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284 / 2023



Quote of the day

"The Constitution is not a mere lawyer’s document, it is a vehicle of Life, and its spirit is always the spirit of Age."

- Dr. B R Ambedkar

The year 2023 has begun amidst the gloom of massive layoffs, downsizing, redundancies, by whatever name called. There is anger, anguish, dismay and despondency all around since the action is largely by the Corporate Biggies who had hired in hordes. However it is the small and medium enterprises that have braved the tough tides and bounced back time and again. I am sharing select thoughts gleaned from a talk I attended a couple of months ago by Indraneel Chitale, a 4th generation entrepreneur of a legacy Indian food business, Chitale Bandhu, that started in the pre-independence era.

“Leading family businesses in the age of disruption”

  • Legacy is a responsibility as well as a platform. Statistics speak ‐ 1st generation business 68% fails, 2nd generation 78 to 80% fails, 4th generation 98% fails.

  • Late Sri Bhaskar Ganesh Chithale started milk distribution in 1939 in Bhilwadi in Sangli district. Lost 300 cattle in 1 week. No electricity, no telephone ‐ how to preserve milk at that time was the question. Moved towards B2B milk products derivative distribution. Survival was the key !

  • Inspired by the independence movement and patriotism, sons joined the business to form Chithale Bandhu. Grown to 22 internal shareholders from the family across 4 generations.

  • 1970, milk packaging technology imported. 1st company to start pouch technology. 1980s ‐ started franchising, fruit processing ‐ ingredient supplier to pickles, sauces. Introduced machinery for different products to ensure standardisation at ingredient level. Foraying into new territories !

  • Backward integration with farmers through genetic semen-bull strategy - building an ecosystem!

  • Halwai or mithaiwala trap ‐ where do we fit in dilemma ? Data and science came in handy. Led to few machines and many products ‐ automation ensured that products taste the same everyday. Order & tracking system ‐ prioritising for what & how much to produce brought in efficiency.

  • Increased Tech use in Chitale - Cows to cloud, RFID tech intelligence to farmers that ensures transparency from ingredient to end product. Use of IOT ‐ Farm to fork, 500 data points, 3 locations, 2 states. Build patterns out of purchasing power data & AI prediction to plan production, distribution and sales.

  • Brand should find place in customer’s pocket. Omnichannel presence across countries helped in pandemic.

  • Used Theory of Constraints in technology & distribution. Grew from 14k stores in 2014 to 2.5L stores currently. Giga factory ‐ ability to lift and shift.

  • Food is an emotional sale. Honour tradition. Cherish innovation. Add joy to every occasion of our consumer. Chithale tagline - maintain the sweetness of every relation. Watch this YouTube video for some heart rending communication.

A few catchy, wise words from the young head of Indraneel….

  • Vision without action is a day dream. Action without vision is a nightmare.

  • If you want to grow tall, dig deep.

  • Be an inspiration, maintain integrity (as 4th generation I should either grow or sell).

  • Ask for external help even in a family business.

  • Be compliant globally. Understand economics, policies, not politics alone.

  • Preserve values of delegation & trust. You cannot be everywhere. Have continuity through teams.

  • Business is a test match.

  • Leadership is a lifestyle-walk the talk. Own the talk. Live by it.

  • Honour diversity, agree to disagree.

  • Brand remains, family changes.

The most amusing one I have heard so far - “How should an entrepreneur be ‐ not a dying dinosaur. He should be like a cockroach ‐ resilient, relevant & persistent 😊

While you mull over the most-hated ’cockroach’, do scroll down to catch up with the regulatory updates for the month of January, 2023. The 284th issue carries the torrent of MCA notifications released last week along with a few from RBI, SEBI, GST. As always it is claimed that the en-masse changes are to promote ease of doing business but on an analysis of the e-forms, that is far from the truth. Amount of data being sought is ever increasing. So also the inconsistency between the Act, Rules and Forms. Not to mention the typo errors, numbering mistakes and lack of application of mind. Currently we professionals are trying to grapple with the changes even as it is ’business-as-usual’ for corporates who expect filings to be a smooth affair. Let me clarify that there is disruption and chaos all around on the MCA V3 portal. We need ‘Patience Capital’ in addition to People & Process, if we are to maintain our sanity !

