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he Company Secretaries Benevolent Fund (CSBF) provides safety net to Company Secretaries who are members of T the Fund and their family members in distress. st CSBF (With Effect from 1 April 2012) • Registered under the Societies Registration Act, 1860 • Recognised under Section 12A of the Income Tax Act, 1961 BACK COVER (COLOURED) COVER II/III (COLOURED) • Subscription I Contribution to Fund qualifies for the deduction under section BOG of the Income Tax Act, 1961 Non – Appointment Non – Appointment • Has a membership of about `12,000 Per Insertion 75,000 Per Insertion 50,000 4 Insertions 2,70,000 4 Insertions 1,80,000 Eligibility 6 Insertions 3,96,000 6 Insertions 2,64,000 A member of the Institute of Company Secretaries of India is eligible for the membership of the CSBF. 12 Insertions 7,65,000 12 Insertions 5,10,000

How to join FULL PAGE (COLOURED) HALF PAGE (COLOURED) • By making an application in Form A (available at www.icsi.edu/csbf) along with one time subscription of `10,000/-. Non – Appointment Appointment Non – Appointment Appointment • One can submit Form A and also the subscription amount of `10,000/- ONLINE through Institute’s web portal: www. Per Insertion 40,000 10,000 Per Insertion 20,000 5,000 icsi.edu. Alternatively, he can submit Form A, along with a Demand Draft or Cheque for `10,000/- drawn in favour of 4 Insertions 1,44,000 36,000 4 Insertions 72,000 18,000 ‘Company Secretaries Benevolent Fund’, at any of the Offices of the Institute/ Regional Offices/Chapters. 6 Insertions 2,11,000 52,800 6 Insertions 1,05,600 26,400 12 Insertions 4,08,000 1,02,000 12 Insertions 2,04,000 51,000 Benefits PANEL (QTR PAGE) (COLOURED) EXTRA BOX NO. CHARGES • `7,50,000 in the event of death of a member under the age of 60 years • Upto `3,00,000 in the event of death of a member above the age of 60 years Per Insertion 10,000 3,000 For ‘Situation Wanted’ ads 50 • Upto `40,000 per child (upto two children) for education of minor children of a deceased member in deserving cases (Subject to availability of space) For Others 100 • Upto `60,000 for medical expenses in deserving cases • Limited benefits for Company Secretaries who are not members of the CSBF MECHANICAL DATA Full Page - 18X24 cm Half Page - 9X24 cm or 18X12 cm Quarter Page - 9X12 cm Contact F The Institute reserves the right not to accept order for any particular advertisement. For further information/clarification, please write at email id [email protected] or contact Mr. Saurabh Bansal, Executive on F The Journal is published in the 1st week of every month and the advertisement material Spl. telephone no.011-45341088. should be sent in the form of typed manuscript or art pull or open file CD before 20th of Attraction any month for inclusion in the next month’s issue. For further information write to: The Editor CHARTERED SECRETARY rebate on the total billing for 36 insertions For more details please visit www.icsi.edu/csbf in 3 years in any ‘ICSI House’, 22, Institutional Area, Lodi Road, New Delhi- 110 003 category Phones : 41504444, 45341000; Fax : 91-11-24626727, 24645045 E-Mail: [email protected]; Website: http://www.icsi.edu The Council CONTENTS President l Mamta Binani ISSN 0972-1983 ® Vice President l Shyam Agrawal (Dr.) CHARTERED SECRETARY Members [ Registered under Trade Marks Act, 1999 ] (in alphabetical order) Vol. : XLVII n No. 01 n Pg 1-140 n January-2017 l Ahalada Rao V. l Amardeep Singh Bhatia l Ashish C. Doshi 1. From the President 13 l Ashish Garg l Atul H Mehta l Gopalakrishna Hegde 2. Articles 23 l Gopal Krishan Agarwal l Mahavir Lunawat l Makarand M. Lele 4. Legal World 87 l Rajesh Sharma l Rajiv Bajaj l Ramasubramaniam C. 5. From the Government 97 l Ranjeet Kumar Pandey l S. K. Agrawala l Satwinder Singh 6. News From the Institute 113 l Vijay Kumar Jhalani l Vineet K. Chaudhary 7. Miscellaneous 133 l Yamal Ashwinkumar Vyas

Secretary QR Code/Weblink of Chartered Secretary Journal l Dinesh C. Arora https://www.icsi.edu/JournalsBulletins/CharteredSecretary.aspx Editorial Advisory Board Annual Subscription 01 Chairman Inland : Rs. 1000 (Rs. 500 for Students of the ICSI) l S K Agrawala Foreign : $100; £60 (surface mail) Single Copy : Rs. 100

Members ‘Chartered Secretary’ is normally published in the first week of every month. n Non- (in alphabetical order) receipt of any issue should be notified within that month. n Articles on subjects of l Ashu Gupta (Ms.) n l Deepak Kukreja interest to company secretaries are welcome. Views expressed by contributors are n l D K Jain (Dr.) their own and the Institute does not accept any responsibility. The Institute is not in l D P Gupta any way responsible for the result of any action taken on the basis of the advertisements n n l Gourav Vallabh (Prof.) published in the journal. All rights reserved. No part of the journal may be l G R Bhatia reproduced or copied in any form by any means without the written permission of the l H M Choraria Institute. n The write ups of this issue are also available on the website of the Institute. l N K Jain l Puttaparthi Jagannatham Edited, Printed & Published by l Pradeep K Mittal Dr. S.K.Dixit for The Institute of Company Secretaries of India, l Prithvi Haldea ‘ICSI House’, 22, Institutional Area, Lodi Road, New Delhi- 110 003. l R Radhakrishnan Phones : 41504444, 45341000, Grams : ’COMPSEC’ l Sanjeev Kapoor Fax : 91-11-24626727 l Tridib Kumar Barat E-Mail : [email protected] Editor & Publisher Website : http://www.icsi.edu l S.K. Dixit (Dr.)

Consulting Editor Mode of Citation: CSJ (2017)(01/--- (Page No.) l V. Gopalan Design & Printed at Legal Correspondent M. P. Printers B-220, Phase II, Noida-201305 l T. K. A. Padmanabhan Gautam Budh Nagar, U. P. - India www.mpprinters.co.in CHARTERED SECRETARY I JANUARY 2017 3 ICSI IMAGES 01. 4 04. 03. 08. 06. 05. 02. 07. 05 03 u u u u u u u u 07 01 Dr. Reddy’s Laboratories Limited- Abhijit Mukherjee, (COO), CS Sandeep Poddar (Company Secretary) receiving the certificate on behalf of the company. Dabur Limited- Dr. Ajay Dua (Independent Director), P D Narang (Group Director- Corporate Affairs), CS A K Jain (VP(Finance) & Company Secretary) receiving the certificate on Certificates of Recognition conferred on - Bharti Airtel Limited (CS Rajendra Chopra, Senior VP & CS) & CS Chirag Bhagat, Associate Corporate Secretarial) receiving the certificate SittngonthedaisfromLeft: CSDineshCArora,ShyamAgrawal,Smt.NirmalaSitharaman,MamtaBinaniand CSVineetKChaudhary. CSMamtaBinaniseengreeting ChiefGuestNirmalaSitharaman(Hon’bleMinisterofState(I/C)Commerceand Industry). behalf ofthecompany. Bharat ForgeLtd.)receivingtheawardonbehalf oftherecipient. Lifetime AchievementAwardfortranslating ExcellenceinCorporateGovernanceintorealitywasconferredonBabasahebNKalya ni, (CMD,BharatForgeLtd)-AmitKalyani(ED, Release ofICSIPublicationProjectGovernance. OtherpublicationsrealisedontheoccasionwereReferencerReconciliationofShareCapitalAudit&GenderdiversityinBoardrooms. Management AcademyPrivateLimited,Kolkata),andCSJKJain(CFO,DCMShriram Ltd.) Limited (IL&FS)andMD,IIDCLtd.),RitulJoshi(ModeratorSeniorJournalist),Prof. AsishKBhattacharyya(AdjunctProfessorinIMTGhaziabadandChairmanoftheRiverside Panel DiscussiononTheProminence of Governance in the wake of Economic & SocialReforms– Sitting fromLeft:CSParitoshGupta(CE,InfrastructureLeasing&FinancialServices on behalfofthecompany. 16th ICSI National Awards for Excellence in Corporate Governance & 1st ICSI CSR ExcellenceAwards CSR NationalAwardsforExcellenceinCorporateGovernance&1stICSI 16th ICSI 06 08 02 04 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 5 4 JANUARY 2017 I CHARTERED SECRETARY 09. 16. 15. 14. 11. 10. 13. 12. 09 u u u u u u u u 15 13 11 1st ICSI CSR Excellence Awards - ACC Limited- Medium Category - Philip Mathew (Chief Manufacturing Officer, ACC Limited) & Pratyush Panda (Corporate Head CSR, ACC Ltd.) 1stICSICSRExcellenceAwards- RelianceIndustriesLimited-LargeCategory,CSKSethuraman&hiscolleague receivingtheawardonbehalfofcompany. PrasadShanbhag,Company Secretary,Larsen&ToubroLimitedseenreceivingtheaward. AcknowledgementofCS of bestgovernedcompanies-AGSManikanthaCompanySecretary,InfosysLimitedseen receivingtheaward. Reliance Industries Limited, CS K Sethuraman & Others receiving the certificate on behalf of the company. Mindtree Limited - Krishnakumar Natarajan (Executive Chairman), Vedavalli S (Company Secretary) receiving the certificate on behalf of the company. Corporate Affairs)receivingtheawardonbehalf ofthecompany. Larsen &ToubroLimited-KuldipGoel(VP{Corporate Affairs}),ShailendraRoy(Sr.ExecutiveVicePresident(Power,HeavyEngineeringandDefence)NavinAgarwal(Manager behalf ofthecompany. Best governedCompanyaward-Infosyslimited-UBPravinRao(COO&WholeTimeDirector Infosyslimited)&CSAGSManikantha(CS,Limited)receivingtheawardon seen receivingtheawardonbehalfofcompany. CHARTERED SECRETARY 16th ICSI National Awards for Excellence in Corporate Governance & 1st ICSI CSR ExcellenceAwards CSR NationalAwardsforExcellenceinCorporateGovernance&1stICSI 16th ICSI I JANUARY 2017 16 10 12 14 5

ICSI IMAGES ICSI IMAGES 17. 6 21. 20. 19. 24. 23. 22. 18. 23 u u u u u u u u 19 21 17 CSMamtaBinanipresenting amementotoChiefGuestNirmalaSitharamanwhileCS(Dr.)ShyamAgrawaland VineetKChaudharylookon. VideoaddressbySuresh Prabhu(Hon’bleUnionMinisterforRailways). AddressontheoccasionbyChiefGuestNirmalaSitharaman(Hon’bleMinister ofState(I/C)CommerceandIndustry). Dr. RajeshAgrawal,Amogh Diwan,CSThirupalGorigeandHari Surya. ICSI–CCGRTTwo daysnon-residentialresearchColloquiumon IndianCompaniesAct–decodingunresolved mysteries-CSAhaladaRaoVaddressing. OthersittingfromLeft: Rao andCSPradeep B Kulkarni. InaugurationofCSAccelerationCentreatBangalore –StandingfromRight:CSMamtaBinani,GopalakrishnaHegde,GM Ganapathi, CSHariBabuThota,NagendraD CS MamtaBinani,AKMishra&SN Mallick. ICSI-IBBAjointSeminaronInsolvencyand BankruptcyCode,2016–Dr.MSSahoo(Chairman,IBBA)addressing.Otherssittingfr om Left:CSPriyadarshiNayak,DR.TKChand, CS VineetKChaudharyandPrakashPandya. National ConclaveonInsolvencyandBankruptcy Code,2016–OnthedaisfromLeft:CSDineshCArora,MahavirLunawat,Dr. MSSahoo(Chairman,IBBI),CSMamtaBinani, behalf ofthecompany. 1st ICSICSRExcellenceAwards-BajajCorpLimitedEmergingCategorySumitMalhotra (ManagingDirector,BajajCorpLimited)&hiscolleagueseenreceivingtheawardon 16th ICSI National Awards for Excellence in Corporate Governance & 1st ICSI CSR ExcellenceAwards CSR NationalAwardsforExcellenceinCorporateGovernance&1stICSI 16th ICSI Other Events 20 22 24 18 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 7 6 JANUARY 2017 I CHARTERED SECRETARY 26. 25. 31. 30. 29. 32. 28. 27. 29 25 u u u u u u u u 31 27 ICSIconvocationheldatMumbai –StandingfromLeft:CSAshishDoshi,Garg,BRjaju,MamtaBinani, CSAtulHMehtaandDineshCArora. SIRC–ResearchSymposium -CSKarthickVseenaddressing.OthersseatedfromLeft:KrishNarayanan, Rengarajan A,CSThirupalGorigeandJitenderAhlawat. ICSI–NSEjointworkshop onSecretarialAudit-CSCRamasubramanaiamseenaddressing.otherssittingfromLeft: Dr.VRNarasimhan,CSSujitPrasadandBRavi. from Left:CSDineshCArora,GopalakrishnaHegde,AhaladaRaoV.(Chairman,CoreCommittee, ICGD),SLBunker(Member,CCI),CSMamtaBinani,MahadevTirunagariandPSivakumar. First GlobalCongruencetopromulgateInternationalcorporategovernanceday-ChiefGuestS.Niranjan Reddy(Vice-Chairman,StatePlanningBoard,Govt.ofTelangana,Hyderabad)addressing.Otherssitting Sharma, GuestSpeaker CASumitBinaniandCSVikashJain. EIRC -NEChapter-First NorthEasternRegionalConferenceonthe CompaniesAct,2013-CSBimanDebnath addressing.OtherssittingfromLeft:CSPankaj Jain,CSRajKumar giving away the Membership Certificate, CS C Ramasubramaniam and CS Gopalakrishna Hegde. Chennai) Director, SarvashikshyaAbhayan, Guest PoojaKulkarni(IAS,State Project V, Chief Sivakumar P,CSAhaladaRao ICSI convocationheldatChennai–Standing fromLeft:CS 1st GlobalCongruencetoPromulgateInternational CorporateGovernanceDaywhileCSC.Parthasarathy(CMD,KarvyGroup)looks on. CS (Dr.)ShyamAgrawalseenpresentinga sapling toKonijetiRosaiah(FormerGovernorofTamilNaduandFormerChiefMinistero f AndhraPradesh)attheValedictorySession of Binani, CSGopalakrishnaHegde,ChiefGuestS.NiranjanReddy,MahadevTirunagari, CSPSivakumar. Release ofSouvenirduringtheInauguralsession–ondaisfromLeft:CSRVenkata Ramana,CSAhaladaRaoV.,DineshCArora,SLBunker(Member,CCI),Mamta CHARTERED SECRETARY I JANUARY 2017 30 26 28 32 7

ICSI IMAGES ICSI IMAGES 33. 8 40. 38-39 37. 36. 35. 34. 36 38 33 u u u u u u Aviewoftheinviteesanddignitaries. SittingonthedaisfromLeft: CSRanjeetPandey,RajivBajaj,VineetKChaudhary,MamtaBinani, (Dr.)ShyamAgrawalandCSDineshCArora. President,Vice CouncilMembers,Secretaryandothersperformingpujaontheoccasion. InaugurationoftheICSIhousebyDr.MaheshSharma. ArrivaloftheChiefGuestDr.MaheshSharma(Hon’bleMinisterState (IndependentCharge),MinistryofTourismandCulture). Aviewofthenewbuilding. u Address ontheoccasionbyCSVineetKChaudhary, CS(Dr.)ShyamAgrawal. 39 Inauguration of ICSI HouseatNOIDA Inauguration ofICSI 35 34 40 37 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 9 8 JANUARY 2017 I CHARTERED SECRETARY 43. 41. 53. 47. -52. 46. 42. 45. 44. 45 43 u u u u u u 47 41 u

EIRC-1stRegionalConference ofWomenCompanySecretaries– Presentation ofMemento-StandingfromLeft: CSSandipKumarKejriwal,ChiefGuestH.E. ShriTathagataRoy(Hon’ble EIRC-FulldayseminaronCS–AperfectProfessional -StandingfromLeft:H.E.KeshariNathTripathi(Hon’bleGovernor,WestBengal)addressing.Otherssitting VivekGupta NIRC-SeminaronInsolvencyandBankruptcy Code-2016JointlyorganisedwithIBBI–CSSatwinderSinghaddressing.OtherssittingfromLeft:DhananjayShukla,NKJain, Sanjeev TrainingProgrammeonPreventionofSexualHarassmentWomenatWorkplace–fromLeft: CSKhushbuMohanty,RamasubramaniamC,AshishDoshi,PriyaHingorani(Advocate, NIRC - NIRC -1stRegionalConferenceforWomenon“WomeninLeadershipRoles NIRC-SeminaronInsolvencyandBankruptcyCode-2016JointlyorganisedwithIBBI– Sitting fromLeft:CSNiteshSinha,RanjeetPandey,ManishGupta,(Dr.)MSSahoo Rina Sarkar(ACP,WomenGrievanceCell),CS ManojBanthia,CS(Dr.)PawanAgrawal(RenownedMotivationalSpeaker)andRuchika Gupta(ED,SanmargPvt.Ltd). Governor, Tripura),CS(Dr.) ShyamAgrawal,andCSGautamDugar. (Member ofParliament,RajyaSabha),CSSandip KumarKejriwal,CSSantoshAgrawalaandGautamDugar. Pandey (Dy.GeneralManager,IBBI)andCS Nitesh Sinha. K Chaudhary,SwatiVerma(Asst.Director,WECD,Govt.ofDelhi)andRiteshKumar. Supreme Court),AnuradhaSharma(Chairperson,LocalComplianceCommittee,Gurgaon), CSMamtaBinani,VishalKedia(MDandFounder,ComplykaroServicesPvt.Ltd.),Vineet Gupta, CSDivyaTandon(CompanySecretary,PowergridCorpnofIndiaLtd.),NiteshSinha, JyotiJindgar(Advisor,CCI),CSDineshCArora,PradeepDebnathandRajeevBhambri. (Chairperson, IBBI),CSRajivBajajandPradeep Debnath. (Advisor, CCI).OthersseenfromLeft:ManishGupta,CSDivyaTandon(CompanySecretary, PowergridCorpnofIndiaLtd.),CSNiteshSinha,RajeevBhambriandPradeepDebnath. u CHARTERED SECRETARY EIRC-Speakersofthe1stRegionalConference ofWomenCompanySecretaries–FromLeft:CSAnilMurarka,SavithriParekh(Sr.VP(Legal&Secretarial),PidiliteIndustries Ltd), 1st Regional 48 Conference 49 for Women I JANUARY 2017 on 50 “Women in Leadership 51 Roles – – ChallengesandSuccessMantras”–ReleaseofNIRC-ICSINewsletter-StandingfromLeftCSMonika Kohli,CSManish Challenges 52 and Success 46 42 44 53 Mantras” - CS Dinesh C Arora presenting Green Certificate and Bouquet to Jyoti Jindgar 9

ICSI IMAGES AT A GLANCE W T T Delep Goswami and Anirrud Goswami Goswami andAnirrud Delep Courts totheNCLT:RoleofPCS Up Cases Transferred from High Winding Amalgamation/Merger and Dr. KRChandratre Act, 2013 Companies the Provisotosection 2(71) ofthe Effect of ‘Public Company’: Definition of important questionissoughttobeansweredinthisarticle. more income.This and improvethetaxsystemgenerate do tostrengthen not onwhattheFinanceMinistershould T.N. Pandey Income-Tax Budget 2017 - Suggestions Concering 10 for thecorporate sectorandforthePractising Company Thereafter, MCA also issued Difficulties) Fourth Order, 2016. (Removal of Rules, 2016 and theCompanies Proceedings) two notifications, namely, the Companies (Transfer of Pending 2016 on 7thDecember, issued The MCAalsosimultaneously (NCLT) witheffectfrom15thDecember,2016. Law Tribunal Company oftheHighCourtstoNational from thejurisdiction up cases cases andwinding with amalgamation/merger dealing 2016 enforcingtheprovisionsof the Companies Act, 2013 Companies Act1956(omitted)hadworded.. have beenonthelinesofwhatsection43A the should company. If the laterinterpretationiscorrect, then theprovision of apublic a subsidiary after itbecomes even company private its basicstructureasa to retain is entitled company private that sucha it seekstoprovide articles contain,orwhether is deemedto be apubliccompanyregardlessof what its of apubliccompany a privatecompanywhichissubsidiary The mootthat question is,whetheritismerelyadeclaration varying interpretations and leads to many practical difficulties. to beaprivatecompanyinitsarticles,givesrises to continues company where suchsubsidiary of thisActeven the purposes private company, shallbe deemed to be public companyfor a not being of acompany, a companywhichissubsidiary before NCLT and NCLAT, these are significant developments Act, thePCStoappear 432 oftheCompanies 2013 allows be followedby NCLT inamalgamation cases. Since section notification dated 14th December, 2016 notifying the Rules to ArtICleS Affairs (MCA) has issued notifications dated 7th December, he proviso to the definition of ‘public company’ in section he CentralGovernment,throughtheMinistryofCorporate 2(71) of the Companies Act 2013, according to which Act 2013,according 2(71) oftheCompanies Budget focus on concessions and exemptions and and exemptions Budget focusonconcessions to prior generally made hy itisthatsuggestions PART-I : GENERAL ARTICLES P-23 P-28 P-25 P-32 R S T J.C. Seth and AnilKumarSeth of Directors to Avoid How UndueHarassment PCS.. rules forcaseswhichwillbehelpful amalgamation the of lawandthe the provisions The presentarticlehighlights jurisdiction of winding upcasescases. and amalgamation transferred in theNCLTrespectofnewly for appearance scope their practice (PCS) asthisenhances Secretaries Prabir Bandyopadhyay and Clarity Drafting Resolution withClass Hem RajTuteja Property, Consequensesof Wrongful withholdding of Company’s Some Directors against whom complaints are filed face trial enactments. of anyoneapplicable for violation prosecuted wound-up (evenvoluntarily)becausealltheir Directors are and get inIndiacollapse several smallorsickcompanies and EconomicLawsetc.Itthat is commonexperience if to help the target readers i.e. theultimate decision the target readers if tohelp tends tocoveralotofinformationas Sometimes, aResolution who a company of employees and officers of conduct the ihodn o poet o te opn b ay fie or officer any by company the of property of withholding provisions of the section seekto provide penaltyfor wrongful wrongfully withholdthe property of the company. The framework. of Directorswithintheexistinglegal harassment’ `undue Author hassuggesteda way outhowto avoid or mitigate The around. halt,withdisastrouseffectsall come togrinding some ofthem and getfrombadtoworse of suchcompanies peacefully beingunderterrorof punishment. Thefunctioning and henceunableto go undergroundperformtheirduties and appearpersonallyonalldatesof hearings, whileothers withholders of property to refund the benefits that have been the further require The provisions of thecompany. employee eey rvdd y h scin s pey efccos and efficacious speedy, is section the by provided remedy to twoyears.The may extend for atermwhich imprisonment derived from such propertyorcashindefaulttoundergo read assection452ofCompaniesAct,2013. erstwhile Act, hence, section630(whereveritappears),be cases referredtointhisarticlepertainsection630ofthe has beenpassedinrespectofnewsection,andallthelegal 452 oftheActandrelatedcaselaws.Sincenojudgment its property.alltheaspectsofsection The authorhighlights and lengthy legal process by filing a civil suit for recovery of toilsome consuming, of atime the companyfromhassle saves viz. Corporate,Taxation,Labour,Industrial,Pollution here arescoresoftoeveryCompany laws applicable and contents while the subject matter isthesame. the subject contents while and are draftedin differentshapes,sizes esolutions regulates Act, 1956) of Companies 630 to section (corresponding Act, 2013 452 ofCompanies ection JANUARY 2017 I CHARTERED SECRETARY makers, P-44 P-40 P-36 CHARTERED SECRETARY I JANUARY 2017 11 10 JANUARY 2017 I CHARTERED SECRETARY G T T to theFund. the affectedcompaniesforpurposeoftransfershares a welcomesteptoregularisetheprocessalreadystartedby the MCA. In view of this development, a clarification would be Surplus gratuity afterclaimingexemptionand relief,ifany, gratuity. exemption andrelieftoanemployee whoreceives it willbetaxed.TheIncomeTax Act,1961providescertain know how,atthetimeofretirement/death/superannuation, requiring reformsareindicatedherein. processes havetoalwaysbeworkinprogress.Someareas as wellinternationaltrade.Thus,reformoflawandits models havechangedmarketdynamicsbothindomestic has not been acted upon in view of the clarification issued by the shareholdersconcernedindividually.However,same have alreadygivenpublicnoticeandalsosentintimationto said amount.InpursuancetotheseRules,manycompanies 125(2) mayapplytotheIEPFAuthorityforrefundof claiming tobeentitledtheamountreferredinSection Section 125(4)oftheCompaniesAct,2013,anyperson to theFund.However,underprovisionscontainedin 1999, nopersoncouldclaimanymoneyoncetransferred the commencementofCompanies(Amendment)Act, by thecompanieswhileimplementingtheseprovisions.After under theRulesandproceduralproblemsbeingfaced or shares.TheArticlealsofocusesonthenewcompliance the Fundbypersonswhoareentitledtosuchdividend and Claimingofdividendamountsharestransferredto subsequently totheFund,TransferofsharesFund unpaid dividendtoUnpaid Dividend Account and Nagaraj UHiregange Relief undertheIncomeTaxAct,1961 Gratuity: Exemptions, Taxability and G.R. Bhatia Years :wayforward Competition Regimeinthelast7 The JourneyoftheIndian M RBothra Refund) Rules, 2016 (Accounting, Audit,Transferand Shares under IEPF Authority Transfer ofUnpaid Dividend and story initsrightperspective. story itselfyieldsbetterresultstowardsunderstandingthe a longstorycutshortorthemoraloffollowedby constitute theiropinionrightlyandcomfortably.But,inreality,

i.e. theCosttoCompany. Thus,itispertinentto ratuity maybeapartofanemployee’s salarypackage Since thentechnology,innovationandnewbusiness he CompetitionAct,2002waslastamendedin2007. relating totheprocessfortransferofunclaimed/ enforced provisions with thenewly he Articledeals CHARTERED SECRETARY I JANUARY 2017 P-56 P-53 P-48 I T T available forlistingofStockExchanges light onSelf-ListingandCrossListing,astwoalternatives also throws article the IndianStockExchanges.The of listing global scenario,regulatoryprovisionsinIndiaandcurrentstatus Stock Exchanges,prosandconsoflistingExchange, of StockExchanges.ThearticletalksaboutevolutionIndian own concern about conflict of interest which arise due to listing after demutualization,theregulatorsacrossglobe,havetheir Exchanges havebeengloballyacceptedasnextlogicalstep shares onStockExchange.Eventhoughlistingof approval fortakingalogicalstepforwardtolisttheirowned and efficiency of tax collection have been questioned with the Nitesh Bhati demutualised StockExchanges A logical stepforward forIndian Listing ofStockExchanges: of gratuityreceived,undertheIncomeTaxAct. of ampleillustrationswewillbeabletounderstandtheposition wherever thereistaxablesalary,TDSfollows.Thuswiththehelp will betaxableundertheheadSalaryofthatemployee.And Meenu Gupta NGOs A StudyonInfringement of FCRA, 2010by Monika Goel Backlash onBlackMoney input TaxCreditUnder GST-Another came withempowering theGovt.toobtaindetails pertainingto first attack on the underground economy. GST would be the next increase ofblackmoneyintheeconomy.Demonetisationisa person inElectronicLedgershasbeendetailedthepaper. the creditofinputtaxadmissibletoeveryregisteredtaxable utilization ofCENVATCredit.Thenovelconceptaccumulating GST willpluginallscopeofmanipulation,fakebillsandexcess the existingCENVATcreditmechanism,papershowshow Comparing themechanismofinputtaxcreditunderGST with of suchbarriersoncheckingtheblackmoneyineconomy. procedural and technological barriers and highlights theimpact the mechanismofInputTaxCreditunderGSTwhichincludes of taxevasioninthenewregime.Thepaperaimstostudy levels ofenforcementandwouldblocktheclandestinemethods the useoftechnologyinadministeringtax.Itwouldraise revolutionary stepagainstblackmoneybyintensivelyincreasing

reSeArCH COrNer

Stock ExchangeLtd.,arelongawaitingforregulatory ndia’s twomajorStockExchanges,BSELtd.andNational to curbtheuseofforeignfunds foranti-nationalactivities he ForeignContributionRegulation Act(FCRA),2010enacted administration sinceindependence.Theintegrity,equity ax evasionandavoidancehasbeenachallengefortax PART-II : ARTICLE ON GST P-69 11 P-70 P-66 P-61

AT A GLANCE accounts of NGOs to receive foreign contribution and allowing account of the alleged misconduct, which constitutes an offence foreign contribution to be transferred to organizations which are not involving moral turpitude. [SC] registered under FCRA with ‘Prior Approval’. However, the Ministry n LW 04: 01: 2017 Provisions of BOCW Act and Welfare Cess of Home Affairs (MHA) data revealed the reduction in foreign Act are applicable to the construction if factory building. [SC] receipts into India by 30% in 2014-15 from the previous year due n LW 05: 01: 2017 CCI dismisses the complaint against to cancellation of license of 10,118 registered associations in newspapers alleging that charging higher rates for publishing March, 2015 in violation of FCRA norms as part of an exhaustive legal notices is abuse of dominance. and ongoing review of their foreign fund inflows and utilisation, n LW 06: 01: 2017 CCI dismisses the complaint against technical by foreigners/FCRA division of the home ministry. The prominent software license provider. being the Greenpeace India and Indira Jaising’s Lawyers Collective. n LW 07: 01: 2017 The Company has shown profitability and its In view of this, the article seeks to analyse the amendments with liability to redeem the preference shares is in the future. In the AT A GLANCE AT respect to its impact on economy and stakeholders. circumstances, the possibility of its incurring losses in the event of payment of capital gains tax cannot be ruled out. That such losses might arise could also be within the normal course of any Option Pricing in Valuation of P-77 normal business enterprise’s functioning. In the circumstances, Business Entities the view of the respondents that exemption from payment of capital gains tax is not warranted cannot be held illegal.[Del-DB] K S Ravi n LW 08: 01: 2017 It is perfectly open to the landlord to choose a raditional methods of valuation like the DCF or the ROI more suitable premises for carrying on the business by her son T often fail when they have to be applied to long gestation and that the landlord cannot be dictated by the tenant as to from projects, which are contingent upon uncertainties. Risks are in which shop her son should start the business from.[SC] fact welcomed under real option strategy as this provides a tool for incorporating management’s flexibility in changing tracks, as a FrOM tHe P-97 mid-way correction. The concepts of financial option, in decision gOVerNMeNt making are extended to long gestation real-life projects with a call and put option as information flows in. In-spite of uncertainties and n National Company Law Tribunal (Amendment) Rules, 2016 risks, projects are not shelved but valued using real option tools, n Delegation of Powers to RDs where the projects may have got abandoned under the traditional n National Company Law Tribunal (Procedure for reduction valuation methods. With the business environment changing, of share capital of Company) Rules, 2016. in speed and dimension, uncertainties abound long gestation n Companies (Compromises, Arrangements and Amalgamations) projects, where real option strategies of valuation are replacing Rules, 2016. traditional valuation methods. n Corrigendum n Date of coming into force certain Sections of the Companies All India Research Paper Competition on Act, 2013. P-83 n Companies (Removal of Difficulties) Fourth Order, 2016 Merger & Acquisition n Companies (Transfer of Pending Proceedings) Rules, 2016. P-85 n Clarification regarding due date of transfer of shares to Research Colloquium on Indian Companies IEPF Authority. Act – Decoding unsolved Mysteries n Relaxation of additional fees and extension of last date in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013- legAl WOrlD P-87 State of Jammu and Kashmir- reg. n Companies (Registration Offices and Fees) Second Amendment Rules, 2016. n LMJ 15: 01:2017 A company incorporated under the companies Act, being a juristic person, is not a citizen and it cannot enforce OtHer P-113 fundamental rights available to natural persons under article 32 HIgHlIgHtS of the Constitution of India.[SC-CB] n LW 01: 01: 2017 If the offer period can be triggered of by an • Members Admitted/Restored understanding that is yet to fructify into an agreement, we do not • Certificate of Practice Issued/cancelled see how the same can be said not to have commenced/started • Licentiate ICSI Admitted from the date of a concluded agreement i.e. share purchase • Revision in the Annual Membership fee, Entrance Fee and agreement as in the present case.[SC] Certificate of Practice fee for Associate and Fellow Members n LW 02: 01: 2017 Provisions of SARFAESI Act are applicable • List of Practising Members/Companies Registered for Imparting to the State of Jammu & Kashmir and the constitution of J&K is Training subservient to the Constitution of India. [SC] • Company Secretaries Benevolent Fund n LW 03: 01: 2017 In order to deny gratuity to an employee, it • Regional News is not enough that the alleged misconduct of the employee • Revolving Fund Schemes for becoming life members of CSBF constitutes an offence involving moral turpitude as per the • Ethics & Sustainability Corner report of the domestic inquiry. There must be termination on • GST Corner • CG Corner

12 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 13 12 JANUARY 2017 I CHARTERED SECRETARY P out finalstockof milestonessetduringtheyear 2016: feeling ofserenitygrapplesme andhereby,Iamabletoshell moment, andwhenIseemyself onthefinishlinetoday,a journey.” Ididthesame,enjoyed myjourneyeachday, doing so,nottofocusonthe finishlinebutjusttoenjoythe to do...isto...keepmovingand justkeeponmovingandwhile to movefast,youevendon’thave torun,theonlythingyouhave inspired meandheldthismessagefirmlyfor“Youdon’thave was privilegedtofetchgeneroussupportofyouall.All you Yes, itwasa24/7assignmentthroughouttheyear,butthen, I witness somehistoricalenactmentsrelatedtoourprofession. Government andothereminentbodiesofhighrepute to I amgratefulthatwasfortunatetorepresentICSIbefore turns toopenaseaofopportunitiesforouresteemedmembers, this reveredprofessionwhentideoftimewastakingseveral also gratefultotheAlmightywhogavemethisdistinctionlead support ofeachandeverysoulinthishonouredjourney.I am indebted andgratifiedfortheaffable,ebullientunstinted journey hasmadezillionmemoirsinmymemorybankandI am drops intheoceanofgloryandillustriousnessnamedICSI.This excellence givesasatisfactionthatIwasabletopoursome during thisclinchforsailingICSItowardsitsjourneyof content astheevanescentmilestoneswewereabletoset memories astheCaptainofICSIShipforyear2016,Ifeel as thePresident,ICSI.Ireminiscemyjourneyandrecollect Esteemed ProfessionalColleagues CHARTERED SECRETARY in mymindtodaywhentowritethisfarewellmessage for methistimeasthousandsofthoughtsareflashing enning thiscommunicationisveryspecialandtouching Do notactfortheresultsofyourdeedsandneverbeattachedtodoingduty.) I JANUARY 2017 (Your rightistothedutyonly,notfruitsthereof. ×æ ·¤×üÈ¤ÜãðUÌéÖüê×æü Ìð â¢»æðùSˆß·¤×üç‡æ Ìð ·¤×üÈ¤ÜãðUÌéÖüê×æü ×æ ·¤×ü‡ØðßæçŠæ·¤æÚUSÌð ×æ È¤Üðáé ·¤Îæ¿ÙÐ È¤Üðáé ×æ ·¤×ü‡ØðßæçŠæ·¤æÚUSÌð order tomakeamarktheInstitutetookfollowinginitiatives: observing adayasInternationalCorporateGovernanceDay.In Corporate Governance.TheInstitutehasmootedtheideaof The Institutedeclaredtheyear2016,asMissionfor Corporate GovernanceYear GOVERNANCE AND LAWS OFCORPORATE DIRECTORATE c) b) a) International Corporate GovernanceDayinHyderabad organized 1stGlobalCongruence toPromulgate Corporate GovernanceDay (ICGD)- 1st GlobalCongruencetoPromulgate International participated. Associations andleadingcorporate professionals where representatives from Chambers, Industry through RegionalandChapterofficesoftheInstitute, organized onApril16,2016across44locations on theaboveconcept,PANIndiaprogrammeswere Corporate GovernanceDay(ICGD).Tobuildconsensus the UnitedNationsOrganization(UNO)asInternational conceptualized theideaofhavingadaydeclaredby PAN- IndiaProgrammes- 15th April2016atNewDelhi. Round TableConferenceonCorporate Governance on good governance,theInstituteorganisedInternational field ofCorporateGovernanceandfurtherthecause - Withanobjectivetodiscussthedevelopmentsin International RoundTableonCorporateGovernance h Institute The The Institute 13

FROM THE PRESIDENT FROM THE PRESIDENT under the CSR umbrella, the Institute has initiated its ‘1st ICSI good practicesundertakenbyCorporates and torecognizethe efforts towardsimplementationofprovisionsrelatingtoCSR With aviewtoprovidefurtherimpetustheGovernment’s Excellence inCG 1st ICSICSRExcellenceAwards&Nationalfor all eligiblememberstoreapthisopportunity. and Advocateswhoareinpracticeforminimum15years.Iurge Company Secretaries,CharteredAccountants,CostAccountants can beavailedby registration period ofsixmonths.This has alreadystartedenrollingprofessionalmembersforalimited resolution process.TheICSIInsolvencyProfessionalsAgency Process, CorporateLiquidationProcessandIndividualinsolvency professionals inareaofCorporateInsolvencyResolution Delhi. Thishasopenedanoceanofopportunitiesforthe Affairs MinisterSh.ArunJaitleyon28November,2016inNew Company wasawardedtoICSIbyUnionFinanceandCorporate Regulations, 2016.TheregistrationcertificateasaSection8 Agency (IPA)undertheIBBI(InsolvencyProfessionalAgencies) members fortheInstitutetoactasInsolvencyProfessional It wasreallyadelighttowitnessanopportunityforesteemed ICSI InsolvencyProfessionalsAgency(IPA) 14 The AuditingStandards Board(ASB)was constituted inthe Auditing StandardsBoard(ASB) on MeetingsofGramPanchayats. representatives mootedtheproposal tointroduceModelCode Additional SecretaryofMinistry ofPanchayatiRajwhereICSI Further, thedelegationalso metwiththeSecretaryand proposed ModelCodeonMeetingsofGramPanchayats. Water andSanitation,Govt.ofIndia,inconnectionwith the Minister forRuralDevelopment,PanchayatiRajandDrinking An ICSIdelegationhadameetingwithHon’bleUnionCabinet Model CodeonMeetingsofGramPanchayats of revisedSS-1&SS-2. revised simultaneouslyandwillbereleasedaftertheintroduction The respectiveGuidanceNotesonSS-1&SS-2arealso approval underSection118(10)oftheCompaniesAct,2013. Meetings (SS-2)totheMinistryofCorporateAffairs(MCA) for on MeetingoftheBoardDirectors(SS-1)andGeneral The InstitutehadsubmittedtherevisedSecretarialStandards Revision ofSecretarialStandards(SS-1&SS-2) Hon’ble MoS(I/C),Commerce&Industry. august presenceofChiefGuest-Smt.NirmalaSitharaman, 24th December,2016atVigyanBhawan,NewDelhi,inthe The presentationceremonyoftheseawardswasorganisedon ICSI NationalAwardsforExcellenceinCorporateGovernance. projects inCSR.ThisyeartheInstitutehasentered16thof implementation ofinnovativepractices,programmesand the Corporate Social Responsibility andrecognizing by acknowledgingtheuniqueandextraordinarycontributionsin Corporate SocialResponsibilityamongsttheIndiancorporates CSR ExcellenceAwards’.TheAwardaimstopromotethe was welltakenbytheparticipants. declared asInternationalCorporateGovernanceDay Bangladesh, Srilanka,Kenya.Ideaofhavingaday representation fromcountrieslikeIndonesia, on 8th-9thDecember,2016.TheCongruencehad • • • Joint Programmes Publications releasedduringtheYear Act &Rulesetc. and servicesindustrylawsareavailablecoveringmorethan400 Management incompanies.Inthefirstphase,allmanufacturing ready reckonerforCompliance a as Audit butisalsouseful (CMAC)’. ThiswillnotonlysupportinconductingSecretarial Configuration Auditing and Management ‘Compliance agency tool forfacilitatingconductofSecretarialAuditthroughan To facilitatethemembersofICSI,Institute has developeda (CMAC) Configuration Auditing and Management Compliance Auditing Standardsarebeingdraftedinthefirstphase: quality intheAuditsperformedbymembers.TheFollowing the BoardistoformulateAuditingStandardsbringabout Audits performedbyCompanySecretaries.Primaryfunctionof to strengthenthehandsofmembersonSecretarialandother purpose ofconstitutiontheASBis month ofJune,2016.The

the ChiefGuestandHon’ble JusticeShriM.Kumar, Justice ShriS.J.Mukhopadhaya Chairperson,NCLATwas Law &PracticeatNewDelhi onJuly23,2016.Hon’ble Symposium onCompaniesAct, 2013:NCLTandNCLAT- Law TribunalBarAssociation (NCLTBA)organized - Law&Practice-TheInstitutejointlywithNational Company Symposium onCompaniesAct,2013:NCLTandNCLAT on SecretarialAuditOctober17,2016inMumbai. jointly withBombayStockExchangeorganizedjointworkshop and onDecember7,2016inMumbai.Similarly,theInstitute a workshoponSecretarialAuditOctober14,2016inDelhi The InstitutejointlywithNationalStockExchangeorganised towards goodgovernance. differentiator andhowbalancedBoardscancontribute Seminar witnesseddeliberationsondiversityBoardasa Hon’ble MemberofParliamentgracedtheoccasion.The at NewDelhion4thJune,2016.Ms.MeenakshiLekhi, “Driving aSustainableOrganisationthroughBoardDiversity” Seminar onBoardDiversitythetheme organised a The Institutejointlywith Gender Diversity-Revised SEBI (LODR)andCompaniesAct,2013–AComparison Corporate GovernanceCertificationunderListingRegulation Independent Directors–AHandbook(revisededition) Risk Management-AtoolforGoodCorporateGovernance NCLT andNCLAT-Manual SEBI(LODR) Regulations2015–DebtSecurities FAQs onSection8Companies Referencer onBoard’sReport Guidance NoteonSecretarialAudit(Release1.3) Guidance noteonAOC-4 Backgrounder onNationalCompanyLawTribunal Corporate bankruptcy–Aprimer E-Book onCoffeeTableBookCSR Coffee TableBookonCorporateGovernance Regulations, 2015–AReferencer SEBI (ListingObligationsandDisclosureRequirements) ICSI AuditingStandardonSecretarialAudit ICSI AuditingStandardonFormingOpinion ICSI AuditingStandardonAuditProcessandDocumentation CSI AuditingStandardonEngagement JANUARY 2017 Institute ofDirectors(IoD) I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 15 14 JANUARY 2017 I CHARTERED SECRETARY Mumbai onMay27,2016. “The CatalysttoEconomicGrowth”organisedbyAssochamat partner forthe5thNationalSummitonMergersandAcquisitions April 29,2016atNewDelhi.TheInstitutewasaninstitutional Strategic RegulatoryRemediation’,organisedbyAssochamon Impact onNov11,2016. “Insolvency andBankruptcyCode:EmergingIssuesits Implications” heldon14thOctober2016andSeminar Company LawTribunal–Challenges&TheWayForward Associate partnerwithPHDChambersforSeminaron“National was an Delhi onMay7,2016.TheInstitute House, New PHD Regulated?” organisedbyPHDChambersofCommerceat partner fortheSeminaron,“IsCorporateSectorOver 2016 and9-10August2016.TheInstitutewasaninstitutional Amendments)”. Theseworkshopswereorganisedon21-22July (Recent& Regulations,2016 Laws series on“Corporate Chamber, asanassociatepartnerinorganizingworkshop in Corporatelaws,theInstitutejoinedhandswithPHD recent amendments professionals aboutthe With aviewtoupdate Commerce &Industry Workshop/ JointSeminarswithPHDChambersof • h Cneec o ‘ae f on Bsns: itne to Distance Business: Doing of ‘Ease on Conference the The InstitutejoinedhandswithFICCI,asasupportpartnerin FICCI The - Management Compliance ‘Corporate on Conference ICSI participated as aninstitutional partner inNational ASSOCHAM Company Law-ProfessionRelated challenges whichcompaniesarestillgrapplingwith. proposed amendmentsundertheCompaniesAct,2013and the understanding ofthelegalrequirementsandimplications the Chief Guest.TheConferenceofferedaninsightinto the Ramesh Abhishek,Secretary,DIPPgracedtheoccasionas the Destination’ heldatFederationHouseonAugust05,2016.Mr. 16th December,2016. Bankruptcy Code,2016wasalsoorganisedinMumbaion and Insolvency on Conclave ANational Bhubaneswar. Bankruptcy Code,2016on11thDecember,in India (IBBI)organisedNationalSeminaronInsolvency& The InstitutejointlywithInsolvencyandBankruptcyBoardof Practice ofInsolvencyandBankruptcyCode,2016. Appearance andNuancesofDraftingbeforeNCLT Oppression andMismanagementClassAction,Artof Deliberations atthesymposiumincludedDerivativeAction– President, NCLTwastheGuestofHonourforoccasion. Representations totheMinistryofCorporateAffairs CHARTERED SECRETARY Scope of Secretarial Audit : • AOC-4- Certification by a CA (in whole time practice) or • Authentication of Annual Accounts • • - CS (inwhole time practice)orCostAccountant in (Registration) OfficesandFees Rules,2014 - Request Personnel) Rules,2014 (Appointment and Remuneration of Managerial Request tomodifyRule(9)oftheCompanies 134 oftheCA,2013. financial statementunderthe provisionsofsection Request toclarifytheliabilityof CSwhilesigningthe to modify I JANUARY 2017 8 Rule of the Companies

• • • • • • • • • • • • • • • OFMEMBERSHIP DIRECTORATE • RTI • • • • • • • • • • CSBF Thane, Ghaziabad&Bengaluru. Seminar onLaws& Economics of Competitionat Bhubaneswar, Various programmeswereheldpursuanttothisMoU-National Competition lawsadvocacy, advancement of knowledge. each otherintheareasofmutualinterestwhichincludes June, 2016.ThisMoUwassignedwithanintenttopartner A MoUwassignedwithCompetitionCommissionofIndiaon9th Signing ofMoUs (KVIC) Govt.ofIndiaforMembersandStudents products fromKhadiandVillageIndustriesCommission, Organized SpecialDiscountonKhadiclothesand Speedy disposalofapplicationsandqueries Proposal forcompleteOnlinepaymentoffeependingwithIT Digitization ofForm–D Digitization ofKYMformpendingwithIT Queries onCSJmitigated Speedy supplyofkitstomembersonenrolment MIS oftheDirectoratepreparedondailybasis of amemberintherecordsintroduced Standard OperatingProcedure(SOP)forrecordingdemise firm /tradeimplemented Guidelines forchangeinnameofproprietorshipconcern/ trade revisedandimplemented Guidelines forthenameofaproprietorshipconcern/firm at fourdifferentregions Successful organizationoftheICSIbi-annualConvocations swiftly facilitating theirDSCregistrationontheMCAportaldone Alignment ofdatamembersaspertheirPANdetailsfor Printing timeforMembershipcertificatesreduced Process timeforAssociateMembershipapplicationreduced Creation ofonline portalforreceivingRTIapplications sensitize theROsandchapters CSBF monthwasorganizedin May,2016topopularizeand Membership ofCSBFlaunched Three rotationalschemestoaugment theenrolmenttoLife disseminated amongstallthemembersofInstitute New BrochurecontainingallaboutCSBFdevelopedand FAQs onCSBFhostedwebsiteoftheInstitute Short StoriesonCSBFhostedwebsiteoftheInstitute Financial assistancefromCSBFisdisbursedspeedily Online donationfacilitylaunched (CSBF) created Separate PortalforCompanySecretariesBenevolentFund Dedicated CSBFcellestablished Substantial increaseofenrolmenttoCSBFin2016over2015 To provide an option for CS to file e-form at the time of • Representation on LLP • Implementation of Section 203 of the Companies Act, • Representation on Internal Audit • - resignation 2013 whole timepractice. through DIR-11forCSandKMPs. Request tocreateanoptionsubmitresignation 15

FROM THE PRESIDENT • Swift disposal of applications and replies to appeals Student Month • The Institute came up with a new initiative to hold Student Month Annual General Meeting of CSBF during July, 2016. The Student Month will be remembered for a I feel content to that we are able to raise financial assistant to long time by Team ICSI owing to massive team work and the dependents of life members of CSBF from Rs. 5 Lakhs to co-ordination involved. The slogan adopted for Student Month is Rs. 7.5 lakhs w.e.f. 1st January, 2017 in the unfortunate event “Udaan..We fuel your Growth” which indicated Institute’s resolve of the death of the life member. This has fulfilled a long-standing to proactively back the growth of students as professionals. appeal of the life members and has been made possible by the Some events organised as part of the Student Month are as persistent efforts of the Managing Committee. I would, hence, follows: urge all esteemed members to take life membership of the CSBF by making a onetime online/offline payment. (a) Interactive Portal on Student Month An interactive portal covering various activities organised during DIRECTORATE OF STUDENTS SERVICES the month with updation of information and photographs ICSI Signature Award pertaining to various events. The Team at Headquarters in The ICSI Signature Award Scheme was introduced by the co-ordination with the team at Regional/Chapter Offices made Institute in furtherance of its objectives to nurture best talent sure that the portal was promptly updated with the pictures, available and facilitate meaningful collaborations between the videos, etc. of various activities organised. institutions in the higher education sector for the benefit of student community. Under this Scheme, Top Rank Holders in (b) Career Awareness Programmes (CAPs) FROM THE PRESIDENT the B.Com. Examinations of respective Universities and toppers Special interactive sessions were conducted in various Colleges of selected programmes/papers of IIMs/ IITs shall be awarded a to create awareness about the profession of Company Gold Medal and Merit Certificate along with waiver of Registration Secretaries. Career Awareness Week was observed during last Fee for the CS Course in Executive Programme. So far, the week of July, 2016. The career awareness sessions provided Institute has signed agreements/MOUs with the following an opportunity to the prospective students to know about the Universities/IIMs : profession.

1. Bhagat Phool Singh MahilaVishwavidyalaya, KhanpurKalan, (c) Full Time Integrated Course Haryana Fresh batch of Full Time Integrated Course commenced at ICSI- 2. Alagappa Univesity, Karaikudy, Tamilnadu CCGRT, Navi Mumbai during the Student Month as a continuous 3. Guru Nanak Dev University, Amritsar, Punjab process by the Institute to enhance the quality of education 4. Kumaun University, Nainital, Uttarakhand imparted to the students. Zealous efforts have been made to 5. Himachal Pradesh University, Shimla provide Quality Study Material, Class Room Teaching, Various 6. Adikavi Nannaya University, Rajamundry, Andhra Pradesh Training Programmes etc., to take the profession to the next 7. Andhra University, Visakhapatnam level. 8. IIM, Indore 9. SNDT Women’s University, Mumbai (d) Renewed Thrust on Class Room Teaching 10. IIM, Tiruchirapalli, Tamilnadu Regional Councils & Chapters are giving renewed thrust on 11. Panjab University, Chandigarh, Punjab Class Room Teaching activities. Faculty Induction Programmes 12. IIM Raipur, Chhattisgarh were also organised during the Student Month to enhance the quality of coaching imparted to the students. For the convenience CS Study Centre Scheme of students, for the first time, the fresh batches of Class Room The objective of the Study Centre Scheme is to break the Teaching were commenced on a uniform date i.e. 7th July, 2016 distance barrier at student’s end for availing the services of the to impart coaching for December, 2016 Examinations at more Institute. Under the Scheme, Study Centres are opened in than 50 Regional/Chapter Offices. cities/areas, wherein the Institute’s Offices are not in existence. Apart from providing basic services, the Study Centres shall (e) Skill Development also be imparting coaching to the students of various stages. Following the thrust given by Government of India in the area of Till date, total 30 Study Centres have been opened at reputed Skill Development, a Mega Student Programme titled ‘Yuva Colleges/Universities located throughout the length and breadth Kaushal’ was organised at Hyderabad on 15th July, 2016. The of the country. country needs skilled manpower and the Institute joins the Government of India in its efforts to reduce the gaps in the skill CS Olympiad levels and the actual requirements. The Institute signed a Memorandum of Understanding (MoU) (f) Swachh Bharat Mission with the Science Olympiad Foundation (SOF) for conducting the Cleanliness drives were organised in the Regional / Chapter CS Olympiad for students of Classes 11 and 12 in each Offices of the Institute as part of the ‘Swachh Bharat Abhiyan’ academic year in schools across India. The CS Olympiad was project of Government of India. More than 50 Chapters successfully conducted in two phases in September and participated in the special campaigns organised at various October, 2016 in 29 States/Union Territories across about 400 offices of the Institute on 27th July, 2016. Cities. About 1,300 Schools and more than 36,000 students were enrolled. The CS Olympiad was also conducted in more Professional Pass Certificates with Security Features than 10 Schools in Gulf Region, Bhutan, Srilanka, Singapore, Commencing from December, 2015 Session, Professional Pass Uganda, etc. Certificates with Security Features like non-tearable paper, QR

16 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 17 Code, complex border, etc. have been introduced. Apart from Institute were involved in offering expert advice related to the enhancing the look and feel of the certificates, the new format matters of compliance to various laws and did it with dedication ensures longevity and security features to drastically reduce the and passion. chances of misuse. Meeting with Dr. Madhukar Gupta, Department of Public Modified Switchover Scheme Enterprises The Council of the Institute announced a Modified Switchover A delegation of the Institute met Dr Madhukar Gupta, Additional Scheme for the Professional Programme 2007(Old) Syllabus Secretary, Department of Public Enterprises and discussed Students while switching over to Professional Programme various initiatives to be taken including the organization of 2012(New) Syllabus. training programme for Independent Directors of PSUs and appointment of Company Secretaries as Independent Directors ICSI-SMASH Project in PSUs. The Institute’s activities have undergone a sea change over the years and contribution of technology cannot be ignored. It was E-library for ICSI Members precisely for this purpose that the Council through the Information With a view to keep our members updated and equip them with Technology Committee had launched ICSI SMASH (Student knowledge resource tools and to facilitate them to carry out Member Application Software Hosting) Project during 2015. instant research, ICSI has taken a digital initiative to provide an The ICSI SMASH Project on its completion, shall bring about e-library on corporate laws to its members on complimentary major changes in the working of the Institute. Physical movement basis. of files, papers, etc. shall be replaced by automated processes. FROM THE PRESIDENT It will bring about a lot of transparency in the processes and the Views/Suggestions on SEBI (LODR) Regulations, 2015 concerned Directorates shall be able to view and maintain the With a view to create awareness regarding the provisions of whole life cycle of the stakeholder i.e. registration, training & SEBI Listing Regulations and as a measure towards capacity membership records, etc. in its entirety at one place. building and knowledge sharing, the Institute in association with BSE Ltd. organized 10 Programmes on SEBI Listing Regulations INITIATIVES OF THE DTE. OF PD, PP & STUDIES at various cities and locations - Mumbai, Delhi, Pune, Initiatives for MSME and Start-up India Ahmedabad, Chennai, Hyderabad, Bangalore, Navi Mumbai, The members of the Institute are actively engaged in the MSME Indore, Kolkata. The Institute in association with Standing sector and are rendering value added services to MSMEs. A Conference of Public Enterprises (SCOPE) also organized an delegation of the Institute met Mr. K K Jalan, Secretary, Ministry exclusive programme on SEBI Listing Regulations for public of Micro, Small and Medium Enterprises to discuss the way sector undertakings. The Institute forwarded the views/ forward in guiding the entrepreneurs and providing further suggestions on SEBI Listing Regulations emanating from the support to the Ministry of MSME. The Institute met also met Dr. deliberations and discussions of the programmes to SEBI for Anup K. Pujari, IAS, the then Secretary, Ministry of Micro, Small consideration. and Medium Enterprises at Udyog Bhawan, New Delhi. A delegation of the Institute also met Ms. Nirmala Sitharaman, ICSI National Seminar on ‘Entrepreneurship, Skill Hon’ble Minister of State for Commerce and Industry and Development and Governance in MSMEs discussed the feasibility of setting up of incubation centres, The Institute in association with Ministry of Micro, Small and platform to the entrepreneurs for converting their ideas into real Medium Enterprises (MSME) organised a Seminar on businesses and organizing hand holding camps for start ups ‘Entrepreneurship, Skill Development and Governance in towards fostering the development of start ups under the aegis MSMEs’ at New Delhi on March 19, 2016. Shri K K Jalan, IAS, of DIPP. The Institute organized 2nd National Seminar on Secretary, Ministry of Micro, Small & Medium Enterprises, Entrepreneurship, Skill Development and Governance in Government of India graced the occasion as the Chief Guest. MSMEs with Federation of Rajasthan Trade & Industry as an On the occasion, two ICSI publications- ‘Rajasthan –Ease of associate partner at Hotel Hilton, Jaipur on May 28, 2016. Shri Doing Business for MSME Sector’ and ‘Referencer on Rao Rajendra Singh, Hon’ble Deputy Speaker, Rajasthan Entrepreneurship, Skill Development and Governance in Legislative Assembly, graced the occasion. MSMEs’ were also released.

Constitution of Syllabus Review Board ICSI Outreach The ICSI constituted ‘Syllabus Review Board’ to review the With an objective to acknowledge and reiterate the association existing course curriculum. and bondage with existing precious Memorandum of Understanding partners as well as exploring new associations, Make in India Week Participation ICSI is celebrating ‘ICSI OUTREACH’. We are hopeful that ICSI The Government of India’s Mega Event ‘Make in India’ in Outreach effort shall further the cause of the MOU in the real Mumbai from February 13-18, 2016 was graciously inaugurated sense. ICSI signed a MoU with Bhawanipur Education Society by our Honourable Prime Minister Shri Narendra Modi Ji. ICSI College, Kolkata and National Institute of Securities Markets played a pivotal role in the pavilion of the Ministry of Corporate (NISM) to hold joint workshops, seminars, continuing education Affairs. The pavilion witnessed the gracious presence of Shri and training programmes, exchange of journals, course Arun Jaitley, Hon’ble Minister for Finance, Corporate Affairs and materials, case studies, and to conduct joint research projects Information and Broadcasting. It was honoured by the patronage etc. The Institute extended MoUs with Competition Commission of esteemed Secretary, MCA, Shri Tapan Ray, IAS and Joint of India (CCI), New Delhi to collaborate in the areas of Secretary, MCA, Shri K V R Murty, IAS. The members of the competition advocacy and advancement of knowledge, National

16 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 17 FROM THE PRESIDENT h Isiue eertd PS a’ n 5h ue 21 to 2016 June, 15th on Day’ ‘PCS celebrated Institute The PCS Day Regional CouncilsandChapters. investor awarenessprogrammeswereorganizedby the meetings withcapitalmarketregulators/stockexchanges and programmes suchaspaneldiscussions,lectures,interactive During theweek,13megaprogrammesandanumberofother on thethemes“TranscendingHorizons-CapitalMarketWay”. Markets WeekduringJune18-25,2016throughoutthecountry good governanceinCapitalMarkets,theICSIobserved As partofcontinuousinitiativetowardsinvestoreducation and Capital MarketsWeek Santorini) from26thJune,2016to4thJuly2016. Secretary- NavigatingChange”atGreece(Athens,Mykonos& Development FellowshipProgrammeonthetheme“Company The Institute organizedits 11th International Professional Programme Fellowship Development Professional International scheme, whichisindeedagreatachievementfortheprofession. Company Secretarytoprovidethirdpartycertificationunderthe transparent inspectionpolicy,underwhichitrecognizes Government ofHaryanahasbroughtoutanewcomprehensive System under variouslabourlaws, Department of Labour, With aviewtosimplifyandrationalizetheexistingInspection Certification byGovt.ofHaryana Recognition ofCompanySecretaryforThirdParty dignitaries werealsopresentatthemeeting. Renewal Energy,RevenueSecretaryandotherhighprofile Goyal, Hon’bleMinisterofState(IC)forPower,Coal,New& Jayant Sinha,Hon’bleMinisterofStateforFinance,ShriPiyush Hon’ble MinisterofState(IC)forCommerceandIndustry,Shri 28th June,2016atNewDelhi.Smt.NirmalaSitharaman, Jaitleyji withtheProfessionalbodies,BusinessandIndustryon Hon’ble MinisterofFinance,CorporateAffairs,I&B,ShriArun ICSI representedattheinteractivemeetingcalledby Income DeclarationScheme,2016 Economy, IndustrialAuditetc. Standards, UnderstandingFinancialStatements,Indian Act, CapitalMarkets,CorporateGovernance,Accounting covering varioustopicssuchasIndirectTaxation,RealEstate knowledge, honingtheskillsetsofourmembersandstudents structured rising of professional learning, sharpening the information inthediverseareas.Theseriesfocuseson webinars, withunderlyingobjectiveofrenderingquality The Institute hasinitiated Professional iTellect seriesof Professional iTellect between thetwoInstitutes. Markets (NISM),Mumbaitofosteracademicsandresearch Joint Certificate Course(s), National Institute of Securities Institute ofFinancialManagement(NIFM),Faridabadtooffer 18 Councils, Chapterstomarkthe occasion.Thiswasthefirsttime and emergingareasofpractice wereorganizedbytheRegional covering deliberationsonawareness onrecognitionsforPCS under theerstwhileCompanies Act.Variousprogrammes Secretaries inPracticeforCertifying theAnnualReturnsin1988 commemorate theaccording ofrecognitiontoCompany Passage ofConstitutionalAmendment (122nd)Bill,2014inthe GST AwarenessMonth distinguished speakers. Conventions highlightingtheexcerpts fromthespeechesof National ICSI Conventions. ItgivesglimpseoftheyesteryearsICSI of Leafs ‘Golden release Conventions 1972-2015’coveringoverfourdecadesofNational to time first the for National Conventions,theInstitutehastakenauniqueinitiative With aviewtocommemoratetheglorioussuccessofICSI 2015 Release ofGoldenLeafsICSINationalConventions1972- speakers fromtheRegulatoryBodies,IndustryandAcademia. Facilitations andObstructions,etc.addressedbyeminent Competition LawandEaseofDoingBusinessinIndia – (Amendment) Bill,2016,NationalCompanyLawTribunal, Insolvency andBankruptcyLaws,RealEstateAct,Companies Goods andServicesTax,FinancialRiskManagement, discussions onvariouscontemporarythemeslikeStartupIndia, two dayprogrammeencapsulatedtechnicalsessions/panel ICSI wastheGuestofHonouratValedictorySession.The Kiran OberoiVasudev,Chairperson,QualityReviewBoard, Inaugural andValedictorySessionrespectively.Further,Ms. President, NCLT,gracedtheoccasionasChiefGuestat Governor ofMizoramandHon’bleJusticeMr.M.Kumar, various partsofthecountry.Hon’bleMr.A.R.Kohli,Former Pradesh witnessedacongregationofesteemedmembersfrom Secretaries heldonAugust12-13,2016atKasauli,Himachal The 17th National Conference of Practising Company 17th NationalConferenceofPractisingCompanySecretaries the CoursecommencedonSeptember24,2016. including complianceandoperationalaudits.Thefirstbatchof Audit andfurtherdeveloptheirskills to conductinternal audit members withthespecializedknowledgeinareaofInternal Management, Faridabad(NIFM)withaviewofendowingits Audit (DIA)inassociationwithNationalInstituteofFinancial Internal ICSI launchedDiplomain great extent.Inthisbackdrop, of InternalAudittotheforefrontandhaswideneditsscopea Section 138oftheCompaniesAct,2013introducedconcept Launch ofDiplomainInternalAudit taxation. acquired specializedknowledgeinallaspectsoftheinternational students andprofessionalswithavisiblemeansofhaving Business Taxationwhichisdesignedtoprovidemembers, A newonline15daysshorttermCourseinInternational Short TermCourseonInternationalBusinessTaxation and openupvastareasofopportunities. our esteemedmembersinpracticeaswellemployment Completion oftheCoursewilldefinitelysharpenskillsets on September10,2016. commenced batch oftheCourse Management, Faridabad (NIFM) onJuly23,2016.Thefirst in ValuationassociationwithNationalInstituteofFinancial business environment,theInstitutelaunchedCertificateCourse in carryingoutthevaluationassignmentrelevanttoday’s With theobjectivetoenhanceskillsofCompanySecretaries Launch ofCertificateCourseinValuation that thisdaywasearmarkedasPCSDay. JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 19 18 JANUARY 2017 I CHARTERED SECRETARY ID fr h ‘6h odn lbl ovnin 06 hl on held 2016’ Convention Global London ‘16th the for (IoD) ICSI wasanAssociatePartnerwiththeInstituteofDirectors Sustainability London GlobalConventiononCorporateGovernanceand Platform. Institute fromatinystrandtopremieratGlobal The CelebrationsservedasReminiscencetothejourneyof India TrinamoolCongress,theChiefGuestforprogramme. presence ofMr.DerekO’Brien,MP,RajyaSabha&LeaderAll event heldatGorkySadanAuditorium,Kolkataintheaugust Regional Office(s)&Chapter(s)oftheInstitutewithamega October 04,2016.ThedaywitnessedCelebrationsacrossthe statutory recognition,theInstitutecelebratedits48thCSdayon To commemoratethedaywhenourprofessionwasimparted CS Day the proposedlawonGoodsandServicesTax. through webinarswithaviewtocreatemoreawarenessabout Institute alsoconductedaseriesofMasterClassesonGST Sharing ofKnowledgeMaterial,PanelDiscussionsetc.The Programs, GSTAwarenessWalks,Webinars,Seminars, Chartered SecretarysolelytoGST,organizingAwareness Month” andtookvariousinitiativeslikededicatinganissueof facets ofGST,theInstitutecommemorated“GSTAwareness tax reforms.Withaviewtoenrichprofessionalsaboutthevivid Parliament isasignificantmilestoneinIndia’sjourneytowards The Institute organized an international webinar on ‘GST and its Dubai Webinar global participantsincludingregulators,industryandacademia. Global Economy’.TheConventionwasattendedbyover300 ‘Enhancing Effectiveness of Tomorrow’s Boards’ based on the session wasaddressedbythePresident,ICSIontopic 17-19 October,2016,atMillenniumHotel,London.Theplenary Vinai KumarSaxena,Chairman, KhadiandVillageIndustries Zubin Irani,Hon’bleUnionMinister ofTextilesalongwithSh. witnessed thegraciouspresence ofourChiefGuest,Smt.Smriti experts invarioustechnicalsessions. TheValedictorySession very wellarticulatedinthedeliberations anddiscussionsofthe CEO, AnmolBiscuitsastheGuest ofHonors.Thethemewas CEO ofMCXIndiaLimitedandSh.BimalChaudhary,MD & Bankruptcy BoardofIndia;Sh.MrugankM.Paranjape,MD & along withDr.M.S.Sahoo,Chairman,TheInsolvency and Rupani, Hon’bleChiefMinisterofGujaratastheGuest Inaugural SessionwitnessedthepresenceofSh.Vijaybhai R. professionals inreapingempowermenttothestakeholders. The powering governancesubsumingthe dynamicroleof of ideas,factsandinformationontheemergingtrendsrelated to of CSProfessionals”toprovideawideplatformfortheexchange Empowering Stakeholders:The Role Governance – “Powering November 17-19,2016atGandhinagar,Gujaratonthetheme The Instituteorganizedits44thNationalConvention on 44th NationalConventionofCompanySecretaries contemporary interest. of organizingmoresuchinternationalwebinarsintheareas the participants,consideringwhichInstituteisinprocess 7:30 PM).Thewebinarfetchedanoverwhelmingresponsefrom 2016. ThewebinarwasairedfromDelhiat9:00PM(UAEtime Impacts onNRI&GlobalBusinessCommunity’October01, Uncertain an in Role Evolving ‘Boards theme, contemporary CHARTERED SECRETARY I JANUARY 2017 Virtual • Launch of President’s Portal • • • • • Directorate ofInformationTechnologyduring2016 Information onthevariousinitiativestakenbyICSIinrespectof OFINFORMATIONDIRECTORATE TECHNOLOGY financing, leadershipandstrategies. guiding theentrepreneurstobuildastrongbaseintermsof at JWMarriot,Chandigarh.TheSummithasdeliberationson 2016 titled“Start-O-Vation”,organizedonNovember29, Strategic KnowledgePartnerinStartupandInnovationSummit, The Institute collaborated with Indian Chamber ofCommerceas Start-O-Vation Punjab Commission asourGuestofHonor. for aswellbook thecentersaspertheirrequirement from The membersdesirousofusing thesecentersmayregister online servicesforregistration andbookingoftheCSACs. Kolkata inthemonthofJune, 2016,theInstituterolledout launch ofCSAccelerationCenters (CSAC)inChennaiand Government ofIndiaStartUp-Stand UpIndia.Alongwiththe Centre (CSAC)underthebanner oftheambitiousproject ICSI launchedVirtualFrontOffice(VFO)/CSAcceleration (CSAC)– Onlineinitiativesforregistrationandbooking window. activities oftheInstitutefromtimetothroughsingle enable thestakeholderstoknowallnewinitiativesand interviews, mediaclippingsetcofthePresident,ICSIto messages, containing initswebsite portal President’s The Institutedevelopedandlaunchedacomprehensive Income TaxAct,1961. then andtherewhichinter-aliaservesfor80Gpurposeofthe facility, areceiptisgenerated service atdoorstep.Inthis has beendonetofacilitatesmoothandquickdeliveryof made livefornon-membersfrom29thFebruary,2016.This cheque /demanddraft.CSBFdonationonlinehasalsobeen February, 2016whichhithertowasacceptedbywayof accepting CSBFdonation(formembers)onlinefrom23rd Narendra Modi Ji’s ‘Digital India’ drive, the ICSI embarked on In Sync with Honourable Prime Minister of India Shri Online DonationstoCSBF avail thisfacility. e-library facilitytoensurethatonlyvalidmembersareable (API) tovalidatemembersforcomplementaryCLAOnline The InstitutedevelopedanApplicationProgramInterface E-library forICSIMembers information. and feelmore mobile Appwithadifferentlook this received fromthestakeholders,Institutehasrevamped and Androidplatforms.Onthebasisofsuggestions CS TouchmobileAppwaslaunchedbyICSIin2015forIoS ‘CS Touch’MobileAppsrevamped examinees ofExecutiveProgramme. downloading ofe-resultcummarksstatementbythe August 25, 2016. ICSI alsoextended the facility of December, 2015onFebruary25,2016andinJune New Syllabus)ofCompanySecretariesExaminationsheldin Programme aswellProfessional(Oldand The InstitutedeclaredresultsonlineforFoundation/Executive Examination Foundation/Executive/Professional Programme Online ResultDeclarationforallprogrammesofCS Front Office

(VFO) /CS Acceleration 19 Centre

FROM THE PRESIDENT FROM THE PRESIDENT Website Home Page Renovation • vii) vi) v) iv) iii) ii) i) students: been authorisedtoimpart15daysspecializedtraining to To facilitatestudents,followingtenmoreagencieshave they arenotabletoapplyformembershipoftheInstitute. requirement tobecomememberoftheInstitute.Duethis, mandatory a is Programme(MSOP),which Orientation schedule, theyarenotabletocompletetheManagementSkills in getting15dayslongleaveatastretchduetotheirbusy job come toournoticethatasworkingstudentsarefacingdifficulty of theInstitute.Whileinteractingwithsuchstudents,ithasalso the ICSIlongback,buttilldatetheyhavenottakenmembership of studentswhohadpassedFinal/Professionalexamination It isnoticed,fromtherecordsofInstitute,thattherearelots convenience. students can get facility to undergo MSOPattheir Councils wereformulated&approvedsothatworking Guidelines forconductofMSOPonweekendsbyRegional the Institute. Regulation 46AB(1)(a)forCSRegulations1982tostudentsof 48(b) andforimpartingtrainingof1year/2years/3under the instituteforimparting15monthstrainingunderregulation “Universities recognisedbyUGC”canalsoberegisteredwith Students. be registeredwiththeInstituteforimpartingtrainingtoCS Allowing registrationofUniversitiesrecognisedbyUGCto working daysfromthedateofsubmittingresignationletter. trainer shallbeliabletoprovideNOCthetraineewithin45 student hassubmittedhisresignationlettertothetrainer, trainer inwritingbygivingthereasonforsame.Ifany trainer, hehastogivenoticeofminimum45workingdayshis Now Ifanystudentwantstodiscontinuehistrainingfrom move inothertrainingbecausethetrainerisnotprovidingNOC. facing genuineproblemsintheirexistingtrainingandnotableto submit NOC,inseveralcasesitisfoundthatstudentswere Earlier foreachstudentwhiletakingtransferitismandatoryto , aninternalguidelineshasbeendevelopedforthestudents. other entities Company/other entitiestoanotherPCS/Company/ In ordertoprovidefacilitywhiletakingtransferfromonePCS/ revised andsimplified other entitiestoanotherPCS/Company/are (A) ANDPLACEMENT OFTRAINING DIRECTORATE 20 Guidelines fortransferoftrainingfromonePCS/Company/ complete websiteincomingmonths. 2016. TheInstitutehasalsoplannedtorenovatethe and feel.Thenewhomepagewaslaunchedon16thJune, renovated thehomepageofitswebsitewithattractivelook On thebasisoffeedbackstakeholders,Institute anywhere andanytimeon24x7basis. Real EstateRegulatory Authority(RERA) Bankruptcy InsolvencyBoard Secretariate ofLokSabha/RajyaSabha/ Assembly affiliated offices International organisationslike UnitedNationsorUN Reputed NGOs(withspecific approval ofTEFC) Export CreditGuaranteeCorporation ExportPromotionCouncil For Students: vacancies fortraineesand64jobopportunitiesmembers & telephonelinesetcforthepurpose.Duringthatprocess, 271 dedicatedly. Aproperseparateset-upwascreatedwithlaptops were doingthe tele-calling fromtheInstitute’s premises purpose, tenyoungmemberswereengagedfor15dayswho themselves forimpartingtrainingtoCSstudents.Forthesaid also conductedtoencouragecompanies/PCSforregistering During themonthofMayfor15daysatele-callingdrive was CS students. and 94%increaseinregistrationofPCSforimpartingtrainingto there is34%increaseinregistrationofcompanies/otherentities This specialdrivewasnamedas“Ascentia2016”.Asaresult, registered withtheinstituteforimpartingtrainingtoCSstudents. for increasingthenumberofcompanies/PCS/otherentities In May2016aspecialdrivewasconductedacrossthecountry 3. convenient &smoothforprospectivetrainers. search facilityhasbeencreatedatthisportalformaking wise, Chapter-wise,Stageofexamination-wise,gender-wise directly forfurtherscreening/shortlistingattheirend.State- preference andthentheymaywritethemtosubmittheirCVs candidates oftheirrespectiveareas/locations,asper search oftraineesmayaccessthee-mailidssuitable From thisportal,companies/PCS/otherentitieswhoarein of studentsalloverIndiawhoareavailableforjoiningtraining. entities etc.canregistertheirnames.Thiscreatesadatabank various companies/PCS/other are willingtojointrainingin In June2016,Institutelaunchedaweblinkwherestudentswho 2. can applyforthesameaspertheirsuitabilityandconvenience. where thereisJobvacancyforCSmembersandinturnthey can getinformationaboutvariousorganizations/companiesetc. received fromvarioussources.Byvisitingthisweblinkstudents Institute is posting ‘Job opportunities for students’ on its website, 1. convenience. and as pertheirsuitability the same apply for they can turn companies etc.wherethereisvacancyforCStraineesandin students cangetinformationaboutvariousorganizations/ website, receivedfromvarioussources.Byvisitingthisweblink The Institute is posting ‘training opportunities for students’ on its For recognitionofProfession x) ix) viii) Conclave was orgainisedat Hotel ITC Maratha Andheri organised at the occasion followed by dinner. SecondICSI HR of 150 companies of Delhi/NCR, A panel discussionwasalso Gurgaon on30.08.16.The event wasattendedby HR Heads Hindustan Times(Shine.com) atHotelLeelaAmbience with in association was organised First ICSIHRConclave 4. were identified. Ascentia Drive candidates aspertheirchoice: training. Companies/PCS/otherentitiescansearch Weblink forcapturingdataofstudentswillingtojoin on theInstitute’swebsiteforourmembers: Developed weblink“Jobopportunitiesformembers” NCLT/NCLAT (inplaceofCompanyLawBoard) Other statutorybodyorregulatorybody. Labour Department HR Conclavesin Gurgaon and Mumbai JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 21 20 JANUARY 2017 I CHARTERED SECRETARY is there, who cherishes everyvista of their feminism andbring team inICSI that suchazealous anddedicated feel dignified day. I team onWomen’s of our women spirit ofwomanhood here inIndia,my ICSI team also salutedandcelebratedthe the impact onbroadersocial and economicoutcomes.Back dialogue on including women in decision-making positionsand March, 8 2016 atParis.Theconference focussedonfosteringapolicy on Leadership’ to Access Women’s ‘Improving on by OECD hosted platform inaconference at aninternational to representmycountryand ICSI and honoured I feltprivileged International Conference OECD andservicetothenation. compliances, corporategovernance through corporate excellence ofprofessional of agreatlegacy the completionof 36 yearsofourexistenceastheproponent January 1 as ‘Uday Diwas’ throughout the country to rejoice excellence anddevelopment at parity. ICSI celebrated Company SecretariesinIndiatowardsproficiency,professional of of theprofession journey day hasmarkedtheglorious came intoforce on 1st day of January, 1981.Sincethen, this Act, 1980 Secretaries that theCompany are aware As you Uday Diwas amenities forStudents,MembersandStaff. technologically advancedData Centreand Consolidated Office Services; TechnicalTraining,StateofArt Facilities, Back featuring theITandEnabled hub fortheprofessionals act asaknowledge will officeoftheinstitute inaugurated newly 50,000 SquareFeet. block withanareaofapproximatelyThis office this newedifice.ICSIHouseatNOIDAisaspacious December 25,2016.AgrandPoojawasperformedtoinstate Ministry ofTourism&Culture,GovernmentIndia,on Charge), MinisterofState(Independent Sharma, Hon’ble by thegracioushandsofDr.Mahesh Noida wasinaugurated office premisesatC-36,Sector-62, The newlypurchased HOUSE,NOIDA OF ICSI GETSANEWADDRESS: INAUGURATIONICSI 26, 2016toJanuary15,2017fortheveryfirst time. November of ICSIfrom NIRC the through Institute forthefirsttime by the commenced stretch of15days,hasbeen continuous MSOP ata to join of theInstitute,butnotable examination for SeniorProfessionalshavingpassedtheProfessional SkillsOrientationProgram(WE-MSOP) Weekend Management participation inMSOPs,keepingthis view, aspecial who arenotabletosparetimeforfull professionals deliver morethanexpected.”We fathom thelimitationsof our in “Always The co-founderofGoogle,LarryPagebelieves (WE-MSOP) 1st Weekend Management Skills Orientation Program CS requirements. consultancies of the country for scouting theirCS and trainee with leading in easternandNorthernregion.Connecting recruiters potential the sameto2,000 target tocirculate having and of CSrolesandresponsibilities the brochure Redesigned 5. by one&all. appreciated success and were huge were on theoccasion.Bothprograms companies of Mumbai. A panel discussionwasalsoorganised Mumbai on23.09.16andwasattendedbyHRHeadsof 250 Reaching out to potentialRecruiters out Reaching CHARTERED SECRETARY I JANUARY 2017 rcie i Ida uig h ssin Ipoig Governance ‘Improving session the during India in practices behalf of ICSI, I presented a research paperone-governance Firms. On and Consultancy Private Companies Agencies, Offices, State Corporations, Semi-AutonomousGovernment Governments, ConstitutionalCommissions,Independent members of the ICPSK, GovernmentMinistries,County participants such as this Conferenceamongstotherjudicious 17-19 at Mombasa. ICSI was cordiallyinvitedto participate in organized its 20th AnnualInternationalConferenceonAugust (ICPSK) of Kenya Secretaries Public The InstituteofCertified of Kenya Secretaries 20th AnnualConferenceofInstituteCertifiedPublic themes. allied governance on abroadrangeofglobal deliberations thought-provoking and lively andwitnessed and marketpractitioners academia June 27to July 01, 2016. The Conference broughttogether ICGN andtheirESG Course heldatSanFrancisco,USAfrom attended and isbasedin47countries.ICSIrepresentatives professionals with members including institutionalinvestors of governance organisation Network (ICGN)isaninvestor-led in 1995,theInternationalCorporateGovernance Established ICGN Annual Conference- USA Investment (CISI). also visitedthe delegation CharteredInstitute of Securities and development programmesinIndiafor ICSI members. The emphasized on the need for organizing jointprofessional We at London. on April28-29,2016 meeting CSIA executive Immediate Past President, ICSI and myself participated inthe Secretaries andGovernanceProfessionals.CS Atul Mehta, Body ofInstituteCompany is anInternational (CSIA), which members of Corporate Secretaries InternationalAssociation of thefounding The ICSIisone goals. and aspirations common cooperation amongst the professional bodies,whichshare international in obtaining role a significant The Instituteisplaying Executive Meeting at London Corporate SecretariesInternationalAssociation(CSIA) here atICSI. both ‘mind and heart’ in their respective areas of responsibility served as a platform for representing Governments and and Governments representing for platform a as served Group, which Advisory atGRIGovernmental represented also 70 countriesandmorethan 1200 participants.TheInstitute of morethan in oneofthesessions.There wasaparticipation the participants Amsterdam onMay18-20,2016 andaddressed Conference on “Empowering Sustainable Decisions”heldin at the5thGRIGlobal The Instituterepresented sustainability. that promoteseconomic,environmentalandsocial organization (GRI) isanon-profit Initiative Reporting The Global GRI GlobalConference 5th and regulatorsfromvariousjurisdictions. information andideasamonginsolvencypractitioners,judges of a forumforexchange September 14.TheSeminarprovided on by INSOLInternationalinJakarta,Indonesia organized at aonedaySeminar The Instituteparticipated insolvency. in turnaroundand associations ofspecializing professionals federationofnational is aworld-wide INSOL International INSOL Seminar atJakarta India’. and ServiceDeliverythroughE-Government:The Case of 21

FROM THE PRESIDENT Organisations, to exchange updates about the latest core of my heart for being there in my journey through all developments in the area of sustainable development and visible as well as invisible support and good wishes as in reporting in their own countries. Here, ICSI also released an underlying poem the poet is thanking God for being there in the e-book on Sustainability & CSR. saddest and most testing times even.

