This Gazette may contains Multiple Subjects

REGD. NO D L -33004/99 The Gazette of India

EXTRAORDINARY

PART II-Section 3—Sub-section (i)

PUBLISHED BY AUTHORITY

No. 4961 NEW DELHI. FRIDAY. SEPTEMBER 28. 2001/ASVINA 6.1923

3034 GI/2001

(1)2 THE GAZETTEOFINDIA: EXTRAORDINARY [PART H—SEC. 3G)1 3

MINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS

(Department of Company Affairs)

NOTmCATION

New Delhi, the 28th September, 2001

G.S.R. 708(E).— In exercise of the powers conferred by Sub-section (1) of Section 642, read with clause (d) of Sub-section (1) of Section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Cement) Rules, 1997, namely:—

1. (1) These rules may be called the Cost Accounting Records (Cement) Amendment Rules, 2001 (2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Cost Accounting Records (Cement) Rules, 1977:—

in Schedule-I, after item number 20 and the entries relating thereto, the following shall be inserted namely:—

"21. Inter-company Transfer:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-a-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:—

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc.;

(b) utilisation of plant facilities and technical know-how;

4 THE GAZETTE OF INDIA: EXTRAORDINARY [PART H—SEC. 3(i)l

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of product under reference.

These records shall also indicate the basis followed for arriving at the rates charged or paid for such products or services so as to enable determination of the reasonableness of such rates in so far as they are in any way related to product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1):—

(a) enterprises that directly or indirectly through one or more intermediate, control, or are controlled by, or are under common control with, the reporting enterprises (this includes holding companies, subsidiaries and fellow subsidiaiies);

(b) assoc 1. ;s i-jid joint ventures of the reporting enterprises and the investing party or venturer in respect of wlucli HL-J. importing enterprise is an associate or a joint venture;

(c) individual,; owing, directly or indirectly, an interest in the voting power ofthc reporting enterprise that gives then) coniiol or significant influence over the enterprise, and relatives of any such individual;

(d) key management personnel and relatives of such personnel; and

(e) enterprises over which any person described in (c) or (d) is able to exercise, significant influence. This includes enterprises owned by directors of major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise.

However, the following shall not be deemed as related partly relationships" ;—

(b) a single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business merely by virtue of the resulting economic dependence; and (c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only of those dealings (although they may circumscribe the freedom of action of the enterprise or participate in its decision-making process);

(i) providers of finance;

(ii) trade unions;

(iii) public utilities;

(iv) Government Departments and Government agencies including Government sponsored bodies.

Explanation :—For the purpose of these Rules,—

(a) "Related party relationships means parties who are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions;

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

® ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (u) control of the composition ofthc Board of Directors in the case of a company or of the exposition of the corresponding governig body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/ or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits frorn it;

(h) "Key management personnel" means those persons who have the authority and responsibility for plan- ning, directing and controlling the activities of the reporting enterprise;

0) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(k) "Subsidary" means a subsidiary company within the meaning of Section 4 ofthe Companies Act, 1956(1 of 1956);

0) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidaries ofthe same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control ofthe Central Government or a State Government."

[F.NO.52/01/CAB-2001]

A. RAMASWAMY, Jt. Secy.

Foot Note:—The principal Rules were published vide G.S.R. number 536(E), dated the 11th September, 1997 and subse- quently amended vide:—

1. GSR466(E), dated 3rd August, 1998.

6 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i)] 7

NOTIFICATION

New Delhi, the 28th September, 2001

G.S.R. 709(E).— In exercise of the powers conferred by Sub-section (1) of Section 642, read with clause (d) of Sub-section(l) of Section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Cycle) Rules, 1997, namely:—

1.(1) These rules may be called the Cost Accounting Records (Cycles) Amendment Rules, 2001.

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

8 THE GAZETTE OF INDIA EXTRAORDINARY [PART I I- SEC 3(I)1

2 In the Cost Accounting Records cycles Rules, 1977 —

m Schedule-Ill, after item number 18 and the entries relating thereto, the following shall be inserted namely —

W19. Inter-company Transfer:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of —

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc,

(b) utilisation of plant facilities and technical know-how,

(d) administrative, technical, managerial or any other consultancy services,

(f) any other payment related to production, processing or manufacturing of product under reference These records shall also indicate the basis followed for arriving at the rates charged or paid for such products or services so as to enable determination of the reasonableness of such rates in so far as they are in any way related to product under reference

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1) —

(a) enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries),

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture,

(c) individuals owing, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual, (d) key management personnel and relatives of such personnel, and

(c) enterprises over which any person described in (c) or (d) is able to exercise, significant influence This includes enterprises owned by directors of major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise

However, the following shall not be deemed as "related partly relationships" —

(a) two companies simply because they have a Director in common, notwithstanding paragraph (d) or (e) above (unless the Director is able to affect the policies of both companies in their mutual dealings), (b) a single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business merely by virtue of the resulting economic dependence, and (c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only of those dealings (although they may circumscribe the freedom of action of the enterprise or participate in Us decision—making process)

(I). providers of finance,

(ii) trade unions,

Cm) public utilities,

(rv) Government Departments and Government agencies including Government sponsored bodies Explanation —For the purpose of these Rules,—

(a) "Related party relationships" means parties who are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions,9 (b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

® ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (if) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

Crii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/ or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for plan- ning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956(1 of 1956);

(0 "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government".

[F, No. 52/01/CAB-2001J

A. RAMASWAMY, Jt, Secy.

Foot Note:—The principal rules were published vide G. S.R, number 311, dated the 2nd March, 1967 and subsequently amended vide:—

1. GSR 1244, dated 7th August 1%7.

2 GSR 84, dated 4th January, 1968.

3. GSR 774, dated 3rd June, 1977.

4. GSR 1270, dated 10th October, 1979.

5. GSR 15, dated 5th January, 1983.

6. GSR 538, dated 22nd July, 1989.

7. GSR298(E)> dated 24thMarch, 1993.

8. GSR 326(E), dated 3rd June, 1998.

9. GSR425(E), dated 3rd August, 1998

3034 GI/2001—210 THE GAZETTE OF INDIA: EXTRAORDINARY [PARTII—SEC 3(I)1 11 12 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—SEC. 3(I)1

NOTIFICATION

New Delhi, the 28th September, 2001

G.S.R. 710 (E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amrnd the Cost Accounting Records (Tyres and Tubes) Rules, 1967, namely —

1 (1) These rules may be called the Cost Accounting Records (TyTes and Tubes) Amendment Rules, 2001 (2) They shal 1 come into force on the date of their publication in the Official Gazette

2 In the'Cost-Aeeeunting Records (Tyres and Tubes) Rules, 1967 —

In schedule III, after item number 21 and the entries relating thereto, the following shall be inserted namely —

"22 INTER-COMPANY TRANSFER

(1) In respect of related party transactions or suphes made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-a-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of

(a) purchase and sale of raw materials, fimshed products, process materials, chemicals and rejected goods including scraps, etc,

(b) utilisation of plant facilities and technical know-how,

(d) administrative, technical, managerial or any other consultancy services,

(e) purchase and sale of capital goods including plant and machinery,

(2) The transactions by the following "related party relationsship" shall be covered under sub-rule (1) —

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(c) individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;

(d) key management personnel and relatives of such personnel; and

(c) enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise.

