from the chairman - icsi · 2015-10-15 · october, 2015 3 nirc-icsi newsletter from the chairman...

October, 2015 3 NIRC-ICSI Newsletter

From the Chairman

Corporate Laws Committee, ICSI, CS DeepakGupta, Executive Director, PricewaterhouseCoopers, Dr.(CS) S Chandrasekaran, CompanySecretary in Practice, CS U K Chaudhary, PastPresident, ICSI & Senior Advocate, Mr. PavanDuggal, Advocate, Supreme Court of India, CABimal Jain, CS J K Mittal, Advocate, Mr. M.M.Sharma, Head Competition Law, VaishAssociates, Advocates, CS Venkat Rao, CS &AVP (Finance), Omaxe Ltd. and Dr. S K Gupta,Head Group Secretarial & Internal Audit,Spentex Industries Limited were thedistinguished guest speakers at the RegionalConference.

On 1st October, 2015 NIRC organised a StudySession on the topic "Annual Return underCompanies Act" at NIRC premises. CS RaviVarma, Company Secretary, Texmaco Rail &Engineering Limited, Kolkata was the guestspeaker on the occasion.

I take this opportunity to express my sincerethanks and gratitude to all the guest speakersfor sparing their valuable time and sharing theirrich knowledge and experience with the delegatesof all these programmes.

In order to develop quality professionals, it isessential to provide them adequate opportunitiesfor their grooming during their studentship. Thegrooming is possible only by attending qualitytraining programmes. NIRC is very regularlyorganising these training programs with a focusto maintain the quality of these trainingprogrammes for the students of the Institute. On16th September, 2015 NIRC inaugurated 218thbatch of MSOP at NIRC premises. CS InderMohan Singh, Director Legal & CorporateSecretarial, Honeywell International India wasthe Chief Guest on the occasion. I take thisopportunity to express my sincere thanks andgratitude to the Chief Guest for sparing hisvaluable time and sharing his rich knowledge andexperience with the participants of the batch.

Also in order to provide opportunity to thestudents to attend MSOP at their door steps,NIRC authorized its chapters to conduct MSOP

under the banner of NIRC. In this series, recentlyMSOPs are being organized at Udaipur, Kanpur,Chandigarh and Lucknow under banner ofNIRC.

The following are the forthcoming programsbeing organized by NIRC and the Institute:

• On 17th October, a joint seminar byCompetition Commission of India andNIRC-ICSI on "Competition Law &Compliance - A Growth Enabler".

• On 21st and 22nd November, 2015, PunjabState Conference at Amritsar.

• This year on 17th to 19th December, 2015National Convention is being organized inNorthern Region at Delhi.

I take this opportunity to request all of to attendthese programs in large numbers and have thebenefit of listening to rich deliberations of thegalaxy of the expert speakers.

I also request the members to please comeforward and volunteer themselves to partnerwith NIRC by becoming speaker/ resourceperson in the programs being organized byNIRC-ICSI. We also request members to helpNIRC in doing Career Awareness amongst theschools, colleges, institutes and othereducational bodies. Members who can take outtime for the same may please send their detailsat [email protected].

I request all of you to kindly keep interacting withNIRC and the Institute and give your free andfrank suggestions for further improving theactivities at NIRC.

With warm regards,

Yours sincerely,

CS NPS Chawla

Chairman, NIRC-ICSI

Cell: 9958535300, [email protected]


GOODS & SERVICE TAX - A GAME CHANGER– CS Bavneet Kaur*

central and state governments as the CentralGST and the State GST respectively.

EFFECT:

The introduction of Goods and Services Tax(GST) would be the boldest indirect tax reformin 60 years in India with the following positivebusiness impacts:

• Mitigating double taxation in a major wayand paving the way for a common nationalmarket.

• From the consumer point of view, thebiggest advantage would be in terms of areduction in the overall tax burden ongoods, which is currently estimated at 25%-30%.

• Introduction of GST would also makeIndian products competitive in thedomestic as well as in internationalmarkets.

• Last but not the least, due to its transparentcharacter, it would be easier to administer.

ADMINISTRATIVE POWERS:

The administrative power shall vest with asingle authority to levy tax on goods andservices. Exports will be zero-rated andimports will be levied the same taxes asdomestic goods and services adhering to thedestination principle.

FEATURES:

GST will be levied at every stage of production-distribution chain. It will facilitate seamlesscredit flowing across the entire supply chainand across all States under a common taxbase. Salient features of the proposed modelare as follows:

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*The views expressed are personal views of the author and it should not be taken as views of the NIRC-ICSI.

The Goods and Service Tax Bill popularlyknown as GST Bill was introduced in IndianTax Structure by The Constitution (OneHundred and Twenty-Second Amendment)Bill , 2014, which is expected to beimplemented in India, from April 2016.

