RELATED PARTY TRANSACTION POLICY

RELATED PARTY TRANSACTION POLICY

Table of Contents

1. Introduction .................................................................................................................. 2

2. Purpose ......................................................................................................................... 2

3. Definition ...................................................................................................................... 2

4. Policy ............................................................................................................................. 5

4.1 Identification ......................................................................................................... 5

4.2 Review .................................................................................................................... 6

4.3 Approval................................................................................................................. 7

4.4 Transactions Not Requiring Approval: ................................................................. 7

5. Communication of this Policy: ..................................................................................... 7

6. Maintenance of Registers: ........................................................................................... 7

7. Disclosure: .................................................................................................................... 8

8. Amendment:................................................................................................................. 9

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 RELATED PARTY TRANSACTION POLICY

1. Introduction
The Board of Directors (the “Board”) of Raymond Limited (the “Company”), adopts the
following policy and procedures with regard to Related Party Transactions (RPT) as defined
below, in compliance with the requirements of Section 188 of the Companies Act 2013 (the
“Act”)and Rules made thereunder and any subsequent amendments thereto and Listing
Agreement with the Stock Exchanges, in order to ensure the transparency and procedural
fairness of Related Party Transactions.

2. Purpose
This policy aims to chart out procedures to ensure that the transactions with related parties
are fair.

This policy intends to ensure the transparency of approval process and disclosures
requirements to ensure fairness in the conduct of related party transactions, in terms of the
applicable laws. This Policy shall supplement the Company’s other policies in force that may
be applicable to or involve transactions with related persons.

3. Definition

➢ “Audit Committee or Committee” means Committee of Board of Directors of the

Company constituted under provisions of Listing agreement and Companies Act, 2013.

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

➢ “Control” shall have the same meaning as defined in SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 2011.

➢ “Key Managerial Personnel” means key managerial personnel as defined under the
Companies Act, 2013 and includes:
i. Managing Director, or Chief Executive Officer or Manager and in their absence, a
whole-time director;
ii. Company Secretary; and
iii. Chief Financial Officer.

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➢ “Related Party Transactions” means any transaction directly or indirectly

involving any Related Party which is a transfer of resources, services or obligations
between a company and a related party, regardless of whether a price is charged. It
refers to transactions/ contracts/ arrangement between the Company and its
related parties which fall under one or more of the following headings:
o As per Section 188 of the Companies’ Act 2013:
▪ Sale, purchase or supply of any goods or materials;
▪ Selling or otherwise disposing of, or buying, property of any kind;
▪ Leasing of property of any kind;
▪ Availing or rendering of any services;
▪ Appointment of any agent for purchase or sale of goods, materials, services
orproperty;
▪ Such related party's appointment to any office or place of profit in the
Company,
▪ its subsidiary Company or associate Company; and
▪ Underwriting the subscription of any securities or derivatives thereof, of
theCompany;
o As per Regulation 2 (zc) of SEBI LODR:
▪ Transfer of resources, services or obligations between a Company and a
related party, regardless of whether a price is charged and a “transaction”
with a related party shall be construed to include a single transaction or a
group of transactions in a contract.
o As per AS 18:
▪ Transfer of research and development
▪ License agreements
▪ Finance (including loans and equity contributions in cash or kind).
▪ Guarantees and collaterals
▪ Management contracts including for deputation of employees.

➢ “Material Related Party Transaction” means a transaction with a related party if

the transaction / transactions to be entered into individually or taken together with
previous transactions during a financial year, exceeds ten percent of the annual
consolidated turnover of the Company as per the last audited financial statement of the
Company.

➢ “Policy” means Related Party Transaction Policy.

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➢ “Related Party” means related party as defined in Regulation 2(zb) of SEBI (Listing
Obligations and Disclosure Requirements), 2015 which is as follows:

A ‘related party' is a person or entity that is related to the Company. Parties are
considered to be related if one party has the ability to control the other party or
exercise significant influence overthe other party, directly or indirectly, in making
financial and/or operating decisions and includes the following:

1. A person or a close member of that person’s family is related to a Company if that

person:
a. is a related party under Section 2(76) of the Companies Act, 2013 which are as
follows:
i. a director or his relative ;
ii. a key managerial personnel or his relative ;
iii. a firm, in which a director, manager or his relative is a partner ;
iv. a private company in which a director or manager is a member or director ;
v. 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;
vi. anybody 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 ;
vii. 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;

viii. any company which is –

A. a holding, subsidiary or an associate company of such company ;
or
B. a subsidiary of a holding company to which it is also a subsidiary ;
ix. Director or key managerial personnel of the holding company or his relative
with reference to a company; or
b. has control or joint control or significant influence over the company; or
c. is a key management personnel of the company or of a parent of the company;
or
2. An entity is related to a company if any of the following conditions applies:
a. The entity is a related party under Section 2(76) of the Companies Act, 2013; or
b. The entity and the company are members of the same group (which means that
each parent, subsidiary and fellow subsidiary is related to the others); or
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c. 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); or
d. Both entities are joint ventures of the same third party; or
e. One entity is a joint venture of a third entity and the other entity is an associate
of the third entity; or
f. The entity is a post-employment benefit plan for the benefit of employees of
either the company or an entity related to the company. If the company is itself
such a plan, the sponsoring employers are also related to the company; or
g. The entity is controlled or jointly controlled by a person identified in (1).
h. A person identified in (1)(b) has significant influence over the entity (or of a
parent of the entity); or
➢ “Relative”means relative as defined under the Companies Act, 2013 and includes
anyone who is related to another, if –

