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TEXT OF THE CLAUSE 49 OF THE LISTING AGREEMENT (As Revised by the SEBI o A!"!st #$%#&&'() 1.

SEBI, vide its circular dated February 21, 2000, specified principles of corporate governance and introduced a new clause 4 in t!e "isting agree#ent of t!e Stoc$ E%c!anges. &!ese principles of corporate governance were #ade applicable in a p!ased #anner and all t!e listed co#panies wit! t!e paid up capital of 's ( crores and above or net wort! of 's 2) crores or #ore at any ti#e in t!e !istory of t!e co#pany, were covered as of *arc! (1, 200(. SEBI !as issued si% circulars on t!e sub+ect of corporate governance inter,alia detailing provisions of corporate governance, its applicability, reporting re-uire#ents etc. w!ic! are as follows. Sr. No. 1. 2. (. 4. Reference no. S*/'0102"I341 3I',1012000 S*/'0102"I341 3I',1(12000 S*/'0102"I341 3I',4212000 S*/'0102"I341 3I', 0(101 S*/'0102"I341 3I', 1 101 S*/'0102"I341 3I', )(101 5pplicability of 3lause 4 5#end#ents to 3lause 4 Enforce#ent of 3orporate 7overnance 5pplicability of 3lause 4 5#end#ents to 3lause 4 Subject 3lause 4 Date February 21,2000 *arc! 0 , Septe#ber 2000 12, 2000

6anuary 22, 2001 *arc! 18,2001 /ece#ber (1,2001

). 8.

2. In its constant endeavor to i#prove t!e standards of corporate governance in India in line wit! needs of a dyna#ic #ar$et, SEBI constituted a 3o##ittee on 3orporate 7overnance under t!e 3!air#ans!ip of S!ri 9. '. 9arayana *urt!y. SEBI, based on t!e reco##endations of t!e 3o##ittee and public co##ents received on t!e report, !as approved certain a#end#ents in t!e clause 4 of t!e "isting 5gree#ent. (. 5ccordingly, in e%ercise of powers conferred by section 11 :1; of t!e Securities and E%c!ange Board of India 5ct, 1 2 read wit! section 10 of t!e Securities 3ontracts :'egulation; 5ct 1 )8, SEBI !as revised t!e clause 4 of t!e "isting agree#ent. &!e revised clause 4 contains bot!, t!e sub clauses of e%isting clause 4 as well as new sub,clauses. 5ll Stoc$ E%c!anges are !ereby directed to i##ediately replace t!e e%isting 3lause 4 of t!e listing agree#ent : issued vide circular dated February 21, 2000, Septe#ber 12, 2000, *arc! 18, 2001 and (1 /ece#ber 2001; by t!e revised 3lause 4 given in 5nne%ure I. &!e revised clause 4 also specifies t!e reporting re-uire#ents for t!e co#pany. 4. 0lease note t!at so#e of t!e sub,clauses of t!e revised clause 4 :given in 5nne%ure I; s!all be suitably #odified or new clauses s!all be added following t!e a#end#ents to t!e 3o#panies 5ct 1 )8 by t!e 3o#panies :5#end#ent; Bill15ct 200(, so t!at t!e relevant provisions of t!e clauses on 3orporate governance in t!e "isting 5gree#ent and t!e 3o#panies 5ct re#ain !ar#onious wit! one anot!er.

< SEBI1*'/1SE1200(12810=

). &!e provisions of t!e revised clause 4 sc!edule of i#ple#entation given below>

s!all be i#ple#ented as per t!e

8.

@.

=.

:a; By all entities see$ing listing for t!e first ti#e, at t!e ti#e of listing. :b; By all co#panies w!ic! were re-uired to co#ply wit! t!e re-uire#ent of t!e clause 4 w!ic! is proposed to be revised i.e. all listed entities !aving a paid up s!are capital of 's ( crores and above or net wort! of 's 2) crores or #ore at any ti#e in t!e !istory of t!e co#pany. &!e co#panies s!all be re-uired to co#ply wit! t!e re-uire#ent of t!e clause on or before *arc! (1, 2004. &!e revised clause 4 s!all apply to all t!e listed co#panies, in accordance wit! t!e sc!edule of i#ple#entation given in t!e revised clause 4 . ?owever for ot!er listed entities, w!ic! are not co#panies, but body corporates :e.g. private and public sector ban$s, financial institutions, insurance co#panies etc.; incorporated under ot!er statutes, t!e revised clause will apply to t!e e%tent t!at it does not violate t!eir respective statutes, and guidelines or directives issued by t!e relevant regulatory aut!orities. &!e revised clause is not applicable to t!e *utual Fund Sc!e#es. &!e co#panies w!ic! are re-uired to co#ply wit! t!e re-uire#ents of t!e revised clause 4 s!all sub#it a -uarterly co#pliance report to t!e stoc$ e%c!anges as per sub clause :IA; :ii;, of t!e revised clause 4 , wit!in 1) days fro# t!e -uarter ending (1st *arc! 2004. &!e report s!all be sub#itted eit!er by t!e 3o#pliance 2fficer or t!e 3!ief E%ecutive 2fficer of t!e co#pany after obtaining due approvals. &!e Stoc$ E%c!anges s!all ensure t!at all provisions of corporate governance !ave been co#plied wit! by t!e co#pany see$ing listing for t!e first ti#e, before granting any new listing. For t!is purpose, it will be satisfactory co#pliance if t!ese co#panies !ave set up t!e Boards and constituted co##ittees suc! as 5udit 3o##ittee, s!are!olders1 investors grievances co##ittee etc before see$ing listing. 5 reasonable ti#e to co#ply wit! t!ese conditions #ay be granted only w!ere t!e Stoc$ E%c!ange is satisfied t!at genuine legal issues e%ists w!ic! will delay suc! co#pliance. In suc! cases w!ile granting listing, t!e stoc$ e%c!anges s!all obtain a suitable underta$ing fro# t!e co#pany. In case of t!e co#pany failing to co#ply wit! t!is re-uire#ent wit!out any genuine reason, t!e application #oney s!all be $ept in an escrow account till t!e conditions are co#plied wit!. &!e Stoc$ E%c!anges s!all set up a separate #onitoring cell wit! identified personnel to #onitor t!e co#pliance wit! t!e provisions of t!e corporate governance. &!is cell s!all obtain t!e -uarterly co#pliance report fro# t!e co#panies w!ic! are re-uired to co#ply wit! t!e re-uire#ents of corporate governance and s!all sub#it a consolidated co#pliance report to SEBI wit!in (0 days of t!e end of eac! -uarter.

