ICSI-AUGUST2012-12A.qxd 8/4/2012 1:03 PM Page 1 ICSI-AUGUST2012-12A.qxd 8/4/2012 1:03 PM Page 2 ICSI-AUGUST2012-12A.qxd 8/4/2012 1:03 PM Page 3 ISSN 0972-1983 08 CHARTERED SECRETARY R The Council [ Registered under Trade Marks Act, 1999 ] President Nesar Ahmad Vol. : XLII No. 8 Pp 961-1072 August - 2012 Vice President S. N. Ananthasubramanian From the Members Anil Murarka (in alphabetical order) 968 Ardhendu Sen President Arun Balakrishnan Ashok Kumar Pareek Atul Hasmukhrai Mehta Legal From the Atul Mittal 1002 1012 B. Narasimhan (LW-87-96) World (GN-165-184) Government Gopalakrishna Hegde 1032 News from the 1072 Our Harish Kumar Vaid Institute Members Pradeep Kumar Mittal Renuka Kumar (Ms.) ARTICLES ( A 309-337 ) Revathy Iyer (Ms.) Sanjay Grover Governance and Compliance through effective Sridharan R Employee Communication 972 Sudhir Babu C Shareholders' Rights and Illegitimate Use Thereof 977 U D Choubey (Dr.) Why Business Organisations are not suitable for Umesh Harjivandas Ved Foreign Contributions? 982 Vikas Yashwant Khare Trade Marks and Company Secretary in Practice 988 Secretary & Protecting your Innovations under Patent Laws 993 Chief Executive Officer N. K. Jain Legal Framework on Electronic Delivery of Services 998 Editorial Advisory Board Annual Subscription Chairman Justice D. R. Deshmukh Inland : Rs. 1000 (Rs. 500 for Students of the ICSI) Foreign : $100; £60 (surface mail) Single Copy : Rs. 100 Members Chartered Secretary is normally published in the first week of every (in alphabetical order) D.P. Dash month. Non-receipt of any issue should be notified within that month. Articles on subjects of interest to company secretaries are welcome. G.R. Bhatia Views expressed by contributors are their own and the Institute does Girish Ahuja (Dr.) not accept any responsibility. The Institute is not in any way Harish K. Vaid responsible for the result of any action taken on the basis of the advertisement published in the journal. All rights reserved. No part K S Chalapati Rao (Prof.) of the journal may be reproduced or copied in any form by any means Nawal Kishor (Prof.) without the written permission of the Institute. The write ups of this Om Prakash Dani issue are also available on the website of the Institute. Pavan Kumar Vijay Edited, Printed & Published by R.S. Nigam (Prof.) N. K. Jain for The Institute of Company Secretaries of India, Renu Budhiraja (Ms.) ICSI House , 22, Institutional Area, Lodi Road, New Delhi- 110 003. Sanjeev Kumar (Dr.) Phones : 41504444, 45341000, Grams : COMPSEC Fax : 91-11-24626727 T V Narayanaswamy E-Mail : [email protected] Vinod K. Singhania (Dr.) Website : http://www.icsi.edu Design & Printed at Editor & Publisher N. K. Jain M. P. Printers B-220, Phase II, Noida-201305 Consulting Editor V. Gopalan Gautam Budh Nagar, U. P. - India Legal Correspondent T. K. A. Padmanabhan August 961 CHARTERED SECRETARY 2012 ICSI-AUGUST2012-12A.qxd 8/4/2012 1:03 PM Page 4 IMAGES Signing of Memoranda of Understanding between ICSI - IICA and 01 ICAI(Cost Accountants) - IICA -- Standing from Left: Alka Kapoor, N K Jain, Nesar Ahmad, Rakesh Singh (President, Institute of Cost Accountants of India), Dr. M Veerappa Moily (Hon'ble Union Minister of Corporate Affairs) and Dr. Bhaskar Chatterjee (DG, IICA). Meeting of ICSI delegation with Hon'ble Union Minister of Corporate 02 Affairs to update Hon'ble Minister about goals of The ICSI - Standing from Left: Dr. M Veerappa Moily, N K Jain, Alka Kapoor and Nesar Ahmad. Meeting of ICSI delegation with Hon'ble Chief Minister of Delhi 03 about ICSI Corporate Governance Week - Sitting from Left: Sheila 01 Dikshit (Hon'ble Chief Minister of Delhi), Nesar Ahmad, N K Jain, Rajiv Bajaj and Alka Kapoor. Meeting of ICSI delegation with Hon'ble Minister of State for 04 Environment and Forests to apprise Hon'ble Minister about the activities of the Institute - Standing from Left: N K Jain, Nesar Ahmad, Jayanti Natarajan (Hon'ble Minister of State for Environment and Forests) and Alka Kapoor. Meeting of CSIA delegation with Ambassador, Permanent Mission of 05 India (PMI) at Geneva - Group Photo - Standing from Left: Vijay Kumar (Counsellor, WTO), Edith Shih (President, HKICS), Nesar Ahmad (President, CSIA and The ICSI), Jayant Dasgupta (Ambassador and Permanent Representative of India to the WTO), Anil Murarka (Past President, CSIA and The ICSI), April Chan (Past President, CSIA and HKICS) and Russell Morrice {Head of Secretariat, ICSA(UK)}. Meeting of CSIA delegation with Deputy Director General, WTO - 06 Group Photo - Standing from Left: Edith Shih, Nesar Ahmad, Harsha V Singh (Deputy Director General, WTO), April Chan, Phillip Baldwin 02 (Chief Executive, HKICS), Anil Murarka, Dale Honeck (Counsellor, WTO), Ruosi Zhang (Counsellor, TIS Division, WTO) and Russell Morrice. Deputy Director General, WTO interacting with Senior Officers of 07 the Institute - Sitting from Left: N K Jain, Harsha V Singh (DDG, WTO) and Nesar Ahmad. 