Weekly Corporate Updates Saturday,4 th March, 2017

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1 Law Solicitors and Advocates Weekly Corporate Updates Saturday,4 th March, 2017 Contributing Team: CS Alok Kumar Kuchhal Corporate Consultant M.Com, LL.B., FCS CS Chanchal Yadav Corporate Consultant M.Com, LL.B., ACS CS Varun Kwatra Company Secretary B.Com, LL.B., ACS CS Narender Thakur Company Secretary B.com, ACS CS Surabhi Gupta Company Secretary B.com, ACS Concerns: M/s, Advocates & Solicitors, Noida M/s A.K. Kuchhal & Co., Company Secretaries, Noida M/s NPV & Associates, Chartered Accountants, Mumbai

2 Important Notices MCA UPDATES Form AOC-4 CFS, GNL-1 and GNL-3 are likely to be revised on MCA21 Company download page w.e.f. 8 th March, Form SPICe MoA, SPICe AoA and SH-11 are likely to be revised on the MCA-21 w.e.f 26 th Feb, 2017 Closure of Place of business by a Foreign Company Section 391 (2) General Circular 01/2017 Dated : Ministry of Corporate Affairs (MCA) has issued General Circular 01/2017 on clarifying the applicability of Section 391(2) of the Companies Act, 2013 with regard to Foreign Companies. The circular states that: Sub-Section (2) of Section 391 of the Companies Act, 2013, states that the provision of Chapter XX shall apply mutatis mutandis for closure of place of business of a foreign company in India as if it were a company incorporated in India. These provisions have been brought into force on 15th December, Stakeholders have sought clarification with regard to scope of application of the said sub-section. The matter has been examined in the Ministry and it has been noted that sub-section (1) and sub-section (2) of section 391 needs to be read harmoniously. Accordingly, it is clarified that provisions of sub-section (2) of section 391 of the Companies Act, 2013 would apply only in case of a foreign company which has issued prospectus or IDRs pursuant to provisions of Chapter XXII of the Companies Act, RBI UPDATES Master Direction Money Transfer Service Scheme (MTSS) RBI/FED/ /52 FED Master Direction No.1/ Date : February 22,2017 Money Transfer Service Scheme (MTSS) is a quick and easy way of transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances into India such as remittances towards family maintenance and remittances favouring foreign tourists

3 visiting India are permissible. No outward remittance from India is permissible under MTSS. The system envisages a tie-up between reputed money transfer companies abroad known as Overseas Principals and agents in India known as Indian Agents who would disburse funds to beneficiaries in India at ongoing exchange rates. The Indian Agents can in turn also appoint subagents to expand their network. The Indian Agent is not allowed to remit any amount to the Overseas Principal. Under MTSS the remitters and the beneficiaries are individuals only. This document covers the details regarding the entry norms, authorization, renewal and various operating instructions pertaining to the entities involved in this scheme. Related Link : Infrastructure Financing- Definition of 'Infrastructure Lending' RBI/ /242 DNBR.PD.CC.No.085/ / Dated:- March 02, 2017 Definition of 'Infrastructure Lending' contained in the Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and Non-Banking Financial Company Non-Systemically Important Non- Deposit taking Company (Reserve Bank) Directions, The Government of India has further updated the Harmonised Master List of Infrastructure subsectors vide Gazette Notifications dated October 13, 2014, April 8, 2016 and August 1, In this regard, it is advised that for the purpose of definition of Infrastructure Lending, NBFCs may henceforth be guided by the Gazette Notifications issued by the Department of Economic Affairs, Ministry of Finance, Government of India, from time to time. Related Link : Circular on mutual funds Circular No : SEBI/HO/IMD/DF2/CIR/P/2017/17 February 28, 2017 SEBI UPDATES The investment restrictions mentioned at Clause 13 in the Seventh Schedule of SEBI (Mutual Funds) Regulations, 1996 shall be applicable to all fresh investments by all schemes, including an existing scheme. Any existing scheme intending to invest in units of REITs/InvITs shall abide by

4 the provisions of Regulation 18 (15A) of SEBI (Mutual Funds) Regulations, For investment in units of REITs/InvITs by an existing Mutual Fund scheme, unit holders of the scheme shall be given a time period of at least 15 days for the purpose of exercising the exit option. This circular shall be applicable with immediate effect. This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act 1992, read with the provision of Regulation 77 of SEBI (Mutual Funds) Regulation, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Related Link : Investments by FPIs in corporate debt securities Circular No : SEBI/HO/IMD/FPIC/CIR/P/2017/16 February 28, 2017 RBI on October 24, 2016, had amended the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Twelfth Amendment) Regulations, 2016 through a Gazette notification to permit FPIs to invest in unlisted corporate debt and securitised debt instruments.. Accordingly, the SEBI (Foreign Portfolio Investors) (Second Amendment) Regulations, 2017 were notified on February 27, It has been decided to permit FPIs to invest in the following: Related Link : Consultation Paper for Review of Regulations and Relevant Circulars pertaining to Market Infrastructure Institutions (MIIs) viz., Stock Exchanges, Depositories and Clearing Corporations. Date :February 22,2017 To solicit the comments/views from public on the suggestions pertaining to amendments to the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 (hereinafter referred as SECC Regulations ), Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 (hereinafter referred as D&P Regulations ) and SEBI circular dated December 13, Related Link :

