GLOBAL TRADE FINANCE LIMITED

Internal Guidelines on Corporate Governance

Components of Internal Guidelines on Corporate Governance

• Board of Directors

• Audit Committee

• Disclosures

1. Board of Directors

• Fees/compensation paid to Non-Executive/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 maximum number of Stock Options to be granted to Non-Executive Directors in any Financial Year and in aggregate.

• At least 4 Board Meetings should be held in a year, with a maximum time gap of four months between two meetings.

• 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.

• A Director shall inform the Company about the Committee positions He/ She occupies in other companies and notify changes as and when they take place

• The Board shall periodically review Compliance Reports of all Laws applicable to the Company, prepared by the Company as well as steps taken by the Company to rectify instances of non-compliances

• The Board shall lay down a Code of Conduct for Senior Management of the Company. Senior Management Personnel shall affirm compliance with the code on an annual basis. (It may be stated that such code of conduct duly approved by Board is in place already ).

2. Audit Committee

   (a)  Constitution of Audit Committee

        A qualified and independent Audit Committee shall be set up, giving the terms of reference subject to the following :

• The Audit Committee shall have minimum three Directors as Members.

• All the Members of Audit Committee shall be financially literate and at least one member shall have accounting or related financial management expertise.

• The Chairman of the Audit Committee shall be an Independent Director

• The Chairman of the Audit Committee shall be present at Annual General Meeting to answer the Shareholders' queries

• The Audit Committee may invite appropriate executives to be present at the Committee Meeting; Head - Accounts, Head of Internal Audit and a representative of the Statutory Auditors may be present as invitees for the Meetings of the Audit Committee.

• The Company Secretary shall act as the Secretary to the Committee

   (b)  Meeting of Audit Committee

• Meetings of Audit Committee shall be held at least four times in a year and not more than four months shall elapse between two Meetings.

• The quorum shall be either two Members or one third of the Members whichever is greater

   (c)  Powers of Audit Committee

Audit Committee shall be empowered :

• To investigate any activity within its terms of reference,

• To seek information from any employee

• To obtain outside legal or other professional advice

• To secure attendance of outsiders with relevant expertise, if it considers necessary

   (d)  Role of Audit Committee

• Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible

• Recommending to the Board appointment, reappointment and if required, the replacement or removal of the Statutory Auditor and fixation of Audit fees.

• Approval of payment to the Statutory Auditors for any other services rendered by the Statutory Auditors

• Reviewing with Management the annual financial statements before submission to the Board for approval, with particular reference to (i) (ii) Changes in accounting policies and practices and reasons for the same, (iii) Major accounting entries involving estimates based on the exercise of judgment by the Management, (iv) Significant adjustments made in the financial statements arising out of Audit findings, (v) Compliance with listing and other legal requirement relating to financial statements, (vi) Disclosure of any related party transactions, and (vii) Qualifications in the draft audit report

• Reviewing with the Management, the quarterly financial statements before submission to the Board for approval

• Reviewing with the Management, performance of Statutory and Internal Auditors, adequacy of the internal control systems

• Reviewing the adequacy of Internal Audit function, including the structure of the Internal Audit Department, staffing and seniority of the official heading the Department, reporting structure coverage and frequency of Internal Audit

• Discussion with Internal Auditors any significant findings and follow up there on

• Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board

• Discussion with Statutory Auditors before the audit commences, nature and scope of Audit as well as have post-audit discussion to ascertain any area of concern

• To look into the reasons for substantial defaults in the payment to the depositors, Debenture holders, Shareholders (in case of non payment of declared dividends) and Creditors

   (e)  Review of information by Audit Committee

• Statement of significant related party transactions submitted by the Management.

• Management letters/ letters of internal control weakness issued by the Statutory Auditors

• Internal Audit reports relating to internal control weakness

• The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the Audit Committee

3. Disclosures

• Related Party transactions to be disclosed by Directors to the Company

• Changes in Accounting treatment to be disclosed in Annual Report

• Remuneration to Directors to be disclosed in Annual Report.

• Senior Management to disclose material transactions of the Company to Board in which they have personal interest

• Certificate to be given to the Board by Managing Director & CEO -COO that: (i) Financial statements are true and fair view of accounts, does not contain material untrue statement, omit material fact, (ii) Compliance with Accounting Standards, applicable Laws and Regulations, (iii) There are no transactions which are fraudulent or illegal or violative of code of conduct of the Company

• Report on Corporate Governance to include report on following: (i) Company's philosophy on code of governance, (ii) Board of Directors, (iii) Audit Committee, and (iv) General Body Meetings.