CORPORATE GOVERNANCE REPORT
Company's philosophy on code of Corporate Governance
The Company follows the good Corporate Governance practices in all spheres of its activities and operations. The sound corporate governance is an integral part of the philosophy of the Company with an objective of value creation for its stakeholders. The management governs the affairs of the Company in a fair, honest, ethical, transparent and legal manner to ensure optimum utilization of available resources for maximizing benefits for all its stakeholders. The Company has well defined Codes of Conduct for its employees as well as its Directors. Both these codes are available on the website of the Company. The Company makes prompt, complete and accurate disclosures under the applicable laws about its financials, shareholding and other material information for knowledge of its stakeholders. The corporate structure, business and disclosure practices at the Company are in complete adherence to its Corporate Governance Philosophy. The Company believes in setting high standards of ethical values, transparency, integrity and a disciplined approach to achieve excellence in all its sphere of activities for value creation for its stakeholders.
A Report on compliance with the Code of Corporate Governance as prescribed by the Securities and Exchange Board of India and incorporated in Clause 49 of the Listing Agreement is given below.
I. BOARD OF DIRECTORS -
Constitution and Composition
The Board of Directors of your Company as on 31st March, 2014 comprises of ten directors and the composition of the Board is in accordance with the requirements of Clause 49 of the Listing Agreement. All Directors have extensive experience, knowledge and expertise in their respective functional areas.
The Company has a Non-Executive Chairman and the number of Non-Executive Independent Directors comprises of more than fifty percent of the total number of Directors as on 31st March, 2014. The Managing Director along with the Senior Management Personnel of the Company, manage the day-to-day affairs of the Company. The Managing Director functions under the overall supervision and control of the Board.
The Chairman of the Company, though professional Director in his own individual capacity, belong to the promoter group of the holding company Mahindra & Mahindra Limited (M&M]. Mr. Hemant Luthra, Non-Executive Director of the Company, is in the whole time employment of M&M, and draws remuneration from it. Professional fees of Rs. 33,43,225/- for the year 2013-2014, has been paid to Khaitan & Co., Advocates & Solicitors, in which Mr. Nikhilesh Panchal, Non-Executive Independent Director is a partner.
Mr. Harsh Kumar, Non-Executive Director of the Company, is the Managing Director of Mahindra Intertrade Limited, a subsidiary of M&M and he draws remuneration from it.
Apart from the above and the reimbursement of expenses incurred in the discharge of their duties and the remuneration that these Directors would be entitled to under the Companies Act, 1956 or the Companies Act, 2013 as Non-Executive Directors, none of the Directors and Independent Directors, have any other material pecuniary relationship or transaction with the Company, its Promoters, its Directors, its Senior Management, its holding Company, subsidiaries and associate which, in their judgment, would affect their independence. The Independent Directors are not related to Promoters or senior management of the Company. The Directors of the Company are not inter-se related to each other.
The Senior Management have made disclosures to the Board confirming that there are no material, financial and/or commercial transactions between them and the Company which could have potential conflict of interest with the Company at large.
Composition of Board
The total strength of the Board as on 31st March, 2014 is Ten Directors comprising of a Non-Executive Chairman, Managing Director, Two Non-Independent Non-Executive Directors and Six Independent Non-Executive Directors.
During the year under review, Mr. Keshub Mahindra, resigned as the Director and the Chairman of the Board with effect from the conclusion of the Board meeting dated 29th October, 2013. All Directors including Independent Directors are professionals in their respective fields with expertise and experience in general corporate management, finance, banking and other allied fields.
The names and categories of Directors, the number of Directorships and Committee positions held by them in the Companies are given below. None of the Directors on the Board is a Member of more than 10 Committees and Chairman of more than 5 Committees (as specified in Clause 49 of the Listing Agreement], across all the companies in which he is a Director.
B. Board Procedure
A detailed Agenda folder is sent to each Director in advance of Board and Committee Meetings. To enable the Board to discharge its responsibilities effectively, the Managing Director briefs the Board at every Meeting on the overall performance of the Company, followed by presentations by other Senior Executives of the Company. A detailed functional report is also placed at Board Meetings. The Board also inter alia reviews strategy and business plans, annual operating and capital expenditure budgets, investment and exposure limits, compliance reports of all laws applicable to the Company, as well as steps taken by the Company to rectify instances of non-compliances, if any, review of major legal issues, minutes of the Board Meetings of your Company's unlisted subsidiary company, adoption of quarterly /half-yearly /annual results, significant labour issues, transactions pertaining to purchase /disposal of property, major accounting provisions and write-offs, corporate restructuring, Minutes of Meetings of the Audit and other Committees of the Board, information on recruitment of Officers just below the Board level, including the Company Secretary/ Compliance Officer.
C. Number of Board Meetings, attendance record of the Directors at Meetings of the Board and at the last Annual General Meeting.