10. 0lease note t!at t!is is a #aster circular w!ic! contains t!e revised clause 4 as well as ot!er circulars issued by SEBI on t!e sub+ect, suitably #odified. &!e co#panies are re-uired to co#ply wit! t!e provisions of revised clause 4 , on or before *arc! (1, 2004. &!e co#panies s!all continue to co#ply wit! all t!e provisions of clause 4 :issued vide circulars dated, 21st February, 2000, 12t! Septe#ber 2000, 18t! *arc! 2001 and (1st /ece#ber 2001; as well as ot!er circulars dated, t! *arc! 2000 and 22nd 6anuary, 2001, till t!e revised clause 4 of t!e "isting 5gree#ent is co#plied wit! or *arc! (1st 2004, w!ic!ever is earlier.

4ours fait!fully Sd1, B S SC9/5'ES59 ANNEXURE - I

3lause 4 , 3orporate 7overnance


&!e co#pany agrees to co#ply wit! t!e following provisions> I. Board of /irectors

5. 3o#position of Board :i; &!e board of directors of t!e co#pany s!all !ave an opti#u# co#bination of e%ecutive and non,e%ecutive directors wit! not less t!an fifty percent of t!e board of directors co#prising of non,e%ecutive directors. &!e nu#ber of independent directors would depend on w!et!er t!e 3!air#an is e%ecutive or non,e%ecutive. In case of a non,e%ecutive c!air#an, at least one,t!ird of board s!ould co#prise of independent directors and in case of an e%ecutive c!air#an, at least !alf of board s!ould co#prise of independent directors. E%planation :i; > For t!e purpose of t!is clause, t!e e%pression Dindependent directorE s!all #ean non,e%ecutive director of t!e co#pany w!o :a; apart fro# receiving directorEs re#uneration, does not !ave any #aterial pecuniary relations!ips or transactions wit! t!e co#pany, its pro#oters, its senior #anage#ent or its !olding co#pany, its subsidiaries and associated co#paniesF :b; is not related to pro#oters or #anage#ent at t!e board level or at one level below t!e boardF :c; !as not been an e%ecutive of t!e co#pany in t!e i##ediately preceding t!ree financial yearsF :d; is not a partner or an e%ecutive of t!e statutory audit fir# or t!e internal audit fir# t!at is associated wit! t!e co#pany, and !as not been a partner or an e%ecutive of any suc! fir# for t!e last t!ree years. &!is will also apply to legal fir#:s; and consulting fir#:s; t!at !ave a #aterial association wit! t!e entity.

:e; is not a supplier, service provider or custo#er of t!e co#pany. &!is s!ould include lessor,lessee type relations!ips alsoF and :f; is not a substantial s!are!older of t!e co#pany, i.e. owning two percent or #ore of t!e bloc$ of voting s!ares. E%planation :ii;> Institutional directors on t!e boards of co#panies s!all be considered as independent directors w!et!er t!e institution is an investing institution or a lending institution. :B; 9on e%ecutive directorsE co#pensation and disclosures :i; 5ll co#pensation paid to non,e%ecutive directors s!all be fi%ed by t!e Board of /irectors and s!all be approved by s!are!olders in general #eeting. "i#its s!all be set for t!e #a%i#u# nu#ber of stoc$ options t!at can be granted to non,e%ecutive directors in any financial year and in aggregate. &!e stoc$ options granted to t!e non,e%ecutive directors s!all vest after a period of at least one year fro# t!e date suc! non,e%ecutive directors !ave retired fro# t!e Board of t!e 3o#pany. :ii; &!e considerations as regards co#pensation paid to an independent director s!all be t!e sa#e as t!ose applied to a non,e%ecutive director. :iii; &!e co#pany s!all publis! its co#pensation p!ilosop!y and state#ent of entitled co#pensation in respect of non,e%ecutive directors in its annual report. 5lternatively, t!is #ay be put up on t!e co#panyEs website and reference drawn t!ereto in t!e annual report. 3o#pany s!all disclose on an annual basis, details of s!ares !eld by non,e%ecutive directors, including on an Gif,convertedH basis. :iv; 9on,e%ecutive directors s!all be re-uired to disclose t!eir stoc$ !olding :bot! own or !eld by 1 for ot!er persons on a beneficial basis; in t!e listed co#pany in w!ic! t!ey are proposed to be appointed as directors, prior to t!eir appoint#ent. &!ese details s!ould acco#pany t!eir notice of appoint#ent :3; Independent /irector :i; Independent /irector s!all !owever periodically review legal co#pliance reports prepared by t!e co#pany as well as steps ta$en by t!e co#pany to cure any taint. In t!e event of any proceedings against an independent director in connection wit! t!e affairs of t!e co#pany, defence s!all not be per#itted on t!e ground t!at t!e independent director was unaware of t!is responsibility. :ii; &!e considerations as regards re#uneration paid to an independent director s!all be t!e sa#e as t!ose applied to a non e%ecutive director :/; Board 0rocedure :i; &!e board #eeting s!all be !eld at least four ti#es a year, wit! a #a%i#u# ti#e gap of four #ont!s between any two #eetings. &!e #ini#u# infor#ation to be #ade available to t!e board is given in 5nne%ure.I5. :ii; 5 director s!all not be a #e#ber in #ore t!an 10 co##ittees or act as 3!air#an of #ore t!an five co##ittees across all co#panies in w!ic! !e is a director. Furt!er#ore it s!ould be a #andatory annual re-uire#ent for every director to infor# t!e co#pany about t!e co##ittee positions !e occupies in ot!er co#panies and notify c!anges as and w!en t!ey ta$e place. Explanation> For t!e purpose of considering t!e li#it of t!e co##ittees on w!ic! a director can serve, all public li#ited co#panies, w!et!er listed or not, s!all be included and all ot!er co#panies :i e private li#ited co#panies, foreign

