ANNUAL

PERFORMANCE REPORT
2021-22

राष्ट्रीय वित्तीय रिपोर्टिं ग प्राधिकरण

NATIONAL FINANCIAL REPORTING AUTHORITY
 TABLE OF
CONTENTS
CHAPTER - I
1. About NFRA 6
1.1 Introduction 6
1.2 Evolution and Background 6
1.3 Mandate and Domain 7
1.4 Powers 8
1.5 NFRA Charter 9
1.6 Core Values 9
1.7 Organisational Structure 10
CHAPTER - II
2. Key Results & Achievements 12
2.1 Monitoring and Enforcing Compliance with accounting
standards and auditing standards 12
2.2 Professional Standards & Quality Management 18
CHAPTER - III
3. Interaction with key stakeholders 22
3.1 Members of financial reporting supply chain 22
3.2 NFRA’s Engagement with Media 22
3.3 Complaint Management & Whistle-blower facilitation 25
CHAPTER - IV
4. Information Technology Initiatives 26
4.1 Data Management Initiatives 26
4.2 Cyber Security Initiatives 27
4.3 NCAS Project 27
CHAPTER - V
5. Resource Management 29
5.1 Finance and Budgeting information 29
5.2 HR Management 30 NATIONAL FINANCIAL REPORTING AUTHORITY 3
4 NATIONAL FINANCIAL REPORTING AUTHORITY
 FROM THE DESK OF THE CHAIRPERSON
NATIONAL FINANCIAL REPORTING AUTHORITY

It is my pleasure to present the Annual Performance Report of the

National Financial Reporting Authority for the year 2021-22, to convey
to our stakeholders an overview of the significant activities of NFRA.
Despite the challenges posed by Covid, significant strides continued
to be made by NFRA with its issuance of audit quality review reports
and financial reporting review reports.
NFRA took steps to enhance stakeholder engagement and issued
a consultation paper, which was very well received. I take this
opportunity to thank the respondents for their valuable suggestions.
The valuable inputs received have been taken into cognizance, for
instance, as we embark upon on-site inspections in the current year.
NFRA also continued its mission to help establish a high-quality financial reporting framework
by reviewing and providing recommendations on the proposals received from ICAI on certain
accounting standards. In May 2021, NFRA published the first lists of audit firms/auditors who
had not filed required forms as per NFRA Rules 2018. NFRA continued its efforts to liaise with the
corporate data management center of MCA and various stock exchanges and other regulators for
its data requirements on companies and auditors under NFRA’s domain. An automated workflow
called NFRA Core Application System (NCAS) is under development for paperless working and
digitalizing all work within the organization.
This year was also significant as some major steps were taken towards augmenting human
resources at NFRA. A new batch of direct recruits joined NFRA. Efforts are ongoing towards
capacity building and learning from international best practices.
Requisite outreach was also maintained through webinars organized as part of Azadi Ka Amrit
Mahotsav (AKAM), in October 2021, on various issues of topical interest. We received an
overwhelming response to a quiz, which was opened to the public and organized under the aegis
of AKAM. It demonstrated the value of interest in NFRA exhibited by diverse section of populace
of the country and we hope to continue to meet the expectations from us, as we move forward.
I hope this performance report proves useful to our stakeholders in having an overall view of the
functioning and activities of NFRA in 2021-22.
I thank my predecessors Shri Rangachari Sridharan and Shri Ashok Kumar Gupta for their
stewardship of NFRA during their respective tenures and thank all our stakeholders for their
cooperation and contribution and hope that NFRA continues to grow from strength to strength

(Dr Ajay Bhushan Prasad Pandey)

Chairperson, NFRA

NATIONAL FINANCIAL REPORTING AUTHORITY 5

 01 ABOUT NFRA
CHAPTER

1. About NFRA

1.1. Introduction

1.1.1. National Financial Reporting Authority (NFRA) is statutory body constituted

on 1st October 2018 under Section 132 of the Companies Act, 2013. The main
objective is to protect public interest and the interests of investors, creditors
and others associated with companies or bodies corporate by establishing high
quality standards of accounting and auditing, and exercising effective oversight
of accounting functions performed by the companies and bodies corporate and
auditing functions performed by auditors.

1.2. Evolution and Background

1.2.1. It was experienced at various forums that the existing regulatory apparatus
provided under the Chartered Accountants Act, 1949 was unable to maintain
required discipline and accountability amongst Chartered Accountancy
professionals due to challenges posed by self-regulation of the profession. The
Standing Committee on Finance-Companies Bill 2009, while discussing the
role of auditors, discussed the need for establishment of an independent audit
regulator. Further, the Companies Law Committee Report, 2016, highlighted
unsatisfactory oversight over the profession prior to establishment of NFRA.

1.2.2. The Hon’ble Supreme Court of India vide its judgment dated February 23, 2018, in
the matter of S. Sukumar vs The Secretary, Institute of Chartered Accountants of
India & Ors., issued the direction to the Union of India for considering appropriate
legislation and mechanism for oversight of profession of auditors on the lines
of Sarbanes-Oxley Act, 2002, and Dodd Frank Wall Street Reform and Consumer
Protection Act, 2010 in US. Accordingly, the Committee of Experts (COE) was set
up. The COE in its recommendation stated that the creation of NFRA has been
done on basis of international best practices and highlighted the failure of the
self-regulatory model.

1.2.3. Therefore, in line with the global trend of regulatory shift from self-regulatory
organisations to an independent regulatory and oversight body, Parliament, after
due deliberation and on the recommendations of various expert committees,

6 NATIONAL FINANCIAL REPORTING AUTHORITY

 created an independent regulatory authority with the establishment of NFRA in
terms of Section 132 of the Companies Act, 2013.

1.3. Mandate and Domain

1.3.1. NFRA derives its mandate from Section 132 of the Companies Act, 2013. As per
Sub Section (2) of Section 132 of the Companies Act, 2013, NFRA shall:

(a) make recommendations to the Central Government on the formulation and

laying down of accounting and auditing policies and standards for adoption
by companies or class of companies or their auditors, as the case may be;

(b) monitor and enforce the compliance with accounting standards and auditing
standards in such manner as may be prescribed;

(c) oversee the quality of service of the professions associated with ensuring
compliance with such standards, and suggest measures required for
improvement in quality of service and such other related matters as may be
prescribed; and

(d) perform such other functions relating to clauses (a), (b) and (c) as may be
prescribed.

1.3.2. Sub Rule (1) of Rule 4 of the NFRA Rules, 2018, provides that the Authority shall
protect the public interest and the interests of investors, creditors and others
associated with the companies or bodies corporate governed under Rule 3 by
establishing high quality standards of accounting and auditing and exercising
effective oversight of accounting functions performed by the companies and
bodies corporate and auditing functions performed by auditors.

