THE SANDESH LIMITED, AHMEDABAD
CODE OF BUSINESS CONDUCT AND ETHICS – JANUARY, 2006
Clause-49 of the Listing Agreement requires the Board of Company to lay down a code of conduct for all board members and senior management of the Company. Such code of conduct shall also be posted on the website of the Company. The compliance with such conduct shall also be affirmed by all board members and senior management personnel on an annual basis. Further the annual report of the Company shall contain a declaration to this effect by Chief Executive Officer.
Accordingly, a code of conduct for all board members and senior management of the Company has been laid down by the Board of Directors/ Senior Management of the Company.
CODE OF BUSINESS CONDUCT AND ETHICS.
I) INTRODUCTION :
This code of business conduct and ethics help ensure compliance with legal requirements and other standards of business conduct. All company employees and trainees are expected to read and understand this code of business conduct and ethics, uphold these standards in day to day activities, comply with all applicable policies and procedures, and ensure that all agents and contractors are aware of, understand and adhere to these standards.
Nothing in this code of business conduct and ethics, in any Company policies and procedure or in other related communications (verbal or written) shall constitute and shall not be construed to constitute a contract of employment for a definite term or a gurantee of confirmed employment. We are committed to continuously reviewing and updating our policies and procedure. Therefore, this code of business conduct and ethics supersedes all other such codes, policies, procedures, introductions, practices, rules or written or verbal representations to the extent they are inconsistent. The Company may update the code from time to time.
Please sign the acknowledgement form at the end of this Code of Business Conduct and Ethics and return the same to the H. R. Department indicating that you have received, read, understand and agree to comply with the code of business conduct and ethics. Each year as part of your annual review you will be asked to sign an acknowledgement indicating your continued understanding of the code of business conduct and ethics.
II) COMPLIANCE IS EVERYONE’S BUSINESS :
Ethical business conduct is critical to our business. As an employee, your responsibility is to respect and adhere to these practices. Many of these practices reflect legal or regulatory requirements. Violations of these laws and regulations can create significant liability for you, the Company, its directors, officers and other employees.
Violations of law, this code of business conduct and ethics or other Company policies or procedures by Company employees can lead to disciplinary action upto and including termination.
In all cases, if you are unsure about the appropriateness of an event or action, please seek assistance in interpreting the requirements of these practices by contacting the H. R. Department.
III) YOUR RESPONSIBILITIES TO THE COMPANY AND ITS STOCKHOLDERS:
A) GENERAL STANDARDS OF CONDUCT:-
The company expects all employees, agents and contractors to exercise good judgement to ensure the safety and welfare of employees, agents and contractors and to maintain a co-operative, efficient, positive harmonious and productive work environment and business organisation. These standards apply while working on our premises, at offsite locations where our business is being conducted, at Company sponsored business and social events, or at any other place where you are a representative of the Company. In addition, on client locations, you may be required to adhere to the clients’ code of conduct as well. Employees, agents or contractors who engage in misconduct or whose performance is unsatisfactory may be subject to corrective action, upto and including termination.
i) WORK PLACE FREE OF HARASSMENT:
The company is committed to providing a work environment free of unlawful harassment. The Company’s anti-harassment policy applies to all persons involved in the operation of the Company and prohibits unlawful harassment by any employee of the Company towards other employees including supervisors, outside vendors, clients. If you believe that you have been unlawfully harassed, submit a complaint to your own or any other company supervisor.
