New Era of Accounting-Transition to Ind as

1. INTRODUCTION

The Indian Accounting Standards (IND AS) are Accounting Standards, harmonized with IFRS (International Financial Reporting Standards)/IAS (International Accounting Standards) to make Financials Accounts and Reports of Indian Companies internationally accessible, acceptable, transparent and comparable.

Indian Companies have a far more global access as compared to earlier days and also because of leveraged policies of Indian Government toward the flow of FDI, a need was felt to introduce globally accepted Accounting Standards (IFRS). Most of the Countries in the world follow or adopt IFRS/IAS issued by International Accounting Standard Board (IASB). In India the Government has decided to converge and not to adopt IFRS. So, the converged IFRS named as IND AS has been notified by Government to implement it in phased manner by Indian Companies.

In this article we shall discuss the implementation of IND AS and its transitional impact on Indian Companies.

2. APPLICATIONS

The Ministry of Corporate affairs (MCA) has notified the Companies (Indian Accounting Standards) Rules, 2015 for implementation of IND AS on Indian Companies in phased manner. Initially in 2015, the applicability of IND AS was on voluntary basis for the accounting period beginning on or after 1^st April, 2015.

Mandatory Application

The Government has notified the mandatory application and preparation of financial statements of certain class of Indian companies, other than Banking Companies, Insurance Companies and NBFC’s, in the phased manner;

Notes:

a. Companies listed on SMEs Exchange are not required to apply IND AS.

b. Once IND AS becomes applicable it becomes applicable in all the subsequent financial statements even though it has been voluntary applied.

c. Net worth shall be checked for past three financial Year and it shall be calculated on standalone accounts of the company.

d. Companies not covered by the above roadmap shall continue to apply Accounting Standards notified in Companies (Accounting Standards) Rules, 2006.

a. IND AS will be applicable for both the consolidated and Individual Financial statements.

b. NBFCs having net worth below Rs. 250 crores shall not apply Ind AS.

c. Adoption of Ind AS is allowed only when required as per the roadmap. Voluntary adoption of Ind AS is not allowed

From the above, it seems that the Government of India is intentionally implementing IFRS converged Ind AS in the phased manner on Indian Corporates to bring the Financial Accounts and reports of the Indian corporates, its subsidiary, Associates and JV more transparent, comparable and globally acceptable. In so far as 39 Ind AS have been notified by the Ministry of Corporate Affairs in consultation with ICAI.

3. CHALLENGES AND OPPORTUNITY

There are a lot of challenges and opportunities in implementing Ind AS on Indian Corporates. There is a saying that “Challenges bring new opportunities” only the need is to understand the challenges and convert them into opportunities”.

The Challenges of implementing Ind AS before the Indian Corporates could be well understood and minimized by knowing the impact of implementing Ind AS.

	Challenges of Ind AS	Opportunity in Ind AS
1.	Shift from conventional cost method of Accounting to Fair Value Method of Accounting.	Fair Value Method of Accounting brings the transparency and true and fair presentation of financial transactions.
2.	Changes in the various laws like The Companies Act, SEBI Regulations, Taxation Laws Banking and Insurance Laws/ Regulations etc.	Better Comparability and enhanced linkage to International trade and Business. It makes Cross Border acquisition and Joint Venture possible.
3.	Lack of Expert and awareness about international practices.	New opportunities for Professionals and Business at large.
4.	Change of Management Reporting System and Internal Control.	Reduction in reporting Cost, especially, in case of multinational companies.
5.	Lack of awareness among users and stakeholders at Large.	New opportunities in service sector and professionals.

4. IMPACT OF IMPLEMENTATION OF IND AS ON INDIAN COMPANIES:

Implementation of Ind AS has changed the base and face of Financial Statements and Reports of Indian Corporates. It has changed not only the manner of presentation of Financials statements but also the principle of recognition and measurement of financial transactions and records. Therefore, we can say the conversion or transition to Ind AS is going to impact in both way qualitatively as well as quantitatively.

In this section we will discuss the impact of Ind AS on Indian Companies and their effect in comparing Indian Accounting Standards (IGAAP). Ind AS are different from existing Indian GAAP framework in three key aspects, i.e. measurement bases, substance over legal form and emphasis on the Balance sheet.

