Code of Conduct of D & H India Limited
SEBI (Prohibition of Insider Trading) Regulations, 2015
This code may be called as code of conduct of D & H India Limited (herein after referred to as the D & H India) for prevention of Insider Trading. The Board of D & H India has initially framed this code by taking approval of Board on 15th May, 2015. And due to amendments made in the SEBI (PIT) Regulations the said policy is amended in the Board meeting held on 29.03.2019.
This Code can be subsequently modified/amended/altered by Directors/Compliance Officer authorized by the Board. But in case of any statutory modification or amendment or alteration of the provisions of SEBI (Prohibition of Insider Trading), Regulations 2015, the newly modified /amended / altered provisions of the Regulation shall be placed before the Board of Directors of the D & H India for noting and the amended code shall be deemed to be implemented effective from 1st April 2019.
Insider trading means dealing in securities of a listed company traded on any Stock Exchange in India by insiders which term includes Directors, Officers and Designated Employees of D & H India based on or when in possession of unpublished price sensitive information (UPSI).Such trading by Insiders erode the investors’ confidence in the integrity of the management and is unhealthy for the capital markets.
The SEBI, as part of its efforts to protect the interest of investors in general, had issued the SEBI (Prohibition of Insider Trading) Regulations, 2015, under the powers conferred on it by the SEBI Act, 1992, which is made applicable to all companies whose shares were listed on Indian stock exchanges.
This code shall be applicable to all the Promoter, member of the promoter group, Designated Employees, Specified persons, immediate relatives, Legitimate Purpose and connected persons which includes (Fiduciaries and Intermediaries) of D & H India and shall come into effect from the date of listing of Equity Shares of the Company on a stock exchange in India subsequent to an initial public offering of the Equity Shares of the Company.
NOTE: It is intended that a connected person is one who has a connection with the company that is expected to put him in possession of unpublished price sensitive information. Immediate relatives and other categories of persons specified above are also presumed to be connected persons, but such a presumption is a deeming legal fiction and is rebuttable. This definition is also intended to bring into its ambit persons who may not seemingly occupy any position in a company but are in regular touch with the company and its officers and are involved in the know of the company’s operations. It is intended to bring within its ambit those who would have access to or could access unpublished price sensitive information about the company by virtue of any connection that would put them in possession of unpublished price sensitive information.
NOTE: It is intended that the immediate relatives of a “connected person” too become connected persons for purposes of these regulations. Indeed, this is a rebuttable presumption.
i. Chief Executive Officer (CEO), Chief Financial Officer (CFO);
ii. Senior Manager and above of all the departments of D & H India;
Words and expressions used and not defined in these regulations but defined in the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Depositories Act, 1996 (22 of 1996) or the Companies Act, 2013 (18 of 2013) and rules and regulations made thereunder shall have the meanings respectively assigned to them in those legislation.
1. COMPLIANCE OFFICER- APPOINTMENT AND DUTIES
1.1 The Board of the Company shall appoint the Company Secretary as the Compliance Officer to ensure compliance and for effective implementation of the Regulations and also this Code across the Company.
1.2 The Compliance Officer shall report to the Board of the Company.
1.3 The Company Secretary shall hold the position of the Compliance Officer so long as he/she remains the Company Secretary. In the event of the office of the Company Secretary falling vacant till such time a successor is appointed, the Managing Director shall, in the interim period act as the Compliance Officer.
1.4 In order to discharge his/her functions effectively; the Compliance Officer shall be adequately empowered and provided with adequate manpower and infrastructure to effectively discharge his/her function. In the performance of his/her duties, the Compliance Officer shall have access to all information and documents relating to the Securities of the Company.
1.5 The Compliance Officer shall act as the focal point for dealings with SEBI in connection with all matters relating to the compliance and effective implementation of the Regulations and this Code.
1.6 The Compliance Officer shall be responsible for:
2. PRESERVATION OF PRICE SENSITIVE INFORMATION.
2.1 Designated Employees, specified persons, immediate relatives and Connected Persons shall maintain the confidentiality of all Price Sensitive Information. Directors, Officers and Designated Employees and Connected Persons shall not pass on such information to any person directly or indirectly by way of making a recommendation for the purchase or sale of securities.
2.2 Price Sensitive Information is to be handled on a “need to know” basis, i.e., Price Sensitive Information should be disclosed only to those within D & H India who need the information to discharge their duty. This means the UPSI shall be disclosed only to those persons who need to know the same in furtherance of a legitimate purpose, the course of performance or discharge of their duty and whose possession of UPSI will not in any manner give rise to a conflict of interest or likelihood of misuse of the information.
