Corporate Governance

Introduction

CoverMark IDF is a professionally run company and its corporate governance philosophy is based on the following principles:

• Clearly defined overall objectives of the company& area of business
• Decision making by Board& Committees with clear terms of reference &jurisdiction
• Induction of Independent Directors with experience, track record and impeccable credentials
• Clearly outlined Policies (including in respect of risk management, investment& credit, asset liability management, resource planning, transfer pricing, fair practices etc)
• Compliance with laws and regulations
• Code of conduct (including in respect of ethical conduct, integrity, reliability and fair practices)
• Checks and balances (including structures adhering to maker-checker principles, internal & statutory audits)
• Keeping to commitments, both internal and external
• Transparency and disclosures to all stakeholders


As a part of Corporate Governance process, the Company has formed the following Committees:

• Audit Committee
• Asset Liability Management Committee
• Nomination & Remuneration Committee
• Risk Management Committee
• Credit Committee
• Corporate Social Responsibility Committee


Fair Practices Code

Company Code

The Company's business would be conducted in accordance with prevailing statutory and regulatory requirements, with due focus on efficiency, customer-orientation, and corporate governance principles. In addition, the Company would adhere to the Fair Practices Code in its functioning, the key elements of which are as follows:


Vigil Mechanism

In the Financial Services business, we are keen to promote a culture of openness and fair dealing. One of the important values which we wish to promote and practice is Integrity. We, therefore, need to provide avenues for employees and outsiders to report any issues of non-compliance to standards of high integrity. One such mechanism is Whistle Blowing.

In this regard, we have formulated a Vigil Mechanism Policy, under which the "Whistle Blower Investigation Committee (-the Committee') has been set up. The objective of the said policy is to establish a redressal forum, which can address all concerns raised on questionable practices, which violate the principles of integrity. The Chairman of this Whistle Blower Investigation Committee is the Chief Ethics Officer of the Company responsible for receiving, validating, investigating and reporting to the Audit Committee of this matter. The Chief Internal Auditor of CoverMark Financial Services will act as 'Chief Ethics Officer'.

The Committee shall take necessary actions of maintaining confidentiality within the organization on matters brought to its attention. The outcome of the investigation will be kept strictly confidential.

The Management would like to assure all employees that they will be protected from unfair termination, threat of termination, disciplinary action, transfer, demotion, refusal of promotion or any other unfair prejudicial employment practices, which the Whistle Blower may face from any quarters within the Company due to the act of whistle blowing/exercising vigilance.

Employees can get in touch with the Chief Ethics Officer.


Terms of Independent Directors

An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company. The Independent Directors shall be eligible to be re-appointed for another term of up to five consecutive years subject to their willingness, approval of the Board of Directors based on performance evaluation, other factors and shareholders' approval by way of Special Resolution.

Role, Responsibilities, and Functions

The Independent Directors shall:
• help in bringing an independent judgment to bear on the Board's deliberations especially on issues of strategy,     performance, risk management, resources, key appointments and standards of conduct
• bring an objective view in the evaluation of the performance of Board and management
• scrutinize the performance of management in meeting agreed goals and objectives and monitor the reporting of   performance
• satisfy themselves on the integrity of financial information and that financial controls and the systems of risk         management are robust and defensible
• safeguard the interests of all stakeholders, particularly the minority shareholders
• balance the conflicting interest of the stakeholders
• determine appropriate levels of remuneration of executive directors, key managerial personnel and senior             management and have a prime role in appointing and where necessary recommend removal of executive   directors, key managerial personnel and senior management
• moderate and arbitrate in the interest of the company as a whole, in situations of conflict between management
  and shareholder's interest.

Duties

The Independent Directors shall:
• undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity
  with the Company
• seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate     professional advice and opinion of outside experts at the expense of the Company
• strive to attend all meetings of the Board of Directors and of the Board committees of which he is a Member
• participate constructively and actively in the committees of the Board in which they are
  chairpersons or members
• strive to attend the general meetings of the company
• where they have concerns about the running of the company or a proposed action, ensure that these are
  addressed by the Board and, to the extent that they are not resolved, insist that their concerns are recorded in  
  the minutes of the Board meeting
• keep themselves well informed about the company and the external environment in which it operates
• pay sufficient attention and ensure that adequate deliberations are held before approving related party
  transactions and assure themselves that the same are in the interest of the Company
• ascertain and ensure that the Company has an adequate and functional vigil mechanism and to ensure that the
  interests of a person who uses such mechanism are not prejudicially affected on account of such use
• report concerns about unethical behaviour, actual or suspectedftaud or violation of the Company's code
  of conduct
• acting within his authority, assist in protecting the legitimate interests of the Company, shareholders
  and its employees

Separate meetings

• The Independent Directors of the Company shall hold at least one meeting in a year, without the attendance of      Non-Independent Directors and members of management
• All the Independent Directors of the Company shall strive to be present at such meeting
• The meeting shall: review the performance of non-Independent Directors and the Board as a whole review the      performance of the Chairperson of the company, taking into account the views of executive directors and non-      executive directors assess the quality, quantity and timeliness of flow of information between the company  
   management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Remuneration

Independent Directors, shall be entitled to receive remuneration byway of fee for attending meetings of the Board or Committee thereof. Further, Independent Directors, shall also be entitled to receive reimbursement of expenses for participating in the Board and other meetings and commission at a specified percentage of the net profits as per the provisions of the Act.

Liabilities

An Independent Director shall be held liable, only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he had not acted diligently.