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Mukesh Steels Ltd.

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Mukesh Steels Ltd. Accounting Policy

CORPORATE GOVERNANCE REPORT

The Securities and Exchange Board of India (SEBI) ushered in a formal code of Corporate Governance (hereinafter "the Code") through Clause 49 in the Listing Agreement executed by the Company with stock exchanges. Clause 49 lays down several corporate governance practices which listed companies are required to adopt. The Code has been periodically upgraded to ensure the adoption of best corporate governance practices by the corporates. This report sets out the compliance status of the Company with the requirements of corporate governance, as set out in Clause 49, for the financial year 2010-11.

Company's Philosophy on Corporate Governance

MUKESH STHHLS LIMITED has established good practices in corporate governance, which is implemented by a qualified Board of Directors, MUKLSH STEELS LIMITEDS Corporate Governance Principles uphold its global standing at the forefront of corporate governance best practice and conforms to regulatory and legal requirements, such as the terms of Listing Agreements with Stock Exchanges. In addition, it incorporates several practices aimed at a high level of business ethics, effective supervision and enhancement of value for all stakeholders. It takes feedback into account in its periodic reviews of the guidelines to ensure their continuing relevance, effectiveness and responsiveness to the needs of investors and all other stakeholders.

Principles

Mukesh Steels Limited corporate governance practices are organized around the following main principles:

Recognizing the Respective Roles and Responsibilities of Board and Management

To establish an effective mechanism for overseeing the affairs, keeping in view the Company's complexity and geographical operations and corporate tradition and culture, Mukesh Steels Ltd.'s framework is designed to:

Enable the board to provide strategic guidance for the company and effective overseeing of the management.

? Ensure a balance of authority such that no single individual has unfettered powers.

Having A Board Of An Effective Composition, Size And Commitment To Adequately Discharge Its Responsibilities And Duties

To ensure effectiveness of the Board, facilitating efficient discharge of duties and adding value in the context of the company's circumstances, the Board periodically reviews its composition and size for ensuring a strong element of independence and commitment. Accordingly the Board is structured in such a way that:

It has a proper understanding of, and competence to deal with, the current and emerging issues of the business and the benefit of a variety of perspectives and skills.

It has the appropriate mix of executive and non-executive directors ensuring Directors' commitment and time to participate in the affairs fully.

Timely and Balanced Disclosure of All Material Matters Concerning the Company

To give investors an equal and timely access to material information, and to ensure that company announcements are factual, balanced and in compliance with the applicable provisions of law, the Company has put in place a mechanism to ensure that:

• All investors have equal and timely access to material information concerning the Company - including its financial situation, performance and governance.

• Company announcements are factual and presented in a clear and balanced way, disclosing both positive anti negative information.

Highest Importance To Investor Relations

To ensure long term shareholder value creation and to promote shareholder participation in corporate affairs. Mukesh Steels Ltd. has established and maintained communication strategies, including a policy for clarity in notices of meetings. Mukesh Steels Ltd endeavors are to empower its shareholders by:

Communicating effectively with them.

Giving them appropriate information about the company.

Compliance With Clause 49 Of The Listing Agreement

Mukesh Steels Limited's shares are listed on four Stock Exchanges in India. Clause 49 of the listing agreement entered into with the stock exchanges sets out conditions of corporate governance which the listed companies arc required to comply with.

1. Board of Directors

Your Board of Directors closely monitors the performance of the Company and Management, approves and reviews the strategies and determines the remuneration of Managing Director based on its performance. Your Board ensures statutory and ethical conduct with high quality financial reporting. It holds itself accountable to the shareholders as well as other stakeholders for the long term welt being of the Company.

The Company's Board presently consists of a majority of non­executive/independent directors, many of whom are acknowledged as leading professionals and industrialists in their respective fields.

As on date the Board comprises of 8 Directors out of which 3 are Executive Directors and 5 are Non-Executive Directors. Out of 8 Directors 5 are independent directors and 3 are non-independent directors. Thus Company has well complied with the norm that at least 50% of the directors should be independent.

Director's Profile:

Brief Resume of all the Directors, nature of their expertise in special functional areas is provided below;

Mr. Krishan Chand Gupta, 71 years, Chairman cum Managing Director is the promoter / director of our Company. He is a Graduate and an experienced entrepreneur with experience of over 49 years in the Iron and Steel Industry. He has an extensive knowledge of the Industry, lie looks after the entire gamut of activities under the supervision and control of the Board of Directors.

Mr. Deepak Gupta, 38 years, Graduate in Commerce, started his career by joining his father's business at an age of 22 years. He is looking after the operations of our factory. He has to his credit a total experience of 16 years in our Company.