1.3.3. As per Rule 3 of NFRA Rules 2018, NFRA shall have power to monitor and enforce
compliance with accounting standards and auditing standards, oversee the
quality of service under sub-section (2) of section 132 or undertake investigation
under sub-section (4) of such section of the auditors of the following class of
companies and bodies corporate, namely:-

(a) companies whose securities are listed on any stock exchange in India or
outside India;

(b) unlisted public companies having paid-up capital of not less than rupees
five hundred crores or having annual turnover of not less than rupees one
thousand crores or having, in aggregate, outstanding loans, debentures and
deposits of not less than rupees five hundred crores as on the 31st March
of immediately preceding financial year;

(c) insurance companies, banking companies, companies engaged in the

generation or supply of electricity, companies governed by any special Act
for the time being in force or bodies corporate incorporated by an Act in

NATIONAL FINANCIAL REPORTING AUTHORITY 7

 accordance with clauses (b), (c), (d), (e) and (f) of sub-section (4) of section
1 of the Act;

(d) any 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

(e) 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 in clauses (a) to (d), if
the income or networth of such subsidiary or associate company exceeds
twenty per cent. of the consolidated income or consolidated networth of
such company or the body corporate, as the case may be, referred to in
clauses (a) to (d).

1.4. Powers

1.4.1. As per Sub Section (4) of Section 132 of the Companies Act, 2013, NFRA shall:

(a) have the power to investigate, either Suo-motu or on a reference made

to it by the Central Government, into the matters of professional or other
misconduct committed by any member or firm of chartered accountants,
registered under the Chartered Accountants Act, 1949.

Provided that no other institute or body shall initiate or continue any

proceedings in such matters of misconduct where the National Financial
Reporting Authority has initiated an investigation under this section;

(b) have the same powers as are vested in a civil court under the Code of Civil
Procedure, 1908, in respect of the following matters:

(i) discovery and production of books of account and other documents;

(ii) summoning and enforcing the attendance of persons and examining

them on oath;

(iii) inspection of any books, registers, and other documents of any person
at any place.

(iv) issuing commissions for examination of witnesses or documents.

(c) where professional or other misconduct is proved, have the power to make
order for—

(A) imposing penalty of –

I. not less than one lakh rupees, but which may extend to five times of
the fees received, in case of individuals; and not less than five lakh
rupees, but which may extend to ten times of the fees received, in
case of firms;

8 NATIONAL FINANCIAL REPORTING AUTHORITY

 (B) debarring the member or the firm from-

I. for a minimum period of six months or such higher period not

exceeding ten years for being appointed as an auditor or internal
auditor or undertaking any audit in respect of financial statements
or internal audit of the functions and activities of any company or
body corporate.

II. performing any valuation as provided under section 247, for a

minimum period of six months or such higher period not exceeding
ten years as may be determined by the National Financial Reporting
Authority.

1.5. NFRA Charter

1.5.1. The objective of the National Financial Reporting Authority (NFRA) is to

continuously improve the quality of all corporate financial reporting in India.

1.5.2. The quality of corporate financial reporting will be measured and evaluated
essentially by its compliance with the law and the statutorily notified accounting
standards and auditing standards.

1.5.3. NFRA will strive for continuous improvement of corporate financial reporting
across all types of Public Interest Entities (PIEs) and across all size categories
of audit firms.

1.5.4. NFRA aims to be an organization noted for integrity, industry, and competence.

1.5.5. Persons who work for NFRA will adhere to the highest standards of
uncompromising integrity, possess a vision of transforming the quality of
corporate financial reporting, and display high levels of initiative and an unflagging
drive for their work.

1.6. Core Values

• Objectivity - No subjective action from either members or staff, openness to all facts/
views/opinions without any pre-conceived conclusions or pre-judging any matter.

• Integrity  – Across cases/persons/firms, absence of multiple standards, uniform

treatment of all those identically/similarly placed.

• Impartiality – Discharge of its functions without fear or favour.

• Independence – Equidistant from all stakeholders.

• Fairness – Not imposing unfair burdens especially with the benefit of hindsight

NATIONAL FINANCIAL REPORTING AUTHORITY 9

 • Transparency– Fair and open processes.

INTEGRITY

OBJECTIVITY IMPARTIALITY

CORE
VALUES

TRANSPARENCY FAIRNESS

INDEPENDENCE

Figure 1: Core Values of NFRA

NFRA’s functioning will at all times be mindful of the need to promote the ease and
speed of doing business and will be guided always by the overall public interest, with
all its actions being strictly anchored by and lying within, its legal mandate.

1.7. Organisational Structure

1.7.1. The National Financial Reporting Authority (Manner of Appointment and other
Terms and Conditions of Service of Chairperson and Members) Rules, 2018
provides that the National Financial Reporting Authority shall consist of the
following persons to be appointed by the Central Government, namely: -

• Chairperson;

• Three full time members; and

• Nine part time members.

1.7.2. Subsection (3B) of section 132 of Companies Act, 2013 provides that there shall
be an Executive Body of the National Financial Reporting Authority consisting
of Chairperson and full-time members of such Authority for efficient discharge
of its functions as enumerated in para 1.3.1 (b)-(d) above, which comprises
all monitoring, oversight, adjudication, and enforcement functions. Only the
responsibility to make recommendations to the Central Government on the
formulation and laying down of accounting and auditing policies and standards
for adoption by companies or class of companies or their auditors, is entrusted

10 NATIONAL FINANCIAL REPORTING AUTHORITY

 to the full Authority, which includes the Executive body and part-time members.

1.7.3. Subsection 11 of section 132 of Companies Act, 2013 provides that the Central
Government may appoint a Secretary and such other employees as it may
consider necessary for the efficient performance of functions by the National
Financial Reporting Authority under this Act and the terms and conditions of
service of the secretary and employees shall be such as may be prescribed.

1.7.4. The present sanctioned strength of NFRA stands at 69 against which persons in
position on 31st March 2022 were 26.

1.7.5. Shri Rangachari Sridharan held the office of Chairperson, NFRA from 1st April 2021
to 30th September 2021 and Shri Ashok Kumar Gupta, Chairperson, Competition
Commission of India held the additional charge of NFRA from 1st November
2021 to 31st March 2022 during the reporting year. Dr Prasenjit Mukherjee served
as full-time member from 1st April 2021 to 1st October 2021 during the reporting
year.

Figure - 2: Organisational Structure

NATIONAL FINANCIAL REPORTING AUTHORITY 11

 02 KEY RESULTS &
CHAPTER ACHIEVEMENTS

2. Key Results & Achievements

2.1. Monitoring and Enforcing Compliance with accounting standards and auditing standards

NFRA Rules 2018 lay down how NFRA shall protect the public interest and the interests of
investors, creditors and others associated with the companies or bodies corporate falling
within its jurisdiction. Rule 7 to 9 of the NFRA Rules 2018 specifically require the Authority
to monitor and enforce compliance with accounting standards and auditing standards
and oversee the quality of audit services. These Rules also lay down the processes by
which such functions are to be carried out. NFRA has issued audit quality review reports
and financial reporting quality reviews, so far, in exercise of its oversight, monitoring and
enforcement functions.

