Code of Conduct

  1. Need and objective of the Code

  2. Company's belief system

  3. Philosophy of the Code

  4. General Standards of conduct

  5. Conflict of Interest

  6. Compliance with Governmental laws, Rules and Regulations/Internal Company Policies

  7. Disclosure Standards

  8. Use of Company's Assets and Resources

  9. Confidentiality and Fair Dealings

  10. Payment or Gifts from others

  11. Good corporate governance practices

  12. Violation of the Code

  13. Waivers and amendments of the Code

 

1. Need and objective of the Code
Clause 49 of the Listing Agreement entered into with the Stock Exchanges requires the listed entities to lay down a Code of Conduct for its Directors and its Senior Management as part of Corporate Governance. Senior Management has been defined to include personnel who are members of its Core Management and functional heads. Accordingly the Company has laid down this Code for its Directors on the Board and its Core Management, representing all Executives from the 'Manager' Grade and above i.e.

  1. Managers

  2. Vice Presidents

  3. Company Secretary

  4. Chief Financial Officer

  5. Presidents

 

2. Company's belief system
This Code of Conduct attempts to set forth the guiding principles on which the Company shall operate and conduct its daily business with its multitudinous stakeholders viz. shareholders, customers, creditors, employees, government, regulatory agencies, media and society at large. The Company acknowledges the need to uphold the integrity of every transaction it enters into and believes that honesty and integrity in its internal conduct would be judged by its external behaviour. The Company is conscious of the reputation it carries amongst its customers and public at large and shall endeavour to do all it can to sustain and improve upon the same in its discharge of obligations. The Company shall continue to initiate policies, which are customer centric and which promote financial prudence.

 

3. Philosophy of the Code
The Code envisages and expects: -

  1. Adherence to the highest standards of honest and ethical conduct, including proper and ethical procedures in dealing with actual or apparent conflicts of interest between personal and professional relationships.

  2. Full, fair, accurate, sensible, timely and meaningful disclosures in the periodic reports required to be filed by the Company with government and regulatory agencies.

  3. Compliance with applicable laws, rules and regulations.

  4. To address misuse or misapplication of the Company's assets and resources.

  5. The highest level of confidentiality and fair dealing within and outside the Company.

 

4. General Standards of conduct
The Company expects all Directors and members of the Core Management to exercise good judgement, to ensure the interests, safety and welfare of customers, employees, and other stakeholders and to maintain a cooperative, efficient, positive, harmonious and productive work environment and business organization. The Directors and members of the Core Management while discharging duties of their office must act honestly and with due diligence. They are expected to act with that amount of utmost care and prudence, which an ordinary person is expected to take in his/her own business.



5. Conflict of Interest
A "conflict of interest" occurs when personal interest of any member of the Board of Directors and of the Core Management interferes or appears to interfere in any way with the interests of the Company. Every member of the Board of Directors and Core Management has a responsibility to the Company, its stakeholders and to each other. Although this duty does not prevent them from engaging in personal transactions and investments, it does demand that they avoid situations where a conflict of interest might occur or appear to occur. They are expected to perform their duties in a way that they do not conflict with the Company's interest such
as: -

  1. Employment / Outside Employment - The members of the Core Management are expected to devote their total attention to the business interests of the Company. They are prohibited from engaging in any activity that interferes with their performance or responsibilities to the Company or otherwise is in conflict with or prejudicial to the Company.

  2. Outside Directorship - It will be a conflict of interest to serve as a Director of any Company that competes with the Company. Directors must obtain prior written approval from the Chairman/ Managing Director of the Company before accepting such Directorship.

  3. Business Interests - If any member of the Board of Directors and Core Management considers investing in securities issued by the Company's customer, supplier or competitor, they should ensure that these investments do not compromise their responsibilities to the Company. Many factors including the size and nature of the investment; their ability to influence the Company's decisions; their access to confidential information of the Company, or of the other entity, and the nature of the relationship between the Company and the customer, supplier or competitor should be considered in determining whether a conflict exists. Additionally, they should disclose to the Company any interest that they have which may conflict with the business of the Company.

  4. Related Parties - As a general rule, the Directors and members of the Core Management should avoid conducting Company's business with a relative or any other person or any firm, Company, Association in which the relative or other person is associated in any significant role. Relatives shall have the meaning as defined in Section 6 of the Companies Act, 1956. If a related party transaction is unavoidable, they must fully disclose the nature of the related party transaction to the appropriate authority. Any dealings with a related party must be conducted in such a way that no preferential treatment is given to that party.

In the case of any other transaction or situation giving rise to conflicts of interests, the appropriate authority should after due deliberations decide on its impact.

 

6. Compliance with Governmental laws, Rules and Regulations/Internal Company Policies
Senior Executives must comply with all applicable governmental laws, rules and regulations. Senior Executives must acquire appropriate knowledge of the legal requirements relating to their duties sufficient to enable them to recognize potential dangers, and to know when to seek advice. Directors and Senior Executives must comply with the company's internal policies. They should report any inadvertent non-compliance, if detected subsequently, to the concerned authorities.

 

7. Disclosure Standards
The Company shall make full, fair, accurate, timely and meaningful disclosures in the periodic reports required to be filed with Government and Regulatory agencies. The members of Core Management of the Company shall initiate all actions deemed necessary for proper dissemination of relevant information to the Board of Directors, Auditors and other Statutory Agencies, as may be required by applicable laws, rules and regulations.

