Volume #17 | IssueNo. 311/2025 | April 2025
C begets T !
“Greed comes before Trust in the dictionary” thundered Mr. Damodaran, ex-SEBI Chairman and a respected doyen of corporate governance in India who is known to speak his mind. Speaking about TRUST at the 18th CII Annual Corporate Governance Summit recently, he had pearls of wisdom for a room overflowing with eager corporate representatives :
“Doing the right thing, at the right time, for the right reason, by the right people”
“Work towards trust by everyone in the ecosystem”
“Overregulation kills business. Do not sit in judgement on boards. Follow jurisprudence”
“Prepare company annual reports in simple sentences using bullet points”
Other eminent speakers added :
“Trust is psychological safety for all stakeholders” || “Trust is confidence and gives visibility” ||
“Not severity of punishment but certainty of punishment is required”
This in the wake of the Gensol scam and the IndusInd Bank fraud struck the right chord with me, setting me up to reflect on What comes before Greed that can build Trust. Any guesses ???…….For me it is Commitment (even in the dictionary) – As Jean Paul Sartre says “Commitment is an act, not a word”. Period.
A few weeks ago, as I entered the room for the weekly Toastmasters Meeting (I am a proud member of the #IIMB Orators Club in Bangalore where we practice communication and leadership) I found the Seargent At Arms (one who kickstarts the meeting) limping around, arranging the room, writing meeting details on the board, welcoming people as is expected and customary of the role. The President (CEO of the club) was supporting in lot of her responsibilities. Busy greeting other members and guests, I thought I will check on Soma, our SAA later.
Well, I didn’t have to, since she created curiosity in her 2 minute address (yes that is exactly the time a SAA gets to start the meeting and introduce the President !) about her limping gait and left us asking for more. Then followed the President who praised Soma’s commitment and resilience in making it to the meeting despite a near-fatal train accident just a couple of days back. Without giving any excuses nor sharing what exactly happened, Soma came an hour in advance to our 7.45am meeting, dragging her feet for a long distance from the IIMB gate to the meeting room, made all the arrangements and started off the meeting bang on time (we pride ourselves on this 😊) with a smile on her face and confidence in her voice, though experiencing pain within.
Didn’t have to wait for long to know what exactly happened to her. She grabbed the first speaking opportunity and shared the harrowing experience that she went through. Soma boarded a wrong train at Chennai and that too a moving one – well, she tried to board actually. Her husband was already in and she had pushed her son on to it along with the luggage. Just as she was about to enter, the train started moving and her legs got stuck between the track and the wheels. As she was screaming for help, imagining the worst, a hand came forward to safely pull her out of the tracks and thrust her on to the train. She recalled that in the chaos, however much she and the railway officials searched, they could not identify who the kind soul was, who her life-saviour was. None came to claim any fame !
A disturbed and totally shaken Soma narrated her horrific near-death experience which was still fresh in her memory. She received a standing ovation not just for her brave sharing but for the COMMITMENT that she showed that day in turning up for a 2-minute role and performing it to its best!
I recall a similar accident of one of my team members Surbhi, who had agreed to get home-made Pasta for an office potluck lunch, a couple of months ago. Her toe was completely injured as she was taking a ride to office. Without giving any excuse she just texted that she would be late. A few hours later, she did turn up with a bandaged toe, smiling with a limp, carrying a casserole of hot pasta. Despite my advice not to come, she said she had to – it was her COMMITMENT that drove her. A commitment to as small as getting a dish for a potluck party.
No, it was not small for her, just as playing a 2-minute SAA role wasn’t insignificant for a Soma. Both Soma and Surbhi demonstrated that “When you make a Commitment you build Hope. When you keep it, you can build Trust.”
Corporate leaders, Independent Directors, Auditors and others…..are you listening ?
Our Ministries are working round the clock to regulate, regulate and regulate, hoping to bring investor trust through governance rigour but unless the intent is clear at the top, little can be done with regulations alone. Scams and fiascos will continue to abate. Be that as it may, do scroll down to read the various regulatory updates released during April, 2025 in this 311th issue of Samhita as also some news from the ESG world.
