TITLE

This Policy will be called “Related Party Transaction Policy”

INTRODUCTION

The Board of Directors (the “Board”) of Hind Rectifiers Limited (the “Company”), has adopted the following policy and procedures with regard to Related Party Transactions as defined below. The Audit Committee/ Board will review and may amend this policy from time to time.
This policy will be applicable to the Company. This policy is to regulate transactions between the Company and its Related Parties based on the applicable laws and regulations applicable on the Company.

OBJECTIVE / PURPOSE

This policy is framed as per the requirement of revised Clause 49 of the Listing Agreement and intends to ensure the proper approval and reporting of transactions between the Company and its Related Parties. This policy shall ensure that transactions are in the best interest of the Company and its shareholders. The Company is required to disclose each year in the Financial Statements certain transactions between the Company and Related Parties as well as the policy concerning transactions with Related Parties. The objective of the policy is to ensure proper approval and reporting of the related party transactions.

DEFINITIONS

Company means HIND RECTIFIERS LIMITED.

Policy means “Related Party Transaction Policy” as amended from time to time.

Director means every Director of the Company.

Audit Committee means the Audit Committee constituted by the Board of Directors of the Company in accordance with Section 177 of the Companies Act, 2013 and read with Clause 49 of the Listing Agreement with the Stock Exchanges.

Key Managerial Personnel means.

• Managing Director or Chief Executive Officer or a Manager or a Whole-time director
• Chief Financial Officer
• Company Secretary
• Such other officer as may be prescribed

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.

Related Party means an entity under Section 2 (76) of the Companies Act, 2013 and as per Accounting Standards.

(A) Related Party as per Section 2 (76) of the Companies Act, 2013 is as under

1. A director or his relative
2. A key managerial personnel or his relative
3. A firm, in which a director, manager or his relative is a partner
4. A private company in which a director or manager or their relative is a member or director
5. A public company in which a director or manager is a director and holds along with his relatives, more than two per cent of its paid-up share capital
6. Anybody 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
7. any person on whose advice, directions or instructions a director or manager is accustomed to act : Provided that nothing in sub-clauses
   1. and
   2. shall apply to the advice, directions or instructions given in a professional capacity
8. Any company which is
   1. A holding, subsidiary or an associate company of such company
   2. A subsidiary of a holding company to which it is also a subsidiary
9. Such other person as may be prescribed.

(B) Related Party as per Accounting Standard 18 is as under

1. Enterprises that directly or indirectly control (through subsidiaries) or are controlled by or are under Common control with the reporting enterprise
2. Associates, Joint Ventures of the reporting entity, investing party or venture in respect of which reporting enterprise is an associate or a joint venture
3. Individuals owning voting power giving control or significant influence
4. Key Management Personnel and their relatives
5. Enterprises over which any of the persons in (iii) or (iv) are able to exercise significant influence

Related Party Transaction in relation to the Company means

As per Revised Clause 49 of the Listing Agreement

• A related party transaction is a transfer of resources, services or obligations between the Company and a related party regardless of whether a price is charged.

As per section 188 of the Companies Act 2013

• Entering into a contract or arrangement with a related party with respect to
  • Sale, purchase or supply of any goods or materials
  • Selling or otherwise disposing of, or buying, property of any kind
  • Leasing of property of any kind
  • Availing or rendering of any services
  • Appointment of any agent for purchase or sale of goods, materials, services or property
  • such related party’s appointment to any office or place of profit in the Company, its subsidiary company or associate company
  • Underwriting the subscription of any securities or derivatives thereof, of the Company
• Transaction defined as a ‘related party transaction’ under any other related law, regulation, accounting standards etc.

Relative means Relative as defined in section 2 (77) of the Companies Act, 2013.

INTERPRETATION

The terms that have not been defined in this policy shall have the same meaning as assigned to them in the Companies Act, 2013, Listing Agreement and/or any other rules/laws/ regulations as amended from time to time.

