April 2016 · MCA vide notification dated 04.04.2016 has notified the Companies (Filing of...
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1 | Page V G Bulletin April 2016 CS VIKAS GUPTA V G & COMPANY Practicing Company Secretary
Transcript of April 2016 · MCA vide notification dated 04.04.2016 has notified the Companies (Filing of...
1 | P a g e
V G Bulletin April 2016
CS VIKAS GUPTA
V G & COMPANY
Practicing Company Secretary
Vikas Gupta
Company Secretary
2 | P a g e Mobile +91 9717755479, 8802054740 E-mail ID: [email protected]
INDEX
Particulars Page No.
Section – A : Regulatory Updates
Ministry of Corporate Affairs of India 3
Securities and Exchange Board of India 3
Reserve Bank of India 4
Customs 5
Central Excise 5
Service Tax 6
Delhi Value Added Tax 7
Central Board of Direct Taxes 7
Directorate General of Foreign Trade 8
Trade Marks 8
Company Law Board 8
Ministry of Housing and Urban Poverty Alleviation 9
Section – B : Article
Good Corporate Governance - Ethos and Importance 10
Vikas Gupta
Company Secretary
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Ministry of Corporate Affairs of India
1. MCA vide notification dated 04.04.2016 has notified the Companies (Filing
of Documents and Forms in Extensible Business Reporting Language)
Amendment Rules, 2016 which provides that the companies in banking,
insurance, power sector, non-banking financial companies and housing
finance companies need not filed
financial statement in XBRL mode.
2. MCA has notified vide notification dated
06.04.2016 some amendments to
Schedule III of the Companies Act, 2013.
3. MCA has released the list of Frequently Asked Questions on the various
issues related to the filing. Stakeholders are requested to make note of the
common queries. Stakeholders are also requested not to raise duplicate
Helpdesk tickets.
4. MCA vide general circular no. 04/2016 dated 27.04.2016 has clarified that
the amended Accounting Standards should be used for preparation of
accounts for accounting periods commencing on or after the date of
notification.
Securities and Exchange Board of India
1. SEBI vide press release no. 77/2016 dated 12.04.2016 has amended the
Guidance Note dated August 24, 2015 on SEBI (Prohibition of Insider
Trading) Regulations, 2015 with effect from February 17, 2016 to clarify
that exit offer is also exempted from the restriction on contra trade under
the PIT Regulations.
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2. SEBI has issued Frequently Asked Questions on SEBI (Delisting of Equity
Shares) Regulations, 2009. These FAQs
offer only a simplistic explanation/
clarification of terms/concepts related
to the SEBI (Delisting of Equity Shares)
Regulations, 2009. Any such
explanation/clarification should not be
regarded as an interpretation of law
nor be treated as a binding
opinion/guidance from the SEBI.
3. SEBI vide circular no. CIR/IMD/DF1/48/2016 dated 21.04.2016 has laid
down framework on Electronic book mechanism for issuance of debt
securities on private placement basis. This electronic book mechanism
would be mandatory for all private placements of debt securities in primary
market with an issue size of Rs.500 crores and above, inclusive of green
shoe option, if any.
Reserve Bank of India
1. RBI vide notification no. RBI/2015-16/363 DNBR (PD)
CC.No.077/03.10.001/2015-16 dated 07.04.2016 has decided that
concentration of credit/ investment norms shall not apply to a systemically
important non-banking financial company not accessing public funds in
India, either directly or indirectly, and not issuing guarantees.
2. RBI vide RBI/2015-16/371 A.P. (DIR
Series) Circular No.59 dated 13.04.2016
has clarified that keeping deposits with
an Indian company by persons resident
outside India, in accordance with section
160 of the Companies Act, 2013, is a
current account (payment) transaction
and, as such, does not require any
approval from Reserve Bank. All refunds
of such deposits, arising in the event of selection of the person as director or
getting more than twenty five percent votes, shall be treated similarly.
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3. RBI has granted general permission vide notification no. RBI/2015-16/370
DNBR.CC.PD.No.078/03.10.038/2015-16 dated 13.04.2016 to Non-
Banking Financial Company- Micro Finance Institutions, acting as
Channelizing Agents for Schemes operated by Central/State Government
Agencies.
4. RBI has issued Master Direction on Amalgamation of Private Sector Banks,
Directions, 2016 on 21.04.2016 which shall be called the Reserve Bank of
India (Amalgamation of Private Sector Banks) Directions, 2016.
