Company to disclose details of SBN in balance sheet held and transacted during demonetisation period from 08-11-2016 to 30-12-2016

Company to disclose details of SBN in balance sheet held and transacted during demonetisation period from 08-11-2016 to 30-12-2016 

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION

New Delhi, the 30th March, 2017

G.S.R. 308(E).—In exercise of the powers conferred by sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following further amendments to Schedule III of the said Act with effect from the date of publication of this notification in the Official Gazette, namely:-

2. In the Companies Act, 2013 (hereinafter referred to as the principal Act), in Schedule III, in Division I, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6, after clause ‘W’, the following clause shall be inserted namely:-

“X. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 as provided in the Table below:-

	SBNs	Other denomination notes	Total
Closing cash in hand as on 08.11.2016
(+) Permitted receipts
(-) Permitted payments
(-) Amount deposited in Banks
Closing cash in hand as on 30.12.2016

Explanation : For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”.

3. In the principal Act, in Schedule III, in Division II, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6, after clause ‘J’, the following clause shall be inserted namely:-

“K. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016 as provided in the Table below:-

	SBNs	Other denomination notes	Total
Closing cash in hand as on 08.11.2016
(+) Permitted receipts
(-) Permitted payments
(-) Amount deposited in Banks
Closing cash in hand as on 30.12.2016

Explanation : For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”.

[F. No. 17/62/2015-CL-V (Vol.I)]
AMARDEEP S. BHATIA,
Jt. Secy.

Note : Schedule III of the Companies Act, 2013 came into force with effect from the 1st April, 2014 vide Notification S.O. 902(E), dated 26.3.2014, subsequently amended vide G.S.R. 679(E), dated 04.09.2015 and vide G.S.R. 404(E), dated 06.04.2016.

Auditors to report on company disclosure of SBN during demonetisation period from 08-11-2016 to 30-12-2016

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi, the 30th March, 2017

G.S.R. 307(E).—In exercise of powers conferred by section 143 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Audit and Auditors) Rules, 2014, namely:—

1. (1) These rules may be called the Companies (Audit and Auditors) Amendment Rules, 2017. 
   (2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Audit and Auditors) Rules, 2014, in rule 11, after clause (c), the following clause shall be inserted, namely:—

“(d) whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.”.

[F. No. 1/33/2013-CL-V-(Vol.I)] 
AMARDEEP SINGH BHATIA, 
Jt. Secy.

Market regulator Securities and Exchange Board of India (SEBI) has imposed a Rs 1,000 crore penalty on Reliance Industries, the largest penalty in SEBI’s over 20 year history.

Market regulator Securities and Exchange Board of India (SEBI) has imposed a Rs 1,000 crore penalty on Reliance Industries, the largest penalty in SEBI’s over 20 year history.

In a case dating back to 2007, SEBI has found Reliance Industries and 12 related entities guilty of fraudulent and manipulative trades.

The SEBI order, published on its website on March 24, 2017, says Reliance Industries and the 12 other entities violated provisions of Section 12A of the SEBI Act, 1992 and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the securities market) Regulations, 2003.

The regulator has prohibited the 13 entities, including Reliance Industries, “from dealing in equity derivatives in the F&O segment of the stock exchange, directly or indirectly for a period of one year”, from the date of the order.

The regulator has also directed Reliance Industries to, “to disgorge an amount of Rs 447.27 crore...along with interest calculated at the rate of 12 percent per annum from November 29, 2007 onwards, till the date of payment”. BloombergQuint calculated the interest amount to be approximately Rs 500 crore as of date.

Reliance Industries has 45 days to make the payment.

BloombergQuint has not yet been able to reach the company for a comment on the order, or on whether it intends to appeal it in the Securities Appellate Tribunal.

Courtesy -BloombergQuint 

Misconduct on the part of chartered accountants- nclt refers the case to the institute of chartered accountants for investigation.

Misconduct on the part of chartered accountants- nclt refers the case to the institute of chartered accountants for investigation.

