SRI NACHAMMAI COTTON MILLS LIMITED

(BUILD IN INTELLIGENCE AND ADD VALUE)

Sri Nachammai Cotton Mills Limited

No: 30, Sugavaneswara Road, Balaji Nagar, Salem- 636 004.

CODE OF CONDUCT FOR BOARD MEMBERS

Need and objective of the Code:

Clause 49 of the Listing Agreement entered into with the Stock Exchanges, requires, as part of Corporate Governance, the listed entities to lay down a Code of Conduct for Board Members (Directors) and Senior Management Personnel.

This Code of Conduct shall be called Sri Nachammai Cotton Mills Limited’s Code of Conduct for Board Members(Directors) and Senior Management Personnel. This Code of Conduct is not an exhaustive narration of duties, obligations and rights of a Director but broadly provides certain guidelines to be followed by a director. This code basically requires a Director and a Senior Management Personnel to conduct himself/herself in such a manner that there is no conflict of duty and interest, thereby ensuring his/her independence.

Accordingly the Company has laid down this Code of Conduct for its Board Members

1. INTRODUCTION:

1.1 This Code of Conduct (hereinafter referred to as the’Code”) shall be called” The Code of Conduct for Board Members of Sri Nachammai Cotton Mills Limited (hereinafter referred to as the “Company”)

1.2 The purpose of this Code is to enhance ethical and transparent process in

managing the affairs of the Company and thus to sustain the trust and confidence reposed in the Directors by the Shareholders of the Company. Board members of the Company are expected to understand, adhere to, comply with and unhold the provisions of this Code and the standards laid down hereunder in their day-to-day functioning.

1.3 This code envisages that the Board of Directors of the Company (“Board”) must act within the bounds of the authority conferred upon them and with a duty to comply with the requirements of applicable law.

1.4 This Code is in alignment with Company’s Vision and Values to achieve the

Mission & Objectives and aims at enhancing ethical and transparent process in

managing the affairs of the Company.

1.5 The Code basically requires a Director to conduct himself / herself in such a

manner that there is no conflict of duty and interest, thereby ensuring his/her independence.

2 Definitions and Interpretation:

In this Code , unless repugnant to the meaning or context thereof, the following expressions shall have the meaning given to them below:

1. “Board” Shall mean the Board of Directors of the Company.

2. “Board Members” shall mean the Directors on the Board of Directors of the Company.

3. “Company” shall mean the “Sri Nachammai Cotton Mills Limited”

4. “Relative” Shall have the same meaning assigned to the term in Section

2(41) and 6 of the Companies Act,1956 read with Schedule IA of the Companies Act 1956.

2.3 “Company “ shall mean the Sri Nachammai Cotton Mills Limited

3. Applicability:

This Code shall be applicable to all the Board Members.

3.1 The Directors of the Company for the time being (including Executive and Non-

Executive Directors, Nominee Directors and Alternate Directors) are governed by this Code of Conduct.

KEY REQUIREMENTS

The Board Members shall, in all matters related to the Company, act within the authority conferred upon them, keeping the best interests of the Company in view and observe the following:

(i) Shall act in accordance with highest standards of personal and professional integrity, honesty and ethical conduct.

(ii) Shall act in utmost good faith and fulfill the fiduciary obligations without allowing their independence of judgment to be compromised.

(iii) Shall avoid having any personal and / or financial interest in any business dealings concerning the Company, which is prejudicial to the interests of the Company.

(iv) Shall avoid and dealing with a Contractor or Supplies that compromises the ability to transact business on a professional, impartial and competitive basis or that may influence discretionary decision to be made by the Board Members / Company.

(v) Shall not exploit for their own personal gain, opportunities that are discovered through use of corporate property, information or position, unless the opportunity is disclosed fully in writing to the Board of Directors of the Company and the Board declines to pursue such opportunity and allow him to avail such opportunity.

(vi) Shall not make any statement which has the effect to adverse criticism of any policy or action of the Company or which is capable of embarrassing the relations between the Company and the public including all the stakeholders.

Provided that nothing in this clause shall apply to any statement made or views expressed by a Board Member, which are purely factual in nature and are not considered as confidential, in his official capacity or in due performance of the duties assigned to him.

(vii) Shall not commit any offence involving moral turpitude.

4. GIFTS & DONATIONS

The Board Members shall neither receive nor offer or make, directly or indirectly, any illegal payments, remuneration, gifts, donations or comparable benefits which are intended to or perceived to obtain business or uncompetitive favours for the conduct of its business. However, the Board Members may accept and offer nominal gifts, which are customarily given and are of a commemorative nature, for special events.

