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Motor & General Finance Ltd.

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  • BSE Code: 501343
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Motor & General Finance Ltd. Accounting Policy

CORPORATE GOVERNANCE REPORT

Company's Philosophy on Code of Corporate Governance

Corporate Governance represents the value, ethical and moral framework under which business decisions are taken. The investors want to be sure that not only is their capital handled effectively and adds to the creation of wealth, but the business decisions are also taken in a manner which are not illegal or involving moral hazard.

Your company perceives good corporate governance practices as a key driver of sustainable corporate growth and long term shareholder value creation. The primary objective is to develop and adhere to a corporate culture of harmonious and transparent functioning, increasing employee and customer satisfaction and enhancing shareholders' wealth by developing capabilities and identifying opportunities that best serve the goal of value creation. All actions and strategic plans are directed towards delivering value to all stakeholders, as well as conform to the highest standards of corporate behaviour.

1. Board of Directors("Board")

The composition of the Board of Directors of the company is in conformity with clause 49 of the Listing Agreement entered into with Stock Exchange

The Board, as on March 31,2015, comprised of six Directors.

All the Directors on the Board are eminently qualified and experienced professionals in Business, Finance and Corporate Management. The Chairman of the Board is an Executive.

i) Constitution of the Board:

a. Chairmanship/Membership only includes Audit Committee and Stakeholders Relationship Committee in indian public limited companies. Members of the Board of the company do not have membership of more than ten Board level committees or Chairman of more than five such committees. None of the Directors who serve as a Whole Time Director in any listed company serve as Independent Director in more than three listed companies.

b. Sh. Rajiv Gupta and Mrs. Arti Gupta are related to each other.

c. Details of Directors retiring or being reappointed are given in the notice to Annual General Meeting. The brief profile of the Board Members is given in the website of the company www.mgfltd.com

(ii) Independent Directors

The Independent Directors fulfill the conditions of independence specified in section 149(6) of the Companies Act,2013 and rules made thereunder and meet with the requirement of clause 49 of the Listing Agreement entered into with the Stock Exchanges, A formal letter of appointment to Independent Directors as provided in Companies Act,2013 and the Listing Agreement has been issued and disclosed on the website of the company viz. www.mgfltd.com

(iii) Role of Independent Directors

Independent Directors play an important role in deliberations at the Board Meetings and bring to the company their wide experience in the field of finance, accountancy and public policy. This wide knowledge of both, their field of expertise and board room practices helps foster varied, unbiased, independent and experienced perspectives. The company benefits immensely from their inputs in achieving its strategic directions.

The Audit Committee, the Nomination & Remuneration Committee, the Stakeholders Relationship Committee, Risk Management Committee and the CSR Committee have majority of independent directors. These committees function with the defined terms of reference in accordance with the Companies Act,2013, the listing agreements and as approved by the board from time to time. Board Members ensure that their work in other capacities do not impinge on their fiduciary responsibilities as directors of the company.

All Independent Directors of the company, at the time of their first appointment to the Board and thereafter at the first meeting of the Board in every financial year, give a declaration that they meet with the criteria of independence as provided under clause 49 of the listing agreement. In the opinion of the Board, each independent director possesses appropriate balance of skills, experience and knowledge, as required.

(iv) Pecuniary Relationship

Independent Directors do not have any pecuniary relationships or transactions with the company except for the sitting fees drawn for attending the meetings of the Board. No meeting fee is paid for attending the Committee Meetings.

None of the Directors on the Board is a member of more than 10 Committees or Chairman of more than 5 Committees across all the companies in which he is a Director. None of the Directors who serve as a Whole Time Director in any listed company serve as Independent Director in more than three listed companies.

