Regulatory updates

Regulatory updates

Update from MCA

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Rule 12 of the Companies (Accounts) Rules, 2014 inter alia prescribes the forms for filing of financial statements and fees to be paid thereon. As per sub-rules (1) and (1A) of rule 12, companies and Non-Banking Financial Companies (NBFCs) are required to file their standalone and consolidated financial statements with the registrar along with stipulated forms3.

On 11 February 2022, MCA issued the Companies (Accounts) Amendment Rules, 2022 which amended rule 12 of the Companies (Accounts) Rules, 2014.

A new sub-rule (1B) has been inserted which requires every company covered under the provisions of section 135(1) of the Companies Act, 20134 to furnish a report on Corporate Social Responsibility in Form CSR-2 to the Registrar for the preceding financial year (2020-2021) and onwards as an addendum to Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be.

Form CSR-2 for the preceding financial year (FY2020- 2021) would be filed separately on or before 31 March 2022, after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be.

MCA has specified the format of the report on CSR in the notification issued

  1. Companies are required to file their standalone and consolidated financial statements along with forms AOC-4 and AOC-4 CFS respectively. NBFCs that are required to comply with Ind AS should file their standalone and consolidated financial statements along with forms AOC-4 NBFC (Ind AS) and AOC-4 CFS NBFC (Ind AS) respectively.
  2. As per section 135(1) of the Companies Act, 2013, every company having
    • Net worth of INR500 crore or more, or
    • Turnover of INR1,000 crore or more or
    • A net profit of INR5 crore or more
    during the immediately preceding financial year is required to constitute a Corporate Social Responsibility Committee of the Board consisting of three or more Directors, out of which at least one director shall be an independent director.

To access the text of MCA notification, please click here

Action points for auditors

Previously, there was no form prescribed to furnish a report on CSR. Earlier, details of CSR committee, the CSR policy and other prescribed matters were required to be part of the Board of Directors’ Report. While the auditors do not have any reporting obligations on this form, they should engage with clients and make them aware of the new norms.

MCA received various requests from stakeholders regarding relaxation of levy of additional fees for annual financial statements/return filings required to be done for the financial year ended 31 March 2021. In this view, MCA has decided not to charge additional fees for filing of certain forms for financial year ended 31 March 2021 as below:

  • Upto 15 March 2022: for filing of e-forms AOC-4, AOC-4 (CFS), AOC-4 XBRL and non-XBRL and
  • Upto 31 March 2022: for filing forms MGT 7/MGT-7A

During the said period, only normal fees would be payable

To access the text of MCA circular, please click here

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