TERM PAPER

OF
“CORPORATE GOVERNANCE AND
ETHICS”
COURSE CODE: MGT-591

SUBMITTED BY: SUBMITTEDTO:

IMRAN ANSARI Mr. Puneet Bawa
SECTION: RS1906
ROLL NO.: RS1906B50
REG. NO.: 10906851

PROGRAM ID: 433::MBA (IT)

“LOVELY SCHOOL OF MANAGEMENT”

 ACKNOWLEDGEMENT

I IMRAN ANSARI of course MBA(IT) of “LOVELY

PROFESSIONAL UNIVERSITY” feels very happy to present this
term paper based on the topic “DISCUS THE CORPORATE
GOVERNANCE STRATEGY OF THE COMPANIES.”.
In order to make this term paper project a reality I have used
my all efforts.
This is an interesting term paper. Every topic is explained in a
simple language. Every topic includes an important background and
its full explanation.
I thank to university head of “LOVELY PROFESSIONAL
UNIVERSITY” who provide me such an opportunity to write a term
paper project on “DISCUS THE CORPORATE GOVERNANCE
STRATEGY OF THE COMPANIES”.
 INDEX
(i) INTRODUCTION

(ii) CORPORATE GOVERNANCE OF WIPRO LTD.

a. BOARD COMPOSITION

b. BOARD COMMITTEE

(iii) CORPORATE GOVERNANCE OF INFOSYS LTD.

a. CODE OF CORPORATE GOVERNANCE

b. CORPORATE GOVERNANCE - THE INFOSYS WAY

c. INFOSYS - A BENCHMARK FOR CORPORATE

GOVERNANCE

d. CORPORATE GOVERNANCE RATING

e. BOARD COMPOSITION

(iv) CORPORATE GOVERNANCE OF HCL TECHNOLOGY

a. PHILOSOPHY ON CODE OF GOVERNACE

b. BOARD OF DIRECTORS

c. CODE OF CONDUCT

d. BOARD COMMITTEE

(v) CORPORATE GOVERNANCE OF HCL INFOSYSTEMS

a. CORPORATE GOVERNANCE COMPOSITION OF BOARD

b. CORPORATE GOVERNANCE BOARD OF COMMITTEE

c. CODE OF CONDUCT
 d. BOARD COMMITTEE

(vi) REFERENCES

INTRODUCTION

"Corporate governance is about maintaining an appropriate balance of accountability

between three key players : the corporation's owners, the directors whom the owners elect,
and the managers whom the directors select. Accountability requires not only good
transparency, but also an effective means to take action for poor performance or bad
decisions."

Mary L. Schapiro, Chairperson, Securities and Exchange Commission, USA, Address to

Transatlantic Corporate Governance Dialogue - September 17, 2009.

Corporate governance is the set of processes, customs, policies, laws, and institutions
affecting the way a corporation (or company) is directed, administered or controlled.
Corporate governance also includes the relationships among the many stakeholders involved
and the goals for which the corporation is governed. The principal stakeholders are the
shareholders, the board of directors, employees, customers, creditors, suppliers, and the
community at large.

Corporate governance is a multi-faceted subject. An important theme of corporate

governance is to ensure the accountability of certain individuals in an organization through
mechanisms that try to reduce or eliminate the principal-agent problem. A related but
separate thread of discussions focuses on the impact of a corporate governance system in
economic efficiency, with a strong emphasis on shareholders' welfare. There are yet other
aspects to the corporate governance subject, such as the stakeholder view and the corporate
governance models around the world.

There has been renewed interest in the corporate governance practices of modern
corporations since 2001, particularly due to the high-profile collapses of a number of large
U.S. firms such as Enron Corporation and MCI Inc. (formerly WorldCom). In 2002, the U.S.
federal government passed the Sarbanes-Oxley Act, intending to restore public confidence in
corporate governance.

In A Board Culture of Corporate Governance, business author Gabrielle O'Donovan

defines corporate governance as 'an internal system encompassing policies, processes and
people, which serves the needs of shareholders and other stakeholders, by directing and
controlling management activities with good business savvy, objectivity, accountability and
integrity. Sound corporate governance is reliant on external marketplace commitment and
legislation, plus a healthy board culture which safeguards policies and processes.
O'Donovan goes on to say that 'the perceived quality of a company's corporate governance
can influence its share price as well as the cost of raising capital. Quality is determined by the
financial markets, legislation and other external market forces plus how policies and
processes are implemented and how people are led. External forces are, to a large extent,
outside the circle of control of any board. The internal environment is quite a different matter,
and offers companies the opportunity to differentiate from competitors through their board
culture. To date, too much of corporate governance debate has centred on legislative policy,
to deter fraudulent activities and transparency policy which misleads executives to treat the
symptoms and not the cause.

It is a system of structuring, operating and controlling a company with a view to achieve long
term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers,
and complying with the legal and regulatory requirements, apart from meeting environmental
and local community needs.

Report of SEBI committee (India) on Corporate Governance defines corporate governance as

the acceptance by management of the inalienable rights of shareholders as the true owners of
the corporation and of their own role as trustees on behalf of the shareholders. It is about
commitment to values, about ethical business conduct and about making a distinction
between personal & corporate funds in the management of a company.” The definition is
drawn from the Gandhian principle of trusteeship and the Directive Principles of the Indian
Constitution. Corporate Governance is viewed as business ethics and a moral duty. See also
Corporate Social Entrepreneurship regarding employees who are driven by their sense of
integrity (moral conscience) and duty to society. This notion stems from traditional
philosophical ideas of virtue (or self governance) and represents a "bottom-up" approach to
corporate governance (agency) which supports the more obvious "top-down" (systems and
processes, i.e. structural) perspective.

Corporate governance is about commitment to values and ethical business conduct. It is about
how an organization is managed. This includes its corporate and other structures, its culture,
policies and the manner in which it deals with various stakeholders. Accordingly, timely and
accurate disclosure of information regarding the financial situation, performance,
ownershipand governance of the company is an important part of corporate governance. This
improves public understanding of the structure, activities and policies of the organization.
Consequently, the organization is able to attract investors, and enhance the trust and
confidence of the stakeholders.

CORPORATE GOVERNANCE OF WIPRO LIMITED

The following Corporate Guidelines have been adopted by the Board of Directors to assist the
Board in the exercise of its responsibilities. Corporate Governance is not a directive to be in
stone for all time; rather, it is an ongoing process. From time to time Wipro’s principle of
Corporate Governance will therefore be reviewed and if necessary amended in the light of
experience gained, the needs of the day, the law, and national and international standards.
Efficient corporate governance requires a clear understanding of the respective roles of the
Board and of senior management and their relationships with others in the corporate
structure. The relationships of the Board and management shall be characterized by sincerity;
their relationships with employees shall be characterized by fairness; their relationships with
the communities in which they operate shall be characterized by good citizenship; and their
relationships with government shall be characterized by a commitment to compliance.

Senior management, led by the Chairman and Managing Director, is responsible for running
the day to day operations of the corporation and properly informing the Board of the status of
such operations. Management’s responsibilities include strategic planning, risk management,
financial reporting and compliance.

The Board of Directors has the important role of overseeing management performance on
behalf of stockholders. Stockholders necessarily have little voice in the day to day
management of corporate operations, but have the right to elect representatives (Directors) to
look out for their interests and to receive the information they need to make investment and
voting decisions.

