Policy on Related Party Transactions and Material Subsidiaries

1. PREAMBLE

   The Board of Directors (“Board”) of  Anupam Rasayan India Limited (the “Company”) has adopted the following policy with regard to Related Party Transactions (“RPT/RPTs”) pursuant to the provisions of  the Companies Act, 2013 (“Act”) and the rules framed thereunder as amended from time to time and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015  as amended from time to time (“SEBI Listing Regulations”) and any other laws and regulations as may be applicable to the Company. 

2. OBJECTIVE 

   The objective of the policy is to set out the materiality thresholds for RPTs, the manner of dealing with the RPTs based on the Act, SEBI Listing Regulations and any other laws and regulations that may be applicable. This forms guidelines for identification of related parties and proper conduct and documentation for all RPTs. 

3. DEFINITIONS 

   “Act” shall mean the Companies Act, 2013 read with the rules framed thereunder and each as amended from time to time;

   “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. For determination of Arm’s Length basis, guidance may be taken from the provisions of ‘Transfer Pricing’ under Income Tax Act, 1961;

   “Audit Committee” shall mean the Audit Committee constituted by the Board of Directors of the Company from time to time, in accordance with the provisions of the Act and SEBI Listing Regulations; 

   “Board of Directors” or “Board” shall mean the collective body of the directors of the Company as constituted from time to time in line with the provisions of Section 2 (10) the Act and SEBI Listing Regulations;

   “Control” shall have the meaning as defined under Section 2(27) of the Act and Regulation 16 of the SEBI Listing Regulations;

   “Key Managerial Personnel/KMP” shall mean key managerial personnel as defined under Section 2(51) of the Act; 

   “Material Modification” of related party transaction shall mean and include any subsequent change to an existing related party transaction, having variance of more than + 20% of the existing limit as sanctioned by the Audit Committee/ Board/Shareholders as the case may be; 

   “Material subsidiary” shall mean a subsidiary, whose turnover or net worth exceeds ten percent of the consolidated turnover or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year; 

   “Related Party” with reference to the Company, shall have the meaning as defined in Section 2(76) of the Act and Regulation 2(1)(zb) of SEBI Listing Regulations; 

   “Related Party Transaction” or “RPT” means such transactions as specified under Section 188 of the Act and Regulation 2(1)(zc) of the SEBI Listing Regulations; 

   “Relative” means relative as defined under Section 2 (77) of the Act and Regulation 2(1)(zd) of the SEBI Listing Regulations;

   “Ordinary course of business” means the usual transactions, customs and practices undertaken by the Company to conduct its business operations and activities and includes all such activities which the Company can undertake as per the Memorandum and Articles of Association;

   “SEBI Listing Regulations” shall mean the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as may be amended from time to time and any circulars, notifications or clarifications issued thereunder from time to time by the Securities and Exchange Board of India.

   “Subsidiary” shall mean a subsidiary as defined under Section 2(87) of the Act;

All capitalized terms or terms used in this Policy but not defined herein shall have the meaning assigned to such term in the Act and the rules framed thereunder and the SEBI Listing Regulations.

4. MATERIALITY THRESHOLDS 

   A Related Party Transaction shall be considered material in terms of the provisions of materiality for RPTs as set out under Regulation 23(1) of the SEBI Listing Regulations, and the provisions of the Act applicable to the Company from time to time. 

   Further, in terms of the Regulation 23(1) of the SEBI Listing Regulations, RPT shall be considered material-

• if the transaction(s) to be entered individually or taken together with previous transactions during a financial year, exceeds Rupees 1000 crore (one thousand crore) or 10% (ten percent) of the annual consolidated turnover of the Company as per last audited financial statements of the Company, whichever is lower; 
• if a transaction involving payments made to a Related Party with respect to brand usage or royalty shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year exceed 5% (five percent) of the annual consolidated turnover of the Company as per the last audited financial statements of the Company.  

5. MANNER OF DEALING WITH RELATED PARTY TRANSACTIONS

   All RPTs and subsequent Material Modification must be reported to the Audit Committee for its approval in accordance with this Policy read with Regulation 23 of SEBI Listing Regulations, Section 188 of the Act and any other provisions of applicable law. Only those members of the Audit Committee, who are independent directors, shall approve RPTs.

• Identification of Related Parties:

  Each Director and KMP is responsible for providing notice to the Board/Audit Committee of any potential Related Party Transaction and/or its subsequent Material Modification involving him or her or his or her Relative, including any additional information about the transaction that the Board/Audit Committee may reasonably request. 

  The Company will keep list of Related Parties in appropriate computer system. Audit Committee may determine the procedure to be followed for declaration as well as compilation and circulation of the comprehensive list of Related Parties and the Company Secretary (“CS”) or the Chief Financial Officer (“CFO”) of the Company are authorised to identify and intimate the name of a Related Party to the Board/ Audit Committee. 

