The weekly messenger | Edition 01.17

Regulatory News

Companies (Incorporation) Fifth Amendment Rules, 2016 – 29 December 2016

Ministry of Corporate Affairs (MCA) has notified Companies (Incorporation) Fifth Amendment Rules, 2016. These rules, inter-alia include the following amendments:

• Rule 4 – Nomination by the subscriber or member of One Person Company
• Rule 12 – Application for Incorporation of Companies
• Rule 38 – Simplified Proforma for Incorporating Company Electronically

These rules shall come into force on 1 January 2017.

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Companies (Removal of Names of companies from the register of companies) Rules, 2016 – 26 December 2016

MCA has notified Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. These rules, inter-alia, include the following:

• Removal of name of company from the register on suo-moto basis.
• Application for removal of name of company
• Manner of filing of application
• Form to be certified
• Manner of publication of notice
• Notice of striking off and dissolution of company
• Application or forms pending before Central Government etc.

These rules shall come into force on the date of their publication in the Official Gazette.

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Commencement of Section 248 to 252 of the Companies Act, 2013 – 26 December 2016

The Central Government appoints 26 December 2016 as the date on which the provisions of Section 248 to 252 of the Companies Act, 2013 shall come into force. These sections include the following:

• Power of Registrar to remove Name of company from register of companies.
• Restrictions on making applications to registrar for removing the name of company
• Effect of company notified as dissolved
• Fraudulent application for removal of name
• Appeal to tribunal 

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Continuous Disclosures and Compliances by REITs – 29 December 2016

Regulation 23 of the SEBI (Stock Exchange Board of India) (Real Estate Investment Trusts) (REIT) Regulations, 2014 prescribe disclosures to be made by a REIT to the stock exchange. These disclosures include financial and non-financial information. Now, with reference to the aforementioned regulations, these disclosures are placed at Annexure A and Annexure B respectively of the circular.

Annexure A, inter-alia, includes following:

• Financial information of REIT
• Financial information of manager
• Obligation to maintain proper books of accounts and records, documents etc.

Annexure B, inter-alia, includes following:

• Listing Agreement
• Disclosure of unit holding pattern
• Review of credit rating
• Website of REIT

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Disclosure of financial information in offer document for REITs - 26 December 2016

Regulation 15(2) of the SEBI (Real Estate Investment Trusts) Regulations, 2014 prescribe the disclosures for financial information of REIT as well as the Manager and Sponsor. Now, with reference to the aforementioned regulations, these disclosures are placed at Annexure A which include following:

• Financial Information of REIT
• Projections of REIT’s Income and Operating Cash Flows
• Management Discussion and Analysis of REIT’s operations
• Other Disclosures for REIT
• Historical financial information of manager and sponsors
• Framework for calculation of net distributable cash flows
• Principles for preparation of combined financial statements
• Minimum disclosures for key financial statements

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Report of the Implementation Group of Ind AS in insurance sector – 29 December 2016

As per the roadmap of MCA for insurance sector, insurers and insurance companies are required to prepare Ind AS based financial statements for accounting periods beginning from 1 April 2018 onwards with comparatives for the periods ending 31 March 2018 or thereafter. An Implementation Group had been constituted to examine the implications of implementing Ind AS, address the implementation issues and facilitate formulation of operational guidelines to converge with Ind AS.

The Implementation Group has now submitted a report which details the recommendations of the group, addresses the implementation issues and facilitate formulation of operational guidelines to converge with Ind AS in the Indian Insurance sector. The authority may examine the recommendations in the report for appropriate incorporation in the relevant regulations/guidelines.

Since the insurers are required to submit proforma-Ind AS financial statements to the Authority from the quarter ended 31 December 2016, therefore, the required formats have been issued along with the report.

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