For any previous issues of Samhita and the readers’ feedback, please visit http://www.sharadasc.com/resource-center/.
Happy Reading
S.C. Sharada
www.linkedin.com
RBI Updates
Vide circular dated April 22, 2025 the RBI has amended the Master Directions – Compounding of Contraventions under FEMA, 1999. Following changes have been introduced:
1. Para 5.4.II.v of the circular dated October 01, 2024 on Directions- Compounding of Contraventions under FEMA, 1999 stated that where a compounding order has been passed but the applicant has not paid the compounding amount, the amount calculated as per Para 5.4 may be enhanced by 50% of earlier amount in case of reapplication. This reference to linking of any compounding amount payable to earlier compounding orders has been deleted.
2. To address challenges in incorrect payments and improve turnaround time for processing compounding applications, details such as mobile number of the applicant or their authorized representative, details of specific RBI office to whom the payment has been made and mode of submission of application (Physical/PRAVAAH) shall be included in the payment communication
Further, vide circular dated April 24, 2025 the said Master Directions have been amended to cap the compounding amount at INR 2,00,000/- for contravention of each regulation/ rule with respect to non-reporting related contraventions covered in Para 5.4.I of the Directions. However, this is subject to discretion of the compounding authority and the facts involved in the case.
(Open RBI Circular dt April 22,2025)
(Open RBI Circular dt April 24, 2025)
(Open updated RBI Master Directions)
RBI had launched PRAVAAH (Platform for Regulatory Application, Validation And AutHorisation) portal on May 28, 2024 to streamline online applications for regulatory authorisations, licenses, and approvals.
Vide Press release dated April 11, 2025, RBI has directed all Regulated Entities (REs) to make use of the PRAVAAH (Platform for Regulatory Application, Validation & Authorisation) Portal for submitting applications for regulatory authorisations, licenses, and approvals with effect from 01 May 2025.
Only in exceptional circumstances where an applicant is unable to submit through the portal, a physical application can be made. However, the same will be processed through the PRAVAAH portal by RBI and applicants will be notified.
Key Features of the Portal are highlighted below:
- The Portal enables the applicants to track the status of the applications and further the decision of RBI on the said applications would also be communicated though the portal.
- At present, a total of 108 forms are available on the portal. Forms w.r.t Compounding of Contraventions under FEMA, application for grant of NBFC license, Clarifications on regulations, directions etc. sought from External Payment Division, FED, CO etc are available on the portal. Additionally, a general purpose form can be submitted in regard to applications for which no specific form is available.0020
Others
DPIIT vide Press Note 2 of 2025 dated April 07, 2025 has clarified that an Indian Company engaged in sector/activity prohibited for FDI may issue bonus shares to its pre-existing non-resident shareholders provided that the shareholding pattern post bonus issuance does not change for such non-resident shareholders.
Prohibited Sectors include lottery business including Govt lottery, Gambling and Betting, Nidhi Company, manufacturing of tobacco etc.
Necessary amendments are expected under FEMA (Non-Debt Instruments) Rules, 2019 in line with the Press Note.
MCA Update
MCA has published a notice on April 04, 2025 inviting public comments on the proposed amendment to Rule 25(1A) of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. These rules propose to expand the scope of companies eligible to apply for fast track merger under Section 233 of Companies Act, 2013 thereby reducing the burden on NCLT.
At present, fast track merger under Section 233 of the Act is permitted for the following:
- two or more small companies or
- a holding company and its wholly owned subsidiary company
- two or more start-up companies; or
- one or more start-up companies with one or more small company
The proposed amendment widens the scope by allowing the following types of companies to apply for fast track merger under Section 233 of Companies Act, 2013:
(i) Merger between one or more unlisted companies with one or more unlisted companies, subject to the condition that such companies satisfy the following criteria within 30 days prior to publishing the notice inviting objections from Registrar and Official Liquidator u/s 233(1)(a):
- Borrowing from banks, financial institutions or other body corporate is less than 50 crore rupees and
- The company has not defaulted in repayment of such borrowings.
However, it is important to note that section 8 companies are not eligible for undergoing fast track merger.