√ TRANSITIONAL PROVISIONS:

IND AS-101 (First Time adoption of Indian Accounting Standards)

In Short	Provisions	Impact
Applicability	This Indian Accounting standard is applied in preparation of first Ind AS financial statements and its interim financial reports for part of the period covered by those financial statements.	An entity adopts Ind AS on its applicability first time with an explicit and unreserved statement of compliance with  Ind As. This is applicable to first time adopter transitioning to Ind AS.
Opening Ind AS Balance Sheet	An entity shall prepare opening Ind AS Balance sheet on  the date of transition of Ind ASs.	It provides a suitable starting point for Accounting in accordance with Indian Accounting Standards (Ind AS) for the Companies in which the Companies (Indian Accounting Standards) Rules, 2015 becomes applicable first time.
Accounting policies	An entity shall use the same accounting policies in its opening Ind AS Balance Sheet and throughout all periods presented in its first Ind AS financial statements. Those accounting policies shall comply with each Ind AS effective at the end of its first Ind AS reporting period.	The accounting policies that an entity uses in its opening Ind AS Balance Sheet may differ from those that it used for the same date using its previous GAAP. The resulting adjustments arise from events and transactions before the date of transition to Ind ASs. Therefore, an entity shall recognize those adjustments directly in retained earnings on  the date of transition to Ind AS in its opening Balance Sheet.
Recognition	An entity shall, in its opening Ind AS Balance Sheet:(a) recognize all assets and liabilities whose recognition is required by Ind AS; (b) not recognize items as assets or liabilities if Ind AS do not permit such recognition; (c) Reclassify items that it recognized in accordance with previous GAAP as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity in accordance with Ind Ass.	This requires to recognize and reclassify items of assets, liabilities and equity as per Ind AS.A comprehensive analysis of existing assets, liabilities and equity is to be made in the financial statement prepared as per IGAAP to recognize and reclassify those items in opening Balance sheet as per Ind AS. It requires to prepare a reconciliation and disclosure of items recognized, derecognized and reclassified.
Measurements	Apply principles set out in Ind AS in measuring all recognized assets and liabilities.	Principles set out in Ind AS would be applied in measuring all recognized assets and liabilities except for the exceptions and exemptions provided for.
Designation of Financial Assets and Liability	Previously Recognized Financial Assets and Liability to be measured or recognized at Fair Value Through profit or Loss	The Entity need to disclose the Fair Value of Financial Assets or Liability at the designated date and the carrying amount and classification of the same in previous financial statements.
Use of Fair Value as deemed Cost	An Entity shall disclose the aggregate of Fair Values and adjustment to the Carrying Amount as per previous GAAP for each line items.	Of;a. Property, Plant and Equipment, an intangible assets or right-of –use assets; b. Investment in subsidiaries, Joint Venture and associates;
Presentation and Disclosures requirement	There is no exemption for presentation and disclosure requirement of other Ind AS and specifies the minimum requirement of presentation.	First Ind AS Financial Statements shall include at least;a. Three Balance Sheet; b. Two Statement of Profit and Loss; c. Two statement of Cash Flows; Two statement of changes in equity; and d. Related Notes e. Including Comparative information for all the statements presented.
Reconciliation and Explanations	An Entity shall explain how the transition from previous GAAP to Ind AS effected its reported Balance Sheet, Financial performance and Cash Flows	To Comply with this requirement, the entity shall prepare;a. Reconciliation of equity as per IGAAP and as per Ind AS on the date of transition as well as at the end of the latest period presented in the entity’s most recent financial statements. b. Reconciliation of comprehensive Income for the most recent annual financial statements. c. Disclosure of material adjustment to cash flows. d. Notes on First Time adoption of Ind AS.
Exceptions to the retrospective application of Ind ASs	An Entity Shall apply principles set out in Ind AS prospectively and not retrospectively while preparing its first Ind AS financial statements	In respect of some specified principles of;a. De-recognition of financial assets and financial liabilities; b. Hedge Accounting; c. Non-controlling Interest; d. Classification and measurement of financial assets; e. Impairment of Financial assets; f. Embedded Derivatives; g. Government Loans
Exemptions to the Applications of Principles set out in Ind ASs	An Entity may use exemptions in respect of principles set out in Ind AS in  its first Ind AS financial statements	In respect of one or more of the followings;a. Exemptions in respect of Business past Combinations; b. Share Based payment transactions; c. Insurance Contracts; d. Deemed Cost; e. Leases; f. Cumulative Translation Difference; g. Investment in Subsidiary, Joint Venture and Associates; h. Assets and Liabilities of Subsidiaries, Joint Venture and Associates. i. Compound Financial Instruments; j. Fair Value measurement of Financial Assets, Financial Liabilities at initial recognition; k. Decommissioning Liabilities included in cost of PPE; l. Financial Assets or intangible assets accounted for in accordance with Ind AS-115; m. Borrowing Costs; n. Joint Arrangements; o. Designation of Contracts to buy –sell non-financial items;

