Dear Professional Colleagues,

For Private Circulation Only

Corporate SecretaryCorporate SecretaryCorporate SecretaryC

hair

man

’s P

age

Chapter Office : 6-3-609/5, Anand Nagar, Khairatabad, Hyderabad - 500 004. Ph.: 23399541, 23396494, Fax : 23325458

E-mail : hyderabad@icsi.edu, Website : www.icsi.edu, Working Days & Hours:Monday-Saturday 10.00 a.m. to 5.45 p.m.

Monthly Journal-Vol.: VIII Issue No. 1 Re. 1/- January, 2010

Hyderabad Chapter humbly mentions that its squirrel contribution to the success of this mega event and the role of the Chapter is being praised by each and everyone.

The convention was a real success in terms of the delegates, sponsorship, food, stay, logistics and the content that is to say the technical sessions.

With all the modesty I can say that this convention will be remembered as one of the best convention that has been held so far.

There were few internal changes that were required to be made to the Chapter Building in order to give facelift and fresh look and also to relocate the utilities in order to make effective use of the place. We are almost at the concluding stage. The Chapter will wear a fresh new look and feel that will accommodate students services as well as members services more efficiently, comfortably and elegantly.

You are all aware about the untimely death of our member Mr Brahmaiah. An appeal has been made and members reacted generously and contributions have poured in. We have lost the cause but the scenario brought two issues to the surface:

a) Collective will of the Members in diminishing misfortune caused to a fellow member

b) Importance of contribution to Company Secretaries Benevolent fund as Mr Brahmaiah, unfortunately, is not a member of the same.

The significant events and the progress that has been made by the Chapter in its three predominant spheres in this year are:

As far as the Student Services are concerned, the year was fruitful. Registrations had gone up this year. We were compelled to conduct, due to increase in number of students, TOP (Training Orientation Programme) in two batches. For the first time our Chapter has conducted a quiz programme in association with All India Radio (AIR).

D. New and Fresh Look to the Chapter Premises :

E. Reaction of members to the untimely death of Mr Brahamiah :

Progress in this year

Student

Wish you a happy new year and a happy Pongal

A. Foundation Work:

B. ICSI Research & Training Centre :

C National Convention :

This will be my final communication through this medium as the Chairman of this esteemed chapter. Looking back, I can, with all modesty, say that, these 12 months have given me utmost satisfaction in serving our community in this honorable post.

I would like to put forth some of the milestones that have been achieved by our chapter in its onward journey during this time.

In continuation with our tradition, we have celebrated the Foundation Week in the same spirit. Many events have been conducted. The prominent event among them is, for the first time, that we have arranged a Cricket Match between the members of ICSI and Employees of Ministry of Corporate Affairs, Andhra Pradesh. It was a huge success and officials from the Ministry have participated with lot of enthusiasm and it has been decided to conduct this event on annual basis. In continuation of the same, there may be a shuttle tournament with Ministry of Corporate Affairs in February, 2010.

26th Novemberm, 2009 is a golden day in the history of Hyderabad Chapter of Institute of Company Secretaries of India, as our beloved president laid the Foundation stone for the proposed state-of-the-art ICSI Research & Training Centre, at IP Uppal, adjacent to Genpact, Hyderabad. The proposal for acquisition of land for research centre has been made by Chapter and the same has been accepted by the Central Council.The Hyderabad Chapter and the Denizens are overwhelmed by this honor of locating the Research & Training Centre in Hyderabad. With this, Hyderabad chapter, we can confidently say that, has taken a quantum leap in its onward progress.

By hosting 37th National Convention, Twin Cities has proved it again and shown it again that it is a very good host. We rose to the occasion, lived up to the expectations and surpassed all the benchmarks that have been set so far. The

Members in Practice:

Members in Employment

Some of the unfinished Agenda:

A. Regional Director Office

We were blessed and fortunate that we could able to conduct so many programmes that will go long way in increase the basket of services that can be rendered by the Members in Practice. We have done our best to promote Due Diligence for consortium lending, Internal Audit of stock brokers etc. We have also furnished the list of members in practice to Ministry of Company Affairs, Andhra Pradesh to take up technical scrutiny of financial statements filed with MCA. We have also impressed upon the Official Liquidator of Andhra Pradesh to avail the services of our members in the process of liquidation of Companies.

