Corporate Governance - RNAVAL

Policy on Values and Commitments

Values Introduction

Every significant management decision has ethical value dimensions. Managing ethics is particularly relevant for Reliance Defence today because it is critical to understand and manage highly diverse values in the workplace.

Attention to business ethics is critical during times of fundamental change – times much like those faced now by businesses like ours. In times of such fundamental change, values that were previously taken for granted are now strongly questioned. Many of these values are no longer followed.

Consequently, there is no clear compass to guide us through complex dilemmas about what is right or wrong.

To that end, Reliance Defence’s Values and Commitments are presented here. These should be used to guide our actions in business conduct.

Ethics and Values at Reliance Defence Background

At Reliance Defence, the issue of ethics is simple: it is a simple process that involves defining what is right or wrong, and then doing the right thing. Ethics Management at Reliance Defence is about values and associated behaviours.It is a process of defining values and ensuring that corporate and individual employee behaviours epitomize those values.

We at Reliance Defence believe that any business conduct can be ethical only when it rests on the nine core values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility, Citizenship and Caring. Strong commitments to these high values have long been building principles for Reliance Defence.

These values are not to be lost sight of by anyone at Reliance Defence under any circumstances irrespective of the goals that are intended to be achieved. To us, means are as important as the ends.

Though the deeper significance of these values for us cannot be captured in words, a brief description of what we really feel about these virtues is outlined below:

Honesty

We are committed to be truthful in all our actions. We strive to be honest and forthright with one another and with all our stakeholders

Integrity

Reliance Defence insists on honesty, integrity and fairness in all aspects of its business and expects the same in its relationships with all those with whom it does business.

There exists a clear vision and picture of integrity throughout Reliance Defence. Our reward and promotion systems are aligned with this vision of integrity.

Upholding the Reliance Defence reputation is paramount. We are judged by how we act. Our reputation will be upheld if we act with integrity in all our dealings, even at a personal level, and we always do what we think is right at all times.

We say what we mean, and deliver what we promise, and promise to stand for what is right. We always honour all our commitments. We stand for loyalty and trustworthiness.

Respect

We are committed to treat everyone fairly and with respect and dignity.We appreciate and value the skills, strengths, and perspectives of our diverse workforce.We request the uniqueness of each employee.We believe that each employee makes a meaningful contribution in Reliance Defence’s success.

Fairness

Reliance Defence is firmly committed to fairness and objectivity in all its action and interactions. Justice and fairness imbibed in the Organization’s fabric ensure procedural fairness, impartiality and consistency in Reliance Defence operations

Purposefulness

Reliance Defence sees its activities in terms of higher purposes and ideals. This purposefulness is a way of operating which ties Reliance Defence to its environment at a mutually beneficial dimension.

Trust

We endeavour to foster a participatory work environment where trust and confidence between team members is spontaneous. We always encourage teamwork with open, candid and speedy communication.

Responsibility

Our employees are expected to demonstrate highest levels of personal responsibility and continually affirm that they are responsible to themselves for the pursuit of excellence. At Reliance Defence accountability is individual rather than collective. Our employees are committed and enthusiastic to assume responsibility for actions for the organization.

Citizenship

We are a fiercely patriotic company, fully committed to achieving and participating in every conceivable way in the progress and integrity of India.

We are committed to obey all the laws of India and the countries in which we do business and to do our part to make the communities in which we live better.

Caring

Compassion, sharing and kindness are values that we try to inculcate in our decision making process to achieve fairness.

It is imperative that each one of us gets intensely driven from the heart towards upholding of these values in our day to day conduct. This initiative will further stimulate the creation and maintenance of a highly ethical work environment.

Commitments Background

A firm belief that every Reliance Defence team member holds is that the other person’s interests count as much as his / her own. It is not surprising that Reliance Defence has always been able to strike a mutually profitable equilibrium with ease while interacting with diverse internal and external stakeholder groups.Reliance Defence strives to make the good of these diverse stakeholder groups as part of its good.

Reliance Defence recognizes that maintaining the trust and confidence of all its stakeholders is crucial to its continued growth and success. We are aware that a company must be an integral part of the society in which its operates: that it must fulfill a number of different expectations – financial, social and environmental: and that there is no substitute to being right.

We seek success by being sensitive and alive to the interests and concerns of others in the society, and by working constructively with them to find solutions of mutual benefit.

In pursuit of these values outlined above, we are committed to the ethical treatment of all our stakeholders.

Commitment to Stakeholders

In all our relationships we demonstrate our steadfast commitment to all our stakeholders:

Our employees

Reliance Defence recognises that its commercial success depends on the full commitment al all employees.

We are committed to respect the human rights of our employees. We strive to treat our employees with honesty, just management, due dignity and fairness. We are committed to providing our employees with a good, safe and healthy environment and competitive terms and conditions of service. Reliance Defence promotes the development and best use of human talent. It encourages the involvement of employees in the planning, direction and fair appraisal of their work. The employees are also encouraged to participate in the application of these ethics and values within the company.

Our customers

We are committed to providing quality products to our customers. Our mission is (i) to achieve excellence in service, quality reliability, safety and customer care, (ii) to earn the trust and confidence of all customers, exceeding their expectations and make the Company a household name, and (iii) to work with vigour, dedication and innovation, with total customer satisfaction as the ultimate goal. Reliance Defence

Our environment

Reliance Defence is committed to acting as a concerned and responsible community participant reflecting all aspects of good corporate citizenship. Reliance Defence is committed to achieving the global standards of health, safety and environment. Reliance Defence works with its community by volunteering and supporting education, medical welfare and other worthy causes that lead to sustainable development.

Our shareholders

We are committed to pursuing sound growth and earnings objectives and to exercising prudence in the use of our assets and resources. Enhancing shareholder value remains the prime driving force of Reliance Defence’s business and financial decisions. We will ensure our success by satisfying our customers and increasing shareholder value.

Our lenders and other investors

We are committed to truthful disclosure of all material facts and the regular and timely payment of all our debt service obligations.

Our suppliers and other service providers.

We are committed to fair competition and the sense of responsibility required of a good customer.

The government

Reliance Defence is a fiercely patriotic company.

We are committed to the payment of all-applicable taxes and duties and adherence to all-applicable laws and regulations.

Policy on Code of Ethics

Code of Ethics Background

Reliance Defence’s Code of Ethics is in alignment with its values and commitments. The essence of this code is that each employee should conduct the Company’s business in a way that upholds its values and commitments.

This code expects every employee to conduct business with integrity, in compliance with applicable laws, and in a manner that excludes consideration of direct or indirect personal advantage / gains.

It is the individual responsibility of each one of Reliance Defence’s employees to ensure that all of us are aware of these values, commitments, and procedures, and behave in accordance with the spirit as well as the letter of this code.

Reliance Defence recognizes that it is vital that the behaviour of its employees matches the high intentions and values. Hence, adherence to all the elements of this code and the accompanying principles and procedures is necessary. The principles and procedures in this Code of Ethics apply to all material transactions, large or small, and describe the conduct expected of every Reliance Defence employee.

Issues dealt with by Reliance Defence’s Code of Ethics

Code of Ethics contains the policy on the following:

1. Conflict of Interest
2. Payments and Gifting
3. Receipt of Gifts
4. Purchases through suppliers and other service providers
5. Regarding full-time consultants, agents, representatives and others
6. Political Contributions

Policy on Conflict of Interest

1. What is a ‘Conflict of Interest’?

A conflict of interest may exist when an employee is involved in an activity or has a personal (direct or indirect, by himself or through any relative) interest that in the opinion of the company interferes with the employee’s objectivity in performing company duties and responsibilities.

An actual conflict of interest need not be present. Also, a direct loss or disadvantage to the company need not be present / evident. Activities that creates the appearance of a conflict of interest also are automatically deemed to be covered by this policy in order not to reflect negatively on the reputation of Reliance Defence and / or its employees.

Any ‘indirect’ interest, held by an employee, in any property, proprietorship, concern, partnership, investment, arrangement, agreement or transaction that creates or can create direct or indirect personal advantage or gains can lead to a conflict of interest.

A conflict of interest can arise when an employee is involved in a transaction / arrangement with any person acting on his / her behalf or at his / her behest for the employee’s direct or indirect personal advantage or gains. Such activities, arrangements, transactions, agreements are not allowed and must be discontinued by the employees immediately, failing which the company will commence the contract termination process and disciplinary action.

2. What is the essence of this code on conflict of interest?

Any activity or personal (direct or indirect) interest of the employee, including those of the employee’s relatives, that leads to or can lead to a conflict of interest, is prohibited.

Employees are expected to provide truthful, accurate and complete information about certain facts, transactions, and relationships that may have bearing on issues related to conflicts of interests. They are expected to provide details about these facts, transactions and relationships to provide details about these facts, transactions and relationships irrespective of their assessment of whether a conflict of interest exists. Disclosure forms seeking such information will be made available to employees for submitting it in a confidential manner to the Ethics Office.

This is a key element of the plan to implement and enforce the policy on conflict of interest as it promotes self-regulation and is built on the pillars of trust and self-responsibility. Employees are expected to identify conflicts of interest that involve them and are further expected to discontinue activities that result in or can result in conflicts of interest.

3. What should employees do to avoid a conflict of interest?

Employees should steer clear of any situation, which involves or may involve a conflict between their personal interest and the interest of the company.

Employees should avoid any relationship, influence, or activity that might impair, or even appear to impair, their ability to make objective and fair decisions when performing their job.

Employees dealing with customers, suppliers, contractors, competitors or any person doing or seeking to do business with the company are to act in the best interest of the company to exclusion of considerations of direct or indirect personal preference or advantage.

Employees are obliged to place Reliance Defence’s interest in any business transactions ahead of any direct or indirect personal interest or personal gain to the individual employee or to the employee’s spouse, family member, friend or other individual.

An employee should not have an outside employment or be involved in an outside activity which is in direct / indirect conflict with the official duties of the employee. Employees are also prohibited from using their position / title / authority associated with their office or coerce or induce a benefit for themselves or others.

Any declaration by an employee which belies any of the above and therefore causes conflict of interest shall be deemed as an act of misconduct and he / she may face disciplinary action.

Certain presumptions will arise against employees acting in contravention with these requirements.

4. What actions are to be avoided by the employees at all times?

Any person to whom this policy is made applicable cannot undertake any of the following activities:

• To undertake full-time employment or significant and active managerial or decision-making role in any business enterprise other than Reliance Defence.
• Bar on setting up, operating, advising, representing, or getting involved in any manner whatsoever with business enterprise that competes with Reliance Defence in any of our businesses.
• Holding an investment interest (either directly or indirectly through any relative*) or any kind of financial involvement or acting as an officer, member, director, partner, consultant, representative, agent, advisor, broker, intermediary or employee or in any other capacity in any outside business enterprise would not be allowed if the outside interest does or proposes to do business with Reliance Defence (as a supplier, customer, consultant, advisor, agent, broker, intermediary, representative or in any other way).

(*Relatives include the following Spouse, Father, Mother, Sons, Son’s Wife, Daughters, Daughters’ Husband, Father’s father, Father’s Mother, Mother’s Father, Mother’s Mother, Son’s son, Son’s Son’s wife, Son’s Daughter, Son’s Daughter’s Husband, Daughter’s son, Daughter’s Son’s wife, Daughter’s Daughter, Daughter’s Daughter’s Husband, Brother (including step brother) Brother’s Wife, Sister (including Step-Sister) Sister’s Husband, Member’s of HUF)

• Not to participate in any activity that might lead to or give the appearance of unapproved disclosures of proprietary information or proprietary information owned by others who have entrusted such information to Reliance Defence
• Employees should not use their corporate official title or position to promote a book, seminar, or any other similar activity. All employees may accept honoraria for an appearance, speech or article, provided that the activity does not relate to the employee’s official duties.
• An employee cannot be involved or engaged in any other activity that could create the appearance of a conflict of interest and thereby impair Reliance Defence’s reputation.

