Companies cost records and audit rules amended: specified sectors now require cost records from companies with Rs.35 crore turnover.
The amendment prescribes a Table of regulated and non regulated sectors for which companies (including foreign companies) must maintain cost records where overall turnover in the preceding year is Rs. 35 crore or more, defines the Central Excise Tariff Act Heading for classification, and excludes micro and small enterprises and liaison only foreign offices from certain entries.

Companies rules amendment replaces 'Department of Company Affairs' wording with 'Ministry of Corporate Affairs' on publication.
The Companies (Central Government's) General Rules and Forms Amendment Rules, 2014 substitute the words "in the Ministry of Corporate Affairs" for the phrase "(Accounts) in the Department of Company Affairs" in Rule 12A, provide the short title for the amendment, and declare that the rules shall come into force on the date of their publication in the Official Gazette.

Company fees: new prescribed fees for specified applications under the Companies Act, covering financial year, registers and deposits.
The Central Government inserted four new entries in the Schedule to the Company Law Board (Fees on Applications and Petitions) Rules, 1991 prescribing fees for: allowing a financial year other than April-March; rectification of the register of members; directing a company to pay sums due or compensate for loss from non-payment; and allowing further time to repay deposits, under the Companies Act, 2013. The amendment was made under the statutory powers cited and takes effect on publication in the Official Gazette.

Corporate social responsibility contributions may include payments to sanitation and river rejuvenation funds after Schedule VII amendment.
The amendment to Schedule VII of the Companies Act, 2013 expressly permits CSR expenditures on sanitation to include contributions to the Swachh Bharat Kosh and permits CSR expenditures on water to include contributions to the Clean Ganga Fund; the change was made under the Central Government's powers and takes effect upon publication in the Official Gazette.

Internal financial controls: auditors must report on existence and operating effectiveness for upcoming financial years; voluntary earlier inclusion allowed.
Auditors must state in their audit reports the existence of an adequate internal financial controls system and its operating effectiveness for financial years commencing on or after the effective date; auditors may voluntarily include that statement for the transitional earlier financial year prior to that effective date.

Consolidation exemptions limit consolidation obligations for intermediate wholly owned subsidiaries and provide transitional relief for associates and joint ventures.
The amendment adds provisos to rule 6: consolidation obligations do not apply to consolidated financial statements prepared by an intermediate wholly owned subsidiary unless its immediate parent is incorporated outside India; and, subject to other law or regulation, companies without subsidiaries but with associates or joint ventures are exempt from consolidating those associates or joint ventures for the transitional financial year following commencement of the Act.

Director Identification Number procedures updated: application numbering, surname declarations, new intimation and form requirements.
Amendments revise DIN procedures: remove certain personal fields and Form DIR-1; require verification and signature on applications and a declaration when no last name exists with use of Form DIR-3A; replace provisional DIN with an automatically generated application number; insert rule 10A obliging pre-30 June 2007 directors to notify companies of allotted DIN via Form DIR-3B and require companies to file Form DIR-3C within fifteen days; require fee payment, mandate electronic submission of DIR-6 with proof, substitute Form DIR-3, insert DIR-3A/B/C and DIR-6, and omit DIR-4 and DIR-7.

National Advisory Committee on Accounting Standards constituted to advise on accounting standards; members appointed for a two year term.
Notification constitutes the National Advisory Committee on Accounting Standards under section 210A of the Companies Act, 1956 to advise the Central Government on accounting policies and standards for companies. It specifies the Chairperson and members nominated by professional institutes, financial regulators and industry bodies, prescribes a two year term from Gazette publication or until constitution of the National Financial Reporting Authority under section 132 of the Companies Act, 2013, whichever is earlier, and states the notification comes into force on 18th September 2014.

Corporate Social Responsibility expenditure now expressly includes administrative overheads under the amended rules.
The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2014 insert the words "including expenditure on administrative overheads," after the phrase "but such expenditure" in rule 4, sub rule (6), thereby expressly clarifying that CSR expenditure includes administrative overheads; the amendment is made by Central Government notification and takes effect on publication in the Official Gazette.

Appointment of Competition Commission member: central government designates U. C. Nahta under the Competition Act for fixed-term service.
The Central Government, invoking Section 8(1) read with Section 10(1) of the Competition Act, appoints Shri U. C. Nahta as a Member of the Competition Commission of India from the date of his assumption of charge, subject to a fixed term or earlier cessation upon attainment of the prescribed maximum age or until further orders.

