SEBI BOARD MEETING DATED 23rd June 2015

Highlights of SEBI Board meeting held on 23.06.2015:-

1. ASBA (Application Supported Blocked by Amount) now mandatory.

EFFECT:-
i. Post-issue timeline will reduce to  T+6 from T+12.
ii. No hassle of refunding excess money back to applicant.

2. Application forms can also be accepted by RTA & DPs now.

EFFECT:- Increased application centers.

3. Simplified framework for capital raising by technological start-ups and other companies through ITP (Institutional Trading Platform).

EFFECT:- Easier capital market access to technological startups.

4. Market capitalization of public shareholding of the issuer for Fast Track Issues (FTI) reduced to Rs. 1000 crore (in case of FPO) and Rs. 250 crore (in case of Right Issue).

5.  Changes proposed to encourage greater retail participation in OFS (Offer for Sale).

6. Re-classification of promoter shall be permitted subject to approval of shareholders in the general meeting.

7. Outgoing promoter can hold KMP position subject to specific approval of Shareholders and cannot
i. hold more than 10% shares.
ii. continue as KMP for more than 3 years in any case.

8. Existing promoters may be re-classified as public in case the company becomes professionally managed and does not have any identifiable promoter.

9. Net Issue proceeds pending utilization (for the stated objects) shall be deposited only in the Scheduled Commercial Banks now.

Source: SEBI. Website
http://www.sebi.gov.in/sebiweb/home/detail/31307/yes/PR-SEBI-Board-Meeting

Mgt 14 exemption

PRIVATE COMPANY:
“As the effective date of exemption notification applicable to private company is 05.06.2015 (thereby u will not be required to file resolutions passed under section 179(3)), u can hold board meeting on following important matters (few of them) on or after 05.06.2015 to avoid ROC filing:
- To borrow monies;
- To Invest the funds of the company;
- To grant loans or give guarantee or provide security in respect of loans;
- To approve financial statement and board’s report;
- To take note of disclosure of director’s interest and shareholding”

Resolution to intimation

List of Resolution for which MGT-14 requires to be filed

We have listed Resolutions in 3 Categories, for which Form MGT-14  is required to be filed with ROC-

1. Board Resolutions – Annexure A

2. Special Resolutions- Annexure B

3. Ordinary Resolutions- Annexure C

ANNEXURE- A-  LIST OF BOARD RESOLUTION REQUIRED TO BE FILE WITH ROC IN FORM MGT-14

S. No.
LIST OF BOARD RESOLUTION REQUIRED TO BE FILE WITH ROC IN FORM MGT-14
A.     
To issue securities, including debentures, whether in or outside India. (In case of shares issue of security means issue of Letter of Offer).
B.      
To Borrow Monies.(Borrow Money from any sources including Director)
C.      
To invest the funds of the Company.(Also follow provisions of Section 186)
D.     
To grant loans or give guarantee or provide security in respect of loans. (Also follow provisions of Section 186)
E.      
To approve financial statement and the Board’s report.
F.      
To appoint internal auditors.
G.     
To appoint Secretarial Auditor.
H.     
To appoint or remove key managerial personnel (KMP).{KMP includes (MD, WTD, CEO, CFO & CS)}
I.         
To make Political Contributions.
J.         
To make calls on shareholders in respect of money unpaid on their shares.
K.      
To authorize buy-back of securities under section 68.
L.       
To Diversify the business of the company.
M.    
To approve Amalgamation, Merger or Reconstruction.
N.     
Take over a company or Acquire a controlling or substantial stake in another company.
ANNEXURE- B- LIST OF SPECIAL RESOLUTION REQUIRED TO BE FILE WITH ROC IN FORM MGT-14

