KYC Guidelines, AML Standards - Prevention of Money Laundering (PMLA) Policy

1. INTRODUCTION

This Policy has been framed by GANESH GANGA INVESTMENT PRIVATE LIMITED in order to comply with the applicable Anti Money Laundering (AML) Standards/ Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries under the Prevention of Money Laundering Act, 2002 and Rules framed there under.

The Prevention of Money Laundering Act, 2002 (PMLA) was brought into force with effect from 1STJuly, 2005. As per PMLA, every banking company, financial institution (which includes chit fund company, a cooperative bank, a housing finance institution and a non- banking financial company) and intermediary (which includes a stockbroker, sub-broker, share transfer agent, banker to an issue, trustee to a trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and any other intermediary associated with securities market and registered under section 12 of the Securities and Exchange Board of India Act, 1992) shall have to maintain a record of all the transactions; the nature and value of which has been prescribed in the Rules notified under the PMLA.

For the purpose of PMLA, transactions include:

  1. All cash transactions of the value of more than Rs 10 lakhs or its equivalent in foreign currency.
  2. All series of cash transactions integrally connected to each other which have been valued below Rs 10 lakhs or its equivalent in foreign currency, such series of transactions within one calendar month
  3. All transactions involving receipts by non-profit organizations of value more than rupees ten lakh, or its equivalent in foreign currency;
  4. All cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine or where any forgery of a valuable security or a document has taken place facilitating the transactions
  5. All suspicious transactions whether or not made in cash and including, inter-alia, credits or debits into from any non monetary account such as Demat account, security account maintained by the registered intermediary. For the purpose of suspicious transactions reporting, apart from ‘transactions integrally connected’, ‘transactions remotely connected or related’ need to be considered.

“Suspicious transactions” means a transaction whether or not made in cash which to a person acting in good faith:

  1. gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or
  2. appears to be made in circumstances of unusual or unjustified complexity or
  3. appears to have no economic rationale or bonafide purpose.

GANESH GANGA INVESTMENT PRIVATE LIMITED being an NBFC Company registered with the Reserve Bank of India is required to adopt and implement a policy for Prevention of Money Laundering as laid down hereunder pursuant to the Prevention of Money Laundering Act, 2005 and the Rules, Regulations and Notifications there under as a compliance with Regulatory Requirement.

2. POLICY OBJECTIVES

3. SCOPE

To be in compliance with these obligations, GANESH GANGA INVESTMENT PRIVATE LIMITED is fully committed to establish appropriate policies and procedures for the prevention of Money Laundering and Terrorist Financing and ensuring their effectiveness and compliance with all relevant legal and regulatory requirements.

These policies and procedures (with amendments from time to time) apply to all employees of GANESH GANGA INVESTMENT PRIVATE LIMITED and is to be read in conjunction with the existing guidelines. The following procedures have been established to ensure that all employees know the identity of their customers and take appropriate steps to combat money laundering.

It is obligatory for every employee, at all levels, to go through this Policy, understand the provisions, and co-operate in the implementation of the procedures. For any clarifications on this subject, at any point of time, the employees should contact the Compliance Officer of the company, who is also designated as the Principal Officer under the Act.

4. IMPLEMENTATION OF THIS POLICY

I. PRINCIPAL OFFICER

The Company shall designate the Compliance Officer of GANESH GANGA INVESTMENT PRIVATE LIMITED as the Principal Officer who shall act as a central reference point in facilitating onward reporting of suspicious transactions and for playing an active role in the identification and assessment of potentially suspicious transactions and shall have access to and be able to report to senior management at the next reporting level or the Board of Directors. Illustrative duties of Principal Officer will be as follows:

II. DESIGNATED DIRECTOR

The Company shall nominate the Director who oversees the operations of the Company including implementation of Prevention of Money Laundering Rules, as the Designated Director of the Company under the Prevention of Money laundering Act, 2002 and Rules framed there underwho shall be responsible for ensuring overall compliance with the obligations imposed under chapter IV of the Act and the Rules. GANESH GANGA INVESTMENT PRIVATE LIMITED shall communicate the details of the Designated Director, such as, name, designation and address to the Office of the Director, FIU-IND.

