COMMENTS INVITED ON THE PROPOSED AMENDMENTS TO THE DRAFT COMPANIES (COST RECORDS AND AUDIT) RULES, 2014
Pursuant to the implementation of Indian Accounting Standards (IndAS), the MCA vide its public notice dated 11 August 2017 has invited comments/suggestions on the amendment in Companies (Cost Records and Audit) Rules, 2014 in order to bring uniformity between financial records and cost records.
The comments/suggestions on the said Draft Rules shall be provided on or before 26 August 2017.
DELEGATION OF POWERS TO REGIONAL DIRECTOR UNDER SECTION 458 OF COMPANIES ACT 2013
The MCA vide its notification dated 06 September 2017 pursuant to power vested in it under Section 458 of the Companies Act, 2013 has delegated its powers pertaining to Reduction of Share Capital to the Regional Directors (RD) at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Shillong, the powers and functions vested in it under Sub Section (2) of Section 66 of the Companies Act 2013.
Accordingly, the RD shall give notice of every application made to it under Section 66(1) to:
The Central Government;
The Securities and Exchange Board of India (SEBI);
and The Creditors of the company.
It shall take into consideration, the representation made to it, if any, within three months from the date of receipt of the notice. If no representation has been received within said period, it shall be presumed that they have no objections.
CLARIFICATION ON DEFINITION OF “JOINT VENTURE” FOR THE PURPOSE OF EXEMPTION FROM APPOINTMENT OF INDEPENDENT DIRECTORS BY CERTAIN UNLISTED PUBLIC COMPANIES
The MCA vide its notification dated 5 July 2017 had inserted Rule 4(2) and amending Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 to exempt the unlisted public company which is a joint venture, a wholly owned subsidiary or a dormant company from appointing independent directors.
Further for the purpose of availing exemption under Rule 4(2) as such a term is not defined in the Companies Act, 2013, stakeholders and other professional institutes had sought for clarifications with regard to the meaning of “Joint Venture”.
In view of the above, MCA vide its circular dated 05 September 2017 has clarified that the term “Joint venture” would mean a joint arrangement, entered into in writing, whereby parties that have joint control of the arrangement, have rights to the net assets of the arrangements. The usage of the term is similar to that under the Accounting Standards.