However, the following shall not be deemed as "related party relationships":—

(c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only of those dealings (although they may circumscribe the freedom of action of the enterprise or participate in its deci- sion-making process);

i providers of finance;

ii. trade unions;

in. public utilities;

iv. government departments and government agencies including government sponsored bodies, Explanation :—For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/ or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party,

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(D "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

14 THE GAZETTE OF INDIA: EXTRAORDINARY PART II—SEC. 3(i)]

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(I) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both arc subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F.No. 52/01/CAB-2001] A. RAMASWAMY, Jt. Secy.

Foot note.—The principal rules were published vide G.S.R. number 1260, dated the 10th August, 1967 and subsequently amended vide—

1. GSR 1192, dated 21st March, 1968.

1 GSR2012, dated6thNovember, 1968.

3. GSR775, dated 3rd June, 1977.

4. GSR 1271, dated 10th October, 1979.

5. GSR 16, dated 5th January, 1983.

6. GSR 539, dated 22nd July, 1989.

7. GSR299(E), dated24th March, 1993.

a GSR 426 (E), dated 3rd August, 1998.

9. GSR 555(E), dated 28th Jury, 1999,15 16 THE GAZETTE OF INDIA: EXTRAORDINARY PART II—SEC. 3fi")l

NOTIFICATION

New Delhi, the 28th September, 2001

G.S.R. 711 (E).—In exercise of the powers conferred by sub-section (1) of Section 642, read with clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956(1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Caustic Soda) Rules, 1967, namely:—

1. (1) These rules may be called the Cost Accounting Records (Caustic Soda) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Caustic Soda) Rules, 1967 :—

In schedule III, after item number 21 and the entries relating thereto, the following shall be inserted namely:—

"22. INTER-COMPANY TRANSFER:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the following "related party relationship" shall be covered under sub-rule (1):—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(c) individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise thit gives them control or significant influence over the enterprise, and relatives of any such individual;

(d) key management personnel and relatives of such personnel; and

(e) enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise.

However, the following shall not be deemed as "related party relationships":—

(a) two companies simply because they have a Director in common, notwithstanding paragraph (d) or (e^above (unless the Director is able to affect the policies of both companies in their mutual dealings);

(i) providers of finance;

(ii) trade unions;

(iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

Explanation :—For the purpose of these Rules,—

(a) "Related party relationship" means parties who are considered to be related if at any time during the report- ing period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions;

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the Composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/ or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing rcporti ng party has significant influence and which is neither a subsidiary nor a joint venture of that party;

3034 Ql/2001—318 THE GAZETTEOFINDIA: EXTRAORDINARY [PART JJ—SEC. 3(i)l (f) "Joint venture means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint Control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

0) "Relative" in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(mj) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F.No.52/01/CAB-2001] A. RAMASWAMY, Jt. Secy.

Foot Note.—The principal rules were published vide G.S.R. number 1261, dated the 1 lth August, 1967 and subsequently amended vide—

1. GSR 85 , dated 4th January, 1968.

1 GSR 773, dated 3rd June, 1977,

3. GSR 17, dated 5th January, 1983.

4. GSR 540, dated 22nd July, 1989.

5. GSR300(E), dated24thMarch,1993.

6. GSR 327, dated 3rd June, 1998.

7. GSR 427 (E), dated 3rd August, 1998.

19 20 THE GAZETTE OF INDIA: EXTRAORDINARY IPARTII—SEC.3(T>1

NOTIFICATION

New Delhi, the 28th September, 2001

G.S.R. 712 (E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Room Air-Conditioners) Rules, 1967, namely :—

1. (1) These rules may be called the Cost Accounting Records (Room Air-Conditioners) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Room Air-Conditioners) Rules, 1967 :—

In schedule III, after item number 21 and the entries relating thereto, the following shall be inserted namely:—

"22. INTER-COMPANY TRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(1) any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the following "related party relationship" shall be covered under sub-rule (1):—

(b) associates and joint ventures of the reporting enterprise and the investing" party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(c) indiaviduals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;

(d) key management personnel and relatives of such personnel; and

However, the following shall not be deemed as "related party relationships":—

(i) providers of finance;

(ii) trade umons;

(iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

22 THE GAZETTE OF INDIA: EXTRAORDINARY [PART H—SEC. 3(i)l

Explanation;—For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the Composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an mvesting reporting party has significant influence and which is neither a subsidiary nor ajoint venture of that party-;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint Control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

0) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

0 "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F No 52/01/CAB-2001] A. RAMASWAMY, Jt. Secy.

Foot Note.—The principal rules were published vide G. S.R. number 1447, dated the 16th September, 1967 and subsequently amended vide—

1. GSR 1506, dated 5th August, 1968.

2. GSR 784, dated 3rd June, 1977.

3. GSR 18, dated5th January, 1983.

4. GSR541, dated22nd July, 1989

5. GSR301 (E), dated24thMarch, 1993.

6. GSR 428 (E), dated 3rd August, 1998.

7. GSR 668(E), dated 28th September, 1999.

?3 24 THE GAZETTEOFINDIA: EXTRAORDINARY [PART II—SEC.3(i)l 25

NOTIFICATION

New Delhi, the 28th September, 2001

G.S.R. 713 (K).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Refrigerators) Rules, 1967, namely:—

1. (1) These rules may be called the Cost Accounting Records (Refrigerators) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Refrigerators) Rules, 1967;— ,

in Schedule III, after item number 21 and the entries relating thereto, the following shall be inserted namely:—

"22. INTER-COMPANY TRANSFER;

(1) In respect of related party transactions or supplies made or services rendered by a company to its folding company or subsidiary or a company termed "related party relationship" as defined below and vice-a-versa, reconis shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc.;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of product under reference.

These records shall also indicate the basis followed for arriving at the rates charged or paid for such products or services so as to enable determination of the reasonableness of such rates insofar as they are in any way related to product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1):—

(a) enterprises that directly, or indirectly through one or more intermediaries, control, or arc controlled by, or are under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries);

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

(e) enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by Directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise.

However, the following shall not be deemed as "related party relationships" :—

(b) a single customer, supplier, franchiser, distnbutoi, ot general agent with whom an enterprise transacts a significant volume of business merely by virtue of the resulting economic dependence; and (c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only of those dealings (although they may circumscribe the freedom or action of the enterprise or participate in its decision-making process:

@ Providers of finance;

(u) trade unions;

3034 GI/2001—426 THE GAZETTE OF INDIA: EXTRAORDINARY [PARTII—SEC.3(I)1 (w) public utilities;

(iv) Government Departments and Government Agencies including Government sponsored bodies.

Explanation •—For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more thm onehalf of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(c) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain in benefits from it;

(h) "Key management personnel" means those persons who have the authority and respoasibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship,

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(I) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprises" means an enterprise which is under the control of the Central Government or a Stale Government."

