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275 / 2022



Quote of the day

"Reading is sowing. Rereading is the harvest."

- Johnny Uzan

"Reading a book gives us the habit of solitary, reflection and enjoyment." Said Dr. Sarvepalli Radhakrishnan, former President of India. While this is true, the reflection can also spur some meaningful action and stir a few emotions.

I am tempted to travel back in time machine when my 2nd born was just 5 years old. Famously nick-named Koramangala Rowdy from his play-school days, one incident opened up the heartful softer side of him. In 2004 I had taken a sabbatical from my job to pursue an executive management programme from IIM, Bangalore. One night as I returned from IIMB after a long day at the course, I saw my son already asleep (or I thought so !). Felt terribly guilty for reaching home late. Remorsefully, I whispered into his ears “Chinnu, I am so sorry. I am not spending enough time with you. Just a few more weeks and the course is over”. Suddenly, he woke up, his eyes brightly lit and flashed a million-dollar smile at me. He then thrust his English reader into my hand. Hugging me tightly, he insisted that he read a story to me. Yes, you read it right. He read a story to me and not the other way round. I was dead tired and was in no mood to listen but how could I refuse a child offering to read from his book ? This is how he concluded his reading “Amma, don’t feel bad. Do you know the moral of this Juno the Monkey story ? Mother’s love has no equal. I know you also love me so much”. Well, I still remember that poignant moment, the heart-felt love that poured out of my 5 yr old like a volcano. This was the boy I thought was not friends with books !

Let me travel back even further into the time machine. When I was a child. I distinctly remember how my mother would read out from books and magazines. Every night we would get to hear bedtime stories from her, as we siblings would jostle for space next to her to feel her cosiness and affection. There were no separate bed rooms nor cots back then. It was simple beds rolled out on the floor with all of us sleeping next to each other in the same room. Ma would read out serial stories and comic strips from the Kannada magazines Sudha, Taranga, Mayura. Kathas and upa-kathas (sub-stories) from our epics Ramayana and Mahabharata, about Akbar & Birbal, about Tenali, about our freedom struggle, from Munshi Premchand’s Hindi novels, Kabir & Rahim’s dohas……oh, what a rich tapestry she would paint. It would be so engrossing that our owner’s only daughter would eavesdrop from her window and listen to her silently. Even now she says, “I envy your childhood. What a lovely, intelligent and caring mother you had.

I am compelled to travel back to times that I wasn’t even born. Yes, to my grandmother’s younger days. My maternal grandmother was a 4th class drop-out, as most girls back in the days were – married off as a child and turned into a ‘reproduction-machine’ (pardon me for saying that but what else if someone had birthed 8 children with a few others dead in a span of 12 to 14 years !). Despite a gruelling time raising so many children, my mother used to say, Ajji was very fond of books and reading. She wasn’t schooled for long but she was very knowledgeable and had a flair for writing. With very meagre resources, unable to buy books she would quench her thirst for reading while sweeping the house. My mother used to recall how Ajji would carefully collect, piece together and even out wrinkled and torn newspapers and magazine covers, in which groceries and other stuff would be packed. Amidst the cleaning, she would be lost in reading from the fragmented pieces of paper. Perhaps she learnt to dissolve her drudgery by immersing herself into reading, which was her passion !

My husband also vouches for his vast knowledge about history, epics and mythology from his grandmother, who again a 4th class drop out was a voracious reader of books. The best part in those days was the reading-out-loud habit which would create a bonding while learning. In 1995, UNESCO decided that the World Book and Copyright Day would be celebrated on 23 April, as the date is also the anniversary of the death of William Shakespeare as well as that of the birth or death of several other prominent authors. Well, lets continue to promote reading from books before they become objects of novelty and curiosity as in the picture collage 😊

Cutting to the present times, I must admit as professionals we have been facing harrowing times working on the new MCA V3 portal, for LLPs. For more than 2 months, LLP registrations have come to a halt with several unresolved technical glitches. One of my frustrated clients has now decided to abandon chasing the LLP and instead moving either to a normal partnership firm or a private limited company. It is time the MCA ‘LISTENS’ like the IT department did last year and puts its house in order ! For the sake of entrepreneurship, minimum government and maximum governance and the much-touted Ease of Doing Business. This apart, there were several regulatory updates in April, 2022 which find place in this 275th issue of Samhita, along with the regular features Statutory Calendar and Lets Excel in English. For any previous issues of Samhita and the readers’ feedback, please visit http://www.sharadasc.com/resource-center/.

