About
Rule(s):
Ministry of Corporate Affairs (MCA),
Government of India wide notification dated 05th September, 2019 has
amended the National Financial Reporting Authority Rules, 2018, (NFRA Rules).
These rules may be called the National Financial Reporting Authority
(Amendment) Rules, 2019 {NFRA (Amendments) Rules, 2019}.
Commencement:
They shall come into force on the date of
their publication in the Official Gazette.
Key
Amendments
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Sl. No.
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Change Particulars
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NFRA Rules 2018
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NFRA Rules 2019
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1.
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Rule 2 (1) (g) – Definition of “Division”
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“Division” means a division established by
the Authority for the purpose of organizing and carrying out its functions
and
duties;
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“Division” means a division "including
the one headed by the chairperson or a full{ime member",
established by the Authority for the purpose of organizing and carrying out
its functions and
duties;
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Rule 3 (1) (c) –
Classes of companies and bodies corporate
governed by the Authority.
(explanation inserted for Banking
Companies)
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No Explanation was given for Banking
Companies under NFRA Rules, 2018
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"Explanation.-
For the
purpose of this clause, "banking company" includes
'corresponding new bank' as defined in
clause (d) of section 2 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (5 of 1970) and clause (b) of section 2 of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of
1980)
and 'subsidiary bank' as defined in clause
(k) of section 2 of the State Bank of India (Subsidiary Bank) Act, 1959 (38
of 1959).".
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3.
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Rule – 5
Annual Return
Form NFRA -2 is available and Due date
is 30.11.2019
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Every auditor referred to in rule 3 shall
file a return with the Authority on or before 30th April every year in such form as may be specified by the
Central Government.
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Every auditor referred to in rule 3 shall
file a return with the Authority on or before "30th November every year in Form NFRA-2 such form as may be
specified by the Central Government.
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Rule -11
Disciplinary proceedings.
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Such provisions not given under NFRA Rules,
2018
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New
Provisions Added:
"Provided that where the disposal does
not take place within the said period, the
Division shall record the reasons for not
disposing off the show-cause notice within the
said period, and the chairperson, may,
after taking into account the reasons so recorded,
extend the aforesaid period by such
additional period not exceeding ninety days as he may
consider necessary:
Provided further that the chairperson may,
if he thinks fit, grant the said extension
of period more than once.'.
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New Annexure i.e. NFRA -2 after Form NFRA-1, inserted
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Form was not available at that time.
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Form
NFRA -2 : Annual Return
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Form NFRA -2
Annual
Return To Be Filed By Auditor With The National Financial Reporting Authority
Ø Applicable
Law(s)
·
Section 132 of the Companies Act,
2013 and
·
Rule 5 of the National Financial
Reporting Authority Rules, 2O18
Ø Category of Auditor(s),
(reporting required by)
I.
Individual
II.
Firm
III.
Indian LLP
IV.
Foreign LLP
Ø Important
details required under NFRA -2 from Auditors:
a.
Whether the auditor has resigned
from his post in any company/body corporate during the past three years?
b.
Number of companies/ bodies
corporate in which the auditor resigned during the past three years.
c.
Whether the Auditor has withdrawn
an audit report on financial statements, or withdrawn its consent to the use of
its name in a report, document, or written communication in the past three
reporting periods.
d.
Number of companies/ bodies
corporate in which such withdrawal took place during the past three years
e.
A statement of the quality
control policies and procedures of the Auditor for its auditing practice during
the reporting period.
Important Links
1.
Form
NFRA -2 is available for understanding at: http://www.mca.gov.in/Ministry/pdf/NFRA_05092019.pdf
2.
NFRA (Amendments), Rules, 2019
3.
NFRA
Rules 2018 (Principle Rules)
Author contacted at:
+91 8802581290
lalitrajput537@gmail.com
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