RELATED PARTY POLICY
 

PREAMBLE

The Board of Directors (the “Board”) of Rajeev Trading & Holdings Private Limited (the “Company”) has adopted the Related Transaction Policy (“Policy”) ensuring compliance with the provisions pertaining to related party transactions specified under the Companies Act, 2013 (“the Act”), including the rules made thereunder, Indian Accounting Standards and Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 issued by Reserve Bank of India (as amended from time to time) [“RBI Master Directions’]

 

This Policy applies to transactions between the Company and one or more of its Related Parties. It provides a framework for governance and reporting of Related Party Transactions, including material transactions.

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PURPOSE

This Policy is intended to ensure due and timely identification, approval, disclosure and reporting of transactions between the Company and any of its Related Parties in compliance with the applicable laws and regulations as may be amended from time to time.

The provisions of this Policy are designed to govern the approval process and disclosure requirements to ensure transparency in the conduct of Related Party Transactions in the best interest of the Company and its shareholders and to comply with the statutory provisions in this regard.

 

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 or vested interest in that transaction.
 

• “Associate Company” means any other Company in which the Company has a significant influence, but which is not a subsidiary company and includes a joint venture company, as defined under Section 2(6) of the Act.
 

• “Audit Committee or Committee" means the Committee duly constituted by the Board of Directors of the Company as per RBI Master Directions and perform such powers, functions and duties as laid down under Section 177 of the Act.
 

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

• “Key Managerial Personnel (KMPs)” means Key Managerial Personnel as defined under the Companies Act, 2013

•  “Material Related Party Transaction” means a Related Party Transaction which individually or taken together with previous transactions during the financial year, exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company or such limits as may be prescribed.

• “Policy” means Related Party Transaction Policy.
 

• “Related Party”  means related party as defined under Section 2(76) of the Act.
 

• “Related Party Transaction” means any transaction directly and indirectly involve any Related Party which is transfer of resources, services or obligations, regardless of whether a price is charged.
 

• “Relative” means a relative as defined under Section 2(77) of the Act and includes anyone who is related in any of the following manner:

1. Members of a Hindu undivided family;

2. Husband or wife;

3. Father (including step-father);

4. Mother (including step-mother};

5. Son (including step-son);

6. Son's wife;

7. Daughter;

8. Daughter's husband;

9. Brother (including step-brother); or

10. Sister (including step-sister).

 

• “Transaction” with a related party shall be construed to include a single transaction or a group of transactions.
 

The terms Director, Chief Financial Officer, Company Secretary, shall have the same meaning as  assigned under the Companies Act, 2013.
 

ORDINARY COURSE OF BUSINESS:

Ordinary Course of business means the transactions, customs and practices undertaken by the Company to conduct its business operations and activities (including activities which are there  as per its Memorandum and Articles of Association) and all the transactions in which the company regularly deals and repeatedly enters into for the purpose of its business or the transaction is necessary, normal and incidental to business. The assessment of whether a transaction is in ordinary course of business is very subjective, judgmental and can vary on a case-to-case basis giving consideration to the nature of business and objects of the entity.
 

Following are some of the criteria’s that may be considered for determining whether the transaction is in the ordinary course of business:
Guidance Note on Related Party Transactions issued by the Institute of Company Secretaries of India on March,2019.

a. Whether the activity is covered in the objects clause of the Memorandum of Association;
b. Whether the activity is in furtherance of the business;
c. Whether the activity is normal or otherwise routine for the particular business (i.e. activities like advertising, staff training, etc.);
d. Whether the activity is repetitive/ frequent;
e. Whether the income, if any, earned from such activity / transaction is treated as business; income in the company’s books of account;
f. Whether the transactions are common in the particular industry;
g. Whether there is any historical practice to conduct such activities business;
h. Revenue generated by the activity;
i. Resources committed to the activity.

These are not exhaustive criteria and the Company will assess each transaction considering its specific nature and circumstances.
 

