CODE OF CONDUCT

FOR

PREVENTION OF INSIDER TRADING

This Code of Conduct may be known as "ELECON Code of Conduct for Prohibition of Insider Trading" (herein after referred to as the "Code of Conduct").

This code has been made pursuant to Regulation 12 of the SEBI (prohibition of Insider trading) Regulation, 1992 as amended from time to time and may be modified by the Board of Directors of the Company from time to time.

This Code has been designed to enhance the standards of governance and to take into account certain changes in the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations 2008 dated 19th November, 2008.

Definitions

1	“Act” means the Securities & Exchange Board of India Act, 1992 as may be amended from time to time.

2	“Board” means Board of Directors of the Company, Elecon Engineering Company Limited.

3	“Code” means this Code of Conduct for Prevention of Insider Trading including modifications made thereto from time-to-time.

4	“Company” means Elecon Engineering Company Limited.

5	“Compliance Officer” shall mean Company Secretary of the Company.

6	“Dealing in Securities” means subscribing, buying, selling or agreeing to subscribe, buy, sell or deal in any securities either as principal or agent.

7	“Dependent Family Members” shall mean spouse and dependent children.

8	“Designated Employees” shall mean and include 1. Top three tier of the Company Management, namely :- Managing Director or the CEO as the case may be or Whole Time Director. Chief Financial Officer, President, Vice President and Assistant Vice President in any Department at any location General Manager in any Department at any location Manager and above in Finance, Accounts and Secretarial Department 2. And such other employees who may be able to have access to any price sensitive information as defined in the Regulations.

9	“Director” means Directors on the Board of the Company both Executive and Non-Executive.

10	“Employee” means designated employee of the Company as defined in the sub clause (8) herein above.

11	“Insider” means any person who, is or was connected with the company or is deemed to have been connected with the company and who is reasonably expected to have access to unpublished price sensitive information in respect of securities of a company, or has received or has had access to such unpublished price sensitive information.

12	“Officer” means designated employee of the Company as defined in the sub clause (8) herein above.

13	“Regulation” means Securities and Exchange Board of India (Prohibition of Insider Trading), Regulations 1992 as amended from time to time.

14	"Stock Exchange" means a Stock Exchange which is recognized by the Central Government or SEBI under Section 4 of Securities Contracts (Regulation) Act, 1956 (42 of 1956)

15	"Trading Window" means the period during which trading in the Company’s shares by insiders shall be permissible.

16	“Unpublished” means information which is not published by the Company in the newspapers or submitted to the Stock Exchanges.

Interpretation


1	Terms that have not been defined in this Code shall have the same meaning assigned to them in the Companies Act, 1956 and/or any other SEBI Regulation(s) as amended from time to time.

2	This Code can be modified/amended/altered only by Board of Directors of the Company.

3	But in case of any statutory modification or amendment or alteration of the provisions of Securities and Exchange Board of India (Prohibition of Insider Trading), Regulations 1992, the newly modified/amended/altered provisions of the Regulation shall be deemed to be implemented in the Code immediately with effect from the date of the statutory notification for modification or amendment or alteration etc. The amended code should be placed before the Board of Directors of the Company in the Board Meeting held immediately after the date of statutory notification for modification/amendment/alteration etc of the Regulation for noting.

Applicability

This Code shall be applicable to all the Directors / Officers / Designated employees, present and future.

Code

1.0

Compliance Officer

1.1 The Company has appointed Mr. Paresh Shukla, Company Secretary of the Company as the Compliance Officer for the purpose of this Code of Conduct.

1.2 The compliance officer shall be responsible for setting 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.

Explanation: For the purpose of this Schedule, the term ‘designated employee’ shall mean the employees designated by the company under para I (8).

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

1.4 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 as amended from time to time and the company’s code of conduct.

2.0

Preservation of Price Sensitive-Information

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

2.2 Need to know

2.2.1 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

2.3.1 Files containing confidential information shall be kept secure. Computer files must have adequate security of login and password etc.

3.0

Prevention of misuse of “Price Sensitive Information”.

