Monthly Archives: April 2014

Lupin Recalling 9,210 Bottles Of Suprax Drugs For Failure To Pass Purity Test

Lupin Recalling 9,210 Bottles Of Suprax Drugs For Failure To Pass Purity TestPharmaceutical companies are not taking Indian and foreign laws very seriously. As a result both domestic and international pharmaceutical authorities are taking punitive actions against these companies. For instance, the illegal online pharmacies of India are on hit list of Google and United States federal authorities. Similarly, the Maharashtra Food and Drugs Administration (FDA) has also raided many online pharmacies operating in Mumbai, Thane and Pune and has seized drugs worth Rs. 2 Crore.

Meanwhile the U.S. Food and Drug Administration (U.S. FDA) has issued the Import Alert 66-40- Detention Without Physical Examination Of Drugs From Firms Which Have Not Met Drug GMPs (PDF). It has banned import of pharmaceutical products from many Indian pharmaceutical companies. The notification would allow the detention without physical examination of drugs from firms which have not met drug good manufacturing practices (GMPs).

There are many Indian pharmaceutical companies on this list. Obviously, they cannot afford to get their products detained and forfeited and the only choice seems to be to recall the products that fail to meet the prescribed standards and criteria. It has been reported that Lupin Ltd is recalling 9,210 bottles of infection-preventing drug Suprax which failed a purity test in the United States.

The Suprax recall is the second for India’s fourth-largest drugmaker by sales, after pulling nearly 65,000 bottles from the U.S. in January last year because of discoloration. Other companies like Ranbaxy Laboratories Ltd, Sun Pharmaceutical Industries Ltd and Dr. Reddy’s Laboratories Ltd have also recalled their products in the past.

The latest recalled bottles of Suprax, used to prevent or treat bacteria-related infection, “did not meet specification in total impurities”, the FDA said on its website on Monday. The FDA classified the incident as a Class III recall, meaning use of or exposure to the drug is unlikely to cause any adverse health consequences.

US FDA Issues Import Alert 66-40 Banning Import Of Pharmaceutical Products From Many Indian Companies

US FDA Issues Import Alert 66-40 Banning Import Of Pharmaceutical Products From Many Indian CompaniesThe United States Food and Drug Administration (U.S. FDA) has recently issued the Import Alert 66-40- Detention Without Physical Examination Of Drugs From Firms Which Have Not Met Drug GMPs (PDF). Many Indian pharmaceutical companies have been listed on this negative list and their pharmaceutical products would not be allowed to be imported in U.S. till they are in compliance with the requirements prescribed by U.S. FDA.

For instance, the FDA sent a warning letter to Canton Laboratories in Gujarat, India, in February for a list of serious infractions, including falsifying data. The agency has taken the next step, issuing an import alert that bans products from the facility. The alert, posted last week on the FDA website, bans all of the Indian company’s drugs and drug products, from antimicrobials to root canal cleansers, as well as some food and animal products. It all came down to not meeting good manufacturing practices.

The warning letter noted that employees were not getting equipment clean enough between batches to prevent cross contamination. The company’s certificates of analysis had been showing that its APIs were within limits for microbial and metal content, but there was a problem with those tests. The FDA said: “Multiple personnel confirmed that your firm did not perform the microbial tests reported on the CoAs”.

The FDA has seen repeated instances of Indian drugmakers falsifying analytics. The agency leveled similar complaints against drugmaker USV in Mumbai recently, and the same kinds of problems factored into the long-running problems at India’s Ranbaxy Laboratories and at Wockhardt, two Indian companies that have had plants banned from shipping to the U.S. in the last year. It was also noted in a warning letter issued last year to an Indian facility owned by Germany’s Fresenius Kabi.

The nonstop problems at Ranbaxy led to a deal announced last week in which Sun Pharmaceutical will trade $3.2 billion in stock to take over India’s largest generic drugmaker. Sun Pharma, which had one of its own Indian plants banned by the FDA in March, says it will make a priority of getting Ranbaxy’s processes upgraded and its compliance problems resolved.