[F.No. 52/01/CAB-2001]

A. RAMASWAMY, Jt. Secy.

Footnote:—The principal rules were published vide G.S.R. number 1448, dated the 18th September, 1967 and subsequently amended vide :—

1. GSR 1505, dated 5th August, 1968.

2. GSR 781, dated 3rd June, 1977

3. GSR 19, dated 5th January, 1983.

4. GSR 542, dated 22nd July, 1989.

5. GSR 302(E), dated 24lh March, 1993.

6. GSR429(E), dated 3rd August, 1998.

7. GSR 669(E), dated 28th September, 1999.

27 28 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i)l 29

NOTIFICATION

New Delhi, the 28th September, 2001

G.S.R. 714(E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Batteries other than Dry Cell Batteries) Rules, 1967, namely :—

1. (1) These rules may be called the Cost Accounting Records (Batteries other than Dry Cell Batteries) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Batteries other than Dry Cell Batteries) Rules, 1967 in schedule III, after item number 21 and the entries relating thereto, the following shall be inserted, namely.—

"22. INTER-COMPANY TRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc.;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of product under reference.

These records shall also indicate the basis followed for arriving at the rates charged or paid for such products or services so as to enable determination of the reasonableness of such rates insofar as they are in any way related to product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1) :—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

However, the following shall not be deemed as "related party relationships" :—

(i) Providers of finance;

30 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i) I

(ii) trade unions;

(hi) public utilities;

(iv) Government departments and Government agencies including Government sponsored bodies Explanation :—For thepurposc of these Rules,—

(a) "Related party relationships" means parties who arc considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions;

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

® ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or 0i) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain in benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative" in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

00 "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprises" means an enterprise which is under the control of the Central Government or a State Government."

[F.NO.52/01/CAB-2001]

A. RAMASWAMY, Jt. Secy.

Footnote:—The principal rules were published vide number G.S.R. 1467, dated the 20th September, 1967 and subsequently amended vide:—

1. G.S.R. 1507, dated 5th August, 1968.

2. G.S.R. 778, dated 3rd June, 1977.

3. G.S.R. 20, dated 5th January, 1983.

4. G.S.R. 543, dated22ndJuly, 1989.

5. G.S.R. 303(E), dated24thMarch, 1993.

6. G S R. 430(E), dated 3rd August, 1998.

7. G.S.R. 667{E), dated28th September, 1999.

31 32 THE GAZETTE OF INDIA: EXTRAORDINARY [PART H—SEC. 3(i)l 33

NOTIFICATION

New Delhi, the 28th September, 2001

G.S.R. 71S(E).—In exercise ofthc powers conferred by sub-section (1) of section 642, read with clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Electric Lamps) Rules, 1967, namely:—

1. (1) These rules may be called the Cost Accounting Records (Electric Lamps) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Electric Lamps) Rules, 1967 :—

in schedule III, after item number 21 and the entries relating thereto, the following shall be inserted namely:—

"22, INTER-COMPANY TRANSFER:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, techical, managerial or any other consultancy services;

(1) any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1):—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(c) individuals owning, directly or indirectly, an interest in {he voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;

(d) key management personnel and relatives of such personnel; and

However, the following shall not be deemed as "related party relationships" :—

(i) Providers of finance;

(ii) trade unions;

3034 GI/2001—534 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC.3(I)] (iii) public utilities;

(iv) Government departments and Government agencies including Government sponsored bodies.

Explanation!!:—For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obligations between related parries, whether or not a price is charged;

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(c) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(0 "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint Control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act 1956 (1 of 1956);

(I) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government"

[F.No.52/01/CAB-2001]

A. RAMASWAMY, Jt. Secy.

Footnote:— The principal rules were published vide G.S.R number 1503, dated the 27th September, 1967 and subsequently amended vide:—

1. GSR. 779, dated 3rd June, 1977.

2 G.S.R. 1272, dated 10thOctober, 1979.

3. G.S.R. 21. dated 5thJanuary, 1983.

4. G.S.R 544, dated 22ndJury, 1989.

5. G.S.R. 304(E), dated24thMarch, 1993.

6. G.S.R 431(E), dated 3rd August, 1998.

7. G.S.R 670(E), dated 28th September, 1999.

35 36 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i)] 37

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 716(E).—In exercise of the powers conferred by sub-section (1) of section, 642 read with clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Electric Fans) Rules. 1969, namely :—~ 1. (1) These rules may be called the Cost Accounting Records (Electric Fans) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Electric Fans) Rules, 1969 •—

in schedule III, after item number 21 and the entries relating thereto, the following shall be inserted namely:—

"22. Inter-Company Transfer:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationslup" as defined below and vice-a-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of :

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc,

(b) utilisation of plant facilities and tectinical know-how.

(d) administrative, technical, managerial or any other consultancy services;

(0 any other payment related to production, processing or manufacturing of products under reference These records shall also indicate, the basis followed for arriving at the rates charged or paid for such products or services so as to enable determination of the reasonableness of such rates in so far as they are in any way related to products under reference.

(2) the transactions by the following "related party relationships" shall be covered under sub- rule (1):—

(a) enterprises that directly, or kidirectly through one ounore intermediaries, control, or arc controlled, or are under common control with, the lepoiting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries);

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture,

(c) i ndividuals owning, directly or indirectly, an interest in the voting power of the reporting cnlcrpi iscs that gives them control or significant influence over the enterprise, and relatives ofnnv hiich individual, (d) key management personnel and relatives of such pcrsnnd, and

(e) enterprises over which any person described in fc) or (d) is nbli' to exercise significant influence Tins includes enterprises owned by directors or major shareholders of the importing enterprise and enterprises tl^t have a member of kev management in common with the reporting enterprise.

However, the following shall not be deemed as "related party jel.itionships" - —

(a> two companies simp!) because they have a Din-cto) in common, notwithstanding paiagiaph (d) or (c) above (unless the Directoi is able to affect the policies of both companies in then mutual dealings) (b) a single customer, supplier, franchiser, distributor, oi ncncr.il agent with vhoui im enteipnse uanstUs a significant volume of business merely by virtue ot the resulting economic dependence . and (c) the parlies listed below, in the course of then normal dealings with an enterprises b\ virtue only ol those dealings (although they may circumscribe the freedom of action of the enterprise or participate m its decision making process),

(i) provide J of finance,

(ii) trade unions;

38 THE GAZETTE OF INDIA: EXTRAORDINARY (PART H-^SEC. 3(01

(iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.—

Explanation : For the purpose of these Rules,—

(b) "Related party transacton" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(1) ownership, directly or indirectly, of more than one half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or (iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) " Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party,

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activity of the reporting enterprise;

(i) "Relative" in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of section 4 of the companies Act, 1956(1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(I) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both arc subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government,"

[F. NO. 52/01/CAB-2001J

A. RAMASWAMY, Jt. Secy.

Foot Note—The principal rules were published vide G.S.R. number 2298, dated the 15th September, 1969 and subsequently amended vide—

1. G.S.R- 785. dated 3rd June, 1977.

2. G S.R. 1271, dated 10th October, 1979.

3. G. S R. 22, dated 5th January, 1983.

4. G.S.R 545, dated 22nd July, 1989.

5. G.S.R 305(E), dated 24th March, 1993.

6. G.S.R, 432(E), dated 3rd August, 1998.

7. G S.R. 556(E), dated 28th July, 1999.

39 40 THE GAZETTE OF INDIA; EXTRAORDINARY [PAETE—SEC.3(i)J 41

NOTTEICAnON

New Delhi, the 28th Sepember, 2001

G. S. R 717(E).—In exercise of the powers conferred by Sub-section (1) of section 642, read with clause (d) of Sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Electric Motors) rules, 1969, namely :—

1. (1) These rules may be called the Cost Accounting Records (Electric Motors) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Electric Motors) Rules, 1969 :—

in schedule III, after item number 21 and the entries relating thereto, the following shall be inserted namely:—

"22. Inter-Company Transfer:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of products under reference.

