The “National Financial Reporting Authority” constituted as per sub-section (1) of section 132 of Companies Act, 2013 to provide for matters relating to accounting and auditing standards under the Companies Act, 2013.

BACKGROUND

The National Financial Reporting Authority Rules, 2018 published vide Ministry of Corporate Affairs Gazattee Notification No. G.S.R. 1111(E) dated 13th November, 2018.

As per Rules 3(1) of – following classes of companies will be governed by NFRA Rules:

(a) Listed companies;

(b) Unlisted companies with paid up capital of INR 500 CR or more / Annual Turnover of INR 1000 CR or more / outstanding loans, debentures and deposit of more than INR 500 Cr or more, as on 31st March of immediate preceding FY

(c) Insurance Companies, banking companies, companies with business of generation or supply of electricity, companies governed with special act or companies incorporated in reference with clauses (b) to (f) of Section 1(4)

(d) Any reference made by Central Government to NFRA authority

(e) Body corporate registered outside India, which is subsidiary or associate company of companies / body corporate registered in India, with income / Networth of subsidiary or associate company is +20% of consolidated income / consolidated Networth (body corporate as defined in this clause are required to file Form NFRA – 1)

Rule 3(2) – Following companies to file Form NFRA – 1 (details of auditor) within 30 days from rules been notified:

(f) Private companies

(g) Unlisted companies which are not covered under Rule 3(1)

(h) Any other companies / body corporate which are not governed under NFRA authority and NFRA Rules

Rule 3(3) – Following body corporate to file Form NFRA – 1 on appointment of auditor within 15 days:

  • Body corporate other than companies as defined under Section 2(20) to intimate appointment of auditor within 15 days in Form NFRA -1

Please note that as per Rule 3(2), companies from (a) to (d) are not required to file form NFRA – 1.

NFRA Form-1 filing Before 31st July, 2019

In line with the above background, the NFRA Website is active and public can access the website and download Form NFRA-1 on https://nfra.gov.in/.

Further, vide notification no. NF-11/1/2019-O/0 Secy-NFRA dated 1st July , 2019, notified the last date of filling up Form NFRA-1.

The Entities as stated in 3(2) and 3(3) of the Gazette Notification dated 13th November, 2018 are required to inform the details of appointment of their auditor to the Authority in Form NFRA-1.

Subsequently, the time limit for filing NFRA-1 will be 30 days from deployment of Form on the Website of NFRA https://nfra.gov.in/.

In connection to the above, it is intimated that Form NFRA-1 is available on https://nfra.gov.in/ and the last date of filing the same by Entities concerned is 31st July, 2019.

(The author is Practising Company Secretary and can be reached at 8375877464 or E-mail msdassociates19@gmail.com)

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16 Comments

  1. Ranjith says:

    Today I saw FAQ clarifying who needs to file Form NFRA-1.

    https://taxguru.in/corporate-law/faqs-filing-nfra-1-form.html

    But the clarification to Q1 chart and response to Q12 is differing. The chart is saying something and the response is referring rule 3(2) again which needs clarification.

    In the Query 12, it is mentioned “one time RETURN” and in the response it is written “refer to the clarifications at S.N. 1, 8 and Clause 3(2) and 3(3) of NFRA Rule 2018. NFRA – 1 form need to be filed by the Entity accordingly.”

    What type of Query, what type of chart, what type of response???

    Can a clarification given on a site which does not have any number, date, signing is legally valid??

    Can a clarification which is on plain paper override the provisions of Act and Rules?

    Can a clarification given as above valid in the court of Law?

  2. divyabajpai says:

    Dear Readers

    I shared the Information based on Notification and Circulars . Please apply due diligence before acting on it.

    While doing new user registration , we all facing issue under Step 13 as per bNFRA user Registration Instructions available on the NFRA portal.

    As selection of rule 3(c),3(d), 3(e) is available but if we all refer to the rules references of rules are given as Rule 3(1) (a) , 3(1) (b), 3(1) (c) , 3(1) (d),3 (1) (e) apart from Rule 3(2) and Rule 3(3).

    We all need clarification from NFRA/MCA before taking any further action on this.

    Thanks

    1. Lucky Nanwani says:

      Dear Mayur,
      Before going for English version, please read the hindi version as below:
      राष्ट्रिय वितिय रिपोर्टिंग प्राधिकरण नियम 2018
      नियम 3(2)
      इन नियमो द्वारा शाषीत कीसी कंपनी से भीन्न प्रत्येक विध्यमान कॉर्पोरेट निकाय द्वारा इन नियमो के प्रारम्भ के तीस दिनो के भीतर प्राधिकारण को प्रारूप एनएफ़आरए – 1 मैं, इन नियमो की प्रारम्भ की तारीख से लेखा परीक्षक के ब्योरे दिये जाएंगे |

      It is Clear that the NFRA-1 is to be filed by a Body Corporate (Excluding Companies) Governed by these rules. Therefore, not all the Private Companies are required to file the form.

