Axis Finance

Code of Conduct

• The Directors shall attend the Board Meetings regularly and effectively.

• The Directors shall study the Board papers thoroughly and use the good offices of the Chief Executive for eliciting any information at the Board Meetings, wherever necessary.

• The Directors shall ask the Chairman to furnish the Board Papers and Follow Up Reports on a definite time schedule.

• The Directors shall involve themselves in general policy formulation and also ensure that the performance of the Company is monitored adequately at the Board levels.

• The Directors shall be familiar with the broad objective of the Company and the policies laid down by the concerned regulatory authorities.

• The Directors may make valuable contributions by suggesting constructive ideas for better management of the Company.

• The Directors shall work as a team and not sponsor or be prejudiced against individual proposals. The management on its part is supposed to furnish full facts and complete papers in advance.

• The Directors shall try to give as much of their wisdom, guidance and knowledge as possible to the management.

• The Board of Directors shall guide the Senior Management of the Company.

• The Directors shall try to analyze the trends of economy, assist in the discharge of management's responsibility to public and formulation of measures to improve customer service and be generally of constructive assistance to the management.

• The Directors shall not send any instruction or give direction to any individual officer of the Company.

• The Directors shall not involve themselves in matters of personnel administration - whether it is appointment, transfer, posting or a promotion or a redressal of individual grievances of any employee.

• The Directors shall not interfere in the day-to-day functioning of the Company.

• The Directors shall not approach or influence for sanction of any kind of facility from an individual branch manager or any other officer of the Company.

• The Directors shall not involve themselves in the routine or everyday business and in the management functions of the Company.

• The Directors shall not reveal any information relating to any constituent of the Company to anyone as they are under oath of secrecy and fidelity.

• The Directors shall not send for individual officers of the Company or give directions to such officers on any matter.

• The Directors shall discourage the individual employee or unions approaching them in any matter.

• The Directors may indicate their directorship of the Company on their visiting card/letter head, but the logos or distinctive design of the Company should not, however, be displayed on the visiting card/ letterhead.

• The Directors shall not directly call for papers/files/notes recorded by various departments for scrutiny etc. In respect of agenda items to be discussed in the meetings, all information/ clarification that may be required for taking a decision shall be made available by the executives.

• The Directors shall ensure confidentiality of the Company's agenda papers/notes. Ordinarily, it is suggested that by way of abundant precaution, the Board papers may be returned to the Company after the meeting.

• The Directors shall not sponsor any loan proposal, building and sites for Company's premises, enlistment or empanelment of contractors, architects, doctors, lawyers, etc.

• The Directors shall abstain from doing anything, which will interfere with and/or be subversive of maintenance of discipline, good conduct and integrity of the staff.

• The Board Members and Senior Managers shall act in the best interests of, and fulfill their fiduciary obligations to the Company.

• The Board Members and Senior Managers shall act honestly, fairly, ethically and with integrity.

• The Board Members and Senior Managers shall conduct themselves in a professional, courteous and respectful manner and not take improper advantage of their position.

• The Board Members and Senior Managers shall deal fairly with all stakeholders.

• The Board Members and Senior Managers shall comply with all applicable laws, rules and regulations.

• The Board Members and Senior Managers shall act in good faith, responsibly, with due care, competence and diligence, without allowing their independent judgment to be subordinated.

• The Board Members and Senior Managers shall help create and maintain a culture of high ethical standards and commitment to compliance.

• The Board Members and Senior Managers shall not use the Company's property or position for personal gain.

• The Board Members and Senior Managers shall not accept from or give to stakeholders, gifts or other benefits not customary in normal social interaction.

• The Board Members and Senior Managers shall not use any information or opportunity received by them in their capacity as Directors or senior management in a manner that would be detrimental to the Company's interests.

• The Board Members and Senior Managers shall not use confidential information acquired in the course of their service as Directors or senior management for their personal advantage or for the advantage of any other entity.

• The Board Members and Senior Managers shall abstain from discussion, voting or otherwise influencing a decision on any matters that may come before the Board in which they may have a conflict or potential conflict of interest.

• The Board Members and Senior Managers shall disclose any personal interest that they may have regarding any matters that may come before the Board.

Whistleblower Policy

All Directors and Employees of the Company.

WHISTLEBLOWER POLICY

It was observed that in many organizations employees were permitted to remain anonymous while making a disclosure. Employees were given a platform for reporting their concern without fear of retribution or vengeful action from the persons against whom the complaint was submitted. The facility to report wrongdoing in an anonymous manner was hence found to be an effective means of receiving quick feedback from the ground level.

It was felt that a significant change be made in the policy tenets to include the handling of anonymous complaints. This was also in view of the fact that the Company is growing rapidly and needs to enhance the scope of this formalized mechanism for early detection of frauds and malpractices.

Further, for an effective impact of the Policy it was felt that employee awareness be reinforced through appropriate dissemination. The Whistleblower Policy would now form a part of the welcome kit material to be handed over to all new employees on joining. The concept and the salient features of the revised policy are reproduced herein below. All Directors and employees are advised to go through the policy contents carefully and exercise their right judiciously.

1. Preface
A central tenet in the Company’s Policy on corporate governance is commitment to ethics, integrity, accountability and transparency. To ensure that the highest standards are maintained in these aspects on an on-going basis and to provide safeguards to various stakeholders (including shareholders, depositors and employees) the Company has formulated a “Whistleblower Policy” (“the Policy") that provides Directors and employees with the opportunity to address serious concerns arising from irregularities, malpractices and other misdemeanors committed by the Company’s personnel by approaching a Committee set up for the purpose (known as the Whistleblower Committee). In case the offences are committed by senior management, the Policy enables the Company’s staff to report the concerns to the Audit Committee of the Board. As detailed in this document, the Policy is intended to encourage employees to report suspected or actual occurrence(s) of illegal, unethical or inappropriate actions, behaviors or practices by staff without fear of retribution.

2. Glossary of Terms
A glossary of terms used in the Policy is outlined below.

(a) “Whistleblower” refers to a Director or an employee of the Company who voluntarily reports suspected occurrence(s) of illegal, unethical or inappropriate actions, behaviors or practices by staff within the Company.
(b) “Employee” refers to the personnel of the Company (employed in India or overseas).
(c) “Director” refers to the person appointed as Director of the Company under the provisions of Companies Act, 1956 or 2013
(d) “Protected Disclosure” refers to any communication by the Whistleblower
(e) “Subject” refers to an employee against whom a Protected Disclosure has been made or against whom evidence has been gathered during the course of an investigation.
(f) “Designated Authority” refers to the Whistleblower Committee or the Chairman of the Audit Committee of the Board
(g) “Ethical Counselor” refers to a person who is appointed by the Company to provide clarity to employees with reference to the applicability of the Whistleblower Policy.

3. Scope and Coverage of the Whistleblower Policy
As stated above, the Policy is intended to address the concerns of Directors or employees relating to any wrongdoing within the Company, enabling them to report suspected occurrence(s) of illegal, unethical or inappropriate actions, behaviors or practices.
Directors or Employees who wish to remain anonymous while reporting a wrongdoing may do so under the Policy.
As the range of activities that constitute offence under the Whistleblower Policy is large and it may be difficult to list these exhaustively, the key wrongdoings are stated below:

(a) Violation of Code of Conduct for Directors or employees
(b)Misuse of office and authority
(c) Violation of laid down rules and regulations or communicated procedures of the Company (relating to accounting, internal control, operations etc.)
(d) Any fraud in preparation of financial statement of the Company
(e) Failure to comply with legal, compliance and regulatory requirements
(f) Misappropriation of funds
(g) Actual or suspected fraud or irregularities including forgery or alteration of documents
(h) Criminal offences committed or likely to be committed that may implicate the Company or otherwise adversely affect its reputation
(i) Discrimination against a member of staff, service recipient or service provider on grounds of sex, caste, religion or disability
(j) Cases of conflict of interest – e.g. sanction of loans, investment decisions, purchase of goods and hiring of services where an employee may have an interest
(k) Any other form of inappropriate/unethical/unlawful action or conduct (conduct may be considered unethical if it undermines universal core ethical values such as integrity and honesty)
(l)Complaints of sexual harassment received by the Whistleblower Committee will be referred to a body set up specifically for the purpose (in terms of a Supreme Court directive of 1997) : the Complaints Committee (Sexual Harassment at Work Place)
(m) A Director or an employee who has submitted three complaints or protected disclosures which are seen to be in bad faith will no longer be eligible for further protected disclosures or complaints under the Whistleblower Policy

4. Role of the Whistleblower

(a) A Whistleblower is a person who will merely report a misdemeanor, as stated earlier, without acting as an investigator and will not, therefore, act on his own in conducting an investigative activity, other than as requested by the Designated Authority or the Audit Committee of the Board.
(b) Following from the above, on detecting a wrong-doing or misdemeanor, the Whistleblower will not determine corrective or remedial action that may be warranted under the circumstances.
(c) The Whistleblower should provide specific and verifiable details in the Protected Disclosure in appropriate language that is not offensive.
(d) The Whistleblower can discuss all matters related to the Whistleblower Policy, including his role and the implications of submitting the Protected Disclosure with the Ethical Counselor. The final decision to submit information under Protected Disclosure will, however, be the sole decision of the whistleblower.
(e) Though they would not necessarily be required to conclusively prove the points contained in the Protected Disclosure, in order to support their disclosure, the Whistleblower should provide sufficient evidence to establish a prima facie case for investigation.
(f) The Whistleblower can report instances of leak of any unpublished price sensitive information by any insider in contradiction of the Securities Dealing Code of the Company.

5. Protection available to the Whistleblower

(a) The identity of the Whistleblower (in case revealed) shall be kept confidential and will not be revealed unless required in terms of an order of a court of law.
(b) Complete protection will be given to the Whistleblower against retaliation or retribution consequent upon his/her having reported a Protected Disclosure.
(c) A Whistleblower will not get protection under the Policy if he is himself found guilty of misconduct. In other words, while the Committee will take cognizance of the Protected Disclosure, the Director’s or employee’s misconduct will be dealt with separately.
(d) The Company will take steps to minimize difficulties that a Whistleblower may face in the submission of a Protected Disclosure. For instance, he will be reimbursed expenses incurred in travel, boarding and lodging for tendering evidence, if warranted.
(e) Suitable disciplinary action (including termination of service) may be taken against the Subject in case he is found guilty of misconduct against the Whistleblower, in retaliation of a complaint submitted.
(f) In case any action has been initiated against the Whistleblower (for acts of omission or commission attributed to him) the disciplinary authority in such cases would be one level higher than the disciplinary authority in the normal course of action.
(g) Any Director or employee who assists in investigating a Protected Disclosure will also be protected to the same extent as the Whistleblower.
(h) In case the protection to the Whistleblower as well as Director or employees assisting in the investigation (as outlined above) is violated in any manner, the same may be reported to the Whistleblower Committee or the Chairman of the Audit Committee.

6. Composition of the Whistleblower Committee
The Whistleblower Committee of the Company will comprise of the following members:

(I) Mr. Bipin Kumar Saraf- MD & CEO
(II) Mr. Kishore Babu Manda- CRO
(iii) MR. Amith Iyer – CFO
Mr. Bipin Kumar Saraf would be the Chairman of the Whistleblower Committee.

7. Role of the Whistleblower Committee

(a) The Committee will consider the credibility of the complaint submitted through the Protected Disclosure, the gravity of the issue raised and the likelihood of proving the allegation(s) from independent, verifiable sources.
(b) The Committee would have the discretion to appoint any official or officials in the Company (considered suitable for the purpose) to carry out a preliminary investigation to establish the applicability of Whistleblower Policy.
(c) The Committee will decide on carrying out further investigation upon the receipt of the report of the official undertaking the preliminary investigation.

8. Ethical Counselor
The Company has appointed an Ethical Counselor to assist Directors or employees who have witnessed offences and are in need of counseling about their roles and responsibilities in seeking a redressal of the wrongdoings. To provide clarity to Directors or employees with reference to the applicability of the Whistleblower Policy, the Company has appointed Mr. Vishal Sharan, Executive Vice President as the Ethical Counselor. His e-mail ID and contact numbers are as follows:

Email ID - - vishal .sharan@axisfinance.in
Telephone no. 022-62260108
Mobile no. - 9819459402

9. Procedure for Reporting Protected Disclosures

(a) All Protected Disclosures reported against officials in the ranks of Senior Vice President and below should be addressed to the Whistleblower Committee which may be reported through the following channels :

• Email to the Whistleblower Committee at or
• Email to any of the members of the Committee ( , , ) or

(b) Protected Disclosures reported against the members of the Whistleblower Committee and employees in the rank of Executive Vice President and above (including MD & CEO) should be addressed to the Company Secretary (who in turn will forward the same to the ACB.)

The Chairman,
Audit Committee of the Board
Axis Finance Ltd.
Ground Floor, Axis House,
Wadia International Centre,
P.B Marg, Worli,
Mumbai – 400025

(c) There may be occasions when a Whistleblower submits a complaint to a person in the Company other than the members of the Whistleblower Committee. It is proposed that Protected Disclosures received by officials, in the rank of VP and above, be forwarded to the Whistleblower Committee for necessary action.
(d) Protected disclosures should preferably be reported in writing in order to ensure a precise understanding of the issues raised and should either be typed or written in legible handwriting in English, Hindi or in the regional language of the place of employment of the Whistleblower.
(e) It is suggested that the Protected Disclosure be forwarded under a covering letter (or as an attachment to the email message) such that only the covering letter/email message bears the identity of the Whistleblower. The Whistleblower should, preferably, not disclose personal details in the Protected Disclosure that may identify him.
(f) In case the Whistleblower has a personal interest in the matter, it should be disclosed at the outset in the forwarding letter/email message.
(g) The covering letter/email message should prominently indicate that the Protected Disclosure/complaint is being made under the “Whistleblower Policy”.
(h) Copies of documents that may help in establishing the veracity of the Protected Disclosure report/complaint may be attached to the Protected Disclosure.
(i) The envelope containing the Protected Disclosure/complaint (when made in paper form) should be marked “Confidential”.
(j) The Designated Authority shall detach the covering letter/email message and forward only the Protected Disclosure to the Investigators for investigation.
(k) In order that the confidentiality of the Whistleblower (in case of Director or an employee who has revealed his/her identity) is maintained, an acknowledgement of receipt of the Protected Disclosure/complaint will be sent to the Whistleblower only through email.

