Internal Policy

1. Preamble

According to the Regulation, Chapter III of the Regulation 15 of SEBI (Research Analysts) Regulations, 2014 the Research Analyst shall have a written internal policies and control procedures governing the dealing and trading by any research analyst. In compliance with said Regulation the Research Analyst hereby prepares, this policy and control procedure. Akhil Kumar Rai (herein referred to as “Research Analyst”) is a SEBI Registered Research Analyst.

2. 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 Company 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 of Research analyst.

To ensure compliance with SEBI rules and regulations

3. Scope / Applicability

The policy shall be applicable to Research Analyst, Akhil Kumar Rai and all employees of the Research Analyst engaged in Research Department as a 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'.

4. Definitions

4.1 Research Analyst

“Research Analyst” means a person who is primarily responsible for:-

• preparation or publication of the content of the research report; or
• providing research report; or
• making 'Buy/Sell/Hold' recommendation; or
• giving price target; or
• offering an opinion concerning public offer,

Explanation.-The term also includes any associated person who reports directly or indirectly to such a research analyst in connection with activities provided above;

4.2 Research Entity

"Research Entity" means an intermediary registered with Board who is also engaged in merchant banking or investment banking or brokerage services or underwriting services and issue research report or research analysis in its own name through the individuals employed by it as research analyst and includes any other intermediary engaged in issuance of research report or research analysis.

4.3 Research Report

“Research Report” means any written or electronic communication that includes research analysis or research recommendation or an opinion concerning securities or public offer, providing a basis for investment decision and does not include the following communications:

• Comments on general trends in the securities market;
• Discussions on the broad-based indices;
• Commentaries on economic, political, or market conditions;
• Periodic reports or other communications prepared for unit holders of mutual fund or alternative investment fund or clients of portfolio managers and investment advisers;
• Internal communications that are not given to current or prospective clients;
• Communications that constitute offer documents or prospectus that are circulated as per regulations made by the Board;
• Statistical summaries of financial data of the companies;
• Technical analysis relating to the demand and supply in a sector or the index.

4.4 Significant news or event

Significant news or event" means any news or event which is expected to have a material impact on or that reflects a material change to, the subject company's earnings, operations or financial condition, other than unpublished price sensitive information, as specified in the internal policies and procedure of the research analyst or research entity.

4.5 Subject Company

"Subject Company" means the company whose securities are the subject of a research report or public appearance.

4.6 Senior Management

“Senior management” shall mean officers/personnel of the Company who are members of its core management team excluding board of directors and normally this shall comprise all members of management one level below the executive directors, including all functional heads

4.7 Third Party Research Report

“Third Party Research Report" means a research report produced by a person or entity other than Research Analyst.

5. Management of Conflict of Interest and Disclosure Requirements

5.1 Establishing Internal policies and procedures

Research Analyst shall maintain an arms-length relationship between its research activity and other activities to prevent the misuse of information from the Research Analyst.

The Research Analyst has adopted a ‘Chinese Wall’ policy which separates the research activities from its other business activities. Employees working as Research Analysts shall not communicate any information to anyone in other departments. The employees in the Research Analysts department will be physically segregated from employees of other departments. Demarcations of the Research Analysts department are implemented by Akhil Kumar Rai, Research Analyst.

In exceptional circumstances, employees from the Research Analysts department may be brought “over the wall” and given confidential information on the basis of “need to know” criteria, under intimation to the Compliance Officer.

The Research Analysts address actual or potential conflicts of interest arising from dealings or trading of securities of subject companies, promote objective and reliable research that reflects the unbiased view of the Research Analyst, and prevent the use of research reports or research analysis to manipulate the securities market.

5.2 Limitations on trading by Research Analysts

• Personal trading activities of individuals employed, if any, as Research Analysts shall be monitored, recorded, and wherever necessary, shall be subject to a formal approval process.
• Research Analysts shall not deal or trade any securities that they recommend or follow within 30 days before and 5 days after the publication of a research report on the subject company. They shall not deal or trade directly or indirectly in any securities that they review in a manner contrary to their outstanding recommendation.
• Research Analysts shall not purchase or receive securities of an 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 on trading/dealing in securities shall not apply in case of:
  • Significant news or event concerning the subject company.
  • An unanticipated significant change in the personal financial circumstances of the Research Analyst, subject to prior written approval from the Compliance Officer.
• All Research Analysts shall always adhere to the Conflict of Interest Policy of Akhil Kumar Rai, Research Analyst, developed and implemented pursuant to SEBI Circular dated 27/05/2013, read with circulars issued thereafter. This policy shall be read, understood, and complied with by all Research Analysts in conjunction with the prevailing Conflict of Interest Policy.