2.3 Need to Know:
2.4 Limited access to confidential information:
Specified Persons’ privacy to confidential information shall, in preserving the confidentiality of information, and to prevent its wrongful dissemination, adopt among others, the following safeguards:
2.5 Files containing confidential information shall be kept secure. Computer files must have adequate security of login and password etc.
2.6 Preservation of misuse of “Price Sensitive Information”.
To comply with this confidentiality obligation, the Specified Persons shall not discuss UPSI in public places and recommend to anyone that they may undertake Trading insecurities of the Company while being in possession, control or knowledge of UPSI,
2.7 All Directors, Officers and Designated Employees of D & H India and Connected Persons shall be subject to trading restrictions as enumerated below.
2.6 All Directors, Officers and Designated Employees shall not engage in dealing in securities, whether on their own account or on behalf of the Dependent and shall ensure that their Dependent shall also not engage in Dealing in Securities on their own account, if such Director, Officer or Designated Employees is in possession of any unpublished price sensitive information.
3. TRADING PLAN
Every Designated Person shall obtain a pre-trading approval as per the procedure prescribed hereunder for any Trading in the Securities of the Company proposed to be undertaken by such Designated Person / his / her Immediate Relatives. Such pre-trading approval would be necessary, only if the cumulative trading (including trading in derivatives of Securities, if permitted by law) whether in one transaction or a series of transactions in any financial year exceeds Rs. 10 lakh (market value).
3.1 An insider shall formulate a trading plan and present it to the compliance officer for approval and public disclosure pursuant to which trades may be carried out on his behalf in accordance with such plan.
3.2 Insider shall submit trading plan before six months from commencement of trading.
3.3 Insider shall not inter into the transaction between the twentieth trading day prior to the last day of any financial period for which results are required to be announced by D & H India of the securities and the second trading day after the disclosure of such financial results.
3.4 If another trading plan is already in existence no other plan shall not be accepted covering the same time period.
3.5 Insider in his trading plan shall set out number of Securities to be traded along with the nature of the trade and time gap between the trade and dates on which such trade shall be affected.
3.6 Compliance officer shall review the trading plan, approve and monitor the implementation of the plan.
3.7 The trading plan once approved shall be irrevocable and the insider shall mandatorily have to implement the plan, without being entitled to either deviate from it or to execute any trade in the securities outside the scope of the trading plan.
3.8 The Insider shall not execute the aforesaid trading plan if any unpublished price sensitive information in possession of the insider at the time of formulation of the plan has not become generally available at the time of the commencement of implementation and in such event, Insider shall execute trading plan when such information shall become public.
3.9 After approval the trading plan Compliance Officer shall inform the BSE about the approved trading plan and the same will be broadcast on Company’s website.
3.10 Insider shall submit trading plan alongwith the declaration and application in “Annexure – 1 to 3” or any other format specified by SEBI or BSE.
4. TRADING WINDOW AND WINDOW CLOSURE
4.1 (i) The trading period, i.e. the trading period of the stock exchanges, called ‘trading window”, is available for trading in the Company’s securities.
(ii) Closure of trading window:-
(iii) When the trading window is closed, the Specified Persons shall not trade in the Company’s securities in such period.
(iv) All Specified Persons shall conduct all their dealings in the securities of the Company only in a valid trading window and shall not deal in any transaction involving the purchase or sale of the Company’s securities during the periods when the trading window is closed, as referred to in point no. (ii) above or during any other period as may be specified by the Company from time to time.
(v) In case of ESOPs, exercise of option may be allowed in the period when the trading window is closed. However, sale of shares allotted on exercise of ESOPs shall not be allowed when trading is closed.
4.2 The Compliance Officer shall intimate the closure of trading window to all the designated employees of the Company when he determines that a designated person or class of designated persons can reasonably be expected to have possession of unpublished price sensitive information. It is the duty of the designated employees to inform the immediate relatives about the closure of trading window, as and when communicated by the Company and ensure that they do not deal in the securities of the Company. Such closure shall be imposed in relation to such securities to which such unpublished price sensitive information relates.
4.3 The Compliance Officer after taking into account various factors including the unpublished price sensitive information in question becoming generally available and being capable of assimilation by the market, shall decide the timing for re-opening of the trading window, however in any event it shall not be earlier than forty-eight hours after the information becomes generally available.
4.4 The trading window shall also be applicable to any person having contractual or fiduciary relation with the Company, such as auditors, accountancy firms, law firms, analysts, consultants etc., assisting or advising the Company.
