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Volume

14

Issue

272 / 2022

January

2022

Quote of the day

"This is not the year to get everything we want. This is the year to appreciate everything we have."


आ नो भद्राः क्रतवो यन्तु विश्वतः” ||
"āno bhadra krtavo yantu vishwatah"

Drawn from the Rig Veda, this has universal truth and appeal. It urges us to test the validity of knowledge that is drawn from various sources. Today, there is a deluge of information and we are left grappling for truth in it. For me drawing wisdom from speakers who share their life experiences and challenges is a credible source – this January presented itself with plenty of such opportunities. Let me share a few nuggets:

From the inaugural & valedictory sessions of the 49th National Convention of Company Secretaries (CS) held at Bangalore from 6th to 8th January, 2022:

  1. Basavaraj Bommai, Hon’ble CM of Karnataka - CS must move from being a spectator to game-changer.

    • Economy is all about activity and less about finance. Look at it from the perspective of artha shastra and purushartha – man should have job or activity or work or artha which will bring well being to family and society. Arthashasthra is important for society and purushartha for self improvement and goal.

    • Economics is not all about profit & loss (P&L), goals & growth. At the same time philosophy is not all about paapa and punya (P&P). As a student of both, I see it paradoxically. I see P&L in philosophy and P&P in economics. This is the exact job of CS where you need to ensure that activities are brought into framework of law and guiding principles are taken forward. See P&P in economics your role, status, thinking and importance will change.

    • How does importance come to you ? if everything is in order, what role do you have ? Your role as CS thrives on ambiguity and uncertainty. Embrace the VUCA world (Volatility, Uncertainty, Complexity, Ambiguity) for volatility indicates energy, fluidity, motion, growth & dynamism. Status quoist will never grow.

    • CS must have a say in the economy and country, not just corporates. Raise your voice, address issues, be part of problem as well as solution. You are part of the economy but economy must also be part of you. Be part of development, solution, and not a mere spectator.

    • Make your own path, be part of history or create history. Choice is yours. Change in you will bring change in companies, change in companies will bring change in economy and change in economy will bring change in life of a common man. You are not connected only to companies and bosses. Connect to society through your companies. Efficiency of last man will bring success to top man. If last man survives, company survives. Same with the country. Be a game-changer not just a compliance officer.

  2. Smriti Irani, Union Minister for Women & Child Development – My ask of you as a citizen

    • When your organisation chances upon good accounting, chances upon HR corporate practices or innovation, can you share with smaller organisations ? Can you share with the unorganised sector ? How can the learnings of big organisations transcend to smaller ones ? That is your dharma.

    • Dharma teaches us to be forward looking. Greatest instrument is technology. Those who have don’t use amply by sharing. Those who don’t have feel its absence because of lack of resources. As CS can you reach out with technology down to those who you presume don’t need it ? Can your cleaning staff be digitally literate ? Digital India was launched when there was no pandemic. Remember, leadership prepares you not only for present but preps you for future that is yet unseen.

    • To fuel innovation, fuel jigyansa is not only corporate dharma but also of society. Can we support R&D in non-core areas, supply chain of essentials ? Can we partake in R&D of not only company’s interest but also look at societal and national means ?

    • Truth need not be measured but be spoken without fear. Be true to yourself, to your values and principles that represent institutional ethos. That is true contribution to nation building.

  3. J. Swaminathan, MD, SBI – commandments for CS (true for other professionals too)

    • culture of continuous learning, reskilling, upskilling,

    • culture of compliance, living by right practices through thought and action

    • culture of communication, speak up when required

    • culture of building resilience in organisation in volatile times, culture of sustainability & ESG

    • processes are as important as outcomes, adhere to the same, avoid tick-box approach

    • adopt digitalisation

    • live upto regulatory expectations and not just guidelines, anticipate and manage the expectations as an industry leader

  4. Swami Veereshananda Saraswati of Vivekananda Ashrama : character building for governance

    • Life is short, they alone live who live for others. Rest are dead.

    • Bahujana hitaya, bahujana sukhaya (for the benefit of many, for the happiness of many)

    • Progress achieved in many areas has become useless because of loss of character. Dams are built but men are brittle.

