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August 01, 2017 –August31, 2017
Issue No. – 008/ 2017
Dec 01, 2017 – Dec. 28, 2017
Issue No. – 012/ 2017
WINS Team wishes you and your family
A VERY HAPPY AND PROSPEROUS NEW YEAR!!!
We are delighted to share 1st Anniversary edition of WINS – (Whitespan Information and newsservices)- a monthly e-newsletter on corporate updates.
During 2017, WINS subscribers base grown astronomically from 200 to 10,000. WINS attractedyoung talent and its team size increased from 2 to 16. WINS invested in technology toseamlessly serve you on-time, with virus free contents, in eco-friendly manner.
WINS team stay motivated with your 721 suggestions/feedbacks received from itssubscribers/readers, appreciating not only WINS’s coverage and contents, but also givingobservations on Research work undergone in preparation of WINS, Creative presentation, Dot-on-time mailing, selection of articles, etc.
THANKYOU FOR YOUR TREMENDOUS SUPPORT AND MOTIVATION !!!
Your suggestions and support has motivated us to effortlessly send this newsletter toyou continuously dot on time on the first day of each month. We also thank ourteam members for all their support, dedication and commitment in this endeavour:
1. Abhishek Sharma 9. Kavisha Rai2. Ambica Mathur 10. L.N. Das3. Anika Dogra 11. Mahreen Rahman4. Ankita Pandey 12. Megha Gupta5. Divya Shukla 13. Monisha Purwar6. Himanshu Gupta 14. Prachika Agrawal7. Jaya Yadav 15. Trishna Chaudhary8. Juhi Dhand 16. Vinay Shukla
THANKYOU!!!
FROM THE CHIEF EDITOR’S PEN
At the outset, through this column, I want to take a moment and thank you all for appreciating and encouraging WINS. Inthis edition of our e-newsletter “WINS” (acronym for Whitespan Information and News Services) we have covered therecent updates from RBI, SEBI, MCA, CBDT, CBEC and various other miscellaneous laws. We have also brought for you a Briefwrite up on Secretarial Standard 3-Dividend. Hope we not only help you keep updated but also save your time by bringing abrief summary of all the updates through our section on Editor’s Quick Take.
Our Editorial Board comprises the following professionals:
1. Mr. Vinay Shukla - Mr. Vinay Shukla, a Fellow Member of The Institute of Company Secretaries of India (ICSI), agraduate in Law, Commerce and Management is Co-founder of WsA having more than twenty five years’ experience inwide spectrum of corporate functions.
2. Ms. Jaya Yadav - Ms. Jaya Yadav, a practicing company secretary based at Gurgaon is an associate member of TheInstitute of Company Secretaries of India (ICSI) and a graduate in law and Commerce from Delhi University.
3. Mr. Himanshu Gupta - Mr. Himanshu Gupta has been practicing as an advocate and is an associate member of TheInstitute of Company Secretaries of India (ICSI) and a graduate in law and Commerce.
4. Ms. Trishna Choudhary - Ms. Trishna Choudhary is an associate member of The Institute of Company Secretaries ofIndia (ICSI) and a graduate in commerce from Delhi University
In this issue we have covered the following:
Corporate Updates from MCA, RBI, SEBI, CBDT, CBEC and other miscellaneous laws A brief write up on Secretarial Standard 3
Compliance checklist for the month of January 2018
We hope all these would be of interest to you.
We invite articles on topics of professional interest. Please do ensure that the article is original, written in good style and adds value for the reader.
Your candid feedbacks are valuable: appreciation will encourage us; criticism will help us improve! Feedbacks can be sent at the following email id:
With warm regardsWINS (Whitespan News and Information Services)December 28, 2017
INDEX
S.No Section Page No.
1 Reserve Bank of India (RBI) 8-15
2 Ministry of Corporate Affairs (MCA) 16-20
3 Securities Exchange Board of India (SEBI) 21-26
4 Central Board of Excise and Customs (CBEC) 27-30
5 Central Board of Direct Taxes (CBDT) 31-33
6 Miscellaneous Laws 34-38
7 A brief write up on Secretarial Standard 3 39-47
8 Compliance Checklist 48-56
1. RATIONALISATION OF MERCHANT DISCOUNT RATE (MDR) FOR DEBIT CARD TRANSACTIONSDate of Notification December 04, 2017Effective Date January 01, 2018Above Notification is available at the following link:
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11183&Mode=0
Editor’s Quick Take:
RBI vide its notification dated December 04, 2017 has decided to rationalise the MDR for debitcards based on the following criteria:• Categorisation of merchants on the basis of turnover.• Adoption of a differentiated MDR for QR-code based transactions.• Specifying a ceiling on the maximum permissible MDR for both ‘card present’ and ‘card not
present’ transactions.