Six Meetings of Board of Directors were held during the year 1st April, 2013 to 31st March, 2014 on the following dates:
Directors seeking appointment/re-appointment
Mr. Anand Mahindra and Mr. Uday Gupta, retire by rotation and, being eligible, have offered themselves for re-appointment.
During the year Mr. Mukesh Kumar Gupta was appointed as an additional director of the Company. His appointment, as Directors liable to retire by rotation, is proposed at the forthcoming annual general meeting. Mr. Mukesh Kumar Gupta holds the office of director upto the date of the forthcoming Annual General Meeting. A notice has been received from him proposing his candidature for the office of Director at the ensuing Annual General Meeting.
Mr. Uday Gupta was reappointed by the Board of Directors at its meeting held on 31st March, 2014, as the Managing Director of the Company for a period of 1(one] year with effect from 5th May, 2014, on the terms, as approved and recommended, by the Nomination & Remuneration Committee of the Board, subject to approval of the members of the Company and such other approvals as may be required. His re-appointment as the Managing Director is proposed for the approval of the members at the forthcoming Annual General Meeting.
The Companies Act, 2013 provides appointment of Independent Directors. Further in terms of Section 152 (6] of the Companies Act 2013, independent directors are not are liable to retire by rotation, and pursuant to section 149 they can hold office for not more than two consecutive terms of five years each. In view of the above provisions, Mr. R. R. Krishnan, Mr. Manojkumar Maheshwari, Mr. Sanjiv Kapoor, Mr. Daljit Mirchandani directors, are proposed to be appointed as an independent Director, under the provisions of the Companies Act, 2013, for a fixed period of 1 year with effect from the date of forthcoming Annual General Meeting. Further, Mr. Nikhilesh Panchal, Independent Director, whose period of office was liable to determination by retirement of directors by rotation under the provisions of the companies Act, 1956 and whose term expires at this Annual General Meeting is proposed to be appointed for a fixed term of 1 (one] year as an independent director, with effect from the date of forthcoming Annual General Meeting. Brief resume of the directors seeking re-appointment/ appointment are presented below:
Mr. Anand Mahindra (DIN 00004695)
Mr. Anand G. Mahindra, Chairman of the Company, graduated with Honors (Magna cum laude] from Harvard College, Cambridge, Massachusetts, in 1977. In 1981 he secured an MBA degree from the Harvard Business School, Boston, Massachusetts. He returned to India that year and joined Mahindra Ugine Steel Company Ltd (MUSCO], the country's foremost producer of specialty steels, as Executive Assistant to the Finance Director. In 1989 he was appointed President and Deputy Managing Director of the company.
During his stint at MUSCO, he initiated the Mahindra Group's diversification into the new business areas of real estate development and hospitality management.
In the summer of 1991, he was appointed Deputy Managing Director of Mahindra & Mahindra Ltd., the country's dominant producer of off-road vehicles and agricultural tractors. He initiated a comprehensive change programme in Mahindra & Mahindra Ltd. to make the company an efficient and aggressive competitor in the new liberalized economic environment in India.
In April 1997, he was appointed Managing Director of Mahindra & Mahindra Ltd, and in January 2003 given the additional responsibility of Vice Chairman. On 9th August 2012, he was appointed Chairman and Managing Director of Mahindra & Mahindra Ltd.
Today, the Mahindra Group is a US $ 16.7 billion organization, and one of India's top 10 industrial houses. Mahindra has evolved into a socially and environmentally responsible global federation of companies with a leading presence in each sector in which it is present.
Mahindra Group is present across the automotive spectrum - two-wheelers, three-wheelers, commercial vehicles, SUVs, MPVs to sedans, tractors, and even powerboats and aircrafts. In addition, the Group's diversified nature of business spans many frontiers - automotive components, Finance, Insurance, IT, Retail, Real Estate, Hospitality, Logistics, After-Market.
During Mr. Anand Mahindra's tenure, Mahindra Group has also grown inorganically, seizing opportunities across the globe. Recent acquisitions include Ssangyong Motors, Reva Electric Car Company, Satyam Computer Services, Aerostaff Australia, Gippsland Aeronautics among others.
Mr. Anand Mahindra is the co-founder of the Harvard Business School Association of India, an association dedicated to the promotion of professional management in India.
He was a co-promoter of Kotak Mahindra Finance Ltd., which in 2003 was converted into a bank. Kotak Mahindra is one of the foremost private sector banks today.
As a leading industry figure, he has served as President of the Confederation of Indian Industry in 2003-04 and has also been President of the Automotive Research Association of India (ARAI]. He also served on the Boards of the National Stock Exchange of India and the National Council of Applied Economic Research, and as a member of the Council of Scientific & Industrial Research.
Mr. Anand Mahindra continues to receive several honours, a few of which are:
• 'Knight of the Order of Merit' by the President of the French Republic.
