CORPORATE GOVERNANCE REPORT
Max India is committed to excellence in Corporate Governance and recognises that in today's environment it is a critical driver for achieving excellence, attracting high-quality talent and optimising capital allocation across the Group.
To ensure strong discipline in capital management,robust performance management of the businesses and sustained value creation across all stakeholders, Max India embarked upon a journey over the last few years to implement a comprehensive governance framework across the Group. The framework entailed implementation of various transformational initiatives across three key facets of governance:
• Board Architecture
Boards in each of the Groups operating companies have been re-configured to create the right composition by having an ideal number of independent directors, ensuring board diversity with respect to functional and industry expertise, having an active and engaged lead director on each Board and separating the role of the CEO and the Chairman. In addition, a clear role for the Boards has been articulated in areas like strategy formulation, monitoring financial health, leadership development, risk management and succession planning.
• Board Processes
Various people processes of the Boards have been optimised (on-boarding of directors,Board education and business engagement, enabling independence, code of conduct, etc.). Key operational aspects such as ensuring a comprehensive and well-balanced meeting agenda, timely and adequate information flow to the Boards, inviting external speakers to take Board sessions are in place to ensure that the Board time is spent optimally on all critical areas of the business. To enable this, detailed Standard Operating Procedures have been created and rolled out (including content templates, timelines, etc.) to ensure that the Board materials are comprehensive, crisp and relevant for strategic discussions.
All material matters to be considered by each Board are reviewed in specific subcommittees of the Board that are composed of Directors who can add value to and are specifically qualified for the particular subcommittee. For example, the Audit Committee co-opts Directors who have the qualifications and experience in financial and control related matters and the Product and Actuarial Committee in Max Life has Directors who are qualified life actuaries. In addition, these subcommittees are composed of the right balance between executive, non-executive and independent Directors. Detailed charters are published for every subcommittee of every Board.
• Board Effectiveness
To enhance 'Board Effectiveness' and assess the Board's performance, an annual evaluation of Board Members is conducted and inter-company Board movements are effected to ensure that each Board is well-equipped and engaged to take the right decisions for the business. In addition, various mechanisms have been implemented to improve the performance of the Boards, which involve establishing clear standards of conduct & behaviour, setting a calendar of key governance interventions (like strategy setting sessions, risk management sessions, etc.), consequence management, etc.
BOARD OF DIRECTORS
As on March 31, 2015, your Board of Directors comprised fourteen members with two Executive Directors and twelve Non-Executive Directors of which eight are independent. Mr. Analjit Singh is the Promoter Non-Executive Chairman of the Company. No Director is a member in more than ten committees or the Chairman of more than five committees across all public companies in which he is a Director.
HOW DO WE MAKE SURE OUR BOARD IS EFFECTIVE?
The calendar for the Board and Committee meetings and significant agenda items are fixed in advance for the whole year. Max India holds at least one Board meeting within 45 days from the close of each quarter to review financial results and business performance. The gap between two Board meetings does not exceed four calendar months. Apart from the aforesaid four meetings, additional Board meetings are also convened to meet business exigencies. Matters of exigency are approved by the Directors by resolutions passed by circulation as permissible under the provisions of the Companies Act, 2013.
Meetings of Committees of Board are held prior to the Board meeting. The Chairman of the respective Committees briefs the Board about the proceedings of the Committee meetings and its recommendations on matters that the Board needs to approve. All agenda items are accompanied by comprehensive notes on the related subject and in certain areas such as business plans/ business reviews and financial results, detailed presentations are made to the Board members. The materials for the Board and committee meetings are published (electronically in a secure dedicated portal) seven days in advance. The Board is regularly updated on the key risks and the steps and processes initiated for reducing and, if feasible, eliminating various risks. Business risk evaluation and management is an ongoing process with the Company.
To enable the Board to discharge its responsibilities effectively, members of the Board are apprised on the overall performance of the Company and its subsidiaries/joint ventures at every Board meeting. The Board has complete access to all the relevant information within the Company and all its employees. Senior Management is invited to attend the Board meetings to provide a detailed insight into the items being discussed.
CODE OF GOVERNANCE
In compliance with Clause 49 of the Listing Agreement with Stock Exchanges, the Company had adopted a Code of Conduct for the Directors and senior management of the Company ('the Code'), a copy of which is available on the Company's website, http://www. maxindia.com/governance-documents/Max-Code-of-conduct.pdf. All the members of the Board of Directors and senior management personnel had affirmed compliance with Clause 49 of the Listing Agreement including Code for the financial year ended March 31, 2015 and declaration to this effect signed by the Managing Director forms a part of this report as Annexure-I. Pursuant to the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended, the Company has adopted an Insider Trading Policy for prevention of insider trading, which is applicable to all the Directors and designated employees.
