Code of Conduct

Code of Conduct for Executive Directors and the Senior Management.

Executive Members of the Board and the Senior Management, shall

  • Always act in the best interests of the Company and its stakeholders.
  • Adopt the highest standards of personal ethics, integrity, confidentiality and discipline in dealing with all matters relating to the Company.
  • Apply themselves diligently and objectively in discharging their responsibilities and contribute to the conduct of the business and the progress of the Company, and not be associated simultaneously with competing organizations either as a Director or in any managerial or advisory capacity, without the prior approval of the Board.
  • Always adhere and conform to the various statutory and mandatory regulations/guidelines applicable to the operations of the Company avoiding violations or non-conformities.
  • Not derive personal benefit or undue advantages (financial or otherwise) by virtue of their position or relationship with the Company, and for this purpose
    • shall adopt total transparency in their dealings with the Company
    • shall disclose full details of any direct or indirect personal interests in dealings/transactions with the Company.
    • shall not be party to transactions or decisions involving conflict between their personal interest and the Company's interest.
  • Conduct themselves and their activities outside the Company in such manner as not to adversely affect the image or reputation of the Company.
  • Inform the Company immediately if there is any personal development (relating to his/her business/professional activities) which could be incompatible with the level and stature of his position and responsibility with the Company.
  • Bring to the attention of the Board, Chairman or the Managing Director as appropriate, any information or development either within the Company (relating to its employees or other stakeholders) or external, which could impact the Company's operations, and which in the normal course may not have come to the knowledge of the Board/Chairman or Managing Director
  • Ensure that they do not, through words, gestures or otherwise, offend the dignity of any fellow employee in any manner and in particular, do not engage in any act which may be construed as sexual harassment.
  • Always abide by the above Code of Conduct, and shall be accountable to the Board for their actions/violations/defaults
Code of Conduct for Non-Executive Directors.

This Code of Conduct is applicable to all non executive Directors of  HINDUJA GOBAL SOLUTIONS LIMITED ("the Company").

Directors of the Company have a fiduciary responsibility to the Company are also expected to set an example by demonstrating their commitment to the Code of Conduct.

Conflict of Interest: Directors are expected to conduct their activities in such a manner that any actual. potential or perceived conflict of interest situation is avoided.

Confidential Information: Directors are expected to ensure that confidential information relating to the Company, to which they may be privy, is used only for the purposes for which it is intended and in the Company's interest. Directors must ensure that such information is not divulged to persons other than who need to know the information for the aforesaid purpose. In any event, Directors must ensure that the information is not used by them for personal gain or for the benefit of any of the Company's competitors or other parties who, if in possession of the said information, may use it in a manner inconsistent with the Company's interests.

Insider Trading: Directors must ensure that they comply with the SEBI (Prohibition of Insider Trading) Regulations. In particular, Directors must ensure that they do not, by themselves or through third parties, deal in the Company's shares while in possession of material non-public information relating to the Company. Directors must also ensure that they do not divulge such information to third parties, who may use the information to deal in the Company's shares.

Media / Investor Communications: Directors who may be approached by the media or by investors for information relating to the Company are required to refrain from making any comment which is inconsistent with the Company's Media and Investor Communications Policy. While granting interviews to the media or investors which are of a general nature, Directors are required to refrain from making specific references to the Company inconsistent with the said Media and Investor Communications Policy.

Code of Conduct for Independent Directors.

Hinduja Global Solution Limited Share Transactions Code ("Code of Conduct")

Introduction

In simple terms, "insider trading" denotes buying/selling the shares of a company by persons connected with the company, while they are in possession of or having access to unpublished price sensitive information. Persons connected with the company include Directors, Officers, Employees and dependants of the respective entities, consultants, advisers, etc. Unpublished price sensitive information can be defined in simple terms as information relating to a company, which has not yet been made available publicly, but which information when made available publicly, can materially impact the price of the company's shares. Price sensitive information includes periodical financial results, intended declaration of dividends, issue or buy-back of shares, major expansion plans, proposed amalgamations, takeovers, significant changes in the company's plans or operations, etc.