New Format of Financial Statements:

The Ministry of Corporate affairs has inserted Division-II in schedule-III of the Companies Act, 2013 vide notification dated 6^th April, 2016 which specifies minimum presentation and disclosure requirements in the financial statements of Companies complying with Ind AS.

Significant Requirement of Financial Statements complying with IND AS in comparison with financial statements prepared as per Accounting Standards (IGAAP).

Requirement	Previous GAAP	INDIAS
Applicability	Companies not required to comply with IND AS shall prepare its financial statements as per the requirement of  Part-I of the Schedule-III of the Companies Act, 2013.	Companies Preparing Financial Statements in compliance with the Companies (Indian Accounting Standard) Rules, 2015 shall prepare its financial statements as per the requirement of Part-II of the Schedule-III of the Companies Act, 2013.
Components of Financial Statements	> Balance Sheet> Statement of Profit & Loss > Statement of Cash Flow > Notes to Accounts, comprising a summary of significant accounting policies and other explanatory information.	> Balance Sheet> Statement of Profit & Loss along with Statement of Comprehensive Income. > Statement of Change in Equity (SOCE) > Statement of Cash Flow > Notes to Accounts, comprising a summary of significant accounting policies and other explanatory information.
Statement of Comprehensive Income	In IGAAP , there is no concept of other Comprehensive Income but the concept of Exceptional items and Extraordinary Items.	In Ind AS and the applicable Schedule of Financials the concept of Exceptional items and Extraordinary items have been dispensed with and New concept of other Comprehensive Income have been introduced. This will include;a. Items that will not be reclassified to profit and Loss Account. b. Items that will be reclassified to Profit and Loss Account.
Statement of Change in Equity	In IGAAP and applicable standards and schedule, there is no concept of Statement of change in Equity.	In Ind AS and applicable schedule, there is requirement of preparing a Statement of Change in Equity by way of Note to the Balance Sheet. It does have two sections;a. Equity Share Capital; b. Other Equity; It will be further sub classified for i. Share Application Money Pending allotment. ii. Equity Component of Compound Financial Instruments. iii. Reserves and Surplus iv. Items of Other Comprehensive Income v. Money Received against share and warrants. A Reconciliation of each item in the beginning and end of the period is to be disclosed.
Consolidated Financial Statements	“Minority interests” in the Balance sheet within equity shall be presented separately from the equity of the owners of the parent.	Non-controlling interests’ in the Balance Sheet and in the Statement of Changes in Equity,within equity, shall be presented separately from the equity of the ‘owners of the parent’.
Property, Plant and Equipment’s	Classifications are as below:Tangible assets Classification shall be given as: (i) Land; (ii) Buildings; (iii) Plant and Equipment; (iv) Furniture and Fixtures; (v) Vehicles; (vi) Office equipment; (vii) Others (specify nature) Intangible Assets included Goodwill.	Classification shall be given as:(i) Land (ii) Buildings (iii) Plant and Equipment (iv) Furniture and Fixtures (v) Vehicles (vi) Office equipment (vii) Bearer Plants (viii) Others (specify nature) Goodwill is shown separately on the face of the Balance Sheet and remaining shall be shown as Other.
Investments Classification	Under each classification of investments details shall be given of names of bodies corporate indicating separately whether such bodies are> Subsidiaries > Associates > Joint ventures > Controlled special purpose entities The following shall also be disclosed. (a) The basis of valuation of individual investment (b) Aggregate amount of quoted investments and market value thereof (c) Aggregate amount of unquoted investments (d) Aggregate provision made for diminution in value of investments	Under each classification ofinvestments details shall be given of names of bodies that are > Subsidiaries > Associates > Joint ventures > Structured entities The following shall also be disclosed. (a) Aggregate amount of quoted investments and market value thereof (b) Aggregate amount of unquoted investments (c) Aggregate amount of impairment in value of investments Note: Under Classifications of Investments details, the term Structured entities has been used instead of controlled special purpose entities. Investment are impaired rather than making Provision of diminishing in the value of Investment.
