Volume #17 | IssueNo. 317/2025 | October 2025
Lead Through Conduct
Plenty of lessons in leadership that we get to witness and learn from our careers as a Company Secretary. Especially privileged to be privy to conversations and behaviours of the so-called leaders, the Board members. As stewards of good governance, they are expected to set the tone of organisational culture, conduct themselves worthy of the position that they hold and be mindful of their communication. However, many a times they fall short exposing the real ‘leader’ behind the position they hold.
In the 2 instances that I share below, just see how the board member reacts / responds to situations:
- After a particularly messy board meeting where the CEO was attacked for crossing his brief multiple times, he wanted to make amends by seeing off some of the board members who were leaving. One of the investor nominees who decided to stay back suddenly found himself all alone amidst the company employees who were busy talking amongst themselves, dissecting how the presentations went by, why most agenda didn’t go through. There was an air of disappointment and anxiety. A sense of apprehension if engaging Mr. Ashish, the investor director in small talk would be appropriate or not. The company secretarial team was busy clearing up the meeting room. Clearly he felt unattended to. Out of the blue, Ashish retorted angrily “Do none of you know who I am ? Nobody has bothered to escort me to the restaurant. No one from the company came to receive me yesterday.” He even targeted the young external consultant Ms. Bhavna “why are you just standing here without making any arrangements ? Don’t you know the board protocols ?” Taken aback by the unexpected outburst from a senior board member, Bhavna just froze. Speechless. Debating internally whether to offer him an explanation that she was clueless being an external person or apologising. In those moments of awkward silence, the Company Secretary emerged from the meeting room, perplexed. She took charge of the situation immediately and guided Ashish to the buffet table.
It was no one’s fault but his insecurity that led to the showdown. Infact it was a let down in the eyes of the company employees who held board members in high regards and were shocked at his behaviour.
- Contrast this with another board instance. Ms. Soundarya, the Founder Director was coordinating board timings with the new directors and instructed Ms. Ranjini, external company secretary to defer the meeting by 1 hour so that one of the director’s request could be accommodated. Assuming all this was being done with all the directors’ consent, a fresh communication went out for the new timings. This brought several reactions from the board – one of them said they have a hard stop. One of them said they should have been consulted before the change. Another one questioned Ranjini as to why she had changed the timings without checking. Yet another one declined the meeting invite. Ranjini was clearly caught in the crossfire. She responded to the Chairman “Assuming the change had necessary prior consents, I followed instructions received. Apologies for the inconvenience caused, if any”. Owning the responsibility, Soundarya swung into damage control mode and wrote an email, clarifying the reasons for the changed timings. Accepting her mistake and absolving Ranjini of any wrong-doing since she was not the decision maker. Not only this, but she also personally apologised to the young professional that she was responsible for her being caught in the crossfire unintentionally. Reflecting the matured culture of the organisation, the Chairman also apologised to Ranjini for questioning her actions.
Ranjini was quite embarrassed receiving apologies from such senior leaders for a small lapse. Here again it was the behaviour, the conduct of the people in authority towards the junior team and especially an external consultant who was clearly not at fault. It displayed the highest levels of assuredness and accountability, respect for an individual and taking ownership – lessons that will stay for long with Ranjini.
Leadership is earned through conduct, not by position. Not by reaction or retaliation. By measured response. By treating others with respect, care and dignity. Such leaders stand tall. Last long. With a naturally created aura around them.
“Titles may grant authority, but behaviour earns respect.”
I am sure each of you will have many such personal anecdotes to share. Happy to hear from you as you read this 317th issue of Samhita for a round up of updates in October, 2025 from SEBI, MCA, IFSC, ESG, GST, IT , FSSAI, EPFO etc.
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
Relaxation from Minimum Information Requirements for Related Party Transactions
Based on the representation received from Industry Standard Forum (ISF), SEBI in its 211th meeting held on 12th September, 2025 has approved the proposal for relaxation in minimum information to be provided to the Audit Committee and shareholders for the approval of RPTs. Accordingly, as part of ease of doing business, SEBI has issued a Circular dated October 13, 2025 providing relaxation from the RPT disclosure with immediate effect. Highlights of the same are as follows:
I) Threshold for Minimum Disclosure:
- For RPTs, whether individually or taken together with previous transactions during a Financial Year (including transactions that were approved by way of ratification) that do not exceed 1% of annual consolidated turnover as per the latest audited financial statements or Rs. 10 Crore, whichever is lower, listed entities shall provide minimum information as per the format specified in Annexure-13A of the Circular.