IDENTIFICATION OF RELATED PARTIES:

The following process shall be followed to ensure all related parties are identified in order to obtain the requisite approvals for any transaction with such related parties:

 

i. Every director shall at the first meeting of the Board in which he/she participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the disclosures already made, then at the first Board meeting held after such change, disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals, including his shareholding, shall furnish Form MBP-1 “Notice of Interest by Director” pursuant to Section 184(1) and Rule 9 of the Companies (Meeting of Board and its Powers) Rules, 2014 and also declare whether the Board of Directors, managing director or manager of any other body corporate is accustomed to act in accordance with his/her advice, directions or instructions (given otherwise than in a professional capacity).
 

ii. Group Companies are identified for each & every transaction as per the definition given in the Indian Accounting Standards (‘Ind AS’) & the Act.

Every Director, Key Managerial Personnel, Functional / Business heads / Chief Financial Officer will be responsible for providing additional information about the transaction that the Board /Committees may request, for being placed before the Committee and the Board.

 

REVIEW AND APPROVAL OF RELATED PARTY TRANSACTIONS

Approval of Audit Committee

Prior approval of Audit committee shall be taken by resolution for all transactions with Related parties and subsequent modifications (except transactions specifically exempt under the provisions of the Act and the SEBI Listing Regulations),
1. Omnibus Approval
The Audit Committee may grant an omnibus approval for related party transactions which shall be valid for a period of 1 year,
The conditions for according omnibus approvals will be as follows:
 

• The Related Party Transactions are repetitive in nature or foreseeable and are in the interest of the Company;

• The Related Party Transactions under the omnibus approval route shall be reported to the Audit Committee on a quarterly basis for its noting.

• If required, the Audit Committee may, subject to the provision of the applicable laws, review its general approval during the financial year, and make such amendments / modifications / revisions to the same as may be deemed necessary or required for the conduct of the Company's business.
 

• The omnibus approval shall specify:

• (i) the name(s) of the related party, nature of transaction, period of transaction, maximum

• (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:
 

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 rupees one crore per transaction.

2. Only those members of the Audit Committee, who are Independent Directors, shall approve the Related Party Transactions.

3. Where any Director/member of committee is interested in any transaction with a Related Party, such Director/member shall not be present at the meeting (whether of the Audit Committee or of the Board of Directors) during discussions on the subject matter of the resolution relating to such transaction.

4. All relevant facts pertaining to a Related Party Transaction, including but not limited to, name of the related party, nature of relationship and value of transaction, shall be placed before the Audit Committee along with such other details as prescribed under Applicable Laws from time to time or otherwise relevant or important for the Audit Committee to take a decision on the proposed Related Party Transaction.
 

5. The Audit Committee shall also review the status of long-term (more than one year) or recurring Related Party Transactions on an annual basis,

6. Exemption: Notwithstanding the foregoing, the following Related Party Transactions shall not require approval of Audit Committee:
 

• Any transaction that involves the providing of compensation to a director or KMP in connection with his or her duties to the Company or any of its subsidiaries or associates , including the reimbursement of reasonable business and travel expenses incurred in the ordinary course of business. This will be dealt with appropriately by the Nomination and Remuneration Committee.
   

• Any transaction in which the Related Party's interest arises solely from ownership of securities issued by the Company and all holders of such securities receive the same benefits pro rata as the Related Party.
   

• Transaction between a holding company and its wholly owned subsidiary company or between two wholly owned subsidiaries of the holding company.
   

7. 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:
 

• The fairness and arm’s length or otherwise of the Related Party Transaction after applying the same basis as if the transaction did not involve a related party;
   

• The business reasons for the Company to enter into the Related Party Transaction and the nature of alternative transactions, if any;
   

• Impact on independence of an independent director of Related Party Transaction; Any potential reputational risk issues that may arise as a result of or in connection with the proposed transaction;
   

• Whether the Related Party Transaction would present an improper conflict of interest for any director or KMP of the Company, taking into account the size of the transaction, the overall financial position of the director or other related party, the direct or indirect nature of the director's, KMP’s or other related party’s interest in the transaction and the ongoing nature of any proposed relationship and any other factors the Board/Committee deems relevant.
   

• Any other relevant information regarding the transaction.