1. Background

   Si Creva Capital Services Private Limited is a private limited company, incorporated under the provisions of the Companies Act, 2013, having Corporate Identification Number (CIN) U65923MH2015PTC266425 (“Si Creva”/“Company”). Si Creva is a Non-Deposit taking Non-Banking Financial Company in the category of Middle Layer, bearing Registration no. N-13.02129.

   Si Creva is in the business of the provision of consumer and personal loans by using two digital lending applications viz; ‘Kissht’ and ‘PaywithRing’ which are owned by OnEMI Technology Solutions Private Limited (functioning as a Loan Service Provider – LSP) as also its 100% holding company. Besides this, Si Creva is also lending through the mobile app and web-based applications on the platforms of other Lending Service Providers (“LSPs”).

2. Purpose and Objective

   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.

   Additionally, the Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 requires Middle Layer NBFCs to have in place a Policy on Related Party Transactions which shall be disclosed on the website of such NBFCs as well as their Annual Report.

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

   • All transactions with Related Parties 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 on dealing with Related Party Transactions.

4. SCOPE

   This policy sets the definition of related party transactions and dealing with related party transactions.

5. DEFINITION

   • “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.
   • “Associate Company” shall have the same meaning as provided in Section 2(6) of the Companies Act, 2013 wherein an “Associate Company” in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. For the purposes of this term ‘Associate Company’, “significant influence” means control of at least twenty per cent of total share capital, or of business decisions under an agreement.
   • “Audit Committee” or “Committee” means the audit committee of the Company as constituted by the Board. Where the Company doesn’t have an audit committee, the word “Audit Committee” to be read as the “Board” itself throughout the Policy.
   • “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).
   • Holding Company: – a company having one or more subsidiaries.

   • “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;
   • “Material RPT” means any contract/ arrangement with a related party as defined under Section 188(1) of the Act, which is equal to or exceeds the limits mentioned under Rule 15(3) of the Companies (Meetings of the Board and its powers) Rules, 2014 as per the last audited financial statements of the Company.
   • “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.
   • “Policy” means this Policy on Dealing with Related Party Transactions, as amended from time-to-time.

   • “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;
     • 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;

     • 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.

       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 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.

       • 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.

   • “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—

     • They are members of a Hindu undivided family;
     • They are husband and wife;

     • 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.

   • 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.

6. IDENTIFICATION OF RELATED PARTY AND RELATED PARTY TRANSACTIONS:

   • Contracts / arrangements will be treated as Related Party Transaction if the same has 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.
   • All related party contracts/arrangements shall be entered into on arms’ length basis.
   • 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.
   • All related party contracts / arrangements shall comply with the Companies Act, 2013.
   • All related party contract / arrangements shall comply with Indian Accounting Standards.
   • 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.
   • 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.
   • Every Director & Key Managerial Personnel will be responsible for providing a declaration in the format as per Annexure 1 on an annual basis.
   • Every Director and the Key Managerial Personnel will also be responsible to update to Company Secretary of any changes in the above relationships, directorships, holdings, interests and/or controls immediately on him/her becoming aware of such changes.

   • Every Director, Key Managerial Personnel authorized to enter into contracts/ arrangements will 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 Audit Committee shall review the transactions entered into with the related party on a quarterly basis and submit them to the Board for its approval.

   The Company ensures 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 are followed periodically.
   • In case of KMP/ Directors, the disclosure is 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 Audit Committee before entering into such transaction (whether at a meeting or through electronic mode). The Audit Committee shall consider all relevant factors while deliberating on the RPTs for its approval.

     To review a RPT which requires approval of the Audit Committee, the Audit Committee will be provided with all relevant material information to assist it in deciding whether or not to approve the transaction.

     Any member of the Audit Committee who has a potential interest in any RPT will recuse himself and abstain from discussion and voting on the approval of the Related Party transaction.

     The list of Related Parties shall be updated whenever necessary and shall be reviewed at least once a year, as on 1st April every year.

     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 Holding Company.