5 Securities And Exchange Board Of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2017 Notification No. No. SEBI/LAD/NRO/GN/ /035 Dated February 27th, 2017 Following Amendment has been made in existing Regulations : (1) In regulation 2, in sub-regulation (1), in clause (j), after the words and symbol India,, the words and symbol or unlisted debt securities or securitised debt instruments, shall be inserted; 2 (2) In regulation 21, in sub-regulation (1), i. in clause (m), the word and shall be omitted; ii. after clause (m), the following new sub-clauses shall be inserted, namely,- (n) Unlisted non-convertible debentures/bonds issued by an Indian company subject to the guidelines issued by the Ministry of Corporate Affairs, Government of India from time to time; (o) Securitized debt instruments, including,- (i) any certificate or instrument issued by a special purpose vehicle set up for securitization of asset/s with banks, financial institutions or nonbanking financial institutions as originators; and (ii) any certificate or instrument issued and listed in terms of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008; and iii. existing sub-clause (n) shall be re-numbered as sub-clause (p). Related Link: OTHER UPDATES Buying Jewellery over Rs 2 lakh cash to attract 1 percent TCS from April 1.Cash purchase of jewellery will attract 1 percent TCS from April 1 if the amount exceeds Rs.2 lakh.,as against the current threshold of Rs 5 Lakh.

6 Cash purchases of jewellery will attract 1 per cent TCS (tax collected at source) from April 1 if the amount exceeds Rs 2 lakh, as against the current threshold of Rs 5 lakh. Once the Finance Bill 2017 is passed, jewellery will be treated on par with general goods which attract 1 per cent TCS on cash purchase of above Rs 2 lakh. The Bill seeks to do away with the threshold of Rs 5 lakh on jewellery purchases for applicability of TCS because the Union Budget has proposed to ban cash dealings of over Rs 3 lakh and make violations punishable with a penalty of an equivalent amount to be paid by person receiving the cash. However, as there is no special provision for TCS on its purchase, jewellery is now being clubbed in general 'goods' on which 1 per cent TCS is triggered if a single transaction exceeds Rs 2 lakh in cash. In a bid to check generation of black money through large transactions, after the Budget proposal to scrap the previous threshold of Rs 5 lakh is approved by Parliament "The Income-tax Act provides for 1 per cent TCS on cash purchase of goods or services above Rs 2 lakh. The definition of goods also includes jewellery and hence 1 per cent TCS would be applicable on jewellery purchased above Rs 2 lakh in cash," an official told PTI. With this move, the TCS threshold for jewellery will be brought at par with that of bullion from April 1. The Income Tax Department has been levying 1 per cent TCS on cash purchase of bullion in excess of Rs 2 lakh and jewellery in excess of Rs 5 lakh since July 1, However, the Budget for had imposed TCS of 1 per cent on goods and services purchased in cash over Rs 2 lakh. The Finance Bill 2017 states that current provisions provide for "tax collection at source at the rate of one per cent of sale consideration on cash sale of jewellery exceeding Rs five lakh. It is proposed to omit the said clause in view of restriction on cash transactions as proposed to be provided". Presently, Section 206C sub section (1D) of Income Tax Act, 1961 provides for a seller collecting from the buyer 1 per cent of sale consideration as income tax if the amount paid for bullion

7 exceeds Rs 2 lakh in cash and for jewellery if it exceeds Rs 5 lakh in cash. The same section also provides for 1 per cent TCS on cash paid in excess of Rs 2 lakh for any goods other then bullion and jewellery. With the amendment proposed in the Finance Bill 2017, jewellery purchase of over Rs 5 lakh in cash is being omitted from the ambit of TCS but will now be classified as "other goods" and the 1 per cent levy be provided if cash consideration is over Rs 2 lakh. EPFO to launch housing scheme for over 4 Crore members in March. Retirement fund body EPFO will launch a housing scheme next month for its over four crore members to enable them to make down payment and pay EMIs from their EPF accounts to buy homes, said PTI report today. The Employees Provident Fund Organisation (EPFO) has firmed up a housing scheme for it subscribers. The scheme is likely to be launched anytime after March 8, when voting in 5 pollbound states would be over, a source told PTI. Under the scheme, the EPFO will act as a facilitator for its subscribers to buy homes for themselves during their service period, he added. The subscribers as well as their employers would be required to form a group housing society which would further tie up with banks and builders or sellers of homes so that EPFO members can buy homes, he said. Under the scheme it is envisaged that there should be 20 members at least in the group housing society to avail the facility. Setback for GST : Permit Raj ends, Long LiveE-Permits. On states insistence, those transporting goods within or outside states will have to queue up at border for checking of e-permits. CBDT to make separate wing to probe benami, black money The tax department issued warning against those who undertake benami transactions as this would invite Rigorous Imprisonment (RI) of up to seven years under the normal I-T Act. The tax department said the government will soon operationalize a Strong Team to effectively deal with benami properties as well undisclosed foreign income and assets. The Central Board of

8 Direct Taxation (CBDT) is planning to form a special unit, which will dedicatedly investigate and act against benamidars and black money holders having undisclosed foreign income and assets. There is a serious need of a separate unit, which will only probe and prosecute against benamidars and those black money holders who have undisclosed foreign assets like investigation and assessment unit of the income tax. This unit may be headed by Director General-level officer, a senior Income Tax officer told ANI. New trademark rules to cut application forms to eight from 74 New trademark rules with simplified processes, fewer forms and online filing will come into effect next week, substantially improving the ease of doing business on this front. The amended rules, which the Department of Industrial Policy and Promotion is expected to notify on March 6, will cut the number of trademark application forms to eight from 74 and scrap several redundant and obsolete provisions. To encourage online filing of applications, a 10% fee concession will be offered. For individuals, startups and small enterprises, the government will provide discounted application fees and expedited processing. The DIPP will now maintain a list of well-known trademarks. Data from the commerce & industry ministry show that trademarks filings in India increased by about 10% over the past two years. "This has been made possible due to a significant increase in our manpower and better use of the IT infrastructure Govt bids to set up cement plants near thermal power plants to utilize fly ash In order to ensure complete utilization of fly ash from thermal power plants, an expert panel of the Union environment ministry has decided to form a multi-disciplinary committee to examine the possibility of setting up cement plants along with such plants. The decision was taken at the environment ministry s Expert Appraisal Committee (EAC) for thermal power projects on 14 February. It came after the National Green Tribunal (NGT) in January 2017 directed the Union ministry of environment, forest and climate change (MoEFCC) to examine the feasibility of setting up captive cement plants near thermal power plants either by project proponents themselves or by joint venture for effective utilisation of fly ash generated from power plants.

9 The expert committee, during its meeting, noted that cement plants require nearly 70-80% of limestone for manufacturing clinker which is grinded for making cement. Only 20-30% of fly ash is being currently used in making Pozzolana Portland Cement (PPC). Though there are technologies available worldwide for using 80% of fly ash in cement manufacturing, it is not practised in India for various reasons, the committee said. EAC after deliberations, suggested that the information regarding availability of required natural resources around the thermal power plants and feasibility of setting up of captive cement plants may be obtained from the respective project proponents of the thermal power plants. A sub-committee may be formed with the representative ministry of mines, ministry of power, CEA (Central Electricity Authority), Department of Industrial Policy and Promotion (DIPP) and ministry of coal for examination, said the minutes of the EAC s meeting, which were reviewed by Mint. Based on the report from the sub-committee, a decision of feasibility of setting up of cement plant may be arrived, the committee noted. Every year, millions of tonnes of fly ash is generated across India and this prompted the MoEFCC in 1999, 2003, 2009 and in 2016 to issue directions for its proper use and disposal, mandating it for use in building material and in construction activities like road building. As per various studies, only about 50-60% of the total fly ash generated by the power sector is being utilised. In 2015, about 180 million tonnes of fly ash was produced across India and by 2025, it is estimated to reach 300 million tonnes a year. With that, utilization of all the fly ash being generated is going to become tougher. The unutilized fly ash is dumped into poorly designed and maintained ash ponds and it is estimated that about a billion tonne of this toxic ash lies dumped in these ponds, polluting land, air and water. EPFO introduces composite form for death cases also EPFO has introduced a composite claim form for their members in the case of death in order to reduce paperwork for dependants of the deceased. The new document replaces existing forms 20, 5-IF and 10-D. the central provident fund commissioner hereby prescribes composite claim form in death cases by replacing existing forms no. 20, 5-IF and 10-D. In the case of death of a member, the claimant may apply for claim of provident fund, insurance fund and monthly pension in this single form, an EPFO order stated. On the purpose of the initiative, the order said, The Employees Provident Fund Organisation (EPFO) has embarked on its next phase of e- governance reforms with a view to making its services available to all its stakeholders in a more efficient and transparent manner.

10 Earlier last month, the EPFO had introduced composite claim forms (Aadhaar and non-aadhaar) by replacing the erstwhile forms 19, 1OC and 31 to simplify the submission of claims by subscribers. Besides, the EPFO last month did away with the practice of filing utlisation certificates for advances taken from PF accounts and allowed users to submit self-utlisation certificates. Accordingly, the EPFO issued a circular dated February 28, 2017 directing that obtaining of Aadhaar should be mandatory for the time being only for final settlement of Pension (10D claims) and not in withdrawl cases (Form 10C), it said. However, certain reports appearing in few dailies suggest that Aadhaar is not required in settlement of pension claims, the statement said. Explaining about the reason for giving this breather to the members, the official said, The requirement of submitting Aadhaar number under Form 10C claims led to issues in settlement of withdrawal cases. Thus, it is decided that obtaining Aadhaar should be mandatory for the time being only for pension (fixation under 10D Form) and not in withdrawal cases (under Form 10C). Thanking You, Team Indiacorp , , indiacorp@live.com, csaloknoida@gmail.com Disclaimer: This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither India Corp Law nor any other member of the India Corp Law organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.