“Happiness is when what you think, what you say, and what you do … Jan 19 -16.pdf · CS Manoj Kumar - 9910688433 CS Aishwarya Mohan Gahrana - 9650338103 CS Divesh Goyal - 8130757966

Monthly • Volume XXXVIII • Page 1-24 • No.08 • January, 2019

National Best Regional Council (2004, 2007, 2008, 2009, 2010, 2011, 2013, 2014, 2015 & 2016)

Dear Professional Colleagues,

I would like to express my sincere gratitude to you from the bottom of my heart for all your support, guidance and trust during my tenure at NIRC-ICSI. This will be my last address as Chairman of the NIRC of the ICSI.

First of all, I would like to wish you a very happy & prosperous New Year 2019, Republic Day, Makar Sankranti, happy Lohri to you and your families.

Success is everyone’s mission. Life is full of challenges and opportunities, but only for those who actually struggle to grab the opportunities and overcome the challenges. Hard

“Happiness is when what you think, what you say, and what you do are in harmony.

The weak can never forgive. Forgiveness is the attribute of the strong. Where there is love there is life”

-Mahatma Gandhi

work and dedication are the only mantra in the journey to success. Without being passionate and the willingness to work hard, no one can achieve success.

Mahatma Gandhi said “Strength does not come from physical capacity. It comes from an indomitable will.” So far success in our own context, it must be to successfully complete the professional and personal assignments on time, updation of knowledge by regular participation in the programmes and active contribution through every possible aspect. But life in reality is a bigger sea; in fact it’san ocean, which we will have to swim across. Sometimes life may hit us as hard as a brick does; but don’t

NIRC - ICSI Newsletter | January 2019 2

From the Chairman

Chairman CS Pradeep Debnath 09910562121

Vice-Chairman CS Rajeev Bhambri 09915710010

Secretary CS Nitesh Kumar Sinha 09871500827

Members(in alphabetical order)

CS Amit Gupta 09415005108

CS Avtaar Singh 09999789891

CS Deepak Arora 09351788834

CS Dhananjay Shukla 09873347280

CS Manish Aggarwal 09988114441

CS Manish Gupta 09212221110

CS Monika Kohli 09810480983

CS NPS Chawla 09958535300

CS Saurabh Kalia 09810979440

Ex-officio Members CS Rajiv Bajaj 09811453353

CS Ranjeet Pandey 09810558049

CS Satwinder Singh 09871686000

CS Shyam Agrawal 09314923451

CS Vineet K Chaudhary 09811577123

Regional Director Dr. Mukesh Jinara 09829345200

The Regional CounCil

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MeMBeRS oF exPeRT ADVISoRy for NIRC-ICSI Newsletter-Insight

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Glimpses of the various programs organised during the year.


From the Chairman

lose hope. Always believe that those who don’t give up can only meet the success ultimately. Many people define success by ‘its name, fame, recognition, big house, car, fat bank balance, etc.’ But I would say, the interpretation of success may change from person to person. The ultimate success is happiness and satisfaction. It’s important that you pursue your passion and love. Don’t follow other’s dream; instead follow your goals and dreams. For you are not someone else; you have your identity and capacity and work accordingly in order to achieve the real success.

Swami Vivekananda said "Take up one idea. Make that one idea your life – think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success." To follow the footsteps we are keep on doing various activities at NIRC-ICSI. A summary of the same is as under:

PRoGRAMS FoR MeMBeRS oRGANISeD DuRING THe MoNTHS oCT To DeC 2018

on 20th october, 2018 a workshop was organised on GST: E Way Bill, Input Tax Credit, Annual Return, and TDS under GST. CS Payal Kataria Oberoi was the guest speaker.

on 27th october, 2018 a Seminar on the topic “NBFC & FEMA: Recent Developments and opportunities” was organised at Eros Hotel, Nehru Place, New Delhi and Shri SSK Pradhan, General Manager, NBFC, RBI was the Chief Guest and Shri Gopal Krishna Agarwal, Central Council Member of ICSI (Government Nominee) was the Guest of Honour during the Seminar. A large number of members have participated in the seminar and got updation on the subject. The members were benefited with the latest development and interpretation of important Rules.

on 17th November, 2018 a Seminar on “ICSI Vision 2022 & Recent Developments in Companies Act was organised at Hotel Piccadilly, Janakpuri, New delhi. CS Pavan Kumar Vijay, Past President, ICSI and CS S Sudhakar, Vice President (Legal), Reliance Industries Limited and CS Savithri Parekh, Chief Compliance officer, Reliance Industries Limited were the Guest Speakers during the Seminar. A large number of members took part in the seminar and got their knowledge updated.

on 8th December, 2018, a Seminar on the topic

“Commercial Contracts: Negotiations, Drafting and

Litigations” was organised for members. Large number

ofmembers participated in the Seminar Students Programs

organised during the months October, 2018 to December,

2018.

on 11th october, 2018 Joint Inaugural Function of 285th

& 286th Management Skills Orientation Program was

organised. CS Ashok Kumar Dixit, Officiating Secretary,

ICSI was the chief guest and CS Balbir Singh, Company

Secretary, Punjab National Bank was special Guest on

the occasion. The Chief Guest shared his practical life

experiences with the participants. The special guest

were motivated the participants and took queries and

responded with genuine facts and market approach.

From 1st october, 2018 to 9th october, 2018: 70th

Batch of the Executive Development Program (EDP) was

organized at NIRC of the ICSI for the Students.

on 10th october, 2018; 18th october, 2018 & 25th october, 2018: Professional Development Program (PDP)

was organized at NIRC of the ICSI for the Students.

From 29th october, to 30th october, 2018: 20th Batch

of the 2 Days Induction Program was organized at NIRC of

the ICSI for the Students.

From 31st october, 2018 to 2nd November, 2018: 20th,

21st & 22nd Batches of the 3 Days e-Governance Program

were organized at NIRC of the ICSI for the Students.

on 5th october, 6th october, 11th october, 12th october, 16th october, 17th october, 3rd November, 29th November, 30th November, 10th December, 2018: Career awareness Programmes were organized at

various locations of the Delhi area for the benefit of the

students of the Schools and Colleges.

on 5th october, 6th october, 11th october, 16th october, 17th october, 3rd November, 10th December 2018 : Career Fairs Programmes were organized at various

locations of the Delhi area for the benefit of the students

and general public.


THe FolloWING PRoGRAMMeS WeRe AlSo DoNe AT NIRC-ICSI:

A summary of the other programs is also provided here under.

on 2nd January, 2019 ICSI Convocation was scheduled at Siri Fort Auditorium at August Kranti Marg, Siri Fort Institutional Area, Siri Fort, New Delhi, Delhi.

on 3rd January, 2019 287th MSOP Batch was inaugurated at NIRC-ICSI.

a) New Year Celebrations Celebration on 4.1.2019.

b) 5 Days Practical Training on NCLT Practice and Procedures at NIRC- ICSI from 8.1.2019 to 13.1.2019.

c) CS Connect for Members at Premises of NIRC-ICSI 7.1.2019.

d) Campus Placement for Members at NIRC-ICSI 15.1.2019.

e) Campus Placement for Trainees at NIRC-ICSI 16.1.2019e) Symposium on “New India : Surging Ahead (Role of

Good Governance)” ON 17.01.2019

NIRC oRGANIzeD FolloWINGS TRAINING PRoGRAM DuRING THIS TeNuRe:

12 Batches of Management Skills Orientation Programme (MSOP); 7 Batches of Executive Development Programme (EDP); 24 Batches of Professional Development Programme (PDP); 5 Batches of 2 Days Induction Programme; 7 Batches of 3 Days E-Governance Programme; 5 Batches of 5 Days Skill Development Programme and 4 Batches of 5 Days Entrepreneurship Development Programme for the Students.

In order to strengthen the practical knowledge of members and students, NIRC formulated Moot Court Room wherein we are providing practical insight of court proceedings, court crafting, drafting and pleadings to improve parking space, NIRC built outer Platform, Video Conferencing Room to dessiminate the information and lectures at various place of NIRC/chapters, Repairing/Renovation of Auditorium, improved Reception Counter, IT Facility Center to give practical knowledge of Tally, GST filings, Excel and other IT related tools to students and

members. NIRC had done certain activities to create brand

of profession during 2018 i.e; holding Joint Programme with NIRC of ICAI; Permanent signage at Rajendra Place Metro Station to show direction of NIRC Premises without

any costing; better placement of Members- in PSUs’ in the

package of more than 12 Lakhs p.a., Better performance

by OT students- 1st All India Rank in the CS Foundation

Examination results declared in Feb., 2018, Strengthen the

students training programs including MSOP etc.

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Lastly, my heartiest thanks to President and Vice-President

-ICSI, all the Central & Regional Council Members of NIRC-

ICSI for their support, guidance and valuable contribution.

