Regulatory updates for the Month of April 2023

“Stay informed with the latest regulatory updates for April 2023 in Company Law, Securities Law, POSH, RBI, and notable case law under the Companies Act, 2013. Key highlights, amendments, and due dates covered for a comprehensive overview.”

Company Law

1. Penalty Imposed on the Company and its Directors for Non- Filing of MGT -14

• The Adjudication notices issued to Saiyoga Nidhi limited and its Managing director for non-filling of MGT-14 for Board Resolution passed for the approval of Financial Statements & Boards report for the financial year ending 03.2020 & 31.03.2021.
• It was adjudged that the non-filing of documents is not only a violation of the provisions of the Act but it indicates the denial of information to the interested

2. MCA notifies the Companies (Indian Accounting Standards) Amendment Rules, 2023

• As per the amended rules, a new para 39AG has been inserted in Ind AS 101, which states that ‘deferred tax related to assets and liabilities arising from a single transaction’ shall apply for annual reporting periods beginning on or after 04.23.
• Further para B14 has also been inserted which provides ‘deferred tax related to leases and decommissioning, restoration and similar liabilities.
• Various other amendments have also been These rules shall be applicable from the financial year beginning on or after 01.04.23
• Companies (Indian Accounting Standards) Amendment Rules, 2023

3. NFRA Highlights Non-Compliance Instances with Ind-AS w.r.t. Measurement of Revenue Recognition & Trade Receivables

• NFRA issues circular highlighting instances of non-compliance with Indian Accounting Standards (Ind ASs) on Accounting Policies for measurement of Revenue from Contracts with Customers (Ind AS 115) and Trade Receivables (Ind AS 109) for the urgent attention of the Company Management/Audit Committees and the Statutory Auditors
• NFRA Letter regarding instances of non compliances with Ind As

4. COMPANIES (REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES) AMENDMENT RULES, 2023

• Center for processing Accelerated Corporate Exit (CPACE) set up for faster liquidation of
• Now the application in Form STK-2 shall not be accompanied by a copy of the special resolution duly e. consent of seventy-five per cent of members.
• Companies (Removal of Names of Companies from Register of Companies) Amendment Rules, 2023

Securities Law

1. Key Highlights from the March 2023 SEBI Board Meeting

• Business Responsibility and Sustainability Report (BRSR) Core introduced for top 150 companies by 2024 likely to rise to top 1000 by 2027.
• BRSR Core shall mention KPIs based on reasonable assurance
• Top 250 listed entities must also make ESG disclosures for the complete value chain that the company is operating in.
• SEBI approved the ASBA framework for secondary markets.
• SEBI proposed that key material events be disclosed by the company without too much of a time lag. Board meeting decisions must be communicated within 30 minutes of the conclusion of the meeting and other items in 12 hours & the top 250 companies will have to either verify and confirm or deny any market rumour pertaining to the company.
• Time period of 3 months for filling up the vacancy of Directors, Compliance Officer, CEO and CFO.
• 15 days provided for newly listed entities for disclosure of first financial results
• Changes to SEBI ICDR to ensure transparency and streamlining process
• Highlights of SEBI Board meeting as on 29-March, 2023

2. NSE has prescribed New Criteria for Migration from SME platform to Main Board w.e.f 20th April 2023

• Minimum period to be listed on SME Board increased to 3 Years from 2 years for
• Paid Up Capital should be above 10 crore and below 25 Crore & the networth of the company should be at least 50
• Company should have positive Cash Accruals in Previous Three Financial Years and Positive Profit After Tax in immediately preceding Financial
• Total number of public shareholders on the last day of preceding quarter from date of application should be at least
• The company has Investor Grievance in place, months cooling period post any surveillance action, Company is not referred to NCLT, BIFR or IBC.

POSH

1. Seniority of the Chairperson of the Internal Compliants Committee (ICC)

• Composition of ICC mandates that presiding officer shall be a woman employed at a senior
• It is clarified in Allahabad High Court in the case of Shobha Goswami v State of Rajasthan that “lady member” of ICC need not be senior in rank to the officer against whom the allegation of sexual harassment

RBI Update

1. RBI Simplifies the Application Process for the Registration of Core Investment Companies (CIC)

• CICs are NBFCs that invest in shares for the purpose of owning a stake in a company and not for trading
• Simplification of application form to make it structured and aligned with the extant CIC regulations.
• Number of documents to be furnished along with the application form has been reduced to 18 from the existing set of 52
• RBI simplifies application process for registration of Core Investment Companies

CASE Law under Companies Act, 2013

1. Calcutta HC Imposes Rs 25,000 Cost on Registrar of Companies for not taking action since 2021

• Adventz Finance Pvt Ltd had filed the petition against the RoC for failing to consider its submissions and re-submissions.
• HC stated that “it is apparent that the ROC has been sitting on the same since 2021 without taking any steps thereto, Since there is a palpable and unexplained delay on the part of the RoC and therefore the RoC shall pay costs of Rs25,000 to the petitioner within a fortnight from date. “
• Further the bench allowed Adventz Finance to re-submit the e-form with the particulars within a week & asked the RoC to register the re-submission within four weeks.
• Penalty was imposed under Rule 10 of the Companies (Registration offices and fees) Rules in which 30 days is provided to ROC to respond to an eform.

WPA 306 of 2023  Date: 3 April 2023

Due Dates under various laws

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Disclaimer: This newsletter is a compilation of updates prepared and circulated from the academic point of view only and are not intended to constitute professional advice on any matter. The views and opinions expressed in this newsletter are those of the author of this document and are based on the internal research done by the Author.