Over the last few years, the Board of Directors of our Company has from time to time
developed corporate governance practices to enable the Directors to effectively and
efficiently discharge their responsibilities individually and collectively to the shareholders of
the Company in the areas of;

1. fiduciary duties
2. oversight of the Management
3. evaluation of the Management performance
4. support and guidance in shaping company policies and business strategies

An attempt has been made here in these guidelines to capture and codify in one place these
corporate governance practices. These guidelines will not only provide a systematic and
structured framework as to how it could review and evaluate the Company’s performance in
an independent manner but would also provide assurance to the Directors in terms of their
authority to oversee the Company’s management.

These guidelines are subject to future amendments or changes as the Board may find it
necessary or advisable for the Company in order to achieve these objectives.

BOARD COMPOSITION

Selection and appointment of Chairman and Managing Director

The Board shall make this choice that seems best for the Company at any given point in time.
The Board believes that this issue is part of the succession planning process and it is in the
best interests of the Company. The Board shall make appropriate determination and consider
succession planning at the appropriate time.

Board of Directors’ Responsibilities

The Company’s Board of Directors represents the shareholders’ interest in perpetuating a

successful business and optimizing long term financial returns in a manner consistent with
applicable legal requirements and ethical considerations. The Board is responsible for
identifying and taking reasonable actions to help and assure that the Company is managed in
a way designed to achieve this result.

Board of Directors’ Duties

The basic responsibility of the Directors is to exercise their business judgement to act in what
they reasonably believe to be in the best interests of the Company and its shareholders. In
discharging that obligation, Directors shall be entitled to have access to its records, rely on
the honesty and integrity of the Company’s officers, employees, outside advisors and
independent auditors. The Directors shall acknowledge and sign the following documents;

a. Code of Business Conduct and Ethics

b. Formal letter of appointment
c. Confidentiality Agreement
d. Indemnification Agreement

Directors are expected to attend Board meetings and meetings of Committees on which they
serve, and to spend the time needed and meet as frequently as necessary to properly discharge
their responsibilities. Directors are expected to review meeting materials prior to Board and
Committee meetings and, when possible, shall communicate in advance of meetings any
questions or concerns that they wish to discuss so that management will be prepared to
address the same. The specific duties of the Board of Directors’ are as follows;

1. Selection, Evaluation and Retention of Chairman/Chief Executive Officers and

Oversight of Selection and Performance of Other Executive Officers
2. Understanding, Reviewing and Monitoring Implementation of Strategic Plans and
Annual Operating Plan and Budgets
3. Selection and Oversight of Independent Auditors, Oversight of financial statements as
per the Charter of the Audit/Risk and Compliance Committee
4. Advising Management on significant issues
5. Review and approval of significant Company actions (e.g. Declaration of Dividend,
major Mergers & Acquisition transactions, etc).
6. Evaluating and nominating directors and members of Board committees, overseeing
the structure and practices of the Board and the committees and overseeing other
corporate governance matters.
 7. Consideration of other matters (In addition to fulfilling its obligation to increase
shareholder value, the Board shall consider the impact of various actions and
decisions on the Company’s customers, employees, suppliers.
8. Approval of the Charters, guidelines and policies as per the charters of the Board
Governance and Nomination Committee.

Size of the Board.

As per the Memorandum & Articles of Association of the Company, the number of Directors
shall not be less than four and not more than fifteen or such higher number of Directors as
may be permitted under the Companies Act, 1956 as amended or replaced from time to time.

Mix of Executive and Non-Executive Independent Directors

The Board believes that at least 50% of the total strength of the Board shall constitute of Non
Executive Independent Directors.

Board definition of what constitutes “Independent Directors”

The Board shall be comprised of a majority of Directors who qualify as Independent

Directors (“Independent Directors”) under the listing standards of the NYSE. The Board will
review annually the relationship that each director has with the Company (either directly or as
a partner, shareholder or officer of an organization that has a relationship with the Company).
Following such annual review, only those directors who the Board affirmatively determines
have no material relationship with the Company will be considered Independent Directors,
subject to additional qualifications prescribed under the listing standards of the NYSE. The
basis for any determination that a relationship is not material shall be disclosed in accordance
with applicable rules and regulations.

Lead Independent Director

The Lead Independent Director is responsible for coordinating the activities of the other
independent directors and to perform various other duties. The general authority and
responsibility of the Lead Independent Director are to be decided by the group of
Independent Directors. The role of Lead Independent Director shall be determined by the
group of Independent Directors.

Board membership criteria

The Board Governance and Nomination Committee comprise entirely of Independent

Directors and shall be responsible for identifying, screening, recruiting and recommending
Directors for nomination by the Board for election as members of the Board.
An assessment of the skills and characteristics needed by the Board in the context of the
current status of the Board must be performed on a regular basis;

The qualification guidelines for Board membership criteria shall include;

1. Strong management experience, ideally with major public companies with successful
multinational operations
2. Other areas of expertise or experience that are desirable given the Company’s
business and the current make-up of the Board, such as expertise or experience in
Information Technology businesses, manufacturing, international, financial or
investment banking, scientific research and development, senior level government
experience and academic administration
3. Desirability of range in age, so that retirements are staggered to permit replacement of
Directors of desired skills and experience in a way that will permit appropriate
continuity of Board members
4. Knowledge and skills Independence as defined by the Board
5. Diversity of perspectives brought to the Board by individual members
6. Knowledge and skills in accounting and finance, business judgement, general
management practices, crisis response and management, industry knowledge, labour
laws, international markets, leadership, risk management and strategic planning
7. Personal characteristics matching the Company’s values, such as integrity,
accountability, financial literacy, and high performance standards

Additional characteristics, such as;

1. Commitment to attend a minimum of 75% of meetings which will also include

attendance through audio/video conferencing.
2. Ability and willingness to represent the stockholders’ long and short term interests
3. Awareness of the Company’s responsibilities to its customers, employees, suppliers,
regulatory bodies, and the communities in which it operates

The Board shall evaluate each individual as well as the Board as a whole, with the objective
of recommending a group that can best be responsible for the success of the business and
represent shareholder interests through the exercise of sound judgement using its diversity of
experience in these various areas. The Committees of the Board shall also do the evaluation
of its performance based on the processes of the Board Governance and Nomination
Committee.

In determining whether to recommend a director’s re-election, the Board Governance and

Nomination Committee shall also consider the Director’s past attendance at meetings and
participation in and contributions to the activities of the Board.
One third of the Board members subject to retirement by rotation, are selected annually by
the Company’s shareholders. Each year at the Company’ annual meeting, the Board
recommends names of directors for re-election by shareholders. The Board’s
recommendations are based on its determination (using advice and information supplied by
the Board Governance and Nomination Committee) as to the suitability of each individual, to
serve as directors of the Company, based on the Board membership criteria. The Board’s
recommendation must be approved by a majority of the Independent Directors.

Proportion and Determination of Independent Directors

The Board believes that as a matter of policy, Independent Directors shall comprise of at least
50% of the Company’s Board. This will not, however, prevent the Board from taking valid
actions, if due to a temporary vacancy or vacancies on the Board, there are fewer than the
intended proportion of Independent Directors. Any such vacancies shall be filled as soon as
reasonably practicable.