(2) the transactions by the following "related party relationships" shall be covered under sub-rule (1) :—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is ahHssoeiate or a joint venture;

(d) key management personnel and relatives of such personnel; and

However, the following shall not be deemed as "related party relationships" :—

(0 providers of finance;

(ii) trade unions;

3034 GI/2001—642 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i)] (iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.—

Explanation : For the purpose of these Rules,-—

(b) "Related party transacton" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than one half of the voting power of an enterprise', or (ii) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) " Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture*' means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activities so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activity of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

0) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956(1 of 1956);

(k) "Sub§idiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(0 "Fellow subsidiary" means a c o m p a n y i *^ t0 be a f eil ow subsidiary of another company if both are subsidiaries of the sam# ^Cluing company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F. No. 52/O1/CAB-2OO1]

A. RAMASWAMY, Jt. Secy Foot Note:—The principal rules weni published vide G.S.R. number 2574, dated the 24th October, 1969 and subsequently amended vide—

1. G S R. 786,dated3KIJune, 1977.

2. G.S.R, 1274, dated 10th October, 1979.

3. G.S.R. 23, dated 5th January, 1983.

4. G. S.R 546, dated 22nd July, 1989.

5. G.S.R. 306(E), dated 24th March, 1993.

6 G.S.R. 433(E), dated 3rd August, 1998.

7. G.S.R. 731(E), dated 29th October, 1999.

43 44 THE GAZETTE OF INDIA: EXTRAORDINARY PAR r II—SEC 30)1 45

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R 718(E).—In exercise of the powers conferred by sub-section (]) of section 642, read with clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Motor Vehicles) rules, 1969, namely :—

1. (1) The rules may be called the Cost Accounting Records (Motor Vehicles) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Motor Vehicles) Rules, 1997 :—

in schedule 1, after item number 21 and the entries relating thereto, the following shall be inserted namely:-—

"24. Inter-Company Transfer:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed "iclated party relationship" as defined below and vice-a-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of :

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisations of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services,

(f) any other payment related to production, processing or manufacturing of products under reference.

(2) the transactions by the following "related party relationships" shall be covered under sub-rule (1) •—

(a) enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or arc under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries),

(b) associates and joint ventures of the reporting enterprises and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(c) individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprises that gives them control or significant influence over the enterprise, and relatives of any such individuals,

(d) key management personnel and relatives of such personnel; and

(e) enterprises over which any person described in (c) or (d) is able to exercise significant influence This includes enterprises owned by directors or major shareholders of the lcporting enterprise and enterprises that have a member of key management in common with the reporting enicrpnsc However, the following shall not be deemed as 'related party relationships" •—

(a) two companies simply because they have a Director in common, notwithstanding paragraph (d) or (c) above (unless the Director is able to affect the policies of both comoanics in their mutual dealings), (b) a single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business merely by virtue of .the resulting economic dependence; and46 THE GAZETTEOFINDIA EXTRAORDINARY [PART II—SEC 3fi)l (c) the parlies listed below, jn the course of their normal dealings with an enterprises by virtue only of those dealings (although they may circumscribe the freedom of action of the enterprise or participate in its decision-making process)

(1) providers of finance,

(ii) trade unions,

(m) public utilities,

(rv) government departments and government agencies including government sponsored bodies Explanation For the purpose of these Rules,—

(b) "Related party transacton" means a transfer of resources or obligations between related parties, whether or not a price is charged,

(I) ownership, directly or indirectly, of more than one half of the voting power of an enterprises, or (II) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise, or

(in) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies,

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party,

(1) "Joint venture" means a contractural arrangement whereby two or more parties undertake an economic activity, which is subject to joint control,

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it,

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activity of the reporting enterprise,

(1) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship,

(j) "Holding company" means a holding company within the meamng of section 4 of the Companies Act, 1956(1 of 1956),

(k) "Subsidiary" means a subsidiary company within the meamng of Section 4 of the Companies Act, 1956 (1 of 1956),

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company,

(m) "State-controlled enterprise" means an enterprise which is under die control of the Central Government or a State Government"

[F No 52/01/CAB-2001]

A RAMASWAMY, Jt Secy Foot Note:—The principal rules were published vide G SR number 537(E), dated the 11th September, 1997 and subsequently amended vide—

1 G S R, 328(E), dated 3rd June, 1998

2 G S R. 465(E), dated 3rd August, 1998

3 G SR 280(E), dated 24th April, 200147 48 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i)| 49

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 719(E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d*) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Sugar) Rules, 1997, namely:—

1, (1) These rules may be called the Cost Accounting Records (Sugar) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Sugar) Rules, 1997 :—

in schedule, I, after item number 20 and the entries relating thereto, the following shall be inserted namely :—

"21, INTERCOMPANY TRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed' related party relationship' as defined below and vice-a-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1):—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

However, the following shall not be deemed as "related party relationships" :—

(i) provisions of finance;

(ii) trade unions;

3034 GI/2001—750 THE GAZETTE OF INDIA. EXTRAORDINARY [PAKT II—SEC. 3(0] (iii) public utilities;

(HO government departments and government agencies including government sponsored bodies.

Evplanation :— For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than onehalf of the voting power of an enterprise; or (ii) control of the composition of the Board of Director in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest iri Voting power and the power to direct, by statute or agreement, the financial and/ or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(c) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(!) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control,

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as lo obtain benefits from it;

(h) "key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who any connected by blood relationship,

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 ( I on 9%),

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 Of 1956),

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both arc subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F.No. 52/01/CAB-20011

A. RAMASWAMY, Jt. Secy.

Foot Note —The principal rules were published vide G.S.R. Number 388(E), dated the 15th July, 1997 and subscquenll amended vide :—

1. GSR 464(E), dated 3rd August. 199851 52 THE GAZETTE OF INDIA EXTRAORDINARY IPAKI II—SL< 3(i)l

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R 720(E)—Incxerciseofthepowersconfcrredbysub-section(l)of section 642, read with Jausc(d J sub-section (1) of secuon 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Industrial Alcohol) Rules, 1907, namely —

1 (]) These rules may be called the Cost Accounting Records (Industrial Alcohol) Amendment Rules, 2001 (2) The) shall come nilo lorce on the dale of their publication in the Official Gazette

2 In the Cost Accounting Records (Industrial Alcohol) Rules, 1997 —

in schedule, I, after item number 22 and the entries relating thereto, the following shall be inserted namely —

"23. INTER-COMPANY TRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company tremed "related parly relationship" as defined below and vicc-a-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of

(a) Purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc,

(b) utilisation of plant facilities and technical know-how,

(d) administrative, technical, managerial or any other consultancy services,

(e) purchase and sale of capital goods including plant and machinery,

(0 any other payment related to production, processing or manufacturing of product under reference These records shall also indicate the basis followed for arriving at the rates charged or paid for such products or services so as to enablo determination of the reasonableness of such rates in so far as they arc in any v> ay related to product under reference

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1) —

(a) enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled b\, orare under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries),

(b) associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or ajoint venture,

(e) enterprises over which any person described in (c) or (d) is able to exercise significant influence This includes enterprises owned by directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise

However, the following shall not be deemed as "related party relationships" —

(a) two companies simply because they have a Director in common, notwithstanding paragraph (d) or (o) above (unless the Director is able to affect the policies of both companies in their mutual dealings)

(b) a single customer, supplier, franchiser, distributor, or general agent with whom an cnlcipnse transacts a significant volume of business merely by virtue of the resulting economic dependence, and

(c) the parties listed below, in the course of their normal dealings with an enterprise by virtue onlv of those dealings (although they may circumscribe Ihc freedom of action of the enterprise or participate in Us deci- sion-making process),

i providers of finance,

n trade unions,

in public utilities,

rv government departments and government agencies including government sponsored bodies Explanation :—For the purpose of these Rules,—

y) "Related party relationships" means parties who are considered to be related if at any time dunng the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.