S.No. Merchant Category Merchant Discount Rate (MDR) for debit card transactions(as a % of transaction value)
Physical POS infrastructureincluding online card transactions
QR code-based cardacceptance infrastructure
1 Small merchants(with turnover upto ₹ 20 lakhduring the previous financialyear)
Not exceeding 0.40%(MDR cap of ₹ 200 pertransaction
Not exceeding 0.30%(MDR cap of ₹ 200 pertransaction)
2
Other merchants
(with turnover above ₹ 20 lakh
during the previous financial
year)
Not exceeding 0.90%(MDR cap of ₹ 1000 pertransaction)
Not exceeding 0.80%(MDR cap of ₹ 1000 pertransaction)
Accordingly, the maximum MDR for debit card transactions shall be as under:
2. SETTLEMENT OF AGENCY TRANSACTIONS IN CERTAIN CASES (FOR FUNDS AND AGENCYCOMMISSION) DIRECTLY FROM RESERVE BANK OF INDIADate of Notification December 07, 2017Effective Date January 01, 2018Copy of the above notification is available at the following link:https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11185&Mode=0
Editor’s Quick Take:
RBI vide its notification dated December 07, 2017 has decided that all agency banks shouldsettle their agency transactions for both funds and agency commission directly with theconcerned Regional Office of Reserve Bank instead of routing them through any other agencybank that acts as aggregator in certain cases. It effectively makes all agency banks to reportgovernment receipts directly to RBI instead of reporting them through any other agency bank.So also for payments made by all agency banks on behalf of state government/s get directlysettled with the concerned Regional Office of RBI. Agency Transaction details/scrolls may besent directly by individual agency bank to the concerned State Government/Treasury. Thisarrangement is being introduced to improve management of State Government funds apartfrom reducing inefficiencies in the system..
3. INVESTMENT BY FOREIGN PORTFOLIO INVESTORS (FPI) IN GOVERNMENT SECURITIESMEDIUM TERM FRAMEWORK – REVIEWDate of Notification December 12, 2017Effective Date January 01, 2018Copy of the above notification is available at the following link:https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11186&Mode=0
Editor’s Quick Take:RBI vide its notification dated December 12, 2017 has revised the limits for investment by FPIsfor the quarter January – March 2018 is increased by INR 64 billion in Central GovernmentSecurities (Central G-Secs) and INR 58 billion in State Development Loans (SDLs).
Limits for FPI investment in Government Securities
Billion
Central Government Security State Development loan Aggregate
General Long
term
Total General Long
term
Total
Existing
limits
1897 603 2500 300 93 393 2893
Revised
limits
1913 651 256 315 136 451 3015
4. CUSTOMER PROTECTION - LIMITING LIABILITY OF CUSTOMERS OF CO-OPERATIVE BANKS INUNAUTHORISED ELECTRONIC BANKING TRANSACTIONSDate of notification December 14, 2017Effective Date December 14, 2017Copy of the above notification is available at the following linkhttps://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11188&Mode=0
Editor’s Quick Take:
RBI vide its notification dated December 14, 2017 has with a view to limit the Liability ofCustomers of Co-operative Banks in Unauthorised Electronic Banking Transactions laid downrevised directions with regard to the following:• Strengthening of systems and procedures• Reporting of unauthorised transactions by customers to banks• Limited Liability of a Customer• Reversal Timeline for Zero Liability/Limited Liability of customer• Board Approved Policy for Customer Protection• Burden of Proof• Reporting and Monitoring Requirements
5. SUBMISSION OF FINANCIAL INFORMATION TO INFORMATION UTILITIESDate of notification December 19, 2017Effective Date December 19, 2017Copy of the above notification is available at the following linkhttps://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11189&Mode=0
Editor’s Quick Take:
RBI vide its notification dated December 19, 2017 has in view of the registration of National E-Governance Services Limited (NeSL) as the first IU under the IBBI (IUs) Regulations, 2017 onSeptember 25, 2017 advised all financial creditors regulated by RBI to adhere to the relevantprovisions of IBC, 2016 and IBBI (IUs) Regulations, 2017 and immediately put in placeappropriate systems and procedures to ensure compliance to the provisions of the Code andRegulations.
6. PROMPT IMPLEMENTATION OF GOVERNMENTS’ INSTRUCTIONS BY AGENCY BANKSDate of notification December 21, 2017Effective Date December 21, 2017Copy of the above notification is available at the following linkhttps://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11190&Mode=0
Editor’s Quick Take:
RBI vide its notification dated December 21, 2017 has advised all agency banks toscrupulously follow all the guidelines /instructions contained in variousnotifications of Government (Central as well as States) and take necessary actionsin this regard with immediate effect.
