CLARIFICATION ON RELATED PARTY TRANSACTIONS

Ministry of Corporate Affairs has issued clarification on transactions/ matters following under section 188 (Related Party Transactions).

It has clarified that:

1. For non-voting by the interested shareholder: The shareholders who are related party for the contract or arrangement for which resolution is proposed/ to be passed. Only those shareholders cant vote on the matter.

2. Transaction arising out of amalgamation and reconstruction under the Companies Act, 1956 shall not attract provisions of section 188 of CA, 2013.

3. Contracts entered into by the Companies in compliance under provisions of section 297 of the CA, 1956 shall not need further fresh approvals, until there are any modifications to those contracts.

http://www.mca.gov.in/Ministry/pdf/Circular_No_30_17072014.pdf

The Companies (cost records and audit) Rules, 2014

Dear Professionals,

The much awaited The Companies (cost records and audit) Rules, 2014 has been notified. For applicability of cost record Companies has broadly classified into four categories i.e.

(A) Companies engaged in the production of following goods in strategic sectors.

(B) companies engaged in an industry regulated by a Sectoral Regulator or a Ministry or Department of Central Government.


(C) Companies operating in areas involving public interest
(D) Companies (including foreign companies other than those having only liaison offices) engaged in the production, import and supply or trading

each category has specified the  sub-categories or the specified activities. Limits based on paid-up capital and/or turnover and networth is defined for maintenance of cost records.

The said rules has also specified the companies which need to get their cost records audited by the Cost Auditors.

Please go through the following link to check the  The Companies (cost records and audit) Rules, 2014 and to have check the rules:

http://www.mca.gov.in/Ministry/pdf/rules_2_30062014.pdf