Internal Guidelines On Corporate Governance

1.Company`s philosophy on code of governance

As a TVS Group Company, the Company has a strong legacy of fair, transparent and ethical governance practices. The Company`s philosophy on corporate governance is founded on the fundamental ideologies of the group viz., Trust, Value and Service.

The Company believes in ensuring corporate fairness, transparency, professionalism, accountability and propriety in total functioning of the Company, which are pre-requisites for attaining sustainable growth in this competitive corporate world.

Obeying the law, both in letter and in spirit, is the foundation on which the Company`s ethical standards are built. The Company would constantly endeavour to improve on these aspects.

The Company ensures good governance through the implementation of effective policies and procedures, which is mandated and reviewed by the board of the committees of the members of the Board.

Company and its operations:

1.1 Operations:

The Company is a NBFC-ND-SI (Non-banking financial company - Non-Deposit Taking - Systemically Important) registered with Reserve Bank of India (RBI).

The Company through its presence in more than 1000 locations serves its customers located all over India through efficient and speedy customer service and also through simple process and robust IT platform

To monitor transactions of a suspicious nature.

1.2 Board of directors and its meetings:

The board of directors, which consists of eminent persons with considerable professional expertise and experience, provides leadership and guidance to the management, thereby enhancing stakeholders' value.

The members of the board of directors are as follows:
1. Mr Venu Srinivasan, Chairman,
2. Mr T K Balaji, director
3. Mr R Ramakrishnan, director
4. Mr K N Radhakrishnan, director
5. Mr S Santhanakrishnan, director
6. Mr Anupam Thareja, whole-time director
7. Mr P Sivaram, director
8. Mr V Srinivasa Rangan, nominee director
9. Mr Sudarshan Venu, director

The Company under the able direction of the board of directors and through the procedures and policies mandated by the board functions.
The Company, in consultation with the directors, prepares and circulates a tentative annual calendar for meetings of the committees / board in order to assist the directors for planning their schedules well in advance to participate in the meetings.

1.3 Meetings of the board:

2.1 Audit Committee:

Objective


The Company has in place the Audit Committee constituted in accordance with the provisions of Para 11 of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 and the applicable provisions of the Companies Act, 1956.
The primary objective of the Audit Committee is to monitor and provide effective supervision of the management's financial reporting process with a view to ensure accurate, timely and proper disclosure and transparency, integrity and quality of financial reporting.


Brief description of terms of reference


The Audit Committee of the Company is entrusted with the responsibility to supervise the Company`s internal control and financial reporting process. The terms of reference, the powers and role of the Committee encompass accounting matters, financial reporting and internal controls.
They primarily include the review of systems and procedures of internal control, review of financial operating systems, ensure compliance with regulatory guidelines, review of accounting policies, review of pending litigations and inter alia performs the following functions:
  1. Overviewing the Company`s financial reporting process and the disclosure of financial information.
  2. Reviewing with the management quarterly and annual financial statements before submission to the board for approval with particular reference to the matters specified in the Listing Agreement.
  3. Reviewing the statement of related party transactions and transactions with companies in which one or more director(s) of the Company is / are deemed to be interested / concerned.
  4. Discussing the nature and scope of audit including internal audit prior to the commencement of the audit and areas of concern, if any, arising post audit.
  5. Reviewing the reports of internal auditors and ensuring that adequate follow-up action is taken by the management on observations and recommendations made by the internal auditors.
  6. Reviewing the findings of any internal investigations by the internal auditors into matters of suspected fraud or irregularity or a failure of internal control systems, of a material nature, if any.
  7. Recommending to the board the appointment / re-appointment / replacement of the statutory auditors and internal auditors and the fees payable for audit and approving the payment for any other services rendered by the statutory auditors.
  8. Reviewing the adequacy of internal audit functions and systems, structure, reporting process, audit coverage and frequency of internal audit.
  9. Reviewing with the management the annual financial statements before submission to the board, in particular
    1. Any change in accounting policies and practices;
    2. Major accounting entries passed, based on exercise of judgment by management
    3. Significant adjustments arising out of audit;
    4. Compliance with accounting standards; and
    5. Disclosure of contingent liabilities.
  10. In addition, reviewing of such other functions as envisaged under Section 292A of the Act.
The subjects reviewed and recommended in the meetings of the Audit Committee were apprised to the board by the Chairman of the Audit Committee, for its approval.

