Board of Directors

As on March 31, 2012, the Company’s Board consists of 12 Directors, comprising (i) a non-promoter non-executive Chairman, (ii) six Independent Directors, (iii) one nominee of an institution which has invested in the Company, (iv) two nominee Directors of the Government of India, and (v) two whole-time Directors. The Directors bring to the Board a wide range of experience and skills which include banking, global finance, law, accounting and economics. One-half of the Board consists of Independent Directors. Thus, the composition of the Board exceeds what is called for under Clause 49, namely that if the Chairman is nonexecutive and not a promoter, one-third of the Board should be Independent.

Board Meetings

The Board met at least once a quarter to review the quarterly results and other items on the agenda and also on the occasion of the Annual General Meeting (AGM) of the shareholders. Additional meetings are held whenever necessary. The gap between any two meetings is less than four months. During FY12, the Board met five times: on April 29, 2011, July 27, 2011, November 8, 2011, February 10, 2012 and March 30, 2012.

Board Committees

Audit Committee
As on March 31, 2012, the Audit Committee comprises of five members, all of whom are Independent Directors. The Committee met four times during the year under review: on April 29, 2011, July 27, 2011, November 8, 2011 and February 8, 2012. The time gap between any two meetings was less than four months. The Audit Committee was reconstituted on November 8, 2011, by inducting Ms. Marianne Økland as a member of the Committee.

The CFO and the representative of the statutory auditors and internal auditors are permanent invitees to the Audit Committee meetings. Mr. Mahendra Shah, Company Secretary of IDFC, is the secretary to the Committee. The quorum of the meeting is three members. All members of the Audit Committee have accounting and financial management expertise. Mr. S. H. Khan, Chairman of the Audit Committee, was present at the Company’s previous AGM held on July 27, 2011.

Compensation Committee
As of March 31, 2012, the Compensation Committee of IDFC comprises of five Directors, none of whom are executives of the Company. The Committee met on April 29, 2011 and March 30, 2012. The Compensation Committee recommends to the Board the compensation terms of Whole-time Directors and Senior Managerial Personnel. The minutes of the Committee are reviewed by the Board.

Nomination Committee
The Nomination Committee assists the Board in the appointment of new Board members, and other matters like succession planning. The Committee met on July 27, 2011.

Investors Grievance Committee
As of March 31, 2012, the Investors’ Grievance Committee consists of four Directors, two of whom are Independent. The Committee met four times during the year: on April 29, 2011, July 27, 2011, November 8, 2011 and February 8, 2012. The Committee was reconstituted on July 27, 2011, by inducting Mr. Deepak Parekh as a member. Mr. Mahendra Shah, Company Secretary of IDFC, is the Compliance Officer.

Risk Management

IDFC follows a comprehensive risk management framework that details risk assessment and minimization procedures. It especially focuses on improving sensitivity to assessment of risks and improving methods of computation of risk weights and capital charges. The risk assessment and mitigation procedures are periodically reviewed by the Board.

In addition, IDFC has a Board-level Risk Committee that monitors risk management of the Company on a regular basis. It comprises Mr. Gautam Kaji (Chairman), Mr. Shardul Shroff, Mr. S. H. Khan, Dr. Rajiv Lall and Ms. Marianne Økland. The Risk Committee reviews and monitors mainly three types of risks across the organisation: credit risk, market risk and operational risk. This is done under the overall framework of the Enterprise Risk Management System. The Risk Committee was reconstituted on November 8, 2011, by inducting Ms. Marianne Økland as a member. The quorum for any meeting of this Committee is three. The Committee met three times during the year under review: on July 27, 2011, November 8, 2011 and February 8, 2012.

Code of Conduct

IDFC’s Board of Directors has laid down a code of conduct for all Board members and designated Senior Management Personnel of the Company. The Code is available on the website of the Company: www.idfc.com. All Board members and designated Senior Management Personnel have affirmed compliance with the Code. A declaration signed by the Chief Executive Officer (CEO) to this effect is enclosed at the end of the chapter on Additional Shareholder Information. more...

Disclosures

Transactions with related parties entered into by the Company in the normal course of business were placed before the Audit Committee. Details of related party transactions are included in the Notes to the Accounts.

Disclosure of accounting treatment in preparation of financial statements
The Company has complied with applicable Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006, as amended in preparation of its financial statements.

Confirmation of Compliance
IDFC has complied with all the requirements of regulatory authorities. No penalties or strictures were imposed on the Company by stock exchanges or SEBI or any statutory authority on any matter related to capital market during the last three years.