Non-Current Loans and Advances	Long-term loans and advances shall be classified as:(a) Capital Advances; (b) Security Deposits; (c) Loans and advances to related parties (giving details thereof); (d) Other loans and advances	Loans shall be classified as-a) Security Deposits; (b) Loans to related parties (c) Other loans (specify nature). Note: Capital Advances have to be separately disclosed under other non-current assets.
Bank Deposits	Bank depositsBank deposits with more than 12-month maturity to be classified under Other bank balances	Bank depositsBank deposits with more than 12 months maturity to be classified under Other Financial Assets.
Investment Property	Investment property to be disclosed as part of Investment	Investment Property is disclosed as separate line item on the face of balance sheet.Also the following disclosure needs to be given A reconciliation of the gross and net carrying amounts of each class of property at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments.  Therelated depreciation and impairment losses or reversals shall be disclosed separately.
Trade Receivables	Trade ReceivablesAggregate amount of Trade receivable outstanding for a period exceeding six months from the date they are due for payment should be separately disclosed	Trade ReceivablesNo Such Requirements
Reserve and Surplus/Other Equity	Reserve and Surplus/Other Equity(i)Reserves and Surplus shall be classified as: (a) Capital Reserves; (b) Capital Redemption Reserve; (c) Securities Premium Reserve; (d) Debenture Redemption Reserve; (e) Revaluation Reserve; (f) Share Options Outstanding Account; (g) Other Reserves-(specify the nature and purpose of each reserve and the amount in respect thereof); (h) Surplus i.e., balance in Statement of Profit and Loss disclosing allocations and appropriations such as dividend, bonus shares and transfer to/ from reserves, etc.;	Reserve and Surplus/Other Equity(i) ‘Other Reserves’ shall be classified in the notes as- (a)Capital Redemption Reserve; (b) Debenture Redemption Reserve; (c) Share Options Outstanding Account; and (d) Others– (specify the nature and purpose of each reserve and the amount in respect thereof); (Additions and deductions since last balance sheet to be shown under each of the specified heads) Note: Retained Earnings represents surplus i.e. balance of the relevant column in the Statement of Changes in Equity(SOCE). Instead of Reserve and Surplus term, the term other equity is to be used.
Contingent Liabilities	Contingent liabilities Includes all Guarantees	Contingent liabilities pertaining to guarantees excluding financial guarantees.
Revenue	In respect of a company other than a finance company revenue from operations shall disclose separately in the notes revenue from-(a) Sale of products; (b) Sale of services; (c) Other operating revenues; Less: (d) Excise duty	Revenue from operations shalldisclose separately in the notes (a) sale of products (including Excise Duty); (b) sale of services (c) other operating revenues
Dividend	Under IGAAP and applicable standards declaration of dividend is an adjustable event and related liability is to be recognized in the financials.	Under Ind AS The amount of dividends proposedto be distributed to equity and preference shareholders for the period and the related amount per share shall be disclosed separately. Arrears of fixed cumulative dividends on irredeemable preference shares shall also be disclosed separately. Note: It is to be disclosed by way of separate notes to the financials rather than to be recognized in the financial.
Materiality	A Company shall disclose by way of notes additional information any item of expenditure and income which exceeds one per cent of the revenue from operations or Rs. 1,00,000 whichever is higher.	A Company shall disclose by way of notes additional information any item of expenditure and income which exceeds one per cent of the revenue from operations or Rs. 10,00,000 whichever is higher.Also disclosure is to be made of all material items i.e. the items if they  could, individually or collectively, influence the economic decisions that users make on the Financial Statements

Conclusively, it can be said that first attempt of preparation of Financial Statements complying with Ind AS requires expert knowledge of all notified Indian Accounting Standards, notified schedules, professional judgments and notes requiring disclosure thereof in first time preparation of Financial statements. It is the starting point of New era of Accounting and presentation and disclosure of financial transactions which requires a fair transition from historical cost method of accounting to the fair value of accounting.

