MINIMUM INFORMATION TO BE PROVIDED TO THE AUDIT COMMITTEE AND SHAREHOLDER FOR APPROVAL OF RELATED PARTY TRANSACTIONS BY LISTED COMPANIES

 MINIMUM INFORMATION TO BE PROVIDED TO THE AUDIT COMMITTEE AND SHAREHOLDER FOR APPROVAL OF RELATED PARTY TRANSACTIONS BY LISTED COMPANIES 

APPLICABLE PROVISIONS  

Regulation 23 of SEBI (LODR) Regulations, 2015, read with Section 177 and 188 of the Companies Act, 2013: 

SEBI Master Circular dated November 11, 20241 and SEBI Circular dated June 26, 2025, 

 

                    EFFECTIVE FROM OCT,13 2025 
 
Minimum information are now required to be provided to the 𝘈𝘶𝘥𝘪𝘵 𝘊𝘰𝘮𝘮𝘪𝘵𝘵𝘦𝘦 𝘢𝘯𝘥 𝘚𝘩𝘢𝘳𝘦𝘩𝘰𝘭𝘥𝘦𝘳𝘴 𝘧𝘰𝘳 𝘢𝘱𝘱𝘳𝘰𝘷𝘢𝘭 𝘰𝘧 𝘙𝘦𝘭𝘢𝘵𝘦𝘥 𝘗𝘢𝘳𝘵𝘺 𝘛𝘳𝘢𝘯𝘴𝘢𝘤𝘵𝘪𝘰𝘯𝘴 (𝘙𝘗𝘛) 

THE VALUATION/ EXTERNAL REPORT 

Companies are required to explain why the transaction is 

1. In the interest of the listed entity, also now have to provide the valuation/ external report if relied upon,  

2.Shall also indicate the percentage of the counterparty's annual turnover represented by the transactions on voluntary basis. 

LOANS, INTER-CORPORATE DEPOSITS, ADVANCES, OR INVESTMENTS, 

For transactions involving loans, inter-corporate deposits, advances, or investments,  

1.Details of the source of funds, any financial indebtedness incurred — including nature, cost, and tenure —  

2.And applicable terms such as covenants, interest rate, repayment schedule, and security must be disclosed, along with the purpose for which funds will be used.   

 JUSTIFICATION FOR THE TRANSACTION, 

Additionally, justification for the transaction, any valuation or external reports relied upon, the counterparty’s turnover percentage on a voluntary basis, and other relevant information must be provided to facilitate proper Audit Committee approval. 

EXEMPTIONS  

Exemptions apply to banks, NBFCs, insurance, and housing finance companies. 

INFORMATION TO BE PLACED BEFORE THE AUDIT COMMITTEE 

1. Name of the related party and nature of relationship with the listed entity or its subsidiaries. 

2. Type, material terms and particulars of the proposed transaction. 

3. Monetary value of the transaction. 

4. Tenure of the transaction (whether it is a one-time or continuing transaction). 

5. Value threshold in context of percentage of the listed entity’s annual consolidated turnover (to assess materiality). 

6. Justification / business rationale for entering into the transaction. 

7. Manner of determining the pricing and other commercial terms, including whether on arm’s length basis. 

8. Any other relevant information or factors considered in approving the transaction. 

9. Details of any prior approvals or omnibus approvals, if applicable. 

10. Copy of draft agreement or memorandum (if available). 

Note: The Audit Committee must also periodically review existing RPTs to ensure they remain consistent with policy and law. 

INFORMATION TO BE PLACED BEFORE SHAREHOLDERS (FOR APPROVAL) 

When seeking shareholder approval (for material RPTs or otherwise as per Section 188), the following minimum disclosures should be made in the explanatory statement / notice of the general meeting: 

1. Name of the related party. 

2. Name of the director or key managerial personnel who is related, if any. 

3. Nature of relationship. 

4. Nature, material terms, monetary value and particulars of the contract or arrangement. 

 

5. Any other information relevant or important for members to make an informed decision. 

6. Justification for entering into the transaction. 

7. Percentage of the listed entity’s annual consolidated turnover represented by the transaction. 

8. Name of any other entity (subsidiary/associate) involved in the transaction, if applicable. 

9. Audit Committee / Board recommendation on the proposed transaction. 

Note: Only disinterested shareholders can vote on such resolutions. 

CAUTION 

Regulatory frameworks, like those established by the Securities and Exchange Board of India (SEBI), are continuously updated. Any listed entity must refer to the latest circulars (such as the recent SEBI circulars on RPT Industry Standards) and the applicable Listing Obligations and Disclosure Requirements (LODR) for precise and up-to-date compliance. 

R V SECKAR FCS, LLB 79047 19295