Asian Electronics Limited

Regd. Office: D-11, Road No. 28, Wagle Industrial Estate, Thane 400 604
Phone: (91-22) 25835504-05
Fax: (91-22) 25827636
E-mail: aeltha@vsnl.com Website: www.aelgroup.com

Code of Conduct
(As applicable to the Company and its employees at all levels)
1. OBJECTIVE OF THIS DOCUMENT & DEFINITION
1.1 The objective of this document is to communicate the updated Code of Conduct of
the Company to the employees. It is intended to serve as a guideline to corporate and
individual behaviour in the conduct of business and the discharge of duties of all
concerned.
1.2 The Code is fundamentally a set of principles and values expected to be maintained
by the Company and its employees.
2. APPLICABILITY
2.1 The Code shall apply to all employees irrespective of level, across all units and
offices.
2.2 Whenever any aspect of this Code is covered under any Act or Law, the more
stringent of the respective provisions shall apply unless the law expressly forbids it. If
any aspect is covered by any Act or Law but this Code is silent on the same, the
provisions of the Act or Law shall apply.
2.3 The Board of Directors of the Company shall be the final internal authority as far as
any interpretation of the Code or its applicability/violation and consequential actions are
concerned.
2.4 The Code may be expanded and/or improved upon from time to time.
3. NATIONAL INTEREST
3.1 The Company shall in all sincerity endeavour that its activities ultimately add to
economic development of the Country and further the national interest.
- The Company shall function within the frame work of the economic development
and legal policies of the Government of India.
4. OPEN WORK ENVIRONMENT
4.1 The Company and its employees shall treat each other with respect for their
individual rights and dignity.

4.2 The Company and its employees shall make every attempt to provide an open and
motivating work environment which is condusive to upholding and achieving the Goals
and Vision.
4.3 The Company and its employees shall not discriminate on grounds of race, caste,
ethnic background, material status or gender of the employee. The Company and its
employees shall maintain a work environment free of sexual harassment.
4.4 Entry into and progression within, the Company/Group shall be determined on merit
and the needs of the business.
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The Company believes in the inherent potential of employees and is committed to

the principles of proper, fair and transparent development and evaluation
processes.

The Company shall encourage employees to grow professionally to their highest

capabilities.

4.5 Any appointment or extension, dismissal, increment or promotion (including the

making of any promise towards appointment, extension, increment or promotion)
requires that procedures in the Rules followed, and cannot be made without due process.
- Promotions and/or increments shall not be automatic or time bound but performance
and merit based. Where granted they will be effective from first day of the
Financial year or as per the rules. No interim revision shall be made without due
process.
5.

ETHICS AND STANDARDS OR BEHAVIOUR

5.1 The Company shall carry on business fundamentally in a manner that safeguards the
interest of shareholders (besides other stakeholders), and enhances shareholders value.
The Company shall recognize and act on the basis of the conviction that these
fundamentals are best achieved through a combination of efficient and productive
operations and a track record of integrity and customer satisfaction.
5.2 The Company shall attach great significance and value to its commitments, both
internal and external and make every possible effort to achieve them and adhere to them.
5.3 The Company shall recognize and establish that its continued success depends
centrally on the value that it can create for our shareholders and customers.
5.4 Therefore, employees are expected to uphold professionalism and competence,
integrity and honesty, trust and fairness, discipline and team-work, as well as truthfulness
and high moral standards in their day-to-day dealings and conduct, both within the
Company and outside.
-

All employees shall conduct themselves in a way that upholds and enhances the
image of their position and the Company/Group. They shall not undertake or
participate in any task, debate or conversation that can reflect unfavourable on

their own or the Company or the Groups dignity or go against the

Companys/Groups interests.
Seniors are particularly expected to establish and lead by healthy examples for the
organization.
It is expected that all employees shall in their personal conduct (whether on duty or
not) be law abiding and demonstrate an upright character.
All employees share the responsibility for protecting the confidentiality and
security of all our proprietary and other technical and business information.
No employee should be asked to do any personal/business work of any other
employee, officer or senior. Unauthorised personal expenses, whether ones own,
his families or on account of business interest, shall not be charged or paid for on
the Companys account.

