Code of Conduct

Sai Silks (Kalamandir) Limited

CODE OF CONDUCT OR ETHICS POLICY FOR DIRECTORS AND SENIOR MANAGEMENT

This Code of Ethics for Directors and Senior Management (“Code”) shall help maintain the Standards of business conduct for Sai Silks (Kalamandir Limited (“Company”). The purpose of this Code is to deter wrongdoing and promote ethical conduct. Ethical business conduct is critical to our business. Accordingly, the following officers (hereinafter collectively referred to as “Officers”) are expected to read and understand this Code, uphold these standards in day-to-day activities, comply with all applicable laws, rules and regulations and all applicable policies adopted by the Company:

All Directors of the Company
“Senior management” of the Company i.e. all members of management one level below

the executive directors, including all general managers and functional heads.

1. Honest and Ethical Conduct

All Officers are expected to act in accordance with the highest standards of personal and professional integrity and maintain honest and ethical conduct while working on the Company’s premises at various locations where the Company’s business is being conducted or any other place where the Officers are representing the Company.

2. Conflict of Interest

Each of us has a responsibility towards 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 and organizations. We should always strive to avoid even the appearance of impropriety. All Officers must avoid situations involving actual or potential conflict of interest. Personal involvement with a competitor, supplier, or subordinate employee of the company, which impairs an employee’s ability to exercise good judgment on behalf of the Company, creates an actual or potential conflict of interest..

An Officer involved in any of the types of relationships or situations described in this Code should immediately and fully disclose the relevant circumstances to his or her immediate supervisor, if any, or any other appropriate supervisor, or the Managing Director, for a determination about whether a potential or actual conflict exists. 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.

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 any other company with which the company is in discussions or negotiations 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, please contact the Human Resources Department.

(ii) Outside Directorships

It is a conflict of interest to serve as a director of any company that competes with the Company. Our policy requires that all personnel (other than Directors) obtain approval from the Managing Director before accepting a directorship. Such approval may be conditioned upon the completion of specified actions. Directors are required to disclose their directorships in other companies to the Board of Directors and the Company Secretary from time to time.

(iii) Business Interests

If you are considering investing in an Entity which is a 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.

(iv) 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. Explanation: For the purposes of above, the term “Relatives” means to include relatives as defined in Section 6 of the Companies Act, 1956 and includes spouse, father, mother, son etc.

Officers and Directors of the Company shall disclose any related party transactions to the Board from time to time. Related party transactions of Officer of a value equal to or greater than Rs. 5,00,000 in any financial year must be reviewed and approved in writing in advance by the Company’s Board of Directors. The Company must report all such material, related party transactions, under applicable rules and Regulations, by/ under SEBI, Companies Act 1956, and securities market rules. Any dealings with a related party must be conducted in such a way that no preferential treatment is given to this business.

Explanation: For the purposes of above, the term “Related Party transactions” means as defined in Accounting Standard 18 and includes the following:

Purchase / sale of goods
Purchase / sale of fixed assets
Rendering or receiving of services
Agency arrangements
Leasing or hire purchase arrangements
Transfer of research and development, expertise, technology or effort
Licence agreements
Financing including loans and equity contributions in cash or in kind
Provision of guarantees and collaterals
Entering into management contracts for deputation of employees

Explanation: For the purposes of above, the term “Related Parties” means as defined in Accounting Standard 18 and includes the following:

a. Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise;
b. Associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;
c. Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individuals;
d. Key management personnel and relatives of such personnel; and
e. Enterprises over which any person described in (c) or (d) above is to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise or enterprises that have a member of key management in common with the reporting enterprise.

The Company discourages the employment of relatives in positions or assignments within the same department and prohibits the employment of such individuals in positions that have a financial or other dependence or influence (e.g., an auditing or control relationship, or a supervisor/subordinate relationship).

The purpose of this policy is to prevent the organizational impairment and conflicts that are a likely outcome of the employment of relatives or significant others, especially in a supervisor/subordinate relationship. If a question arises about whether a relationship is covered by this policy, the Human Resources Department is responsible for determining whether an Officer’s acknowledged relationship is covered by this policy and the decision. The Human Resources Department shall advise all affected Officers of this policy. Willful withholding of information regarding a prohibited relationship/reporting arrangement will be subject to corrective action, up to and including termination. If a prohibited relationship exists or develops between two Officers, the Officer in the senior position must bring this to the attention of his/her supervisor/Managing Director.

The Company retains the prerogative to separate the individuals at the earliest possible
time, either by reassignment or by termination, if necessary.

(v) Other Situations

In situations other then the above mentioned you may approach the Human Resources Department or Whole-time Directors for clarification.

3. Corporate Opportunities

Officers may not exploit for the ir 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 and the Board declines to pursue such opportunity.

4. Insider Trading

Obligations under Indian securities laws apply to everyone as the Company is listed on the Indian stock exchanges. In the normal course of business, Officers of the Company may come into possession of Unpublished, Significant, Price Sensitive information. This information is the property of the Company. You have been entrusted with it. 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 Code is both to inform you of your legal responsibilities and to make clear to you that the misuse of sensitive information is contrary to Company policy and applicable Indian securities laws.

Insider trading is a crime, penalized by fines and imprisonment for individuals. In addition, the Securities and Exchange Board of India may seek the imposition of huge penalty. Insider traders must also disgorge any profits made, and are often subjected to an injunction against future violations. Finally, insider traders may be subjected to civil liability in private lawsuits.

Insider trading rules are strictly enforced, even in instances when the financial transactions seem small. You should read the Insider Trading Rules of the Company 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.

Officers of the Company who violate this Policy will also be subject to disciplinary action by the Company, which may include termination of employment or of business relationship. All questions regarding the Company’s Insider Trading Rules should be directed to the Legal Department. Code of Conduct on Insider Trading has been formed and adopted by the board.

5. Prohibition against Short Selling of Company Stock

No Officer may, directly or indirectly, sell any equity security, including derivatives, of the Company in violation of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.

6. 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 and sufficient to enable them to recognize potential dangers, and to know when to seek advice from the legal department. Violations of applicable government laws, rules and regulations may subject Officers to individual criminal or civil liability as well as to disciplinary action by the Company. Such individual violations may also subject the Company to civil or criminal liability or the loss of reputation or business.

7. Violations of the Code

Part of the job of an Officer is to help enforce this Code. Officers must report all possible violations of this Code to the Human Resources department. Officers must cooperate in case of any internal or external investigation of possible violations. Reprisal, threat, retribution or retaliation against any person who has, in good faith, reported a 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.

Disciplinary action by the Company may include termination of employment or of business relationship at the sole discretion of the Company. 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.

8. Whistle Blower Mechanism

The Company promotes ethical behaviour in all its business activities and has put in place mechanism of reporting illegal or unethical behaviour. Employees may report violations of laws, rules, regulations or unethical conduct to the reporting authority/ notified person. The complaints received from employees will be reviewed by the reporting authority. The Directors and management personnel are obligated to maintain confidentiality of such reporting and ensure that the whistle blowers are not subjected to any discriminatory practices.