2.1.1. Audit Quality Review Reports (AQRRs)

During the year under report, AQRs in respect of two large company audits were
published:

2.1.1.1. Statutory Audit of Jaiprakash Associates Limited (JAL) for the

financial year 2017-18 carried out by Rajendra K. Goel & Co. (Firm
Registration No. ICAI FRN 001457N) (AQR Dated 27.08.2021)

The following is a summary of the most important observations of the

AQRR.

• The audit firm’s reporting in the “Basis of opinion” section of

Independent Auditors Report was false and misleading. The impact
of the transactions violative of accounting and auditing standards,
as identified in this AQRR were such that the profit before tax of Rs.
351.71 crores, as reported in the financial statements, would have
turned into a loss of at least Rs. 3,215.77 crores. This impact was
both material and pervasive. As a result, the audit firm was bound,
under the Standards on Auditing, to issue an adverse opinion (Para
8 of SA 705).

• The audit firm did not obtain sufficient appropriate audit evidence
to understand the impact that the insolvency petition against

12 NATIONAL FINANCIAL REPORTING AUTHORITY

 Jaypee Infratech Limited (JIL) had on the company (JAL). Further,
the audit firm did not perform any audit procedures to understand
as to why the company (JAL) was made a party to this insolvency
petition. This indicates gross negligence and total lack of due
diligence on the part of the audit firm. Even assuming, but not
admitting, that the audit firm was not able, after exercising due
diligence, to ascertain the impact of the pendency/ongoing CIRP/
legal proceedings of JIL with the NCLT Allahabad and the Hon’ble
Supreme Court of India, the audit firm should have issued a
disclaimer of opinion.

• The audit firm compromised with the effectiveness of the auditor’s

report by widespread use of Emphasis of Matter (EOM) Paragraphs.
They had provided eight EOMs in the financial statements of FY
2017-18. Para A3 of SA 706 states that widespread use of Emphasis
of Matter Paragraphs diminishes the effectiveness of the auditor’s
communication of such matters. Further, the audit firm failed to
obtain sufficient appropriate audit evidence for providing these
EOMs that was required as per SA 706.

• The audit firm had failed to appropriately and sufficiently evaluate

the use of going concern basis of accounting by the management
and thus failed to note the implications thereon in the auditor’s
report.

• In assessing Risk of Material Misstatement (ROMM), the audit firm

did not satisfactorily provide rebuttal on the presumption of ROMM
due to fraud in respect of revenue recognition and management
override of controls. This ultimately resulted in several violations
of applicable provisions of Ind AS and SAs.

• The audit firm had not identified and assessed ROMM through
understanding the entity and its environment, including the entity’s
internal control. There were no ROMM procedures performed
by the Audit at the assertion level. The audit firm had failed to
perform the audit with professional skepticism and had failed to
obtain sufficient appropriate audit evidence to reduce ROMM to an
acceptably low level.

• JAL’s financial exposure in its subsidiaries, associates and joint

ventures amounting to Rs. 6,894.02 crore was not properly valued
as per the applicable accounting standards. The audit firm had
failed to obtain sufficient appropriate evidence on correct valuation
of JAL’s investment in these entities.

NATIONAL FINANCIAL REPORTING AUTHORITY 13

 • The company’s accounting treatment for non-current assets held
for sale was not in accordance with the accounting standards,
which led to a huge misstatement in the financial statements. The
audit firm also failed to obtain sufficient appropriate audit evidence
in this regard.

• The audit firm had made a complete travesty of the EQCR process
by appointing the engagement partner himself as its EQCR
(Engagement Quality Control Review) partner, thereby negating the
very fundamental objectives of the SAs.

• The audit firm had failed to maintain audit documents as per the
requirements of SA 230.The integrity and reliability of the audit File
is questionable due to inconsistencies arising out of such lack of
documentation.

2.1.1.2. Statutory Audit of IL&FS Transportation Networks Limited (ITNL)

for the Financial Year 2017-18 carried out by SRBC & Co LLP
(Firm Registration Number (FRN): 324982E/E300003) (AQR Dated
23.09.2021)

The following is a summary of the most important observations of the

AQRR.

• The initial appointment of SRBC & Co LLP, and the continuation

of SRBC & Co LLP, as statutory auditor of ITNL, was prima facie
illegal and void. Nevertheless, NFRA has proceeded to examine
compliance by the audit firm with the SAs, in their performance of
this Engagement, without prejudice to this finding.

• The audit firm had failed to appropriately and sufficiently

evaluate the use of the going concern basis of accounting by the
management and had thus failed to note the implications thereof
in the auditor’s report.

• In assessing the Risks of Material Misstatements (ROMM),

the audit firm did not assess the susceptibility of the financial
statements to material misstatement due to fraud, did not identify
and assess revenue recognition and management override of
controls as serious potential risks, which ultimately resulted in
several violations of applicable Ind AS and SAs, as highlighted in
the AQRR, thus making the financial statements subject to serious
material misstatements and therefore unreliable.

• ITNL’s financial exposure to its subsidiaries, associates and joint

ventures amounting to Rs. 3,346 crore was not properly valued as

14 NATIONAL FINANCIAL REPORTING AUTHORITY

 per the applicable accounting standards because the audit firm
had failed to obtain sufficient appropriate evidence to justify the
valuation of ITNL’s investment and loans to these entities.

• The company’s losses during 2017-18 were understated by at least

Rs. 2021 crore on account of unjustified reversal of Expected Credit
Loss (ECL) on loans given to the SPV and on trade receivables, and
due to incorrect impairment valuation. This is excluding the impact
due to incorrect treatment of the letter of comforts amounting
to Rs 2654 crore, which should have been correctly treated as
financial guarantees as per the accounting standards, the effect
of which on profit/loss is not quantified. NFRA further concludes
that there is a clear attempt to obscure material information in the
financial statements by vague and misleading disclosures by the
management regarding ECL reversal.

• The audit firm had not evaluated the work done by management’s
expert while adopting the expert’s opinion, and thus the auditor’s
opinion expressed under the Companies’ (Auditor’s Report) Order,
2019 (CARO) clause (iii) stating that the terms and conditions
of the Company’s loans of Rs. 111.20 crore to joint ventures
and to the not-fully owned subsidiaries at zero interest rate are
not prejudicial to the company’s interest, was not supported by
sufficient appropriate evidence and is in violation of requirements
of SA 500.

• The Audit Firm’s EQCR (Engagement Quality Control Review)

partner had failed to report material misstatements known to him
to appear in a financial statement with which he is concerned in
his professional capacity and has not exercised due diligence to
obtain sufficient information to objectively evaluate the significant
judgements of the Engagement Team and conclusions reached by
them.