5. What are the exception to the above policy?

• An employee can accept an office in a non-profit organization if he obtains prior approval from the management.
• An employee can accept an office or hold an investment in any outside entity (which is doing or proposes to do business with Reliance Defence e.g. Joint Venture) if he has obtained approval from the management and such investment / office is held on behalf of or as a nominee of the Company.

Policy on Payments and Gifting

What are the general principles that employees should bear in mind while making any payments, giving gifts on behalf of Reliance Defence?

Gifts, payments, business courtesies, favours and entertainment may be given to others at company expense only if they meet all of the following criteria:

• They are consistent with customary business practices;
• They are not in contravention of applicable law; and
• Public disclosure of the facts will not create the appearance of impropriety or embarrass either the company or the employee.

Permissible exceptions include: offering Reliance Defence advertising or promotional items such as a calendar, or similar item displaying the Company logo and name, and providing modest hospitality connection with business activities.

The Company will notify from time to time a list of gifts are permissible.

An employee should never use personal funds or resources to do something that cannot be done with Reliance Defence’s resources.

 

2. What care should be taken while making payments or giving gifts on behalf of the Company?

If any doubt exists as to the impact an offer of a business courtesy could have on the reputation of the company or of those involved, the business courtesy should not be offered.

3. What are the specific principles pertaining to gifts given to customers?

Employees may offer business courtesies to customers, provided the following four conditions are all met:

• The business courtesy does not violate any law or regulation or known policy of the customer, and
• The business courtesy is customary and consistent with the business practices of the marketplace in which it is offered.
• Approval at an appropriate level is obtained.
• The business courtesy is properly reflected on the books and records of the Company.

4. What are the specific principles pertaining to payments made or allowances given to customers?

Commissions, rebates, discounts, credits, waivers, and allowances should be paid or granted only by the company on whose books the related sale is recorded, and such payments should:

• Bear a reasonable relationship to the value of goods delivered or service rendered.
• Be by cheque or bank transfer or in kind and note to individual officers, employees or agents of such entity or a related business entity: and
• Be supported by documentation that is complete and that clearly defines the nature and purpose of the transaction.

Agreements for the company to pay commissions, rebates, credits, waivers, discounts or allowances should be in writing, when this is not feasible, the payment arrangements should be supported by an explanatory memorandum for file prepared by the approving business head.

5. What are the exceptions to the above policy?

The intent of the above policy is to avoid illegal or unethical payments, or establishing an environment where these may inadvertently be made.

However, the business world is complex and there may be unusual situations in apparent conflict with one or more provisions of the above policy. Some situations may warrant exception if they form acceptable business practice.

In all cases there must be no falsification, misrepresentation or deliberate over-billing relocated in any document involved in the transaction. This includes suppression or omission of documents or of information in documents, or deliberate misdirection of documents.

Commissioner, rebates, credits, waivers, discounts or allowances that are paid or granted by the Company in conformity with normal standard procedures are deemed to have been established in writing and need not be documented in a written agreement or memorandum for file.

Entertainment or an exchange of gifts purchased at employee expense under circumstances which make it clear that the entertainment or gift is based solely on a family relationship or personal friendship is not considered a business courtesy and is, therefore, not governed by this procedure.

However, when both a business and personal relationship exist, management should review the circumstances. In such cases, all those involved must be sensitive to and avoid any activity or situation that could create an actual or apparent conflict of interest.

6. What are the specific principles pertaining to payments made or commission paid in connection with purchases?

All the terms and conditions pertaining to payments made or commissions paid in connection with the company’s purchases of goods and services should:

• Be supported by documentation that is complete and that clearly defines the nature and purpose of the transaction;
• Be consistent with trade practices and in line with applicable laws;
• Bear a reasonable relationship to the value of goods delivered or service rendered; and
• Be by cheque or bank transfer or in kind and not to individual officers, employees or agents of such entity or a related business entity.

Policy on Receipt of Gifts

1. What are the general principles that Reliance Defence employees are expected to bear in mind before accepting any gifts or business courtesies?

All business courtesies offered to and accepted by Reliance Defence employees are courtesies that belong to Reliance Defence Employees do not have a right to keep a business courtesy for personal use.

When offered a business courtesy, employees should determine whether it is appropriate to accept the courtesy on behalf of Reliance Defence after considering why is it being extended and possible repercussions on acceptance.

Acceptance and disposal of any gift / business courtesy has to be in line with the requirements of this code

2. What gifts or business courtesies can Reliance Defence employees accept

An employee may keep a business courtesy

• When the courtesy is usually associated with customary business practices.
• Promotes successful working relationships and goodwill with persons or firms with whom Reliance Defence maintains or may establish a business relationship. Such courtesies include infrequent business meals and entertainment that are shared with the person who has offered to pay for the meal or entertainment. However, employees should use good judgement and decline invitation for meals and entertainment that are inappropriately lavish or excessive and are of such nature or magnitude that cannot be reciprocated.
• Conforms to the reasonable and ethical practices of the marketplace, such as flowers, fruits baskets, and other modest presents, that commemorate a special occasion.
• Does not create actual conflict of interest of divided loyalty, such as placing the interests of the person or firm that offered the courtesy above the interests of Reliance Defence, including the Company’s interest in conducting business fairly and impartially; and
• Does not create the appearance of an improper attempt to influence business decisions, such as accepting courtesies or entertainment from a supplier whose contract is expiring in the near future.
• Novelty, advertising, or promotional items of nominal value, such as calendars, pens, and mugs may generally be retained.

When local customs or practices make it inappropriate to decline the business courtesy at the time it is offered, employees should accept the courtesy and follow the guidelines for disposition.

3. What gifts or business courtesies Reliance Defence employees cannot accept?

Employees shall neither seek nor accept for themselves or others any gifts, favours, business courtesies or entertainment without a legitimate business purpose, nor seek or accept loans (other than conventional loans at market rates from lending institutions) from any person or business organization that does or seeks to do business with, or is a competitor of the company.

Employees who award contracts or who can influence the allocation of business, who create specifications that result in the placement of business, or who participate in negotiating contracts must be particularly careful to avoid actions that create the appearance of favouritism or that may adversely affect the company’s reputation.

Employees should avoid a pattern of accepting frequent courtesies from the same persons or companies.

The following actions made by employees would be completely unacceptable:

Asking for a business courtesy.

Accepting a business courtesy when:

• An attempt is being made by the donor to offer the courtesy in exchange for or to influence, favourable action by Reliance Defence.
• An attempt is being made to motivate an employee to do anything that is prohibited by law, regulations, or Reliance Defence or donor policy.
• An attempt is being made to gain an unfair competitive advantage by improperly influencing an employee’s discretionary decisions.
• Using a company position as a means of obtaining business courtesies, such as personal discounts (on products, services, or other items). Employees may accept Reliance Defence approved discounts or discounts available to all Reliance Defence employees.
• Accepting offers of expense-paid trips for pleasure from persons or firms with whom Reliance Defence maintains or may establish a business relationship.
• Accepting a gift in cash or cash equivalents of any amount.

4. What is appropriate action in case of gifts that have been accepted but are inappropriate? What should a Reliance Defence employee do when the business courtesy or the gift is inappropriate or unacceptable?

If it is not appropriate to accept or retain a courtesy, the employee should either politely refuse the business courtesy at the time it is offered or follow the following guidelines for disposition.

Whenever an employee has accepted a courtesy that does not meet the criteria for acceptance in this procedure, he or she should use one of the following alternatives:

• Return it to the donor with a polite explanation that Reliance Defence policy prohibits retention of the business courtesy.
• Promptly forward the courtesy to the department dealing with community welfare and charities for appropriate disposition.
• Retain the courtesy for displaying with prior approval.
• Retain the courtesy for personal use after prior approval or after paying Reliance Defence an amount equal to the fair value of the business courtesy.

If the employee is ultimately permitted to retain such gifts, the Head of Department shall record his / her approval in writing and the employee will retain the approval on file for potential audit review.

Policy on purchases through suppliers and other service providers

1. What are the general principles of the purchase policy?

Purchase decision must be made purely on the basis of quality, service, price, delivery, best value, or other similar factors.

Extraneous or personal interest / advantage should never be the criteria for arriving at purchase decisions.

Objective, fair, transparent and responsible criteria must be used while evaluating, passing or rejecting the quality of the goods / services supplied.

If such criteria are being followed, the employees should not have any apprehension and fears about taking any procurement decisions.

Care must be taken to avoid actual / potential conflicts of interest and the appearance of partiality regarding all business transactions with suppliers and other service providers.

2. What actions should be avoided by Reliance Defence employees while dealing with suppliers other service providers?

Employees may not solicit gifts or courtesies from suppliers / other service providers. However, under certain limited circumstances employees may accept gifts or business courtesies from suppliers / other service providers. Employees may receive business courtesies from suppliers / other service providers only in accordance with Policy outlined in this code.

Business and personal activities must be kept separate. Having both a personal and business involvement with a supplier or potential supplier / other service providers may create a conflict of interest or appearance of partiality. Please refer to the Policy on Conflict of Interest given in this code.

3. What additional responsibilities are levied on Reliance Defence employees under this Code?

A supplier’s or potential supplier’s proprietary information and resources must be protected by Reliance Defence employees in accordance with Inside Information policy as outlined elsewhere in this code.

Employees are responsible for complying with supplier-imposed limitations governing use of supplier information, including such items as documents and computer software.

Reliance Defence proprietary or sensitive information must not be disclosed to a supplier or potential supplier unless disclosure is authorized and in accordance with Inside Information policy as outlined elsewhere in this code.

All company employees, contract labour, consultants, representatives, agents and others acting for the company are prohibited from the following actions:

• Soliciting, accepting, or attempting to accept any kickback.
• Including, directly or indirectly, the amount of any kickback in the price charged under a contract, either as prime contractor or sub-contractor.

The term ‘kickback’ includes any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind whether in cash or kind that is provided directly or indirectly to anyone for the purpose of inappropriately or improperly obtaining or rewarding favourable treatment.

It should be noted that any action that even appears to be in violation of the above principles would be severely dealt with.

4. What are the responsibilities that are levied on the suppliers / other service providers as per this policy?

Suppliers / other service providers are required to ensure that their actions in no way contravene any provisions of Reliance Defence’s Business Ethics Policies.

They must take special care in respect of the specific requirements of the policy on conflict of interest, payments and gifts and receipt of gifts. These specific requirements will be incorporated as additional terms of all existing and new contracts with all suppliers and vendors.

The overearching principle that the supplier ought to keep in mind is that their actions should not result in any direct or indirect personal advantage or gains for any Reliance Defence employee or his / her relatives. It is not relevant for the purposes of this policy whether such actions were performed at the behest of the Reliance Defence employee or were suo-moto actions on the part of the supplier.

Any supplier or vendor found to be violating any of these requirements will subject himself to the possibility of termination of his contract and the payment of liquidated damages.

Policy regarding full-time consultants, agents, and representatives and others

5. What are the general principles regarding consultants, agents, and representatives?

We are committed to maintaining the integrity of our full time consultants, advisors, agents, intermediaries, contractors, brokers, and representatives.

