MANDATORY DISCLOSURE FOR DEPOSITS/EXEMPTED DEPOSITS

MANDATORY DISCLOSURE FOR DEPOSITS/EXEMPTED DEPOSITS

The Companies (Acceptance of Deposits) Amendment Rules, 2019

Ø  Legal Framework:

The Ministry of Corporate Affairs (“MCA”) has notified The Companies (Acceptance of Deposits) Amendments Rules, 2019 w.e.f 22.01.2019 has amended Rule 16 and inserted Rule 16A in the Companies (Acceptance of Deposits) Rules, 2014.

By virtue of such amendments, Every Company other than Government Company is required to file a One-Time Return and Yearly Return for Deposits taken by the Company as well as the details of Money or Loan received by the Company not considered as Deposits under Rule 2 (1)(c) of the Companies (Acceptance of Deposits) Rules, 2014.

 Ø  Applicability:

These rules shall apply to ALL THE COMPANIES (Private, Public, OPC, Small Company, etc.) other than Government Companies.

"Government company" means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company;

  

Ø  Compliance to be done:

Every Company other than Government Company is required to file the disclosures in:

    (a)   Initial one time return - Details of all the outstanding receipt of money or loan by a Company but not considered as Deposits for the period 01.04.2014 till 22.01.2019.

     (b)  Yearly Return - Details of all the Deposits (Return of Deposit) received by the Company or particulars of transactions not considered as Deposits or both as on 31^st March of every year duly Audited by the Statutory Auditors of the Company.

 Ø  Time Limit for Filing Return:

(a)     Initial Return – within 90 days from the date of notification i.e. on or before 22.04.2019.

(b)    Yearly Return – On or before 30^th June of every year.

 Ø  Form for Filing Disclosures:

       E-Form DPT 3 – Amended Form is not available on MCA till date.

 Ø  Notes:

·   “DEPOSITS” means Deposits accepted by the Company in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time.

·      “MONEY NOT CONSIDERED AT DEPOSITS” means the receipt of amount or loan received by the Company which is exempted to be considered as Deposit under Rules eg. Loan received from Banks/Financials Institution, Loan received by any other Company, Loans received from a Director of a Company, Loans received from Relative of Director of a Private Company, etc.

·      Both Secured and Unsecured Loans, ECB received by the Company is required to be disclosed in the Form DPT 3.

Author – CS. Kunal Sharma (B.Com, ACS)

Focal Corporate Services P. Ltd, Ahmedabad

Kunal@focalcorporate.com

Disclaimer:

The information contained in this Article is provided for informational and knowledge sharing purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this Article without seeking legal or other professional advice. The entire contents of this Article have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. This is only a knowledge sharing initiative and we does not intend to solicit any business or profession.

MSME DISCLOSURE

The Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019.

Ø  Legal Framework

The Ministry of Micro, Small and Medium Enterprises vide Notification No S. O. 5622(E) dated 02.11.2018 directed that ALL THE COMPANIES registered under the Companies Act, 1956/2013 who get supplies of goods and services from Micro and Small Enterprises and whose payments to such enterprises shall exceeds 45 (forty five days) from the date of deemed acceptance of the goods and services as per the Act shall require to file a half yearly return along with details of Amount of payment due and reason of delay to the Ministry of Corporate Affairs (“MCA”).

Now the MCA has issued Notification No – S. O. 368 (E) dated 22.01.2019 and notify E-Form MSME I for the compliance of the above provisions for filing of One Time (Initial) and Half Yearly return by all the Companies covered under these regulations.

Ø  Applicable to all the “SPECIFIED COMPANIES”:

Specified Companies includes all the Companies registered under the Companies Act, 1956/2013, who:

(a)     Get Supplies of Goods, or

(b)    Services.

From Micro and Small Enterprises (Medium Enterprises has been excluded) and payments to those enterprises exceeds 45 (forty five) days from the date of acceptance of goods and services.

Ø  Compliance to be done:

Every Specified Company has to file with MCA:

(a) Initial One time return – Details of all the outstanding dues to Micro and Small Enterprises as on date of Notification i.e. 22.01.2019.

(b) Half Yearly Return - Details of all the outstanding dues to Micro and Small Enterprises as at end of half year i.e. as on Sept 30/March 31.

Ø  Time Limit for Filing Return:

(a)     Initial Return – within 30 days from the date of notification i.e. on or before 21/02/2019.

(b)    Half Year Return – within 30 days from end of half year (For April – Sept : by 31^st October and for Oct – March : by 30^th April every year)

Ø  Form for filing MSME Return:

E-Form MSME I – Not deployed by MCA till date.

Details required in the E-Form:

(a) Total outstanding amount due as on date of notification of order/half year period.

(b) Financial year pertaining to amount due.

(c) Name of Supplier.

(d) PAN of Supplier.

(e) Amount Due.

(f) Date from which the amount is due.

(g) Reason for delay in payment of amount.

Ø  Important definitions:

(a) “Enterprise” means an industrial undertaking or a business concern or any other establishment, by whatever name called, engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (55 of 1951) or engaged in providing or rendering of any service or services.

Includes Proprietorship, Hindu Undivided Family, Association of persons, Co-Operative Society, Partnership Firm, Company or undertaking, by whatever name called.

