0712-2585800 / 9607954702
142 Golcha House, New Colony, Byramji Town, Nagpur, Maharashtra 440001
1. Introduction:
Swarna Pragati Housing Microfinance Pvt. Ltd. (SPHM or the Company)’s endeavor is to provide financial services to the bottom of the pyramid segment to help build a society where everyone has a conducive habitat to live and work in with dignity and to be the preferred provider of innovative financial solutions for housing, particularly to Economically Weaker Section (EWS) and Low Income Groups (LIG) in rural and semi-urban areas. The vision of SPHM is to be the leader in the housing microfinance in the country, to create a decent habitat for all, to create value for all stakeholders by building a profitable business providing financial assess for housing in hitherto underserved areas. SPHM aims to achieve its mission and vision through the following values:
Corporate Governance plays a pivotal role in building SPHM and providing the right direction to achieve the mission and vision of SPHM through the values set by itself. SPHM recognizes its role as a corporate citizen and endeavors to adopt the best practices and the highest standards of Corporate Governance through transparency in business ethics, accountability to its customers, government, investors, lenders and all other stakeholders. The Companys activities shall be carried out in accordance with good corporate practices and the Company.
The National Housing Bank having considered it necessary in the public interest and being satisfied that for the purpose of enabling it to regulate the housing finance system of the country to its advantage, NHB has, on February 9, 2017, issued “Housing Finance Companies – Corporate Governance (National Housing Bank) Directions, 2016”. In pursuance of the aforesaid directions, the Company has framed the following internal Guidelines on Corporate Governance. These guidelines have been drafted bearing in mind the size of the Company’s operations and the sector in which it operates. These guidelines also complies with the existing Housing Finance Companies – Corporate Directions, 2016 as last updated by NHB vide its Master Circular dated July 1, 2017. These guidelines shall also be made available in the website of the Company.
In accordance with the provisions of Section 166 of the Companies Act, 2013 and as a matter of corporate governance, the directors of the Company have the following duties:-
(1) Subject to the provisions of the Companies Act, 2013, a director of the Company shall act in accordance with the articles of association of the company.
(2) A director of the company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment.
(3) A director of the company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.
(4) A director of the company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.
(5) A director of the company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.
(6) A director of the company shall not assign his office and any assignment so made shall be void.
(1) Annual operating plans and budgets and any updates.
(2) Capital budgets and any updates.
(3) Quarterly results of its operating divisions or business segments.
(4) Minutes of meetings of audit committee and other committees of the board of directors.
(5) The information on recruitment and remuneration of senior officers just below the level of board of directors, including appointment or removal of Chief Financial Officer and the Company Secretary.
(6) Show cause, demand, prosecution notices and penalty notices, which are materially important.
(7) Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.
(8) Any material default in financial obligations to and by the listed entity, or substantial non-payment for goods sold by the listed entity.
(9) Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the listed entity or taken an adverse view regarding another enterprise that may have negative implications on the listed entity.
(10) Details of any joint venture or collaboration agreement.
(11) Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.
(12) Significant labour problems and their proposed solutions. Any significant development in Human Resources/ Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme etc.
(13) Sale of investments, subsidiaries, assets which are material in nature and not in normal course of business.
(14) Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material.
(15) Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as nonpayment of dividend, delay in share transfer etc.
(16) The progress made in putting in place a progressive risk management system and risk management policy and strategy followed by the Company;
(17) 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.
To focus effectively on the issues and ensure expedient resolution of diverse matters, the Board constitutes a set of Committees with specific terms of reference / scope. The Committees shall operate as empowered agents of the Board as per their Charter / terms of reference.
The NHB Directions mentioned earlier require the setting up of an Audit Committee, Nomination Committee and Risk Management Committee. In compliance with the applicable provisions of the Act, NHB guidelines on Corporate Governance and in order to meet business exigencies, the Company has constituted its Board committees.
The terms of reference, roles and responsibilities of the aforesaid Committees will be further aligned based on the changes in the regulations and business requirements with the approval of Board. SPHM complies with the above requirements of committee constitution and have the following committees of the Board:
The Company has in place the Audit Committee in accordance with the NHB directions on Corporate Governance.
