synopsis of Chapter IX ( Companies Account) rules made by MCA under companies Act 2013

1. Companies (Accounts) Rule 2014
CS Harsh Ranjan csharshranjan@gmail.com
Rule 2 : Definitions
 This rules defines following terms “ Act”, “Annexure”, “fees”, “Form or e-Form”,
“Schedule”, & “Section”.
Rule 3 : Manner of books of account to be kept in electronic mode
 The books of accounts or other relevant books and paper maintained in electronic mode
shall remain accessible in India so as to be usable for subsequent reference. [Rule 3(1)]
 The information contained in the electronic records shall remain in originally generated
format, which must be complete and unaltered. [Rule 3(2)]
 The information received from branch offices shall be unaltered and it must present true
and fair view of branches. [Rule 3(3)]
 The information in electronic records must be able to present in readable form.
 There shall be genuine system for storage and access of e-Records as the audit
committee or Board may think fit and shall not dispose it or make it idle, unless law
permits. Back up of books of account and other relevant records of all places of
business maintained in electronic mode must be kept in servers physically located
in India on a periodic basis.
 The company shall intimate Service provided details and if electronic records are
maintained in cloud then such address provided by the service provider.
Remarks: The term ‘electronic mode’ includes ‘electronic form’ as define in section
2(1)(r) & 2(1)(t) of Information Technology.
Rule 4 : Conditions regarding maintenance and inspection of certain financial information
by directors
 Summarized returns of the books of accounts of the company maintained outside India
shall be sent to the registered office at quarterly intervals, which shall be maintained
and produced for inspection by directors.
 Where any other financial is maintained outside India, then the company must provide
full details of financial information as requested and by the director within fifteen (15)
day of the date of receipt of written request and the director cannot delegate this power to
their representatives.

2. Companies (Accounts) Rule 2014
CS Harsh Ranjan csharshranjan@gmail.com
Rule 5 : Forms of statement containing silent features of financial statements of
subsidiaries.
 The statement containing the salient feature of the financial statement of a company’s
subsidiary or subsidiaries, associate company and joint venture in form AOC-1.
Form : AOC-1
 Is required pursuant to first proviso of section 129(3) of the companies act 2013
read with Companies (Account) Rules, 2014.
 is in two parts, namely part “A” : Subsidiaries and part “B” : Associates and
Joint Ventures.
 is to be certified in the same manner in which the balance sheet is to be certified.
Rule 6 : Manner of consolidation of accounts.
 The consolidation of financial statements must be made in conformity with Schedule III
and other applicable accounting standards.
 A company covered under section 129(3) is not required to prepare consolidated financial
statement under Accounting Standard.
 It shall be enough if company complies with the provision of schedule III.
Rule 7 : Transitional provision with respect to Accounting standards
 The Accounting Standard specified under Companies Act 1956 will continue to apply.
 After notification of new accounting standard as specified by the central Government
under Section 133, the Existing Accounting standard will be bring to an end.
 Till the constitution of National Financial Reporting Authority, the Central Government
may prescribe the standard of accounting or any addendum thereto.
 The standard of accounting or any addendum will be prescribed on recommendation of
the Institute of Chartered Accountants of India (ICAI).
 ICAI will recommends the standard of accounting or any addendum in consultation with
and after the examination of the recommendations made by the National Committee on
Accounting Standard.

3. Companies (Accounts) Rule 2014
CS Harsh Ranjan csharshranjan@gmail.com
Rule 8 : Matters to be included in Board’s report.
 The Board report shall be prepared on the basis of standalone financial statement of the
company.
 The report shall include a separate section for Subsidiaries , associates and joint venture
companies.
 A report on the performance and financial position of each of the Subsidiaries , associates
and joint venture companies.
 The report of board shall contain the particulars of contracts or arrangements with related
parties referred in section 188(1) in the form AOC-2.
Form : AOC-2
 Is required pursuant to section 134(3)(h) of the companies act 2013 and rule8(2)
Companies (Account) Rules, 2014.
 Is for disclosure of particulars of contracts or arrangements with related parties
referred in section 188(1).
 Company have to disclose details of contracts or arrangement or transactions not
at arm’s length basis.
 Company have to disclose details of material contracts or arrangement or
transactions at arm’s length basis.
 is to be certified in the same manner in which the balance sheet is to be certified.
 The Board report shall contain information and details of Conservation of Energy,
Technology absorption, foreign exchange earnings and outgo.
 The board report of listed company and every other public company having a paid up
share capital of 25crore rupees or more, calculated as at the end of the preceding financial
year shall include, a statement indicating the manner in which the formal annual
evaluation has been made by the board of its own performance and that of its committee
and individual directors.
 Board Report above mentioned companies shall also contain:
 the financial summary or highlights;
 change in the nature of business, if any;
 Details of directors or key managerial personnel who were appointed or have
resigned during the year;
 Names of companies which have become or ceased to be its Subsidiaries, joint
ventures or associate companies during the year ;
 Details relating to Deposits covered under Chapter V of the Act;