We have strengthened up the process of placements. Though there is a long way to go, we have made every effort to make both the stakeholders, that is to say, the members and employers, to become a part of it. We were working on compilations to highlight the sector wise Members Organizational Deliverables, which is almost at the concluding stage.

The denizens of twin cities as well as Andhra Pradesh do deserve the following, when we look at the statistics, corporate activities and the number of Joint Stock Companies that are operating in the state.

We are yet to get much awaited Regional Director Office,

which was proposed to be set up in Hyderabad. All the members

shall endeavor to hasten this process in their own might as this

would immensely help Corporate sector of our state.

Keeping in view the same statistics, a Company Law Board

Bench is required to be set up in this part, which would also

greatly help the Corporate sector in the absence of any specific

time frame for setting up National Company Law Tribunal

bench.

The same statistics will also justify to set up an Intellectual

property authority or atelast an extension counter in the twin

cities. This would help members to showcase their knowledge

and also corporate sector in protecting effectively their

Intellectual Property Rights (IPR's) which are more essential for

Information Technology sector, Pharma sectors etc of our state.

Now the time has come for me to take leave. I thank all of you and

members of the Management Committee and the staff of the

Hyderabad Chapter for giving me a chance to serve our

community and also for your unconditional co-operation during

my tenure as the Chairman of the Hyderabad Chapter.

B. Company Law Board Bench

C. Intellectual Property Office

Corporate Secretary January, 2010

Congratulations !!The Chairman & Managing Committee of the ICSI-

H y d e r a b a d C h a p t e r h e a r t i l y c o n g r a t u l a t e s

and on their recent

election as Chairman and Treasurer, SIRC respectively for

the year, 2010.

CS P. Jagannatham CS P. S. Shastry

The Managing Committee of the ICSI- Hyderabad Chapter heartily congratulates the

following Members on their recent election as office bearers of the ICSI- Hyderabad Chapter

for the year 2010

CS Rajnish C Popat

CS Ajay Kishen

CS Shujat Bin Ali

CS Sudheendhra Putty

- Chairman

- Vice Chairman

- Secretary

- Treasurer

Sincerely yours

CS A. Visweswara Rao Chairman

4

Corporate Secretary January, 2010

The members of ICSI, by virtue of rigorous passing standards and post-qualification challenges, are already

equipped with the techniques of wading through plethora of legislations. To help the members, a humble attempt

is made to have a glimpses of some of important judgments, to present the “essential” points held by various

Courts of Law. It is sincerely recommended to read the full judgments to appreciate the finer points of law.

Your feedback is invited to enrich this column.

LEGAL SCAN(January, 2010)

CS S.V. Rama Krishna Advocate

Email: svramakrish@gmail.com

Transfer of Property Act, 1882 – Sec. 105

Constitution of India – Art. 14

Companies Act, 1956 – Sec. 441 r/w 529A, 530

and 530

In New Bus-Stand Shop Owners Association vs. Corporation of Kozhikode and another,

the Hon'ble Supreme Court of India held that in deciding the difference between lease and

licence, is to be determined by finding the real intention of the parties from a total reading of

the document, if any, between the parties and also considering the surrounding

circumstances. Use of terms 'lease', or 'licence', 'lessor' or 'licensor', 'rent' or 'licence fee' by

themselves are not decisive. The conduct and intention of the parties before and after the

creation of relationship is relevant to find out the intention.

Ref: (2009) 10 Supreme Court Cases 455

In Zenit Mataplast Private Ltd. vs. State of Maharashtra and others, the Hon'ble Supreme

Court of India held that every action of the State or its instrumentalities should not only be

fair, legitimate and above-board but should be without any affection or aversion. It should

neither be suggestive of discrimination nor even apparently give an impression of bias,

favouritism and nepotism. The decision should be made by the application of known

principles and rules and in general such decision should be predictable and the itizen

should know where he is, but if a decision is taken without any principle or without any

rule, it is unpredictable and such a decision is antithesis to the decision taken in accordance

with the 'rule of law'.

