Demonetisation

Inconvenience everywhere

December 2016 faced several disasters including continuous demonetisation practices that shook the economy of our country and vardha cyclone that caused disaster to the south-eastern coast. 2016 is ending with a complete downfall in India giving a hope for a bright future for a corruption free land that we are dreaming for.

You might have seen, read and heard many talks, discussions, rumours, and what not regarding Demonetisation. We are not going to speak anything about what Demonetisation is, what are the struggles and what may happen in future. We are going to discuss only what the cashless digital economy is having for us and the opportunities available for professionals in it.

Saranya Deivasigamani,
CEO

Things to know

Following the midnight scrapping of 500 and 1000 currency notes, Government of India encourages the Indian citizens to move towards a Cashless Economy. Already, Demonetisation has left the citizens and most Industries in a lurch bringing a crunch and dip due to the lower liquidity of cash. This is the time we have to forget about the inconvenience and think about the opportunities that this scheme brings us.

Opportunities

Following are the few opportunities that we think the cashless digital economy will bring to the world of Chartered Accountants (CAs), Company Secretaries (CSs) and Cost and Management Accountants (CMAs).

Bookkeeping

When the monetary cash in papers is reduced, the business transactions will rely mostly on:

Swiping or Debit & Credit cards,
Electronic payment gateway systems such as:
- Immediate Payment Service (IMPS),
- National Electronic Funds Transfer (NEFT)
- Real Time Gross Settlement (RTGS).
Payment through e-Wallets
- Paytm, Freecharge, Ola Money, etc.,
- Bill Desk Payment and other online payment methods.
- Mobile Payment – like Airtel Money, Jio Money, Vodafone mPesa, etc.,
Online Payment method
- PayPal
- PayUbiz
- CCavenue
- Citrus Pay

These features reduce paper invoices and promote more of electronic invoicing, vouching, bills and receipt maintenance. This, in turn, tweaks the need of talented accountants. Cashless India will obviously require computer savvy bookkeepers who shall maintain all the electronic documents in place and enter the details in the books of accounts that can be maintained online or offline.

Internal Audit / Due Diligence

Digital economy will reduce the paper work in the industries that will help us get away from a huge bunch of papers to crosscheck with the electronic filings while doing due diligence. The Bank Statement, Statement of e-Wallets, Online Payment portals etc, generates electronic downloadable statements in Microsoft Excel or CSV or PDF alternatives that can be simplified easily with the formulae and electronic tallying method to simplify the internal audit and due diligence process.

Demonetisation will possibly bring in more pressure on bankers’ due diligence and increase the internal audits and general audits in the Banks.

Advisory in Systems and Procedures

Demonetisation, combined with goods and services tax (GST), will impact the Small and medium-sized enterprises (SMEs) business model negatively, which was earlier dependent on tax and labour arbitrage. Many sectors will see a change in their existing business practice and procedures and may require expert advice in restructuring their policies and procedures as suitable to the cashless digital economy.

The framing of policies, disclaimers, terms and conditions, non-disclosure agreements are likely to be framed by the business enterprise who decides to enter into digital marketing and selling activities following the cashless digital economy movement.

Compliances

Demonetisation and Cashless Economy System will also reduce tax avoidance. Whatever money will be deposited or exchanged, authorities will keep a track of it and they will be extra cautious in this period. Dealing with this period in sectors like jewellery and real estate will be on the radar and those entering into Loan transactions may also undergo tax scrutiny. Search and Seizure activities of the IT Department will also rise to curb such malpractices. Limits have already been prescribed for reporting to the IT Department those bank accounts in which excess cash deposits are being made in this 50-day window ( . 2.5 lakhs in case of individuals and . 12.5 lakhs in case of firms). Importantly, in the longer run, tax and interest rates on loans are expected to come down as higher income tax collections arising from better compliance would offer scope to reduce rates over the long term. This, in turn, will drive up all tax avoiders to become tax payers. This will enable the new taxpayers to search for professional help.

Advice to New Entrants

The budding entrepreneurs and people thinking of starting a new business will obviously have a setback or requesting for better business ideas that would suit the current scenario. It is always better to know about the sectoral impacts on demonetisation.