India’s issues with manufacturing have become a flashpoint for the two countries. FDA Commissioner Margaret Hamburg made her first trip to India in February, where she stressed quality and urged industry and government leaders to step up efforts.

Detention Without Physical Examination Of Drugs From Firms Which Have Not Met Drug GMPs: Import Alert 66-40 Of US FDA

Detention Without Physical Examination Of Drugs From Firms Which Have Not Met Drug GMPs Import Alert 66-40 Of US FDAThe United States Food and Drug Administration (U.S. FDA) has issued the import alert No. 66-40 that deals with Detention Without Physical Examination of Drugs From Firms Which Have Not Met Drug Good Manufacturing Practices (GMPs). This import alert represents the Agency’s current guidance to FDA field personnel regarding the manufacturer(s) and/or products(s) at issue. It does not create or confer any rights for or on any person, and does not operate to bind FDA or the public.

For the alert, please see Import Alert 66-40- Detention Without Physical Examination Of Drugs From Firms Which Have Not Met Drug GMPs (PDF).

As per U.S. FDA detention without physical examination (DWPE) may be appropriate when an FDA inspection has revealed that a firm is not operating in conformity with current GMPs. DWPE may also be appropriate when FDA receives information concerning inspections conducted by foreign or other government authorities under a Memorandum of Understanding or other agreement that FDA concludes reveals conditions or practices warranting detention of either particular products or all products manufactured by a firm.

DWPE of such firms remains in effect until such time as FDA is satisfied that the appearance of a violation has been removed, either by reinspection or submission of appropriate documentation to the responsible FDA Center.

Districts may detain, without physical sampling and analysis, the indicated drug products from the foreign processors noted in the Red List of this import alert.

Foreign processors listed on the Red List of this import alert who would like to request removal from that list should provide information to FDA to adequately demonstrate that the manufacturer has resolved the conditions that gave rise to the appearance of the violation, so that the agency will have confidence that future entries will be in compliance. This may include a letter detailing its corrective actions, accompanied by documentation.

