“The best still images are moving. They move you beyond time and space, move you emotionally, spiritually and intellectually; move you because they tell an entire story, in a single frame.” World Photography Day went by on 19th August, with a simple purpose – to inspire photographers to “share their world with the world”.
This time I have chosen this beautiful picture of Juhu beach clicked on a smart phone by my colleague Ms. Poornima Jayarao. The warm sun and the gentle waves encourage you to weave your own story !
As you do that, let’s get back to the world of business through words. In my experience over the years, it is People who make Organisations and not the other way around. They define it’s core values, it’s culture and it’s brand – in the process gain and retain customers. I would like to share a refreshing experience that my colleague had with the Senior Manager of a well-known private sector bank while she was racing against time and cutting across documents to complete an FDI (Foreign Direct Investment) related RBI filing for one of our clients. In this case, there was no investment received but conversion of a Convertible Note, which also requires RBI reporting under FEMA regulations. FIRC (Foreign Inward Remittance Certificate) and KYC are documents applicable at the time of receipt of investment and not upon conversion of the Note into Equity. Infact on choosing the ‘conversion’ option, such filing option disappears on the RBI portal. However, each bank has it’s own internal guidelines demanding different documentation and in this case, on the last day the client’s bank insisted that we file the FIRC and KYC, eventhough it was not applicable ! There were a few other minor discrepancies that they highlighted (as small as numeral 3 appearing in the FIRC in the investor’s name instead of Roman III and an extra letter !!) around 8 pm. My fellow professionals reading this piece will empathise with me when I say a simple RBI reporting can get excruciatingly painful due to lack of uniformity in practices amongst banks, lack of coordination between remitting and receiving banks and many a times lack of knowledge of the bank officials at the branch level. This is where our angel-saviour Mr. VJ, Senior Manager of the Bank stepped in, responding to a call from my colleague post office hours (hello, is there something called working hours in the WFH scenario ?? 😊). He went beyond the call of his duty to connect her on a conference call at 10 pm with his legal team to sort out the issue. Discussions clarified the situation but they insisted a signed clarification letter from the company is required. My colleague coordinated with the client, got the Director to sign the letter and submitted the same on the RBI portal at 11.45 pm….just 15 mins short of the deadline to save the LSF (Late Submission Fee). While she heaved a sigh of relief that night, a couple of days later she got a call from the bank stating the clarification letter was missing, though it was filed. Again our ‘knight in shining armour’ stepped in and got her to talk to the legal team (mind you, neither the company nor we as consultants have direct access to a bank’s legal team except through their branch officials). This time she convinced them to accept an email explanation since the client was not available for immediate response. But for Mr. VJ and his timely intervention, the issue would have dragged on for weeks for no fault of ours. The client would have reported non-compliance with their subsequent FDI reportings blocked (it is sequential in nature). My conscientious colleague tells me that this is only one of the instances of great customer services extended by VJ. Long story short – despite faceless interactions with regulators, digital platform and so-called filing help kits, FDI filing is not standardised across various Authorised Dealer banks. It can get nightmarish at times though it appears straight and simple. While I hold my grouse against the whole not-so-transparent system, I am grateful to the likes of VJ and his legal team that create customer delight. Appreciation to my committed colleague as well to make magic happen at midnight during these pandemic times. I repeat – People define Organisations !!
On the other hand I was appalled when I heard someone mention that another rival private sector bank is insisting that a foreign director turn up for personal verification at one of their overseas branches. This is just to add him as one of the authorised signatories of the Indian company for banking operations. At times, opening a bank account and changing signatories is tougher than convincing investors to invest. Rules are meant to facilitate business and not disrupt it.
Talking of rules, in this 243rd issue, we turn our attention to the Draft Code on Wages Rules that was out for public comments. In this issue, we have made an attempt to highlight the provisions of these Wage Rules via a conversation with our associate Mr. K V Vittal Rao, who is a veteran labour law expert with over 50 years of domain expertise. While I thank him for his patient and critical analysis, I also commend my young colleague Ms. Krithika Murali who conceptualised and executed the Q&A format flawlessly that appears as a you tube video in the first item of this issue. This is our maiden attempt to post on you tube and is far from our best. We shall keep bettering ourselves since excellence is a journey and not a destination. When the intent is good, execution help pours in, in many ways. For us it came by way of Mr. Shekar, HR Head of a well-known MNC in Bangalore, who out of reverence for his mentor Mr. Vittal Rao, recorded the entire conversation, edited and made it you tube ready. I express my sincere gratitude to Shekar for making the video happen.