MACS Conference Footprints on the Sand The Institute participated in the Malaysian Association of One night I dreamed a dream. Company Secretaries (MACS) Conference, 2016 organized on As I was walking along the beach with my Lord. September 27 – 28 at Kuala Lumpur. Myself, on behalf of ICSI, Across the dark sky flashed scenes from my life. addressed the participants on ‘The Role of the Company For each scene, I noticed two sets of footprints in the Secretary as the Chief governance Officer: the India’s sand, Experience’. The conference served as a premier platform to One belonging to me and one to my Lord. enhance knowledge about latest regulatory changes and After the last scene of my life flashed before me, developments in area of Corporate Laws, Governance and I looked back at the footprints in the sand. Compliance in India. I noticed that at many times along the path of my life, especially at the very lowest and saddest times, Khadi, the Dream Project of Government of India there was only one set of footprints. For every minute I spin, there is in me the consciousness that This really troubled me, so I asked the Lord about it. I am adding to the nation’s wealth. So said the Father of our “Lord, you said once I decided to follow you, FROM THE PRESIDENT Nation Mahatma Gandhi about the humble fabric ‘Khadi‘. It is You’d walk with me all the way. not just a cloth, but a complete movement started by Gandhiji. But I noticed that during the saddest and most The Khadi movement aimed at boycotting foreign goods and troublesome times of my life, promoting Indian goods, thereby improving India’s economy. there was only one set of footprints. Appreciating the importance of Khadi, the Institute stationed a I don’t understand why, when I needed You the most, KVIC Van at ICSI Head Quarters to spread awareness about You would leave me.” the role played by Khadi & Village Industries Commission He whispered, “My precious child, I love you and will (KVIC) in nation building and to facilitate ICSI stakeholders to never leave you buy the Khadi products at their doorsteps. Never, ever, during your trials and testings. When you saw only one set of footprints, Recognition of Company Secretary under Guidelines for It was then that I carried you.” Grant of Unified License (Virtual Network Operators) Recently, Guidelines for Grant of Unified License (Virtual It was all the same for me too.....while putting all my dedication Network Operators) issued by the Ministry of Communication and hard work to take ICSI to unfathomable heights in the year and Information Technology authorise a Company Secretary gone by, whenever, I faced repressive challenges in my professional to certify the Certificate of Registration along with course, there were another set of zillion invisible footprints Articles of Association, Memorandum of Understanding, along me...... and that was all ICSI Stakeholders. Details of Promoters/ Partner/Shareholder Foreign Direct In the last, I can’t stop myself from humming my favourite lines Investment in the company for the purpose of Application to from Robert Frost’s poem Department of Telecommunications for Grant of Unified License (Virtual Network Operators)/Authorisation for Additional The woods are lovely, dark and deep, Services. But I have promises to keep, And miles to go before I sleep, Metamorphosing Chartered Secretary And miles to go before I sleep…!!!. To make it more appealing and interesting to the esteemed readers, Team ICSI has tried to enrich the outlook and content of Chartered Secretary Journal. It is now being published in high quality matt paper for superior readability with laminated Wishing the best for ICSI....!!! matt cover. Besides, a good number of new features such as Research corner, Ethics and Code of Conduct Corner, Sustainability Corner, CG Corner, PCS Corner, NCLT Corner; Brain Teasers, a separator for each section for better indexing etc. have been launched to enrich the knowledge of our venerated readers. Yours sincerely

Epilogue As I move on to bid adieu to all of you precious stakeholders, January 05, 2017 I wish to express again that it was absolutely wonderful to New Delhi (CS MAMTA BINANI) team-up with you all, and I wish to thank all of you from the [email protected]

22 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 23 ARTICLES

n BUDGET 2017 - SUGGESTIONS CONCERING INCOME-TAX n DEFINITION OF ‘PUBLIC COMPANY’: EFFECT OF THE PROVISO TO SECTION 2(71) OF THE COMPANIES ACT, 2013 n AMALGAMATION/MERGER AND WINDING UP CASES TRANSFERRED FROM HIGH COURTS TO THE NCLT: ROLE OF PCS n HOW TO AVOID UNDUE HARASSMENT OF DIRECTORS n WRONGFUL WITHHOLDDING OF COMPANY’S PROPERTY, CONSEQUENSES OF n DRAFTING RESOLUTION WITH CLASS AND CLARITY n TRANSFER OF UNPAID DIVIDEND AND SHARES UNDER IEPF AUTHORITY (ACCOUNTING, AUDIT, TRANSFER AND REFUND) RULES, 2016 n THE JOURNEY OF THE INDIAN COMPETITION REGIME IN THE LAST 7 YEARS : WAY FORWARD n GRATUITY: EXEMPTIONS, TAXABILITY AND RELIEF UNDER THE INCOME TAX ACT, 1961 n LISTING OF STOCK EXCHANGES: A LOGICAL STEP FORWARD FOR INDIAN DEMUTUALISED STOCK EXCHANGES n INPUT TAX CREDIT UNDER GST- ANOTHER BACKLASH ON BLACK MONEY

22 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I DECEMBERJANUARY 2017 2016 23 24 JANUARY 2017 I CHARTERED SECRETARY FormerChairman, CBDT&SpecialSecretary, * [email protected] Noida (U.P.) Advocate T.N. Pandey* Income-Tax Budget 2017-SuggestionsConcering Ministry ofFinance. CHARTERED SECRETARY I JANUARY 2017 Extend LTA benefit to international journeys * * IncreasehomeloaninterestdeductiontoRs.5lakh(fromthepresentRs.2lakh). * * * the detailsgivenhereinafter,arefortakeawaysfromFM.Theseare:- published forinclusionintheFinanceBill,2917,majorityofwhich,ascouldbeseenfrom are mentionedhereunder.Inthisjournal,variousbudgetideasfromexpertshavebeen ‘Wealth’ – a supplementary journal of the Economic Times dated 19-25 Dec., 2016 issue needs noevidenceinitssupport.Yet,somesuggestionspublishedtheweeklyJournal structure/system/procedures. Thishasbeentheusualpracticewidelyprevalentand no suggestions,whichmayassisthiminearningmorerevenueandimprovingthetax FM should give by diminution fromtheexisting tax revenues, but practicallythere are going tobenodifferent)thatwhilemakingsuggestions,theemphasisisonwhat the I.T.Act,1961(Act).Regretfully,ithasbeenpastexperience(andthisyearis Give higher deduction for first time homebuyers. Presently, additional deduction for * *Present lawexemptstax(oncapital gain)onsaleoflistedsecurities.Hence,ifabusiness *Allow openingofaretirement demata/c also, needtobementioned.These are:- Exemptcashlesspurchasesofgoldandjewellery fromsubmissionofPAN. To befairtothejournal,changes, whichrelatetochangesinlaw,systemsandprocedure NoservicetaxorGSTontermplans,healthcovers shouldbelevied * BringbacktheStandardDeduction(SD)forsalariedemployees. * * * Reduce tax filing burden on retail traders. Further, the suggestion is that trading in * * * T answered inthisarticle. generate moreincome. This importantquestionissoughttobe Minister shoulddotostrengthenandimprovethetaxsystem on concessionsandexemptionsnotwhattheFinance Why itisthatsuggestionsmadegenerallypriortoBudgetfocus small entrepreneur saleshisbusinessassuch, hehastopaytaxonit.This disparity eei ut R.200- a gvn / 8- o te c, u ti scin was later section but this Act, of the 80-L u/s was given Rs.12,000/- upto benefit Make interestonbankFDStaxfreeuptoRs.1.5lakhayear.PresentlyNIL.Such discontinued fromtheAY2012-13. of Rs.2.50 lakh for non-senior citizen taxpayers. Such benefit was given earlier but Provide forhigherbasictaxexemptionlimitfemaletaxpayersfromthepresent which ispresentlypeggedatRs.2lakh. Increase overalltaxdeductiontoRs.3.5lakhundersections80C,80CCC,80CCD(1B), first time homebuyers of Rs.50,000/- is given for loan of less than Rs.35 lakh and for a repealed bytheFinanceAct,2005. to Rs.3 lakh and it should include all home loans for first time buyers. In this context, house valuedbelowRs.50lakh.Thesuggestionisthatdeductionshouldbeincreased is soldthroughthetransferof listedshares,nocapitalgaintaxispayable.But,ifa capital gainu/s54ECoftheAct. Mutual Fundswithlock-in-periodof3-5yearsshouldbeprovided exemptionfrom securities shouldbeexcludedfromthepurviewofsection44AD. 80CCD(ib). Make annuityincometaxfreeuptoRs.1,20,000/-frompresent Rs.50,000/-u/s rising inflation. Increase deductionlimitformedicalinsuranceatleasttoRs.75,000/-, inter-alia,for priority housing should be defined to include house in the range exceeding Rs.80 lakh. 8h e. o s Fb, h Fnne iity ut e loe wt numerous with flooded be must Ministry Finance the Feb., 1st to Feb. 28th he dateofbudgetpresentationhavingbeenpreponedbyaboutamonthfrom suggestions concerning,inter-alia,incometaxmeasures,tobeincorporatedin PART-I : General Articles 25

ARTICLE ARTICLE * are asunder:- suggestions compiled by ‘Wealth’, my observations on the same Without meaninganydisrespecttothepersons,whomade ANALYSIS OFTHESUGGESTIONS 26 Eep itrs o fxd eois n h cs of senior case the in deposits fixed on interest Exempt SimplifytheRGESSforincreasedparticipation. * ClarifyhowNPSTier-IIwillbetaxed. * * * ClarifyRulesforclaimingforeigncredits. * * BUDGET 2017 - SUGGESTIONS CONCERING I said to be ‘inflation’. Mostly, the figures are fixed on ad hoc suggested arearrivedat.Thereasonforchangesintheseis the same and are of discretionary nature fixed by the FM at way ofgivingtaxreliefscannotprovideanysoundbasisfor basis andsometimesforpoliticalconsiderationsalso.Such as per thechanges workedoutonindexed taxlawbasis. as taw law for inflation and make changes in the financial limits rationality. Thepropercourse for suchlimitsistoindexthe yielding taxlaw,whichcan be testedonthegroundof revenue and healthy the developmentof asound to lead the timeofannualbudgets-making. Suchasituationcannot or now for provided figures the how to as indicated been lakh togivereliefthetaxpayers.But,nobasishas raising thebasicexemptionlimittoRs.3.50lakhorRs.4 Media reportsshowthat,perhaps,theFMiscontemplating already providedintheActastaxincentives/exemptions. limit, providenewonesandincreasethelimitforthose Most ofthesuggestionsrelatetoraisingbasicexemption of taxingbonussharesatnilvalueneedstobechanged. the taxburdenfairly.Hence,practice base anddistribute crore oflossesfortheGovt.Theshouldwidentax cottage industryofbonusstripping,causingthousands as aproportionatepartoftheoriginalcost.Thiscreates The costofbonussharesiscountedaszero,ratherthan needs toberemoved. salary earnersbyrevivingSD. Give deductionforemploymentrelatedexpensestothe limit forthem. citizens and alsofrompaymentofTDSorraisethethreshold the problemofblackmoney. provide aneffectivesolutionto forms. Hence, itcannotbesaidto benami namesandvarious other estate, jewellery, goldandsilverin of suchmoneyinvestedinreal in cash. Itdoesnottake care tapping ofstocked blackmoney if successful, canonlyleadto 2016. However, suchameasure, Narendra Modi, on8thNov., announced bytheP.M., Shri notes ofRs.500 &Rs.1,000 was The demonetizationofcurrency NCOME-T Ax Rmv te od ‘n xes f wny huad rupees’ thousand twenty if excess ‘in words the Remove * Suggestions forpreventingsuchmisuse shown ascomingintheformofRs.2,000/-orlesseramounts. to Rs.2,000/-.Thismaynothelpasthenmajorreceiptswillbe has suggestedthatthelimitofRs.20,000/-shouldbereduced Election Commissionhasexpressedconcernaboutthisand more than4/5thofsuchdonationsreceivedin this way.The parties areshowingdonationsuptoRs.20,000/-representing upto Rs.20,000/-.Thisprovisionisbeinggrosslymisusedasthe record, includingnamesandotherparticularsregardingdonors such partiesisthatthesearenotrequiredtomaintainany parties comeinpower.Thepresentlawconcerningtaxationof as donations,obviously,forgainingfavoursfromtheGovts.when belief thatmuchoftheblackmoneygetspassedtosuchparties regarding exemptionfromtaxofpoliticalparties.Thereiswide Presently, thereislotofdiscussioninmediaandotherforums parties Amendment ofsection13Arelatingtoincomepolitical Besides theabove,someothersuggestionsareasunder:- SOME OTHERSUGGESTIONS * In the NIPFP’s study, it has been said that ‘pervasive and detailed [i] Taxlawsarenotthebasicreasonforgenerationofblackmoney. The problemneedstobetackledintwowaysnamely– to provideaneffectivesolutiontheproblemofblackmoney. benami namesandvariousotherforms.Hence,itcannotbesaid such moneyinvestedinrealestate,jewellery,goldandsilver tapping ofstockedblackmoneyincash.Itdoesnottakecare 2016. However,suchameasure,ifsuccessful,canonlyleadto by theP.M.,ShriNarendraModi,on8th Nov., was announced The demonetizationofcurrencynotesRs.500&Rs.1,000 Controlling the flow of unaccounted/black money * the publicservices,etc.Thus, variousotherfactors,notmerely educational institutionordecisions onpostingsandtransfersin issue oftaxassessmentorders, theadmissionofastudentinan of documents,complaintsregarding electricity,telephones,the regular publicservicessuchas saleofstamppaper,registration quite commonforillegalpayments tobedemandedinreturnfor ‘hush and permits and regulations.TheNIPFPhasfurthersaidthatitbecome and licences issuing money’ forturningablindeyetotheviolationsofGovt.’srules for money’ ‘speed who administeredcontrols,thereislargescopeforcorruption, since considerablediscretionarypowerlayinthehandsofthose, The WanchooCommitteeatpage8ofitsreporthassaid that reaped in differentformsofillegalscarcitypremiaandbribes’. other meanshavebeenmajorsourcesofblackincomes and services(includinghousing),creditcontrolsvarious licensing, controlonpricesanddistributionchannelsofgoods through industriallicensing,import regulation ofeconomicactivity matter of taxation of interest on fixed deposits, reviving the of theoriginalcost,givingrelieftoseniorcitizensin as aproportionate part bonus shares taxing listed securities, Suggestions relatingtonon-exemptionofcapitalgainon Delhi HCformakingsuggestionsinthisregard. functioning undertheChairmanshipofaretiredjudge should beindexedcanreferredtothecommitteealready Some countriesarealreadydoingso.Howthetaxsystem be entitledtoexemption,whichareincashlessform. Insert aprovisioninsection13Athatonlythosereceiptswill from proviso(b)tosection13A; by theFM. SD andTDSaregoodsuggestionsneedtobeaccepted JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 27 26 JANUARY 2017 I CHARTERED SECRETARY 2017, ifthereisseriousdesire tochecktaxevasion. Some oftheseaspectscanbe takencareofbytheFinanceAct, social stigma and at times also high political profile. affect high political profile. In UK also, non-compliance has some and obvioustaxfraudsimpartsocialstigmasometimes For example,inSwitzerland,Sweden,NorwayandItaly,clear to tax frauds. stigma isattached number, though fewin countries, A studyoftaxlawsothercountrieshasrevealedthatinsome as adirectorincompanyforperiodofsixyears. also for holding any public elective office or for being appointed Also, such persons should be disqualified for national awards as sympathy, patronage,licenceorfacilityfromthesideofGovt. be arousedagainsttaxevasion.Ithasrecommendeddenial of The WanchooCommitteehassaidthatsocialconscienceshould honest taxpayersinschool,etc. Govt. contracts,makingtenders,teachingofvaluesbeing of criminaloffence(asinthecaseLaluPrasadYadav],taking fighting elections (as in the cases of those, who are convicted now ceased but Govt. sanctions/approvals in various fields and sense itwasprevalentearliermentionedinNPFP’sreport,has because ofnon-economicfactors.Thoughthelicencingerain and regulations,maynotbeentirelyfreefromblackmoney CONCLUDING COMMENTS persons found guilty of tax evasion from holding public offices, the tax evasioncases,debarring dealing with special courtsfor survey, strengtheningtheprosecutionprovisions,establishing Other wayscanbetochangelegalprovisionsrelatingsearch/ media reports,alreadycomebacktothebanks. numbers) reportedbytheRBIincirculation,have,accordingto in and success asthedemonetizednotes(invalue a be going to Demonetization hasalreadybeentried,which,itappears,isnot unrecorded ways,notformingpartofGDP. in theformofbribes,facilitationfees,etc.,anditsutilization forms stillexistandbecomeacauseforblackmoneygeneration creation of ‘parallel economy’. Even an economy, free of controls income taxandotherlaws,havebeenresponsibleforthe Tax evasioncannot becontrolledbysoftmeasures andamnesties CHARTERED SECRETARY I JANUARY 2017 income”. one percentdeclarestaxable returns andscarcelyone-third of observations werepublished:- FreePressdated11.01.1969,wherethefollowing the Philippine It wouldbeappropriatetoclosethisdiscussionwithanextractfrom taken asaseriousconstructiveexercise. done tostopgenerationofblackmoneyinfuture.Thisneeds be for tappingstockofblackmoney.Somethingworthwhileshould be the implementationofI.T.Act.Furthermuchhasbeendone suggest measures,whichwouldaugmentrevenueandimprove suggestions keepinginviewthegoodofcountryasawhole and aims. Theyshould make or sectoral so merelyforpersonal And lastlythose,makingsuggestionsinI.T.lawneednot do Bill, 2017,whichisunderpreparation. A desiretodososhouldbeprominentlyevidentfromtheFinance seriously andstronglydealtwithbylegislativeothermeans. Black moneyproblemposesseriousthreatsandistobetaken stigma and at times also high political profile. here that hardly one percent t of the population files income-tax list remindsusonceagainofthe startlingandshamefulfactoflife expect ofthenon-millionaires? TheBureauofInternalRevenue “If thewealthyincountry pay thatlittle,whatcantheGovt. high political profile. In UK also, non-compliance has some social and obvious taxfraudsimpart social stigmaand sometimes affect For example,inSwitzerland,Sweden,NorwayandItaly,clear countries thoughfewinnumber,stigmaisattachedtotaxfrauds. A studyoftaxlawsothercountrieshasrevealedthatinsome (1825) Chapter-VII,para18,page189] Manu” –translatedfromtheoriginalbyG.C.Haughton,London [Quotation fromthe“InstitutesofHinduLaworOrdnances consider thepunishmentasperfectionofjustice”. them. Punishmentwakeswhiletheirguardsareasleep;thewise “Punishment governsallmankind;punishmentalonepreserves Manu, theGreatHindulawgiver,hassaidaboutpunishmentthus:- that evadeandgetawaybypayingsomeextrataxpenalty. dilutes theconceptofdeterrenceintaxlawastaxpayersfeel prosecution hasbeenprovidedforthoseavailingofamnesties.This (as containedinTaxationLaws(SecondAmendment)Bill,whereno BUDGET 2017 - SUGGESTIONS CONCERING I 27 NCOME-T CS Ax

ARTICLE ARTICLE [email protected] Pune Practising CompanySecretary Dr. KRChandratre,FCS to section2(71)oftheCompanies Act, 2013 Definition of ‘Public Company’: EffectoftheProviso 28 PastPresident, TheICSI * 1 The Registrar ofCompaniesmayregisterthoseMemorandumandArticlesAssociation receivedtill11.9.2013 1 (68) 2(71) ofCompaniesAct2013(theAct)respectively,asfollows: The expressions “private company” and “public company” are defined in sections 2(68) and STATUTORY DEFINITIONS legal faction. To deem means to regard or consider (something) in a specified way; to treat A provision in a statute which contains the word ‘deemed’ is called a deeming provision or company initsArticles. for thepurposesofAct,evenwheresuchsubsidiarycompany continuestobeaprivate company whichisasubsidiaryofpublicshallbedeemed tobeapubliccompany, According totheprovisoappendedsection2(71)of2013 Act,insimplewords,aprivate INTERPRETATION OFTHEPROVISO The proviso appended to section hasaminimumpaid-upsharecapitalasmaybeprescribed: (b) isnotaprivatecompany; (a) (71) “publiccompany”meansacompanywhich— prohibitsanyinvitationtothepublicsubscribeforsecuritiesofcompany. (iii) Providedfurtherthat— (ii) restrictstherighttotransferitsshares; (i) be prescribed,andwhichbyitsarticles,— settled thatadeemingprovision isanadmissionofthenon-existencefactdeemed.The something asifitwere else;assumingafactwhichdoesnotreallyexist.Itiswell public company. The words ‘shall be deemed to be’ were absent in this provision. Simply stated,thismeantthataprivatecompanywhichissubsidiary ofapubliccompanyis isaprivatecompany whichisasubsidiaryofcompanynotprivatecompany.” (c) “public company”meansacompanywhich— as follows: of ‘public company’ in section 3(1)(iv) of the Companies Act 1956 (the 1956 Act) which read definition of ‘private company’ under the Companies Act, 2013. [General Circular No. 15/2013, dated 13-9-2013] as per the definition clause of the ‘private company’ under the Companies Act, 1956 without referring to the 2013 arehighlightedandclarifiedinthisarticle. confusions relatingtotheprovisosection2(71)ofCompanies Act, have theconditionsspecifiedindefinitionof ‘private company’. Some of the2013 Act asifitisapubliccompany, exceptthatitcancontinueto must complywithalltheprovisions and company be treatedasapublic A private companywhichbecomesa subsidiaryofapubliccompanyisto subsidiary companycontinuestobeaprivateinitsArticles. shall bedeemedtopubliccompanyforthepurposesofthisActevenwheresuch Provided thatacompanywhichissubsidiaryofcompany,notbeingprivate (B) personswhoarein the employmentofcompany;and (A) they shall,forthepurposesofthisclause,betreatedasasinglemember: Provided thatwheretwoormorepersonsholdonesharesinacompanyjointly, except incaseofOnePersonCompany,limitsthenumberitsmemberstotwohundred: “private company” employment ceased,shallnotbeincludedinthenumberofmembers;and of thecompanywhileinthatemploymentandhavecontinuedtobemembersafter persons who,havingbeenformerlyintheemploymentofcompany,weremembers 1

meansacompanyhavingminimumpaid-upsharecapitalasmay 2(71) substantially corresponds to clause (c) of the definition JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 29 28 JANUARY 2017 I CHARTERED SECRETARY 5 4 3 2 in company’ ‘private of definition the of (iii) and (ii) (i), clauses in articles ofthecompanycancontinuetocontainconditionsstated public companyforallintentsandpurposesundertheAct,but which becomesasubsidiaryofpubliccompanyisconsidered The effectoftheprovisotosection2(71)isthataprivatecompany THE NUMBEROFMEMBERS WHETHER THECOMPANYSHOULDINCREASE exist. purpose ofassumingtheexistenceafactwhichdoesnotreally Legislature isquitecompetenttoenactadeemingprovisionforthe requires himtobetreatedasifhewere(thatsomething). possible isthatwhereashenotinrealitysomething,thelaw fiction must be given its due play. There should be no half way play. definition in section 2(68) of the 2013 Act quoted above. As will quoted Act 2013 the of 2(68) section in definition to beincludedintheArticlesofeveryprivatecompanyasper can continuetohaveincludedinitsArticlestheconditionsrequired such subsidiary private companywhichbecomesasubsidiaryofpublic where “even the words company continuestobeaprivateinitsArticles”isthat of the in specified effect conditions the the Articles definition), its in inclusion to due but incorrect (sinceacompanyisnotprivate“initsarticles” Although nothappilywordedandbeingambiguousgrammatically which ithasbeencreated. But a fiction created by law cannot operate beyond the purpose for company, but it is treated as a public company by the legal fiction in as aprivatecompany;itsbasicstructureisthatof of apubliccompanyisprivatebybirth;itwasincorporated It isimportanttonotethattheprivatecompanywhichasubsidiary stipulated undersection3ofthe2013Act. must maintainduringitslifetimetheminimumnumberofmembers in thecompanyduringallitslifetime,itisaxiomaticthata laying downthatthenumbersstipulatedinsection3mustbethere of time the at i.e. incorporation only,evenintheabsenceofanexpressprovision company, the of ‘formation’ to regard with only Although therequirementofminimumnumbermembers is (b) (a) by— Act) providesthat,acompanymaybeformedforanylawfulpurpose Section 3(1)ofthe2013Act(correspondingtosection121956 should increasethenumberofmemberstoseven. company intermsoftheprovisoandwhichhasonlytwomembers, is confusion,whethertheprivatecompanyonbecomingapublic The first question that arises in this connection about which there specified in the definition of ‘private company’. public company,exceptthatitcancontinuetohavetheconditions and mustcomplywithalltheprovisionsof2013Actasifitisa subsidiary ofapubliccompanyistobetreatedas section 2(68).Inotherwords,aprivatecompanywhichbecomes stated in clauses (i), (ii) and (iii) of that definition. company, theArticlesofcompanymustcontainconditions be noticed from that definition, to constitute the company a private H.S.AtwalvUnionofIndiaAIR1994SC 2531:1994(5)SCC341:(3)Scale Commissioner ofIncome-taxvBombay TrustCorporationLtdAIR1930PC54. J. K.CottonSpinningandWeavingMills Ltdv.UnionofIndiaAIR1988SC191. Union ofIndiavJalyanUdyogAIR1994 SC88:1994(1)318:1993(3)Scale 758: 1993(5)JT266. Insurance Corporation AIR1968SC413:(1)SCWR379: 1968(1)SCR771. 555: 1994(5)JT346. SeealsoBraithwaite&Co.(India)Ltd. vEmployeesState a privatecompany. two ormorepersons,wherethecompanytobeformedis be apubliccompany; seven ormorepersons,wherethecompanytobeformedis 2 When a person isdeemed to besomethingtheonlymeaning CHARTERED SECRETARY 5

I JANUARY 2017 DEFINITION OF ‘PUBLIC C OMPANY’: E FFECT OF 3 Thelegal 4

eiiin f ulc opn, h rao big that section 44 being the reason company, public of definition to beaprivatecompany.”Nosuchprovisionhasbeenmadein the company, theshall,asondateofalteration,cease included inthearticlesofacompanyordertoconstituteitprivate under clause(iii)ofsub-section(1)section3,arerequiredto be such amannerthattheynolongerincludetheprovisionswhich, that “Ifacompany,beingprivatealtersitsarticles in into aprivatecompany.Sub-section(1)ofsection44provided 1956 Actwhichwasavoluntaryconversionofpubliccompany and henceceasestobeaprivatecompanyundersection44of the private companywhichhasbeenconverted into apubliccompany private subsidiarydoesnotceasetobeacompany,unlike As notedearlier,bybecomingasubsidiaryofpubliccompanythe as apubliccompany. purposes underthe2013Act,itwillbetreated other all for However, to remainsoafteritbecomesasubsidiaryofpubliccompany. a publiccompanyisthatofprivateandmaycontinue the basicstructureofprivatecompanywhichisasubsidiary the provisionsofActasifitwasapubliccompany.Therefore, becomes asubsidiaryofpubliccompanybutitmustcomplywith public companyisaprivateandremainssoevenafterit legislative intentthattheprivatecompanywhichisasubsidiaryof basically privatecompany.Theuseofthesewordsclearlyindicates that thecompany(whichisasubsidiaryofpubliccompany) n h poio o the to proviso the in otmltd fl-lde cneso o a rvt cmay into company a private of conversion full-fledged a contemplated below), whichwasomittedin2000. comply with.Thisisakintosection 43Aofthe1956Act(discussed with theprovisionsofActthat apubliccompanyisrequiredto but remainsaprivatecompany althoughitiscompelledtocomply public company,itdoesn’tundergo ametamorphosisorstructurally, against that,whenaprivatecompanybecomessubsidiary of a structure ofaprivatecompanyvanishesontheconversion. As undergoes atotalmakeoverandits basic it a publiccompany; the definition of “public company”. The words “is a private company” section 3ofthe2013 Act. of membersstipulatedunder its lifetimetheminimumnumber company mustmaintainduring its lifetime, itisaxiomaticthata there inthecompanyduringall stipulated insection3mustbe laying downthatthenumbers absence ofanexpressprovision of incorporationonly, eveninthe of thecompany, i.e. atthetime only withregardto ‘formation’ minimum numberofmembersis Although therequirementof THE PROVISO TO dfnto o ‘ulc opn’ ae it clear makes company’ ‘public of definition SECTION 2(71) OF THE COMPANIES A CT 29 , 2013

ARTICLE ARTICLE In HillcrestRealtySdn.Bhd.vHotelQueenRoad(P)Ltd, company, wastobeapubliccompany. company whichisasubsidiaryofnotprivate private companyisasubsidiaryofpubliccompany. restriction ontherighttotransferandsamewillapplyevenifa characteristics ofaprivatecompanyintermsthatsectionis even thoughitisasubsidiaryofpubliccompany.Onethebasic of section3(1)(iii)willcontinuetogoverntheaffairscompany to maintainthebasiccharacteristicsofaprivatecompanyinterms to subscribeitsshares.Therefore,alltheprovisionsinArticles (other thanemployeeshareholders)andprohibitsinvitationtopublic restrict therightoftransfershares, restrict itsmembership to 50 of thatsection,acompanyisprivatewhenitsarticles of theActbutnotwithreferencetoitsbasiccharacteristics.Interms company. Maybeitisapubliccompanyinrelationtootherprovisions the fiction in terms of section 3(1)(iv)(c) of the Act that it is a public altered justbecauseitisasubsidiaryofpubliccompanyinview company intermsofsection3(1)(iii)the1956Actdonotget Company LawBoardheldthatthebasiccharacteristicsofaprivate of apubliccompany. after itbecomesapubliccompany byreasonofitbeingasubsidiary it neednotincreasethenumber of membersfromtwotoseveneven a publiccompanyisessentially a privatecompanybyincorporation, also inviewofthefactthataprivatecompanywhichissubsidiary of relevant onlyatthetimeofincorporation and being of thecompany ingredient ofthebasicstructureandarequirementforformation However, asdiscussed above, it ispossibleto take a view that asan hence its benefit cannot be availed of. the 2013Act,itcannotbe deemed tobethere in the new Act and the Legislaturehasinitswisdomdidnotincludesuchaprovision in seven. Inotherwords,onemaydrawaninferencethatinasmuch as an expressprovision,thenumberofmembersmustbeincreased to below seven.So,oneinterpretationcouldbethatintheabsence of company undersection43Amaybe,oratanytimebereduced, the numberofmemberscompanywhichbecomesapublic proviso tosection43A(1)ofthe1956Actdeclaring,interalia, that The 2013 Act does not contain provision similar to that in the first members maybe,oratanytimebereduced,belowseven.” in clause(iii)ofsub-section(1)section3andthenumberits association may include provisions relating to the matters specified the privatecompanyhassobecomeapubliccompany,itsarticlesof in thisregard.Itwasclearlyprovidedsection43Athat,“evenafter Unlike the2013Act,Section43Aof1956Actdidnotlackclarity SECTION 43AOFTHE1956ACTDIDNOTLACKCLARITY a private definition, the of clauses three and the company” of a “public one to defined according Act 1956 the of 3(1)(iv) Section form intoanother(e.g.fromaprivatecompanytopubliccompany). undergo astructuralchangeasresultofitsconversionfromone company andapubliccompany,solongasthedoesnot things aretheessentialmattersfordistinctionbetweenaprivate company toconstitutetheaprivatecompany.Thesetwo are requiredtobeincludedinthearticlesofassociationaprivate conditions which and (ii)the 3 oftheAct; for acompanybysection a publiccompanyare:(i)theminimumnumberofmembersrequired a privatecompany or is the company company todeterminewhether and tomakeadistinctionbetweenprivatecompanypublic Two thingsthatgototherootofbasicstructureacompany WHAT AMOUNTSTO‘BASICSTRUCTURE’ DEFINITION OF 30 6 (2006)71SCL41 (CLB):(2006)133CompCas742(CLB). ‘PUBLIC C OMPANY’: E FFECT OF THE PROVISO TO SECTION 2(71) 6 the OF defined under section 3(1)(iii). By the they haveandcanretainallthe attributesofaprivatecompanyas public companiesansweringthe description containedthereinthough Section 43AoftheCompaniesAct,1956,createsanewclass of was heldbytheSupremeCourtthus: [2015] 188CompCas291(SC);AIR2015SC(Supp)1566,and it In DariusPuttonKavasmaneckvGhardaChemicalsLtd.andOthers companies areentitledto. companies andisentitledtoexemptionsprivilegeswhichpublic comply withtherequirementsunderActapplicabletopublic purposes, tobetreatedasapubliccompanyandisrequired to which isasubsidiaryofpubliccompanyis,forallintents and Thus, exceptforthebasicstructuralframework,aprivatecompany company althoughretainsitsbasiccharacterasaprivatecompany. which becomesapubliccompanybybeingsubsidiaryof These observationsarerelevantinthecaseofaprivatecompany public companybevirtueofsection43A”. (iv) cannotbeequatedwitha“privatecompanywhichhasbecome 3(1)(iii). Therefore,theexpression“publiccompany”insection3(1) which byitsarticlescontainstherestrictionsmentionedinsection is notaprivatecompany,thattosay,whichcompany cannot possibly do so because, by the very definition, it is that which typical characteristicsofaprivatecompany.Apubliccompany an invitationtothepublicsubscribeforshares,whichare of shares,limitingthenumberitsmembersto50,andprohibiting as partofitsstructure,provisionsrelatingtorestrictionsontransfer “In the first place, a section 43A company may include in its articles, was omittedin2000)asfollows: Court observedinthe context of section43A the 1956 Act(which this, itcannotbethatandifisthis.TheSupreme that thesetwocategoriesofcompaniesaremutuallyexclusive.Ifitis company whichisnotaprivatecompany”)bearouttheargument the manner and in which a ‘public company’ is defined (“public company means a company’ ‘private of definition The Act. 1956 the that istosay,therenothirdkindofcompanyrecognisedby exclusive andcollectivelyexhaustiveofallcategoriescompanies, Holding Ltd, In Needle IndustriesIndiaLtdv Needle Industries Newey (India) CASE LAWONDEFINITIONSIN1956ACT 7 definitions of ‘public company’ and ‘private company’ are mutually and publiccompanies.Besides,theSupremeCourtheldthat Act therearetwokindsofcompanies,namely,privatecompanies (1981)51CompCas 743(SC). THE COMPANIES A CT 7 theSupremeCourtstatedthatunderCompanies , 2013 JANUARY 2017 date of amendment of section I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 31 30 JANUARY 2017 I CHARTERED SECRETARY there isnostatutorycompulsiontoalterthearticlesofassociation. either toretaintheoriginalarticlesofassociationoralterthem,but option tothe company an give provisos four private company.The the companyhaslostexemptionsandprivilegesattachedtoa more thanseven).However,inthe absenceofeitheranauthorityin hence itneednotincreasethenumber ofitsmemberstoseven(or to beaprivatecompanysofar itsbasicstructureisconcerned; which hasbecomeasubsidiary of apubliccompanydoesnotcease of thecompanyandthereforeit can besaidthataprivatecompany regarding theminimumnumber of membersatthetimeformation matters specified in section 3(1)(iii) should still continue even after the articlesofassociationreferable to and limitationscontainedin the restrictions to decidewhether members company andits the ‘basic structure’ of a private company would include the requirement (mentioned above)istobetakenthecorrectview,then the If theviewexpressedbyCLBinHillcrestRealtycase other company,shallbethequorumforameetingofcompany. 1956 Act),andtwomemberspersonallypresentinthecaseof any company whichhasbecomesuchbyvirtueofsection43A the personally presentinthecaseofpubliccompany(otherthana articles of the company provide for a larger number, five members 2013 Actassection174ofthe1956providedthat“unless the Act wasclearerthan the the 1956 one thousand.Inthisregardalso, members thecompanyasondateofmeetingisnotmorethan specified in section 3(1)(iii) from its articles of association. It is for either deletingallorsomeofthestipulationsrelatingtomatters specified under section 3(1)(iii) or to amend its articles of association stipulations initsarticlesofassociationrelatingtothematters sub-sections ofsection43Ahasthechoiceeithertoretainthose public companybyvirtueoftheoperationanyonefour to thematters”indicatesthataprivatecompanywhichbecomes the clause,“itsarticlesofassociationmayincludeprovisionsrelating the expression“may” in articles ofassociation.Theemployment of publiccompaniestoretainsuch classes permits thefour expressly a publiccompanycannothavesuchstipulations,section43A 3(1)(iii) areprivatecompanies,andundertheschemeofAct whose articles of association provide for matters specified in section time bereduced,belowseven”.Inotherwords,thoughcompanies that thenumberofmemberssuchcompany“maybeormayatany n patcl ifcly piae opn wih eoe a becomes which company a private difficulty practical One QUORUM ATGENERALMEETINGS further declare The provisos . 3(1)(iii) section in specified matters association ofsuch company may include provisionsrelatingto the of anyonethefoursub-sectionssection43A,articles company becomesapublicbyvirtueoftheoperation four provisostothesub-sectionsdeclarethatevenafteraprivate the public,otherthanitsmembers,directorsortheirrelatives.The section (1C)ifaprivatecompanyacceptsorrenewsdepositsfrom 25 percent.ofpaid-upsharesapubliccompany,andundersub- virtue ofthefactthatsuchaprivatecompanyholdsnotlessthan than suchamountasmaybeprescribed,undersub-section(1B)by of theaverageannualturnoveraprivatecompanynotbeingless by oneormorebodiescorporate,undersub-section(1A)virtue section (1)byvirtueofthefactthat25percent.itssharesareheld mentioned ineachofthesub-sectionssection43A:undersub- section tobecomepubliccompaniesonthehappeningofanevent 43A, therewerefourclassesofprivatecompaniesdeclaredbythe 43A bytheCompanies(Amendment)Act,2000,undersection f w mmes n a urm f ie ebr i te ubr of the number if members five of quorum a and members two of general meetings.Section103ofthe2013Actrequiresaquorum subsidiary ofapubliccompanywouldfaceisregardingquorum at CHARTERED SECRETARY I JANUARY 2017 DEFINITION OF ‘PUBLIC C OMPANY’: E FFECT OF public company. must increase company a private the numberofmemberstosevenafteritbecomesasubsidiary to whether as views of conflict be aprivatecompany“initsarticles”,thereprevailsconfusionand 2013 Actexpresslyprovidesthataprivatecompanycancontinueto of the2013Actandfactthatprovisotosection2(71) the formofaCourt/CLBjudgmentincontext of theprovisions ingredient ofthe basicstructureofthecompany. requirement oftheminimumnumber ofdirectorscannotbecalledan one directorifithasonlytwodirectors. Itshouldbenotedthatthe that requirementasapplicable toapubliccompanyandappoint which becomesasubsidiaryof a publiccompanymustcomplywith the definition of ‘private company’. Accordingly, a private company to be included in the articles as part of the conditions specified in ‘private company’, it is an independent provision and is not required h mnmm ubr f ietr i nt pr of part a not is directors of number minimum the conditions statedinthearticlesandsincerequirementregarding Since aprivatecompanycanretainitsstatusonlyinrespectof the company, twodirectorsinthecaseofaprivatecompany.” (a) aminimumnumberofthreedirectorsinthecasepublic individuals asdirectorsandshallhave— “Every companyshallhaveaBoardofDirectorsconsisting of number ofdirectors.Itprovides: Section 149(1)laysdowntherequirementregardingminimum THE NUMBEROFDIRECTORS WHETHER THECOMPANYSHOULDINCREASE offence. company’s debtsandtheonlyconsequencewillbeacompoundable members ofthecompanywouldnotbeliablepersonallyfor after becomingasubsidiaryofpubliccompany,thecontinuing private companydoesnotincreasethenumberofmemberstoseven But thereisnosimilarprovisioninthe2013Act.Accordingly,evenifa therefor. that time,andmaybeseverally sued company contractedduring be, shallbeseverallyliableforthepaymentofwholedebts with fewerthansevenmembersortwomembers,asthecasemay six monthsandiscognizantofthefactthatitcarryingonbusiness company duringthetimethatitsocarriesonbusinessafterthose the numberissoreduced,everypersonwhoamemberof the companycarriesonbusinessformorethansixmonthswhile below seven,orinthecaseofaprivatecompany,two,and members ofacompany,isreduced,inthecasepublic Section 45ofthe1956Actprovidedthatifatanytimenumber EFFECT OFREDUCTIONINTHENUMBERMEMBERS THE PROVISO TO SECTION 2(71) OF THE COMPANIES A CT te eiiin of definition the 31 , 2013 CS

ARTICLE ARTICLE [email protected] [email protected] Role ofPCS Transferred from HighCourtstotheNCLT: Amalgamation/Merger and Winding Up Cases 32 Associates, NewDelhi Advocate, Goswami& Anirrud Goswami New Delhi Advocate, SupremeCourtofIndia, Delep Goswami,FCS iutnosy o 7h eebr 21, h MA lo oiid h Cmais (Transfer Companies the notified also MCA the 2016, December, 7th on Simultaneously, the Act. namely, sections270to288;290303,section324and326365of 235 to240;andalso(ii)thewindingupprovisionscontainedinChapterXXofAct2013, sections 230(withtheexceptionofsub-clauses11and12);231to233 creditors andmembers(knownasschemes of amalgamation/merger/demerger)containedin XV oftheActwhichdealwithsanctioningschemescompromiseorarrangements into forceforadjudication/jurisdictionoftheNCLTare(i)provisionscontainedinChapter them withintheadjudicativejurisdictionofNCLT.ThenotablesectionsActbrought s e te ad rnfr ue 21, with 2016, Rules Transfer said the per 2016. As Order, Fourth Difficulties) of (Removal of PendingProceedings)Rules,2016(inshort“Transfer 2016”)andtheCompanies Further, thepetitionershallalso submitinformationformingpartoftherecordstransferred, treated asapplicationsundersections 7,8or9oftheInsolvencyandBankruptcyCode,2016. Benches oftheNCLTexercising respectiveterritorialjurisdictionandsuchpetitionsshallbe 433 oftheCompaniesAct,1956 pendingbeforeaHighCourtshallstandtransferredtothe (Court) Rules,1959i.e.petitions relatingtowindinguporderunderclause(e)ofsection the petitionhasnot been servedontotheRespondentunderRule26ofCompanies to transferofpendingproceedingswindingupontheground of inabilitytopaydebts,where by theHighCourttill1stApril,2017andNCLTonorafter 2ndApril,2017.Withregard Court onthedateofcommencementsaidrulesshallcontinue withandwillbedealt to voluntarywindingupofcompaniesundertheCompaniesAct, 1956pendingbeforeaHigh to winding up proceedings, the said Rules clarified that all applications and petitions relating and proceedingswhicharenotreservedforordershallbetransferred toNCLT.Withregard also clarified that proceedings which are reserved for orders shall not be transferred to NCLT stand transferredtotheBenchesofNCLTexercisingrespective territorialjurisdiction.It proceedings relatingtoarbitration,compromise,arrangements andreconstruction,shall effect from15thDecember,2016,allproceedingsundertheCompanies Act,1956including T amalgamation cases. NCLT inrespectofnewlytransferredjurisdictionwindingupcases and Secretaries (PCS)asthisenhancestheirpracticescopeforappearanceinthe developments forthecorporatesectorandPractisingCompany allows thePCStoappearbeforeNCLT andNCLAT, thesearesignificant in amalgamationcases. Sincesection432oftheCompanies Act, 2013 Order, 2016. The MCA hasalso notified the RulestobefollowedbyNCLT Proceedings) Rules, 2016andtheCompanies(Removal ofDifficulties)Fourth 2016. ItalsosimultaneouslyissuedtheCompanies(Transfer ofPending National CompanyLaw Tribunal (NCLT) witheffectfrom15thDecember, cases andwindingupfromthejurisdictionofHighCourtsto provisions oftheCompanies Act, 2013dealingwithamalgamation/merger The MinistryofCorporate Affairs hasissuednotificationsenforcingthe Companies Act,2013(“theAct”)andwitheffectfrom15thDecember,2016brought oiiain dtd t Dcme, 06 n efre cran rvsos of the certain provisions and enforced 2016 December, 7th dated notifications he CentralGovernment,MinistryofCorporateAffairs(MCA)issuedGazette JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 33 32 JANUARY 2017 I CHARTERED SECRETARY usqety vide Subsequently, the NCLTinaccordancewiththeseTransferRules,2016. fee shallbepayableinrespectofanyproceedingstransferredto notwithstanding anythingcontainedintheNCLTRules,2016,no having jurisdictionforthwithoverthecasessotransferredand also betransferredbytherespectiveHighCourtstoNCLT that therelevantrecordspursuanttotransferofcasesshall of theAct2013.ThesaidTransferRules,2016alsostipulate such petitionsshallbetreatedasundertheprovisions 15th December,2016toNCLTexercisingterritorialjurisdictionand of theCompanies(Court)Rules,1959,itshallbetransferredfrom petition hasnotbeenservedontotheRespondentunderRule26 on thegroundsotherthaninabilitytopaydebtsandwheresuch respect oftransferpendingproceedingswindingupmatters by theHighCourtandwillnotbetransferredtoNCLT.Also,in appeal ispending,itshallbedealt with High Courtandwhereno winding upofcompanyundersection20theSICA,1985to and FinancialReconstruction(BIFR)hasforwardedanopinionfor The saidRulesalsostipulatethatwheretheBoardforIndustrial from 7thDecember,2016,failingwhichthepetitionshallabate. proposed insolvencyprofessionaltotheNCLTwithinsixtydays the InsolvencyandBankruptcyCode,2016includingdetailsof required foradmissionofthepetitionundersections7,8or9 adjudication by NCLT open a significantly new area of practice for now broughtintoforcewitheffect from15thDecember,2016for the NCLTandits Appellate forum, it isfeltthat the provisions are nowentitled,aspersection 432oftheAct,toappearbefore Since Practising CompanySecretaries(PCS),amongstothers, maker. products based steel against aPune new BankruptcyCode Mumbai Benchinitiatingacorporateinsolvencyprocessunder the the ICICI Bank has already filed an application before the NCLT, for insolvencyandliquidationofallcompaniesitisreported that provisions willcomeintoeffect.TheBankruptcyCodeisapplicable appointed the1stDecember,2016asdateonwhich said of the provisions Code, 2016”)relatingtocorporateinsolvencyresolutionand has the notified has Insolvency andBankruptcyCode,2016(inshort“Bankruptcy MCA the 2016, November, Affairs (MCA) notified the Companies (Compromises, Arrangements December, 2015,theCentralGovernment,MinistryofCorporate PCS andtheyhavetogearthemselves uptomeetthechallenges 30th dated notification vide that here noted be to needs also It of companies. its whollyownedsubsidiarycompanyorsuchotherclassclasses two ormoresmallcompaniesbetweenaholdingcompanyand followed byNCLTforschemesofmergeroramalgamationbetween Also, section233oftheActprescribesdetailedprocedurestobe read withsection232andotherapplicableprovisionsoftheAct. amalgamations” (inshort“theCAAScheme”)underSections230 for sanctioningofSchemes“compromises,arrangementsand prescribing the Rules applicable to petitions filed before the NCLT and Amalgamations) Rules,2016(inshort“CAA2016”) of thePetitions bytheNCLT. and willhelpexpeditiousdisposal Scheme isawelcomedeparture to theNCLT ontheproposed submission oftheirreport/views The stipulationoftimelimitfor CHARTERED SECRETARY oiiain o GR 14 E dtd 14th (E) dated 1134 GSR No. notification I JANUARY 2017 AMALGAMATION/MERGER AND icoe b wy f fiai, l mtra facts material all affidavit, of way by shall disclose, NCLT the Sub-section (2)ofsection230stipulatesthattheapplicationto applications bythecompaniesconcerned. Further, sub-section(3)ofsection 230oftheActstipulatesthat prescribed undersection133of theAct. in theSchemeisconformity withtheaccountingstandards NCLT, totheeffectthataccountingtreatment,ifany,proposed financial statement not preceding the date of application by more or ifsuchstatementismorethansixmonthsold,asperprovisional such companies, a joint-application can be filed, instead of separate than onecompanyisinvolvedinaScheme,atthediscretionof those methods.TheCAARules,2016enablesthatwheremore division ofsharesintodifferentclasses,orbyboth capital bytheconsolidationofsharesdifferentclassesor that clarifies 230 section “arrangement” includesareorganisationofthecompany’sshare of (1) sub-section to Explanation The held andbeconductedinsuchmannerastheNCLTmaydirect. members orclassofmembers,asthecasemaybe,tobecalled, may orderameetingofthecreditorsorclasscreditors, of acompanywhichisbeingwoundup,bytheLiquidator,NCLT company or,inthecase the any creditorormemberof or company of them,thenanapplicationhastobemadetheNCLTby of them;or(ii)betweenacompanyanditsmembersanyclass is proposed(i)betweenacompanyanditscreditorsoranyclass 232 of theAct,whereaScheme of compromiseorarrangement Basically, aspertheprovisionsofsection230readwith their clientsbetterandwithoutmuchhassles. salient pointsshouldhopefullyfacilitatetheprofessionalstoservice Schemes and theCAARules2016arehighlighted and these only abroadoverviewoftheprovisions Act relatingtoCAA practice in one article will be rather difficult. thrown opentothem.Tocoverdetailsofboththeseareas certificate by the Auditor of the company has been filed with the unless a compromise orarrangement, of scheme sanction any than sixmonths.ThelawnowstipulatesthattheNCLTwill not remains outstanding as per the latest audited financial statement, the companytorespectiveclassorclassesofcreditors that make itclearthat“outstandingdebt”shallmeanalldebtowed by company” itshallbedisclosed.Further,thesaidCAA Rules, 2016 and incasetheSchemeincludes“reductionofsharecapital the the investigationorproceedingsagainstcompany of pendency latest auditor’sreportontheaccountsofcompanyand relating to the company, such as, its latest financial position, the WINDING U P CASES T RANSFERRED FROM HIGH C OURTS TO Hence, in this article, THE NCLT: R 33 OLE OF PCS

ARTICLE ARTICLE in the vernacular language of the State in twonewspapers(Rule7ofCCARules),oneEnglishand one Notice forthemeetingisalsotobeissuedbywayofadvertisement the Schemeofcompromiseorarrangement. may be,votinginpersonorbyproxypostalballot,agreeto class ofcreditorsormembersmembers,asthecase of personsrepresentingthree-fourthsinvaluethecreditors,or provisions ofsub-section(1)section230theAct,majority one day.Itispertinenttonotethatwhereameetingheldasper this requestwithin to complywith company ismandated and the for copyoftheschemeandconnecteddocuments,freecharge been prescribed.Personsentitledtoreceivenoticecanalsoask company orthedebenturetrusteesandsuchothermattersashas or arrangementonanymaterialinterestofthedirectors and thedebenture-holderseffectofcompromise key managerialpersonnel,promotersandnon-promotermembers the valuationreport,ifany,andexplainingtheireffectoncreditors, disclosing thedetailsofcompromiseorarrangement;acopy be accompaniedbyaStatement company andthesaidnoticeshall of thecompany,individuallyataddressregisteredwith and toallthemembersorclassofdebenture-holders the creditorsorclassof such noticeshallbesenttoall and debenturetrusteetheemployeesofcompany.Also, members; depositors;creditors;debentureholders,deposittrustee on keymanagerialpersonnel;directors;promoters;non-promoter au, ge ad ofr, y a o afdvt t te Scheme of the to of affidavit, way by confirm, and agree value, such creditorsorclassofcreditors,havingatleastninetypercent with callingofameetingcreditororclasscreditors,where free of cost, from the registered office of the company. of theschemeshallbemadeavailabletoconcernedpersons, of thecompanyissituated,indicatingtime,withinwhich,copies for the compromise or arrangement and its benefits and its effect companies andthenoticeshalldisclose,inter-alia,rationale including therelationshipofholding,subsidiaryorassociate between suchcompanies,whoarepartiestotheScheme, one company,thefactanddetailsofrelationshipsubsisting in thesaidRulesandwhereSchemerelatestomorethan the SchemeandaStatementdisclosingdetailsenumerated to thecreditorsandmembersshallbeaccompaniedbyacopyof The saidCAARules,2016stipulatesthatthenoticeofmeeting compromise orarrangement. However, the NCLT may dispense the date fixed for the meeting. the lastknownaddressofnotice,atleastonemonthbefore by handdeliveryoranyothermodeasdirectedtheNCLTto or e-mail post orbycourier post orspeed registered by sent for themeeting,asNCLTmaydirect,andsuchnoticeshallbe by theCAARules,2016ChairpersonappointedNCLT the proposedScheme,noticeshallbesentinformprescribed where theNCLTdirectsholdingofmeeting(s)forconsideration AMALGAMATION/MERGER AND 34 Exchange BoardofIndia(“SEBI”) andtothestockexchange company, thesedocumentsshall besenttotheSecuritiesand placed onthewebsiteofcompany, ifany,andincaseoflisted also be Notice ofthemeeting(s)and otherdocumentsshall as per the latest audited financial statement. amount to not less than five per cent of the total outstanding debt than tenpercentoftheshareholdingorhavingoutstandingdebt proposed Schemeshallbemadeonlybypersonsholdingnot less noting thatthelawnowclearlystipulatesanyobjectionto the month fromthedateofreceiptsuchnotice.Itishoweverworth ballot totheadoptionofproposedScheme,withinone postal vote inthemeeting,eitherthemselvesorthroughproxies by issued tothemembersandcreditorsshallprovidethattheymay WINDING U P CASES T where the registered office RANSFERRED FROM The notice HIGH C OURTS TO THE The CAA Rules stipulate that within seven days of the filing of the days aftertheconclusionofmeeting, fixed by the NCLT or where no time has been fixed, within three on theresultofmeetinginprescribedform,withintime also submitareporttotheNCLT Chairperson ofthemeetingshall notices andtheadvertisementhavebeendulycompliedwith.The the meeting,toeffectthatdirectionsregardingissueof Stock Exchanges; to the Official Liquidator; to the Competition to Liquidator; Official the to Exchanges; Stock the SEBI;Registrar of Companies(ROC);tothe respective to theIncomeTaxAuthorities;ReserveBankofIndia; sent (asperRule8ofCAARules)totheCentralGovernment; the NCLT.Suchnoticeandprescribeddocumentsshallbe of thePetitionsby help expeditiousdisposal departure andwill report/views totheNCLTonproposedSchemeisawelcome High Court.Thestipulationoftimelimitforsubmissiontheir the statutoryauthoritiestoenablethemgivetheirviews itself usedtonecessitateseveraladjournmentsattherequestof NCLT within the specified time frame of one month. as toenabletheseauthoritiesputforwardtheirviewsthe scheme a petitiontotheNCLTinprescribedformforsanctionof present shall report bytheChairperson,concernedcompany date for the hearing of the confirmation petition and notice of the (iii) Dissolution,withoutwindingup,of anytransferorcompany; (ii) (i) h Caresn pone fr h meig hl fl affidavit file shall meeting the to the NCLT, not less than seven days before the date fixed for for appointed Chairperson The Scheme. that theyhavenorepresentationstomakeontheproposed which,itshallbepresumed date ofreceiptsuchnotice,failing to thesaidScheme,withinaperiodofthirtydaysfrom if any, Scheme; andthenoticeshallrequirethemtogiverepresentations, Regulators orAuthoritieswhicharelikelytobeaffectedbythesaid Commission ofIndia,ifnecessary,andtosuchotherSectoral so itself stage first the in authorities statutory the to sent be to the PetitionalongwithSchemeandotherdetailsarerequired It ispertinenttonoteherethatinthenewdispensation,copiesof their website. where thesecuritiesofcompaniesarelisted,forplacingon make provision,inter-alia,for– the NCLTsanctioningSchemeorbyasubsequentorder,may The order of or such other time as may be fixed by the NCLT. Companies withinthirtydaysfromthedateofreceiptorder as the NCLT may think fit to make for the proper working of the any matter or such modifications in the compromise or arrangement sanctioning theschemeshallincludesuchdirectionsinregard to Liquidator andthecontributoriesofcompany.NCLT’sorder the casemaybe,orinofacompanybeingwoundup,on the creditors, orclassofcreditorsmembersmembers, as arrangement, itsordershallbebindingonthecompany,all Where theNCLTsanctionsaschemeofcompromiseor date fixed for the hearing. newspaper asNCLTmaydirect,notlessthantendaysbeforethe notice conveningthemeetingwasadvertised,orinsuch other the said hearing shallbeadvertisedinthe same newspaper in which y h NL sal e ie wt te ocre Rgsrr of Registrar concerned the with filed be shall NCLT the by compromise orarrangement.Suchordersanctioningthescheme NCLT: R company shallremain anunlistedcompanyuntil itbecomesa transferee companyisanunlisted company,thetransferee Where thetransferorcompany isalistedcompanyandthe company onthedateoftransfer; any legalproceedingspending byoragainstanytransferor The continuationbyoragainst thetransfereecompanyof f opoie r arrangement. or compromise of OLE OF PCS JANUARY 2017 I CHARTERED SECRETARY h NL sal i a fix shall NCLT The Earlier, this CHARTERED SECRETARY I JANUARY 2017 35 34 JANUARY 2017 I CHARTERED SECRETARY (vii) (vi) (v) (iv) Another important aspect which needs to be highlighted that officers (viii) under the Act by the officers in default of the transferor company, time beinginforce,theliability inrespectofoffencescommitted Act stipulatesthatnotwithstanding anythinginanyotherlawforthe merger schemewiththetransferee company.Section240ofthe from liabilityincurredpriortotheapprovalofamalgamation/ in defaultofthetransferorcompanycannotwashofftheirhands It needstobe appreciated thatChapterXV of theActand after suchmerger,amalgamation oracquisition. prior toitsmerger,amalgamation oracquisition,shallcontinue ROC every year duly certified by a chartered accountant or form andwithinsuchtimeasmaybeprescribedwiththe NCLT ornot; is beingcompliedwithinaccordancetheordersof a costaccountantorPCSindicatingwhethertheScheme until the completion of the Scheme, file a statement in such Every companyinrelationtowhichtheorderismadeshall, Act). contract approvedbythemajority(aspersection235of shares ofshareholdersdissentingfromtheschemeor The powersandtheproceduretobefollowedacquire amalgamation isfullyandeffectivelycarriedout; as aredeemednecessarytosecurethatthemergeror Suchincidental,consequentialandsupplementalmatters and on itsauthorisedcapital subsequent to the amalgamation; be set-offagainstanyfeespayablebythetransfereecompany shall transferor companyonitsauthorisedcapital paid bythe Where thetransferorcompanyisdissolved,fee,ifany, under thisprovisionmaybemadebytheNCLT; formula orafteravaluationismadeandthearrangements with both. less thanrupeesonelakhextendabletothreelakhsor lakhs and every officer of such a company who is in default punished with fine ranging from rupees one lakh to twenty five the provisionsofrelevantprovisionAct,itcanbe If the transferor companyoratransfereecontravenes and other benefits in accordance with a pre-determined price be madeforpaymentofthevaluesharesheldbythem decide tooptoutofthetransfereecompany,provisionshall listed companyandifshareholdersofthetransferor which may extend to one year or with fine which shall not be be liableforpunishmentwithimprisonmentaterm shall amalgamation oracquisition. shall continueaftersuchmerger, amalgamation oracquisition, company, priortoitsmerger, in defaultofthetransferor under the Act bytheofficers respect ofoffencescommitted being inforce, theliabilityin in anyotherlawforthetime that notwithstandinganything Section 240ofthe Act stipulates CHARTERED SECRETARY I JANUARY 2017 AMALGAMATION/MERGER AND sector. schemes andwindingupcasesaugurswellforthecorporate Transition fromHighCourtstoNCLTforsanctioningofCAA CONCLUSION it may think fit. report, the NCLT may pass such ordersorgive directions as the saidcompromiseorarrangementandonconsiderationof workshops/training courses. knowledge baseandacumenof itsmembersthroughseminars/ The professionalinstitutesalso havearoletoplayenhancethe over successfulinexpeditious disposalofcorporatelitigations. go alongwaytomakethechange- professionals andthePCSwill the stakeholders,includingcorporate cooperation ofall full of cases.Itisfeltthat the prescribedtimeframein disposal develop itsinfrastructureandmanpowersothatNCLTmaintains with numerouscases,therewouldbeneedtostrengthen and the CentralGovernmenttoissueappropriateorders. section 237oftheActprovideselaborateprovisionsempowering NCLT. Also,foramalgamationofcompaniesinthepublicinterest, effected inpursuanceofanySchemewhichissanctionedby the not applytothe“reductionofcapital” section 66oftheActshall Act. Further,thelawnowclearlyexplainsthatprovisionsof shall begiveneffecttoundertheprovisionsofsection48 arrangement resultsinthevariationofshareholders’rights,it NCLT ordersanctioningtheSchememay,ifcompromiseor provided intheAct. r tews patcbe ecp o toe atr specifically matters those on except practicable, otherwise or of theSchemearrangementorcompromiserestructuring in pursuanceoftheobjectprovisionsforimplementation Rules CAA procedure prescribedbythe with any or dispense or arrangement.TheNCLTmaypassanydirection(s)order any questionrelatingtotheworkingsanctionedcompromise its creditorormemberstoapproachtheNCLTfordeterminationof NCLT within such time as NCLT may fix, a report on the working of the companyisbeingwoundup,itsliquidator,tosubmit interested person,makeanorderdirectingthecompanyorwhere NCLT may,eitheronitsownmotionortheapplicationofany at anytimeafterissuinganordersanctioningaScheme,the the applicantcompanyinimplementingsanctionedScheme, To mitigate the practical difficulties likely to be faced by of CAA. connected withthesanctioningandimplementationofScheme CAA Rulesareacompletecodeandtakecareofallmatters WINDING U oee, ic NL Bnhs il o b flooded be now will Benches NCLT since However, P CASES T Similarly, liberty has been given to the company, RANSFERRED FROM HIGH C OURTS TO THE NCLT: R 35 OLE OF PCS CS

ARTICLE ARTICLE [email protected] New Delhi Advocate, JCSeth&Co. Anil KumarSeth [email protected] Advocate, NewDelhi J.C. Seth,FCS Directors How to Avoid UndueHarassment of 36 liable for offences committed by the company. The term “Officer in Default” is defined in the Companies Act holds all Directors and Company Secretary (called Principal Officer) So farascompliancewithdutiesandobligationsunderCompanies Actisconcerned compliance ofstringentlawsisessentialinpublicinterest. haven andrecentfraudsofVijayMallya,liquorbaron SubartoRoy.Hencestrict scale scamslike2-G,Spectrum,`CoalgateScam’anddeposits ofblackmoneyintax punishment oftheBoardDirectors.OflateIndiahasbeen sufferingfromvariouslarge Section 2(60)ofCompaniesAct,whichreadsasunder:- ii where there is no key managerial personnel, such director or directors as specified (iii) keymanagerialpersonnel; (ii) whole-timedirector; (i) laws etc. Violations of these laws attract imposition of fine, prosecution, conviction and of otherenactment,likecorporate,taxation,economic,industrial, labour,environment there arenumerousstatutorydutiesofDirectorsunderthe CompaniesActandscores Board ofDirectorstorunthebusinesscompanyininterestsstakeholders, of variousStatutesapplicabletotheCompany.Apartfrommainresponsibility success andfailuresinperformanceofaffairsthecompany,includingviolations Hence thenormalassumptionisthatallDirectorsareresponsibleformanagement, Management ofacompanyvestscollectivelyintheBoardDirectorscompany. avoid conflict between corporate and their personal interest. and make secret profit through `inside information’ of the company. The Directors must The Directorsarenotallowedtorunorcompetingcollusivebusinesswiththecompany should notabusetheprivilegedpositionoccupiedbythemincompany,asDirectors. diligently, ingoodfaithandhonestly.Theyshouldhaverationalfairdealings fiduciary duties, as the Directors are `Trustees’ of the company hence they must act of thecompany.InadditiontostatutorydutiesdifferentlawsDirectorshave Directors mustexerciseduecareandskillinconductingsupervisingtheaffairs management oftheCompanyandcompliancewithstatutoryprovisionslaws.The Duties ofDirectorsarecontainedinSection166theAct,whichincludeoverall A fewrestrictionsonpowersofBoardarecontainedinSection180theAct. which readsasunder: The powersofBoardDirectorsarecontainedinSection179(1)theCompaniesAct bestows Status,PowersandalsoenjoinsDutiesObligationsonBoardofDirectors. A avoiding undueharassmentofcompanydirectors. such ascenariothearticlesuggestscertainmeasuresfor in recentyearsonaccountofmajorcorporatescams. In offences undervarious lawshas beenmademorestringent The lawrelatingtotheliabilityofcompanydirectorsfor by theBoardin thisbehalfandwhohasorhave givenhisortheirconsent in writing “(60) officers of a company, namely:- enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment fine or otherwise, means any of the following authorized toexerciseanddo..”. to exerciseallsuchpowers,anddoactsthings,asthecompanyis “179. PowersofBoard-(1)TheBoardDirectorsacompanyshallbeentitled ” forthe purpose of anyprovisionin this Act which Officer who is in default company is an ‘artificial’ legal entity managed by a collective body called `Board and ArticlesofAssociationcompanyprovidethelegalframeworkwhich of Directors’.TheCompaniesAct(hereinaftercalledtheAct),Memorandum JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 37 36 JANUARY 2017 I CHARTERED SECRETARY and was responsible for, the conduct of the business of the firm firm at the time the offence was committed was in charge of, averments inthecomplainttoeffectthatpartnerof the Act 1974heldasunder:- defaults underthe Water (Prevention & Control) of Pollution The SupremeCourtinaleading casewhiledealingwith offence. be statedinthecomplaint,ordertomakehimliablefor the and particularsregardingconductofresponsibilityshould specific be must there that held Act the of 273B section of Officer (1994) 205 I.T.R. 176 while considering the provisions High CourtinthecaseofTMT.Thangalakshmiv.Income-Tax the principal officer and therefore certainly he was also to be Court judgmentheld“admittedlytheDirectorinquestionwas at Source,theMadrasHighCourtinrelyingonaSupreme In acaseunderIncomeTaxActrelatingtodeductionof various Act. on Boardarenormallyliableforanydefaultincompliancewith of theCompanyhenceallDirectors managing theaffairs time Directorsandevenpart-timearesupposedtobe and punishedaccordingly.ThustheManagingDirector,whole business aswellthecompanyshallbeguiltyofoffence of andwasresponsibletotheCompanyforconductits default every person who at the time of offence was ‘Incharge to the fine”. Following the dictum of the Apex Court the Madras prescribed minimumpunishmentofthreemonths,inaddition added “ithasnopowertoawardalesserpunishmentthan the punished underSection278BoftheIncomeTaxAct.TheCourt which of all Act, Prov.) (called NIAct)andSection14AoftheEmployeesP.F.(Misc. of IncomeTaxAct,Section141NegotiableInstrumentsAct section titledas“OffencesbyCompanies”.E.g.Section278B & IndustrialLaws,PollutionLawsetc.doinvariablycontaina Other applicableenactmentsofTaxation,Corporate,Labour Managing Director andmembersoftheBoard ofDirectors Section 47itisclearthatthe Chairman,Vice-Chairman, “On acombinedreadingof sub-sections (1)and(2)of to the Board to such specification, or all the directors, if no xxx director is so specified; CHARTERED SECRETARY xxx pcfcly rvd ta i cs of in case that provide specifically I JANUARY 2017 xxx after reviewingits17earliercasesconcludedasunder:- Maharashtra ,2016SCConlineSC304theSupremeCourt In therecentcaseofStandardCharteredBankv.State of c The answer to Question (c) has to be in the affirmative.(c) The under a complaint in aver specifically to necessary is “(a) It to it:- 89 gavefollowingdirectionsinanswertothequestionsposed The judgementbythreeJudgeBenchreportedin(2005)8SCC Neta Bhallawasreferredtolargerbenchof Supreme Court. Pharmaceuticals Ltd.v. SMS The caseof of smallCompanies. of thecheques,whichisacommonoffenceespeciallyincase 141 ofNegotiableInstrumentsAct1881relatingtodishonouring types ofcases.ItispertinenttorefertheprovisionsSection The LawisalwaysevolvingasCourtshavetodecidedifferent (b) error by coming to the conclusion that considered opinionthattheHigh Courthasfallenintograve in chargeofdaytoaffairstheCompany,weare and theywere Executive Director Director and whole-time relating totherespondentNos.2and3hereinthattheyare complaint andalsotakingnoteoftheavermentsputforth “34. Thus,consideringthetotalityofassertionsmadein under sub-section(2)ofSection141.” responsible fortheincriminatingactandwillbecovered a chequewhichisdishonouredconcerned,heclearly get coveredunderSection141.Sofarasthesignatoryof the conductofbusinesscompany.Therefore,they director, thesepersonsareinchargeofandresponsiblefor “35. Resultantly, theappealsareallowed and theorder test laiddowninGunmalaSales Pvt.Ltd.(supra)”. so astheasseverationsmade inthecomplaintmeet against thesaidaccusedpersons. Weunhesitatinglyhold averments inthecomplaint forissuanceofsummons the office they hold as managing director or joint managing become liableunderSection141oftheAct.Byvirtue When thatisso,holdersofsuchpositionsinacompany responsible tothecompanyforconductofitsbusiness. director would beadmittedlyinchargeofthecompanyand question notesthatthemanagingdirectororjoint liability ofadirectorinsuchcases. time. Thishastobeaverredasafactthereisnodeemed the conductofbusinesscompanyatrelevant be madeliableshouldinchargeofandresponsiblefor The requirementofSection141isthatthepersonsoughtto in chargeofandresponsiblefortheconductitsbusiness. of theAct.Adirectorinacompanycannotbedeemedto of theAct”. to beproceededagainstandpunishedunderSection47 the offence with whichtheywerechargedandareliable business oftheunitandcouldbedeemedtoguilty been inchargeofandresponsibletothecompany,for unit M/sModiDistillerycouldbeprosecutedashaving of thecompanyowningModiIndustriesLtd.Respondent not sufficient to make the person liable under Section 141 be inthenegative.Merelybeingadirectorofcompanyis The answertothequestionposedinsub-para(b)has said to be satisfied. in acomplaint, the requirements of Section 141 cannot be made inacomplaint.Withoutthisavermentbeing is anessentialrequirementofSection141andhastobe the conductofbusinesscompany.Thisaverment the personaccusedwasinchargeof,andresponsiblefor Section 141thatatthetimeoffencewascommitted, HOW TO A VOID UNDUE H ARASSMENT OF there are no specific DIRECTORS 37

ARTICLE ARTICLE “(i) under:- Director andotherDirectorsunderSection141of the Act as Section 141ofN.I.ActtheSupremeCourtheldasunder: under SMS PharmaCase quoted process ofLaw.Inabove summarised the law for filing of Complaints against Managing Ahuja v.V.K. Vora (2009)10SCC48theSupremeCourt under CompaniesAct with Registrarof Companies. In K.K. simply because a default is made in not filing Annual Return e.g. Directorsareprosecuted to beproved is required intention It is pertinentto note that in suchoffences no `mensrea’orguilty of abuse is mere him against filed case the that claiming cases underSection482Cr.P.C. of thecriminal seek quashing practice thataccusedperson(s),whoclaimto be innocent It all datesofhearings,whicharequiteprolonged.iscommon on The personsaccusedofoffencehavetoappearpersonally HOW 38 TO relevant time. This is because the prefix “Managing” to the Director atthe Director orJoint Managing the Managing It is sufficient if an averment is made that the accused was company, fortheconductof businessofthecompany. to the that heisincharge of,andisresponsible complaint in the averment an to make it isnotnecessary Director, If the accusedisDirectorora Managing Joint “If any Director wants the process to be quashed by filing a in accordancewithlaw”. Magistrate isdirectedtoproceedwiththecomplaintcases passed bytheHighCourt is set aside. The learned word “Director” makesitclearthattheywere inchargeof in thetrial”. could be argued that his furtherrolecouldbebroughtout basic averment would be sufficient to send him to trial and in the complaint abouthisrole, because ordinarilythe are given that apartfromthebasicavermentnoparticulars on theground merely quashed get thecomplaint cannot of Court.He of process be anabuse stand thetrialwould contention. He must make outacasethat making him material or acceptable circumstancesto substantiate his the processeitherfurnishsomesterlingincontrovertible to quash Court the High order topersuade must in he of thecheque, with theissuance is reallynotconcerned only abaldavermentismadeinthecomplaintandthathe petition underSection482of the Code onthegroundthat passed bytheBoard. to theCompany, asperResolution declared inchargeandresponsible compliance ofwhichhehasbeen specific Law(s)allocatedtohimfor against thenamesofeachDirector Company Secretaryshouldindicate to theRegistrarofCompanies, the Directors submittedbycompany also theStatutoryReturnof maintained bycompanyand In theRegisterofDirectors A VOID UNDUE H ARASSMENT OF DIRECTORS of Companies in differentareasof operations. The Board may like Taxation,Corporateor Labour Lawto regulate functions own field of activities. The legislature has made different Laws & Accounts,Marketing,etc.The Directorsareexpertsintheir Finance Operations, withdifferent areaslike dealing Directors concerned Directorinwriting. TheBoardhasgot different Director(s) individual afterrecording consentof individual of differentlawsby for compliance and responsibility the in Boardmeetingallocatingduty appropriate Resolution of allDirectorsbypassing of prosecution liability the criminal or mitigate to escape out fortheDirectors a way suggest should Secretary (asaprofessional) above,Company quoted case-law of Lawsandalsotakingcue from the provisions Ananlyzing force, whoarerenderedunemployed. collapse withcolossallossto stake holders andalsowork- UltimatelysuchCompanies revive thesmall/sickCompany. most to cannot attendtotheirjobs,wheretheyareneeded some of them andconsequentlythey would gounder-ground effect. and demoralizingWhenprosecutionof directors start, N.I. for oneoffenceunder all theDirectorsofacompany to punish to Section 138 of the N.I. Act. How far is it justified or equitable Proviso (b) issue ofNoticeunder despite cheque dishonoured in Bank’ and thecompanyisnotableto pay theamountof whose cheques get dishonoured in India sick companies and that therearesmall known is well of prosecutionstatutorylaws.It Directors duetoviolation Certainly itisdesirablethatthereshouldnotbeundueterror and excellentperquisite,sothattheycoulddotheirbest. remunerations with high are provided class and a privileged are engineof performance of the company.The Directors form The Directorsofeverycompanyarepolicymakersandthey i) Other officers of a company cannot be made liable under (iv) ii In the case of a Director, secretary or manager [as defined (iii) i) In the case of a Director or an officer of the company who (ii) Act. Obviously, prosecutionofallDirectorshasterrorizing or negligence.” dishonour of the cheque, disclosingconsent,connivance in thecompanyandtheirroleregardtoissue inthecomplaint theirpositionandduties 141, byaverring only undersub-section(2)ofSection can bemadeliable sub-section (1) of Section 141. Other officers of a company the matterunderthatsub-section. to bring in thecomplaint, or negligence, connivance and 141(2) bymakingnecessaryavermentsrelatingtoconsent Section under be desirable.Theycanalsomadeliable will some particulars though in thecomplaint, be necessary Section 141(1)oftheAct.Nofurtheravermentwould under the case is necessarytobring of thecompany business of the fortheconduct tothecompany, was responsible an avermentinthecomplaintthat he wasinchargeof, and to in clauses(e)and(f) of Section 5of the Act, Companies referred Act] oraperson of theCompanies in Section2(24) need to make a specific averment that he was in charge of there isno of thecompany, on behalf the cheque signed sub-section (2)ofSection141. under give risetoresponsibility of thecompany,would that chequewas the dishonoured signedbyhimonbehalf The veryfact or negligence. about consent,connivance business of the company or make any specific allegation to and wasresponsiblethecompany,for the conductof the business ofthecompany. tothecompany,forconductof and areresponsible JANUARY 2017 due to `insufficiency of funds I CHARTERED SECRETARY

