1. Amendment to Schedule II of Companies Act, 2013
In exercise of the powers conferred by sub-section (l) of section 46:- of the Companies Act, 2013 (18 of 2013), the Central Government has made further amendments to amend schedule II of the said Act with effect from the date of publication of this notification in the Official Gazette. The details of the amendment are provided in the circular.
2. Clarification on Accounting Standards(AS) 10-Capitalization of Cost-regarding
The Government had received a number of representations seeking clarifications on capitalization of costs in case of competitive bid projects. The clarification sought were with regard to capitalization of borrowing costs incurred during the extended delay in commercial production for reasons beyond the developers control, whether capitalization of power plant should be unit-wise or project wise. The matter was examined in consultation with Accounting Standard Board of the institute of chartered Accountants of India.
The Ministry has vide its General circular No. 35/2014 dated 27th August, 2014 clarified that AS-10 and AS-16 prescribe the principles of capitalization of various cost based on the underlying concepts that only such expenditure should be capitalized as form part of the cost of fixed assets which increase the worth of the assets. Cost incurred during the extended delay in commercial production after the plant is otherwise ready does not increase the worth of fixed assets. Such costs, therefore cannot be capitalized.
AS-16 interalia provide guidance with regard to part of capitalization where some units of a project are complete. In case one of the units of the project is ready for commercial production and is capable of being used while construction continues for the other units, costs should be capitalized in relation to that part once the part is ready for commercial production.
It was further clarified that AS 10 and AS 16 are applicable irrespective of whether the power projects are ‘Cost plus project’ or ‘Competitive Bid Projects’.
3.Company Law Settlement Scheme
MCA has in lieu of representations and requests received from various stake holders to grant transitional period/one time opportunity to enable them to file pending annual documents to avoid attraction of high fees/fine and other penal action, specially disqualification of their directors prescribed under the new provisions of the act decided to introduce ‘Company Law Settlement Scheme 2014’. Companies which have not done the annual filings due for filing on or before 30/06/2014 can file these documents until the scheme is in force i.e. upto 15/10/2014. The details of the scheme are provided in the MCA General circular No. 34/2014 dated 12th August, 2014. The registrar shall condone the delay in filings and grant immunity for prosecution and charge reduced additional fee for belated filing of documents.
- only 25% of actual additional fee shall be payable,
- Withdrawal of appeal against prosecution launched for the offence.
4. COMPANIES (MEETINGS OF BOARD AND ITS POWERS) SECOND AMENDMENT RULES, 2014
In exercise of the powers conferred under sections 173, 175, 177, 178, 179, 184, 185, 186, 187, 188, 189 and section 191 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government has made the following rules to amend the Companies (Meetings of Board and its Powers) Rules, 2014. The details of the amendment are provided in the notification.
5.Amendment to Schedule VII of Companies Act, 2013- Corporate Social Responsibility
1. In exercise of the powers conferred by sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013), the Central Government has notified further amendments in Schedule VII of the said Act, namely:-
(1) In Schedule VII, after item (x), the following item and entry shall be inserted, namely:-
“(xi) slum area development.
Explanation.— For the purposes of this item, the term ‘slum area’ shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force.”