co#panies and co#panies under Section 2) of t!e 3o#panies 5ct, etc; s!all be e%cluded. :iii; Furt!er only t!e t!ree co##ittees viI. t!e 5udit 3o##ittee, t!e S!are!oldersE 7rievance 3o##ittee and t!e 'e#uneration 3o##ittee s!all be considered for t!is purpose. :E; 3ode of 3onduct :i; It s!all be obligatory for t!e Board of a co#pany to lay down t!e code of conduct for all Board #e#bers and senior #anage#ent of a co#pany. &!is code of conduct s!all be posted on t!e website of t!e co#pany. :ii; 5ll Board #e#bers and senior #anage#ent personnel s!all affir# co#pliance wit! t!e code on an annual basis. &!e annual report of t!e co#pany s!all contain a declaration to t!is effect signed by t!e 3E2 and 322. E%planation> For t!is purpose, t!e ter# Gsenior #anage#entH s!all #ean personnel of t!e co#pany w!o are #e#bers of its #anage#ent1operating council :i.e. core #anage#ent tea# e%cluding Board of /irectors;. 9or#ally, t!is would co#prise all #e#bers of #anage#ent one level below t!e e%ecutive directors :F; &er# of 2ffice of 9on.e%ecutive directors :i; 0erson s!all be eligible for t!e office of non,e%ecutive director so long as t!e ter# of office did not e%ceed nine years in t!ree ter#s of t!ree years eac!, running continuously. II 5udit 3o##ittee.

5. Jualified and Independent 5udit 3o##ittee 5 -ualified and independent audit co##ittee s!all be set up and s!all co#ply wit! t!e following> :i; &!e audit co##ittee s!all !ave #ini#u# t!ree #e#bers. 5ll t!e #e#bers of audit co##ittee s!all be non,e%ecutive directors, wit! t!e #a+ority of t!e# being independent. :ii; 5ll #e#bers of audit co##ittee s!all be financially literate and at least one #e#ber s!all !ave accounting or related financial #anage#ent e%pertise. E%planation :i; > &!e ter# Gfinancially literateH #eans t!e ability to read and understand basic financial state#ents i.e. balance s!eet, profit and loss account, and state#ent of cas! flows. E%planation :ii; > 5 #e#ber will be considered to !ave accounting or related financial #anage#ent e%pertise if !e or s!e possesses e%perience in finance or accounting, or re-uisite professional certification in accounting, or any ot!er co#parable e%perience or bac$ground w!ic! results in t!e individualEs financial sop!istication, including being or !aving been a c!ief e%ecutive officer, c!ief financial officer, or ot!er senior officer wit! financial oversig!t responsibilities. :iii; &!e 3!air#an of t!e 3o##ittee s!all be an independent directorF :iv; &!e 3!air#an s!all be present at 5nnual 7eneral *eeting to answer s!are!older -ueriesF :v; &!e audit co##ittee s!ould invite suc! of t!e e%ecutives, as it considers appropriate :and particularly t!e !ead of t!e finance function; to be present at t!e #eetings of t!e co##ittee, but on occasions it #ay also #eet wit!out t!e presence of any e%ecutives of t!e co#pany. &!e finance director, !ead of

internal audit and w!en re-uired, a representative of t!e e%ternal auditor s!all be present as invitees for t!e #eetings of t!e audit co##itteeF :vi; &!e 3o#pany Secretary s!all act as t!e secretary to t!e co##ittee. :B; *eeting of 5udit 3o##ittee &!e audit co##ittee s!all #eet at least t!rice a year. 2ne #eeting s!all be !eld before finaliIation of annual accounts and one every si% #ont!s. &!e -uoru# s!all be eit!er two #e#bers or one t!ird of t!e #e#bers of t!e audit co##ittee, w!ic!ever is !ig!er and #ini#u# of two independent directors. :3; 0owers of 5udit 3o##ittee &!e audit co##ittee s!all !ave powers w!ic! s!ould include t!e following> 1. &o investigate any activity wit!in its ter#s of reference. 2. &o see$ infor#ation fro# any e#ployee. (. &o obtain outside legal or ot!er professional advice. 4. &o secure attendance of outsiders wit! relevant e%pertise, if it considers necessary. :/; 'ole of 5udit 3o##ittee :i; &!e role of t!e audit co##ittee s!all include t!e following> 1. 2versig!t of t!e co#panyEs financial reporting process and t!e disclosure of its financial infor#ation to ensure t!at t!e financial state#ent is correct, sufficient and credible. 2. 'eco##ending t!e appoint#ent and re#oval of e%ternal auditor, fi%ation of audit fee and also approval for pay#ent for any ot!er services. (. 'eviewing wit! #anage#ent t!e annual financial state#ents before sub#ission to t!e board, focusing pri#arily onF :a; 5ny c!anges in accounting policies and practices. :b; *a+or accounting #anage#ent. entries based on e%ercise of +udg#ent by