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Mandatory Compliances for a Private Limited Company in India

Although Private Limited Company is the most popular form of starting a business, there are various compliances which are required to be followed once your business is incorporated.
Managing the day to day operations of your business along with complying the corporate laws can be little taxing for any entrepreneur. Hence, it is essential to take help of a professional and also understand such legal requirements to ensure timely fulfilment of compliances, without any levy of interest or penalty.


Recently, Government strike off more than 2 Lakh companies and disqualified more than 3 Lakh directors for non-compliance of various provisions of Companies Act, 2013. Such type of historic action came at the time when government came to know about the various techniques used by corporate entity to evade taxes.

Company law provides legal compliance that are required to be followed by every company like reporting of financial results, reporting of changes in management, maintenance of statuary registers, auditing of accounts etc.

All the compliances provided under the Company Law may be divided in 2 parts for making it easy to understand Mandatory Compliances and Event Based Compliances.
We have elaborated below such compliances which a private limited company has to mandatorily ensure:

Mandatory Compliances
1. Company Name Board
Every Company shall paint or affix the name and address of registered office and keep the same painted/affixed, outside every office or place in which its business is carried on, in legible letters.

2. Letter Head of Company
Every Company shall get its name, address of registered office, CIN, telephone and email printed on all business letters, billheads, letter papers.
Notices and other official publications.

3. First Board Meeting
First Meeting of Board of Directors is required to be held within 30 days of Incorporation of Company. Notice of BM must be send to every director at least 7 days before the meeting.

4. Subsequent Board Meetings
Minimum 4 Board Meetings to be held every year with not more than 120 days gap between two meetings. In case of small company, it is sufficient to conduct only two Board Meetings.

5. Issuing of Share Certificate
The Company is required to issue Share Certificates to the subscribers of memorandum within 60 days of Incorporation of Company.

6. Filing of Disclosure of interest by Directors
Every director at:
‐ First meeting in which he participates as director; or
‐ First meeting of Board in every FY; or
‐ Whenever there is change in disclosures
shall disclose in Form MBP‐1 (along with list of relatives and concern of relatives in the Company as per RPT definition), his concern or interest in any company, body corporate, firm or other association of individuals (including shareholding interest).
Form MBP‐1 shall be kept in the records of the company.

7. Resident Director
Every Company is required to appoint at least one Director who has stayed in India for a total period of not less than 182 days in the previous calendar year.

8. Alteration in MOA and AOA
Every alteration of Articles and Memorandum shall be filed with Registrar together with copy of altered Articles, notice of meeting and SR within 30 days of passing Special Resolution. Every alteration made in MOA and AOA shall be noted in every copy thereof.

9. Registers
Every Company shall keep and maintain following Registers in the specified format:
‐ Register of Members MGT-1
‐ Register of other Security Holders residing outside India MGT-3
– Register of Transfer and Transmission of Shares SH-6
– Register of Charge CHS-7
‐ Index of the Registers

10. Other Registers
Every Company shall keep at its Registered Office, a Register of Directors and KMP in the prescribed format containing prescribed particulars.

11. Resolution
‐ Copy of every resolution (with explanatory statement, if any) or Agreement for the specified matters to be filed with ROC in Form MGT‐14 within 30 days.
‐ Articles of Company shall have copy of resolution effecting amendment in AOA and Agreements referred in Section 117(3) of the Act

12. Minutes of Meeting
‐ Minutes of every general meeting, Creditors, Board and Committee shall be prepared and kept within 30 days of conclusion of every meeting concerned.
‐ All appointments in the meeting shall be included in the minutes.
– Minutes of each meeting shall be entered into Minutes Book along with date of such entry.

13. Appointment of Director
Every person to be appointed as Director shall provide his consent in Form DIR‐2 and such consent shall be filed by the Company with ROC in Form DIR‐12, within 30 Days of appointment.

14. Provisions related to DIN
Every individual intending to be appointed as director shall make an electronic application in Form DIR-3 to Central Government for allotment of DIN.