5. COMPLIANCE OF LAW

The Board Members shall comply with all laws, rules and regulations which arises on account of their being on the Board of the Company.

6. OTHER DIRECTORSHIPS

The Directors should disclose their engagements, either as Director or in any other capacity to the Company in accordance with the provisions of the Companies Act.

7. PREVENTION OF INSIDER TRADING

The Board Members shall also comply with the existing Code of Insider Trading (and the changes made therein from time to time) and the Conduct for prevention of Insider Trading in dealing with securities of the Company.

8. PROTECTION OF ASSETS

The Board Members shall protect the Company’s assets including physical assets, information and intellectual rights and shall not use the same for personal gain.

9. AMENDMENTS TO THE CODE

The provisions of this Code can be amended / modified by the Board of Directors of the Company from time to time and all such amendments / modifications shall take effect from the date stated therein.

10. PLACEMENT OF THE CODE OF WEBSITE

Pursuant to Clause 49 of the Listing Agreement, this Code any amendment thereto shall be hosted on the website of the Company.

11. ANNUAL COMPLIANCE REPORTING

In terms of Clause 49 of the Listing Agreement, all Board Members shall affirm compliance of this Code within 90 days of close of every accounting year. The Annual Report of the Company shall contain a declaration to this effect signed by the Chairman & Managing Director. The Annual Compliance Report shall be forwarded to the Company Secretary. If any Director leaves the Company any time during a financial year, he shall send a communication to Company secretary affirming compliance of the Code till the date of his association with SNCM

12. ENFORCEMENT OF CODE OF CONDUCT

Each Board Member shall be accountable for fully complying with this Code.

13. CONSEQUENCES OF NON-COMPLIANCE OF THIS CODE

In case of breach of this Code by the Board Members, the same shall be considered by the Board of Directors of initiating appropriate action, as deemed necessary.

14. ACKNOWLEDGEMENT OF RECEIPT OF THE CODE

All Board Members shall acknowledge receipt of this Code or any modification(s) thereto, in the acknowledgement form as at Appendix-I and forward the same to the Company Secretary indicating that they have received, read, understood and agreed to comply with this code.

APPENDIX – I

SRI NACHAMMAI COTTON MILLS LIMITED

CODE OF CONDUCT FOR BOARD MEMBERS

ACKNOWLEDGEMENT FORM

I …………………………………………., have received and read the Company’s “CODE OF

CONDUCT FOR BOARD MEMBERS (“this Code”). I have understood the provisions and policies

contained in this Code and I agree to comply with this Code.

Signature : ……………………………………..

Name : ……………………………………..

Designation : ……………………………………..

Date : ……………………………………..

Place : ……………………………………..

Sri Nachammai Cotton Mills Limited

No: 30, Sugavaneswara Road, Balaji Nagar, Salem- 636 004.

CODE OF CONDUCT FOR SENIOR MANAGEMENT PERSONNEL

Need and objective of the Code:

This Code of Conduct shall be called Sri Nachammai Cotton Mills Limited’s Code of Conduct for Senior Management Personnel. This Code of Conduct is not an exhaustive narration of duties, obligations and rights of a Senior Management Personnel but broadly provides certain guidelines to be followed by a Senior Management Personnel. This code basically requires a Senior Management Personnel to conduct himself/herself in such a manner that there is no conflict of duty and interest, thereby ensuring his/her independence.

Accordingly the Company has laid down this Code of Conduct for its Senior Management Personnel

1. INTRODUCTION:

1.1 This Code of Conduct (hereinafter referred to as the’Code”) shall be called” The

Code of Conduct for Senior Management Personnel of Sri Nachammai Cotton Mills Limited (hereinafter referred to as the “Company”)

1.2 The purpose of this Code is to enhance ethical and transparent process in

managing the affairs of the Company and thus to sustain the trust and confidence reposed in Senior Management Personnel of the Company. Senior Management Personnel of the Company are expected to understand, adhere to, comply with and uphold the provisions of this Code and the standards laid down hereunder in their day-to-day functioning.

1.3 This code envisages that the Senior Management Personnel of the Company must act within the bounds of the authority conferred upon them and with a duty to comply with the requirements of applicable law.

1.4 This Code is in alignment with Company’s Vision and Values to achieve the

Mission & Objectives and aims at enhancing ethical and transparent process in

managing the affairs of the Company.

