The weekly messenger | Edition 32.19

Regulatory News

ICAI issues publication on Valuation: Professionals’ Insight - Series - 3 – 10 August 2019

The ICAI has issued the third series of its publication on ‘Valuation: Professionals’ Insight’ with an objective to give a thoughtful insight of the practices followed by other valuers and professionals. This publication like the other two series, is a compilation of articles on varied valuation topics written by experts in this field.
 
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FAQs on The Insolvency and Bankruptcy Code, 2016 – 14 August 2019

The ICAI has also issued the second edition of its publication on ‘Frequently Asked Questions on The Insolvency and Bankruptcy Code, 2016 (Revised July 2019 Edition)’, which has been updated basis various developments that have taken place through the Insolvency and Bankruptcy Code (Amendment) Act, 2018, Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, amendments in Regulations, Notifications and Clarifications etc.
 
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Report of the High - Level Committee on CSR 2018 – 13 August 2019

The Ministry of Corporate Affairs has recently presented the report of the High - Level Committee on Corporate Social Responsibility (CSR) which was set up in 2018 in order to review the existing framework and recommend a roadmap for developing a robust and coherent policy on CSR. The Committee has made various recommendations which mainly includes:

• making CSR expenditure tax deductible;
• provision for carry forward of unspent balance for a period of 3 – 5 years;
• balancing local area preferences with national priorities;
• introducing impact assessment studies for CSR obligation of 5 crore or more;
• developing a CSR exchange portal to connect contributors, beneficiaries and agencies etc.

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Commencement Notification w.r.t. certain sections of the Companies (Amendment) Act, 2019 – 14 August 2019

The Central Government (CG) has appointed 15 August 2019 as the date on which the provisions of following sections of the Companies (Amendment) Act, 2019 shall come into force:

• Section 6 i.e. Amendment of Section 26 ‘Matters to be stated in Prospectus’ of the Companies Act, 2013;
• Section 7 i.e. Amendment of Section 29 ‘Public offer of Securities to be in Dematerialised Form’ of the Companies Act, 2013;
• Section 8 i.e. Amendment of Section 35 ‘Civil Liability for Mis-statements in Prospectus’ of the Companies Act, 2013;
• Clauses (i), (iii) and (iv) of Section 14 i.e. Amendment of Section 90 ‘Register of significant beneficial owners in a company’ of the Companies Act, 2013;
• Section 20 i.e. Amendment of Section 132 ‘Constitution of National Financial Reporting Authority’ of the Companies Act, 2013;
• Section 31 i.e. Amendment of Section 212 ‘Investigation into Affairs of Company by Serious Fraud Investigation Office’ of the Companies Act, 2013;
• Section 33 i.e. Amendment of Section 241 ‘Application to Tribunal for Relief in Cases of Oppression, etc’ of the Companies Act, 2013;
• Section 34 i.e. Amendment of Section Sec 242 ‘Powers of Tribunal’ of the Companies Act, 2013;
• Section 35 i.e. Amendment of Section Sec 243 ‘Consequence of Termination or Modification of Certain Agreements’ of the Companies Act, 2013;
• Section 37 i.e. Amendment of Section Sec 272 ‘Petition for Winding Up’ of the Companies Act, 2013;
• Section 38 i.e. Amendment of Section Sec 398 ‘Provisions Relating to Filing of Applications, Documents, Inspection, etc., in Electronic Form’ of the Companies Act, 2013.

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Companies (Share Capital and Debentures) Amendment Rules, 2019 – 16 August 2019

The CG has amended the Companies (Share Capital and Debentures) Rules, 2014 with the Companies (Share Capital and Debentures) Amendment Rules, 2019, wherein it has made the following changes:

• Enhancement in the previously existing cap of 26% of the total post issue paid up equity share capital to a revised cap of 74% of total voting power which is a condition to be fulfilled by a company in case, the company is issuing shares with Differential Voting Rights;
• Also, the earlier requirement as per which the company limited by shares was required to have a consistent track record of distributable profits for the last 3 years for issuing shares with Differential Voting Rights has been omitted;
• The time period within which Employee Stock Options (ESOPs) can be issued by Startups recognized by the Department for Promotion of Industry & Internal Trade (DPIIT) to promoters or Directors holding more than 10% of equity shares, has been enhanced from 5 years to 10 years from the date of their incorporation;
• Certain other changes have been made with respect to the provisions dealing with the creation of Debenture Redemption Reserve and investment or deposit of sum in respect of the debentures maturing during the year.

These Rules shall come into force w.e.f. 16 August 2019.
 
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Commencement Notification w.r.t. the Insolvency and Bankruptcy Code (Amendment) Act 2019 – 16 August 2019

The CG has appointed 16 August 2019 as the date on which the provisions of the Insolvency and Bankruptcy Code (Amendment) Act, 2019 shall come into force.
 
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Non – compliance with certain provisions of SEBI (ICDR) Regulations, 2018 – 19 August 2019

The Securities and Exchange Board of India (SEBI) has come out with stringent norms for regulatory disclosures by listed entites, wherein it has issued a circular on ‘non compliance with certain provisions of SEBI (Issue of Capital and Disclosure Requirements (ICDR)) Regulations, 2018’ which prescribes a penalty of ₹ 20,000 per day on those listed entities which fail to comply with certain provisions of the ICDR Regulations.
 
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