Introduction

Corporate governance is the foundation of sustainable business growth and it also attracts ever-increasing attention from investors and regulators. By permitting companies to respond effectively to the external challenges, efficient corporate governance plays a major role in increasing the market players’ confidence. Also, it is a key aspect of investment decisions and this is a fact that is confirmed by several independent studies.

SK Finance Limited (Formerly known as Ess Kay Fincorp Limited) practices corporate governance by offering assistance in making sure that the transfer of the authorities to the hired management is seamless. When it comes to Corporate Governance, the approach of our company is based on years of our experts’ practical experience, best practices, and our large-scale methodological framework.

Our company’s powerful observance to Corporate Governance has permitted us to be well organized, plan the strategies and goals better as well as fulfill our procedures more efficiently. As a result, this has made us more competitive and powerful in the market. Also, it has played a major role in making us gain the image of a trustworthy company and ensure effective company administration and management.

The Code of Conduct (the 'Code') for the Directors and team members of SK Finance Limited (Formerly known as Ess Kay Fincorp Limited):

  • Remember that the members’ liability and major responsibility is towards the organization’s customers
  • Be transparent and honest in the assigned powers’ use, in the firm’s best interests and good faith
  • Keep the conflict of your personal interests separate from your professional life so that it does not affect the company's development
  • Use diligence and due care in performing the officials’ office duties and in exercising the powers joined to that office
  • They are charged with as well as are accountable for examining the company’s business affairs and assets in an ethical, honest, diligent, and fair manner
  • Have a courteous, respectful, and professional demeanor
  • Review and wherever necessary, approve the major financial actions, plans, and objectives of the company

Fair Practice Code

The Reserve Bank Of India (RBI) has issued the guidelines on Fair Practices Code for the NBFCs (Non-Banking Finance Companies) hence setting the standards for the fair corporate and business practices while doing business with their clients.

The reason behind the adoption of these practices is to have transparent trade with the customers and place the company with a robust mechanism for customer grievance redressal. The aim is also to follow the regulatory guidelines authorized by RBI from time-to-time and shall make any modifications, if relevant, to this code of conduct for conforming to the prescribed standards.


Applications for loans and their processing

  • The forms for loan application must include relevant information that affects the borrower’s interest to bring fair practice and transparency. This form shall contain a checklist having the list of those documents which are needed to be confirmed along with the same.

  • Any sort of interaction to the borrower shall take place in a language that can easily be understood by him or the vernacular language.

  • After the receipt of the application form from the borrower, an acknowledgment receipt accurately mentioning period within which the loan applications will be disposed of, shall be handed over to the borrower.


Loan appraisal and terms and conditions

Amount of sanctioned loan with the terms as well as conditions including the application’s method and annualized interest rate thereof, shall be delivered in writing to the borrower in a language easily understandable by him or vernacular language through sanction letter or otherwise, and an accepted copy of the terms and conditions through the borrower shall be maintained on record. Penal interest is charged for the late repayment in bold in the loan agreement.

The loan agreement’s copy, ideally in a vernacular language or the one that can be understood by the borrower, with one copy each of all the enclosures that are quoted in loan agreement shall be supplied to all borrowers at the time of disbursement/sanction of loans.


Disbursement of loans and changes in terms and conditions

Notice to a borrower shall be provided in vernacular language as understood by him of any alteration in terms and conditions such as interest rates, disbursement schedules, prepayment charges, service charges etc., and it shall also be made sure that modifications in charges and interest rates are affected only prospectively. The suitable situation in this view shall be comprised of a loan agreement.

The post-disbursement supervision of all the loans shall be as per the normal business practice, the guidelines and terms of sanction issued by the RBI from time-to-time.

The decision to accelerate/recall performance or payment under an agreement shall only be carried by the loan agreement.

All the securities on the repayment of every due amount or on the realization of an outstanding aggregate of the loan that is subject to the lien or legitimate right, for another claim which the company might have against the borrower, shall be released. If any such right of set-off needs to be used, the borrower will be offered a notice regarding the same along with complete details about remaining conditions and claims under which the NBFCs are authorized to retaining securities until the important claim is paid/settled.


General

There shall not be any interference in borrower’s affairs except for reasons offered in the loan agreement’s terms and conditions unless any new information that the borrower has not disclosed earlier, has been noticed by the company.

If the request’s receipt is received from a borrower for transferring his account, the company’s objection or consent shall be forwarded within 21 days’ time period from the receipt of request’s date. Any transfer like this shall be according to the transparent contractual duration following the law.

During loans’ recovery, undue harassment i.e., use of the muscle power for the recovery of the loans, persistently bothering borrowers at very odd timings etc., is strictly prohibited and is against the organization’s code of conduct. Routine training to all the staff members who communicate with the clients is planned for good behavior with them.

Any pre-payment penalties will not be charged on all the floating rate term loans that are sanctioned to the individual borrowers.


Responsibility of Board of Directors

The Board of Directors has formed suitable grievance redressal system within the company for ensuring that all those disputes which arise out of those decisions that are made by the organization’s functionaries are listened to and then at least disposed of at the following higher level.

