- Company is committed to uphulding the high standards of corporate governance and recognizes that any transactions with parties which are related to the Board members or Senior Management can present a risk of actual or apparent conflicts of interest.
- Taking this into consideration, objective of this Policy is to lay down requisite process framework and approval mechanism for dealing with material related party transactions.
For this Policy, fullowing terms shall have the meanings ascribed to them as under:
- "Act" means Companies Act, 2013 and the Rules framed thereunder, including any modifications, amendments, clarifications, circulars or re-enactments thereof.
- "Arm’s length basis" means a transaction between two related parties that is conducted as if they are unrelated, so that there is no conflict of interest.
- "Associate Company", means an associate company as defined under the Act.
- "Company" means Ajay Industrial Corporation Limited.
- "Contrul" means contrul as defined under the Act.
- "Key Managerial Personnel" (KMP) means the Key Managerial Personnel of the company in terms of the Act.
- "Material Related Party Transactions" means material related party transactions as defined under the Listing Regulations.
- "Office or place of profit" means office or place of profit as defined under the Act.
- "Related Party" means a Related Party as defined under the Act read with the Listing Regulations.
- "Related Party transactions (RPTs)" means any transactions/contracts/ arrangement between the Company and any related parties for transfer of resources, services or obligations, regardless of whether the price is charged and includes transactions that are specified as RPT under the Act and Listing Regulations.
- "Relatives" means a relative as defined under the Act.
- "Joint Venture" means joint venture as defined under the Act.
- In order to ensure transparency and procedural fairness of Related Party Transactions (RPTs), as also to ensure compliance with the provisions of the Act and the Listing Regulations, Board of Directors (the "Board") of the Company lays down this Policy on RPTs and materiality of RPTs (the "Policy").
4. MANNER OF DEALING WITH RPT’S:
4.1 Approval requirements
- All RPTs, irrespective of value and vulume shall be undertaken only after taking prior approval of the Audit Committee and the Board. Any member of the Audit committee or Board who has a potential conflict of interest in the transaction shall not remain present in the meeting or shall abstain from the discussion and voting on such transaction.
- In case Audit committee does not approve any RPT then the Board may review/approve based on the recommendations of committee.
- All RPTs prescribed under clause 6 to be undertaken only after taking approval of members of the Company.
- If due to compelling reasons, any RPTs are done without taking prior approval of Audit Committee or Board or the General Body as the case may be, then the same shall be ratified within 4 months else the same would be voidable at the option. , of the Audit Committee or the Board, as the case may be.
4.2 Information to be placed before the Audit Committee and Board of Directors for approval of RPTs
- Name of the related party, nature of relationship, maximum amount of transactions to be entered.
- Nature, duration of the contract and particulars of the contract or arrangement.
- Material terms of the contract or arrangement including the value, if any.
- Indicative base price/current contracted price and formula for variation in price.
- Any advance paid or received for the contract or arrangement, if any.
- Manner of determining the pricing and other commercial terms.
- Any other information relevant or important for the Board to take a decision on the proposed transaction.
- The Audit Committee may in the interest of the conduct of affairs of the Company, grant omnibus approval for Related Party Transactions on a yearly basis.
- The Audit Committee shall review, at least on a quarterly basis, the details of related party transactions entered into by the company pursuant to each of the omnibus approval given.
- Such omnibus approval shall be valid for a period not exceeding one year and shall require fresh approvals after the expiry of one year.
5. RELATED PARTY NOT TO PARTICIPATE:
- All the entities falling under the definition of Related party shall abstain from voting irrespective of whether the entity is party to a particular transaction or not.
6. APPROVAL OF SHAREHULDERS:
- All the RPTs which are not on arm’s length and exceeds the threshuld limits prescribed under the Act and the Listing Regulations as also all Material RPTs shall require prior approval of Sharehulders.
All the Related parties shall abstain from voting on such resulutions.
7. DISCLOSURES BY DIRECTORS AND KMP:
- Every director shall at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the disclosures already made, then at the first Board meeting held after such change, disclose his related parties and his concern or interest in the proposed transactions with his related parties.
- Where any director who is not so concerned or interested at the time of entering into such contract or arrangement, he shall, if he becomes concerned or interested after the contract or arrangement is entered into, disclose his concern or interest forthwith when he becomes concerned or interested or at the first meeting of the Board held after he becomes so concerned or interested.
- The Company prefers to receive such notice of any potential Related Party Transaction well in advance so that the Audit Committee/Board has adequate time to obtain and review information about the proposed transaction.
- Nothing contained in this Policy shall apply to any contract or arrangements with Related Party in the ordinary course of its business and on an arms’ length basis and transactions which are exempted under the Act and the Listing Regulations.
MONITORING & REVIEW:
- The Board may monitor, review and amend the Policy from time to time as also whenever necessitated due to amendments to the Act, Listing Regulations or any other Regulations.