Ministry of Home Affairs advises NGOs on 3 basic requirements for switch...

1.Obtaining Darpan ID,

2.Opening FCRA a/c in SBI New Delhi main branch

3. Seeding Aadhaar no. of all office bearers — depending on whether they have applied for FCRA nod or are yet to.

 

Advisory for Compliance by FCRA NGOs/Associations with the Amended Provisions in FCRA, 2010 and FCRR, 2011

 

Note: -

This advisory is meant for any association that belongs to one of the following categories:

(a) Those who have submitted application for registration/Prior Permission

 (b) Those who have submitted application for Renewal

 (c) Those who are yet to submit application for registration/Prior Permission

(d) Those who are yet to submit application for renewal

 (e) those who hold valid FCRA registration/Prior Permission and are not in immediate of renewal of such certificate/PP.

 

i. The NGO/person may take note of the amendments in the FCRA, 2010 and ensure compliance. These amendments may be visited at (https://fcraonline.nic.in).

 

ii. The NGO/person may take note of the amendments in the FCRR, 2011 for compliance.

These amendments may be visited at (https://fcraonline.nic.in/home/PDF_Doc/fc_rules_12112020.pdf).

 

iii. Among various requirements arising from these amendments, three key compliances relate to:

(i)                   Obtaining a DARPAN ID from NITI Aayog portal;

(ii)             (ii) Opening the Main “FCRA Account” in SBI Parliament Street Branch, New Delhi; and

(iii)        Seeding Adhaar details of all office bearers. An advisory statement on these three key compliances is attached herewith. It may be accessed at (https://fcraonline.nic.in/home/PDF_Doc/fc_rules_12112020.pdf).

 

iv. Regarding compliance on FCRA “Bank Accounts”, a separate public notice dated 13.10.2020 has been issued with detailed clarifications, and it can be accessed at (https://fcraonline.nic.in/home/PDF_Doc/fc_notice_13102020.pdf).

A standard operating procedure (SOP) to be followed by all branches of SBI is placed on the web portal (https://fcraonline.nic.in/home/PDF_Doc/fc_sop_20112020.pdf) and also available on the web portal of the State Bank of India.

 

2. Every person/association is, therefore, requested to carefully peruse and familiarize itself with all the amendments in the Act and the Rules and related contents as indicated above to ensure thorough compliance.

 NGO’s proactive response would facilitate a quick and smooth transition to the amended legal regime.

 

(Office of FCRA Wing of Foreigners Division, MHA)

COMPLAINTS AND ENQUIRIES RELATING TO PROFESSIONAL MISCONDUCT OF COMPANY ...

Special Resolution under clause (ii) of regulation 17(6) (e) of LODR Reg...

Whether Special Resolution is to be passed if total remuneration paid to all executive promotor directors exceeds 5% of the net profits of a listed company under LODR?

SEBI held that in case if the aggregate remuneration payable to all executive promoter directors exceeds 5 per cent of the net profits, the Company shall be required to pass a special resolution under clause (ii) of regulation 17(6) (e) of LODR Regulations, subject to the condition that such approval of the shareholders shall be valid only till the expiry of the term of such directors.

 Manaksia Aluminum Company Limited raised the  following question with SEBI  

In terms of regulation 17(6)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (10DR Regulations’), it is understood that in case the listed entity has one executive promoter director, it can pay upto 2.5% of the net profits or rupees 5 crore, whichever is higher, without passing a special resolution.

 In case of more than one such director in the entity, there is only a limit of 5 per cent of the net profits and absolute limit is not specified.

whether the Company shall be required to pass a special resolution under clause (ii) of regulation 17(6) (e) of LODR Regulations for appointment of one more executive promoter director if the aggregate remuneration payable to all executive promoter directors exceeds 5 per cent of the net profits or an absolute aggregate limit of INR 5 crore shall also become applicable as mentioned in clause (i) of the said regulations.

