Insider Trading - Caution

ITC Code of Conduct for Prevention of Insider Trading
As revised and approved by the Board of Directors on 19th January, 2009

The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, has been amended from time to time (hereinafter referred to as the 'Regulations’) in terms of which the Company is required to frame a Code of Conduct for prevention of insider trading by employees of the Company, including the Directors, in relation to the securities of the Company.

In line with the said Regulations, a Code of Conduct (hereinafter referred to as the ‘Code’) was adopted by the Board of Directors of the Company at its meeting held on 27th March, 2002 and thereafter amended from time to time with the approval of the Board. The Code, as revised with effect from 19th January, 2009, and thereafter amended on 17th May, 2013, is given below:

For the purpose of the Code:

1. ‘Securities’ shall include shares of the Company and related stock market derivatives
2. ‘Designated Employees’ shall cover the following:
   
   
   1. Directors, Executive and Non-Executive;
   2. Managers in the following Grades across Divisions / SBUs of the Company:

   Division / SBU		Grade / Designation
   Corporate	:	Grade B & above, General Counsel, Sr. VP-Corporate Affairs, VP-Corporate Communications, Chief Scientist - Research & Technology Innovation
   India Tobacco Division	:	Grade B & above, Senior Specialist, Chief Scientist
   Hotels Division	:	Grade B & above, Grades 20 & 21, Divisional Financial Controller, Senior Legal Advisor, VP-Quality, Learning and Six Sigma
   Agri Business Division	:	Grade B & above, Grade IB10, Chief Trader
   Agri Business Division -ILTD		Grade B & above
   Paperboards & Specialty Papers Division	:	Grade B & above, Grade PP12
   Foods Division, Lifestyle Retailing Business Division, Packaging & Printing SBU, Education & Stationery Products SBU, Agarbattis SBU, Matches SBU	:	Grade B & above
   Personal Care Products SBU	:	Grade B & above, Chief Scientist

   
   
   3. Managers at Grade H & above in Finance@ and Secretarial# Functions located at the Corporate Headquarters;
   4. Lady Confidential Secretaries / Lady Administrative Assistants (designated as Office Associates) to Executive Directors, Managers at Grade A & above, Divisional / SBU Chief Executives and in Finance  & Secretarial Functions located at the Corporate Headquarters; and
   5. Such other employees as may be determined by the Corporate Management Committee (CMC) from time to time.
      

      @ Covers Corporate Finance, Corporate Accounting, Corporate Taxation & Finance Function of India Tobacco Division and Personal Care Products SBU at the Corporate Headquarters.
      #  Includes managers of subsidiary companies in Secretarial located at the Corporate Headquarters.

3. ‘Dependant’ mean dependant parents, dependant children under the age of 21 years, dependant spouse and any other person(s) dependant on the Designated Employee.

1. PROHIBITION TO BUY / SELL SECURITIES OF THE COMPANY BY EMPLOYEES INCLUDING DIRECTORS

Employees, including Directors, when in possession of any unpublished price sensitive information, as defined in the Regulations, pertaining to the Company, shall not:

• Buy / sell securities of the Company, either on their own behalf or on behalf of any other person.

• Communicate, counsel or procure any unpublished price sensitive information to / from any person.

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2. RESTRICTION TO BUY / SELL SECURITIES BY DESIGNATED EMPLOYEES AND / OR THEIR DEPENDANTS

2.1 Designated Employees shall not enter into derivative transaction(s) at any time with respect to the securities of the Company.

2.2 Designated Employees shall not buy / sell securities of the Company during Closure of the 'Trading Window', i.e. the period during which trading in the securities of the Company is prohibited.

Trading Window shall be closed during the following periods:

1. From 1st April up to twenty-four hours after communication of the annual / fourth quarter financial results to the Stock Exchanges*.
2. From 1st July up to twenty-four hours after communication of the first quarter financial results to the Stock Exchanges*.
3. From 1st October up to twenty-four hours after communication of the second quarter and half-yearly financial results to the Stock Exchanges*.
4. From 1st January up to twenty-four hours after communication of the third quarter financial results to the Stock Exchanges*.

* where the Company’s securities are listed.

