Volume #16 | IssueNo. 304/2024 | September 2024
The Trapeze
“Hello, EY employee’s news is a reminder that we shouldn’t sacrifice our health for work. Luckily, the culture in our office is not like corporate, where they treat employees like slaves. But the nature of our work itself is stressful at times.
Just wanted to say – don’t miss out on having food on time and catch up on the sleep lost whenever possible. Use some healthy de-stress methods such as Yoga, walking, art etc.
Due to lifestyle changes, the timing of the occurrence of illness has accelerated; early-age heart related diseases is one example. In case you are experiencing health issues including mental health, please don’t hesitate to share with any of us or Ma’am”
This warm, alerting, responsible internal message by one of our team members reflects the underlying concerns of youngsters today, the work culture in our firm and the open-talk environment that we have created over the years. Needless to say, it spurred a barrage of responses that concluded with a “No amount of money, position, recognition, promotion etc. can bring back life or health”. However, it was assuring to note that the team felt comfortable talking about work-life balance openly in an air of ‘we are here for each other’ camaraderie !
Is that so in all organisations ? The need of the hour in our fast-paced lives is – Balance, Equanimity, Resilience in the backdrop of the most oft heard terms in the last 1 month #worklifebalance, #toxicworkculture, #stress, #burnout #dropdead, #demandingbosses, stretchhours, #abusivelanguage, #mentalhealthchallenges #sleep, #sleeplessness…..
In a recently conducted employee-engagement activity in our firm, when asked to write “What made you happy recently ?”, we got a variety of answers ranging from
- a walk in Cubbon park with my dog
- playing badminton on the weekend
- sketching, trekking, a casual walk by the sea-side
- enjoying a comedy show, watching movies, meeting friends
to one of them even claiming ‘Always happy. Need no occasion or event to be happy’
TO the best response being “Good and sound sleep after a long time. Sleep is the best meditation”. Not having adequate time to sleep, not getting to sleep on time, not able to sleep deeply ….. these are the serious issues across age groups today. In my opinion, nothing can be more therapeutic than being able to sleep blissfully like a dog on a garbage heap !
Just like the Nirbhaya case eons ago, the recent horrific rape and murder of a young doctor in the land of the Durga and Anna’s story of death due to work exhaustion in a top-notch consulting firm have shaken the conscience of people across the country. There are protests and outpourings of anguish, anger and indignation by many. Whether things will really change, whether a revolution will set in, only time will tell. The hustle culture in corporates across sectors, the bane of overpromising, the desire to deliver more with less resources, the justification to dangle an incentive-carrot for unreasonable working hours…..all these were there before and will continue or hopefully change. But, but the change we see now is that more and more overworked, overwhelmed employees (more so the younger lot) are coming out in the open to share their experiences and act, where required.
Corporates, startups, consulting firms, law firms, CA, CS firms, investment bankers, investors, advisory firms (the list is not exhaustive!)….are all birds of the same feather. The moot question is who is to bell the cat ? In the quest for client-satisfaction, in the race for expansion and outperforming the peers, in the mayhem of getting to the top, who is to take the call ? who is to pause and decide how the most precious resource of an organisation – its PEOPLE – are feeling, faring and living their lives ?
Is it enough if employers provide fancy workplaces, attractive monetary incentives, exotic holiday options, fun-filled party choices including sleep pods, sleep corners, yoga sessions et al without ensuring employees actually have the time to use most of the facilities ? While some advocate work hard, party harder (read on weekends) OR work, work, work, earn handsomely and then take a long sabbatical to recharge and return OR quit the race and pivot into something entirely different that is less demanding, some of us may not have such luxury. In today’s work environment, other steadier options for balanced life seem rare except, say in government sector. The responsibility seems to squarely lie on employees to make a choice – either to run the race or quit.
As employers I guess we can do our bit (add more to this list please and practise…..)
