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MINISTRY OF CORPORATE AFFAIRS (MCA)

1. National Advisory Committee on Accounting Standards -
  1. In exercise of the powers conferred by sub-section (1) of section 210A of the Companies Act, 1956, the Central Government has decided to constitute an Advisory Committee to be called as the National Advisory Committee on Accounting Standards, which will advise the Central Government on the formulation and laying down of accounting policies and accounting standards for adoption by companies or class of companies under the said Act.
  2. The Chairperson and members shall hold office for a period of one year from 18th September, 2014 i.e date of publication in the official gazette or till the constitution of National Financial Reporting Authority under section 132 of the Companies Act, 2013, whichever is earlier.
  2. Companies (Appointment and Qualification of Directors) Amendment Rules, 2014: MCA has vide its notification dated 18th September, 2014 brought about an amendment in Companies (Appointment and Qualification of Directors) Rules, 2014. In exercise of the powers conferred by second proviso to subsection (1), sub-section (4) and clause (0 of sub-section (6) of section 149, subsections (3) and (4) of section 150, section 151, sub-section (5) of section 152, section 153, section 154, section 157, section 160, sub-section (1) of section 168 and section 170 read with section 469 of the Companies Act, 2013, the Central Government hereby makes revised rules to amend the Companies (Appointment and Qualification of Directors) Rules, 2014. These rules may be called the Companies (Appointment and Qualification of Directors) Amendment Rules, 2014. Amendment has been made in Rule 6, 9, 10, 11 and 12. In addition, the existing Form DIR -1 shall be omitted and for the existing Form DIR-3, a new Form DIR-3 shall be substituted. 3. Clarification with regard to provisions of Corporate Social Responsibility (CSR) under section 135 of the Companies Act, 2013. MCA has in continuation of the General Circular No. 21 of 2014 dated 18.06.2014, issued the following clarifications on 17.09.2014 vide its General Circular: 36/2014. (i) Rule 4(6) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 as notified on 27.02.2014 has been amended by notification dated 12.09.2014; and (ii) Consequently, clarification (iv) in General Circular No. 21 of 2014 dated 18.06.2014 shall stand omitted. Clarification (iv) - Salaries paid by the companies to regular CSR staff as well as to volunteers of the companies (in proportion to company’s time/hours spent specifically on CSR) can be factored into CSR project cost as part of the CSR expenditure. 4. Companies (Corporate Social Responsibility Policy) Amendment Rules, 2014 – MCA has vide its notification dated 12th September, 2014 brought about an amendment in CSR Rules. In exercise of the powers conferred under Section 135 and sub-sections (1) and (2) of Section 469 of the Companies Act, 2013 (18 of 2013), the Central Government has made the following rules to amend the Companies (Corporate Social Responsibility Policy) Rules, 2014, namely:—
  1. In the Companies (Corporate Social Responsibility Policy) Rules, 2014, in rule 4 [CSR Activities], in sub-rule (6), after the words “but such expenditure” the words “including expenditure on administration overheads” shall be included. Therefore, the amended sub-rule (6) would read as follows- Companies may build CSR capacities of their own personnel as well as those of their Implementing agencies through Institutions with established track records of at least three financial years but such expenditure “including expenditure on administration overheads” shall not exceed five per cent of total CSR expenditure of the company in one financial year.
  2. These rules may be called the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2014.
  3. They shall come into force from 12th September, 2014 i.e the date of publication in the official gazette
5. Companies (Removal of Difficulties) Seventh Order, 2014 – MCA has on 4th September, 2014 issued Companies (Removal of Difficulties) Seventh Order, 2014. In Section 143 of the Companies Act, 2013 in sub-section (5), for the portion beginning with the words “In the case of a Government company” and ending with the words “required to be audited and”, the following shall be substituted, namely :— “In the case of a Government company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, the Comptroller and Auditor General Of India shall appoint the auditor under sub-section (5) or sub-section (7) of Section 139 and direct such auditor the manner in which accounts of the company are required to be audited and”.  
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