilevel list
of topics in a tree or outline structure.
Topic Commenter This allows participants to comment on a list of topics. It
supports idea generation in a more structured format than
Electronic Brainstorming, but less structured than Group
Outliner.
Categoriser This allows the group to generate a list of ideas and supporting
comments. Categories are created for the ideas, and
participants can drag the ideas into the desired category.
Vote This supports consensus development through group evaluation
of issues.
Voting methods include the following quantifiable ways.
Rank order, Multiple selection, 4 point and 5 point
agree/disagree, 10 point scale, yes/no, true/false, and a user
defined custom method.
The GROUPSYSTEMS for Windows advanced tools include add-ins
for analysis, surveys, and modeling.
The advance tools are as follows.
Alternative analysis This allows the group to weight or rate a list of alternatives
against a list of criteria because collaborative decisions require

the evaluation of multiple perspectives and ideas.
Survey This allows the creation, administration and analysis of an online
questionnaire.
This may be distributed to participant workstation in a wide
variety of setting from a group meeting to the World Wide Web.
Activity Modeler This provides user friendly group support for simultaneous
business process reengineering modeling.
Using activity modeler, people from all levels in an organization
can participate in the modeling process, producing more
accurate and productive business models, quickly.

Decision Making in Groups

2007-12-21T02:48:00.000-08:00

Decision Making in Groups
Groups: The term group refers to two or more (Usually up to 25)
people whose mission is to perform some task and who act as one
unit. The group can be permanent or temporary.
The group can be in one location or in several locations, and it can
meet concurrently or its members can work at different times.
A group can be a committee, a review panel, a task force, an executive
board, or a permanent team
Decision making is usually a shared process.
These groups meeting are characterized by the following activities and
processes.
o Meetings are a joint activity, engaged in by a group of people,
usually of equal or near equal status
o The outcome of the meeting depends partly on the knowledge,
opinions, and judgments of it participants
o The outcome of the meeting also depends on the composition
of the groups and on the decision making process used by the
group
o Differences in opinion are settled either by the ranking person
present or, more often, by negotiation or arbitration.
Despite the many benefits of group interaction, the results are not
always successful. The reason is that the process of collaborative work
is often plagued with dysfunctions, called process losses.
Dispersed Groups: GDSS can support meetings in which members
are in different locations and even at different times. New groupware
has been developed where corporate intranets or the internet.
The nominal group technique (NGT)
The NGT is one of the earliest managerial methods specifically
designed to support group work.
The method, developed by Delbec and Van de includes a sequence of
activities in decision making process.
1. Silent generation of ideas in writing
2. Round robin listing of ideas on a flip chart
3. Serial discussion of ideas
4. Silent listing and ranking of priorities
5. Discussion of priorities
6. Silent re ranking and search, which indicates that this procedure
is superior to conventional discussion groups in terms of
generating higher duality, greater quality and improved
distribution of information on fact finding tasks?
Group Decision Support Systems (GDSS)
There were two GDSS schools of thought.
The social sciences approach, which built on sociological and cognitive
theories of people working in the groups, to determine which types of
tools, would be most effective.
The Engineering approach, which examined how people interacted at
meetings and derived tools to improve the groups’ effectiveness and
efficiency.
Over the time both schools recognized the positive aspects of each
viewpoint, leading to an effective merger of the two.
What is GDSS?

According to Huber a GDSS consists of a set of software, hardware,
language components and procedures that support a group of people
engaged in a decision related meeting.
Following are the characteristics of GDSS.
o The GDSS is a specially designed information system.
o A GDSS is designed with the goal of supporting groups of
decision makes in their work
o A GDSS is easy to learn and to use.
o The GDSS may be designed for one type of problem or for a
variety of group level organizational decisions.
o The GDSS is designed to encourage activities such as idea
generation, conflict resolution, and freedom of expression.
o The GDSS contains built in mechanisms that discourage
development of negative group behaviors such as destructive
conflict, miscommunication, and group thing.
o GDSS is considered a subset of the broader field of Group
support system (GSS) or Electronic meeting systems (EMS).
EMS is nothing but an Information Technology (IT) based
environment that supports group meetings, which may be
distributed geographically and temporally.
Goal of GDSS and its Technology Levels
DeSanctis and Gallupe divide GDSS technologies into three levels that
differ in terms of the support provided to a group decision maker.
Level 1: Process support
Level 2: Decision making support
Level 3: Rules of order
Level 1: Process support
The goal of Level 1 GDSS is to reduce or remove communication
barriers. Items that are supported by such a system are…
Electronic messaging among group members
Network linking each member’s personal computer to those of the
other group members, the facilitator, the public screen, databases, or
any other common CBIS
A Public screen available at each group member’s PC or visible to all
members in a central place
Anonymous input of ideas and votes to enhance participation of group
members who prefer anonymity
Active solicitation of ideas or votes from each group member to
encourage participation and induce creativity
Summery and display of ideas and opinions, including statistical
summaries and vote displays
A format for an agenda that can be agreed upon by the group, to aid
meeting organization
Continuous display of the agenda, as well as other information, to keep
meetings of schedule
Level 2: Decision making support
At this level, the software adds capabilities for modeling and decision
analysis, process by providing systematic methods for task gains.
Features in this category include…
Planning and financial models
Decision trees
Probability assessment models
Resource allocation models
Social judgment models
Level 3: Rules of order
Level 3 addresses the group’s decision making process in terms of
controlling its timing, content, or message patterns.
At this level, special software containing rules of order is added.
Example _ some rules could determine the sequence of speaking, the
appropriate response, or voting rules.

