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CORPORATE GOVERNANCE INITIATIVEs of adani capital

Krithika M

20IFA036

TITLE PAGE

COPORATIVE GOVERNANCE INITIATIVE OF ADANI CAPITAL

MEANING OF CORPORATE GOVERNANCE

MEANING OF CORPORATE GOVERNANCE

Corporate governance is the system by which companies are directed and controlled.

For most companies, those leaders are the directors, who decide the long-term strategy of the company in order to serve the best interests of the owners (members or shareholders) and, more broadly, stakeholders, such as customers, suppliers, providers of long-term finance, the community and regulators.

IMPORTANCE OF CORPORATE GOVERNANCE

IMPORTANCE OF CORPORATE GOVERNANCE

Corporate governance contributes to growth and development of the corporation itself, the

related activities and the state in general. For a long time now the role of the company is not

only to produce or provide services and make profits in this way. Companies take responsibility

for development of the social environment. It is not possible to ensure development of the

company relying only upon the interest of the company, while neglecting the overall

development of the community.

Corporate governance contributes to improved efficiency and effectiveness of the economic

system. The existence of an efficient system of corporate governance within a company or the

economy as a whole helps to reach the level of trust necessary for proper operations of a market

economy. As a result, we have lower cost of capital; companies are encouraged to efficiently

use resources, thus supporting growth.

ADANI CAPITAL

aDANI capital

Adani Capital is the non-banking financial company (NBFC) arm of Adani Group and commenced lending operations in April 2017. The company aims to become the foremost financial services firm with a focus on ‘Entrepreneurship’.

Under Adani Group’s philosophy of Nation Building, Adani Capital aims to play a key role in inclusive growth by focusing on rural development & supporting medium and small enterprises through capital and industry best practices.

Retail and Rural Lending: Catering to Agri value chain & MSME financing.

Wholesale Lending: Catering to Infrastructure, Corporate and Real Estate financing.

Our approach is “Customer First”, and our products are focused around income generation and business enhancement of our Customers.

Our team comprise of experienced & self-motivated professionals from the industry, committed to create a distinctive financial services business with Customer ownership and a complete life cycle focus.

As our country’s economy is poised for an exponential growth with several structural reforms and strong fundamentals, we feel excited to be part of this growth journey and are committed to own and service our Customers to address their financial needs

CORPORATE INITIATIVE BY ADANI CAPITAL

COPRPORATE GOVERNANCE INITIATIVE BY ADANI CAPITAL

Corporate Governance at Adani Capital Private Limited (ACPL) to have the

following Main principles:

• Constitution of a Board of Directors of appropriate composition, size, varied

expertise and commitment to discharge its responsibilities and duties.

• Ensuring timely flow of information to the Board and its Committees to

enable them to discharge their functions effectively.

• Independent verification and safeguarding integrity of the Company’s

financial reporting.

• A sound system of risk management and internal control.

• Timely and balanced disclosure of all material information concerning the

Company to all stakeholders.

• Transparency and accountability.

• Compliance with all the applicable act, rules and regulations.

• Fair and equitable treatment of all its stakeholders including employees,

customers, shareholders and investors.

Internal guidelines for the Corporate Governance

In order to establish a framework for ensuring the compliance with the corporate

governance in letter and in spirit, the Board has established following committees:

1) Audit Committee;

2) Nomination and Remuneration Committee;

3) Risk Management Committee;

4) Asset Liability Management Committee;

5) Credit & Investment Committee;

6) Corporate Social Responsibility Committee; and

other Committee have been constituted in accordance with the provisions of

the Companies Act, 2013, guidelines / directions issued by the RBI as applicable

to the Company and for internal requirements and operational convenience. The

composition, terms of reference and functioning of the Committee shall be

decided by the Board of Directors in accordance with the provisions of the

applicable laws.

Minutes of meetings of Board Committees and other Committee as specified by

the Board shall be placed before the Board for its perusal, discussion and noting.

The decisions of the Committees shall be taken by simple majority of the

members of the respective Committees and each member shall exercise one vote.

Chairman of the Committee shall not be entitled to a second or casting vote at

any meetings of the Committee.

Audit Committee

The Audit Committee shall be responsible to deals with all material questions

concerning the auditing and accounting policies of the Company and their

financial controls and systems or any other function as may be determined by

the Board.

Nomination and Remuneration Committee

The role of nomination and remuneration committee shall be to identify

persons who are qualified to become director, recommend the Board their

appointment, removal and also carry out evaluate performance of every

director.

The committee shall formulate the criteria for determining qualifications,

positive attributes and independence of a director keeping (‘fit & proper’

criteria). The committee shall also formulate a policy relating to the

remuneration of directors.

Risk Management Committee

The risk management committee shall have 3 members of which at least 1 shall

be independent.

The Risk Management Committee shall be responsible for setting up and

reviewing risk management policies of the Company from time to time. The

Risk Management Committee shall primarily be responsible for identifying,

monitoring, managing and mitigating the credit risk, market risk, operational

risk and other risks of the Company that can be applicable to the Company

considering the business operations of the Company through integrated risk

management systems, strategies and mechanisms.

Asset Liability Management Committee

The Asset Liability Management committee shall have at least three members

and as per the applicable provisions of Regulation/Guidelines issued by RBI in

this regard

The role of Asset Liability Management committee shall be to:

1) monitor asset – liability mismatch

2) strategize on mitigation of the mismatch

Credit & Investment Committee

The credit and investment committee shall have 4 members.

The Credit & Investment Committee is responsible for the deployment of

capital / resources of the Company. It shall approve credit proposals in

accordance with Risk Framework and Policy approved by the Board of

Directors of the Company.

The Committee shall meet as and when required.

Corporate Social Responsibility (CSR) Committee

The CSR Committee shall decide upon the corporate social responsibility

activities of the Company and the CSR expenditure to be incurred by the

Company and recommend the same to the Board for its consideration and

approval. The Committee shall be responsible for monitoring the CSR Policy of

the Company.

At least one meeting of the Committee shall be held every year.

CONCLUSION

CONclusion

Corporate governance contributes to growth and development of the corporation itself, the

community around it and the state in general. For long now the role of the company is not only

151

to produce or provide services, thus acquiring profit. Companies now take the responsibility for

development of the social surroundings.

Corporate governance represents a key element in improving economic efficiency and growth

and increasing the trust of investors.

Corporate governance is important for economic development and its important role is to

encourage local and foreign investments in the economy. However, there will be no inflow of

investments until the investors are convinced that the risk is reduced and until they get tangible

evidence that the government activities do not involve mere rhetoric.

Existence of a good corporate governance system ensures transparency, fairness and

responsibility to shareholders and other stakeholdersin the company.

In the modern times of business operations, the strategic path of the top management should

focus on how to implement socially responsible activities in the company operations. Top

management must find the ways in which corporate responsibility can be effectively

incorporated into the company strategy, as a necessary and sufficient prerequisite for

achievement and maintenance of competitive advantagesin a turbulent environment.

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