5. RBI vide notification no. RBI/DBR/2015-16/21 Master Direction
DBR.PSBD.No.95/16.13.100/2015-16 dated 21.04.2016 has notified
Master Direction on Issue and Pricing of shares by Private Sector Banks,
Directions, 2016.
Central Board of Excise and Customs
CUSTOMS
1. CBEC vide Notification No. 29/2016-Customs dated
26.04.2016 has amended notification No.
12/2012-Customs dated 17.03.2012 to prescribe
simplified procedure for units engaged in
Maintenance, Repair and Overhaul of aircrafts.
CENTRAL EXCISE
1. CBEC has issued CENVAT Credit (Fourth Amendment) Rules, 2016 which
substituted clause (i) of sub-rule (3) of rule 6 of CENVAT credit rules, 2004
whereby the manufacture shall now pay an amount
equal to six per cent of value of the exempted goods
and seven per cent of value of the exempted
services subject to a maximum of the sum total of
opening balance of the credit of input and input
services available at the beginning of the period to
which the payment relates and the credit of input and input services taken
during that period.
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Company Secretary
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2. CBEC has notified the CENVAT Credit (Fifth Amendment) Rules, 2016 to
amend sub-rule (7) of rule 4 & rule 6 of CENVAT Credit Rules, 2004.
3. CBEC vide notification no. 19/2016-Central Excise dated 26.04.2016 has
amended notification No. 12/2012-Central Excise dated 17.03.2012 to
prescribe simplified procedure for units engaged in Maintenance, Repair and
Overhaul of aircrafts.
SERVICE TAX
1. CBEC vide notification No. 22/2016-Service Tax dated 13.04.2016
has exempted service-tax on services provided by Government or a local
authority. The ministry has inserted new entries after entry 53 exempting
services provided by Government or a local authority by way of issuance of
passport, visa, driving license, birth
certificate or death certificate; services
where the gross amount charged for
such services does not exceed Rs.
5000/-, services by way of allowing a
business entity to operate as a telecom
service provider or use radio frequency
spectrum during the financial year
2015-16 on payment of license fee or
spectrum user charges, etc.
2. CBEC vide notification No. 23 /2016-Service Tax dated 13.04.2016 has
amend rule 6 sub-rule (2), of Service Tax (Determination of Value) Rules,
2006, which provided that this clause shall not apply to any service
provided by Government or a local authority to a business entity where
payment for such service is allowed to be deferred on payment of interest or
any other consideration.
3. CBEC vide notification No. 24 /2016-Service Tax dated 13.04.2016 has
amended rule 7 of Point of Taxation Rules, 2011.
4. CBEC vide circular No. 192/02/2016-Service Tax dated 13.04.2016 has
issued Clarification on issues regarding levy of Service Tax on the services
provided by Government or a local authority to business entities.
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Company Secretary
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Delhi Value Added Tax
1. Government of NCT of Delhi vide notification
no. F.3(30)/Fin(Rev-I)/2015-16/dsvi/121
dated 12.04.2016 has issued Delhi Value
Added Tax (Amendment) Rules, 2016.Return
Forms DVAT-16 and DVAT-17 have been
amended wherein dealers are now required to
furnish details of purchases and sales in
Annexure 2A and 2B along with the
description of goods and their codes. Forms
DVAT-30 and DVAT-31 have also been
amended.
Central Board of Direct Taxes
1. CBDT has notified vide notification no. 5/2016 dated 06.04.2016 Electronic
Verification Code (EVC) for electronically filed Form of Appeal to
Commissioner (Appeals).
2. CBDT has issued Income Tax (10th Amendment) Rules, 2016 vide dated
28.04.2016 which shall come into force on
01.07.2016. The Board has made submission
of report in relation to the approval of in-house
research and development facility in Part A of
Form 3CL and quantifying the expenditure
incurred on in-house research and
development facility by the company during the
previous year and eligible for weighted
deduction in Part B of Form No.3CL, electronic. It has also introduced a new
Form 3CLA to be submitted electronically to the Secretary, Department of
Scientific and Industrial Research on or before the due date specified in
Explanation 2 to sub-section (1) of section 139 of the Act for furnishing the
return of income, for each succeeding year.
3. CBDT has notified Income Tax (11th Amendment) Rules, 2016 vide dated
29.04.2016 which shall come into force on 01.06.2016. A new Rule 26C has
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Company Secretary
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been inserted which provides that evidences shall be required from
employees in Form 12BB for furnishing claims with regard to deduction of
tax under section 192 of Income tax Act 1961. It has also amended the due
dates of filing TDS Returns. Rules prescribed for mode of payment to
Government account of tax deducted at source or tax paid under sub-
section (1A) of section 192 also stand amended.
