Code of Insider Trading
INTRODUCTION
This code will be known as “Code of Conduct for Prevention of Insider Trading of the Mohit Industries Limited” (“Code”) made pursuant to Regulation 12 of the SEBI (Prohibition of Insider Trading) Regulations1992.
THE POLICY AND OBLIGATIONS
The Company endeavors to preserve the confidentiality of un-published price sensitive information and to prevent misuse of such information. The Company is committed to transparency and fairness in dealing with all stakeholders and in ensuring adherence to all laws and regulations.
Every Director and designated employee of the Company has a duty to safeguard the confidentiality of all such information obtained in the course of his or her work at the company. No Director/Executive Director/General Manager and other designated employee may use his or her position or knowledge of the Company to gain personal benefit or to provide benefit to any third party.
To achieve these objectives, Mohit Industries Limited (hereinafter referred to as “the Company”) hereby notifies that this code of conduct to be followed by all Directors/Executive Directors/General Managers and other designated employees of MOHIT.
APPLICABILITY
This Code shall apply to all Directors/Executive Directors/ General Managers and other designated employees of MOHIT.
DEFINITIONS
i. “SEBI Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992).
ii. “Regulations” mean the SEBI (Prohibition of Insider Trading) Regulations, 1992 as amended from time to time.
iii. “The Company” means MOHIT INDUSTRIES LIMITED (MOHIT)
iv. “Code” means this MOHIT Code of Conduct for Prevention of Insider Trading, as modified from time to time.
v. “Dealing in Securities” means an act of subscribing, buying, selling or agreeing to subscribe, buy, sell or deal in the securities of MOHIT by any person either as principal or agent.
vi. “Designated Employees” means a person occupying any of the following position in the Company:
a. All Directors
b. All Executive Director
c. All employees Of Senior Level management
d. All executives and staff working in Secretarial & Legal Deptt & Account Department.
e. Any other key person, who in the opinion of Compliance Officer be covered in the “designated employee”.
vii. “Dependants” means Spouse, Dependent parents, Dependent Children and any other person dependent on Designated Employee.
viii. “Insider” means any person who,
(a) 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 in respect of securities of MOHIT or
(b) Has received or has had access to such unpublished price sensitive information.
ix. “Officer of the Company” means any person as defined in clause (30) of Section 2 of the Companies Act, 1956 including an auditor of the Company Section 2(30) of the Companies Act, 1956 provides that “Officer of a Company” includes any director, manager or secretary or any person in accordance with whose directions or instructions the Board of directors or any one or more of the directors is or are accustomed to act.
x. “Price Sensitive Information” means any information that relates directly or indirectly to Company and which, if published, is likely to materially affect the price of securities of Company. The following shall be deemed to be price sensitive information:
(a) Periodical Financial Results of the Company
(b) Intended declaration of dividend (both interim and final, if any)
(c) Issue of securities or Buy-back of securities (by way of Public/ Rights/ Bonus etc.) or Buy-back of securities.
(d) Any major expansion plans or execution of new projects
(e) Amalgamation, mergers or takeovers
(f) Disposal of whole or substantial part of the undertaking
(g) Any Significant changes in policies, plans or operations of the company;
(h) Any proposed joint venture\foreign collaboration in India or abroad;
(i) Any major order obtained\cancelled;
(j) Any change in title\status\recognition of the company; and
(k) Any other matter which the Compliance Officer may decide as such.
xi. “Trading Window” means trading period for trading in the Company’s Securities. All days shall be the trading periods except when trading window is closed.
xii. “Unpublished Information” means information which is not published by the company or its agents and is not specific in nature. Speculative Reports in print or electronic media shall not be considered as Published information.
xiii. “Working Day” means working day when the regular trading is permitted on concerned stock exchange where securities of the company are listed.
All other words and phrases will have the same meaning as defined under the “SEBI (Prohibition of Insider Trading) Regulations, 1992” as amended from time to time and also under the “Securities and Exchange Board of India Act, 1992.”
COMPLIANCE OFFICER
i. “Compliance Officer” shall be a senior level employee as may be nominated by the Board from time to time for the purpose of administration of this Code, who shall report to the Managing Director / Chief Executive Officer.
ii. The Compliance Officer shall be responsible for setting forth policies and procedures and monitoring adherence to the rules for the preservation of Price Sensitive Information, pre- clearing of all Directors/Officers/Designated Employees and their dependents trades (through respective department heads), monitoring of trades and implementation of this Code of Conduct under the overall supervision of the Board of the Company.
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iii. The Compliance Officer shall maintain a record of the Designated Employees and any changes made in the list of Designated Employees.
iv. The Compliance Officer shall assist all employees of the Company in addressing any clarification regarding SEBI (Prohibition of Insider Trading) Regulations, 1992 and the Company’s Code of Conduct.
v. The Compliance Officer shall designate a Senior Official or the Company Secretary of the Company to act as Compliance officer in his absence.