54 THE GAZETTE OF INDIA: EXTRAORDINARY (PART II—She. 3(i)l

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than one half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(in) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(0 "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it:

(h) "key management personnel" means those persons who have the authority and responsibility for plan- ning, directing and controlling the activities of the reporting enterprise;

(i) "Relative" in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship,

(j) "Holding company" means a holding company wiihin the meaning of Section 4 of the Companies Act 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 ofthe Companies Act, 1956 (1 of 1956);

0) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries ofthe same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a Stale Government."

[F.No. 52/01/CAB-2001]

A. RAMASWAMY, Jt. Secy.

Foot Note :—The principal rules were published vide G.S.R. number 552(E), dated the 17fh September, 1997 and subsequently amended vide :•—

1. GSR 467(E), dated 3rd August 1998.

55 [PART II—SE^ 3(I)1 56 TIIE GAZETTE OF INDIA EXTRAORDINARY 57

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 721(E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (rt) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Jute Goods) Rules, 1975, namely :—

1. (1) These rules may be called the Cost Accounting Records (Jute Goods) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Jute Goods) Rules, 1975 :—

in schedule I, for item XVI and the entries relating thereto, the following shall be substituted namely :—

"XVL INTER-COMPANY TRANSFER:

(1) In respect of related party transactions or suplies made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-a-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including sci aps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery,

(f) any other payment related to production, processing or manufacturing ofproduct under lefeicncc These records shall also indicate the basis followed for arriving at the rates charged or paid for such products or services so as to enable determination of the reasonableness of such rates in so far as they are in any way related to product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rale (1) —

(a) enterprises that directly, or indirectly through one or more intermediaries, control, or arc controlled by, or arc under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries);

(b) associates and joint ventuics of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

(e) enterpnses over which any person described in (c) or (d) is able to exercise significant influence This includes enterprises owned by directors or major shareholders of the reporting enterprise and cnterpuM-S thai ha\ c a member of key management in common with the reporting enterprise.

HOH L er, the following shall not be deemed as related party relationships" :—

(b) a single customer, supplier, franchiser, distributor, or general agent with whom an entcipusc transacts a significant volume of business merely by virtue of the resulting economic dependence; and (c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only of those dealings (although they may cicumscribe the freedom of action of the enterprise or participate in its deci- sion-making process);

(i) provisions of finance;

(ii) trade unions.

3034 GI/2001—858 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i)l in. public utilities;

iv. government departments and government agencies including government sponsored bodies.

Explanation :—For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownwrship, directly or indirectly, of more than one half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute of agreement, the financial and/ or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(JD "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it:

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who any connected by blood relatinship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(I) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both arc subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F.No. 52/01/CAB-2001]

A. RAMA SWAM Y, Jt. Secy.

Foot Note :—The principal rules were published vide G.S.R. number 590(E), dated the 29th December, 1975 and subsequently amended vide :—

1. GSR 97(E), dated 26th February, 1976 (corrigendum)

2 GSR 793, dated 3rd. February, 1977

3. GSR 32, dated 5th January, 1983

4. GSR 42, dated 8th January, 1983

5. GSR 555, dated 22nd July, 1989

6. GSR 315(E), dated 24th March, 1993

7. GSR439(E), dated 3rd. August, 199859 60 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC 3(i)l 61

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 722 (E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Paper) Rules, 1975, namely:—

1 (1) These rules may be called the Cost Accounting Records (Paper) Amendment Rules, 2001.

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

2 In the Cost Accounting Records (Paper) Rules, 1975 ;—

in schedule I, for item XVIII and the entries relating thereto, the following shall be substituted namely —

"XVm. INTER-COMPANY TRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-a- versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rcjecated goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(f) any other payment related to production, processing or manufacturing of product under reference. These records shall also indicate the basis followed for arriving at the rates charged or paid for such products or services so as to enable determination of the reasonableness of such rates in so far as they arc in any way related to product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1):—

(a) enterprises that directly, or indirectly through one or more intermediaries, control, or arc controlled by, of are under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries);

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) ke> management personnel and relatives of such personnel; and

(e) enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and cnici prises that hove a member of key management in common with the reporting enterprise.

However, the following shall not be deemed as "related party relationships":—

(a) two companies simply because they have a Director in common, notwithstanding paragraph (d) or (e) above (unless the Director is able to affect the policies of both companies in their mutual dealings), (b) a single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business merely by virtue of the resulting economic dependence; and (c) the parties listed below; in the course of their normal dealings with an enterprise hv vitrm. only oT those dealings (although they may circumscribe the freedom of action of the enterprise ot participate in its decision- making process);

(i) prt viders of finance;

(ii) trade unions;

[PARTII—SEC 3(I)1 62 THE GAZETTE OF INDIA EXTRAORDINARY

Oil) public utilities,

(iv) government departments and government agencies including government sponsored bodies,—

Explanation —For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged,

(0 ownership, directly or indirectly, of more than one-half of the voting power of an enterprise, or (u) control of the composition of the Board of Directors in the case of a company or of the Composition of the corresponding governing body m case of any other enterprise, or

(in) a substantial intcicst in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies,

(e) "Associate" means an enterprise in which an mvestmg reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party,

(0 "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control,

(g) "Joint Control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it,

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise,

0) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected bv blood relationship,

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956(1 of 1956),

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956),

(I) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company,

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government"

[F No 52/01/CAB-2001]

A RAMASWAMY, It Secv Foot Note.—The principal rules were published vide G SR number 601(E), dated the 31 st December, 1975 and subse- quently amended vide—

1 GSR 187, dated 3rd June, 1977

Z GSR 1528, dated 18th December, 1979

3 GSR 33, dated 5th January, 1983

4 GSR 556, dated 22nd July, 1989

5 GSR316(E), dated 24th March, 1993

6 GSR 440(E), dated 3rd August, 199863 64 THE GAZETTE OF INDIA EX1RAORDINARY [PART II—See 3(I)1 65

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 723(E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (di of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Rayon) Rules, 1976, namely:—

1. (1) These rules may be called the Cost Accounting Records (Rayon) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Rayon) Rules, 1976 :—

in Schedule III, after item number 22 and the entries relating thereto, the following shall be inserted namely:—

"23. INTER-COMPANY TRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a companyto its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-versa, records shall be maintained showing contracts cnterd into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc.;

(b) uti lisalion of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services; •