5.5 Company Rules and practices, including under the Code or pertaining to perquisites,
reimbursement of expenditure or otherwise shall be calculated to enable employees to
sincerely, honestly and diligently discharge their duties and uphold their and
Companys/Groups interest, integrity and dignity.
-

All employees must, as a philosophy, endeavour to economise on expenses in all

areas and to avoid any misuse or wasteful expenditure. No officer may sanction
or allow facilities, allowances or monetary accommodation (including ad hoc
loans) beyond the Rules. Employees are accountable for ensuring sincere
compliance with the Rules. Any misuse may result in strict disciplinary action.
No officer may grant exception from or modify the Rules for any employee.
Travel can be undertaken only for Companys business, upon appropriate
instructions or approval from the duly authorized superior. During travel, stay
should be in suitable class of accommodation in accordance with the Rules.
Use of Companys assets by any employees, does not confer any right nor creates
a lien on the asset, in favour of the user at any time. The Company has the sole
and absolute right and discretion to dispose of its assets as it deems fit.
Speculation and/or regular trading in shares or any commodity by any employee
is unacceptable and strictly prohibited. In the event that any of these does occur,
it shall be informed to the Unit Head or the Managing Director/Executive
Directors immediately.
Any major social expenditure, or investment (including in land/building) by an
officer of the rank of Manager and above, exceeding in aggregate One years
gross salary, shall be informed to the Unit Head or the Managing Director
immediately.

5.6
The Company shall encourage and enforce accountability consistently across all
levels and functions.
-

It is made clear that the term accountability does not confine itself to faults or
failures; the term applies equally well to achievements and strengths (The Oxford
Dictionary defines accountable to mean: responsible; required to account for
ones conduct or action).

5.7
The Company and its employees shall give a place of pride to the best of Indian
social, cultural and intellectual values and traditions, in their behaviour and conduct.
-

The employees must follow a suitably dignified and conventional dress code
while on duty.

5.8
The Company and its employees shall give a place of pride to truthfulness in their
conduct and dealings.
-

6.

Misrepresentation, manipulation or misinformation in respect of business,

commercial or financial data, information or operating reports shall be a violation
of integrity as well as the Code.
CORPORATE GOVERNANCE

6.1 The Company is committed to adopting, besides any of its obligations under
relevant laws or regulations, the best relevant practices for Corporate Governance.
6.2
The Audit Committee shall oversee the effectiveness of the audit and internal audit
tasks, to assist the Board in providing useful supervision of the overall financial reporting
process.
-

Due emphasis shall be laid on the audit/internal audit process, as necessary to

safeguard the interests of shareholders. Every employee must extend his full cooperation to the Auditors and ensure that all information as may be required by
them is made available. The Audit Committee may also have propriety audit
conducted from time to time.

6.3. A Remuneration and Evaluation Committee, including a majority of non-executive

Directors, shall oversee the evaluation, compensation and promotion process to uphold
transparency therein.
6.4
All employees shall ensure that they take adequate steps to completely familiarize
themselves in depth with all laws, legal and procedural requirements relating to
operations within their scope of work, as they shall be accountable for their compliance.
7.

QUALITY OF GOODS, SERVICES AND DEALINGS

7.1
The Company and its employees are committed to building and maintaining long
term and mutually beneficial relations with all our customers and stakeholders, by
consistently providing high quality goods and services, through equitable conduct and by
upholding the value of our commitments.
7.2
The Company and its employees shall ensure that due courtesy, consideration and
promptness are exercised in communication and inter-personal dealings particularly with
customers and generally with all other stakeholders including but not limited to suppliers,
agents, dealers, financial bodies, banks and shareholders or depositors.

7.3
The employees should exhibit such professional, fair and courteous values in
dealings and behaviour that reputable third parties chooses to deal with the company time
and again.
8. INFORMATION & COMMUNICATION
8.1
The Company fully understands the information requirements of its stakeholders.
In respect of disclosing business, technical, commercial or proprietary information in the
public domain, it shall be represented only by specifically authorized employees.
8.2
The Company shall share fully and timely all relevant work related information
with those concerned, so that all are able to perform their job in best possible manner and
avoid confusion, misunderstanding and distrust.
-

Positive and effective communications, both internal and external, are key needs
for motivation and success. It is particularly a responsibility of senior officers to
ensure that the goals, policies and progressive initiative are communicated
appropriately and regularly so that all employees may understand them and relate
to them.