Additionally, a certificate from auditor confirming that the company meets the eligibility is required to be attached with the application;
(ii) Merger between a holding company (listed or unlisted) and its unlisted subsidiary company or companies; or
(iii) Merger between two or more subsidiaries of the same holding company, provided that the transferor company or companies are not listed.
Public may provide their comments by May 05, 2025 through e-Consultation Module on the MCA website.
SEBI Updates
A proviso was inserted under Regulation 6(1) of the SEBI LODR vide Amendment dated December 12, 2024 to specify that Compliance Officer shall be an officer, who is in whole time employment of the listed entity, not more than one level below the board of directors and shall be designated as a Key Managerial Personnel.
Pursuant to queries received on the term ‘level’ used in the said Regulation, SEBI has issued clarification vide circular dated April 01, 2025. It has been clarified that the term ‘level’ refers to the position of the Compliance Officer in the organization structure of the listed entity. Therefore, ‘one-level below the board of directors’ means one-level below the Managing Director or Whole-time Director(s)who are part of the Board of Directors of the listed entity. The same is in line with Regulation 2(1)(o) of the LODR Regulations which defines KMP. The said definition in turn refers to Section 2(51) of the Companies Act, 2013.
Further where the listed entity does not have an MD or WTD, then it means not one level below the CEO or Manager or any other person heading the day-to-day affairs of the listed entity.
SEBI vide circular dated April 21, 2025 has extended the automated implementation of trading window closure framework, which was previously applicable on Designated Persons (DPs) of listed companies, to now include their immediate relatives as well.
Trading windows are usually closed in the following instances:
- From the end of each quarter till 48 hours post declaration of financial results.
- When a DP is expected to be in knowledge of or possession of unpublished price sensitive information (UPSI).
This is done in order to prevent trading by such person/(s), protect the interest of investors and promote fair trading practice in the securities market.
This circular requires the stock exchanges and depositories to develop a system wherein trade by DPs and their relatives can be restricted to help prevent insider trading violations and ensure compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015 by enforcing PAN – ISIN freeze at security level. Additionally, depositories are mandatorily required to submit a quarterly report to SEBI in the format enclosed in Annexure C.
The first phase of implementation of this framework will be effective from July 01, 2025 and will cover top 500 companies as per BSE market capitalization as on March 31, 2025. All other companies will get covered in the second phase of implementation and the framework of PAN-ISIN freeze shall be effective for them from October 01, 2025.
Annexure A and B of the circular include the procedure of implementation of the system and related flow chart, respectively.
Pursuant to the recent amendments to SEBI LODR, 2015, SEBI has released FAQs on April 23, 2025. These FAQs are divided into 5 segments covering the following aspects:
- SEBI LODR Third Amendments dated December 12, 2025 read with SEBI Circular dated December 31, 2024 on implementation of Expert Committee Recommendations
- Minimum Public Shareholding
- LODR Regulations
- Disclosure of Information Related to Forensic Audit of Listed Entities
- BRSR Report Core
Clarifications on various aspects relating to appointment of Secretarial Auditor, associate company, related party, disclosures in shareholding pattern, signing of financial results, eligibility to provide assurance or assessment for BRSR etc. are provided in the FAQs.
One such aspect is services that can be rendered by a Secretarial Auditor. While the FAQs provide a detailed list, ICSI was asked to specify those services which the Sec. Auditor can/cannot render to the listed entity or its holding entity or its subsidiary. ICSI on April 24, 2025 has published the said list which can be accessed from the link below. Notably the following have been prohibited:
- To act as CRS/ESG Consultant or drafting of CSR/BRSR Report
- Drafting/vetting of Annual Report of the listed entity
- To file FLA Returns
- Vetting of alteration of MOA and AOA of the listed entity
- Advisor for issue of securities
(Open SEBI FAQs dt April 23, 2025)
(Open ICSI List of Services by Sec. Auditor dated April 24, 2025)
IFSCA Updates
IFSCA vide notification published on April 17, 2025 has introduced the IFSCA (Capital Market Intermediaries) Regulations, 2025. Highlights of the same are as follows:
- Regulatory framework for registration, regulation and supervision of Capital Market Intermediaries (CMIs) operating in the IFSCs in India have been covered in the regulations.