• Identification of Related Party Transactions: 

  The CS or the CFO or the Managing Director of the Company based on the list of identified Related Parties as mentioned above, in accordance with the provisions of the Act and SEBI Listing Regulations will determine whether a transaction constitute a Related Party Transaction requiring compliance with this policy. The CFO shall contact and discuss with the concerned department / executive of the Company entering into a transaction where such transaction is entered with the Related Party based on the list of the Related Party mentioned above and shall determine if such transaction is a Related Party Transactions. The CFO in discussion with the concerned department entering into a Related Party Transaction shall establish-

• whether the transaction is at arm’s length? 
• whether the transaction is in the ordinary course of business? 
• whether the transaction is material?
• 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? and
• whether the Related Party Transaction is in the nature of 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.
• Approval of Related Party Transactions by the Audit Committee: 

1. All the RPTs and any subsequent Material Modification shall require prior approval of the Audit Committee; 
2. RPT to which the Subsidiary of the Company is a party but the Company is not a party, shall require prior approval of the Audit Committee if the value of such transaction whether entered into individually or taken together with previous transactions during a financial year exceeds ten per cent of the annual consolidated turnover, as per the last audited financial statements of the Company;
3. RPT to which the Subsidiary of the Company is a party but the Company is not a party, shall require prior approval of the Audit Committee of the Company if the value of such transaction whether entered into individually or taken together with previous transactions during a financial year, exceeds ten per cent of the annual standalone turnover, as per the last audited financial statements of the Subsidiary;
4. Any member of the Audit Committee who has interest in any RPT will abstain from discussion and voting on the approval of the RPT.

• Exceptions:

1. Prior approval of the Audit Committee shall not be required in case of RPTs between the Company and its wholly owned Subsidiary(ies) whose accounts are consolidated with the accounts of the Company and are placed before the shareholders of the Company at general meeting for approval;
2. Prior approval of the Audit Committee shall not be required in case of RPTs between two wholly-owned Subsidiaries of the Company, whose accounts are consolidated with the accounts of the Company and are placed before the shareholders of the Company at general meeting for approval; 
3. Prior approval of the Audit Committee of the Company shall not be required for a RPT to which a listed Subsidiary of the Company is a party but the Company is not a party, if Regulation 23 and Regulation 15(2) of SEBI Listing Regulations are applicable to such listed Subsidiary, further, in case of RPT of the unlisted Subsidiaries of a listed Subsidiary, prior approval of the Audit Committee of the listed Subsidiary of the Company shall suffice, if Regulation 23 and Regulation 15(2) of SEBI Listing Regulations are applicable to such listed Subsidiary;
4. Approval of the Audit Committee of the Company shall not be required in case of any transaction that involves the providing of compensation to a director or key managerial personnel of the Company in relation 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;
5. Approval of the Audit Committee of the Company shall not be required in case of any transaction in which the Related Party’s interest arises solely from ownership of the securities issued by the Company and all holders of such securities receive the same benefits pro rata as the Related Party;
6. Approval of the Audit Committee of the Company shall not be required in case of remuneration and sitting fees paid by the Company or its Subsidiary to its director, KMP or senior management, except who is part of promoter or promoter group, provided that the same is not material in terms of the provisions of Regulation 23 (1) of SEBI Listing Regulations.

• Omnibus approval:

The Company may obtain omnibus approval from the Audit Committee for RPTs proposed to be entered by the Company or its Subsidiary, in accordance with criteria approved and adopted by the Audit Committee and the Board. Such omnibus approval shall be valid for a period of one year and shall require fresh approvals after the expiry of one year.

The Audit Committee shall consider the following factors while specifying the criteria for making omnibus approval:

• Repetitiveness of the transactions (in past or in future);
• Justification for the need of omnibus approval and that such omnibus approval is in the interest of the Company;

The omnibus approval shall specify: 

1. the name(s) of the related party and its relationship with the Company or its Subsidiary, nature of transaction, period of transaction, maximum amount of transaction, in aggregate, that shall be entered into;
2. the indicative base price / current contracted price and the formula for variation in the price if any; and
3. 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.

The Audit Committee shall review, at least on a quarterly basis, the details of RPTs entered into by the Company or its Subsidiary pursuant to each of the omnibus approvals given. 