S. No.

LIST OF SPECIAL RESOLUTION REQUIRED TO BE FILE WITH ROC IN FORM MGT-14
A.     
Section – 8
For a company registered under Section- 8 to convert itself into a company of any other kind or alteration of its Memorandum or Articles.
B.      
Section – 12
Change of location of registered office in the same State outside the local limits of the city, town or village where it is situated.
C.      
Section – 13
Change of registered office from the jurisdiction of one Registrar to that of another Registrar in the same State.
D.     
Section – 14
Amendment of Articles of a private company for entrenchment of any provisions. (To be agreed to by all members in a private company).
E.      
Section – 14
Amendment of Articles of a public company for entrenchment of any Provisions.
F.      
Section – 13
Change in name of the company to be approved by special resolution.
G.     
Section – 13(8)
A company, which has raised money from public through Prospectus and still has any unutilized amount out of the money so raised, shall not Change its objects for which it raised the money through prospectus unless a special resolution is passed by the company.
H.     
Section – 27(1)
A company shall not, at any time, vary the terms of a contract referred to in the prospectus or objects for which the prospectus was issued, except subject to the approval of, or except subject to an authority given by the company in general meeting by way of special resolution.
I.         
Section – 271 (A)
A company may, after passing a special resolution in its general meeting, issue depository receipts in any foreign country in such manner, and subject to such conditions, as may be prescribed. (Section still not applicable).
J.         
Section – 48(1)
Where a share capital of the company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or by means of a special resolution passed at a separate meeting of the holders of the issued shares of that class.
K.      
Section – 62 (1) (c)
Private offer of securities requires approval of company by special resolution.
L.       
Section – 54
Issue of Sweat Equity Shares.
M.    
Section – 66 (1)
Reduction of Share Capital.
N.     
Section – 67(3)(b)
Special resolution for approving scheme for the purchase of fully-paid shares for the benefit of employees.
O.     
Section – 68 (2)(b)
Buy Back of Shares.
P.      
Section – 71 (1)
A company may issue debentures with an option to convert such debentures into shares, either wholly or partly at the time of redemption:

Provided that the issue of debentures with an option to convert such debentures into shares, wholly or partly, shall be approved by a special resolution passed at a general meeting.

Q.     
Section – 94
Keep registers at any other place in India.
R.      
Section – 149(10)
Re-appointment of Independent Director.
S.       
Section – 165(2)
Subject to the provisions of sub-section (1), the members of a company may, by special resolution, specify any lesser number of companies in which a director of the company may act as directors.

T.       
Section – 180(a)
to sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking of the company or where the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings.

U.     
Section – 180(b)
To invest otherwise in trust securities the amount of compensation received by it as a result of any merger or amalgamation.

V.      
Section – 180(c)
to borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital and free reserves, apart from temporary loans obtained from the company’s bankers in the Ordinary Course of Business.

W.    
Section – 180(d)
To remit, or give time for the repayment of, any debt due from a director.
X.      
Section – 185
For approving scheme for giving of loan to MD or WTD.
Y.      
Section – 186
Loan & Investment by company exceeding 60% of paid up share capital or 100% of free reserve.
Z.       
Section – 196
Appointment of a person as Managerial Personnel if, the age of Person is exceeding 70 year.
AA.                        
Schedule V
Remuneration to Managerial personnel if, profits of company are Inadequate.
BB. 
Section – 271 (1) (b)
Special Resolution for winding up of the company by Tribunal.
CC. 
Section – 271 (1) (b)
Special Resolution for winding up of company.
DD.                        
Rule 7(1) Chapter- I
Conversion of private company into One Person Company.
ANNEXURE- C –  LIST OF ORDINARY RESOLUTION REQUIRED TO BE FILE WITH ROC IN FORM MGT-14

