Companies Act & SEBI Compliances
The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, was amended on 22nd February, 2002 (hereinafter referred to as the 'Regulations') in terms of which the Company is required, inter alia, to frame a Code of Conduct for prevention of insider trading by employees of the Company, including the Directors, in relation to the securities of the Company. 'Securities' for the purpose of this Code shall include shares of the Company and related stock market derivatives.
In line with the said Regulations, the Company adopted Code of Conduct (hereinafter referred to as the 'Code') during the year 2002/03 prohibiting employees from dealing in shares of the company without obtaining the permission of Director & Secretary. The company has been receiving requests from employees for purchase of shares fixing a threshold limit. Now, for the purpose of internal regulations and for prevention of Insider Trading in shares it is proposed to introduce the modified new set of Code of Conduct for the "Designated Employees" of the Company which shall read as follows:
PROHIBITION TO BUY / SELL SECURITIES OF THE COMPANY BY EMPLOYEES, INCLUDING DIRECTORS
Employees, including Directors, when in possession of any unpublished price sensitive information, as defined in the Regulations, pertaining to the Company, shall not:
Buy/Sell securities of the Company, either on their own behalf or on behalf of any other person.
Communicate, counsel or procure any unpublished price sensitive information to/from any person.
RESTRICTION TO BUY/SELL SECURITIES BY DESIGNATED EMPLOYEES
The Designated Employees shall cover the following:
Designated Employees shall not buy/sell securities of the Company during Closure of the 'Trading Window', i.e. the period during which trading in the securities of the Company is prohibited.
- Directors, Executive and Non-Executive
- Managers at all Levels or its equivalent
- Employees in Finance and Secretarial functions located at the Factory/Corporate Headquarters; and
- Statutory Auditors of the Company
Trading Window shall be closed during the following periods:
a. Declaration of periodical financial results of the Company.
b. From the date of circulation of the agenda for the meeting of the Board of Directors, in which any material, price sensitive and unpublished event, including the following, are proposed. The closure of the Trading Window for these events will be advised by the Compliance Officer appointed by the Board of Directors for the purpose of this Code:
The Trading Window shall open 48 hours after close of the Board meeting at which decisions in respect of the above events are taken.
- Proposal in respect of issue of securities by way of public/rights/bonus etc
- Proposal in respect of significant expansion plans or execution of new large projects
- Proposal in respect of amalgamation, mergers, takeovers
- Proposal in respect of disposal of whole or substantially the whole of the undertaking
Designated Employees shall require prior clearance for purchase and sale of securities of the Company, exceeding 1000 shares in a financial year (either in one transaction or in a series of transactions). Such prior clearance shall be required from the Committee constituted by the Board. Purchase / sale of securities by the Committee members beyond the aforesaid limits shall require prior clearance from the Chairman. Purchase/sale transactions, for which prior clearance has been obtained by Designated Employees, shall be executed within seven days of such clearance.
Designated Employees shall hold the securities of the Company for a minimum period of 30 days from the date of purchase ('Minimum Holding Period'). In case of personal emergency, the prior approval of the Compliance Officer shall be taken for relaxation in the Minimum Holding Period. In respect of the Compliance Officer, such relaxation shall require prior approval of the Chairman.
Designated Employees shall make the following disclosures of shares and other securities held in the Company by them and their dependant family members, to the Compliance Officer:
Dependant family members' for this purpose means dependant parents, dependant children, dependant spouse and any other person(s) dependant on the Designated Employee.
- Fresh disclosure of number of shares and other securities held as on February 14th, 2008. This disclosure shall be made by 14th March, 2008.
- Annual disclosure of number of shares and other securities held as on 31st March, including details of purchase / sale of shares and other securities during the financial year. This disclosure shall be made within 30 days from the close of each financial year.
- Changes in shareholding, when such change exceeds 1000 shares. This disclosure shall be made within 4 working days of such change
- Disclosure shall also be made of the number of shares and other securities held, upon becoming a Designated Employee, at any point of time. This disclosure shall be made within 4 working days of becoming a Designated Employee.
PENALTIES FOR CONTRAVENTION
Violation of this Code will invite severe disciplinary action. Such disciplinary action will be irrespective of action that may be taken by SEBI under the Regulations.
GENERAL A copy of the Regulations is enclosed. Employees are advised to peruse the Regulations carefully and acquaint themselves with all the provisions contained therein. The Compliance Officer will be available for clarification / assistance that may be necessary
Shriram EPC Limited (INSIDER TRADING) MODIFIED REGULATIONS, 2008.
I. Short title and commencement:-
II. Defnitions:- In these rules, unless the context otherwise provide:-
- These rules may be called Shriram EPC Limited (Insider Trading) Rules, 2008.