• The audit firm had not determined the persons comprising TCWG
(Those Charged with Governance). Further, NFRA has not found
any communication to TCWG relating to auditor’s independence,
and the relationships and other matters between the firm, network
firms.

• The audit firm had failed to maintain documents as per SA 230.

The integrity of the audit file is questionable due to tampering and
inconsistency pointed out at several places in the AQRR.

NATIONAL FINANCIAL REPORTING AUTHORITY 15

 2.1.2. Financial Reporting Quality Review Reports (FRQRRs)

During the year under report, two FRQRs were published.

2.1.2.1. Financial Reporting Quality Review (FRQR) Report in respect of KIOCL

Ltd for the FY 2019-20 (FRQRR dated 28.09.2021)

NFRA Conclusions/Recommendations in respect of its observations

have been categorized into ‘High’ and ‘Moderate’ Impact. Some of
the main high impact non-compliances with respect to accounting
standards on part of KIOCL were as follows:

• KIOCL’s accounting policy for Foreign Exchange (Fx) Forward

Contracts is erroneous and it is non-compliant with the
classification and measurement requirements of Ind AS 109,
Financial Instruments (Ind AS 109).

• The accounting policy for a material element i.e., revenue (with

corresponding impact on related assets such as trade receivables,
inventories etc.) as stated in its statement of significant accounting
policies is erroneous. This erroneous accounting policy raises
questions over the reliability and accuracy of the financial
statements of the company.

• Adequate evidence, such as valuation reports, if any, have not been

provided by KIOCL in respect of application of Indian Accounting
Standard (Ind AS) 36, Impairment of Assets in the case of the Blast
Furnace Unit that was non-operational. Also, there is no evidence
that impairment loss computations were considered/reviewed/
presented to audit committee and the Board of Directors (BoD) of
the company.

• There were many other errors in disclosures in the notes to financial

statements. These disclosures were either not relevant or useful to
the users of financial statements and had the potential to obscure
the material information in the financial statements.

• NFRA had recommended KIOCL to examine if it is necessary to

prepare and publish restated financial statements as per Ind AS 8
and Section 131 of the Companies Act, 2013.

• KIOCL vide its action taken report-interim, dated 08.02.2022,

informed that an external expert agency was appointed to guide
the company to comply with the observations made in FRQRR and
for further improvement in compliances with applicable Ind AS
and Schedule III of the Companies Act, 2013.

16 NATIONAL FINANCIAL REPORTING AUTHORITY

2.1.2.2. Financial Reporting Quality Review Report (FRQRR) of Prabhu Steels
Industries Limited for FY 2019-20 (FRQRR dated 14.02.2022)

Some of the main observations classified as high impact with respect

to Non-Compliances of Accounting Standards on part of the company
are as follows:

• PSIL is a listed company and therefore it was required to follow

the Indian Accounting Standards notified under Section 133 of
the Companies Act, 2013. However, the company had provided
contradictory disclosures in the Director’s Report and the notes
to annual accounts regarding the fundamental aspect of the
applicable accounting framework followed in the preparation of
financial statements for the year 2019-20.

• By not complying with the material requirements of Ind AS

Framework and providing disclosures under previously applicable
accounting framework, the company had violated the provisions
of the companies act, 2013 regarding the preparation and
presentation of the financial statements.

• The company failed to present a component of financial statements

i.e., statement of changes in equity in the financial statements as
required by sub-section 40 of section 2 of the CA, 2013, Ind AS 1,
and Schedule III to the CA, 2013.

• The company had failed to comply with the key requirements of

Ind ASs on financial instruments and fair value measurement viz.
Ind AS 109, Ind AS 107, Ind AS 32 and Ind AS 113; it had failed
to perform proper evaluation of impairment loss allowance for its
major category of its financial assets viz. trade receivables, loans
and advances and bank balances; in the financial statements,
there is absence of disclosures required by Ind AS 107 regarding
significance of financial Instruments, nature and extent of risk
arising from the financial instruments.

• The company had failed to make appropriate disclosure as

required by Schedule III to CA, 2013 regarding its borrowings in
the form of loans taken and the assets in the form of loans and
advances given.

• The company had also failed to provide depreciation on its idle

plant and machinery, thus violated the underlying principle of Ind
AS 16.

NATIONAL FINANCIAL REPORTING AUTHORITY 17

 • In view of the errors/omissions being pervasive across the entire
set of financial statements, PSIL had agreed to prepare and publish
restated financial statements as per Companies Act, 2013, within
90 days.

2.2. Professional Standards & Quality Management

Subsection 2(b) of section 132 of Companies Act 2013 prescribes that NFRA shall oversee
the quality of service of the professions associated with ensuring compliance with such
standards, and suggest measures required for improvement in quality of service and
such other related matters as may be prescribed.

2.2.1. Review of un-notified standards

2.2.1.1. Standards on Auditing and ICAI Handbook of Auditing Pronouncements

During July 2021, NFRA performed a high-level review of text of the

auditing and assurance standards issued by the ICAI. This review helped
correct references to applicable accounting standards frameworks
and Companies Act, to correctly reflect significant reforms/changes
made during the last decade. ICAI was advised to review the entire
set of auditing pronouncements to address issued pointed out and
submit the amendments for NFRA’s review and recommendation to
Ministry of Corporate Affairs for further action required under section
143 (10) of Companies Act 2013.

2.2.1.2. Revision of Accounting Standards for Companies other than those

required to follow Indian Accounting Standards (Ind AS) i.e. Micro,
Small and Medium-sized Companies (MSMCs)

During the year, NFRA reviewed the ICAI’s proposals on revision of

existing accounting standards notified under Companies (Accounting
Standards) Rules 2006. These accounting standards (ASs) are
primarily applicable to MSMCs and were proposed to be upgraded to
bring them closer to high quality Ind ASs substantially converged with
globally accepted IFRS Standards. In this context, NFRA performed
preliminary research on the nature and size of six (6) lakh companies
to whom these revised set of ASs will be mandatory applicable.

Based on this preliminary research, NFRA advised the ICAI following

course of actions.

• Perform a comprehensive and robust ‘Regulatory Impact

Assessment’ in line with contemporary global practices;
comprehensive study and research should be performed on the
costs to the preparers of compliance with these revised ASs
and their technical resource capacity, which should be evaluated

18 NATIONAL FINANCIAL REPORTING AUTHORITY

 against the likely benefits to all the stakeholders of AS Companies
segment

• Develop the approach paper after extensive nation-wide

consultation with the primary stakeholders i.e., the preparers
- MSMCs and auditors - MSMPs (micro, small and medium-size
practitioners).

• Align the revised ASs to the commercial needs, business size, and
capacity of MSMCs to comply with the prescribed standards and
make them relevant to the users of these financial statements.

