Credit and Investment Committee (CIC) Charter
Balmain Funds Management Pty Ltd (Balmain Funds) has been appointed as the investment manager of the Balmain Discrete Mortgage Income Trusts (the Trust) and related sub‐trusts by the Responsible Entity/Trustee Balmain Fund Administration Limited (BFAL) under an Investment Management Agreement dated 18 June 2012. The credit function in respect of the Trust and sub‐trusts is carried out by the Credit Division of Balmain NB Corporation Limited (Credit Division) in accordance with the Lending Policies and Procedures Manual (Manual). The Board of Directors of Balmain Funds (the Board) has established a credit and investment Committee (CIC) to assist the Board to carry out the following functions more efficiently and effectively:
- oversee the operation of the Credit Division for activities relating to the Trust and subtrusts; and/or,
- be the sole approval authority subject to any delegation of lending authority (DLA) granted by the CIC.
Terms used herein are defined in the Manual.
3. Convening of Credit and Investment Committee
A credit and investment committee (CIC) is hereby convened by the Board on the terms set out in this Charter.
This Charter outlines the terms of reference for the CIC.
The CIC shall, at all times, act for the benefit of and in the best interests of the unitholders of the Trust and sub‐trusts.
5. Terms of Reference
The CIC is delegated the following authorities:
- Oversight of the Credit Division including, but not limited to, monitoring:
- compliance with the Manual and Product and Eligibility Criteria as contained in the Investment Guidelines of the Trust and sub‐trusts;
- the adequacy of the Credit Division's resources to fulfil its duties; and,
- general performance of the Credit Division.
- Sole loan approval authority including assessment and approval/rejection of credit submissions and on‐going monitoring of the portfolio and individual loans as required.
- To oversee and approve any default management strategy and implementation and resolution.
- To review and recommend changes to the Manual to the Board and BFAL.
- To grant delegated lending authorities (DLA) as may be required.
- To review and recommend changes to the DLAs as deemed appropriate.
- The appointment of Panel Solicitors, Panel Valuers, Panel Quantity Surveyors and other 3rd party professionals subject to a recommendation from the Head of Credit of Balmain (HoC).
- Evaluating investment performance of the Trust and sub‐trusts based on a comparison of actual returns against stated objectives and benchmarks. The evaluation will take into account compliance with investment guidelines and following this, inform the Board as to compliance with the stated objectives and benchmarks.
- Considering the overall investment strategies of the Trust and sub‐trusts in light of changes in the national and local property and credit markets and the economy generally.
The following rules apply to the composition of the CIC and attendance at its meetings:
- Balmain Funds in consultation with BFAL will determine appointments to the CIC and
they will be as follows until otherwise notified:
- Balmain Asset Management Executive Member who will be appointed Chairman of the Committee;
- Head of Credit, Balmain Funds; and
- The Chairman of BFAL.
Alternate CIC Members
- Balmain Funds alternate member is the CEO of the Trust; and
- BFAL’s alternate member is the CEO of the Balmain Group.
At the date of this Document, the appointed members are:
- Robert Taylor
- William Davis; and
- Michael Holm
- Minimum membership is three members.
- The CIC can require attendance of any Balmain employee or associate.
7. Meetings and Resolutions
The following rules apply to the conduct of meetings of the CIC:
- A quorum consists of three members.
- Alternate members approved by the Board may act on behalf of an absent committee members.
- Decisions of the CIC must be unanimous.
- The CIC shall meet as required but not less than twelve times per annum.
- Meetings may be conducted electronically or by circular resolution.
The CIC’s responsibilities and functions are as follows:‐
- Ensure that the credit management of the assets of the Trust and Sub‐Trust is in accordance with the Manual and the Product and Eligibility Criteria as contained in the Investment Guidelines, and regularly report to the Board and to the BFAL Board as required.
- Monitor assets in default and where necessary approve strategies to secure optimal recovery.
- Monitor and recommend changes to DLAs.
- Promptly consider and determine individual credit recommendations with regard to the Investment Guidelines.
- Ensure any potential or actual breaches of the Manual or Balmain Policies are immediately referred to the Board.
- Provide the Board with recommendations covering proposed changes to investment strategies, asset allocation and risk weighting based on current and prospective market conditions.
9. Review of and Amendments to this Charter
The CIC must review annually this Charter and the Lending Guidelines to ensure both are still current, valid and appropriate for the purpose, and provide confirmation to the Board. In the event that the CIC, as a result of this review, resolves that this Charter requires modification or amendment it shall make the appropriate recommendation to the Board for its consideration.
This Charter is to be reviewed by the Board:
- within 14 days of any recommendation being received from the CIC to modify or amend the Charter; and
- not less than once in any 12 month period.
Any changes to this Charter must be approved by the Board.
Membership of the CIC Committee is to be reviewed by the Board at intervals of not more than twelve (12) months.
10. Disclosure of Interests
CIC members (or their alternates) have a duty to comply with Balmain's Conflicts of Interest Policy and to disclose any potential conflicts of interest to the CIC and to the Board. Upon such declaration that party is ineligible to discuss or vote in relation to matters in which either the member or his alternate has an interest.
The Chairman of the CIC will either provide or procure the provision from the Credit Division a report to the Board within 15 days of the end of each month as stipulated in Schedule 1 or as advised by the Board from time to time.