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Mysore Paper Mills Ltd.

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Mysore Paper Mills Ltd. Accounting Policy

CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with the Stock Exchange, a report on Corporate Governance in accordance with the SEBI prescribed format is given below.

1. COMPANY'S PHILOSOPHY :

MPM's philosophy on Corporate Governance is to attain highest level of transparency in all its operations, to deal with integrity and equity with its stakeholders including shareholders, employees, lenders and the Government, to employ skills that take pride in satisfying customer needs with superior products and services, to contribute towards higher productivity through team work and innovation, to consciously work towards conservation of resources and minimization of wastes of all forms, to achieve customer satisfaction with consistent supply of quality products at competitive prices.

2. BOARD OF DIRECTORS:

(i) Composition and Category of Directors :

The Board comprises of a Chairman, Managing Director, one Non Executive Director appointed by Government of Karnataka, Four independent Non-Executive Directors elected in the Annual General Meeting of the Company, one independent Non-Executive Director nominated by the Financial Institution & one special Director appointed by BIFR

a) Composition of the Board, their attendance at the Board Meetings, last AGM, details of Directorships Committee Memberships held by the Directors in other Companies and the shares of the company held by them are given hereunder:

(ii) The following changes have taken place during the year and the brief resume is as under :

Smt. K Ratna Prabha, IAS: Pursuant to the powers conferred under the Articles of Association of the Company, the Government of Karnataka nominated Smt. K Ratna Prabha, IAS, Additional Chief Secretary to GOK, Commerce & Industries Department, GoK as Director & also the Chairperson of the Company in place of Sri. M.N. Vidyashankar, IAS & Sri. V Umesh, IAS, vide Govt. Notification No.CI 49 CMI 2014(8) dated 22.03.2014 & CI-61-CMI-2014 dated 10.06.2014 respectively.

Sri. Naveen Raj Singh, IAS: Sri. Naveen Raj Singh, IAS was nominated as Managing Director of the Company by the Government of Karnataka in exercise of the powers conferred under Articles of Association of the Company in place of Sri M Maheshwar Rao, IAS vide Govt. Notification No.DPAR 749 SAS 2014 dated 3.9.2014. He assumed charge on 08th September, 2014 as Managing Director.

iii) Number of Board Meetings held and the dates on which held :

5 Board Meetings were held during the year 2013-2014 on 28th May, 2013, 19th August 2013, 20th December, 2013, 17th January, 2014 and 10th March, 2014. The gap between the two meetings was not more than 4 months.

a) Information placed before the Board of Directors :

It is the policy of MPM that in addition to matters statutorily requiring approval of the Board, all major items involving Purchases as per Transperancy Act, Capital Expenditure, Marketing, Legal, Finance, Human Resource and Forest matters are discussed by the Board. In line with this policy, all information laid down in the corporate governance code are being placed before the Board of Directors.

b) Board / Committee Meetings and its procedures:

The Company holds minimum of four Board Meetings in each year which are pre-scheduled at the end of each financial quarter. Apart from the four pre-scheduled Board Meetings, additional Board Meetings are convened by giving appropriate notice. The meetings are invariably held at the Registered Office of the Company. All Functional / Divisional Heads in the Company are advised to plan their functions well in advance particularly with regard to matters requiring discussion/approval of the Board /Committee Meetings.

The Board/Committee is given presentations covering Finance, Production, Marketing and other major schemes and operations of the Company wherever necessary. The Annual Agenda of the Board includes determining the Directors who shall retire by rotation and recommending appointment of Directors, authentication of Annual Accounts and approving Directors' Report, report on Corporate Governance etc. The Chairman, Managing Director and Company Secretary in consultation with other concerned team members of the senior management finalise the Agenda. The Agenda papers are circulated to the Directors, in advance, in the defined Agenda format. The Company Secretary records the minutes of the Board / Committee Meetings. The Draft minutes are circulated to all the members of the Board / Committee for their comments and the same are confirmed at the subsequent Board /Committee

Meetings and maintained under the loose leaf system. Action taken report on the decisions/minutes of the previous meetings will be placed at the immediately succeeding meeting of the Board/Committee for noting by the Board/Committee. The Company has held atleast one meeting in every quarter of the year and the maximum time gap between any two meetings was not more than four months. None of the Directors of the Company was a member of more than ten Committees nor the Chairman of more than five Committees across all Companies in which he/she was a Director.