• Rajiv Gandhi Award 2004 for outstanding contribution in the business field
• 2005 Leadership Award from the American India Foundation for his, and the Mahindra Group's commitment to corporate social responsibility.
• CNBC Asia Business Leader Award for the year 2006.
• The Most Inspiring Corporate Leader of the Year 2007 from NDTV Profit.
• Business Man of the Year 2007 from Business India.
• Harvard Business School Alumni Achievement Award 2008.
• National Statesman for Excellence in Business Practices - Qimpro Platinum Standard 2008 Award by Qimpro Foundation.
• CNBC TV18 Outstanding Business Leader of the Year 2009
• Business Leader of the Year 2009 by Economic Times
• Ernst & Young Entrepreneur of the Year India award for 2009
• Indian of the Year award 2009 by NDTV
• IMC Juran Quality Medal 2010 by IMC Ramkrishna Bajaj National Quality Award Trust
• Featured in Asia's 25 most powerful business people of 2011 by Fortune magazine
• Lloyds Banking Group Business Leader of the Year Award at The Asian Awards 2011
• JRD Tata Corporate Leadership Award 2011 from the All India Management Association
• Global Leadership Award June 2012 by the US-India Business Council
• Business Courage Award 2012 by Asia Business Leadership Forum
• Best Transformational Leader Award 2012 by the Asian Centre For Corporate Governance & Sustainability
• Business Leader of the Year 2012 by NDTV
• 'Special Recognition for Creating a True Global Indian MNC' at India's Best Market Analyst Award 2013 by Zee Business
• Forbes India Leadership Awards 2013 'Entrepreneur for the Year'
• Sustainable Development Leadership Award 2014 from The Energy and Resources Institute (TERI)
Mr. Anand Mahindra serves on the following Boards of other companies:
1. Mahindra & Mahindra Limited,
2. Tech Mahindra Ltd.,
3. Mahindra First Choice Wheels Ltd.,
4. Mahindra Two Wheelers Ltd.
5. Mahindra Holdings Ltd.,
6. Araku Originals Ltd.
7. Prudential Management & Services Pvt. Ltd.
8. Naandi Community Water Services Pvt. Ltd.
9. Tech Mahindra Foundation.
10. Avion Aerosols Pvt. Ltd.,
11. Prana Holdings Inc.,
12. US-India Business Council
Mr. Uday Gupta (DIN 03514282)
Mr. Uday Gupta, 55 years, Bachelors of Engineering with 1st class honors, Jadavpur University and Master of Technology from IIT - Madras, (Chennai) where he was the recipient of A Grade Merit Award.
Mr. Uday Gupta has rich and vast experience in the field of manufacturing sector particularly metal and alloy industry. Mr. Uday Gupta was appointed as the CEO of the erstwhile Steel Division of the Company in the year 2008. As the CEO of Steel Division, Mr. Uday Gupta has taken various initiatives to streamline the operations and infuse technological expertise for enhancing the overall working of the Divisions. Prior his appointment as the CEO (Steel), Mr. Uday Gupta was Executive Director of First Aluminum Nigeria Plc Group, the Company listed on the in Nigeria Stock Exchange. There Mr. Uday Gupta was a member of the Audit Committee of the Board and also heading the Profit Centre of Rolling Mill & Coating Division.
Mr. Uday Gupta has long association with Indian Aluminum Company Ltd., where he has worked in various capacities and has certain major achievements to his credit as listed below;
• Strategy Implementation for growing revenue from USD 53
million in 2006 to USD 100 million in 2009 by product - market stretch - installation of a new colour coating line (with Chinese soft credit) in January 2007.
• Paint tie-up with BASF for superior technology, flexibility of colours to customers in terms of range & delivery - stay ahead of the competition and strengthen brand. (2002 - 2006)
• Establish an operating JV for value added trading in the Manufacturing & Oil and Gas sectors. This germinated a separate SBU within First Aluminum.
• Increasing the customer base by way of increasing delivered value and maintaining customer relationship in Nigeria to market 12,000 TPA in 2006 from 6,000 TPA in 1998.
• Selectively upgrade plant & machinery of 60s vintage with state of the art technology for volume enhancement, quality upgrade and increased customer satisfaction - in collaboration with VAI, UK - Project Cost - USD 10 million. This modernization was done to retain market share. This also included building of a 33 KV sub-station & gas generating plant to leverage the low cost of natural gas and thereby reduce fabrication cost. (2000 - 2003)
• Introduced 'Becoming Globally Competitive' concept of TQM (as was practiced by Ford & other companies) in First Aluminum Nigeria for overall process improvement across the value chain.
• Installation / Commissioning of a state of the art Aluminum Cold Rolling Mill in Indal, Belur at a project cost of USD 7 million. The project was done in consortium with SMS (Germany), ABB (Sweden, Germany & India) and L & T. The plant capacity of INDAL, Belur moved from 20,000 TPA to 40,000 TPA.