COMMITTEES OF THE BOARD AUDIT COMMITTEE
As of March 31, 2015 this committee comprised Mr. N.C. Singhal (Chairman), Mr. Ashwani Windlass, Mr. Rajesh Khanna and Mr. Ashok Kacker. All members of the committee, except Mr. Ashwani Windlass, are Independent Directors. Mr. Rahul Khosla, Managing Director is a permanent invitee to the committee. The Company Secretary of the Company acts as the Secretary to this committee. This committee, inter alia, recommends the appointment of statutory auditor, reviews the Company's financial reporting processes and systems, financial and risk management policies, the Company's financial statements, including annual and quarterly financial results and financial accounting practices & policies. The scope of the Audit Committee has been defined by the Board of Directors in accordance with Clause 49 of the Listing Agreement and applicable provisions of the Companies Act, 2013. The Internal Auditors and representatives of Statutory Auditors are invited to the meetings of the committee as required. Mr. N.C. Singhal, the Chairman of the Audit Committee, was present at the last Annual General Meeting.
NOMINATION AND REMUNERATION COMMITTEE
As of March 31, 2015, this committee comprised Mr. Rajesh Khanna (Chairman), Mr. N.C. Singhal, Mr. Ashwani Windlass and Mr. Aman Mehta. All, except Mr. Ashwani Windlass are Independent Directors. This committee evaluates the compensation and benefits for Executive Directors and Senior Executives at one level below the Board, recruitment of key managerial personnel and finalisation of their compensation, induction of Executive and Non-Executive Directors and fixing the method, criteria and quantum of compensation to be paid to the Non-Executive Directors. It also administers the ESOP Scheme of the Company including allotment of equity shares arising from exercise of stock options. The remuneration policy of the Company is aimed at attracting and retaining the best talent to leverage performance in a significant manner. The strategy takes into account the remuneration trends, talent market and competitive requirements. Meetings & attendance during the year ended March 31, 2015:
REMUNERATION PAID TO DIRECTORS DURING 2014 - 2015
During the year 2014-15, the Company paid Sitting Fees of Rs. 1,00,000/- per meeting to its Non-Executive/Independent Directors for attending the meetings of the Board, Committees of the Board and separate meetings of Independent Directors. The Company has not paid any remuneration to its Non-Executive/Independent Directors except Sitting Fees for attending meetings of the Board, Committees thereof and separate meetings of Independent Directors. Details of the Sitting Fees paid to Non-Executive/Independent Directors of the Company during 2014-15 are as under:
The remuneration payable to Executive Directors of the Company, including performance incentives and grant of ESOPs, were determined from time to time by the Nomination and Remuneration Committee in terms of applicable provisions of the Companies Act, 1956 and Companies Act, 2013, read with the Company's remuneration policy. The details of the remuneration policy are part of the Directors' Report. Details of the remuneration charged to the Profit and Loss Account in respect of Mr. Rahul Khosla, Managing Director and Mr. Mohit Talwar, Dy. Managing Director of the Company for the year ended March 31, 2015 are as under:
During the year 2014-15,stock options were granted to the following Directors of the Company:
• 35,000 Options to Mr. Mohit Talwar on April 1, 2014 entitle him to receive 35,000 equity shares of Rs. 2/- each at an exercise price of Rs. 2/- per equity share with a graded vesting over a four year period.
• 22,600 Options to Mr. Mohit Talwar on March 27, 2015 entitle him to receive 22,600 equity shares of Rs. 2/- each at an exercise price of Rs. 2/- per equity share with a graded vesting over a four year period.
• 1,79,800 Options to Mr. Rahul Khosla on August 19, 2014 entitle him to receive 1,79,800 equity shares of Rs. 2/- at an exercise price of Rs. 2/- per equity share with a graded vesting over a five year period.
• 4,43,000 Options to Mr. Mohit Talwar on December 12, 2014 entitle him to receive 4,43,000 equity shares of Rs. 2/- at an exercise price of Rs. 394/- per equity share with a bullet vesting on March 31, 2020, except the vesting date for such options (calculated on a proportionate basis) may be accelerated to August 14, 2017 under certain circumstances.