3. BOARD COMMITTEE :

The Company has the following Sub-committees of the Board :

A. AUDIT COMMITT EE :

i] Brief description of terms of reference :

The role of the Audit Committee and its terms of reference cover the matter specified under clause 49 of the Listing Agreement as well as in Section 292-A of the Companies Act, 1956, which, inter-alia, include reviewing the financial statements, overseeing the Company's Annual Report process and discussions with internal and external auditors periodically about the scope of audit and adequacy of internal control systems. The Audit Committee also acts as a link between the Board of Directors and the internal and external auditors.

ii ] Composition, name of members and Chairperson :

The Audit Committee was constituted by the Board even much before the introduction of the Corporate Governance Code. The Audit Committee consists of the following independent, non-executive Directors and Executive Director as its members.

The Audit Committee has met 4 times during 2013-14 on 28th May, 2013, 19th August,2013, 20th December, 2013 and 10th March, 2014. At the invitation of the Audit Committee, the Statutory Auditors, Internal Auditors and head of Internal Audit Dept., and functional heads attended the Audit Committee meetings, to answer and clarify the queries raised at the Committee meetings. The Company Secretary acts as Secretary to the Committee.

4. REMUNERATION COMMITTEE :

The Board constituted a Remuneration Committee comprising of Sri. S Parameswarappa, Retd IFS, Chairman of the Committee, Sri C Shivashankar, non executive Directors. The Committee was constituted to recommend the remuneration package to the Directors. The Company is paying only the sitting fees of Rs.500/- to the Directors for attending the Board / Committee meetings. The Committee did not meet during the year as there was no requirement.

5. SHAREHOLDERS COMMITTEE :

(i) Shareholders'/ Investors Grievances Committee :

The Board had constituted a shareholder's/investor's Grievance Committee comprising of Sri. C Shivashankar, Chairman of the Committee, Sri. C B Patil Okaly and MD. The Committee looks into reddressal of shareholders complaints like transfer of shares, non receipt of Balance Sheet, non receipt of declared dividend etc. No complaint was received from the shareholder during the year under review. Outstanding complaints as on 31.3.2014 was nil. The Committee met 4 times during the year viz., 28th May, 2013, 19th August, 2013, 20th December, 2013 and 10th March, 2014. Sri. Mohan D Kulkarni, Company Secretary is the Compliance Officer.

(ii) Share Transfer Committee :

In order to expedite the process of Share transfers which are in physical form, the Board has delegated the powers of share transfers to a Committee comprising of MD Sri. Padam Kumar Garg, IPS, Chairman of the Committee, Sri. C Shivashankar and Sri. S Parameswarappa, IFS (Retd). The Share Transfer Committee met 15 times during the year 2013-14. The Share Transfer Committee attends to the Share transfer formalities. The business transacted at the Share Transfer Committee meetings are placed before the Board regularly. All valid share transfers during the year ended 31.03.2014 have been attended on time by the Committee.

6. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT:

A code of Conduct as applicable to the Directors and the members of the Senior Management had been approved by the Board. The code has been circulated to all the members of the board and Sr. Management and compliance of the same has been obtained by them. A declaration to this effect has been obtained from Managing Director. A copy of the code has been put on the Company's Website.

Declaration as required under Clause 49 of the Listing Agreement:

All Directors and senior management of the Company have affirmed compliance with the Code of Conduct for the financial year ended 31st March, 2014.

8. DISCLOSURES :

i] Disclosures on materially significant related party transactions that may have potential conflict with the interests of company at large - There were no such transactions during the year.

ii] Details of non-compliance by the company, penalties, strictures imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years - None.

