REGULATORY
1. Government notified Companies (CSR Policy) Amendment Rules, 20122:- Notification
No. G.S.R. 715(E). dated 20th September, 2022
Existing CSR Rules
(1) Every company including its holding or
subsidiary, and a foreign company defined under
clause (42) of section 2 of the Act having its
branch office or project office in India which fulfils
the criteria specified in sub-section (l) of section
135 of the Act shall comply with the provisions of
section 135 of the Act and these rules.
Provided that net worth, turnover or net profit of
a foreign company of the Act shall be computed in
accordance with the balance sheet and profit and
loss account of such company prepared in
accordance with the provisions of clause (a) of
sub-section (1) of section 381 and section 198 of
the Act.
(2) Every company which ceases to be a company
covered under subsection (1) of section 135 of the
Act for three consecutive financial years shall not
be required to –
(a) constitute a CSR Committee; and
(b) comply with the provisions contained in sub-
section (2) to (5) of the said section' till such time
it meets the criteria specified in sub-section (1) of
section 135.
(4) CSR Activities. –
(1) The CSR activities shall be undertaken by
the company, as per its stated CSR Policy, as
projects or programs or activities (either new
or ongoing), excluding activities undertaken in
pursuance of its normal course of business.
New CSR Rules
(i) In sub-rule (1), after the proviso, the following
proviso shall be inserted, namely: -
“Provided further that a company having any
amount in its Unspent Corporate Social
Responsibility Account as per sub-section (6) of
section 135 shall constitute a CSR Committee
and comply with the provisions contained in
sub-sections (2) to (6) of the said section.”
Companies are allowed to keep unspent
amounts relating to ongoing project in
designated account but have to utilise it
within three financial years. Now they have
to compulsory CSR Committee and the CSR
committee will oversee its utilisation.
OMITTED
After omission of Rule 2, only a Company
fall under Section 135(1) shall required to
constitute CSR Committee.
In the said rules, in rule 4, for sub-rule (1), the
following sub-rule shall be substituted, namely:
(1) The Board shall ensure that the CSR activities
are undertaken by the company itself or
through, –
(a) a company established under section 8 of the
Act, or a registered public trust or a registered
society, exempted under sub-clauses (iv), (v), (vi)
or (via) of clause (23C) of section 10 or
registered under section 12A and approved
under 80 G of the Income Tax Act, 1961 (43 of
1961), established by the company, either singly
or
along with any other company; or

8 (3) (c) A Company undertaking impact
assessment may book the expenditure towards
Corporate Social Responsibility for that financial
year, which shall not exceed five percent of the
total CSR expenditure for that financial year or
fifty lakh rupees, whichever is less.]
(b) a company established under section 8 of the
Act or a registered trust or a registered society,
established by the Central Government or State
Government; or
(c) any entity established under an Act of
Parliament or a State legislature; or
(d) a company established under section 8 of the
Act, or a registered public trust or a registered
society, exempted under sub-clauses (iv), (v), (vi)
or (via) of clause (23C) of section 10 or
registered under section 12A and approved
under 80 G of the Income Tax Act, 1961, and
having an established track record of at least
three years in undertaking similar activities.
Explanation: For the purpose of clause, the term
“entity” shall mean a statutory body constituted
under an Act of Parliament or State legislature
to undertake activities covered in Schedule VII of
the Act.’
Educational Institutions, Hospitals and
Religious Trusts (not compulsorily registered
u/s 12A) also brought in to widen the scope
of CSR.
(i) for the word’s “five percent”, the words “two
per cent.” shall be substituted;
(ii) for the words “whichever is less”, the words
“whichever is higher” shall be substituted.
The new rule says that the expenditure for
impact assessment, which can be included
in the CSR spending, shall not exceed 2% of
total CSR expenditure for the relevant
financial year or Rs. 50 lakh whichever is
higher. The earlier rule had allowed up to 5%
of the total CSR spending or Rs. 50 lakh
whichever is less. The change would allow
higher spending on impact assessment in
case of large CSR projects.
Annexure II shall be substituted, namely:
FORMAT FOR THE ANNUAL REPORT ON CSR
ACTIVITIES TO BE INCLUDED IN THE BOARD’S
REPORT FOR FINANCIAL YEAR COMMENCING ON
OR AFTER THE 1ST DAY OF APRIL, 2020
2. Indian Telecommunication Bill 2022 released:- Department of Telecommunications's
draft Bill dated 22 September, 2022