Sectoral Impacts on Demonetisation

E-commerce sector avoiding CoD options or making alternative arrangements for CoD options will have a raise through the electronic mode of selling goods.
Businesses in the fin-tech sector including payment banks, mobile wallets, electronic transfer providers etc., are expected to see gains.
Areas of sub-sectoral impact in luxury cars, SUVs, gems, jewellery, gold and high-end branded products.
Luxury goods markets are likely to get affected.
Real estate sector is likely to see a significant negative impact on medium to long-term, particularly in repurchase market.
Technology and financial services are expected to gain in the medium to long term.
Commodities and agricultural sector, including the market for consumer durables and non-durables will largely affect.
The retail sector will have an adverse impact. They should have both options of electronic purchases along with the traditional brick and mortar outlets.
Exporters dealing with lesser monetary transactions are likely to see gains through currency inwards directly into the bank accounts.

It is most likely that the professionals like CA, CS, and CWAs are set to gain from Demonetisation. With their clients becoming tax complied, and seeking for various other suggestions and professional help will certainly increase. Now, it will witness debates more on point of law which will actually test the real knowledge of professionals. Demonetisation will help the professionals go hand in hand with the government to a very large extent.

Legal Term

Garnishment

A legal procedure by which a creditor can collect what a debtor owes by reaching the debtor’s property when it is in the hands of someone other than the debtor.

MCA Updates

Form INC-27 has been recently revised.
The Companies (Transfer of Pending Proceedings) Rules, 2016 shall come into force with effect from the 15th December, 2016, except rule 4, which shall come into force from 1st April, 2017.

SEBI Updates

Streamlining the Process for Acquisition of Shares pursuant to Tender Offer made for Takeover, Buy Back and Delisting of Securities
Spread margin benefit
Review of guidelines for Co-location / proximity hosting facility offered by stock exchanges
Continuous disclosures and compliances by InvITs
Guidelines for functioning of Stock Exchanges and Clearing Corporations in International Financial Services Centre (IFSC)
Investment trading in securities by employees of AMC(s) and Trustees of Mutual Funds
Review of requirement for copy of PAN Card to open accounts of FPIs.

RBI Updates

Amendment to Master Direction to KYC.
Section 42(1A) Withdrawal of the Incremental CRR.

Income Tax Updates

Directions under section 119 of the Income-tax Act, 1961
Procedure for the purposes of furnishing and verification of Form 27BA for removing of default of Short Collection and / or Non Collection of Tax at Source !New
Procedure for the purposes of furnishing and verification of Form 26A for removing of default of Short Deduction and/or Non Deduction of Tax at Source
Transport, Power and Interest subsidies received by an Industrial Undertaking- Eligibility for deduction under sections 80-IB, 80-IC etc., of the Income-tax Act, 1961.

Simplified Proforma for Incorporating Company Electronically (SPICE)

Revelutionary November

Before RBI and our Hon’ble Prime Minister gave a discomfort of reforming the currency note fluctuations, the Ministry of Corporate Affairs gave us a little comfort in the procedure of incorporation by introducing SPICe method of incorporation. The pressure on conversion of old currency into the new currency and the restrictions on it might have made the whole India have busy November and make few important facts (like SPICe) unnoticeable. In this edition, we are going to discuss the new alternative in place of INC-29. Yes, the new paperless and speedy way of incorporation of a company through SPICe forms are detailed along with our usual Legal Term and updates from MCA, SEBI, RBI and IT Departments.

Saranya Deivasigamani,
CEO

SPICe

The Ministry of Corporate Affairs has taken another bold initiative in Government Process Re-engineering (GPR) and launched Simplified Proforma for Incorporating Company Electronically (SPICe) e-Form, on the occasion of Gandhi Jayanthi (October, 2nd 2016), with the specific objective of providing speedy incorporation related services within stipulated time frames which are in line with international best practices. An appreciable step is taken by Ministry of Corporate Affairs by introducing E-Form INC-32 under SPICe scheme notifying Companies (Incorporation) Fourth Amendment Rules, 2016. Existing INC-29 and INC-7 will be phased out, and SPICe will be the Sole, Simplified & Versatile form available for incorporation of a company in India. With the SPICe initiative and the introduction of INC-32, the approval time is much shorter. This is because the new system facilitates the filing of Memorandum and Article of Association electronically. Purpose of the e-Form Now w.e.f. 02.10.2016 MCA has introduced new e-form INC-32. This form is one step ahead of Form INC-29. This form is available on MCA w.e.f. 03.10.2016.

