3.1

The Board of Directors of COMPANY shall consist of the nominees of the respective groups i.e. Holding Company and BSES in proportion to the shares held by them. Holding Company shall always have the right to nominate a minimum of one director so long as holding Company holds 10% or more of equity shares in the COMPANY, BSES shall always have the right to appoint the majority of the Directors which shall always include one director more as compared with the rights of the Holding Company.

3.2

The initial Board of COMPANY shall consist of five Directors of these BSES shall be entitled to nominate or appoint three (3) Director, Holding Company shall be entitled to nominate two (2) Directors.

3.3

If any person is appointed as a director of COMPANY at the instance of any financial and other lending institution as a condition for funding to the COMPANY, the remaining directors shall be appointed by BSES and Holding Company in the proportion mentioned above.

3.4

No director or his alternate shall be required to hold any qualification share.

3.5

One of the directors nominated by BSES shall be appointed as the Managing Director or Whole time Director, a Chief Executive to be appointed by BSES shall be designated as Manager of COMPANY as envisaged in section 269 of the Companies Act 1956. BSES shall also be entitled to designate all the other executive directors of COMPANY and Holding Company shall not claim any right to designate any executive Director.

3.6

The Chairman of the COMPANY shall be appointed by the Board of Directors. The Chairman shall not have a Casting vote.

3.7

The Managing Director shall be a non-retiring director.

3.8

Subject to the supervision and control of the Board, the day-to-day management and conduct of the affairs of COMPANY shall vest in the Managing Director or Whole time Directors or the Chief Executive appointed as per Clauses 3.5 above.

3.9

The parties including their nominees and affiliates shall ensure that the individuals nominated by either of the parties to be the directors of COMPANY are duly elected and for this purpose shall use the voting rights attached to the respective shares held by them in favour of the election of such individuals as directors.

3.10

The parties shall be entitled from time to time to require the removal of their respective nominee directors and nominate others in place of the directors so removed.

3.11

All casual vacancies in the office of Directors on the Board shall be filled as follows :

(a)

In case of Director who has been appointed or designated by BSES vacating his office as a Director for any reason, the person designated or selected by BSES shall be appointed to fill the casual vacancy.

(b)

In case of a Director who has been appointed or designated by Holding Company vacating his office as a director for any reason, the person designated or selected by the Holding Company shall be appointed to fill the casual vacancy.

3.12

If a Director nominated by a party is unable to attend meetings of the Board of Directors of COMPANY BSES or Holding company, as the case may be shall be entitled to nominate n his place an alternate director to attend such meetings. The Board of Directors of COMPANY shall duly appoint as alternate Director the person so nominated by the party con concerned.

3.13

The Board of Directors of COMPANY shall meet from time to time (at least once each quarter in a year )for the purpose of determination and dealing with policy maters affecting the ;business and affairs of COMPANY

3.14

Except when the exigencies of business otherwise warrant or otherwise a shorter notice is mutually agreed to not less than 120 (TEN) clear days notice for meeting of the Board shall be given to all directors

3.15

Subject to the provisions of the Companies Act, 1956 the quorum for the meetings of the Board shall be at least one nominee Director of BSES A and one nominee Director of Holding Company or their respective alternates. If such quorum is not present the meeting shall be adjourned to the same day land the same time in the following week and in such adjourned meeting the directors may transact the business even if the quorum mentioned above is not present.

3.16

Subject to the provisions of the Company Act, 1956 and the other terms contained in this Agreement the decisions in the meeting of the Board of Directors shall be valid and effective if approved by majority of the directors present and voting in the meeting.

3.17

BSES and Holding Company on their behalf and on behalf of their affiliates land nominees undertake with each other as follows :-

(a)

to exercise all voting rights and powers available to them in relation to COMPANY so as to give full effect to the terms and conditions of this Agreement including, where appropriate, the carrying into effect of such terms as if they were embodied in COMPANY'S Memorandum and articles of association.

(b)

To ensure that the directors nominated by them and other representatives shall support and implement all reasonable proposals which comes before the general meetings, board meetings or committee meetings of COMPANY for the proper development and conduct of the business as contemplated in this Agreement

(c)

Save as provided in Article 3,if any employee of the COMPANY is to be nominated as a ;director of the COMPANY the same is given effect to only with the consent of both BSES and the Holding Company; and

(d)

Generally to use all reasonable endeavors to promote the business and the interests of COMPANY;

3.18

The number of Directors of the COMPANY shall be a minimum of 4 and a maximum 12.