Policy On Materiality And Dealing With Related Party Transactions

PREAMBLE

The Board of Directors (the “Board”) of Amber Enterprises India Limited (the “Company”) has adopted the following policy and procedures with regard to Related Party Transactions (hereinafter referred as “RPT”) that the Company may enter into from time to time, in compliance with the requirements of Section 188 of the Companies Act, 2013 and Rules made there under (the “Act”).

Managing Director will review and amend this policy from time-to-time as and when necessary or required. The Audit Committee /Board /General Meeting, as applicable shall, subject to requirements of the Act and this Policy review, approve and ratify (if permissible) the RPTs in terms of the requirements of this Policy.

SCOPE AND PURPOSE OF THE POLICY

RPT can present a potential or actual conflict of interest which may be against the best interest of the Company and its shareholders. Considering the requirements for approval of RPT as prescribed under the Act read with the Rules framed there under and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Regulation 23”), the Company has formulated guidelines for identification of related parties and the proper conduct and documentation of all related party transactions. Also, Regulation 23(1) of the SEBI Listing Regulations requires the Company to formulate a policy on materiality of RPT and dealing with RPT. In the light of the above, the Company has framed this Policy on RPT (“Policy”). This Policy has been adopted by the Board of Directors of the Company. Going forward, the Audit Committee will review and amend the Policy, as and when required, subject to adoption by the Board.

OBJECTIVE

The main object for formulating this Policy is to ensure proper approval and reporting of RPTs as applicable under the Act, between the Company and related party(ies) in the best interest of the Company and its Stakeholders.

DEFINITIONS

“Arm’s length transaction” means a transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest.

“Audit Committee” or “Committee” means the Committee of Board of Directors of the Company constituted under provisions of Companies Act, 2013.

“Board” means the Board of Directors of the Company.

“Material Related Party Transaction” means a transaction with a related party if the transaction(s) to be entered into individually or taken together with previous transactions or group of transactions in a contract during a financial year, exceeds appropriate thresholds as specified in Annexure I hereto as per the last audited Financial Statements of the Company.

“Ordinary Course of Business” with reference to a transaction with a related party means a transaction which is:

carried out in the normal course of business envisaged in accordance with the Memorandum of Association (“MOA”) of the Company as amended from time to time;
historical practice with a pattern of frequency;
common commercial practice; or
meets any other parameters/criteria as decided by the Board/Audit Committee from time to time.

“Related” or “Related Party” has the meaning assigned to such term :

a.under Section 2(76) of the Act; or
b.under the accounting Standards as may be in force from time-to-time in relation to Related Party; or
c.Regulation 2(1)(zb) of the Securities and Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015

“Related party transaction” in relation to the Company means a transaction which is:

(a) a transfer of resources, services or obligations between the Company and a related party regardless of whether a price is charged and a “transaction” with a related party shall be construed to include a single transaction or a group of transaction in a contract;
(b)a contract or arrangement with a related party with respect to:
1. sale, purchase or supply of any goods or materials;
2. selling or otherwise disposing of, or buying, property of any kind;
3. leasing of property of any kind;
4. availing or rendering of any services;
5. appointment of any agent for purchase or sale of goods, materials, services or property;
6. such related party’s appointment to any office or place of profit in the Company, its subsidiary company or associate company; and
7. underwriting the subscription of any securities or derivatives thereof, of the Company; or
(c)defined as a “related party transaction” under the relevant provisions of the Companies Act or the SEBI Listing Regulations or any other related law, regulation, standard, etc.

“Relative” with reference to a Director or KMP means persons as defined in Section 2(77) of the Act and rules prescribed thereunder.

Any words and Capitalised term used in this policy but not defined herein shall have the same meaning prescribed to it in the Companies Act or rules made thereunder, The Securities and Exchange Board of India Act, 1992, as amended or rules and regulations made thereunder, the SEBI Listing Regulations, applicable accounting standards or any other relevant legislation/law applicable to the Company.

The Policy shall come in to force with effect from the date of listing of the Equity Shares of the Company on Stock Exchange.

