Corporate Governance

Corporate Governance refers to the system of rules, practices and processes by which a Company is directed and controlled. It provides the structure through which a Company sets its objectives and the framework within which these objectives are pursued in the context of the social, regulatory and market environment

Governance essentially involves aligning the interests of the various stakeholders in a company and encompasses practically every sphere of management, from action plans, internal controls to performance measurement and corporate disclosures.

1) CUMI’S CORPORATE GOVERNANCE PHILOSOPHY

Carborundum Universal Limited (“CUMI”), a constituent of the Murugappa Group, is committed to highest standards of Corporate Governance in all its activities and processes. Key elements in Corporate Governance are transparency, internal controls, risk management, internal/ external communications and good standards of safety and health. The Board recognises that governance expectations are constantly evolving and is committed to keeping its governance standards under review to meet both letter and spirit of the law and its own demanding levels of business ethics. CUMI considers Corporate Governance as the cornerstone for sustained superior performance and for serving all its stakeholders. The Company’s continuing contribution to the society through meaningful Corporate Social Responsibility initiatives, be it directly through the CUMI Centre for Skill Development or indirectly through contributions to eligible implementing agencies in the choosen sectors of health & education, plays a signifi cant role in its governance standards. The entire process begins with the functioning of the Board of Directors, with leading professionals and experts serving as Independent Directors and represented in various Board Committees.

The Corporate Governance philosophy of the Company is driven by the fundamental principles of:

  • - Adhering to the governance standards beyond the letter of law;
  • - Maintaining transparency and high degree of disclosure levels;
  • - Maintaining clear distinction between personal and corporate interest;
  • - Having a transparent corporate structure driven by business needs and
  • - Ensuring compliance with applicable laws.

2) BOARD OF DIRECTORS

The Board being aware of its fiduciary responsibilities, recognises its responsibilities towards all stakeholders to uphold highest standards in all matters concerning the Company and has empowered responsible persons to implement its broad policies and guidelines and has set up adequate review processes.

The Board provides strategic guidance on aff airs of the Company. The Independent Directors provide an objective judgment on matters placed before them.

The Company’s day to day aff airs are managed by the Managing Director, assisted by a competent management team under the overall supervision of the Board. The Company’s commitment to ethical and lawful business conduct is a fundamental shared value of the Board, senior management and all its employees.

Consistent with its Values and Beliefs represented by the Five Lights - spirit of the Murugappa Group, the Company has formulated a Code of Conduct applicable to the Board and senior management which is posted in the website of the Company at http://www.cumimurugappa. com/policies.html. An annual declaration is obtained from every person covered by the Code of Conduct. A declaration to this eff ect signed by the Managing Director is annexed to this Report. During the year, this Code was revised duly incorporating the duties of the Independent Directors as laid down in the Companies Act, 2013.

The Board is committed to representing the long term interests of the stakeholders and in providing eff ective governance over the Company’s aff airs and exercise reasonable business judgment on the aff airs of the Company.

2.1) Composition

The Board has been constituted in an appropriate manner, to preserve its independence and to separate the Board functions of governance and management. The Board members are eminent persons and have collective experience in diverse fi elds of technology, engineering, banking, management, legal and compliance. The Directors are elected based on their qualifi cation and experience in varied fi elds.

As at 31st March 2015, the Board comprises of 8 members with majority of them being Independent Directors. The posts of Chairman and the Managing Director are held by seperate persons.

2.2) Board Meetings

The Board has a formal schedule of matters reserved for its consideration and decision to ensure that it exercises full control over signifi cant, strategic, fi nancial, operational and compliance matters. These include

  • setting performance targets, reviewing operations and fi nancial performance against set targets;
  • evolving and guiding corporate strategy;
  • overseeing major capital expenditure / acquisition / investments;
  • monitoring the eff ectiveness of governance practices;
  • appointment of KMPs and overseeing succession planning;
  • ensuring integrity of accounts / fi nancial reporting and ensuring
  • adequacy of internal control systems besides overseeing risk management;
  • overseeing prompt disclosure / communication / reporting to shareholders;

Besides, information on statutory compliance of applicable laws, minutes of meetings of the sub- committees of the Board, summary of decisions taken at the Board meetings of the subsidiary companies and information required under the listing agreement are provided to the Board on a quarterly basis. The Board periodically reviews the compliance of applicable laws and gives appropriate directions wherever necessary.