Some of the Indian firms/companies listed under this alert are Amsal Chem Pvt. Ltd. A-1/401-402-403, GIDC , Ankleshwar, Gujarat, Apotex Pharmachem India Pvt Ltd. Plot No.: 1A, Bommasandra , Industrial Area, 4th Phase , Bangalore, Aurobindo Pharma Limited, Unit VI, Unit 6, Survey No. 329/39 & 329/47 , Chitkul Village, Patancheru Mandal , Hyderabad, Andhra Pradesh, Canton Laboratories Pvt. Ltd.110 A & B GIDC Industrial Estate , Makarpura , Baroda, Gujarat, Fleming Laboratories Limited, Plot No. 48, Temple Rock Enclave , Tarbund X Road , Secunderabad, Fleming Laboratories Ltd. Survey 270, Navabpet Village , Shivampet Mandal, Medak District, Andhra Pradesh, Global Calcium Private Limited,  No. 19 & 19B, Sipcot Industrial Complex , Krishnagiri District , Hosur, Tamil Nadu, Global Calcium Pvt, Box 3411 , Bangalore, Global Calcium Pvt Ltd, 711 Karomangala 111 Block, Global Calcium Pvt Ltd, No 1 2 Nd Floor 17th Main , Bangalore,Global Calcium Pvt. Limited, 125/126 Sipcot Industrial Complex , Hosur, Tamil Nadu, Kamud Drugs Pvt. Ltd. N-608, MIDC, Kupwad , Sangli, M.S., Konduskar Laboratories Pvt Ltd. T-47 Kagel Hatkanangale Five Star, MIDC , Talandage (Village), Tal: Kagal, , Maharashtra State, Marck Biosciences Ltd. Plot No. 876, N.H. – 8 , Vill: Hariyala, Tal: Matar , Kheda, Gujarat, Micro Labs Limited.  Plot No. 113-116 4th Phase KIADB , Bommasandra Industrial Area,Anekal Taluk , Bangalore, Nivedita Chemicals Pvt. Ltd. A14 MIDC Andheri East , Mumbai, Nivedita Chemicals Pvt. Ltd. A-14 M.I.D.C. Andheri (East) , Maharashtra, RPG Life Sciences Limited. 3102/A G.I.D.C. Estate , 393002 , Ankleshwar, Gujarat, RPG Life Sciences Limited. 25, M.I.D.C. Land, Thane-Belapur Road, Thane, Maharashtra, Ranbaxy Laboratories Limited. Phase III Industrial Area SAS Nagar , Mohali, Punjab, Ranbaxy Laboratories Ltd.- Sirmour Village & Post Office Ganguwala , Tehsil, Paonta Sahib , Simour District, Himachal Pradesh, Ranbaxy Laboratories, Ltd. SEZ Unit 1, Plot No. A-41, Industrial Area Phase VIII, SAS Nagar, Chandigarh, Ranbaxy Laboratories, Ltd. Industrial Area No. 3, Madhya Pradesh , Dewas, MP, Sentiss Pharma (frmly: Promed Exports), Village Khera Nihla, Tehsil Nalargarh , District Solan, , Himachal Pradesh, Smruthi Organics Limited. Plot No. A-27, MIDC, Chincholi , Solapur District, Maharashtra, Stericon Pharma Pvt. Ltd. No. 9, Sub Layout Of Plot 9 , 1st Phase Bommasandra Ind. Area , Bangalore, Karnataka, Sun Pharmaceutical Industries Limited – Karkhadi. Plot No. 817/A, Village – Karkhadi , Taluka – Padra District , Vadodara, Gujarat, Unique Chemicals. Plot P-10, Shiv Mahape Gansoli , Thane Belapur Road, Maharashtra State , Navi Mumbai, Vignesh Life Science Pvt Ltd. 202 Sarada Residency , H – 26 , Madhura Nagar Ameerpet , Hyderabad, Tamil Nadu, Vignesh Life Sciences Pvt., Ltd. 93 & 94 P Mundargi Industrial Estate , Bellary Karnataka, Wintac Limited. 54/1, Boodhihal Village, Nelamangala , Taluk , Bangalore Rural, Karnataka, Wintac Limited. 163 Reservior Str , Bangalore, Wockhardt Limited. L-1, MIDC Area, Jalgaon Road 43 , Chikalthana , Aurangabad, Maharashtra, Wockhardt Limited. Biotech Park, Plot H-14/2 , M.I.D.C. Area Waluj , Aurangabad, Maharashtra and Yag Mag Labs Private Limited. Survey No. 10, Gaddapotharam Village, , Jinnatam Mandel , Medak District, AP.

CBDT India Directs Chief Commissioners To Raise Tax Evasion Issues With MCA For Mergers And Acquisition Deals

CBDT India Directs Chief Commissioners To Raise Tax Evasion Issues With MCA For Mergers And Acquisition DealsMergers and acquisitions (M&A), transfer pricing and ownership control exercises are not new in India. However, they have become bone of contention between the income tax department of India and many companies. As a result neither the tax authorities nor the companies are happy with this environment. On top of it, the corporate compliance requirements have significantly increased after the enactment of Companies Act, 2013.

India has already proposed establishment of Income Tax Overseas Units (ITOUs) of India in foreign countries so that tax evasion become difficult. Now the Finance Ministry has decided to scrutinise mergers and acquisitions dealings in India. As per media report, the Finance Ministry has asked its officials to ensure that mergers and acquisitions deals do not result in loss to the exchequer.

In fact, the Central Board of Direct Taxes (CBDT) has issued a communication to Chief Commissioners that the concerned revenue officials should raise concerns on tax issues while submitting their comments on mergers and acquisition deals to the Ministry of Corporate Affairs (MCA) so that they could be incorporated in reports to the High Court. As per the communication, the officials should “object to the scheme of amalgamation if the same is found prejudicial to interest of revenue”.

