CODE OF CONDUCT FOR THE DIRECTORS AND SENIOR OFFICERS
It shall be obligatory for the Board of Directors of all listed Companies to lay down a code of conduct for all Board members and senior management of the Company in order to ensure good Corporate Governance.
I. CORPORATE GOVERNANCE
Corporate governance is about commitment to values and about ethical business conduct. It is about how an organization is managed. This includes its corporate and other structures, its culture, its policies and the manner in which it deals with various stakeholders. Accordingly, timely and accurate disclosure of information regarding the financial situation, performance, ownership and governance of the company, is an important part of corporate governance. This improves public understanding of the structure, activities and policies of the organization. Consequently, the organization is able to attract investors, and to enhance the trust and confidence of the stakeholders.
We believe that sound corporate governance is critical to enhance and retain investor trust. Accordingly, we always seek to attain our performance rules with integrity. The Board extends its fiduciary responsibilities in the widest sense of the term. Our disclosures always seek to attain the best practices in international corporate governance. We are also responsible to enhance long term shareholder value and respect minority rights in all our business decisions.
II. INTRODUCTION OF CODE (Preamble)
This Code of Ethics for Directors and Senior Executives (the “Code”) helps to maintain the standards of business conduct for MEMG Securities Limited (the “Company”) and ensures compliance with legal requirements particularly of Companies Act, SEBI Regulations and the Listing Agreement with Stock Exchanges. The purpose of the Code is to deter wrongdoing and promote ethical conduct. The matters covered in this Code are of utmost importance to the Company, our shareholders and our business partners. Further, these are essential so that we can conduct our business in accordance with our stated values.
The Code is applicable to the following persons, referred to as “Officers”:
Directors of the Company
Our Senior Management
Members of the Board of Subsidiary Company
Ethical business conduct is critical to our business. Accordingly, Officers are expected to read and understand this Code, uphold these standards in day-to-day activities, and comply with all applicable laws, rules and regulations, the ICDS Securities Code of Conduct, Service rules and all applicable policies and procedures adopted by the Company that govern the conduct of its employees.
Because the principles described in this Code are general in nature, Officers should also review the Company’s other applicable policies and procedures.
Officers should sign the acknowledgment form at the end of this Code and return the form to the HR department indicating that they have received, read and understood, and agree to comply with the Code. The signed acknowledgement form should be available with officers concerned. Each year, as part of their annual review, Officers will be asked to sign an acknowledgement indicating their continued understanding and adherence of the code.
III. HONEST AND ETHICAL CONDUCT
We expect all Officers to act in accordance with highest standards of personal and professional integrity, honesty and ethical conduct, while working on the Company’s premises, at offsite locations where the Company’s business is being conducted, at Company sponsored business and social events, or any other place where Officers are representing the Company.
We consider honest conduct to be conduct that is free from fraud or misrepresentation or deception. We consider ethical conduct to be conduct conforming to the accepted professional standards of conduct. Ethical conduct includes ethical handling of actual or apparent conflicts of interest between personal and professional relationships. This is discussed in more detail in Section IV below.
IV. CONFLICTS OF INTEREST
An Officer’s duty to the Company demands that he or she avoids and discloses actual and apparent conflicts 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:
Employment/Outside employment: With regard to the employment with the Company, Officers are expected to devote their full attention to the business interests of the Company. Officers are prohibited from engaging in any activity that interferes with their employment with the Company. Our policies prohibit Officers from accepting simultaneous employment with suppliers, customers, developers or competitors of the Company, or from taking part in any activity that enhances or supports a competitor’s position. Additionally, Officers must disclose to the Company’s Board of Directors (Board), any interest that they have that may conflict with the business of the Company.
Outside directorships: It is a conflict of interest to serve as a director of any company that competes with the Company. Officers must first obtain approval from the Company’s Board before accepting a directorship.
Business Interests: If an Officer is considering investing in any customer, supplier, developer or competitor of the Company, he or she must first take care to ensure that these investments do not compromise on their responsibilities to the Company. Our policy requires that Officers first obtain approval from the Company’s Board before making such an investment. Many factors should be considered in determining whether a conflict exists, including the size and nature of the investments, the Officer’s ability to influence the Company’s decisions, his or her access to confidential information of the Company or of the other company, and nature of the relationship between the Company and the other company. At the time of application for approval, full facts of the proposed investment shall be placed before the Committee.
