ABCD

The Energy and Resources Institute

Review of personal financial records of

Dr. Rajendra K. Pachauri and other records of TERI
for the period 1 April 2008 to 31 December 2009

25 March 2010
This report contains 15 pages

© 2010 KPMG, an Indian Private Limited Company and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved
ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

Contents

1 Introduction 1
1.1 Background 1
1.2 Objectives 2
1.3 Work done 2

2 Executive Summary 3

3 Review of personal books of account of Dr Pachauri 4

4 Review of positions held by Dr. Pachauri other than at TERI 6

5 Review of books of account of TERI 11

6 Restrictions and Limitations 13

6.1 Limitations 13
6.2 Restrictions 13

© 2010 KPMG. All rights reserved.

 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

1 Introduction

1.1 Background
1.1.1 The Energy and Resources Institute (‘TERI’ or ‘the Institute’), a non profit organisation, was
established in 1974 and is involved in development of solutions to global problems in the fields
of energy, environment and current patterns of development, which are largely unsustainable.
The Institute has grown substantially over the years, particularly, since it launched its own
research activities and established a base in New Delhi, its registered headquarters in 19821.

1.1.2 We were informed by the management of TERI that the media has published reports alleging
misuse of position at various banks, universities and institutions by Dr. Rajendra K. Pachauri
(‘Dr. Pachauri’), Director General of TERI, to earn income for his personal benefit rather than
for the benefit of the Institute leading to a conflict of interest.

1.1.3 To illustrate, an extract of the article “Questions over business deals of UN climate change guru
Dr. Rajendra Pachauri” in the Sunday Telegraph dated 20 December 2009 is reproduced
below:

“The head of the UN’s climate change panel – Dr. Rajendra Pachauri – is accused of making a
fortune from his links with carbon trading companies…Dr Pachauri remains silent on, however,
is how much money he is paid for all these important posts, which must run into millions of
dollars. Not one of the bodies for which he works publishes his salary or fees, and this notably
includes the UN, which refuses to reveal how much we all pay him as one of its most senior
officials. As for TERI itself, Dr Pachauri’s main job for nearly 30 years, it is so coy about
money that it does not even publish its accounts…”

1.1.4 We were informed that TERI and Dr. Pachauri issued a press release and denied the above
allegations. An extract below of the article “The questions Dr. Pachauri still has to answer” in
the Sunday Telegraph dated 26 December 2009 is reproduced below:

“… Dr Pachauri does not deny that he holds all the positions referred to in our article, such as
giving advice on climate change to bodies ranging from major banks such as Credit Suisse and
Deutsche Bank to the Chicago Climate Change, the worlds largest dealer in buying and selling
the right to emit CO2. He and TERI insist, however, that all the money he receives for his
services, such as 100,000 euros from Deutsche Bank and $ 80,000 from Toyota Motors are paid
not to him personally but to his institute (and that he receives
no fee from the Chicago Climate Exchange)...”

1.1.5 TERI requested KPMG to conduct an independent review of personal financial records of Dr.
Pachauri and other records of TERI to confirm if there is any evidence that suggests that Dr.
Pachauri misused his position for personal benefit as alleged.

1
Source: TERI website

© 2010 KPMG. All rights reserved.

1
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

1.1.6 The review was performed in accordance with the terms of our engagement letter dated 12
February 2010.

1.2 Objectives
1.2.1 The main objectives of this engagement were to determine whether:

• there were any unexplained receipts and disbursals in the personal books of account of Dr.
Pachauri; and

• the honorariums related to Dr. Pachauri’s advisory services to various organisations were
actually received and recorded in TERI’s books of account. Further, these honorariums
have not been reimbursed to Dr. Pachauri by TERI.

1.3 Work done

1.3.1 KPMG carried out the following work procedures pertaining to the period 1 April 2008 till 31
December 2009:

• Reviewed the Contracts / Letters / Emails of various organisations / institutions to which Dr.
Pachauri provides advisory services or holds honorary positions and related remuneration
entitlements, as provided by TERI and Dr. Pachauri.

• Reviewed personal bank account, income tax returns and other books of account maintained
by Dr. Pachauri, as provided by him and his tax counsel, Mr. Ashok Khurana (M/s A.K.
Khurana & Associates, Chartered Accountants)

• Reviewed specific ledger accounts in the books of account of TERI where expenses and
reimbursements pertaining to Dr Pachauri have been recorded and selected transactions on a
sample basis to verify if they were adequately supported by underlying documents.

