POLICY ON INTERNAL GUIDELINES ON CORPORATE GOVERNANCE

Last updated on: 27th June 2024

Background

Si Creva Capital Services Private Limited is a private limited company, incorporated under the provisions of the Companies Act, 2013, having Corporate Identification Number (CIN) U65923MH2015PTC266425 (“Si Creva”/“Company”). Si Creva is a Middle Layer Non-Deposit taking Non-Banking Financial Company, bearing Registration no. N-13.02129, registered and regulated in the middle layer by the RBI Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 (updated as on March 21, 2024), as amended from time to time and such other rules, regulations, directions, circulars, notifications, and orders issued in this regard from time to time (“RBI Directions”).

Si Creva is in the business of the provision of consumer and personal loans.
Company’s Philosophy on Corporate Governance

The Company 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, and accountability to its customers, regulators, government, and others. The Company’s activities are carried out in accordance with good corporate practices and the Company is constantly striving to better them and adopt the best practices.
Objective

The following are the objectives of the guidelines on Corporate Governance:
- Greater transparency thereby enabling stakeholders in having a better understanding of the Company.
- Building investor’s confidence in the Company.
- Adopt best practices in line with the Regulatory prescriptions.
RBI Guidelines on Corporate Governance

In order to enable NBFCs to adopt best practices and greater transparency in their operations, RBI has issued guidelines on Corporate Governance in accordance with the provisions of Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023. In pursuance of the aforesaid Guidelines, the Board of Directors of the Company (“Board”) has reviewed the internal Guidelines on Corporate Governance (the “Guidelines”).

Pursuant to any subsequent amendments or any statutory modifications or re-enactments in the above stated guidelines / norms / clarifications or in any other applicable acts / regulations, if there is any change in any of the parameter(s) framed by the Board, then the act / regulation will have overriding effect on the parameter(s).

Group of Connected Counterparties:

Groups of Connected Counterparties: As stipulated in RBI direction, each NBFC shall frame a policy approved by its board to determine the existence of a group of connected counterparties. The policy framed, and assessments made under such a policy shall be subject to supervisory scrutiny. However, there is no counterparty (except the holding company – OnEMI Technology Solutions Private Limited engaged in development and running of Technology platform) in the group; therefore, the requirement of having a policy on this subject is not applicable for the time being.
Board of Directors

The Board along with its Committees shall provide leadership and guidance to the Company’s management and direct, supervise and control the performance of the Company.

The role of the Board is to determine the overall strategic direction and management of the Company, including monitoring at least once in a year the performance of its directors. The Board is responsible to the shareholders and its conduct is regulated by various provisions of the Memorandum of Association (“MOA”) and the Articles of Association (“AOA”) of the Company. In performing its duties, the Board meets regularly and acts in the best interests of the Company including its shareholders, customers and creditors.

The Board’s primary responsibility is on the direction, control and governance of the Company and in particular, to articulate and commit to a corporate philosophy and governance that will shape the level of risk adoption, standards of business conduct and ethical behaviour of the Company.

The Board shall periodically review Compliance Reports of all laws applicable to the Company prepared by the Company as well as steps taken by the Company to rectify instances of non-compliance as soon as the gap, if any, comes to its notice.

Composition:

The Board’s strength shall be minimum 3 and the maximum number of directors be as per the limit specified in the Companies Act,2013 (“Act”) and the AoA of the Company.

The Board shall have an optimum combination of Executive, Non-Executive and Independent Directors in line with the requirements of the provisions of the Act and the AoA of the Company.
Board Meetings

The Board Meetings of the Company shall be held as per the requirements prescribed under the Act and other applicable laws and AoA.

Subject to the provisions of Section 173 of the Act, the Board shall meet no less frequently than 4 (four) times per year and once every 120 (one hundred and twenty) days.

The Company shall comply with all the procedural norms, including the quorum requirements, provided under the Act, any other applicable law(s), AoA for smooth conduct of the meetings.

All the proceedings of the meetings shall be duly recorded in the minutes, which shall be prepared, signed and circulated as per the provisions of Act.

