Financial Resource

/>COMMITTEES OF THE BOARD

Audit Committee

The Audit Committee of the Company is entrusted with the responsibility to supervise the Company’s internal control and financial reporting process. The Audit Committee also looks into controls and security of the Company’s critical IT applications,

Remuneration and Compensation Committee

The Remuneration Committee is vested with all the necessary powers and authority to ensure appropriate disclosure on the remuneration of whole-time Directors and to deal with all the elements of remuneration package of all such Directors within the limits approved by the members of the Company. The Compensation Committee administers the stock option plan of the Company.

Shareholder/Investor Grievances Committee

The Committee specifically looks into redressing of investors’ complaints with respect to transfer of shares, non-receipt of shares, non-receipt of declared dividends and ensure expeditious share transfer process. The Committee also monitors and reviews the performance and service standards of the Registrar and Share Transfer Agents of the Company and provides continuous guidance to improve the service levels for investors..

Other Functional Committees

Apart from the above statutory committees, the Board of Directors have constituted other functional committees such as committee for approving disposal of surplus assets of the Company, committee for allotment of shares under ESOP to raise the level of governance as also to meet the specific business needs.

6.HDFC BANK:

Introduction

This Code of Ethics / Conduct intends to ensure adherence to highest business and ethical standards while conducting the business of the Bank and compliance with the legal and regulatory requirements, including compliance of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and regulations framed thereunder by the Securities and Exchange Commission of USA and other statutory and regulatory authorities in India and USA. The Bank values the ethical business standards very highly and intends adherence thereto in every segment of its business.

Applicability

This Code of Ethics/Conduct is applicable to the following persons.

§                       The Board Members

Officials of the Bank one level below the Board

Ethical Conduct

The Board members / Officials shall engage in and promote honest and ethical conduct of business, including the ethical handling of actual and / or apparent conflicts of interest between personal and professional relationships.

Conflict of Interest

The Board members / Officials shall avoid conflict of interest and disclose to the Board any material transaction or relationship that reasonably could be expected to give rise to such a conflict.

Confidentiality of Information

The Board members / Officials shall ensure and take all reasonable measures to protect the confidentiality of non-public information about the Bank, its business, customers and other materially significant information obtained or created in connection with any activities with the Bank and to prevent the unauthorised disclosure of such information unless required by applicable laws or regulations or legal or regulatory process.

Disclosure of Information

The Board members / Officials shall endeavor to produce full, fair, accurate, timely and understandable disclosures in reports and documents that the Bank files with or submits to the Securities and Exchange Commission and other regulators and in other public communications made by the Bank

Compliance with Governmental Laws, Rules and Regulations

The Board members / Officials shall comply with all the applicable governmental laws and the applicable rules and regulations.

Variation of the Code and Waivers

The Code shall be reviewed from time to time for updation thereof. Any variation in the Code or any waivers from the provisions of the Code shall be approved by the Board and shall be disclosed on the Bank’s website.

Contract or Term of Employment

Nothing in this Code or other related communications by itself creates or implies an employment contract or terms of employment.

Violation of the Code

The Board shall have the powers to take necessary action in case of any violation of the code.

 

 

II . Corporate Governance in Public sector Companies

 

Keeping in view the importance and role of independent directors in the good

governance of companies, a review was undertaken in respect of all listed government

companies with the objective of assessing the compliance with the provisions of Clause 49 of

the Listing Agreement relating to independent directors on the Board. This review was

primarily based on the information and documents obtained from the Management of the

companies concerned. The review of composition of the Board as on 30 June 2007 of all the

44 Listed government companies (excluding five deemed government companies covered by

Section 619B of the Companies Act, 1956) revealed the following:

(i)

There were no independent directors on the Board of nine listed government

companies given below:.

S. No                                Name of the company

1              Minerals and Metals Trading Corporation Ltd.

2             State Trading Corporation Ltd.

3             Container Corporation of India Ltd.

4             Hindustan Copper Ltd.

5              National Aluminum Co. Ltd.

6             Balmer Lawrie Co. Ltd.

7            Hindustan Cables Ltd.

8             Madras Fertilizers Ltd.

9             The Fertilizers and Chemicals Travancore Ltd.

(ii)

In 21 listed government companies, the Board did not have the required number of independent directors.

Thus, out of 44 listed government companies, the Board of 30 companies had not been

constituted as per clause 49 of the Listing Agreement.

Constitution and composition of Audit Committee in listed government

companies

Audit Committee is by far the most important working committee of the Board in the

case of a government company with an extensive role in ensuring proper financial reporting and adequacy of internal controls over such reporting. The role of Audit Committees in government companies is closely aligned to C&AG’s constitutional and statutory role in promoting fairness and transparency in financial reporting. A limited review was accordingly undertaken in respect of listed government companies with the objective of assessing the  compliance by these companies with various provisions of clause 49 of the Listing Agreement relating to constitution and composition of the Audit Committee. This review was primarily based on the information and documents obtained from the Management of the  companies concerned.

 

As required by Clause 49 of the Listing agreement, the Audit Committee should have

minimum three directors as member and two thirds of which should be independent directors. As on 30 June 2007, in listed government companies revealed that an Audit Committee  existed in all listed government companies. However, the following non-compliances were  noticed with respect to composition of Audit Committee:

(a)

In the following seven government companies , the Audit Committee did not consist

of required number of independent directors:

1.India Tourism Development Corporation Ltd

.2 National Fertilizers Ltd.

 3.Mangalore Refinery and Petrochemicals Ltd.

 4.Hindustan Photo Films Mfg. Co. Ltd.

 5.Dredging Corporation of India Ltd.

 6.Hindustan Fluorocarbons Ltd.

 7.Mahanagar Telephone Nigam Ltd.

 

 (b)There was no independent director in the Audit Committee of nine listed government

companies as mentioned in para 3.5.2(i) and also in case of IRCON International Ltd.

(c) Though the Board of Bharat Immunological Biologicals Corporation Ltd. consisted of

required number of independent directors, the Audit Committee did not consist of two thirds

independent directors as there was only one independent director out of three directors.

 

(d) In case of Neyveli Lignite Corporation Limited, there was only one independent

director, as on 31 March 2007, on the Audit Committee of four members. The compliance

with Clause 49 of the Listing Agreement was made only on 1 June 2007 by induction of three

independent directors on the Audit Committee.

(e) There was no Audit Committee during 2006-07 in case of Hindustan Organics

Chemicals Ltd. However, the Committee was constituted by the Company on 28 May 2007.

 

Thus, the Audit Committee of 18 Central Government listed company had not been

constituted as per Clause 49 of the Listing Agreement.

 

Non-official Directors on the Board of unlisted government companies

The DPE’s guideline on composition of Board of Directors of CPSEs issued in

March, 1992 require that at least one-third of the Directors on the Board of a CPSE should

consist of non official directors. A limited

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