(v) Board Meetings

The meetings of the Board of Directors are informed well in advance and are held at the Registered Office i.e. MGF House, 4/17-B, Asaf Ali Road, New Delhi. The notice confirming the minutes of the previous meeting and the detailed agenda for the ensuing meeting is sent invariably at least seven days in advance to all the Directors. In terms of the company's Corporate Governance policy, all significant and material information are placed before the Board to enable it to discharge its responsibilities. As per the directions of the Chairman, the Company Secretary who is also the Compliance Officer, convene the meetings. Departmental heads of the company, in case they are required, are invited to attend the Board Meetings, to make presentations and provide clarifications. It is ensured that there are minimum number of four meetings of the Board of Directors every year to review the quarterly performance and financial results of the company.

(vi) Number of Board Meetings:

During the year from April 1, 2014 to March 31, 2015, the Board of Directors held Board Meetings on the following dates:

(viii) Evaluation of Directors and the Board

With the objective of enhancing the effectiveness of the board, the Nomination & Remuneration Committee formulated the methodology and criteria to evaluate the performance of the board and each director.

The evaluation of the performance of the board is based on the approved criteria such as the board composition, strategic planning, role of the chairman and other senior management, assessment of the timeliness and quality of the flow of information by the company to the board and adherence to compliance and other regulatory issues.

The independent directors also held a separate meeting on March 31,2015 to review the performance of the executive directors, the Chairman of the company and the overall performance of the board.

(ix) Meeting Fee to Directors:

Sitting Fee was paid to Independent and Non-Executive Directors only for attending Board Meetings. 2. Governance Codes

(i) Code of Business Conduct & Ethics

The company has adopted Code of Business Conduct & Ethics("the Code") which is applicable to the Board of Directors and Senior Management Team(one level below the Board) of the company. The Board of Directors and the members of Senior Management Team affirm compliance of this code. It is disclosed on the website of the company viz. www.mgfltd.com

(ii) Insider Trading Code

In accordance with SEBI(Prevention of Insider Trading) Regulation, 2015, the company has a Code of Conduct for Prevention of Insider Trading which was approved by the Board in their meeting held on May 14,2015. All the Directors,employees at Senior Management and other employees who could have access to the unpublished price sensitive information of the company are governed by this code. The Company Secretary is the Compliance Officer for monitoring adherence to the said regulation.

3. Board Committees

To enable better and more focused attention on the affairs of the company, the board delegates particular matters to committees of the directors set up for the purpose. These specialist committees prepare the groundwork for decision making and report at the subsequent board meeting.

The Board is assisted by various committees- Audit Committee, Nomination & Remuneration Committee, the Stakeholders Relationship Committee, Risk Management Committee and the Corporate Social Responsibility(CSR) Committee

To comply with the requirements of Clause 49 of the Listing Agreement, the composition, broad terms of reference and attendance of director of each committee is given hereunder:-

(i) Audit Committee

This Committee is comprising of Sh. Rajiv Gupta, Sh. Arun Mitter, Sh. Bharat Kumar, Sh. Abhiram Seth and Sh. Onkar Nath Aggarwal

(a) Chairman:

Sh. Bharat Kumar, Independent Director, is the Chairman of the Audit Committee.

(b) Broad Terms of Reference of the Audit Committee

i) Oversee the company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are sufficient and credible;

ii) Recommending the appointment of statutory auditors, fixation of audit fee and approval for payment. Discussions with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post audit discussions to ascertain any area of concern.

iii) Reviewing with the management, the quarterly, half yearly and annual financial statements before submission to the Board for approval, with particular reference to:-

a) Matters required to be included in the Directors' Responsibility Statement to be Included in the Board's report in terms of section 134(3)( c) of the Companies Act,2013 .

b) Changes, if any, in accounting policies and practices and reasons for the same.

c) To approve /modify the transactions with the related parties and also review the statement of significant related party transactions submitted by the management.

d) Whether the audit tests are appropriate and scientifically carried out.

iv) Compliance with listing and other legal requirements relating to financial statements.

v) Qualifications in the draft audit report, if any.

vi) Ensuring compliance with regulatory guidelines.

vii) Reviewing with the management the adequacy of internal control systems and ensuring suitable follow up action, where required.

viii) to fix record date/book closure of share/debenture transfer book of the company from time to time.

ix) Evaluating the internal financial control and risk management policies/system of the company.

x) to appoint representatives to attend the general meeting of other companies in which the company is holding shares;

xi) to change the signatories for availment of various facility from banks/financial institutions.

xii) To review whistle blower mechanism of the company as per Whistle Blower Policy.

xiii) To review and scrutinize the loans, investments and guarantees.

xiv) To recommend to the Board the appointment, remuneration and terms of appointment of Cost Auditors and also review the Cost Audit Report.

xv) Any other matter referred to by the Board of Directors.

