MCS Ltd. is a listed company with Bombay Stock Exchange Ltd. The Company enters into related party transactions frequently with MAP Ltd. in which one of director of MCS Ltd. holds 3% paid up capital of MAP Ltd. MCS Ltd.

According to Regulation 23 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all related party transactions shall require prior approval of the Audit Committee. The Audit Committee may grant omnibus approval for related party transactions proposed to be entered into by the listed entity subject to the following conditions: The audit committee shall lay down the criteria for granting the omnibus approval in line with the policy on related party transactions of the listed entity and such approval shall be applicable in respect of transactions which are repetitive in nature; The audit committee shall satisfy itself regarding the need for such omnibus approval and that such approval is in the interest of the listed entity; The omnibus approval shall specify: the name(s) of the related party, nature of transaction, period of transaction, maximum amount of transactions that shall be entered into; the indicated base price/current contracted price and the formula for variation in the price if any; and such other conditions as the audit committee may deem fit. However, where the need for related party transaction cannot be foreseen and aforesaid details are not available, audit committee may grant omnibus approval for such transactions subject to their value not exceeding rupees one crore per transaction. The audit committee shall review, at least on a quarterly basis, the details of related party transactions entered into by the listed entity pursuant to each of the omnibus approval is given. Such omnibus approval shall be valid for a period not exceeding one year and shall require fresh approvals after the expiry of one year. However, provisions related to the prior approval of audit committee shall not apply, in case the transactions are entered 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. Therefore, in the case of MAP Ltd. which is a wholly owned subsidiary of MCS Ltd., the approval of audit committee is not required.