MINISTRY OF CORPORATE AFFAIRS
Company Law Settlement Scheme (CLSS 2014)
In order to give an opportunity to companies which had not filed their statutory documents, such as Annual Returns and Financial Statements under the Companies Act on time the ‘Company Law Settlement Scheme 2014 (CLSS-2014)’ was launched on 15thAugust, 2014. This Scheme provided a one-time opportunity for defaulting companies to file their annual statutory documents at a reduced additional fee of 25% of the additional fees otherwise payable and granted immunity to them from prosecution on this account. The scheme also gave an opportunity to inactive companies to get themselves declared as ‘dormant companies’ by filing a simple application at reduced fees. This scheme continued till 31.12.2014.
Companies Act, 2013: Implementation and amendments through Companies (Amendment) Bill, 2014
The Government received representations on certain issues on the new Companies Act / Rules made thereunder from Industry Chambers and stakeholders. Issues which have been addressed through modifications in the rules, issue of Removal of Difficulties Orders and circulars include – thresholds for related party transactions requiring stakeholders approval; exclusion of independent directors from the definition of “related party”; authorization of CLB (pending constitution of NCLT) to direct re-scheduling of deposits in case of default; initiation of simplification of e-forms; allowing new areas for CSR spending and clarifications on CSR related issues; providing transitional clarity/ reliefs in appropriate cases.
After holding consultations with Industry chambers and concerned Ministries/Departments/regulators, the Companies (Amendment) Bill, 2014 was introduced in the Lok Sabha in December, 2014 which was considered and passed by that House on 17 December, 2014. “This Bill is now awaiting approval of the Rajya Sabha”. The amendments contained in the Bill are aimed at addressing issues raised by various stakeholders as well as ‘ease of doing business’ requirements. These relate to omitting mandatory minimum paid up capital requirements; making common seal optional; restricting public inspection of board resolutions filed in the registry; empowering Central Government to prescribe thresholds with regard to reporting of frauds to Central Government by auditors and non-related shareholders to approve related party transactions through ordinary resolution.
Swachh Bharat and Clean Ganga campaign
CSR cell has issued a series of clarifications through a General Circular dated 18th June 2014 for effective implementation of CSR Policy Rules and to deal with certain matters not covered under the Act or Rules but which facilitate smooth implementation of their CSR Policies. The circular suggests liberal interpretation of Schedule VII so as to include a wide range of activities under CSR having implication for inclusive growth. As a follow up to Prime Minister’s announcement on Swachh Bharat and Clean Ganga campaign, the same have been included as CSR activities under Schedule VII of the Act w.e.f 24.10.2014.
A High Level Committee (HLC) has been constituted to suggest measures to access the implementation of Corporate Social Responsibility (CSR) policies by companies at their level and by the Government under the provisions of Section 135 of the Companies Act, 2013 vide General Circular No. 01/2015 dated 03.02.2015. The Committee is expected to submit its report by the end of August, 2015. Till date the Committee has held two meetings.
Notification of IFRS-converged Ind AS
Consequent to announcement in the budget of Financial Year 2014-15 (para128), accounting standards converged with global standards, namely, International Financial Reporting Standards (IFRS) were framed in consultation with the Institute of Chartered Accountants of India and National Advisory Committee on Accounting Standards. These thirty nine standards, called Indian Accounting Standards (Ind As) have been notified on 16.02.2015 as Companies (Indian Accounting Standards) Rules, 2015. These accounting standards are significantly congruent with the global standards, with minimum carve-outs and are expected to boost investor confidence.
Dealing with Corporate Delinquency
SFIO has completed investigations into the affairs of 42 so-called ‘Chit Fund Companies’ unravelling their modus operandi. Apart from prosecuting such companies for failure to comply with provisions of Companies Act, evidence gathered has been shared with the CBI as well as other investigating agencies such as, Enforcement Directorate and Economic Offences Wings of the concerned State Police authorities which are looking into criminal offences of such companies.
Investor Education Initiatives
1491 programs were conducted in various locations to familiarize small investors of the opportunities and pitfalls in making investments.