1. THE COMPANIES (FILING OF DOCUMENTS AND FORMS IN EXTENSIBLE BUSINESS REPORTING LANGUAGE), SECOND AMENDMENT, RULES, 2017
Date of Notification December 04, 2017Effective Date-Date of publication in the official gazette
Editor’s Quick Take:
MCA vide its notification dated December 04, 2017 has amended the Companies (Filing ofDocuments and Forms in Extensible Business Reporting Language) Rules, 2015 by notifying theCompanies (Filing of Documents and Forms in Extensible Business Reporting Language), SecondAmendment, Rules, 2017 by substituting annexure III in the same. For details kindly refer thenotification available at the link below:
http://www.mca.gov.in/Ministry/pdf/Scan_XBRL_05122017.pdf
2. THE COMPANIES (COST RECORDS & AUDIT( AMENDMENT RULES, 2017 Date of Notification December 07, 2017Effective Date April 01, 2016 Above notification is available at the following link:http://mca.gov.in/Ministry/pdf/CompaniesCostrecordsAuditRule_08122017.pdf
Editor’s Quick Take:MCA vide its notification dated December 07, 2017 has notified the Companies (CostRecords & Audit) Amendment Rules, 2017 by amending the Companies (Cost records andAudit) Rules, 2014. Key highlights of the same are:
• Inserting clause (fa) in rule 2 after clause (f)• Defining "lndian Accounting Standards" means Indian Accounting Standards as referred
to in Companies (lndian Accounting Standards) Rules, 2015• In the principal rules, for Form CRA-1 and Form CRA-3, shall respectively be substituted
and shall be deemed to have been substituted with effect from the 1st day of April, 2016.
3. PASSING OF THE COMPANIES (AMENDMENT) BILL, 2017 Date of passing of the bill – December 19, 2017
The Companies Amendment Bill, 2017 as passed by Lok Sabha is available at the following link:http://www.nfcg.in/UserFiles/ca-amendment-bill.pdf
Editor’s Quick Take:
Rajya Sabha has passed the Companies (Amendment) Bill, 2017 on December 19, 2017. thebill shall come in to force on getting President’s assent.
The said bill was passed by the lok sabha on July 02, 2017The bill provides for more than 40 amendments to the Companies Act, 2013
4. CONDONATION OF DELAY SCHEME, 2018 FOR DEFAULTING COMPANIES Effective Date – January 01, 2018Valid till – March 31, 2018
Editor’s Quick Take:MCA has introduced the Condonation of Delay Scheme, 2018 for defaulting companies with a view to forall defaulting companies (other than the companies which have been stuck off/whose names have beenremoved from the register of companies under section 248(5) of the Act). A defaulting company ispermitted to file its overdue documents which were due for filing till 30.06.2017 in accordance with theprovisions of this Scheme. The defaulting company after filing documents under this scheme, shall seekcondonation of delay by filing form e-CODS 2018 along with a fee of Rs. 30,000/- as prescribed under theCompanies (Registration Offices and Fee) Rules, 2014 well before the last date of the scheme. Further, theDINs of the Directors associated with the defaulting companies that have not filed their overduedocuments and the eform CODS, and these are not taken on record in the MCA21 registry and are stillfound to be disqualified on the conclusion of the scheme in terms of section 164(2)(a) r/w 167(1)(a) of theAct shall be liable to be deactivated on expiry of the scheme period. In the event of defaulting companieswhose names have been removed from the register of companies under section 248 of the Act and whichhave filed applications for revival under section 252 of the Act up to the date of this scheme, theDirector’s DIN shall be re-activated only after NCLT order of revival subject to the company having filing ofall overdue documents.
1. CATEGORIZATION AND RATIONALIZATION OF MUTUAL FUND SCHEMESDate of Circular December 04, 2017Effective Date December 04, 2017Above circular is available at the following link:http://www.sebi.gov.in/legal/circulars/dec-2017/categorization-and-rationalization-of-mutual-fund-schemes_36804.html
Editor’s Quick Take:
SEBI vide its circular dated December 04, 2017 has modified the guidelines regardingcategorization and rationalization of Mutual Fund Schemes issued vide circular no.SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 6, 2017• While preparing the single consolidated list of stocks, average full market capitalization
of the previous six month of the stocks shall be considered.• it is clarified that Macaulay duration shall be at portfolio level• With respect to the Medium Duration Fund and Medium to Long Duration Fund the
fund manager, in the interest of investors, may reduce the portfolio duration of theschemes upto one year
• Corporate Bond Funds would be permitted to invest in AA+ and above ratedinstruments.
