Corporate Governance

The Company firmly believes that strong corporate governance permits the company to benefit from greater transparency in its activities as well as in its relations with the market, thereby enhancing integrity and confidence.

The Board has considered this to be in the best interests of the stakeholder because they commit the Directors, Management and employees of the company to internationally recognized standards of corporate governance.

Ultimate responsibility for good corporate governance remains with the Directors who have therefore resolved to adopt the Principles and endorse them accordingly, except for those instances where particular circumstances exist that warrant non-adherence thereto, or at least postponement for the time being.

The Board is committed to improve further its corporate governance standards which are an ongoing process.

ROLE AND RESPONSIBILITIES OF THE BOARD OF DIRECTOR

The Board's key purpose is to ensure the company's prosperity by collectively directing the company's affairs, whilst meeting the appropriate interests of its shareholders and stakeholders.

THE BOARD IS PRIMARILY RESPONSIBLE FOR:

exercising prudent and effective controls and ensuring that such controls are appropriately reviewed for effectiveness and monitored for compliance on a regular basis;
determining the strategic aims and the organizational structure;
regularly reviewing management performance and ensuring that the Company has the appropriate mix of financial and human resources to run its business;
being conversant with relevant statutory and regulatory requirements;
ensuring that all Directors regularly attend meetings of the Board, agree business objectives, financial plans and general parameters within which the Board, the Board Committees and Management are to function;
ensuring that systems and controls are in place to mitigate significant business risks and that exposures are identified and properly managed;
setting appropriate business standards, codes of corporate governance and ethical behavior for all Directors and employees, as well as monitoring their performance;
appointing the CEO who is entrusted with day-to-day management of the Company and its operations, together with members of Management.

ROLES AND RESPONSIBILITIES OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER (CEO)

The roles of the Chairman and of the CEO are completely separate from one another to ensure clear division of responsibilities at the head of the Company. The Chairman is a non-executive Director who will be responsible for the nomination and selection of Country/Subsidiary directors, and CEO(s) in the respective of Subsidiary. The approved nominees will be submitted to the Group Board Nomination & Remuneration Committee (GNBRC). The Post approval from GNBRC, the same will be approved by NAC and Board of the Company.

The Chairman is responsible for leading the Board and setting its agenda, ensuring that the Directors receive precise, timely and objective information so that they can properly execute their duties, encouraging their active engagement in meetings and issues and ensuring effective communication with shareholders.

The CEO is the most senior executive of the Company and is responsible for:
• Continue to be responsible for managing and of optimizing the business.
• Continue to be fully accountable and responsible to lead the franchise and will be expected to update GCEO by means of regular meetings/ communications (e.g. periodic reports, teleconference, meetings and any other reports as required by FIMBank).
• Be responsible for preparation and presenting their respective franchise budget and/or Long Range Plan (LRP) to the GCEO for approval, in addition to any proposed items and/or decisions which may be material to the results of the franchise.

COMMITTEES:

The Board has constituted several committees to deal with specific matters and for operational convenience, delegated powers for different functional areas to different Committees.

The composition, terms of reference and functioning of the Committee(s) are decided by the Board of Directors. The composition, terms of reference and functioning of the Committee(s) can be delegated to Executive Committee, if required.

The Company has constituted following Board and Management Level committees as required under the various applicable statutes:

• AUDIT COMMITTEE (AC)
• BOARD RISK COMMITTEE (BRC)
• NOMINATION, APPOINTMENT AND COMPENSATION COMMITTEE (NAC)
• EXECUTIVE COMMITTEE (EXCO)
• INVESTMENT COMMITTEE (IC)
• ASSET LIABILITY COMMITTEE (ALCO)
• RISK MANAGEMENT COMMITTEE (RMC)
• INTERNAL COMMITTEE (IC)
• HARASSMENT, BULLYING AND DISCRIMINATION (HBD)
• HEALTH AND SAFETY COMMITTEE
• CORPORATE SOCIAL RESPONSIBILITY (CSR)
• OPERATIONAL RISK MANAGEMENT COMMITTEE (ORMC)
• IT STEERING COMMITTEE

AUDIT COMMITTEE

The Composition, Meeting, Quorum, authority etc. will be as per the regulatory Acts and Guidelines. The primary responsibility of the Committee is to appoint or recommend appointment of Statutory / Internal and System auditor approve and ensure implementation of the audit procedures and techniques, review the financial statements and financial reporting system, internal control systems, approve related party transaction and ensure compliance with regulatory guidelines.

BOARD RISK COMMITTEE (BRC)

The Board Risk Committee (BRC) of the Board is primarily constituted for compliance with the RBI guidelines and shall provide assistance to the Board of Directors in fulfilling its responsibility to the shareholders, investors and stakeholders by:

a. Assessing, and providing oversight to management relating to the identification and evaluation of all risks inherent in the business of the Company which includes, but not limited to strategic, credit, operational, legal, regulatory and external risks and the control processes with respect to such risks;

b. Overseeing the risk management framework of the company including development and execution of policies and strategies proposed by the management to mitigate the risks.

NOMINATION, APPOINTMENT AND COMPENSATION COMMITTEE (NAC)

In terms of the requirement of RBI directions on Corporate Governance, it is desired that appointment of directors with ‘fit and proper’ credentials is well recognized in the financial sector.

Accordingly, the Board of the Company has constituted a Nomination, Appointment and Compensation Committee to ensure that members of the Board meet fit and proper credentials and take on records other document at the time of appointment.

