(Pursuant to Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015)
1. PREAMBLE
The Board of Directors (the “Board”) of Hira Automobiles Limited (the “Company” or
“HAL”), has adopted the following policy and procedures with regard to Related Party
Transactions as defined below. his policy is to regulate transactions between the Company
and its Related Parties based on the applicable laws and regulations as applicable on the
Company.
2. PURPOSE
This policy is framed as per requirement of Regulation 23 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and intended to ensure the proper approval
and reporting of transactions between the Company and its Related Parties. Such
transactions are appropriate only if they are in the best interest of the Company and its
shareholders. The Company is required to make appropriate disclosure each year in the
Board Report regarding transactions between the Company and Related Parties as well as
policy concerning transactions with Related Parties
3. DEFINITIONS
“Audit Committee or Committee” means Committee of Board of Directors of the Company
constituted under provisions of Listing Regulations 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 wholetime director;
(ii) Company Secretary; and
(iii) Chief Financial Office
“Material Related Party Transaction” means a transaction with a related party if the
transaction / transactions to be entered into individually or taken together with previous
transactions during a financial year, exceeds ten percent of the annual turnover or of the
company as per the last audited financial statements of the company.
Policy” means Related Party Transaction Policy.
“Related Party” means related party as defined in Regulation 2(zb) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 which is as follows
a. is a related party under Section 2(76) of the Companies Act, 2013 which are as follows:
(i) a director or his relative ; (ii) a key managerial personnel or his relative ; (iii) a firm, in
which a director, manager or his relative is a partner ; (iv) a private company in which a director or manager is a member or director ; (v) a public company in which a director or
manager is a director or holds along with his relatives, more than two per cent of its paidup share capital ; (vi) any body corporate whose Board of directors, managing director, or
manager is accustomed to act in accordance with the advice, directions or instructions of a
director or manager ; (vii) any person under whose advice, directions or instructions a
director or manager is accustomed to act :
Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or
instructions given in a professional capacity ;
(viii) any company which is – (A) a holding, subsidiary or an associate company of such
company ; or
(B) a subsidiary of a holding company to which it is also a subsidiary ;
(ix) Director or key managerial personnel of the holding company or his relative with
reference to a company; or
b. such entity is a related party under applicable accounting standards.
“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 the Companies Act, 2013 and includes anyone
who is related to another, if –
i. They are members of a Hindu undivided family;
ii. They are husband and wife; or
iii.
Father (including step-father)
iv. Mother (including step-mother)
v. Son (including step-son)
vi. Son’s wife
vii. Daughter
viii. Daughter’s husband
ix. Brother (including step-brother)
x. Sister (including step-sister)
4. POLICY
All Related Party Transactions must be reported to the Audit Committee and referred for
approval by the Committee in accordance with this Policy. Although, the committee may
grant omnibus approval to repetitive transactions/other transactions in the best interest of
the Company in accordance with Regulation 23 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
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 except the
cases where omnibus approval to repetitive transactions/other transactions in the best interest of the Company has been given by the Committee in accordance with Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
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 recuse 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:
(a) 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;
(b) 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;
(c) Whether the Related Party Transaction would affect the independence of an
independent director;
(d) Whether the proposed transaction includes any potential reputational risk issues
that may arise as a result of or in connection with the proposed transaction;
(e) 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
(f) 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.
5. RELATED PARTY TRANSACTIONS NOT APPROVED UNDER THIS POLICY
In the event the Company becomes aware of a Related Party Transaction with a Related
Party that has not been approved under this Policy prior to its consummation, the matter
shall be reviewed by the Committee. The 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 Committee determines not to ratify a Related Party Transaction that
has been commenced without approval, the 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 Related Party Transaction, the Committee
has authority to modify or waive any procedural requirements of this Policy. This Policy
will be communicated to all operational employees and other concerned persons of the
Company