10. Investigation and Redressal of the Complaint

(a) The Protected Disclosure or complaint received by the Whistleblower Committee will be examined by it within 15 days to determine if a prime-facie case exists for further investigation.
(b) Further investigation will be initiated within 15 days of the receipt of the Protected Disclosure to ensure prompt action.
(c) However, the decision to conduct an investigation is by itself not an acceptance of the allegations. In other words, the investigation process is to be treated as a neutral factfinding process.
(d) The Subject will normally be informed of the allegations at the outset of a formal investigation and will have the opportunity to provide his inputs during the investigation.
(e) The identity of the Subject(s) as well as the Whistleblower will be kept confidential to the extent possible given the legitimate needs of law and the stage of the investigation.
(f) A Subject will have the right to consult with a person or persons of their choice, other than the Investigators and/or members of the Audit Committee and/or the Whistleblower (Subjects shall be free at any time to engage counsel at their own cost to represent them in the investigation proceedings).
(g) The Whistleblower will be informed about the final decision normally within 60 days of receipt of the Protected Disclosure.
(h) The Investigation Report with its recommendations will be submitted to the Managing Director/ACB as the case may be.
(i) If either the Whistleblower or the Subject is dissatisfied with the disposal of his Protected Disclosure report, they may approach the MD & CEO and/or the Chairman of the ACB for review.

11. Outcome of Investigations into Allegations under a Whistleblower Policy
If an investigation leads the Designated Authority to conclude that an improper, unethical, fraudulent act or misconduct has been committed, the Designated Authority shall recommend to the management of the Company to take such disciplinary or corrective action against the erring officials (Subjects) as the disciplinary authority may deem fit. It is clarified that any disciplinary or corrective action initiated against the Subject(s) as a result of the findings of an investigation pursuant to this Policy shall adhere to the applicable personnel or Staff Conduct and Disciplinary Procedures.

12. Reporting to the Audit Committee of the Board (ACB)
A quarterly report on the findings under the Whistleblower Policy will be submitted to the ACB for information. The Compliance department will be the convener of the Whistleblower Committee and will monitor and will submit the quarterly reports to the ACB.

13. Display and Notification
The Whistleblower Policy shall be displayed on the Company’s intranet, and a paper copy of this will be made available to any person on demand from any of the offices of the Company. New employees in the Company will be informed about the Policy as part of their joining formalities.

14. Administration of the Whistleblower Policy
The Compliance Officer is responsible for the administration, revision, interpretation and application of this Policy. The Policy will be reviewed and revised as and when required.
This Policy has been reviewed and approved by the Audit Committee at its meeting held on July 15, 2019 and shall be deemed to come into effect from the said date.

AFL- Guidelines on Corporate Governance

AXIS FINANCE’S PHILOSOPHY ON CORPORATE GOVERNANCE

The Company’s philosophy on Corporate Governance envisages the attainment of the highest levels of transparency, accountability and equity, in all facets of its operations and in all interactions with its stakeholders. The Company believes that all its operations and actions must serve the underlying goal of enhancing long-term shareholder value. In our commitment to practice sound governance principles, we are guided by the following core principles:

• TRANSPARENCY To maintain the highest standards of transparency in all aspects of our interactions and dealings.
• DISCLOSURES To undertake timely dissemination of all price sensitive information and matters of interest to our stakeholders.
• EMPOWERMENT AND ACCOUNTABILITY To demonstrate the highest levels of personal accountability and to ensure that employees consistently pursue excellence in everything they do
• COMPLIANCES To comply with all the laws and regulations applicable to the company.
• ETHICAL CONDUCT To conduct the affairs of the company in an ethical manner.

RBI GUIDELINES ON CORPORATE GOVERNANCE

In order to enable NBFCs to adopt best practices and greater transparency in their operations, RBI has in its Master Direction- Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 (Ref: RBI/DNBR/2016-17/45 Master Direction DNBR. PD. 008/03.10.119/2016-17 dated September 01, 2016 updated as on October 17, 2016) advised all applicable NBFCs to frame their internal guidelines on corporate governance with the approval of the Board of Directors. In pursuance of the same, the Company has framed the following internal Guidelines on Corporate Governance.

BOARD OF DIRECTORS

The Board of Directors 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 Board of Directors of the Company shall be constituted with proper balance of Executive Directors & Non-Executive Directors and shall also have a proper representation of Women Director/s and Independent Directors, pursuant to the provisions of Companies Act, 2013 and to the extent applicable also with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

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.
Evaluation of performance of all Directors should be undertaken annually. In this regard the Company should implement a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects.

BOARD MEETINGS

The Board should meet at least once in a quarter to consider among other businesses, quarterly performance of the Company and financial results. In order to enable the Board to discharge its responsibilities effectively and take informed decisions, necessary information should be made available to the Board including circulation of agenda and notes thereof as well as presentations on financials and other critical areas of operations of the Company. Adequate notice should be given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda are sent at least seven days in advance for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. The Board should also be kept informed of major events/items and approvals that are being taken wherever necessary. The Managing Director & CEO, should keep the Board apprised of the overall performance of the Company at such meetings and also otherwise.

CHARTER OF THE BOARD:

1. Primary Objectives

a) The primary role of the Board of Directors of the Company (the Company) is to provide effective guidance and oversight to the Management of the Company so that it delivers enduring sustainable value, is fully compliant with extant laws and regulations, and consistently functions in an ethical and efficient manner.
b) The Board also exercises its oversight through various Committees of the Board.

2. Composition:

2.1 The Board shall comprise of at least three directors
2.2 The Board shall shall have at least one-third of the total number of directors as independent directors (Independence would be decided upon by the Board and in accordance with the Companies Act, 2013 (hereinafter referred as the “Act”) and such other legal and regulatory environment that may be applicable to the Company.
2.3 The Board shall have at least one woman Director.
2.4 Maximum number of Directors shall not exceed 15 (Fifteen) except by passing special resolution at the General Meeting of the Company.

3. Secretary

The Company Secretary of the Company shall act as the Secretary to the Board Meetings.

4. Quorum

a) The quorum for meetings of the Board shall be 1/3rd of the total strength of the Board or three Directors, whichever is higher, including at least one independent Director. Where at any time the number of interested directors exceeds or is equal to two-thirds of the total strength of the Board of Directors, the number of directors who are not interested directors and present at the meeting, being not less than two, shall be the quorum during such time.
b) The said quorum requirements shall also be applicable in case the Board meeting is held through video conference. Provided that where requisite quorum in a meeting is available through physical presence of directors, other director(s) may participate in the meeting through video conference.

5. Meetings

a) The Board shall meet at least four times in a year, with a maximum time gap of one hundred and twenty days between any two meetings.

6. Chairman

a) The Non-executive Chairman of the Company, shall preside over all the meetings of the Board.
b) In the absence of the Non-executive Chairman, the members of the Board shall elect one amongst themselves to be the Chairman for that meeting.

7. Terms of Reference

The Board shall act and have powers in accordance with the terms of reference which inter alia includes:
a) The responsibilities of the Board shall include overseeing the functioning of the Company, monitoring legal/ statutory compliance, reviewing the efficacy of internal controls, systems and processes and management of risks associated with the businesses of the Company on the basis of information provided to it by the Management of the Company.
b) The Board shall be responsible for approving the strategic direction, plans and priorities of the Company.
c) The Board shall be responsible for monitoring corporate performance against strategic business plans, including overseeing financial and operating results on a periodic basis to evaluate whether the business of the Company is being properly managed.
d) The Board shall also be responsible for overseeing Company’s corporate governance framework and supervising the succession planning process of the Company for the post of the Managing Director & CEO, the Whole Time Directors and the senior management of the Company.
e) The Board shall meet periodically to consider and review matters as required under law and to consider, review the reports submitted to it by the Management of the Company on the performance of the Company, its plans and prospects as well as immediate issues being faced by the Company.
f) The Board of Directors shall periodically review the matters forming part of the seven critical themes as prescribed by the Reserve Bank of India (RBI), viz. Business Strategy, Risk, Financial Reports and Integrity, Compliance, Customer Protection, Financial Inclusion and Human Resources and such other matters as may be directed by the RBI, from time to time.
g) The Board of Directors shall be responsible for framing, implementing and monitoring the risk management plan for the Company. The Board of Directors may delegate monitoring and reviewing of the risk management plan to a Committee consisting of members of the Board and such other functions as it may deem fit, including cyber security.
h) The Members of the Board are expected to act in good faith, exercise requisite diligence and care so as to exercise their judgment on an informed basis in what they reasonably and honestly believe to be in the best interests of the Company.
i) In addition to the above, the duties and responsibilities of the Board shall be as stipulated under the relevant provisions of the Companies Act, 2013, the RBI Master Directions for NBFCs, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the Memorandum of Association and the Articles of Association of the Company, as amended, from time to time and the Guidelines issued by the RBI or any other statutory/regulatory authority in this regard, from time to time.

8. Review of Charter

The Charter may be amended pursuant to changes in applicable laws, rules, regulations and guidelines issued by the Reserve Bank of India, or Securities and Exchange Board of India or the Ministry of Corporate Affairs, in this regard. The revised Charter would be subject to the review and approval of the Board of Directors of the Company and the revised Charter shall be deemed to have come into effect from the date of such approval by the Board.

COMMITTEES OF THE BOARD & MANAGEMENT

To assist the Board of Directors, a set of independent, qualified and focused committees of the Board comprising Directors of the Company should be constituted. These Board Committees should have specific terms of reference/scope to focus effectively on the issues and ensure expedient resolution of diverse matters. The Committees should operate as empowered agents of the Board as per their charter/terms of reference. The minutes of the meetings of all Committees of the Board shall be placed before the Board for discussions / noting. While the RBI Master Direction mentioned above, require the setting up of an Audit Committee, Nomination Committee, Risk Management Committee and the Asset Liability Management Committee (ALCO), the Companies Act, 2013 read with the SEBI LODR Regulations, requires setting up of an Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility (CSR) Committee, Risk Management Committee and Stakeholders Relationship Committee / Grievance Redressal Committee.

Audit Committee – The Audit Committee shall be constituted in accordance with the provisions of the Companies Act, 2013 and the SEBI LODR regulations (as applicable). The matters pertaining to financial results and auditors report shall be taken care of by the Audit Committee and they shall have the powers, functions and duties as laid down in the Companies Act, 2013. The Audit Committee shall ensure that an Information System Audit of the internal systems and processes is conducted at least once in two years to assess operational risks faced by the Company.

Charter of the Audit Committee:

1. Primary Objectives

The Audit Committee (hereinafter referred as the “Committee”) is a committee of the Board of Directors (hereinafter referred as the “Board”) established in accordance with the Company’s constitution and authorized by the Board to assist it in fulfilling its statutory, fiduciary and regulatory responsibilities. It has the authority and power to exercise the role and responsibilities set out in this charter or granted to it under any separate resolutions of the Board from time to time.

1.2 The primary role of the Audit Committee is that of assisting the Board in overseeing the:-

– Accuracy, Integrity and transparency of the Company’s financial statements;
– Qualification and independence of the Statutory auditors;
– Performance of the Company’s Statutory auditors and the Internal Audit function; and
– Adequacy and reliability of the internal control system.
– Approval of transactions with related parties.

1.3 The role, responsibilities and powers of the Committee shall include the matter set out in this Charter and such other items as may be prescribed by applicable laws or by Board as amended from time to time.

2. Composition:

2.5 The Audit Committee shall comprise of at least three directors as members of the Committee with independent directors forming a majority. (Independence would be decided upon by the Board and in accordance with the Companies Act, 2013 (hereinafter referred as the “Act”) and such other legal and regulatory environment that may be applicable to the Company.
2.6 All members of Audit Committee shall be ‘financially literate’ (which at minimum means possessing a working familiarity with the basic finance and accounting practices) and at least one member shall, member shall have accounting or related financial management expertise.
2.7 The Board shall designate one of the member of the Audit Committee as the Chairman of the Committee who shall be an Independent Director.

3.Secretary The Company Secretary of the Company shall act as the Secretary to the Committee Meetings.

4. Quorum The quorum necessary for transacting business at a meeting of the Committee shall be two members or one-third of the members of the Audit Committee; whichever is greater with at least two Independent Directors. A duly convened meeting of the Committee at which the requisite quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

5. Meetings The Committee shall meet at least 4 times in a year and not more than 120 days shall elapse between two successive meetings.
The audit committee at its discretion shall invite the head of the finance function and a representative of the statutory auditor and Internal Auditor and any other such executives to be present at the meetings of the committee.

6. Annual General Meeting The Chairman of the Committee shall attend the Annual General Meeting to answer shareholder queries and provide any clarifications on matters relating to audit.

7. Terms of Reference The Committee shall act and have powers in accordance with the terms of reference which inter alia includes:

7.1 To provide direction and to oversee the operation of the audit function.
7.2 To review the internal audit system with special emphasis on its quality and effectiveness.
7.3 To review findings of internal and concurrent audit reports.
7.4 To discuss the matters related to frauds, if any.
7.5 To review the concurrent audit system of the Company (including the appointment of concurrent auditors) and appointment of Internal and statutory auditors.
7.6 To oversee the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
7.7 To recommend to the Board, the appointment, re-appointment, remuneration and terms of appointment of the statutory auditors of the Company.
7.8 To approve payments to statutory auditors for any other services rendered by them.
7.9 To review, with the management, the annual financial statements and auditor’s report thereon before submission to the Board for approval with particular reference to:

• Matters required to be included in the Director’s Responsibility Statement in the Board’s report in terms of clause (5) of section 134 of the Companies Act, 2013.
• Changes, if any, in accounting policies & practices and reasons for the same.
• Major accounting entries involving estimates based on the exercise of judgment by the management.
• Significant adjustments made in the financial statements arising out of audit findings.
• Compliance with listing and other legal requirements relating to financial statements.
• Disclosure of any related party transactions.
• Modified opinion in the draft audit report.