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of product under reference. These records shall also indicate the basis followed for arriving at the rates charged or paid for such products or services so as to enable determination of the reasonableness of such rales in so far as they are in any way related to product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1) :—

(a) enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, of arc under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries);

(b) associates and joint venture*- of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

(e) enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and enter- prises that have a member of key management in common with tb"reporting enterprise, However, the following shall not be deemed as "related party relationships":—

(a) two companies simply because they have a Director in common, notwithstanding paragraph (d) or (c) above (unless the Director is able to affect the policies of both companies in their mutual dealings);

(i) providers of finance;

(ii) trade unions;

3o^>t~tlca(~i^i — 66 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i)l
(m) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

Explanation:—For the purpose of these Rules,—

(a) "Related party relationships" means parties who arc considered to be related if at any time during the reporting period one parly has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions;

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(c) "Control" means

(i) ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the Composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies,

(c) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint \enture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control,

(g) "Joint Control" means, the contractually agreed sharing of power to govern the financial and operating policies of an economic actj\iiy so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(1) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship,

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956),

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of J956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both arc subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government'

fF.No. 52/01/CAB-2001]

A. RAMASWAMY, Jt. Secy.

Foot Note.—The principal rules were published vide G.S.R. No. 606, dated the 20th April, 1976 and subsequently amended vide —

1. GS.R 788, dated 3rd June, 1977.

2. G S.R 34, dated 5th January, 1983.

3. GS.R 557, dated 22nd July, 1989.

4 G S.R. 117(E), dated 24th March, 1993.

5. G.S.R 441(E), dated 3rd August, 1998.

6. G.SR. 694(E), dated 31st August, 200067 68 THE GAZETTE OF INDIA: EXTRAORDINARY IPARTII—SF.C.:UI)1 69

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 724 (E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Dyes) Rules, 1976, namely :—

1, (1) These rules may be called the Cost Accounting Records (Dyes) Amendment Rules, 2001.

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

Z In the Cost Accounting Records (Dyes) Rules, 1976 :—

in schedule I, for item XX and the entries relating thereto, the following shall be substituted namely:—

"XX. INTER-COMPANY TRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vice-a- verse, records shall be maintained showing contracts cnterd into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejeated goods including scraps, etc.

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(2) The transactions by the following ''related party relationships" shall be covered under sub-rule (1) :—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(c) enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and enter- prises that have a member of key management in common with the reporting enterprise.

How "ver, the following shall not be deemed as "related party relationships":—

(b) d single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business merely by virtue of the resulting economic dependence; ;md (c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only ofthose dealings (although they may circumscribe the freedom of action of the enterprise or participate in its decision-making process);

(i) providers of finance;

(ii) trade unions;

70 THE GAZETTE OF INDIA: EXTRAORDINARY I PART II—Sbc.3(Dl

Oii) public utilities;

(iv) government departments and government agencies including government sponsored bodies,—

Explanation :•—For the purpose of these Rules,—

(a) "Related party relationships" means parties who arc considered to be related if at any time during ihc reporting period one party has the ability to control the elhci party or exercise significant influence over the other party in making financial and/or operating decisions;

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the Composition of the corresponding governing body in caus of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing .reporting party has significant influence and which is neither a subsidiary nor A joint venture of that party;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint Control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means ihe spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Ad, 1956 (1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F.No. 52/01/CAB-2001]

A. RAMASWAMY, Jl. Secy.

Foot Note—The principal rules were published vide G.S.R. number 605, dated the 22nd April, 1976 and subsequently amended vide—

1. GSR 791, dated 3rd June, 1977.

2. GSR 1276, dated 10th October, 1979.

3. GSR 35, dated 5th January, 1983.

4. GSR 558, dated 22nd July, 1989.

5. GSR318(E), dated24thMarch, 1993.

6. GSR 442(E), dated 3rd August, 31998.

71 72 THE GAZETTE OF INDIA • EXTRAORDINARY IPARI II—SEC 3(I)1 73

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R 72S(E).—In exercise of the powers conferred by Sub-section (1) of section 642, read with clause (d) of Sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting Records (Soda Ash) Rules, 1976, namely •—

1. (1) These rules may be called the Cost Accounting records (Soda Ash) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Soda Ash) Rules, 1976 :—

in schedule, I, for item number XIX and the entries relating thereto, the following shall be inserted namely :—

"XIX. INTER-COMPANY TRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a company to iis holding company or subsidiary or a company trend "related party relationship" as defined below and vice-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finshed products, process materials, chemicals and rejected goods including scraps, etc,

(b) utlisalion of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(1) any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1) : —

ib) associates and joint ventures or the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

(c) enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and entcrp'iscs that have a member ofkey management in common with the reporting enterprise.

However, the following shall not be deemed as "related party relationships" :—

(ai iwn companies simply because they have a Director in common, notwithstanding paragraph (d) or ic) above (unless the Director is able to affect the policies of both companies in their mutual dealings).

(bi l single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts i significant volume of business merely by virtue of the resulting economic dependence; and i c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only of those dealings (although they may circumscribe the freedom of action of the enterprise or participate in its decision-making process),

(i) provisions of finance,

in) iradeunions.

/^O^VfCv./vcW -to74 THE GAZETTE OF INDIA : EXTRAORDINARY IPARI II—SKC. 3fi)l (iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

Explanation ;—For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obiligations between related parties, whether or not a price is charged,

(iii) a substantial interest in voting power and the power to direct, by statute of agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(c) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(0 "Joint venture" m^ans a contractual arrangement whereby two or more parties undertake an economic activity, which is subject tc joint contol;

(g) "Joint control" means the contracit'.illy agreed sharing of power to govern the financial and operating policies of an economic activity so as to ob^in benefits from it;

(h) "Key management personnel" means those pcisons who have the authority' and responsibility for planning, directing and controlling the activities of the reporting enterprise,

(i) "Relative"—in relation lo an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956(1 of 1956),

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F. No. 52/01/CAB-20011

A RAMASWAMY, Jt. Secy.

FOOT NOTE —The principal rules were published vide No G.S.R. 1720, dated the 29th May, 1976 and subsequently amended vide .—

1. GSR 790, dated 3rd June, 1977

2. GSR 36, dated 5th January, 1983

3. GSR 559, dated 22nd July, 1989

4. GSR 319(E), dated 24th March, 1993

5 GSR 443(E), dated 3rd August, 199875 76 T HE G A Z E T TE OF I N D IA • E X T R A O R D I N A RY F P A RV I I —S I -L M i )\

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 726(E).—In exercise of the powers conferred by sub-section (1) of section 042, icad wilh clause id) of sub-section (1) or section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cosl Accounting records (Nylon) Rules, 1977, namely

1.(1) These rules may be called the Cosl Accounting Records (Nylon) Amendment Rules, 2001 (2) They shall come into force on I he date of their publication in the Official Ga/.cttc.

2. In the Cosl Accounting R e c o il (Njlon) Rules, 1977 —

in schedule, III, after item number 22 and the entries relating (hereto, the following shall be inserted namely :—

"23. INTER-COMPANY TRANSFER

(1) In respect of related party transactions or supplies made or services rendered by a company lo us holding company or subsidiary or a company termed "related party relationship" as defined below and vicc-a-versa. records shall be maintained showing contracts entered into, agreements or understanding reached in respect of (a) purchase and sale of raw materials, finshed products, process materials, chemicals and rejected goods including scraps, etc,

(b) utilisation of plant facilities and technical know-how.