Related parties: As a general rule, Officers should avoid conducting Company’s business with a relative, or have business in which a relative is associated in any significant role. A relative means and includes spouse, children, parents, grandparents, grandchildren, aunts, uncles, nieces, nephews, cousins, step relationships, and in-laws. Subject to the rules and regulation, the Company discourages the employment of relatives of Officers in key positions or assignments within the same department. Further, the Company prohibits the employment of such individuals in positions that have a financial dependence or influence (e.g. an auditing or control relationship, or a supervisor/subordinate relationship). Every employee drawing a monthly salary of Rs.10,000/- or more shall disclose whether he is a relative or not of any of our directors.
Payments or gifts from others: Under no circumstance the Officers shall accept any offer, payment, promise to pay, or authorisation 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 commitment of fraud, or opportunity for the commitment of any fraud. Inexpensive gifts, infrequent business meals, celebratory events and entertainment, provided that they are not excessive or create an appearance of impropriety, do not violate this policy. Questions regarding whether a particular payment or gift violates this policy are to be directed to Finance Department. Gifts given by the Company to suppliers or customers should 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 and records.
Corporate opportunities: Officers 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 and the Board declines to pursue such opportunity.
Interested Contracts: Except with the consent of the Board of Directors of the Company, any of the Director or his relative or a firm in which a director or his relative is a partner, any other partner in such a firm, or a private company of which the director is a member or director shall enter into any contract with the Company for sale, purchase or supply of goods, materials or services, or for underwriting the subscription of any shares in or debentures of the Company except for purchase or sale of goods for market price or such contracts which either party regularly trades or does business. For any clarification in this regard, the officers are requested to contact to the Finance Department / Secretarial Department / Legal Department.
Whistle Blower Policy: Employees who came across any unethical or improper practice (not necessarily a violation of law) shall be free to approach the Board without necessarily informing their supervisors. All officers are requested to inform their subordinates about their this right through an effective manner. For any clarification in this regard please contact Finance Department / Secretarial Department / Legal Department.
Other Situations: It would be impractical to attempt to list all possible situations. If a proposed transaction or situation raises any questions or doubts, please contact Finance Department.
V. COMPLIANCE WITH GOVERNMENTAL LAWS, RULES AND REGULATIONS
Officers must comply with all applicable governmental laws, rules and regulations, Officers must acquire appropriate knowledge of the legal requirements relating to their duties sufficient to enable them to recognise potential dangers, and to know when to seek advice from the Finance Department. Violations of applicable governmental laws, rules and regulations will lead to penal action as specified in the respective statutes. In any doubt about the compliance with laws rules/regulations /guidelines contact appropriate department of the Company.
VI. VIOLATIONS OF THE CODE
Part of an Officer’s job, and of his or her ethical responsibility, is to help enforce this Code. Officers should be alert against possible violations and report this to appropriate department. Officers must co-operate in any internal or external investigations of possible violations. Reprisal, threat, retribution or retaliation against any person who has, in good faith, reported a violation or a suspected violation of law, this Code or other Company policies, or against any person who is assisting in any investigation or process with respect to such a violation, is prohibited.
The Company will take appropriate action against any Officer whose actions are found to violate the Code or any other policy of the Company. Disciplinary actions may include immediate termination of employment at the Company’s sole discretion. Where the Company has suffered a loss, it may pursue its remedies against the individuals or entities responsible. Where laws have been violated, the Company will cooperate fully with the appropriate authorities.
VII. WAIVERS AND AMENDMENTS OF THE CODE
We are committed to continuously reviewing and updating our policies and procedures. Therefore, this Code is subject to modification. Any amendment or waiver of any provision of this Code must be approved in writing by the Company’s Board of Directors and promptly disclosed on the Company’s website and in applicable regulatory filings pursuant to applicable laws and regulations, together with details about the nature of amendment or waiver.