Category of Schemes Scheme Characteristics
Medium Duration Fund Investment in Debt & Money Market instruments such
that the Macaulay duration of the portfolio is between 3
years – 4 years. Portfolio Macaulay duration under
anticipated adverse situation is 1 year to 4 years
Medium to Long Duration
Fund -
Investment in Debt & Money Market instruments such
that the Macaulay duration of the portfolio is between 4
years – 7 years. Portfolio Macaulay duration under
anticipated adverse situation is 1 year to 7 years
2. DISCLOSURE OF HOLDING OF SPECIFIED SECURITIES AND HOLDING OF SPECIFIED SECURITIESIN DEMATERIALIZED FORMDate of Circular December 19, 2017Effective Date December 19, 2017Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/dec-2017/disclosure-of-holding-of-specified-securities-and-holding-of-specified-securities-in-dematerialized-form_37028.html
Editor’s Quick Take:
SEBI vide its circular dated December 19, 2017 has amended Disclosure requirement forholding of specified securities and specified securities in dematerialized form. From nowon the details of the shareholding of the promoters and promoter group, publicshareholder and non-public non-promoter shareholder must be accompanied with PANNumber (first holder in case of joint holding). Further, the shareholding of the promoterand promoter group, public shareholder and nonpublic non-promoter shareholder is to beconsolidated on the basis of the PAN and folio number to avoid multiple disclosures ofshareholding of the same person
3. INVESTMENTS BY FPIS IN GOVERNMENT SECURITIESDate of Circular December 20, 2017Effective Date January 01, 2017Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/dec-2017/investments-by-fpis-in-government-securities_37040.html
Editor’s Quick Take:SEBI vide its circular dated December 20, 2017 has revised the limit for investment by FPIs inGovernment Securities, for the January - March 2018 quarter, with effect from January 01, 2018, asfollows:
Type of Instrument Upper Cap as on December 31, 2017 (INR cr)
Revised Upper Cap with effect from January 01, 2018 (INR cr)
Government Debt – General 189,700 191,300
Government Debt – Long Term 60,300 65,100
SDL – General 30,000 31,500
SDL – Long Term 9,300 13,600
Total 289,300 301,500
4. EXEMPTION APPLICATION UNDER REGULATION 11 (1) OF SEBI (SUBSTANTIAL ACQUISITIONOF SHARES AND TAKEOVERS) REGULATIONS, 2011Date of Circular December 22, 2017Effective Date December 22, 2017Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/dec-2017/exemption-application-under-regulation-11-1-of-sebi-substantial-acquisition-of-shares-and-takeovers-regulations-2011_37083.html
Editor’s Quick Take:
SEBI vide its circular dated December 22, 2017 has provided a standard format for filing ofapplication with SEBI with regard to Regulation 11(1) of SEBI (Substantial Acquisition ofShares and Takeovers) Regulations, 2011 (SAST Regulations).
In order to ensure uniformity of disclosures in such applications, SEBI has provided for astandard format for filing of application with it.
For details and other instructions kindly refer to the circular available at the link providedabove.
1. CLARIFICATION ON CUSTOMS (IMPORT OF GOODS AT CONCESSIONAL RATE OF DUTY) RULES,2017Date of circular December 08, 2017 Effective Date December 08, 2017Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2017/circ48-2017cs.pdf
Editor’s Quick Take:
CBEC vide its notification dated December 08, 2017 has eased the norms for furnishingsecurity / surety along with Bank Guarantee / bond by importers seeking to avail concessionalduty benefit in terms of Customs (Import of Goods at Concessional Rate of Duty)Rules 2017.Accordingly, all importers who are manufacturers / service providers registered under GSTand have been filing prescribed GST returns without fail and whose annual turnover inpreceding year is above Rs. 1 Cr, shall give surety for the amount of duty foregone and wherethey are unable to do so, a Bank Guarantee / Cash security equivalent to not more than % ofduty foregone shall be furnished and for all other cases, importers have to furnish BankGuarantee / Cash security equivalent to not more than 5% of duty foregone amount. Further,to avail this exemption, there should not have been initiated or launched any prosecutionagainst the importer under any of the Act in past three years.