During the year, the Committee met nine times on May 30, 2014, July 1, 2014, August 12,2014, October 20, 2014, October 31, 2014, November 13, 2014, January 5, 2015, February 13, 2015 and March 31, 2015.

Sh.M.K. Madan, Compliance Officer, is the convener of the Audit Committee..

Chairmanship/Membership of Committee only includes Audit Committee and Stakeholders Relationship Committee in Indian Public Limited companies. Members of the Board of the company do not have membership of more than ten Board level Committees or Chairman of more than five such Committees.

None of the Directors who serve as a Whole Time Director in any listed company serve as Independent Director in more than three listed companies.

4. Stakeholders Relationship Committee.

The Board of Directors at its meeting held on July 1,2014 has changed the nomenclature of the Shareholder's Grievance Committee to Stakeholders Relationship Committee, in accordance with Section 178(5) of the Companies Act,2013 and revised clause 49 of the listing agreement with Stock Exchanges.

This committee is comprising of Sh. Rajiv Gupta, Mrs. Arti Gupta, Sh. Arun Mitter, Sh. Bharat Kumar and Shri Abhiram Seth.

Terms of Reference

The terms of reference of the Committee includes enquiring into and redressing complaints of shareholders and investors and to resolve the grievance of the stakeholders of the company.

Chairman

Sh.Abhiram Seth, Independent Director, is the Chairman of the Committee Sh.M.K. Madan, Compliance Officer, is the convener of the Committee.

(i) Attendance of Directors in the Stakeholder Relationship Committee Meetings:

The Stakeholders Relationship Committee met four times during the year on July 3, 2014, October 20, 2014, January 8, 2015, and March 31, 2015.

Chairmanship/Membership of Committee only includes Audit Committee and Stakeholders Relationship Committee in Indian Public Limited companies. Members of the Board of the company do not have membership of more than ten Board level Committees or Chairman of more than five such Committees.

None of the Directors who serve as a Whole Time Director in any listed company serve as Independent Director in more than three listed companies.

 (iii) Number of complaints pending with the Company

All the shareholders requests/complaints received during the financial year ended March 31, 2015 by the company and/or their registrar i.e. M/s Alankit Assignments Limited were replied / resolved to their satisfaction.

(iv) Number of shares pending for transfer:

No shares were pending for transfer as on March 31, 2015.

5. Nomination and Remuneration Committee(formerly known as Remuneration Committee) :

The Board of Directors at its meeting held on May 30,2014 has changed the nomenclature of the Remuneration Committee to Nomination & Remuneration Committee, in accordance with Section 178 of the Companies Act,2013 and revised clause 49 of the listing agreement into with Stock Exchanges.

(i) Membership:

Nomination and Remuneration Committee comprise of Sh. Rajiv Gupta, Sh. Arun Mitter, Sh. Bharat Kumar, Sh. Abhiram Seth and Sh. Onkar Nath Aggarwal.

Chairman

Sh. Abhiram Seth, Independent Director, is the Chairman of the Committee Sh.M.K. Madan, Compliance Officer, is the convener of the Committee

During the year ended March 31, 2015, the Nomination and Remuneration Committee met four times i.e. October 20, 2014, October 31, 2014, December 12, 2014 and March 31, 2015. .

Chairmanship/Membership of Committee only includes Audit Committee and Stakeholders Relationship Committee in Indian Public Limited companies. Members of the Board of the company do not have membership of more than ten Board level Committees or Chairman of more than five such Committees.

None of the Directors who serve as a Whole Time Director in any listed company serve as Independent Director in more than three listed companies.

