In terms of Clause 49 of Listing Agreement, all listed companies should have a code of conduct & ethics for their senior executives.

1. INTRODUCTION

   This Code of Ethics for all VP level and Senior Officers (the "Code") helps maintain the standards of business conduct for Magma Shrachi Finance Limited (the "Company"), and ensures compliance with legal requirements. The purpose of the Code is to deter wrong doing and promote ethical conduct. The matters covered in this Code are of the utmost importance to the Company, its shareholders and our business partners. Further, these are essential so that we can conduct our business in accordance with our stated values.

   The Code is applicable to all professionals serving in the roles of finance, tax, accounting, treasury, internal audit, sales, credit, collection, Admin, HR and investor relations, the members of the audit committee, and members of the board of Magma Shrachi Finance Limited and its subsidiaries (if any).

   Ethical business conduct is critical to MSFL business. Accordingly, Officers are expected to read and understand this Code, uphold these standards in day to day activities, and comply with: all applicable laws; rules and regulations; and all applicable policies and procedures adopted by the Company that govern the conduct of its senior employees / employees.

   As the principles described in this code are general in nature, Officers should also review the company's other applicable policies and procedures for more specific instruction. They may contact 'HR Department', for any clarification.

2. HONEST AND ETHICAL CONDUCT

   MSFL expect all Officers to act in accordance with the highest standards of personal and professional integrity, honesty and ethical conduct, while working on the Company's premises, at offsite locations where the Company's business is being conducted, at Company sponsored business and social events, or at any other place where Officers are representing the Company.

   Honest conduct shall mean & include the conduct that is free from fraud or deception. The conduct should be conforming to the accepted professional standards of conduct. Ethical conduct includes the ethical handling of actual or apparent conflicts of interest between personal and professional relationship.

3. CONFLICTS OF INTEREST

   An Officer's duty to the Company demands that he or she avoids and discloses actual and apparent conflicts of interest. A conflict of interest exists where the interests or benefits of one person or entity conflict with the interests or benefits of the Company. Conflict of interests may arise in any of the following areas:-

   1. Employment / Outside employment. In consideration of employment with the company, Officers are expected to devote their full attention to the business interests of the Company. Officers are prohibited from engaging in any activity that interferes with their performance or responsibilities to the Company, or is otherwise in conflict with or prejudicial to the Company. MSFL’s policies prohibit Officers from accepting simultaneous employment with suppliers, customers, competitors of the Company, or from taking part in any activity that enhances or supports a competitor's position. Additionally, Officers must disclose to the Company's audit committee, any interest that they have that may conflict with the business of the Company.

   2. Outside directorships. It is a conflict of interest to serve as a director of any Company that competes with the Company. Officers must first obtain approval from the company's audit committee before accepting a directorship.

   3. Business Interest If an Officer is considering investing in any customer, supplier, competitor of the Company, he or she must first take care to ensure that these investments do not compromise on their responsibilities to the Company. It is implied policy of MSFL that Officers first obtain approval from the Company's audit committee before making such an investment. Many factors should be considered in determining whether a conflict exists, including the size and nature of the investment; the Officer's ability to influence the Company's decisions; his or her access to confidential information of the Company or of the other Company; and the nature of the relationship between the Company and the other Company.

   4. Related parties. Officers should avoid conducting Company business with a relative, or with a business, in which a relative is associated in any significant role. Relatives include spouse, siblings, children, parents, grandparents, grandchildren, aunts, uncles, nieces, nephews, cousins, step relations, and in-laws. The extant policy of the Company discourages the employment of relatives of Officers in positions or assignments within the same department. The Company prohibits the employment of such individuals in positions that have a financial dependence or influence (e.g.; an auditing or control relationship, or a supervisor / subordinate relationship).

