Tube Investments of India Limited (“Company”) recognises that Related Party Transactions (as defined below) can present potential or actual conflicts of interest and may raise questions about whether such transactions are consistent with the Company’s interests. Therefore, this Policy has been adopted by the Company’s Board of Directors, as recommended by the Audit Committee, in order to determine the manner of dealing with Related Party Transactions including determination of materiality of Related Party Transactions, Material Modifications (as defined below), and setting forth the procedures under which certain transactions must be reviewed and approved as per the applicable provisions of Companies Act and SEBI LODR Regulations as defined below.
This Policy is framed as per requirement of Regulation 23 the SEBI LODR Regulations and is intended to ensure proper reporting, approval and disclosure of related party transactions. Such transactions may be considered appropriate only if they are in the best interest of the Company.
All Related Party Transactions and subsequent Material Modifications shall require prior approval of the Audit Committee unless otherwise specifically exempted in accordance with this Policy.
Only those members of the Audit Committee, who are Independent Directors, shall approve Related Party Transactions.
The Company shall identify the Related Parties and the transactions with the Related Parties as follows:
The Company shall put in place an appropriate monitoring mechanism to track all the transactions with Related Parties which may inter alia include the following:
(i) Approval of Audit Committee
(ii) Approval of the Board of DirectorsThe following transactions shall require approval of the Board duly recommended by the Audit Committee:
(iii) Approval of the shareholders
The Audit Committee/Board/shareholders shall be provided with the material facts of such Related Party Transactions and such information as specified under the Companies Act or SEBI LODR Regulations or any notifications / circulars issued in this regard, as amended from time to time, and the Audit Committee/Board will determine whether to approve such Related Party Transactions or not. Further, the Audit Committee / Board, as the case may be, is entitled to seek the assistance of any employee of the Company or its Subsidiaries or one or more independent experts of its choice at the expense of the Company or its Subsidiaries.In assessing a Related Party Transaction, the Company and the Audit Committee shall consider such factors as it deems appropriate, including without limitation –
The following Related Party Transactions do not require approval of Audit Committee/Board/ shareholders, as the case may be:
Mechanism for determining ordinary course of business and arm’s length basis:Ordinary course of business:
All transactions or activities that are necessary, normal and incidental to the business of the Company shall be deemed to be in the ordinary course of business. These may also be common practices and customs of commercial transactions.To decide whether an activity which is carried on by the business is in the ‘ordinary course of business’, the following factors may inter alia be considered:
The following guidelines may be used for determining the arm’s length basis:
For determining the arm’s length pricing, the Transfer Pricing guidelines issued by the relevant authorities under the provisions of Income-Tax Act 1961 may be used to determine these criteria on a case-to-case basis.
The CFO shall provide a quarterly certification and confirmation to the Audit Committee on the compliance of this Policy including the ordinary course and arm’s length aspects of all Related Party Transactions.
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 Audit Committee shall consider all 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 Audit Committee shall also examine the facts and circumstances pertaining to the failure of reporting such Related Party Transaction to the Audit Committee under this Policy, and shall take any such action it deems appropriate.In any case, where the Audit Committee determines not to ratify a Related Party Transaction that has been commenced without its approval, the Audit 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 Audit Committee has authority to modify or waive any procedural requirements of this Policy.
In cases where the Board and/or shareholders’ approval is required for a Related Party Transaction but such approval has not been obtained, and if it is not ratified by the Board or, as the case may be, by the shareholders at a meeting within three months from the date on which such Related Party Transaction was entered into, such Related Party Transaction shall be voidable at the option of the Board or, as the case may be, of the shareholders.
The Company shall make necessary disclosures as per the requirements under the Companies Act, SEBI LODR Regulations and Indian Accounting Standards, as the case may be within the prescribed timelines.
In the event of regulatory changes which make any of the provisions in the Policy inconsistent, such amended regulatory changes would prevail over the Policy and the provisions in the Policy would be modified in due course to make it consistent with applicable law(s).This Policy shall be reviewed by the Audit Committee and Board at least once in every three years. Any changes or modification on the Policy as recommended by the Audit Committee would be presented for approval of the Board. The Board can from time to time authorise Directors to make changes in the Policy due to regulatory or legal requirement and such changes made to be brought to the attention of the Board at the first meeting following the amendment(s).
This Policy shall come into effect from April 1, 2022.