Happy Reading,

S.C. Sharada

Tip 1:

Vocabulary to speak about advantages/ good aspects of any entity

The best part about __________ is ..........

The greatest advantage of........ is .........

The most attractive feature/factor is............

The pulling factor is..........


The best part about recorded courses is that it is not time bound

The greatest advantage of XYZ option is that it eliminates the need for other marketing campaigns

The most attractive factor in that we don't have to spend on real estate

The pulling factor in the system is it's simplicity

Tip 2:

Vocabulary to talk about the disadvantages

The major challenge with.......

The biggest disadvantage is that....

The only issue with....


The major challenge with this process is that it is time consuming

The biggest disadvantage is that it is expensive

The only issue with the ABC option is that it may not be reliable in bad weather.

Balaji Ramaswamy N
Mobile: 9741393539

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Reminders for Payments & Returns

Regulatory Updates

MCA Updates

Personal information from Registers and Return made unavailable for inspection and extracts

Vide Notification dated 06.04.2022, MCA has notified that the following details of members from the Registers, Index and Return shall not be made available for inspection or for taking extracts:

Address or registered address (in case of a bodies corporate)

  • E-mail id

  • Unique Identification Number

  • PAN

Open Notification No. G.S.R. 279(E) dtd.06.04.2022

Extension of due date – CSR-2 and implementation of accounting software with audit trail

Vide MCA Notification dated 31.03.2022, following due dates were extended:

Nidhi (Amendment) Rules, 2022

Companies Act, 2013 defines a Nidhi Company as - "Nidhi" means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with the rules made by the Central Government for regulation of such class of companies.

Nidhi Companies are well known for their quick financial services with minimum formalities. Owing to their growing popularity, MCA felt the need to ensure that companies desirous of carrying on business as a Nidhi do so by taking necessary approvals from the Central Government. In line with the same a stricter framework has been introduced vide the Nidhi (Amendment) Rules, 2022 notified on 19.04.2022.

Highlights of the amendments are as follows:

  • A Public Company incorporated as a Nidhi needs to get itself declared as a Nidhi by the Central Government by applying in Form NDH-4 within a period of 120 days of incorporation subject to fulfilment of following criteria:

      1. Minimum of 200 members

      2. *Share capital of Rs. 10 lakhs (increased from 5 lakhs)

      3. *Net Owned Funds of Rs. 20 lakhs (increased from 10 lakhs)

  • Without such approval the Nidhi cannot raise Deposits and if raised they will have to comply with the provisions of Chapter V – Acceptance of Deposits by Companies.

In this regard the Press Release by MCA read – “to safeguard the interest of general public, it has become imperative that before becoming its member, one must ensure declaration of a company as a Nidhi by the Central Government

*Existing Nidhi Companies must meet the thresholds within 18 months from Notification of the said Rules dated 19.04.2022.

  • The Promoters and Directors of the company have to meet the criteria of fit and proper person as laid down in the Rules.

  • Nidhi Companies cannot file Forms SH-7 (Notice to Registrar of any alteration of share capital) or PAS-3 (Return on Allotment) unless Form 20A (Commencement of Business) has been filed. In order to be able to file Form INC-20A, Form NDH-4 must have been filed and approved.

  • Nidhi Companies cannot acquire or purchase securities of any other company or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management. Earlier the same was allowed through Special Resolution and approval from RD.

  • Nidhi Companies cannot raise loans from banks or financial institutions or any other source for the purpose of advancing loans to members.

  • Stricter requirements for opening and closing of Branch Offices.

  • Requirement of Regional Director’s approval for declaration of dividend has been done away with.

  • For timely disposal, it has also been provided in amended Rules that in case no decision is conveyed by the Central Government within 45 days of the receipt of applications filed by companies in form NDH-4, approval would be deemed as granted. This would apply for such companies which shall be incorporated after Nidhi (Amendment) Rules, 2022.

Open Nidhi (Amendment) Rules, 2022

Banking Companies exempted u/s 77 from filing Form CHG-1 in certain cases

Through MCA notification dated 27.04.2022, Banking Companies have been exempted from the requirement to file Form CHG-1 for creation/modification of charge for any loans borrowed or advances taken from RBI repayable on demand or on expiry of specified time period pursuant to RBI Act, 1934.