Timely and relevant information is provided by the Company to the Directors to facilitate eff ective participation and contribution during the meeting(s). The agenda and notes thereon are circulated in advance for facilitating meaningful discussions at the meetings. The Chairman and Company Secretary in consultation with other concerned members of senior management fi nalise the agenda. The agenda papers are posted on an exclusive online portal equipped with adequate security features to enable instant access by Directors to the Board papers of the Company.

During the year ended 31st March 2015, there was no Indian subsidiary company which was eligible to be classifi ed as material non-listed Indian subsidiary as per the terms of the Listing Agreement. The Board reviews the signifi cant transactions and arrangements of unlisted subsidiary companies besides being apprised of their business plan and performance. During the year, the Company has formulated a policy for determining ‘material’ subsidiaries. A copy of the policy is available on the website of the Company and the link is https://www.cumi-murugappa.com/ policies.html.

The Company has laid down procedures to inform the Board members about the risk assessment and minimisation procedures. The Board reviews the signifi cant business risks identifi ed by the management and the mitigation process being taken up.

The dates of the Board meeting are fi xed in advance for the full calendar year. During the year ended 31st March 2015, seven Board meetings were held on 30th April 2014, 1st August 2014, 1st November 2014, 19th December 2014, 28th January 2015, 29th January 2015 and 21st March 2015. Besides the formal Board meetings, the Independent Directors hold meetings without the presence of the Non-Independent Directors and members of the management. Three such meetings were held on 1st November 2014, 28th January 2015 and 21st March 2015 during the year. In the meetings, the Independent Directors inter alia reviewed the performance of Non-Independent Directors and the Board as a whole, reviewed the performance of the Chairman taking into account views of the Executive and Non-Executive Directors and also assessed the quality, quantity and timeliness of fl ow of information between the management and the Board.

2.3) Details of the Board Members as on 31st March 2015

Name

Category

No. of Directorships / (Chairmanships)
in companies excluding CUMI ª

No. of Committee memberships/
(Chairmanships)
in companies excluding CUMI b

No. of board meetings attended

Attendance at last 
AGM

Shares held in CUMI

Mr. M M Murugappan
DIN - 00170478
Promoter & Non Executive Director  14(5) 8(4) 5 Yes 6,96,340

Mr. T.L. Palani Kumar
DIN - 00177014

Non-Executive & Independent Director

3

2 (1)

6

Yes

Nil

Mr. Shobhan M. Thakore
DIN - 00031788

Non-Executive & Independent Director

10

5 (2)

4

Yes

Nil

Mr. M. Lakshminarayan
DIN - 00064750

Non-Executive & Independent Director

7(1)

3 (1)

6

Yes

Nil

Mr. Sanjay Jayavarthanavelu
DIN - 00004505
Non-Executive & Independent Director

11 (4)

2

4

Yes

Nil

Mr. Aroon Raman
DIN - 00201205

Non-Executive & Independent Director

8

2

6

Yes

Nil

Mr. Bharati Rao
DIN - 01892516

Non-Executive & Independent Director

9

8

4

NA

Nil

Mr. K. Srinivasan 
DIN - 00088424

Managing Director

5

2

7

Yes

2,55,704

a. Excludes Directorships in Foreign companies.

b. Includes only Audit & Stakeholders Relationship Committee.

# Appointed as an Additional Director w.e.f. 1st November 2014.

2.4) Changes in Board composition during the financial year 2014-15

Name

Category

Nature of change

Remarks

Mr. Bharati Rao

Independent Director

Appointed as an Additional Director

Shareholders approval for appointment as an Independent Director u/s 149 of the Companies Act, 2013 is being sought at the 61st AGM.

Mr. K Srinivasan

Managing Director

Re-appointed as Managing Director

Shareholders approval for the re-appointment as Managing Director for the term 1st February 2015 to 22nd November 2017 is being sought at the 61st AGM.