Insider trading can result in certain persons gaining at the expense of others, by virtue of their possession of unpublished price sensitive information. This may result in undermining investor confidence and may adversely impact the development of capital markets.

SEBI Regulations

The Securities and Exchange Board of India (SEBI) has passed the SEBI (Prohibition of Insider Trading) Regulations, 1992, read with the Amendment Regulations , 2008 or any amendments to be made from time to time, to prohibit such insider trading, and these regulations, as amended to date, impose significant responsibilities on companies and persons connected with the company in this respect.

The SEBI Regulations also require all listed companies to frame a Code of Conduct, which would inter-alia require Designated Persons, (which expression would include Directors, Officers, Employees at certain senior levels or such employees and the dependants of the respective entities as may be specifically identified for the purpose of the Code), to:

  • Seek prior clearance before dealing in the company's shares in excess of a specified quantity;
  • Refrain from dealing in the company's shares during certain periods as may be determined in advance or intimated from time to time
  • Refrain from entering into an opposite transaction i.e. sell or buy any number of shares of the Company during the next six months following the prior transaction of buy or sell of shares of the Company
  • Submit periodical information of their dealings in the company's shares

The SEBI Regulations also require the Code of Conduct to be applicable to the dependants of the Designated Persons.

It is important to note that the SEBI Regulations also prohibit an insider from communicating unpublished price sensitive information relating to the Company, to any person. Any communication required to be made in the ordinary course of business or profession or employment, or under any law, is however outside the scope of this prohibition.

A copy of the SEBI Regulations is enclosed for your perusal.

Consequences of Default

Insiders who violate the SEBI Regulations are liable to a penalty of upto Rs.25 crores or three times the amount of profits made out of insider trading whichever is higher (or such amount as may be amended from time to time by SEBI) that may be imposed by SEBI and shall also be punishable with imprisonment for a term which may extend to ten year, or with fine which may extend to twenty-five crore rupees, or with both.(as may be amended by SEBI from time to time.

SEBI may, in addition to the above, also pass directions to the defaulting insider, not to deal in the concerned shares in any particular manner and/or prohibit him from disposing of the concerned shares and/or declaring the concerned transactions as null and void, etc.

The Company is also empowered to take action against the defaulting Officer/ Employee/Director. Such action may include wage freeze, suspension, ineligibility for future participation in employee stock option plans (if applicable), etc. The Company is required to report to SEBI of any violations of the SEBI Regulations.

Your responsibilties in a nutshell

As a designated person (being a Director /Officer/ an employee at certain senior level / an employee specifically identified for the purpose of this Code, and your dependants your responsibilities include the following:

  • Not to buy or sell shares of Hinduja Global Solutions Limited ("HGSL") while in possession of unpublished price sensitive information
  • To furnish details of self and dependants (and changes, if any) - see Para 5
  • To furnish periodical information of transactions of self and dependants - see Para 6
  • Not to buy or sell HGSL shares during "closed periods" - see Para 7
  • All Directors /Officers/designated employees who buy or sell any number of shares of Hinduja Global shall not enter into an opposite transaction i.e. sell or buy any number of shares during next six months following prior transaction. All Directors/Officers / Designated employees shall also not take positions in derivative transactions in the Hinduja Global shares at any time.- see Para 8
  • To obtain prior clearance of the Compliance Officer before buying/selling more than 1000 Hinduja Global shares - see Para 9
  • Persons holding more than 5% of Hinduja Global shares, to make special disclosure of holdings and changes thereto exceeding certain limits- see Para 10
  • Directors /Officers of the Company and their Dependants to make special disclosure of initial holdings of shares or positions taken in derivatives and changes thereto exceeding certain limits - see Para 11
  • Maintain strict confidentiality of price sensitive information - see Para 12
Furnish details of Self and Dependants

Every Designated Person is required to furnish in Hinduja Global Form 1, the names of his dependants, his relationship with them and the initial holdings in Hinduja Global shares and position taken in derivatives of self and dependants.