CHARTERED SECRETARY I JANUARY 2017 39 38 JANUARY 2017 I CHARTERED SECRETARY to theRegistrar ofCompanies,theCompany Secretaryshould also theStatutoryReturnof Directors submittedbycompany Thus intheRegisterofDirectors maintainedbycompanyand Section 170(2)ofCompanies,whichreadsasunder:- file `Return of Directors’ with the Registrar of Companies under every Companyhastokeep`RegisterofDirectors’andalso Resolution intheBoardMeetingtothateffect.Further as written consentofthenominatedDirectorhadpassedproper prove thattheBoardhadafterduedeliberationsandwith the What isrequiredtocreateunrebuttabledocuments to other Directorswouldbespared. alone willberesponsibleandprosecutedbytheAuthorities and compliance butincaseofprosecutionfornon-compliance he full due supportformaking the Boardwillgivehim Directors in obligations incaseofviolationanyonelaw.Allother responsible anddiligent,knowinghisstatutoryduties This willmakesuch`nominated’Director(s)morecautious, their functionsandtheapplicablelaw(s). Director(s) andtheybeheldresponsiblemadeinchargeof compliance withotherlawsshouldbeentrustedtonominated for responsible be made for responsibility Companies Act.Similarly compliance with should Officer, Principal as treated Act etc.TheCompanieshaving`CompanySecretary’,whois like FactoriesAct,ESI,ProvidentFund,I.D.ActandGratuity responsible forcomplianceofvariousLabour&IndustrialLaws time DirectorinchargeofPersonnel&Admn.maybemade liable forpropercompliancewithrelevantlaws.Similarlythefull and inchargeofFinance&Accounts(calledDirectorFinance), may liketomakethefulltimefunctionalDirectorresponsible Negotiable InstrumentsActandTaxationLaws,theBoard Books underCompaniesAct,bouncingofcheques As regardsthedefaultsinmaintenanceandauditofAccount effective compliance with specific law(s). is declaredasinchargeandresponsibletotheCompanyfor specifically make nomination of the individual Director(s) who change takingplace”. personnel, asthecasemaybe andwithinthirtydaysofany from theappointmentofevery directorandkeymanagerial personnel shall be filed with the Registrar within thirty days may beprescribed,ofthedirectorsandkeymanagerial “2. Areturncontainingsuchparticularsanddocumentsas CHARTERED SECRETARY I JANUARY 2017 as to facilitate them to work peacefully, effectively and efficiently The purposeistoavoidundue harassmenttoallDirectors,so under Section441oftheCompanies Act2013andotherlaws. Directors is to seek ‘compounding of offences’ as permissible Another importantmeasuretoavoidharassmentall the Section 170(2) ibid is filed with the Registrar of Companies. retires thatheshouldensuretheReturnofDirectorsunder advisible foraDirector/CompanySecretary,whoresigns or proceedings againstsuchaDirector/Co.Secretary.It is has powerunderSection482Cr.P.C.toquashthecriminal of offence,thentheHighCourthastobeapproached,which of CompaniesAct.However,ifMagistratestilltakescognizance Law(s) specific Director each of names the against indicate stake holdersand publicinterest. result ingoodcorporategovernance andwillalsobeinterestof on accountofthreatenedprosecution. Thesemeasureswill Certified copy of Return of Directors filed under Section 170(2) Board Resolution of relevant copy Certified files concerned the Director,CompanySecretary cognizance, if will nottake wrongly arrayedasanaccusedpersonforoffence,theCourt any otherDirectororCompanySecretaryofthecompanyis authority willprosecuteotherDirectors.However,ifperchance maintained underSection170(1)oftheAct,noGovernmental On thebasisofBoardResolutionandDirectors’Registers laws. of Section2(60)CompaniesActandalsootherapplicable any. SuchaResolutionofBoardispermissibleunderprovision Directors willbesavedoftheharassmentandpunishment,if as perBoardResolutionwillhavetofacethetrialandallother who isdeclaredasInchargeandresponsibletotheCompany, In caseofanyviolationthatparticularlaw,onlyDirector, responsibility ofthatDirectoralonetocomplywithparticularlaw. of Companies,whichdocumentwillconclusivelyprovethe Return ofDirectorscanbeobtainedbyanyonefromRegistrar accompanied with certified, copy of Directors’ Register and also a of such copy Certified Act. the of 170(1) Section under of Directorsmaintained Register be recordedin must also `Remarks’ inthestatutoryReturnofDirectors.Similarlyit passed bytheBoard.Thisfactmustbeindicatedadding incharge andresponsibletotheCompany,asperResolution allocated tohimforcomplianceofwhichhehasbeendeclared HOW TO A VOID UNDUE H ARASSMENT OF

DIRECTORS 39

ARTICLE ARTICLE [email protected] Jodhpur Hem RajTuteja,FCS Property, Consequensesof Wrongful withholddingofCompany’s 40 undergo imprisonmentforatermwhichmayextendtotwoyears. misapplied, thebenefitsthathavebeenderivedfromsuchpropertyorcashindefault,to or refund,anypropertycashwrongfullyobtainedwithheldknowingly or creditorcontributorythereof.Thecourtmayalsodirectsuchofficer/employeetodeliver employee shallbepunishablewithfineonacomplaintmadebythecompanyorofanymember section, thus,appliesonlytoofficersoremployeesofthecompany.Theaccusedofficer/ cash ofthecompanybyanofferoremployee(whetherpastpresent).The The sectionprovidespenaltyforwrongpossessionorwithholdingofthepropertyincluding enables thecompaniestofilecriminalcomplaintagainstdelinquentofficers/employees. the companyfromexhaustiveworkandtroublesoflengthytoilsomelitigation.Section452 (corresponding tosection630ofCompaniesAct,1956),hereinaftercalledthewhichsaves from thishassle,theParliamenthasintroducedsection452ofCompaniesAct,2013 and toilsomelitigationforthepurposeofrecoveryproperty.Inordertosavecompany (Bom.)]. Undersuchcircumstances,thecompanieshavetoresortalengthy,timeconsuming employment .[AbdulQuayumAnsariv.StateofMaharashtra(1991)70Comp.Cas368 service, failtovacateanddeliverbackpossessionthecompaniesafterceasingbein who havebeenprovidedaccommodationbythecompanyasaperquisiteorconditionof employees many officersand their officersandemployees.Itisalsocommonknowledgethat take onrentresidentialflatsinthemulti-storiedbuildingslargecitiesandtownsforuseof attract betterandtalentedpersonstojointhem.Inthisconnectionthecompaniespurchaseor provide residentialaccommodationtotheirofficersandemployeesasaconditionofservice It iscommonknowledgethatbothinthepublicsectoraswellprivatesector,companies INTRODUCTION (2) extend tofivelakhrupees. thereof, bepunishablewithfine whichshallbenotlessthanonelakhrupeesbutmay He shallbe,onthecomplaintofcompanyoranymember orcreditorcontributory “(1) CLV ]dated12.9.2013readsthus: Section 452enforcedw.e.f.12.9.2013videNotificationNo.S.O. 2754(E)/[FileNo.1/15/2013- STATUTORY PROVISION-SECTION452 subjected toanyjudicialscrutinyorinterpretation. so sincethenewprovisionshaveapparentlynotfarbeen cases. These holdgoodundertheCompanies Act, 2013more regard havebeenconsideredbythejudiciaryinanumberof against theoffender. The provisionsofthe1956 Act inthis by thecompanylegislationandinvitescriminalproceedings Wrongful withholdingofcompanypropertyisviewedseriously may extendtotwoyears. derived fromsuchpropertyorcash orindefault,toundergoimprisonmentforatermwhich obtained orwrongfully withheld or knowinglymisapplied, the benefitsthathavebeen deliver uporrefund,withinatime tobefixedbyit,anysuchpropertyorcashwrongfully The courttryingoffenceunder sub-section(1)mayordersuchofficeroremployeeto (b) (a) If anyofficeroremployeeofacompany- articles andauthorizedbythisAct, knowingly appliesitforthepurposesotherthanthoseexpressed ordirectedinthe possession, wrongfullywithholdsitor including cashinhis property having anysuch wrongfully obtainspossessionofanyproperty,includingcash thecompany;or JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 41 40 JANUARY 2017 I CHARTERED SECRETARY and savethecompanyfromdelinquency ofitsofficers/employees. constitutionally validsincethey preserve thepropertyofacompany provisions ofsection630 theCompaniesAct, 1956 are Company Ltd.8(2003)44SCL 130(SCL(SC))heldthat be negated.TheSupremeCourt inLalitaJalanvBombayGas deprives therighttolifeunderArticle 21oftheConstitutioncanalso validity thereofontheground that itisdiscriminatoryor Legislative competence.Eventhechallengetoconstitutional SCL 438(Guj.)theCourtheldthatlawinquestioniswithin the Mills Co.Ltd.vStateofGujrat(1999)92Comp.Cas.900/(1998) 18 Allied Industries(2001)33SCL176(Guj.)].InPetalalBulakidas infirmity. [PraveedbhaiGaneshbhaiChaudharyv.NaturalGas & the Constitution as theydonotsufferfromviceofany constitutional The provisionscontainedinsection630donotviolateArticle14 of CONSTITUTIONAL VALADITYOFTHEPROVISONS 8(2003) 44SCL130(SC)]. provisions oftheAct.[LalitaJalanv.BombayGasCompanyLtd. articles ofassociationthecompanyorauthorizedby for thepurposesotherthanthoseexpressedordirectedin 630 isthatthepropertyofcompanypreservedandnotused Further, theSupremeCourtheldthatobjectofenactingsection company’s property,butforcontemptoftheCourt. imprisonment ondefianceofthecourt’sorder,notforwithholding discharged afterpayingfineotherwisehewouldbesubjectof obedience andreturnsthepropertyofcompany,hewouldbe incumbent complieswiththeorderofCourtrespectful officers/employees ofthecompany.Therefore,ifdelinquent and protectthepropertyofcompanyfromunscrupulous Act, 1956isnotapenalprovisionsinceitspurposetopreserve Gujrat (1998)18SCL438heldthatsection630oftheCompanies Gujarat HighCourtinPetalalBulakidasMillsCo.Ltd.v.Stateof v. StateofMaharashtra(1991)70Comp.Cas.368(Bom.)].The defeat theveryobjectofsaidprovision.[AbdulQuayumAnsari Cas. 368(Bom).Tostayacomplaintunderthissectionwouldbeto Abdul QuayumAnsariv.StateofMaharashtra(1991)70Comp. ensure efficaciousandspeedyretrievalofcompany’spropertyVide Theprimaryobjectofsection630theCompaniesAct,1956isto withheld byitsofficersandemployees. resort toalegalremedyforrecoveryoftheirpropertywrongly the sectionareconstitutionallyvalidandenablecompaniesto (1984)56 Comp.Cas.329(Bom)].Itwasheldthattheprovisionsof property ofthecompany.[GovindT.Jagtianiv.SirrajudinS.kazi Act, 1956appearstobecontroltheadministrationandprotect Companies of the company.Theintentofsection630 of property The objectoftheActistocontrolmanagementandprotect OBJECT OFSECTION452 imprisonment foratermwhichmayextendtotwoyears. been derivedfromsuchpropertyorcashindefault,toundergo wrongfully withheldorknowinglymisapplied,thebenefitsthathave or obtained orcashwrongfully or refund,anysuchproperty thereof. Thecourtmayalsodirectsuchofficeroremployeetodeliver made bythecompanyorofanymembercreditorcontributory The officeroremployeeshallbepunishablewithfineonacomplaint Mills (2002)37SCL817(Mad.)]. liable tobepunished.[VideS.Rangaswamyv.CoimbatorePioneeer the companyinhispossessionwrongfullywithholdsit,thenheis punished. Underthesecondlimb,ifapersonhavingpropertyof the happeningofeventmentionedthereinisliabletobe wrongfully obtainspossessionofpropertyacompany,thenheon There aretwolimbsofSection452.Underthefirstlimbifaperson CHARTERED SECRETARY I JANUARY 2017 The SupremeCourtinLalitaJalan v.BombayGasCo.Ltd.(2003) and employeestheirlegalheirs. respect ofwrongfullyholdingthe propertybypresent,pastofficers Cas. 1heldthattheprovisions oftheActareselfcontainedin Kashinath Gidwaniv.Achyut Kashinath Wagh(1982)52Comp. independent right.TheBombay HighCourtinHarkishanLakhimal members oftheemployeesorofficersandnotonaccounttheir acquire therightofpossessionpropertybyvirtuebeingfamily officers inthepossessionofcompany’sproperty.Thelegalheirs employees/officers orthelegalheirsofdeceasedemployees or its ambitnotonlytheemployees/officers,butalso past Ltd. (2009)148Comp.Cas.130(SC)heldthattheActcoverswithin The SupremeCourtinGopikaChandraBhushanSaranv.XLOIndia Gears Ltd.v.Smt.AshaDevi(1998)3Comp.Cas.LJ.88(MP)]. Ltd. v.BhartiMathaMishra(2001)29SCL303(SC)andGajra deceased officeroremployeeduringhisemployment.[J.K.(Bombay) employee canbeprosecutedforanoffencecommittedby the is alivenotpermittedbutlegalheirsofadeceasedofficer or against familymembersofanofficeroremployeeacompany who employees canbeprosecuted.However,proceedingundertheAct heirs, familymembersorpersonsclaimingthrougherstwhile expression ‘employee or any one claiming through him. Even legal Ltd. (1987)4SSC361].Expansivemeaningshouldbegiventothe employees.[ BaldevKishanSahiv.ShippingCorporationofIndia the existingofficersoremployees,butalsotopast The words“anyofficeroremployeeofacompany”applynotonlyto PERSONS LIABLEUNDERTHEACT legislation whichwouldsuppressthemischief. provision inthefurtheranceofobjectandpurpose duty oftheCourttoplaceabroadandliberalconstruction the objectofprovidingsummaryprocedureandtherefore,itis (SC) thattheLegislationhaspurposelyenactedprovisionwith Kishan Sahiv.ShippingCorporationofIndiaLtd.(1987)4SCC361 of summarynature.ItwasheldbytheSupremeCourtinBaldev remedy forretrievalofcompany’sproperty,theprocessinvolvedis Since the object of section452 is toensureefficacious and speedy SECTION 452PROVIDESSUMMARYPROCEDURE WRONGFUL WITHHOLDDINGOF is liabletobepunished. wrongfully withholdsit, thenhe of thecompanyinhispossession if apersonhavingtheproperty punished. Underthesecondlimb, mentioned thereinisliabletobe happening oftheevent a company, thenheonthe possession ofproperty a personwrongfullyobtains 452. Underthefirstlimbif There aretwolimbsofSection COMPANY’S P ROPERTY , CONSEqUENSES OF 41

ARTICLE ARTICLE WRONGFUL WITHHOLDDINGOF 42 property aswellcash. covers movable,immovable of 2013 Now thesection452ofAct duty duringemploymentsquarelyfallwithinscopeofsection630. seeking torecovercarorlaptopsuppliedhimforperformanceof but acomplaintfiledbythecompanyagainstGeneralManager companies filecomplaintsfortherecoveryofimmovableproperty, immovable property. The Court further heldthat usuallythe section 630oftheCompaniesAct,1956coveredbothmovableand 744, theRajasthanHighCourtheldthatwordpropertyusedin property. InBeguRamv.JaipurUgyogLtd.(1987)61Comp.Cas. Companies Act,1956coveredbothmovableaswellimmovable purview. However,Courtshadclarifiedthatsection630ofthe showing whethermovableorimmovablepropertycamewithinits The Actof1956didnotcontainanywords,expressorimplied PROPERTY COVERED otherwise theywouldbeliabletoprosecutedundertheAct. all areliabletovacatethepropertyondemandbycompany, express, thepropertyisinpossessionofsomeotherpersons,they to livingelsewhere,andwithhisconsentwhetherimpliedor his employmentinthecompany,buteitherduetodeathor obtained thepossessionofpropertycompanybyvirtue 44 SCL130(SC)hasheldthatwhereanemployeewhohad company propertyhasbeenwrongly withheldand,ifso,topassan to examineinsuchaproceeding isthequestionastowhether Negotiable InstrumentsAct,1881. AllthattheMagistrateisrequired could perhaps,becomparable with thatundersection138ofthe The jurisdictionconferredonthe Magistrateisaspecialoneand natural thatthecasebefiledat Jamshedpur. Jamshedpur, wheretheretention hastakenplaceanditisbut section iscompletewhenretentionofpropertytakesplace.It is at Cas. 324,theBombayHighCourtheldthatanoffenceunder the InDr.HarakGhosev.TataIronandSteelCo.Ltd.(1991)70Comp. i.e thepropertywaswrongfullywithheldatCochin. as thevenueoftrialwouldbeCochin,wherecauseactionarose at Calcutta,butthepossessionofpropertywastakenCochin and from HeadOfficeofthecompany the officerwereissued to property Calcutta HighCourtheldthatthoughordersregardingallotment of v. GuestKeenWilliamsLtd.(1995)83Comp.Cas.399(Cal.)]. The having jurisdictionoverCochinwouldtrytheoffence.[VijayKapur and thepropertywrongfullywithheldissituatedatCochin,Court Where theregisteredofficeofcompanyissituatedatCalcutta VENUE OFTRIAL during hisemployment. deceased officeroremployee an offencecommittedbythe employee canbeprosecutedfor heirs ofadeceasedofficeror alive isnotpermittedbutlegal employee ofacompanywhois family membersofanofficeror Proceeding underthe Act against VIS-A-VIS COMPANY’S P ROPERTY JURISDICTIONOFCOURT , CONSEqUENSES OF (India) Ltd.(1995)84Comp.Cas.1(Bom.)]. trial courts.[AbhilashVinodKumarJain(Smt.)v.Cox&Kings allowed todriftandtheylingeronforanythingfrom510yearsin disposed ofbecauseexperiencehasshownthatwhentheyare be speciallynumbered,takenuponaprioritybasisandsummarily dispose ofthematterwithinminimumtime.Thesecasesshould to thatwhichisstrictlygermanetheshortissueinvolvedand a prioritybasis,restrictthescopeofevidenceandarguments period of retention. The Magistrateoughttotakeupthesecaseson order foritsrestorationandtocomputethefinepayable allotted propertybacktothecompany. blended withtheemployment,andcapacitytohandover and durationofoccupationareallfeatureswhichintegrally 630 arenotdiscriminatoryandthatcapacityrighttoprosecution (India) Ltd.(1995)4SCL167hasheldthatprovisionsofsection Supreme CourtinSmt.AbhilashVinodKumarJainv.Cox&Kings determination ofemployment,thecompanycanfilecomplaint.The or hislegalheirdoesnothandoverthepropertyafter employment. Incasetheofficeroremployeehisfamilymember employment andshouldhandoverthesameonceasingtobein only. Theofficers/employeesmakeuseofthepropertyduringtheir Companies allotresidentialpropertytotheirofficersoremployees POSSESSION OFPROPERTY EMPLOYMENT ANESSENTIALCONDITIONFOR committed therefore, thecomplaintlodgedunder thesectioncannot Companies Act,1956isacontinuous offenceandisrepeatedly view statingthatsincetheoffence undersection630ofthe 76 Comp.Cas.875theMadras HighCourtexpressedacontrary However,inT.N.V.NanjappaChettar v.DeviFilms(P)Ltd.(1993) & Mohta(India)ltd.v.AshokRai (1984) 55Comp.Cas.61(Delhi)]. commission ofoffence,complaint wouldbetime-barred.[B.R.Herman years, andifthecomplaintisnotfiledwithin3yearsfromdate of The limitationforfilingtheplaintundersection630ofAct is 3 PERIOD OFLIMITATION provident fund,gratuity,orpension. employee. Theretirementbenefitsincludestatutorysuch as company cannotwithholdtheretirementbenefitsofaccused the companyhewillbepunished.Pendingsuchproceedings, In casetheemployeeisfoundguiltyofwithholdingproperty of to recoveryproceedingsfortakingbackthepossessionofproperty. company withholdingitsproperty,itisopentotheresort 1992 2LLJ122(Bom.)thatincaseoferstwhileemployee of a The BombayHighCourtheldinS.N.Ghosev.SiemensIndia Ltd. PERSONS NOTPERMISSIBLE WITHHOLDING OFRETIREMENTBENEFITSACCUSED Anthony v.RenusagarPowerCompany(P)Ltd.(1996)2LLJ329. The abovejudgmentwasreliedonbyAllahabadHighCourtinR. proceedings undersection630oftheCompaniesAct,1956. imagination beconstruedasabaragainsttheinstitutionofcriminal challenging theorderofdismissalservicebynostretch Ltd. LJ62(Mad.)].TheCourtalsoheldthattheproceedings the decisioninbothproceedings.[P.V.Georgev.JayemsEngg.Co. different issues,andconsiderationswouldprevailregarding service werequitedistinctproceedingsinvolving dismissal from the Actandthoseinstitutedbyemployeechallenginghis Proceedings initiatedbythecompanyforrecoveryofpropertyunder CRIMINAL PROCEEDING CHALLENGE TOTERMINATION:NOBARAGAINST JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 43 42 JANUARY 2017 I CHARTERED SECRETARY assertions in petition together with materialproducedbycomplainant together in petition assertions accused, whohascommittedan offenceundersection630,where quashing ofcriminalproceedings ornottoframechargesagainst Pendency ofcivilproceedings inCourtwillnotbegroundfor no baragainstlaunchingofcomplaint undersection630. that thecomplaintwasmaintainable ,aspendencyofcivilsuitwas 630 was nottenable. This contention was rejected andit was held sub-judice beforethecivilcourt,complaintfiledundersection property, andtheemployeecontendedthatsincematter was Companies Act, 1956againsttheunlawful withholding of its (Mad.) thecompanyfiledcriminalcomplaintundersection630of the In S.Planiswamiv.JanardhanaMillsLtd.(1993)76Comp.Cas. 323 AGAINST CIVILSUIT TENABILITY OFCRIMINALPROCEEDINGS a lesseeandhiswifeaslesserstillsubsisted. complainant company,astherelationshipbetweencompany as employee wasdirectedtohandoverthepossessionofflat the premises asatenant,regardlessofthechallengeownership.The company hadarighttobeinthecontinuouspossessionof therefore, thepossessionwasrightfullywithcompany, and asatenant theproperty holding waslawfully company wife ofaccusedpurchasedtheflatfromlandladyatapointwhen held thattherealtestwouldbeofexaminingsituationwhereby the accused,butcompanycontinuedtobetenant.TheCourt the saidproperty,whichsubsequentlywaspurchasedbywifeof possession ofcompany’spropertyandthecompanywastenant holding thesameasatenant.Inthiscase,accusedwasin question donotbelongtothecompany,butcompanywas premises in aspect ofpossession.Admittedly,the emphasized isthe (1994) 81Comp.Cas.104(Bom.),itwasheldthatwhatneedstobe aspect. InKanankandiGopalKishanNairv.PrakashChandJuneja not theownership,butpossessionofproperty,whichisimportant Courts neverapprovedtheircontention.Accordingtotheitis allotted tothemdonotbelongthecomplainantcompany.But The offendersusuallytrytoescapeandcontendthatthepremises THE PROPERTYINQUESTION COMPANY MAYBEOWNERORATENANTOF restored backtothecompany. the Actisacontinuousoffenceanditcontinuestillproperty (Bom.), theBombayHighCourt pronounced that the offence under Comp. Cas.324 70 Steel Co.Ltd.(1991) and Ghosh v.TataIron continuously violates theprovisionsoflaw. Similarly, in Dr. Hirak is notaone-timeoffence,butcontinuousoffenceastheoffender (1990) 68Comp.Cas.482(Cal.)heldthattheoffenceunderAct continuity. TheCalcuttaHighCourtinArunKumarDassv.State to the company and the company is deprived ofitspossessionin continuous offencebywhichthepropertyisnotreturnedorrestored withholding ofcompany’spropertyisnotanisolatedact,buta Co. Ltd.(supra),theSupremeCourthasunequivocallyheldthat (1991) 71Comp.Vas.403(SC)andLalitaJalanv.BombayGas In GokalPatelVolkariLtd.v.DemdayyaGurushidaihHiremath CONTINUOUS OFFENCE VIOLATION OFSECTION452ISA v. JaipurUdyogLtd.(Supra).andPetalalBulakidasMills.Co.(Supra)]. against himundersection630isnotbarredbylimitation[BeguRam of atrespasserandtrespassingiscontinuousoffence,complaint company freeofrentaftertheretirement,heoccupiesitincapacity Where anemployee,doesnotvacatethehousegiventohimbya be challengedonthegroundoflimitation. CHARTERED SECRETARY I JANUARY 2017 (2000) 27SCL281(Cal)]. SCL 171(SC).ItwasheldinManasKumarGoshv.T.T.Mahmood constitute offence.[MarratRubberLtd.v.J.K.Maratukalm(2001)32 LABOUR COURTv. CRIMINALCOURT of Maharastra(1997)13SCL38(SC)]. conviction andpunishmentundersection630.[V.M.Shahv.State appellant hadbeeninwrongfulpossessionofpropertyentailinghis civil court’sfinding,andtherefore,itcouldnotbesaidthatthe decree waspending,criminalcourt’sfindingstoodsupersededby notwithstanding thefactthatappealagainstcivilcourt’s landlord, andtherefore,refusedeviction.Itwasheldthat company, andhadindependenttenancyrightsfromtheprincipal held thattheappellanthadnotcomeintopossessionthrough the HighCourtupheldorderandsubsequently,civilcourt the offencewasprovedanddirectedforrestitutionofproperty company filedcivilsuitforevictionandthecriminalcourtfoundthat Where duringpendencyofcriminalprosecutionagainstanemployee, FINDIND OFCRIMINALCOURT POSSESSION OFPROPERTYWOULDSUPERSEDE OF O F LEGALITY OF CIVILCOURTINRESPECT FINDING (India) ltd.(1995)84Comp.Cas 1(Bom.)]. interlocutory stage.[AbhilashVinodkumar Jain(Smt.)v.Cox&Kings defeated, frustratedorputinto cold storagethroughlitigationatan put onthestatutebook purposely and these cannot be either provisions providingforretrieving company’spropertyhavebeen not tobeusedashandlesforprotractingthelitigation.. The pleas arerequiredtobespeedilyandeffectivelydisposedof are orders. Theapplicationsfordischargeonfrivolousanduntenable examine therevisionapplicationsandappealsbeforegranting stay court, inthefirstinstance,shouldjudiciouslyscrutinizeandvigorously 452 whichfactistakencognizanceofsuchsituations.Theappeal proceedings isnobartothedecisionofanapplicationundersection settled nowwithregardtothepositionthatpendencyof civil of proceedings,etc.arepermittedbythetrialcourts.Thelawis well extraneous avenues.Nofrivolousapplicationsforadjournment stay ambits andnotallowedtodilateorprotracttheproceedingsthrough unwarranted delay.Partiesareconfinedwithinwelldefinednarrow complaints aretakenupanddisposedofonprioritybasistoavoid controlled tothemaximumextentsubjectconditionthat the by thesubordinatecourts,toensurethatdelayfactoris property itisessentialthatacontinuouseffortbemade,particularly company’s propertyiswrongfullywithheld.Towardsrestoringthis intended toprovidespeedyandefficaciousredressalwherea Cas. 104(Bom.)hasheldthattheprovisionsofsection452are Kanakandi GopalKrishanNairv.PrakashJuneja(1994)81Comp. have playedapredominantrole.TheBombayHighCourtin litigation. Inordertoimplementtheprovisionseffectively,courts employees whotrytodragthecompaniesunnecessaryandcostly their propertiesfromtheclutchesofdelinquentofficersand this sectioninthestatutebooktoenablecompaniesgetback Section 452isaselfcontainedsection.TheParliamenthasplaced CONCLUSION (P) Ltd.(2001)33SCL176(Guj)]. Bhai GaneshChaudharyv.NeutralGasandAlliedIndustries deprive CriminalCourtofitspowersundersection630.[Praveen However, merependencyofreferencebeforeLabourCourtcannot Dispute Act,1947andpowersofCriminalCourtundersection630. There isnoconflictbetweenpowersofLabourCourtunderIndustrial WRONGFUL WITHHOLDDINGOF COMPANY’S P ROPERTY , CONSEqUENSES OF 43 CS

ARTICLE ARTICLE [email protected] Kolkata Williamson FinancialServicesLtd. Sr. Manager&CompanySecretary Prabir Bandyopadhyay,FCS and Clarity Drafting ResolutionwithClass 44 make uphis/hermindvotefor/against theResolution,moreanalyticallywithease. systematic representationofthe casewillhelptheshareholderconcernedtounderstandand parts compliance Statement concernedandthat is whattheExplanatoryStatementallabout.Thiswayof legal and justification requirement, its for look and resolutions ofdifferentsizesandcontentsthesamematter. draft first, know exactly what the proposal by a simple reading with the fast and utmost attention The reviseddraftaboveputsforth candidlytheproposal.Theintendedreadermayread commencing from……..” of Directorsbyrotationshallnotapplytohim”. that theprovisionsofsub-Section(6)and(7)Section152Actinrespectretirement REDRAFTING OFTHEMODELRESOLUTION office as Additional Director will expire Companies Act, 2013 (‘the Act’) and whose period of as perArticle…oftheArticlesAssociationCompanyreadwithSection161 and RecommendationCommittee,wasappointedasanAdditionalDirectoroftheCompany “RESOLVED thatMr……….(DIN….)who,pursuanttotherecommendationofNomination Directors: Director ofacompanywhowaspreviouslyappointedasAdditionalbyitsBoard at theirAnnualGeneralMeetinginrespectofappointmentapersonasanIndependent Let usconsiderasampleofresolutiontobeconsideredbytheMemberscompany A MODELRESOLUTION The simplest and only meaning of resolution is ‘determination’ or ‘decision’. One comes across Inthelegalworldresolutionisatoolthroughwhichanactioninitiatedinclearcutterms. If youcan’texplainitsimply,don’tunderstandwellenough’–AlbertEinstein. in terms of Section 149 of the Companies Act, 2013 for a period of five consecutive years Director oftheCompanyasperArticle..ArticlesAssociation oftheCompanyand “RESOLVED thatMr…….beandisherebyappointedaDirector aswellanIndependent The aboveResolutioncanberedraftedasunder: establish itslegaltenability. the legalpointofviewandatsametimeintimatingprocedural partofcomplianceto bunches togethertheapplicableprovisionsoflawforsake of justifyingtheproposalfrom and referencesasgivenintheabovedraftbutmayconsistof agoodnumberofthem).It analytic purposeofthisArticle.(Inpractice,suchresolutionmay notcontainalltherecitations The aboveresolutionisanextremeexampleofaverycomprehensive resolutiontomeetthe Section 149 of the Act for the period of five consecutive years commencing from ……… and hereby appointedaDirectoraswellanIndependentoftheCompanyinterms criteria ofindependenceas provided insub-Section(6)of Section 149oftheAct, be andis Act General MeetingandwhohasfurnisheddeclarationinaccordancewithSection152(4)ofthe candidature fortheappointmentasaDirectorofCompanyatforthcomingAnnual whom theCompanyhasreceivedanoticeintermsofSection160Actproposinghis on thedateofforthcomingAnnualGeneralMeetingCompanyandinrespect to act as a Director of the Company according to Section 152(4) of the Act and who fulfils the drafting perfectresolutionsandgivescertainmodelsalso. to protractedlitigation. This articlelistsoutcertainpracticaltipsfor behind theresolution. Manyatimesilldraftedresolutiongivesrise transition ofaBoarddecisiontoactualrealisationtheobjective company secretaries. A welldraftedresolutionenablesseamless Drafting ofresolutionsisaveryimportantandcrucialfunction that he is not disqualified to become a Director under the Act and also given his consent JANUARY 2017 I CHARTERED SECRETARY no h Explanatory the into CHARTERED SECRETARY I JANUARY 2017 45 44 JANUARY 2017 I CHARTERED SECRETARY 8) 6) 5) 4) 3) 2) 1) under: RESOLUTION ANDNOTITS SUBORDINATE EXPLANATORY STATEMENT ISINTEGRALPARTOF 7) the second one may be analysed as The first resolution in view of OF THEREDRAFT ANALYSIS OFTHEMODELRESOLUTIONINVIEW hn Scin 7 () f h Cmais c, 96 Wee any ‘Where 1956 Act, Companies the of (2) 173 Section : Then the shareholderswilldecideupon.i.e.toconsentornotto. Explanatory Statement-asthisautomaticandnotsomething This educativeinformationshouldsuitablybegiveninthe and not because of that theResolutionhassoprovided for. provision inSection149(13)oftheCompaniesAct,2013 not beliabletoretirebyrotationbecauseofsuchexpress Not toretirebyrotation:TheIndependentDirectorshall so, shouldformpartoftheExplanatoryStatement. ‘support’ ( i.e. the consent ) the Explanatory Statement. The Resolution forappointmentwhichshouldwellbeincludedin the supports appointment of theAct:Thispreconditionto Consent toactasDirectoraccordingSection152(4) aware ofit. disclosed intheExplanatoryStatementtomakeMembers eligibility fortheappointmentasaDirector.Thismaywellbe : This declaration qualification is another precondition towards Declaration inaccordancewithSection152(4)oftheAct Explanatory Statement is there to confirm this compliance. and innowayformspartoftheproposalitself.TheNotice of Members.Itisaparttheproceduretoputforthproposal Meeting any General person asaDirectorat a of appointment herself oranyexistingMemberofthecompany-towards condition toraisingtheproposalbyanyofcandidatehimself/ Act: of the 160 terms ofSection Notice in and makeuphis/hermindtovotefororagainsttheresolution. Additional Directorship: His term of office as an Additional itself buttheinformationdocumentconcerned. resultant resolutionhadbetternotformpartoftheResolution of theAct.Informationregardingpreclearance Committee: ThisisapartofcomplianceasperSection178(2) Recommendation oftheNominationand place intheExplanatoryStatement. proposal’ but ‘one of the points for considering the proposal’ and or against the appointment proposal. To repeat, this is not ‘the so thattheshareholderscanmakeuptheirmindtovotefor facts andcredentialsasdisclosedintheExplanatoryStatement Independent Director.Thistobeconsideredtogetherwithother for takingintoaccounttheparticularperson’scandidatureas should not form part of the ‘supported’(‘the resolution’) his qualification as given in the Explanatory Statement and think for thisinformation.Thetargetreaderwillreadalongwith of thecompany.TheExplanatoryStatementisrightplace know ofhisstatusandmeriti.e.previousexperienceasDirector the shareholders Actually, thisadditionalinformationisforhelping consideration of his appointmentas Director at that Meeting . Meeting doesnotnecessarilyorautomaticallyentitleshimfor Director willexpireonthedateofcomingAnnualGeneral be made to the point and supportive information should find its disclosed intheExplanatoryStatement.Theresolutionshould DIN oftheAppointee:The DIN oftheappointeemaywell be Section 149oftheAct: This vital information is the justification (6) of independence asprovidedinsub-Section Criteria of separate identityofeachthemismaintained. CHARTERED SECRETARY I JANUARY 2017 The Notice isapre Notice The so that

are intheExplanatoryStatement. the PrincipalClause–straightandsimple,subordinateclauses main purposeoftheResolutionmaybelost.Theitself is may ultimately misleadthe readers i.e. the decision makers andthe and castshadowonthemootpointofdecisiontobetaken. This concerns, reasonsandlogic;because,ifitdoesso,willoverstrain such meaning, scope, implications, statutory requirements, benefits, essentially construedisthattheResolutionnotsupposedtoinclude the proposedResolution.Whatisnotthereinwritingbuthasto be requirements, benefits, concerns, reasons and logic of considering disclose, interalia,themeaning,scope,implication,statutory in respectof the legalstatus of Explanatory Statement whichmust h aoe ie Cas () is (b) Clause cited above The (b) the nature of concern or interest, financial or otherwise, if any, in (a) annexed tothenoticecallingsuchmeeting,namely:— special businesstobetransactedatageneralmeeting,shall item of Of course, where there is statutory provision for a specific disclosure Specific Disclosure ‘A Now :Section102(1)oftheCompaniesAct,2013readsasunder such itemofbusiness,………’ meeting astatementsettingoutallmaterialfactsconcerningeach be specialasaforesaid,thereshallannexedtothenoticeof items of business to betransactedat the meetingaredeemed to Scin 8() f h Cmais c, 03 rvds ‘Every provides, 2013 Act, Companies the of 180(2) Section • For example: consideration ofmeaning,scope, implication,etc.willbeirrelevant. in theResolutionitself,same hastobecompliedwithandthe statement setting out the following material facts concerning each (iii) everyotherkeymanagerial personnel;and (ii) everydirectorandthemanager,ifany; (i) respect ofeachitemsof— business andtotakedecisionthereon’. understand themeaning,scopeandimplicationsofitems and factsthatmayenablemembersto information other any in theExplanatoryStatement. simple , thesubordinateclausesare the PrincipalClause–straightand may belost. The Resolutionitselfis the mainpurposeofResolution readers i.e. thedecisionmakers and taken. This mayultimately misleadthe moot pointofthedecisiontobe overstrain andcastshadowonthe logic; because, ifitdoesso, itwill benefits, concerns, reasonsand implications, statutoryrequirements, to includesuchmeaning, scope, The Resolutionisnotsupposed (ii); relatives ofthepersonsmentionedinsub-clauses(i)and RESOLUTION WITH C LASS DRAFTING h witn ofrain n h Act the in confirmation written the AND CLARITY 45

ARTICLE ARTICLE ttmn (arn ay ae f Seii Dslsr’ mentioned Disclosure’ ‘Specific above )ispresumedtobestatedintheResolution. of case any (barring Statement and parcelofaResolution.WhateverisstatedintheExplanatory xlntr Saeet s part is Statement that theExplanatory confirm decisions The February, 1964(CalcuttaHighCourt),etc. National Co.Ltd.andOthers196535Comp.Cas.706Cal.on13 v. Shalagram Jhajharia (Gujarat HighCourt), 1964 18 February, v. ShriSayajiJubileeCottonandothers(1964)OGLR807on the judgementsofseveralcourtcases,e.g.MohanlalGanpatram This mandatorystatusofExplanatoryStatementwerealsofoundin action taken’. expedient togiveeffectthisResolution.” authorized totakeallsuchstepsasmaybenecessary,proper or “RESOLVED FURTHERTHATtheBoardbeandishereby inadequacy of profits in any Financial Year. currency ofhistenureasManagingDirector,incaseabsence or the minimumremunerationpayabletoMr.……………during the the explanatorystatementconcerned,shallbedeemedto be ”RESOLVED FURTHERTHATtheremunerationasstated in Resolution. terms andconditionsasstatedintheexplanatorystatementto this for aperiodofthreeyearswitheffectfrom………………asperthe Director oftheCompany,asManagingCompany and remunerationpayabletoMr.…………………(DIN:………….), Company herebyapprovestheappointment(orre-appointment)of from anyauthorities,asmaybenecessary,timetotime,the enactments thereofandsubjecttosuchconsentsapprovals the of nullification to lead must requirements its to disobedience of theopinionthatitismandatoryandnotdirectoryany purpose andscopeoftheprovisionsenactedinsection173,Iam Regulation 73(4) of the Securities and Exchange Board of India • eody te iig icuig n sauoy oiiain o re- or modifications enactments thereof’ isabsolutelyun-necessary andcannotbe statutory any ‘including citing the Secondly, statutory provisions. provisions, comfortable withhis/herknowledge regardingtheapplicable legal applicable other all if any,’givesimpressionthatthe authoroftheResolutionisnot ‘and expression the First, ABOVE RESOLUTION THE SUPERFLUOUSNESSOFIMMEDIATELY legal provisions, if any, including any statutory modifications or re- with ScheduleVtotheCompaniesAct,2013andallotherapplicable “RESOLVED THATpursuanttoSections196,197,198,203read appointment) ofaManagingDirector: Given belowisasimpleresolutionforappointment(orre- ANOTHER MODELRESOLUTION 377 Bom. held on 7 November, 1969 : ‘Having regard to the whole Synthetics andChemicalsLtd.Others197141Comp.Cas. The BombayHighCourtinFirestoneTyreandRubberCo.v. OF EXPLANATORYSTATEMENT COURT DECISIONS TO CONFIRM INTEGRAL THE STATUS RESOLUTION WITH C LASS DRAFTING 46 monies maybeborrowedbytheBoardofDirectors.’ (c) ofsub-section(1)shallspecifythetotalamountuptowhich in relationtotheexerciseofpowersreferredclause special resolutionpassedbythecompanyingeneralmeeting shall becalculated’. allotted onconversionorexchangeofconvertiblesecurities date onthebasisofwhichpriceequitysharestobe 2009 states ‘The special resolution shall specify the relevant (Issue ofCapitalandDisclosureRequirements)Regulations, AND CLARITY Listing Agreement / LODR : The Securities and Exchange Board • ‘(2) Notwithstanding the repeal under sub-section (1) of the repealed (ii) enactments,— ‘Notwithstanding such repeal, - under : Then, sub-Section(5)ofthesaidSection49provides,interalia,as The law will take its own course and the law will prevail over • acted upon.Thisassertionmaybediscussedasfollows: a) 1999. Section 49 sub-Section (1) of the new Act provides ‘ The 1973 wasreplacedbytheForeignExchangeManagementAct, may benoted:(i)TheForeignExchangeRegulation Act, 1) Regulations, 2015providesinitsRegulation103- of India(ListingObligationsandDisclosureRequirements) Section (2) provides, inter alia, ‘ to astherepealedenactments)shallstandrepealed:’.Itssub- Companies (Sikkim)Act,1961(hereafterinthissectionreferred section (1)’TheCompaniesAct,1956andtheRegistrationof the CompaniesAct,1956provides,interalia,initssub- Section 465oftheCompaniesAct,2013whichreplaced / part regarding ‘Repeal and Saving’. The the Resolution.Astatute,whenre-enactedcontainsaSection (b) (a) repealed Act)shallstanddissolved’. of section52thesaidAct(hereinafterreferredtoas and theAppellateBoardconstitutedundersub-section(1) Foreign ExchangeRegulationAct,1973isherebyrepealed (2) taken underthecorrespondingprovisionsofthisAct;’ the provisionsofthisAct,bedeemedtohavebeendoneor hereby repealedshall,insofarasitisnotinconsistentwith under theAct direction given any or instrument executed authorization orexemptiongrantedanydocument confirmation or declaration made or any license, permission, order ornoticemadeissuedanyappointment, oe r ae icuig n rl, oiiain inspection, notification, rule, any including taken or done anything doneoranyactiontakenpurportedtohavebeen itn areet icuig hs seiid n Schedule in specified those including agreements listing all circularsstipulatingormodifyingtheprovisionsof On andfromthecommencementoftheseRegulations, this Act;’ taken, executed,issuedordoneunderinpursuanceof and shallhaveeffectasifmade,directed,passed,given, at thecommencementofthisAct,continuetobeinforce, or inpursuanceofanyrepealedenactmentshall,ifforce taken, instrumentexecutedorissued,thingdoneunder directed, resolutionpassed,directiongiven,proceeding mortgage, deed,documentoragreementmade,fee punishment, forfeiture or fine imposed under the repealed direction givenoranyproceedingtakenpenalty, declaration madeoranyoperationundertaken order ornoticemadeissuedanyappointment oiiain rglto, ponmn, conveyance, appointment, regulation, notification, subject totheprovisionsofclause(a),anyorder,rule, taken underthecorrespondingprovisionsofthisAct; provisions ofthisAct,bedeemedtohavebeendoneor enactments shall,insofarasitisnotinconsistentwiththe done or taken, including any rule, notification, inspection, anything doneoranyactiontakenpurportedtohavebeen specified in sub-regulation (1) or the Listing Agreements, show causenoticeissuedin respect ofthecirculars including anyenquiryorinvestigation commencedor action takenorpurportedtohave beendoneortaken Notwithstanding suchrescission, anythingdoneorany X, shallstandrescinded. JANUARY 2017 I CHARTERED SECRETARY following examples

CHARTERED SECRETARY I JANUARY 2017 47 46 JANUARY 2017 I CHARTERED SECRETARY • modifications or re-enactments thereof….’. The Resolution cannot 293(1)(d) oftheCompaniesAct,1956includinganystatutory 1956 and the Resolution was worded like ‘….pursuant to Section free reservesintermsofSection293(1)(d)theCompaniesAct, borrow exceedingthelimitofaggregateitspaidupcapitaland Take anotherexample:Aresolutionwaspassedbyacompanyto above. a RepealandSavingRegulation,i.e.Regulation103,asquoted successor oftheListingAgreementsandasbecauseLODRhas Disclosure Requirements)Regulations,2015(LODR)whichisthe Securities andExchangeBoardofIndia(ListingObligations under thenewstatuteisrequired,butitwillprevail i.e. theCompaniesAct,2013)andafreshResolutiontothiseffect cover future any to including contingencies thesaidResolutionwillfailundernewstatute( any, thereof’ re-enactments if or provisions, modifications legal statutory applicable other all ‘and the thenListingAgreements)andResolutionborewords, Listing Agreementswithorwithoutmentioningtherequirementof requirement ofhavingsuchDirectorsontheBoardasperthen resolution toappointanIndependentDirector(keepinginmindthe concept of ‘Independent Director’. So, if some company passed a Further, considerthiscase:TheCompaniesAct,1956hadno • the newCompaniesAct,2013comesintoforce. the same)tocontinueborrowexceedingaforesaidlimit-after required tobepassedforthesamematter(evenifcontentsare Companies Act,1956.AresolutionafreshasaSpecialResolutionis against theOrdinaryResolutionintermsofSection293(1)(d) passed togiveeffectthereto as for aSpecialResolutiontobe identical provisionofSection180theCompaniesAct,2013calls be acteduponunderthere-enactedCompaniesAct,2013as Authorisation to the Board : What does the concluding part of • inconsistent with the provisions of the statutory modification or appointment /re-appointmentortheprocedurethereof)is under there-enactedstatuteunlesspurportedaction(e.g. under theexistingstatuteisabsolutelyvalidandeffective ( e.g.toappoint/re-appointaDirector/ManagingDirector) and effectaccordingly.Therefore,aResolutiontodoanything appears inthereplacing/newre-enactedstatute,haspurpose ‘not inconsistent with‘, if Not inconsistentwith:The term, re-enactment. hrfr, h cas ‘n al other all ‘and clause the Therefore, The lawprevails: oiiain o r-ncmns hro ’ r icuig any ’ or ‘including superfluous and futile in so far as the future course of action thereof statutory modifications or re-enactments thereof’ is absolutely re-enactments or modifications applicable legalprovisions,if any, including any statutory the Resolution ( i.e., ‘the Board be and is hereby authorised to opne At 15 )aeoial sae ‘h Bad of Board ‘The states )categorically 1956 Act, Companies 179 oftheCompaniesAct,2013(Section291erstwhile to giveeffectthisResolution)practicallyserve?Section take allsuchstepsasmaybenecessary,properorexpedient in theResolution. purpose inthetruestsenseandhence,hadbetternotappear modification of the relevant statute. The said clause serves no is decidedbytheupcomingenactmentorre-enactment of acompanypassResolution, theBoardofDirectors is authorisedtoexerciseanddo’. Whenevertheshareholders powers, andtodoallsuchacts andthings,asthecompany Directors ofacompanyshallbe entitledtoexerciseallsuch CHARTERED SECRETARY corresponding provisionsoftheseregulations. shall bedeemedtohavebeendoneortakenunderthe in forcepriortothecommencementoftheseregulations, entered intobetweenstockexchange(s)andlistedentity, I JANUARY 2017 1. adhered towhiledraftingaResolution: For thesakeofclassandclarityfollowingprinciplesmaybe RULES GOVERNINGRESOLUTION while ‘explaining the reasons’ of the concerned Resolution in terms includes e-voting).Incaseofpostalballot,thePostalBallotNotice, convening GeneralMeeting-tobepassedbytheMembers(which This ArticletookintoaccounttheResolution-meantforNotice CONCLUSION 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. echo : ‘If you can’t explain it fine, let the saying of Albert Einstein giving explanationandrequirement, istheBoard’sprerogative.In discussed above.BoardResolution togetherwithitspreamble Rules, 2014,shouldplaythe role ofExplanatoryStatementas of Rule22theCompanies (Management andAdministration) simply ,youdon’t understanditwellenough’. be absolutely straightforward in its clear intention ‘to do’ or ‘not Straightforwardness: TheResolutioni.e.thedecision,should has been conceptualised with a definite purpose revealed in its Explanation : It must be accepted that ‘Explanatory Statement’ repetitive wordingmustbeavoided. is intendedbytheResolution.Misleadingorambiguous discrimination betweenwhatisintendedbythelawand closest extentpossibletoeliminateanyscopeofanalysis of theconcernedprovisionlawshouldbefollowedto Wording :WhiledraftingResolution,theexactandkeywording tends todivertthereader’sattentionfromcruxofissue. - (whetherprecedingorsucceeding)intheResolutionitself Narration :Narratingtheproceduralpartofintendedaction intricacy. set forthwhattodoinacrystalclearmannerdevoidofany Purpose :TheoneandonlypurposeoftheResolutionisto distinction . clarifies the basics and intention of the Resolution in brief with Reference :AccurateSectionalreferenceintheResolution Statement concerned. company. ThisshouldbeideallydiscoursedintheExplanatory Resolution accordinglyistheresponsibilityofproposing then toproceed.Toconsiderthelawandputforth against thequotedpartsoflawinrightperspectiveand readers. ItputsburdenonthereaderstojudgeResolution itself makesitonerousandunnecessarilytimeconsumingtothe Quotation :QuotingtheprovisionsoflawinResolution is essentialpartofthedecision. Unconditional :Itshould be unconditional,unlessthecondition Reasoning shouldformpartoftheExplanatoryStatement. should beavoided. the Resolution in Reasoning : analysis. it ispassed.Thereshouldremainnoscopeofanysubjective becomes aconcretedecisionwithclearcutobjectivetermsafter Objectivity :AResolutionisathreadbareproposalwhich for aResolution,ismoredesirablethanbeingliberal. decision tobetaken.Beingeconomical,whilechoosingwords a Resolution,ratheritmayshroudthecardinalpointof more explanationsdonotnecessarilyservethepurposeof Economical asopposedtoliberal:Morewordsand to do’. compliance (videthecasedecisionsmentionedabove). terminology. Itisnotmerelyornamentalforthesolepurposeof Resolution isimmaterial! accordingly. Furtherauthorisationinthisrespectgiventhe the companyisperselegallyauthorisedtoactuponthat RESOLUTION WITH C LASS DRAFTING AND CLARITY 47 CS

ARTICLE ARTICLE [email protected] Spice MobilityLtd.,Noida(U.P.) Company Secretary Vice President,CorporateAffairs& M RBothra,FCS Refund) Rules, 2016 (Accounting,IEPF AuthorityAudit, Transferand Transfer ofUnpaidDividendandShares under 48 C effect from7thSeptember,2016. and Refund) Rules, 2016 (hereinafter referred to as ‘Rules’) which has also come into force with has notified the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer Fund (hereinafter referred to as ‘Fund’). the PaymentofUnpaidDividendandAdministrationetc.InvestorEducationProtection provisions ofthisChapterhavebecomeeffectivenow.Thenewlyenforceddealwith of the Companies Act, 2013 with effect from 7th September, 2016. After this Notification, all the of administrationtheInvestorEducationandProtectionFund}(8)to(11)Section125 remaining provisionsofSection125i.e.sub-sections(1)to(4),(6){withrespectthemanner at therateofeighteenpercent annumduringtheperiodforwhichsuchdefaultcontinues. day duringwhichsuchdefaultcontinues andthecompanyshallbeliabletopaysimpleinterest may extend to two years and with fine which shall not be less than one thousand rupees for every company shall,ifheisknowinglyapartytothedefault,bepunishable withimprisonmentwhich of declarationtoanyshareholderentitledthepayment dividend,everydirectorofthe been paidorthewarrantinrespectthereofhasnotposted within thirtydaysfromthedate dividends andprovidesthatwhereadividendhasbeendeclared byacompanybuthasnot for failuretodistribute with the punishment deals 2013 Act, the Companies 127 of Section to payinterimdividend. required tobedepositedwithin5daysoftheboardmeetinginwhich theboardtakesadecision Meeting inwhichthedividendisdeclaredbyshareholders.In caseofinterimdividend,itis a separateaccounttobeopenedwithscheduledbankwithin 5daysoftheAnnualGeneral from thedateofdeclarationdividend.Thus,amountdividend hastobedepositedin interim dividend, shall be deposited in a scheduled bank in a separate account within five days According toSection123(4)oftheCompaniesAct,2013 amountofdividend,including SEPARATE BANKACCOUNT DEPOSIT OFAMOUNTDECLAREDDIVIDENDINA Section 124(1) of theCompaniesAct,2013provides thatwhereadividendhas been declared TO UNPAIDDIVIDENDACCOUNT UNPAID/UNCLAIMED DIVIDEND TOBETRANSFERRED implementing theseprovisions. while faced bythecompanies being procedural problems and the under theRules on thenewcompliance focuses who are entitled to suchdividendorshares. The Article also amount andsharestransferredtotheFundbypersons Transferof dividend ofsharestotheFundandClaiming to UnpaidDividend Account andsubsequently to the Fund, for transferto theprocessofunclaimed/unpaiddividend This Article dealswiththenewlyenforced provisions relating 5th September,2016hasbroughtintoforcetheprovisionsofSection124and f Dividend’. of atr II f h Cmais c, 03 el wt te Dcaain n Payment and ‘Declaration the with deals 2013 Act, Companies the of VIII hapter h Mnsr o Croae far (C) ie t Ntfcto dated Notification its vide (MCA) Affairs Corporate of Ministry The On the same day vide a separate Notification, the MCA JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 49 48 JANUARY 2017 I CHARTERED SECRETARY hriatr eerd o s IP Atoiy) osiue udr the under constituted Authority’) ‘IEPF as to referred (hereinafter transfer totheInvestorEducationandProtectionFundAuthority shall sendastatementintheprescribedformofdetailssuch established undersub-section(1)ofSection125andthecompany the companyalongwithinterestaccrued,ifany,thereontoFund of sevenyearsfromthedatesuchtransfershallbetransferredby Dividend Accountwhichremainsunpaidorunclaimedforaperiod Section 124(5)providesthatanymoneytransferredtotheUnpaid TO INVESTOREDUCATIONANDPROTECTIONFUND TRANSFER OF UNPAID/UNCLAIMEDDIVIDENDAMOUNT benefit of the members of the company in proportion to the amount annum andtheinterestaccruingonsuchamountshallenureto transferred tothesaidaccount,atrateoftwelvepercent such default,interestonsomuchoftheamountashasnotbeen Account ofthecompany,companyshallpay,fromdate of theamountrequiredtobetransferredUnpaidDividend part total amountorany transferring the If anydefaultismadein and twentysevendaysfromthedateofdeclarationdividend. the CentralGovernmentwithinamaximumperiodofonehundred on thewebsiteofcompanyandalsoapprovedby details ofanyunpaid/unclaimeddividendamountwouldbeavailable friendly measure,aftercomingintoforceoftheseprovisions,the the requisiteinformationonwebsites.However,asaninvestor such Formhasyetbeenprescribedforthepurposeofuploading such form,mannerandotherparticularsasmaybeprescribed.No website approvedbytheCentralGovernmentforthispurpose,in place itonthewebsiteofcompany,ifany,andalsoanyother addresses andtheunpaiddividendtobepaideachperson Account, prepareaStatementcontainingthenames,theirlastknown days ofmakinganytransferanamounttotheUnpaidDividend additionally providesthatthecompanyshall,withinaperiodofninety now 124 Section (2) of However, subsection Act, 1956. Companies similar totheprovisionscontainedinerstwhileSection205Aof bank tobecalledtheUnpaidDividendAccount.Theseprovisionsare account to be opened bythecompany in thatbehalf in any scheduled amount ofdividendwhichremainsunpaidorunclaimedtoaspecial the dateofexpirysaidperiodthirtydays,transfertotal the dateofdeclaration,companyshall,withinsevendaysfrom by acompanybuthasnotbeenpaidorclaimedwithinthirtydaysfrom h Caiiain sud ie eea Crua N.321 dated No.13/2016 Circular General vide issued Clarification the such amountsbecomingduetobecreditedtheFund.As per or unclaimedamounttotheFundwithinaperiodofthirtydays of Rule 5ofthesaidRulesrequiresCompanytotransferunpaid said Fund. provisions ofsubsection(5)Section125whichadministers the indicating the deposit of the amount to the Fund and shall fill in the i.e. ‘Statement is also required to file with the IEPF Authority one copy of the challan IEPF-1 No. mentioning theSRNofchallaninonlinemodeonly.Thecompany Form file to of amountscreditedtoInvestorEducationandProtectionFund’ and online challan the amount underSection125oftheCompaniesAct,2013togenerate 5th December,2016,itismandatoryforthecompaniesdepositing may applytothecompanyforpaymentofmoneyclaimed. money transferredtotheUnpaidDividendAccountofcompany remaining unpaidtothem.Anypersonclaimingbeentitledany submission ofchallan.Underthe earlierprovisionsasprescribed details ofsuchtransfertothe IEPF Authoritywithinthirtydaysof of thechallanfurnishStatement inFormNo.IEPF-1containing to whichithasbeencredited.The companyshall,alongwiththecopy full particularsoftheamounttendered includingtheheadofaccount CHARTERED SECRETARY I JANUARY 2017 TRANSFER OF U NPAID D IVIDEND AND SHARES UNDER IEPF A (e) (d) (c) promotion of investors‘ education, awareness and protection; (b) (a) prescribes thepurposesforwhichFundshallbeutilisedasunder: various amountsrequiredtobecreditedtheFund.Section125(3) Section 125(2)oftheCompaniesAct,2013providesdetails of THE INVESTOREDUCATIONANDPROTECTIONFUND CLAIM OFUNPAIDDIVIDENDANDREFUNDSFROM who is in default shall be punishable with fine which shall not be less extend to twenty-five lakh rupees and every officer of the company under the Companies Act, 1956, the companies were filing the said with fine which shall not be less than five lakh rupees but which may of therequirementsthissection,companyshallbepunishable Section 124 (7) providesthat if acompanyfailsto comply withany information inForm1INV. than one lakh rupees but which may extend to five lakh rupees. rules asmaybeprescribed. any otherpurposeincidentalthereto, inaccordancewithsuch the Tribunal;and by holders ordepositorsasmaybe sanctioned action suitsundersections37and 245bymembers,debenture- reimbursement oflegalexpenses incurredinpursuingclass made bytheCourtwhichhadordered disgorgement; to wrongactionsbyanyperson, inaccordancewiththeorders debenture-holders ordepositorswhohavesufferedlossesdue shareholders, or debentures, shares for applicants identifiable eligible and disgorged amountamong of any distribution interest thereon; matured debentures,theapplicationmoneydueforrefundand the refundinrespectofunclaimeddividends,matureddeposits, refund ofthesaidamount. may applytotheIEPF Authority forthe the amountreferredinSection125(2) any personclaimingtobeentitled 125(4) oftheCompanies Act, 2013, the provisionscontainedinSection transferred totheFund. However, under no personcouldclaimanymoneyonce Companies (Amendment) Act, 1999, Thus, afterthecommencementof the made inrespectofanysuchclaims. for paymentandnoshallbe the datesthattheyfirstbecamedue unpaid foraperiodofsevenyearsfrom amounts whichwereunclaimedand the Companyinrespectofindividual claims shalllieagainsttheFundor was categoricallyprovidedthatno contained intheold Act of1956it Under therelevant provisions UTHORITY (A CCOUNTING, A UDIT , T RANSFER AND REFUND) R ULES 49 , 2016

ARTICLE ARTICLE The said Guidelines provide for nomination of a nodal officer by the investors and has also prescribed the format of the verification report. shall, within fifteen days of receipt of the claim form, verify the form, company authorisedemailidto theIEPFAuthority.Thecompany his/her designation,postaladdress, telephone&mobilenumberand communicate the contact details of the nodal officer duly indicating with IEPFAuthorityand of coordination purpose for the companies documents to the concerned company for verification of his claim. The claimantshallsendthecopyofIEPF5alongwithrequisite and sharesoutofInvestorEducationProtectionFund(IEPF)’. be followed by the companies for verification of refund claims of the The IEPFAuthorityhasissuedtheGuidelinesdated27.10.2016 to FROM THEFUND REPORT FORMATANDSETTLEMENTOFCLAIMS GUIDELINES FORISSUEOFREFUNDANDVERIFICATION IEPF-5 i.e. ‘Application to the Authority for claiming unpaid amounts to theFundmayapplyforrefundIEPFAuthorityinFormNo. records. Anypersonwhoseunclaimeddividendhasbeentransferred the Fund.TheIEPFAuthorityshallhavepowerstoinspectsuch unclaimed foraperiodofsevenyearsandhasbeentransferredto of whomunpaid or unclaimedamounthasremained unpaid or certificate number, beneficiary details etc. of the persons in respect of name,lastknownaddress,amount,folionumberorclientID, The companyisunderobligationtomaintainrecordconsisting apply totheIEPFAuthorityforrefundofsaidamount. claiming tobeentitledtheamountreferredinSection125(2)may contained inSection125(4)oftheCompaniesAct,2013,anyperson money oncetransferredtotheFund.However,underprovisions the Companies(Amendment)Act,1999,nopersoncouldclaimany in respectofanysuchclaims.Thus,afterthecommencement they first became due for payment and no payment shall be made unclaimed andunpaidforaperiodofsevenyearsfromthedatesthat Fund ortheCompanyinrespect of individualamountswhich were 1956 itwascategoricallyprovidedthatnoclaimsshalllieagainstthe old Act of concerned. Undertherelevantprovisionscontainedin Fund is so farasrefundfromthe change fundamental a This is IEPF Authority. proviso tosub-section(3)ofsection125,asthecasemaybe, for refund,underclause(a)ofsub-section(3)section125or of section124(dealtindetailsthelaterpartthisarticle)orapply to theFund,mayclaimsharesunderprovisionsub-section(6) redemption proceedsofpreferenceshares,etc.hasbeentransferred due forrefund,orinterestthereon,saleproceedsoffractionalshares, dividend, matureddeposits,debentures,applicationmoney Rules interaliaprovidesthatanyperson,whoseshares,unclaimed to suchamountmayapplytheIEPFAuthority.Rule7of Rules madeunderthatsection.Anypersonclaimingtobeentitled refund outoftheFundinrespectsuchclaimsaccordancewith per provisionsoftheCompaniesAct,1956,shallbeentitledtoget and ProtectionFund,aftertheexpiryofperiodsevenyearsas sub-section (2)ofsection205CtransferredtoInvestorEducation that thepersonwhoseamountsreferredtoinclauses(a)(d)of The Proviso to sub section (3) of Section 125 specifically provides which theFundcanbeutilised. 125(3) oftheCompaniesAct,2013hasaddedadditionalavenuesfor under thesaidSection.Thus,provisionsincludedinSection the interestsofinvestorsinaccordancewitholdRulesprescribed utilisted onlyforpromotionofinvestors’awarenessandprotection Section 205CoftheCompaniesAct,1956,Fundwastobe According totheearlierprovisionscontainedincorresponding 50 TRANSFER OF U NPAID D IVIDEND AND SHARES UNDER IEPF A UTHORITY (A CCOUNTING, A UDIT the Form5INVasrequiredearlier undertheInvestorEducationand the prescribedinformationunder thatRule.TheFormissimilarto year, containing each and unpaidamounts’, separatelyfor unclaimed statement or information through Form No. IEPF-2 i.e. ‘Statement of verification report from the company, complete in all respects and in all complete the company, from report of by verification be disposed shall company the IEPFAuthoritywithinsixtydaysfromdateofreceipt concerned the by verified duly An applicationreceivedforrefundofanyclaimundertheseRules Authority alongwithalltheprescribeddocumentsinIEPF5. camn sal file shall claimant A claimant inwritingorbyelectronicmeans. the reasonsfordelayandsameshallbecommunicatedto any delaybeyondsixtydaysshallberecordedinwritingspecifying claim and documents and submit its verification report to the IEPF refund fromtheFund. the IEPFAuthorityasrequiredundersaidRuleforpurposeof verify the claim of the applicant and submit the verification report to under obligationtomaintainsuchrecordspermanentlyinorder litigation orcomplaintarisingthereof.Obviously,thecompaniesare of any discrepancy in verification report submitted etc. leading to any indemnity thesecurityholderorcompanyforanyliabilityarisingout verification the in disparity or be liableto not shall otherwise. TheIEPFAuthority or report inconsistency or incongruity any to Authority incaseofanydisputeorlawsuitthatmaybeinitiateddue liable underallcircumstanceswhatsoevertoindemnitytheIEPF According toRule7(10)oftheRulescompanyshallbesolely by the company before filing any claim with the Authority. holder, hehastoensurethatthetransmissionprocessiscompleted successor oradministratornomineeoftheregisteredsecurity year. financial a in company r n ohr est a my e pcfe b te oenet a Government, the by specified be may as website other any or and uploadonitsownwebsite alsoonwebsiteofIEPFAuthority held aspertheprovisionsofsection 96oftheAct,separatelyfurnish of AnnualGeneralMeetingorthedateonwhichitshouldhavebeen in sub-section2ofsection125theAct,asondateholding the sevenyearsperiod,identifyunclaimedamounts,asreferred of section96theActandeveryyearthereaftertillcompletion of or thedateonwhichitshouldhavebeenheldasperprovisions a periodofninetydaysaftertheholdingAnnualGeneralMeeting Rule 5(8)ofthesaidRulesrequiresthateverycompanyshallwithin DIVIDEND ONTHEWEBSITES UPLOADING DETAILSOFTHEUNCLAIMED/UNPAID , T RANSFER AND ol oe osldtd li i rset f a of respect in claim consolidated one only REFUND) R ULES JANUARY 2017 , 2016 n ae camn i a ea hi or heir legal a is claimant case, In I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 51 50 JANUARY 2017 I CHARTERED SECRETARY Central Government within sixty days of end of financial year giving Fund duringtheyear.TheIEPFAuthorityshallfurnishareportto beginning of the financial year and actual amounts transferred to the deviation, ifany,intheamountsdetailedFormNo.IEPF-6at The Rulerequires thatthecompanyshallinformat thelatestavailable documents. Company Secretaryoranyother persontosignthenecessary of effecting transferofsuchshares, theBoard shall authorise the to theFund.TheRules alsorequirethatforthepurposes transferred IEPF Authoritywithinthirtydays ofsuchsharesbecomingduetobe the Fund. details ofcompanieswhohavefailedtotransferthedueamount of the reasons therein stating year financial the for accounts its of a statementtotheIEPFAuthoritywithinthirtydaysofclosure Fund in next financial year. financial year stating therein the amounts due to be transferred to the investor EducationandProtectionFund’withinthirtydaysofend with credited toanIEPFSuspenseAccount(nameoftheCompany) provides thatsuchshares shallbe and the Fund shares to of such Rule 6ofthesaidRulesprescribesindetailprocessfortransfer INVESTOR EDUCATIONANDPROTECTIONFUND TIME LIMITFORTRANSFEROFSHARESTOTHE Section 124(6) of the Companies Act, 2013 has, for the first time in EDUCATION ANDPROTECTIONFUND SHARES TOBETRANSFERREDINVESTOR ‘Statement of unclaimed or unpaid amounts to be transferred to the to furnishtheIEPFAuthorityastatementinFormNo.IEPF-6i.e. It isanewprovisionunderRule8oftheRulesrequiringcompany DURING THENEXTFINANCIALYEAR TO AMOUNTDUEBETRANSFERREDTHEFUND FURNISHING OFADVANCEINFORMATIONRELATING unclaimed amountslyingwithcompanies)Rules,2012. Protection Fund(Uploadingofinformationregardingunpaidand benefits arising out of such shares held by the IEPF Authority. not onlythesharesasmentionedabovebutalsoallresultant Fund. Rule3oftheRulesrequiresCompanytocreditFund the concernedsharesofthatFolio/DPIDwillnotbetransferredto the single yearoutofthesevenconsecutiveyearsforanyFolio/DP ID, any sharetotheFundbecauseifdividendhasbeenpaidevenfora all thesevenyearsinconnectionwitheachfoliobeforetransferring Fund. Thecompanieswillhavetothoroughlycheck the recordsfor seven consecutiveyear,thesharesshallnotbetransferredto dividend ispaidorclaimedforanyyearduringthesaidperiodof the Companies(Amendment)Act,2015clarifyingthatincaseany An explanationhasbeeninsertedattheendofSection124(6)by transferred bythecompaniestoFund. making anapplicationtotheIEPFAuthorityforclaimingshares the sameFromNo.IEPF-5canalsobeusedbyapplicantsfor documents asmaybeprescribedundertheRules.Asearlierreferred, Fund inaccordancewithsuchprocedureandonsubmissionof said Fundshallbeentitledtoclaimthetransferofsharesfrom to the of sharestransferred Anyclaimant may beprescribed. as the InvestorEducationandProtectionFund’containingsuchdetails statement in Form No. IEPF-4 i.e. ‘Statement of shares transferred to for sevenconsecutiveyearsormoretotheFundalongwitha shares inrespectofwhichdividendhasnotbeenpaidorclaimed on thecompaniestotransfer all the history,imposedanobligation one of the depository participants as may be identified by the CHARTERED SECRETARY The company is also required to furnish I JANUARY 2017 TRANSFER OF U NPAID D IVIDEND AND SHARES UNDER IEPF A being madeavailableonthewebsiteofCompany. the detailsofallsharestobetransferredFundare also public noticeinthenewspapersasrequiredundertheseRules and reason tofollowinviewofthefactthatcompaniesareissuing just fortransferringthemtotheFund.Thishasfurthergotavalid Share Certificate Number, Distinctive Numbers and may run into a Name ofShareholder(s),FolioNumber,Numbersharesheld, advertisement generallycontainsanumberofinformationsuchas which duplicate share certificates are being issued by the company number ofpagesthenewspapersifgivenforallthoseshares such as certificate share duplicate of issue for Companies the by lrfcto ta n frhr detsmn i rqie to be given is required advertisement no further that clarification of sharestotheFund.TheAuthorityshouldalsocomeoutwitha already startedbytheaffectedcompaniesforpurposeoftransfer caiiain ol b a ecm se t rglrs the process to regularise step a welcome be would clarification a of the clarification issued by the MCA. In view of this development, individually. However,thesamehasnotbeenacteduponinview public noticeandalsosentintimationtotheshareholdersconcerned In pursuancetotheseRules,manycompanieshavealreadygiven appeared inthenewspapers? letters totheshareholdersorfromdateonwhichpublicnotice within threemonthsaftercompletionofthedispatchindividual date onwhichtheunpaidamountwasduefortransfertoFundor Rules? Isitwithinthreemonthsfrom7thSeptember,2016orthe shares isfallingwithinthreemonthsofcomingintoforcethese relevant sharestotheFundincaseduedatefortransferofsuch unpaid dividend to the Authority in Form No. IEPF 3 i.e. ‘Statement However, thecompanyshallfurnishdetailsofsuchsharesand or statutory dividend, thecompanyshallnottransfersuchsharestoFund. or Tribunal of Court order Authority restraininganytransferofsuchsharesandpayment specific a is there Where on completionofthreemonths. initiate theaforesaidprocedureimmediatelyandtransfershares force oftheseRules,viz.7thSeptember,2016,thecompanyshall being completedwithinthreemonthsfromthedateofcominginto under sub-section(5)ofsection124havebeencompletedorare further providesthatincases,wherethesevenyearsasprovided giving detailsofsuchshareholdersandsharesduefortransfer.It and regionallanguagehavingwidecirculation,onitswebsite simultaneously publishanoticeintheleadingnewspaperEnglish three monthsbeforetheduedateoftransfersharesandalso address, theshareholderconcernedregardingtransferofshares Notification came in to force. When should the Company transfer the due datefortransferofsuchsharesisfallingimmediatelyafterthe the if period There isconfusionregardingcalculationofthreemonths shareholders concernedandreleasingpublicnoticeinnewspapers. information mayalsotakesometimeforinformingtotheindividual due datefortransferofsuchsharestotheFundascompilation Generally, theprocesshastostartmuchbefore3monthsfrom end of financial year. Investor EducationandProtectionFund’withinthirtydaysfromthe to the dividend nottransferred or unpaid and unclaimed shares of As per Rule 6(3)(c) for the purposes of effecting the transferwhere effecting of purposes Rule 6(3)(c) forthe Asper TRANSFER OFSHARESHELD WITHADEPOSITORY form. of bothI)Sharesheldwithadepository andII)Shareheldinphysical Rule 6(3)ofthesaidRuleshas provide detailedprocessfortransfer For thepurposeofeffecting transfer ofsuchsharestotheFund, EDUCATION ANDPROTECTIONFUND MANNER OFTRANSFERSHARESTOINVESTOR UTHORITY (A CCOUNTING, A UDIT , T RANSFER AND REFUND) R ULES 51 , 2016

ARTICLE ARTICLE share certificates maintained in Form No. SH 2 as specified in the shall beenteredforthwithinaregisterofrenewedandduplicate (i.e. Securities Transfer Form as specified in the Companies (Share authorised bytheBoard, shall signthe necessary Form No. SH-4 certificate. The particulars of every duplicate share certificate issued, share certificate be stampedorpunchedinboldlettersacrossthefaceofshare of in lieu “Issued No..... forpurposeoftransfertoIEPF”andtheword“duplicate”shall is certificate duplicate the that face ofitandberecordedintheregistermaintainedforpurpose, each suchshareholdershallbeissuedanditstatedonthe favour of the Fund. on receipt of the duly filled transfer forms along Capital andDebentures)Rules,2014,fortransferringthesharesin of duplicate share certificates, the Company Secretary or the person Companies (ShareCapitalandDebentures)Rules,2014.Afterissue certificates. On receipt of such application, a duplicate certificate for concerned shareholders,tothecompany,forissueofduplicate share authorised bytheBoardshallmakeanapplication,onbehalfof shares areheldinphysicalform,theCompanySecretaryorperson As perRule6(3)(d)forthepurposesofeffectingtransferwhere Transfer ofsharesheldinPhysicalMode depository participantsbytheCompany. happen withthehelpofdepository(ies)withoutreachingtoindividual which can corporate actionorotherwise depository participantsbya should considersomeotherideatotransferthesesharesfromvarious are requiredtobetransferredtheFund.TheAuthorityconcerned depository participantsfromwhomthesharesheldindematmode be averytedioustaskforthecompaniestoreacheachandevery accounts toholdthesecuritiesindematerializationmode?Itwill company andtransfersharesoftheirclientswhohaveopened On whatgroundtheDepositorywillentertainrequestof instruction slipsfromsomanydepositoryparticipants/shareholders? A verypertinentquestionishowwouldtheCompanygetdelivery transfer ofsharesinfavourtheFunditsrecords. receipt ofthedeliveryinstructionslips,depositoryshalleffect in favourofIEPFSuspenseAccount(nametheCompany).On participants wheretheshareholdershadtheiraccountsfortransfer such shareholders,thedeliveryinstructionslipsofdepository or thepersonauthorisedbyBoardshallsignonbehalfof the sharesareheldwithadepository,CompanySecretary TRANSFER OF U NPAID D IVIDEND AND 52 with the duplicate share certificates, the Board or its Committee shall Fund andaseparateledgeraccount shallbemaintainedforsuch Any furtherdividendreceivedon suchsharesshallbecreditedtothe shares backtotheclaimantasand whenheapproachestheAuthority. any mannerwhatsoeverexceptforthepurposesoftransferring the such IEPFsuspenseaccountshallnotbetransferredordealtwith in account shallbemaintainedforsuchproceeds.Thesharesheld in Fund andaseparateledger such sharesshallalsobecreditedtothe account (nameofthecompany).Anyfurtherdividendreceived on except rightissueshallalsobecreditedtosuchIEPFsuspense shares e.g.bonusshares,split,consolidation,fraction etc. who are entitled for the shares and all benefits accruing on such accruing benefits all and shares the for entitled are who the company)withdepositoryparticipantonbehalfofshareholders The IEPFAuthorityshallmaintainsuspenseaccount(name of calculating thetotalvotingrights. have beentransferredtotheAuthorityshallnotbeexcludedwhile of SharesandTakeovers)Regulations,2011,theshareswhich the SecuritiesandExchangeBoardofIndia(SubstantialAcquisition claims theshares.TheRulesfurtherprovidethatforpurposeof mode orphysicalform,shallremainfrozenuntiltherightfulowner The votingrightson shares transferred to theFund, whether indemat effected infavouroftheFundrecordscompany. approve thetransferandthereafterofsharesshallbe SHARES UNDER IEPF A UTHORITY (A CCOUNTING, A UDIT 06 a ise a ute Caiiain ht h mtes including matters, the that Clarification further a issued has 2016 MCA videitsGeneralCircularNo.15/2016dated 7th December, manner ofdealingwithunclaimedshares. made inScheduleVIoftheListingRegulationsprescribing the under Section124(5)oftheCompaniesAct,2013hasalsobeen respect ofwhichunpaidorunclaimeddividendhasbeentransferred Depository Participants.Areferenceofsuchtransfershares, in these shares in the ‘Unclaimed Suspense Account’ with one of the relevant provisionsoftheRules. of the incurred bythecompanies forensuringthecompliance to be the companiesincludingsuggestion ofminimizationthecost Rules, theMCAwouldconsider therepresentationsreceivedfrom of such date revised. Thecompaniesarehopeful thatwhileissuingtherevised of and extension transfer areunderconsideration andtheRulesarelikelytobe process transfer of simplification dematerialise and Account’ Suspense ‘Unclaimed of name the in physical form,thelistedentitytransferallsharesintoone folio procedure adoptedundertheListingRegulations,forsharesheld in remain unclaimedand/orarelyingintheescrowaccount.Asper the the publicissueoranyotherissue,physicalotherwise,which with therequirementoftransfersecuritiesissuedpursuantto depository instruction slips, transfer deeds and duplicate certificates as thecasemaybe,areunderobligationtopreservecopiesof In anycase,undertheprescribedRules,companyordepository, dematerializing of all these physical share certificates by the Authority. all these duplicate separate duplicate share certificate for each Folio and then transfer and get it dematerializedinfavouroftheFund insteadofissue for allsuchsharesheldinphysicalmodeisissuedbytheCompany one consolidated duplicate share certificate it should be enough if these sharesonlyinde-materialisationmodebytheAuthorityalso, shares isnotpossible.Whentheintentionoflegislationtokeep keep onlythosesharesinphysicalform,wherede-materialisationof Authority, theAuthorityshall dematerialise theseshares and itshall itself thatoncethephysicalsharesaretransferredinnameof relevant inviewofthemandatoryprovisionsprovidedRules held in physical are which mode andarerequiredtobetransferredtheFund.Thisismore such shares all for issued is certificate idea toamendtheRulesprovidethatonlyoneduplicateshare transferring thesharesinfavourofFund.Itwouldbeagood the necessaryFormNo.SH-4foreachsuchcaseseparately 05 hriatr eerd o s Lsig euain’ t comply to Regulations’) ‘Listing as to referred (hereinafter 2015 ( ListingObligationsandDisclosureRequirement)Regulations, line asbeingfollowedbytheRTAfortransferofsharesunderSEBI to transferthesharesheldinphysicalformisadoptedonsame for itsrecordsand,therefore,itisimportantthatanalternatemethod certificate for each and every such shareholder and then to sign and such shareholder and every each for certificate the Rules,Companyisrequiredtoissueduplicateshare be transferredtotheFund.Asperprescribedprocedureunder shareholders whoseshares,heldinphysicalform,arerequiredto In amiddlelevellistedcompanytheremaybethousandsof ledger accountshallbemaintainedforsuchproceeds. as thecasemaybe,shallbecreditedtoFundandaseparate or amountreceivedforthesharessurrenderedinwindingupcases, of thesecurityholders.Theproceedsrealizedfromdelistingshares may surrenderthesecuritiestoreceiveamountentitledonbehalf securities areheldbytheAuthorityisbeingwoundup, Shares) Regulations,2009.Incasethecompanywhosesharesor the SecuritiesandExchangeBoardofIndia(DelistingEquity surrender sharesonbehalfoftheshareholdersinaccordancewith However, Ifthecompanyisgettingdelisted,Authorityshall proceeds. , T RANSFER AND REFUND) R ULES certificates in JANUARY 2017 , 2016 favour of the authority followed by I CHARTERED SECRETARY CS CHARTERED SECRETARY I JANUARY 2017 53 52 JANUARY 2017 I CHARTERED SECRETARY * [email protected] Offices, NewDelhi Practice, Luthra&Law Partner &Head-CompetitionLaw G.R. Bhatia Regime inthelast7 Years : wayforward The Journey oftheIndianCompetition herein arethepersonal viewsoftheauthor. Former ADG,CCI/MRTPC.Theviewsexpressed CHARTERED SECRETARY * I JANUARY 2017 C uiess o e alrd o nug i at cmeiie odcssrcue t h first the at conducts/structure competitive anti in indulge to allured get do businesses own field; (ii) competition is not stable; and (iii) competition kills competition. Accordingly, Competition, however,hasthreeuniquetraitsnamelynoonelikescompetitioninhis Until 31stMarch,2016,theCCI hasreportedlydealtwith707casesofanticompetitive An analysisoftheReportreveals thefollowing: year. AcopyofAnnualReport for theyear2015-16hasbeenputinpublicdomainrecently. Parliament anAnnualReportgiving atrueandfullaccountofitsactivitiesperformedinthe Asanoversightmechanism, thelawmandatesCCItoprepareandlaybefore endeavoured tobuildaneffective, robustandcrediblecompetitionregime. these years,allthethreeinstitutionshavelentunstintedsupport toeachotherandhave Central Government.Broadly,thisregimehasnowbeeninplace forthelast7years.Inall Thus, thetridentpillarsofcompetitionregimeare CCI, theCOMPATand appropriate. exemption toenterprisesorclassthereoffromapplicability oflawwhereveritdeems on competitionmatters/policies/laws,notifyingthresholdsfor merger/acquisitions, togrant Members, toinfusegrants/allocatebudgets,makereferences forenquiriesandopinion administrative controlandoweresponsibilitytomakeappointments ofChairpersonand or enterprises.TheMinistryofCorporateAffairsintheGovernment ofIndiaexercises who havebeenharmedonaccountofanticompetitive/abusive practicesofpersons compensation (which are follow on actions post finding of infringement of law) for those appeals againsttheorderspassedbyCCIandalsoto deal withcasesforawardof Appellate Tribunaltohearanddisposeof created theCompetition Government also The 1st June,2011. May, 2009andtheregulationofcombinations(mergers/acquisition)cameintoforcefrom anti competitiveagreementsandabuseofdominantpositionbecameeffectivefrom20th training aboutcompetitionissues.Thetwinenforcementdimensionsnamelyprohibitionof measures forthepromotionofcompetitionadvocacy,creatingawarenessandimparting Government onpossibleeffectcompetitionofaproposedpolicy;and(b)takesuitable inter alia,to(a)provideanopiniononareferencefromCentralGovernmentorState of tradecarriedonbyotherparticipantsinmarketsIndia.TheCCIisalsoobligated, and sustain competition; (c) protect theinterestofconsumers; and (d)ensure freedom is obligatedto(a)eliminatepracticeshavingadverseeffectoncompetition;(b)promote The GovernmentofIndiaestablishedtheCompetitionCommission(CCI)which enactment oftheCompetitionAct,2002. with the its placeamodernisedcompetitionregime has establishedin MRTP regimeand that itisinsyncwithmarketdynamics.ItthisbackdropIndiabidgoodbyetothe makes imperative for jurisdictions to fine tune the law and agency from time to time so Further, thecompetitiondimensionsandissuesarecomplexdynamicthisalso necessitated over130countriestohaveantitrustlawsandanagencyactasumpire. All these level ofdevelopment. economy notwithstandingthe in every competition opportunity. Thus,itisaformidablechallengetomaintainandsustainfreefair progress. Someareasrequiringreformsareindicatedherein. Thus, reformoflawanditsprocesseshave toalways beworkin market dynamicsbothindomesticaswellinternationaltrade. technology, innovation andnewbusinessmodelshavechanged The Competition Act, 2002was lastamendedin2007. Sincethen antitrust division of OECD has coined a maxim ‘competition brings prosperity’. abundance ofacceptablequalityataffordableprice.Itisinthisbackdrop,the ompetition inmarketsisbenignasitensuresavailabilityofgoods/services 53

