Relaxation under different statues during pandemic of COVID-19

We all are aware (or may be some of us are already fed up) with the news of CoVID-19 which is pandemic and led to thousands death tolls around world with Italy the most affected country. Likewise CoVID-19 has reached in India through residents who have visited and/or returned from affected countries.

In India, the death toll due to the coronavirus pandemic rose to 17 on Friday morning i.e. 27^th march, 2020, even as the country continued to be under a lockdown for the third consecutive day in an attempt to contain the infection. The total number of casualties soared to 724 with 66 of the patients being discharged till now, the Ministry of Health (figures source courtesy Ministry of Health) announced.

Inspite of Lockdown of twenty-one (21) days to combat this situation, it would have been worse situation without the lockdown.

With every aspect, life being is affected in every corner of world as well as slowdown of economy on international level, the Indian Government through various departments taking tons of actions to serve the citizens of India and help combat this life-threatening situation for safety of every citizen of India.

As we already know, due to lockdown in India working of every sector has taken halt, each of departments, in order to help the owners/ companies/ LLPs and other body corporates to cop such circumstances easefully notifying extentions, relaxations, etc. under Ministry of Corporate Affairs, Income Tax, Goods and Service Tax (GST) and others from mandatory compliances and other regulatory disclosures. I have tried my level best to compile the major extensions, relaxations notified upto 25^th March, 2020 for your information and quick view: –

Ministry of corporate affairs

A) General Circular No. 11/2020 dated 24^th march, 2020 released by Ministry of Corporate Affairs implemented, which states following educe their compliance burden and other risks: –

• No additional fees shall be charged for late filing during a moratorium period from 01sr April to 30th September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing noncompliant companies/ LLPs to make a ‘fresh start’. The Circulars specifying detailed requirements in this regard are being issued separately.
• The mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA13) (120 days) stands extended by a period of 60 days till next two quarters i.e., till 30th September. Accordingly, as one time relaxation the gap between two consecutive meetings of the Board may extend to 180 days till the next two quarters, instead of 120 days as required in the CA-13.
• The Companies (Auditor’s Report) Order,2020 shall be made applicable from the financial year 2O2O-2O21 instead of being applicable from the financial year 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the financial Year 2019-20. A separate notification has been issued for this purpose.
• Independent Directors (lDs) are required to hold at least one meeting without the attendance of Non independent directors and members of management. For the financial year 2019-20, if the lDs of a company have not been able to hold such a meeting, the same shall not be viewed as a violation. The lDs, however, may share their views amongst themselves through telephone or e-mail or any other mode of communication, if they deem it to be necessary.
• Requirement under section 73(2)(c) of CA-13 to create the deposit repayment reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020 shall be allowed to be complied with till 30th June 2020.
• Requirement of investing or depositing at least 15% of amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, may be complied with till 30th June 2020.
• Newly incorporated companies are required to file a declaration for Commencement of Business within ‘180 days of incorporation under section 10A of the CA-13. An additional period of 180 more days is allowed for this compliance.
• Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the CA-1 3 shall not be treated as a non- compliance for the financial year 2019-20.

B) General Circular No. 10/2020 dated 23^rd March, 2020 for clarification on spending of CSR funds for COVID-19 states that: –

• Spending of Corporate Social Responsibility Funds (CSR) for COVID-19 id eligible for CSR Activity.
• Funds may be spent for various activities related to COVID-19 under the items Nos. (i) and (xii) of schedule VII relating to promotion of health care, including preventive health care and sanitation, and disaster management.

Securities exchange board of India

A) Relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 due to the CoVID -19 virus pandemic vide Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/38 dated 19^th March, 2020 and circular is effective from same date, which states as follows: –

• Regulation 7(3) relating to compliance certificate on share transfer facility whose last date for quarter ended is 30^th April, 2020 but extended till 31^st may, 2020
• Regulation 13(3) relating to Statement of Investor complaints whose last date for quarter ended 21^st April, 2020 but extended till 15^th May, 2020
• Regulation 24A read with circular No CIR/CFD/CMD1/27/2019 dated February 8, 2019 relating to Secretarial Compliance report whose last date for quarter ended 30^th May, 2020 but extended till 30^th June, 2020
• Regulation 27(2) relating to Corporate Governance report whose last date for quarter ended 15^th April, 2020 but extended till 15^th May, 2020
• Regulation 31 relating to Shareholding Pattern whose last date for quarter ended 21^st April, 2020 but extended till 15^th May, 2020
• Regulation 33 relating to Financial Results in case of a) Unaudited quarterly Financial Results whose last date for quarter ended is 15^th May, 2020 but extended till 30^th June, 2020 and b) Audited quarterly Financial Results whose last date for quarter ended 30^th May, 2020 is extended till 0^th June, 2020
• Regulation 17(2) the board of directors and Audit Committee of the listed entity are exempted from observing the maximum stipulated time gap between two meetings for the meetings held or proposed to be held between the period December 1, 2019 and June 30, 2020