An “Independent Director” is one who is not, and has not been within the last five years;

1. an employee of the Company or any of its affiliates

2. affiliated with or employed by a present or former independent auditor of the
Company or any of its affiliates
3. part of an interlocking directorship in which an executive officer of the Company
serves on the Board Governance & Nomination Committee and Compensation
Committee of another publicly held company that employs such director
4. an immediate family member of any one who has been an officer of the Company
or any of its affiliates or has had a relationship described above
5. or has never been the Chief Executive Officer of the Company and has been
determined by the Company’s Board not to have any other material relationship
with or to the Company or its management (either directly) or as a partner,
shareholder or officer of an organization that has a material relationship with or to
the Company or its management.
6. any other criteria of independence as may be prescribed by law as amended from
time to time

Selection of new Directors

The Board and the Board Governance & Nomination Committee shall be responsible in
actual practice and not merely as a procedural formality, for selecting members of the Board
and in recommending them for election by the shareholders. The Board delegates the
screening and selection process involved in selecting the new directors to the Board
Governance & Nomination Committee with direct input from the Chairman of the Board and
Chief Executive Officer.
The Board shall be responsible for determining the qualification of an individual to serve on
the Audit /Risk and Compliance Committee as a designated “Audit/Risk and Compliance
Committee Financial Expert” as required by applicable SEC rules. In light of this
responsibility of the Board, the Board Governance and Nomination Committee shall
coordinate closely with the Board in screening any new candidate and in evaluating whether
to re-nominate any existing director who may serve in this capacity.

The invitation to join the Board shall be extended by the Board itself, through its Chairman of
the Board (if he is an Independent Director) and/or the Chairman of the Board Governance
and Nomination Committee, together, in each case, with the Chief Executive Officer of the
Company.

Extending the Invitation to a Potential Director to join the Board

The invitation to join the Board is extended on behalf of the Board by the Chairman of the
Board.

Tenure

The tenure of Executive Directors must not exceed a period of five years on each occasion.
Independent Directors shall be eligible for retirement by rotation as well as reappointment
once in every two years. The age limit for retirement of the Executive and Non Executive
Independent Directors shall be decided by the Board Governance and Nomination
Committee.

Board Compensation

Executive Directors

Executive Directors shall be paid remuneration within the limits envisaged under Schedule
XIII of the Companies Act, 1956 and other regulations that may be applicable from time to
time. The remuneration payable shall be recommended by the Compensation & Benefits
Committee to the Board and shall be approved by the Board as well as the Shareholders of
the Company.

Non Executive Independent Directors

No professional or consulting fee is payable to Non Executive Independent Directors.

However, a commission may be payable to the Non Executive Independent Directors as may
be recommended by the Compensation Committee and approved by the Board subject
however to the condition that the commission shall not cumulatively exceed 1% of the net
profits of the Company for all Non Executive Independent Directors in the aggregate. The
commission payable in each individual case shall be capped upto an amount as may be
decided by the Compensation Committee. In case of commission payable to the members of
the Compensation Committee, the same shall be decided and approved by the Board.

No specific limitation on other Board Service

The Board does not believe that its members be prohibited from serving on Boards and/or
Committees of other organizations other than on Boards of companies which are in
competition with the businesses pursued by the Company.

Each Director is expected to ensure that his or her other existing and planned future
commitments do not materially interfere with such Director’s service on the Board. Service
on Boards and/or Committees of other organizations shall be consistent with the Company’s
conflict of interest policy.

New Director orientation

The Company has an orientation process for new directors that includes background material,
visits to Company facilities, and meetings with senior management to familiarize the
Directors with the Company’s strategic and operating plans, key issues, corporate
governance, Code of Business Conduct and Ethics, its principal officers, risk management
issues, compliance programs and its internal and independent auditors. In addition, new
members to a Committee will be provided information relevant to the Committee and its roles
and responsibilities.

Continuing Director education

The Board believes that it is appropriate for Directors, at their discretion, to have access to
educational programs related to their duties as Directors on an ongoing basis to enable them
to perform their duties better and to recognize and deal appropriately with issues that arise.
The views of the Directors will be obtained from time to time for areas in which Directors
would like to know more.

BOARD COMMITTEES

Types of Committees

The Board of the Company has the following Committees;

a. Audit/Risk and Compliance Committee

 b. Board Governance & Nomination Committee
c. Compensation Committee
d. Shareholders’/Investors’ Grievance and Administrative Committee

The membership of the Audit/Risk and Compliance Committee, Board Governance &
Nomination Committee and Compensation Committee shall comprise of only Non- Executive
Independent Directors of the Company. In the case of Audit/Risk and Compliance
Committee, at least one member shall have accounting or financial management experience,
as defined by the Securities and Exchange Commission rules or as required under applicable
New York Stock Exchange listing requirements. In the case of Shareholders’/Investors’
Grievance and Administrative Committee, the same shall comprise of at least two directors of
the Company. The members of the Committees other than the Executive Directors shall be
paid sitting fees. The Shareholders’/Investors’ Grievance Committee meeting shall be held at
least four times in a year.

The Board has adopted written charters for Audit/Risk and Compliance Committee, Board
Governance & Nomination Committee, and Compensation Committee in line with the
responsibilities envisaged under SEBI laws/NYSE and SEC regulations.

Audit/Risk and Compliance Committee meetings

The meetings of the Audit/Risk and Compliance Committee shall at least be held five times a
year and every quarter the meeting will happen preferably on the day preceding the date of
each of the Board meeting. The docket for the Audit/Risk and Compliance Committee
meeting shall be circulated at least 72 hours prior to the commencement of the meeting.

The Audit/Risk and Compliance Committee meeting shall be attended by;

a. The members of the Audit/Risk and Compliance Committee

b. Independent Auditors under Indian/US GAAP
c. Chairman
d. Joint CEOs
e. Chief Financial Officer and Executive Director
f. Head of Internal Audit
g. Corporate Vice President-Legal & General Counsel
h. Vice President-Corporate Controller
i. Company Secretary
j. Corporate Treasurer
k. Such other invitees at the discretion of the Chairman of the Committee
The Audit/Risk and Compliance Committee shall review the report of the Corporate Internal
Audit once every quarter. During this review, the Business Unit Heads and Chief Financial
Officers of the Business Units shall also be present. Once every quarter, the Audit/Risk and
Compliance Committee shall hold separate independent meetings with;
 a. the Head of Internal Audit
b. the Independent auditors under Indian/US GAAP.

Independent criteria for Audit/Risk and Compliance Committee members

In addition to being an Independent Director, as defined above, each member of the

Company’s Audit /Risk and Compliance Committee must not, except in his or her capacity as
a member of the Audit/Risk and Compliance Committee, the Board or any other Committee
of the Board;

1. Accept directly or indirectly any consulting, advisory, or other compensatory fee from
the Company OR
2. Be an affiliated person of the Company or any subsidiary thereof

For this purpose, the term “affiliated person” means one who, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common control with, the
Company or any of its subsidiaries. A person will not be deemed in control of the company or
any subsidiary, if the person is not;

1. a beneficial owner directly or indirectly of more than 10% of any class of equity
securities of the Company or such subsidiary; OR
2. an executive officer or director of the Company or such subsidiary As an
amplification of the foregoing;
3. Director’s fees (including fees for service on Committees) must be sole compensation
that an Audit/Risk and Compliance Committee member receives from the Company
4. Permissible director fees may include equity based awards and may also include fees
that are structured to provide additional compensation for additional duties (such as
extra fees for serving and/or chairing Board Committees)
5. A former employee of the Company who later qualifies as an Independent Director
will not be barred from chairing or serving as a voting member of the Audit/Risk and
Compliance Committee merely because he or she receives a pension or other form of
deferred compensation from the Company for his or her prior service (provided such
compensation is not contingent in any way on continued service as a director)
6. Neither an Audit/Risk and Compliance Committee member nor his or her firm may
receive any fees from the Company, directly or indirectly, for services as a consultant
or a legal or financial adviser. This applies without regard to whether the Audit/Risk
and Compliance Committee member is directly involved in rendering any such
services to the Company.