 

8. Use of Company's Assets and Resources
Each member of the Board of Directors and the Core Management has a duty to the Company to advance its legitimate interests while dealing with the Company's assets and resources. Members of the Board of Directors and Core Management are prohibited from :-

  1. Using corporate property, information or position for personal gain;

  2. Soliciting, demanding, accepting or agreeing to accept anything of value from any person while dealing with the Company's assets and resources;

  3. Acting on behalf of the Company in any transaction in which they or any of their relative(s) have a significant direct or indirect interest.

 

9. Confidentiality and Fair Dealings
Each member of the Board of Directors and the Core Management has a duty to the Company to advance its legitimate interests while dealing with the Company's assets and resources. Members of the Board of Directors and Core Management are prohibited from :-

  1. Company's Confidential Information
    The Company's confidential information is a valuable asset. It includes all trade related information, trade secrets, confidential and privileged information, customer information, employee related information, strategies, administration, research in connection with the Company and commercial, legal, scientific, technical data that are either provided to or made available to each member of the Board of Directors and the Core Management by the Company either in paper form or electronic media to facilitate their work or that they are able to know or obtain access by virtue of their position with the Company. All confidential information must be used for Company's business purposes only. This responsibility includes the safeguarding, securing and proper disposal of confidential information in accordance with the Company's policy on maintaining and managing records. To further the Company's business, confidential information may have to be disclosed to potential business partners. Such disclosure should be made after considering its potential benefits and risks. Care should be taken to divulge the most sensitive information, only after the said potential business partner has signed a confidentiality agreement with the Company and only after obtaining the prior permission of the appropriate authorities in the Company.

  2. Other Confidential Information
    The Company has many kinds 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 into a business relationship. At other times, the Company may request that a third party provide confidential information to permit the Company to evaluate a potential business relationship with that party. Therefore, special care must be taken by the Board of Directors and members of the Core Management to handle the confidential information of others responsibly. Such confidential information should be handled in accordance with the agreements with such third parties.

 

10. Payment or Gifts from others
Under no circumstances Directors and the members of Core Management shall 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 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. Before accepting anything which may not qualify as inexpensive or token gift from an employee of any entity, Chairman/Compliance Officer may be contacted. Gifts given by the Company to suppliers or customers, or received from suppliers or customers, should be appropriate to the circumstances and should never be of a kind that could create an appearance of impropriety.

 

11. Good corporate governance practices
Each member of the Board of Directors and those members of the Core Management of the Company who are invited/required to participate in the Board meetings of the Company should adhere to the following so as to ensure compliance with good Corporate Governance practices.

  1. Model Code of Conduct for the Board members

    • To act in accordance with the highest standard of personal and professional integrity, honesty and ethical conduct in the discharge of duties and promote professionalism in the Company.

    • To stay abreast of the affairs of the Company and be kept informed of the Company's compliance with relevant laws, rules and regulations.

    • To exercise independent judgment on issues of strategy, performance, policy matters etc.

    • To avoid and disclose actual and apparent conflicts of personal interest with the interest of the Company and to disclose all contractual interest, whether directly or indirectly, with the Company

    • To inform the Company immediately about emergence of any situation that may disqualify him from Directorship.

    • To maintain confidentiality of the Company's business.

    • To observe the "Code of Conduct for dealing in Equity Shares and other securities of the Company" framed under the SEBI (Prohibition of Insider Trading) Regulations, 1992 as amended from time to time.

    • Not to accept any offer, payment or anything of value from customers, vendors, consultants, etc. that is perceived as intended, directly or indirectly, to influence any business decision

    • Not to hold any office or place of profit in the Company by himself or by his relatives without full disclosure of information in connection therewith

    • Not to divert to his own advantage any business opportunity that the Company is in pursuit.

    • Not to compete, whether directly or indirectly, with the Company.

    • Not to charge personal expenses to the Company.

      This code of conduct is applicable to Senior Management personnel, which will normally cover all members of management one level below the Board including all functional heads.
       

  2. B. Model Code of Conduct for Members of Core Management

    • To act in accordance with the highest standard of personal and professional integrity, honesty and ethical conduct in the discharge of duties and promote professionalism in the Company.

    • To stay abreast of the affairs of the Company and be kept informed of the Company's compliance with relevant laws, rules and regulations.

    • To exercise independent judgment on issues of strategy, performance, policy matters etc.

    • To avoid and disclose actual and apparent conflicts of personal interest with the interest of the Company and to disclose all contractual interest, whether directly or indirectly, with the Company.

    • To inform the Company immediately about emergence of any situation that may disqualify him from Directorship.

    • To maintain confidentiality of the Company's business.

    • To observe the "Code of Conduct for dealing in Equity Shares and other securities of the Company" framed under the SEBI (Prohibition of Insider Trading) Regulations, 1992 as amended from time to time.

    • Not to accept any offer, payment or anything of value from customers, vendors, consultants, etc. that is perceived as intended, directly or indirectly, to influence any business decision

    • Not to hold any office or place of profit in the Company by himself or by his relatives without full disclosure of information in connection therewith

    • Not to divert to his own advantage any business opportunity that the Company is in pursuit.

    • Not to compete, whether directly or indirectly, with the Company.

    • Not to charge personal expenses to the Company.

 

12. Payment or Gifts from others
All Directors and members of the Core Management should help to enforce this code. Directors and members of the core Management should be alert to possible violations and report this to the Chairman/Compliance Officer of the Company. They must also co-operate in any internal or external investigations of possible violations. Reprisal, threats, 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 violation is prohibited.

 

13. 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(s). Any amendment/inclusion or waiver of any provision of this code must be approved by the Board of Directors of the Company and promptly disclosed on the Company's website.

 

 

 
 

Kothari Phytochemicals & Industries Ltd.
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