Vistra India Update 363


Registered Valuers 4th Amendment Rules 2018

Ministry of Corporate Affairs (MCA) has amended Companies (Registered Valuers and Valuation) Rules 2017 to provide, apart from other things, the following:

Clarification that conduct of valuation under any other law other than the Act or these rules shall not be affected by virtue of coming into effect of these rules.

Eligibility qualification and experience for registration as Valuer has been updated for various classes of assets.

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National Financial Reporting Authority Rules 2018

With the constitution of National Financial Reporting Authority, Ministry of Corporate Affairs has notified National Financial Reporting Authority Rules, 2018. The said rules provide, apart from others, the functions and duties of the Authority, Recommending accounting standards and auditing standards, Monitoring and enforcing compliance with accounting/auditing standards etc. Classes of companies and bodies corporate governed by the Authority are

Companies whose securities are listed on any stock exchange in India or outside India

Unlisted public companies having paid-up capital >= 500 Crores OR annual turnover >=Rs. 1,000 crores or outstanding loans, debentures and deposits >= Rs. 500 Crore as on the 31st March of immediately preceding financial year;

Insurance companies, banking companies, companies engaged in the generation or supply of electricity, companies

Body corporate or company or person, or any class of bodies corporate or companies or persons, on a reference made to the Authority by the Central Government in public interest; and

A body corporate incorporated or registered outside India, which is a subsidiary or associate company of any company or body corporate incorporated or registered in India as referred to above clause, if the income or net worth of such subsidiary or associate company exceeds 25%  of the consolidated income or consolidated net worth of such company or the body corporate

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Companies (Amendment) Ordinance 2018

Central Government has issued an Ordinance to amend certain provisions of Companies Act, 2013. The important changes brought in by the ordinance are:

Decriminalizes certain offences by considering re-categorization of certain `acts’ punishable as compoundable offences to `acts’ carrying civil liabilities.

Ensuring compliance of the default and prescribing stiffer penalties in case of repeated defaults

Removing few types of litigations from the jurisdiction of NCLT to Regional Director.

Few of other Corporate Governance related reforms such as:

Filing declaration of commencement of business within 180 days from Incorporation

Greater accountability with respect to filing documents related to creation, modification and satisfaction of charges; 

Non-maintenance of registered office to trigger de-registration process;

Holding of directorships beyond permissible limits to trigger disqualification of such directors

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External Commercial Borrowings (ECB) Policy – Review of Minimum Average Maturity and Hedging Provisions

Reserve Bank of India in consultation with Government of India reviewed existing provisions regarding minimum maturity period and hedging requirements for availing ECBs in infrastructure space. Pursuant to this, RBI has now reduced the minimum average maturity requirement from 5 years to 3 years for ECBs raised by eligible borrowers in infrastructure space.  Similarly relief has been provided to qualify for exemption from mandatory hedging provisions for ECBs by reducing the minimum maturity period from 10 years to 5 years.  Accordingly, the ECBs with minimum average maturity period of 3 to 5 years in the infrastructure space will have to meet 100% mandatory hedging requirement.

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Foreign Investment in India -Reporting in Single Master Form

RBI has updated the user manual for use while reporting in Single Master Form. The updated user manual provides guidance on the following additional matters which are made operational.

Inclusion of ESOP, DRR (where ESOPs are linked to ADR/GDRs)  and DI (for downstream investment) to be reported on SMF from Oct 23, 2018 in addition to the existing reporting forms Viz. FC-GPR, FC-TRS, LLP-I, LLP-II and CN (Convertible Note)

Change in the format of the Authority letter for E-KYC

Change in the format of CS Certificate to be uploaded by clients as part of the reporting submissions

Format of the FEMA declaration specific to each type of reporting to be uploaded by clients

All forms that are filed but pending approval on the e-Biz portal due to resubmission/returned/objection memos raised, are required to be submitted to RBI through the concerned AD Bank, in physical mode with the E-biz reference number mentioned on the request letter, stating the date of submission and the reason for delay in clearing the discrepancies with a request to RBI to take on record the same. These existing reporting cases are not to be submitted through the SMF portal.

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Publishing of rate of exchange for conversion of the foreign currency

The Central Board of Excise and Customs (CBEC) vide Notification No. 90 & 93 /2018 - Customs (N.T.) notified the rate of exchange for conversion of the foreign currency into Indian currency or vice versa for Export and Import of goods, with effect from 2nd of November and 16th of November 2018 respectively.  

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