Code of Conduct for Prevention of Insider Trading for SMS Pharmaceuticals Limited

1.0       Compliance Officer

1.             SMS Pharmaceuticals Limited has appointed the Company Secretary as compliance officer who shall report to the Managing Director/Chief Executive Officer.

2.             The compliance officer shall be responsible for setting forth policies, procedures, monitoring adherence to the rules for the preservation of “Price Sensitive Information”, pre-clearing of designated employees’ and their dependents’ trades (directly or through respective department heads as decided by the company), monitoring of trades and the implementation of the code of conduct under the overall supervision of the Board of the listed Company.

Explanation – For the purpose of this schedule, the term ‘designated employee’ shall include:-

(i)                 Officer comprising the top three tiers of the company management (---).

(ii)               The employees designated by the company to whom these trading restrictions shall be applicable, keeping in mind the objectives of this code of conduct.

3.              The compliance officer shall maintain a record of the designated employees and any changes made in the list of designated employees.

4.              The compliance officer shall assist all the employees in addressing any clarifications regarding the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and the company’s code of conduct.

2.0       Preservation of “Price Sensitive Information”

1.                  Employees/directors shall maintain the confidentiality of all Price Sensitive Information.  Employees/directors shall not pass on such information to any person directly by way of making a recommendation for the purchase or sale of securities

2.2        Need to know

             Unpublished Price Sensitive Information is to be handled on a “need to know” basis, i.e. Unpublished Price Sensitive Information should be disclosed only to those within the company who need the information to discharge their duty and whose possession of such information will not give rise to a conflict of interest or appearance of misuse of the information.

            All non-public information directly received by any employee should immediately be reported to the head of the department.

1.        Price Sensitive Information is to be handled on a “need to know” basis, i.e., Price Sensitive Information should be disclosed only to those within the company who need the information to discharge their duty.

2.3  Limited access to confidential information

1. Files containing confidential information shall be kept secure. Computer files must have adequate security of login and pass word etc.

3.0       Prevention of misuse of “Price Sensitive Information

1.                All directors/officers and designated employees of the company shall be subject to trading restrictions as enumerated below :-

2.                Trading window

3.2.1.      The company shall specify a trading period, to be called” Trading window”, for trading in the company’s securities.  The trading window shall be closed during the time the information referred to in par 3.2.3 is un-published.

3.2.2.      When the trading window is closed, the employees/directors shall not trade in the company’s securities in such period.

3.2.3.      The trading window shall be, inter alia, closed at the time of :

(a)              Declaration of Financial results (quarterly, half-yearly and annual)

(b)             Declaration of dividends (interim and final)

(c)              Issue of securities by way of public/rights/bonus etc.

(d)             Any major expansion plans or execution of new projects.

(e)              Amalgamation, mergers, takeovers and buy-back.

(f)              Disposal of whole or substantially whole of the undertaking.

(g)             Any changes in policies, plans or operations of the company

3.2.3A. the time for commencement of closing of trading window shall be decided by the company).

             3.2.4 The trading window shall be opened 24 hours after the information referred to in para 3.2.3 is made public.

5.              All directors/officers/designated employees of the company shall conduct all their dealings in the securities of the Company only in a valid trading window and shall not deal in any transaction involving the purchase or sale of the company’s securities during the periods when trading window is closed, as referred to in para 3.2.3 or during any other period as may be specified by the Company from time to time.

6.              In case of ESOPs, exercise of option may be allowed in the period when the trading window closed. However, sale of shares allotted on exercise of ESOPs shall not be allowed when trading window is closed.

3.3 Pre clearance of trades

1.                  All directors/officers/designated employees of the company who intend to deal in the securities of the company (above a minimum threshold limit to be decided by the company) should pre-clear the transactions as per the pre-dealing procedure as described hereunder.

2.                  An application may be made in such form as the company may notify in this regard, to the Compliance officer indicating the estimated number of securities that the designated employee/intends to deal in, the details as to the depository with which he has a security account, the details as to the securities in such depository mode and such other details as may be required by any rule made by the company in this behalf.

3.                  An undertaking shall be executed in favour of the company by such designated employee/director/officer incorporating, inter alia, the following clauses, as may be applicable:

(a)                That the employee/director/officer does not have any access or has not received “Price Sensitive Information” up to the time of signing the undertaking.

(b)               That in case the employee/director/officer has access to or receives “Price Sensitive Information” after the signing of the undertaking but before the execution of the transaction he/she shall inform the Compliance Officer of the change in his position and tht he/she would completely refrain from dealing in the securities of the company till the time such information becomes public.

(c)                That he/she has not contravened the code of conduct for prevention of insider trading as notified by the company from time to time.

