Internal Policy & Control Procedure.

SEBI vide its Notification No. LAD-NRO/GN/2014-15/07/1414 dated 1st September, 2014 has notified the 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 Chapter III, Regulation 15 of the 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, Sentinel Research Private Limited vide SEBI Research Analyst Registration No. INH000027867 (herein referred to as "RA" or "Sentinel Research Private Limited") has formulated this Policy and Control Procedure.

1. i.

   To establish proper internal control and procedures and to govern the dealing and trading by any research analyst.

2. ii.

   To address actual or potential conflict of interest arising from such dealings or trading of securities of the subject company, and to promote objective and reliable research that reflects the unbiased view of the research analyst.

3. iii.

   To prevent the use of research report or research analysis to manipulate the securities market.

4. iv.

   To implement appropriate mechanisms to ensure independence of research activities from other business activities.

5. v.

   To ensure compliance with SEBI rules and regulations — Sentinel Research, being a Research Analyst registered under SEBI, is required to adopt and adhere to such Research Analyst Regulations, subject to the policies and procedures set out herein.

It is mandatory in terms of the Regulations for every Research Analyst to formulate a Code of Conduct. Our policy is only to publish research reports which are impartial, independent, clear, fair and not misleading. Such research may be produced and published only by the analysts working with Sentinel Research Private Limited and as per the Regulations.

This policy is applicable to all research analysts and associates (if any) of Sentinel Research Private Limited — namely, any person primarily responsible for:

1. i.

   preparation or publication of the content of a research report; or

2. ii.

   providing a research report; or

3. iii.

   making 'buy / sell / hold' recommendations; or

4. iv.

   giving a price target; or

5. v.

   offering an opinion concerning a public offer,

with respect to securities that are listed or to be listed on a stock exchange — whether or not such person has the job title of "Research Analyst".

The following defined terms are used throughout this Policy and bear the meanings ascribed below.

The Research Analyst shall maintain an arm's-length relationship between its research activity and other activities. To prevent the misuse of information from research analysts, Sentinel Research Private Limited has adopted a Chinese Wall policy which separates the research activities from its other business activities.

The Research Analyst is responsible for addressing actual or potential conflicts of interest arising from 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.

1. (a)

   Personal trading activities of individuals employed as research analysts shall be monitored, recorded and, wherever necessary, subject to a formal approval process. Research analysts 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.

2. (b)

   Research analysts shall not deal or trade, directly or indirectly, any securities that he reviews in a manner contrary to his outstanding recommendation.

3. (c)

   Research analysts 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 restrictions above shall not apply in case of significant news or event concerning the subject company, or upon an unanticipated significant change in the personal financial circumstances of the research analyst — subject to prior written approval from the Compliance Officer.

4. (d)

   Research analysts shall always adhere to the Conflict of Interests Policy developed and implemented by Sentinel Research Private Limited pursuant to relevant SEBI Circulars. This Policy shall be read, understood and complied with by all Research Analysts in conjunction with the said Conflict of Interest Policy as may be prevalent from time to time.

1. (a)

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

   1. i.

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

   2. ii.

      Ten days immediately following the day on which the securities are priced if the offering is a further public offering.

   Provided that publication within such periods is permitted with prior written approval of legal or compliance personnel.

2. (b)

   A research analyst or research entity who has acted as a manager or co-manager of public offering of securities of a company shall not publish or distribute 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 or any other agreement entered into with the subject company that restricts the sale of securities held by the subject company after completion of public offering — subject to prior written approval of compliance personnel.

3. (c)

   Research analyst or individuals employed as research analysts shall not participate in business activities designed to solicit investment banking, merchant banking or brokerage services business — such as sales pitches and deal road shows.

4. (d)

   Research analyst or individuals employed as research analysts shall not engage in any communication with a current or prospective client in the presence of personnel from investment banking, merchant banking or brokerage services divisions or company management about an investment banking services transaction.

5. (e)

   Investment banking, merchant banking or brokerage services personnel shall not direct research analysts to engage in sales or marketing activities or in any communication with a current or prospective client about such division's transaction — provided that this does not prohibit research analysts from engaging in investor-education activities, including publication of pre-deal research and briefing the views of the research analyst on the transaction to sales or marketing personnel.

6. (f)

   Research analyst or research entity shall have adequate documentary basis, supported by research, for preparing a research report.

7. (g)

   Research analyst or research entity shall not provide any promise or assurance of favourable review in its research report to a company, industry, sector, group of companies or business group as consideration to commence or influence a business relationship or for the receipt of compensation or other benefits.

