annual-report-FY2020

185 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2019-20 III. RISK MANAGEMENT Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the Company. These levels form the strategic defence cover of the Company’s risk management. The Company has a robust organisational structure for managing and reporting on risks. Your Company has constituted a Risk Management Committee consisting of Board Members which is authorised to monitor and review Risk Management plan and risk certificate. The Committee is also empowered, inter alia , to review and recommend to the Board the modifications to the Risk Management Policy. Further, the Board has constituted a Corporate Risk Council comprising of the Senior Executives of the Company. The terms of reference of the Council comprise review of Risks and Risk Management Policy at periodic intervals. The Risk Management Policy approved by the Board, inter alia , includes identification therein of elements of risk, including those which in the opinion of the Board, may threaten the existence of the Company. The Risk Management process has been established across the Company and is designed to identify, assess and frame a response to threats that affect the achievement of its objectives. Further, it is embedded across all the major functions and revolves around the goals and objectives of the Company. IV. COMMITTEES OF THE BOARD The Committees of the Board play an important role in the governance, focus on specific areas and make informed decisions within the delegated authority. Majority of the members constituting the Committees are Independent Directors and each Committee is guided by its Charter or Terms of Reference, which provides for the composition, scope, powers & duties and responsibilities. The recommendations, observations and decisions of the Committees are placed before the Board for information and approval. During the year under review, all recommendations of the Committees were accepted by the Board. The Board has constituted the following mandatory and non-mandatory Committees: A. Audit Committee This Committee comprises of the following Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Mr. Nadir B. Godrej, Mr. M. M. Murugappan and Ms. Shikha Sharma. All the Members of the Committee are Independent Directors. Ms. Shikha Sharma was appointed as a Member of the Committee with effect from 8 th August, 2019 and Mr. R. K. Kulkarni ceased to be a Member of the Committee with effect from 8 th August, 2019 upon cessation as a Director of the Company. All the Members of the Committee possess strong accounting and financial management knowledge. The Company Secretary is the Secretary to the Committee. The terms of reference of this Committee are very wide and are in line with the regulatory requirements mandated by the Act and Part C of Schedule II of the Listing Regulations. Besides having access to all the required information from within the Company, the Committee can obtain external professional advice whenever required. The Committee acts as a link between the Statutory and the Internal Auditors and the Board of Directors of the Company. It is authorised to, inter alia , review and monitor the Auditor’s independence and performance, scope and effectiveness of audit process, oversight of the Company’s financial reporting process and the disclosure of its financial information, review with the management the quarterly and annual financial statements and auditor’s report before submission to the Board for approval, select and establish accounting policies, review Reports of the Statutory and the Internal Auditors and meet with them to discuss their findings, suggestions and other related matters, approve (wherever necessary) transactions of the Company with related parties including subsequent modifications thereof, grant omnibus approvals for related party transactions subject to fulfilment of certain conditions, scrutinise inter-corporate loans and investments, valuation of undertakings or assets of the Company, review the risk assessment and minimisation procedures, evaluate internal financial controls and risk management systems, monitor end use of the funds raised through public offers and related matters, review the utilisation of loans and/ or advances from/ investment by the Company in the subsidiary companies exceeding Rs. 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans/ advances / investments and review compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) at least once in a financial year and verify that the systems for internal control areadequateandareoperatingeffectively. The terms of reference are also in line with the regulatory requirements mandated in the Act and SEBI Listing Regulations.