The development Process: Life Cycle versus Prototyping

2007-12-21T02:45:00.000-08:00

The development Process: Life Cycle versus Prototyping
DSS construction can be differentiating between two extremes.
1. The life cycle approach
2. The evolutionary prototyping approach (iterative process)
The system development life cycle (SDLC) approach and DSS
This approach is used in transaction processing systems, which are
fairly structured.
The evolutionary prototyping approach
The prototyping approach aims at building a DSS in a series of short
steps with immediate feedback from users to ensure that development
is preceding correctly therefore, DSS tools must permit changes to be
made quickly and easily.
Advantages of prototyping
Short development time
Short user reaction time – feedback from user
Improved user understanding of the system, its information needs, and
its capabilities
Low cost
Disadvantages and limitations
Selection of DSS Development Tools
Mainframe DSS software The selection of a DSS generator
PC DSS software Developing DSS
Software selection
Mainframes DSS Software
Mainframe DSS software costs between $30,000 and $300,000 and
has several powerful capabilities.
Example _ Metafact (From integrated data architects, Northridge, (CA)
costs over $200,000.
PC DSS Software
Several vendors offer PC versions of their mainframe products at a
considerably low price.
Software selection
At the time of the selection, DSS information requirements and outputs
are not completely known.
There are hundreds of software packages on the market.
The software packages are changing very rapidly.
Price changes are frequent.
Several people may be involved in the evaluation team
Technical, functional, end user and managerial issues are all
considered.
Developing DSS
Development tools increase the productivity of builders and help them
produce, at a moderate cost, a DSS responsive to the true needs of
users.
A DSS development system can be thought of as s shop with several
tools and components and these components are integrated into a
DSS generator.

How speech recognition system work

2007-12-21T02:42:00.000-08:00

How speech recognition system work
The voice input to the microphone produces an analog speech signal.
This speech signal is then converted into binary words compatible with
a digital computer by an analog to digital converter.
The binary version of the input voice is then stored in the system and
compared to previously store binary representations of words.
When a match occurs, recognition is achieved.
Then, the spoken work appears on a video screen or is passed along
to an NLP for meaning analysis.
A typical work recognizer
The voice input is applied to a microphone.
The electrical analog signal from the microphone is fed to an amplifier,
where it is increased in level.
The amplifier contains some kind of Automatic gain control to provide
an output signal in a specific voltage range.
The analog signal representing a spoken work is a complex waveform
that contains many individual frequencies.
The way to recognize the spoken work is to break that complex input
signal into its components parts.
This is usually done with a set of filters.
A filter is an electronic circuit that passes or rejects frequencies in a
certain range.
Voice synthesis
Voice synthesis or response is the technology by which computers
speak.
Tools and applications of voice technologies
Speech recognition is used in four major areas.
1. Command and control – including voice control of machine
operations and voice activated dialing
2. Data entry to forms – quality control system, or databases
3. Direction – including creation of documents and reports
4. Data access / Information retrieval – such as directory
assistance and retrieval of online data
Voice technology application sampler – Application
Research on User Interfaces in
Hwang and Wu identified the following indecent and dependent
variables.
Independent Variables
Human user Demographics – Age, education, experience
Psychological – Cognitive style, intelligence, risk attitude
Decision
environment
Decision structure, organizational level
Others – stability, time pressure, uncertainty
Task Decision support – complexity level
Inquiry / information retrieval , data entry, word processing and
Computer aided instruction
Interface
characteristics
Input / Output media, Dialog type, Presentation format and
Language characteristics
Dependent variable : Human / Computer effectiveness
This was measured by usefulness, perceived ease of use and
performance (time, error, task, completion, profit), user attributes
(satisfaction, confidence) and use of system option (high. low).
Development Strategies
Write a customized DSS in general purpose programming language
such as COBOL or PASCAL.
Use a fourth generation language (4GL). Such as data oriented
languages, spreadsheets, and financial oriented languages.
Use a DSS integrated development tool. An integrated package
eliminates the need to use multiple 4GLs. The best known examples
for the PC are Excel, Lotus 1-2-3, and Quattro Pro.
Use a domain specific DSS generator: Domain specific DSS
generators are designed to build a highly structured system, usually in
a functional area.
DSS Development Phase A : Planning Phase E : Construction
Phase B : Research Phase F : Implementation
Phase C : System analysis and
conceptual design
Phase G : Maintenance and
documentation
Phase D : Design Phase H : Adaptation
Phase A : Planning
Planning deals mainly with need assessment and problem diagnosis.
A crucial step in the planning effort is determining the key decisions to
be supported by the DSS.
Example _ in a portfolio selection system, a key decision might be
selecting the correct stocks for a particular customer’s needs.
Phase B : Research
This phase involves the identification of a relevant approach for
addressing user needs and available resources. (Hardware, software,
vendors, systems, studies or related experience in other organizations,
and review of relevant research).
Phase C : System analysis and conceptual design
This phase includes the determination of the best construction
approach and specific resources required implementing it, including
technical, staff, financial, and organizational resources.
Phase D : Design
The detailed specifications of the system components, structure and
features are determined.
Phase E : Construction
A DSS can be constructed in different ways depending on the design
philosophy and the tools being used.
The construction is the technical implementation of the design.
Phase F : Implementation
The implementation phase consists of the following tasks: testing,
evaluation, demonstration, orientation, training and deployment.
Several of these tasks are performed simultaneously.
Testing Data on the system’s outputs are collected & compared against
the design specifications.
Evaluation The implemented system is evaluated to see how well it meets
user’s needs.
Technical & organizational loose ends are also identified.
Testing & evaluation usually result in changes in the design &
construction.
Demonstration Demonstration of the fully operational system capabilities to the
user community is an important phase.
Orientation This involves instruction of users in the basic capabilities &
operation of the system
Training Operational users are trained in system structure and functions.
Deployment The full system is operationally deployed for all members of the
user community.
Phase G : Maintenance and documentation
Maintenance involves planning for ongoing support of the system and
its user community.
Phase H : Adaptation
Adaptation requires recycling through the earlier steps on a regular
basis to respond to changing user needs and thus as several variables.