III. PROCEDURES TO COMBAT MONEY LAUNDERING & TERRORIST FINANCING

The Customer Due Diligence Process includes three specific parameters:

A. CUSTOMER ACCEPTANCE POLICY

The Customer Acceptance norms specified herein below shall be applicable to clients sourced directly by employees of GANESH GANGA INVESTMENT PRIVATE LIMITED and also with regard to clients sourced through Channel Partners, Feet on Street, Marketing agents, Independent Financial Advisors etc. of GANESH GANGA INVESTMENT PRIVATE LIMITED .

All persons sourcing clients on behalf of GANESH GANGA INVESTMENT PRIVATE LIMITED shall be required to adhere to the requirements specified herein below that are aimed to identify the types of clients that are likely to pose a higher than the average risk of money laundering or terrorist financing:

  1. In-person verification: In person verification (the “IPV”) shall be mandatory for all clients. The client should visit the branch of GANESH GANGA INVESTMENT PRIVATE LIMITED or the authorised official may visit the client at the residence/office to complete the in-per verification procedures.
  2. KYC Procedures: Accept only clients in respect of whom complete KYC procedures have been completed. Client’s account shall not be opened in case the client fails to submit any required documents as per Customer Identification Policy below:
    • Documents shall be accepted as per the checklists given from time to time
    • Photocopies submitted by the clients shall be compulsorily verified with original
    • All details in the form shall be filled in by the clients without fail
    • There shall be no compromise on submission of mandatory information – Accounts should not be opened here if the client refuses to provide information/documents.
  3. Benami Accounts: No account should be opened in a fictitious / benami name or on an anonymous basis.
  4. Debarred Clients: Before opening of clients accounts, check should be done to verify whether the client’s name matches with names in any of the following lists:
    • SEBI Debarred List
    • UNSC
    • PEP
    • OFAC (Office of Foreign Access and Control given by US Treasury Dept.)
    • FATF
    • Watch out Investors at www.watchoutinvestors.com
    • NSE Arbitration
    • such other list that may be specified by the Regulators/Compliance Department from time to time

    Accounts should not be opened of client with known criminal background.

  5. Clients of Special Category: Due care shall be taken while accepting clients of Special Category. Clients of Special Category include but shall not be limited to the following:
    • Non- resident clients
    • High net-worth clients
    • Trust, Charities, Non-Governmental Organizations (NGOs) and organizations receiving donations
    • Companies having close family shareholdings or beneficial ownership
    • Politically Exposed Persons (PEP) (i.e. Individuals who are or have been entrusted with prominent public functions in a foreign country, e.g., Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc. and family members or close relatives of PEPs)
    • Companies offering foreign exchange offerings
    • Clients in high risk countries (i.e. - where existence / effectiveness of money laundering controls is suspect where there is unusual banking secrecy, countries active in narcotics production- countries where corruption (as per Transparency International Corruption Perception Index) is highly prevalent - countries against which government sanctions are applied- countries reputed to be Havens/ sponsors of international terrorism offshore financial centres, tax havens, countries where fraud is highly prevalent.
    • Non face to face clients
    • Clients with dubious reputation as per public information available etc.
  6. Designated Individuals/Entities:

    An updated list of individuals and entities which are subject to various sanction measures such as freezing of assets/accounts, denial of financial services etc., as approved by the Security Council Committee established pursuant to various United Nations' Security Council Resolutions (UNSCRs) can be accessed at its website at http://www.un.org/sc/committees/1267/consolist.shtml.

    GANESH GANGA INVESTMENT PRIVATE LIMITED must ensure that accounts are not opened in the name of anyone whose name appears in said list. GANESH GANGA INVESTMENT PRIVATE LIMITED shall continuously scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the list.