Mr. Gulshan Wadhwa, 57 years. Bachelor of Arts, is having an experience of 39 years in the Steel Industry. He is serving as President of Gomti Education Trust involved in opening of various educational institutions, He is having a vast experience in trading and manufacturing in the Iron & Steel industry. After education, he joined the family business of steel trading and then set up a unit for manufacturing of auto parts.

Mr. Vinod Gossain, 53 years. Bachelor of Arts is having an experience of 32 years in all aspects of the h-on & Steel Industry. Presently he is in charge of the Rolling Mill Division and looking after production and planning.

Mr. Arun Goyal, 50 years, has an experience of 32 years in the Iron & Steel Industry. He advises on marketing and developing the marketing strategy for our Company. He is self employed and is associated with the Steel Industry as an advisor.

Mr. Naresh Batra, 37 years, M. Com and Chartered Accountant is a practicing Chartered Accountant having an experience of 16 years in the area of accounts and finance. He is the Chairman of Audit Committee of our Company.

Mr. Ashok Kumar Gupta, 58 years. Graduate, is having experience in the field of accounts & finance. Presently he is an independent advisor in accounting and financial matters. He is also serving as Trustee / Member for various educational and religious organizations,

Mr. Kartar Singh Arora, 62 years, is a businessman having an experience of 42 years. Earlier, he was associated with Aarti Steels Limited and M/s Salagram Shivprasad in Managerial capacity.

Board Procedure

It has been the policy of the company that in addition to matters which are statutorily required to be approved by the Board, all policy/ planning matters, major decisions including Quarterly results of the Company as a whole and of its units/segments, financial "restructuring, capital expenditure proposals, mortgages, etc. are regularly placed before the Board. This is in addition to information with regard to actual operations, major litigations feedback etc.

Meetings

During the year Company held 9 Board meetings as against the minimum requirement of 4 meetings, one in each quarter. These were held on 30.04.2010, 31.07.2010, 24.08.2010, 03.09.2010,22.10.2010,30.10.2010,06,12.2010,31,01,2011 and 15.02.2011.

Committees of The Board

In accordance with the listing agreement of stock exchanges on Corporate Governance, the following Committees were in operation:

1. Audit Committee

2. Remuneration Committee

3. Shareholders'/Investors' Grievance Committee

Audit Committee

As a measure of Good Corporate Governance and to provide assistance to the Board of Directors in fulfilling the Board's oversight responsibilities, an audit committee has been constituted, headed by an Independent Director, Majority of the members are Independent "Directors and each members has rich experience in the financial and industrial sector.

Chairman: Mr. Naresh Batra

Members : Sh. Gulshan Wadhwa , Sh. Ashok Kumar Gupta

Functions of Audit Committee:

The functions of Audit Committee include those specified under the revised clause 49 of the Listing Agreement as well as under section 292A of the Companies Act,1956 such as:

a) To hold periodic discussions with the Statutory Auditors and Internal Auditors of the Company concerning the accounts of the Company, internal control systems, scope of audit and observations of the Auditors/internal Auditors:

b) To review compliance with internal control systems:

c) To review the quarterly, half-yearly and annual financial results of the Company before submission to the Board:

d) To investigate into any matter in relation to items specified in section 292A of the Companies Act,1956 or as may be referred to it by the Board and for this purpose to seek any relevant information contained in the records of the Company and also seek external professional advice, if necessary;

e) To make recommendations to the Board on any matter relating to the financial management of the Company, including the Audit Report.

f) To look into the reasons for substantial defaults in payments to depositors,debenture holders, shareholders (in the case of non-payment of declared dividends) and creditors.

Meetings and Attendance

During the financial year ended March 31, 2011 Audit Committee met 4 times i.e. on 30.04.2010. 31,07.2010, 30,10.2010 and 15.02.2011.

The Chairman of Audit Committee was present at the Annual General Meeting of the Company held on 30-09-2010 to answer the shareholder's queries.

Investors Grievance Committee

The Company has an investors Grievance Committee to redress the grievances of investors. It consists of following directors:

Chairman: Sh.Ashok Gupta

Members: Mr. Deepak Gupta, Mr. Naresh Batra

Functions:

a) To review the redressal of Shareholders and investors complaints.

b) To take note of complaints received and resolution thereof at periodic intervals.

The Company attends to Investors grievances/correspondence expeditiously and usually a reply is sent within 15 days of. receipt of letter except in the cases that are constrained by dispute or legal impediment.

Remuneration Committee

In order to have a credible and transparent policy in determining and accounting for the remuneration of the Executive directors on behalf of directors and shareholders, the Company has constituted a Remuneration Committee. The Constitution of Remuneration Committee is in accordance with the norms of Corporate governance. The Remuneration Committee consists of three directors and all three are independent directors.

Chairman: Sh. Ashok Gupta.