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

Happy Reading,

S.C. Sharada


© Sudha Murthy

Review and Buy

Sudha Murty is an Indian Educator, Author and Philanthropist who is a chairperson of the Infosys Foundation. She is best known for her philanthropy and her contribution to literature in Kannada and English. She has created awareness about Leukoderma (also known as Vitiligo) disease through her novel ‘Mahashweta’. Leukoderma may not be painful or life-threatening, but the social stigma attached to it makes life a struggle for those who are affected. This may have a devastating impact on the self-confidence of the affected person. ‘Mahashweta’ is the inspirational story of courage in the face of betrayal and disappointment. Anupama, the soul character and the female protagonist of the novel takes on a journey as an imperfect and abandoned wife, thanks to a condition that depigmented not only her skin but also self-love and self-esteem.

She moves towards independence, identity, empowerment and happiness in her life, overcoming her insecurities. Life becomes much easier, happy, relieved when you accept who you are. The novel brings out the struggles, friendships and relationships of Anupama.

The novel encourages you to leave the old ways behind, create something new, open up, flourish in every moment and find yourself.

Suggested By: Anjali Bhat

S.C. Sharada & Associates,

Company Secretaries

Tip 1:

Agreements, Disagreements and purpose

When I visited a company to conduct a session, the house keeping staff seemed to have some disagreements when they were making arrangements for a training programme setting up the venue. I have seen staff arguing at many places. However, this seemed to be a little different. Members of the staff did agree and disagree with each other. They did it without losing focus on the intention and the purpose - They wanted the set up to be in a way that is suitable for the programme. Their focus continued to be on what kind of arrangement would help everybody in the programme see the screen, the board and each other. They could discuss, disagree, really think of what would work and make the arrangements accordingly. What's more, they were really a happy team. They were smiling. They were enthusiastic.

Could we pay attention to purpose rather than win arguments or prove we are right or agree unwillingly? I saw that it is possible.

Balaji Ramaswamy N
Mobile: 9741393539

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Regulatory Updates

News Summary

Karnataka Start-up Policy 2022-27

The Department of Electronics, IT, BT and S&T has released the Start up Policy 2022-27 ("the Policy"). The Policy is based on 9 Pillars and 7 objectives:

Among others, highlights of the Policy include:

  • To set up a 100 crores venture capital fund.

  • The Start up Policy 2022-27 aims at retaining the “Champion State” position by further increasing the number of high-growth start ups to 25,000 by 2027.

  • To set up 50 new-age innovation network (NAIN) centres, 35 in IT/electronics and 15 in bio-technology institutions of higher learning located outside Bengaluru Urban district to promote, support and encourage emerging clusters beyond Bengaluru.

Please refer to the Policy for details.

Open Karnataka Startup Policy

MCA Updates

Mega amendment notifications

MCA has notified various amendments vide Notifications dated January 19, 2023 and January 20, 2023. The Rules that were amended are as follows:

All above mentioned amendments shall take effect from January 23, 2023. The Notifications also list the Forms that shall replace the existing forms on MCA V3 portal.

A compilation of the highlights of the changes brought about by above mentioned notifications is available here.

15 days extension for filing and additional fee relaxation for 45 forms rolled out in MCA V3

MCA has announced the roll out of 45 forms on MCA V3 portal on January 23, 2023. The said 45 forms were not available for filing for the period January 7, 2023 to January 22, 2023.

Vide Circular dated January 9, 2023 MCA has notified that 15 days extension and relaxation of additional fee shall be granted for filing of these 45 forms due date for filing of which falls between January 7, 2023 and January 22, 2023.