Don’t miss out on the English lessons under “Let’s Excel in English” along with other regulatory updates. For any previous issues of Samhita and thereaders’ feedback, please visit https://sharadasc.com/resource-center/.
Teacher: Why are you *nonchalant* about the topic.
Student: I guess I am quite *indolent* when it comes to topics like these.
Teacher: How could you not be *frenized* by such a topic?
Student: With due respect, there are a few topics that I am *frenetic* about like art and I don’t think they must *frenzy* everyone.
*Nonachalant, indolent – disinterested
*Frezied, frenetic – involves lot of excited movement or activity
As part of the Labour Reforms the Government had gazetted one out of the four proposed Codes – The Code on Wages on 07.08.2019. On 17.07.2020 the draft Code on Wages Rules were made public to receive the comments and opinions of the stakeholders. A lot of questions that remained unanswered by the Code were answered in the Rules. However some crucial parts in Rules still remain ambiguous and require simplification or clarifications.
Is the Code favouring the Employees and not the Employers?
Isn’t the definition of “minimum wages” too complicated?
What does “region wise wage fixation” mean?
Are a few questions answered by Labour Law expert and Founder of K V R Management Services, Mr.K Vittal Rao while in conversation with Ms. Krithika Murali, Executive.
No extension of time for holding AGM unless applied for!
MCA vide General Circular dated 17.08.2020, has clarified that Companies which are unable to hold their AGM for the FY ended 31.03.2020 on or before 30.09.2020 or within 15 months from date of previous AGM, whichever is earlier, should apply in Form GNL-1 to the Registrar of Companies seeking for extension of time to hold AGM (up to a maximum of 3 months) by 29.09.2020.
It is unfortunate that corporates are being asked to pay and apply for extension when it could have been automatic since the COVID-19 pandemic has disrupted corporate as well as audit activities. Ways of the MCA are strange!
Vide MCA Notification dated 24.08.2020, the list of eligible CSR contributions under Schedule VII of the Companies Act, 2013, has been expanded to include:
Direct contributions made to research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government / State Government / Public Sector Undertaking / any agency of the Central Government / State Government (earlier it was limited only to incubators).
Contributions to Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH) and Council of Scientific and Industrial Research (CSIR) (Other institutions like IIT, DRDO, DST, DBT etc. continue).
MCA vide Notification dated 24.08.2020, has amended the Companies (Corporate Social Responsibility Policy) Rules, 2014 as follows:
Companies engaged in R&D activity of new vaccine, drugs and medical devices in their normal course of business can undertake the same related to COVID-19 for FYs 2020-21, 2021-22 and 2022-23 as part of their CSR Policy provided:
a) Such R&D activities are undertaken in collaboration with any of the institutes or organisations mentioned in item (ix) of Schedule VII to the Act i.e. IIT, DRDO, DST, DBT etc.
b) Details of such activity are disclosed separately in the Board’s Report.
Earlier, expenditure incurred in pursuance of normal course of business was disallowed as CSR expenditure, which is now permitted to fund R&D activities for COVID vaccines and drugs.
Handling SCORES complaints and SOP for non-redressal
Stock Exchanges are required to take action against listed companies for non-compliance of Listing Regulations keeping in regard the interest of investors and the securities market. SEBI vide Circular dated 13.08.2020, has laid down the procedure for handling complaints by the Stock Exchanges (SEs) as well as the Standard Operating Procedure (SOP) for actions to be taken against listed companies for failure to redress investor grievances.
Annexure I of the Circular contains the timelines for handling complaints and actions in case of non-compliances and Annexure II contains nature of complaints for which the circular is applicable. The Circular lists down a very specific time bound procedure for SEs to handle investor complaints. Actions for non-compliance include a fine of Rs.1,000 per day for delay beyond 60 days to resolve the complaints and freezing of the promoter’s.
Option of Aadhar authentication for obtaining GSTIN – now available
For obtaining GST registration, an option for Aadhar authentication has been added. The Rules are amended as follows w.e.f. 21.08.2020:
In case Aadhar authentication is opted for, it must be completed while submitting application. The date of application is earlier of the date of Aadhar authentication or 15 days from the submission of the application in Part B of Form GST REG-01.
For the rest of the applicants, physical verification of place of business will be carried out, including document verification, as the case may be, with permission.
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]