If you have any questions relating to what constitutes discrimination or harassment, or if you have any other questions or concerns pertaining to discrimination or harassment, contact the H. R. Department.
ii) DRUG AND ALCOHOL ABUSE:
To meet our responsibilities to employees, customers and investors, the Company must maintain a healthy and productive work environment. Misusing controlled substances or selling, manufacturing, distributing, processing, using or being under the influence of illegal drugs and alcohol on the job is absolutely prohibited.
iii) SAFETY IN WORK PLACE:
The safety of people in the work place is a primary concern of the Company. Each of us must comply with all applicable health and safety policies. We maintain compliance with all applicable laws to maintain secure and healthy work surroundings. Questions about these laws and guidelines should be directed to the H.R. Department.
iv) DRESS CODE AND OTHER PERSONAL STANDARDS:
Because each of us is a representative of the Company in the eyes of the public, we must report to work properly groomed and wearing appropriate clothing. Employees are expected to dress neatly and in a manner consistent with the nature of the work performed. When visiting or working on a client site, employees will adhere to the dress standards maintained at that particular customer site.
v) EXPENSE CLAIMS:
All business related expense claims must be authorised by the Manager of the employee before the incurrence. The reimbursement of expense must be claimed normally within 30 days of incurring the expenditure.
Personal expense will not be reimbursed by the Company. To know the individual business expenditure limit employees should contact the H.R. Department.
B) APPLICABLE LAWS :
All Company employees, agents and contractors must comply with all applicable laws, regulations, rules and regulatory orders. Each employee, agent and contractor must acquire appropriate knowledge of the requirements relating to his or her duties sufficient to enable him or her to recognize potential dangers and to know when to seek legal advice on specific company policies and procedures. Violations of laws, regulations, rules and orders may subject the employee, agent or contractor to individual criminal or civil liability, as well as to discipline by the Company. Such individual violations may also subject the Company to civil or criminal liability or the loss of business.
C) CONFLICTS OF INTEREST:
Each of us has a responsibility to the Company, our stockholders and each other. Although this duty does not prevent us from engaging in personal transactions and investments, it does demand that we avoid situations where a conflict of interest might occur or appear to occur. The Company is subject to scrutiny from many different individuals & organizations. We should always strive to avoid even the appearance of impropriety.
All employees must avoid situations involving actual or potential conflict of interest. Personal involvement with competitor, supplier, subordinate employee of the Company, which impairs an employee’s ability to exercise good judgement on behalf of the Company, creates an actual or potential conflict of interest.
An employee involved in any of the types of relationships or situations described in this policy should immediately and fully disclose the relevant circumstances to his or her immediate supervisor, or any other appropriate supervisor, for a determination about whether a potential or actual conflict exist. If an actual or potential conflict is determined, the Company may take whatever corrective action appears appropriate according to the circumstances. Failure to disclose facts shall constitute grounds for disciplinary action.
MEANING OF CONFLICT OF INTEREST :
A conflict of interest exists where the interests or benefits of one person or entity conflict with the interests or benefits of the Company. Examples include.
i) EMPLOYMENT/ OUTSIDE EMPLOYMENT
In consideration of your employment with the Company, you are expected to devote your full attention to the business interests of the Company. You are prohibited from engaging in any activity that interferes with your performance or responsibilities to the Company or is otherwise in conflict with or prejudicial to the Company. Our policies prohibit any employee from accepting simultaneous employment with a company supplier, customer, developer or competitor, or from taking part in any activity that enhances or supports a competitor’s position. Additionally, you must disclose to the Company any interest that you have that may conflict with the business of the Company. If you have any questions on this requirement, you should contact your supervisor or the H.R. Department.
ii) BUSINESS INTERESTS:
If you are considering investing in a Company customer, supplier, developer or competitor, you must first take great care to ensure that these investments do not compromise your responsibilities to the Company. Many factors should be considered in determining whether a conflict exists, including the size and nature of the investment, your ability to influence the Company’s decisions, your access to confidential information of the Company or of the other Company, and the nature of the relationship between the Company and the other Company.
iii) RELATED PARTIES :
As a general rule, you should avoid conducting Company business with a relative, or with a business in which a relative is associated in any significant role. Relatives include spouse, siblings, children, parents, grand parents, grand children, aunts, uncles, nieces, nephews, cousins, step relationships and in-laws. In case the same is unavoidable, it must be conducted free of any preferential treatment.
Related party transactions involving the Company’s directors or executive officers must be disclosed in proper manner under the requirements of accounting rules, SEBI, Companies Act, 1956.