8.3
No employee shall communicate in any manner (except as per any general or
special order of the Company or in the performance of duties assigned to him) any
information or official document or part thereof to any other employee or person to
whom he is not authorized to communicate such information, or where such
communication may prejudice the interest of the Company or which may adversely affect
its business or the competitive edge.
8.4
The employees of the Company shall not indulge in any form of insider trading,
whether direct or indirect, including in shares or commodities, or assist any outsider to
derive advantage from information not in the public domain.
9.

COMMITMENT TO EMPLOYER

9.1
The employees are expected to devote fullest energy and due attention to the
business of the Company.
-

Any other employment or direct interest in any business, (including as partners) in

their own spouses or any dependants name, is prohibited.
Any such interest or any interest or involvement in promoting any third partys
business interest must be disclosed to the management in writing at once. The
commencement or continuation of any such interest constitutes a Conflict of
Interest as detailed herein.

9.2
Any employee joining or assuming responsibility at any professional, trade,
legislative, political or public body, including as an office bearer, can do so only upon
prior approval by management, which may or may not be granted at its sole discretion.
9.3
The employees shall avoid publicity, photographs in media etc. with the objective
of personal portrayal. Where any employee writes to/in any media or appears on any

media or any public debate in his personal capacity he shall clearly state that the views
expressed are his own and not of his employer Company.
9.4
The employee shall remain non-political at all times.
10.

RELATIVES AND ASSOCIATES

10.1
When an employee suggests or refers a candidate for employment with the
Company or a party for transacting any business with Company they must make it
unambiguous if (and how) the candidate / party is in any way related or associated with
them personally or professionally.
-

An employee empowered to appoint persons or transact business or in a position

to influence such decision on behalf of the Company shall not appoint such
candidates or commit any transaction on behalf of the Company with them.

10.2 Throughout the Code and Rules whenever relatives and/or associates are referred
to, they shall include relatives and/or associates as understood under socially accepted
norms whether or not they are covered by the definitions under any Act.
11.

CONFLICT OF INTEREST

11.1 Conflict of interest is a wide term (implying wider definition and implication
commensurate with seniority of the employee) which calls for examples rather than
definition.
11.2 For purposes of a limited illustration only, a Conflict of Interest can be said to
have arisen or exist between an employee and the Company in circumstances when:
-

Causing harm or financial loss to the Company due to any act(s), including
obvious negligence or willful neglect of duty, non co-operation of the employee
directly or through a third party or his abetting such action by another employee;
Disclosure of any information (including, but not limited to competitive
information) considered prejudicial to the Companys interest; or
Entering directly or indirectly into any form of relationship or association (with or
without financial benefits or remuneration) with a direct competitor of the
Company or a supplier or sub-contractor of the Company.
Abetting of any third party to influence or effect supplies or services, either
directly or indirectly, to the Company at prejudiced terms or at terms other than at
arms length; or
Operating/commencing or proposing to operate a business in direct conflict/
competition with the business of the Company;
Undertaking any business or professional activity in contravention of the
guidelines herein, while in the employ of the Company; or
Utilizing Companys resources, financial or otherwise, to support personal,
financial or business interest (or of a relative/associate) or promoting financial or
business interest of any other employee; or

Formal prosecution or legal sentence awarded at any time by a relevant competent

or judicial authority for a serious misdemeanor (such as any criminal offence or
morale turpitude, etc.)
11.3 Every employee shall take all care to ensure that there does not arise a Conflict of
Interest between him and the Company. It is clarified that if the Management is satisfied
that a Conflict of Interest exists, then the same shall be deemed to exist.
-