Board Governance and Nomination Committee meetings

The Board Governance and Nomination Committee shall at least be held at least four times a
year on the day preceding the date of every Board meeting. The Board Governance and
Nomination Committee meeting shall be attended by;
 a. the members of the Board Governance and Nomination Committee
b. Chairman
c. Corporate Head of Human Resources
d. Company Secretary
e. Such other invitees at the discretion of the Chairman of the Committee

The following information shall be disclosed in the Annual Report and Proxy Statement.

a. A reference to the website where the Board Governance and Nomination Committee
charter is posted and a brief overview of the functions and responsibility of the
Committee with its membership details.
b. Meeting the “independence” requirements by the members of the Board Governance
& Nomination committee as per NYSE listing standards
c. The process being followed by the Board Governance and Nomination Committee for
consideration and evaluation of directors.
d. Whether the Company pays any third party a fee to assist in the process or identifying
and evaluating candidates.
e. The process being followed by the Company for director nomination and election of
Directors who are nominated by the shareholders. Generally, nominations for election
of Directors can be made by shareholders in terms of statutoryprovisions. Company
shall endeavor to place such nominations for theapproval of shareholders in
compliance with the legal requirements.
f. Process followed by the company for communications by shareholders with directors
and screening if any. The Directors shall be accessible at the Annual/Extra-ordinary
General Meetings.
g. Whether the company has rejected candidates put forward by large, long time
shareholders or groups of shareholders.
h. Number of Committee meetings held during the year and attendance of directors at
these meetings including last general meeting.

Compensation Committee meetings

The Compensation Committee shall at least be held at least four times a year on the day
preceding the date of every Board meeting. The Compensation Committee meeting shall be
attended by;

a. the members of the Compensation Committee

b. Chairman
c. Corporate Head of Human Resources
d. Company Secretary
e. Such other invitees at the discretion of the Chairman of the Committee

The following information shall be disclosed in the Annual Report and Proxy Statement.
 a. A reference to the website where the Compensation Committee charter is posted and a
brief overview of the functions and responsibility of the Committee with its
membership details
b. Meeting the “independence” requirements by the members of the Compensation
Committee as per NYSE listing standards and other applicable laws.
c. The process being followed by the Compensation Committee in assisting the Board’s
overall responsibility relating to executive compensation and appropriate
compensation packages for Whole-time Directors and Senior Management personnel
in such a manner so as to attract and retain the best available personnel for position of
substantial responsibility with the Company
d. Disclosure of remuneration paid to Whole-time Directors/Senior Management
including stock options granted, if any with grant/exercise price and schedule of
vesting, number of equity shares beneficially owned by them
e. Number of Committee meetings held during the year and attendance of directors at
these Committee meetings including last general meeting.

INFOSYS Ltd.

Code of Corporate Governance

In the late 1990s, the Confederation of Indian Industries (CII) published a code of corporate
governance (Refer Exhibit II for the highlights of the report). In 1999, the Securities and
Exchange Board of India (SEBI) appointed a committee under the Chairmanship of Kumar
Mangalam Birla5 to recommend a code of corporate governance...

Infosys was one of India's largest and most famous software companies and provided a range
of Information Technology (IT) consulting and software services to leading global
organizations. Infosys was involved in customized software development, Internet
Consulting, application development and offshore software services.

The Cadbury Committee was set up in May 1991 in the United Kingdom. The stated
objective of the committee was “to help raise the standards of corporate governance and the
level of confidence in financial reporting and auditing by setting out clearly what it sees as
the respective responsibilities of those involved and what it believes is expected of them.”
The Cadbury Committee on corporate governance had made nineteen recommendations.

The Cadbury Committee was set up in May 1991 in the United Kingdom. The stated
objective of the committee was “to help raise the standards of corporate governance and the
level of confidence in financial reporting and auditing by setting out clearly what it sees as
the respective responsibilities of those involved and what it believes is expected of them.”
The Cadbury Committee on corporate governance had made nineteen recommendations.

By the late 1990s, Infosys Technologies Limited (Infosys)1 had clearly emerged one of the
best managed companies in India. Its corporate governance practices seemed to be better than
those of many other companies in India.

Because of its good governance practices, Infosys was the recipient of many awards. In 2001,
Infosys was rated India's most respected company by Business World 2. Infosys was also
ranked second in corporate governance among 495 emerging companies in a survey
conducted by Credit Lyonnais Securities Asia (CLSA) Emerging Markets. It was voted
India's best managed company five years in a row (1996-2000) by the Asiamoney poll.

In 2000, Infosys had been awarded the “National Award for Excellence in Corporate
Governance” by the Government of India. In 1999, Infosys had been selected as one of Asia's
leading companies in the Far Eastern Economic Review's REVIEW 2000 Survey and voted
India's most admired company by The Economic Times.

Corporate Governance-The Infosys Way

Infosys had accepted the recommendation of both the CII and the Kumar Mangalam Birla
Committee. This section provides an overview of corporate governance practices
followed by Infosys.

Infosys had an executive chairman and chief executive officer (CEO) and a managing
director, president and chief operating officer (COO). The CEO was responsible for
corporate strategy, brand equity, planning, external contacts, acquisitions, and board
matters. The COO was responsible for all day-to-day operational issues and
achievement of the annual targets in client satisfaction, sales, profits, quality,
productivity, employee empowerment and employee retention.

The CEO, COO, executive directors and the senior management made periodic presentations
to the board on their targets, responsibilities and performance...

Infosys-A Benchmark for Corporate Governance

Some analysts felt that Infosys'corporate governance practices offered many lessons to
corporate India. Infosys had shown that increasing shareholder wealth and safeguarding the
interests of other stakeholders was not incompatible. Infosys had given its non-executive
directors the mandate to pass judgement on the efficacy of its business plans. Every non-
executive director not only played an active role in decision making, but also led or served on
at least one of the three (Nomination, Compensation and Audit) committees...
Corporate governance report

“Corporate governance is about maintaining an appropriate balance of accountability between

three key players : the corporation's owners, the directors whom the owners elect, and the
managers whom the directors select. Accountability requires not only good transparency, but
also an effective means to take action for poor performance or bad decisions.”

Mary L. Schapiro, Chairperson, Securities and Exchange Commission, USA, Address to

Transatlantic Corporate Governance Dialogue – September 17, 2009.

