The weekly messenger | Edition 17.21

July 2021

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

Companies (Accounting Standards) Rules, 2021 – 23 June 2021
 
The Central Government after consultation with the National Financial Reporting Authority (NFRA) has issued the ‘Companies (Accounting Standards) Rules, 2021’ for non-Ind AS compliant companies, thereby replacing the erstwhile Companies (Accounting Standards) Rules, 2006.The key changes which have been made vide the aforesaid Rules are as under:

  • The term ‘Companies Act 1956’ has been replaced with the term ‘Companies Act 2013’.
  • Definition of ‘Small and Medium Sized Companies (SMCs)’ has also been amended, wherein the following changes have been made:
  1. The turnover limit has been increased from ₹ 50 crores to ₹ 250 crores; and
  2. The borrowing limits have also been enhanced from ₹ 10 crores to ₹ 50 crores.

These Rules would be applicable on every company, other than companies on which Indian Accounting Standards as notified under the Companies (Indian Accounting Standards) Rules, 2015 are applicable.
 
The Accounting Standards shall come into effect in respect of accounting periods commencing on or after 1 April 2021.
 
These Rules shall come into force w.e.f. 25 June 2021.
 
For more information, click here.

AUDITING NEWS

Last Date of Updation of UDINs at e-filing Portal – 30 June 2021
 
The Central Board of Direct Taxes (CBDT) vide its press release dated 26 November 2020 had mandated the validation of the Unique Document Identification Number (UDIN) generated from ICAI portal in all the Income Tax Forms and Audit Reports uploaded at the e-filing portal.
 
Earlier, the CBDT had given a window of 15 calendar days, in case the UDIN was not uploaded on the Income Tax portal. However, post that CBDT had decided to remove this window of 15 days and had given a onetime opportunity of updating the same till 30 June 2021 in such cases. Now the same has been extended till 31 August 2021.
 
For more information, click here.
 
Audit Quality Maturity Model – Version 1.0 (AQMM v1.0) – 3 July 2021
 
The ICAI has come up with the ‘Audit Quality Maturity Model -Version 1.0 (AQMM v1.0)’, which is a capacity-building measure initiated by it. The objective of this Evaluation Matrix is for sole proprietors and Audit firms to be able to self-evaluate their current level of Audit Maturity, identify areas where competencies are good or lacking and then develop a road map for upgrading to a higher level of maturity.
 
For more information, click here.

REGULATORY NEWS

Technical Guide on Incorporation of Foreign Companies in India – July 2021
 
The Corporate Laws & Corporate Governance Committee of the ICAI has issued the ‘Technical Guide on Incorporation of Foreign Companies in India’, which provides detailed guidance on the procedural aspects relating to incorporation of Foreign Companies in India.
 
For more information, click here.
 
Guidance Note on Corporate Social Responsibility – June 2021
 
The Institute of Company Secretaries of India has issued the ‘Guidance Note on Corporate Social Responsibility’, which provides detailed and comprehensive guidance on various aspects of corporate social responsibility.
 
For more information, click here.
 
Clarification on passing Ordinary and Special resolutions by companies under the Companies Act, 2013 read with rules made there under on account of COVID - 19 - 23 June 2021
 
Due to COVID -19, the Ministry of Corporate Affairs (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 conferencing 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 further extended till 30 June 2021.
 
Now, once again, the MCA has extended the aforesaid timelines till 31 December 2021. However, all the other requirements provided in the erstwhile Circulars remain unchanged.
 
For more information, click here.
 
Relaxation of levy of additional fees in filing certain forms under the Companies Acts, 2013 and LLP Act 2008 – 30 June 2021
 
The MCA vide its circular dated 3 May 2021 had relaxed the levy of additional fee on forms (other than a CHG-1 Form, CHG-4 Form and CHG-9 Form) under the Companies Act, 2013 / Limited Liability Partnership (LLP) Act, 2008 which were due for filing between the period 1 April 2021 to 31 July 2021 up to 31 July 2021.
 
Now the same has been extended till 31 August 2021.
 
For more information, click here.
Relaxation of time for filing forms related to creation or modification of charges under Companies Act 2013- Extension time - 30 June 2021
 
The MCA has further extended the timelines for filing of forms related to creation or modification of charges under Companies Act 2013, wherein it has been decided to substitute the figures ‘31.05.2021’ and ‘01.06.2021’ wherever they appear in the circular dated 3 May 2021 with the figures ‘31.07.2021’ and ‘01.08.2021’ respectively.
 
The other requirements as mentioned in the said circular shall remain unchanged and this Circular shall be without prejudice to any belated filings that may have already been made along with additional fees.
 
For more information, click here.
 
SEBI Board Meeting – 29 June 2021
 
The Securities and Exchange Board of India (SEBI) has conducted its Board meeting on 29 June 2021, wherein the Board has taken certain decisions w.r.t. the following matters:

  • Review and Merger of SEBI (Issue and Listing of Debt Securities) Regulations, 2008 and SEBI (Non-Convertible Redeemable Preference Shares) Regulations, 2013 into a single Regulation –SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021;
  • Introduction of Framework for Accredited Investors in securities market;
  • Review of Regulatory provisions related to Independent Directors;
  • Amendments to SEBI (Infrastructure Investment Trusts) Regulations, 2014 and SEBI (Real Estate Investment Trusts) Regulations, 2014;
  • Permitting Resident Indian fund managers to be constituents of Foreign Portfolio Investors;
  • Amendments to SEBI (Mutual Funds) Regulations, 1996, SEBI (Credit Rating Agencies) Regulations, 1999 and SEBI (Bankers to an Issue) Regulations, 1994;
  • Amendments to SEBI (Prohibition of Insider Trading) Regulations, 2015.

For more information, click here.
 
Declaration of dividends by NBFCs – 24 June 2021
 
The Reserve Bank of India (RBI) has issued the guidelines for declaration of dividend by non-banking financial companies (NBFCs).
 
These guidelines shall be applicable to all NBFCs regulated by the RBI as given below:

  • NBFC - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016; and
  • NBFC - Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016.

These guidelines shall be effective for declaration of dividend from the profits of the financial year ending 31 March 2022 and onwards.
 
For more information, click here.
 
New Definition of Micro, Small and Medium Enterprises – Clarifications – 25 June 2021
 
The Ministry of Micro, Small and Medium Enterprises (MSMEs) vide its notification dated 16 June 2021, had extended the validity of Entrepreneurs Memorandum (EM) Part-II and Udyog Aadhaar Memorandum (UAMs) from 31 March 2021 to 31 December 2021.
 
Now, on the similar grounds, the RBI has also amended its Circular dated 21 August 2020, wherein a change similar to the aforesaid notification has been made in the aforesaid Circular.
 
For more information, click here.