4. Companies (Accounts) Rule 2014
CS Harsh Ranjan csharshranjan@gmail.com
 Details relating to Deposits not covered under Chapter V of the Act;
 Details relating adequacy of internal financial controls.
 Details of significant and material orders passed by the Regulators or courts or
tribunals impacting the going concern status and company’s operations in future.
Rule 9 : Disclosure about CSR Policy
 The company shall disclose the contents of CSR policy on its Board Report and its
website.
Rule 10. Statement Containing silent features of financial statements.
 The statement containing silent features of documents referred to in first proviso Form
AOC-3.
Form : AOC-3
 Is required pursuant to proviso to section 136(1) of the companies act 2013
and rule 10 Companies (Account) Rules, 2014.
 Is form of abridged financial statements.
 In this form company provide summary of equity and liabilities, assets, profit
and loss accounts, cash flow Statement, notes on financial statement.
 Details of revenue from operation:- In case of companies other than financial
companies.
 Details from revenue from Interest & Services, will be shown separately :- In
case of financial company.
 If the Company is working on different segment, then segment wise details is
also provided
 Directors report, auditor reports, is also required to be submitted by board
 Is to be certified in the same manner in which the balance sheet is to be
certified.
Rule 11 : Manner of circulation of financial statement in certain cases
 In case of all listed companies and such public companies which have a net worth of
more than Rs. One crore and turnover of more than Rs. Ten crore, the financial
statements may be sent:
 by electronic mode to such members who have positively consented in writing for
receiving by electronic mode; and
 by dispatch of physical copies by any other recognised mode of delivery as
specified under section 20 of the Act, in all other cases.

5. Companies (Accounts) Rule 2014
CS Harsh Ranjan csharshranjan@gmail.com
Rule 12 : Filing of financial statements and fees to be paid thereon
 Every company shall file the financial statements with registrar together with form AOC-
4.
Form : AOC-2
 Required pursuant to section 137 of the companies act 2013 and rule 12(1)
Companies (Account) Rules, 2014.
 Form for filing financial statements and other documents with registrar.
 Company have to disclose complete financial and other relevant details.
 Company is required to provide information on Balance Sheet, Profit & loss
Account, CSR policy, related party transactions.
 Is digitally signed by Managing Director / Manager / Secretary of the company
and certified by Practicing Company Secretary/Chartered Accountant/Cost
accountant.
 Filing of financial statements in Extensible Business Reporting Language (XBRL) format
is mandatory for class of companies as Notified By the Central Government.
Rule 13 : Companies required to appoint internal auditor
 The following class of companies shall be required to appoint an internal auditor or a
firm of internal auditors:
 every listed company
 every public company having
 paid up share capital of Rupees 50 crores or more;
 turnover of Rupees 200 crores or more;
 which has any outstanding loans or borrowings from banks or public
financial institutions exceeding 100 crore rupees
 which has accepted deposits of 25 crore rupees or more at any point of
time during the last financial year.
 Every Private Company having
 turnover of Rupees 200 crores or more;
 which has any outstanding loans or borrowings from banks or public
financial institutions exceeding 100 crore rupees
 Existing Companies Covered under any of above mentioned criteria shall comply with
the requirement of section 138 and this rule within six months of commencement of such
section i.e. April1, 2014.
 Internal auditor may or may not be an employee of the company.
 The Audit committee or board will determine operational aspect of audit in consultation
with internal Auditors.