As per the present tax collection system,indirect taxes (excise, custom, service tax) arecollected individually and any set off can bedone only within same kind of tax i.e. to saythat any set off against any extra excise paidcannot be claimed against the service taxpayable, or say in case of VAT, Input Creditavailed in Delhi cannot be claimed for set offagainst the CST payable by the dealer. TheGST Bill proposes to be a comprehensiveindirect tax levied on manufacture, sale andconsumption of goods as well as services atthe national level. It will replace all indirecttaxes levied on goods and services by theIndian Central and State governments.

SCHEME

GST is a comprehensive value added tax ongoods and services which is levied andcollected on value addition at each stage ofsale or purchase of goods or supply of servicesbased on input tax credit method but withoutState boundaries i.e. the trade in India will inactual sense be free from restrictions of stateboundaries. There shall lie no distinctionbetween taxable goods and taxable servicesand these would be taxed at a single rate in asupply chain of goods and services till thegoods/services reach the consumer.

APPLICABILITY

India is a federal republic, and the GST willthus be implemented concurrently by the


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1. DUAL GOODS AND SERVICE TAX

The GST shall have two components: onelevied by the Centre - referred to as CentralGST, and the other levied by the States -referred to as State GST. Rates for Central GSTand State GST would be prescribedappropriately, reflecting revenueconsiderations and acceptability.

2. GST APPLICABLE TO ALLTRANSACTIONS

The Central GST and the State GST would beapplicable to all transactions of goods andservices except

• the exempted goods and services,• goods outside the purview of GST(Purchase

tax,Stamp Duty, Vehicle Tax, ElectricityDuty, Other Entry taxes and Octroi, and

• transactions below the prescribed thresholdlimits ( gross annual turnover of Rs. 10 lakhfor goods and services for all the States andUnion Territories & the threshold forCentral GST for goods may be kept Rs.1.5Crore and the threshold for services shouldalso be appropriately high.)

3. DESTINATION BASED MULTI POINTLEVY

GST is based on destination principle, thus taxbase will shift from production toconsumption of goods. The taxable event isConsumption of goods or services. As a result,revenue will accrue to the state in whichconsumption takes place or deemed to takeplace.

4. GST ON THE BASIS OF INVOICE CREDITMETHOD

The liability of Central & State GST will becomputed on the basis of Invoice Creditmethod i.e. allow credit for tax paid on allintermediate purchases of goods and serviceson the basis of invoice issued by the supplier.

5. PAYMENT OF GST

The Central GST and State GST will be paidto the accounts of the Centre and the Statesseparately thus it should be ensured that allservices and goods have indication whetherit relates to Central GST or State GST (withidentification of the State to whom the tax isto be credited).

6. UNIFORM PROCEDURE FORCOLLECTION OF GST

To the extent feasible, uniform procedure forcollection of both Central GST and State GSTwould be prescribed in the respectivelegislation for Central GST and State GST.

TAXABLE PERSON

• It will cover all types of person carrying onbusiness activities, i.e. manufacturer, job-worker, trader, importer, exporter, all typesof service providers, etc.

• If a company is having four branches infour different states, all the four brancheswill be considered as taxable person undereach jurisdiction of State Governments.

• All the dealers/ business entities will haveto pay both the types of taxes on all thetransactions.

• A dealer must get registered under CGSTas it will make him entitle to claim InputTax Credit of CGST thereby attractingbuyers under B2B transactions.

• Importers have to register under bothCGST and SGST as well.

RATE OF GST

• There will be a two-rate structure -a lowerrate for items of basic importance andnecessity and a standard rate for goods ingeneral. There will also be a special ratefor precious metals and a list of exempteditems.


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• For taxation of services, there may be asingle rate for both CGST and SGST.

REGISTRATION

• Under GST registration, it is likely to belinked with the existing PAN.

• The new business identification numberwas likely to be the 10-digit alphanumericPAN, in addition to two digits for state codeand one or two check numbers fordisallowing fake numbers. The totalnumber of digits in the new number waslikely to be 13-14.

IGST - INTER - STATE TRANSACTIONS OFGOODS & SERVICES

The existing CST will be discontinued.Instead, a new statute known as IGST willcome into place. It will empower the CG tolevy and collect the tax on the inter-statetransfer of the GS.

The IGST Model envisages that Centre wouldlevy IGST which would be CGST plus SGSTon all inter-State transactions of taxable goodsand services. The inter-State seller will payIGST on value addition after adjustingavailable credit of IGST, CGST, and SGST onhis purchases. The Exporting State willtransfer to the Centre the credit of SGST usedin payment of IGST. The Importing dealer willclaim credit of IGST while discharging hisoutput tax liability in his own State. TheCentre will transfer to the importing State thecredit of IGST used in payment of SGST. Therelevant information is also submitted to theCentral Agency which will act as a clearinghouse mechanism, verify the claims andinform the respective governments to transferthe funds.