Committees of the Board of Directors

To focus effectively on the issues and ensure expedient resolution of diverse matters, the Board shall constitute a set of committees with specific terms of reference/scope.

The terms of reference, roles and responsibilities of such committees will be further aligned based on the changes in the regulations and business requirements with the approval of the Board. Minutes of the meetings of the Board Committees shall be placed before the Board for its perusal and noting.

The committees shall operate as per the terms of reference approved by the Board.

Audit Committee:

The Audit Committee’s constitution and functioning shall be as decided by the Board of Directors of the Company. The powers and terms of reference of the Committee shall include the requirements set out in Section 177 of the Act and the relevant Rules framed thereunder.

Chairperson	The Chairperson of the Committee shall be a Non-Executive Director. The Chairperson or any other member of the Committee authorized by the Chairperson, shall attend the Annual General Meeting to answer shareholders’ queries.
Composition	The Committee shall comprise of such number of members, as appointed by the Board. The majority of members of the Committee including its Chairperson shall be persons with ability to read and understand the financial statements. The Company Secretary shall act as the secretary to the Committee.
Meetings and Quorum	The Committee shall meet at least four times in a year and the gap between two meetings shall not exceed 120 days. The quorum for the Committee meeting shall be one-third of its total strength (any fraction contained in that one-third shall be rounded off as one) or two members, whichever is great
Role and responsibilities	The Committee shall have the roles and responsibilities as per the TOR approved by the Board and such other functions as may be delegated by the Board and/or mandated by any regulatory provisions from time to time.

Nomination and Remuneration Committee

The Company shall have in place Nomination and Remuneration Committee (“NRC”) constituted in accordance with the applicable Regulations contained in the Directions and the applicable provisions of the Act. The powers and terms of reference of the NRC shall include the requirements set out in Section 178 of the Act and the Rules framed thereunder, and ‘Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs’ notified by RBI. The Committee shall primarily be responsible to assist the Board in fulfilling its responsibilities by recommending to the Board, criteria for Board membership, evaluation of directors, the committees and the Board as a whole.

Chairperson	The Chairperson of the NRC shall be a Non-Executive director. The Chairperson of the Company may be appointed as a member of the NRC but shall not chair the NRC.
Composition	The NRC will comprise of such number of members, as appointed by the Board. The Company Secretary of the Company shall be the Secretary of the NRC (the “Secretary”).
Meetings and Quorum	The NRC will meet as frequently as required subject to a minimum of four meetings in a year and gap between two meetings shall not exceed 120 days. The quorum for the NRC meeting shall be one-third of its total strength (any fraction contained in that one-third be rounded off as one) or two members, whichever is greater.
Role and responsibilities of the NRC	The NRC shall have the roles and responsibilities as per the TOR approved by the Board and such other functions as may be delegated by the Board and/or mandated by any regulatory provisions from time to time.

Risk Management Committee

The Risk Oversight Committee’s constitution and functioning shall be in line with the RBI regulations. The Committee shall be vested with necessary powers, as defined in its TOR to achieve its objectives.

Chairperson	The Chairperson of the Committee shall be a Non- Executive Director.
Composition	The Committee shall comprise of such number of members, as appointed by the Board, including CEO/MD. The Company Secretary will act as the secretary to the Committee.
Meetings and Quorum	The Committee shall meet at least four times in a year and the gap between two meetings shall not exceed 120 days. The quorum shall be either two members or one third of its total strength (any fraction contained in that one-third to be rounded off as one), whichever is greater.
Role and responsibilities of the Committee	The Committee shall have the roles and responsibilities as per the TOR approved by the Board and such other functions as may be delegated by the Board and/or mandated by any regulatory provisions from time to time.

IT Strategy Committee

The Company shall have in place an IT Strategy Committee as required by the guidelines issued by the RBI in Master Direction – Information Technology Framework for the NBFC Sector (“IT Framework”). The constitution, functions and meetings of the Committee shall be in line with the requirements of the RBI guidelines.