Corporate governance is about commitment to values and ethical business conduct. It is about
how an organization is managed. This includes its corporate and other structures, its culture,
policies and the manner in which it deals with various stakeholders. Accordingly, timely and
accurate disclosure of information regarding the financial situation, performance, ownership
and governance of the company is an important part of corporate governance. This improves
public understanding of the structure, activities and policies of the organization.
Consequently, the organization is able to attract investors, and enhance the trust and
confidence of the stakeholders.

Corporate governance guidelines and best practices have evolved over a period of time. The
Cadbury Report on the financial aspects of corporate governance, published in the United
Kingdom in 1992, was a landmark. The Sarbanes-Oxley Act, which was signed by the U.S.
President, George W. Bush as a law in July 2002, has brought about sweeping changes in
financial reporting. This is perceived to be the most significant change to federal securities
law since the 1930s. Besides laying down the standards for directors and auditors, the Act has
also laid down new accountability standards for security analysts and legal counsels.

In India, the Confederation of Indian Industry (CII) took the lead in framing a desirable code
of corporate governance in April 1998. This was followed by the recommendations of the
Kumar Mangalam Birla Committee on Corporate Governance. This committee was appointed
by the Securities and Exchange Board of India (SEBI). The recommendations were accepted
by SEBI in December 1999, and are now incorporated in Clause 49 of the Listing Agreement.
Our compliance with these various requirements is presented in this section. We fully comply
with, and indeed go beyond, all these recommendations on corporate governance.

SEBI also instituted a committee under the chairmanship of N. R. Narayana Murthy which
recommended enhancements in corporate governance. SEBI has incorporated the
recommendations made by the Narayana Murthy Committee on Corporate Governance in
clause 49 of the Listing Agreement. The revised clause 49 was made effective from January
1, 2006.

During the year, the Ministry of Corporate Affairs, Government of India, published the
Corporate Governance Voluntary Guidelines 2009. These guidelines have been published
keeping in view the objective of encouraging the use of better practices through voluntary
adoption, which not only serve as a benchmark for the corporate sector but also help them in
achieving the highest standard of corporate governance. These guidelines provide corporate
India a framework to govern themselves voluntarily as per the highest standards of ethical
and responsible conduct of business. The Ministry hopes that adoption of these guidelines
will also translate into a much higher level of stakeholders' confidence that is crucial to
ensuring long-term sustainability and value generation by business.

We believe that sound corporate governance is critical to enhancing and retaining investor
trust. Accordingly, we always seek to ensure that we attain our performance goals with
integrity. Our Board exercises its fiduciary responsibilities in the widest sense of the term.

Our disclosures always seek to attain the best practices in international corporate governance.
We also endeavor to enhance long-term shareholder value and respect minority rights in all
our business decisions.

Our corporate governance philosophy is based on the following principles :

• Satisfy the spirit of the law and not just the letter of the law. Corporate governance standards
should go beyond the law
• Be transparent and maintain a high degree of disclosure levels. When in doubt, disclose
• Make a clear distinction between personal conveniences and corporate resources
• Communicate externally, in a truthful manner, about how the Company is run internally
• Comply with the laws in all the countries in which we operate
• Have a simple and transparent corporate structure driven solely by business needs
• Management is the trustee of the shareholders' capital and not the owner.

The Board of Directors (‘the Board’) is at the core of our corporate governance practice and
oversees how the Management serves and protects the long-term interests of all our
stakeholders. We believe that an active, well-informed and independent Board is necessary to
ensure highest standards of corporate governance.

The majority of our Board, eight out of 14, are independent members. Further, we have audit,
compensation, investor grievance, nominations and risk management committees, which
comprise only independent directors.

As part of our commitment to follow global best practices, we comply with the
Euroshareholders Corporate Governance Guidelines, 2000, and the recommendations of the
Conference Board Commission on Public Trusts and Private Enterprises in the U.S. We also
adhere to the United Nations Global Compact policy. Further, a note on our compliance with
the corporate governance guidelines of six countries (Australia, Canada, France, Germany,
Japan and U.K.) in their national languages is available on our website, www.infosys.com.
Corporate governance ratings
CRISIL

CRISIL has been consistently assigning us the ‘CRISIL GVC Level 1’ rating over several
years now. This Governance and Value Creation (GVC) rating indicates our capability to
create wealth for all our stakeholders while adopting sound corporate governance practices.

ICRA

ICRA assigned ‘CGR 1’ rating to our corporate governance practices. The rating is the
highest on ICRA's Corporate Governance Rating (CGR) scale of CGR 1 to CGR 6. We are
the first company in India to be assigned the highest CGR by ICRA. The rating reflects our
transparent shareholding pattern, sound Board practices, interactive decision-making
process, high level of transparency, disclosures encompassing all important aspects of our
operations and our track record in investor servicing. A notable feature of our corporate
governance practices is the emphasis on substance over form, besides our transparent
approach to follow such practices.

Corporate governance guidelines

Over the years, the Board has developed corporate governance guidelines to help fulfill our
corporate responsibility with our stakeholders. These guidelines ensure that the Board will
have the necessary authority and processes in place to review and evaluate our operations
when required. Further, these guidelines allow the Board to make decisions that are
independent of the Management. The Board may change these guidelines from time-to-time
to effectively achieve our stated objectives.

Board composition

Size and composition of the Board

Our policy toward the composition of the Board is to have an appropriate mix of executive
and independent directors to maintain the independence of the Board, and to separate its
functions of governance and management. Currently, the Board consists of 14 members, five
of whom are executive or whole-time directors, one is non-executive and eight are
independent directors.

Three of the executive directors are our founders. The Board believes that the current size is
appropriate, based on our present circumstances. The Board periodically evaluates the need
for change in composition of its size.

Responsibilities of the Chairman, CEO and the COO

Our policy is to have a Non-Executive Chairman and Chief Mentor – N. R. Narayana
Murthy; a Chief Executive Officer (CEO) and Managing Director – S. Gopalakrishnan; and a
Chief Operating Officer (COO) and Director – S. D. Shibulal. The responsibility and
authority of these officials are as follows :

• The Chairman and Chief Mentor is responsible for mentoring our core management team in
transforming us into a world-class, next-generation organization that provides state-of-the-art,
technology-leveraged business solutions to corporations across the world. He also interacts
with global thought leaders to enhance our leadership edge. In addition, he continues to
interact with various institutions to highlight the benefits of IT and help these benefits
percolate to all sections of society. As Chairman of the Board, he is also responsible for all
Board and corporate governance matters.
• The CEO and Managing Director is responsible for corporate strategy, brand equity, planning,
external contacts and other management matters. He is also responsible for achieving the
annual business targets and acquisitions.
• The COO is responsible for all customer service operations. He is also responsible for
innovation and research in technology advancements, new initiatives and investments.

The CEO, COO, the other executive directors and the senior management personnel are
responsible for achieving targets. They make periodic presentations to the Board on their
responsibilities and performance.

Board definition of independent directors

According to Clause 49 of the Listing Agreement with Indian stock exchanges, an

independent director means a person who is not an officer or employee of the Company or its
subsidiaries or any other individual having a material pecuniary relationship or transactions
with the Company which, in the opinion of our Board of Directors, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a director. We
adopted a much stricter definition of independence as required by the NASDAQ listing rules
and the Sarbanes-Oxley Act, U.S.

