(As approved and adopted by the Board of Directors of the Company on 10th December, 2007)
The Company is committed to conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations.
The Company’s Board of Directors and Senior Management are responsible for and are committed to setting the standards of conduct contained in this Code and for updating these standards, as appropriate, to ensure their continuing relevance, effectiveness and responsiveness to the needs of local and international investors and all other stakeholders as also to reflect corporate, legal and regulatory developments. This Code should be adhered to in letter and in spirit.
This is a comprehensive code and applies to all Directors and Senior Management. However, the provisions shall apply to Executive and Non- Executive Directors including independent Directors only to such extent as may be applicable depending on their respective roles and responsibilities.
Directors / Senior Management shall communicate any suspected violations of the Code promptly to the Chairman of the Board. Suspected violations will be investigated by or at the direction of the Board and appropriate action will be taken in the event that violation is confirmed.
“Senior management” shall mean personnel of the company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management one level below the executive directors, including all functional heads.
COMPLIANCE WITH APPLICABLE LAWS
The Company is committed to comply with all applicable laws, rules, regulations and guidelines in every jurisdiction where it operates.
It is therefore desirable that Directors / Senior Management possess / acquire appropriate knowledge of the legal requirements relating to their roles and duties to enable them to be in compliance thereof and to recognize potential risks.
Directors/Senior Management shall ensure due compliance for every activity undertaken under their supervision and authority.
Directors/Senior Management shall extend full co-operation to regulatory authorities, and disclose information as may be required.
ACCOUNTING AND FINANCIAL REPORTING
All the books of accounts shall be prepared and maintained fairly and accurately in accordance with the accounting and financial reporting standards, accepted guidelines, principles and applicable accounting standards generally followed in India.
The accounting procedures shall fairly and accurately reflect all the Company’s business transactions and disposition of assets. All required information shall be accessible to the Company’s auditors and other authorised persons and Government Agencies.
All the Directors/Senior Management shall ensure that the Company’s information furnished to the Government Departments/ Authorities, Financial Institutions and Banks is authentic and accurate
CONFLICT OF INTEREST
A.
No Directors/ Senior Management of the Company shall engage in any business relationship or activity which might detrimentally conflict with the interest of the Company.
A conflict of interest occurs when one’s private interests interfere in any way, or even appear to interfere, with the interests of the Company including its subsidiaries and affiliates. A conflict situation can arise when a director takes actions or has interests that make it difficult to perform his/her duties for the Company objectively and effectively. A Director’s /Senior Management obligation to conduct the Company's business in an honest and ethical manner includes the ethical handling of actual or apparent conflicts of interest between personal and business relationships.
Although it would not be possible to describe every situation in which a conflict of interest may arise, the following are examples of situations, which may constitute a conflict of interest:
Engaging in any activity / employment that interferes with the performance or responsibility to the company or is otherwise in conflict with or prejudicial to the company.
Avoid conducing company business with a relative or with a firm / company in which a relative / related party is associated in any significant role.
Work, in any capacity, for a competitor, client, supplier or other third party while employed by the Company.
Compete with the Company for the purchase or sale of property, products, services or other interests.
Having an interest in a transaction involving the Company, a competitor, client or supplier (other than as an employee, officer or director of the Company and not including routine investments in publicly traded companies).
B.
In case there is likely to be a conflict of interest, the concerned Directors / Senior Management must at the earliest opportunity make full disclosure of all facts and circumstances that reasonably could be expected to give rise to any violations of the Code including actual or apparent or implied conflicts with the interests of the Company to the Board of Directors and the Board shall ensure that Company’s interests are protected.
PRIVACY AND CONFIDENTIALLY
“Confidential information” includes all information of the Company not authorized by the management for public dissemination. This includes information on trade, trade secrets, confidential and privileged information regarding customers, employees, information relating to mergers and acquisitions, stock splits and divestitures; non-public information about discussions and deliberations relating to business issues and decisions, between and among employees, officers and Directors in formal meetings or otherwise, and will include all such information which is not available in the public domain at that point of time.
The Company believes that protection of all confidential information is essential and is committed to protecting business and personal information of confidential nature obtained from clients, associates and employees. Directors / Senior Management shall ensure that no confidential information is disclosed inadvertently or otherwise.
Confidential information shall be disclosed to persons, both internal and external, only on a ‘need to know’ basis and public disclosure shall be made with appropriate approval or as legally mandated.
Directors/Senior Management shall ensure that all confidential information available to them by virtue of the office they hold is never directly or indirectly released to any person or entity, or made public, otherwise than as stated above.
CONDUCT OF BUSINESS RELATIONSHIP
The Company expects all its business to be conducted in a legal and ethical manner. Profits by no means justify use of unfair / unethical business practices.
Directors / Senior Management shall not make any promises or commitments that the Company does not intend or would not be able to honour. Also, they should not be engaged, directly or indirectly, in any act, dealing or conduct likely to bring discredit to the Company.
Directors / Senior Management must uphold the highest standards of integrity and ethics in every kind of third party dealings. They shall not give, offer, or authorize the offer, directly or indirectly, of anything of value (tangible or intangible) to any third party to obtain any improper advantage.
A contribution or entertainment shall not be offered to anyone in the course of business that might create the appearance of an impropriety. However some modest and acceptable corporate gifts etc. appropriate to give in the normal course of business practice may be acceptable.