ARTICLE ARTICLE eie gvn a inl o ies f nomto/eeec to file information/reference of filers to signal a giving besides houses unnecessarilywiththeadverseeffectsofinvestigation to aninferencethattheCCIdoesnotwantsaddlebusiness the CCIdropped395casesatprimafaciestage.Thisleads business entity.Whilein277cases,theinquirieswereinitiated, Violation ofcompetitionlawisinjurioustowealthdelinquent be onrightsideoflawfailingwhichtheCCIcanbitebitterly. businesses needtolearnthattheirbusinessconductshave and clearthattheCCIwillenforcelaweffectively Act, atotalpenaltyofRs13953crores.Themessageisloud of the under section27 adverse sanctions.TheCCIimposed in and postinvestigationbytheDirectorGeneral,94casesresulted agreements/abuse ofwhichitinstitutedinquiriesin277cases THE JOURNEY OF 54 confidence of the Informants in the competition regime. There the competition in Informants the of confidence to note that the number of information filed with the Commission 7 years,theCCIreceived606suchinformation.Itisheartening consumer, traderorassociationofconsumer/trade.Inaperiod Act canbeinitiatedinter-aliaonreceiptofinformationfromany the basicrequirements. An inquiryintoSection3and/or4ofthe better researchedandconvincinginformationmeetingatleast passed. This reflects the independence which a member enjoys view. Insuchcasesamajorityorderwithdissenthasbeen have beenfewcaseswhereallmembersnotheldthesame increasing reflecting years the over steadily rising been has in manycasesbytheCCI(d) inadequatestaffstrengthofthe number ofcases;(c)directions tosubmitsupplementaryreports competition cases;(b)demand forcrossexaminationinmore The reasonsseemstobe(a) everincreasingcomplexityof investigations aretakingincreasingly moretimeforcompletion. It is observed that the were filed by DG in a period of 7 years. for investigationandoutofthese the225investigationreports by theDirectorGeneral.Accordingly,277caseswerereferred of dominance,theCCIismandatedtogetsuchcasesinvestigated In relationtoallegedcasesofanticompetitiveagreements/abuse the ruleofreasondoctrineincomplicatedcompetitioncases. and alsodemonstratesanindepthanalysisofthematterunder which arenotexplicit. has shedlightonmanyprovisions principles ofnaturaljusticeand judicial bodyhastoabidebythe clear thattheCCIbeingaquasi orders hasmadeitpalpably The COMPAT throughvarious the principlesofnaturaljustice. and transparentbasisfollowing the Commissionworksinafair mechanism whichensuresthat COMPAT isakey accountability The scrutinyofordersbythe THE INDIAN C OMPETITION REGIME INTHELAST 7 YEARS : WAY FORWARD were filed voluntarily and 7 notices were filed on asking by the considered 360noticesforproposedmergers/acquisition(353 From 1stJune,2011till31stMarch,2016,theCCIreportedly continuity ofinvestigators. of thereby lack and service cadre DG and(e)absenceofits o alwd iuin f fiay f h regime. the of efficacy of dilution allowed not of exemptiontoanyenterpriseorclassthereof.Thus,it has Central Governmenthasbeenextremelyconservativeingrant budget grantswhichwasRs180croresduring2015-16.The The CentralGovernmentallalonghasmaintainedthelevelof has remanded114matterstoCCIforfreshexamination. appeals theorderofCCIhavebeenstruckdown.TheCOMPAT these, theCOMPATupheldCCI’sorderin216appeals,144 2015-16, theCOMPAThasdisposedof360appeals.Out provisions which are not explicit. Uptil the close of financial year the principlesofnaturaljusticeandhasshedlightonmany clear thattheCCIbeingaquasijudicialbodyhastoabideby The COMPATthroughvariousordershasmadeitpalpably and transparentbasisfollowingtheprinciplesofnaturaljustice. mechanism whichensuresthattheCommissionworksinafair The scrutinyofordersbytheCOMPATisakeyaccountability happen tobeIndia’smajortradingpartners. Understanding with7overseascompetitionauthoritieswhich of itsmandate,theCCIhasenteredintoMemorandum competition regimehasgoneupsteadily.Further,inpursuance internship etc.Studiesdoindicatethatawarenessabout competition advisory, such asworkshops/seminars/conferences, the stakeholdersthroughasetofdiverseawarenessmeasures mandate, ithasadoptedaproactiveapproachtoreachoutall advocacy asperSection49oftheAct.Inpursuancethis The Commissionhasthemandatetoundertakecompetition rabbit tobecomeaturtle. quick succession.Thusithasnotalloweditsmergersreforms has amendeditsCombinationRegulationsfromtimetoin and easethemergerregulationsystemprocesses,CCI jurisdictions andasapartofongoingconsistentefforttosimplify needs ofthemarketandbestpracticesinothermature delays inclearanceofsuchtransactions.Keepingviewthe existed atthecommencementofmergerregulation)inordinate term basis.Also,ithasallayedthehithertoapprehension(which scale whicharesinequanonforbusinesses’successonlong usefulness ofmerger/acquisitionsroutetoenhancesizeand CCI, till by the been blocked of theneed forand conscious is date. ThisshowsthattheCCI has deal No modifications. with (with anaveragetimeof20days)and2caseswereapproved CCI). Of these cases, 338 were approved without modification JANUARY 2017 I CHARTERED SECRETARY oee, n all in However, CHARTERED SECRETARY I JANUARY 2017 55 54 JANUARY 2017 I CHARTERED SECRETARY the CCIcanfollowleadsgiven bytheCOMPAT. offence or insufficiency of evidence. justice, disproportionatepenalty quathenatureandextentof of theDirectorGeneral,nonadherence ofprinciplesnatural lack of jurisdiction, inaccuracies and flaws in investigation report of theorderspassedbyCCI. Theseareprimarilyonaccountof Out of360appealsdisposed,theCOMPAThasstruckdown40% or HighCourts. over rupeestenthousandcroreshavebeenstayedbyCompat Court ispronounced.Itwouldberelevanttonotethatpenalty Hopefully, thisissuewillbe settled once the order oftheApex as reflected in its annual accounts or on the relevant turnover. as towhethertheCCIcanimposepenaltyontotalturnover The Hon’bleSupremeCourtiscurrentlyseizedwiththequestion penalty ordersorhasremandedthematterbackforafreshlook. Barring afewcases,theCOMPAThaseitherstruckdownsuch turnover/profit of the charged company and not relevant turnover. on severalgrounds,inter-alia,(i)thattheCCItookentire of thepenaltyordershavebeenchallengedbeforeCOMPAT Most ‘spare the rod and spoil the child’ worked in such matters. this the total realizationis just about Rs. 29crores.The maxim The CCIhasimposedatotalpenaltyofRs13,953croresandout would havebeenbetteroff. CCI asadjudicatorandthechargedbusinessentity-everyone given the have immenselyreducedtheburdenoninvestigatingarm, been not havebeeninvestigated.Lessinterventionistapproachwould parties these opportunity attheprimafaciestage,alotofthesecasesmay Had insufficient/absence. is the CCI,thatthereiseitherlackofjurisdictionorevidence charged party(ies)haveconvincedtheDGandsubsequently has beenfound.Thisclearlyshowsthatin183cases,thealleged in 94cases(outof277referredforinvestigation)infringement order asitisnotobligatedtodoso.However,noticedthatonly an opportunityofbeingheardpriortopassingtheprimafacie direction toDGinvestigateintotheallegation,hasnotafforded of thesecases,theCCIattimeinstitutinginquiryand violation ofanticompetitivepractice/abusein277cases.Inmost The CCIformedaprimafacieopinionofexistencealleged correction. are notinfectedwithanticompetitivepracticeviruseswhichneed this givesanimpressionthatinthewisdomofState,markets This lack lustre approachoftheStateiscertainlyunfortunateand enquiry norareferenceforlegaladviceoncompetitionissue. 23 references only filed Government Central the years, these h Sae oenet hv nihr ie ay eeec for reference any filed neither have Governments State The opinion. Central Governmentmadeonlyonereferencefor the without delvingintothemeritsofmatter.UnderSection49, acted as post office i.e., it has merely transmitted the complaint for inquiries.Inthesereferencesalso,theGovernmenthasjust CHARTERED SECRETARY I JANUARY 2017 All these are curable and THE JOURNEY OF policy andbusinesspractices. more activerolebymaking well researched references bothon Statistics DivisionoftheMinistry ofCorporateAffairs)canplay Likewise, theCentralGovernment (throughtheReseachand across theglobe.So it cando andovercomethese pitfalls. well deservedplaceinthecommunityofcompetitionregulators The CCI has many significant achievements and it has earned a Competition Review(GCR)hasputCCPatahigherpedestal. and observanceofprinciplesnaturaljustice,theGlobal industry andconsumers.Evenonadherenceofdueprocesses put in place ‘Guidelines’ for information and guidance of trade, was establishedalmostatthesametimeasthatofCCI has ‘penalty’ etc. Competition Commission of Pakistan (CCP) which ‘determination of relevant market’, ‘determination of dominance’, in publicdomainguidelinesonseveraldimensionssuch as CCI canavoidrecurrenceofsuchlapses.Likewise,it put The CompathasstruckdownseveralofCCI’sorders and the CentralGovernmenttorevisittheirapproachandprocesses. and theprocessesitwillbeworthforCCIaswell Parliament. However,thereisnoprovisionforreviewoflaw report thereonismandatedtobelaidbeforebothhousesof and the ComptrollerandAuditorGeneraltoundertakeaudit For oversight over finance and accounts, while the law mandates litigation. provisions forsettlementinsuchcasestoescapefromavoidable alleged dominantplayerfacinginquiry.TheActneedstohave of complexityinvolvedandpartlyonaccountdeeppocket alleged abuseofdominancedogetprotractedpartlybecause advance rulingasitexistsintaxregime.Further,enquiriesinto place we havein in case loss tosociety can avoid/mitigate we assessment themselves. Since theenforcementisexpost, businesses havetoundergothehardshipofcompetitionrisk matured jurisdictionsdoesnotprovideforadvancerulingand to alwaysbeworkinprogress.TheActunlikethelawseveral international trade.Thus,reformoflawanditsprocesseshave have changedmarketdynamicsbothindomesticaswell last 9years,technology,innovationandnewbusinessmodels The CompetitionAct,2002waslastamendedin2007.Inthe in theAct. Government administrativelyuntiltheamendmentiscarriedout by the CCI suo motu. Of alltheinquiriesinitiated,only4%havebeeninitiated hs ed t b sre ot y the by out sorted be to needs CCI. This the for ‘mandatory’ Sabha) soughttoamendthelawmakingreferenceforopinion (Amendment) Bill,2012(whichlapsedwiththedissolutionofLok seeking itsopiniononacompetitionaspect.TheCompetition There ishardlyanyreferencefromasectorregulatortotheCCI an expertbodyhavingdomainknowledgeincompetitionissues. interest ininitiatingsuomotuinvestigations,especiallywhenitis THE INDIAN C OMPETITION REGIME INTHELAST This reflects that the CCI should take greater

7 YEARS : WAY FORWARD 55 CS

ARTICLE ARTICLE [email protected] Mumbai Advocate Nagaraj UHiregange*,FCS Relief undertheIncome Tax Act, 1961 Gratuity: Exemptions, Taxability and 56 * Also ACIS(London). on his death or disablement due to accident or disease. on his retirement or resignation. • on his superannuation. • • than fiveyears- the terminationofhisemploymentafterhehasrenderedcontinuousservicefornotless Under thePaymentofGratuityAct,1972,gratuityshallbepayabletoan“employee”on under theIncomeTaxAct,1961. Income TaxAct,1961andhowitistaxableinthehandsofemployeelegalheirs Let usunderstandwhatisgratuity,howonecanclaimexemptionandreliefunderthe (CTC) whenjoiningacompanyormayalreadybepartofitintheexistingcompany. Gratuity maybeapartofthesalarypackageemployeei.e.costtocompany other establishments.” engaged inafactory,mine,oilfield,plantations,ports,railwaycompanies,shopsand thereunder therighttogratuityisanenforceablestatutoryavailableemployee to define ‘gratuity’ in any one of its provisions. However, it is manifest therefrom that the claimandissuesarise,itissignificanttonoticethatsamedoesnotevenattempt October, 1985hascommentedthus:“thePaymentofGratuityAct,1972,underwhich Colliery OfBharat...v.SitalChandraPathakAndOrs.1986P.L.J.R.1168.On1 Justice S.S.Sandhawalia,ofthePatnaHighCourtincaseAgentMuridhar even thoughtheyfunctioninefficiently.” disabled employeeswhobutforsuchretiringbenefitswouldcontinueinemployment necessary foran“orderlyandhumaneelimination”fromindustryofsuperannuatedor periodic paymentofastatedsum.Theyareboth“efficiencydevices”andconsidered between gratuityandpension,“Gratuityisalumpsumpaymentwhilepension Any gratuityreceived byanemployeeofthe GovernmentandLocalAuthority beingin EXEMPTION UNDERSECTION 10(10)(i) - Gratuity received by Government employees and employees of Section 10(10)(i) • follows - UndertheIncomeTaxAct,exemptioninrespectofGratuity hasbeenclassifiedas EXEMPTIONS UNDERTHEINCOMETAXACT service isterminatedduetodeathordisablement. However,theconditionoffiveyearscontinuousservice is notnecessaryifthe Scin 01)i) Gaut rcie b a o-oenet mlye covered employee non-Government a by received Gratuity - 10(10)(ii) Section • Section 10(10)(iii) - Gratuity received by a Non-Government employee who is not • T aspects ofpaymentgratuity. article providesvarious illustrations coveringallimportant Act provides for exemption subject to certain ceilings. This enabling legislationforgratuitypayments. The Income-tax or pension. The Payment ofGratuity Act, 1972isthe Gratuity, isakindofretirementbenefitlike providentfund local authority. under thePaymentofGratuity Act,1972 covered underthePaymentof GratuityAct,1972. of retirementbenefitlikeprovidentfundorpension.”Thereisadistinction ‘thankful’. meaning ‘gratus’ word Latin Wharton’s LawDictionarydefinesthewordgratuitythus:“Gratuity,isakind the from derived is ‘gratuity’ he term JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 57 56 JANUARY 2017 I CHARTERED SECRETARY Sub-section 3 of Section4thePayment ofGratuityAct, of anyemployeeisduetodeath ordisablement. shall notbenecessarywherethe terminationoftheemployment The conditionofcompletion continuousserviceoffiveyears to accidentordisease. retirement orresignation,(c) on hisdeathordisablementdue not lessthanfiveyears-(a)on hissuperannuation,or(b)on his employment after hehasrenderedcontinuous service for gratuity shallbepayabletoanemployeeonthetermination of Section 4ofthePaymentGratuityAct1972,states that other Actorbyanyrulesprovidingforpaymentofgratuity; Government oraStateandisgovernedby any include anysuchpersonwhoholdsapostundertheCentral or otherestablishmenttowhichthisActapplies,butdoes not factory, mine,oilfield,plantation,port,railwaycompany,shop manual orotherwise,inconnectionwiththeworkof a of suchemploymentareexpressorimplied,inanykindwork, an apprentice)whoisemployedforwages,whethertheterms employees. Itsays“employee”meansanyperson(otherthan Section 2(e)ofthePaymentGratuityAct1972,defines Gratuity Act,1972- The followingemployeesarecoveredunderthePaymentof 1972 andareNonGovernmentemployees. employees whoarecoveredunderthePaymentofGratuityAct, The exemptionunderthissectionisapplicabletothose EXEMPTION UNDERSECTION10(10)(ii) entire sumwillbeexemptfromtax. 2016 andreceivedRs.15,00,000asgratuity.Inthiscasethe Municipal Corporation.HeretiredfromhisservicesinAugust Illustration: Mr.ParasisanemployeeoftheBrihanmumbai Corporations willnotfallunderthiscategory. It is howeverto benoted that employeesof Statutory member orlegalheirsasapplicable,wouldbewhollyexempt. of thedeathemployee,hiswidowornearestfamily or inthecase case thegratuityreceivedbyemployee this the formofdeathcumretirementgratuityiswhollyexempt.In 10(10)(ii) or10(10)(iii)asapplicable. account thedeductionundersection that financialyearaftertakinginto of theassesseeunderthisheadfor is made, ontheestimatedincome financial yearinwhichthepayment basis oftheratesinforcefor rate ofincome-taxcomputedonthe the amountpayableataverage payment, deductincome-taxon gratuity shall, atthetimeof head “Salaries” andconsequently any incomechargeableunderthe The personresponsibleforpaying CHARTERED SECRETARY I JANUARY 2017 GRATUITY (rounded off),computed asfollows- then thesalaryforaforesaid exemptionwillbeRs.4615 retirement isRs.26,000including Rs.2,000overtimewages, worker andthesalarydrawnby himinthreemonthspreceding Illustration: IfintheaboveIllustration,Mr. Jayisapiecerated for eachunitproducedoraction performedregardlessoftime.) type ofemploymentinwhicha workerispaidafixedpiecerate preceding theterminationofhisservice.(Pieceworkis any overtime wages)receivedforaperiodof3monthsimmediately computed onthebasisofaveragetotalwages(excluding In caseofpieceratedemployee,15days’salarywill be 26000 (Basic+DA)x15/26=Rs.15000 as follows- salary fortheaforesaidexemption will beRs.15,000,computed commission is1%ofturnover,andBonusRs.5000,then is Rs.22,000(basic),dearnessallowance4000, Illustration: IfMr.Jay’smonthlysalaryatthetimeofretirement salary – The followingshouldbekeptinmindwhilecalculatingthe Gratuity actually received. Government, • Central the by specified amount Maximum of years of • the number by salary multiplied days’ 15 • of thefollowing- exemption shallbetheleast 10(10)(ii) saysthatthe Section under section10(10)(ii)oftheIncomeTaxAct,1961. purview ofthePaymentGratuityAct.1972doesnotfall Thus it can beseen,thatanypaymentwhich is outside the contract ofemployment. 10,00,000, unlessanythingcontraryhasbeenmentionedinthe states that the amount of gratuity shall not exceed Rs. : ExEMPTIONS dearness allowance. -Salary forthispurposewillincludeonlyBasicsalaryand -15 dayssalary=Salarylastdrawnx15/26 seasonal establishment. -7 daysinstead of 15days in case ofemployees a i.e. Rs.10,00,000. service , T AxABILITY AND RELIEF UNDERTHE I NCOME T Ax ACT 57 , 1961

ARTICLE ARTICLE Average monthly salary is to be computed on the basis of • Salary– The followingshouldbekeptinmindwhilecalculatingthe c. Gratuityactuallyreceived. Rs. 10,00,000 b. MaximumamountspecifiedbytheCentralGovernmenti.e. [Average monthlysalaryx1/2]completedyearsofservice service, i.e., a. Halfmonth’saveragesalaryforeachcompletedyearof will betheleastofFollowing- Payment ofGratuityAct,1972,exemptioninrespectgratuity In caseswheretheemployeesarenotcoveredunder SECTION 10(10)(iii) UNDER EXEMPTION years asitexceeds6months. months and3days,theperiodofserviceshallbetakenas8 months, then7yearsshallbetaken.Ifhoweveritisyears,6 duration ofservice.Iftheperiodserviceis7yearsand6 of serviceis7yearsand5months,thenshallbethe then 8yearsshallbethedurationofservice.Ifperiod Illustration: Iftheperiodofserviceis7yearsandmonths, rounded offtooneyear. part oftheyearexceedingsixmonths,periodshallbe year. Thuswherecontinuousservicehasbeenprovidedfora Part oftheYear,inexcess6monthswillbetakenasonefull Salary willbe4615(roundedoff)(8000x15/26) Step 3-ComputationofSalaryforexemption One monthsalarywillbeRs.800(24000/3) Step 2-Computationofmonthlysalary overtime wage) Three months’salarywillbeRs.24000(26000-2000being Step 1-Computationof3months’salary GRATUITY 58 - - details- other Following arethe 7 months. and 32 years period of Ms. MaitriretiredfromXYZLtd. on15-02-2016,afterservinga the helpofacomprehensiveillustration. Let usnowunderstandsections10(10)(ii)and10(10)(iii) with termination ofemploymentduetoresignation. exemption inrespectofgratuityispermissibleevencases of As perBoard’sletterF.No.194/6/73-IT(A-1)Dated19.06.73 ignored. for computationandthebalance11months26dayswill be 26 days,thenonly8yearswillbeconsideredasserviceperiod Illustration: IfthedurationofServiceis8years11monthsand to beignored. While computingtheyearofservice,anyfraction is employee. based onfixedpercentageofturnoverachievedbythe Allowance (ifincludedintermsofservice)andcommission For thispurposesalarywillincludeBasicSalary,Dearness preceding themonthofretirement). the periodof01-06-2015to31-03-2016(i.e.10months average salarywillbecomputedonthebasisoffor Illustration: Mr.Jugalretiresfromserviceon15-04-2016.His Dearness Allowance permonthduring10months preceding 31-01-2016) :Rs.2,00,000. month ofretirement(i.e.monthly salaryfrom01-04-2015to Basic salarypermonthduring 10monthsprecedingthe date ofretirement. immediately precedingthemonthofretirementandnot month ofretirement.Itistobenotedthat,it10months for 10monthsimmediatelyprecedingthe average salary : ExEMPTIONS , T AxABILITY AND RELIEF UNDERTHE I NCOME T Ax ACT , 1961 Salary for the purpose of this calculation will be the last • employee isleastofthefollowing - with respecttogratuityreceived byannonGovernment As perclause(iii)ofsub-section(10)section10,exemption (ii) x 33years). Thus totalamountofsalarywillbeRs.49,50,000(Rs.1,50,000 rounded offto33years(Forcomputationofexemption). Duration oftheserviceis32yearsand7monthswhichwill be 15 dayssalarywillbeRs.1,50,000(2,60,000x15/26) + Rs.20,000) Monthly salarywillbeRs.2,60,000(2,00,000+40,000 follows: Based ontheabove,computationof15dayssalarywillbe as any and salary basic include would “salary” term The • Part of year in excess of six months will be rounded off to • year ofserviceorpartinexcess6months.: Note 1:Computationof15days’salaryforeachcompleted gratuity willbeRs.40,00,000(Rs.50,00,000-10,00,000) 10,00,000 beingleast of theabove. Thus thetaxableamountof The amountofexemptionunderSection10(10)(ii)willbeRs. Wie optn 1 dy’ aay w wl dvd monthly divide will we salary, days’ 15 computing While • employee isleastofthefollowing- with respecttogratuityreceivedbyannonGovernment As perclause(ii)ofsub-section10section10,exemption (i) considering : Let uscomputetheamountofexemptedandtaxablegratuity - -

3. 2. 1. 3. 2. 1. Amount actuallyreceived. Government. Maximum amountspecifiedbythe Central service. (Note1). Half month’ssalaryforeachcompleted yearof Amount actuallyreceived. Government Maximum amountspecifiedbytheCentral or partinexcessof6months.(Note1) 15 dayssalaryforeachcompletedyearofservice one fullyear. Act, 1972 When Ms.MaitriisnotcoveredbythePaymentofGratuity salary by26. drawn salary. benefits.) of whetheritformspartsalarywhilecomputingretiring dearness allowance(allallowance,irrespective 1972. When Ms.MaitriiscoveredbythePaymentofGratuityAct, ii. i. 50,00,000. Rs. of retirement: the time at Gratuity received retirement (TurnoverachievedeachmonthRs.4,00,000) Ms. Maitriduring10monthsprecedingthemonthof Commission of5%onsaleseffectedachievedby (b) (a) to 31-01-2016): the monthofretirement(i.e.monthlyDAfrom01-04-2015 Act, 1972. Ms. MaitriisnotcoveredbythePaymentofGratuity 1972. Ms. MaitriiscoveredbythePaymentofGratuityAct, benefits :20,000 Not formingpartofsalaryforcomputingretirement benefits :Rs.40,000 Forming part ofsalaryforcomputingretirement JANUARY 2017 I CHARTERED SECRETARY Rs. 50,00,000 Rs. 10,00,000 Rs. 41,60,000 Rs. 50,00,000 Rs. 10,00,000 Rs. 49,50,000

CHARTERED SECRETARY I JANUARY 2017 59 58 JANUARY 2017 I CHARTERED SECRETARY Slr fr h proe f hs aclto wl b the be will calculation this of purpose the for Salary • b. a. ILLUSTRATION will notbechargeabletotax. or asgratuitytothewidowlegalheirsofdeademployee, dated 21-8-1990,thatanylumpsumpaymentmadegratuitously Board ofDirectTaxeshasclarifiedvideCircular:No.573, When theemployeedieswhilestillinactiveservice,Central be taxeddependingontheslabrateasapplicable. andwill includes gratuity under Section17 of Salary definition any willbetaxableunderthehead“IncomefromSalary”as 10(10)(iii) thebalancegratuity,inhandsofemployee;if After claimingtheexemptionundersections10(10)(ii)and after theexemptionhasbeenclaimed. Now letusunderstandthepositionofbalanceamountleft TAXABILITY OFGRATUITY (Rs. 1,30,000x32). Thus totalamountofsalarywillbeRs.41,60,000 Duration oftheserviceis32years Half month’ssalarywillbeRs.130,000(260,000/2) Based ontheabove,computationwillbeasfollows- Ms. Maitri. This istheaveragemonthlysalaryforpast10monthsof Half month’s salary will be computed by dividing average • The term “salary” would include basic salary and dearness • the computing while ignored be will year the of part Any • year ofservice: Note 1:ComputationofHalfmonth’ssalaryforeachcompleted gratuity willbeRs.40,00,000(Rs.50,00,000-10,00,000) 10,00,000 beingleastoftheaboveandtaxableamount The amountofexemptionunderSection10(10)(iii)willbeRs. TDS ONGRATUITY Based ontheabove,salarywillbeasfollows: exemption Total monthlySalaryforpurposeofcomputing of Rs.400,000 + Commissionreceivedat5%forsaleseffected- months immediatelyprecedingthemonthofretirement salary whilecomputingretirementbenefits),for10 + Dearnessallowancepermonth(formingpartof preceding themonthofretirement Basic salarypermonth,for10monthsimmediately duration ofservice. death. in thehandsofMr.Rohanas hehadretiredbeforehis heirs, thegratuitywillbetaxable, afterclaimingexemption, gratuity isreceivedbythewidow ofMr.Rohanorhislegal expires on31stMarch2016. In thiscaseeventhoughthe Mr. Rohanretireson29thMarch2016butunfortunately taxable aspertheCircularno.573,dated21-08-1990. it willnotbe the gratuityand Rohan willreceive of Mr. active serviceon21stMarch2016.Inthiscasethewidow superannuated intheyear2029.Howeverhedieswhile Under normalcircumstancesMr.Rohanwouldget turnover achievedbytheemployee. benefits andcommissionbasedonfixedpercentageof allowance formingpartofsalarywhilecomputingretirement day) oftheretirement. average salaryfor10monthsprecedingthemonth(not salary by2. CHARTERED SECRETARY I JANUARY 2017 Rs. 2,60,000 Rs. 20,000 Rs. 40,000 Rs. 200,000 GRATUITY Note -Averageratehasbeen calculatedasfollows- and Rs.500,000gratuity(afterexemption). Rs. 100,000salary 20.30% on at would be i.e. TDS applicable. gratuity tobepaidhimbasedontheaveragerateof tax Here thecompanymustdeducttaxforbothhissalaryand the month. Hehasnotdeclaredanyotherincometothecompany. 10,00,000 andcurrentlydrawsasalaryofRs.100,000 per gratuity ofRs.15,00,000.Heisentitledtoexemption Rs. Mr. Monishretireson31stMarch2016andistobepaid a ILLUSTRATION 10E totheemployer. if the employee submits the informationasprescribed in Form allowing reliefundersection89.Thiswillbeallowedonly Section 192(2A)providesthat,taxistobedeductedafter deduction undersection10(10)(ii)or10(10)(iii)asapplicable. head forthatfinancialyearaftertakingintoaccountthe made, ontheestimatedincomeofassesseeunderthis rates inforceforthefinancialyearwhichpaymentis at theaveragerateofincome-taxcomputedonbasis the timeofpayment,deductincome-taxonamountpayable under thehead“Salaries”andconsequentlygratuityshall,at The personresponsibleforpayinganyincomechargeable compute theTDSattimeofretirementanemployee. Accordingly, theemployermusttakethemintoaccountand as salaries” TDS containedinsection192andotherrelevantsections. of lieu in “profits provided insection17(3).Assuchtheyattracttheprovisionsof as ‘salaries’ head the under Retirement benefitsreceivableby an employee is taxable + Educationcess Tax onabovebasedslabrates Total Income + Gratuity(OnlyTaxableportion) Annual Salary(Rs.100,000x12) : ExEMPTIONS , T AxABILITY AND RELIEF UNDERTHE I NCOME T Rs. 10,050 Rs. 335,000 Rs. 17,00,000 Rs. 05,00,000 Rs. 12,00,000 Ax ACT 59 , 1961

ARTICLE ARTICLE income ofeach oftheprecedingtwoyears. years iscomputedbyaddingone halfofthegratuitytoother preceding 3years,theaverage ofratestheprecedingtwo difference being,insteadofaverage oftheaveragerates computed aspertheabovementioned guidelineswiththeonly In casescoveredunderthe secondcategory,thereliefis 5. 4. 3. 2. 1. category isworkedasunder: years butlessthan15years.Reliefinacasefallingthe first 15 yearsormore,and(ii)wheresuchperiodismorethan5 (i) wherethegratuitypayableisinrespectofpastservices relief isadmissiblecanbedividedintotwocategories,namely, of servicesrenderedforlessthanfiveyears.Casesinwhich However noreliefisadmissibleiftaxablegratuityinrespect how toclaimthereliefundersection89. (iii). Rule21A(3)oftheIncomeTaxRulesgivesguidelineson excess ofthelimitspecifiedundersection10(10)(ii)and10(10) Under section89,reliefcanbeclaimedifgratuityisreceivedin UNDER SECTION89 RELIEF GRATUITY 60 = (Rs.345050/17,00,000)x100 Average rateoftax Total taxpayable that at(4)willbethereliefadmissibleundersection89. The differencebetweentaxongratuitycomputedat(2)and on gratuityattherate. in themannerspecified(3)aboveandcomputetax Find outtheaverageofthreeratescomputed gratuity totheotherincomeofeachprecedingyears. Compute theaveragetaxratebyaddingonethirdof at (1)above. Find outthetaxongratuityataveragerateofcomputed including thegratuityinyearofreceipt. Determine theaveragerateoftaxontotalincome, : ExEMPTIONS , T AxABILITY AND RELIEF UNDERTHE I NCOME T 20.30% Rs. 345050 Ax ACT , 1961 out asunder- The reliefthatMr.AtulcanclaimunderSection89isworked bank interestondepositsRs.50,000),respectively. deposits Rs.90,000),350000(salary300,000plus 80,000), Rs.440,000(salary350,000plusbankintereston Rs. on deposits (salary 640,000plusbankinterest 720,000 Years (AY)2014-15,2013-14,2012-13hisincomewasRs. 75,000 asinterestfrombankdeposits.FortheAssessment received asalaryofRs.10,00,000duringtheyearand is exemptundersection10(10).Inadditiontothegratuity,he rendering acontinuousserviceof16years.Ofthis Rs. 500,000 590,000 asretirementgratuityon31stMarch2015,after Mr. Atul(Aged59years)receivedfromhisemployerRs. ILLUSTRATION Wharton’s Law Dictionary http://www.incometaxindia.gov.in SOURCES the gratuityandreliefthat theemployeecanclaim. to bedeductedatthetime employeeorhisheirs’receive tax Act,1961foranygratuity received; thetaxthatisrequired employee orhis heirs canclaim exemption under theIncome exact positionregardingtreatmentofgratuityandhow an From theabovediscussionandillustrationsonecanknow the CONCLUSION 7,191) =Rs.172544. Thus, taxforAssessmentYear2015-16(i.e.Rs.1,79,735- Rs. 89 15.43% Refund undersection 15.43% 10.99% Tax onRs.90,000@ 5.92% 7.44% Tax onRs.90,000@ for previous3AYs 5.42% average ratesoftax Average ofthe Average ratesoftax Tax ontotalincome Education cess Higher Secondary Add. Secondaryand Add. Educationcess Income tax Income which istheNet Gross Totalincome Bank interest taxable salary Gross Salarywhichis in theyear15-16 entire taxablegratuity 13-14, 14-15;andthe three AYs12-13, income ofeachthe (Rs. 90000)inthe the taxablegratuity Rs. 90000x1/3)of Add. Onethird(i.e. Salary Income JANUARY 2017 Assessment Years 021 031 041 2015-16 2014-15 2013-14 2012-13 8,0 7,0 5,0 11,65,000 750,000 470,000 10,90,000 670,000 380,000 380,000 330,000 10,00,000 640,000 350,000 300,000 0002008,0 174500 80,000 27000 75,000 80,000 20,000 90,000 50,000 30,000 30,000 30,000 30,000 .4 .4 7.44% 7.44% 7.44% 00 71 20 179735 82400 27810 20600 0 7 0 1745 3490 800 1600 270 540 200 400 s s s Rs. Rs. Rs. Rs. I CHARTERED SECRETARY 13887 7191 6696 CS - CHARTERED SECRETARY I JANUARY 2017 61 60 JANUARY 2017 I CHARTERED SECRETARY [email protected] Navi Mumbai (NISM) National InstituteofSecuritiesMarkets Faculty Member Nitesh Bhati,ACS demutualised StockExchanges A logicalstepforward forIndian Listing ofStockExchanges: CHARTERED SECRETARY I JANUARY 2017 choose tobea listedormayremainasanunlisted, closelyheldpubliccompany. may Stock Exchanges that afterthedemutualisation, the schemehasalsoprovided Further, topublic. shareholding their 51% to dilute the StockExchanges has directed Further,SEBI by shareholders. for-profit” associationtoa“for profit”companyowned “not to convertitselffrommutuallyowned scheme, SEBIhasaskedStock Exchanges restructuring. Inearlytwenty-first anddemutualisation century, underthecorporatization undergo and up theirexclusivity to give the stockexchanges, compelled globalization of time, domestic &international competition, technology advancement and Overtheperiod monopoly. high barriersfornewentrantsandaregional ownership, The Stock Exchanges havebeeninitiallyformedasassociationof broker, withmutual 2012. Regulation, Corporations) and Clearing for StockExchangesunderSEBI(Stock of governanceandcompliances at StockExchanges,SEBI hassetveryhighstandards and governance compliance of India(SEBI),underSecuritiesContractAct, 1956. Further,toensurebetter Board and Exchange bysecuritiesmarketregulator,i.e.Securities recognition having to functionasStockExchangewithout ensure thesame,noentitiesareallowed The aforesaid reasonsemphasis onrobustgovernanceat the Stock Exchange. To intermediaries. money andmorethanthatlossof confidence amongcommoditymarketinvestorsand loss ofinvestors’ huge seen we have in commodities, segment, i.e.spottrading small Spot ExchangeLtd.Eventhough, NSELfiascowasrelated past, asfailureofNational in recent in economyofthenation.Wehaveseenone ofsuchexample confidence Stock Exchange may resultina big lossto investors’ money as well as loss of of a on theirplatforms.Acollapse listed of thecompanies delisting of tradingand of Listing,suspension in respectofapproval powers toStockExchanges independent securities market trades, i.e. Securities Contract Regulation Act, 1956, gives bycompanieslistedontheirplatform. Listing Compliances Theprimelawfor the byensuring regulator also actasafirstlevel on theirplatform.StockExchanges trade thattakeplace to each Party withsettlementguarantee Counter act asCentral BACKGROUND A mandatory disclosuresandregulatory/publicscrutiny. diversified shareholdingsandalsobringstransparencydueto price. Listingalsofacilitatesbetterdecisionmakingdue to liquidate theirinvestmentatanytimewithfairandtransparent provide secondarymarket toitsshareholdersenablethem primary market toraisethefundfrompublicatlargeandalso Listing willenablethestockexchangestoeasilytap Exchanges, not only provide the infrastructure/platformfortradingbutalso Exchanges, notonlyprovide have beenseenasheartofaSecuritiesMarket.Stock the StockExchanges economy, of national as backbone seen been s, theSecuritiesMarkethas 61

ARTICLE ARTICLE regulatory role properly. The pressures for delivering market regulatory role properly. Thepressuresfordelivering it willbemoredifficultforStock Exchangestoperformtheir also. Insuchscenario, of shares in marketprice by movement of alistedentityismeasured quarter basis.Theperformance deliver expectedorabove returnonquarterto to pressure A listedentityhasadifferent typeofcontinuous interest andthreatsattachedtolistingofStockExchanges. conflict of topossible market players,related securities as as well different issuesinthemindofRegulator brings of StockExchanges, listing the thoughtofallowing role. Therefore, and regulatory commercial between balance merely acommercialcorporateentitywhichhastokeepthe However, StockExchangehasbeenseendifferentlythan entity. foracorporate lots ofadvantages brings Listing FROM LISTINGOFSTOCKEXCHANGES POSSIBLE CONFLICTOFINTERESTANDTHREATS per theirdesires. as to getexitfrominvestment liquidity investments and their Exchanges, whichwillenablethemto get fairvaluationof trading members(brokers),wantlistingoftheseStock institutions, ForeignPortfolioInvestors(FPI) financial andits big include NSE, which of BSEand shareholders The existing entity”, also wishto take advantage of these listingbenefits. “for profitcorporate well-established NSE andBSE,being andregulatory/ mandatory disclosures publicscrutiny. and alsobringstransparencydue to diversified shareholdings price. Further, Listing facilitatesbetter decision makingdueto their investmentatanytimewithfairandtransparent liquidate them to secondary markettoitsshareholdersenable at largeandalsoprovide to raisethefundfrompublic to easilytaptheprimarymarket the stockexchanges enable amongtheprospectiveinvestors. liquidity concern Listingwill moneyduetoregulatoryreasonsaswell as access topublic cannot listing, time investments.StockExchanges,without largeamountsfortimeto require same, StockExchanges their tradingsystems and otherfacilitiesupto date. For the so rapid,Stockto Exchanges havetheirownchallenges and economicconditions are where changeintechnologies environment, competitive global entity. Intoday’s corporate of a the growth in milestone Listing isamajor stakeholders. advantages not onlyto shareholdersbut alsoallthe competition. Listingofcorporateentitybringslots large enterprises whichhasto face domesticandinternational form for entity isanefficientorganizational A listedcorporate AD roles. and business regulatory StockExchange’s interest between conflict of aboutpossible hasopendebates Stock Exchange” of “Listing them tounlocktheirwealth.However, enable to markettoitsstakeholders secondary to provide Exchange, shares on Stock of theirown to goforlisting eagerness Recently, boththeseStock Exchanges haveshowntheir country’s largestStockExchanges. National StockExchangeLtd.(NSE)haveemergedas Ltd. (BSE)and Stock Exchanges.BombayExchange technology advancementand competition, becamedefunct not ablebeto survive infast movingenvironment of Over aperiodofthetime,manystockexchanges,whichwere LISTING OF 62 VA NTAGES STOC k Ex FRO CHANGES: A M LI ST LOGICAL STEPFORWARD FOR I NDIAN DEMUTUALISED S TOC IN G O F STO CK E XCHANG ES Among the top 10 Stock Exchanges based on market based Among thetop 10StockExchanges listed corporations. were publicly (WFE) ofWorld FederationExchanges Stock Exchanges 2012, twenty-three(23)member 2012, atend-December Cost&Survey World FederationofExchanges Revenue subsequently becamepublicly listedcorporations.As per several stockexchangeshave beendemutualisedand of time,globally Over theperiod in1991. Stock Exchange The firststockexchangetodemutualisewastheStockholm GLOBAL SCENARIO advantages of diversified shareholding. advantages ofdiversified the sharesfromsecondarymarketwhichmayresultinloss of orentitiesbybuying taken overbyanygroupofindividuals to would of aStockExchange also, wherethecontrol around in asituationlikeshipwithoutcaptain.It may beotherway lead theStockExchange.ThismayplaceExchange may which term perspective withlong mature shareholders major any orenough may nothave case, thestockexchange a market. Insuch at secondary valuation they wantseeing when stake, asand and responsibilities to getexitfromtheir also enabletheof major shareholders theStock Exchanges will listing cost. However, at low funding get accesstopublic to which isessential of theStockExchanges shareholders stock exchange. It is truethat listing willbringtheliquidityfor also helpindecisionmakingand ensure bettergovernance institutional shareholders,notonlyprovidethecapitalbut The major is noconceptofpromoterstockexchange. and control,there shareholding In India,toensurediversified to securitiesmarkettrades. to providesettlementguarantee undertake theresponsibility to credibility ithastostandwithhighest a situationwhen in such ofStockExchange to lossofcredibility may alsolead event, it overall fallinsecuritiesmarketduetoextraordinary Further, ifthepriceofstockexchangessharesfallswith reduction inregulatoryresourcesbystockexchanges. may resultinadilutionfocusonregulatorydutiesoreven expected returnstoensurebettersharepriceperformance, by stockexchanges. reduction inregulatoryresources on regulatorydutiesoreven may resultinadilutionfocus better sharepriceperformance, expected returnstoensure pressures fordeliveringmarket their regulatoryroleproperly. The for StockExchangestoperform scenario, itwillbemoredifficult market priceofsharesalso. Insuch is measuredbymovementin The performanceofalistedentity k Ex CHANGES JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 63 62 JANUARY 2017 I CHARTERED SECRETARY NSE was established as demutualised publiclimited company been longdelayed. step hasalready accepted logical globally important institutions. However, inIndian scenario, this in theevaluationofStock Exchangesaseconomically globally, listingis stepafterdemutualisation, the nextlogical that data from aforesaid visible part ofthislist.Itisclearly are based onmarketcapitalization, around theglobe exchanges BSE andNSE,whichareamongtop15majorstock It i.e. may benotedthatIndia’stwolargeststockexchanges 9. 8. 7. 6. 5. 4. 3. 2. 1. but notlisted: ownership exchanges withtransferable Exchanges aredemutualised nine(9)memberStock Survey 2012,thefollowing Revenue Further, asperWorldFederationofExchangesCost& Exchange. Thesestockarenot exchanges yet demutualised. to China i.e. ShanghaiStock Exchange andShenzhenStock The two majorStock Exchanges, whicharenot listed, belong 8. 7. 6. 5. 4. 3. 2. 1. listed: 8 StockExchangesarepublicly the following April, 2016(Monthlyreports, World Federationof Exchanges), as of of issuedsharesdomesticcompanies, capitalization Korea Exchange, Taiwan StockExchange, Børs, Norway Oslo Stock ExchangeofIndia,India National Malta StockExchange, China FinancialFuturesExchange, Budapest StockExchange,Hungary India Limited, BSE Istanbul, Turkey Borsa Deutsche Boerse,Germany Inc., Canada TMX Group Hong KongExchangesandClearing, Euronext, Europe London StockExchangeGroup,UK Japan ExchangeGroup, Nasdaq OMXGroup,US New YorkStockExchange,US CHARTERED SECRETARY I JANUARY 2017 LISTING OF STOC k Ex CHANGES: A to ensure the compliance by listedentities. In thecaseofself- to ensurethecompliance The regulationsputlotsof responsibility onStock Exchange 2015. Obligations andDisclosureRequirements/Regulations, SEBI(Listing bySEBIunder mandated compliance may leadto conflict of interest for ensuring variouslisting list itsownshareson stockexchange.However,this to is allowed the StockExchange is acasewhere Self Listing SELF- LISTINGORCROSS-LISTING for listingofStockExchanges. Regulation, 2012hasprovidedtheprovisions Corporations) and Clearing(Stock Exchanges list. Accordingly,SEBI to may bepermitted conflicts ofinterest,StockExchanges in viewofmeasuresto the decisiontakenregardingaddress listing of a Stock Exchange’s shares. The Board decidedthat of thecommitteetodisallow SEBI rejectedthesuggestion of MarketInfrastructureInstitutions.However, governance and ofthecommitteeonownership of therecommendations 2012,hadacceptedmost Regulation, Corporations) Clearing and framing SEBI(StockExchanges The SEBIBoard,while of StockExchange. listing is notinfavorofpermitting Therefore, theCommittee investments. for attractingspeculative a vehicle become inputs etc. managerial TheStock Exchange shouldnot addition interms of technology, market/product design, value the necessary by providing to itsgrowth contribute to and of theStockExchange interest inthefunctioning term investorswhoaresufficientlymotivatedtotakeakeen that the investorsof Stock Exchangesshallneedtobelong- Exchanges. Thecommitteeinter alia statedunderits report of MarketInfrastructureInstitutions(MIIs)Stock including and governance from theownership issues arising examine Bimal Jalan,(Former Governor, Reserve Bankof India) to of Dr. the Chairmanship under SEBI constitutedaCommittee INDIAN EXPERT’SANDREGULATOR’SVIEW both theStockExchangesarestillwaitingfortheirlisting. in 2005.However, in 1992andBSEhasbeendemutualised LOGICAL STEPFORWARD FOR I NDIAN DEMUTUALISED S TOC k Ex 63 CHANGES

ARTICLE ARTICLE high standardof governance. of both the stock exchanges which aresupposedto be with actions. Thismay lead to ultimately damagethereputations and unjustifiable surveillance bring thethreatsofexaggerate may and enforcement ofotherStockExchange inspection competing Stock Exchanges with power of supervision, In oneof such acompetingenvironment, empowering the trading attheirplatform. to reduce thecost and increasetheefficiencyto attract more more tradeisconcerned,bothexchangesaretryingtheirbest for getting As farascompetition also. for listing NSE and Trading PlatformhavebroughtthecompetitionamongBSE Institutional Platform and trading, suchasSMETrading and of listing segments NSE. However,thenewer and of Indiai.e.BSE stock exchange to listonbothlargest chose generally Most ofthecompanies, listing). (i.e. dual Exchange to belistedonmorethanoneStock are allowed companies competition for listing. The reason being, inIndia, the fortradersismorethan In Indianscenario,competition b) a) competition amongtheStockExchanges: of there aretwodimension and profit.Typically revenue subject to market competitionfortheirbusiness enhancing Stock Exchanges,beingforprofitcorporateentity,are her judgement.” and thereforebias in thecompetition affect herownposition reasoning: If one passesjudgementona competitor, it will another idea, ‘No one shall judge a competitor’s cause’. The principle ‘No one shall judge his own cause’, we might add titled StockExchangesattheCrossroads:“Towell-known says inapaper Private Law and International Comparative As AndreasM.FleckneroftheMaxPlanckInstitutefor and takeactiononnon-compliance. monitor yourcompliance where your competing stock exchange is given powerto reduce theconflictofinterestbutitalsocomeswithathreat to It maylead to listonlyotherStockExchange. allowed theStockExchanges are Cross Listingisacasewhere own compliances. to ensureits stock exchange listing, itwillbelikeallowing LISTING OF 64 To getmoretradesontheirtradingplatform listed ontheirplatform To getmorecompanies with highstandardofgovernance. exchanges whicharesupposedtobe the reputationsofbothstock This mayleadtoultimatelydamage surveillance andunjustifiableactions. may bringthethreatsofexaggerate enforcement ofotherStockExchange of supervision, inspectionand Stock Exchangeswithpower Empowering oneofthecompeting STOC k Ex CHANGES: A LOGICAL STEPFORWARD FOR I NDIAN DEMUTUALISED S TOC listing andnotforself–ofStockExchange. for onlycross SEBI 2012,hasprovided (SECC) Regulation, to goforcross-listingratherthanself-listing.SEBI, under SEBI, hasdecided market regulators securities cons, Indian andcross-listing,bothhasitsownpros Since, self-listing listing ofsuchstockexchangeonitsplatform. getting listedas well as stock exchange, whichis allowing such things,willbeafor challenge the stock exchange of implementation for thesame.Butactual mechanism stock exchanges and depositoriesto put in place the CIR/MRD/DSA/01/2016 datedJanuary01, 2016, advised no. circular Stock Exchange,SEBI,vide case ofListed in balances putinplacebySEBI. To ensurethesecompliances checks and to failureofaforesaid it maylead Accordingly, market. secondary from exchange stock the of shares As mentioned earlier,listingmay allow anypersonto buy the % forothers)etc. Institutions and5 Financial and entities(i.e.15%forPublic of 2%, maximumlimitonholdingsharesbygroupof individual approval for buying sharesof the stock exchange beyond each shareholders of the Stock Exchange, regulatory “Fit andProper”criteriafor include Such checksandbalance and entities. ofindividuals by smallgroup not becontrolled and itshall of theStockExchangesremainwelldiversified that shareholding 2012, toensure SEBI (SECC)Regulation, under balances for lotsofchecksand SEBI hasprovided on theirshareholding. based by itsshareholders controlled for-profit corporateentities,is The stockexchange,being OWNERSHIP OFSTOCKEXCHANGES has approached SEBI at various occasions for getting its for getting occasions SEBIatvarious approached has BSE Scheme. Since,demutualisation and Demutulalisation about thesameinitsCorporatization has madethemention BSE foritsshareholders. of itssharestoensuretheliquidity exchange aswellshareholders, haveenvisagethelisting itself, the of demutualisation At thetime year 2005. in BSEhasbeendemutualised 140 yearsfromitsestablishment. BSE, India’s oldest Stock Exchange, hasrecentlycompleted Bombay StockExchange(BSE) CURRENT STATUS k Ex CHANGES JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 65 64 JANUARY 2017 I CHARTERED SECRETARY the domesticlisting. after to listonoverseasstockexchange NSE hasproposed by SEBI. listing aspertheexistingnormprescribedFurther, pressure, the NSE board hasdecidedto go aheadwithcross- appears thatasshareholderscontinuedpilingonthe not providedfor such thing.As reported recentlyinmedia,it or neutralbody.However,theexistingSEBIhas regulations mandatory disclosure andsupervisiondirectlyby the regulator with was preferringtohaveeitherself-listingorcross-listing to list on competitor’sStockExchangei.e.BSE.TheNSE in media,NSEwasnotcomfortable As perthecommentary Foreign PortfolioInvestorsalso. including shareholders investment fromvariousinstitutional attracted of time,NSEhas of theNSE.Overperiod shareholders of IndiaLimitedwerethefounding Corporation (SBI), IFCI Limited, IDFC Limited andStock Holding (LIC), StateBankofIndia of India Corporation Insurance market. Life capital to theIndian transparency to bring of India of thegovernment institutions atthebehest financial corporate entitybyagroupofIndian demutualised leading National stock Exchangewasestablished in1992as National Stock Exchange(NSE) may belistedonNSEpostinitialpublicoffer. condition of the cross-listingofshares.Thus,BSE’sshares Listing. BSE has expressed inmediato accept the regulators the process of the initial publicoffer which willbefollowedby the draftofferdocumentwithSEBItoinitiate of filing process recently got SEBI in principleapprovalalsoandthey are in that BSE has inthemedia, reported BSE Listing.Ithasbeen 2012, hasmadeapathfor SEBI (SECC)Regulation, under of stockexchange for listing provision SEBI, byproviding also. as pressureonthemanagementofstockexchange is resulting which havebecomepainful of theseshareholders wait theirinvestment value.Theprolonged wishes tounlock new publicshareholderswhohas been allotted/ sold shares, schemeaswell has gotsharesunderdemutulalisation play theirrole as firstlevelregulatorto ensure listing NSE) (BSE and these twocompetitors tell how only time will balancing their commercial and regulatory roles.Further, satisfy their shareholdersaswell asthe regulator, by will the stockexchange how be worthseeing itself. Itwill year to seelistingofBSEandNSE, sooninthiscalendar in place. SecuritiesMarketsarehopeful provisions regulatory to BSEandbyputtingnecessary approval giving in-principle the air,by SEBI, hascleared 2016, In early Exchanges. the nextsteptoStock logical allowlistingofourdemutualised commercial andregulatoryroles.Indiaisalreadytoolatefor are listedandkeepingwellthebalancebetweentheir globally purpose of demutualisation. Allthe leading stock exchange listingcoulddefeat the Hence, disallowing demutualisation. been globalacceptednextstep logical after completion of BSE. exchanges including Listingof Stock Exchange has other stock demutualised subsequently entity and corporate for profit first demutualised NSE, as by establishing 1992 back in way Stock Exchanges, of Indian demutualisation took thefirststepof trend, India the global Following CONCLUSION who members trading The listing. for approval’ ‘in-principle CHARTERED SECRETARY I JANUARY 2017 LISTING OF STOC k Ex CHANGES: A 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. ACKNOWLEDGEMENTS for regulator whichhopefullySEBI will overcomesagaciously. among thelistedStockwillbeanotherchallenge Exchanges compliance of each other. Ensuring benchmarkedgovernance CHARTERED SECRETARY LOGICAL STEPFORWARD FOR I NDIAN DEMUTUALISED S TOC Stock Exchanges of the reports onlisting media print andonline Various Exchanges -April,2016 Monthly StatisticsReports,WorldFederationof 2012 World FederationofExchangesCost&RevenueSurvey International PrivateLaw and Fleckner, MaxPlanckInstituteforComparative at theCrossroads-AndreasM.Stock Exchanges Stock Exchanges. Clearing Corporations) Regulations, 2012byListed and (StockExchanges Contracts (Regulation) Securities 01, 2016Procedures for ensuring compliance with no.CIR/MRD/DSA/01/2016datedJanuary SEBI circular SEBI Board MeetingheldonNovember15,2015 Listing of Stock Exchanges - Agenda andMinutesof 2012 Regulations, Corporations) Clearing And (StockExchanges Contracts (Regulation) Securities Minutes ofSEBI Board MeetingheldonApril02,2012 Policy onMarketInfrastructureInstitutions-Agendaand Institutions’ –November,2010 of MarketInfrastructure and Governance Ownership (Former Governor, Reserve Bank of India), on ‘Review of by Dr.BimalJalan, Report oftheCommittee,chaired of StockExchanges Demutualisation former Chief Justice of India onCorporatisation & byJusticeM.H.Kania, Report oftheGroupheaded e-mail: [email protected] Area, LodhiRoad,NewDelhi – 110003. The Director(Publications),the ICSI,22,Institutional The articles may kindlybe forwarded to: Board forpublicationinthesaidspecialissue articles forconsiderationbytheEditorialAdvisory others arewelcometocontributeMembers and 2017 issue of CharteredIn Secretary. February/March Insolvency Professionals on... Secretary It isproposedtobringoutaspecialissueofChartered SPECIAL ISSUEOF . k Ex 65 CHANGES

ARTICLE ARTICLE * [email protected] on BlackMoney Input Tax Credit UnderGST- Another Backlash 66 Noida Monika Goel&Associates & CorporateTrainer Practising CompanySecretary Dr. MonikaGoel for CSProfessional Students. Founder Facuty,Monika Goel’sOnlineClasses Rachna InternationalUniversity,Faridabad and Professor andHeadofDepartment, Manav *, FCS D Under thepresent structureofinputtaxcreditone toonecorrelationbetweeninput andoutput taxes considerably. services wouldalsobecreditable. Thiswouldundoubtedlyreducethecascadingeffectof to bothgoodsaswellservices. Moreover,taxpaidatthetimeofimportgoodsand available notonlyinintra-State transactionsbutalsoininter-Statewithrespect will followsupplychaincompletely. Unlikethepresentstructure,ITCunderGSTwouldbe is going It lacuna. that removing to provideanuninterruptedand continuouschainofinputtaxcredit.UnderGSTlaw,ITC definitely is regime. GST ITC present the in available admissible todealersingoods.InputTaxCreditofCST,Entry Tax,LuxuryTaxisnot the otherhandcanbeavailedonlybymanufacturersandservice providersanditisnot providers cannotclaimVATcredit.ITCofCentralExciseduty, ServiceTax&CVD,on the preGSTsetup,ITCofVATisonlyavailableto the dealers.Manufacturersandservice CENVAT CreditandVATcanbeseparatelyavailedin thepresenttaxstructure.In stage taxwithcreditatvariousstagesofsupplychain.Input TaxCredit(ITC)informof The basicideabehindthemammoth exercise of introduction of GSTistoprovideformulti MECHANISM OFINPUTTAXCREDITUNDERGST money intheeconomy. as envisagedundertheModelGSTLawandtohighlightimpactofsuchbarriersonblack study themechanismofInputTaxCreditincludingproceduralandtechnologicalbarriers tax liabilityhavebeencoveredinvariouspapersonGST.Theobjectiveofthispaperisto Provisions relatingtocrossutilizationofinputtaxcreditanditsimpactonreductiontotal enforcement andwouldblocktheclandestinemethodsoftaxevasioninnewregime. states). Further,intensiveuseoftechnologyinadministeringGSTwouldraisethelevels reduced toanannualturnoverRs.20lakhs(Rs.10forbusinessesintheNorth-Eastern differentiated taxpolicywouldberemovedandthebasicexemptionthreshold above instances indicate difficulty in tax administration coupled information asymmetry in been highlysusceptibletoevasionwiththeproductsattractinghighdutystructure.The products suchasGutkhaandKhanibeingintheunorganizedsectorhavetraditionally of consumerproductsorgoodsmeantformassconsumption.ManufacturersTobacco come tonoticewhereeventhereputedmanufacturersindulgeinundervaluationcase evasion. Onanalyzingthedataofsearchesconductedbydepartment,instanceshave available toenduser,clearancewithoutpaymentofdutyhasbeenthepreferredmodetax the CBDTAnnualReportsthatinpresentsetuptransactionswhereCENVATisnot It hasbeennoticedin two, costoftaxevasionbeingcheaperthancompliance. primarily contributetohigherevasionoftaxes,oneweakenforcementtaxlawsandthe Studies havefoundthatamong many reasons of evasiontaxesinIndiatworeasons blue fortaxevaders. since theyear2000butnewformofinputtaxcreditunderGSTcanbeaboltfrom GST would be a revolutionary step to redefine the policy mechanism. Under the GST setup unorganized economy leading to mis-utilization of exemptions and benefits. exercise inthenewtaxregime. can makefinancial statementsaverydifficult themanipulationof the booksofaccount. The rightadministrationoftheGSTtechnology reform tocheckmisreportingornon-reportingofthetransactionsin GST willnotonlymake Indiaaonetaxnationbutwillalsobebiggest Input Tax Credit is not something new; the benefit of tax credit has been available master strokeinformofGSTinputtaxcreditsystemisyettocome.Theconcept emonetisation isbeingconsideredasaclassicmoveagainstblackmoney,butthe PART-II : Article on GST JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 67 66 JANUARY 2017 I CHARTERED SECRETARY ie b 1t o te vr mnh Te SR2 om is a return form GSTR-2 The month. the every of 10th by filed GSTR-1 and basis, outward suppliesmadebythe taxpayer. GSTR-1 is required to on a monthly GSTR-2. TheproposedGSTR1formwouldcontaindetailsof assessee every by filed to Under theproposedGSTregime,twoformswouldberequired GSTR-1 ANDGSTR-2 ER-3 returns. This has left a lot of scope for fictitious credit. him todisclosethedetailsofsuppliersinvoiceinhisER-1/ER-2/ supplier, whichcanbesubjectedtoscrutiny.Itisnotrequiredfor the presentstructureisrequiredtomaintaininvoicesofhis during theperiodalongwithotherdetails.Theassesseein reports inthereturnsdetailsofCENVATcreditutilized manufactured andclearedduringtheperiod.Theassesseealso quantity at regularintervals,reportingtheassessablevaluesand CENVAT returns(informsER1,2,3asthecasemaybe) in certaincases.Theassesseeisrequiredtosubmitthemonthly requirement ofreceiptinthepremiseshashoweverbeenrelaxed provider andonpaymentofinvoiceincaseservicetax.The goods inthepremisesofmanufacturer/dealerorservice on goodsandservicesiscreditedreceiptofinputscapital a CENVATCreditRegisterwheretheamountofeligible is notrequired.Therecordsofinputtaxcreditaremaintainedin S o rvre hre Tee eal wl as b rfetd in reflected be also will details These charge. reverse on GST different fromthelocationofrecipient), amountofsupplyattracting place is goods orservices(onlyifthe of charged, Placeofsupply the rateandamountofIGST, CGST, SGSTandAdditionalTax for goodsorServiceAccounting Code( HSN/SAC), Taxablevalue, Invoice No.,Date,Value,Harmonized SystemofNomenclature complete detailsofeveryinvoice raisedbyhimwhichincludes required to submit assessee is While submittingGSTR-1every shall alsobefurnishedinGSTR-2. and quantumthereofpurchasesfromunregisteredtaxpayer that arenotauto-populated,i.e.importofservices,eligibility ITC between 12thto15thdayofthemonth.Furtherotherdetails / debitnotecreditnote,notsubmittedbycounter-partysupplier, purchaser howeverhasbeengiventhefacilityofaddinginvoices 1 ofcounter-partysupplier,onorafter11thdaymonth. The GSTR-2 wouldbeautopopulated,onthebasisofGSTR- purchaser. the GSTR-1 of the submission after days five assessee the by for inwardsupplies/purchasesreceived.Thisistobesubmitted the GSTR-1 would be auto populated in GSTR-2 to be filed by the Model GST Law is that details of invoices filed by the supplier in form i.e15thoftheeverymonth.Themostinterestingpart CHARTERED SECRETARY I JANUARY 2017 present structureandproposedGSTstructure: h floig s cmaaie al o te eun fld n the in filed Returns the of table comparative a is following The GSTR-2 whichisareturnoninwardsupplies. .Detailsof 9. Detailsof 8. Detailsof 7. Auto 6. Auto 5. Typesof 4. Numberof 3. Frequency 2. Natureof 1. No. S. INPUT T debit notes credit notes/ duty paid goods intermediate of fields Population on login basic details population of assesses different Forms for filed Forms tobe of Returns Reported ProposedStructureunder to be Transactions PresentStructure Particulars Ax CREDIT U NDER GST- ANOTHER BACkLASH referred toin8above. consolidated amount but includedinthe Not providedseparately provided. current accounttobe CENVAT creditor of dutypaidthrough Consolidated amount provided. payment ofdutytobe or receivedwithout goods transferred Details ofintermediate Not available Not available VAT Returns(Monthly) submission) providers (sixmonthly ST-3 forservice submission) industries (quarterly E.R-3 forsmallscale goods inDTA E.R-2 forSEZsclearing E.R.1 formanufactures Five One Monthly and Utilized CENVAT Credittaken of goodsanddetails Production andRemoval provided foreachinvoice. and amounttobeseparately tax collectedintermsofrate CGST, SGST,Additional wise anddifferentialtaxIGST, notes tobematchedinvoice Details ofcreditnotes/debit separately tabulated. more thanRs.2.5lakhstobe customer withinvoicevalue Interstate suppliestoa provided foreachinvoice. and amounttobeseparately tax collectedintermsofrate CGST, SGST,Additional provided alongwithIGST, HSN andtaxablevaluetobe issued, date,no.,value, person towhominvoiceis GSTIN oftheregistered outward suppliesincluding Invoice wisedetailsof No suchdetailsrequired. from counterpartyreturns. earlier willbeautopopulated invoice partialcreditavailed credit andITCreceivedon periods, ISDcredit,TDS inward suppliesinearliertax credit notes/debitnotes, reverse charge,detailsof dealers, suppliesattracting inward suppliesbyregistered In GSTR-2thedetailsof login. taxpayer auto-populatedon The GSTINandNameof assesses. to besubmittedmonthlybyall and PurchasesReceived GSTR-2 forInwardSupplies made bytheTaxpayer;and GSTR-1 forOutwardSupplies Two standardizedforms Two Monthly Received Supplies andPurchases the TaxpayerandInward Outward Suppliesmadeby GST ON BLAC 67 k MONEY

ARTICLE INPUT TAx CREDIT UNDER GST- ANOTHER BACkLASH ON BLACk MONEY

10. Nil rated, Covered in details of Classified item wise for exempt manufacture, clearance interstate and intrastate E-LEDGERS UNDER GST transactions details. supplies to registered persons and to consumers. The novel concept of accumulating the credit of input tax admissible 11. Export Covered in details of Classified invoice wise without to every registered taxable person in Electronic Ledgers has been transactions manufacture, clearance payment of GST and with introduced in the Model GST Law. Once an assessee will register details. payment of GST. on the GST portal called GSTN, two E-ledgers would be generated under its registration number. They are Electronic Credit Ledger ARTICLE and Electronic Cash ledger. Both the ledgers can be viewed by a With one to one invoice wise auto population, submission of details tax payer on the portal. of debit notes/ credit notes, exempt goods, GST has plugged Electronic credit ledger: means the input tax credit ledger in in all scope of manipulation, fake bills and excess utilization of electronic form maintained at the common portal for each registered CENVAT Credit. Secondly, it would also handle the tax evasion by taxable person. All the input taxes, CGST, SGST, IGST will be over claiming expences. The tax payer would not be able to inflate accumulated in electronic format in this ledger on the common portal the manufacturing cost or claim any indirect expences in form of of GSTN. Input Tax Credit as self-assessed in monthly returns will advertising, travelling, hotel etc as both goods and services are be reflected in the ITC Ledger. The credit in this ledger can be used being clubbed into one tax. In this way the mechanism of GST has to make payment of tax only and no other amounts such as interest, been planned to be so technology driven that it would not leave penalty, fees etc can be paid by debiting this ledger. any scope for over invoicing and fictitious credit. Electronic cash ledger: The existing Personal Ledger Account under the Excise and Service Tax has been replaced with Electronic MISMATCH OF INWARD AND OUTWARD SUPPLY Cash Ledger under GST. The cash ledger will reflect every deposit The matching of GSTR-1 and GSTR-2 mechanism ensures that made towards tax, interest, penalty, fee or any other amount by a every inward supply furnished by the recipient for a particular tax taxable person by internet banking or by using credit/debit cards or period shall be matched to the corresponding outward supply National Electronic Fund Transfer or Real Time Gross Settlement furnished by the supplier in their respective returns. This is done or by any other mode. The amount available in the electronic cash to check the accuracy of the claims of ITC moreover the same ledger may be used for making any payment towards tax, interest, also needs to be matched with the additional duty of customs paid penalty, fees or any other amount payable under the provisions of under section 3 of the Customs Tariff Act, 1975 in respect of goods the Act or the rules made thereunder in such manner and subject to imported by him. such conditions and within such time as may be prescribed. Once verified i.e. if there is no discrepancy then the same is accepted and communicated to the recipient. On the other hand, CARRY FORWARD OF INPUT TAX CREDIT in case of discrepancies, the same is informed to both the parties IN TRANSITION PERIOD to make for necessary corrections in FORM GST ITC-1 through As per the Model GST law, a registered taxable person shall the Common Portal on or before the last date of the month in be entitled to take, in his electronic credit ledger, the amount of which the matching has been carried out. Discrepancy is made CENVAT credit carried forward in the return relating to the period available to both the supplier and the recipient separately, who ending with the day immediately preceding the appointed day, may make suitable rectifications in the statement of outward furnished, by him under the earlier law in the prescribed manner. supplies/inward supplies to be furnished for the month in which However the registered taxable person shall not be allowed to take the discrepancy is made available. Where the discrepancy is not credit unless said amount is admissible as input tax credit under rectified an amount to the extent of discrepancy shall be added to the CGST Law. Similarly a registered taxable person, shall also be the output tax liability of the recipient in his return in FORM GSTR- entitled to take, in his electronic credit ledger, credit of the amount 3 for the month succeeding the month in which the discrepancy is of Value Added Tax [and Entry Tax] carried forward in the a return made available. relating to the period ending with the day immediately preceding the On the whole any excess or shortage or duplication in claim of ITC appointed day, furnished, by him under the earlier law, not later than has to either be adjusted or supported by the relevant documents ninety days after the said day, in the prescribed manner. Similar to to arrive at the actual figures. Any unmatched mismatches CENVAT Credit the registered taxable person shall not be allowed therefore, will be highlighted and rejected in the GST mechanism to take VAT credit unless said amount is admissible as input tax and in this way, fictitious or excess credit is completely overruled. credit under this SGST Act.

