Dear
,
Ministry
of Corporate Affairs, on 14th August 2014 has made amendments in
rules made under Chapter VII, of the Companies Act 2013, i.e. ‘Companies (Meeting of Board and
its Powers) Rules 2014 ‘
This
is second amendment made by Ministry, and will come into effect from the date
of its publication in official gazette.
Rule No. 3 , 4 and 15 were amended by this amendments the
details are as below;
(1) in rule 3, in sub rule(6), the word and commas,
“which shall be in India” shall be omitted.
(2) in rule 4:-
(a) in sub rule (1), for the brackets, figure and
word “(1) The”, the word “The” shall be substituted;
(b) in clause (iv), for the words “consideration of
accounts”, the words “consideration of financial statement including
consolidated financial statement, if any, to be approved by the Board under
sub-section (1) of section 134 of the Act” shall be substituted.
(3) in rule 15,
for sub-rule (3), the following sub rule shall be substituted, namely:-
“(3) For the purposes of first proviso to sub
section (1) of section 188, except with the prior approval of the company by a
special resolution, a company shall not enter into transaction or transactions,
where the transaction or transactions to be entered into,-
a)
As contracts or arrangements with respect to clause (a)
to (e) of sub section (1) of section 188, with criteria mentioned below-
i.
Sale,
purchase or supply of any goods or materials, directly or through appointment
of agent, exceeding 10% of the turnover of the company or rupees 100 crore,
(whichever is lower) as mentioned in clause (a) and clause (e) respectively of
sub section (1) of section 188;
ii.
Selling
or otherwise disposing of or buying property of any kind, directly or through
appointment of agent, exceeding 10% of the net worth of the company or rupees
100 crore, (whichever is lower) as mentioned in clause (b) and clause (e) respectively
of sub section (1) of section 188;
iii.
Leasing
of property of any kind exceeding 10% of the net worth of the company or rupees
100 crore, (whichever is lower) as mentioned in clause (c) sub section (1) of
section 188;
iv.
Availing
or rendering of any services, directly or through appointment of agent,
exceeding 10% of the turnover of the company or rupees 50 crore, (whichever is
lower) as mentioned in clause (d) and clause (e) respectively of sub section
(1) of section 188;
Explanation-
it is hereby clarified that the limits specified in sub clauses (i) to (iv)
shall apply for transaction or transactions to be entered into either
individually or taken together with the previous transactions during a
financial year.
b)
Is for appointment to any office or place of profit in
the company, its subsidiary company or associate company at a monthly
remuneration exceeding two and half lakh rupees as mentioned in clause (f) of
sub section (1) of section 188; or
c)
Is for remuneration for underwriting the subscription
of any securities or derivatives thereof, of the company exceeding 1% of the
net worth as mentioned in clause (g) of sub section (1) of section 188.
Explanation-
(1)
The turnover or net worth referred in the
above sub rules shall be computed on the basis of the Audited Financial
statement of the preceding Financial year.
(2)
In case of a wholly owned subsidiary, the
special resolution passed by the holding company shall be sufficient for the
purpose of entering into the transactions between the wholly owned subsidiary
and the holding company.
(3)
The explanatory statement to be annexed to
the notice of a general meeting convened pursuant to section 101 shall contain
following particulars, namely:-
a) Name of related
party;
b) Name of the
director or key managerial personnel who is related, if any;
c) Nature of
relationship;
d) Nature, material
terms, monetary value and particulars of the contract or arrangement;
e) Any other
information relevant or important for the members to take a decision on the
proposed resolution”
The amended rules can be
downloaded from the following links:
Thanks & Regards:
KASHIF ALI & ASSOCIATES
Company Secretaries
268, Business India Complex,
Uday Park, New Delhi-110049
Call us : 
+91 9718483209
+91 9718483209
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