• Reviewed books of account of TERI to verify if honorariums related to Dr. Pachauri’s

advisory services to various organisations are received by TERI.

• Conducted discussions with Mr. Ashok Khurana and other employees of TERI as
considered necessary.

© 2010 KPMG. All rights reserved.

2
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

2 Executive Summary
2.1.1 Based on a review of personal financial records of Dr. Pachauri and other records of TERI
provided to us for the period 1 April 2008 to 31 December 2009, we did not come across any
evidence that either suggests any unexplained receipts and disbursals in Dr. Pachauri’s personal
books of account or inappropriate recording of expenses/incomes pertaining to Dr. Pachauri’s
advisory services in the books of account of TERI. No evidence was found that indicated
personal fiduciary benefits accruing to Dr. Pachauri from his various advisory roles that would
have led to a conflict of interest.

2.1.2 The financial emoluments received by Dr. Pachauri appeared to be consistent with the terms of
his employment with TERI and terms stated in contracts with various organisations to which
advisory services have been provided. It was also noted that receipts from various organisations
such as companies, universities and other institutions with respect to Dr. Pachauri’s advisory
services were accounted for in TERI’s records as an income.

The executive summary is not intended to be all inclusive. It should be read in conjunction
with the main report and not as a substitute thereof.

© 2010 KPMG. All rights reserved.

3
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

3 Review of personal books of account of Dr Pachauri

3.1.1 We were informed that Dr. Pachauri’s personal books of account are maintained by M/s A.K.
Khurana & Associates, Chartered Accountants and we were provided with copies of these
records by Mr. Ashok Khurana (Partner) for the purposes of our review.

Review of personal bank accounts

3.1.2 We were informed that Dr. Pachauri holds personal savings accounts with the following two
banks:

• State Bank of Hyderabad (‘SBH’)

• Central Bank of India (‘CBI’)

We were informed that Dr. Pachauri does not hold or operate any other bank accounts other
than those mentioned above.

3.1.3 Dr. Pachauri primarily receives salary from TERI in the SBH account. We reviewed the
contract of employment of Dr. Pachauri with TERI and the monthly pay slips provided to us. It
was noted that the amount received by him on account of salary correlated with these records.

3.1.4 Apart from the above, other primary receipts appearing in his account with SBH are
summarised below. It was noted that the maximum value of these receipts on an individual
basis did not exceed INR 100,000. These receipts have been declared to income tax authorities
as a part of personal income of Dr. Pachauri.

• Sitting fees for attending Board Meetings as a Director in Oil and Natural Gas Commission
and National Thermal Power Corporation – Individual maximum value of INR 20,000.

• Honorariums of nominal values (including income for writing articles in newspapers,

appearances on television and delivering lectures at Universities) –Individual maximum
value of INR 35,880.

• Income from royalty and awards bestowed on him – Individual maximum value of INR
100,000.

• Interest on saving bank deposits

3.1.5 It was noted that Dr. Pachauri receives dividends on his personal investments in both the bank
accounts.

Income tax returns

3.1.6 It was noted that Dr. Pachauri has duly filed his income tax return for the Financial Year 2008-
2009 on 30 July 2009.

© 2010 KPMG. All rights reserved.

4
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

3.1.7 During the review, we noted that income tax return of Dr. Pachauri for the Financial Year 2005-
06 was randomly selected for scrutiny through Computer Assisted Scrutiny System (CASS) on
the basis of notice of assessment under Section 143(3) of the Indian Income Tax Act, 1961. The
notice of information served upon Dr. Pachauri was duly furnished by him and the returned
income was accepted by the tax authorities under Section 143(3) with a NIL notice of demand
by them.

© 2010 KPMG. All rights reserved.

5
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

4 Review of positions held by Dr. Pachauri other than at TERI

Positions with financial emoluments

4.1.1 We reviewed the list of positions held by Dr. Pachauri with various other organisations such as
companies, universities and other institutions (as provided by TERI) for which he was entitled
to financial emoluments.