2. REFUND/CLAIM OF COUNTERVAILING DUTY AS DUTY DRAWBACKDate of circular December 12, 2017 Effective Date December 12, 2017Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2017/circ49-2017cs.pdf
Editor’s Quick Take:
CBEC vie its circular dated December 12, 2017 has clarified that Countervailing Duties whichare leviable under section 9 of the Customs Tariff Act are rebatable as Drawback in terms ofSection 75 of the Customs Act. Drawback shall be admissible only where the inputs thatsuffered Countervailing Duties were actually used in the goods exported as confirmed by theverification conducted for fixation of Brand Rate. Where imported goods subject toCountervailing Duties are exported out of the country as such, then the Drawback payableunder Section 74 of the Customs Act, 1962 would also include the incidence of CountervailingDuties as part of total duties paid, subject to fulfilment of other conditions
3. THE CENTRAL GOODS AND SERVICES TAX (THIRTEENTH AMENDMENT) RULES, 2017
Date of Notification- December 21, 2017Effective Date –Date of publication in the official gazette Above notification is available at the following link:http://cbec.gov.in/resources/htdocs-cbec/gst/notfctn-70-central-tax-english.pdf
Editor’s Quick Take:
CBEC vie its notification dated December 21, 2017 has notified the Central Goods andServices Tax (Thirteenth Amendment) Rules, 2017 by amending the Central Goods andServices Tax Rules, 2017 and making changes in following forms:
i. FORM GSTR-1ii. FORM GST RFD-01iii. FORM GST RFD-01A
1. CBDT EXTENDS DATE FOR LINKING OF AADHAAR WITH PANDate of press release - December 08, 2017 Above notification is available at the following link:http://www.incometaxindia.gov.in/Lists/Press%20Releases/Attachments/676/Press-Release-CBDT-extends-date-Linking-Aadhaar-with-PAN-8-12-2017.pdf
Editor’s Quick Take:
As per the CBDT All taxpayers having Aadhaar Number or Enrolment Number are required tolink the same with Permanent Account Number (PAN). In view of the difficulties faced bysome of the taxpayers in the process, the date for linking of Aadhaar with PAN was initiallyextended till 31st August, 2017 which was further extended upto 31st December, 2017 andhas now been further extended to March 31, 2018
2. THE INCOME –TAX (25TH AMENDMENT) RULES, 2017Date of Notification- December 20, 2017 Effective Date-Date of publication in the official gazette Above notification is available at the following link:http://www.incometaxindia.gov.in/communications/notification/notification98-2017.pdf
Editor’s Quick Take:
CBDT vide its notification dated December 20, 2017 has notified the Income –tax (25thAmendment) Rules, 2017 by inserting a new proviso with regard to the situations where thecommunication cannot be delivered or transmitted to the address available with the IncomeTax Authorities. In such situations, the communication shall be delivered or transmitted to thefollowing address available with the Bank or the Post Master General or Insurance Companyor the address of the assessee as furnished in Form No.61 or Form No.61A or the address ofthe assessee as available in the records of the Government or the address of the assessee asavailable in the records of a local authority.
1. THE INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (GRIEVANCE AND COMPLAINTHANDLING PROCEDURE) REGULATIONS, 2017Date of Notification December 06, 2017Effective Date – Date of publication in the official gazetteAbove press release is available at the following link:http://ibbi.gov.in/webadmin/pdf/whatsnew/2017/Dec/180723_2017-12-09%2009:58:17.pdf
Editor’s Quick Take:
The IBBI vide its notification dated December 06, 2017 has notified The Insolvency and Bankruptcy Board ofIndia (Grievance and Complaint Handling Procedure) Regulations, 2017. These regulations would enable astakeholder, namely, debtor, creditor, claimant, service provider, resolution applicant or any other personhaving an interest in an insolvency resolution, liquidation, voluntary liquidation or bankruptcy transactionunder the Insolvency and Bankruptcy Code, 2016, to file a grievance or a complaint against a serviceprovider, namely, insolvency professional agency, insolvency professional, insolvency professional entity orinformation utility and provide for the following:• Filing of grievance and complaint• Identity of the stakeholder• Registration number• Disposal of grievance• Disposal of complaint• Statistics
2. NATIONAL COMPANY LAW APPELLATE TRIBUNALDate of Notice – December 14, 2017
Editor’s Quick Take:NCLAT vide its notice dated December 14, 2017 has issued the directions to remove the difficultiesfaced by the litigants and the office, in the contingency that may arise in the working of the AppellateTribunal:
• The Interlocutory Application(s) for stay, directions etc., if filed along with the appeal even ifseparately, the same will be accepted.
• In a pending appeal or application or Contempt Petition, if any Interlocutory Application(s) forstay, directions, impleadment, substitution, transpositions and restoration is filed, the same willbe accepted and will be listed along with the appeal on the next date fixed.
• In case, any person requests for early hearing of such Interlocutory Application(s), before thenext date fixed, such person can mention the matter in the Court of Hon'ble Chairperson
Above notice is available at the following link:http://nclat.nic.in/notice/Notice_interlocutory_14.12.2017.pdf
• No application for amendment or any affidavit/ additional affidavit including affidavit to fileadditional document shall be entertained without specific permission of the Bench hearingthe subject matter.
• If any reply affidavit or rejoinder is filed, even after the time allowed by the Court butbefore the next date of hearing the office will accept the same and keep it on record
• If any person intends to move application for adjournment or deferment of date,* theperson may move mentioning sup before the Bench hearing the subject matter.
• If there is a clerical mistake or typographical error in any of the order already passed andan Interlocutory Application is filed for correction for the same, such InterlocutoryApplication will be listed immediately before the Bench which passed the order.
3. EASY LOANS TO MSMES
Date of Press Release – December 22, 2017http://pib.nic.in/PressReleseDetail.aspx?PRID=1513844
Small Industries Development Bank of India (SIDBI) has also launched the ‘Udyamimitra’ Portal(www.udyamimitra.in) as a universal loan portal to improve accessibility of credit and handholding servicesto Micro, Small and Medium Enterprises (MSMEs). Through the portal, entrepreneurs can apply online forMSME loans upto Rs.2 crore without physically visiting bank branches. Various Scheduled Commercial Banks(SCBs), Non-Banking Financial Companies, Small Finance Banks and Financial Technology (Fintech)companies have been boarded on the portal.