A REFORMED REGIME AWAITED…. GST is going to be the biggest tax reform in various ways. The key task for the government at this stage is to design a tax policy to bring the unorganized sector into the tax net. The proposed reverse charge mechanism has to be effectively utilized to cover the unorganized sector. Digital payment systems will also aid in linking the unorganized sector into the GST network. GST will not only make India a one tax nation but will also be a biggest reform to check misreporting or non-reporting of the transactions in the books of account. The complete model of GST is digitally driven and requires a big investment in IT infrastructure and capacity building. The right administration of the GST technology can make the manipulation of financial statements a very difficult exercise in the new tax regime. CS

68 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 69 2 Research Corner

n A STUDY ON INFRINGEMENT OF FCRA, 2010 BY NGOs n OPTION PRICING IN VALUATION OF BUSINESS ENTITIES n ALL INDIA RESEARCH PAPER COMPETITION ON MERGER & ACQUISITION n RESEARCH COLLOQUIUM ON INDIAN COMPANIES ACT – DECODING UNSOLVED MYSTERIES

68 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 69 RESEARCH PAPER [email protected] Secretary, Noida Company Meenu Gupta,ACS by NGOs A StudyonInfringementofFCRA, 2010 70 7. 6. 5. 4. 3. 2. 1. The ResearchPaperisundertakenforthefollowingobjectives: OBJECTIVES OFTHESTUDY pertaining toutilizationoffundsandbyNGOs. seeks tofocusonamendedprovisions,itseffectNGOsandcaselawsviolatingtherules International, SabrangCommunications,tonameafew,violatedFCRArules.Theauthor compliance ofamendedprovisions.AsignificantnumberIndianNGOsincludingAmnesty licenses ofNon-GovernmentOrganisations(NGOs)toacceptforeignfundsduenon- FCRA, 2010beingeffectivefromMay1,2011madecancellationof10,118registration numerous tradeunions,studentbodies,youthcompanies,politicaletc.Thenew being inlatesixties1976wheninternationalfirmsweresuspectedofhavingrelationto of foreigncontributionbyindividualsorassesseescompanies,wasactuallycameinto Foreign Contribution(Regulations)Act,alawthatregulatestheacceptanceandutilization INTRODUCTION The needforhaving suchregulatorylawwas felt inthelatesixtieswhenforeign agencies the IndianGovernmentforms basisofFCRA. of implementingFCRA.Theprotection ofsovereignty,democracyandrepublicannature republic. TheMinistryofHome Affairs, GovernmentofIndiawasassignedtheresponsibility individuals functioninamanner consistentwiththevaluesofasovereigndemocratic the acceptanceanduseof foreign contributionsothattherecipientinstitutionsand hospitality for nefariousandanti-nationalactivitiesor purposes. The idea was to regulate The mainpurposebehindtheenactmentofFCRAwastocurb theuseofforeignfundsand WHYFCRAACT? I. accepting anygrantordonationfromthemothercompany. foundation ortrustwhichshouldgetFCRAregistrationbefore is administeredinIndia, however, is throughthecompany’s own then noFCRAisrequired. The mostcommonway inwhichCSR FCRA permission. Ifthecompanyworksdirectlywithbeneficiaries, company paysNGOstodocharitablework, NGOsmusthave depends ontheway CSRisimplemented. Ifaforeignsource system andmake alldealingstransparent. Also, FCRA’s applicability on rise, theneedistostreamlineandmoderniseonlineFCRA for violation. However, seeingthenumber ofFCRAviolationcases returns onlinewhilealso announcing disclosures and penalties receiving foreigncontributionmakingiteasierforNGOstofile Recent FCRAamendmentstightenedthenoosetowards NGOs Impact offoreigncontributiononIndianEconomy. analyzing impactonCountry’sEconomy. To haveaglimpseonforeigncontributionreceiptsinIndiaover lastfewyears,thereby Suggestions tostakeholdersandotherroleplayersunderthe Act. To enlistandbriefthecasesofviolationFCRAwithemphasis uponNGOs. To analysetheActwithrespecttoitsprosandcons To peepintorecentamendmentsintheAct2015 To workouttheneedofenactingForeignContributionAct. JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 71 70 JANUARY 2017 I CHARTERED SECRETARY scrt, cetfc srtgc r cnmc neet hs been has interest’ economic or or strategic interest’ scientific, ‘public interest’, ‘security, ‘national of definition no However, economic interestofthestate.” likely toprejudicially affect thesecurity,scientific, strategic or “detrimental tonationalinterest,likelyaffectpublicor stipulates thatNGOsmustnotuseforeignfundsforactivities FORNGOs The HomeMinistryhasdrawnupnewdraftguidelineswhich AMENDMENTSFCRA,2015–STICKYWICKET II. (Regulation) Act,2010cameintoforcefromMay1,2011. assent onSeptember26,2011andtheForeignContribution Contribution (Regulation)Bill,2010whileitreceivedPresident’s levels on27August2010,theParliamentpassedForeign several recommendationsattheStandingCommittee,RajyaSabha vide NotificationNo.GSR755(E)dated5thAugust1976.After 1976. TheBillwaspassedintheParliamentanditcameintoforce etc. ThecommitteepresenteditsreporttotheParliamenton6-1- councils, politicalparties,tradeunions,attorneygeneral,universities invited viewsandopinionsfromvariousstategovernments,bar committee held33meetingsatdifferentplaces.Thealso Manubhai ShahastheChairpersonofcommittee.Thejoint members ofRajyaSabhaand40LokwithShri Parliament in19.02.1974.Thejointcommitteeconsistedof20 24.12.1973. Thisbillwasforwardedtothejointcommitteeof (Regulation) Bill,1973wasintroducedinRajyaSabhaon Introduction of FCRA Bill -Finally the Foreign Contribution of theGovernment,PoliticalPartiesandOtherInstitutionsIndia. foreigners orforeignmoneytodictateinfluencethefunctioning was discussed.Itagreedthatthegovernmentwouldnotallow Houses ofParliamentandtheneedtoregulateforeignfunding etc. ThethenHomeMinisterin1969raisedthisissueboththe unions, studentbodies,youthorganisations,politicalorganisations including CIAweresuspectedofhavinglinkswithvarioustrade of activitiesthatareotherwiselegalunderIndianlaw. provided, openingthedoortoofficialactionagainstawholerange No. S. 3. 2. 1. economic interest.” state’s “security,scientific,strategicor national interestorprejudicialtothe used for activities detrimental to be not fundsreceivedwill foreign these formsbyNGOsstatingthat declaration istobeattachedwith uploaded ongovernmentportals. A funds, whichneedtobefilledand and disclosureofreceiptforeign registration, renewalofregistration It provides forforms new for for NGOsinIndiawithin48hours. regarding theentryofforeignfunds Require bankstodiscloseinformation already was. India even more difficult than it making thetaskofrunninganNGOin days,7 prescribed websitewithin agovernment or itswebsite on and toreportthereceiptofsuchfunds foreign fundstoregisterthemselves It requiresanyNGOsreceiving CHARTERED SECRETARY Additional /NewAmendedRules, 2015 I JANUARY 2017 1 crore,within30days. contributions inexcessofRs. details of to disclose mandated Earlier, bankswereonly end oftheyear. crore weretobenotifiedatthe excess ofRs.1 donations in rule underwhichonlyforeign The rulereplacestheolder Older Rules government.” with the there isdissentordisagreement into playwhenever over one’sheadthatcancome sword hanging is aperpetual so that there is theaimofputtingsuchthingsintodeclarations does not like by claiming it goes againstnationalinterest. This floodgates to government discretionto challenge anyactivity it the opens intodeclarations assertions “Putting suchvague added, NGOs tomake,theNGOsource wants government the economicinterestofstate’declarationthat ‘beneficial’ while everything an NGO does is seen at the outset there isapresumptionthatallthecorporatesectordoes the openlicenseothersectorslikecorporatesreceive.Here iron chainsofrestrictivecompliance.Thisisespeciallysogiven told, “ThegovernmentdoesnothavetobindNGOsaroundin Reacting tothenewdraftguidelines,headofamajorNGO anomalies intheiradherencetoFCRArules. license toreceiveforeignaidofalmost15,000NGOs,citing funds. Bytworecentorders,thegovernmenthadcancelled has already been actingagainst NGOs thatreceiveforeign The proposednewrulescomeatatimewhenthegovernment Gs liig ht h wr o ‘niainl foreign-funded ‘antinational, of work the that claiming NGOs The IntelligenceBureausubmittedareportonforeign-funded disclosure of additional information. As for the ‘nothing against government, theyalsohaveprovisionsthatrequirethe the with information file to required NGOsare which with the frequency The newruleshavenotonlyincreased raiain ad rds nos r al pr o ‘h people’ ‘the and havevoiceagency.” of part a all are unions trades and organisations of thepeopleandarebeneficiaries.NGOs,civilsociety the preserveofgovernmentalone.Governmentsaretrustees be identified,said,“Socialgoodandnobleintentisnot to not as apossiblethreat.”TheNGOrepresentative,whorequested NGOs to ‘take down’ Indian development projects,” stated: “A The report,titled“Concertedeffortsbyselectforeign-funded country. that itnowconsidersdetrimentaltotheeconomicinterestof the government moved swiftlyafterthisreporttoreinintheNGOs decline of23percentinthecountry’sGDPgrowthrate. The modified organisms,miningandotherbigprojects,hadledtoa NGOs’ workingonissuesrelatedtonuclearprojects,genetically intolerance and exclusionwhichseesNGOs and othersrushing These kindsofnotifications and thegeneralatmosphereof industries (oil,limestone)inthe northeast.” Narmada SagarandinArunachal Pradesh)andextractive industrial projects(Poscoand Vedanta),hydelprojects(at (CFPPs), geneticallymodified organisms(GMOs),mega power plants plants, uraniummines,coal-fired nuclear power stalling developmentprojects.Theseincludeagitationsagainst itself to an environmentwhichlends create centric issuesto Scandinavian countries)havebeennoticedtobeusingpeople- based intheU.S.,U.K.,Germany,Netherlands and significant numberofIndianNGOs(fundedbysomedonors 4. profiling them. are partofotherNGOs,tohelpin disclose whethertheirofficebearers and accounts, media social their NGOs willhavetorevealthedetailsof A STUDY ON INFRINGEMENT OF FCRA, 2010 71 BY NGOS

RESEARCH PAPER RESEARCH PAPER Act bringwith it thegoodaswellbadaspects intermsof Recent amendmentstotheForeign Contribution(Regulation) ANALYSIS OFFCRAACT,2010 III. non-compliance. to runalongwithanystrictaction thatthegovernmenttakesfor those fortheincometaxorservice taxlaws.Thiscampaignhas awareness campaignonvariousaspectsoftheFCRA,akin to the intendedbeneficiaries.Thegovernmentshouldrunastrong or checkstoseewhethercontributionsNGOsactuallyreach enough. Moreover,thereisacompleteabsenceofprovisions Penalties fornon-submissionofannualreturnsaren’tharsh of receiptandpayment,certifiedbyacharteredaccountant. FC-6, dulyaccompaniedwiththebalancesheetandstatement 17) oftheFCRAclearlymandatesfilingreturnsinForm 2010-11 and2011-12,asofOctober1,2014.Section18(rule mandatory financialreturns(FormFC-6)fortheyears2009-10, organisations registeredunderFCRA,about10,000hadn’tfiled nor dotheyhavethefundstoconductaudits.Of42,000 Many NGOsdon’thavesophisticatedfinanceandlegalteams, foreign fundinglicences,asitdeemsfit. show-cause noticeand,subsequently,suspendorcanceltheir NGOs don’tfileannual returns, the government can issuea and, subsequently,suspendorcancelitslicence.Ifthese provisions oftheFCRA,governmentcanpenaliseanNGO manner inwhichitwasutilised.Incaseofnon-compliancewith received, thepurposeforwhichitwasintended,and the amountofforeigncontribution,itssource,howitwas filing annualreportswiththehomeministry.Itmustalsoreport foreign contributionwithin30daysofitsreceipt,inadditionto Further, theNGOhastoreportcentralgovernmentany contributions canonlybeacceptedthroughdesignatedbanks. contribution hastoregisterwiththecentralgovernment.Such any NGOthatacceptsforeignFCRA, According tothe according totheprofitsshowninitsbalancesheet. exempted fromtax,acharitablecompanyhastopaytaxes, While societiesortrustsareliabletogettheirincome(donation) come underthepurviewofIncomeTaxAct,1961. NGOs society. Allsuch a a trustor company, comparedto charitable are high,asloansandadvanceseasilyavailabletoa consuming. Forcharitablecompanies,compliancerequirements time- and more complex under theCompaniesAct,2013,is under theseActs.However,registrationasasection8company are abletoregisterthemselveswithoutanyprofessionalhelp societies, donotinvolvealotofcomplexities.SmallNGOs,too, Formation andregistrationofNGOs,eitherastrustsor section 8oftheCompaniesAct,2013. concerned. Andcharitablecompaniesaresetupaccordingto Act, 1882,publiconesareregisteredunderthestatelegislation are registeredunderthecentralgovernment’sIndianTrusts or astategovernment’sversionofthelaw.Whileprivatetrusts registered undertheCentre’sSocietiesRegistrationAct,1860, societies, trustsandcharitablecompanies.Societiesareeither Primarily, India’s NGOs are divided into three segments Laws governingNGOs That in itself is against the ‘national interest’. to courtforprotectionareactionsagainstdemocraticprinciples. A STUDY ON 72 INFRINGEMENT OF FCRA, 2010 BY NGOS increase incompliancerequirements. • Both, ‘Registration’ and ‘Prior Permission’ shall be granted or • • Good • Ugly The definition of ‘foreign contribution’ includes various types • Under FCRA 2010, ‘Foreign Company’ is defined and under • Bad • rnfr ih Pir prvl. oee, h rls n this in rules the However, Approval’. ‘Prior with transfer now allowsuch permission underFCRA.FCRA2010will organizations whicharenot registerednorhaveprior transferredto be cannot contribution foreign Presently applications forPriorPermission. application. Currentlythistimeframeisstipulatedonlyfor rejected withinaperiodof90daysfromthedatereceipt foreign contribution. provided onlyonebankaccountismaintainedforreceivingall bank accountsformanagementandutilizationofFCRAfunds be allowedtomaintainmultiple Charitable organizationswill excess of 50% shall be defrayedwithprior approval ofthe excess of50% shall exceed 50%andanyexpenditure ofadministrativenaturein not Section 8statesthattheadministrative expensesshall company ifmorethan50%ofitsequityisheldbyforeigners. included. However, u/s 2(j) ‘foreign source’ includes an Indian the definitiongivenu/s2(g),Indiancompaniesarenot regard areyettobeframed. of a political nature”. The term ‘Political Nature’ has not been added. Ofparticularconcernistheinclusionof,“Organization foreign contribution.Totheexistinglistafewmorehavebeen Section 3specifiespersonswhoareineligibletoreceive lakhs. NGOarethereforeurgedtoexercisecaution. prohibits tradeorbusinessrelatedreceiptsaboveRs.10 with theamendedsection2(15)ofIncomeTaxActwhich treated aslocalincome.Howeverthisprovisionisinconflict foreign contribution.Inotherwords,suchreceiptscanbe business, tradeor commerce shall not be consideredas commerce. Thissectionstatesthatanyfeeorcostagainst or trade business, from income excludes 2(h) section receipts andvoluntarycontributions.Infact,Explanation3to of foreignreceipts.Itdoesnotdistinguishbetweencommercial defined. JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 73 72 JANUARY 2017 I CHARTERED SECRETARY the HomeMinister, KirenRijiju. such associationsandgivingthem adequateopportunity,asper 10,118 inMarch,2015afterissuance ofshow-causenoticesto registration of4,138associations wascancelledinJuly,2012,and annual returns continuously for three years. Consequently, associations in2011and10,343 associationsin2014fornotfiling 1, 2011.Sincethen,notices wereissuedtoaround21,000 Contribution (Regulation)Rules,2011,cameintoforcefromMay INFRINGEMENTOFFCRA Foreign Contribution(Regulation)Act,2010,(FCRA)and CASESOFNGOsDEALING WITH IV. • • • • • • • • • f h tr ‘rsctd i o teedu cnen ic it since concern tremendous of is ‘prosecuted’ term the of aimed atconversionorcreatingcommunaltension”.Inclusion have beenprosecutedorconvictedforindulginginactivities Take forexample,underSection12,“theapplicantshouldnot rejecting applicationsforpriorpermissionorregistration. Sweeping powershavebeengiventotheauthoritiesfor them. of otherNGOs,tohelpinprofiling accounts, anddisclosewhethertheirofficebearersarepart NGOs willhavetorevealthedetailsoftheirsocialmedia state’s “security,scientific,strategicoreconomicinterest.” activities detrimentaltonationalinterestorprejudicialthe not beusedfor stating thatforeignfundsreceivedwill declaration istobeattachedwiththeseformsbyNGOs anduploadedongovernmentportals.A need tobefilled registration anddisclosureofreceiptforeignfunds,which It providesfornewformsregistration,renewalof foreign fundsforNGOsinIndiawithin48hours. Require bankstodiscloseinformationregardingtheentryof difficult thanitalreadywas. making thetaskofrunninganNGOinIndiaevenmore website oragovernmentprescribedwithin7days, themselves andtoreportthereceiptofsuchfundsonits It requiresanyNGOsreceivingforeignfundstoregister period. certificate within6monthspriortotheexpiryof5years proposed Act,allNGOsshouldapplyforrenewalofthe of enactment ofFCRA 2010. Accordingto Section 16 of the registration attheendofperiod5yearsfromdate be requiredtorenewtheir existing NGOswill words, all for thefirst5yearsfromdateofenactment.Inother the existingNGOs However, theActhasprovidedrelieftoall Registration underFCRAwillrequirerenewalevery5years. Central Government. registered status alive by simply filing ‘Nil’ returns despite not NGOs havebeenenjoyingthebenefitofkeepingtheir including lackofactivityforaperiod2years.Currently FCRA Registrationmaybecancelledforvariousreasons proceeding goingonregistrationcouldbedenied. implies thatevenifthereisafalseorfrivolouslegal contribution andtheFCassetstillregistrationisrestored. take chargeoftheforeign government authoritiesshall vest withsuchauthorityasmaybeprescribed.The thereof (createdsincetheinceptionoforganization)shall the foreigncontributionandassets registration certificate,all FCRA 2010further providesthat after cancellation of cancellation. prior permissionforaperiodof3yearsfromthedate cancelled /revokedshallnotbeeligibleforregistrationor any organizationwhoseFCRAcertificatehasbeen Also, receiving orutilizingforeignfundsformanyyears. CHARTERED SECRETARY I JANUARY 2017 amounts todiversionoffunds. expense toallegethatreimbursementofshared ridiculous reimbursements thatweremadetimetobySCPPL. It is trustee ofCJP,SPCCLagreedforasharedexpensestowards In 2002,whentheCJPwasformed,uponarequestfrom the SCPPL wasforthepurposeofreimbursementsharedexpenses. that the“moneydiverted”fromSabrangTrustand CJP tothe actually consultancyfeespaidbyFordFoundation.Heclarified under thepurviewofFCRAandthereforesaidamount was Foundation wereconsultancycontractsandthereforedidnot fall contention claimingthatSabrangCommunicationsandFord Javed Anand,Teesta’shusband,however,refutedtheCBI’s in sharpcontrasttotheFCRAnorms. which thetwodirectorsevencontributedascolumnists,is oad pbiain f proia ‘omnls Cma’ in Combat’ ‘Communalism periodical a of publication towards received andutilisedmaintainedbyherfundswere there wasnoexclusivebookofaccountsforforeigncontributions registered underFCRA.Onquestioning,Teestarevealedthat Teesta’s firmandwhyforeigncontributionwasmadetonot to a grant know whatpromptedthemtomake representatives to September 2006.TheagencyneedtoquizFordFoundation Communications andFord Foundation inApril 2004and Under thescanneraretwocontractsenteredbetweenSabrang under thelaw. contribution withtheirdomesticfundsandcommittedoffence considered thattheyhave“surreptitiously”mixedforeign FCRA norms.Theagencysaidthehighcourtoughttohave frequently transferredtoSCPPLalsoincompleteviolationof Citizens forJusticeandPeaceSabrangTrust--were Further, foreignfundsreceivedbythecoupleintheirtwotrusts-- Union HomeMinistry. the Actasorganisationneededtoseekpriorapprovalfrom amount ofUS$2.90lakhwas,therefore,receivedinviolation registered underFCRAforcollectingmoneyfromabroadandthe FCRA provisions.Accordingtotheagency,SCPPLwasnot received aroundUS$2.90lakhinforeigndonations,violating against SetalvadandAnandallegingthatherfirmSCPPLhad Facts ofthecase:CBIhadonJuly8,2015registeredacase i. minister’s statement. associations andgivingthemadequateopportunity,asperthe March, 2015,afterissuanceofshow-causenoticestosuch 4,138 associationswascancelledinJuly,2012,and10,118 prior permissionundertheFCRA.Consequently,registrationof utilisation offoreigncontributionwithoutobtainingregistration returns andofRs51.99lakhon24associationsforreceipt 341 associationsforlate/non-submissionofmandatoryannual In 2014,penaltyamountingtoRs5.20crorehasbeenimposedon II. received andspentincontrasttoprovisionsofFCRAnorms. from US-basedFordFoundation.Thesefundswereallegedly “foreign contribution”ofUS$2.9lakh(nearlyRs.1.8crore) Communications &PublishingPvtLtd(SCPPL)received Bureau of Investigation (CBI)claimsTeesta’s Sabrang NGO: FCRAviolationcase:TheCentral Teesta Setalvad’s utilization offunds: LawyersCollective, apublicinterestNGO Lawyers Collective,anNGO- ViolationunderFCRAfor A STUDY ON INFRINGEMENT OF FCRA, 2010 73 BY NGOS

RESEARCH PAPER RESEARCH PAPER iii. inspection reportofMinistryHomeAffairs. using moneyreceivedfromabroadoutsideIndiaasperthe violation ofSection7theFCRAasthereisnoprovisionfor and charitydinnersindifferentpartsoftheworld.Thisisa Collective forairtravelandotherexpensestoattendconferences A large sum of foreign contribution was used by Lawyers that parliamentaryinstitutionsarenotinfluencedinanymanner. acceptance offoreigncontributionbyanymemberpartyso of the FCRA Act. Section 3of the FCRA clearlyprohibits parliamentary institutionsisinclearviolationoftheletterandspirit lobbying withMPsandtherebyinfluencingthepoliticalprocess The utilisationofForeignContributionforadvocacyindulgingin advocacy with67MPsinApril2010and99August2010. and advocacywithMPs.Rs.13lakhwasspentonmedia other membersofLawyersCollectivefordraftlegislationmeetings board andlodgingofIndiraJaising’shusbandAnandGrover A largeamountofforeigncontributionwasspentonairtravel, of theFCRA,2010. dharnas byutilisingforeigncontributionisaviolationofSection8 conveyance tostageaprotestfortheHIV/AIDSBill.Toholdpaid outside theLawMinistry.TheywerepaidRs200eachforfoodand October 21,2009forpaying250peopleholdingadharna Rs 88,978waspaidtoDelhiNetworkofPositivePeopleon parliamentarians aresomeofthemainviolationsFCRA. donations outsideIndia,spendingforeignmoneytolobbywith contributions whileworkingforthegovernment,sendingforeign Paying volunteerstoorganisedharnas,receivingforeign were outsidethelistofitemsforwhichithadbeencollected. found thatalargepartofthemoneywasspentonactivitieswhich of Rs32crorebetween2006and2014.TheMHAinspectionteam Facts ofthecase:LawyersCollectivereceivedforeigncontribution A STUDY ON 74 accordance withlaw. fresh donationsshouldbeused foritsaimsandobjectives,in allowed theNGOto fresh domesticdonationsfor its day-to-dayfunctioning.Italso to usetwoofitsaccountsforthe purposeofreceivingandutilizing functioning. Thecourthadon27 May,2015allowedGreenpeace receiving andutilisingfreshdomesticdonationsforday-to-day 27 bythecourtwhichallowedittousetwoofitsaccounts for the “arbitrarydecision”ofMHAandwasgrantedrelief on May accounts. GreenpeaceIndiathenmovedanapplicationchallenging registration andfreezingofitsforeigndomesticcontribution moved bytheNGOchallengingsuspensionofitsFCRA domestic contributions.Theaffidavithasbeenfiledinaplea Greenpeace hadviolatedFCRAbymixingitsforeign and Facts oftheCase:Theministryhomeaffairsclaimedthat Greenpeace India: other membersofmarginalisedgroups. women andchildren,workersintheunorganisedsector provide expertlegalassistancetotheunderprivileged,especially working intheareasofhumanrights,legalaidandlitigationto IDBI, ICICIandYesBankhadfrozentheNGO’saccounts. informing theauthoritiesconcerned.OnMHAdirections, opening five accounts to useforeign donations without registration oftheNGOsayingithadviolatednormsby INFRINGEMENT OF liquidate itsfixeddeposits,saying theseand InApril2015,theMHAsuspended FCRA, 2010 BY NGOS suspended onJuly31,2014. proper vouchers”forcashpayments.ItsFCRAregistrationwas 2012-13 withinprescribedperiod.Ithadalso“notmaintained tofurnishdocumentsfor 2006-07 and2008-09besidesfailing The organisationdidnotfilethemandatoryannualreturnsfor Catholic Churchinthestate,recognisesKCCRS. The KeralaCatholicBishop’sCouncil(KCBC),theapexbodyof (FCRA) norreceivedpriorpermissionforreceivingsuchmoney. neither registeredunderForeignContribution(Regulation)Act “Jeevana Samridhi”,inErnakulamdistrict.Samridhi”is between May2008andFebruary2012toanotherorganisation the entire”foreigncontribution,ie.Rs34,19,944itreceived Facts ofthecase:KCCRSwasfoundtohavetransferred“almost v. v. iv. Rs 12,000crorereceivedin2011-12, accordingtotheanalysisof child-welfare togetherreceivedRs 4,500crore($690million)ofthe 200 countriesidentifiedbythe World Bank.Health,educationand India receivesforeigncontributions from165countries,ofroughly Rs 5,000crore($770million)over thepastfouryears. crore ($1.6billion),whileeachofthefivestatesreceivedclose to after Telangana)states.OrganisationsinDelhireceivedRs10,500 received byorganisationsinthenationalcapitalandthesefour (five years from2011-12to2014-15,Rs29,000crore($4.5billion) was 45,300 crore($7billion)inforeignfundingtoIndianNGOsover four together got65percentofforeignaidcomingtoIndia.Of Rs Delhi, TamilNadu,AndhraPradesh(unified),KarnatakaandKerala are likelytodropthisfiscal. 10,000 NGOregistrationscancelledin2015,foreigncontributions compared toRs12,000crore($1.8billion)in2013-14,but with (NGOs) doubledin2014-15toRs22,137crore($3.4billion) FCRA. ForeignfundingforIndiannon-governmentalorganisations FCRA and12,980crorehavebeenreceivedinyear2013-14under At presentatotalof33,346associationsareregisteredunder V. NUMBERINGOFFOREIGNFUNDINGINTOINDIA vii. vi. unregistered NGOsunderFCRA. society donatedmoneytoIndian working closelywithcivil found thatitviolatedrules. Church inKeralatocollectforeigncontributionsafteraprobe the permissiongrantedtoanorganisationunderCatholic Open SocietyFoundations:USNGO: under CatholicNGO: Kerala CatholicCharismaticRenewalServices(KCCRS) National EndowmentforDemocracy: World MovementforDemocracy: Indian NGOsnotregisteredundertheFCRAAct. democratic institutionsaroundtheworldhasdonatedto foundation dedicatedtothegrowthandstrengtheningof and rallies ofanti-nationalnature”. and rallies Home Ministry.TheOSFwasactiveparticipantin“protests to unregisteredfirmswithoutobtainingpriorclearancefrom etc. FCRAstatesdonorscannolongersendmoneydirectly for religiousconversion,climatechange,democraticrights, unregistered organisationsandrecipientswereaskedtowork justice, andeducation.Itallegedlydonatedmoneyto donates toNGOsworkingintherealmsofmedia,rightsand GeorgeSoros Foundation (OSF)promotedbyUSbillionaire JANUARY 2017 TheUnionHomeMinistryhascancelled I CHARTERED SECRETARY The US-basedNGO A US-basednon-profit

Open Society CHARTERED SECRETARY I JANUARY 2017 75 74 JANUARY 2017 I CHARTERED SECRETARY II. I. Impact onIndianEconomy crore in2011-12. collected Rs870crore,NGOswithresearchactivitiesgot539 (Regulation) Act while NGOs associated withreligiousactivities the latest2011-12annualreportofForeignContribution by the by protect an The Tamil Nadu(10,068). Andhra Pradesh(1,420),followedbyUttar(1,147)and 2015. Mostnumberofregistrationswerecancelledfromstate the registrationoftheseNGOsin had cancelled government the returns forthefinancialyears2009-2010,2010-11and2011-12, ofannual The uniongovernmentallegedthatduetonotfiling registrations ofmorethan10,000NGOsacrossthecountry. In secondhalfof2015,theIndian Nadu, KarnatakaandWestBengal. States —Delhi,AndhraPradesh,Maharashtra,Kerala,Tamil In fact,80percentofthisfundingwenttoNGOsbasedinseven Rs. 12,000crorereceivedby2,301suchNGOsduring2013-14. donors. Thisamountwas83.3percent(nearlydouble)morethan figure) reportedreceivingmorethanRs.1crorefromforeign foreign fundingaboveRs.22,000crorein2014-15.TheNGOs(in A totalof3,068non-governmentalorganisations(NGOs)received

to theirownfoundation. clearance. This appliestodonations bysuchcompanieseven obtained FCRA have that donations onlytoNGOs make Act 2010,companieswithover 50% foreignshareholdingcan own foundations.UndertheForeign Contribution(Regulation) Infosys, HDFC,ICICIandHindustan Leverhavestartedtheir work withorpayNGOs,schools orhospitals.Somelike shareholding. TocarryoutCSRprogrammes,companies contributions of Indian companieswith largeforeign Impact onCSRContribution:FCRAnormsmayhurt increase theirdependenceuponthestate. have aseriousimpactupontheworkdoneaswell and thegovernment’sdecisiontorestricttheirfinancescould have alonghistoryofbeingdevelopmentpartnersthestate welfare inIndia.NGOs have onphilanthropicworkandsocial license) raiseistheeffectthatreducedforeignfundingwill serious questionthatthesenumbers(cancellationof10,000 Although theamountofforeignfundingisonrise,but most prominent CHARTERED SECRETARY Foreign Funding of NGOs raised in 2014-15 Foreign Fundingraised ofNGOs Ministry ofHomeAffairs(MHA)on the organisation thatcampaignsto environment,

of the cancellations wasGreenpeace, I JANUARY 2017 whose licence wascancelled government 2015. September 3, received more than Rs.one NGOs which crore funds. cancelled IV. III. foreign contributionintheEconomy. funding, andsocialinitiativesacrosstheboard,thereby FCRA curtailsit,affectingcompanies,NGOsthatseekcorporate The CompaniesActmaymandatesocialresponsibility,butthe volunteering. Italsoleavesoutsomereceiverssuchashospitals. officers. FCRAdoesnotcoveruseoffacilitieswithoutcharge,or parties, media,andgovernment funds cannotbegiventopolitical FCRA restrictionscomeintoplay.These the usual contribution. All be foreign the CSRgrantandinterestonthesefundswill latter shouldhaveFCRAregistrationorpriorpermission.Secondly, mother company.IfthefoundationcontractsanotherNGO, registration beforeacceptinganygrantordonationfromthe company’s ownfoundationortrust.ThesetrustsshouldgetFCRA in whichCSRisadministeredIndia,however,throughthe beneficiaries, thennoFCRAisrequired.Themostcommonway have FCRApermission.Ifthecompanyworksdirectlywith source companypaysNGOstodocharitablework,theNGOmust applicability dependsonthewayCSRisimplemented.Ifaforeign foreign companiesorFIIsisconsideredasource.FCRA’s entity withover50%investmentfromforeigners,PIOs,OCIs, whose shareholdingpatternvariesbytheday.UnderFCRA,any FCRA iscomplex,andespeciallysoforpubliclyheldcompanies on themtofund. also suffer,andinturnthesocialworkmanycommunitiescount source of funds.Companieswithlargeforeign shareholding may of thelaw’sblurrinessandinherentsuspicionanyforeign compliance thisyear(2015),NGOsmightnotbetheonlyvictims As theministryofhomeaffairstightensnooseonFCRA showed thatless than10%ofthe29-lakhregistered NGOsacross of CentralBureauInvestigation beforetheSupremeCourt their returnsonline,reducinghuman interfacetozero,thereport Contribution RegulationRules making iteasierforNGOstofile Although in2015,thehome ministrysimplifiedtheForeign VI. SUGGESTIONSTOSTAKEHOLDERS Regulators, NGOs,Govt,Professionals, IndianCitizens) to theCountry. be asourceofanotherforeigncontribution rural India.Thiswill PM in2014its2019targetofbuilding12croretoilets more aidfortheSwachhBharat(Gramin)Projectbroughtby also attract one moreactivityunderCSRactivity,thiswill foreign corporates,NGOsandPSUs.Withanaimtobring 2010 for accepting foreigncontributionin cash or kind from exemption totheSwachhBharatMissionfromFCRA, Impact onSwachhBharatAbhiyan:MHAhasallowed books anditsbeliefsarewrong. howotherreligionsholy regarding otherreligionsbytelling Islamic State through hisspeeches, creating prejudice 50 youthfromdifferentCountriestojoinglobalterroroutfit, Activities PreventionAct(UAPA),whoinfluencedasmany Salafist preacherZakirNaik,facingabanunderUnlawful by NGO run Research Foundation,an the Islamic being of having negativeimpactoneconomicgrowth.Theincidence payment ofsalariesbyforeignNGOstoactivists petitions ofIndianNGOsandtheiractivists,undisclosed activities”, whichincludefundinglegalcostsofbail,writ NGO licensesareduetoacceptingfundsfor“prohibited Funds acceptedforprohibitedactivities:Cancellationof A STUDY ON INFRINGEMENT OF (Including FCRA, 2010 75 BY NGOS

RESEARCH PAPER RESEARCH PAPER ii. i. charged undertheanticorruptionlawincaseofirregularities. bearers ofsuchNGOswillbetreatedas“publicservants”and under theambitofLokpalasnewrules,office donations aboveRs10lakhfromabroadhavebeenbrought receiving morethanRs.onecroreasgovernmentgrantand in ordertokeepacheckonthefundingofNGOs,organisations Also, non-compliance. in caseof while imposingheavypenalties amendments alsoincreasedthecompliancerequirements The the countryfiletheirannualincomeandexpenditurestatements. A STUDY ON 76

Information Actsincetheyare notpartoftheGovernment. their accounts.Theyarealso notcoveredbytheRightto hence ComptrollerandAuditor GeneralofIndiadonotaudit accounts. Also,theyarenot part oftheGovernmentand since only10%ofregistered NGOs disclosetheirannual (sources andusesoffunds) theentirespectrumofNGOs picture ofthefinancing The usersdonothavethefull Suggestions toIndianNGOs: man’s burden.” foreign fundingofourNGOs.Wearenomorethe“white more honestandimportantthattheGovernmentofIndiabans about 13,000arecompletelyparalysed.Hence,itwouldbe For ahandfulofNGOswhomaybedoingsomethingwrong, help savebothfromharassment. responsible tobuildatrustbetweendifferentideasofIndia society, people’sinterestandcorporateinterests.Bothare funds from overseas toaid in the economy, butnotforcivil balance betweenreligiousfreedomanditsmisuse,accepting find a are accountableto Govt. Indian Citizensand All and affiliates areprotectedbutothersharassed. and affiliates representatives, politicalandsomereligiousorganisations this, weseeatrendwhereGovt.officersandelected but nonoticehasbeenissuedtothembytheGovt.Following doesn’t permitpoliticalparties to receiveforeigndonations, foreignfundingandlikeothermajordemocracies,India illegal major politicalparties,theBJPandCongressreceive Supreme CourthasadmittedapetitionsayingthatIndia’stwo of FCRAAct,theincometaxandservicelaws. professionals tomakethemawareofcomplianceprovisions for smallNGOswhodonothavesufficientlegalfundstohire beneficiaries. Govt.shouldrunstrongawarenesscampaigns whether contributionstoNGOsactuallyreachtheintended There isacompleteabsenceofprovisionsorcheckstosee Suggestions toGovt.&IndianCitizens: INFRINGEMENT OF FCRA, 2010 BY NGOS iv. iii. • • • REFERENCES work andsocialwelfareinIndia. have onphilanthropic the effectthatreducedforeignfundingwill Service Taxlaws.Theseriousquestionsthesenumbersraise is various aspectsofFCRAakintothoseforIncomeTax and audits. Governmentshouldrunastrongawarenesscampaign on sophisticated financeandlegaltermsnorhavefundstoconduct 2015 andtighteningtheFCRAnomrs.ManyNGOsdidn’thave India bycancellationof10,118registeredassociationsinMarch FCRA funds,itwillbringdownthereceiptsofforeignfunding into maintain multiplebankaccountsformanagementandutilization of Although recentamendmentsallowedcharitableorganizations to CONCLUSION

NGOs comingunderMHAscrutiny. every law,theirrolecanreducethenumberofregistered Since professionalsaretrainedtohandlecompliancesunder registered NGOsofthecomplianceprovisionsunderAct. defaulted inperformingtheirpartofdutyandguidingthe Chartered Accountants,CompanySecretaries,etc.whohave returns, allremindtheresponsibilityofprofessionalsincluding accepting funds for ‘prohibited activities’, non-filing of annual registered NGOlicensesduetomisutilisationoffundsand The figuresdisclosingthenumberofcancellations custodian, an ‘umbrella legislation’ being the MHA to monitor registering NGOsunderFEMAsothatthereisonlyone take actionagainstthem.Thefinanceministryshouldstop MHA isunabletomonitortheflowoffundseffectivelyand of FCRAnorms.SinceFEMAisregulatedbyfinanceministry, offices inIndiatodisbursefundsNGOsviolation liaison their and using FEMA registered under and theUSare NGOs fromEurope donors andseveral Many international Suggestions toProfessionals: flow offoreignfundstotheseorganisations. Suggestions toRegulators: Information. credentials asrealbelieversintransparencyandRightto go alongwayinestablishingtheir This insistencewill including thebreak-upofadministrativeandotherexpenses. sources andusesoffundsvoluntarilyontheirwebsites, To enhancetheircredibility,NGOneedstopublish harvesting” exerciseofforeignEvangelicalgroups. tofillupthestatistical“Soul propaganda conversion NGOs whospenditonestablishmentexpensesand required forEuropeansorAmericanstosendmoneyour and therearemillionsofcharitymindedIndians.Itisnot Indian NGOsshouldaccessfundsfromdomesticsources sources topreventthemfrompropagatingglobalagenda. the moreimportantthatIndianNGOsarefinancedby the HomeMinistryduetonon-compliantFCRAnorms,itisall Seeing theincreaseinnumberofNGOlicensecancelledby Right toInformation Act Financial Express,EconomicTimes, thebusinessnewspapers Foreigners Division,FCRAwing http://www.mha.nic.in/fcra.htm, MinistryofHomeAffairs– Government. applicable tothosewhodonotreceivefundsfromthe the RighttoInformationAct,eventhoughasofnowitisnot NGOs insistthattheybecoveredunder appropriate thatall be Many donothaveanyinformationontheirwebsites.Itwill JANUARY 2017 I CHARTERED SECRETARY CS CHARTERED SECRETARY I JANUARY 2017 77 76 JANUARY 2017 I CHARTERED SECRETARY [email protected] Bengaluru Ravi &ShrihariCharteredAccountants Chartered Accountant K SRavi Business Entities Option Pricingin Valuation of CHARTERED SECRETARY I JANUARY 2017 market approach,theincome relieffromroyaltyapproach,thetechnologyfactor The its worth. income approach)fordetermining of the variants two (including the methods Financial ValuationofIntangibles: Traditionally,intangible’svaluation takesupfive have contributedtothedevelopments inthisfield. this directionliketheBalancedScorecard andIntellectualCapitalBenchmarkingSystemthat superiority amongthebenchmarkedpeers.Therehavebeenseveral studiesandattemptsin establish relationshipsbetweenthemandallowingtobenurtured toensureperformance Structuring themintheorderofimportance.Havingidentified them,thenextstepisto value ofanasset.Thefirstistheidentificationallassets thataretobemeasured. Value MeasurementModel:Thishastwodistinctstepstobeconsideredmeasurethe model andtheFinancialValuationtoreckonwith. If welookattheexistingmodelsthatareinvogue,broadly have theValueMeasurement business entity. valuation orthecorecompetencythathaveenergy forbettercashflowsthe statements, ifsohow?Thisthenbringsustotheshoresof reliableintellectualproperty absent. Thequestionthatthenarisesiswhetherintangibles shouldformpartoffinancial Further, unquotedentitiesmayhavetodependonothermethodswheremarketvaluationsare on marketprices,isnotaneffectivescientifictooltodependuponininvestmentdecisions. speculation andotherinefficienciesthatnormallyrulethemarket.Again,anyvaluationbased the stockmarketprices,butthiswouldbetrueonlyifvaluationisnotskewedby in often reflected capital anditsfuturepotentialare valuations ofintellectual that been agreed impact remainoutoffocusastheyarenotpartfiguresinthefinancialstatements.Ithas and business trajectory,theirpresence with grow and intangibles arecreated Since most database tosupportit. business mayfaroutweighthetangibleportionandisoftennotrealizeduntilthereacredible It may sohappen,that the managements failto realize that the intangiblecomponentsin of uncertainties,andtheydonotclearlydemonstratethefuturepotentialbusinessentities. cost conventionmodelorthefairvaluationfailtovaluethemasrequired,onaccount When onelooksatintangibleassets,itisamatterofgreatconcernthateitherthehistorical PRESENT STATUSOFINTANGIBLEVALUATION (1977)’, Model Options ‘Real the inventing for credit the given be should Mayers Stewert REAL OPTIONANINTRODUCTION valuing financialasset,whichcanbeextendedinprojectsandbusinesses. unpredictable. OptionPricingortheRealModelprovidesasystematicapproachin opportunities. Thoughtheoreticallywemaybuildmodels,reallifesituationsaredynamicand otherwise. Thismodeldeterminesthemanagerialflexibilityvalues,embeddedininvestment which wasprimarilyusedinvaluinginvestmentsvolatileenvironmentsbotheconomicor call orputoptionastheygoalong, dependingonitsyield. the value ofintellectualproperty/knowledge assetsandtoexercise option modelprovidessomeflexibilitytothemanagersmeasure which isdependentonthe ‘value inuse’tothebidder. The real the DCFdonotadequatelyaddresstruevalue ofanintangible, The existingmethodologiesofvaluations like theEPS, EBITDA or 77

RESEARCH PAPER RESEARCH PAPER stream ofcashflowsfutureyearsisasdepictedbelow: The formulafordeterminingtheNetPresentValue(NPV)ofa parameter delvesintotheaspect ofriskassociatedingenerating in userequiringconservativeestimate ofitsusefullife.Thethird asset willcontinuetoremain long theintangible how depends upon (5, 10,15,….)again period forecast of the substitutes, etc.Length economic environment,market competition,availabilityof Income forecast is anestimate that depends on thegeography, is determined. overall incomeflowofthebusiness,ifNPVbusiness intangible asset,hastobeappropriatelysegregatedfrom the from theintangibleasset,orcashflowasacause the A wordofcautionthatmayberequiredhereisthecash flow desirable. HighertheIRRgreaterwouldbeitsdesirability. > 0is 0. NPV is theratewhenNPV= (IRR) Return of Rate Internal I –initialinvestment C –cashflowatthatpointintime r –discountrate N –totaltimeofcashflows t –isthetimeofcashflows Where: (DCF) modelworksonthefollowingparameters: Discounted CashFlow:Ingeneral,theFlow while themodelisbeingputtouse. also toconsidertherisksassociatedwithvolumeandtimeframe number ofyears,theassetswillkeepyielding.Further,onehas This requiresthequantumofflowtobe estimated alongwith the future income/netcashflowthatgoestothebenefitofowner. economic benefits.Ittakesintoconsiderationtheprojectionof Income Approach: all typesofintangiblesbasedonthemarketinformation. valuing intangiblesispractical,morelogicalandcanbeappliedto However, ithasbeenestablishedthatthemarketapproachof frequently andmaydifferfromothersduetotheiruniqueness. active marketmaynotexistfortheintangibles,betraded necessary adjustmentsforitsacceptability.Itisagreedthatan to make few, a identify impossible to of asimilarnature,itisnot intangible assetstransactions and althoughdifficulttocomeacross intangible value.Inspiteofmanytheabove-mentionedhurdles sickness, liquidityissues,etc.,playamajorroleinharmonisingthe influencing factors suchasgeography, bankruptcy, industrial often hardtoobtaintransactionsofasimilarnature.Also, significant dissimilarities,ifany.Itiseasiersaidthandone,asit and exchangedatarm’slength.Adjustmentsaremadefor market basedtransaction,whichisidenticalorsubstantiallysimilar, Market Approach:Inthisapproachonetriestofindacomparable approach andthecostapproach. OPTION PRICING IN V 78 Risks associatedwiththegenerationofincomestream. Number ofyearstheincomestreamislikelytoexist;and Income streamintothefuture; ALUATION OF The assetisworththepresentvalueoffuture BUSINESS E NTITIES which dealswithdeterminingthe reliefofroyaltyvaluepayableon A variantofDCFmethodisthe ‘RelieffromRoyaltyApproach’, ß= Sensitivityofreturnfromassets tomarketreturns. Rm =Returnrateofmarketbenchmark Rf =Rateofriskfreeinvestment Re =Theexpectedreturnrate(Risk–AdjustedDiscountRate) – RiskPremium) Expected Return=Riskless+Beta(Expectedmarketreturn Analytically, itcanberepresentedasfollows: free assetplusrisk premium. risk investment in from rate ofreturn flows. Theexpectedreturnfromanassetoraportfolio,equals the in DCFmethodarrivingatthenetpresentvalueoffuturecash determining andapplyingtheappropriateratefordiscount rate Under Tx =TaxRate Cd =CostofDebt Ce =CostofEquity D =Marketvalueoffirm’sDebt E =MarketvalueofFirm’sEquity a firmmustearnonitsassetstosatisfycreditorsandowners. Weighted AverageCostofCapital,istheminimumrateatwhich rate fordiscountingthecashflows. Pricing Model(CAPM)ratesareusedinarrivingatanappropriate Weighted AverageCostofCapital(WACC)ortheAsset discount ratethelowerispresentvalue.Normally, reflect risk,theratehastoobviouslyincrease.Thegreater a specifiedrateofreturn.Whenthediscountisadjustedto cash flowtellsushowmuchasumofmoneyisworthtoday,given different situationsofrisk,elementsinflation,etc.Thisdiscounted cash flows,whichisfactoredintherateofreturndependingupon Discount rateisimportantindeterminingthepresentvalueoffuture as thediscountrate. economic risk,whichareinherent,factoredintowhatiscalled such asmarketrisk,specificindustryoperationalriskand future income.Asweallknowthatbusinesshastoconfrontrisks Capital AssetPricingModel(CAPM),theeffortistowards WACC =(E/F)*Ce+(D/F)*Cd(1-Tx) JANUARY 2017 Re =Rf+ß(Rm–Rf) I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 79 78 JANUARY 2017 I CHARTERED SECRETARY REAL OPTIONMODELANALTERNATIVE the modelfailsandotherapproaches havetobeattempted. However, whencashgenerating intangibleassetsareconsidered, internally developedsoftware,wherecashflowsarenotsignificant. designs and in valuingassembledworkforce,drawings, suited best timing anddurationoffutureeconomicbenefits.Therefore,they are The conceptofreplacement/substitutionoftenignorestheamount, measurement conceptorunderthecostapproach. beyond recognition.Allthesearenotcapturedunderhistorical cost either sidebyperformingextremelywellormayencounterfailures on can swingthefortunes intangibles that all know intangibles. We worked. However,thisisnotfavourablewhenwearedealing with considering depreciationforthenumberofyearsithasalready asset thatisdeterminedbyworkingoutthereplacementcostafter the the fairvalueof Itwouldbe would costtoreplaceit. what it for theassetnotmorethan would payexactly purchaser prudent of theintangiblebasedonpremisethataknowledgeableand last methodisthe The be licensedorthetechnologyiscrucialinagivensetofoperations. This methodismoresuitableandeffectivewhentheintangibleto value oftheconcernedbusinesstocalculatetechnology. resulting technologyfactoristhenmultipliedbythenetpresent required, tomakeitmoreconservativeandacceptable.The analysed tomakeadjustmentsforscalingthepercentagedown,if technology canmaketothebusinesscashflows.Itisfurther This approachconsiders the maximumcontribution that the use. Presentvalueiscalculatedusingasuitablediscountfactor. Future cashflowsusingthetechnologyisestimatedbasedonits underlying the of use’ in ‘value technology. on based business the of value Approach’, whichopensawindowfordeterminingthemarket Yet anothervariantoftheDCFmethodis‘TechnologyFactor Income ApproachandMarketApproach. forecast model(DCF),itisoftenconsideredacombinationof rates thatsimulatemarketplacetransactionsandmimicrevenue royalty rateusedfordiscounting.Sincethismethoduses the intangibleasset.Accuracyinvaluationwilldependupon worked outandcomparedwiththebenefitsofowningoracquiring the intangibleasset,ifhired.Presentvalueoffuturepaymentsis We allknowthat knowledgeandserviceindustries havecreated CHARTERED SECRETARY , which determines the value Cost Approach,whichdetermines I JANUARY 2017 the projectsarelargeandahost ofuncertaintiesencompassa being conceived.Predictionof futurecashflowsoftenfailswhen The staticDCFModeloftenfails whenlargeR&DProjectsare they areoftentermedascompound realoptions. options. Sincerealoptionsarecontingent uponmanyuncertainties, neither maturednorefficient to followthecourseoffinancial unique intheirownrespect.Themarketforsuchoptions are ready marketinformationastheyarenotreadilytradedand are or developingintangibles.Unlikethefinancialoptions,thereis no extracting mineralresources,realestateinvestmentsandacquiring and someofthemincludelargeR&DProjects,opportunities of associated withthem.Verymanyexamplesexistintherealworld put optionsdependingontherisksandprobableopportunities budgeting andresourceallocation,bringinginthecalloptions and But intherealoptions,decisionsareconcernedwithcapital EXISTING ALTERNATIVES ADVANTAGES OFREALOPTIONAGAINST American optionscanbeexercisedonanydatebeforetheexpiry. the have tobenecessarilyexercisedonthematuritydate,while option ashasalreadybeendetailedabove.TheEuropeanoptions expiry date.Buyingit,isthecalloptionandsellingitput the lastdateoftimeperiodis the strikepriceand exercise or a specifiedtimeperiod.Thepre-determinedpriceiscalledthe to subscribefortheunderlyingfinancialassetatafixedpriceover which itisderived. These options arearight,butnotanobligation on volatilityoftheunderlyingfinancialinstrumentorasecurityfrom A financialoptionisaderivativeinstrumentwhosevaluedepends FINANCIAL OPTIONS merely anextensionofthefinancialoption. option ismadeontheinvestmentorafinaldecisiontaken.It of flexibilityforthemanagementstoconsumetimebeforeacall is insituationslikethis,thatrealoptionmodelprovidesafairdegree the projectedfigures,howeverconservativetheymayhavebeen.It DCF, thefutureiserraticanddynamictoholdonpredictedor is bidder. It the to use’ in abundantly clearthatinspiteofsophisticationsembeddedthe ‘value the on based intangible an of EPS, EBITDAortheDCFdonotadequatelyaddresstruevalue not beingadequatelysharp.Theexistingmethodologieslikethe of investmentintoknowledgecapitalinspitethevaluationtools that asitmay,largecompaniescannolongerignoretheimportance overvaluation, itobviouslywouldleadtheentitytoitsgallows.Be disaster. Butifithasoversteppedthethresholdonaccountof survives a the entity,entity are withintheriskappetiteof doing business.Itisoftenseenthatsolongassuchinvestments made internally,or,intellectualassetsareacquired can nolongerignoretheknowledgecapital.Eitherinvestmentsare In ordertoconfrontandsurviveorsustainchallenges,companies exercise callorputoptionastheygoalong,dependingonitsyield. managers tomeasurethevalueofintellectualpropertyand capital. Therealoptionmodelprovidessomeflexibilitytothe been abletocapturethenuancesassociatedwithintellectual as discussedabove,mayhaveprovidedayardstickbutnot traditional methods, The them. to value some traditionalmethods knowledge andintellectualcapitalseemstobeelusive,inspiteof convention andfair valuation methods, the measurement of liabilities havebeenfairlydefinedbothunderthehistoricalcost across theworld.Whilephysicalandmonetaryassets and arecreatingasignificantimpactontheeconomicenvironment OPTION PRICING IN V ALUATION OF BUSINESS E NTITIES to continue 79

RESEARCH PAPER RESEARCH PAPER SPu SP =StrikePrice cash flows. real optionpricingonaninvestmentthathaveuncertaintiesinfuture discounted toarriveatthepresentvalue.Thisthenprovides the The probabilisticpayoffs determined at eachnode are then remains riskneutral. market thatpresentsnoarbitrageopportunitiesandtherefore assumption thatismadeintheBinomialittradeda decrease invaluesassociatedateachnodalpoint.Another A decisiontreeisdevelopedwithnodes,resultinginanincreaseor points andnodesinthetimeframefromstarttoexpirydate. model assumesaperfectlyefficientmarketandthereforeidentifies uses thecontinuoustimeapproach.TheBinomialoptionpricing formula, whiletheformerusesdiscretetimeapproachlater They aretheBinomialmethodandBlack-Scholesoptionpricing option pricingortherealopportunitiesformanagers. There aretwomathematicalmodelsthatsupportthevaluationof OPTION DECISIONS MATHEMATICAL MODELSSUPPORTINGREAL Model failstocapture. potential, thevaluationofcompanyaccelerateswhichDCF flows. Iftheprojectisconceivedasonehavingdesired or gofullstreamasithasthepotentialofgeneratingexpectedcash study, decisionsaretakenwhethertoabandontheprojectaltogether are madeonpilotprojectstostudytheimpact.Basedimpact its successrate.Mostlytheyarestaggered,or,smallinvestments resources onprojectstoitsfullpotentialasthereisnoassurance In arealoptionscenario,managersdesistinmakingallocationof not quotedinthepublicmarket. valuation orwillcreateanintangiblevalueforcompaniesthatare on presentinvestmentshaveasignificantimpactcompany’s long gestation. Obviously,thevalue of future growth options based resource ortheintangiblewithprospectsofgoodcashflowsa role notonlyforstaggeredinvestmentsbutalsovaluingthe these, thatrealoptionsplayavital like been made.Itisinsituations loss willbecomeclearwhen sufficient investmentshavealready the short cut project orto to continuethe Whether of theproject. remain obscureuntilthereisconsiderableprogressintheexecution of mineraloroilsisonesuchexamplehowcashflows paths afteracquisitionorexecutionhasstarted.Extraction strategy hasbeenadoptedthereislesslikelihoodofchanging of arangeoutcomes,andstaticforthereasonthatonce deterministic inthesensethattheydonotfactorforprobability therefore lessusefulwhencircumstanceschange.Theyare proposal. TheNPV methodologies are deterministic andstatic OPTION PRICING IN V 80 1 = StrikePriceon theup-swingwithprobability“p” ALUATION OF BUSINESS E NTITIES the secondnodederivingitsstrengthfromSPd second nodederivingitsstrengthfromSPu SPu an option. normal distribution,whilethevaluesofd N(d SPd output value.Itisafunctionof5variables- of theBlack-Scholesmodelwhichismorereliableinterms time periodsbecomecontinuousandthemodelfitsrequirements nodes ofthebinomialmodelgetscloserandcloser,discrete values underoptionpricingalternative.Whenthetimeperiodor there arewelllaidoutmethodsforscientificallycalculatingthe nuances ofthesemodelsexceptforbringinghomethefactthat arrive atresults.Thisarticlemakesnoeffortingoingintothe Binomial modelandrequiresdetailedmathematicalcalculationto The Black-Scholesformulaisalittlemoreintricatethanthe SPd DCF analysis. decisions, whichcannotsimply bedeterminedfromthetraditional value ofthecompanyisthen dependentonsuchrealoption intrinsic underlying asset,theoptionisleft toexpireworthless.The exceeds theNPVofprobabilistic expectedvaluesofthe cost, acalloptionisexercised. Ontheotherhand,ifcost Interpreting thealternatives,they saidthatifthepayoffexceeds (i) Y – X if and only if Y ≥ X mined of payoff probabilistic the and ‘X’ be to mining of cost the methodology. Toovercomethisdifficulty,theprofessorsassumed decision ofvaluingitcouldnotbetakenbasedonthesimpleDCF making theinvestment. Theproblem being stochasticinnature, the to beweighedbefore Obviously, costandbenefitshad it. to exploit upon thepriceofgoldinfutureandwhatinvestmentsitwould take volume ofdepositsalone that wasimportantbutit also depended whether tomakeinvestmentsinminingit.Itwasnotmerely the Being assuredofgolddepositsinthemine,firmhadtodecide A firmhadtheoption,butnolegalobligation,toexploitagoldmine. real optionstrategybywayofanexamplerightsonagoldmine. and EduardoSchwartz,whohavedemonstratedtheimportanceof look upontheexampleoftwofinanceprofessors,MichaelBrennan If wewanttounderstandthecoreaspectofrealoption,may IMPORTANCE OFREALOPTIONINMININGPROJECTS r –Risklessinterestrate t –Lifetoexpirationoftheoption K –Strikepriceoftheoption S –Currentvalueoftheunderlyingasset on calloptiondoesnothavetobepaiduntilexpiration.N(d alternatives asfollows: (through the NPV process). With this they lookedat payoff od o e Y, hc as icroae te ie au o money of value time the incorporated also which ‘Y’, be to gold e -Variance inlog(valueoftheunderlyingasset) 2 2 2 1 ) areprobabilities,estimatedbyusingacumulativestandard -rt = StrikePriceonthedownswingwithprobability“(1-p)”at = StrikePriceontheup-swingwithprobability“p”at = StrikePriceonthedownswingwithprobability“(1-p)” isthepresentvaluefactorandshowsthatexerciseprice JANUARY 2017 and I CHARTERED SECRETARY (ii) 1 and d 1 0 if and only if Y ≤ X 1 2 are obtainedfrom 1 ) and CHARTERED SECRETARY I JANUARY 2017 81 80 JANUARY 2017 I CHARTERED SECRETARY them through mathematical models to reach reliably safe reliably toreach models mathematical through them today, itshouldbepossibletocollect largedatabaseandinterpret losses attheearliest.Withtechnology asanaidtobusinesses block, attemptsaremadetoabandon allthealternativestocut that isexpectedtoofferabetter option.Ifitendsupasaroad- do withcarefullylookingatallthe alternativesandchoosingtheone not necessarilyhavetohituponadiscretenumber.Ithasmore to which canbeusedasacomplimentaryindicator,realoptiondoes abandon theprojectcompletelywithanexitoption.UnlikeNPV, for investorstoslowlyopenupandbeefinvestments, or investment turnsouttobeonthewinninghorse.Itthusgives time more resources.Follow-upinvestmentsaremadeiftheiroriginal investments. Venturecapitalistsoftenwaitandwatchtopump making staggered these companieshold,provideavenuesof traditional modelsfail.Itshouldalsobenotedthatrealoptions, that by thesecompanies,areviewedandvalueddifferently,where the companies thathaveapotentialforgrowth.Therealoptions held capitalists whoareontheprowlhappentosenseandbetupon baffle managerswhoareattheirhelm.Investorsandventure the horizon.Evenforexistingprojects,alternativesshowupand on keep comingup for newopportunities changing, theprospects projects thataretreadingtheirgrowthpaths.Whiletheworldkeeps Markets obviouslyrecognisegrowthcompaniesandpeepinto MARKET PERCEPTIONANDREALOPTIONVALUATION reach themarket,whichistabledashereunder: involved inthedrugdiscoveryprocessandyearsto reaping expectedfuturebenefits.Letusconsiderthestages value ofinvestmentsmadeintoR&Dorotherintangiblesfor flexibility totakedecisions,istheaggregateoffreecashflowsand entity onrealoptionbasis,alsoincorporatingthemanagement’s under thetraditionalmethodsofvaluation.Thevaluationan intangibles, hasmanymorerigoursthanwhatissimplyimagined It nowboilsdowntothefactthatvaluationofanentity,withallits APPLICABILITY OFREALOPTION LONG GESTATIONOFPHARMAINDUSTRYAND the traditionalDCFmodel. rigidity in the valuation eliminates abandon, and either proceedor therefore providestherequiredflexibilitytomanagement it appearsthattheinvestmentsarenotlikelytosucceed.This established, onrealoptionmodelstoabandontheeffortmidwayif entity andtheindustry.Oftendecisionsaretaken,values pre-market efforts,onecanimaginethehavocitcauseto negative cashflowsduetomarketfailures,inspiteofsuccessful of and iftheyremainunrealizedbecause made investments These stagesinlonggestationprojectsbringuncertaintytothe Source: Kellog&Charnes2000,www.pfizer.com Total Time 5. Registration (for marketing) to 3) 1 Clinical Trials(phase 4. Pre-clinical Trials 3. 2. Patentprocessinitiated 1.Discovery of a molecule & Development Research CHARTERED SECRETARY I Table 1 JANUARY 2017 Years involved 12-28 4-15 1-4 6-8 4-5 1 • • • • • elements thatconstitutearealoptionincludethefollowing: On acloseobservationofwhathasbeenstatedabove,the confidence ofmakingitlooklikeanempiricaldecision. with keennessandexpertise.Therefore,itprovidestherequired decisions, ateachdecisionpoint,whichhastoconsideroptions sense, realoptionlaysopenmyriadwaysoftakingstrategic uncertainties. Althoughitmayappeartobesubjective,butina paths ifrequired.Itbuildsintherequiredflexibilitiestoencounter uncertainties inthegrowthpathandmanagingrisksbychanging Existing literatureonrealoptionstheory,talksaboutintroducing LITERATURE ONREALOPTIONTHEORY production reaches maturedlevelsofyield(of courseonecannot types- technicaluncertaintyand uncertaintyofmarkets,when that weencounterinoilfields? Typical uncertaintiescanbeoftwo with uncertaintiesassociated them.Whataretheuncertainties discussed realoptionscometo the forewhenprojectisconceivable development ofoilfieldsandextracting oilfromit.Ashasbeen Let usnowlookattypicalcase realoptionapplicationinthe OILFIELD EXPLORATION REAL OPTIONAPPLICABILITYIN when hecanchoosenottoinvestanyfurther. is protectedwhenthereadownswinginthemarketconditions, when themarketvaluesofsuchinvestmentsaremuchhigher.He exuberance inthemarket,ashemakesinvestmentsatafixedprice investor standstogaininavolatileenvironmentwhenthereis retract basedontheinformationvalue.Sincethisisanoption, to time.Itprovidesmoretimedecideonfurtherinvestmentsor time totakepositionswiththenewinformationcominginfrom increases, itincreasestheoptionvalueasgivessufficientormore option analysis.Further,inthethirdelementiftimetoexpiration the NPVofanyproject.Butotherthreearepeculiartoreal The firsttwoelementsareanywaypartoftheDCFindetermining destinations. R Sigma T X S Comparison betweenfinancialoptionandrealoption: flows Risk freerate,whichisusedindiscountingthefuturecash Volatility associatedwiththereturns Time toexpirationwhentheoptionbecomesinvalid period Cash flowsfromsuchinvestmentsoveradeterminedtime Investments tobemade Short maturityperiods Risk-free interestrate the valueofunderlying Standard deviation(volatility)of Time foroptionexpiry Exercise Price Value oftheunderlying aktbeadtae Nomarketforcomparison no bearingonvaluation Management’s involvementhas Marketable andtraded account ofshortmaturityperiod volatileand less onStable Financial Option OPTION PRICING IN V Table 2 Risk-free discountrate the futurevalue Probability distribution–uncertaintyof the project Time untiladecisionistobemadeon investment option theexercising Initial outflowin projects from investments/ NPV ofcashflows real options Management’s actiondrivethevalueof Volatile-varies withtime Maturities are longer-may be severalyears Maturities arelonger-may ALUATION OF Real Option BUSINESS E NTITIES 81

RESEARCH PAPER RESEARCH PAPER distinct anddifferentfromthatofanoffshorewell. of another.Thisapart,thelessonsanonshoreoilfieldcan be drilling thefirstwellmayhavetobechangedbasedonresults and thereforedecisionsbasedon another completely differentfrom in. Often,whenoilwellsaredrilledtheresultsofonemaybe projects like these,toalterdecisionswhenmore information flows Real optionisatooltoprovideflexibilitiesmanagement,inlarge the superstructure as the foundation canbeartheadditionalload. superstructure asthe the estimate. Iftheusageincreases, managementcanalwaysexpand expanded capacity,restricting thesuperstructurestoasafe management thereforedecides tohavethefoundationfull may bealostopportunityofnot cateringtoalargercrowd.The curtailed ontheassumptionthat theusagemaybelimited,there project investmentcouldfail.On theotherhand,iffacilityis situation thatthefacilityisnotusedoptimallyandtherefore the up. Iftheinvestmentsaremadeonalargefacility,theremaybe a estimate andthingscouldgoeitherwaywhenthefacilityisopened made toestimateareliableandfaithfulcashflow,itisbestbut an how thefacilityisgoingtobeused.Although,effortshavebeen constructing aparkinglot.Thereisuncertaintyanticipatedabout To understandtheconceptletuslookatasimplecase of REAL OPTIONINCONSTRUCTIONOFAPARKINGLOT • • • • decisions aretakenintheearlierphase. helping thesubsequentphasestobealteredbasedonwhat phases andeachphasehasnumerousdecisionmakingpoints, expansion. Oilandgasfielddevelopmentsgothroughthefollowing made torecoverinvestmentsalreadymade,withoutplansoffurther what wasforecast,capitalinvestmentiscurtailedandattemptsare In thealternative,ifitisfoundthatpotentialwillbenobetterthan more whentheestimatedpotentialofrecoverykeepsonincreasing. established astheprojectprogresses.Itgivesconfidencetoinvest therefore structuralrequirementsarescaledupandrobustnessis and soonforth.Decisionsmaynotbepossibleupfront environmental issues reserves available,regulatoryrequirements, are tobeputintoplacewilldependonhostoffactorsincluding recovery toitsmaximumpotential.Todeterminewhatstructures investment cost,maximiseoperationalcostefficienciesandensure Oil andgascompanies,tostartwith,haveminimisecapital minimize projectslippagestowardofviabilitycrisis. alter thecourseofactiontomaximizegrowthopportunitiesand and pricesarefactoredwithmanagementholdingtherightto option alternativecomesinhandywherethefluctuationsofvolumes anticipating non-viabilitytheprojectisaltogethershelved.Thereal in oilandgasfieldprojects.Eitherthegainsareoverestimatedor and variability either in outputorthecashflows, which infactis real methods liketheNPVorIRRdonotconsiderfluctuations possibilities thatareexpectedtoturnoutberight.Thetraditional against otherstodeterminethebestpossibleoptionsand uncertainties andthereforeeachactionpathhavetobeweighed Project managersinoilandgasprojectsencounterlotof node oftheprojecttimepath. out tobeusefulandsignificantwhendecisionsaretakenateach with flexibilitiesformanagementtoact,allsuchattemptswillturn located). Ifinnovationsgetintroducedastheprojectprogresses, deny otheruncertaintiesdependingonwheretheoilfieldis OPTION PRICING IN V 82 Production Execution andengineering Conceptual study Exploration ALUATION OF BUSINESS E NTITIES strategies onlonggestationprojects. companies, pharmaetc.,thatmakeuseofrealoption many suchreal-lifesituationslikethetelecomindustry,power the foundation,andcostonsuperstructureissaved.Thereare This restrictsthelossonaccountofadditionalinvestment,onlyto may shelveexpansionplanuntiltheparkingdensityincreases. If thecrowdremainslimitedandthereforeitsusage,management • • • • • • • • • REFERENCES more acceptable. begs for involvementof more expertsandpractitionerstomakeit being thecurrentsituation,applicationofrealoptionvaluation models thatstandstoreasonoutfortheoptionexercised.This in-depth involvementtoconvertthemintomathematicalcredible already inpracticeforlonggestationprojects,theexerciserequires the entityonitsback-foot.Thoughrealoptionexercisesare carefully lookedat,astimeprogresses,realoptionvaluationwillput measuring volatilitybecomesdifficult.Iftheassumptionsarenot Since therearenocompetingmarketsforsuchinvestments, real option scenarioandthetimeof expiration is alsouncertain. not easilyunderstood.Further,theexercisepriceisknownina But, theconceptiseventodayconceivedasdifficult,complexand Brearly andMyers(1991)Kautilaka&Marces(1988,1992). Merton (1985),TrigeorgisandMason(1987),(1988), on thesubjecthavebeenmadebyeconomistslikeMasonand The conceptofrealoptionisstillevolvingandseveralcontributions CONCLUSION Ashwath Damodaran –OptionPricingTheory& Applications ing: ASimplifiedApproach John CCox,StephenARoss& Mark Rubinstein–OptionPric- Corporate Liabilities Fischer Black,MyronScholes – ThePricingOfOptionsAnd Strategy inResourceAllocation Trigeorgis L,1996–RealOptions –ManagerialFlexibilityand tegic InvestmentsInAnUncertainWorld Amam M,KaulatilakaN,1999–RealOptionsManagingStra- Real OptionModels Sudi Sudarsanam,2003–ValuationOfIntellectualCapitalAnd Tool InOilFieldDevelopments Abisoye Babajide,2007–RealOptionsAnalysisAsADecision Resource Investments Brennan M.JSchwartzE.S.1985-EvaluatingNatural Dixit A.K,PindyckR.S.1994-InvestmentUnderUncertainty JANUARY 2017 I CHARTERED SECRETARY CS CHARTERED SECRETARY I JANUARY 2017 83 CENTRE FOR CORPORATE GOVERNANCE, RESEARCH & TRAINING (CCGRT)

PCH-4 ICSI-CCGRT ANNOUNCES

Unique All India Research Paper Competition on Merger & Acquisition ALL INDIA RESEARCH PAPER COMPETITION ON MERGER & ACQUISITION ALL INDIA RESEARCH PAPER

ICSI-CCGRT is pleased to announce unique “All India distinct phase of regulations. On one side of the regulatory Research Paper Competition on Merger & Acquisition spectrum there has been a discouragement to the formation with an objective of creating proclivity towards research of combinations due to fear of concentration of economic among its Members, both in employment and practice. power in the hands of few and on the other side there have The purpose of research is to identify specific questions and been encouragement to varied forms of M&As due to try to find out a comprehensive and definitive answer. Since reasons of optimum utilization of resources, social benefits research in all disciplines and subjects, must begin with a and growth of and competitiveness of Indian corporate clearly defined goal, this study is also designed keeping sector. Changing regulations and increased competition and those objectives in mind. competitiveness of Indian corporate firms brought about substantial change in strategy formulations. Growth through Prologue inorganic routes became significant corporate strategy Mergers and Acquisitions in India have evolved through a formulation.

82 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 83 The merger control regime in India has been in force for over * The paper must be accompanied with the author’s five years and has significantly transformed the manner in name(s), affiliations(s), full postal address, email ID, and which M&A activity is governed in India. The Competition telephone/fax number along with the title of the paper on Commission of India (CCI) regulates the enforcement of the front page. Sections 5 and 6 of the Competition Act, 2002 (Act) that * Full text of the paper should be submitted in MS Word were brought into effect on 1 June 2011. The Act provides using Times New Roman, font size 12 on A4 size paper for a mandatory suspensory regime and transactions which in 1.5 spacing, with a maximum of 5000 words. meet the jurisdictional thresholds (based on asset and * The text should be typed double-spaced only on one side turnover computation) require a prior notification to the CCI. of A4 size paper in MS Word, Times New Roman, 12 font Over the last six years, there have been a total of 407 Form size with one-inch margins all around. I (short form) merger notifications that have been filed with * The author/s’ name should not appear anywhere else on the CCI out of which 338 merger notifications have been the body of the manuscript to facilitate the blind review approved to date. Additionally, in relation to Form II (long process. The research paper should be in clear, coherent form) merger notification, the CCI has approved 21 of the and concise English. total 26 merger notifications filed to date. Notably, the CCI * Tables / Exhibits should be numbered consecutively in has never blocked a transaction so far. The CCI has been Arabic numerals and should be referred to in the text as proactive in ensuring that the merger review process is Table 1, Table 2 / Exhibit 1, Exhibit 2 etc. streamlined with international best practices and has * All notes must be serially numbered. These should be engaged with various stakeholders regularly, thereby given at the bottom of the page as footnotes. simplifying the merger notification process. * The following should also accompany the manuscripts on separate sheets: (i) An abstract of approximately 150 Objectives: words with a maximum of five key words, and (ii) A brief a) To explore the newly notified Sections of Companies biographical sketch (60-80 words) of the author/s Act, 2013 pertaining to Merger & Acquisition- 230, 231, describing current designation and affiliation, 232, 233, 233A and 233B specialization, number of books and articles in refereed b) To understand the provisions of Competition Act journals, membership number of ICSI and other provision, Competition Commission Judgment and membership on editorial boards and companies, etc. approval / deny of Competition Commission. * The research papers should reach the Competition c) To comprehend SEBI (LODR) Provisions and approvals Committee on or before 15th of January, 2017. / denials of SEBI. * Participants should email their research papers on the Themes on which Research following email id: [email protected] Papers are invited Further Information for * Compromise between a company and its creditors and Authors/Participants between a company and its members * The decision of the Reviewing Committee will be final and * Impact of amendments to Combination Regulations of binding on the participants. Competition Commission of India * The Institute of Company Secretaries of India reserves * Takeover Code and Listing Agreement the right to publish or refer the selected papers for various * M&A Trend in key sectors of Indian Economy- Banking & publications viz; Souvenirs, Books, Study materials Financial Services; Steel; Power and Telecom published by the institute or in any seminar / conference / * International Mergers & Acquisitions- The Regulatory workshop / Research Programs conducted by institute Trajectory either on its own or jointly as per ICSI Guidelines with

ALL INDIA RESEARCH PAPER COMPETITION ON MERGER & ACQUISITION ALL INDIA RESEARCH PAPER * Business Valuation Issues in Merger and Acquisition other organizations and also in regular course of activities * Tribunal’s role in sanctioning the scheme of M&A of ICSI. Further, the authors whose papers will be * Fast Track Mergers selected will receive Program Credit Hours (PCH). * Merger of small companies / holding and subsidiary * ICSI reserves all intellectual property rights including in companies and its impact on growth of MSME Sector particular copyright, trade mark, design and other * Case Studies- Failed Mergers & Acquisitions (Exploring intellectual rights. The authors are not entitled for any Legal Causes) remuneration or compensation or royalty. The participants * Hostile Takeovers and Legal Ramifications / authors shall submit the Declaration Form to the institute at the time of submission of paper. Research Paper / Manuscript * The papers will be scrutinized by an Expert Committee. Guidelines * For any query / assistance, kindly contact at: ak.sil@icsi. * Original papers are invited from Company Secretaries in edu employment & practice, Academicians, Research * 4 PCH will be given to the members of ICSI, as per the Scholars and other Professionals. Credit Hour Guidelines of the institute.

CS Ahalada Rao V CS Vineet K Chaudhary CS Ashish Doshi Chairman Chairman Chairman ICSI-Research Committee Corporate Laws and ICSI-CCGRT Governance Committee Mgmt Committee

84 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 85 CENTRE FOR CORPORATE GOVERNANCE, RESEARCH & TRAINING (CCGRT)

ICSI-CCGRT organizes PCH-8 ED MYSTERIES Two Days Non-Residential Research Colloquium on Indian Companies Act – Decoding unsolved Mysteries (Two Days of Aficionados Congregation) NO BACKGROUND MATERIAL, ONLY INPUTS IN BRAIN & GUIDANCE OF CONNOISSEURS

Coverage Chapter 14-16 RESEARCH COLLOQUIUM ON INDIAN COMPANIES ACT – DECODING UNSO LV ACT ON INDIAN COMPANIES RESEARCH COLLOQUIUM The Trajectory The First Move-Group Study In its endeavor to provide impetus to research activities and The pre-lunch session of the first day of the workshop will taking it to the zenith, CCGRT is organizing the aforesaid focus upon the idea behind formation of the Research Circle program to explore into various Sections and Critical Aspects and its role as a catalytic agent in conducting research on of the Chapters -14 (Inspection, Inquiry and Investigation); Companies Act, 2013 on the aforesaid three chapters. Chapters -15 (Compromises, Arrangements and Amalgamations) and Chapter-16 (Prevention of Oppression Panel Speakers and Organisers will explain expansively the and Mismanagement) of Companies Act, 2013. importance of the colloquium, the proposed outcome, its

84 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 85 relevance for the Company Secretaries in practice and Chapters of Indian Companies Act, employment & Ignited Minds, i.e. our students pursuing Company Secretary Course and the fruits it bear for CS 2013 for Symposium fraternity. Chapters Title of the Chapters 14 Inspection, Inquiry and Investigation The session will also throw light on the procedure or process to be embraced by the participants during the voyage of this 15 Compromises, Arrangements and Amalgamations workshop. Now all these can only be accomplished, if the 16 Prevention of Oppression and Mismanagement ED MYSTERIES activities are executed in a group, as the adage goes, “United We Stand and Divided We Fall”, so in journey of All Participants should carry their own Laptop, Books, attaining excellence in research, it is imperative to march Bare Acts, and other relevant reading material. together. Keeping this crucial point in view, the first stage focuses upon group formation and significance of group Date, Time and Venue study. Day & Date: Time: Friday, 27th of January, 2017, 10:00 a.m. The Second Move: Brain Storming to Saturday, 28th of January, 2017 5:00 p.m. Once the participants will be conversant with the theory Venue: ICSI-CCGRT, Plot No.101, Sector-15, Institutional behind formation of the Research Group, its goals and Area, CBD-Belapur, Navi Mumbai-400614 process to be adhered as a participant, the next move goes by the axiom, “Two Heads are Better than One”. Yes, we are Rs. 3500/- Per participant including Service Tax @15% for talking about brainstorming, as in today’s dynamic Legal, participants registering on or before 10th of January, 2017 Business & Economic environment, decision taken by one (Early Bird Discount) expert may prove detrimental to the interest of the organization and stakeholders. So, in view of the immense value Rs. 4000/- Per participant including Service Tax @ 15% for brainstorming holds, this session will unite various groups participants registering on or before 16th of January, 2017 (after formation of groups during the colloquium ), who will after that Rs 4500 per participate including service tax @15 engage into a detailed discussion on the assigned Chapters/ % Sections of the Companies Act, 2013. As various people have different perceptions and it consumes paramount time Above cost covers Conference kit, Lunch (2), Dinner (1), to reach the point of reconciliation. Keeping this in view, Morning & Evening snacks (4), tea /coffee at ICSI-CCGRT. substantial time will be allocated for the mentioned session, so that all participants with the combination of 3Ds, Out station delegate- Hotel assistance will be provided on ‘Dedication, Determination & Discipline’ give their optimum request from the participants for the hotel in adjoining area of output. This session aims to throw light on significant issues CCGRT on chargeable basis. covered in the three chapters, i.e. Chapters - 14, 15& 16 of Companies Act, 2013. For Registration Fees may be paid through Pay U link (link available on The Third Move: Discussions CCGRT website-Pay U Money Link with Debate https://www.payumoney.com/customer/users/paymentOptio ns/#/5CC5C752DEA07B6F2813FB0136AE4CBF/ICSI- After participants discussed their viewpoints among their CCGRT/103967) / local / Par cheque payable at Mumbai in group members, the next stage involves holding in-depth favour of “ICSI-CCGRT A/c” and sent to: Dr. Rajesh Agarwal, discussion with other group members. This will assist in Director, ICSI-Centre for Corporate Governance, Research forming better views or in formulating refined and unsullied & Training (ICSI-CCGRT), Plot No. 101, Sector-15, conclusions on the mentioned three Chapters of the Institutional Area, CBD Belapur, Navi Mumbai- 400 614 Companies Act, 2013. Phone: 022-41021515/04, Fax: 022-27574384, Since this session is a metamorphosis from a ‘River to an email: [email protected]; Ocean’, as all group members share their thoughts/opinions, it demands ample time and so not few hours rather full is Note: Registration Fee is Non-Refundable allocated for the mentioned session.

This will be in the presence of Panelist. Limited participants 50 only RESEARCH COLLOQUIUM ON INDIAN COMPANIES ACT – DECODING UNSO LV ACT ON INDIAN COMPANIES RESEARCH COLLOQUIUM

Dr. Rajesh Agrawal Director ICSI-CCGRT

86 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 87 3 Legal World

n THE STATE TRADING CORPORATION OF INDIA LTD & ORS V. THE COMMERCIAL TAX OFFICER & ORS [SC] n SEBI V. BURREN ENERGY INDIA LTD& ANR [SC] n STATE BANK OF INDIA V. SANTOSH GUPTA & ANR [SC] n JORSINGH GOVIND VANJARI V. DIVISIONAL CONTROLLER MAHARASHTRA STATE ROAD TRANSPORT CORPORATION [SC] n LANCO ANPARA POWER LTD V. STATE OF UTTAR PRADESH & ORS [SC] n RAKESH SANGHI V. BENNETT, COLEMAN & COMPANY LTD & ANR [CCI] n VEER PRATAP NAIK V. AVEVA INFORMATION TECHNOLOGY INDIA PVT LTD [CCI] n LAXMI AUTOMATIC LOOM WORKS LTD V. DEPUTY COMMISSIONER OF INCOME TAX (RECOVERY) & ANR [DEL-DB] n BHUPINDER SINGH BAWA V. ASHA DEVI [SC]

86 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I DECEMBERJANUARY 2017 2016 87 Legal World Decision: Petitionsdismissed. claiming to be an Indian citizen filed petitions under Art. 32 of the Sales TaxActsandissuednoticesofdemand.TheCorporation sought toassesstheCorporationsalestaxundertheirrespective The Sales-taxAuthoritiesoftheStatesAndhraPradeshandBihar Brief facts: entitled toinvokefundamentalrightsunderArt.32–Held,No. challenging theimpositionofsalestaxonit–whethercompanyisacitizen Act, 1955–companyﬁledwritpetitionunderArt.32beforetheSupremeCourt Companies Act,1956readwithConstitutionofIndiaand(Indian)Citizenship 1057. Equivalent citations:1963AIR1811;1964SCR(4)89;(1963)33CompCas [Decided on26/07/1963] M.Hidayatullah, K.C.DasGupta,J.C.Shah&N.RajagopalaAyyangar JJ. P.B.Sinha(CJI), S.K.Das,Gajendragadkar, S.K.Sarkar, K.N.Wanchoo, Writ PetitionsNo.202-204of1961 Gujarat &Rajasthan. AdvocateGeneralsfortheStatesofMadras,Punjab,WestInterveners: Bengal, THE COMMERCIALTAX OFFICER&ORS[SC] THE STATE TRADINGCORPORATION OFINDIALTD &ORSv. CS:LMJ 15:01:2017 88 Reason: the Constitution against the State as defined in Art. 12 thereof. and canitclaimtoenforcefundamental rightsunderPartIIIof of Indiawiththeentiretyitscapital contributedbyGovernment; 1956, insubstance,adepartment,organoftheGovernment the formalityofincorporationunderIndianCompanies Act, (2) whethertheStateTradingCorporationis,notwithstanding said article;and enforcement offundamentalrightsgrantedtocitizensunder the meaning of Art. 19of the Constitution andcanaskfor the a citizenwithin theCompanies Act,1956,is under theIndian “(1)whethertheStateTradingCorporation,acompanyregistered decision bythespecialbench:[comprised9judges]. hearing themattersreferredtwofollowingquestions for the maintainabilityofsaidpetitions,ConstitutionBench Preliminary objectionshavingbeentakenbytherespondents to the Constitution. they infringedits fundamental rights under Art.19(1) (f) and (g) of Constitution forquashingthesaidproceedingsongroundthat Corporate Laws is more difficult to accept the argument that the expression “citizen” the CitizenshipActhavenotdealtwithjuristicpersonsatall,butit One couldunderstandtheargumentthatbothConstitutionand wide asthesameexpressionusedinArt.19ofConstitution. of thepetitioners,thatexpression“citizen”inArt.5isnotas In ouropinion,itisnotcorrecttosay,aswascontendedonbehalf under theConstitution. other words, allcitizens arepersons but allpersonsarenot citizens, artificial persons; a corporate body is not a citizen of the United States withinthemeaningofthisarticlemustbenaturalandnot United States of America(1)“Corporations Citizens of the United connection, reference maybemadeto the Constitution of the (Art. 16)weredeliberatelymadeavailableonlytocitizens.Inthis 15) andtheequalityofopportunityinmatterspublicemployment protection againstdiscriminationondenominationalgrounds(Art. Art. 14wasmadeavailableto“anyperson”.Ontheotherhand, Constitution oftheUnitedStatesAmerica,equalityclausein they werenaturalpersonsorjuristicpersons.On the analogyof irrespective ofwhethertheywerecitizensoraliens, contradistinction tothoserightswhichwerebeenjoyedbyall, care tousetheexpression“anycitizen”or“allcitizens”,inclear was to beenjoyedbyacitizen of India, the Constitution takes of theConstitution istosaythat wheneveranyparticularright the otherhand,morereasonableviewtotakeofprovisions far astheConstitutionandCitizenshipActwereconcerned.On out ofaccount so deliberately left persons was relation tojuristic deals with“citizens”anditisnotcorrecttosaythatcitizenshipin supplemented by the provisions of the Citizenship Act (LVII of 1955) expression inPartIIIoftheConstitution.IIConstitution, thesame with coterminous isnot Constitution ofthe 11 Part in available to ‘any person’ and those guaranteed to ‘all citizens’. In advisedly madeacleardistinctionbetween fundamental rights Constitution thatthemakersofdeliberatelyand It isclearonaconsiderationoftheprovisionsPartIII liberty ‘of natural, not artificial, persons, nevertheless a newspaper that the“liberty”guaranteedbyFourteenthAmendmentis the without dueprocessoflaw;andalthoughpriordecisionshaveheld is nodoubtthatacorporationmaynotbedeprivedofitsproperty corporation-plaintiffs toadvance,dueprocesscontentions.There of railway as tothestatus any question State lawswithoutraising Granger cases,decidedin1877,upheldonthemeritsvarious oppressive Statelegislation,theSupremeCourt,asearly for theword“citizen”withaviewtoprotectingcorporationsfrom persons, orwhethertheword,“persons”wassubstituted natural Fourteenth Amendmentintendedtheword,“persons”tomeanonly controversy thathasbeenwagedastowhethertheframersof States.” (p. 965) “Persons” defined “Notwithstanding the historical that as availableto “all citizens”, it deliberately kept out allnoncitizens. In Constitution laiddownthefreedoms containedinArt.19(1)(a)-(g), the expressions“anyperson”and “anycitizen”, andwhenthe between alivetothedistinction -Constitutionwerefully of the to necessary those provisions.Itisenoughtosaythatthemakers recount all not is it therefore, and, only, ‘citizens’ to available of thesamepartConstitutionrelatingtofundamentalrights guarantee certainrightsto“allpersons”andtheotherprovisions Ed. EdwardS.Corwin, provisionsof theConstitution, PartIII, which general terms,tothoseSenateDocumentNo.170,82d.Congress, in referred, (p.981).Wehavealready orcitizenship.” colour of race, the dueprocess clause, these include allhuman beingsregardless, deprived itoflibertypress.Astothenaturalpersonsprotected by corporation wassustained,in1936,itsobjectionthataState law

context,

non-citizens JANUARY 2017

would include I CHARTERED SECRETARY aliens

and artificial

persons.