2.2.2. New Standards for recommendation

2.2.2.1. Ind AS Amendment Proposals Reviewed and Approved

During the year, NFRA continued its mission to enable high quality
financial reporting framework by reviewing and recommending the
ICAI proposals on convergence with high quality globally accepted
IFRS Standards. NFRA reviewed and approved a total of three (3)
proposals of ICAI dated 28.04.2021, 09.08.2021 and 27.10.2021
for amendments pursuant to amendments in corresponding IFRS
Standards. Authority meetings were held on 20.05.2021, 209.09.2021
and 19.01.2022 to deliberate on these Ind AS amendment proposals.
The amendments primarily related to the following seven (7) Ind ASs
and consequential amendments in a few other Ind ASs.
S. Title of Ind AS Amendment ICAI NFRA Date of Gazette
No Title Proposal Meeting Recommendation Notification
Date Date to MCA
1. Ind AS 116, Amendment 28.04.2021 20.05.2021 27.05.2021 18.06.2021
Leases – COVID 19
relief
2. Ind AS 103, References 09.08.2021 20.09.2021 30.09.2021 23.03.2022
Business to New
Combinations Conceptual
Framework
3. Ind AS 101, Annual 9.8.2021 20.09.2021 30.09.2021 23.03.2022
First-time Improvements
adoption of (2021)-
Ind ASs Subsidiary as
a First-time
Adopter
4. Ind AS 109, Annual 9.8.2021 20.09.2021 30.09.2021 23.03.2022
Financial Improvements
Instruments (2021)- Fees
in the ‘10 per
cent’ Test for
Derecognition
of Financial
Liabilities

NATIONAL FINANCIAL REPORTING AUTHORITY 19

 S. Title of Ind AS Amendment ICAI NFRA Date of Gazette
No Title Proposal Meeting Recommendation Notification
Date Date to MCA
5. Ind AS 41, Annual 9.8.2021 20.09.2021 30.09.2021 23.03.2022
Agriculture Improvements
(2021)-
Taxation in
Fair Value
Measurements
6. Ind AS 37, Onerous 27.10.2021 19.01.2022 08.02.2022 23.03.2022
Provisions, Contracts–
Contingent Cost of
Liabilities and Fulfilling a
Contingent Contract
Assets
7. Ind AS 16, Proceeds from 27.10.2021 19.01.2022 08.02.2022 23.03.2022
Property, Intended Use
Plant and
Equipment

Figure 3: Authority Meeting dated 20.05.2021

Figure 4: Authority Meeting dated 20.09.2021

20 NATIONAL FINANCIAL REPORTING AUTHORITY


Figure5: Authority Meeting dated 19.01.2022

2.2.2.2. Ind AS Proposals under Review: NFRA has received the following
proposals relating to issuance of a new Ind AS on Insurance Contracts
and amendments to Ind AS on Investment Properties:
2.2.2.2.1 New Standard on insurance contract viz. Ind AS 117,
Insurance Contracts: This is a new Ind AS which will replace
the existing Ind AS that is applicable for accounting of
Insurance Contracts. Ind AS 117 is based on IFRS 17, which
is the first comprehensive and truly international IFRS
Standard that established the accounting for insurance
contracts issued by a company. Ind AS 117 introduces
paradigm shift in the way the insurance contracts are
accounted and reported presently. It is a complete overhaul
of the approach and principles of accounting and reporting
of insurance contracts. Therefore, NFRA had initiated
following steps to reach out to the critical stakeholders of
this Ind AS.
• Two technical sessions were conducted by The Institute
of Actuaries of India on 7th & 8th July 2021.
• NFRA is in discussion with the Insurance Regulatory
and Development of India (IRDAI) and awaiting ‘in-
principle’ approval of this new standard from them as
this standard is expected to have significant impact on
the accounting, reporting and operational aspects of the
insurance companies in India.
2.2.2.2.2 Amendment to Ind AS 40, Investment Property: There is a
proposal to amend Ind AS 40, Investment Property, wherein
the option to measure the investment property at fair value
and recognise the resultant fair value gains or losses in
the Statement of Profit and Loss. NFRA is in the process
of evaluating whether the reasons and concerns for not
incorporating this fair value option while initial notification
of this Ind AS during 2015 have now been adequately
addressed to prevent any misuse of these fair value option.

NATIONAL FINANCIAL REPORTING AUTHORITY 21

 03 INTERACTION WITH KEY
CHAPTER STAKEHOLDERS

3 Interaction with key stakeholders

The primary stakeholders include the Parliament, Ministry of Corporate Affairs, financial
statement preparers, auditors, users of financial statements, academia, and ICAI. Other key
stakeholders include government departments and ministries, as well as organisations and
individuals with specific interest in the subjects of the accounting and audit quality like SFIO,
SEBI, RBI, etc and media.

3.1 Members of financial reporting supply chain

Auditors impart credibility to the information presented in the financial reports. Preparers
produce the financial reports and are primarily responsible for the accuracy and
reliability of the information in them. Users are the raison d’être of financial reporting and,
therefore, are central to its purpose. Academicians use financial reports in their teaching
and research. Auditors, preparers, users, and academia have significant stakes in the
development of accounting and auditing regulations and in their effective monitoring and
enforcement.

Acknowledging these members as the significant stakeholders in NFRA’s functioning,

NFRA released consultation paper on Enhancing Engagement with Stakeholders Report
and invited public comments for this exercise.

3.2 NFRA’s Engagement with Media

NFRA has established communication policy that guides our interactions with external
stakeholders. NFRA undertake a range of actions to communicate its messages to its
clients through its website, like:

3.2.1 Speeches and interviews

Speech delivered by Shri R. Sridharan, Chairperson, National Financial Reporting

Authority on 16-September-2021 at CII Conference on Financial Reporting and
Governance Framework.

3.2.2 Press briefs

Press briefs are also issued highlighting the contents of disciplinary orders,
AQRRs, FRQRRs, etc.

22 NATIONAL FINANCIAL REPORTING AUTHORITY

3.3 Interaction with Indian Corporate Law Service Academy, Ministry of Corporate Affairs
(ICLSA)

During January 2022, a comprehensive five (5) day training programme was conducted
for the officers of 10th Batch of Indian Corporate Law Service of Government of India.
Overall objective of the training programme was to provide a holistic exposure to the
newly joined ICLS officers regarding the role, responsibilities and functioning of the NFRA.
The training programme structure covered the following key aspects:

• Statutory Mandate, Purpose and Objective of setting up of the NFRA.

• 21st Century Era of Independent Audit and Accounting Regulators- Global Perspective:
International Forum of Independent Audit Regulators (IFIAR), NFRA Peer Group in U.S.,
U.K., Australia.