• Capital Expenditure Projects : Annealing Furnaces, Slitters, Cut to Lengths, Layout Changes of plant for increasing material handling efficiency (1982 - 1988), Product Development
Mr. Gupta has also taken various initiatives in his past employments significantly contributing to the growth of such organizations.
Mr. Uday Gupta is also the Managing Director of Mahindra Sanyo Special Steel Private Limited. He is a Member of Stakeholders Relationship Committee and Corporate Social Responsibility (CSR) Committee of the Company. Mr. Uday Gupta does not hold any shares in the Company.
Mr. Mukesh Kumar Gupta (DIN 06638754)
Mr. Mukesh Kumar Gupta, 52 years, holds degree of Bachelor of Science from University of Rajasthan and M.B.A. (HRM) from Sikkim Manipal University, Gangtok.
Mr. Mukesh Gupta joined Life Insurance Corporation of India in the year 1984 as a Direct Recruit Officer and thereafter was elevated to the next higher cadre. During his illustrious career he has held very prominent positions and has worked at the Corporate Office and in 4 Zones. Job rotated in February 1992 as a Branch Manager he has remained in Marketing for a phenomenal period of more than 20 years. His key postings include Marketing Manager of Bikaner DO and Sr. Divisional Manager of two important Divisions viz., Amritsar and Hyderabad. He was also Regional Manager (Bancassurance & Alternate Channels] in South Central Zone and Regional Manager (Mktg.] of Western Zone twice - Once in Mumbai and later in Ahmedabad. His penchant for Marketing surfaced significantly during his tenure in the Corporate Office as Chief (Marketing]. He was Principal, Zonal Training Centre, Agra before becoming the Director, Management Development Centre, LIC, Mumbai.
He has attended a training program of FALIA (Foundation of the Advancement of Life & Insurance around the world] and also some notable training programs at ISB-Hyderabad and NIA, Pune.
His Hobbies include reading and listening music.
Mr. Mukesh Gupta is a member of Nomination & Remuneration Committee of the Company.
Mr. Mukesh Gupta does not hold any shares in the Company.
Mr. Nikhilesh Panchal (DIN 00041080)
Mr. Nikhilesh Panchal, 46 years, holds masters degree in law and is practicing as an Advocate for more than 15 years. He is a Solicitor registered as Patent and Trademark Attorney. He is member of Bar Association of Maharashtra & Goa, Incorporated Law Society and the Supreme Court of England and Wales. He is a partner in M/s. Khaitan & Co. and M/s. Khaitan & Co. LLP.
Mr. Panchal has rich experience in acquisitions, takeover and mergers, foreign collaborations, joint ventures and technology transfers including connected procedures under Foreign Exchange Management Act (FEMA]; and Corporate Law, Capital Markets transactions including public offerings; international offerings by Indian companies Intellectual Property and related rights matters etc.
Mr. Nikhilesh Panchal holds Directorships of other Indian companies namely EPC Industrie Limited and Vayugrid Marketplace Services Private Limited.
March 2005 and was also the Managing Director of Mahindra Intertrade Ltd. and Mahindra Steel Service Center Ltd. (MSSCL]. Mr. R. R. Krishnan was responsible for the activities of the then Intertrade Division of Mahindra and Mahindra Limited (M&M], which subsequently became 'Mahindra Intertrade Ltd.' (MIL]. During his tenure he was responsible for setting up the facilities of MSSCL and the expansion thereof. MIL also expanded globally to set up a facility in UAE - Mahindra Middleeast Electrical Steel Service Centre -FZC. Mr. R.R. Krishnan carries with himself rich experience and expert knowledge of steel industry. Mr. Krishnan was a senior advisor in M&M.
Mr. Manojkumar Maheshwari (DIN 00012341)
Mr. Manoj Kumar Maheshwari is 56 years of age and is a second-generation entrepreneur with interests in the Information Technology, Marketing and Chemical industries. He is a graduate from the Bombay University with a major in Chemistry and has done his post graduation in Industrial Management. Mr. Maheshwari work experience encompasses the project management, production, marketing, financial and general management areas of medium sized companies.
He is also a Director of Mahindra CIE Automotive Ltd., Hamilton & Co. Ltd., RPG Life Sciences Ltd., Ador Welding Ltd., Metro Shoes Ltd., Ignite Education Pvt. Ltd., Maheshwari Investors Pvt. Ltd., R.J. Investments Pvt. Ltd., Quadrum Solutions Pvt. Ltd. As a director he brings a judicious mix of entrepreneurial and professional skills to the various Boards that he serves on.
