New Delhi: Amending rules under the Companies Law, government has exempted unlisted firms having overseas subsidiaries from preparing consolidated financial statement for the current financial year.
Besides, the Corporate Affairs Ministry has amended rules pertaining to Corporate Social Responsibility (CSR) policy as well as to the Appointment and Qualification of Directors.
In a notification, the ministry has exempted unlisted companies, which have one or more subsidiaries incorporated outside India, from preparing consolidated financial statements for the financial year commencing on or after April 1, 2014.
The amendments have been effected in Companies (Accounts) Rules, 2014 by way of a notification dated January 16.
"This is seen as more of a transitional relief to companies that have foreign subsidiaries and have to deal with additional challenges in consolidation due to differences in accounting framework and reporting period followed by these subsidiaries," KPMG in India's Sai Venkateshwaran said.
He is Partner and Head of Accounting Advisory Services at KPMG India.
According to Yogesh Sharma, Partner (Assurance) at consultancy Grant Thornton India LLP, it is believed that the intention of this amendment is to provide only a temporary relief.
Meanwhile, the ministry -- which is implementing the Companies Act, 2013, wherein most provisions came into force from April 1 last year -- has made changes to rules related to Corporate Social Responsibility (CSR) policy.
The latest amendment to CSR aspect would help provide more clarity for companies. Under the law, certain class of profitable entities are required to shell out at least 2 percent of their three-year annual average net profit towards social welfare activities.
Now, entities established by the company, "either singly or alongwith its holding or subsidiary or associate company, or alongwith any other company or holding or subsidiary or associate company of such other company' or otherwise" can carry out CSR works, according to a January 19 notification.
Further, the ministry has amended rules related to the Appointment and Qualification of Directors.
"In case a company has already filed Form DIR-12 with the Registrar...A foreign director of such company resigning from his office may authorise in writing a practicing chartered accountant or cost accountant in practice or company secretary in practice or any other resident director of the company to sign Form DIR-11 and file the same...," another notification dated January 19 said.
Form DIR-11 pertains to notice of resignation of a director to the Registrar, while DIR-12 relates to particulars of appointment of directors and the key managerial personnel and the changes among them.