:c; Jualifications in draft audit report. :d; Significant ad+ust#ents arising out of audit. :e; &!e going concern assu#ption. :f; 3o#pliance wit! accounting standards. :g; 3o#pliance wit! stoc$ e%c!ange and legal re-uire#ents concerning financial state#ents :!; 5ny related party transactions 4. 'eviewing wit! t!e #anage#ent, e%ternal and internal auditors, t!e ade-uacy of internal control syste#s. ). 'eviewing t!e ade-uacy of internal audit function, including t!e structure of t!e internal audit depart#ent, staffing and seniority of t!e official !eading t!e depart#ent, reporting structure coverage and fre-uency of internal audit. 8. /iscussion wit! internal auditors any significant findings and follow up t!ere on.

@. 'eviewing t!e findings of any internal investigations by t!e internal auditors into #atters w!ere t!ere is suspected fraud or irregularity or a failure of internal control syste#s of a #aterial nature and reporting t!e #atter to t!e board. =. /iscussion wit! e%ternal auditors before t!e audit co##ences about nature and scope of audit as well as post,audit discussion to ascertain any area of concern. . 'eviewing t!e co#panyEs financial and ris$ #anage#ent policies. 10. &o loo$ into t!e reasons for substantial defaults in t!e pay#ent to t!e depositors, debenture !olders, s!are!olders :in case of non pay#ent of declared dividends; and creditors. E%planation :i;> &!e ter# Grelated party transactionsH s!all !ave t!e sa#e #eaning as contained in t!e 5ccounting Standard 1=, 'elated 0arty &ransactions, issued by &!e Institute of 3!artered 5ccountants of India. E%planation :ii;> If t!e co#pany !as set up an audit co##ittee pursuant to provision of t!e 3o#panies 5ct, t!e co#pany agrees t!at t!e said audit co##ittee s!all !ave suc! additional functions 1 features as is contained in t!e "isting 5gree#ent. :E; 'eview of infor#ation by 5udit 3o##ittee :i; &!e 5udit 3o##ittee s!all #andatorily review t!e following infor#ation> 1. Financial state#ents and draft audit report, including -uarterly 1 !alf, yearly financial infor#ationF 2. *anage#ent discussion and analysis of financial condition and results of operationsF (. 'eports relating to co#pliance wit! laws and to ris$ #anage#entF 4. *anage#ent letters 1 letters of internal control wea$nesses issued by statutory 1 internal auditorsF and ). 'ecords of related party transactions 8. &!e appoint#ent, re#oval and ter#s of re#uneration of t!e 3!ief internal auditor s!all be sub+ect to review by t!e 5udit 3o##ittee III. 5udit 'eports and 5udit Jualifications 5. /isclosure of 5ccounting &reat#ent In case it !as followed a treat#ent different fro# t!at prescribed in an 5ccounting Standards, #anage#ent s!all +ustify w!y t!ey believe suc! alternative treat#ent is #ore representative of t!e underlined business transactions. *anage#ent s!all also clearly e%plain t!e alternative accounting treat#ent in t!e footnote of financial state#ents. IB. K!istle Blower 0olicy :5; Internal 0olicy on access to 5udit 3o##ittees> :i; 0ersonnel w!o observe an unet!ical or i#proper practice :not necessarily a violation of law; s!all be able to approac! t!e audit co##ittee wit!out necessarily infor#ing t!eir supervisors. :ii; 3o#panies s!all ta$e #easures to ensure t!at t!is rig!t of access is co##unicated to all e#ployees t!roug! #eans of internal circulars, etc. &!e

e#ploy#ent and ot!er personnel policies of t!e co#pany s!all contain provisions protecting Gw!istle blowersH fro# unfair ter#ination and ot!er unfair or pre+udicial e#ploy#ent practices. :iii; 3o#pany s!all annually affir# t!at it !as not denied any personnel access to t!e audit co##ittee of t!e co#pany :in respect of #atters involving alleged #isconduct; and t!at it !as provided protection to Gw!istle blowersH fro# unfair ter#ination and ot!er unfair or pre+udicial e#ploy#ent practices. :iv; Suc! affir#ation s!all for# a part of t!e Board report on 3orporate 7overnance t!at is re-uired to be prepared and sub#itted toget!er wit! t!e annual report. :v; &!e appoint#ent, re#oval and ter#s of re#uneration of t!e c!ief internal auditor s!all be sub+ect to review by t!e 5udit 3o##ittee. B. Subsidiary 3o#panies :i; &!e co#pany agrees t!at provisions relating to t!e co#position of t!e Board of /irectors of t!e !olding co#pany s!all be #ade applicable to t!e co#position of t!e Board of /irectors of subsidiary co#panies. :ii; 5t least one independent director on t!e Board of /irectors of t!e !olding co#pany s!all be a director on t!e Board of /irectors of t!e subsidiary co#pany. :iii; &!e 5udit 3o##ittee of t!e !olding co#pany s!all also review t!e financial state#ents, in particular t!e invest#ents #ade by t!e subsidiary co#pany. :iv; &!e #inutes of t!e Board #eetings of t!e subsidiary co#pany s!all be placed for review at t!e Board #eeting of t!e !olding co#pany. :v; &!e Board report of t!e !olding co#pany s!ould state t!at t!ey !ave reviewed t!e affairs of t!e subsidiary co#pany also. BI. /isclosure of contingent liabilities :i; &!e co#pany agrees t!at #anage#ent s!all provide a clear description in plain Englis! of eac! #aterial contingent liability and its ris$s, w!ic! s!all be acco#panied by t!e auditorEs clearly worded co##ents on t!e #anage#entEs view. &!is section s!all be !ig!lig!ted in t!e significant accounting policies and notes on accounts, as well as, in t!e auditorEs report, w!ere necessary. BII. /isclosures :5; Basis of related party transactions :i; 5 state#ent of all transactions wit! related parties including t!eir basis s!all be placed before t!e 5udit 3o##ittee for for#al approval1ratification. If any transaction is not on an ar#Es lengt! basis, #anage#ent s!all provide an e%planation to t!e 5udit 3o##ittee +ustifying t!e sa#e. :B; Board /isclosures .'is$ #anage#ent :i; It s!all put in place procedures to infor# Board #e#bers about t!e ris$ assess#ent and #ini#iIation procedures. &!ese procedures s!all be periodically reviewed to ensure t!at e%ecutive #anage#ent controls ris$ t!roug! #eans of a properly defined fra#ewor$.

