As I begin writing the last editorial for 2020, the radio is playing out a beautiful old movie song in Kannada “Nenne nennege, naale naalege, indu nammade, chinte yetake” (translated loosely “Yesterday is yesterday’s, Tomorrow is tomorrow’s, Today is ours, why worry”. Easier said than lived. Well, the Year 2020 definitely makes us want to forget not just yesterday but almost the whole year. What a paradox – 2020 was supposed to be the Year of the Decade, Milestone Year, Vison Year etc. It was all of this and more (or less !!??). Indeed an unforgettable year in our lifetime that sent the whole world back to ‘School’ with Mother Nature being the ‘Universal Teacher’ cutting across nations, genders, geographies, age, income levels, occupation, position, power and what have you ! Didn’t she teach us these ?
That learning need not happen only at a formal school ?
That a school need not mean a ‘place’ where you go to learn ?
That a school can come home to your ‘lap’ or into your ‘hand’?
That the entire world can be schooled simultaneously ?
That while the ‘Teacher’ can be patient and benign for years, she can become unpardoning & punishing too ?
That she can tether and ground us if we live lives of greed beyond our need ?
That we can work from anywhere anytime (well most jobs) ?
That we must respect work-home balance to retain our sanity ?
That technology can be both an enabler as well as an addictive destroyer ?
That simple things in life like breathing unmasked, meeting people, shaking hands, giving a hug, getting food to eat, moving freely are precious and can become a premium ?
That good health is the biggest asset ?
That everyday-people in our lives like a maid, nanny, caretaker, press-wallah, cook etc. are critical stakeholders in our lives ?
That many of us have family, money, food, shelter, clothing and health that the less fortunate do not ?
That a home-maker’s job is never-ending, least-appreciated, completely undervalued but most difficult ?
That people are not what they appear to be – remember how you pulled off a virtual meeting with a formal shirt and tie over boxer shorts or pyjamas ??
That there is compassion and humanity around – corona warriors, soldiers, donors of food, clothing, strangers that reached out, doctors that delivered a baby mid-air ?
That marriages are made in heaven but can be performed virtually ?
That humankind is resilient, innovative and adaptive – schools and colleges continued, exams conducted, job interviews held, new joinees onboarded, new businesses launched, old ones shut down, funds raised and lost, stocks listed, board meetings held ….all virtually?
That even amidst a pandemic celebrations can continue, weddings need not be lavish, entertainment and outings can go virtual, new lives can be added even as existing ones are taken away ?
Hasn’t She played the Master Stroke of her life ? I am sure each of you can add to this list from your experience but ultimately what the School of 2020 has taught us all is this –
Life is a ‘Balance Sheet’ that balances in its own way (we may not be aware of the standards it applies) !
Life is a ‘Going Concern’ come what may !
Life is a ‘Continuum’ to be journeyed !
Life is to be enjoyed with restraint & responsibility, else ‘Mother Nature’ has her own checks and balances to punish ‘trespassers’ !
Heavy-duty lessons learnt the hard way. It is time to move on and wish everyone a Safe, Healthy & Happy New Year 2021 – the first year of a new decade as we Forget Yesterday, Look Forward to Tomorrow and Live for Today !!
On the release of our 250th issue of Samhita, I got the best response ever. That too from a leading Company Law expert and Special Editor of the magnum opus “Guide to the Companies Act” (A. Ramaiya-19th edition). He simply wrote “Refreshing read. Best wishes”. While I felt happy to receive this from such a senior member of our profession, I was on cloud nine when he almost instantaneously wrote back “I shall contribute an article for your next edition”. Incredible ! What more could I ask for as a validation for all my efforts. An erudite scholar like Mr. Ramaswami Kalidas (an author of several professional books and authority in law) offering to write for my humble publication ! Friends, with immense humility I accept Kalidas’s scholarly article and carry it with joy and pride in this last issue of Samhita for the year 2020. Listed right on top, titled “Payment of remuneration for professional services rendered by a director – some perspectives”, it is a rich read in a style that you rarely find these days. While this is the jewel piece of the 251st issue, the others are the regulatory updates from MCA, IT, GST, DGFT, IBC & SEBI (nowhere close to being a jewel) and some English lessons from Balaji. With multiple payment and returns dates, the Statutory Calendar seems to be growing in length like Lord Hanuman’s tail ?. For any previous issues of Samhita and the readers’ feedback, please visit https://sharadasc.com/resource-center/.