Business integrity is a key criteria for the selection and retention of those who represent Reliance Defence.

Appointment of consultants, advisors, agents, intermediaries, brokers, and representatives must not result in the creation of a conflict of interest. For example, when a relative of an employee acts as a consultant, advisor, agent, intermediary, broker and representative of Reliance Defence, a conflict of interest may arise. Such instances should be discontinued.

In this context, reference should be made to the company policy on Conflicts of Interest.

Individuals should never be appointed as consultants, advisors, agents, intermediaries, brokers, or representatives with a view to circumvent Reliance Defence’s ethics and values.Full-time agents, representatives, or consultants who expressly represent or propose to represent Reliance Defence must certify their willingness to comply with the Company’s policies and procedures.

Policy on Political contributions

What are the general principles regarding political contributions?

Employees shall not make any contribution of company funds to any political party or committee, domestic or foreign, or to any candidate for or holder of any office of any government – National, State, local or foreign unless it is legally permissible and is appropriately authorized.

Reliance Defence employees should not make illegal political contributions, either directly or indirectly, through the use of expense accounts or through payments to third parties or on their own account.

1. What is the essence of the fair market practices adopted by Reliance Defence ?

Reliance Defence believes that the welfare of consumers is best served by economic competition.

We believe in and strive to protect the free enterprise system. We are committed to the maintenance of an efficient, free and competitive market structure. We compete fairly and ethically for all business opportunities.

2. What actions should Reliance Defence employees refrain from performing?

Employees should refrain from entering into agreements and practices that unreasonably restrict competition and are in restraint of free trade such as price fixing and boycotting suppliers or customers.

Any commercial strategy based on the intention to run a competitor out of business through unfair pricing or otherwise cannot be followed.

Disparaging, misrepresenting, or harassing a competitor; stealing trade secrets; bribery; and kickbacks are strongly discouraged.

Organisational conflicts in which one business unit’s activities may preclude or impede the pursuit of a related activity by another business unit should be avoided.

Policy on Inside information

1. What is Inside Information?

Employees usually have ‘non-public’ information about Reliance Defence or about a company with which Reliance Defence does business.Such information is termed ‘inside information’.

Inside information includes, but is not limited to, ‘unpublished price sensitive information’.

Such inside information may include information about

• new products or processes;
• mergers, acquisitions or dispositions of businesses or securities;
• problems being faced by the company;
• sales;
• profitability;
• negotiations relating to significant contracts or
• business relationships with others;
• significant litigation; or
• other financial, technical, commercial, legal information
• pricing policies
• Customer negotiation details
• Business policies
• Operational discussions and decisions
• Viewpoints of individual manager that may surface in a discussion

2. What is “unpublished price sensitive” information?

Please refer to The Policy on Insider Trading for details.

3. What are the general principles of the Company policy about Inside Information?

It is important to understand that any Reliance Defence employee may hold inside information and be subject to the restrictions contained in this policy.

Employees should not give or release, without proper authority, to anyone not employed by the company, or to another employee who has no need or does not have the appropriate authority to receive inside information.

Careful control of and restriction of access to sensitive inside information can significantly inhibit improper use of such information.

Employees should not use inside information obtained which in company employment (including information about customers, suppliers or competitors) for the direct or indirect personal gain of the employee or anyone else.

This includes, but is not limited to, taking advantage of such information by :

• trading or providing information for others to trade in securities or
• acquiring an interest of any kind of property, including but not limited to plant or office sites or adjacent properties or
• advising or assisting or informing a customer, contractor, supplier, consultant, advisor, agents, intermediary, contractor, broker, and representative of the company in a manner which leads to direct or indirect personal gain of the employee or anyone else.

Data transmitted or stored electronically are the assets of the Company requiring protection. Each data user throughout the company is responsible for compliance with the standards and related procedures with reference to safe guarding such data.

Employees who handle particularly sensitive inside information, and who may not have the background to understand the legal and corporate implications of the misuse of such information, should periodically discuss with the Ethics Office the implications of this policy.

If during the course of employment in Reliance Defence employees have developed any patent, know how, invention, or process or if they have been entrusted in preparation of any market/other research report, the same is prohibited from being used outside the company.

Employees should also refer to the Insider Trading Policy contained in this policy document to further understand the company’s policy on this issue.

Employees found violating the requirements of the Policy on Insider Information would be subject to disciplinary action.

Policy on Financial and Accounting Integrity

1. What is our commitment?

We are committed to the maintenance of accurate and complete corporate records.

2. What is expected of employees?

Transactions between Reliance Defence and outside individuals and organisations must be promptly and accurately entered in our books and systems in accordance with generally accepted accounting practices and principles.

3. What actions on the part of employees are considered unacceptable?

Rationalising or even considering misrepresentation of facts or falsification of records is completely unacceptable. It is illegal, will not be tolerated, and will result in disciplinary action.

4. What is the specific policy to ensure financial and accounting integrity ?

All accounts and records shall be documented in a manner that :

• clearly describes an identifies the true nature of business transactions, assets, liability, income and expenditure and
• properly and timely classifies and records entries on the books of account in conformity with generally accepted accounting practices and principles.

No record or entry or document shall be false, distorted, misleading, misdirected, deliberately left incomplete or suppressed.

There is no room for :

• Improper or fraudulent accounting;
• Documentation or financial reporting contrary to company’s policies and
• Intentional wrong accounting / misclassifications and miscalculations.
• The company has established internal control standards and procedures to ensure that assets are protected and properly used and that financial records and reports are accurate and reliable.
• Employees share the responsibility for maintaining and complying with required internal controls. Improper accounting and documentation and fraudulent financial reporting are not only contrary to Company policy but also may be in violation of laws and regulations.
• Policy on External Communication

  What are the principles for external communication?

  Reliance Defence seeks to form a constructive and productive relationship with all aspects of media. Reliance Defence recognizes that open communication is essential. Reliance Defence has a comprehensive corporate information programme and provides full relevant information about its activities to legitimately interested parties, subject to any overriding considerations of business confidentiality and cost.

  Only employees authorised by Reliance Defence’s Corporate Communications Department are permitted to give an interview/or publish an article written by him/her, in various sections of media/radio/T.V. shows, etc.

  The above does not apply to non Reliance Defence topics.However, it will be preferred if the employee clears the same prior to the said interview/press article, radio talk or TV show with the Corporate Communications Department.

  For further details, reference may be made to the detailed internal guidelines issued by Corporate Communications.

  Policy on Work Ethics

  1. Why do we need a policy on Work Ethics?

  Success in implementing a Code of Ethics is not likely to be fully achieved in a large organization like Reliance Defence without a positive work environment. Inter-personal relations based on the values of respect, harmony and mutual development are key in this effort.

  Managers need to take effort to maintain high standards of interpersonal behaviour to ensure continuing employee development and high levels of morale within the organization.

  To that end, a defined code of work ethics can give managers a clearer direction on these issues.

  2. What are the issues that are relevant to promote better work ethics? And what are our policies?

  Business confidentiality

  Employees are expected to maintain business secrecy and confidentiality by ensuring that inside information policy is implemented. For instance, employees should not share with others any information that they may come to acquire during the process of closed door discussions with other employees/outsiders.

  Favouritism in the workplace

  All Departmental / Business Heads must treat each and every employee in their department equally.

  It is but natural for a manager to trust, respect and depend upon one employee most than another – a result of experience, common interests, goals or backgrounds.

  The underlying principles is that each one of us, regardless of our position within Reliance Defence, are expected to work to create an environment where people are valued as individuals and treated with respect, dignity, fairness and equality, thus leaving no room for displays of favoritism.

  Avoid behavior and actions that can result in a Conflict of Interest.

  For a conflict of interest to exist, direct benefit to the employee may or may not be feasible. Conflict of interest may also arise when an emotional attachment to a person by way of relation or allied interests can affect or affects the decisions made by the employee. The employee should conduct himself and arrange his affairs in way that ensures he is not involved in any arrangement or circumstance, including relations or other personal relationships that might dissuade him from acting in the best interest of the company.

  An employee should not use directly or indirectly his influence within the company on an officer of the company, or other executives, or on any outside party, that may benefit an employee and/or his family and/or his relations and/or any persons covered above.

  Avoiding Intellectual Dishonesty
  • Employees should perform their actions with sincere diligence and honesty. They should strive to attain high levels of intellectual integrity and honesty. Employees should strive to be true to themselves while performing their duties. A typical example of intellectual dishonesty would be when an employee decides to present an inaccurate picture of his work/performance to his superiors even when he is consciously aware of the inaccuracy. Such behavior should be avoided.
  • Intellectual integrity fosters leadership qualities in employees. Managers should strive to instill, encourage, and appreciate intellectual integrity in their colleagues.
  Gossiping at Work
  • There is no place for malicious rumors and gossip, both of which attack the spirit of the individual and attempt to divide us into groups.
  • At Reliance Defence’s workplace, all employees should not gossip. Of course, it is only natural that we communicate with other employees, but our office is no place for rumors / gossip.
  • Whenever you are communicating / passing information (casually or not), do so in a manner that ensures that the message heard by those listening, is as accurate as possible.
  • Insinuations, half-truths, malicious rumors must be avoided.
  • Reliance Defence’s ethical work place is based on trust, honesty, candor and teamwork.
  Other related standards

  The following guidelines are suggested:

  • To tidy up work areas.
  • To organize all files, papers and documents.
  • To punch in the Time-o-log attendance system each time an employee leaves / returns to office.
  • Refrain from using office assets and properties for personal work.
  • Maintain company property and assets with appropriate care.
  Other office behavioural standards

  The cost of these activities is high, especially in the areas of motivation, morale and stress, quality, turnover, productivity, pride as well as customer satisfaction – all the areas that we want to emphasize in a highly ethical company.

  • Refrain from “scapegoating” – blaming others for missed commitments, bad decisions or poor results.
  • Allowing the boss/ colleagues to fail by withholding information or by not pointing out risks.
  • Over-promising a customer/ colleague.
  • Turf-guarding / protecting yourself from losing control or power.
  • Withholding / purposely delaying information required by another department/ colleague.
  • Risk aversion – not doing what is needed to succeed because you fear the consequences of failure more than you value the reward of success.
  • Not delivering on commitments due to the fact that the other person’s priorities are not important to you or because you look good by looking better than someone else.
  • Misuse of time : Time is an asset and the misuse of that asset is just as wrong as the misuse of any of our assets here at Reliance Defence
  Examples of mischarging time :
  • Taking personal time off and not reporting it.
  • Long lunches and breaks.
  • Wasting time at work on computer games, personal business or reading magazines.
  • Time spent on telephone on personal matters or working during office hours on personal projects.
  • Calling outsiders at the work place and conducting personal/ other business appointments.
  Transparency
  • What is Reliance Defence’s policy on Transparency? Reliance Defence and all its employees undertake to conduct all the business transactions and take all decisions which are relevant to their function, in a transparent and reasoned manner keeping in mind, the established norms of confidentiality and secrecy which are necessary to protect the business and competitive interests of Reliance Defence
  • The employees shall conduct all their actions in a manner complying with all laws and requisite disclosures thereunder.
  • The employees shall endeavour to create an internal communication network in their spheres of operation and activity, which is transparent and unhindered by levels in organizational hierarchy.
  Protection and use of Assets
  • What is the company’s policy on protection and use of assets ? It is the primary responsibility of each employee to protect and properly utilize the Company’s assets including proprietary information. Employees must safeguard company’s physical property and other assets against unauthorized use or removal, as well as against loss by criminal act or breach of trust.
  Policy on Personal Conduct

  1. What are employees expected to do ?

  Reliance Defence employees are expected to ensure that their conduct at all times, in official as well as personal capacity is such that Reliance Defence s reputation is upheld.

