In terms of Clause 49 of the listing agreement, Section 292A of the Companies Act, 1956 and Non-Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 the Board has constituted Audit Committee of the Board of Directors.
The Audit Committee consists of three independent, non–executive director and one non-independent non-executive director of the Company viz., Shri Rajendra P. Chitale as Chairman, Shri V. N. Kaul, Dr. Bidhubhusan Samal and Shri Amitabh Jhunjhunwala as members. All the members of the Committee posses financial/accounting exposure. The Audit Committee inter alia advises the management on the areas where systems, processes, measures for controlling and monitoring revenue assurance, internal audit and risk management can be improved. The minutes of the meetings of the Audit Committee are placed before the Board.
The terms of reference of the Audit Committee are in accordance with all the items listed in clause 49(II) of the Listing Agreement as follows:
- Overseeing of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial information is correct, sufficient and credible;
- Recommending the appointment, re-appointment and replacement / removal of statutory auditor and fixation of audit fees;
- Approving payment for any other services by statutory auditors;
- Reviewing with management the annual financial statements before submission to the Board, focusing primarily on;
- Matters required to be included in the Director’s Responsibility Statement included in the report of the Board of Directors.
- Any changes in accounting policies and practices and reasons thereof.
- Major accounting entries based on exercise of judgment by management.
- Qualifications in draft audit report, if any.
- Significant adjustments arising out of audit.
- Compliance with listing and other legal requirements concerning financial statements.
- Disclosure of related party transactions.
- Reviewing with the management, the quarterly financial statements before submission to the Board for approval;
- Reviewing with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or right issue, and making appropriate recommendations to the Board to take up steps in the matter;
- Reviewing with the management, the performance of statutory and internal auditors, the adequacy of internal control systems;
- Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
- Discussion with internal auditors on any significant findings and follow up thereon;
- Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
- Discussion with statutory auditors before the audit commences about nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
- To look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (in case of non-payment of declared dividends) and creditors;
- To review financial statement of subsidiary companies, in particular its investments;
- To review the functioning of the Whistle Blower mechanism;
- To approve appointment of Chief Financial Officer after assessing qualification, experience, and background etc.
- Carrying out all other functions as is mentioned in the terms of reference of the Audit committee;
Review the following information:
- Management Discussion and Analysis of Financial Condition and Results of Operations.
- Internal audit reports relating to internal control weaknesses.
- Management letters/ letters of internal control weaknesses issued by statutory auditors.
- Statement of significant related party transactions, and
- The appointment, removal and terms of remuneration of the Chief internal auditor.
The Audit Committee has the following powers:
to investigate any activity within its terms of reference;
- to seek any information from any employee;
- to obtain outside legal and professional advice;
- to secure attendance of outsiders with relevant expertise, if it considers necessary.
Stakeholders Relationship Committee
In accordance with the requirements of Clause 49 in the Listing Agreement, the Company has constituted a Committee named “Shareholders / Investors Grievance Committee”, which is responsible for attending the grievances of the shareholders. As per provisions of Section 178 of the Companies Act, 2013 (the ‘Act’), every listed Company has to constitute a Committee which will be named “Stakeholders Relationship Committee”, if the number of shareholders, debenture holders, deposit holders and other security holders in the Company exceeds one thousand or more. In view of above requirement which has become effective from April 1, 2014, the Board renamed it as the “Stakeholders Relationship Committee” to resolve the grievances of all the stakeholders of the Company and to perform all other work as per Act. The Committee has three members consisting of Dr. Bidhubhusan Samal as Chairman, Shri Rajendra P. Chitale and Shri Amitabh Jhunjhunwala as Members.
Nomination and Remuneration Committees
The Nomination and Remuneration Committee of the Board is constituted to formulate from time to time (a) process for selection and appointment of new directors and succession plans and (b) recommend to the Board from time to time, a compensation structure for directors and the manager. Presently, the Company has no executive director.
Pursuant to Section 178 of the Companies Act, 2013, it is mandatory to set up a “Nomination and Remuneration Committee” with expanded scope. The Nomination and Remuneration Committee comprises of three directors, viz; Shri Rajendra P. Chitale as Chairman, Shri Amitabh Jhunjhunwala and Dr. Bidhubhusan Samal as Members.
Shri V. R. Mohan, President & Company Secretary acts as the Secretary to the Nomination and Remuneration Committee.
Managerial remuneration policy
The Nomination and Remuneration Committee determines and recommends to the Board, the compensation of the Directors and the Manager. The key components of the Company’s Remuneration Policy are:
a. Compensation will be a major driver of performance.
b. Compensation will be competitive and benchmarked with a select group of companies from the service sector.
c. Compensation will be transparent, fair and simple to administer.
d. Compensation will be fully legal and tax compliant.
Employees Stock Option Scheme (ESOS) Compensation Committee
The ESOS Compensation Committee comprises of four directors viz: Dr. Bidhubhusan Samal as Chairman, Shri Rajendra P. Chitale, Shri Amitabh Jhunjhunwala and Shri V. N. Kaul as Members. Shri V. R. Mohan, President & Company Secretary acts as the Secretary to the ESOS Compensation Committee.
Corporate Social Responsibility (CSR) Committee
The CSR Committee was constituted by the Board on July 4, 2014 considering requirements of the Companies Act, 2013 relating to the constitution of a CSR Committee. The Committee consists of Dr. Bidhubhusan Samal as Chairman, Shri Amitabh Jhunjhunwala and Shri V. N. Kaul as Members.
The Committee’s prime responsibility is to assist the Board in discharging its social responsibilities by way of formulating and monitoring implementation of the framework of ‘Corporate Social Responsibility Policy’.
The Committee’s constitution and terms of reference meet with the requirements of the Companies Act, 2013.
Risk Management Committees
The Company has laid down a robust Risk Management Policy, defining Risk profiles involving Strategic, Technological, Operational, Financial, Liquidity, Organisational, Legal and Regulatory risks within a well defined framework. The Risk management Policy acts as an enabler of growth for the Company by helping its businesses to identify the inherent risks, assess, evaluate and monitor these risks continuously and undertake effective steps to manage these risks.
The Risk Management Committee is headed by Shri V. N. Kaul, Director and comprises senior executives of the Company as members, who periodically reviews the robustness of the Risk Management frame work. The periodical update on the risk management practices and mitigation plan of the Company and subsidiaries are presented to the Audit Committee and Board of Directors.
The Audit Committee and Board periodically review such updates and findings and suggest areas where internal controls and risk management practices can be improved.
Asset Liability Management Committees (ALCO)
Asset Liability Management Committee (ALCO) consisting of senior management executives, monitors liquidity and interest rate risks of the Company. The functioning of ALCO is reviewed by the RMC which meets on quarterly basis and reports to the Board of Directors.