Open Notification No. G.S.R. 320(E) dtd.27.04.2022

RBI Updates

Guidelines on LEI – applicability revised

Vide notification dated 21.04.2022, applicability of guidelines on Legal Entity Identifier (LEI) has been revised as follows:

  • Applicability of guidelines on Legal Entity Identifier (LEI) extended to Primary (Urban) Co-operative Banks (UCBs) and Non-Banking Financial Companies (NBFCs.)

  • Non-individual borrowers enjoying aggregate exposure of 5 crore and above from banks and financial institutions are now advised to obtain LEI codes.

  • Borrowers who fail to obtain LEI codes shall not be sanctioned any new exposure nor shall they be granted renewal/enhancement of any existing exposure.

Open Notification No. RBI/2022-23/34 dtd.21.04.2022

SEBI Updates

Clarification on validity of omnibus shareholders’ approval for material RPTs under LODR

Pursuant to SEBI LODR Regulations approval of the shareholders is required in addition to the Audit Committee’s (AC) approval, for material Related Party Transactions. Reg. 23(3)(e) of LODR specifies that the omnibus approval granted by the AC shall be valid for a period 1 year and fresh approvals shall be required thereafter.

As under Companies Act, 2013, companies are required to hold an AGM every year and not more than 15 months shall have lapsed between 2 consecutive AGMs, stakeholders made representations to SEBI to seek clarity on the validity of the omnibus approval where the transactions are material and shareholders approval is also required.

Vide Circular dated 08.04.2022, SEBI has clarified the same as follows:

  • Approval in AGM – Omnibus approval shall be valid upto the date of the next AGM for a period not exceeding 15 months.

  • Approval in EGM – Omnibus approval shall be valid for 1 year.

Open Circular No. SEBI/HO/CFD/CMD1/CIR/P/2022/47 dtd.08.04.2022

“Asset Cover” replaced with “Security Cover” under LODR

Vide Notification dated 11.04.2022, SEBI has notified following amendments to SEBI LODR Regulations:

  • In Reg. 54 the words “Asset Cover” shall be replaced with “Security Cover”.

  • Issuer of Secured Non-Convertible Debt Securities shall ensure that the Security Cover is sufficient to discharge the principal and interest amount. Earlier, the asset cover was required to cover only the principal amount.

Open Notification No. SEBI/LAD-NRO/GN/2022/79 dtd.11.04.2022

Clarification on RPT by NSE

The NSE has released FAQs dated 24.04.2022 clarifying various aspects of Related Party Transactions (RPT) under SEBI Circular dated 22.11.2022 titled “Disclosure obligations of listed entities in relation to Related Party Transactions” which had tightened the reporting norms.

Open FAQs dtd.22.04.2022

Revised procedure for transmission of shares

SEBI vide notification dated 25.04.2022, has made following amendments to SEBI LODR Regulations w.r.t. transmission of shares:

  • Regulation 40(7), 61(4) and Schedule VII of SEBI LODR Regulations shall now be applicable for transmission of securities as well. Earlier these Regulations were applicable to only transfers.

  • The list of documents to be submitted in case of transmission of securities in case of a single holder with / without nomination, has been detailed.

  • Documents to be submitted for transmission of securities upto 5 lakhs for securities held in physical mode and 15 lakhs in case of securities held in demat form, has been listed.

Open Amended LODR Regulations

IBBI Updates

Temporary surrender of professional membership - ceases to exist

Earlier an Insolvency Professional was allowed to temporarily surrender his membership. Vide clarification issued by IBBI on 11.04.2022, it was clarified the facility for temporary surrender of professional membership shall cease to exist.

This change was affected based on the Notification dated 23.07.2019 through which the “authorisation for assignment” concept was introduced in the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016.

Open Clarification dtd.11.04.2022

GST Updates

Details of reporting for ineligible, partially reported or reversal of ITC

All the taxpayers who have not furnished details of ineligible ITC or have furnished the details of ineligible ITC partially or have not reported the reversal of ITC fully or partially in the returns filed for the F.Y 2021-22 shall report it in the annual return to be filed in GSTR-9. However, for the F.Y 2022-23 onwards, the details of ineligible ITC or partial details of ineligible ITC or reversal of ITC which has not been reported fully or partially shall be reported in the subsequent GSTR-3B to be filed by giving net effect in that return.

Open Circular No. 1/2022 dtd.05.04.2022

Note: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. S. C. Sharada & Associates disclaims all liability on action taken without professional advice.