SECTION 294AA(2)

APPOINTMENT OF PERSONS HAVING SUBSTANTIAL INTEREST AS SOLE AGENTS

1. Subject - Appointment of persons having substantial as

sole agents.

2. Passing Authority - General Meeting.

3. Nature of the Resolution - Special Resolution.

4. Specimen Resolution(s):

A. APPOINTMENT OF SOLE AGENTS BY A COMPANY HAVING A

PAID-UP SHARE CAPITAL OF RUPEES FIFTY LAKHS OR MORE.

"That subject to the approval of the Central Government under Section 294 AA(6) and other applicable provisions of the Companies Act, 1956, this meeting approves the appointment of Q Ltd. as Sole Agents for purchase of stores of the company for a period of five years with effect from 1st August, 1975 on the terms and conditions contained in the draft Agreement to be entered into between Q Ltd. and the Company placed before the meeting and initialed by the Chairman for the purpose of identification subject to such changes/modifications as may be prescribed by the Central Government."

B. CONTINUANCE OF EXISTING APPOINTMENTS OF SOLE AGENTS BY

THE COMPANY.

"That subject to the approval of the Central Government pursuant to section 294 AA(6) of the Companies Act, 1956, this meeting hereby approves the continuance of R Ltd. as Sole Agents for Purchase of Stores of the Company on the terms and conditions contained in the Agreement dated 25th February, 1974 subject to such changes/modifications as may be prescribed by the Central Government."

5. Guidelines:

1) Approval of the Central Government is also required.

2) The restrictions apply to appointment as sole selling agents as well as sole agents for the buying or purchasing of goods.

3) The provisions apply to both public and private companies.

4) Substantial interest means beneficial holding by the agents together with other persons specified in the Explanation to the section, of shares as under:-

i) shares worth paid-up value of Rs.5 lakhs; or

ii) shares amounting to 5 per cent of the paid-up share capital whichever is less.

6. Filing: a) Form 23--within 30 days.

b) Certified copies of the terms and conditions of the appointment i.e. the

Agreement within 30 days of appointment.