INTERNAL GUIDELINES ON CORPORATE GOVERNANCE
1. Preamble:
The Reserve Bank of India (‘RBI’) vide its Circular RBI/2014-15/299 DNBR (PD) CC.No. 002/03.10.001/2014-15 dated 10th November 2014 read with Master Circular RBI/2015-16/12 DNBR (PD) CC.No.053/03.10.119/2015-16 dated 1st July 2015 requires NBFCs to frame their internal guidelines on corporate governance with the approval of the Board of Directors, enhancing the scope of the guidelines. The internal guidelines set the framework to achieve Company’s goal by adopting best practices with emphasis to transparency, accountability and integrity.
The Board of Directors (“the Board”) of Ford Credit India Private Limited (“the Company”) has adopted the following internal guidelines on corporate governance (“the Guidelines”) to ensure that the Company follows highest standards of corporate governance in all its activities and processes.
2. Board of Directors and its composition:
The Board of the Company is constituted complying with the provisions of Companies Act, 2013 read with the Rules specified thereunder. The composition of the Board of the company may consist of both executive and non-executive Directors including a woman Director.
The Board of the Company will provide leadership and guidance to the Management of the company and will direct, supervise, monitor and control the performance of the Company.
The meetings of the Board shall be held at least four times a year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board.
3. Committees constituted by Board:
The Board of the Company has constituted the following committees to monitor the operations of the Company –
3.1. Audit Committee: This committee will consist of a minimum of three Directors of the Board (as per the Companies Act 2013 requirement) and will act in accordance of Section 177 of the Companies Act, 2013, advising the Company in all financial and related transactions.
3.2. Nomination and Remuneration Committee: This committee will consist of three or more Directors of the Board (as per the Companies Act 2013 requirement) and will act in accordance of Section 178 of the Companies Act, 2013, and will advise the Company about the appointment, removal and evaluation of every Director’s performance. This committee also assesses and recommends to the Board a policy, relating to the remuneration for the Directors, key managerial personnel and other employees.
3.3. Risk Management and Governance committee: This committee will assess all internal and external risk factors including any regulatory challenges and possible action to mitigate such risk.
3.4. Corporate Social Responsibility (CSR) committee: This committee will ensure that the Company spends, in every financial year, at least two percent of the average net profits of the Company made during the three immediately preceding financial years, in pursuance of its CSR activities.
In addition to the aforesaid Board level committees, the Company has the following management level committees –
i. Operation Committee
ii. Compliance Committee
The composition, frequency of meeting and the responsibilities of these committees are defined by the Board of the Company.
4. Key Managerial Personnel (KMP):
In Compliance with the provisions of Section 203 of the Companies Act, 2013, the Company has appointed the following whole-time KMPs –
i. Managing Director;
ii. Company Secretary; and
iii. Chief Financial Officer
5. Policies / Codes formulated by the Company:
Various Policies/Codes have been formulated by the Company in compliance with the provisions of the Companies Act, 2013 and other applicable laws and/ or as a matter of Good Corporate Governance Practices. Some of the important policies are as under: –
5.1. Policy on Anti-Money Laundering (AML): This policy is framed in compliance with the KYC Guidelines and AML Standards prescribed by RBI. The purpose of this policy is to instruct the staffs on recognizing anti-money laundering activities and transactions and to report them to the relevant authorities. The policy also covers the procedures to be followed for customer identification before entering into a transaction. A Principal Officer has been appointed under this policy to oversee and ensure overall compliance with regulatory guidelines.
5.2. Fair Practices Code (FPC): This code is framed in compliance with the guidelines on FPC prescribed by the RBI. The purpose of this code is to provide the Company’s customers an overview of practices which will be followed by the Company in respect of all the financing and lending facilities and services offered by the Company and will apply to any loan that the Company may sanction and disburse.
5.3. Policy on Interest Rate: This policy has been framed in compliance with the RBI guidelines for setting of interest rates of loan offered to the customer. This policy explains the procedures to be followed by the Company with respect to the setting of interest rates of loan offered to the customer.
5.4. Policy on Fit and Proper criteria for Directors: This policy has been framed in compliance with the RBI Corporate Governance Directions, 2015. The purpose of this policy is to ascertain the fit and proper criteria of the Directors at the time of appointment / re-appointment. The Policy covers the due diligence mechanism which shall be performed by the Nomination and Remuneration Committee before appointment / re-appointment of any Director. The Company shall obtain declarations and undertaking from the directors as per the format prescribed by the RBI from time to time.
6. Review:
The Board shall, as and when required, assess the adequacy of this Policy and make any necessary amendments to ensure it remains consistent with the requirement of RBI, Board’s objectives, current law and best practices.