I am thankful all the Members, Students and their beloved

families for kind support through out the year.

I also extend my sincere thanks to Past Chairmen-NIRC-ICSI,

Past Presidents-ICSI, Former Regional and Central Council

Member, Member of All Chapter Management Committee

of NIRC-ICSI, ICSI Secretariat, Regional Director and NIRO

Team for their valuable contribution. I am highly thankful

to my parents & family members who always stand behind

me for my contribution to the profession.

At the end, I congratulate all the newly elected Regional

and Central Council Members of NIRC-ICSI.

Regards

CS Pradeep DebnathChairman, NIRC-ICSI

18 January, 2019

From the Chairman


INTRoDuCTIoN

Intellectual property (IP) pertains to any original creation of the human intellect such as artistic, literary, technical, or scientific creation. Intellectual property rights (IPR) refers to the legal rights given to the inventor or creator to protect his invention or creation for a certain period of time. These legal rights confer an exclusive right to the inventor/creator or his assignee to fully utilize his invention/creation for a given period of time. It is very well settled that IP play a vital role in the modern economy. It has also been conclusively established that the intellectual labor associated with the innovation should be given due importance so that public good emanates from it. There has been a quantum jump in research and development (R&D) costs with an associated jump in investments required for putting a new technology in the market place. The stakes of the developers of technology have become very high, and hence, the need to protect the knowledge from unlawful use has become expedient, at least for a period, that would ensure recovery of the R&D and other associated costs and adequate profits for continuous investments in R&D. IPR is a strong tool, to protect investments, time, money, effort invested by the inventor/creator of an IP, since it grants the inventor/creator an exclusive right for a certain period of time for use of his invention/creation. Thus IPR, in this way aids the economic development of a country by promoting healthy competition and encouraging industrial development and economic growth.

INTelleCTuAl PRoPeRTy SySTeM AT GloBle :

The concept of intellectual property is not new as Renaissance northern

Italy is thought to be the cradle ofthe Intellectual Property system. A Venetian Law of 1474 made the first systematic attempt to protectinventions by a form of patent, which granted an exclusive right to an individual for the first time. In the samecentury, the invention of movable type and the printing press by Johannes Gutenberg around 1450,contributed to the origin of the first copyright system in the world.

Towards the end of 19th century, new inventive ways of manufacture helped trigger large-scaleindustrialization accompanied by rapid growth of cities, expansion of railway networks, the investment ofcapital and a growing transoceanic trade. New ideals of industrialism, the emergence of stronger centralizedgovernments, and nationalism led many countries to establish their modern Intellectual Property laws. At thispoint of time, the International Intellectual Property system also started to take shape with the setting up ofthe Paris Convention for the Protection of Industrial Property in 1883 and the Berne Convention for theProtection of Literary and Artistic Works in 1886. The premise underlying Intellectual Property throughout itshistory has been that the recognition and rewards associated with ownership of inventions and creativeworks stimulate further inventive and creative activity that, in turn, stimulates economic growth.

INTelleCTuAl PRoPeRTy SySTeM IN INDIA :

In India Patent Act was introduced in the year 1856 which remained in force for over 50 years, which was subsequently modified and amended and was called "The Indian Patents and Designs Act, 1911". After Independence a comprehensive bill on patent rights was enacted in the year 1970 and was called "The Patents Act, 1970".

Specific statutes protected only certain type of Intellectual output; till recently only four forms were protected. The protection was in the form of grant of copyrights, patents, designs and trademarks. In India, copyrights were regulated under the Copyright Act, 1957; patents under Patents Act, 1970; trademarks under Trade and Merchandise

Article on Intellectual Property Right

CS Vinod Singh Sinsinwar | [email protected] CS yogesh Gupta | [email protected].

*The views expressed are personal views of the author and it should not be taken as views of the NIRC-ICSI.

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Marks Act 1958; and designs under Designs Act, 1911.

With the establishment of WTO and India being signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), several new legislations were passed for the protection of intellectual property rights to meet the international obligations. These included: Trade Marks, called the Trade Mark Act, 1999; Designs Act, 1911 was replaced by the Designs Act, 2000; the Copyright Act, 1957 amended a number of times, the latest is called Copyright (Amendment) Act, 2012; and the latest amendments made to the Patents Act, 1970 in 2005. Besides, new legislations on geographical indications and plant varieties were also enacted. These are called Geographical Indications of Goods (Registration and Protection) Act, 1999, and Protection of Plant Varieties and Farmers’ Rights Act, 2001 respectively.

TyPeS oF INTelleCTuAl PRoPeRTIeS AND THeIR DeSCRIPTIoN

Originally only patent, trademarks, and industrial designs were protected as ‘Industrial Property’, but now the term ‘Intellectual Property’ has a much wider meaning. IPR enhances technology advancement in the following ways:

(a) it provides a mechanism of handling infringement, piracy, and unauthorized use

(b) It provides a pool of information to the general public since all forms of IP are published except in case of trade secrets.

IP protection can be sought for a variety of intellectual efforts including

(i) Patents

(ii) Industrial designs relates to features of any shape, configuration, surface pattern, composition of lines and colors applied to an article whether 2-D, e.g., textile, or 3-D, e.g., toothbrush

(iii) Trademarks relate to any mark, name, or logo under which trade is conducted for any product or service and by which the manufacturer or the service provider is identified. Trademarks can be bought, sold, and licensed. Trademark has no existence apart from the goodwill of the product or service it symbolizes

(iv) Copyright relates to expression of ideas in material form and includes literary, musical, dramatic, artistic, cinematography work, audio tapes, and computer software.

(v) Geographical indications are indications, which identify as good as originating in the territory of a country or a region or locality in that territory where a given quality, reputation, or other characteristic of the goods is essentially attributable to its geographical origin.

A patent is awarded for an invention, which satisfies the criteria of global novelty, non-obviousness, and industrial or commercial application. Patents can be granted for products and processes. As per the Indian Patent Act 1970, the term of a patent was 14 years from the date of filing except for processes for preparing drugs and food items for which the term was 7 years from the date of the filing or 5 years from the date of the patent, whichever is earlier. No product patents were granted for drugs and food items. A copyright generated in a member country of the Berne Convention is automatically protected in all the member countries, without any need for registration. India is a signatory to the Berne Convention and has a very good copyright legislation comparable to that of any country. However, the copyright will not be automatically available in countries that are not the members of the Berne Convention. Therefore, copyright may not be considered a territorial right in the strict sense. Like any other property IPR can be transferred, sold, or gifted.

MoDIFICATIoN/AMeNDMeNT IN IPR lAWSBesides to the most recent developments, in order to bring progressive changes towards a free market society, rapid liberalization of international trade practices and demonstrating its commitments to the WTO under the Trade Related Intellectual Property Rights Agreement (TRIPS), the Government of India undertook a series of steps, to conform India IP legislation to acceptable international standards. The regulations relating to all forms of IP have been amended or reissued in recent years, mainly in response to India’s accession to the WTO. Here are some of these developments in IP legislation in India.

1. TRADeMARK lAW BRouGHT AT PAR WITH INTeRNATIoNAl PRACTICeS

To bring Indian trademarks law in line with international practices and to ensure implementation of India's commitments under the TRIPS

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Agreement, India replaced the Trade and Merchandise Marks Act, 1958, with the Trade Marks Act, 1999. Some changes under the 1999 Act are as follows:

� Service marks, for the first time, made protectable through registration.

� The definition of "trade mark" now includes graphic representations, shapes, Packagings and combinations of colors, thereby widening IPR protection.

� The procedure for registration of trademarks expedited by removing the earlier system of Part A and B registration. In addition, only a single application need now be filed for registration of a trademark in different classes. The 1999 Act also provides for the classification in conformity with recognized International Classification of Goods and Services.

� The period of registration and renewal has been increased from seven to ten years.

� The definition of "trademark infringement" has been broadened to give protection beyond the use of identical/deceptively similar marks in relation to goods for which they are registered.

� An action for infringement of trademark/passing-off can be filed in a district court within whose jurisdiction the plaintiff (trademark proprietor) resides or carries on business, as against the earlier law which required the suit to be filed at the defendant's place.

� Under the new law, both registered and unregistered trademarks can be assigned with or without the goodwill of the business.

Recently, by way of the Trademarks (Amendments) Rules, 2014, the fee with respect to trademark filing has been increased in certain cases. The fee for an expedited examination have also been increased. Further, the Trade Marks Registry recently issued an Office Order little with respect to alterations that may be made to an application for trademark registration. This Order enlists certain ‘substantial alterations’, which would not be allowed; and other alterations, primarily clerical in nature that would continue to be accepted by the Registrar.

2. CoPyRIGHT lAW MoDIFIeD

The 2012 amendments in copyright law, which were made to make Indian copyright law compliant with the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty, introduced technological protection measures, ensured that fair use survives in the digital era by providing special fair use provisions, made many author-

friendly amendments, special provisions for disabled, amendments facilitating access to works and other amendments to to streamline copyright administration.

