Introduction

Corporate governance is about commitment to values and about ethical business conduct. It is about how an organization is managed. This includes its corporate and other structures, its culture, policies and the manner in which it deals with various stakeholders.

Corporate governance is primarily the responsibility of the Board as a group. The Board performs its duties with the support of managerial staff. Accordingly, timely and accurate disclosure of information regarding the financial situation, performance, ownership and governance of the company is an important part of corporate governance. This improves public understanding of the structure, activities and policies of the organization. Consequently, the organisation is able to enhance the trust and confidence of the stakeholders.

Corporate Governance Philosophy and Practice

The Company believes in adopting, adhering and benchmarking itself against the best recognized corporate governance practices. Good corporate governance practices stem from the culture and mindset of the organization. While practicing good corporate governance your company strives to communicate, all the material developments and its financial performance in a timely, meaningful and truthful manner.

The Company has infused the philosophy of corporate governance into all its activities. It has adopted 10 cardinal principles such as Team Work, Open to Change, Integrity & Discipline, Transparency, Care, Risk Adjusted Returns, Unlearn Old Ways & Learn New Ways, Innovation, Entrepreneurial Spirit and Passion to Excel which serves as the means for implementing the philosophy of corporate governance in letter and spirit.

Further the Company believes that an active, well-informed and Independent Board is necessary to ensure the highest standards of Corporate Governance. The Board oversees the performance of the company and ensures shareholder protection and maximization of their long term values. There is also an active participation of Independent Directors in the Company.

Guidelines on Corporate Governance

In pursuance of the guidelines issued by the Reserve Bank of India, the Company has framed the following internal Guidelines on Corporate Governance.

A. Board of Directors

The Board is responsible to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. The Board of Directors along with its constituted Committees provide, direction and guidance to the Company’s Leadership Team and further directs, supervise as well as reviews the performance of the Company.

As the Directors occupy fiduciary position, they are expected to attend and actively participate in Board meetings and Board Committee meetings thereof, on which they serve and properly discharge their responsibilities.

The Board is responsible for overall compliance with the corporate governance of the Company and oversees the business affairs, in doing so they must act honestly, in good faith and in the best interests of the Company. Further the Board has a vital role to play in the matters relating to Policy Formulation, implementation and strategic issues which are crucial for the long term development of the organization.

Size of the Board

As per the Articles of Association (AoA) of the Company, the Board strength is required to be a minimum of 3 and maximum of 12 directors.

Board Composition

The Company’s Board shall have an optimum combination of Executive, Non-Executive and Independent Directors in line with the requirements of the provisions of the Companies Act,1956
and Articles of Association of the Company.

Independent Directors

Independent Directors are eligible for sitting fees for attending the Board and Audit Committee Meetings. The sitting fees plus traveling expenses on actual shall be within the prescribed limits of Companies Act, 1956 and as decided by way of passing a Board resolution.

The Non-Executive Independent Directors of the Company are not eligible for any compensation in whatever manner unless approved by the Board and other regulatory requirements.

Board Meetings

The Board Meetings of the Company shall be held as per the minimum requirement prescribed under the Companies Act, 1956 and as decided by the Board of Directors. The meetings of the Corporate Governance PolicCorporate Policy- 2011 Corporate Governance Policy/November 2011 Page 3 Board will be held at the Company’s corporate office or registered office unless otherwise decided by the Board of Directors.

Information to be placed before Board of Directors

To enable the Board members to discharge their responsibilities effectively and take informed decisions, a comprehensive agenda folder, with explanations on each item, is sent to each Director well in advance of the Board meeting. All the items on the agenda are discussed in detail, during the Board meeting. The Board members have complete access to any information, within the Company and to any employee of the Company. At the meetings, the Board is provided with all the relevant information on important matters affecting the working of the Company as well as the related details that require deliberation by the members of the Board.

Agenda for the Meeting

The agenda for the Board Meeting and Board Committee meetings shall be sent to the Board members within reasonable period of time prior to the Meeting. Each Board member is free to suggest the inclusion of items on the agenda. With the permission of the Chair each Board member is also free to raise at any Board Meeting matters that are not on the agenda and any other matter can be placed for discussion. All information relevant to the agenda to be discussed at an upcoming Board Meeting shall be distributed in writing or electronically to all members as far as possible to facilitate informed decisions at the Meeting. However, with reference to any sensitive matter on the agenda, relevant information can be made available only at the time of the Board Meeting.

Attendance at Board Meetings

The Board Meetings shall be attended by the Directors and on invitation of the Board by the selected Executives, Experts / Consultants and others. In case of a Director cannot attend specific Board Meeting, he or she shall obtain leave of absence from the Board.

Minutes

The minutes of all meetings of the Board shall be circulated to the Board and shall be noted in the next Board Meeting.

B. Board Committees

In order to focus on the critical functions of the Company, the Board may constitute such Committees as and when required to ensure smooth functioning of the Company. The Board has Corporate Governance PolicCorporate Policy- 2011 Corporate Governance Policy/November 2011 Page 4 constituted various Committees namely Audit Committee, Risk Oversight Committee and
Remuneration and Nomination Committee.

Details of the various committees are as under:

i) Audit Committee

The Audit Committee constitution and functioning is in compliance with the provisions of Companies Act, 1956. The powers and terms of reference of the Audit Committee are comprehensive and include the requirements as set out by Section 292A of the Companies Act, 1956. The Committee is vested with necessary powers, as defined in its Charter to achieve its objectives.

Composition:

The Audit Committee of the Company shall have minimum of three Directors, 2/3rd of them being Non-Executive Directors, who shall meet all applicable legal requirements with respect to independence, financial literacy, accounting or related financial expertise etc. The members of the Audit Committee are appointed by the Board of Directors.

The Chairman of the Committee shall be a Non-Executive himself who shall be present at Annual General Meeting to answer shareholder queries.

The Audit Committee Meeting shall be attended by;
- Members of the Audit Committee
- Internal Auditors
- Statutory Auditors as and when invited
- Such other invitees at the discretion of the Chairman of the Committee
- Company Secretary to act as the secretary to the Committee

Frequency of the meetings
At least one meeting of the Committee is to be held per quarter including one prior to the finalization of the Annual Accounts.

Quorum

Two members or one third of the Members of the Audit Committee which ever is greater.

Role of the Committee
The Audit Committee will undertake such duties as decided by the Board of Directors and any such duties delegated to it.

Minutes

The Company Secretary will maintain minutes of the meetings of the Audit Committee.

ii) Risk Oversight Committee (“ROC”)

The Risk Oversight Committee shall consist of not less than 3 members as may be decided by the Board. This is line with the requirements of the RBI regulations on Risk Committee. The company secretary shall act as the secretary of the committee. A quorum will comprise any two ROC members. The Committee may meet as frequently as may be required.

The Risk Oversight Committee will undertake such duties as decided by the Board of Directors and any such duties delegated to it.

Minutes

The Company Secretary will maintain minutes of the meetings of the Risk Oversight Committee.

• progress made in putting in place a progressive risk management system, and risk management policy and strategy followed and


• conformity with corporate governance standards viz. in composition of various committees, their role and functions, periodicity of the meetings and compliance with coverage and review functions, etc.