(d)               That he/she has made a full and true disclosure in the matter-----

1.                  Other restrictions

2.                  All directors/officers/designated employees shall execute their order in respect of securities of the company within one week after the approval of pre-clearance is given.  If the order is not executed within one week after the approval is given, the employee/director must pre clear the transaction again.

3.                  All directors/officers/designated employees shall hold their investments in securities for a minimum period of 30 days in order to be considered as being held for investment purposes.  The holding period shall also apply to subscription in the primary market (IPOs).  In the case of IPOs, the holding period would commence when the securities are actually allotted.

4.                  In case the sale of securities is necessitated by personal emergency, the holding period may be waived by the compliance officer after recording in writing his/her reasons in this regard.

5.0       Reporting Requirements for transactions in securities.

            5.1        All directors designated employees of the listed company shall be required to forward following details of their Securities transactions including the statement of dependent family members (as defined by the company) to the Compliance Officer.

(a)                all holdings in securities of that company by directors/ officers/designated employees at the time of joining the company;

(b)               Periodic statement of any transactions in securities (the periodicity of reporting may be defined by the company.  The company may also be free to decide whether reporting is required for trades where pre-clearance is also required) and

(c)                Annual statement of all holdings in securities.

         5.2        The Compliance officer shall maintain records of all the declarations in the appropriate form given by the directors/officers/designated employees for a minimum period of three years.

5.3.       The Compliance officer shall place before the Managing Director/Chief Executive Officer or a committee specified by the company, on a monthly basis all the details of the dealing in the securities by employees/director/officer of the company and the accompanying documents that such persons had executed under the pre-dealing procedure as envisaged in this code.

6.1.      Penalty for contravention of code of conduct

Any employee/officer/director who trades in securities or communicates any information for trading in securities, in contravention of the code of conduct may be penalized and appropriate action may be taken by the company.

2. Employees/officers/directors of the company who violate the code of conduct shall also be subject to disciplinary action by the company, which may include wage freeze, suspension, ineligibility for future participation in employees’ stock option plans, etc.
3. The action by the company shall not preclude SEBI from taking any action in case of violated of SEBI (Prohibition of Insider trading), Regulations, 1992.

7.                  Information to SEBI in case of violation of SEBI (Prohibition of Insider Trading) Regulations, 1992.

7.1       In case it is observed by the company/compliance officer that there has been a violation of SEBI (Prohibition of Insider Trading) Regulations, 1992, SEBI shall be informed by the Company.

ANNEXURE-"A"

FORM FOR SEEKING PRE-CLEARANCE

Date

The Compliance Officer,

SMS Pharmaceuticals Limited 417 Nilagiri Aditya Enclave, Ameerpet,

Hyderabad-17.

Sub. : Pre-clearance for dealing in company's securities

Dear Sir,

As required under Clause 3.3.2 of the Company's Code of Conduct for Prevention of Insider Trading, I seek your approval for buying/selling

_________  Shares in my capacity as *"Director'7"Officer"/"Designated

Employee" and on behalf of my Dependent Family Members.

The said securities will be bought/ sold in the name of.

Depository Participant details and/or existing folio nos. are as under:-

I agree to comply with the rules mentioned on the reverse of this Form and I hereby declare that I am seeking this clearance on the basis that I do not have any Price Sensitive Information which by definition means only information which relates directly or indirectly to the Company and which if published, is likely to materially affect the price of securities of the Company;

Enclosed pleased find undertaking as per format prescribed by you. Thanking you,

Yours faithfully,

Delete whichever is not applicable                                P.T.O

RULES

1.             An Undertaking as per the enclosed format would have to be
enclosed with the Application.

2.             After obtaining the clearance the Orders would have to be executed within seven working days and if the Order is not executed within seven working days after the approval is given you would have to pre-clear the transaction once again.

3.             Securities thus acquired should be held for a minimum period of 30
days in  order to be  considered as  being held for investments
purposes unless necessitated by personal emergency in which case the holding period could be waived by the Company on justifiable
reasons which has to be recorded in writing. The holding period
shall also apply to subscription in the primary market. In the case of
issues, the holding period would commence when the securities are
actually allotted.

4.             Any transaction with regard to the Company's Securities above the
limits   specified   in   Regulation    13(4)    of   the    Insider   Trading
Regulations should be communicated to the Company within 4
working days of the conclusion of the transaction.

5.             Submission of Annual Statements as of the last day of the Financial
Year of the Company which is presently 31^st March, regarding all
holdings  in  the   Company's  Securities  along with  particulars  of
Dependent Family Members, within 30 days from the end of the
Financial Year.

ANNEXURE-"B

UNDERTAKING TO BE GIVEN BY THE DESIGNATED EMPLOYEES / DIRECTORS/OFFICERS OF THE COMPANY.