- set realistic expectations with customers and other stakeholders
- politely and professionally pushback where required
- train the team to manage expectations with colleagues and others
- learn to prioritise between urgent, important, critical work
- insist on clear and candid communication
- assess and set realistic performance goals aligned with organisational objectives
- encourage employees to have personal and professional goals aligned with performance-pay
- recognise achievement of personal goals as well
- ensure a buddy-system
- put in place both mentoring and reverse-mentoring mechanisms
- create and nurture an open-voice culture
- be bold to course-correct, where required
The demographic dividend that we gloat about can soon become a demographic disaster, if we do not create and nurture a healthy and balanced work-life environment. It is a collective responsibility of all the stakeholders in the interest of the economy and society at large.
You are reading the 304th issue of Samhita. Just a single scroll and you will find some interesting takeaways from a high-profile panel discussion on corporate governance. Don’t miss it. So also the important announcements – changes in cross border M&A procedures by MCA, SEBI’s press release highlights that focus on EODB, CCI’s regulations that mark a major pivot in competition law and RBI’s new rules for compounding under FEMA.
For any previous issues of Samhita and the readers’ feedback, please visit sharadasc.com.
Invoking the divine feminine power within us to stay empowered and battle all challenges with grace, poise and energy ! Wishing all of you Happy Navaratri !!
IT UPDATE
The Role of Chairman and the CEO in Managing the Board Process
This was an engaging, online panel discussion hosted by the Centre for Corporate Governance & Sustainability, Indian Institute of Management, Bangalore on 10th Sep, 2024.
Sharing a few insights from Mr. Bhaskar Bhat, Director, Tata Sons, Mr. S S Mundra, Former Dy Governor, RBI and Mr. Vishwanathan, Chairman, Axis Bank. They had so much to share that CCGS has promised part 2 of this programme !
- Independent Directors must meet quarterly instead of once a year
- Board must dedicate at least 1 meeting in a year as ‘Strategy Meeting’ without other agenda
- ‘Board alone moments’ – Directors must spend at least 10 mins without the management prior to the Board Meeting
- Each Committee Chairman to make a short presentation to the Board at the commencement of the meeting
- Chairman must be comfortable in the skin – should not feel the need to compete with the CEO. Needs such maturity and stature
- Chairman must be like a family elder whom members are comfortable to approach and participate in meetings
- He must encourage everyone to speak and ensure it is minuted appropriately
- He is the binding force who builds consensus
- He should be present and listening, aware of every nuance in the meeting to ensure every director is properly heard and encouraged to contribute
- He should keep all possible channels of communication open
- Chairman may not have knowledge about all topics but must know who to get as an expert
- If there is a Chairman-cum-MD, other directors must put strong board processes in place along with evaluation by professional 3rd party agencies. Only a strong board can counter a CMD
When asked about his silence during meetings, John D Rockefeller often recited a poem:
“A wise old owl lived in an oak,
The more he saw the less he spoke,
The less he spoke, the more he heard,
Why aren’t we all like that wise old bird?”
Mr. Mundra said a Chairman must be like this wise old owl !
– S C Sharada
MCA Updates
MCA through a notification dated September 09, 2024, has amended the Companies (Compromises, Arrangements and Amalgamations) Rules ,2016. The amendment, effective from 17th September 2024, introduces a new sub-rule (5) in Rule 25A.
Key changes include:
A) In cases where a foreign holding company merges or amalgamates with its wholly owned Indian subsidiary:
- Prior approval from the Reserve Bank of India is mandatory.
- The Indian subsidiary must comply with Section 233 of the Companies Act, 2013.
- The Indian company must apply to the Central Government under Section 233, following the existing provisions of Rule 25.
- A declaration in Form CAA-16 must be made at the time of application under Section 233.
These changes streamline the procedure for cross-border mergers and ensure regulatory compliance.
In continuation to circulars issued earlier, the MCA, through a General Circular dated September 19, 2024, has permitted the companies with Annual General Meetings (AGMs) due in FY 2024 and 2025 to conduct AGMs on or before September 30, 2025, via Video Conferencing or Other Audio-Visual Means. This extension of timeline has also been extended to Extraordinary General Meetings (EGMs).