(iv) Policy for appointment and remuneration

In terms of section 178(3) of the Companies Act,2013 and clause 49 of the Listing Agreement, entered into by the company with Stock Exchanges, as amended from time to time, the policy on nomination and remuneration of Directors, Key Managerial Personnel(KMP), Senior Management and other employees of the company has been formulated by the Nomination and Remuneration Committee of the company and approved by the Board of Directors. The relevant extract of the aforesaid policy are given below:-

a. Identify persons who are qualified to become Directors, Key Managerial Personnel(KMP), Senior Management and other employees in accordance with the criteria laid down, and recommend to the Board, their appointment and removal.

b. Carry on the evaluation of every director including Independent Directors, Key Managerial Personnel, Senior Management and other employees' performance.

c. Formulate criteria for determining qualifications, positive attributes and independence of a director.

d. Recommend to the Board a policy, relating to the remuneration of the Directors, Key Managerial Personnel, Senior Management and other employees.

e. Undertake any other matters as the Board may decide from time to time.

(v) The company follows a market linked remuneration policy, which is aimed at enabling the company to attract and retain the best talent. Compensation is also linked to individual and team performance as they support the achievement of corporate goals. The company does not have an Employee Stock Option Policy.

6. Risk Management Committee

(i) Membership:

Risk Management Committee was constituted on February 13, 2015 and it comprises of members namely Sh. Bharat Kumar, Sh. Arun Mitter and Sh. Abhiram Seth.

Sh. Bharat Kumar, Independent Director is the Chairman of the Committee.

Sh. M.K. Madan, Compliance Officer, is the convener of the Committee.

During the year ended March 31,2015, the Risk Management Committee met on February 13,2015.

 (iii) Broad Terms of reference of the Risk Management Committee

i) to oversee the responsibility with regard to the identification, evaluation and mitigation of operational strategic and external environment risk.

ii) The Committee is responsible for reviewing and approving the risk disclosure statement in any public documents/disclosure.

iii) It co-ordinates its activities with the Audit Committee in instances where there is any overlap with the audit activities.

7. Corporate Social Responsibility(CSR) Committee

Pursuant to Section 135 of the Companies Act, 2013, a Corporate Social Responsibility Committee was formed by the Board of Directors on February 13, 2015 and it consists of three Directors, namely Sh. Abhiram Seth, Sh. Arun Mitter and Sh. Onkar Nath Aggarwal (appointed as Indepedent Director on March 31, 2015).

Chairman

Sh. Abhiram Seth, Independent Director, is the Chairman of the Committee.

Sh. M.K. Madan, Compliance Officer, is the convener of the Committee.

Meeting of the Corporate Social Responsibility Committee of Board of Directors was held on February 13,2015

(i) Meeting and attendance

Terms of Reference of the Corporate Social Responsibility

i) To formulate and recommend to the board, a CSR Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII of the Companies Act, 2013.

ii) To recommend the amount of expenditure to be incurred on the activities referred in CSR Policy

iii) To monitor the CSR Policy of the company from time to time etc.

8. Affirmations and Disclosures

a. Compliance with Governance Framework

The company is in compliance with all mandatory requirements of Clause 49 of the Listing Agreement.

b. Related Party transactions (RPTs)

Your company enters into various transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 in its ordinary course of business. All the RPTs are undertaken in compliance with the provisions set out in Companies Act,2013 and Clause 49 of the Listing Agreement. The Audit Committee and the Board of Directors of the company have formulated the policy on dealing with RPTs and a policy on materiality of RPTs which is uploaded on the website of the company. There were no materially significant transactions with related parties during the financial year.

A statement in summary form of transactions with related parties in the ordinary course of business and on arm's length basis is periodically placed before the Audit Committee for review and recommendation to the Board for their approval.

