D & H India LIMITED
POLICY ON RELATED PARTY TRANSACTIONS
The Board of Directors (the “Board”) of D & H India Limited (the “Company”), has adopted the following policy and procedures with regard to Related Party Transactions as defined below.
This policy is to regulate transactions between the Company and its Related Parties based on the applicable laws and regulations applicable on the Company.
This policy is to regulate transactions between the Company and its Related Parties based on the applicable laws and regulations applicable to the Company and also provides for materiality of related party transactions.
This policy is framed based on Listing Agreement entered by the Company with the Stock Exchanges and primarily intended to ensure the governance and reporting of transactions between the Company and its Related Parties.
“Audit Committee or Committee” means Committee of Board of Directors of the Company constituted under provisions of the Clause 41 of the Listing agreement and Companies Act, 2013.
“Board” means Board of Directors of the Company
“Control” shall have the same meaning as defined in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
“Key Managerial Personnel” means key managerial personnel as defined under the Companies Act, 2013 and includes,
(i) Managing Director, or Chief Executive Officer or manager and in their absence, a whole-time director;
(ii) Company Secretary; and
(iii) Chief Financial Officer
“Material Related Party Transaction” means a transaction with a related party as defined under the Clause 49 of the Listing Agreement and the Companies (Meetings of Board and its Powers) Rules, 2014 as the case may be applicable from time to time.
“Policy” means Related Party Transaction Policy.
“Related Party” means related party as defined in Clause 49 of the Listing Agreement read with the Section 2(76) of the Companies Act, 2013 and the rules made there under.
“Related Party Transaction” means any transaction directly or indirectly involving any Related Party which is a transfer of resources, services or obligations between a company and a related party, regardless of whether a price is charged.
“Relative” means relative as defined under section 2(77) of the Companies Act, 2013 read with the Rule 4 of the Companies (Specification and Definition) Rules 2014.
All Related Party Transactions must be reported and approved by the Audit Committee in its meeting in accordance with this Policy.
The Audit Committee shall review and amend this policy from time to time.
4.1 Identification of Potential Related Party Transactions
Each director and Key Managerial Personnel is responsible for providing notice to the Board or 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. Board/Audit Committee will determine whether the transaction does, in fact, constitute a Related Party Transaction requiring compliance with this policy.
The Company strongly 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.
4.2 Prohibitions related to Related Party Transactions
All Related Party Transactions shall require prior approval of Audit Committee.
Further, all Material Related Party Transactions shall require approval of the shareholders through special resolution and the Related Parties shall abstain from voting on such resolutions.
4.3 Review and Approval of Related Party Transactions
Related Party Transactions will be referred to the next regularly scheduled meeting of Audit Committee for review and approval. Any member of the Committee who has a potential interest in any Related Party Transaction will recues himself or herself and abstain from discussion and voting on the approval of the Related Party Transaction.
To review a Related Party Transaction, the Committee will be provided with all relevant material information of the Related Party Transaction, including the terms of the transaction, the business purpose of the transaction, the benefits to the Company and to the Related Party, and any other relevant matters. In determining whether to approve a Related Party Transaction, the Committee will consider the following factors, among others, to the extent relevant to the Related Party Transaction:
- Whether the terms of the Related Party Transaction are fair and on arms length basis to the Company and would apply on the same basis if the transaction did not involve a Related Party;
- Whether there are any compelling business reasons for the Company to enter into the Related Party Transaction and the nature of alternative transactions, if any;
- Whether the Related Party Transaction would affect the independence of an independent director;
- Whether the proposed transaction includes any potential reputational risk issue that may arise as a result of or in connection with the proposed transaction;
- Whether the Company was notified about the Related Party Transaction before its commencement and if not, why pre-approval was not sought and whether subsequent ratification is allowed and would be detrimental to the Company; and
- Whether the Related Party Transaction would present an improper conflict of interest for any director or Key Managerial Personnel of the Company, taking into account the size of the transaction, the overall financial position of the director, Executive Officer or other Related Party, the direct or indirect nature of the director’s, Key Managerial Personnel’s or other Related Party’s interest in the transaction and the ongoing nature of any proposed relationship and any other factors the Board/Committee deems relevant.
If the Committee determines that a Related Party Transaction should be brought before the Board, or if the Board in any case elects to review any such matter or it is mandatory under any law for Board to approve the Related Party Transaction, then the considerations set forth above shall apply to the Board’s review and approval of the matter, with such modification as may be necessary or appropriate under the circumstances.
Notwithstanding the foregoing, the following Related Party Transactions shall not require approval of Audit Committee or Shareholders:
i. Any transaction that involves the providing of compensation to a director or Key Managerial Personnel in connection 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.
ii. Any transaction in which the Related Party’s interest arises solely from ownership of securities issued by the Company and all holders of such securities receive the same benefits pro rata as the Related Party.