Kinara Capital promotes to be ethical and encourages authentic and transparent approach in all its dealings.
Considering the requirements to approve the Related Party transaction as prescribed under Section 177, Section 188 and other applicable provisions of the Companies Act, 2013 (“the Act”), the company has framed this Policy with regard to Related Party Transactions (“RPT Policy”)
The Board of Directors will review and may amend this policy from time to time on recommendation of the Audit Committee.
The objective of this policy is to prescribe a specified manner of dealing with Related Party Transactions as per the provisions of the Companies Act and any other applicable Regulations to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties, in the best interest of the Company and its stakeholders.
The Scope of the Related Party Transaction covers below:
a) Audit Committee: As per Section 177 of the Companies Act, 2013, every listed Company and such other class or classes of companies, shall constitute an Audit Committee.Further, as per Regulation 68 of RBI Master Direction on Systematically Important Non-Banking Financial Companies, all applicable NBFCs shall constitute an Audit Committee consisting of not less than 3 (three) members of its Board of Directors.
b) Board of Directors or Board in relation to a Company means the collective body of the directors of the Company.
c) Key Managerial Personnel in relation to a Company means
d) Related Party with reference to a Company, means
Explanation.—For the purpose of this clause, “the investing company or the venturer of a company” means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate.
e)Related Party Transaction
As per Indian Accounting Standard (Ind AS) defines the term ‘related party transaction’ as a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.
The CFO and the Company Secretary will prepare a management note with justification for entering into the contract/arrangement/transaction which will also include whether the transaction is in the ordinary course of business and at arm’s length.
f)Relatives with reference to any person means anyone who is related to another, if—
A “transaction” with a related party shall be construed to include single transaction or a group of transactions in a contract.”
All Related Party Transactions shall require the prior approval of the Audit Committee.
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/her or his/her relative, including any additional information about the transaction that the Board or Audit Committee may request. The Board shall record the disclosure of Interest and the Audit Committee will determine whether the transaction does, in fact, constitute a Related Party Transaction requiring compliance with this policy.
Such notice of any potential Related Party Transaction shall be given well in advance so that the Audit Committee has adequate time to obtain and review information about the proposed transaction.
All Related Party Transactions shall require prior approval/ratification of Audit Committee, whether at a meeting or by way of circulation resolution. However, where any transaction has not been approved or ratified by the Audit Committee within 3 (Three) months from the date of transaction, such transaction shall be voidable at the option of the Audit Committee and if the transaction is with a related party to any director or is authorized by any other director, the director concerned shall indemnify the Company against any loss incurred by the Company.
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
The Audit Committee may grant omnibus approval for Related Party Transactions proposed to be entered into by the Company subject to the following conditions:
The Audit Committee shall, after obtaining approval of the Board of Directors, specify the criteria for making the omnibus approval which shall include the following,namely:-
The Audit Committee shall lay down the criteria for granting the omnibus approval in line with the policy on Related Party Transactions of the company and such approval shall be applicable in respect of transactions which are repetitive in nature. Further, the Audit Committee shall consider the following factors while specifying the criteria for making omnibus approval, namely:-
The Audit Committee shall satisfy itself regarding the need for such omnibus approval and that such approval is in the interest of the Company;
Such omnibus approval shall specify
Provided that where the need for Related Party Transaction cannot be foreseen and aforesaid details are not available, Audit Committee may grant omnibus approval for such transactions subject to their value not exceeding Rs.1 crore per transaction.
Audit Committee shall review, at least on a quarterly basis, the details of Related Party Transactions entered into by the Company pursuant to pursuant to the omnibus approval granted by the Audit ommittee earlier.
Such omnibus approvals shall be valid for a period not exceeding one financial year and shall require fresh approvals after the expiry of such financial year.
Shareholder’s approval shall be sought for transactions with the related parties which are either not in the ‘Ordinary Course of Business’ or are not on an ‘arm’s Length Basis’ and exceeds the threshold prescribed under section 188 of the Companies Act 2013 and the rules thereunder, amended from time to time, shall also require the prior approval of the shareholders through ordinary resolution and no related party shall vote to approve on such resolutions whether the entity is a related party to the particular transaction or not.
No member of the Company shall vote on ordinary resolution, to approve any contract or arrangement which may be entered by the Company, if such member is a related party to the contract or arrangement for which the ordinary resolution is being passed.
In the event the Company becomes aware of a Transaction 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 Related Party Transaction, and shall evaluate all options available to the Company, including ratification, revision or termination of the Related Party Transaction. The Committee shall also examine the facts and circumstances pertaining to the failure of reporting such Related Party Transaction to the Committee under this Policy and shall take any such action it deems appropriate.
In any case, where the Audit Committee determines not to ratify a Related Party Transaction that has been commenced without approval, the Audit Committee, as appropriate, may direct additional actions including, but not limited to, discontinuation of the transaction or seeking the approval of the shareholders, payment of compensation for the loss suffered by the related party etc. In connection with any review of a Related Party Transaction, the Audit Committee has authority to modify or waive any procedural requirements of this Policy.
Details of all material transactions with related parties shall be disclosed in the Annual Report.
This Policy will be communicated to all operational employees and other concerned persons of the Company. The Company shall disclose the policy on dealing with Related Party Transactions on its website and a web link thereto shall be provided in its Annual Report.
The Company may constitute a steering committee which will be headed by the Chief Financial Officer and Company Secretary which will be headed members from Finance, Corporate Secretarial and other functions as may be determined by the Chief Financial Officer and Company Secretary
The Steering Committee shall meet periodically to ensure that the actions agreed with the Audit Committee and the Board with respect to Related Party Transactions have been implemented. The Steering Committee shall also ensure that the systems and processes are in place for identification and approval of the related Party Transactions as per this Policy
In case there are any regulatory changes requiring modifications to the Policy, the Policy shall be reviewed by the Board of Directors at least once every three years and amended at the next possible opportunity.
In case of any amendments, clarifications, circulars etc. the amended regulatory requirements will supersede the Policy till the time this Policy is suitably amended.