Re-Appointment/ Appointment of Directors
During FY12, Ms. Marianne Økland and Mr. Sunil Soni were appointed as Additional Directors w.e.f. October 1, 2011 and May 8, 2012, respectively. On May 8, 2012, Mr. S.S. Kohli was appointed as an Additional Director in the capacity of an Independent Director. They will hold office till the date of the ensuing AGM. The Company has received notices from Members of the Company under Section 257 of the Companies Act, 1956, proposing their candidature as Directors. Mr. Dimitris Tsitsiragos and Mr. Bimal Julka ceased to be Directors w.e.f. from October 14, 2011 and May 8, 2012, respectively. The Board placed on record its appreciation of the invaluable guidance provided by them to the Company.

Seven Directors are liable to retire by rotation and one-third of them will retire at the ensuing AGM. Mr. Donald Peck and Mr. Gautam Kaji are retiring by rotation and being eligible, offer themselves for re-appointment in the ensuing AGM. The Nomination Committee of the Company, at its meeting held on May 8, 2012, recommended (i) the re-appointment of Mr. Deepak Parekh as the Non-Executive Chairman of the Company for a period of three years w.e.f. May 8, 2012; (ii) the reappointment and re-designation of Dr. Rajiv Lall as Vice Chairman & Managing Director, for a period of 3 years w.e.f. May 8, 2012 and (iii) the re-appointment and re-designation of Mr. Vikram Limaye as Deputy Managing Director for a period of 3 years w.e.f. May 8, 2012.

The Compensation Committee of the Company, at its meeting held on May 8, 2012, recommended the terms of re-appointment of Dr. Rajiv Lall and Mr. Vikram Limaye, which are provided in the Notice convening the ensuing AGM.

Based on the recommendation of Nomination and Compensation Committees and subject to the approval of the Members at the AGM, the Board of Directors, at its meeting held on May 8, 2012, granted its approval for the re-appointment of Mr. Deepak Parekh, re-appointment and re-designation of Dr. Rajiv Lall and Mr. Vikram Limaye. Brief resumes of the Directors getting appointed or re-appointed are given in the Exhibit to the Notice of the AGM.

Code for prevention of insider trading
In compliance with the SEBI Regulation on Prevention of Insider Trading, the Company has instituted a comprehensive Code of Conduct for its Management and staff. It lays down guidelines which advises employees on procedures to be followed and disclosures to be made while dealing with the shares of the Company and cautions them of the consequences of violations.

Anti-money laundering and know your customer policy
In keeping with specific requirements for Non-Banking Financial Company, the Company has formulated an Anti-Money Laundering and Know Your Customer Policy.

CEO and CFO certification
The CEO and CFO certification of the financial statements for the year is enclosed at the end of the chapter on Additional Shareholder Information.

Shareholders

Alteration of Articles of Association and change of name
The Company proposes to alter it's Articles of Association and change it's Name from Infrastructure Development Finance Company Limited to IDFC Limited. The details thereof are provided in Notice convening the AGM & Directors' Report.

Annual and extra-ordinary General meeting of shareholders
The following Special Resolutions were taken up in the last three AGMs and were passed with requisite majority.

• AGM held on July 20, 2009:
  (i) appointment of statutory auditors, and (ii) grant of stock options in excess of 1% in one year under Employee Stock Option Scheme of the Company.
• AGM held on June 28, 2010:
  (i) appointment of statutory auditors, and (ii) raising of capital.
• AGM held on July 27, 2011:
  (i) appointment of statutory auditors.

Postal Ballot
During the FY12, through a notice dated September 30, 2011, approval of shareholders was sought by voting through postal ballot of an ordinary resolution to authorise creation of mortgage / hypothecation of charge on the assets of the Company under the provisions of Section 293(1)(a) of the Companies Act, 1956. The Company appointed Ms. Savita Jyoti, a practicing Company Secretary, as the scrutinizer for conducting the postal ballot voting. The scrutinizer submitted her report to the Chairman, and the result was announced on Tuesday, November 1, 2011. The result was also displayed at the corporate office and the registered office of the Company and was posted on the website, www.idfc.com, besides being communicated to the stock exchanges where IDFC is listed.

Communication to Shareholders
As per Clause 54 of the Listing Agreement, IDFC maintains a website (www.idfc.com) containing basic information about the Company, such as details of its business, financial information, shareholding pattern, compliance with corporate governance, contact information of the designated officials of the Company who are responsible for assisting and handling investor grievances, etc. It also displays all official press releases and presentation to analysts made by the Company. Information on this website is regularly updated. As per Clause 52 of the Listing Agreement, information about the financial results, shareholding pattern and other specified details are now electronically filed through the Corporate Filing and Dissemination System (CFDS). Investors can visit the website www.corpfiling.co.in to view such data. The quarterly, half-yearly and annual results of the Company’s performance are published in leading newspapers like the Business Standard for all-India, and Makkal Kural in Chennai.

Whistle Blower Policy

Fair Practices Code

Policy for determination of Interest Rates