Speech (Voice) recognition and Understanding

2007-12-21T02:40:00.000-08:00

Speech (Voice) recognition and
Speech or voice recognition is the process of having the computer
recognizes the normal human voice.
When a speech recognition system is combined with a natural
language processing system, the result is an overall system that not
only recognizes voice input but also understands it.
Advantages of speech recognition
Ease of access
(Typing skills)
Typing skills – many people may not be able to use computers
effectively
Speaking is easy then typing.
Speed
(speed in speaking
& typing)
Even the most competent typist can speak more quickly than
they can type.
Speed is faster in speaking than typing.
Manual freedom
(Hands free)
There are many situations in which computers might be useful to
people whose hands are otherwise occupied, such as product
assemblers’ pilot of military aircraft, and busy executives.
Remote access We can retrieve information by issuing verbal commands into a

(Verbal commands) telephone.
Accuracy
(Spelling mistakes)
Can reduce the spelling mistakes during typing.
These are minimized with voice input.
Classifying speech recognizers
There are systems that recognize only individual works and other that
recognize continuous speech.
The systems are further classified as either speaker dependent or
speaker independent.
1) Word recognizers 3) Speaker dependent
2) Continuous speech recognizers 4) Speaker independent
Word recognizers
A word recognizer is a speech recognition system that identifies
individual words.
Such systems are capable of recognizing only a small vocabulary of
single words or possibly simple phrases.
To give commands or to enter data to a computer using one of these
systems.
Continuous speck recognizers
These speech recognition units recognize a continuous flow of words.
We can speak to them in complete sentences, and our input will be
recognized and possibly understood.
Speaker dependent
A speaker dependent system must be customized to the voice of a
particular individual before it can be used.
Speaker independent
Speaker independent systems mean that anyone can use the system.
Most speaker independent systems are incredibly complete and costly.
Some of the most advanced systems are speech recognition system
and the Sphinx and Janus systems developed at Carnegie Mellon
University.
The Bell Labs system is used, for example, for airline reservations via
human phone input.
IBM’s "Voice Type Simply Speaking" is available for running Windows
95 and applications.

Geographic Information System (GIS)