The major advantages of IGST Modelare:

a) Maintenance of uninterrupted ITC chainon inter-State transactions.

b) No upfront payment of tax or substantialblockage of funds for the inter-State selleror buyer.

c) No refund claim in exporting State, as ITCis used up while paying the tax.

d) Self-monitoring model.e) Level of computerisation is limited to inter-

State dealers and Central and StateGovernments should be able to computerisetheir processes expeditiously.

f) As all inter-State dealers will be e-registeredand correspondence with them will be bye-mail, the compliance level will improvesubstantially.

g) Model can take 'Business to Business' aswell as 'Business to Consumer' transactionsinto account.

CONCLUSION

The taxation of goods and services in Indiahas been characterized as a cascading anddistortionary tax on production resulting inmis-allocation of resources and lowerproductivity and economic growth. It alsoinhibits voluntary compliance. It is wellrecognized that this problem can be effectivelyaddressed by shifting the tax burden fromproduction and trade to final consumption.

A well designed destination-based valueadded tax on all goods and services is anappropriate method of eliminating distortionsand taxing consumption. Under this structure,all the different stages of production anddistribution can be interpreted as a mere taxpass-through, and the tax essentially 'sticks'on final consumption within the taxingjurisdiction.

GST is not simply VAT plus service tax, but amajor improvement over the existing systemof VAT and disjointed services tax - a justifiedstep forward.


IMPERFECTION IN PROFESSIONAL WORK

IN FORM 32 BY INDRANI MUKERJEA (SHEENA BORA MURDER CASE)– CS Mohit Saluja*

provided , still imprisonment of 2 years isspecified under section 628.

But to my mind, the shock of Indrani wasnot the fault of Indrani who had submittedthe photo of her ex husband rather this couldbe because of the Professional who might beCA, CS or CWA who had submitted thedocuments on behalf of her and ignored theimportant aspects of attachments at time offiling of Form 32 with MCA.

Why I am emphasizing on Professionals hereis because the documents are submitted bythe clients to the professionals CA/CS/CWAand these are uploaded at MCA website bythe professionals using their DigitalSignatures and via login provided to themby the MCA.

That's why I have titled my article asIMPERFECTION IN THE PROFESSIONALWORK. I am not blaming the Professionalshere for their work but many a times,unknowingly these mistakes do happen. Thisis not only the case of Indrani but in no. ofcompanies these things are happening andthis is just because of the mind set of "JANEDO" adopted by a noumber of Professionals.If you download the documents and e formsfrom the records of MCA for 10 companies,you will find silly mistakes in a significantnumber of companies. Mostly mistakeshappen in case of documents filed withrespect to annual filings, as at that timebecause of tension of last dates and heavyrush, professionals do not take the matterseriously and they file the documents withincorrect attachments or evn withoutnecessary attachments. . In many of thecompanies, we may also find that theattachments of balance sheets and relateddocuments attached in e forms pertain tosome other companies.

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On 28.08.2015, I was watching DNA onSheena Murder Case on Zee News. Thereporter Sudhir Choudhary disclosed thecompanies in which Indrani Mukerjea wasacting as a Director. Form 32 being filed bythe Indrani for her resignation from thedirectorship of the company in 2009 from 9XMEDIA PRIVATE LIMITED was shown onthe television. Indrani was CEO and founderDirector Promoter of such company and leftthe management role in March 2009. Whatwas shocking to see was that Form 32 hadbeen filed by the Indrani for giving herresignation but the photo attached along withher resignation letter in Form 32 was of herEx Husband Sanjeev Khanna.

This matter was disclosed by the reporterSudhir Choudhary to create the connectionbetween Indrani Mukerjea and her ExHusband Sanjeev Khanna that even aftertheir divorce in 2002 she kept the documents/photographs of her husband in her recordsand provided the same to variousdepartments and had cheated MCA / theinvestors who may have invested in thecompany. DNA revealed that the Indrani,herself, was shocked and that even she didnot know as to how it happened.

If we look into the Companies Act 2013, thefalse statement/ documents produced byIndrani will come under the purview ofsection 447 as fraud which has beenperpetrated intentionally to gain someadvantage or to injure the interest of thecompany or its shareholders, and thepunishmentfor the same is imprisonment forat least 6 months which can be extended upto 10 years under the Act. But as the mistakehas been done under Companies Act 1956,where no specific definition of fraud has been


This attitude of "Jane Do" must be left apartat the time of filing the documents with MCAspecially as the documents now being filedwith MCA are via online through STP modeand once filed cannot be changed later on. Inthe case of Income tax, when someone realizeabout some mistake, he can revise the returnbut this not possible in case of ROC filings.Moreover, most of the documents areapproved via STP and not being checked bythe concerned Registrar instantly and noobjection is being raised from their end, in casewrong filing is done.It is therefore imperativethat precautions are taken by theProfessionals at the time of filing ofdocuments with the MCA/ ROC or with anyother departments because filing of thesedocuments may affect our clients in future ormay negatively impact the Professionals also.the mistakes are being noticed as documentsfiled with ROC are public documents and canbe viewed by any person for any company bypaying fees of Rs. 100 with concernedRegistrar of companies. Rather in other caseslike Income Tax, Service tax, sales tax, noperson can view documents of any otherunknown person from any department. SoProfessionals specially We CompanySecretaries have to be careful and cautionedin such cases. Following are some of theinstances of the mistakes noticed by me whendocuments are inspected and downloadedfrom MCA Site :

