Rule 6A Omnibus approval for related party transactions on annual basis
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.All related party transactions shall require approval of the Audit Committee and the Audit Committee may make omnibus approval for related party transactions proposed to be entered into by the company subject to the following conditions, namely:-
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(1) The Audit Committee shall, after obtaining approval of the Board of Directors, specify the criteria for making the omnibus approval which shall include the following, namely:-
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(a) maximum value of the transactions, in aggregate, which can be allowed under the omnibus route in a year;
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(b) the maximum value per transaction which can be allowed;
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(c) extent and manner of disclosures to be made to the Audit Committee at the time of seeking omnibus approval;
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(d) review, at such intervals as the Audit Committee may deem fit, related party transaction entered into by the company pursuant to each of the omnibus approval made;
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(e) transactions which cannot be subject to the omnibus approval by the Audit Committee.
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(2) The Audit Committee shall consider the following factors while specifying the criteria for making omnibus approval, namely: -
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(a) repetitiveness of the transactions (in past or in future);
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(b) justification for the need of omnibus approval.
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(3) The Audit Committee shall satisfy itself on the need for omnibus approval for transactions of repetitive nature and that such approval is in the interest of the company.
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(4) The omnibus approval shall contain or indicate the following: -
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(a) name of the related parties;
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(b) nature and duration of the transaction;
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(c) maximum amount of transaction that can be entered into;
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(d) the indicative base price or current contracted price and the formula for variation in the price, if any; and
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(e) any other information relevant or important for the Audit Committee to take a decision on the proposed transaction:
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.Provided that where the need for related party transaction cannot be foreseen and aforesaid details are not available, audit committee may make omnibus approval for such transactions subject to their value not exceeding rupees one crore per transaction.
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(5) Omnibus approval shall be valid for a period not exceeding one financial year and shall require fresh approval after the expiry of such financial year.
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(6) Omnibus approval shall not be made for transactions in respect of selling or disposing of the undertaking of the company.
1Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.(7) Any other conditions as the Audit Committee may deem fit.
1. Rule 6A ins. by G.S.R. 971(E), dated 14th December, 2015 (Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015), w.e.f. 14th December, 2015.