Lead Independent Director

Prof. Marti G. Subrahmanyam is a Lead Independent Director. He represents and acts as

spokesperson for the independent directors as a group, and is responsible for the following
activities :

• Presiding over all executive sessions of the Board's independent directors

• Working closely with the Chairman and the CEO to finalize the information flow, meeting
agendas and meeting schedules
• Liaising with the Chairman, CEO and the independent directors on the Board
• Taking the lead role, along with the Chairman in the Board evaluation process
Infosys named best Indian company in Corporate Governance

Technology behemoth Infosys Technologies has been named as the best company in India in
terms of Corporate Governance in The Asset Magazine’s annual Corporate Governance
Index 2008. The results have been released and are to be published in the November 2008
issue of The Asset.

Dwelling on the theme that Corporate Governance is both an art and a science., The Asset,
for the past ten years, has been emphasising on the ‘art’ part by canvassing the opinion of
institutional investors, sellside analysts and The Asset’s board of editors. This year, The
Asset has drilled down further into understanding corporate governance practices in
companies in the region by comparing these with international best standards.

Infosys has said that its basis for corporate governance standards is the Combined Code
Principles of Good Governance and Code of Best Practice derived by the committee on its
final report and from the Cadbury and Greenbury Reports. Besies, the White Paper on
Corporate Governance in Asia produced by the Organization for Economic Cooperation and
Development (OECD) has also been a base for the initiatives.

Companies were invited to present their annual results in complying with best practices. In
addition, participating companies were asked to submit their compliance to best practices in
such areas such as composition of board of directors, which was 20 per cent weighted; audit
committee (15 per cent); remuneration committee (15 per cent), risk management committee
(15 per cent), nomination committee (15 per cent), corporate social responsibility (10 per
cent), investor relations (5 per cent) and digital communication (5 per cent). The scores are
then weighted and combined with the score achieved in the presentation part of the process
with an 85 per cent /15 per cent weighting between compliance and voting by the board of
editors.

The Asset Magazine is a financial business magazine written for users and providers of
financial services in Asia.

HCL TECH.
Philosophy on Code of Governance

The Company continues to focus on good Corporate Governance, in line with local and
global standards. Its primary objective is to create and adhere to a corporate culture of
conscience and consciousness, integrity, transparency and accountability for efficient and
ethical conduct of business for meeting its obligations towards shareholders and other
stakeholders. Corporate Governance is an integral part of the philosophy of the Company in
its pursuit of excellence, growth and value creation. In addition to complying with the
statutory requirements, effective governance systems and practices towards improving
transparency, disclosures, internal controls and promotion of ethics at work place have been
institutionalized. The Company recognizes that good governance is a continuing exercise and
reiterates its commitment to pursue highest standards of Corporate Governance in the overall
interest of all its stakeholders.

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges in India,
the report containing the details of governance systems and processes at HCL Technologies
Limited is as under:

Board of Directors

The Board of Directors (“Board”) of the Company has an optimum combination of executive,
nonexecutive and independent directors, who have indepth knowledge of business, in
addition to the expertise in their areas of specialization. The Board provides leadership,
strategic guidance and an independent view to the Company’s management. During the year,
a majority of the Board comprised of independent directors. As on June 30, 2008, the Board
consisted of seven members, of whom, one is the promoter director who is designated as
Chairman and Chief Strategy Officer of the Company, and six are independent non-executive
directors. The non-executive directors bring an external and wider perspective in Board
deliberations and decisions. The size and composition of the Board conform to the
requirements of Clause 49 of the Listing Agreement with the Stock Exchanges. Other details
relating to the directors as on June 30, 2008 are given below:

Board functioning and procedure

At HCL Technologies Limited, the Board plays a pivotal role in ensuring good governance.
The probable dates of the board meetings for the forthcoming year are decided in advance
and published as a part of the Annual Report. The Board meets at least once a quarter to
review the quarterly results and other items of the agenda. When necessary, additional
meetings are held. The Board meetings are generally held at the corporate office of the
Company at Noida. The agenda for each board meeting is drafted in consultation with the
Chairman and circulated in advance to the Board members. Audit and Compensation
committees of the Board usually meet on the day of the board meeting.
There were six board meetings held during the year ended June 30, 2008. These were held on
August 13, 2007, October 16, 2007, January 17, 2008, February 04, 2008, April 15, 2008 and
June 26, 2008. The following table gives the attendance record of the directors in the board
meetings and at the last Annual General Meeting.

Availability of information to the members of the Board

The Board has complete access to any information within the Company, and to any employee
of the Company. The Board welcomes the presence of managers in the board meetings, who
can provide additional insights into the items being discussed in the meeting.

The information regularly provided to the Board includes:

 1. Annual operating plans and budgets including capital budgets and any updates.
2. Quarterly results of the Company and its operating divisions or business segments.
3. Minutes of meetings of Audit Committee and Compensation Committee of the Board.
4. The information on recruitment and remuneration of senior officers just below the
Board level, including appointment or removal of Chief Financial Officer and the
Company Secretary.
5. Show cause, demand, prosecution notices and penalty notices which are materially
important.
6. Fatal or serious accidents, dangerous occurrences, any material effluent or pollution
problems.
7. Any material default in the financial obligations to and by the Company, or
substantial nonpayment for goods sold / services provided by the Company.
8. Any issue, which involves possible public or product liability claims of substantial
nature, including any judgement or order which, may have passed strictures on the
conduct of the Company or taken an adverse view regarding another enterprise that
can have negative implications on the Company.
9. Details of any joint venture or collaboration agreement.
10. Transactions that involve substantial payment towards goodwill, brand equity, or
intellectual property.
11. Any significant development in Human Resources / Industrial Relations front.
12. Sale of material nature, of investments, subsidiaries, assets, which is not in normal
course of business.
13. Quarterly details of foreign exchange exposures and the steps taken by the
management to limit the risks of adverse exchange rate movement, if material.
14. Non-compliance of any regulatory, statutory nature or listing requirements and
shareholders service such as non-payment of dividend, delay in share transfer etc.
15. Statutory compliance report of all laws applicable to the Company, as well as steps
taken by the Company to rectify instances of non-compliances, if any.
16. Minutes of the board meetings of the subsidiaries along with their financial statements
and the investments made by these companies.
17. Details of the transactions with the related parties.

Statutory Compliance of Laws

The Board periodically reviews the compliance report of the laws applicable to the Company
as well as steps taken by the Company to rectify the instances of non-compliances, if any.

Code of Conduct

The Board has prescribed a Code of Conduct (“Code”) for all Board members and senior
management of the Company. The Code is also posted on the website of the Company. All
Board members and senior management personnel have confirmed compliance with the Code
for the year 2007-08. A declaration to this effect signed by the Chairman & Chief Strategy
Officer and Chief Executive Officer of the Company is provided elsewhere in the Annual
Report.

Board Committees

Currently, the Board has four committees viz. Audit Committee, Compensation Committee,
Shareholders’ Committee and Employees Stock Options Allotment Committee. Keeping in
view the requirements of the Companies Act, 1956 as well as Clause 49 of the Listing
Agreement, the Board decides the terms of reference of various committees and the
assignment of members to various committees. Normally, the committee meetings are held
once in every quarter except for Shareholders’ Committee and Employee Stock Options
Allotment Committee that generally meet once in every month and if necessary, additional
meetings are held.