Directorate General of Foreign Trade
1. DGFT vide notification no. 2/2015-2020 dated
11.04.2016 has introduced a new definition of e-
commerce in Foreign Trade Policy (2015-2020).
Trade Marks
1. Controller General Patents, Designs and Trademarks issued a public notice
in relation to abandonment of application of
Trademark. It has been notified that
abandonment orders passed by the Registrar
of Trade Marks after 20.03.2016 are being
kept in abeyance and the applicants or their
authorised agents concerned can file the reply
to examination reports containing office
objections either through comprehensive E-
filing services of trademarks available at the
official website or through the given email id. Further, in case, the reply has
already been filed and the office has erroneously treated applications as
abandoned, information to this effect may also be sent through email along
with copy of the reply already filed.
Company Law Board
1. CLB vide order dated 26.04.2016 has amended the
Company Law Board Regulation, 1991 through
which official timing for hearing at CLB has been
changed from "10.30 a.m. to 1.30 p.m. and 2.30
p.m. to 4.30 p.m." to "10.30 a.m. to 1.00
p.m. and 2.00 p.m. to 4.30 p.m.".
Vikas Gupta
Company Secretary
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Ministry of Housing and Urban Poverty Alleviation
1. The Real Estate (Regulation and Development) Act, 2016 came into force on
May 01, 2016. Union Ministry of Housing and Urban Poverty Alleviation
(HUPA) notified 69 of the total 92 sections of the Act to bring it into force
from 1 May 2016. As per the
notification, Rules under the
Act have to be formulated by
the Central and State
Governments within a
maximum period of six
months i.e., by 31 October
2016 under Section 84 of
the Act. Likewise, Regulatory Authorities, upon their constitution get three
months time to formulate regulations concerning their day to day
functioning under Section 85 of the Act and Real Estate Appellate Tribunals
shall be formed within a maximum period of one year that is by 30 April
2017. These fast track Tribunals shall decide on the disputes over the
orders of Regulatory Authorities in 60 days time.
Vikas Gupta
Company Secretary
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GOOD CORPORATE GOVERNANCE - ETHOS AND IMPORTANCE
CS. Rajarathinam S.I.A.&A.S.
E-mail: [email protected]
INTRODUCTORY
There are no shortcuts to growth. The world of business is not for greedy
crowds but for people, who have a greater vision, a higher goal, a sense of
direction and discipline, capacity for hard work and a credibility borne out of
consistent demonstration of good business practices. It is felt that this is what
corporate governance is all about.
CORPORATE GOVERNANCE
Indeed ‘Corporate Governance’ sounds like a new phrase. It is almost a new
‘mantra’ which might cure all the ailments of corporate business world, a proof
of human ingenuity in the efficacy of which one
can afford to have faith. But is it really a new
concept? To many it would appear to be nothing
but the eternal concept of righteous thought,
righteous action and righteous behaviour.
‘Shrimad Bhagawat Gita’ enunciates the concept
of Corporate Governance as under:
“Those who do not follow the ordained path
indicated in scriptures and work purely under
the dictates of their own desires, such people
attain neither success, nor satisfaction, nor perfection and nor a state of higher
existence”
Those who are familiar with the great literary personality of Munshi Premchand
would be aware of one of his immortal short stories titled “Panch Parameswar”
which stands out like a beacon of light in today’s situation which is
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characterized by moral ambiguity. It brings home in the most telling manner
what people in exalted positions ought to do. How their role must transcend
their own personal prejudices and interests and reach for fairness and justice?
Board of Directors are indeed with same position as the Panchas. In their
hands, does not rest only the power to take decision on issues confronting
them; they are also responsible for imbibing the operation of a business entity
with a set of values which give the business a strategic purpose that not only
encompasses the objective of giving shareholders the value for their
investment; not only the objective of giving other stakeholders the reasons to
continue their association with the enterprise but also the inspiration to
corporate Managers to initiate and develop good business practices and to
attain orderliness and efficiency within the enterprise. In their minds and
hearts should, therefore, sit a person who is larger than the sum total of all the
stakeholders in a company. Concept of ‘Trusteeship” propounded by Mahatma
Gandhi also bears a close affinity with the concept of good ‘Corporate
Governance’. If Directors of a Company think of themselves as trustees of
shareholders as well as other stakeholders interest, they would perhaps never
take reckless or motivated decisions.
