CFM ASSET RECONSTRUCTION PRIVATE LIMITED

TRADING CODE OF CONDUCT

Last Approved on: 26th March, 2021

 CFM ASSET RECONSTRUCTION PRIVATE LIMITED
TRADING CODE OF CONDUCT

1. Introduction
CFM Asset Reconstruction Private Limited (‘CFM ARC’), a Company limited by shares
having its registered office at Block No. A/1003, West Gate, Near YMCA Club, Sur No. 835/1+3,
S.G. Highway, Makarba, Ahmedabad- 380051 and Corporate office at 1st Floor, Wakefield
House, Sprott Road, Ballard Estate, Mumbai 400 038 is incorporated under Companies Act,
2013 on July 30, 2015.
CFM ARC has been granted a Certificate of Registration by Reserve Bank of India (‘RBI’)
to commence the business of securitization of asset reconstruction under section 3 of The
Securitization and Reconstruction Of Financial Assets and Enforcement Of Security
Interest Act, 2002 (Act 54 of 2002) (hereinafter referred to as the ‘SARFAESI Act’)
subject to the conditions given in the letter DNBR. PD. NO 168/ 26.01.019 / 2016-17 dated
August 3, 2016.

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 2. Background

Purpose of the Code of Conduct:

The Securities and Exchange Board of India (SEBI) has notified the SEBI (Prohibition of Insider
Trading) Regulations, 2015 (hereinafter referred to as “Regulations”) to be followed by Listed
Companies, Market Intermediaries and every other person required to handle unpublished
price sensitive information, in order to prevent such entities and designated person connected
to such entities and their immediate relatives from dealing in securities on the basis of
unpublished price sensitive information.

This Code of Conduct seeks to put in place appropriate systems to ensure segregation of work
areas of personnel handling price sensitive information as well as adopt a “Chinese Wall”
procedure. It also ensures that persons connected to CFM Asset Reconstruction Private Limited
(CFM ARC) do not deal in securities on the basis of unpublished price sensitive information.

OBJECTIVE:

The objective of this Code is not to discourage employees from buying or selling shares, but
to:
1) Ensure that the Designated Persons do not take advantage of unpublished price
sensitive information which is received by them during the regular course of their
duties.
2) Designated Persons do not indulge in manipulative transactions.
3) Encourage long-term investments by employees.
4) Discourage employees from engaging in personal trading on a scale or of a kind that
would distract them from their daily responsibility.

Applicability:

This Code is applicable to all employees of CFM ARC and Connected Persons as defined in this
Code and shall not be applicable to any of the Independent Directors of the Company.

● All Employees of CFM ARC are required to read this document and comply with its
provisions. Failure to comply with any of these provisions, shall constitute grounds
for action, as deemed fit by the Board of Directors, including reference to the
relevant Government/ Regulatory authorities.
● CFM ARC may, from time to time, amend this Code or stipulate additional
conditions, depending upon the situation and change in the internal policies to get
the same implemented. All employees are bound by such changes/additions in the
Code as and when it comes into force.
● Even when employee ceases to be in employment, for whatever reason, he/she
must maintain the secrecy of confidential information learned during their
employment or affiliation.

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1. Definitions:

“Act” means the Securities and Exchange Board of India Act, 1992.

“Associate Company & Subsidiary Company” shall have the same meaning as
assigned under the Companies Act, 2013.

“Code” or “this Code” shall mean the ‘Code of Conduct to regulate, monitor report,
and trade in Securities as amended from time to time.

“Company” or “the Company” or “CFM ARC” means ‘CFM Asset Reconstruction

Private Limited’.

“Compliance Officer” means the Compliance Officer in terms of the Regulations.

"Connected Person" means -

i) Any person who is or has during the six months prior to the concerned act been
associated with a company, directly or indirectly, in any capacity including by reason
of frequent communication with its officers or by being in any contractual, fiduciary
or employment relationship or by being a director, officer or an employee of the
company or holds any position including a professional or business relationship
between himself and the company whether temporary or permanent, that allows
such person, directly or indirectly, access to Unpublished Price Sensitive Information
or is reasonably expected to allow such access.

ii) Without prejudice to the generality of the foregoing, the persons falling within the
following categories shall be deemed to be connected persons unless the contrary is
established, -

a) an immediate relative of connected persons specified in clause (i); or

b) a holding company or associate company or subsidiary company; or

c) a concern, firm, trust, Hindu undivided family, company or association of

persons wherein a director of a company or his immediate relative or
banker of the company, has more than ten per cent of the holding or
interest.

“Designated Employee(s)” shall mean all employees (management and executive

scale) and Directors of CFM ARC.

“Designated Person(s)” shall mean the Designated Employees and the Connected
Persons, not being an Independent Director of the Company, its Subsidiary Company
and Associate Company.

“Immediate Relative” means the spouse of a person and includes parent, sibling,
and child of such person or of the spouse, any of whom is either dependent financially
on such person, or consults such person in taking decisions relating to trading in
Securities;

“Insider” means any person who is:-

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 i) a connected person; or
ii) in possession of or having access to Unpublished Price Sensitive Information.

“Insider Trading Regulations” means the Securities and Exchange Board of India
(Prohibition of Insider Trading Regulations), 2015 as amended from time to time.