• 13,30,000 Options to Mr. Rahul Khosla on December 12, 2014 entitle him to receive 13,00,000 equity shares of Rs. 2/- at an exercise price of Rs. 394/- per equity share with a bullet vesting on March 31, 2020, except the vesting date for such options (calculated on a proportionate basis) may be accelerated to February 18, 2017 under certain circumstances
No other Director was granted any stock options during the year 2014-15.
Details of equity shares of Rs. 2/- each held by the Directors of the Company as on March 31, 2015 are: (a) Mr. Analjit Singh - 58,76,789 shares; (b) Mr. N.C. Singhal - 53,500 shares; (c) Mr. Ashwani Windlass - 1,58,700 shares; (d) Mr. Anuroop Singh - 25,000 shares; (e) Mr. Aman Mehta - 29,000 shares; (f) Mr. Rajesh Khanna - 25,000 shares; (g) Dr. Ajit Singh - 29,000 shares; (h) Mr. Rahul Khosla- 3,46,518 shares; 0) Mr. Mohit Talwar - 99,674 shares.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
As of March 31, 2015, this committee comprised Mr. Ashwani Windlass (Chairman), Mr. N. C. Singhal, Mr. Rahul Khosla and Mr. Mohit Talwar. Key responsibilities of this committee are the formulation of procedures in line with the statutory guidelines to ensure the speedy disposal of various requests received from shareholders from time to time, the redressal of shareholder and investor complaints/grievances. The committee also approves the transfer and transmission of securities, the issuance of duplicate certificates, etc. This committee, which was hitherto known as "Shareholders'/Investors' Grievance Committee", was renamed as "Stakeholders' Relationship Committee" as per applicable provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreements, as amended up till date.
Besides, Mr. V. Krishnan, Company Secretary & Compliance Officer, has been authorised to effect transfer of shares up to 1000 per folio. The Company has normally attended to the Shareholder/Investor complaints within a period of 7 working days except in cases which were under legal proceedings/disputes. During the financial year ended March 31, 2015, 25 complaints/queries were received by the Company, which were general in nature i.e., issues relating to non-receipt of dividend, annual reports, shares, etc. All of these were resolved to the satisfaction of the respective shareholders.
INVESTMENT & FINANCE COMMITTEE
As of March 31,2015,this committee comprised Mr.Ashwani Windlass (Chairman), Mr. N.C. Singhal, Mr. Sanjeev Mehra, Mr. Rahul Khosla and Mr. Mohit Talwar. The responsibilities of this committee are to review the financial performance of businesses carried on by the Company and its subsidiaries, review and recommend the revenue and capital budgets of the Company and its subsidiaries, review and recommend various fund raising options and financial resources allocation to the Company's subsidiaries and to review proposals on business restructuring, mergers, consolidations, acquisitions, investments, establishment of joint ventures and divestments of any businesses, etc.
To comply with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of the Company constituted a Corporate Social Responsibility Committee (CSR Committee) to formulate, recommend to the Board and periodically review, a Corporate Social Responsibility Policy. The responsibilities of this committee are as enshrined in the Companies Act, 2013 read with the Company's CSR Policy, as amended from time to time. The CSR Committee comprises Mr. N.C. Singhal, Mr. Ashwani Windlass, Mr. Rajesh Khanna, Mr. Aman Mehta, Dr. Ajit Singh, Prof. Dipankar Gupta and Mr. Ashok Kacker. The committee met two times during the year ended March 31, 2015.
RISK AND COMPLIANCE REVIEW COMMITTEE
To oversee the risk assessment framework and minimisation procedures, the Board of Directors of the Company constituted a Risk and Compliance Review Committee, to periodically review how the executive management controls risks and the risk framework. The responsibilities of this Committee are as enshrined in the Companies Act, 2013, applicable listing regulations and as per the risk management framework of the Company This Committee comprises of Mr. N.C. Singhal, Mr. Ashwani Windlass, Mr. Rajesh Khanna, Mr. Aman Mehta, Dr. Ajit Singh, Prof. Dipankar Gupta and Mr. Ashok Kacker. The Committee met two times during the year ended March 31, 2015.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
During the year under review the Independent Directors met on February 12, 2015, whereat the following agenda items were considered, in terms of Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement:
(a) Evaluation of the performance of Non-Independent Directors and the Board as a whole.
(b) Evaluation of the performance of the Chairperson of the Company.
(c) Assessment of the quality, quantity and timelines of the flow of information between the Companys' Management and the Board.
Further, the Company has made familiarisation programmes to familiarise Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. The details of such familiarisation programmes are available on http://www.maxindia.com/governance-documents/Familiarisation-programme-for-Board-members.pdf.