    • Physical bravery is mere animal instinct. Moral bravery is true courage.

These are from the notes I took as I had the opportunity to anchor the respective sessions but attending live is a totally different experience. Some of the asks require deeper deliberation on each of our roles as catalysts for Good Governance : the Universal Dharma (theme of the convention).

This first issue of 2022, the 272nd in our Samhita series over the last 13 years continues to be a pot pourri of regulatory updates from various ministries, a wise thought to go with the theme, a statutory calendar for Feb, 2022 and of course the useful English language tips from Balaji Ramaswamy, a language expert – hope you spare some time for this, as we wait for the Budget 2022 blast next week from the Finance Ministry.

For any previous issues of Samhita and the readers’ feedback, please visit https://sharadasc.com/resource-center/.


Happy Reading,

S.C. Sharada

Tip 1:

Let's be generous in appreciation. Here are some of the phrases/expressions we can use to appreciate people on EMails/calls

Thanks a lot for your quick reply.

Thank you so much for getting back to me swiftly.

I couldn't thank you enough for all the help.

Thank you so much for making all the arrangements just the way I wanted. It was much easier for me to focus on my work. I really appreciate your efforts.

Thank you for giving us an amazing experience. I really enjoyed the training.

It was a pleasure meeting all of you. You are a great team. I am looking forward to meeting you again/working with you again.

Tip 2:

Vocabulary for follow up calls:

I'm calling you about the Email I sent to you regarding...

I wondered if you had the time to...

I wanted to see if you are still interested in......

Tip 3:

Responding to follow up calls:

Yes. I remember. I was about to get back to you.

I am awaiting a response from one of my colleagues. I sent a reminder to them a few minutes ago. I will get back to you soon. Thank you for your patience

Your proposal is under consideration. I would really appreciate it if you could give us some time to get back to you. Thank you.

Balaji Ramaswamy N
Mobile: 9741393539

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Reminders for Payments & Returns

Regulatory Updates

MCA Updates

Applicability of higher additional fee

Vide notification dated 11.01.2022, MCA notified the effective date for the third proviso added to Section 403(1) vide the Companies (Amendment) Act, 2017, which prescribed the applicability of higher additional fee in case of default in filing of forms in 2 or more occasions and the applicability of higher additional fee in case of 2 or more defaults pursuant to the Companies (Amendment) Act, 2020, as 01.07.2022.

Open Notification No. S.O. 147(E) dtd. 11.01.2022

Open Notification No. S.O. 148(E) dtd. 11.01.2022

Higher additional fees for delayed filing of Forms w.e.f. 01.07.2022

MCA vide notification dated 11.01.2022, notified the Companies (Registration Offices and Fees) Amendment Rules, 2022 (“Amendment Rules”). These rules provide for a ‘Higher Additional fee’ applicable for belated filing of forms with a few exceptions. These Rules shall come into force on 01.07.2022. Highlights of the Amendment Rules are as follows:

  • The higher additional fees shall not apply to belated filing of forms required to be filed for increase in nominal share capital, forms required to be filed pursuant to Sections 92 (Annual Return) & 137 (Financial statements) of Companies Act, 2013 and charge forms.

  • The prescribed higher additional fees are as follows:

  • The higher additional fees shall be applicable to belated filing of e-Form INC 22 (Notice of situation or change of situation of registered office) and e-Form PAS-3 (Return of Allotment) where there is a delay in filing in 2 or more occasions within a period of 365 days from last delayed filing.

  • Wherever higher additional fee is applicable, additional fee which is otherwise applicable shall not be charged.

  • Forms PAS-3 and INC-22 filed prior to 01.07.2022 shall not be considered for the higher additional fee criteria.


Open Notification No. G.S.R. 12(E) dtd 11.01.2022

SEBI Updates

Formats for RPT disclosures for high value debt listed entities

SEBI vide circular dated 09.11.2021 mandated listed entities that have listed specified securities to submit to the stock exchanges disclosure of Related Party Transactions (RPTs) in the format specified by the Board from time to time. SEBI notified the applicable disclosure obligations vide Circular dated 22.11.2021.

Vide Circular dated 07.01.2022, SEBI has clarified that the disclosure obligations specified in the Circular dated 22.11.2021 shall also be applicable to high value debt listed entities with immediate effect.