CHARTERED SECRETARY I JANUARY 2017 89 88 JANUARY 2017 I CHARTERED SECRETARY Trading Corporation. these reasonsanswerstothequestion posedareagainsttheState that corporations areat the mercyof State Governments. For in most cases will share the benefit. We need not be apprehensive invoke Art. 19(1)(f) and(g)there isnodoubtthat the corporation there andifmoreisneededthen anymember(ifcitizen)isfreeto compulsory acquisition of property. There is sufficient guarantee curbs involvingfreedomoftrade,commerceorintercourseand no can benodiscrimination,taxationwithoutauthorityoflaw, no in particular. They are amply protected under our Constitution. There companies inwhichtheStatesownallormajorityofshares I have nocause for anxiety about Corporations ingeneral and the negative. Constitution. a differentsensefromthatinwhichitwasusedPartIIof the the word“citizen”usedinArt.19ofConstitutionwas in purposes ofmunicipallawortheConstitution.Nordowethink that not makethemcitizensofthiscountryfor of internationallawwill fact thatcorporationsmaybenationalsofthecountryforpurposes this countryandthesecitizenscanonlybenaturalpersons.The these twoprovisionsarecompletelyexhaustiveofthecitizens dealing withcitizensthereafter.Wemust,therefore,holdthat date theConstitutioncameintoforceandCitizenshipAct of thecitizensthiscountry,PartIIdealingwithon Act. Weareofopinionthatthesetwoprovisionsmustbeexhaustive II oftheConstitutionorwithinfourcornersCitizenship country whoareneithertobefoundwithinthefourcornersofPart We cannotaccepttheargumentthattherecanbecitizensofthis came into force and confines it only to natural persons. Citizenship ActwhichdealswithcitizenshipaftertheConstitution natural personsonly.Thisisfurthermadeabsolutelyclearbythe Part IIoftheConstitutionwhenitdealswithcitizenshiprefersto confer citizenshiponthem.Thereisalsonodoubtinourmindthat with thecountryoftheirincorporation;butthatdoesnotnecessarily nationality thatcorporationsmayhaveinaccordance we havesaidalreadyastothedistinctionbetweencitizenshipand before the advent of the Constitution. It seems to us, inview of what to thecontroversyaswhethertherewereanycitizensofIndia In viewofwhathasbeensaidabove,itisnotnecessarytorefer of citizenship and the rights flowing from the nationality or domicile wholly appropriatetoacorporatebody.Inotherwords,therights thus clearthattheRightsofcitizenshipenvisagedinArt.19arenot and (e)cannotpossiblyhaveanyapplicationtoacorporation.Itis But clearlysomeofthem,particularlythosecontainedincls.(b),(d) rights containedincls.(a)to(g)shouldbeavailableacorporation. corporation isacitizenwithinthemeaning of Art.19,thenallthe citizens, shallbeavailabletothem.IftheCourtwereholdthata only suchofthemasmaybeappropriatetoparticularclasses to “allcitizens”.TheArticledoesnotsaythatthosefreedoms,or in cls.(a)to(g).Thosefreedoms,eachandallofthem,areavailable down that“allcitizens”shallhavetherighttofreedomsenumerated The question may belooked at from another point of view. Art. 19lays before thelaw,asbelongingto“allpersons”. “citizens” onlyandthose moregeneralrights likethe right to equality peaceably, therighttopractiseanyprofession,etc.,asbelonging rights like freedoms of speech andexpression, the right to assemble fundamental rights,wasveryaccuratelydrafted,delimitingthose and “citizens”inPartIIIoftheConstitution.III,whichproclaims to “citizenship”,andmadeacleardistinctionbetween“persons” juristic persons whenthey enacted Part II of the Constitution relating makers oftheConstitutionhadaltogetherleftoutconsideration of acorporationarenotcoterminous.Itwouldthusappearthatthe CHARTERED SECRETARY The first question, I JANUARY 2017 therefore, must be answered in

Securities AppellateTribunal.HencetheappealbySEBI. imposed apenaltyofRs.25lakhswhichwassetasideby the authority adjudicating The agreement. purchase share of the commenced onandfrom 14th February, 2005i.e. date of execution said appointmentwasmadeduringtheofferperiodwhichhad violation ofRegulation22(7)theRegulationsinasmuchas directors of the target company. This, according to SEBI, amounted concert withBurren,appointedthesamepersonsonboardof of UBLandonthesamedateUBL,whichisapersonactingin agreement Burrenappointed two ofitsDirectorsonthe board On 14th February, 2005 i.e. date of execution of the share purchase person actinginconcert. was madeon15thFebruary,2005byBurrenandUBLactingasa at adeterminedpriceofRs.92.41perfullypaidupequityshare made forsale/purchaseof20%thesharestargetcompany Burren tomakeapublicannouncement,whichwasaccordingly the Regulationsgotattractedmakingitobligatoryonpartof of thetargetcompany stipulated 15%oftheequitysharecapital capital inthetargetcompany.Asacquisitionwasbeyond of thistransformationBurrencametohold26.01%theshare Onaccount samedayitself. the on Burren of name the in registered UBL, inEnglandandbyvirtuethereofallthesharesofUBLwere 14th February,2005toacquiretheentireequitysharecapitalof Burren enteredintoasharepurchaseagreementwithUICon Ltd. (“thetargetcompany”). 26.01% of the issuedsharecapital of Hindustan Oil Exploration Co. incorporated inCaliforniaUSA.UBLattherelevanttime,held UBL were acquired by oneUnocal International Corporation (“UIC”) Limited (“UBL”),whichisincorporatedinMauritius.Thesharesof acquire theentireofequitysharecapitaloneUnocalBharat Burren EnergyIndiaLtd(“Burren”)isincorporatedinEngland,to Brief facts: of directorsviolatestheprovisionsTakeover Regulations–Held,Yes. on 14/02/2005–publicoffermade15/02/2005whethertheappointment appointed itsnomineesasdirectorsintheparentcompanyoftarget purchase agreement)fortheacquisitionofshareson14/02/2005–acquirer SEBI Acquisition&Takeover Regulations–acquirerenteredintoaMoU(share Ranjan Gogoi&N.V. Ramana,JJ.[Decidedon02/12/2016] Civil AppealNo.361of2007 SEBI v. BURRENENERGYINDIALTD& ANR[SC] LW 01:2017 executed a concludedagreementand, in fact, the concluded agreementis case whereaMemorandumof Understandingistofallshortof a concludedagreementbetween theparties.Eveninagiven Understanding’ are,inanappropriatesituationmayalsoinclude the The mainthrustofthe contentions advanced on behalfof Reason: Decision: Appealallowed. according tothe learnedcounsel,thereisno reasonwhythe commences fromthedateofsuch MemorandumofUnderstanding, the dateofMemorandum understanding.Iftheofferperiod appellant subsequently, appears the to ‘offer be that period’ the would words still ‘Memorandum commence 89 from of

Legal World Legal World reflected in Part XI which is largely drawn from the Government of islargely Constitution ofthis structure federal The worldwide. nations The ConstitutionofIndiaisamosaic drawnfromtheexperienceof Brief facts: of J&K–Held,yes. J&K –Held,Yes. WhetherConstitutionofIndiaissuperiortothe Kashmir –whetherprovisionsofSARFAESI Actareapplicable totheStateof SARFAESI ActreadwithconstitutionofIndiaand ofJammu& Kurian Joseph&RohintonFaliNariman,JJ.[Decidedon16/12/2016] 30885 of2015]alongwithbatchappeals. Civil AppealNos.12237-12238of2016[ArisingOutOfSLP(C)Nos.30884- STATE BANKOFINDIAv. SANTOSHGUPTA &ANR[SC] LW 02: 01: 2017 of the ‘offer period’ from the date of public announcement would of Understanding. It is also submitted that the commencement agreement whenthepartieshadnotexecutedaMemorandum same shouldnotcommencefromthedateofsharepurchase 90 we do not see how the first argument advanced by Shri Divan on Regulations]. IfthisiswhatcontemplatedundertheRegulations also itsdirectorsandassociates[Regulation2(1)(e)(2)(iii)ofthe a corporate entity[Regulation2(1)(e)(2)(i)oftheRegulations]and acting in concert’ includes ‘person in concert. The expression under Section22(7)isbothontheacquirerandapersonacting (public announcement)dated15thFebruary,2005.Theembargo person actinginconcert.Thisisevidentfromtheletterofoffer In thepresentcase,whileBurrenwasacquirer,UBL acting inconcertareindividualsandnotacorporateentity. the targetcompanywilloperateonlywhenacquirerorpersons as Regulations canhavenoapplicationtothepresentcaseinasmuch In reply,therespondents urgedthatRegulation22(7)ofthe a concludedagreementpursuantthereto. from themarketandthereisnoMemorandumofUnderstandingor primarily haverelevancetoacasewhereacquisitionofsharesis concerned Insofar asthesecondargument advancedbyShriDivanis behalf oftherespondentscanhaveouracceptance. reflect an agreement in principle falling short of a binding contract. into aMemorandumofUnderstandingwhich,inmostcaseswould follow oncetheofferperiodcommencesfromdateofentering point oftheofferperiod.Butsuchaconsequencemustnaturally case, aconcluded agreement is not contemplated to bethe starting in Regulation2(1)(f)oftheRegulations,relevantforpresent reversing the order of the Adjudicating Officer. Consequently the Tribunal wasincorrectinreachingitsimpugnedconclusionsand On theviewthatwehavetakenwilltoholdlearned agreement i.e.sharepurchaseasinthepresentcase. said nottohavecommenced/startedfromthedateofaconcluded to fructify into an agreement,we do notseehowthesame can be If the offer periodcanbetriggeredof byanunderstanding that isyet directed withintwomonthsfromtoday. be depositedinthemanner by orderdated25thAugust,2006shall Officer order of the learned Tribunal is set aside andthat of the Adjudicating the disqualification is

restored. it

correct The

from that

penalty

in appointment the

awarded

definition

on by of

the the

‘offer

board Adjudicating period’ of directors contained

Officer of

Act, asawhole wouldbereferabletoEntries 45and95ofList It isthusclearonareadingof thesejudgmentsthatSARFAESI Recovery Tribunal’ and the ‘Appellate Tribunal’ respectively. substituted of SARFAESIAct,whichapply totheStateofJammu&Kashmir, 18B Sections 17Aand & Kashmiris concerned, State ofJammu asthe outthatinsofar itisnecessary topoint At thisjuncture subject matter“transferofproperty”. possibly besaidtoinpithandsubstance,anActrelatable the being thecase,itisclearthatSARFAESIAct,asawhole,cannot measures ofrecoveryasecureddebtowingtobankand this of property,bywaysaleorassignment,isonlyoneseveral sufficient to pay the secured debt. It is thus clear borrower, topaythesecuredcreditorsomuchofmoneyas is from theborrowerandwhommoneyisdueorpayableto the in writing,anypersonwhohasacquiredofthesecuredassets Banks assecuredcreditorsmayalsorequireatanytimebynotice possession ofwhichhasbeentakenoverbythesecuredcreditor. or appointanypersonasmanagertomanagesecuredassets, the also take overthemanagement ofthebusiness theborrower,and/ can banks debts, the their torealise order themin orselling assigning recourse totakingpossessionofsecuredassetstheborrowerand apart fromSection 13(4)ofSARFAESIAct, Under recovery. which canbetakenoutsideofthecourtprocesstoenforcesuch financial institutions, and sets up a machinery in order to enforce securitization and reconstruction of financial assets of banks and be withinthelegislativecompetenceofParliament. in itsapplicationtotheStateofJammu&Kashmirwouldbeheld The boneofcontentioninthepresentappealsiswhetherSARFAESI banks suchastheStateBankofIndiawhichareallbanks. & Kashmir, 1920. The said Acthas been heldto be inapplicableto withSection140oftheTransferPropertyActJammu collide outside thelegislativecompetenceofParliament,astheywould Interest Act,2002(hereinafterreferredtoas“SARFAESI”)were Assets andEnforcementofSecurity Reconstruction ofFinancial been heldthat various keyprovisionsoftheSecuritisationand by theHighCourt of Jammu & Kashmirat Jammu, in whichit has The present appealsarise out of ajudgment dated 16.7.2015 passed the twoareconcerned. the UnionofIndia,insofaraslegislativerelationsbetween a-vis` of India.ThiscaseisallabouttheStateJammu&Kashmirvis`- accorded specialtreatment within the framework of the Constitution structure. Duetohistoricalreasons,itisaStatewhich federal India Act,1935.TheStateofJammu&Kashmirisapartthis Reason: Decision: Appealsallowed. due to banks and financial institutions, List IreadwithEntry95inthatitdealsrecoveryofdebts 45 the entireActispreferabletoEntry substance that inpithand Applying the doctrine ofpith and substancetoSARFAESI,itisclear Jammu &KashmiraccededtotheIndianUnion. certain eventsthattookplaceatthetimeerstwhileRulerof been accordedaspecialstatusfromtheverybeginningbecauseof state withinthemeaningofArticle1ConstitutionIndia,has It is interesting to note that the State of Jammu & Kashmir, though a owing financial institutions are concerned, it deals with recovery of debts not dealwith“transferofproperty”.Infact,insofarasbanksand substance, SARFAESIdoes pith and In provisions oftheAct. the to

such ‘District banks and Judge’ JANUARY 2017 financial and institutions the I CHARTERED SECRETARY ‘High inter aliathroughfacilitating that the transfer Court’ and certain for

the measures ‘Debts

CHARTERED SECRETARY I JANUARY 2017 91 90 JANUARY 2017 I CHARTERED SECRETARY and canbereferredtoonlyifEntry 95ListIreadwithEntry45 And third,thesubject“Administration ofJustice”isonlygeneral Act. SARFAESI in contained matters of respect in respectively power andjurisdiction onthe District Court andthe HighCourt List Iisasourceoflegislativepower forParliamentconferring what hasbeenmissedbytheimpugnedjudgmentisthatEntry 95 SARFAESI ActisreferabletoEntry45and95ofListI.Secondly, Entries underdifferentLists.Ashasbeenheldbyus,the whole of the provisionsof SARFAESI Act andattach them to different in thisconclusion.Firstandforemost,itisnotpossibletodissect 17A and18BofSARFAESIAct.Thereareatleastthreeerrors Parliament wouldhave nolegislative competence to enact Sections state that sinceitisnotextendedtotheStateof Jammu & Kashmir, Again itiswhollyincorrecttoreferEntry11AofList3and to the High Court, are first and foremost citizens of India. themselves. TheresidentsofJammu&Kashmir,weneedtoremind sense of itsresidents constituting aseparateanddistinctclassin therefore whollyincorrecttodescribeitasbeingsovereignin the Constitution, whichissubordinatetotheConstitutionofIndia.It own its and ofIndia Constitution the outside of sovereignty It isthusclearthattheStateofJammu&Kashmirhasnovestige integral partthereof. the existingrelationshipofStatewithUnionIndiaasan Constitution of Jammu & Kashmir has been made to further define the all, Above &Kashmir. ofJammu Constitution Part IIIofthe in theConstitutionarereferredtoas“permanentresidents”under people ofJammu&Kashmirforwhomspecialrightsareprovided any useoftheexpression“citizen”whilereferringtoitspeople.The sovereignty. Neitheristhere to & Kashmir.Thereisnoreference citizens…” hasbeenwhollyomittedintheConstitutionofJammu SECULAR DEMOCRATIC REPUBLIC andto secure to allits resolved toconstituteIndiaintoaSOVEREIGNSOCIALIST of India,namely“WETHEPEOPLEOFINDIA,havingsolemnly It istobenotedthattheopeningparagraphofConstitution integral partoftheUnionIndia. be an declaration thattheStateofJammu&Kashmirisandshall adult franchise,makesaringing elected onthebasisofuniversal Jammu &Kashmir,whichwasframedbyaConstituentAssembly It isnecessarytoreiteratethatSection3oftheConstitution of theabsolutesovereignpowerStateJammu&Kashmir. It isratherdisturbingtonotethatvariouspartsofthejudgmentspeak with anotherEntryinthesameList–thiscase45I. the speciallawsthatareenactedunderEntry95ListIwhencoupled expression “administrationofjustice”isgeneralandmustgivewayto not so,wehaveseeninthetwojudgmentscitedhereinabove, when Entries45and95ofList1arenotattracted.Evenifthiswere have seen that “Administration of Justice” wouldcome into play only Justice”. UnderSection 5of the Jammu&KashmirConstitution, we Concurrent Listtolegislateonthesubjectmatter“Administrationof contend thatParliamentwould,therefore,havenopowerunderthe & Kashmir.Fromthis,thecounselforrespondents sought to noted byusabove,theEntryisnotextendedtoStateofJammu has been as Concurrent List.Firstandforemost, of the Entry 11A The judgmentoftheHighCourtiswhollyincorrectinreferringto of Jammu&Kashmir. therefore theActas a wholewouldnecessarilyoperateintheState and substancebereferabletoEntries4595ofListI,that that theentireAct,includingSections17Aand18B,wouldinpith parts todifferentEntriesinthelegislativeLists.Itiscleartherefore correct to first dissect an Act into various parts and then refer those Krishna &Orsv.StateofMadras,1957SCR399,thatitisnot I. WemustremembertheadmonitiongivenbythisCourtinA.S. CHARTERED SECRETARY I JANUARY 2017 attempt recognizes thisprovision,hasbeenbrushedaside.Inanycasean Kashmir, yet, ashasbeenheldhereinabove, Rule8(5)provisowhich certain personstopurchasepropertiesintheStateofJammu& 140 oftheJammu&KashmirTransferPropertyActentitlesonly I arenotattracted.Mostimportantly,evenifitisfoundthatSection with noorderastocosts. be proceededwithfurther.Theappealsareaccordinglyallowed coercive methodstakenunderthesaidSectionarevalidandcan result, noticesissuedbybanksintermsofSection13andother We therefore set asidethe judgment of the HighCourt. Asa expressly preserved. are such rights proviso, Rule 8(5) in viewof of India.Furthermore, the groundthatitviolatesanyfundamentalrightofConstitution Transfer ofPropertyActisnotthesubjectmatterchallengeon privileges asmentionedinSection140oftheJammu&Kashmir chapter oftheIndianConstitution.Theconferringsuchrightsand rights on thegroundthatitisinconsistentwithfundamental acquisition of immovable property in the Statecannotbechallenged rights andprivilegesregarding the special & Kashmir of Jammu This Articleonlystatesthattheconferringonpermanentresidents We fail to understand howArticle 35Acarriesthe matter anyfurther. way toSARFAESIAct,andnottheotheraround. 140 oftheJammu&KashmirTransferPropertyActhastogive read withSection5oftheJammu&KashmirConstitution, harmonization isimpossible,itclearthatbyvirtueofArticle246 & KashmirTransferofPropertyActwithSARFAESIAct,andifsuch 2007 dated20.06.2013 oftheLabourCourt,Jalgaon, Maharashtra. industrial disputeleadingtothe awardinReferenceIDANo.42of The appellant,aggrievedbythe terminationfromservice,raisedan Brief facts: only 50%ofthebackwages–whether tenable–Held,No. of backwagesinlieureinstatement–HighCourtmodiﬁedtheawardbyallowing beneﬁtsand50% announcement oftheaward–labourcourtawardedallservice Industrial DisputesAct,1947–dismissalofworkmansuperannuationbefore the Kurian Joseph&RohintonFaliNariman,JJ.[Decidedon06/12/2016] Civil AppealNo.11807of2016(ArisingoutSLP(C)263662016) [SC] MAHARASHTRA STATE ROADTRANSPORTCORPORATION JORSINGH GOVINDVANJARI v. DIVISIONALCONTROLLER LW 03:01:2017 has first to be made to harmonise Labour Laws Industrial & Section 140 of the 91 Jammu

Legal World Legal World These Brieffacts: the provisionsofBOCWActareapplicable –Held,Yes. building–whether Act, 1996readwithFactories1948 –constructionoffactory Act,1996andBuildingsAndOtherConstructionWorkersof Service) Welfare Cess Building andOtherConstructionWorkers (RegulationofEmploymentandConditions A.K. Sikri&N.V. Ramana,JJ.[Decidedon18/10/2016] Civil AppealNo.6223of2016withbatchappeals[(2016)10SCC329)] ORS [SC] LANCO ANPARA POWERLTD v. STATE OFUTTAR PRADESH& LW 04: 01: 2017 was leading evidence.Anddespitegrantinganopportunity,noevidence award thatthemanagementhadnotsoughtforanopportunity that theLabourCourtdidnotfollowprocedure.Itisseenfrom the On facts,itisclearthattheHighCourthasgonewronginholding Heard LearnedCounselappearingonbothsides. Reason: Decision: Appealallowed. entitled to all service benefits except back wages which were limited of terminationtothedatesuperannuation,appellantwouldbe superannuation, viz., 31.05.2005, itwasordered that fromthedate However, noticingthattheappellanthadalreadycrosseddateof The LabourCourtsetasidethedismissalorderdated26.08.2002. 92 passed bydifferent HighCourtsi.e.Court ofAllahabad,High officer were perverse. Therefore, the Labour Court cannot be faulted is beforethisCourt. wages asawardedbytheLabourCourt.Thusaggrieved,appellant compensation ofanamountequivalentto50percenttheback Bombay, Courtof High beforethe award the The respondentchallenged to 50percent. the The LabourCourt,ontheavailablematerialsrecord,foundthat for answeringtheReferenceinfavourofappellant. appointment tillthedateofhissuperannuation. entitled togratuityinrespectofhiscontinuousservicefromoriginal of theLabourCourtisrestored.Consequently,appellantshallbe be sustained.Itishencesetaside.Theappealallowed.award Thus, viewedfromanyangle,thejudgmentofHighCourtcannot an offenceinvolvingmoralturpitude. be termination onaccount of the allegedmisconduct, whichconstitutes moral turpitudeasperthereportofdomesticinquiry.Theremust alleged misconductoftheemployeeconstitutesanoffenceinvolving In ordertodenygratuityanemployee,itisnotenoughthatthe not haveorderedforpaymentofanycompensation. entered by the inquiry officer. There was no attempt on the part of the the High Court was of the view that termination was justified, it could since and unjustified reinstatement wasnotpossibleonaccountofsuperannuation.Incase, was termination the that felt Court the since It appears that the HighCourt itself has granted compensation management beforetheLabourCourttoestablishotherwise.

termination adduced appeals which after are was modified the filed unjustified Labour by the the Court award

on appellants held the by

that basis granting the challenging of findings a a only perverse of the the one-time

finding inquiry orders

appeals. Welfare CessAct.Thisis,innutshell,thesubjectmatterofallthese not suffice and rescue them from their liability to pay cess under the mere obtainingalicenceunderSection6oftheFactoriesActwould absence ofanyoperations/manufacturingprocessand,therefore, this very hue, it is argued that as the benefit under the Factories Act those buildingorconstructionworktowhichFactoriesActapply. In needs tobegiventhesaidprovisionasitcategoricallyexcludes one ofthesubmissionsappellantsisthatliteralinterpretation the scopeandambitofSection2(d)BOCWAct.Asnoticedabove, Keeping inviewtheobjectiveofrespectiveActs,wenowdeal with which theprovisionsofFactoriesActapply. in nature,i.e.whichexcludessuchbuildingandconstructionwork to exclusionary of theAct,particularlythatpartwhichis of Section2(d) The central issueisthe meaningthat istobeassigned thelanguage submissions madeofbothsides,whichthesedeserve. We havebestowedourdueandseriousconsiderationto the Reason: Decision: Appealsdismissed. of on All theHighCourtshavenegatedaforesaidpleaofappellants was notapplicabletothembyvirtueofSection1(4)thereof. work ascontainedinSection2(d)oftheActand,therefore,said those notices by filing writ petitions in the High Courts on the ground (hereinafter referred to as ‘Welfare Cess Act’). They had challenged Buildings AndOtherConstructionWorkersWelfareCessAct,1996 of Service) Act, 1996 (hereinafter referred to as ‘BOCW Act’) and Construction Workers (Regulation of Employment andConditions concerned authoritiesundertheprovisionsofBuildingAndOther In allthesecases,appellantswereissuedshowcausenoticesbythe approach andhavereachedthesameconclusion. Karnataka. TheseHighCourts,however,areunanimousintheir Court ofOrissa,HighMadhyaPradeshand were not covered by the definition of building or other construction Act, they the Factories registered under appellants stood Since the provision oftheFactoriesAct,1948orMines1952apply. that itdoesnotincludeanybuildingorconstructionworktowhichthe “factory” is that establishment where manufacturing process is carried “factory” isthatestablishmentwhere manufacturingprocessiscarried s.2(k) “manufacturingprocess”& 2(l)“worker”],itbecomesclearthat On theconjointreadingofaforesaid provisions[s.2(m)“factory”, appellants underBOCWActorWelfare CessAct. ofthe work construction or building in areengaged who workers the constructionwork,thereisno needforcoveringtheconstruction are alreadygiventotheconstruction workerswhoareinvolvedin which defines ‘building or other construction work’ specifically states The appellantshadsubmittedthatSection2(d)oftheBOCWAct the saidworkersengagedinconstructionwork. and theappellantsweresupposedtopaycessforwelfareof Acts whichweremeantforconstructionworkersbecameapplicable the aforesaid that theprovisionsof the view took respondent authorities the appellantswhereinconstructionworkerswereengaged, As theprocessofconstructioncivilworkswasundertakenby buildings etc.whereintheyhadplannedtosetuptheirfactories. appellants wereintheprocessofconstructioncivilworks/factory operation had commenced by the appellants. In fact, allthese It maybementioned that at the relevant timenomanufacturing under theFactoriesAct,1948. applicable tothembecauseofthereasonthattheywereregistered that the provisionsof BOCW Act orWelfare CessAct werenot

factory the ground defined that the under appellants JANUARY 2017 Section would 2(m) I CHARTERED SECRETARY not of

the covered

Factories by the Act definition in the

CHARTERED SECRETARY I JANUARY 2017 93 92 JANUARY 2017 I CHARTERED SECRETARY the words ‘but does not include any building or other construction order toseewhetherexclusionclauseapplies,weneedinterpret first part of the definition contains the nature of activity; second part (63 of1948),ortheMinesAct,1952(351952),applies’.Thus, construction worktowhichtheprovisionsofFactoriesAct,1948 maintenance by thesaidexpression,namely,construction,alterations,repairs, part, differentactivitiesarementionedwhichtobecovered is to be accorded to find the legislative intent. To our mind, this is thatlanguagethereofunambiguousandliteralconstruction of Section2(d) of theBOCWAct.Theargumentappellants We nowadverttothecoreissuetouchinguponconstruction the building also do not fall within the definition of ‘worker’ under the power. Obviously,theworkerswhoareengagedinconstructionof of theseappeals,isgeneration,transmissionanddistribution carrying outtheparticularmanufacturingprocess,which,inmost manufacturing process.Infact,thebuildingisbeingconstructedfor concerned, constructionofbuildingisnottheirbusinessactivityor in thesaidmanufacturingprocess.Insofarastheseappellantsare pertinent tonotethatitcoversonlythoseworkerswhoareengaged process ormanufacturingactivityisthusaprerequisite.Itequally on withorwithouttheaidofpower.Carryingthismanufacturing are of the firm opinion that they do not apply. The provisions of the apply totheconstructionofbuilding/projectappellants. We The questionisastowhethertheprovisionsofFactories Act work towhichtheprovisionsofFactoriesAct…...... apply’. it satisfies first two elements of the definition pointed out above. In clause by stipulating that it does not include ‘any building or other are carried out. The third part of the definition contains exclusion those buildingsorworksinrelationtowhichtheaforesaidactivities with the building or construction work is in three parts. In the first submission isofnoavail.Section2(d)theBOCWActdealing the definition of ‘building and other construction work’ in Section 2(d) Welfare CessActaswell.Couldthisbetheintentionwhileproviding factory, wouldstandexcludedfromtheprovisionsofBOCWActand building undertaken bytheappellantswhichistobeusedultimatelyas accepted, theconstructionworkersengagedinof Having regardtotheabove,ifcontentionofappellantsis are notcoveredbytheprovisionsofFactoriesAct. parties areat Factories Act.Onthesetwoaspects there is no cleavage and both is It isnotindisputethatconstructionoftheprojectsappellants to whichtheprovisionsofFactoriesActorMinesapply. work construction other or building those excludes part third and out contains thesubjectmatterinrelationtowhichactivityiscarried of BOCWAct?Clearanswertothishasbeinthenegative. nor ofBOCWAct/WelfareCess Act.Thatcouldnothavebeenthe buildings/projects will neither get the benefit of the Factories Act the constructionworkerswhoare engagedintheconstructionof of thisprovisionassuggested bytheappellantsisaccepted, and WelfareCessAct.Aspointed outabove,iftheconstruction enactment ofBOCWAct achieved bythe sought tobe is which definition The aforesaidmeaningattributedtotheexclusionclauseof the Chemical Industriesv.UnionofIndia,(1979)4SCC573. us isintunewiththeapproachadoptedbythisCourtOrgano the saidclause.Thismeaningtoexclusionclauseascribed by clause istobeinterpretedandthatwouldtheplainmeaning of the activityofconstructionproject.Thatishowexclusion starts forwhichthebuilding/projectisbeingconstructedandnot to Factories Actwould“apply”onlywhenthemanufacturingprocess covered CHARTERED SECRETARY is by also . What follows is that these construction workers ad idem. What followsis that these construction workers the or demolition. definition in consonance of Second “building I JANUARY 2017 with part or the other of the objective construction definition and is aimed work” purpose as at

and nottobediscarded. class involvedinconstructionactivity,thatneedstobeachieved care ofaparticularnecessityi.e.welfareunorganisedlabour contained inBOCWAct,sincethepurposeofthisActistotake Statement ofObjectsandReasons triggered andasperthe get counsel for the respondents that ‘superior purpose’ contained in In taking the aforesaid view, wealso agree with the learned etymological excursions. certain kindsofmischief,theCourtisnottomakeinroadsbymaking interpretation. Wherelegislationis designed togive relief against time andagain. Welfare statutes must, of necessity, receive abroad are tobeinterpretedhasbeenstatedandrestatedbythisCourt imperative, irrespectiveofanything Purposive interpretationinasocialameliorationlegislationisan to theconstructionworkers. pieces of social security legislation to provide for certain benefits intention oftheLegislature.BOCWActandWelfareCessare are welfare legislations. Here the concept of ‘felt necessity’ would Welfare CessActontheotherhand,areinvolved,bothofwhich enactments –theFactoriesActononehandandBOCWAct/ BOCW ActandWelfareCesshastobekeptinmindwhentwo in othernewspapers circulatedinHyderabadand Secunderabad. advertisement ismuchhigherthan theratesforsimilaradvertisement Informant hasaverredthatthe rate quotedbytheOPsforsaid The rates chargedbythe OPs was aroundRs.1,00,000/-. The in theHyderabadeditionof newspapers publishedbytheOPS. caution notice Informant wantedtopublisha It isaverredthatthe against buyingdisputedproperties etc. transactions of land/ realestate,cautioning prospective purchasers publish noticesonbehalfofhisclientsforcertainpurposessuch as city ofHyderabad.ItisstatedthattheInformantrequired to As pertheinformation,Informantisalawyerpracticingin the Brief facts: higher feesthanothernewspapers–whetherabuseofdominanceHeld, No Competition Act,2002–publicationoflegalnoticesinnewspapersOPcharging Justice G.P. Mittal.[Decidedon05/12/2016] Devender KumarSikri,S.L.Bunker, SudhirMital,AugustinePeter, U.C.Nahta, Case No.89of2016 ANR [CCI] RAKESH SANGHIv. BENNETT, COLEMAN&COMPANY LTD & LW 05:01:2017 Competition else. How labourlegislations else. Law 93

Legal World Legal World is closedundertheprovisionsof Section26(2)oftheAct. the matter Accordingly, of theOPsininstant matter. against any of contraventiontheprovisions ofSection4theActismadeout and notice inthenewspapersgeographicalareaofHyderabad It issobecausetheInformanthadproposedtopublishsaid may beconsideredastherelevantgeographicmarketinthiscase. observes thatthegeographicareaofHyderabadandSecunderabad case. Withregardtotherelevantgeographicmarket,Commission this may beconsideredastherelevantproductmarket in newspapers to publicationofadvertisementsincludingpublic/legalnoticesetc.in to givethemwidepublicity.Thus,theprovisionofservicesrelating publishes public/legalnoticesinthenewspapersofOPsorder in the Courts of Hyderabad andoninstruction of his clients, he The CommissionnotesthattheInformantisanAdvocatepracticing and SecunderabadintheStateofTelangana. public noticesintheirnewspapersthetwincitiesofHyderabad the conductofOPsquotingexorbitantratesforadvertisinglegal/ available onrecord.ItisobservedthattheInformantaggrievedby materials the and information the perused has Commission The Reason: Decision: Complaintdismissed. in thesaidlegalnotice. merely thenameofaPrivateLimitedCompanyhasbeenmentioned non-commercial advertisement, into acommercial advertisement as averred thatOP1hasconvertedhislegalnotice,whichfallsunder as comparedto non-commercialadvertisements. The Informant has It isstatedthatforcommercialadvertisements,itchargingmore commercial andnon-commercialadvertisementsinitsnewspaper. As pertheinformation,OP1ischargingtwodifferentratesfor 94 In the light of the above analysis, the Commission finds that no case of theActdoesnotarise. the questionofabusedominancebythemintermsSection 4 the absenceofdominanceOP1or2inrelevantmarket, OP 1nor2isfoundtobedominantintherelevantmarket. In or consumerstherelevantmarketinitsfavour.Therefore,neither in the relevant market as defined supra or to affect its competitors possess themarketpowertoactindependentlyofcompetitiveforces Therefore, theCommissionisofviewthatneitherOP1nor 2 more choicestotheInformantwhicharesubstitutableinnature. number ofothernewspapersintheaforesaidmarketalsoprovides power independentofmarketforcesandthepresencesuchlarge Secunderabad preventstheOPsfromexercisinganykindofmarket other EnglishnewspapersandregionaldailiesinHyderabad and geographical market.Therefore,thepresenceofalargenumber of localnewspapersalsoincirculationtheaforesaidrelevant daily TheDailyMilapareincirculation.Besides,thereanumber Hindi the and Decca; Rahnuma-i and Etemaad The Daily, Munsif The Times; themajorUrdudailynewspaperssuchasTheSiasatDaily, Hindu, TheDeccanChronicle,BusinessStandardandEconomic the majorEnglishdailynewspaperssuchasTheTimesofIndia, The Prajasakti, Andhrabhoomi, AndhraPrabhaandNamaste Telangana; newspapers suchasEenadu, Sakshi, Vaartha, Andhrajyothi, Surya, twin citiesofHyderabadandSecunderabad,themajorTelugudaily With regardtodominance,theCommissionobservesthatin as therelevantmarketinthiscase. newspapers inHyderabadandSecunderabad’maybeconsidered in the including public/legalnoticesetc. advertisements publication of Secunderabad. Accordingly, ‘the provision of services related to

‘territory of India’. As such, the relevant market in this case may be relevant geographicmarketinthis casemaybeconsideredasthe distinctly homogenousmarketconditions intheterritoryofIndia, it isnotedthatsincethemarket for3Dmodellingsoftwareexhibits modelling software’.Withregard totherelevantgeographicmarket, 30 ‘BOCAD licenses’ over a period of the next 3 years for a total Services International S.A. Belgium on26th August, 2010to purchase BOCAD with agreement an into entered Informant the that stated It is globally. procurement andconstruction(EPC)companiesinIndiaaswell preparation ofstructuralsteelfabricationdrawingstoengineering, of providingengineeringsupportintheform3Dmodelingand As pertheinformation,Informantisengagedinbusiness Brief facts: constitutes anti-competitionpracticeandabuseofdominance–Held,No Competition Act,2002–softwarelicencecontractsrestrictiveclauseswhether [Decided on05/12/2016] Devendra KumarSikri,SudhirMital,AugustinePeter, U.C.Nahta. Case No.67of2016 INDIA PVTLTD [CCI] VEER PRATAP NAIKv. AVEVA INFORMATION TECHNOLOGY LW 06:01:2017 product market in this case may be defined as the market for ‘3D scratch. Basedontheabove,Commissionnotesthatrelevant tools allowforbuildingandcustomisingstructuralmodelsfrom architecture, interiordesign,printing,animationetc.Thesesoftware 3D modelling engineeringsoftware isused inindustries like 3D the informationavailableinpublicdomain,itisobserved that into anewagreementwiththeOPforsupplyof3Dsoftware.From was acquiredbyAVEVA,theInformanthadentered after BOCAD Informant forsupplyof30BOCAD3Dlicenses.Itisobserved that emanates fromanagreemententeredintobetweenBOCADand the The disputebetweentheInformantandOPinpresentcase Reason: Decision: Complaintdismissed. defined as the market for ‘3D modelling software in India’. Thereafter, balance 10licensesof BOCAD aspertheir earlieragreement. contacted the Informant andinsisted that the Informant buy the It isaverredthat,afterthemerger,AVEVA’srepresentativeshad i.e. beforeMay,2012. licenses werepurchasedbeforeBOCADgotacquiredbyAVEVA consideration of10,000Euroseach.Itisaverredthat20these restrictive conditionsinthelicenses. OP andthathadabuseditsdominancestipulated with the of agreemententeredwithBOCADvis-a-visthe alleged thattherewerefundamentaldifferencesbetweentheterms of Rs10,710,000/-onayearlybasisfromtheInformant.Itisfurther had collected the first year Annual Maintenance Contract (AMC) fee of itsproductswerealsoavailableonamonthlyrentalbasis,andit It is stated that the OP hadconcealed the information that the licenses 1st January,2014. agreement withtheOPvideLicensesAgreementCA-AP1102dated entered intoan regard, theInformant In this 10 BOCADlicenses. Management System (PDMS) Software’ alongwith the balance OP

also JANUARY 2017 6 offered licenses I CHARTERED SECRETARY of the

‘Plant

Design

CHARTERED SECRETARY I JANUARY 2017 95 94 JANUARY 2017 I CHARTERED SECRETARY In the light of the above analysis, the Commission finds that no case of theprovisionsSection3Act. any anti-competitive intermsof as termed can be agreement which hold anygroundastheinformationdoesnotdisclosekindof the CommissionnotesthatallegationofInformantdoesnot With regardtothecontraventionofSection3Actinmatter, of Section4theActismadeoutagainstOPininstantcase. does notarise.Thus,nocaseofcontraventionanytheprovisions relevant market, the questionof abuseof dominant position bythe OP The CommissionnotesthatintheabsenceofdominanceOP cannot beconsideredasadominantplayerintherelevantmarket. independent ofmarketforcesintherelevantmarket.Therefore,OP not enjoyapositionofstrengthwhichwouldenableittooperate Based ontheabove,CommissionobservesthatOPdoes 24.3% inEDTAEC). in EDT)andBentley(havingamarketshareof18.7%EDT (having amarketshareof30.4%inEDT-PlantDesignand16.5% market shareof36%inEDTand53.4%-AEC),Intergraph faces stiffcompetitionfromplayerssuchasAutodesk(havinga on aworldwidebasis. Further, accordingto the said report,AVEVA market forEDTPlantDesignand1%intheAEC, it hadamarketshareof9.5%intheforEDT,16.7%, Design ToolsforPlantandInfrastructure”whichrevealsthatin2014, submitted areportofARCAdvisoryGroup(report)on“Engineering market power.OPhasfurther or EDTAEC,itdoesnothaveany the marketsforEngineeringDesignTools(EDT),EDTPlant During thecourseofhearing,OPhassubmittedthatevenin being manufacturedbyOP. selling 3Dsoftwareproductswhicharesubstitutablewiththe that thereareother3Dsoftwarecompanieswhichmakingand from theinformationavailableinpublicdomain,itisobserved company sellingitsassets– becomingproﬁtable–whetherexemption provided fortheconsiderationofgranting exemptionfromcapitalgainstax– SICA readwithIncomeTax Act–BIFR sanctionsrehabilitationscheme– S. RavindraBhat&DeepaSharma,JJ. [Decidedon05/12/2016] W.P. (C)5036/2016 COMMISSIONER OFINCOMETAX (RECOVERY)&ANR[DEL-DB] LAXMI AUTOMATIC LOOMWORKSLTD v. DEPUTY LW 07:01: 2017 the matterisclosedunderprovisionsofSection26(2)Act. the ActismadeoutagainstOPininstantmatter.Accordingly, of contraventionanytheprovisionseitherSection3or4 With regard CHARTERED SECRETARY to dominance of OP I JANUARY 2017 in the relevant market Laws defined Tax supra,

proceedings andallpriorproceedings. the casefordurationthat matterremainedpendinginthese or penaltyonthecapitalgainstax amountsinthecircumstancesof facts, a direction isissuedtotherespondents not to chargeinterest and circumstancesoneachoccasion. Havingregardtothesepeculiar occasions ledto fresh ordersbaseduponfresh assessment of the facts been crystallized.Theremandtotheincometaxauthoritiesonthree completed tilldate,thepetitioner’sliabilityhadnotinonesense The Courtisaware,atthesametimethatinassessments payment ofcapitalgainstaxisnotwarrantedcannotbeheldillegal. the circumstances,viewofrespondentsthatexemptionfrom the normalcourseofany normal business enterprise’s functioning. In cannot beruledout.Thatsuchlossesmightarisecouldalsowithin of itsincurringlossesintheeventpaymentcapitalgains tax preference shares is inthe future. In the circumstances, the possibility that the company has shown profitability. Its liability to redeem the crores), is justified or an arbitrary one. There is no denial of the fact for exemptionfrompaymentofcentralgovernmenttaxes(ofRs.3.31 In thesecircumstances,thequestioniswhetherrejectionofrequest its judgment noted that profitability has indeed been on the increase. and i.e. thatthecompanyisinpossessionof funds As totheotheraspect, objective assessmentofmaterialsonrecord. the incometaxauthority’sviewcannotbefaulted.Itisbasedupon on the basis of the actual figures of profitability in the circumstances therefore, iswhethertheincometaxauthority’srefusaltograntrelief is asubstantialonetotheextentofRs.14.09crores.Thequestion, rehabilitation scheme.Thatreliefhasconcededlybeengranted;it to the modified scheme. Now, as far as the later aspect is concerned, less than half the projected profits for a certain period having regard different story,i.e.thatthecompanyhasfundsandtherewas figures now based upon the functioning after rehabilitation reveal a now feel that whilst the decision of carry forward was justified, the company’s functioningbecamematerial.Theincometaxauthorities those 15.02.2016 that this Court’sdecisionon for rationale That wasthe worth andhadinfactmovedoutoftherehabilitationphase2011. projections. Itisamatterofrecordthatthecompanyachievednet tooknoteofthe whentheyactually by theincometaxauthorities 2009, theconsiderationandgrantofrelieftookplaceon29.12.2012 This Court notices that though the modified scheme was issued in of thecaseiswarranted. absorption having regard to projected profits in terms of the modified granting relief ontwoaspects -carryforwardbusinesslossesandtheir the presentcase,BIFRdirectedincomeauthoritiestoconsider of BIFR.In 32 oftheActconfersprimacyuponorders Section Reason: Decision: Petitionallowed. The Brief facts: from capitalgainstaxshouldbeallowed–Held,No. by year2018-19,i.e.inthethreeyearsfollowing2014-15. for redemptionof6%cumulativeredeemablepreferencesharesdue to create Capital Redemption Reserve of Rs.850 lakhs out of profits as on31.03.2015amountstoRs.887.23lakhsandthefactthatithas positive withoutconsideringthattheCompany’scarried-overlosses and weightagetothefactthatPetitioner’snetworthhasturned sought toberevivedbyBIFR,givingunwarrantedimportance of exemptionfromCapitalGainsTaxcanbedeniedtoanundertaking as issue actual of

late, that

figures shown arises in profitability, should the present be

the taken Writ

Court Petition note

has of. in is the whether It is

previous here the 95 that benefit

part the

Legal World Legal World Both Reason: Decision: Appealdismissed. appeal bytheappellanttenant. respondent whichwasupheldbytheHighCourt.Hencepresent the AdditionalRentControllerpassedanevictionorder in favour of the On aproperappreciationoffactsandevidencesavailableonrecord, son forhisbusiness. respondent landlordtogive her other propertiesavailableforthe by the respondent onvariousgroundsincludingthat there areseveral The appellantcontrovertedtheclaimofbona fide requirementsetup location forthesaidbusiness. sanitary andhardwareproductsasthesuitpremiseshasaprime her sonrequiredthepremisesforrunninghisseparatebusinessof requirementthat from thesuitpremisesongroundofbona fide registered sale deed. The respondent sought eviction of the appellant a under premises the acquired respondent/landlady the Subsequently, premises.of the owner by theerstwhile suit scheduledpremises one smallroom.Appellant/tenantwasinductedastenantinthe The suit scheduledpremisescomprisesof twobigroomsand Brief facts: on thisground–Held,No. landlord –hasseveralotherpropertieswhetherevictioncouldbedenied requirement ofthe tenant –bonaﬁde of – eviction Control Act,1954 Rent Delhi Shiva KirtiSingh&R.Banumathi,JJ.[Decidedon08/11/2016] Civil AppealNo.9941of2014[(2016)10SCC209] BHUPINDER SINGHBAWA LW 08:01:2017 paragraph evenwhileupholdingtheliabilityto paycapital gainstax. Nocosts. The writpetitionisallowedintermsofthedirectionspreceding 96 a separate business of sanitary andhardware. The courts held that the earns asalaryofRs.50,000/-cannot beanimpedimenttohisrunning Director inthefamilycompanyM/s. JaishreeGranitesPvt.Ltd.and Firstly, Itwasheldthatthefact respondent’ssonisengagedas The concurrent findings recorded by the courts below are as follows: accommodation. of hersonandavailability/non-availability ofalternativesuitable dispute relatesto tenant relationshipbetweenthepartiesisnotindispute.The only by recording concurrent findings. First and foremost, the landlord- requirement underSection14(1)(e)ofDelhiRentControlAct,1958 the respondentagainstappellantongroundof the courts bona below requirement of the respondent for business fide requirementoftherespondentforbusiness have

v. ASHADEVI[SC] allowed the eviction General petition Laws bona filed fide by

warranting interference withtheimpugnedjudgment. on evidence and materials on record, we do not find any infirmity respondent observed thattheappellantimpliedlyadmittinghusbandof basement ofpropertyNo.D-201.Havingsonoted,theHighCourthas The shop hersonshouldstartthebusiness from. the respondentcannotbedictated bytheappellantastofromwhich suitable premisesforcarryingon thebusinessbyhersonandthat to holdthatitisperfectlyopen tothelandlordchooseamore on theratioofAnilBajaj&Anrv.VinodAhuja2014(6)SCALE 572 running businessofrespondent’sson.TheHighCourtrightlyrelied rightly concludedthatnoalternativepremisewaslyingvacant for In lightoftheabove,AdditionalRentControllerandHighCourt accommodation doesnotariseinthepresentcase. the respondentandthusquestionofitssuitabilityasanalternate ground floor of property No. D-201 does not belong to husband of circumstances, D-201 isownedbythehusbandofrespondent.Insuchfacts and in The courts also noted that the appellant has not specifically pleaded if not on the first or second floor, respondent’s son can occupy the that inhiscrossexamination,theappellanthassuggested that noted who iscarryingonhisbusinessinthesaidpremises.Thecourtalso D-201 is in occupationofbrother-in-law (Devar) of the respondent examination that the first floor and second floor of the property No. also. Thecourtsnotedthattheappellanthasadmittedinhiscross- business asitwaslocatedonthemainroadandinamarketarea respondent whichcouldhavebeensuitablyusedforrunningherson’s on finding that the alphabet ‘B’ appearing after number 285 under the establishing his claim. However, the High Court rejected the said claim had producedacopyofIncomeTaxReturnstherespondentfor is ownedbytherespondentandnotherhusband.Theappellant considered theallegationofappellantthatpropertyNo.285-B The courts of therespondent. run bythehusband granite and marble outlet for asaretail wasfoundalreadyinoccupation respondent The propertyNo.285-Bwhichwasownedbythehusbandof other suitablepremiseswasavailableinthemarketarea. area andthus,theywereunsuitableforoccupationespeciallywhen Rajouri Garden,RingRoad,NewDelhiwerenotlocatedinamarket Block-A-1, W.H.S.KirtiNagar,NewDelhiandPropertyNo.D-12, Granites Pvt.Ltd.viz.Propertynos.43,44,45and46situatedat that the properties inthe nameof family company, M/s. Jaishree The appellanthadsuggestedalternativepremises.courtsfound respondent’s sonforrunninghisbusiness. suggested bytheappellantwhichcanpreferablybeoccupied below consideredthesuitabilityofeveryalternativeaccommodation thus, noreliefshouldbegrantedtohim/her.Secondly,thecourts including the ground floor of property No. D-201 was available to the Delhi isconcerned,theappellantmadeacasethatentireproperty So faraspropertybearingNo.D-201,MansarovarGarden,New the marbleandgranite. used byM/s.JaishreeGranitesPvt.Ltd.asgodownforthestockof by thehusbandofrespondent,courtsfoundthatitisbeing with regardtopropertyNo.A-2/53atKirtiNagarwhichisalsoowned to thehusbandofrespondentandnotrespondent.Also, had himselfstatedinhispleadingsthatpropertyno.285-Bbelonged of therespondent.Moreover,HighCourtfoundthatappellant head ofrentalincomeswaswronglywrittenintheIncomeTaxReturn already engaged in some other business, he is acting malafidely and for runningbusinessofhis/heryoungsonwhoisanMBA,and law doesnotprovidethatifalandlord/landladyrequiresthepremises his concurrent written is not submissions the findings the

courts owner JANUARY 2017 recorded recorded of that the the ground by I CHARTERED SECRETARY concurrent ground the floor courts of floor

property finding below of property of No. are fact D-201. based that No.

From4 the Government

n NATIONAL COMPANY LAW TRIBUNAL (AMENDMENT) RULES, 2016 n DELEGATION OF POWERS TO RDs n NATIONAL COMPANY LAW TRIBUNAL (PROCEDURE FOR REDUCTION OF SHARE CAPITAL OF COMPANY) RULES, 2016. n COMPANIES (COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS) RULES, 2016. n CORRIGENDUM n DATE OF COMING INTO FORCE CERTAIN SECTIONS OF THE COMPANIES ACT, 2013. n COMPANIES (REMOVAL OF DIFFICULTIES) FOURTH ORDER, 2016 n COMPANIES (TRANSFER OF PENDING PROCEEDINGS) RULES, 2016. n CLARIFICATION REGARDING DUE DATE OF TRANSFER OF SHARES TO IEPF AUTHORITY. n RELAXATION OF ADDITIONAL FEES AND EXTENSION OF LAST DATE IN FILING OF FORMS MGT-7 (ANNUAL RETURN) AND AOC-4 (FINANCIAL STATEMENT) UNDER THE COMPANIES ACT, 2013- STATE OF JAMMU AND KASHMIR- REG. n COMPANIES (REGISTRATION OFFICES AND FEES) SECOND AMENDMENT RULES, 2016.

CHARTERED SECRETARY I JANUARY 2017 97 77740 21584 / 85 / 75070 35588 -Pune/Mumbai/Gurgaon/Bangalore

Are you on ICSI bi-annual Convocation During the months of November-December, 2016, the Institute organised Dissemination its bi-annual eastern, southern and western region Convocations at Kolkata, Chennai and Mumbai for awarding certificate of membership Board of Stock Exchange? to the Associate members admitted during the period 1st April, 2016 to 30th September, 2016; and also to award prizes/medals to meritorious students (National) and winners of National level student competitions. Particulars EIRO SIRO WIRO Date 26th November, 10th December, 17th December, 2016 (in We offer comprehensive 2016 2016 two sessions) Venue Vidya Mandir BKR Convention Birla Mathushri Sabhagar advisory services for the companies Auditorium, Centre, No.32 (Bombay Hospital Trust), Birla High School Venkatesan 19, Marine Lines, Mumbai transferred to dissemination board (Junior Section), Street, T Nagar, 1, Moira Street, Chennai Kolkata Number of 220 167 591 members who were awarded Associate membership certificates on the occasion Chief Guest Shri Gyanesh Ms. Pooja Session 1 Chaudhary Kulkarni, IAS, Shri B.R. Jaju MD & CEO, State Project Chief Financial Officer, DB Contact at: 022-66481818 Vikram Solar Pvt. Director, Power Group Ltd., Kolkata , Sarvashikshya or West Bengal Abhayan, Session 2 Email at: [email protected] Chennai Shri Kailashnath Adhikari Managing Director, Governance Now

98 JANUARY 2017 I CHARTERED SECRETARY 01 6. 5. 4. Intheprincipalrules,inrule2,- 3. 2. 1. namely:- to amendtheNationalCompanyLawTribunalRules,2016, Central Governmentherebymakesthefollowingrulesfurther of section469theCompaniesAct,2013(182013), In exerciseofthepowersconferredbysub-sections(1)and(2) Notification No. GSR 1159(E) dated 20.12.2016] India, Extraordinary,Part-II,Section(3)Sub-section(i)vide Gazette ofin Published 1/30/2013-CL-V) dated20.12.2016. [Issued by the MinistryofCorporate Affairs vide[(F. No. the advocate or authorised representative engaged in representative whether engagedinthecase ornotif the words,“orbyanyother advocateorauthorised In the principalrules, inrule27, insub-rule(1), for substituted. be shall 3C” the FormNo.NCLT “in prescribed”, thewords In theprincipalrules,inrule25, forthewords“inform by theAct.”. the petitioners by a single petition is specifically permitted (2) Suchpermissionshallbegrantedwherethejoiningof a commoninterestinthematter. of actionandthenaturereliefprayedfor,thattheyhave a single petition if it is satisfied, having regard to the cause permit morethanonepersontojointogetherandpresent “23A. Presentation of joint petition. -(1)The Benchmay be inserted,namely:- In theprincipalrules,afterrule23,followingshall (b) (a) “Definitions and forms etc.” shall be substituted; for the heading, “Definitions, forms and etc.”, the heading (hereinafter referredtoastheprincipalrules),in“Part-I”, In theNationalCompanyLawTribunalRules,2016, in the Official Gazette. (2) Theyshallcomeinto force onthedate of theirpublication Tribunal (Amendment)Rules,2016. (1) TheserulesmaybecalledtheNationalCompanyLaw CHARTERED SECRETARY or acompanysecretary inpractice” shallbesubstituted. accountant inpracticeoracost a companysecretary”, the words“orachartered a charteredaccountantorcost in clause(9),sub-clause(d),forthewords“or be omitted; shall application” “interlocutory words (5),the clause in

(Amendment) Rules,2016 National CompanyLawTribunal I JANUARY 2017 Corporate Laws

9. 8. In the principal rules, in rule 38,− 7. (3) Theapplicant shallatleastfourteendays beforethe thereasonsforopposing thevariation. (h) (g) (f) (e) (d) (c) (b) theparticularsofregistration; (a) the caseandshallsetout- accompanied bydocumentsrequiredforthepurposesof (2) The application in that class shall beset out inthe Schedule to the application. of suchsharesheldandpercentage oftheissuedshares number of shares heldby each of them, aggregate number the theshareholders, ofall addresses namesand the letter ofauthorityshallbeannexedtotheapplication,and applicants topresenttheapplicationontheirbehalf,such shareholders so entitled, authorising the applicant or (2) ofsection48bytheletterauthoritysigned class entitledtoapplyforcancellationundersub-section of anyclassismadeonbehalftheshareholdersthat to cancelavariationoftherightsattachedshares sub-section (2)ofsection48.-(1)Whereanapplication “68A. Applicationtocancelvariationofrightsunder be inserted,namely:- In theprincipalrules,afterrule68,followingshall provided that the reliefs are consequential to oneanother.”. a singlecauseofactionandmayseekoneormorereliefs upon petition shallbebased A “38A. Multipleremedies- be inserted,namely:- In theprincipalrules,afterrule38,followingRuleshall the documentandprovidesproofofitsdelivery. the Explanation.—For thepurposesofsub-rules(1)and(2), (iii) (ii) (i) such chargesashemayorder”shallbesubstituted. approved forthepurposebyRegistraronpaymentof the case authenticates such certificate or prepared by a authenticates such certificate or prepared by a translator “or iftheauthorisedrepresentativeengagedincase payment ofsuchchargesashemayorder”,thewords translator approvedforthepurposebyRegistraron term resolution waspassed;and the dateonwhichconsent wasgivenorthe number ofsharesheldbythem; variation orwhovotedagainst theresolution,and the numberofshareholderswho didnotconsenttothe variation andthenumberofshares heldbythem; to thevariationorvotedinfavourofresolutionfor of shareholderstheclasswhogavetheirconsent have beenascertainedbytheapplicants,number the natureofvariationmade,andsofarasmay have beenvaried; the totalnumberofsharesclasswhoserights various classesofshares; authorising thevariationofrightsattachedto the provisionsofmemorandum or articles the rightsattachedtoeachclassofshares; which thesharecapitalofcompanyisdividedand the capitalstructure,differentclassesofsharesinto inserted, namely:- after sub-rule(2),thefollowingExplanationshallbe be inserted; “acknowledgement due”thewords,“orbycourier”shall in sub-rule(2),clause(b),afterthewords, by courier”shallbeinserted; in sub-rule(1),afterthewords“bypost”,“or ‘‘courier’’ means a Form No. NCLT. 1 NCLT. No. Form person or agency which shallbe 99 delivers

FROM THE GOVERNMENT date of the filing of the petition advertise the application in NOTICE OF MOTION accordance with rule 35. Date: ______(4) Where any objection of any person whose interest is From: ______(Insert name of party filing the Motion) likely to be affected by the proposed application is received by the applicant, a copy thereof shall be served to the Registrar of Companies and Regional Director on or before To : The National Company Law Tribunal the date of hearing. (5) On any application, the Tribunal, after hearing the Concerning: applicant and any other person, as appears to it, to be (Name and file number of matter being considered by the National Company Law Tribunal) interested in the application, may, if it is satisfied, having Name:______regard to all the circumstances of the case that the variation would unfairly prejudice to the shareholders of the class File No:______represented by the applicant, cancel the variation and shall, The Party named above requests that the Tribunal grant the following relief: if not so satisfied, confirm the variation for reasons to be ______recorded: (Insert the relief or order sought) Provided that the Tribunal may, at its discretion, make such orders as to cost as it thinks fit.”. In terms of ______10. In the principal rules, in rule 69, sub-rule (3), shall be (Insert the section of the Act, or the Rules/Regulation, that provides for the order or relief sought) omitted. 11. In the principal rules, in rule 70, sub-rule (6), shall be For the following reasons: omitted.

FROM THE GOVERNMENT 12. In the principal rules, after rule 76, the following rule shall (Insert a concise statement of the circumstances, and the particulars of the request) be inserted, namely:- ______“76A. Application under section 130.- The Central Government, the Income-tax authorities, the Securities and In support of this Application, the applicant has attached an affidavit setting out the facts Exchange Board of India, any other statutory regulatory on which the Applicant relies. body or authority or any person concerned may file an application in Form No. NCLT. 9 for re-opening of books Name and Title of person signing on behalf of Applicant: of accounts and for re-casting of financial statement of a Authorised Signatory and Address: company under section 130 of the Act and such application ______shall be accompanied by such documents as mentioned in ______Annexure-B.”. Tel No. 13. In the principal rules, after rule 83, the following rule shall Fax No. be inserted, namely:- e-mail: “83A. Application under sub-section (1) of section 244.- An application in Form No. NCLT. 9 may be filed before This form is prescribed under Rule 4 under NCLT Rules, 2016. the Tribunal for waiver of requirement of clause (a) or (b) For rehabilitation : Rehab. Petition No. of Section 244 of the Act which shall be accompanied by For Transferred Transfer Petition such documents as mentioned in Annexure-B.”. (CLB/BIFR/AAIFR/HC) No. 14. In the principal rules, in rule 112, in sub-rule (3), after the Matters from the : (CP. No. OR……………………) words, “shall be paid by means of”, the words, “an Indian CLB/BIFR/AAIFR/HC Postal Order or by” shall be inserted. For Other matters : Company Petition No. 15. In the principal rules, in the Schedule of Fees, in serial (b) after Form No. NCLT 3B, the following Form shall be inserted, number 10, under the heading ‘Nature of application/ namely:- petition’, for the word, “deposition” the word, “depositor” shall be substituted. “FORM No. NCLT 3-C 16. In the principal rules, in Annexure ‘A’,- [see rule 25] (a) for Form No. NCLT. 3, the following Form No. NCLT. 3 shall be substituted, namely:- Before the National Company Law Tribunal (Caveat No. ____of 20 ) FORM NO. NCLT. 3 Heading as in FORM No. NCLT 4. [See rule 34] Memorandum of Caveat 1. Set out details of the order against which appeal or application or petition is expected. Before the National Company Law Tribunal 2. (a) Address for service on the caveator ______Bench (b) Address for service on the Counsel for the caveator I.A. No. ______/20__ 3. Specify the authority who passed the order with reference number and date (enclose in copy of order appealed against). C.P./C.A. No.______20__ 4. Set out the details of expected Appellant (s)/Petitioner (s)/ Applicant(s)/ With address In the matter of Companies Act, 2013 (i) ______AB ...... Applicant/Petitioner (ii) ______Vs. (iii) ______CD ...... Respondent

100 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 101 5. Prayer : Let no orders be passed in the appeal expected to be filed or in any petition Delegation of Powers to RDs or application or interlocutory application that may be preferred by the expected Appellant/Petitioner/Applicant without service of notice on the caveator. The caveator undertakes to accept service of appeal or petition or application 02 and appear before this Tribunal on the date and time at which the appeal/petition/ [Issued by the Ministry of Corporate Affairs vide [(F. No. 2/31/ application is moved by expected appellant/petitioner/ Applicant. CAA/2013-CL-V) dated 19.12.2016. Published in Gazette of Dated at ______Day______of (Month) India, Extraordinary, Part-II, Section(3) Sub-section(ii) vide Counsel for Caveator Notification No. S.O. 4090(E) dated 19.12.2016] Caveator 1. In exercise of the powers conferred by Section 458 of the Verification Companies Act, 2013 (18 of 2013), and in supersession of The caveator above named state and verify that the contents of this caveat lodged are the notification of the Government of India, in the Ministry of true and correct. Corporate Affairs, dated the 10th July, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section Verified at New Delhi on This ______day of ______20 . (ii) vide number S.O. 1539(E), dated the 10th July, 2012, and Caveator” also in supersession of the notification of the Government 17. In the principal rules, in the Annexure B,- of India, in the Ministry of Corporate Affairs, dated the 21st May, 2014, published in the Gazette of India, Extraordinary, (a) in serial number 7, under the heading ‘Nature of Part II, Section 3, sub-section (ii) vide number S.O. 1352(E), Petition’,for the word “deposition” the word “depositor” dated the 22nd May, 2014, except as respects things done shall be substituted; or omitted to be done before such supersession, the Central

(b) in serial number 8, under the heading `Enclosures Government hereby delegates to the Regional Directors FROM THE GOVERNMENT to the Petition’, in para 2, the word “small” shall be at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, omitted; Hyderabad and Shillong, the powers and functions vested (c) after serial number 12, following serial number and entries in it under the following sections of the said Act, subject to relating thereto shall be inserted, namely:- the condition that the Central Government may revoke such S. No. Section of the Act Nature of Petition Enclosures to the Petition delegation of powers or may itself exercise the powers under the said sections, if in its opinion such a course of action is 13 − Wherever no 1. Document and / or other evidence necessary in the public interest, namely :— document in support of the statement made in (a) clause (i) of sub-section (4) of section 8 (for alteration is prescribed to be the application or appeal or petition, attached with the of memorandum in case of conversion into another kind as are reasonably open to the application or of company); petitioner(s); petition, (b) sub-section (6) of section 8; documents as 2. Documentary evidence in proof mentioned in next of the eligibility and status of the (c) sub-sections (4) and (5) of section 13; column may be petitioner(s) with the voting power (d) section 16; attached, as held by each of them, wherever (e) section 87; applicable. applicable; (f) sub-section (3) of section 111; 3. Where the petition is presented on (g) sub-section (1) of section 140; behalf of members, the letter of (h) sub-section (5) of section 230; consent given by them, if applicable; 4. Statement of particulars showing (i) sub-sections (2), (3), (4), (5) and (6) of section 233; names, address, number of shares (j) first and second proviso of sub-section (3) of section held, and whether all calls and other 272; monies due on shares have been (k) sub-section (1) of section 348; paid in respect of members who have (l) sections 361, 362, 364 and 365 given consent to the petition being (m) clause (i) of the proviso to sub-section (1) of section presented on their behalf; 399 and 5. Where the petition is presented by a member or members authorised by (n) section 442. the Central Government, the order of 2. This notification shall come into force with effect from the the Central Government authorising date of its publication in the Official Gazette. the officer(s) or member or members to present the petition shall be AMARDEEP SINGH BHATIA similarly annexed to the petition; Joint Secretary 6. Affidavit verifying the petition; 7. Evidence regarding payment of fee; National Company Law Tribunal 8. Memorandum of appearance with copy of the Board resolution or the (Procedure for reduction of share vakalatnama, as the case may be; capital of Company) Rules, 2016. 9. Three copies of the petition; and 03 10. Any other documents in support of the case. [Issued by the Ministry of Corporate Affairs vide [(F. No. 1/30/2013/CL. V) dated 15.12.2016. Published in Gazette of AMARDEEP SINGH BHATIA India, Extraordinary, Part-II, Section(3) Sub-section(i) vide Joint Secretary Notification No. GSR 1147(E) dated 16.12.2016]

100 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 101 In exercise of the powers conferred by sub-section (1) and (2) (2) The notice under clause (iii) of sub-rule (1) shall be sent, of section 469 read with section 66 of the Companies Act, 2013 within seven days of the direction given under that sub-rule (18 of 2013) the Central Government hereby makes the following or such other period as may be directed by the Tribunal, to rules namely:- each creditor whose name is entered in the list of creditors submitted by the company about the presentation of the 1. Short title and Commencement.—(1) These rules may be application and of the said list, stating the amount of the called the National Company Law Tribunal (Procedure for proposed reduction of share capital and the amount or reduction of share capital of Company) Rules, 2016. estimated value of the debt or the contingent debt or claim (2) They shall come into force on the date of their publication or both for which such creditor’s name is entered in the said in the Official Gazette. list, and the time within which the creditor may send his (3) The words and expressions used in these rules but not representations and objections. defined and defined in the Companies Act, 2013 (hereinafter (3) The Tribunal shall along with directions under sub-rule referred to as the Act) or in the Companies (Specification of (1) give directions for the notice to be published, in Form Definitions Details) Rules, 2014 or the National Company No. RSC-4 within seven days from the date on which Law Tribunal Rules, 2016 shall have the meanings the directions are given, in English language in a leading respectively assigned to them in the Act or the said rules. English newspaper and in a leading vernacular language newspaper, both having wide circulation in the State in 2. Form of application or petition for Reduction of share which the registered office of the company is situated, or capital under section 66.—(1) An application to the Tribunal such newspapers as may be directed by the Tribunal and to confirm a reduction of share capital of a company shall be for uploading on the website of the company (if any) seeking in Form No. RSC-1 and fee shall be, as prescribed in the objections from the creditors and intimating about the date

FROM THE GOVERNMENT Schedule of fee to these rules. of hearing. (2) An application to confirm a reduction of share capital of (4) The notice under sub-rule (3) shall state the amount of a company shall be accompanied with- the proposed reduction of share capital, and the places, (a) the list of creditors duly certified by the Managing where the aforesaid list of creditors may be inspected, and Director, or in his absence, by two directors, as true the time as fixed by the Tribunal within which creditors of and correct, which is made as on a date not earlier than the company may send their objections: fifteen days prior to the date of filing of an application Provided that the objections, if any, shall be filed in the showing the details of the creditors of the company, Tribunal within three months from the date of publication of class-wise, indicating their names, addresses and the notice with a copy served on the company. amounts owed to them; (5) The company or the person who was directed to issue (b) a certificate from the auditor of the company to the effect notices and the publication in the newspaper under this rule that the list of creditors referred to in clause (a) is correct shall, as soon as may be, but not later than seven days from as per the records of the company verified by the auditor; the date of issue of such notices, file an affidavit in Form (c) a certificate by the auditor and declaration by a director No. RSC- 5 confirming the despatch and publication of the of the company that the company is not, as on the date notice. of filing of the application, in arrears in the repayment (6) Where the Tribunal is satisfied that the debt or claim of of the deposits or the interest thereon; and every creditor has been discharged or determined or has (d) a certificate by the company’s auditor to the effect that been secured or his consent is obtained, it may dispense with the accounting treatment proposed by the company for the requirement of giving of notice to creditors or publication the reduction of share capital is in conformity with the of notice under this rule or both. accounting standards specified in section 133 or any other provisions of Act. 4. Representation by Central Government, Registrar etc. (3) Copies of the list of creditors shall be kept at the under sub-section (2) of section 66.—If the authorities or registered office of the company and any person desirous the creditors of the company referred to in clause (i), clause of inspecting the same may, at any time during the ordinary (ii) and clause (iii) of sub-rule (1) of rule 3 desire to make hours of business, inspect and take extracts from the same any representation under sub-section (2) of section 66, the on payment of the sum of rupees fifty for inspection and for same shall be sent to the Tribunal within a period of three taking extracts on payment of the sum of rupees ten per months from the date of receipt of notice and copy of such page to the company. representation shall simultaneously be sent to the company and in case no representation has been received within the 3. Issue of notice and directions by the National Company said period by the Tribunal it shall be presumed that they Law Tribunal.-(1) The Tribunal shall, within fifteen days of have no objection to the reduction. submission of the application under rule 2, give notice, or direct that notice be given to - 5. Procedure with regard to representations and (i) the Central Government, Registrar of Companies, in all objections received.—(1) The company shall submit to cases, in Form No. RSC-2; the Tribunal, within seven days of expiry of period upto (ii) the Securities and Exchange Board of India, in the case which representations or objections were sought, the of listed companies in Form No. RSC-2; representations or objections so received along with the (iii) the creditors of the company, in all cases in Form No. responses of the company thereto. RSC-3; (2) The Tribunal may give such directions as it may think seeking their representations and objections, if any. fit with respect to holding of any enquiry or adjudication of

102 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 103 claims or for hearing the objection or otherwise. of any liability in respect of unpaid share capital or cancellation of an paid-up share capital which is lost or is unrepresented by available assets or the payment to any (3) At the hearing of the application, the Tribunal may, if shareholder of any paid-up share capital] it thinks fit, give such directions as may deem proper with 11. The form of the minute proposed to be registered under section 66(5) is as follows: reference to securing the debts or claims of creditors who [Here set out the proposed minute] do not consent to the proposed reduction, and the further 12. The applicant therefore prays : hearing of the petition may be adjourned to enable the (1) That the reduction of capital resolved on by the special resolution set out in company to comply with such directions. paragraph ___above be confirmed; (2) That to this end all directions necessary and proper be made and given; (3) That the proposed minute be approved; and 6. Order on application and Minute thereof.—(1) Where (4) That such further or other orders be made in the premises as to the Tribunal the Tribunal makes an order confirming a reduction, the shall seem fit. order confirming the reduction and approving the minute Dated ...... may include such directions or terms and conditions as the Applicant or his authorised representative Tribunal deems fit . Attachments:- (i) List of creditors (2) The order confirming the reduction of share capital and (ii) Certificate by the auditor w.r.t. creditors’ list approving the minute shall be in Form No. RSC - 6 on such (iii) Certificate and declaration w.r.t. company not being in arrears in repayment terms and conditions as may be deemed fit. of deposits (3) The Certificate issued by the Registrar under sub-section (iv) certificate by auditor with regard to confirming with accounting standards no. (5) of section 66 shall be in Form No. RSC -7. (v) Any other attachment.

SCHEDULE OF FEES FORM NO. RSC-2 [Pursuant to rule 3(1)(i) and (ii)] S. Section of the Nature of application / Fees Notice to Central Government, Registrar etc in respect of application for reduction of

No. Companies petition in Rs. FROM THE GOVERNMENT share capital of M/s ______Act, 2013 (Company) 1. Sub-section (1) Application for reduction of 5,000/- To of section 66 share capital. The Central Government/ The Registrar of Companies/ [in all cases] FORM NO. RSC-1 The Securities and Exchange Board of India/ [Pursuant to rule 2(1)] [as may be applicable] Company Application No ...... of…… 2..... You are requested to take notice that an application has been presented to the Tribunal at ______Ltd ...... (Bench), on the ...... day of ...... 20....….. for confirming the reduction of the share capital of the above company from Application under section 66 for confirming the ` ...... to `...... A copy of the application along with its attachments is enclosed. reduction of share capital You are hereby informed that representations, if any, in connection with the application may be made to the Tribunal within three months from the date of receipt of this notice. The petitioner herein submits:- Copy of the representation may simultaneously be sent to 1. The above named company, the applicant herein (hereinafter called ‘the company’) the concerned company. was registered on the ...... day of _____ , under the provisions of the [Companies In case no representation is received within the stated period of three months, it shall Act, _____] as a company limited by shares/limited by guarantee with a share be presumed that you have no representation or objection to make on the application. capital. 2. The registered office of the company is situate at….... . Dated this ……… day of …………….20… Authorized Signatory 3. The main objects of the company are [______]. 4. The capital of the company is Rs .... divided into ...... shares of Rs ...... each, of Place which ...... shares have been issued and have been fully paid-up or credited as Enclosures :Copy of application along with all attachments fully paid (or have been paid up to the extent of Rs ... per share). [Note: Where there is more than one class of shares, the petition should set out the FORM NO. RSC - 3 classes of shares and state specifically whether there is or there is not any priority [Pursuant to Rule 3(1)(iii)] as to capital] Before the National Company Law Tribunal Bench at _____ 5. By article(s) ...... of the articles of association of the company, it is provided that Company Application No...... of 20..... the company may, from time to time, by special resolution, reduce its capital in any …………… Ltd.—Applicant manner permitted by law. Notice to Creditors 6. Brief information in respect of financial position of the company; qualification, To reservation or adverse remark or disclaimer made by the auditor in his report, if …………………………………… any, details of any pending inspection, inquiry or investigation against the company …………………………………… under the Companies Act, 2013. You are requested to take notice that a petition was presented to the Tribunal at ...... 7. [Set out reasons for reduction.] , on the ...... day of ...... 20....….. for confirming the reduction of the share 8. By a special resolution of the company, duly passed in accordance with section capital of the above company from ` ...... to ` ...... and. In the list of creditors 66(1) of the Companies Act, 2013, at a general meeting thereof held after due given by the company to have been prepared on the...... day of ...... 20....., your notice as provided in the Act on the ...... day of...... 20 .... it was resolved name is entered as a creditor for `...... (the nature of the debt or claim to be stated). [Here set out the resolution] If you have any objection to the application or above stated details, the same may be sent 9. Details about (alongwith supporting documents) along with details about your name and address and (i) the number of members present and voting at such meeting and number of the name and address of your Authorised Representative , if any, to the undersigned at shares or voting power held by them; ...... within three months of date of this notice. (ii) the number of members who voted in favour of the resolution for reduction In case no objections are received as indicated above, the above entry in the list of of share capital and the number of shares or voting power held by them; creditors will, in all the proceedings under the above petition to reduce the share capital (iii) the number of members who voted against the resolution and the number of the company, be treated as correct. of shares or voting power held by them; Dated ...... 10. [Here set out whether the reduction of share capital involves extinction or reduction Authorised Representative for the Company

102 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 103 on the ...... day of ...... 20,...., which resolution was in the words and figures FORM NO. RSC – 4 following, viz.. [Pursuant to Rule 3(3)] Before the National Company Law Tribunal Bench at _____ [Here set out the resolution] Company Application No...... of 20..... be and the same is hereby confirmed. ………. Ltd. ----- Applicant (2) [Terms and conditions, if any] Where the Tribunal confirms the reduction subject to any terms and conditions, such terms and conditions should be set out, as well as Publication of Notice any directions that the Tribunal may think fit to give regarding the use of the words ‘and reduced’ or the publication of the reasons for reduction, the order being suitably cast in such Notice may be taken that an application was presented to the Tribunal at ...... (Bench), cases. on the ...... day of ...... 20....….. for confirming the reduction of the share capital (3) That the minute set forth in the schedule hereto be and is hereby approved. of the above company from ` ...... to ` ...... (4) That a certified copy of this order including the minute as approved be delivered to The notices to individual creditors have been issued. The list of creditors prepared on the Registrar of Companies within thirty days of receipt of the order. the...... day of ...... 20..... by the company is available at the registered office of *Dated this ...... day of...... 20.....

the company and at ----- for inspection on all working days during 11 AM to 4 PM between SCHEDULE ------(days when the inspection would be available). (Here set out the minute) If any creditor of the company has any objection to the application or the details in the list Form of Minute of creditors, the same may be sent (alongwith supporting documents) and details about The capital of ______Ltd., is henceforth Rs...... divided into...... his name and address and the name and address of his Authorised Representative, if any, shares of `...... each, reduced from `...... divided into ...... shares of `. to the undersigned at ...... within three months of date of this notice...... each. At the date of the registration of this minute ...... shares numbered If no objection is received within the time stated above, entries in the list of creditors will, ...... etc., have been issued and are deemed to be fully paid (and the remaining in all the proceedings under the above petition to reduce the share capital of the company, ...... shares are unissued). be treated as correct. It may also be noted that a hearing has been fixed for _____ (day) _____ (date) on which [Note:--1. The words ‘and reduced’ are to be added only where the order so directs.] FROM THE GOVERNMENT the Tribunal shall hear the application. In case any creditor intends to attend the hearing 2. If all the shares of a class are not issued, the minute should state the serial numbers of he should make a request along with his objections, if any. the issued shares. Partly paid shares should also be distinguished by their serial numbers and the amounts paid thereon should be stated. The serial numbers of shares with calls Authorised Representative for the company in arrears and of forfeited shares should also be stated.]

FORM NO. RSC - 5 (By the Tribunal) [See Rule 3(5) ] Before the National Company Law Tribunal Bench at _____ Registrar. Affidavit on dispatch and publication of notice *Date of the order to be the date of the approval of the minute.

