Avon Organics Limited

CODE OF CONDUCT

FOR

DIRECTORS AND SENIOR MANAGEMENT

INTRODUCTION:

Avon Organics Limited (AOL) has formulated the following Code of Conduct as a guide to consistently maintain its Values and Beliefs. The purpose of this code is to enhance further an ethical and transparent process in managing the affairs of the Company and was specifically framed in compliance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges.

APPLICABILITY:

This Code of Conduct highlights the standards of conduct expected from the Directors and Senior Management of the Company.

The term ‘Director’ shall mean both Executive and Non Executive Directors.

The term ‘Senior Management’ shall mean all the Executives in the grade of Vice President’s, General Manager’s and Deputy General Manager’s.

HONESTY & INTEGRITY

In performing their functions, the directors and senior management of the Company shall Act honestly and diligently with integrity, fairness and good faith in all their dealings with and for the Company. 

CONFLICT OF INTEREST:

Directors on the board of the Company and senior management executives shall not engage in any business, relationship or activity, which may be in conflict of interest of the Company or the group.

Conflicts can arise in many situations. It is not possible to cover and describe every possible conflict situation; the following are examples of situations which may constitute a conflict of interest:

i)                    Employment with or serving as a director of a competitor, customer or supplier of the Company.

ii)                   Engaging in any activity / business with a relative or with a firm/company in which a relative / related party is associated in any significant role.

iii)                 Participating in a joint venture, partnership or other business arrangement with the company.

A director and senior executives who has an actual or potential conflict of interest, including any of the situations described above, must disclose to the Board (a) the existence and nature of the actual or potential conflict of interest and (b) all facts known to him/her regarding the transaction that may be material to a judgment about whether to proceed with the transaction. The director or senior executives may proceed with the transaction only after receiving approval from the Board.

CONFIDENTIALITY OF INFORMATION

Directors and senior executives shall maintain the confidentiality of information entrusted to them by the Company. The Company’s confidential and proprietary information shall not be inappropriately disclosed or used for the personal gain or advantage of the director, senior executive or anyone other than the Company

PROTECTION OF ASSETS

The Directors and the Senior Executives shall not indulge or encourage any activity which would result in misuse of the Company's assets. This would include both tangible and intangible assets such as equipment, machinery, systems, material resources, intellectual property rights, goodwill, trademarks, patents, etc.

GIFTS AND DONATIONS

No director or senior executive of the company shall receive or offer, directly or indirectly, any gifts, donations, remuneration, hospitality, illegal payments and comparable benefits which are intended (or perceived to be intended) to obtain business (or uncompetitive) favours or decisions for the conduct of business. Nominal gifts of commemorative nature, for special events may be accepted and reported to the Board.

PREVENTION OF INSIDER TRADING

All directors or senior executives shall not derive benefit or assist others to derive benefit by giving investment advice from the access to and possession of information about the company, not in public domain and therefore constitutes insider information. All directors or senior executives shall comply with Code of Internal Procedures and Conduct for prevention of Insider Trading in Securities of the Company.

COMPLIANCE

Directors are required to comply with all applicable laws, rules and regulations, both in letter and spirit. In order to assist the company in promoting lawful and ethical behavior, directors must report any possible violation of law, rules and regulation or the code of conduct to the company secretary.

ADOPTION AND COMMENCEMENT

This Code of Conduct was adopted by the Board of Directors by a Resolution passed at the meeting held on 29th December, 2005 and shall be come into force with effect from 1st January, 2006.