Chairperson	The Chairperson of the Committee shall be an independent Director having substantial IT expertise in managing/ guiding information technology initiatives.
Composition	The Committee shall consist of three or more Directors as members. The members of the Committee shall have adequate technical competency. The Company Secretary of the Company shall be the Secretary of the Committee. The Chief Information Security Officer (“CISO”) shall be the permanent invitee.
Meetings and Quorum	The Committee shall meet at least four times in a year on a quarterly basis and the gap between two meetings shall not exceed 120 days. The quorum for the Committee meeting shall be either two members or one-third of its total strength (any fraction contained in that one-third be rounded off as one), whichever is greater.
Role and responsibilities of the Committee	The Committee shall have the roles and responsibilities as per the TOR approved by the Board and such other functions as may be delegated by the Board and/or mandated by any regulatory provisions from time to time.

Other Committees:

The Company has the following other Committee, named herein,
- Asset Liability Management Committee (ALCO),
- Internal Risk Mechanism
- Customer Grievance Redressal Committee
- Outsourcing Committee,
- IT Steering Committee,
- Information Security Committee
- POSH Committee

Vigil Mechanism

The Company adheres to the highest standards of ethical, moral and legal conduct of business operations and has thus established a Vigil Mechanism/Whistle Blower policy to facilitate employees to report concerns of any unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct and also provide adequate safeguards against victimization of persons who use this mechanism.
Disclosure and transparency

The following information will be provided to the Board :
- Progress made in putting in place a progressive risk management system, and risk management policy and strategy followed by the Company.
- Conformity with corporate governance standards viz; in the composition of various committees, their role and functions, periodicity of the meetings, and compliance with coverage and review functions etc.
- Updates of the various committee meetings from time to time.
- Disclosures of such information, as may be prescribed by RBI from time to time, in the annual financial statements of the Company.
Policies adopted by the Company

The Company shall endeavor to adopt and adhere to all the applicable policies as required under the applicable Directions of the RBI from time to time. Further, the Company shall ensure to review the adopted policies in a timely manner.
Appointment of Statutory Auditors / Audit Partners

The statutory requirements relating to audit, appointment of auditors and the audit function are stipulated in Chapter X of the Companies Act, 2013 and the rules framed there under. Apart from the requirement of conforming to all relevant statutory prescriptions, the Reserve Bank in its circular RBI/2021-22/25 Ref.No.DoS.CO.ARG/SEC.01/ 08.91.001/2021-22 dated April 27, 2021, (RBI Guidelines) read with Clarifications afforded by RBI vide FAQ dated June 11, 2021, has notified guidelines prescribing the eligibility criteria for an audit firm is dependent upon total assets of an NBFC as at the end of last financial year.

Accordingly, in keeping with its corporate values, global best practices, statutory and regulatory prescriptions, the company shall appoint its statutory auditor.
Fit and Proper Criteria

The Company has in place for ascertaining the ‘fit and proper’ criteria at the time of appointment of Directors and on a continuing basis. The Nomination and Remuneration Committee reviews the appointment/re-appointment of Directors considering their qualifications, expertise, track record, integrity and other ‘fit and proper’ criteria.

The Nomination and Remuneration Committee should obtain such declarations / undertakings, deed of covenant from the Directors and shall scrutinize the furnished statement and certificates as may be prescribed for determining Fit and Proper Criteria in line with the guidelines issued by the RBI for the time being in force. A quarterly statement on change of directors and a certificate by the Managing Director/Whole-time Director of the Company certifying that ‘fit and proper’ criteria in selection of Directors has been followed by the Company should be furnished to the Regional Office of the RBI within 15 days of the close of each quarter. Further, the statement for the quarter ending March 31 should also be certified by the statutory auditors.
Interaction with the Regulator

The Company shall maintain a good working relationship with its regulators and with other external bodies and authorities. It is also part of the role and objectives of the Compliance function to foster good relations with regulators and to work proactively with the Regulator.
Review of policy:

The policy will be reviewed at yearly intervals or as and when considered necessary by the Senior Management / Board of the Company.
Omnibus Clause:

All extant & future master circular/directions/guidance/guidance notes issued by the Regulators from time to time would be the directing force and will super cede the contents of this Policy.