BOARD COMPOSITION AND COMMITTEES OF THE BOARD

GOVERNANCE

DIVERSITY IN THE BOARD

Our Board is composed of individuals with a wide range of expertise, academic backgrounds, and industry experience, promoting diversity and inclusivity. We are proud to have a female Independent Director on our Board, reflecting our commitment to gender diversity. Our Board Diversity policy underscores our belief in inclusivity as a key driver of performance and success. The Company recognises and embraces the significance of a diverse Board in its success and believes that a diverse Board will enhance the quality of decisions made by utilising the different skills, qualifications, professional experience and background, gender, ethnicity, knowledge, length of service, and other distinguished qualities of its members which are necessary for driving business results, achieving competitive advantage, effective corporate governance, sustainable and balanced development.

RESPONSIBILITIES OF THE BOARD

The Board plays a crucial role in overseeing how the management serves the short and long-term interests of stakeholders and the Company strives to maintain an effective, informed and independent Board. The Board, along with its various Committees, provides leadership and guidance to the Company’s management and directs, supervises and ensures the functioning of the Company in the best interest of all the stakeholders. The Board meets regularly, at least quarterly, to discuss important matters including business updates, financials, credit appraisal, human resources, regulations, risk management, and strategy. Committee decisions are shared with the Board on an ongoing basis. The Board and Senior Management meet quarterly or as needed. Independent Directors hold separate meetings, ensuring their independence. Virtual meetings have been conducted during the last financial year. In addition, the Board meets annually to discuss and approve the business plan of the Company. The Board also engages with Senior Management through its committees for matters related to delegated areas. The Risk Management Committee also meets the CRO and the Audit Committee meets the Internal Audit Head without the presence of the management to ensure the independence of their roles. The average attendance at the Board meetings in FY23 was 89%. All Board meetings are attended by all members of the Senior Management. In addition, members of the Senior Management participate in Committee meetings as well in relation to their respective responsibilities.

POLICIES FRAMEWORK FOR ETHICAL CONDUCT

Our Board adheres to a comprehensive Code of Conduct that applies to all Non-Executive Directors, including Independent Directors, in accordance with regulatory requirements. This code emphasises professional conduct, ethics, and governance in fulfilling their responsibilities. Additionally, we have distinct Codes of Conduct for Executive Directors and Senior Management. To foster an ethical culture, we have implemented various policies and frameworks covering corporate governance, insider trading prevention, related-party transactions, sexual harassment prevention, CSR, and fair practices. These policies are consistently communicated to our management, employees, and stakeholders.

RISK MANAGEMENT FRAMEWORK

The Company has in place a Board constituted Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report. The Board is the apex governance body on all matters of risk management, and exercises its oversight over risk management both directly and through its Risk Management Committee, Audit Committee, IT Strategy Committee and ALCO.

The risk management processes are guided by well-defined policies appropriate for the various risk categories supplemented by periodic validations of the methods used and monitoring through the sub-committees of the Board. The Company has Board approved Risk Management Policy wherein risks faced by the Company are identified and assessed and a business continuity plan to ensure the continuity of its services to its large customers base, a cyber crisis management plan, information and cyber security policies. Your Company believes that our opportunity lies in risk. Since its inception, the Company has had a philosophy to create its niche and build a profitable business which reflects in the financials with a consistency similar to liquidity. The Company has clarity on how to deal with the asset-liability issue of a typical housing finance business.

The ever-evolving global landscape has prompted companies to reassess their assumptions and adapt strategies to a new operating environment, prioritising the safety of individuals and effectively managing major risks. Our Risk Management Framework, bolstered by advanced technologies, has enhanced our preparedness in responding to challenges like COVID-19. This framework enables us to identify, assess, respond to, and monitor risks in real-time, aligning with our business objectives. With a robust three lines of defence approach, we ensure business managers, risk management and compliance functions, and internal audit work together to manage risks effectively.

The Company gives due importance to prudent lending practices and has implemented suitable measures for risk mitigation, which include verification of credit history from credit information bureaus, personal verification of a customer’s business and residence, technical and legal verifications, conservative loan-to-value, and required term cover for insurance.

Key risks such as credit, market, operational, liquidity, and cybersecurity are addressed through Board-approved policies and oversight by the Executive Risk Monitoring Committee. Prudent lending practices and risk mitigation measures, including credit history verification, thorough assessments, conservative loan parameters, and insurance coverage are implemented. The Company has created a robust risk management framework with the help of technology and analytics. The Company has strong underwriting skills, which helps to mitigate credit risks. Using strong customer assessment standards also supports the Company to mitigate credit risk. Further, the Internal Capital Adequacy Assessment Process (ICAAP) of the Company assesses all the significant risks associated with various businesses.

Our Risk Management Framework allows us to minimise the impact of risks and capitalise on market opportunities while ensuring compliance and regular review by the Risk Management Committee. During the financial year under review, the Risk Management Committee reviewed the risks associated with the business of the Company, undertook its root cause analysis and monitored the efficacy of the measures taken to mitigate the same.

ADDITIONAL POLICIES

In terms of the RBI/SEBI/MCA regulations and various other laws applicable to the Company and as a part of good corporate governance and also to ensure strong internal controls, the Board has adopted several policies and has also reviewed the same from time to time.

We have established a comprehensive Whistle-blower policy that empowers all employees to report any serious irregularities or violations within the organisation. Policy on whistleblowers provides direct access to the Chairperson of the Audit Committee, ensuring transparency and accountability. Additionally, we have implemented a robust grievance redressal mechanism for our customers, addressing their concerns promptly. Shareholders’ grievances are diligently handled through dedicated email addresses, actively monitored by our Compliance and Investor Relations Team. We have Board-approved policies in place for succession planning, outsourcing, anti-corruption and antibribery, information security, and cyber crisis management, ensuring adherence to statutory requirements.

ANTI-MONEY LAUNDERING (AML)

Our organisation has a robust Know Your Customer (KYC) and Anti Money Laundering (AML) policy, which is aligned with the guidelines of the Reserve Bank of India (RBI) and the provisions of the Prevention of Money Laundering Act. This policy has been approved by the Board and encompasses essential elements such as Customer Acceptance Policy, Customer Identification Procedures, and Risk Management and Transaction Monitoring. We diligently monitor compliance with these guidelines throughout the customer lifecycle. Furthermore, we have developed a targeted training module to provide effective and focused training on anticorruption and AML practices.