11.4
-

The first remedy if a Conflict of Interest arises, or exists historically, is to bring it

to the notice of the Management. An attempt may be made by the Management at
its discretion to see if the Conflict of Interest can be remedied and ended. If such
attempt is decided against or the conflict cannot be remedied and ended, the
Management shall be entitled, at its sole discretion, to decide if the services of
those concerned should continue or not. In the latter event an opportunity shall be
given to the concerned to resign; otherwise the services may be terminated.
If the Conflict of interest continues without appropriate disclosure or by way of
willful suppression of facts but becomes known to the Management, it may, at its
sole discretion, terminate the services of the employee concerned.
In any event, if any harm or financial loss to the Company has arisen as a result of
a Conflict of Interest, the Company shall proceed legally against the concerned
persons.
It is expressly prohibited for any employee to directly or indirectly:
Solicit or accept any gratification, in cash or in kind, from any person/party
dealing with or seeking to deal with the Company or from another employee. If
any inducement is offered to an employee he must immediately bring this to the
notice of his unit head (It is permissible to accept/give gifts of nominal value,
customarily given on special festivals or occasions).
Confer any benefit prejudicial to the Companys interest to any party under
influence of gratification or promise thereof or in violation of commercial or
administrative prudence.
Hold or be interested in any place of wrongful personal gain vis--vis the
Company.
Commit theft in any manner.

It is made clear and unambiguous that any of these acts are contrary to the fundamental
spirit of the employment (and its terms) with the Company and cannot be condoned or
disregarded.
12.

COMPUTERS AND SOFTWARE

12.1 The Company encourages computer-friendliness for its employees. The Company
is committed to making as extensive use of computers, modern data processing, office
automation and communication system, as may be practically possible. The Company
shall use these to improve productivity, response time, information integrity, quality and
presentation of documents and information.

12.2
-

13.

Usage of Computers and software, etc. will be within principled boundaries.

All users shall take due care to ensure security and safety of data, and to follow
customarily accepted norms of usage for the hardware and software. Only
permitted software can be loaded onto Company machines, and only by
appropriate persons. Any trial or beta or game software is prohibited at the
workplace.
The Company does not support the use of pirated/illegal software, or software or
other materials that are prohibited or offend norms of social decency. Employees
shall not on any account engage in casual browsing or surfing or chatting on any
network at the workplace nor download software or material which are prohibited
or offend norms of social decency.
If an employee hosts a website or web page on the Internet or posts data or
information in any form of multimedia or software which have no relation with
the Company then he shall not use the name of the Company therein.
An employee shall not utilize Internet connection or accounts of the Company for
personal use, including using the Companys e-mail account for non-Company
mail. Any employee in possession of companys access passwords for the
Internet or internal network shall use these solely for the purposes intended and
shall not disclose the same to any unauthorized person nor to any person who may
misuse the same, nor shall they use access passwords belonging to any other
person.
No employee shall commit the Company to any financial liability or legal
obligation through any Internet site or permit or transact financial payments over
the Internet.
No employee shall undertake or abet any non-ethical computing activity,
including making or distributing of copies of legal software or designing,
transmitting, distributing or implanting any form of virus. Hacking or any other
such unacceptable activity whether over internal or external works is strictly
forbidden.
If any employee is formally charged by competent authorities under the
appropriate Cyber Laws in force, whether in relation to his personal time or while
on duty, the management shall at its sole discretion have the right to suspend him
without pay and emoluments or terminate his services.
HEALTH, SAFETY AND ENVIRONMENT

13.1 The Company shall maintain its respect for the environment and shall provide a
healthy work environment and shall conform to environmental laws. The Company shall
also endeavour to prevent wastage of natural resources in the course of conduct of its
business.
13.2 The Company shall continue to ensure total industry safety.
13.3 The Company will take steps to promote greater awareness about health care for
employees and their families. To maintain a healthier work environment, all offices
(including the units) shall be designed as non-smoking offices, with suitable polite and

visible notice and subtle hints such as absence of ashtrays. (Offices can have designated
smoking area which must be open to the outside atmosphere and not in an airconditioned space).
13.4 Consumption of alcohol or any other intoxicating substance(s) at workplace is
prohibited.
14.

INTRA-GROUP CO-OPERATION

The Company will, when needed, share physical, human and management resources with
its Group companies. In procurement of products and services, the Company is expected
to give preference to other Group Companies on competitive and first among equal
basis.
15.

INTELLECTUAL HONESTY

The Company shall explicitly acknowledge and give due credit to the colleagues from
whom it has borrowed an idea. Nobody should attempt to project anothers idea or
efforts as his own.
16.