7.10 To review with the management, the quarterly, half yearly and yearly financial statements before submission to the Board for approval.
7.11 To review with the management, performance and independence of statutory and internal auditors, adequacy of the internal control systems and effectiveness of audit process.
7.12 To review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing, seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.
7.13 To discuss with Audit Executive / Internal Auditors any significant audit findings and follow up thereon.
7.14 To review the findings of any internal investigations by the internal / statutory auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
7.15 To discuss with Statutory Auditors, before the commencement of audit, the nature and scope of audit as also conduct post-audit discussion to ascertain any area of concern.
7.16 To review the status of Compliance with respect to observations of inspection report of RBI and ______audit reports by external agencies, if any.
7.17 To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
7.18 To review functioning of the Whistle Blower and Vigilance Mechanism.
7.19 To approve the appointment of the Chief Financial Officer. The Audit Committee, while approving the said appointment, shall assess the qualifications, experience & background, etc. of the candidate.
7.20 To approve any subsequent modification of transactions of the Company that shall involve related parties.
7.21 Scrutiny of inter-corporate loans and investments which are not in the ordinary course of business of the Company.
7.22 Evaluation of internal financial controls and risk management system.
7.23 Valuation of undertakings or assets of the company, wherever it is necessary.
7.24 Review and approve the change in the incumbency of the Chief Compliance Officer of the Company.
7.25 Review of cases of wilful defaults.

8. Review of Audit Committee Charter
The adequacy of this charter shall be reviewed and reassessed by the Committee as may be deem fit by the Committee and appropriate recommendations shall be made to the Board to update the same based on the changes that may be brought about to the regulatory framework, from time to time.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee shall be constituted in accordance with the provisions of the Companies Act, 2013. The committee shall look into the matter pertaining to remuneration of Key Executives & Directors and shall also ensure 'fit and proper' status of proposed/ existing directors.

Charter of the Nomination and Remuneration Committee:

1. Primary Objectives

The Nomination and Remuneration Committee (hereinafter referred as the “Committee”) is a committee of the Board of Directors (hereinafter referred as the “Board”) established in accordance with the Company’s constitution and authorized by the Board to assist it in fulfilling its statutory, fiduciary and regulatory responsibilities. It has the authority and power to exercise the role and responsibilities set out in this charter or granted to it under any separate resolutions of the Board from time to time. The Committee shall as per this charter and as per the policy approved by the Board have primary objective of:

• Identify persons who are qualified to become directors of the Board and recommend the same to the Board.
• Identify persons who may be appointed in senior management of the Company and recommend the same to the Board.
• Shall formulate the policy for determining qualifications, positive attributes and independence of Director and the remuneration to them, Key managerial personnel (hereinafter referred as the “KMP”) and other employees.

2. Composition

2.1 The Committee shall comprise of three or more non-executive Directors out of which at least half shall be Independent Directors. (Independence would be decided upon by the Board and in accordance with the Companies Act, 2013 (hereinafter referred as the “Act”) and such other legal and regulatory environment that may be applicable to the Company.
2.2 The Chairperson of the Committee shall be appointed by the Board or with the consent of majority of Members of the Committee.
2.3 The Chairman of the Company whether (executive or non-executive) may be appointed as a member of the Committee but shall not chair a Committee.

3. Secretary

The Company Secretary of the Company shall act as the Secretary to the Committee Meetings.

4. Quorum

The quorum necessary for transacting business at a meeting of the Committee shall be two members or one-third of the members of the Committee; whichever is greater. A duly convened meeting of the Committee at which the requisite quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

5. Meeting

The Committee shall meet as and when required or as stipulated by Board from time to time.

6. Annual General Meeting

The Chairman of the Committee shall attend the Annual General Meeting to answer shareholder queries.

7. Terms of Reference:

The Committee shall act and have powers in accordance with the terms of reference which inter alia includes:

7.1 Nomination / Governance Matters:

The Committee assists, advises and recommend the Board on:
1. To formulate Fit & Proper criteria for determining qualifications, positive attributes and independence of a Director in line with the prescribed guidelines of the RBI or other regulatory bodies.
2. To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal.
3. The Committee is primarily responsible along with the Board to lay down the format and the procedure in which the Board, its Committees and all the individual Directors of the Company will be evaluated annually. The process will be as according to the Act and with the Listing Regulations.
4. To formulate the criteria for determining qualifications, positive attributes and independence of a director.

7.2 Remuneration / HR Matters:

1. To recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
2. To recommend to the Board, salary (including annual increments) to be paid to the Company’s Managing Director & CEO, the Whole-Time Directors and Senior Management.
3. To recommend perquisites commission and retirement benefits to be paid to the Company’s Managing Director & CEO and Whole-Time Directors
4. To review the code of conduct and HR Policies.

7.3 To carry out such other functions as may be specifically referred to the Committee by the Board of Directors of the Company.

8. Review of Committee Charter

The adequacy of this charter shall be reviewed and reassessed by the Committee as may be deem fit by the Committee and appropriate recommendations shall be made to the Board to update the same based on the changes that may be brought about to the regulatory framework, from time to time.
Risk Management Committee (RMC) – The RMC shall be constituted to manage the integrated risk and further oversee the Risk Management function of the Company. The RMC shall also monitor and review the risk management plan of the Company.

Charter of the Risk Management Committee:

1. Primary Objectives

The Risk Management Committee (hereinafter referred as the “Committee”) is a committee of the Board of Directors (hereinafter referred as the “Board”) established in accordance with the Company’s constitution and authorized by the Board to assist it in fulfilling its statutory, fiduciary and regulatory responsibilities. It has the authority and power to exercise the role and responsibilities set out in this charter or granted to it under any separate resolutions of the Board from time to time.

2. Composition

2.1 The Committee shall comprise of three or more Directors as may be determined by the Board.
2.2 The Chairperson of the Committee shall be appointed by the Board or with the consent of majority of Members of the Committee

3. Secretary

The Company Secretary of the Company shall act as the Secretary to the Committee Meetings.

4. Quorum

The quorum necessary for transacting business at a meeting of the Committee shall be two members or one-third of the members of the Committee; whichever is greater. A duly convened meeting of the Committee at which the requisite quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

5. Meeting

The Committee shall meet as and when required or as stipulated by Board from time to time.

6. Terms of Reference of the Committee

The terms of reference of the Committee broadly are as under;

1. To perform the role of Risk Management in pursuance of the Risk Management Guidelines issued periodically by RBI and Board.
2. To advise the Board on all high level risk matters.
3. To review the effectiveness of the company’s internal control and risk management framework, in relation to its core strategic objectives.
4. To review the Asset Liability Management (ALM) of the company on a regular basis.
5. To consider any major regulatory issues that may have bearing on the risks and risk appetite of the company.
6. To decide the policy and strategy for integrated risk management containing various risk exposures of the company including the Credit, Market, Liquidity, Operational, Reputation Risk and Interest Rate Risk.

7 Access to Information:

The Committee has direct and unlimited access to all resources necessary to discharge its duties and responsibilities, including engaging counsel, accountants or other experts as it considers appropriate. This may include requesting management or engaging external remuneration consultants to provide information to the Committee. The Committee also has the authority to conduct or direct any investigation required to fulfill its responsibilities.

8. Other Functions

• Perform other activities related to this Charter as may be determined by the Board.
• Carry out additional functions as per the regulatory requirements applicable to the Company.

9. Review of Committee Charter

The adequacy of this charter shall be reviewed and reassessed by the Committee as may be deem fit by the Committee and appropriate recommendations shall be made to the Board to update the same based on the changes that may be brought about to the regulatory framework, from time to time.

Asset Liability Management Committee (ALCO Committee) – The ALCO is a decision making unit responsible for balance sheet planning from risk-return perspective including the strategic management of interest rate and liquidity risks. The ALCO, shall consider, inter alia, product pricing for both deposits and advances, desired maturity profile and mix of the incremental assets and liabilities, prevailing interest rates offered by other peer NBFCs for the similar services/product, etc. The ALCO shall also articulate the current interest rate view of the Company and base its decisions for future business strategy on this view. In addition to monitoring the risk levels of the Company, the ALCO shall review the results of and progress in implementation of the decisions made in the previous meetings. The ALCO comprises of three members and is headed by MD & CEO. The quorum for transacting business at a meeting of the Committee shall be at least two or one-third of the members of the Committee, whichever is higher.

CSR Committee – – The committee shall be constituted in in accordance with the provisions of the Companies Act, 2013 and shall focus on compliance of CSR policy and framework by the Company and shall monitor the expenditure to be incurred by the Company.

Charter of the CSR Committee:

1. Primary Objectives

The objective of the Corporate Social Responsibility Committee (the “Committee”) of the Board of Directors (the “Board”) the Company shall be to assist the Board and the Company in fulfilling its corporate social responsibility (“CSR”). The Committee has overall responsibility for:

• Formulate and recommend to the board corporate social responsibility policy (“the CSR Policy”), which shall indicate the activities to be undertaken by the Company as CSR activities that must be aligned with schedule VII of the Companies Act, 2013;
• Recommending the amount of expenditure to be incurred on the identified CSR activities; and
• Implementing and monitoring the CSR policy from time to time.
The purpose and responsibilities of the Committee shall include such other items/matters prescribed under applicable law or prescribed by the Board in compliance with applicable law from time to time.

The Committee is also responsible for reporting progress of various initiatives and in making appropriate disclosures on a periodic basis.

2. Composition

The Committee shall comprise of three or more Directors out of which at least one Director shall be Independent Director. (Independence would be decided upon by the Board and in accordance with the Companies Act, 2013 (hereinafter referred as the “Act”) and such other legal and regulatory environment that may be applicable to the Company.

3. Secretary

The Company Secretary shall act as the Secretary to the Committee Meetings.

4. Quorum

The quorum necessary for transacting business at a meeting of the Committee shall be two members or one-third of the members of the Committee; whichever is greater. A duly convened meeting of the Committee at which the requisite quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

5. Meeting

The Committee shall meet as and when required or as stipulated by Board from time to time.

6. Terms of Reference:

The Committee shall meet as and when required or as stipulated by Board from time to time.

The Committee shall act and have powers in accordance with the terms of reference which inter alia includes:

6.1 Formulating and recommending to the Board, the CSR activities to be undertaken by the Company either directly or through Axis Bank Foundation and determining the CSR projects / programmes which the Company plans to undertake during the year of implementation, specifying modalities of execution in the areas / sectors chosen and implementation schedules for the same.
6.2 Recommending the amount of expenditure to be incurred on the CSR activities.
6.3 Review and monitor the compliance of initiatives undertaken and evaluate performance of the activities against the agreed targets.
6.4 Conduct an impact-assessment of the various initiatives undertaken in terms of the CSR Policy at periodic intervals.
6.5 Instituting a transparent monitoring mechanism for ensuring implementation of the projects / programmes / activities proposed to be undertaken by the Company.
6.6 Reviewing and recommending the annual CSR report for the Board’s approval and for public disclosure.
6.7 Performing such other duties with respect to CSR activities, as may be required to be done under any law, statute, rules, regulations etc. enacted by Government of India, Reserve Bank of India or by any other regulatory or statutory body.

7. Review of Committee Charter:

The adequacy of this charter shall be reviewed and reassessed by the Committee as may be deem fit by the Committee and appropriate recommendations shall be made to the Board to update the same based on the changes that may be brought about to the regulatory framework, from time to time.

Grievance Redressal Committee – The committee shall be constituted in in accordance with the provisions of the Companies Act, 2013 and shall specifically look into the mechanism of redressal of grievances of shareholders, debentures holders and other security holders. The Committee shall consider and resolve the grievances of the security holders of the listed entity including complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends.

Charter of the Grievance Redressal Committee:

1. Primary Objectives

The Grievance Redressal Committee (hereinafter referred as the “Committee”) is a committee of the Board of Directors (hereinafter referred as the “Board”) established in accordance with the Company’s constitution and authorised by the Board to assist it in fulfilling its statutory, fiduciary and regulatory responsibilities. It has the authority and power to exercise the role and responsibilities set out in this charter and granted to it under any separate resolutions of the Board from time to time. The Committee shall as per this charter and as per the policy approved by the Board have primary objective of:

• Formulation of policies and procedures in line with the statutory guidelines to ensure speedy disposal of various requests received from customers and security holders from time to time; • Review the level of Customer / security holders Services in the Company including Customer Complaints and the nature of their resolution. • Provide Guidance in improving the customer / security holders service level / customer / security holders care aspects in the Company.

2. Composition

2.1 The Committee shall comprise of minimum two Directors as members as decided by the Board from time to time.
2.2 The Chairperson of committee shall be as decided by the Board or with majority of Members of the Committee.

3. Secretary

The Company Secretary shall act as the Secretary to the Committee Meetings.

4. Quorum

The quorum necessary for transacting business at a meeting of the Committee shall be two members or one-third of the members of the Committee. A duly convened meeting of the Committee at which the requisite quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

5. Meeting

The Committee shall meet as and when required or as stipulated by Board from time to time

6. Annual General Meeting

The Chairman of the Committee shall attend the Annual General Meeting to answer shareholder queries.

7. Terms of Reference

The Committee shall act and have powers in accordance with the terms of reference which inter alia includes:

• Formulation of policies and procedures in line with the statutory guidelines to ensure speedy disposal of various requests received from Customers and security holders from time to time;
• Review the level of Customer / security holders Services in the Company including Customer Complaints and the nature of their resolution.
• Provide Guidance in improving the customer / security holders service level / customer / security holders care aspects in the Company.
• Redressal of Customers and security holders complaints/ grievances;
• To monitor and review the performance and service standards of the Registrar and Share Transfer Agents of the Company and provides continuous guidance to improve the service levels for investors;
• Monitor and review any investor complaints received by the Company or through SEBI, SCORES and ensure their timely and speedy resolution, in consultation with the Company Secretary and Compliance officer and RTA of the Company.
• Monitor and Review customer complaints received by the Company or through Ombudsman or RBI and ensure their timely and speedy resolutions.

8. Review of Committee Charter

The adequacy of this charter shall be reviewed and reassessed by the Committee as may be deem fit by the Committee and appropriate recommendations shall be made to the Board to update the same based on the changes that may be brought about to the regulatory framework, from time to time.

Committee of Directors:

The Company has additionally set-up a Committee of Directors (COD), which approves / ratifies all the credit proposals. The COD comprises of 4 members.

Charter of Committee of Directors:

1. Primary Objectives

The Committee of Directors (hereinafter referred as the “Committee”) is a committee of the Board of Directors (hereinafter referred as the “Board”) established in accordance with the Company’s constitution and authorized by the Board to assist it in fulfilling its functional, statutory, fiduciary and regulatory responsibilities. It has the authority and power to exercise the role and responsibilities set out in this charter or granted to it under any separate resolutions of the Board from time to time.

