Hi Folks
Sometime back I had wondered if there was a lull to be followed by a storm. Looks like it. I am referring to the annual filing season for Company Secretaries. The Ministry had more than 1 year to design and come up with e-form for filing the audited financial statements. For reasons best known to them, form AOC4 and form MGT7 were released late last month and the entire Corporate Inc has just 1 month to understand the form, fill the data, attach scanned documents and upload on the MCA portal by

end October. Imagine the online-traffic this month. CS firms and their staff working on this form are at their wits end − fields are not defined properly, there are technical errors, website maintenance shut-downs in between and then the so-called ‘form revisions’. Many a times they work the whole day filling company data and save it smugly thinking that they can come in the next day and upload. But whooooooooooosh !! the entire data is gone only to be refilled once again. This phenomenon has been happening since the last several days in the name of ‘change’ and ‘improvisation’. Imagaine what a colossal waste of (wo)manhours !! none of it adequately compensated. None of it utilised efficiently. Companies are not providing data also in time resulting in last minute filing rush to which the Ministry sermonises us “Don’t wait till 31st Oct. File on time to avoid last minute rush.” As if it is a pleasure to stare at the MCA website ‘lovingly’ and hang on to the work or as if we are paid on an hourly basis !!!Change is good. Change is essential. Change is growth. But not all types of change. Change stemming out of unpreparedness, change stemming out of incomprehension, change stemming out of hasty work − nah, it is not a welcome change. It is a cover up act done in a distasteful manner. Where is the so-called stable legislation and ease of doing business ? Compare this to the Indian Contract Act of 1872 which is a relatively small piece of legislation that has withstood several mutinies, 2 world wars, independence struggle and the paradigm shift from agricultural economy to industrial economy to the new-age techno- economy. Language is simple, there are illustrations in it that are still relevant and it has clarity. No amendments so far for more than 140 years ! Anything fatal about this ?

It is time we welcome positive changes all over this Navarathri that culminates in victory in all that we do. Wishing you a happy festive season as we continue in our filing season ☺ Should you wish to refer to any of our older issues of Lexspeak, do visit our Resource Centre at sharadasc.com

Warm regards

Companies are required to furnish Permanent Account Number (PAN) while submitting their Annual Return in Form MGT-7. This is a new requirement.

Companies with Foreign Direct Investment (FDI) were required to file an Annual Return with RBI by 15th July each year. This is now made applicable to all LLPs also which have received FDI in the previous year(s) including the current year.

  • Department of Industrial Policy & Promotion (DIPP) reviewed its existing FDI policy on partly paid equity shares & warrants, and decided to allow issue of such instruments as eligible capital instruments without any Govt. approval, subject to compliance with the Companies Act and terms and conditions of RBI. Definition of capital now includes warrants in addition to equity, preference shares and debentures.
  • Facility-sharing agreements between group companies through leasing/sub-leasing arrangements will not be treated as ‘real estate business’, provided such agreement is at arm’s length under IT Act, 1961 and annual lease rent earned by lessor company does not exceed 5% of its total revenue.
  • Two clarifications have been issued relating to FDI in single-brand retail trading:-Such business can be undertaken through multiple entities (wholly-owned subsidiaries or joint ventures)

    -FDI policy on single-brand retail applies to Indian brands also seeking foreign investment.

  • 100% FDI is now permitted in White Label ATM operations under automatic route by a Non-banking Entity provided it maintains minimum net worth of Rs.100 crores and complies with certain other conditions.

In order to reduce the cost of compliance and ease the compliance burden for both, the tax payer and the tax deductor, the Central Board of Direct Taxes (CBDT) has simplified the format and procedure for self-declaration in Form No.15G and 15H relating to TDS. The procedure for submission of the Forms by the deductor has also been simplified.

Securities Exchange Board of India (SEBI) released format of Uniform Listing Agreement as per Listing Regulations. Existing companies should execute this Agreement within 6 months of Notification of Listing Obligations and Disclosure Regulation i.e. 6 months from 2nd September, 2015.

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. Lex Valorem disclaims all liability on action taken without professional advice.

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