“Securities”— include
shares, scrips, stocks, bonds, debentures, debenture stock or other marketable
securities of a like nature in or of any incorporated company or other body
corporate; derivative; units or any other instrument issued by any collective investment
scheme to the investors in such schemes, security receipt as defined in clause (zg) of
section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002, units or any other such instrument issued to the investors
under any mutual fund scheme, “securities" shall not include any unit linked insurance
policy or scrips or any such instrument or unit, by whatever name called, which provides
a combined benefit risk on the life of the persons and investment by such persons and
issued by an insurer referred to in clause (9) of section 2 of the Insurance Act, 1938)
any certificate or instrument (by whatever name called), issued to an investor by any
issuer being a special purpose distinct entity which possesses any debt or receivable,
including mortgage debt, assigned to such entity, and acknowledging beneficial
interest of such investor in such debt or receivable, including mortgage debt, as the
case may be, Government securities, such other instruments as may be declared by
the Central Government to be securities; and rights or interest in securities;

“Specified Persons” means the Directors, connected persons, the insiders, the
Designated Employees and the promoters and immediate relatives’ are collectively
referred to as Specified Persons.

"Trading" means and includes subscribing, buying, selling, dealing, or agreeing to

subscribe, buy, sell, deal in any securities, and "trade" shall be construed accordingly.

“Unpublished Price Sensitive Information” or “UPSI” means any information,

relating to the company or its securities, directly or indirectly, that is not generally
available which upon becoming generally available, is likely to materially affect the price
of the securities and shall, ordinarily including but not restricted to, information relating
to the following:
(i) financial results;
(ii) dividends;
(iii) change in capital structure;
(iv) mergers, de‐mergers, acquisitions, delisting, disposals and expansion of
business and such other transactions;
(v) changes in key managerial personnel;

Words and expressions used and not defined in these regulations but defined in the
Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities Contracts
(Regulation) Act, 1956 (42 of 1956), the Depositories Act, 1996 (22 of 1996) or the
Companies Act, 2013 (18 of 2013) and rules and regulations made thereunder shall
have the meanings respectively assigned to them in those legislation.

2. Appointment of Compliance Officer

The Compliance Officer shall for the purpose of this Code, be construed to mean the

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 Compliance Officer for CFM ARC who is financially literate and capable of appreciating
requirements for legal and regulatory compliance under these regulations who shall
report to the Board of Directors of the Company. The Compliance Officer would be
designated to administer the Code of Conduct and other requirements under the
Regulations.

3. Prevention of misuse of “Unpublished Price Sensitive Information”

Employees and connected persons designated on the basis of their functional role
("designated persons") in the Company shall be governed by this Code of conduct
governing dealing in securities.

No Designated Employee shall communicate UPSI to any other person except on a need-
to-know basis for furtherance of the Insider’s legitimate purposes, performance of duties
or discharge of legal obligations.

The term “legitimate purpose” shall include sharing of Unpublished Price Sensitive
Information in the ordinary course of business with Company’s partners, Investors,
lenders including prospective lenders, customers, suppliers, merchant bankers, legal
advisors, auditors, insolvency professionals, credit rating agencies or other advisors,
service providers or consultants, Enforcement agencies, regulators or any government
body or agencies provided that such sharing has not been carried out to evade or
circumvent the prohibitions stated in this Code and in the Regulations;

Any other employee or other persons with whom Unpublished Price Sensitive
Information is shared for legitimate purposes shall maintain confidentiality of such
Unpublished Price Sensitive Information.

4. Trading Restrictions

Restricted List of Securities:

● No insider shall trade in securities that are listed or proposed to be listed on a

stock exchange when in possession of UPSI.
● This restriction shall also be applicable to all immediate relatives of employees.
● Restricted list shall cover securities of those Companies and qualified Institutional
buyers with whom the Designated Person(s) of the Company are dealing or are
communicating.
● The Restricted List shall be maintained by the Compliance Officer.
● As the restricted list is highly confidential information, it shall not be communicated
directly or indirectly to anyone besides authorised personnel of the concerned
departments of the company.
● No approval for the trade shall be granted in the securities covered under
restricted list.

5. Reporting Requirements for transactions in securities

All Employees / Designated Employee shall be required to make the Initial Disclosure
and Continual Disclosure of the shares of the Company held by them and their
dependent family members, to the Compliance Officer.

Since, the Company is not a listed entity, currently none of the Specified Person are

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 required to provide any disclosures to the Compliance Officer.

6. Penalty for contravention of the code of conduct

Every Specified Person shall be individually responsible for complying with the
provisions of the Code (including to the extent the provisions hereof are applicable to
his/her dependents).

Any Specified Person who trades in securities or communicates any information for
trading in securities, in contravention of this Code may be penalised and appropriate
action may be taken by the Company.

Specified Persons who violate the Code shall also be subject to disciplinary action by
the Company, which may include salary freeze, suspension, etc.

Any employee who trades in securities on the Restricted List shall indemnify and hold
harmless the Company for any consequences thereof. In addition to termination of
employment, if affected, such employee will personally bear the consequences of
default, whether monetary or not.

The action by the Company shall not preclude SEBI from taking any action against any
Designated Persons in case of violation of SEBI (Prohibition of Insider Trading)
Regulations, 2015.

7. Reports to Board of Directors

The Compliance Officer shall provide reports to the Board of Directors annually with
regards to compliance with this Code.

8. General

A copy of the Regulations is available from the office of the Compliance Officer.
Employees are advised to acquaint themselves with their obligations under the
Regulations. The Compliance Officer may be contacted for any clarification / assistance
that may be necessary.

The Management reserves the right to add, alter or edit any of the above terms with
or without prior intimation and the same shall be binding from time to time.

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Annexure on Amendments, Renewal of Policies, etc.

Sr No. Particulars (Amendment/ Date Approved by

Renewal etc.)
1 Approval and Adoption 26th March, 2021 Board of Directors

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