PRESERVATION OF PRICE SENSITIVE INFORMATION
All Directors/Officers /Designated Employees shall maintain the confidentiality of all Price Sensitive Information and 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.
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 the Company who need the information to discharge their duty.
All Directors/designated employees should not acquire/purchase/sell Company’s shares either on behalf of themselves or others when in possession of unpublished price sensitive information.
Files containing confidential information shall be kept secure. Computer files must have adequate security of login and password etc.
PREVENTION OF MISUSE OF ‘PRICE SENSITIVE INFORMATION’
All Directors/ Officers/Designated Employees of the Company shall be subject to trading restrictions as enumerated below.
TRADING WINDOW
The Company shall specify a trading period, to be called “trading window”, for trading in the company’s securities. The trading window shall be closed during the time the following information is unpublished.
When the trading window is closed, the Directors/Officers /Designated Employees shall not trade in the Company’s securities in such period.
The trading window shall be, inter alia, closed Before 7 days prior to the happening of the following event and shall remain closed up to 24 hours after the publication of the price sensitive information:—
(a) Declaration of financial results (quarterly, half-yearly and annually).
(b) Declaration of dividends (interim and final).
(c) Issue of securities by way of public/rights/bonus etc.
(d) Any major expansion plans or execution of new projects.
(e) Amalgamation, mergers, takeovers and buy-back.
(f) Disposal of whole or substantially whole of the undertaking.
(g) Any changes in policies, plans or operations of the Company.
(h) For such period and for any such other event as may be deemed fit by the Compliance Officer
The time for commencement of closing of trading window shall be decided by the Company.
All Directors/Officers/Designated Employees of the Company 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 trading window is closed, as referred to above or during any other period as may be specified by the Company from time to time.
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 window is closed.
PRE-CLEARANCE OF TRADES
All Directors/Officers/Designated Employees and their Dependents who intend to deal in the securities of the Company shall pre-clear the intended transactions including those of ‘dependent’ in the securities of the Company as per the pre-dealing Procedure described hereunder.
Such pre-clearance of trade would be applicable wherever any Officer/Designated Employee/his dependent intends to deal in the shares of the Company in excess of the minimum threshold limit of market value exceeding Rs. 18,00,000/- or 35,000 shares whichever is less. Directors have to pre- clear their all intended transactions irrespective of value or number of shares involved. Trades of the
Compliance Officer which require pre-clearance in terms of the above shall be approved by the Managing Director or any Whole Time Director of the Company.
An application in “Form I”, as prescribed in Schedule I, shall be made to compliance officer, after obtaining the approval of Departmental Head, if any, indicating the estimated number of securities that Director/ Officers /Designated Employee intends to deal in and details of depository with which he has a depository account and such other details as may be required by any rule made by the Company in this behalf.
An Undertaking in “Form I” shall be executed in favour of the Company by such Director/Officer/ Designated Employee.
OTHER RESTRICTIONS
- Where any transaction has been approved, the Director/Officer/ Designated Employee and their Dependents shall execute the order within one week of the clearance of the transaction, and where any transaction has been approved with any additional restrictions, the same shall be executed within the above time in accordance with the additional restrictions specified. If the order is not executed within one week after the approval is given, the Director/Officer/ Designated Employee must pre-clear the transaction again
- Compliance Officer shall have a right to revoke any clearance granted to any transaction or add further additional restrictions to any clearance, before the relevant transaction has been executed.
- In case any transaction has been refused, the Director /Officer/ Designated Employee and their dependents shall be free to re-apply for pre-clearance of the transaction, which was refused, to the next higher authority, to Managing Director/Whole-Time Director, if Compliance Officer has refused the transaction.
- All Directors/ Officers/ Designated Employees who buy or sell any number of shares of the company 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 the Company at any time.
- In the case of subscription in the primary market (initial public offers), the above mentioned entities shall hold their investments for a minimum period of 30 days. The holding period would commence when the securities are actually allotted.
- In case the sale of securities is necessitated by personal emergency, the holding period may be waived by the Compliance Officer/ Managing Director/ Whole- Time Director on recommendation of Head of Department after recording in writing his/her reasons in this regard
REPORTING REQUIREMENTS
All Directors / Officers / Designated Employees are required to forward the following details of their securities transactions to the Compliance Officer.
INITIAL DISCLOSURE
All Directors/ Officers/Designated Employees shall be required to forward their details (Including details of their dependents) (As per Form ‘B’ in Schedule II) of all holdings in securities or voting rights held and positions taken in derivatives by such person to the Compliance Officer at the time of joining of the Company within 2 working days of joining/appointment.
CONTINUAL DISCLOSURE
All Directors/ Officers /Designated Employees shall be required to forward following details of their securities transactions: -
(i) Half Yearly Statement in “Form II”, as prescribed in Schedule II of any transactions in securities of the company within 30 days from the end of the half year.
