Learnlabz Company Secretary December 2011 Exam Revision & Updates

Transcript

COMPANY SECRETARY CLASSES COMPANY SECRETARY BOOKS A MATTER OF PRESENTATION IN 3 HOURS IN EXAM HALL!!! Click the relevant LINKS TO ENJOY PASSING December 2011 Company Secretary Exams UPDATES ON SECURITIES FINANCIAL, TREASURY & FDI POLICY FOR LAW/DUE DILIGENCE & FOREX MANAGEMENT ALLIANCES & FEMA CORPORATE COMPLIANCE (CRUCIAL THEORY & Formulae) DIRECT TAXES FOR CS EXECUTIVE & PROFESSIONAL PROGRAM (Complete Brush Up) GUIDELINES IN CORPORATE GOVERNANCE & SUSTAINABILITY UPDATES ON COMPANY LAW/COMPANY SECRETARIAL PRACTICE LEARN LAST MINUTE FOR COMPANY SECRETARY EXAMS Click the relevant LINKS TO ENJOY PASSING December 2011 Company Secretary Exams www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) SECURITIES LAW Mutual Fund – 1. 2. 3. 4. Every close ended scheme (OTHER THAN Equity Linked Savings Scheme) shall be listed and the units of such scheme shall not be repurchased before the end of maturity period of the scheme. Units of Mutual Fund Schemes (OTHER THAN Equity Linked Savings Scheme) are FREELY transferable. A Mutual Fund Scheme can invest UPTO 30% of its Net Assets in Money Market Instruments of an ISSUER (Other than Government Securities, Treasury Bills & CBLO’s). Units of Mutual funds schemes may be permitted to be transacted through clearing members of the registered Stock Exchanges. The Depository participants of registered Depositories to process only redemption request of units held in demat form. The physical verification of gold underlying the Gold ETF (Exchange Traded Fund) units shall be carried out by statutory auditors of mutual fund schemes and reported to trustees on HALF YEARLY BASIS who in turn shall report to SEBI. There shall be NO ENTRY LOAD for all Mutual Fund Schemes. However, UPFRONT COMMISSION can be paid by investors to distributors for their service. Similarly, distributors may also have TRANSACTION CHARGE per subscription of Rs. 10,000/- and above be allowed to be paid. Mutual Funds can charge an EXIT LOAD UPTO 1%. Mutual Funds should provide an option to the investors to receive allotment of Mutual Fund units in their DEMAT account while subscribing to any scheme (open ended/close ended). The scheme annual reports or abridged summary would only be sent by email, if available. On request, physical copies may be sent WITHOUT demur and it shall also be made available to the investors at their registered offices at all times. AMCs shall ensure that consolidated account statement (CAS) for each calendar month is issued to the investors in whose folios transactions has taken place during that month. The foreign investors (termed as Qualified Foreign Investors/ QFIs) who meet KYC requirement may invest in equity and debt schemes of Mutual Funds (MF) through the following two routes SUBJECT to total ceiling of 10 billion USD for Equity Schemes & other conditions: a. DIRECT ROUTE - Holding MF units in demat account through a SEBI registered depository participant (DP) (with 50 crores of Paid-up Capital) from a FATF country which is a signatory to IOSCO’s Memorandum and is NOT a FII or a Sub-account holder. INDIRECT ROUTE- Holding MF units via Unit Confirmation Receipt (UCR) issued overseas with UNDERLYING as rupee denominated units of Mutual fund (as with SEBI registered Custodian). There shall be a compliance of FATF standards, PMLA and SEBI circulars in this regard. 5. 6. 7. 8. 9. b. “Infrastructure debt fund scheme” means a [close ended] mutual fund scheme that invests primarily (MINIMUM 90% of scheme assets) in the debt securities or securitized debt instrument of infrastructure companies or infrastructure capital companies or infrastructure projects or special purpose vehicles (SPV) which are created for the purpose of facilitating or promoting investment in infrastructure, and other permissible assets in accordance with these regulations or bank loans in respect of completed and revenue generating projects of infrastructure companies or projects or SPVs. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) Intermediary – Any change in status or constitution of Intermediary by way of merger or amalgamation or demerger [ie, change in legal formation or ownership] or change in MD/WTD merely requires intimation in half yearly reporting to SEBI. However, any change in control as per Takeover Code or change of ATLEAST 51% of body corporate requires PRIOR APPROVAL of SEBI through SINGLE WINDOW CLEARANCE by disclosing the FACTS of earlier rejection of application by SEBI, if any, litigation, anyother action taken under securities law or the pending investor complaints; further COMMITMENT shall be given that there will NOT be any change in directors till the approval is granted and it shall be informed to ALL existing investors. REGISTRATION AS INTERMEDIARY – The initial registration as Intermediary with SEBI is VALID FOR 5 YEARS and shall be renewed thereafter to get a Certificate of Permanent Registration. NETWORTH FOR RTA’s – • • 1. Registrar AND Share