10. GENERAL SHAREHOLDER INFORMATION :

i. Annual General Meeting

a) Date : 30.12.2014

b) Time : 11 AM

c) Venue : KAS Officers's Association No.1/1 (Near Police Commissioner Office), Infantry

Road,Bengaluru-560 001.

ii. At the ensuing AGM, there is no resolution proposed to be passed through postal ballot.

iii. Financial year :

Financial year : 1st April to 31st March Tentative calendar for financial year 2014-15:

- Results for quarter ending 30-06-2014 Last week of July, 2014

- Results for quarter ending 30-09-2014 Last week of Oct., 2014

- Results for quarter ending 31-12-2014 Last week of Jan. 2015

- Results for quarter ending 31-03-2015 Last week of Apr' 2015

iv. Date of Book Closure : 23.12.2014 to 30.12.2014 (both days inclusive)

v. Dividend Payment Date: - Nil -

vi. Listing on Stock Exchange at : Bombay Stock Exchange

vii. Stock Code : Bombay Stock Exchange - 502405

ix. Performance in comparison to broad based indices such as BSE Sensex, CRISIL Index etc. : Nil

x. Registrar and Transfer Agents:

M/s. Integrated Enterprises (India) Limited, # 30, Ramana Residency, 4th Cross, Sampige Road, Malleshwaram BENGALURU- 560 003 Tel Nos : 23460815 - 818 Fax : 080 - 23460819. Demat for equity shares ISIN No. : NSDL - ISIN - INE924FO1012 CDSL - ISIN - INE924F01012

xi. Share Transfer System:

All transactions relating to transfer, transmission, issue of duplicate share certificates etc., in physical form are processed and approved by the Share Transfer Committee which meets twice a month. Presently, the share transfers which are received in physical form are processed and the Share Certificate are returned within 15-20 days from the date of receipt, subject to the documents being valid and complete in all respects. The Company has, as per SEBI guidelines offered the facility of Transfer-cum-Demat.

xiii. Dematerialisation of shares & liquidity : About 33.71% of the Company's paid-up share capital has been dematerialised as on 31-03-2014. Trading in equity shares of the company at the stock exchange is permitted only in dematerialised format, as per Notification issued by the Securities and Exchange Board of India [SEBI].

xiv. Outstanding GDR's / ADR's / Warrants or any convertible instruments. Conversion dates and likely impact on equity - Nil.

xv. Plant Location :

PAPER TOWN, BHADRAVATI - 577 302

SHIMOGA DIST. KARNATAKA STATE Tel Nos. : (08282) 270201-8 Fax : (08282)270937 E-mail : works@mpm.co.in  

xvi. Address for Correspondence :

[a] The below mentioned Share Registrar & Transfer Agent of the Company may be contacted for transfer / transmission of shares, change of address, dematerialisation of shares and all other shares related matters:

M/s. Integrated Enterprises (India) Limited, # 30, Ramana Residency, 4th Cross, Sampige Road, Malleshwaram, BENGALURU - 560 003. Tel Nos : 23460815 - 818 Fax : 080 - 23460819. e-mail : alfint @ vsnl.com

[b] Query on Annual Report : The Company Secretary, The Mysore Paper Mills Limited,

# 16/4, Ali Asker Road, Bengaluru - 560 052. Tel Nos:22262334, 22266979 Fax : 22253478 e-mail : info@mpm.co.in cs@mpm.co.in Corporate Identification Number (CIN) : L99999KA1936SGC000173

Adoption of non-mandatory requirement of Clause 49 of Listing Agreement:

The Company complies with the following Non-mandatory requirements stipulated under Clause 49:

Remuneration Committee: The Company has constituted Remuneration Committee to recommend/ review remuneration package to the Directors. However, the Committee did not meet during the year as there was no requirement.

Audit Qualification: Company is in the regime of unqualified financial statements.

Non-Executive Chairman has been provided a Chairman's office, at the Company's expense and also allowed reimbursement of expenses incurred in performance of duties as per the Government of Karnataka Order dtd. 17.06.2002 and its communication dtd. 30.04.2009.

The above report was placed before the Board at its meeting held on 18.11.2014 and was approved. The Compliance Certificate from the auditors of the company is annexed herewith.