Chairperson |
The members of the Committee present at the meeting shall choose one amongst them to act as Chairman. |
Composition |
Audit committee shall consist of at least three non-executive members of the Board of Directors and will preferably be headed by an Independent Director. All members of the Audit Committee shall be financially literate and at least one member shall have accounting or related financial management expertise. The Audit Committee may invite such of the executives, as it considers appropriate (and particularly the head of the accounts function) to be present at the meetings of the Committee, but on occasions it may also meet without the presence of any executives of the Company. The CEO, CFO, Head of Internal Audit and a representative of the Statutory Auditor may be present as invitees for the meetings of the Audit Committee. |
Secretary |
The Company Secretary of the Company shall act as the Secretary to the Committee. |
Meetings and Quorum |
The Audit Committee shall meet at least four times in a calendar year and not more than 120 days shall elapse between two meetings. The Quorum for the meeting of the Committee shall be as per the Articles of Association of the Company. |
Terms of reference |
The Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall inter alia, include
thereon before submission to the board for approval, with particular reference to: |
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responsibility statement to be included in the board’s report in terms of clause (c) of sub- section (3) of Section 134 of the Companies Act, 2013;
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The Company has Nomination Committee in accordance with the NHB guidelines on Corporate Governance.
Chairperson |
The members of the Committee present at the meeting shall choose one amongst them to act as Chairperson. |
Composition |
not be a Chairman of the Committee. |
Secretary |
The Company Secretary of the Company shall act as the Secretary to the Committee. |
Meetings and Quorum |
i. The Committee shall meet as and when necessary. ii) The Quorum for the meeting of the Committee shall be as per the Articles of Association of the Company. |
Terms of reference |
The remuneration policy formulated by the Committee is required under the Act to be disclosed in the Board’s report.
direct reportees on a periodic basis or as and when required. |
The Company has in place the Risk Management Committee in accordance with NHB directions on Corporate Governance for the purpose of monitoring the risk and to make suitable strategies to control it.
Chairperson |
The members of the Committee present at the meeting shall choose one amongst them to act as Chairperson. |
Composition |
The Committee shall consist of such number of members as may be determined by the Board. |
Secretary |
The Company Secretary of the Company shall act as the Secretary to the Committee. |
Meetings and Quorum |
The Committee shall meet minimum twice and as and when necessary to review and monitor the risk associated with business of the Company. |
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ii) The Quorum for the meeting of the Committee shall be as per the Articles of Association of the Company. |
Terms of reference |
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As per the guidelines of Asset Liability Management (ALM) system for Housing Finance Companies issued by NHB, vide its circular No.NHB/ND/DRS/Pol-No. 35/2010-11 and as updated from time to time, the Company has in place the Asset Liability Management Committee (ALCO) for the purpose of managing liquidity and interest rate risk.
Chairperson |
The members of the Committee present at the meeting shall choose one amongst them to act as Chairperson. |
Composition |
The Committee shall consist of such number of members as may be determined by the Board. |
Secretary |
The Company Secretary of the Company shall act as the Secretary to the Committee. |
Meetings and Quorum |
The ALCO shall meet at least four times in a calendar year and not more than 120 days shall elapse between two meetings.
The Quorum for the meeting of the Committee shall be as per the Articles of Association of the Company. |
Terms of reference |
results. |
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The importance of due diligence of Directors to ascertain suitability for the post by way of qualifications, technical expertise, track record, integrity etc. needs no emphasis for any financial institution. It is proposed to follow the same guidelines mutatis mutandis in case of Housing Finance Companies also. Therefore, the company has put in place an internal supervisory process to carry out due diligence on directors on a continuing basis. In line with the directions of the NHB, the company follows the procedures mentioned below and ensures that the minimum criteria is fulfilled by the persons before they are appointed on the Boards:
SPHM will undertake a process of due diligence to determine the suitability of a person for appointment / continuing to hold appointment as a Director on the Board, based upon qualification, expertise, track record, integrity and other ‘fit and proper’ criteria. The Company will obtain necessary information and declaration from the proposed / existing Directors for the purpose in the format given at Annex-1.
b)The process of due diligence will be undertaken by the Company at the time of appointment / renewal of appointment.
c)Based on the information provided in the signed declaration, the Nomination committee shall decide on the acceptance or otherwise of the Director(s), and recommend to the Board accordingly and make any observations as necessary.
e)The Company shall obtain annually as on 31st March a simple declaration from the Directors that the information already provided has not undergone change and where there is any change, requisite details are furnished by them forthwith.
f)The Board of the Company will ensure in public interest that the nominated/ elected Directors execute the deeds of covenants in the format given in Annex-2.
The Company shall report to NHB as per the extant directions issued by NHB from time to time. As per the current directions, the Company shall furnish to the NHB
The statement shall reach the National Housing Bank within 15 days of the close of the respective quarter.
The National Housing Bank, if it deems fit and in public interest, reserves the right to examine the fit and proper criteria of directors of any HFC irrespective of the asset size of such HFC.
(1)The Company shall put up to the Board of Directors, at regular intervals, as may be prescribed by the Board in this regard, the following:
(2)The Company shall also disclose the following in its Annual Financial Statements, with effect from March 31, 2017: