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Jhagadia Copper Ltd.

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Jhagadia Copper Ltd. Accounting Policy

Corporate Governance Report

This report of Corporate Governance is for the year ended on 31st March, 2009 (from 1st April, 2008 to 31st March, 2009) and is pursuant to Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited and forms part of the Directors' Report.

1. Company's Philosophy on Code of Corporate Governance

Your company's Corporate Governance Policy aims to achieve the high standards of governance practices by putting in place a sound internal control systems, timely disclosures and accurate information dissemination, for under­standing risk profile and monitoring at every stage of company's evaluation process.

2. Board of Directors Board Composition

The Board of Directors of your company consists of independent persons of eminence from industry, finance and management. On 31st March, 2009 the Board strength was 9 (Nine) Directors which include 8 (Eight) Non-executive Directors (including 3 (Three) Institutional Nominees) and Managing Director & CEO. Shri P. Parvathisem, Director resigned as Non-executive Director after 31st March, 2009 and therefore the present Board strength is 8 (Eight) Directors which include 7 (Seven) Non-executive Directors (including 3 (Three) Institutional Nominees) and Manag­ing Director & CEO. The composition of the Board of Directors meets with the requirements of Clause 49 (I) (A) of the Listing Agreement. The company has a Non-Executive Chairman. The strength of independent directors is more than 50% of the total Board members leading to "independent" board characteristics. None of the independent directors is below the age of 21 years.

None of the Directors on the Board is a member of more than 10 Committees and Chairman of more than 5 Committees which is in compliance of Clause 49 (I) (d) of the Listing Agreement. All the Directors have made requisite disclosures regarding board.and committee memberships held by them in other companies and the same has been duly recorded by the Board in their meetings from time to time.

• The company places before the Board all the relevant and necessary information at its meetings for seeking necessary comments and suggestions on the plans and programmes for production.

• The information as required under Annexure 1 to Clause 49 of the Listing Agreement is being made available to the Board.

• There are no related party transactions made by the company with its Directors that may have potential conflict with the interests of the company at large.

• The information as required under. Clause 49 (IV) (G) of the Listing Agreement is annexed to the Notice of the Annual General Meeting.

Code of Conduct

The Board has formulated a code of conduct for the Board members and senior management executives of the company. The code of conduct sets out ethical standards for the Directors and Senior Management Executives of the company. The code of conduct has been displayed on company's website. All Board members and Senior Manage­ment Executives have affirmed their compliance with the code of conduct. A declaration to this effect signed by the Managing Director & CEO is annexed to this report.

Board Committees

Currently Board has five Sub Committees as under:

• Committee of Directors

• Audit Committee

• Remuneration & Compensation Committee

• Shareholders' / Investors' Grievance Committee

• Share Transfer Committee.

Committee of Directors

In terms of sanctions received from financial institutions / banks, with a view to have proper supervision / monitoring of operations of the company during trial runs / regular production and thereafter, the Board of Directors have consti­tuted the Committee of Directors.

The broad terms of reference of the Committee of Directors are as under:

- Review, recommend and ratify business strategy of the company on short/medium and long-term basis for approval of the Board.

- Review and approval of annual / quarterly income and expenditure and capital expenditure budgets and updates thereof for presentation to the Board for final approval.

-  Review of reports submitted by the concurrent auditor as well as compliance / action taken report thereof and informing the same to the Board.

- Review of the hedging / foreign exchange exposures and the steps taken by management towards containment of risks of adverse exchange rate movement, if material.

- Review of any non-compliance of any regulatory, statutory nature and default in payments of statutory dues and suggest remedial action thereof.

- To attend to all other approvals / management decisions from time to time as per the delegation of powers prescribed by the Board / FIs.

Audit Committee

the terms of reference of the Audit Committee, as stipulated by the Board, are in accordance with the requirements of Section 292 A of the Companies Act, 1956 and Clause 49 (II) (C) & (D) of the Listing Agreement.

The Audit Committee comprises of 2 Non-Executive Independent Directors.

The Audit Committee is constituted in accordance with the provisions of Clause 49 (II) (A) of the Listing Agreement and Section 292A of the Companies Act, 1956. All the Member Directors possess knowledge of corporate finance, ac­counts and corporate laws. The statutory auditors, concurrent auditors and internal auditors are also invited to the meetings of the Committee whenever required. The Financial Advisor, the Chief Financial Officer and other senior executives of the company also remain present in the meetings of the Committee as invitees. The General Manager (Corporate Affairs) & Company Secretary acts as Secretary to the Committee.