 B) Further Relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and certain SEBI Circulars due to the CoVID -19 virus pandemic – In continuation of circular dated 19^th March, 2020 New Circular No.: sebi/covid-19/2020/01 Dated 24.03.2020

Listed entities which have listed their Non-Convertible Debentures (NCDs), Non-Convertible Redeemable Preference Shares (NCRPS), Municipal Debt Securities (MDS) and Commercial Papers (CPs) states as follows:-

(I) Extension of timeline for issuance and filings for issuers who have listed /propose to list their Non-Convertible Debentures (NCDs) / Non-Convertible Redeemable Preference Shares (NCRPS)/ Commercial Paper(s)

• SEBI vide its circular no. CIR/IMD/DF/18/2013 dated October 29, 2013 provides that companies proposing to make public issue of debt securities are required to give the audited financials in the offer document, which are not older than 6 months from the date of prospectus. However compliant listed entities are allowed to disclose unaudited financials with limited review report, instead of audited financials, for the stub period.
• Similarly, for issuers, which intend to list their CPs, SEBI has vide circular SEBI/HO/DDHS/CIR/P/2019/115 dated October 22, 2019 and SEBI/HO/DDHS/CIR/P/2019/167 dated December 24, 2019 provided that issuer has to submit its latest audited financials which should not be older than six month, however are allowed to file unaudited financial with limited review for the stub period in the current financial year.

(II) Extension of timeline for filings under SEBI (LODR) Regulation 2015

• Large Corporate Initial Disclosure and Annual Disclosure (SEBI Circular HO/DDHS/CIR/P/2 018/144 dated November 26, 2018) which is due to be filed before 30^th April, 2020 for Initial Disclosure – within 30 days from the beginning of Financial year is extended till 30^th June, 2020 and which is due to be filed for 15^th may, 2020 in case of Annual Disclosure – within 45 days from the end of Financial year is extended till 30^th June, 2020.
• Listed entities whose Non-Convertible Debentures (NCDs) / Non-Convertible Redeemable Preference Shares (NCRPS) are listed, following extension is granted: –

1. Regulation 52 (1) and (2) relating to Financial Results in case of Unaudited Financial Results whose last date for filing is 45 days from the end of the Half Year is extended by 30^th June, 2020 and in case of Audited Financial Results whose last date for filing is 60 days from the end of the Half Year is extended by 30^th June, 2020
2. Common obligations prescribed under Chapter-III of SEBI (LODR) Regulations, 2015 as extended by circular dated 19^th March, 2020.

• Entity whose Commercial Papers are listed; financial results date is extended by 30^th June, 2020 in case of Unaudited Financial Results as well as Audited Financial Results.

(III) Extension of timeline for filings prescribed for Issuers of Municipal Debt Securities

• Investor Grievance Report as per Municipal Bond which should be filled within 30 working days from end of Half Year is extended till 30^th June, 2020
• Financial Results which should be filled within 60 days from end of financial Year is extended till 30^th June, 2020
• Accounts maintained by Issuers under ILDM Regulations which should be filled within 45 days is extended till 30^th June, 2020

C) Relaxation from compliance to REITs and InvITs due to the CoVID -19 virus pandemic dated 24th March, 2020 dated 24^th March, 2020 states that: –

• All the regulatory filings and compliances for REIT and InvIT for the period ending March 31, 2020 is extended by one (1) month over and above the timelines prescribed under SEBI (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations) and SEBI (Real estate Investment Trusts) Regulations, 2014 (REIT Regulations) and circulars issued thereunder.
• Will be effective from immediate effect.

Also Read following SEBI Circulars –

Disclaimer:- The above article is compilation of Circulars which are issued by Departments under the COVID-19 pandemic for relaxation of compliances or regulatory disclosures to Under no circumstance, the author shall not liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.

(The Author is Corporate Consultant and provides varied array of services including Start-ups mentor, Secretarial, Legal, Trademark, taxation, Audit, GST, Book keeping and other ancillary advisory service in Delhi, Chandigarh as well as The National Capital Region (NCR) and can be contacted through email id:- [email protected] and Contact Number: 91-8178515005)