(a) Every entity, covered under sub-rule (1) of Rule 4 of Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, who intends to undertake any CSR activity, shall register itself with the Central Government by filing the form CSR-1 electronically with the Registrar, with effect from the 01st day of April 2021.
Provided that the provisions of this sub-rule shall not affect the CSR projects or programmes approved prior to the 01st day of April 2021.
(b) Form CSR-1 shall be signed and submitted electronically by the entity and shall be verified digitally by a Chartered Accountant in practice or a Company Secretary in practice or a Cost Accountant in practice.
(c) On the submission of the Form CSR-1 on the portal, a unique CSR Registration Number shall be generated by the system
2) Definition of Small Company.
The definition of small company will be revised :
“Small company means a company whose Paid up capital and Turnover shall not exceed rupees 2 crores and rupees 20 crores respectively.”
“12A.Period for notice under sub-clause (i) of clause (a) of sub-section (1) of sec 62.–
For the purposes of sub-clause (i) of clause (a) of sub-section (1) of section 62, the time period within which the offer shall be made for acceptance shall be not less than seven days from the date of offer.”.
4) Companies not to be considered as Listed Companies.
In the Companies (Specification of definitions details) Rules, 2014, after rule 2, the following rule shall be inserted, namely:-
“2A. Companies not to be considered as listed companies:-
For the purposes of the proviso to clause (52) of section 2 of the Act, the following classes of companies shall not be considered as listed companies, namely:-
(a) Public companies which have not listed their equity shares on a recognized stock exchange but have listed their –
(i) non-convertible debt securities issued on private placement basis in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008; or
(ii) non-convertible redeemable preference shares issued on private placement basis in terms of SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013; or (iii) both categories of (i) and (ii)
(b) Private companies which have listed their non-convertible debt securities on private placement basis on a recognized stock exchange in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008;
(c) Public companies which have not listed their equity shares on a recognized stock exchange but whose equity shares are listed on a stock exchange in a jurisdiction as specified in sub-section (3) of section 23 of the Act.”
In the Companies (Management and Administration) Rules, 2014,(herein after referred as the said rules), in rule 11, for sub-rule (1), the following sub-rule shall be substituted, namely:- “(1) Every company shall file its annual return in Form No.MGT-7 except One Person Company (OPC) and Small Company. One Person Company and Small Company shall file annual return from the financial year 2020-2021 onwards in Form No.MGT-7A”;
6) Amendments in Schedule V; Limits prescribed for remuneration payable to ‘other directors’ in case of no profits.
In Schedule V of the Companies Act, 2013, in PART II, under the heading
(a) in Section I, in the first para, after the words ―managerial person or persons, the words or other director or directors shall be inserted;
(b) in Section II
(i) after the words ―”managerial person”, wherever occurred, the words ―”or other director” shall be inserted
(ii) for Table (A):, the following shall be substituted, namely:-
| Sl. No. | Where the effective capital (in rupees) | Limit of yearly remuneration payable shall not exceed (in Rupess) in case of a managerial person | Limit of yearly remuneration payable shall not exceed (in rupees) in case of other director |
| (i) | Negative or less than 5 crores | 60 lakhs | 12 Lakhs |
| (ii) | 5 crores and above but less than 100 crores | 84 lakhs | 17 Lakhs |
| (iii) | 100 crores and above but less than 250 crores | 120 lakhs | 24 Lakhs |
| (iv) | 250 crores and above. | 120 lakhs plus 0.01% of the effective capital in excess of Rs.250 crores | 24 Lakhs plus 0.01% of the effective capital in excess of Rs.250 crores |
Following explanation shall be inserted at the end, namely:-
“Explanation.– For the purposes of Section I, Section II and Section III, the term ”or other director“ shall mean a non-executive director or an independent director”.
7) Companies to use accounting software with audit trail of each transaction.*
Every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
*This amendment is effective from 01 st April 2022
8) Scope of reporting by Auditors in Audit report broadened.
The scope of reporting has been broadened by inserting the clause which defines ‘Other Matters to be included in the Audit Report’.
As per the amendment following Additional Disclosures are also required:
(a) Reporting regarding advances loans & Investment other than disclosed in notes to accounts
(b) Receiving of funds for further lending or investing other than disclosed in notes to accounts.
(c) Comment upon above 2 points whether representation made contains any material
(d) Dividend declared or paid is in compliance of section 123 of CA,2013.
(e) Comment of use of Accounting Software having Audit Trail & other rules
9) Additional disclosures to be made in Balance Sheet and P/L A/c.
MCA vide Notification dated March 24, 2021 amended the Schedule III to the Companies Act, 2013 to incorporate the general instructions for preparation of the balance sheet and the profit and loss account of an Ind AS compliant company along with additional disclosure requirements.
a) Disclosure of Shareholding of Promoters
b) Trade Payables ageing schedule with age 1 year, 1-2 year, 2-3 year & More than 3 years
c) Reconciliation of the gross and net carrying amounts of each class of assets
d) Trade Receivables ageing schedule with age 1 year, 1-2 year, 2-3 year & More than 3 years
e) Detailed disclosure regarding title deeds of Immovable Property not held in name of the
f) Disclosure regarding revaluation & CWIP
g) Loans or Advances granted to promoters, directors, KMPs and the related parties
h) Details of Benami Property held
i) Reconciliation and reasons of material discrepancies, in quarterly statements submitted to bank and books of
j) Disclosure where a company is a declared wilful defaulter by any bank or financial Institution
k) Relationship with Struck off Companies
l) Pending registration of charges or satisfaction with Registrar of Companies
m) Compliance with number of layers of companies
n) Disclosure of 11 Ratios
o) Compliance with approved Scheme(s) of Arrangements
p) Utilisation of Borrowed funds and share premium
q) Details of transaction not recorded in the books that has been surrendered or disclosed as income in the tax assessments
r) Disclosure regarding Corporate Social Responsibility
Details of Crypto Currency or Virtual Currency