- These rules are applicable to "Designated Employees" and their Dependent Relatives.
- These Rules shall come into force in the Company w.e.f 14.2.2008
"Act" means the Securities and Exchange Board of India Act, 1992.
"Board" means the Board of Directors of SHRIRAM EPC Limited.
"Rules" means the SHRIRAM EPC LIMITED (INSIDER TRADING) RULES, 2008.
"Committee" means the member constituted by the Board.
"Company" means Shriram EPC Limited.
"Compliance Officer" means the Company Secretary or such other person who may be appointed by the Board of Directors as the Compliance Officer.
"Designated Employees" means All Directors, Managers at all levels, all employees in Finance and Secretarial Department, located at Factory / Corporate Headquarters, Statutory Auditors and any other employees and their dependent relatives who are privy to any price sensitive information.
"Dependents" means Spouse, dependent parents, dependent Children, dependent in-laws, and any other person dependent on the Designated employee.
"Dealing in Shares" means an act of subscribing, buying, selling or agreeing to buy, sell or deal in any shares of the Company by any person either as principal or agents.
"Insider" means a Designated Employee who is or was connected with the Company or is deemed to have been connected with the Company, and who is reasonably expected to have access to unpublished price sensitive information of the Company, or who has received or has had access to unpublished price sensitive information.
"Officer of a company" means any person as defined in clause (30) of section 2 of the Companies Act, 1956 (1 of 1956) including an auditor of the company
"Price Sensitive Information" means any information, which related directly or indirectly to the Company and if published, is likely to materially affect the price of shares of the Company and includes but shall not be restricted to:-
"Relative" means and includes spouse, parents, grand parents, children, brothers, sisters, aunts, uncles, nephews and in-laws.
- Periodical Financial results of the Company
- Intended declaration of dividends (both interim and final)
- Issues of Shares or buy back of Shares
- Any major expansion plans or execution of new projects
- Amalgamation, mergers and takeovers
- Disposal of whole or substantially the whole of the undertaking.
- Any significant change in policies, plans or operations of the Company.
"Published Information" means any information officially published by the Company or its authorised officers and including those information sent to the Stock Exchanges.
"Trading Window" means a period to be specified by the Company in which trading of securities can be done by the Designated Employee.
"Unpublished Information" means any information, which is not officially published by the Company or its agent and is not specific in nature. However speculative reports in print or electronic media by an analyst or reporter or by means of rumour shall not be considered as published information.
"Official Communication" means any communication made by an authorised person on behalf of the Company and must be recorded in writing.
III. Code of Conduct on matters relating to insider trading
No insider shall:-
IV. Rules and Procedures for ‘Designated Employees’ their Dependent Relatives to Invest in Company’s Shares.
- Either on his own behalf or on behalf of any other person, deal in securities of the company on the basis of any unpublished price sensitive information which has not yet been officially communicated to the public or the Stock Exchanges.
- Communicate any unpublished price sensitive information to any person, with or without his request for such information, except as required in the ordinary course of business or under any law, or
- Counsel or procure any other person to deal in shares of the Company on the basis of unpublished price sensitive information
No designated employee, his dependent relatives shall invest in the Company’s shares beyond the threshold limit of 1000 shares (prescribed at present) unless:-
- He/she takes prior approval of the Committee giving his name, estimated number of shares he / she intends to purchase or sell and details of Depository Participant.
- He/she files an undertaking stating that:
The Designated Employee must execute the order for purchase / sale of shares within one week of getting approval from the Compliance Officer otherwise fresh approval will be required.
All Designated Employees must hold their shares for at least 30 days if the shares are to be considered to have been made for investment purposes, otherwise there will be a strong presumption that the shares were purchased on price sensitive information. This Rule is also applicable to IPOs (Initial Public Offering).
In case of sale necessitated by personal emergency, holding period of 30 days can be waived by the Compliance Officer, for reasons to be recorded in writing.
V. Permanent Records and Updating thereof on continuous basis.
- He/she does not have access to or has not received price sensitive information up to the time of signing the undertaking.
- In the event of receiving any price sensitive information after signing the undertaking but before execution of the transaction, he / she will inform the Compliance Officer of the change and will refrain from dealing in the shares of the Company till such information is made public.
- He/she has not contravened the code of conduct for prevention of Insider Trading.
- He/she has made a full and true disclosure in the matter.
- Each Designated Person will file a declaration with the Compliance Officer providing the names of Dependents within the meaning of the rule along with his / their shareholding as on 14.02.08.
- On an on-going basis each Designated person shall update the above information as on 31st March every year.