9..Who is HSBC?Headquartered in London, HSBC is one of the largest banking and financial services organisations in the world. HSBC's international network comprises around 7,500 offices in over 80 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by over 221,000 shareholders in 127 countries and territories. The shares are traded on the New York Stock Exchange in the form of American Depositary Receipts.HSBC provides a comprehensive range of financial services to around 89 million customers through four global businesses: Retail Banking and Wealth Management (formerly Personal Financial Services); Commercial Banking; Global Banking and Markets; and Global Private BankingOur Vision:As a member of HSBC family which has been serving its millions of customers worldwide since 1865, to take our place among Turkeys most powerful, most profitable, most admired leader banks.Our Mission:Having regard to ethical values; to meet its customers financial needs in the fastest and most appropriate way, to continue innovative works in order to achieve: human resource with superior qualities, technological infrastructure and service packages.Our Values:1) To exceed customer expectations in service quality.2) To be a pioneer in the implementation of technologies those create distinction for its customers, employees and shareholders.3) To keep its reliability at the utmost level with the contribution of its strong capital structure and liquid assets.4) To make a positive contribution to the community5) To respect meritocracy during hiring processes, improving knowledge and skills of its employees, creating the mostly preferred work environment.

HSBC Bank recognizes the importance of good corporate governance, which is generally accepted as a key factor in attaining fairness for all stakeholders and achieving organizational efficiency. This Corporate Governance Policy, therefore, is established to provide a direction and framework for managing and monitoring the bank in accordance with the principles of good corporate governance.

What is Corporate Governance? Corporate Governance is the system by which companies are directed and managed. It influences how the objectives of the company are set and achieved, how risk is monitored and assessed, and how performance is optimised. Good corporate governance structures encourage companies to create value (through entrepreneurism, innovation, development and exploration) and provide accountability and control systems commensurate with the risks involved.(ASX Corporate Governance Council: Principles of Good Corporate Governance and Best Practice Recommendations, March 2003)

Code of Corporate Governance

The Bank believes in adopting and adhering to the best recognised corporate governance practices and continuously benchmarking itself against each such practice. The Bank understands and respects its fiduciary role and responsibility to shareholders and strives hard to meet their expectations. The Bank believes that best board practices, transparent disclosures and shareholder empowerment are necessary for creating shareholder value.The Bank has infused the philosophy of corporate governance into all its activities. The philosophy on corporate governance is an important tool for shareholder protection and maximization of their long term values. The cardinal principles such as independence, accountability, responsibility, transparency, fair and timely disclosures, credibility, etc. serve as the means for implementing the philosophy of corporate governance in letter and spirit.

HSBC is committed to high standards of corporate governance. HSBC Holdings has complied throughout the year with the applicable code provisions of the Combined Code on Corporate Governance issued by the Financial Reporting Council and the Code on Corporate Governance Practices in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.The Board of HSBC Holdings has adopted a code of conduct for transactions in HSBC Group securities by Directors that complies with The Model Code in the Listing Rules of the Financial Services Authority and with The Model Code for Securities Transactions by Directors of Listed Issuers ('Hong Kong Model Code') set out in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, save that The Stock Exchange of Hong Kong Limited has granted certain waivers from strict compliance with the Hong Kong Model Code, primarily to take into account accepted practices in the UK, particularly in respect of employee share plans. Following a specific enquiry, each Director has confirmed he or she has complied with the code of conduct for transactions in HSBC Group securities throughout the year.

Corporate Governance Essentials1. High level of integrity2. Timely and accurate disclosure of information3. Establishing high standards of accountability 4. Management effectively monitored by the Board5. High regard for shareholder value and equitable treatment of shareholders6. Key Business Values

This Code of Ethics / Conduct intends to ensure adherence to highest business and ethical standards while conducting the business of the Bank and compliance with the legal and regulatory requirements, including compliance of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and regulations framed thereunder by the Securities and Exchange Commission of USA and other statutory and regulatory authorities in India and USA. The Bank values the ethical business standards very highly and intends adherence thereto in every segment of its business.

Applicability

This Code of Ethics/Conduct is applicable to the following persons. The Board Members Officials of the Bank one level below the Board

Ethical Conduct

The Board members / Officials shall engage in and promote honest and ethical conduct of business, including the ethical handling of actual and / or apparent conflicts of interest between personal and professional relationships.

Conflict of Interest

The Board members / Officials shall avoid conflict of interest and disclose to the Board any material transaction or relationship that reasonably could be expected to give rise to such a conflict.

Confidentiality of Information

The Board members / Officials shall ensure and take all reasonable measures to protect the confidentiality of non-public information about the Bank, its business, customers and other materially significant information obtained or created in connection with any activities with the Bank and to prevent the unauthorised disclosure of such information unless required by applicable laws or regulations or legal or regulatory process.

Disclosure of Information

The Board members / Officials shall endeavor to produce full, fair, accurate, timely and understandable disclosures in reports and documents that the Bank files with or submits to the Securities and Exchange Commission and other regulators and in other public communications made by the Bank.

Compliance with Governmental Laws, Rules and Regulations

The Board members / Officials shall comply with all the applicable governmental laws and the applicable rules and regulations.

Variation of the Code and Waivers

The Code shall be reviewed from time to time for updation thereof. Any variation in the Code or any waivers from the provisions of the Code shall be approved by the Board and shall be disclosed on the Bank's website.

Contract or Term of Employment

Nothing in this Code or other related communications by itself creates or implies an employment contract or terms of employment.

Violation of the Code

The Board shall have the powers to take necessary action in case of any violation of the code.