2. Composition:

2.1 The Committee shall comprise of at least three directors as members of the Committee.
2.2 The Chairperson of the Committee shall be appointed by the Board or with the consent of majority of Members of the Committee

3. Secretary

The Company Secretary of the Company shall act as the Secretary to the Committee Meetings

4. Quorum

The quorum necessary for transacting business at a meeting of the Committee shall be two members or one-third of the members of the Committee; whichever is greater. A duly convened meeting of the Committee at which the requisite quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee

5. Meetings

The Committee shall meet once in a quarter or as and when required by the Company.

6. Terms of reference

The Committee shall act and have powers in accordance with the terms of reference which inter alia includes:

6.1 To consider, discuss, deliberate and approve the Loan proposals above certain specified limits and to discuss strategic issues in relation to credit policy and deliberate on the quality of the credit portfolio of the Company.
6.2 To consider and modify the terms of sanctions already granted by the Committee.
6.3 To review, consider, ratify or approve the loans sanctioned by the Committee of Executives.
6.4 To consider and approve the allotment of Debentures. To do or cause to be all the activities authorized by the Board w.r.t. Issue and Allotment of Debentures.
6.5 To consider, approve and adopt various policies of the Company unless the same is to be approved by the other authorities as may be stipulated in the applicable laws and to review the adequacy of those policies on the ongoing basis.
6.6 To consider and review the connected lending sanctioned by the Company.
6.7 To review investment strategy, periodically review investments made and approve investment related proposals.
6.8 To monitor the exposures (both credit and investments) of the Company and to consider and approve one time compromise settlement proposals, in respect of loan accounts which have been written off.
6.9 To review and approve proposals relating to the Company’s business/operations covering all its departments and business segments.
6.10 To ensure compliance with the statutory/regulatory framework, etc.
6.11 To discuss issues relating to day to day affairs/problems and to establish systems for facilitating efficient operations of the Company.
6.12 To authorize the employees of the Company for any transactions to be done on behalf of the Company including the statutory transactions w.r.t. Company Law Matters, RBI, NCLT, Courts, etc.
6.13 Issuance of Authority to various employees of the Company under the Insolvency and Bankruptcy Code 2016 and amendments thereto.
6.14 Any other matter as may be authorized by the Board of Directors or required to be done pursuant to any applicable laws, rules, regulations or as recommended by the Management of the Company.

7. Review of Charter of Committee of Directors

The adequacy of this charter shall be reviewed and reassessed by the Committee of Directors as may be deem fit by the Committee and appropriate recommendations shall be made to the Board to update the same based on the changes that may be brought in regulatory framework, from time to time.
Further, the adequacy of this charter shall be reviewed and reassessed by the Committee of Directors as may be deem fit by the Committee and appropriate recommendations shall be made to the Board to update the same.
The Company Secretary acts as the Secretary to all the meetings of the above listed committees.

ROTATION OF PARTNERS OF THE STATUTORY AUDITORS AUDIT FIRM

The Company shall rotate the partner/s of the Chartered Accountant firm conducting the audit, every three years so that same partner shall not conduct audit of the company continuously for more than a period of three years. However, the partner so rotated shall be eligible for conducting the audit of the Company after an interval of three years, if the Audit Committee / Board of Directors of the Company so decides.

DISCLOSURE AND TRANSPARENCY

(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:

(i) the progress made in putting in place a progressive risk management system and risk management policy and strategy followed by the Company;
(ii) 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.

(2) The Company shall also disclose the following in its Annual Financial Statements:

(i) registration/ licence/ authorisation, by whatever name called, obtained from other financial sector regulators;
(ii) ratings assigned by credit rating agencies and migration of ratings during the year;
(iii) penalties, if any, levied by any regulator;
(iv) information namely, area, country of operation and joint venture partners with regard to joint ventures and overseas subsidiaries and
(v) Asset-Liability profile, extent of financing of parent company products, NPAs and movement of NPAs, details of all off-balance sheet exposures, structured products issued by them as also securitization/ assignment transactions and other disclosures

SHAREHOLDERS

Shareholders shall be informed of details regarding the appointment or reappointment of a Director. Half yearly results and presentations made by the Company to analysts shall be put on the Company's web-site or sent to the Stock Exchange on which listed.

POLICIES ADOPTED BY THE COMPANY

Nomination and Remuneration Policy- - The Company has a Nomination and Remuneration Policy formulated in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto as amended from time to time. The policy shall apply to all Directors (Executive and Non-Executive), Key Managerial Personnel and Senior Management. The Policy lays down the roles of the Committee, criterion for appointment of Directors, Key Managerial Personnel and Senior Management and parameters for determining the remuneration of Directors, Key Managerial Personnel, Senior Management and other employees.

Corporate Social Responsibility (CSR) Policy - CSR Policy has been framed in accordance with Section 135 of the Companies Act, 2013 and the rules framed thereunder. As part of its initiatives under “Corporate Social Responsibility” (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation.

Policy on Fit and Proper Criteria – The Company has adopted a Board approved policy for ascertaining the fit and proper criteria of the directors at the time of appointment, and on a continuing basis. In terms of the said policy the Company ensures to:

a) obtain a declaration and undertaking from the directors giving additional information on the directors as per the laid down format;
b) obtain a Deed of Covenant signed by the directors, as per the laid down format; and
c) furnish to the Reserve Bank of India a quarterly statement on change of directors, and a certificate from the Managing Director of the Company that fit and proper criteria in selection of the directors has been followed.

The Company should ensure that the statement as mentioned in c) above reaches the Regional Office of the Department of Non-Banking Supervision of the Reserve Bank of India, Mumbai, within 15 days of the close of the respective quarter. Further the Company should also ensure that the statement submitted by the Company for the quarter ending March 31, is certified by the Statutory Auditors of the Company.

Policy on Anti-Money Laundering (AML) standards/ Know Your Customer (KYC) norms/ Combating of Financing of Terrorism (CFT) – – The Policy is designed to establish principles and standards to protect against attempts at laundering money through the Company. The objective of the policy is to enable the Company to understand it’s customers and their financial dealings in the interest of managing the related risks better. The policy is intended at preventing the Company from being used, intentionally or unintentionally, by the criminal elements for money laundering and financing of terrorist activities.

Code of Conduct for Employees - The Company has adopted the code of conduct for employee and also directors for the highest degree of transparency, integrity, accountability and corporate social responsibility. Any actual or potential violation of the Code would be a matter of serious concern for the Company

Vigil Mechanism / Whistle Blower Policy - The Company has a Whistle Blower Policy in place to deal with instance of fraud and mismanagement, if any. Employees of the Company are encouraged to use guidance provided in the Policy for reporting all allegations of suspected improper activities

Fair Practice Code- The code is in conformity with the guidelines on Fair Practices Code for NBFCs and has been developed with an objective of:

(a) Ensuring fair practices while dealing with customers
(b) Greater transparency enabling customers in having a better understanding of the product and taking informed decisions
(c) Building customer confidence in the company

Interest Rate Policy - The Company has adopted an Interest Rate Policy, which is been framed pursuant to RBI’s circular. The policy lays out the internal principles and procedures in determining interest rates, processing and other charges. The policy also lays out the interest rate model adopted by the Company for applying the interest rates for the assets

Grievance Redressal Policy – The Grievance Redressal Policy is framed with an aim to provide quick amends to customer issues. It has been drafted keeping the customer’s needs in mind and is based on the following principles:

• Fair treatment to the customers at all times
• Customer complaints to be dealt with complete courteously and priority
• Complete information provided to the customers to escalate their complaints, to a higher hierarchal authority
• Company will treat all complaints efficiently and fairly
• Employees work in good faith and in the interest of the customers

Document Handling Policy - The Listing Regulations has mandated listed entities to formulate a Policy for Preservation of Documents. It is in this context that the Policy for Preservation of Documents / Document Handling Policy is being framed and implemented by the Board of Directors of the Company. The Policy lays down the Company’s policy and operating guidelines with regard to safety and security of stationery, documents and other records.

Dividend Distribution Policy – The Company has adopted Dividend Distribution Policy pursuant to the provisions of Companies Act, 2013. The policy prescribes the provision and procedure for payment of Dividend to the Shareholders.

The above policies are reviewed by the Board of Directors from time to time.

CEO/CFO CERTIFICATION

The Managing Director & CEO and the CFO shall make the necessary certifications regarding the Financial Statements, internal controls, etc. to the Board.

COMPLIANCE OFFICER

The Company Secretary shall be primarily responsible to adhere to the requirements of this Code, as amended from time to time

OTHERS

The aforesaid guidelines will be reviewed periodically /revised as and when there are any new changes incorporated by law or otherwise. These guidelines will be made available on the website of the Company ( www.axisfinance.co.in) for the information of its various stakeholders. Any enhancement(s) or change(s) in the scope of this guidelines will be uploaded from time to time in future on the said website.
This Policy has been reviewed and approved by the Board of Directors at its meeting held on June 26, 2019 and shall be deemed to come into effect from the said date.

Caution Notice

It has come to our notice that certain individuals misrepresent themselves to be associated with Axis Finance Ltd. (hereby referred to as "AFL") and based on this deception, they make fictitious offers for loan products using our brand name or logo. AFL is not associated with such individuals / entities and the general public is hereby cautioned not to deal with such fraudsters who claim to be representatives of AFL, through web / email or otherwise. Any person entertaining such individuals / entities without verifying and confirming with AFL shall be doing so at his / her own risk and cost and AFL shall not be liable for any loss, damages or consequences thereof to any such person.

General public are advised not to accept any such loan offers and not to divulge any personal / other information to such callers offering loans without interest, loans secured by insurance payable annually, etc. in the name of AFL unless the identity of the person or entity is established and verified. If you come across suspicious product offers and loan proposals, please contact the local police station (cyber cell unit) and intimate us of the same.

Any person found to be indulging in such misrepresentation, cheating, fraud, dishonest and malafide actions will be dealt with strictly, including filing of criminal charges against them for damaging the interest of AFL.

Fair Practice Code

The Reserve Bank of India (RBI) has issued guidelines on Fair Practices Code for Non- Banking Financial Companies (NBFCs) thereby setting standards for fair business and corporate practices while dealing with their customers. Axis Finance Ltd. (“the Company/AFL”) hereby furnishes the Fair Practices Code (“the FPC”) based on the guidelines issued by RBI. The Company shall also make appropriate modifications in the FPC from time to time to confirm to the standards that may be prescribed by RBI from time to time. Considering the nature of business of the Company, it is proposed to establish the following as the Fair Practices Code for the Company’s lending activities.

The Fair Practices Code, as mentioned herein below, is in conformity with these Guidelines on Fair Practices Code for NBFCs as contained in the aforesaid RBI Circular. This sets minimum Fair Practice standards for the Company to follow when dealing with customers. It provides information to customers and explains how the Company is expected to deal with them on a day to day basis.

Objective of the Code
The code has been developed with an objective of:
(a) Ensuring fair practices while dealing with customers
(b) Greater transparency enabling customers in having a better understanding of the product and taking informed decisions
(c) Building customer confidence in the company

(i) Applications for Loans and their processing
(a) Axis Finance Limited (“The Company/ AFL) offers various financial products in the wholesale & Retail segments. All communications to the borrower shall be in vernacular language as understood by the borrower.
(b)The ‘Application Form / appropriate documents’ of AFL for each of these products offered by the Company is different depending upon the requirement of each product and will include all information that is required to be submitted by the Borrower. Necessary information will be provided by AFL to facilitate the Borrower in making a meaningful comparison with similar terms and conditions offered by other Non-Banking Finance Companies (NBFCs) and taking an informed decision based on the aforesaid comparison.
(c)The ‘Application Form/ appropriate documents’ of AFL may also indicate the list of documents required to be submitted by the Borrowers along with the Application form.
(d) AFL has a mechanism of giving an acknowledgement for receipt of Application form to its Borrower for availing loans. AFL would inform the Borrower about its decision within reasonable period of time from the date of receipt of all the required information in full.

(ii) Loan appraisal and terms/ conditions
AFL shall convey in writing to the Borrower by way of a sanction letter or otherwise, the amount of limit sanctioned along with all the terms and conditions including annualized rate of discount/ interest and method of application thereof and keeps the acceptance of these terms and conditions by the borrower on AFL’s record. Any clause relating to penal interest charged for late repayment will be specified in bold in appropriate documentation. AFL at the time of sanction / disbursements of loans will furnish a copy of loan agreement to the borrower in the vernacular language as understood by the borrower along with a copy each of all enclosures quoted in the loan agreement.

(iii) Disbursement of loans including changes in terms and conditions
(a) Through its published website or as appropriate if specific to a customer, AFL will give Notice to all its Borrowers, of any change in the terms and conditions of the sanction in the vernacular language as understood by the borrower. AFL will also ensure that changes in discount/ interest rates and charges are effected only prospectively. A suitable condition in this regard should be incorporated in the loan agreement.
(b) Decision to recall/ accelerate payment or performance under the Agreement will be in consonance with the respective loan Agreement.
(c)AFL will release all securities of its Borrower only on repayment of all dues by such Borrower, or only on realization of the outstanding amount of the Borrower’s availed limit, subject to any legitimate right or lien for any other claim which AFL may have against its Borrower. If such right of set off is to be exercised, the Borrower will be given notice about the same with full particulars about the remaining claims and conditions under which AFL will be entitled to retain the securities till the relevant claim is settled or paid by the Borrower.

(iv) General
(a) AFL will refrain from interference in the affairs of its Borrower except for the purposes provided in the terms and conditions of the respective loan agreement (unless new information, not earlier disclosed by the Borrower, which may come to the notice of AFL).
(b) In case of receipt of request from the Borrower for transfer of Borrower account, the consent or otherwise i.e. objection of AFL, if any, is generally conveyed to such Borrower within 21 days from the date of receipt of the Borrower’s request. Such transfer will be as per transparent contractual terms in consonance with all the applicable laws
(c) In the matter of recovery of outstanding dues of its Borrower, AFL does not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans/dues, etc. Training will be imparted to ensure that staff is adequately trained to deal with customers in an appropriate manner.

(v)Regulation of Excessive Interest charged
The Company has laid down appropriate internal principles and procedures in determining interest rates and processing and other charges.
The Company has adopted an interest rate model taking into account cost of funds, margin and risk premium etc. for determining rate of interest to be charged for loans and advances.
The rate of interest to be charged depends much upon the gradation of the risk of borrower viz. the financial strength, business, regulatory environment affecting the business, competition, past history of the borrower etc.

