CODE OF CONDUCT & STATEMENT OF ETHICS
STATEMENT OF ETHICS & BUSINESS PRACTICES
Ravi Autos Sundar (Pvt) Ltd (RAS) goal is to be a leading player in the automobile parts market with the vision to be amongst the top five organizations of the country. We want to be known as a Company with highest standards of ethical conduct.
The reputation of RAS should be built on the honesty and fairness of individual employees-regardless of function, business or location. This standard going beyond compliance with the letter of applicable laws and regulations, demands a consistent regard for moral principles. RAS continues to dependent, not only on the quality of our products and services, but also on the way in which they are delivered.
The purpose of the code of ethics is to invoke serious thoughts and to consider all possible outcomes when faced with difficult ethical dilemmas. It is understandable that such decisions are neither straight forward not easily reached.
The code of Ethics thus established by RAS sets forth the guiding principles through which we operate and conduct our daily business with each other, our shareholders, customers, vendors and with other group companies. These principles apply to all full or part time officers and staff members in all our locations.
In circumstances where employees face difficult situations which are not covered under this document, they must ask themselves the following questions regarding envisaged decision/action and also seek further guidance from their line Manager.
- Does it corroborate with RAS policies and procedures?
- Does it fulfill regulatory requirements?
- Is it consistent with RAS values and principles?
- Does it feel right?
- Would your colleagues be comfortable with it?
- Can it be justified if it is published in the press?
EACH RAS EMPLOYEE MUST
- Avoid any conflict (or even the perception of conflict) between personal, social, financial or political interests and the Company’s business interests or the interests of its consumers.
- Identify and take immediate steps to ensure ethical handling of any actual or apparent conflict of interest.
- An employee with purchasing authority from a class of vendors favors Vendors A because the employee is a part of owner of Vendor A (b) close family members of the employee work for Vendor A or (c) he/she has accepted an offer from Vendor A of special discount for personal purchase.
- Always act on behalf of the Company by exercising professionalism, dedication, utilizing the exercise and expertise to assist in the growth of the Company rather than harm the Company’s reputation and the Company’s reputation for integrity.
- Serve according to the best of his/her skills and abilities and conform to the directives and policies of the Company in all respect to ensure corporate objectives and strategies are implemented.
- Function with integrity within the scope of authorities and follow directives given by the person(s) under whose jurisdiction she/he is deputed with complete honesty.
- Promote core values by upholding fairness, equality and respect for all team members.
GENERAL PRINCIPLES OF ETHICS AND CODE OF CONDUCT
- Conflict of interest generally occurs when an employee’s private interests interfere with the Company’s interests. The potential for development of conflict of interest situation arises when an individual with various interests in a matter takes a decision regarding that matter. In such situation, Company’s interest must come first.
- The employees of the Company have an obligation to carry out work professionally, impartially, with integrity and in the best interests of the Company.
- Must not make unauthorized commitments or promises of any kind purporting to bind the Company.
- Not act partially or give preferential treatment to any organization or individual.
- Avoid exploitation, abuse, gross negligence, corruption and fraud within the Company.
- Attend to anyone who is seeking the services of their offices and must, at all times, act promptly, expeditiously and professionally.
- At all times act with fairness, sincerity, honesty, tolerance and attentiveness with the customers and other concerned and shall as far as legally possible attempt to provide the required relief sought by them.
- Not use or allow their offices to be used for their own private gain or for the private gain of friends, relative, or persons with whom they are affiliated in a non-official capacity and persons with whom they have or seek employment or business relations or an entity in which they have a present or potential financial interest.
- Not compromise official work or responsibilities for personal interest.
- Ensure security of information about the persons working with or dealing with Company.
- Not hold financial interests that conflict with the conscientious performance of their duties.
- Not engage in financial transactions using Confidential Information or allow the improper use of such information to further any private interest or gain or for the gain of any relative or friend.
- The employees must not:
- Engage in any activity that could create the appearance of conflict of interest of the Company and thereby impair the reputation of the Company for integrity, impartiality and fair dealing.
- Participate in, influence or attempt to influence an official decision or administrative action in violation of Company laws particularly in which they have an interest in or from which they can potentially benefit.
- Authorize or request another person on their behalf to perform an act prohibited by the conflict of interest provisions of this code.
- Receive personal favors in return for the services provided to the customer or any other person dealing with the Company.
- Have any financial involvement with an employee or representative of a customer /supplier of the Company with whom the employee comes in contact while performing her/his services.
