ZEL CODE OF CONDUCT 2015 For DIRECTORS AND SENIOR MANAGEMENT
Zenlabs Ethica Limited (ZEL), formerly known as Neelkanth Technologies Limited, is committed to maintain sound standards of Business Conduct and Corporate Governance.
The Board of Directors (the "Board") and the senior management of ZEL undertake to abide by following Code of Conduct adopted by the Board and affirm compliance with this Code on an Annual basis by acknowledging the same as provided in the end.
The Code is named as ZEL Code of Conduct, 2015 for The Board of Directors and Senior Management and has been framed in terms of Clause 17(5)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 effective from 1st December 2015.
The Code is applicable to all the members of The Board of Directors and Senior Management of the Company.
The term "Board Members" shall mean Directors on the Board of Directors of the Company, including Independent Directors.
The term "senior management" shall mean personnel of the company who are members of its core management team excluding Board of Directors. This would comprise all members of management one level below the executive directors, including all functional heads.
Conflicts of Interest:
The Directors and senior management should be scrupulous in avoiding "conflicts of interest" with the Company. This is an area in which it is impossible to provide comprehensive guidance but the guiding principle is that any event, activity or situation involving conflict or potential conflict of interest must be disclosed to Board for guidance and appropriate action.
Honest and Ethical Conduct:
The Directors and senior management shall act in accordance with the highest standards of personal and professional integrity, honesty and ethical conduct and use their powers of office, in good faith and in the best interests of the Company as a whole. The independent Directors shall in addition to satisfying the above requirements shall also comply with the duties cast on them by Part III of Schedule IV to the Companies Act, 2013, the extracts of which are appended in Annexure-A.
The Directors and senior management owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises and are expressly prohibited from improper use of information/property or taking improper advantage of their position.
The Directors and senior management shall maintain the confidentiality of confidential information of the Company or that of any customer, supplier or business associate of the Company to which Company has a duty to maintain confidentiality, except when disclosure is authorized or legally mandated. The Confidential information includes all non-public information (including private, proprietary, and other) that might be of use of competitors or disclosure of which might be harmful to the company or its associates. The use of confidential information for his/her own advantage or profit is also prohibited.
Protection and Proper Use of Company's Assets:
The Directors and senior management should protect Company's assets and property. Company's assets should be used only for legitimate business purposes.
Compliance with Laws, Rules, and Regulations:
The Directors and senior management shall endeavor to ensure compliance with all applicable laws, rules, and regulations applicable to the Company, Transactions, directly or indirectly, involving securities of the Company should not be undertaken without complying with Code of Conduct for Prohibition of Insider Trading.
COMPLIANCE WITH CODE OF CONDUCT
Each Director and senior management personnel shall adhere to this code of conduct and affirm compliance with the code as of 1st April, 2016
and thereafter on an annual basis in the prescribed format. Violation of this Code will lead to appropriate action.
The Board reserves the right to make amendments to the above code of conduct as and when felt necessary.
The above code of conduct was adopted by the Board of Directors of the Company in its Meeting held on 8th December, 2015.
EXTRACTS FROM PART III OF SCHEDULE IV TO THE COMPANIES ACT, 2013
- The independent directors shall undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the Company;
- They shall seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts at the expense of the Company;
- They shall strive to attend all meetings of the Board of Directors and of the Board committees of which they are members;
- They shall participate constructively and actively in the committees of the Board in which they are chairpersons or members;
- They shall strive to attend the general meetings of the Company;
- Where they have concerns about the running of the Company or a proposed action, they shall ensure that these are addressed by the Board and, to the extent that they are not resolved, they shall insist that their concerns are recorded in the minutes of the Board meeting;
- They shall keep themselves well informed about the Company and the external environment in which it operates;
- They shall jot unfairly obstruct the functioning of an otherwise proper Board or committee of the Board;
- They shall pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the Company;
- They shall ascertain and ensure that the Company has an adequate and functional vigil mechanism and ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use;
- They shall report concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy;
- They shall while acting within their authority, assist in protecting the legitimate interests of the Company, shareholders and its employees;
- They shall not disclose confidential information including commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law.
Terms and conditions of Appointment of Independent Directors
The terms and conditions of appointment of Independent Directors are subject to the extant provisions of the (i) applicable laws, including the Companies Act, 2013 ('2013 Act') and as per regulation 19 of SEBI (LODR) Regulation, 2015(as amended from time to time).
The broad terms and conditions of appointments as Independent Directors of the Company are reproduced hereunder:
The appointment will be for the period mentioned against their respective names ("Term"). The Company may disengage Independent Directors prior to completion of the Term subject to compliance of relevant provisions of the 2013 Act.