The Department of Telecommunications (DoT) has released the much-awaited draft Indian
Telecommunication 2022 bill. As per the bill, spectrum can be assigned through auction or
administrative process, as per the requirement. The bill has the provisions to waive fees,
charges, and penalties of any company if required to protect the interest of consumers or
ensure fair competition. Moreover, the bill seeks to replace three laws: the Indian Telegraph Act,
1885, the Indian Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession)
Act, 1950. Further, the highlights of the Bill include:

 The bill has provisions to waive fees, charges, and penalties of any company if required
to protect the interest of any consumers or ensure fair competition.
 The draft bill has enlarged its definition by including over the top (OTT) communications
services such as whatsapp, signal and telegram, satellite based communication
services, internet and broadband services, in-flight and maritime services etc. in its
ambit.
 The bill states in case of insolvency, a licensee can continue its operations if it continues
to provide the telecommunication services, does not default on payment of dues under
the license and complies with any additional or modified terms and conditions of the
license, failing spectrum assigned to the entity shall revert to the government control.
 In case of default payment by a licensee of any amount and it has been determined that
there exist extraordinary circumstances, including financial stress, consumer interest,
maintaining competition in the sector, or reliability etc, the government may defer
payment of such amounts, conversion of or all the amount payable into shares, write
off of such amounts or relief from payment of such amounts.
 The government can grant an exception to a licensee from provision of this act or rule.
 On the occurrence of any public emergency or in the interest of public safety, the Central
or the State government or any officials authorised in this behalf, can direct that any
message or class of messages, to or from any person or class of persons shall be
transmitted, or shall be intercepted or detained or disclosed to officer mentioned in
such order.
 In event of war or national security issues, the government can take over the control and
management of , or suspending the operation of, or entrusting any authority of the
Government to manage any or all of any telecommunication services.
 The government may permit the sharing, trading, leasing and surrender of spectrum
assigned subject to terms and conditions, including applicable fees or charges, as
prescribed.
 In case of breach of license conditions, the DoT can revoke such license, registration,
authorisation or assignment and can impose a penalty depending on the severity of
offence.
 Any suspension, curtailment, revocation or variation may be reversed if the substantial
violation is remedied to the satisfaction of the Central Government. An alternate
dispute resolution may be established by the government.
 The mandate of USOF has been widened. to include the provisioning of telecom
services to urban areas, R&D, skill development, support of pilot project etc.

The bill has been put up for public consultation and stakeholders can send their comments by
20 Oct 2022.
3. Government working on PLI schemes for more sectors:- News Report

The government is extending incentives under the production- linked incentive (PLI) schemes to
more sectors. The government has announced PLI schemes for 14 sectors, apart from the
semiconductor sector, including white goods, textiles and auto components. The objective of the
PLI scheme is to make domestic manufacturing globally competitive, create global champions in
manufacturing , boost exports and create jobs. There is also demand for extending the scheme
for sectors like toys, certain electronic components, furniture and bicycles.

https://cfo.economictimes.indiatimes.com/news/working-on-pli-schemes-for-more-sectors-
piyush-
goyal/94340816?action=profile_completion&utm_source=Mailer&utm_medium=newsletter&utm
_campaign=etcfo_news_2022-09-21&dt=2022-09-21&em=Z2FyZy5yYWh1bEBhc2lyZS5pbg==

4. Tax advisories should not be treated as Management service:- ICAI

The Institute of Chartered Accountants of India (ICAI) has recommended to the government that
tax audits and tax compliance services rendered to a company by its statutory auditor should
not be interpreted as a management service, a class of offering they are currently prohibited
from rendering. At present, the Companies Act prohibits auditors from offering eight specified
services including ‘management service’ to the companies they are auditing. The ambiguity
arises because the Companies Act does not define what constitutes a management service.

But in the absence of a definition in the law of what constitutes management service, audit
regulator National Financial Reporting Authority (NFRA) has been taking the view that tax
advisory constitutes management service. ICAI’s view has been that tax audits and tax
compliance services are not management services. But that is the Institute’s view. NFRA has a
different view. The government is examining it and it is now entirely in the government’s domain.
ICAI’s view has been communicated to the ministry of corporate affairs, said a person familiar
with the discussions between ICAI and the government. The government’s plan is to prohibit
auditors from offering any non-audit service to their audit clients by way of amendments to the
Companies Act.

5. ICAI releases technical guide on audit of charitable institutions u/s 12A:- Technical
Guide by ICAI

Section 12A provides for conditions to be satisfied by a charitable institution for availing of
exemption under sections 11 and 12. To avail of the exemption under Section 11 and Section
12, a trust must get its books of accounts audited by a Chartered Accountant, where total
income of the trust before exemption under sections 11 and 12 exceeds the maximum amount
not chargeable to tax. The audit report has to be furnished in Form 10B at least one month prior
to the due date of submission of return of income.

