The weekly messenger | Edition 11.21
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
FASB issues standard clarifying the issuer’s accounting for certain modifications of freestanding equity-classified written call options – 3 May 2021
The Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that clarifies an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.
The ASU provides guidance on how an issuer would measure and recognize the effect of these transactions. Specifically, it provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense.
For more information, click here
AUDITING NEWS
Clarification with regard to applicability of the provisions of Section 139 of the Companies Act 2013 read with Rule 5 and 6 of the Companies (Audit and Auditors) Rules, 2014 – 15 April 2021
The Corporate Laws & Corporate Governance Committee of The Institute of Chartered Accountants of India (ICAI) came out with a clarification as to Whether a Proprietary firm (having FRN) or individual CA who is practicing either in his own name or trade name can be appointed for two terms as per Section 139 of Companies Act, 2013 or not.
For more information, click here
REGULATORY NEWS
Clarification on spending of CSR funds for setting up temporary COVID Care facilities and makeshift hospitals – 22 April 2021
Keeping in view the decision of the Government of India to treat Corona Virus (COVID-19) as a notified disaster, the Ministry of Corporate Affairs (MCA) clarified on 23 March 2020 that spending of Corporate Social Responsibility (CSR) funds for COVID-19 would be considered as an eligible CSR activity.
In continuation to this Circular, it is further clarified that spending of CSR funds for ‘setting up makeshift hospitals and temporary COVID Care facilities’ is an eligible CSR activity under item nos. (i) and (xii) of Schedule VII of the Companies Act, 2013 relating to promotion of health care, including preventive health care, and disaster management respectively.
Original circular, click here
Clarification, click here
Gap between two board meetings under section 173 of the Companies Act, 2013 (CA-13) - Clarification – reg – 3 May 2021
In view of the prevailing situation due to the resurgence of Covid-19 and request received from stakeholders, the Ministry of Corporate Affairs (MCA) issued the clarification on Gap between two board meetings under section 173 of the Companies Act, 2013. Under this section, the gap of 120 days is allowed between two consecutive meetings of the Board. Now, this period has been extended by a period of 60 days for first two quarters of Financial Year 2021-22, as per this clarification.
Accordingly, the gap between two consecutive meetings of the Board may extend to 180 days during the first two Quarter, i.e. Quarter- April to June 2021 and Quarter-July to September 2021, instead of 120 days.
For more information, click here
Relaxation on levy of additional fees in filling of certain forms under the Companies Act, 2013 and LLP Act 2008 – 3 May 2021
Due to the ongoing second wave of the COVID- 19 pandemic, MCA has notified certain relaxation for the rules relating to compliance and further relaxed the levy of certain additional fee on certain forms under the Companies Act, 2013 / LLP Act, 2008. As per the notification, an additional time upto 31st July 2021 have been granted to companies / LLPs to file such forms (other than a CHG-1 Form, CHG-4 Form and CHG-9 Form) without any additional fees.
Accordingly, no additional fees shall be levied upto 31st July, 2021 for the delayed filing of forms (other than charge related forms referred above) which would be due for filing during 1st April, 2021 to 31st May, 2021.
For more information, click here
Relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 – 3 May 2021
On account of the resurgence of COVID-19 pandemic, the Central Government has allowed certain relaxation of time and condone the delay in filing forms related to creation/ modification of charges.
Currently, as per provisions of Section 77 of Companies Act, 2013 form CHG-1 and CHG-9 relating to Creation and Modification of Charge need to be filed in a maximum of 120 days from the date of creation or modification.
For more information, click here
Relaxations relating to procedural matters – Issues and Listing – 22 April 2021
Securities and Exchange Board of India (SEBI) vide Circular dated May 6, 2020, granted one-time relaxations from strict enforcement of certain regulations of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, pertaining to Rights Issue opening upto July 31, 2020 which was further extended for Rights Issues opening up to December 31, 2020 and then further extended for Rights Issues opening up to March 31, 2021.
To ease and facilitate investors, the said relaxation is further extended and shall be applicable for Rights Issues opening up to September 30, 2021, provided certain conditions are met.
For more information, click here
Relaxation from compliance with certain provisions of the SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 / other applicable circulars due to the CoVID-19 pandemic – 29 April 2021
Due to ongoing second wave of the CoVID-19 pandemic and restrictions imposed by various state governments, SEBI has decided to grant the following relaxations from compliance with certain provisions of the LODR Regulations / other applicable circulars:
Sr. | Regulation /Circular | Particulars | Requirement/Frequency of filing | Due Date | Extended deadline for the quarter / half year / year ending March 31, 2021 |
Entities with its specified securities listed | |||||
1 | 24A read with circular dated February 8, 2019 | Annual Secretarial Compliance Report | Sixty days from end of the financial year | May 30, 2021 | June 30, 2021 |
2 | 33(3) | Financial Results | 45 days from the end of the quarter for quarterly results | May 15, 2021 | June 30, 2021 |
60 days from the end of Financial Year for Annual Financial Results | May 30, 2021 | ||||
3 | 32(1) read with circular dated December 24, 2019 | Statement of Deviation or variations in use of funds | 45 days from the end of the quarter for quarterly results | May 15, 2021 | June 30, 2021 |
60 days from the end of Financial Year for Annual Financial Results | May 30, 2021 | ||||
Entities with either of their NCDs/NCRPs/PDI listed | |||||
4 | 52(1) &(2) | Submission of Financial Results | For half yearly results: 45 days from the end of the half year | May 15, 2021 | June 30, 2021 |
For Annual Results: 60 days from the end of Financial Year | May 30, 2021 | ||||
5 | 52(7) read with circular dated January 17, 2020 | Statement of deviation or variations in use of funds (along with financial results) | For half yearly results: 45 days from the end of the half year | May 15, 2021 | June 30, 2021 |
For Annual Results: 60 days from the end of Financial Year | May 30, 2021 | ||||
Entitles with listed municipal bonds | |||||
6 | SEBI circular dated November 13, 2019 | Annual Audited Financial Results | 60 days from end of the financial year | May 30, 2021 | June 30, 2021 |
Entities with listed commercial paper | |||||
7 | SEBI Circular dated October 22, 2019 | Submission of financial results | 45 days from end of the half year | May 15, 2021 | June 30, 2021 |
60 days from end of the financial year | May 30, 2021 | ||||
Listed entities are now allowed to use digital signatures for submission of documents till 31 December 2021.
Circular w.r.t Entities that have their Specified securities listed, click here
Circular w.r.t Entities that have their Debt securities/Bonds listed, click here
Additional time allowed for filing all returns due on 31st March 2021 – 30 April 2021
In the view of difficulties arising due to resurgence of COVID – 19, The Insurance Regulatory & Development Authority (IRDAI) has issued a circular dated 30 April 2021, relating to granting all the insurance intermediaries an additional time period upto 31st May, 2021 to file all returns, which were due on 31st March 2021.
For more information, click here