Code of Conduct

Granules India Limited (Granules) ensures adherence and enforcement of the principles of corporate governance with a focus on transparency, professionalism, fairness and accountability. The Company believes that corporate governance has a role to ensure that the Directors of the Company are subject to their duties, obligations, accountability and responsibilities to act in the best interest of the Company and to remain accountable to shareholders and other beneficiaries for their corporate actions. The Company also believes that an active, well-informed and independent Board is necessary to ensure the highest standard of corporate governance. At Granules, the Board of Directors is at the core of corporate governance and oversees how the management serves and protects the interest of the stakeholders. The Board of Granules is responsible for and committed to the sound principles of the Company’s corporate governance. Our corporate governance framework ensures that we make timely disclosures and share accurate information regarding our financials and performance, as well as the leadership and governance of the Company. The Company acknowledges the individual and collective responsibilities to manage the business activities with integrity.

Committees

The Board Committees play a crucial role in the Company’s governance structure, and have been constituted to deal with specific areas / activities, which concern the Company and need a closer review. The Board Committees are set up under the formal approval of the Board to carry out clearly defined roles, which are considered to be performed by the Board members, as a part of good governance practice. The Board supervises the execution of its responsibilities by the committees and is responsible for their action. The minutes of the meetings of the committees are placed before the Board for review. The Board has currently established the following

statutory and non-statutory committees:

Audit Committee

The Audit Committee’s primary objective is to monitor and provide effective supervision of the management’s financial reporting process to ensure accurate, timely and proper disclosures and transparency, integrity and quality of financial reporting. The Committee oversees the work carried out by management, statutory auditors and internal auditors, in relation to the financial reporting process and the safeguards employed by them. The Company has qualified andindependent Audit Committee.

The Committee comprises four members, with a majority being Independent Directors. The composition, procedures, powers and role of the Committee comply with the requirements of Clause 49 of the listing agreement and Companies Act, 2013. The terms of reference of the Audit Committee includes:

1. Overview of the Company’s financial reporting processand disclosure of its financial information to ensure thatthe financial statements reflect a true and fair positionand that sufficient and credible information is disclosed.
2. Recommending the appointment and removal ofstatutory auditors, internal auditors and cost auditors,fixation of their audit fee and approval for payment forany other services.
3. Reviewing financial statements and draft audit report,including quarterly / half-yearly financial information.
4. Reviewing with the management the annual financialstatements before submission to the Board, focusingprimarily on:
   - The changes in accounting policies and practices.
   - Major accounting entries based on exercise ofjudgment by the management.
   - Qualifications in draft audit report.
   - Significant adjustment arising out of audit.
   - The going concern assumption.
   - Compliance with the accounting standards, stockexchange and legal requirements concerning financialstatements.
   - Review and approval of related party transactions.
   
5. Reviewing, with the management, external and internalauditors, the adequacy and compliance of internalcontrol systems.
6. Reviewing the adequacy of internal audit functions
7. Discussion with the internal auditors on any significantfindings and follow up thereon.
8. Reviewing the Company’s financial and risk managementpolicy.
9. Any other function, as delegated by the Board from timeto time.

Nomination & Remuneration Committee

The Nomination & Remuneration Committee deals with allelements of remuneration package, stock options, servicecontracts and other terms and conditions of the service of the executive directors, directors’ / promoters’ relatives and the senior management. The remuneration policy is directed toward rewarding performance, based on review of achievements on a periodical basis. The remuneration policy is in consonance with the existing industry practice. The Company’s remuneration policy is primarily based on its performance and the potential, experience and performance of individual personnel and external environment.

Share Transfer and Stakeholders Relationship Committee

The Committee was constituted to specifically look into the matters of investors’ grievances, such as transfer, transmission, split and consolidation of investors’ holding, replacement of lost / mutilated / stolen share certificates and dematerialization of shares, non-receipt of dividend / notices / annual reports and change of addresses, among others. The Committee’s primary objective is to strengthen investor relations. It also evaluates the performance and service standards of the Registrar and Share Transfer Agent of the Company, and provides continuous guidance to improve the service levels for the investors.

Business Review Committee

The Board constituted a Business Review Committee to advice on matters related to the management / operations of the Company.

Corporate Social Responsibility (CSR) Committee

The CSR Committee’s main responsibility is to assist the Board in discharging its social responsibilities by way of formulating and monitoring the implementation of the framework of ‘corporate social responsibility policy’. The Committee’s constitution and terms of reference meet with the requirements of the Companies Act, 2013.

The Company Secretary shall act as the Secretary of the Committee. The Committee’s purpose is to formulate and monitor the Company’s CSR policy. The CSR Committee has adopted a policy that intends to:

   - Strive for economic development that positively impactsthe society at large with minimal resource footprints.
   - Be responsible for the Company’s actions and encourage apositive impact through its activities toward the environment,communities and stakeholders.

The Committee will be overseeing the activities / functioning relating to identifying the areas of CSR activities, programs, execution of initiatives, reporting the progress and making appropriate disclosures as per the policy.

Risk Management Committee

The Risk Management Committee (RM Committee) was constituted by the Board on October 30, 2014, adhering to the requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Committee’s prime responsibility is to implement and monitor the Company’srisk management plan and policy.

The Committee’s Role and Responsibilities include:

   - Framing of Risk Management Plan and Policy
   - Overseeing implementation of Risk Management Planand Policy
   - Monitoring of Risk Management Plan and Policy
   - Verifying the process of Risk Management
   - Validating the procedure for Risk Minimisation
   - Periodically reviewing and evaluating the RiskManagement Policy and practices with respect to riskassessment and risk management processes
   - Continually obtaining reasonable assurance frommanagement that all known and emerging risks havebeen identified and mitigated or managed
   - Performing such other functions as may be necessary orappropriate for the performance of its oversight function

Board of Directors