Mr. Sanjiv Kapoor (DIN 00004005)
Mr. Sanjiv Kapoor is a Commerce Graduate and Fellow member of Institute of Chartered Accountant of India. He is the senior partner of M/s. S. K. Kapoor & Co., Chartered Accountants, one of the leading Chartered Accountancy firms. As the partner of the firm, he has conducted audits of number of large Corporates such as R.B.I., L.I.C., N.T.P.C., Indian Oil, U.T.I., Banks etc.
Mr. Kapoor was a Director of Mahindra & Mahindra Ltd., Ballarpur Industries Ltd., Indian Bank, Corporation Bank, UPSE Securities Ltd., Sahara Asset Management Co. (P) Ltd., Sahara India Life Insurance Co. Ltd and U. P. Stock Exchange Ltd. He was the president of Kanpur Chartered Accountants Society in the year 1988-89. He was also the Vice President of Upper India Chamber of Commerce.
At the present Mr. Kapoor is also Director on the Board of Mahindra Lifespace Developers Limited, Mahindra World City Developers Limited, Sahara India Medical Institute Ltd., HLL Life Care Limited, General Insurance Corporation of India and HLL Biotech Ltd.
Mr. Daljit Mirchandani (DIN 00022951)
Mr. Daljit Mirchandani was appointed as an Additional Director of the Company with effect from 27th October, 2010.
Mr. Daljit Mirchandani, born in Karachi on October 26th 1947, is a Graduate Engineer from Birla Institute of Technology.
Beginning his career in 1971 as Graduate Trainee Engineer, in 1992 he rose to the position of Executive Director in Kirloskar Oil Engines, the flagship company of the Kirloskar Group. Between 1992 and 1997, for the Kirloskar Group, he set up the first in a kind, Pig Iron plant with a capacity of 500 thousand ton integrated to a state -of- the-art Foundry with a capacity of 60 thousand tons per annum.
In 1998, he joined Ingersoll-Rand India as the Chairman and Managing Director and retired in 2008.
In 2005, he was the Chairman of the Karnataka State Council of the Confederation of Indian Industries (CII), and in 2007 was nominated by the CII to be the Chairman of the Task Force formed by the Ministry of Agriculture, to examine and recommend policy interventions and set technical standards for the formation of the Cold Chain Infrastructure in India for Fresh Fruits and Vegetables. Implementation of these recommendations has been initiated by the Ministry of Agriculture.
Presently, in partnership with the Sarva Shikhsha Abhayan, the flagship project of the Government of India, he is working on the development of a scalable interventions to bring the joy of learning and improve the quality of education to children enrolled in Government Aided schools in Rural Maharashtra.
He serves on the advisory and statutory Board of various Companies in the space of Bio Fuels, Infrastructure Development, Infrastructure Finance, Forgings and a MNC.
Mr. Daljit Mirchandani holds Directorships of other Indian companies namely Mahindra CIE Automotive Limited and Mahindra Sanyo Special Steel Private Limited.
E. Codes of Conduct
The Board has laid down two separate Codes of Conduct- one for Board Members and the other for Senior Management and Employees of the Company. These Codes have been posted on the Company's website www.muscoindia.com All Board Members and Senior Management Personnel have affirmed compliance with these Codes of Conduct. A declaration signed by the Managing Director to this effect is enclosed at the end of this report.
F. CEO/CFO Certification
As required under clause 49 V of the Listing Agreement with Stock Exchanges, the Managing Director and Chief Finance Officer have certified to the Board on the financial statements, internal controls and frauds, if any, for the year ended 31st March, 2014.
II. REMUNERATION TO DIRECTORS
A. Remuneration Policy
While deciding on the remuneration of Directors, the Board and the Nomination & Remuneration Committee considers the performance of the Company, the current trends in the industry, the qualifications of the appointee(s), their experience, past performance and other relevant factors. The Board/Nomination
& Remuneration Committee regularly keeps track of the market trends in terms of compensation levels and practices in relevant industries through participation in structured surveys. This information is used to review the Company's remuneration policies from time to time.
B. Remuneration to Non-Executive Directors for the year ended 31st March, 2014.
Non-Executive Directors are paid a sitting fee of Rs. 7,500/-each for every Meeting of the Board and Audit Committee attended and a sitting fee of Rs. 3,750/- each is paid per Meeting in case of Investors' Grievance and Nomination & Remuneration Committee Meetings. The fees paid to Non Executive Directors for the year ended 31st March, 2014 along with their shareholdings are as under:
A total of 2,15,000 Stock Options have been granted to NonExecutive Directors under the Company's Stock Option Scheme on 18th August, 2006. The Stock options were granted at 15% discount to the average of high and low share prices of the Company on the Bombay Stock Exchange Limited during the 15 days preceding the date of grant of options. Details of these are given in the Statement attached to Annexure I of the Directors' Report. Apart from the above sitting fees, Non-Executive Directors received no remuneration during the year under review.
