This June newsletter covers categories of relevant updates notified by the Ministry of Corporate Affairs ("MCA") and Reserve Bank of India ("RBI").
MCA
1. MCA amends the Companies (Indian Accounting Standards) Rules, 2015 ("IAS Rules")
May 7, 2025: Vide Notification G.S.R. 291(E), the MCA has amended the IAS Rules. The amendment to Indian Accounting Standard 21 ("Ind AS 21") are:
- Under Annexure B, the following paragraph has been added: "A currency is exchangeable into another currency when an entity is able to obtain the other currency within a time frame that allows for a normal administrative delay and through a market or exchange mechanism in which an exchange transaction would create enforceable rights and obligation"
- Entities are required to assess whether a currency is exchangeable into another currency at a measurement date and for a specified purpose.
- In cases where a currency is not exchangeable, an entity is required to estimate the spot exchange rate.
- If an entity estimates a spot exchange rate due to
non-exchangeability, certain information must be disclosed about:
- the nature and financial effects of the currency not being exchangeable into the other currency;
- the spot exchange rate(s) used;
- the estimation process; and
- the risks to which the entity is exposed because of the currency not being exchangeable into the other currency.
The Appendix has also been amended to include application guidance, which is an integral part of the Ind AS.
In line with the amendments to Ind AS 21, Ind AS 101: First-time Adoption of Indian Accounting Standards have also been amended.
2. MCA amends the Companies (Accounts) Rules, 2014 ("CAR Rules")
May 19, 2025: Vide Notification G.S.R. 317(E), the MCA has amended rule 12(IB), fourth proviso of the CAR Rules. The amended proviso now reads:
"Provided also that for the financial year 2023-2024, Form CSR-2 shall be filed separately on or before 30th June, 2025 after filing Form No. AOC-4 or Form No. AOC-4-NBFC (Ind AS), as specified in these rules or Form No. AOC-4 XBRL as specified in the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015 as the case may be."
Earlier, the due date for filing above Form was "on or before 31st March, 2025".
3. MCA amends Form No. GNL-1 under the Companies (Registration Offices and Fees) Rules, 2014
May 30, 2025: Effective from July 14, 2025, vide Notification G.S.R. 360(E), the MCA has introduced an amended Form No. GNL-1, which is the form for filing an application with Registrar of Companies. The new form does not require details regarding stamp duty payment, like the previous form. Additionally, the new form includes details regarding the default, which are the brief description of default, period of default, reasons that led to the default, how and why the default has been made good (or not made good, if applicable). The earlier form required only brief particulars about how the default has been made good.
4. MCA amends Form No. CRA-2 and CRA-4 under the Companies (Cost Records and Audit) Rules, 2014 ("CRA Rules")
May 30, 2025: Effective from July 14, 2025, vide Notification G.S.R. 361(E), the MCA has introduced amended Forms CRA-2, CRA-4 which are filed for the purpose of intimation of appointment of cost auditor by the company to Central Government, and for filing of cost audit report with the Central Government, respectively.
The amended Form CRA-2 contains an entry for whether the Company has obtained written consent of the cost auditor for appointment and certificate as provided in sub-rule (1A) of Rule 6 of the CRA Rules. Additionally, while the previous and new CRA-2 Forms have an entry for change in auditor, the new Form CRA-2 requires additional details regarding the Firm Registration number of the previous auditor, reasons for change, and whether the previous cost auditor(s) has/have been informed about the change.
The amended form CRA-4 requires details about whether any extension for the Annual General Meeting was granted, the SRN (service request number) of the Form GNL-1, due date of the AGM after grant of extension, and the date of AGM of the company. Further, the Form also has an entry for whether the cost auditor is a lead auditor, in case there are more than one auditors.
5. MCA amends Forms ADT-1, ADT-2, ADT-3 and ADT-4 and the Companies (Audit and Auditors) Rules, 2014 ("CAA Rules")
May 30, 2025: Effective from July 14, 2025, vide Notification G.S.R. 359(E), the MCA has introduced amended Forms ADT-1, ADT-2, ADT-3 and ADT-4, and amendments to the CAA Rules.