All the transactions were entered into in the normal course of business and had no potential conflict with the interest of the company at large and was carried out on an arm's length basis. These are included in the notes forming part of the Financial Statement Refer Note No.26(iii)(b)

c. Details of non compliance by the company, penalties and strictures imposed on the company by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

The company has complied with all requirements of the Listing Agreement entered into with the Stock Exchanges as well as the regulations and guidelines of SEBI. Consequently, there were no strictures or penalties imposed by either SEBI or the Stock Exchanges or any statutory authority(ies) for non compliance of any matter related to the capital markets during the last three years.

d. Whistle Blower Policy

The company has implemented Whistle Blower Policy and it is hereby affirmed that no personnel have been denied access to the Audit Committee.

e. Risk Management

Business risk evaluation and management is an on going process within the company. The assessment is periodically examined by the Board.

f. Disclosure of Accounting Treatment

There is no deviation in following the treatment prescribed in any Accounting Standards(AS) in the preparation of financial statements of the company.

g. Non mandatory requirements

Adoption of non mandatory requirements of Clause 49 of the Listing Agreement is being reviewed by the Board from time to time.

h. Going Concern

The directors are satisfied that the company has adequate resources to continue its business for the foreseeable future and consequently consider it appropriate to adopt the Going Concern Basis in preparing the financial statements.

i. CEO/CFO Certificate

As required under Clause 49(IX) of the Listing Agreements, the CEO and CFO have certified to the Board regarding the correctness of the financial statements of the company for the year ended March 31, 2015.

9. Management:

(i) Management Discussion and Analysis Report:

The Company has provided a detailed Management Discussion and Analysis Report in Annexure 'B' forming part of the Director's Report.

10. Recording Minutes of proceedings at Board and Committee meetings

The Company Secretary records the minutes of the proceedings of each Board and Committee meeting. Draft minutes are circulated to all the members of the Board/Committee for their comments. The minutes are invariably entered in the Minutes Book within Thirty (30) days from the conclusion of the meeting.

11. Whistle Blower Policy

In compliance of clause 49(IIF) of the Listing Agreement, a draft copy of the Whistle Blower Policy was placed before the Board at its meeting held on December 12,2014 which was approved and duly signed by the Company Secretary for the sake of identification.

i) The company believes in the conduct of affairs in a fair and transparent manner adopting highest standards of professionalism, honesty, integrity and it is committed to developing a culture where every employee is safe to raise concerns about any poor or unacceptable practice and any event of misconduct.

ii) Section 177 read with Rule 7 of the Companies(Meetings of Board and its Powers),2014 and revised clause 49 of the Listing agreement has established the Whistle Blower Policy for directors and employees to report concerns about unethical behavior actual or suspected fraud or violation of any of law or company's conduct, mismanagement, gross waste or misappropriation of company's funds.

iii) Where violation does not affect an individual directly but is detrimental to the organization interest and also where individuals hesitate to report such violation out of fear and indifference, the Whistle Blower Policy provide a way for an individual to report violation without fear of victimization.

iv) Whistle Blower will be protected from any kind of discrimination, harassment, victimization or any other unfair employment practice.

v) The Audit Committee has been authorised to decide the case and recommend action which is deemed fit considering the gravity of the matter after completion of investigating proceedings within four weeks to the Chairman of the Audit Committee.

vi) Any two members of the Audit Committee will report to the Chairman of the action to be taken.

vii) The Director in all cases and employee in appropriate or exceptional cases shall have direct access with the Chairman of the Audit Committee.

12. CODE OF CONDUCT FOR DISCLOSURE UNDER SEBI PROHIBITION OF INSIDER TRADING)REGULATIONS, 2015

The Board approved the above Code of Conduct and the same was required be formulated and published on the company's website mgfltd.com .

A copy of the draft Code of Conduct, as is approved by the Board was also sent to the Stock Exchanges in token of its compliance.

13. Shareholder Information :

Annual General Meeting : 85th Annual General Meeting

Day & Date : Tuesday, September 29,2015

Time : 12.15. P.M.