Ref: (2009) 10 Supreme Court Cases 388

In Indoco Remedies Ltd. vs. Official Liquiator of Kay Packaging (P.) Ltd., the Hon'ble High

Court of Gujarat held that once the winding up order is passed it relates back to the date of

commencement of the proceeding and if any amount realized by the secured creditor on

sale of the assets of the Company in liquidation, after presentation of the winding up

petition, it is always subject to the claim of the workers under section 529A of the

Companies Act, 1956.

Ref: [2009] 96 SCL 384 (GUJ.)

4

Corporate Secretary January, 2010

CS K. K. RaoPractising Company Secretary

kkrao2008@gmail.com

By S.Venkat Ramana ReddyCompany Secretary

Rain Commodities Limited

venkat.s@priyacement.com

SERVICE TAX UPDATES

HOW EFFECTIVE IS BOARD MEETING THROUGH VIDEO CONFERENCE ?

The Central government directs that the service tax

payable on the 'business auxiliary service' provided by

the service provider to the service receiver, during the

course of manufacture or processing of alcoholic

beverages by the service provider, for or on behalf of the

service receiver, which was not being levied in

accordance with the practice, shall not be required to be

paid in respect of such business auxiliary service

provided during the period commencing from 1st

September 2009 to 22nd September 2009 vide

Notification no.43/2009-Service Tax dated 2nd

December 2009.

Introduction

Validity of Board Meeting through Video Conference

under Existing Law

Proposal under Companies Bill, 2009

Board of Directors are elected by the shareholders to

manage the operations of the Company and they are the

highest decision making body in a Company. With the

setting up of Wholly Owned Subsidiaries / Joint Ventures

/ acquisition of Companies outside India, it has become

necessary for some of the Directors to stay out side India

to monitor the operations. In order to facilitate such

Directors to participate in Board Meetings, the concept of

Board meetings through Video Conference has emerged.

As per the provisions of Section 285 of the Companies

Act, 1956 (The Act), a meeting of the Board of Directors

shall be held in every 3 calendar months. The Act does

not recognize Board meetings held through Video

Conference. However, Directors can participate through

video conference in a duly convened physical Board

meeting, wherein Directors physically present at the

meeting meets the requirements of quorum. The

Directors participating through Video Conference will

not be counted for quorum and they can not vote on any

item.

In order to provide legal sanctity to the Board Meetings

held through Video conference, the Companies Bill,

2009, contains provisions for conducting Board

Meetings through Video Conference. In other words, the

Directors participating through Video Conference will be

counted for the purpose of quorum and they are eligible to

vote on any item of agenda and the proceedings

conducted through Video Conference will be valid under

the Law.

1) It will provide an opportunity to Directors to

participate in Board meetings, who are unable to

attend physically;

2) Reduces cost of Transportation;

3) Saves time.

1) Board meetings will continue for a longer period of

time and having Video Conference connectivity

during the duration of meeting is practically not

possible due to technical problems. This will defeat

the true spirit of meeting.

2) Board Meeting through Video Conference will be

like attending a seminar wherein one person speaks

and all others will listen. There will not be any

scope for one to one interaction due to timing

difference in receiving of voice from one end to

other. Audibility problems will further disrupt the

meeting.

3) In any meeting, Body language will play a major

Advantages

Disadvantages

4

Corporate Secretary January, 2010

role in expressing a view or convincing other

person(s) on a particular issue, whereas in Video

Conference due to lack of picture clarity it will be

difficult to see the expression of other person and

there will be little scope for informal discussions.

4) Generally in a Board meeting, senior management

personnel and auditors will make a presentation

on Financials and operational performance. The

Directors participating through Video Conference

can not see the presentation, thus they can not

provide any valuable input/strategy for

development of business.

5) Some times certain additional information will be

placed on the table of meeting to support an

agenda item, which can be accessed only by

Directors who are physically present.