4.1.2 It was noted that receipts from these organisations were directly recorded in the books of
account of TERI during the period 1 April 2008 to 31 December 2009 (‘2008-09’). We also did
not come across any evidence that suggested that these were further reimbursed to Dr. Pachauri
by TERI. Details of such receipts have been summarised in the table below:
Amount received
Financial entitlement as per by TERI during 1
S.No. Position Organisation contract / other April 2008-31
correspondences December 2009
(in INR millions)
Yale Climate and Energy US$ 12,500 per month for July
Director and
Institute and August 2009
Professor,
1 Yale School of Forestry 3.28
Sustainable
and Environment Studies, US$ 11,250 from September
Development
USA 2009 onwards
Distinguished Ritsumeikan University, JPY 2.4 million - Annual
2 1.20
Professor Japan remuneration
Member - Honorarium payable - Euro
3 Advisory Board of Deutsche Bank AG 50,000 per annum payable on a 6.65
Deutsche Bank semi-annual basis
ADB’s Advisory Group on
Meeting fees and travel
4 Chairman Climate Change and 0.21
reimbursement
Sustainable Development
Veolia Institute’s
Foresight Committee, The
5 Member Euro 12,000 for each meeting 0.84
Institut Veolia
Environnement, France
US$ 45,000 for each meeting
Board of the Credit Suisse
6 Member 1.19
Research Institute, Zurich US$ 60,000 for one speaking or
other engagement.
Leadership Group on
7 Member Water Security, Asia Video conferencing charges 0.16
Society, USA
US$ 10,000 retention fees per
International Advisory annum.
8 Adviser Board, Toyota Motor 1.15
Corporation, Japan, US$ 15,000 attendance fees for
IAB meeting per annum
Euro 1,200 for honorarium plus
9 Member EDF Panel 0.32
travel reimbursement
Premier Schools
10 Patron US$ 60,000 per annum 2.64
International LLC (PSI)

© 2010 KPMG. All rights reserved.

6
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

Amount received
Financial entitlement as per by TERI during 1
S.No. Position Organisation contract / other April 2008-31
correspondences December 2009
(in INR millions)
The New York
Academy of Sciences
11 Member $ 25,000 per annum 0.02
International Board,
New York
Total 17.66

Total amount received by TERI on account of Dr Pachauri’s advisory services to various

organisations during the above period aggregates to INR 17.66 million. It may be noted that
TERI’s annual income as per the audited income and expenditure account for the 12 months
period ending March 31, 2009 was INR 801.03 million.

4.1.3 During the review of personal books of account of Dr. Pachauri, certain instances were noted
where travel reimbursements pertaining to Dr. Pachauri’s advisory services were credited
directly by various organisations in his SBH bank account. However, these amounts were
subsequently transferred by Dr. Pachauri to TERI as per details given below:

Amount Date on which amount

Date Description
(in INR) was paid to TERI

Travel reimbursement from UNECA for visit to

1-Aug-08 72,292 31-Oct-08
Addis during the period 31-03-08 to 2-4-2008

Travel Reimbursement received from UNIDO

22-Aug-08 152,601 31-Oct-08
for visit to Vienna during the period 14-07-2008

Travel Reimbursement in respect to travel to

18-Sep-08 297,746 16-Feb-09
New York during 28-30 June 2008

Travel Reimbursement in respect to travel to

6-Oct-08 212,825 16-Feb-09
Washington during 1 July-31 August 2008

Travel Reimbursement for Bhabha Atomic

10-Oct-08 44,571 31-Oct-08
Research Centre to Mumbai on 25-08-2008

Reimbursement of travel to Amman, Jordan to

29-May-09 attend sustainable development in the Middle 114,986 4-Jul-09
East

Reimbursement of travel to Kolkata to attend

17-Jun-09 42,121 4-Jul-09
Environment partnership summit 2009

21-Dec-09 Reimbursements for travel to Mexico 596,065 31-Dec-09

© 2010 KPMG. All rights reserved.

7
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

4.1.4 Further, it was also noted that Dr. Pachauri has transferred following award/honorarium
received by him to TERI:

Amount Date on which amount

Date Description
(in INR) was paid to TERI

Reimbursements from Environment partnership

18-Feb-09 200,000 9-Mar-09
Summit for Lifetime award
Honorarium received for visit to Dhaka dated 1
24-Feb-09 24,596 31-Mar-09
Nov 2008

4.1.5 During our review it was noted that no amounts have been claimed or received yet by TERI
with respect to Dr. Pachauri’s advisory services at the following organisations. It was confirmed
that there are no receipts pertaining to these positions in his personal books of account as well.
Financial entitlement as per contract /
S.No. Position Organisation
other correspondences
Professor and Chair in Universiti Tenaga Nasional
1 RM 25,000 per visit
Energy Economics (UNITEN), Malaysia
Singapore’s first
International Advisory
2 Member Singapore $ 10,000
Panel (IAP) on Energy,
Government of Singapore
International Risk
Governance Council CHF 480 per working day plus travel
3 Member of the Board
(IRGC), Geneva, reimbursement
Switzerland