:ii; *anage#ent s!all place a report certified by t!e co#pliance officer of t!e co#pany, before t!e entire Board of /irectors every -uarter docu#enting t!e business ris$s faced by t!e co#pany, #easures to address and #ini#iIe suc! ris$s, and any li#itations to t!e ris$ ta$ing capacity of t!e corporation. &!is docu#ent s!all be for#ally approved by t!e Board.

:3; 0roceeds fro# Initial 0ublic 2fferings :I02s; :i; K!en #oney is raised t!roug! an Initial 0ublic 2ffering :I02; it s!all disclose to t!e 5udit 3o##ittee, t!e uses 1 applications of funds by #a+or category :capital e%penditure, sales and #ar$eting, wor$ing capital, etc;, on a -uarterly basis as a part of t!eir -uarterly declaration of financial results. Furt!er, on an annual basis, t!e co#pany s!all prepare a state#ent of funds utiliIed for purposes ot!er t!an t!ose stated in t!e offer docu#ent1prospectus. &!is state#ent s!all be certified by t!e independent auditors of t!e co#pany. &!e audit co##ittee s!all #a$e appropriate reco##endations to t!e Board to ta$e up steps in t!is #atter. :/; 'e#uneration of /irectors :a; 5ll pecuniary relations!ip or transactions of t!e non,e%ecutive directorEs vis,a, vis t!e co#pany s!all be disclosed in t!e 5nnual 'eport. :ii; Furt!er t!e following disclosures on t!e re#uneration of directors s!all be #ade in t!e section on t!e corporate governance of t!e annual report. :a; 5ll ele#ents of re#uneration pac$age of all t!e directors i.e. salary, benefits, bonuses, stoc$ options, pension etc. :b; /etails of fi%ed co#ponent and perfor#ance lin$ed incentives, along wit! t!e perfor#ance criteria. :c; Service contracts, notice period, severance fees. :d; Stoc$ option details, if any . and w!et!er issued at a discount as well as t!e period over w!ic! accrued and over w!ic! e%ercisable. :E; *anage#ent :i; 5s part of t!e directorsE report or as an addition t!ere to, a *anage#ent /iscussion and 5nalysis report s!ould for# part of t!e annual report to t!e s!are!olders. &!is *anage#ent /iscussion L 5nalysis s!ould include discussion on t!e following #atters wit!in t!e li#its set by t!e co#panyEs co#petitive position> :a; Industry structure and develop#ents. :b; 2pportunities and &!reats. :c; Seg#ent.wise or product,wise perfor#ance. :d; 2utloo$. :e; 'is$s and concerns. :f; Internal control syste#s and t!eir ade-uacy. :g; /iscussion on financial perfor#ance wit! respect to operational perfor#ance. :!; *aterial develop#ents in ?u#an 'esources 1 Industrial 'elations front, including nu#ber of people e#ployed. *anage#ent s!all #a$e disclosures to t!e board relating to all #aterial financial and co##ercial transactions, w!ere t!ey !ave personal interest, t!at #ay !ave a potential conflict wit! t!e interest of t!e co#pany at large :for e.g. dealing in co#pany s!ares, co##ercial dealings wit! bodies, w!ic! !ave s!are!olding of #anage#ent and t!eir relatives etc.; :F; S!are!olders :i; In case of t!e appoint#ent of a new director or re,appoint#ent of a director t!e s!are!olders #ust be provided wit! t!e following infor#ation>