08 A view of the meeting in progress. NIRC-ICSI - Inauguration of Cultural Evening on the occasion of 09 41st Foundation Day Celebrations of NIRC - Chief Guest Justice D R Deshmukh (Chairman, CLB) and Ms. Deshmukh seen with Nesar Ahmad, N.K. Jain, Harish K. Vaid, Rajiv Bajaj, M.G. Jindal, Shyam Agrawal, NPS Chawla, Regional Council Members, Chapters' Chairmen and others. NIRC-ICSI - Mid Term Review Meeting of Regional Council 10 Members with NIRC Chapters' Chairmen - Sitting from Left: 03 Ranjeet Pandey, Ashu Gupta, Deepak Kukreja, M G Jindal, Nesar Ahmad, Rajiv Bajaj, Shyam Agrawal, NPS Chawla, Manish Gupta, Vineet K. Chaudhary. Chapter representatives, T.R. Mehta & others also seen in the picture. SIRC-ICSI - 37th Regional Conference on CS - A Proactive Performer 11 - Release of Conference Souvenir - Standing from Left: N K Jain, C Sudhir Babu, N Raghuveera Reddy (Hon'ble Minister for Revenue, Government of Andhra Pradesh), Nesar Ahmad, A V Syamala, Nadendla Manohar (Hon'ble Speaker of Andhra Pradesh Legislative Assembly), Marthi S S, Shujath Bin Ali and Dr. Baiju Ramachandran. EIRC-ICSI - Full Day Seminar on Enhancing Value in Business - Role 12 of Company Secretaries - Chief Guest R.K. Agarwal (Managing Partner, E & Y) addressing. Others sitting on the dais from Left: Deepak Kr. Khaitan and Ranjeet Kanodia. August 04 2012 CHARTERED SECRETARY 962 ICSI-AUGUST2012-12A.qxd 8/4/2012 1:03 PM Page 5 05 06 07 08 09 10 12 11 August 963 CHARTERED SECRETARY 2012 ICSI-AUGUST2012-12A.qxd 8/4/2012 1:03 PM Page 6 At a Glance acceptance and utilisation of foreign contribution or foreign Articles (A 309 - 337) p- 972 hospitality by certain individuals or associations or companies and (2) to prohibit acceptance and utilisation of foreign Governance and Compliance through contribution or foreign hospitality for any activities detrimental to p- 972 effective Employee Communication the national interest. According to the Ministry of Home Affairs 'The general policy of the Government of India is not to Dr. Joffy George encourage soliciting of foreign contribution. If, however, it is overnance and compliance are never-ending processes. intended for bona fide welfare activities, foreign contribution can G The main reason for an organization to implement a be received either by obtaining registration or prior permission governance and compliance programme would be to meet the from the Central Government under FCRA'. Is the exclusion of requirements of a regulatory body or to mitigate the risks "business organizations' for the purpose of soliciting and associated with not having a formal programme in place. A accepting foreign contribution, justified, is the question which is significant problem in implementing such a programme is the probed in this article. ineffective communication of policies and procedures to employees. Corporate fraud is a very real threat to the health of Trade Marks and Company any business. Fostering a culture of honesty and integrity will p- 988 minimize our exposure to risk, and motivate honest employees Secretary in Practice to report any of the unethical and dishonest activity they witness N.Sridaran or suspect. Reminding an employee about a moral code has he Trade Marks Act 1999, provides for registration of been shown to reduce the likelihood of an ethical violation. T Marks and protection of registered Trade Marks and Employees must be persuaded to understand and work for prevents fraudulent use of the mark. Company Secretaries in Company's Vision and execute its basic promise to customers. practice can act as Trade Marks Agent and provide services for They are the driving force behind the organization, and their registration and renewal of trade marks. This Article sets out the behaviour is crucial to Company's success. procedures for registration of Trade Mark and Trade Mark related matters. Shareholders’ Rights and p- 977 Protecting your Innovations Illegitimate Use Thereof p- 993 Harsh Mishra under Patent Laws his Article talks about the irony faced by most of the Vivek Agarwal T public limited listed companies, big or small, in the atent law is the encouragement for the inventors as they country. The irony is: Companies fall prey to the ulterior motives P may put to use the invention and make some profits of some individual shareholders who regularly year-after year which may serve as fruits of their labour. Patent laws tend to keep on pestering the companies in the name of "shareholders' encourage and maintain the continuous flow of inventions, by rights" in order to serve their vested interest and extort freebies acting as an incentive to invent. viz. gifts, gift vouchers or some other personal favours such as By protecting the rights of the inventor, the government can be employment to their relatives, etc. In case a company does not sure that people will continue to think of unique and new ideas pay heed, these shareholders would slap notices on companies to share with the world.