The Ministry of Corporate Affairs vide Notification dated September 24, 2024 has amended the Companies (Accounts) Rules, 2014 with immediate effect. This amendment permits the Companies to file Form CSR-2 for FY 2023-2024 by December 31, 2024, subsequent to filing of Form AOC-4 or Form No. AOC-4-NBFC (Ind AS), or Form No. AOC-4 XBRL as the case may be.
In furtherance of MCA notification dated August 12, 2024 on Ind AS 117 for Insurance Contracts, MCA vide Notification dated September 28, 2024 has clarified that adherence to such Standard will be applicable from such date as may be specified by IRDAI. Concerned companies can continue to follow IND AS 104 till such time.
SEBI Updates
SEBI has released Circular for Commercial Paper Issuer dt September 06, 2024, amending the timeline for submitting the payment obligations to the Stock Exchanges. Previously, issuers were required to submit a certificate confirming fulfilment of their payment obligation within two working days of the due date. This has now been reduced to one working day, aligning the reporting timeline with that of listed non-convertible securities, thereby aiming to improve uniformity and compliance across the industry.
SEBI vide Press Release dated September 30, 2024 has released the outcomes of their 207th Board Meeting. Key outcomes of the meeting can be classified as follows:
- Trading in Secondary Market
- Changes in the regulatory framework of IAs and RAs
- Summary proceedings for SEBI Intermediaries
- Rights issue process streamlined and relaxations granted
- Amendments in LODR, ICDR and SEBI (Buy-Back of Securities) Regulations 2018 in line with EODB initiatives
- Introduction of new product / investment class under MF Regulations
- Framework for ESG Debt Securities to be notified
Please click here to read a summary of the above mentioned highlights and more.
Open Highlights on outcome of SEBI Board meeting
Open SEBI Press Release
RBI Update
Department of Economic Affairs vide notification dated September 12, 2024 has introduced Foreign Exchange (Compounding Proceedings) Rules, 2024 in supersession of the Foreign Exchange (Compounding Proceedings) Rules, 2000. Highlights of the same are as follows:
- Compounding of contravention of provisions of the FEMA Act, 1999 other than Section 3(a) shall be dealt by officials of RBI of different ranks (Assistant General Manager to Chief General Manager) based on the amount involved (60 lakhs to 5 Crores and above) in contravention.
- Compounding of contravention of Section 3(a) of the Act (dealing in Forex without Authorisation) shall be dealt by officers in different ranks (Deputy Director to Special Director) of the Directorate of Enforcement depending on the amount involved ( 5 lakhs to 1 Crore and above) in contravention.
- The rules specify certain contraventions that shall not be compounded such as cases where suspected money laundering, terror financing etc. is involved, where adjudication order imposing penalty has already been passed, where the Compounding Authority feels the contravention requires further investigation etc.
- Disposal of compounding applications within 180 days from the receipt of such application.
- Payment of amount compounded can be made through DD/NEFT/RTGS or other electronic modes of payment within 15 days from date of compounding order.
Others
CCI through a notification dt September 09, 2024, has introduced The Competition Commission of India (Combinations) Regulations, 2024 marking major pivot in India’s competition law. To know more, read the highlights from below link.
Open Highlights of CCI
Open CCI notification dated September 09, 2024
Vide a Public Notice dated September 28, 2024, the Ministry of Home Affairs has extended the validity of Foreign Contribution Regulation Act (FCRA) registration certificates for certain entities. This applies to the following:
Category 1: Entities whose validity was extended until September 30, 2024, and have pending renewal applications. Their validity is now extended until December 31, 2024, or until their renewal application is processed, whichever is earlier.
Category 2: Entities whose 5-year validity period expires between October 1, 2024, and December 31, 2024, and have applied or will apply for renewal before the expiration date, validity in such cases has also been extended until December 31, 2024, or until their renewal decision is made.