RESPONSIBILITY OF INFORMING RELATED PARTY TRANSACTIONS

Each Director and Key Managerial Personnel is responsible for providing notice to the Board and Audit Committee of all the Related Party Transactions including those involving him or her or his or her Relative and also 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.

REPORTING OF RELATED PARTY TRANSACTIONS

All transactions identified as Related Party Transactions are to be reported to the Audit Committee. If the Audit Committee approves any transaction it shall forward the same to the Board for its approval. The Board shall consider the transaction in terms of this policy and grant approval if the same is in the best interest of the Company.

MATERIAL RELATED PARTY TRANSACTION

Material Related Party Transaction means a related party transaction/transactions which individually or taken together with previous transactions with a related party during a financial year, exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company. Also, all Related Party Transactions whose value exceeds the limit prescribed in Rule 15 (as amended) of the Companies (Meetings of Board and its Powers) Rules, 2014 shall be considered as Material Related Party Transactions.

REVIEW APPROVAL AND AUTHORITY TO APPROVE RELATED PARTY TRANSACTIONS

All Related Party Transactions will require prior approval of the Audit Committee and the Board in terms of the requirements of the Listing Agreement and Section 188 of the Companies Act, 2013. The Audit Committee can grant approval either at a meeting or by circulation resolution. Accordingly all the Related Party Transactions will be placed at the Audit committee and Board for review and approval or even for ratification.
To review a Related Party Transaction, the Audit Committee/Board 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 or ratify a Related Party Transaction, the Audit Committee/Board will consider the following factors, among others, to the extent relevant to the Related Party Transaction

• Whether the terms of the Related Party Transaction are on fair basis to the Company and would apply on the same basis if the transaction did not involve a Related Party
• 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
• Whether the Related Party Transaction would affect the independence of an independent director
• Whether the proposed transaction includes any potential reputational risk issues that may arise as a result of or in connection with the proposed transaction
• 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
• Whether the Related Party Transaction would present an improper conflict of interest for any Director or Key Managerial Personnel of the Company

However, 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 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.
• The Audit Committee shall satisfy itself the need for such omnibus approval and that such approval is in the interest of the Company
• Such omnibus approval shall specify
  • The name/s of the related party, nature of transaction, period of transaction, maximum amount of transaction that can be entered into
  • the indicative base price / current contracted price and the formula for variation in the price if any and
  • Such other conditions as the Audit Committee may deem fit
• 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.
• Such omnibus approvals shall be valid for a period not exceeding one year and shall require fresh approvals after the expiry of one year.

Audit Committee shall review, at least on a quarterly basis, the details of Related Party Transactions entered into by the company pursuant to each of the omnibus approval given.

All Material Related Party Transactions, which are not in the ordinary course of business and / or which are not at Arm’s Length basis, shall require prior approval of the shareholders through ordinary resolution.

In addition to the above all Material Related Party Transactions, which are in the ordinary course of business and / or which are at Arm’s Length basis, shall require approval of the shareholders of the Company through a special resolution where the concerned related party/parties shall abstain from voting.

Where any Director or Key Managerial Personnel is interested in any contract or arrangement with a related party, such person shall not be present at the meeting during discussions on the subject matter of the resolution relating to such contract or arrangement and such person shall abstain himself or herself from voting on the approval of the Related Party Transaction

EXEMPTIONS

The following related party transactions are exempted

• Transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.

DISCLOSURES

The Company shall disclose, in the Board Report, transactions prescribed in section 188 of the Companies Act with related parties, which are not in ordinary course of business or arms length basis along with the justification for entering into such transaction.
The Company shall disclose the policy of Related Party Transaction on its website and the link will be provided in the Annual report.
The company will also provide details of all the material transactions with related parties on quarterly basis to the stock exchanges.