(vi)Grievance Redressal Mechanism
Borrowers and others who have grievances in respect of decisions of AFL’s functionaries may write to us at the below mentioned address: Axis Finance Limited
Axis House, Ground Floor, Wadia International Centre, P.B Marg,
Worli, Mumbai- 400 025
Tel: 022 2425 2425
Email:

In case the complaint is not resolved within the given time or if he/she is not satisfied with the solution provided by AFL, the customer can approach the Grievance Redressal Officer. The name and contact of the Grievance Redressal Officer is as follows:

Mr. Ashish Sampat
Tel: No.+91-22- 62260116
Email:

If the complaint/dispute is not redressed within a period of one month, the customer may approach and lodge a complaint to the respective zone wise RBI NBFC Ombudsman office. The customer can access the Ombudsman scheme for NBFCs alongwith the salient features of the scheme, contact details of Nodal Officer and address of RBI NBFC Ombudsman offices on AFL website.

To register complaints, the customers may use the channels mentioned above. If the complaint has been received in writing, AFL will endeavour to send an acknowledgement / response within a week.

Once the matter is examined, AFL endeavours to either send a final response to the customer or an intimation seeking more time within one month upon receipt of complaint.

Complaints that are received at our end will be seen in the right perspective and would be analysed from all possible angles.

The communication of AFL’s stand on any issue will be provided to the customers. Complaints that require some time for examination of issues involved will be acknowledged promptly.

The aforesaid policy will be reviewed periodically /revised as and when there are any new changes incorporated by AFL in handling complaints / grievances of the customer which includes introduction of new grievance channels, if any.

This Fair Practices Code will be available on the website of the company, for the information of its Borrowers and various stakeholders. Any enhancement(s) or change(s) in the scope of this code will be uploaded from time to time in future on the said website

Privacy Policy

Use of Information and Materials
The information contained in this website is for general information purposes only "as is" basis without any representations or warranties. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk. By accessing this site and any pages thereof, you agree to be bound by the terms and conditions below. If you do not agree to the terms and conditions below, do not access this site or any pages thereof.

Terms of use
The information and materials contained in these pages - and the terms, conditions, and descriptions that appear - are subject to change. Not all products and services are available in all geographic areas. Your eligibility for particular products and services is subject to final Axis Finance Limited determination and acceptance. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them. Every effort is made to keep the website up and running smoothly. However we take no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control. This web site and its contents is copy right of Axis Finance Limited. All rights are reserved. Nothing on this website constitutes, or is meant to constitute, advice of any kind. If you require advice in relation to any financial matter you should consult an appropriate professional.

Limitation of Liability
In no event will Axis Finance Limited be liable for any damages, including without limitation direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection with this site or use thereof or inability to use by any party, or in connection with any failure of performance, error, omission, interruption, defect, delay in operation or transmission, computer virus or line or system failure, even if Axis Finance limited, or representatives thereof, are advised of the possibility of such damages, losses or expenses. Hyperlinks to other internet resources are at your own risk; the content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by Axis Finance Limited.

Submissions
All information submitted to Axis Finance Limited via this site shall be deemed and remain the property of Axis Finance Limited. Axis Finance Limited shall be free to use, for any purpose, any ideas, concepts, know-how or techniques contained in information a visitor to this site provides Axis Finance Limited through this site. Axis Finance Limited shall not be subject to any obligations of confidentiality regarding submitted information except as agreed by the Axis Finance Limited, entity having the direct customer relationship or as otherwise specifically agreed or required by law. Axis Finance is committed to safeguard the confidentiality and security of information of the users of this web site. Axis Finance may disclose any information that is provided through this web site to: any company within the Axis Bank Group, to any other person or entity with the consent of the client, or if Axis Finance has a right or duty to disclose or is permitted or compelled to so disclose such information by law, for the time being in force. For example, Axis Finance may share/provide information with/to judicial bodies and regulatory authorities who have jurisdiction over Axis Finance. Axis Finance may also enter into agreement(s) with other company(ies) to provide services to Axis Finance or make services and products available to its clients and they may thus receive information about the users, but they may only use it for those purpose(s) that Axis Finance specifies.

No warranties
This web site, the information and materials on the site, and any software made available on the web site, are provided "as is" without any representation or warranty, express or implied, of any kind, including, but not limited to, warranties of merchantability, non-infringement, or fitness for any particular purpose or warranty of any kind, express or implied, regarding third party content. Inspite of AFL's best endeavours, there is no warranty of the website being free of any computer viruses. Some jurisdictions do not allow for the exclusion of implied warranties, so the above exclusions may not apply to you.

Unlawful use of this website We reserve the right to investigate complaints or reported violations of this Privacy Policy and to take any action as deemed appropriate including but not limited to reporting any suspected unlawful activity to law enforcement officials, regulators, or other third parties and disclosing any information necessary or appropriate to such persons, or entities relating to users profiles, e-mails, addresses, usage history, posted materials, IP addresses etc.

Governing law and jurisdiction
This website is for informational purposes only and should not be construed as technical advice of any manner and by viewing it you are deemed to agree to jurisdiction of the courts at Mumbai, India in respect of any action arising there from or related thereto.

Reasonableness
By using this website, you agree that the exclusions and limitations of liability set out in this website disclaimer are reasonable. If you do not think they are reasonable, you must not use this website.

Unenforceable provisions
If any provision of this website disclaimer is, or is found to be, unenforceable under applicable law, that will not affect the enforceability of the other provisions of this website disclaimer.

Other parties
You accept that, as a limited liability entity, we have an interest in limiting the personal liability of its officers and employees. You agree that you will not bring any claim personally against our officers or employees in respect of any losses you suffer in connection with the website.

Policy on Corporate Social Responsibility (CSR)

AXIS FINANCE LIMITED: POLICY ON CORPORATE SOCIAL RESPONSIBILITY (CSR)

1. The Company recognizes the importance of good corporate governance and corporate social responsibility in promoting and strengthening the trust of its shareholders and other stakeholders.

2. The CSR Policy shall be guided by the Company’s corporate vision and the aspiration to be the Company of Choice for Customers, Shareholders, Employees and Community.

3. The Company’s CSR Policy has been framed in accordance with Section 135 of the Companies Act 2013 and the rules framed thereunder. The Policy shall apply to all CSR programs undertaken/sponsored by the Company executed through Axis Bank Foundation or through any other Trust and to the contributions made by the Company to Prime Minister's National Relief Fund or any other fund set up by the Government.

CSR Purpose Statement
To make a meaningful and measurable impact in the lives of underprivileged and vulnerable communities of the country by supporting initiatives aimed at creating conditions suitable for sustainable livelihood in these communities. The Company also aims to promote literacy among the disadvantaged and differently-abled people.

CSR Guiding Principles

1. To create meaningful socio-economic impact in the lives of vulnerable and under privileged sections of the society that include differently-abled, street children, destitute women, children of sexually exploited women and people suffering from natural disasters.
2. To create sustainable livelihood, as stated above, through interventions that facilitate access to Government’s programs, schemes and infrastructure, particularly relating to the areas of education, natural resource management, agriculture, horticulture and livestock development, micro-enterprise, vocational training and skill development.
3. To ensure project management through application of results-based management approach, focusing on appropriately defined systems and processes that measure the impact of the various projects and activities.
4. To develop as a learning organization through focus on documentation, qualitative research and dissemination to internal and external stakeholders.

CSR Program Areas

1. Axis Finance will support programs and activities in the following areas.

1.1. Education
a. Special education for the disabled:
Support basic, secondary and vocational education for children and youth with disability. Increase outreach to the disabled and provide them with access to education (at the primary, secondary and higher secondary levels) and vocational training.
b. Access to quality education for street children and children of sexually-exploited women:
Provide education to street children and children of sexually exploited women and facilitate access to age-appropriate formal education and vocational opportunities

1.2. Vocational education and training a. Support vocational education, life skill coaching and career counselling:
Provide orientation and handholding support to children of secondary and higher secondary level on available career options, and employable vocational and technical skills.
b. Skill development through vocational education and training:
Provide skilling, re-skilling and multi-skilling support to youth for gainful employment.

2. Livelihood enhancement and rural development

a. Natural resource management, soil and water conservation:
Management of natural resources leading to more productive outcome for agriculture and associated livelihood. Support rural and village communities through non-farm based livelihood development.
b. Access to finance/financial inclusion and entrepreneurship development:
Support creation of sustainable income sources through micro-finance and microenterprise development and strengthen mechanisms for alternative livelihood.

3. Medical relief and trauma care: The Company has been working on providing medical relief and trauma care for victims of accidents through its Foundation. It also seeks to create a trained community of service providers who can provide immediate assistance to victims of accidents. The Company shall continue working on such programs as part of its overall contributions towards promoting healthcare.

4. Capacity building of personnel and NGO partners:
The Company will build the capabilities of its own personnel as well as that of executing and implementing agencies through training, conferences and experience sharing programmes.

5. Humanitarian relief:
The Company will support relief efforts during natural calamities in India.

6. Armed Forces Veterans:The Company will institute a program for the benefit of armed forces veterans, war widows and their dependents, widows of armed forces injured in action.

CSR Budget

1. The CSR Committee will abide by the provisions relating to annual expenditure on CSR activities as laid down in Section 135 of the Companies Act 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended from time to time.
2. The surplus arising out of the CSR projects or programs or activities shall not form part of the business profit of the Company.

Validity of CSR policy
The Committee may recommend amendments to the CSR Policy, for the approval of the Board, from time to time.

Execution of CSR
1. The Company shall implement its programs through its Foundation as well as through other agencies and entities as it deems suitable for executing its strategy for CSR.

CSR Governance Structure

Roles and responsibilities: Axis Finance Board of Directors
The Board of Directors of the Company will be responsible for:
1. Approval of the CSR Policy of the Company.
2. Disclosure of the Policy in its report and placing the same on the Company’s website as prescribed under Section 135 of the Companies Act 2013.
3. Ensure that it specifies the reasons in its report for not spending the earmarked amount in case the Company is not able to spend such amount during the financial year.
4. It will have the power to make any change(s) in the constitution of the CSR Committee.

Monitoring and Reporting Framework
The Company will institute a well-defined monitoring and evaluation mechanism to ensure that each CSR project has:
1. Clear objectives developed out of societal needs that are determined through baselines studies and research.
2. Precise targets, time lines and measureable parameters wherever possible.
3. A progress monitoring and reporting framework aligned to the requirements of Section 135 of the Companies Act.

Budget Monitoring
The Company will establish an accounting system to ensure project-wise accounting of CSR spends.

Reporting Framework
1. The progress of CSR projects and expenditure will be reviewed by the CSR Committee.
2. The Company will report on CSR performance in its annual report as per the structure and format prescribed in the notified CSR Rules.
This Policy has been reviewed and approved by the Board of Directors at its meeting held on June 26, 2019 and shall be deemed to come into effect from the said date

Interest Rate Policy

Interest Rate Rationale [2017-18]

Policy for Determining Interest Rates, Processing & Other Charges
Interest Rate
Rate of interest is determined by Axis Finance on the basis of various factors including but not limited to cost of funds, matching tenure cost, return on asset required, external credit rating, internal returns threshold, regulatory policies / environment, inherent credit and default risk in the product and the clients, nature and value of primary and collateral securities, haircut / margin, carrying cost, operating cost or any other relevant factor such as prevalent market lending rates in the industry, etc.

Fund Transfer Pricing (FTP) Methodology
Interest rates for assets shall be determined as under:
Minimum Rate of Interest = Matching tenor cost for the respective type of product (as narrated hereunder) plus Proportionate Operating Cost as a percentage of Assets (as calculated hereunder) plus AFL’s margin of 1.50%.

Matching Tenor Cost shall be determined as under:

Asset Type	Matching Tenor Cost (to be advised by CFO from time-to-time)
Event Based Assets (like IPO / FPO funding, Open Offer funding, etc.)	CP cost for the 7-45 days bucket.
Margin Trade Funding (MTF)	CP cost for the 2-3 month bucket.
Loan Against Shares (LAS) – Retail Loan Against Property (LAP) – Retail	CP cost for the 6 month bucket.[*]
Loan Against Shares (LAS) - Corporate	CP cost for the 1 year bucket.[*].
Corporate Real Estate / Structured Funding	Borrowing cost through issue of NCDs for the respective tenor. However, if the proposed loan tenor is upto 1 year, the matching CP tenor cost for the tenor shall be considered.

[*] or other matching maturity if need be.

Operating Cost as a percentage of Assets = Total Operating Cost for the previous financial year / Total Assets as on the last day of the previous financial year x 100. For loans with tenor of 12 months & above, the percentage operating cost determined as above shall be considered. For loans with tenor of < 12 months, proportionate percentage operating cost shall be considered. The sanctioning authority shall be empowered to approve a higher rate of interest for the loan / facility, subject to an overall cap of 20% p.a. Further, the sanctioning authority shall be empowered to approve a lower rate of interest for the loan / facility after adequately justifying the same in the approval note. The interest rate and yield for each of the loan product would be decided by the Asset Liability Management Committee (ALCO) from time to time considering the above mentioned factors.

The business will charge different rates of interest for different customers under similar products or different rates for the same customers under different products, depending on gradation or risk of the customer and of the products. Axis Finance adopts discrete interest rate model / policy whereby the rate of interest for each disbursement would be evaluated independently giving due consideration to any or a combination of a few or all factors listed above. Interest rates shall be intimated to the customers at the time of sanction/ availing of the loan and the repayment schedules shall be made available to the customer. Interest rate changes would be prospective in effect and intimation of change of interest, if any, or other charges would be communicated promptly to the customer.

Processing & Other Charges
Besides interest, other financial charges like processing fees, cheque return charges, pre-payment / foreclosure charges, part disbursement charges, cheque swaps, cash handling charges, RTGS / other remittance charges, commitment fees, charges on various other services like issuing No Dues Certificate, NOC, letters ceding charges on assets / security, security swap & exchange charges etc. would be levied by the Company wherever considered necessary. Besides the base charges, the service tax / GST and other cess would be collected at applicable rates from time to time. These charges would be decided by respective department heads in consultation with Operations & Financial Accounting teams. This policy should always be read in conjunction with RBI guidelines, directives, circulars and instructions. The Company will apply best industry practices so long as such practices do not conflict with or violate RBI guidelines.