Composition, name of members and the chairman:

Name of the directors (M/s.) Status
S.Santhanakrishnan
R.Ramakrishnan
K.N.Radhakrishnan
V.Srinivasa Rangan
Non-executive director
Non-executive director
Non-executive director
Non-executive director

2.2 Nomination and Remuneration Committee:

Objective:


The Company has in place the Nomination & Remuneration Committee. The Committee ensures on the basis of set parameters and criteria that the existing directors and key managerial personnel are `fit and proper person'.

Brief description of terms of reference

The powers and role of the Committee would encompass ensuring the criteria for the appointment of the directors and the personnel at the senior management personnel. In addition, the Committee also ensures that the members elected, as members of the Committee of the board of directors, are also appropriate.
The terms of reference also includes the Company`s policy on specific remuneration packages for executive directors including payment of minimum remuneration in terms of Schedule XIII of the Companies Act, 1956.
It also includes dealing with matters relating to appointment and remuneration, one level below the board of directors of the Company and also have such power as may be entrusted to them, from time to time, by the board of directors and all such matter in connection with the above.


Composition, name of members and the chairman:

The Nomination and Remuneration committee consists of the following directors:
Name of the directors (M/s.) Status
S.Santhanakrishnan
R.Ramakrishnan
K.N.Radhakrishnan
Non-executive director
Non-executive director
Non-executive director

2.3 Risk management committee

Objective

The Company has laid down procedures to inform board about the risk assessment and mitigation procedures, to ensure that executive management controls risk through means of a properly defined framework.
This Company has constituted a Risk Management committee. This Committee would ensure that the risk associated with the functioning of the Company are identified, controlled and mitigated and also lay procedures regarding managing and mitigating the risk through integrated risk management systems, strategies and mechanism. The Committee would meet periodically to review the risk management and mitigation plans.

Brief description of terms of reference


This Committee would advocate and promote the Enterprise Risk Management and ensure that the risk management process and culture are embedded throughout the Company. The Committee would ensure the implementation of the objectives outlined in the Credit Risk Management Policy from time to time and compliance with them. This Committee would provide routine quarterly reporting and update the Board on key risk management issues as well as ad hoc reporting and evaluation on financing and investment proposals. This Committee would review the internal control systems and their adequacy and their systems with Internal audit and review statements on internal control plans, procedures, areas of coverage, periodicity and presentation and recommend the same for the approvals of the Audit Committee and Board. This Committee would assist the board by identifying and managing operational risks within the organisation. The Committee shall determine the Company's risk management and overall strategies and for clearly communicating the policies and those strategies to management.

Composition, name of members and the chairman:


The Risk Management Committee consists of the following directors:
Name of the directors (M/s.) Status
Anupam Thareja
R.Ramakrishnan
S.Santhanakrishnan
Executive director
Non-executive director
Non-executive director

2.4 Asset Liability Committee

Objective


The Committee constituted an Asset Liability Committee (ALCO), in terms of Guidelines issued by RBI to NBFCs for effective risk management in its portfolios.

Brief description of terms of reference


The Committee, among other functions, is concerned with risk management and provides a comprehensive and dynamic framework for measuring, monitoring and managing liquidity and interest rate, equity and commodity price risks of major operators in the financial system that needs to be closely integrated with the Company`s business strategy. It involves assessment of various types of risks and altering the asset liability portfolio in a dynamic way in order to manage risks.
This Committee is responsible for ensuing adherence to the limits set by the board as well as for deciding the business strategy of the Company (on the assets and liabilities sides) in line with NBFC`s budget and decided risk management objectives.

Composition, name of members and the chairman:

Name of the directors (M/s.) Status
Anupam Thareja
G Venkatraman
M Kalayanaraman
V Gopalakrishnan
H Lakshmanan
Sudarshan Venu
Wholetime director
Chief Executive Officer
Chief operating officer
Chief financial officer
Special director
Director