5.3 Compensation of Research Analysts

The Research Analysts in the employment of the Akhil Kumar Rai , Research Analyst shall not be entitled to any bonus, salary or other form of compensation that is based on specific brokerage services transactions. Further, compensation of all research analysts shall be reviewed, documented and approved annually by the Akhil Kumar Rai , Research Analyst. Such Research Analysts shall perform his/her/their duties independently.

5.4 Limitation on Publication of Research Report, Public Appearance, Conduct of Business etc.

• Research Analysts shall not publish or distribute research reports or make public appearances regarding a subject company for which they have acted as Manager / Co-Manager / Underwriter within the prescribed time period (40 days from pricing in case of IPO, 10 days from pricing in case of FPO), unless prior written approval has been obtained from the Compliance Officer.
• If the Research Analyst is acting as an underwriter for any IPO/FPO, they shall not publish or distribute any research report or make public appearances regarding that issuer for 25 days from the first date of the public offering.
• If the Research Analyst is acting as a Manager or Co-Manager for any IPO/FPO, they shall not publish or distribute a research report or make public appearances regarding that issuer within 15 days prior to entering into and 15 days after the expiration/waiver/termination of a lock-up or similar agreement, unless prior written approval is obtained from the Compliance Officer.
• Research Reports issued by Akhil Kumar Rai or any employed Research Analysts shall be based on adequate documentary research evidence.
• Akhil Kumar Rai and/or its Research Analysts shall not provide any promise or assurance of a favorable review in a research report as consideration to influence or commence a business relationship or to receive compensation or other benefits.
• Research Analysts shall not:
  • Engage directly or indirectly in communication with current or prospective clients in the presence of brokerage service personnel or company management.
  • Engage in sales or marketing activities relating to brokerage services or communicate with clients about transactions of such divisions.
  • Provide any promise or assurance of favorable review in a research report as consideration for business or compensation.
  • Participate in business activities designed to solicit investment banking, merchant banking, or brokerage services business, including sales pitches or deal roadshows.
• Research Analysts shall have adequate documentary basis supported by proper research when preparing a research report.
• The Research Entity shall ensure that individuals employed as Research Analysts are segregated from employees performing sales, trading, dealing, corporate finance advisory, or any other activity that may affect the independence of the research report.
  However, Research Analysts may receive feedback from sales or trading personnel of the brokerage division to understand the impact of the research report.

5.5 Disclosures in Research Report

Analysts of Akhil Kumar Rai who are engaged in research activity and preparing research reports shall disclose all material information about themselves and the Research Analyst, including the following:

• Business Activity
• Disciplinary History
• Terms and conditions on which the research report is offered
• Details of Associates
• Details with respect to Ownership and Material Conflict of Interest, such as:
  • Whether Akhil Kumar Rai or any Research Analyst or their associates/relatives have any financial interest in the subject company, along with details.
  • Whether they have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month preceding the date of publication or public appearance.
  • Details of actual/beneficial ownership of one percent or more of securities of the subject company.
  • Details of any material conflict of interest at the time of publishing or public appearance.
• Details of any compensation received by Akhil Kumar Rai or Research Analysts or their associates from the subject company in the past 12 months.
• Whether Akhil Kumar Rai or its associates have managed or co-managed any public offering of the subject company in the past 12 months.
• Whether they have received any compensation for investment banking, merchant banking, or brokerage services from the subject company in the past 12 months.
• Whether they have received compensation for any other products/services from the subject company in the past 12 months.
• Details of compensation or benefits received from the subject company or third party in connection with the research report.
• In public appearances, the Research Analyst shall disclose:
  • Whether they or their associates have received compensation from the subject company in the past 12 months.
  • Whether the subject company was a client in the preceding 12 months, along with the nature of services provided.
• Whether the Research Analyst has served as an officer, director, or employee of the subject company.
• Whether Akhil Kumar Rai or its Research Analysts have been engaged in market-making activity for the subject company.
• Any other disclosures required by SEBI under applicable regulations.