Under the current rules, Regional Directors of MCA are required to obtain specific comments from the Income Tax Department within 15 days of the receipt of notice before filing response to the Court on mergers and acquisitions. The MCA is also required to incorporate comments and inputs from the Income Tax Department so as to ensure that the proposed scheme of reconstruction or amalgamation has not been designed in such a way to defraud the revenue and consequently prejudicial to public interest. M&As are required to be vetted by the concerned High Court to be effective.

The CBDT has issued the instructions after a High Court rejected its intervention application in a case of amalgamation saying the tax department has no locus standi in the matter as the Regional Director, MCA enjoys that power.

Indian Tax Department Received 232 Applications From MNCs In 2013-14 For Advance Pricing Agreement

Indian Tax Department Received 232 Applications From MNCs In 2013-14 For Advance Pricing AgreementTransfer pricing issues have become a bone of contention for multi national corporations (MNCs) operating in India. In fact, Vodafone, Nokia and Shell have already received notices from income tax authorities of India regarding transfer pricing and other taxation issues. Indian government has also proposed establishment of Income Tax Overseas Units (ITOUs) of India in foreign countries to deal with evasion of taxes. The compulsory transfer pricing audit based on monetary threshold may also be scrapped in India.

Meanwhile, the Indian tax department has received 232 applications from MNCs in 2013-14, up 60 per cent year-on- year, to obtain advance ruling over pricing arrangement for transactions within group firms and the ensuing tax liability. In 2012-13, 146 companies had applied for Advance Pricing Agreement, a mechanism that aims at curtailing disputes that may arise from transfer pricing issues between MNCs and the revenue department.

Of the 232, 206 companies are seeking “unilateral APA” (pact between tax payer and CBDT). The rest applied for “bilateral APA” (pact between taxpayers, tax authorities of the host country and the foreign tax administration), sources said. Transfer pricing of complex international transactions is generally negotiated under an APA. India introduced APA through Finance Act 2012 to provide transfer pricing certainty to the taxpayers.

On March 31, the authorities here signed 5 “unilateral APAs” making it one of the fastest turnarounds in transfer pricing history across the world. These agreements cover different industrial sectors like pharmaceutical, telecom and financial services. Generally, an APA is valid for up to 5 years and the Act provides for renewal, revision or cancellation of an APA under certain circumstances. During the 5-year period, the taxpayer is required to file an annual report to confirm compliance with the terms of the APA. The authorities then conduct limited audit of the taxpayer to ensure compliance with the terms of the APA.

As per the APA rules notified by the Finance Ministry in 2012, fee for entering into APA with the CBDT would be Rs 10 lakh for international transaction of up to Rs 100 crore; Rs 15 lakh for up to Rs 200 crore and Rs 20 lakh for transactions above Rs 200 crore.

India May Scrap The Compulsory Transfer Pricing Audit Based On Monetary Threshold Limits

India May Scrap The Compulsory Transfer Pricing Audit Based On Monetary Threshold LimitsIndia has been struggling hard to deal with transfer pricing and taxation issues. Even Vodafone, Nokia and Shell received notices from income tax authorities of India regarding transfer pricing and other taxation issues. Indian government has also proposed establishment of Income Tax Overseas Units (ITOUs) of India in foreign countries. A notification for issues relating to export of computer software and corresponding direct tax benefits has also been issued by Indian government.

We at Perry4Law believe that transfer pricing laws and regulations in India need clarification. Similarly, issues like avoidance of tax by certain transactions in securities, avoidance of income-tax by transactions resulting in transfer of income to non residents, international transaction and arm’s length price, etc also required to be taken care of. All this requires a pragmatic and holistic approach on the part of Indian government.

Working in this direction, the Indian government is planning to scrap the Rs. 15 crore threshold limit for referring every international transaction between an multi national corporation’s (MNC) arms for compulsory transfer pricing audit, and about to embrace a more focused approach to zero in on cross-border transactions with potential for tax evasion.