APPLICABILITY

This policy shall be applicable to all the related party transactions entered in to by the Company except the following:

Loans/advances given to a related party;
Guarantee given or security provided in connection with a loan to a related party;
investment(s) made in a related party;
Transfer/assignment of obligation under an existing contract/arrangement with a related party to some other person or related party;
Amendment of an existing contract/arrangement with a related party;
Cancellation of an existing contract/arrangement with a related party; or
Transfer of resources assigned to one related party contract/arrangement to another related party contract/arrangement,

provided that in case of (d), (e), (f) and (g) above, the transfer, amendment, cancellation, etc., does not result in to writing off of any amount paid by the Company or enhancement of amount payable by the Company under the said contract/arrangement or reduction in the amount payable to the Company under the said contract/arrangement or waiver of any right with adverse financial implications for the Company.

MANNER OF DEALING WITH RELATED PARTY TRANSACTION

Identification of Related Parties

The Company shall at all times maintain a databank of Company’s Related Parties containing the names of individuals and Companies in accordance with this Policy, along with their personal/company details including any revisions therein.
The Related Party List shall be updated whenever necessary and shall be reviewed quarterly.
Account Heads shall collate the information, coordinate and send the Related Party List to Company Secretary where he or she believes might be a possible conduct of RPTs.
Account Heads shall submit to the Company Secretary the details of proposed transaction with details/draft contract/ draft agreement or other supporting documents justifying that the transactions are on arms’ length basis in an ordinary course of business at prevailing market rate.
Based on this note, the Company Secretary shall appropriately take up for necessary prior approvals from the Audit Committee at its next meeting and convey back the decision to the concerned Heads.
Each director/Key Managerial Personnel shall be responsible for providing written notice to the Company Secretary of any potential RPT involving him or her or his or her Relatives, including any additional information about the transaction that the Company Secretary may reasonably request. The Company Secretary shall, in consultation with other members of senior management and with the Audit Committee, as appropriate, determine whether the transaction does, in fact, constitute a RPT requiring compliance with this Policy.
Where any director/ Key Managerial Personnel, who is not so concerned or interested at the time of entering into such contract or arrangement, he or she shall, if he becomes concerned or interested after the contract or arrangement is entered into, disclose his concern or interest forthwith when he or she becomes concerned or interested or at the first meeting of Board held after he or she becomes so concerned or interested.
A contract or arrangement entered into by the Company without disclosure or with participation by a Director / Key Managerial Personnel who is concerned or interested in any way, directly or indirectly, in the contract or arrangement, shall be voidable at the option of the Company.
The Company strongly prefers to receive such notice of any potential RPT well in advance so that the Company Secretary has adequate time to obtain and review information about the proposed transaction and other matter incidental thereto and to refer it for approval. Ratification of RPT after its commencement or even its completion may be appropriate in some circumstances.

Swot of RPT

A RPT swotted under this Policy will be considered approved or ratified if it is authorised by the Audit Committee or the Board or the shareholders in the General Meeting, as applicable, in accordance with the threshold mentioned in this Policy after full disclosure of the Related Party’s interests in the transaction.

The Audit Committee or Board, as applicable, shall review and consider:

The Related Party’s interest in the RPT;
The amount involved in the RPT;
Whether the RPT was undertaken in the ordinary course of business of the Company;
Whether the transaction with the Related Party is proposed to be, or was, entered on an arms’ length basis;
The purpose of and the potential benefits to the Company from the RPT;
Whether there are any persuasive business reasons for the Company to enter in to the RPT and the nature of alternative transaction, if any;
Whether the Company was notified about the RPT before its commencement and if not, why pre-approval was not sought and whether subsequent ratification would be detrimental to the Company;
Required public disclosure, if any; and
Any other information regarding the RPT or the Related Party in the context of the proposed transaction that would be material to the Audit Committee/ Board/shareholders, as applicable in light of the circumstances of the particular Transaction.

The Audit Committee/Board will review all relevant information available to it about the RPT. The Audit Committee or the Board, as applicable, may approve or ratify or recommend to the shareholders, the RPT only if the Audit Committee and/ or the Board, as applicable, determine that, under all of the circumstances, the transaction is fair and reasonable to the Company.

