NBFC

Companies (Accounts) Amendment Rules 2020- Filing of Financial Statements by NBFCs

The Ministry of Corporate Affairs or MCA on 30th January 2020 published Companies (Accounts) Amendment Rules, 2020. These new rules amend the already existing Companies (Accounts) Amendment Rules, 2014. According to this new rule, the NBFCs or Non-Banking Financial Company will have to file the financial statements of the company with the Registrar together with Form AOC-4 NBFC (Ind AS) and the consolidated financial statement, with Form AOC-4 CFS NBFC (Ind AS). These rules shall come into force on the date of their publication in the Official Gazette.

Meaning of Non-Banking Financial Company or NBFC

Section 45-I (f) of the Reserve Bank of India (RBI) Act, 1934¹ defines NBFC or Non-Banking Financial Company. It includes Housing Finance Companies, Merchant Banking Companies, Micro Finance Companies, Mutual Benefit Companies, Venture Capital Fund Companies, Stock Broker or Sub Broker Companies, Nidhi Companies, Chit Companies, etc. Non-Banking Financial Company or NBFC offers banking services such as loans and credit facilities, retirement planning, currency exchange, underwriting, and merger activities. To run their business, NBFC needs to get a license from the Reserve Bank of India.

What are the New Amendments made under the Companies (Accounts) Rules, 2020?

• The new Companies (Accounts) Amendment Rules, 2020 shall come into force on the date of their publication in the Official Gazette.
• Rule 12(1A) related to the filing of financial statements and the fees to be paid thereon has been newly inserted.
• According to the Companies (Accounts) Amendment Rules, 2020, every Non-Banking Financial Company or NBFC shall comply with the Indian Accounting Standards (Ind AS). The NBFCs shall file the financial statements along with Form AOC-4 NBFC and the consolidated financial report, if any, with Form AOC-4 NBFC (Ind AS).
• In the Annexure for NBFC Compliance, two new e forms are inserted, these are:
• Form No. AOC-4 NBFC (Ind AS) –It is related to the form for filing the financial statement and other documents with the Registrar.
• Form No. AOC-4 CFS NBFC (Ind AS) – This form is for filing of consolidated financial statements and other documents with the Registrar.

What is Form AOC-4 in the Ministry of Corporate Affairs?

Financial Statements are the primary source through which the Board of Directors and shareholders evaluate the performance of the company. Form AOC-4 is basically for filing of the company’s financial statement for every year with the Registrar of Companies. The company needs to fill the form within 30 days of its Annual General meeting. The companies under the XBRL or Extensible Business Reporting Language format can file financial statements through the Form AOC-4 XBRL.

What is Form AOC-4 NBFC and Form AOC-4 CFS NBFC?

The new Companies (Accounts) Amendment Rules, 2020, has introduced two forms. The two forms are Form AOC-4 NBFC and Form AOC-4 CFS NBFC. Form AOC-4 NBFC and Form AOC-4 CFS NBFC relates to the filing of financial statements. These forms apply to NBFC or Non-Banking Financial Company.  The newly introduced amended rules state that NBFCs have to file their financial statements to the Registrar, just like other companies. The financial statement for the Non-Banking Financial Company requires the same details as for Form AOC-4. The Form AOC-4 CFS NBFC is for filing of consolidated financial statements.

What are the Details Required for Form AOC-4 NBFC?

The details required for Form AOC-4 NBFC are very similar to that of the Form AOC-4. Apart from that, the following information must be filled in the new Form AOC-4 NBFC:

• The nature of the financial statement and all the details about it.
• The original date of the adjourned Annual General Meeting or AGM, in case the financial statement is accepted in that meeting.
• The Service Request Number or SRN of Form INC-28 and of Form AOC-4 NBFC.
• The exact date of the competent Authority’s order.
• The Balance sheet report of the financial assets and non-financial assets.
• The particulars of the Service provider.
• An accurate Balance sheet on the statement of the changes in equity, investments, derivative financial instruments, debt securities, deposits, borrowings (apart from debt securities) and subordinated liabilities.
• Auditor’s Report.
• A comprehensive remark of the auditors.
• Applicability of Company Auditor’s Report Order or CARO.

What are the Primary Attachments Required in Form AOC-4 NBFC?

What are the Details Required for Form AOC-4 CFS NBFC?

The details for Form AOC-4 CFS NBFC are quite similar to that of the Form AOC-4 CFS.

The newly introduced Form AOC-4 CFS NBFC requires the following information:

• The date of adjourned Annual General Meeting or AGM, if the financial statement is accepted in that meeting.
• The SRN or Service Request Number of Form INC-28 and Form AOC-4 CFS NBFC (Ind AS).
• The original date of the Competent Authority’s Order.
• Balance Sheet of the financial assets and non-financial assets.
• A transparent balance sheet on the statement of the changes in equity, derivative financial, instruments, investments, debt securities, borrowings (apart from debt securities), deposits and subordinated liabilities.
• Comment of the Auditor on the items under Company Auditor’s Report Order or CARO.

What are the essential Attachments Required in Form AOC-4 CFS NBFC?

Certification of Form AOC-4 NBFC and Form Accounts of Companies (AOC)-4 CFS NBFC

The NBFC Company must get a duly certified certificate by practicing professionals in Form AOC-4 NBFC and Form AOC-4 CFS NBFC. The NBFC Company should specify that:

• The records in both forms have been properly prepared and signed by the required officers of the company.
• The records are maintained as per the relevant provisions of the Companies Act, 2013.
• All the required attachments have been completely and legibly attached to the form.
• The Practicing professional for the purpose of certification can be:
• A Chartered Accountant (in-whole time practice)
• A Cost Accountant (in-whole time practice) or
• A Company Secretary (in- whole-time practice)

Why Enterslice?

Contact Enterslice for the NBFC Compliance process. We have certified professionals who will help you in the filing of Form AOC-4 NBFC and Form AOC-4 CFS NBFC and help you in the end to end process of filing with the Registrar.

Takeaway

The Ministry of Corporate Affairs introduced new norms for NBFCs to bring it at par with other companies. Now every Non-Banking Financial Company is required to comply with the Indian Accounting Standards (Ind AS). NBFCs shall file their financial statements with the Registrar with Form AOC-4 NBFC and Form AOC-4 CFS NBFC. Non-Banking Financial Companies must file a financial report and consolidated financial statements like other companies. For submitting the financial statements professionals help is suggested. They will help you in filing both the forms and also in the certification process.

Form AOC-4 NBFC (Ind AS) and Form AOC-4 CFS NBFC (Ind AS) can be accessed from the below link:

Rules_31012020

1. https://www.indiacode.nic.in/handle/123456789/2398?sam_handle=123456789/1362