- Intermediaries seeking to undertake activities such as Broker Dealer, Clearing member, Credit rating agency, Debenture Trustee, ESG Ratings and Data Products Provider etc. shall register with the IFSCA.
- CMIs seeking registration shall be required to be present in the IFSC either as a Company, LLP or a body corporate or a branch thereof.
- CMIs shall submit an application in Form SWIT with the set of prescribed documents.
- Broker dealer, clearing member, depository participant have been asked to submit application along with such additional information through the recognised stock exchange, recognised clearing corporation, recognised depository, as the case may be who shall inturn recommend it to the IFSCA after review.
- Specific Obligations and Responsibilities of each type of CMI has been provided in the Regulations
IFSC vide notification published on April 17, 2025 has introduced the IFSCA (KYC Registration Agency) Regulations, 2025. These regulations provide for eligibility criteria for an entity seeking registration as KYC Registration Agency (KRA) and their obligations post registration. Highlights are as follows:
- Applicants seeking registration shall be set up as a Company in the IFSC. Additionally an entity which is already registered with SEBI providing similar activities may set up a Wholly Owned Subsidiary or a branch in IFSC to become a KRA.
- Net Worth of such KRAs shall be at least USD 1 Million at all times. Where it is set up as branch of an entity registered with SEBI, the Net Worth requirement shall be earmarked and ringfenced by such entity.
- Fit and proper criteria specified for the KRA’s Principal Officer, Directors/KMP and controlling shareholders which shall be ensured at all times
- Appointment of Principal Officer and Compliance Officer, each based out of IFSC and having specified educational qualifications and experience
- Aspects such as Functions and Obligations, Code of Conduct by the KRAs and powers of the IFSCA for inspection and action have been provided in the regulations
IBBI Updates
IBBI vide circular dated March 28, 2025 has directed all IPs to exclusively make use of the centralized Baanknet auction platform (formerly referred to as eBKray) for conducting auctions for sale of assets during liquidation process in cases where an auction notice is issued on or after 1st April 2025.
Further, all IPs are required to state the following in the auction notice:
- Prospective bidders are required to submit the required documentation including but not limited to, declaration of eligibility under Section 29A of the Code through the electronic auction platform.
- The prospective bidders shall deposit the Earnest Money Deposit (EMD) through the electronic auction platform which shall get forfeited in case the bidder stands ineligible, thereby ensuring only genuine bidding applications are received.
IBBI vide notification dated April 03, 2025 has amended Regulation 39 of the IBBI (Insolvency Resolution Professional for Corporate Persons) Regulations, 2016. Pursuant to the same, the format of Compliance certificate required to be submitted in Form H has been revised. Key changes introduced are as follows:
1. Insertion of new segment to provide information about whether the application for approval of Resolution Plan was filed within 180 days, and if not then the days beyond 180 days taken to file the plan has to be mentioned along with the reasons for delay.
2. Other segments included in the form to provide details pertaining to the following:
- Details and documents related to successful resolution applicants
- Details of CIRP and resolution plan (Resolution Plan Value, voting % by CoC etc. to be mentioned)
- Details of implementation of Resolution plan
- Realisable amount and details thereof
- Steps to be taken by the concerned parties post approval of resolution plan by Adjudicating Authority
- Status of Preferential, Undervalued, Fraudulent and Extortionate transactions and how these are dealt in the resolution plan, if any
IBBI vide notification dated April 03, 2025 has amended Regulation 5 of the IBBI (Insolvency and Bankruptcy Code (Insolvency Professionals) Regulations, 2016. Pursuant to the amendment, an individual shall be eligible for registration as an Insolvency Professional (IP) if he has passed the Limited Insolvency Examination within 24 months before the date of submitting application with the insolvency professional agency, instead of the earlier limit of 12 months.
This revision of limit from 12 months to 24 months would enable more individuals to get themselves registered as an IP, thereby opening opportunities for individuals and ensuring robust Insolvency resolution.