The Government is considering further amendments to the Indian Copyright Act to help deter continuing piracy. Future amendments would provide for greater deterrents against infringement through more effective legislative and administrative frameworks. These amendments would also offer the police wider powers to conduct secret raids, seize and destroy infringing products, provide faster criminal proceedings and increased punishment for piracy.

3. PATeNTS lAW MoRe AlIGNeD WITH TRIPS Modifications in Indian patent laws have been made in accordance with TRIPS by widening the list of inventions not patentable, incorporating greater rights of the patentee, reversing the burden of proof in an infringement suit on process patents and creating a uniform period of patent protection of twenty years for all categories of invention. During 2014, the Indian Patent Office released guidelines pertaining to issuance of pharmaceutical patents. These guidelines primarily incorporate features of various court decisions so as to assist the Patent Office in establishing uniform standards of patent grant/examination. These guidelines are expected to bring in uniformity with regard to examinations of the patent applications across all Patent Offices in India and by different responsible officers, in addition to giving to the inventors and corporates much desired certainty on how their application will be examined by the Indian Patent Office.

Furthermore, in the recent past, various administrative and procedural mechanisms have been improved in the field of intellectual property law. The infrastructure of the Indian Patent Office has been improved greatly, so as to develop facilities for proper management of International Searching Authority/International Preliminary Examining Authority operation under the Patent CooperationTreaty. Indian Patent (Amendment) Rules 2014 recently introduced a third category of applicant being of "small entity", and provided procedural rules for governing the same. Furthermore, the fee for basic patent filing have been revised due to the introduction of the e-filing system of patents wherein the rates for e-filing are lower than those involved in physical filing.

oPPouRTuNITIeS FoR IP PRoFeSSIoNAlS

Protection of intellectual property has become so important that companies today carry out intellectual property audits to identify their intellectual wealth and form special departments to manage them. The

Article


legal professional who specializes with matters related to intellectual properties are termed as Intellectual Property Attorneys/Agents. The major job of all Intellectual property (IP) Professionals is to protect the intellectual property rights of their clients.

All the intellectual property rights are protected under various sub-divisions of law such as Patent under patent law; Trademark under trademark law and Copyright under copyright law etc. An intellectual property Professional can specialize in any or all of these fields, and their roles and responsibilities vary according to the fields.

� Patents Attorney: Patent attorneys give advice to the inventors for protecting their inventions of tangible things from being made, sold or used by others for a certain period of time.

� Trademarks Attorney: They give advice to customers about protecting and enforcing their trademark rights and guides the ways to protect their trademarks from being copied.

� Copyrights Attorney: Copyright attorneys give advice to the owners for protecting various forms of written and artistic expression. These professionals specialize with copyright related matters such as copyright registration and protection services which involves protection of the original creative work of the creators such as music, books, manuscripts, software, films, fashion designs, website etc from being copied for commercial purposes without the creators permission.

Besides the patent, copyright, trademark areas professionals can also work in the field of industrial design, layout design of integrated circuit, geographical indication, trade secrets and protection of plant varieties, information and communication technology law (cyber laws).

IP Professionals work with numerous clients from small business owners to top management of law corporations, from garage inventors to prize winning scientists, and provide services such as registration, enforcement, drafting, filing, litigation and licensing of intellectual properties like trade marks, designs, patents, copyrights etc.

CoMPANy SeCReTARy HAVING All SKIllS RequIReD FoR IPR PRoFeSSIoNAlS”

Our prestigious organization The Institute of Company Secretaries of India has given us all that is enough to make a career in the IPR, yet we shout at creating a career in it. We have so much knowledge of working in this profession that all of us can make a good career on our own hard work. When we look at the syllabus of our CS, we find that we have read

all those who want to work in this profession.

Some things that are necessary to make a career in the IPR, we already have it

1. Critical thinking,2. Analytical reasoning,3. Negotiation,4. Research and writing skills,5. Knowledge of scientific and legal concepts, 6. Mathematical or computer-related skills, 7. excellent communication and competence to manage IPR.

Since IPR law is an innovation-oriented profession, Intellectual Property rights professionals should possess scientific, technical, technological and business skills. They should possess an eye for detail to understand all kinds of information and must have some technical skills in engineering, technology, physics, chemistry or biology.

lIGHTeR SIDe oF THe PRoFeSSIoN

Article

CS Rajeev [email protected]


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PReFACe: -

The Government of India had on 13th July 2018 constituted a committee to review the existing framework dealing with offences punishable under companies act 2013 and inert-alia to make recommendations to strengthen the corporate governance mechanism. A detailed analysis was undertaken by the committee of all the penal provisions under the companies act 2013 and the report which was presented to Union Minister of finance & Corporate affairs Shri Arun Jaitley dated 14th August 2018 was broken down into eight categories depending upon the nature of offence committed. The major recommendations of the committee included Restructuring of corporate offences for de-clogging of special courts and NClT recommendations related to corporate compliance and corporate governance. The ministry has further promulgated Companies (amendment) ordinance, 2018 dated 2nd November 2018 pursuant to the recommendations of the committee.

PRe-AMeNDMeNT FRAMeWoRK: - Under section 2(41) of the companies act 2013, Prior approval of NCLT was required for alteration in the financial year whereas under section 14 approval of the tribunal was required for conversion of a public limited company into private limited. Section 441 provides for compounding of offences which are not punishable with imprisonment or with imprisonment and fine. Thus, compoundable offences broadly refer to those offences where the prescribed punishment is only fine or imprisonment or fine both. The jurisdiction of regional director extended to the pecuniary limits of five lakh rupees which is determinable on the basis of maximum amount of fine. All offences for which maximum fine exceeds five lakh rupees, the power or jurisdiction to compound was with NCLT.

INTeNTIoN BeHIND THe oBJeCTIVe ASSeSMeNT oF THe exISTING ReGulAToRy FRAMeWoRK:A. Irani Committee

The Irani Committee which was constituted in the year 2005 made the following observations related to companies act 1956:

“Under the present law, all lapses, however trivial, are required to be tried by the trial court as criminal offences. Delays are also attributable to be tried by the Trial court as criminal offences. Delays are also attributable to the procedural aspects required to be followed to bring the offender to book under Companies Act, 1956. Most Violations are of procedural nature. However, there is no structure for dealing with such offences speedily. The delayed processing of complaints leads to enormous administrative burden and high cost to the economy. The process of prosecution gets prolonged and the deterrent effects of the

DECLOGGING OF NCLT”- COMPANIES (AMENDMENT) ORDINANCE, 2018

CS AyuSH GuPTA, PRACTISING CoMPANy SeCReTARy, DelHI | [email protected]/[email protected]

penal provisions get diluted.”

One of the major recommendations of the Irani Committee was to setting up of an in- House mechanism for levying penalties on account of technical defaults. Further the standing Committee on finance during the examination of Companies Bill, 2009, in its 21 st report dated 31st August 2010, Stated that:

“Transgressions, purely procedural or technical in nature, should be viewed in a broader perspective, while serious non-compliance or violation’s including fraudulent conduct should invite stringent/deterrent provisions’’.

B. Pendency of cases

The Pendency of cases (Table 1.1) suggests that a large number of cases which are compoundable in nature are pending before regional directors and trial courts, a significant number of which relate to non-filing of “Financial statements” and ‘’Annual Returns”. Till date several measures have been taken by the MCA to for reducing the overall pendency of cases in courts, such as by introducing settlement schemes in 2000, 2010,2014 and 2018 to provide a window to defaulters to file their annual statements at a discounted fees with concomitant immunity from criminal proceedings.


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the list is not exhaustive as there are other ‘defaults’ which are as of now punishable as offences but the nature of those defaults are also procedural/technical which may be rectified by levy of penalty instead of filing prosecution in courts, so as to incentivize enhanced compliance.

D. De-clogging of NClT

In the year 2016 when the central government has constituted National company Law tribunal under section 408 of the companies act 2013, it was only vested with the adjudication of cases under companies act only. Subsequently with the advent of Insolvency and bankruptcy code in May 2016, The NCLT was recognized as ‘Adjudicating Authority’ under the code. On account of increased number of cases in NCLT and NCLAT through petitions filed under IBC, Companies act and Competition Act, 2002, some measures were required to be taken to transfer some of the jurisdiction of NCLT and NCLAT to other authorities for reducing its burden.

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The Vaish Committee constituted in 2005 recommended withdrawal of cases where larger public interest is not involved to allow the courts to pay more attention on disposal of the cases relating to frauds, scams and embezzlement of funds. It was further noted that the pendency every year was steadily increasing by around 2000 cases and the average period of disposal of cases was about 5 years and the average cost awarded per case to the government came to Rs 573/-.