:a; 5 brief resu#e of t!e directorF :b; 9ature of !is e%pertise in specific functional areasF and :c; 9a#es of co#panies in w!ic! t!e person also !olds t!e directors!ip and t!e #e#bers!ip of 3o##ittees of t!e board. :ii; Infor#ation li$e -uarterly results, presentation #ade by co#panies to analysts s!all be put on co#panyEs web,site, or s!all be sent in suc! a for# so as to enable t!e stoc$ e%c!ange on w!ic! t!e co#pany is listed to put it on its own web,site. :iii; 5 board co##ittee under t!e c!air#ans!ip of a non,e%ecutive director s!all be for#ed to specifically loo$ into t!e reressal of s!are!older and investors co#plaints li$e transfer of s!ares, non,receipt of balance s!eet, non,receipt of declared dividends etc. &!is 3o##ittee s!all be designated as DS!are!olders1Investors 7rievance 3o##itteeE. :iv; &o e%pedite t!e process of s!are transfers t!e board of t!e co#pany s!all delegate t!e power of s!are transfer to an officer or a co##ittee or to t!e registrar and s!are transfer agents. &!e delegated aut!ority s!all attend to s!are transfer for#alities at least once in a fortnig!t. BIII. 3E213F2 certification :i; 3E2 :eit!er t!e E%ecutive 3!air#an or t!e *anaging /irector; and t!e 3F2 :w!ole,ti#e Finance /irector or ot!er person disc!arging t!is function; of t!e co#pany s!all certify t!at, to t!e best of t!eir $nowledge and belief> :a; &!ey !ave reviewed t!e balance s!eet and profit and loss account and all its sc!edules and notes on accounts, as well as t!e cas! flow state#ents and t!e /irectorsE 'eportF :b; &!ese state#ents do not contain any #aterially untrue state#ent or o#it any #aterial fact nor do t!ey contain state#ents t!at #ig!t be #isleadingF :c; &!ese state#ents toget!er present a true and fair view of t!e co#pany, and are in co#pliance wit! t!e e%isting accounting standards and 1 or applicable laws 1 regulationsF :d; &!ey are responsible for establis!ing and #aintaining internal controls and !ave evaluated t!e effectiveness of internal control syste#s of t!e co#panyF and t!ey !ave also disclosed to t!e auditors and t!e 5udit 3o##ittee, deficiencies in t!e design or operation of internal controls, if any, and w!at t!ey !ave done or propose to do to rectify t!eseF :e; &!ey !ave also disclosed to t!e auditors as well as t!e 5udit 3o##ittee, instances of significant fraud, if any, t!at involves #anage#ent or e#ployees !aving a significant role in t!e co#panyEs internal control syste#sF and :f; &!ey !ave indicated to t!e auditors, t!e 5udit 3o##ittee and in t!e notes on accounts, w!et!er or not t!ere were significant c!anges in internal control and 1 or of accounting policies during t!e year. IA. 'eport on 3orporate 7overnance :i; &!ere s!all be a separate section on 3orporate 7overnance in t!e annual reports of co#pany, wit! a detailed co#pliance report on 3orporate 7overnance. 9on, co#pliance of any #andatory re-uire#ent i.e. w!ic! is part of t!e listing agree#ent wit! reasons t!ereof and t!e e%tent to w!ic! t!e non,#andatory re-uire#ents !ave been adopted s!ould be specifically !ig!lig!ted. &!e suggested list of ite#s to be included in t!is report is given in 5nne%ure,1B and list of non,#andatory re-uire#ents is given in 5nne%ure .13.

:ii; &!e co#panies s!all sub#it a -uarterly co#pliance report to t!e stoc$ e%c!anges wit!in 1) days fro# t!e close of -uarter as per t!e for#at given below. &!e report s!all be sub#itted eit!er by t!e 3o#pliance 2fficer or t!e 3!ief E%ecutive 2fficer of t!e co#pany after obtaining due approvals. For#at of Juarterly 3o#pliance 'eport on 3orporate 7overnance 9a#e of t!e 3o#pany> Juarter ending on> Particulars Remarks (Yes/No/N.A. ! $ I. Board of Directors :5; 3o#position of Board :B; 9on,e%ecutive /irectorsE co#pensation L disclosures :3; Independent /irector :/; Board 0rocedure :E; 3ode of 3onduct :F; &er# of office of non,e%ecutive directors II. Audit Committee :5; Jualified L Independent 5udit 3o##ittee :B; *eeting of 5udit 3o##ittee :3; 0owers of 5udit 3o##ittee :/; 'ole of 5udit 3o##ittee :E; 'eview of Infor#ation by 5udit 3o##ittee III. 5udit 'eports and 5udit Jualifications IV. Whistle Blower Policy V. Su sidiary Companies VI. Disclosure of contin!ent lia ilities VII. Disclosures :5; Basis of related party transactions :B; Board /isclosures :3; 0roceeds fro# Initial 0ublic offerings :/; 'e#uneration of /irectors :E; *anage#ent :F; S!are!olders VIII.CE"#C$" Certification I%. &eport on Corporate 'o(ernance %. Compliance 9ote> :BIIE; 4 :BIIF; 4 :BIII; 4 :IA; 4 :A; :BIIB; 4 :BII3; 4 :BII/; :II; :II5; :IIB; :II3; II:/; 4 :IIE; 4 :III; 4 :IB; 4 :B; 4 :BI; 4 :BII; :II 5; :IE; 4 :IF; :IB; :I3; :I/; 4 I 4 :I5; Clause of Compliance status Listing Agreement #

"

:1; &!e details under eac! !ead s!all be provided to incorporate all t!e infor#ation re-uired as per t!e provisions of t!e clause 4 of t!e "isting 5gree#ent. :2; In t!e colu#n 9o.(, co#pliance or non,co#pliance #ay be indicated by 4es19o19.5.. For e%a#ple, if t!e Board !as been co#posed in accordance wit! t!e clause 4 I of t!e "isting 5gree#ent, G4esH #ay be indicated. Si#ilarly, in case t!e co#pany !as not co#e out wit! an I02, t!e words G9.5.H #ay be indicated against 4 :BII3;. :(; In t!e re#ar$s colu#n, reasons for non,co#pliance #ay be indicated, for e%a#ple, in case of re-uire#ent related to circulation of infor#ation to t!e s!are!olders, w!ic! would be done only in t!e 57*1E7*, it #ig!t be indicated in t!e G'e#ar$sH colu#n as . Gwill be co#plied wit! at t!e 57*H. Si#ilarly, in respect of #atters w!ic! can be co#plied wit! only w!ere t!e situation arises, for e%a#ple, G'eport on 3orporate 7overnanceH is to be a part of 5nnual 'eport only, t!e words Gwill be co#plied in t!e ne%t 5nnual 'eportH #ay be indicated. A. 3o#pliance &!e co#pany s!all obtain a certificate fro# eit!er t!e auditors or practicing co#pany secretaries regarding co#pliance of conditions of corporate governance as stipulated in t!is clause and anne% t!e certificate wit! t!e directorsE report, w!ic! is sent annually to all t!e s!are!olders of t!e co#pany. &!e sa#e certificate s!all also be sent to t!e Stoc$ E%c!anges along wit! t!e annual returns filed by t!e co#pany. Sc%e&ule of implementation :1; &!e provisions of t!e revised clause 4 sc!edule of i#ple#entation given below> :i; :ii; s!all be i#ple#ented as per t!e