Scheduled Commercial Banks (SCBs) are advised to achieve a 20% year-on-year growth in credit to Microand Small Enterprises (MSEs) to ensure enhanced credit flow, allocation of 60% of the MSEs advances to themicro enterprise accounts, a 10% annual growth in number of micro enterprise accounts, adoption of onecluster, operationalising at least one specialised MSME Branch in every district etc. In addition, a target of7.5% of Adjusted Net Bank Credit (ANBC) has been prescribed for Micro Enterprises. SCBs have beenmandated not to accept collateral security in the case of loans up to Rs.10 lakh extended to units in the MSEsector and computation of working capital requirements of MSE units has been simplified to make itminimum 20% of the projected annual turnover of the unit.
INTRODUCTION:
Dividend is a return on the investment made in the share capital of a company, as distinct fromthe return on borrowed capital, which is in the form of interest.
In commercial usage, the term “Dividend” refers to the share of profits of a company that isdistributed amongst its Members.
The term “Dividend” has been inclusively defined In the Act to the effect that it includesInterim Dividend. The Act neither specifically defines the term Dividend nor makes anydistinction between Interim and Final Dividend.
For the purposes of this Standard, capitalization of profits in the form of bonus shares is notDividend. A dividend is a payment made by a corporation to its shareholders, usually as adistribution of profits.
SYNOPSIS ON SECRETERIAL STANDARDS 3 OF DIVIDEND EFFECTIVE DATE – JANUARY 01, 2018
DEFINITIONS:
The following terms are used in this Standard with the meaning specified:
“Act” means the Companies Act, 2013 (Act No. 18 of 2013) or any previous enactment thereof,or any statutory modification thereto or re-enactment thereof and includes any Rules andRegulations framed there under.
“Dividend” means a distribution of any sums to Members out of profits and whereverpermitted out of free reserves available for the purpose.
“Final Dividend” means the Dividend recommended by the Board of Directors and declared bythe Members at an Annual General Meeting.
“Interim Dividend” means the Dividend declared by the Board of Directors.
“Free Reserves” means such reserves which, as per the latest audited balance sheet of acompany, are available for distribution as Dividend. However, the following amount shall not betreated as free reserves:(i) any amount representing unrealised gains, notional gains or revaluation of assets, whethershown as reserve or otherwise, or
(ii) any change in carrying amount of an asset or of a liability recognised in equity, includingsurplus in profit and loss account on measurement of the asset or the liability at fair value.
“Member” in relation to a company, means –
(i) the subscriber to the memorandum of the company who shall be deemed to have agreedto become member of the company, and on its registration, shall be entered as member inits register of members.
(ii) every other person who agrees in writing to become a member of the company and whosename is entered in the register of members of the company.
(iii) every person holding shares of the company and whose names entered as a beneficialowner in the records of a depository.
“Preference Shareholder” means a holder of such shares which carry a preferential right, inrespect of payment of Dividend, of a fixed amount or an amount calculated at a fixed rate andin respect of capital, to repayment of capital.
“Shareholder” means a Member as defined above and, where the context requires or admits,includes a Preference Shareholder.
SCOPE:
This Standard prescribes a set of principles in relation to the declaration and payment ofDividend and matters related thereto. The principles set out herein relate to declaration andpayment of Dividend on equity as well as preference share capital in accordance with theprovisions of the Act and are in respect of Dividend as it relates to a going concern. These areequally applicable to Final as well as Interim Dividend unless otherwise stated.
“Dividend shall be paid in cash and not in kind”
Dividend shall be paid out of the following:
1. Out of profits:
Dividend shall be paid out of the profits of the financial year for which such Dividend is sought to be declared and/or out of profits for any previous financial year(s) which remains undistributed after providing for depreciation in accordance with the provisions of the Act.
Dividend may also be declared out of money provided by the Central Government or a StateGovernment in pursuance of a guarantee given by such Government for this purpose.
A company shall not declare Dividend on its equity shares in case of non-compliance ofprovisions relating to the acceptance of deposits under the Act, till such time the depositsaccepted have been repaid with interest.
A company shall also not declare any Dividend, if it has defaulted in –
(a) Redemption of debentures or payment of interest thereon or creation of debentureredemption reserve,
(b) Redemption of preference shares or creation of capital redemption reserve,(c) Payment of Dividend declared in the current or previous financial year(s), or(d) Repayment of any term loan to a bank or financial institution or interest thereon, till such
time the default is subsisting.
2. Out of Free Reserves:In a year in which the profits are inadequate or there are no profits, the company may
declare Dividend out of Free Reserves subject to the fulfilment of the following conditions:
(a) The rate of Dividend declared by the company shall not exceed the average of the rates atwhich Dividend was declared by it in the three financial years immediately preceding thefinancial year of declaration of Dividend. This shall not be applicable where a company hasnot declared any Dividend in each of the three preceding financial years.
