POLICY ON MATERIALITY OF RELATED PARTY
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POLICY ON MATERIALITY OF RELATED PARTY
Vedant Asset Limited has always been committed to good corporate
governance practices, including in matters relating to Related Party
Transactions. An endeavor is consistently made to have only arms’ length
transactions with Related Parties.
All Related Party Transactions (RPT), as
that term is defined in this policy, shall be subject to review in accordance
with the procedures set forth below. The Board has determined that the Audit
Committee (the “Committee”) is best suited to review all Related Party
Party’ is a person or entity that is related to the company. Parties/Entities
are considered to be related if an entity shall be considered as related to the
such entity is a related party under Section
2 (76) of the Companies Act, 2013; or
such entity is a related party under the
applicable accounting standards.
Related Party Transactions means a transaction
with a related party shall be considered material if the transaction/transactions
to be entered into individually or taken together with previous transactions
during a financial year exceed ten percent of the annual turnover of the
company as per the last audited financial statements of the company.”
1. All Related Party Transactions (RPTs) of
the company as prescribed under the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) regulation 2015 will be approved by
the audit committee of the Board from time to time.
2. Each Director who is a Related Party with
respect to a particular Related Party Transaction shall disclose all material
information to the Committee concerning such Related Party Transaction and his
or her interest in such transaction.
3. Management shall present to the Audit
Committee the following information, to the extent relevant, with respect to
actual or potential Related Party Transactions:
a. A general description of the
transaction(s), including the name of the related party and nature of
relationship, duration of the contract and particulars of the contract or
arrangement, maximum amount of transaction that can be entered into, the
material terms and conditions.
b. The Related Party’s interest in the
transaction(s), including the Related Party’s position or relationship with, or
ownership of, any entity that is a party to or has an interest in the
c. The manner of determining the pricing
and other commercial terms, the indicative base price / current contracted
price and the formula for variation in the price if any.
d. Any advance paid or received for the
contract or arrangement, if any and the approximate value of the transaction(s)
and the approximate value of the Related Party’s interest in the transaction(s).
e. In the case of a lease or other
transaction providing for periodic payments or installments, the aggregate
amount of all periodic payments or installments expected to be made in the
f. In the case of indebtedness, the
aggregate amount of principal to be outstanding and the rate or amount of
interest to be payable on such indebtedness.
g. Whether all factors relevant to the
contract have been considered, if not, the details of factors not considered
with the rationale for not considering those factors and any other material
information regarding the transaction(s) or the Related Party’s interest in the
4. Consent of the
Board and the Shareholders would also be taken in respect of all RPTs, provided
that such consent would not be required in the following cases:
The transactions are entered into by the company in its
ordinary course of business and are on an arms’ length basis; and
The transaction / transactions to be entered into
individually or taken together with previous transactions during a financial
year does not exceed ten percent of the annual consolidated turnover of the company
as per the last audited financial statements of the company.
5. Where Board consent
/ shareholders’ approval is required as per para 4 above, a) the agenda of the
Board meeting at which the resolution is proposed to be moved and b)
explanatory statement to be annexed to the notice of such general meeting,
shall disclose all such details / information about the contract as are prescribed
under the Companies (Meetings of Board and its Powers) Rules, 2014.
6. Where RPTs require approval
of the Board and the shareholders through resolution as per para 4 above, (a)
any director who is interested in any contract or arrangement with a related
party, shall not be present at the meeting during discussions on the
subject-matter of the resolution relating to such contract or arrangement and
b) all entities falling definition of Related Party (ies) shall abstain from
voting on such resolution of the shareholders.
7. If a Related Party
Transaction will be ongoing/ proposed to be entered into by the company, the
Committee may grant omnibus approval for ongoing dealings/ proposed related
party transactions. Such omnibus approval shall specify (i)the name/s of the related
party, nature of transaction, period of transaction, maximum amount of
transaction that can be entered into, (ii) the indicative base price / current
contracted price and the formula for variation in the price if any and (iii)
such other conditions as the Audit Committee may deem fit.
If 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 one crore
per transaction. The Audit Committee shall lay down the criteria /guidelines
for granting the omnibus approval in line with the policy on Related Party
Transactions of the company. Such approval shall be applicable in respect of transactions
which are repetitive in nature and only for one year.
8. The 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.
9. The Audit Committee
periodically shall review this Policy once in every three years and may
recommend amendments to this Policy from time to time as it deems appropriate.
10.This Policy on Related
Party Transactions shall be governed by the Companies Act, 2013 read with Rules
made thereunder, as may be in force for the time being as well as SEBI (Listing
Obligations and Disclosure Requirements) regulation 2015 or such other Rules/Regulations,
as may be notified by SEBI from time to time.
This Policy is
effective from the 5TH Day of September 2022 as approved by the
Board of Directors of the Company.
The Board may subject
to the applicable laws amend any provision(s) or substitute any of the
provision(s) with the new provision(s) or replace the Policy entirely with a
The Company shall
disclose the Policy on its website.