Compliance · 11

Internal Policy & Control Procedure

// LAST UPDATED: [DATE] · APPLIES TO rasaumya.com

IN TERMS OF SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014

Introduction

SEBI vide its Notification No. LAD-NRO/GN/2014-15/07/1414 dated 1st September, 2014 has notified SEBI (Research Analysts) Regulations, 2014. The Securities & Exchange Board of India (SEBI) had formulated the SEBI (Research Analyst) Regulations, 2014 under the powers conferred on it under the SEBI Act, 1992. These regulations came into force with effect from 1st December 2014. Research analyst is required to follow the code formulated by us both in letter and spirit. These regulations have been introduced by SEBI with the objective of fostering transparency in security research and provide the investors with more reliable and useful information to make investment decisions.

According to the Regulation, Chapter III of the Regulation 15 of SEBI (Research Analysts) Regulations, 2014 the entity shall have written internal policies and control procedures governing the dealing and trading by any research analyst. In compliance with the said Regulation RA Saumya Agarwal vide SEBI Research Analyst Registration No. INH000027496 (herein referred to as "RA" or "RA Saumya Agarwal") has formulated this policy and control procedure.

Objective

To establish proper internal control and procedures and to govern the dealing and trading by any research analyst.
To address actual or potential conflict of interest arising from such dealings or trading of securities of Subject RA and promoting objective and reliable research that reflects the unbiased view of research analyst.
Preventing the use of research report or research analysis to manipulate the securities market.
To implement appropriate mechanisms to ensure independence of its research activities from its other business activities.
To ensure compliance with SEBI rules and regulations, we being the Research Analyst registered under SEBI, is required to adopt and adhere such Research Analyst Regulation, subject to the following policies and procedures.

It is mandatory in terms of the Regulations for every Research Analyst to formulate a Code of Conduct. In order to comply with the mandatory requirements of the Regulations, it was necessary to formulate a specific Code of Conduct. Our policy is only to publish research report which is impartial, independent, clear, fair and not misleading. Such research may be produced and published only by the analysts working with the RA Saumya Agarwal and as per the regulations.

Applicability

This policy is applicable to all research analysts and associates, if any of the RA Saumya Agarwal — Research Analyst i.e. a person primarily responsible for preparation or publication of the content of the research report; or providing a research report or making 'buy/sell/hold' recommendation or giving price target or offering an opinion concerning public offer with respect to securities that are listed or to be listed in a Stock Exchange whether or not such person has the job title of 'Research Analyst'.

Definitions

Capitalised terms used in this policy carry the meanings assigned to them under the SEBI (Research Analysts) Regulations, 2014, including (among others): "Act", "associate", "Board", "certificate", "change in control", "consideration", "family of an individual research analyst", "family of client", "independent research analyst", "investment adviser", "merchant banking or investment banking or brokerage services", "NISM", "other business activity or employment", "part-time research analyst", "persons associated with research services", "price target", "principal officer", "public appearance", "public media", "public offer", "relative", "research analyst", "research entity", "research report", "research services", "securities", "significant news or event", "subject company", "stock exchange", "third party research report", and "trading calls".

The full statutory definitions are as set out in Regulation 2 of the SEBI (Research Analysts) Regulations, 2014, and are adopted herein by reference.

Management of Conflict of Interests & Disclosure Requirements

The Research Analyst shall maintain an arms-length relationship between its research activity and other activities. To prevent the misuse of information from Research Analysts, RA Saumya Agarwal has adopted a 'Chinese Wall' policy which separates the research activities from its other business activities. The Employees working as Research Analysts shall not communicate any information to anyone in other departments. The employees in Research Analysts are physically segregated from employees of other departments. Demarcations of the Research Analyst departments are implemented by the Company.

The Research Analyst is responsible for addressing actual or potential conflicts of interest arising from such dealings or trading of securities of the subject company, promoting objective and reliable research that reflects the unbiased view of the research analyst, and preventing the use of research reports or research analysis to manipulate the securities market.