Open General Circular No.01/2023 dated January 9, 2023

Form GNL-2 and MGT-14 can be physically submitted

MCA vide its Circular dated January 9, 2023 has permitted stakeholders to submit Form GNL-2 (filing of prospectus related documents) and Form MGT-14 (filing of resolutions relating to prospectus related documents) in physical mode during the period of migration of MCA from V2 to V3 i.e. January 7, 2023 to January 22, 2023. Stakeholders were required to submit an undertaking stating that the e-Form would be filed alongwith prescribed fees once the Form is made available on the portal. Payment of fee was not required at the physical submission stage.

Open General Circular No.02/2023 dated January 9, 2023

RBI Updates

Approval of Forms on FIRMS Portal – Mechanism changed

RBI vide circular dated January 4, 2023 has notified a revised system for approval of forms filed on the FIRMS portal. Highlights of the same are as follows:

    • Forms shall be auto acknowledged on filing and AD Bank shall verify the same within 5 working days

    • Subsequent filings can be made even if the form is pending for approval

    • For filings with delay of less than or equal to 3 years the AD Bank will approve the form and intimate the applicant the Late Submission Fee (LSF)

    • Once the LSF is paid to the Regional Office of RBI the status of the form will be updated on the portal

    • For forms with delay of more than 3 years the AD Bank shall approve the form subject to compounding.

The updated FIRMS User Manual containing the revised timelines is available on the FIRMS portal .

Open RBI Circular no. RBI/2022-23/160 dated January 4, 2023

Sovereign Green Bonds included under FAR

RBI in consultation with the Government of India introduced a separate channel called the ‘Fully Accessible Route’ (FAR), for non-resident investment in Government of India securities with effect from April 1, 2020. Eligible investors can invest in specified Government securities without any investment ceilings.

Vide Circular dated January 23, 2023, RBI has included Sovereign Green Bonds under the FAR channel.

Open RBI Circular no. RBI/2022-23/169 dated January 23, 2023

SEBI Updates

Extension of relaxation for sending hard copies of documents

SEBI vide Circular dated May 12, 2020 has relaxed the requirement under LODR relating to dispatching of hard copy of financial statements along with Board’s Report, Auditor’s Report and other documents required to be attached therewith to those shareholders who have not registered their email addresses with the company.

SEBI has issued Circular dated January 5, 2023 extending the relaxation of the said LODR Regulation till September 30, 2023. This is aligned with the MCA Circular dated December 28, 2022.

Similar relaxation was also granted for entities having listed Non-Convertible Securities vide Circular dated January 5, 2023 .

Open SEBI Circular No. SEBI/HO/CFD/PoD-2/P/CIR/2023/4 dated January 5, 2023

Amendments to LODR

SEBI has notified following amendments to LODR with immediate effect vide Notification dated January 17, 2023:

  • Reg 16 ‐ Definition of Senior Management amended to include functional heads.

  • Sub Reg 1C of Reg 17 ‐ Shareholders approval required for reappointment of Director or Manager at next general meeting or within 3 months from appointment (whichever is earlier) and approval required for public sector listed entities at the next AGM.

  • Schedule V ‐ additional disclosure in Corporate Governance Report on material subsidiary’s details.

Open Notification No. SEBI/LAD-NRO/GN/2023/117 dated January 17, 2023

Tax Update

Extension for compliances till March 31, 2023

The Central Board of Direct Taxes (CBDT) has vide Circular No. 12 of 2021 dated June 25, 2021 provided relaxation in respect of certain compliances to be made by taxpayers including inter alia investment, deposit, payment, acquisition, purchase, construction, or such other action, by whatever name called, for the purpose of claiming any exemption under the provisions contained in Section 54 to 54GB of the Income Tax Act, 1961.

By point 7 of the Circular, it was provided that the aforementioned compliances for which the last date of such compliance fell between April 01, 2021, to September 29, 2021 (both days inclusive), may be completed on or before September 30, 2021.

In view of the representations received CBDT has clarified that the above referred compliances to be made by the taxpayers for the purpose of claiming any exemption under the provisions contained in section 54 to 54GB of the Act, for which the last date of such compliance falls between April 01, 2021, to February 28, 2022 (both days inclusive), may be completed on or before March 31, 2023.

Open CBDT Circular No. 1 of 2023 dated January 6, 2023

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.

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