 

clause (ii) of regulation 17(6) (e) of LODR Regulations prescribes only a percentage limit (i.e. where there are more than one executive directors who are promoters or members of the promoter group, the aggregate annual remuneration to such directors exceeds 5 per cent of the net profits of the listed entity) and no absolute limit has been specified.

In case if the aggregate remuneration payable to all executive promoter directors exceeds 5 per cent of the net profits, the Company shall be required to pass a special resolution under clause (ii) of regulation 17(6) (e) of LODR Regulations, subject to the condition that such approval of the shareholders shall be valid only till the expiry of the term of such directors.

It may also be noted that the above views are expressed by SEBI only with respect to the clarification sought in your letter under reference with respect to the LODR Regulations and do not affect the applicability of any other law or requirements of any other SEBI Regulations, Guidelines and Circulars administered by SEBI or of the laws administered by any other authority.

 

 

INVESTIGATION OF COMPLAINTS AGAINST COMPANY SECRETARY THROUGH ONLINE NOW...

 

 

G.S.R. 696(E).— 10^th November 2020

Company Secretaries (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 (hereinafter referred to as said rules), in rule 2, in sub-rule (6), after clause (d), the following clause shall be inserted, namely:—

“(dd) “electronic mode” means and includes--

(i) filing of complaint, written statement, rejoinder, affidavits, or any other recognised electronic means or through the online portal; submissions and any other documents by email

(ii) online payment of prescribed fees or amount of fine or cost as may be imposed by the Board of Discipline or the Disciplinary Committee;

(iii) appearance and hearing through video conference or other audio visual means;

(iv) service of notices or summons or communications by email or any other recognized electronic means;”.

 

Service of Notice

in clause (a), after the words, “at his professional address”, the words, “or at email address as per the records of the Institute or such other recognized electronic modes”, shall be inserted;

(ii) in clause (b),

(a) after the words, “address of its head office”, the words, “or at email address as per the records of the Institute” shall be inserted;

(b) after the words, “maintained by the Institute”, the words, “or such other recognized electro

MCA Proposes Decriminilization of offences under LLP Act @ R V Seckar

The ministry of corporate affairs (MCA) has proposed to decriminalise certain compoundable offences under LLP Act, involving minor, procedural or technical violations “In order to provide greater ease of doing business in India to law abiding LLPs” it said. In a public draft on Friday, the MCA listed 20 sections of the LLP Act, ranging from registration or change of designated partners to maintaining books of accounts to the improper use of the words ‘LLP’, seeking public comments and stakeholder consultations given the importance and large scale impact of the proposal. “It has been decided to review the penal provisions of the Act to decriminalize compoundable offences...which may not involve any harm to public interest,” the draft said. However, all the sections it mentioned are punishable by only a fine of varying amounts and not imprisonment. Experts suggested that this particular exercise could be to streamline the fine amounts. “Not all criminal offences involve imprisonment, those with a fine amount are also criminal in nature as the offender can be taken to court to decide the liability,” Decriminalisation here implies the fine can be decided by regulators like the Registrar of Companies instead of the case going to court, The move was aimed at incentivising compliance, de-clogging the criminal justice system and promoting congenial business climate, the ministry said. “As a part of the current initiative, the Ministry of Corporate Affairs seems to be planning for an overhaul of penalty provisions applicable for filing or reporting non-compliances by the partners of limited liability partnership firms, which do not involve substantial violations or are contrary to the larger public interest,” The government has taken a series of such actions with decriminalisation of certain offences under the Companies Act earlier, and more recently a proposal to decriminalise minor offences under the financial laws. “Subsequent to the proposed decriminalisation of various offences under the Companies Act, 2013, the Government has turned its eye towards limited liability partnerships, a legal entity form commonly used by small and medium enterprises for doing business in India,”

NOW , TOP 1000 LISTED ENTITIES SHOULD CONSTITUTE RISK MANAGEMENT COMMITT...

SEBI on November 10, 2020  proposed extending the requirement of constituting a risk management committee to top 1,000 listed entities from 500 at present. The risk management committee should meet at least twice in a year from the current practice of minimum one meeting every year.