15. Qualification of Director
‐ Qualification for appointment of director
‐ Declaration from Director at the time of appointment or reappointment in Form DIR‐8
‐ Annual disclosure from Director to be taken

16. Number of Directorship
‐ No person shall be a director in more than 20 companies
‐ Maximum number of public companies can be 10 (Director in Section-8 Co. and Dormant Director not to be included)

17. Resignation by Director
‐ Director shall intimate his resignation to the Company, which the Company shall file with ROC in Form DIR‐12 in 30 days
‐ Company shall put resignation details on its website and in its Directors’ Report.

18. Return of Director and KMP
Return of Directors and KMP to be filed with ROC in Form DIR 12, within 30 days of appointment or change.

19. Meeting, at shorter notice
‐ Meeting can be convened on a shorter notice for urgent matters
‐ Consent from not less than 95% of members entitled to vote thereat

20. Quorum
‐ Quorum shall be one‐third or two directors, whichever is higher
‐ Directors participating through Video Conferencing shall be counted for the purpose of quorum

21. First Auditor
First Auditor of the company shall be appointed by the BOD within 30 days of Incorporation who shall hold the office till the conclusion of 1st AGM. In case of First Auditor, filing of ADT-1 is not mandatory.
22. Subsequent Auditor
The BOD shall appoint the auditor in first AGM of company who shall hold the office till the conclusion of 6th AGM and shall inform the same to ROC by filing ADT-1. The responsibility to file Form ADT 1 is that of the company and not of the auditor within 15 days from the date of appointment.

23. Ratification of Auditor
Shareholders will ratify the appointment of Auditor in every AGM but there is no need to file ADT-1 for ratification.

24. Casual Vacancy of Auditor
If Casual Vacancy is arising due to the resignation of auditor, it shall be filled within 30 days of BOD meeting, subject to approval in General Meeting (AGM or EGM). Any auditor appointed in a Casual Vacancy shall hold office until the conclusion of the next Annual General Meeting.

25. ADT-3
The auditor shall file with the company a resignation letter stating the reason for resigning and file Form ADT-3 with the registrar within 30 days from the date of resignation. Filing form ADT-3 is the responsibility of the auditor and can only be filed if ADT-1 of the relevant auditor was filed.

26. Annual General Meeting
Every Company is required to hold an Annual General Meeting on or before 30th September every year during business hours (9 am to 6pm), on a day that is not a public holiday and either at the registered office of the Company or within the city, town or village where the registered office is situated. A 21 clear days’ notice is required to be given for the same.

27. Filing of Financial Statements
Every Company is required to file its Financial Statements within 30 days of its Annual General Meeting with Registrar of Company in E-Form AOC-4. The same shall be digitally signed by one director and certified by CA/CS/Cost Accountant in Practice.

28. Filing of Annual Return
Every company is required to file its Annual Return with Registrar of Companies within 60 days of Annual General Meeting in E-Form MGT-7. A company having turnover of INR 50 Crore or more shall be certified by a Practicing CS in Form MGT-8.

29. Regularisation of Additional Director
If company wants to appoint additional director as director, then it shall regularize the person as director in General Meeting by passing Shareholder Resolution. File form DIR-12 for Change in Designation of Director along with ordinary resolution within 30 days of AGM.

30. Directors’ Report
Directors’ Report is to be filed covering all the information required for Small Company under Section 134 within 30 days of AGM along with Form AOC-4. It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors.

31. Filing of Financial Statements of a Foreign Co.
Every Foreign Company is required to file Annual accounts (consolidated financial statements/ global accounts) along with the list of all principal places of business in India within 6 months of close of the Financial Year.

32. Filing of Annual Return of a Foreign Co.
Every foreign company shall prepare and file annual return of the company in e-Form FC-4 within 60 days from the close of financial year.

Event Based Compliances
These are triggered based on happening of certain events. There is paperwork that needs to be done for the same and there are various deadlines for these tasks. In case of non-compliance or even a missed deadline there can be penalties, additional fees or a compounding of offence, etc. Hence, it is necessary that the happening of such events be tracked and compliances met with on time.