For the purpose of this Code, "dependants" includes the following:

  • Spouse (whether or not the spouse is financially independent)
  • Dependent children
  • Dependent parents
  • Any other dependant as the designated person may declare

Newly appointed Directors and Officers of the Company are required to make initial disclosure of holdings and position taken in derivatives of self and dependants , in SEBI Form B

Furnish periodical information of transactions of self and dependants

Every Designated Person is required to make half-yearly disclosure in Hinduja Global Form 2 of all transactions in Hinduja Global shares, entered into by self and by dependants.

The schedule for disclosure is as under:

  • Not later than 15th October, for transactions relating to the period 1st April to 30th September
  • Not later than 15th April, for transactions relating to the period 1st October to 31st March

In case there are no transactions during the half-year concerned, a NIL statement needs to be submitted.

Not to buy or sell Hinduja Global shares during closed periods

Every designated person and their dependants, are prohibited from buying or selling Hinduja Global shares during "closed periods". In case of ESOPs, exercise of option is allowed during closed periods. However, sale of shares allotted on exercise of ESOPs shall not be allowed during closed periods.

A closed period is as under or may be event-based (and therefore fixed on the occurrence or likelihood of occurrence of any special event).

Closed Period at the time of consideration of Financial Results of the Company /HGSL

From the date of intimation of the Board Meeting to be held for consideration of unaudited financial results of the Company/HGSL for the quarter ending June, September, December, March and for consideration of audited financial results of the Company/HGSL for the entire financial year April –March including audited results of the Company /HGSL for the last quarter ending March is given to the Stock Exchange/s till the expiry of one calendar day after the conclusion of the Board meeting.

In each case, a communication as regards 'closed period' will be given to the designated persons.

Event based closed periods will necessarily be notified by the Compliance Officer, as per requirement, by way of a circular. Typically, events which may require notification of event based closed periods include intended declaration of interim dividend, proposal for issue of bonus shares, proposal for buy-back of shares or issue of rights shares or proposal for merger, etc.

For Designated Persons not directly involved in the management decision giving rise to the event based closed period, the closed period will commence 2 working days after the issue of the circular. For designated persons directly involved in the decision, the closed period will however commence immediately on the taking of the relevant management decision. The closed period will end 1 calendar day after the date of the Board Meeting to consider the relevant management decision. The date of the Board Meeting will be notified for the information of Designated Persons.

It may be noted that the 2 working day grace period provided to certain designated persons in the above paragraph is to provide for transit related delay of receipt of the circular, so as to take care of any inadvertent transaction that may have taken place in good faith in the meantime.

Special closed periods for certain employees: Since special events which give rise to event based closed periods, may require certain pre-work involving certain concerned employees, such concerned employees may be subject to an additional closed period, commencing when they are assigned the required pre-work responsibility. This would be notified to the concerned employees and this extra closed period would apply only to the concerned employees and the management personnel involved in the decision. Such employees/management personnel are required not to disclose the fact of the special closed period to others, so that employees are generally not made aware that some special event is under consideration.

Illustration: On 15th January, the CEO directs the CFO to prepare a proposal for payment of interim dividend, with the help of the Head - Accounts. The event based closed period for the above three persons commences on 15th January. On 18th January, the CEO discusses the proposal with the Chairman and a management decision is taken to place the proposal before the Board. The same day, the Company Secretary is directed to issue notices to the Directors and the Stock Exchanges that a Board Meeting for the purpose of considering interim dividend would be held on 30th January. The event based closed period for the Chairman and the Company Secretary commences on 18th January. The Company Secretary issues the aforesaid notices on 19th January and circulates the information. The event based closed period for all other designated persons would commence on 22nd January so as to provide for a two days grace period for receipt of the notice/circular. However, designated persons who receive the notice/circular/information during this 2 days grace period are expected to act in good faith and not misuse the same.

