In a Gazette Notification dated 24th March, 2021 the Ministry of Corporate Affairs (“MCA”) has issued the Companies (Accounts) Amendment Rules, 2021 (“Amendment Rules”) in order to further amend the Companies (Accounts) Rules, 2014 (“Principal Rules”).
The Amendment Rules will gain effect from 1st April, 2021.
Please refer to the table provided below for a detailed read of the amendment.
| Principal Rules | Amendment Rules
|
Implication |
| Rule 3- Manner of Books of Account to be Kept in Electronic Mode:
(1) The books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference. …..
|
Rule 3- Manner of Books of Account to be Kept in Electronic Mode:
(1) The books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference. …..
Provided that for the financial year commencing on or after the 1st day of April, 2021, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled. |
From 1st April, 2021 onwards, a company which uses accounting software for maintaining its books of account must mandatorily use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made.
Further the it must be ensured that the audit trail cannot be disabled. |
| Rule 8- Matters to be Included in Board’s Report:
….. (5) In addition to the information and details specified in sub-rule (4), the report of the Board shall also contain – (….) (x) a 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 [14 of 2013] |
Rule 8- Matters to be Included in Board’s Report:
….. (5) In addition to the information and details specified in sub-rule (4), the report of the Board shall also contain – (….) (x) a 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 [14 of 2013] (xi) the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year. (xii) the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof. |
With the present amendment gaining effect the following additional matters will also have to be included in the Board’s Report:
a. the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year.
b. the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons for such difference. |
Source: Ministry of Corporate Affairs