By all entities see$ing listing for t!e first ti#e, at t!e ti#e of listing. By all co#panies w!ic! were re-uired to co#ply wit! t!e re-uire#ent of t!e erstw!ile clause 4 i.e. all listed entities !aving a paid up s!are capital of 's ( crores and above or net wort! of 's 2) crores or #ore at any ti#e in t!e !istory of t!e entity. &!ese entities s!all be re-uired to co#ply wit! t!e re-uire#ent of t!is clause on or before *arc! (1, 2004.

:2; &!e non,#andatory re-uire#ent given in 5nne%ure . 13 s!all be i#ple#ented as per t!e discretion of t!e co#pany. ?owever, t!e disclosures of t!e adoption1non,adoption of t!e non,#andatory re-uire#ents s!all be #ade in t!e section on corporate governance of t!e 5nnual 'eport.

end

e*!+es
Annexure 1A

Infor#ation to be placed before Board of /irectors 1. 5nnual operating plans and budgets and any updates.

2. 3apital budgets and any updates. (. Juarterly results for t!e co#pany and its operating divisions or business seg#ents. 4. *inutes of #eetings of audit co##ittee and ot!er co##ittees of t!e board. ). &!e infor#ation on recruit#ent and re#uneration of senior officers +ust below t!e board level, including appoint#ent or re#oval of 3!ief Financial 2fficer and t!e 3o#pany Secretary. 8. S!ow cause, de#and, prosecution notices and penalty notices w!ic! are #aterially i#portant. @. Fatal or serious accidents, dangerous occurrences, any #aterial effluent or pollution proble#s. =. 5ny #aterial default in financial obligations to and by t!e co#pany, or substantial non,pay#ent for goods sold by t!e co#pany. . 5ny issue, w!ic! involves possible public or product liability clai#s of substantial nature, including any +udge#ent or order w!ic!, #ay !ave passed strictures on t!e conduct of t!e co#pany or ta$en an adverse view regarding anot!er enterprise t!at can !ave negative i#plications on t!e co#pany. 10. /etails of any +oint venture or collaboration agree#ent. 11. &ransactions t!at involve substantial pay#ent towards goodwill, brand e-uity, or intellectual property.

12. Significant labour proble#s and t!eir proposed solutions. 5ny significant develop#ent in ?u#an 'esources1 Industrial 'elations front li$e signing of wage agree#ent, i#ple#entation of Boluntary 'etire#ent Sc!e#e etc. 1(. Sale of #aterial nature, of invest#ents, subsidiaries, assets, w!ic! is not in nor#al course of business. 14. Juarterly details of foreign e%c!ange e%posures and t!e steps ta$en by #anage#ent to li#it t!e ris$s of adverse e%c!ange rate #ove#ent, if #aterial. 1). 9on,co#pliance of any regulatory, statutory nature or listing re-uire#ents and s!are!olders service suc! as non,pay#ent of dividend, delay in s!are transfer etc. Annexure 1B Suggested "ist of Ite#s to Be Included In t!e 'eport on 3orporate 7overnance in t!e 5nnual 'eport of 3o#panies 1. 5 brief state#ent on co#panyEs p!ilosop!y on code of governance. 2. Board of /irectors> :i; 3o#position and category of directors, for e%a#ple, pro#oter, e%ecutive, non, e%ecutive, independent non,e%ecutive, no#inee director, w!ic! institution represented as lender or as e-uity investor. :ii; 5ttendance of eac! director at t!e Bo/ #eetings and t!e last 57*. :iii; 9u#ber of ot!er Bo/s or Board 3o##ittees in w!ic! !e1s!e is a #e#ber or 3!airperson. :iv; 9u#ber of Bo/ #eetings !eld, dates on w!ic! !eld. (. 5udit 3o##ittee. :i; Brief description of ter#s of reference :ii; 3o#position, na#e of #e#bers and 3!airperson :iii; *eetings and attendance during t!e year 4. 'e#uneration 3o##ittee. :i; Brief description of ter#s of reference :ii; 3o#position, na#e of #e#bers and 3!airperson :iii; 5ttendance during t!e year :iv; 'e#uneration policy :v; /etails of re#uneration to all t!e directors, as per for#at in #ain report. ). S!are!olders 3o##ittee. :i; 9a#e of non,e%ecutive director !eading t!e co##ittee :ii; 9a#e and designation of co#pliance officer :iii; 9u#ber of s!are!oldersE co#plaints received so far :iv; 9u#ber not solved to t!e satisfaction of s!are!olders :v; 9u#ber of pending co#plaints 8. 7eneral Body #eetings. :i; "ocation and ti#e, w!ere last t!ree 57*s !eld. :ii; K!et!er any special resolutions passed in t!e previous ( 57*s

