Muthoot Capital Services

Corporate Governance

Good corporate governance practices are the basis for sustainable business that aims at generating long term value to all its stakeholders. The Company acknowledges its responsibilities to its shareholders and endeavors to pursue its policies and procedures to satisfy its legal and ethical responsibilities as a good corporate citizen and believes that all its operations and actions must serve the underlying goal of enhancing overall shareholder value over a sustained period of time.

Listing Agreement

The Company has always ensured that there is proper compliance of Clause 49 of the Listing agreement pertaining to the following areas:

Board of Directors

The Board of Directors and their Committees are vested with such powers as to guide the Company’s management in the correct and proper direction to meet the performance demanded by the stakeholders.

The Articles of Association of the Company provides that the number of Directors of the Company shall not be less than three and more than twelve.

The Board of Directors of the Company has an optimum combination of Executive and Non-Executive directors, with not less than fifty percent of them being Non-Executive and Independent Directors. The Chairman of the Board is also a Non-Executive Director.

None of the Directors of the Board hold office of Director in more than 15 Companies, a member of more than 10 Board Committees and Chairman of more than 5 Board Committees across all Companies in which they are Directors. All the Directors make the necessary annual disclosure regarding their directorships and Committee positions and intimate the changes to the Company as and when they take place.

All the Compliance Reports applicable to the Company are placed before the Board which reviews the same and initiates the necessary actions, if any required, in case of non-compliance.

Board Meetings

The Board of Directors regularly meets to lead and guide the Company’s management. The Provisions of Companies Act, 1956, and Listing Agreement are complied with regard to the meeting of the Board of Directors. The Board meets at least 4 times a year, with a maximum time-gap of four months between any two consecutive meetings.

Code of Conduct

The Company has adopted a code of Conduct for all the directors and senior management of the Company.

Committees of the Board

To effectively tackle and to bring about expedient solutions to the issues, the Board is empowered to form a Committee of directors, the managing director or any other principal officer of the Company. The Listing Agreement requires the constitution of Audit Committee, Remuneration Committee and Shareholders/Investors Grievance Committee. The Company also has a share transfer Committee. All the Committees function according to the terms of reference. The minutes of the meetings of all Committees of the Board are placed before the Board for discussions / notings.

Details of Various Committees are as under:

Audit Committee

Scope and functions:

Some of the major areas of the scope and functions of Audit Committee are as under:

  • review with the external Auditors, financial statements and reports in order to ensure their transparency and correctness
  • provide a channel for communication between the Board and Audit function
  • Evaluate the performance of the internal auditors and consequently recommend their appointment.
  • Review the follow up actions Management on the weakness of internal accounting procedures and controls as highlights by External and Internal Auditors.
  • Review any significant transactions which are not within the normal course on business and any related party that may arise within the Company or group.
  • review interim financial information and press releases
  • Review accounting policies to determine suitability.
  • Review and approve the Annual Report prior to presentation to the Board of Directors for approval and subsequent dispatch to the shareholders.
  • Review any MIS or such other management control or audit system that s being proposed for implementation in the Company along with the External and Internal Auditors.

Composition

The Committee comprises of 4 non executive directors of whom majority are independent. All the members of the Audit Committee are financially literate and has necessary accounting or related financial management expertise. The chairman of the Audit Committee is an independent director. The Audit Committee may invite such of the executives, as it considers appropriate to be present at the meetings of the Committee, if necessary.

The Company Secretary acts as the Secretary of the Committee.

Meetings

The audit committee shall meet at least four times in a year and not more than four months shall elapse between two meetings.

Quorum

Two members or one third of the members of the audit committee whichever is greater, but there should be a minimum of two independent members present.

Shareholders / Investors Grievance Committee

Role

To look into redressing shareholders and investors complaints like transfer of shares, non- receipt of Balance Sheets, non- receipt of declared dividends etc.

Composition

The Committee is chaired by a non- executive director and consists of 3 directors. The Secretary of the Company acts as the Secretary of the Committee.

Remuneration Committee

Role

  • To review the performance of the Managing / Whole time Directors
  • To review and recommend remuneration / Compensation packages for the Executive Directors, within the prescribed limits

Composition

The Committee consists of 3 independent directors

The Non-executive directors shall not be entitled to receive any remuneration from the Company except by way of Sitting Fees and Commission. The fees/compensation, if any, paid to Non-Executive Directors, including Independent Directors, shall be fixed by the Board of Directors. However, the prior approval of the shareholders would have to be sought, in the event of the fees being in excess of the limits prescribed under the Companies Act, 1956.

Shareholders

Shareholders shall be provided with the details regarding the appointment and re-appointment of a Director. Quarterly results and presentations made by the company to analysts shall be put on company’s web-site, or shall be sent to the stock exchange on which the company’s shares are listed.

Disclosures

The Company shall make the following disclosures, as statutorily required:

  • Basis of related party transactions
  • Disclosure of accounting treatment
  • Board disclosures – Risk management
  • Proceeds from public issues, rights issues, preferential issues, etc.
  • Remuneration of Directors
  • Management
  • Shareholders

CEO/CFO Certification

The necessary certifications regarding the financial statements, internal controls, etc. shall be made by the CEO/CFO to the Board

Compliance Officer

The Company Secretary acts as the Compliance Officer of the Company

Policies adopted by the Company

The following policies have been framed and adopted by the Company, Viz.,

  • Fair Practice Code
  • KYC Policy
  • Code of Conduct for Prevention of Insider Trading

The above policies may be reviewed from time to time.

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