Transaction of following nature will not be subject to the omnibus approval of the Audit Committee:

1. Transactions which are not at arm’s length or not in the ordinary course of business;
2. Transactions which are not repetitive in nature;
3. Transactions exceeding materiality thresholds as laid down in this Policy;
4. Transactions in respect of selling or disposing of the undertaking of the Company;
5. Financial Transactions e.g. Loan to related parties, Inter Corporate Deposits, subscriptions to bond, debenture or preference shares issued by the related parties, corporate guarantee given/received from related parties; 
6. Any other transaction the Audit Committee may deem not fit for omnibus approval;

Pursuant to the circular no. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/18 dated February 14, 2025, issued by the Securities and Exchange Board of India, and other relevant circulars issued from time to time, in conformity with the provisions of SEBI Listing Regulations, comprehensive/limited/minimum disclosures as applicable to relevant RPT, shall be provided to the Audit Committee for review and approval of such RPT by the Audit Committee.

• Approval of the Related Party Transactions by the Board of Directors: 

As per the provisions of Section 188 of the Act, all kinds of transactions specified under the said section and which are not in the ordinary course of business or not at arm’s length basis, shall be placed before the Board for its approval. Such approval shall be granted only by means of a resolution passed at a meeting of the Board. The Company may fit consider necessary and shall if the Audit Committee or Board so requires, seek external professional opinion to determine whether a RPT is in ordinary course of business or at arm’s length.  

In addition to the above, the following kinds of transactions with related parties shall also be placed before the Board for its approval: 

• Transactions which may be in ordinary course of business and at arm’s length basis but which are as per the policy determined by the Board from time to time (i.e. value threshold or other parameters) require Board approval in addition to Audit committee approval. 
• Transactions in respect of which the Audit Committee is unable to determine whether or not they are in ordinary course of business or are at arm’s length basis and decides to refer the same to the Board for approval. 
• Transactions which are in the ordinary course of business and at arm’s length basis but which in Audit Committee’s view requires Board approval. 
• Transactions exceeding the materiality thresholds laid down in this policy, which are intended to be placed before the shareholders for approval. 
• Exceptions:

1. Approval of Board of Directors of the Company shall not be required for RPTs between the Company and its wholly owned Subsidiary(ies) whose accounts are consolidated with the accounts of the Company and are placed before the shareholders of the Company at general meeting for approval;
2. Approval of Board of Directors of the Company shall not be required in case of RPTs between two wholly-owned Subsidiaries of the Company, whose accounts are consolidated with the accounts of the Company and are placed before the shareholders of the Company at general meeting for approval;
3. Approval of Board of Directors of the Company shall not be required for a RPT to which the listed Subsidiary is a party but the Company is not a party, if Regulation 23 and Regulation 15(2) of SEBI Listing Regulations are applicable to such listed Subsidiary;
4. Approval of Board of Directors of the Company shall not be required in case of any transaction that involves the providing of compensation to a director or key managerial personnel of the Company in relation 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;
5. Approval of Board of Directors of the Company shall not be required in case of any transaction in which the Related Party’s interest arises solely from ownership of the securities issued by the Company and all holders of such securities receive the same benefits pro rata as the Related Party;

• Approval of the Related Party Transactions by the shareholders:

All material Related Party Transactions and subsequent Material Modification as recommended by the Audit Committee shall require prior approval of the shareholders through resolution. In addition, all kinds of transactions which are not in the Ordinary Course of Business or are not at Arm’s Length and exceed the materiality thresholds, as defined above and under the Act, shall require prior approval of the shareholders. For this purpose, no Related Party shall vote to approve such resolution whether the entity is a related party to the particular transaction or not.

• Exceptions:

1. Prior approval of the shareholders of the Company shall not be required for RPTs between the Company and its wholly owned Subsidiary(ies) whose accounts are consolidated with the accounts of the Company and are placed before the shareholders of the Company at general meeting for approval;
2. Prior approval of the shareholders of the Company shall not be required in case of RPTs between two wholly-owned Subsidiaries of the Company, whose accounts are consolidated with the accounts of the Company and are placed before the shareholders of the Company at general meeting for approval;
3. Prior approval of the shareholders of the Company shall not be required for a RPT to which the listed Subsidiary is a party but the Company is not a party, if Regulation 23 and Regulation 15(2) of SEBI Listing Regulations are applicable to such listed Subsidiary;
4. Approval of shareholders of the Company shall not be required in case of any transaction that involves the providing of compensation to a director or key managerial personnel of the Company in relation 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; 
5. Approval of shareholders of the Company shall not be required in case of any transaction in which the Related Party’s interest arises solely from ownership of the securities issued by the Company and all holders of such securities receive the same benefits pro rata as the Related Party;

Pursuant to the circular no. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/18 dated February 14, 2025, issued by the Securities and Exchange Board of India, and other relevant circulars issued from time to time, in conformity with the provisions of SEBI Listing Regulations, comprehensive disclosures as applicable to relevant RPT, shall be provided to the shareholders for review and approval of such RPT.