I...... (name, etc.), do solemnly affirm and say as follows :-- FORM NO. RSC -7 [See Rule 6(3)] 1. I did on the ...... day of ...... 20...... despatched a copy of the notice now Before the National Company Law Tribunal Bench at _____ produced and shown to me and marked ‘B’ upon each of the respective persons Company Petition No…...... of 20….. whose names, addresses and descriptions appear in the list of creditors filed on ……….Ltd. the...... day of ...... 20...... by sending such copies by registered or Speed –Petitioner post to their respective addresses appearing in the said list, and the postal receipts Certificate of Registration of Order and Minute and the acknowledgments [including (if any) the covers returned as undelivered] It is certified that that the order of the Tribunal at…...... dated the…...... 20…... now produced and shown to me and marked ‘C’ to ‘Cn’ are the receipts and confirming the reduction of the share capital of the above named company from ` …...... acknowledgments received from the post office in respect of the said registered divided into …...... shares of ` …...... each, to ` …...... divided into …...... letters. shares of ` …...... each, and the minute approved by the Tribunal showing, with respect 2. A true copy of the notice marked ‘D’ has been published in the issue(s) of...... to the share capital of the above company as altered, the several particulars required (state the newspapers) dated the ...... 20..... by the above Act were registered by the Registrar of Companies on the …...... day Solemnly affirmed of …...... 20….. (Sd.)...... …… Dated …...... (Sd.)…...... FORM NO. RSC - 6 Registrar [See Rule 6(2)] Before the National Company Law Tribunal Bench at _____ AMARDEEP SINGH BHATIA Company Application No...... of 20..... Joint Secretary ………… Ltd. –Petitioner Companies (Compromises, Before the Hon’ble Member (s)...... Arrangements and Order confirming Reduction of Share Capital and Approving Minute 04 Amalgamations) Rules, 2016. Upon the application of ………….Ltd. presented on the ...... day of...... 20..... [upon hearing Shri...... Authorised Representative for the applicant, and upon reading [Issued by the Ministry of Corporate Affairs vide [F. No. 2/31/ the said application and upon perusing (here set out the newspapers) containing the notice CAA/2013/-CL-V] dated 14.12.2016. Published in Gazette of of the date of hearing of this petition, and upon hearing Shri ...... Authorised India, Extraordinary, Part-II, Section(3) Sub-section(i) vide Representative for the creditor(s) [or, (where there is no appearance) none of the creditors Notification No. 1134(E) dated 14.12.2016] appearing in person or by the Authorised Representative], and the Tribunal being satisfied with respect to every creditor that either his consent to the reduction has been obtained or his debt or claim has been discharged or has determined or has been secured, In exercise of the powers conferred by sub-sections (1) and (2) THIS TRIBUNAL DO ORDER: of section 469 read with sections 230 to 233 and sections 235 (1) That the reduction of the share capital of the above company resolved on and to 240 of the Companies Act, 2013 (18 of 2013), the Central effected by the special resolution passed at a general meeting of the said company held Government hereby makes the following rules, namely:-

104 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 105 1. Short Title and Commencement.— (1) These rules may the application under sub-section (1) of section 230 of the be called the Companies (Compromises, Arrangements and Act, the Tribunal shall, unless it thinks fit for any reason to Amalgamations) Rules, 2016. dismiss the application, give such directions as it may think (2) They shall come into force with effect from 15th necessary in respect of the following matters:- December, 2016. (a) determining the class or classes of creditors or of members whose meeting or meetings have to be 2. Definitions.— (1) In these rules, unless the context held for considering the proposed compromise or otherwise requires.— arrangement; or dispensing with the meeting or (a) “Act” means the Companies Act, 2013 (18 of 2013); meetings for any class or classes of creditors in terms (b) “Annexure” means the annexure to these rules; of sub-section (9) of section 230; (c) “Form” means a form set forth in annexure “A” to these (b) fixing the time and place of the meeting or meetings; rules which shall be used for the matter to which it (c) appointing a Chairperson and scrutinizer for the meeting relates, and includes an electronic version thereof; or meetings to be held, as the case may be and fixing (d) “Liquidator” means the Liquidator appointed under the the terms of his appointment including remuneration; Act or under the Insolvency and Bankruptcy Code, 2016 (d) fixing the quorum and the procedure to be followed at (31of 2016); the meeting or meetings, including voting in person or by (2) All other words and expressions used in these rules proxy or by postal ballot or by voting through electronic but not defined herein, and defined in the Act or in the means; Companies (Specification of Definitions Details) Rules, 2014 Explanation.— For the purposes of these rules, or in the National Company Law Tribunal Rules, 2016, shall “voting through electronic means” shall take place, have the same meanings respectively assigned to them in mutatis mutandis, in accordance with the procedure as

the Act or in the said rules. specified in rule 20 of Companies (Management and FROM THE GOVERNMENT Administration) Rules, 2014. 3. Application for order of a meeting.—(1) An application (e) determining the values of the creditors or the members, under sub-section (1) of section 230 of the Act may be or the creditors or members of any class, as the case submitted in Form no. NCLT-1 (appended in the National may be, whose meetings have to be held; Company Law Tribunal Rules, 2016) along with:- (f) notice to be given of the meeting or meetings and the (i) a notice of admission in Form No. NCLT-2 (appended advertisement of such notice; in the National Company Law Tribunal Rules, 2016); (g) notice to be given to sectoral regulators or authorities (ii) an affidavit in Form No. NCLT-6 (appended in the as required under sub-section (5) of section 230; National Company Law Tribunal Rules, 2016); (h) the time within which the chairperson of the meeting (iii) a copy of scheme of compromise or arrangement, which is required to report the result of the meeting to the should include disclosures as per sub-section (2) of Tribunal; and section 230 of the Act; and (i) such other matters as the Tribunal may deem necessary. (iv) fee as prescribed in the Schedule of Fees. (2) Where more than one company is involved in a scheme 6. Notice of meeting.— (1) Where a meeting of any class or in relation to which an application under sub-rule (1) is classes of creditors or members has been directed to be being filed, such application may, at the discretion of such convened, the notice of the meeting pursuant to the order of companies, be filed as a joint-application. the Tribunal to be given in the manner provided in subsection (3) Where the company is not the applicant, a copy of the (3) of section 230 of the Act shall be in Form No. CAA.2 notice of admission and of the affidavit shall be served on and shall be sent individually to each of the creditors or the company, or, where the company is being wound up, members. on its liquidator, not less than fourteen days before the date (2) The notice shall be sent by the Chairperson appointed fixed for the hearing of the notice of admission. for the meeting, or, if the Tribunal so directs, by the company (4) The applicant shall also disclose to the Tribunal in the (or its liquidator), or any other person as the Tribunal may application under sub-rule (1), the basis on which each class direct, by registered post or speed post or by courier or by of members or creditors has been identified for the purposes email or by hand delivery or any other mode as directed by of approval of the scheme. the Tribunal to their last known address at least one month before the date fixed for the meeting. 4. Disclosures in application made to the Tribunal for Explanation: - It is hereby clarified that the service of notice compromise or arrangement.—Creditors Responsibility of meeting shall be deemed to have been effected in case Statement. - For the purposes of sub-clause (i) of clause of delivery by post, at the expiration of forty eight hours after (c) of sub-section (2) of section 230 of the Act, the creditor’s the letter containing the same is posted. responsibility statement in Form No. CAA. 1 shall be (3) The notice of the meeting to the creditors and members included in the scheme of corporate debt restructuring. shall be accompanied by a copy of the scheme of Explanation:- For the purpose of this rule, it is clarified that compromise or arrangement and a statement disclosing a scheme of corporate debt restructuring as referred to the following details of the compromise or arrangement, if in clause (c) of sub-section (2) of section 230 of the Act such details are not already included in the said scheme:- shall mean a scheme that restructures or varies the debt (i) details of the order of the Tribunal directing the obligations of a company towards its creditors. calling,convening and conducting of the meeting:- (a) date of the Order; 5. Directions at hearing of the application.— Upon hearing (b) date, time and venue of the meeting.

104 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 105 (ii) details of the company including: Explanation – For the purposes of these rules it is clarified (a) Corporate Identification Number (CIN) or Global that- Location Number (GLN) of the company; (a) the term ‘interest’ extends beyond an interest in the (b) Permanent Account Number (PAN); shares of the company, and is with reference to the (c) name of the company; proposed scheme of compromise or arrangement. (d) date of incorporation; (b) the valuation report shall be made by a registered (e) type of the company (whether public or private or valuer, and till the registration of persons as valuers one-person company); is prescribed under section 247 of the Act, the (f) registered office address and e-mail address; valuation report shall be made by an independent (g) summary of main object as per the memorandum merchant banker who is registered with the Securities of association; and main business carried on by and Exchange Board or an independent chartered the company; accountant in practice having a minimum experience (h) details of change of name, registered office and of ten years. objects of the company during the last five years; (viii) investigation or proceedings, if any, pending against (i) name of the stock exchange (s) where securities the company under the Act. of the company are listed, if applicable; (ix) details of the availability of the following documents for (j) details of the capital structure of the company obtaining extract from or for making or obtaining copies including authorised, issued, subscribed and paid of or for inspection by the members and creditors, up share capital; and namely: (k) names of the promoters and directors along with (a) latest audited financial statements of the company their addresses. including consolidated financial statements;

FROM THE GOVERNMENT (iii) if the scheme of compromise or arrangement relates (b) copy of the order of Tribunal in pursuance of to more than one company, the fact and details of which the meeting is to be convened or has been any relationship subsisting between such companies dispensed with; who are parties to such scheme of compromise or (c) copy of scheme of compromise or arrangement; arrangement, including holding, subsidiary or of (d) contracts or agreements material to the compromise associate companies; or arrangement; (iv) the date of the board meeting at which the scheme was (e) the certificate issued by Auditor of the company approved by the board of directors including the name to the effect that the accounting treatment, if of the directors who voted in favour of the resolution, any, proposed in the scheme of compromise or who voted against the resolution and who did not vote arrangement is in conformity with the Accounting or participate on such resolution; Standards prescribed under Section 133 of the (v) explanatory statement disclosing details of the scheme Companies Act, 2013; and of compromise or arrangement including:- (f) such other information or documents as the Board (a) parties involved in such compromise or arrangement; or Management believes necessary and relevant (b) in case of amalgamation or merger, appointed date, for making decision for or against the scheme; effective date, share exchange ratio (if applicable) (x) details of approvals, sanctions or no-objection(s), if any, and other considerations, if any; from regulatory or any other governmental authorities (c) summary of valuation report (if applicable) including required, received or pending for the proposed scheme basis of valuation and fairness opinion of the of compromise or arrangement. registered valuer, if any, and the declaration that (xi) a statement to the effect that the persons to whom the the valuation report is available for inspection at notice is sent may vote in the meeting either in person the registered office of the company; or by proxies, or where applicable, by voting through (d) details of capital or debt restructuring, if any; electronic means. (e) rationale for the compromise or arrangement; Explanation- For the purposes of this rule, disclosure (f) benefits of the compromise or arrangement as required to be made by a company shall be made in respect perceived by the Board of directors to the company, of all the companies, which are part of the compromise or members, creditors and others (as applicable); arrangement. (g) amount due to unsecured creditors. (vi) disclosure about the effect of the compromise or 7. Advertisement of the notice of the meeting.—The notice arrangement on: of the meeting under sub-section (3) of Section 230 of the (a) key managerial personnel; Act shall be advertised in Form No. CAA.2 in at least one (b) directors; English newspaper and in at least one vernacular newspaper (c) promoters; having wide circulation in the State in which the registered (d) non-promoter members; office of the company is situated, or such newspapers as (e) depositors; may be directed by the Tribunal and shall also be placed, (f) creditors; not less than thirty days before the date fixed for the (g) debenture holders; meeting, on the website of the company (if any) and in case (h) deposit trustee and debenture trustee; of listed companies also on the website of the SEBI and (i) employees of the company: the recognized stock exchange where the securities of the (vii) Disclosure about effect of compromise or arrangement company are listed: on material interests of directors, Key Managerial Provided that where separate meetings of classes of Personnel (KMP) and debenture trustee. creditors or members are to be held, a joint advertisement 106 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 107 for such meetings may be given. copy by a director, the manager, the secretary, or other authorised officer of such body corporate shall be lodged 8. Notice to statutory authorities.— (1) For the purposes of with the company at its registered office not later than 48 sub-section (5) of section 230 of the Act, the notice shall hours before the meeting. be in Form No. CAA.3, and shall be accompanied with a (3) No person shall be appointed as a proxy who is a minor. copy of the scheme of compromise or arrangement, the (4) The proxy of a member or creditor blind or incapable explanatory statement and the disclosures mentioned under of writing may be accepted if such member or creditor has rule 6, and shall be sent to.- attached his signature or mark thereto in the presence of a (i) the Central Government, the Registrar of Companies, witness who shall add to his signature his description and the Income-tax authorities, in all cases; address : provided that all insertions in the proxy are in the (ii) the Reserve Bank of India, the Securities and Exchange handwriting of the witness and such witness shall have Board of India, the Competition Commission of India, certified at the foot of the proxy that all such insertions have and the stock exchanges, as may be applicable ; been made by him at the request and in the presence of (iii) other sectoral regulators or authorities, as required by the member or creditor before he attached his signature or Tribunal. mark. (2) The notice to the authorities mentioned in sub-rule (5) The proxy of a member or creditor who does not know (1) shall be sent forthwith, after the notice is sent to the English may be accepted if it is executed in the manner members or creditors of the company, by registered prescribed in the preceding sub-rule and the witness post or by speed post or by courier or by hand delivery certifies that it was explained to the member or creditor at the office of the authority. in the language known to him, and gives the member’s or (3) If the authorities referred to under sub-rule (1) desire creditor’s name in English below the signature.

to make any representation under sub-section (5) of FROM THE GOVERNMENT section 230, the same shall be sent to the Tribunal 11. Copy of compromise or arrangement to be furnished within a period of thirty days from the date of receipt by the company.— Every creditor or member entitled to of such notice and copy of such representation shall attend the meeting shall be furnished by the company, simultaneously be sent to the concerned companies free of charge, within one day on a requisition being made and in case no representation is received within the for the same, with a copy of the scheme of the proposed stated period of thirty days by the Tribunal, it shall be compromise or arrangement together with a copy of the presumed that the authorities have no representation statement required to be furnished under section 230 of Act. to make on the proposed scheme of compromise or arrangement. 12. Affidavit of service.— (1) The Chairperson appointed for the meeting of the company or other person directed to issue 9. Voting.—The person who receives the notice may within the advertisement and the notices of the meeting shall file an one month from the date of receipt of the notice vote in the affidavit before the Tribunal not less than seven days before meeting either in person or through proxy or through postal the date fixed for the meeting or the date of the first of the ballot or through electronic means to the adoption of the meetings, as the case may be, stating that the directions scheme of compromise and arrangement. regarding the issue of notices and the advertisement have Explanation. For the purposes of voting by persons who been duly complied with. receive the notice as shareholder or creditor under this rule– (2) In case of default under sub-rule (1), the application along (a) “shareholding” shall mean the shareholding of the with copy of the last order issued shall be posted before the members of the class who are entitled to vote on the Tribunal for such orders as it may think fit to make. proposal; and (b) “outstanding debt” shall mean all debt owed by the 13. Result of the meeting to be decided by voting.— (1) The company to the respective class or classes of creditors voting at the meeting or meetings held in pursuance of the that remains outstanding as per the latest audited financial directions of the Tribunal under Rule 5 on all resolutions shall statement, or if such statement is more than six months old, take place by poll or by voting through electronic means. as per provisional financial statement not preceding the date (2) The report of the result of the meeting under sub - rule of application by more than six months. (1) shall be in Form No. CAA. 4 and shall state accurately the number of creditors or class of creditors or the number 10. Proxies.— (1) Voting by proxy shall be permitted, provided of members or class of members, as the case may be, who a proxy in the prescribed form duly signed by the person were present and who voted at the meeting either in person entitled to attend and vote at the meeting is filed with the or by proxy, and where applicable, who voted through company at its registered office not later than 48 hours electronic means, their individual values and the way they before the meeting. voted. (2) Where a body corporate which is a member or creditor (including holder of debentures) of a company authorises 14. Report of the result of the meeting by Chairperson.— any person to act as its representative at the meeting, of The Chairperson of the meeting (or where there are separate the members or creditors of the company, or of any class meetings, the Chairperson of each meeting) shall, within of them, as the case may be, a copy of the resolution of the time fixed by the Tribunal, or where no time has been the Board of Directors or other governing body of such fixed, within three days after the conclusion of the meeting, body corporate authorising such person to act as its submit a report to the Tribunal on the result of the meeting representative at the meeting, and certified to be a true in Form No. CAA.4.

106 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 107 15. Petition for confirming compromise or arrangement.— adjourned hearing thereof, the Tribunal may make such (1) Where the proposed compromise or arrangement is order or give such directions as it may think fit, as to the agreed to by the members or creditors or both as the case proceedings to be taken for the purpose of reconstruction may be, with or without modification, the company (or its or amalgamation, as the case may be, including, where liquidator), shall, within seven days of the filing of the report necessary, an inquiry as to the creditors of the transferor by the Chairperson, present a petition to the Tribunal in company and the securing of the debts and claims of any Form No. CAA.5 for sanction of the scheme of compromise of the dissenting creditors in such manner as the Tribunal or arrangement. may think just and appropriate. (2) Where a compromise or arrangement is proposed for the purposes of or in connection with scheme for the 20. Order under section 232 of the Act.— An order made reconstruction of any company or companies, or for the under section 232 read with section 230 of the Act shall be amalgamation of any two or more companies, the petition in Form No.CAA.7 with such variation as the circumstances shall pray for appropriate orders and directions under section may require. 230 read with section 232 of the Act. (3) Where the company fails to present the petition 21. Statement of compliance in mergers and for confirmation of the compromise or arrangement as amalgamations.— For the purpose of sub-section (7) of aforesaid, it shall be open to any creditor or member as the section 232 of the Act, every company in relation to which case may be, with the leave of the Tribunal, to present the an order is made under sub-section (3) of section 232 of petition and the company shall be liable for the cost thereof. the Act shall until the scheme is fully implemented, file with the Registrar of Companies, the statement in Form No. 16. Date and notice of hearing.— (1) The Tribunal shall fix CAA.8 along with such fee as specified in the Companies

FROM THE GOVERNMENT a date for the hearing of the petition, and notice of the (Registration Offices and Fees) Rules, 2014 within two hearing shall be advertised in the same newspaper in which hundred and ten days from the end of each financial year. the notice of the meeting was advertised, or in such other newspaper as the Tribunal may direct, not less than ten 22. Report on working of compromise or arrangement.— At days before the date fixed for the hearing. any time after issuing an order sanctioning the compromise (2) The notice of the hearing of the petition shall also or arrangement, the Tribunal may, either on its own motion be served by the Tribunal to the objectors or to their or on the application of any interested person, make an representatives under sub-section (4) of section 230 of the order directing the company or where the company is being Act and to the Central Government and other authorities who wound-up, its liquidator, to submit to the Tribunal within such have made representation under rule 8 and have desired to time as the Tribunal may fix, a report on the working of the be heard in their representation. said compromise or arrangement and on consideration of the report, the Tribunal may pass such orders or give such 17. Order on petition.— (1) Where the Tribunal sanctions the directions as it may think fit. compromise or arrangement, the order shall include such directions in regard to any matter or such modifications in 23. Liberty to apply.— (1) The company, or any creditor or the compromise or arrangement as the Tribunal may think member thereof, or in case of a company which is being fit to make for the proper working of the compromise or wound-up, its liquidator, may, at any time after the passing arrangement. of the order sanctioning the compromise or arrangement, (2) The order shall direct that a certified copy of the same apply to the Tribunal for the determination of any question shall be filed with the Registrar of Companies within thirty relating to the working of the compromise or arrangement. days from the date of the receipt of copy of the order, or (2) The application shall in the first instance be posted such other time as may be fixed by the Tribunal. before the Tribunal for directions as to the notices and the (3) The order shall be in Form No. CAA. 6, with such advertisement, if any, to be issued, as the Tribunal may variations as may be necessary. direct. (3) The Tribunal may, on such application, pass such orders 18. Application for directions under section 232 of the and give such directions as it may think fit in regard to the Act.— (1) Where the compromise or arrangement has matter, and may make such modifications in the compromise been proposed for the purposes of or in connection with a or arrangement as it may consider necessary for the proper scheme for the reconstruction of any company or companies working thereof, or pass such orders as it may think fit in or the amalgamation of any two or more companies, and the circumstances of the case. the matters involved cannot be dealt with or dealt with adequately on the petition for sanction of the compromise 24. Liberty of the Tribunal.— (1) At any time during the or arrangement, an application shall be made to the Tribunal proceedings, if the Tribunal hearing a petition or application under section 232 of the Act, by a notice of admission under these Rules is of the opinion that the petition or supported by an affidavit for directions of the Tribunal as to application or evidence or information or statement is the proceedings to be taken. required to be filed in the form of affidavit, the same may (2) Notice of admission in such cases shall be given in such be ordered by the Tribunal in the manner as the Tribunal manner and to such persons as the Tribunal may direct. may think fit. (2) The Tribunal may pass any direction(s) or order or 19. Directions at hearing of application.— Upon the hearing dispense with any procedure prescribed by these rules in of the notice of admission given under rule 18 or upon any pursuance of the object of the provisions for implementation

108 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 109 of the scheme of arrangement or compromise or restructuring section 233 of the Act, shall be filed, within thirty days of the or otherwise practicable except on those matters specifically receipt of the order of confirmation, in Form INC-28 along provided in the Act. with the fees as provided under Companies (Registration Offices and Fees) Rules, 2014 with the Registrar of 25. Merger or Amalgamation of certain companies.— (1) Companies having jurisdiction over the transferee and The notice of the proposed scheme, under clause (a) of transferor companies respectively. subsection (1) of section 233 of the Act, to invite objections (8) For the purpose of this rule, it is clarified that with or suggestions from the Registrar and Official Liquidator respect to schemes of arrangement or compromise falling or persons affected by the scheme shall be in Form No. within the purview of section 233 of the Act, the concerned CAA.9. companies may, at their discretion, opt to undertake such (2) For the purposes of clause (c) of sub-section (1) of schemes under sections 230 to 232 of the Act, including section 233 of the Act the declaration of solvency shall be where the condition prescribed in clause (d) of sub-section filed by each of the companies involved in the scheme of (1) of section 233 of the Act has not been met. merger or amalgamation in Form No. CAA.10 along with the fee as provided in the Companies (Registration Offices 26. Notice to dissenting shareholders for acquiring the and Fees) Rules, 2014, before convening the meeting of shares.— For the purposes of sub-section (1) of section members and creditors for approval of the scheme. 235 of the Act, the transferee company shall send a notice (3) For the purposes of clause (b) and (d) of sub-section (1) to the dissenting shareholder(s) of the transferor company, of section 233 of the Act, the notice of the meeting to the in Form No. CAA.14 at the last intimated address of such members and creditors shall be accompanied by - shareholder, for acquiring the shares of such dissenting (a) a statement, as far as applicable, referred to in shareholders.

sub-section (3) of section 230 of the Act read with FROM THE GOVERNMENT sub-rule (3) of rule 6 hereof; 27. Determination of price for purchase of minority (b) the declaration of solvency made in pursuance of shareholding.— For the purposes of sub-section (2) of clause (c) of sub-section (1) of section 233 of the section 236 of the Act, the registered valuer shall determine Act in Form No. CAA.10; the price (hereinafter called as offer price) to be paid by (c) a copy of the scheme. the acquirer, person or group of persons referred to in sub- (4)(a) For the purposes of sub-section (2) of section 233 of section (1) of section 236 of the Act for purchase of equity the Act, the transferee company shall, within seven days shares of the minority shareholders of the company, in after the conclusion of the meeting of members or class of accordance with the following rules:- members or creditors or class of creditors, file a copy of the (1) In the case of a listed company,- scheme as agreed to by the members and creditors, along (i) the offer price shall be determined in the manner as with a report of the result of each of the meetings in Form may be specified by the Securities and Exchange No. CAA.11 with the Central Government, along with the Board of India under the relevant regulations fees as provided under the Companies (Registration Offices framed by it, as may be applicable; and and Fees) Rules, 2014. (ii) the registered valuer shall also provide a valuation (b) Copy of the scheme shall also be filed, along with Form report on the basis of valuation addressed to No. CAA. 11 with - the Board of directors of the company giving (i) the Registrar of Companies in Form No. GNL-1 justification for such valuation. along with fees provided under the Companies (2) In the case of an unlisted company and a private (Registration Offices and Fees) Rules, 2014; and company, (ii) the Official Liquidator through hand delivery or by (i) the offer price shall be determined after taking into registered post or speed post. account the following factors:- (5) Where no objection or suggestion is received to the (a) the highest price paid by the acquirer, person or scheme from the Registrar of Companies and Official group of persons for acquisition during last twelve Liquidator or where the objection or suggestion of Registrar months; and Official Liquidator is deemed to be not sustainable and (b) the fair price of shares of the company to be the Central Government is of the opinion that the scheme determined by the registered valuer after taking is in the public interest or in the interest of creditors, the into account valuation parameters including Central Government shall issue a confirmation order of such return on net worth, book value of shares, earning scheme of merger or amalgamation in Form No. CAA.12. per share, price earning multiple vis-à-vis the (6) Where objections or suggestions are received from industry average, and such other parameters as the Registrar of Companies or Official Liquidator and the are customary for valuation of shares of such Central Government is of the opinion, whether on the basis companies; and of such objections or otherwise, that the scheme is not in (ii) the registered valuer shall also provide a valuation report on the public interest or in the interest of creditors, it may file an the basis of valuation addressed to the board of directors application before the Tribunal in Form No. CAA.13 within of the company giving justification for such valuation. sixty days of the receipt of the scheme stating its objections or opinion and requesting that Tribunal may consider the 28. Circular containing scheme of amalgamation or scheme under section 232 of the Act. merger.— (1) For the purposes of clause (a) of sub-section (7) The confirmation order of the scheme issued by the (1) of section 238 of the Act, every circular containing the Central Government or Tribunal under sub-section (7) of offer of scheme or contract involving transfer of shares or

108 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 109 any class of shares and recommendation to the members In exercise of the powers conferred by sub-section (3) of of the transferor company by its directors to accept such section 1 of the Companies Act, 2013 (18 of 2013), the Central offer, shall be accompanied by such information as set out Government hereby appoints the 15th day of December, 2016 in Form No. CAA.15. as the date on which the following provisions of the said Act (2) The circular shall be presented to the Registrar for shall come into force, namely :- registration. SL. No. Section 1. Clause (23) of section 2 29. Appeal under sub-section (2) of section 238 of the Act.— 2. Clause (c) and (d) of sub-section (7) of section 7 Any aggrieved party may file an appeal against the order of 3. Sub-section (9) of section 8 the Registrar of Companies refusing to register any circular 4. Section 48 under sub-section (2) of section 238 of the Act and the said 5. Section 66 appeal shall be in the Form No. NCLT.9 (appended in the 6. Sub-section (2) of section 224 National Company Law Tribunal Rules, 2016) supported 7. Section 226 with an affidavit in the (appended in the 8. Section 230 [except sub-section (11) and (12)], and Form No. NCLT.6 Sections 231 to 233 National Company Law Tribunal Rules, 2016). 9. Sections 235 to 240 10. Sections 270 to 288 SCHEDULE OF FEES 11. Sections 290 to 303 12. Section 324 S. Sections of the Rule Nature of Fees 13. Sections 326 to 365 No. Companies Number application or 14. Proviso to section 370 Act, 2013 petition 15. Sections 372 to 373

FROM THE GOVERNMENT 1. Sub-section (1) 3 (1) Application for Rs. 16. Sections 375 to 378 of section 230 compromise 5,000/- 17. Sub-section (2) of section 391 arrangement and 18. Clause (c) of sub-section (1) of section 434 amalgamation. 2. Sub-section (2) Application Rs. AMARDEEP SINGH BHATIA of section 235 by dissenting 1,000/- Joint Secretary shareholders. Companies (Removal of Difﬁculties) 3. Sub-section (2) 29 Appeal against order Rs. Fourth Order, 2016 of section of Registrar refusing 2,000/- 238 to register 07 any circular. [Issued by the Ministry of Corporate Affairs vide [F. No. Annexure A - Forms No. CAA 1 to CAA 15 not reproduced here for want 16/61/2016-Legal) dated 07.12.2016. Published in Gazette of of space. Readers may log on to www.mca.gov.in for the Annexure. India, Extraordinary, Part II—Section 3—Sub-section (ii) vide AMARDEEP SINGH BHATIA notification No. 3676 (E) dated 07.12.2016] Joint Secretary Corrigendum Whereas clause (c) of sub-section (1) of section 434 of the Companies Act, 2013 (hereinafter referred to as the 2013 Act) provides that on a date which may be notified by the Central 05 Government for the purpose of transfer of pending proceedings, [Issued by the Ministry of Corporate Affairs vide [(F. No. all proceedings under the Companies Act, 1956 (hereinafter 17/60/2012-CL-V) dated 09.12.2016. To be published in Gazette referred to as the 1956 Act) including proceedings relating to of India, Extraordinary, Part-II, Section(3) Sub-section(i)] arbitration, compromise, arrangements and reconstruction and winding up of companies, pending immediately before such date In the notification of the Government of India in the Ministry before any District Court or High Court, shall stand transferred of Corporate Affairs number G.S.R. 1075(E),dated the 17th to the Tribunal and the Tribunal may proceed to deal with such November, 2016 published in the Gazette of India,Extraordinary, proceedings from the stage before their transfer; Part II,Section 3,Sub-section (i) dated the 17th November, 2016 And, whereas, the proviso thereof further provides that only at page 2, in line 13, for “2006.” read “2006”. such proceedings relating to the winding up of companies shall AMARDEEP SINGH BHATIA be transferred to the Tribunal that are at a stage as may be Joint Secretar prescribed by the Central Government; Date of coming into force certain Sections And, whereas, clause (c) of sub-section (1) of section 434 of the 2013 Act shall come into force from the 15th December, 2016; of the Companies Act, 2013. And, whereas, provisions of sections 6 to 32, 60 to 67 of the 06 Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the Code) have been brought into force on 1st December, [Issued by the Ministry of Corporate Affairs [vide (F. No. 2/31/ 2016 and sections 33 to 54 of the Code and the provisions of CAA/2013-CL-V-pt) dated 07.12.2016. Published in Gazette of Chapter XV and Chapter XX of the 2013 Act shall be notified to India, Extraordinary, Part II—Section 3—Sub-section (ii) vide come into force from 15th December, 2016; notification No. 3677E dated 07.12.2016] And, whereas, it has been decided that (i) proceedings under the 1956 Act with High Courts on all cases other than winding-up as

110 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 111 on 15th December, 2016 shall stand transferred to the Benches of section 434 of the Companies Act, 2013 (18 of 2013) read with of the Tribunals exercising respective territorial jurisdiction and sub-section (1) of section 239 of the Insolvency and Bankruptcy (ii) all cases of winding up under the 1956 Act which are pending Code, 2016 (31 of 2016) (hereinafter referred to as the Code), the before the High Courts as on 15th December, 2016 and wherein Central Government hereby makes the following rules, namely:— petitions have not been served to the respondents as per rule 26 of Companies (Court) Rules, 1959 shall be transferred to 1. Short title and Commencement. - (1) These rules may be Tribunal, and all remaining cases of winding up pending on that called the Companies (Transfer of Pending Proceedings) date would continue with the respective High Courts; Rules, 2016. And, whereas, difficulties have arisen regarding continuation (2) They shall come into force with effect from the 15th of provisions of the 1956 Act for (i) those proceedings relating December, 2016, except rule 4, which shall come into force to cases other than winding-up that are reserved for orders for from 1st April, 2017. allowing or otherwise and (ii) those winding up cases which would not be transferred to Tribunal and be proceeded with by 2. Definitions.- (1) In these rules, unless the context otherwise High Courts on account of commencement of the corresponding requires- provisions under the 2013 Act or under the Code; (a) “Code” means the Insolvency and Bankruptcy Code, 2016 And, whereas, difficulties have also arisen regarding transfer (31 of 2016);` of proceedings relating to cases other than winding-up where (b) “Tribunal” means the National Company Law Tribunal hearings have been completed and only pronouncement of constituted under section 408 of the Companies Act, 2013. order is pending or is reserved since their transfer to Tribunal (2) Words and expressions used in these rules and not defined, may result into delay and rights of parties to the proceedings but defined in the Companies Act, 1956 (1 of 1956)(herein are likely to be affected prejudicially; referred to as the Act), the Companies Act, 2013 (18 of 2013)

Now, therefore, in exercise of the powers conferred by sub- or the Companies (Court) Rules, 1959 or the Code shall have FROM THE GOVERNMENT section (1) of section 470 of the Companies Act, 2013 (18 of the meanings respectively assigned to them in the respective 2013), the Central Government hereby makes the following Act or rules or the Code, as the case may be. Order to remove the above said difficulties, namely:- 3. Transfer of pending proceedings relating to cases other 1. Short title and commencement.- (1) This Order may be than Winding up.—All proceedings under the Act, including called the Companies (Removal of Difficulties) Fourth Order, proceedings relating to arbitration, compromise, arrangements 2016. and reconstruction, other than proceedings relating to winding (2) It shall come into force with effect from the 15th up on the date of coming into force of these rules shall stand December, 2016. transferred to the Benches of the Tribunal exercising respective territorial jurisdiction: 2. In the Companies Act, 2013, in Section 434, in sub-section Provided that all those proceedings which are reserved for (1), in clause (c), after the proviso, the following provisos orders for allowing or otherwise of such proceedings shall not shall be inserted, namely:- be transferred. “Provided further that only such proceedings relating to cases other than winding-up, for which orders for allowing 4. Pending proceeding relating to Voluntary Winding up: or otherwise of the proceedings are not reserved by the All applications and petitions relating to voluntary winding High Courts shall be transferred to the Tribunal: up of companies pending before a High Court on the date of Provided further that – commencement of this rule, shall continue with and dealt with (i) all proceedings under the Companies Act, 1956 other by the High Court in accordance with provisions of the Act. than the cases relating to winding up of companies that are reserved for orders for allowing or otherwise such 5. Transfer of pending proceedings of Winding up on the proceedings; or ground of inability to pay debts.—(1) All petitions relating (ii) the proceedings relating to winding up of companies to winding up under clause (e) of section 433 of the Act on which have not been transferred from the High Courts; the ground of inability to pay its debts pending before a High shall be dealt with in accordance with provisions of the Court, and where the petition has not been served on the Companies Act, 1956 and the Companies (Court) Rules, respondent as required under rule 26 of the Companies (Court) 1959”. Rules, 1959 shall be transferred to the Bench of the Tribunal established under sub-section (4) of section 419 of the Act, AMARDEEP SINGH BHATIA Joint Secretary exercising territorial jurisdiction and such petitions shall be treated as applications under sections 7, 8 or 9 of the Code, Companies (Transfer of Pending as the case may be, and dealt with in accordance with Part II Proceedings) Rules, 2016. of the Code: Provided that the petitioner shall submit all information, other 08 than information forming part of the records transferred in [Issued by the Ministry of Corporate Affairs vide [F. No. accordance with Rule 7, required for admission of the petition 1/5/2016– CL-V) dated 07.12.2016. Published in Gazette of under sections 7, 8 or 9 of the Code, as the case may be, India, Extraordinary, Part-II, Section(3) Sub-section(i) vide including details of the proposed insolvency professional to Notification No. GSR1119(E) dated 07.12.2016] the Tribunal within sixty days from date of this notification, failing which the petition shall abate. In exercise of the powers conferred under sub-sections (1) and (2) (2) All cases where opinion has been forwarded by Board for

110 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 111 Industrial and Financial Reconstruction, for winding up of a No. 14/2016 dated 07.12.2016.] company to a High Court and where no appeal is pending, the proceedings for winding up initiated under the Act, pursuant 1. In continuation of this Ministry’s General Circular 12/2016 to section 20 of the Sick Industrial Companies (Special dated 27.10.2016,keeping In view the requests received Provisions) Act, 1985 shall continue to be dealt with by such from various stakeholders stating that due to curfew/strikes High Court in accordance with the provisions of the Act. and disturbances from past more than four months in the State of Jammu and Kashmir and the resultant difficulty 6. Transfer of pending proceedings of Winding up matters on expressed by various stakeholders in convening meetings in the grounds other than inability to pay debts.—All petitions a timely manner, it has been decided to relax the additional filed under clauses (a) and (f) of section 433 of the Companies fees payable by the companies having registered offices in Act, 1956 pending before a High Court and where the petition the State of Jammu and Kashmir on e-forms AOC-4, AOC has not been served on the respondent as required under rule (CFS),AOC - 4 XBRL and e- Form MGT-7 upto 31.12.2016, 26 of the Companies (Court) Rules, 1959 shall be transferred wherever additional fee is applicable. to the Bench of the Tribunal exercising territorial jurisdiction and such petitions shall be treated as petitions under the 2. This issues with the approval of the competent authority. provisions of the Companies Act, 2013 (18 of 2013). KMS NARAYANAN Assistant Director 7. Transfer of Records.—Pursuant to the transfer of cases as Companies (Registration Ofﬁces and per these rules the relevant records shall also be transferred by the respective High Courts to the National Company Law Fees) Second Amendment Rules, Tribunal Benches having jurisdiction forthwith over the cases 2016.

FROM THE GOVERNMENT 11 so transferred. [Issued by the Ministry of Corporate Affairs vide [ F. No. 8. Fees not to be paid.—Notwithstanding anything contained in 01/16/2013 CL-V (Pt-I) dated 07.11.2016. Published in Gazette the National Company Law Tribunal Rules, 2016, no fee shall of India, Extraordinary, Part II—Section 3—Sub-section (i) vide be payable in respect of any proceedings transferred to the Notification No. 1049(E) dated 07.11.2016] Tribunal in accordance with these rules. AMARDEEP SINGH BHATIA In exercise of the powers conferred by sections 396, 398, Joint Secretary 399, 403 and 404 read with subsections (1) and (2) of section Clarification regarding due date 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend of transfer of shares to IEPF the Companies (Registration Offices and Fees) Rules, 2014, 09 Authority. namely:— 1. (1) These rules may be called the Companies (Registration Offices and Fees) Second Amendment Rules, 2016. [Issued by the Ministry of Corporate Affairs vide General Circular (2) They shall come into force from the date of their No. 15/2016 dated 07.12.2016.] publication in the Official Gazette. 1. Various representations have heen received from the Companies for simplification of transfer process of shares 2. In the Companies (Registration Offices and Fees) Rules, under Investor Education & Protection Fund (Accounting, 2014, (herein after refer to as the principle rules), in the Audit, Transfer, and Refund) Rules, 2016, notitied on principle rules, in rule 8, in sub-rule (12), in clause (b) for 05.09.2016. It has also been requested for extending the sub-clause (iv), the following shall be substituted, namely:- due date prescribed for transferring the shares to IEPF “(iv) AOC-4 certification by the Chartered Accountant or Authority. The matters, including simplification of transfer the Company Secretary or as the case may be by the Cost process and extension of date for such transter are under Accountant, in whole- time practice.” consideration and the rules are likely to be revised. The revised rules shall be notified in due course. 3. In the principal rules, in the Annexure, in item II, for sub- 2. This issues with the approval of the Competent Authority. item (vi), the following sub-items shall be substituted, namely;- MONIKA GUPTA Deputy Director For Application made Other than OPC and Small OPCs and Small Companies Relaxation of additional fees and Companies extension of last date in filing of “(vi) For allotment of Director 500 500 Identification Number (DIN) 10 forms MGT-7 (Annual Return) under section 153 of the Act (vii) For surrender of Director 1000 1000” and AOC-4 (Financial Statement) Identification Number under under the Companies Act, 2013- rule 11(f) of the Companies (Appointment and Qualification State of Jammu and Kashmir- reg. of Directors) Rules 2014 AMARDEEP SINGH BHATIA [[Issued by the Ministry of Corporate Affairs vide General Circular Joint Secretary

112 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 113 News from5 the Institute & Regions

n MEMBERS ADMITTED/RESTORED n CERTIFICATE OF PRACTICE ISSUED/CANCELLED n LICENTIATE ICSI ADMITTED n COMPANY SECRETARIES BENEVOLENT FUND n LIST OF PRACTISING MEMBERS/COMPANIES REGISTERED FOR IMPARTING TRAINING n REGIONAL NEWS

112 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I DECEMBERJANUARY 2017 2016 113 NEWS FROM THE INSTITUTE 114 Note: In the above schemes, no interest or other amount shall be charged from the members seeking financial assistance. undertaking torefundtheamount. webpage ofCSBFaswellpublishedintheCharteredSecretaryjournal. employees. Theemployercompanies,PCSandotherorganizationswillbegivenproperrecognitionbyCSBFtheirnameshostedatthe be deductedfromthemonthlysalaryofmemberemployeeininstalmentsoraspermutuallyagreedtermsbetweenemployerand a period of one year. Amount refunded by the beneficiaries would be credited to the CSBF. Beneficiary Members shall be required to submit an way ofPostdatedchequeswithin Fund innotmorethanfourquarterlyinstalmentsby to the refund the amount Life-member ofCSBF.Theyshall a Assistance Fund”. Beneficiary Members shall have to contribute at least 20% of the one-time subscription amount to be paid by them for becoming administered out of the contributions received by the CSBF specifically for this (Rs.10,000/-) to CSBF to enable them to become life member of the CSBF. This amount so disbursed as financial assistance to the member may member of the CSBF. Members having less than five years standing as an Associate shall only be eligible for this scheme. This scheme shall be be administeredbytheCSBF.TheCSBFwilladministerthisrevolvingfundschemefornewmembersofInstitutetoenablethembecome Under thisschemeanycompany,individual(memberornon-member)entitymaycontributeamounttowardstheRevolvingFundSchemeto Revolving FundSchemeadministeredbyCSBF: This scheme will be administered by the Individual Members (“Contributory Member”) of the Institute to enable the eligible members (“Beneficiary General RevolvingFundSchemefortheMembersofInstitute: may create a Revolving Fund, to provide financial assistance out of this fund to their employee(s) by paying his/her one time subscription amount Under thisscheme,theCompanies,PractisingCompanySecretaries(PCS)andotherorganizationswheremembersofInstituteareworking Employer’s RevolvingFundSchemefortheiremployees: Institute as life members of the CSBF. The members may take benefit out of these schemes. The ManagingCommitteeofCompanySecretariesBenevolentFund(CSBF)haslaunchedthefollowingschemesforenrollingmembers Life member of CSBF. Members having less than five years standing as an Associate member shall only be eligible for this scheme. The financial Member”) of the Institute to become members of CSBF. The financial assistance will be provided at the discretion of the contributory member but in theCharteredSecretaryjournal. The ContributoryMemberswillbegivenproperrecognitionby CSBF and theirnameswillbehostedatthewebpageofCSBFaswell as published assistance soprovidedbytheIndividualMemberswillberefundedininstalmentsaspertermsandconditionsmutuallyagreedbetweenthem. in no case it should be more than 80% of the one-time subscription amount (Rs.10,000/-) to be paid by the beneficiary member for becoming a Guidelines forChangeinNameofProprietorship Concern/Firm ofCompanySecretary(ies) a An application for change in name of the firm (preferably mentioning its Unique Code Number) shall be (a) following conditions shall be fulfilled: c In the case of a proprietary firm, an application along with the Form for giving particulars of Offices (c) All the existing partners of the firm must sign the application and the Form duly filled- in. (b) In case an existing proprietary concern/firm of Company Secretary (ies) desires to change its name, the g The Proprietorship concern/firm of Company Secretary (ies) which has requested for change in name, (g) f The letter granting approval of a trade / firm name will be sent at the address mentioned in the Form for (f) (e) The application for approval of the firm name along with the Form should be sent to the Directorate of (d) submitted along with the Form for giving particulars of Offices and Firms duly filled- in. approval ofthe changedname. upon approvalshallmention “formerlyknownas (old name)”for a period of one yearfrom the date of giving particulars of Offices and Firms. and Firms (mentioning its Unique Code Number) is to be submitted duly filled-in and signed by the of theCSRegulations,1982. 169 and170 in Regulations contained under theprovisions be approved name will The newproposed Membership, ICSI. proprietor. Revolving Fund SchemesforbecominglifemembersofCSBF ATTENTION MEMBERS ATTENTION MEMBERS scheme only and earmarked for the scheme: “CSBF Membership JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 115 114 JANUARY 2017 I CHARTERED SECRETARY ASSOCIATES FELLOWS* Admitted Members *ADMITTED DURING THEPERIODFROM20.11.2016TO19.12.2016 NO. NO. Sl. Sl. 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 12 11 10 9 8 7 6 5 4 3 2 1 1 2 9 8 7 6 5 4 3 CHARTERED SECRETARY SH. VIPINKUMARJAIN MRS. SUJATACHATTOPADHYAY MS. UPASANASRIVASTAVA MR. NIRAJNAYANKUMAR SH. YASHPALBANSAL MS. SHWETAKARUNDIA MS. PURVEEDINESHCHANDRAROY MR. SWAROOPSURYANARAYANA SH. VIVEKKUMAR MR. MANOJKUMARSHARMA MS. BHAWNAGUPTA S HIAIDVNRKMRBATFCS-8973 MS. CHAITALIDEVENDRAKUMARBHATT MR. KAUSHALNARULA SH. PRITIASTARAGPATNAIK MS. SCHELLA SH. DHARMENDRAKUMAR MR. PRAVINNAVAMONEY MS. SWETAGARG MS. MRIDULAPTHOMAS SH. HIMANSHUGROVER MS. NELBYMOLNELSON SH. VIVEKKUMARSHUKLA MR. MANISHSATISHRAUT H MSKMRVSNRYBATFCS-8961 SH. UMESHKUMARVASANTRAYBHATT NAME NAME MR. ANANDLOHIA MR. ATULKRISHNATIWARI MR. JAIDEVNAGAR MS. ANKITAMALHOTRA MR. DEVKINANDANHARSWAL MR. RAHULGAUR MS. PRIYACHAPLOT MR. SAGARVERMA MR. SAMARTHDAVE MR. MOHITKUMAR MS. KOMALSAHU MS. CHANCHALRANI I JANUARY 2017 Institute News ACS -48220 ACS -48221 ACS -48231 ACS -48230 ACS -48229 ACS -48228 ACS -48227 ACS -48226 ACS -48225 ACS -48224 ACS -48223 ACS -48222 FCS -8984 FCS -8983 FCS -8981 FCS -8980 FCS -8979 FCS -8978 FCS -8977 FCS -8976 FCS -8975 FCS -8974 FCS -8972 FCS -8971 FCS -8970 FCS -8969 FCS -8968 FCS -8967 FCS -8966 FCS -8965 FCS -8964 FCS -8963 FCS -8962 FCS -8982 MEMB. MEMB NO. NO. REGN. REGN. WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC SIRC SIRC SIRC EIRC SIRC SIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC EIRC EIRC 18 17 16 15 14 13 19 20 21 22 43 42 41 40 39 38 37 36 35 34 33 32 31 30 29 28 27 26 25 24 23 44 45 46 47 48 49 51 50 52 53 54 55 56 57 58 59 60 61 62 63 64 65 MS. PRIYAJAIN MR. ABHISHEKKAMRA MS. BHAVIKASHARMA MS. YOGESHBHATIA MS. NEHASHARMA MR. VINAYAKBANSAL MR. SUMANSUNDARRAJ MS. SWETHAPRIYAMUDDANA MR. SANKAPHANIPAVANKUMAR MR. ABHIRAJKR MS. NEHAKUMARI MR. BALBIRSINGH MS. HETALLILABHAIMOKARIYA MS. ARCHITACHORDIA ACS-48256 MS. PANKTIKASHYAPTHAKKAR MS. CHARUSINGH MR. SANTOSHDIWAKARBHANDARKAR MR. KUSHJAYALSINGHPRADHAN MS. BHAGYASHREEBALKRISHNAKULKARNI MS. PAMELABOSE MS. SHEEJAMOHAN MR. JAYMEHULBHANSALI MR. NEERAJRAJKUMARPARWANI MR. VIVEKJUGALSARAF MS. BENALVINODSHAH MR. NIKUNJBHIMRAJKOTHARI MR. PARTHSHIVKUMARSINGHAL ACS-48242 MR. HITESHMANOJKAVEDIYA MS. DEEPIKARAMESHGALA MS. KANCHAN MR. VIVEKJITENDRABHAIVAKHARIA MS. VARSHARATHI MR. RAGHAVJHUNJHUNWALA MR. ABHINAYKUMARSHAW MR. RITESHKUMARJHA MS. LPRIYATAMADEVI MR. MOHITKUMARSHARMA MS. SHALUAGRAWAL MS. PARIDHIBHARDWAJ MS. BABITASHARMA MR. CHANDANSINGHANIA MS. KAHKASHANSHAHID MS. ARCHITACHAKRABORTY MR. DINESHSHAW MS. SONUNAHATA MS. KARISHMASARAWAGI MS. RICHAJAIN MS. ANUPRIYASRIVASTAVA MS. KHUSHBOOSINGH MS. SWEETYDASSANI MS. VANITAJAIN MS. AANCHALJAIN MR. TANAYJEETDAS ACS -48237 ACS -48236 ACS -48235 ACS -48234 ACS -48233 ACS -48232 ACS -48238 ACS -48239 ACS -48240 ACS -48241 ACS -48262 ACS -48261 ACS -48260 ACS -48259 ACS -48258 ACS -48257 ACS -48255 ACS -48254 ACS -48253 ACS -48252 ACS -48251 ACS -48250 ACS -48249 ACS -48248 ACS -48247 ACS -48246 ACS -48245 ACS -48244 ACS -48243 ACS -48263 ACS -48264 ACS -48265 ACS -48266 ACS -48267 ACS -48268 ACS -48270 ACS -48269 ACS -48271 ACS -48272 ACS -48273 ACS -48274 ACS -48275 ACS -48276 ACS -48277 ACS -48278 ACS -48279 ACS -48280 ACS -48281 ACS -48282 ACS -48283 ACS -48284 115 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC SIRC SIRC SIRC SIRC SIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC

NEWS FROM THE INSTITUTE NEWS FROM THE INSTITUTE 116 118 117 116 115 114 113 112 111 110 109 108 107 106 105 104 103 102 101 100 66 99 98 97 96 95 94 93 92 91 90 89 88 87 86 85 84 83 82 81 80 79 78 77 76 75 74 73 72 71 70 69 68 67 MS. KIRANSHARMA MS. JYOTIKAMEHRA MS. PREETISHARMA MS. BHAWNA MS. VARTAKHANDELWAL MS. HIMANSHINEGI MR. ARPITJAIN MR. PRAVEEN MR. PRINCESHEKHAWAT MS. ASTHARUSTAGI MS. ADITIGOEL MR. GAURAVARORA MS. SAKSHIMADAAN MR. SHIVAMSHARMA MR. NIKHILSHARMA MS. SUGANDHAKHANDELWAL MS. KRITIKASRIVASTAVA MS. DIVYAPAHWA MR. PIYUSHPRAJAPATI MS. VIDHISHASHARMA MR. NISHANTGOYAL MS. KIRTIOHRI MS. PREETIMOONKA MS. VINITAHIRWANI MR. SHAHZADALI MRS. MANJUKAUSHAL MR. TEJINDERPALSINGH MS. KHYATISHARMA MR. SUMITWADHWANI MR. ROSHANJHA MS. NAMRATASHARMA MR. ANKUSHSHARMA MS. PRIYASHARMA MS. MEETUBATRA MR. SUBHAMJOSHI MS. SMITACHATURVEDI MR. NARINDERSINGH MS. KIRANBALAAGGARWAL MS. RUCHIGUPTA MR. SANTOSHSINGHMEHRA MR. NISHANTBHAMRI MS. AAKRITEEKHANNA MR. MADHVENDRASHUKLA MS. KARUNAGUPTA MS. HIMAXIBOHRA MR. AMITSHARMA MS. PRERNABANSAL MR. NISHANTCHAUHAN MR. SHANTANUKUMAR DR. VINAYAKMOHANGUPTA MS. PREETIGARG MS. PRIYANKAGERA MR. KAMALGOEL ACS -48285 ACS -48337 ACS -48336 ACS -48335 ACS -48334 ACS -48333 ACS -48332 ACS -48331 ACS -48330 ACS -48329 ACS -48328 ACS -48327 ACS -48326 ACS -48325 ACS -48324 ACS -48323 ACS -48322 ACS -48321 ACS -48320 ACS -48319 ACS -48318 ACS -48317 ACS -48316 ACS -48315 ACS -48314 ACS -48313 ACS -48312 ACS -48311 ACS -48310 ACS -48309 ACS -48308 ACS -48307 ACS -48306 ACS -48305 ACS -48304 ACS -48303 ACS -48302 ACS -48301 ACS -48300 ACS -48299 ACS -48298 ACS -48297 ACS -48296 ACS -48295 ACS -48294 ACS -48293 ACS -48292 ACS -48291 ACS -48290 ACS -48289 ACS -48288 ACS -48287 ACS -48286 WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC EIRC 171 170 169 168 167 166 165 164 163 162 161 160 159 158 157 156 155 154 153 152 151 150 149 148 147 146 145 144 143 142 141 140 139 138 137 136 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 119 S AGT OALLRJUOI ACS- 48389 MS. GUNJANBHARAT BHAILIMBANI MS. SANGITAMOHANLALRAJPUROHIT MS. ARATILAXMIDASMODI MR. MEHULHARILALSHAH MS. DIPIKASHAMSUNDERRATHI MS. SHEFALIPRATIKKAPASI MS. FENALIDEVANGSHAH MS. DEVIKAMOTIBHAIPATEL MS. VIRALIDIPAKSHAH MR. NAVNATHSHALIKPATIL MS. MEENAKUMARIARVINDKUMAR SHARMA MS. SARVAIYAARCHANABANARENDRASINH MR. DEEPAKKUMARBISSA MS. SURBHIMEHTA MR. SANDEEPRAGHUWANSHI MR. ERNESTRODRIGUES MR. CHANDANSHAMBHUTODI MS. ARCHINITINKUMARSHAH MR. PRAVEENTIWARI MS. DHWANIRAJESHJAIN MS. MAYURIAJAYDESHPANDE ACS-48367 MS. AKSHAYAPRABHAKRBAGWE MS. RASHMISATYENDRARATURI MR. CHANDRAKANTSHANKARBALLA MR. JAYESHKHATRI MS. SWATHISHREEKR MR. VINAYAKSHRIDHARHEGDE MR. NITESHHP ACS-48362 MS. PRAKRUTHISHETTYTGOPALKRISHNA ACS-48359 MS. ANITASHIVANANDSONTAKKI MR. SHREERAMGANESHHEGDE MS. ANNAVARAPURAMAMMADHURI MS. MEENAKSHIR MR. KAILASHCHAND MS. VEENAKS MS. PRIYANKAYADAV MR. RAHUL MR. NIKHILBINDAL MS. NEHAKHANDELWAL MR. MOHITBOTHRA MS. ANCHALJINDAL MS. KANIKAJAIN MS. MEHAKJAIN MS. SHRADHAGARG MS. NEELANSHAKHANDELWAL MR. RAHULBANGIA MS. SAMIHARAUTELA MS. SRASHTIMISHRA MR. AMANAGARWAL MR. TIPUSULTAN MR. PANKAJSACHDEVA MR. DEEPAKPATHAK MR. KUNDANKUMARMISHRA JANUARY 2017 I CHARTERED SECRETARY ACS -48390 ACS -48387 ACS -48386 ACS -48385 ACS -48384 ACS -48383 ACS -48382 ACS -48381 ACS -48380 ACS -48388 ACS -48379 ACS -48378 ACS -48377 ACS -48376 ACS -48375 ACS -48374 ACS -48373 ACS -48372 ACS -48371 ACS -48370 ACS -48369 ACS -48368 ACS -48366 ACS -48365 ACS -48364 ACS -48363 ACS -48361 ACS -48360 ACS -48358 ACS -48357 ACS -48356 ACS -48355 ACS -48354 ACS -48353 ACS -48352 ACS -48351 ACS -48350 ACS -48349 ACS -48348 ACS -48347 ACS -48346 ACS -48345 ACS -48344 ACS -48343 ACS -48342 ACS -48341 ACS -48340 ACS -48339 ACS -48338 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC SIRC SIRC SIRC SIRC SIRC SIRC SIRC SIRC SIRC SIRC SIRC EIRC CHARTERED SECRETARY I JANUARY 2017 117 116 JANUARY 2017 I CHARTERED SECRETARY 224 223 222 221 220 219 218 217 216 215 214 213 212 211 210 209 208 207 206 205 204 203 202 201 200 199 198 197 196 195 194 193 192 191 190 189 188 187 186 185 184 183 182 181 180 179 178 177 176 175 174 173 172 CHARTERED SECRETARY MR. JITHINSCARIA MR. AVILRAKSHITHSALINS MS. NISHTHAAGRAWAL MS. KOMALAWASTHI MS. KANIKAGUPTA MS. SHEFALIKAHNDELWAL MR. KAWALPREETSINGHARORA MS. ANISHAKHANNA MS. HARMILANKAUR MS. ASHNAVINAYJAIN MR. MOHDSAQIB MR. VISHALSIKARIYA MS. DIVYAGOEL MS. SHRUTIJAIN MS. LOVELYHURIA MR. OJASWIARYA MR. RISHISHARMA MR. BHARATRATHORE MR. BHUMESHKUMARYADAV MS. SHELLYBHAGATCHOUDHARY MS. NIKITAMAHESHSADHNANI MS. ANISHANAGPAL MR. AMITBENIWAL MR. ANKITBHADANI MS. BHAGYASHREEHIRAWAT MS. ARCHANAMISHRA MR. SATYAJITSINGH MR. AKHILJAIN MR. VENKATESHPRASADS MS. POOJAVIJAYGOHIL MS. HANSASHARMA MR. SATYARANJANPANDA MS. SANDHYAHEGDE MS. PRERNAAGRAWAL MS. SOHINISHUKLA MR. AMITKUMARDEY MR. MANISHKUMARBAJAJ MR. RAMESHKUMARSURAMPUDI MS. DEVANSHISATHWARA ACS-48402 MS. POOJAKAMLESHMANDALIA MR. MAYURJAISINGH ACS-48400 MS. URVICHANDRAKANTBHAISHAH ACS-48399 MR. ASHISHRAVINDRABAID MS. BHAGYASHREEKIRTIKUMARVYAS MS. POOJAVIRINDERNATHSAWHNEY MS. NIKITARAJENDRATRIVEDI MS. NIDHIDEEPAKKAPASHI MS. MAKWANAPOOJABAKULBHAI MR. SANKALPRAMCHANDRAKANDI MS. SONAMKUKREJA MS. SURUCHIMAHESHWARI MS. DHARTIPARESHTEJANI MS. RITIJAIN I JANUARY 2017 ACS -48443 ACS -48442 ACS -48441 ACS -48440 ACS -48439 ACS -48438 ACS -48437 ACS -48436 ACS -48435 ACS -48434 ACS -48433 ACS -48432 ACS -48431 ACS -48430 ACS -48429 ACS -48428 ACS -48427 ACS -48426 ACS -48425 ACS -48424 ACS -48423 ACS -48422 ACS -48421 ACS -48420 ACS -48419 ACS -48418 ACS -48417 ACS -48416 ACS -48415 ACS -48414 ACS -48413 ACS -48412 ACS -48411 ACS -48410 ACS -48409 ACS -48408 ACS -48407 ACS -48406 ACS -48405 ACS -48404 ACS -48403 ACS -48401 ACS -48398 ACS -48397 ACS -48396 ACS -48395 ACS -48394 ACS -48393 ACS -48392 ACS -48391 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC SIRC SIRC SIRC EIRC EIRC EIRC EIRC SIRC SIRC EIRC SIRC EIRC EIRC SIRC 271 270 269 268 267 266 265 264 263 262 261 260 259 258 257 256 255 254 253 252 251 250 249 248 247 246 245 244 243 242 241 240 239 238 237 236 235 234 233 232 231 230 229 228 227 226 225 277 276 275 274 273 272 MR. PRATIKJAIN MS. SURBHIGAGGAR MR. MALCHANDSAINI MS. MEENAKSHIAGARWAL MS. DIVYAMUNDHRA MS. SWETAJAIN MS. BOGASANTHOSHI MS. SHALINIOJHA MS. BIDISHAACHARI MS. PUJASINGH MS. PUJAKAUL MS. TANISHAGOURISARIA MS. POOJAJAISWAL MS. NEHAAGARWAL MS. SNEHACHANDAK MS. DIVYAJAIN MR. AMITNARAYANKAMAT MR. PANKAJJHAWAR MR. ATULKHATER MS. CHANCHALGOEL MS. DILKUSHJAMIL MS. MONAPODDAR MR. RITEEKBAHETI MS. PRITIJAIN MS. ANKITABANERJEE MR. RITANKARBANDYOPADHYAY MS. UTTARASHARMA MS. SUMMIKISHORE MS. VAISHALIJHUNJHUNWALA MS. RANUBANSAL MR. MANISHSHAW MR. KINGSUKMONDAL MR. SANDEEPBHATTER MR. KISHANKUMARSHARMA MR. RAJNEESHMISHRA MR. SAGARMALIK MS. KARTIKJAIN MS. GOKLANIKIRANPARMANAND MR. DHARMESHARUNBHAIVARA MR. MDTABISHRIZWANSIDDIQUI ACS-48449 MS. JANVIDEEPAKTALAJIA MS. ARCHANAMAHENDRAKUMARRAJPUT MR. HARSHITPARASMALSHAH MR. ABHISHEKRAMESHKULKARNI MR. ATULARYAAGRAHARI ACS-48444 MS. ADITIAKHILESHMITTAL MR. DUSHYANTSHAILESHBHAIPATADIYA MR. AKASHJAISWAL MS. SHIKHATIWARI MR. GAURAVSAINI MS. REETIKAMAHENDRA MS. RICHAKANODIA MS. MANSIJAIN ACS -48490 ACS -48489 ACS -48488 ACS -48487 ACS -48486 ACS -48485 ACS -48484 ACS -48483 ACS -48482 ACS -48481 ACS -48480 ACS -48479 ACS -48478 ACS -48477 ACS -48476 ACS -48475 ACS -48474 ACS -48473 ACS -48472 ACS -48471 ACS -48470 ACS -48469 ACS -48468 ACS -48467 ACS -48466 ACS -48465 ACS -48464 ACS -48463 ACS -48462 ACS -48461 ACS -48460 ACS -48459 ACS -48458 ACS -48457 ACS -48456 ACS -48455 ACS -48454 ACS -48453 ACS -48452 ACS -48451 ACS -48450 ACS -48448 ACS -48447 ACS -48446 ACS -48445 ACS -48496 ACS -48495 ACS -48494 ACS -48493 ACS -48492 ACS -48491 117 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC EIRC EIRC EIRC EIRC NIRC NIRC SIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC NIRC NIRC NIRC NIRC NIRC NIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC

NEWS FROM THE INSTITUTE NEWS FROM THE INSTITUTE 118 330 329 328 327 326 325 324 323 322 321 320 319 318 317 316 315 314 313 312 311 310 309 308 307 306 305 304 303 302 301 300 299 298 297 296 295 294 293 292 291 290 289 288 287 286 285 284 283 282 281 280 279 278 MR. AVNITSINGH ARORA MR. SIVARAMAKRISHNANCJ MR. NARENDERSHARMA MR. LAXMICHANNABASAVBAGALI MR. BALAMURUGANV MS. RESHMABABUP MS. PADMAJASRINIVASAN MR. AMOLMANIKBHAGAT MS. AMANDEEPKAUR MS. SONIACHABRA MS. NIMISHATAYAL MR. SACHINTAKSALI MS. MUSKANSAHNI MR. AMANGARG MS. KANGANJAIN MS. SEEMA MR. NIKHILJAIN MS. VANSHIKANAYYAR MS. SHIVANGISETHI MR. MAHAVIRSINGHRATNOO MS. MEGHAPATHAK MR. AMITKUMAR MS. SUHANIWALIA MR. RAVIKANT MS. NISHTHAMAHESHWARI MR. AMIT MR. PRINCEKUMAR MS. MEERASAWHNEY MS. NEHAKHAN MS. NANDITASINGH MS. ANNUBIRLA MS. SHUBHANGIMAHESHWARI MS. VANIKABANSAL MR. KSHITIJAGARWAL MS. KOMALBANWANI MS. KAJALANEJA MS. POOJAJAIN MS. KARISHMABAKSHI MR. DINKERMISHRA MS. YASHNAPAHWA MR. NARENDRAKUMARPRAJAPAT MS. JYOTISHARMA MR. HASMUKHSONI MR. SANJAYKUMAR MS. PRIYANKA MS. POOJASINGH MS. POONAMJANGID MS. ANUKADIAN MS. ARUSHIKATYAL MS. NEHABHATIA MS. NIDHI MR. NAVEENSHARMA MR. PRIYAKHANNA ACS -48549 ACS -48548 ACS -48547 ACS -48546 ACS -48545 ACS -48544 ACS -48543 ACS -48542 ACS -48541 ACS -48540 ACS -48539 ACS -48538 ACS -48537 ACS -48536 ACS -48535 ACS -48534 ACS -48533 ACS -48532 ACS -48531 ACS -48530 ACS -48529 ACS -48528 ACS -48527 ACS -48526 ACS -48525 ACS -48524 ACS -48523 ACS -48522 ACS -48521 ACS -48520 ACS -48519 ACS -48518 ACS -48517 ACS -48516 ACS -48515 ACS -48514 ACS -48513 ACS -48512 ACS -48511 ACS -48510 ACS -48509 ACS -48508 ACS -48507 ACS -48506 ACS -48505 ACS -48504 ACS -48503 ACS -48502 ACS -48501 ACS -48500 ACS -48499 ACS -48498 ACS -48497 NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC SIRC SIRC SIRC SIRC SIRC SIRC SIRC SIRC 373 372 371 370 369 368 367 366 365 364 363 362 361 360 359 358 357 356 355 354 353 352 351 350 349 348 347 346 345 344 343 342 341 340 339 338 337 336 335 334 333 332 331 383 382 381 380 379 378 377 376 375 374 MR. PARTHPARESHBHAISHAH ACS-48588 MS. SAVITASUNDARLALTILANTE MR. MOHITKUMARGOYAL ACS-48585 MR. SANJAYKUMARMOTILALSHARMA MS. PAWNIBHAVE MR. ADITYAKATARIA MS. BHOOMIMUKESHBHAISANGHVI MS. KRISHNADEEPAKKARIA MR. NIRAVDAHYABHAIVEKARIYA MS. MANSIKUNDANPATEL MS. MUKTAVASUDEODESHPANDE MS. SHACHIDOSI MR. JIGARPRADUMANBAGARIA ACS-48576 ACS-48577 ACS-48575 MS. POOJABHADRESHBAGADIA MS. CHANDNIMUKESHBHAICHHABARIYA MS. HIRANYAMAISURESHKULKARNI MS. KRUPALIHEMENDRABHAISHAH MR. SWAPNILVISHNUBHOSALE MS. HIMISHACHIMANPATEL MS. SWATINARAYANAN MS. SAPNAJAIN MR. NILESHPARSHURAMKELKAR MS. UTTARAMAHADEODEHERKAR ACS-48567 MS. DHWANIBHUPENDRASHAH MR. AKSHAYKUMARHEMANTKUMARRAO MS. POOJASUDHIRKOHLI MS. NAYANAUTTAMPACHANGE MS. REBECCAOSCARNEVIS ACS-48563 MR. MUKESHCHANDRASHEKHARPUROHIT MR. NACHIKETSUDHIRSOHANI MR. GOPALGIRISHCHANDE MS. CIJIANTONY MS. PRIYAUTTAMARWAT MR. ROHANMOHANDESHPANDE MS. REENARAPHEALANTHONY MS. SUNITAVIDYASAGARDUBE MS. ASHRITAREDDYTAMMA MS. POOJAN ACS-48551 MR. ABIJITHUTTUKULAMBABU MR. SWATHIGUPTAMS MS. PALLAVIPARAMESHWARHEGDE MR. SUBBYJACOBVARGHESE R UEHSKAA ADLKRACS-48601 MS. NEHACHAURASIA MR. MUKESHSAKHARAMTANDALEKAR MS. RUCHITARE MS. JAGMEETKAUR MR. ARUNKUMARMEHER ACS-48596 MR. BISWAJITDATTA MR. ASHISHOMPRAKASHKHANDELWAL MS. ANMOLKANCHWANI MS. ANSHUGOENKA MS. AMULYA MR. HARESHKUMARISHWARLALSOMJIYANI JANUARY 2017 I CHARTERED SECRETARY ACS -48591 ACS -48590 ACS -48589 ACS -48587 ACS -48586 ACS -48584 ACS -48583 ACS -48582 ACS -48581 ACS -48580 ACS -48579 ACS -48578 ACS -48574 ACS -48573 ACS -48572 ACS -48571 ACS -48570 ACS -48569 ACS -48568 ACS -48566 ACS -48565 ACS -48564 ACS -48562 ACS -48561 ACS -48560 ACS -48559 ACS -48558 ACS -48557 ACS -48556 ACS -48555 ACS -48554 ACS -48553 ACS -48552 ACS -48550 ACS -48602 ACS -48600 ACS -48599 ACS -48598 ACS -48597 ACS -48595 ACS -48594 ACS -48593 ACS -48592 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC EIRC SIRC SIRC SIRC SIRC SIRC SIRC EIRC EIRC EIRC CHARTERED SECRETARY I JANUARY 2017 119 118 JANUARY 2017 I CHARTERED SECRETARY 436 435 434 433 432 431 430 429 428 427 426 425 424 423 422 421 420 419 418 417 416 415 414 413 412 411 410 409 408 407 406 405 404 403 402 401 400 399 398 397 396 395 394 393 392 391 390 389 388 387 386 385 384 CHARTERED SECRETARY MR. PEERSAJAD AHMAD MS. SWATISRIVASTAVA MR. VIKASKUMARMAHESHWARI MS. NIDHIKULSHRESHTHA MR. AKASHKANDOI MR. PUNEETKANDPAL MS. NIDHIBHASKAR MS. LATARANI MR. GAURAVTALWAR MS. YASHVEE MR. PATHIKKUMARTEJA MR. MANOJKUMARRATHI MS. PAYALKESHARI MS. HEMAKUMARI MS. ANKITADUTTA MS. JAYASURANA MS. MEGHAKAKRANIA MR. NITESHKEJRIWAL MS. SAFIYASHAIKH MS. SIKHADHANUKA MS. NISHACHHAJER MR. ADITIAGARWAL MS. HARSHITACHANGLANI MS. SHRUTIAGARWAL MR. SHYAMKUMARJADUKA MR. RISHABHJITENDRABHAISHAH MR. DIXITDIPAKKUMARSHAH ACS-48628 MS. KRISHNASUBHASHCHANDRALODHIYA MS. DIVYAVINODJAIN MS. NANDASAMPATMUNDRA MR. VAIBHAVPANKAJBHAIKAKKAD MS. MINALVINODRAYLAKHLANI MR. RAVENDRASINGHPARIHAR MR. DIPESHSHASHIGOYAL MR. RAJDEEPSHAHANE MS. SINJUBALUK MS. ANJALIAGGARWAL MS. NAINAISRANI MS. RAVEENAANAND MS. JYOTIKUMARI MS. NAMRATASOMANI MS. POOJASHARMA MS. AMITASINGH MR. SHOBHITRAWAT MS. MAMTARANI MS. JOLLYVASUDEVGIDWANI MR. PRAKASHR MS. PARINITAGOENKA MS. SEMANTIPUTATUNDA MS. TWINKLEBIHANI MS. NEHAAGARWAL MR. ANANGOBHATTACHARYA MS. SHRISHTISINHA I JANUARY 2017 ACS -48655 ACS -48654 ACS -48653 ACS -48652 ACS -48651 ACS -48650 ACS -48649 ACS -48648 ACS -48647 ACS -48646 ACS -48645 ACS -48644 ACS -48643 ACS -48642 ACS -48641 ACS -48640 ACS -48639 ACS -48638 ACS -48637 ACS -48636 ACS -48635 ACS -48634 ACS -48633 ACS -48632 ACS -48631 ACS -48630 ACS -48629 ACS -48627 ACS -48626 ACS -48625 ACS -48624 ACS -48623 ACS -48622 ACS -48621 ACS -48620 ACS -48619 ACS -48618 ACS -48617 ACS -48616 ACS -48615 ACS -48614 ACS -48613 ACS -48612 ACS -48611 ACS -48610 ACS -48609 ACS -48608 ACS -48607 ACS -48606 ACS -48605 ACS -48604 ACS -48603 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC SIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC 483 482 481 480 479 478 477 476 475 474 473 472 471 470 469 468 467 466 465 464 463 462 461 460 459 458 457 456 455 454 453 452 451 450 449 448 447 446 445 444 443 442 441 440 439 438 437 489 488 487 486 485 484 R AASEAMHME AEMACS-48702 MR. HAJASEENAMOHAMMEDHAZEEM MR. THIMMAREDDYGATTU MR. DINESHUNNIKRISHNAN MR. SUNILDUTTSHARMA MR. MANJUNATHAA ACS-48695 MS. JINALJAYESHBHAISHAH MS. POOJAKANTIBHAIPATEL MS. VAISHALIVIMALKUMARPUNJABI MR. SOHINSAMSONDONGRE MS. AMRUTAGIRADKAR MS. BANSARIPRAFULJOSHI MS. KIRANHIRALALBASAWA MS. AVANIJOSHI MS. VARSHAMAHENDRAWAGHELA MS. PRIYADEVIDASSHANBHAG MS. APURVAMURALIDHARJOSHI MS. SHIVANIPANWAR MS. VIPENJEETKAURBANGER ACS-48682 MR. PARESHDAMODARPATIL MS. SHRUTIDWIVEDI MS. SEEMAHARISHCHANDRAGAWAS MR. SUMEETSADANANDMORE MR. SUDHIRGUPTA MR. SAMEERSUDARSHANRV MS. SWATIMEDATWAL MS. LAVINACHANDNANI MS. BHAVYATABAJPAI MS. MEGHAMALHOTRA MS. ANKITAMALANI MS. NIKITASALUJA MR. ANKITPRITHVIRAJSARAWGI MR. PRANABHKAPOOR MR. NOORMOHAMMAD MR. MOHITTIWARI MS. SOMADEY MR. SHANTANUSRIVASTAVA MR. SOHANLALKUMAWAT MR. AKSHAYPARNAMI MS. POOJAKATHPAL MS. GURPREETKAURKOHLI MR. SHEKHARKUMAR MS. PRIYAJAIN MS. SONIAGUPTA MR. HIMANSHUWASON MS. NIHARIKAMAHAJAN MR. KAMALKUMAR MS. NASRAALIHABIB MS. GARIMABATRA MR. DEEPAKSHARMA MS. SAMRIDHIMAHAJAN MR. GDEEPAK MR. GOHELSANDIPPRAVINBHAI MR. VINAYAKVISHWANATHAN ACS -48701 ACS -48700 ACS -48699 ACS -48698 ACS -48697 ACS -48696 ACS -48694 ACS -48693 ACS -48692 ACS -48691 ACS -48690 ACS -48689 ACS -48688 ACS -48687 ACS -48686 ACS -48685 ACS -48684 ACS -48683 ACS -48681 ACS -48680 ACS -48679 ACS -48678 ACS -48677 ACS -48676 ACS -48675 ACS -48674 ACS -48673 ACS -48672 ACS -48671 ACS -48670 ACS -48669 ACS -48668 ACS -48667 ACS -48666 ACS -48665 ACS -48664 ACS -48663 ACS -48662 ACS -48661 ACS -48660 ACS -48659 ACS -48658 ACS -48657 ACS -48656 ACS -48708 ACS -48707 ACS -48706 ACS -48705 ACS -48704 ACS -48703 119 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC SIRC SIRC SIRC SIRC SIRC EIRC

NEWS FROM THE INSTITUTE NEWS FROM THE INSTITUTE 120 542 541 540 539 538 537 536 535 534 533 532 531 530 529 528 527 526 525 524 523 522 521 520 519 518 517 516 515 514 513 512 511 510 509 508 507 506 505 504 503 502 501 500 499 498 497 496 495 494 493 492 491 490 MS. MEGHASHARMA MS. SAKSHI MR. JATINMANOCHA MR. SUSHANTARORA MS. PANKAJTANWAR MS. AYUSHIAGRAWAL MS. VARSHAJANGIR MS. OSHINGEHLOT MS. KARISHMA MR. ROBINPARASHAR MS. ANIMATEMANI MR. MOHAKJAIN MR. DHRUVKHANDELWAL MS. RUPALJAIN MR. RAVIKASANA MS. SALONIGUPTA MR. SANDESHSETHI MR. SADATMOINSANJARI MR. SACHINKHURANA MS. MANALINARULA MS. RADHIKAVERMA MS. PUROHITPRIYA MS. SAPNARAKHECHA MR. PANKAJBANSAL MS. ALKAJAIN MS. NIDHISIPANI MS. SUNITASAHA MS. ALOKPUROHIT MS. PRAGYAPANDEY MS. NEHALAKHOTIA MS. PRACHIAGARWAL MS. PAYELAGARWALA MR. SAIKATRAY MR. RAHULKUMAR MS. RAGINISHUKLA MR. GAUTAMGOSWAMI MS. AVNEEANUPUPASANI MS. NAMITASINGH MS. ALPAKISHORBHAISANGHAVI ACS-48720 MR. VIJAYMUKESHTHAKKAR MR. BORADHARDIKSURESHBHAI MS. SHRUSHTIJIGNYANSHUGANDHI MS. NAMRATASACHDEV ACS-48717 MS. RASHMIRAMESHARMARKAR MR. CHANDRAKANTSHIVSHANKARNIMJE MS. MAHEKDHIRENNAGDA MR. RUCHILDEEPAKGANDHI MS. GAYTRIMANWANI MS. GEETIKABISHT MS. NIKITAMEHRA MR. KARANVYAS MS. ANUPMAKASHYAP MR. RAVISINGH ACS -48761 ACS -48760 ACS -48759 ACS -48758 ACS -48757 ACS -48756 ACS -48755 ACS -48754 ACS -48753 ACS -48752 ACS -48751 ACS -48750 ACS -48749 ACS -48748 ACS -48747 ACS -48746 ACS -48745 ACS -48744 ACS -48743 ACS -48742 ACS -48741 ACS -48740 ACS -48739 ACS -48738 ACS -48737 ACS -48736 ACS -48735 ACS -48734 ACS -48733 ACS -48732 ACS -48731 ACS -48730 ACS -48729 ACS -48728 ACS -48727 ACS -48726 ACS -48725 ACS -48724 ACS -48723 ACS -48722 ACS -48721 ACS -48719 ACS -48718 ACS -48716 ACS -48715 ACS -48714 ACS -48713 ACS -48712 ACS -48711 ACS -48710 ACS -48709 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC EIRC 589 588 587 586 585 584 583 582 581 580 579 578 577 576 575 574 573 572 571 570 569 568 567 566 565 564 563 562 561 560 559 558 557 556 555 554 553 552 551 550 549 548 547 546 545 544 543 595 594 593 592 591 590 MS. KARISHMAKANKARIYA MR. PRADIPPDKASERA MS. POOJADIXIT MR. SASHIDEVDURGA MS. SHWETAGARG MS. AVANIHASMUKHCHHEDA MR. HIMANSHUDUBEY MR. AKASHGOEL MS. NEHAGUPTA MS. LEENANARANG MS. RASHMIGUPTA MR. YOGESHSHYAMHEGDE MS. RASHMIGYANKHIMAWAT MS. MEGHANARENDRAJAIN MS. ANJUVENARAMCHOUDHARY MS. RITIKAJALAN MS. SONIPANDEY MS. RAKHIGAUTAMPATWA MR. SARBESWARSWAIN MR. VIJAYKUMARS ACS-48786 MR. MUKESHSINGHRATHOR MR. MAULIKSHASHIKANTBHAIBHAVSAR MR. VIVEKKANWAR ACS- 48782 MS. BUTANIKARISHMAHARESH MS. RACHANAANJANDIXIT MS. SHANTIBENGOPALBHAIDANGAR ACS-48778 MS. APARNACHETANDAGLI MS. FORUMRAJNIKANTSHAH MS. KETKISHRIKANTKHARE MS. FORAMMAHESHBHAICHAUHAN ACS-48776 MR. YOGESHASHOKPATOLE MS. YOGESHWARIYOURAJCHAMBHARE MR. AKHILESHKUMARSINGH MR. PARAGMITTAL MR. MITESHPRAVINBHAIPATEL MS. ANKITABENHAMIRBHAIAHIR MS. SANKITADEVRAJAJINKYA MS. PRITIHARISHMANYAL MR. NINADVIJAYSAWANT MS. ANKEETABGOUTAMDAGA MR. AMITGANAPATIINAMADAR MR. JUBINJOHN MR. MADHAVBHAT MS. SOWMIYAV MS. VINITASINGH MS. TRIPTIMITTAL MS. RASHMIPUROHIT MR. SANCHITSHARMA MS. RAKHIMAKHLOGA MR. AMITKUMARSHUKLA MR. SANDEEPKUMAR MS. SUNAKSHISACHDEVA MR. VIJITBAJ JANUARY 2017 I CHARTERED SECRETARY ACS -48807 ACS -48806 ACS -48805 ACS -48804 ACS -48803 ACS -48802 ACS -48801 ACS -48800 ACS -48799 ACS -48798 ACS -48797 ACS -48796 ACS -48795 ACS -48794 ACS -48793 ACS -48792 ACS -48791 ACS -48790 ACS -48789 ACS -48788 ACS -48787 ACS -48785 ACS -48784 ACS -48783 ACS -48781 ACS -48780 ACS -48779 ACS -48777 ACS -48775 ACS -48774 ACS -48773 ACS -48772 ACS -48771 ACS -48770 ACS -48769 ACS -48768 ACS -48767 ACS -48766 ACS -48765 ACS -48764 ACS -48763 ACS -48762 ACS -48814 ACS -48813 ACS -48812 ACS -48811 ACS -48810 ACS -48809 ACS -48808 WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC EIRC EIRC EIRC EIRC EIRC SIRC EIRC EIRC EIRC SIRC SIRC SIRC SIRC SIRC SIRC CHARTERED SECRETARY I JANUARY 2017 121 120 JANUARY 2017 I CHARTERED SECRETARY *RESTORED FROM 01.11.2016 TO30.11.2016 RESTORED* 613 612 611 610 609 608 607 606 605 604 603 602 601 600 599 598 597 596 636 635 634 633 632 631 630 629 628 627 626 625 624 623 622 621 620 619 618 617 616 615 614 NO. SR. 16642 A 1 9022 A 2 34980 A 3 16068 A 4 3160 A 5 15681 A 6 17783 A 7 33431 A 8 24599 A 9 CHARTERED SECRETARY R AU IDAIA GAA ACS-48831 MR. RAHULGIRDHARILALAGRAWAL MS. PRIYANKANITINKUMARDIGHE S AIHE NNMRH UKRIACS-48829 MS. VANISHREEANANDMURTHYKULKARNI R RSNASBAAY HTACS-48828 MR. PRASANNASUBRAMANYABHAT MS. VEENASHANKARHUNSIMARAD MR. NIKHILKHANDELWAL MS. ESHITAJAIN MS. DIVYABADAYA MS. MEHREENRAHMAN MS. RAVINASOOD MS. SUKHJITKAUR MR. MAYANKVASHIST MR. SANOJKUMAR MS. VARSHAJAIN MR. RITURAJRASTOGI MS. AYUSHITHAKURIYA MR. DINESHKUMARSHINDI MS. SWARNA MS. SHRUTIGUPTA MS. ANISHADUTTA MR. JAIPRAKASHSAINI MS. SHILPARANI MS. NIVEDITAARUNJUVATKAR MS. ROSHNIMOHANLALJETHANI ACS-48847 MS. VIDHIMEHTA MS. SUMUKHIJAYVANTVAISHAMPAYAN MR. VIJENDERPALSINGHJUDGE R IAKMRKSOKMRDV ACS -48843 MS. DIPIKABHUTRA MR. GAURAV MR. MIRAJKUMARKISHORKUMARDAVE MR. LLOYDSERRAO MS. SHEFALIRAVIJITTANNA MS. RACHANALAXMANKANOR ACS- 48837 MS. SURABHINARAYANDAFTARI MR. MALAYTRUPTESHDESAI MR. PARMARJAYESHMANSHUKHBHAI MS. ROMANILKANTHAJOSHI MS. SAKSHISHIVKUMARSHARMA MS. POOJABIHARILALKUKRETI MR. ROMIKUMARAGRAWAL MR. GANDHIMAUNISHKUMARSANATKUMAR / MEM. A/F NO. NAME MEM. K. VENKATA RAMRAO MANISHA VEDAK PRAGATI JAIN PAYAL MPURI K NARAYANA RAO PRIYA TIWARI AITIPAMULA ARAVIND SMIT SHAILESHSHAH GAURAV SHARMA I JANUARY 2017 ACS -48830 ACS -48827 ACS -48826 ACS -48825 ACS -48824 ACS -48823 ACS -48822 ACS -48821 ACS -48820 ACS -48819 ACS -48818 ACS -48817 ACS -48816 ACS -48815 ACS -48855 ACS -48854 ACS -48853 ACS -48852 ACS -48851 ACS -48850 ACS -48849 ACS -48848 ACS -48846 ACS -48845 ACS -48844 ACS -48842 ACS -48841 ACS -48840 ACS -48839 ACS -48838 ACS -48836 ACS -48835 ACS -48834 ACS -48833 ACS -48832 PLACE WIRC WIRC WIRC WIRC NIRC NIRC SIRC SIRC SIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC NIRC SIRC SIRC SIRC EIRC ISSUED* OF PRACTICECERTIFICATE * ISSUED DURINGTHE MONTHOFNOVEMBER,2016 NO. SI. 11 10 20 19 18 17 16 15 14 13 12 31 30 29 28 27 26 25 24 23 22 21 6 5 4 3 2 1 9 8 7 0A3988 A 10 4A16705 6386 A 6296 F 14 F 13 12 5A19977 A 15 7A33979 4295 A F 17 16 8A29836 A 18 0A6882 1937 A F 20 19 1A6401 A 21 2A11551 A 22 3A21198 A 23 4A28130 A 24 5A21777 A 25 6A32326 A 26 11 NAME MR. MOHAMMEDTARIQHAROONRASHIDBUDGUJAR MR. PRASANNAKUMARBHAGAVANTHBEDI MS. SOUMYANR MS. DISHABHARATPATEL MS. VANDANAPERIWAL SH. VJBALAKRISHNAN R UTRVMHSWRROFCS-7885 MR. GUNTURVAMSHESHWARRAO MR. NAUFALNAZAR MS. MEENAKSHIMATHUR MS. RICHAPAHWA MR. DEVESHPANT SH. SATYAPRAKASH MR. REAGANALVITANTHONYSAMPAYO MR. MANISHKUMARARORA MR. ABDULQUADIR MS. LEENACHITTI MR. SARATHSASIDHARA MR. RAJANGHAI MR. ABHISHEKPATHAK MS. VINITAKABRA R AIHKIHAPAA OAACS-47345 MR. LALITHKRISHNA PRASADKOTA MS. MANISHAAGARWAL MS. PRIYANARNOLIA MR. NISHANTTAYAL ACS-43701 MR. AKASHBANSAL MR. HAREESHAGOWDA MS. KHUSHBUKUMARIAGARWAL MS. SUNITAYADAV MS. ANITAHUJA MS. BHAWIKARAMNANI MS. PALLAVIK 11825 A RAJKUMAR NEERJA CHHABRA MANOJ KUMARSATNALIWALA RAJAGOPALA NAGARAJAN S VASUDEV RAMESH CHANDRA CHOPRA RANGANATHA CHENNA SHRUTI RAJINDERCHOPRA D SGUNASINGH YOGYA DUTT ARYA SANDRA LOBO RAMNATH NATESAN IYER SAMEER SHAH ANAND VIJAY KUMARCHAPEKAR NIDHI AGARWAL NIDHI VIVEK CHANDRAKANT DANAIT EKTA TUSHAR VADARIA ACS -43981 ACS -35199 ACS -33565 ACS -23831 ACS -47340 ACS -47272 ACS -46967 ACS -45633 ACS -45108 ACS -43833 ACS -47721 ACS -47711 ACS -47669 ACS -47607 ACS -47517 ACS -47504 ACS -47471 ACS -45210 ACS -47310 ACS -47211 ACS -44713 ACS -44657 ACS -44176 ACS -43103 ACS -40699 ACS -37248 ACS -27692 FCS -8175 MEMB. NO. 121 EN COP REGN. IC17455 WIRC IC17454 WIRC IC17459 WIRC IC17470 WIRC 17467 WIRC 17462 WIRC IC17460 NIRC 17458 NIRC IC17469 17468 NIRC NIRC 17465 17464 NIRC NIRC IC17479 17478 NIRC NIRC 17475 17474 NIRC 17473 NIRC NIRC 17471 NIRC IC17456 SIRC IC17453 SIRC IC17452 SIRC IC17461 SIRC IC17466 SIRC 17463 EIRC 17457 SIRC IC17481 17480 EIRC EIRC 17477 SIRC 17472 SIRC IC17482 SIRC 17476 EIRC F/WIRC WIRC WIRC WIRC WIRC WIRC NIRC NIRC NIRC NIRC NIRC EIRC SIRC SIRC SIRC SIRC EIRC NO.

