Loan-to-Directors-Senior-officers

1. BACKGROUND

SGS Fintech Private Limited (Formerly known as SGS Udyog Private Limited) (hereinafter referred as “the Company” or “SGS”) is a  Private Limited Company incorporated in Delhi on 31st January, 2001, having ROC Juridiction in Delhi. It has been converted into Non Banking Financial Company on 17th January, 2025 vide Certificate of Registration (N-14.03642) granted by the Reserve Bank of India (RBI). It is classified as Investment and Credit Company (NBFC-ICC) – Non Deposit taking Non Systemically Important (‘ICC-ND-NSI’).

2. INTRODUCTION

The Board of Directors (hereinafter referred as the “Board”) of the Company has adopted the following policy and procedures with regard to Loans and Advances to Directors, Senior Officers, and relatives of Directors and to entities where directors or their relatives have major shareholding.

3. PURPOSE

This policy is being brought in place in terms of Master Direction-Reserve Bank of India (Non- Banking Financial Company- scale Based Regulation): A Revised Regulatory Framework for NBFCs notified on March 21, 2024.

4. DEFINITIONS

“Act” shall mean Companies Act, 2013 and the Rules framed thereunder including amendments, re- enactments, modifications, notifications, circulars and orders from time to time.

“Arm’s Length Basis” shall mean the transaction entered into between two Related Parties as if they were unrelated to avoid any conflict of interest, and the term ‘arm’s length’ shall be construed accordingly.

“Board of Directors” or “Board” shall means Board of Directors of the Company as constituted from time to time.

“Company” shall mean SGS Fintech Private Limited (Formerly known as SGS Udyog Private Limited).

“Credit” shall mean Credit Department of the Company.

“Key Managerial Personnel” (KMP) means:

  • Chief Executive Officer or Managing Director or the manager;
    1. Company Secretary;
    1. the Whole Time Director;
    1. Chief Financial Officer;
    1. Such other officer, not more than one level below the Directors who is in whole-time employment, designated as key managerial personnel by the Board; and
    1. Such other officer as may be prescribed, from time to time

“Senior Officer’s shall mean shall have the same meaning as assigned to it under Section 178 of the Companies Act, 2013.

“HR” shall mean Human Resource Department of the Company.

“Relative” shall mean the term as defined under relevant section 2(77) of the Companies Act, 2013 read with the Companies (Specification of definitions details) Rules, 2014.

“Related Party” shall mean a Related Party shall have the same meaning as defined under Section 2(76) of the Act and the Rules made thereunder and the applicable Accounting Standards.

“Major shareholder” shall mean a person holding 10 % or more of the paid-up share capital or Five Crore rupees in paid-up shares, whichever is lower.

“Control” shall have the meaning assigned to it under Clause (27) of Section 2 of the Companies Act, 2013.

5. APPLICABILITY

This Policy applies to Directors, Senior Officers and relatives of Directors and to entities where directors or their relatives have major shareholding. It provides a framework for governance and reporting of loans and advances to KMP’s, Directors and its Related Parties.

6. SCOPE AND PURPOSE

This policy is intended to ensure that the loans and advances provide to its Directors, Senior Officers and relatives of Directors and to entities where directors or their relatives have major shareholding by the company should be pursuant to the circular issued by Reserve Bank of India vide RBI/2022-23/29 DOR.CRE.REC. No.25/03.10.001/2022-23 dated April 19, 2022 currently revised on March 21st, 2024. Provisions of this policy are designed to govern the transparency of approval process and disclosures requirements to ensure fairness in the conduct of transactions in terms of the applicable laws as amended from time to time.

7. APPROVAL OF LOAN

(A)  Loan and advances to Key Managerial Personnel and Senior officials

Loan and advances to Key Managerial Personnel and Senior officials shall be approved by the Director of the Company.

(B) Approval of Board of Directors and Shareholders

The Company shall not grant any loans and advances aggregating to Five Crore and above to:-

  • their directors (including the Chairman/ Managing Director) or relatives of directors.
  • any firm in which any of their directors or their relatives is interested as a partner, manager, employee or guarantor.
  • any company in which any of their directors, or their relatives is interested as a major shareholder, director, manager, employee or guarantor.

Without the approval of Board of Directors given by way of a resolution at a meeting of the Board and subject to such conditions as may be prescribed by the Board subject to approval of shareholders and other approvals if required by Statutory provisions of Companies Act, 2013, Reserve Bank of India Act, 1934.

8. DISCLOSURE

Appropriate disclosures as required by the Act and Reserve Bank of India will be made in the Financial Statements and the Board’s Report of the Company. This Policy shall be disclosed on the website of the Company.

9. REVIEW OF POLICY

The Board shall review and amend this policy as and when required.

If at any point a conflict of interpretation / information between the policy and any regulations, rules, guidelines, notification, clarifications, circulars, master circulars/ directions issued by relevant authorities (“Regulatory Provisions”) arises, then interpretation of the Regulatory Provisions shall prevail.

In case of any amendment(s) and/or clarification(s) to the Regulatory Provisions, the policy shall stand amended accordingly from the effective date specified as per the Regulatory Provisions.