As we close in on 2019, I want to recall some takeaways that I got from 3 different events – one was a large startup conference, the other a small gathering to celebrate the success of a client’s investment closure and the third one a completely different set up – a decennial celebration (10th year) of an Art School run by a passionate Teacher, Veena.
✤ A speaker at the startup conference, who is himself a seasoned entrepreneur and author recalled his meeting with Warren Buffet and shared what the Investment Guru said – “I make investment in the ‘person I meet’ and tick 3 boxes – Competence, Passion & Values”. So it is the Person he values !
✤ A Big Investor in one of my clients who is himself a celebrated, successful new-age entrepreneur stated categorically at the investment closure gathering that all the elaborate due diligences apart, he decided to invest in the company only due to the Commitment & Integrity of the promoters. This has been the investment quotient of most of his successful acquisitions.
✤ At the Art School exhibition which displayed lovely paintings of both the Teacher and the Taught, the Chief Guest, who is himself a well-known sculptor and caricaturist urged children to focus on Excellence & persevere without aiming for Success as a Goal. He lamented that most children start dropping out from art classes when they enter 10th standard, thanks to the gruelling ‘Board exams-tuitions-JEE preparation coaching’ vicious cycle that parents subject them to unnecessarily. They are asked to stop painting, stop playing, stop learning music – all labelled as non-core activities – as soon as they reach 10th standard and instead start utilising the time only for studies. Little do they realise that art brings in focus, determination, discipline and happiness to the minds of the growing children if pursued along with academics. Parents he said, also create an artificial pressure situation by comparing children with others and pushing them to win prizes instead of encouraging them to excel in and enjoy their art work. I couldn’t agree more with his call for “Don’t compare with others. Compete with yourself. You should be a competitor to your own painting. Ask yourself, how can I do better next time ?” instead of comparing with others. He appreciated Veena for being such a patient art teacher over the years and producing such marvellous students (see banner which is a combo of Veena’s and her students’ paintings). Yet another advice the Chief Guest had for the young ones was – “Do your own learning. No one can teach you everything. You need to learn on your own by observing – how do they paint, what material they use, what techniques they use ? Without the curiosity and ability to observe keenly, no learning can happen”.
It is not coincidence that in all the 3 instances above, the focus was on Excellence, Passion & Commitment as the pathway to achieving success. Nothing new but time tested and proven over the years across different generations and genres of learning as the mantra to success. I hope to continue sharing such nuggets through this fortnightly newsletter in the next 10 years of publication.
This is the winter of the year but there seems to be no winter for the regulatory updates. In this 226th issue of Samhita, do read up the changes made under IBC (which have been summarised by my good friend and fellow professional CS Sumana Rao, a registered Insolvency Professional) and amendment to FEM(Non-debt Instrument) Rules – in less than 2 months, the originally issued Rules have been amended by the Ministry of Finance and that too with retrospective effect from Oct, 2019. Clearly some of them are to undo the wrongly included FDI thresholds and update to reflect the current provisions. Hope atleast in 2020, the law makers will do better to issue Rules and Regulations after due thought process, discussions and drafting.
Mr. Vittal Rao’s article on enforceability of non-compete clause in an employment contract, both during and post the period of employment is quite insightful and practical. Do read.
For any previous issues of Samhita and the readers feedback, please visit
Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019
he 2019 budget amended the Indian Stamp Act pursuant to which the applicable rates of stamp duty and the manner in which stamp duty was charged on debentures, issuance and transfer of securities, Futures & Options, etc. was prescribed. It is now been notified that the said provisions of 2019 budget will become effective from Jan 09, 2020. The Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 for collection of stamp duty through stock exchanges, clearing corporations and depositories and Transfer of stamp-duty to States by the Collecting Agents have also been notified and they shall also come into effect on Jan 9, 2020
In this Article, we will discuss the later part of Non-Compete clause/ agreement.