- Deal directly, in the course of official responsibilities, with their spouse or immediate family member who is employed by a supplier or customer of the Company.
- Take advantage of an official opportunity that was learned of in course of their employment with the Company.
- An employee uses Company stationary, to market a family member’s or friend’s business, or to raise money for a political candidate.
- Participate in reviewing and approving an application for a loan from a corporation of which he or she is a director.
OTHER CORPORATE ETHICAL POLICIES
Here are some other important corporate ethical policies and requirements.
- If an employee wishes to become officially involved with any outside corporation or other organization as director, trustee, officer or advisor, such involvement must first be approved by the President & CEO.
- An employee must obtain the consent of her or his supervisor and Group Head Human Resources before submitting a work for publication or making a public speech. Generally, approval will be granted, if the writing or speech furthers legitimate RAS business interests and does not involve the disclosure of confidential information of RAS.
- All employees are entitled to a safe working environment that is free from discrimination, bullying and harassment. They are treated fairly and with respect, encouraged to develop, and rewarded based on individual performance.
- RAS internal ethical standards are the result of shared moral convictions. Rationales such as “everyone in the market does it” or “our competitors do it” cannot be countenanced as permitting deviations from our standards.
- Compliance with laws, regulations and ethical standards in spirit and not just the letter, is an important element of your obligations to our customer, our stockholders, the public and, other staff, it is essential to our success that we take compliance seriously.
- Each employee of the Company should think of compliance as a personal responsibility and should be expected to be held accountable for all compliance- related activities.
USE OF COMPANY’S RESOURCES / PROPERTY
- The employees having access to Company’s funds / property / resources in any form must follow the prescribed procedures for recording, handling and protecting the same as detailed in the Company’s policies or other instructions/guidelines issued from time to time.
- The employees shall not use the Company property or resources for any illegal or unethical activity or the conduct of an outside business.
- Any personal use must not interfere with the performance of the Company’s activities, the employee’s assigned duties or the assigned duties of other employees and should not adversely affect the performance of the employees or the Company.
GIFTS & FAVORS
- As a rule, employee of the Company shall not solicit or accept any gift or other item of monetary value from any person or entity seeking administrative action from, doing business with, or conducting activities regulated by the Company, or whose interests may be substantially affected by the performance or non-performance of her/his duties.
- Employee must appreciate that there is a fine line between an expression of appreciation and bribery, and employees must politely decline all but very nominal gifts made under circumstances where sucha gift is customary and is understood to express only regards for the recipient or appreciation for services.
- Advertising or promotional material of nominal value.
- Public service awards and awards in connection with the employee’s appearance in seminars / conference.
The employees of the Company shall not solicit or accept anything of value, in return for advice or assistance on matters concerning official work.
Gifts to/from any public official, another employee or person holding a political office or any of their relatives should not be accepted, unless there is a personal relationship between them.
- Employee should not accept a gift of an expensive nature from a subordinate employee of the Company or the customer.
- In the event that a gift must be accepted due to excessive customer insistence and sensitivity of the relationship, all such gifts must be surrendered to the Group Head of Human Resources along with a Gift Declaration Form.
- Record of such collection will be maintained by HRD, gift/s will be disposed of by Group Head HR once a year, in collaboration with Group Head of another Department.
- Under no circumstances should any gift be accepted from vendors/suppliers.
- An employee must avoid giving a present/gift to a customer or a government official, which might be interpreted as consideration for a business official or a personal favor.
LENDING OR BORROWING MONEY
An employee places herself/himself under pecuniary obligation:
- If an employee borrows money from or in any way places himself under pecuniary obligation, to a broker or moneylender or subordinate employee of RAS or any firm or persons having dealing with RAS.
- If an employee buys or sells stocks, commodities, foreign exchange or securities of any description without funds to meet the full cost thereof.
- If an employee arranges for a RAS customer to be granted preferential treatment as a vendor. Such situations as best be avoided.
- A wall should be maintained that precludes even the fact of customer status to be known to those making decisions with respect to vendors.
All employees, both during and after their employment, must adhere to the restrictions contained in this Section and must respect the confidentiality of internal information of the Company and its customers. Employees must ensure that the information is dealt with appropriately and only used for the purposes of Company.
- In no circumstance, shall an employee use information related to Company and its customers to gain personal advantage for her/him or another person.
The employees shall not:
- Disclose to third parties any non-public information involving the Company.