1. Attachments of some other company EForms of the subject company. 2. Attachingunsigned documents with E Forms. Use ofword "Sd/-' in place of signatures of Directoron the documents. . In most of the cases, eventhe word "Sd not used

3/-

4. Scanning not clear. In most of the cases,the whole page is black / blank

5. The basics of Section 12 are not followedby the companies in attachments of their letterhead i.e. not showing Registered Officeaddress, email ids, phone nos. websites names

and CIN.Initiative of MCA to avoid suchmistakes:

The ministry is also cautious in this matter.That is the reason that MCA has nowprescribed / mandated s a declaration for theProfessionals especially at end of each E Formwhich is reproduced below:

Certificate by practicing professional

I declare that I have been duly engaged forthe purpose of certification of this form. It ishereby certified that I have gone through theprovisions of the Companies Act, 2013 andRules there under for the subject matter of thisform and matters incidental thereto and Ihave verified the above particulars (includingattachment(s)) from the original/certifiedrecords maintained by the Company/applicant which is subject matter of this formand found them to be true, correct andcomplete and no information material to thisform has been suppressed. I further certifythat:

i. The said records have been properlyprepared, signed by the required officersof the Company and maintained as per therelevant provisions of the Companies Act,2013 and were found to be in order ;

ii. All the required attachments have beencompletely and legibly attached to thisform;Moreover at the end of every Form, specialinstructions in the form of a NOTE havebeen given for Professionals and companieswhich is reproduced as under:

Note: Attention is drawn to provisions ofSection 448 and 449 which provide forpunishment for false statement/certificateand punishment for false evidencerespectively.

Conclusion: The conclusion, I think, no needto be mentioned here which all weProfessionals know. I request you allreaders to conclude the same at end thisarticle in "Comment" column.

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FENG SHUI TIPS TO BRING GOOD LUCK AND WELL-BEING!– CS Neelam Katharia*

2 - CREATE LIGHT

The presence of light in any environment isessential as it releases positive vibes. Naturalsunlight is certainly the best but in the absenceof that, do not despair! You can create theright light in your living space by using lampsand placing them correctly, especially in thedarkest areas of the house where energystagnates more easily. However, excessivelylarge and invasive lamps are not appropriatefor bedrooms.

3 - SEPARATE ENVIRONMENTS

Separating the various environments whichsurround us along with the numerousactivities we engage in, is necessary for theright energy. In spacious environments, thiswill turn out to be a very simply operation. Ifspace is lacking (such as in one or two roomedflats), this advice will become more difficultin practice but it is not impossible. You canuse dividers or even tall plants to createsegregations. Moreover, when you sleep, closeyour bathroom door to cast away any type ofnegative energy which could come from thatspace

4 - USE MIRRORS CORRECTLY

Mirrors have a very important feature: toreflect light and therefore energy. To do thishowever, every mirror must be positionedcorrectly to not reflect negative energy.Placing a mirror at the entrance is positive asit prevents negative energy from entering. Wedo not recommend however placing mirrors

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We all want good health, peace of mind,happiness and contentment in our lives.Without good health, we cannot enjoy life toits fullest, even if we have all the othermaterial possessions. In the truest sense,'Health' is the biggest wealth one requires toenjoy life to its core. Regular physical andmental exercises are essential for keeping bothbody and mind in good shape. And, so is eatinga balanced and healthy diet. But, what is alsovery important is to remain positive andforward looking. Well, in today's turbulenttimes, the latter is not very easy. So, it becomesimperative to invest your faith in somethingyou truly practice and believe in. After all, itis only humane to find solace in little thingsand gestures of life, which you can somehowrelate to and also find peace in. Such is themagic of little good luck charms, which FengShui has aplenty. Here is a list of 10 mostpopular, and if you believe us, very workableand useful, Feng Shui tips:

1 - CLEAN AND TIDY

At first, cleaning and tidying the space aroundyou is important, in fact, is fundamental toachieving inner peace. Orderliness within usreflects our mental order, just like how messis indicative of a confused subconscious. Wemust endeavor to eliminate every type ofclutter, be it on our desk, table, bed or even inour wardrobe. Order stimulates positiveenergy and allows it to flow more liberally tobring about luck.


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in the bedroom (especially in front of the bed)as they could disturb sleep. It should also beavoided to place mirrors opposite to theentrance of the house.