  They must remember that one is judged by how he or she acts and the company he or she keeps. Our reputation will be upheld if we act with integrity in all our dealings, even at a personal level, and we always do what we think is right at all times.

  2. What is the policy on personal conduct ?

  In official as well as personal capacity, employees at no times should indulge in any action / behaviour that :

  • Violates any law; or
  • Is indicative of personal indiscretion; or
  • Is socially unacceptable.

  3. What is the essence of this policy on conduct at home ?

  When judging the relevance of any personal indiscretion or socially unacceptable behaviour by an employee, whether at work or elsewhere, consideration of following questions may be helpful :

  • Could the employee’s conduct leave him or her vulnerable to special pressures from others in a way that might affect his or her work ?
  • Could the employee’s conduct prejudice Reliance Defence’s good name ?

  4. What are some common actions that can be considered as improper conduct?

  • Exercise of sound judgement and common sense will equip every employee to judge as to whether his / her actions can be construed as improper conduct. The key question that employees need to ask themselves at all times is whether this conduct befits a cultured, mature, and socially responsible adult ?
  • It also must be kept in mind that while major lapses of law and social behaviour are usually prevented very often seemingly minor mistakes can and do result in improper conduct. Even such actions need to be avoided.
  Indicative examples are : Violation of law
  • Possession of liquor in excess of permissible limits is a violation of the excise laws.
  • Possession of foreign exchange in excess of defined limits is in violation of forex laws.
  • Holding undeclared or undisclosed assets.
  Acts of personal indiscretion or socially unacceptable behaviour
  • Getting drunk in a party or a social function or misbehaving in public.
  • To be under the influence of liquor, narcotics or any other form of intoxication while representing Reliance Defence or reporting to work at the Reliance Defence premises or at a customer’s / supplier’s premises.
  • Using abusive – expletive infested language
  • Inflicting verbal abuse on anyone (including employees)
  • Loud and irresponsible behavior in public which causes discomfort and embarrassment to surrounding people.
  • Manhandling or physical assault on any one.
  • Unreasonable criticism
  • Undue show of authority
  • Reporting to work in an inappropriate dress or presenting oneself in a shabby manner

  The range of possibilities covered by this policy is too wide for any pre-defined guidelines. Respect for the self as well as for others has to be the guiding principle for personal conduct. However, it is imperative that employees remember to exercise sound judgement and demonstrate a serious sense of responsibility and maturity all times and in official as well as personal capacities.

  Policy on Health Safety and Environment

  What is Reliance Defence’s policy on Health Safety and Environment ?

  “Safety of person overrides all the Production Targets” – is the Health, Safety and Environment Policy of Reliance Defence.

  To attain this, the Health Safety and Environment in the plants are safeguarded by the provision of :-

  • Properly designed plants.
  • Effective use of safe working procedures and practices.
  • Meeting in all respects the applicable statutory requirements.
  • Clearly defined procedures for inspection, operation and emergency shut down and their updating.
  • Imparting relevant training and strict validation of employees after training.
  • Continuous, systematic and micro level auditing – internal as well as external – of work procedures and practices.
  • Continuous and systematic education of Company’s Contractors’ and Transporters’ personnel for observing safe work practices.
  • A detailed investigation of all incidents including the minor ones and near-miss incidents followed by recommendations to avoid recurrence.
  • Analyse the findings of investigations of accidents in similar industry and take steps to prevent such accidents in the plants.
  • Keep abreast with the latest international codes, standards and practices.
  • Continuous monitoring of plant and ambient environment as well as of various effluents – liquid, gas and solid – to maintain a clean and safe environment in and around the plants.
  • Pre-employment and periodic medical check-ups of employees for early identification of occupational health hazards.
  Policy on Quality

  What is Reliance Defence policy on Quality ?

  We at Reliance Defence are committed to total customer satisfaction in terms of quality and services for the entire range of our products.

  Our continued commitment to excellence and innovative efforts help us stay ahead as market leaders.

Policy on Code of Ethics

Code of Ethics Background Reliance Defence’s Code of Ethics is in alignment with its values and commitments. The essence of this code is that each employee should conduct the Company’s business in a way that upholds its values and commitments. This code expects every employee to conduct business with integrity, in compliance with applicable laws, and in a manner that excludes consideration of direct or indirect personal advantage / gains. It is the individual responsibility of each one of Reliance Defence’s employees to ensure that all of us are aware of these values, commitments, and procedures, and behave in accordance with the spirit as well as the letter of this code. Reliance Defence recognizes that it is vital that the behaviour of its employees matches the high intentions and values. Hence, adherence to all the elements of this code and the accompanying principles and procedures is necessary. The principles and procedures in this Code of Ethics apply to all material transactions, large or small, and describe the conduct expected of every Reliance Defence employee. Issues dealt with by Reliance Defence’s Code of Ethics

Code of Ethics contains the policy on the following:

1. Conflict of Interest
2. Payments and Gifting
3. Receipt of Gifts
4. Purchases through suppliers and other service providers
5. Regarding full-time consultants, agents, representatives and others
6. Political Contributions
Policy on Conflict of Interest

1. What is a ‘Conflict of Interest’?

A conflict of interest may exist when an employee is involved in an activity or has a personal (direct or indirect, by himself or through any relative) interest that in the opinion of the company interferes with the employee’s objectivity in performing company duties and responsibilities.

An actual conflict of interest need not be present. Also, a direct loss or disadvantage to the company need not be present / evident. Activities that creates the appearance of a conflict of interest also are automatically deemed to be covered by this policy in order not to reflect negatively on the reputation of Reliance Defence and / or its employees.

Any ‘indirect’ interest, held by an employee, in any property, proprietorship, concern, partnership, investment, arrangement, agreement or transaction that creates or can create direct or indirect personal advantage or gains can lead to a conflict of interest.

A conflict of interest can arise when an employee is involved in a transaction / arrangement with any person acting on his / her behalf or at his / her behest for the employee’s direct or indirect personal advantage or gains. Such activities, arrangements, transactions, agreements are not allowed and must be discontinued by the employees immediately, failing which the company will commence the contract termination process and disciplinary action.

2. What is the essence of this code on conflict of interest?

Any activity or personal (direct or indirect) interest of the employee, including those of the employee’s relatives, that leads to or can lead to a conflict of interest, is prohibited.

Employees are expected to provide truthful, accurate and complete information about certain facts, transactions, and relationships that may have bearing on issues related to conflicts of interests. They are expected to provide details about these facts, transactions and relationships to provide details about these facts, transactions and relationships irrespective of their assessment of whether a conflict of interest exists. Disclosure forms seeking such information will be made available to employees for submitting it in a confidential manner to the Ethics Office.

This is a key element of the plan to implement and enforce the policy on conflict of interest as it promotes self-regulation and is built on the pillars of trust and self-responsibility. Employees are expected to identify conflicts of interest that involve them and are further expected to discontinue activities that result in or can result in conflicts of interest.

3. What should employees do to avoid a conflict of interest?

Employees should steer clear of any situation, which involves or may involve a conflict between their personal interest and the interest of the company.

Employees should avoid any relationship, influence, or activity that might impair, or even appear to impair, their ability to make objective and fair decisions when performing their job.

Employees dealing with customers, suppliers, contractors, competitors or any person doing or seeking to do business with the company are to act in the best interest of the company to exclusion of considerations of direct or indirect personal preference or advantage.

Employees are obliged to place Reliance Defence’s interest in any business transactions ahead of any direct or indirect personal interest or personal gain to the individual employee or to the employee’s spouse, family member, friend or other individual.

An employee should not have an outside employment or be involved in an outside activity which is in direct / indirect conflict with the official duties of the employee. Employees are also prohibited from using their position / title / authority associated with their office or coerce or induce a benefit for themselves or others.

Any declaration by an employee which belies any of the above and therefore causes conflict of interest shall be deemed as an act of misconduct and he / she may face disciplinary action.

Certain presumptions will arise against employees acting in contravention with these requirements.

4. What actions are to be avoided by the employees at all times?

Any person to whom this policy is made applicable cannot undertake any of the following activities:

• To undertake full-time employment or significant and active managerial or decision-making role in any business enterprise other than Reliance Defence.
• Bar on setting up, operating, advising, representing, or getting involved in any manner whatsoever with business enterprise that competes with Reliance Defence in any of our businesses.
• Holding an investment interest (either directly or indirectly through any relative*) or any kind of financial involvement or acting as an officer, member, director, partner, consultant, representative, agent, advisor, broker, intermediary or employee or in any other capacity in any outside business enterprise would not be allowed if the outside interest does or proposes to do business with Reliance Defence (as a supplier, customer, consultant, advisor, agent, broker, intermediary, representative or in any other way).

(*Relatives include the following Spouse, Father, Mother, Sons, Son’s Wife, Daughters, Daughters’ Husband, Father’s father, Father’s Mother, Mother’s Father, Mother’s Mother, Son’s son, Son’s Son’s wife, Son’s Daughter, Son’s Daughter’s Husband, Daughter’s son, Daughter’s Son’s wife, Daughter’s Daughter, Daughter’s Daughter’s Husband, Brother (including step brother) Brother’s Wife, Sister (including Step-Sister) Sister’s Husband, Member’s of HUF)

• Not to participate in any activity that might lead to or give the appearance of unapproved disclosures of proprietary information or proprietary information owned by others who have entrusted such information to Reliance Defence
• Employees should not use their corporate official title or position to promote a book, seminar, or any other similar activity. All employees may accept honoraria for an appearance, speech or article, provided that the activity does not relate to the employee’s official duties.
• An employee cannot be involved or engaged in any other activity that could create the appearance of a conflict of interest and thereby impair Reliance Defence’s reputation.

5. What are the exception to the above policy?

• An employee can accept an office in a non-profit organization if he obtains prior approval from the management.
• An employee can accept an office or hold an investment in any outside entity (which is doing or proposes to do business with Reliance Defence e.g. Joint Venture) if he has obtained approval from the management and such investment / office is held on behalf of or as a nominee of the Company.

Policy on Payments and Gifting

1. What are the general principles that employees should bear in mind while making any payments, giving gifts on behalf of Reliance Defence?

Gifts, payments, business courtesies, favours and entertainment may be given to others at company expense only if they meet all of the following criteria:

• They are consistent with customary business practices;
• They are not in contravention of applicable law; and
• Public disclosure of the facts will not create the appearance of impropriety or embarrass either the company or the employee.

Permissible exceptions include: offering Reliance Defence advertising or promotional items such as a calendar, or similar item displaying the Company logo and name, and providing modest hospitality connection with business activities.

The Company will notify from time to time a list of gifts are permissible.

An employee should never use personal funds or resources to do something that cannot be done with Reliance Defence’s resources.

2. What care should be taken while making payments or giving gifts on behalf of the Company?

If any doubt exists as to the impact an offer of a business courtesy could have on the reputation of the company or of those involved, the business courtesy should not be offered.

3. What are the specific principles pertaining to gifts given to customers?

Employees may offer business courtesies to customers, provided the following four conditions are all met:

• The business courtesy does not violate any law or regulation or known policy of the customer, and
• The business courtesy is customary and consistent with the business practices of the marketplace in which it is offered.
• Approval at an appropriate level is obtained.
• The business courtesy is properly reflected on the books and records of the Company.