S. No.

LIST OF ORDINARY RESOLUTION REQUIRED TO BE FILE WITH ROC IN FORM MGT-14
A.     
Section – 16
The company in general meeting shall pass an ordinary resolution for change of name on receipt of direction from the Central.
B.      
Section – 61
A company, if authorized by its Articles, by ordinary resolution, can increase or consolidate its capital or sub-divide or cancel shares not taken up.
C.      
Rule 12(6)
Approval of general meeting for issue of bonus shares
D.     
Section 73(2)
Approval of general meeting for inviting deposits from members.
E.      
Section – 152
Appointment of Director.
F.      
Section –
For consideration of accounts and directors report and report of auditors, declaration of dividend, appointment of director on place of who resign.
G.     
Section – 148(3)
Remuneration of Cost Auditor shall be fixed by an ordinary resolution at the general meeting
H.     
Section – 151
Appointment of a Director by small shareholders.
I.         
Section – 152
Appointment of Directors at the first general Meeting.
J.         
Section – 149
Appointment of independent Director.
K.      
Section – 152
Appointment of Director on being proposed by a member or other person with a deposit of rupees one lakh.

Digital locker

Central government has launched a scheme called DigiLocker.
Anyone having an Aadhar card can login to www.digilocker.gov.in and upload scanned copies of all the important documents like 10th marksheet, 12th marksheet, Graduation certificate, electricity bill, PAN, Driving License, Passport etc. So
whenever, you will need those documents (for verification by govt agencies while applying for any service etc), you can directly give your locker number and it is done! No more hassles of carrying those documents and tons of photocopies.

Please use it and share with friends
A very Practical step taken by Government.

Service tax judgment

Today's Judgement Update
Service Tax : Levy of Penalty u/s 76 - mandatory or any discretion is left with the authorities for imposing such penalty - no reason why the Authorities should depart from imposing such penalty as mandated by the provisions of the Act. - HC
Service Tax : Recoversy of service tax - Recovery before adjudication of upon the matter and fixed the quantum of service tax - the recovery which is being made that smacks with arbitrariness - recovery stayed - HC
Service Tax : Commercial Training and Coaching service - Valuation - Amount recovered towards expenses such as textbooks, uniform, medical check-up, insurance etc is not required to be included in the value of taxable services - Tri
Service Tax : Levy of penalty - keeping in view the amendments to the Notification 24/2004 which introduced changes in the definition of vocational training, a fair case is made out before us to hold that there was a reasonable cause for failure to deposit the service tax. - Tri
Service Tax : CENVAT Credit - Input Service Distributor (ISD) - There was no provision that the cenvat credit distributed by the Head Office as input service distributor should be in proportion to the turnover of the factories located at various places. Such restriction, was put after 31.3.2012. - Tri
Central Excise : Transfer of CENVAT Credit - Sale of manufacturing unit alongwith raw material and semi finished goods - It is permitted even to transfer the Cenvat credit to the buyer unit as well as transfer of stock of input - Transfer of credit allowed - Tri
Central Excise : Cenvat credit - Runner Mass in the nature of input or capital goods - Held as Input - Considering it is only a question of interpretation and there is no suppression involved in this case. Therefore, the demand is also hit by limitation. - Tri
Companies Law : Control of Yes Bank - Right to Nominate is not in the nature of a ‘contract of personal service’ and was not limited to the two individuals in question. There is no question of contextual repugnancy - It was unnecessary to include in the Articles a mere ‘right to suggest’; brute strength in shareholding and even mere shareholding would have done as well. It is the right to nominate - HC
Companies Law : The Articles of a company are to it very like what the Constitution is to citizens. Shareholders are truly ‘invested’ in the enterprise: not merely for making profits and earning dividends, but also with a view to ensure that their rights, enshrined in the Articles, are always protected - HC
Companies Law : Rectification in Register of Members - the technical points raised by the Petitioners as to the non-compliance of guidelines for "Good /Bad Delivery" by the Respondent No.1 Company, and non compliance of the Circular of Ministry of Company Affairs do not have much substance - CLB
Companies Law : Rectification in the Register of Members - Section 111 (4) of the Companies Act, 1956 - Shares transferred fraudulently - Doctrine of estoppel - Period of limitation - petitioner has not approached the CLB with clean hands and, therefore, she is not entitled to the reliefs sought for and the petition deserves to be dismissed - CLB
Income Tax : Rule 12 of the Income Tax Rules, 1962 - Now ITR-1 and ITR-4S can be filed where exempted income exceeds ₹ 5000 alongwith Salary Income or House Property Income or Income from Other Sources
Income Tax : Denial of deduction u/s 80IC - no merit in the claim of the assessee vis-à-vis deduction under section 80IC of the Act in respect of the interest received from HIMUDA, interest on IT refunds and award received from Government - however Foreign Exchange Fluctuation Gain we hold that the is directly linked to the business - Tri
Income Tax : The extra shift allowance has to be calculated on the basis of number of days in which the factory had worked for extra shift and not on the basis of individual plant/machinery working an extra shift - HC
Income Tax : Community development expenditure - business is not static and over a period of time, it would include within its fold the care and concern for the society at large which would result in a goodwill being created in its favour leading to better business - expenditure allowed - HC
Income Tax : Transfer pricing adjustment - ALP - selection of comparables - The risk undertaken and the assets employed by a software development company cannot be compared to a BPO company. - Tri
Income Tax : Rejection of books of accounts - Each year have to be examined independently based on facts and materials on record, because, the matter pertaining to rejection of books of accounts are factual issues, which need to be examined every year - Tri
Income Tax : Deduction u/s. 54F - construction of residential property - payment made to builder - construction was not complete in respect - No condition that it should be occupied within the stipulated period - there is no requirement regarding registration and valid title, as a condition for availing exemption u/s. 54F(1) - Tri
Income Tax : Addition on capital gain - invocation of provisions of section 50C - Joint Venture (JV) Since the assessee has not received any consideration in lieu of any transfer of the capital asset, there is no question of any capital gain in the hands of the assessee. Whatever capital gain has arisen, it is only in the hands of Methodist Church in India and not in the hands of the assessee. - Tri
Income Tax : Income from the house property - premises used for the purposes of the business in which he was a partner - annual value is to be determined as per the provisions of section 23(1)(a) being applicable for self-occupied property - rent received in preceding years anyway has no direct relevance in computation of annual value - tri                                         Regards,                                                       Meetesh Shiroya