East India Investments Holdings PTE Ltd v Mr Sudhindran Parikkal & Mr Chockalingam – NCLT Chennai bench

It was alleged by the petitioner that Respondents are being chartered accountants who certified the company documents such as DIR-12 , INC-22 without proper verification and without following the procedures laid down in the declaration contained in the certificates.

It was contended by the petitioners that the practising professionals colluded with company and certified the documents with the mala fide intentions mainly for promoting personal gain and with an intention to defraud.

The petitioner considered the erred chartered accountants and included them in the petition and prayed for a direction to the Institute of Chartered Accountants of India to initiate disciplinary action against the erred professionals.

The chartered accountants averred their innocence and claimed immunity against false allegation as they certified the documents on the basis of the information provided by the company officials.

The petitioner argued that if such kind of misconduct is not taken note of , then , the same is likely to encourage other such chartered accountants to follow suit where the reputation of Chartered Accountants Institute will be finally in peril.

In this case , the NCLT referred the allegations on the chartered accountants involved and directed the Institute of Chartered Accountants of India to initiate the investigation of professional and other misconduct .

The above case is an eye opener to all the professionals who are certifying the forms for MCA to show utmost care and diligence and check for all the information needed before certifying forms for filing with the ROC.

If Notice of the Board Meeting is not served to a director , then it tantamount to oppression of the minority director at the hands of majority director – Says NCLT Delhi Bench.

If Notice of the Board Meeting is not served to a director , then it tantamount to oppression of the minority director at the hands of majority directors – Says NCLT Delhi Bench.

In the matter of Mr.Daya Kishan & Ors v. Mr Dinesh International Ltd & Ors - NCLT - New Delhi- Bench III

Delhi Bench of NCLT ordered that Petitioner suffered oppression at the hands the Respondents for non-compliance of statutory requirements.

Facts of the Case:

It was alleged by the Petitioner that there was an abuse of Section 286 of the Companies Act, 1956 and Articles of Association (‘AOA’) of the Company on the footing of non-receipts of notice of Board Meetings which resulted in the  oppression  of the minority director and subsequently decision was in the EoGM to increase the share capital through allotment of shares which lead to the lessening of Petitioner’s percentage of equity shareholding of the company for which no advance notice was not served on the Petitioner.

 NCLT pronounced  that though Respondent Company was a closely held company consisting of family members however even as a matter of practice, company should have given at least oral information regarding convening of the Board Meeting when a association is at its low ebb. In such scenario, parties should confirm adherence not only according to the Company law but also in harmony with the AOA.

DECISION OF THE NCLT

NCLT accepted the Petitioner’s plea that no board meeting was really convened and the minutes recorded/ resolution passed were subsequently fictitious. NCLT held that transfer of assets of a corporate body to another group entity was wholly unfounded and mysterious even if there was partnership account of both parties.

NCLT further observed that  that the transfer of the Company’s documents and records from its registered office was not only against the legal obligation but also was kept out of Petitioner’s access thus holds that Respondent was clearly divesting the Petitioner of his privilege as a Director in the Company thereby tumbling it to a “zero”. Therefore, NCLT , Delhi Bench cancelled the resolutions passed / decision taken in the Board Meetings and EoGM.

NCLT ORDERS TO PAY A COMPOUNDING FEE OF Rs 2,00,000 BY M/s MVM Metal and Alloys Pvt Ltd FOR FILING OF ILLEGIBLE ACCOUNTS WITH THE ROC

NCLT ORDERS TO PAY A COMPOUNDING FEE OF Rs 2,00,000 BY M/s MVM Metal and Alloys Pvt Ltd FOR FILING OF ILLEGIBLE ACCOUNTS WITH THE ROC

⁠⁠⁠ Case: M/s MVM Metal and Alloys Pvt Ltd

Company filed financial statements for 2011-12 which were not legible, NCLT compounded the offence on payment of fine of Rs. 50,000 each on the Directors and on the Company totalling Rs. 2,00,000.