(b) Total withdrawal from the accumulated profits shall not exceed one tenth of the sum of thepaid up share capital and free reserves of the company as per the latest audited financialstatements.
(c) The amount so withdrawn shall first be utilised to set off the losses, if any, incurred in thefinancial year in which Dividend in respect of equity shares is proposed to be declared.
(d)The balance of Free Reserves after such withdrawal shall not fall below 15% of the paid upshare capital of the company as per the latest audited financial statements.
Interim Dividend shall not be declared out of Free Reserves.Dividend, once declared, becomes a debt and shall not be revoked.
Entitlement to dividend: Dividend to be paid only to the registered holders of shares entitled toDividend or to their order or to their bankers.
Types of dividend
Final Dividend Recommended by Board in the Board Meeting and Declared at the Annual General Meeting
Interim Dividend Declared at the Board Meeting
:
:
Opening of bank account for declaration
of dividend
To deposit the moneyin the bank accountwithin 5 days ofdeclaration of dividend
Dividend to the paid within 30 days of
declaration
The amount which remains unpaid or unclaimed after 30 days from the
date of declaration to the transferred to a separate bank account namely
Unpaid Dividend Account
Any amount in this accountremaining unpaid or unclaimed forseven years along with interest tobe transferred to Investor Educationand Protection Fund
Article contributed by Ms. Ankita Pandey
Besides, being a Company secretary, Miss Ankita Pandey is commerce graduatefrom Kanpur University. She took up CS as a career to fulfil her father's dream whoalways dreamt of seeing his daughter as a Corporate professional. Writing hasalways been her heart core passion and she strongly believes in the "art ofwords,." Miss Ankita started her career in a Kanpur based firm and currentlyworking in an MNC in Kanpur itself. It is her vision to always strive for excellenceand offer highest quality services to the clients
S. No Activities Sections/Rules/ Clauses, etc.
Acts/Regulations etc.
Compliance Due Date
To whom to be submitted
Service Tax Related Compliances
1 Pay Service Tax in Challan GAR-7, collected for
the previous Month by persons other than
individuals proprietors and partnership firms.
*(in case of Payment through Internet banking)
Section 68 Read
with Rule 6
Finance Act,1994
Service Tax Rules
1994
05th&*06th
of Every Month
Service Tax
Authorities
Income Tax Related Compliances
2 Due date for deposit of Tax deducted/collected
for the month of December, 2017
Section 194-IA Income-tax Act,
1961
7, January 2018 Income Tax
Authorities
3 Due date for furnishing of Form 24G by an office
of the Government where TDS for the month of
December, 2017 has been paid without the
production of a challan
Form 24G Income-tax Act,
1961
15 January 2018 Income Tax
Authorities
4 Due date for furnishing of challan-cum-statement in respect of tax deducted under Section 194-IA in the month of December, 2017
Section 194-IA Income-tax Act,
1961
14 January 2018 Income Tax
Authorities
5 Due date for issue of TDS Certificate for tax
deducted under section 194-IA in the month of
December, 2017
section 194-IA Income-tax Act,
1961
15 January 2018 Income Tax
Authorities
6 Quarterly issuance of certificate of tax deducted at
source (other than salary) (Form No. 16A)
Section 192 Income-tax Act,
1961
31, January
2018
Income Tax
Authorities
7 Quarterly issuance of certificate of tax collected at
source (Form No. 27D)
Section 192 Income-tax Act,
1961
31 January 2018 Income Tax
Authorities
RBI Related Compliances
8 Monthly statement of short term dynamic liquidity
in Form ALM-I
DNBS
(PD).CC.No.15
/02.01/2000-
2001 dated June
27, 2001
Circular 10th of Next
month
RBI
9 Monthly return (NBS-6) on exposure to capital
market
Para 13B NBFC Prudential
Norms (Reserve
Bank)
Directions, 1998
07th of Every
Month
RBI
10 Monthly Return on Important Financial Parameters DNBS (RID) C.C.
No.57/02.05.15/
2005- 06 dated
Sep 6, 2005
Circular 07th of Every
Month
RBI
11 Reporting of actual transactions of ECB in form
ECB-2 within 7 working days (December)
ECB Rules FEMA, 1999 08th January RBI through
Authorized
Dealer
S. No Activities Sections/Rules/ Clauses, etc.
Acts/Regulations etc.
