COMPANIES (ACCOUNTS) RULES 2014

COMPANIES (ACCOUNTS) RULES, 2014

NOTIFICATION NO. GSR 239 (E) [F.NO.1/19/2013-CL-V], DATED 31-3-2014

In exercise of the powers conferred under sub-sections (1) and (3) of section 128, sub-section (3) of section 129, section 133, section 134, sub-section (4) of section 135, sub-section (1) of section 136, section 137 and section 138 read with section 469 of the Companies Act, 2013, and in supersession of the Companies (Central Government’s) General Rules and Forms, 1956 or any other rules prescribed under the Companies Act, 1956(1 of 1956) on matters covered under these rules, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:-

Short title and commencement

1. (l) These rules may be called the Companies (Accounts) Rules, 2014.

(2) They shall come into force on the 1st day of April, 2014.

Definitions

2. (1) In these rules, unless the context otherwise requires,-

(a) “Act” means the Companies Act, 2013 (18 of 2013);
(b) “Annexure” means the Annexure to these rules;
(c) “fees” means the fees as specified in the Companies (Registration Offices and Fees) Rules, 2014;
(d) “Form” or “e-Form” means a form set forth in Annexure to these rules which shall be used for the matter to which it relates;
1 [ (da) “Indian Accounting Standards” means the Indian Accounting Standards referred to in rule 3 and Annexure to the Companies (Indian Accounting Standards) Rules, 2015; ]
(e) “Schedule” means the Schedule to the Act;
(f) “section” means the section of the Act;

(2) The words and expressions used in these rules but not defined and defined in the Act or in the Companies (Specification of definitions details) Rules, 2014, shall have the meanings respectively assigned to them in the Act or in the said Rules.

[Notice of address at which books of account are to be maintained.(Rule 2A inserted by the Companies (Accounts) Amendment Rules, 2015, w.e.f. 16-1-2015.)

2A. For the purposes of the first proviso to sub-section (l) of section 128, the notice regarding address at which books of account may be kept shall be in Form AOC-5.]

Manner of books of account to be kept in electronic mode

3. (1) The books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference.

(2) The books of account and other relevant books and papers referred to in sub-rule (1) shall be retained completely in the format in which they were originally generated, sent or received, or in a format which shall present accurately the information generated, sent or received and the information contained in the electronic records shall remain complete and unaltered.

(3) The information received from branch offices shall not be altered and shall be kept in a manner where it shall depict what was originally received from the branches.

(4) The information in the electronic record of the document shall be capable of being displayed in a legible form.

(5) There shall be a proper system for storage, retrieval, display or printout of the electronic records as the Audit Committee, if any, or the Board may deem appropriate and such records shall not be disposed of or rendered unusable, unless permitted by law:

Provided that the back-up of the books of account and other books and papers of the company maintained in electronic mode, including at a place outside India, if any, shall be kept in servers physically located in India on a periodic basis.

(6) The company shall intimate to the Registrar on an annual basis at the time of filing of financial statement-

(a) the name of the service provider;
(b) the internet protocol address of service provider;
(c) the location of the service provider (wherever applicable);
(d) where the books of account and other books and papers are maintained on cloud, such address as provided by the service provider.

Explanation. For the purposes of this rule, the expression “electronic mode” includes “electronic form” as defined in clause (r) of sub-section (1) of section 2 of Information Technology Act, 2000 (21 of 2000) and also includes an electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000) and “books of account” shall have the meaning assigned to it under the Act.

Conditions regarding maintenance and inspection of certain financial information by directors

4. (1) The summarised returns of the books of account of the company kept and maintained outside India shall be sent to the registered office at quarterly intervals, which shall be kept and maintained at the registered office of the company and kept open to directors for inspection.

(2) Where any other financial information maintained outside the country is required by a director, the director shall furnish a request to the company setting out the full details of the financial information sought, the period for which such information is sought.

(3) The company shall produce such financial information to the director within fifteen days of the date of receipt of the written request.

(4) The financial information required under sub-rules (2) and (3) shall be sought for by the director himself and not by or through his power of attorney holder or agent or representative.

[Forms and items contained in financial statements.— (Rule 4A inserted by the Companies (Accounts) Second Amendment Rules, 2015, w.e.f. 4-9-2015.)

4A. The financial statements shall be in the form specified in Schedule III to the Act and comply with Accounting Standards or Indian Accounting Standards as applicable:

Provided that the items contained in the financial statements shall be prepared in accordnace with the definitions and other requirements specified in the Accounting Standards or the Indian Accounting Standards, as the case may be .]

Form of Statement containing salient features of financial statements of subsidiaries

5. The statement containing the salient feature of the financial statement of a company’s subsidiary or subsidiaries, associate company or companies and joint venture or ventures under the first proviso to sub-section (3) of section 129 shall be in Form AOC-1.

Manner of consolidation of accounts

6. The consolidation of financial statements of the company shall be made in accordance with the provisions of Schedule III of the Act and the applicable accounting standards:

Provided that in case of a company covered under sub-section (3) of section 129 which is not required to prepare consolidated financial statements under the Accounting Standards, it shall be sufficient if the company complies with provisions on consolidated financial statements provided in Schedule III of the Act:

(Second and third provisos inserted by the Companies (Accounts) Amendment Rules, 2014, w.e.f. 14-10-2014.)

[Provided further that nothing in this rule shall apply in respect of preparation of consolidated financial statement by an intermediate wholly-owned subsidiary, other than a wholly-owned subsidiary whose immediate parent is a company incorporated outside India:

Provided also that nothing contained in this rule shall, subject to any other law or regulation, apply for the financial year commencing from the 1st day of April, 2014 and ending on the 31st March, 2015, in case of a company which does not have a subsidiary or subsidiaries but has one or more associate companies or joint ventures or both, for the consolidation of financial statement in respect of associate companies or joint ventures or both, as the case may be: ]

(Fourth proviso inserted by the Companies (Accounts) Amendment Rules, 2015, w.e.f. 16-1-2015.)

[Provided also that nothing in this rule shall apply in respect of consolidation of financial statement by a company having subsidiary or subsidiaries incorporated outside India only for the financial year commencing on or after 1st April, 2014.]

Companies required to appoint Internal auditor

13. (1)The following class of companies shall be required to appoint an internal auditor or a firm of internal auditors, namely:-

(a) every listed company;
(b) every unlisted public company having-
(i) paid up share capital of fifty crore rupees or more during the preceding financial year; or
(ii) turnover of two hundred crore rupees or more during the preceding financial year, or
(iii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or
(iv) outstanding deposits of twenty five crore rupees or more at any point of time during the preceding financial year: and
(c) every private company having-
(i) turnover of two hundred crore rupees or more during the preceding financial year, or
(ii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of lime during the preceding financial year:

Provided that an existing company covered under any of the above criteria shall comply with the requirements of section 138 and this rule within six months of commencement of such section.

Explanation. – For the purposes of this rule –

(i) the internal auditor may or may not be an employee of the company;
(ii) the term “Chartered Accountant” shall mean a Chartered Accountant whether engaged in practice or not.

(2) The Audit Committee of the company or the Board shall, in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the internal audit.

FORM AOC-2 (Form for disclosure of particulars of contracts/arrangements )

FORM AOC-3 (Statement containing salient features of Balance Sheet and P and L Account)

FORM AOC-4 (Form for filing financial statement and other documents with the Registrar)
FORM AOC-4 CFS (Form for filing consolidated financial statements and other documents with the Registrar)
FORM AOC-5 (Notice of address at which books of account are to be maintained)

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