- Complete exemption from disclosure requirements specified in the Annexure 13A for transactions not exceeding Rs. 1 Crore.
- The exemption threshold of Rs. 1 Crore as specified in Para 3(c) of the RPT Industry Standards continues to apply.
II) Minimum Information for Audit Committee Approval (Annexure-13A) includes:
- Type, material terms and particulars of the proposed transaction
- Name of the related party and relationship with the listed entity / subsidiary including nature of its concern or interest
- Tenure and value of the proposed transaction
- Percentage of annual turnover represented by the transaction
- Details of source of funds, nature of indebtedness, cost of funds & tenure, terms, and purpose (for loans, deposits, advances & investments)
- Justification for the RPT and relevant valuation reports
- Percentage of the counter-party’s annual consolidated turnover on voluntary basis
- Any other relevant information
III) Minimum Information for Shareholder Approval (Annexure-13A) includes:
- Summary of information provided to the audit committee
- Justification for the transaction
- Details of source of funds, nature of indebtedness, cost of funds & tenure, terms, and purpose (for loans, deposits, advances & investments)
- Statement regarding availability of valuation reports
- Percentage of the counter-party’s annual consolidated turnover on voluntary basis
- Any other relevant information
Pursuant to the above, detailed transaction specific disclosures and material RPT disclosures specified in Part B and Part C of the Industry Standards respectively, procedural requirements such as certification requirements by Promoter Director, providing of certified financials in the absence of audited financials etc cease to apply for RPTs which are within the threshold mentioned above. Further, it may be noted that these relaxations are only with respect to disclosures required under SEBI’s Industry Standards and listed entities shall continue to provide disclosures as per the Companies Act, 2013.
Regulatory Updates
MCA Updates
In continuation to circulars issued earlier, the MCA, through a General Circular dated September 22, 2025, has permitted the companies to conduct their AGM and EGM via Video Conferencing or Other Audio-Visual Means till further orders i.e. for an indefinite period.
MCA vide notification dated October 01, 2025 has amended the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. The IEPFA (Accounting, Audit, Transfer and Refund) Amendment Rules, 2025 are effective from October 06, 2025. As a revised form IEPF 5 has been notified, the process for claiming unpaid amounts and shares out of the IEPF has undergone few changes. Highlights of the amendments are as follows:
- Category of applicants widened as the claims can be filled by self or by a representative through an authorization letter
- Enhanced documentation in case of transfer or transmission related claims
- OTP verification based system to reduce fraudulent claims
- More information to be provided regarding the claim such as the category, document backed reason for non-receipt or non-encashment of the payment being claimed
- Claimant’s Bank account details to be filled in the form
The MCA vide its circular dated October 15, 2025 has granted extension for filing e-form DIR-3-KYC and web-form DIR-3-KYC- WEB without additional fee up to October 31, 2025. Previously, the filing was extended to October 15, 2025.
The MCA vide its circular dated October 17, 2025 has granted extension for filing the annual forms ie; AOC-4 and MGT-7 pertaining to FY 2024-25 till December 31, 2025 without payment of additional fees. This has been granted in view of deployment of new e-Forms on MCA-21 version 3 portal. However, it may be noted that the same shall not be construed as conferring any extension of time for holding AGMs under the Act.
MCA vide notifications dated October 23, 2025 have established additional Registrar of Companies and Regional Directors along with territorial jurisdiction to exercise such powers and discharge such functions as specified under the Companies Act, 2013 as well as the LLP Act, 2008. Vide notification published on October 27, 2025 it has been notified that it will be effective from January 01, 2026.
List of additional ROCs under the Companies Act, 2013 | https://www.mca.gov.in/bin/dms/getdocument?mds=5iXn9ronxr%252Fp8MHiPDd5lg%253D%253D&type=open |
List of additional RDs under the Companies Act, 2013 | https://www.mca.gov.in/bin/dms/getdocument?mds=yAnqPocKzLxnYoerlj0xWA%253D%253D&type=open |
List of additional ROCs under the LLP Act, 2008 | https://www.mca.gov.in/bin/dms/getdocument?mds=aCE86c%252FD5M6mBNrL2Pif3A%253D%253D&type=open |
List of additional RDs under the LLP Act, 2008 | https://www.mca.gov.in/bin/dms/getdocument?mds=EZ1JqosxVMGRDQuvn740IA%253D%253D&type=open |
SEBI Update
In order to enable the issuers of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper and other market stakeholders to have access to all the applicable circulars/ directions in the subject matter at one place, SEBI has issued a Master Circular dated October 15, 2025. This Master Circular has been updated to incorporate the provisions of the Circulars issued till June 30, 2025.