• Role of NFRA in corporate governance

• Policy and process of review and recommendation of Accounting and Auditing

Standards in line with international standards

• NFRA database of companies and auditors

• Techniques and tools for monitoring compliance with auditing standards – audit
quality review reports

• Techniques and Tools for monitoring compliance with Accounting Standards –

financial reporting quality review reports

• Enforcement and disciplinary mechanisms for compliance with the applicable

standards

Figure6: ICLS Training at NFRA on 20.01.2022

NATIONAL FINANCIAL REPORTING AUTHORITY 23

 3.4 Webinars, events and Quiz for awareness generation and engagement

3.4.1 Webinars on the occasion of Azadi Ka Amrit Mahotsav (AKAM) – October 2021

NFRA actively participated in the nationwide celebration of Rastriya Ekta Diwas

during the week 24 to 31 October 2021. During this week, NFRA conducted the
following webinars on 26th and 27th October 2021:

(a) Strengthening Audit Firms’ Culture by Dr R. Narayanswamy, Chairperson,

Technical Advisory Committee, NFRA

(b) 21st Century- Era of Independent Accounting & Auditing Regulator by CA

Vidhyadhar Kulkarni, Senior Consultant, NFRA

(c) Auditors Role and Responsibility under the Companies Act by Advocate Shri
Suhas Tulzapurkar, Member, Technical Advisory Committee, NFRA

(d) Fraud in a financial statement Audit by CA Ms. Vidya Rajarao Member,

Technical Advisory Committee, NFRA

GOVERNMENT OF INDIA
WEBINAR NATIONAL FINANCIAL REPORTING AUTHORITY

DAY 1: 26th October, 2021

21st Century- Era of Independent

Accounting & Auditing Regulator
at 04:00PM-05:00PM IST
by CA Vidhyadhar Kulkarni

Dr R. Narayanswamy Ms. Vidya Rajarao

Strengthening Audit Firms’ Culture
at 05:00PM-06:00PM IST Ex -Professor of Accounting &
Finance in IIM-B & Chair of Founder and Director of Fraudopedia
by Dr R. Narayanswamy Technical Advisory Committee, Private Limited & Member of the
NFRA Technical Advisory Committee, NFRA

DAY 2: 27th October, 2021

Auditors Role and Responsibility under

the Companies Act
at 04:00PM-05:00PM IST
by Shri Suhas Tuljapurkar

Fraud in a Financial Statement Audit Shri Suhas Tuljapurkar CA Vidhyadhar Kulkarni

at 05:00PM-06:00PM IST Founder Director of Legasis & Chartered Accountant with three
decades of experience in Financial
by Ms. Vidya Rajarao Member of Technical Advisory
Reporting & Sr. Consultant in
Committee, NFRA
NFRA

Join Webinar at: https://webcastmca.nic.in

For further details, please visit https://nfra.gov.in/

Figure7: Details of Webinar organised as part of AKAM

3.4.2 Nationwide Quiz on Accounting and Auditing Standards in India- 24.12.2021 to

26.01.2022

With the objective to promote understanding and awareness of accounting

standards and auditing standards among the citizens of the country, NFRA
conducted a nationwide quiz programme on the topic ‘Auditing and Accounting
Standards in India’, as part of the commemoration of 75 Years of India’s
Independence ‘Azadi Ka Amrit Mahotsav’. The quiz competition was conducted

24 NATIONAL FINANCIAL REPORTING AUTHORITY

 through MyGov portal of Government of India in which NFRA received
overwhelming response from all over the country with a total participation of
27,299 people. This quiz was also a part of NFRA’s initiative to spread awareness
regarding its primary objective of continuously improving the quality of financial
reporting framework in India.

3.5 Stakeholder Consultation Papers

3.5.1 NFRA Consultation Paper on Enhancing Engagement with Stakeholders Report

of Technical Advisory Committee (March 2021)

In June 2021, NFRA had issued a consultation paper (“CP”) seeking public
comments in relation to the action it proposes to take on the recommendations of
its Technical Advisory Committee (TAC), on enhancing NFRA’s engagement with
Stakeholders. TAC was set up to provide NFRA with inputs from the perspective
of users, preparers, and auditors of financial statements; and advise on suitable
methods for promoting awareness relating to compliance with accounting and
auditing standards. The TAC submitted its first report and recommendations
on “Enhancing Engagement with Stakeholders” in March 2021, and the key
areas of recommendations were NFRA’s approach towards stakeholders
engagement, inspections, NFRA’s regulatory capacity, independence, funding
and accountability of NFRA. The details can be accessed at http://nfra.gov.in/
consultation_papers.

3.5.2 Consultation Paper on Statutory Audit and Auditing Standards for Micro, Small
and Medium Companies (MSMCs)

In September 2021, NFRA had issued a consultation paper to seek public

views on the issues relating to mandatory audit of Micro, Small and Medium-
sized Companies (MSMCs). The details can be accessed at http://nfra.gov.in/
consultation_papers.

3.6 Complaint Management & Whistle-blower facilitation

NFRA has issued guidelines on procedure for Complaint handling in NFRA and separate
dedicated platform, in the name of https://nfracoms.nic.in/ for online submission of
complaints. Special procedure has also been devised for handling complaints from
whistleblowers where the complainant requests to keep his name and contact details
confidential.

NATIONAL FINANCIAL REPORTING AUTHORITY 25

 04 INFORMATION
TECHNOLOGY
CHAPTER
INITIATIVES

4 Information Technology Initiatives

4.1 Data Management Initiatives

4.1.1 Database of Companies

Rule 3 of the NFRA Rules 2018, prescribes the classes of companies and their
auditors within the purview of the functions and duties of the NFRA relating to
monitoring and ensuring compliance with accounting and auditing standards,
overseeing the quality of service of the professions associated with ensuring
compliance with such standards. To perform the functions and duties of the
Authority, one of the important pre-requisites is to compile and establish a
comprehensive master database of the companies and their auditors within
the scope of the Authority. This exercise involves following critical steps and
reconciliations of data from different sources.

Critical steps involved are identification and verification of the primary data source
and reconciliation of data (such as Corporate Identification Number (CIN) which
is dynamic) from different sources. In this regard, NFRA has been engaging with
the Ministry of Corporate Affairs (MCA) and its Corporate Data Management
(CDM) infrastructure, three recognised and active Stock Exchanges in India, and
other Regulators such as RBI, IRDAI and Central Electricity Authority.

This comprehensive exercise of compilation of data base of companies covered

by NFRA Rules/their auditors from CDM and its reconciliation with other
external data sources was performed for the first time as of 31.03.2019 and is
being updated on annual basis. NFRA published provisional database for the
companies under the regulatory ambit of National Financial Reporting Authority
on 7th May 2021.
No. of Companies
# Specified Class of Companies
31/03/2021 31/03/2020 31/03/2019
1. Listed Companies 5,563 5,522 5,356
Unlisted Public Companies meeting prescribed
2. 1,156 1,053 1,011
financial parameters
Companies engaged in Specialised Activities
3. (Insurance, Banking, Electricity etc) and those 101 170 98
governed by Special Acts
5 Three years carry forward 322 322 -
Total 7,142 7,037 6,465

26 NATIONAL FINANCIAL REPORTING AUTHORITY

 4.1.2 Monitoring Filing of Annual Return – NFRA 2

Rule 4(2) of the NFRA Rules 2018 requires the Authority, inter alia, to maintain
details of particulars of auditors appointed in the companies and bodies
corporate specified in Rule 3 of NFRA Rules 2018. Further, Rule 5 of the aforesaid
Rules requires every auditor of the companies prescribed under Rule 3 to file an
annual return by 30 November each year in the form specified by the Central
Government. Accordingly, the Central Government has specified filing of annual
return in ‘Form NFRA - 2’ which contain certain important details about the
auditors.

