WHAT ARE THE VARIOUS RELATED PARTY TRANSACTIONS DISCLOSURES APPLICABLE UNDER COMPANIES ACT?

AOC-2 

OMNIBUS APPROVAL FOR RELATED PARTY TRANSACTIONS ON ANNUAL BASIS 

1. Details of contracts or arrangements or transactions not at arm’s length basis

(a) Name(s) of the related party and nature of relationship 

(b) Nature of contracts/arrangements/transactions 

(c) Duration of the contracts / arrangements/transactions

(d) Salient terms of the contracts or arrangements or transactions including the value, if any  

(e) Justification  for entering into such contracts or arrangements or transactions 

(f) date(s) of approval by the Board 

(g) Amount paid as advances, if any: 

(h) Date on which the special resolution was passed in general meeting as required under first proviso to  section 188 

2. Details of material contracts or arrangement or  transactions at arm’s length basis  

(a) Name(s) of the related party and nature of relationship

(b)Nature of contracts/arrangements/transactions

(c) Duration of the contracts / arrangements/transactions

(d) Salient terms of the contracts or arrangements or transactions including the value, if any:

(e) Date(s) of approval by the Board, if any:

(f) Amount paid as advances, if any:

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

(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:- 

(a) maximum value of the transactions, in aggregate, which can be allowed under the omnibus route in a year;   

(b) the maximum value per transaction which can be allowed;   

(c) extent and manner of disclosures to be made to the Audit Committee at the time of seeking omnibus approval;   

(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;  

(e) transactions which cannot be subject to the omnibus approval by the Audit Committee.   

(2) The Audit Committee shall consider the following factors while specifying the criteria for making omnibus approval, namely: - 

(a) repetitiveness of the transactions (in past or in future); 

(b) justification for the need of omnibus approval. 

(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.

(4) The omnibus approval shall contain or indicate the following: -

(a) name of the related parties; 

(b) nature and duration of the transaction; 

(c) maximum amount of transaction that can be entered into; 

(d) the indicative base price or current contracted price and the formula for variation in the price, if any; and 

(e) any other information relevant or important for the Audit Committee to take a decision on the proposed transaction:  

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.  

(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.  

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

(7) Any other conditions as the Audit Committee may deem fit."

AGENDA

NOTICE EXPLANATORY STATEMENT

The agenda of the Board meeting at which the resolution is proposed to be moved shall disclose-

(a) the name of the related party and nature of relationship;

(b) the nature, duration of the contract and particulars of the contract or arrangement;

(c) the material terms of the contract or arrangement including the value, if any;

(d) any advance paid or received for the contract or arrangement, if any;

(e) the manner of determining the pricing and other commercial terms, both included as part of contract and not considered as part of the contract;

(f) whether all factors relevant to the contract have been considered, if not, the details of factors not considered with the rationale for not considering those factors; and

(g) any other information relevant or important for the Board to take a decision on the proposed transaction.

The explanatory statement to be annexed to the notice of a general meeting convened pursuant to section 101 shall contain the following particulars, namely:-

(a) name of the related party;

(b) name of the director or key managerial personnel who is related, if any;

(c) nature of relationship;

(d) nature, material terms, monetary value and particulars of the contract or arrangements;

(e) any other information relevant or important for the members to take a decision on the proposed resolution.]