  7. Treatment of Accounts of Clients of Special Category
    • NRI: While opening NRI account utmost care should be exercised. While opening an NRI Repatriable or NRI Non Repatriable inter alia, following documents should be collected from the clients: NRI Repatriable/Non Repatriable.
      1. PAN Card Copy
      2. Passport Copy
      3. Indian Address Proof
      4. Cancelled Cheque copy of NRE A/c
      5. PIS Permission issued from RBI.
      6. NRI Address Proof
      7. Bank Statement Copy.
      8. Client Master Copy for Demat account.
      9. Tax Residency proof
    • High Net worth Clients: High net worth clients could be classified as such if at the account opening stage or during the course of the relationship, it is realized that the client’s investments or the appetite for investment is high.
    • Trust, Charity and NGOs: Both public as well private, registered as well un registered trust will have to be classified in the Special Category. Any Charitable or Nongovernmental organization or a Non Profit Organization will be also classified herein.
    • Close family shareholdings or Beneficial Ownership: In case of close family shareholdings the objective is to understand whether the beneficiaries of two or more accounts, which may also be opened at different times, are same, then both need to be marked under this special category.
    • Politically Exposed Persons: In case of PEPs, the account should be opened only after consent of the senior management and all the required documents are collected and client should be marked as PEP in records. Where a client has been accepted and the client or beneficial owner is subsequently found to be, or subsequently becomes a PEP, registered intermediaries shall obtain senior management approval to continue the business relationship. GANESH GANGA INVESTMENT PRIVATE LIMITED shall verify the sources of funds of the PEP by obtaining bank statements from time to time.
    • Company offering foreign Exchanges: At the account opening stage if the individual or the entity is registered foreign exchange dealer, then the same may be categorized.
    • Client in High Risk Country: No accounts shall be opened if received from a client who was residing in a high risk jurisdiction and may have investment proceeds which may have also originated from these counties. The list may be obtained from the Financial Action Task Force (FATF) statements that identify countries that do not or insufficiently apply the FATF Recommendations, published by the FATF on its website (www.fatf- gafi.org).
    • Client with dubious Public Reputation: If a client’s reputation during the opening of the account or post opening the account is known to be not good, then the same is marked in this special category.

    The parameters of risk perception in terms of the nature of business activity, location of customer and his clients, mode of payments, volume of turnover, social and financial status etc shall be captured at the account opening stage to enable categorization of customers into low, medium and high risk. GANESH GANGA INVESTMENT PRIVATE LIMITED has indicative categories of customers which would fall into low, medium and high risk categories (Annexure- I). The list shall be updated with approvals from Compliance and Business groups.

    For the purpose of risk categorization, individuals/entities whose identities and sources of wealth can be identified and transactions in whose accounts by and large conform to the known profile, shall be categorized as low risk. Illustrative examples of low risk customers are as follows:

    • salaried employees whose salary structures are well defined;
    • Government Departments and Government owned companies;
    • Regulators and statutory bodies; etc.

    Customers that are likely to pose a higher than average risk to GANESH GANGA INVESTMENT PRIVATE LIMITED shall be categorized as medium or high risk depending on customer's background, nature and location of activity, country of origin, sources of funds and his client profile etc. GANESH GANGA INVESTMENT PRIVATE LIMITED shall apply Customer Due Diligence measures based on the risk assessment, thereby requiring intensive 'due diligence' for higher risk customers, especially those for whom the sources of funds are not clear.

    While the profile of the customer is captured in the account opening form, Client Profile sheet is also prepared at the account opening stage for all accounts (individual / non individual). The Client Profile sheet is an addendum to the account opening form and captures in further detail the profile of the customer, especially the expected transaction pattern of the account.

    8. B. CUSTOMER IDENTIFICATION POLICY

    The following Customer Identification Norms shall be adhered to in respect of all new clients to establish the identity of the client along with firm proof of address to prevent opening of account which is fictitious/benami/anonymous in nature.

    Further given below is a list of Basic Requirements to be obtained from Individual and non-individual clients at the time of account opening.

    Proof of Identity (POI): Every client would be identified based on only photo identity as prescribed under applicable KYC norms. The PAN Card, which is compulsory, would also serve as a photo identity. Other Identity proofs which might be collected for verification are as under:

    • Passport
    • Voter ID Card
    • Driving license
    • PAN card with photograph
    • Unique Identification Number (UID) (Aadhar Card)
    • Identity card/document with applicant’s Photo, issued by a) Central/State Government and its Departments, b) Statutory/Regulatory Authorities, c) Public Sector Undertakings, d) Scheduled Commercial Banks, e) Public Financial Institutions, f) Colleges affiliated to Universities (this can be treated as valid only till the time the applicant is a student), g) Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members, and h) Credit cards/Debit cards issued by Banks.