- Use or store any of proprietary or sensitive information related to the Company where unauthorized personnel can see it, whether at work, in public places or elsewhere.
- Attempt to access or possess any of the Company’s confidential and proprietary information, activities or processes to which they are not authorized or entitled in their course of work.
- Participate in any activity that may lead to or result in inappropriate disclosures of sensitive information of the Company Employees provided with laptops or notebooks by the Company shall ensure that the information contained therein is properly secured and not available to others for misuse.
- Use the identification issued to them (including without limitation, computer passwords, systems’ login which are allowed to them) be given or divulged by them to any other person, except as required in their performance of the Company’s activities.
Confidential Information concerning a customer or supplier must never be disclosed to a third party except pursuant to a statute or regulation, or a court order or other legal process, or after the informed consent of the customer or supplier in writing.
- Likewise, proprietary RAS Information (Confidential Information about RAS Company’s business or business plans, product and services, marketing methods, technology or systems) must never be disclosed to a third party except pursuant to a statute or regulation, or a valid, final court order.
- For these purposes, “Confidential Information” is non-public information about RAS or a customer or supplier that would be useful to a competitor or important to an investor in deciding whether to purchase, hold or sell any RAS shares, or the shares of customer or supplier.
- Without permission, disclose proprietary RAS information (e.g. forms; procedures; data etc.) in writing an article or book that personally profits and/or furthers the career of the employee.
This policy is intended to alert employees to the need for discretion at all times and is not intended to inhibit normal official communications. If there is a question of whether certain information is considered confidential, the employees are advised to first check with her/his immediate line manager to avoid any chances of repercussion.
Information is the raw material for decisions and actions, therefore, it is a critical company asset and must be protected. Information access controls are critical to ensuring data integrity, confidentiality, accuracy and accessibility.
In this regard, the Company has developed an IT employee Handbook to familiarize and guide all the employees to implement and practice information security standards. Many important aspects of information security policy and access control practices have been defined for staff awareness to have an effective Company wide information security.
- Employees using RAS computer resources must realize their responsibility for the safekeeping of those resources and must guard against abuses that disrupt or threaten the viability of these resources.
- Users must embrace the philosophy that “Security is everyone’s responsibility” to assist RAS in meeting its business goals.
- Users should maintain awareness of the contents of the Information Security & IT Policies.
- All users must read and sign Non-disclosure Agreements (NDA).
- Users to read and sign the Acceptable Use Policy (AUP) document before using a system.
- All users must understand and limit the distribution of information and/or documents as per the classification of the information/documents.
ACCESS CONTROL (USER IDS AND PASSWORD)
Access to the Company’s information through various systems requires user IDs and passwords, which is the first line of defense against unauthorized access to confidential information stored on the Company’s network.
- Each user is responsible for their access IDs and must not share their IDs with any other user, including your supervisor and IT representatives. Therefore, passwords must be memorized, not written down or posted anywhere and must be changed periodically.
- All employees must ensure that their screens are clear / blank and / or locked when not being used with password enabled screensavers. Confidential and sensitive documents must not be placed on desktop.
- An information security breach can cause damage or loss of data from an information system. Such incidents must be reported to the RAS designated incidence response team immediately.
All employees must familiarize himself with the IT employee Handbook, available on internet, and abide by the policies/guidelines stipulated in it.
PASSWORD SETTING TIPS
A strong password is an important protection. Here are steps you can take to create a strong password.
- Length: Make your passwords long with eight or more characters.
- Complexity: Include letters, punctuation, symbols, and numbers. The greater the variety of characters in your password, the better.
- Variation: To keep strong passwords effective, change them often. Remember to change your passwords about every three months.
- Variety: Don’t use the same password for everything. Use different ones for different applications.
ACCEPTABLE USE OF ASSETS
- Usage of RAS information systems to store, process, download or transmit data that can be construed as biased (politically, religiously, racially, ethnically, etc.) or supportive of harassment is strictly prohibited.
- Downloading, redistribution and printing of copyrighted articles, documents, or other materials to RAS information systems is strictly prohibited.
- Printing, transmitting, or otherwise disseminating proprietary data, business strategies, secrets of RAS or other confidential information in violation of RAS policies or proprietary agreements is strictly prohibited.
- The storage, processing, or transmittal of unauthorized copies of licensed software & hardware (piracy/copyright & patent infringement), by RAS personnel is strictly prohibited.
- Introduction of freeware and shareware and other type of software whether downloaded from the Internet or obtained through any other media is subject to a formal evaluation and approval from Information Security and Information Technology.