   • Related Party Transactions 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 Audit Committee/ Board of Directors is required for Related Party Transactions not in ordinary course of business 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 Audit Committee 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:

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

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

   • The Audit Committee shall review, on an 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 Audit Committee, will be placed before the Audit Committee 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:

     • Omnibus approval criteria
     • Arm’s length determination
     • Evaluation of transaction under Ordinary Course of Business
     • Evaluation of Materiality

     • Omnibus Approval Criteria

       • Criteria for Omnibus Approval as approved in the Policy.
       • The transaction is / shall be frequent/regular/repetitive in nature.
       • The transaction is / shall be in the ordinary course of business and at arm’s length.
       • Such other criteria as may be laid down by the Audit Committee.
       • 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.

       • 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 audit committee to take a decision on the proposed transaction.

         The details of such transactions shall be reported at the next meeting of the Audit Committee. All other transactions would require approval.

     • Arm’s Length Determination

       The Audit Committee/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 Related Party Transaction, a permissible method of arms’ length pricing as per applicable law would be considered.
       • The Audit Committee/ the Board may seek views of professionals/ specialists (on a need basis) for analyzing the appropriateness of the transactions from ‘arm’s length’ perspective.

     • 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 Audit Committee/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 Audit Committee/ the Board may seek views of professionals/ specialists (on a need basis) for analyzing the appropriateness of the transactions from ‘ordinary course of business’.

     • Evaluation of Materiality:

       The RPTs which cross the Materiality thresholds under the Companies Act, 2013 as per Rule 15 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

   • 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, on recommendation of Audit Committee.
   • 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.
   • 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 Related Party Transaction with a Related Party that has not been approved under this Policy prior to its consummation, the matter shall be reviewed by the Audit Committee. The Audit Committee shall consider the relevant facts and circumstances regarding the Related Party Transaction and shall evaluate all options available to the Company, including ratification, revision or termination of the Related Party Transaction.

    In any case, where the Audit Committee determines not to ratify a Related Party Transaction 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.

11. Loans and advances to Directors/ Senior Officers

    Notwithstanding anything contrary contained hereinabove, unless sanctioned by the Audit Committee and the Board of Directors, the Company shall not grant loans and advances aggregating Rupees five crores and above to:

    • The directors (including the Chairman/ Managing Director) of the Company or Relative of the directors.
    • any firm in which any of the directors or their Relative is/ are interested as a partner, manager, employee or guarantor.
    • any company in which any of the directors, or their Relative is interested as a major shareholder (a person holding 10 % or more of the paid-up share capital or five crore rupees in paid-up shares, of that company, whichever is lower), director, manager, employee or guarantor.

    Provided that the director or his/her Relative shall be deemed to be interested in a company, being the subsidiary or holding company of company, if he/ she is a major shareholder or is in control of the respective holding or subsidiary company.

    The proposals for credit facilities of an amount less than Rupees five crores to such borrowers may be sanctioned by Board of Directors . However, the matter should be subsequently reported to the Audit Committee or Board of the Company.

    The above provision will also be applicable in case of awarding of all kinds of contracts involving sale of purchase of goods and/ or rendering of services to and by the Company.

    The term ‘loans and advances’ will not include loans or advances against:

    • Government securities
    • Life insurance policies
    • Fixed deposits
    • Stocks and shares
    • Advance against salary, housing loans, car advances, etc. granted to an employee of the Company under any scheme/ policy applicable generally to employees.

    Provided that the Company’s interest/ lien is appropriately marked (wherever applicable) with legal enforceability.

12. 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 requirement as specified under the Companies Act 2013 and IndAS 24.

    Details of all material transactions with related parties shall be disclosed in the Annual Report and the Financial Statements in the prescribed format.

    The policy shall be placed on the Website of the Company.

13. Policy Review

    The Board of Directors may in their discretion and on recommendation of the Audit Commitee, 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.

14. Omnibus Clause

    All extant & future Master Circular/Directions/Guidance/Guidance Notes issued by RBI and Companies Act, 2013 and its rules from time to time would be the directing force for the Related Party Transactions and will super cede the contents of this policy.

For Si Creva Capital Services Private Limited