    Proof of Address (POA): The address of the Client would be verified from one of the following:

    • Ration card
    • Passport
    • Voter ID Card
    • Driving license
    • Bank passbook / Bank Statement
    • Unique Identification Number (UID) (Aadhar Card)
    • Verified copies of a) Electricity bills (not more than three months old), b) Residence Telephone bills (not more than three months old) and c) Leave and License agreement / Agreement for sale.
    • Self-declaration by High Court & Supreme Court judges, giving the new address in respect of their own accounts.
    • Identity card/document with address, issued by a) Central/State Government and its Departments, b) Statutory/Regulatory Authorities, c) Public Sector Undertakings, d) Scheduled Commercial Banks, e) Public Financial Institutions, f) Colleges affiliated to Universities (this can be treated as valid only till the time the applicant is a student) and g) Professional Bodies such as ICAI, ICWAI, Bar Council etc., to their Members.

    In case of Non-Individuals, additional documents to be obtained from non individuals, over & above the POI & POA, as mentioned below:

    Corporate

    • Copy of the balance sheets for the last 2 financial years (to be submitted every year)
    • Copy of latest share holding pattern including list of all those holding control, either directly or indirectly, in the company in terms of SEBI takeover Regulations, duly certified by the company secretary/Whole time director/MD (to be submitted every year)
    • Photograph, POI, POA, PAN and DIN numbers of whole time directors/two directors in charge of day to day operations.
    • Photograph, POI, POA, PAN of individual promoters holding control - either directly or indirectly.
    • Copies of the Memorandum and Articles of Association and certificate of incorporation.
    • Copy of the Board Resolution for investment in securities market.
    • Authorised signatories list with specimen signatures.

    Partnership firm

    • Copy of the balance sheets for the last 2 financial years (to be submitted every year).
    • Certificate of registration (for registered partnership firms only).
    • Copy of partnership deed.
    • Authorised signatories list with specimen signatures.
    • Photograph, POI, POA, PAN of Partners.

    Trust

    • Copy of the balance sheets for the last 2 financial years (to be submitted every year).
    • Certificate of registration (for registered trust only).
    • Copy of Trust deed.
    • List of trustees certified by managing trustees/CA.
    • Photograph, POI, POA, PAN of Trustees.

    HUF

    • PAN of HUF.
    • Deed of declaration of HUF/ List of coparceners.
    • Bank pass-book/bank statement in the name of HUF.
    • Photograph, POI, POA, PAN of Karta.

    Unincorporated association or a body of individuals

    • Proof of Existence/Constitution document.
    • Resolution of the managing body & Power of Attorney granted to transact business on its behalf.
    • Authorized signatories list with specimen signatures.

    Banks/Institutional Investors

    • Copy of the constitution/registration or annual report/balance sheet for the last 2 financial years.
    • Authorized signatories list with specimen signatures.

    Foreign Institutional Investors (FII)

    • Copy of SEBI registration certificate.
    • Authorized signatories list with specimen signatures.

    Army/ Government Bodies

    • Self-certification on letterhead.
    • Authorized signatories list with specimen signatures.

    Registered Society

    • Copy of Registration Certificate under Societies Registration Act.
    • List of Managing Committee members.
    • Committee resolution for persons authorised to act as authorised signatories with specimen signatures.
    • True copy of Society Rules and Bye Laws certified by the Chairman/Secretary

    GANESH GANGA INVESTMENT PRIVATE LIMITED shall carry out Know Your Client for Eligible Foreign Investors as per the category specified below

    Category I

    Government and Government related foreign investors such as Foreign Central Banks, Governmental Agencies, Sovereign Wealth Funds, International/ Multilateral Organizations/ Agencies.