The primary goal of the audit of charitable institutions is to give the Assessing Officer (AO) the
opportunity to confirm for himself the validity of the exemption claim made under Section 11 and
if the institution has complied with all statutory requirements. As a result, based on the
legislation as revised by the Finance Act, 2022, the Institute of Chartered Accountants of India
(ICAI) has released a technical guide on the audit of Charitable Institutions under Section 12A to
guide chartered accountants.
6. ICAI Issues Exposure Draft of Revised AS 113 (Fair Value Measurement) and invites
comments by October 18:- Issued by Accounting Standards Board of ICAI dated 19th
September 2022

The Accounting Standards notified under the Companies (Accounting Standards) Rules, 2021,
as well as those issued by the ICAI, apply to entities to which Ind AS do not apply. The
Accounting Standards Board (ASB) is working on project of revising standards, which will be
applicable to entities to whom IND AS are not applicable. While formulating these AS, the ASB
decided to maintain the consistency in the numbering of AS with the Ind AS numbering.

In this regard, the Exposure Draft of revised AS 113, Fair Value Measurement, has been issued
by the ASB for comments, and can be submitted not later than 18 October 2022. The
downloadable version is available at https://resource.cdn.icai.org/71537asb57578.pdf. Further,
comments on the abovementioned Exposure Draft issued by the ASB may be submitted
through any of the following modes:

1. Electronically:- Click on http://www.icai.org/comments/asb/ to submit comments

online
2. Email:- Comments can be sent at commentsasb@icai.in
3. Postal:- Secretary, Accounting Standards Board, The Institute of Chartered
Accountants of India ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi
– 110 002

7. IASB issues narrow-scope amendments to requirements for sale and leaseback

transactions:- New Report

The International Accounting Standards Board (IASB) has issued amendments to IFRS 16
Leases, which adds to requirements explaining how a company accounts for a sale and
leaseback after the date of the transaction.

A sale and leaseback is a transaction for which a company sells an asset and leases that same
asset back for a period of time from the new owner. IFRS 16 includes requirements on how to
account for a sale and leaseback at the date the transaction takes place. However, IFRS 16 had
not specified how to measure the transaction when reporting after that date. The amendments
issued today add to the sale and leaseback requirements in IFRS 16, thereby supporting the
consistent application of the Accounting Standard. These amendments will not change the
accounting for leases other than those arising in a sale and leaseback transaction.

https://www.ifrs.org/news-and-events/news/2022/09/iasb-issues-narrow-scope-amendments-to-
requirements-for-sale-and-leaseback-transactions/

8. FRC publishes Thematic Review of Companies' Deferred Tax Asset Disclosures:- News
Report

The Financial Reporting Council (FRC) has published its thematic review of deferred tax assets
which considers the basis of recognition of, and disclosure in relation to, deferred tax assets in
the light of the effect of the Covid-19 pandemic on companies’ profitability. It follows the FRC's
previous tax thematic review, issued in October 2016. Companies should recognise deferred tax
assets only to the extent their recoverability is probable. The FRC did not identify any obvious
issues with over-recognition in this area, although in some cases it was difficult to make a full
assessment due to the lack of informative disclosure.The review found several instances of
good practice across most individual aspects of deferred tax asset disclosure. To encourage
improvement in the general quality of company disclosures, the review also includes examples
of good practice where companies have provided informative, transparent disclosures in relation
to deferred tax assets, however, there is scope for improvement in the following key areas:

A.) Companies should give more specific disclosures about the nature of the convincing
evidence they use to support the recognition of deferred tax assets when they have a recent
history of losses.
B.) Companies should disclose the specific nature of key judgements and significant estimation
uncertainties in relation to deferred tax assets, and the related sensitivities to changes in
assumptions or the range of possible outcomes within the next financial year.

https://www.frc.org.uk/news/september-2022/frc-review-of-companies-deferred-tax-asset-
disclos

9. Version 1.0 of the Audit Quality Maturity Model's differences between the original and
revised editions are highlighted by the ICAI:- Announcement dated 16 September 2022

The Revised Audit Quality Maturity Model Version 1.0 (AQMM Rev v1.0), which was recently
released by the ICAI's Centre for Audit Quality Directorate, mandates that companies auditing
certain businesses must do an evaluation of the audit quality maturity. Accordingly, the ICAI
compares the former AQMM v1.0 and AQMM Rev v1.0, refers to section 1.5 of the AQMM titled
"Quality Control for Engagements," and emphasises changes in para (i) which now reads as
"Does the firm have a Quality Review (previously referred to as a "Partner Review/Quality
Review") for all listed (previously 'listed' was not mentioned) audit engagements in accordance
with SQC-1 Paragraph 60?

