The weekly messenger | Edition 19.21

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.

AUDITING NEWS

Further extensions regarding the validity of Peer Review Certificate in the wake of COVID -19 spurt across the country – 22 July 2021
 
In May 2021, the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) had decided to grant extension to the Peer Review Certificates expiring during the period from 1 April 2021 to 30 June 2021 till 31 July 2021.  
Now, once again the Board has decided to grant a similar extension to the Peer Review Certificates expiring during the period from 1 July 2021 to 31 July 2021 till 31 August 2021.
 
However, if reviewer has already submitted the report in respect of a Practice Unit falling in aforesaid category, which is considered complete up to 31 August 2021 by the Board, the peer review certificate shall be issued in continuation of previous certificate.
For more information, click here.
Applicable date of certain deferred provisions of Volume-I of Revised Code of Ethics, 2019 – 26 July 2021
The ICAI’s Revised 12th edition of Code of Ethics came into effect from 1 July 2020, except for the following provisions of Volume-I, which were deferred till further notification:

  • Responding to Non-Compliance of Laws and Regulations (NOCLAR)
    [Sections 260 and 360]
  • Fees - Relative Size
    [Paragraphs 410.3 to R410.6]
  • Taxation Services to Audit Clients
    [Subsection 604].

Now, the ICAI has notified that the aforesaid provisions of the Code of Ethics would be made applicable and effective from 1 April 2022.
 
For more information, click here.

REGULATORY NEWS

Relaxations from Regulatory Compliances due to Outbreak of COVID-19 pandemic-Part II – 13 July 2021
The ICAI has issued the Part – II of its publication on ‘Relaxations from Regulatory Compliances due to Outbreak of COVID-19 pandemic’ thereby containing the summary of key relaxations and measures that have been announced by the Ministry of Corporate Affairs (MCA) and the Securities and Exchange Board of India (SEBI) during the period August 2020 to June 2021.
 
For more information, click here.
 
MCA notified commencement date of provisions of Section 4 of the Companies (Amendment) Act, 2020 – 22 July 2021
 
The MCA has notified that the provisions of Section 4 of the Companies (Amendment) Act, 2020 i.e., Amendment to Section 16 ’Rectification of name of company’ of the Companies Act, 2013 shall come into force w.e.f. 1 September 2021.
 
For more information, click here.
Companies (Incorporation) Fifth Amendment Rules 2021 – 22 July 2021
Pursuant to the amendments being made in Section 16 ’Rectification of name of company’ of the Companies Act, 2013, the MCA has issued the Companies (Incorporation) Fifth Amendment Rules, 2021, wherein the following changes have been made:

  • A new rule i.e.  Rule 33A ‘Allotment of a new name to the existing company under section 16(3) of the Act’ has been inserted.
  • Further, a new form namely Form INC-11C ‘Certificate of Incorporation pursuant to change of name due to Order of Regional Director not being complied’ has also been inserted.

These Rules shall come into force w.e.f. 1 September 2021.
 
For more Information, click here.
 
Relaxation in timelines for compliance with regulatory requirements by Debenture Trustees due to COVID-19 – 20 July 2021
 
In view of the current situation arising due to COVID-19 pandemic and based on the representations received from the Debenture Trustees, the SEBI has extended the timeliness for compliance with respect to various regulatory requirements by Debenture Trustees for the quarter/half year/ year ending 31 March 2021.
 
For more information, click here.
 
Extension of time for holding AGM by top 100 listed entities by market capitalization – 23 July 2021
 
As per Regulation 44(5) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, top 100 listed entities by market capitalization are required to hold their Annual General Meeting (AGM) within a period of 5 months from the date of closing of the financial year (FY).
 
Post considering the representations received from various listed entities and the Institute of Company Secretaries of India, the SEBI has extended the timelines for the said class of companies by a period of 1 month.
 
Accordingly, such entities can hold their AGM within a period of 6 months from the date of closing of the FY for 2020-21.
 
For more information, click here.
 
Cessation of LIBOR: Transition arrangements – 8 July 2021
 
In August 2020, the Reserve Bank of India (RBI) had requested the banks to frame a board-approved plan, outlining an assessment of exposures linked to London Interbank Offered Rate (LIBOR) and the steps to be taken to address risks arising from the cessation of LIBOR, including their preparedness for the adoption of the Alternative Reference Rate (ARR).
 
Now, the RBI has issued an advisory to Banks and other RBI-regulated entities, thereby emphasizing the need for preparedness for the transition away from LIBOR, wherein the RBI has provided the listing of the steps to be taken in this regard by the Banks and the other RBI-regulated entities.
 
For more information, click here.
 
Loans and Advances – Regulatory Restrictions - 23 July 2021
 
The RBI had issued revised regulatory restrictions for providing loans & advances to directors of the banks and their relatives, thereby amending its ‘Master Circular on Loans and Advances – Statutory and Other Restrictions dated 1 July 2015’.
 
For more information, click here.
Updated IRDAI Consolidated Regulations – 22 July 2021
 
For the benefit of regulated insurance entities, the Insurance Regulatory and Development Authority of India (IRDAI) has consolidated all the Regulations pertaining to the respective subjects (e.g. Health, TPA, Advt etc.) and made them available at one common platform.
 
For more information, click here.
 
Tax exemption to ameliorate stress due to COVID-19 – 19 July 2021
The Government has decided to provide income tax exemption:

  • to the amount received by a taxpayer for medical treatment from an employer or from any person for treatment of COVID-19 during the FY 2019-20 and subsequent years;
  • w.r.t. ex-gratia received by the family members of a deceased taxpayer from the employer of such person or from other person on the death of the person on account of COVID-19 during FY 2019-20 and subsequent years

The exemption shall be allowed without any limit for the amount received from the employer and shall be limited to Rs.10 lakh in aggregate for the amount received from any other persons.
 
For more information, click here.
 
IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2021 – 14 July 2021
 
The Insolvency and Bankruptcy Board of India (IBBI) has notified the IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2021 to enhance the discipline, transparency, and accountability in corporate insolvency proceedings.
 
These Regulations shall apply to every corporate insolvency resolution process (CIRP) ongoing or commencing on or after 14 July 2021.
 
These Regulations shall come into force w.e.f. 14 July 2021.
 
For more information, click here.
 
IBBI (Insolvency Professionals) (Second Amendment) Regulations, 2021- 22 July 2021
 
The IBBI has issued ‘Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2021’, wherein following Regulations have been modified:

  • Regulation 5 ‘Qualifications and experience’;
  • Regulation 9 ‘Registration for a limited period’ has been omitted;
  • Regulation 12 and 13 which deals with ‘Recognition of Insolvency Professional Entities’;

These Regulations shall come into force w.e.f. 22 July 2021
 
For more information, click here.