5 - USE PLANTS AND WATER FOUNTAINS

The use of plants and water fountains is veryhealthy. Both elements, in fact, are able totransmit vital energy to the entire environmentand to those who live there. When plants orflowers wither, it is good to remove them asone could obtain the opposite effect. Watercan be made a part of the environment in theform of small fountains or aquariums withpictures and paintings.

6 - MEND WHAT IS BROKEN

For Feng Shui it is very important not to havebroken or impaired objects and to even haveblunt corners fixed. If pipes are leaking, tryto fix them as soon as possible as they arelosing chi and, in general, stagnant water isnever considered positive.

7 - FAVOUR REGULAR SHAPES

Feng Shui favours simplicity as it leads toharmony. This is why regular shapes are wellaccepted such as rectangles and squareswhereas irregular shapes should be avoided.This concerns purely furniture and furnishingcomplements.

8 - OPEN THE WINDOWS TO RECIRCULATE AIR

This, as well as being one of the mostimportant Feng Shui tips, is also a good dailyrule. It is crucial to change the air and let thestagnant air go out, especially after hours ofsleep. We recommend you to leave thewindows open for at least twenty minutes aday to let positive chi enter and , in general,to circulate clean air into the environment.

9 - USE INCENSE OR CANDLES

Incense and candles have two abilities: todiffuse good energy and also to purify it. Thereare two elements in candles: fire and air, andboth are able to transmit energy and harmonywhile creating balance and resolvingproblems. The use of natural candles withessential oils is recommended And Incensealso has the same properties.

10 - LIMIT THE USE OF ELECTRICALOBJECTS

Electrical objects create electromagnetic fieldswhich are harmful for all the living beings. Itis good, therefore, not to have an excessiveamount of such objects around, especially inbedrooms where there should be no TVs orequipment such as computers or telephones.The use of lamps should also be moderated ascandles or soft lights are preferred.

INVITATION FOR CONTRIBUTION OF ARTICLES

NIRC of ICSI invites Articles from Members for publication in the NIRCNewsletter. Members may send the soft copy of their article, profile and passportsize colour photograph to NIRC by email to [email protected], for consideration bythe Editorial Board.

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PROCEDURE TO CHANGE REGISTERED OFFICE FROMONE STATE TO ANOTHER STATE

– CS Pooja Solanki*

language newspaper circulated in the area inwhich registered office of the company issituated clearly stating the substance of thepetition. The notice shall state that any personwhose interest is likely affected due to changemay intimate to the Regional Director within21 days of notice.

Advertisement can be published next day fromthe date of Extraordinary General Meeting.However if the daily is evening newspaper,then on the same day / date of theExtraordinary General meeting .

STEP 7. Send individual notices to allcreditors (including contingent creditors ifany)/debenture holders of the company.

STEP 8. List of Creditors and Debenturesshould be that of any date before two monthsfrom the date of filing the petition. Get noobjection from the creditors and particularlyfrom the Banks / financial institutions forchange of registered office from one state toanother state. A copy of the list of creditorsand debenture holders shall be kept at theRegistered Office of the company forinspection purpose.

STEP 9. After a gap of one month from thedate of sending notices as above, file petitionwith the Regional Director, Ministry ofCorporate Affairs. Previously the petition wasrequired to be filed with Company law Board.Now Regional Directors have been delegatedwith these powers. The petition has to be filedwith the Regional Director of the RegionalOffice of the Ministry of corporate Affairs inthe jurisdiction where the existing registeredoffice is situated along with the followingdocuments.

• Certificate of Incorporation

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The Steps involved in changing the registeredoffice from one state to another state

The procedure for making the petition underSection 13 of the Companies Act, 2013 is givenbelow.

STEP 1. Hold a Board Meeting to consider theproposal and approve the notice of ExtraordinaryGeneral meeting and authorise the CS or Directorto move an application to alter Clause II ofMemorandum of Association to the RegionalDirector within whose jurisdiction the registeredoffice of the company (before change) is situated.

STEP 2. In the board meeting fix up the date,time, and place of the general meeting andapprove the notices for this purpose, send thenotices, hold the meeting and pass specialresolutions.

STEP 3. In case of listed company theresolution should be made by postal ballot asper section 110 of the Companies Act, 2013.Forward three copies of notice to the stockexchange where the shares of the company arelisted. Forward to the stock exchange minutesof the Extra ordinary General Meeting.

STEP 4. Prepare the Minutes of ExtraordinaryGeneral meeting/ General Meeting.

STEP 5. After taking the approval of themembers, file a certified copy of the specialresolution along with the explanatorystatement in Form MGT-14 (Filling ofResolution and agreement to the registrarunder section 117) with ROC.

1. Copy(s) of resolution(s) along with copy ofexplanatory statement under section 102

2. Altered memorandum of association &Altered articles of association

STEP 6. Publish a general notice in at least oneregional language newspaper and one English


• Latest Balance sheet and Statement ofprofit and loss

• Memorandum and Articles of Association• Notice of Extraordinary General meeting

and explanatory statement• Minutes of Extraordinary General meeting• Certified copy of special resolution for

shifting of registered office and foramending Clause II of the Memorandumof Association.