   5. Payments or gifts from others. Under no circumstances may Officers accept any offer, payment, promise to pay, or authorization to pay any money, gift, or anything of value from customers, vendors, consultants, etc., that is perceived as intended, directly or indirectly, to influence any business decision, any act or failure to act, any commitment of fraud, or opportunity for the commitment of any fraud. Inexpensive gifts, infrequent business meals, celebratory events and entertainment, provided that they are not excessive or create an appearance of impropriety, do not violate this policy. Gifts given by the company to suppliers or customers, or received from suppliers or customers, should be appropriate to the circumstances and should never be of a kind that could create an appearance of impropriety. The nature and cost must always be accurately recorded in the Company's books and records.

   6. Corporate Opportunities. Officers may not exploit for their own personal gain, opportunities that are discovered through the use of corporate property, information or position, unless the opportunity is disclosed fully in writing to the Company's board of directors and the board declines to pursue such opportunity.

   7. Other situations. Because other conflicts of interest may arise, it would be impractical to attempt to list all possible situation. If a proposed transaction or situation raises any questions or doubts, Officers must consult the Company's audit committee.

4. DISCLOSURE TO THE SEC AND THE PUBLIC

   Our policy is to provide full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, RBI, Company Law Board, Security Exchange Board, Stock Exchange, etc. Accordingly, Officers must ensure that they and others in the company comply with Co's disclosure controls and procedures, and its internal controls for financial reporting.

5. COMPLIANCE WITH GOVERNMENTAL LAWS, RULES AND REGULATIONS

   Officers must comply with all applicable governmental laws, rules and regulations. Officers must acquire appropriate knowledge of the legal requirements relating to their duties sufficient to enable them to recognize potential dangers, and to know when to seek advice from the authority concerned. Violations of applicable governmental laws, rules and regulations may subject Officers to individual criminal or civil liability, as well as to disciplinary action by the Company. Such individual violations may also subject the Company to civil or criminal liability or the loss of business.

6. MISCONDUCT & DISCIPLINARY ACTION

   1. MISCONDUCT

      "MISCONDUCT" in the context of this Code of Conduct shall mean wrong or improper action or behaviour backed by deliberate mala fide intent. It shall not be mere error, omission or inefficiency but willful negligence, disobedience and insubordination. Identification and determination of misconducts and corresponding disciplinary action/s thereon as detailed in this section have been framed in the spirit of the Bengal Model Standing Orders.

      An illustrative list of misconducts is given below :

      1. Willful insubordination or disobedience, impertinence whether alone or in combination with another or others, of any lawful and reasonable order of a superior.

      2. Any act subversive of discipline, cleanliness and efficiency and any act involving moral turpitude committed within the premises of the establishment and outside, if the same has a bearing on the services of other employees in the establishment.

      3. Theft, fraud or dishonesty in connection with the employer's business or property as also with those of other employees if and as proven.

      4. Accepting bribes or illegal gratification in any form from any person who is associated with the business of the company (e.g. customer, vendor, dealer, DSA, MBA etc.).

      5. Any act interpretable as a breach of honesty, integrity, in any manner directly/indirectly established.

      6. Habitual absence without leave or absence without sufficient cause/s or unauthorized absence for more than 10 consecutive days.

      7. Habitual late attendance.

      8. Habitual negligence or neglect of work.

      9. Drunkenness, fighting, riotous, indecent disorderly behaviour or conduct likely to cause breach of peace or conducts endangering the life or safety of any other person.

      10. Causing damage to work in progress or to any other property of the establishment.

      11. Loitering, idling or wasting time during office hours.

      12. Disclosing to any unauthorized person/s any information, policy or procedure in regard to the working of the establishment, which comes into the possession of the employee during the course of his/her work.

      13. Refusal to proceed on outstation duties or to carry out any duty assigned at any other place, or refusal to comply with any order/s of transfer.

      14. Threatening or intimidating any employee or inflicting an assault on any employee within the premises of the establishment or any other employee within the premises of the establishment.

      15. Refusal to accept a charge sheet, suspension order or memo/notice or letter or any order given by a superior either himself or through a messenger or peon (including a courier service).

      16. Refusal to give evidence in any enquiry against any other employee charges with any misconduct and/or misbehaviour with the Enquiry Officer or witnesses during the pendency of disciplinary proceedings.