Limitations on Trading by Research Analysts

Personal trading activities of the individuals employed as research analysts shall be monitored, recorded and wherever necessary, shall be subject to a formal approval process.
Research analyst shall not deal or trade any securities that the research analyst recommends or follows within 30 days before and 5 days after the publication of a research report on the subject company.
Research analyst shall not deal or trade directly or indirectly any securities that he reviews in a manner contrary to his outstanding recommendation.
Research analyst shall not purchase or receive securities of the issuer before the issuer's initial public offering, if the issuer is principally engaged in the same types of business as companies that the research analyst follows or recommends.

The above restrictions to trade/deal in securities shall not be applicable in case of significant news or event concerning the subject company or based upon an unanticipated significant change in the personal financial circumstances of the research analyst, subject to prior written approval from the Compliance Officer.

Further, research analyst shall always adhere to the Conflict of Interest Policy developed and implemented by RA Saumya Agarwal pursuant to relevant SEBI Circulars, to be read in conjunction with this policy as prevalent from time to time.

Limitation on Publication of Research Report, Public Appearance, Conduct of Business

Research analyst shall not publish or distribute research report or research analysis or make public appearance regarding a subject company within a period of:

Forty days immediately following the day on which the securities are priced if the offering is an initial public offering; or
Ten days immediately following the day on which the securities are priced if the offering is a further public offering;

subject to prior written approval of legal or compliance personnel as specified in the internal policies and procedures. The date of the offering refers to the first date on which the security was offered to the public.

A research analyst who has acted as a manager or co-manager of a public offering shall not publish a research report or make a public appearance concerning that company within fifteen days prior to and fifteen days after the expiration/waiver/termination of a lock-up agreement, subject to prior written compliance approval.

Research analysts shall not: participate in business activities designed to solicit investment/merchant banking or brokerage business (such as sales pitches and deal road shows); engage in communication with clients in the presence of investment-banking personnel about such transactions; nor be directed by such divisions to engage in sales or marketing. This does not prohibit investor education activities including publication of pre-deal research.

Research analyst shall have adequate documentary basis, supported by research, for preparing a research report; shall not provide any promise of favourable review as consideration for a business relationship or compensation; and shall not issue a research report inconsistent with the analyst's views regarding a subject company. Research analysts shall be kept separate from sales/trading/dealing/corporate-finance functions that may affect independence.

Disclosures in Research Reports

A research analyst shall disclose all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research, details of associates, and such other information as is necessary to take an investment decision, including:

Ownership & material conflicts of interest

Whether the research analyst or associate or relative has any financial interest in the subject company and its nature;
Whether they have actual/beneficial ownership of one per cent or more securities of the subject company at the end of the month immediately preceding publication;
Whether there is any other material conflict of interest at the time of publication or public appearance.

Receipt of compensation (past twelve months)

Compensation from the subject company; managing/co-managing public offerings; compensation for investment/merchant banking or brokerage services; compensation for other products or services; and any compensation or benefits from the subject company or third party in connection with the report.

Further disclosures

Whether the research analyst has served as an officer, director or employee of the subject company;
Whether the research analyst has been engaged in market making activity for the subject company;
All other disclosures as specified by the Board under any other regulations.

Contents of Research Report

Research analyst shall ensure that facts in its research reports are based on reliable information and shall define the terms used in making recommendations, used consistently. Where a rating system is employed, the meaning of each rating, including time horizon and benchmarks, shall be clearly defined. If a report contains a rating or price target and a rating/target has been assigned for at least one year, the report shall provide a graph of daily closing prices for the period assigned or for a three-year period, whichever is shorter.