C. Remuneration paid/payable to the Managing Director
Remuneration paid/payable to Mr. Uday Gupta, Managing Director, for the year ended 31st March, 2014, was fixed by the Nomination & Remuneration Committee and approved by the Board of Directors and the shareholders within the limits as specified under the provisions of the Companies Act, 1956.
Following is the details of the remuneration paid/payable to Mr. Uday Gupta, as the Managing Directors during the year ended 31st March, 2014.
1. Mr. Uday Gupta was also appointed as the Managing Director, with effect from 4th August 2012, of Mahindra Sanyo Special Steel Private Limited, (the subsidiary of the Company upto 3rd October 2013] after complying with necessary statutory provisions in this respect, on the same terms and conditions of his appointment on which he was appointed as the Managing Director of the Company. Accordingly, he holds the position of Managing Director of the Company and MSSSPL and is entitled to remuneration from the Company or MSSSPL or from both the companies provided that his total remuneration in aggregate from the Company or MSSSPL or both shall not exceed the maximum remuneration as approved by the Company or MSSSPL.
2. Mr. Uday Gupta received entire remuneration for the financial year 2013-14 from MSSSPL and he has not drawn any remuneration from the Company. The performance pay, if any, for the financial year 2013-14 may be paid by MSSSPL.
3. The Company has not granted any stock option to Mr. Uday Gupta, Managing Director. Mr. Uday Gupta does not hold any shares in the Company.
4. The contract period of Mr. Uday Gupta as the Managing
Director is from 5th May, 2011 to 4th May 2014 and has been renewed for further 1 year upto 4th May, 2015, subject to approval of the shareholders of the Company at the ensuing Annual General Meeting of the Company. Notice period applicable to Mr. Uday Gupta is three months.
5. Performance pay is the only component of remuneration that is linked to the performance. All other components are fixed. The Nomination & Remuneration Committee, on the basis of detailed appraisal of the performance of the Company and the Managing Director recommends and approves the performance payment for any particular financial year.
III. RISK MANAGEMENT
The Company has a well defined framework of Risk management. The said framework comprises objectives of the Risk framework, the process through which risks (Internal as well as External Risks] to the Company and its businesses are identified and steps to be taken for mitigating such risks and threats to the Company. The frame work has proper procedure for reporting the risks to various levels of operating management depending on the criticality and sensitivity of risk to the business of the Company. The framework defines the roles of the risk control owners, risk committee, risk manager, audit committee and the Board. The operating management periodically places before the Board, a report on the Risk Assessment and management process followed by the Company and steps taken for mitigating the risks to the Company. The broad threats and risks to the businesses of the Company are discussed in the Management Discussion and Analysis chapter of this Annual Report.
IV. COMMITTEES OF THE BOARD OF DIRECTORS
A. Audit Committee
The Audit Committee of the Board of Directors comprises Mr. Sanjiv Kapoor (Chairman], Mr. R.R. Krishnan, Mr. Manoj Kumar Maheshwari, Mr. Daljit Mirchandani and Mr. Nikhilesh Panchal. All the members of the Committee are Independent-NonExecutive Directors. All the Members of the Committee have vast experience and knowledge of corporate affairs and financial management and possess strong accounting and financial management expertise. The Company Secretary acts as the Secretary to the Committee.
The terms of reference of this Committee are very wide. Besides having access to all the required information from within the Company, the Committee can obtain external professional advice whenever required. The Committee acts as a link between the Statutory and the Internal Auditors and the Board of Directors of the Company. It is authorized to select and establish accounting policies, review reports of the Statutory and the Internal Auditors and meet with them to discuss their findings, suggestions and other related matters. The Committee is empowered inter alia to review the remuneration payable to the Statutory Auditors and to recommend a change in the Auditors, if felt necessary. It is also empowered to review Financial Statements of the Company, Management Discussion & Analysis and Material individual transactions with related parties not in normal course of business or which are not on an arm's length basis. It is also empowered to review Financial Statements and investments of unlisted subsidiary company. All items listed in Clause 49 II D of the Listing Agreement are covered in the terms of reference. The Audit Committee has been granted powers as prescribed under Clause 49 II C.
The Meetings of the Audit Committee are also attended by the Managing Director, Chief Executive officer, Chief Finance Officer, the Statutory Auditors and the Internal Auditors.
B. Stakeholders Relationship Committee
The Investors' Grievance Committee was renamed as Stakeholders Relationship Committee. The said Committee has been re-constituted by the Board of Directors and it comprises of Mr. Hemant Luthra, Mr Harsh Kumar and Mr. Uday Gupta, as its members. Mr. Hemant Luthra is the Chairman of the Committee.
Mr. Ajay Kadhao the Company Secretary is the Compliance Officer of the Company.