      17. Obtaining leave of any kind on a false pretext or taking employment or interfering with records either pertaining to himself / herself or to any other employee.

      18. Giving false information regarding name, age, father's name, spouse's name, qualifications or any other previous service particulars.

      19. Habitual breach of any of the Standing Orders or instructions issued there under from time to time or frequent repetition of any misconduct or act of omission.

      20. Conviction in any Court of Law for a criminal offence.

          NB :    The acts of misconduct enumerated above are only illustrative and not exhaustive. The management reserves the right to construe any act/activity prejudicial to the norms / functions / activities / interests of the Company as "Misconduct" and initiate appropriate disciplinary action/s in respect thereof.

   2. DISCIPLINARY ACTION

      1. The management of the Company shall be empowered to initiate, through the Head of HR, disciplinary actions/proceedings against any employee guilty of misconduct and/or infringing any Service Rule/s. All employees shall be amenable to discipline and disciplinary actions of the establishment and shall, as such, be answerable for any act/s or omission/s on their part deemed prejudicial to the interest of the Company.

      2. The nature and degree of penalty awarded by the Company shall be governed by :

         • the nature and gravity of the offence

         • the overall track record of the erring employee

         • any other extenuating or aggravating evidence/s that may exist

         • a fair and rational consideration of the explanation/s offered by the employee

      3. No penalty shall be imposed on any employee without providing adequate opportunity to his/her to defend/justify his/her act. While due cognizance shall be taken of the principles of natural justice in favour of an erring employee, it should be noted that the very act of submission of an explanation in defence of a misconduct shall not automatically absolve the employee of guilt and consequent punishment. The following procedure shall normally be followed in respect of disciplinary proceedings / actions :

         1. The HR Department shall issue to the employee a charge sheet clearly spelling out the charge/s of misconduct/offence and the circumstances/prima facie evidences appearing against him/her. The employee shall be asked to explain his/her misconduct in writing and show cause why penal action should not be initiated against him/her.

         2. The employee shall be given 24-72 hours' time, as decided and notified by the HR Department, to explain his/her act/s and show cause as stated in clause (i) above.

         3. In the event of the employee unconditionally accepting the charge/s leveled against him/her, appropriate penalty as decided by the HR department shall be imposed through a written information to the employee.

         4. In case the employee does not accept the charge/s spelt out in the Charge Sheet, a domestic enquiry shall be conducted where the employee shall be provided further opportunity of defending himself/herself directly or through a representative co-workman or colleague if so desired by him/her. In the enquiry, the employee shall also be permitted to produce witness/es for his/her defence and to cross-examine any other witness on whose evidence/s the charge/s has/have been established. The management will appoint an Enquiry Officer either from within or outside the Company for the purpose of conducting a fair and impartial enquiry.

         5. A copy of the enquiry proceedings duly signed by the Enquiry Officer and all persons present therein (including witnesses) shall be handed over to the employee as well as the Management's Representative in the enquiry. The proceedings shall record the statements made at the enquiry and the evidence/s obtained/established.

         6. A report on the enquiry shall be submitted to the management by the Enquiry Officer based on facts and material evidence/s as revealed/substantiated by the enquiry. The report shall not, however, recommended any specific punishment.

         7. An order of punishment decided by the management shall be communicated to the employee concerned in writing. Such order shall briefly outline the offence, the specific nature/duration of the punishment and the specific Rule under which the punishment is being given.

      4. The Head of HR is empowered to suspend a charge-sheeted employee

         1. pending a domestic enquiry into his/her offence or

         2. where a criminal case against the employee is pending investigation or trial.

         In case I, the period of suspension shall not exceed 3 months during which the employee shall be entitled to a subsistence allowance equivalent to 50% of his/her gross salary. If the enquiry gets prolonged beyond 3 months for no fault of the employee, his/her subsistence allowance shall be raised to 75% of the gross salary. If, however, the enquiry gets prolonged beyond 3 months for reasons directly attributable to the employee his/her subsistence allowance shall be reduced to 25% to the gross salary. In case II, the period of suspension shall not exceed 6 months. The subsistence allowance conditions shall remain similar to those in case I.