It must be appreciated that the above illustration may be an over-simplification and every special event (including the above) may involve different persons and peculiar circumstances specific to that event, which cannot all be encapsulated by way of examples. The above is an attempt to illustrate the principle involved.

Not to enter in to opposite transaction i.e. Sell or buy any number of shares during next six months following prior transaction

All Directors /Officers/designated employees who buy or sell any number of shares of Hinduja Global shall not enter into an opposite transaction i.e. sell or buy any number of shares during next six months following prior transaction. All Directors/Officers / Designated employees shall also not take positions in derivative transactions in the Hinduja Global shares 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 commence when the securities are actually allotted. The holding period cannot be relaxed by the Compliance Officer for any reasons.

It needs to be specially noted that "day trading" by designated persons in Hinduja Global shares is effectively prohibited.

Obtain prior clearance of the Compliance Officer before buying / selling more than 1000 Hinduja Global shares

Every designated person and their dependents is required to obtain prior clearance of the Compliance Officer in Hinduja Global Form 3, before he or any of his dependants buys or sells over 1000 Hinduja Global shares in a single transaction or in a series of transactions within 7 calendar days of each other.

Special attention of designated persons is drawn to the declaration and undertaking which forms an important and integral part of the application for pre-clearance.

The pre-clearance would be granted not later than the close of business hours of the next working day following the receipt of the application in Hinduja Global Form 3. A pre-clearance number would ordinarily be given for administrative purposes. In the event the pre-clearance is neither granted nor refused within this period, the pre-clearance is deemed to be granted.

Illustration 1: Mr. ABC proposes to purchase 1001 Hinduja Global shares on 1st September. This requires pre-clearance since it exceeds the threshold limit of 1000 Hinduja Global shares.

If in this illustration Mr. ABC proposes to purchase 500 Hinduja Global shares on 1st September, and Mrs. ABC proposes to purchase 501 Hinduja Global shares on the same date, both transactions will require pre-clearance, since the aggregate exceeds the threshold limit of 1000 Hinduja Global shares.

Illustration 2: Mr. ABC proposes to purchase 500 Hinduja Global shares on 1st September. Mrs. ABC proposes to purchase 501 Hinduja Global shares on 5th September. The second transaction requires pre-clearance since it falls within 7 calendar days of the first transaction and the aggregate exceeds the threshold limit of 1000 Hinduja Global shares

Illustration 3: Mr. ABC proposes to purchase 500 Hinduja Global shares on 1st September. Mrs. ABC proposes to purchase 500 Hinduja Global shares on 5th September. Neither transaction requires pre-clearance since the aggregate does not exceed the threshold limit of 1000 Hinduja Global shares.

In this illustration, however, if Master ABC (a dependant of Mr. ABC) proposes to purchase 1 Hinduja Global share on 10th September, then this third transaction would require pre-clearance, since it would fall within 7 calendar days of the second transaction and the aggregate of all such transactions within 7 calendar days of each other, exceed the threshold limit of 1000 Hinduja Global shares

A pre-clearance, once granted, is valid for a period of 7 calendar days after the date of grant. If the designated person does not transact the pre-cleared transaction within this period, he is required to apply once again, for pre-clearance.

It may be noted that if a closed period commences during the 7 calendar days period following the grant of pre-clearance, the validity of the pre-clearance comes to an end, since no transaction (whether pre-cleared or not) can be made by designated persons or their dependants, during closed periods.