IFSCA Update
IFSCA has issued a circular dated October 23, 2025 establishing a Framework on Stewardship Code for Regulated Entities (REs) in the IFSC. The Stewardship Code aims to enhance investor protection, promote robust corporate governance, and guide regulated entities undertaking investment activities in IFSC. All Fund Management Entities and Institutional Investors (including AIFs and Retail Funds) in IFSC have been encouraged to adopt this code to build a more responsible and resilient investment ecosystem. Highlights of the framework are as follows:
I) Adoption of Stewardship Code: REs may either adopt the Stewardship Code specified in Annexure-A of the Circular or specified / published by:
i. Financial sector regulators in their home jurisdiction
ii. Indian financial sector regulators (SEBI, IRDAI, PFRDA)
iii. Statutory professional bodies like ICSI
II) Responsibilities of the RE:
i. The adopted Stewardship Code must be communicated to the Authority and disclosed to customers through the RE’s website.
ii. Fund Management Entities of Fund of Funds Schemes may disclose the Stewardship Code of the underlying/target fund instead of formulating their own.
iii. REs must ensure regular and transparent reporting on their website and to the Authority.
III) Seven Principles of the Stewardship Code are as below:
i. Principle 1: Stewardship Policy Formulation and Disclosures – Formulate a clear policy on stewardship responsibilities, publicly disclose it, and periodically review it.
ii. Principle 2: Monitoring Investee Companies – Active monitoring beyond voting, including business models, performance, strategy, developments and ESG issues through various mechanisms including direct private communications.
iii. Principle 3: Intervention in Investee Companies and Escalation – Framework for intervention in investee companies when concerns are identified such as persistent underperformance, concern around corporate governance, ESG risk, breach of legal / regulatory obligations, decisions affecting minority shareholders etc. Intervention & escalations shall be documented and disclosed.
iv. Principle 4: Policy on Dealing with Conflict of Interest – Formulate a detailed policy to identify, avoid, manage, and disclose conflicts of interest.
v. Principle 5: Voting by the Investors – Adopt a formally documented voting policy to promote accountability, transparency and to encourage corporate governance reforms. Policy may establish a robust decision-making protocol and may include detailed records of votes cast, abstentions & justifications, use of proxy voting, advisors, voting escalation matrix etc.
vi. Principle 6: Collaboration with Other Investors – To enhance effectiveness of stewardship activities, collaborate with other entities to promote better corporate governance and long-term value creation.
vii. Principle 7: Disclosure and Reporting of Stewardship – Periodically report to stakeholders (at least annually) on discharge of ownership responsibilities and explaining the rationale and necessity, in case of any deviation from the policy.
RBI Update
RBI vide notification dated October 06, 2025 has amended the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015. Through this amendment, it is now permitted to open a Foreign Currency Account under Regulation 5 in International Financial Services Centre (IFSC). Consequently, the timeline for utilization of funds in the said account by the exporters for paying for its imports into India or repatriation into India has been modified. It allows for utilization or repatriation within a period not exceeding the end of 3 months from the date of receipt of funds after necessary adjustments where such accounts are maintained with banks in an IFSC. For accounts in other jurisdictions it continues to remain at end of next month from the date of receipt of the funds after necessary adjustments.
The longer duration to hold the amount in accounts with IFSC encourages the Exporters to effectively manage their funds.
Others
The Food Safety and Standards (Ayurveda Aahara) Regulations, 2022 prescribes norms for preparation and sale of ‘Ayurvedic Aahara’.
Ayurvedic Aahara means food prepared in accordance with the recipes or ingredients or processes as per method described in the authoritative books of Ayurveda listed under ‘Schedule A’ of the Regulations including products which have other botanical ingredients. However, it does not include Ayurvedic drugs or proprietary Ayurvedic medicines and medicinal products, cosmetics, narcotic or psychotropic substances, herbs listed under Schedule E-1 of Drug and Cosmetics Act, 1940 and the Drug and Cosmetics Rules, 1945, metals based Ayurvedic drugs or medicines, bhasma or pishti and any other ingredients notified by the Authority from time to time.
Schedule B of the Regulations prescribes the categories of Ayurveda Aahara and Regulatory Requirements for each of them. Further, the Food Authority i.e. The Food Safety and Standards Authority of India (FSSAI) has been authorized to specify the Ayurveda Aahara covered under Category A of the said schedule from time to time.
A little bit about Ayurveda Aahara under Category A:
- These are prepared in accordance with the Authoritative Ayurveda Texts in Books listed in Schedule A of the Regulations including the ingredients
- Do not require prior approval w.r.t Safety Data
- Where the label has health benefit claims which are otherwise than in accordance as per the Books, prior approval of the FSSAI is required.
