The Board of Directors (the “Board”) of SBI GLOBAL FACTORS LIMITED(the “Company” or “SBIGFL”), has adopted the following policy and procedures with regard to Related Party Transactions as defined in this policy. The Board has determined that the Audit Committee shall review, approve and ratify all Related Party Transactions.
The Related Party Transaction Policy may be amended from time to time in order to give effect to prescriptions made in the following legislations / directions:
This policy will become mandatory with effect from January 23, 2015 and shall be applicable in respect of transactions made with:
This Policy is framed based on the provisions of the Companies Act, 2013, and rules there under. This policy intends to ensure proper approval and reporting of transactions between the Company and its Related Parties in accordance with the provisions of Companies Act, 2013 and rules there under or any other law for the time being in force. Such transactions are appropriate only if they are in the interest of the Company and its stakeholders.
The following details shall be required to ascertain related parties:
All Related Party Transactions must be reported to the Audit Committee for approval as provided under the Companies Act, 2013 and the Rules there under.
However, any related party transaction which is either “Not in Ordinary Course” or “Not at Arm’s Length” shall necessarily require prior approval of the Audit Committee and prior approval of the Board of Directors/shareholders(in certain situations) as provided under Section 177 and Section 188 of the Companies Act, 2013 and the Rules there under.Related Party Transaction (RPT) Committee
Company Secretarial Department, the owner Department for Board Related matters, shall at all times maintain a database of Company’s Related Parties, identified on the basis of the definition set forth in Definition Clause above, along with their personal/company details including any revisions therein. The Related Party List shall be updated whenever necessary and shall be reviewed at least once a year, as on 1st April every year by Company Secretarial Department. The department shall collate the information, coordinate and send the Related Party List to the concerned employees which may include Chairman, MD & CEO, Business Heads, Branch Heads, the Finance & Accounts Department and Statutory Auditors and who the Department believes might be in the position to conduct or know of the possible conduct of 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.6.3. Review, Approval and Ratification of Related Party Transactions
To review a Related Party Transaction, the Audit 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.
The information provided shall specifically cover the following:
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:
If a Related Party Transaction will be ongoing, the Audit Committee may establish guidelines for the Company’s management to follow in its ongoing dealings with the Related Party. Thereafter, the Audit Committee shall periodically review and assess ongoing relationships with the Related Party. Any material amendment, renewal or extension of a transaction, arrangement or relationship previously reviewed under this Policy shall also be subject to subsequent review under this Policy.
This Policy is intended to augment and work in conjunction with other Company policies having any code of conduct, code of ethics and/or conflict of interest provisions.
The Audit Committee periodically shall review this Policy and shall have authority to modify or waive any procedural requirements of this Policy and may also recommend amendments to this Policy from time to time as it deems appropriate. In addition to guidelines for ongoing Related Party Transactions, the Audit Committee may, as it deems appropriate and reasonable, establish from time to time guidelines regarding the review of other Related Party Transactions including those that (i) involve de minimus amounts, (ii) do not require public disclosure, or (iii) involve transactions that have primarily a charitable purpose.
The Board of Directors reserves the power to amend this policy from time to time. Any exceptions to the Policy on Related Party Transactions must be consistent with the Companies Act 2013, including the Rules promulgated thereunder and Insurance Regulatory and Development Authority Act, 1999 & Rules and Regulations made there under and must be approved in the manner as may be decided by the Board of Directors.6.5. Transitional provision for transactions with related Parties entered under erstwhile Companies Act, 1956
Contracts entered into by companies, after making necessary compliances under Section 297 of the Companies Act, 1956, which already came into effect before the commencement of Section 188 of the Companies Act, 2013, will not require fresh approval under the said section 188 till the expiry of the original term of such contracts. Thus, if any modification in such contract is made on or after 1st April, 2014, the requirements under section 188 will have to be complied with.6.6. Prior Approval of Shareholders
Provided that nothing in this shall apply to any transaction entered into by the company in ordinary course of business other than transactions which are not on an arms length basis.6.7. Voting Rights
Non-compliance shall lead to vacation of the Director and he will be disqualified to act as Director in any company apart from punishment with imprisonment and/or fine as prescribed by the Companies Act, 2013.
Non-compliance by an employee of the company shall lead to punishment with imprisonment and/ or fine as prescribed by the Companies Act, 2013.
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 Audit 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. The Audit Committee may also disapprove of a previously entered into Related Party Transaction and may require that management of the company take all reasonable efforts to terminate, unwind, cancel or annul the related party transaction. 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.
Any words used in this policy but not defined herein shall have the same meaning ascribed to it in the Companies Act, 2013 or Rules made there under, Accounting Standards or any other relevant legislation / law applicable to the Company.
In case of any dispute or difference upon the meaning/interpretation of any word or provision in this Policy, the same shall be referred to the Audit Committee and the decision of the Audit Committee in such a case shall be final. In interpreting such term/provision, the Audit Committee may seek the help of any of the officers of the Company or an outside expert as it deems fit.
10.1. Details of contract(s) or arrangement(s) have to be disclosed in the Board’s Report along with the justification. The same shall be placed before Audit Committee for its review and then to the Board as part of Directors’ report for approval.
10.2. Necessary disclosures be made in the Annual Financial Statements as required under AS 18
10.3. The Company shall keep a register in the prescribed format (Form MBP-4) giving the particulars of all contracts or arrangements in such manner and containing particulars duly authenticated by the authorized official of Company Secretarial Department and thereafter the same shall be placed before the next meeting of the Board.
10.4. The Company shall disclose the policy on dealing with Related Party Transactions on its website and also in the Annual Report as required by applicable laws, rules and regulations.
10.5. All Related Party Transactions that are required to be disclosed in the Company’s filings with the ROC, as required by the Companies Act, 2013 and related rules and regulations, shall be so disclosed in accordance with such laws, rules and regulations.
All disclosures, supporting documents shall be preserved for a period of eight years from the end of the financial year to which it relates and shall be kept in the custody of the Board and Coordination Division or any other person authorized by the Board for the purpose.Supporting / justification on the transaction on arm’s length basis.
Agreements or other supporting documents along with proper justification of the transaction being on arm’s length basis in the ordinary course of business at a prevailing market rate shall also be preserved for a period of 8 years from the end of the financial year to which it relates and shall be kept in the custody of the Board and Coordination Division or any other person authorized by the Board for the purpose.