Honorary positions without financial emoluments

4.1.6 We were informed that Dr Pachauri also holds honorary positions at the following organisations
from which he does not receive any financial emoluments except reimbursements for expenses
such as travel etc. This was confirmed during the review of terms of contracts/emails/other
correspondences between these organisations and TERI/Dr. Pachauri.
S.No. Position Organisation
Intergovernmental Panel on Climate Change
1 Chairman
(IPCC)
2 Ambassador Global Observatory (GO), Geneva
Special Advisor to the Energy for All
3 Asian Development Bank (ADB)
Partnership
4 Strategic Advisor Pegasus Capital Advisors, L.P., New York
5 Chairman of the Advisory Board Chicago Climate Exchange, Chicago
Glitnir Globe – The Sustainable Future Fund,
6 Member of the Board
Iceland
Global Board of Advisors, Siderian Ventures,
7 Member
San Francisco, CA, USA
8 Member, Advisory Group Rockefeller Foundation, USA

© 2010 KPMG. All rights reserved.

8
ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

S.No. Position Organisation

9 Chancellor TERI University
KHUSHII (Kinship for Humanitarian, Social and
10 Patron
Holistic Intervention in India), New Delhi
The Darjeeling Himalayan Railway Heritage
11 Chairman
Foundation, Darjeeling
12 President Asian Energy Institute (AEI)
13 Member, Advisory Board Green Commandos, India
International Steering Committee, National
Climate Change Adaptation Research Facility
14 Member
(NCCARF) and the CSIRO Climate Adaptation
Flagship, Australia
Global Advisory Committee for Earth Day 2010,
15 Member
Earth Day Network, USA
Honorary Committee, The H. John Heinz III
16 Member Centre for Science, Economics and Environment,
USA
Member-MDP-International
17 The Earth Institute at Columbia University, USA
Advisory Board (IAB)
18 Member- External Advisory Board The University of British Columbia, Canada
World Innovation Foundation (WIF) Charity,
19 Honorary Member
Bern, Switzerland
Expert Committee, UGC-Swami Pranavananda
20 Member Saraswati Awards, University Grant
Commission, New Delhi

Summit’s Senior Advisory Group, The National

21 Member
Bureau of Asian Research (NBR), USA

The National Economic and Social Council

22 Member
(NESC), Kenya
23 Member Saltire Prize Challenge Committee, Edinburgh,
24 Honorary Member The Old Martinians Association UK
International Research Institute of Climate and
25 Member, Advisory Board
Society, New York
Indo-China Sustainable Infrastructure Fund, LP,
26 Chairman
Vietnam
Governing Board, UNESCO International
Science, Technology and Innovation Centre for
27 Member
South-South Cooperation (ISTIC), Kuala
Lumpur, Malaysia,
National Museum of Emerging Science and
28 Honorary Member
Innovation (Miraikan), Tokyo, Japan,
Economic Policy and Reforms Council, Chaired
29 Member by the Chief Minister of Government of
Rajasthan, India
Executive Council of the Doon University,
30 Member
Dehradun, Uttarakhand

© 2010 KPMG. All rights reserved.

9
ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

S.No. Position Organisation

Board Member of the Governing
31 Youth4Gandhi Foundation, India
Council
Member of the Jury for the award on
32 sustainable environment and climate JSW Foundation, India
change
Board of Advisors of the NIIT University, Delhi,
33 Member
India
High Powered Committee of Indian Council of
34 Chair
Medical Research, India
Advisory Panel of the Ocean Project, Zee
35 Member
Network & the Essel Group, Mumbai
Commonwealth Games Delhi 2010 Green
36 Patron
Council (CWG 2010 GC)
37 Chairman of the Governing Council National Agro Foundation (NAF)
The Institute for Global Environmental Strategies
38 Member, Board of Directors (IGES), Environment Agency, Government of
Japan,
39 Goodwill Ambassador UNIDO, Vienna , Austria

© 2010 KPMG. All rights reserved.

10
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

5 Review of books of account of TERI

5.1.1 We were informed that TERI uses an in house developed Oracle based Project Management
System (PMS) for managing and accounting for projects.

5.1.2 We were informed that all expenses and incomes pertaining to Dr. Pachauri’s projects are
usually recorded in following two sub ledger account codes:

• 2007 DG 11 – for the period 1 April 2007 to 31 March 2009

• 2009 DO 01 – for the period 1 April 2009 to 31 March 2010

5.1.3 We performed an analysis of the above mentioned account codes and reviewed transactions on a
sample basis. It was noted that transactions were appropriately recorded in the books of TERI
and were adequately supported by the underlying documents.

