“The foods we eat, the air we breathe, the water we drink and the climate that makes our planet habitable all come from nature.” It’s time #ForNature, as June 5th marks World Environment Day, June 8th World Oceans Day and June 21st International Climate Change Day. Biodiversity is the theme for World Environment Day, 2020.
Now than ever before it’s time to act together #ForNature. Isn’t it for us too ? #ForLife too ? Should this remain a mere slogan for a day earmarked in a year or should it be an year-long sustainable activity ? No brainer. Of course it should be a collective action of ‘Live and Let Live’ on a long-term basis following the tenet
Om Sarve Bhavantu Sukhinah Sarve Santu Niraamayaah | Sarve Bhadraanni Pashyantu Maa Kashcid-Duhkha-Bhaag-Bhavet ||
May All be Happy May All be Free from Illness| May All See what is Auspicious May no one Suffer||
It seems simple but it is a tall order considering the times we are in. Let me share a personal experience. Last week, my refrigerator stopped cooling. We started noticing that the veggies started to wilt, milk went bad, curd turned soar, fruits rotted and the ‘stale-food-box’ (that’s how my grandmother would refer to a fridge?) had stopped cooling. Thanks to the lockdown, the service technician could attend to our ‘box’ only on a Sunday after 10 days of complaint. He had a list of service complaints that was as long as Hanuman’s tail ! Jokes apart, Sadiq, the technician took less than 5 minutes to pronounce that the copper wire had corroded due to which ammonia was leaking. He came back after another week and replaced the wires, giving life to the refrigerator. As I got talking to him, he shared some startling information. Thanks to the notorious Bellandur lake, overflowing with obnoxious chemicals (this has been creating a stench not only in the neighbourhood but also globally with the infamous pictures), about 4 kms around this lake is polluted which includes Koramangala, where I live. Sadiq said these toxic chemicals in the air corrode the copper in the refrigerator which is the reason for maximum number of complaints from residents in and around Bellandur. Shocked, I probed – has the company (Samsung) done any research on these complaints ? He clarified “Yes madam, for last several years we have been getting maximum number of warranty complaints from Bellandur and Koramangala customers within 8 months of sale of refrigerator which is quicker than other areas. The reason is the pollution levels.” He added that Samsung has undertaken research and come up with a replacement metal for copper to tackle the pollution related corrosion. While this gave me some comfort that Samsung listens to its customers, I was disturbed – If the invisible, invincible chemical in the lake effluents can corrode copper, it can be replaced, but what about our bodies ? Our health ? How much damage can this pollution afflict on all of us, on the metal in our bodies, on the water we drink, air we breathe, food we eat and the climate we live in ! What are we doing about it ? Is observing a day in a year solving the problem ?
Friends, watch the 2017 Naseeruddin Shah starrer ‘Irada’ to know more about how ground water pollution causes many diseases including Cancer. The movie did not get the recognition it deserved but the chilling effect of pollution due to the toxic ‘politician-industrialist-bureaucrat’ combo in our society is telling. It is a must watch ! We must act #ForNature.
On a completely different note, on the eve of the 32nd PCS Day (Practising Company Secretaries Day), ICSI, my alma mater has set the theme as “Only actions will define us”. I am grateful for the profession that gives me my livelihood and in turn helps me provide livelihood to a few others. We are proud that we earn our living with dignity and integrity, in the service of corporate India and society. We have a responsibility to advice and act responsibly so that our clients are on the right side of law. True, our actions and not our designations will define us. Let’s act #ForGovernance !!
As professionals, it is not enough if we acquire knowledge. It becomes our duty to simplify and reach it to the stakeholders in all forms – professional service, workshops and publications. This 238th issue of Samhita is a humble offering towards that. To help improve the English language, our associate Mr. Balaji has shared some unique adjectives for the word ‘sycophantic’ under the column “Let’s Excel in English”. Don’t miss reading it even as you scroll down to catch up on the regulatory updates. For any previous issues of Samhita and the readers’ feedback, please visit https://sharadasc.com/resource-center/
Forfeiture of Shares – Handle it with care
CS Ratnamala Hegde, Principal Associate, has analysed in detail various aspects w.r.t. Forfeiture of shares. What is forfeiture? What are the trigger points for Forfeiture? How does Forfeiture work? Are the questions answered in the article.
The *sycophantic* people spend their time trying to *brown-nose* others. Some people receive *fulsome* praise from people with *unctuous* behaviour
Sycophantic, unctuous, fulsome – quality of expressing too much praise which is often insincere for personal gains – adjectives
Brown-nose – act of trying hard to please someone – verb
Came across the word *brown-nose* from a beautiful movie titled ‘The Intern’. Hence, found similar words later to build this story?
