Financial Reporting - November 2015

Framework for NBFCs RBI vide notification no. DNBR (PD)CC.No. 002/03.10.001/2014-15 dated November 10, 2014 has revised the regulatory provisions relating to the functioning of NBFCs (except primary dealers) in India. The changes introduced to the regulatory framework are delineated below. a. Requirement of Minimum NOF of & 200 lakh Although the requirement of minimum NOF stands at ₹200 lakh, the minimum NOF for companies that were already in existence before April 21, 1999 was retained at ₹25 lakh. but the…

(a) With effect from 1s Oct, 2014 dividend and income distribution tax is leviable on gross dividend / income and not on the net dividend / income distributed to shareholders and unit holders as per Income- tax Act, 1961. (b) The rate of DDT is fifteen per cent (excluding surcharge of 12% plus secondary and higher education cess is (2+1) 3%).

Amendment to Schedule Vil to the Companies Act, 2013 The Central Government vide Notification No. G.S.R. 568(E) dated 6 August, 2014,made amendments in Schedule VII to the Companies Act, 2013,wherein it has added “slum area development” as one of the avenue for contribution for CSR. The term ‘slum area’ shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force. Further, MCA…

Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 SEBI vide Circular No. LAD-NRO/GN/2014-15/16/1729 dated 28th October, 2014 has formulated the SEBI (Share Based Employee Benefits) Regulations, 2014 which replaces the SEBI (Employees Stock Option Plan) Guidelines, 1999. The said Regulations deal with various provisions relating to employee stock option schemes, employee stock purchase schemes, stock appreciation rights schemes, general employee benefits schemes and retirement benefit schemes formulated by listed companies. The regulations deal with definition of…

5. Amendment to the Rule 6 of the Companies (Accounts) Rules, 2014 The Central Government vide Notification No. GSR... (E) dated 14" October, 2014, has amended the Companies (Accounts) Rules, 2014 by inserting two provisos in its Rule 6. Rule 6 talks about the manner of consolidation for the companies mandated to prepare the consolidated financial statements under section 129(3) of the Companies Act, 2013.

1. According to the first proviso added therein, an intermediate wholly-owned subsidiary company whose immediate parent is a company incorporated in India would not be required to comply with the requirements of the Rule 6 of the Companies (Accounts) Rules, 2014. However, the intermediate wholly-owned subsidiary company whose immediate parent is a company incorporated outside India is required to comply with the requirements of the Rule 6.

2. According to the second proviso added therein, those companies which do not have any subsidiary but have one or more associates or joint ventures or both, have been exempted from preparing Consolidated Financial Statements for the financial year 2014-15.

6. Schedule Ill related disclosures made in the stand-alone financial statements not to be repeated in CFS - Clarification Under the Act, the requirements of Schedule III would apply to preparation of stand-alone financial statements as well as to the preparation of Consolidated Financial Statements. While AS 21, ‘Consolidated Financial Statements’, inter alia, provides that certain information required under Schedule III to the Companies Act, 2013 given in the notes to the stand-alone financial statements of the parent and/or the…