HSBCs Key Business Values1. The highest personal standards of integrity at all levels2. Commitment to truth and fair dealing3. Hands-on management at all levels4. A minimum of bureaucracy5. Fast decisions and implementation6. Putting the teams interests ahead of the individuals7. The appropriate delegation of authority with accountability8. Contained in Instruction Manuals. Communicated9. Integrity10. Minimal use of Committees to approve matters11. A Commitment to Complying With the Spirit and Letter of All Laws and Regulations Wherever We Conduct Our Business12. Reputation Is Essential13. Integrity, leads to reputation14. Years to build. Easy to lose. Reputation risk

HSBCs Business principles1. Outstanding customer service2. Effective and efficient operations3. Strong capital and liquidity4. A prudent lending policy5. Strict expense discipline

HSBC - some key facts1. Listed on London, Hong Kong, New York, Paris and Bermuda stock exchanges. Dual Primary listings in Hong Kong and London. Committed to comply with whichever is the more onerous provision2. Subject to the Combined Code on Corporate Governance (UK) and the Code on Corporate Governance Practice (HK)3. Owned by more than 200,000 shareholders in some 100 countries and territories 4. US$128 billion of shareholders funds5. Market capitalisation of over US$177.6 billion6. Total assets of US$2,354 billion7. More than 128 million customers 8. Over 10.000 offices in 84 countries and territories9. 510 regulators around the world

Regulation of HSBC1. HSBC Group has some 490 different regulators globally2. The UK Financial Services Authority (FSA) acts as the Groups lead regulator but defers to local regulatory authority in respect of offices outside UK3. FSA acts as a single regulator for UK financial services industry4. HSBC Group has a strong control culture. The key control functions being Finance, Credit and Risk, Compliance and Audit

Structure of HSBC Holdings plc1. HSBC Holdings plc is a public company incorporated under UK company legislation2. Operations are carried out by different operating subsidiaries, including HSBC Bank plc, HSBC Bank USA, HSBC Latin America, HSBC Mexico and The Hongkong and Shanghai Banking CorporationOwnership RightsCertain rights that a shareholder in a company enjoys :

To transfer the shares.

To receive the share certificates upon transfer within the stipulated period prescribed in the Listing Agreement.

To receive notice of general meetings, annual report, the balance sheet and profit and loss account and the auditors' report.

To appoint proxy to attend and vote at the general meetings. In case the member is a body corporate, to appoint a representative to attend and vote at the general meetings of the company on its behalf.

To attend and speak in person, at general meetings. Proxy cannot vote on show of hands but can vote on a poll.

To vote at the general meeting on show of hands wherein every shareholder has one vote. In case of vote on poll, the number of votes of a shareholder is proportionate to the number of equity shares held by him.

As per Banking Regulation Act, 1949, the voting rights on a poll of a shareholder of a banking company are capped at 10% of the total voting rights of all the shareholders of the banking company.

To demand poll alongwith other shareholder(s) who collectively hold 5,000 shares or are not less than 1/10th of the total voting power in respect of any resolution.

To requisition an extraordinary general meeting of any company by shareholders who collectively hold not less then 1/10th of the total paid-up capital of the company.

To move amendments to resolutions proposed at meetings .

To receive dividend and other corporate benefits like rights, bonus shares etc. as and when declared / announced.

To inspect various registers of the company .

To inspect the minute books of general meetings and to receive copies thereof after complying with the procedure prescribed in the Companies Act, 1956.

To appoint or remove director(s) and auditor(s) and thus participate in the management through them.

To proceed against the company by way of civil or criminal proceedings.

To apply for the winding-up of the company.

To receive the residual proceeds upon winding up of a company.

The rights mentioned above are prescribed in the Companies Act, 1956 and Banking Regulation Act, 1949, whereever applicable, and should be followed only after careful reading of the relevant sections. These rights are not necessarily absolute.

Corporate governance RatingThe bank was amongst the first four companies, which subjected itself to a Corporate Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services of India Limited (CRISIL). The rating provides an independent assessment of an entity's current performance and an expectation on its "balanced value creation and corporate governance practices" in future. The bank has been assigned a 'CRISIL GVC Level 1' rating for the second consecutive year, which indicates that the bank's capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices is the highest.Reports to the BoardEXAMPLES OF REGULAR REPORTS TO THE BOARDReports to each Meeting Chairman of the Group Audit Committee Chairman of the Remuneration Committee Chairman of the CSR Committee Share Performance Business Developments and Acquisitions Chief Executives Business Minutes of all Committee Meetings Senior AppointmentsQuarterly Consolidated ResultsHalf-yearly Substantial Litigation Large Exposures Peer Group Comparison Auditors Letter and Management ResponseSpecial Reports to the Board IT Report Credit & Risk Report Large Exposure Policy Investment Banking & Treasury Report Internet Banking Report5 year Strategic Plan Annual Operating Plan Capital Financing Plan Annual and Interim Accounts Financial Results Announcements Notices of Shareholders Meetings Major Policy Decisions Customer Group Reports Geographic Regional Reports

Corporate Social ResponsibilityHSBC operates in 86 countries worldwideOur Groups status as one of the worlds leaders in the area of corporate social responsibility only increases our sense of responsibility. The experience and expertise we have gained worldwide only makes us all the more effective in this respect.We approach every new social responsibility project with excitement and passion and work consistently and with commitment to contribute to our communities. Knowing that our people support us every step of the way only makes us more dedicated to contributing to our communities.As a corporation that is aware of its corporate social responsibility to create a better and more sustainable world, we place great importance on insuring that the projects we undertake are long-term and far-reaching. For this reason, we make it a practice to involve our customers in our projects, and their support makes our efforts even more effective and meaningful.All over the world, we at HSBC say, with the same commitment and enthusiasm, We are Committed to the Future.We are volunteered for the future with society.We are volunteered for the future with education.We are volunteered for the future with environment.We are volunteered for the future with art

12