Dividend Distribution Policy

1. PURPOSE, OBJECTIVES AND SCOPE
The Company recognizes the need to lay down a broad framework for considering decisions by the Board of the Company, with regard to distribution of dividend to its shareholders and/ or retaining or plough back of its profits.
The objective of the Policy is to appropriately reward shareholders through dividends while retaining the capital required for supporting future growth. This Policy is applicable to dividend declared/recommended on the equity shares of the Company. The Company is deeply committed to driving superior value creation for all its stakeholders. The focus will continue to be on sustainable returns, through an appropriate capital strategy for both medium term and long term value creation. Accordingly, the Board would continue to adopt a progressive and dynamic dividend policy, ensuring the immediate as well as long term needs of the busines

2. REGULATORY COMPLIANCE
The Company can declare dividend only after ensuring compliance with the Companies Act, 2013, the Rules made thereunder and regulatory guidelines issued by RBI from time to time

3. DIVIDEND
Under Section 2(35) of the Companies Act, 2013, “Dividend” includes any interim dividend. In common parlance, “dividend” means the profit of a company, which is not retained in the business and is distributed among the shareholders in proportion to the amount paid-up on the shares held by them.

4. PARAMETERS FOR DECLARATION OF DIVIDEND
Dividends will generally be recommended by the Board once a year after the announcement of annual results and before the Annual General Meeting (AGM) of the shareholders, as may be permitted by the Companies Act, 2013. The dividends for any financial year shall normally be paid out of the Company profits for that year. If circumstances require, the Board may also declare dividend out of accumulated profits of any previous financial year(s) in accordance with provisions of the Companies Act 2013 and Statutory Regulations, as applicable. The Board may also declare one or more Interim Dividends during the year. The Dividend pay-out decision may depend upon certain external and internal factors:

EXTERNAL FACTORS
State of Economy: In case of uncertain or recessionary economic and business conditions, Board will endeavour to retain larger part of the profits to build up reserves and absorb future shocks.

INTERNAL FACTORS
Apart from various external factors as mentioned above, the Board will take into account various internal factors while declaring Dividend, which inter alia would include:

• Income/Profits earned during the year
• The Company’s liquidity position and future cash flow needs;
• Past dividend Trends ;
• Prevailing Taxation Policy or any amendments expected thereof, with respect to Dividend distribution;
• Present and future capital requirements of the business;
• Cost and availability of alternative sources of financing;
• Buyback of shares or any such alternate profit distribution measure
• Any other relevant factors that the Board may deem fit to consider before declaring Dividend

5. CIRCUMSTANCES UNDER WHICH THE SHAREHOLDERS MAY NOT EXPECT DIVIDEND
The shareholders of the Company may not expect Dividend under the following circumstances:

I. In the event of a growth opportunity where the company may be required to allocate significant amount of capital ;
II. In the event of higher fund requirements for business operations or otherwise.
III. In the event of inadequacy of cash flow available for distribution
IV. Allocation of cash required for buy-back of securities;
V. Any of the above referred internal or external factors, including any regulatory or contractual restriction, if any, restraining the Company from considering dividend;

6. UTILISATION OF RETAINED EARNINGS
The Company shall endeavour to utlise the retained earnings in the following manner

• For expansion and growth of the business;
• Additional investments in existing business;
• Declaration of Dividend;
• General Corporate purpose and
• Any other specific purpose as may be approved by the Board

7. POLICY AMENDMENT & REVIEW
This Policy will be reviewed annually and placed before the Board of Directors of the Company. The Policy will also be subject to amendments necessitated due to changes in laws, rules, and regulations as and when required. Any changes or revisions to the Policy will be communicated to the Shareholders in a timely manner

Letter of Appointment Independent Directors

Date: _________

To,
Mr / Mrs. _____________
Dear Sir / Madam,

Re: Your Appointment as the Independent Director of Axis Finance Limited

A. Preliminary

Your appointment is subject to the following:

1. During your tenure as an Independent Director, you will have to submit a declaration at the beginning of every Financial Year under Section 149 (7) of the Companies Act, 2013 (“Act”) stating that you meet the criteria of Independence.
2. So long as you are an Independent Director of the Company, the number of companies in which you hold office as a Director or a chairman or committee member will not exceed the limit stipulated under the Act.
3. So long as you are an Independent Director of the Company, you will ensure that you do not get disqualified to act as a Director pursuant to the provisions of Section 164 of the Act.
4. You will ensure compliance with other provisions of the Act as applicable to you as an Independent Director.

B. Term
Your Appointment is for a term of ___ years commencing from _________ upto

C. Committees
You shall be appointed on the various Committees of the Board as and when decided by the Board of Directors of the Company in compliance with the Companies Act, 20- 13 or other provisions as stipulated by law/regulations applicable to the Company.

D. Code of Conduct and Duties and Responsibilities

1. You will abide by the Company’s Code of Ethics and Business Principles Applicable to Non-Executive Directors and business principles to the extent applicable to an Independent Director of the Company.
2. You will abide by the guidelines of professional conduct, role, function and duties as an Independent Directors provided in Schedule IV of the Companies Act, 2013, as set out at Annexure-1 hereto.
3. You will not hold office as a Director or any other office in a competing firm/entity.
4. You are expected to stay updated on how best to discharge your roles, responsibilities, and duties and liabilities, as an Independent Director of the Company under applicable law, including keeping abreast of current changes and trends in economic, political, social, financial, legal and corporate governance practices.
5. You are expected to:

(i) take decisions objectively and solely in the interests of the Company;
(ii) facilitate Company’s adherence to high standards of ethics and corporate behavior;
(iii)guide the Board in monitoring the effectiveness of the Company’s governance practices and to recommend changes, required if any;
(iv)guide the Board in monitoring and managing potential conflicts of interest of Management, Board Members and Stakeholders, including misuse of corporate assets and abuse in related party transactions;
(v) guide the Board in ensuring the integrity of the Company’s accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the law and relevant standards.

E. Performance Evaluation
Your reappointment or extension of term and your remuneration will be recommended by the Nomination and Remuneration Committee of the Board, pursuant to a performance evaluation carried out by the Board.

F. Remuneration

1. Your annual remuneration will be as under:

(a) sitting fees for attending each meeting of the Board and its Committees as may be determined by the Board from time to time, and
(b) commission that may be determined by the Board of Directors payable at the end of each financial year will be based on the performance of the Company and your performance evaluated by the Board of Directors.

2. You will be entitled to reimbursement of expenses incurred by you in connection with attending the Board meetings, Board Committee meetings, general meetings and in relation to the business of the Company towards hotel accommodation, travelling and other out-of-pocket expenses.

3. Pursuant to applicable law, you will not be entitled to any stock options.

H. Training
You will be entitled to the benefit of a training program to familiarize yourself with the business and affairs of the Company, growth plans, the peculiarities of the industry in which the Company operates, its goals and expectations and long term plans and objectives.

I. Miscellaneous

1. You will have access to confidential information, whether or not the information is marked or designated as “confidential” or “proprietary”, relating to the Company and its business including legal, financial, technical, commercial, marketing and business related records, data, documents, reports, etc., client information, intellectual property rights (including trade secrets), (“Confidential Information”) .
You shall use reasonable efforts to keep confidential and to not disclose to any third party, such Confidential Information.
If any Confidential Information is required to be disclosed by you in response to any summons or in connection with any litigation, or in order to comply with any applicable law, order, regulation or ruling, then any such disclosure should be, to the extent possible, with the prior consent of the Board.

Please confirm your acceptance by signing, dating, and returning a copy of this letter to the Company.

Yours faithfully,

_________
Managing Director
DIN:

Axis Finance Limited

Annexure 1

Guidelines of professional conduct, Role, Function and Duties as an Independent Director (As provided in Schedule IV of the Companies Act, 2013)

Guidelines for Professional conduct:

1. To uphold ethical standards of integrity and probity;
2. To act objectively and constructively while exercising your duties;
3. To exercise their responsibilities in a bona fide manner in the interest of the Company;
4. To devote sufficient time and attention towards your professional obligations for informed and balanced decision making;
5. To not allow any extraneous considerations that will vitiate their exercise of objective independent judgment in the paramount interest of the Company as a whole, while concurring in or dissenting from the collective judgment of the Board in its decision making;
6. To not abuse their position to the detriment of the Company or its shareholders or for the purpose of gaining direct or indirect personal advantage or advantage for any associated person;
7. To refrain from any action that would lead to loss of their independence;
8. where circumstances arise which make an independent Director lose his independence, the independent Director must immediately inform the Board accordingly;
9. To assist the Company in implementing the best corporate governance practices.

Role and functions:

1. Assist 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.
2. Bring an objective view in the evaluation of the performance of Board and management.
3. Scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance.
4. Satisfy yourself on the integrity of financial information and that financial controls and systems of risk management are robust and defensible.
5. Safeguard the interests of all stakeholders, particularly the minority shareholders.
6. Balance the conflicting interest of the stakeholders.
7. 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.

Duties:

1. Moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between management and shareholder’s interest.
2. Undertake appropriate induction and regularly update and refresh your skills, knowledge and familiarity with the Company.
3. 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.
4. Strive to attend all meetings of the Board including a Separate meeting of the independent director and of the Board committees of which you are a member. 5. Participate constructively and actively in the committees of the Board in which you are chairperson or member.
6. Strive to attend the general meetings of the Company.
7. Where you 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 your concerns are recorded in the minutes of the Board meeting.
8. Keep yourself well informed about the Company and the external environment in which it operates.
9. Not to unfairly obstruct the functioning of an otherwise proper Board or committee of the Board.
10. Pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure yourself that the same are in the interest of the Company.
11.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.
12.Report concerns about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy.
13.Acting within your authority, assist in protecting the legitimate interests of the Company, shareholders and its employees.
14. Not disclose confidential information, including commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law.

Nomination and Remuneration Policy

This Nomination and Remuneration Policy is being formulated in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto as amended from time to time. This policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Nomination and Remuneration Committee (NRC or the Committee) and has been approved by the Board of Directors.

Definitions:

“Remuneration” means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961;

“Key Managerial Personnel” means:

i) Managing Director, or Chief Executive Officer or Manager and in their absence, a Wholetime Director;
ii) Chief Financial Officer;
iii) Company Secretary; and
iv) such other officer as may be prescribed.

“Senior Managerial Personnel” mean the personnel of the company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management, of rank equivalent to Senior Vice President and above, including all functional heads.

Objective:

The objective of the policy is to ensure that
• The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;
• Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
• Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

APPLICABILITY:

The Policy shall be applicable to:
(a) Directors (Executive and Non Executive)
(b) Key Managerial Personnel
(c) Senior Management, which means:-
(i) Personnel of the Company who are members of its core management team excluding Board of Directors. This would also include all members of management one level below the executive directors including all functional heads.

CONSTITUTION OF COMMITTEE:

(i) The Committee shall consist of minimum 3 Non-Executive Directors and majority of them being Independent Director.
(ii) Chairman of the Committee shall be an Independent Director
(iii) Minimum two members shall constitute a quorum for the meeting.

ROLE OF THE COMMITTEE:

The role of the NRC will be the following:

7.1 Nomination / Governance Matters:

The Committee assists, advises and recommend the Board on:
1. To formulate Fit & Proper criteria for determining qualifications, positive attributes and independence of a Director in line with the prescribed guidelines of the RBI or other regulatory bodies.
2. To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal.
3. The Committee is primarily responsible along with the Board to lay down the format and the procedure in which the Board, its Committees and all the individual Directors of the Company will be evaluated annually. The process will be as according to the Act and with the Listing Regulations.
4. To formulate the criteria for determining qualifications, positive attributes and independence of a director.

7.2 Remuneration / HR Matters:

1. To recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
2. To recommend to the Board, salary (including annual increments) to be paid to the Company’s Managing Director & CEO, the Whole-Time Directors and Senior Management.
3. To recommend perquisites commission and retirement benefits to be paid to the Company’s Managing Director & CEO and Whole-Time Directors.
4. To review the code of conduct and HR Policies.
7.3 To carry out such other functions as may be specifically referred to the Committee by the Board of Directors of the Company.

FREQUENCY OF MEETINGS

The meeting of the Committee shall be held at such regular intervals as may be required.
APPOINTMENT OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

i) The Nomination and Remuneration Committee shall identify persons who are qualified to become Directors and who may be appointed as Key Managerial Personnel and Senior Management.
ii) The Committee shall ascertain the qualifications, expertise and experience of the persons to be appointed as Directors, Key Managerial Personnel and Senior Management and recommend their appointment to the Board of Directors.
iii) The decision of the Board of Directors based on the recommendation of the Committee shall be final
iv) The appointment including tenure of Directors and Key Managerial Personnel shall be subject to the policy of the company, provisions of Companies Act, 2013, and other relevant laws.
v) The Committee shall evaluate their performance on a yearly basis and recommend their removal to the Board, if required.

REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL, SENIOR MANAGEMENT AND OTHER EMPLOYEES

i) The remuneration payable to the Whole Time Directors shall be as per the provisions of the Companies Act, 2013 and other relevant provisions.
ii) The remuneration payable to Key Managerial Personnel and Senior Management shall be approved by the Committee on case to case basis.
iii)The increments to the existing remuneration structure

a) In relation to Board of Directors shall be based on the evaluation of performance
b) In relation to Key Managerial Personnel and Senior Management shall be approved by the Committee based on the recommendation of the Managing Director
c) In relation to others shall be approved by the Managing Director based on the market conditions, performance of the company and other relevant factors from time to time.

FIT AND PROPER CRITERIA FOR DIRECTORS

Fit and Proper Criteria for Directors as prescribed by The Reserve Bank of India is annexed herewith as per Annexure A.

REMUNERATION TO NON-EXECUTIVE AND INDEPENDENT DIRECTORS

The Non-Executive Directors and Independent Directors of the Company shall be entitled to sittings fees (as determined by the Board from time to time) and within the overall limits prescribed under Rule 4 of the Companies (Appointment & Remuneration) Rules, 2014, as amended, from time to time. for attending Board/ Committee meetings apart from reimbursement of expenses incurred for attending the meetings.

This Policy has been reviewed and approved by the Board of Directors at its meeting held on June 26, 2019 and shall be deemed to come into effect from the said date.