Illustration 4: Mr. ABC applies for pre-clearance on 11th October and pre-clearance is granted on 12th October. Although the pre-clearance is normally valid for 7 calendar days after the date of grant, in this case, the pre-clearance will be valid only for 3 calendar days, i.e. upto 15th October, since a fixed closed period commences on 15th October

It is extremely important for designated persons to note that transactions made just prior to the commencement of closed periods may be subject to extra scrutiny by regulatory authorities, in the event of any investigation. Designated persons should care to ensure that they do not consummate any transaction if they are in possession of unpublished price sensitive information. Please also refer to the declaration / undertaking reproduced in Hinduja Global Form 3 in this connection. It may be further noted that the threshold limit of 1000 would apply in respect of only one type of transaction, i.e. buy or sell.

Illustration 5: Mr. ABC buys 800 Hinduja Global shares on 1st September and sells 400 shares on the same date. The total number of shares involved is 1200, which is above the threshold limit of 1000. The requirement for pre-clearance is however not attracted, since the transactions are not of the same type i.e. one is a sale transaction and the other is a purchase transaction.

In this illustration, Mr. ABC would however also need to ensure compliance with the minimum holding period of six months as mentioned in Para 8 above. He should ensure that the 400 shares sold by him on 1st September, are out of his pre-existing holdings, which were purchased by him at least six months prior to the date of sale. He should also ensure that he holds the 800 shares purchased by him on 1st September, for a period of six months.

Persons holding more than 5% Hinduja Global shares to make special disclosure of holding and changes thereto exceeding certain limits

Any person who holds more than 5% of Hinduja Global shares is required to disclose his holdings to the Company, in SEBI Form A, within 2 working days of becoming such holder. ( 2 working days apply to both initial holding and changes for this category of holder)

Any subsequent increase or decrease in shareholding, exceeding 2% of Hinduja Global shares, is also required to disclosed to the Company in SEBI Form C, within 2 working days of such increase or decrease even if such change results in shareholding falling below 5%.

Special attention is drawn to Clauses 13(1), 13(3) and 13(5) of the SEBI Regulations.

Directors, officers and dependants to make special disclosure of initial holding and changes thereto exceeding certain limits

As mentioned in Para 5 above, newly appointed Directors and Officers of the Company are required to make initial disclosure of holdings of self and their dependants of the shares of the Company and positions taken in derivatives by such persons and their dependants, in SEBI Form B to the Company as well as to the Stock Exchanges within 2 working days of appointment

On an ongoing basis, Directors, Officers need to disclose the number of shares held and change in their shareholding and dependants from the last disclosure as mentioned in aforesaid para, and such change exceeds Rs. 5 lakhs in value or 25000 shares or 1% of the total shareholding or voting rights HINDUJA GLOBAL shares whichever is lower, in SEBI Form D within 2 working days of the transaction.

Special attention is drawn to Clauses 13(2), 13(4) and 13(5) of the SEBI Regulations.

Maintain strict confidentiality of price sensitive information

Every designated person is required to maintain strict confidentiality of unpublished price sensitive information and is prohibited from communicating or counseling or procuring directly or indirectly such information to any person who while in possession of such unpublished information shall not deal in the shares of the Company. Special attention is drawn to Clause 3(ii) of the SEBI Regulations. Any communication required to be made in the ordinary course of business or profession or employment, or under any law, is however outside the scope of this prohibition.

Price sensitive information should be disclosed only to those within the company who need the information to discharge their duty. Files containing confidential information (both physical as well as computer files) are required to kept secure.

What happens on retirement, etc.

If a person ceases to be a designated person on retirement, resignation, etc, he would thereupon cease to be subject to this Code of Conduct. However, it must be noted that such person would nevertheless continue to be an Insider for a period of 6 months from separation, and would therefore continue to be subject to the SEBI Regulations during this period.

Conclusion

As a designated person, you are required to familiarize yourself with the SEBI Regulations and comply with the same, as well as with this Code of Conduct., both in letter and in spirit. You are also required to ensure compliance by your dependants.

If you need any assistance or clarifications, kindly contact the Compliance Officer,

Mr. Makarand Dewal
Company Secretary
Tel No.: (022) 2496 0707
Fax: (022) 2497 4208
Email: makarand.dewal@teamhgs.com