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Ministry of corporate affairs (MCA)

1. COMPANIES (INDIAN ACCOUNTING STANDARDS) (AMENDMENT) RULES, 2017

The Central Government in exercise of the powers conferred by section 133 read with section 469 of the Companies Act, 2013 (18 of 2013) and sub-section (1) of section 210A of the Companies Act, 1956 (1 of 1956), and in consultation with the National Advisory Committee on Accounting Standards has issued the rules to amend the Companies (Indian Accounting Standards) Rules, 2015.

They shall come into force on the 1st day of April 2017.

Amendments have been made to Ind AS 102 (Share based payment) and Ind AS 7 (Statement of cash flows)

2. DESIGNATION OF SPECIAL COURT FOR THE STATE OF TELANGANA AND ANDHRA PRADESH

The Central Government, with the concurrence of the Chief Justice of the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh designated Courts as Special Courts for the purposes of providing speedy trial of offences punishable with imprisonment of two years or more under the said Act.

3.AMENDMENT TO THE SCHEDULE III (FOR DISCLOSING THE USE OF SPECIFIED BANK NOTES)

Ministry of Corporate Affairs had issued a notification on 30th March, 2017 vide no G.S.R. 308(E) amending the Schedule III, Division I, Part I of the Act. Under the heading “General instructions for preparation of Balance Sheet” in paragraph 6, after clause ‘W’, the following clause shall be inserted namely:-

"X. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 as provided in the table below"

Also, in the Companies Act, 2013, in Schedule III, in Division II, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6, after clause ‘J’, the following clause shall be inserted namely:-

"K. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016 as provided in the table below"

  SBNs Other denomination notes Total
Closing cash in hand as on 08.11.2016      
(+) Permitted receipts      
(-) Permitted payments      
(-) Amount deposited in Banks      
Closing cash in hand as on 30.12.2016      

4. Companies (Meetings of Board and its Powers) Amendment Rules, 2017)

The Central Government has made the following rules further to amend the Companies (Meetings of Board and its Powers) Rules, 2014, namely:

  1. in item (i), item (ii), item (iii) and item (iv), for the words “exceeding ten per cent.” wherever they occur, the words “amounting to ten per cent. or more” shall be substituted; and
  2. in item (iii), for the words “ten per cent. of turnover” the words “ten per cent. or more of turnover” shall be substituted.

5. ADDITIONAL DISCLOSURE FOR AUDITORS REGARDING USE OF SPECIFIED BANK NOTES

Ministry of Corporate Affairs had issued a notification on 30th March, 2017 vide no G.S.R. 307(E) in relation to amendment in the Companies (Audit & Auditors) Rules, 2014. In rule 11, after clause (c), the following clause shall be inserted, namely:-

​“(d) whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th  December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.”

6. Companies (Registration of Charges) Amendment Rules, 2017

The Central Government vide its notification no. G.S.R. 339(E) dated April 7, 2017 has made the rules further to amend the Companies (Registration of Charges) Rules, 2014, namely Companies (Registration of Charges) Amendment Rules, 2017.

Following forms have been amended and substituted with new formats respectively:

  • CHG-1 - Application for registration of creation, modification of charge (other than those related to debentures) including particulars of modification of charge by Asset Reconstruction Company in terms of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI)
  • CHG-4 - Particulars for satisfaction of charge thereof
  • CHG-9 - Application for registration of creation or modification of charge for debentures or rectification of particulars filed in respect of creation or modification of charge for d

7. Companies (Compromise, Arrangements and Amalgamations) Amendment Rules 2017

In exercise of the powers conferred by section 234 read with section 469 of the Companies Act, 2013, the Central Government in consultation with the Reserve Bank of India, hereby makes the following rules to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, namely

  1. These rules may be called the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2017.
  2. They shall come into force on the date of their publication in the Official Gazette.
  3. In the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, (hereinafter referred to as the principal rules) after rule 25 the following rule shall be inserted, namely:-

     “25A. Merger or amalgamation of a foreign company with a Company and vice versa. –

    (1) A foreign company incorporated outside India may merge with an Indian company after obtaining prior approval of Reserve Bank of India and after complying with the provisions of sections 230 to 232 of the Act and these rules.

