The Board has constituted several committees to deal with specific matters as well as delegated powers to them for carrying out various activities for effective functioning of the company. The Audit Committee and Shareholders'/Investors' Grievance Committee have been constituted in accordance with the guidelines issued by the Reserve Bank of India, Securities and Exchange Board of India read with requirements of the Companies Act, 1956. Besides the above, the Board has also set up additional committees such as ESOP/Compensation Committee, Share Transfer and Routine Transactions Committee (START), Management Committee, Nomination Committee, Committee on Frauds, Customer Committee. Apart from Board Committee bank has also constituted Non-Board Committees such as Credit Committee, Premises Committee, Investment Committee, Asset Liability Committee (ALCO),Risk Management Committee, Information Technology Committee, First Tier Audit Committee, Customer Services Standing Committee, Grievances Redressal Committee, and First Level Committee (for Grievances Redressal)
The Audit Committee of the Bank comprises of three members, with any two forming the quorum. The terms of reference of the Audit Committee of the Bank are as follows:
- Oversight of the Bank’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible
- Recommending to the Board, the appointment, reappointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
- Approval of payment to statutory auditors for any other services rendered by the statutory auditors
- Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:
- Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of Section 217 of the Companies Act, 1956.
- Changes, if any, in accounting policies and practices and reasons for the same.
- Major accounting entries involving estimates based on the exercise of judgment by management.
- Significant adjustments made in the financial statements arising out of audit findings.
- Compliance with listing and other legal requirements relating to the financial statements.
- Disclosure of any related party transactions.
- Qualifications in the draft audit report.
- Reviewing with the management, the quarterly financial statements before submission to the board for approval.
- Reviewing with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.
- Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
- Discussion with internal auditors any significant findings and follow up there on.
- Reviewing the findings of any internal investigations by the internal 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.
- 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.
- To review the functioning of the Whistle Blower mechanism.
- Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Committee consists of Dr. Shankar Acharya (Chairman), Mr. N.P. Sarda, Dr. Sudipto Mundle.
Two out of the Three members of the Committee are Non-Executive Independent Directors. All members of the Committee are financial literate within the meaning of the Clause 49 of the listing agreement. Mr. N.P. Sarda possesses accounting and financial management expertise.
The Company Secretary acts as the Secretary to the Committee. The Chairman of the Audit Committee Dr. Shankar Acharya was present at the last Annual General Meeting to answer the queries of the shareholders.
The Bank has constituted a First Tier Audit Committee as per the guidelines issued by the Reserve Bank of India. During the year, the Committee was re-constituted by the Board on 28th December 2010 to include Mr. Shyam Sunder, Head Compliance of the Bank as a member. Further, Mr. Vikram Sud had resigned from the Bank and ceased to be a member of the Committee. The Committee now consists of four members viz., Mr. Dipak Gupta, Executive Director, Mr. Jaimin Bhatt - Group Chief Financial Officer, Mr. Shyam Sunder, Group Head Compliance and Mr. Arvind Kathpalia – Group Head Risk. Where the internal audit report pertains to specific businesses, the specific Business Head also attends the meeting. The Committee screens the matters entrusted to the Audit Committee and also the routine matters such as overseeing the programme of inspections and compliance of inspection reports so as not to burden the Audit Committee with matters of detail.
The Investor Relations Committee of the Bank consists of four members, with any two forming the quorum. The Committee presently consists of Mr. Asim Ghosh (Chairman), Mr. Uday Kotak, Mr. C. Jayaram and Mr. Dipak Gupta. The Investor Relations Committee reviews the complaints received from the shareholders and ensures redressal thereof. The constitution and composition of the Committee is in accordance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges and the criteria specified by the Reserve Bank of India. The Company Secretary acts as the Secretary and has been appointed as the Compliance Officer of the Committee.
On a monthly basis, the members of the Committee are sent investor grievance reports giving brief details of the complaints received by the Bank. During the year under review, 47 investor complaints were received. All of these have been resolved as on date of this report. As on 31st March 2011, two instruments of transfer of shares, comprising 4000 shares were pending and since then the same have been processed and resolved. No penalties or strictures were imposed on the Bank by any of the Stock Exchanges, SEBI or any other statutory authority on any matter related to capital markets, during the last three years
The ESOP/Compensation Committee of the Bank comprises of three members, with any two forming the quorum. The constitution and composition of the Committee is in accordance with the guidelines issued by Reserve Bank of India. The ESOP/Compensation Committee has been constituted to recommend/review overall compensation structure and policies; consider grant of stock options to employees; review compensation levels vis-à-vis other banks and industry in general and determine the compensation payable to the Directors including performance/achievement bonus and perquisites. The performance bonus to the Executive Directors is based on the recommendation of the Executive Vice-Chairman and Managing Director of the Bank. The Board of Directors of the Bank decides the performance bonus to be paid to the Executive Vice-Chairman and Managing Director and the Executive Directors on the basis of the performance of the Bank and the fulfilment of responsibilities assigned to them. Non-Executive Directors at present, are not paid commission over and above the sitting fees. The Bank has issued stock options to its employees and the employees of its subsidiaries under various stock option plans, details of which are provided in the Directors’ Report.