The proposed risk-based selection of transactions between MNC arms for transfer pricing audit will spare many companies the unnecessary hassle and help reduce tax litigation. Experts say the “risk-based” approach is much more efficient than the monetary threshold-based scrutiny and audit. The proposal, which is under the tax department’s consideration, would be taken up by the next government as part of tax administration reforms, sources said.

At present, assessment officers refer every cross-border transaction above the threshold between associated enterprises to a transfer pricing officer, who checks whether it is on the arm’s length basis. If it is found to be a dictated price with little relation to cost or value-addition, the assessing officer recomputes the income and makes extra tax claim. Choosing cases based on the monetary threshold leads to overburdening of field officers. Sources said that every TPO in India has to do about 50 audits a year on an average compared to 5-6 that his UK counterpart does. This seriously affects the scope and depth of the audit. Selecting only those cases for audit that indicate a high risk of revenue loss would enable the tax department to devote more time and go deeper into minute details.

The idea of selecting transactions for audit based on their risk of revenue leakage stems from India’s discussions with the OECD, which is working on new transfer-pricing documentation rules and a format for country-by-country reporting of income, taxes and economic activity of MNCs.

Cyber Law And Cyber Security Obligations Of The Directors Of Companies Operating In India

Cyber Law And Cyber Security Obligations Of The Directors Of Companies Operating In IndiaMost of the provisions of the Indian Companies Act, 2013 (PDF) have been recently notified by the Ministry of Corporate Affairs (MCA). These include the relevant Rules under various chapters of the Companies Act 2013 as well. For the first time the Companies Act 2013 and the Rules are talking about cyber law and cyber security obligations on the part of Indian and foreign companies operating in India and their directors and key personnel.

Thus, the regulatory compliances under Indian Companies Act 2013 have been given a new meaning. The increased cyber obligations under the 2013 Act now require the companies to comply with techno legal requirements in India. These include cyber law due diligence (PDF), cyber security due diligence, e-discovery compliances, cyber forensics, etc. Even the cyber security obligations of law firms in India has significantly increased and various stakeholders, including companies and law firms, must keep in mind the international  legal issues of cyber security.

The cyber security trends and development in India 2013 (PDF), provided by Perry4Law’s Techno Legal Base (PTLB), have also indicated that various corporate stakeholders would be required to comply with cyber law and cyber security related obligations in the near future. As on date, companies and directors are not complying with the cyber law and cyber security obligations as prescribed by Indian laws and regulations.

Although we have no dedicated cyber security law in India as on date yet the same may be formulated in the near future as India has announced that cyber security breach disclosure norm would be formulated very soon. There is no doubt that cyber security breaches notification in India must be made mandatory as these cyber security breaches would raise serious cyber security issues.

Section 1(4) of the Indian Companies Act, 2013 provides that the provisions of this Act shall apply to—

(a) companies incorporated under this Act or under any previous company law;

(b) insurance companies, except in so far as the said provisions are inconsistent with the provisions of the Insurance Act, 1938 or the Insurance Regulatory and Development Authority Act, 1999;

(c) banking companies, except in so far as the said provisions are inconsistent with the provisions of the Banking Regulation Act, 1949;

(d) companies engaged in the generation or supply of electricity, except in so far as the said provisions are inconsistent with the provisions of the Electricity Act, 2003;

(e) any other company governed by any special Act for the time being in force, except in so far as the said provisions are inconsistent with the provisions of such special Act; and

(f) such body corporate, incorporated by any Act for the time being in force, as the Central Government may, by notification, specify in this behalf, subject to such exceptions, modifications or adaptation, as may be specified in the notification.

Section 2 of the Indian Companies Act, 2013 provides that in this Act, unless the context otherwise requires,—

(20) “company” means a company incorporated under this Act or under any previous company law;

(34) “director” means a director appointed to the Board of a company;

(42) “foreign company” means any company or body corporate incorporated outside India which—

(a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and

(b) conducts any business activity in India in any other manner.