Auditor appointment authority extended to government-controlled companies, with audit scope and manner directed by the auditor-appointing authority.
The Order substitutes the relevant portion of the audit provision to require that, for companies owned or controlled, directly or indirectly, by the Central Government or by any State Government or Governments or jointly, the auditor shall be appointed by the Comptroller and Auditor-General under the auditor-appointment provisions and that the Comptroller and Auditor-General shall direct the manner in which the accounts of the company are required to be audited.

Useful life and residual value rules modified; departures require disclosure and technical justification and significant parts treated separately.
Amendments substitute Schedule II provisions so useful life ordinarily follows Part C and residual value is subject to a prescribed low limit; departures require disclosure and technical justification. Component accounting is required where parts are significant and have different useful lives, with a transitional voluntary period followed by mandatory application. Paragraph 7(b) is amended to change an obligation to permissive recognition.

Related party transactions: new threshold-based special resolution and enhanced disclosure requirements govern approvals and reporting.
Rule changes set quantitative thresholds triggering special-resolution approval for related party transactions under section 188: specified limits based on turnover or net worth and monetary caps apply to sale/purchase/supply, property transfers, leasing and services; limits run per transaction and in aggregate during the financial year. Appointment to office or place of profit and underwriting remuneration above prescribed limits also require special resolution. Turnover and net worth are to be computed from the audited financials of the preceding year. Wholly owned subsidiary transactions may be approved by the holding company's special resolution. Required explanatory statement particulars are listed.

Slum area development designated as an eligible corporate social responsibility activity, defining 'slum area' by competent authority.
An amendment to Schedule VII inserts slum area development as an eligible corporate social responsibility activity and defines "slum area" as any area declared such by the Central Government, any State Government or any other competent authority under law; the notification is made under the executive power of the Act and comes into force on publication in the Official Gazette.

Class of companies designation: public companies meeting capital and turnover thresholds permitted multiple CEOs under section 203.
Public companies with paid-up share capital of one hundred crore or more and annual turnover of one thousand crore or more are designated as a class for the second proviso to sub-section (1) of section 203 where they engage in multiple businesses and have appointed a Chief Executive Officer for each such business; thresholds are determined from the latest audited balance sheet.

Related party definition expanded to include relatives in managerial sub clause, clarifying scope under Companies Act
Definition of related party is amended to insert "or his relative" after "manager" in sub clause (iv) of clause (76) of section 2, correcting an omission and aligning that sub clause with the other sub clauses of the definition. The amendment is made under the Central Government's power to remove difficulties and takes effect on publication in the Official Gazette.

Companies rules amendment exempts SEBI approved fund trusts and relaxes mandatory provisions for specified rules in company administration.
The amendment exempts trusts created to establish Mutual Funds, Venture Capital Funds, or other SEBI approved funds from rule 9; omits the "either value or volume of the shares" wording and the Explanation in rule 13; substitutes a different threshold direction in rule 23(1); and changes mandatory language to permissive in rule 27(1) and its Explanation, thereby narrowing applicability and introducing discretion in specified provisions of the Companies (Management and Administration) Rules, 2014.

Pending company filings: incomplete applications filed earlier may, on submission, be disposed under prior Companies Act rules.
Pending applications or forms filed before these amendment rules but not disposed for want of information or documents shall, upon submission of the required information or documents to the satisfaction of the authority, be disposed of in accordance with the rules made under the Companies Act, 1956.

Companies Amendment narrows 'a director' in rule 3 to exclude independent directors upon publication under Companies Act.
The Central Government amends the Companies (Specification of definitions details) Rules, 2014 by inserting the words 'other than an independent director' after 'a director' in rule 3; the amendment, made under delegated powers from the Companies Act, takes effect upon publication in the Official Gazette.

Related party definition amended: "and holds" replaces "or holds" to clarify statutory scope and resolve drafting error.
The Companies (Removal of Difficulties) Fifth Order, 2014 substitutes the word "and holds" for the inadvertent "or holds" in sub-clause (v) of clause (76) of the Companies Act definitions, effective on publication, thereby correcting the definition of related party to reflect the intended conjunctive meaning.