During the year, the other following Directors were appointed as Independent Directors under Companies Act, 2013

Name

Category

Nature of change

T L Palani Kumar

Independent Director.

Appointed as an Independent Director u/s 149 of the Companies Act, 2013 for a term of 5 years from 1st August 2014.

Shobhan M Thakore

Appointed as an Independent Director u/s 149 of the Companies Act, 2013 for a term of 3 years from 1st August 2014.

M Lakshminarayan

Appointed as an Independent Director u/s 149 of the Companies Act, 2013 for a term of 3 years from 1st August 2014.

Sanjay Jayavarthanavelu

Appointed as an Independent Director u/s 149 of the Companies Act, 2013 for a term of 5 years from 1st August 2014.

Aroon Raman

Appointed as an Independent Director u/s 149 of the Companies Act, 2013 for a term of 5 years from 1st August 2014.

As and when an appointment is made by the shareholders u/s 149 of the Companies Act, 2013, a formal letter of appointment is given to the Independent Director. The format of the letter containing the general terms and conditions is available at www.cumi.murugappa.com/pdf/2014/oct/Terms-of-reference.pdf.

2.5) Board Familiarisation Process

The Members of the Board are provided with many opportunities to familiarise themselves with the Company, its management and its operations. At the time of appointing a Director, a formal letter of appointment is given to him/her, along with a Directors handbook which inter alia explains the role, function, duties and responsibilities expected of him/her as a Director of the Company. The Handbook also enumerates the list of compliance obligations and other disclosures required from the Director under the Companies Act, Clause 49 of the Listing Agreement and other relevant regulations.

By way of an introduction to the Company, the newly inducted Director is presented with the corporate dossier which traces the Company’s history over 60 years of its existence and gives a glimpse of value chain of its products. The Managing Director at the fi rst Board meeting in which the Director participates makes a detailed presentation on the Company, its various business segment, profi le, geographic spread, organisation structure and other market related information. Exclusive plant visits are also organised for the new Director. With a view to familiarise the existing Directors with the Company’s operations, on an ongoing basis, plant visits are periodically organised for them. During the year, a visit of the facilities at Hosur was arranged in January 2015.

The familiarisation programme enables the Directors to understand more about the Company, its businesses and processes in the dynamic regulatory framework thus enabling him / her to eff ectively fulfi ll their role as a Director of the Company. The details of the familiarisation programme is available on the Company’s website at the following link https://www.cumi-murugappa.com/ policies.html.

2.6) Board Evaluation

During the year, the Board conducted an evaluation of its own performance, individual directors as well as the working of the Committees in the manner as stated in the Directors’ Report.

3) BOARD COMMITTEES

The Board has constituted various committees to support it in discharging its responsibilities. There are five committees constituted by Board - Audit Committee, Nomination & Remuneration Committee, Risk Management Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.

The Board at the time of constitution of each Committee determines the terms of reference and also delegates further powers from time to time. Various recommendations of the Committees are submitted to the Board for approval and the minutes of meetings of all Committees are circulated to the Board for information.

3.1 Audit Committee

Terms of Reference

The role of the Audit Committee includes overseeing the fi nancial reporting process and disclosure of fi nancial information, review of fi nancial statements before submission to the Board, review of adequacy of internal control system, findings of internal audit, related party transactions, scrutiny of inter-corporate loans & investments, approval of related party transactions, valuation of assets / undertakings of the Company, appointment of registered valuers etc., besides recommending the appointment of statutory auditors and their remuneration to the Board and approval of payments to statutory auditors for non-audit services. The Audit Committee also reviews the financial statements of unlisted subsidiary companies, in particular, the investments made by them. During the year, the terms of reference of the Committee were amended to include the requirements as per the Companies Act, 2013 and the revised clause 49 of the Listing Agreement with the stock exchanges.

Composition & Meetings

The Audit Committee comprises entirely Independent Directors and all its members are fi nancially literate. The Chairman of the Board, the Statutory Auditor, the Cost Auditor, Internal Auditor and members of the Management Committee are invited to attend all meetings. Further, as a good corporate governance practice, a separate discussion of the Committee with the Statutory Auditors and the Internal Auditors without the presence of the management and other Directors is held periodically.

