Lok Sabha Question No. 153 (UNSTARRED), answered on 2019-11-18
Subject: Amendment to Companies Rules, 2014
Ministry: CORPORATE AFFAIRS
Asked by: Kotagiri Sridhar

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 153 ANSWERED ON MONDAY, THE 18th NOVEMBER, 2019 KARTIKA 27, 1941 (SAKA)

## AMENDMENT TO COMPANIES RULES, 2014

## QUESTION

## 153.  SHRI SRIDHAR KOTAGIRI:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) whether the Government has recently issued a notification to further amend the Companies (Meetings of Board and its Powers) Rules, 2014;
- (b) if  so,  the details thereof and the major reasons for substituting the words 'business  of  financing  of  companies',  with  the  words  'business  of  financing industrial enterprises' and the benefits the Government expects to accrue as a result of the substitution;
- (c) whether the Government has also recently issued a notification to amend the Companies (Cost Records and Audit) Rules, 2014, if so, the details thereof;
- (d) whether companies, who have already filed their Cost Audit Report in form CRA-4  for  the  financial  year  2018-19  with  the  Central  Government  before  the publication of this notification are required to file their Cost Audit Report for the said financial year; and
- (e) if so, the details thereof and if not, the reasons therefor?

## ANSWER

THE MINISTER OF STATE FOR FINANCE                 (SHRI ANURAG SINGH THAKUR)

AND CORPORATE AFFAIRS

वित्त एवं कॉपोरेट कार्य मंत्रालर् में राज्र् मंत्री

(a)  and  (b):-  The  Ministry  has  issued  notification  number  G.S.R.  777(E)  dated 11.10.2019 to amend the Companies (Meetings of Board and its Powers) Rules 2014. Through  such  amendment  in  Rules,  the  expression  'business  of  financing  of companies' appearing in Rule 11(2) of the Companies (Meetings of Board and its Powers)  Rules,  2014  was  replaced  with  the  expression    'business  of  financing industrial  enterprises'  in  order  to  align  such  Rules  with  the  provisions  of  the amended Section 186 (11) of the Companies Act, 2013 [amended through Section 62 of the Companies Amendment Act, 2017 [CAA-17] which was commenced on 7th May,  2018.  In  the  amended  sub-section  (11)  of  Section  186,  the  expression 'business  of  financing  of  companies'  has  been  replaced  with  the  'business  of

(श्री अनुराग स ंह ठाक ु र)

financing industrial enterprises'. The said amendment in Section 186 of the CA-13 and the Companies (Meetings of Board and its Powers) Rules, 2014 was carried out on  the  basis  of  Report  of  the  Company  Law  Committee  [page  61  of  the  report] submitted in February 2016 which reads as under:'12.21 The Committee noted that while Section 186(11)(b)(iii) provides exemption to investment in shares allotted in pursuance to rights issues by Indian companies under  Section  62(1)(a)  of  the  Act,  similar  exemption  be  also  extended  to investments in rights issues made by body corporates (companies incorporated outside India). The exemption provision may be aligned with Section 372A(8) of the Companies Act, 1956 in this regard. Further, the Committee recommended that the Removal  of  Difficulty  Order  for  Section  186(11)  with  regard  to  Insurance  and Housing  finance  Companies,  etc.  issued  in  January  2015,  subject  to  legal clarification,  may  be  included  in  the  sub-section  itself  through  an  amendment. Language of Section 372A(8) of the Companies Act, 1956 may be used.' It is further stated here that the expression 'financing industrial enterprises' also appeared in Section 372A(8)(a)(i) of the Companies Act, 1956. In view of this, the expression 'business of financing of companies' has been replaced with the expression 'business of financing industrial enterprises' in Section 186 (11) of the Companies Act, 2013 [CA-13] and also in rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014. (c):- The Ministry vide Notification No. G.S.R. 792 (E) dated 15.10.2019 has amended the  Companies  (Cost  Records  and  Audit)  Rules,  2014  through  Companies  (Cost Records and Audit) Amendment Rules, 2019 due to implementation of GST, other procedural  changes  and  consequent  revision  of  connected  forms  i.e.  CRA-1 (Particulars relating to the items of costs to be included in the Books of Accounts) and  CRA-3  (Form  of  Cost  Audit  Report).  The  said  notification  is  placed  on  the Ministry's website www.mca.gov.in and is in public domain. (d) & (e):-  The companies who have already filed their Cost Audit Report in form CRA-4  for  the  financial  year  2018-19  with  the  Central  Government  before  the publication of Notification No. G.S.R. 792 (E) dated 15.10.2019 are not required to file their Cost Audit Report again for the said financial year as provided in clause 1(3) of the aforesaid notification.  The text of the clause 1(3) is reproduced below:

'the companies who have already filed their Cost Audit Report in form CRA-4 for the financial year 2018-19 with the Central Government before the publication of this notification are not required to file their Cost Audit Report for the said financial year.'.

The effective date of notification is 15.10.2019.

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