5. PRE-CLEARANCE OF TRADES
5.1All Directors, Officers, Designated employees of D & H India and Connected Persons who intend to deal in the securities of the Company when the trading window is opened and if the value of the proposed trades is above Rupees Ten Lakh (Rs. 10,00,000/-), should pre-clear the transaction. However, no designated person shall be entitled to apply for pre-clearance of any proposed trade if such designated person is in possession of unpublished price sensitive information even if the trading window is not closed and hence, he shall not be allowed to trade.
5.2 An application may be made in prescribed format (Annexure 2) to the Compliance Officer indicating the estimated number of shares that the Insider intends to deal in, the depository with which he/she has an account and the details as to his/her shareholding before and after the intended transaction.
5.3 An undertaking (Annexure 3)shall be executed in favour of the company by such directors, officers, designated employees incorporating, inter alia, the following clauses, as may be applicable :
6. INSIDERS TO MAINTAIN DIGITAL DATABASE
The Insiders shall ensure that a structured digital database is to be maintained containing the names of such persons or entities as the case may be with whom information is shared under this regulation along with the Permanent Account Number or any other identifier authorized by law where Permanent Account Number is not available Such databases shall be maintained with adequate internal controls and checks such as time stamping and audit trails to ensure non-tampering of the database.
7. COMPLIANCE OFFICER TO MAINTAIN THE RECORD OF DESGINATED PERSONS AND RELATED PERSONS TO THEM
Compliance Officer is required to take the following details from designated persons, immediate relatives and persons with whom such designated person(s) shares a material financial relationship.
The term “material financial relationship” shall mean a relationship in which one person is a recipient of any kind of payment such as by way of a loan or gift during the immediately preceding twelve months, equivalent to at least 25% of such payer’s annual income but shall exclude relationships in which the payment is based on arm’s length transactions.”
8. OTHER RESTRICTIONS
8.1 All directors, officers, designated employees their dependents and Connected Persons shall execute their order in respect of securities of D & H India within one week after the approval of pre-clearance is given. If the order is not executed within one week after the approval is given, the directors, officers, designated employees must pre-clear the transaction again.
8.2 All directors/ officers/ designated employees who buy or sell and number of shares of D & H India shall not enter into an opposite transaction i.e. sell or buy any number of shares during the next six months following the prior transaction. All directors/ officers/designated employees shall also not take positions in derivative transactions in the shares of D & H India at any time.
In the case of subscription in the primary market (initial public offers), the above-mentioned persons shall hold their investments for a minimum period as specified in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. The holding period would commence when the securities are actually allotted.
8.3 In case the sale of securities is necessitated by personal emergency, the holding period may be waived by the Compliance Officer after recording in writing his/ her reasons in this regard.
8.4 D & H India will have a process to ascertain how and when people are brought ‘inside’ on sensitive transactions. Proposed Insider should be made aware of the duties and responsibilities attached to the receipt of Inside Information, and the liability that attaches to misuse or unwarranted use of such information.
9. REPORTING REQUIREMENTS FOR TRANSACTIONS IN SECURITIES INITIAL DISCLOSURES
9.1 Every promoter, member of the promoter group, key managerial personnel and director of every company whose securities are listed on any recognized stock exchange shall disclose his latest holding of Securities of D & H India mentioning date of holding within thirty days of these CODE taking effect;
9.2 Every person on appointment as key managerial personnel or a director of D & H India or upon becoming a promoter or member of the promoter group shall disclose his holding of securities of D & H India as on the date of appointment or becoming a promoter, to D & H India within seven (7) days of such appointment or becoming a promoter to D & H India /Compliance Officer.
9.3 Every promoter, member of the promoter group , designated person and director of every company shall disclose to D & H India the number of such securities acquired or disposed of within two trading days of such transaction if the value of the securities traded, whether in one transaction or a series of transactions over any calendar quarter, aggregates to a traded value in excess of ten lakh rupees or such other value as may be specified by SEBI time to time.
9.4 Compliance Officer of D & H India shall notify the particulars of such trading to the stock exchange on which the securities are listed within two trading days of receipt of the disclosure or from becoming aware of such information.
Disclosures by other connected persons.
9.5 Disclosures shall be made as per the SEBI (Insider Trading) Regulation, 2015.
9.6 Compliance Officer shall maintain records of all the declarations in the appropriate form given by the directors, officers, designated employees for a minimum period of three years.