During the year, the Committee had fi ve meetings for reviewing the fi nancial statements and considering the internal audit reports and audit plan. Mrs. Bharati Rao has been inducted as a member. Composition and attendance of the Committee members at the meetings held during the year are given below:

Name of member

No. of meetings attended
(No. of meetings held)

Mr. T L Palani Kumar
(Chairman)

5 (5)

Mr. M Lakshminarayan

5 (5)

Mr. Sanjay Jayavarthanavelu
(member from 30th July 2013)

4 (5)

Bharati Rao (Member from
1st November 2014)

2 (2)

The Chairman of the Audit Committee was present in the last Annual General Meeting held on 1st August 2014.

3.2 Nomination & Remuneration Committee

Terms of Reference

The Role of the Committee is to (a) recommend to the Board the appointment of Directors (b) recommend re-election of Directors retiring by rotation (c) recommend the remuneration including pension rights and periodic increments of the Managing/ Whole-time Director(s) (d) determine the annual incentive of the Managing / Whole time Director(s) (e) recommend to the Board, the Commission payable annually to each of the non- Whole-time Directors, within the limits fi xed by shareholders (f ) formulate, implement, administer and superintend the Employee Stock Option plan/Scheme(s) of the Company (g) formulating criteria for appointment of Directors and senior management and identifi cation of persons who may be qualifi ed to be appointed in these positions (h) devise policy on Board diversity (i) formulate criteria for evaluation of Board (j) recommend remuneration policy to the Board (k) Ensuring Board Diversity etc.

During the year, the Committee has formulated the criteria for determining the qualifications, positive attributes and independence of a Director and the criteria for senior management positions in terms of section 178(3) of the Companies Act, 2013 besides laying down the criteria for Board evaluation. The Committee also recommended to the Board a policy on remuneration for Directors, Key Managerial Personnel and other employees. The policy is available on the Company’s website at the following link https://www.cumi-murugappa.com/policies.html.

This Committee was earlier designated as the Compensation and Nomination Committee and effective 30th April 2014 has been re-designated and its terms of reference were amended to include the requirements as per the Companies Act, 2013 and the revised clause 49 of the Listing Agreement with the stock exchanges.

Board Diversity Policy

The Company recognises and embraces the benefits of having a diverse Board. The Board diversity policy has been formulated to ensure an optimum composition of the Board such that the talent of all members of the Board blends together to be eff ective. The Board diversity policy sets out the approach in this regard. A truly diverse Board comprising of appropriately qualifi ed people with a broad range of experience relevant to the business of the Company, is integral to its success and is also an essential element in maintaining a competitive advantage on a sustainable basis.

In line with the policy, the Board is balanced by members having complementary knowledge, expertise and skills in areas such as business strategy, finance, legal, marketing, engineering, technology and such other areas that the Board considers desirable.

Composition & Meetings

The Committee comprises of three members with all of them being Independent Directors. The Committee met on four occasions during the year. The composition and attendance of Committee members are given below:

The Committee met on three occasions during the year. The composition and attendance of Committee members are given below:

Name of member

No. of meetings attended
(No. of meetings held)

Mr. M Lakshminarayan
(Chairman)

4 (4)

Mr. T L Palani Kumar

4 (4)

Mr. Shobhan M Thakore

2 (4)

3.3 Risk Management Committee

Terms of Reference

The Board has constituted a Risk Management Committee for overseeing the risk management in the Company.

The role of this Committee is to periodically review the Risk Management Policy and the annual risk management framework and ensure that they are comprehensive and well developed, to periodically review the process for systematic identifi cation and assessment of the business risks, to assess the critical risk exposures by specialised analysis and quality reviews and report to the Board the details of any signifi cant developments relating to these and the steps taken to manage the exposures, to identify and make recommendations to the Board, to the extent necessary on the resources and staffi ng required for eff ective risk management.

Composition & meeting

The Committee comprises of an Independent Director who is the Chairman of the Committee and the Managing Director. The Management Committee members are invited to the meetings.

