Hi Folks 25th anniversary of LPG – Liberalisation, Privatisation & Globalisation of the Indian economy, July, 1991. 25 years hence, we have witnessed another history being created by way of the Rajya Sabha passing the GST – Goods & Services Tax Bill, heralded as One Nation, One Tax ! From then to now, the nation has changed unrecognisably. The fabric has changed, the style has changed, the package has changed, the presentation has changed, the design has changed (sometimes for worse and sometimes for better) but Bharath, our Nation has remained united and ONE ! Aberrations have come, cracks have appeared, leakages have seeped in but WE THE PEOPLE have stood strong and resilient. Many historic and current reasons. I cannot but salute our lost Kargil war heroes because they gave up their lives so that we could live ours ! – 26th July was Kargil Vijay Diwas. The 122nd Constitutional Amendment Bill, 2014 (GST Bill) has still some path to traverse – Lok Sabha to pass the amendments cleared by Rajya Sabha, thereafter the State Legislatures to ratify and then move to the Hon’ble President for his assent. Lot of challenges, lot of learning, huge impact and huge opportunities for the entire nation. Before the GST Bill tsunami hits you, go over the news updates from other regulators. Should you wish to refer to any of our older issues of LexSpeak, do visit our Resource Centre at sharadasc.com. Warm regards MCA has announced relaxation of additional fee and extension of due date for filing of AOC-4, AOC-4 (XBRL), AOC -4(CFS) and MGT-7. It has been decided to allow filing of financial statements / annual returns by 29.10.2016 where due date for holding AGM is on or after 01.04.2016 without payment of additional filing fee. MCA has amended Share Capital and Debentures Rules, 2014. Highlights: • Company defaulting on payment of dividend on preference shares or repayment of term loan and interest to financial institutions or banks or statutory payments relating to its employees can issue Equity Shares with differential rights only after 5 years from the end of financial year in which default was made good. • Exemptions to startup (as defined by DIPP): – Sweat Equity Shares can be issued upto 50% of paid up capital upto 5 years from the date of registration / incorporation. – ESOP can be issued to the promoters and to directors who directly or indirectly hold more than 10% of the outstanding equity shares of the company. • Preferential offer of shares can now be partly paid up shares instead of fully paid shares • In case of secured debentures, charge can be created on the assets of the company, or its subsidiaries or its holding company or its associates companies. • Form SH-7 is required to be filed when a company not having share capital increases number of its members, etc. National Company Law Tribunal (NCLT) was notified by MCA on 1st June, 2016 to replace Company Law Board (CLB). NCLT Rules, 2016 highlights are as below: • Powers and functions of President, Registrar and Secretary of NCLT • Institution of proceedings, petition, appeals etc. • Issuance of orders and disposal of cases • Application for calling or obtaining a direction to call Annual General Meeting • Application under section 131 (Voluntary revision of financial statements or board’s report) • Application under section 140 (Removal, resignation of auditor and giving of special notice) • Application under Section 169 (Removal of Directors) • Right to apply under section 245 (Class action), conducting a class action suit Schedule of relevant fees and forms. Further, MCA has issued National Company Law Appellate Tribunal (NCLAT) Rules, 2016. Highlights are as below: • Powers of the Registrar of NCLAT • Institution of appeals – procedure • Service of process/ appearance of respondents and objections • Examination of witnesses and issue of commissions • Supreme court orders • Schedule of relevant fees and forms • Certain additions / deletion in Industry / Sector / Product / Services for which maintenance of cost records is mandatory. • Cost Auditor needs to give eligibility certificate at the time of appointment similar to the statutory auditor. • Board of Directors can remove Cost Auditor before the expiry of his term by passing board resolution after giving reasonable opportunity of being heard and recording the reasons of such removal in writing. • Cost Auditor shall forward duly signed report to the Board within 180 days from the close of financial year which shall be approved by the Board. • Cost Audit Report in CRA-4 is to be filed in XBRL Mode.

MCA has amended Companies (Incorporation) and Companies (Accounts) Rules, 2014. Highlights: Amendment in the Rules related to Incorporation: • A natural person shall not be member of more than 1 OPC and said person shall not be a nominee of more than 1 OPC. • For the purpose of signing of MOA & AOA of the company, the type written or printed particulars of the subscribers and witnesses shall be allowed. • No proof of identity and residence of the subscriber are required to be filed with the ROC at the time of filing application of incorporation of the company, where the subscriber is already having a valid DIN. • Partnership firm can’t be subscriber to the memorandum • Every company which has a website for conducting online business shall disclose / publish its name, address of registered office, CIN, telephone no., fax no., if any. • Rule 37 has been introduced w.r.t. conversion of unlimited liability company with or without share capital into a limited liability company by shares or guarantee, etc. Amendment in the Rules related to Accounts: • Wholly owned subsidiary and unlisted companies need not prepare consolidated financial statements, if other shareholders do not object for the same. • In addition to individual and firm body corporate can also be appointed as Internal Auditor – CA and CWA appointed as internal auditor can be in practice or otherwise. • Revision of Form AOC-1 (salient features of the financial statement of subsidiaries or associate companies or Joint ventures) and Form AOC-4 (financial statement and other documents with Registrar) A foreign company which is an airlines company shall submit the following documents to the ROC from FY 2016-17 onwards: • Documents relating to copies of latest consolidated financial statements of the parent foreign company, as submitted by it to the prescribed authority in the country of its incorporation under the applicable law of that country. • In respect of Indian business operations, a statement of receipt and payments for the financial year, duly authenticated by a practicing CA. Earlier, the foreign company had to file Balance sheet and profit and loss account of the Indian operation with the ROC. CBDT has extended the due date for filing returns of income for AY 2016-17 from 31st July, 2016 to 5th August, 2016. CBDT has issued new set of FAQs to clarify queries regarding Income Declaration Scheme, 2016. This circular provides clarifications on issues such as revision of declaration, chargeability of capital gain and TDS on transfer of property from benamidar to beneficial owner etc. CBEC has clarified that a manufacturer or a service provider who opts to issue invoices authenticated by digital signature may print a copy of such invoice and sign them manually and forward the same to such customers who are unable to accept or receive the digitally signed invoices. Such invoices in effect would be authenticated by 2 signatures, digital signature as well as manual signature. Such invoices would also be a valid document to avail CENVAT credit. For fast tracking the allotment of PAN and TAN to company applicants, Digital Signature Certificate (DSC) based application procedure has been introduced. Similarly, a new Aadhaar e-Signature based application process for Individual PAN applicants has been made available on the portals of PAN service providers. CBDT has issued draft Rules for prescribing the manner of determination of amount received by the company in respect of a share under 115QA (tax on distributed income to shareholders) of the Income Tax Act, 1961. CBDT has clarified how the age of a person is to be calculated. This is especially relevant in the case of computation of age of senior citizens and super senior citizens. For example, if a person is born on 1st April of a year would be considered to have attained a particular age on 31st March, the day preceding the anniversary or birthday. SEBI has issued FAQs on following matters: • Issues by Indian Companies in India • Issues by foreign companies in India (Indian Depository Receipts) (IDRs) • IPO Grading • Electronic Clearing Scheme for refunds • Applications Supported by Blocked Amount (ASBA) Facility • Public issues in electronic form and use of nationwide broker network of Stock Exchanges for submitting application forms 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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