2007-12-21T02:36:00.000-08:00

Geographic Information System (GIS)
A GIS is a computer based system for capturing, storing, checking,
integrating, manipulating, and displaying data using digitized maps.
GIS has many applications.
GIS Software
GIS software varies in capabilities from simple computerized mapping
system to enterprise wide DSS tools for decision support data analysis.
A high quality graphic display and fast computation and search speeds
are necessary.
Many early GIS development were at universities and government and
military agencies.
GIS Data
The Census Bureau publishes a list of topologically integrated
Geographic Encoding and Referencing (TIGER) standard format, file
related product.
An alternative standard format, the Digital line Graph (DLG), was
developed by the US Geological Survey.
GIS and Decision Making
There are countless applications of GIS. Some of them as follow.
The dispatch of emergency vehicles, transit management, facility; site
selection, and wildlife management
Popular applications include political campaign support, consumer
marketing and sales support, sales and territory analysis, site selection,
fleet management, route planning, disaster planning, and regularity
compliance,.
The success of GIS is highly depended on good information. GIS are
proving to be a significant tactical tool for identifying product riches by
geography, facilitating presentations, improving comprehension,
identifying logistical problems, and developing marketing strategies.
Emerging GIS Applications
The integration of GIS and global positioning satellites (GPS) will
transform the aviation and shipping industries.
It enables vehicles or aircraft equipped with a GPS receiver to pinpoint
their locations as the move.
Emerging applications of GPS include personal automobile mapping
systems, railroad car tracking and earth moving equipment tracking.
Object linking and embedding (OLE) will allow users to import maps
into any document.
Natural Language Processing: An Overview
Natural Language Processing (NLP) is an applied artificial intelligence
technology.
It refers to communicating with a computer in English or whatever
language you speak.
To understand a natural language inquiry, a computer must have
knowledge to analyze and interpret the input.
This knowledge may include linguistic knowledge abut words, domain
knowledge, common sense knowledge and even knowledge about the
users and their goals.
NLP must understand grammar and the definitions of words.
NLP is an attempt to allow computers to interpret normal statement
expressed in a natural human language, such as English or Japanese.
The process of speech recognition, in contrast, attempts to translate
the human voice into individual words and sentences understandable
by the computer.
Natural Language Processing : Methods
With NLP, the computer’s understanding of human statements may or
may not be translated into a program.
The most advanced fourth generation languages today use the early
results of NLP research, but their abilities are still quite limited
comported with the ultimate goals of NLP.
Currently two major techniques are used in NLP programs.
1. Key word search (Pattern matching)
2. Language processing (Syntactic and semantic analysis)
Key word analysis (Pattern Matching)
In the pattern matching process, the NLP program searches through an
input sentence looking for selected key words or phrases.
Once a key work is recognized, the program activates a specific
canned response.
Language Processing (Syntactic, semantic and pragmatic analysis)
The most obvious and straightforward approach to the problem is to
perform a detailed analysis of the syntax and semantics of an input
statement.
An NLP can determine the meaning of the user’s query through
question such as "Do you mean to say that.
The procedures : How language processing works
The five major elements are …
1) The Parser This is the key element in NLP
It is software that syntactically analyses the input
sentence.
Each word is identified & its part of speech clarified.
The parser then maps the words into a structure called a
parse tree.
The parse tree shows the meanings of all the works &
how they are assembled.
2) The Lexicon The parser needs a directory called the Lexicon.
The lexicon contains all of the words that the program is
capable of recognizing.
o The parser and the lexicon work together to pick apart a sentence and then
create a parse tree.
o Once a parse tree has been constructed, the system is ready for semantic
analysis to obtain further meaning.
o Semantic analysis is the function of the Understander block.
3) The Understander This works in conjunction with the knowledge base to
determine what the sentence means.
The Understander creates another data structure that
represents the meaning and understanding of the
sentence and stores it in memory.
4) The Generator The above data structure, called a generator, can be used
to initiate addition action.
In its simplest form, the generator feeds standard
presorted output responses to the user based on the
meaning extracted from the input.

5) The knowledge base
Application of NLP and Software
NLP programs have been applied in several areas. The most important
are as follows.
Interfaces to databases and other software Grammar analysis
Abstracting and summarizing text Composing letters
Knowledge elicitation and machine learning Speech understanding
Translation of a natural language to another
natural language
EX _ English to German
Translation of a computer language to
another computer language
EX _ Fortran to C, the Unix command
f2c

Graphical User Interface

2007-12-21T02:32:00.000-08:00

Graphical User Interface
In this mode objects are visually represented as icons or symbols, are
directly manipulated by the user.
Hybrid Modes
Interface modes can be combined to provide improved functionality
and quality.
The user can point the mouse or cursor at the icon and use a
command to move it.
Graphics
Graphics enable the presentation of information in a way that more
clearly conveys the meaning of data and permits user to visualize
relationships.
The value of charts and graphs in the communication of numeric data
has long been recognized.
This information can even be animated.
Graphics Software
The primary purpose of graphics software is to present visual images
of information on a computer monitor, a printer / plotter.
Graphics software can be a standalone package that allows managers
to create graphic output directly from databases or spreadsheets in a
no technical and user friendly way.
Representative graphic software includes Harvard Graphics, Power
Point, SAS Graph, Lotus/Freelane, Draw Perfect, and Tell-a-graph.
The role of computer graphics
Text plays a critical role in graphics.
Time series charts show the value of one or more variables over time.
Bar and Pie charts can be use to show total values.
Scatter diagrams show the relationship between two variables.
Maps can be two or three dimensional.
Layouts of rooms, buildings or shipping centers convey much
information in simple diagrams.
Hierarchy charts _ Organizational charts are widely used.
Sequence charts _ Flowcharts, show the necessary; sequence of
events and which activities can be done in parallel.
Motion graphics _ motion pictures and television, clearly will continue
to perform vital functions.
Desktop publishing systems _ have extensive graphic capabilities such
as transferring a picture into the computer.
Multimedia
Computerized systems employ several multimedia technologies as
presentation devices.
Multimedia refers to a pool of human machine communication media.
One class of multimedia is called hypermedia.
VRML – Virtual Reality Markup Language
Hypermedia
Hypermedia describes documents that could contain several types of
media, which allow information to be linked by association.
Hypermedia is used as a presentation tool used for knowledge and
data navigation.
Examples of commercial products include Hyper Card and Note Cards,
Hypermedia can contain several layers of information, such as…
A menu based natural
language interfaces
To provide a simple & transparent way for users to rum the
system and query it.
An object oriented
database
That permits concurrent access to its data structure and
operations.
A relational query
interface
That can efficiently support complex queries.
A hypermedia abstract
machine
That lets user link different types of information.
Media editors That provides way to view and edit text, graphics, images, and
voice.
A change
management vital
memory
To manage temporary versions, configurations, and
transformations of design entities.
Hypertext
Hypertext is an approach for handling text and graphic information that
allow the user to jump from a given topic, wherever they wish, to
related ideas.
Hypertext allows user to access information in a nonlinear fashion b
following sequence of thought.
It lets the reader control the level of details and the type of information
displayed.
It allows a quick search according to the reader’s interest.