The Committee met on two occasions during the year. The composition and attendance of Committee members are given below:

Name of member

No. of meetings attended
(No. of meetings held)

Mr. M Lakshminarayan
(Chairman)

2 (2)

Mr. K Srinivasan

2 (2)

3.4. Stakeholders Relationship Committee

Terms of Reference

The terms of reference of this Committee includes formulation of investors’ servicing policies, review the redressal of investors complaints and approval / overseeing of transfers, transmissions, transpositions, splitting, consolidation of securities, demat / remat requests, finalise terms of issue of debt instruments including debentures and approve their allotment, administering the unclaimed shares suspense account and authorising the terms of various borrowings and creating security in respect thereof, allotment of shares on exercise of Options by employees under the Employees Stock Option Scheme and performing other functions as delegated to it by the Board from time to time. This Committee was earlier designated as the Share Transfer Finance and Investor Grievance committee and effective 30th April 2014 has been re-designated as Stakeholders Relationship Committee and the terms of reference were amended to include the requirements as per the Companies Act, 2013 and the revised clause 49 of the listing agreement with the stock exchanges.

Composition & Meetings

The Committee met on four occasions during the year. The composition and attendance of Committee members are given below:

Name of member

No. of meetings attended
(No. of meetings held)

Mr. M M Murugappan
(Chairman)

4 (4)

Mr. K Srinivasan

4 (4)

During the year, there were two investor service complaints pertaining to non-receipt of dividend warrant and non rematerialisation of shares each. Both have been resolved to the satisfaction of the shareholders. There were no investor service complaints pending as at 31st March 2015.

The Board has appointed Ms. Rekha Surendhiran, Company Secretary as the compliance offi cer for the purpose of compliance with the requirements of the Listing Agreement.

Karvy Computershare Private Limited, Hyderabad, is the Company’s Registrar and Share Transfer Agents (RTA). The contact details are available in the General Shareholder Information section of the Report.

3.5 Corporate Social Responsibility Committee

Terms of Reference

The Board has constituted a Corporate Social Responsibility (CSR) Committee in line with the requirements of the Companies Act, 2013 for assisting the Board in discharging its corporate social responsibility. The Board has approved a CSR policy formulated and recommended by the Committee which is uploaded and available on the Company’s website at the following link http:// www.cumi-murugappa.com/policies.html. The functions of the Committee includes recommending the amount of expenditure to be incurred on the CSR activities, monitor the implementation CSR activities of the Company as per the CSR Policy from time to time and instituting a transparent monitoring mechanism for implementing the CSR activities.

Composition & meeting

The Committee comprises of two Independent Directors and the Managing Director as its members. The Management Committee members are invited to the meetings.

The Committee met on three occasions during the year. The composition and attendance of Committee members are given below:

Name of member

No. of meetings attended
(No. of meetings held)

Mr. Shobhan M Thakore (Chairman)

3 (3)

Mr. Aroon Raman
3 (3)

Mr. K Srinivasan

3 (3)

4. DIRECTORS’ REMUNERATION

4.1 Policy

The compensation of the Managing Director comprises a fixed component and a performance incentive based on certain preagreed parameters. The compensation is determined based on levels of responsibility and scales prevailing in the industry. The Managing Director is not paid sitting fees for any Board / Committee meetings attended by him. The Managing Director has been granted options under the Employee Stock option scheme, 2007. However, during the year 2014-15 no fresh grants were made.

The compensation to the Non-Executive Directors takes the form of commission on profit. Though shareholders have approved payment of commission upto 1 per cent of net profit of the Company for each year, the actual commission paid to the Directors is restricted to a fi xed sum. This sum is reviewed periodically taking into consideration various factors such as performance of the Company, time spent by the Directors for attending to the aff airs and business of the Company and extent of responsibilities cast on Directors under general law and other relevant factors.

In keeping with evolving trends in industry, the practice of paying diff erential commission to Directors based on time spent by them has also been adopted. The Non-Executive Directors are also paid sitting fees within the limits set by government regulations for every Board / Committee meeting attended by them.