In view of the cessation of Mr. Anand Mahindra, Mr. Cyril Shroff and Mr. Shivaji Dam as Directors of the Bank, the Committee was re-constituted by the Board on 18th March 2011 and consists of Mr. Amit Desai (Chairman), Dr. Shankar Acharya and Mr. Prakash Apte as members of the Committee with any two forming the quorum.
The START Committee of the Bank consists of Mr. Uday Kotak (Chairman), Mr. C. Jayaram and Mr. Dipak Gupta, with any two forming the quorum. The term of reference of the START Committee is as follows:
The term of reference of the START Committee is as follows:
(a) To approve transfer, transmission, transposition, name deletion, consolidation and splitting of share and debenture certificates of the Company.
(b) To issue duplicate share/debenture certificates.
(c) To apply for registration of the Company with various authorities of any state or Centre including sales tax authorities, income tax authorities, shops & establishment authorities, and to do or perform all matters relating to such matters.
(d) To apply, in the name of and for the Company for telephone, telex, fax and other telecommunication and electrical/electronic connections and to do all matters relating to such applications.
(e) To open, operate and close Bank Accounts of the Company and change the operating instructions of existing Bank Accounts of the Company. (f) To authorise persons to sign on behalf of the Company Share Certificates, Share Allotment Letters, Deposit Receipts.
(g) To authorise persons to represent the Company at General Meetings of any company or cooperative society of which the Company is a shareholder/member.
(h) To fix the dates for Closure of the Company’s Register of Members and Debenture holders and Transfer Books of Shares or Debentures and/or fixing Record Dates, in consultation with the Stock Exchanges.
(i) To authorise the opening of Securities General Ledger Account or any other account with any scheduled banks or with any department of the Reserve Bank of India.
(j) To authorise persons to execute Loan Agreements, Demand Promissory Notes and any other documents as may be necessary for lending out of any line of credit sanctioned to the Company.
(k) To authorise officials of the Company to execute transfer deeds on behalf of the Company.
(l) To authorise officials of the Company to sign documents for registration of motor vehicles and to do all acts and things for the transfer of any such motor vehicles.
(m) To authorise employee(s) or others to execute, for and on behalf of the Company, agreements, applications, deeds, documents and any other writings in connection with the business of the Company and, if required, to issue Power of Attorney in favour of such persons for the purpose.
(n) To authorise employee(s) or others to represent the Company before any Court, Tribunal, Consumer Redressal Forum or any Statutory or other Authority on any matter relating to the operations of the Company or with which the Company is in any way connected or to represent the Company generally or for any specific purpose or purposes and, if required, issue Power of Attorney in favour of such persons for the purpose.
(o) To appoint or change nominees to hold shares for and on behalf of the Company in any subsidiary/associate companies.
(p) To grant permission and authorise incorporation of companies, with a prefix "Kotak Mahindra" before the name.
(q) To authorise the use of the Common Seal of the Company and to appoint persons to sign/countersign documents, etc. on which the Common Seal is to be affixed.
The Nomination Committee of the Bank consists of three members, with any two forming the quorum. Presently, the Committee consists of Mr. Uday Kotak (Chairman), Mr. C. Jayaram and Mr. Dipak Gupta. The terms of reference of the Committee include appointment of senior management personnel and making recommendations to the Board for appointment of Directors or filling of vacancies on the Board. In addition, the Committee also evaluates whether the members of the Board of Directors of the Bank adhere to the ‘fit and proper’ criteria as prescribed by the Reserve Bank of India.
The Management Committee of the Bank consists of four members, with any three forming the quorum. The Committee has been constituted to review all important matters to be placed before the Board, assess adequacy of policies on an on-going basis, review business operations, corporate governance, implementation of policies, to establish systems for facilitating efficient operations and to approve donations. Further, the Board of Directors of the Bank at their meeting held on 20th October 2010 authorized the Management Committee to exercise the supervisory powers in connection with the risk management of the Bank which interalia includes, monitoring of the exposures, reviewing adequacy of risk management process and upgradation thereof, reviewing the internal control system and ensuring compliance with the statutory/regulatory framework of the risk management process.
In view of the cessation of Mr. Shivaji Dam as a Director of the Bank, the Committee was re-constituted by the Board on 18th March 2011 and now consists of Mr. Uday Kotak, Mr. Dipak Gupta, Mr. C. Jayaram and Mr. Prakash Apte as members of the Committee.
Pursuant to the directives of the Reserve Bank of India, the Bank has constituted a Committee on Frauds on 27th January 2004 for monitoring and reviewing all the frauds involving amounts of 1 crore and above. The Committee was re-constituted by the Board on 15th December 2011 and presently consists of Mr. Uday Kotak, Mr. Dipak Gupta, Dr. Sudipto Mundle and Mr. N.P. Sarda as members of the Committee.
The Bank has, pursuant to the directives issued by the Reserve Bank of India, constituted a Customer Services Committee on 22nd September 2004. The Committee presently consists of three members viz; Mr. Asim Ghosh (Chairman), Mr. Uday Kotak and Mr. Dipak Gupta. The Committee has been constituted to bring about ongoing improvements in the quality of customer services provided by the Bank. The Committee would also oversee the functioning of the Customer Service Standing Committee, compliance with the recommendations of the Committee on Procedures and Performance Audit and Public Services (CPPAPS) and also mount innovative measures for enhancing the quality of customer service and improving the level of customer satisfaction for all categories of cliental, at all times.