Transfer Agent shall be Rs. 50,00,000/Registrar OR Share Transfer Agent shall be Rs. 25,00,000/ASSOCIATED PERSONS – Distributors, agents or any persons employed or engaged or to be employed or engaged in the sale and/or distribution of mutual fund products shall be required to have a valid certification from the National Institute of Securities Markets (NISM). Approved users and sales personnel of the trading members who are registered as such in the currency derivatives segment of a recognized stock exchange and trading in interest rate derivatives shall have the Interest Rate Derivatives certification of NISM. Persons associated with a registered stock-broker/trading member/clearing member in recognised stock exchanges, who are involved in, or deal with, assets/funds of investors OR redressal of investor grievances OR internal control shall have Operations & Risk Management certification from NISM. ‘Depository Receipt’ (DR) means a negotiable security issued outside India by a Depository bank, on behalf of an Indian company, which represent the local Rupee denominated equity shares of the company held as deposit by a Custodian bank in India. DRs are traded on Stock Exchanges in the US, Singapore, Luxembourg, etc. DRs listed and traded in the US markets are known as American Depository Receipts (ADRs) and those listed and traded anywhere/elsewhere are known as Global Depository Receipts (GDRs). SEBI (KNOW YOUR CLIENT REGISTRATION AGENCY - KRA) REGULATIONS, 2011 KRA – MEANS – Company under Companies Act – deemed to be an INTERMEDIARY and thus most of the provisions of Intermediaries will mutadis mutandis (as such) apply. ‘‘KYC’’ means the procedure prescribed by SEBI for identifying and verifying the Proof of Address, Proof of Identity and compliance with rules, regulations, guidelines and circulars issued by SEBI or any other authority for Prevention of Money Laundering from time to time. The following persons can register as KRA with SEBI – the wholly owned subsidiary (WoS) of Stock Exchanges or Depositories or other Intermediaries or Self Regulatory Organisations registered with SEBI with a NETWORTH of Rs. 25 crores. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) 2. 3. Functions, Obligations & Operative Instructions of KRA: 1. 2. 3. 4. 5. Every KRA should have the interoperability (ability) to determine whether the KYC documents of the client are in the custody of another KRA. KRA shall have a secure data transmission link with other KRA(s) and with each intermediary that uploads the KYC documents on its system and relies upon its data. It shall be responsible for storing, safeguarding and retrieving the KYC documents. KRA shall have adequate mechanisms for the purposes of reviewing, monitoring and evaluating its controls, systems, procedures and safeguards. KRA shall send a letter to each client after receipt of the KYC documents from the intermediary, confirming the client’s details thereof. SMART ORDER ROUTING (SOR)– It allows the brokers TRADING ENGINES to SYSTEMATICALLY choose the EXECUTION DESTINATION based on factors viz. price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of (ALL types of) order. This facility shall be provided to ALL INVESTORS by Stock Exchanges. The Stock Broker (located in India) shall enter into a SPECIFIC AGREEMENT with the client to provide this facility. SECURITIES TRADING USING WIRELESS TECHNOLOGY (STWT)– It includes devices such as mobile phone, laptop with data card, etc, that use Internet Protocol (IP). Adequate measures should be taken for user identification, authentication and access control using means such as user-id, passwords, smart cards, biometric devices or other reliable means, to prevent misuse of facility by unauthorized persons. All the provisions of Internet based trading (IBT) shall apply. However, the broker’s server routing orders to the exchange trading system shall be located in India. In case of failure of IBT/ STWT, the broker’s alternate channel of communication shall have adequate capabilities for client identification and authentication. The back-up and restore systems implemented by the broker should be adequate to deliver sustained performance and high availability. The broker system should have on-site as well as remote site back-up capabilities. EXERCISE STYLE OF STOCK OPTION CONTRACTS Flexibility is given to Stock Exchanges to offer either European style or American style stock options. American-style options may be exercised at any time before the option expires, while owners of European-style options may be exercised only at expiration. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) STANDARDISATION & Revised CREDIT Rating Symbols of CARE, CRISIL, FITCH and ICRA Rating symbols should have CRA’s first name as PREFIX . The following are the types of INSTRUMENTS: 1. Long term debt instruments: The instruments with original maturity EXCEEDING one year. 2. Short term debt instruments: The instruments with original maturity of UPTO one year. 3. Long term structured finance instruments: The instruments with ORIGINAL MATURITY exceeding one year. It will be like AAA (SO) in the same formats as below. 