C. Inhouse adjudication mechanism

Under the Companies act 2013, there are 18 instances where defaults/ violations are subject to civil liability by levying penalty through an adjudication mechanism. These defaults broadly relate to technical or minor non-compliances such as non-noting of alteration in every copy of memorandum of association; non-publication of authorized, subscribed and paid-up capital together; manner of recording minutes; defaults in providing copy of financial statement to any member etc. It was felt that

HIGHlIGHTS oF CoMPANIeS (AMeNDMeNT) oRDINANCe 2018 IN CoNTexT oF De-CloGGING oF NClT vesting in the Central Government the power to approve the alteration in the financial year of a company under section 2(41)

S.No. Relevant Section Title Pre-amendment Post amendment1. Provisos to 2(41) Alteration of

financial yearProvided that on an application made by a company or body corporate, which is a holding company or a subsidiary or associate of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, The Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year:Provided further that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause;

Provided that on an application made by a company or body corporate, which is a holding company or a subsidiary or associate of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, The Central Government may , on an application made by that company or body corporate in such form and manner as may be prescribed, allow any period as its financial year, whether or not that period is a year:Provided further that any application pending before the tribunal as on date of commencement of the Companies (Amendment) ordinance, 2018 shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement.”;Provided also that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause;

ANAlySIS: -1. In the Pre-amended section 2(41) of the companies act 2013 application for change of financial year was required to filed before concerned

NCLT. However, the committee in its report forwarded to the ministry stated that “It is recommended that NCLT need not be burdened with applications for change of financial year. These applications may be disposed off at the level of RD Itself”. Thereby on the recommendation of the committee the powers have been now delegated upon central government which is further likely to delegate upon concerned RDs under section 458 (Notification is still awaited).

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vesting the Central Government, the power to approve cases of conversion of public companies into private companies

S.No. Relevant Section

Title Pre-amendment Post amendment

1. Provisos to 14(1)

Alteration of articles for Conversion of Public company into Private company

Provided further that any alteration having the effect of conversion of a public company into a private company shall not take effect except with the approval of the Tribunal which shall make such order as it may deem fit.

Provided further that any alteration having the effect of conversion of a public company into a private company shall not be valid unless it is approved by an order of the Central Government on an application made in such form and manner as may be prescribed;Provided also that any application pending before the tribunal as on date of commencement of the Companies (Amendment) Ordinance, 2018 shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement.”;

2. 14(2) Approval of Tribunal

Every alteration of the articles under this section and a copy of the order of the tribunal approving the alteration as per sub section (1) shall be filed with the registrar, together with a printed copy of the altered articles, within a period of fifteen days in such manner as may be prescribed, who shall register the same.

Every alteration of the articles under this section and a copy of the order of the Central Government approving the alteration as per sub section (1) shall be filed with the registrar, together with a printed copy of the altered articles, within a period of fifteen days in such manner as may be prescribed, who shall register the same.

ANAlySIS: -1. Under section 31 of the erstwhile companies act 1956 which dealt with the conversion of public company into private company which

required the approval of central government the powers were delegated to Registrar of companies. Whereas under section 14 of the companies act 2013, the application was required to be filed before NCLT which shall make such order as it may deem fit. The applicant company was also required to serve the copy of application to the concerned registrar of companies, Central Government (Power delegated to regional directors), Securities and Exchange board of India (For listed entities) and the regulatory body if the company is regulated under any other act. The report of RD/ROC/SEBI/RBI is considered necessary to dispose of the application filed before NCLT. In the view of the nature of proceedings and for the speedier disposal, power to approve conversion under section 14 has now been delegated to central government which is further likely to delegate it to concerned regional directors under section 458 (Notification is still awaited)

2. The order of tribunal under section 14 was earlier required to be served with the concerned ROC within a period of fifteen days. Now after amendment, the order of central government instead of tribunal will be required to be served.

enlarging the jurisdiction of Regional Director (“RD”) by enhancing the pecuniary limits up to which they can compound offences under section 441 of the Act.

S.No. Relevant Section Title Pre-amendment Post amendment1. 441(1)(b) Compounding

of certain offences

Where the maximum amount of fine which may be imposed for such offence does not exceed five lakh rupees, by the regional director or any officer authorized by the central government.

Where the maximum amount of fine which may be imposed for such offence does not exceed Twenty-five lakh rupees, by the regional director or any officer authorized by the central government.

2. 441(6) Permission of special Court

Notwithstanding anything contained in the code of criminal procedure, 1973 (2 of 1974)-

any offence which is punishable under this act, with imprisonment or fine, or with imprisonment or fine or with both, shall be compoundable with the permission of the special court, in accordance with the procedure laid down in that Act for compounding of offences;

No offence which is punishable under this act with imprisonment only or with imprisonment and also with fine shall not be compoundable.

Notwithstanding anything contained in the code of criminal procedure, 1973, any offence which is punishable under this act with imprisonment only or with imprisonment and also with fine shall not be compoundable.

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ANAlySIS: -1. In the erstwhile section 441(1)(b), RD’s pecuniary jurisdiction

in cases of compounding was extended to offences where the maximum amount of fine does not exceed five lakh rupees and for those offences with maximum fine exceeding five lakh rupees, the power of compounding vested with the NCLT. Through the amendments under section 441(1)(b) the pecuniary limit of compounding of offences by the regional Director has been enhanced to Twenty-Five lakh rupees which was earlier limited to just five lakh rupees. Now only those serious corporate offences which involves maximum fine exceeding twenty-five lakh rupees will be adjudicated upon by the NCLT. Re-categorization of 16 offences out of the 81 which are in the category of compoundable offences to an in-house adjudication framework has been done on the recommendation of the committee.

2. Earlier permission of special court was required for compounding of offences punishable with fine or imprisonment or with imprisonment or fine or with both there by increasing the

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pendency of cases with the special court constituted under the act. NCLAT in its judgment dated 29.08.2017 in Cinepolis India Pvt Ltd. V. Roc, CA(AT) No. 137 of 2017, while relying on the interpretation of section 621A of CA 1956 (corresponding to section 441 of CA 2013) by the supreme court in VLS Finance v. Union of India, held that a prior approval of the Special Court before compounding of offence by NCLT is not required. Now that redundant provision has been omitted on the recommendation of the committee.

CoNCluSIoN: -Companies (amendment) ordinance 2018, is definitely a short in the arm on the sidelines of India’s jump to the 77th position in the Worlds Bank’s ‘Ease of doing Business’ rankings. Ministry has more or less accepted almost all the major recommendations of the committee to review the existing regulatory framework. The said ordinance is another major step towards liberalization and aligning up of the policy framework with the global business regime. The government will further push for the passage of the said ordinance in the month-long winter session of the parliament which is likely to begin from 11th December 2018.

NIRC - ICSI Newsletter | October 2017 18

CSBF

7,50,000

CS PRADEEP DEBNATH

10,000/-.

3,00,000

10,000/-


Conversion of Public Limited Co. into Private Limited Co.

CS DIVeSH GoyAl, PRACTISING CoMPANy SeCReTARy, DelHI | [email protected]


As per Section 14(1)- for conversion of Public Company into Private Limited Company approval of Tribunal is required.

1By ordinance, 2018: Power of Tribunal has been transferred to Central Government. Therefore, after notification of ordinance Public Company can be converting into Private Company with approval of Central Government.

MCA on 18th December, 2018 has published Companies (Incorporation) Fourth Amendment Rules, 2018. They shall come into effect from 18th December, 2018.

By these rules MCA amended Rule 41 “applicability under section 14 for conversion of Public Company into Private Company”

Power of Central Government assigned to Regional Director for approval of conversion of public limited company into private limited company.

In this editorial the author shall discuss the process of Conversion of Public Company in Private Limited Company6 along with comparison with earlier provisions.

This is article no. 404 of the series of editorials written by the author on corporate laws

{Including Companies Act, 2013, SEBI, RBI Regulations, IBC, LLP Act, 2008 etc.}.

SHoRT SuMMARy: Keeping in view the relaxations provided to a Private Company (Exemption given by 2 circulars vide notification dated 05th June, 2015 and 213th June, 2017), many public companies have converted into Private Companies or in the process of such conversion.

Through this brief write up an attempt has been made to unlock the technicalities related to Conversion of Public Company into Private Company prescribed under Companies Act, 2013.

We believe that the procedure for Conversion of Public Company into Private Company along with sample resolutions discussed through this article would be of some help for everyone.

Conversion of status of company from public to private would become effective form the date of receipt of the approval of the Registrar through the change of name would become effective on the issue of fresh Certificate of Incorporation.

1 All the matters filed with NCLT before date of commencement of the Ordinance, 2018

shall be disposed off by the Tribunal in according with earlier provisions.