8. (h)

   Research analyst or research entity shall not issue a research report that is not consistent with the views of the individuals employed as research analysts regarding a subject company. The research entity shall ensure that individuals employed as research analysts are separate from other employees performing sales trading, dealing, corporate finance advisory or any other activity that may affect the independence of research — provided that the research analyst may receive feedback from sales or trading personnel of brokerage division to ascertain the impact of the research report.

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 reports, details of associates, and such other information as is necessary to take an investment decision — including the following.

1. (i)

   Ownership & conflicts of interest — In every research report and public appearance, the research analyst shall disclose:

   1. a.

      Whether the research analyst, associate or relative has any financial interest in the subject company and the nature of such interest.

   2. b.

      Whether the research analyst, associate or relative has actual / beneficial ownership of one per cent or more securities of the subject company at the end of the month immediately preceding the date of publication or public appearance.

   3. c.

      Whether the research analyst, associate or relative has any other material conflict of interest at the time of publication of the research report or public appearance.

2. (ii)

   Compensation — in research reports — The research analyst shall disclose:

   1. a.

      Whether it or its associates have received any compensation from the subject company in the past twelve months.

   2. b.

      Whether it or its associates have managed or co-managed public offering of securities for the subject company in the past twelve months.

   3. c.

      Whether it or its associates have received any compensation for investment banking, merchant banking or brokerage services from the subject company in the past twelve months.

   4. d.

      Whether it or its associates have received any compensation for products or services (other than investment banking, merchant banking or brokerage) from the subject company in the past twelve months.

   5. e.

      Whether it or its associates have received any compensation or other benefits from the subject company or third party in connection with the research report.

3. (iii)

   Compensation — in public appearance — The research analyst shall disclose:

   1. a.

      Whether it or its associates have received any compensation from the subject company in the past twelve months.

   2. b.

      Whether the subject company is or was a client during twelve months preceding the date of distribution of the research report and the types of services provided.

   Provided that no disclosure is required where it would reveal material non-public information regarding specific potential future investment-banking, merchant-banking or brokerage-services transactions of the subject company.

4. (iv)

   Whether the research analyst has served as an officer, director or employee of the subject company.

5. (v)

   Whether the research analyst has been engaged in market-making activity for the subject company.

6. (vi)

   All other disclosures in research reports and public appearances as specified by the Board under any other regulations.

The research analyst shall take steps to ensure that facts in its research reports are based on reliable information, and shall define the terms used in making recommendations — those terms shall be used consistently.

Any research analyst that employs a rating system must clearly define the meaning of each rating — including the time horizon and benchmarks on which the rating is based.

If a research report contains either a rating or price target for a subject company's securities and the research analyst has assigned a rating or price target to the securities for at least one year, such research report shall also provide the graph of daily closing price of the securities for the period assigned, or for a three-year period — whichever is shorter.

A research analyst, including its employees, shall disclose registration status and details of financial interest in the subject company if making a public appearance.

Any person, including an employee, who makes a public appearance or makes a recommendation or offers an opinion concerning securities or a public offer through public media — all provisions of Regulations 16 and 17 shall apply mutatis mutandis. The person shall disclose name, registration status and details of financial interest in the subject company at the time of:

1. i.

   making such recommendation or offering such opinion in personal capacity;

2. ii.

   responding to queries from audiences or journalists in personal capacity;

3. iii.

   communicating the research report or substance of the research report through the public media.

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 who are entitled to receive the research report.

A research analyst who distributes any third-party research report shall review the third-party research report for any untrue statement of material fact or any false or misleading information.

Research analyst or research entity shall maintain the following records:

1. i.

   research report duly signed and dated;

2. ii.

   research recommendation provided;

3. iii.

   rationale for arriving at research recommendation;

4. iv.

   record of public appearance.

All records shall be maintained either in physical or electronic form and preserved for a minimum period of five years. Records required to be signed and maintained in electronic form shall be digitally signed.

The research analyst shall conduct an annual audit in respect of compliance with these regulations from a member of the Institute of Chartered Accountants of India (ICAI) or the Institute of Company Secretaries of India (ICSI).

The research analyst shall appoint a Compliance Officer who shall be 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 the purpose of adherence to the Code of Conduct, and shall assist all analysts and associates (if any) in addressing any clarifications regarding the Regulations and the firm's Code of Conduct.