6) Meetings through Video Conference will be

suitable for internal meetings like review meetings

by Managing Director or Executive Director with

employees working in branches or in factories.

The Government shall make it mandatory to have

physical Board Meetings for consideration of following

Important items to be discussed in Physical Board

Meeting.

important items:

i) Approval of accounts.

ii) Corporate restructuring.

iii) Issue of further shares by way of Bonus, Rights or

Preferential issue.

iv) Buy Back of shares.

v) Declaration of dividend.

vi) Reduction of capital.

vii) Inter corporate investment, Loans or Guarantees.

viii) Raising of Debt.

ix) Any other item which are significant in nature.

In view of the operations of the Companies spread in

various Countries, we can not completely do away with

the Board meetings through Video Conference. It will be

the responsibility of the individual Boards to ensure that

certain important decisions are taken only in Board

meetings wherein Directors are physically present. The

Government shall also provide guidelines for conducting

Board Meetings through Video Conference.

Conclusion

ATTENTION !

1. Working Days Monday to Friday (Closed on Saturday, Sunday and Gazetted Holidays)

2. Office Timings 10.00 AM to 6.30 PM

3. Lunch Break 1.30 PM to 2.00 PM

4 Sale of Publications & Registrations 10.30 AM TO 05.30 PM

Members are requested to note the change of office hours & working days of the ICSI- Hyderabad Chapter w.e.f 01.01.2010

VOLUNTARY SERVICES EXTENDED BY THE MEMBERS DURING THE MONTH OF DECEMBER, 2009

Sl.No

01

Name of the Members

CS M. Vaidyanathan

Nature of the Support/Services Rendered

For his address on Cyber Laws & E Governance

8

Corporate Secretary January, 2010

Report on Indian Corporate Week

The Hyderabad Chapter conducted the following

programmes as part of the India Corporate Week

celebrations

a) Report on Joint Programme

The Ministry of Corporate Affairs, Government of

India, has declared that the third week of December

every year will be observed as “India Corporate Week”.

Efforts have been made to highlight Corporate societal

obligations and further inclusive growth. An

awareness is being created among the members,

thereby corporate, about openness, Corporate

Governance, Corporate Social Responsibility and the

Ministry's initiatives for redressal of grievances.

a) A Joint Programme with ASSOCHAM, The

Federation of Andhra Pradesh Chambers of

Commerce and Industry Institute of Cost and

Works Accountants of India and Institute of

Public Enterprise

b) Quiz competition Corporate Governance & MCA

for students in association with All India Radio

c) A Programme on Cyber Laws & E Governance.

This was organized on 17 December 2009 at the

FAPCCI premises

The event was presided over by Mr. K. Harishchandra

Prasad, President, FAPCCI. The programme was

inaugurated by the ceremonial lighting of the lamp.

The President, FAPCCI in his welcome address invited

Mr. Rahul Chandra, Executive Officer, ASSOCHAM,

CS Datla Hanumanta Raju, President, ICSI, Mr. Gali

Narayana Rao, Chairman, ICWAI, Hyderabad Chapter,

Dr. R. K. Mishra, Director, I P E, CS A.Visweswara Rao,

Chairman, ICSI - Hyderabad Chapter, Mr.

Chakranarayan, Registrar of Companies, Hyderabad,

Mr. E. Selvaraj, Director, Ministry of Corporate Affairs,

New Delhi and Mr.B.K. Bansal, Regional Director,

Ministry of Corporate Affairs, Southern Region,

Chennai.

The representatives from the Ministry of Corporate

Affairs highlighted the MCA initiatives and stressed

upon Social Responsibility, Corporate Governance and

Inclusive Growth. The motto of the Ministry being

“Friends First Regulators Later” was indicative of the

new approach to development and social upliftment,

where the corporate sector is also expected to be a

contributory to all round development.