1.5 The Code basically requires a Senior Management Personnel to conduct himself /

herself in such a manner that there is no conflict of duty and interest, thereby

ensuring his/her independence.

2 Definitions and Interpretation:

In this Code , unless repugnant to the meaning or context thereof, the following expressions shall have the meaning given to them below:

1. "Senior Management Personnel " shall mean personnel of the Company

who are members of its core management team excluding the Board of Directors and would comprise of all members of management one level below the whole Time Directors, including head of departments directly reporting to whole Time Directors.

2. “Company” shall mean the “Sri Nachammai Cotton Mills Limited”

3. “Relative” Shall have the same meaning assigned to the term in Section

2(41) and 6 of the Companies Act,1956 read with Schedule IA of the Companies Act 1956.

3. Applicability:

This Code shall be applicable to all the Senior Management Personnel.

4. KEY REQUIREMENTS

The Senior Management Personnel shall, in all matters related to the Company, act within the authority conferred upon them, keeping the best interests of the Company in view and observe the following:

1. Shall act in accordance with highest standards of personal and professional integrity, honesty and ethical conduct.

2. Shall act in utmost good faith and fulfill the fiduciary obligations without allowing their

independence of judgment to be compromised.

3. Shall avoid having any personal and / or financial interest in any business dealings concerning the Company, which is prejudicial to the interests of the Company.

4. Shall not exploit for their own personal gain, opportunities that are discovered through use of corporate property, information or position, unless the opportunity is disclosed fully in writing to the Board of Directors of the Company and the Board declines to pursue such opportunity and allow him to avail such opportunity.

5. Shall not make any statement which has the effect to adverse criticism of any policy or action of the Company or which is capable of embarrassing the relations between the Company and the public including all the stakeholders.

6. Shall not commit any offence involving moral turpitude.

7. Shall not hold any positions (or) Jobs (or) engage in other businesses or interests

that are prejudicial to the interest of the Company.

8. Shall not engage in any business relationship (or) activity with any one who is a party

to a transactions with the Company.

3 GIFTS & DONATIONS

The Senior Management Personnel shall neither receive nor offer or make, directly or indirectly, any illegal payments, remuneration, gifts, donations or comparable benefits which are intended to or perceived to obtain business or uncompetitive favours for the conduct of its business. However, the Senior Management Personnel may accept and offer nominal gifts, which are customarily given and are of a commemorative nature, for special events.

4 COMPLIANCE OF LAW

The Senior Management Personnel shall comply with all laws, rules and regulations which arises on account of their being on the employment of the Company.

5 OTHER DIRECTORSHIPS

The Senior Management Personnel should disclose their engagements in any other capacity to the Company in accordance with the provisions of the Companies Act.

6 PROTECTION OF ASSETS

The Senior Management Personnel shall protect the Company’s assets including physical assets, information and intellectual rights and shall not use the same for personal gain.

7 AMENDMENTS TO THE CODE

8 PLACEMENT OF THE CODE OF WEBSITE

Pursuant to Clause 49 of the Listing Agreement, this Code any amendment thereto shall be hosted on the website of the Company.

9 ANNUAL COMPLIANCE REPORTING

In terms of Clause 49 of the Listing Agreement, all Senior Management Personnel shall affirm compliance of this Code within 90 days of close of every accounting year. The Annual Report of the Company shall contain a declaration to this effect signed by the Chairman & Managing Director. The Annual Compliance Report shall be forwarded to the Company Secretary. If any Senior Management Personnel leaves the Company any time during a financial year, he shall send a communication to Company secretary affirming compliance of the Code till the date of his association with SNCM

10 ENFORCEMENT OF CODE OF CONDUCT

Each Senior Management Personnel be accountable for fully complying with this Code.

11 CONSEQUENCES OF NON-COMPLIANCE OF THIS CODE

In case of breach of this Code by the Senior Management Personnel , the same shall be considered by the Management of the company of initiating appropriate action, as deemed necessary.

12 ACKNOWLEDGEMENT OF RECEIPT OF THE CODE

All Senior Management Personnel shall acknowledge receipt of this Code or any modification(s) thereto, in the acknowledgement form as at Appendix-I and forward the same to the Company Secretary indicating that they have received, read, understood and agreed to comply with this code.

APPENDIX – I

SRI NACHAMMAI COTTON MILLS LIMITED

CODE OF CONDUCT FOR SENIOR MANAGEMENT PERSONNEL