This Policy is made to govern transactions with "related parties" as defined in the Companies Act 2013.
All transactions with Related Parties shall be carried out at arm's length principle – i.e A transaction between the company and the related party shall be conducted as if they were unrelated , so that there is no conflict of interest
Approval Mechanism :
- All Related Party Transactions shall require prior approval of the Audit Committee. In cases , where Audit Committee is not constituted , all related party transactions shall require Board of Directors approval.
- All related party transactions or any subsequent modifications thereof will be approved by the Audit Committee. In cases , where Audit Committee is not constituted , all related party transactions shall require Board of Directors approval.
- Any related party transactions that are not in the ordinary course of business or not at arm's length basis shall have to be mandatorily approved by the Board of Directors.
- The following transactions that are either not at arm's length or not in the ordinary course of business shall also be approved by a ordinary resolution of shareholders :
- Sale, purchase or supply of any goods or materials exceeding 25% of the annual turnover
- Selling or otherwise disposing off or buying property of any kind exceeding 10% of net worth
- Leasing of property of any kind in excess of 10% of net worth or exceeding 10% of turnover
- Availing or rendering of any services in excess of 10% of net worth
- Appointment to any office or place of profit in the company at a monthly remuneration exceeding Rs 250,000 per month
- Remuneration for underwriting the subscription of any securities of the company or derivatives thereof in excess of 1% of the net worth
- Where any director is interested in any contract or arrangement with a related party , such director shall not be present at the meeting during discussions on the subject matter of the resolution relating to such contract or arrangement
- The agenda of the Board meeting at which such related party transactions are proposed to be approved shall disclose all details of the transactions like
- The name of the related party and the relationship
- Particulars of the contract, nature and duration
- The material terms of the contract including the value, if any
- The manner of determining the pricing and other commercial terms of the contract
- Any advance paid or received for the contract
- Whether all factors relevant to the contract have been considered and if not , the details of the factors not considered together with the rationale
- Any other information relevant or important for the Board to take a decision on the proposed transaction
- Where a ordinary resolution of the shareholders is required for approving the related party transaction, no member of the company shall vote on such a ordinary resolution, if the member is a related party.
- The explanatory statement to be annexed to the notice of a general meeting where a ordinary resolution is to be passed for approving the related party transaction shall contain the following particulars –
- Name of the related party
- Name of the director or key managerial personnel who is related, if any
- Nature of relationship
- Nature, material terms, monetary value and particulars of the contract proposed to be entered into with the related party
- Any other information relevant or important for the members to take a decision on the proposed resolution
The Board of Directors Report to shareholders will disclose justification for entering into transactions with related parties
Details of all material transactions with related parties shall be disclosed by the Audit Committee / Board along with Compliance report on corporate governance.
The company shall disclose the policy on dealing with Related Party Transactions in its Annual Report.
Policy on Related Party Transactions