Members : Mr. Naresh Batra, Mr. Arun Goyal

Compliance Officer

Miss. Silvia Gumber is the Compliance Officer of the Company. The Compliance Officer can be contacted for any investor related matter relating to the Company on contact no. +91-161-2537702; and fax no. +91-161-2537337, E-mail: mukeshinv@yahoo co.in   

Disclosures

a) Related Party Transactions:

Related Party transactions are defined as transactions of the Company of a material nature, with Promoters, Directors or the Management, or their relatives and associate/subsidiary Companies etc., that may have potential conflict with the interest of the Company.

Transactions with related parties are disclosed in detail in Note 13 of Schedule XVI annexed to the financial statements for the year. Adequate care was taken to ensure that the potential conflict of interest did not harm the interests of the Company at large.

b) Legal Compliances

The Company follows a formal management policy and system of legal compliance & reporting to facilitate periodical review by the Board of compliance status of laws applicable to the Company and steps taken to rectify non-compliances, if any.

There were no instances of material non-compliance and no strictures or penalties were imposed on the Company either by SEBl, stock exchanges or any statutory authorities on any matter related to capital markets during the last three years.

c) Mandatory & Non-Mandatory Clauses

The Company has complied with all mandatory requirements laid down by the Clause 49. The non-mandatory requirements complied with have been disclosed at the relevant places.

General Shareholders Information:

Means of Communication

During the year, unaudited quarterly and annual financial results of the Company were submitted to the stock exchanges soon after the Board meeting approved these.

Full version of the annual report including the notice of Annual General Meeting, Management's discussion and analysis, Corporate governance report, balance sheet, profit and loss account, cash flow statement along with the schedules and notes thereon. Directors' report and Auditors' report are sent to the shareholders within the stipulated time.

b) Annual General Meeting

DATE & TIME

Friday, 30th  September, 2011 at 10:00A:M

VENUE

Registered Office of the Company at Miller Ganj. Gill Road. Ludhiana

c) Date of Books closure

Wednesday 28th September, 2011 to Friday, 30th September, 2011 [both days inclusive)

Financial Reporting of the Quarter ended June,2011. -15.08.2011

Financial Reporting for the Half year ending Sep,2011- Mid November, 2011

Financial Reporting of the quarter ending Dec. 2011 -Mid February, 2012

Financial Reporting for the year ending March, 2012 -Mid May, 2012

e) Registrar for Dematerialization {Electronic Mode) Of Shares & Physical Transfer of Shares

M/s Skyline Financial Services (P) Ltd

D-153/A, 1st Floor, Okhla Industrial Area, Phase-I, New Delhi-110020

Contact No: 011-26812682, 83&84 Fax No 011-26812681

f) Share Transfer System

The transfers which are complete in all respects are taken up for approval generally every ten days and the transferred securities dispatched to the transferor within 21 days. The Company has signed necessary agreements with two depositors currently functional in India viz. National Securities Depository Ltd. & Central Depository Services (India) Ltd. The transfer of shares in depository mode need not be approved by the Company.

g) Listing on Stock Exchanges

Company's equity shares are listed at the 4 stock exchanges as on 31st March,2011. The security code is 513265 and the details of the stock exchanges is as under:

1. Ludhiana Stock Exchange Limited ,

Feroze Gandhi Market, Ludhiana.

2. Delhi Stock Exchange Limited

DSH House, 3/1, Asaf Ali Road, New Delhi.

3. Bombay Stock Exchange Limited

Floor 25. P.J.Towers, Dalai Street, Mumbai.

4. Vadodara Stock Exchange Limited

Fortune Tower's, Sayajigunj, Vadodara.

h) Dematerialization Of Securities

The equity shares of the Company are traded compulsorily in the dematerialized segment of all the stock exchanges. The demat Security (ISIN) code of the company is INE953G01019.

j) Investors Correspondence

Al! queries of investors regarding the Company's Shares in Physical form may be sent to Registrar & Share Transfer Agents at the address mentioned above or to the Company at the following address:-

M/s Mukesh Steels Ltd.

Miller Ganj, Gill Road, Ludhiana.

Phone: 0161-2537702 Fax:-0161-2537337

I) Listing Fees

Listing fees for the year 2011-12 has been paid to the stock exchanges where the equity shares of the Company are listed within the stipulated time.

m) Unclaimed Dividend

Pursuant to section 205 C of the Companies Act, 1956 there were no Unclaimed dividends to be transferred by the Company to the Education and Protection Fund, during the year.

n) Plant Location

Giaspura Road, Ludhiana-141122. PUNJAB.

Phone: 0161-2511254,2510047

o) Compliance Officer

Miss. Silvia Cumber Miller Canj, Gill Road, Ludhiana-141003. PUNJAB.

Phone:0161-2537702, 2537337 E-mail: mukeshinv@yahoo.co.in  

For & on Behalf of the Board

Sd/- Krishan Chand Gupta

[Chairman)

Place; Ludhiana

Date: 03.09.2011