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TMI BlogRelated party transactionsX X X X Extracts X X X X X X X X Extracts X X X X ..... e, a transaction with a related party shall be considered material, if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds Rupees fifty crore or ten per cent. of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity, whichever is lower.] 2[(1A) Notwithstanding the above, 7[with effect from July 01, 2019,] a transaction involving payments made to a related party with respect to brand usage or royalty shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceed 8[five] percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity.] (2) All related party transactions 12[and subsequent material modifications] shall require prior approval of the 13[audit committee of the listed entity:] 9[Provided that only those members of the audit committee, who are independent directors, shall approve related party transactions.] 14[Provided further that: (a) the audit committee of a list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogether, during a financial year shall not exceed rupees one crore; (ii) the transaction is not material in terms of the provisions of sub-regulation (1) of this regulation; (iii) rationale for inability to seek prior approval for the transaction shall be placed before the audit committee at the time of seeking ratification; (iv) the details of ratification shall be disclosed along with the disclosures of related party transactions in terms of the provisions of sub-regulation (9) of this regulation; (v) any other condition as specified by the audit committee: Provided that failure to seek ratification of the audit committee shall render the transaction voidable at the option of the audit committee and if the transaction is with a related party to any director, or is authorised by any other director, the director(s) concerned shall indemnify the listed entity against any loss incurred by it.] (3) Audit committee may grant omnibus approval for related party transactions proposed to be entered into by the listed entity 23[or its subsidiary] subject to the following conditions, namely- (a) the audit committee shall lay down the criteria for granting the omnibus approval in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recognized stock exchanges within one day of the resolution plan being approved;]4 (5) The provisions of sub-regulations (2), (3) and (4) shall not be applicable in the following cases: (a) transactions entered into between two 26[public sector] companies; (b) transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval. 19[(c) transactions entered into between two wholly-owned subsidiaries of the listed holding company, whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.] 27[(d) transactions which are in the nature of payment of statutory dues, statutory fees or statutory charges entered into between an entity on one hand and the Central Government or any State Government or any combination thereof on the other hand. (e) transactions entered into between a public sector company on one hand and the Central Government or any State Government or any combination thereof on the other hand.] 28[****] (6) The provisions of this regulation shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted vide Notification No. SEBI/LAD-NRO/GN/2021/47 dated 07-09-2021 11. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/55 dated 09-11-2021 w.e.f. 01-04-2022 before it was read as, "Explanation. - A transaction with a related party shall be considered material if the transaction(s) 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 listed entity as per the last audited financial statements of the listed entity." 12. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/55 dated 09-11-2021 w.e.f. 01-04-2022 13. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/55 dated 09-11-2021 w.e.f. 01-04-2022 before it was read as "audit committee." 14. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/55 dated 09-11-2021 w.e.f. 01-04-2022 15. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/55 dated 09-11-2021 w.e.f. 01-04-2022 16. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/55 dated 09-11-2021 w.e.f. 01-04- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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