Considering the multitude of risks faced by listed entities, risk management has emerged as a very important function of the board. Further, the COVID-19 pandemic has reinforced the need for a robust risk management framework, as per SEBI.

While LODR (Listing Obligations and Disclosure Requirements) norms specify the role of various board committees of listed entities, defining the role and responsibilities of the risk management committee (except for cyber-security risk) is left to individual boards of listed entities.

 

SEBI has propsed the "requirement of constituting a risk management committee may be extended from the top 500 to the top 1,000 listed entities, on the basis of market capitalisation".

 

Sebi has suggested that quorum for a meeting of the committee should be either two members or one-third of the members of the panel, whichever is greater. This includes at least one member of the board of directors in attendance.

Company’s risk management committee would formulate a detailed risk management policy which will include a framework for identification of internal and external risks specifically faced by the listed entity. The risks include financial, operational, sectoral, sustainability (specifically, environmental, social and governance related risks and impact), information and cyber security.

The committee should be responsible for taking measures for risk mitigation, business contingency plan as well as monitoring and overseeing implementation of the risk management policy, It should also be responsible for keeping the board informed about the nature and content of its discussions, recommendations and actions to be taken.

Risk management committee should also have powers to seek information from any employee, obtain outside legal or other professional advice and secure attendance of outsiders with relevant expertise, if it considers necessary.

The appointment, removal and terms of remuneration of the chief risk officer, if any, would be subject to review by the risk management committee, jointly with the nomination and remuneration committee.

Further, the risk management committee should coordinate its activities with the audit committee in instances where there is any overlap with audit activities. It should ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the listed entity, according to SEBI

 

SEBI INVESTOR GRIEVANCE NOTIFICATION & EXTENSION OF LLP SETTLEMENT SCHE...

AND STOCK EXCHANGES SHOULD MONITOR AND KEEP RECORDS NOW.

SEBI Circulars Investor Grievance Redressal Mechanism (November 6, 2020)

In order to further strengthen the Investor Grievance Redressal Mechanism, SEBI has issued clarification to its circular dated August 11, 2010, February 09, 2011, and September 26, 2013 where it has clarified that Stock Exchange shall ensure that the investor complaints shall be resolved within 15 working days from the date of receipt of the complaint. Additional information, if any, required from the complainant, shall be sought within 7 working days from the date of receipt of the complaint. Stock Exchange shall maintain a record of all the complaints addressed/redressed within 15 working days from the date of receipt of the complaint/additional information.

---------------------------------------------------------

MCA Notification for extension of LLP Settlement Scheme 2020 –

MCA Circular 37/2020 dated 9 November 2020

In continuation to this Ministry’s General Circular no 13/2020 dated 30-3-2020 and in the General Circular No 31/ 2020 dated 28-9-2020 , the scheme was extended till 31^st December 2020 in view of large scale disruption caused by the Covid-19 pandemic and after due examination , it has been decided to extend the date on applicability of defaulting LLP and therefore, in serial number 3, para 8A, sub-para (iii) of the said circular dated 30-3-2020 , belated documents due for filing till 30^th November 2020 shall be substituted. All other requirements provided in the said circulars shall remain unchanged.

 

SAT IMPOSED A WHOPPING FINE ₹ 447 CRORES ON RELIANCE INDUSTRIES LTD FOR...

Securities Appellate Tribunal Order

• In the matter of Reliance Industries Ltd &Ors.

(November 5, 2020)

The Securities Appellate Tribunal (SAT) has directed

Reliance Industries Ltd (RIL) to make payment of the

disgorged amount of Rs. 447.27 Crore, along with simple

interest calculated at the rate of 12% p.a. with effect from

November 29, 2007 till the actual date of payment to SEBI

 

within 60 days from the date of this Order, while

dismissing an appeal filed by the company against the

SEBI order dated March 24, 2017.

The core question raised in the appeal was over the principal-agent model adopted by RIL and implemented with the help of the other entities. SEBI alleged they had dumped shares in the last 10 minutes of trading on November 29, 2007, the settlement day.

