By E-mail etna Fax : 011-23011534 e ARE ASR eefraia Telephone : 011-23015201 S a Te, 45 E-mail dirte.dgaqa@gov.in joee sana ia TET, 110011 ir Webs soa doetonn oo Government of India Fea param aaa a a a fe safe Ministry of Defence, FIm@ [Please address all “ fu pees ies! cel ne cae. S z eronautical Quality Assurance oe “H’ Block, New Delhi-110011 Ref. No. : 1405/MISCIDGAQAVTech Coord Date: 0 Mar2018 AIIADG's AIIRDS/OIC of FES. Subject: Guidelines of the Ministry of Defence- Procedure for Penalties in Business Dealing with Entities. Reference is made to DDP (Vigilance) ID Note No. 119/Vig.1/2012/D(Vig)/DDP, dated 16 Mar 2018 along with a copy of ID Note No.31013/1/2017-D(Vig.) Pt.II dated 06 Mar 2018 (Copy enclosed). 2. You are requested to ensure compliance of the content mentioned in the Note under reference. oo (age Tan), Ho Feo ae Pree /aH0 FAO All Group Head at HQrs _: For same action as mentioned above. PPS to DG, AQA : For kind information, please PS to Addl DG, AQAMinistry of Defence Department of Defence Production D(Vigilance/DDP) Subject: Guidelines of the Minis f Defence ~ Prox r Penalties in Business Dealings with Entities. Reference is invited to MoD ID of even number dated 16.12.2016 vide which a copy of MoD ID No. 31013/1/2016-D(Vig)Vol.lI dated 21.11.2016 wherein Guidelines of the’ Ministry of Defence for Penalties in Business Dealings with Entities’ was circulated for compliance. 2. MoD vide their ID No. 31013/1/2017-D(Vig)Pt.II dated 06.03.2018 has issued clarification regarding the term ‘common_mani "copy of which enclosed herewith for reference and coniplianee=—————~_— Encl.: As above fei e (Shailesh Rana) Under Secretary (Vig./DDP) Tele: 2301 2581 J Dp! P, IS (LS)/DDP, MoD ID No. 119/Vig.1/2012/D(Vig)/DDP Dated: 16. Copy to:- DGOF & Chairman/OFB CMDs of AIIDPSUS | DG/DGQA, DG/DGAQA, Director/Dté. Of Standardisation, Director (P&C), JD/DEO, OSD/DOMW, Dy. Secy. (NS)/DDP CVOs of all DPSUs, CVO/OFB le \ avy — \ Wns Ne ON ah ae DL CeeorSt\ oeurbte eS et eee 5 -¢ CF wee a yCak 6 e —_, pd ce ELEC ZT OPMinistry of Defence D(Vigilance) Subject: Guidelines of the Ministry of Defence for Penalties in Business Dealings with Entities Reference is invited to Guidelines of the Ministry of Defence for Penalties in Business Dealings with Entities promulgated vide MoD 1D No.31013/1/2016-D(Vig.) Vol.Il dated 21.11.2016 2. Para B.3 of ibid guidelines provides that, “All firms/companies which come within the sphere of effective influence of the entities shall be treated as its allied firms. In determining this, the following factors may Qb-\__ be taken into consideration:- Seep (i) Whether the management is common or the majority interest in the management is held by the partners or directors of the entities. A (i) Majority shares are owned by the entity, their directoyg/ shareholders and by virtue of this it has a controlling voice.” Tslrsy9cwy, oe Were ‘The term ‘common management’ in the above para involves some vA) degree of ambiguity in interpretation. The issue has therefore, been d ( deliberated in consultation with Ministry of Corporate Affairs, Ministry of Law & Justice and the Ld. AG at 4. Accordingly, it is clarified that following criteria would be _& adopted for determining when the management of two or more ~ (\'companies/entities can be said to be common, for the purpose of ‘Clause B.3 (i) of the guidelines:- fR Goede (i) If the Managing Director of one body is also the Managing NS al eer! Director of the other body, (ii) if the majority of the directors of one body constitute or at any iN time within six months immediately preceding constituted, a k§) majority of the directors of the other body; wn 4), (ii) [not less than 1/3 of the total voting power with respect of any Joe) matter relating to each of the two bodies corporate is exercised or 9 controlled by the same individual or body corporate [3 402) spp : aed os RLS) & : NE jaoe (wv) If the holding company of one body corporate is under the same management as other body corporate within the meaning of the above situations; (\) If one or more directors of one body corporate while holding whether by themselves or together with their relatives, the majority of shares in that body corporate also hold, the majority of shares in the other body corporate 5. The above clarification is issued with the approval of RM and in consultation with Ministry of Law & Justice vide Dy. No. 287116/17 dated 16.10.2017. (Surya Prakash) Director (Vigilance) Telefax: 2301 2304 SA to RM ete (DP) Secretary (Defence Finance) VCOAS VCNS VCAS DG (CG) cisc DG (Acq.) AS (BM) AS (JN) JS &AM (LS) JS&AM (MS) — JS&AM (Air) JS(Trg.}&CVO JS (Army) JS (Navy) JS (Air) JS (Works) JS (PG/Coord.}&CAO MoD ID Nv.31013/1/2017-D (Vig) Pt.ll dated 06.03.2018 + Copy to: PS to RM PS to RRM SO to Defence Secretary Copy also to: Director (IT) with the request to get the above uploaded on the website of this Ministry.