(d) administrative, technical, managerial or any other consultancy services,

(f) any other payment related to production, processing or manufacturing of product under icfcrencc.

These records shall also indicate the basis followed for arriving at (he rates charged ur paid for such products or services so as to enable determination of the reasonableness of such rales in so far as they arc in any way related to product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (I) •—

(a) enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, (he reporting enterprise (this includes holding companies, subsidiar- ies and fellow subsidiaries),

(b) associates and joint ventures of the rcporling enterprise and the investing pririy or venturer in reaped ol~ which the reporting enterprise is an associate or a joint venture,

(c) individuals owning, directly or indirectly, an interest in the voting power oflhe reporting cnierpnes that gives them control or significant influence over the enterprise, and relatives ofany such individual;

(d) key management personnel and relatives of such personnel; and

(e) enterprises ovei which any person described m let or (d) is able to exercise significant tnflne'icc This includes enterprises owned by Directors oi major shareholders of the reporting enierpnisc and enterprises that have a member of ke> management in common with (he reporting enterprise

However, the following shall not be deemed ,u "related party relationships" —

(a) twT companies simply because they have a Director in common, notwithstanding paragraph fd) or (c) above (unless the Director is able to affect (he policies of both companies in their mutual dealings);

(b) a single customer, supplier, franchiser, distributor, or genei;il agent with whom an enterpnse irntisacls a significant volume of business merely by virtue of the resulting economic dependence, and (c) the parties listed below, in the course ofthcir normal dealings with an enterprise by viriuc only of those dealings (although they may circumscribe the freedom of action of the enli:rpr re oi participate in its decision-making process);

(i; providers of finance;

(ii) trade unions.

78 THE GAZETTE OF INDIA EXTRAORDINARY [PAKT II—SEC 3(i)l

(iii) public utilities;

(iv) Government departments and Government agencies including Government sponsored bodies Explanation :—For the purpose of these Rules,—

(a) "Related party relationships" means parties who arc considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant, influence over the other party in making financial and/or operating decisions;

(b) "Related party transaction" means a transfer of resources or obligations between related parlies, whether or not a price is charged;

(1) ownership, directly or indirectly, of more lhanonchalf of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute of agreement, the financial and/or operating policies of the enterprise

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(c) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture" means a contractual arrangement where by two or more parties undertake an economic activity, which is subject to joint control,

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating politics of an economic activity so as to obtain benefits from it,

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(1) "Relative"- -in relation to an individual, means the spouse, son. daughter, brother, sister, father and mother who may connected by blood relationship,

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956(1 or 1956), *

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company,

(m) "State-controlled enterprise" means an enterprise uhich is under the control of the Central Govern- ment or a State Government "

[F No 52/O1/CAB-2OO1]

A. RAMASWAMY, Jt Secy.

Foot Note -The principal rules were published vide number G SR 157(E), dated the 1st April, 1997 and subsequently amended vide --

J GSR 38. dated 5th January. 1983

2 GSR 560, dated 22nd July. 1989

3 GSR 32O(E), dated 24th March, 1993

4 CJSR 445(1:/, dated 3rd August, 199S

5 GSR 695(E). dated T 1st August, 200079 80 THE GAZETTE OF INDfA : EXTRAORDINARY TPART II—"EL-. 3(1)1 81

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 727(E).—In exercise of the powers conferred by Sub-section (1) of Section 642, read with claurc (d) of Sub-section (!) of Section 209 of the Companies Act, 1956 (I of 1956), the Central Government hereby nukes the following rules further to amend the Cost Accounting Records (Polyester) Rules, 1977, namely :—

1. (1) These rules may be called the Cost Accounting records (Polyester) Amendment Rules, ?001.

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

2. In the Cost Accounting Records (Polyester) Rules, 1977 :—

In schedule. III, after item number 22 and the entries relating thereto, the following shall be inserted namely :—

"23. INTER-COMPANY TRANSFER :

(1) In respect of related party transactions or suplics made or services rendered by a company to its holding company or subsidiary or a company termed "related party relationship" as defined below and vlce-a-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of product under reference.

These records shall also indicate the bsis followed for arriving at the rates charged or paid for such prod- ucts or services so as to enable determination of the reasonableness of such rates in so far as they arc in any way related to product under reference.

(2) The transactions by the followong "related party relationships" shall be covered under sub-rule (1) : —

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

However, the following shall not be deemed as "related party relationships" :—

(a) two companies simply because they have a Director in common, notwithstanding paragraph (d) or (e) above (unless the Director is able to affect the policies of both companies in their mutual dealings), (b) a single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business merely by virtue of the resulting economic dependence; and (c) the parties listed below, in the course of their normal dealings with an enterprise by virtue onlyof those dealings (although they may circumscribe the freedom of action of the enterprise or participate in its decision-making process);

(i) providers of finance;

(ii) trade unions,

- 7 o 3 <^ \ t n c\ j ' "- W82 T HE G A Z E T TE OF I N D IA • E X T R A O R D I N A RY I P A RT I I —S E C. 3 ( i )l (iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

Explanation :—For the purpose of these Rules,—

(a) "Related party relationships" means parties who are considered to be related if at any time during Ihc reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions;

(b; "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (ii) control of the composition of the Board ofDirectors in the case of a company or ofthe composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that parly;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating polities of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood rclatinship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956(1 or 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both arc subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F. No. 52/01/CAB-20011

A. RAMASWAMY, Jt. Secy.

Foot Note :—The principal rules were published vide number G.S.R. 126(E), dated the 24th July, 1977 and subse- quently amended vide :—

1. GSR 37, dated 5th January, 1983.

2. GSR 561, dated 22nd July, 1989.

3 GSR 321(E), dated 24th March, 1993.

4. GSR 444(E), dated 3rd August, 1998.

5. GSR 692(E), dated 31st August, 2000.

83 84 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3ft)l 85

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 728(E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d) or sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes ihe following rules further to amend the Cost Accounting Records (Textiles) Rules, 1977, namely :—

1.(1) These rules may be called the Cost Accounting Records (Textiles) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Textiles) Rules, 1977 :—

in schedule, III, after item number 22 and the entries relating thereto, the following shall be inserted namely:—

"23. INTER-COMPANY TRANSFER:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(0 any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1) :—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(c) individuals owining, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;

(d) key management personnel and relatives of such personnel; and

(c) enterprises over which any person described in (c) or (d) is able to exercise significanl influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise.

However, the following shall not be deemed as "related party relationships" :—

(i) providers of finance;

(ii) trade unions;

86 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3fi)l

(iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

Explanation :—For the purpose of these Rules,—

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than onehalf ofthe voting power of an enterprise; or (ii) control of the composition of the Board of Di rectors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute of agreement, the financial and/or operating policies ofthe enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating polities of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for plan- ning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 ofthe Companies Act, 1956(1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 ofthe Companies Act, 1956 (1 of 1956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries ofthe same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control ofthe Central Government or a State Government."

[F. No. 52/01/CAB-2001].