9.7 The Compliance Officer shall place before the Managing Director or Chief Executive Officer or Chief Financial Officer or a committee specified by D & H INDIA, on a monthly basis all the details of the dealing in the securities by Director, Officer, Designated Employees of D & H India and the accompanying documents that such persons had executed under the pre-dealing procedure as envisaged in this code.
9.8 Compliance Officer shall take the Code of Conduct from Intermediaries and Fiduciaries of D & H India as prescribed in Schedule C of SEBI (PIT) Regulations, 2015.
10. DISSEMINATION OF PRICE SENSITIVE INFORMATION
10.1 No information shall be passed by Specified Persons by way of making a recommendation for the purchase or sale of securities of the Company.
10.2 Disclosure / dissemination of Price Sensitive Information with special reference to analysts, media persons and institutional investors:
10.3 The following guidelines shall be followed while dealing with analysts and institutional investors:
11. PENALTY FOR CONTRAVENTION OF CODE OF CONDUCT
11.1 Every designated employee, specified persons, immediate relatives and connected persons (which shall include Intermediaries and Fiduciaries)shall be individually responsible for complying with the applicable provisions of this Code (including to the extent the provisions hereof are applicable to their Immediate Relatives).
11.2 The persons who violate this Code shall, in addition to any other penal action that may be taken by the Company pursuant to law, also be subject to disciplinary action which in respect of an Employee may include wage freeze, suspension or termination of employment.
11.3 Action taken by the Company for violation of the Regulations and the Code against any person will not preclude SEBI from taking any action for violation of the Regulations or any other applicable laws/rules/regulations.
11.4 Under Section 15G of the SEBI Act, any Insider who indulges in insider trading in contravention of Regulation 3 is liable to a penalty which shall not be less than Rs. 10 lakh but which may extend to Rs.25 Crores or three times the amount of profits made out of insider trading, whichever is higher.
11.5Under Section 24 of the SEBI Act, anyone who contravenes the Regulations is punishable with imprisonment for a maximum period of ten years or with fine which may extend to Rs.25 Crores or with both. Further, in case any person fails to pay the penalty imposed by the adjudicating officer or fails to comply with any of his directions or orders, he shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to ten years, or with fine, which may extend to twenty-five Crore rupees or with both.
11.6 In case it is observed by the Compliance Officer that there has been violation of the Regulations by any person, he/she shall forthwith inform the Audit Committee of the Company about the violation. The penal action will be initiated on obtaining suitable directions from the Audit Committee. The Compliance Officer shall simultaneously inform SEBI about such violation. The person, against whom information has been furnished by the Company/Compliance Officer to SEBI for violations of the Regulations/Code, shall provide all information and render necessary cooperation as may be required by the Company/Compliance Officer or SEBI in this connection.
12. INFORMATION TO SEBI IN CASE OF VIOLATION OF SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015
In case it is observed by D & H INDIA/ Compliance Officer that there has been a violation of SEBI (Prohibition of Insider Trading) Regulations, 2015 SEBI shall be informed by D & H INDIA.
By order of the Board
FOR D & H INDIA LIMITED,
(Under Code of Conduct of the Company read with SEBI Insider Trading regulation, 2015)
The Compliance Officer
D & H India Limited
Dear Sir /Madam
Ref: DP's name :…………………….
DP ID :…………………….
CLIENT ID :……………………..
Name of insider :……………………..
Your approval is solicited for proposed Trading Plan purchase & sale of securities of the Company in physical / demat form. I am furnishing details of trade to be made in six months after approval of the proposed trading plan:-
Employee Code no……..
Application for pre-clearance of trade
(Under Code of Conduct of the Company read with Insider Trading regulation, 2015)
The Compliance Officer
D & H India Limited
Dear Sir /Madam
Ref: DP's name :………………..
DP ID :……………….
CLIENT ID :……………….
Name of insider :……………….
Your approval is solicited for purchase/sale of _____ securities of the Company in physical / demat form.
I state on solemn affirmation:
Employee Code no………..
I………………………………..aged about………….years, Son/daughter of …………………………………working in the capacity of ………………………….. in D & H India Limited(hereinafter referred to as ‘Company’) do hereby solemnly declare and undertake as under:
Emp. Code :………………………..
Approval of Trading Plan
1. I, ……………………..Compliance Officer of the Company, have reviewed the Trading Plan submitted by the Insider of the Company and Insider has furnished all the information/undertaking which I have demanded.
2. The aforesaid plan is not violating any code of conduct and SEBI (Insider Trading) Regulation, 2015.
3. I shall monitor the implement of the Plan.
For D & H India Limited