March 25, 2021
Summary of the notifications issued by MCA on 24/03/2021
MCA relaxes penal provisions with respect to Unpaid Dividend Account and Valuation by a Registered Valuer as per the Companies Amendment Act, 2020
Through this notification, MCA has relaxed penal provisions under the Companies Act, 2013 with respect to contravention of the provisions of-
1. Section 124 – dealing with transfer of money to Unpaid Dividend Account and 2. Section 247 – dealing with valuation undertaken by the Registered Valuer
MCA amends Companies(Accounts) Rules, 2014 with effect from 01/04/2021
Key highlights of the amendment are as follows-
1. Where the books of account and other relevant books and papers are maintained in electronic mode using an accounting software, the Company shall ensure that for the financial year commencing on or after the 1st day of April, 2021, such software has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled
2. Board’s report to include the following information-
a. the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year.
b. the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.
MCA amends Companies(Audit and Auditors) Rules, 2014 with effect from 01/04/2021
Through this amendment, MCA now requires auditors report to include declaration by the auditors regarding:
– validation of the management representation on investment/lending/receipt of funds to or from any other person(s) or entity(ies), including foreign entities (“Intermediaries”) in the manner as specified in the said notification
– compliance with Section 123 of the Companies Act, 2013 with respect to declaration and payment of dividend during the year
– availability of the Audit Trail recording feature in the accounting software, if any, used by the Company to maintain its books of accounts and affirm that the same has been operated throughout the year for all transactions recorded in the software and the audit trail feature has not been tampered with and the audit trail has been preserved by the company as per the statutory requirements for record retention
The amendment has also dispensed with the provision to include the compliance with respect to disclosure of holdings and dealings in Specified Bank Notes during the demonetization period indicated in the said Rules.
MCA amends Schedule III of the Companies Act, 2013 with effect from 01/04/2021
Through this notification, MCA has amended the formats of Balance Sheet and Profit and Loss statements as prescribed in the Schedule III under the Companies Act, 2013, requiring additional and detailed disclosures of several new items under different heads. Important highlights of the amendment are as follows:
A. Some of the key items to be disclosed in the Notes to Accounts under the Balance Sheet section in the formats prescribed therein:
– shareholding pattern of the promoters for each class of shares.
– Trade Payables ageing schedule to MSME and others, including disputed amounts, if any, classified under ‘Less than 1 year/1-2 years/2-3 years/More than 3 years’
– Trade Receivables Ageing Schedule in the prescribed format classifying them for outstanding periods falling under ‘Less than 6 months/6 months-1 year/1-2 years/2-3 years/more than 3 years’
– Disclose the details of the fund usage where the borrowings from banks and financial institutions haven’t been used for the specific purpose for which it was taken at the balance sheet date
– Details of all the immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the company in format given below and where such immovable property is jointly held with others to be given to the extent of the company’s share.
– Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person, that are:
(a) repayable on demand or
(b) without specifying any terms or period of repayment
– Capital Work In Progress(CWIP) Ageing Schedule and CWIP Completion Schedule, whose completion is overdue or has exceeded its cost compared to its original plan.
– Intangible Assets under Development and Intangible assets under development completion schedule, whose completion is overdue or has exceeded its cost compared to its original plan. – Details of proceedings against the Company on account on Benami Property held
– Prescribed details if the Company is declared Wilful Defaulter by RBI
– Transactional relationship with Struck Off Companies, if any
B. Some of the Key additional Information to be disclosed in the Profit and Loss section: Companies to disclose details of CSR and trading/investments in Crypto Currency or Virtual Currency, if any
These notifications are available on our free to use website www.ca2013.com for your quick reference.