Knowledge in Artificial Intelligence

2007-12-21T02:28:00.000-08:00

Genetic Algorithms
Genetic algorithms have been applied to many large scale
combinatorial mathematical programming problems such as large scale
scheduling problems and even to producing police sketches of
criminals.
Knowledge in Artificial Intelligence
As per Sowa, "Knowledge encompasses the implicit and explicit
restrictions placed upon objects, operations, and relationship along with
general and relationships along with general and specific heuristics and
inference procedures involved in the situation being modeled.
Knowledge is now recognized as a major organization resource. Data,
information, and knowledge can be classified by their degree of
abstraction and by their quantity.
Knowledge is the most abstract and exist in the smallest quantity.
Uses of Knowledge
It can use knowledge given to it b human experts. Such knowledge
consists of facts, concepts, theories, heuristic methods, procedures
and relationships.
The collection of knowledge related to a problem used in AI system is
organized together and it is called a knowledge base.
Once a knowledge base is built, AI techniques are used to give the
computer inference capability based on the facts and relationships
contained in the knowledge base.
Types of Knowledge based Decision support system
The knowledge component enables a wider range of decisions.
It extends the capabilities of computers well beyond based and model
based DSS.
Intelligent decision support system
Several models of intelligent DSS were developed over the years.
Active (Symbiotic) DSS
The DSS executes computations, presents data, and responds to
standard commands.
The DSS should be able to take initiative, or should be able to respond
to nonstandard requests and commands. This type of DSS is called
active or symbiotic DSS.
User Interface and Decision Visualization
The key to successful use of any DSS is the user interface.
The user interface is the hardware and software that facilitate
communication and interaction between the user and the computer.
User interface area, the subset of the field called human computer
interaction, which is the study of the people, computer technology and the
ways these interact.
The interface includes responses and involves an exchange of graphics,
acoustics, tactile and other means of communication.
Physical aspects of the user interface include…
Input Device _ Mouse, Microphone or keyboard
Output (Display) Device… Monitor, Printer or Speaker
The user formulates a response and takes an action.
The cyclic process shown consists of the following components.
Knowledge It is the information the user must have communicate with the
computer.
Dialog It is an observable series of interchanges or interactions
between the user and the computer.
Action Language This can take various forms, ranging from selecting an item from
the menu to answering a question, moving a display window or
typing command.
Input devices are used to execute actions.
Computer This interprets the user’s action, executes a task and generates
a display.
Presentation
Language
This is the information displayed to the user via output devices.
Such information can be shown as display menus, windows or
texts.
It can be static or dynamic, numeric or symbolic.
It can appear visually on the monitor, presented as voice or a
printout.
User reaction The user interprets the display, processes the content and plans
an action.
The following are the some of the important issues in building a users
interface. These issues are handled in user interface management system
(UIMS).
Choice of the input & output devices Information density
Screen design Use of icons and symbols
Human machine interaction sequences Information display format
Use of colors and shading
User Interface Management System (UIMS)
The UIMS also accommodates the action language that enables the
computer inputs and outputs in the form of dialing language or processes.
Interface Models / Styles
The combination of presentation and action language is called interface
mode.
The interface model determines how information is entered and
displayed.
Following are the different models.
1) Menu Interaction 6) Neural Language
2) Pull down menus 7) Graphical user interface
3) Command language 8) Hybrid modes
4) Question and Answers 9) Graphics
5) Form Interaction 10) Graphic software
Menu Interaction
In this mode the user selects an item from a list of possible choices for
the function to be performed.
A menu can have sub menus.
Example_ Menu such as file, edit, view, etc.
Pull down menus
A pull down menu is a submenu that appears as superimposed drop
down menu on the screen usually after an entry has been made in a
higher level menu.
Windows based software makes extensive use of pull down menus.
Command languages
In this the user enters a command such as run or plot.
Many commands are composed of verb-noun combination such as plot
scales.
Another way to simplify commands is to use macros.
Commands can also entered by voice.
Question & Answers
This mode begins with the computer asking the user a question.
The user answers the question with a phrase or a sentence or by
selecting an icon in the menu.
Expert systems are the best example for this type.
Form interaction
In this the user enters data or commands into designated space called
forms.
Natural Language
A human computer interaction that is similar to human dialog is called
natural language.