(51) “key managerial personnel”, in relation to a company, means—

(i) the Chief Executive Officer or the managing director or the manager;

(ii) the company secretary;

(iii) the whole-time director;

(iv) the Chief Financial Officer; and

(v) such other officer as may be prescribed;

(59) “officer” includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act;

(60) “officer who is in default”, for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:—

(i) whole-time director;

(ii) key managerial personnel;

(iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified;

(iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default;

(v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity;

(vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance;

(vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer;

(94) “whole-time director” includes a director in the whole-time employment of the company;

These definitions and other provisions under the Companies Act 2013 have imposed many obligations upon the directors of a company to safeguard company’s interests. These include safeguarding the assets of the company and for preventing and detecting fraud and other irregularities during the conduct of company’s business.

The board of directors would also be required to attach to statements laid before a company in general meeting a report about various compliances under the Companies Act 2013. These include cyber law, cyber security, e-discovery, cyber forensics and many more such techno legal compliance obligations on the part of directors.

The directors must also prove that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Now this would require techno legal expertise as cyber law and cyber security issues are not easy to manage.

The board of directors must also issue a statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

The directors, in the case of a listed company, must also formulate internal financial controls to be followed by the company and such internal financial controls must be adequate and must operate effectively. The term “internal financial controls” means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

If a company contravenes these provisions, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.

Directors Liability Under The Indian Companies Act 2013

Directors Liability Under The Indian Companies Act 2013A major portion of the Indian Companies Act, 2013 (PDF) has been notified recently by the Ministry of Corporate Affairs (MCA). With the notification of various provisions of the Act and the Rules thereunder, the regulatory compliances under Indian Companies Act 2013 have been given a new meaning. The increased cyber obligations under the 2013 Act now require the companies to comply with techno legal requirements in India. These include cyber law due diligence (PDF), cyber security due diligence, e-discovery compliances, etc.

Companies function through board of directors and the board plays an important role in complying with the requirements of the company law. The 2013 Act has enhanced the liabilities and obligations of the directors. The new company law regime prescribes management and inspection of documents in electronic form, electronic voting, electronic notices, etc that require a techno legal compliance on the part of Indian companies. The directors are under an obligation to comply with techno legal requirements of not only the 2013 Act but also the Information Technology Act, 2000 and other related laws.

The Companies (Appointment and Qualification of Directors) Rules, 2014 (PDF) have imposed many obligations upon the directors of a company. Rule 14 (1) of the same prescribes that every director shall inform to the company concerned about his disqualification under sub-section (2) of section 164, if any, in Form DIR-8 before he is appointed or re-appointed.

Rule 14(2) states that whenever a company fails to file the financial statements or annual returns, or fails to repay any deposit, interest, dividend, or fails to redeem its debentures, as specified in sub-section (2) of section 164, the company shall immediately file Form DIR-9, to the Registrar furnishing therein the names and addresses of all the directors of the company during the relevant financial years.

Rule 14(3) states that when a company fails to file the Form DIR-9 within a period of thirty days of the failure that would attract the disqualification under sub-section (2) of section 164, officers of the company specified in clause (60) of section 2 of the Act shall be the officers in default.

Section 2(60) of the Indian Companies Act, 2013 provides that an “officer who is in default”, for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:—

(i) whole-time director;

(ii) key managerial personnel;

(iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified;

(iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default;

(v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity;

(vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance;

(vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer;

Rule 15 states that the company shall within thirty days from the date of receipt of notice of resignation from a director, intimate the Registrar in Form DIR-12 and post the information on its website, if any.

Rule 16 states that where a director resigns from his office, he shall within a period of thirty days from the date of resignation, forward to the Registrar a copy of his resignation along with reasons for the resignation in Form DIR-11 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.

The Companies (Management and Administration) Rules, 2014 (PDF) also prescribe many techno legal and cyber security obligations upon the directors of a company. The directors must be well versed with the techno legal regulatory provisions under the Companies Act 2013 and other technology laws of India.