Further, refers to para (ii) of section 3.3 "Practice Credentials", which discusses about
credentials of the firm that distinguish the firm or stands as testimony to the quality of the firm,
which earlier required empanelment with both RBI and C&AG, now requires empanelment with
RBI / C&AG.

https://www.icai.org/post/comparison-aqmm-caq

10. RBI wants fintech operators to follow rules of game says RBI Governor:- News Report

Warning against the mushrooming of lending apps and their usurious recovery prices, the
Reserve Bank said it is not interested in penalising operators or stifling innovation but wants
them to follow the rules of the game. Addressing the third edition of the global fintech summit,
the RBI Governor said the intention of the central bank is not to penalise or stifle anyone but to
ensure that everyone follows traffic rules. In the past two years, when the negative loan app
incidents began to surface, the central bank has made many changes in the rule book, including
mandating the loan app to upfront disclose on whose NBFC's or bank's behalf the money was
being disbursed.

The governor questioned why the RBI did not include a first-loss default guarantee in the
recently released lending app guidelines and stated its intention is not to penalise anybody or
stifle anyone else's activity. The Reserve Bank will continue to be supportive of it (digital
lending) and will welcome it. These innovations must also be responsible and should enhance
the efficiency and resiliency of the financial system while benefiting the consumer. A robust
internal product and service assurance framework together with fair and transparent
governance will go a long way to safeguard the interests of customers and ensure the long-term
sustainability of fintech entities themselves.

https://economictimes.indiatimes.com/industry/banking/finance/rbi-wants-fintech-operators-to-
follow-rules-of-game-says-guv-shaktikanta-das/articleshow/94334715.cms

11. FCRA: Extension of validity of Registration Certificate:- MHA Public Notice No.
II/21022/23(22)/2020-FCRA-III, 23rd September, 2022

The FCRA registration certificates whose validity was extended till 30th September, 2022 in
terms of Public Notice dtd. 22nd June, 2022 and whose renewal application is pending, shall
stand extended up to 31st March, 2023 or the date of disposal of renewal application, whichever
is earlier.

The FCRA registration certificates which are expiring during the period between 01st October,
2022 and 31st March, 2023 and have applied/ will apply for renewal before the expiry of 5 years
validity period shall stand extended up to 31st March, 2023 or the date of disposal of renewal
application, whichever is earlier.
In case of refusal of application for renewal, the validity of the certificate shall be deemed to
have been expired on the date of such refusal and the entity shall not be eligible to either
receive or utilize foreign contribution.

12. Govt prohibits export of Maps & Geospatial data of spatial accuracy:- Notification No.
82/2022-Customs (N.T.), dated the 23rd September, 2022

Government has prohibited the export of Maps and Geospatial data of spatial accuracy and
value finer than the threshold values as specified in Annexure-I appended to Notification No.
82/2022-Customs (N.T.) | Dated the 23rd September, 2022.

The Central Government on being satisfied that for the maintenance of the security of India, it is
necessary so to do hereby prohibits the export of Maps and Geospatial data of spatial accuracy
and value finer than the threshold values as specified in Annexure-I appended to this
notification. Export of Maps and Geospatial data with attributes mentioned in Annexure – II
appended to this notification shall be restricted as per the sensitive attributes as specified in
column (3) of the Table under the said Annexure-II.