4. What are the specific principles pertaining to payments made or allowances given to customers?

Commissions, rebates, discounts, credits, waivers, and allowances should be paid or granted only by the company on whose books the related sale is recorded, and such payments should:

• Bear a reasonable relationship to the value of goods delivered or service rendered.
• Be by cheque or bank transfer or in kind and note to individual officers, employees or agents of such entity or a related business entity: and
• Be supported by documentation that is complete and that clearly defines the nature and purpose of the transaction.

Agreements for the company to pay commissions, rebates, credits, waivers, discounts or allowances should be in writing, when this is not feasible, the payment arrangements should be supported by an explanatory memorandum for file prepared by the approving business head.

5. What are the exceptions to the above policy?

The intent of the above policy is to avoid illegal or unethical payments, or establishing an environment where these may inadvertently be made.

However, the business world is complex and there may be unusual situations in apparent conflict with one or more provisions of the above policy. Some situations may warrant exception if they form acceptable business practice.

In all cases there must be no falsification, misrepresentation or deliberate over-billing relocated in any document involved in the transaction. This includes suppression or omission of documents or of information in documents, or deliberate misdirection of documents.

Commissioner, rebates, credits, waivers, discounts or allowances that are paid or granted by the Company in conformity with normal standard procedures are deemed to have been established in writing and need not be documented in a written agreement or memorandum for file.

Entertainment or an exchange of gifts purchased at employee expense under circumstances which make it clear that the entertainment or gift is based solely on a family relationship or personal friendship is not considered a business courtesy and is, therefore, not governed by this procedure.

However, when both a business and personal relationship exist, management should review the circumstances. In such cases, all those involved must be sensitive to and avoid any activity or situation that could create an actual or apparent conflict of interest.

6. What are the specific principles pertaining to payments made or commission paid in connection with purchases?

All the terms and conditions pertaining to payments made or commissions paid in connection with the company’s purchases of goods and services should:

• Be supported by documentation that is complete and that clearly defines the nature and purpose of the transaction;
• Be consistent with trade practices and in line with applicable laws;
• Bear a reasonable relationship to the value of goods delivered or service rendered; and
• Be by cheque or bank transfer or in kind and not to individual officers, employees or agents of such entity or a related business entity.

Policy on Receipt of Gifts

1. What are the general principles that Reliance Defence employees are expected to bear in mind before accepting any gifts or business courtesies?

All business courtesies offered to and accepted by Reliance Defence employees are courtesies that belong to Reliance Defence Employees do not have a right to keep a business courtesy for personal use.

When offered a business courtesy, employees should determine whether it is appropriate to accept the courtesy on behalf of Reliance Defence after considering why is it being extended and possible repercussions on acceptance.

Acceptance and disposal of any gift / business courtesy has to be in line with the requirements of this code.

2. What gifts or business courtesies can Reliance Defence employees accept?

An employee may keep a business courtesy

• When the courtesy is usually associated with customary business practices.
• Promotes successful working relationships and goodwill with persons or firms with whom Reliance Defence maintains or may establish a business relationship. Such courtesies include infrequent business meals and entertainment that are shared with the person who has offered to pay for the meal or entertainment. However, employees should use good judgement and decline invitation for meals and entertainment that are inappropriately lavish or excessive and are of such nature or magnitude that cannot be reciprocated.
• Conforms to the reasonable and ethical practices of the marketplace, such as flowers, fruits baskets, and other modest presents, that commemorate a special occasion.
• Does not create actual conflict of interest of divided loyalty, such as placing the interests of the person or firm that offered the courtesy above the interests of Reliance Defence, including the Company’s interest in conducting business fairly and impartially; and
• Does not create the appearance of an improper attempt to influence business decisions, such as accepting courtesies or entertainment from a supplier whose contract is expiring in the near future.
• Novelty, advertising, or promotional items of nominal value, such as calendars, pens, and mugs may generally be retained.

When local customs or practices make it inappropriate to decline the business courtesy at the time it is offered, employees should accept the courtesy and follow the guidelines for disposition.

3. What gifts or business courtesies Reliance Defence employees cannot accept?

Employees shall neither seek nor accept for themselves or others any gifts, favours, business courtesies or entertainment without a legitimate business purpose, nor seek or accept loans (other than conventional loans at market rates from lending institutions) from any person or business organization that does or seeks to do business with, or is a competitor of the company.

Employees who award contracts or who can influence the allocation of business, who create specifications that result in the placement of business, or who participate in negotiating contracts must be particularly careful to avoid actions that create the appearance of favouritism or that may adversely affect the company’s reputation.

Employees should avoid a pattern of accepting frequent courtesies from the same persons or companies.

The following actions made by employees would be completely unacceptable:

Asking for a business courtesy. Accepting a business courtesy when:

• An attempt is being made by the donor to offer the courtesy in exchange for or to influence, favourable action by Reliance Defence.
• An attempt is being made to motivate an employee to do anything that is prohibited by law, regulations, or Reliance Defence or donor policy.
• An attempt is being made to gain an unfair competitive advantage by improperly influencing an employee’s discretionary decisions.
• Using a company position as a means of obtaining business courtesies, such as personal discounts (on products, services, or other items). Employees may accept Reliance Defence approved discounts or discounts available to all Reliance Defence employees.
• Accepting offers of expense-paid trips for pleasure from persons or firms with whom Reliance Defence maintains or may establish a business relationship.
• Accepting a gift in cash or cash equivalents of any amount.

4. What is appropriate action in case of gifts that have been accepted but are inappropriate? What should a Reliance Defence employee do when the business courtesy or the gift is inappropriate or unacceptable?

If it is not appropriate to accept or retain a courtesy, the employee should either politely refuse the business courtesy at the time it is offered or follow the following guidelines for disposition.

Whenever an employee has accepted a courtesy that does not meet the criteria for acceptance in this procedure, he or she should use one of the following alternatives:

• Return it to the donor with a polite explanation that Reliance Defence policy prohibits retention of the business courtesy.
• Promptly forward the courtesy to the department dealing with community welfare and charities for appropriate disposition.
• Retain the courtesy for displaying with prior approval.
• Retain the courtesy for personal use after prior approval or after paying Reliance Defence an amount equal to the fair value of the business courtesy.

If the employee is ultimately permitted to retain such gifts, the Head of Department shall record his / her approval in writing and the employee will retain the approval on file for potential audit review.

Policy on purchases through suppliers and other service providers

1. What are the general principles of the purchase policy?

Purchase decision must be made purely on the basis of quality, service, price, delivery, best value, or other similar factors.

Extraneous or personal interest / advantage should never be the criteria for arriving at purchase decisions.

Objective, fair, transparent and responsible criteria must be used while evaluating, passing or rejecting the quality of the goods / services supplied.

If such criteria are being followed, the employees should not have any apprehension and fears about taking any procurement decisions.

Care must be taken to avoid actual / potential conflicts of interest and the appearance of partiality regarding all business transactions with suppliers and other service providers.

2. What actions should be avoided by Reliance Defence employees while dealing with suppliers other service providers?

Employees may not solicit gifts or courtesies from suppliers / other service providers. However, under certain limited circumstances employees may accept gifts or business courtesies from suppliers / other service providers. Employees may receive business courtesies from suppliers / other service providers only in accordance with Policy outlined in this code.

Business and personal activities must be kept separate. Having both a personal and business involvement with a supplier or potential supplier / other service providers may create a conflict of interest or appearance of partiality. Please refer to the Policy on Conflict of Interest given in this code.

3. What additional responsibilities are levied on Reliance Defence employees under this Code?

A supplier’s or potential supplier’s proprietary information and resources must be protected by Reliance Defence employees in accordance with Inside Information policy as outlined elsewhere in this code.

Employees are responsible for complying with supplier-imposed limitations governing use of supplier information, including such items as documents and computer software.

Reliance Defence proprietary or sensitive information must not be disclosed to a supplier or potential supplier unless disclosure is authorized and in accordance with Inside Information policy as outlined elsewhere in this code.

All company employees, contract labour, consultants, representatives, agents and others acting for the company are prohibited from the following actions:

• Soliciting, accepting, or attempting to accept any kickback.
• Including, directly or indirectly, the amount of any kickback in the price charged under a contract, either as prime contractor or sub-contractor.

The term ‘kickback’ includes any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind whether in cash or kind that is provided directly or indirectly to anyone for the purpose of inappropriately or improperly obtaining or rewarding favourable treatment.

It should be noted that any action that even appears to be in violation of the above principles would be severely dealt with.

4. What are the responsibilities that are levied on the suppliers / other service providers as per this policy?

Suppliers / other service providers are required to ensure that their actions in no way contravene any provisions of Reliance Defence’s Business Ethics Policies.

They must take special care in respect of the specific requirements of the policy on conflict of interest, payments and gifts and receipt of gifts. These specific requirements will be incorporated as additional terms of all existing and new contracts with all suppliers and vendors.

The overearching principle that the supplier ought to keep in mind is that their actions should not result in any direct or indirect personal advantage or gains for any Reliance Defence employee or his / her relatives. It is not relevant for the purposes of this policy whether such actions were performed at the behest of the Reliance Defence employee or were suo-moto actions on the part of the supplier.

Any supplier or vendor found to be violating any of these requirements will subject himself to the possibility of termination of his contract and the payment of liquidated damages.

Policy regarding full-time consultants, agents, and representatives and others

5. What are the general principles regarding consultants, agents, and representatives?

We are committed to maintaining the integrity of our full time consultants, advisors, agents, intermediaries, contractors, brokers, and representatives.

Business integrity is a key criteria for the selection and retention of those who represent Reliance Defence.

Appointment of consultants, advisors, agents, intermediaries, brokers, and representatives must not result in the creation of a conflict of interest. For example, when a relative of an employee acts as a consultant, advisor, agent, intermediary, broker and representative of Reliance Defence, a conflict of interest may arise. Such instances should be discontinued.

In this context, reference should be made to the company policy on Conflicts of Interest.

Individuals should never be appointed as consultants, advisors, agents, intermediaries, brokers, or representatives with a view to circumvent Reliance Defence’s ethics and values.Full-time agents, representatives, or consultants who expressly represent or propose to represent Reliance Defence must certify their willingness to comply with the Company’s policies and procedures.

Policy on Political contributions

What are the general principles regarding political contributions?

Employees shall not make any contribution of company funds to any political party or committee, domestic or foreign, or to any candidate for or holder of any office of any government – National, State, local or foreign unless it is legally permissible and is appropriately authorized.

Reliance Defence employees should not make illegal political contributions, either directly or indirectly, through the use of expense accounts or through payments to third parties or on their own account.

Whistle Blower Policy (Vigil Mechanism)

1. Preface

The Company believes in the conduct of its affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour.

The Company is committed to developing a culture where it is safe for all employees to raise concerns about any poor or unacceptable practice and any event of misconduct.

Section 177 (9) of Companies Act 2013 read with Rule 7 of The Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirments) Regulations, 2015, inter-alia, provides, a mandatory requirement, for all listed companies to establish a mechanism called “Vigil Mechanism (Whistle Blower Policy)” for directors and employees

2. Objective

a) This policy is formulated to provide a mechanism for directors and employees to report their genuine concerns and grievances to the Audit Committee of the Company

b) This policy provides for adequate safeguards against victimization of employees and directors who avail of the vigil mechanism

3. Applicability

This policy applies to directors and permanent employees of the Company.