Remuneration & Compensation Committee

The company has constituted Remuneration & Compensation Committee with the following broad terms of reference.

-To review and recommend remuneration package of Executive / Non-Executive Directors.

-To review compensation package of officers immediately below the Board level.

-To formulate the overall remuneration and appraisal policy for the employees.

Non - Executive Directors

The company has paid sitting fees of Rs. 5,000 to all the Non-executive Directors for attending each meeting of the Board of Directors and Committees thereof.

The company, at present, is not paying any commission to its Non-executive Directors, and it does not have any scheme for grant of Stock Options to its Non-executive Directors.

Shareholders' / Investors' Grievances Committee:

The Shareholders' / Investors' Grievances Committee looks after redressal of the complaints received from share­holders/ investors, Stock Exchanges and SEBI etc. and to oversee the quality of the services rendered to the share­holders.

Share Transfer Committee:

The Share Transfer Committee is constituted to look after matters pertaining to the investors / shareholders, such as demat of shares, transfer of shares, transmission of shares, issue of duplicate share certificates, replacement of share certificates etc.

3. Subsidiary Company

The company does not have any subsidiary company.

4. Shares Transfer System and Investors' Grievance Redressal

The Board of Directors have delegated the powers of approval of shares transfers to the officers of Link Intime India Private. Limited, Registrar & Transfer Agent, Mumbai, who are approving the shares transfers regularly on fortnightly basis and the gist are placed before the meetings of the Shares Transfer Committee.

As per the Reports received from Registrar & Transfer Agent, during the year ended 31st March, 2009 total 85 com­plaints were received and all complaints have been satisfactorily processed and replied to.

5. Compliance Officer

Shri Jaydev R. Betai, General Manager (Corporate Affairs) & Company Secretary is the Compliance Officer of the company for complying with the requirements of Listing Agreement entered into with the Bombay Stock Exchange Limited as also of SEBI (Prohibition of Insider Trading) Regulations, 1992. The e-mail ID of Shri Jaydev R. Betai is jaydev.betai@jhagadiacopper.in . The e-mail ID for addressing shareholders' complaints on the website of Bombay Stock Exchange Limited is also jaydev.betai@jhagadiacopper.in .

6. Disclosures

1. Related Party Transactions

During the year ended on 31st March, 2009 there were no related party transactions of the company having any potential conflict with the interest of the company.

2. Disclosure in Accounting Treatment

The company follows Accounting Standards issued by the Institute of Chartered Accountants of India in preparation of the financial statements and that no different treatment prescribed in any Accounting Standard has been adopted.

3. Risk Management

The risk management of the company is overseen by the top management and the Board at various levels.

4. CEO/CFO Certification

The Managing Director & CEO (the CEO), the Financial Advisor and Chief Financial Officer have placed certificate for the period ended on 31st March, 2009 before the-Board in accordance with Clause 49 (V) of the Listing Agreement.

5. Details of non-compliance, penalties, strictures by SEBI / Statutory Authorities/ Stock Exchanges on matters relating to Capital Markets during the last three years

The company has complied with the requirements of the Stock Exchange / SEBI / Statutory Authorities on all matters related to capital markets. There are no penalties imposed or strictures passed on the company by the Stock Exchange or SEBI or any Statutory Authorities relating to the above.

6. Whistle Blower Policy.

The company at present does not have Whistle Blower Policy.

7. Secretarial Audit.

The company has appointed a qualified Practicing Company Secretary to conduct quarterly secretarial audit of the company to reconcile the total admitted capital with National Securities Depository limited (NSDL) and Central Depository Services Limited (CDSL) and the total issued and listed capital. The secretarial audit reports confirm that the total issued/paid up capital is in agreement with the total number of the shares held in physical form and the total number of dematerialized shares held with NSDL and CDSL.

The quarterly reports of the secretarial audit are reviewed by the Board of Directors.

1.1 Details of special resolutions passed in the last three Annual General Meetings are as under:

1. 42nd Annual General Meeting

1) Appointment of M/s N. M. Raiji & Co., Chartered Accountants as statutory auditors.

2) Payment of remuneration to Managing Director & CEO as Wholetime Director & CEO.

3) Confirmation to convertibility of privately placed securities.

4) Authority to issue shares.

2. 43rdAnnual General Meeting

1) Appointment of M/s N. M. Raiji & Co., Chartered Accountants as statutory auditors.