2 http://www.csdiveshgoyal.info/2017/06/exemption-to-private-companies.html

The Companies Act, 2013 was expected to simplify the provisions but on the contrary it brought lot of restrictions on doing business. Therefore the public companies are converting themselves into private limited company.

ReGulAToRy RequIReMeNTS:The procedure for conversion from one company to the other is expounded within the Act with certain statutory requirements such as alteration of the Memorandum of Association (MOA) and Articles of Association (AOA) of the company.

Legal Provisions related to Conversion of Public Company into Private Company are given in Section 18 and 14 of the Companies Act, 2013 read with Rule 41 of Companies (Incorporation) 3Rules, 2014.

As per Section 13 and Section 14 of the Companies Act 2013 read with Rule 41 of Companies (Incorporation) Rules, 2014. A public company can be converted into the private company only after obtaining its shareholders approval by way of passing of special resolution in general meeting.

Relevant Sections & Rules of the Act:

1. Section 13: It provides for alteration of memorandum.

2. Section 14: It provides for alteration of articles.

3. Section 18: It allows an existing Company to convert itself as a company of other class under this Act by alteration of memorandum and articles of the company in accordance with the provision of chapter II of the Act.

4. Rule 40 of Companies (Incorporation) Fourth Amendment Rules, 2018: Application under Section 14 for conversion of public company into private company.

DeTAIleD PRoCeDuRe FoR CoNVeRSIoN oF PuBlIC CoMPANy INTo PRIVATe CoMPANy:FIRST STeP:STeP – I: Convey Board Meeting of Directors: (As per section 173 and SS-1)

To Pass a board resolution to get in principal approval of Directors for conversion of a public company into a private company by altering the AOA subject to the approval of Central Government (Power of Central Government assigned to RD).

STEP –II: Held Board Meeting: (As per section 173 and SS-1)

� To consider In-principal approval for conversion of Public Company into Private Company by altering Articles.

3 Companies (Incorporation) Fourth Amendment Rules, 2018

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� Get Approval to Alteration in Article of Association and recommending the proposal for members' consideration by way of special resolution.

� Fixing the date, time, and venue of the general meeting and authorizing a director or any other person to send the notice for the same to the members.

� To approve Notice of EGM along with explanatory statement to be annexed with the notice as per Section 102(1) of the Act.

STeP- III: Issue Notice of General Meeting: (Section 101)

Notice of EGM shall be given at least 21 days before the actual date of EGM. EGM can be called on Shorter Notice with the consent of at least majority in number and ninety five percent of such part of the paid up share capital of the company giving a right to vote at such a meeting:

� All the Directors. � Members � Auditors of Company

The notice shall specify the place, date, day and time of the meeting and contain a statement on the business to be transacted at the EGM

Second Step:

STEP- IV: Hold General Meeting: (Section 101)

� Check the Quorum. � Check whether auditor is present, if not. Then Leave of absence is

Granted or Not. (As per Section- 146). � Pass Special Resolution.[Section-114(2)] � Approval of Alteration in AOA for conversion of Public Company

into Private Limited Company � Approval of alteration in Memorandum of Association.

STeP- V: Filing of form with RoC: (Section 117)

File Form MGT-14 (Filing of Resolutions and agreements to the Registrar under section117) with the Registrar along with the requisite filing within 30 days of passing the special resolution, along with given documents:-

� Certified True Copies of the Special Resolutions along with explanatory statement;

� Copy of the Notice of meeting send to members along with all the annexure;

� A printed copy of the Altered Article of Associations and Memorandum of Association.

Note: It is relevant to note that First you have to file form MGT.14

Third Step:

STEP- VI: Drafting an Filing of Application with Regional Director (in Form RD-1)-

Application in Regional Director shall be file at within 60 days from passing of Special Resolution in e-form RD-1.

APPlICATIoN SHAll Be ACCoMPANIeD By FolloWING DoCuMeNTS:Following documents are required to be attached with petition for

conversion of Public Company into a Private Company under Section 14(1) of the Act:

� Copy of the memorandum and articles of association with proposed alterations

� Copy of Minutes of General Meeting (mentioning details of votes cast in favour or against)

� Copy of Attendance Sheet of General Meeting

� Board Resolution for authorizing to file application for conversion (dated not earlier than 30 days)

oTHeR DoCuMeNTS To Be ATTACHeD:Declaration in form of Affidavit:

Declaration by Key Managerial Personal (If company not having KMP then by any Director) i.e.:

I. The Company limits the number of its members to 200, and that no deposit has been accepted by the Company in violation of the Act and rules.

II. There is no non-compliance of Section 73 to 76A, 177, 178, 185,186 and 188 of Act an rules made thereunder

III. That, No resolution is pending to be filed in terms of Section 179(3) and

IV. that the company never listed on stock exchange and if listed complied with the relevant provisions.

DeTAIlS oF CReDIToRS:There shall be attached to the application, a List of Creditors and Debenture Holders, drawn up to the latest practicable date preceding the date of filing of petition by not more than 30 days, setting forth the following details, namely:-

� the names and address of every creditor and debenture holder of the company;

� the nature and respective amounts due to them in respect of debts, claims or liabilities;

� in respect of any contingent or unascertained debt or any such claim admissible to proof in winding up of the company, the value, so far as can be justly estimated of such debt or claim:

AFFIDAVIT VeRIFyING lIST oF CReDIToRS:The applicant company shall file an affidavit, signed by the company secretary of the company, if any, and not less than two directors of the company, one of whom shall be a managing director, where there is one, to the effect that they have made a full enquiry into the affairs of the company and, having done so, have formed an opinion that the list of creditors is correct, and that the estimated value as given in the list of the debts or claims payable on a contingency or not ascertained are proper estimates of the values of such debts and claims and that there are no other debts of , or claims against, the company to their knowledge.

PuBlICATIoN oF NeWS PAPeR ADVeRTISeMeNT:The company shall at least Twenty One days before the date of filing of application:


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� News Paper Advertisement: Advertise the petition in Form No. INC 25A, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situate, and at least once in English language in an English newspaper circulating in that district. (Widely Circulated in the State in which the registered office of company is situated)

� Speed Post to Creditors: serve, by registered post with acknowledgement due, individual notice to each debenture-holder and creditor of the company; and

� Service of Petition to ROC/RD: serve, by registered post with acknowledgement due, a notice together with the copy of the applicaiton to the Central Government (Regional Director), Registrar of Companies and to the Securities and Exchange Board of India, in the case of listed companies and to the regulatory body, if the company is regulated under any other Act.

FouRTH STeP:File Form RD-1 with the Regional Director within 60 days of passing of Special Resolution with all the above mentioned annexures Like:

� MOA & AOA � General Meeting Minutes and Attendance Sheet � Board Resolution authorizing application � Declarations � List of Creditors � Affidavit verifying the list of creditors � Copy of News Paper Advertisement

oTHeR PRoVISIoNS:A. Power to Inspect: A duly authenticated copy of the list of the

creditors shall be kept at the registered office of the company and any person desirous of inspecting the same may at any time during the ordinary hours of business, inspect and take extracts of the same on the payment of a sum not exceeding ten rupees per page to the company.

B. objection if Any Received:

Where any objection of any person whose interest is likely to be affected by the proposed application has been received by the applicant, it shall serve a copy thereof to the Central Government on or before the date of hearing.

C. Where No objection Is Received:

Where no objection received from any person in response to the advertisement or notice under sub-rule (5) or otherwise, the application may be put up for orders without hearing and the order either approving or rejecting the application shall be passed within 30 days of receipt of the application.

D. Where objection Is Received:

After checking of application with Annexures the hearing will take place at the Regional Director office and it should be represented by the company or practicing professional or advocate.

E. The Regional Director will make an order confirming the alteration on such terms and conditions, if any, as it thinks fit, and may make such order as to costs as it thinks proper:

F. Obtain certified copies of the order confirming the shifting of registered office from one state to another, passed by the Central Government,

18) File e-form INC-28 with RoC within 30 days of confirmation of shifting by Regional Director along with copy of order.

STePS AFTeR oBTAINING NeW CeRTIFICATe FRoM RoC:

� Make alteration in the MOA with respect to the state in every copy of Memorandum.

� Each stationery, banner, signboard, bills, invoice etc. should show the new address and necessary advice should be sent to shareholders, debenture holders, and other concerned parties.

� Necessary changes are required to be made in the letter heads, books, records etc. of the company. The necessary changes are required to be made in PAN. TAN and ST2 etc and inform to all the Government departments, banks, customers and others wherever required.

Tail Piece: Provided that the shifting of registered office shall not be allowed if any inquiry, inspection or investigation has been initiated against the company or any prosecution is pending against the company under the Act.

