The weekly messenger | Edition 10.20

Accounting News

ICAI issues advisory on Accounting and Assurance related issues for FY 2019-20 due to CoVID - 19 – 27 March 2020
 
The Accounting Standards Board and the Auditing and Assurance Standards Board of the ICAI, considering the impact of the Coronavirus on the state of economy and commerce, has issued an ‘Accounting and Auditing Advisory for FY 2019-20’. This Advisory majorly focuses on the ‘Impact of Coronavirus on Financial Reporting and the Auditors Consideration’. The aforesaid advisory is applicable to :

• Entities to whom Ind AS is applicable; and
• Entities to whom AS is applicable i.e.

1. Companies to whom Companies (Accounting Standards) Rules, 2006 is applicable and
2. Non-corporate entities to whom AS issued by ICAI is applicable.

For more information, click here.
 
Application of IFRS 9 in the light of the coronavirus uncertainty – 27 March 2020
 
The International Accounting Standards Board (IASB) has published a document responding to questions regarding the application of IFRS 9 'Financial Instruments' during the period of enhanced economic uncertainty arising from the COVID-19 pandemic.
 
For more information, click here. 

Regulatory News

Special Measures under Companies Act, 2013 and LLP Act, 2008 in view of COVID-19 outbreak – 24 March 2020
 
In order to support and enable Companies and Limited Liability Partnerships (LLPs) in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, the Ministry of Corporate Affairs (MCA) has come up with measures to reduce their compliance burden and other risks. Some of the key measures are:

• No additional fees shall be charged for late filing of any document, return, statement etc., required to be filed in the MCA-21 Registry during the moratorium period i.e. from 1 April 2020 till 30 September 2020.
• Intervals within which the companies are required to hold their Board Meetings have been extended by a period of 60 days for next two quarters i.e. till 30 September 2020.
• Applicability of Company Auditor’s Report Order (CARO) 2020 has been extended from the FY 2019 - 2020 to FY 2020 - 2021.
• The requirement of holding at least one meeting by the Independent Directors without the attendance of non-independent directors and members of management for FY 2019-20 has been waived off.
• The date for the creation of Deposit Repayment Reserve of 20% of deposits maturing during the FY 2020-21 has been extended till 30 June 2020. Similarly, the current requirement for investing 15% of debentures maturing during a specific year in specified instrument before 30 April 2020 has been extended till 30 June 2020.
• For newly incorporated companies, additional relaxation of six months w.r.t. the filing of declaration of commencement of business in Form INC-20A has been provided.
• Non-compliance of Section 149 of the Companies Act, 2013 , which states that every company shall have at least one director who shall reside in India for at least 182 days, would not be treated as a violation.

For more information, click here.
 
Clarification on contribution to PM CARES Fund to be considered as eligible CSR activity – 28 March 2020
 
The MCA has clarified that any contribution made to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’ (PM CARES Fund), which has been set up with the primary objective of dealing with any kind of emergency or distress situation such as that posed by COVID 19 pandemic, would qualify as CSR expenditure under the Companies Act 2013.
 
For more information, click here.
 
CG increases the minimum amount of default for applicability of the provision of Insolvency and Liquidation of corporate debtors under IBC 2016 – 24 March 2020
 
The existing threshold of default of Rs. 1 lakh under Section 4 of the Insolvency and Bankruptcy Code (IBC), 2016, which deals  with the applicability of the provisions related to Insolvency Resolution and Liquidation for Corporate Persons has been raised to Rs. 1 crore to prevent triggering of insolvency cases against MSMEs.
 
For more information, click here.
 
Further relaxations from compliance with certain provisions of the SEBI (LODR) Regulations, 2015 and the SEBI circular dated 22 January relating to SOP due to the CoVID -19 virus pandemic – 26 March 2020
 
In continuation of its circular dated 19 March 2020, the Securities and Exchange Board of India (SEBI) has granted further relaxations from certain provisions of SEBI (Listing Obligations and Disclosure Requirements (LODR)) Regulations, 2015 to the listed entities whose specified securities are listed, due to the outbreak of the CovID-19 virus, such as:

• Extension of due dates w.r.t. filing of certificate from practicing Company Secretary on timely issue of share certificates and holding of Annual General Meeting by top 100 listed entities for FY 2019-20 by one month;
• Extension of due dates for conducting committee meetings by three months;
• Relaxation of the operation of the SEBI circular on Standard Operating Procedure (SOP) dated 22 January 2020;
• Exemption from publication of advertisements in newspapers till 15 May 2020.

For more information, click here.

Relaxation from compliance with certain provisions of the SAST Regulations, 2011 due to the CoVID-19 pandemic – 27 March 2020
 
The SEBI has also decided to extend the due date of filing disclosures, in terms of Regulations 30(1), 30(2) and 31(4) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations), which requires the shareholders to compile, collate, and disseminate information of their consolidated shareholding as on 31 March 2020 to the Company and the stock exchanges till 1 June 2020.
 
For more information, click here. 
 
Suo moto cognizance by Supreme Court for extension of limitation period for filing all returns/appeal/documents due to challenge faced by India arising out of COVID 19 – 23 March 2020
 
The Supreme Court, considering the various challenges being faced by the litigants across the country on account of Coronavirus in filing their petitions/ applications/ suits/ appeals/ all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State) , has ordered that the period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws, whether condonable or not, shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by Supreme Court in present proceedings.
 
For more information, click here.

Finance Minister announced several relief measures relating to Statutory and Regulatory compliance matters across Sectors in view of CoVID-19 outbreak – 24 March 2020
 
In view of the CoVID-19 outbreak, the Finance Minister has announced certain relief measures specially with respect to statutory and regulatory compliance matters related to several sectors such as:

• Income Tax;
• GST/Indirect Tax;
• Customs;
• Financial Services;
• Corporate Affairs.

For more information, click here.