The weekly messenger | Edition 09.20
This newsletter is a weekly compilation of accounting, auditing and related regulatory news from different accounting and regulatory bodies in India and overseas.
Accounting News
IASB decides on new effective date for IFRS 17 – 17 March 2020
The International Accounting Standards Board (IASB) has decided to defer the effective date of IFRS 17 ‘Insurance Contracts’ to annual reporting periods beginning on or after 1 January 2023. The Board has also decided to extend the exemption currently in place for some insurers regarding the application of IFRS 9 ‘Financial Instruments’ to enable them to implement both IFRS 9 and IFRS 17 at the same time.
For more information, click here.
AASB FAQs on the impact of the coronavirus on financial reporting – 17 March 2020
The Australian Accounting Standards Board (AASB) together with the Australian Auditing and Assurance Standards Board (AUASB) has release a publication on ‘The Impact of Coronavirus on Financial Reporting and the Auditor’s Considerations’ in the form of Frequently Asked Questions (FAQs), describing the key considerations and impacts on financial reporting and auditing arising from the Coronavirus pandemic.
For more information, click here.
Auditing News
Corrigendum to GN on Audit of Banks 2020 Edition – 16 March 2020
TThe ICAI has issued a ‘Corrigendum to Guidance Note (GN) on Audit of Banks 2020’, wherein it has mentioned that in paragraph no. 25.26, “LFAR Reporting” of Chapter 25, “Recovery of Non-Performing Assets by Asset Recovery Branches” at page no. 629 to 632 of the aforesaid GN, the amount mentioned as Rs. 10.00 Crores should be read as Rs. 2.00 Crores.
For more information, click here.
ICSI Auditing Standards – Mandatory from 1 April 2020 – 16 March 2020
The ICSI had issued four Auditing Standards on Audit Engagement; Audit Process and Documentation; Forming of Opinion and Secretarial Audit in May 2019, which were recommendatory for the audit engagements accepted by the Auditor on or after 1 July 2019. Now, the ICSI has made those standards mandatory in nature for the audit /Secretarial Audit engagements accepted by the auditor on or after 1 April 2020.
For more information, click here.
In light of CoVID-19, PCAOB provides Audit Firms with Opportunity for Relief from Inspections – 23 March 2020
The Public Company Accounting Oversight Board (PCAOB) has issued an update w.r.t. their inspections activities in light of the evolving CoVID-19 crisis, wherein the PCAOB has decided to provide PCAOB-registered audit firms an up to 45-day relief period from inspections, with the exception of providing the PCAOB with an access to audit documentation for certain engagements.
For more information, click here.
Regulatory News
MCA invites Public Comments on Draft Companies (CSR Policy) Amendment Rules, 2020 – 13 March 2020
The Companies (Amendment) Act, 2019 has amended the section 135 which deals with the Corporate Social Responsibility (CSR). Now, in order to operationalize the Companies (Amendment) Act, 2019, the Ministry of Corporate Affairs (MCA) has drafted the Companies (CSR Policy) Amendment Rules, 2020 for which it is seeking comments by 28 March 2020.
For more information, click here.
The Companies (Amendment) Bill, 2020 – 19 March 2020
The Government of India has introduced the Companies (Amendment) Bill, 2020 in the Lok Sabha, in order to further amend the Companies Act, 2013, so as to promote greater ease of living to law-abiding corporates. Some of the key highlights of the aforesaid Bill are as follows:
- Central Government has been empowered to exclude certain class of companies, in consultation with the Securities and Exchange Board of India (SEBI) from the definition of listed company;
- Introduction of separate Chapter on ‘Producer Companies’;
- Companies with CSR obligation of up to ₹ 50 lakh would not be required to constitute CSR Committee;
- Companies will now be able to set off excess amount spent on CSR activities in the succeeding years;
- Decriminalisation of offences, thereby omitting punishment with imprisonment in various sections;
- Reduction in penalties under various sections;
- Re-categorisation of offences from compoundable offences to in-house adjudication framework.
For more information, click here.
Companies (Meetings of Board and its Powers) Amendment Rules 2020 – 19 March 2020
In order to take precautionary steps to overcome the outbreak of the coronavirus, the MCA has decided to relax the requirement of holding Board meetings with physical presence of directors under section 173 (2) read with Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 for approval of the matters as stated under sub-rule (1) of Rule 4 of the aforesaid Rules such as annual financial statements, Board’s report, prospectus etc.
Such meetings may be held through video conferencing or other audio-visual means by duly ensuring compliance of rule 3 of the said rules till 30 June 2020.
These Rules shall come into force w.e.f. 19 March 2020.
