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RPT Policy

Last Updated on: 13th June 2024

1. Background

OnEMI Technology Solutions Private Limited is a private limited company, incorporated under the provisions of the Companies Act, 2013, having Corporate Identification Number (CIN) U72900MH2016PTC282573 (“OnEMI”/“Company”).

OnEMI is in the business of (i) providing financial technology solutions to enable use of instant EMI / instalment solutions to consumers, and in providing the technology platform in the brand name of ‘Kissht’ and ‘Paywithring’ to enable the above, (ii) providing customer acquisition services and loan origination services to financiers/lending partners, who offer loans through the aforementioned technology platform.

2. Purpose and Objectives

The Companies Act, 2013 and the rules framed thereunder, read with the circular(s) and notification(s) issued in this regard from time to time (“Act”), contain detailed provisions relating to identification of related parties and compliances around entering into related party transactions (“RPTs”). While the Act does not specifically mandate the companies to frame a policy in respect of regulating and monitoring RPTs, it is deemed fit by the Board of Directors of the Company to frame this Policy so as to provide for several measures around regulation and monitoring of the RPTs. The Policy governs the transactions with the related parties of the Company keeping in view the potential or actual conflict of interest which may arise upon the transactions entered into by the Company with the related parties and whether such transactions are consistent with the interest of the Company and its members.

The Policy envisages to create documented guidelines for regulating transactions of the Company with its related parties to ensure the following:

Transactions are approved as per the Policy.
Nature of agreement / Basis of transactions are well established and evidenced.
Appropriate disclosure of all transactions, as applicable.

3. Applicability

The Policy shall apply to all the transactions which fall within the ambit of the Policy of RPTs.

4. Applicability

This Policy sets the definition of RPTs and dealing with RPTs.

5. Definition

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

II. “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).

III. Holding Company: - a company having one or more subsidiaries

IV. “Key Managerial Personnel” (KMP) in relation to a company as defined in Section 2(51) of the Companies Act, 2013, means:

The Chief Executive Officer or the Managing Director or the Manager;
The Company Secretary;
The Whole-time Director;
The Chief Financial Officer;
Such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and
Such other officer as may be prescribed;

V. “Ordinary Course of business” shall mean the usual transactions, customs and practices of the business of the Company and would include activities to be carried out incidental to or to facilitate the business of the Company and is usual or customary to the Company.

VI. “Policy” means this Related Party Transaction Policy, as amended from time-to-time.

VII. “Related Party” in relation to the company means a party related to the company in any of the ways as laid down in Section 2(76) of the Companies Act, 2013 as amended from time to time and includes the following

a director or his relative ;
a key managerial personnel or his relative ;
a firm, in which a director, manager or his relative is a partner ;
a private company in which a director or manager or his relative is a member or director
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;
any body 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 ;
any person under whose advice, directions or instructions a director or manager is accustomed to act: Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity;
any company which is – a holding, subsidiary or an associate company of such company ; a subsidiary of a holding company to which it is also a subsidiary ; or an investing company or the venturer of the company

Explanation.— For the purpose of this clause, “the investing company or the venturer of a company” means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate.

ix. Such other person as may be prescribed.

In accordance with Indian Accounting Standard (Ind AS) 24- Related Party Disclosures, A related party is a person or entity that is related to the entity that is preparing its financial statements:

A. A person or a close member of that person’s family is related to a reporting entity if that person:

has control or joint control of the reporting entity;
has significant influence over the reporting entity; or
is a member of the key management personnel of the reporting entity or of a parent of the reporting entity. B. An entity is related to a reporting entity if any of the following conditions applies:
The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
Both entities are joint ventures of the same third party.
One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
The entity is controlled or jointly controlled by a person identified in (a).
A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

VIII. “Relative” means relative as defined in Section 2(77) of the Companies Act, 2013. Accordingly, ‘‘relative’’, with reference to any person, means anyone who is related to another, if— i. They are members of a Hindu undivided family; ii. They are husband and wife; iii. one person is related to the other in such manner as may be prescribed as per Rule 4 of Companies (Specification of definitions details) Rules, 2014 includes a person who shall be deemed to be the relative of another, if he or she is related to another in the following manner, namely: -

Father (including step-father)
Mother (including step-mother)
Son (including step-son)
Son’s wife
Daughter
Daughter’s husband
Brother (including step-brother)
Sister (including step-sister)

In accordance with Indian Accounting Standard (Ind AS) 24- Related Party Disclosures,

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity including: (a) that person’s children, spouse or domestic partner, brother, sister, father and mother; (b) children of that person’s spouse or domestic partner; and (c) dependants of that person or that person’s spouse or domestic partner.

IX. Related Party Transactions - A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.

X. Subsidiary - a company: (a) in which another company (the holding company) holds, either by itself and/or through one or more subsidiaries, more than one-half in nominal value of its equity share capital; or (b) of which another company (the holding company) controls, either by itself and/or through one or more subsidiaries, the composition of its board of directors.

