The weekly messenger | Edition 49.18

Auditing News

Revised Implementation Guide to SA 230 ‘Audit Documentation’– 4 December 2018

The Auditing and Assurance Standards Board (AASB) of the Institute of Chartered Accountants of India (ICAI) has issued the ‘Revised Implementation Guide to SA 230 ‘Audit Documentation’’ in order to provide practical implementation guidance on the aforesaid standard. The Implementation Guide explains the requirements of the Standard in a ‘Question and Answer’ format and contains checklists of documentation requirements as well.

For more information, click here.

ED of GN on Reports in Company Prospectuses (Revised 2018) – 6 December 2018

The AASB of the ICAI has issued an exposure draft (ED) on Guidance Note (GN) on Reports in Company Prospectuses (Revised 2018), which provides guidance w.r.t. the reporting requirements in relation to financial information required to be included in prospectus in case of Initial Public Offering (IPO) in accordance with Securities and Exchange Board of India (SEBI) (Issue of Capital and Disclosure Requirements) Regulations, 2018. The GN inter-alia includes:

• Applicability of the GN;

• Overview of amendments in the ICDR Regulations;

• Roles and Responsibilities;

• Who are Eligible to Make the Reports;

• Liability for Misstatement in Prospectus;

• Reports and Certificates;

• Rights and Powers;

• Financial Information of the Issuer Company;

• Accounting and Auditing Aspects etc.

Comments are to be received by 21 December 2018.

For more information, click here.

Regulatory News

Companies (Cost Records and Audit) Amendment Rules, 2018 – 3 December 2018

The Central Government (CG) has amended the Companies (Cost Records and Audit) Rules, 2014 with the Companies (Cost Records and Audit) Amendment Rules, 2018, wherein it has made the following changes:

• In Rule 3 ‘Application of Cost Record’, certain modifications have been made in the Table under the column ‘Industry/Sector/Product/Service’ given under the heading (B) Non – regulated Sectors;

• In sub-rule (6) of Rule 6 ‘Cost Audit’, which provides timelines for submission of the cost audit report in Form CRA – 4 to the CG, a proviso has been inserted which states that ‘Companies which have got extension of time of holding Annual General Meeting under Section 96(1) of the Companies Act, 2013, may file the aforesaid form within resultant extended period of filing financial statements under Section 137 of the Companies Act, 2013’;

• A new paragraph/note on ‘Unit of Measurement’ has been inserted in Form CRA – 1 and CRA-3.

For more information, click here.

Commencement Date of SEBI (LODR) (Fourth Amendment) Regulations, 2018 – 30 November 2018

The SEBI has notified that the SEBI (Listing Obligations and Disclosure Requirements (LODR)) (Fourth Amendment) Regulations, 2018 shall come into force w.e.f. 1 April 2019.

For more Information, click here.

Submission of Report of the Expert Committee for listing of equity shares of companies incorporated in India on foreign stock exchanges and vice versa – 4 December 2018

The ‘Expert Committee for listing of equity shares of companies incorporated in India on foreign stock exchanges and of companies incorporated outside India on Indian stock exchanges’ which was constituted by the SEBI on 12 June 2018, has submitted its report to SEBI, which aims to facilitate the companies incorporated in India to directly list their equity shares on foreign stock exchanges and companies incorporated outside India to list on Indian stock exchanges.

Comments are to be received by 24 December 2018.

For more information, click here.

Basel III Framework on Liquidity Standards – NSFR – Final Guidelines – 29 November 2018

The Reserve Bank of India (RBI) has notified that the Net Stable Funding Ratio (NSFR) guidelines issued in May 2018 would come into effect w.e.f. 1 April 2020.

For more information, click here.

Relaxation on the guidelines to NBFCs on securitisation transactions – 29 November 2018

The RBI, in order to encourage Non- Banking Financial Companies (NBFCs) to securitise/assign their eligible assets, has relaxed the guidelines w.r.t. the securitisation transactions. As per the new guidelines, NBFCs can now securitise loans of more than five – year maturity after holding those for six months on their books as against the earlier requirement, wherein the NBFCs were required to hold these assets for at least one year. However, the relaxation on the minimum holding period will be allowed, when the NBFC retains 20 per cent of the book value of these loans.

For more information, click here.

Maintenance of Statutory Liquidity Ratio – 5 December 2018

The RBI has decided to reduce the Statutory Liquidity Ratio (SLR) requirements of banks by 25 basis points every calendar quarter from 19.5 per cent of their Net Demand and Time Liabilities (NDTL) to

• 19.25 per cent from 5 January 2019;

• 19.00 per cent from 13 April 2019;

• 18.75 per cent from 6 July 2019;

• 18.50 per cent from 12 October 2019;

• 18.25 per cent from 4 January 2020;

• 18.00 per cent from 11 April 2020.

For more information, click here.

Report of Working Group on new standard on Insurance Contracts (equivalent to IFRS 17) along with Annexures – 6 December 2018

The Working Group which was constituted by the Insurance Regulatory and Development Authority of India (IRDAI) on new standard on Insurance Contracts (equivalent to IFRS 17) in the month of August 2017, has submitted its report to the Authority which inter-alia includes:

• Executive Summary of the Recommendations;

• Introduction;

• IFRS 17/Ind AS 117 Insurance Contracts;

• Approach on Drafting the Regulations on Preparation of Financial Statements;

• IRDAI Regulations/Circulars/Guidelines that will be impacted by IFRS 17/ Ind AS 117;

• Other Aspects on implementation of IFRS 17 / Ind AS 117;

• Order on Formation of the Working Group;

• Activities of the Working Group;

• Draft Regulations on Preparation of Financial Statements (Draft Regulations).    

For more information, click here.

Recent sustainability and integrated reporting developments – 4 December 2018

The Climate Disclosure Standards Board (CDSB) and the Carbon Disclosure Project (CDP) have jointly conducted a review of corporate disclosure of climate change and environmental information across Europe and issued a report namely ‘First Steps: Corporate Climate & environmental disclosure under the EU Non – Financial Reporting Directive’, which provides evidence of reporting practices of 80 companies, indicating what information companies are currently disclosing and whether companies are implementing the recommendations of the G20 Task Force on Climate – related Financial Disclosures (TCFD).

For more information, click here.

Further GST Updates

The Central Board of Indirect Taxes and Customs has issued certain updates w.r.t. Goods and Services Tax (GST) whose links are as follows: 

• For more information w.r.t status of GST Refunds, click here;

• For more information w.r.t effective tax rate on complex, building and flats, click here; and

• For more information w.r.t. extension of due date for filing of Annual Return Forms GSTR – 9, GSTR – 9A and GSTR – 9C, click here.