• Copy of advertisement released in Englishdaily and regional newspaper

• Certificate from the statutory auditorcertifying the list of creditors

• Certified true copy of receipt evidencingproof of dispatch of notice to the chiefSecretary of the State concerned by speedpost or by courier or by personal delivery

• Affidavit by the directors of the companyregarding the list of creditors verifying thepetition

• Affidavit for dispatch service andpublication of notice

• Memorandum of Appearance orVakkalatnama

• Board resolution authorizing companysecretary / Chartered Accountant oradvocate

• Board resolution authorizing the directorto submit the petition

• Form MGT-14 along with paid challan• A copy of Form INC- 23 along with challanSTEP 10. An affidavit verifying the petitionon a non judicial stamp paper Rs. 20 which isnotarized shall be attached. Three affidavitsare to be given along with the petition. Oneaffidavit is verifying the petition; one affidavitis verifying publication of notice and finallyone affidavit verifying the creditors. Where thefirst two affidavits shall be given by onedirector, the third affidavit verifying thecreditors shall be given by two directors of thecompany.

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In case, if one of the directors is residing inforeign country, he shall provide the affidavitfrom abroad after getting it notarized there.

STEP 11. Petition should not be prepared onthe letter head.

STEP 12. File a copy of the notice along witha petition to the Chief Secretary to theGovernment of the State where the registeredoffice of the company is situated or to theAdministrator/Lt. Governor of the UnionTerritory where the registered office issituated in the Union Territory.

STEP 13. A hearing may take place at theRegional Director office and it should berepresented by the company Secretary orpracticing professional or advocate. Thecreditors, if any and the representatives of thecompany may also be represent and heardbefore making any order.

STEP 14. The RD, on satisfaction, may passthe order on or without hearing the matter.

STEP 15. After receiving the Regional Directororder for shifting the registered office, thecompany is required to file certified copy ofthe order with the ROC along with Form No.INC- 28 within one month of receipt ofcertified copy along with the printed copy ofthe altered memorandum of association. Onlywhen Form INC-23 is approved, Form INC-28 can be filed.

STEP 16. File Form No. INC- 22 with the ROCof new the location of the registered officeWithin 30 days of change.

STEP 17. Make alteration in the MOA withrespect to the state in every copy ofMemorandum.

STEP 18. Notify the change of registeredoffice in newspaper (optional).

STEP 19. Each stationery, banner, signboard,bills, invoice etc. should show the new addressand necessary advice should be sent toshareholders, debenture holders, and otherconcerned parties


CAPITAL MARKET REFORMS IN INDIA– Dr. S.K. Gupta, FCS*

• The practice of holding securities inphysical form has been replaced with de-materialized securities .

• The margin system, limits on intra-day,trade and settlement guarantee fund aresome of the measures that have beenundertaken to ensure the safety of themarket.

• The trading and settlement cycles have beensignificantly reduced. The cycles wereinitially shortened from 14 days to 7 days.The settlement cycle is now T+2.

• Listed companies are required to furnishunaudited financial results to the stockexchanges and also publish the same on aquarterly basis.

• To enhance the level of disclosure by thelisted companies, SEBI decided to amendthe Listing Agreement to incorporate thesegment reporting, accounting for taxes onincome, consolidated financial results,related party disclosures and compliancewith accounting standards.

• The last few years have seen significantinterface with the international capitalmarkets. A major step towards that wasthe inclusion of Foreign InstitutionalInvestors (FIIs) such as mutual funds,pension funds and country funds tooperate in the Indian markets.

• The SEBI's regulatory realm stretchesbeyond the stock exchanges to merchantbankers, registrars, share transfer agents,underwriters, mutual funds and variousother advisors and market intermediaries.

• The VaR based margining system has beenintroduced by SEBI

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Indian Capital Markets have showntremendous growth in the post Liberalizationera. It remains one of the most resilientglobally and poised to be one of the Topdestinations for domestic and globalbusinesses to expand and invest into. Since theIndian economy was liberalized, India hasseen a tremendous growth of its capitalmarkets with close to 8,000 Initial PublicOfferings (IPOs), second only to the UnitedStates.

Capital Market Reforms

Over the years various reforms have beeninitiated and introduced in Capital Market inIndia to make it an instrument of economicdevelopment of the country. The salientfeatures of the reforms are discussed hereunder :

Initiatives for building investors confidence

• The improved disclosure standards,introduction of prudential norms, andsimplification of issue procedures

• Listing agreements of stock exchangesamended to require listed companies tofurnish annual statement to the exchangesshowing variations between financialprojections and projected utilization offunds in the offer document and actualFigures.

• SEBI has introduced a code ofadvertisement for public issues

• Clearing houses have been established bythe stock exchanges and all transactions aremandatorily settled through these clearinghouses and not directly between themembers, as was practiced earlier.