ESG Updates
The U.S. Securities and Exchange Commission (SEC) has approved the Green Impact Exchange (GIX), paving the way for the country’s first national stock exchange dedicated to sustainability.
- First-of-its-kind: GIX becomes the first U.S. national securities exchange focused solely on sustainability.
- Capital shift continues: Despite ESG fund outflows, private investment in climate-tech surged 65% YoY to $5B in Q1 2025.
- Market-readiness: GIX targets early 2026 launch with support from Members Exchange’s mission (MEMX) and listing plans for hundreds of sustainability-focused firms.
India achieved a record renewable energy capacity addition of 29.52 GW in FY 2024-25, bringing the total installed capacity to 220.10 GW as of March 31, 2025. This progress supports the country’s goal of reaching 500 GW of non-fossil fuel capacity by 2030 under the ‘Panchamrit’ commitments. Solar energy led the growth with 23.83 GW added, followed by wind energy at 4.15 GW, raising their totals to 105.65 GW and 50.04 GW, respectively. Bioenergy and small hydro power also saw steady growth. Additionally, 169.40 GW of projects are under implementation and 65.06 GW have been tendered, including innovative solutions like hybrid and RTC projects. These efforts reflect India’s strong commitment to clean energy and climate goals.
The National Mission for Clean Ganga (NMCG) has approved the 2025 action plan for the River Cities Alliance (RCA), aiming to integrate river-sensitive planning into urban development across India. The plan includes training programs, expert support, knowledge-sharing platforms, and development of Urban River Management Plans (URMPs), particularly focusing on cities like Delhi and Tamil Nadu. With support from the World Bank, 25 new URMPs will be created, adding to the existing five. The initiative emphasizes basin-level coordination, eco-friendly riverfront development, and citizen awareness. RCA currently includes 145 cities and is strengthening its efforts through events, a new website, and global engagement such as participation at Davos.
Tax Updates
CBDT vide notification dated April 03, 2025 notified that every person who has been allotted Permanent Account Number on the basis of Enrolment ID of Aadhaar application form filed prior to October 01, 2024, to intimate his/her Aadhaar number to The Director General of Income-tax (Systems) on or before December 31, 2025 or such date as may be specified by the CBDT in this behalf.
CBDT vide notification dated April 08, 2025 has notified that April 30, 2025 shall be the last date under the Direct Tax Vivad se Vishwas Scheme, 2024, in respect of tax arrears to be filed by the declarant to the designated authority, in accordance with the provisions of section 90 of the said Act.
CBDT vide notification dated April 22, 2025 has notified 10 new items on which 1% TCS is required to be made, where the value of goods exceeds Rs. 10 lakhs per transaction.
- Wrist watches
- Art pieces (e.g., antiques, paintings, sculptures)
- Collectibles (e.g., coins, stamps)
- Yachts, rowing boats, canoes,
- Helicopters
- Sunglasses Bags (e.g., handbags, purses)
- Shoes (note: only “shoes” mentioned, not all footwear)
- Sportswear and equipment (e.g., golf kits, ski-wear)
- Home theatre systems
- Horses for horse racing and polo
GST Updates
GSTN has implemented phase wise changes in Table-12 of GSTR-1 or GSTR-1A. GSTN is going to implement Phase-III of Table 12 of GSTR 1 & 1A from April, 2025 tax period onwards which implies that:
- Table-12 has been bifurcated into two tables namely B2B and B2C, to report these summary of these supplies HSN wise separately in corresponding table.
- Manual entry of HSN will not be allowed. Taxpayer will be able to choose correct HSN from given Drop down.
Ministry of Finance, has notified the much awaited Goods and Services Tax Appellate Tribunal (GSTAT) (Procedure) Rules, 2025 on April 24, 2025. These rules regulate GSTAT’s procedure and functioning, covering aspects like appeals, hearings, records, inspections, and electronic filing. Forms and registers are provided for various processes, ensuring structured operations.
Statutory Compliance Calendar
May 2025
Quote of the day
"Commitment is an act, not a word" - Jean Paul Sartre
Disclaimer: 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.