Particulars
Form No.
Time Limit
§ Change in Directors or KMP
DIR-12
Within 30 Days of such change
§ Increase in Authorized Share capital
SH-7
Within 30 days of passing OR
§ Increase in Paid up share capital (Issue of security)
PAS-3
Within fifteen days from the date of the allotment
§ Change in registered office
INC-22
Within fifteen days from the date of such change
§ Change in secured borrowing (Creation, modification and satisfaction of charge)
CHG-1
All types of Charges within 30 days of its creation
§ Change of name of company
INC-24
Within 60 days from the date of applying reservation of name in INC-1
§ Conversion of company
INC-27
–
§ Filing of resolution and agreements
MGT-14
Within 30 days from date of passing resolution
§ Removal of Director before Expiry
ADT-2
Within 30 days from date of passing SR
§ Application for KYC of Directors
DIR-3 KYC
On or before 30
th
April of immediate next Financial Year (Annual Compliance)
§ Report for Disqualification of the Director
DIR-9
To be filed by company within 30 days of such disqualification

Other relevant compliances
♦ Form INC-22A – ACTIVE Company Tagging
All companies registered before 31st December 2017 are required to file e-Form ACTIVE (Active Company Tagging Identities and Verification) – INC-22A on or before 25th April 2019. Failure to file e-Form Active will lead to a penalty of Rs. 10,000.

Requirements for Filing ACTIVE Form
(a) DIN of all the directors shall be active while filing form INC-22A
(b) Form ADT-1 for appointment of auditor should have already been filed.
(c) Annual filing (Form AOC-4 and MGT-7) of the company shall be complete till F.Y. 17-18.
(d) Email ID which will be verified by OTP
(e) Photograph of Registered office showing external building and inside office also showing therein at least one Director KMP who has affixed his/her DSC to this form

♦ Declaration of Commencement of Business 

Every company is now required to file e Form INC 20A with Registrar of Companies within 180 days of its Incorporation for commencement of its business with effect from 2nd November, 2018.
(a) a declaration is filed by a director within a period of 180 days of the date of incorporation of the company in form INC-20 A and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and
(b) The company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12 in Form INC-22.

♦ Company (SBO i.e, Significant Beneficial Ownership) Rules 2019
1. BEN-1
Every individual who is SBO to file to company within 90 days from 8.2.2019 to make a declaration for SBO.
For any change in SBO, within 30 days of acquiring or change therein.
2. BEN-2
Company to file within 30 days of receipt of BEN 1 to ROC.
3. BEN-3
Register of SBO.
4. BEN-4
Every reporting company shall give notice in BEN 4 in all cases where its member (other than an individual), holds not less than 10% of its; –
(a) shares, or
(b) voting rights, or
(c) right to receive or participate in the dividend or any other distribution payable in a FY

♦ MSME Rules
MSME Form 1 to be filed half-yearly by Specified Companies by 31st October / 30th
April every year. Below companies and details are to be provided therein:
All companies who get supplies of goods or services from micro and small enterprises and whose payments to them exceed 45 days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of the Act, shall submit a half yearly return to MCA stating the following:
a) The amount of payments due; and
b) The reasons for delay
Notes:

• 1st Return is to be filed within 30 days of deployment of Form on MCA Portal
• Medium Enterprises are not covered under the notification
• Only manufacturers and services providers covered

♦ Deposit Rules
DPT-3 is to be filed annually by every company other than Government Company for:

• Deposit or
• Particulars of Transaction not considered as Deposit or
• Both

To be filed annually by 30th June and furnish information as on 31st March of that year duly audited by auditor of the company.
Note: One-time Return shall be filed by every company other than Government company of outstanding receipt of money or loan by a company but not considered as deposits, in terms of rule 2(1)(c) from 1st April, 2014 to the date of publication of this notification (22.1.19), within 90 days from the date of said publication of this notification (22.1.19).

Conclusion
Clearly, running a business especially in the form of a private limited company is not something to be undertaken lightly, and requires both an ongoing investment of much time and effort, and significant knowledge of many financial and regulatory technicalities.
Compliance is a business asset that, if used in the right way, can bring companies competitive advantage, customer trust and ultimately return on investment. Compliance is not only ‘doing the right thing’, or ‘ticking a box’ but it is the way of working, part of the business, investor confidence, transparent and open culture. Remember, cost of non-compliance is always more than cost of compliance. There are established and competent professionals in the market today ready and willing to help you at every stage of the business cycle, not only in incorporation but with all the compliance and regulatory requirements through the long life of your organization.