    Category II

    • Appropriately regulated broad based funds such as Mutual Funds, Investment Trusts, Insurance / Reinsurance Companies, Other Broad Based Funds etc.
    • Appropriately regulated entities such as Banks, Asset Management Companies, Investment Managers/ Advisors, Portfolio Managers etc.
    • Broad based funds whose investment manager is appropriately regulated
    • University Funds and Pension Funds
    • University related Endowments already registered with SEBI as FII/Sub Account

    Category III

    All other eligible foreign investors investing in India under PIS route not eligible under Category I and II such as Endowments, Charitable Societies/Trust, Foundations, Corporate Bodies, Trusts, Individuals, Family Offices, etc.

    List of KYC Documents to be obtained for Eligible Foreign Investor as defined above as per its category:

    Category I

    • Entity Level
      • Constitutive Docs
      • Proof Of Address - Power of Attorney, mentioning the address is acceptable as address proof
      • PAN Card
      • SEBI Registration Certificate
      • KYC Form
    • Senior Management (Whole Time Directors/ Partners/ Trustees/ etc)
      • List
    • Authorized Signatories
      • List & Signatures - required - list of Global Custodian ('GC') signatories can be given in case of POA to GC

    Category II

    • Entity Level
      • Constitutive Docs
      • Proof Of Address - Power of Attorney, mentioning the address is acceptable as address proof
      • PAN Card
      • SEBI Registration Certificate
      • Board Resolution
      • KYC Form
    • Senior Management (Whole Time Directors/ Partners/ Trustees/ etc)
      • List
    • Authorized Signatories
      • List & Signatures - required - list of Global Custodian ('GC') signatories can be given in case of POA to GC
    • Ultimate Beneficial Owner ('UBO')
      • List - can declare "no UBO over 25%"

    Category III

    • Entity Level
      • Constitutive Docs
      • Proof Of Address - Address proof other than Power of Attorney should be submitted
      • PAN Card
      • Financials - Risk Based Financial data sufficient
      • SEBI Registration Certificate
      • Board Resolution
      • KYC Form
    • Senior Management (Whole Time Directors/ Partners/ Trustees/ etc)
      • List
      • Proof of Identity - Entity declares on letterhead - full name, nationality and DoB or Photo Identity proof
      • Proof of address - Declaration on letterhead
    • Authorized Signatories
      • List & Signatures
      • Proof of Identity
      • Photographs
    • Ultimate Beneficial Owner ('UBO')
      • List
      • Proof of Identity

    Basic KYC Norms to be followed for verification / scrutiny

    • The photograph in the PAN card and in any other address proof which contains a photograph must match. This should be followed to ensure that no account is opened in anonymous or fictitious names.
    • Proof should be collected for both permanent address and correspondence address and the same should be verified with originals.
    • Notwithstanding the above, the Company should prohibit doing business with any individual or entity whose identity cannot be determined or who refuses to provide information or who have provided information that contains significant inconsistencies which cannot be resolved after due investigation.
    • In case of Non Resident clients, remittance only from authorized banking channels will be accepted.

    C. OTHER DUE DILIGENCE

    Any communication in respect of the Client shall be with the Client only.

    In case client is a trust:

    Conduct ongoing due diligence and scrutiny, i.e. Perform ongoing scrutiny of the transactions and account throughout the course of the business relationship to ensure that the transactions being conducted are consistent with the registered intermediary’s knowledge of the client, its business and risk profile, taking into account, where necessary, the client’s source of funds; and

    The CDD process shall necessarily be revisited when there are suspicions of money laundering or financing of terrorism (ML/FT).

    KYC carried out by KYC Registration Agencies registered with SEBI shall be accepted as a valid KYC for onboarding a client provided due process in relation to the same under the regulations are followed.

    Monitoring transactions and ongoing due diligence and scrutiny

    At regular interval, ongoing due diligence and scrutiny shall be conducted i.e. perform ongoing scrutiny of the transactions and account throughout the course of the business relationship to ensure that the transactions being conducted are consistent with the Organization’s knowledge of the client, its business and risk profile, taking into account, where necessary, the customer’s source of funds.