The details required to be filed in Form NFRA 2 relate to details of the companies
audited, audit fees and non-audit fees received, particulars of the partners and
employees of the audit firm, affiliation or membership of any audit firm network,
details of disciplinary proceedings initiated against the auditor and quality
control policies of the audit firm.

NFRA, based on its database of companies as of the end of its first financial
year i.e., 31.03.2019, commenced monitoring the filing of Form NFRA - 2 by the
auditors for the first Reporting Period 01.04.2018 to 31.03.2019 (2018-19). NFRA
had sent intimations to 1,500 audit firms for non-filing of the form and advised
ICAI to create awareness of this statutory compliance among its members.

4.2 Cyber Security Initiatives

During the year NFRA took many initiatives to enhance security checks like:

4.2.1 Transfer of data from auditors and preparers on secured NIC server with enhanced
security protocol. File transfer protocol was shifted from FTP to SFTP at secured
port number 22.

4.2.2 Third party Information Security audit of NFRA’s web tools was conducted.

4.2.3 Applications were shifted to secured SSL protocol.

4.2.4 Captcha was made mandatory for all types of submissions on the website to
protect from spam and password decryption.

4.3 NFRA has launched a cloud-based IT tool for its operations management

NFRA Core Application System (NCAS) is being developed for paperless working and
workflow within the organization. NCAS is designed to enable the collection, handling and
processing of huge volumes of documents, end-to-end management of quality review,
investigation, and enforcement activities.

As the entire infrastructure is hosted on cloud servers and user access is enabled through
highly secured web interfaces, NCAS will also help NFRA staff in functioning remotely
without any hindrance. NCAS is designed in such a way that all the required documents
and workspaces are created/stored/enabled within the application, so that staff changes

NATIONAL FINANCIAL REPORTING AUTHORITY 27

 and hardware issues do not affect the smooth functioning of the organisation.

NCAS is being developed by the National Informatics Centre (NIC) under the Ministry of
Electronics and Information Technology of the Government of India.

During the year 2021-22 NFRA rolled out various modules of NCAS such as Library, NFRA
forms, Complaint Receipt, and the Audit Quality Review. A few other modules like the
Financial Reporting Quality Review, Disciplinary action and Complaint processing are
under implementation.

Figure-8: NFRA Core Application System (NCAS) Inauguration 24-09-2021

The module also has capabilities to connect with other databases of external agencies
such as stock exchanges and Corporate Data Management of the Ministry of Corporate
Affairs through application protocol interfaces.

28 NATIONAL FINANCIAL REPORTING AUTHORITY

 05 RESOURCE
MANAGEMENT
CHAPTER

5 Resource Management

5.1 Finance and Budgeting information

(In Rupees)
Budget Actual
Code Description
Allocation Expenditure
NATIONAL FINANCIAL REPORTING AUTHORITY
6 267124000 238648127
(Sub Minor)
60001 SALARIES (Object Head) 50640000 39940400

60002 WAGES (Object Head) 5635000 4892325

60003 OVERTIME ALLOWANCE (Object Head) 75000 0

60006 MEDICAL TREATMENT (Object Head) 1975000 1442305

60011 DOMESTIC TRAVEL EXPENSES (Object Head) 431000 239685

60012 FOREIGN TRAVEL EXPENSES (Object Head) 4000000 0

60013 OFFICE EXPENSES (Object Head) 4100000 3261515

60014 RENTS, RATES AND TAXES (Object Head) 157222000 157221786

60016 PUBLICATIONS (Object Head) 200000 0

OTHER ADMINISTRATIVE EXPENSES (Object
60020 1000000 99063
Head)
60026 ADVERTISING AND PUBLICITY (Object Head) 600000 0

60028 PROFESSIONAL SERVICES (Object Head) 16246000 15930568

60032 CONTRIBUTIONS (Object Head) 2000000 0

INFORMATION TECHNOLOGY - OFFICE
69913 23000000 15620480
EXPENSES (Object Head)
TOTAL 267124000 238648127

*The drawing and disbursement function of NFRA was carried out through Ministry of
Corporate Affairs during this period and the audit of Ministry of Corporate Affairs has
been conducted by office of the Comptroller and Auditor General of India.

NATIONAL FINANCIAL REPORTING AUTHORITY 29



5.2 HR Management
The overall mandate is to create a work environment that can continuously identify,
nurture and utilize the capabilities of its officers and staff through appropriate policies in
the area of training, career development and performance management.

The existing welfare measures such as housing, medical, etc. are extended to the
employees of NFRA under various approved institutional schemes.

5.2.1 MANPOWER

NFRA sanctioned strength as on 31.03.2022 was 69. However, the total strength
of officers and staff as on 31.03.2022 was 26.

30 NATIONAL FINANCIAL REPORTING AUTHORITY

5.2.2 Recruitment

Key importance is laid to the competency requirements of the individuals,

required for contributing effectively and efficiently towards realization of the
organizational goals and resulting achievements. Hence stringent recruitment
process is adopted to ensure quality personnel are inducted into the system and
greater importance is attached towards continuous development of the human
resources, periodically in tune with the programmatic requirements.

NFRA issued result of direct recruitment of 7 Managers and 7 Assistant Manager

on 04.01.2022 and issued offer letters on 20.01.2022

5.2.3 Training and Human Resources Development

“Intellectual growth should commence at birth and cease only at death.”

- Albert Einstein

In today’s dynamic world, regular training is essential for any organisation.

It has become vital to maintain pace with technological evolution and meet
rising expectations of its stakeholders. Suitable training ensures that human
resources operate at peak performance levels. It makes the employees creative,
constructive, imaginative, innovative, professional and technology enabled.

5.2.3.1 OBJECTIVES

• Keep updated and enhance professional knowledge, skills and attitude

needed for better performance of our employees and organization.

• Promote better understanding of professional requirements and

sensitization to the professional, socio-economic, and political
environment.

• Bring about right attitudinal orientation.

5.2.3.2 HIGHLIGHTS OF TRAINING ACTIVITIES DURING THE YEAR 2021-2022

5.2.3.2.1 Staff Training on financial instruments related Ind ASs – May

to June 2021

Ind ASs relating to financial instruments form an important

part of the Ind AS Framework. Accounting aspects of financial
instruments in the Ind AS Framework are very comprehensive
but complex and require extensive training by the subject
matter experts. Accordingly, a comprehensive training plan
covering the following Ind ASs was designed, and technical
sessions were held during May to July 2021.

