The weekly messenger | Edition 15.22

Regulatory news

FAQs on Maintenance of Cost Records and Audit thereof Under the Companies Act, 2013 – 4 May 2022

The Institute of Cost Accountants of India has issued certain Frequently Asked Questions (FAQs) w.r.t. ‘Maintenance of cost records and audit thereof under the Companies Act, 2013’ which inter alia includes:

• Whether a robotics and artificial intelligence company that develops drone-based solutions to provide actionable intelligence from aerial data be covered under the Rule 3 (B) of the Companies (Cost Records and Audit) Rules 2014?

• What is a criterion for cost audit in Healthcare Services?

• Whether Key Managerial Person (KMP) or Directors be reported in Part-D of Annexure to the Cost Audit Report? Whether remuneration paid to KMP/Directors be reported in related party transactions or not?

For more information, click here.

Companies (Prospectus and Allotment of Securities) Amendment Rules 2022 – 5 May 2022

The Ministry of Corporate Affairs (MCA) has issued the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022 wherein the following amendments have been made:

• In Rule 14(1) ‘Private Placement’, the following proviso has been inserted: “Provided also that no offer or invitation of any securities under this rule shall be made to a body corporate incorporated in, or a national of, a country which shares a land border with India, unless such body corporate or the national, as the case may be, have obtained Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and attached the same with the private placement offer cum application letter”.

• Certain changes have also been made in Form PAS-4.

The Rules shall come into force w.e.f 5 May 2022.

For more information, click here.

Clarification of holding of AGM through Video Conference or Other Audio-Visual Means – 5 May 2022

The MCA has once again decided to allow the companies whose Annual General Meetings (AGMs) are due in 2022 to conduct the same through Video Conference or Other Audio-Visual Means on or before 31 December 2022 in accordance with the requirements provided in paragraphs 3 and 4 of the Circular dated 5 May 2020.

It has been further clarified that the said Circular shall not be construed as conferring any extension of time for holding of AGMs by the companies under the Companies Act, 2013 and the companies which have not adhered to the relevant timelines shall be liable to legal action under the appropriate provisions of the Companies Act, 2013.

For more information, click here.

Clarification on passing of Ordinary and special resolutions by the companies under the Companies Act, 2013 read with rules made thereunder on account of COVID -19 – Extension of timeline – 5 May 2022

Due to COVID -19, the MCA had issued two Circulars in the month of April 2020, wherein it had issued certain clarifications on passing of ordinary and special resolutions by companies by holding Extraordinary General Meetings (EGMs) through Video Conference or Other Audio-Visual Means or passing of certain items only through postal ballot without convening general meetings. As per the initial clarifications, the companies were allowed to hold relevant EGMs or transact relevant business through postal ballot, as per the prescribed procedures up to 30 June 2020 or till further orders, whichever is earlier. These timelines were extended till 30 June 2022.

Now, the MCA has further extended the aforesaid timelines till 31 December 2022. However, all the other requirements provided in the erstwhile Circulars remain unchanged.

For more information, click here.

SEBI constitutes advisory committee on ESG matters – 6 May 2022

The Securities and Exchange Board of India (SEBI) has constituted an advisory committee on Environmental, Social and Governance (ESG) related matters in the securities market. The terms of reference of the Committee include:

• Enhancements in Business Responsibility and Sustainability Report (BRSR)

• ESG Ratings

• ESG Investing

For more information, click here.