Venue : The Executive Club, 439, Village Shahoorpur, P.O. Fatehpur Beri, New Delhi-110030

Financial Calendar :

(Tentative schedule)

Financial reporting for the quarter ended June 30, 2015

Second week of August, 2015

Financial reporting for the quarter ended September 30, 2015

Second week of November, 2015

Financial reporting for the quarter ended December 31, 2015

Second week of February, 2016

Financial reporting for the quarter ended March 31, 2016

Within 60 days of the close of the quarter

Means of Communication:

Quarterly/Half Yearly Financial Results of the company are forwarded to Bombay Stock Exchange and National Stock Exchange of India and published in Financial Express and Mahalaxmi newspapers. Half-yearly report is not sent to each household of shareholders as the results of the company is published in the newspapers. In addition to the above, the results are also available on the company's website: <http://www.mgfltd.com> for the information of all the shareholders.

Company has not made any presentation to any Institutional Investors / Analyst during the year.

Company has its own website and all the vital information relating to the company is displayed on the web site. Address of the website is http ://www.mgfltd.com  

14. Shareholders' Information

i) Annual General Meeting :

Tuesday, September 29, 2015

ii) Date of Book Closure :

Thursday, September 24, 2015 to Tuesday, September 29, 2015 (both days inclusive)

15. Registrar and Share Transfer Agents :

In compliance with SEBI directive M/s Alankit Assignments Ltd, , Alankit Heights, 1E/13, Jhandewalan Extension, New Delhi-110055. Tel No.011- 42541953/63 are carrying on assignment of both physical and demat mode.

However, keeping in view the convenience of shareholders, documents relating to the shares are continued to be received by the company at its Registered Office, at 4/17-B, Asaf Ali Road, New Delhi-110002, Telephone Nos. 23272216-18, 23278001-02.

16. Nomination Facility:

Shareholders are eligible to file their nominations against shareholdings. Nomination Forms are available at the Registered Office i.e. 4/17-B, Asaf Ali Road, New Delhi-110002. Those interested in getting the facility of nominations may write to the Company Secretary for a copy of the prescribed Nomination Form.

17. Share Transfer System:

If the documents are clear in all respects, completion of transfer of shares in physical mode generally taken is less than 15 days. The Share Transfer Committee has delegated the responsibility of share transfers to an officer of the company to expedite share transfers. Shares under demat and physical mode are transferred by the Registrar and Share Transfer Agent normally within 15 days.

18. Under Demat and Physical Mode:

Alankit Assignments Limited,

Alankit Heights ,1E/13, Jhandewalan Extension, New Delhi - 110 055.

Phones: 011-42541953/63

The undernoted officials of the company have been designated for speedy redressal of shareholder's/ investor's requests/queries.

19. Compliance Officer:

Sh. M. K. Madan

Vice President & Company Secretary & CFO

(ACS-2951) Phone No.23276872

20. Company Secretary:

Sh. M.K.Madan

Vice President & Company Secretary

(ACS-2951)

21. Address for Correspondence: Registered Office:

The Motor & General Finance Limited

MGF House,4/17B, Asaf Ali Road, New Delhi - 110 002.

Ph: 23272216-18, 23278001-02 Fax: 23274606

E-mail : mgfltd@hotmail.com   Website : www.mgfltd.com   

CIN No.L74899DL1930PLC000208

22. Listing on Stock Exchanges:

Bombay Stock Exchange Ltd

Phiroz Jee Jee Bhoy Towers, Dalal Street, Mumbai - 400 001

Ph : 022-22721234/33 Fax : 91-22-22721278/1557/3354/3577

National Stock Exchange of India Limited

Exchange Plaza, Plot No.C/1 G Block 5th Floor, Bandra Kurla Complex, Bandra, Mumbai - 400051.

Ph : 022-26598235/36 Fax : 022-66418124, 66418125, 66418126

Stock Code of the Company:

Bombay Stock Exchange(BSE), Mumbai

Electronic Mode : INE 861B01015

Scrip Name : The Motor & General Finance Ltd

Scrip Code : 501343

National Stock Exchange of India( NSE)

Electronic Mode : INE 861B01015

Scrip Name : The Motor & General Finance Ltd

Scrip Code : Motogenfin

Equity shares in Demat Form : INE 861B01015

Depository Connectivity : NSDL and CDSL