Compliance Due Date
To whom to be submitted
Economic, Industrial & Labour Law Related Compliance
12 Monthly payment of Provident Fund (PF) (Non
Corporate)
(a) Paragraph 38
of Employees
Provident Funds
Scheme, 1952
(a) Employees’
Provident Funds and
Misc. Provisions Act,
1952
(b) Exempted
Scheme
15th Of
Next month
Provident
Fund
Authorities
Trustees of
Provident
Fund
13 File monthly return for employees leaving / joining
during the previous month (Form No.5)
Paragraph 20(2)
read with
Paragraph 36(1)
& (2)
The Employees
Pension Scheme,
1995 (For exempted
establishments
under Employees
Provident Fund and
Misc. Provisions Act,
1952)
15th of
Next Month
Provident
Fund
Commissioner
S. No Activities Sections/Rules/ Clauses, etc.
Acts/Regulations etc.
Compliance Due Date
To whom to be submitted
14 File monthly return for employees leaving / joining
during the previous month (Form No.5)
Paragraph 20(2)
read with
Paragraph 36(1)
& (2)
The Employees
Pension
Scheme, 1995
(For exempted
establishments
under
Employees
Provident Fund
and Misc.
Provisions Act,
1952)
15th of Next
Month
Provident
Fund
Commissioner
15 i) File monthly Return of employees entitled
for membership of Insurance Fund (Form
No.2(IF))
ii) File monthly Return for members of
Insurance Fund leaving service during the
month of April (Form no. 3(IF))
iii) File monthly return of
members joining service during the month of
April (Form no.F4(PS)
Paragraph 10 The Employees
Deposit Linked
Insurance
Scheme, 1976
(For exempted
establishments
under
Employees
Provident Fund
and Misc.
Provisions Act,
1952)
15th of Next
Month
Provident
Fund
Commissioner
S. No Activities Sections/Rules/ Clauses, etc.
Acts/Regulations etc.
Compliance Due Date
To whom to be submitted
16. Payment of ESI contribution for the previous month Regulation 31 Employees’ State
Insurance Act,
1948 and
Employees State
Insurance (Gen.)
Regulations, 1950
21st of Next
Month
ESIC
Authorities
17 Monthly return of Provident Fund for the previous
month Provident funds
Paragraph 38 of
Employees’
Provident Act,
1952
Employees
Provident Funds
and Misc. Scheme,
1952
25th of Next
Month
Provident
Fund
Authorities
18. Monthly return of Provident Fund for the previous
month with respect to International Workers.
Paragraph 36 The Employees'
Provident Funds
Scheme, 1952
25th of Next
Month
Provident
Fund
Authorities
S. No Activities Form No. Acts/Regulations etc.
Compliance Due Date
To whom to be submitted
Good and Service Tax Related Compliances
19. Details of outward supplies of taxable goods and
/or services effected (for the month of November)
GSTR-1 Chapter IX of
CGST Act,2017
10th of Next
Month
Registered
Taxable
Supplier
20. Details of inward supplies of taxable goods and /or
services effected calming input tax credit (for the
month of August)
GSTR-2 Chapter IX of
CGST Act,2017
After the 10th
but before 15th
of Next Month
Registered
Taxable
Recipient
21. Monthly return on the basis of finalization of
details of outward suppliers and inward supplies
along with the payment of amount of tax. (for the
month of November)
GSTR-3 Chapter IX of
CGST Act,2017
20th of Next
Month
Registered
Taxable
Person
22. Quarterly return for Compounding Taxable
person
GSTR-4 Chapter IX of
CGST Act,2017
18th of Next
Succeeding
Quarter
Composition
Supplier
S. No Activities Form No. Acts/Regulations etc.
Compliance Due Date
To whom to be submitted
23. Return for Non- Resident foreign Taxable person GSTR-5 Chapter IX of
CGST Act,2017
20th of Next
Month or
within 7 days
after the last
day of validity
of registration
whichever is
earlier
Non- Resident
Taxable
Person
24. Return for Input Service distributor GSTR-6 Chapter IX of
CGST Act,2017
13th of Next
Month
Input service
distributor
25. Return for authorities deducting tax at source GSTR-7 Chapter IX of
CGST Act,2017
10th of Next
Month
26. Details of suppliers effected through e-commerce
operator and the amount of tax collected
GSTR-8 Chapter IX of
CGST Act,2017
10th of Next
Month
E-Commerce
operator/ Tax
Collector.
S. No Activities Form No. Acts/Regulations etc.
Compliance Due Date
To whom to be submitted
27. Final Return GSTR-10 Chapter IX of
CGST Act,2017
Within 3
months of date
of cancellation
or date
cancellation
order ,
whichever is
later.
Taxable
person whose
registration
has been
surrendered
or cancelled
28. Details of Inward supplies to be furnished by a
person having UIN
GSTR-11 Chapter IX of
CGST Act,2017
28th of the
month
following the
month for
which
statement is
filed.
Person having
UIN and
Calming
refund
For further information please contact:
NCR OF DELHI MUMBAI LGF, 152P, Sector 38, 506, Arcadia, 195, Nariman Point, Near Medanta, the Medicity, Mumbai – 400 023 Gurgaon 122-002 Telephone – 0124-2204242, 63
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