6. IDENTIFICATION OF RELATED PARTY AND RELATED PARTY TRANSACTIONS:

I. Contracts / arrangements will be treated as RPT if the same have been entered into with any entity which fulfills the definition of “Related Party” as per Indian Accounting Standard (Ind AS) 24 and/or definition given under Section 2(76) of the Companies Act, 2013.

II. All related party contracts/arrangements shall be entered into on Arms' Length basis.

III. In exceptional circumstances, where permitted by law, related party contracts / arrangements may deviate from the principle of Arm’s Length, after approval from the Board or shareholders as the case may and after compliance with the provisions of the Act.

IV. All related party contracts / arrangements shall comply with the Companies Act, 2013.

V. All related party contract / arrangements shall comply with Indian Accounting Standards.

VI. All domestic related party contracts / arrangements shall, wherever applicable, comply with Domestic Transfer Pricing Requirement under section 92BA of Income Tax Act, 1961 including certification from independent accountants under the Transfer Pricing Regulations.

VII. All international related party contract / arrangements shall comply with International Transfer Pricing Requirement under section 92B of Income Tax Act, 1961 including certification from independent accountants under the Transfer Pricing Regulations

VIII. Every Director & Key Managerial Personnel will be responsible for providing a declaration in the format as per Annexure 1 on an annual basis.

IX. Every Director and the Key Managerial Personnel will also be responsible to update to Company Secretaryof any changes in the above relationships, directorships, holdings, interests and/or controls immediately on him/her becoming aware of such changes.

X. Every Director, Key Managerial Personnel authorized to enter into contracts/ arrangementswill be responsible for providing prior notice to the Company Secretary of any potential Related Party Transaction. Further, they will also be responsible for providing additional information about the transaction that the Board may request, for being placed before the Board as mentioned below:

Name of the Related Party and nature of relationship
Nature and duration of the contract/arrangement/transaction and particulars thereof
Material terms of the contract or arrangement or transaction including the value, if any
In case of existing or approved contracts, transactions, details of proposed variations to the duration, current price / value and / or material terms of the contract or arrangement including a justification to the proposed variations
Any advance paid / received or to be paid / received for the contract or arrangement, if any
Manner of determining the pricing and other commercial terms, whether or not included as part of contract
Whether all factors relevant to the contract/arrangement/transaction have been considered, if not, the details of factors not considered with rationale for not considering those factors
Copy of the draft MOU, agreement, contract, purchase order or correspondence etc. if any
Applicable statutory provisions, if any
Valuation reports in case of sale or purchase or leasing / renting of capital assets or securities
Justification as to the arm’s length nature of the proposed transaction
Declaration whether the transaction is in the ordinary course of business
Persons / authority approving the transaction
Any other information which may be relevant or important for the Board to take a decision on the proposed transaction
The Company adopts the following additional steps / procedure after its Identification of Related Party

Related parties are as defined as per the Policy .
Identification and confirmation of related party status needs to be followed periodically.
In the case of KMP/ Directors, the disclosure needs to be in the form of declarations which should be taken on the appointment and event-based.

7. Approval and Review of Related Party transactions

All the transactions which are identified as RPTs should be pre-approved by the Board before entering into such transaction. The Board shall consider all relevant factors while deliberating on the RPTs for its approval.

Provided that the above provisions shall not apply to a transaction, other than for the transaction referred to in Section 188 of the Act, between the Company and the Subsidiary Company.

RPTs to be entered by the Company should be on Arm’s Length basis and in the Ordinary Course of Business and can be ordinarily entered into if they meet the criteria of Arm’s Length and Ordinary Course of Business, without any prior approval of the Board and the Board can take a note of the same from time to time as may be required.

Specific approval of the Board of Directors is required for RPTs which are not in Ordinary Course of Business and not on Arm’s Length under the Act.

Transaction exceeding the threshold defined under rule 15(3) of Companies (Meeting of the Board and its Powers) Rules 2014 also require approval of the shareholders Nothing in this Policy shall override any provisions of Applicable Law made in respect of any matter stated in this Policy.

The Board may grant omnibus approval for related party transactions which are repetitive in nature and subject to such criteria/conditions as mentioned under the provisions of the Companies Act, 2013 and such other conditions as it may consider necessary in line with this Policy and in the interest of the Company. Such omnibus approval shall be valid for a period not exceeding one year and shall require fresh approval after the expiry of one year. The omnibus approval shall specify:

(i) The name(s) of the related party, nature of transaction, period of transaction, maximum amount of transactions that shall be entered into; and (ii) The indicative base price / current contracted price and the formula for variation in the price if any. (iii) Such other conditions as the Board may deem fit:

Omnibus approval shall not be made for transactions in respect of selling or disposing of the undertaking of the company.