PROCEDURE FOR APPROVAL OF RELATED PARTY TRANSACTION

1. All RPT or changes therein alongwith relevant documents (rationalization therefor) require prior approval of the Audit Committee. The summary of such RPTs, material facts as received from the Account Heads relating to each RPT and recommendations for each such RPT shall be reported to Audit Committee by the Company Secretary.
2. The Audit Committee shall undertake an assessment of each RPT. If such assessment indicates that the RPT would require approval of the Board, or if the Board elects to review any such RPT, then the Audit Committee shall report such RPTs, together with a summary of material facts, to the Board for its approval.
3. If the Board is of the view that the RPT needs to be approved at a general meeting of the shareholders by way of a special resolution pursuant to the provisions of the Act, then the same shall be placed for approval of the shareholders of the Company.
  However, the requirement of shareholders’ approval shall not be applicable for transactions entered into between the company and its wholly owned subsidiary whose accounts are consolidated with the company and placed before the shareholders at the general meeting for approval.
4. If in case prior approval of the Audit Committee or the Board or the shareholders in general meeting, as applicable, for entering into a RPT is not feasible/not obtained, then the RPT shall be ratified by the Audit Committee / the Board / shareholders in the general meeting or by any other means as may be permissible under the Act read with applicable regulations, if required, within three (3) months of entering into such a RPT.
5. In the event the Audit Committee or the Board or the General Meeting determines not to ratify a RPT which has been already acted upon by the Company, then the Committee or the Board or the general meeting, as appropriate, may direct additional actions including, but not limited to, immediate discontinuation of such RPT or approve modifications to such RPT to make it acceptable for ratification. The Audit Committee or the Board shall have an authority to modify or waive any procedural requirements of this Policy so long as such modification or waiver is not inconsistent with the provisions of the Act.
6. In determining whether or not to approve or ratify a RPT, the Audit Committee or the Board shall take into account, among other factors it deems appropriate, whether the RPT is on “arm’s length basis”, in the ordinary course of Company’s business and if such aspects are absent whether such RPT is within the thresholds limits as mentioned in Section 188 of the Act, such limits shall stand automatically modified/ amended as and when such limits are amended under the Act and shall accordingly be deemed to be incorporated in this Policy by reference.
7. No director or Key Managerial Personnel shall participate in any discussion or approval of a RPT for which he or she is a Related Party, except that the director / Key Managerial Personnel shall provide all material information concerning such Related Party Transaction to the Audit Committee or the Board as appropriate.
8. However, Audit Committee may grant omnibus approval in line with this policy, If the RPTs are in repetitive in nature, subject to compliances with the following conditions:
  1. 1. The Audit Committee may grant omnibus approvals for related party transactions proposed to be entered into by the listed entity subject to the following conditions, namely;
      1. The Audit Committee shall, after obtaining approval of the Board of Directors, specify 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.
      2. The Audit Committee shall satisfy itself regarding the need for such omnibus approval for transactions of repetitive nature and that such approval is in the interest of the company;
    2. The omnibus approval shall provide details of :
      1. the name/s of the related party, nature of the transaction, period of transaction, the maximum amount of transaction that shall be entered into;
      2. the indicative base price/current contracted price and the formula for variation in the price if any and;
      3. such other conditions as the Audit Committee may deem fit
  Provided that where the need for related party transactions cannot be foreseen and aforesaid details are not available, Audit Committee may grant omnibus approval for such transactions subject to their value not exceeding rupees 1 crore per transaction.
  1. The Audit Committee shall review, at least on a quarterly basis, the details of related party transactions entered into by the company pursuant to the omnibus approvals given;
  2. Such omnibus approval shall be valid for a period not exceeding one year and shall require fresh approval after the expiry of one year.
  3. Omnibus approval shall not be made for transactions in respect of selling or disposing of the undertaking of the company.
  4. Any other conditions as the Audit Committee may deem fit
  In addition to the above, the following kinds of transactions with related parties are also placed before the Board for its approval:
  1. Transactions which may be in the ordinary course of business and at arm’s length basis, but which are as per the policy determined by the Board from time to time (i.e. value threshold and/or other parameters) require Board approval in addition to Audit Committee approval;
  2. Transactions in respect of which the Audit Committee is unable to determine whether or not they are in the ordinary course of business and/or at arm’s length basis and decides to refer the same to the Board for approval;
  3. Transactions which are in the ordinary course of business and at arm’s length basis, but which as per Audit Committee requires Board approval;
  4. Transactions meeting the materiality thresholds laid down in the Policy, which are intended to be placed before the shareholders for approval.
  Nothing in this Policy shall override any provisions of law made in respect of any matter stated in this Policy, In case any difficulty or doubt arises in the interpretation of this Policy, the decision of the Chairman of the Audit Committee shall be final.
  DISCLOSURES & REGISTERS
  1. The Company is required to disclose RPTs in the Company’s Board’s Report to shareholders of the Company at the Annual General in accordance with the Act and Rules made there under.
  2. Details of all RPTs requiring shareholders’ approval in the general meeting shall be disclosed in accordance with the Act.
  3. The Company shall keep and maintain a register, maintained physically or electronically, giving separately the particulars of all contracts or arrangements to which this policy applies and such register is placed/taken note of before the meeting of the Board of Directors.
  4. Every director or Key Managerial Personnel shall, within a period of 30 (thirty) days of this appointment, or relinquishment of his office in other companies, as the case may be, disclose the Company the particulars relating to his/her concern or interest in the other association which are required to be included in the register maintained.
  5. In addition to the above, the Company shall also provide details of all related party transactions exceeding the material related party transaction threshold on a quarterly basis to the stock exchanges.
  6. The Company shall submit within 30 days from the date of publication of its standalone and consolidated financial results for the half year, disclosures of related party transactions on a consolidated basis, in the format specified in the
    relevant accounting standards for annual results to the stock exchanges and publish the same on its website.

