SYMBIOSIS INSTITUTE OF MANAGEMENT STUDIES

Corporate Governance
Narayana Murthy report ON RELIANCE COMMUNICATION LIMITED
FACULTY NAME Dr. Prof Mita Mehta
BATCH 2011-2013 DIVISION - B

By, Vivek Sirohi B56 Narayana Murthy Committee

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Clause 49 Listing Company SEBI had constituted a Committee on Corporate Governance under the Chairmanship of Shri N. R. Narayana Murthy. Based on the recommendations of the Committee and public comments received, certain amendments were made in Clause 49 of the Listing Agreement, vide circular dated August 26, 2003. SEBI convened another meeting of the Narayana Murthy committee on Corporate Governance be convened on November 17, 2003 for deliberating the suggestions and representations received after the issuance of the aforesaid circular. The committee has since submitted its report to SEBI. The report proposes certain amendments in the revised clause 49 which was issued vide circular dated 26th August 2003

Mandatory Recommendations Audit committee: is the bedrock of quality governance. Committee suggested that the audit committee of publicly listed company's should be required to review the following information: 1. 2. 3. 4. 5. 6. 7. Financial statement and draft audit report Management discussion and analysis of financial conditions and result of operation Report relating to compliance with laws and risk management Management letters of internal control weakness issued by statutory internal auditors. Record of related parties transaction Related Party transaction: Statement of transaction with related parties. Proceeds from intial public offerings: Companies raosing money through intial public offering should disclose to audit committee. The use an application of funds under majority heads on quarterly basis. 8. Risk management : The committee as deemed it necessary for the boards of committee to be fully aware of the risk involved in the business. 9. Code of conduct: The committee has recommended that it should be obligatory for board of a company to laid down the code of conduct for all management. 10. Nominee director: The committee recommended doing way with nominee director. If a corporation wishes to appoint a director on the board. Search appointment should be made by the shareholder

Reliance Infra
Infrastructure , EPC, Power Incorporated in 2004 Owner: Anil Dhirubhai Ambani Launch of Reliance CDMA,GSM Services Domain Name: www.rcom.co.in Online chat service for customers One of the most compliant companies to CG Telecom Company NSE: RCOM BSE: 532712 Market Cap. : 14293.20 (Rs.Cr)

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Data Analysis
1. Board of Directors As on March 31, 2012, the Board consisted of five members Conduct of Board proceedings o The day to day business is conducted by the executives and the business heads of the Company under the direction of the Board led by the Chairman Board meetings o The Board held four meetings during financial year 2011-12 on May 30, 2011, August 13, 2011, November 12, 2011 and February 10, 2012. o The maximum time gap between any two meetings was 89 days and the minimum gap was 74 days. o The meetings are normally held at Mumbai. Other directorships o None of the directors hold directorships in more than 15 public limited companies. Membership of Board committees o No director holds membership of more than 10 committees of Board nor any director is a chairman of more than 5 committees of Board.

2. Audit Committee In terms of Clause 49 of the listing agreement as well as Section 292A of the Companies Act, 1956, the Board has constituted Audit Committee of the Board of Directors at its meeting held on February 8, 2006. At present, the Committee consists of all the four independent non executive directors of the Company

3. Nomination/ Remuneration Committee The Nomination/ Remuneration Committee of the Board is constituted to formulate from time to time process for selection and appointment of new directors and succession plans and recommend to the Board from time to time, a compensation structure for directors and the manager. Presently, the Company has no executive director.

4. Disclosures There has been no instance of non compliance by the Company on any matter related to capital markets during the last three years and hence no penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI or any other statutory Authority

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Findings
o o o o o Some data provided by both companies is vague and inference could not be drawn from that which leads to multiple complexity Nominations of new directors do not involve the shareholders as suggested in N.M report The code of conduct has been adopted only for directors and senior management whereas N.M report suggests it should be done for all management Rel Com audit committee involves the role of involving outsiders wherever necessary which is not mentioned in N.M report Reliance Communication is comparatively more compliant to CG report by Narayana Murthy

Conclusion
o o o Every guidelines mentioned in the CG report should carry some standard format Thus the guidelines should be clear so that every individual carry out the procedure clearly There should be justification to every guidelines and it should match up with the company policy

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