Code of Conduct

Introduction

Sri Arumuga Enterprise Limited (“the Company”) is committed to conducting its business in accordance with applicable laws, rules and regulations and the highest standards of business ethics and ethical conduct.

This Code of Conduct and Ethics is made pursuant to Clause 49 (Corporate Governance) of the Listing Agreement with Stock Exchanges and shall hereinafter be known as “the Code”. The Code will become effective from the date it is approved and adopted by the Board of Directors of the Company.

The objective of the Code is to promote and uphold the high standards of ethics observed by the Company in conducting its business. The Code lays down a broad policy for one’s conduct in dealing with the Company, fellow directors and Senior Management Personnel and the external environment in which the Company operates.

The Company believes in conducting its business with responsibility, transparency, empowerment, honesty and environmental consciousness. The Company seeks to be a leader in its chosen area of operation and to operate and achieve excellence in everything it does.

This Code of Conduct(“Code”) reflects the business practice and principles of behaviour that support this commitment. The Board of Directors (“the Board”) and Senior Management Personnel are responsible for setting the standards of conduct contained in the Code and for updating these standards as appropriate to reflect legal and regulatory developments. The Code is intended to provide guidance and help in recognizing and dealing with ethical issues and to help foster a culture of honesty and accountability. Every Director and Senior Management personnel is expected to read and understand this Code and its application to the performance of his or her duties, functions and responsibilities.

Every Director must -

(i) Represent the interests of the shareholders of the Company;

(ii) Exhibit high standards of integrity, commitment and independence of thought and judgement;

(iii) Dedicate adequate time, energy and attention to ensure the diligent performance of his/her duties including make all reasonable efforts to attend Board or committee meetings; and

(iv) Comply with every provision of this Code.

Compliance Officer

The Company has designated Company Secretary, as its Compliance Officer to administer this Code. Directors, at their discretion may make any report or complaint provided for in this Code to the Chairman of the Board of the Company or to the Compliance Officer. The Compliance Officer will refer complaints submitted to the Chairman of the Board.

Compliance with Applicable Laws

In the discharge of their duties and responsibilities, Directors must comply with all applicable laws, rules and regulations. These would include securities laws, insider trading laws and the Company’s insider trading compliance policies.

Conflicts of Interest

Each of us has a responsibility to the Company, its shareholders and towards each other. Although this duty does not prevent us from engaging in personal transactions and investments, it does demand that we avoid situations where conflict of interest might occur or appear to occur.

A “conflict of interest” occurs when an individual’s private interest interferes or appears to interfere with the interests of the Company. The Directors and senior management personnel must act at all times in the Company’s best interests and avoid putting themselves in a position where their personal interests conflict or appears to conflict with the interest of the Company. The personal interests will include those of their close relatives. Any Director or senior management personnel, who is aware of a conflict of interest or is concerned that a conflict might develop, is required to disclose the matter promptly to the Board of Directors in case of a Director and to the Vice-Chairman in case of senior management personnel.

The Directors and senior management personnel shall not engage in any activity or enter into any relationship which might result in conflict of interest, either directly or indirectly.

An illustrations only and not being exhaustive, some of the common instances of conflict of interest which should be avoided are given below :

a) None shall receive a personal benefit from a person or any entity which is seeking to do business or does business with the Company. They shall not participate in anydecision making process of the Board involving another entity/person in which they have direct or indirect interest.

b) None shall receive remuneration, in any form, for service rendered for the Company from any source other than the Company.

Conflicts of interest may not always be clear-cut. Any question therefore about a Director’s actual or potential conflict of interest with the Company should be brought promptly to the attention of the Chairman of the Board, who will review the question and determine a proper course of action, including whether consideration or action by the full Board is necessary. Directors / Senior Management persons involved in any conflict or potential conflict situations shall recuse themselves from any discussion or decision relating thereto.

Corporate Opportunity

None of the Directors/ employees shall not –

(a) compete with the Company; or

(b) take for themselves personally any business opportunities that belong to the Company or are discovered through the use of corporate property, information or position; or

(c) use corporate property, information or position for personal gain.

Confidentiality

All Director and Senior Management or one level below such management must maintain the confidentiality of confidential information entrusted to them or disclosed or acquired by them in carrying out their duties and responsibilities, except where disclosure is authorised by the company or is required by laws, regulations or legal proceedings. The term “confidential information” includes, but is not limited to non-public information that might be of use to competitors of the Company or harmful to the Company or its customers, if disclosed. Whenever feasible, Directors or such persons should consult the Chairman of the Board or the Compliance Officer if they believe they have a legal obligation to disclose confidential information.

Prohibition Of Insider Trading

The Company has formulated a Code of Internal Procedure and Conduct for Prevention of Insider Trading and all concerned are required to comply with the requirements of the said Code. The Directors and senior management personnel and their close relatives shall not directly or indirectly derive or attempt to derive any benefit or assist others to derive benefit when in possession of any price sensitive/unpublished information.

Fair Dealing

Directors and Senior Management personnel or one level below the such management should endeavour to deal fairly with the Company’s customers, suppliers, competitors, officers and employees. No persons may take unfair advantage of the Company’s customers, suppliers, competitors or employees through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice. Gifts or entertainment in any form that is likely to result in a feeling of expectation of personal obligation should not be extended or accepted.

Protection And Proper Use Of Company Assets

Protecting the assets of the Company is a key responsibility of every employee. The Directors and senior management personnel must safeguard and protect the assets of the Company against misappropriation, loss, damage and ensure their efficient use. They must ensure that assets are not put into use, sold, loaned or dealt with in any other manner without appropriate authorisation. All Company assets should be accounted for and used only for legitimate business purposes of the Company.

Reporting Any Illegal Or Unethical Behaviour

Directors / Employees are encouraged to promptly contact the Chairman of the Board or the Compliance Officer if the they believes that he or she has observed illegal or unethical behaviour by any employee, officer or director, or by any one purporting to be acting on the Company’s behalf or any violation or possible violation of this Code and the reporting Director has any doubt as to the best course of action in a particular situation. Confidentiality will be maintained, to the extent permitted by law.

Public Company Reporting

As a public company, it is of critical importance that the Company’s filings with the Securities and Exchange Board of India, the Reserve Bank of India and/or the concerned Stock Exchange(s) on which the securities of the Company are or may be listed be full, fair, accurate, timely and understandable. Directors may be requested to provide information necessary to ensure that the Company’s published reports meet these requirements. The Company expects Directors to provide prompt and accurate answers to enquiries relating to its public disclosure requirements.

Amendment, Modification And Waiver

The decision of the Board of Directors with regard to all matters relating to the Code will be final and binding on all concerned. The Board of Directors of the Company shall have power to modify or replace the Code in part or in full, as they may deem fit from time to time in their absolute discretion.