Artificial Intelligence (AI)

2007-12-21T02:23:00.000-08:00

Artificial Intelligence (AI)
AI concerned with two basic ideas.
First, it involves studying the thought processes of humans.
Second, it deals with representing those processes via machines (such as
computers and robots)
AI is behavior by a machine that, if performed by a human being, would be
called intelligent.
As per Rich and Knight, AI is the study of how to make computers do
things at which, at the moment, people are better.
As per Mark Fox of Carnegie-Mellon University, AI is basically a theory of
how the human mind works.
As per Winston and Predergast list 3 objectives of artificial intelligence.
o Make machines smarter – Primary goal
o Understand what intelligence is – The noble laureate purpose
o Make machines more useful – the entrepreneurial purpose
Several abilities are reconsidered signs of intelligence
Testing for intelligence
Turing Test
According to this test, a computer cold is considered to be smart only
when a human interviewer, conversing with both an unseen human being
and an unseen computer, could not determine which is which.
Symbolic Processing
They choose symbols to represent the problem concepts and apply
various strategies and rules to manipulate these concepts.
Some examples of symbols.
Product …….Defendant………0.8………..Chocolate
AI is the branch of computer science dealing primarily with symbolic, non
algorithmic methods of problem solving.
Two characteristics…….
1. Numeric versus symbolic
2. Algorithmic versus non algorithmic
Heuristics
Heuristics are the key element of AI.
Often heuristics are used to limit the search and focus on the most
promising areas.
Inference
AI is unique in that it makes inferences by using a pattern matching
approach.
Pattern matching
AI works with pattern matching methods that attempt to describe objects,
events, or processes in terms of their qualitative features and logical and
computational relationships.
Artificial Intelligence Versus Natural Intelligence
Artificial Intelligence Field
AI comes together in the area of logic, philosophy of language and
philosophy of mind.
Mutual interaction between electrical engineering and AI include image
processing, control theory, pattern recognition and robotics.
AI provides scientific foundation for several growing commercial
technologies.
The major areas are …
1) Expert Systems 6) Neural computing
2) Natural language processing 7) Automatic programming
3) Speech & voice understanding 8) Fuzzy logic
4) Robotics & sensory systems 9) Generic algorithms
5) Computer vision & Sense recognition 10) Intelligent agents
Expert System - EI
Es are computerized programs that attempt to imitate the reasoning
processes and knowledge of experts I solving the specific problems.
Natural Language Processing - NLP
Natural language technology gives computer users the ability to
communicate with the computer in their native language.
The field of NLP consists of two sub fields.
Speech and Voice understanding
Speech understanding is the recognition and understanding by a
computer of spoken language.
Robotics and Sensory System
Sensory systems such as vision systems, tactile systems and signal
processing system when combines with AI, defined a broad category of
systems generally called Robotics.
A robot is an electromechanical device that can be programmed to
perform manual tasks.
The intelligent robot allows it to interpret the collected information and
to respond and adapt to changes in its environment.
Robots combine sensory systems with mechanical motion to produce
machines of widely varying intelligence and abilities.
Computer vision and sense recognition
This has been defined as the addition of some form of computer
intelligence and decision making to digitize visual information received
from a machine sensor such as camera.
The combined information is then used to perform or control such
operations as robotic movement, conveyor speeds and production line
quality.
The basic objective of computer vision is to interpret scenarios rather
than generate pictures.
Neural computing
A neural network is a mathematical model of the way a brain functions.
Other applications of AI include automatic programming, fuzzy logic
genetic algorithms and intelligent agent.
Automatic programming
The goal of automatic programming is to create special programs that
act as intelligent tools to assist programmers and expedite each phase
of the programming process.
The ultimate aim of automatic programming is a computer system that
could develop programs by itself.
Fuzzy logic
This extends the notions of logic beyond simple true/false to allow for
partial or even continuous truths.

Architecture And Process

2007-12-21T02:20:00.000-08:00

Architecture And Process
Two common ones are two tier and three tier architectures.
Data from internal sources and external sources are extracted,
warehouse.
In two tier architecture, there is no multidimensional database or server.
Components of data warehousing
Large physical
database
This is an actual physical database into which all the data for
the data warehouse are gathered, along with the metadata
and the processing logic used to scrub, organize, package &
preprocess the data for end user access.
The logical data
warehouse
This contains all the metadata, business rules, and
processing logic required to scrub, organize, package &
preprocess the data.
It contains the information required to find and access the
actual data, wherever they actually reside.
Data mart
A data mart is a subset of the enterprise wide data
warehouse.
It performs the role of a departmental, regional or functional
data warehouse.
Decision support
systems and an
executive information
system
These are not data warehouses but application that uses the
data warehouse.
Suitability and Characteristics of data warehousing
Online Analytical Data Processing : Data Access and mining querying
and analysis
The latest development in this area is client server architecture.
The term OLAP refers to DSS & EIS computing done by end users in
online system.
In OLTP voluminous data are processed as soon as they are entered.
The OLAP is performed by the end users, where as the OLTP is done by
the IS professionals.
OLAP also enable to generate queries, requesting Adhoc reports,
conducting statistical analysis and building applications.
SQL is a non procedural and very user friendly language.
Data Mining
This refers to the process of knowledge discovery in databases,
knowledge extraction, data archeology etc.
All these are conducted automatically and allow quick discovery even by
the novice users.
Main objectives
Competitive Advantages
1) Marketing: Predicting which customer will respond to a mailing
or buy a particular product. Helps to classify the customer.
2) Banking : Forecasting levels of bad loans, credit card usage
3) Retailing and Sales 8) Government & defense
4) Manufacturing & production 9) Airlines
5) Brokerage & securities trading 10) Health care
6) Insurance 11) Broadcasting
7) Computer hardware &
software
Data Visualization
Data visualization refers to technologies that support visualization of
information.
It includes digital images, Geographic information systems, GUI,
multidimensional, tables and graphs, virtual reality and animation etc.
Data visualization is easy to implement when the necessary data are in a
data warehouse.
Intelligent Database and Data mining
AI technologies, especially expert systems (ES) and artificial neural
networks (ANN) can make the access and manipulation of complex
databases simpler.
The main types of tools used in intelligent data mining
Case based
reasoning
Using historical cases, this approach can be used to
recognize patterns
Neural computing It is a machine learning approach by which historical data
can be examined for pattern recognition.
This can be used to identify potential customers of a new
product, financial services and also in manufacturing.
Intelligent agents This is one of the promising issues in retrieving information
from the databases especially external ones.