REVIEW OF THE POLICY

The adequacy of this Policy shall be reviewed and reassessed by the Committee periodically and appropriate recommendations shall be made to the Board to update the Charter based on the changes that may be brought about due to any regulatory amendments or otherwise.

Any subsequent amendment/modification in the applicable laws in this regard shall automatically apply to this Policy and such policy shall be reviewed by the board of directors at least once every three years and updated accordingly

This Policy will be communicated to all Account Heads and other concerned persons of the Company by publishing on the Company’s website.

Any change/amendments to this policy shall be approved by the Board of Directors.

COMPLIANCE RESPONSIBILITY

Compliance of this Policy shall be the responsibility of the Chief Financial Officer (CFO) and the Company Secretary of the Company who shall have the power to ask for any information or clarifications from the management in this regard.

RPTs which are within below mentioned thresholds shall require prior Audit Committee & Board approval
Approval by Audit Committee and Board at their meeting	A. Transaction or Contract or arrangements (not in the ordinary course of Business or not on Arm’s length basis).	Limits for the time being in force
	i. Sale, purchase or supply of goods, materials directly or through appointment of agents	Not exceeding 10% or more of the turnover of the Company.
	ii. Selling or otherwise disposing of, or buying, property of any kind or through of agents	Not exceeding 10% or more of Net Worth of the Company.
	iii. Leasing of property of any kind	Not exceeding 10% or more of the turnover of the Company.
	iv. Availing any services directly or through appointment of agents	Not exceeding 10% or more of the turnover of the Company
	v. Appointment of any office or place of profit in Company/its subsidiary or associate company	At monthly remuneration not exceeding Rs. 2.5 Lakh.
	vi. Underwriting the subscription of any securities or derivatives thereof	Remuneration not exceeding 1 % of the Net Worth.
	vii. Any transaction whether directly or indirectly involving any Related Party which concerns or relating to transfer of resources, services or obligation between the Company and a Related Party regardless of whether a price is charged, but not covered in (i) to (vi) above	Not exceeding threshold as stated above.
RPTs which are exceeding below mentioned thresholds shall require prior approval of members in General meeting
Approval at General meeting by Resolution	B. Transaction or contract or arrangements (not in the ordinary course of Business or not on Arm’s length basis).	Limits for the time being in force
	i. Sale, purchase or supply of goods, materials directly or through appointment of agents	Exceeding 10% or more of the turnover of the Company.
	ii. Selling or otherwise disposing of, or buying, property of any kind or through appointment of agents	Exceeding 10% or more of the Net Worth of the Company.
	iii. Leasing of property of any kind	Exceeding 10% or more of the turnover of the Company.
	v. Availing any services directly or through appointment of agents	Exceeding 10% or more of the turnover of the Company.
	v. Appointment of any office or place of profit in Company/its subsidiary or associate company.	At monthly remuneration exceeding Rs. 2.5 Lakh.
	vi. Underwriting the subscription of any securities or derivatives thereof.	Remuneration exceeding 1% of the Net Worth.
	vii. Any transaction whether directly or indirectly involving any Rotated Party which concerns or relating to transfer of resources, services or obligation between the Company and a Related Party regardless of whether a price is charged but not covered in (i) to (vi) above.	If exceeding the threshold limit as staled above.

For the transaction or transactions to be entered in to either individually or taken together with the previous transactions during a financial year.

Turnover and Net Worth referred above is computed as per audited financial statements for the preceding financial year.