| Preamble Directors are appointed by Shareholders to manage
the Company on their behalf and to act for their benefit and in the interests of the
Company. Accordingly, Directors have a fiduciary relationship with the Company. Their
fiduciary duties arising from such relationship are akin to those of a trustee, and they
are expected to display utmost good faith in their dealings on behalf of the Company or
with the company. They are also not expected to use any of the Company's assets or
information relating to its business, which may come to their control or possession in
order to gain any advantage to themselves at the cost of the Company or its shareholders.
In addition to their fiduciary duties,
Directors owe a duty of care to the Company not to act negligently in the management of
its affairs, the standard of care being that of a prudent and reasonable man looking after
his own affairs.
These fiduciary duties and the duty of care
however are towards the Company comprising the shareholders collectively as a corporate
body and not to any shareholder individually.
Code of Conduct
Based on the above principles the Directors
of McNally Bharat Engineering Company Limited ("The Company") are expected to
observe the following Code of Conduct :-
Disclosure of Interest and
Avoidance of Conflict of Interest
A Director has a duty to disclose his
direct or indirect interest in relation to any contract or arrangement or proposed
contract or arrangement entered into or to be entered into by the Company. For this
purpose he is required to make a general disclosure of interest every year giving a list
of companies and firms in which he shall be deemed to be interested indicating his nature
of interest, with changes, if any, notified to the Board from time to time. In addition,
except with the prior consent of the Board, a Director or a firm in which such Director is
a partner or a private company in which such Director is a member or Director shall not
enter into any contract with the Company having monetary implications.
Directors shall inform the Board of
Directors of the Company before accepting any position of influence or of pecuniary
interest including directorship in any other organisation whose business is in direct
competition with that of the Company.
- Investment in Shares of the Company/
Code for prevention of Insider Trading
A Director is required to disclose his investments in the Company and in
its holding Company or subsidiary, if any, and changes therein, if any, from time to time.
Directors shall not deal in the Company's
securities or a short-term basis. They have to accept that they are not at all times free
to deal in the Company's securities and they are bound by the Company's 'Code of Conduct
for Prevention of Insider Trading.'
- Not to make secret profit
A Director shall not make any secret profit out of
his position. If a Director receives information on a potential business opportunity in
his capacity as a Director of the Company he shall not use that opportunity for his own
purpose.
- Confidentiality
Directors shall keep confidential and not divulge
directly or indirectly any information (except what is in the public domain) relating to
the Company, its intellectual properties, its business and its customers/ vendors which
they have become aware of in the course of their directorship either by knowledge derived
in the course of participation in Board Meetings/ Committee Meetings or from papers
circulated to them as Director. Directors shall not also make use of such information for
any purpose other then for the benefit of the Company.
- Not to contract individually
A Director shall not act on behalf of the Company
with any party or commit himself on behalf of the Company in regard to any arrangement or
contract of a binding nature, unless specifically authorised by the Board in that behalf.
- Voting
When a Director exercises his voting right as a
shareholder at any general meeting of the Company he is free to vote in his own best
interest like any other shareholder. However, when a Director votes as a Director in any
Board Meeting or Committee Meeting he does so in his fiduciary capacity and is bound to
vote not in his own personal interest but in what he considers to be the best interest of
the Company.
- Employee Directors
A Wholetime Director who is an employee of the
Company shall, in addition to the above, be bound by the terms and conditions of his
employment with the Company. He has to wholeheartedly devote his time and attention to the
affairs and business of the Company within his limit and has to ensure all legal
compliances on behalf of the Company in the area of work for which he has been made
responsible.
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