Audit Committee

The Audit Committee comprises of following directors, namely:

a) Mr. T.S.R. Subramanian (Chairman)

b) Ms. Robin Abrams
c) Mr. Subroto Bhattacharya
d) Mr. Amal Ganguli
The Deputy Company Secretary acts as a Secretary to the Committee.

Terms of Reference

The constitution and terms of reference of the Audit Committee meet all the requirements of
Section 292A of the Companies Act, 1956 as well as Clause 49 of the Listing Agreement.
The Board of Directors has approved the following terms of reference for the Audit
Committee.

a) Statutory auditors

Recommend to the Board the appointment and removal of the Statutory Auditors, fixation of
audit fee and also approve payment for any other services.

b) Review independence of statutory auditors

In connection with recommending the firm to be retained as the Company’s Statutory

Auditors, review the information provided by the management relating to the independence
of such firm, including, among other things, information relating to the non-audit services
provided and expected to be provided by the Statutory Auditors.

The Committee is also responsible for:

 a. Actively engaging in dialogue with the Statutory Auditors with respect to any
disclosed relationship or services that may impact the objectivity and independence of
the statutory auditors, and
b. Recommending that the Board takes appropriate action in response to the Statutory
Auditors’ Report to satisfy itself of their independence.

c) Review audit plan

Review with the Statutory Auditors their plans for, and the scope of, their annual audit and
other examinations.

d) Conduct of audit

Discuss with the Statutory Auditors the matters required to be discussed for the conduct of
the audit.

e) Review audit results

Review with the Statutory Auditors the proposed report on the annual audit, areas of concern,
the accompanying management letter, if any, the reports of their reviews of the Company's
interim financial statements, and the reports of the results of such other examinations outside
of the course of the statutory auditors' normal audit procedures that they may from time to
time undertake.

f) Review financial statements

Review the Company’s financial reporting process and the disclosure of its financial
information to ensure that the financial statements are accurate, sufficient and credible. The
Audit Committee reviews with appropriate officers of the Company and the Statutory
Auditors, the annual and interim financial statements of the Company prior to submission to
the Board or public release thereof, focusing primarily on:

a. Any changes in accounting policies and practices.

b. Major accounting entries based on exercise of judgment by management.
c. Qualifications in draft audit report.
d. Significant adjustments arising out of audit.
e. The going concern assumption.
f. Compliance with accounting standards.
g. Compliance with stock exchange and legal requirements concerning financial
statements.
h. Any related party transactions i.e. transactions of the Company with its subsidiaries,
promoters or the management, or their relatives, etc. that may have conflict with the
interest of the Company at large.
i. Contingent liabilities.
 j. Status of litigations by or against the Company.
k. Claims against the Company and their effect on the accounts.

g) Review policies

Review the Company’s financial and risk management policies.

h) Review internal audit function

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

i) Review internal audit plans

Review with the senior internal auditing executive and appropriate members of the staff of
the internal auditing department the plans for and the scope of their ongoing audit activities.

j) Review internal audit reports

Review with the senior internal auditing executive and appropriate members of the staff of
the internal auditing department the annual report of the audit activities, examinations and
results thereof of the internal auditing department, any significant findings and follow up
thereon. The Audit Committee also reviews the findings of any internal investigations by the
internal auditors into the matters where there is suspected fraud or irregularity or a failure of
internal control system of a material nature and reporting the matter to the Board.

k) Review systems of internal accounting controls

Review with the statutory auditors, the senior internal auditing executive and, if and to the
extent deemed appropriate by the Chairman of the Committee, members of their respective
staffs the adequacy of the Company's internal accounting controls, the Company's financial,
auditing and accounting organizations and personnel and the Company's policies and
compliance procedures with respect to business practices.

l) Review recommendations of auditors

Review with the senior internal auditing executive and the appropriate members of the staff
of the internal auditing department, the recommendations made by the Statutory Auditors and
the senior internal auditing executive, as well as such other matters, if any, as such persons or
other officers of the Company may desire to bring to the attention of the Committee.

m) Review other matters

Review such other matters in relation to the accounting, auditing and financial reporting
practices and procedures of the Company as the Committee may, in its own discretion, deem
desirable in connection with the review functions described above.

n) Reporting to Board

Report its activities to the Board in such manner and at such times, as it deems appropriate.

o) Investigation

The Audit Committee has the authority to investigate any matter in relation to the items
specified in Section 292A of the Companies Act, 1956 or referred to it by the Board and for
this purpose; it has full access to the information contained in the records of the Company. It
can also investigate any activity within its term of reference. It has the authority to look into
the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (for non payment of declared dividends) and creditors, if any.

p) Seek information / advice

The Audit Committee can seek information from any employee and can obtain from outside
any legal or other professional advice. It can also secure attendance of outsiders with relevant
experience, if it considers necessary.

q) To attend Annual General Meeting

The Chairman of the Audit Committee attends the Annual General Meetings of the Company
to provide any clarification on matters relating to audit sought by the members of the
Company. Statutory Auditors of the Company are special invitees to the Audit Committee
meetings, wherein they participate on discussions related to the review of financial statements
of the Company and any other matter that in the opinion of the statutory auditors needs to be
brought to the notice of the Committee.

Six meetings of the Audit Committee were held during the year, on the following dates:

August 13, 2007

September 7, 2007
October 16, 2007
January 17, 2008
April 15, 2008
May 15, 2008

Attendance details of each member at the Audit Committee meetings held during the year
ended June 30, 2008 are as follows:
Compensation Committee

The Compensation Committee of the Board consists of following members:

a) Mr. Shiv Nadar (Chairman)

b) Mr. T.S.R. Subramanian
c) Ms. Robin Abrams

HCL INFOSYS
CORPORATE GOVERNANCE

• At HCL Infosystems corporate governance has been a long-standing policy to

promote openness in policies and action, empowerment for decision-making and a
framework for effective management control.

• Endeavor to maximise economic value and stakeholders wealth” is the edifice on

which the Corporate Governance initiative of HCL Infosystems Ltd. is built. The
essence of Corporate Governance influenced its voluntary adoption proactively ahead
of mandatory implementation.

CORPORATE GOVERNANCE COMPOSITION OF BOARD

Engineer from BMS College of Engineering, Bangalore and a graduate of International

Management Program from University of Hawaii, with 25 years experience. Associated with
HCL since 1980 after a brief stint of 2 1/2 years with Fujitsu Ltd. Japan. Executive Director
Mr.Ravi Thumboochetty Engineer from Trichur Government Engineering College, having
over 38 years of experience. Associated with HCL since 1983. Currently overseeing the
domestic operations of the Company. Executive Director Mr.T.S.Purushothaman Graduate in
Commerce from Calcutta University. Has more than 29 years of experience in the electronic
industry. Promoter and non-executive Director Mr.D.S.Puri A graduate in Electronics and
Telecommunication, Mr.Chowdhry has over 30 years of experience in the IT industry in
India and abroad. Promoter and Executive Director Mr.Ajai Chowdhry Brief Background
Category Name

A management graduate from Jamnalal Bajaj Institute with over 22 years of experience in
HR Consulting. Independent, non-executive Ms.Anita Ramachandran Graduate from
Emmanuel College, Cambridge (U.K). He held various positions with the U.P.Govt. and
Govt. of India including Chief Secretary, UP Govt. and Secretary to the Govt.of India.
Independent, non-executive Mr.R.P.Khosla A Chartered Accountant, with rich experience in
the areas of Corporate Strategy, Project Studies, Diversification Studies and
Govt.Policy/Legislation’s impact on business. Independent, non-executive
Mr.E.A.Kshirsagar A Chartered Accountant with vast experience in the area of Finance.
Independent, non-executive Mr.S.Bhattacharya Brief Background Category Name