ANNEXURE A: FIT AND PROPER CRITERIA FOR DIRECTORS

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. In this regard Reserve Bank of India (RBI) has proposed to follow the guidelines as per the guidelines mentioned in Circular No. RBI/2014-15/299 DNBR (PD) CC.No.002/03.10.001/2014-15 dated November 10, 2014. While the Reserve Bank does carry out due diligence on directors before issuing Certificate of Registration to an NBFC, it is stipulated that that NBFCs should put in place an internal supervisory process on a continuing basis. Further, in order to streamline and bring in uniformity in the process of due diligence, while appointing directors, NBFCs are advised to ensure that the procedures mentioned below are followed and minimum criteria fulfilled by the persons before they are appointed on the Boards:

(a) Axis Finance Limited (“The Company/AFL”) should undertake a process of due diligence to determine the suitability of the 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. NBFCs should 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 should be undertaken by the Company at the time of appointment / renewal of appointment.
(c) The Nomination Committee of the Board shall scrutinize the declarations made by the incumbent Directors.
(d) Based on the information provided in the signed declaration, Nomination Committees s h al l decide on the acceptance or otherwise of the Directors, where considered necessary.
(e) The Company should obtain annually as on 31 st 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 nominated/ elected directors shall execute the deeds of covenants in the format given in Annex-2.
(g) Independent /non-executive Directors nominated to the Board of the Company should be between 35 to 70 years of age

ANNEX – 1

Name of the Company: _____

Declaration and Undertaking by Director (with enclosures as appropriate as on __________ )

I. Personal details of director

a. Full name
b. Date of Birth
c. Educational Qualifications
d. Relevant Background and Experience
e. Permanent Address
f. Present Address
g. E-mail Address / Telephone Number
h. Permanent Account Number under the Income Tax Act and name and address of Income Tax Circle
i. Relevant knowledge and experience
j. Any other information relevant to Directorship of the NBFC

II Relevant Relationships of director

a. List of Relatives if any who are connected with the NBFC (Refer Section 6 and Schedule 1A of the Companies Act, 1956 and corresponding provisions of New Companies Act, 2013)
b. List of entities if any in which he/she is considered as being interested (Refer Section 299(3)(a) and Section 300 of the Companies Act, 1956 and corresponding provisions of New Companies Act, 2013)
c. List of entities in which he/she is considered as holding substantial interest within the meaning of NBFC Prudential Norms Directions, 2007
d. Name of NBFC in which he/she is or has been a member of the board (giving details of period during which such office was held)
e. Fund and non-fund facilities, if any, presently availed of by him/her and/or by entities listed in II (b) and (c) above from the NBFC
f. Cases, if any, where the director or entities listed in II (b) and (c) above are in default or have been in default in the past in respect of credit facilities obtained from the NBFC or any other NBFC / bank.

III Records of professional achievements

a. Relevant professional achievements

IV. Proceedings, if any, against the director

a. If the director is a member of a professional association/body, details of disciplinary action, if any, pending or commenced or resulting in conviction in the past against him/her or whether he/she has been banned from entry into any profession/ occupation at any time.
b. Details of prosecution, if any, pending or commenced or resulting in conviction in the past against the director and/or against any of the entities listed in II (b) and (c) above for violation of economic laws and regulations
c. Details of criminal prosecution, if any, pending or commenced or resulting in conviction in the last five years against the director
d. Whether the director attracts any of the disqualifications envisaged under Section 274 of the Companies Act 1956 and corresponding provisions of New Companies Act, 2013?
e. Has the director or any of the entities at II (b) and (c) above been subject to any investigation a t the instance of Government department or agency?
f. Has the director at any time been found guilty of violation of rules/regulations/ legislative requirements by customs/ excise /income tax/foreign exchange /other revenue authorities, if so give particulars
g. Whether the director has at any time come to the adverse notice of a regulator such as SEBI, IRDA, MCA.
(Though it shall not be necessary for a candidate to mention in the column about orders and findings made by the regulators which have been later on reversed/set aside in toto, it would be necessary to make a mention of the same, in case the reversal/setting aside is on technical reasons like limitation or lack of jurisdiction, etc and not on merit, If the order of the regulator is temporarily stayed and the appellate/ court proceedings are pending, the same also should be mentioned.)

V. Any other explanation / information in regard to items I to III and other information considered relevant for judging fit and proper

Undertaking
I confirm that the above information is to the best of my knowledge and belief true and complete. I undertake to keep the NBFC fully informed, as soon as possible, of all events which take place subsequent to my appointment which are relevant to the information provided above.

I also undertake to execute the deed of covenant required to be executed by all directors of the NBFC.

Place :

Signature

Date :

VI. Remarks of Chairman of Nomination Committee/Board of Directors of NBFC

Place :

Signature

Date :

ANNEX – 2

Form of D eed of Covenants w i th a Director

THIS DEED OF COVENANTS is made this ________________ day of _________ Two thousand ________________
BETWEEN _______________________________________________
having its registered office at ___________________________________________________________________ (hereinafter called the ‘NBFC’) of the one part and Mr. / Ms. ____________________________ of ___________________________________ (hereinafter called the “Director”) of the other part.

WHEREAS

A. The director has been appointed as a director on the Board of Directors of the NBFC (hereinafter called "the Board") and is required as a term of his / her appointment to enter into a Deed of Covenants with the NBFC.
B. The director has agreed to enter into this Deed of Covenants, which has been approved by the Board, pursuant to his said terms of appointment.

NOW IT IS HEREBY AGREED AND THIS DEED OF COVENANTS WITNESSETH AS FOLLOWS :

1. The director acknowledges that his / her appointment as director on the Board of the NBFC is subject to applicable laws and regulations including the Memorandum and Articles of Association of the NBFC and the provisions of this Deed of Covenants.

2. The director covenants with the NBFC that :

(i) The director shall disclose to the Board the nature of his / her interest, direct or indirect, if he / she has any interest in or is concerned with a contract or arrangement or any proposed contract or arrangement entered into or to be entered into between the NBFC and any other person, immediately upon becoming aware of the same or at meeting of the Board at which the question of entering into such contract or arrangement is taken into consideration or if the director was not at the date of that meeting concerned or interested in such proposed contract or arrangement, then at the first meeting of the Board held after he / she becomes so concerned or interested and in case of any other contract or arrangement, the required disclosure shall be made at the first meeting of the Board held after the director becomes concerned or interested in the contract or arrangement.

(ii) The director shall disclose by general notice to the Board his / her other directorships, his / her memberships of bodies corporate, his / her interest in other entities and his / her interest as a partner or proprietor of firms and shall keep the Board apprised of all changes therein
(iii) The director shall provide to the NBFC a list of his / her relatives as defined in the Companies Act, 1956 or 2013 and to the extent the director is aware of directorships and interests of such relatives in other bodies corporate, firms and other entities.
(iv) The director shall in carrying on his / her duties as director of the NBFC:

(a) use such degree of skill as may be reasonable to expect from a person with his / her knowledge or experience;
(b) in the performance of his / her duties take such care as he / she might be reasonably expected to take on his / her own behalf and exercise any power vested in him / her in good faith and in the interests of the NBFC;
(c) shall keep himself / herself informed about the business, activities and financial status of the NBFC to the extent disclosed to him / her;
(d) attend meetings of the Board and Committees thereof (collectively for the sake of brevity hereinafter referred to as "Board") with fair regularity and conscientiously fulfil his / her obligations as director of the NBFC;
(e) shall not seek to influence any decision of the Board for any consideration other than in the interests of the NBFC;
(f) shall bring independent judgment to bear on all matters affecting the NBFC brought before the Board including but not limited to statutory compliances, performance reviews, compliances with internal control systems and procedures, key executive appointments and standards of conduct;
(g) shall in exercise of his / her judgement in matters brought before the Board or entrusted to him / her by the Board be free from any business or other relationship which could materially interfere with the exercise of his / her independent judgement; and
(h) shall express his / her views and opinions at Board meetings without any fear or favour and without any influence on exercise of his / her independent judgement;

(v) The director shall have

(a) fiduciary duty to act in good faith and in the interests of the NBFC and not for any collateral purpose;
(b) duty to act only within the powers as laid down by the NBFC’s Memorandum and Articles of Association and by applicable laws and regulations; and
(c) duty to acquire proper understanding of the business of the NBFC.

(vi) The director shall :

(a) not evade responsibility in regard to matters entrusted to him / her by the Board;
(b) not interfere in the performance of their duties by the whole-time directors and other officers of the NBFC and wherever the director has reasons to believe otherwise, he / she shall forthwith disclose his / her concerns to the Board; and
(c) not make improper use of information disclosed to him / her as a member of the Board for his / her or someone else’s advantage or benefit and shall use the information disclosed to him / her by the NBFC in his / her capacity as director of the NBFC only for the purposes of performance of his / her duties as a director and not for any other purpose.

3. The NBFC covenants with the director that:

(i) the NBFC shall apprise the director about:

(a) Board procedures including identification of legal and other duties of Director and required compliances with statutory obligations;
(b) control systems and procedures;
(c) voting rights at Board meetings including matters in which Director should not participate because of his / her interest, direct or indirect therein;
(d) qualification requirements and provide copies of Memorandum and Articles of Association;
(e) corporate policies and procedures;
(f) insider dealing restrictions;
(g) constitution of, delegation of authority to and terms of reference of various committees constituted by the Board;
(h) appointments of Senior Executives and their authority;
(i) remuneration policy,
(j) deliberations of committees of the Board, and
(k) communicate any changes in policies, procedures, control systems, applicable regulations including Memorandum and Articles of Association of the NBFC, delegation of authority, Senior Executives, etc. and appoint the compliance officer who shall be responsible for all statutory and legal compliance.

(ii) the NBFC shall disclose and provide to the Board including the director all information which is reasonably required for them to carry out their functions and duties as a director of the NBFC and to take informed decisions in respect of matters brought before the Board for its consideration or entrusted to the director by the Board or any committee thereof;

(iii) the disclosures to be made by the NBFC to the directors shall include but not be limited to the following :

(a) all relevant information for taking informed decisions in respect of matters brought before the Board;
(b) NBFC’s strategic and business plans and forecasts;
(c) organisational structure of the NBFC and delegation of authority;
(d) corporate and management controls and systems including procedures;
(e) economic features and marketing environment;
(f) information and updates as appropriate on NBFC’s products;
(g) information and updates on major expenditure;
(h) periodic reviews of performance of the NBFC; and
(i) report periodically about implementation of strategic initiatives and plans;

(iv) the NBFC shall communicate outcome of Board deliberations to directors and concerned personnel and prepare and circulate minutes of the meeting of Board to directors in a timely manner and to the extent possible within two business days of the date of conclusion of the Board meeting; and
(v) advise the director about the levels of authority delegated in matters placed before the Board.

4. The NBFC shall provide to the director periodic reports on the functioning of internal control system including effectiveness thereof

5. The NBFC shall appoint a compliance officer who shall be a Senior executive reporting to the Board and be responsible for setting forth policies and procedures and shall monitor adherence to the applicable laws and regulations and policies and procedures including but not limited to directions of Reserve Bank of India and other concerned statutory and governmental authorities.

6. The director shall not assign, transfer, sublet or encumber his / her office and his / her rights and obligations as director of the NBFC to any third party provided that nothing herein contained shall be construed to prohibit delegation of any authority, power, function or delegation by the Board or any committee thereof subject to applicable laws and regulations including Memorandum and Articles of Association of the NBFC.

7. The failure on the part of either party hereto to perform, discharge, observe or comply with any obligation or duty shall not be deemed to be a waiver thereof nor shall it operate as a bar to the performance, observance, discharge or compliance thereof at any time or times thereafter.

8. Any and all amendments and / or supplements and / or alterations to this Deed of Covenants shall be valid and effectual only if in writing and signed by the director and the duly authorised representative of the NBFC

9. This Deed of Covenants has been executed in duplicate and both the copies shall be deemed to be originals.

IN WITNESS WHEREOF THE PARTIES HAVE DULY EXECUTED THIS AGREEMENT ON THE DAY, MONTH AND YEAR FIRST ABOVE WRITTEN.

For Axis Finance Limited Director

By …………………………….……………..

Name: Name:

Title:

In the presence of:

1.______________________ 2. _______________

POLICY ON RELATED PARTY TRANSACTIONS

A) OVERVIEW

1 OBJECTIVE: This policy is framed to ensure that the dealings in Related Party Transactions meet to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties and in the best interest of the Company and its stakeholders.Further, as per Non - Banking Financial Companies - Corporate Governance (Reserve Bank) Directions 2015, issued by the Reserve Bank of India:

Details of all material transactions with related parties needs to be disclosed in the annual report and
The Company shall disclose the policy on dealing Related Party Transactions on its website and also in the annual report

The Audit Committee will periodically review this Policy and may recommend amendments to the Board from time to time as it deems appropriate.

2 DEFINITIONS:

“Audit Committee or Committee” means Committee of Board of Directors of the Company constituted under provisions of Companies Act, 2013.

“Board” means Board of Directors of the Company.

“Key Managerial Personnel” includes –

i. the Chief Executive Officer or the Managing Director or the Manager;
ii. the Company Secretary;
iii. the Whole-Time Director;
iv. the Chief Financial Officer;
v. such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and
vi. such other officer as may be prescribed under the Companies Act, 2013.

“Policy” means Related Party Transaction Policy.

“Related Party” means related party as defined under Section 2(76) of the Companies Act, 2013 and related party under the applicable accounting standards.

“Related Party Transaction (RPT)” refers to any transaction involving any Related Party which is a transfer of resources, services or obligations between the Company and a related party, regardless of whether a price is charged.

“Relative” means relative as defined under the Companies Act, 2013 and includes any one who is related to another, if –

i. They are members of a Hindu undivided family;
ii. They are husband and wife; or domestic partner ;
iii. Father (including step-father)
iv. Mother (including step-mother)
v. Son (including step-son) of spouse or domestic partner
vi. Son’s wife
vii. Daughter (including step-daughter) of spouse or domestic partner
viii. Daughter’s husband
ix. Brother (including step-brother)
x. Sister (including step-sister)
xi. Dependents of that person or that person’s spouse or domestic partner;

Any other term not defined herein shall have the same meaning as defined in the Act and other applicable law.

B) POLICY

All Related Party Transactions as required under the laws applicable to the Company must be referred to the Audit Committee for approval in accordance with this Policy.

1. IDENTIFICATION OF RELATED PARTIES & POTENTIAL RELATED PARTY TRANSACTIONS

The Company Secretary shall at all times maintain a database of Company’s Related Parties containing the names of individuals and entities, identified on the basis of the definition of Related Party and declaration provided by the Directors, along with their personal/entity details including any revisions therein based on declaration / information received from directors, shareholders, other sources etc, and the same shall be duly shared with functional team at regular intervals..