Date:

The Compliance Officer,

SMS Pharmaceuticals Limited 417 Nilagiri Aditya Enclave, Ameerpet,

Hyderabad-17.

Dear Sir,

I,____________ , *Director/ Officer / Designated Employee and on behalf of my Dependent Family Members, pursuant to Clause 3,3.3 of the Company's Code of Conduct for Prevention of Insider Trading, hereby undertake the following that :-

a.     I do not have any access and neither I have received any "Price
Sensitive Information" Which by definition means information which
relates directly or indirectly to the Company and which if published, is
likely to materially affect the price of securities of the Company up to
the time of signing the Undertaking.

b.     In case if I have access to and/or receive "Price Sensitive Information"
after   signing   the   Undertaking   but   before   the   execution   of  the
transaction I shall inform the Compliance Officer of the change in my
position and that I would completely refrain from dealing in the
securities of the company till the time such information becomes
public.

C.   I have not contravened the code of conduct for prevention of Insider Trading as notified by the company from time to time.

d.    I have made a full and true disclosure in the matter. Yours faithfully,

*Delete whichever is not applicable

ANNEXURE- “C”

Format of approval letter by the Company

Date:

Dear Sir,

I refer to your application dated ________    under Clause 3.3.2.   Of the Company's Code of Conduct for Prevention of Insider Trading for seeking
permission to buy/sell of__________________ No. of Securities of the Company.

The Company hereby gives its consent to buy/sell not more than________ No.

of Securities of the Company provided the above transaction is not based on any unpublished Price Sensitive Information relating to the Company.

Your kind attention is drawn to the following provisions which you need to, inter-alia, strictly observe in terms of the above Regulations while dealing in the securities of the Company.

1.   The Transaction would have to be executed within seven working days
and if the same is not executed within seven 'working days after the approval is given you would have to pre-clear the transaction once again.

2.   Securities thus acquired should be held for a minimum period of 30 days
in order to be considered as being held for investments purposes unless necessitated by persbrial emergency the holding period could be waived on justifiable reasons which has to be recorded in writing. The holding period shall also apply to subscription in the primary market. In the case of issues, the holding period would commence when the securities are actually allotted.

3. Any transaction with regard to the Company's Securities above the limits specified in Regulation 13(4) of the Insider Trading Regulations should be communicated to the Company within 4 working days of the conclusion of the transaction.

It may please be noted that any violation in compliance with aforesaid regulation would attract penal" provisions by the Company, which would include Wage Freeze, Suspension or ineligibility to participate in future ESOPS. This would not preclude SEBI taking its own action.

Thanking You.

Yours faithfully,

For SMS Pharmaceuticals Limited

Compliance Officer

ANNEXURE-  ‘D'

PERIODIC STATEMENT

Date:

The Compliance Officer,

SMS Pharmaceuticals Limited

 417 Nilagiri Aditya Enclave, Ameerpet,

Hyderabad-17.

Dear Sir,

I refer to Clause 5.1. b) of the Company's Code of Conduct for Prevention of Insider Trading and as required I hereby inform you about transactions in securities in my capacity as *"Director"/"Officer"/"Designated Employee" alongwith my Dependent Family Members.

I declare that the above dealing was not on the basis of any unpublished Price Sensitive information relating to that Company.

The particulars of the securities sold / purchased are as under:-

For each transaction, the particulars to be stated separately given the contract price for each security.

Thanking you, Yours faithfully,

* Delete whichever is not applicable

ANNEXURE-«E"

                            INITIAL DISCLOSURE OF HOLDING

DATE:

The Compliance Officer,

SMS Pharmaceuticals Limited 417 Nilagiri Aditya Enclave, Ameerpet,

Hyderabad-17.

Dear Sir,

In terms of clause 13(2) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and Clause 5.1. a) of the Company's Code of Conduct for Prevention of Insider Trading, I, In my capacity as *^ttDirector"/Officer"/"Designated Employees" of the company hereby declare the following particulars of securities or voting rights held by me/ us in the Company along with Dependent Family Members.

Yours faithfully,

Delete whichever is not applicable

ANNEXURE - "F"

                       ANNUAL STATEMENT OF HOLDING

Date:

The Compliance Officer,

SMS Pharmaceuticals Limited 417 Nilagiri Aditya Enclave, Ameerpet,

Hyderabad-17.

Dear Sir,

I refer to Clause 5.1. c) of the Company's Code of Conduct for Prevention of
Insider Trading I, in my capacity as *"Director'"Officer"/"Designated
Employee" hereby inform you about the securities / voting held by me
including the securities held by dependant family members as on 31^st
March............. as per particulars given under :

I do hereby declare that what is stated above is true to the best of my knowledge and belief

Thanking You. Yours faithfully,