Types of directors

Types of directors

1. Definition:- As per Section 2(34) of Companies Act 2013 Director means a director appointed to the Board of a Company.2. Responsibility:- The board of directors of a company is primarily responsible for:

i. determining the company’s strategic objectives and policies;
ii. monitoring progress towards achieving the objectives and policies;
iii. appointing senior management;
iv. accounting for the company’s activities to relevant parties, e.g. shareholders.

3. Minimum Directors Required in Company:-

i. One Person Company:- One Director.
ii. Private Limited Company:- Two Directors.
iii.Public Limited Company:- Three Directors.

Maximum 15 directors can be appointed in any format of Company (OPC, Public, Private). Bypassing Special Resolution Company can increase the number of Directors beyond 15. Out of appointed directors one director should be resident in India for more than 182 days in previous calendar year.

iv. Types of Directors:-

1. Residential Director:- As per Section 149(3) of Companies Act,2013 every company shall at one director who has stayed in India for a total Period of not less than 182 days in the Previous calendar year.

2. Independent Director:- As per section 149(6) an independent director in relation to a company, means a director other than a Managing Director, Whole Time Director Or Nominee Director. Companies which have to appoint Independent Director:- As per Rule 4 of Companies (Appointment and Qualification of Directors) Rules,2013 the following class of companies have to appoint atleast two independent directors:-

A} Public Companies having Paidup Share Capital-Rs.10 Crores or More;

B} Public Compnies having Turnover- Rs.100 Crores or More;

C} Public Companies have total outstanding loans, debenture and deposits of Rs. 50 Crores or More.