4. Definitions

a) “Audit Committee” means the Audit Committee constituted by the Board of Directors of the Company in accordance with Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirments) Regulations, 2015and the Securities Exchange Act, 1934, as may be applicable.

b) “Employee” means every employee of the Company (whether working in India or abroad), including the directors in the employment of the Company.

c) “Disclosures” means any communication made in good faith that discloses or demonstrates information that may evidence unethical or improper activity.

d) “Subject” means a person against or in relation to whom a Disclosure has been made or evidence gathered during the course of an investigation.

e) “Whistle blower” means an employee or director making a Disclosure Under this Policy.

f) “Company” means Reliance Defence and Offshore Engineering Company Limited (formerly known as Pipavav Defence and Offshore Engineering Company Limited)

5. Scope of Policy

The policy intends to cover following information on suspected unethical and improper practices or wrongful conduct, which employee in good faith believes to exist:

a. Abuse of authority
b. Breach of contract
c. Negligence causing substantial and specific danger to public health and safety
d. Manipulation of company data/records
e. Financial irregularities, including fraud, or suspected fraud
f. Criminal offence including bribes
g. Leaking of confidential/propriety information
h. Deliberate violation of law/regulation
i. Wastage/misappropriation of company funds/assets
j. Breach of employee Code of Conduct
k. Any other unethical, biased, favoured, imprudent event

The above list is only illustrative and should not be considered as exhaustive.

6. Procedures

a. The Audit Committee will be responsible for receiving all communications under this policy

b. Any director or employee who observes any unethical and improper practices or alleged wrongful conduct by the subject shall make a disclosure to the Audit Committee in writing as soon as possible but not later than 60 consecutive calendar days after becoming aware of the same and shall furnish as much detail and evidence as possible.

c. The Audit Committee shall appropriately and expeditiously investigate all reports received.

d. The Audit Committee shall have right to call for any information / document and examination of any director or employee of the Company or other person(s) as they may deem appropriate for the purpose of conducting investigation under this policy.

e. The Audit Committee may order for remedies which may inter alia include:

i. Revision of the policies and procedures of the Company to reduce the risk of re-occurrence

ii. Suggest modification to any action taken against concerned persons

7. Protection

a. No discrimination, harassment, victimization or any other unfair employment practice like retaliation, threat or intimidation by termination /suspension of service, disciplinary action, transfer, demotion, refusal of promotion, or the like will be adopted against Whistle Blowers.

b. A Whistle Blower may report any violation of the above clause to the Audit Committee.

c. Direct access to the Audit Committee Chairman, in exceptional circumstances, can be given to the whistle blower.

d. The Audit Committee may recommend suitable action to the management which may inter alia include

i. Reinstatement of the employee to the same position or to an equivalent position

ii. Order for compensation for lost wages, remuneration or any other benefits, etc.

8. Confidentiality

The Company will treat all such disclosures in a sensitive manner and will keep the identity of the whistle blower confidential. However, the investigation process may inevitably reveal the source of the information and the individual making the disclosure may need to provide a statement which cannot be kept confidential if legal proceedings arise.

9. Untrue / Malicious / Vexatious Allegations

If an individual makes an allegation, which is not confirmed by subsequent investigation and the investigation shows that an individual has made malicious or vexatious allegations for personal leverage or if an individual makes repeated frivolous complaints, disciplinary action may be taken against the individuals concerned.

10. Anonymous complaints

In order to discourage frivolous and baseless allegations and misuse of this policy, the Audit Committee will not take cognizance of anonymous disclosures. However, the contents of the anonymous letters may be taken note of by the members of the Committee, if the allegations are substantiated by facts and after due deliberations, the Committee members may decide whether to examine the issues raised by the anonymous complainants.

11. Notification

All departmental heads are required to notify and communicate the existence and contents of this policy to the employees of their department. New employees shall be informed about the policy by the HR department and statement in this regard should be periodically submitted to the Compliance Officer of the Company i.e. the Company Secretary for placing before the Audit Committee.

12. Communication

All communication under this policy is to be made to the Secretary, Audit Committee whose details are as below:

Contact Details
Secretary, Audit Committee	rdel.investors@relianceada.com
Reliance Defence and Engineering Company Limited
Company Secretariat,
H Block, 1st floor,
Dhirubhai Ambani Knowledge City,
Navi Mumbai 400 710

Policy on Prevention of sexual harassment

1. Objective

1.1 to promote a productive work environment;>

1.2 not to tolerate verbal or physical conduct of a sexual nature by any employee that harasses, disrupts, or interferes with another’s work performance or that creates an intimidating, offensive, or hostile environment.

Harassment that is unchecked has the potential to hurt the employer’s operations through decreased productivity and increased employee turnover.

2. Scope

This policy is applicable to all allegations made against an employee, irrespective of whether sexual harassment is alleged to have taken place within or outside Company premises.

3. What constitutes Sexual Harassment?

3.1 Sexual harassment can be defined as unwelcome sexual advances, requests for sexual favours, and other verbal and physical conduct of a sexual nature by any person(s) when:

a. submission to that conduct is made either explicitly or implicitly a term or condition of an individual’s employment;
b. submission to or rejection of that conduct by an individual is used as the basis of employment decisions affecting the individual or denying equal opportunity in pursuit of career development; or
c. the conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.

3.2 This conduct includes:

a) Unwanted physical contact or conduct of any kind, including sexual flirtations, touching, molestation, advances, or propositions;
b) Verbal harassment of a sexual nature, such as lewd comments, sexual jokes or references, and offensive personal references;
c) Demeaning, insulting, intimidating, or sexually suggestive comments (oral or written) about an individual’s personal appearance or electronically transmitted messages;
d) The display in the workplace of demeaning, insulting, intimidating, pornographic or other offensive or derogatory or sexually suggestive objects, pictures, photographs;.
3.3 Based on these criteria, sexual harassment typically is categorized into two types:

a. "Quid Pro Quo (this for that) Harassment": Sexual harassment by managers and supervisors generally is considered "quid pro quo" harassment when it involves the solicitation of sexual favours in exchange for some type of employment decision. To prove quid pro quo harassment, a complaining employee must show that he/she was subject to an unwelcome request for sexual favours by a supervisory employee and that his/her acquiescence to, or rejection of, the request was used as the basis for decisions affecting his/her compensation, terms, conditions, or other privileges of employment. Preferential Treatment also may constitute quid pro quo harassment.

b. "Hostile Work Environment Harassment": Harassment by nonsupervisory employees generally falls into the category of "hostile environment" sexual harassment rather than "quid pro quo" harassment. Typically, there is no direct link between the offensive conduct and a tangible job benefit or detriment in hostile environment cases. An employer is responsible for hostile environment harassment by nonsupervisory employees only if the employer knew or should have known of the harassment and failed to take immediate and appropriate remedial action.

3.4 Sexually harassing or offensive conduct in the workplace, whether committed by supervisors, managers, nonsupervisory employees, or non-employees, is prohibited.

3.5 Any of the above conduct, or other offensive conduct, directed at individuals because of their race, caste, creed, religion, physical disability, family background, pregnancy or age is also prohibited.

4. Responsibility of the Employee

Any employee who believes that a supervisor’s, manager’s or other employee’s actions or words constitute unwelcome harassment has a responsibility to report or complain about the situation as soon as possible. The report or complaint should be made to the department head or Personnel Manager.

5. Compliant Procedure

5.1 The report or complaint should be made to the employee’s supervisor or to the department head or Personnel Manager if the complaint involves the supervisor or manager.
5.2 Complaints of harassment will be handled and investigated under the Company’s grievance policy, unless special procedures are considered appropriate.
5.3 All complaints of harassment will be investigated promptly as per the Investigation Procedure and in as impartial and confidential a manner as possible.
5.4 Employees are required to cooperate in any investigation.
5.5 Each complaint should be resolved within a period of 2 months from the complaint and communicated to the parties involved.
5.6 Any employee utilizing the compliant procedure will be treated courteously.
5.7 A person knowingly making a false claim shall also be subject to disciplinary action.

6. Investigation Procedure

6.1 A timely investigation of allegations of sexual harassment is important. A complaining employee or unjustly accused individual also may suffer increasing emotional distress the longer any resolution is delayed.

6.2 The investigator

The supervisor or other person receiving the complaint should refer the complaint to the personnel department without delay. The personnel department should choose an investigator. Typically, the investigator should be a human resources professional who is specially trained to conduct sexual harassment investigations. The investigator should be sensitive to the emotional nature of this type of investigation. He/She should also understand what constitutes sexual harassment under both the employer’s policy and the law in order to evaluate the complaint properly. Apart from business relationship, investigators should not have any involvement with the complainant or the alleged harasser.

6.3 The investigation process

The process should provide a fair method for both sides to be heard and to receive information. The employer and its investigator should not prejudge the alleged harasser’s guilt. Witnesses should be interviewed as soon as possible. All responses should be documented and, if possible, statements should be written and signed by the person providing the information. In addition, all participants in the investigation should be reminded that their cooperation and confidentiality are required.

6.4 Interviewing the involved parties

The investigator should be prepared to deal with the complaining employee’s embarrassment and anger by patiently, but firmly, explaining that details are needed for an accurate investigation.

a. The complaining party should be interviewed first, to ensure that all important details and witnesses are identified promptly.
b. It is important for interviewers to be objective and nonjudgmental and allow the alleged harasser to respond to each allegation. The investigator also should inform him of the type of disciplinary action that may be taken if the allegations are found to be true.
c. Both parties should be told to avoid contact with one another, and ways to minimize contact should be implemented.
d. The complaining employee should be encouraged to report any further incidents of harassment or retaliation.
e. Witnesses should be told as little as possible about the details of the complaint in order to reduce the employer’s exposure to later claims of defamation.
f. The investigator should recognize that there might be no eyewitnesses. Thus, the employer may have to resolve a sexual harassment claim based on the credibility of the parties.

7. Training for Supervisors and Employees

7.1 To be effective, a policy against sexual and other harassment must be implemented carefully and should include training for all personnel. The training should identify the types of behaviours that are offensive or prohibited and educate all employees to respond appropriately to harassing situations.

7.2 Training for all employees should include:

a. a statement that the employer condemns harassment of any kind, even if it is not explicitly prohibited by the employer’s policy or by law;
b. the definition of harassment, with particular attention paid to the legal definitions of sexual harassment;
c. a description of prohibited conduct, as is provided in the Policy;
d. the consequences of violating the policy against harassment, and the types of behaviour that may lead to immediate termination;
e. the grievance procedure for handling complaints; and
f. encouragement to report harassment and reassurance that there will not be any retaliation for complaints or reports of harassment.

7.3 In addition to training, all employees should receive a copy of the written policy and any further revisions. Employers also should provide training for all new hires and for those employees who are new to management positions.

8. Training for supervisory personnel

8.1 Supervisors and managers play a key role in preventing and eliminating harassment since they are in a position to identify potentially harassing behaviour.

8.2 Training for supervisory personnel should include:

a. an awareness of harassment;
b. methods of prevention of harassing behaviour and
c. appropriate responses when an employee complains of harassment.

8.3 However, supervisors and managers can cause severe problems if they engage in any form of harassment themselves. If proved guilty, they will be subject to strict disciplinary action, up to and including termination.

9. Consequences of Violation of the Policy

Any employee, supervisor, or manager who is found to have violated the harassment policy will be subject to appropriate disciplinary action, up to and including termination. The Company prohibits any form of retaliation against employees for bringing bona fide complaints or providing information about harassment. However, if an investigation of a complaint shows that the complaint or information was false, the individual who provided the false information will be subject to disciplinary action, up to and including termination.