         The subsistence allowance paid in either case shall not be recoverable by the Company if the employee is convicted following enquiry.

         The order of suspension shall be in writing under signature of the Head of HR and shall take effect immediately on communication thereof to the employee.

      5. If, on enquiry, an employee is not found guilty, he/she shall be exonerated and reinstated in the same position as the one held prior to suspension with full pay for the suspension period less the subsistence allowance already paid.

      6. If the employee is found guilty, punishment shall be given in any of the following forms or in any combination thereof depending on the factors enumerated in Para 2 of this section :

         1. Warning or censuring.

         2. Recovery of the whole or part of any pecuniary loss caused to the Company by the employee as a result of the misconduct.

         3. Withholding of annual increment.

         4. Demotion or reduction in rank with commensurate loss of pay.

         5. Suspension from employment without pay by way of punishment for a period not exceeding 7 days (i.e. punitive suspension).

         6. Termination of employment with/out notice, as deemed necessary.

            N.B. Punishment shall be commensurate with the gravity of the offence/s and factors listed in Para (b) of this section. In case a dismissal order from the Management is challenged by the employee concerned in a Court of Law and a ruling is passed in favour of the employee, the management will enjoy the prerogative of appeal in a higher Court.

         7. In exceptional circumstances where the offence committed by an employee is of a criminal nature or of any other extremely serious nature, the Company can terminate his/her service forthwith on the basis of first hand evidence/s without
            an enquiry. In such case/s the termination order shall record the reasons warranting such action. It shall be the management's prerogative to determine and define the parameters of an exceptional circumstance where an enquiry may be totally dispensed with.

         8. An employee whose service is terminated under clause (vii) above shall not be entitled to any notice or notice pay (in lieu of notice) from the Company.

         Common Proceedings

         1. Where two or more employees are concerned in the same case, the HR Department may direct common proceedings to be initiated against all or some of them and for this purpose, a common Enquiry Officer may be appointed to conduct the proceedings.

         2. Where different charges are framed against the same employee at different points of time, the same Enquiry Officer in the common proceedings may enquire into any/all the charges.

7. VIOLATIONS OF THE CODE OF CONDUCT

   Part of an Officer's job, and of his or her ethical responsibility, is to help enforce this Code. Officers should be alert to possible violations and report this to the HR Department (suggestive) or the CFO (suggestive). Officers must cooperate in any internal or external investigations of possible violations. Reprisal, threat, retribution or retaliation against any person who has, in good faith, reported a violation or a suspected violation of law, this Code or other Company policies, or against any person who is assisting in any investigation or process with respect to such a violation, is prohibited.

   Actual violations of law, this Code, or other Company policies or procedures, should be promptly reported to the HR Department (suggestive). The Company will take appropriate action against any Officer whose actions are found to violate the Code or any other policy of the Company. Disciplinary actions may include immediate termination of employment at the Company's sole discretion. Where the Company has suffered a loss, it may pursue its remedies against the individuals or entities responsible. Where laws have been violated, the Company will cooperate fully with the appropriate authorities.

8. WAIVERS AND AMENDMENTS OF THE CODE

   The Company shall be duly bound to continuously review and update its policies and procedures. Therefore, this Code is subject to modification. Any amendment or waiver of any provision of this Code must be approved in writing by the Company's board of directors and promptly disclosed (on the company's website) and in applicable regulatory filings pursuant to applicable laws and regulations, together with details about the nature of the amendment or waiver.

9. ACKNOWLEDGMENT OF RECEIPT OF CODE OR ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR OFFICERS

   I have received and read the Company's Code of Ethics for Principal Executive and Senior Financial Officers (the "Code"). I understand the standards and policies contained in the Code and understand that there may be additional policies or laws specific to my job. I agree to comply with the Code.

   If I have questions concerning the meaning or application of the Code, any Company policies, or the legal and regulatory requirements applicable to my job, I may consult the HR department or the Legal department, and that my questions or reports to those sources will be maintained in confidence.