Similarly the employment of relatives of employees/ directors/ executives must not in any way jeopardize Company’s working or Company’s interest.
iv) OTHER SITUATIONS :
Since other conflicts of interest may arise, it would be impractical to attempt to list all possible situations. If a proposed transaction or situation raises any questions or doubts in one’s mind, one should consult the Legal Department or H.R. Department.
D) CORPORATE OPPORTUNITIES:
Employees, Officers and Directors may not exploit for their own personal gain opportunities that are discovered through the use of corporate property, information or position unless the opportunity is disclosed fully in writing to the Company’s Board of Directors.
E) PROTECTING THE COMPANY’S CONFIDENTIAL INFORMATION:
The Company’s confidential information is a valuable asset. Every employee, agent and contractor must safeguard it. This responsibility includes not disclosing the Company’s confidential information such as information regarding the Company services or business over the inter-net. You are also responsible for properly labeling any and all documentation shared with or correspondence sent to the Company’s Legal Department or outside counsel as ‘Strictly Confidential’. This responsibility includes the safeguarding, securing and proper disposal of confidential information in accordance with the Company’s policy on maintaining and managing records. This objection extends to confidential information of third parties, which the Company has rightfully received under Non-disclosure Agreements.
F) OBLIGATIONS UNDER SECURITIES LAWS “INSIDER TRADING” :
In the normal course of business, officers, directors, employees, agents, contractors and consultants of the Company may come in to possession of significant price sensitive information. This information is the property of the Company. You may not profit from it by buying or selling securities yourself. Further you are not to tip others to enable them to profit or for them to profit on your behalf. The purpose of this policy is both to inform you of your legal responsibilities and to make clear to you that the misuse of price sensitive information is contrary to Company policy and applicable laws.
Insider Trading rules are strictly enforced, even in instances when the financial transactions seem small.
For more details, you should read the Company’s Insider Trading Rules carefully, paying particular attention to the specific policies and the potential criminal and civil liability and/ or disciplinary action for Insider Trading violations. You should comply with the Company’s Insider Trading Rules, follow the pre-clearance procedures for trading and trade only during a trading window.
G) USE OF COMPANY’S ASSETS:
i) GENERAL :
Protecting the Company’s assets is a key responsibility of every employee, agent and contractor. Care should be taken to ensure that assets are not mis-appropriated, loaned to others or sold or donated, without appropriate authorization. All Company employees, agents and contractors are responsible for the proper use of Company’s assets, and must safeguard such assets against loss, damage, misuse or theft. Employees, agents or contactors who violate any aspect of this policy or who demonstrate poor judgement in the manner in which they use any Company asset may be subject to disciplinary action, up to and including termination of employment or business relationship at the Company’s sole discretion. Company equipment and assets are to be used for Company business purposes only.
ii) COMPANY FUNDS :
Every Company employee is personally responsible for all Company funds over which he or she exercises control. Company agents and contractors should not be allowed to exercise control over Company funds. Company Funds must be used only for Company business purpose. Every Company employee, agent and contractor must take reasonable steps to ensure that the Company receives good value for Company Funds spent and must maintain accurate and timely records of each and every expenditure. Expense reports must be accurate and submitted in a timely manner. Company employees, agents and contractors must not use Company Funds for any personal purpose.
iii) SOFTWARE :
All software used by employees to conduct Company business must be appropriately licensed. Never make or use illegal or unauthorized copies of any software, whether in the office, at home or on the road, since doing so may constitute copyright infringement and may expose you and the Company to potential civil and criminal liability. In addition, use of illegal or unauthorized copies of software may subject the employee to disciplinary action, upto and including termination.
iv) ELECTRONIC USAGE :
The purpose of this policy is to make certain that employees utilize electronic communication devices in a legal, ethical and appropriate manner. The policy addresses the Company’s responsibilities and concerns regarding the fair and proper use of all electronic communications devices with in the organization, including computers, e-mail, connections to the Internet, Intranet, and extranet and any other public or private networks, voice mail, video conferencing, facsimiles, and telephones. Posting or discussing information concerning the Company’s services or business on the internet without the prior written consent of the Company’s CFO is prohibited. Any other form of electronic communication used by employees currently or in the future is also intended to be encompassed under this policy. It is not possible to identify every standard and rule applicable to the use of electronic communications devices. Employees are therefore encouraged to use sound judgement whenever using any feature of Company’s communications systems..