CoMPANy SeCReTARIeS BeNeVoleNT FuNDMEMBERS ENROLLED FRoM NIRC AS LIFE MEMBERS OF THE COMPANY SECRETARIES BENEVOLENT

FUND DURING THE PERIOD 01/09/2018 TO 31/12/2018

REGION LM NO. NAME MEMB NUMBER CITYNIRC

1 13119 MR. SAGAR JHA ACS - 55972 DELHI2 13121 MR. HARI KRISHAN ACS - 31976 LUDHIANA3 13125 MR. PRASHANT KUMAR FCS - 9702 NEW DELHI4 13128 MR. VIKAS AGRAWAL ACS - 47821 ALLAHABAD5 13140 MR. AKASH ACS - 57073 REWARI6 13148 MR. LAVKUSH YADAV ACS - 38573 ALLAHABAD


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There is always confusion between “Fine and Penalties”. Through, this editorial author made an attempt to elaborate the difference and basic meaning of between “Fine & Penalties”. Let’s first see the meaning as per dictionary:

Fine PenaltyAs per Oxford Dictionary:Fine is “a sum of money exacted as a penalty by a court of law or other authority.”

As per Oxford Dictionary:Penalty is “a punishment imposed for breaking a law, rule, or contract.”

In General words, Fine imposed when any application/ petition filed with any court (like: NCLT, High Court) and penalty imposed when company made any non compliance and authority directly can impose penalty on them.

Quick Bites:

i. Many people having doubt whether ‘Additional Fees’ paid on filing of form is penalty or fine?

As per Rule 12 of The Companies (The Registered offices and Fees) Rules, 2014.

Additional fees is only a fees paid by Company for filing of form it Is neither Fine nor Penalty.

exAMPle: SeCTIoN 92- ANNuAl ReTuRN

Sub section 4: States about filing of Annual Return and additional fees in case of non filing with in prescribed period of 60 days from AGM.

Sub Section 5: States about fine in case of company fails to file annual return within time prescribed under sub section 4.

Therefore, one can observe that for one form Annual Return MGT-7 Company is paying additional fees and fine both in case company make any non compliance for filing of same.

Therefore, Additional fees is neither fine nor penalty.

THe CoMPANIeS (AMeNDMeNT) oRDINANCe, 2018

The main maxim of writing of this article is, The Companies (Amendment) Ordinance, 2018 has re categorized certain offence from Fine to Penalty. Thus, Registrar of Companies (ROC) and Regional Director (RD) can now impose penalties directly after issuing SCN, instead of going to judiciary for imposing fines or for following procedure for composition of offences.

Difference Between Fine & Penalty Companies Act, 2013 & Company Ordinance, 2018

CS DIVeSH GoyAl, PRACTISING CoMPANy SeCReTARy, DelHI | [email protected]

There are as many as 16 sections amended via Ordinance, whereby the punishment for non-compliance to be levied under the Companies Act, 2013 is re-categorized from “FINE” to “PENALTY”

S. No. Section Section Description

1 53(3) Prohibition of Issue of shares at a discount

2 64(2)Notice to be given to Registrar for alteration of share capital

3 92(5) Annual Return

4 102(5) Statement to be annexed to Notice

5 105 Proxies

6 117(2) Resolutions and Agreements to be filed

7 121(3) Report on annual general meeting

8 137(3)Copy of financial statement to be filed with Registrar

9 140(3)Removal, resignation of auditor and giving of special notice

10 157(2)Company to inform Director Identification Number to Registrar

11 159 Punishment for Contravention – in respect of DIN

12 165(6) Number of Directorships

13 191(5) Payment to Director for Loss of Office

14 197(15)Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits

15 203(5) Appointment of Key Managerial Personnel

16 238(3)Registration of the offer of scheme involving transfer of shares

Example- Discussion on one of above section:

ii. Section 117(2) - Resolutions and Agreements to be Filed: As per this section Companies are required to file e-form MGT-14 with ROC for passing of resolutions mentioned u/s 117(3) within 30 days of passing of resolution.


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S. No. Fine PenaltyCompany Company shall be

punishable with FINE which shall not be less than 5,00,000 rupees but which may extend to 25,00,000 rupees

Liable to PENALTY of 1,00,000 rupees and incase of continuing failure futher penalty of 500 rupees for each day upto maximum 25,00,000 rupees

Director punishable with FINE which shall not be less than 1,00,000 rupees but which may extend to 5,00,000.

PENALTY of 50,000 and Incase of continuing failure with further penalty of 500 rupees for each day up to 5,00,000

Thus, before ordinance section 117(2) states about Fine and after ordinance section states about Penalty.

Therefore, before ordinance default can be make good by petition in NCLT by filing compounding application Suo Moto or after receipt of notice form ROC/ MCA.

And, After ordinance ROC may start levying penalty by issuing ‘Show Cause Notice’ without any petition to NCLT or any other authorities.

ConclusionThis is a welcoming step from the government as it will reduce the burden of NCLT as after this re-categorisation, 24 offenses will not be looked after by NCLT.

The Ordinance has decriminalized certain offences and has given scope to companies to settle such offences through in house mechanism, where a penalty could be levied in instances of violations.

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]). Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION

To GIVe oPPoRTuNITy AND PlATFoRM To ouR MeMBeRS

In order to give opportunity and platform to our young members and also to enhance their communication and presentation skills, it has been decided that the various activities, like seminar, conferences, workshops, class room series, study sessions, PCS Meetings, addressing on CS Course in Career Awareness Programs in Schools/Colleges, etc., as may be organized by NIRC-ICSI for members and students, will be made available to the young members as a platform and opportunity to hone their communication and presentation skills. The Members will be provided with an opportunity to coordinate the complete sessions independently or jointly with other member.

Your NIRC is always on a forefront and always strive to build the capacity and confidence of our young brigade of Company Secretaries by empowering them to face the challenges of the Corporate world. This endeavour of NIRC will surely help them to excel in their skills in managing and conducting the AGM / EGM for their respective companies or for their client companies. Members are requested to grab this opportunity for their own benefit and to serve the profession. Interested members may send their details at [email protected]

NIRC - ICSI Newsletter | January 2019 18*The views expressed are personal views of the author and it should not be taken as views of the NIRC-ICSI.

Traditionally, the way we measure economic success is by economic growth via metrics such as GDP. Classical economics propagated the theory of effective markets and underlined performance/output. This led to the use the macroeconomic term Gross Domestic Product (GDP) for measuring economic growth of countries. GDP is the aggregate monetary value of the goods and services produced in a country in a year.

GDP, AN INCReASINGly PooR MeASuRe oF PRoSPeRITyGDP is like a speedometer: it tells you whether your economy is going faster or slower. As in cars, a speedometer is useful but doesn’t tell you everything you want to know. For example, it won’t tell you whether you are overheating, or about to run out of fuel. Above all, the speedometer doesn’t tell you whether or not you’re going in the right direction. If you suggest to a car driver that you might be on the wrong road, and the response is “then we must go faster”, you might think that’s pretty stupid. Yet this is what happens whenever complaints about the state of the economy elicit a commitment to boost growth.

“AT PReSeNT, We ARe STeAlING THe FuTuRe, SellING IT IN THe PReSeNT, AND CAllING IT GDP.” — PAul HAWKeNEconomic growth as measured by gross domestic product doesn't really tell us much about citizens' general well-being. It is, of course, entirely possible for an economy to go faster and faster without getting closer to providing people a healthy and happy life. However, GDP was intended to be a measure of economic growth. GDP was never planned to be a measure of overall social well-being. This western economic theory makes the statement that economic growth will enhance social well-being. Research has indicated that in most cases this statement is true. However, GDP is seen to be an imperfect measure, as it does not account for the environmental and social degradations that often accompany economic development. While economic growth is important to a point, wealth and growth don’t equate to personal satisfaction and happiness. That’s why traditional metrics of economic progress aren’t the most effective means to measure overall progress.

GDP IS Fuzzy MATHAnything we spend money on adds to the GDP – including cleaning up oil spills, treating cancer, and building jails. At the same time, some undeniably valuable things – taking care of a sick parent, volunteering at a charity are worth nothing since no one pays for them. Imagine if a corporation used Gross Domestic Product (GDP) accounting to do its books: it would be adding all its income and expenses together to get a final number. Nobody would think that’s a very good indication of how well that business was doing. Herman Daly, a former senior economist at the World Bank, said that, “the current national accounting system treats the earth as a business in liquidation.” He also noted that we are now in a period of “uneconomic growth”; where GDP is growing but societal welfare is not.

GRoWING BACKWARDSIn the past several decades, Gross Domestic Product of the countries has increased significantly. During that same time, some other important figures have also increased: the number of threatened species, the amount of greenhouse gas emissions, the rates of diabetes and heart disease. The paradox of growing material prosperity coexisting with diminishing personal satisfaction has spurred a number of efforts to develop measurements of economic success that are more holistic than GDP.