The Committee meets as and when required, to deal with matters relating to transfers/transmissions of shares, issue of duplicate share certificates etc. and monitors redressal of complaints from shareholders relating to transfers, non-receipt of balance-sheet, non-receipt of dividends declared etc
The Board of Directors has authorized the Managing Director, the Chief Finance Officer and the Company Secretary to deal with the matters relating to approval of the transfer, transmission, replacement, consolidation of shares etc., to certain extent, in order to expedite the process of Share Transfer/Transmission. Normally the said officials approve once in 15 days the share transfers and other related matters, if any. The details of share transfer/transmission approved by above officials are properly recorded in the Stakeholders Relationship Committee meetings and are also placed before Board, for its record.
During the year, 6 Letters/complaints were received from the shareholders, all of which were attended to/resolved to date.
As on date, there were no pending share transfers pertaining to the year under review.
C. Nomination & Remuneration Committee.
The Remuneration Committee has been re-constituted by the Board of Directors as Nomination & Remuneration Committee. The Powers and duties of the Nomination & Remuneration Committee are well defined by the Board. The role of the Committee is to review the qualifications, positive attributes and independence of a director while recommending to the Board the appointment and/or remuneration of the directors. The Committee also review the market practices while deciding the remuneration packages applicable to the Managing Director/ Executive Director. During the course of its review, the Committee also decides on the Commission or Performance pay and/or other incentives payable, taking into account the individual's performance as well as that of the Company. The Nomination & Remuneration Committee is also empowered to decide on matters relating to Employee Stock Option Scheme of the Company.
The Nomination & Remuneration Committee comprises of Mr. Sanjiv Kapoor, Mr. Hemant Luthra, Mr. Mukesh Kumar Gupta, and Mr. Daljit Mirchandani. The Company Secretary acts as the Secretary to the Committee.
Mr. Sanjiv Kapoor is the Chairman of the Committee.
D. Corporate Social Responsibility (CSR) Committee:
During the year under review the Board of Directors of your Company has established Corporate Social Responsibility. The major role of this Committee is to formulate and recommend to the Board of Directors the CSR Policy and indicate the activities to be undertaken by the company to meet/contribute to objectives of the CSR policy. Accordingly the Committee has also framed its CSR policy and empower to monitor the same, it will provide its recommendations to the Board for the amount of expenditure to be incurred on activities specified in the policy.
The Corporate Social Responsibility (CSR] Committee of the Board of Directors comprises of Mr. R R Krishnan, Mr. Uday Gupta and Mr. Nikhilesh Panchal. The Company Secretary acts as the Secretary to the Committee.
Mr. R. R. Krishnan is chairman of the Committee.
V. Subsidiary Company
Clause 49 defines a "material non-listed Indian subsidiary" as an unlisted subsidiary, incorporated in India, whose turnover or net worth (i.e. paid up capital and free reserves] exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year.
Under this definition, as on 31st March, 2014 the Company did not have any material non-listed subsidiary. Mahindra Sanyo Special Steel Private Limited (MSSSPL], earlier known as Navyug Special Steel Private Limited, ceased to be the subsidiary of the Company with effect from 3rd October 2013. The Company has complied with the relevant provisions of clause 49 applicable in respect of the erstwhile material subsidiary MSSSPL till 3rd October, 2013 .
A. Disclosures relating to related party
During the financial year 2013-14, there were no materially significant transactions entered into between the Company and its Promoters, Directors or the Management, Subsidiaries or Relatives, etc. that may have potential conflict with the interests of the Company at large. Further, details of related party transactions are presented in Note no. "39" to the financial statements in the Annual Report.
B. Disclosure of Accounting Treatment in Preparation of Financial Statements
Your Company has followed the Guidelines of Accounting Standards as notified under the Companies (Accounting Standards] Rules, 2006 in preparation of its financial statements.
C. Code for Prevention of Insider Trading Practices
In compliance with SEBI's regulation on prohibition and prevention of insider trading, your Company has instituted a comprehensive Code of Conduct for prohibition and prevention of Insider Trading for its designated employees. The Code lays down Guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of the Company and cautioning them of the consequences of violations.
VII. SHAREHOLDER INFORMATION
I) Company Registration Details
The Company is registered in the State of Maharashtra, India. The Corporate Identity Number (CIN] allotted to the Company by the Ministry of Corporate Affairs (MCA] is L99999MH1962PLC012542.
II) Annual General Meeting
The Fifty first Annual General Meeting of the Company will be held on Tuesday, the 5th August, 2014 at 4.00 p.m. at Pama Thadhani Auditorium, Jai Hind College, A Road, Churchgate, Mumbai - 400 020 to transact such business as stated in the Notice of the Meeting.
III) Financial Year of the Company
The financial year covers the period 1st April to 31st March. Financial Reporting for:
— Quarter ending 30.06.2014 - by end of July, 2014.