The Methodology of Simulation

2007-12-21T02:16:00.000-08:00

The Methodology of Simulation
Simulation involves setting up a model of a real system and conducting
repetitive experiments on it.
1) Problem
definition
The real world problem is examined & classified.
2) Construction of
the simulation
model
This step involves the determination of the variables & their
relationships & the gathering of necessary data.
3) Testing and
validating the
model
The simulation model must properly represent the system
under study.
Testing and validation ensure this.
4) Design of the
experiments
Once the model has been proven valid, and experiment is
designed.
There are two important & conflicting objectives :
Accuracy & Cost
Best case and worst case scenarios
5) Conducting the
experiments
This involves issues ranging from random number generation
to presentation to presentation of the results.
6) Evaluating the
results
We determine the meaning of the results. In addition to
statistical tools, we may use sensitivity analyses.
7) Implementation The chances of implementation are better because manager
is usually more involved in the simulation process than with
other models.
Types of Simulation
1) Probabilistic
Simulation
One or more of the independent variables (Such as the
demand in an inventory problem) are probabilistic.
2) Discrete
Distributions
Involve a situation with a limited number of events (or
variables) than can take on only a finite number of values.
3) Continuous
Distributions
These are situations with unlimited numbers of possible
events that follow density functions such as the normal
distribution.
Probabilistic simulation is conducted with the aid of a
technique called Monte Carlo.
4) Time dependent
versus time
independent
simulation
Time independent refers to a situation in which it is not
important to know exactly when the event occurred.
5) Simulation
software
These include spreadsheet ad-ins.
6) Visual simulation The graphic display of computerized results, which may
include animation.
7) Object oriented
simulation
Some recent advances in the area of developing simulation
models using the object oriented approach.
Multidimensional Modeling
The original spreadsheets were two dimensional.
Later, with the introduction of windows, spreadsheet packages introduced
what thy called a 3-D approach.
Multidimensional modeling tools provide the solution.
A typical multidimensional tool such as CA-Masterpiece/200.
It has data manipulation and drags and drop capabilities through which
users can change the shape of the spreadsheets.
Financial and Planning Modeling
Definition and background of planning modeling
Financial planning models may have a very short planning horizon and
entail no more than a collection of accounting formulas for producing
proforma statements.
On the other hand, corporate planning models often include complex
quantitative and logical relationships amount a corporation’s financial,
marketing and production activities.
Educom’s financial planning model (DFPM)

Ready made Quantitative software Package
Some DSS tools offer several built in subroutines for constructing
quantitative models in areas such as statistics, financial analysis,
accounting, and management science.
These models can be called up by one command such as SQRT.
Many DSS tools can easily interface with powerful standard quantities
stand alone software package.

Data Management Warehousing Access & Visualization
Data & its management are the foundation on which DSS application are
constructed.
The centralized database of data warehouse collects data from the
different sauces and organizes them, so they are easily accessible by
DSS and EIS applications.
Organizations, private and public, are continuously collecting data,
information, and knowledge at an accelerated rate and storing them in
computerized systems.
The accessed data must be analyzed and presented to the users.
Data Warehousing

There is a need for specialized, localized hardware and software
solutions.
There is a need for a cost effective means of uniting those information
resources into a manageable business asset.
Organizations today have a mixture of older, centralized systems and
newer, distribute systems, a wide variety of technologies is provided by an
even larger number of vendors.
Data Warehousing
Data warehousing (or information warehousing) is a concept designed to
provide a solution to the data access problem.
The data warehouse combines various data sources into a single
resource for end user access.
End users can perform ad hoc queries, reporting analysis, and
visualization of the warehouse information.
There can be several data warehouses in once company.
Benefits
It should provide ready access to critical data, insulate operation
databases from ad hoc processing that can slow TPS systems, and
provide high level summary information as edge, provide competitive
advantage, enhance customer services and satisfaction, facilitate decision
making and help in streamlining business process.