The list of Related Party shall be updated whenever necessary and reviewed on a timely basis and would be communicated to the functional departments. Each Director and Key Managerial Personnel is responsible for providing declaration to the Company Secretary of Related Party involving him or her or his or her Relative, including any additional information that the Company Secretary may reasonably request. The functional departments shall submit to the head of Finance & Accounts and the Company Secretary, the details of proposed transaction (except those for which omnibus approval has been granted by the Audit Committee as explained subsequently) with draft agreement or other supporting documents justifying that the transactions are on arm’s length basis at prevailing market rate. Based on such information, the Company Secretary will facilitate for the necessary approval from the Audit Committee.

2.Broad Parameters to assess:

Ordinary Course of Business

The phrase “Ordinary Course of Business” is not defined under the Act or Rules made there under. The Company shall adopt a reasonable approach / methodology to demonstrate ‘Ordinary Course of Business’ which shall, inter alia, include the nature of the transaction, the frequency / regularity / length of time the company is engaged such transaction, such transaction / action is consistent with the past practices and was taken in the ordinary course of the normal dayto-day operations of such company, common commercial practice, i.e. customarily taken, in the ordinary course of the normal day-to-day operations of other companies that are in the same / similar line of business.

Arm’s Length

For transactions between two related parties to be considered to be at arm’s length pricing, the transaction should be conducted between the two parties as if the parties were unrelated, so that there is no conflict of interest. i.e. arm’s length pricing is the condition or the fact that the two related parties transact as independent (un-related) parties and on an equal footing from one or more of the following aspects viz. nature of goods / services, risk assumed, assets / resources employed, key terms / covenants. In the absence of any guidelines on Arm’s Length Pricing in the Act, the Company shall adopt reasonable approach / methodology to demonstrate Arm’s Length Pricing for the specified RPT identified, which shall, inter alia, shall include, the nature of the transaction, description of functions to be performed, risks to be assumed and assets to be employed, key terms / special terms in the arrangement forming part of a composite transaction.

3. APPROVAL OF RELATED PARTY TRANSACTION

The approval policy framework is given below:

Approval of Audit Committee

All RPT or any subsequent modifications to RPT of the Company with Related Parties shall require approval of the Audit Committee. The Audit Committee may grant omnibus approval for the related party transaction which are repetitive in nature and are in the ordinary course of business and are at arm’s length, subject to compliance of the conditions set forth under the Act read with the rules made thereunder and other applicable law. The Audit Committee shall satisfy itself of the need for the omnibus approval and that same is in the interest of the Company.
Any member of the Audit Committee who has a potential interest in any RPT will abstain from discussion and voting on the approval of the RPT.
The Audit Committee shall review on half yearly basis, the details of RPTs entered into by the Company pursuant to each of the omnibus approval granted as stated above.

Prior approval of Board of Directors

All transactions with related parties which are either not in the ordinary course of business or are not at Arm’s Length shall require prior approval of the Board of Directors, in terms of Section 188 of the Act.
In the above context, where any Director is interested in any contract or arrangement with a Related Party, such Director shall not be present during the discussions and vote on the subject matter of the resolution relating to such contract or arrangement.

Prior approval of Shareholders

Transaction with related parties which are either not in the ordinary course of business or not on ‘arm’s length basis and exceeds the threshold under section 188 of the Act shall require prior approval of the shareholders through an ordinary resolution.

4. GENERAL CRITERIA FOR APPROVAL OF RELATED PARTY TRANSACTIONS:

To review a Related Party Transaction, the Audit Committee is provided with all relevant material information of the Related Party Transaction, including the terms of the transaction, the business purpose of the transaction, the benefits to the Company and to the Related Party, and any other relevant matters.

The information provided specifically covers the following:

i. the name of the related party and nature of relationship;
ii. the nature, duration of the contract and particulars of the contract or arrangement;
iii. the material terms of the contract or arrangement including the value, if any;
iv. any advance paid or received for the contract or arrangement, if any;
v. the manner of determining the pricing and other commercial terms, both included as part of contract and not considered as part of the contract;
vi. whether all factors relevant to the contract have been considered, if not, the details of factors not considered with the rationale for not considering those factors;
vii. the persons/authority approving the transaction; and
viii. any other information relevant or important for the Committee to take a decision on the proposed transaction.

5. DECISION REGARDING TRANSACTION IN ORDINARY COURSE OF BUSINESS AND AT ARM’S LENGTH

The Audit Committee or the Board shall, in respect of the related party transactions referred to them for approval, shall after considering the materials placed before them; judge if the transaction is in the ordinary course of business or at arm’s length basis.

6. OMNIBUS APPROVAL BY AUDIT COMMITTEE FOR RELATED PARTY TRANSACTIONS PROPOSED TO BE ENTERED:

The Audit Committee shall grant omnibus approval for normal transactions in ordinary course of business with related parties, same being recurring in nature on annual basis

7. RELATED PARTY TRANSACTIONS NOT APPROVED UNDER THIS POLICY

In the event the Company becomes aware of a Related Party Transaction with a Related Party that has not been approved under this Policy prior to its consummation, the Company would obtain prior approval from the Audit Committee. In case the Company is not able to take prior approval from the Audit Committee, such a transaction shall not be deemed to violate this Policy, or be invalid or unenforceable, so long as the transaction is brought to the Audit Committee as promptly as reasonably practical after it is entered into or after it becomes reasonably apparent that the transaction is covered by this policy. The Audit Committee shall consider all of the relevant facts and circumstances regarding the Related Party Transaction, and shall evaluate all options available to the Company, including ratification, revision or termination of the Related Party Transaction. In any case, where the Audit Committee determines not to ratify a Related Party Transaction that has been commenced without approval, the Audit Committee, as appropriate, may direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction. In connection with any review of a Related Party Transaction, the Committee has authority to modify or waive any procedural requirements of this Policy.

8. TRANSACTIONS WITH THE HOLDING COMPANY:

i. Approval of the Audit Committee will not be required to be taken to a transaction, other than a transaction referred to in section 188, between the Company and the Axis Bank.
ii. Special resolution passed by the Axis Bank w.r.t. Related Party Transactions shall be sufficient for the purpose of the entering into the transaction between the Company and the Axis Bank.

C) AMENDMENT IN APPLICABLE LAW:

Any subsequent amendment in the Act or any other applicable law in this regard, shall automatically apply to this Policy. Accordingly, this policy shall be duly revised to incorporate any amendments.

D) IMPLEMENTATION:

This Policy shall be communicated to all Directors, Key Managerial Personnel and concerned persons of the Company and the same shall be effective immediately on approval by the Board of Directors.

E) DISCLOSURE

This Policy will be communicated to all operational employees and other concerned persons of the Company and shall be placed on the website of the Company at www.axisfinance.co.in

F) POLICY REVIEW

This Policy may be amended, modified or supplemented from time to time to ensure compliance with any modification, amendment or supplementation to the Listing Regulations or as may be otherwise prescribed by the Audit Committee/ Board from time to time.

Fair Disclosure Code

Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information
(UPSI) of Axis Finance Limited (Fair Disclosure Code – April 2019)

[Pursuant to Reg. 8 (1) read with Schedule A of the SEBI (Prohibition of Insider Trading) Regulations, 2015 (the Regulations)]

In consonance with Reg. 8 (1) and the principles of fair disclosures as specified in Schedule A of the SEBI (Prohibition of Insider Trading Regulations), 2015 (the Regulations), Axis Finance Limited (the Company) is required to abide with the following practices and procedures relating to fair disclosures in respect of the unpublished price sensitive information (UPSI) relating to the Company.

The Fair Disclosure Code intends to formulate a stated framework and policy for fair disclosure of events and occurrences that could materially impact price discovery in the market for the securities of the Company.

For the purpose of this Fair Disclosure Code, UPSI shall mean any information, relating to the Company, directly or indirectly, that is not generally available, which upon becoming generally available, is likely to materially affect the price of the securities of the Company and shall, ordinarily include but not be restricted to, information of the Company relating to the following: –

(i) financial results;
(ii) dividends;
(iii) change in its capital structure;
(iv)mergers, de-mergers, acquisitions, delisting, disposals and expansion of business and such other transactions; and
(v) changes in its key managerial personnel.

The practices and procedures to ensure fair disclosure of material events and/ or UPSI relating to the Company, to the public, are as under:

1. Disclosure shall be made by the Company of any event / information, which is considered to be material in nature. The materiality of such event / information shall be ascertained by the MD & CEO of the Company in consultation with the Company Secretary.

2. Any event/ information that could have a material impact on the price of securities of the Company shall be promptly disclosed to the Stock Exchanges where its shares/ securities of the Company are listed, no sooner than credible and concrete information in respect of such event/ information comes into being, in order to ensure details of such events / information, is generally available. Such disclosure would be made by Officers of the Company, duly authorized for the said purpose, subject to receipt of requisite internal approvals.

3. Uniform and universal dissemination of UPSI would be ensured by the Company by adopting a common platform i.e. Stock Exchanges for public disclosure. Once the UPSI is communicated to the Stock Exchanges as aforesaid, then other medium of dissemination may be used to ensure such information is made accessible to the public on a nondiscriminatory basis.

4. Company Secretary of the Company shall be the ‘Chief Investor Relations Officer’ (CIRO) of the Company for the purpose of this Code and Schedule A of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

5. In the unlikely event of any material UPSI being disclosed selectively, inadvertently or otherwise, at any forum, whether in India or abroad, the Company, shall take effective steps to promptly disseminate such UPSI, to the Stock Exchanges, for public disclosure.

6. In case any clarification sought by the Statutory/ Regulatory Authorities or Stock Exchanges in respect of rumors / news reports relating to the Company, the Company shall endeavor to provide an appropriate response by accepting / denying / clarifying the same.

7. As a policy, the Company would make a public disclosure with respect to any matter only after it has taken a concrete or definitive decision. Accordingly, the Company shall not make any public disclosures in case where any proposal is in progress, or there are impending negotiations or where requisite approvals is awaited from any statutory/ regulatory authority or where such disclosure would not be appropriate or where it could prejudice the Company’s interest.

8. Any information that is classified as UPSI shall be dealt with on a need to know basis and shall be communicated or procured only for furtherance of a legitimate purpose or performance of duties or discharge of legal obligations.

9. The Policy for Determination of “Legitimate Purposes”, in terms of Reg. 3 (2A) of the Regulations, is as under.

a) Legitimate Purposes means legitimate transactions undertaken to achieve a corporate purpose or to performance of a fiduciary duty or in the interest of the Company or transactions undertaken in the public interest or transactions undertaken without an intent to make unlawful profit or gain or without a view to misuse UPSI relating to the Company, or the like, which would not be hit by any prohibition as contained in the Regulations.
Explanation – For the purpose of this Code, the term “legitimate purpose” shall mean and include, sharing of UPSI, in the ordinary course of business of the Company by an insider with partners of professional firms (auditors, accountancy firms, law firms), collaborators, lenders, customers, suppliers, merchant bankers, legal advisors, auditors, insolvency professionals or other advisors or consultants etc. assisting or advising the Company (collectively referred to as ‘Fiduciaries’), provided that such sharing of UPSI is not done to evade or circumvent the prohibitions of the Regulations.
b) Communication / procurement of an UPSI relating to the Company shall be considered to have been carried out for ‘legitimate purpose’, under any one or more of the following circumstances:

i. The communication / procurement of such UPSI has been made in furtherance of legitimate purpose, performance of fiduciary duties or discharge of legal obligations and in the ordinary course of the business of the Company.
ii.The communication / procurement of such UPSI is duly authorized by the Company stating the legitimate purpose for which such UPSI is being communicated and the manner in which such UPSI will be communicated or access granted.
iii. Any person in receipt of such UPSI pursuant to a “legitimate purpose” shall be considered as an “insider” in terms of Reg. 3 (2B) of the Regulations and due notice shall be given to such person(s) with regard to their obligation to maintain confidentiality of such UPSI, in compliance with the Regulations.
iv. The Insider(s), who are in receipt of such UPSI pursuant to a “legitimate purpose” shall also abide by the Code of Conduct formulated and adopted by them under Reg. 9 (2) read with Schedule C to the Regulations.

c) It is further clarified that sharing of any such UPSI, for being considered to have been done for a “legitimate purpose”, must not have been done to evade or circumvent the Regulations or market abuse.

d) The prescribed details of the insider(s), with whom such UPSI relating to the Company has been shared for legitimate purpose(s), shall form part of the ‘Structured Digital Database’ maintained by the Company, under Reg. 3(5) of the Regulations.

Issue of Notice to the recipient of UPSI under of Reg. 3 (2B) of the Regulations.

Any person in receipt of such UPSI pursuant to a “legitimate purpose” shall be considered as an “insider” in terms of Reg. 3 (2B) of the Regulations and due notice shall be given to such person(s) with regard to their obligation to maintain confidentiality of such UPSI, in compliance with the Regulations.

The said notice shall be given to such insider to inform:

a) that the information shared with him / her, is an UPSI relating the Company
b) his / her duties and responsibilities upon receipt of such UPSI and the liability attached to any misuse or unwarranted disclosure / misuse of such UPSI, on his / her part or by person acting on his behalf.
c) to maintain confidentiality of such UPSI, in compliance with the Regulations, failing which, the Company would have the right to initiate appropriate legal action.

Structured Digital Database under Reg. 3(5) of the Regulations

In terms of Reg. 3 (5) of the Regulations, the Company shall maintain a Structured Digital Database (SDD) containing the name of such persons or entities as the case may be, with whom UPSI relating to the Company has been shared by the Company under the Regulations for legitimate purpose and in the ordinary course of the business. Structured Digital Database shall contain the following information:

a) Name of the insider;
b) Name of the Organization or entity to whom the insider represents;
c) Postal Address, mobile no. E-mail ID of such insider;
d) Permanent Account Number (PAN) or any other identifier authorized by law, if PAN is not available;
e) Nature of UPSI shared with the insider;
f) Date, time and mode of sharing the UPSI;
g) Legitimate purpose for which the UPSI was shared;
h) Any other information as may be deemed appropriate

The said database shall be maintained with adequate internal controls and checks such as time stamping and audit trails to ensure non-tampering thereof.

10. This Fair Disclosure Code which has been reviewed and approved by the Board of Directors of the Company at its meeting held on 26th June, 2019.

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