H) MAINTAINING AND MANAGING RECORDS :
The purpose of this policy is to set forth and convey the Company’s business and legal requirements in managing records, including all recorded information regardless of medium or characteristics. Records include paper documents, compact disk, computer hard disks, e-mail, floppy disks, microfiche, microfilm or all other media. The Company is required by applicable laws, rules and regulations to retain certain records and to follow specific guidelines in managing its records. Civil and criminal penalties for failure to comply with such guidelines can be severe for employees, agents, contractors and the Company and failure to comply with such guidelines may subject the employee, agent or contractor to disciplinary action upto and including termination of employment or business relationship.
I) PAYMENT PRACTICES :
i) ACCOUNTING PRACTICES :
The Company’s responsibilities to its stockholders and investing public require that all transactions be fully and accurately recorded in the Company’s books and records in compliance with all applicable laws. All required information shall be accessible to the Company’s Auditors and other authorised persons and Government Agencies. False or misleading entries, unrecorded funds or assets or payments without appropriate supporting documentation and approval are strictly prohibited and violate company policy and the law. There shall be no willful omissions of any Company transaction from the books and records, no advance income recognition and no hidden bank accounts and funds. Any willful material misrepresentation of and/ or misinformation of the financial accounts and reports shall be regarded as a violation of the code apart from inviting appropriate civil or criminal action under the relevant laws. Additionally, all documentation supporting a transaction should fully and accurately describe the nature of the transaction and be processed in a timely fashion.
ii) POLITICAL CONTRIBUTION :
The Company reserves the right to communicate its position on important issues to elected representatives and other government officials. It is the Company’s policy to comply fully with all applicable laws, rules and regulations regarding political contributions. The Company’s funds or assets must not be used for or be contributed to, political campaigns or political practices under any circumstances without the prior written approval of the Company’s Corporate Counsel and, if required, the Board of Directors.
iii) PROHIBITION OF INDUCEMENTS :
Under no circumstances may employees, agents or contractors offer to pay, make payment, promise to pay or issue authorization to pay any money, gift or anything of value to customers, vendors, consultants etc. that is perceived as intended, directly or indirectly to improperly influence any business decision, any act or failure to act, any commitment of fraud or opportunity for the commission of any fraud.
IV) RESPONSIBILITIES TO OUR CUSTOMERS AND OUR SUPPLIERS:
A) CUSTOMER RELATIONSHIP:
If your job puts you in contact with any Company customers or potential customers, it is critical for you to remember that you represent the company to the people with whom you are dealing. Act in a manner that creates value for our customers and helps to build a relationship based upon trust. The Company and its employees have provided services for many years and have built up significant goodwill over the time. This goodwill is one of our most important assets, and the Company employees, agents and contractors must act to pressure and enhance our reputation.
B) PAYMENTS OR GIFTS FROM OTHERS:
Under no circumstances may employees, agents or contractors accept any offer, payment, promise to pay, or authorization to pay any money, gift or anything of value from customers, vendors, consultants etc. that is perceived as intended, directly, or indirectly, to influence any business decision, any act or failure to act, any commission of any fraud.
Gifts given by the Company to suppliers or customers or received from suppliers or customers should always be appropriate to the circumstances and should never be of a kind that could create an appearance of impropriety. The nature and cost must always be accurately recorded in the Company’s books & records.
C) PUBLICATION OF OTHERS:
The Company subscribes to many publications and help employees to do their jobs better. These include newsletters, reference works, online references services, magazines, books. Copyright law generally protects these works and their unauthorized copying and distribution constitute copyright infringement . You must first obtain the consent of the publisher of a publication before copying publications or significant part of them. Any doubtful copying of publication may be done only under appropriate legal advice.