If an entity’s renewal application is denied, their FCRA certificate will be deemed expired from the date of refusal, and they will not be eligible to receive or utilize foreign contributions.
IBBI Update
On September 24, 2024, IBBI announced the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2024. Key amendments include the following:
- Interim Representative Appointment: IBBI now allows for the appointment of Insolvency Professional as interim representative to act on behalf of a class of creditors when the authorized representative’s application is being reviewed by Adjudicating Authority.
- Rights and Duties: This interim representative will have the same rights and duties as an authorized representative in committee of creditors meetings including attending meetings.
This will aid in better representation of interests of large groups of creditors, like homebuyers, in the corporate insolvency resolution process.
DGFT Update
The Interest Equalisation Scheme (IES) has been extended until September 30, 2024, as notified by the DGFT.
Key changes include:
1. An annual net subvention cap of ₹10 crore per Import Export Code (IEC), with a ₹5 crore cap for MSME manufacturers until September 30, 2024 for the financial year starting 1st April 2024.
2. A cap of ₹2.5 crore for manufacturer and merchant exporters until June 30, 2024.
Note: The Interest Equalisation Scheme is a government initiative aimed at reducing the cost of export credit for Indian Exporters, particularly MSMEs. It provides an interest subsidy on pre and post-shipment rupee export credit, thus helping the exporters lower their financial costs.
Tax Updates
The Income Tax Department vide Circular dated September 17, 2024 has revised the monetary limits for filing appeals by the Department with an aim to reduce litigation. The new monetary thresholds, which are effective immediately are as follows:
- Rs. 60 lakh for appeals before the Income Tax Appellate Tribunal (ITAT),
- Rs. 2 crore for appeal before High Courts, and
- Rs. 5 crore for Supreme Court cases.
The Circular also states that the aforesaid revised limits will be applicable even for pending appeals and accordingly may be withdrawn.
The Ministry of Finance vide notification dated September 20, 2024 has notified Direct Tax Vivad se Vishwas Rules, 2024, effective from October 01, 2024. Vivad Se Vishwas scheme has been launched with an intention to resolve pending direct tax disputes and to settle disputes with reduced penalties and interest.
Vide Circular dated September 29, 2024 the CBDT has extended the timeline for filing tax audit report from September 30, 2024 to October 07, 2024.
GST Updates
Pursuant to references received from the trade and industry requesting for clarification regarding advertising services being provided by Indian advertising companies/agencies to foreign entities, CBIC has issued a circular dated September 10, 2024 to clarify that the foreign client remains the recipient of the services, even if there is a representative in India or the target audience is located in India. The circular elaborates on various issues and the department’s stand on each of the issue.
Representations have been received that some field formations are of the view that the place of supply of data hosting services provided by the service providers located in India to cloud computing service providers located outside India is the location of data hosting service provider in India.
The circular clarifies that where the data hosting services are provided to recipients located outside India, the place of supply is considered outside India, thus making these services eligible for export benefits as per the Act.
To facilitate the taxpayers in correct and accurate reporting of ITC reversal and reclaim thereof and to avoid clerical mistakes, a new ledger namely Electronic Credit Reversal and Re-claimed Statement was introduced on the GST portal. GSTN has issued advisory dated September 17, 2024 informing taxpayers of final opportunity to report their cumulative ITC reversal as follows:
- The functionality for reporting the opening balance will be available from September 15, 2024 to October 31, 2024.
- The amendments in declared opening balance will be available till November 30, 2024.
Pursuant to concerns raised regarding the validity of documents issued by the tax officers on the common portal viz. SCN/Orders without the Digital signatures on the pdf document downloaded from the common portal, GSTN vide Advisory dated September 26, 2024 has mentioned that such documents are generated on the common portal from the login of the officer, who logs in through Digital Signatures.
October 2024
Quote of the day
"The greatest self-care is honouring the promises that you made to yourself."
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.