      In Nutshell, Every existing body corporate governed under Rule 3(1)(c), (d) & (e) of NFRA Rules. (Excluding Companies as defined under Sub-section (20) of Section 2 of the Companies Act, 2013 (the Act) has to file the Form NFRA-1.

    2. divyabajpai says:

      Hello

      There is still ambiguity in thses rules.

      We all need clarifiaction on this from NFRA/MCA.

      I just shared my knowledge based on Notifiactions .

      Other Views are also Welcome.

      Thanks

      1. ramesh says:

        The interpretation stated in your article is completely wrong. please refer to interpretation of body corporate u/s 2(11) of CA’13. There is no ambiguity in the circular. The confusion is being created due to common interpretation and usage of word body corporate and company- interchangeably. Please rectify the article.

        1. divyabajpai says:

          Dear Reader

          THE WORD ARE NOT USED INTERCHANGEABLY.

          PLEASE READ CAREFULLY

          LAW IS MATTER OF INTERPRETATION.

          FOR YOUR REFERENCE
          Please Note that as per the MCA circular dated 13.12.2018, Rule 3(2) of the NFRA Rules excludes companies as defined under section 2 (20) of the Companies Act, 2013..WHICH I ALREADY CLARIFIED IN COMMENT SECTION.

          Your views are welcome sir please share one article for us so that we get clear understanding on the subject.

          Thanks

          Link of MCA Circulars: https://taxguru.in/company-law/form-nfra-1-extension-date-filing.html

  3. CA Lucky Nanwani says:

    Dear Divya,
    It seems that there is an ambiguity in the Rule 3(2). On a plain reading of the provisions of Rule 3 (2) of the NFRA Rules, it is evident that there is certainly a drafting error, as the provisions requires the companies which are not covered by the NFRA Rules, to file form NFRA-1, intimating about the details of the auditors which is completely vague.

    The provisions are as follows:
    “(2) Every existing body corporate other than a company governed by these rules, shall inform the Authority within thirty days of the commencement of these rules, in Form NFRA-1, the particulars of the auditor as on the date of commencement of these rules.”

    Quite likely, corporate professionals across the country will be confused whether these Rules require all companies, big and small, to file the form about their auditor details, one time and periodic. However, this is NOT the intent of the Rules.

    Rule 3 (1) delimits the scope of the Rules – only certain companies and bodies corporate are covered by the Rules. Of these “bodies corporate and companies governed by the Rules”, those that are not companies, will have to file the form NFRA-1, on one-time basis under Rule 3 (2), and every time there is a change, under Rule 3 (3).

    Therefore, considering the intent of the law, the provisions, should rather be read in the following way:
    (2) Every existing body corporate, other than a company, governed by these rules, shall inform the Authority within thirty days of the commencement of these rules, in Form NFRA-1, the particulars of the auditor as on the date of commencement of these rules.

      1. divyabajpai says:

        Rules not containing Rule 3(c) , (d), (e).

        Rules contains 3 (1) (c), 3 (1) (d) , 3 (1) (e).

        Further,I am also unable to do so as per the notifications of 1st July, 2019 filing is to be done by 3(2) and 3(3)

        I just shared my interpretation .

        Other Interpretations are also welcome

        You all do due diligence before acting upon this.

        Thanks

    1. divyabajpai says:

      Hello

      There is still ambiguity in thses rules.

      We all need clarifiaction on this from NFRA/MCA.

      I just shared my knowledge based on Notifiactions .

      Other Views are also Welcome.

      Thanks

  4. divyabajpai says:

    Dear Readers,

    All Companies or Body Corporate falling under Rule 3(2), 3(3), and 3(1)(e) of National Financial Reporting Authority Rules, 2018 are required to file NFRA Form-1.

    1. CA MAYUR says:

      Rule 3(2) say as under:-
      Every existing body corporate other than a company governed by these rules, shall inform the Authority within thirty days
      of the commencement of these rules, in Form NFRA-1, the particulars of the auditor as on the date of commencement of these
      rules.

      Does it means that every body corporate is required to file it.

      1. divyabajpai says:

        Hello

        There is still ambiguity in thses rules.

        We all need clarifiaction on this from NFRA/MCA.

        I just shared my knowledge based on Notifiactions .

        Other Views are also Welcome.

        Thanks

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