A company may depute an employee to undergo special skill training either within India or abroad or depute to a collaborator to study the technical inputs. The company may also commit to offer a permanent position in the company on completion of training. In all these cases the company may impose a restrictive condition on the employee not to leave the company for a specified number of years, not to take up employment with any other…Read more
FEM (Non-debt Instrument) (Amendment) Rules, 2019
Rules are made fast and in haste. Amendment rules are made faster than them. So also with the Foreign Exchange Management (Non-debt Instrument) Rules, 2019 notified in October which has now been amended to take effect from the original date of 17th October, 2019 except for a few items.
Highlights are categorized and analysed in the enclosed article which contains a summary of the original Rules as well as the Amended Rules. Broadly changes are on account of omissions/ removal of certain provisions; modifications/ clarifications/ re-instatement of earlier provisions which seem to have been missed in the FEM (NDR) Rules, 2019 (original notification); specific changes w.r.t Single Brand Retail Trading (SBRT) and insertions/ new changes effected.
Changes in Schedule IV of SEBI (ICDR) Regulations, 2019
Schedule IV of SEBI (ICDR) Regulations, 2019 for the filing of Draft offer documents/ letters of offer/ offer documents by the lead manager(s) with the relevant office of the SEBI based on the issue price of Rs.500 crores or more has been amended and replaced. Instead of region-wise jurisdiction, now the jurisdiction would be specified by SEBI based on the estimated issue size.
Availability of NEFT on 24×7 basis
W.e.f. 16.12.2019 NEFT facility will be available on 24×7 basis. Highlights of the same are as follows:
The system will be available on all days of the year, including holidays
NEFT transactions after usual banking hours of banks are expected to be automated transactions initiated using ‘Straight Through Processing (STP)’ modes by the banks.
There will be 48 half-hourly batches every day. The settlement of first batch will commence after 00:30 hours and the last batch will end at 00:00 hours.
Amendments in IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2019
Provisions w.r.t. voting by an authorised representative of financial creditors under section 25A (3) and 3A of the Code, inserted in the Regulations as well.
Insertion of sub clause (bb) after clause (b) in regulation 37 facilitating measures for restructuring by way of merger, amalgamation and demerger in the Resolution Plan.
‘Amount payable’ to Operation Creditors under the resolution plan to get priority over amount to be paid to financial creditors instead of ‘Amount due to operational creditor’ as amended Vide notification dated 5/10/2018
The Circular dated 14th August 2019 by the IBBI with respect to periodic disclosures to be made by an Insolvency Professional to the IBBI by way of filing IP and CIRP forms, inserted as regulation 40B after regulation 40A
Form B and Form H have been amended to insert provisions with respect to security held by the Operational Creditor and details of sub-category of stakeholders, respectively, in the disclosures
Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2019
The IBBI has notified Insolvency Professionals to act as Insolvency Resolution Professional, Resolution Professional, Liquidator and Bankruptcy Trustees (Recommendations) Guidelines, 2019 dated 28.11.2019 in supersession of guidelines dated 14.05.2019. The IPs finding place in the panel for appointment as IRP, RP and Liquidator shall also act as Bankruptcy Trustees in the case of Individual Insolvency.
The guidelines shall come into effect from 01.01.2020.
‘Appropriate Authority’ to initiate insolvency proceedings against Financial Service Providers
MCA vide notification G.S.R. 852(E) dated 15th November 2019, notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019, requiring only the ‘Appropriate Authority’ to initiate insolvency proceedings against Financial Service Providers. Necessary corrections were made in the Form 1 of the rules by substituting ‘Financial Creditor’ [wrongly used] with ‘Appropriate Authority’ vide Corrigendum issued on 27.11.2019.
Withdrawal of Circular clarifying various doubts related ITeS
TThe government earlier in the year issued Circular No. 107/26/2019-GST dated 18.07.2019 on the scope of information technology-enabled services (ITeS) and coverage under intermediary services. The said circular had created confusion, leaving ITeS service providers to self-assess whether they qualified as an intermediary. Numerous representations were received by the Board expressing apprehensions on the implications of the said Circular. In view of these apprehensions and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board withdrew the circular ab-initio.
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.