Research reports shall reflect factual information about the subject company based on reliable data. Reports will also contain definitions of all terms used in making recommendations, consistently applied.

If the report includes a rating or price target for at least 1 year, it will also include a graph of the daily closing price of the security for the assigned period or for 3 years, whichever is shorter.

Research reports shall not be issued selectively to internal trading personnel or to specific clients ahead of others who are entitled to receive them.

When distributing third-party research reports, the Analysts shall review them to ensure there is no untrue, false, or misleading information, provided there is no business or contractual relationship with the third-party provider.

In case any Research Analyst appears in public media and makes recommendations, they must disclose their name, registration status, and details of any financial interest at the time of providing opinions, answering queries, or sharing the substance of the research report.

5.6 Contents of research report

The facts in its research reports shall be based on reliable information and shall define the terms used in making recommendations, and these terms shall be consistently used.

A rating system must clearly define the meaning of each such rating including the time horizon and benchmarks on which a rating is based.

If a research report contains either a rating or price target for subject company’s securities and the research analyst or research entity 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 such securities for the period assigned or for a three-year period, whichever is shorter.

5.7 Recommendations in public media

Research analyst or research entity including its director or employee shall disclose the registration status and details of financial interest in the subject company, if he makes public appearance

If any person makes public appearance or makes a recommendation or offers an opinion concerning securities or public offers through public media, all the provisions of regulations 16 and 17 of SEBI (Research Analysts) Regulations, 2014 shall apply mutatis mutandis to him and he shall disclose his name, registration status and details of financial interest in the subject company at the time of,

• Making such recommendation or offering such opinion in personal capacity;
• Responding to queries from audiences or journalists in personal capacity;
• Communicating the research report or substance of the research report through the public media.

5.8 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 who are entitled to receive the research report

Research analyst or research entity 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 who distributes any third party research report shall disclose any material conflict of interest of such third party research provider or he shall provide a web address that directs a recipient to the relevant disclosures.

The above two points (ii) and (iii) shall not apply to

5.9 Maintenance of records & Audit

Akhil Kumar Rai and its Research Analysts shall maintain and preserve following records for a minimum period of 5 years:

• Research Report duly signed and dated
• Research recommendation provided
• Rationale for arriving at research recommendation
• Record of public appearance

Research Analysts shall forthwith inform Akhil Kumar Rai in writing about any information or particulars about him/her/them submitted are found to be false or misleading in any material particular or if there is any change in information already submitted.

The Compliance Officer if appointed shall monitor and comply in his regard.

The Company shall conduct annual audit in respect of compliance with the captioned SEBI Regulations from member of ICAI or ICSI.

5.10 Appointment of compliance officer

The compliance officer of the Akhil Kumar Rai looking the Compliance as an intermediary shall be responsible for monitoring the compliance of the provisions of the Act, these regulations and circulars issued by the SEBI and his/her absence as may decided by the proprietor of Akhil Kumar Ra

5.11 General responsibility

Research Analysts of the Company shall obtain NISM certification or such other certification for research analysts as specified by SEBI and It shall the Company, as may be applicable, comply with the certification and qualification requirements under regulation 7 at all times.

Research analyst or research entity shall abide by Code of Conduct as specified below

Honesty and Good Faith

Research analyst shall act honestly and in good faith.

Diligence

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

Conflict of Interest

Research analyst 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

Insider Trading or front running

Research analyst shall not engage in insider trading or front running or front running of its own research report

Confidentiality

Research analyst shall maintain confidentiality of report till the report is made public

Professional Standard

Research analyst engaged in research analysis shall observe high professional standard while preparing research report.

Compliance

Research analyst shall comply with all regulatory requirements applicable to the conduct of its business activities

Responsibility of senior management

The senior management of 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 Akhil Kumar Rai, prior approval from the SEBI shall be taken.

The Akhil Kumar Rai shall furnish information and reports as may be specified by the SEBI from time to time