Revised language – Explanation (i)(e) to clause I.A
Explanation (i): For the purpose of this clause, the expression ‘independent director’ shall mean non-executive director of the company who:

1. apart from receiving director’s remuneration, does not have, in the opinion of the board, any material pecuniary relationships or transactions with the company, its promoters, its senior management or its holding company, its subsidiaries and associated companies which in the judgment of the board may affect independence of judgment of the director;

2. is not related to promoters or management at the board level or at one level below the board

3. has not been an executive of the company in the immediately preceding three financial years;

4. is not a partner or an executive of the statutory audit firm or the internal audit firm that is associated with the company, and has not been a partner or an executive of any such firm for the last three years. This will also apply to legal firm(s) and consulting firm(s) that have a material association with the entity.

5. is not, in the opinion of the board, a material supplier, service provider or customer of the company, which in the judgment of the board may affect independence of judgment of the director". This should include lessor-lessee type relationships also; and

6. is not a substantial shareholder of the company, i.e. owning two percent or more of the block of voting shares.

Note:
For the purposes of this clause

1. Associated company shall mean a company which is an "associate" as defined in Accounting Standard (AS) 23, "Accounting for Investments in Associates in Consolidated Financial Statements", issued by the Institute of Chartered Accountants of India.

2. Senior management shall have the meaning as prescribed in the explanation to clause VII(E)

3. "Relative" shall mean "relative" as defined in section 2(41) and section 6 of the Companies Act, 195

Revised language – Explanation (ii) to clause IA

1. There shall be no nominee directors. Where an institution wishes to appoint a director on the Board, such appointment should be made by the shareholders

2. An institutional director on the boards of companies shall be considered as an independent director unless he does not satisfy the requirements of any of the clauses (a) to (f) listed above.

3. An institutional director shall have the same rights, duties and responsibilities as other members of the board and as prescribed under the Companies Act, 1956 and the Listing regulations.

4. Nominee of the Government on public sector companies shall be similarly elected and shall be subject to the same responsibilities and liabilities as other directors.

Revised language – Clauses I.B(i), I.B(ii) and I.C(ii)
49 I.B(i) All remuneration paid to non-executive directors, including independent directors, shall be fixed by the Board of Directors and shall be agreed to by shareholders in general meeting. Limits shall be set for the maximum number of stock options that can be granted to non-executive directors, including independent directors, in any financial year and in aggregate. The stock options granted to the non-executive directors, including independent directors, shall vest after a period of at least one year from the date of grant of the stock options. This requirement shall apply prospectively to all new option grants made after the effective date of this circular.

Delete clauses I.B(ii) and I.C(ii)

Revised language – Clause I.C(i)
49 I C(i) The Board shall periodically review legal compliance reports prepared by the company as well as steps taken by the company to cure instances of non-compliances.

Revised language – Clause I.D(iii)
I.D(iii) Further only two committees viz. the Audit Committee and the Shareholders’ Grievance Committee shall be considered for this purpose.

Revised language –Clause I.F(i)
I.F(i) A director shall be considered to be an independent director only so long as his tenure on the board does not exceed, in the aggregate, a period of nine years, such period to be considered as commencing on or after the date this circular comes into force or the date of his first appointment as a director, whichever is later. After the expiry of the said period, the director may continue to be a member of the board and be eligible for reappointment on the expiry of his term, but he shall not be considered to be an independent director.

Revised language –Clause II.A(iv)
II.A(iv) The Chairman of the audit committee, or in his absence, a designated member of the audit committee who is an independent director shall be present at Annual General Meeting to answer shareholder queries

Revised language –Clause II.B
II.B The audit committee should meet at least four times in a year and not more than four months shall elapse between two meetings. The quorum shall be either two members or one third of the members of the audit committee whichever is greater, but there should be a minimum of two independent members present.

Revised language –Clause II.D

(i)The role of the audit committee shall include the following:

1. 1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the external auditor and the fixation of audit fees.

3. Approval of payment to external auditors for any other services rendered by the external auditors

4. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to:

   1. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause 2AA of section 217 of the Companies Act, 1956

   2. Changes, if any, in accounting policies and practices and reasons for the same

   3. Major accounting entries involving estimates based on the exercise of judgment by management

   4. Significant adjustments made in the financial statements arising out of audit findings

   5. Compliance with listing and other legal requirements relating to financial statements

   6. Disclosure of any related party transactions

   7. Qualifications in the draft audit report.

5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval

6. Reviewing, with the management, external and internal auditors, adequacy of the internal control systems.

7. Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

8. Discussion with internal auditors any significant findings and follow up there on.

9. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.

10. Discussion with external auditors before the audit commences about nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

11. Reviewing the company’s financial and risk management policies.

12. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

Explanation (i): The term "related party transactions" shall have the same meaning as contained in the Accounting Standard 18, Related Party Transactions, issued by The Institute of Chartered Accountants of India.

Explanation (ii): If the company has set up an audit committee pursuant to provision of the Companies Act, the company agrees that the said audit committee shall have such additional functions / features as is contained in the Listing Agreement.

Clause II.E.5 becomes redundant and should therefore be deleted.