Person Qualified for Independent Directorship:-

A) Who, in the opinion of the Board , is a person of integrity and possesses relevant experties & experience;

B) i) Who is or was not a promoter of the Company or its Holding, Subsidiary or Associate Company(HSA Companies);

ii) Who is not related to Promoters or directors in the company, its HSA companies;

C) Who has or had no Pecuniary (relating to Money) relationship with Company and its HSA company or their promoters, directors during the 2 immediately preceding financial years or during the current financial year;

D) none of whose relatives has or had pecuniary relationship with company, its HSA company or their Promoters, directors -amounting to 2% or more of its gross turnover or total income; -or fifty lakhs or such higher amount as may be prescibed, whichever is lower. During the 2 immediately preceding financial years or during current financial year.

E) Who neither himself nor any of his relative-

1. holds or has held the position of KMP or has been employee of the Company or its HSA companies in any of the 3 financial years;

2.he or his relative  has an employee or proprietor or a partner in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed- as a auditor firm, Company Secretary in practice, Cost Auditor, Legal Consultant of the company or its HSA companies;

3. Holds with relaives 2% or more of the total voting power of the Company;

4. he or his has not be Chief Executive or Director of any Non Profit Organization that receive 25% of its receipt from the Company or HSA Companies or its Promoters or directors or that NGO holds 2% or more of the total voting power of the Company.

F) Who possesses such other qualification as may be prescribed. Tenure of Director:- an independent director hold office for a term up to 5 consecutive years, -Also eligible for reappointment by passing Special Resolution and also require its reappointment in Boards Report. -He shall not hold office for more than 2 Consecutive terms, but shall not be eligible to appoint after expiration of 3 Years of ceasing to become an independent director. Remuneration to Independent Director:- An independent director shall not be eligible for any stock option as per section 149(9) of Act. But they may receive remuneration by way of fee provided under section 197(5) of the Act. Sitting fees for Board meeting and other committee meeting shall not be exceed Rs. 1,00,000 per meeting.

3. Small Shareholders Directors:- A listed Company may have one director elected by small shareholders. May appoint upon notice of not less than 1000 Shareholders or 1/10th of the total shareholders, whichever is lower have a small shareholder director which elected form small shareholder.  

4. Women Director:- As per Section 149 (1) (a) second proviso requires certain categories of companies to have At Least One Woman director on the board. Such companies are any listed company, and any public company having-

i. Paid Up Capital of Rs. 100 crore or more, or

ii. Turnover of Rs. 300 crore or more.

5. Additional Directors: Any Individual can be appointed as Additional Directors by a company under section 161(1) of the New Act.

6. Alternate Directors:- As per Section 161(2) A company May appoint, if the articles confer such power on company or a resolution is passed (if an Director is absentfrom India for atleast three months).

a. An alternate Director cannot hold the office longer than the term of the Director in whose place he has been appointed.

b. Additionally, he will have to vacate the office, if and when the original Director returns to India.

c. Any alteration in the term of office made during the absence of the original Director will apply to the original Director and not to the Alternate Director.

7. Shadow Director:- A person, who is not appointed to the Board, but on whose directions the Board is accustomed to act, is liable as a Director of the company, unless he or she is giving advice in his or her professional capacity.

8. Nominee Directors:- They can be appointed by certain shareholders, third parties through contracts, lending public financial institutions or banks, or by the Central Government in case of oppression or mismanagement.

9. Difference Between Executive and Non-Executive Director:- An Executive Director can be either a Whole-time Director of the company (i.e., one who devotes his whole time of working hours to the company and has a significant personal interest in the company as his source of income), or a Managing Director (i.e., one who is employed by the company as such and has substantial powers of management over the affairs of the company subject to the superintendence, direction and control of the Board). In contrast, a non-executive Director is a Director who is neither a Whole-time Director nor a Managing Director.