• India is one of the few countries to havestarted the screen based trading ofgovernment securities.

• India is one of the few countries to havestarted the Straight Through Processing(STP), which completely automates theprocess of order flow and clearing andsettlement on the stock exchanges

Electronic transactions

With technological development in the lastfew years , physical transactions have beenreduced. It saves money, time and makesinvesting safer and hassle free encouragingmore people to join the capital market.

Applications supported by blocked amount(ASBA)

To improve the efficiency of the issue processSEBI has introduced a new mode of paymentin public issues through book buildingwherein an application money remainsblocked in the bank account of the applicanttill allotment is finalized.

Introduction of uniform margin payment for allcategories of investors in public issues

In order to provide a level playing field forretail individual investors and noninstitutional investors vis-a-vis the QIBs, SEBIhas mandated that the margin collected shallbe uniform across all categories of investors.

Strengthening credit rating agency regulations

SEBI has issued guidelines for strengtheningCredit Rating Agency operations includingmandatory half yearly internal audit ,requirement of prior approval of SEBI forchanges in the status or constitution of CRAsEnhanced transparency and isclosurerequirements for CRAs.

PAN as the sole identification number

PAN has been made the sole identificationnumber for all transactions in securitiesmarket.

Equity Finance for the Small and MediumEnterprises (SMEs)

BSE, as an Exchange, is the first-one to seizethe initiative followed by NSE, both of themhave come up with their SME Exchanges toleverage their respective trading platforms forproviding equity financing option to SMEs

IPO grading

SEBI has made it compulsory for companiescoming out with IPOs of equity shares to gettheir IPOs graded by at least one credit ratingagency registered with SEBI .

Permitting Indian mutual funds to invest inoverseas securities

SEBI has fixed the aggregate ceiling foroverseas investments at US $ 5 billion. Withinthe overall limit of US $ 5 billion, mutual fundscan make overseas investments subject to amaximum of US $300 million per mutualfund.

New derivative products

Mini derivative contract on Index (Sensex andNifty) having a minimum contract size of Rs.1 lakh are available. SEBI has also permittedintroduction of volatility index on futures andoptions contracts.

Short selling

SEBI has permitted short selling byinstitutional investors and securities lendingand borrowing to support settlement of shortsales.

Investment options for Navaratna andMiniratna Public Sector Enterprises

The Navaratna and Miniratna Public SectorEnterprises have been allowed to invest inpublic sector mutual funds subject to thecondition that they would not invest more

Article


than 30% of the available surplus funds inequity mutual funds.

Mutual Funds migrate from commission basedsystem of remuneration to fee based system

SEBI has stipulated that no entry load shallbe applied for any mutual fund scheme andthe upfront commission to distributors will bepaid by the investor directly based on hisassessment of various factors including theservice rendered by the distributor.

Recommendations for further Capital Marketreforms

• Short sale restrictions must be removedcompletely for all players including theinstitutions. This is the best defense againstmarket manipulation.

• To achieve genuine investor protection, wemust empower the investors. The goalshould be to create a statutory frameworkunder which violation of any SEBI

Article

regulation or listing requirement gives theinvestor the statutory right to sue thecompany and its management.

• An effective and competitive securitieslending system needs to be put in place.

• It is necessary to broad base the derivativemarkets by allowing foreign and domesticinstitutions to operate more freely in thismarket.

The Indian capital market has undergonesignificant change in the last two decades. Ithas become efficient through use of modernday technology and proactive legislation. Ithas attracted significant global interest andhas managed to establish confidence of bothglobal and local investors. However, as theeconomy grows, so does its requirements.Change is a constant and therefore the Indiancapital markets also need to continue toevolve to ensure that it meets the current andemerging challenges.

ADVERTISEMENT FOR “NIRC-ICSI NEWSLETTER”

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S.N

O.

CIT

AT

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IS

SUE

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up

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.

CAPSULE DIGEST ON CASE LAWS– CS Peer Mehboob*

Article



NIRC ACTIVITIES

News From NIRC

NIRC organised the following programs:

Date

Program

Chief Guest(s)/Guest of Honour(s)/Speakers

Present

15.9.2015 Valedictory Function of 1st Residential MSOP

Mr. Ramesh Kaushik, Member of Parliament, Sonepat

CS Manish Gupta, , CS Dhananjay Shukla, CS Nitesh Sinha, CS S K Parashar, CS Alka Arora and participants

16.9.2015 Inauguration of 217th MSOP

CS Inder Mohan Singh, Director Legal & Corporate Secretarial (APAC), Honeywell International India

CS NPS Chawla, CS Manish Gupta, CS Dhananjay Shukla, CS Pradeep Debnath, CS Nitesh Sinha, Mr. S K Nagar, CS Alka Arora, and participants