(a) Related party transactions
There are no materially significant related party transactions with its Promoters, the Directors or the Management, their subsidiaries or relatives, etc., that may have potential conflict with the interests of the Company at large.
The Company has formulated a policy for transacting with related parties, which is available on the website of the Company-http:// www.maxindia.com/governance-documents/Related-Party-Policy. pdf. Transactions with related parties are disclosed in Notes to the financial statements in the Annual Report.
(b) Compliance by the Company
The Company has complied with all the mandatory requirements of the Listing Agreement entered into with the stock exchanges, SEBI and other statutory authorities on all matters relating to capital markets during the last three years. No penalties or strictures have been imposed on the Company by the stock exchanges, SEBI or any other statutory authorities on any matters relating to the capital markets during the last three years.
(c) Whistle Blower Policy
The Company has adopted a Whistle Blower Policy and has established the necessary mechanism for employees to report concerns about unethical behaviour. It is hereby affirmed that no person has been denied access to the Chairman of the Audit Committee on matters relating to the Whistle Blower Policy of the Company.
The Company has one material unlisted subsidiary Company, i.e., Max Life Insurance Company Limited (Max Life) during the year 2014-15. Mr. Rajesh Khanna is the common Independent Director of the Company and Max Life. Further, the Company has formulated a policy for determining 'material subsidiaries' which is disclosed on its website http://www.maxindia.com/governance-documents/Policy -for-determine-material-subsidiaries.pdf.
GENERAL SHAREHOLDER INFORMATION
A section on the 'Shareholder Information' is annexed and forms a part of this Annual Report.
MANAGEMENT DISCUSSION & ANALYSIS
A section on the 'Management Discussion & Analysis' is annexed and forms a part of this Annual Report.
COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE
The certification by the Managing Director and Chief Financial Officer on compliance with clause 49 of the Listing Agreement is enclosed as Annexure II.
M/s Sanjay Grover & Associates, Company Secretaries have certified that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchanges and the same is annexed to the report as Annexure-III. Chairman. In view of his enhanced involvement in promoting business interests of the Company, the Company established a Chairman's Office which meets the expenses of performance of his duties.
The status of compliance with the non-mandatory recommendations under Clause 49 of the Listing Agreement with Stock Exchanges is given below:
Mr. Analjit Singh, the Chairman of the Company, is the Non-Executive
The quarterly, half-yearly and annual financial results of the Company are published in newspapers and also posted on the Company's website.
It has always been the Company's endeavour to present unqualified financial statements. There is no audit qualification in respect of financial statements of the Company for the financial year 2014-15.
SEPARATE POSTS OF CHAIRMAN AND CEO
The Company has separate persons to the post of Chairman and Managing Director. Mr. Analjit Singh is the Non-Executive Chairman of the Company effective April 1, 2015 and Mr. Rahul Khosla is the Managing Director of the Company since August 18, 2011.
For Max India Limited
Date : August 12, 2015
Place : New Delhi
GENERAL SHAREHOLDER INFORMATION
Bhai Mohan Singh Nagar, Railmajra, Tehsil Balachaur, District Nawanshahr, Punjab- 144533.
SHARE TRANSFER AGENT
Mas Services Limited, T-34, 2nd Floor, Okhla Industrial Area, Phase - II, New Delhi-110 020, Telephone: 011 26387281/82/83, Fax: 011 26387384 E-mail: firstname.lastname@example.org
email@example.com Delhi-110 020,
ANNUAL GENERAL MEETING Date and Time: Wednesday, September 23, 2015 at 1600 hrs Venue: Registered Office of the Company at Bhai Mohan Singh Nagar, Railmajra, Tehsil Balachaur, District Nawanshahr, Punjab-144 533.
Thursday, September 17, 2015 to Wednesday, September 23, 2015 (both days inclusive)
The financial year of the Company starts from April 1 of a year and ends March 31, of the following year.
1. First quarter results : By August 12, 2015
2. Second quarter & half yearly results: By November 8, 2015
3. Third quarter results: By February 12, 2016
4. Annual results: By May 30, 2016
LISTING ON STOCK EXCHANGES
The Equity Shares of the Company are listed on the BSE Limited ('BSE') and the National Stock Exchange of India Limited ('NSE'). The Company confirms that it has paid annual listing fees due to BSE and NSE for the year 2015-16.