- Where the label has Disease Risk Reduction claims, Evidence based prior approval from the FSSAI is required
The FSSAI vide order dated July 25, 2025 has prescribed the items under Category A. This would facilitate the Food Business Operators (FBOs) for manufacturing of such Ayurveda Aahara.
The Ministry of Home Affairs has issued a Public Notice on September 30, 2025, raising concerns about late submissions of FCRA registration renewal applications. While the law requires submission of applications within 6 months prior to the expiry of the validity of the certificate, many associations are submitting the application less than 90 days before expiration leading to processing difficulties and operational disruptions. Accordingly, associations are strictly advised to submit renewal applications at least 4 months before certificate expiry to ensure timely processing and avoid disruption in their activities.
The EPFO vide circular dated October 07, 2025 had mandated establishments covered under the Employees’ Provident Fund Scheme, 1952 to display extract of Form 5A at the entrance of the establishment, website or mobile app of the establishment. The extract of Form 5A to be displayed shall cover EPF Code, Registered Name, Date of coverage, No. of branches & Primary Branch Address and Regional Office. Employers of establishments concerned were directed to comply with the requirement within 15 days of the circular ie; by October 20, 2025.
The Central Board of Trustees, EPF in their meeting held on October 13, 2025 have approved decisions having crucial impact on the withdrawal, litigation and digital framework of the EPF. Major decisions include:
1.Simplification and liberalization of EPF partial withdrawal provisions
- Partial withdrawal provisions of EPF Scheme simplified by merging 13 complex provisions into a single, streamlined rule categorized into three types namely, Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances
- Now, members will be able to withdraw upto 100% of the eligible balance in the Provident Fund including employee and employer share
- Withdrawal limits have been liberalized—education withdrawals allowed up to 10 times and marriage up to 5 times (from existing limit of total of 3 partial withdrawals for marriage & education in all)
- Requirement of minimum service has been uniformly reduced to only 12 months for all partial withdrawals. 100 % auto settlement of claims for partial withdrawal
- 25% of the contributions in the Members’ account to be maintained by the member at all times as Minimum Balance. This will enable the member to enjoy high rate of interest offered by EPFO (presently 8.25% pa) along with compounding benefits to accumulate a high value retirement corpus.
- Change the period for availing premature final settlement of EPF from the existing 2 months to 12 months and final pension withdrawal from 2 months to 36 months
2. Launch of Vishwas Scheme to reduce litigation
- The rate of penal damages will be reduced to a flat rate of 1% per month, except for a graded rate of 0.25% for default up to 2 months and 0.50% for default up to 4 months
- The scheme shall remain in operation for six months and is extendable by another six months
- Ongoing litigation cases under Section 14B (pending in CGIT, High Courts, or Supreme Court), Finalized but unpaid 14B orders, Pre-adjudication cases (where notice has been issued but final order is pending) are covered under the Scheme. All cases pending shall stand abated, in case of compliance under the ‘Vishwas Scheme’
3. EPFO digital transformation framework
- Integration of a proven Core Banking Solution with cloud-native, API-first, micro services-based modules for account management, ERP, compliance and a unified customer experience planned as part of EPFO 3.0
- To enable faster, automated claims, instant withdrawals, multilingual self-service and seamless payroll-linked contributions
4. Other decisions approved:
- MoU with India Post Payments Bank (IPPB) to provide doorstep Digital Life Certificate (DLC) services to EPS’95 pensioners at a cost of Rs 50 per certificate, fully borne by EPFO
- Selection of four Fund Managers for managing the debt portfolio of EPFO for a period of five years to safeguard and enhance returns on members’ PF savings
ESG Updates
To achieve India’s commitment to net-zero emissions by 2070, the Ministry of New and Renewable Energy (MNRE) has released the National Policy on Geothermal Energy on September 15, 2025. The Policy, through its comprehensive framework aims to facilitate the exploration and development of untapped geothermal energy resources. Key highlights of the Policy are as follows:
i. Research and Best Practices: Encourages research, inter-ministerial collaboration, and adoption of global best practices for geothermal energy development.
ii. Diverse Applications: Focus on electricity generation, space heating/cooling, agriculture (greenhouses, cold storage), tourism, and desalination.
iii. Technological Innovation: Promotes R&D of advanced systems such as hybrid geothermal-solar plants, retrofitting abandoned oil wells and Enhanced/ Advanced Geothermal Systems (EGS/AGS).
iv. Local Innovation and Partnerships: Emphasis on local innovation, joint ventures, and repurposing existing oil/gas infrastructure.
v. Collaboration: Partnerships with international geothermal bodies and pioneering nations, as well as collaboration with state governments, oil and gas companies, and research institutions.
vi. Ecosystem Development: Building a robust public-private ecosystem for the long-term development of the geothermal sector.
vii. Capacity Building: Promotes knowledge sharing and human resource development in the sector.