(b) “Micro Enterprises” means:

• In case of enterprises engaged in manufacture or production of goods, a micro enterprise, where the investment in plant and machinery does not exceed Rs. 25.00 Lakh;
• In case of enterprises engaged in providing or rendering of services, a micro enterprise, where the investment in equipment does not exceed Rs. 10.00 Lakhs. 

“    (c) Small Enterprises” means:

• In case of enterprises engaged in manufacture or production of goods, a small enterprise, where the investment in plant and machinery is more than Rs. 25.00 Lakhs but does not exceed Rs. 5.00 Crores;
• In case of enterprises engaged in providing or rendering of services, a small enterprise, where the investment in equipment is more than Rs. 10.00 Lakhs but does not exceed Rs. 2.00 Crores.

 (d)  “The day of Acceptance” means,—

• the day of the actual delivery of goods or the rendering of services; or
• where any objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier;

       (e)   “The day of Deemed Acceptance” means, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services.

Author – CS. Kunal Sharma (B.Com, ACS)

Focal Corporate Services P. Ltd, Ahmedabad

Kunal@focalcorporate.com

NATIONAL FINANCIAL REPORTING AUTHORITY RULES, 2018

NATIONAL FINANCIAL REPORTING AUTHORITY RULES, 2018

The National Financial Reporting Authority (NFRA) is a body constituted under the provisions of Section 132 of the Companies Act, 2013. The constitution of this authority is effective from 1^st October 2018.  The Central Government has notified National Financial Reporting Authority Rules, 2018 vide MCA Notification dated 13.11.2018 effective from 14.11.2018.

Ø  Terms of Reference of NFRA:

NFRA Shall:

• Recommend on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or class of companies or their auditors.
• Monitor and enforce the compliance with accounting standards and auditing standards.
• Oversee the quality of service of the professionals associated with ensuring compliance with such standards, and suggest measures required for improvement in quality of service and such other related matters.

Ø  Powers of NFRA:

The National Financial Reporting Authority shall— 

• Power to investigate, either suo moto or on a reference made to it by the Central Government.
• Powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely:— 

(i) Discovery and production of books of account and other documents, at such place and at such time as may be specified by the National Financial Reporting Authority; 
(ii)  Summoning and enforcing the attendance of persons and examining them on oath;

(iii) Inspection of any books, registers and other documents of any person referred to in clause (b) at any place;

(iv) Issuing commissions for examination of witnesses or documents;

In case of Professional misconduct, imposing penalty or debarring the member or the firm or itself from practice as member of the Institute of Chartered Accountant of India for a minimum period of six months or for such higher period not exceeding ten years.

Ø  Classes of Companies governed by the Authority:

The following classes of Company shall be governed by the NFRA Rules:

(a)	Listed Companies	Listed on any Stock Exchange in India or outside India
(b)	Unlisted Public Company	·  Paid Up Share Capital of not less than Rs. 500.00 Crores, or · Annual Turnover of not less than of Rs. 1000.00 Crores or · In aggregate, outstanding loans, debentures and deposits of not less than Rs. 500.00 Crores as on the 31st March of immediately preceding financial Year
(c)	Insurance Companies	--
(d)	Banking Companies	--
(e)	Companies engaged in the generation or supply of electricity	---
(f)	Companies governed by any special Act for the time being in force	--
(g)	Bodies Corporate incorporated by an Act in accordance with clauses (b), (c), (d), (e) and (f) of sub-section (4) of section 1 of the Act	--
(h)	Any Body Corporate or Company or person, or any class of bodies corporate or companies or persons, on a reference made to the Authority by the Central Government in public interest	--
(i)	A Body Corporate incorporated or registered outside India, which is a subsidiary or associate company of any company or body corporate incorporated or registered in India as referred to in clauses (a) to (h), if the income or net worth of such subsidiary or associate company exceeds 20% of the consolidated income or consolidated net worth of such company or the body corporate, as the case may be, referred to in clauses (a) to (h)	--

Ø  Filing of Form NFRA 1:

Every existing body corporate other than a Company governed by these rules, shall inform the authority within 30 days of the commencement of these rules i.e. by 13.12.2018, in Form NFRA-1, the particulars of the auditor as on the date of commencement of these rules.

Every Body corporate, other than a company as defined in clause (20) of section 2, formed in India and governed under this rule shall, within 15 days of appointment of an auditor under sub-section (1) of section 139, inform the Authority in Form NFRA-1, the particulars of the auditor appointed by such body corporate.

(Form NFRA-1 is not available at MCA Website at present)

The term "body corporate" is defined in Section 2(11) of the Companies Act, 2013. This includes a Private Company, Public Company, One person Company, Small company, Limited Liability Partnerships, Foreign Company etc.

“Body corporate” or “corporation” also includes a company incorporated outside India.

However, body corporate does not include—

(i)  a co-operative society registered under any law relating to co-operative societies; and

(ii) any other body corporate (not being a company as defined in the Companies Act 2013), which the Central Government may, by notification, specify in this behalf.)

Ø  Filing of Annual Return by an Auditor:

Every auditor of the companies and body corporate covered by this rules shall file a return with the Authority on or before 30^th April every year in such form as may be specified by the Central Government.

A Company or a body corporate other than a company governed under this rule shall continue to be governed by the Authority for a period of three years after it ceases to be listed or its paid-up capital or turnover or aggregate of loans, debentures and deposits falls below the limit stated therein.

Author: Editorial Team – Focal

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