Companies (Accounts) Second Amendment Rules 2023

Annual financial statements is required for companies that have undertaken or intends to undertake listed public offerings of debt securities or non-convertible redeemable preference shares. The Ministry of Corporate Affairs, on June 2, 2023, released the Companies (Accounts) Second Amendment Rules, 2023, which modify the Companies (Accounts) Rules, 2014. These changes specifically impact Rule 12 of the Companies (Accounts) Rules, 2014, and mandate a separate submission of financial statements for the fiscal year 2022-2023 for companies that have participated in or plan to participate in the public offering of debt securities or non-convertible redeemable preference shares. Form CSR-2The submission of Form CSR-2 must be completed by the deadline of March 31, 2024.Form No. AOC-4The specific form required will be either AOC-4-NBFC (Ind AS) or AOC-4 XBRL, depending on the relevant circumstances.

MCA Form CSR-2

corporate social responsibility (CSR) activities. It is part of the government's effort to encourage transparency and accountability in corporate operations. The MCA issued this notification with the aim of fostering responsible business practices and ensuring that companies fulfill their CSR obligations. By submitting the CSR-2 form, companies are required to disclose information about their CSR projects, spending, and overall impact on society. This initiative aligns with the government's goal of promoting good governance and creating a positive impact on various social and environmental issues. Corporate Social Responsibility (CSR)spending on the MCA. Businesses that are categorized under Section 135 of the Companies Act 2013, which requiresCSR complianceCompanies are required to set aside a specific portion of their earnings for corporate social responsibility initiatives.

Applicability of Form CSR-2

As previously stated, organizations that fall under Section 135 of the Companies Act 2013 are required to submit Form CSR-2, also referred to as the Report on Corporate Social Responsibility. This applies to companies that are obligated to follow CSR regulations as stipulated in the aforementioned act.

Reporting CSR Activities

In the past, there was no specific format for reporting corporate social responsibility (CSR) activities. Section 135 only mandated that companies should include CSR information in their Board Reports and disclose it on their websites if relevant. However, in 2022, the Ministry of Corporate Affairs (MCA) introduced Form CSR-2, which companies now have to submit along with Form AOC-4 when filing their financial statements with the Registrar of Companies.

The Form CSR-2, which consists of 11 pages in total, mandates that companies furnish the subsequent details:

Information about the amount of money spent on corporate social responsibility (CSR) during the last three years and any current projects.
CSR Committee details.
The company is required to publicly share information about its corporate social responsibility (CSR) initiatives on its website, as stated in Rule 9 of the Companies (CSR Policy) Rules, 2014.
Net income and other pertinent details for the previous fiscal years.

Companies must provide specific information about capital assets acquired or created through CSR expenditure, including the address, location, pin code, amount spent, and registered owner.

Deadline for Filing CSR-2

According to the Companies (Accounts) Second Amendment Rules 2023, the MCA has mandated that Form CSR-2 needs to be submitted individually by March 31, 2024, for the previous financial year (2022-2023). This deadline is applicable after filing Form AOC-4, AOC-4 XBRL, or AOC-4 NBFC (Ind AS).

In brief, to conclude the deadlines for Form CSR-2:

In order to comply with the financial year 2022-23 regulations, it is necessary to submit Form CSR-2 individually by March 31, 2024.
Starting in the fiscal year 2022-23, it is required to submit Form CSR-2 as a supplement to Form AOC-4 by the specified deadline of AOC-4.

Important provisions covered in the Companies (Accounts) Second Amendment Rules of 2023.

The Companies (Accounts) Second Amendment Rules 2023 focus on a number of important regulations. Below are a few significant provisions outlined in these rules:

According to Section 128(1), it is required to maintain and keep records of books of account and financial statements.

financial statements. These records should give a true and fair view of the company's financial position and operations. They must be kept for a minimum of eight years from the end of the financial year to which they relate. Failure to comply with this requirement can result in penalties and legal consequences. financial statementsThe company's official records, which should reflect the company's overall status, including branch offices, and detail the transactions occurring at both the registered office and branches, must be accurate. These records must be kept using the accrual method and the double entry system. If the Board of Directors chooses to store these records at a different location than the registered office, they must notify the Registrar in writing within a week, complete with the full address of the new location. In addition, companies are allowed to maintain electronic copies of these records as long as they follow relevant rules and regulations.

Section 128(3) grants the director the authority to examine the books of account and records.

According to Section 128(3) of the Companies Act 2013, directors have the privilege to review the company's books of account and other records kept within India at the registered office or other locations during business hours. If any financial records are maintained outside of India, copies should still be kept and accessible for inspection by directors, with certain conditions applied. However, only the authorized designated person, as determined by a resolution approved by the Board of Directors, can examine the financial records of any subsidiary company.

Section 129(3) refers to the process of creating consolidated financial statements and supplementary statements.

According to Section 129(3) of the Companies Act 2013, companies that have subsidiaries or associate companies are obligated to create consolidated financial statements in accordance with applicable accounting standards. These statements need to be presented as the company's financial statements at its annual general meeting. In addition, the company is required to provide a supplementary statement that summarizes the important components of its subsidiary and associated companies' financial statements. The Central Government is empowered to establish regulations for consolidating company accounts.

The power to impose accounting standards as outlined in Section 133 of the Companies Act, 2013.

According to section 133 of the Companies Act, 2013, the Central Government has been empowered to establish accounting standards or supplements in consultation with the National Financial Reporting Authority. These standards or supplements are recommended by the Institute of Chartered Accountants of India (ICAI), which was established under section 3 of the Chartered Accountants Act 1949.

Requirements and procedures for filing under Section 134 of the Companies Act, 2013 need to be followed.

Section 134 of the Companies Act 2013 requires corporations to submit important reports and documents, such as financial statements, board reports, and explanations of directors' duties. It specifies that financial statements can only be signed by directors after they have been authorized by the Board of Directors. The section also mandates the inclusion of an auditor's report and a board report, along with other specified materials, in the report.

Corporate Social Responsibility (CSR) obligations as specified in Section 135(4) of the 2013 Companies Act.

According to Section 135(4) of the Companies Act, 2013, every company mentioned in subsection (1) is obligated to establish a Board of Directors. This Board must: (a) Develop and adopt the company's corporate social responsibility (CSR) policy, taking into account the suggestions provided by the corporate social responsibility committee. The details of the policy must be disclosed in the company's report and, if relevant, displayed on the company's website. (b) Ensure that the company implements the activities outlined in its CSR policy.

The Companies Act of 2013 requires the submission of audited financial statements under Section 137.

Under Section 137 of the Companies Act, 2013, companies have a legal duty to present their audited financial statements for the year 2013 to the concerned authorities within 30 days of their Annual General Meeting. To fulfill this obligation, companies must use Form AOC-4 for submission. It is important to note that different types of corporations may require different forms for this purpose.

The selection of an internal auditor as mandated by Section 138 of the Companies Act, 2013.

Section 138 of the Companies Act, 2013 gives authority to establish a requirement for certain types of companies to hire an internal auditor to conduct an internal review of their operations. The internal auditor can be a chartered accountant, cost accountant, or another expert, depending on the decision of the Board.

The attachment provided here contains the official notification regarding the Companies (Accounts) Second Amendment Rules 2023.

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