RESPONSIBILITY TOWARDS SOCIETY AT LARGE

The Company shall make efforts to extend support to community welfare, health and
education. It is committed to being a good corporate citizen.
EXECUTIVE SUMMARY*
A major contributory to corporate excellence is good corporate governance. In well
developed, competitive and globalised economies, there is strong evidence to suggest that
corporations well known for their high standards of transparency, accountability,
professionalism, social responsiveness, corporate citizenry, and ethical business practices,
in short, for good corporate governance, are also those which deliver excellent returns to
their shareholders and are admired by their stakeholders and society at large. In the short
decade that India has grappled with the challenges posed, and capitalised on the
opportunities offered by a liberalising economic environment, there are already shining
examples of corporations achieving business excellence concurrently with, or perhaps
more appropriately, because of the excellent standards of corporate governance that they
have set for themselves. Further maturation of the market place is likely to recognise and
reward such corporations in greater measure in the decades ahead.
Role and Responsibilities of Corporate Board and Directors
The role of the corporate board of directors as stewards of their shareholders and
stakeholders has internationally gained significant ground in recent decades. Successive
corporate failures and other disasters have strengthened the demand for more
transparency and accountability on the part of corporations. In the discharge of these
onerous responsibilities, the corporate board has come to be regarded as the principal

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arbiter, ensuring on the one hand that executive management competently and through
legitimate means creates wealth, and on the other, that such created wealth is equitably
distributed to all shareholders after meeting the due aspirations of and obligations to other
stakeholders. This requirement applies equally to cases of extreme separation of
operational control from share ownership and those with dominant shareholders in charge
of executive management as is the case in several developing countries. Hence the
perceived need for the board to be independent of the executive, which position is sought
to be achieved by infusion of a majority of competent non-executive directors with no
material pecuniary relationships with the corporation or its opinion makers. It calls for
a greater role and influence for non-executive independent directors, a tighter
delineation of independence criteria and minimisation of interest-conflict potential,
and some stringent punitive punishments for executive directors of companies
failing to comply with listing and other requirements. Legal validation of electronic
conferencing and other such measures to facilitate greater board participation, and
attendance/participation by a majority of independent directors as a statutory quorum
requirement for board meetings are further measures recommended.
Direction and Management Distinguished
It is imperative to distinguish the nature of the two basic components of governance in
terms of policy making and oversight responsibilities of the board of directors, and the
executive and implementation responsibilities of corporate management comprising of
the managing director and his or her team of executives including functional directors.
Executives who are also on the board as directors of the company in effect wear two hats,
one as part of the board and the other as part of the management. Directors derive their
authority only when acting collectively as the board or when the board delegates
specifically authorities to be exercised, such as for example in the case of managing
directors. Managers, in the broadest sense of the term, have the responsibility to execute
the policies under the supervision of the board, and for this purpose have the necessary
authority to ensure compliance and implementation. The Task Force highlights this
critical distinction particularly in the context of fixing responsibility for failure and the
consequential liabilities that follow.
Managing and Whole-Time Directors
Managing and other whole time directors are required to devote whole or substantially
whole of their time to the affairs of their companies.
Non-Compete Stipulations
Should executive directors and dominant shareholders have the freedom to compete with
the companies in their material lines of business? Equity demands that they should not,
and at any rate, even if they are permitted to, then there should be proper disclosure to
the shareholders and the investing community.

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Interested Shareholders
Shareholder democracy, like many other lofty principles of fair play and public policy, is
often supported more in precept than observed in practice. In order to strengthen the
democratic rights of minority shareholders, it may be desirable that matters directly
affecting their interests and decided upon exclusively by them without brute majority of
numbers having full sway. The Company accepts the concept of interested
shareholders who would be required to abstain from voting on specified matters that
impact upon some but not all the shareholders. This is somewhat analogous to, but not
the same as, the principle of interested directors being required (as part of their fiduciary
responsibility) not to participate in or vote upon resolutions they are interested in.
Conscious of the potential of such a measure being abused, this privilege be limited to a
few specific matters and even there with suitable provisions for breaking stalemate
situations.
Measures Promoting Transparency and Informed Shareholder Participation
A related issue of equal importance is the need to bring about greater levels of informed
attendance and meaningful participation by shareholders in matters relating to their
companies, without however such freedom being abused to interfere with management
decisions. The Company believes in more meaningful and transparent accounting
and reporting, improved annual reports concomitant with more detailed filing with
regulatory authorities, and greater facilitation for informed participation using the
advances in converging information and communications technologies.