• They are members of a Hindu Undivided Family;

• They are husband and wife; or
• 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)

4. Policy

4.1 Identification

➢ Responsibility of Directors and KMP’s: Each director and Key Managerial

Personnel is responsible for providing notice to the Board or Audit Committee of any
potential Related Party Transaction involving him or her or his or her Relative, including
any additional information about the transaction that the Board/Audit Committee may
reasonably request.

➢ Time Line: The Company strongly prefers to receive such notice of any potential
Related Party Transaction well in advance so that the Audit Committee/Board has

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adequate time to obtain and review information about the proposed transaction.
Every director or key managerial personnel shall, within a period of thirty days of
his appointment, or relinquishment of his office in other Companies, as the case
may be, disclose to the Company the particulars relating to his/her concern or
interest in otherassociations.
➢ From the Transfer Pricing Perspectives:The related parties as defined under the
Income Tax Act, 1961 shall also be determined by the Legal/ Finance Team in
accordance with the relevant sections of the Act.

4.2 Review

➢ Audit Committee/Board will determine whether the transaction does, in fact, constitute
a Related Party Transaction requiring compliance with this policy.
➢ Audit Committee to be provided with all relevant information for review:
o terms of the transaction,
o business purpose of the transaction, and
o any other relevant matters.
o Guidance will be sought under the guidelines for transfer pricing as per the
Income Tax Act, 1961.
o Whether the transaction affects the independence of any independent director;
o Whether there are any compelling business reasons for the Company to enter
into the Related Party Transaction and the nature of alternative transactions, if
any;
o Whether the proposed transaction includes any potential reputational risk issues
that may arise as a result of or in connection with the proposed transaction;
o Whether prior approval of the company was taken for the transaction; If prior
approval was not taken, can the transaction be ratified; would such ratification
be detrimental to the company;
▪ In any case, where the Committee determines not to ratify a Related Party
Transaction that has been commenced without approval, the 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 Committee has authority to
modify or waive any procedural requirements of this Policy.
o Whether the Related Party Transaction would present an improper conflict of
interest for any director or Key Managerial Personnel of the Company, taking
into account the size of the transaction, the overall financial position of the

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director, Executive Officer or other Related Party, the direct or indirect nature of
the director’s, Key Managerial Personnel’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.

4.3 Approval

➢ All Related Party Transactions shall require prior approval of Audit Committee.
➢ Further, all Material Related Party Transactions as defined in Clause 3 above shall require
approval of the shareholders through ordinary resolution even if they meet the twin
test of arms’ length and ordinary course of business.
➢ Related Parties shall abstain from voting on such resolutions.

4.4 Transactions Not Requiring Approval:

Notwithstanding the foregoing, the following Related Party Transactions shall not require
approval of Audit Committee or Shareholders:

a. Any transaction that involves the providing of compensation to a director or Key

Managerial Personnel 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.
b. 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.

5. Communication of this Policy:

This Policy will be communicated to all operational employees and other concerned persons
of the Company.

6. Maintenance of Registers:
The Company shall keep and maintain a register, either physically or electronicallygiving
separately the particulars of all contracts or arrangements to which Section 188 of the
Companies Act, 2013 applies. If Section 188(1) is not applicable because of the exception
under the third proviso to Section 188(1) i.e. transaction with related party at arms’ length
basis and in the ordinary course of business, the requirement regarding entries in the

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Register under Section 189 of the Companies Act, 2013 would not apply and hence no
entries in the register would be necessary.

The Company shall maintain such register in the Registered Office of the Company and
provideextracts from such register to a member of the Company on his request, within
seven daysfrom the date on which such request is made upon the payment of such fee as
may bespecified in the articles of the Company but not exceeding ten rupees per page.

The register to be kept under this section shall also be produced at the
commencementofevery Annual General Meeting of the Company and shall remain open
and accessibleduringthe continuance of the meeting to any person having the right to
attend the meeting.

The register shall be preserved permanently and shall be kept in the custody of
theCompanySecretary /Chief Financial Officer of the Company or any other person
authorizedby the Board for the purpose.

7. Disclosure:

➢ Details of all material transactions with related parties are to be disclosed quarterly
along with the compliance report on corporate governance.

➢ The Company shall disclose the contract or arrangements entered into with the Related
Party in the Board Report to the shareholders along with the justification for entering
into such contract or arrangement.

➢ The Company shall disclose this policy relating to Related Party Transactions on its
website and also in the Annual Report.

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8. Amendment:

The Board of Directors reserves the power to review and amend this policy from time to
time. Any exceptions to the Policy on Related Party Transactions must be consistent with
the Companies Act 2013, including the Rules promulgated thereunder and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.

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