• Ind AS 32, Financial Instruments: Presentation

NATIONAL FINANCIAL REPORTING AUTHORITY 31

 • Ind AS 109, Financial Instruments

• Ind AS 107, Financial Instruments: Disclosures

• Ind AS 113, Fair Value Measurement

5.2.3.2.2 Ind AS 117 (IFRS 17) Training by Institute of Actuaries

Ind AS 104, current standard for accounting of Insurance

Contracts will be replaced by a new comprehensive and robust
standard called Ind AS 117, Insurance Contracts, which in turn
is based on its international equivalent viz. IFRS 17 issued
by the International Accounting Standards Board of IFRS
Foundation. This new standard brings in paradigm shift in the
approach towards recognition, measurement, presentation
and disclosures of insurance contracts and requires extensive
knowledge and expertise about the actuarial valuation and
practices. Therefore, two technical sessions were organised
on 7th and 8th July 2021 wherein the subject matter experts
from the Institute of Actuaries presented the key technical
aspects of Ind AS 117 to staff and officials of NFRA.

Figure-9: Training session provided to NFRA by experts

from Institute of Actuaries

5.2.3.2.3 CDM Training

Corporate Data Management infrastructure of MCA, GOI,

has been identified as an important source of data and
information for the operational activities of the NFRA, starting
from establishment of primary database of companies and
auditors which are within the ambit of NFRA’s monitoring and
supervisory functions. In order to gain greater insights into
the functionalities and utilities of the CDM, interactive training
session was conducted on 30.06.2021 between the officials

32 NATIONAL FINANCIAL REPORTING AUTHORITY

 of NFRA and the Division handling CDM infrastructure of MCA,
GOI.

Figure10: CDM Training conducted on 30.06.2021

5.2.3.2.4 NCAS Training: To familiarize and use NCAS to its potential, a

training programme was organised about its architecture and
usage.

NCAS High Level Architecture
Auditors Auditee NFRA Complainants

Auditor Data Company Data NCAS Complaints

Interface Interface Interface Interface
Access Layer
User Interface Layer (CSS, Ajax , Java Script, JQuery, HTML)

Application Security Layer - Authentication / Authorization Layer Security Layer

User Profile Management User Access Control List (ACLs) Roles Audit Logs

CORE Components Integration

Auditing and Accounting Standards Library Company Data Auditor Data Audit Quality Review SMS, E-Mail

FRQR Complaint Disciplinary Proceeding Aadhaar / e-Sign

Application Server, Database Server

Sensitivity: Internal & Restricted © 15

Figure11: NCAS Training Programme

5.2.4 Performance Evaluation

Performance Evaluation is a vital element of employees’ growth and development

and realization of diverse need of each individual.

Objective of performance evaluation in NFRA are:

5.2.4.1 Training and Placement Function: To assess the officer’s professional

capabilities, with a view to determining capacity building needs and
suitability for particular areas of responsibility/assignments.

5.2.4.2 Feedback and Counselling Function: To counsel the officer on

directions for improving performance, professional capabilities, and
conduct with peers, juniors, etc.

NATIONAL FINANCIAL REPORTING AUTHORITY 33

 5.2.4.3 Planning of Work Function: To be a tool for developing a work plan for
the year

5.2.4.4 Promotion Function: To make an objective assessment of the officer’s

performance in the current assignment, including performance in
training, study courses and deputation outside the government,
based on monitorable inputs, relative to his/her peers, with a view
to determining suitability for higher responsibilities and special
assignments.

5.2.4.5 Recognition Function: To identify genuinely exceptional work

accomplished, including innovations, with a view to giving due
recognition.

5.2.4.6 Strengthening Governance Function: To enable officers to identify

systemic shortcomings in the organization with a view to improving
governance standards.

Thus, recognizing the significance of performance evaluation, NFRA

adopted APAR (Annual Performance Assessment Report) system to
evaluate its employees in diligent manner.

5.2.5 Gender Balance

To achieve gender equity, NFRA tries to mainstream gender across all programmes
and projects and tries to create a gender-sensitive work environment. Following
areas are focused for this objective:

• When designing programme and project activities, the NFRA targets

appropriate participants and strives to maintain balance of gender roles and
responsibilities with a commitment to simultaneously advancing long-term
strategic gender interests.

• All employment decisions related to recruitments, transfers, compensation,

and promotion are made without gender discrimination.

• NFRA’s benefits policy is equitable and responsive to the need to balance

work and family.

• NFRA works towards creating an environment where non-discriminatory

working relationships and respect for diversity in work and management
styles is encouraged.

• NFRA also organised events to increase awareness of gender equity and

felicitate Women Workforce:

o One-day awareness programme on the Sexual Harassment of Women at

Workplace (Prevention, Prohibition and Redressal) Act, 2013 at NFRA on
09.12.2021.

34 NATIONAL FINANCIAL REPORTING AUTHORITY


Figure-12: One day awareness programme about POSH Act, 2013 on
09.12.2021.

Figure-13: Celebration of International Women’s Day on 08.03.2022

5.2.6 Other HR activities undertaken by NFRA:

5.2.6.1 Celebration of Vigilance Awareness Week: Integrity remains the

significant virtue for any organization. It is a core value for NFRA as
mentioned in its Charter. On the occasion of the Vigilance Awareness
Week 2021, all the employees took the integrity pledge to fight
corruption and be an important part of multi-stakeholder approach to
fight corruption.

NATIONAL FINANCIAL REPORTING AUTHORITY 35


Figure14: Vigilance Awareness Week – 2021 on 26.10.2021

5.2.6.2 Celebration of Swacchta Pakhwada: ‘Swachh Bharat Abhiyan’ is

a massive mass movement that seeks to create a Clean India. The
employees of NFRA took Swachhta Pledge to devote 100 hours per
year, that is two hours per week, to voluntarily work for cleanliness.

Figure15: Employees of NFRA taking Swacchta
Pledge on 18-08-2021

5.2.6.3 Constitution Day Oath Ceremony: Constitution Day also known as

‘Samvidhan Divas’, is celebrated in our country on 26th November
every year to commemorate the adoption of the Constitution of India.
On 26th November 1949, the Constituent Assembly of India adopted
the Constitution of India, which came into effect from 26th January
1950. In this spirit, NFRA employees took an oath to preserve and
protect the constitution of India.

36 NATIONAL FINANCIAL REPORTING AUTHORITY


Figure16: NFRA staff and officers taking oath on 26.11.2021

5.2.6.4 NFRA Vaccine Drive: NFRA organized vaccination drive against

COVID-19 virus for its employees on 13.09.2021.

Figure17: Vaccine Drive organised by NFRA on 13.09.2021

NATIONAL FINANCIAL REPORTING AUTHORITY 37