This was allegedly with an intention to artificially depress the price in the cash segment to make larger gains in futures contracts and was violative of SEBI regulations,

Sebi’s investigation revealed that the agency agreements separately entered into by RIL with the 12 entities were identical. These entities opened trading accounts with different brokers between October and early November 2007. Except for one entity, Dharti Investment and Holding Pvt. Ltd, the other 11 had no record of experience.

SEBI vide its order dated March 24, 2017 had barred RIL and other entities from dealing in equity derivatives in the futures and options segment for a period of one year, directly or indirectly, for allegedly indulging in fraudulent trades in Reliance Petroleum Ltd (RPL) in 2007. SEBI had also directed RIL to disgorge the amount.

 

VECHILE LOAN NOT REGISTERED WITH ROC , THEN IT WILL NOT ENTITLE TO FALL ...

Many are of the view that vehicle loan is need not to be registered as charge under Companies Act . As it is registered by way of hypothecation registration with the Regional Transport Office (RTO) in terms of Section 51 of the Motor Vehicles Act, 1988.

If you do not register the charge with ROC , then , you will not be considered as secured creditor when company is under winding up and you will be treated as unsecured creditor.

This was decided in

Volkswagen Finance Private Limited  vs. Shree Balaji Printopack Pvt. Ltd  as decided by NCALT on October 19, 2020.

 

Charge’ was not registered as per the provisions of Section 77 (1) of the Companies Act 2013 and as envisaged under the Insolvency and Bankruptcy Code, 2016, hence the Creditor cannot be treated as a ‘Secured Creditor’

 

Fact of the Case

The Respondent Company (under Liquidation) namely Shree Balaji Printopack Pvt. Ltd. executed a Loan and Hypothecation Agreement on November 25, 2013, for an amount of Rs. 36,00,000/- payable in 84 monthly instalments of Rs. 61,964/-, for the purchase of an AUDI Q3 TDI 2.0 vehicle.

The Appellant claimed that they have security of the vehicle in terms of Sections 52 and 53 of the Insolvency and Bankruptcy Code, 2016 and a demand of Rs. 21,83,819.18/- was made which was not paid by Respondent and hence there was a ‘default’ giving rise to a legitimate claim.

The Appellant filed its claim on 22.07.2019 with the Liquidator and had informed the Liquidator that the ‘Charge’ was duly registered by way of hypothecation registration with the Regional Transport Office (RTO) in terms of Section 51 of the Motor Vehicles Act, 1988 and there was no requirement of registration of ‘Charge’ with the ROC. The Liquidator, dismissed the Claim made by the Appellant.

Being aggrieved with the decision the Appellant approached the NCLT, New Delhi Bench, but the appeal was further rejected by NCLT and they upheld the order of Liquidator.

The main issue which falls for consideration in this Appeal is:

whether the Liquidator was justified in rejecting the Application filed by the Appellant on the ground that the Appellant was not a ‘Secured Financial Creditor’ in the absence of the ‘Charge’ being registered with the ROC under Section 77 (1) of the Companies Act 2013. that the Registration of Hypothecation by way of ‘Charge’ under Section 51 of Motor Vehicles Act, 1988 would stand nullified, if the ‘Charge’ was not registered under the Companies Act, 1956/2013.

 NCLAT observed from the documentary evidence on record that no ‘Charge’ has been registered under Section 77(1) of the Companies Act 2013 and Appellant ‘Claim’ was not supported by the provisions under Regulation 21 of IBBI (Liquidation Process) Regulation, 2016. Further, the contentions of the Appellant that Registration with Motor Vehicle Authority under Section 51 of the Motor Vehicles Act, 1988 would suffice, cannot be sustained.

 

Judgment

Hence, it is held that when ‘Charge’ was not registered as per the provisions of Section 77 (1) of the Companies Act 2013 and as envisaged under the Insolvency and Bankruptcy Code, 2016, the Creditor cannot be treated as a ‘Secured Creditor’. Thus, this Appeal is accordingly dismissed.