PROTECTION & PROPER USE OF COMPANY’S ASSETS & RESOURCES
Directors / Senior Management shall as far as practicable, protect the Company’s assets from loss, damage, misuse or theft and ensure that the assets are only used for business purposes and other purposes specifically approved by Management and must never be used for unauthorized purposes.
Directors / Senior Management shall not apply the Company’s assets / resources and/or proprietary information for personal benefit and/or for the benefit of any other related party.
CORPORATE OPPORTUNITY
All Directors/Senior Management are prohibited from taking for themselves business opportunities that arise through the use of corporate property, information or position. They shall not use corporate property, information or position for personal gain, and compete with the Company.
INTERACTION WITH MEDIA
To facilitate the achievements of the Company’s vision and business plan, it is necessary to communicate the policies, plans and accomplishments in the most effective manner through the media to our investors, customers, existing and potential, other stakeholders and to community at large.
All statements made to the media on behalf of the Company should be true and fair. Only persons duly authorized by management are allowed to interact with media on specified subjects.
Directors/Senior Management shall not disclose non public information selectively to a particular group as it may lead to unfair advantage/discrimination.
FAIR DEALING
Director / member of the Senior Management shall not take a discriminatory stance towards or give unfair advantage to the Company's employees, customers, suppliers, or competitors through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.
No discrimination shall be done on the basis of caste, religion, sex, nationality or disability of any kind towards any employees, customers, suppliers, or any business partner.
ATTENDANCE AND PARTICIPATION IN BOARD MEETING
Every Director :
should make reasonable efforts to attend Board Meeting and Committee meetings regularly;
must bring an independent and open mind to Board or Committee and should not make a decision about a matter before attending and participating in the deliberations of the meetings;
should share his knowledge and experience on all the agenda during the meeting proceedings.
INSIDER TRADING
Directors/Senior Management shall not derive benefit or assist others to derive benefit by giving share price sensitive information. All Directors/Senior Management shall not use or proliferate information which is not available to the investing public and which therefore constitute insider information for making or giving advice or investment decisions on the securities of the Company on which such insider information has been obtained.
The Code of Conduct for prevention of insider trading in respect of securities of the Company in force for Directors and certain categories of Employees. They shall abide by the said code of conduct.
EXPENSES CLAIMS
All Directors/Senior Management are prohibited from claiming the expenses that are incurred for personal purposes. The expenses incurred in the course of employment and relating to the business are to be claimed as per the authorization of the Company.
COMPETITION POLICY
The Company shall compete only in an ethical and legitimate manner. It prohibits all actions that are anti-competitive or otherwise contrary to laws that govern competitive practices in the marketplace.
FREE AND FAIR COMPETITION/ANTITRUST
Most countries have well-developed bodies of law designed to encourage and protect free and fair competition. The Company is committed to obeying both the letter and spirit of these laws. The consequences of not doing so can be severe for all of us.
These laws often regulate the Company's relationships with its distributors, sub brokers, remissor, dealers, and clients. As a general rule, contacts with competitors should be limited to formal forums and should always avoid casual/careless mention on subjects such as business plans, prices or other terms and conditions of sale, customers, and suppliers.
GIFTS, HOSPITALITY AND DONATIONS
All the Directors/Senior Management are prohibited from either receiving or offering to make directly or indirectly, any illegal payment, remuneration, gifts, donations, hospitality of any kind or comparable benefits which are intended to or perceived to obtain business or uncompetitive favours for the conduct of its business. The Directors/Senior Management may honour, accept and offer nominal gifts, which are customarily given and are of a commemorative nature, for special events.
REPORTING OF ILLEGAL OR UNETHICAL BEHAVIOUR (WHISTLE BLOWER MECHANISM)
The Company shall promote ethical behavior in all its business activities.
Employees are free to report existing/probable violations of laws, rules, regulations or unethical conduct to their immediate supervisor or such other person as may be notified by the management to the workgroups. Such reports received from any employee will be reviewed by the board from time to time.
Directors and Senior Management shall not attempt to suppress/conceal any such view or reporting.
The confidentiality of those reporting violations shall be protected and they shall not be subjected to any discriminatory practices.
HEALTH, SAFETY AND ENVIRONMENT
The Company believe in sustainable development and is committed to be a responsible corporate citizen.
To uphold the Company’s interest and preserve the quality of life of all concerned, the business and operations of the Company shall be conducted in an environmentally friendly manner and provide a safe and healthy working environment to its employees.
Directors and Senior Management shall ensure compliance with all applicable environmental, safety and health laws and regulations and internal policies.
ANNUAL CERTIFICATION
Every Directors and Members of Senior Management of the Company shall affirm compliance with the Code on annual basis. Such affirmation shall be in the form provided in the Annexure to this Code.
AMENDMENT, MODIFICATION AND WAIVERS
This code may be amended, modified or waived by the Board subject to appropriate applicable provisions of law, rules, regulation and guidelines.
As a general policy, the Board will not grant waivers to the Code. However, in extraordinary situation and for reasons to be recorded in writing, the Board may grant exemption from any one or more of the provisions of the code.
Place: Mumbai
Date: 10th December, 2007
By Order of the Board
For Varun Industries Limited
Sd/-
Kiran N. Mehta
Chairman and Managing Director
I have received, read and understood the Code of Business Conduct & Ethics for Directors and Senior Management of the Company;
I am bound by the said Code to the extent applicable to my functions as a member of the Board of Directors/ Senior Management of the Company;
During the Financial Year __________, I have complied with the provisions of the said Code;
I am not aware of nor am I party to any non-compliance with the said Code.