India tightens rules around company disclosures

India tightens rules around company disclosures

The Indian government has made short-notice changes to what companies must disclose, including any dealings in crypto-currency and any relationships they may have with dissolved companies.
The Ministry of Corporate Affairs (MCA) announced the changes in late March, with the new rules kicking in on April 1 2021.

The new rules mean companies must now:

  • Disclose their activities involving cryptocurrencies, including any profit or loss on such transactions. They must also disclose the amounts of crypto-currency they hold.
  • Provide details of any shortfall in corporate social responsibility (CSR) spending in the previous years and state the reasons for failing to meet targets.
  • Disclose loans that companies have granted to related parties that are repayable on demand or without specific repayment terms must be declared in terms of amount and percentage to total loans granted.
  • Keep an audit trail of their accounting transactions carried out using accounting software, which must record these transactions, including the amounts involved and dates they took place.