 

What We Learned from the case ?

·       Charge’ was not registered as per the provisions of Section 77 (1) of the Companies Act 2013 and as envisaged under the Insolvency and Bankruptcy Code, 2016, hence the Creditor cannot be treated as a ‘Secured Creditor’

·       No ‘Charge’ has been registered under Section 77(1) of the Companies Act 2013 and Just Registration with Motor Vehicle Authority under Section 51 of the Motor Vehicles Act, 1988 would not suffice

·       Many banks and lenders are under impression that they need not register a charge with ROC which is a misconception.

 

 

WHETHER NON-PERFORMING , DORMANT LISTED COMPANIES WILL BE EXEMPTED FROM ...

Section 204 of the Companies Act, 2013 mandates every listed company to annex a Secretarial Audit Report, given by a company secretary in practice with its Board’s report.

As per rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the prescribed class of companies is as under:

• every public company having a paid-up share capital of fifty crore rupees or more
• every public company having a turnover of two hundred fifty crore rupees or more
• every company having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more.

 

The format of the Secretarial Audit Report shall be in Form No. MR.3.To point out non-compliances and inadequate compliances;

Major qualifications dominated in SA report is as follows:

·     Non-appointment of independent directors

·     Improper composition of the board of directors or committees

·     Non-appointment of women director

·     Delay in filing forms with ROC

 

Amradeep Industries Ltd.  Share price 0.88p

 

Qualifications made by Secretarial Auditor   Non- compliance of Clause 49 - Corporate Governance	The paid up capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance clause. Hence The Company has decided not to opt for compliance of Clause 49 for the time being.
a) The Company has decided not to opt for compliance of Clause 49 for the time being	The notice and agenda for the Board and committee meeting are sent by the email or hand delivery.
b) Acknowledgement for sending the notices of the Meeting of the Board and Committees are not maintained by the company.	The company will ensure to maintain to the acknowledgements for sending the notice of the meeting of the board and the committee.
c) Updating of website with regard to various policies is pending	The company will take necessary steps to update website with regard to various policies which are pending.
The company has not complied with certain clauses of Listing Agreement as regards publication of Notice of Board Meeting, Notice of AGM, quarterly results.	The company will take necessary steps to comply with the same.
As per section 203(1)(i),(ii) & (iii), the Company Act 2013 is required to appoint Company Secretary & Chief Financial Officer. The Company has not appointed Company Secretary & Chief Financial Officer.	Since the Company does not have any significant business activities, hence the Volume and Scope of work for the Company Secretary and Chief Financial Officer are less and it is not a full time work and the job of Company Secretary and Chief Financial Officer are not attractive commensurate with the scope of work and salary.
As per Internal Auditor section 138 of the Companies Act, 2013, the Company is required to appoint. The Company has not appointed Internal Auditor.	The size of operation of the Company is very small, it is not viable to appoint Internal Auditor but the Company has established the internal control system.
The company has not maintained the attendance register for Board and committee meeting	The company will take necessary steps to maintain the attendance register for board and committee meetings.
Statutory Registrar as per companies Act 2013 is yet to be updated.	The company will take necessary steps to update Statutory Register as per companies Act 2013.
As per the provisions of Section 149(1) of the Companies Act, 2013 and revised clause 49 of the listing agreement, the Company is required to have at least one Women Director on its Board. The Company has not appointed Women Director.	The Company is in process for appointing of Women Director once suitable and if any willing candidate agrees to join the Company.
Certain event based E Forms have not been filed by the company in time which were required to be filed with ROC during the audit period.	The company will ensure to file all relevant documents in time with ROC and other authorities as when required.

 

Amradeep Industries Ltd.  Share price 0.88p

 

The company is non-performing , listed company and the is showing just Rs 1 lac income in the year 18-19.

 

There is no meaning compelling those listed dormant companies to undergo secretarial audit as secretarial auditor may have to qualify the entire report with qualification.

 

SEBI should consider to exempt such of those dormant , non-performing listing companies to undergo secretarial audit.