To discharge his functions effectively, the Compliance Officer shall be adequately empowered and provided with adequate infrastructure. In performance of his duties, the Compliance Officer shall have access to all information and documents relating to the securities of the companies under research. The Compliance Officer shall act as the focal point for dealings with SEBI in connection with all matters relating to compliance and the effective implementation of the Regulations and this Policy.

The research analyst shall redress investor grievances promptly — but not later than twenty-one calendar days from the date of receipt of the grievance — and in such manner as may be specified by the Board.

1. i.

   Research analyst shall maintain an arm's-length relationship between its research activity and other activities.

2. ii.

   Research analyst shall abide by the Code of Conduct as specified in the Third Schedule.

3. iii.

   In case of change in control of the research analyst or research entity, prior approval from the Board shall be taken.

4. iv.

   Research analyst shall furnish to the Board information and reports as may be specified by the Board from time to time.

5. v.

   It shall be the responsibility of the research analyst to ensure that its employees or partners, as applicable, comply with the certification and qualification requirements under Regulation 7 at all times.

1. i.

   Research Analysts are required to observe high standards of integrity and ethical behaviour.

2. ii.

   All research reports must be based on strict standards of truthfulness and fair dealing, and must be presented in a manner such that they are fair, clear and not misleading.

3. iii.

   Analysts are required to ensure that they have a reasonable basis for their analysis and recommendations.

4. iv.

   Analysts who are working on a research project of any listed company shall disclose their shareholding / interest to the Compliance Officer before commencing the research, and submit a statement regarding holdings in securities (including dependents' holdings) in such listed company, and also an undertaking that he or his dependents shall not deal in the securities of the said listed company for a period of 30 days prior and / or 5 days after publication of research report or recommendation.

5. v.

   Analysts shall not deal or trade, directly or indirectly, in securities that he reviews in a manner contrary to his given recommendation.

6. vi.

   Analysts 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.

7. vii.

   Analysts shall have adequate documentary basis supported by research for preparing the research report, and the same is required to be maintained for the prescribed period.

8. viii.

   Analysts are required to obtain NISM certification and keep relevant NISM certifications active at all times.

The full Code of Conduct under the Third Schedule of the SEBI (Research Analysts) Regulations, 2014 — adopted verbatim by Sentinel Research Private Limited — comprises the following eight principles:

1. (a)

   Honesty & Good Faith — Research analyst or research entity shall act honestly and in good faith.

2. (b)

   Diligence — Research analyst or research entity shall act with due skill, care and diligence and shall ensure that the research report is prepared after thorough analysis.

3. (c)

   Conflict of Interest — Research analyst or research entity shall effectively address conflict of interest which may affect the impartiality of its research analysis and research report, and shall make appropriate disclosures to address the same.

4. (d)

   Insider Trading & Front Running — Research analyst or research entity or its employees shall not engage in insider trading or front running or front running of its own research report.

5. (e)

   Confidentiality — Research analyst or research entity or its employees shall maintain confidentiality of report till the report is made public.

6. (f)

   Professional Standard — Research analyst or research entity or its employees engaged in research analysis shall observe high professional standard while preparing research report.

7. (g)

   Compliance — Research analyst or research entity shall comply with all regulatory requirements applicable to the conduct of its business activities.

8. (h)

   Responsibility of Senior Management — The senior management of research analyst or research entity shall bear primary responsibility for ensuring the maintenance of appropriate standards of conduct and adherence to proper procedures.

The research analyst shall bear primary responsibility for ensuring the maintenance of appropriate standards of conduct and adherence to proper procedures. In case of change in control of the Company, prior approval from SEBI shall be taken. The RA shall furnish to the Board information and reports as may be specified by SEBI from time to time.

1. i.

   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.

2. ii.

   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.

3. iii.

   Analysts are not permitted, directly or indirectly, to offer favourable research, specific ratings or specific price targets as consideration or inducement for the receipt of business or compensation.

4. iv.

   Analysts are not permitted, directly or indirectly, to offer or threaten to change research, a rating or price target as consideration or inducement for the receipt of business or compensation.

The above policy is adopted for Research Analyst services to:

1. (I)

   Address actual or potential conflict of interest arising from such dealings or trading of securities of subject company.

2. (II)

   Promote objective and reliable research that reflects the unbiased view of the research analyst.

3. (III)

   Prevent the use of research report or research analysis to manipulate the securities market.

4. (IV)

   Ensure independence of its research activities from its other business activities.