NEWS FROM THE INSTITUTE NEWS FROM THE INSTITUTE 122 84 83 82 81 80 79 78 77 76 75 74 73 72 71 70 69 68 67 66 65 64 63 62 61 59 58 57 56 55 54 53 52 51 50 49 48 47 46 45 44 43 42 41 40 39 38 37 36 35 34 33 32 60 MR. ASHUSACHDEVA MR. NARAYANDUTTTIWARI MS. YASHIKAAGRAWAL MR. TARUNCHAKARWARTY MR. AMANISHKUMAR MR. ANKITJAIN MS. POOJACHOTANI MS. ALPNAGALGAT MS. SEJALTEJAWAT MS. SWETAAGARWAL DR. CHIDAMBARAIYERJ MR. DIPESHKAMLESHJAIN MS. MEGHAKHANDELWAL MS. SONI ACS-37891 MS. MAMTATIWARI MS. NAINAKAUSHAL MR. GAURAVKAUSHIK MS. ASHWINIPUNDALIKKAMBLE MR. VEERAMANIKANDANT MS. PRIYANKAJOSHI MS. MEGHAAGARWAL MR. MOHITCHANDRASHARMA SH. ANUPAMCJOSHI SH. GAURAVPINGLE SH. RAMACHANDRAMURTHYGOLLAKOTA S AIH AAA AAEACS-47905 MS DEEPTIGAURAVSRIVASTAV MS. MANISHAGAJANANJAWALE MS. NEHAGUPTA MS. PRIYAMALHOTRA MS. DEEPIKABANSAL MS. SHAHSIDDHISUMANBHAI MS. NANCYGULATI MR. VISHALMITTAL MS. DEEPALIGAJANANMORE ACS-21941 MR. VARUNKUMARJINDAL MR. AKSHATCHECHANI MS. VIDNYAKEDARSAKHARDANDE SH RAJIBLOCHANSARANGI MS. GORIKAARORA ACS-45853 MR. SAHILMALHOTRA MS. KALINDEECHOUDHARY MS. MANSIMAHESHKUMARBAVISHI MR. AKASHPHALSWAL ACS-47744 MR. ANANDRAMESHPARAB MR. SUJITHRAVINDRANATH MR. SANDIPSUMTILALCHORDIYA ACS-47741 MR. RAHULDNYANESHWARDAHAPUTE MS. MONICANANDA MR. SOURABHBATRA MS. ASHAAGARWAL MS. SAREEKAJAIN MS. SIMPIBORAH MR. ANASABDULHAIPATEL ACS -47857 ACS -47830 ACS -47818 ACS -47791 ACS -47772 ACS -47735 ACS -47641 ACS -47639 ACS -47634 ACS -47628 ACS -47608 ACS -47199 ACS -46837 ACS -46772 ACS -46444 ACS -44732 ACS -44393 ACS -37576 ACS -36608 ACS -33269 ACS -33192 ACS -26127 ACS -22733 ACS -46227 ACS -47811 ACS -47810 ACS -42373 ACS -40670 ACS -36647 ACS -32117 ACS -31601 ACS -23506 ACS -20312 ACS -47426 ACS -47328 ACS -45984 ACS -45233 ACS -43884 ACS -39757 ACS -47731 ACS -47646 ACS -47636 ACS -47632 ACS -47626 ACS -47470 ACS -7594 FCS -7334 IC17524 WIRC 17518 WIRC 17513 WIRC 17512 WIRC IC17505 WIRC 17502 WIRC 17500 WIRC 17499 WIRC 17495 WIRC 17494 WIRC 17492 WIRC 17490 WIRC 17489 WIRC IC17483 WIRC IC17535 17534 NIRC 17533 NIRC 17532 NIRC NIRC 17530 17529 NIRC NIRC 17523 17522 NIRC 17521 NIRC 17520 NIRC 17519 NIRC NIRC 17516 NIRC 17514 NIRC IC17508 17507 NIRC 17506 NIRC NIRC 17504 17503 NIRC NIRC 17501 NIRC 17497 17496 NIRC NIRC 17493 NIRC 17488 17487 NIRC NIRC IC17510 NIRC IC17531 EIRC 17528 17527 SIRC 17526 EIRC 17525 EIRC SIRC 17517 SIRC 17515 EIRC IC17511 SIRC IC17509 SIRC 17498 SIRC 17491 SIRC 17486 17485 EIRC EIRC IC17484 EIRC 137 136 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 119 118 117 116 115 114 113 112 111 110 100 103 102 101 109 108 107 106 105 104 86 85 92 91 90 89 88 87 95 94 93 98 97 96 99 R OIKMRVKSPNAEACS-47920 MR. ROHITKUMARVIKASPINGALE MR. SHUBHAMSHUKLA MR. SUNILKHATRI ACS-47968 ACS-47960 MR. SOMESHCHANDRASHEKHARKALE MR. JEETENDRAROCHIRAMKESWANI ACS-47925 MS. NEHAAVINASHMARATHE MR. SHANTANUDATTATRAYAJAGTAP MR. ANKURKUMARDINESHCHANDRAGANDHI MR. ABHISHEKCHANDRASHEKHARSHALU MR. MOHAMMEDGOUSCHANDPASHASHAIKH R UHS IHNKNRP ACS-32743 MS. DEEPTIGROVER MR. SUBHASHKISHANKANDRAPU ACS-48018 MR. HASMUKHBHUDARBHAIPRAJAPATI MR. GURPRITSINGH MS. PURVAHARSHALBHOKRE MR. DEEPANSHUARORA MR. HARSHUPADHYAY ACS-40628 ACS-37338 MR. HIRENHASMUKHSHAH MS. POONAMLAKHIPRASADPAREEK MS. JHANKIGIRDHARILALPOPTANI MS. HINALRONAKMEHTA MS. ANITARAMESHCHOUGULE MS. CAUVERYRAWAL ACS-46061 MR. ASHUTOSHSHARMA MR. SHEKHARSHARMA MR. BARAMDEOHIRALALSHARMA MR. MUDITHA MS. MEENAKSHIUPMAN MR. KJAGDISHCHOWDHARY MRS. SHAGUNVERMA MR. AMITGUPTA MRS. NITAASHOKBUGADE MR. MANISHLOKWANI ACS-48103 MS. RAJVISHAH MR. NIKUNJVASANTPATEL MR. CHETANBHARATKHALADKAR MR. MANMOHANSHARMA ACS-47938 MR. DEVENDRASINGH MR. TOSHIKHITENDRASHAH MR. VIJAYRAMCHANDRAALIMKAR SH. SRKRISHNAN MS. PRERNABOTHRA SH. NAVINKUMARJAIN R.MNS MTAHAKRACS-17386 MRS. MANASYAMITABHYANKAR SH. YASHPALBANSAL R AME HNBA AAI ACS-43050 MR. RAIMEENBHANUBHAIMARADIA MS. KAMNA MS. GARIMAJAIN R WMNTA EKTS ACS-47893 MR. SWAMINATHANVENKATESH MR. VISHWASJAIN ACS-46678 MR. JAGADISHPRASADDAS MR. ARJUNTYAGI MR. MUKESHBHAWARLALUNECHA JANUARY 2017 I CHARTERED SECRETARY ACS -47874 ACS -48004 ACS -47927 ACS -48016 ACS -44849 ACS -44676 ACS -44595 ACS -43668 ACS -42463 ACS -25618 ACS -47929 ACS -39903 ACS -48052 ACS -47527 ACS -45687 ACS -44190 ACS -44050 ACS -39766 ACS -39100 ACS -36403 ACS -34576 ACS -31557 ACS -22576 ACS -48105 ACS -48087 ACS -48048 ACS -47978 ACS -47913 ACS -22420 ACS -10703 ACS -42769 ACS -39886 ACS -47859 ACS -47623 ACS -47084 FCS -7654 FCS -2075 FCS -8980 IC17537 WIRC IC17539 WIRC IC17541 WIRC 17540 WIRC 17538 WIRC IC17543 WIRC IC17544 WIRC IC17587 WIRC 17584 WIRC 17581 WIRC 17580 WIRC 17574 WIRC 17570 WIRC 17569 WIRC 17567 WIRC 17566 WIRC 17562 WIRC 17560 WIRC IC17583 WIRC 17582 WIRC 17576 WIRC 17565 WIRC 17561 WIRC IC17548 WIRC 17547 WIRC IC17550 WIRC IC17552 WIRC IC17554 WIRC IC17555 WIRC IC17536 NIRC IC17542 NIRC IC17588 NIRC 17586 17585 NIRC NIRC 17579 17578 NIRC 17577 NIRC NIRC 17575 NIRC 17573 NIRC 17571 NIRC 17568 NIRC 17563 NIRC IC17546 NIRC IC17549 NIRC IC17553 NIRC 17551 NIRC IC17558 NIRC 17556 NIRC IC17545 SIRC IC17572 SIRC 17564 SIRC IC17557 EIRC IC17559 SIRC CHARTERED SECRETARY I JANUARY 2017 123 122 JANUARY 2017 I CHARTERED SECRETARY 164 163 162 161 160 159 158 157 156 155 154 153 152 151 150 149 148 147 146 145 144 143 142 141 140 139 138 180 179 178 177 176 175 174 173 172 171 170 169 168 167 166 165 190 189 188 187 186 185 184 183 182 181 CHARTERED SECRETARY MR. VYANKATESHMADHUKARKINHIKAR H HNR EHRRJNL FCS-8804 SH. ASHOKKUMARARORA ACS-48240 SH. CHANDRASEKHARRAJANALA MR. SANANDSINGH MR. SANKAPHANIPAVANKUMAR MR. SUMANSUNDARRAJ MR. UDITDUA MR. AMARKUMAR MR. TANUJKUMARSAXENA MR. SUDISHKUMARGUPTA MR. MANISHKUMAR MS. SHWETAVIJAYKANDANI MS. NITISHAANAND MS. NEHADEWAN MS. SUMANBAJORIA ACS-48017 MS. KRISHNABENJAYESHBHAIPAREKH MS. MANPREETKAUR MS. EKTAJAIN MS. DEEPABAJAJ MS. KOMAL MS. BEENARANI ACS-47961 MR. BALAKRISHNANAP MS. ANJUBANSAL MR. DEVESHSURESHBHAIJOSHI MR. NAMANSETHI MR. AMITKUMAR MR. ABHINAVAGARWAL MS. ANKITANIGAM SH. ANILKOHLI MS. PRACHISINGH MS. MEENAKSHIKAUSHIK R RNA RSDDNAEACS-47349 MR. PRANJALPRASADDONGARE MS. RUKHSARBEGAM MR. ANKURAWASTHI MR. LALITMOHAN MS. TANVIMALHOTRA MR. AMTESHWARSINGH MR. ABHILASHS ACS-44427 MS. SONIABHATIA MS. AYUSHIGUPTA MR. YOGENDRAFATESINHPARMAR MS. PUJAJAIN MS. GAGANDEEPKAUR S HTAGAVSWKRAACS-41337 ACS-36104 MS. CHITRANGDAVISHWAKARMA MS. ALICESANTHIYAS MS. NIMITAKALUBHAIRADADIYA MR. KARTHIKSN SH. SANTOSHKUMARSINGH SH. AJMALAHAMMEDT MS. SHWETAJAIN MS. FALAHTAJTANZEEM MRS. PRERANAJHA MS. SAMANTDIPTIDILIP I JANUARY 2017 ACS -44704 ACS -48238 ACS -47806 ACS -47629 ACS -47728 ACS -47500 ACS -47796 ACS -42858 ACS -35197 ACS -24010 ACS -20904 ACS -47047 ACS -31960 ACS -22604 ACS -48168 ACS -48160 ACS -48085 ACS -48013 ACS -47513 ACS -46941 ACS -46266 ACS -45813 ACS -32444 ACS -47784 ACS -47465 ACS -46852 ACS -46754 ACS -46526 ACS -46127 ACS -45794 ACS -45477 ACS -45029 ACS -44634 ACS -38570 ACS -30670 ACS -39975 ACS -34876 ACS -15964 ACS -46174 ACS -25219 ACS -23830 ACS -22474 FCS -4148 FCS -1310 FCS -7889 IC17601 WIRC 17598 WIRC 17593 WIRC IC17629 WIRC IC17628 WIRC 17627 WIRC 17621 WIRC 17619 WIRC IC17642 WIRC 17640 WIRC 17638 WIRC 17636 WIRC 17634 WIRC 17633 WIRC IC17611 17610 NIRC 17609 NIRC 17608 NIRC 17607 NIRC 17606 NIRC 17604 NIRC 17603 NIRC NIRC 17600 NIRC 17597 17596 NIRC NIRC 17594 NIRC 17592 17591 NIRC 17590 NIRC 17589 NIRC NIRC IC17631 17630 NIRC NIRC IC17626 17625 NIRC 17624 NIRC 17623 NIRC NIRC 17620 NIRC 17617 NIRC IC17616 NIRC IC17632 NIRC IC17615 17614 SIRC 17613 EIRC 17612 SIRC SIRC 17602 SIRC 17599 EIRC 17595 SIRC IC17622 SIRC 17618 EIRC IC17641 SIRC 17639 SIRC 17637 SIRC 17635 EIRC 243 242 241 240 239 238 237 236 235 234 233 232 231 230 229 228 227 226 225 224 223 222 221 220 219 218 209 208 207 206 205 204 203 202 201 200 199 198 197 196 195 194 193 192 191 217 216 215 214 213 212 211 210 MS. BHAGYASHREEBALKRISHNAKULKARNI MR. ALIASGARMUSTANSIRLOKHANDWALA MR. NISHANTGOYAL MS. VINITAHIRWANI MS. KIRANSHARMA MS. PRIYAJAIN MS. MAMTAKABRA MR. ANKITRAWAL MR. VINODKUMARSHARMA MS. SWETASHARMA ACS-47575 MR. ADITYAJAIN MS. NEHAGUPTA MR. DWIREFLAXMIPRASADVORA MS. NIDHIAGARWAL MS. RICHASHARMA MS. ARUNITACHOUDHURY MS. KAJALJAIN MS. ANKITASINGLA MS. NEHAGUPTA MS. MONABANSAL MR. VIRENDRAKUMARSAINI ACS-40482 MS. POOJAGUPTA MRS. SWAPNALISHAILESHBORHADE MR. RUSHIJAGDISHSATHE MR. ABHISHEKPALIWAL MS. NISHTHAKUKREJA MS. LEENAJAIN MS. EKTASHARMA MS. NUPURGUPTA MR. MANVINDERSINGHKALRA MR. VENKATESHPRASADS MS. HUMASEHRISH MS. POOJADATTA MR. DINESHAASHARA MR. PRAVEENTIWARI MR. ROHITCHOPRA MS. JYOTIARYA MR. DEEPAKASWANI MS. MANPREETKAURHORA MS. SUHASIBANTHIA MS. MEENALKEEJA MS. NEHAGARG MS. KUMUDSOMANI MR. VIKMOHAPATRA MS. SOMANPOOJASUNIL R IEDARJNR AIAACS-38528 ACS-37872 MS. NEHAMAYURESHKOLHE MR. HIRENDRARAJENDRAKATIRA MR. KEKINPRAKASHBHAIPATEL MS. SONAMNATANI MS. PREETIBHATIA MS. ANURADHASAXENA MS. POOJAMAJITHIA SH. PARTHAKAMALSEN ACS -48318 ACS -48315 ACS -48285 ACS -48254 ACS -48237 ACS -48186 ACS -48067 ACS -47945 ACS -47816 ACS -47723 ACS -47714 ACS -47010 ACS -46786 ACS -46518 ACS -45717 ACS -46670 ACS -45454 ACS -44349 ACS -44163 ACS -44142 ACS -41230 ACS -40200 ACS -39500 ACS -39446 ACS -29344 ACS -36454 ACS -43387 ACS -48415 ACS -44712 ACS -41703 ACS -36278 ACS -48372 ACS -48159 ACS -48050 ACS -48024 ACS -47979 ACS -47757 ACS -47705 ACS -47273 ACS -45777 ACS -44600 ACS -43801 ACS -39395 ACS -36243 ACS -35807 ACS -35630 ACS -24387 ACS -11527 FCS -8500 123 IC17692 WIRC 17690 WIRC 17688 WIRC 17680 WIRC IC17684 WIRC IC17672 WIRC IC17673 WIRC IC17654 WIRC 17653 WIRC 17649 WIRC 17647 WIRC 17644 WIRC 17643 WIRC IC17669 WIRC 17663 WIRC IC17667 WIRC IC17695 17694 NIRC NIRC 17689 NIRC 17687 17686 NIRC 17685 NIRC NIRC 17683 17682 NIRC NIRC IC17679 17678 NIRC NIRC 17676 17675 NIRC 17674 NIRC NIRC 17671 17670 NIRC NIRC IC17659 17658 NIRC NIRC 17656 17655 NIRC NIRC 17652 17651 NIRC 17650 NIRC NIRC 17646 NIRC IC17668 NIRC 17666 17665 NIRC 17664 NIRC NIRC IC17661 NIRC IC17693 EIRC 17691 SIRC 17681 EIRC IC17677 EIRC IC17660 EIRC 17657 SIRC 17648 EIRC 17645 EIRC IC17662 EIRC

NEWS FROM THE INSTITUTE NEWS FROM THE INSTITUTE CANCELLED* 124 *CANCELLED DURING THEMONTHOFNOVEMBER,2016 268 267 266 265 264 263 262 261 260 259 258 257 256 255 254 253 252 251 250 249 248 247 246 245 244 NO. SL. 21 14 25 15 26 16 17 18 19 20 21 22 10 23 12 13 11 1 2 3 4 5 6 7 8 9 MR. ARJUN SURYANARAYANMR. ARJUN AMANCHI MR. UMANG ANILKUMAR LALPURWALA R AEDAUA UAKRACS8950 MR. RAJENDRAKUMARBUPARKAR MR. ANIL KUMAR MR. ANIL FCS6325 MR. SUDHIRMUKUNDGALANDE NAME RSBAHCADRSAM ACS42135 MR.SUBHASH CHANDERSHARMA S AR AATGKAEACS45512 MS. GAURIHAMANT GOKHALE MS DEEPA BAJAJ MR. KRISHANKUMARG MS. MONIKUNTALA BOWRA ACS31184 MRS. DIVYA ASHUTOSH PUGALIA R IEDAKMRGPAFCS6755 MR. VIRENDRA KUMARGUPTA MS. ASHIMA BANODHA MS. ASHIMA MS. GEETHA JAIDEEP S IA AIHHIKTAIACS42148 MS. BINAL HARISHBHAIKOTHARI MS. SWATI MRS. RUCHIVIJAYVERGIYA MR. PUNIT KUMAR TRIVEDI MS. VARSHA DANGAYACH MS. NAMRATA SARAF S LVAPTR MCAOACS38986 MS. FLAVIA PETERR MACHADO MRS. SHREYA JAIN MS. AYUSHI AGARWAL MR. RAMKUMARBHARGAV MR. BALWANT SINGH MR. RAHUL CHAWLA R AASEAMHME AEMACS-48702 SH. DEEPAKJAIN MR. HAJASEENAMOHAMMEDHAZEEM ACS-48630 MR. THIMMAREDDYGATTU ACS-48623 MR. HIMANSHUWASON MR. RISHABHJITENDRABHAISHAH ACS-48625 MR. DIXITDIPAKKUMARSHAH MR. RAVENDRASINGHPARIHAR MR. VAIBHAVPANKAJBHAIKAKKAD MS. SINJUBALUK ACS-48583 MS. NEHACHAURASIA ACS-48596 MR. ASHISHOMPRAKASHKHANDELWAL MR. NIRAVDAHYABHAIVEKARIYA MS. SUNITAVIDYASAGARDUBE MR. ABIJITHUTTUKULAMBABU MS. KANGANJAIN MR. NAVEENSHARMA MR. AKASHJAISWAL MR. PANKAJJHAWAR MR. MANISHSHAW MS. SHRUTIJAIN MR. RISHISHARMA MS. SOHINISHUKLA MR. NITESHHP MS. PREETISHARMA MR. GAURAVARORA ACS -48701 ACS -48659 ACS -48629 ACS -48620 ACS -48602 ACS -48556 ACS -48553 ACS -48535 ACS -48498 ACS -48496 ACS -48473 ACS -48460 ACS -48430 ACS -48427 ACS -48409 ACS -48363 ACS -48336 ACS -48327 FCS 8887 ACS 38420 ACS 13430 MEMB NO ACS 22604 ACS 28566 ACS 29713 ACS 30105 ACS 43216 ACS 42914 C264140WIRC 11450 ACS22614 FCS 8682 ACS 31802 ACS 40824 ACS 23640 ACS 39955 ACS 28395 ACS 43702 ACS 38758 FCS -3792 50 WIRC 15403 20 WIRC 12100 46 NIRC 14863 WIRC 13881 50 NIRC 15803 60 WIRC 16708 72 SIRC 17221 67 EIRC 16878 NIRC 14391 46 NIRC 14362 76 NIRC 17266 62 SIRC 16129 67 WIRC 16570 67 WIRC 16379 66 NIRC 16668 69 EIRC 16394 56 WIRC 15662 45 NIRC 14952 07 NIRC 10870 66 EIRC 16766 64 NIRC 16145 15 NIRC 11759 17 WIRC 11872 IC17716 WIRC 17715 WIRC 17714 WIRC 17713 WIRC 17710 WIRC 17709 WIRC 17708 WIRC IC17717 NIRC 17706 17705 NIRC 17704 NIRC NIRC 17701 17700 NIRC NIRC 17697 17696 NIRC NIRC IC17720 NIRC IC17719 17718 SIRC SIRC 17712 17711 SIRC EIRC 17707 SIRC 17703 17702 EIRC EIRC 17699 17698 EIRC SIRC 84WIRC 9884 27WIRC 8297 COP NO. REGN ADMITTED# LICENTIATE ICSI # ADMITTED DURINGTHEMONTHOFNOVEMBER,2016 NO. SL. 06903 10 27 28 29 30 31 32 33 34 35 36 6902 6901 9 6900 8 6899 7 6898 6 6897 5 6896 4 6895 3 6894 2 1 telephone no:011-45341063. For queriesifany,pleasecontacton [email protected]. please besenttotheMembership sectionatemailidrajeshwar. Rs. 500/-fornon-members.Request alongwiththepaymentmay headquarters oftheInstituteforacost ofRs.250/-formembersand the Instituteason1stApril,2016.TheCDsareavailableat The InstitutehasbroughtoutaCDcontainingListofMembers fee shall remain in vogue for therevised feestructure. of feeinadvance/concessional The existingfacilityforpayment of PracticefeeforAssociateandFellowMembersw.e.f. 1 fee, EntranceFeeandCertificate in theAnnualMembership Revision Fellow Membersw.e.f. 1st April,2017,asunder: of PracticefeeforAssociateand fee andCertificate fee, Entrance Membership in Annual revision oftheInstitutehasdecided The Council Particulars nulMmesi e s 15R.20 s 50Rs.3000 Rs.1500 Rs.2500 Rs.1125 Annual Membershipfee Entrance fee etfct fPatc e s 00R.20 s 00Rs.2000 Rs.1000 Rs.2000 Rs.1000 Certificate ofPracticefee ANNUAL MEMBERSHIPFEE LICENTIATE MS. KANIKA SHARMA MR. BHAVESH SONI MS. AKANSHA MS. KAMAKSHISINGH MR. ABHIJAATSINHA A MR. ABHIJIT MAJUMDER MR. ABHIJIT MR. ASHISH MR. ASIF KHAN MR. ASIF R HHMSO IASUHIACS44325 MR. SHAHMASOOMHIMANSHUBHAI MS. AANCHAL BEDI MS. AANCHAL NO. ATTENTION MEMBERS MR. UDAYBHIKAJIRAOKITTEKAR MS. PADMAPRIYAM MS. KOMALGOVINDPASARI MR. KUSHALRAJENDRARAICHADA MR. RAMESHA MR. VINEETSINGLA MR. VIGNESH MR. PRASANNAVENKATESWARANS MR. GADIGEPPASHIVANANDTIGADI MS. SNEHAS NAME JANUARY 2017 xsigfePooe e xsigfeProposed fee Existingfee Proposedfee Existing fee s 50R.20 s 00Rs.2000 Rs.1000 Rs. 2000 Rs. 1500 Associate I CHARTERED SECRETARY ACS 30953 ACS 33475 ACS 41944 FCS 8901 ACS 13519 ACS 20849 ACS 46443 ACS 44633 ACS 45290 Fellow st April,2017 49 NIRC 14897 25 NIRC 12857 64 NIRC 16742 27 WIRC 12971 27 WIRC 12971 74 NIRC 17245 67 EIRC 16577 64 WIRC 16949 67 WIRC 16678 67EIRC 8687 REGN. WIRC WIRC WIRC WIRC NIRC SIRC SIRC SIRC SIRC SIRC CHARTERED SECRETARY I JANUARY 2017 125 124 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY The GuidelinesoftheCouncilfornameaProprietorshipconcern/FirmTradeunderRegulation169 . General 3. . A trade/firm name may include the name(s) of the member(s) as it/they appear in the Register of Members in the following manner: 2. A trade or firm or concern name shall be restricted to the name(s) of the proprietor/partners or a name which is already in use. 1. i) For Partnership firm: (ii) i ForSoleproprietorshipconcern: (i) (xv) Approval accorded by the ICSI for any trade/firm name shallnot tantamount to any protection by the ICSI in case of any dispute (xiii) i A trade or firm name shall not be approved if the same or similar or nearly similar name is already used by a Company Secretary (i) (xiv) Any reconstitution of the firm with the same firm name shallnot have effect except with the prior approval of the Council i) A trade/firm name shall not contravene the (ii) ii The trade or firm name may be suffixed by the suffixes “& Co.”, “& Company” or “& Associates”. However, any suffixes that may (iii) i) The word “and”/ “&”could be used in between the first name/middle name/surname including initials thereof, of the partners of (iv) v A firm name may also be allowed without the use of the suffixes “& Co.”, “& Company” or “& Associates” provided full first names (v) v) h nm o a oe rpitrhp ocr sal o b alwd ihu te s o sfie “ C. / ad opn” / “& “and Company” / Co.” “& suffixes of use the without allowed be not shall concern proprietorship sole a of name The (vi) i) Trade/firm names denoting publicity shall not be allowed. Any trade/firm name, regardless of reason or logic, using the initials, (ix) (viii) Descriptive trade/firm names viz. Fire, Smash, Leader, Champion, Mastermind, Super, Supreme etc.shall not be allowed. A trade/firm name, which has no relationship with the name of member(s) as above, shall not be allowed. (vii) x) In case any change in the status of the firm from individual firm to partnership firm or vice-versa, the firm name already been in (xi) (x) xi A trade/firm name which was in use by a proprietor or partners shall not be allowed to any other member or members for a period (xii) e Combinationof(c)and(d)above,inanyorder Combination of initials of first names and/or middle names and/or surnames of the two or more partners (e) (d) Combination of first names and / or middle names and/or surnames of two or more partners with or without commonly used Full first names of two or more partners (c) Fullsurnamesoftwoormorepartners (b) (a) Combinationof(a)and(b)above,inanyorder (d) Initials of the first name and/or middle name and/or surname, in whichever order (c) (b) a Name comprising first name and/or middle name and/or surname of the member, in any order, with or without commonly (a) 236th meetingof theCouncilheldon29-30thMarch, 2016 in thisregard. trade/firm and at its own risk and costs and not of the ICSI. The ICSI shall not be any party to any kind of dispute that may arise profession andinrelationtothename indispute.Theresponsibilityandliabilitysuchcasesshallsolely beoftheconcerned arises affecting to Intellectual Property Rights between any trade/firm with any other brand, entity, business etc., outside the to Regulation170. “family” for this purpose means husband, wife, father, mother, son and daughter. An affidavit or other evidence to the satisfaction the namesofhis/herfamilymembersprovidedthatsuchnamewasnot alreadyregisteredbysomeothermembers.Theterms to get approval of firm/trade name in accordance with the same, he may be permitted to adopt or coin a firm/trade name out of not able is the member been exhaustedand have guidelines 2(i)and(ii) After variouspermutationsandcombinationsunder said trade/firm may be allowed to any member or members who are eligible for allotment of such name under the guidelines. of theSecretaryistobeproducedinsuchcases. entered in the Register of office of firms. in practice or which resembles the name of Company Secretary in practice or firm of such Company Secretaries and has been any modification/re-enactment thereof. of the closer of the firm. In the event of removal of name of a practising member, after the expiry of the period of three years, the be consideredundesirablebytheCouncilshallnotallowed. the firm. full first name/full middle name/full surname of the partners. to be used either in between the full first names and/or full middle names and/or full surnames of the partners or before the last and/or fullmiddlenamessurnamesofthepartnersareused.Also,insuchcases,word“&”/”and”iscompulsorily of three years of the closure of firm. The name may be re-allotted to the same member or members’ upto a period of three years Associates”. Chartered Accountant, Cost Accountant, Chartered Secretary etc., use, therefore,ofCA,CS,CMA, MBA, CACMA, CACS, CSCA, CSCMA, CMACS,CMACA,Secretary,Accountant,Management, acronyms orfullformsofanyprofessionwhetherusedindividuallyand/orcollectivelyinorder,shallnotbeallowed.The the registerofmembers. The name,middlenameandsurnameofthemembershallconformto thename,middlenameandsurnameastheyappearin with thegroupname/themeshallbeallowed,ifsameisnotincontradiction withanyothercriteria. use byanyofthepartnerorindividualcouldbeapprovedprovidedthere isnoobjectionbyanyofthepartnersorindividual. Revised GuidelinesfornameofaProprietorshipconcern/FirmTrade suffix or prefix above Parts of orprevalentabbreviationsacronyms of commonly used names alongwith any combination referredtoin(c) used suffix or prefix I JANUARY 2017 of theCompanySecretariesRegulations,1982. ATTENTION MEMBERS provisions of The Names and Emblems (Prevention of Improper Use) Act, 1950 or shall not be allowed.However, trade/firm names matching pursuant 125

NEWS FROM THE INSTITUTE NEWS FROM THE INSTITUTE AURANGABAD-431001 (SHREERAM APARTMENT), AJABNAGAR, C/O NIWARACONSULTANTS, SHIPRONTOWERS LEENA CHITTI BADLAPUR (WEST)-421503 04, DEEPSAGARSOCIETY,SARVODAYA NAGAR KINJAL KOTAKRAJNIKANT PUNE-411037 FLAT NO.6,KUSHANKUNJAPT,BIBREWADI,KONDWAROAD KHUSHBOO BHARATPATWA PUNE-411009 KOLKATA-700072 P-41 PRINCEPSTREET,ROOMNO.222,2NDFLOOR KHUSBU AGRAWAL PARVATI, 321, PATILPLAZA,SARASBAG-MITRAMANDALROAD HRUSHIKESH AUDUMBARTABE 32-117, PRATAPNAGAR,SANGANER,JAIPUR HARSHITA SAXENA VIDYARANYAPURAM MYSORE-57008 # 1063/71-A,F-3A,2NDMAIN,8THCROSS, SETTY VIKRAMRAJ GUNDARLAHALLI ASWATHANARAYANA H NO.08,VAGHASI,ANAND-388320 SURAJ ESTATENR.JKPARK,OPPANANDGINNINGMILL,N DHRUVKUMAR BHARATKUMARPATEL NEWDELHI-110071 DAIRY PLOT NO.31,BLOCKE,PHASE-1,QUTUBVIHAR,GOYLA DHANANJAY JITESHPANDEY SURYA NAGAR,GHAZIABAD-201011 OFFICE NO.84,FIRSTFLOOR,AMRITPLAZACOMPLEX, DASVINDER KAURCHAWLA 26/15 2NDFLOOR,SHAKTINAGAR,DELHI-110007 AYUSH GUPTA MARIYAMMAN KOVI.SULTHANPET,PALAKKADDISTT-678001 2ND FLOOR,LAKSHMITOWERS,PPORAVINGAL ANUSHA RAMAKRISHNAN EUREKA HOSPITAL,INDORE-452001 302 CITIZENAPARTMENT,276,SAKETNAGAR,NEAR ANKIT MEDATWAL KOLKATA-700058 27, BTROAD,PRASADNAGAR,BLOCKA/6,FLATNO.202, AMRITA SINGH JAIPUR-302001 L-5-B, SHUKLABHAWAN,KRISHNAMARG,C-SCHEME, OPPMATIGANAPATI,PUNE-411030 AKSHITA ANAND PETH FLAT NO.104,PATWARDHANGAD,545/46/47,NARAYAN AJINKYA PANDURANGBAGADE DELHI-110052 NAGAR, S.K. 1/20,SINDHORAKALAN,CHOWKINO.2,NEARSHAKTI ABHISHEK PATHAK F-2/151, SECTOR-11,ROHINI,NEWDELHI-110085 ABHIMANUEE RAJPUROHIT 126 Month ofNovember, 2016 Imparting Training DuringThe For ThePurposeof Members Registered List ofPractising HPIGCNE PARIMAL, UNDERBRIDGE,CG ROAD,PALDI, AHMEDABAD-380007 SHOPPING CENTER 9/D, 10THFLOOR,SUMERUCENTRE, NEARSUVIDHA SMIT ANADAJITANK DELHI-110092 S 560FIRSTFLOOR,SCHOOL BLOCK,SHKARPUR,NEW SIDDHARTH MITTAL 11THPALROAD,JODHPUR-342003 SARADARPURA, 48, KRISHNAKRIPA,OPP.SHAGUN,PALACE, SHEETAL JAIN KOTHRUD, PUNE-411038 8, JITENDRAGLADES,BEHINDMHATOBAMANDIR SHANTANU DATTATRAYAJAGTAP 306-C BLOCK,SILVERMALLR.N.T.MARG,INDORE-452001 SHAILESH KUMARJAIN FLOOR, SILIGURI-734001 PARNAMI MANDIRROAD,NATHUAPARKAPPARTMENT,3RD SAVITA KUMARIAGRAWAL KOCHI-682019 L2/25 JRWA,JUSTICELANE,MAJORROAD,VYTILLA, DHAYRI,PUNE-411041 SARATH SASIDHARA GATE FLAT NO:A303,EISHAERICASOCIETY,NEARDSKVISHWA SANDIP SUMTILALCHORDIYA NAJAFGARH, NEWDELHI-110043 H. 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NEWS FROM THE INSTITUTE NEWS FROM THE INSTITUTE 128 Benevolent Fund Company Secretaries * ENROLLEDDURING THEPERIOD20.11.2016TO19.12.2016 No. SL. EIRC 5 11751 15 11722 14 11711 13 11698 12 1 11697 11 0 11693 10 2 11563 1 11578 4 11577 3 11625 6 11588 5 11642 8 11629 7 11686 9 COMPANY SECRETARIES BENEVOLENT FUND* MEMBERS ENROLLED REGIONWISE AS LIFE MEMBERS OF THE NO. LM 150 H UISOA AATRYFCS-8022 SH.SUNILSHOVANSAMANTARAY 11570 MS. SWATISWAGATIKAPRATIHARI MR. NEWTONKUMARDHAR MR. NITESHSRIVASTAVA MS. SUJATASARKAR MS. SEEMAAGARWAL NAME SH. BISHNUDEOROY H AKMRSNHKSYPFCS-8588 SH. RAJKUMARSINGHKASHYAP MR. SACHINKUMAR H RA HKAOT FCS-8557 SH. ARNABCHAKRABORTY MR. RAHULVIJAY H AEDAKMRRIFCS-5879 SH. NARENDRAKUMARRAI MR. MANISHKUMARPASWAN MR. SUMITSAHGALMISHRA MR. RAHULKUMARMISHRA ACS -33591 ACS -36488 ACS -28621 ACS -39426 ACS -39670 ACS -18586 ACS -40097 ACS -47256 ACS -43552 ACS -46604 ACS -38492 MEMB. NO. SILCHAR PATNA KOLKATA CUTTACK PURI SAMBALPUR CITY PATNA BOKARO NAYAGARH JODHPUR HOOGHLY HOOGHLY HOOGHLY KOLKATA KOLKATA No. SL. NIRC 0 11561 20 11560 19 11556 18 8 11598 28 11597 27 11587 26 11586 25 11584 24 11582 23 11580 22 11565 21 7 11553 17 11552 16 1 11605 31 11603 30 11600 29 NO. LM SH. CBGUPTA MS. VIBHUAGARWAL MR. BHARATHASSANI NAME SH. MUKESHSOOD MR. GHANSHYAMKUMAR SH. NIKHILESHKUMARVERMA MS. RITASINGHAL MR. ANOOPKUMAWAT MR. NITINKUMAR MR. ANANDKHETAN MR. GAURAVMEHROTRA MS. PARULSHARMA MR. RAJATMISHRA MS. NEHAJAIN MR. SIDHARTHSHARMA SH. SANJEEBKUMARSUBUDHI JANUARY 2017 I CHARTERED SECRETARY ACS -17346 ACS -38724 ACS -30595 ACS -16306 ACS -41519 ACS -38831 ACS -45968 ACS -44345 ACS -42495 ACS -45431 ACS -47538 ACS -33386 ACS -36825 ACS -18791 FCS -2232 FCS -3625 MEMB. NO. DELHI AGRA GAUTAM BUDHNAGAR MOHALI NEW DELHI NEW DELHI NEW DELHI JAIPUR NEW DELHI GURGAON HARDOI LUDHIANA CITY LUDHIANA AGRA NEW DELHI NEW DELHI CHARTERED SECRETARY I JANUARY 2017 129 128 JANUARY 2017 I CHARTERED SECRETARY No. SL. SIRC 8 11559 78 11661 46 11657 45 11652 44 11650 43 11644 42 11641 41 6 11727 66 11726 65 11721 64 11716 63 11715 62 11714 61 11712 60 11710 59 11709 58 11707 57 11704 56 11690 55 11689 54 11684 53 11682 52 11678 51 11677 50 11669 49 11666 48 11662 47 3 11610 33 11609 32 7 11558 77 11557 76 11770 75 11766 74 11765 73 11758 72 11756 71 11742 70 11734 69 11731 68 11730 67 4 11611 34 6 11616 36 11613 35 0 11637 40 11636 39 11630 38 11628 37 NO. LM CHARTERED SECRETARY MR. MASIRRAJASELVAN NEWDELHI FCS-8719 SH. ATIUTTAMPRASADSINGH MR. SANDEEPSHARMA MR. AMANDEEPSINGH MS. DURGA MRS. PRAMILANYATI MS. PAYAL NAME SH. RUPENDERDHIMAN MR. ANSHULCHHABRA MR. RAHULMALHOTRA MR. DEEPAKKUMAR MR. PURUSHOTTAMPANDEY MS. RAMANDEEPKAUR MR. RAMANSAPRA MS. SAKSHIPHERWANI MR. DHIRENDERPRAKASH MR. BAGGASINGH MR. KULDEEPKUMAR MR. MINASKUMAR SH. MANOJKUMARPAREEK MR. ABHISHEKNAGAR MR. VIJAYKUMARSHARMA MR. GHAZALISHADAB MR. ARUNKUMAR MR. NITINSAMADHIYA MR. AMITKUMAR MS. HEMLATAGUPTA SH. SANJAYCHANDAK MS. SAKSHIMADAAN MR. VISHWASHEGDE MR. ARJUNR MR. AMBUJGUPTA MR. PRINCEMOHANSINHA MR. SANCHITSHARMA MR. AMITKUMARGUPTA SH. ROOPESHKUMAR MS. KOMALRINGAN MR. DEEPAKBEHL MR. ANOOPSABHARWAL MR. VIJAYKUMARNARERA SH. AMITKUMARJAIN H AEHKMRKUAAFCS-7293 SH. RAJESHKUMARKHURANA MS. SAKSHIGOEL MS. MONIKAAGRAWAL SH. ASHISHJAIN MR. ANKURGUPTA MS. NEHAGUPTA I JANUARY 2017 ACS -46402 ACS -31717 ACS -43902 ACS -48136 ACS -17631 ACS -45436 ACS -37155 ACS -39518 ACS -23673 ACS -37332 ACS -42607 ACS -29044 ACS -47808 ACS -34543 ACS -31048 ACS -35084 ACS -30988 ACS -24857 ACS -23085 ACS -32547 ACS -41153 ACS -46918 ACS -45463 ACS -36223 ACS -34582 ACS -48326 ACS -41955 ACS -47671 ACS -39108 ACS -38693 ACS -48813 ACS -34243 ACS -15283 ACS -22120 ACS -40924 ACS -42915 ACS -33505 ACS -39209 ACS -31258 ACS -17569 ACS -37030 ACS -47714 FCS -6937 FCS -5065 FCS -5433 MEMB. NO. CHENNAI BAHADURGARH MOHALI NEW DELHI UDAIPUR DELHI UTTARA KANNADA GAUTAM BUDHNAGAR HAPUR NEW DELHI NEW DELHI NEW DELHI NOIDA KANPUR NEW DELHI FARIDABAD JIND DISTT GHAZIABAD DELHI NEW DELHI DELHI LUCKNOW KANGRA BHARATPUR NEW DELHI LUCKNOW SOHNA CITY KOTTAYAM BAREILLY DELHI NEW DELHI PANIPAT BHIWANI AGRA FARIDABAD NEW DELHI JHUNJHUNU DELHI DELHI BAREILLY GURGAON GURGAON BAREILLY NEW DELHI DELHI No. SL. 1 11679 112 11676 111 11674 110 11673 109 11671 108 2 11728 126 11720 125 11718 124 11713 123 11708 122 11706 121 11702 120 11696 119 11694 118 11688 117 11687 116 11683 115 11681 114 11680 113 11665 106 11658 103 11656 102 11649 101 11648 100 0 11668 107 11663 105 11659 104 9 11646 99 11645 98 11638 97 6 11635 96 11633 95 11631 94 3 11624 93 11623 92 11622 91 11619 90 11608 89 11606 88 11599 87 11590 86 11579 85 11575 84 11574 83 11573 82 11567 81 11566 80 11564 79 NO. LM MS. GINNISINGHAL SH. SRIKANTHREDDYKOLLI MS. LAXMISOWJANYAALLA MR. THADIPRAKUL MR. SANTHANAGOPALANJAYARAMAN SH. ANANTHRANGANATHAKESHAV MR. MARATHSURESHBABUAMAL MR. SRAMASUBRAMANIAN MR. PRABHUG SH. VIJAYAKUMARTHANAPATHY MS. SHILPAHR MS. RATNAMALAHEGDE MR. DANISHPUTHIYAPURAYIL MR. BVISWANATH MS. PAYALMEHTA MS. SAMAYAMANTULASAROJINI MS. CHITRARANIMS MS. SWETHAV MR. MUHAMMEDRIYASAT MR. GEORGEMATHEW MS. MEGHANAHASSANYOGARAJ MR. ALOK MS. ASATYADEVI MR. GAURAVDUTTTRIVEDI MS. RANJANIM MR. NAGARAJMO DR. LAKSHMIMANEAN MS. VEENAUMASHANKARIYER MR. ILLANAVEENSEKHAR MR. KANNAPIRANR MS. SANGEETHAST NAME MR. DEEPAKMJ MR. PRABHAKARTIWARI MR. RAMUKONDARU MS. SABARIGIRISHH MR. SAJEEVS MR. ABHILASHUNNIKRISHNAN MR. RAMESHM MR. KORATTIKKATILDEEPAK MR. SHOBANBABUB MR. K.SENTHILKUMAR MR. SANTHOSHG MR. SUDHARMANMS MS. SARANYAG MS. NAGAVASUDHATADEPALLI MR. KUMARN MR. PRADEEPKUMARNATH MR. VANANTHASUBRAMANIAN ACS -32254 ACS -25290 ACS -44779 ACS -46477 ACS -43794 ACS -37565 ACS -16567 ACS -29469 ACS -31365 ACS -36552 ACS -30700 ACS -44881 ACS -46252 ACS -41394 ACS -41011 ACS -47675 ACS -31948 ACS -41193 ACS -47285 ACS -24390 ACS -44305 ACS -41328 ACS -34768 ACS -46426 ACS -26839 ACS -47896 ACS -45743 ACS -40490 ACS -32120 ACS -36424 ACS -32733 ACS -37917 ACS -36021 ACS -37649 ACS -33395 ACS -47496 ACS -45823 ACS -47282 ACS -47459 ACS -47339 ACS -37863 ACS -37469 ACS -23711 ACS -46403 ACS -40148 ACS -29770 FCS -8927 FCS -2701 MEMB. NO. 129 BANGALORE HYDERABAD GUNTUR HYDERABAD MADURAI CHENNAI CHENNAI BANGALORE BANGALORE ERNAKULAM COIMBATORE THRISSUR KHAMMAM BANGALORE BANGALORE KOLLAM KOZHIKODE BANGALORE CHENNAI BANGALORE HYDERABAD KOLAR BANGALORE CHENNAI CHENNAI HYDERABAD THRISSUR CHENNAI MADURAI PRAKASAM DISTT THIRUVANANTHAPURAM BANGALORE MYSORE CHENNAI PALAKKAD PALAKKAD MYSORE HYDERBAD THRISSUR CHENNAI SALEM PALAKKAD THRISSUR SALEM HYDERABAD CHENNAI BHADRAK MADURAI CITY

NEWS FROM THE INSTITUTE SL. LM NAME MEMB. CITY SL. LM NAME MEMB. CITY No. NO. NO. No. NO. NO. 127 11729 MR. MOHAN REDDY ACS - 45070 BANGALORE 173 11639 MR. MOHAMMAD FAKRUDDIN PILLIKANDLU ACS - 39232 MUMBAI 128 11733 MR. ABHIJITH C ACS - 28305 BANGALORE 174 11640 MS. SONIA RADHA GUPTE ACS - 43003 THANE 129 11743 MR. GANAPATHI GHATTI ACS - 42323 BANGALORE 175 11643 SH. R D GORADIA FCS - 1120 MUMBAI 130 11744 MR. GOWRISHANKAR S ACS - 43151 COIMBATORE 176 11647 MR. KULDIPSINH JAYENDRASINH ZALA ACS - 47574 AHMMEDABAD 131 11749 MR. VENKATA NARESH G ACS - 47898 SECUNDERABAD 177 11651 MR. AMIT RAMESH BHAI KATHORE ACS - 41609 BHARUCH DISTT 132 11754 MR. SRIRAM S ACS - 33810 BANGALORE 178 11653 MR. AMEET ASHOK RATHI ACS - 44786 AURANGABAD 133 11757 SH. VENKATA RAMA KRISHNA DEVARSETTI ACS - 22926 RAMANAGAR DISTT 179 11654 MR. MANDAR GANESHRAO TAKALKAR ACS - 32369 AURANGABAD 134 11759 MR. YASHVNTH V ACS - 40072 CHENNAI 180 11655 MR. NIMISH CHUNIBHAI SAKHIYA ACS - 35847 RAJKOT 135 11760 MR. 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DIPTIBEN CHIRAG KHANDHAR ACS - 31037 AHMEDABAD 153 11592 MS. PRIYA SURESH NAGMOTI ACS - 19132 DOMBIVLI 200 11725 MR. HARSHAL ARUN LAHAMGE ACS - 36695 AHMEDNAGAR 154 11593 SH. VIJAY BABAJI KONDALKAR ACS - 15697 MUMBAI 201 11732 SH. BIPINKUMAR L MAKWANA ACS - 15650 AHMEDABAD 155 11594 SH. MINENDER POSHETTY BOGA ACS - 25528 THANE DISTT 202 11735 MR. DHAWAL CHHAGANLAL GADDA FCS - 8955 MUMBAI 156 11595 MR. VINOD VIJAY KOYANDE ACS - 33696 MUMBAI 203 11736 MR. PARESH VALLABH BHAI RAIYANI ACS - 42691 SURAT 157 11596 SH. VIJAYKUMAR BABULAL PATEL FCS - 7871 AHMEDABAD 204 11737 MR. VINOD KANUBHAI RANA ACS - 47963 AHMEDABAD 158 11601 MR. UMESH MANSUKHBHAI BHIMANI ACS - 38271 AMRELI 205 11738 MR. DHANRAJ KRISHNA SALIYAN ACS - 34837 MUMBAI 159 11602 MS. HETAL BHANSALI ACS - 40324 RAIPUR 206 11739 MR. SANJAY UTTAMRAO PATARE ACS - 33075 PUNE 160 11604 MR. RANPURA RAVI PRAKASHBHAI ACS - 45842 DHANDHUKA 207 11740 MR. SHAILENDRA PATHAK ACS - 27386 THANE 161 11607 MR. KAMAL KISHORE LAHOTY ACS - 30434 MUMBAI 208 11741 MS. APARNA CHETAN DAGLI ACS - 48781 MUMBAI 162 11612 SH. PANDY VIJAYARAGHAVANVEERA RAGHAVAN ACS - 17313 PUNE 209 11745 SH. SHRI RAM MOTILAL GAUD FCS - 6932 MUMBAI 163 11614 MR. ROHAN SUBHASH ANAND ACS - 47998 AHMEDABAD 210 11746 MS. HETANSHI HEMANTKUMAR SHAH ACS - 43510 AHMEDABAD 164 11615 SH PARVESH DHAWAN FCS - 8863 BHOPAL 211 11747 MS. NISHA DWIVEDI ACS - 37739 NAGPUR 165 11617 MR. HEMESH GARG ACS - 34348 DHAR 212 11748 MR. MANISH TOLAMBIYA ACS - 37101 INDORE DISTT 166 11618 MR. KETAN HARILAL BAMBHANIYA ACS - 44886 ANJAR KUTCH 213 11750 MR. SANJIV VIJAY NAIDU ACS - 44728 BHOPAL 167 11620 MS. PURVEE DINESHCHANDRA ROY FCS - 8978 VADODARA 214 11752 MS. VAISHALI SURENDRA BHAT ACS - 38812 NASHIK 168 11621 SH. MAULIK BHARAT KUMAR GANDHI FCS - 8819 RAJKOT 215 11753 MR. SAURABH VISHWAS KARMASE ACS - 41701 NASHIK 169 11626 MR. TEJAS SUDHAKAR TUNGARE ACS - 33430 THANE 216 11755 SH. PRADEEP SHEKARA SALIAN ACS - 18480 MUMBAI 170 11627 MR. MUKESHKUMAR SOHANRAM CHAUDHARY ACS - 41625 217 11763 MS. DIPTI ABHAY MARATHE ACS - 35902 PUNE 171 11632 SH. MAHESH DEVJANI FCS - 2711 PANAJI 218 11764 MR. KUSH JAYALSINGH PRADHAN ACS - 48255 CHAMPA 172 11634 MR. TAPAN KUMAR PADHY ACS - 35857 MUMBAI 219 11769 MRS. SATI MUKUND ACS - 16162 PUNE

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NEWS FROM THE INSTITUTE & REGIONS NEWS FROM THE INSTITUTE & REGIONS PUNE CHAPTER WESTERN INDIA REGIONAL COUNCIL BENGALURU CHAPTER SOUTHERN INDIA REGIONAL COUNCIL 132 at HotelDeccanPlaza,Chennai Secretarial Auditon16.12.2016 ICSI-NSE JointWorkshopon SIRC House,Chennai 10-11, December2016atICSI- CCGRT withICSI-SIRCon 2016 organizedjointlybyICSI- and impactofAmendmentBill Decoding unsolvedMysteries Companies Act,2013– Research SymposiumonThe Programme Laws” Important UpdatesinSecurities Companies Act,2013&Recent Noteworthy RecentRulingsin Study CircleMeetingon“ Corporate GovernanceinIndia.” Full DayProgramon“CSRAnd MCA, ICSIPuneAndIcaiPune. Social Responsibility(Csr)”By Joint Seminaron“Corporate Series ofFourWorkshops) - II”(FourthWorkshopAmonga Aspects ofCompaniesAct,2013 Refresher CourseonCritical Workshop on“Knowledge Series ofFourWorkshops) - II”(ThirdWorkshopAmonga Aspects ofCompaniesAct,2013 Refresher CourseonCritical Workshop on“Knowledge Programme Members Study CircleMeetingfor 12.12.2016 Students andPressheldon Interaction withMembers, Chapter byPresident,ICSIand Centre atTheICSI-Bengaluru Inauguration ofCSAcceleration Programme

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CHARTERED SECRETARY I JANUARY 2017 133 SUSTAINING RESPECT THROUGH SPIRITUALITY Contributed by Brahma Kumaris, Om Shanti Retreat Centre, Gurugram f all the human values that sustain the society or state of being- our thoughts, actions and personality traits O any system, RESPECT is considered to be the put together, and not the physical entity, it automatically most basic one. It is considered to be the way to imbibe fosters a feeling of being beyond the effect of good and others ethics easily. The seeds of respect are sown into bad, praise or defamation governed by or as a result of every individual since the early years. It is observed that the physical entity. We understand more deeply what is in any household, children are taught to greet elders with our original worth and that anything external or anything gestures of respect and the language taught to them is materialistic can affect only the physical and not the that of honor and respect towards others. Whether it is spiritual entity, unless we ourselves allow it to impact that “ladies first”, “pehle aap”, “haanji”, “shukriya”, “thank deep- core- immortal- spiritual- consciousness. you”, etc the code of conduct of respect is reflected in every civilized gentry. In India, which is considered as When I appreciate the existence, the qualities and the world’s spiritual guru, the rich culture and heritage worth of the spiritual side of my being, I also start reflects respect for every individual. Any guest is equated appreciating the same for others around me. This induces to deity by the feeling of ‘atithi Devo bhav’. Parents are a feeling of humility in the self. Each river crosses so many considered next to God, particularly mothers. A girl child obstacles and travels such a long way just to merge in the born in a family or a new bride in household is considered ocean only because the ocean is humble and respects the to be ‘Lakshmi’ (the goddess of wealth and fortune). It is river. Similarly a person with humility attracts the love and taught that every woman should be considered as your respect of others. Hence to give respect is to take respect. sister or mother, out of respect. The nation is also equated to a mother and ‘Vande Matram’ is sung in its If I come back home on a sunny- hot afternoon and praise. Be it ‘Mother-land’ or ‘Mother-tongue’ it depicts expect someone to offer me a glass of water for instant the feelings of respect towards the seen or the unseen, relief from the effect of the heat outside, I also understand tangible or non-tangible entities. More-so, the names of that it is completely fine if others expect the same from most of the rivers are feminine and they are considered me. Thus, I automatically understand the needs of others to be sacred. All the elements of nature are worshipped and it would be easy for me to develop a sense of respect as gods and goddess. Like the elements of fire, earth, for them as well and treat them the way we would want to ETHICS & SUSTAINABILITY CORNER & SUSTAINABILITY ETHICS water, air, mountains, trees, sun, moon, stars, be treated. constellations are considered as gods and goddesses. Not just the Indian civilization, but other civilizations or • Respect is like Sunshine cultures also have a rich heritage of equating various As the rays of the Sun transform darkness into light and forces of nature with gods and goddesses. help us see the true colors of an object, respect helps us look at the true state of the being of every individual and However, while the above mentioned facts arouse the we get exposed to their brighter side (they may have a feelings of pride, somewhere we are not convinced by dark side as well, of which I am fully aware; but I am not them as what one observes in practice is different than influenced by that) and I give them the respect that they this. Thus it makes us wonder, what could be the main deserve. Also, the rays of the Sun have the capability to reason for lack of respect among individuals, as what is kill germs. Similarly, when we start respecting others, we heard and spoken differs from what we see and observe tend to dissolve disputes and remove the germs of ill- being practised around us. To understand this gap and feeling for others resulting in initiation of better karmic ways to bridge it, lets first look at the meaning and accounts with that person, in other words, settling previous manifestations of respect more deeply and holistically. negative karmic accounts. Gradually, as I mend up the karmic account with that individual, a spiritual entity, it is • Self Respect- The seed to cultivate reciprocated in the same way (depending upon how much Respect for Others I need to settle the karmic accounts from my end). Self respect is the virtue or the feeling of self worth, which includes valuing one’s belief system, one’s strengths, • To Respect others is to admire their acknowledging and accepting one’s limitations without qualities feeling defeated and with a vision to overcome those. As It is true that if I start respecting an individual, I start noticing per the ancient spiritual wisdom of the India, we are more of their qualities. However, the corollary to this is also aware that every individual is a combination of physical true: When I start noticing the strengths and qualities of an and spiritual entities that have a symbiotic relationship individual, I generate a feeling of respect of them. with each other. The spiritual entity makes the physical entity (body and its systems) work but it itself cannot Respect can also be understood as a deep feeling of function without the medium of the body. When we admiration for someone’s qualities, abilities or understand that it is the spiritual entity that defines our achievements. So let’s think of all those abilities that we

134 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 135 actually admire in an individual we respect (could be specific to different persons as well). Now, give yourself a I appreciate the fact that no two individuals or actors on moment to think: Is this ability or quality limited to only that this planet can have the same role, as each one us is person, or do I know someone else who has that or a unique. Each of us has had a unique and different journey similar quality? If yes, do I respect them in the same over many lives. When I am are not fully aware of even manner? If no, then it is most likely that I don’t have equal my journey so far, how can I expect others to be aware of respect for them due to some of their weakness that rules the same and moreover, how can I be aware of what their my mind. So when I fail to demonstrate respect for journey has been like? What I take currently as right for someone, it is actually because my mind is clouded by me is according to my experiences accumulated during their weakness or some negativity. Thus, to start respecting my journey. The same stands true for others. Thus, we people, start noticing their strengths and qualities. must appreciate that what is right for me could be the other way round for someone else. So, the definition of • Respecting others generates Equality ‘right’ and ‘wrong’ is unique to each one of us. Hence, I know that each one of us has a specific role in this big when we say “you are wrong” in other words, we mean to picture- the world drama. If we think about someone we convey “your right is not aligned to my definition of right respect, we would realize that it is not the role in itself but (as my journey and the experiences during that journey how that person uses those qualities in their role, is what have been different than yours), so I take it as wrong”. we admire; i.e. it is actually a regard for their abilities or This helps me to understand that I need not expect others qualities. So each individual is playing their part. A direct to have the same belief systems, the same choices and result of understanding the worth of the spiritual entity and the same definition of right as mine and neither can I demonstrating the ability to distinguish the spiritual entity to change them according to me but I can rather enjoy the be separate from the role one plays is that it also dissolves diversity of characters in this beautiful bouquet of world. the difference in the way we treat different individuals. If a It’s when I start the chain reaction of acceptance, others movie has an actor, it also has a villain. Both the actors, follow me and the reaction propagates. even though having opposite characters, are respected as individuals; despite their roles being so different; as the An ocean accepts the water of all rivers and even the spiritual entity is eternal while the role is subject to change. debris coming along with the river without any We appreciate that the role is not of the prime importance, discrimination and prejudice. The water of the river but it is the individual playing that role- which is of a greater assimilates with the ocean’s water while the ocean waves worth. So we value and accept the rich- the poor, the leave the debris at the shore. Moreover, the surface of the ETHICS & SUSTAINABILITY CORNER & SUSTAINABILITY ETHICS blacks- the whites, the elders- the peers- the subordinates, ocean has waves but the ocean bed is still and full of every individual in the family- neighborhood- workplace, jewels. Similarly, each individual is a bundle of strengths also the strangers, people of all backgrounds, nationalities, and weaknesses. To look at other’s weaknesses or gender, caste or creed and start developing the same strengths is to make them your own. If we reject the feeling of respect for each one of them. person looking at their weakness, we are also deprived of their strengths or qualities. Thus if we become like an • To Respect is to Listen ocean, accepting everyone around us, leaving the One of the best ways to show respect for someone is to negativities at the shore and assimilating their qualities in truly listen to another’s point of view. It prevents me to me, I can remain stable, peaceful and powerful within. become judgmental or establishing prejudices for someone. Listening enables us to covey “I understand • To Respect is to demonstrate what you say/ mean and I care for your feelings”. Obedience Sometimes, to be heard is the biggest satisfaction one Obedience is a demonstration of respect. Whether it is needs. We should allow others to express their views abiding by the laws of the society, or organizational values freely. While listening, we should feel as a ‘child’ who is or guidelines, or following the advice or ethical principles keen to know and doesn’t color the perception about the laid by the elders- obedience towards them is taken as other person on the basis of what they express, even regard for the person or body in concern of those though we may or may not agree with the same. When it principles or laws. In order words, to respect others is to comes to taking decision, we have our own right to be the show faith in their judgment and to be committed to it. ‘master’ and go by what we feel is right. • Respect- it freely flows… • Respecting others demonstrates It is not just the individuals that ought to be respected, but Acceptance everything tangible and intangible around us. Be it time, Respecting others also means to respect their ideas and money, resources, rules, disciplines, nature, environment beliefs even if they are not the same as mine. It is to start etc, everything deserves respect. Hence, respect is accepting their feelings, their decisions, their space & intrinsic trait and subjective rather than dependent on the privacy, their belongings, their limits etc and this brings us object. If we experience a high level of self- respect in harmony to people around me. In fact respecting others ourselves, it simply overflows and it is easy to extend and means to celebrate diversity. sustain the feeling to others.

134 JANUARY 2017 I CHARTERED SECRETARY CHARTERED SECRETARY I JANUARY 2017 135 GST CORNER GST UPDATES • In run-up to GST, Budget to see cleanup of Import Sops GST Council • Traders can get enrolled under GST provisions at Government 1. The Fifth GST Council Meet, held on December 2-3, 2016 had camps discussion on revised draft legislation but remained inconclusive • Telangana likely to complete Data migration to GST by January and the Council was unable to iron out the dual control issues. • GST could trip ‘Make in India’ for smart phones 2. The Sixth GST Council Meeting was held on December 11, • Tally announces launch of GST Mobile Application 2016 in which discussions were made upto Section 99 of the • Workshop for traders ahead of GST rollout

GST CORNER model GST law but was again unsuccessful in resolving the • Migration of traders to GST sluggish contentious issue of dual control of assessees. Most of the time • Airlines may have to bear Additional tax burden of Rs.15000 was taken up in discussion of Draft GST Bills i.e., Central GST, crore under GST Inter State GST and Compensation Law. • GST Council approves primary drafts of Central GST and State 3. The Seventh GST Council Meeting held on December 22-23, GST Laws 2016 finalized the following: • About 75 per cent of targeted 60,000 officers trained for GST u In CGST and SGST Laws, a total of 197 provisions and five • 15 day slot given to Andhra Pradesh dealers to register schedules, were approved • States won’t go back on Auto Tax Sops Post GST u The Compensation Law was cleared and mentions that the RETURNS UNDER GST Centre would compensate states for five years, if they incur List of GST Returns/Statements to be furnished by Registered losses post the implementation of GST Persons is as follows: u The revenue growth rate that would be considered to arrive Form Description at the compensation amount would be 14 percent, and the GSTR-1 Details of outward supplies of taxable goods and/ base year would be kept as 2015-16 or services effected u The compensation to the states for the loss of revenue, if GSTR-1A Details of outward supplies as added, corrected or any, from the rollout of GST would be paid on bimonthly deleted by the recipient basis. GSTR-2 Details of inward supplies of taxable goods and/or services claiming input tax credit u Few issues are left to be settled in the Compensation Law— GSTR-2A Details of inward supplies made available to the such as the source of the compensation fund — but the law recipient on the basis of FORM GSTR-1 furnished will be placed for approval, along with the CGST and SGST by the supplier laws, after legal vetting in the next meeting. GSTR-3 Monthly return on the basis of finalization of details 4. The Eight meeting will be held on January 3-4, 2017 to discuss of outward supplies and inward supplies along with the payment of amount of tax the issue of cross empowerment, the main issue eluding GSTR-3A Notice to a registered taxable person who fails to consensus, and finalizing other remaining issues. furnish return under section 27 and section 31 GSTR-4 Quarterly Return for compounding Taxable OTHER GST UPDATES persons 1. SAP has aggressively promoted its data platform called SAP GSTR-4A Details of inward supplies made available to the HANA, which is fully GST ready. It has partnered with local recipient registered under composition scheme on the basis of FORM data centre provider called CtrlS to offer services to corporate GSTR-1 furnished by the supplier as well as Governments. GSTR-5 Return for Non-Resident foreign taxable person 2. GSTN is organising workshops across the country, according GSTR-6 Input Service Distributor Return to the schedule for rollout of GST, wherein states have been GSTR-6A Details of inward supplies made available to the clubbed under different categories and is assisting in the ISD recipient on the basis of FORM GSTR-1 migration process from VAT to GST. furnished by the supplier 3. Despite Puducherry being the first State in the country to GSTR-7 Return for authorities deducting tax at source launch the GSTN portal, the migration of traders and merchants GSTR-7A TDS Certificate registered under various State and Central tax regimes to the GST-ITC-1 Communication of acceptance, discrepancy or duplication of input tax credit claim GST is in progress. GSTR-8 Details of supplies effected through e-commerce 4. National Academy of Customs, Excise and Narcotics (NACEN) operator and the amount of tax collected as has already trained about three-fourth of the targeted 60,000 required under sub-section (1) of section 43C field officials who would be instrumental in implementing the GSTR-9 Annual return new indirect tax regime. GSTR-9A Simplified Annual return by Compounding taxable persons registered under section 8 5. Final list of GST Suvidha providers has been released. GSTR-9B Reconciliation Statement GST IN NEWS GSTR-10 Final return • Finance Ministry hopeful of GST Roll-Out on April 1,2017 GSTR-11 Details of inward supplies to be furnished by a person having UIN

136 JANUARY 2017 I CHARTERED SECRETARY December 2016. The Code applies to any financial year starting on . all companies whose registered offices are in the Netherlands i. The Codeappliesto: and theirintegrationintosociety. or after 1 January 2017. The Code was first adopted in 2003 and was reflect best practices and supplement the general principles of good board members,supervisorymembersandshareholders.They These provisionscontainstandardsfortheconductofmanagement have beensupplementedintheformofbestpracticeprovisions. widely reflecting as held generalviewsongoodcorporategovernance.Theprinciples regarded be may principles The stakeholders. shareholders (includingthegeneralmeetingofshareholders)and management andsupervision,remuneration and therelationshipwith defining at responsibilities forlong-termvaluecreation,riskcontrol,effective aimed are provisions and principles The shareholders). board andtheshareholders(includinggeneralmeetingof supervisory management board,the regulate relationsbetweenthe The Codecontainsprinciplesandbestpracticeprovisionsthat Supervision Act. is notamanagerwithinthemeaningofSection1:1Financial in the investment intransferablesecuritiesthat undertaking forcollective are The Codedoesnotapplytoaninvestmentcompanyor offices registered whose companies large all ii. confidence in the good and responsible management of companies meeting ofshareholders).CompliancewiththeCodecontributesto the supervisoryboardandshareholders(includinggeneral to thatend,regulaterelationsbetweenthemanagementboard, system ofchecksandbalanceswithinDutchlistedcompaniesand, relation tootherlawsandregulations–asoundtransparent management. ThepurposeoftheCodeistofacilitate–withorin Governance Codeprovidesguidanceforeffectivecooperationand Focusing onthegovernanceoflistedcompanies,DutchCorporate by theCorporateGovernanceCodeMonitoringCommittee. Industry andEmployers(VNO-NCW),theCodehasbeenamended Issuing Companies(VEUO)andtheConfederationofNetherlands Association ofStockholders(VEB),theSecurities- the FederationofDutchTradeUnions(FNV),EuronextNV, of ChristianTradeUnionsintheNetherlands(CNV),Eumedion, amended oncein2008.AttherequestofNationalFederation between thecompanyandits employees(representatives)are explained below under ‘Compliance with the Code’ The relationship that theygivereasonsfordoingso.Theconditionsdepartures are Companies maydepartfromthesebestpracticeprovisions,provided corporate governance. T trading onamultilateralfacilityorcomparablesystem. shares, ordepositaryreceiptsforhavebeenadmittedto Netherlands (balancesheet value >€500million) and whose system; and admitted totradingonaregulatedmarketorcomparable and whoseshares,ordepositaryreceiptsforhavebeen has publishedthenewCorporateGovernanceCodeon8th he MonitoringCommitteeCorporateGovernanceCode CHARTERED SECRETARY Netherlands: NewDutchCorporate Developments –December2016 Governance Code I JANUARY 2017 CORPORATE GOVERNANCE CORNER from originalsources. collated fromdifferentsources.Readers areadvisedtocrosscheck pdf. http://www.sebi.gov.in/cms/sebi_data/attachdocs/1483607537807. at- order toguidelistedentities.ThedetailedGuidanceNoteisavailable etc. andbasedontheanalysis,guidancenotehasbeenissued in practices, internalversusexternalevaluation,disclosurerequirements practices invariousjurisdictionslikeregulatoryrequirements,best listed entitiesinIndia.Italsoconductedananalysisoftheglobal SEBI hasstudiedthepracticesofBoardevaluationprevalentamong on 5thJan2017. stakeholders, SEBIhasissuedGuidanceNoteonboardEvaluation h cnet udr Croae oenne onr hv been have Corner’ Governance ‘Corporate under contents The Disclaimer: performance as well as corporate governance standards involved intheboardevaluationprocessandimprovetheiroverall the listedentitiesandtheirboardsofdirectorsaboutvariousaspects provisions onBoardEvaluation.Withthepurposetoeducate/guide Disclosure Requirements)Regulations,2015containbroad The CompaniesAct,2013andSEBI(ListingObligations Guidance NoteonBoardEvaluationreleasedbySEBI,India http://www.commissiecorporategovernance.nl/download/?id=3367 The Dutchcorporategovernancecodeisavailableatthelink- +Governance+Code+The+Changes+In+Detail http://www.mondaq.com/x/553482/Shareholders/New+Dutch+Corporate For detailspleasevisit- if aproperexplanationisgivenintheannualreport. eight yearsinthejob.Twoextensionsoftwowillbepermissible board membersmaynotbepaidinsharesandtheyarelimitedto The newcorporategovernancecodealsostatesthatsupervisory their position to other firms to show the pay gap is not unreasonable. too wide.Intherevisedcodecompanieswouldbefreetocompare the publish to firms requiring clause a include companies listed Qualityrequirementsfor“complyorexplain”statements governance codefor Amendments tothecurrentDutchcorporate Shareholdersandthegeneralmeeting 7. 6. Improvement and simplification of the remuneration provisions in 5. Ashiftoffocusineffectivemanagementandsupervision 4. Reinforcementofriskmanagement 3. Agreaterfocusonlong-termvaluecreation 2. 1. themes: The principalchangestothe2008Coderevolvearoundseven supervisory boardandtheemployeeparticipationbody. those provisionswhichrelatetocultureandthecontactbetween regulated bylaw.ThisrelationshipisaddressedintheCode parties will be able to flag up the issue if they feel the gulf is becoming publishing thesizeofpaygap,investorsandotherinterested size of the pay gap between senior staff and shop floor workers. By [email protected]) Joint Director,ICSI(banu. to Ms.Banu Dandona, page on this and suggestions may givetheirfeedback Readers the code Introduction ofcultureasanexplicitpartcorporategovernance Feedback &Suggestions to benefit all 137

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Going paperless with your board has never been easier

WISHING ALL

Organisations around the globe are experiencing the benefits CHARTERED SECRETARY of the Boardvantage board portal called MeetX. You can too. A HAPPY NEW YEAR

Go beyond boardbook access When it comes to eSigning consents, voting on resolutions, or filling out self-assessments, MeetX makes all board process paperless.

Cut cost, time and paper With MeetX, you no longer have to print, ship and track board materials, and no one has to lug them around.

boardvantage.com/hk

Request a free demo at boardvantage.com/demo Room 1204-8, 12/F, Man Yee Building 01 68 Des Voeux Road Central, Hong Kong Boardvantage is now a part of Nasdaq 852 2167 2578 | [email protected]