During the year, the commission and sitting fees payable to the Board members were reviewed and appropriately increased within the limits prescribed under the Companies Act, 2013.

4.2 Remuneration for 2014-15

Non-Executive Directors

  Rs.million

Name

Sitting fees

Commission(a)

Mr. M M Murugappan

0.18

7.50

Mr. T L Palani Kumar

0.31

0.75

Mr. M Lakshminarayan

0.34

0.75

Mr. Shobhan M Thakore

0.18

0.75

Mr. Sanjay Jayavarthanavelu 0.18 0.75
Mr. Aroon Raman 0.19 0.75
Mr. Bharati Rao * 0.15 0.31

Total

1.52

11.56

@ Will be paid after adoption of accounts by shareholders at the sixty fi rst Annual General Meeting

* Appointed as an Additional Director w.e.f. 1st November 2014

Managing Director

Rs. million

Name

K Srinivasan (a)

 

Fixed Component

Salary & Allowances

10.52

Retirement benefits

1.53

Perquisites

0.58

Variable Component

Incentive(b)

2.86

(a) Mr. K Srinivasan was re-appointed as Managing Director by the Board from 1.2.2015 till 22.11.2017 subject to the shareholders’ approval at the 61st annual general meeting. He is subject to all other service conditions as applicable to any other employee of the Company including termination with 3 months’ notice.

(b) Represents incentive paid in 2014-15 in respect of the fi nancial year 2013-14.

(c) As per the terms of his remuneration, the Managing Director is eligible for an annual incentive based on a balanced scorecard which comprises of company fi nancials, company scorecard and personal objectives. For 2014-15 a sum of Rs.3.5 million has been provided in the accounts for this purpose. The actual amount will be decided by the Nomination and Remuneration Committee in August 2015.

(d) With respect to the Employee Stock Options granted to the employees under the Employees Stock Option Scheme, 2007 the options are accounted based on the intrinsic value, as permitted by applicable SEBI Guidelines. Since options are granted at the closing market price prior to the date of the grant, the intrinsic value of the options is Nil. During the year, no fresh options were granted. As required under clause 49 of the Listing Agreement, the details of the options granted earlier to Mr. K Srinivasan are available in the Employees Stock Option scheme details annexed to the Directors Report.

5. GENERAL BODY MEETINGS

5.1 Last Three Annual General Meetings

Financial Year

Date

Time

Venue

2011-2012

07.08.2012

2.30 PM

T T K Auditorium,
Music Academy,
New No.168, T T K Road,
Royapettah,
Chennai 600 014.

2012-2013

30.07.2013

2.30 PM

2013-2014

01.08.2014

3.00 PM

Tamil Isai Sangam,
Rajah Annamalai Mandram,
5, Esplanade Road,
Chennai 600 108

5.2 Special Resolutions passed during the last three Annual General Meetings

Sl.No.

Item of business

Passed on

1. Amendment in the Carborundum Universal Limited Employee Stock Option scheme 2007 07.08.2012
2. Constitution of CUMI Employee Stock Option Plan 2012 07.08.2012
3. Payment of Commission to nonexecutive Directors not exceeding 1% of the Net Profit 30.07.2013
4. Authorising the Board to borrow a sum of Rs.5000 million over above the paid– up-capital and free reserves either by way of term loans, inter-corporate deposits, external commercial borrowings or by issue of debentures etc. as and when required. 01.08.2014
5. Authorising the Board to create a mortgage / charge on the movable and immovable properties of the Company in favour of the lenders / Trustees of the debentures, whenever the Company in the ordinary course of business resorts to borrowings. 01.08.2014

Postal Ballot: During the year, there were no resolutions passed through postal ballot and as at the year end there are no proposals to pass special resolutions through postal ballots except those requiring to be passed pursuant to the Companies Act, 2013 which will be done after providing adequate notice to the shareholders.

6. WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Company has established a whistle blower mechanism to provide an avenue to raise concerns, in line with the Company’s commitment to the high standards of ethical, moral and legal conduct of business. The mechanism also provides for adequate safeguards against victimisation of employees who avail of the mechanism and also for appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee.

