Related Party Transaction Policy

Introduction

The Board of Directors (“the Board”) of Oriental Finstock Services Private Limited (“the Company” or “Oriental Finstock”) has adopted this **Related Party Transaction Policy (“Policy”)** to govern all contracts or arrangements with Related Parties, in accordance with the Companies Act, 2013 and the relevant rules, as well as the RBI’s Corporate Governance Directions.

Purpose

This Policy is established pursuant to Section 188 and other relevant sections of the Companies Act, 2013, along with the RBI’s Corporate Governance Directions, to ensure that all transactions between the Company and its Related Parties are properly approved and transparently reported. Such transactions will only be undertaken if they serve the best interests of the Company and its stakeholders.

Definitions

1. Turnover: As defined in the Companies Act, 2013.
2. Arm’s Length Transaction: A transaction between Related Parties conducted as if they were unrelated, ensuring no conflict of interest.
3. Associate: An entity where the Company has significant influence (at least 20% shareholding or control over business decisions), but which is not a subsidiary. This includes joint ventures.
4. Board: The Board of Directors of Oriental Finstock.
5. Company Secretary: An individual appointed to perform the duties of Company Secretary under the Companies Act, 2013.
6. Key Managerial Personnel: Includes the CEO/Managing Director/Manager, Company Secretary, Whole-Time Directors, CFO, and any other officer as prescribed under Section 2(51) of the Act.
7. Net Worth: Computed as per Section 2(57) of the Companies Act, 2013, based on the audited financials of the previous year.
8. Policy: This Related Party Transaction Policy.
9. Related Party: Includes, but is not limited to:
   • Directors or their relatives
   • Key managerial personnel or their relatives
   • Firms where directors, managers, or their relatives are partners
   • Private companies where directors/managers or their relatives are members or directors
   • Bodies corporate influenced by the Company’s directors or managers
   • Entities acting on the advice of the Company’s directors or managers (excluding professional advice)
   • Holding, subsidiary, associate, or investment companies of Oriental Finstock
   • Any other person/entity prescribed under the Act or holding 20% or more (10% or more from April 1, 2023) of the Company’s equity, directly or indirectly, in the preceding financial year
   • Entities forming part of the promoter group as per regulatory definitions
10. Related Party Transaction: Any transaction with a Related Party as specified under Section 188(1)(a)-(g) of the Companies Act, 2013, whether directly or indirectly.
11. Specified Related Party Transaction: Includes transactions involving sale, purchase, or supply of goods/materials, transfer or lease of property, rendering or availing services, appointment of agents, appointment to office or place of profit, and underwriting of securities, outside the ordinary course of business or not at arm’s length.
12. Material Related Party Transaction: Any transaction or series of transactions with a Related Party that meets or exceeds the thresholds prescribed under the Act (e.g., 10% of turnover or net worth, or as otherwise specified).
13. Relative: As defined in Section 2(77) of the Companies Act, 2013, including immediate family members and those specified in the Act.
14. Transaction: Includes any contract, arrangement, or group of transactions with a Related Party, whether single or aggregated for the purpose of applying policy thresholds.

Approval Process

Board Approval

1. All Related Party Transactions must be reported to and **pre-approved by the Board**.
2. Any director with an interest in a Related Party Transaction must **abstain from discussion and voting** on the relevant resolution.
3. The Board will review all relevant information, including transaction terms, business rationale, and benefits to the Company and the Related Party, before granting approval.
4. The Board may grant **omnibus approval** for repetitive transactions, provided:
   • The need for such approval is justified and in the Company’s interest.
   • The approval specifies the name of the related party, nature and duration of the transaction, maximum transaction value, indicative pricing or pricing formula, and any other relevant conditions.
   • Where specific details are not available, omnibus approval may be granted for transactions **not exceeding INR 1 crore per transaction**.
   • Omnibus approval is valid for up to **one financial year** and must be renewed annually.
   • Omnibus approval is **not permitted** for transactions involving the sale or disposal of the Company’s undertaking.
5. The Board will periodically review all transactions approved under the omnibus route.

Shareholder Approval

• Shareholder approval is required for:
  • Material Related Party Transactions
  • Transactions not in the ordinary course of business or not at arm’s length, and exceeding prescribed thresholds.
• Related parties must **abstain from voting** on resolutions approving such transactions.

Identification and Disclosure

1. Every Director and Key Managerial Personnel must declare any entity or person that qualifies as a Related Party under this Policy, including details of shareholding, directorships, partnerships, and other interests.
2. Officers authorized to enter into transactions must notify the Board, via the Company Secretary, of any potential Related Party Transaction for review and compliance.

Handling Unapproved Related Party Transactions

• If a Related Party Transaction is identified that was not pre-approved, it must be reviewed by the Board.
• The Board will consider all relevant facts and determine whether to **ratify, revise, or terminate** the transaction and may take additional action as appropriate.
• If the Board does not ratify the transaction, it may require immediate cessation or rescission of the transaction.

Exceptions

1. Board approval is not required for transactions in the **ordinary course of business and conducted at arm’s length**.

Policy Review and Amendment

• In case of any conflict between this Policy and applicable law, the provisions of the law will prevail.
• Any amendments to the Companies Act, 2013, RBI guidelines, or other applicable regulations will automatically apply to this Policy.
• This Policy is subject to **annual review** and will be updated as required to ensure ongoing compliance.