The Board of Directors (BoD) ensures that the activities of the company are conducted as per standards and in the best interests of its stakeholders. From how we structure and develop our business to the partnerships we intend to develop with our stakeholders, HIDCL is committed to the principle’s best standards of corporate governance.
Ø BOARD COMMITTEES
There is a reliable system of control in all areas of operations of the Company. The effectiveness of the internal control system in the Company is assured by the Board and its following committees:
· RISK MANAGEMENT COMMITTEE
The Risk Management Committee has the responsibility to identify the existing risks both at the enterprise and project level. It meets routinely to analyze the business, its environment, the associated risks, the risk bearing capacity, strategies to be developed to manage the risks, and the sufficiency and suitability of the risk management system. The committee has its own Terms of Reference, very similar to the directives issued by the Central Bank, clearly spelling its domain of work. The committee, which also has mandates as per the Lending Policy of the company, is to review project recommendations made to it by the Risk Assessment Cell and make appropriate recommendation to the Board on Projects.
· AUDIT COMMITTEE
It is an independent body answerable directly to the Board of Directors. The committee is responsible for verifying that the financial operations of the company have been conducted and its books kept in a proper manner. It reviews the interim and annual audit report and financial statements of the company, and also helps to create and maintain accounting standards in the Company. On behalf of the board, it monitors the integrity of the company's financial statements and has a responsibility to ensure that the shareholder's interest is safeguarded in financial reporting.
· HR & COMPENSATION COMMITTEE
The Human Resources and Compensation Committee is responsible for supporting the Board of Directors in establishing guidelines on compensation and benefits, requirements and need assessment of human resources in the company, and formulating strategies and policies to manage the human resource portfolio of the Company. The committee recognizes the importance of programs that foster executive and employee development. It also works on such important issues as retention, leadership development, assessment of management capabilities etc. It also recommends compensation to the board, and designs policies and plans related to employee benefits programs.
Ø Decision Making Process and Authority
· Proposal for debt/equity investment received directly from hydro power project developers or through banks or financial institutions.
· The investment decision executed through the processes as mandated by the company’s Loan and Equity Investment Procedure, 2078.
· Initial Screening of the Project through Rapid Assessment Tool (RAT) upon the receipt of all required documents as per the company’s investment procedure.
· If the project successfully passes the required threshold under RAT, detailed appraisal and evaluation of the project is done.
· Detailed evaluation of the project done through respective departments to assess the technical, financial, environmental, social, social, legal, managerial and other risks involved in the project through the company’s Investment Appraisal Tool (IAT). Technical, environmental and social aspects of the project are evaluated by the Technical Appraisal and Evaluation Department and Financial, Legal and Managerial aspects of the project are evaluated by the Financial Evaluation and Risk Management Department.
· Based on the findings of departmental evaluation a combined departmental report is prepared and submitted to the Investment and Risk Management Sub-Committee.
· Investment and Risk Management Sub-Committee prepares the investment report.
· Investment Report is submitted to the Risk Management Committee (RMC).
· Upon the satisfaction of the Risk Management Committee (RMC), the proposal is forwarded to the Board of Directors with recommendations. In the due process RMC can also conduct peer review of the Investment report through independent experts as when required.
· Necessary decision about investment in the project based on recommendations from the RMC made by the Board of Directors.
(Updated 2024.11.17)