The Board of Directors (the “Board”), Key Managerial Personnel and the senior management of Reliance Naval and Engineering Limited (“Company”) subscribe to the following Code of Conduct adopted by the Board. They would

1. act objectively and constructively in performing their duties of office and use due care and diligence in exercising their powers attached to that office;

2. act honestly and use their powers of office, in good faith and in the best interests of the company as a whole and uphold ethical standards of integrity and probity;

3. not make improper use of information nor take improper advantage of their position as a Director or as KMP /senior Management or ;

4. not allow personal interests to conflict with the interests of the Company

5. recognise that their primary responsibility is to the company’s shareholders as a whole but they should (where appropriate) have regard for the interests of all stakeholders.

6. not engage in conduct likely to bring discredit upon the Company

7. be independent in judgment and actions, and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board of Directors;

8. ensure the confidentiality of information they receive whilst being in office of Director and is only disclosed if authorised by the company, or the person from whom the information is provided, or as required by law;

9. devote sufficient time and attention to their professional obligations for informed and balanced decision making and assist the company in implementing the best corporate governance practices; and

10. The Independent Directors shall refrain from any action that would lead to loss of their independence and where circumstances arise which make them lose their independence, they need to forthwith inform the Board accordingly;

11. To comply with the duties of directors pursuant to Section 149, Schedule IV of the Companies Act, 2013 as per annexure.

Note: Adopted by the Board of Directors of Reliance Naval and Engineering Limited at its meeting held on January 18, 2016

ANNEXURE

The independent directors shall—

1. undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the company;

2. seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts at the expense of the company;

3. strive to attend all meetings of the Board of Directors and of the Board committees of which he is a member;

4. participate constructively and actively in the committees of the Board in which they are chairpersons or members;

5. strive to attend the general meetings of the company;

6. where they have concerns about the running of the company or a proposed action, ensure that these are addressed by the Board and, to the extent that they are not resolved, insist that their concerns are recorded in the minutes of the Board meeting;

7. keep themselves well informed about the company and the external environment in which it operates;

8. not to unfairly obstruct the functioning of an otherwise proper Board or committee of the Board;

9. pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the company;

10. ascertain and ensure that the company has an adequate and functional vigil mechanism and to ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use;

11. report concerns about unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct or ethics policy;

12. acting within his authority, assist in protecting the legitimate interests of the company, shareholders and its employees;

13. not disclose confidential information, including commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law.

Adopted by the Board of Directors in its meeting dated January 18, 2016

1. Introduction

1.1 Reliance Naval and Engineering Limited (“Reliance Defence”) is a constituent of the Reliance Group, one of the leading business houses of India.

1.2 Reliance Defence is focused on building vessels for the Indian navy and Indian Coast guard. In addition, Reliance Defence utilizes its facilities to repair and refurbish a wide range of as naval, coast guard vessels. Reliance Defence is also catering to offshore oil and gas exploration and production activities by providing offshore fabrication facilities at itsr offshore yard. Reliance Defence has capabilities to built specialised vessels such as LNG Carriers which are used in Offshore Oil &Gas Exploration and Production industry.

1.3 Reliance Defence’s constant endeavour has been to provide an enhanced customer experience and achieve customer satisfaction by upscaling the productivity of the enterprises and individuals we serve. We as a corporate entity envisage to nourish and sustain the ecosystems in which we operate by aiming for growth through sustainable development.

1.4 Reliance Defence undertakes appropriate Corporate Social Responsibility (CSR) measures having direct, measurable and positive economic, social, and environmental impact on the community with particular emphasis on the local area and areas around where it operates.

2. CSR Policy

2.1 Group Mission: The CSR mission of Reliance Defence derives its essence from the Group CSR corporate mission which aims “to be a socially responsible corporate entity with a thrust in the area of community development, environment and health and safety through sustained business conduct.”

2.2 Guiding Principles: Reliance Defence in its continuous efforts to positively impact the society, especially the areas around its sites and offices, has formulated policies for social development that are based on the following guiding principles:

a. Honour the spirit of law and be a responsible corporate citizen.
b. Pursue growth through harmony with the community via innovative management techniques. c. Adopt an approach that aims at achieving a greater balance between social development and economic development.
d. Nurture silvers and groom the youth of the country in response to various global and local concerns
e. Respect culture and customs of every project / plant location.
f. Work towards elimination of all barriers for the social inclusion of disadvantaged groups - such as the poor, socially backward, differently abled and others.
g. Develop practices aimed at inclusive growth.
h. Thrust on environment protection.

2.3 Applicability: This CSR Policy is applicable to Reliance Defence and all its subsidiaries, which are mandated with the CSR expenditure obligations as per Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time.

2.4 Focus Areas: Reliance Defence CSR areas target inclusive growth of all stakeholders under nine categories especially around its business operations and offices. .

a. Promoting education;
b. Enhancing employability with a focus on workforce development;
c. Economic empowerment including women empowerment and for differently-abled;
d. Promoting livelihood opportunities for communities in the farm and non-farm sectors;
e. Environmental sustainability and conservation of natural resources;
f. Undertaking endeavours to maintain quality of soil, air and water;
g. Healthcare and sanitation;
h. Creating platform for promotion of sports;
i. Rural development projects;
j. Others mandated under schedule VII to the Companies Act, 2013.

3. Governance Structure

3.1 A three-tier governance structure is responsible for implementing CSR activities at Reliance Defence and its subsidiaries. These include the CSR Committee of the Board, Corporate CSR Team, and Operational CSR Teams located at respective project/plant site.

3.2 Roles and Responsibilities

3.2.1 CSR Committee shall consist of three or more directors of which at least one shall be an independent director. CSR committee shall have the following responsibilities:

a. Formulation of CSR Policy.
b. Regular monitoring of implementation of CSR policy.
c. Identify key initiatives pursuant to the CSR policy.
d. Recommend the CSR expenditure to be incurred to the Board.
e. Recommend modifications to the CSR policy as and when required to the Board.
f. Ensure that the proceeds generated, if any, out of the CSR activities of the Company are used for furthering the objectives under the CSR focus areas.

3.2.2 Dedicated CSR team shall be constituted at Corporate Office for implementing the CSR Policy. Corporate CSR Team, located at Mumbai, shall have the following responsibilities:

a. Implementation of CSR Policy.
b. Identify Key Result Areas (KRAs) and Key Performance Indicators (KPIs) to be tracked at corporate level and operational (plant/project location) level.
c. Develop Annual Operating Plan (AOP) and targets against each of the identified KPIs at corporate and operational level (to be developed on a bottom-up basis).
d. Secure necessary approvals for CSR AOP
e. Facilitating allocation of funds to the operations team.
f. Monitoring of CSR projects on a quarterly basis to establish effectiveness of CSR efforts and report the same to the CSR Committee.
g. Compilation of information and preparation of annual reports on CSR activities and presenting the same to the CSR Committee.
h. Organize training programmes for the CSR staff.
i. Any other activity necessary to ensure implementation of Reliance Defence’s CSR Policy

3.2.3 Operational CSR Team located at respective plant / project locations shall have the following responsibilities

a. Provide inputs for the CSR Policy design.
b. Bottom-up preparation of CSR AOPs and identification of annual targets against KPIs.
c. Implementation of CSR Action Plans.
d. Conduct Needs Assessment Survey.
e. Own the CSR Programmes implemented and monitor effectiveness of CSR initiative delivery.
f. Monthly reporting on progress of CSR interventions.
g. Any other activity necessary to ensure achievement of Reliance Defence’s CSR Policy

3.2.4 To maintain continuity of community related interventions / programmes initiated during the project development stage, team members engaged in such activities would be drawn in as CSR team members at the project execution / operation stage, wherever possible and augmented if necessary.

3.2.5 Depending on interventions / programmes, external experts shall be engaged on a contract basis for development of baseline data, planning, implementation, monitoring effectiveness of CSR initiatives, etc.

3.2.6 Voluntary participation by employees of Reliance Defence, who are not members of either CSR Corporate Team or CSR Operational Teams at project /plant sites, and family members of such employees, shall be encouraged in the implementation of CSR activities.

1. Introduction

This Policy had been framed by the Company pursuant to Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), which was effective from December 1, 2015. This Policy has been modified to comply with the requirements of amendments to Listing Regulations. The revised Policy has been adopted by the Board of Directors at their meeting held on February 04, 2019. The Policy shall apply to transactions entered into with a Related Party on or after April 1, 2019.

2. Definitions

(a) “Act” means the Companies Act, 2013 including any statutory modification(s) or re-enactment(s) thereof;
(b) “Board” means the Board of Directors of the Company;
(c) “Related Party” with reference to the Company, means an entity where:
(i) Such entity is a related party as defined under Section 2(76) of the Act; or
(ii) Such entity is a related party as defined under Regulation 2(zb) of the Listing Regulations
(d) “Related Party Transaction” means a transaction between the Company and a Related Party which transaction is of the nature specified in sub-clauses (a) to (g) of Section 188(1) of the Act or is a related party transaction as defined under Regulation 2(zc) read with Regulation 23 of the Listing Regulations.

3. Transactions between Company & Related Parties & Materiality Threshold

Transactions between the Company and Related Parties shall be entered into in the manner that is compliant with the applicable provisions of the Act and Regulation 23 of the Listing Regulations, as amended, from time to time.

A transaction with the Related Party shall be treated as “material” if the transaction(s) to be entered into individually or taken together with previous transaction(s) during a financial year with such Related Party exceed 10% of the annual consolidated turnover of the Company as per the last audited financial statement of the Company.

Notwithstanding the above, a transaction involving payments made to a Related Party with respect to brand usage or royalty shall be considered material, if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceed 2% of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity.

4. Process for dealing with Related Party Transactions

a. All related party transaction(s) / Agreement(s) shall required prior approval of Audit Committee or the Board or the shareholders of the Company, as the case may be, as required under and subject to the Act and the Listing Regulations or any other applicable law.

b. All Related Party transaction(s) / Agreement(s) shall be tested / justified for determination of whether the transaction(s) is in the ordinary course of business and on an arm’s length basis including the applicable transfer pricing requirements or other globally accepted practices, duly certified by an independent chartered Accountant or any external agency of repute.

5. Amendment

The Board reserves its right to amend or modify this Policy in whole or in part, at any time without assigning any reason whatsoever. However, no such amendment or modification shall be inconsistent with the applicable provisions of the Act or Listing Regulations or any applicable law for the time being in force.

6. Review

This policy shall be reviewed by the Board as per applicable provisions of the Act or Listing Regulations or any other Law.

Reliance Naval and Engineering Limited (formerly known as Reliance Defence and Engineering Limited) Independent DirectorsTerms and Conditions of Appointment

The Terms and Conditions of appointment of Independent Directors are as under:

1. Independence

The appointment as an Independent Director is in due consideration of declaration of being qualified as ‘Independent’ and appointment is subject to continued status as “Independent” as per the requirement of the Companies Act, 2013 and revised clause 49 of the equity listing agreement with the stock exchange, from time to time.

2.Appointment Appointment is for an initial term of five years, unless otherwise terminated earlier by and at the discretion of either party. Independent Directors are typically expected to serve two five year terms.

 

Appointment may also be terminated in accordance with the provisions of the Articles of Association of the Company from time to time in force.

 

3. Roles and Responsibilities

Independent Directors have the same general legal responsibilities to the company as any other Director.

Independent Director of the Company, are required:
to act in accordance with the Company’s Articles of Association.
to discharge duties with due and reasonable care, skill and diligence.
not to achieve or attempt to achieve any undue gain or advantage either to himself or to any related person/ party.
to act in good faith in order to promote the objects of the Company for the benefit of its members as a whole, and in the best interest of the Company.
not to involve in a situation conflicting with the interest of the Company and to put the interests of Company above others.