Facts: The attached financials which were filed by the Company for the Financial Year 2011-12 in e form were not legible and therefore were not accepted by the ROC and hence the same were not taken on record, thus attracted the violation of Section 162 of the Companies Act, 1956.

Thereafter, the Directors of the Company filed the same in year 2013 and the ROC took the date of filing the hard copy as the date of Compliance and accordingly the Compounding fees was recommended by the ROC to NCLT for the levy of Compounding Fees up to the date of filing of filing of those Financials.

What the Company Act 1956 Says

 Section 162 of the Companies Act, 1956 says: If a company fails to comply with any of the provisions contained in section 159, 160 or 161, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to Rs. 500 for every day during which the default continues.

NCLT is more powerful than CLB

It is time for the company secretaries in employment to know that Registrar is having more power under Companies Act ,2013 and ROC is now initiating those company’s which are not adhering the CA 2013 provisions in letter and spirit. Now , to safeguard the directors of the company for having committed an offence under CA 2013 and paying a compounding fee , Company secretaries are to be more vigil to see that annexures to accounts are legible and readable  which is filed with the Registrar of Companies. 

Courtesy : CS Amerendra  

M/s CARMEL ASIA HOLDINGS PRIVATE LIMITED WAS ASKED TO PAY A COMPOUNDING FINE OF Rs 4,72,675 for Not Appointing Company Secretary

M/s CARMEL ASIA HOLDINGS PRIVATE LIMITED WAS ASKED TO PAY A COMPOUNDING FINE OF Rs 4,72,675 for Not Appointing Company Secretary

Bangalore NCLT has made remarkable verdict where it ordered to pay a compounding fee of Rs 4,72,675 for Not Appointing Company Secretary .

The Company approached the erstwhile CLB and the present NCLT , Bangalore to compound the offence committed by it under section 383A for not appointing company secretary under section 383 A of the Companies Act ,1956. (Section 203 of Companies Act 2013)

It was argued by the petitioner company that even though it had appointed many company secretaries , they left the company in search of green pastures.

The Practicing Company secretary of the Company has informed the NCLT that the petitioner company is a subsidiary of M/s Sandur Power Company Limited and did not have adequate business activities and due to limited exposures , the appointed company secretaries are leaving the company in a short period. As such , the company is not able to get full time secretary during the intervening period.

It reflects that Petitioner Company has taken reasonable efforts to comply with the provision of the section 383 A of the CA 1956 but could not get a Company Secretary for the continuous period.

383A. Certain companies to have secretaries (1)  Every company having such paid-up share capital as may be prescribed (Rs.  5 crores) shall have a whole-time secretary and where the Board of directors of any such company comprises only two directors, neither of them shall be the secretary of the company: Provided that every company not required to employ a whole-time secretary under sub-section (1) and having a paid-up share capital of 10  lakh rupees or more shall file with the Registrar a certificate from a secretary in whole-time practice in such form and within such time and subject to such conditions as may be prescribed, as to whether the company has complied with all provisions of this Act and a copy of such certificate shall be attached with Board’s Report referred to in Section 217.

It is to be noted that argument by the company that it took earnest efforts to appoint a company secretary and is using the services of a practicing company secretary was not accepted by the NCLT , Bangalore.

Now  , the available company secretaries has touched the land mark trend of 50000 numbers , companies in India cannot argue that adequate company secretaries are not available for employment and they are taking earnest efforts to find a company secretary or using the services of a practicing company secretary.

There are lot of company secretaries who have qualified recently are find it difficult to sit in a job and they are jobless. They are vexed to blame themselves for successfully completing the company Secretaries course.

If any member finds that a company avoids to fill in a company secretary position , they can bring it to the notice of concerned Registrar of Companies.

NCLT , Bangalore decision is a land mark decision and it is an eye opener for those erring companies which has not appointed a company secretary.