5.1.4 Certain instances were noted where reimbursements for travel expenses of family members of
Dr. Pachauri were recorded into TERI’s books of account. These transactions were recorded in
an appropriate manner in the books of TERI and no exceptions were noted. Details of such
transactions have been given below:

Expenses incurred and received by TERI

Voucher
Amount
Date Description number Remarks
(in INR)
and date
Expenses for tickets and local travel for
Reimbursement Dr. Pachauri and Dr. Saroj Pachauri (wife
received in respect of Dr. Pachauri) incurred by TERI for
of Dr. R K Pachauri attending the Award Ceremony of
BR-0231
23-Apr-08 and Dr. Saroj 67,524 Yashwant Rao Chavan Pratishthan,
23 Apr 08
Pachauri's travel to Mumbai (YRCP).
Mumbai during 12-
13 March 2008. This amount has been reimbursed directly
to TERI by YRCP.
Expenses for tickets and local travel for
Reimbursement
Dr. Pachauri, Dr. Saroj Pachauri and Dr.
received in respect
Ash Pachauri incurred by TERI for
of Dr. R K Pachauri,
attending the Global Indian of Year
Dr. Saroj Pachauri BR-2023
28-Oct-09 131,936 Award Ceremony by Conde Nast India
and Dr. Ash 28 Oct 09
Private Limited, Mumbai (CNIPL)
Pachauri's travel to
Mumbai on
This amount has been reimbursed directly
27.9.2009.
to TERI by CNIPL.

© 2010 KPMG. All rights reserved.

11
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

Expense incurred by Dr. Pachauri but received by TERI

Voucher
Amount
Date Description number Remarks
(in INR)
and date
Cost of travel for Dr. Saroj Pachauri was
incurred by Dr. Pachauri through his
personal account for attending the
presentation ceremony of Yale
Travel University’s Honorary Degree.
Reimbursement in
BR-3080
18-Sep-08 respect to travel to 280,336 However, reimbursement for full travel
11 Feb 09
New York during expense for both the persons was received
28-30 June 2008 by TERI from Yale University.

TERI paid back cost pertaining to Dr

Saroj Pachauri's travel to Dr Pachauri to
his personal account.

5.1.5 TERI has opened specific account codes for recording medical expenses, annuity payments and
water and electricity expenses of Dr. Pachauri. Expenses recorded in these accounts were noted
to be consistent with Dr. Pachauri’s terms of appointment and policies of TERI.

© 2010 KPMG. All rights reserved.

12
 ABCD
The Energy and Resources Institute
Review of personal financial records of
Dr. Rajendra K. Pachauri and other records of
TERI for the period 1 April 2008 to 31 December
25 March 2010

6 Restrictions and Limitations

6.1 Limitations
6.1.1 This report is based on information provided to us by TERI, Dr. Pachauri and his tax counsel,
Mr. Ashok Khurana (M/s A.K. Khurana & Associates, Chartered Accountants). Work done by
us was as considered necessary at the given point in time. Third party evidence has not been
verified. We have relied on both oral and documentary evidence.

6.1.2 In accordance with its policy, KPMG advises that neither it nor any Partners or employee
undertakes responsibility arising in anyway whatsoever, to any person other than our client in
respect of the matters dealt in this report, including any errors or omission therein, arising
through negligence or otherwise, however caused.

6.1.3 Our work constituted limited review, and the scope of our work was significantly different from
that of an audit and cannot therefore be relied upon to provide the same level of assurance as an
audit.

6.2 Restrictions
6.2.1 Our reports and comments are confidential in nature and not intended for general circulation or
publication, nor are they to be reproduced or used for any purpose, in whole or in part, except as
set out in our engagement letter dated 12 February 2010. This report is exclusively for its
intended use for the purpose of the engagement and should not be used for any other purpose. It
is also not for general circulation or publication nor is it to be reproduced, either in part or in
full, for any other purpose without our prior written consent, except in circumstances in which it
is in accordance with any requirement of law or statute or if called for by any statutory or
regulatory authority. We disclaim all responsibility for any costs, damages, losses, liabilities,
expenses incurred by anyone as a result of circulation, publication, reproduction or use of our
reports contrary to the provisions of this paragraph. Should additional information or
documentation become available which impacts upon conclusions reached in our reports, we
reserve the right to amend our findings and reporting accordingly.

© 2010 KPMG. All rights reserved.

13