For more information, click here.
Company Affirmation of Readiness towards CoVID – 19 – 19 March 2020
Due to the outbreak of the CoVID – 19 virus, the MCA has also come up with a simple web based form namely ‘Company Affirmation of Readiness towards CoVID-19’ (CAR) to be filed by the Companies and Limited Liability Partnerships (LLPs), in order to confirm their readiness to deal with the CoVID-19. Some of the key features of the aforesaid form are as follows:
- Applicable for all Indian Companies/Foreign Companies/LLPs/Foreign LLPs;
- Available on MCA’s website from 23 March 2020;
- Required to be filed by an authorized signatory of companies and LLPs on 23 March 2020;
- DSC is not required to fill this form;
- Only OTP verification is required.
For more information, click here.
Clarification on spending of CSR funds for CoVID-19 – 23 March 2020
Keeping in view the decision of the Government of India to treat Corona Virus as a notified disaster, the MCA has hereby clarified that spending of CSR funds for CoVID-19 would be considered as an eligible CSR activity, wherein funds may be spent for various activities related to CoVID-19 under item nos. (i) and (xii) of Schedule VII relating to promotion of health care, including preventive health care and sanitization, and disaster management.
For more information, click here.
SEBI relaxes compliance of certain provisions of SEBI (LODR) Regulations, 2015 due to the CoVID-19 virus – 19 March 2020 and 23 March 2020
The SEBI, pursuant to hampering of day to day functioning of the companies due to the outbreak of the CoVID-19 virus, has granted certain relaxations from certain provisions of the SEBI (Listing Obligations and Disclosure Requirements (LODR)) Regulations, 2015 to the listed entities which have listed their specified securities, the listing of which is enumerated in the below mentioned table:
Regulation and associated filing | Period of relaxation |
Regulation 7(3) - Half yearly compliance certificate on share transfer facility | 1 month |
Regulation 13(3) - Quarterly statement of Investor complaints | 3 weeks (appx.) |
Regulation 24A read with circular No CIR/CFD/CMD1/27/2019 dated February 8, 2019 - Annual Secretarial compliance report | 1 month |
Regulation 27(2) - Quarterly Corporate Governance report | 1 month |
Regulation 31 - Quarterly Shareholding Pattern | 3 weeks (appx.) |
Regulation 33 - Quarterly/Annual Financial Results | 45 days/1 month |
Further, the maximum stipulated time gap between holding of two meetings during the period 1 December 2019 and 30 June 2020 has also been liberalised.
Now, on the similar grounds, the SEBI has again issued a circular, thereby providing clarifications with respect to certain timelines for listed entities and granting relaxations to listed entities which have listed their Non-Convertible Debentures (NCDs), Non – Convertible Redeemable Preference Shares (NCRPS), Municipal Debt Securities (MDS) and Commercial Papers (CPs).
For Circular for listed entities with listed specified securities, click here;
For Circular for listed entities with listed/proposed to be listed NCDs, NCRPs/CPs/MDS, click here.
Regulatory measures taken by SEBI in view of ongoing market volatility – 20 March 2020
The SEBI has issued certain regulatory measures in view of the ongoing market volatility owing to the concern relating to CoVID-19, which includes a 10-fold increase in penalties, a sharp increase in margins, restrictions on short selling, and reducing the outstanding positions available for derivatives trading.
For more information, click here.
Relaxation from compliance to REITs and InvITs due to the CoVID-19 virus pandemic – 23 March 2020
The SEBI, pursuant to the spread of the CoVID-19 virus, has decided to extend the due date for regulatory filings and compliances of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) for the period ending 31 March 2020 by one month over and above the original timelines prescribed under the SEBI (REITs) Regulations, 2014 and SEBI (InvITs) Regulations, 2014 and circulars issued thereunder.
For more information, click here.
Last date for ESI contribution extended – 16 March 2020
Due to the outbreak of CoVID-19, the Employees’ State Corporation has extended the timelines for the purpose of payment of ESI contribution for the month of February 2020 and March 2020 from 15 March 2020 and 15 April 2020 to 15 April 2020 and 15 May 2020 respectively.
For more information, click here.
One - time relaxation provided to file ESI return for the half year April 2019 – September 2019 – 18 March 2020
The ESI Corporation, keeping in view the problem being faced by the employers in filing the ESI contribution for the contribution period April 2019 to September 2019 within 42 days, has relaxed the provisions w.r.t. the same. Now, a one-time opportunity has been provided to those employers who did not file the ESI contribution for the aforesaid period to file the same up to 15 May 2020.
For more information, click here.