Volume 10 Issue No. 196/2018

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Hi Folks

That must be the secret of his longevity. What ? the attitude that “I am a little bird that has broken out of the egg”. The sense of freedom. The sense of breathing fresh air. The sense of joy and breaking out. He didn’t say this. He didn’t ‘appear’ to live a life like this. On the contrary, he is known as a strict disciplinarian whose brilliance and toil earned him Bharat Ratna. But surely he must have enjoyed what he did – building bridges, dams and factories and more. No wonder he lived upto the ripe age of 102. Who ? None other than the doyen of Indian Engineering, Sir M Visveswaraya, whose birthday on 15th September is celebrated as Engineer’s Day !

As we pay tribute to one of India’s finest engineers, let us find joy in what we do, as he did. Let us keep the wonderment alive in our lives. Let us resolve to break out of the sense of drudgery and monotony. Let us work towards perfection and excellence. Success will follow. These thoughts seem all the more relevant for us as we are caught in a whirpool of deadlines, KYCs, disclosures, compliances etc. Many of which we stretch to ensure for others. Dependant on their timelines. Dependant on an undependable technology platform. But the best part is to steer through these challenges and complete a task. Of course I am referring to the DIR3 KYC filings, the reminders to corporates to disclose their Significant Beneficial Ownership – all in an effort by the Government to pierce the shell and find the ‘person’ behind it or ‘smash’ the shell itself. Well, there has been an underprepared overdrive which has exposed the vulnerability of the technology and undesired DIN deactivations leading to uproar. To keep our calm amidst this sea of chaos is a challenge. We need all the inner resolve in the world to keep going. As they say, Keep Walking. Keep Moving Forward !!

Samhita is moving too towards the 200^th issue. In this 196^thissue, we carry news about a few more sections made effective in the Companies Amendment Act, 2017 and a plethora of GST notifications (we have had to summarise as a 6 page note !). Come 2^nd October, no more dealing in physical shares. Even if you are a shareholder of an unlisted public company, it is time you demat your shares. Brave yourself for many such changes in future. Keep yourself updated through our fortnightly newsletters. For any previous issues of Samhita and the readers feedback, please visit
https://sharadasc.com/resource-center/

Happy Reading

The MCA has extended the due date for filing form BEN-2 from 10^th September, 2018 to 30 days from the date of availability of a revised form on the MCA-21 portal. No additional fee shall levied if the same is filed within 30 days.

BEN-2 relates to information about Significant Beneficial Ownership (SBO).

Part I, II and III of Schedule V of CA, 2013 under S.196 and 197 relating to Appointment of and payment of Managerial Remuneration has been liberalised by doing away with Central Government approval and permitting shareholders to approve the same.

The Insolvency and Bankruptcy Code, 2016, Goods and Services Tax, 2017 and Fugitive Economic Offenders Act, 2018 have been included in the list of enactments in Part I.

A managerial person can now draw remuneration from more than 1 company since there is no ceiling provided in Schedule V of the Companies Act, 2013.

Effective 2^nd October, 2018 Companies (Prospectus and Allotment) Rules, 2018 has been amended requiring DEMAT of securities of unlisted public companies. All fresh issue of securities whether on rights basis or private placement or bonus issue and buyback and transfer of securities from 2^ndOctober, 2018 shall only be in DEMAT form.

The company must obtain ISIN number from a Depository and comply with all the regulations under SEBI (Depository and Participants) Regulations, 1996, Depositories Act, 1996 and SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993.

The MCA has notified Section 196,197,198,199,200 and 201 of the Companies (Amendment) Act, 2017 and shall come into force on 12^th September, 2018.

S.No	Notified Sections of CA, 2017	Sections of Amendments of CA, 2013	Title	Changes made
1	S.66	S.196	Appointment of Managing Director, Whole-time Director or Manager	– Where special resolution is not obtained for appointment of MD/WTD/Manager beyond 70years of age in a public limited company, the company must make an application to the central government for its approval with sufficient details to justify such appointment and the same must be backed by an ordinary resolution passed with majority votes. – W.r.t appointment of MD, WTD, Manager, approval of CG shall only be required if such appointment is not as per Part I of Schedule V.
2	S.67	S.197	Overall Maximum Managerial Remuneration and Managerial Remuneration in Case of Absence or Inadequacy of Profits	– CG approval for Managerial Remuneration has been done away with. – Special resolution of shareholder is sufficient including for waiver for excess remuneration paid to MD/WTD. – Auditor must report whether remuneration is paid within limit or not.
3	S.68	S.198	Calculation of Profits	– While computing net profits under S.198 credit shall not be given for the profits, by way of premium on shares or debentures of the company. However, credit shall be given for such amount if the company is an investment company as referred to in clause (a) of the Explanation to section 186.
4	S.69	S.200	Central Government or Company to Fix Limit with Regard to Remuneration	– The power to fix the managerial remuneration in case of inadequate or no profits now lies entirely with the shareholders. Central Government approval has been done away with.

The limit of Rs One Crore per annum for exports on Free of Cost (FOC) export basis for export promotion for Status Holders is removed. The limit now is only 2% of average annual export realization during preceding three licensing years with immediate effect.

A little after the 1^st anniversary of the GST Act, the Central Government has made many changes to streamline the enforcement of the Act, provide clarifications and extend due dates wherever required. The changes are so many across 12 notifications, 5 Circulars and Amendments to the Act and Schedules that a very brief summary by itself runs to 6 pages!

Please go through the Summary Note for details.

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.

S. C. Sharada & Associates,
Company Secretaries. #405, 7th Cross, IV Block, Koramangala, Bangalore – 560 034
sharadasc.com Phone : +91 80 25534374 , +91 80 25536618 Email: [email protected]

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