Optimization via Mathematical programming

2007-12-21T02:13:00.000-08:00

Optimization via Mathematical programming
Linear programming (LP) is the best known technique in a family of
optimization tolls called mathematical programming.
It is used extensively in DSS.
Characteristics and Assumptions of LP programming
Linear programming
Every LP problem is composed of the following.
Decision variables Whose values are unknown and are searched for
An objective
function
A linear mathematical function that relates the decision variables
to the goal and measures goal attainment and is to be optimized
Objective function
coefficients
Unit profit or cost coefficients indicating the contribution to the
objective of one nit of a decision variable
Constraints Expressed in the form of linear inequalities or equalities that limit
resources, and/or requirements
These relate the variables through linear relationships
Capacities Which describe the upper and sometimes lower limit on the
constraints & variables
Input-Output
(technology)
coefficients
Which indicate resource utilization for a decision variable
It is easy to interface other optimization software with Excel, database
management system and similar tools.
Heuristic Programming
The determination of optimal solutions to some complex decision
problems could involve a prohibitive amount of time & cost, or may even
be impossible.
The simulation approach may be lengthy, complex, and even inaccurate.
It is sometimes possible to arrive at satisfactory solutions more quickly &
less expensively by sing heuristics.
Heuristics are used primarily for solving ill-structured problems, thy can
also be used to provide satisfactory solutions to certain complex, well
structured problems.
The main difficulty in using heuristics is that they are not as general as
algorithms.
They can normally be used only for the specific situation for which they
were intended.
Another problem with heuristics is that they may obtain a poor solution.
Heuristic programming is the approach of using heuristics to arrive at
feasible and "good enough" solutions to some complex problems; "god
enough" is usually in the range of 90-99.9 % of the objective value of an
optimal solution.
When to use Heuristics, Advantages and limitations of Heuristics
Simulation
To simulate means to assume the appearance of the characteristics of
reality.
DSS deals with semi-structured or unstructured situations. It involves
complex reality, which may not be easily represented by optimization or
other models.
Simulation is one of the most commonly used tolls of DSS.
Major Characteristics
Simulation is a technique for conducting experiments.
Simulation is a descriptive rather than a normative tool.
Once the characteristics value is computed, the best among several
alternatives can be selected.
Simulation is usually called for only when a problem is too complex to be
treated by numerical optimization techniques.
Advantages
Simulation theory is fairly straightforward.
A great amount of time compression can be attained.
Simulation is descriptive rather than normative. This allows the manager
to ask what if questions.
An accurate simulation model requires an intimate knowledge of the
problem.
The simulation model is built for one particular problem and typically will
now solve any other problem. No generalized understanding is required of
the manager; every component in the model corresponds to a part of the
real life model.
Simulation can handle an extremely wide variety of problem types, such
as inventory and staffing, as well as higher managerial level functions
such as long range planning.
Simulation generally allows for inclusion of the real life complexities of
problems, simplifications are not necessary.
It is very easy to obtain a wide variety of performance measures directly
form the simulation.
Simulation is often the only modeling tool for DSS were problem can be
non-structured.
Limitations of Simulations

Modeling for DSS

2007-12-21T02:10:00.000-08:00

Modeling for DSS
A statistical model
(Regression
analysis)
Used for finding relationships among variables
This model is programmed in a DSS development software tool
A financial model Used for developing income statements & projecting financial
data for several years
This model is written with a special DSS financial planning
language called the interactive financial planning system (IFPS)
A linear
programming
Used to determine the best media selection.
It is solved using commercially available management science
software.
Some of the major issues involve din modeling are problem identification
and environmental analysis, variable identification, forecasting, the use of
multiple models, model categories, model management, and knowledgebased
modeling.
Identification of the problem and environment analysis
Identification of
the variables
It is the utmost importance.
Their relationships, influence diagrams, can be helpful in
this process.
Forecasting The results of a decision based on a model will usually
occur in the future.
Multiple Models DSS may include several models.
Categories of Models
DSS models are classified in seven groups.
Model
Management
Models like data must be managed.
Such management is done with the aid of model base
management software.
Knowledge base
modeling
DSS uses mostly quantitative models
Some knowledge is necessary to construct solvable models
Dynamic models
& static models
Dynamic models are used to evaluate scenarios that change
over time.
Example_ 5 year profit & loss projection.
Dynamic models are time dependent.
Example_ in determining how many checkout points should be
open in a supermarket.
They show trends & patterns over time.
They show average per period, moving averages, & comparative
analysis.
Example_ the transpiration model
Treating
certainty,
uncertainty, risk
When we build models, any of these conditions may occur.
Certainty models Everyone likes certainty models because they are easy to work
with and can yield optimal solutions.
Uncertainty
models
Managers attempt to avoid uncertainty as much as possible.
Risk Most major business decisions are made under assumed risk.
Several techniques can be used to deal with risk analysis.
Influence
Just as a flowchart can be use as a graphic representation of computer
program flow for design purposes, an influence diagram can be used to
map a model’s design.
The term influence refers to the dependency of a variable on the level of
another variable.
Rectangle A decision variable
Circle Uncontrollable or intermediate variable
Oval Result (Outcome) variable
Intermediate or final
The variables are connected with arrows, which indicate the direction of
the influence (relationship).
Arrows can be one way or two-way (Bi-directional), depending on the
direction of influence of a pair of variables.
Software
1 Analytica Analytica supports hierarchical diagrams, multidimensional
arrays, integrated documentation & parameter analysis
2 DPL This product provides a synthesis of influence diagrams and
decision trees
3 DS Lab
4 INDIA The solution process of this product transforms the original
problem into a new, reduced form in an attempt to determine
optimal policy
5 Precision
Tree
This creates influence diagrams & decision trees directly in
the Excel spreadsheet
Standard computer graphics software packages & computer aided
software engineering (CASE) packages can be used to create and
maintain influence diagram