In addition to the above requirements applicable to all Directors, role of the Independent Directors shall also include duties as prescribed in Schedule IV of Companies Act, 2013.

4.Directors’ Remuneration

Directors of the Company are entitled to sitting fees of INR 40,000 for attending each meeting of th e Board and Committee thereof and such commission on Net profits as may be recommended by the Nomination and Remuneration Committee of the Board and approved by the Board of Directors of the Company. The Company shall also reimburse all reasonable and properly documented expenses that are incurred by a director in performing the duties for the Company.

5.Confidentiality

During their tenure Independent Directors of the Company are privy to information that is confidential to the Company. All such information acquired during tenure should not be released to third parties without prior clearance from the Chairperson.

6. Evaluation Process

As a member of the Board, performance as well as the performance of the entire Board and its Committees shall be evaluated annually. Evaluation of each Director shall be done by all the other Directors. The criteria for evaluation shall be determined by the Nomination and Remuneration Committee of the Board and disclosed in the Company’s Annual Report. However, the actual evaluation process shall remain confidential and shall be a constructive mechanism to improve the effectiveness of the Board / Committee. If, in the interim, there are any matters which cause concern directors can discuss them with the Chairperson as soon as is appropriate.

7.Insurance

Directors and Officers Liability Insurance is provided by the Company, subject to the terms of the policy from time to time in force (which may be subject to change).

8.Governing Law

This appointment is governed by and will be interpreted in accordance with Indian law and your engagement shall be subject to the jurisdiction of the Indian courts at Mumbai.

Reliance Naval and Engineering Limited

(formerly known as Reliance Defence and Engineering Limited)

Policy for Determination and Disclosure of Materiality of Events and Information

BACKGROUND

Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, has become applicable from December 1, 2015. The said Regulation, inter alia, provides that every listed company shall make disclosures of any events or information which, in the opinion of the Board is material. It is also incumbent upon the company to frame a policy for determination of materiality which should be duly approved by the Board and disclosed on the Company’s web site.

The Board of Directors of the Company have formulated this policy for disclosure of events or information pursuant to the requirements of Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing Regulations’).

1. Disclosure of Events and Information on basis of applying materiality to Stock Exchanges:

The information covered by this Policy shall include “information relating to the Company’s business, operations or performance which has significant effect on securities investment decision” that the Company is required to disclose in a timely and appropriate manner by applying the criteria for assessing materiality as mentioned in Clause 2.
The events and information that is to be disclosed based on the principle of materiality are specified in the Annexure I.

2.Criteria for determination of materiality of events / information:

The criteria laid down in Regulation 30(4)(i) of the above Regulations shall be applied for determination of materiality of the event or information. The criteria are reproduced as under:-

a) The omission of an event or information, which is likely to result in discontinuity or alteration of event or information already available publicly; orr
b) The omission of an event or information is likely to result in significant market reaction if the said omission came to light at a later date;
c) In case the criteria specified in sub-clauses (a) and (b) are not applicable, an event information may be treated as being material if in the opinion of the Board of Directors of the Company, the event / information is considered material.
Further, the following materiality criteria shall be adopted in the case of the Company and its Subsidiaries with respect to transactions which are considered to be material to the Company for the purpose of reporting to the Stock Exchange(s).
The Event/ information will be considered material based on above criteria; where the value involved or the impact:

a) exceeds 10% (ten per cent) of the Company’s consolidated gross income, or
b) exceeds 10% (ten per cent) of the Company’s consolidated net worth; whichever is higher.

3. Persons Responsible for Making Disclosure of Material Events and Information to Stock Exchanges:

Any transaction, event or information relating to the Company and/or its Subsidiaries that might be material is required to be reported immediately by the employees of the Company and/or its Subsidiaries to Key Managerial Personnel (CEO / CFO / Company Secretary) of the Company. The Key Managerial Personnel will ensure that adequate disclosures with respect to such material events/information are made to the stock exchanges within the timeline prescribed under the Listing Regulations.

4. Amendments/Modifications:

In case of any subsequent changes in the provisions of the Companies Act, 2013 or the Listing Regulations or any other applicable law which makes any of the provisions in this Policy inconsistent with the Companies Act, 2013 or the Listing Regulations or such applicable law, then the provisions of the Companies Act, 2013 or the Listing Regulations or such applicable law would prevail over the Policy and the provisions in this Policy would be modified in due course to make it consistent with such change.

 

Annexure I
Events or Information that are to disclosed based on the materiality guidelines stated in the Policy

1. Commencement or any postponement in the date of commencement of commercial production or commercial operations of any unit/division.

2. Change in the general character or nature of business brought about by arrangements for strategic, technical, manufacturing, or marketing tie-up, adoption of new lines of business or closure of operations of any unit/division (entirety or piecemeal).

3. Capacity addition or product launch.

4. Awarding, bagging/ receiving, amendment or termination of awarded/bagged orders/contracts not in the normal course of business.

5. Agreements (viz. loan agreement(s) (as a borrower) or any other agreement(s) which are binding and not in normal course of business) and revision(s) or amendment(s) or termination(s) thereof.

6. Disruption of operations of any one or more units or division of the listed entity due to natural calamity (earthquake, flood, fire etc.), force majeure or events such as strikes, lockouts etc.

7. Effect(s) arising out of change in the regulatory framework applicable to the listed entity.

8. Litigation(s) / dispute(s) / regulatory action(s) with impact.

9. Fraud/defaults etc. by directors (other than key managerial personnel) or employees of listed entity.

10. Options to purchase securities including any ESOP/ESPS Scheme.

11. Giving of guarantees or indemnity or becoming a surety for any third party.

12. Granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals.

Any other information/event viz. major development that is likely to affect business, e.g. emergence of new technologies, expiry of patents, any change of accounting policy that may have a significant impact on the accounts, etc. and brief details thereof and any other information which is exclusively known to the listed entity which may be necessary to enable the holders of securities of the listed entity to appraise its position and to avoid the establishment of a false market in such securities.

Without prejudice to the above the Company may make disclosure of events and information as may be decided by the Board from time to time.

Introduction

In accordance with the Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (hereinafter “Listing Regulations”), the Company has revised this policy for determining ‘material’ subsidiary of the Company.

1. Material Subsidiary:

A subsidiary shall be considered as 'material subsidiary' whose income or net-worth exceeds ten percent (10%) of the consolidated income or net-worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year.

2. Amendment(s) / Modification(s):

In case of any subsequent changes in the provisions of the Companies Act, 2013 (the Act) or the Listing Regulations or any other applicable law which makes any of the provisions in this Policy inconsistent with the Act or the Listing Regulations or such applicable law, the provisions of the Act or the Listing Regulations or such applicable law would prevail over the Policy and the provisions in this Policy would be modified in due course to make it consistent with such changes.

3. Date of applicability of policy:

The revised policy has been approved by the Board of Directors at its Meeting held on February 4, 2019, which shall be effective from April 1, 2019 and the same shall also be hosted on the Company’s website.

Audit Committee
Name of the Member	Category	Designation
Mr. Pankaj Pandya	Independent	Chairperson of the Committee
Mr. Ranjit Lahiry	Independent	Member
Mr. Debashis Bir	Non-Independent	Member

Nomination & Remuneration Committee
Name of the Member	Category	Designation
Mr. Ranjit Lahiry	Independent	Chairperson of the Committee
Mr. Pankaj Pandya	Independent	Member
Ms. Shiby Jobby	Non-Independent	Member

Stakeholders Relationship Committee
Name of the Member	Category	Designation
Mr. Pankaj Pandya	Independent	Chairperson of the Committee
Mr. Debashis Bir	Non-Independent	Member
Ms. Shiby Jobby	Non-Independent	Member

Risk Management Committee
Name of the Member	Category	Designation
Mr. Ranjit Lahiry	Independent	Chairperson of the Committee
Mr. Debashis Bir	Non-Independent	Member
Mr. Venkata Rachakonda	Non-Independent	Member
Mr. Madan Pendse	Chief Financial Officer	Member

Corporate Social Responsibility Committee ('CSR')
Name of the Member	Category	Designation
Mr. Pankaj Pandya	Independent	Chairperson of the Committee
Mr. Debashis Bir	Non-Independent	Member
Mr. Venkata Rachakonda	Non-Independent	Member

Securities Allotment and Transfer Committee
Name of the Member	Category	Designation
Mr. Debashis Bir	Non-Independent	Chairperson
Mr. Pankaj Pandya	Independent	Member
Mr. Venkata Rachakonda	Non-Independent	Member

Resolution Plan Committee
Name of the Member	Category	Designation
Mr. Debashis Bir	Non-Independent	Member
Mr. Pankaj Pandya	Independent	Member
Mr. Venkata Rachakonda	Non-Independent	Member
Ms. Shiby Jobby	Non-Independent	Member

Reliance Naval and Engineering Limited (formerly known as Reliance Defence and Engineering Limited)

1. Objective

1.1 The remuneration policy aims at achieving the following specific objectives:

1.1.1 To attract highly competent talent to sustain and grow the Company’s business;
1.1.2 To build a high performance culture by aligning individual performance with business objectives and infusing performance differentiation;
1.1.3 To motivate and retain high performers and critical talent at all levels

2. Scope and Coverage

2.1 Remuneration policy covers Directors, Key Managerial Persons (KMPs) and on-roll employees of Reliance Naval and Engineering Limited and its Subsidiaries/Special Purpose Vehicles (SPVs), who are categorized into Top Management Cadre (TMC) and Senior Management Cadre (SMC).

3. Policy 3.1 Non-Executive Directors

The Non executive directors may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members, and commission within regulatory limits approved by the shareholders. The commission for respective financial year to be recommended by the Nomination and Remuneration Committee and approved by the Board.

3.2 Key Managerial Personnel and Senior Management

3.2.1 Remuneration i.e. Cost-to-Company (CTC) may consist of two broad components; Fixed and Variable.
3.2.2 Fixed portion comprises Base pay and Choice pay components.
3.2.3 Base Pay includes Basic Pay and Contribution towards Retiral Benefits.
3.2.4 Choice Pay includes basket of allowances, which executive has the flexibility to choose from based on his individual needs and tax planning.
3.2.5 Variable pay termed as Performance Linked Incentive (PLI) comprises a pre- determined amount, the payout of which is based on the composite score achieved by Individual and Business during the relevant performance year.
3.2.6 Annual Increment is linked to individual performance ratings and is also guided by business performance, Macro-economic indicators, Industry/business outlook, etc.
3.2.7 Individual and Business performance is assessed through a robust annual performance appraisal process, the key features of which are as follows:

• Formulation of well articulated Businesswise AOP
• Setting of Individual KRAs and KPIs in alignment with Business AOP
• Online process for goal setting, self evaluation and assessment by managers
• Normalisation of individual ratings as per prescribed norms
• Business Performance evaluation with higher emphasis on achievement against key financial and project completion parameters

4. Retention Features as part of Compensation Package

4.1 Based on the organizational need for retaining high performing/critical executives, certain retention features may be rolled out from time to time as part of the overall compensation package. These may take form of Retention Bonuses (RBs); Special Monetary Programs (SMPs), Long-term Incentives (LTIs), etc.

4.2 While attracting talent in critical positions also such retention features could be incorporated as part of the compensation package.

5. Modification/Amendment

5.1 This policy shall be reviewed periodically based on benchmarking/business requirement/industry relevance.