MINISTRY OF CORPORATE AFFAIRS
                                                NOTIFICATION

                                        New Delhi, the 14th August, 2014

        G.S.R. 590(E).--In exercise of the powers conferred under sections 173, 175, 177, 178, 179, 184, 185,
186, 187, 188, 189 and section 191 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central
Government hereby makes the following rules to amend the Companies (Meetings of Board and its Powers)
Rules, 2014, namely:--

1. (1) These rules may be called the Companies (Meetings of Board and its Powers) Second Amendment
Rules, 2014.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Meetings of Board and its Powers) Rules, 2014, -

(1) in rule 3, in sub-rule (6), the words 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 a transaction or transactions, where the
transaction or transactions to be entered into,--






(a)     as contracts or arrangements with respect to clauses (a) to (e) of sub-section (1) of section 188, with
criteria as mentioned below -

(i)     sale, purchase or supply of any goods or materials, directly or through appointment of agent,
exceeding ten per cent. of the turnover of the company or rupees one hundred 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 ten per cent. of net worth of the company or rupees one hundred 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 ten per cent. of the net worth of the company or ten per
cent. of turnover of the company or rupees one hundred crore, whichever is lower, as mentioned in clause (c)
of sub-section (1) of section 188;
4                                THE GAZETTE OF INDIA : EXTRAORDINARY                                [PART II--SEC. 3(i)]

(iv)    availing or rendering of any services, directly or through appointment of agent, exceeding ten per cent.
of the turnover of the company or rupees fifty 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 one per cent. 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 the following particulars, namely:--






(a) name of the 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."


                                                                                          [F. No. 1/32/2013-CL-V-Part]

                                                                             AMARDEEP SINGH BHATIA, Jt. Secy.

Note : The principal notification was published in the Gazette of India vide No. G.S.R. 240(E), dated
       31.03.2014 and was amended vide notification number G.S.R. 398(E), dated 12.06.2014.




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