- User shall not attempt to install/uninstall any software. Only IT nominated staff is authorized to install any kind of software on the user’s system.
- Downloading inappropriate material such as executable files, music files, games or video files or destructive programs for any personal use is strictly prohibited.
- Desktop/Laptops should always be locked when left unattended.
- Employees are responsible for taking backup of their critical data residing on their local hard drives / mobile device.
- Critical data should always be kept on the allocated network drives so that it is secured and undergoes backup procedures regularly. IT is responsible for creating network backup drives and/or taking backups of network drives.
MAINTENANCE & TROUBLESHOOTING
- Employees must not attempt to fix PC and other IT equipment problem themselves, but contact IT Helpdesk / Support for assistance.
- Personal laptops, desktops and other peripheral devices are prohibited to connect to RAS network, unless approved by Head of Information Security or Information Technology.
- Use of any external devices or gadgets through any means (e.g. WiFi, Internet Dongle, Personal Smart Phones, Card Readers, Bluetooth, Infrared, USB, Optical Disks, Parallel Port, TV card, Speakers etc.) is strictly prohibited. Special permissions can be granted to users on the basis of their work requirements after formal approval from head of department and head of information technology.
PRINTERS AND SCANNERS
- All RAS Staff with printer requirement and approval will be allowed access to centralized departmental Printers.
- Classified/sensitive information should be cleared from printer trays immediately.
- Printers should be used for business purposes only.
ELECTRONIC MESSAGING (E-MAILS)
- RAS reserves the right to monitor or inspect e-mail on its systems without warning.
- Employees must not transmit information by e-mails that contains defamatory, biased, racial or sexual contents.
- E-mail account must only be used by its owner/authorized user.
- Employees can use the Company’s e-mail facility for business purpose only; use of personal and/or external e-mail services for business messaging is prohibited.
- Users must check for correct e-mail addressing before sending e-mails; particularly when the recipient has a common name.
- Before forwarding or replying, employees must consider the confidentially and sensitivity of all content, especially on an extended chain of e-mails.
- Subscription e-mail services related to your job function is allowed with formal information / approval to IT department.
- All employees should enable out of office notification when going on vacation or official trips.
- All employees should have their complete and standardized signature (including Full Name, Title, Department, location, Tel, Fax etc).
- Unnecessary attachments should not be sent via e-mail.
- Employees must confirm the validity of any e-mail content, internal or external, by direct contact with the originator before any critical business decision is made based on the content.
- Company employees are expected to use the Internet responsibly and productively. Internet access is limited to job-related activities only and personal use is not permitted. Job-related activities include research, visiting industry websites, reviewing competitor information etc.
- Internet access provided by the Company must not be used to engage in any activity which gathers, generates or distributes any information that is defamatory, abusive, involves any form of racial or sexual abuse, could damage the reputation of the Company, or any material that is detrimental to any party outside the specific business interests of the Company.
- Internet access will only be allowed to department / division heads as per their business need. Special access may be granted to designated employees whose work requires internet access. Such special access shall only be granted after formal request from respective division Head.
- Employees may access the Company’s internet facility outside of scheduled work hours for personal development and improvement, provided such use is within professional conduct.
- Employees are discouraged from visiting or downloading high bandwidth consuming websites.
- All files received from the internet must be scanned by official anti-virus management system before opening.
- Information classified as confidential or sensitive must not be sent over the internet insecurely.
- All laptops, Desktops and handheld devices will be restricted to update their firmware, software updates, software downloading & installation. Installation/updates will be managed centrally by IT Support Team.
- Employees must be aware that they are responsible for the content they post and that information remains in cyberspace forever.
- Employees must not post any financial, confidential, sensitive or proprietary information about the Company, its processes, employees or any other assets.
- Employees while posting to personal networking sites and speaking about the Company or its competitors in anyway, must identify themselves and use disclaimer (“The opinions expressed on this site are my own and do not necessarily represent the views of the Company.”)
- All employees are expected to speak respectfully about Company’s current, former and potential customers, partners, directors, employees and competitors.
- Employees to understand that social media sites are not the forum for venting personal complaints about supervisors, co-workers, or the Company. Beware of comments that could reflect poorly on them and the Company.
- Employees must not infringe on copyrights or trademarks or use images without permission and without citing due references.
- Employees if contacted by the media, must refer them to Marketing Department.
