valid as on 24/09/2020

12.1.6-Companies (Meetings of Board and its Powers) Rules,2014

6. Committees of the Board.-

The Board of directors of every listed company  and a company covered under rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 shall constitute an ‘Audit Committee’ and a ‘Nomination and Remuneration Committee of the Board.

 The Board of directors of every listed companies and the following classes of companies shall constitute an Audit Committee and a Nomination and Remuneration Committee of the Board

(i) all public companies with a paid up capital of ten crore rupees or more;

(ii) all public companies having turnover of one hundred crore rupees or more;

(iii) all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding fifty crore rupees or more.

Explanation.– The paid up share capital or turnover or outstanding loans, or borrowings or debentures or deposits, as the case may be, as existing on the date of last audited Financial Statements shall be taken into account for the purposes of this rule.

  that public companies covered under this rule which were not required to constitute Audit Committee under section 292A of the Companies Act, 1956 (1 of 1956) shall constitute their Audit Committee within one year from the commencement of these rules or appointment of independent directors by them, whichever is earlier:

that public companies covered under this rule shall constitute their Nomination and Remuneration Committee within one year from the commencement of these rules or appointment of independent directors by them, whichever is earlier.

 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 for transactions of repetitive nature and that 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.”

Substituted vide Companies (Meetings of Board and its Powers) Second Amendment Rules, 2017 . To view the notification,Click Here
Substituted vide Companies (Meetings of Board and its Powers) Amendment Rules, 2018 dated 07.05.2018 . To view the notification,Click Here
Substituted vide Companies (Meetings of Board and its Powers) Second Amendment Rules, 2017 . To view the notification,Click Here
Proviso inserted by notification no. G.S.R. 398(E) dated 12 June 2014. To view the notification,Click Here
Proviso inserted by notification no. G.S.R. 398(E) dated 12 June 2014. To view the notification,Click Here
Inserted vide Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015 vide notification dated 14th December,2015. To view the notification,Click Here

Companies (Meetings and Powers of Board) Amendment Rules, 2014 [GSR 398 E] dated 12/06/2014


Companies (Meetings of Board and its Powers) Amendment Rules, 2018 [GSR 429(E)] dated 07/05/2018


Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015 [G.S.R. 971 (E)] dated 14/12/2015


Companies (Meetings of Board and its Powers) Second Amendment Rules, 2017 dated 13/07/2017


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