This policy was amended eff ective 30th April 2014 to include the requirements as per the Companies Act, 2013 viz., extending the coverage of the policy to the Directors of the Company. The Ombudsman for dealing with any referrals made by Board members is the Chairman of the Audit Committee. The Whistle blower policy is available on the Company’s website at the following link https://www.cumi-murugappa.com/policies.html. It is affi rmed that during the year, no employee has been denied access to the Audit Committee.

7. PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company in line with SEBI (Prohibition of Insider Trading) Regulations. The code governs the procedures relating to trading in securities of the Company, trading window closure norms and other disclosure requirements. The Company Secretary is responsible for implementation of the Code. All Board Directors and the designated employees have confi rmed compliance with the Code.

8. DISCLOSURES

During the year, there were no material transactions entered into with Related Parties. The Company has devised a policy on dealing with Related Party Transactions and the same is available in the website of the Company in the link http://www.cumi-murugappa. com/policies.html

Further, there were no instances of non-compliance by the Company nor were there any penalties or strictures imposed on the Company by the stock exchange and SEBI or any statutory authority on any matter related to capital markets in the preceding three years.

9. MEANS OF COMMUNICATION

Your Company recognises the significance of dissemination of timely and relevant information to shareholders. In order to enable the stakeholders to understand the fi nancial results in a meaningful manner, the Company gives a press release along with the publication of quarterly / annual fi nancial results.

The quarterly unaudited fi nancial results and the annual audited fi nancial results are published in Business Line (in English) and Makkal Kural (in Tamil). Press releases are given to all important dailies. The fi nancial results, press releases and presentations made to institutional investors/ analysts are posted on the Company’s website i.e. www.cumi.murugappa.com.

10. MANAGEMENT DISCUSSION & ANALYSIS REPORT

In order to avoid duplication and overlap between the Directors’ Report and a separate Management Discussion & Analysis (MD&A) Report, the information required to be provided in the MD&A has been given in the Directors Report itself as permitted by the Listing Agreement.

11. NON MANDATORY REQUIREMENTS

The quarterly fi nancial results are published in leading fi nancial newspapers, uploaded on the Company’s website and any major developments are conveyed in the press releases issued by the Company which is also posted in the Company’s website. The Company, has therefore not sent the half yearly performance update individually to the shareholders of the Company. The expenses incurred by the Chairman in performance of his duties are reimbursed. Other non-mandatory requirements have not been adopted at present.

12. CEO/CFO CERTIFICATION

Mr. K Srinivasan, Managing Director and Mr. Sridharan Rangarajan, Chief Financial officer have given a certificate of the Board on matters relating to fi nancial reporting, compliance with relevant statutes and adequacy of internal control systems as contemplated in clause 49 of the listing agreement.

13. AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE

The Auditor’s certifi cate on Corporate Governance is annexed.

14. GENERAL SHAREHOLDER INFORMATION

A separate section in this regard is annexed and forms part of this Report.

15. SHAREHOLDERS SATISFACTION SURVEY

During the year, the Company has carried out a shareholders satisfaction survey. Besides sending the physical forms to shareholders who have not registered their e-mail ID with the Company, the forms were also electronically mailed and made available at the Company’s website on the following link http:// www.cumi-murugappa.com/survey/index.php. Any shareholder who has not yet submitted the survey can go to the above link and take part in the survey and provide us their valuable feedback.

16. INSTRUCTIONS TO SHAREHOLDERS

Shareholders holding shares in physical form are requested to address their communications regarding change in address / contact details by quoting their folio number to the Company’s RTA or to the Company by emailing to investorservices@cumi.murugappa.com. Shareholders holding shares in electronic form may send their communications regarding above to their respective Depository Participants.

Shareholders are encouraged to avail nomination facility and approach RTA or their Depository Participants in this regard. Nomination is only optional and can be cancelled / varied by the shareholder at anytime.

Shareholders are requested to register their e-mail IDs with the RTA/Depository Participants to enable the Company to send communications electronically.

General Shareholder Information

Murugappa Group Abrasives & Ceramics Manufacturers