● DPIIT recognised start ups can now issue sweat equity shares up to 50% of their paid up share capital up to 10 years from the date of incorporation, as against earlier 5 years restriction.
● Earlier the following category of Companies were required to invest in or deposit on or before 30th April of a year, an amount equivalent to 15% of the debentures maturing as on 31st March of the year:
NBFCs and Housing Finance Corporations (HFC) and other listed Companies making public issue of debentures
NBFCs and HFCs and other listed companies issuing debentures on private placement basis
NBFCs, HFCs & other unlisted companies issuing debentures on private placement basis
Vide Notification dated 05.06.2020, relaxation from the above deposit requirement has been provided to NBFCs, HFCs and other listed companies issuing debentures on private placement basis (Category b above).
Above amendments will take effect from the date of official notification in the Gazette.
Due to the effect of the Covid-19 pandemic, SEBI vide Circular no dated 21.04.2020 had notified temporary relaxation in eligibility conditions related to Fast Track Rights Issue. Similar relaxations have been granted in the eligibility criteria for Fast Track Further Public Offer under SEBI (Issue of Capital & Disclosure Requirements) applicable for offers opening on or before 31.03.2021, which are:
● Issuers need not adhere to certain requirements mentioned in Regulation 123 (Filing of the draft offer document and offer documents), if it satisfies requirements for Fast Track FPO.
● Relaxations granted vide Circular dated 09.06.2020 under Regulation 155 (Eligibility conditions for fast track FPO) are:
Earlier limit of “average market capitalisation” of Rs.1,000 Crores has now been reduced to Rs.500 Crores.
If any “show cause” notices have been issued against the issuer or its promoters/ directors/ group companies by the Board and any adjudication proceeding or prosecution proceedings have been initiated by the Board, the same have to be disclosed in the Offer Document.
Earlier, if the issuer has settled any alleged violation of securities laws through the consent / settlement mechanism with the Board during 3 immediately preceding years, the issuer becomes ineligible to make Fast track FPO. However now, if any such violations have been settled, the issuer is to ensure they have fulfilled the settlement terms / adhered to directions of the settlement order. Reference to the 3 year period has been dropped.
Impact of audit qualifications whether quantifiable in the financial accounts of the company or not, are to be disclosed in the offer document appropriately. Earlier, if the quantifiable impact exceeded 5% of the net profit or loss after tax the issuer was ineligible to make Fast Track FPO under Regulation 155
These relaxations shall not be applicable for issue of share warrants.
Earlier issuers who intend/propose to list their Non-Convertible Debentures (NCDs) /Non-Convertible Redeemable Preference Share (NCRPS) /Commercial Papers (CPs) were required to disclose in the Offer Document financial results not older than 6 month. Considering the COVID-19 difficulties, SEBI has relaxed the timeline as below –
Extension of due date – Regulatory filings for AIFs & VCFs
Vide Notification dated 04.06.2020, AIFs and VCFs have been granted relaxation w.r.t. regulatory filings for the months ending March, April, May and June 2020. All regulatory filing for the said months can be made on or before 07.08.2020.
No CIRP for defaults arising for 6 months from 25.03.2020
Considering the stress on businesses due to the impact COVID-19 pandemic, IBBI has notified that w.e.f. 05.06.2020, no petitions can be filed for insolvency of a Corporate Debtor for any default arising on or after 25.03.2020 for a period of 6 months, extendable up to 1 year, if notified.
This has been done by suspending Sections 7 (CIRP by Financial Creditor), 9 (CIRP by Operational Creditor) & 10 (CIRP by Corporate Applicant) of IBC, 2016 by way of IBC (Amendment) Ordinance, 2020. It reads “no application shall ever be filed for defaults committed during the said period”, providing immunity to a Corporate Debtor from insolvency petition.
Applicability of GST on remuneration paid to IDs and WTDs
For the purpose of determining the applicability of GST, remuneration paid to directors has been categorised as:
a) Remuneration paid to Independent Directors (IDs) , not treated as employees of the company,
b) Remuneration paid to the Whole Time Directors (WTD) including Managing Director etc. treated as employees of the company.
CBIC has clarified that:
a) As IDs are not considered as employees of the company as per Companies (Share Capital & Debenture) Rules, 2014, GST will be levied on remuneration paid to IDs in the hands of the Company on Reverse Charge Mechanism (RCM).
b) W.r.t. WTDs and MDs and other Directors –
Part of the remuneration declared as “Salaries” in the books of the company is not taxable under GST.
Part of the remuneration declared as “other than Salaries” in the books of the company, is taxable under GST in the hands of the company (the receiver of service) on RCM basis.
This Circular puts to rest, divergent Rulings that were given by GST authorities across the country creating confusion.
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]