NON APPROVAL OF RELATED PARTY TRANSACTIONS

The Audit Committee and the Board will not approve a proposed Related Party Transaction if it considers that the transaction is not in the best interest of the Company.
In the event, the Company becomes aware of a Related Party Transaction that has not been approved under this Policy prior to its finalization, the matter shall be reviewed by the Audit Committee/Board. 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.
Where the Audit Committee/Board determines not to ratify a Related Party Transaction that has been commenced without their approval, the Audit Committee/Board as appropriate, may direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction. The Audit Committee/Board may also ask for modification of the terms in the best interest of the Company.

COMMUNICATION

This Policy will be communicated to all Directors, Key Managerial Personnel, operational employees and other concerned persons of the Company for overall awareness to facilitate statutory compliances.

AMENDMENTS

The Board/Audit Committee shall have the power to amend any of the provisions of this Policy, substitute any of the provisions with a new provision or replace this Policy entirely with a new Policy and also in connection with any review of a Related Party Transaction, the Audit Committee/Board has authority to modify or waive any procedural requirements of this Policy.

Document Preservation and Archival Management Policy

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HIND RECTIFIERS LIMITED

Document Preservation and Archival Management Policy

Introduction:

The Board of Directors of Hind Rectifiers Limited (‘the Company’) has adopted the following policy and procedures with regard to preservation of Documents and archival management. The Board may review and amend this policy from time to time.

The purpose of this policy is to preservation of its documents in accordance with the provisions of the Companies Act, 2013, SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and any other applicable laws, rules, regulations and including any statuary modification/s or re-enactment thereof for the time being in force.

In addition to legally mandated retention requirements the Hind Rectifiers Limited may require certain records of the company to be maintained for certain periods of time in order to allow the company to conduct its affairs efficiently and consistently or to retain records and other documents for historic purposes.

Objective:

This policy is framed based on Listing Agreement entered by the Company with the Stock Exchanges and pursuant to the provisions of the Companies Act 2013 to facilitate setting up a framework for Documents Preservation and Archival Management:

Document Preservation and Archival Management Policy limits how long information kept.

The specific objectives of the Policy are classifying the Documents in permanent nature and documents with preservation period of not less than eight years after completion of the relevant transactions.

The Company shall disclose on its website all such events or information which has been disclosed to stock exchange(s) under SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, and such disclosures shall be hosted on the website of the Company for a minimum period of five years and thereafter as per the retention schedule of the Company.

Company shall ensure to put in place infrastructure as required for compliance with this policy.

Company shall make ensure to educate their employees about preservation of Documents and implementation of policy.

The policy should also address the fact that documents store and save in different ways and quite flexible.

Protects the privacy of Documents, Optimizes the use of space, Minimizes the cost of record retention; and Destroys outdated records in a timely and appropriate manner as defined in regulatory framework.

Definitions:

“Policy”“Document” includes summons, notice, requisition, order, declaration, form and register, whether issued, sent or kept in pursuance of this Act or under any other law for the time being in force or otherwise, maintained on paper or in electronic form [Section 2(36) of the Companies Act, 2013]

“Board of Directors” or “Board” in relation to a Company, means the collective body of Directors of the Company. [Section 2(10) of the Companies Act, 2013]

“Policy” means Document Preservation and Archival Management Policy.

Confidentiality Requirement

Many records subject to regulatory framework contain non-public confidential data. Such records are protected by the Company.

Electronically Stored Information

Company may adopt the maintenance of Electronics records under rule 27(1) of the Companies (Management and Administration) Rules, 2014.

Retention Schedules

The Document preservation and archival management policy meets legal standards for protection, storage, and retrieval of documents. The retention schedules of the documents shall be govern by Companies Act, 2013 and rules their under, the Listing Regulation governed by the Securities and Exchange Board of India (SEBI) and any other applicable laws, rules, regulations and including any statuary modification/s or re-enactment thereof for the time being in force.

Policy Enforcement

Failure to comply with this Policy may result in punitive action against the employee, including suspension or termination. Questions about enforcement of this policy should be referred to the Board of Director of the Company directly.