Open Circular No. SEBI/HO/DDHS/DDHS_Div1/P/CIR/2022/0000000006 dtd. 07.01.2022

Compliance Certificate under ICDR can be issued by Practicing CS

Vide Notification dated 14.01.2022, SEBI notified the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2022 which further amended the ICDR Regulations. The amendment brought about recognition to Practicing Company Secretaries as a competent authority to issue Compliance Certificate (pursuant to Regulation 163) certifying that the proposed preferential issue is in accordance with the requirements of ICDR Regulations.

Open Amendment Regulations dtd.14.01.2022

Amendments to LODR Regulations

SEBI has notified the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2022 vide notification dated 24.01.2022 which has further amended the LODR Regulations, 2015.

Highlights of the amendment are as follows:

  • Shareholders’ approval for appointment of Manager – Approval of the shareholders is now required for the appointment of Manager. The approval needs to be taken in the next General Meeting or within 3 months from date of appointment, whichever is earlier.

  • Appointment / reappointment of MD, WTD, Manager – appointment or re-appointment of a Managing Director or a Whole-Time Director or a Manager, whose appointment / reappointment was earlier rejected by the shareholders at a general meeting, will require prior approval of shareholders. The Explanatory statement to notice for approval of such appointment or reappointment shall consist of detailed explanation and justification from the NRC and the Board.

  • Statement by monitoring agency – to be submitted quarterly as against earlier requirement of annual basis.

  • Transfer and transmission requests- processed only for securities held in Dematerialised form.


Open Amended Regulations

DGFT Updates

De-activation of IECs not updated

All IEC holders were required to update their details online on the DGFT Portal every year during the April – June quarter. On requests made, the period for updating details was extended till 31.08.2021. Any IECs not updated post this date were intimated to be de-activated in a phased manner by DGFT.

Vide Trade Notice dated 14.01.2022, DGFT has intimated that all IECs which have not been updated after 01.07.2020 shall be de-activated with effect from 01.02.2022. The list of such IECs to be de-activated IECs is available on the
Portal. The concerned IEC holders have been provided an opportunity to update their IEC in this interim period till 31.01.2022, failing which the given IECs shall be de-activated from 01.02.2022.

IECs so de-activated may be re-activated by updating the details online on the DGFT Portal.

Open Trade Notice No. 31/2021-22 dtd. 14.01.2022

IT Updates

Computation of Capital Gains under section 45(1B) of Income Tax Act related to ULIP

Vide notification dated 18.02.2022, CBDT has inserted Rule 8AD in the Income-Tax Rules 1962 which contains provisions for computation of Capital Gains under section 45(1B) of Income Tax Act related to ULIP which is not exempt under Section 10(10D).

8AD Computation of capital gains for the purposes of sub-section (1B) of section 45- (1) Where any person receives at any time during any previous year any amount under a specified unit linked insurance policy, including the amount allocated by way of bonus on such policy, then,

  • Amount received for the first time:
    Capital gain =Amount received for the first time including bonus MINUS aggregate premium paid till date of such receipt

  • Amount received after above period:
    Capital Gain = Amount received after period specified in (i) above including by way of bonus MINUS the aggregate of premium paid until receipt of amount under (ii) as reduced by any by the premium that has already been considered for calculation of taxable amount under this sub-rule during the earlier previous year or years.

    The capital gains as computed under clause (i) or clause (ii) of sub-rule (1) shall be deemed to be the capital gains arising from the transfer of a unit of an equity oriented fund set up under a scheme of an insurance company comprising unit linked insurance policies.

Open CBDT Notification No. 8/2022 dtd 18.01.2022

E-advance rulings by Board for Advance Rulings

The Board for Advance Rulings shall pronounce e-advance rulings of applications allocated or transferred to it in accordance with the provisions of this Scheme. The Board for Advance Rulings shall have such other income-tax Authority, ministerial staff, executive or consultant to assist the members of the Board for Advance Rulings, as considered necessary by the Central Board of Direct Taxes.

Please refer to Notification for detailed procedure.

Open CBDT Notification No. 07/2022 dtd 18.01.2022

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.