They shall periodically analyze the Fair Practices Code’s compliance as well as the grievances redressal mechanism’s functioning. Such reviews’ consolidated report might be conformed to the Board from time-to-time, as might be directed by it.


Repossession of vehicles financed by the Company

The company’s loan agreement shall contain important repossession clauses along with the necessary details thereof as directed by RBI from time-to-time.


Interest Rates and Gradation of Risk

Company has acquired following practice for complying with THE RBI CIRCULAR DNBS.204/CGM (ASR) – 2009 dated January 2, 2009 and see its guidelines on FPC for the NBFCs and the aim of these practices’ adoption is for communicating annualized rate of interest to borrower with an approach for the gradation of the risk as well as rationale to charge distinctive rates of interest to different borrowers’ categories for having transparent trade with the customers and complying with regulatory guidelines.


Interest Rate

Suitable internal procedures and principles in determining processing, interest rates, and the other charges shall be followed in line along with the accepted company strategies from time-to- time.

The rate of interest shall be dependent on the weighted average cost of funds, risk premium, profit margin, and administrative costs.


Gradation of Risk

Decision to give the loan as well as the rate of interest that is applicable to each loan account shall be assessed on the case-to-case basis, according to multiple factors like repayment capacity and borrower profile, kind of asset that is being financed, past repayment track record if any, other financial commitments of the borrower, loan’s tenure, security of loan as represented by underlying assets, payment’s mode, loan-to-value ratio, the asset’s end-use, geography/location of borrower etc.

Rates of interest are subject to change as the condition warrants and are also subject to the management’s discretion on the case-to-case basis.

The informed rate of interest is the annualized rates so that borrower is aware of exact rates to be charged to account.


Lending against collateral of Gold Jewellery

Currently, Company is not involved in the business of the lending against gold jewelry, hence code associated to this business shall be approved as well as adopted as and when the decision is taken for entering the mentioned kind of business.

Grievance Redressal Mechanism

Customer shall contact to any branch for any grievance where the Branch Manager to be the first point of communication with the customer and can also reach to centralize customer care team. The Branch, on behalf of customer can also communicate the same to the centralized customer care. Contact details of centralize customer care is also displayed in each branch office. In case customer is not satisfied with the offered solution the he can escalate the same to Grievance Redressal officer whose contact details can be seen at the branches.

The below-mentioned information shall be displayed eminently, for their customers’ benefit, at places where the business transaction takes place/ their branches.

Contact details (Mobile Nos. and E-mail address/Telephone) and Name of the Grievance Redressal Officer who can be addressed by the public for the resolution of the complaints against company which are as under:-

First Level

Mr. Atul Arora,
Grievance Redressal Officer,
M-8, Adarsh Plaza,
Khasa kothi circle Jaipur-302001
E-Mail: customercare@skfin.in
Office: 0141-4161551
Toll free: 1800-103-9039

In case the dispute/complaint is not redressed within fifteen days, the customer may file complaint to the Managing Director of the Company as under :–

Second Level

Mr. Rajendra Kumar Setia,
Principal and Nodal Officer,
G-1 & G-2,New Market,
Khasa kothi circle Jaipur-302001
E-Mail: grievances@skfin.in
Office: 0141-4161552
Toll free: 1800-103-9039

In case the dispute/complaint is not redressed within one month, the customer may appeal to the Reserve Bank of India’s Office as under :–

Third Level

General Manager,
Non-Banking Supervision Department,
Reserve Bank of India,
6, Sansad Marg, Sansad Marg Area,
New-Delhi-110001,
Office: 011-23714456/0538

VALUATION OF MARKET LINKED DEBENTURES

SK Finance Limited (Formerly known as Ess Kay Fincorp Limited) has recently issued Listed, Rated, Redeemable, Secured, Principal Protected Non-Convertible MLDs i.e., Market Linked Debentures which blend features of commodities/ customized indices/equities etc., and debt. These MLDs provide a chance to the investors for investing in the custom-made products that might be suited to their investment horizon as well as market expectation and can earn a lot better returns as compared to fixed deposits.

Please analyze the important offer memorandum/document of the pricing supplement /private placement related to the particular MLDs for points on the same which also include their risk elements. CARE (CARE Ratings Limited), CARE Risk Solutions Private Limited and ICRA Analytics Limited has been chosen as valuation agency to valuate these debentures.

According to the instructions for listing and issue of the Market Linked Debentures/Structured Products dated September 28, 2001 issued through the SEBI, as per valuation agency indicated in the memorandum/offer document of the private placement/pricing supplement, historical and latest valuations offered by valuation agent will surely be available as mentioned below :–

Valuation Agency: https://www.icraanalytics.com/ https://www.carerisksolutions.com/

Valuation offered by valuation agency might vary from determined value by SK Finance Limited (Formerly known as Ess Kay Fincorp Limited). This company shall not be required to rely upon or consider the valuation offered by valuation agency.

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