As Independent Directors, they will not be liable to retire by rotation. Reappointment at the end of the Term shall be based on the recommendation of the Nomination and Remuneration Committee and subject to the approval of the Board and the shareholders. The reappointment would be considered by the Board based on the outcome of the performance evaluation process and the directors continuing to meet the independence criteria.
The directors may be requested to be a member / Chairman of any one or more Committees of the Board which may be constituted from time to time.
2. Role, duties and responsibilities
A . As members of the Board, they along with the other Directors will be collectively responsible for meeting the objectives of the Board which include:
- Requirements under the Companies Act, 2013
- "Responsibilities of the Board" as outlined in the Corporate Governance requirements as prescribed by Stock Exchanges under SEBI (LODR), Regulation, 2015.
- Accountability under the Director's Responsibility Statement.
B . They shall abide by the 'Code For Independent Directors' as outlined in Schedule IV to section 149(8) of the 2013 Act, and duties of directors as provided in the 2013 Act (including Section 166) and as per regulation 19 of SEBI(LODR)regulation, 2015.
C . They are particularly requested to provide guidance in their area of expertise.
3. Time Commitment
They agree to devote such time as is prudent and necessary for the proper performance of their role, duties and responsibilities as an Independent Director.
As Independent Directors, they shall be paid sitting fees for attending the meetings of the Board and the Committees of which they are members. The sitting fees for attending each meeting of the Board and its Committees would be as determined by the Board from time to time.
In addition to the sitting fees, commission that may be determined by the Board may also be payable to them. In determining the amount of this commission, the Board supported by the Nomination and Remuneration Committee may consider performance of the Company and their performance as evaluated by the Board.
Further, the Company may pay or reimburse to the Director such expenditure, as may have been incurred by them while performing their role as an Independent Director of the Company. This could include reimbursement of expenditure incurred by them for accommodation, travel and any out of pocket expenses for attending Board/ Committee meetings, General Meetings, court convened meetings, meetings with shareholders/creditors/management, site visits, induction and training (organized by the Company for Directors) and in obtaining, subject to the expense being reasonable, professional advice from independent advisors in the furtherance of their duties as Independent Directors.
The Company will take an appropriate Directors' and Officers' Liability Insurance policy and pay the premiums for the same. It is intended to maintain such insurance cover for the Term of their appointment, subject to the terms of such policy in force from time to time.
6. Training and Development
The Company may, if required, conduct formal training program for its Independent Directors.
The Company may, as may be required, support Directors to continually update their skills and knowledge and improve their familiarity with the company and its business. The Company will fund/arrange for training on all matters which are common to the whole Board.
7. Performance Appraisal / Evaluation Process
As members of the Board, their performance as well as the performance of the entire Board and its Committees will be evaluated annually. Evaluation of each director shall be done by all the other directors. The criteria for evaluation shall be disclosed in the Company's Annual Report. However, the actual evaluation process shall remain confidential and shall be a constructive mechanism to improve the effectiveness of the Board / Committee.
8. Disclosures, other directorships and business interests
During the Term, they agree to promptly notify the Company of any change in their directorships, and provide such other disclosures and information as may be required under the applicable laws. They also agree that upon becoming aware of any potential conflict of interest with their position as Independent Directors of the Company, they shall promptly disclose the same to the Chairman and the Company Secretary.
During their Term, they agree to promptly provide a declaration under Section 149(7) of the 2013 Act, upon any change in circumstances which may affect their status as an Independent Director.
9. Changes of personal details
During the Term, they shall promptly intimate the Company Secretary and the Registrar of Companies in the prescribed manner, of any change in address or other contact and personal details provided to the Company.
They may resign from the directorship of the Company by giving a notice in writing to the Company stating the reasons for resignation. The resignation shall take effect from the date on which the notice is received by the Company or the date, if any, specified by them in the notice, whichever is later.
Their directorship on the Board of the Company shall cease in accordance with law. The Company may disengage Independent Directors prior to completion of Term (subject to compliance of relevant provisions of the 2013 Act) upon
- upon the director failing to meet the criteria for independence as envisaged in Section 149(6) of the 2013 Act.
CODE FOR INDEPENDENT DIRECTORS & NON - EXECUTIVE DIRECTORS
(This is an additional document and to be read in conjunction with code of conduct of the Company)
The Code is a guide to professional conduct for Independent Directors & Non-Executive Director. Adherence to these standards by Independent directors & Non-Executive Director and fulfilment of their responsibilities in a professional and faithful manner will promote confidence of the investment community, particularly minority shareholders, regulators and companies in the institution of Independent directors & Non-Executive Director.