19.9.2015 Study Sessions on Board Report under Companies Act, 2013

CS Manoj Bisht, Company Secretary, Reckitt Benckiser (India) Pvt. Ltd., Gurgaon

Members of the Institute

19.9.2015 HP State Conference (Host: Shimla Chapter) on “CS: Navigating the Future”

CS Ranjeet Pandey, CS S Koley, CS Siddharth Srivastava and CS Manish Khanna

CS Manish Aggarwal, CS Rajeev Bhambri, Members and students of the Institute

23.9.2015 Valedictory Function of 216th MSOP

Mr. Vijay Kumar Jhalani, Council Member-ICSI (Govt. Nominee)

CS Ranjeet Pandey, CS Nitesh Sinha, Mr. S K Nagar, CS Alka Arora and participants

25-26.9.2015 Two Day Annual Regional Conference on Contemporary Corporate Challenges & Emerging Professional Opportunities

CS Atul H Mehta, President-ICSI, CS Ilam Kamboj, Associate Vice President- Legal & Company Secretary, Hero MotoCorp Ltd.,CS Manvinder Singh, Partner, J Sagar Associates, CS Rajendra Chopra, Senior Vice-President & CS, Bharti Group, CS N K Jain, Former Secretary & CEO, ICSI, CS Vineet K Chaudhary, Council Member, ICSI & Chairman, Corporate Laws Committee, ICSI, CS Deepak Gupta, Executive Director, Pricewaterhouse Coopers, Dr.(CS) S Chandrasekaran, Company Secretary in Practice, CS U K Chaudhary, (Past President, ICSI) & Senior Advocate, Mr. Pavan Duggal, Advocate, Supreme Court of India, CA Bimal Jain, CS J K Mittal, Advocate, Mr. M.M. Sharma, Head Competition Law, Vaish Associates, Advocates, CS Venkat Rao, CS & AVP (Finance), Omaxe Ltd. and Dr. S K Gupta, Head Group Secretarial & Internal Audit, Spentex Industries Limited

CS NPS Chawla, CS Ranjeet Pandey, CS Satwinder Singh, CS Dhananjay Shukla, CS Pradeep Debnath, CS Amit Gupta, CS Saurabh Kalia, CS Pankaj Tandon, CS Suresh Kalra, CS Devender Kumar, CS Arun Gupta, Members and students of the Institute

1.10.2015 Study Session on Annual Return under Companies Act

CS Ravi Varma, Company Secretary, Texmaco Rail & Engineering Limited, Kolkata

CS Manish Gupta, cs Nitesh Sinha, CS Ashok Tyagi and members


"Paramjeet Singh, why are you looking so sad these days?"

"Because Diwali is coming."

"For that matter, you should be cheerful."

"Right you are.It is depressing due to this fact that despite me being so courteous and well

behaved throughout the year, I get gifts much less in number than my colleagues."

***************

"Why you are looking so depressed these days?"

"Because my senior is going on leave."

"How does it matter?"

"Because I get blamed for all the mistakes committed by him."

—CS PARAMJEET SINGH, [email protected]

Members may send their contribution for this column at e-mail [email protected] for publication in theNIRC Newsletter-Insight. Decision of the Editorial Board of Newsletter in this regard will be final.

LIGHTER SIDE OF THE PROFESSION

CAREER AWARENESS PROGRAMS

NIRC has organised 33 Career Awareness Programs during the month of September,

2015 in various schools & colleges located in Delhi and surrounding areas. The

students were apprised about the mode of registration in the course, syllabus,

structure of the course and also the avenues available after completion of the

Company Secretaryship Course both in employment and in practice.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Lighter Side of the Profession


CSBF

COMPANY SECRETARIES BENEVOLENT FUNDMEMBERS ENROLLED FROM NORTHERN REGION AS LIFE MEMBERS OF THE COMPANYSECRETARIES BENEVOLENT FUND DURING THE PERIOD 21/08/2015 TO 20/09/2015

S.No. Name Mem. No.

1. CS SANDEEP ASRANI ACS - 38049

2. CS ADITYA JAIN ACS - 40882

3. CS NITIN JAISWAL ACS - 29364

4. CS VIJAY KUMAR KATHURIA FCS - 3358

5. CS RAJEEV GOSWAMI ACS - 15080

6. CS HEERA LAL ACS - 29783

7. CS KHUSHBU GARG ACS - 41047

8. CS DIVESH GOYAL ACS - 35817

CHAPTERS OF NIRC-ICSI

Agra, Ajmer, Allahabad, Alwar,

Amritsar, Bareilly, Bhilwara,

Bikaner, Chandigarh, Dehradun,

Faridabad, Ghaziabad, Gurgaon,

Jaipur, Jalandhar, Jammu, Jodhpur,

Kanpur, Karnal-Panipat, Kota,

Lucknow, Ludhiana, Meerut,

Modinagar, Noida, Shimla, Sonepat,

Srinagar, Udaipur, Varanasi &

Yamuna Nagar.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

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○

○

○

○

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○

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○


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