D) HANDLING THE CONFIDENTIAL INFORMATION OF OTHERS:
The Company has a range of business relationships with many companies and individuals. Sometimes, they will volunteer confidential information about their products or business plans to induce the Company to enter in to a business relationship. At other times, we may request that a third party provide confidential information to permit the Company to evaluate a potential business relationship with that party. Whatever the situation, we must take special care to handle the confidential information of others responsibly.
E) SELECTING SUPPLIERS:
The Company’s suppliers make significant contributions to our success. To create an environment where our suppliers have an incentive to work with the Company, they must be confident that they will be treated lawfully and in an ethical manner. The Company’s policy is to purchase supplies based on need, quality, service, price and terms and conditions. Under no circumstances should any Company employee, agent or contractor attempt to coerce suppliers in any way. The confidential information of a supplier is entitled to the same protection as that of any third party and must be received under appropriate non-disclosure agreement. In some cases where the products or services have been designed, fabricated, or developed to our specifications the agreement between the parties may contain restrictions on sales.
F) GOVERNMENT RELATIONS:
It is the Company’s policy to comply fully with all applicable laws and regulations governing contact and dealings with Government employees and public officials, and to adhere to high, ethical, moral and legal standards of business conduct. This policy includes strict compliance with applicable laws, rules and regulations.
G) FREE AND FAIR COMPETITION:
Competition laws generally address the following areas: pricing practices (including price discrimination), discounting, terms of sale, credit terms, promotional allowances, secret rebates, exclusive dealerships or distributorships, product bundling, restrictions on carrying competiting products, termination and many other practices.
Competition law also governs, usually quite strictly, relationships between the company and its competitors. As a general rule, contacts with competitors should always avoid subjects such as prices or other terms and conditions of sale, customers and suppliers. Employees, agents or contractors of the Company may not knowingly make false or misleading statements regarding its competitors or the products of its competitors, customers or suppliers. Participating with competitors in a trade association or in a standard creation body is acceptable when the association has been properly established, has a legitimate purpose, and has limited its activities to that purpose.
No employee, agent or contractor shall at any time or under any circumstances enter in to an agreement or understanding, written or oral, express or implied, with any competitor concerning prices, discounts, other terms or conditions of sale, profits or profit margins, costs, allocation of product or geographic markets, allocation of customers, limitations on production, boycotts of customers or suppliers, or bids or the intent to bid or even discuss or exchange information on these subjects. In some cases, legitimate joint ventures with competitors may permit exceptions to these rules as may bonafide purchases from or sales to competitors on non-competitive products, but all such proposals should be reviewed legally in advance. These prohibitions are absolute and strict observance is required. Collusion among competitors is illegal, and the consequences of a violation are severe.
Waiver of the provision of code to any employee, agent, contractor or Board Members must be approved by CMD, which should be duly notified to Board.
VI) DISCIPLINARY ACTIONS :
The matters covered in this code of business conduct and ethics are of the utmost importance to the Company, its stockholders and its business partners, and are essential to the Company’s ability to conduct its business in accordance with its stated values. The Company expects all its employees, agents, contractors and consultants to adhere to these rules in carrying out their duties for the Company.
The Company will take appropriate action against the employee, agent, contractor or consultant whose actions are found to violate these policies or any policies of the Company. Where laws have been violated, the Company will co-operate fully with the appropriate authorities.
"Employees to whom the Code is applicable shall every year affirm to the Board of Directors their compliance with the Code in the format attached herewith as Annex A.
The Managing Director will make a declaration in the annual report for each year that the above affirmations have been received from the Employees. "
Compliance Certificate under the Code of Business Conduct
The Board of Directors,
The Sandesh Limited
Sub. Compliance with the Company’s Code of Business Conduct (“Code”) for the year ended ______
I, ________________________, state for the captioned period that