:iii; K!et!er any special resolution passed last year t!roug! postal ballot . details of voting pattern :iv; 0erson w!o conducted t!e postal ballot e%ercise :v; K!et!er any special resolution is proposed to be conducted t!roug! postal ballot :vi; 0rocedure for postal ballot @. /isclosures. :i; /isclosures on #aterially significant related party transactions t!at #ay !ave potential conflict wit! t!e interests of co#pany at large. :ii; /isclosure of accounting treat#ent, if different, fro# t!at prescribed in 5ccounting standards wit! e%planation. :iii; /etails of non,co#pliance by t!e co#pany, penalties, strictures i#posed on t!e co#pany by Stoc$ E%c!ange or SEBI or any statutory aut!ority, on any #atter related to capital #ar$ets, during t!e last t!ree years. :iv; K!istle Blower policy and affir#ation t!at no personnel !as been denied access to t!e audit co##ittee. =. *eans of co##unication. :i; ?alf,yearly report sent to eac! !ouse!old of s!are!olders. :ii; Juarterly results :iii; 9ewspapers w!erein results nor#ally publis!ed :iv; 5ny website, w!ere displayed :v; K!et!er it also displays official news releasesF and :vi; &!e presentations #ade to institutional investors or to t!e analysts. :vii; K!et!er */L5 is a part of annual report or not. . 7eneral S!are!older infor#ation :i; 57* > /ate, ti#e and venue :ii; Financial 3alendar :iii; /ate of Boo$ closure :iv; /ividend 0ay#ent /ate :v; "isting on Stoc$ E%c!anges :vi; Stoc$ 3ode :vii; *ar$et 0rice /ata > ?ig!., "ow during eac! #ont! in last financial year :viii; 0erfor#ance in co#parison to broad,based indices suc! as BSE Sense%, 3'ISI" inde% etc. :i%; 'egistrar and &ransfer 5gents :%; S!are &ransfer Syste# :%i; /istribution of s!are!olding :%ii; /e#aterialiIation of s!ares and li-uidity :%iii; 2utstanding 7/'s15/'s1Karrants or any 3onvertible instru#ents, conversion date and li$ely i#pact on e-uity :%iv; 0lant "ocations :%v; 5ddress for correspondence Annexure 1C 9on,*andatory 'e-uire#ents

1. 3!air#an of t!e Board 5 non,e%ecutive 3!air#an s!ould be entitled to #aintain a 3!air#anEs office at t!e co#panyEs e%pense and also allowed rei#burse#ent of e%penses incurred in perfor#ance of !is duties. 2. 'e#uneration 3o##ittee :i; &!e board s!ould set up a re#uneration co##ittee to deter#ine on t!eir be!alf and on be!alf of t!e s!are!olders wit! agreed ter#s of reference, t!e co#panyEs policy on specific re#uneration pac$ages for e%ecutive directors including pension rig!ts and any co#pensation pay#ent. :ii; &o avoid conflicts of interest, t!e re#uneration co##ittee, w!ic! would deter#ine t!e re#uneration pac$ages of t!e e%ecutive directors s!ould co#prise of at least t!ree directors, all of w!o# s!ould be non,e%ecutive directors, t!e c!air#an of co##ittee being an independent director. :iii; 5ll t!e #e#bers of t!e re#uneration co##ittee s!ould be present at t!e #eeting. :iv; &!e 3!air#an of t!e re#uneration co##ittee s!ould be present at t!e 5nnual 7eneral *eeting, to answer t!e s!are!older -ueries. ?owever, it would be up to t!e 3!air#an to decide w!o s!ould answer t!e -ueries. (. S!are!older 'ig!ts &!e !alf,yearly declaration of financial perfor#ance including su##ary of t!e significant events in last si%,#ont!s, s!ould be sent to eac! !ouse!old of s!are!olders. ). Postal Ballot 3urrently, t!oug! t!ere is re-uire#ent for !olding t!e general #eeting of s!are!olders, in actual practice only a s#all fraction of t!e s!are!olders of t!at co#pany do or can really participate t!erein. &!is virtually #a$es t!e concept of corporate de#ocracy illusory. It is i#perative t!at t!is situation w!ic! !as lasted too long needs an early correction. In t!is conte%t, for s!are!olders w!o are unable to attend t!e #eetings, t!ere s!ould be a re-uire#ent w!ic! will enable t!e# to vote by postal ballot for $ey decisions. So#e of t!e critical #atters w!ic! s!ould be decided by postal ballot are given below> :i; *atters relating to alteration in t!e #e#orandu# of association of t!e co#pany li$e c!anges in na#e, ob+ects, address of registered office etcF :ii; Sale of w!ole or substantially t!e w!ole of t!e underta$ingF :a; Sale of invest#ents in t!e co#panies, w!ere t!e s!are!olding or t!e voting rig!ts of t!e co#pany e%ceeds 2)MF :b; *a$ing a furt!er issue of s!ares t!roug! preferential allot#ent or private place#ent basisF :c; 3orporate restructuringF :d; Entering a new business area not ger#ane to t!e e%isting business of t!e co#panyF :e; Bariation in rig!ts attac!ed to class of securitiesF :f; *atters relating to c!ange in #anage#ent. ). 5udit -ualifications 3o#pany #ay #ove towards a regi#e of un-ualified financial state#ents. 8. &raining of Board *e#bers

3o#pany s!all train its Board #e#bers in t!e business #odel of t!e co#pany as well as t!e ris$ profile of t!e business para#eters of t!e co#pany, t!eir responsibilities as directors, and t!e best ways to disc!arge t!e#. @. *ec!anis# for evaluating non,e%ecutive Board *e#bers &!e perfor#ance evaluation of non,e%ecutive directors s!ould be done by a peer group co#prising t!e entire Board of /irectors, e%cluding t!e director being evaluatedF and 0eer 7roup evaluation s!ould be t!e #ec!anis# to deter#ine w!et!er to e%tend1 continue t!e ter#s of appoint#ent of non,e%ecutive directors.