6. RATIFICATION OF RELATED PARTY TRANSACTIONS: 

• Review/ratification by Audit Committee: 
• In the event the Company becomes aware of 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 members of Audit Committee, who are independent directors, within a period of three months from the date of the transaction or in the immediate next meeting of the Audit Committee, whichever is earlier, subject to the following conditions:

1. the value of the ratified transaction(s) with a Related Party, whether entered into individually or taken together, during a financial year shall not exceed Rs. 1 crore;
2. the transaction is not material as per Regulation 23(1) of the SEBI Listing Regulations;
3. rationale for inability to seek prior approval of the transaction shall be placed before the Audit Committee at the time of seeking ratification;
4. the details of ratification shall be disclosed along with the disclosures of RPTs in terms of the provisions of Regulation 23(9) of the SEBI Listing Regulations;
5. any other condition as specified by the Audit Committee.

Provided that failure to seek ratification of the Audit Committee shall render the transaction voidable at the option of the Audit Committee and if the transaction is with a Related Party to any director, or is authorised by any other director, the director(s) concerned shall indemnify the Company against any loss incurred by it. 

• The Audit Committee shall consider all of 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. 
• The Audit Committee shall also examine the facts and circumstances pertaining to the failure of reporting of such RPT to the Audit Committee under this policy and shall give directions or take any such actions it deems appropriate. 
• In the case where the Audit Committee determines not to ratify a RPT that has been commenced without 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 RPT, the Audit Committee has the authority to modify or waive any procedural requirements of this policy. 
• Ratification by the Board:

In case any contract or arrangement is entered into by a director or any other employee of the Company without obtaining the consent of the Board or approval of the shareholders of the Company under Section 188(1) of the Act 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 contract or arrangement was entered into, such contract or arrangement shall be voidable at the option of the Board and if the contract or arrangement is with the Related Party to any director, or is authorized by any other director, the directors concerned shall indemnify the Company against any losses incurred by it. 

7. MATERIAL SUBSIDIARY(IES):

A Subsidiary shall be considered as material if the turnover or the net worth of the Subsidiary exceeds 10% (ten percent) of the consolidated turnover or net worth respectively of the Company and its subsidiaries in the immediately preceding accounting year. 

For the purpose of compliance with Regulation 24 of the SEBI Listing Regulations: the material Subsidiary shall mean a Subsidiary, whose turnover or net worth exceeds 20% (twenty percent) of the consolidated turnover or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year. The Company shall not dispose of shares in its material Subsidiary as defined in this para, which would reduce its shareholding (either on its own or together with other subsidiaries) to less than 50% (fifty percent) or cease exercise of control over the Subsidiary without passing a special resolution in its General Meeting except in cases where such divestments is made under a scheme of arrangement duly approved by a court /tribunal or under as resolution plan duly approved under Section 31 of the Insolvency and Bankruptcy Code 2016 and such an event is disclosed to the recognized stock exchanges. 

Selling disposing and leasing of assets amounting to more than 20% (twenty percent) of the assets of the material Subsidiary on an aggregate basis during a financial year shall require prior approval of shareholders of the Company by way of special resolution, unless the sale/ disposal/lease is made under a scheme of arrangement duly approved by a court/tribunal or under a resolution plan duly approved under Section 31 of the Insolvency and Bankruptcy Code 2016 and such an event is disclosed to the recognised stock exchanges. 

8. LIMITATION:

In the event of any conflict between the provisions of this policy and of the Act or SEBI Listing Regulations or any other statutory enactments, rules, the provisions of the Act, SEBI Listing Regulations or statutory enactments, rules shall prevail over this policy. 

In case of any amendment(s), clarification(s), circular(s), etc. issued by the relevant authorities not being consistent with the provisions laid down in the policy, then such amendment(s), clarification(s), circular(s), etc. shall prevail upon the provisions herein and this policy shall stand amended accordingly from the effective date as laid down under such amendment(s), clarification(s), circular(s), etc.

9. DISCLOSURES: 

Every contract or arrangement entered into under Section 188(1) of the Act shall be referred to in the Board’s Report to the shareholders of the Company along with the justification for entering into such contract or arrangement.

The Company shall submit to the stock exchanges disclosures of RPTs in the format as specified by the Securities and Exchange Board of India from time to time.

RPTs and this policy shall be disclosed as per the requirements of the applicable law including provisions of the Act and as per SEBI Listing Regulations. This policy shall also be uploaded on the website of the Company and a weblink shall be given in the annual report of the Company. 

10. AMENDMENTS AND REVIEWS:

The Board shall review the policy once in every three years and may amend this policy from time to time after taking recommendations from the Audit Committee into account.

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