FDI IN REAL ESTATE SECTOR

FEM (TRANSFER OR ISSUE OF SECURITY BY A PERSON RESIDENT OUTSIDE INDIA) (SIXTEENTH AMENDMENT) REGULATIONS, 2014 - AMENDMENT IN SCHEDULE 1
NOTIFICATION NO.FEMA.329/2014-RB/GSR 906(E), 2014- 12 -8
In exercise of the powers conferred by clause (b) of sub-section (3) of section 6 and section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (Notification No. FEMA. 20/2000-RB, dated 3rd May 2000), namely:—
1. Short title and Commencement
(i)   These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) (Sixteenth Amendment) Regulations, 2014.
(ii)   They shall be deemed to have come into force from December 3, 2014.@
2. Amendment of Schedule 1
In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (Notification No. FEMA 20/2000-RB, dated 3rd May 2000), in the existing Annex B, for the existing entry 11, 11.1 and 11.2, the following shall be substituted, namely:—
Sl. No. Sector/Activity % of Equity/ FDI Cap Entry Route
11 Construction Development: Townships, Housing, Built-up infrastructure
11.1 Construction-development projects (which would include development of townships, construction of residential/commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships) 100% Automatic
11.2
Investment will be subject to the following conditions:
(A)   Minimum area to be developed under each project would be as under:
i.   In case of development of serviced plots, no minimum land area requirement.
ii.   in case of construction-development projects, a minimum floor area of 20,000 sq. meter.
(B)   Investee company will be required to bring minimum FDI of US$ 5 million within six months of commencement of the project. The commencement of the project will be the date of approval of the building plan/layout plan by the relevant statutory authority. Subsequent tranches of FDI can be brought till the period of ten years from the commencement of the project or before the completion of project, whichever expires earlier.
(C)   (i) The investor will be permitted to exit on completion of the project or after development of trunk infrastructure i.e. roads, water supply, street lighting, drainage and sewerage.
  (ii) The Government may, in view of facts and circumstances of a case, permit repatriation of FDI or transfer of stake by one non-resident investor to another non-resident investor, before the completion of project. These proposals will be considered by FIPB on case to case basis inter alia with specific reference to Note (i).
(D)   The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government/Municipal/Local Body concerned.
(E)   The Indian investee company will be permitted to sell only developed plots. For the purposes of this policy "developed plots" will mean plots where trunk infrastructure i.e. roads, water supply, street lighting, drainage and sewerage, have been made available.
(F)   The Indian investee company shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/bye-laws/regulations of the State Government/Municipal/Local Body concerned.
(G)   The State Government/Municipal/Local Body concerned, which approves the building/development plans, will monitor compliance of the above conditions by the developer.
Note:
(i)   It is clarified that FDI is not permitted in an entity which is engaged or proposes to engage in real estate business, construction of farm houses and trading in transferable development rights (TDRs).
  "Real estate business" will have the same meaning as provided in FEMA Notification No. 1/2000-RB dated May 03, 2000 read with RBI Master Circular i.e. dealing in land and immovable property with a view to earning profit or earning income there from and does not include development of townships, construction of residential/commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships.
(ii)   The conditions at (A) to (C) above, will not apply to Hotels & Tourist resorts; Hospitals; Special Economic Zones (SEZs); Educational Institutions, Old Age Homes and Investment by NRls.
(iii)   The conditions at (A) and (B) above, will also not apply to investee/joint venture companies which commit at least 30 per cent of the total project cost for low cost affordable housing.
(iv)   An Indian company, which is the recipient of FDI, shall procure a certificate from an architect empanelled by any Authority, authorized to sanction/building plan to the effect that the minimum floor area requirement has been fulfilled.
(v)   'Floor area' will be defined as per the local laws/regulations of the respective State governments/Union territories.
(vi)   Completion of the project will be determined as per the local bye-laws/rules and other regulations of State Governments.
(vii)   Project using at least 40% of the FAR/FSI for dwelling unit of floor area of not more than 140 square meter will be considered as Affordable Housing Project for the purpose of FDI policy in Construction Development Sector. Out of the total FAR/FSI reserved for Affordable Housing, at least one-fourth should be for houses of floor area of not more than 60 square meter.
(viii)   It is clarified that 100% FDI under automatic route is permitted in completed projects for operation and management of townships, malls/shopping complexes and business centres.
■■
@ It is clarified that no person will be adversely affected as a result of the retrospective effect being given to these Regulations.