PROBLEMS FACED BY SMALL AND MEDIUM SIZED ENTERPRISES
It is hardly an exaggeration to say that we are almost frightened to praise a
Company for fear of reading some disaster
or scandal about it in tomorrow’s news
papers. It is not uncommon to find that at
one point of time reports received about a
company indicate that everything was all
right and then quite suddenly the situation
deteriorated. BCCI case, NFL Urea scam,
Securities scam, CRB collapse, Baring Bank
collapse, Satyam Computers collapse and
many others are all a pointer to the poor
state of Corporate Governance. From whichever perspective one may look at
the situation, be it as business people and industrialist, as professional
advisers or senior Managers, as an investor or vendor, there is an inescapable
feeling that all is not well in the way many large business enterprises are run.
If all is not well in large organizations, it is a matter of concern for everybody
associated with and interested in the smooth, efficient and reliable functioning
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Company Secretary
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of corporate, how many more problems the small companies may be facing.
This position often manifests ‘itself’ through an all pervading sickness of
medium and small business enterprises. Many of these problems faced by
small and medium sized enterprises, may be due to lack of resources to operate
all the protective systems and controls. How can the owners, directors,
bankers, the financial institutions, auditors and other regulatory bodies be
absolved from their responsibility in making these enterprises sick? Whenever,
a new scam makes news paper headlines, people wonder how the chief
executive of the enterprise was allowed by his fellow directors to get away with
highly risky decisions? And why did the bankers continue lending to an
enterprise which was manifestly following a dangerous course?
The Board minutes often indicate an unquestioning and often unanimous
approval of questionable investment decisions. There is little evidence in the
minutes of Board meetings to suggest that tough questions are ever asked
about such decisions. Is it because Board meetings have been treated more as
social occasions than opportunities for governance? No doubt, the concept of
Corporate Governance has many adherence today but perhaps even to-day
there still is a tendency to regard this concept as a matter of window dressing
to please the outside world.
HONEST AND PRUDENT DECISIONS, NEED OF THE HOUR TO ACHIEVE
GOALS
Today we are living in the age of plastic
money. People have become accustomed to
cutting their coat not according to the cloth
they have, but according to the cloth others
have promised to deliver. The monetary
economics in modern world is such that large
part of assets of a business enterprise are
comprised of promises and expectations. Every
business operates on the hope that those who
must pay its dues will pay before their own
debts are cleared. Almost every business is
thus functioning under the shadow of potential financial disaster. In such a
situation every enterprise must necessarily function with such prudence
efficiency that no one is exposed to risk of default. The debate on non-
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Company Secretary
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performing assets goes on endlessly, but it would serve its purpose only if we
are able to keep average level of performing sufficiently high, then the business
enterprise would be in safe waters. If Corporate management in a business
takes and prudent decisions, this should not be a difficult goal to achieve. To
recapitulate Corporate Governance may ultimately be defined in concrete
terms as a system of structuring, operating and controlling a Company so as
to achieve the following objectives:-
(i) Fulfilling the long term strategic goal of the owners which after survival
may consist of building shareholder value or establishing dominant
market share or maintaining a technical lead in a chosen sphere, or
something else, but certainly not be the for all the organizations.
(ii) To conserve, develop and motivate human resource by caring for the
interest of employees – past, present and future. This will comprise the
whole life cycle encompassing all aspects of human resource management
such as planning future needs, recruitment, training, working
environment, severance and retirement procedures as well as the welfare
of the pensioners.
(iii) Harmonising with the needs of the environment and the local community,
both in terms of the physical effects of the Company’s operations on the
surroundings and the economic and cultural interaction with the local
population.
(iv) Maintaining excellent relations with both customers and suppliers in
terms of such matters as quality of service provided, considerate ordering
and account settlement procedures etc.
(v) Proper compliance with all the applicable legal and regulatory requirement
under which the company is carrying out its activities.
BOARD OF DIRECTORS TO PLAY AN EFFECTIVE ROLE
A well run organisation must function
in such a way that all the above
requirements are catered for and can
be seen to be operating effectively by
all the interested groups concerned.
For this, the Board of Directors has to
be as effective as any other area and
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Company Secretary
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has to contribute and add value. In fact, a non performing Board can cripple a
Company just as surely as a non performing business area or product range.
Only a regular Annual Board Room Audit can ensure that code of good
Corporate Governance is in place and that the performance of the Board is
adding value to the Company. At the same time, there must be sufficient
transparency in the affairs of a Company for this to be readily noticeable by all
those who are concerned with the Company, without their relying on extensive
and expensive independent monitoring procedures.