4. Short term structured finance instruments: The instruments with ORIGINAL MATURITY of upto one year. It will be like A1 (SO) in the same formats as below. 5. Long term debt mutual fund schemes: The debt mutual fund schemes that have an original maturity exceeding one year. It will be like “AAAmfs” in the same formats as below. 6. Short term debt mutual fund schemes: The debt mutual fund schemes that have an original maturity of upto one year. It will be like “A1mfs” in the same formats as below. 7. For Structured Products, prefix ‘PP-MLD’ denoting Principal Protected Market Linked Debentures followed by the standardized rating symbols for long/ short term debt. CARE Long-Term Debt instruments Short-Term Debt instruments Earlier Rating Symbol Revised Rating Symbol Existing Symbols New Symbols AAA CARE AAA PR-1 CARE A1 AA CARE AA PR-2 CARE A2 A CARE A PR-3 CARE A3 BBB CARE BBB PR-4 CARE A4 BB CARE BB PR-5 CARE D B CARE B C CARE C D CARE D CRISIL Long-Term Debt instruments Short-Term Debt instruments Revised Rating Symbol Revised Rating Earlier Rating Revised Rating Symbol Symbol Symbol AAA CRISIL AAA P1 CRISIL A1 AA CRISIL AA P2 CRISIL A2 A CRISIL A P3 CRISIL A3 BBB CRISIL BBB P4 CRISIL A4 BB CRISIL BB P5 CRISIL D B CRISIL B C CRISIL C D CRISIL D FITCH INDIA Long-Term Debt instruments Short-Term Debt instruments Earlier Rating Revised Rating Earlier Rating Revised Rating Symbol Symbol Symbol Symbol AAA (ind) Fitch AAA F1(ind) Fitch A1 AA (ind) Fitch AA F2(ind) Fitch A2 A (ind) Fitch A F3 (ind) Fitch A3 BBB(ind) Fitch BBB F4(ind) Fitch A4 BB(ind) Fitch BB F5(ind) Fitch D B(ind) Fitch B C(ind) Fitch C D Fitch D ICRA Long-Term Debt instruments Short-Term Debt instruments Earlier Rating Revised Rating Earlier Rating Revised Rating Symbol Symbol Symbol Symbol LAAA ICRA AAA A1 ICRA A1 www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) LAA LA LBBB LBB LB LC LD ICRA AA ICRA A ICRA BBB ICRA BB ICRA B ICRA C ICRA D A2 A3 A4 A5 ICRA A2 ICRA A3 ICRA A4 ICRA D Source: RBI S CO RE S – SEBI COmplaint REdressal System: This would enable investors to lodge and follow up their complaints and track the status of redressal of such complaints from anywhere using http://scores.gov.in . This would also enable the market INTERMEDIARIES and LISTED companies to receive the complaints from investors against them, redress such complaints and report redressal. CODE OF CONDUCT FOR INVESTOR ASSOCIATIONS – 1. 2. 3. 4. 5. The objective is to EDUCATE, CREATE AWARENESS & PROTECT the interest of investors. It shall observe the HIGHEST STANDARD of honesty, integrity & fairness. It shall UPDATE themselves with the latest development & regulatory changes in SECURITIES MARKET & DISSEMINATE the same to investors. The Association shall cooperate and SUPPORT each other & SEBI in all its activities & initiatives. The Association shall NOT recommend or otherwise promote any issuer, securities, intermediaries OR act as an agent of them. INSIDER TRADING – The Form B & D under Insider Trading now extends mutadis mutandis (as such) to PROMOTER or part of promoter GROUP of a listed company. EQUITY LISTING AGREEMENT SHAREHOLDING PATTERN – CLAUSE 35 1. Entities which seek listing of their securities post-IPO shall mandatorily submit their shareholding pattern as per Clause 35 ONE DAY PRIOR to the date of listing and shall be UPLOADED on Stock exchange’s WEBSITE before commencement of trading. CAPITAL RESTRUCTURING IN LISTED ENTITIES – exceeding +/- 2% of the paid-up share capital of the entities shall be filed as revised shareholding pattern WITHIN 10 days from the date of allotment of shares and shall be UPLOADED on Stock exchange’s WEBSITE immediately. Disclosure in respect of Depository Receipts issued OVERSEAS shall be segregated as ‘promoter/promoter group’ and to the ‘public’. CLAUSE 35A - Disclosure of VOTING RESULTS by certain listed entities: WITHIN 48 hours www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) 2. 3. from the conclusion of the concerned shareholders’ meeting AGENDA-wise with % of voting by promoters & others FOR & AGAINST the resolution shall be given to Stock Exchanges & also update in their WEBSITE. CLAUSE – 41 Listed entities shall also submit the last quarter results along with the audited annual results. CLAUSE 32 – ANNUAL REPORTS TO SHAREHOLDERS Listed companies shall supply SOFT COPIES OF FULL annual reports to all those shareholders who have registered their email addresses for the purpose; HARD COPY OF ABRIDGED annual reports to others UNLESS hard copy of FULL annual report is requested. This clause mutadis mutandis (as such) applies to IDR Listing Agreement & SME Listing Agreement. UNIFORM PROCEDURE FOR DEALING WITH UNCLAIMED SHARES – CLAUSE 5A 1. • Procedure for shares issued pursuant to the public issues or any other issue which remain unclaimed in ESCROW ACCOUNT: RTA to send at least 3 REMINDERS at the address given in the application