Accordingly, Rule 13(2), which provides for reporting of frauds by auditor and other matters, has been amended to state that if an auditor of a company believes that the offence of fraud which involves or is expected to involve individually an amount of rupees one crore or above, is being or has been committed against the company by its officers or employees, the auditor shall report the matter to the Central Government, and shall file his report electronically in Form ADT-4. Earlier, the report was to be sent to the Secretary, Ministry of Corporate Affairs in a sealed cover by Registered Post or by Speed Post. Now the process has been simplified with this e-Form ADT-4.
6. MCA amends Forms MGT-7, MGT-7A and MGT-15 under the Companies (Management and Administration) Rules, 2014 ("CMA Rules")
May 30, 2025: Effective from July 14, 2025, vide Notification G.S.R. 358(E), the MCA has introduced amended Forms MGT-7, MGT-7A and MGT-15 in the CMA Rules.
Key changes in Form MGT-7, which is the annual return to be filed by companies other than one person companies and small companies, include attaching a photograph of the registered office of the company showing the external building and name prominently visible, requirement of attaching a summary of indebtedness, and providing breakup of shareholders.
Changes to Form MGT-7A, which is the abridged annual return for one person companies and small companies, include attaching a photograph of the registered office of the company showing the external building and name prominently visible.
Forms MGT-7, MGT-7A and MGT-15 shall be filed on MCA's V3 portal from July 14, 2025.
7. MCA amends Forms AOC-1, AOC-2, AOC-4 and the Companies (Accounts) Rules, 2014 ("CA Rules")
May 30, 2025: Effective from July 14, 2025, vide Notification G.S.R. 357(E), the MCA has introduced amended Forms AOC-1, AOC-2, AOC-4 and amended the CA Rules. Some of the key changes are as follows:
- Filing of e-Forms: Form AOC-1, which is the statement containing salient features of the financial statement of subsidiaries or associate companies or joint ventures, and Form AOC-2, which is the form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in section 188(1) of the Companies Act, 2013 including certain arms length transactions under third proviso shall now be filed as e-forms.
- Board's Report: The CA Rules have also been further amended to include more information in the Board's Report. Now, along with the statement that the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, details regarding number of complaints received, disposed off, and number of cases pending for more than 90 (ninety) days must be provided. Further, a statement by the company with respect to the compliance of the provisions relating to the Maternity Benefit Act 1961 must also form a part of the Board's report.
- Extracts to be filed: Companies must, with the relevant e-Form No. AOC-4, AOC-4 CFS, AOC-4 XBRL, AOC-4 NBFC (Ind AS) or AOC-4 CFS NBFC (Ind AS) and the respective attachments in portable document format as required, shall, also file e-Form extract of Board Report, extract of Auditor's Report (Standalone) and extract of Auditor's Report (Consolidated), as the case may be.
FEMA
1. RBI issues clarification on reporting of partly paid units issued by investment vehicles.
May 23, 2025: Vide notification no. RBI/2025-26/40, RBI has notified authorised dealer banks regarding the reporting of issuance of partly paid units by investment vehicles on FIRMS Portal.
Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 (Reporting Regulations) mandates reporting of units issued by an investment vehicle in Form InVI within 30 days on the Foreign Investment Reporting and Management System (FIRMS) portal. Pursuant to the amendment issued earlier on March 14, 2025, the reporting compliance applicable on issuance of units by an investment vehicle to person resident outside India would also be extended to the issuance of partly paid units.
RBI therefore, has clarified that investment vehicles issuing partly paid units to persons resident outside India shall report such issuances in Form InVi on the FIRMS Portal and has granted a one-time extension for reporting partly paid unit issuances made before the circular date. Units issued before May 21, 2024, can be reported within 180 days from the circular's issue without late fees, while issuances on or after date of the circular must be reported within 30 days.
This direction is operative with immediate effect.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
