Wednesday, January 7, 2015

Finance Updates - Companies (Amendment) Bill, Company Law Settlement Scheme, GDP Growth Etc.,


Extension of Date for Filing e-Form CRA-2:
As per rule 6 (2) of the Companies (Cost Records and Audit) Rules, 2014, companies are required to inform appointment of cost auditor to the Central Government by filing e-Form CRA-2, within a period of thirty days of the Board meeting in which such appointment is made or within a period of one hundred and eighty days of the commencement of the financial year, whichever is earlier. Considering delay in availability of e-Form CRA-2 on the MCA website, the Ministry has extended the date of filing of the e-Form CRA-2 up to 31.01.2015 without any penalty. The e-Form CRA-2 will be made available on the MCA website shortly. And companies which have filed e-From 23C for appointment of Cost Auditor for the financial year 2014-15 need not file e-Form CRA-2 afresh for the financial year 2014-15 (General Circular No. 42/2014 dated 12.11.2014).

Cabinet Clears the Companies (Amendment) Bill, 2014:
The Union Cabinet approved the introduction of the Companies (Amendment) Bill, 2014 in Parliament to make certain amendments in the Companies Act, 2013. The Bill seeks to amend 21 provisions (covering 14 issues). The Bill proposes to address some issues raised by stakeholders and facilitate ease of doing business in the country. Important amendments proposed in the Act are as follows: Omitting requirement for minimum paid up share capital  at  the time of incorporation; prescribing specific  punishment for non-repayment of deposits by companies; prohibiting public inspection of Board resolutions filed in the Registry; including provision for writing off past losses/depreciation before declaring dividend for the year; enabling provisions to prescribe thresholds beyond which fraud shall be reported to the Central Government; bail restrictions to apply only for offence relating to fraud under Section 447; winding up cases to be heard by 2-member Bench instead of a 3-member Bench; and Special Courts to try only offences carrying imprisonment of two years or more etc.

Company Law Settlement Scheme, 2014:
The Ministry of Corporate Affairs has further extended the 'Company Law Settlement Scheme 2014 (CLSS-2014)' up to 31.12.2014. CLSS-2014provides a one-time opportunity for defaulting companies to file their annual statutory documents, with granting immunity from prosecution and reduced fee (General Circular No. 44/2014 dated 13.11.2014).

Companies General Rules and Forms (Amendment) Rules: 
The Government of India has amended the Rule 12A of the Companies (central Government's) General Rules and Forms, 1956, changing the nomenclature of 'Joint Director (Accounts)' to 'Joint Director' (Notification G.S.R. 815(E) dated   17.11.2014).

11thNational Awards for Excellence in Cost Management:
The Institute of Cost Accountants of India (ICoAI) organised "11thNational Awards for Excellence in Cost Management- 2013" on 25.11.2014 in New Delhi. The Hon'ble Union Minister of State for Finance Shri Jayant Sinha, who graced the occasion as Chief Guest, presented the awards to 22 companies for excellence in cost management practices. Shri M.J. Joseph, Additional Secretary, Ministry of Corporate Affair, graced the occasion a Special Guest and addressed the gathering.

Other Updates:
  • GDP growth in the 1st half of the current fiscal(2014-15) increased to 5.5% from 4.9% realized in corresponding period of the previous year. This is mainly due to 3.5% growth in Agriculture, 3.2% growth in Industry and 7% growth in Services. Industrial growth is yet to pick-up, and much would depend on revival of manufacturing sector. I urge the corporates to make the "Make in India" campaign a success by proving their mettle in bolstering  manufacturing  growth.
  • The Ministry of Corporate Affairs made rapid strides during the year in improving the legal framework and simplifying procedures for 'ease of doing business'. For removing doubts and facilitating smooth implementation of the Companies Act, 2013, 15 amendments to various Companies Rules were notified and 45 clarifications issued.
  • I am happy to note that the Companies Amendment Bill, 2014 has been passed by the Lok Sabha. The Bill proposes to make, inter alia, approval for related party transactions simpler, retain the stringent bail provision only for the serious offences of fraud, and rationalize procedural aspects to deal with frauds detected during the course of audit. Once the Bill is enacted, it will bring substantial ease to the business community.
  • Serious Fraud Investigation Office (SFIO) completed the investigations in the affairs of 17 so-called 'Chit Fund Companies' unravelling their modus operandi. Apart from prosecuting such companies for non-compliance of relevant provisions of Companies Act, evidence gathered has been shared with the CBI which is looking into criminal offences of such companies. We have moved a step forward in investors' protection through proactive disclosure of the list of companies, which are under alert, defaulted in statutory filing, remained dormant etc. on Ministry's website.

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