(ii) Annual statement in “Form III”, as prescribed in Schedule II of all holdings in securities within 30 days from the end of the financial year.
Further All Directors/ Officers shall be required to forward following details of their securities transactions to the Company and the Stock Exchange where the securities of the Company are listed:
A statement in “Form D”, as prescribed in Schedule II, if the total number of shares or voting rights held and change in shareholding or voting rights, if there has been a change in such holdings of such person and his dependents from the last disclosure made under these regulations, and the change exceeds Rs. 5 lacs in value or 25,000 shares or 1% of total shareholding or voting rights, whichever is lower within 2 working days of receipt of intimation of allotment of securities/acquisition/ sale of securities or voting rights as the case may be.
The compliance officer shall maintain a record of all the declarations given by All Directors/Officers
/Designated Employees for a minimum period of three years.
The Compliance Officer shall place before the Managing Director / CEO or a Committee notified by the Company, on a monthly basis all the details of the dealing in the securities of the Company by the Directors/Officers /Designated Employees and the accompanying documents that such persons had executed under the pre-dealing procedure as envisaged in this code
PENALTY FOR CONTRAVENTION OF THE CODE
Any Director/Officer/Designated Employee who trades in securities or communicates any information for trading in securities in contravention of this Code of Conduct may be penalised and appropriate action may be taken by the Company.
Directors/Officers/Designated Employees of the company who violate this code of conduct shall also be subject to disciplinary action by the Company, which may include wage freeze, suspension, render ineligible for future participation in employee stock option plans, etc.
The action by the Company shall not preclude SEBI from taking any action in case of violation of SEBI (Prohibition of Insider Trading), Regulations, 1992.
Information to SEBI in case of violation of SEBI (Prohibition of Insider trading), Regulations, 1992
In case the Company observes that there has been a violation of these Regulations, the Company shall inform SEBI.
CODE OF CORPORATE DISCLOSURE PRACTICE
Code of Corporate Disclosure Practices for Prevention of Insider Trading (“Code”) to be Followed by listed companies has been inserted by way of Schedule II in the SEBI (Prohibition of Insider Trading) Regulations 1992 (“SEBI Regulations”).
This Code provides for:
(a) Designation of a senior level officer for coordinating and overseeing timely and adequate disclosures of Price Sensitive Information.
(b) Prompt disclosure of Price Sensitive Information to Stock Exchanges on continuous and immediate basis.
(c) Use various media to achieve maximum reach in dissemination.
(d) Use dedicated internet website.
(e) Timely reporting of shareholdings and changes therein.
(f) Stock Exchange should disseminate, disclosures made by the Companies in a quick and efficient manner through Stock Exchange network as well as its website.
(g) Continuous disclosures made by the Companies should be published by Stock Exchange on its website instantly.
(h) Responding to market rumors’ by verifying or denying and making the right disclosures.
(i) The Code also provides special guidelines for disclosures of Price Sensitive Information to analysts and institutional investors.
The Company shall disseminate all Price Sensitive Information on a continuous and timely manner to Stock Exchanges where the securities are listed and thereafter to the Press. As a good corporate practice, the Price Sensitive Information disclosed to the Stock Exchanges and to the Press may be supplemented by prompt updates on the Company’s Website. The Company may also consider other modes of public disclosure of Price Sensitive Information so as to improve access to the same.
DISCLOSURE TO THE COMPANY
INITIAL DISCLOSURES
The Regulation 13(1) & 13(2) of SEBI Regulations provides for initial disclosures to the Company:
(a) by any person who holds 5% shares and above in the Company (substantial Shareholders), disclosing the number of shares held, within 2 working days of receipt of allotment of shares or acquisition of shares in “Form A”, as prescribed in Schedule II. and
(b) by any person who is a Director or Officer of a listed Company disclosing to the Company in “Form B” , as prescribed in Schedule II, the number of shares held and positions taken in derivatives by such person and his dependents within two working days of becoming a Director or Officer of the Company.
CONTINUOUS DISCLOSURES
Under Regulation 13(3) and 13(4) of SEBI Regulations, continual disclosures are prescribed to be given to the Company within two working days of change in the holding of:
(a) Any substantial shareholder, who hold more than 5% shares, if such change exceeds 2% of total shareholding in the Company in “Form C”, as prescribed in Schedule II.
(b) any person who is a Director or Officer, if the change exceeds Rs. 5,00,000/- in value or 25000 shares or 1% of total shareholding in the Company, whichever is lower in “Form D” , as prescribed in Schedule II.
DISCLOSURES BY COMPANY TO STOCK EXCHANGES
Further, the Company is also required to disclose to all stock exchanges on which it is listed, within two working days of receipt of the initial disclosures and receipt of disclosures made from time to time.
E-FILING
The above disclosures required by the Company may also be made through electronic filing in accordance with the system devised by the Stock Exchange.
This Chapter Learn The Pdf File.