I. Guidelines of professional conduct:
An Independent director & Non-Executive Director shall:
- Uphold ethical standards of integrity and probity;
- Act objectively and constructively while exercising his duties;
- Exercise his responsibilities in a bona fide manner in the interest of the company;
- Devote sufficient time and attention to his professional obligations for informed and balanced decision making;
- Not allow any extraneous considerations that will vitiate his exercise of objective independent judgment in the paramount interest of the company as a whole, while concurring in or dissenting from the collective judgment of the Board in its decision making;
- Not abuse his position to the detriment of the company or its shareholders or for the purpose of gaining direct or indirect personal advantage or advantage for any associated person;
- Refrain from any action that would lead to loss of his independence;
- Where circumstances arise which make an independent director lose his independence, the independent director must immediately inform the Board accordingly;
- Assist the company in implementing the best corporate governance practices.
II. Role and functions:
The Independent & Non-Executive Director shall:
- Help in bringing an independent judgment to bear on the Board's deliberation se specially on issues of strategy, performance, risk management, resources, key appointments and standards of conduct;
- Bring an objective view in the evaluation of the performance of board and management;
- Scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance;
- Satisfy themselves on the integrity of financial information and that financial control and the systems of risk management are robust and defensible;
- Safeguard the interests of all stakeholders, particularly the minority shareholders;
- Balance the conflicting interest of the stakeholders;
- Determine appropriate levels of remuneration of executive directors, key managerial personnel and senior management and have a prime role in appointing and where necessary recommend removal of executive directors, key managerial personnel and senior management;
- Moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between management and shareholder's interest.
The Independent & Non-Executive Director shall—
- Undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the company;
- Seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts at the expense of the company;
- Strive to attend all meetings of the Board of Directors and of the Board committees of which he is a member;
- Participate constructively and actively in the committees of the Board in which they are chairpersons or members;
- Strive to attend the general meetings of the company;
- Where they have concerns about the running of the company or a proposed action, ensure that these are addressed by the Board and, to the extent that they are not resolved, insist that their concerns are recorded in the minutes of the Board meeting;
- Keep themselves well informed about the company and the external environment in which it operates;
- Not to unfairly obstruct the functioning of an otherwise proper Board or Committee of the Board;
- Pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the company;
- Ascertain and ensure that the company has an adequate and functional vigil mechanism and to ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use;
- Report concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy;
- Acting within his authority, assist in protecting the legitimate interests of the company, shareholders and its employees;
- Not disclose confidential information, including commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law.
IV. Manner of appointment:
- Appointment process of Independent directors shall be independent of the company management; while selecting directors the Board shall ensure that there is appropriate balance of skills, experience and knowledge in the Board so as to enable the Board to discharge its functions and duties effectively.
- The appointment of independent director(s) of the company shall be approved at the meeting of the shareholders.
- The explanatory statement attached to the notice of the meeting for approving the appointment of independent director shall include a statement that in the opinion of the Board, the independent director & non –executive director proposed to be appointed fulfils the conditions specified in the Act and the rules made thereunder and that the proposed director is independent of the management.
- The appointment of independent directors & non –executive director shall be formalised through a letter of appointment, which shall set out:
A . The term of appointment;
B . The expectation of the Board from the appointed director; the Board-level committee(s) in which the director is expected to serve and its tasks;
C . The fiduciary duties that come with such an appointment along with accompanying liabilities;
D . Provision for Directors and Officers (D and O) insurance, if any;
E . The Code of Business Ethics that the company expects its directors and employees to follow;
F . The list of actions that a director should not do while functioning as such in the company; and
G . The remuneration, mentioning periodic fees, reimbursement of expenses for participation in the Boards and other meetings and profit related commission, if any.
- The terms and conditions of appointment of independent directors & non-executive director shall be open for inspection at the registered office of the company by any member during normal business hours.
- The terms and conditions of appointment of independent directors shall also be posted on the company's website.
The re-appointment of independent directors & non –executive director shall be on the basis of report of performance evaluation.
VI. Resignation or removal:
- The resignation or removal of an independent director & non- executive director shall be in the same manner as is provided in sections 168 and 169 of the Act.
- An independent director who resigns or is removed from the Board of the Company shall be replaced by a new independent director within a period of not more than one hundred and eighty days from the date of such resignation or removal, as the case may be.
- Where the company fulfils the requirement of independent directors in its Board even without filling the vacancy created by such resignation or removal, as the case may be, the requirement of replacement by a new independent director shall not apply.
VII. Separate meetings:
- The independent directors of the company shall hold at least one meeting in a year, without the attendance of non-independent directors and members of management;
- All the independent directors of the company shall strive to be present at such meeting;
- The meeting shall:
A . Review the performance of non-independent directors and the Board as a whole;
B . Review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;
C . Assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
VIII. Evaluation mechanism: Nomination Committee shall lay down the criteria for performance evaluation of Independent Directors.
- The performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.
- On the basis of the report of performance evaluation, it shall be determined whether to extend or continue the term of appointment of the independent director.