— Half-year ending 30.09.2014 - by end of October, 2014.
— Quarter ending 31.12.2014 - by end of January, 2015.
— Year ending 31.03.2015 - by end of April, 2015. Note: The above dates are indicative.
IV) Date of Book Closure : Wednesday, the 30th July, 2014 to Tuesday, the 5th August, 2014 (both days inclusive].
V) Dividend Payment date : Not Applicable.
VI) Listing of Equity Shares on Stock Exchanges
1. Bombay Stock Exchange Limited.
2. National Stock Exchange of India Limited.
The Company has paid the Listing Fees to Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
VII) Stock Codes:
(a] Bombay Stock Exchange Limited (BSE] - 504823
(b] National Stock Exchange of India Ltd. (NSE] - MAHINDUGIN
(c] International Securities Identification Number (ISIN] in NSDL and CDSL for Equity Shares - INE 850A01010
VIII) Stock Market price data:
High/low prices during each month in last financial year on Bombay Stock Exchange Limited/National Stock Exchange of India Limited.
X) Registrar and Transfer Agents-
Sharepro Services (India) Private Limited. Unit: Mahindra Ugine Steel Co. Ltd. 13AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone Exchange Lane, Off Andheri Kurla Road, Sakinaka, Andheri (East), Mumbai - 400 072 Tel. No. 022-67720300/67720400 Fax No. 022-28591568/28508927 E-mail: firstname.lastname@example.org
XI) Share Transfer System
The Board of Directors has authorized the Managing Director, the Chief Finance Officer and the Company Secretary to deal jointly with all matters relating to approval of the transfer, transmission, replacement, consolidation of shares etc., in order to expedite the process of Share Transfer/Transmission. Normally the said officials meet once in 15 days to approve share transfers and other related matters, if any. The details of share transfer/transmission approved by above officials are properly recorded in the Stakeholders Relationship Committee meetings and are also placed before Board, for its record
XIV) Dematerialization of Shares and Liquidity as on
31st March, 2014.
Physical Form : 1.96%
Dematerialized Form : 98.04%
Trading in equity shares of the Company is permitted in dematerialized form only as per the notification issued by Securities and Exchange Board of India (SEBI). Non-promoters share holding is 44..83% and the liquidity of the stock is fairly good.
XV) Outstanding ADRs/GDRs/Warrants or any Convertible Instruments, conversion date and likely impact on Equity.
Your Company has not issued any ADRs/GDRs/Warrants or any convertible instruments.
XVI) Plant Locations :
a] 371, Takwe Road, At & Post-Kanhe, Tal. Maval, Dist. Pune - 412 106.
b] D-2, MIDC, Ambad, Nashik- 422 010.
c] Maharajapur Road, Lalpur, Rudrapur, (U.S. Nagar], Uttarakhand.
d] Plot No.2, Sector - 11, Tata Vendor Park, IIE, Pantnagar, Rudrapur - 263 153 Uttarakhand.
XVII) Address for correspondence
74, Ganesh Apartment, Opp. Sitaladevi Temple, L. J. Road, Mahim (W], Mumbai - 400 016. Tel.: 022-24444287, Tele fax: 022-24458196 Email: email@example.com and firstname.lastname@example.org
For all investor related matters, Mr. Ajay Kadhao, Company Secretary & Compliance Officer, can be contacted at the above address.
During the year under review, the Company has not passed any special resolution by way of Postal Ballot process. The Company has not proposed any special resolution to be conducted through postal ballot.
2. Details of non-compliance etc.
Your Company has complied with all the requirements of regulatory authorities. During the last three years, there were no instances of non-compliance by the Company and no penalty or strictures were imposed on the Company by the Stock Exchanges or SEBI or any statutory authority, on any matter related to the capital markets.
3. Means of Communication
The quarterly, half yearly and yearly results are published in Business Standard and Sakal which are national and local dailies respectively. These are not sent individually to the Shareholders. The Company's financial results and official news releases are displayed on the Company's website at www.muscoindia.com During the year ended 31st March, 2014, no presentations were made to institutional investors or analysts.
4. Management Discussion and Analysis Report (MDA):
The Management Discussion and Analysis Report (MDA), has been attached and forms part of this Annual Report.
5. Compliance with mandatory & non-mandatory requirements:
Your Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement relating to Corporate Governance.
Further, your Company has adopted the following non-mandatory requirements of the Clause:
I Your Company has set up the Nomination & Remuneration Committee (earlier known as Remuneration Committee).
II During the year under review, there is no audit qualification in the Company's financial statements.
Your Company has not adopted the other non-mandatory requirements as specified in Annexure ID of the clause 49.
Your Company has been a strong believer in good corporate governance and has been adopting the best practices that have evolved over the last two decades.
Your Company will always endeav our to attain the best practices in Corporate Governance.
Place : Mumbai,
date : 21st May, 2014.