SPEAKING AT PUBLIC FORUMS / INTERACTION WITH MEDIA
- The employees of the Company shall not except as permitted, make any statements, representations or submissions directly to the media in matters related to official work or their employment with the Company.
- Employees shall not disclose any confidential information at public forums except with the approval of the Competent Authority.
Any speech at public forums by an employee of the Company dealing with the matters that fall under the jurisdiction of the Company shall include at an appropriate place, a disclaimer that the views expressed therein do not necessarily reflect the views of the Company
CUSTOMERS, VENDORS AND COUNTERPARTIES
- In order to safeguard the Company’s reputation for integrity, it is not only necessary for employees to discipline their own actions, it is also necessary to be aware of the character and an action of the customers, vendors, counterparties.
- Care must be exercised in selecting those with whom we deal, and each RAS business must have processes in place for checking on the credit and character of customers, vendors and counterparties.
Employees must avoid mis-declaration, which constitutes, amongst other reasons, the following examples:
- An employee issuing an incorrect account statement, salary certificate or any other information for any customer or staff member.
- An employee issuing a fake claim for reimbursement of any expenses whereby either the expenses are inflated and/or the expense is not incurred at all.
Bribes can take many forms including the offer or acceptance of direct or indirect payments. An employee will be guilty of an offence, who, without lawful authority or reasonable excuse:
- Solicits or accepts any advantage as an inducement or reward for doing or intending to commit any act in relation to the Company’s affairs or business, or
- Showing or intending to show favors or disfavors to any person in relation to the Company’s affairs or business.
- Offers any advantage to anyone as an inducement or reward for or otherwise, or
- Intends to deceive the Company by using any receipt, account or other document which is false, erroneous, or defective in any way and which to his knowledge is intended to mislead the Company.
FRAUD, THEFT OR ILLEGAL ACTIVITIES
- Employees shall be alert and vigilant with respect to frauds, thefts or significant illegal activity committed or planned that breaks or may break any laws, regulations etc. including any matter arising from unethical practices, within the office.
- If any such activity comes to the attention of an employee, the employee must immediately report the same to the manager / Group Head and to the relevant Compliance officer, who will arrange for appropriate follow-up action to be taken.
- Failure to report any such activity will be subject to disciplinary action.
DRUG, ALCOHOL & WEAPONS
In order to keep RAS reputation intact:
- The illegal use, sale or possession of narcotics, drugs, alcohol or controlled substances while on the job or on RAS property is prohibited and is a dischargeable offense.
- Possession of weapons by employees including, but not limited to firearms and knives, presents the possibility of danger in the workplace and therefore is strictly prohibited.
The possession of such articles is cause for disciplinary action up to and including termination of employment.
- Off-the-job illegal drug use adversely affects an employee’s job performance, can jeopardize the safety of others, the public, or RAS equipment, and damages the RAS reputation, as employees are representatives of their organization.
- Employees arrested for off-the-job drug activity may be considered to be in violation of this policy.
In deciding what action to take, Management will take into consideration:
- The nature of the charges.
- Employee’s present job assignment.
- Employee’s record with RAS.
- Other factors relating to the impact and circumstances of the employees arrest.
- No employee shall make any personal representation direct to the Board of Directors, Government, or any of its Agencies.
- Such representation, if any, must be addressed through proper channel internally.
PARTICIPATION IN POLITICAL ACTIVITIES
- The employees of the Company shall not participate in any political activity/political demonstrations of any nature nor should they form political association with a political party or coerce other employees to do the same.
- The employees must not solicit political contributions from anyone while on Company’s premises during or after office hours.
- Employees must report any behavior or actions by other employees that are against this policy.
NON – COMPLIANCE
Employees should uphold these principles and strictly adhere to the provisions of this code. Failure to do so will result in appropriate disciplinary action, including possible warning issuance and termination of employment, legal action and reimbursement of the Company for any losses or damages resulting from such violation. Compliance will also include the responsibility to promptly report any apparent violation of the provisions of this policy.
SEXUAL HARASSMENT REDRESSAL
To ensure that it is the inappropriate behavior that remains the focus, the Sexual Harassment Redressal Policy is applicable to both men and women. Any complaints or reports of gender harassment shall be treated promptly, seriously and sympathetically. They shall be investigated thoroughly, impartially and confidentially. Please refer to Section 13 for further details.