CONNECTIVITY WITH DEPOSITORIES
The Company's shares are in dematerialised mode through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
BSE - 500271
NSE - MAX
Demat ISIN No. for NSDL and CDSL - INE180A01020
BSE MAXI.BO MAX:IN
NSE MAXI.NS NMAX:IN
DEMATERIALISATION STATUS AS ON MARCH 31, 2015
(i) Shareholding in dematerialised mode 98.92%
(ii) Shareholding in physical mode 1.08%
RECONCILIATION OF SHARE CAPITAL AUDIT
As stipulated by the Regulation 55A of SEBI (Depositories and Participants) Regulations, 1996, a practicing Company Secretary carries out the Reconciliation of Share Capital Audit, on a quarterly basis, to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) with the total listed and paid-up capital. The audit report, inter alia, confirms that the total listed and paid up capital of the Company is in agreement with the aggregate of the total number of shares in dematerialised form and total number of shares in physical form.
FOR SHAREHOLDERS HOLDING SHARES IN DEMATERIALISED MODE
Shareholders holding shares in dematerialised mode are requested to intimate all changes with respect to bank details, mandate, nomination, power of attorney, change of address, change of name etc. to their Depository Participant (DP). These changes will be reflected in the Company's records on the downloading of information from Depositories, which will help the Company provide better service to its shareholders.
SHARE TRANSFER SYSTEM
In respect of shares up to 1000 per folio, transfers are effected on weekly basis. For others, the transfers are effected within limits prescribed by law. The average turnaround time for processing registration of transfers is 15 days from the date of receipt of requests. The processing activities with respect to requests received for dematerialisation are completed within 7-10 days.
The Board of Directors of the Company declared a 200% Interim Dividend of Rs. 4/- per equity share on a face value of Rs. 2/- per share on November 12, 2014. The Record Date for the purpose of payment of Interim Dividend was November 26, 2014 and the Interim Dividend was paid to the shareholders on December 4, 2014.
UNCLAIMED INTERIM DIVIDEND
During the period under review, the Interim Dividend 2014-15 remaining unpaid was transferred to the unpaid Dividend Account. In respect of the unpaid/unclaimed Interim Dividend for the year 2014-15, the shareholders are requested to write to the Registrar and Share Transfer Agent of the Company. Further, Section 205A of the Companies Act, 1956 and/ or Section 124 of the Companies Act, 2013, mandate companies to transfer Dividend that remains unclaimed for a period of seven years to the Investor Education and Protection Fund (IEPF). Therefore, balance if any remaining unclaimed/unpaid against the Interim Dividend 2014-15, will be transferred to IEPF within the statutory period prescribed under the Act.
The Board of Directors of the Company has recommended a Final Dividend of Re. 1/- per equity share. The Dividend recommended by the Directors for the year ended March 31, 2015, if declared at the annual general meeting, will be paid by October 10, 2015 to those members holding shares in physical form, whose names appear in the Register of Members of the Company on September 23, 2015. In respect of shares held in electronic form, the dividend will be payable to the beneficial owners of the shares as on the closing hours of business on September 16, 2015 as per the details furnished by the respective depositories for this purpose.
OUTSTANDING GDRS/ADRS/WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATE AND LIKELY IMPACT ON EQUITY: NOT APPLICABLE PLANT LOCATIONS: Not Applicable
COMMUNICATION OF FINANCIAL RESULTS
The unaudited quarterly financial results and the audited annual accounts are normally published in the Mint/Economic Times/Desh Sewak. The financial results, press releases and presentations etc. are regularly displayed on the Company's website www.maxindia.com
ADDRESS FOR CORRESPONDENCE WITH THE COMPANY
Investors and shareholders can correspond with the office of the share transfer agent of the Company or the Corporate Office of the Company at the following addresses:
MAS SERVICES LIMITED (REGISTRAR & TRANSFER AGENT) T-34, 2nd Floor Okhla Industrial Area, Phase - II New Delhi - 110 020
Mr. Sharwan Mangla and Mr. O.P. Joshi Tel No.: 011-26387281/82/83 Fax No.: 011 - 26387384 E-mail: firstname.lastname@example.org
MAX INDIA LIMITED (CORPORATE OFFICE) Secretarial Department Max House, 1, Dr. Jha Marg Okhla Industrial Area, Phase - III New Delhi - 110 020
Mr. V. Krishnan Tel. No.: 011-42598000 Fax No.: 011-26324126 E-mail: email@example.com Please visit us at www.maxindia.com for financial and other information about your Company
For Max India Limited
Place : New Delhi
Date : August 12, 2015