For the first time the Chapter organized a Students Quiz

Programme on the topic Corporate Governance & MCA

on Friday , 18 December 2009 in All India Radio on the

eve of India Corporate Week which was broadcast on 23

December 2009. Questions were framed in such way

as to reflect the objects of the week. CS A. Visweswara

Rao, Chairman of the Chapter welcomed the students

and informed the objectives of conducting the Quiz on

the event of India Corporate Week and also acted as the

Judge. CS Rajnish C Popat, Vice Chairman of the

Chapter and CS R. Chandra Sekhar, Executive Officer

acted as Quiz Masters. Mr. V.S. Raju, Chapter official

acted as scorer and coordinated the Programme .

The Chapter organized a Study Circle Meeting on Cyber

Laws & E-Governance on the eve of India Corporate

Week on 19 December 2009. Mr. Vijay Bhaskar, Official

Liquidator, Andhra Pradesh was the Chief Guest. He

highlighted the importance of India Corporate Week and

also spoke about the major benefits of MCA21. He also

stressed the importance of winding up proceedings and

misfeasance proceedings against the directors and said

Company Secretaries have a larger role to play in this

regard. CS M. Vaidyanathan was the speaker on Cyber

Laws and E Governance. He spoke on the important

amendments in Information Technology (Amendment)

Act, 2008 and said that for the first time the concept of

Data Protection was introduced in a small way vide

sections 43A and 72. He also stressed the importance of

the amendments and the new role the corporates would

be required to play in this regard, particularly the

security practices and procedures . He also spoke on e-

governance systems currently in vogue and suggested

various measures for its improvement.

b) Report on Quiz Programme with All India Radio:

c) Report on Study Circle Meeting on Cyber Laws & E

Governance

ACTIVITY REPORTS

An ISO 9001 : 2000 Chapter

HYDERABADCHAPTER

Cordially invite you for along with your families

on

Saturday the 30th January, 2010, from 5.30 pm onwards

at SAILING CLUB, ANNEXE, OPP: MARRIOT, TANKBUND, HYDERABAD.

“Annual Fellowship Meet”

FEE DETAILS

On or before

25.01.2010

28.01.2010

Adults

250

300

Child (below 12 Years)

125

150

Games for Children

Games for Members and Families

Songs

Cultural Programmes

Dinner

Note : Members who are interested to perform / showcase their talents may give their names to the Chapter on or before 25th January, 2010

Registration form

Name of the Member : .........................................................................Membership No..................................

No. of Adults Accompanying :....................... No. of Childern (Below 12 years) Accompanying :................

Parcticipation Fee : Rs. .....................................................................................................................................

By way of Cash/Cheque No...................................................... Dated : ...........................................................

Signature of the member

Corporate Secretary January, 2010

RNI Reg.No.APENG/2004/13271 dated 04.10.2004 Postal Regn. No. LII / RNP / H-HD-1047/2008-10

Editor : CS Sudheendra Putty,

Printed and Published by : CS R. Chandra Sekhar, on behalf of The Institute of Company Secretaries of India - Hyderabad Chapter, 6-3-609/5, Anand Nagar, Khairatabad, Hyderabad - 04 and printed at Surya Graphics, Municipal Market Lane, Chikkadpally, Hyderabad - Tel : 27666135, 66752838 and published at The Institute of Company Secretaries of India - Hyderabad Chapter, 6-3-609/5, Anand Nagar, Khairatabad, Hyderabad - 4 Phones : 23399541/23396494.Editor : CS Sudheendra Putty, The Institute of Company Secretaries of India - Hyderabad Chapter, 6-3-609/5, Anand Nagar, Khairatabad, Hyderabad - 500 004

Views expressed by contributors are their own and the Institute of Company Secretaries of India - Hyderabad Chapter does not accept any responsibility.

NEWS LETTER COMMITTEE

PRINTED MATTER - BOOK POST

To.

From :

An ISO 9001 : 2000 Chapter

I No. 6-3-609/5, Anandnagar Colony, Khairatabad, Hyderabad 500 004tel 040-2339 9541, 2339 6494 fax +91-40-2332 5458 email hyderabad@icsi.edu

HYDERABADCHAPTER

Investor Awareness Programme at

Bhimavaram on 30.12.2009

CS A. Visweswara Rao, Chairman of the Chapter

addressing the gathering at Investor Awareness Programme

at Tadepalligudem on 30.12.2009