    GANESH GANGA INVESTMENT PRIVATE LIMITED shall apply higher levels of due diligence when an account is operated by a Power of attorney holder or where an account is opened by an intermediary in fiduciary capacity. KYC documents will be taken for both the mandate holder/intermediary in fiduciary capacity and the account holder.

    Periodicity of Updation of documents obtained during account opening:

    KYC exercise to be done at least every two years for high risk customers, every eight years for medium risk customers and every ten years for low risk customers. Full KYC includes all measures for confirming identity and address and other particulars of the customer that the GANESH GANGA INVESTMENT PRIVATE LIMITED considers necessary based on the risk profile of the customer.

    KYC exercise including but not limited to Positive confirmation (obtaining KYC related updates through e-mail / letter / etc/Website Updation) for confirming identity & address & other particulars of client.

    The time limits prescribed above would apply from the date of opening of the• account/ last verification of KYC.

    D. SUSPICIOUS TRANSACTIONS IDENTIFICATION, MONITORING& REPORTING

    (i) The Suspicious Transaction Report (STR) shall be furnished within 7 days of arriving at a conclusion that any transaction,or a series of transactions integrally connected are of suspicious nature. The Principal Officer shall record his/her reasons for treating any transaction or a series of transactions as suspicious. It shall be ensured that there is no undue delay in arriving at such a conclusion once a suspicious transaction report is received from a branch or any other office. Such report shall be made available to the competent authorities on request.

    (ii) While determining suspicious transactions, GANESH GANGA INVESTMENT PRIVATE LIMITED shall be guided by definition of suspicious transaction contained in the Rules as amended from time to time.

    (iii) An indicative list of suspicious activities contained is provided along with this policy. (Annexure II)

    (iv) While ensuring that there is no tipping off to the customer at any level, GANESH GANGA INVESTMENT PRIVATE LIMITED may put restrictions on operations in the accounts where an STR has been made.

    Suspicious transactions reporting to Financial Intelligence Unit-India (FIU-IND)

    In terms of the Rules, GANESH GANGA INVESTMENT PRIVATE LIMITED shall report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (FIU-IND) in respect of transactions referred to in Rule 3 at the following address or any other address as may be specified by FIU from time to time:

    To The Director, FIU-IND, Financial Intelligence Unit-India, 6th Floor, Hotel Samrat, Chanakyapuri, New Delhi -110021, India Website: http://fiuindia.gov.in

IV. MAINTENANCE OF RECORDS OF TRANSACTIONS / INFORMATION TO BE PRESERVED / MAINTENANCE AND PRESERVATION OF RECORDS

Government of India, Ministry of Finance, Department of Revenue, vide its notification dated July 1, 2005 in the Gazette of India, has notified the Rules under the PMLA Act. In terms of the Rules, the provisions of PMLA Act, 2002 came into effect from July 1, 2005. Section 12 of the PMLA, 2002 casts certain obligations on financial institutions in regard to preservation and reporting of customer account information.

Maintenance of records of transactions: GANESH GANGA INVESTMENT PRIVATE LIMITED shall have a system of maintaining proper record of all transactions including records of all transactions prescribed under Rule 3 of the Rules, as mentioned below:

Information to be preserved: GANESH GANGA INVESTMENT PRIVATE LIMITED shall maintain and preserve the following information in respect of transactions referred to in Rule 3 of the Rules including all necessary information specified by the regulator to permit reconstruction of individual transactions in respect of transactions referred to in Rule 3 of the Rules:

Retention of Records GANESH GANGA INVESTMENT PRIVATE LIMITED shall take appropriate steps to evolve a system for proper maintenance and preservation of account information in a manner that allows data to be retrieved easily and quickly whenever required or when requested by the competent authorities.

GANESH GANGA INVESTMENT PRIVATE LIMITED shall observe following document retention terms:

GANESH GANGA INVESTMENT PRIVATE LIMITED shall maintain and preserve a records for a period of five years from the date of transaction between GANESH GANGA INVESTMENT PRIVATE LIMITED and the client, all necessary records of transactions, both domestic or international, which will permit reconstruction of individual transactions (including the amounts and types of currency involved if any) so as to provide, if necessary, evidence for prosecution of persons involved in criminal activity.

