Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015


Central government has notified Companies (Meetings of Board and its Powers) Second Amendment  Rules, 2015 via notification dated 14th December , 2015 to amend the Companies (Meetings of Board and its Powers) Rules, 2014 and inserted the following rule 6A after rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014:

"6A. Omnibus approval for related party transactions on annual basis.- 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.".

(ii)         Rule  10  shall be omitted;

(iii)        In rule 15, in sub-rule (3), for the word s "special resolution", wherever they occur, the word "resolution" shall be   substituted.

http://mca.gov.in/Ministry/pdf/Amendement_Rules_14122015_1.pdf 

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