2) Reappointment of Shri Rajendra Mittal as Managing Director & CEO

3) Further issue of shares.

4) Cancellation of Issued Equity Shares.

5) Confirmation to convertibility of privately placed securities.

6)  Authority to issue shares.

3. 44tb Annual General Meting

1) Appointment of M/s N. M. Raiji & Co., Chartered Accountants as statutory auditors.

2) Confirmation to convertibility of privately placed securities

3) Authority to issue shares.

The special resolutions at 2) and 3) above were passed by requisite majority through ballot.

1.3 Extra Ordinary General Meeting

No extra ordinary general meeting is held by the company during the year ended 31st March, 2009.

1.4 Special resolutions through postal ballot:

During the year ended on 31st March, 2009 no special resolution was passed through postal ballot.

 2. Means of Communication:

Half-yearly report sent to each household of shareholders :- No

Quarterly Results

Which newspapers normally published in :- Business Standard, Sandesh and The Economic Times

Any web-site, where displayed :- www.jhagadiacopper.in

Whether the Company website displays

All official news release :- Yes

Presentation made to Investor / Analyst :- The company has not made any presentation to the Investor/Analyst during the period.

Whether MD&A is a part of Annual Report Directors' Report :- Yes -

Whether Shareholder Information section forms part of the Annual Report :- Yes

3. General Shareholder Information:

1. Registered Office

Plot No. 747, GIDC Industrial Estate, Post Box No. 14, P.O. Jhagadia, Dist. Bharuch, Pin: 393 110, Gujarat, India.

2. Day & Date, Time & Venue of 45"1 Annual General Meeting and Book Closure dates

Dav & Date: Monday, 7th September ,2009

Time: At 11.30 a.m.

Venue: Plot No. 747, GIDC Industrial Estate, Post Box No. 14, P.O. Jhagadia, Dist. Bharuch, Pin: 393 110, Gujarat, India.

Book Closure:

1st September, 2009 to 7th September, 2009 (inclusive of both the days)

3. Dividend Payment Date

Not Applicable . .

4. Financial Calendar for 2009-2010

1st April, 2009 to 31st March, 2010

First Quarter Results

(June. 2009)- On or before 31st July. 2009

Second Quarter & Half Yearly Results

(September, 2009) - On or before 31st October. 2009

Third Quarter results

(December. 2009) -On or before 31s1 January. 2010

Forth Quarter results

(March, 2010) - On or before 30th April. 2010

5. Listing on Stock Exchanges

Bombay Stock Exchange Limited

Scrip Code 504920

ISIN (Equity) INE666A01028

Listing fees as prescribed has been paid upto 31st March, 2010

6. Registrar and Transfer Agent:

Link Intime India Private Limited,

C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (W),

Mumbai - 400 078

Ph.No.: (022) 25946970-78

Fax No.: (022) 25946965

E-mail: rmp.helpdesk@linkintime.co.in

7. Share Transfer & Demat System:

The share transfers in physical form are presently registered and returned within a period of 30 days from the date of receipt at the office of Registrar & Transfer Agent, if documents are complete in all respects. The dematerialization of shares is done within 15 days of the date of receipt of physical documents and electronic advice from Depositary Participant (ISIN No.: INE 666A01028)

Total Shares Transferred during the year ended on 31st March, 2009:-  9647

Total Transfer Deeds received and processed during the year ended on 31 March, 2009 st :- Received- 65 Processed-56 Returned with objection-9

Total No. of Share(s) Demated as on 31st March, 2009 :- 107328966

% of total 'Equity Shares in Demat as on 31st March, 2009 :- 86.44 %

8. Outstanding GDRs / ADRs / Warrants or any convertible instruments, conversions date and likely impact on equity:

As on 31st March, 2009, the company has issued 66193217 Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 100/- each having rate of dividend at 6% per annum with the option of conversion into equity shares to the lending financial institutions/banks and Asset Reconstruction Company (India) Limited.

9. Address for correspondence & Location of Plant:

Plot No. 747, GIDC Industrial Estate, Post Box No. 14, P.O.: Jhagadia, Dist.: Bharuch, Pin: 393 110, Gujarat, India. Ph. (02645) 226600 Fax No. (02645) 226620 E-mail: jaydev.betai@jhagadiacopper.in

The above report was placed before the Board of Directors at its Meeting held on 29th July 2009 and the same was approved.