GANESH GANGA INVESTMENT PRIVATE LIMITED shall maintain and preserve the record of documents evidencing the identity of its clients (e.g. copies or records of official identification documents like passport, identity cards, driving licenses or similar documents) as well as accounts file and business correspondence for a period of five years after the business relationship between a client and GANESH GANGA INVESTMENT PRIVATE LIMITED has ended or the account has been closed whichever is later.

GANESH GANGA INVESTMENT PRIVATE LIMITED shall maintain and preserve the records of information related to transactions, whether attempted or executed, which are reported to the Director, FIU-IND, as required under Rules 7 & 8 of the PML Rules, for a period of five years from the date of the transaction between the client and the Company or until it is confirmed that the case has been closed.

V. FREEZING OF FUNDS, FINANCIAL ASSETS OR ECONOMIC RESOURCES OR RELATED SERVICES :

Section 51A, of the Unlawful Activities (Prevention) Act, 1967 (UAPA), relating to the purpose of prevention of, and for coping with terrorist activities was brought into effect through UAPA Amendment Act, 2008. In this regard, the Central Government has issued an Order dated August 27, 2009 detailing the procedure for the implementation of Section 51A of the UAPA. Under the aforementioned Section, the Central Government is empowered to freeze, seize or attach funds and other financial assets or economic resources held by, on behalf of, or at the direction of the individuals or entities listed in the Schedule to the Order, or any other person engaged in or suspected to be engaged in terrorism.

The Government is also further empowered to prohibit any individual or entity from making any funds, financial assets or economic resources or related services available for the benefit of the individuals or entities listed in the Schedule to the Order or any other person engaged in or suspected to be engaged in terrorism.

Accordingly, the aforesaid obligations shall be followed by GANESH GANGA INVESTMENT PRIVATE LIMITED to ensure the effective and expeditious implementation of said Order has been issued vide SEBI Circular ref. no: ISD/AML/CIR- 2/2009 dated October 23, 2009.

VI. CUSTOMER EDUCATION / EMPLOYEES’ TRAINING / EMPLOYEES’HIRING

Implementation of KYC procedures requires GANESH GANGA INVESTMENT PRIVATE LIMITED to demand certain information from customer which may be of personal nature or which has hitherto never been called for. This sometimes leads to a lot of questioning by the customer as to the motive and purpose of collecting such information. The Team Leaders/ Relationship Managers shall explain to the customers the regulatory requirements and benefits of adhering to the KYC guidelines and seek co-operation of the customer.

GANESH GANGA INVESTMENT PRIVATE LIMITED shall have an ongoing employee training programme so that the members of the staff are adequately trained in KYC/AML procedures and fully understand the rationale behind the KYC/AML policies and implement them consistently.

Further, Compliance department should periodically sensitize the staffs with regards to compliance norms and the amendments in law from time to time.

KYC norms / AML standards / CFT measures have been prescribed to ensure that criminals are not allowed to misuse our infrastructure. It should therefore, be necessary that adequate screening mechanism is put in place by the Company as an integral part of their recruitment / hiring process of personnel. The Human Resources department confirms the previous employment details given by the employee with prior employer.

VII. REVIEW

The policy and procedures on the prevention of anti money laundering and terrorist financing shall be reviewed annually to ensure their effectiveness in accordance with regulatory changes.

Further, in order to ensure the effectiveness of policies and procedures, the person doing such a review shall be different from the one who has framed such policies and procedures.

ANNEXURE I: RISK CATEGORISATION FOR ACCOUNTS IN THE NAME OF INDIVIDUALS

Salaried (Low risk) Source on income is fixed and pattern of entries in the account can be correlated with known sources of income/ expenditure.

Senior citizens (Medium / High Risk) Source of income for trading related purposes not known clearly. May be operated by third parties. Will be considered high risk in case operating in F&O

House-wife (Medium / High Risk) Source of income for trading related purposes not known clearly. May be operated by third parties. Will be considered high risk in case operating in F&O

Self Employed Professionals/ Businessmen (Low risk) (except professionals associated with the film industry who will be categorized as “Medium” risk). Accounts maintained by Chartered Accountants, Architects, Doctors, Lawyers, Sportsmen, etc.