EXECUTIVE COMMITTEE

To align with the policies of the group, it is suggested to constitute Executive Committee (EXCO). This EXCO charter establishes the authority and responsibility conferred by the Board to the Executive Committee (the ‘EXCO’).

The EXCO is delegated to act as a first stop where proposals making their way to the Board, or conversely decisions emanating from the Board, are reviewed, considered and formulated. The EXCO shall have powers to consider, review and make recommendations to the Board and, in certain situations, also to take decisions on behalf of the Board.

INVESTMENT COMMITTEE (IC)

The Investment Committee shall provide assistance to the Board of Directors in assessing and providing oversight to management relating to the requirement of investments required to be taken by the company, the risks inherent to these investments, performance of the investments and the control processes thereof and review and execution of policies and strategies proposed by the management for investments.

ASSET LIABILITY COMMITTEE (ALCO)

The Primary functions of the Asset Liability Committee (ALCO) is to review and evaluate the policies, strategies, programs and procedures proposed by the management with regards to ALM, which includes, but not limited to, interest rate risk, liquidity risk, market risks, exchange risk and capital risks relating to the Company's balance sheet, review the policies and procedures proposed by the management under compliance with the ALM guidelines set by Reserve Bank of India, as applicable for the company.

RISK MANAGEMENT COMMITTEE CHARTER (RMC)

The Basic duties and responsibilities of the RMC is to Identify and review all major Risks to the business, assess its adequacy and recommend for approval to the BRC, Oversee the implementation of the risk mitigation framework and controls in the Company, review and approve credit proposals as per limit delegated in the Risk Policy as approved by the Board and evaluate and recommend credit proposals to BRC which are above the powers of RMC.

INTERNAL COMMITTEE (IC)

The Company has constituted an Internal Complaints Committee (IC), to which complaints can be made, in the manner prescribed under the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013.

The Charter guides the Committee to prevent sexual harassment against employees, by promoting gender equality among employees and outsourced staff.

HARASSMENT, BULLYING AND DISCRIMINATION (HBD)

The Company has constituted Harassment, Bullying and Discrimination Committee (HBD), to Prevent discrimination, bullying and harassment, including sexual harassment against employees, by promoting equality among employees and outsourced staff.

HEALTH AND SAFETY COMMITTEE

To align with group policy, Board has approved the constitution of Health and Safety Committee to provide and maintain safe and healthy working conditions, provide Employees with safe and reliable equipment and systems together with the necessary information, instruction and training to achieve this.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The primary responsibilities of CSR committee is to formulate, recommend and annually review, if required, the CSR Policy and associated frameworks, processes, practices and areas of CSR activities of the Company and make appropriate recommendations to the Board and ensure implementation of the same.

OPERATIONAL RISK MANAGEMENT COMMITTEE

The primary and responsibility of ORMC is to ensure operational risk identification and measurement and cover all activities/products/processes of the company, and compliant with the Group’s standards and applicable regulations, and that risk control and risk origination decisions are properly informed.

IT STEERING COMMITTEE

The IT Steering Committee is a management vehicle to implement, control and priorities IT investments to support the business purpose of the Company.

CODE OF CONDUCT AND POLICIES OF THE COMPANY

The Company has in place Code of Conduct for employees which provides for employees to conduct their business and affairs in compliance with applicable laws, rules and regulations of India. The Code is applicable to all employees of the Company.

Further, the Company has formulated following Policies to conduct Operational and Administration of the Company in accordance with applicable laws.

• ALCO
• AML Policy
• Compliance Policy
• Employee Handbook
• Fair Practice Code
• Grievances Policy
• Harassment and Bullying Policy
• Investment Policy
• Know Your Customer Policy
• Policy on Selection Criteria / “Fit & Proper” Criteria for Directors
• Pricing Policy
• Promotion Policy
• Related Party Transaction Policy
• Remuneration Policy
• Risk Policy and Guidelines
• Whistle Blower Policy / Vigil Mechanism
• Health and Safety Policy
• Operational Risk Framework
• Corporate Social Responsibility
• IT Policy

AUDITORS:

STATUTORY AUDITORS

The Board and the Audit Committee of the Company shall be responsible to appoint Statutory Auditors who demonstrate professional ability and independence. The Company shall review the independence and performance of the Statutory Auditors and the effectiveness of the audit process periodically. Declaration shall be obtained from the Auditors affirming their eligibility for being appointed as the Statutory Auditors of the Company.

INTERNAL AUDITOR

The Board is ultimately responsible for the identification and evaluation of key risks applicable to the different areas of the business of the Company, and for ensuring that proper systems of internal control are in place. The internal auditor shall performs periodic audits to specifically test compliance with policies, standards and procedures and the effectiveness of the internal control environment within the Company. To ensure the effectiveness of the internal systems of control the Internal Auditor shall reviews and tests such systems independently from Management, adopting a risk-based approach. The Internal Auditor reports to the Audit Committee, however, the Chairman of the Board of Directors is copied with all internal audit reports issued.

DISCLOSURES

The Company is committed to make adequate disclosures based on the principles of transparency, timeliness, fairness and continuity. The Board of Directors and employees of the Company shall ensure and make necessary disclosures to the Company, the Regulator(s) / Statutory Authorities, the Shareholders, Investors, Members or other stakeholders as may be required by the applicable laws and the codes / policies of the Company.

The Board of Directors of the Company or such other person authorized by the Board or any law / regulation, shall ensure that all the disclosures statutorily required to make on behalf of the Company are duly made to the Regulatory / Statutory authorities or such other persons as maybe required under applicable laws / regulations.

REVIEW OF POLICY

The Policy shall be subject to review as and when required.