5. From the date of circulation of the agenda for the meeting of the Board of Directors, in which any material, price sensitive and unpublished event, including the following, are proposed. The closure of the Trading Window for these events will be advised by the Compliance Officer appointed by the Board of Directors for the purpose of this Code:
   
   
   • Proposal in respect of interim / final dividend;
   • Proposal in respect of issue of securities by way of public/ rights/ bonus etc.;
   • Proposal in respect of significant expansion plans or execution of new large projects;
   • Proposal in respect of amalgamation, mergers, takeovers;
   • Proposal in respect of disposal of whole or substantially the whole of the undertaking.
     

     The Trading Window shall open 24 hours after communication of the decision of the Board of Directors in respect of the above events to the Stock Exchanges where the Company’s securities are listed.

2.3 Designated Employees shall require prior clearance, as specified in Clause 2.6, for purchase of securities of the Company, exceeding 50,000 shares in a calendar month (either in one transaction or in a series of transactions). It is clarified that exercise of Options under the ITC Employee Stock Option Schemes (ITC ESOS) shall not require any such clearance. Such   prior  clearance  shall be  required  also  for  sale  of  securities  of  the Company  in  a  calendar month (either in one transaction  or   in  a  series  of transactions) exceeding 50% of the shares acquired under ITC ESOS and held or 50,000 shares, whichever is higher.

Dependants of Designated Employees shall require such prior clearance for purchase / sale of securities of the Company, exceeding 50,000 shares in a calendar month (either in one transaction or in a series of transactions).

2.4 Designated Employees shall hold the shares allotted upon exercise of Options under ITC ESOS for a minimum period of 30 days from the date of allotment thereof (‘Minimum Holding Period’). In case of personal emergency, prior clearance shall be required as specified in Clause 2.6, for relaxation of the provision relating to the Minimum Holding Period.

2.5 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 within 6 months following a prior transaction. It is clarified that exercise of Options under ITC ESOS will not be covered under such restriction. However on sale of shares allotted on exercise of Options, any subsequent purchase will be subject to the aforesaid restriction on entering into opposite transaction. 

In case of personal emergency, prior clearance shall be required as specified in Clause 2.6, for relaxation of the provision relating to sale of shares.

2.6 Prior clearance, referred to in Clauses 2.3 to 2.5, is required to be taken by Designated Employees from the Compliance Officer and a Director. In respect of the Compliance Officer, prior clearance is required to be taken from the Chairman of the Company.

2.7 Purchase / sale transactions for which prior clearance has been obtained by Designated Employees shall be executed within seven days of such clearance, failing which fresh sanction will be required to be taken, as specified in Clause 2.6.

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3. DISCLOSURES

Designated Employees shall make the following disclosures of shares and other securities held in the Company by them and their Dependants, to the Compliance Officer:

3.1 Annual disclosure of number of shares and other securities held as on 31st March each year, including details of purchase / sale of shares and other securities during the financial year. This disclosure shall be made within 30 days from the close of each financial year.

3.2 Changes in shareholding of Directors, Company Secretary and CMC Members, and their Dependants, when such change exceeds Rs. 5 lakhs in value or 25,000 shares or 1% of the total shares of the Company, or such other limit as may be prescribed under the Regulations. This disclosure shall be made within 2 working days of such change to the Company and to the Stock Exchanges where the Company’s securities are listed.

Changes in shareholding of Designated Employees (other than Directors or Company Secretary or CMC Members), when such change exceeds 50,000 shares. This disclosure shall be made to the Company within 4 working days of such change.

3.3 Disclosure shall be required to be made to the Company by persons upon becoming Directors or Company Secretary or CMC Members within 2 working days in respect of -

• their shareholding in the Company and that of their Dependants
• their own and their Dependants’ position in derivatives with respect to the securities of the Company.

Disclosure shall also be required to be made to the Company by persons, upon becoming Designated Employees, of the number of shares and other securities held in the Company, within 4 working days of becoming Designated Employees.

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4. PENALTIES FOR CONTRAVENTION

Violation of this Code will invite severe disciplinary action. Such disciplinary action will be irrespective of action that may be taken by SEBI under the Regulations.

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5. GENERAL

A copy of the Regulations is enclosed. Employees are advised to peruse the Regulations carefully and acquaint themselves with all the provisions contained therein. Clarification / assistance as necessary may be sought from the Compliance Officer.

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