As a first step towards exploration of geothermal energy, the MNRE has sanctioned five projects in the sector. These include both pilot initiatives and resource assessment projects aimed at exploring the viability and potential of geothermal energy in India.
The Integrity Council for the Voluntary Carbon Market (ICVCM) has approved a new suite of methodologies for engineered carbon dioxide removal (CDR), strengthening governance of one of the market’s fastest-emerging segments. The approval extends the ICVCM’s Core Carbon Principles (CCP) label to six methodologies which come from Gold Standard and Isometric, covering:
- Accelerated carbonation of concrete aggregate (Gold Standard v1.0)
- Biomass Geological Storage (Isometric v1.0–1.1)
- Bio-oil Geological Storage (Isometric v1.0–1.1)
- Subsurface Biomass Carbon Removal and Storage (Isometric v1.0)
- Biogenic Carbon Capture and Storage (Isometric v1.1)
- Direct Air Capture (Isometric v1.1)
Although engineered removals account for less than 1% of issued credits at present, their forward sales are substantial, with analysts expecting steep growth as corporates look for durable pathways to net-zero.
Kerala becomes the first Indian state to formally adopt a comprehensive Environmental, Social, and Governance (ESG) policy within its investment framework. The policy aims to attract ESG-compliant industries by aligning industrial growth with ecological and social priorities. Emphasis will be placed on sectors with low emissions and minimal pollution including renewable energy, green manufacturing, sustainable agriculture, and digital services. The policy is expected to influence both industrial project approvals and infrastructure proposals.
Industry analysts note that global asset managers, particularly those bound by stewardship codes in Europe and North America, increasingly require investee jurisdictions to demonstrate ESG integration. Kerala’s move could make its industrial zones more attractive to these pools of capital. By formally adopting ESG as a guiding principle, the state is attempting to reduce reputational and compliance risks for foreign and domestic capital.
Tax Update
As the deadline of October 31 loomed for companies, proprietorships, and working partners to file their FY 2024-25 tax audit reports and ITRs for AY 2025-26, the Gujarat High Court sparked a wave of relief by extending the timeline for submitting audit report to November 30; Himachal Pradesh and Punjab & Haryana swiftly followed suit.
Listening to the courts, the CBDT stepped in with a nationwide reprieve—pushing audit reports to November 10 and giving ITR filers a full extra month until December 10 providing much required reprieve.
GST Updates
Section 15(3)(b)(ii) of the GST Act, 2017 states that post-sale discounts reduce GST only if the buyer reverses the extra Input Tax Credit (ITC). CBIC vide its circular dated June 26, 2024 had mandated that Sellers must get proof (CA certificate or buyer’s letter) that ITC was reversed. Vide circular dated October 01, 2025, CBDT has cancelled the said mandate. Henceforth there is no need for certificates or letters for reduction in GST for post sales discount.
GSTR- 9/9C is now available to taxpayers for filing. GSTN has issued FAQs on October 16, 2025 to assist the Taxpayer for better understanding of various Tables of GSTR-9/9C and their key aspects.
GSTN vide advisory dated October 17, 2025 has introduced enhancements in the Invoice Management System (IMS) to simplify handling of credit notes and Input Tax Credit (ITC) reversals. Highlights of the features are as follows:
Pending Status for Credit Notes: Taxpayers can now mark accepted credit notes as “Pending” in IMS, delaying their reflection in GSTR-2B until uploaded to GSTR-1. This avoids immediate full ITC reversal if the corresponding invoice ITC wasn’t fully availed or partially reversed. The pending status can be maintained until the due date of the relevant GSTR-3B (e.g., up to April 2026 for Oct-Dec 2025 notes).
Declaration of Reversal Amount: Recipients can declare the exact ITC reversal amount (full or partial) for a credit note, instead of the system auto-reversing the entire amount. This ensures accurate ITC adjustments in GSTR-3B and reduces mismatches/disputes.
FAQs have also been released for better understanding of the new facility.
Statutory Compliance Calendar
July 2025
Quote of the day
Leadership is not about titles, positions or flowcharts. It is about one life influencing another. - John C. Maxwell
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.