Incorporation of Seciton-8 Company and Producer Company permitted through this form.
Minimum authorized and subscribed share capital required for an OPC is Rupee one or a private company having share capital is Rupees two and in the case of a public company Rupees seven.
Total numbers of first subscribers are restricted to seven considering possibility of affixing maximum DSCs in form SPICe MOA (INC-33) and form SPICe AOA (INC-34).

Key Features

The integrated e-Form INC-32 is available with effect from 03.10.2016 for One Person Company, Private Company, Public Company, Section 8 Company and Producer Company.

INC-32 can be filed even if the name of the company through INC-1 have already been applied. This is a major difference between INC-29 and the new E-form.
As stated earlier, the major breakthrough is the fact that SPICe provides e-filing of MOA and AOA through forms INC-33 and INC-34. The MOA can be copy pasted from your file, and the AOA can be pre-drafted against the clauses given in the form INC-34. The whole process has been completely simplified.
Since MOA and AOA are to be filed digitally, the signatures of directors (digital signatures) can be affixed with INC-33 and INC-34.

First Major Change in INC-32

The e-Form INC-29 does away with the need for reserving a name for the company prior to applying for its incorporation. But there was a restriction in INC-29 i.e. if Company filed INC-1 for the the proposal of the name then it was not possible for the Company to file INC-29. Because INC-29 was not providing the way to file if the company already has got name approval by INC-1. But in INC-32 this feature has been changed. At point No. 5(a)(i) of INC-32 there is an option “Whether Name is already approved by Registrar of Companies” Company has to select Yes or No in this Option. In the case of Yes (Means Company has got name approval in INC-1) then mention the SRN of such INC-1. But in the case, the name is not approved by INC-1 then mention the name and significance as they were applying in INC-29.

Second Major Change in INC-32

MCA for the first time prescribed to file MOA & AOA in e-Form INC-33 and INC-34 in the electronic mode to be digitally signed and filed in link with e-Form INC-32.

E-Memorandum Of Association:
- Information Required to be Mentioned In Form INC-33:
  - The type of Companies have been divided into tables A (limited by shares), B (limited by guarantee without share capital),C (limited by guarantee with share capital), D (unlimited company without share capital), and E (unlimited company with share capital), Choosing the respective types, the respective columns will appear for filling.
  - SRN of INC-1, if filed. (This should be same as mentioned in the linked form INC-32)
  - Then Name and State will be prefilled from data given in INC-1.
  - Respective columns are provided for the object clause.
  - Mention the required information (furtherance of object, Share Capital, subscriber details, liability clause) in the form
  - If INC-1 not filed then fill the following information
    - Mention the Name of Company
    - State of Incorporation
    - Objects of Company
    - Furtherance of Object
    - Fill the subscriber sheet
    - Detail of Capital of the Company
  - Instead of Signature of Subscriber (handwritten subscription sheet) affix the DSC of subscribers.
  - By affixation of DSC of the subscriber on the INC-33 (e-MOA) date of signing will be filling automatically by the form.
  - Instead of Signature of witness affix the DSC of subscribers.
- Drawback INC-32
  - Maximum details of subscribers allowed through form SPICe (INC-32) is SEVEN. In the case of more subscribers, follow the normal incorporation procedure.
  - Maximum three Directors are allowed for using this integrated form for filing an application for allotment of DIN while incorporating a Company.
E-Article Of Association:
- Information Required to be Mention In Form INC-34:
  - The type of Companies has been divided into tables F, G, H, I and J (as against the types specified for A, B, C, D and E in MOA respectively). On the basis of selection, relevant ‘Articles’ clauses will appear Pursuant to Schedule I to the Companies Act, 2013).
  - There are 2 options for each clause; 1st check box is for ‘Not applicable’ against the respective article. And the 2nd check box is to entrench the article. Clicking on the 2nd check box the form will allow modifying the text of the clause.
  - Director name(s) should be entered mandatorily under “Board of directors”.
  - Articles in addition to the standard table shall be mentioned in last blank box ‘Others
  - Mention SRN of INC-1, if filed. If not filed then mention the proposed name.
  - Instead of Signature of Subscriber (handwritten subscription sheet) affix the DSC of subscribers.
  - By affixation of DSC of the subscriber on the INC-34 (e-AOA) date of signing will be filling automatically by the form.
  - Instead of Signature of witness affix the DSC of subscribers.
- Mandatory Attachments:
  - Affidavit and declaration by the first subscriber(s) and director(s);
  - Proof of Office address (Conveyance/ Lease deed/ Rent Agreement etc. along with rent receipts);
  - Copy of the utility bills (not older than two months).