    (2) (a) A company may merge with a foreign company incorporated in any of the jurisdictions specified in Annexure B after obtaining prior approval of the Reserve Bank of India and after complying with provisions of sections 230 to 232 of the Act and these rules.

    (b) The transferee company shall ensure that valuation is conducted by valuers who are members of a recognised professional body in the jurisdiction of the transferee company and further that such valuation is in accordance with internationally accepted principles on accounting and valuation. A declaration to this effect shall be attached with the application made to Reserve Bank of India for obtaining its approval under clause (a) of this sub-rule.

    (3) The concerned company shall file an application before the Tribunal as per provisions of section 230 to section 232 of the Act and these rules after obtaining approvals specified in sub-rule (1) and sub-rule (2), as the case may be.

    Explanation 1._ For the purposes of this rule the term “company” means a company as defined in clause (20) of section 2 of the Act and the term “foreign company” means a company or body corporate incorporated outside India whether having a place of business in India or not:

    Explanation 2. For the purposes of this rule, it is clarified that no amendment shall be made in this rule without consultation of the Reserve Bank of India.”

  4. In the principal rules after Annexure A the following Annexure shall be inserted namely:-

“Annexure B

Jurisdictions referred to in clause (a) of sub-rule (2) of rule 25A 

Jurisdictions –

(i) whose securities market regulator is a signatory to International Organization of Securities Commission’s Multilateral Memorandum of Understanding (Appendix A Signatories) or a signatory to bilateral Memorandum of Understanding with SEBI, or

(ii) whose central bank is a member of Bank for International Settlements (BIS), and

(iii) a jurisdiction, which is not identified in the public statement of Financial Action Task Force (FATF) as:

(a) a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply; or

(b) a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies.”.

8. Transfer of Shares to IEPF Authority

Pursuant to second proviso to Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 notified on February 28, 2017, where the seven year period provided under sub-section (5) of section 124 is completed during September 7, 2016 to May 31, 2017, the due date for transfer of such shares by companies is May 31, 2017.

The IEPF Authority has decided to open a special demat account with National Securities Depository Limited (NSDL) through a Depository Participant of NSDL

The special demat account will have features and functionality to support IEPF operations using paperless, digital processes and facilitate record keeping of shares transferred to the IEPF Authority to meet the requirements of the Rules. The details of the DEMAT account will be issued in due course.

All companies required to transfer shares to IEPF Authority under the aforesaid Rules shall transfer such shares, whether held in dematerialised form or physical form,to the demat account of IEPF Authority by way of corporate action. Information related to the shareholders whose shares are being transferred to IEPF’s demat account shall be provided to NSDL in prescribed format.

NSDL will prescribe the file formats and operational procedures for transfer of shares to special demat account of the IEPF Authority by April 30th 2017 and May 15th 2017 respectively.

The charges to be levied by NSDL to the companies towards upload and maintenance of records pertaining to shares transferred to the special demat account of the IEPF Authority are as under:

Transaction Feesat the time of effecting transfer of shares to Demat Account of IEPF Authority: Rs. 10/- per record subject to minimum of Rs. 500/-.

Annual Maintenance Fees: Rs. 11/- per record subject to minimum based on paid-up capital of the company as mentioned below:

Nominal Value of Admitted Securities (Rs.) Annual Custody Fee payable by Company (Rs.)
Upto Rs.5 crore 2,700
Above Rs. 5 crore and upto Rs.10 crore 6,750
Above. Rs.10 crore and upto Rs.20 crore 13,500
Above Rs.20 crore 22,500

These charges are in addition to the fees that Depositories levy on the companies for corporate actions.

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  • By Revanth Gopidi  0 Comments   

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