CLAUSE 49 OF LISTING AGREEMENT PART-1

(BORD OF DIRECTORS)
SUBMITTED BYDEEPTI REKHA TALUKDAR ROLL NO-81 PGDM 1(B)

CORPORATE GOVERNANCE
The term corporate governance is made of two words viz. Corporate & Governance. The concept of corporate governance is rounding around these two words in their true sense. The word company in technical sense can be defined as a legal entity formed & registered under the Companies Act. It is therefore, a combined political, social, economic & legal institution. The concept of corporate governance has two hinges Protection & enhancement of corporate wealth. Complete transparency, integrity & accountability of the management, with an increasingly greater focus on investor protection and public interest.

OBJECTIVES
Enhancement of long terms shareholders value. Accountability of management. Define clearly the rights, roles, responsibilities &

accountability of all stakeholders especially management & the Board of Directors. Continuous disclosure of materials financial & non- financial information & transparency. High quality of accounting practices. Protection of investors interest. Bring about high level of public confidence in bus.

BOARD OF DIRECTORS
The board of directors is accountable to the shareholders for creation & protection of shareholders value & responsible to them for adequate, timely & transparent reporting. Therefore, in order to discharge this function properly following provisions are inserted by way of part 1 of Clause 49 of Listing Agreement.

(A)COMPOSITION OF BOARD
The Board of directors of the company shall have

an optimum combination of executive and nonexecutive directors with not less than 50% of the board of directors comprising of non-executive directors. Where the Chairman of the Board is a nonexecutive director, at least one-third of the Board should comprise of independent directors and in case he is an executive director, at least half of the Board should comprise of independent directors.

(B) NON EXECUTIVE DIRECTORS COMPENSATION AND DISCLOSURE

All fees/compensation, if any paid to non-executive directors,

including independent directors, shall be fixed by the Board of Directors and shall require previous approval of shareholders in general meeting. The shareholders resolution shall specify the limits 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. Provided that the requirement of obtaining prior approval of shareholders in general meeting shall not apply to payment of sitting fees to non-executive directors, if made within the limits prescribed under the Companies Act, 1956 for payment of sitting fees without approval of the Central Government.

(C)PROVISIONS AS TO BOARD AND COMMITTEE

The board shall meet at least four times a year, with a

maximum time gap of four months between any two meetings. The minimum information to be made available to the board. A director shall not be a member in more than 10 committees or act as Chairman of more than five committees across all companies in which he is a director. Furthermore it should be a mandatory annual requirement for every director to inform the company about the committee positions he occupies in other companies and notify changes as and when they take place.

(D) CODE OF CONDUCT

The Board shall lay down a code of conduct for

all Board members and senior management of the company. The code of conduct shall be posted on the website of the company. All Board members and senior management personnel shall affirm compliance with the code on an annual basis. The Annual Report of the company shall contain a declaration to this effect signed by the CEO.

REPORT OF ZODIAC CLOTHING COMPANY LTD.

PARTICULARS CLAUSE OF LISTING AGREEMENTPART-1 49-1 COMPLIANCE STATUS (YES/NO) YES REMARK BORD OF DIRECTORS (A)COMPOSITION OF BOARD (B)NONEXECUTIVE DIRECTORS REFER ENCLOSED NOTE -do-do-

49-1(A) 49-1(B)

YES YES

(C)OTHER PROVISION
(D)CODE OF CONDUCT

49-1(C)
49-1(D)

YES
YES

-do-do-

NOTE
Details under each of the abovementioned

head are stated below:

BOARD OF DIRECTORS (CLAUSE 49 I ): The Board of Directors of the company comprises of total 12 directors, which includes an Alternate Director.

COMPOSITION OF BOARD CLAUSE 49 I (A)

The Board of Directors of the company comprises of 12 directors including an Alternate Director. The Chairman of the Board is a Non-Executive Director. Out of the 12 directors, 9 are Non-Executive Directors (excluding 1 Alternate Director). Out of the above 9 Non-Executive directors 8 are independent Directors. Thus more than 50% of the Board comprises of Non-executive directors and more than 1/3rd of the Board are independent directors.

NON EXECUTIVE DIRECTORS COMPENSATION CLAUSE 49 I (B):

The fees / compensation paid / payable to nonexecutive directors/independent directors are fixed by the Board and also approved by shareholders in general meeting. The company has not issued any stock options till date.

PROVISIONS AS TO BOARD AND COMMITTEES CLAUSE 49 I ( C)

[i] The meetings of the board of directors are scheduled in advance. The Board meetings were held on the following dates 25th April 2005, 27th June 2005, 5th July 2005, 27th July 2005 and 24th October 2005 within a time gap of 3 months between any two meetings. In view of further amendment to Clause 49 the maximum time gap between two Board meetings has been increased from three months to four months by SEBI.

[ii] None of the Directors on the Board are members of more than 10 committees or act as Chairman of more than five committees across all companies in which they are directors as per disclosure made by Directors to the company. The directors of the company have been informing the company annually about the committee positions occupied by them in other companies and also about the changes as and when they take place.

CODE OF CONDUCT CLAUSE 49 I (D)

In line with the Companys objective of following the

best Corporate Governance standards the Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct is effective from June1, 2005. All Board members and senior management personnel shall affirm compliance with the Code on an annual basis. The Annual report of the company for the year 2005-06 shall contain a declaration to this effect duly signed by the Managing Director.