Credit Rating Commitee

EXTERNAL RATING COMMITTEE

COMPOSITION

The External Rating Committee (RC) of Infomerics Ratings consists of Seven Members who are neither the employees of the company nor the members of the Board of the company. The External Rating Committee (RC) is an independent body. Any change in the composition of RC shall be approved by the Board of Directors of the company on merits.

ELIGIBILITY

The members of the RC shall be professionally qualified persons of eminence who shall have long & established experience in domestic and/or overseas corporate/banking arena, and/or in public services and in the fields of finance, economics, industry or banking/credit appraisal or persons who have held senior positions in regulatory organizations.

QUORUM FOR THE MEETING

The RC meeting shall be considered to have appropriately held if quorum is present. Quorum for this purpose shall constitute at least three members. In absence of quorum, no meeting shall be held. If the quorum is not present at the decided time of RC Meeting or within 30 minutes thereof, the RC meeting shall not be convened and shall be adjourned to a future date, mutually convenient for the RC members and Infomerics.

DUTIES & RESPONSIBILITIES OF RC MEMBERS

RC shall be the authority to assign each Credit Rating and Grading, unless otherwise decided by the Board. Each Credit Rating and Grading shall be decided by the RC in its appropriately convened meeting, which shall be finalised by the Chairman of the particular RC and shall be documented by way of Minutes which shall be signed by the Chairman of the meeting. This will be also applicable to surveillance of a rating and grading. 
RC members while deliberating on each rating and/or grading in RC meeting shall form their opinion based on the information & analysis presented before them in the form of a Rating/Grading Note and the information available in the public domain and/or in their individual possession.

RC MEETING

The RC meeting shall be considered to have been appropriately convened if the proper notice along with the Agenda Papers is sent to each member of RC atleast two clear days before each meeting by email or by registered post or speed post at the email address or postal address, as applicable, recorded with the company. However in case of urgency, the minimum notice period for the meeting and the minimum time period for circulating the Agenda Papers may be waived with the consent of all the RC members

SYSTEM OF VOTING AND RECORDING OF DISSENT NOTES

Each RC member shall have one vote and in case of a tie, the Chairman shall have a casting vote to arrive at a decision. The dissent, if any, shall be recorded with the reasons. 

The Company Secretary/Dy. Company Secretary shall be the Secretary to RC meeting. The Secretary shall be the contact person for the RC members. The responsibilities of Secretary shall be the following:

a.    To issue Notice to issue Notice for RC meeting.
b.    To take note of the final Rating/Grading assigned in the Rating/Grading Register
c.    To ensure that the minutes of each case discussed at the committee shall be recorded/maintained and signed (digitally or manually by the Chairperson)
d.   If required, to get approved the summary of final Rating (s)/Grading (s) assigned by the RC and approved by the Chairman of RC and to circulate the same to the Rating Head, Group Head, CRO and CEO, over email.

RATING REVIEW COMMITTEE

In line with SEBI’s guidelines, Infomerics currently has a Rating Review Committee to consider all cases of requests by Issuers for review of the Investment Grade rating(s) assigned to their instrument(s) / bank facilities. In line with SEBI’s requirement that the Review Committee of a CRA shall consist of majority of members that are different from those in the Rating Committee of the CRA that assigned the earlier rating and at least one-third of members should be independent (members not having any pecuniary relationship with the CRA or any of its employees).

COMPOSITION

The Rating Review Committee (RRC) of Infomerics, consists of Four Members who are different from those in the External Rating Committee (RC) of the CRA that assigned the earlier rating. Majority of the Member of the Rating Review Committee of Infomerics are Independent member (members not having any pecuniary relationship with the CRA or any of its employees)

ELIGIBILITY

The Eligibility to become a Member of Rating Review committee is same as of RC.

QUORUM FOR THE MEETING

The RRC meeting shall be considered to have appropriately held if quorum is present. Quorum for this purpose shall constitute at least Two members. In the event of shortfall in quorum for the meeting, any of the independent members of the Board of Directors of Infomerics or any independent member of the Rating Committee who did not present at the time of initial rating may form a part of the Review Committee. All Investment Grade cases for review are considered by Review Committee subject to such requests meeting the review criteria as stated in subsequent paragraphs. The Review Committee shall invite the CRO/CEO and the Rating Team for their input and/or presentation.

In case of Below Investment Grade cases, the External Rating Committee (RC) is the Review Committee and all the requirements relating to quorum, etc., is applicable accordingly.

DUTIES & RESPONSIBILITIES OF RRC MEMBERS

The Duties and responsibility of the RRC members is same as of the RC Members. The RRC Members should appropriately consider the Representation received form the Client and accordingly make the decision. 

REVIEW CRITERIA

The Duties and responsibility of the RRC members is same as of the RC Members. The RRC Members should appropriately consider the Representation received form the Client and accordingly make the decision. 

(i).    If there is any additional information which was not available at the time of initial rating/surveillance; and/or,
(ii).    (ii)If there is any new development post initial rating/surveillance (like any equity infusion through QIP, from Private Equity players, private placement, long-term preference capital issue, exodus/entry of any key person from/into the Board and/or Senior Management team, any sudden change in the regulatory framework and so on) which appears to be significant.

It is proposed that the senior level Rating Analyst(s)/Group Head, who is/are not involved in the initial rating/surveillance exercise, shall go through the papers to evaluate whether the request for review meets the aforesaid criteria. If it is so felt, then the case shall be processed for Review Committee subject to approval of CEO.

SYSTEM OF VOTING AND RECORDING OF DISSENT NOTES

The voting system at RRC is same as of RC Meeting.

POLICY ON MANAGING CONFLICT OF INTEREST

Any RC member or RRC Member who is also a Director or an employee of any other entity is an “interested party” so far as the rating of such entity is concerned. If the RC Member or RRC Member is a wholetime director or employee of such other entity, such entity shall not be rated by Infomerics Ratings. However,

1)if the RC/Board Committee Member is only an independent director in such other entity, Infomerics Ratings may undertake ratings of that entity; however, in such a case, the same shall be disclosed clearly on the first page of the Rating/Grading Report;
2)if the RC/Board Committee Member is appointed or associated with regulated appointed committee and, in turn, deals with companies and/or entities and/or banks, the same shall be disclosed on the Rating and/or Grading Report;

The rating agenda papers are not to be sent to such a member who is an “interested party”. Further, he/she is required to abstain from the committee deliberations/rating process. All rating letters/rationales/ press releases concerning such cases shall make disclosures regarding the non-participation of such RC/RRC members in the rating process.