13. SEBI sets out detailed framework for Social Stock Exchanges:- Circular No.
SEBI/HO/CFD/PoD-1/P/CIR/2022/120, dated 19th September, 2022
The Securities and Exchange Board of India (Sebi) came out with a detailed framework for social
stock exchange, specifying minimum requirements for a Not-for-Profit Organization (NPO) for
registering with the bourse and disclosure requirements. This development comes after the SEBI,
in July, notified rules for Social Stock Exchange (SSE) to provide social enterprises with an
additional avenue to raise funds.
SSE is a novel concept in India and such a bourse is meant to serve the private and non-profit
sectors by channeling greater capital to them and the idea of SSE was first floated by Finance
Minister Nirmala Sitharaman in her Budget speech for the financial year 2019-20.
SEBI specified minimum requirements to be met by a NPO for registration with SSE, disclosure
requirement for NPOs raising funds through the issuance of zero-coupon zero principal
instruments and put in place annual disclosure requirements that needs to be made by NPOs on
such exchanges.
Listed NPO will have to submit a statement of utilization of funds to SSE, as mandated under
Sebi's rules within 45 days from the end of quarter. Additionally, Sebi has asked social enterprises
raising funds using SSE to disclose Annual Impact Report (AIR) within 90 days from the end of
financial year, capturing the qualitative and quantitative aspects of the social impact generated
by the entity and where applicable, the impact that is generated by the project or solution for which
funds have been raised on SSE.
Under the rules, SSE will be a separate segment of the existing stock exchanges. Social
enterprises eligible to participate in the SSE will be entities NPOs and for-profit social enterprises
having social intent and impact as their primary goal. Also, such an intent should be demonstrated
through its focus on eligible social objectives for the underserved or less privileged populations
or regions.
It is important to note that the social enterprises will have to engage in a social activity out of 16
broad activities listed by the regulator. The eligible activities include eradicating hunger, poverty,
malnutrition, and inequality; promoting healthcare, supporting education, employability and
livelihoods; gender equality empowerment of women and LGBTQIA communities; and supporting
incubators of social enterprise.
https://www.sebi.gov.in/legal/circulars/sep-2022/framework-on-social-stock-
exchange_63053.html

14. Issue and listing of Commercial Paper by listed InvITs and REITs:- SEBI Circular No.
SEBI/HO/DDHS/DDHS_Div3/P/CIR/2022/122 & 123, dated September 22, 2022
As per Reserve Bank of India’s Commercial Paper Directions 2017 dated 10/08/2017 , InvITs and
REITs with a net worth of at least Rs 100 crore are eligible to issue commercial papers. The
issuance of these listed commercial papers is expected to be within the overall debt limit permitted
under the REITs and InvITs rules. Commercial Papers or CPs are short-term debt instruments
issued by companies to raise funds, usually for up to one year.
In view of the Directions issued by RBI and in exercise of powers conferred under Section 11(1)
of SEBI Act 1992 and Regulation 33 of the SEBI (Infrastructure Investment Trust) Regulation
2014 and Regulation 33 of the SEBI (Real Estate Investment Trust) Regulation 2014, SEBI on
Thursday allowed emerging investment vehicles, Real Estate Investment Trust (REIT) and
Infrastructure Investment Trust (InvIT), to issue commercial papers. This is subject to certain
conditions, the SEBI said in two separate circulars.
SEBI said that REITs and InvITs may issue listed commercial papers. This is subject to certain
conditions, including, REITs and InvITs need to abide by the guidelines prescribed by Reserve
Bank of India (RBI) for issuances of commercial papers and follow the conditions of listing norms
prescribed by SEBI.
REITs and InvITs are relatively new investment instruments in the Indian context but are
extremely popular in global markets. While a REIT comprises a portfolio of commercial real
assets, a major portion of which is already leased out, InvITs comprise a portfolio of infrastructure
assets such as highways, and power transmission assets.
This decision of SEBI will allow REITs and InvITs to raise short term funds through the issue of
commercial papers is expected to help improve liquidity for the new asset class and also lower
their cost of capital and shorter timelines for AAA-Rated Trusts.
Circular No. 122- https://www.sebi.gov.in/legal/circulars/sep-2022/issue-and-listing-of-
commercial-paper-by-listed-reits_63264.html
Circular No. 123- https://www.sebi.gov.in/legal/circulars/sep-2022/issue-and-listing-of-
commercial-paper-by-listed-invits_63263.html

15. Union Cabinet approves National Logistics Policy:- News Report

The Union Cabinet approved the National Logistics Policy announced by Prime Minister
Narendra Modi which aims to cut transportation costs by promoting seamless movement of
goods across the country and aim to bring the logistics cost to single-digit from 13-14%.
According to an e-book by the Department for the Promotion of Industry and Internal Trade
(DPIIT), a unified logistics interface platform (ULIP) will be developed as part of the policy to
help different government and private agencies, shippers, and service providers enable
information exchange on a real-time basis in a confidential manner.

Development of ULIP is one of the eight interventions proposed under the comprehensive
logistics action plan, through which the policy will be implemented. The other interventions
proposed include standardisation of physical assets and benchmarking of service quality
standards; logistics human resources development and capacity building; state engagement;
export-import logistics; service improvement framework; sectoral plan for efficient logistics; and
facilitation of the development of logistics parks.