form or to LAST available address. If no response is received, the unclaimed shares (& all its corporate benefits) shall be credited to a DEMAT SUSPENSE ACCOUNT. The voting rights on such shares shall remain frozen till the rightful owner claims the shares. The ISSUER shall maintain details of shareholding of each individual allottee whose shares are credited to DEMAT SUSPENSE ACCOUNT and shall DISCLOSE in the Annual Report – Aggregate number of shareholders and the outstanding shares in such suspense account during beginning & closing of the year and details of transfer from suspense account during the year. Procedure for shares issued in PHYSICAL form pursuant to a public issue or any other issue, which remain unclaimed: The same procedure as mentioned above mutadis mutandis (as such) applies with the words “DEMAT SUSPENSE ACCOUNT” shall be replaced by one folio in the name of “UNCLAIMED SUSPENSE ACCOUNT”. CORPORATE BENEFITS – Clause 20-22: Every company shall have PRE-ANNOUNCED FIXED PAY DATE for payment of dividends and for credit of bonus shares. NEW Clause 53 - Disclosures regarding agreements/arrangements/back-to-back treaties with the MEDIA COMPANIES/its Associates, their shareholding details and nominees of media companies on the Board of the Listed Company. NEW Clause 54 – Maintenance & Updation of a FUNCTIONAL WEBSITE with details of its business, financial information, shareholding pattern, compliance with corporate governance, contact information of the designated officials of the company who are responsible for assisting and handling investor grievances, etc. . . REDEMPTION OF IDRs INTO UNDERLYING EQUITY SHARES AUTOMATIC FUNGIBILITY is the ”ability to withdraw shares” from the IDR Facility and to deposit further shares into the IDR Facility. After the completion of ONE YEAR from the date of issuance of IDRs, REDEMPTION of the IDRs shall be permitted ONLY IF the IDRs are INFREQUENTLY TRADED on the stock exchange(s) in India. Infrequently Traded means annualized trading turnover in IDRs during the 6 CALENDAR months immediately preceding the month of redemption is less than 5% the listed IDRs. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) • 2. In such cases, a PUBLIC ANNOUNCEMENT (PA) in English & Hindi Newspapers shall be made WITHIN 7 days of CLOSE of Half Year. IDR holder shall apply for redemption WITHIN 30 DAYS of PA. IDR shall be REDEEMED WITHIN 30 DAYS of Redemption Applicaiton. INFREQUENTLY TRADED = PUBLIC ANNOUNCEMENT (within 7 days) = APPLICATION FOR REDEMPTION (within 30 days) = REDEMPTION (within 30 days). SEBI (Issue and Listing of Debt Securities - ILDS) Regulations, 2008 & Market-LINKED debentures: Equity linked debentures or stock linked debentures are HYBRID securities, the RETURNS of which are linked to equity markets (on other underlying securities/ indices OR through exposures on exchange traded derivatives). These are also called ‘structured products’. Kindly note, this regulation DO NOT COVER Securities which do not promise to return the principal amount in full at the end of the tenor of the instrument since they are NOT debt securities. The issuer of Structured products or Market linked debentures should have a networth of Rs. 100 crores. It shall be mandatory for the issuer to appoint a THIRD PARTY VALUATION AGENCY which shall be a credit rating agency registered with SEBI. Only a SEBI regulated intermediary can SELL this security to a RETAIL investor. The additional disclosures for issue of such securities include PROMINENT display of Credit Risk Factor & Model Risk Factor, i.e., the securities are created on the basis of complex mathematical models involving multiple derivative exposures which may or may not be hedged and the actual behavior of the securities selected for hedging may significantly differ from the returns predicted by the mathematical models. LISTING AGREEMENT FOR SECURITIZED DEBT INSTRUMENTS – the most ever JARGONic listing agreement with just 20 clauses in it. However, most provisions are in line with Debt Listing Agreement. This Listing Agreement is issued Under SEBI (Public offer and Listing of Securitised Debt Instruments - POLSDI) Regulations, 2008 to provide for disclosure of pool level, tranche level and select loan level information. SPVs which make FREQUENT ISSUES of securitized debt instruments are permitted to file UMBRELLA OFFER DOCUMENTS on the lines of a ‘Shelf prospectus’. The securitized debt instruments listed on the Exchange shall REMAIN on the list TILL the maturity OR redemption of securitised debt instruments OR TILL the same are delisted as per the procedure laid down by SEBI. SYSTEM AUDIT FRAMEWORK The following would be repeated annually to ensure that the audit process is comprehensive & effective: The Audit shall be conducted according to the Norms, Terms of References (TOR) and Guidelines issued by SEBI. The Auditors can perform a maximum of 3 successive audits. Audit schedule shall be submitted to SEBI at-least 2 months in advance, along with scope of current audit & previous audit. The report should have specific compliance / non-compliance issues, observations for minor deviations as well as qualitative comments for scope for improvement. The Auditee management provides their comment about the Non-Conformities (NCs) and observations. For each NC, specific time-bound (within 3 months) corrective action must be taken and reported to SEBI. The auditor should indicate if a follow-on audit is required to review the status of NCs. The report along with Management Comments shall be submitted to SEBI, within 1 month of completion of the audit. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) SEBI (ISSUE OF CAPITAL & DISCLOSURE REQUIREMENTS – ICDR) REGULATIONS, 2009: ELIGIBILITY CRITERIA: 1. 2. 50% on monetary assets shall not be applicable in case the public offer is made entirely through an OFFER FOR SALE. The track record of distributable profits, on both stand-alone as well as consolidated basis for at least 3/5 previous years; If the SUBSIDIARY has NOT completed 5 years of existence, then it shall have net profits on a consolidated basis in atleast one year for which consolidated accounts are prepared. If the LISTED company has CHANGED its name, there is a condition that atleast 1% of total revenue during last 1 year should have come from NEW name. Now, a further option is given to the issuer where it is sufficient if the New ACTIVITY [Fixed Assets + Advances (to contractors/suppliers for New Project) + Works In Progress] is ATLEAST 50% of assets of the company. ASBA: ASBA is mandatory for Public & Rights Issue where there is only one payment option. The nonretail investors i.e. Qualified Institutional Buyers (QIB) and Non-Institutional Investors, making application in public/ rights issue SHALL mandatorily make use of ASBA facility. OTHERS: 1. 2. 3. 4. The LIMITS of retail investor is increased to 2 lakhs from erstwhile limit of 1 lakh. The insurance funds set up and managed by the Department of Posts, India is also a QIB. Chapter XA becomes “RIGHTS ISSUE OF INDIAN DEPOSITORY RECEIPTS” . Chapter XB is “ISSUE OF SPECIFIED SECURITIES BY SMALL AND MEDIUM ENTERPRISES”. 3. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) CONSOLIDATED FDI POLICY – consolidating all erstwhile PRESS NOTES CAPS: Sector-specific policy for foreign investment www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) In the following sectors/activities, FDI up to the limit indicated below is allowed subject to other conditions as indicated. In Sectors/Activities not listed below, FDI is permitted up to 100 per cent on the automatic route subject to sectoral rules/ regulations applicable. 100% Automatic Route: Agriculture related, Alcohol distribution & brewing, Mining related, Coffee & Rubber related, Hazardous chemicals, Industrial Explosives, Drugs & Pharmaceutical related, Power transmission distribution & trading (NOT from atomic power plant), Airports, Township development & Infrastructure project, Industrial Parks & SEZ, RBI registered Non-Banking Companies (NBFC), SEBI Intermediaries, Venture Capital and Wholesale/cash & carry trading. 74% Automatic Route (100% for NRI’s): All Airport related services, Other civil aviation services. 51% Automatic Route: Single Brand Product Retailing. 49% Automatic Route: Telecommunications related. 26% Automatic Route: Public sector Banks, Insurance Sectors. 20% Automatic Route: Private Sector Bank. FIPB Route: Beyond the ceiling limits in the abovementioned sectors and for any investment in the following sectors: Print Media related, Tea Sector, Defence production, Asset Reconstruction Companies, Broadcasting related – Cable, DTH & FM Radio, Commodity/Stock Exchanges, Courier services, Credit Information Company, Satellites. Prohibition on foreign investment in India (i) Foreign investment in any form is prohibited in a company or a partnership firm or a proprietary concern or any entity, whether incorporated or not (such as, Trusts) which is engaged or proposes to engage in the following activities: a. Business of chit fund, or b. Nidhi company, or c. d. e. Agricultural or plantation activities, or Real estate business, or construction of farm houses, or Trading in Transferable Development Rights (TDRs). (ii) It is clarified that “real estate business” means dealing in land and immovable property with a view to earning profit or earning income therefrom and does not include development of townships, construction of residential / commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships. (iii) In addition to the above, Foreign investment in the form of FDI is also prohibited in certain sectors such as (Annex-2): a. b. c. d. e. f. g. h. i. Retail Trading (except single brand product retailing) Atomic Energy Lottery Business including Government / private lottery, online lotteries, etc. Gambling and Betting including casinos, etc Business of chit fund Nidhi company Trading in Transferable Development Rights(TDRs) Activities / sectors not opened to private sector investment Agriculture (excluding Floriculture, Horticulture, Development of seeds, Animal Husbandry, Pisciculture and cultivation of vegetables, mushrooms, etc. under controlled conditions and services related to agro and allied sectors) and Plantations (other than Tea Plantations) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes. j. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) FEMA COMPLIANCES • • • For FDI: Receipt of Forex for Equity –within 180 days à ALLOTMENT –within 30 days à FILE FC-GPR For FDI: Annual Return on Foreign Exchange Assets & Liabilities within 31st July of every year Form FNC shall be filed for opening of Branch or Liaison or Project office in India by a foreign entity • For ODI: Form ODI, comprising of four parts: Part I - includes the following: Section A – Details of the Indian Party Section B – Details of Investment in New Project Section C - Details of Investment in Existing Project Section D – Funding for JV / WOS Section E – Declaration by the Indian Party (to be retained by AD Category – I bank) Section F - Certificate by the Statutory Auditors of the Indian Party (to be retained by AD Category – I bank) Part II - Reporting of Remittances Part III - Annual Performance Report (APR) Part IV – Report on Closure/Disinvestment/Voluntary Liquidation/Winding up of JV / WOS www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) Updates on Companies Act, 1956  Balance sheets of holding company NEED NOT include particulars under Section 212 as to its subsidiaries if it is disclosed in Annual report on satisfaction of certain conditions.  Public limited company need not get approval of Central Government under Schedule XIII if there is NO or INADEQUATE profits during the year for appointment of Managing or Whole time directors.  Central Government approval will not be required for payment of commission to Non Executive directors in addition to sitting fees under Section 309 if it does not exceed:  1% of Net Profits in companies with MD & Whole time directors  3% of Net Profits in companies WITHOUT Managing & Whole time directors.  In Directors report under Section 217(2A) regarding Particulars of employees the salary limits are increased to Rs. 5 lakhs per monrth or Rs. 60 lakhs per financial year.  The limits under Office or Place of profit for getting anything above the remuneration of directors or through related persons where Central Government approval is required under Section 314 is increased to Rs. 2,50,000/- per month.  Selection committee of Independent directors required for selecting a relative of director for office or place of profit for a LISTED COMPANY. In respect of UNLISTED public companies need not have independent director but requires an EXPERT IN THE RESPECTIVE FIELD outside the company in the selection committee. However, both Independent directors & expert is exempted for selection committee of a PRIVATE LIMITED company.  Quick online incorporation process is available for formation of company WITHIN 24 hours.  Online approval of Central Government for Section 297 transactions related to contract with directors and related persons for purchase or sale or supply of goods or materials or services on satisfaction of prescribed conditions.  The condonation of delay relating to rectification of charges under Section 141 will be dealt by ROC in place of Company Law Board.  The approval from Company Law Board for shifting of registered office from one state to another state under Section 17 shall be dealt by ROC.  Listed companies and Unlisted companies with Paid-up capital of 5 crores/more OR with a turnover of Rs. 100 crores/more, shall file their financials only through eXtensible Business Reporting Language (XBRL).  A clarification under Section 295 that it will be attracted only if the beneficiary is a public limited company.  Board meeting can be attended through Video conferencing if Director attends atleast one meeting personally in a year.  Amendments are made to Cost Audit requirements where Central Government mandates cost audit for the industry. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) THE UK CORPORATE GOVERNANCE CODE, 2010 for Corporate Governance 1. The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company. 2. The first version of the UK Code on Corporate Governance (the Code) was produced in 1992 by the Cadbury Committee. Its paragraph 2.5 is still the classic definition of the context of the Code: Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to laws, regulations and the shareholders in general meeting. 3. Corporate governance is therefore about what the board of a company does and how it sets the values of the company, and is to be distinguished from the day to day operational management of the company by full-time executives. 