Recommendations in Public Media

Research analyst including its employee shall disclose the registration status and details of financial interest in the subject company when making a public appearance. Where any person makes a public appearance or offers an opinion through public media, Regulations 16 and 17 apply mutatis mutandis, and the person shall disclose name, registration status and financial interest when making such recommendation in personal capacity, responding to queries, or communicating the substance of the research report through public media.

Distribution of Research Reports

A research report shall not be made available selectively to internal trading personnel or a particular client or class of clients in advance of other clients entitled to receive it. A research analyst who distributes any third-party research report shall review it for any untrue statement of material fact or any false or misleading information.

Maintenance of Records

The Research Analyst shall maintain: (i) research report duly signed and dated; (ii) research recommendation provided; (iii) rationale for arriving at the research recommendation; and (iv) record of public appearance. All records shall be maintained in physical or electronic form and preserved for a minimum period of five years; electronic records required to be signed shall be digitally signed.

Audit

Research analyst shall conduct annual audit in respect of compliance with these regulations from a member of the Institute of Chartered Accountants of India or the Institute of Company Secretaries of India.

Appointment of Compliance Officer

Research analyst shall appoint a compliance officer responsible for monitoring compliance with the provisions of the Act, these regulations and circulars issued by the Board. The Compliance Officer shall maintain a record for adherence to the Code of Conduct and assist all analysts and associates with clarifications. The Compliance Officer shall be adequately empowered with access to all relevant information and documents, and shall act as the focal point for dealings with SEBI on compliance matters.

Redressal of Investor Grievances

The Research Analyst shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance, in such manner as may be specified by the Board. See also the Redressal of Grievance page.

General Responsibility

Research analyst shall maintain an arms-length relationship between its research activity and other activities.
Research analyst shall abide by the Code of Conduct as specified in the Third Schedule.
In case of change in control of the research analyst, prior approval from the Board shall be taken.
Research analyst shall furnish to the Board information and reports as specified from time to time.
It is the responsibility of the research analyst to ensure that its employees or partners comply with the certification and qualification requirements under regulation 7 at all times.

Obligations for Analysts at a Glance

Observe high standards of integrity and ethical behaviour.
Ensure all research reports are based on strict standards of truthfulness and fair dealing, and are fair, clear and not misleading.
Ensure a reasonable basis for analysis and recommendations.
Disclose shareholding/interest to the Compliance Officer before commencing research on a listed company, with an undertaking not to deal in that company's securities for 30 days prior and 5 days after publication.
Not deal or trade contrary to a given recommendation.
Not purchase securities of an issuer before its IPO where the issuer is in the same business as companies the analyst follows/recommends.
Maintain adequate documentary basis supported by research.
Obtain NISM certification and keep relevant NISM certification active at all times.

Code of Conduct

The Research Analyst shall abide by the Code of Conduct: Honesty and Good Faith; Diligence; Conflict of Interest; Insider Trading or Front Running; Confidentiality; Professional Standard; Compliance; and Responsibility of Senior Management. The full text is set out on the Code of Conduct page. The senior management shall bear primary responsibility for maintaining appropriate standards of conduct and adherence to proper procedures. In case of change in control, prior approval from SEBI shall be taken.

Inappropriate Influences

Analysts are not permitted to accept any remuneration or other benefit from the issuer or any other party in respect of the publication of research.
Analysts are not permitted to offer or accept any inducement for the production of favourable research, including selective disclosure by an issuer of material information not generally available.
Analysts are not permitted to directly or indirectly offer favourable research, specific ratings or specific price targets as consideration or inducement for the receipt of business or compensation.
Analysts are not permitted to directly or indirectly offer or threaten to change research, a rating or price target as consideration or inducement for the receipt of business or compensation.

This policy is adopted to address actual or potential conflicts of interest; promote objective and reliable research reflecting the unbiased view of the research analyst; prevent the use of research to manipulate the securities market; and ensure independence of research activities from other business activities.

This policy has been considered, implemented and circulated by RA Saumya Agarwal dated [DATE — TO BE FILLED].