The scientists’ eyes were on the screen throughout the *nerve-wracking* moments as the satellite made it to the orbit. The *nail-biting* moments thankfully lasted only 7 minutes and a smile spread across their faces.
The lighting words refer to something that’s exciting and worrying at the same time.
Your presence means the world to me.
I am on cloud nine.
You are the best. Thanks a zillion for being here.
I couldn’t believe my eyes. Lovely to see you here.
Payment to Directors against professional services rendered-Proviso under Section 197(4) – Some perspectives
CS Ramaswami Kalidas, an expert in Company Law and a special editor of the latest edition of A.Ramaiya’s Companies Act has critically analysed the provisions relating to payment of remuneration to Directors rendering professional services, including Independent Directors. He has delved deep to explain the meaning of several terms such as professional services, ordinary course of business, arm’s length, related party transactions, office of place of profit, etc. The article is rich in its content with reliance being placed on dictionary meaning and decided case laws to throw light on the topic.
All the sections of the Companies (Amendment) Act, 2020 w.r.t decriminalisation of offences have been made effective from 21st December, 2020. Please refer to our Article titled “Decriminalisation of offences under Companies (Amendment) Act, 2020” carried in the 245th issue of Samhita for details, where the reference is to the Section numbers in Companies Act, 2013.
MCA Notification No. S.O. 4646(E) dtd 21.12.2020 has notified the corresponding sections of CA, 2020.
Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2020 has been notified, providing for the following changes w.r.t appointment of Independent Directors (ID):
The qualifying score in the online proficiency self-assessment test has been reduced from 60% to 50%
The time available for clearing the above test has been increased from 1 year to 2 years from the date of inclusion of the ID’s name in the Data Bank.
Exemption to individuals from passing the above test if they have served for a period of 3 years from the date of inclusion of the ID’s name in the data bank as below:
Director / KMP in certain type of Companies / Body Corporates / Statutory Corporations;
In the pay scale of Director or above in certain ministries of GOI with experience in corporate laws;
Chief General Manager or above in the RBI / IRDA / Pension Regulatory Fund / SEBI with experience in corporate laws.
Earlier the tenure was prescribed as 10 years and the type of organizations served was limited to 3 i.e., listed company / unlisted public company with 10 Cr paid up share capital / body corporate listed on a recognized stock exchange. Now the list has expanded and the expected experience has shortened.
Applicability of Companies (Auditor’s Report), 2020 has been deferred to all statutory audits commencing on or after 1st April, 2021 from the earlier date of 1st April, 2020, giving a breather both to the auditors and the companies subject to audit w.r.t several disclosures expected in the auditor’s report.
Companies (Compromises, Arrangements and Amalgamations) Second Amendment Rules, 2020
Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 has been amended vide the above Second Amendment Rules, 2020 wherein:
“Corporate Action” has been defined to mean any action taken by the Company relating to transfer of shares and all the benefits accruing on such share namely bonus shares, split, consolidation, fraction shares and right issue to the acquirer.
Rule 26A has been inserted detailing the procedure for purchase of minority shareholding held in DEMAT form.
The above changes will become effective from the date of publication in the official Gazette.
MCA has further extended suspension of Insolvency and Bankruptcy Code, 2016 (IBC) by a period of 3 months from 25th December, 2020. Earlier, IBC was suspended initially upto 25th September, 2020 and later upto 25th December, 2020. This is the 3rd such extension of suspension in view of the COVID-19 pandemic.
Vide Public Notice dtd 24th December, 2020, DGFT has enabled modification of IEC in case of change in constitution of a PAN based IEC by way of merger, acquisition, liquidation, inheritance, etc. IEC can be availed against the new PAN and simultaneously previous IECs can also be operationally linked to the PAN / IEC of the new entity.
Amendments to CGST Act, 2017 & Rules, 2017 become effective
Vide the Finance Act, 2020, Government had proposed various amendments in the Central Goods and Services Tax, 2017 (CGST Act). However, many of these amendments were not made effective till date. Central Board of Indirect Taxes and Customs (CBIC) has now issued Notification 92/2020 dated 22.12.2020 making such amendments effective from 1 January 2021.
CGST Rules, 2017 have also been amended effective from 22.12.2020.
Our associate CA R. Krishnamurthy has summarized both the notifications.
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.
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