GDP IGNoReS INTeRCoNNeCTIoNS

The fundamental weakness of GDP is that it ignores interconnections. It only covers a single metric: economic growth. It’s reductive. We have long been led to believe that GDP growth is ultimately the measure of a country’s progress, creating jobs, investment and production of goods and services. However, our focus on spending our way to happiness is not borne out either by people’s experience or by the statistical evidence. The idea of putting happiness at the heart of our economy is not new, but is not the focus of mainstream policy or culture in economic domain. This calls for a new policy direction that puts wellbeing at the core of economy and society.GDP oNly MeASuReS PRoDuCTIVe eCoNoMyGDP is considered as a proxy for progress or prosperity. As a tool, it only measures part of productive economy: GDP falls when a man marries his maid. Indeed, if they don’t increase the economy, GDP discounts social and environmentally desirable activities, such as household work. GDP does not account for any work done outside of the monetary system. These means that much of the work done by women world-wide goes unrecognized in the economy and therefore is unimportant when it comes to making policy about their lives. Any work it takes to raise a family or maintain a healthy home goes unaccounted for. Is this work not productive also? GDP GIVeS A FAlSe SeNSe oF PRoSPeRITyIn his Italian bestseller, Manifesto for Happiness, University of Siena economist Stefano Bartolini compares happiness data around the world and concludes that America is “the example not to follow.” Bartolini says Americans are caught in a vicious cycle. Our consumption habits demand more debt and longer work hours, reducing our social connections, a central foundation of happiness. To compensate for the feelings of loneliness, we then buy more stuff, seeking friendship through products. This consumption treadmill is reflected in faster economic growth than in Europe, but it exacerbates Americans’ social disconnection and the deterioration of our environmental commons.Bartolini argues that the US’s rapid economic growth is more a matter of the inefficiency of the American economy in meeting our actual needs than it is an indicator of dynamism. In short, GDP obscures more than it reveals. The numbers give us a sense that we are wealthy; in fact, we are impoverished when it comes to the things we value most.Robert F. Kennedy once said that a country’s GDP measures “everything except that which makes life worthwhile”. The only way to dethrone GDP from its current role, is to start measuring all those things that do “make life worthwhile”.GooD FoR THe eCoNoMy DoeS NoT AlWAyS MeAN GooD FoR THe PeoPle.A nation surely gains momentum due to rise in GDP but what about people living in that nation? let me make it clear that the Gross domestic product measures every single thing except the health of children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything, in short, except that which makes life worthwhile.AlTeRNATe MeASuReS oF Well BeINGAs we have found that GDP has failed to measure on whether it has benefited the people or not as its only focus has been on the economy. GDP also fails to measure things like quality improvement, this is due to

Happiness is more important than GDPCMA (Dr.) S K Gupta, MD & Ceo Insolvency Professional Agency of Institute of Cost Accountants of India

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the fact GDP can only measure the price as value, but not the quality of goods being produced. The good news is that there are several alternatives to GDP being actively developed, discussed, and used.Michael Porter, a Harvard economist, led the launch of the Social Progress Index (SPI), a new tool to measure how societies are doing in comparison to one another and on a range of non-economic measures.The world is many different things,” he said, “And trying to weave that all into one indicator would be a mistake - Amartya senAs countries try to set policies to improve well-being they have to get away from using just GDP as the de facto predictor. "We can expand our vision of 'development' as more than just improving GDP. Prof William Reville : Gross national product (GNP) is the index commonly quoted to indicate the economic well-being of a nation. But, if we wish to indicate the overall wellbeing of the country, a much better index would be gross national happiness (GNH).HAPPINeSS IS CATCHINGSince Bhutan’s pioneering effort to better measure well-being, the idea has spread around the world. In the United States, efforts to measure sustainability more holistically began in 1991, when Sustainable Seattle developed the world’s first regional indicators of well-being. Today, more than 350 community organizations in the United States alone have developed some kind of well-being or sustainability indicators. Local governments in Brazil, Canada, Australia, and the United Kingdom are also beginning to measure happiness. GRoSS NATIoNAl HAPPINeSSGNH is a shared national objective, implies excellence in education and healthcare, robust economic opportunity, protection and celebration of cultural and environmental resources, and good governance. GNH is thus a holistic, sustainable and inclusive approach to human growth and societal progress. The reason for the overwhelming support and sympathy that the Gross National Health (GNH )concept is receiving worldwide is that the citizens everywhere are dissatisfied with the way societies are progressing currently in the world. They are increasingly concerned with their quality of life where GDP is the sole yardstick used for measuring social progress prompted by globalization. Now people are demanding for more sustainable and complete approach to development taking into account dimensions such as social, environment and culture into policy framework. In contrast, GNH has become a more complete indicator as it draws upon a broader set of social, environmental and health measurement.Gross National Happiness Framework initially developed in Bhutan is now having influence all over the globe. The ‘Framework’ is based on the 4 pillars of preservation of the environment, preservation and promotion of culture; sustainable and equitable socio-economic development; and good governance. The 4 pillars are further refined into 9 domains and a weighted index of 33 indicators. It is also about a shift of consciousness. this renewed focus on the primary importance of psychological health and social well-being will shift the trajectory of our economies towards greater prosperity and wealth beyond material growth. This shift in focus from material growth to equality and well-being goes to the heart of the concept of Gross National Happiness (GNH). GNH is more than a concept, it is a living experiment in an alternative development path.GNH AIMS To eVAluATe SuSTAINABIlITy, WellBeING AND quAlITy oF lIFeHappiness simply means as feeling good and enjoying life. We all want to be happy and we devoutly wish happiness for our children. But how do we achieve happiness? The most common fallacy in this regard is that lots of money brings happiness. Surveys have shown that happiness has not increased since the 1950s, despite the fact that, in real terms, average salaries have more than doubled, we have more cars, bigger houses, a shorter working week, more holidays, more food,

more clothes, more central heating and better health. Money correlates with happiness only when you have very little money. It is not possible to be happy if you live in grinding poverty and your happiness will rise steeply as you acquire sufficient money to satisfy the basic necessities. But the surprising thing is that, as many studies have shown, once average income exceeds what is required to cover the basics, further pay rises bring no greater happiness. And even if there is a link between economic growth and happiness, would we really be happy deep down if we knew that our current happiness may be at the expense of the happiness of our descendants? What, more importantly, would we be happy to do about that? HAPPINeSS ReSIDeS NoT IN PoSSeSSIoNS, AND NoT IN GolD, HAPPINeSS DWellS IN THe SoulHappiness is not to be found by directly pursuing it as an end in itself - rather it is the byproduct of the satisfaction you feel from consciously living a productive life, i.e deciding to achieve something, setting goals and working towards them. We all have much more money now than we had in the past. This is good, but, in itself, will not make us any happier. In fact, money can be quite dangerous if spent largely in the pursuit of pleasure. We have been very successful in improving the economy and we should be proud of this, but it is now time to devote energy to improving quality of life in other respects. Our happiness resides largely in these latter dimensions and we can rest assured that efforts spent in this regard will be well rewarded. The path to becoming a happy country might well involve greater focus on maintaining or promoting healthy natural and social systems, and less on simply producing more 'stuff. One of the GNH creators Lyonpo Jigmi Thinley states: “We have to think of human well-being in boarder terms. Material well-being is only one component. That does not ensure that you are at peace with your environment and in harmony with each other.” GNH, which preferences the goal of happiness over the goal of wealth, serves as a counterweight to the ubiquitous Western-driven focus on the economic indicators of Gross National Product or Gross Domestic Product.CoNCluSIoNOpen Happiness.” That tagline – the centerpiece of Coca-Cola’s advertising campaign – sounds like the perfect encapsulation of our culture’s definition of bliss. The idea of happiness on offer (or on sale) couldn’t be simpler: Consumption equals contentment. Pop open a soda and all will be well. If only it were that easy. It’s not, of course. Since antiquity, humans have struggled to define the good life. What makes us happy? How do we find personal fulfillment? What does progress look like?Our obsession with growth means nothing if we aren’t happier as a result of this relentless pursuit. It is time to ask ourselves and our governments what really makes us happy, how we can find lasting fulfillment, and what genuine, sustainable progress looks like. Can we engage citizens and policy makers to answer these questions and do something about them? Our future depends on the answer. ReFeReNCeSDealton, A. (2008): Income, Health and Well-Being around the World: Evidence from the Gallup World Poll. Journal of Economic Perspectives 22, 2, 53-72. Delhey, J., Kroll, CH. (2012): A “Happiness Test” for the New Measures of National Well-Being: How Much Better than GDP are they? WZB Discussion Paper SPI 2012 Easterlin, R. A., Angelescu, L. (2012): Modern Economic Growth and Quality of Life: Cross-Sectional and Time Series Evidence. European Commission (2009): More than GDP. Measuring Progress in a Changing World. Commission Communication COM(2009) 433.

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Compliance Checklist

S. No.

Activities Sections/Rules/ Clauses, etc.

Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

GST Compliances1. Due date for filing GSTR-1 for m/o Dec

2018 - Applicable for taxpayers with Annual Aggregate turnover Above Rs. 1.50/- Crore or opted to file monthly Return (Rs. One Crore Fifty Lacs) only.

Goods and Services Tax Rules, 2017

GST 11th January 2019 GST Authority

2. Due date for filing GSTR-1 for Oct to Dec 2018 - Applicable for taxpayers with Annual Aggregate turnover below Rs. 1.50/- Crore


GST 31st January, 2019 GST Authority

3. Due date for filing GSTR-7 (to be filed by the persons who is required to deduct TDS under GST for the period from Oct to Dec 2018



4. Due date for filing GSTR-8 (to be filed by the persons who is required to deduct TDS under GST for the period from Oct to Dec 2018


Income-tax Related Compliances5. Quarterly Return for TDS deducted for Dec

QuarterSection 192 Income-tax Act,

196130th January , 2019 Income Tax

Authorities6. Due date for furnishing of challan-cum-

statement in respect of tax deducted under Section 194-IB(TDS on Certain Rent payment) in m/o Dec 18

Section 192 Income-tax Act, 1961

30th January , 2019 Income Tax Authorities

7. Contractor’s Bill / Advertising / Professional service Bill - TDS collected for the previous month Section 194J (January, 2018)

Section 194CSection 194J

Income-tax Act, 1961

07th February , 2019 Income Tax Authorities

8. Quarterly TCS certificate in respect of tax collected for the quarter ending December 31, 2018


30th January , 2019 Income Tax Authorities

9. TDS from Salaries for the previous month (February, 2018)



10. Deposit TDS from salaries for the previous month in Challan No.281 (February, 2018)



RBI Related Compliances 11. Reporting of actual transactions of ECB in

form ECB-2 within 7 working days (January, 2018)

ECB Rules FEMA, 1999 08th February , 2019 RBI through Authorized Dealer

economic, Industrial & labour law Related Compliances12. Payment of ESI contribution for the previous

monthRegulation 31 Employees’ State

Insurance Act, 1948 andEmployees State Insurance (Gen.) Regulations, 1950

21st January , 2019 ESIC Authorities

13. Monthly return of Provident Fund for the previous month (December) Provident funds

Paragraph 38 of Employees’ Provident Act, 1952

Employees Provident Funds and Misc. Scheme, 1952

25th January , 2019 Provident Fund Authorities

14. Monthly return of Provident Fund for the previous month with respect to International Workers.

Paragraph 36 The Employees' Provident Funds Scheme, 1952

25th January , 2019 Provident Fund Authorities

CoMPlIANCe CHeCKlIST FRoM 20TH JANuARy, 2019 To 20TH FeBRuARy, 2019


Compliance Checklist

S. No.

Activities Sections/Rules/ Clauses, etc.

Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

15. Monthly payment of Provident Fund (PF) (Non Corporate)

(a) Paragraph 38 of Employees Provident Funds Scheme, 1952(b) Section 418 of the Companies Act, 1956

(a) Employees’ Provident Funds and Misc. Provisions Act, 1952 (b) Exempted Scheme

15th February , 2019 Provident Fund Authorities Trustees of Provident Fund

16. File monthly return for employees leaving / joining during the month of January(Form No.5)

Paragraph 20(2) read with Paragraph 36(1) & (2)

The Employees’ Pension Scheme, 1995 (For exempted establishments under Employees Provident Fund and Misc. Provisions Act, 1952)

15th February , 2019 Provident FundCommissioner

17. i) File monthly Return of employees entitled for membership of Insurance Fund (Form No.2(IF))

ii) File monthly Return for members of Insurance Fund leaving service during the month of January (Form no. 3(IF))

iii) File monthly return of members joining service during the month of January (Form no.F4(PS))

Paragraph 10 The Employees Deposit Linked Insurance Scheme,1976 (For exempted establishments under Employees Provident Fund and Misc. Provisions Act, 1952)

15th February , 2019 Provident FundCommissioner

Stock exchange / listing Compliance18. Statement of giving the number of Investor

Complaints pending at the beginning of the Quarter those received during quarter, disposed during quarter and those remaining unresolved at the end of quarter

Regulation 13 SEBI (Listing Obligations and Disclosure Requirements) 2015

21st January , 2019 Stock Exchange

19. Submission of Shareholding Pattern as at the end of the previous quarter

Clause 31 SEBI(Listing Obligations and Disclosure Requirements) 2015

21st January , 2019 Securities & Exchange Board of India

20. Reconciliation of Share Capital Audit Regulation 55A SEBI (Depositories and Participant) Regulation 1996

30th January, 2019 (within 30 days from the end of the Quarter)

Securities & Exchange Board of India

21. Submission of un audited financial results to stock exchange

33(3)(a to c) SEBI (Listing Obligations and Disclosure Requirements) 2015

Within 45 days of the end of each quarter

Stock Exchanges

Note: While every care has been taken in the preparation of this Compliance Check list for the Month of January & February, 2019, to ensure its accuracy at the time of publication, NIRC – ICSI assumes no responsibility for any errors which despite all precautions, may be found therein. Members are requested to check the latest position with the original sources before acting upon on the information published in this newsletter. Neither this Newsletter nor the information contained herein constitutes a contract or will form the basis of a contract. The material contained in this document does not constitute/ substitute professional advice that may be required before acting on any matter.

Compiled by: CS Abhishek Gupta | [email protected]


NeWS FRoM CHAPTeRSThe Chapters of NIRC-ICSI organised the following programs:S. No. Name of the

ChapterDate of program

Program/ Meeting/ CAP/ theme etc. Chief Guest / Speaker/s

1 Alwar 25.07.2018 Power Point Competition on “The Changing role of a Company Secretary" or “Benefits of joining CS as a Profession”

CS Poonam Data CS Arun Jain

28.07.2018 World Nature Conservation Day- Declamation competition on the theme

CS Arun Jain Shri Anurag Kaushik

2 Gurgaon 21.07.2018 Study Circle Meeting on DIR-3, Director’s KYC CS Divesh Goyal

27.07.2018 Half Day Seminar on CS- The Architect of Board & Annual Meeting

Chief Guest – CS Pradeep Debnath – Chairman – NIRCSpeakers – CS Ilam Kamboj & CS Gopal Ganatra

03.08.2018 Study Circle Meeting on Secretarial Standards-I CS Narinder Kumar

10.08.2018 Study Circle Meeting on Entrepreneurial Opportunities for CS in India & Abroad

CS Bhanu Bhargava

18.08.2018 Study Circle Meeting on Appearance Before NCLT CS Vinay Shukla

07.09.2018 Study Circle Meeting on Leadership – The Toastmasters’ Way

CS Sachin Bishnoi, CS Akhilendra Singh Mr. Ankur Yadav

16.11.2018 Study Circle Meeting on Exemptions to Pvt. Ltd. Cos. CS Divesh Goyal

3 Jaipur 11.08.2018 Study Circle Meeting on Companies Amendment Bill-DIR-3

CS Deepak Arora

02.09.2018 Seminar on NCLT & IBC CS Susshil Daga

06.09.2018 Study Circle Meeting on Companies Amendment bill CS Sandeep Jain

22.09.2018 Study Circle Meeting on POSH CS Rachna Roy

01.12.2018 Full Day Seminar on IBC Justice S. J. Mukhopadhaya

4 Jalandhar 28.07.2018 Study Circle Meeting on General Discussion on “Dematerialization of Shares in Unlisted Companies” and “Updation of Director's KYC”

CS AMIT VINAYAK, Chairman, Jalandhar Chapter of NIRC of ICSI

11.10.2018 Half Day Seminar on “21st Century Skills & Trends” and “Discussion & Critical Analysis of Provisions of Section 185 and 186 of Companies Act, 2013”

Mr. Suneel Keswani

26.11.2018 Half Day Seminar on “Companies (Amendment) Ordinance 2018”

CS Dinesh Gupta

5 Kota 15.08.2018 Study session on Form DIR 3 KYC CS Akash Agrawal

6 Ludhiana 09.08.2018 Seminar as Associate partner: “Interactive Sessions on IBC & GST”

Various GST officials & professionals.

7 Udaipur 05.09.2018 Study Circle Meeting on Provision of Significant Beneficial ownership under Section 89 and 90 of Company Amendment Act, 2017

Mr. Deepak Arora

8 Varanasi 15.08.2018 Study Circle Meeting- DIR KYC Chairman

News from Chapters


Images

Glimpses of the various programs organised during the year.

NIRC - ICSI Newsletter | January 2019 24Glimpses of the various programs organised during the year.

Documents

“Happiness is when what you think, what you say, and what you do … Jan 19 -16.pdf · CS Manoj Kumar - 9910688433 CS Aishwarya Mohan Gahrana - 9650338103 CS Divesh Goyal - 8130757966