Ministry of Corporate Affairs has issued Notification in respect to amendment of The Companies (Audit and Auditors) Amendment Rules, 2014 and The Companies (Accounts) Amendment Rules,2014 and Circulars dated 14.10.2014 which are stated below:
1. The Companies (Audit and Auditors) Amendment Rules, 2014.
MCA vide notification G.S.R_(E) amended The Companies (Audit and Auditors) Rules, 2014 by inserting Rule 10A after Rule 10 namely:
"10A. For the purposes of clause (i) of sub-section (3) of sectlon 143* for the financial years commencing on or after 1st April. 2015, the report of the auditor shall state about existence of adequate internal financial controls system and its operating effectiveness:
Provided that auditor of a company may voluntarily include the statement referred to in this rule for the financial year commencing on or after 1st April, 2014 and ending on or before 31st March, 2015."
*Clause (i) of sub-section (3) of sectlon 143 :
2. The Companies (Accounts) Amendment Rules,2014
MCA vide notification G.S.R_(E) amended The Companies (Accounts) Rules, 2014 by inserting the following proviso after the existing proviso in rule 6* :
"Provided further that nothing in this rule shall apply in respect of preparation of consolidated financial statement by an intermediate whOlly' owned subsidiary, other than a wholly-owned subsidiary whose immediate parent is a company incorporated outside India:
Provided also that nothing contained in this rule shall, subject to any other law or regulation, apply for the financial year commencing from the 1st day
of April, 2014 and ending on the 31st March, 2015, in case of a company which does not have a subsidiary or subsidiaries but has one or more associate companies or joint ventures or both, for the consolidation of financial statement in respect of associate companies or joint ventures or both, as the case may be. "
*Rule 6 of the Companies (Accounts) Rules, 2014 :
Manner of consolidation of accounts.- The consolidation of financial statements of the company shall be made in accordance with the provisions of Schedule III of the Act and the applicable accounting standards:
Provided that in case of a company covered under sub-section (3) of section 129 which is not required to prepare consolidated financial statements under the Accounting Standards, it shall be sufficient if the company complies with provisions on consolidated financial statements provided in Schedule III of the Act.
3. General Circular 37/2014: Clarification with regard to Trust and trustee as a partner in the Limited Liability Partnerships (LLPS).
It has been clarified that for the purposes of "Real Estate Investment Trust" (REIT) or "lnfrastructure Investment Trust" (lnvlTs) or such other trusts set up under the regulalions prescribed under the Securities & Exchange Board of lndia Act, 1992 it is not barred for a trustee, being a body corporate, to hold partnership in an LLP in its name without the addition of the statement that it is a trustee.
4. General Circular 38/2014 : Right of persons other than retiring directors to stand for directorship - Refund of deposit under sectlon 160 of the Companies Act, 2013 ln certain cases.
It has been clarified that in case the amount of deposit of rupees one lakh received under sub-section (l) of section 160 of the Companies Act, 2013 (Act) by the companies registered under section 8 of the Companies Act, 2013 , the Board of directors of a section 8 company is to decide as to whether the deposit made by or on behalf of the person failing to secure more than twenty-five percent of the valid votes is to be forfeited or refunded.