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TREND ELECTRONICS LIMITED - CODE OF CONDUCT
NEED & OBJECTIVE OF THE CODE
The Company has been believing and following the principles of fairness, kindness, efficiency, quality and effectiveness, since its incorporation. These core values translate into the Company’s culture and principles which govern every sphere of its activities. The Company has always given importance to the building up of the confidence of investors and thereby increasing the shareholders’ value.
In terms of the Clause 49 of the Listing Agreement(s) entered with the Stock Exchanges in India, the Company is required to lay down a Code of Conduct (the “Code”) for its Board of Directors and the Senior Management.
The Code is intended to provide guidance and help in recognizing and dealing with ethical issues, provide mechanisms to report unethical conduct and to help foster a culture of honesty and accountability. Directors are required to pursue the highest standards of ethical conduct in the interests of all stakeholders.
COMPANY’S BELIEF AND PHILOSOPHY
The Company believes that its Board and Senior Management are entrusted with and are responsible to operate and manage the business in an honest, fair, diligent and ethical manner. They have a responsibility to carry out their duties in a businesslike manner and within the scope of their authority, as set forth in the laws of India as well as in the Memorandum and Articles of Association of the Company.
The Code attempts to set forth the guiding principles on which the Company shall operate and conduct its routine activities and daily business with its stakeholders, government and other regulatory agencies, media as also anyone else with whom the Company is connected. The Company recognizes that the Board is a trustee and custodian of stakeholders and in order to fulfill its fiduciary obligations and responsibilities, the Board has to maintain and continue to enjoy the trust and confidence of the stakeholders and also of overall public at large.
The Code shall apply to:
i.all Directors of the Company, whether executive or non executive, including Nominee Directors; and
ii.all Senior Management Executives
Senior Management Executives shall include:
a) Business Heads, Unit Heads, Presidents, Joint Presidents and all other executives having similar or equivalent rank in the Company by whatever designation;
b) all employees of the Company, reporting directly to the Managing / Whole-Time Director of the Company, irrespective of their grades; and
c) Company Secretary of the Company.
The applicability to the Board of Directors and/or the Senior Management will depend on context of Code of Conduct.
The Company Secretary shall be the Compliance Officer for the purpose of this Code.
The Code shall come into force with effect from 1st January, 2006 and future amendment(s)/modification(s) shall take effect from the date stated therein.
PRINCIPLES AND GUIDELINES OF CODE OF CONDUCT
a) Conflict of Interest:
Every member of the Board of Directors and the Senior Management has responsibility towards the Company, its stakeholders and does not prevent them from engaging in personal transactions and investments but it does demands that they avoid situations where 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:
• Involvement/Interference - The Non-Executive Directors and the Senior Management 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.
• Business Interests - If any member of the Board of Directors or the Senior 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 towards 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 business of the Company.
• Related Parties - As a general rule, the Directors and the Senior Management should avoid conducting Company's business with a relative or any other person or a firm, Company, Association in which the relative or other person is associated in any significant role. Relatives shall have the same meaning as defined in Section 6 of the Companies Act, 1956.
If such a related party transaction is unavoidable, they must fully disclose the nature of the related party transactions to the Board. Any dealings with a related party must be conducted in such a way that no preferential treatment is given to that party.
In case of any other transaction or situation giving rise to conflicts of interests, details of the same shall be promptly informed to the Board and the Board should, after due deliberations, decide on the impact on the Company and its business.
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 Directors and the Senior 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.
c) Honesty and Integrity:
The Board of Directors and the Senior Management Executives shall act in accordance with the highest standards of integrity, honesty, fairness and ethical conduct while working for or while representing the Company. The Board of Directors and the Senior Management Executives should promote ethical behavior and take steps to ensure that the Company promotes ethical behavior. The Company also encourages its employees to freely report any violation of laws, rules, regulations or the Company’s Code of Conduct to the Managing Director.
The Board of Directors and the Senior Management Executive must maintain confidentiality in respect of sensitive information (that is not in public domain) relating to the affairs of the Company acquired in the course of their service as Directors or Senior Management. The information shall be disclosed only when it is legally required.
e) Legal Compliance:
The Directors and the Senior Management of the Company must comply with the applicable laws, regulations, rules and regulatory orders. They should report to the Board and to the concerned authorities, compliance; and any inadvertent non-compliance, if detected.
f) Insider Trading:
The Board of Directors and the Senior Management Executive (“SME”) shall not deal in the securities of the Company either from their own account or from their relative’s account if they are in possession of any unpublished price sensitive information. Further, the Board of Directors or the SME shall not disclose such price sensitive information, whether directly or indirectly to any other person who can or shall deal in such information.
g) Use of Assets:
The Board of Directors and the Senior Management shall use the property/assets of the Company with all reasonable endeavors to protect the same and to ensure its effective future use. It shall be the duty of the Board and SME to intimate the Company, well in advance its interests while dealing with the Company's assets and resources. Members of the Board of Directors and the Senior Management are prohibited from:
• using corporate property, information or position for personal gain;
• soliciting, demanding, accepting, or agreeing to accept anything of value from any person while dealing with the Company's assets and resources; and
• 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.
h) Gifts and Favours:
Directors and the Senior Management shall not accept any offer, payment, promise to pay, gift, or anything of value from customers, suppliers, shareholders/stakeholders, etc. that is perceived as intended, directly or indirectly to influence any business decision, any act or failure to act, any commission of fraud, or opportunity for the commission of any fraud.
The Code envisages and expects:
Maintenance of highest degree of Corporate Governance Practices.
That the Company shall affirm compliance with the Code on an annual basis as at the end of the each financial year of the Company.
Adherence to the highest standards of transparent and ethical conduct, including proper and ethical procedures in dealing with actual or apparent conflicts of interest between personal and professional relationships.
Fair and equitable treatment and accountability to all the stakeholders including customers, shareholders, employees and society at large.
That the Board of Directors and Senior Management to be familiar with the broad objective of the Company and the policies laid down by the government and the various laws and legislations.
Attendance at the Board meetings and participation in the deliberations and discussions effectively.
That the Board of Directors shall study the Board papers thoroughly and enquire about follow - up reports on definite time schedule.
Involve effectively in the matter of formulation of general policies.
To ensure confidentiality of the Company's agenda papers, notes and minutes.
Negative ethos to be defined precisely i.e. "what we shall not do".
• Violate local laws in spirit
• Dilute moral standards
• Engage in unethical practices
• Engage with anti social elements
Any waiver of any provision of the code for a Director, Senior Management or Employee must be placed for approval before the Board of Directors of the Company.
The matters covered in the Code are of utmost importance to the Company, its stakeholders and its business partners and are essential to the Company's ability to conduct its business in accordance with its value system.
I have received and read the Company's Code of Conduct and agree to comply with the same.