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

3.2 Trading Window

3.2.1 The Company shall specify a trading period, to be called “Trading Window”, for trading in the securities of the Company.

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 :-

Declaration of financial results (quarterly, half-yearly and annually).

Declaration of dividends (interim and final).

Issue of securities by way of public/rights/bonus etc.

Any major expansion plans or execution of new projects.

Amalgamation, mergers, takeovers and buy-back.

Disposal of whole or substantially whole of the undertaking.

Any changes in policies, plans or operations of the company.

3.2.4 Closure of trading window shall commence 10 days before the date of meetings of Board of Directors of the Company are held to consider any price sensitive information referred to in paragraph 3.2.3 hereinabove.

3.2.5 The trading window shall be re-opened 48 hours after the information referred to in para 3.2.3 is made public.

3.2.6 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.

3.2.7 In case of ESOPs, exercise of option may be allowed in the period when the trading window is 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

3.3.1 All Directors/Officers/Designated employees of the Company and their dependents (as defined by the Company) who intend to deal in the securities of the Company above a minimum threshold limit of 25000 shares or more should pre-clear the transaction as per the pre-dealing procedure as described hereunder.

3.3.2 An application may be made in plain paper to the Compliance Officer indicating the estimated number of shares that the Insider intends to deal in, the depository with which he/she has an account and the details as to his/her shareholding before and after the intended transaction.

3.3.3 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:

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

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 that he/she would completely refrain from dealing in the securities of the company till the time such information becomes public.

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

That he/she has made a full and true disclosure in the matter.

4.0

Other restrictions

4.1 All directors/officers/designated employees and their dependents (as defined by the Company) 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.

4.2 All directors/ officers/ 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 during the next six months following the prior transaction. All directors/ officers/ designated employees shall also not take positions in derivative transactions in the shares of the company at any time.

In the case of subscription in the primary market (initial public offers), the above mentioned entities shall hold their investments for a minimum period of 30 days. The holding period would commence when the securities are actually allotted.

4.3 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	(a) All directors/officers/designated employees of the company shall be required to forward the details of their holding in securities of the Company including the holding of their dependent family members (as defined by the company) at the time of joining the Company to the Compliance Officer.

	(b) Any person who is a director/officer/designated employee of the company, shall disclose to the company and the stock exchange, where the securities are listed, the total number of shares or voting rights held and change in shareholding or voting rights, if there has been a change in such holdings of such person and his dependents (as defined by the Company) from the last disclosure made under sub-regulation (2) or (4) of Regulation 13 of the Regulations, and the change exceeds Rs. 5 lakh in value or 25,000 shares or 1% of total shareholding or voting rights, whichever is lower. The disclosure mentioned above shall be made in Form D prescribed under the Regulations within 2 working days of : (a) the receipts of intimation of allotment of shares, or (b) the acquisition or sale of shares or voting rights, as the case may be.

	(c) All directors/officers/designated employees of the company shall be required to forward to the Compliance Officer the Annual Statement of the holding in securities of the Company held by them together with their dependent family members in the Company.

	(d) The disclosures mentioned in para 5.1 (a) & (c) above shall be made in the forms prescribed under the Regulations within a period of 30 days from the date of joining and within a period of 30 days from the close of the financial year, as the case may be.

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.

6.0

Penalty for contravention of code of conduct

6.1 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.

6.2 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/salary freeze, suspension, ineligible for future participation in employee stock option plans, etc.

6.3 The action by the company shall not preclude SEBI from taking any action in case of violation of SEBI (Prohibition of Insider Trading) Regulations, 1992.

7.0

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.

General

Employees are advised to pursue the Code and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 as amended from time to time, carefully and acquaint themselves with all the provisions contained therein. The Compliance Officer will be available for clarification / assistance that may be necessary.

CODE OF CONDUCT

FOR

BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL

ACKNOWLEDGEMENT FORM

I, ________________________________________ have received and read the Company’s “CODE OF CONDUCT FOR BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL” (“this Code”). I have understood the provisions and policies contained in this Code and I agree to comply with this code.

Signature :

Name :

Designation :

Date :

Place :