DIGNITY & RESPECT AT WORKPLACE – RAVI AUTOS SUNDAR (PVT) LTD AN EMPLOYER OF CHOICE
- 1. RAS is committed to maintain and promote a working environment which is free of discrimination, bullying and harassment, of any kind so that its employees treat each other with dignity and respect.
- RAS recognizes that investing in employee well-being makes good business sense, in terms of improving performance, raising morale and reducing stress.
- Our employees recognize their responsibility in ensuring that employees are not discriminated on gender, race, religion and belief. It further recognizes that this function includes all employees regardless of their status; contractual or permanent or length of service.
- RAS Management ensures that procedures are in place to enable allegations of harassment and bullying are investigated and considered in a fair, timely and sensitive manner. At all times RAS will have regard to the need for such allegations to be dealt with in a way that ensures an impartial investigation and hearing for all parties.
- We at RAS are committed to maintaining dignity and respect at workplace and will ensure that complaints brought under this procedure will not lead to the victimization of any individual.
- If an employee feels that he/ she has been treated with lack of respect, harassed or bullied within the meaning of this Policy, he/she is entitled to pursue his/ her case in a safe and non-threatening environment.
- RAS will ensure that all its employees are aware of this Policy and their obligation to respect the dignity of their colleagues and, in particular not to engage in behavior that may be interpreted as harassment, bullying or showing lack of respect.
- All staff members are required to establish and maintain acceptable standards of conduct and performance.
- A party or witness who knowingly makes a statement that is untrue, malicious, and frivolous or in bad faith may be subject to RAS Disciplinary Procedure.
DEFINITION OF RELATED PARTY:
A related party is any entity that has the ability to control a company or can exercise significant influence over that company in making financial and operating decision. These include:
- Companies having common directors or common major shareholders.
- Companies having common control such as a subsidiary or an associate.
- Entities having significant voting power (20% or above under the International Accounting Standards) and close members of the family of such persons. Close family members would include spouse, children, dependent brother/sister and parents.
- Key management persons and their close family members (all key employees and any entity in which they are interested in whatever capacity would fall in this definition).Also all directors and their close family members would also fall in the definition of related parties.
- Where the right to appoint one or more directors in two companies rest with the same person, both the companies would be treated as related parties.
- A company using secret formula, process or patents, trademarks of another company would fall in the definition of related parties. Also if a company is dependent on another company in respect of its process or business, would make both the companies related party under the Rules.
- Where 50% of material is supplied by one company to another company, both the companies would fall in the definition of related parties.
- Entities having common key management persons.
- Entities in which a company can appoint one or more directors.
- Where goods \services are sold by a company to another company or to persons specified by that another company at price determined by the selling company would make all the parties concerned as related parties.
APPLICATION OF THE RULES TO RAVI AUTOS SUNDAR (PVT) LIMITED:
In our case, following transactions would fall in the definition of related party transactions:
- All transactions with a firm, company, trust etc. where Board members of the Company, or key employees of the Company occupy a position either as a Director, partner, employee, and owner or in other capacity giving them significant influence over the affairs of that entity.
- Any transaction with a director or key employee including transaction of supply of goods/services if any.
- Any transaction with a major shareholder.
It should be noted that transactions of sale, purchase with a director, employee or a shareholder holding either 5% or more shares in the Company is prohibited under the Prudential regulations. Furthermore, no unsecured loan can be granted to a director as well as any secured credit facility on an arm’s length basis can only be allowed if approved by majority of the directors.
- In our case therefore all permitted loans and deposits to/from a director, key employees, major shareholders, or with entities where directors, key employees or major shareholders, or their close relative are interested, either as director, partner or person who can exercise significant influence over them will fall in the definition of related party transaction.
- A facility if any extended to a major shareholder or a director (whether funded or otherwise) and fully secured requires Board approval by majority of the directors.
- Supply of goods \services cannot be undertaken with a director, officer, employee or with a person who beneficially own himself or in concert with his family 5 % or more share in the capital of the Company.
DISCLOSURE REQUIREMENT OF RELATED PARTY TRANSACTIONS
- Accounting policy on “transfer pricing” to be disclosed in the financial statements.
- All “related party transactions” to be disclosed in the financial statements.
- Transactions with “related parties” not conducted on “an arm’s length basis” have to be disclosed in the financial statements along with the justification thereof.
- All “related party transactions” to be placed before the “Audit Committee” and the “Board”
- Common directorship to be disclosed in all forms 29 submitted to SECP and other particulars submitted to RAS at the time of the election of the Board.
- The Board should be informed of any contract / transaction in which a director is interested.