4. The Code is a guide to a number of key components of effective board practice. It is based on the underlying principles of all good governance: accountability, transparency, probity and focus on the sustainable success of an entity over the longer term. 5. The Code has been enduring, but it is not immutable. Its fitness for purpose in a permanently changing economic and social business environment requires its evaluation at appropriate intervals. The reviews preceding this one were in 2005 and 2007. The Preface, which should be regarded as an integral part of the Code, introduces the changes made in the current review. 6. The new Code applies to accounting periods beginning on or after 29 June 2010 and, as a result of the new Listing Regime introduced in April 2010, applies to all companies with a Premium Listing of equity shares regardless of whether they are incorporated in the UK or elsewhere. CORPORATE GOVERNANCE VOLUNTARY GUIDELINES, 2009 This is for Unlisted Public Limited Companies & Private Limited Companies similar to Clause 49 of Listing Agreement Para V of this Guideline: SECRETARIAL AUDIT Since the Board has the overarching responsibility of ensuring transparent, ethical and responsible governance of the company, it is important that the BOARD PROCESSES AND COMPLIANCE MECHANISMS of the company are robust. To ensure this, the companies may get the Secretarial Audit conducted by a COMPETENT PROFESSIONAL. The Board should give its comments on the Secretarial Audit in its report to the shareholders. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) CORPORATE SOCIAL RESPONSIBILITY (CSR) VOLUNTARY GUIDELINES 2009 The CSR Policy should normally cover following core elements: 1. Care for all Stakeholders: The companies should respect the interests of, and be responsive towards all stakeholders, including shareholders, employees, customers, suppliers, project affected people, society at large etc. and create value for all of them. They should develop mechanism to actively engage with all stakeholders, inform them of inherent risks and mitigate them where they occur. 2. Ethical functioning: Their governance systems should be underpinned by Ethics, Transparency and Accountability. They should not engage in business practices that are abusive, unfair, corrupt or anti-competitive. 3. Respect for Workers' Rights and Welfare: Companies should provide a workplace environment that is safe, hygienic and humane and which upholds the dignity of employees. They should provide all employees with access to training and development of necessary skills for career advancement, on an equal and non-discriminatory basis. They should uphold the freedom of association and the effective recognition of the right to collective bargaining of labour, have an effective grievance redressal system, should not employ child or forced labour and provide and maintain equality of opportunities without any discrimination on any grounds in recruitment and during employment. 4. Respect for Human Rights: Companies should respect human rights for all and avoid complicity with human rights abuses by them or by third party. 5. Respect for Environment: Companies should take measures to check and prevent pollution; recycle, manage and reduce waste, should manage natural resources in a sustainable manner and ensure optimal use of resources like land and water, should proactively respond to the challenges of climate change by adopting cleaner production methods, promoting efficient use of energy and environment friendly technologies. 6. Activities for Social and Inclusive Development: Depending upon their core competency and business interest, companies should undertake activities for economic and social development of communities and geographical areas, particularly in the vicinity of their operations. These could include: education, skill building for livelihood of people, health, cultural and social welfare etc., particularly targeting at disadvantaged sections of society. NATIONAL VOLUNTARY GUIDELINES ON SOCIAL, ENVIRONMENTAL & ECONOMIC RESPONSIBILITIES OF BUSINESS, 2011 The core principles: 1. Businesses should develop governance structures, procedures and practices that ensure ethical conduct at all levels 2. 3. Businesses should communicate transparently of decisions impacting relevant stakeholders Businesses should not engage in practices that are abusive, corrupt or anti-competitive www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) 4. 5. 6. Businesses should truthfully discharge their responsibility on financial and other mandatory disclosures Businesses should report on the status of their adoption of these guidelines as suggested in the reporting framework in this document Business should avoid complicity with actions of any their party that violates any of the principles contained in this guidelines Enjoy learning CS Foundation Program Classes for June 2012 Exams (1st February – April) Subject English & Business Communication Economics & Statistics Financial Accounting Elements of Business laws & Management Timing Day 5.30 to 8.30 AM/PM 5.30 to 8.30 AM/PM 5.30 to 8.30 AM/PM Monday Tuesday Wednesday Additional classes may be scheduled based on students comfort 5.30 to 8.30 AM/PM Thursday Fees Per Subject – Rs.3,250/-; All Four Subjects – Rs.13,000/- Will help you lay a strong foundation NO REGISTRATION FEES; All Workbooks & Materials, if any, will be given towards Company Free of Cost. Secretary For Registration/Enquiry Call: 93829 35598 profession Registration venue - Learn Labz @ No. 26/37, South West Boag Road, Opp: Visa Hospital, T.Nagar, Chennai-17. Classes conducted at – @ No.128 Veera Perumal Koil Street, Mylapore, Chennai-04. Classes are handled by professionals (including from OnlyThisMuch) who understand CS Exam patterns and gel with students. Learnlabz works through real time students’ feedback to make learning an interesting experience with almost 100% success rate of creating Have a Learnlabz Xperiment to Xcel!!! www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) dedicated Company Secretaries for ICSI. Enjoy passing. CS Executive Program Classes for June 2012 Exams (Jan – April) Effectively, 2 sessions each on Friday, Saturday and Sunday. Theory subjects will go over 50 hours and practical subjects about 100 hours. Additional classes may be scheduled based on students comfort. The classes will create an approach to learn and understand for Company Secretary exams and future. Have a Learnlabz Xperiment to Xcel!!! Subject Module 1 Month Timing Day General & Commercial Laws (GCL) Cost & Management Accounts Company Accounts (CA-CMA) Tax laws (TL, CST & VAT) Module 2 20th Jan 2012 onwards 7th Jan 2012 onwards 5.30 PM to 8.30 PM 1.30 PM to 4.30 PM 6.15 AM to 9 AM Friday’s Saturday’s Sunday’s Saturday’s 7th Jan 2012 onwards 6.15 AM to 9 AM Company Law (CL) Economic & Labour Laws (ELL) 8th Jan 2012 onwards 6th January 2012 onwards 9.30 AM to 12 NOON 6.15 AM to 8.45 AM Sunday’s Friday’s Securities Law and Compliances (SLC) 17th Mar 2012 onwards 5.30 PM to 8.30 PM Saturday’s Fees Per Subject – Rs.3,750/-; Per Module – Rs.11,250/-; For both Modules – Rs.22,500/NO REGISTRATION FEES; All Workbooks & Materials, if any, will be given Free of Cost. Join early to get Free Copy of “OnlyThisMuch” book For Registration/Enquiry Call: 93829 35598 www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) Registration venue - Learn Labz @ No. 26/37, South West Boag Road, Opp: Visa Hospital, T.Nagar, Chennai-17. Classes conducted at – @ No.128 Veera Perumal Koil Street, Mylapore, Chennai-04. Classes are handled by professionals who understand CS Exam patterns and gel with students. Learnlabz works through real time students’ feedback to make learning an interesting experience with almost 100% success rate of creating dedicated Company Secretaries for ICSI. Enjoy passing. CS Professional Program Classes for June 2012 Exams (Jan – April) For intensive exam preparations, practical classes are kept on weekday mornings and theory subjects on Friday, Saturday & Sunday Weekends. Theory subjects will go over 30 hours and practical subjects about 100 hours. Additional classes may be scheduled based on students comfort. The classes will pave a niche way for your professional career ahead. Have a Learnlabz Xperiment to Xcel!!! Subject Module 1 (Jan-March) Company Secretarial Practice (CSP) Drafting, Appearances and Pleadings (DAP) Module 2 (Jan-April) Corporate Restructuring and Insolvency (CRI) 7th January 2012 onwards 06.15 AM to 9 AM Saturday’s Wednesday& Thursday’s Financial, Treasury and Forex Management (FTFM) Module 3 (Jan-April) 06.15 AM to 9 AM Indirect & Direct Taxes (ATLP) Alliances, International Trade and Strategic Management (SMAIT) Module 4 (Jan-April) Due Diligence and Corporate Compliance Management (DDCCM) 6th January to 16th March 2012 9th January 2012 onwards 7th January onwards Monday & Tuesday’s Saturday & Sunday’s 4th January 2012 onwards 06.15 AM to 9 AM 7th January to 10th March 2012 8th January to 18th March 2012 05.30 PM to 8.30 PM 06.15 AM to 9 AM Saturday’s Sunday’s Month Timing Day 3 PM to 5:30PM 6 PM to 8.30 PM Friday’s www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP) Corporate Governance, Business Ethics and Sustainability (CGBES) 25th March 2012 onwards 6.15 AM to 9 AM Sunday’s Fees Module – I: Rs. 8,000/-; Module – II: Rs.9,000/-; Module – III: Rs.9,000/- Module – IV: Rs.8,000/-; For all Modules – Rs.34,000/- . You can attend even a single subject at Rs.4,000/- (except FTFM & Taxes which is Rs.5,000/-) NO REGISTRATION FEES; All Workbooks & Materials, if any, will be given Free of Cost. Join early to get Free Copy of “OnlyThisMuch” book For Registration/Enquiry Call: 93829 35598 Registration venue - Learn Labz @ No. 26/37, South West Boag Road, Opp: Visa Hospital, T.Nagar, Chennai-17. Classes conducted at – Learn Labz No. 26/37, South West Boag Road, Opp: Visa Hospital, T.Nagar, Chennai-17. Classes are handled by professionals (including from OnlyThisMuch) who understand CS Exam patterns and gel with students. Learnlabz works through real time students’ feedback to make learning an interesting experience with almost 100% success rate of creating dedicated Company Secretaries for ICSI. Enjoy passing. www.learnlabz.com [email protected] CS Classes & Books (GO TO TOP)