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India-USA sign Inter-Governmental Agreement for Exchange of Country-by-Country Reports

India and the United States of America have signed an Inter-Governmental Agreement for Exchange of Country-by-Country (CbC) Reports on March 27, 2019. The Agreement was signed by Shri P.C.Mody, Chairman, Central Board of Direct Taxes and Mr. Kenneth I. Juster, Ambassador of the United States of America to India on behalf of the two countries. This Agreement for Exchange of CbC Reports, alongwith the Bilateral Competent Authority Arrangement between the two Competent Authorities, will enable both the countries to automatically exchange CbC Reports filed by the ultimate parent entities of Multinational Enterprises (“MNEs”) in the respective jurisdictions, pertaining to the years commencing on or after 1 January, 2016. It would also obviate the need for Indian subsidiary companies of US MNEs to do local filing of the CbC Reports, thereby reducing the compliance burden.

CBIC clears air on sales promotion offers under GST
The Central Board of Indirect Taxes and Customs (CBIC) has issued a useful circular clarifying various doubts regarding sales promotion schemes under goods and services tax (GST) regime.
Another circular from its customs wing talks of introduction of next generation reform named ´Turant Customs´ —a comprehensive package of various elements that would be implemented from time to time in the next few months.

The Director General of Foreign Trade (DGFT) has discontinued issue of physical copies of advance authorisations and EPCG (Export Promotion Capital Goods) authorisations.
The Jawaharlal Nehru Customs House (JNCH) at Nhava Sheva has rationalised the procedures for reimport of exported goods.
The Ministry of Textiles has announced an improved scheme called Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) on export of garments and made ups.

Deposit shall bear 8% interest rate: FinMin
The Ministry of Finance has notified the deposits made under the Special Deposit Scheme for non-government Provident, Superannuation and gratuity funds, w.e.f 01-04-2019 to 30-06-2019, shall bear interest at 8% rate. This rate will be in force w.e.f. 1st April, 2019.

18% GST notified on inputs supplied by an unregistered person to a promoter
CBIC vide its notification no 08/2019 IT (Rate), 08/2019 CT (Rate) and 08/2019 UT (Rate) dated March 29, 2019, has notified that 18 % GST shall be paid on any goods (other than cement & capital goods) supplied by an unregistered person to a promoter on RCM basis. This notification shall come into force, w.e.f., April 1, 2019.

Norms for e-way bills relaxed
The government relaxed the norms for e-way bills. Rules regarding validity have been changed, while a facility has been provided for auto-calculating the route distance. Under the goods and services tax (GST) regime, an e-way bill has to be generated if goods worth over Rs. 50,000 are transported.

Currently, an e-way bill valid for upto 24 hours for a distance of 100km, depending on the size of the vehicle. However, if the vehicle does not cover 100 km within 24hours, another bill has to be generated. For every 100 km travelled, the bill is valid for one additional day.
This has created problems. For instance, if a truck gets stuck in traffic or breaks down and is unable to cover 100km, another bill is required to be generated. Now, the government has enabled extension of the validity when goods are in transit.

Realtors get tax options for houses under construction
The new rate structure reduces the rate on affordable housing from 8 per cent with inputtax credit to 1 per cent without input-tax credit, and for other houses from 12 per cent with input-tax credit to 5 per cent without inputtax credit.

Houses costing less than Rs. 45 lakh, with space of 60 square metres in metros and 90 square metres in non-metro locations, would be termed affordable, the Council decided in a meeting in February.
Buyers would expect overall reduction in prices and may want to understand the basis of revised pricing. Industry would need to be cautious of anti-profiteering provisions and do a detailed analysis for the ongoing projects.

Builders would need to calculate and assess both the options on a project by project basis to decide what suits better. A single developer building multiple projects has been allowed to avail different rate structures for different projects.
For those under construction project owners who opt the old rate structure, the input-tax credit can be set off against tax liability in the normal sense.

Tax Refund in the Works for Exports to US
The government is considering a scheme to refund taxes imposed on India’s exports to the US that will suffer loss of competitiveness once the concessional duties enjoyed under the Generalised System of Preferences (GSP) are withdrawn.

A Rebate of State Levies (ROSL) kind of scheme, which would refund unrebated taxes that are included in the price of goods, would incentivise exporters and ensure India’s shipments do not drop. The unrebated taxes would be refunded through the drawback route.
“Leather, textiles, some lines of organic chemicals, and nuclear reactors and boilers are some sectors that are likely to face a disadvantage. The government may consider ROSL for these sectors,” an official in the know of the development said.

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