CORPORATE GOVERNANCE BOARD COMMITTEES

August 1998 Customer Satisfaction CONSTITUTED IN COMMITTEES August 1998 Key
Result Area February 2000 Shareholders/Investors Grievance August 1998 Employee
Compensation & Satisfaction August 1998 Accounts & Audit

1. HCL Infosystems “ ITs our World ” Focusing on Indian IT, Communication &
Imaging Products & Services opportunity (estimated size Rs. 32,000 crores)
2. Continuous Range of Products & Services Offering Mobile Phone Products &
Services Solutions Internet Access pack (Retail) PC Servers MFD Laptop
Copier High-end Projects Rs. 250 AMC FM Networking Services BOT Rs.
Multi crore

Code of Conduct

The Board has prescribed a Code of Conduct (“Code”) for all Board members and senior
management of the Company. The Code is also posted on the website of the Company. All
Board members and senior management personnel have confirmed compliance with the Code
for the year 2007-08. A declaration to this effect signed by the Chairman & Chief Strategy
Officer and Chief Executive Officer of the Company is provided elsewhere in the Annual
Report.

Board Committees

Currently, the Board has four committees viz. Audit Committee, Compensation Committee,
Shareholders’ Committee and Employees Stock Options Allotment Committee. Keeping in
view the requirements of the Companies Act, 1956 as well as Clause 49 of the Listing
Agreement, the Board decides the terms of reference of various committees and the
assignment of members to various committees. Normally, the committee meetings are held
once in every quarter except for Shareholders’ Committee and Employee Stock Options
Allotment Committee that generally meet once in every month and if necessary, additional
meetings are held.

Audit Committee

The Audit Committee comprises of following directors, namely:

a) Mr. T.S.R. Subramanian (Chairman)

b) Ms. Robin Abrams
c) Mr. Subroto Bhattacharya
d) Mr. Amal Ganguli
The Deputy Company Secretary acts as a Secretary to the Committee.

Terms of Reference

The constitution and terms of reference of the Audit Committee meet all the requirements of
Section 292A of the Companies Act, 1956 as well as Clause 49 of the Listing Agreement.
The Board of Directors has approved the following terms of reference for the Audit
Committee.

a) Statutory auditors

Recommend to the Board the appointment and removal of the Statutory Auditors, fixation of
audit fee and also approve payment for any other services.

b) Review independence of statutory auditors

In connection with recommending the firm to be retained as the Company’s Statutory

Auditors, review the information provided by the management relating to the independence
of such firm, including, among other things, information relating to the non-audit services
provided and expected to be provided by the Statutory Auditors.

The Committee is also responsible for:

c. Actively engaging in dialogue with the Statutory Auditors with respect to any
disclosed relationship or services that may impact the objectivity and independence of
the statutory auditors, and
d. Recommending that the Board takes appropriate action in response to the Statutory
Auditors’ Report to satisfy itself of their independence.

c) Review audit plan

Review with the Statutory Auditors their plans for, and the scope of, their annual audit and
other examinations.

d) Conduct of audit

Discuss with the Statutory Auditors the matters required to be discussed for the conduct of
the audit.

e) Review audit results

Review with the Statutory Auditors the proposed report on the annual audit, areas of concern,
the accompanying management letter, if any, the reports of their reviews of the Company's
interim financial statements, and the reports of the results of such other examinations outside
of the course of the statutory auditors' normal audit procedures that they may from time to
time undertake.

f) Review financial statements

Review the Company’s financial reporting process and the disclosure of its financial
information to ensure that the financial statements are accurate, sufficient and credible. The
Audit Committee reviews with appropriate officers of the Company and the Statutory
Auditors, the annual and interim financial statements of the Company prior to submission to
the Board or public release thereof, focusing primarily on:

l. Any changes in accounting policies and practices.

m. Major accounting entries based on exercise of judgment by management.
n. Qualifications in draft audit report.
o. Significant adjustments arising out of audit.
p. The going concern assumption.
q. Compliance with accounting standards.
r. Compliance with stock exchange and legal requirements concerning financial
statements.
s. Any related party transactions i.e. transactions of the Company with its subsidiaries,
promoters or the management, or their relatives, etc. that may have conflict with the
interest of the Company at large.
t. Contingent liabilities.
u. Status of litigations by or against the Company.
v. Claims against the Company and their effect on the accounts.

g) Review policies

Review the Company’s financial and risk management policies.

h) Review internal audit function

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

i) Review internal audit plans

Review with the senior internal auditing executive and appropriate members of the staff of
the internal auditing department the plans for and the scope of their ongoing audit activities.

j) Review internal audit reports

Review with the senior internal auditing executive and appropriate members of the staff of
the internal auditing department the annual report of the audit activities, examinations and
results thereof of the internal auditing department, any significant findings and follow up
thereon. The Audit Committee also reviews the findings of any internal investigations by the
internal auditors into the matters where there is suspected fraud or irregularity or a failure of
internal control system of a material nature and reporting the matter to the Board.

k) Review systems of internal accounting controls

Review with the statutory auditors, the senior internal auditing executive and, if and to the
extent deemed appropriate by the Chairman of the Committee, members of their respective
staffs the adequacy of the Company's internal accounting controls, the Company's financial,
auditing and accounting organizations and personnel and the Company's policies and
compliance procedures with respect to business practices.

l) Review recommendations of auditors

Review with the senior internal auditing executive and the appropriate members of the staff
of the internal auditing department, the recommendations made by the Statutory Auditors and
the senior internal auditing executive, as well as such other matters, if any, as such persons or
other officers of the Company may desire to bring to the attention of the Committee.

m) Review other matters

Review such other matters in relation to the accounting, auditing and financial reporting
practices and procedures of the Company as the Committee may, in its own discretion, deem
desirable in connection with the review functions described above.

n) Reporting to Board

Report its activities to the Board in such manner and at such times, as it deems appropriate.

o) Investigation

The Audit Committee has the authority to investigate any matter in relation to the items
specified in Section 292A of the Companies Act, 1956 or referred to it by the Board and for
this purpose; it has full access to the information contained in the records of the Company. It
can also investigate any activity within its term of reference. It has the authority to look into
the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (for non payment of declared dividends) and creditors, if any.

p) Seek information / advice

The Audit Committee can seek information from any employee and can obtain from outside
any legal or other professional advice. It can also secure attendance of outsiders with relevant
experience, if it considers necessary.

q) To attend Annual General Meeting

The Chairman of the Audit Committee attends the Annual General Meetings of the Company
to provide any clarification on matters relating to audit sought by the members of the
Company. Statutory Auditors of the Company are special invitees to the Audit Committee
meetings, wherein they participate on discussions related to the review of financial statements
of the Company and any other matter that in the opinion of the statutory auditors needs to be
brought to the notice of the Committee.

Six meetings of the Audit Committee were held during the year, on the following dates:

August 13, 2007

September 7, 2007
October 16, 2007
January 17, 2008
April 15, 2008
May 15, 2008

Referencess:-

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