The Board shall review, on a annual basis, the details of related party transactions entered into by the Company pursuant to the omnibus approval.
RPTs entered into by the Company, which is not under the omnibus approval or otherwise pre- approved by the Board, will be placed before the Board for ratification in accordance with the provisions of Section 177 of the Act.
Subject to the applicable laws, the Board shall have the power to ratify, revise or terminate the RPTs, which are not in accordance with this Policy.
The approval of RPT shall follow the below guidelines and in doing so, shall consider the key transaction identification parameters and other related considerations (as below) included under this section: a. Omnibus approval criteria b. Arm’s length determination c. Evaluation of transaction under Ordinary Course of Business d. Evaluation of Materiality

A. Omnibus Approval Criteria

a. Criteria for Omnibus Approval as approved in the Policy. b. The transaction is / shall be frequent/regular/repetitive in nature. c. The transaction is / shall be in the Ordinary Course of Business and at Arm’s Length. d. Such other criteria as may be laid down by the Board. e. Such approval shall remain valid for a period not exceeding one year, during which period the commercial terms of approved RPTs may change, provided that, Arm’s Length criterion shall be ensured at the time of each such change. f. Omnibus Approval shall specify:

Name of the related party
Nature of the transaction under the Ordinary Course of Business at Arm’s length
Period of the transaction
The maximum amount of transactions that can be entered into
Any other information relevant or important for the Board to take a decision on the proposed transaction The details of such transactions shall be reported at the next meeting of the Board. All other transactions would require approval.

B. Arm’s Length Determination

The Board shall, in respect of the RPTs referred to them for approval, after considering the information/ documents placed before them; judge if the transaction is at an Arm’s Length basis.
At the time of determining the Arms’ Length nature of the price charged for the RPTs, a permissible method of Arms’ Length pricing as per applicable law would be considered.
The Board may seek views of professionals/ specialists (on a need basis) for analyzing the appropriateness of the transactions from ‘Arm’s Length’ perspective.

C. Evaluation of transaction under Ordinary Course of Business

Transactions entered in pursuance of the business objective of the Company and necessary for Company’s operations or related financial activities, including the fixed assets transactions.
The Board shall, in respect of the RPTs referred to them for approval, after considering the information/ documents placed before them; judge if the transaction is in the ordinary course of business.
The Board may seek views of professionals/ specialists (on a need basis) for analyzing the appropriateness of the transactions from ‘ordinary course of business’.

D. Evaluation of Materiality:

The RPTs which cross the materiality thresholds under the Act as per Rule 15(3) of the Companies (Meetings of Board and its Powers) Rules, 2014 shall be entered by the Company only with prior approval of shareholders of the Company by a resolution, as per applicable provisions of the Act, as may be amended from time to time.

8. Board of Directors

i) In case any RPTs are referred by the Company to the Board for its approval due to the transaction being

not in the ordinary course of business, or
not at an arm’s length price, such transactions shall be affected only with prior approval of the Board of Directors of the Company

ii) The Board will consider such factors as, nature of the transaction, material terms, the manner of determining the pricing and the business rationale for entering into such transaction. On such consideration, the Board may approve the transaction or may require such modifications to transaction terms as it deems appropriate under the circumstances.

iii) Any member of the Board who has any interest in any related party transaction will recuse himself and abstain from discussion and shall not vote to approve the related party transaction. However, such interested member of the Board shall be allowed to a part of discussion and vote in relation to same if prior disclosure is provided to the Board.

9. Shareholders

If a related party transaction is not in the ordinary course of business, or not at arm’s length price and is a Material Related Party Transaction, it shall require shareholders’ approval by a resolution.

10. Related Party not approved in the policy

In the event of entering into a RPT with a Related Party that has not been approved under this Policy prior to its consummation, the matter shall be reviewed by the Board. The Board shall consider the relevant facts and circumstances regarding the RPT, and shall evaluate all options available to the Company, including ratification, revision or termination of the RPT.In any case, where the Board determines not to ratify a RPT that has been commenced without approval, the Board, as appropriate, may direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction.

11. Reporting and Disclosures

Every contract or arrangement, which is required to be approved by the Board/shareholders under this Policy, shall be referred to in the Board’s report to the shareholders along with the justification for entering into such contract or arrangement.

All the disclosure would be done in compliance and in accordance with the requirements as specified under the Act and Ind AS 24.

12. Policy Review

The Board of Directors may in their discretion, make any changes/modifications and/or amendments to this Policy from time to time.

This Policy shall be reviewed by the Board as and when any changes are to be incorporated in the Policy due to change in applicable laws or at least once every year and updated accordingly.

In the event of any conflict between the provisions of this Policy and of the Act or any other statutory enactments, rules, the provisions of such Act or statutory enactments, rules shall prevail over and automatically be applicable to this Policy and the relevant provisions of the Policy would be amended/modified in due course to make it consistent with the law.

For OnEMI Technology Solutions Private Limited

Krishnan Vishwanathan

Director Approved by the Board of Directors at its meeting dated June 13, 2024

ANNEXURE 1

To,

10th Floor, Tower 4, Equinox Park, LBS Marg, Kurla West, Mumbai, Maharashtra 400070.

Dear All,

I, ……………., son/daughter/spouse of …………………, resident of …………….., being a ……… in the Company, hereby give notice of my interest or concern in the following company or companies, body corporate, firms or other association of individuals:

Sr. no.	Names of the Companies/ bodies corporate/ firms/ association of individuals	Nature of interest or concern / Change in interest or concern	Shareholding	Date on which interest or concern arose/changed

Sign:

Name:

Designation:

DIN (if applicable):

Place:

Date: