Policy on Related Party Transactions and Material Subsidiaries

  1. PREAMBLE

    Anupam Rasayan India Limited (the “Company”) recognises that related party transactions (“RPT”) can present a potential or actual conflict of interest which may raise questions about whether such transactions are consistent with the best interests of the Company and its stakeholders. The Board of Directors (“Board”) of the Company has adopted the following policy with regard to related party transactions (RPT) pursuant to the provisions of Memorandum and Articles of Association of the Company, Section 177, 188 and other applicable provisions of the Companies Act, 2013 (“Act”) and the Rules framed thereunder and the Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”) as amended from time to time and any other laws and regulations as may be applicable to the Company.

  2. OBJECTIVE

    The objective of this policy is to set out the materiality thresholds for related party transactions (RPTs), the manner of dealing with the RPTs based on the Act, SEBI LODR and any other laws and regulations that may be applicable. This forms guidelines for identification of related parties and proper conduct and documentation for all RPTs.

  3. DEFINITIONS

    “Audit Committee” shall mean the Audit Committee constituted by the Board of the Company from time to time, in accordance with the provisions of the Act and SEBI LODR.

    “Board” shall mean the collective body of the directors of the Company constituted from time to time in line with the provisions of the Act and SEBI LODR.

    “Related Party” with reference to the Company, Related Party shall have the meaning as defined in Section 2(76) of the Act and Regulation 2(1)(zb) of SEBI LODR as amended from time to time.

    “Related Party Transaction” of “RPT” means such transactions as specified under Section 188 of the Act or rules made thereunder and the SEBI LODR including any amendments or notification thereof as may be applicable.

    “Relative” means relative as defined under sub section (77) of section 2 of the Act and Rules prescribed thereunder.

  4. MATERIALITY THRESHOLDS

    A Related Party Transaction shall be considered material if the transactions to be entered individually or taken together with previous transactions during a financial year, exceeds 10% (ten percent) of the annual consolidated revenue of the Company as per last audited financial statements of the Company.

  5. MANNER OF DEALING WITH RELATED PARTY TRANSACTIONS

    All Related Party Transactions must be reported to the Audit Committee for its approval in accordance with this Policy:

    • Identification of Related Parties:

      Each Director and key managerial personnel is responsible for providing notice to the Board/Audit Committee of any potential Related Party Transaction involving him or her or his or her Relative, including any additional information about the transaction that the Board/Audit Committee may reasonably request. The Board/Audit Committee will determine whether the transaction does, in fact, constitute a Related Party Transaction requiring compliance with this policy. The Director and Key Managerial Personnel shall send notice of any potential Related Party Transaction.

      The Company will keep list of Related Parties in appropriate computer system.

      Audit Committee may determine the procedure to be followed for declaration as well as compilation and circulation of the comprehensive list of Related Parties.

    • Identification of Related Party Transactions:

      The concerned department / executive of the Company entering into a transaction shall identify related party transactions based on the list of Related Parties as mentioned above, in accordance with Section 177 and 188 of the Act and Regulation 23 of SEBI LODR. Thereafter the concerned department entering into the transaction shall establish whether the transaction is at arm’s length and in the ordinary course of business or whether the transaction is material.

    • Procedure for approval of RPTs:
      • All RPTs require prior approval of the Audit Committee.
      • Any member of the Audit Committee who has a potential interest in any Related Party Transaction will abstain from discussion and voting on the approval of the Related Party Transaction.
      • In case of a transaction, other than transactions referred to in Section 188 of the Act, and where Audit Committee does not approve the transaction, it shall make its recommendations to the Board
    • Omnibus approval of the Audit Committee:

      The Company may obtain omnibus approval from the Audit Committee for RPTs. Such omnibus approval shall be valid for a period of one year and shall require fresh approvals after the expiry of one year. The maximum value of the transactions, in aggregate, which can be allowed under omnibus route in a year will be 25% of the annual consolidated turnover of the Company as per last its audited financial statements and maximum value per transaction.

      The Audit Committee shall consider the following factors while specifying the criteria for making omnibus approval:

      • Repetitiveness of the transactions (in past or in future);
      • Justification for the need of omnibus approval

      Transaction of following nature will not be subject to the omnibus approval of the Audit Committee:

      • Transactions which are not at arm’s length or not in the ordinary course of business;
      • Transactions which are not repetitive in nature;
      • Transactions exceeding materiality thresholds as laid down in this Policy;
      • Transactions in respect of selling or disposing of the undertaking of the Company;
      • Financial Transactions eg. Loan to related parties, Inter Corporate Deposits, subscriptions to bond, debenture or preference shares issued by the related parties, corporate guarantee given/received from related parties
      • Any other transaction the Audit Committee may deem not fit for omnibus approval
    • Approval of the Board of Directors of the Company:

      As per the provisions of Section 188 of the Act, all kinds of transactions specified under the said Section and which are not in the ordinary course of business or at arm’s length basis, shall be placed before the Board for its approval. Such approval shall be granted only by means of a resolution passed at a meeting of the Board. The Company may fit consider necessary and shall if the Audit Committee or Board so requires, seek external professional opinion to determine whether a RPT is in ordinary course of business or at arm’s length.

      In addition to the above, the following kinds of transactions with related parties shall also be placed before the Board for its approval:

      • Transactions which may be in ordinary course of business and at arm’s length basis but which are as per the policy determined by the Board from time to time (i.e. value threshold or other parameters) require Board approval in addition to Audit committee approval.
      • Transactions in respect of which the Audit Committee is unable to determine whether or not they are in ordinary course of business or are at arm’s length basis and decides to refer the same to the Board for approval.
      • Transactions which are in the ordinary course of business and at arm’s length basis but which in Audit Committee’s view requires Board approval.
      • Transactions exceeding the materiality thresholds laid down in this policy, which are intended to be placed before the shareholders for approval.
    • Transactions with wholly owned subsidiary companies:

      Prior approval of the Audit Committee will not be required in case of transactions entered into between the Company and its wholly owned subsidiary company whose accounts are consolidated with the accounts of the Company and are placed before the shareholders of the Company at general meeting for approval.

    • Exclusions:

      Notwithstanding the foregoing, the following RPTs shall not require approval of the Audit Committee or the Board or shareholders of the Company:

      • Any transaction that involves the providing of compensation to a director or key managerial personnel of the company in relation with his or her duties to the Company or any of its subsidiaries or associates, including the reimbursement of reasonable business and travel expenses incurred in the ordinary course of business.
      • Any transaction in which the Related Party’s interest arises solely from ownership of the securities issued by the Company and all holders of such securities receive the same benefits pro rata as the Related Party.
  6. RELATED PARTY TRANSACTIONS WITHOUT APPROVAL:
    • Review/ratification by Audit Committee:
      • In the event the Company becomes aware of a RPT with a Related Party that has not been approved under this policy prior to its consummation, the matter shall be reviewed by the Audit Committee.
      • The Audit Committee shall consider all of the relevant facts and circumstances regarding the RPT, and shall evaluate all options available to the Company including ratification, revision or termination of the RPT.
      • The Audit Committee shall also examine the facts and circumstances pertaining to the failure of reporting of such RPT to the Audit Committee under this policy and shall give directions or take any such actions it deems appropriate.
      • In the case where the Audit Committee determines not to ratify a RPT that has been commenced without approval, the Audit Committee as appropriate may direct additional actions including but not limited to immediate discontinuation or rescission of the transaction. In connection with any review of a RPT, the Audit Committee has the authority to modify or waive any procedural requirements of this policy.
    • Ratification by the Board:

      In case any RPT is entered into by a director or any other employee of the Company without obtaining the consent of the Board or approval by a resolution by the Company and if it is not ratified by the board or as the case may be by the shareholders at a meeting within three months from the date on which such transaction was entered into, such transaction shall be voidable at the option of the Board and if the contract or arrangement is with the Related Party to any director, or is authorized by any other director, the directors concerned shall indemnify the Company against any losses incurred by it.

  7. MATERIAL SUBSIDIARY COMPANIES:

    A subsidiary shall be considered as material if the income or the net worth of the subsidiary exceeds 10% of the consolidated income or net worth, as the case may be, as per the audited balance sheet of the previous financial year of the Company.

    The Company shall not dispose of shares in its material subsidiary which would reduce its shareholding (either on its own or together with other subsidiaries) to less than 50% or cease exercise of control over the subsidiary without passing a special resolution in its General Meeting except in cases where such divestments is made under a scheme of arrangement duly approved by a court /tribunal or under as resolution plan duly approved under Section 31 of the Insolvency and Bankruptcy Code 2016 and such an event is disclosed to the recognized stock exchanges within one day of the resolution plan being approved.

    Selling disposing and leasing of assets amounting to more than 20% of the assets of the material subsidiary on an aggregate basis during a financial year shall require prior approval of shareholders of the Company by way of special resolution, unless the sale/ disposal/lease is made under a scheme of arrangement duly approved by a court/tribunal or under a resolution plan duly approved under section 31 of the Insolvency and Bankruptcy Code 2016 and such an event is disclosed to the recognised stock exchanges within one day of the resolution plan being approved.

  8. LIMITATION:

    In the event of any conflict between the provisions of this policy and of the Act or SEBI LODR or any other statutory enactments, rules, the provisions of the Act, SEBI LODR or statutory enactments, rules shall prevail over this policy.

  9. DISCLOSURES:

    RPTs and this policy shall be disclosed as per the requirements of the applicable law including provisions of the Act read with relevant rules made thereunder and as per SEBI LODR. This policy shall also be uploaded on the website of the Company and a weblink shall be given in the annual report of the Company.

  10. AMENDMENTS AND REVIEWS:

    The Board shall review and may amend this policy from time to time after taking recommendations from the Audit Committee into account.

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