Note:

The provisions of sub-rule (2) to sub- rule (13) of rule 36 of Company Incorporation Rules shall apply mutatis mutandis for incorporation of Company.
The e-Form will not be auto approved Straight Through Process (STP).
Companies have the option to go by route of e-form INC-32 or earlier route INC-1, INC-7, DIR-12 and INC-22.
Director has to give declaration at the end of the form that he has checked the name on MCA website and Trade Mark Website.
DSC of Director will be affixed on the form. {In case of director don’t have DIN then PAN No. of director to be mentioned at the place of affixing of DSC)
DSC of professional will also be affixed on the form.
List of main divisions of industrial activities is given as Annexure A in the instruction Kit of INC-32.
Only one name can be applied for approval in this e-form. Therefore, the applicant has to duly check the proposed name and follow name availability guidelines, existing trade marks to avoid rejection.
Only Three re-submissions are allowed.

Thus, through SPICe, the Ministry of corporate affairs has made a considerable effort to reduce the hassles and time frame taken for incorporation as well as the paperwork involved.

Legal Term

Transmogrify

Transform in a surprising or magical manner.

MCA Updates

Fees for allotment and surrender of DIN have been revised.
IEPF rules, 2016 has been approved by the Ministry.

SEBI Updates

Clarification on aspects related to day count convention for debt securities issued under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008.
Disclosure of financial information in offer document/placement memorandum for InvITs
Enhanced Standards for Credit Rating Agencies (CRAs)

RBI Updates

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes – Revision in limits.
External Commercial Borrowings (ECB) – Clarifications on hedging.
Issue of Rupee Denominated Bonds overseas

Income Tax Updates

Deduction on enhanced profits.
Revision in depreciation on assets.
DTAA with Japan is been amended.
Prohibition on Binami Property Transaction Rules,2016 has been amended.
Special Provisions Relating to Tax on Distributed income of Domestic Company for Buy-Back of Shares shall come into force from 1st June 2016.

GST Bill

Festival is here…

Festival unlimited with poojas and celebrations and this year, the month of October became a month of the festival for India. While the whole of the nation celebrates the festival of lights, we professionals would be busy in filing the Annual Filings to the ROC. Need any help, you shall always remember Zappy for ROC related activities.

This month, we thought why don’t we dig into GST which is a new concept which the GST council is trying to bring awareness to the public. Our beloved ICSI also conducted several webinars and videos available at http://www.icsi.edu/GST_events.aspx for GST awareness among professionals. So this is a piece of an initiative by Zappy’s team to help you know a little about this ocean and its impact on CA and CS professional along with our usual Legal Term and updates from MCA, SEBI, RBI and IT Departments.

Saranya Deivasigamani,
CEO

GST

The legislation amending the Constitution to enable Goods and Services Tax (GST) has become a law with President Pranab Mukherjee giving his assent to the bill ratified by more than 50 percent state assemblies. This is a significant milestone achieved in the implementation of GST that sets the stage for GST Council, which will work out the details of the tax, including the rate at which it will be levied. The Constitution (122nd Amendment) (GST) Bill allows for the introduction of GST that will replace multiple indirect taxes levied by centre and states, creating one national market that is expected to bump up GDP by as high as 2 percent. The government is looking to implement the new tax regime from April 1, 2017. Once the central GST law is finalised, the government would introduce it in the winter session while states would take state GST law to their assembly.

The Goods and Service Tax (GST) will be a comprehensive nationwide indirect tax on the manufacture, sale and consumption of goods and services throughout India. The aim is to have one indirect tax for the whole nation, which will make India a unified common market. GST will be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method and would make not just manufacturing but also the interstate transportation of goods more efficient.

The GST will have two components keeping in mind the federal structure of India: the Central GST (CGST) and the State GST (SGST). Currently, we have Value-Added Tax (VAT) systems both at the central and state levels. But the central VAT or CENVAT mechanism extends tax set-offs only against central excise duty and service tax paid up to the level of production. CENVAT does not extend to value addition by the distributive trade below the stage of manufacturing; even manufacturers cannot claim set-off against other central taxes such as additional excise duty and surcharge. Likewise, state VATs cover only sales. Sellers can claim the credit only against VAT paid on previous purchases. The VAT also does not subsume a host of other taxes imposed by the states such as luxury and entertainment tax, octroi, etc. Once GST comes into effect, all central- and state-level taxes and levies on all goods and services will be subsumed within an integrated tax having two components: a central GST and a state GST. The GST will subsume central taxes such as excise duty and service tax and state taxes including VAT, octroi, entry tax. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.The Regulations were made effective from December 01, 2015. But Regulations relating to (i) passing of ordinary resolution instead of special resolution in case of all material related party transactions subject to related parties abstaining from voting on such resolutions, in line with the provisions of the Companies Act, 2013, and (ii) re-classification of promoters as public shareholders under various circumstances, shall be effective from September 02, 2015 itself.

Central taxes that the GST will replace

Central Excise Duty
Duties of Excise (medicinal and toilet preparations)
Additional Duties of Excise (goods of special importance)
Additional Duties of Excise (textiles and textile products)
Additional Duties of Customs (commonly known as CVD)
Special Additional Duty of Customs (SAD)
Service Tax
Countervailing Duty
Cesses and surcharges in so far as they relate to the supply of goods or services.

State taxes that the GST will subsume

State VAT
Central Sales Tax
Purchase Tax
Luxury Tax
Entry Tax (all forms)
Entertainment Tax (not levied by local bodies)
Taxes on advertisements
Taxes on lotteries, betting and gambling
State cesses and surcharges

The introduction of GST would be a significant step in the reform of indirect taxation in India. Amalgamating several central and state taxes on a single tax will mitigate cascading or double taxation, facilitating a common national market. This would be hugely beneficial for consumers as the tax burden on inter-state logistics will be cheaper. A common tax would mean easy compliance and uniformity of tax rates and structures for industry and would thus contribute to ease of doing business by removing cascading costs. For central and state governments, GST is expected to lead to easier administration and enforcement. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods. The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage. Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No cross utilisation of credit would be permitted.

Probable Rate Structure in GST

Rates	Commodity/Services
0%	Basic Education, Healthcare, Agriculture related, Public Transport etc. Goods and services of National Importance viz. Defence etc.
1%- 2%	Gold & Silver Ornaments, Precious & Semi Precious Stones
18%	Normal Tax on all Goods & Services

Exclusions in GST

Following products are excluded from GST –

Petroleum Products
Alcoholic Beverages
Diesel
Tobacco

Advantages of GST Bill

Introduction of GST will bring following benefits –

Multiple Taxation is removed.
Goods and Services are taxed at same rate.
Taxes on the Manufacturers are reduced.
It helps in the seamless flow of credit in the country.

Disadvantages of GST Bill

The tax on services would go from 14 to 20% after the implementation of GST.
The Tax on retails will almost get doubled.
The tax on imported Goods will be around 6%.
There will be a control on every system by the Central and State Governments.

In a single line, we can say that GST will simplify administration, improve compliance and remove distortions in production, trade and consumption.

Legal Term

Surrebuttal

Surrebuttal is a response to the opposing party’s rebuttal; in essence, it is a rebuttal to a rebuttal.

Rebuttal

Rebuttal is a form of evidence that is presented to contradict or nullify other evidence that has been presented by an adverse party. By analogy, the same term is used in politics and public affairs to refer to the informal process by which statements, designed to refute or negate specific arguments put forward by opponents, are deployed in the media.

MCA Updates

e-Form INC-29 (Integrated Incorporation Form) will be withdrawn w.e.f. 1st November, 2016. MCA has initiated Government Process Re-engineering (GPR) and launched Simplified proforma for Incorporating Company Electronically (SPICe) along with electronic MoA (SPICe MoA) and electronic AoA (SPICe AoA) e-Form, INC-2 (One Person Company), or INC-7 (Incorporation of Company) e-Forms, are available for incorporation.
Costing taxonomy 2012 for filing Forms I-XBRL and A-XBRL along with business rules is available on XBRL portal w.e.f. 08 Oct 2016.
C&I taxonomy, for filing Annual Financial Statements in AOC-4 XBRL is being amended to include mandatory CSR / CARO related details and others changes. The revised business rules along with the change sheet and Taxonomy (2016) are available on MCA portal w.e.f. 05, October, 2016. The updated C&I Taxonomy 2016 should be used for filing annual financial statements in respect of financial years commencing on or after 01.04.2014.
Filing Form 3 within 30 days of incorporation of LLP is mandatory.

SEBI Updates

RBI in its Fourth Bi-monthly Policy Statement for the year 2015-16, dated September 29, 2015 had announced a Medium Term Framework (MTF) for FPI limits in Government securities in consultation with the Government of India. Accordingly, SEBI had issued circulars CIR/IMD/FPIC/8/2015 dated October 06, 2015 and IMD/FPIC/CIR/P/2016/45 dated March 29, 2016 regarding the allocation and monitoring of FPI debt investment limits in Government securities.

RBI Updates

Import Data Processing and Monitoring System (IDPMS) has been developed in consultation with the Customs authorities and other stakeholders.

Income Tax Updates

Income-tax (23rd till 27thAmendment) Rules, 2016 were notified in this month on various sections.
Backward Area Notification for the State of Andhra Pradesh for the purpose of Tax incentives under Section 32AD and 32 of the Income-tax act,1961
Section 145 of the Income-tax Act, 1961 – Method of Accounting – Income Computation and Disclosure Standards (ICDS) Notified under section 145(2) – Rescission of Notification No. SO 892(E), Dated 31-3-2015

LODR

One Successful Year of ZappyNews!

We heartily thank you all for the moral support and enthusiasm that helped us cross 12 successful editions and one year of ZappyNews newsletter. We hope each of our editions has given you some updates on our industry and we promise to continue with our best efforts providing you all latest updates and information related to your business.

In this edition, we will see in detail about SEBI LODR along with our usual Legal Term and updates from MCA, SEBI, RBI and IT Departments.

Saranya Deivasigamani,
CEO

LODR

We all know that compliance with the listing agreement is a crucial factor that has to be made within specified time limits. To streamline such compliances and the provisions of existing listing agreements for different segments of capital markets such as equity shares (including convertibles), non-convertible debt securities, etc., Securities and Exchange Board of India (SEBI) on September 2, 2015 issued the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’).

The Regulations were made effective from December 01, 2015. But Regulations relating to (i) passing of ordinary resolution instead of special resolution in case of all material related party transactions subject to related parties abstaining from voting on such resolutions, in line with the provisions of the Companies Act, 2013, and (ii) re-classification of promoters as public shareholders under various circumstances, shall be effective from September 02, 2015 itself.

Applicability

The Listing Regulations are applicable to a listed entity who has listed any of the following designated securities on recognized stock exchange(s):

Specified securities i.e. equity shares and convertible securities listed on Main Board, or SME Exchange or Institutional Trading Platform;
Non-convertible Debt Securities, Non-convertible Redeemable Preference Shares, Perpetual Debt Instrument, Perpetual Non-cumulative Preference Shares;
Indian depository receipts;
Securitised Debt Instruments;
Units issued by mutual funds;
Other securities as may be specified by SEBI

All listed entities shall be required to execute a “Uniform Listing Agreement” with recognized Stock Exchanges within six months from effective date of the Listing Agreement i.e. September 02, 2015. The format of the said Listing Agreement has already been issued by SEBI.

General Obligations of Listing – Chapter II of Listing Regulations

The listed entity which has listed securities shall make disclosures and abide by its obligations under these regulations in accordance with the Principles enunciated in the Listing Regulations.
The principles of Listed Entities whose specified securities are listed on recognized stock exchange(s) are similar to those provided under Clause 49 of the Equity Listing Agreement which broadly categorized under following headings:
1. 1. The rights of shareholders
  2. Timely information:
  3. Equitable treatment:
  4. Role of stakeholders in corporate governance
  5. Disclosure and transparency
  6. Responsibilities of Board of Directors:

Common Obligations of Listed Entities – Chapter III of Listing Regulations

It is pertinent to note the compliances under this Chapter have to be adhered to by listed entities who have listed any or all of the designated securities (equity shares and/or convertible securities, non-convertible debt securities, non-convertible redeemable preference shares, perpetual debt instrument, perpetual non-cumulative preference shares, Indian depository receipts, securitised debt instruments, units issued by mutual funds and any other securities) as may be specified by the SEBI.

The listed entity shall ensure that KMP, directors, promoters or any other person is dealing with the listed entity, complies with responsibilities or obligations, if any, assigned to them under these regulations
Company Secretary of the Company who shall be “Compliance Officer” shall ensure compliances under these regulations.
“Compliance Certificate” to be provided to Stock Exchanges by Compliance Officer and Share Transfer Agent duly signed by both the compliance officer of the listed entity and the authorised representative of the share transfer agent.
The listed entity to have a Policy for Preservation of Documents duly approved by Board.
The listed entity shall file the reports, statements, documents, filings and any other information with the recognised stock exchange(s) on the electronic platform and proper infrastructure shall be put in place by listed entity.
Dividend/ Interest / Redemption or Repayment shall be paid in electronic mode and if not possible than by warrant ‘payable at par’ or cheque and if the amount exceeds INR. 1500 per warrant or cheque it has to be delivered through Speed Post only and Courier or ordinary post shall not be allowed.
The listed entity shall file with the recognised stock exchange(s) on a quarterly basis, within twenty one days from the end of each quarter, a statement giving the number of investor complaints pending at the beginning of the quarter, those received during the quarter, disposed of during the quarter and those remaining unresolved at the end of the quarter. The said statement shall be placed before the Board on Quarterly basis.

Obligations of listed entity which has listed its specified securities

The listed entities whose equity shares and convertible securities are listed on recognized Stock Exchanges shall comply under this Chapter:

The audit committee will have to also review adverse opinion on audit report and disclaimer of opinion on the audit report.
All existing material related party contracts or arrangements entered into prior to the date of notification of these regulations i.e. September 02, 2015 and which may continue beyond such date shall be placed for approval of the shareholders in the first General Meeting subsequent to notification of these regulations.
All related parties irrespective of the fact whether the party is related to a particular transaction or not will be abstained from voting on any material related party transaction.
Modification or reclassification of the status of the shareholders shall be allowed only on an application made by Company to stock exchanges and all relevant evidence and on being satisfied with the compliance of conditions mentioned in this regulation.
When a new promoter replaces the previous promoter subsequent to an open offer or in any other manner, re-classification may be permitted subject to the approval of shareholders in the general meeting and compliance of the conditions mentioned in Regulations.
The Financial Results shall be approved by the Board of Directors which was not specifically provided under Listing Agreement earlier.
The listed entity shall on the direction issued by the Board, carry out necessary steps, for rectification of modified opinion and/or submission of revised proforma financial results, in the manner specified in Schedule VIII of the Listing Regulations.
There is no mention to submit the explanation of the reasons for variations between the unaudited quarterly or year to date financial results and the results amended pursuant to limited review for the same period.
The financial results shall be submitted to the stock exchange within thirty minutes of the conclusion of the meeting of the Board in which they were approved.
The timeline to give prior intimation regarding the date of the Board meetings in which the financial results will be considered has been reduced to five days prior to the meeting.
Listed entity shall inter-alia give prior intimation for fund raising by way of the further public offer, rights issue, American Depository Receipts/Global Depository Receipts/Foreign Currency Convertible Bonds, qualified institutions placement, debt issue, preferential issue or any other method and for determination of issue price. Provided that intimation shall also be given in the case of any annual general meeting or extraordinary general meeting or postal ballot that is proposed to be held for obtaining shareholder approval for further fundraising indicating the type of issuance.
The redundant requirement of serving six copies of Annual Report has been done away with altogether but sending Annual Report is now required to be sent to Stock Exchanges within 21 days of the same getting approved by the shareholders in the Annual General Meeting which earlier was required to be sent as soon as they were sent to shareholders.
Disclosure pertaining to Loans and advances in the nature of loans where there is: (I) no repayment schedule or repayment beyond seven years or (II) no interest or interest below section 372A of Companies Act, 1956 by name and amount was required to be provided to Consolidated Financial Statements in Annual Report, the same has been done away with in the Listing Regulations.
The listed entity shall submit to the stock exchange(s) an “Annual Information Memorandum” in the manner specified by the Board from time to time.
Disclosure of commodity price risk or foreign exchange risk and commodity hedging activities is required to be provided in Annual Report.
Every listed entity shall make disclosures of any events or information which, in the opinion of the board of directors of the listed company, is material.
The listed entity shall frame a Board approved policy for determination of materiality, based on criteria specified in the regulation 30 of the Listing Regulations and disclose on its website.
The Board needs to authorize one or more KMP(s) for determining the materiality of a certain event, and the contact details of such personnel shall also be disclosed to the stock exchange(s) and as well as on the listed entity’s website.
The listed entity shall make disclosures updating material developments on a regular basis, till such time the event is resolved/closed, with relevant explanations.
The listed entity shall disclose all material events or information with respect to subsidiaries for the listed entity.
Change in the name of the listed entity shall be done only after receiving confirmation from Stock Exchange upon filing an application for the same.
The Company whose specified securities are listed i.e. equity and/or convertible securities shall maintain functional website and inter – alia the following information shall be disclosed which are additional requirements apart from one already required under exiting Listing Agreement:

SEBI through the Listing Regulations though seems to have made a sincere effort in consolidating the different Listing Agreements pertaining to various securities under Capital Markets and bringing them under one Umbrella Regulations and also getting a statutory recognition and enforceability through the Regulations, it would be interesting to wait and watch on how effective in true sense it would turn out for the Regulator and the respective Stakeholders to which it applies. But one thing is clear, stakeholders especially the professionals like Company Secretaries, particularly who would be responsible for ensuring the compliances under the Regulations.

Legal Term

Dictum

A statement, comment, or opinion. An abbreviated version of obiter dictum, “a remark by the way,” which is a collateral opinion stated by a judge in the decision of a case concerning legal matters that do not directly involve the facts or affect the outcome of the case, such as a legal principle that is introduced by way of illustration, argument, analogy, or suggestion.

MCA Updates

Notification published under Companies (Mediation and Conciliation) rules,2016 dt. 9 Sept., along with Form MDC 1 and MDC 2. These Rules contain definitions of relevant terms, process of formation of panel of mediators/ conciliators, requisite qualifications and experience of mediators and conciliators, disqualifications, application and appointment, scope of work, procedure for disposal of matters and duties of mediators/ conciliators, etc.

SEBI Updates

Notification published on Restrictions on Promoters and Whole-Time Directors of Compulsorily
Delisted Companies Pending Fulfillment of Exit Offers to the Shareholders.

RBI Updates

Master Direction- Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016 were made on September 2.
Master Direction – 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, 2016 were made on September 1.

Income Tax Updates

The Direct Tax Dispute Resolution Scheme Rules, 2016 (hereinafter referred to as ‘the Rules’) have been notified. It provides an opportunity to tax payers who are under litigation to come forward and settle the dispute in accordance with the provisions of the Scheme.