Non Resident Individuals (Low / Medium risk) Transactions are regulated through AuthoriseDealers and the accounts are opened only after IPV. In case an IPV is not performed and we have relied on documentation submitted by the client, the account would be categorised as medium risk.

Politically Exposed Persons resident outside India (High Risk) Politically exposed persons are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g. Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc. Branches should gather sufficient information on any person/customer of this category intending to establish a relationship and check all the information available on the person in the public domain. Front end staff should verify the identity of the person and seek information about the sources of funds before accepting the PEP as a customer. Such accounts should be subjected to enhance monitoring on an ongoing basis. The above norms should also be applied to the accounts of the family members and close relatives of PEPs. Further GANESH GANGA INVESTMENT PRIVATE LIMITED may maintain a list of additional accounts as “Designated PEP” The accounts of Politically Exposed Persons resident outside India shall be opened only after obtaining the approval of Business Head. Further, in the event of an existing customer or the beneficial owner of an account subsequently becoming PEP, Business head approval would be required to continue the business relationship and such accounts would be subjected to Customer Due Diligence measures as applicable to the customers of PEP category including enhanced monitoring on an ongoing basis. In such events GANESH GANGA INVESTMENT PRIVATE LIMITED shall be guided by the information provided by the clients or front end teams.

NOTE: If any of the above accounts are operated by Power of Attorney (POA) holder/mandate holder, then the account will be categorized as “High Risk”.

RISK CATEGORISATION FOR ACCOUNTS IN THE NAME OF NON INDIVIDUALS

Risk categorization of Non Individual customers can be done basis:

A. Type of Entity

Private Ltd/Public Ltd Companies (Low / Medium / High risk) Depending on the clarity of the shareholding structure and the nature of operations, such companies would be classified.

Local Authorities or Public Bodies (Low Risk) These types of entities are governed by specific Acts, Notifications etc framed by the Government of India or the State Govt and are controlled and run by the Govt.

Mutual Funds/Scheduled Commercial Banks/Insurance Companies/Financial Institutions (Low Risk) These entities are strictly regulated by their respective regulators.

Partnership Firm (Low / Medium / High risk) Depending on the clarity of the shareholding structure and the nature of operations, such entities would be classified. Such classifications shall be decided post the review of the compliance officer

Trusts – Public Charitable Trust (Medium / High Risk) Depending on the clarity of the beneficial ownership and the nature of operations, such entities would be classified. Such classifications shall be decided post the review of the compliance officer

Hindu Undivided Family (HUF) (Medium Risk) These are unregistered bodies and the pattern of entries in the account may not be correlated with known sources of income/ expenditure.

Societies / Associations /Clubs (High Risk) (except ‘Housing Societies’ which will be categorized as “Low” risk) These are not highly regulated entities and the pattern of entries in the account may not be correlated with known sources of income/expenditure.

Trusts – Private Trust (High Risk) These may be unregistered trusts and the pattern of entries in the account may not be correlated with known sources of income/ expenditure.

Co-operative Banks (High Risk) These are not highly regulated entities.

B & C. Basis Industry and Country of Domicile

High Risk

Industry - The Risk categorisation is dependent on industries which are inherently High Risk or may exhibit high cash intensity, as below:

Medium Risk

None

Low Risk

All other industries

Notes:

  1. Higher Risk Categorization derived from either A or B or C shall be the applicable risk categorization for the account.
  2. Lowering of risk classification shall be carried out by the Compliance officer in consultation with the Chief Risk Officer. This shall be done only where adequate justifications can be provided and the same are mentioned along with the account opening form.
  3. Such justifications shall be reviewed 3 months from the date of account opening / first transaction in order to ensure that the classification is proper.

ANNEXURE II: AN INDICATIVE LIST OF SUSPICIOUS ACTIVITIES:

Whether a particular transaction is suspicious or not will depend upon the background details of the client, details of the transactions and other facts and circumstances. Followings are the circumstances, which may be in the nature of suspicious transactions