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Showing posts from February, 2014

Companies (Corporate Social Responsibility Policy) Rules 2014 and amended Schedule VII under Companies Act 2013

Next after the notification of 98 sections of the Companies Act, 2013 on September 9, 2013, The Ministry of Corporate Affairs (MCA) has, now vide Notification dated February 27, 2014, appointed April 1, 2014 as the date on which the provisions of Section 135 and Schedule VII of the Companies Act, 2013 will come into force. The Ministry has also notified the Companies (Corporate Social Responsibility Policy) Rules 2014. Further, in exercise of power conferred by Section 467 (1) of the Companies Act, 2013, the Central Government has altered Schedule VII of the Companies Act, 2013 which specifies the activities to be undertaken by the Company for undertaking Corporate Social Responsibility (CSR) activities. This article intends to inform the reader of the major highlights of the notified Companies (Corporate Social Responsibility Policy) Rules 2014 (the “Rules”) and amended Schedule VII of the Companies Act, 2013.

Following are the major highlights of the notified Companies (Corporate Soc…

One Person Company- a mixed bag under the Companies Act, 2013

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The Companies Act, 2013 defines ‘One Person Company’ or OPC as a company formed for any lawful purpose with only one person as its member. One person company is a private company with one person subscribing to the Memorandum and complying with the requirements of the legislation in respect of registration. The Act provides that the words ‘One Person Company’ shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.

Corporate Governance Norms by SEBI in line with Companies Act, 2013

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In a step towards making listed companies more transparent, Capital Markets Regulator, SEBI has approved certain amendments in Cl 49 of Listing Agreement. These amendments propose to align the provisions of the Clause with that of Companies Act, 2013 (hereinafter called as “the Act”) and also provides additional requirements to intensify the corporate governance framework for listed companies in India. This is a step forward to increment harmonisation in SEBI & MCA laws.

Ms. Anjali Aggrawal
Vice President
+919971673336
anjali@indiacp.com Given below is the gist of proposals approved by the Board in its meeting held on 13th February 2014:
In line with Section 149 (6) of the Act, now the Nominee Directors have been excluded from the definition of Independent Directors.In line with the provisions of vigil mechanism as specified in section 177 (9) of the Act, SEBI has mandated whistle blower mechanism in every listed company. Under the extant Cl 49, its a non mandatory requirement.

Welcome Employees on the Ownership podium by extending benefits via ESOPs

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Think and re-look that why we strive to encourage Employees to act like owners when we can just bring them to the Ownership podium.
Since Appraisal Time is approaching,opting for the right strategy to reward the real jewels i.e. Employees for their association and performance is the crucial decision for every organization as it will serve the dual objectives of creating long term value for the Organization as well as for the Employees. 
Ms. Mohini Varshney
Assistant Vice President
+919971673332
mohini@indiacp.com Issuance of Stock Options not only persuades Employees to continue their association with the present organization but also helps in building unity and team spirit amongst the employees. 

Work Hours and Overtime under the Factory Act, 1948 and Shops & Establishment Act

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India has two major laws concerning working hours of workers i.e. the Factory Act, 1948 and Shops & Establishment Act. The regulations related to the working hours can be separated into four broad categories that help demarcate the dimensions of the discussion. Working Hours for Factory Workers; I. Employment of Adults: Mr. Pankaj Singla
Sr. Associate
+919971508320
pankaj@indiacp.com An adult worker shall not be employed for more than 48 (forty eight) hours in a week and not more than 9 (nine) hours in a day. A compulsory rest of at least half an hour (30 minutes) between each period of work and such period of work shall not exceed five hours. Total period of work inclusive of rest interval cannot be more than 10.5 hours. The Chief Inspector may by giving a reason in writing increase the workday time up to twelve hours. According to Minimum Wages Act, 1948 the working day of a worker shall be so arranged that inclusive of the interval of rest it shall not exceed 12 hours on any day. Th…

Fast Track Merger - Good Days Ahead

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It has been rightly said that “You can't change the fruit without changing the root”, the Companies Act, 2013 proposes a new concept of merger i.e. Fast Track merger for merger between two or more small companies and merger between holding and its wholly owned subsidiary companies and such other class of companies as may be prescribed. Fast track merger would have simplified procedure and would be less time consuming in comparison to normal course of merger. This is a welcome move.

Mr. Chander Sawhney
Vice President
+9810557353
chander@indiacp.com The Companies Act, 1956 does not offer a simple process for such mergers and all schemes of arrangement have to follow a cumbersome and time consuming process irrespective of the size and structure of companies or purpose of the arrangement. The existing process involves seeking approval from shareholders, creditors, Registrar of Companies, Regional Director, Official Liquidator as well as Court which takes around Five-Six months. In case w…

Leaves & Holidays under Indian Labour & Employment Laws

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Holidays and Leaves of workers in India are governed principally by the Factory Act, 1948 and state shops and establishment acts. Weekend Holidays Mr. Pankaj Singla
Sr. Associate
+919971508320
pankaj@indiacp.com In India, the law prescribes maximum number of hours a week a worker may not be employed beyond. An adult worker shall not be employed for more than 48 (forty eight) hours in a week and not more than 9 (nine) hours in a day. Weekly holiday is compulsory as per the Factories Act. First day of the week i.e. Sunday shall be a weekly holiday. The employer has to make sure that no worker works more than 10 days without a rest day of 24 hours. Therefore, if the worker is asked to work on weekly

Recent Securities Law Updates

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A. SEBI allows filing of Shelf Prospectus even for Issuance and Listing of Debt Securities
With a view to foster fund raising options and at the same time enabling frequent issuers of Debt Securities to raise money without having to file separate prospectus for regulatory clearance for every issuance, the Market Regulator, SEBI, in line with the powers extended by Section 31 of the Companies Act, 2013, amended SEBI (Issue and Listing of Debt Securities) Regulations, 2008 thereby allowing specific categories of entities to file shelf prospectus for public issuance of debt securities. The Shelf Prospectus shall be needed to be filed with SEBI, Recognised Stock Exchanges as well as ROC. Ms. Anjali Aggrawal
Vice President
+919971673336
anjali@indiacp.com The main highlights of the amendments are outlined as follows: 1. For public issuance of debt securities, following entities may file shelf prospectus:

Valuation: An Important Aspect in Stock Option Plans

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In any Stock Option Plan, the Valuation aspect plays a very crucial role. The value of stock options is needed upon grant, during interim periods and at the final payment date to facilitate the calculation of the benefit extended to the Employees.
Ms. Mohini Varshney
Assistant Vice President
+919971673332
mohini@indiacp.com For ESOPs, there are basically 2 types of Valuations:

(1) Accounting Valuation: This Valuation is required to amortize the Employee Compensation Cost during the vesting period. Accordingly, the compensation value is computed initially i.e. at the time of Grant and at the end of each reporting period till the liability in respect of Options granted gets settled.