A. RAMASWAMY Jt. Secy.

Foot Note:—The principal rules were published vide G.S.R. number 417(E), dated the 28th June, 1977 and subse- quently amended vide—

1. GSR 1277, dated 10th October, 1979.

2. GSR 40 dated 5th January, 1983.

3. GSR 1206 dated 22nd November, 1984.

4. GSR 562, dated 22nd July, 1989.

5. GSR322(E), dated 24th March, 1993.

6. GSR29(E), dated 19th January, 1994.

7. GSR 344 (E), dated 30th March, 1994. (corrigendum)

8. GSR 446 (E), dated 3rd August, 1998.

9. GSR 693 (E), dated 31st August, 2000.

87 88 THE GAZETTE OF INDIA; EXTRAORDINARY [PART II—SEC. 3(i)l 89

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R. 729(E),—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (a) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes *he following rules further to amend the Cost Accounting records (Dry Cell Batteries) Rules, 1976, namely :—

1. (1) These rules may be called the Cost Accounting Records (Dry Cell Batteries) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Dry Cell Batteries) Rules, 1979 :—

In schedule I, for item number XVI and the entries relating thereto, the following shall be subsituted namely :—

"XVI. TNTER-COMPANYTRANSFER:

(1) In respect of related party transactions or supplies made or services rendered by a company to its holding company or subsidiary or a company termed L'related party relationship" as defined below and vice-versa, records shall be maintained showing contracts entered into, agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc.

(b) utlisation of plant facilities and technical know-how:

(d) administrative, technical, managerial or any other consultancy services;

(f) any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the followong "related party relationships" shall be covered under sub-rule (1) :—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

However, the following shall not be deemed as "related party relationships" :—

(i) provisions of finance;

(ii) trade unions;

3034 GI/2001—1290 THE GAZETTE OF INDIA: EXTRAORDINARY [PART H—SEC. 3(i)l (iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

Explanation :—For the purpose of these Rules,—

(a) "Related party relationships'¹ means parties who are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions;

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(i) ownership, directly or indirectly, of more than one-half of the voting power of an enterprise; or (ii) control of the composition of the Board of Directors in the case of a company or of the comDosilion of the corresponding governing body in case of any other enterprise; or

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control;

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating polities of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relationship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956(1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F. No. 52/01/CAB-2001].

A. RAMASWAMY, Jt. Secy.

Foot Note:—The principal rules were published vide G.S.R. number 45(E), dated the 31st January, 1979 and subsequently amended vide—

1. GSR 39, dated 5th January, 1983.

2. GSR 563, dated 22nd July, 1989.

3. GSR323(E), dated 24thMarch, 1993.

4. GSR447(E), dated 3rd August, 1998.

91 92 THE GAZETTE. OF INDIA: EXTRAORDINARY IPART U—SKC. 3d)] 93

NOTIFICATION

New Delhi, the 28th September, 2001

G. S. R, 730(E).—In exercise of the powers conferred by sub-section (1) of section 642, read with clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Cost Accounting records (Sulphuric Acid) Rules, 1980, namely :—

1. (1) These rules may be called the Cost Accounting records (Sulphuric Acid) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Sulphuric Acid) Rules, 1980 :—

in schedule I, for item XVII and the entries relating thereto, the following shall be substituted namely:—

WXVIL INTER-COMPANY TRANSFER:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, mangcrial or any other consultancy services;

(e) purchase and sale of capital goods including plant and machinery;

(i) any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1) :—

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in resptct of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

(e) enterprises over which any person described in (c) or (d) is able to exercise significant influence, This includes enterprises owned by directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise.

Hovevcr, the following shall not be deemed as "related party relationships" ;—

(b) a single customer, supplier, franchiser, distributor, or general agent with whom an cnlerpi ise transacts a significant volume of business merely by virtue of the resulting economic dependence, and (c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only of those dealings (although they may circumscribe the freedom of action of the enterprise or participate in its decision-making process);

U) providers of finance;

(ii) trade unions;

94 Tt fE GAZETTE OF INDIA: EXTRAORDINARY (PART II—SEC. 3

(iii) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

Explanation :—For the purpose of these Rules,—

(a) "Related party relationships" means parties who are considered to be related if at any time during the reporting period one party has the ability to u>ntrol the other party or exercise significant influence over the other party in making financial and/or operating decisions;

(b) "Related party transaction" means a transfer of resources or obligations between related parties, whether or not a price is charged;

(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policies of the enterprise.

(d) "Significant influence" means participation in the financial or operating policy decisions of an enterprise, but not control of those policies;

(e) "Associate" means an enterprise in which an investing reporting party has significant inliuence and which is neither a subsidiary nor a joint venture of that party;

(f) "Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control,

(g) "Joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

(h) "Key management personnel" means thox persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise;

(i) "Relative"—in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may connected by blood relatioship;

(j) "Holding company" means a holding company within the meaning of Section 4 of the Companies Act, 1956(1 of 1956);

(k) "Subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956 (1 of 1956);

(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company if both are subsidiaries of the same holding company;

(m) "State-controlled enterprise" means an enterprise which is under the control of the Central Government or a State Government."

[F. No. 52/01/CAB-20011

A. RAMASWAMY Jt. Secy.

Foot Note.—The principal rules were published vide G.S.R. number 395(E), dated the 4th July, 1980 and subsequently amended vide—

1. GSR 41, dated 5th January, 1983.

2. GSR 564, dated 22nd July, 1989.

3. GSR324(E), dated 24th March, 1993.

4. GSR 448(E), dated 3rd August, 1998.

95 96 THE GAZETTE OF INDIA: EXTRAORDINARY [PAR i IT—SEC. 3(i)l 97

NOTIFICATION

New Delhi, the 28th September, 2001

G.S.R. 731(E).—In exercise of the powers conferred by sub-seaion (1) of section 642, read with clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 (1 of 1956), the Central Govemmeni hereby makes the following rules further to amend the Cost Accounting Records (Engineering Industries) Rules, 1984, namely:—

1. (1) These rules may be called the Cost Accounting Records (Engineering Industries) Amendment Rules, 2001.

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

2. In the Cost Accounting Records (Engineering Industries) Rules, 1984:—

in Schedule II, for item 17 and the entries relating thereto, the following shall be substituted namely:—

"17. INTERCOMPANY TRANSFER:

(a) purchase and sale of raw materials, finished products, process materials, chemicals and rejected goods including scraps, etc.;

(b) utilisation of plant facilities and technical know-how;

(d) administrative, technical, managerial or any other consultancy services'

(e) purchase and sale of capital goods including plant and machinery;

(f) any other payment related to production, processing or manufacturing of product under reference.

(2) The transactions by the following "related party relationships" shall be covered under sub-rule (1):—

(b) associates and joint ventures of the reporting enterprise and the investing parry or venturer in respect of which the reporting enterprise is an associate or a joint venture;

(d) key management personnel and relatives of such personnel; and

However, the following shall not be deemed as "related party relationships" :—

(b) a single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business merely by virtue of the resulting economic dependence; and (c) the parties listed below, in the course of their normal dealings with an enterprise by virtue only of those dealings (although they may circumscribe the freedom cf action of the enterprise or participate in its decision-making process;

0 providers of finance;

(ii) trade unions;

3034 GI/2001—1398 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3(i)J (Hi) public utilities;

(iv) government departments and government agencies including government sponsored bodies.

Explanation:—For the purpose of these Rules.—

(a) "Related party relationships*¹ means parties who are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions;